Document:

EX-4.3

  Exhibit 4.3

  SECOND AMENDED AND RESTATED FACILITY LETTER

   

  August 10, 2022

   

   

  Mr. Keith E. Pratt

  Senior Vice President and Chief Financial Officer McGrath RentCorp

  5700 Las Positas Road Livermore, CA 94550

   

  Re: $20,000,000.00 Committed Credit Facility                       

  Dear Mr. Pratt:

  MUFG 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 July 15, 2027, not to exceed at any time the maximum principal amount of Twenty Million Dollars ($20,000,000.00), 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 Second Amended and Restated Credit Agreement dated as of July 15, 2022, by and among Borrower, Bank, Bank of America, N.A. and other lenders party thereto, 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.

  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 2.50:1.00, (ii) 0.25% if the Consolidated Leverage Ratio is less than or equal to 2.50:1.00 but greater than 2.00:1.00, (iii) 0.20% if the Consolidated Leverage Ratio is less than or equal to 2.00:1.00 but greater than 1.50:1.00, and (iv) 0.15% if the Consolidated Leverage Ratio is less than or equal to 1.50:1.00. 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.

   

  7.On and as of the Effective Date, the Facility Letter, dated March 30, 2020 between the Bank and Borrower (the “Existing Facility Letter”) shall be amended, restated and superseded in its entirety by this letter. The parties hereto acknowledge and agree that (i) this letter and the other Loan Documents, whether executed and delivered in connection herewith or otherwise, do not constitute a novation, payment or reborrowing, or termination of the obligations owed by the Borrower to the Bank under the Credit Line Note (as defined in the Existing Facility Letter) (the “Existing Credit Line Note”) as in effect prior to the Closing Date and (ii) such obligations are in all respects continuing (as amended and restated hereby) with only the terms thereof being modified as provided in this letter or the Credit Line Note. Each reference to the “Facility Letter” or “Credit Line Note” in any Loan Document shall be deemed to be a reference to the Existing Facility Letter or Existing Credit Line Note as amended and restated hereby or by the Credit Line Note, respectively. Borrower acknowledges and agrees that any of the Loan Documents to which it is a party or is otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid, enforceable, ratified and confirmed in all respects and shall not be impaired or limited by the execution or effectiveness of this letter.

   

  Enclosed are the original Credit Line Note, an Authorization to Obtain Credit, Grant Security, Guarantee or Subordinate and an Authorization to Disburse, which together with any other contract, instrument or document Bank requires to be executed and delivered in connection with this Facility are the “Loan Documents” (and each is a “Loan Document”). The Borrower’s execution of the Loan Documents and return of 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 August 31, 2022 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 August 31, 2022 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,

  MUFG UNION BANK, N. A.

   

  By: /s/ Jaime Keane		 
Jaime Keane

  Director

   

  Accepted And Agreed as of August 19, 2022:

   

  MCGRATH RENTCORP,

  a California Corporation

   

   

  By: /s/ Keith E. Pratt                  
Keith E. Pratt,

  Senior Vice President and Chief Financial OfficerEX-4.4

   

  		Exhibit 4.4

  SECOND AMENDED AND RESTATED CREDIT LINE NOTE

   

  			
	Borrower Name
 
MCGRATH RENTCORP, a California corporation

	Borrower Address
	Office
	Loan Number

	 
	East Bay Corporate
	6051817902

	5700 Las Positas Road
	Banking
	 
 

	Livermore, California 94550
	 
 
	Amount

	 
	Maturity Date
	$20,000,000

	 
	July 15, 2027
	 

   

  $20,000,000	August 10, 2022

   

  FOR VALUE RECEIVED, on July 15, 2027, the undersigned (“Borrower”) promises to pay to the order of MUFG UNION BANK, N.A. (“Bank”), as indicated below, the principal sum of Twenty Million Dollars ($20,000,000), 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 2.50:1.00, (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 2.50:1.00 but greater than 2.00:1.00, (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 2.00:1.00 but greater than 1.50:1.00, 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 1.50:1.00; 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 second amended and restated facility letter between Borrower and Bank dated as of August 10, 2022 (“Facility Letter’’)), then the Consolidated Leverage Ratio for the fiscal quarter covered thereby shall be deemed to be greater than 1.50:1.00 until such financial statement is delivered to Bank.

   

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  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 determined by Bank from time to time as a means of pricing certain extensions of credit and is 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 July 15, 2027 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 

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  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.

   

  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 Amended and Restated Line of Credit Note, dated March 30, 2020 provided by the Borrower in favor of the Bank shall be amended, restated and superseded in its entirety by this Note.

   

  MCGRATH RENTCORP, 

  a California corporation

   

   

  By: /s/ Keith E. Pratt                  
Keith E. Pratt

  Senior Vice President and Chief Financial Officer

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