Exhibit 10.1

 

Second Amendment to Credit Agreement and Limited Waiver

 

This Second Amendment to Credit Agreement and Limited Waiver (herein, this
“Amendment”) is entered into as of January 12, 2018, by and among Limbach
Facility Services LLC, a Delaware limited liability company (the “Borrower”),
Limbach Holdings LLC, a Delaware limited liability company (the “Parent”), the
other Guarantors party hereto, the Lenders party hereto, and Fifth Third Bank,
an Ohio banking corporation, as Administrative Agent and L/C Issuer.

 

Recitals:

 

A. The Borrower, the Parent, the other Guarantors party thereto, the Lenders
party thereto, and the Administrative Agent are party to a Credit Agreement
dated as of July 20, 2016 (as amended, modified, restated, or supplemented from
time to time, the “Credit Agreement”).

 

B. The Borrower has advised the Administrative Agent and the Lenders that, on or
prior to January 14, 2018, the Borrower intends to make a cash distribution to
the Parent, and the Parent shall in turn make a cash distribution to Limbach,
Inc., in an amount not to exceed $10,000,000 (the “Proposed Preferred Stock
Repurchase Distribution”), which shall be used solely to repurchase all
outstanding Class A preferred stock of Limbach, Inc. (collectively, the
“Preferred Stock Repurchase”). The Borrower has requested that the
Administrative Agent and the Lenders (a) extend a new term loan in the amount of
$10,000,000 to finance the Proposed Preferred Stock Repurchase Distribution and
to pay certain fees and expenses associated therewith, (b) amend the Credit
Agreement to permit the Proposed Preferred Stock Repurchase Distribution, and
(c) make certain other amendments to the Credit Agreement, and the Lenders and
the Administrative Agent have agreed to such requests pursuant to the terms and
conditions set forth herein.

 

C. The Borrower has also advised the Administrative Agent and the Lenders that
certain Defaults and/or Events of Default exist prior to the Second Amendment
Effective Date, as specifically set forth on Annex 1 attached hereto
(collectively, the “Violations”) and made part of this Amendment as if set forth
herein.

 

D. The Borrower has requested that the Administrative Agent and the Lenders
waive the Violations, and the Administrative Agent and the Lenders have agreed
to such request pursuant to the terms and conditions set forth herein.

 

Now, Therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

 

Section 1. Incorporation of Recitals; Defined Terms.

 

The Borrower and the Guarantors acknowledge that the Recitals set forth above
are true and correct. This Amendment shall constitute a Loan Document, and the
Recitals shall be construed as part of this Amendment. Each capitalized term
used but not otherwise defined herein, including capitalized terms used in the
introductory paragraph hereof and the Recitals, has the meaning assigned to it
in the Credit Agreement.

 

 

 

 

Section 2. Limited Waiver.

 

2.1.       Limited Waiver. The Borrower has requested that the Administrative
Agent and the Lenders waive the Violations and any Defaults or Events of Default
arising solely from the Violations. Upon satisfaction of the conditions
precedent set forth in Section 4 below and subject to the terms hereof, the
Administrative Agent and the Lenders party hereto waive the Violations and any
Defaults or Events of Default arising solely from the Violations. The Borrower
acknowledges that the waiver under this Section 2.1 is specifically limited to
the terms hereof, is a one-time waiver, and shall not be deemed to be a waiver
of any Defaults or Events of Default other than those arising solely in respect
of the Violations.

 

2.2.       Scope. This limited waiver shall be limited specifically as written
herein and shall be solely a waiver as provided herein. This Amendment shall not
constitute a waiver or modification of any other term, provision, or condition
of the Credit Agreement or any other Loan Document.

 

Section 3. Amendments to Credit Agreement.

 

Upon satisfaction of the conditions precedent set forth in Section 4 hereof, the
Credit Agreement shall be and hereby is amended as follows:

 

3.1.       Clauses (i) and (ii) of the definition of “Interest Period” appearing
in Section 1.1 of the Credit Agreement are amended and restated in their
entireties to read as follows:

 

(i)       no Interest Period with respect to any Revolving Loans or any Swing
Loan shall extend beyond the Revolving Credit Termination Date, no Interest
Period with respect to any portion of the Term Loans shall extend beyond the
final maturity date of the Term Loans, and no Interest Period with respect to
any portion of the Bridge Term Loans shall extend beyond the final maturity date
of the Bridge Term Loans;

 

(ii)       no Interest Period with respect to any portion of the Term Loans or
the Bridge Term Loans consisting of Eurodollar Loans shall extend beyond a date
on which the Borrower is required to make a scheduled payment of principal on
the Term Loans or the Bridge Term Loans, as applicable, unless the sum of
(x) the aggregate principal amount of the Term Loans or the Bridge Term Loans,
as applicable, that are Base Rate Loans plus (y) the aggregate principal amount
of the Term Loans or the Bridge Term Loans, as applicable, that are Eurodollar
Loans with Interest Periods expiring on or before such date equals or exceeds
the principal amount to be paid on the Term Loans or the Bridge Term Loans, as
applicable, on such payment date;

 

 -2- 

 

 

3.2.       The definition of “Net Income” appearing in Section 1.1 of the Credit
Agreement is amended by replacing the word “Borrower” in each place it appears
therein with the word “Parent”.

 

3.3.       Clause (g) of the definition of “Permitted Acquisition” appearing in
Section 1.1 of the Credit Agreement is amended by replacing the phrase “Total
Leverage Ratio” in each place it appears therein with the phrase “Senior
Leverage Ratio”.

 

3.4.       The definition of “Tangible Net Worth” appearing in Section 1.1 of
the Credit Agreement is amended by replacing the word “Borrower” in each place
it appears therein with the word “Parent”.

 

3.5.       The following definitions appearing in Section 1.1 of the Credit
Agreement are amended and restated in their entireties to read as follows:

 

“Applicable Margin” means, with respect to Loans, Reimbursement Obligations, the
commitment fees payable under Section 2.13(a) and L/C Participation Fees, until
the first Pricing Date, the rates per annum shown opposite Level II below, and
thereafter from one Pricing Date to the next the Applicable Margin means the
rates per annum determined in accordance with the following schedule:

 

Level Senior Leverage Ratio for
such Pricing Date Applicable Margin for Base Rate Loans and Reimbursement
Obligations shall be: Applicable Margin for Eurodollar Loans and L/C
Participation Fees shall be: Applicable Margin for commitment fee shall be: I
Greater than or equal to 2.50 to 1.00 3.00% 4.00% 0.50% II Less than 2.50 to
1.00, but greater than or equal to 2.00 to 1.00 2.75% 3.75% 0.50% III Less than
2.00 to 1.00, but greater than or equal to 1.50 to 1.00 2.50% 3.50% 0.50% IV
Less than 1.50 to 1.00 2.25% 3.25% 0.50%

 

 -3- 

 

 

; provided, that, notwithstanding the foregoing, the Applicable Margin for the
Bridge Term Loan shall mean the rates per annum determined in accordance with
the following schedule:

 

  Applicable Margin for Base Rate Loans shall be: Applicable Margin for
Eurodollar Loans shall be: From the Second Amendment Effective Date to, but
excluding, the sixth month anniversary thereof 4.00% 5.00% From the sixth month
anniversary of the Second Amendment Effective Date to, but excluding, the twelve
month anniversary of the Second Amendment Effective Date 4.50% 5.50% From the
twelve month anniversary of the Second Amendment Effective Date and at all times
thereafter 5.00% 6.00%

 

 

For purposes hereof, the term “Pricing Date” means, for any fiscal quarter of
the Parent ending on or after September 30, 2017, the date on which the
Administrative Agent is in receipt of the Parent’s most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 6.1. The Applicable
Margin (other than the Applicable Margin for the Bridge Term Loan) shall be
established based on the Senior Leverage Ratio for the most recently completed
fiscal quarter and such Applicable Margin established on a Pricing Date shall
remain in effect until the next Pricing Date. If the Parent has not delivered
its financial statements by the date such financial statements (and, in the case
of the year-end financial statements, audit report) are required to be delivered
under Section 6.1, until such financial statements and audit report are
delivered, the Applicable Margin (other than the Applicable Margin for the
Bridge Term Loan) shall be the highest Applicable Margin (i.e., the Senior
Leverage Ratio shall be deemed to be greater than or equal to 2.50 to 1.00). If
the Parent subsequently delivers such financial statements before the next
Pricing Date, the Applicable Margin established by such late delivered financial
statements shall take effect from the date of delivery until the next Pricing
Date. In all other circumstances, the Applicable Margin established by such
financial statements shall be in effect from the Pricing Date that occurs
immediately after the end of the fiscal quarter covered by such financial
statements until the next Pricing Date. Each determination of the Applicable
Margin made by the Administrative Agent in accordance with the foregoing shall
be conclusive and binding on the Borrower and the Lenders absent manifest error.
Notwithstanding the foregoing, if, as a result of any restatement of or other
adjustment to the financial statements of the Parent or for any reason, the
Lenders determine that (a) Senior Leverage Ratio as calculated on any Pricing
Date was inaccurate and (b) a proper calculation of Senior Leverage Ratio would
have resulted in a higher Applicable Margin for any period, then the Borrower
shall automatically and retroactively be obligated to pay to the Administrative
Agent for the benefit of the Lenders, promptly on demand by the Administrative
Agent, an amount equal to the excess of the amount of interest and fees that
should have been paid for such period over the amount of interest and fees
actually paid for such period.

 

 -4- 

 

 

“Commitments” means the Revolving Credit Commitments, the Term Loan Commitments,
and the Bridge Term Loan Commitments.

 

“Credit” means any of the Revolving Credit, the Term Credit, and the Bridge Term
Credit.

 

“Excess Cash Flow” means, with respect to any period, the amount (if any) by
which (a) EBITDA (without giving effect to any pro forma adjustments made
pursuant to the definition of Net Income) during such period exceeds (b) the sum
(without duplication) of (i) the aggregate amount of payments (including
voluntary prepayments of the Term Loans) actually made by the Parent and its
Subsidiaries during such period in respect of all principal on all Indebtedness
(whether at maturity, as a result of mandatory sinking fund redemption,
mandatory prepayment, acceleration or otherwise, but excluding payments made on
the Revolving Credit), plus (ii) the aggregate amount of Capital Expenditures
made by the Parent and its Subsidiaries during such period and not financed with
proceeds of Indebtedness (but excluding credit extended under the Revolving
Credit), plus (iii) the aggregate amount of all federal, state and local taxes
paid in cash with respect to such period, plus (iv) the aggregate amount of
Interest Expense for such period paid in cash, plus (v) the cash portion of any
Restricted Payments (including, for the avoidance of doubt, Tax Distributions)
for such period to the extent permitted to be made under this Agreement, other
than the 2017 LHI Distribution re: Professional Services, plus (vi) the cash
portion of any Legacy Claims during such period in an aggregate amount not to
exceed $500,000 during such period and in an aggregate amount not to exceed
$2,500,000 during the term of this Agreement, plus (vii) transaction expenses
paid in cash during such period in connection with Permitted Acquisitions,
whether or not consummated, not to exceed $50,000 in the aggregate during such
period.

 

“Fixed Charge Coverage Ratio” means, at any time the same is to be determined,
the ratio of (a) EBITDA for the four consecutive fiscal quarters of the Parent
and its Subsidiaries then most recently ended less Capital Expenditures made by
the Parent and its Subsidiaries during the same four consecutive fiscal quarters
not financed with Indebtedness to (b) Fixed Charges for the same four
consecutive fiscal quarters.

 

“Fixed Charges” means, with reference to any period, the sum of (a) all
scheduled payments of principal made or to be made during such period with
respect to Indebtedness (for clarity, excluding mandatory prepayments pursuant
to Section 2.8(b)(v)) (“Principal Payments”) of the Parent and its Subsidiaries,
plus (b) the cash portion of any Interest Expense for such period, plus
(c) Restricted Payments made by the Parent and its Subsidiaries during such
period (including, for the avoidance of doubt, Tax Distributions made during
such period), other than (i) the Preferred Stock Repurchase Distribution and
(ii) the 2017 LHI Distribution re: Professional Services, plus (d) without
duplication, federal, state, and local income taxes paid in cash by the Parent
and its Subsidiaries during such period.

 

 -5- 

 

 

“Interest Expense” means, with reference to any period, the sum of all interest
charges (including imputed interest charges with respect to Capitalized Lease
Obligations and all amortization of debt discount and expense, and other banking
fees, discounts, charges and commissions) of the Parent and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP.

 

“Loan” means any Revolving Loan, Term Loan, Bridge Term Loan or Swing Loan,
whether outstanding as a Base Rate Loan or Eurodollar Loan or otherwise as
permitted hereunder, each of which is a “type” of Loan hereunder.

 

“Note” and “Notes” mean and include the Revolving Notes, the Term Notes, the
Bridge Term Notes and the Swing Note.

 

“Percentage” means for any Lender its Revolver Percentage, Term Loan Percentage
or Bridge Term Loan Percentage, as applicable; and where the term “Percentage”
is applied on an aggregate basis (including Section 10.12(c)), such aggregate
percentage shall be calculated by aggregating the separate components of the
Revolver Percentage, Term Loan Percentage and Bridge Term Loan Percentage, and
expressing such components on a single percentage basis.

 

“Senior Leverage Ratio” means, as of the date of determination thereof, the
ratio of (a) Senior Funded Debt of the Parent and its Subsidiaries as of such
date to (b) EBITDA for the most recently ended four fiscal quarters.

 

“Term Loan Reserve” means, as of any time the same is to be determined, an
amount equal to the aggregate principal amount of Term Loans and Bridge Term
Loans then outstanding or such other amount as determined by the Administrative
Agent in accordance with Section 2.2(a).

 

3.6.       Section 1.1 of the Credit Agreement is amended to add the following
new defined terms in their appropriate alphabetical position, which new defined
terms shall read as follows:

 

“2017 LHI Distribution re: Professional Services” means those certain cash
distributions in an aggregate amount equal to $752,043.51 made during the
Parent’s fiscal year ending December 31, 2017, from the Borrower to the Parent,
and, in turn, from the Parent to Limbach, Inc., which Limbach, Inc. used to pay
for professional accounting services.

 

“Bridge Term Credit” means the credit facility for the Bridge Term Loans
described in Section 2.15.

 

 -6- 

 

 

“Bridge Term Loan” is defined in Section 2.15 and, as so defined, includes a
Base Rate Loan or a Eurodollar Loan, each of which is a “type” of Bridge Term
Loan hereunder.

 

“Bridge Term Loan Commitment” means, as to any Lender, the obligation of such
Lender to make its Bridge Term Loan on the Second Amendment Effective Date in
the principal amount not to exceed the amount set forth opposite such Lender’s
name on Schedule 1 attached hereto and made a part hereof. The Bridge Term Loan
Commitments of the Lenders aggregate $10,000,000 on the Second Amendment
Effective Date.

 

“Bridge Term Loan Percentage” means, for each Lender, the percentage of the
Bridge Term Loan Commitments represented by such Lender’s Bridge Term Loan
Commitment or, if the Bridge Term Loan Commitments have been terminated or have
expired, the percentage held by such Lender of the aggregate principal amount of
all Bridge Term Loans then outstanding.

 

“Bridge Term Note” is defined in Section 2.12(d).

 

“Preferred Stock Repurchase” means the repurchase by Limbach, Inc. of all
outstanding Class A preferred stock of Limbach, Inc., including the payment of
fees and expenses associated therewith.

 

“Preferred Stock Repurchase Distribution” is defined in Section 6.15(e).

 

“Second Amendment Effective Date” means January 12, 2018.

 

3.7.       Section 2.7 of the Credit Agreement is amended to add a new clause
(c) to the end thereof to read in its entirety as follows:

 

(c) Scheduled Payments of Bridge Term Loans. The Borrower shall make principal
payments on the Bridge Term Loans in equal installments on the last Business Day
of each March, June, September, and December in each year, commencing with the
calendar quarter ending March 31, 2018 (unless any such day is not a Business
Day, in which event such payment is due on the immediately preceding Business
Day) with the amount of each such principal installment then due equal to the
amount expressed next to the due date (unless any such day is not a Business
Day, in which event such payment is due on the immediately preceding Business
Day) for such installment on the following schedule:

 

Principal Installment Due Date Principal Installment Payment Amount March 31,
2018 $250,000 June 30, 2018 $250,000 September 30, 2018 $250,000 December 31,
2018 $250,000 March 31, 2019 $250,000

 

 -7- 

 

 

; it being further agreed that a final payment comprised of all principal and
interest not sooner paid on the Bridge Term Loans, shall be due and payable on
April 12, 2019, the final maturity thereof. Each principal payment on the Bridge
Term Loans shall be applied to the Lenders holding the Bridge Term Loans pro
rata based upon their Bridge Term Loan Percentages.

 

3.8.       Clause (a) of Section 2.8 of the Credit Agreement is amended to add
the phrase “, Bridge Term Loans” immediately following the phrase “Term Loans”
appearing therein.

 

3.9.       The third sentence of each of clause (b)(i), (b)(ii), and (b)(iv) of
Section 2.8 of the Credit Agreement is amended and restated in its entirety to
read as follows:

 

The amount of each such prepayment shall be applied first to the outstanding
Bridge Term Loans until paid in full, then to the outstanding Term Loans until
paid in full, then to the Revolving Loans until paid in full (without a
permanent reduction of the Revolving Commitments), and then to the Swing Loans.

 

3.10.       Clause (b)(v) of Section 2.8 of the Credit Agreement is amended and
restated in its entirety to read as follows:

 

(v)       On or before May 1 of each year, beginning May 1, 2018, the Borrower
shall prepay the then-outstanding Loans by an amount equal to 50% of Excess Cash
Flow of Parent and its Subsidiaries for the most recently completed fiscal year
of the Parent; provided that, if at any time (A) the Senior Leverage Ratio is
less than 2.00:1.00 as of the end of two consecutive fiscal quarters of the
Parent and the Parent has delivered to the Administrative Agent the compliance
certificate required by Section 6.1(c) evidencing such computations of the
Senior Leverage Ratio and (B) no Default or Event of Default has occurred and is
continuing on such date, then the Borrower shall prepay the then-outstanding
Loans by an amount equal to 25% of Excess Cash Flow for the duration of this
Agreement; provided, further, that no Excess Cash Flow payment shall be required
under this Section 2.8(b)(v) for the duration of this Agreement to the extent
that (x) the Senior Leverage Ratio is less than 1.50:1.00 as of the end of two
consecutive fiscal quarters of the Parent and the Parent has delivered to the
Administrative Agent the compliance certificate required by Section 6.1(c)
evidencing such computations of the Senior Leverage Ratio and (y) no Default or
Event of Default has occurred and is continuing on such dates. The amount of
each such prepayment shall be applied first to the outstanding Bridge Term Loans
until paid in full, then to the outstanding Term Loans until paid in full, then
to the Revolving Loans until paid in full (without a permanent reduction of the
Revolving Commitments), and then to the Swing Loans.

 

 -8- 

 

 

3.11.       Clause (b)(viii) of Section 2.8 of the Credit Agreement is amended
to add the phrase “, Bridge Term Loans” immediately following the phrase “Term
Loans” appearing therein.

 

3.12.       Clause (c)(v) appearing in Section 2.9 of the Credit Agreement is
amended and restated in its entirety to read as follows:

 

(v)       fifth, to the outstanding principal balance then scheduled as due in
respect of the Bridge Term Loans and thereafter, to the outstanding principal
balance then scheduled as due in respect of the Term Loans; and

 

3.13.       The first and second sentences appearing in clause (d) of Section
2.12 of the Credit Agreement are amended and restated in their entireties to
read as follows:

 

Any Lender may request that its Loans be evidenced by a promissory note or notes
in the forms of Exhibit D-1 (in the case of its Term Loan and referred to herein
as a “Term Note”), D-2 (in the case of its Revolving Loans and referred to
herein as a “Revolving Note”), D-3 (in the case of its Swing Loans and referred
to herein as a “Swing Note”) or D-4 (in the case of its Bridge Term Loans and
referred to herein as a “Bridge Term Note”), as applicable. In such event, the
Borrower shall prepare, execute and deliver to such Lender a Note payable to the
order of such Lender in the amount of the Term Loan, Revolving Credit
Commitment, Swing Line Sublimit or Bridge Term Loan, as applicable.

 

3.14.       Section 2 of the Credit Agreement is amended by adding a new Section
2.15 to the end thereof to read in its entirety as follows:

 

Section 2.15. Bridge Term Loan Commitments. Each Lender severally and not
jointly agrees, subject to the terms and conditions hereof, to make a loan (each
individually a “Bridge Term Loan” and, collectively, the “Bridge Term Loans”) in
Dollars to the Borrower in the amount of such Lender’s Bridge Term Loan
Commitment. The Bridge Term Loans shall be advanced in a single Borrowing on the
Second Amendment Effective Date, at which time the Bridge Term Loan Commitments
shall expire. As provided in Section 2.5(a), and subject to the terms hereof,
the Borrower may elect that all or any part of the Bridge Term Loans be
outstanding as Base Rate Loans or Eurodollar Loans. No amount of any Bridge Term
Loan may be reborrowed once it is repaid.

 

 -9- 

 

  

3.15.       The second sentence appearing in Section 5.3 of the Credit Agreement
is amended and restated in its entirety to read as follows:

 

As of any date after the Second Amendment Effective Date, the consolidated
balance sheet of the Parent and its Subsidiaries and the related consolidated
statements of income and retained earnings and of cash flows most recently
furnished to the Administrative Agent pursuant to Section 6.1(a), fairly and
adequately present in all material respects the consolidated financial condition
of the Parent and its Subsidiaries as at said dates and the consolidated results
of their operations and cash flows for the periods then ended in conformity with
GAAP applied on a consistent basis.

 

3.16.       Section 5.7 of the Credit Agreement is amended and restated to add a
new sentence immediately following the first sentence appearing therein, to read
in its entirety as follows:

Notwithstanding anything contained herein to the contrary, the Borrower shall
use all proceeds of the Bridge Term Loans to make the Preferred Stock Repurchase
Distribution and to pay certain fees and expenses associated therewith.

 

3.17.       Clauses (a), (b), (c) and (d) of Section 6.1 of the Credit Agreement
are amended and restated in their entireties to read as follows:

 

(a)       Quarterly Reports. Within fifty (50) days after the end of each of the
first three fiscal quarters of each fiscal year of the Parent, and within
seventy-five (75) days after the end of the last fiscal quarter of each fiscal
year of the Parent, commencing with the fiscal quarter of the Parent ending
December 31, 2017, (i) the Parent and its Subsidiaries consolidated balance
sheet as at the end of such fiscal quarter and the related consolidated
statements of income and retained earnings and of cash flows for such fiscal
quarter and for the elapsed portion of the fiscal year-to-date period then
ended, each in reasonable detail, prepared by the Parent in accordance with
GAAP, setting forth comparative figures for the corresponding fiscal quarter in
the prior fiscal year and comparable budgeted figures for such fiscal quarter,
all of which shall be certified by the Chief Financial Officer or other Duly
Authorized Officer of the Parent acceptable to the Administrative Agent that the
consolidated schedules fairly present in all material respects in accordance
with GAAP the financial condition of the Parent and its Subsidiaries as of the
dates indicated and the results of their operations and changes in their cash
flows for the periods indicated, subject to normal year-end audit adjustments
and the absence of footnotes, (ii) a work in process report of the Parent and
its Subsidiaries as at the end of such fiscal quarter in form and substance
reasonably acceptable to the Administrative Agent, and (iii) a management
discussion and analysis (with reasonable detail and specificity) of the results
of operations for the fiscal periods reported.

 

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(b)       Annual Statements. Within one hundred twenty (120) days after the
close of each fiscal year of the Parent, (i) a copy of Limbach, Inc.’s
consolidated balance sheet as of the last day of the fiscal year then ended and
Limbach, Inc.’s consolidated statements of income, retained earnings, and cash
flows for the fiscal year then ended, and accompanying notes thereto, each in
reasonable detail showing in comparative form the figures for the previous
fiscal year, accompanied by an unqualified opinion of a firm of independent
public accountants of recognized national standing, selected by the Loan Parties
and reasonably acceptable to the Administrative Agent, to the effect that the
consolidated financial statements have been prepared in accordance with GAAP and
present fairly in accordance with GAAP the consolidated financial condition of
Limbach, Inc. and its Subsidiaries as of the close of such fiscal year and the
results of their operations and cash flows for the fiscal year then ended and
that an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards; provided, that, for the fiscal year ending December 31, 2017, such
audited financial statements shall include a footnote confirming that the Loan
Parties are in compliance with the financial covenants set forth in Section
6.20, (ii) the unaudited consolidated balance sheet as of the last day of the
fiscal year then ended of the Parent and its Subsidiaries and the unaudited
consolidated statements of income, retained earnings, and cash flows for the
fiscal year then ended of the Parent and its Subsidiaries which shall be
certified by the Chief Financial Officer or other Duly Authorized Officer of the
Parent acceptable to the Administrative Agent that such financial statements
fairly present in all material respects in accordance with GAAP the financial
condition of the Parent and its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash flows for the periods
indicated, and (iii) a certificate in form and substance reasonably acceptable
to the Administrative Agent setting forth the consolidating balance sheet and
income statement and comparative statements of cash flows derived from the
audited financial statements delivered pursuant to clause (b)(i) above and the
unaudited financial statements delivered pursuant to clause (b)(ii) above for
the fiscal year then ended, which shall be certified by the Chief Financial
Officer or other Duly Authorized Officer of the Parent acceptable to the
Administrative Agent.

 

(c)       Officer’s Certificates. Within fifty (50) days after the end of each
of the first three fiscal quarters of each fiscal year of the Parent, and within
seventy-five (75) days after the end of the last fiscal quarter of each fiscal
year of the Parent, and at the time of the delivery of the financial statements
provided for in Section 6.1(b), commencing with the fiscal quarter of the Parent
ending December 31, 2017, (i) a certificate of the Chief Financial Officer or
other Duly Authorized Officer of the Parent acceptable to Administrative Agent
in the form of Exhibit E (A) stating no Default or Event of Default has occurred
and is continuing during the period covered by such statements or, if a Default
or Event of Default exists, a detailed description of the Default or Event of
Default and all actions the Loan Parties are taking with respect to such Default
or Event of Default, (B) confirming that the representations and warranties
stated in Section 5 remain true and correct (or, in the case of any
representation or warranty not qualified as to materiality, true and correct in
all material respects) as of said time, except to the extent such
representations and warranties relate to an earlier date (and in such case,
confirming they are true and correct (or, in the case of any representation or
warranty not qualified as to materiality, true and correct in all material
respects) as of such earlier date), and (C) showing detailed covenant
calculations evidencing the Loan Parties’ compliance with the covenants set
forth in Section 6.20; and (ii) a comparison of the current year to date
financial results (other than in respect of the balance sheets included therein)
against the budgets required to be submitted pursuant to Section 6.1(d).

 

 -11- 

 

 

(d)       Budgets. As soon as available, but in any event at least thirty (30)
days after the first day of each fiscal year of the Parent, a budget in form
satisfactory to the Administrative Agent (including a breakdown of the projected
results of each of the construction and service lines of business of the Parent
and its Subsidiaries consistent with historical past practices, budgeted
consolidated and consolidating statements of income, and sources and uses of
cash and balance sheets for the Parent and its Subsidiaries) of the Parent and
its Subsidiaries in reasonable detail satisfactory to the Administrative Agent
for each fiscal month and the four fiscal quarters of the immediately succeeding
fiscal year and, with appropriate discussion, the principal assumptions upon
which such budget is based; provided, that, if at any time during such fiscal
year an event occurs which could reasonably be expected to have a Material
Adverse Effect, the Loan Parties shall furnish to the Administrative Agent an
updated budget in form satisfactory to the Administrative Agent.

 

3.18.       Section 6.15 of the Credit Agreement is amended to (i) delete the
word “and” at the end of clause (c), (ii) restate clause (d) in its entirety,
and (iii) add a new clause (e) immediately after clause (d), in each case of
(ii) and (iii), to read in their entireties as follows:

 

(d)       (i) distributions to the Parent and the Parent may, in turn, make
distributions to Limbach, Inc. for the purpose of paying (A) general
administrative costs and expenses in an aggregate amount not to exceed
$1,000,000 in any fiscal year of the Parent; provided, that, for purposes of
clarity, the foregoing does not prohibit the incurrence of aggregate
administrative costs and expenses for Limbach, Inc. on a consolidated basis to
exceed $1,000,000, so long as any such costs and expenses paid directly or
indirectly by the Parent shall be recognized by the Parent as such costs and
expenses incurred by it and appropriately reported on the Parent’s financial
statements required by Section 6.1(a) and Section 6.1(b), (B) customary
indemnifications of officers and directors and (C) customary directors’ fees,
and (ii) the 2017 LHI Distribution re: Professional Services; and

 

(e)       so long as no Event of Default or Default exists or would result
therefrom, the Borrower may make a one-time distribution to the Parent, and the
Parent may, in turn, make a one-time distribution to Limbach, Inc., to permit
Limbach, Inc. to make the Preferred Stock Repurchase; provided, that (i) the
Preferred Stock Repurchase Distribution is made on or prior to January 14, 2018,
(ii) the Preferred Stock Repurchase Distribution does not exceed $10,000,000,
and (iii) the proceeds of the Preferred Stock Repurchase Distribution are used
to make the Preferred Stock Repurchase on or prior to January 14, 2018 (the
“Preferred Stock Repurchase Distribution”).

 

 -12- 

 

 

3.19.       Clause (a) of Section 6.20 is amended and restated in its entirety
to read as follows:

 

(a)       Reserved.

 

3.20.       Clause (b) of Section 6.20 is amended and restated in its entirety
to read as follows:

 

(b)  Senior Leverage Ratio. The Parent and its Subsidiaries shall not, as of the
last day of each fiscal quarter of the Parent ending during the periods
specified below, permit the Senior Leverage Ratio to be greater than:

 

From and Including To and Including Senior Leverage Ratio Shall Not Be Greater
Than: The Second Amendment Effective Date December 30, 2018 2.75:1.00 December
31, 2018 September 29, 2019 2.50:1.00 September 30, 2019 At all times thereafter
2.25:1.00

 

3.21.       Clause (c) of Section 6.20 is amended by replacing the word
“Borrower” in each place it appears therein with the word “Parent”.

 

3.22.       Clause (e)(i) of Section 6.20 is amended and restated in its
entirety to read as follows:

 

(i)       Cash Equity Contribution Requirements. In the event the Parent and its
Subsidiaries fail to comply with the financial covenants set forth in this
Section 6.20(a), (b), (c) or (d) as of the last day of any fiscal quarter, any
cash equity contribution by Limbach, Inc. to the Parent, which, in turn, will
make a cash equity contribution to the Borrower, after the last day of such
fiscal quarter and on or prior to the day that is fifteen (15) days after the
day on which financial statements are required to be delivered for such fiscal
quarter will, at the irrevocable election of the Parent, be included in the
calculation of EBITDA solely for the purposes of determining compliance with
such covenants at the end of such fiscal quarter and any subsequent period that
includes such fiscal quarter (any such equity contribution so included in the
calculation of EBITDA, a “Specified Equity Contribution”); provided that:

 

 -13- 

 

 

(A)       notice of the Parent’s intent to receive a Specified Equity
Contribution shall be delivered in writing no later than the day on which
financial statements are required to be delivered for the applicable fiscal
quarter,

 

(B)       the amount of any Specified Equity Contribution will be no greater
than the amount required to cause the Parent to be in compliance with such
covenants,

 

(C)       all Specified Equity Contributions will be disregarded for purposes of
the calculation of EBITDA for all other purposes, including calculating basket
levels, pricing, determining compliance with incurrence based or pro forma
calculations or conditions, and other items governed by reference to EBITDA,

 

(D)       there shall be no more than three (3) Specified Equity Contributions
during the term of this Agreement,

 

(E)       in each consecutive two fiscal quarter period, there shall be a period
of at least one (1) fiscal quarter in respect of which no Specified Equity
Contribution is made,

 

(F)       the proceeds received by the Borrower from all Specified Equity
Contributions shall be promptly used by the Borrower to prepay the Bridge Term
Loans until paid in full, and then to prepay the Term Loans (and such prepayment
shall be applied to the remaining principal installments thereof in inverse
order of maturity), and

 

(G)       any Loans prepaid with the proceeds of Specified Equity Contributions
shall be deemed outstanding for purposes of determining compliance with such
covenants for the current fiscal quarter and any subsequent period that includes
such fiscal quarter.

 

Notwithstanding anything to the contrary in this Agreement, upon timely receipt
by the Parent in cash of the appropriate Specified Equity Contribution, if after
giving effect thereto as set forth above no Event of Default would then exist
under Section 6.20(a), (b), (c) and/or (d) on a pro forma basis, the applicable
Event(s) of Default under Section 6.20(a), (b), (c) and/or (d) shall be deemed
cured.

  

3.23.       Clause (e)(ii) of Section 6.20 is amended by replacing the word
“Borrower” in each place it appears therein with the word “Parent”.

 

 -14- 

 

 

3.24.        Clause (b)(i)(B) of Section 10.9 of the Credit Agreement is amended
and restated in its entirety to read as follows:

 

(B)        In any case of an assignment not described in Section 10.9(b)(i)(A)
above, the aggregate amount of the Commitment(s) (which for this purpose
includes Loans outstanding thereunder) or, if the applicable Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5,000,000, in the case
of any assignment in respect of the Revolving Credit, or $1,000,000, in the case
of any assignment in respect of the Term Credit or the Bridge Term Credit,
unless each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed).

 

3.25.       Clause (b)(iii)(B) of Section 10.9 of the Credit Agreement is
amended and restated in its entirety to read as follows:

 

(B)       the consent of the Administrative Agent (such consent not to be
unreasonably withheld, delayed, or conditioned) shall be required for
assignments in respect of (i) the Revolving Credit or any unfunded Commitments
with respect to the Term Loans or Bridge Term Loans if such assignment is to a
Person that is not a Lender with a Commitment in respect of such Credit, an
Affiliate of such Lender or an Approved Fund with respect to such Lender, or
(ii) any Term Loans or Bridge Term Loans to a Person who is not a Lender, an
Affiliate of a Lender or an Approved Fund;

 

3.26.       The Exhibits to the Credit Agreement are amended by adding a new
Exhibit D-4 in the appropriate alphabetic sequence therein to read in its
entirety as Exhibit D-4 attached hereto.

 

3.27.       Exhibit E to the Credit Agreement is amended and restated in its
entirety by Exhibit E attached hereto.

 

3.28.       Schedule 1 to the Credit Agreement is amended and restated in its
entirety by Schedule 1 attached hereto.

 

Section 4. Conditions Precedent.

 

The effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:

 

4.1. The Borrower, the Guarantors, the Lenders, the Swing Line Lender, the L/C
Issuer and the Administrative Agent shall have executed and delivered this
Amendment.

 

 -15- 

 

 

4.2. For each Lender requesting a Bridge Term Note, the Administrative Agent
shall have received such Lender’s duly executed Bridge Term Note, dated the
Second Amendment Effective Date and otherwise in compliance with the provisions
of Section 2.12(d) of the Credit Agreement.

 

4.3. With respect to each Loan Party, the Administrative Agent shall have
received (a) a good standing certificate from its jurisdiction of organization
and (b) financing statement lien search results evidencing the absence of Liens
except for Permitted Liens.

 

4.4. The Administrative Agent shall have received the favorable written opinion
of counsel to the Loan Parties, in form and substance satisfactory to the
Administrative Agent.

 

4.5. The Administrative Agent shall have received certification from the
Borrower’s Chief Financial Officer or other officer of the Borrower acceptable
to the Administrative Agent of the Solvency of the Loan Parties on a
consolidated basis after giving effect to the transactions contemplated hereby.

 

4.6. The Administrative Agent shall have received for itself and for the other
Lenders the fees set forth in that certain Amended and Restated Second Amendment
Fee Letter dated as of the date hereof.

 

4.7. Legal matters incident to the execution and delivery of this Amendment
shall be satisfactory to the Administrative Agent and its counsel.

 

Section 5. Condition Subsequent.  

 

It shall be an Event of Default under Section 7.1(e) of the Credit Agreement if,
within ninety (90) days of the Second Amendment Effective Date (which date may
be extended by the written approval of the Administrative Agent and the Required
Lenders in their reasonable discretion), Limbach, Inc. does not (a) execute and
deliver to the Administrative Agent an Additional Guarantor Supplement, an
Assumption and Supplement to Security Agreement, and such other Collateral
Documents as the Administrative Agent may then require, if any, and (b) deliver
to the Administrative Agent such other instruments, documents, certificates and
opinions reasonably required by the Administrative Agent in connection
therewith; provided, that the foregoing joinders shall be subject to the
execution (without the incurrence of any additional fees paid to the
Administrative Agent or the Lenders (other than reimbursement of reasonable
out-of-pocket legal expenses as required under the Credit Agreement)) of a
further amendment to the Credit Agreement to provide that, among other terms to
be agreed to by the Borrower, the Administrative Agent, and the Lenders: (i)
Limbach, Inc. shall be a Loan Party, (ii) the reporting requirements applicable
to the Parent and its Subsidiaries as set forth in Section 6.1 of the Credit
Agreement shall be replaced and superseded by reporting requirements applicable
to Limbach, Inc. and its Subsidiaries, (iii) the negative covenants in the
Credit Agreement shall apply to Limbach, Inc. (provided that, Section 6.15 shall
be modified to remove all limitations on Restricted Payments from the Parent to
Limbach, Inc.), (iv) the financial covenants in Section 6.20 of the Credit
Agreement and, to the extent applicable, all definitions used therein shall be
modified to be measured on a consolidated basis at Limbach, Inc., and (v) the
definition of “EBITDA” shall be modified as agreed to by the Borrower, the
Administrative Agent and the Lenders; provided that, such modification shall
include an add-back for non-cash stock based compensation expenses.

 

 -16- 

 

 

Section 6. Affirmation of Guarantors.  

 

Each Guarantor hereby confirms that, after giving effect to this Amendment, each
Loan Document to which such Guarantor is a party continues in full force and
effect and is the legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability. The Borrower and each Guarantor
acknowledge and agree that (a) nothing in the Credit Agreement, this Amendment,
or any other Loan Document shall be deemed to require the consent of such
Guarantor to any future amendments to the Credit Agreement, and (b) the Lenders
are relying on the assurances provided in this Section in entering into this
Amendment and maintaining credit outstanding to the Borrower.

 

Section 7. Acknowledgement of Liens.  

 

The Borrower and the Guarantors hereby acknowledge, confirm and agree that the
Administrative Agent has a valid, enforceable and perfected first-priority lien
upon and security interest in the Collateral granted to the Administrative Agent
pursuant to the Loan Documents (subject only to Permitted Liens), and nothing
herein contained shall in any manner affect or impair the priority of the Liens
created and provided for thereby as to the indebtedness, obligations, and
liabilities which would be secured thereby prior to giving effect to this
Amendment.

 

Section 8. Representations and Warranties of Borrower and Guarantors.

 

To induce the Administrative Agent, the Lenders and the L/C Issuer to enter into
this Amendment, the Borrower and the Guarantors hereby represent and warrant to
the Administrative Agent, the Lenders and the L/C Issuer that, as of the date
hereof, (a) after giving effect to this Amendment, the representations and
warranties set forth in Section 5 of the Credit Agreement and in the other Loan
Documents, including this Amendment, are and shall remain true and correct (or,
in the case of any representation or warranty not qualified as to materiality,
true and correct in all material respects), except to the extent the same
expressly relate to an earlier date (and in such case shall be true and correct
(or, in the case of any representation or warranty not qualified as to
materiality, true and correct in all material respects) as of such earlier
date), (b)  no Default or Event of Default exists or shall result after giving
effect to this Amendment, and (c) the Borrower and each Guarantor has the power
and authority to execute, deliver, and perform this Amendment and have taken all
necessary action to authorize their execution, delivery, and performance of this
Amendment.

  

 -17- 

 

 

Section 9. Borrowing on the Second Amendment Effective Date.

 

The Lenders each agree that, for the initial Borrowing of Bridge Term Loans on
the Second Amendment Effective Date, (a) the Borrower may give notice to the
Administrative Agent for such Borrowing of Eurodollar Loans later than the time
specified in Section 2.5 of the Credit Agreement, and (b) the Borrower and the
Administrative Agent may agree that, notwithstanding anything to the contrary in
the Credit Agreement, (i) LIBOR shall be equal to the LIBOR Index Rate for a
period of two-months and (ii) the initial Interest Period shall commence on the
Second Amendment Effective Date and end on February 28, 2018.

 

Section 10. Miscellaneous.

10.1. This Amendment shall be binding on and shall inure to the benefit of the
Borrower, the Guarantors, the Administrative Agent, the Lenders, and the L/C
Issuer, and their respective successors and assigns. The terms and provisions of
this Amendment are for the purpose of defining the relative rights and
obligations of the Borrower, the Guarantors, the Administrative Agent, the
Lenders, and the L/C Issuer with respect to the transactions contemplated
hereby, and there shall be no third party beneficiaries of any of the terms and
provisions of this Amendment.

 

10.2. This Amendment constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other understandings,
oral or written, with respect to the subject matter hereof. Except as
specifically waived and amended hereby, all of the terms and conditions set
forth in the Credit Agreement shall stand and remain unchanged and in full force
and effect.

 

10.3. Section and sub-section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

 

10.4. Wherever possible, each provision of this Amendment shall be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Amendment shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Amendment.

 

10.5. Except as otherwise provided in this Amendment, if any provision contained
in this Amendment is in conflict with, or inconsistent with, any provision in
any of the Loan Documents, the provision contained in this Amendment shall
govern and control.

 

10.6. This Amendment may be executed in any number of separate counterparts,
each of which shall collectively and separately constitute one agreement.
Delivery of an executed signature page to this Amendment by facsimile
transmission or by e-mail transmission of an Adobe portable document format file
(also known as a “PDF” file) shall be effective as delivery of a manually
executed counterpart hereof.

 

 -18- 

 

 

10.7. The provisions contained in Sections 10.14 (Governing Law; Jurisdiction;
Etc.) and 10.20 (Waiver of Jury Trial) of the Credit Agreement are incorporated
herein by reference to the same extent as if reproduced herein in their
entirety, except with reference to this Amendment rather than the Credit
Agreement.

  

 

[Signature Pages to Follow] 

 

 -19- 

 

 

In Witness Whereof, the parties hereto have caused their duly authorized
officers to execute and deliver this Amendment as of the date first set forth
above.

 

  “Borrower”           Limbach Facility Services LLC           By   /s/ John T.
Jordan, Jr.     Name: John T. Jordan, Jr.     Title: Executive Vice President,
Chief Financial Officer and Treasurer

 

 

[Signature Page to Second Amendment to Credit Agreement and Limited Waiver]

 

 

 

 

  “Guarantors”           Limbach Holdings LLC           By /s/ John T. Jordan,
Jr.     Name: John T. Jordan, Jr.     Title:    Executive Vice President, Chief
Financial Officer and Treasurer           Limbach Company LLC           By /s/
John T. Jordan, Jr.     Name: John T. Jordan, Jr.     Title: Executive Vice
President, Chief Financial Officer and Treasurer           Harper Limbach LLC  
        By /s/ John T. Jordan, Jr.     Name: John T. Jordan, Jr.     Title:   
Executive Vice President and Treasurer           Limbach Company LP           By
/s/ John T. Jordan, Jr.     Name: John T. Jordan, Jr.     Title:    Executive
Vice President, Chief Financial Officer and Treasurer           Harper Limbach
Construction LLC           By /s/ John T. Jordan, Jr.     Name: John T. Jordan,
Jr.     Title:    Executive Vice President and Treasurer

 

 

[Signature Page to Second Amendment to Credit Agreement and Limited Waiver]

 

 

 

 

  “Lenders”           Fifth Third Bank, an Ohio banking corporation, as a
Lender, as L/C Issuer, and as Administrative Agent           By /s/ S. Bradley
McDougall     Name:   S. Bradley McDougall     Title:     Vice President

 

 

[Signature Page to Second Amendment to Credit Agreement and Limited Waiver]

 

 

 

 

  CIBC Bank USA, formally known as The PrivateBank and Trust Company, as a
Lender         By /s/ David L. Sauerman     Name   David L. Sauerman    
Title     Managing Director

 

 

[Signature Page to Second Amendment to Credit Agreement and Limited Waiver]

 

 

 

 

  Wheaton Bank & Trust Company, as a Lender           By /s/ Christopher Van
Tussel     Name   Christopher Van Tussel     Title     Vice President

 

 

[Signature Page to Second Amendment to Credit Agreement and Limited Waiver]

  

 

 

 

  Citizens Bank of Pennsylvania, as a Lender         By   /s/ John J. Ligday Jr.
    Name   John J. Ligday Jr.     Title     Senior Vice President

 

 

[Signature Page to Second Amendment to Credit Agreement and Limited Waiver]

  

 

 

 

Annex 1

Violations

 

1.Financial Statement Violations. The quarterly consolidated and consolidating
balance sheet and the related consolidated and consolidating statements of
income and retained earnings and of cash flows (collectively, the “Quarterly
Financial Statements”) delivered to the Administrative Agent and the Lenders for
each fiscal quarter prior to the Second Amendment Effective Date were either the
consolidated Quarterly Financial Statements of Limbach, Inc. and its
Subsidiaries or of the Parent and its Subsidiaries, and not of the Borrower and
its Subsidiaries, in violation of Section 6.1(a) of the Credit Agreement
(collectively, the “Financial Statement Violations”).

 

2.Restricted Payment Violations. The Borrower made cash distributions to the
Parent, and the Parent, in turn, made cash distributions to Limbach, Inc., which
Limbach, Inc. in turn used to pay general administrative costs and expenses
incurred during the Parent’s fiscal year ending December 31, 2017, which
exceeded the Restricted Payments permitted to be made under Section 6.15(d) of
the Credit Agreement and Section 6.25 of the Credit Agreement by an aggregate
amount of $1,639,205.29 (collectively, the “Restricted Payment Violations”).

 

3.Reporting Violations. The Borrower improperly reported cash distributions made
to Limbach, Inc. in the aggregate amount of (i) $778,411 during the Parent’s
fiscal year ending December 31, 2016 (the “2016 LHI Distribution”) and (ii)
$2,639,205.29 during the Parent’s fiscal year ending December 31, 2017 (the
“2017 LHI Distributions”), in each case, which Limbach, Inc. used to pay general
administrative costs and expenses, as a receivable payable by Limbach, Inc. on
the respective Quarterly Financial Statements ending December 31, 2016, March
31, 2017, June 30, 2017 and September 30, 2017, which characterization of each
such distribution on the financial statements of Parent and its Subsidiaries is
in violation of Section 6.1(a) of the Credit Agreement (collectively, including
any representations and warranties made, and any certificates delivered, by the
Borrower to the Administrative Agent and each Lender pursuant to the Credit
Agreement that were not true and correct at the time made or delivered based
solely on such characterization, the “Reporting Violations”). For the avoidance
of doubt, Limbach, Inc. is not a party to, and has no obligations under, the
Credit Agreement. The Reporting Violations relate solely to the reporting
obligations of the Parent and its Subsidiaries under the Credit Agreement, which
do not include, and are independent from, the financial information and
reporting of Limbach, Inc., whether on a quarterly basis or otherwise.

 

   

 

 

4.FCCR Calculation Violations. The Borrower did not include the 2016 LHI
Distribution or the 2017 LHI Distributions in its calculation of the Fixed
Charge Coverage Ratio for the fiscal quarters ending December 31, 2016, March
31, 2017, June 30, 2017, or September 30, 2017, in violation of Section
6.1(c)(i)(C) of the Credit Agreement (the “FCCR Calculation Violations”), and in
connection with the FCCR Calculation Violation for the fiscal quarter ending
September 30, 2017, the Fixed Charge Coverage Ratio for such fiscal quarter was
less than 1.25:1.00, in violation of Section 6.20(c) of the Credit Agreement
(the “Financial Covenant Violation”, and together with the Financial Statement
Violations, the Restricted Payment Violations, the Reporting Violations, and the
FCCR Calculation Violations, collectively, the “Violations”); provided, the
Administrative Agent acknowledges that, notwithstanding the FCCR Calculation
Violations, the Borrower delivered a compliance certificate for each such fiscal
quarter.

 

   

 

 

Exhibit D-4

 

Bridge Term Note

 

$_______________ ____________, 20__

 

For Value Received, the undersigned, Limbach Facility Services LLC, a Delaware
limited liability company (the “Borrower”), hereby unconditionally promises to
pay to _________________________ (the “Lender”) or its registered assigns at the
principal office of Fifth Third Bank, an Ohio banking corporation, as
Administrative Agent, in Cincinnati, Ohio (or such other location as the
Administrative Agent may designate to the Borrower), in immediately available
funds, the principal sum of ___________________ Dollars ($__________) or, if
less, the aggregate unpaid principal amount of the Bridge Term Loan made or
maintained by the Lender to the Borrower pursuant to the Credit Agreement, in
installments in the amounts called for by Section 2.7(c) of the Credit
Agreement, commencing on March 31, 2018, together with interest on the principal
amount of such Bridge Term Loan from time to time outstanding hereunder at the
rates, and payable in the manner and on the dates, specified in the Credit
Agreement.

 

This Bridge Term Note (this “Note”) is one of the Bridge Term Notes referred to
in the Credit Agreement dated as of July 20, 2016, among the Borrower, Limbach
Holdings LLC, a Delaware limited liability company (the “Parent”), the other
Guarantors party thereto, the Lenders party thereto, and Fifth Third Bank, an
Ohio banking corporation, as Administrative Agent and L/C Issuer (as amended,
restated, modified or supplemented from time to time, the “Credit Agreement”),
and this Note and the holder hereof are entitled to all the benefits and
security provided for thereby or referred to therein, to which Credit Agreement
reference is hereby made for a statement thereof. All defined terms used in this
Note, except terms otherwise defined herein, shall have the same meaning as in
the Credit Agreement. This Note shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflicts of law
provisions (other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law).

 

Voluntary prepayments may be made hereon, certain prepayments are required to be
made hereon, and this Note may be declared due prior to the expressed maturity
hereof, all in the events, on the terms and in the manner as provided for in the
Credit Agreement.

 

The Borrower hereby waives demand, presentment, protest or notice of any kind
hereunder.

 

 

Limbach Facility Services LLC 

          By       Name       Title  

 

   

 

 

Exhibit E

 

 

 

 Compliance Certificate

 

Date:  __________, 20__

 

To:Fifth Third Bank, as Administrative Agent under, and the Lenders party to,
the Credit Agreement described below

 

Reference is made to the Credit Agreement, dated as of July 20, 2016, by and
among Limbach Facility Services LLC, a Delaware limited liability company (the
“Borrower”), Limbach Holdings LLC, a Delaware limited liability company (the
“Parent”), the other Guarantors party thereto, the Lenders party thereto, and
Fifth Third Bank, an Ohio banking corporation, as Administrative Agent and L/C
Issuer (as amended, restated, modified or supplemented from time to time, the
“Credit Agreement”). Capitalized terms used herein and not defined herein have
the meanings assigned to them in the Credit Agreement. This Compliance
Certificate is furnished to the Administrative Agent and the Lenders pursuant to
the Credit Agreement.

 

The Undersigned, solely in the capacity set forth in paragraph 1 below and not
in any individual capacity, hereby certifies that:

 

1. I am the duly elected/appointed ____________ of the Parent.

 

2. I have reviewed the terms of the Credit Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Parent and its Subsidiaries during the accounting period
covered by the attached financial statements.

 

3. No Default or Event of Default has occurred and is continuing during or at
the end of the accounting period covered by the attached financial statements or
as of the date of this Compliance Certificate, except as set forth below.

 

4. The financial statements required by Section 6.1 of the Credit Agreement and
being furnished to you concurrently with this Compliance Certificate fairly and
adequately present in all material respects the financial condition of the
Parent and its Subsidiaries as of [___________], and the results of their
operations and cash flows for the [quarter/year] ended, in conformity with GAAP
applied on a consistent basis.

 

   

 

 

5. The representations and warranties contained in Section 5 of the Credit
Agreement are true and correct (or, in the case of any representation or
warranty not qualified as to materiality, true and correct in all material
respects) as though made on and as of such date (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct (or, in the case of any representation or warranty not
qualified as to materiality, true and correct in all material respects) as of
such earlier date).

 

6. Schedule I hereto sets forth financial data and computations evidencing the
Loan Parties’ compliance with certain covenants of the Credit Agreement, all of
which data and computations are, to the best of my knowledge, true, complete and
correct and have been made in accordance with the relevant Sections of the
Credit Agreement.

 

7. Schedule II hereto sets forth a comparison of current financials against the
budget for such period as required by Section 6.1(d) of the Credit Agreement.

 

8. Attached hereto is an updated Schedule 5.9 to the Credit Agreement, which is
true, complete and correct as of the date of this Compliance Certificate.

 

9. Described below are the exceptions, if any, to paragraph 3 above by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Loan Parties have taken, are taking, or propose
to take with respect to each such condition or event:

 

       

  

In the event of a conflict between the attached Schedule I and any
certifications relating thereto and the Credit Agreement and related definitions
used in calculating such covenants, the Credit Agreement and such related
definitions shall govern and control. The foregoing certifications, together
with the computations set forth in Schedule I hereto and the financial
statements attached as Schedule II hereto in support hereof, are made and
delivered as of the date first above written.

 

 

  Limbach Holdings LLC           By       Name       Title  

  

 - 2 - 

 

 

Schedule I

to Compliance Certificate

 

Limbach Facility Services LLC

 

Compliance Calculations

for Credit Agreement dated as of July 20, 2016

 

Calculations as of _____________, 20__

 

 

 

A.       Reserved.

 

B.        Senior Leverage Ratio (Section 6.20(b))

  1. Total Funded Debt1 $___________ 2. Subordinated Debt $___________ 3. Line
B1 minus Line B2 $___________ 4. Net Income for past 4 quarters $___________ 5.
Interest Expense for past 4 quarters $___________ 6. Federal, state and local
income taxes for past 4 quarters $___________ 7. Depreciation and amortization
expense for past 4 quarters $___________ 8. Transaction expenses incurred in
connection with Permitted Acquisitions, whether or not consummated (not to
exceed $50,000 in the aggregate) for past 4 quarters $___________ 9. Fees and
expenses paid in cash for past 4 quarters in connection with the Credit
Agreement and the Related Transactions to the extent paid on or before that date
occurring six months after the Closing Date in an aggregate amount not to exceed
$2,500,000 $___________ 10. Losses or other charges related to Legacy Claims for
past 4 quarters in an amount not to exceed $500,000 during such 4 quarters (and
in an aggregate amount not to exceed $2,500,000 during the term of the Credit
Agreement) $___________ 11. Prepayment Premium (as defined in the Mezzanine Loan
Agreement) to the extent paid during past 4 quarters in connection with the 2016
Mezzanine Subordinated Debt Prepayment in an aggregate amount not to exceed
$2,400,000 during the term of the Credit Agreement $___________

  

 

 

1Total Funded Debt does not include obligations in respect of Bonding
Agreements.

 

   

 

 

12. Sum of Lines B4, B5, B6, B7, B8, B9, B10 and B11 (“EBITDA”) $___________ 13.
Ratio of Line B3 to Line B12 (“Senior Leverage Ratio”) ____:1.00 14. Senior
Leverage Ratio (from Line B13) must not exceed ____:1.00 15. The Parent and its
Subsidiaries are in compliance (circle yes or no) yes/no C. Fixed Charge
Coverage Ratio (Section 6.20(c))   1. EBITDA (from Line B12) $___________ 2.
Capital Expenditures not financed with Indebtedness for past 4 quarters
$___________ 3. Line C1 minus Line C2 $___________ 4. Regularly Scheduled
Principal Payments (excluding any Excess Cash Flow payment) for past 4 quarters
$___________ 5. Cash portion of Interest Expense for past 4 quarters
$___________ 6. Restricted Payments (including, without duplication, Tax
Distributions, but excluding (i) the 2017 LHI Distribution re: Professional
Services and (ii) the Preferred Stock Repurchase Distribution) for past 4
quarters $___________ 7. Federal, state and local income taxes paid in cash for
past 4 quarters $___________ 8. Sum of Lines C4, C5, C6 and C7 (“Fixed Charges”)
$___________ 9. Ratio of Line C3 to Line C8 (“Fixed Charge Coverage Ratio”)
____:1.00 10. Fixed Charge Coverage Ratio (from Line C9) must not be less than
1.25:1.00 11. The Parent and its Subsidiaries are in compliance (circle yes or
no) yes/no

 

D. Minimum Tangible Net Worth (Section 6.20(d))   1. Capital stock (less
treasury stock), paid-in capital surplus and retained earnings (deficit) of the
Borrower and any of its Subsidiaries (excluding inter-company items and all
amounts properly attributable to minority interests, if any, in the stock and
surplus of any such Subsidiary) $___________

 

 -2- 

 

 

2. Deferred charges (less amortization, unamortized debt discount and expenses
and corporate organization expenses) $___________ 3. Book amount of all assets
which would be treated as intangibles under GAAP, including, without limitation,
such items as goodwill, trademark applications, trade names, service marks,
brand names, copyrights, patents, patent applications and licenses, and rights
with respect to the foregoing $___________ 4. Amount by which aggregate
inventories or aggregate securities appearing on the asset side of such
consolidated balance sheet exceed the lower of cost or market value (at the date
of such balance sheet) $___________ 5. Any write-up in the book amount of any
asset resulting from a revaluation thereof from the book amount entered upon
acquisition of such asset $___________ 6. Sum of Lines D2, D3, D4 and D5
$___________ 7. Line D1 minus Line D6 $___________ 8. Line D7 must be less than
$___________ 9. The Loan Parties are in compliance (circle yes or no) yes/no

 

 -3- 

 

 

Schedule II

to Compliance Certificate

 

Limbach Facility Services LLC

 

Financial Statements

for Credit Agreement dated as of July 20, 2016

 

 

 

[See attached.]

 

   

 

 

Schedule 5.9

to Compliance Certificate

 

Limbach Facility Services LLC

 

Updated Schedule 5.9

for Credit Agreement dated as of July 20, 2016

 

 

 

   

 

 

Schedule 1

 

Commitments

 

Name of Lender Term Loans Outstanding on the Second Amendment Effective Date
Bridge Term Loan Commitments Revolving Credit Commitment Fifth Third Bank
$5,398,469.39 $3,061,224.49 $7,653,061.22 CIBC Bank USA (f/k/a The PrivateBank
and Trust Company) $4,318,775.51 $2,448,979.59 $6,122,448.98 Wheaton Bank &
Trust Company $4,318,775.51 $2,448,979.59 $6,122,448.98 Citizens Bank of
Pennsylvania $3,598,979.59 $2,040,816.33 $5,102,040.82 Total: $17,635,000.00
$10,000,000.00 $25,000,000.00