Exhibit 10.17

 

July 7, 2005

 

Mr. Thomas J. Sauer

Vice President and

Chief Financial Officer

McGrath RentCorp

5700 Las Positas Road

Livermore, CA 94550

 

Re: $5,000,000.00 Committed Credit Facility

 

Dear Mr. Sauer:

 

Union Bank of California, 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 30, 2008, not to exceed at any time the maximum principal
amount of Five Million Dollars ($5,000,000.00), 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”) Borrower becomes a Sweep Service customer 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 Third Amended and
Restated Credit Agreement dated as of May 7, 2004, by and among Borrower, Bank,
Bank of America, N.A., Comerica Bank - California, Wells Fargo Bank, N.A. and
U.S. Bank National Association and shall include any amendments thereto as are
consented to by Bank as set forth herein. Each capitalized term not otherwise
defined herein shall have the meaning set forth in the Multibank Agreement.

 

3. Borrower shall comply with, and repeats as if fully set forth herein as of
the date hereof, all of the representations, covenants and obligations of
Borrower set forth under Articles 6, 7, 8 and 11 (and including any definitions
and related provisions) of the Multibank Agreement. In the event the Multibank
Agreement terminates or expires prior to the termination or expiration of this
Facility, the foregoing representations, covenants and obligations of Borrower
shall nevertheless survive as between Borrower and Bank with respect to this
Facility and shall continue in effect until this Facility terminates or expires.
No amendment or waiver of any provision of the Multibank Agreement after the
date hereof shall be effective with respect to this Facility unless the Bank
consents thereto in writing.

 

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

 

5. Borrower shall pay to Bank a non-refundable commitment fee for this Facility
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 0.125% on the average unused
amount of the Facility during such period.

 

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

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Enclosed is the original Credit Line Note and a copy of the 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.

 

BORROWER AND BANK HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING UNDER THIS FACILITY LETTER, THE CREDIT LINE
NOTE OR ANY OTHER LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND ANY SUCH
CLAIM, DEMAND ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY. BORROWER OR BANK MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THIS CONSENT OF BORROWER AND
BANK TO WAIVE THEIR RIGHT TO TRIAL BY JURY.

 

This offer expires on July 31, 2005 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, 2005 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 of California, N. A.

 

By:

 

/s/ Henry Montgomery III

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    Henry G. Montgomery III     Vice President

ACCEPTED AND AGREED:

MCGRATH RENTCORP, a

California Corporation

By:

 

/s/ Thomas Sauer

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    Thomas J. Sauer     Vice President and Chief     Financial Officer

 

Date: July 11, 2005