Exhibit 10.1

 

AMENDMENT NO. 1

 

THIS AMENDMENT NO. 1, dated as of May 17, 2013 (this “Amendment”), to that
certain Credit Agreement referenced below is by and among MAC-GRAY CORPORATION,
a Delaware corporation (the “Borrower”), as Borrower, the Subsidiaries
identified on the signature pages hereto, as Guarantors, the Lenders and BANK OF
AMERICA, N.A., as Administrative Agent and Collateral Agent.  Capitalized terms
used but not otherwise defined herein shall have the meanings provided in the
Credit Agreement.

 

W I T N E S S E T H

 

WHEREAS, a $250,000,000 revolving credit facility was established pursuant to
the terms of that certain Amended and Restated Senior Secured Credit Agreement
dated as of February 29, 2012 (as amended and modified, the “Credit Agreement”)
among the Borrower, the subsidiaries and affiliates identified therein, as
guarantors, the lenders identified therein, and Bank of America, N.A., as
administrative agent;

 

WHEREAS, the Borrower has requested certain modifications to the Credit
Agreement, including extension of the revolving commitment period and a
reduction in pricing for the loans and extensions of credit thereunder;

 

WHEREAS, the requested modifications require the consent of all of the Lenders;

 

WHEREAS, the Lenders have agreed to the requested modifications on the terms and
conditions set forth herein;

 

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

1.                                      Defined Terms.  Capitalized terms used
but not otherwise defined herein shall have the meanings provided in the Credit
Agreement.

 

2.                                      Amendments to the Credit Agreement.  The
Credit Agreement is amended in the following respects:

 

2.1                               In Section 1.01 (Defined Terms) the following
terms are amended or added to read as follows:

 

“Applicable Percentage” means the following percentages per annum, based on the
Consolidated Total Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.01(c):

 

 

 

 

 

Revolving Loans and Letters of Credit

 

Pricing
Level

 

Consolidated Total
Leverage Ratio

 

Eurodollar
Rate Loans

 

Base Rate
Loans

 

Commitment
Fee

 

Letter of
Credit Fee

 

1

 

>3.00:1.0

 

2.00

%

1.00

%

0.400

%

2.00

%

2

 

>2.50:1.0 but <3.00:1.0

 

1.75

%

0.75

%

0.300

%

1.75

%

3

 

>2.00:1.0 but <2.50:1.0

 

1.50

%

0.50

%

0.300

%

1.50

%

4

 

>1.50:1.0 but <2.00:1.0

 

1.375

%

0.375

%

0.250

%

1.375

%

5

 

<1.50:1.0

 

1.25

%

0.25

%

0.250

%

1.25

%

 

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Any increase or decrease in the Applicable Percentage resulting from a change in
the Consolidated Total Leverage Ratio shall become effective not later than the
first Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.01(c); provided, however, that if a Compliance
Certificate is not delivered when due in accordance therewith, then, upon the
request of the Required Lenders, Pricing Level 1 shall apply as of the first
Business Day after the date on which such Compliance Certificate was required to
have been delivered and shall remain in effect until the date on which such
Compliance Certificate is delivered.  The Applicable Percentage in effect from
the effective date of Amendment No. 1 through the date for delivery of the
Compliance Certificate for the fiscal quarter ending June 30, 2013 shall be
determined based upon Pricing Level 2.  Determinations by the Administrative
Agent of the appropriate Pricing Level shall be conclusive absent manifest
error.

 

For any Incremental Credit Facilities established after the Closing Date, the
“Applicable Percentage” shall mean the percentages specified in the applicable
joinder agreement or other loan documentation whereby the Incremental Credit
Facilities are established.

 

Notwithstanding anything to the contrary contained in this definition, the
determination of the Applicable Percentage for any period shall be subject to
the provisions of Section 2.10(b).

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

 

“Consolidated EBITDA” means, for any period for the Consolidated Group, the sum
of (a) Consolidated Net Income plus (b) to the extent deducted in determining
such Consolidated Net Income, without duplication, the sum of (i) Consolidated
Interest Expense, (ii) consolidated income tax expense, (iii) depreciation and
amortization, (iv) any extraordinary non-cash charges reasonably acceptable to
the Administrative Agent and the Required Lenders, (v) all non-recurring
non-cash charges (other than non-cash charges as to which there will be a cash
payment or cash outlay in a subsequent period), (vi) non-cash impairment charges
for discontinued or divested operations or goodwill impairment charges,
(vii) non-cash compensation expenses (but including in any subsequent period,
for purposes hereof, cash payments made in respect thereof in any subsequent
period), (viii) non-cash expenses resulting from the grant of stock options or
other equity-related compensation to any director, officer, consultant or
employee, (ix) charges relating to the Transactions, including charges relating
to the payment of the make-whole premium on the Senior Notes, the write-off of
capitalized costs and expenses relating to the Senior Notes and the facilities
provided under the Existing Credit Agreement and any other financings being
terminated or replaced and fees and expenses relating to the Transactions,
(x) fees and expenses relating to the establishment of Amendment No. 1,
(xi) legal fees and expenses associated with the Wash Multifamily Laundry
Systems, LLC litigation of up to $5,000,000, (xii) non-cash expenses (and
excluding non-cash income) in connection with any Swap Agreement for which the
applicable member of the Consolidated Group does not receive hedge accounting
treatment, (xiii) transaction fees and expenses associated with Permitted
Acquisitions and dispositions permitted hereunder, in each case on a
consolidated basis determined in accordance with GAAP, and (xiv) non-recurring
cash restructuring charges not to exceed $3,000,000 in any period of four
consecutive fiscal quarters; provided that for acquisitions made after the
Closing Date adjustments may be made to Consolidated EBITDA for expected cost
savings, synergies and one-time costs and expenses relating to the acquisitions
(including employee retention expenses and severance expenses) reasonably
acceptable to the Administrative Agent and the Required Lenders.  Except as
otherwise expressly provided, the applicable period shall be the period of four
consecutive fiscal quarters ending as of the date of determination.

 

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“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation incurred after the date hereof, if, and to the extent that, all or a
portion of the guaranty of such Guarantor of, or the grant under a Loan Document
by such Guarantor of a security interest to secure, such Swap Obligation (or any
Guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or
the application or official interpretation thereof) by virtue of such
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act (determined after giving
effect to Section 2.10 of the Collateral Agreement and any and all guarantees of
such Guarantor’s Swap Obligations by other Loan Parties) at the time the
guaranty of such Guarantor, or grant by such Guarantor of a security interest,
becomes effective with respect to such Swap Obligation.  If a Swap Obligation
arises under a Master Agreement governing more than one Swap Agreement, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to Swap Agreements for which such guaranty or security interest
becomes illegal.

 

“Master Agreement” has the meaning specified in the definition of “Swap
Agreement”.

 

“Material Acquisition” means (a) any acquisition by the Borrower or a
wholly-owned Subsidiary that is a Loan Party of all the outstanding Equity
Interest in, all or substantially all the assets of, or all or substantially all
the assets constituting a division or line of business of, a Person if (i) the
total consideration for such acquisition is at least $20,000,000 or (ii) the
acquired business contributes, together with all other Permitted Acquisitions
that have occurred since the beginning of the immediately preceding four
consecutive fiscal quarter period for which financial statements are available,
in the aggregate at least $3,000,000 to Consolidated EBITDA for such period
(giving pro forma effect to all such acquisitions as if they had occurred on the
first day of such four consecutive fiscal quarter period) and (b) the other
preceding Permitted Acquisitions described in clause (a)(ii) above.

 

“Obligations” means with respect to the Borrower and each Guarantor (a) all
advances to, and debts, liabilities, obligations, covenants and duties of, any
Loan Party arising under any Loan Document or otherwise with respect to any Loan
or Letter of Credit, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, (b) all obligations under any Swap Agreement between the
Borrower or any of its subsidiaries, on the one hand, and any Lender or
Affiliate of a Lender, on the other hand, to the extent permitted hereunder and
(c) all obligations under any Treasury Management Agreement between the Borrower
or any of its subsidiaries, on the one hand, and any Lender or Affiliate of a
Lender, on the other hand; provided, however, that the “Obligations” of a
Guarantor shall exclude any Excluded Swap Obligations with respect to such
Guarantor.

 

“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets
exceeding $10,000,000 or that qualifies at such time as an “eligible contract
participant” under the Commodity Exchange Act and, in each case, can cause
another Person to qualify as an “eligible contract participant” at such time
under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Revolving Termination Date” means May 17, 2018; provided, however, that if such
date is not a Business Day, the Revolving Termination Date shall be the next
preceding Business Day.

 

“Specified Loan Party” has the meaning specified in Section 2.10 of the
Collateral Agreement.

 

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“Swap Agreement” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.  All Swap
Agreements, if any, between the Borrower and one or more Lenders (or Affiliates
thereof) are independent agreements governed by the written provisions of such
Swap Agreements, which will remain in full force and effect unaffected by any
repayment, prepayment, acceleration, reduction, increase or change in the terms
of the Loans or other Obligations.

 

“Swap Obligation” means with respect to any Loan Party any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

2.2                               Clause (v) in Section 1.02(a) is amended to
read as follows:

 

(v) any reference to any law shall include all statutory and regulatory rules,
regulations, orders and provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and

 

2.3                               Clause (viii) of Section 7.01(a) is amended to
read as follows:

 

(viii)                        other unsecured Indebtedness in an aggregate
principal amount not exceeding $10,000,000 at any time outstanding; provided
that the aggregate principal amount of Indebtedness of the Subsidiaries that are
not Loan Parties permitted by this clause (viii) shall not exceed $500,000 at
any time outstanding;

 

2.4                               Section 7.04(b) is amended to read as follows:

 

(b)                                 Permitted Acquisitions; provided that the
aggregate cash consideration for such Permitted Acquisitions, which shall be
deemed to include (i) any amounts actually paid pursuant to any post-closing
payment adjustments, earn-outs or non-compete payments and (ii) the principal
amount of Indebtedness that is assumed pursuant to Section 7.01(a)(vi) or
otherwise incurred in connection with such Permitted Acquisition, shall not
exceed $100,000,000 for any period of four consecutive fiscal quarters and
$175,000,000 in the aggregate since the Closing Date plus, in each case (without
duplication) an amount equal to any returns of capital or sale proceeds actually
received in cash in respect of any such Permitted Acquisition (which amount
shall not exceed the purchase price paid (including the principal amount of
Indebtedness assumed pursuant to Section 7.01(a)(vi) in connection therewith) in
respect of such Permitted Acquisition);

 

2.5                               Section 7.05(g) is amended to read as follows:

 

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(g)                                  sales, transfers and other dispositions of
assets (other than Equity Interests in a Subsidiary unless all Equity Interests
in such Subsidiary (other than the Borrower) are sold) that are not permitted by
any other clause of this Section; provided that the aggregate fair market value
of all assets sold, transferred or otherwise disposed of in reliance upon this
clause (g) shall not exceed $10,000,000;

 

2.6                               At the end of the last paragraph of
Section 8.02 (Application of Funds) the following sentence is added:

 

Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Loan Parties to preserve the
allocation to Obligations otherwise set forth above in this Section.

 

2.7                               The Revolving Commitments are reallocated
among the Lenders as provided in Schedule 2.01 (Commitments and Applicable
Percentages) attached hereto.  The Lenders hereby acknowledge the reallocation,
and agree to the assignment of commitments and interests, as necessary and
appropriate, to give effect thereto.

 

3.                                      Amendments to the Collateral Agreement. 
The Collateral Agreement is amended in the following respects:

 

3.1                               In Section 1.02 (Other Defined Terms) the
following terms are amended or added to read as follows:

 

“Guaranteed Obligations” means the obligations subject to the guaranty in
Section 2.01 of this Agreement.

 

“Guarantors” means (i) the Borrower (for purposes of Subsidiaries under Swap
Agreements and Treasury Management Agreements and any Swap Obligation of a
Specified Loan Party (determined before giving effect to Section 2.02(b) and
2.10) under this Agreement), (b) each of the Subsidiaries identified on the
signature pages hereto, and (c) each other Person that becomes a party to this
Agreement as a Guarantor after the Closing Date.

 

“Obligations” means (a) Loan Document Obligations, (b) the due and punctual
payment and performance of all obligations of the Borrower or any of its
subsidiaries under or in connection with each Swap Agreement that (i) is in
effect on the Closing Date with a counterparty that is a Lender or an Affiliate
of a Lender as of the Closing Date or (ii) is entered into after the Closing
Date with any counterparty that is a Lender or an Affiliate of a Lender at the
time such Swap Agreement is entered into (even if that counterparty should
subsequently cease to be a Lender (or an Affiliate of a Lender)) and (c) the due
and punctual payment and performance of all obligations of the Borrower or any
of its subsidiaries (i) in respect of overdrafts and related liabilities owed to
the Administrative Agent (in its individual capacity), any Lender or any of
their respective Affiliates, and (ii) under or in connection with each Treasury
Management Agreement that is with a counterparty that is a Lender or an
Affiliate of a Lender; provided that the “Obligations” of a Guarantor shall
exclude any Excluded Swap Obligations with respect to such Guarantor.

 

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“Specified Loan Party” shall have the meaning provided in Section 2.10 of this
Agreement.

 

3.2                               Section 2.02(b) is amended to read as follows:

 

(b)                                 Notwithstanding any provision to the
contrary contained herein, in any other of the Loan Documents, Swap Agreements,
Treasury Management Agreements or other documents relating to the Guaranteed
Obligations, (i) the obligations of each Guarantor under this Agreement and the
other Loan Documents shall be limited to an aggregate amount equal to the
largest amount that would not render such obligations subject to avoidance under
the Debtor Relief Laws or any comparable provisions of any applicable state law,
and (ii) the Guaranteed Obligations of a Guarantor shall exclude any Excluded
Swap Obligations with respect to such Guarantor.

 

3.3                               A new Section 2.10 is added to read as
follows:

 

2.10                        Keepwell.  Each Loan Party that is a Qualified ECP
Guarantor at the time the guaranty in this Article II by any Loan Party that is
not then an “eligible contract participant” under the Commodity Exchange Act (a
“Specified Loan Party”) or the grant of a security interest under the Loan
Documents by any such Specified Loan Party, in either case, becomes effective
with respect to any Swap Obligation, hereby jointly and severally, absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support to each Specified Loan Party with respect to such Swap Obligation as may
be needed by such Specified Loan Party from time to time to honor all of its
obligations under the Loan Documents in respect of such Swap Obligation (but, in
each case, only up to the maximum amount of such liability that can be hereby
incurred without rendering such Qualified ECP Guarantor’s obligations and
undertakings under this Article II, or otherwise under this Agreement, voidable
under applicable Debtor Relief Laws, and not for any greater amount). The
obligations and undertakings of each applicable Loan Party under this
Section shall remain in full force and effect until the Guaranteed Obligations
have been paid in full and the commitments relating thereto have expired or
terminated. Each Loan Party intends this Section to constitute, and this
Section shall be deemed to constitute, a guarantee of the obligations of, and a
“keepwell, support, or other agreement” for the benefit of, each Specified Loan
Party for all purposes of the Commodity Exchange Act.

 

4.                                      Conditions Precedent.  This Amendment
shall be effective upon satisfaction of each of the following:

 

4.1                               Receipt by the Administrative Agent of duly
executed counterparts of this Amendment from (i) the Borrower and the
Guarantors, (ii) each of the Lenders and (iii) the Administrative Agent;

 

4.2                               Receipt by the Administrative Agent of a duly
executed copy of the Assignment and Assumption Agreement dated as of the date
hereof between Bank of the West, as assignor, and Bank of America, N.A, as
assignee;

 

4.3                               Receipt by the Administrative Agent of duly
executed promissory notes, as appropriate, giving effect to this Amendment;

 

4.4                               Receipt by the Administrative Agent of legal
opinions of counsel for the Borrower and the Guarantors regarding, among other
things, existence, due authorization, execution, delivery and enforceability of
this Amendment and the other loan documents, no

 

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conflicts with organizational documents, material debt agreements or applicable
law, and perfection of security interests, in each case in a manner reasonably
satisfactory to the Administrative Agent;

 

4.5                               Receipt by the Administrative Agent of copies
of supporting resolutions, organizational documents, certificates of good
standing, incumbency certificates and other corporate documentation from the
Borrower and the Guarantors; and

 

4.6                               Confirmation of payment of all fees and
expenses owing in connection with this Amendment, including fees and expenses of
counsel for the Administrative Agent.

 

This Amendment shall not be effective until the Administrative Agent shall have
given confirmation of the satisfaction of the foregoing conditions.

 

5.                                      Representations and Warranties; No
Defaults.  Each of the Loan Parties hereby affirms the following:

 

5.1                               It has full power and authority, and has taken
all necessary action to authorize the execution, delivery and performance of
this Amendment, and has executed and delivered this Amendment which is a legal,
valid and binding obligation enforceable against it in accordance with its
terms;

 

5.2                               After giving effect to this Amendment, the
representations and warranties set forth in the Credit Agreement and the other
Loan Documents are true and correct in all material respects as of the date
hereof (except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this Section 3,
the representations and warranties contained in subsection (a) of Section 5.05
of the Credit Agreement shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the
Credit Agreement);

 

5.3                               No Default or Event of Default shall exist
immediately before or immediately after giving effect hereto; and

 

5.4                               The liens and security interests created and
granted in the Loan Documents remain in full force and effect and this Amendment
is not intended to adversely affect or impair such liens and security interests
in any manner.

 

6.                                      Full Force and Effect.  Except as
modified hereby, all of the terms and provisions of the Credit Agreement and the
other Loan Documents (including schedules and exhibits) remain in full force and
effect.

 

7.                                      Counterparts.  This Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and it shall not be necessary in making
proof of this Amendment to produce or account for more than one such
counterpart.  Delivery by any party hereto of an executed counterpart of this
Amendment by facsimile or other electronic transmission shall be effective as
such party’s original executed counterpart and shall constitute a representation
that such party’s original executed counterpart will be delivered.

 

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8.                                      Fees and Expenses.  The Borrower agrees
to pay all reasonable costs and expenses of the Administrative Agent and the
Collateral Agent in connection with the preparation, execution and delivery of
this Amendment, including the reasonable fees and expenses of Moore & Van Allen,
PLLC.

 

9.                                      Governing Law.  This Amendment shall be
governed by, and construed in accordance with, the law of the State of New York.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

BORROWER:

MAC-GRAY CORPORATION,

 

a Delaware corporation

 

 

 

 

 

 

By:

/s/ Michael J. Shea.

 

Name: Michael J. Shea

 

Title: Executive Vice President, Chief Financial Officer and Treasurer

 

 

GUARANTORS:

MAC-GRAY SERVICES, INC.,

 

a Delaware corporation

 

 

 

 

 

 

By:

/s/ Michael J. Shea.

 

Name: Michael J. Shea

 

Title: Executive Vice President, Chief Financial Officer and Treasurer

 

MAC-GRAY CORPORATION

AMENDMENT NO. 1

 

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ADMINISTRATIVE AGENT:

BANK OF AMERICA., N.A.,

 

as Administrative Agent and Collateral Agent

 

 

 

 

 

 

By:

/s/ Charlene Wright-Jones.

 

Name: Charlene Wright-Jones

 

Title: Vice President

 

MAC-GRAY CORPORATION

AMENDMENT NO. 1

 

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