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Item 1.01
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Entry into a Material Definitive Agreement.
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Amendment to Credit Agreement
As previously reported, on October 10, 2016,
EnviroStar, Inc., a Delaware corporation (the “Company”), entered into a credit agreement (the “Credit Agreement”)
with Wells Fargo Bank, National Association (the “Bank”). The Credit Agreement provides for a total aggregate commitment
of the Bank of $20.0 million, consisting of a maximum $15.0 million revolving line of credit (the “Line of Credit”),
and a $5.0 million term loan facility (the “Term Loan”). The Company’s obligation to repay advances under the
Line of Credit is evidenced by a Revolving Line of Credit Note, dated as of October 10, 2016, and the Company’s obligation
to repay the Term Loan is evidenced by a Term Note, dated as of October 10, 2016. Interest accrues on the outstanding principal
amount of the Line of Credit at an annual rate equal to Daily One Month LIBOR (as defined in the Credit Agreement) plus 2.25% and
on the outstanding principal amount of the Term Loan at an annual rate equal to Daily One Month LIBOR plus 2.85%. The Credit Agreement
has a term of five years and matures on October 10, 2021.
On June 23, 2017, the Company, Western State
Design, Inc., a Delaware corporation, Steiner-Atlantic Corp., a Florida corporation, DryClean USA License Corp., a Florida corporation,
and Martin-Ray Laundry Systems, Inc., a Delaware corporation (“MRLS”), entered into an Amendment and Ratification of
Credit Agreement and Other Loan Documents (the “Amendment”), which, among other things, adds MRLS as a co-guarantor
under the Credit Agreement. In connection therewith, MRLS executed and delivered to Bank (i) a Continuing Guaranty, dated as of
June 23, 2017, in favor of Bank (the “Guaranty”), and (ii) a Security Agreement: Business Assets, dated as of June
23, 2017, in favor of Bank (the “Security Agreement”), which secures MRLS’s obligations under the Guaranty and
the other Loan Documents (as defined in the Amendment).
The descriptions of the Amendment, the Guaranty
and the Security Agreement set forth herein do not purport to be complete and are subject to, and qualified in their entirety by
reference to, the Amendment, the Guaranty and the Security Agreement, copies of which are attached hereto as Exhibits 10.1, 10
2 and 10.3, respectively, and are incorporated herein by reference.
Stockholders Agreement
On June 19, 2017, William Mann, Jim Hohnstein
and Timm Mullen (collectively, the “Sellers”), Symmetric Capital, LLC (“Symmetric I”), Symmetric Capital
II, LLC (“Symmetric II” and collectively with Symmetric I, “Symmetric”) and certain of Symmetric’s
affiliates, including Henry M. Nahmad, the Manager of Symmetric I and the Manager of Symmetric II, entered into a Stockholders
Agreement with the Company (the “Stockholders Agreement”), pursuant to which, among other things, each Seller agreed
to vote all shares of Common Stock owned by them at any time during the term of the Stockholders Agreement in accordance with the
recommendations or directions of the Company’s Board of Directors and granted to the Company and its designees, an irrevocable
proxy and power of attorney in furtherance thereof. The Stockholders Agreement contains certain transfer restrictions with respect
to the shares of the Company’s common stock held by the Sellers. The Stockholders Agreement also includes certain tag-along
provisions with respect to certain proposed sales of Common Stock by Symmetric and its affiliates. The Stockholders Agreement has
a term of three years, subject to earlier termination under certain circumstances.
The description of the Stockholders Agreement
set forth herein does not purport to be complete and is subject to, and qualified in its entirety by reference, to the Stockholders
Agreement, a copy of which is attached hereto as Exhibit 4.1, and is incorporated herein by reference.