Exhibit 10.4

Execution Version

AMENDED AND RESTATED CREDIT LINE NOTE

 

Borrower Name

 

MCGRATH RENTCORP, a California corporation

Borrower Address

 

5700 Las Positas Road Livermore, California 94550

Office

East Bay Corporate Banking

Maturity Date

March 31, 2025

Loan Number 6051817902

 

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Amount

$12,000,000

 

$12,000,000March 30, 2020

 

FOR VALUE RECEIVED, on March 31, 2025, the undersigned ("Borrower") promises to
pay to the order of MUFG UNION BANK, N.A. ("Bank”), as indicated below, the
principal sum of  Twelve Million Dollars ($12,000,000), or so much thereof as is
disbursed, together with interest on the balance of such principal sum from time
to time outstanding, at a per annum rate equal to the Reference Rate plus the
Applicable Margin, such per annum rate to change as and when  the Reference Rate
shall change. Amounts borrowed hereunder may be repaid  and  reborrowed.
Borrower may at any time prepay amounts borrowed hereunder (including in
connection with any termination by Borrower of the Sweep
Service  as  defined  in  the  Amended and Restated Facility Letter referred to
below) without penalty or premium.

 

As used herein, the term “Applicable Margin” shall mean (i) 0.25% per annum from
the date of this note to but excluding the date of any change in such interest
rate margin required by a change in the Consolidated Leverage Ratio as provided
for in this definition, (ii) 0.75% per annum, effective on the first day of the
month following the month in which Bank receives a financial statement from
Borrower demonstrating a Consolidated Leverage Ratio for the fiscal quarter
covered thereby was greater than 2.25:1.00, (iii) 0.50% per annum, effective on
the first day of the month following the month in which Bank receives a
financial statement from Borrower demonstrating a Consolidated Leverage Ratio
for the fiscal quarter covered thereby was less than or equal to 2.25:1.00 but
greater than 1.75:1.00, (iv) 0.25% per annum, effective on the first day of the
month following the month in which Bank receives a Financial Statement from
Borrower demonstrating a Consolidated Leverage Ratio less than or equal to
1.75:1.00 but greater than 1.25:1.00, and (v) 0.00% per annum, effective on the
first day of the month following the month in which Bank receives a financial
statement from Borrower demonstrating  a Consolidated Leverage Ratio for the
fiscal quarter covered thereby less than or equal to 1.25:1.00; provided,
however, that if Borrower fails to deliver any financial statement to Bank
within the required time period set forth in the Multibank Agreement (as defined
in that certain amended and restated facility letter  between Borrower  and
Bank  dated as of  March    ,    2020 (“Facility Letter”)), then the
Consolidated Leverage Ratio for the fiscal quarter covered thereby shall be
deemed to be greater than 2.25:1.00 until such financial statement is delivered
to Bank.

 

As used herein, the term "Reference Rate" shall mean the rate announced by Bank
from time to time at its corporate headquarters as its "Reference Rate." The
Reference Rate is an index rate

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determined by Bank from time to time as a means of pricing certain extensions of
credit and is

 

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neither directly tied to any external rate of interest or index nor necessarily
the lowest rate of interest charged by Bank at any given time.

 

All computations of interest under this note shall be made on the basis of a
year of 360 days, for actual days elapsed.

 

 

1.

PAYMENTS.

 

1.1INTEREST PAYMENTS. Borrower shall pay interest on the last day of each
quarter commencing on the first such date to occur after the first advance under
this note. Should interest not be so paid, it shall become a part of the
principal  and thereafter bear interest as herein provided.

 

1.2PRINCIPAL PAYMENTS. All principal outstanding on this note is due and payable
on the earlier of March 31, 2025 or any accelerated maturity date.

 

Borrower shall pay all amounts due under this note in lawful money of the United
States to Bank at P.O. Box 30115, Los Angeles, CA 90030-0115, or such other
office as may be designated by Bank, from time to time.

 

2.INTEREST RATE FOLLOWING EVENT OF DEFAULT. While any Event of Default is
continuing, at the option of Bank, and, to the extent permitted by law, interest
shall be payable on the outstanding principal under this note at a per annum
rate equal to two percent (2%) in excess of the interest rate specified in the
initial paragraph of this note, calculated from the date of such Event of
Default until the earlier of (a) the date of discontinuance of such Event of
Default and (b) the date on which all amounts payable under this note are paid
in full.

 

3.EVENTS OF DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Each of the following
shall constitute an “Event of Default”: (a) the failure of Borrower to make any
payment required under this note when due; (b) any breach by Borrower, any
guarantor, co-maker endorser, or any person or entity other than Borrower
providing security for this note (hereinafter individually and collectively
referred to as the "Obligor") in any material respect of any of its material
obligations under the Facility Letter or any security agreement or guaranty of
this note, which breach shall remain unremedied for 30 days after notice; (c)
any representation of any Obligor hereunder, or under any security agreement or
guaranty for this note, shall prove to have been false in any material respect
when made; (d) the occurrence of any “Event of Default” under the Multibank
Agreement, provided that any waiver of any Event of Default under the Multibank
Agreement will only be effective for purposes of this clause (d) if the Bank
consents in writing; (e) the insolvency of any Obligor or the failure of such
Obligor generally to pay such Obligor’s debts as such debts become due; (f) the
commencement as to any Obligor of any voluntary or involuntary proceeding under
any laws relating to bankruptcy, insolvency, reorganization, arrangement, debt
adjustment or debtor relief; (g) the assignment by any Obligor for the benefit
of such Obligor’s creditors; (h) the appointment, or commencement of any
proceedings for the appointment, of a receiver, trustee custodian or similar
official for all or substantially all of any Obligor’s property, which is not
dismissed within 60 days; and (i) the commencement of any proceeding for the
dissolution or liquidation of any Obligor, which is not dismissed within 60
days. During the continuance of any Event of Default, Bank may declare, in its
discretion, all obligations under this note immediately due and payable;
however, upon the occurrence of an Event of Default under clause (e), (f), (g),
(h) or (i), all principal and interest shall automatically become immediately
due and payable.

 

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4.ADDITIONAL AGREEMENTS OF BORROWER. If any amounts owing under this note are
not paid when due, Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this note. Borrower and  any endorsers of this note for the maximum period of
time and the full extent permitted by law

(a) waive diligence, presentment, demand, notice of nonpayment, protest, notice
of protest, and notice of every kind; (b) waive the right to assert the defense
of any statute of limitations to any debt or obligation hereunder; and (c)
consent to renewals and extensions of time for the payment of any amounts due
under this note. If this note is signed by more than one party, the term
'Borrower" includes each of the undersigned and any successors in interest
thereof; all of whose liability shall be joint and several. The receipt of any
check or other item of payment by Bank, at its option, shall not be considered a
payment on account until such check or other item of payment is honored when
presented for payment at the drawee bank. Bank may delay the credit of such
payment based upon Bank's schedule of funds availability, and interest under
this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Borrower and any endorser of this
note, including their successors and assigns, hereby consents to the
jurisdiction of any competent court within the State of California, except as
provided in any alternative dispute resolution agreement executed between
Borrower and Bank, and consents to service of process by any means authorized by
said state law. The term "Bank" includes, without limitation, any holder of this
note. This note shall be construed in accordance with and governed by the laws
of the State of California.

 

This note is subject to the terms of the Facility Letter between Borrower and
Bank executed in connection herewith but in the event of any conflict between
the terms of such Facility Letter and this note the terms of this note shall
prevail.

 

On and as of the Effective Date, the Credit Line Note, dated March 31, 2016
provided by the Borrower in favor of the Bank shall be amended, restated and
superseded in its entirety by this letter.

 

MCGRATH RENTCORP, a California corporation

 

 

 

By:

Keith E. Pratt

 

Senior Vice President and Chief Financial Officer

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