Exhibit 10.3

Execution Version

June 15, 2012

Mr. Keith E. Pratt

Senior Vice President and

Chief Financial Officer

McGrath RentCorp

5700 Las Positas Road

Livermore, CA 94550

 

Re: $10,000,000.00 Committed Credit Facility

Dear Mr. Pratt:

Union Bank, N.A. (“Bank”) is pleased to offer McGrath RentCorp, a California
corporation (“Borrower”) a committed credit facility (“Facility”) under which
the Bank will make advances to the Borrower from time to time up to and
including June 15, 2017, not to exceed at any time the maximum principal amount
of Ten Million Dollars ($10,000,000.00), to be governed by the terms of the
enclosed Credit Line Note (“Credit Line Note”) in favor of Bank, and subject to
the conditions and agreements set forth below.

1. This Facility is made available only in connection with Borrower’s use of the
Bank’s sweep service for management of its checking account balances (“Sweep
Service”). Therefore, this Facility shall commence on the date (“Effective
Date”) of this letter and this Facility shall terminate, if not earlier
terminated, on the date Borrower ceases to continue as a Sweep Service customer.
Upon such termination Bank shall have no further obligation to fund advances
under this Facility, and all amounts owing under the Credit Line Note shall
become immediately due and payable.

2. As provided in the Credit Line Note, the occurrence of an Event of Default
under the Multibank Agreement shall be a default under this Facility. The term
“Multibank Agreement” as used herein means that certain Credit Agreement dated
as of June 15, 2012, by and among Borrower, Bank, Bank of America, N.A., Wells
Fargo Bank, N.A., U.S. Bank National Association, Citibank, N.A., Fifth Third
Bank, and The Northern Trust Company, as amended, restated, supplemented or
otherwise modified from time to time in accordance with the provisions thereof.
Each capitalized term not otherwise defined herein shall have the meaning set
forth in the Multibank Agreement.

3. In the event the Multibank Agreement terminates or expires prior to the
termination or expiration of this Facility, the provisions of Articles VI and
VII thereof (excluding Section 6.12) shall nevertheless survive as between
Borrower and Bank with respect to this Facility and shall continue in effect (as
in effect on the date of such termination or expiration) until this Facility
terminates or expires.

4. Borrower acknowledges that any amount outstanding under the Credit Line Note
is included within the definition of “Indebtedness” under the Multibank
Agreement.

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McGrath Rentcorp

Page 2

 

5. Borrower shall pay to Bank a non-refundable commitment fee for this Facility,
on the average unused amount of the Facility during such period, for the period
of time during which this Facility is available. Such fee shall be payable in
arrears in quarterly installments on the last day of each March, June,
September, and December, and on the last day this Facility is available, to be
computed at the rate per annum equal to (i) 0.30% if the Consolidated Leverage
Ratio is greater than 2.25:1.00, (ii) 0.25% if the Consolidated Leverage Ratio
is less than or equal to 2.25:1.00 but greater than 1.75:1.00, (iii) 0.20% if
the Consolidated Leverage Ratio is less than or equal to 1.75:1.00 but greater
than 1.25:1.00, and (iv) 0.15% if the Consolidated Leverage Ratio is less than
or equal to 1.25:1.00. The commitment fee shall be computed on a basis of a
360-day year and actual days elapsed.

6. This Facility letter will be governed by the laws of the State of California.

Enclosed is the original Credit Line Note and a copy of this Facility letter
together with an Authorization to Pay Proceeds of Note and Loan Disbursement
Instructions, and any other contract, instrument or document Bank requires to be
executed and delivered in connection with this Facility (each a “Loan
Document”). The Borrower’s executing the Loan Documents and returning them to
Bank together with an appropriate corporate resolution and incumbency
certificate acceptable to Bank constitutes its agreement to the terms and
conditions of this Facility.

To the extent permitted by law, in connection with any claim, cause of action,
proceeding or other dispute concerning the loan documents (each a “Claim”), the
parties to this Facility letter expressly, intentionally, and deliberately waive
any right each may otherwise have to trial by jury. In the event that the waiver
of jury trial set forth in the previous sentence is not enforceable under the
law applicable to this Facility letter, the parties to this Facility letter
agree that any Claim, including any question of law or fact relating thereto,
shall, at the written request of any party, be determined by judicial reference
pursuant to the state law applicable to this Facility letter. The parties shall
select a single neutral referee, who shall be a retired state or federal judge.
In the event that the parties cannot agree upon a referee, the court shall
appoint the referee. The referee shall report a statement of decision to the
court. Nothing in this paragraph shall limit the right of any party at any time
to exercise self-help remedies, foreclose against collateral or obtain
provisional remedies. The parties shall bear the fees and expenses of the
referee equally, unless the referee orders otherwise. The referee shall also
determine all issues relating to the applicability, interpretation, and
enforceability of this paragraph. The parties acknowledge that if a referee is
selected to determine the Claims, then the Claims will not be decided by a jury.

This offer expires on July 31, 2012 unless the executed Loan Documents and the
corporate resolution and incumbency certificate are returned to the Bank by
then. If the Effective Date has not occurred by July 31, 2012 this Facility
letter and the Credit Line Note shall terminate and be of no further force and
effect on such date.

We look forward to continuing to serve you.

Yours truly,

 

UNION BANK, N. A.

By:

 

 

      Henry G. Montgomery III       Vice President

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McGrath Rentcorp

Page 3

 

Accepted And Agreed as of June 15, 2012:

MCGRATH RENTCORP, a

California Corporation

By:

 

 

      Keith E. Pratt       Senior Vice President and       Chief Financial
Officer