Exhibit 10.14

AMENDMENT NO. 2

TO THE

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

DATED MAY 7, 2004

This Amendment No. 2 to Third Amended and Restated Credit Agreement (this
“Amendment”) is dated as of March 28, 2006, by and among McGRATH RENTCORP, a
California corporation (the “Borrower”), the banks listed on the signature pages
hereof (individually a “Bank” and collectively “Banks”), and UNION BANK OF
CALIFORNIA, N.A., as agent (the “Agent”) for the Banks.

Recitals

A. Agent, Banks and Borrower are parties to a Third Amended and Restated Loan
Agreement dated as of May 7, 2004, as amended by that certain Amendment No. 1
thereto dated as of July 11, 2005 (as further amended, modified and supplemented
from time to time, the “Credit Agreement”).

B. Borrower wishes to obtain the release of one of its Active Subsidiaries,
TRS-RenTelco Inc., a company organized under the laws of British Columbia,
Canada (“TRS”), from the Continuing Guaranty given by TRS. Banks are willing to
so release TRS from its Continuing Guaranty and to terminate such Continuing
Guaranty on and subject to the terms and conditions set forth in this Amendment.

C. Each capitalized term used but not otherwise defined herein shall have the
meaning ascribed thereto in the Credit Agreement.

NOW, THEREFORE, the parties hereto hereby agree as follows:

Article I

Amendments to Credit Agreement

This Amendment shall be deemed to be an amendment to the Credit Agreement and
shall not be construed in any way as a replacement or substitution therefor. All
of the terms and conditions of, and terms defined in, this Amendment are hereby
incorporated by reference into the Credit Agreement as if such terms and
provisions were set forth in full therein.

1.1 Each Bank hereby releases, and consents to each other Bank release of, TRS
from the Continuing Guaranty previously executed and delivered by TRS to Agent
for the benefit of the Banks.

1.2 In consideration of the foregoing release and termination, Borrower agrees
to furnish to Agent and each Bank, as part of its annual financial reporting
under Sections 7.3(b) and 7.3(d) of the Credit Agreement commencing with the
reports due within 90 days after December 31, 2005, a certificate listing all of
its Active Subsidiaries, and on a non-consolidated basis for each such Active
Subsidiary, its assets as of the end of the annual financial reporting period,
and its revenues for such annual period, all as part of the Compliance
Certificate required to be delivered under Section 7.3(d). To that end, the form
of Compliance Certificate referenced in Section 7.3(c) of the Credit Agreement
and attached thereto as Exhibit A is hereby replaced in its entirety with the
form of Compliance Certificate attached to this Amendment as Exhibit “A”.

1.3 Notwithstanding the release of TRS from its Continuing Guaranty, TRS shall
continue to be considered an Active Subsidiary for all other purposes of the
Credit Agreement, including without limitation, the provisions of Articles 7, 8
and 9 thereof, so long as it continues to meet the definition of an Active
Subsidiary.

ARTICLE II

Conditions to Effectiveness

of Amendment

2.1 The effectiveness of this Amendment is subject to the fulfillment to the
satisfaction of Agent, in its sole discretion, of the following conditions
precedent:

(a) Enviroplex, Inc. and Mobile Modular Management Corporation shall have
executed and delivered to Agent and to each Bank an original counterpart of an
amendment to and ratification of their Continuing Guaranties

 

1

--------------------------------------------------------------------------------

notwithstanding the release of TRS from its Continuing Guaranty pursuant to this
Amendment, in form and substance satisfactory to each Bank.

(b) Borrower shall have reimbursed Agent its costs and expenses, including
attorneys’ fees and costs, incurred in connection with the negotiation,
preparation and closing of this Amendment.

(c) Agent shall have received appropriate authorization documents, including
corporate resolutions and certificates of incumbency, confirming to Agent’s
satisfaction that all necessary corporate and organizational actions have been
taken to authorize Borrower to enter into this Amendment, and to authorize
Enviroplex, Inc. and Mobile Modular Management Corporation to ratify their
Continuing Guaranties.

(d) Agent shall have received such other documents, instruments or agreements as
Agent may require to effectuate the intents and purposes of this Amendment.

Article III

Representations and Warranties

Borrower hereby represents and warrants to Agent and each Bank that:

3.1 After giving effect to the amendment of the Credit Agreement pursuant to
this Amendment and the consummation of the transactions contemplated hereby
(i) each of the representations and warranties set forth in Article 6 of the
Credit Agreement is true and correct in all respects as if made on the date
hereof (with references to the Credit Agreement being deemed to include this
Amendment), and (ii) there exists no Default or Event of Default under the
Credit Agreement after giving effect to this Amendment.

3.2 Borrower has full corporate power and authority to execute and deliver this
Amendment, and to perform the obligations of its part to be performed thereunder
and under the Credit Agreement as amended hereby. Borrower has taken all
necessary action, corporate or otherwise, to authorize the execution and
delivery of this Amendment. No consent or approval of any person, no consent or
approval of any landlord or mortgagee, no waiver of any lien or similar right
and no consent, license, approval or authorization of any governmental authority
or agency is or will be required in connection with the execution or delivery by
Borrower of this Amendment or the performance by Borrower of the Credit
Agreement as amended hereby.

3.3 This Amendment and the Credit Agreement as amended hereby are the legal,
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally.

Article IV

Miscellaneous

4.1 The Credit Agreement, the other Loan Documents and all agreements,
instruments and documents executed and delivered in connection with any of the
foregoing shall each be deemed to be amended hereby to the extent necessary, if
any, to give effect to the provisions of this Amendment. Except as so amended
hereby, the Credit Agreement and the other Loan Documents shall remain in full
force and effect in accordance with their respective terms.

4.2 Borrower agrees to pay Agent on demand reasonable fees and costs of
attorneys incurred by Agent in connection with the preparation, negotiation and
execution of this Amendment and any document required to be furnished hereunder.

4.3 This Amendment may be executed in any number of counterparts and by
different parties on separate counterparts, including counterparts transmitted
by facsimile or other electronic means, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same instrument and agreement.

[signature pages follow]

 

2

--------------------------------------------------------------------------------

[Signature Page to Amendment No. 2 to Third Amended and Restated Credit
Agreement]

IN WITNESS WHEREOF, Borrower, Banks and Agent have executed this Amendment as of
the date set forth in the preamble hereto.

 

BORROWER:   McGRATH RENTCORP     By:           

Keith Pratt

   

Title:

 

Vice President and Chief Financial Officer

   

Notice Address:

     

5700 Las Positas Road

     

Livermore, California 94550

     

Attention: Mr. Keith Pratt, Chief Financial Officer

     

Fax: 925-453-3200

 

BANKS:         UNION BANK OF CALIFORNIA, N.A.,    

individually and as Agent

    By:           

Henry G. Montgomery

   

Title:

 

Vice President

   

Notice Address:

     

East Bay Commercial Banking Group

     

Two Walnut Creek Center

     

200 Pringle Avenue, Suite 260

     

Walnut Creek, CA 94596-3570

     

Attention: Mr. Buddy Montgomery

     

Fax No.: (925) 947-2424

 

  U.S. BANK NATIONAL ASSOCIATION     By:         

Name:

        

Title:

        

Notice Address:

     

1331 N. California Boulevard, Suite 350

     

Walnut Creek, CA 94596

     

Attention: Scott T. Smith, V.P.

     

Fax No.: (925) 945-6919

 

  BANK OF AMERICA, N.A.     By:         

Name:

        

Title:

        

Notice Address:

     

315 Montgomery Street, 13th Floor

     

San Francisco, CA 94104

     

Attention: Ronald Drobny, Senior V.P.

     

Fax No.: (415) 622-1878

 

3

--------------------------------------------------------------------------------

[Signature Page to Amendment No. 2 to Third Amended and Restated Credit
Agreement]

 

  COMERICA BANK     By:         

Name:

        

Title:

        

Notice Address:

     

1331 N. California Boulevard, Suite 400

     

Walnut Creek, CA 94596

     

Attention: Mark Hillhouse, V.P.

     

Fax No.: (925) 941-1999

 

  WELLS FARGO BANK, N.A.     By:         

Name:

        

Title:

        

Notice Address:

     

1200 Concord Avenue

     

Concord, CA 94520

     

Attention: Martha L. Woods, V.P.

     

Fax No.: (925) 682-7347

 

4

--------------------------------------------------------------------------------

EXHIBIT “A”

TO

AMENDMENT NO. 2 TO THIRD AMENDED AND

RESTATED CREDIT AGREEMENT

RESTATED FORM OF

COMPLIANCE CERTIFICATE

This Compliance Certificate is furnished pursuant to Section 7.3(d) of that
certain Third Amended and Restated Credit Agreement dated as of May 7, 2004,
among the Borrower, certain Banks parties thereto and Union Bank of California,
N.A., as Agent for the Banks, as from time to time modified, supplemented or
amended (the “Agreement”). Unless otherwise defined, all capitalized terms used
in this Compliance Certificate have the respective meanings ascribed to them in
the Agreement.

Borrower hereby represents and warrants as follows:

1. I am familiar with the Agreement and the business and operations of Borrower.

2. Except as otherwise specifically indicated, the information contained in this
Certificate is true and accurate on and as of                         ,         
(the “Certification Date”).

3. As of the Certification Date and at all times during the quarter ending on
the Certification Date, Borrower has performed all obligations to be performed
by it under (a) the Agreement, (b) any instrument or agreement to which Borrower
is a party or under which Borrower is obligated, and (c) any judgment, decree,
or order of any court or governmental authority binding on Borrower. No Default
or Event of Default has occurred, whether or not the same was cured, during such
quarter.

4. As of the Certification Date, the information set forth below is true,
accurate and complete:

 

(a) Section 7.11(a): Tangible Net Worth

 

Tangible Net Worth

 

$

       

Minimum Tangible Net Worth calculation:

   

Base amount

 

$

  127,500,000      

Plus: Fifty percent of Net Income (without reduction for Net Loss) after
December 31, 2003

 

$

        Plus: 90% of the gross proceeds from stock issuance (excluding the first
$2,000,000 of proceeds from the exercise of stock options after December 31,
2003)  

$

       

Minimum Tangible Net Worth Total

 

$

       

 

(b) Section 7.11(b): Funded Debt to EBITDA

This calculation is also used for Determination of

Applicable Margin (Section 2.3.2) and Commitment

Fee Percentage (Section 3.7)

 

Funded Debt (A)

   $           

EBITDA (B)

   $           

Ratio of A to B

           

Maximum permitted: 2:25 to 1:00

    

 

1

--------------------------------------------------------------------------------

(c) Section 7.11(c): Fixed Charge Coverage Ratio

 

1.

   EBITDA (A)    $            

2.

  

Interest expense for the 4 fiscal quarter periods immediately ending on the date
hereof

  

$

           

3.

  

Borrower’s current portion of long term debt (as determined in accordance with
GAAP)

  

$

           

4.

  

Cash dividends paid for the 4 fiscal quarter periods immediately ending on the
date hereof

  

$

           

5.

  

Cash taxes paid for the 4 fiscal quarter periods immediately ending on the date
hereof

  

$

           

6.

  

Sum of 2 through 5 (B)

  

$

              

Ratio of A to B

                 

Minimum required from Effective Date through December 31, 2004: 1.50 to 1

       

Minimum required from January 1, 2005 to December 31, 2005: 1.75 to 1

       

Minimum required from and after January 1, 2006: 2.00 to 1

    

 

(d) Active Subsidiaries:

 

  1. As of December 31, 200_ and as of the date of this Compliance Certificate,
Borrower has no Active Subsidiaries except the following:

 

  •   Enviroplex, Inc., a California corporation,

 

  •   Mobile Modular Management Corporation, a California corporation

 

  •   TRS-RenTelco Inc., a company organized under the laws of British Columbia,
Canada

 

  2. For each Active Subsidiary listed in item (d)1. above (with the exception
of Mobile Modular Management Corporation), all assets that would be reflected on
a balance sheet of such Active Subsidiary as of December 31, 200_, in accordance
with GAAP if not consolidated with the assets of Borrower, and all revenues of
such Active Subsidiary for the annual financial reporting period ended
December 31, 200_, as determined in accordance with GAAP if not consolidated
with the revenues of Borrower, are as shown on the attached Schedule 4(d).
(Financial information for Mobile Modular Management Corporation is included in
Borrower’s filings on Form 10K with the Securities and Exchange Commission; so
long as such financial information for Mobile Modular Management Corporation is
included in the most recent 10K filing, it will not be separately reported on
Schedule 4(d).)

 

Executed this          day of                     ,     .

By:     

Name:

    

Title:

    

 

2

--------------------------------------------------------------------------------

Schedule 4(d)

to

Annual

Compliance Certificate

[Borrower to attach or list assets of Active Subsidiaries as of FYE, and

revenues of Active Subsidiaries for same FY]

 

1