Exhibit 10.6

 

Execution Version

 

 

 

Loan Agreement

 

among

 

Limbach Facility Services LLC, a Delaware limited liability company,
as Borrower,

 

Limbach Holdings LLC, a Delaware limited liability company,

as Parent,

 

The Guarantors
from time to time party hereto,

 

The Lenders

from time to time party hereto,

 

and

 

Alcentra Capital Corporation, a Maryland corporation,

as Agent

 

Dated as of July 20, 2016

  

 

 

 

 

  

Table of Contents

 

Section Heading Page       Section 1. Definitions; Interpretation 1      
Section 1.1. Definitions 1 Section 1.2. Interpretation 23 Section 1.3. Change in
Accounting Principles 24 Section 1.4. Rounding 24       Section 2. Loans 24    
  Section 2.1. Loans 24 Section 2.2. [Reserved] 24 Section 2.3. [Reserved] 24
Section 2.4. Interest 25 Section 2.5. [Reserved] 26 Section 2.6. [Reserved] 26
Section 2.7. Maturity of Loans 26 Section 2.8. Prepayments 26 Section 2.9. Place
and Application of Payments 28 Section 2.10. [Reserved] 28 Section 2.11.
Reserved 28 Section 2.12. Evidence of Indebtedness 28 Section 2.13. Fees 29    
  Section 3. Conditions Precedent 29       Section 3.1. Loans 29       Section
4. The Guaranties 32       Section 4.1. [Reserved] 32 Section 4.2. [Reserved] 32
Section 4.3. Guaranties 32 Section 4.4.  Further Assurances 32       Section 5.
Representations and Warranties 32       Section 5.1. Organization and
Qualification 32 Section 5.2. Authority and Enforceability 33 Section 5.3.
Financial Reports 33 Section 5.4. No Material Adverse Change 34 Section 5.5.
Litigation and Other Controversies 34 Section 5.6. True and Complete Disclosure
34 Section 5.7. Use of Proceeds; Margin Stock 34 Section 5.8. Taxes 34 Section
5.9. ERISA 35

 

-i-

 

 

Section 5.10. Subsidiaries 35 Section 5.11. Compliance with Laws 35 Section
5.12. Environmental Matters 36 Section 5.13. Investment Company 36 Section 5.14.
Intellectual Property 36 Section 5.15. Good Title 36 Section 5.16. Labor
Relations 36 Section 5.17. Governmental Authority and Licensing 37 Section 5.18.
Approvals 37 Section 5.19. Affiliate Transactions 37 Section 5.20. Solvency 37
Section 5.21. No Broker Fees 37 Section 5.22. No Default 37 Section 5.23.
Compliance with Sanctions Programs 37 Section 5.24. Merger Agreement; Bonding
Facility 38 Section 5.25. Other Agreements and Documents 38 Section 5.26.
Options and Warrants, Etc. 38 Section 5.27. Senior Facility Debt 39   Section 6.
Covenants 39   Section 6.1. Information Covenants 39 Section 6.2. Inspections;
Field Examinations 42 Section 6.3. Maintenance of Property and Insurance;
Environmental Matters 43 Section 6.4. Compliance with Laws and Material
Agreements 44 Section 6.5. ERISA 44 Section 6.6. Payment of Taxes 44 Section
6.7. Preservation of Existence 44 Section 6.8. Contracts with Affiliates 44
Section 6.9. Restrictions or Changes and Amendments 45 Section 6.10. Change in
the Nature of Business 45 Section 6.11. Indebtedness 45 Section 6.12. Liens 46
Section 6.13. Consolidation, Merger, and Sale of Assets 48 Section 6.14.
Advances, Investments, and Loans 48 Section 6.15. Restricted Payments 49 Section
6.16. Limitation on Restrictions 50 Section 6.17. Limitation on Issuances of New
Ownership Interests by Subsidiaries 50 Section 6.18. Limitation on the Creation
of Subsidiaries 50 Section 6.19. [Reserved] 51 Section 6.20. Financial Covenants
51 Section 6.21. Compliance with Sanctions Programs 52 Section 6.22.
Subordinated Debt 53 Section 6.23. Anti-Layering 54

 

-ii-

 

 

Section 6.24. [Reserved] 54 Section 6.25. Limitations on Parent 54 Section 6.26.
Bonding Capacity 55 Section 6.27. Use of Proceeds; Margin Stock 55 Section 6.28.
Board Observer 55 Section 6.29 Prohibition on Assignment of Senior Facility Debt
55 Section 6.30. Post-Closing Matters 56       Section 7. Events of Default and
Remedies 56       Section 7.1. Events of Default 56 Section 7.2. Non-Bankruptcy
Defaults 59 Section 7.3. Bankruptcy Defaults 60 Section 7.4. [Reserved] 60
Section 7.5. Notice of Default 60       Section 8. Change in Circumstances and
Contingencies 60       Section 8.1. [Reserved] 60 Section 8.2. [Reserved] 60
Section 8.3. [Reserved] 60 Section 8.4. Increased Costs 60       Section 9. The
Agent 61       Section 9.1. Appointment and Authorization of Agent 61 Section
9.2. Agent and Its Affiliates 62 Section 9.3. Exculpatory Provisions 62 Section
9.4. Reliance by Agent 63 Section 9.5. Delegation of Duties 63 Section 9.6.
Non-Reliance on Agent and Other Lenders 64 Section 9.7. Resignation of Agent and
Successor Agent 64 Section 9.8. [Reserved] 65 Section 9.9. [Reserved] 65 Section
9.10. No Other Duties; Designation of Additional Agents 65 Section 9.11.
Authorization to Enter into, and Enforcement of the Guaranty 65 Section 9.12.
Agent May File Proofs of Claim 65 Section 9.13. Guaranty Matters 66      
Section 10.  Miscellaneous 66       Section 10.1. Taxes 66 Section 10.2.
Mitigation Obligations; Replacement of Lenders 70 Section 10.3. No Waiver,
Cumulative Remedies 71 Section 10.4. Non-Business Days 71 Section 10.5. Survival
of Representations 72 Section 10.6. Survival of Indemnities 72

 

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Section 10.7. Sharing of Payments by Lenders 72 Section 10.8. Notices;
Effectiveness; Electronic Communication 72 Section 10.9. Successors and Assigns;
Assignments and Participations 74 Section 10.10. Amendments 78 Section 10.11.
Headings 78 Section 10.12. Expenses; Indemnity; Damage Waiver 79 Section 10.13.
Set-off 80 Section 10.14. Governing Law; Jurisdiction; Etc. 81 Section 10.15.
Severability of Provisions 81 Section 10.16. Excess Interest 82 Section 10.17.
Construction 82 Section 10.18. Lenders’ Obligations Several 82 Section 10.19.
USA Patriot Act 82 Section 10.20. Waiver of Jury Trial 83 Section 10.21.
Treatment of Certain Information; Confidentiality 83 Section 10.22.
Counterparts; Integration; Effectiveness 84 Section 10.23. All Powers Coupled
with Interest 84 Section 10.24. Managerial Assistance 84   Section 11. The
Guarantees 85   Section 11.1. The Guarantees 85 Section 11.2. Guarantee
Unconditional 85 Section 11.3. Discharge Only upon Termination Date;
Reinstatement in Certain Circumstances 86 Section 11.4. Subrogation 86
Section 11.5. Subordination 86 Section 11.6. Waivers 87 Section 11.7. Limit on
Recovery 87 Section 11.8. Stay of Acceleration 87 Section 11.9. Benefit to
Guarantors 87 Section 11.10. [Reserved] 87 Section 11.11. Guarantor Covenants 87

 

Exhibit A — [Reserved] Exhibit B — [Reserved] Exhibit C — [Reserved] Exhibit D —
Note Exhibit E — Compliance Certificate Exhibit F — Assignment and Assumption
Exhibit G — Additional Guarantor Supplement Schedule 1 — Loans Schedule 1-A —
Capital Leases Schedule 1-B — June 2016 EBITDA Calculations Schedule 2.4(B) —
Conversion Calculation Schedule 5.5 — Litigation

 

-iv-

 

 

Schedule 5.9 — ERISA Schedule 5.10 — Subsidiaries Schedule 5.16 — Labor
Relations Schedule 5.25 — Material Agreements Schedule 6.30 — Post-Closing
Matters

 

-v-

 

 

Loan Agreement

 

This Loan Agreement is entered into 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”), and
the direct and indirect Subsidiaries of the Borrower from time to time party to
this Agreement, as Guarantors, the various institutions from time to time party
to this Agreement, as Lenders, and Alcentra Capital Corporation, a Maryland
corporation, as Agent.

 

The Borrower has requested, and the Lenders have agreed to extend, certain
credit facilities on the terms and conditions of this Agreement. In
consideration of the mutual agreements set forth in this Agreement, the parties
to this Agreement agree as follows:

 

Section 1.          Definitions; Interpretation.

 

Section 1.1.          Definitions. The following terms when used herein shall
have the following meanings:

 

“Acquired Business” means the entity or assets acquired by the Borrower or
another Loan Party in an Acquisition, whether before or after the date hereof.

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of 50% of the Ownership Interests
of any Person (other than a Person that is a Subsidiary), or otherwise causing
any Person to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary),
provided that the Borrower or another Loan Party is the surviving entity.

 

“Agent” means Alcentra, as contractual representative for itself and the other
Lenders and any successor in such capacity pursuant to Section 9.7.

 

“Administrative Questionnaire” means, with respect to each Lender, an
Administrative Questionnaire in a form supplied by the Agent and duly completed
by such Lender.

 

“Affiliate” means any Person directly or indirectly controlling (including all
stockholders, members, directors, partners, managers, and officers of such
Person) or controlled by, or under direct or indirect common control with,
another Person. A Person shall be deemed to control another Person for the
purposes of this definition if such Person possesses, directly or indirectly,
the power to direct, or cause the direction of, the management and policies of
the other Person, whether through the ownership of voting securities, common
directors, managers, trustees or officers, by contract or otherwise; provided
that, in any event for purposes of this definition, any Person that owns,
directly or indirectly, 10% or more of the securities having the ordinary voting
power for the election of directors, managers or governing body of a corporation
or 10% or more of the partnership or other ownership interest of any other
Person (other than as a limited partner of such other Person) will be deemed to
control such corporation or other Person.

 

 

 

 

“Agreement” means this Loan Agreement.

 

“AHYDO Payment Date” is defined in Section 2.4(d).

 

“Alcentra” means Alcentra Capital Corporation, a Maryland corporation.

 

“Amended and Restated Senior Subordinated Loan Agreement” means that certain
Amended and Restated Senior Subordinated Loan Agreement dated as of November 23,
2004, by and among Borrower, the other borrowers named therein, FdG HVAC LLC,
Marathon I, B.V., and the other financial institutions party thereto, as amended
by that certain Amendment to Amended and Restated Senior Subordinated Loan
Agreement dated as of August 24, 2007, and as further amended by that certain
Second Amendment to Amended and Restated Senior Subordinated Loan Agreement
dated March 30, 2010, and as further amended by that certain Third Amendment to
Amended and Restated Senior Subordinated Loan Agreement dated September 2, 2011.

 

“Approved Fund” means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business
and that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.9(b)(iii)), and accepted by the Agent, in substantially
the form of Exhibit F or any other form approved by the Agent.

 

“Authorized Representative” means those persons shown on the list of officers
provided by the Borrower pursuant to Section 3.1 or on any update of any such
list provided by the Borrower to the Agent, or any further or different officers
of the Borrower so named by any Authorized Representative of the Borrower in a
written notice to the Agent.

 

“Bonding Agreements” is defined in Section 5.24(b).

 

“Bonding Company” means Travelers Casualty and Surety Company of America, a
Connecticut corporation, or any other nationally recognized bonding company
reasonably satisfactory to the Agent.

 

“Borrower” is defined in the introductory paragraph of this Agreement.

 

“Business Day” means any day (other than a Saturday or Sunday) on which banks
are not authorized or required to close in New York, New York.

 

 -2- 

 

 

“Capital Expenditures” means, with respect to any Person for any period, the
aggregate amount of all expenditures (whether paid in cash or accrued as a
liability) by such Person during that period for the acquisition or leasing
(pursuant to a Capital Lease) of fixed or capital assets or additions to
property, plant, or equipment (including replacements, capitalized repairs, and
improvements) which should be capitalized on the balance sheet of such Person in
accordance with GAAP excluding (i) expenditures made in connection with the
replacement, substitution, restoration or repair of assets to the extent
financed with (x) insurance proceeds paid on account of the loss or damage to
the assets being replaced, restored or repaired or (y) awards of compensation
arising from the taking by eminent domain or condemnation of the assets being
replaced, (ii) that portion of the gross purchase price of equipment that is
purchased simultaneously with the trade-in of existing equipment that represents
the credit granted by the seller of such equipment for the equipment being
traded in at such time, or (iii) the purchase of assets that would otherwise
constitute Capital Expenditures to the extent financed with the proceeds of any
Disposition permitted hereunder. Notwithstanding anything herein to the
contrary, (x) vehicle leases entered into in the ordinary course of business
shall not constitute Capital Expenditures and (y) Permitted Acquisitions of all
or substantially all of the assets of a Person shall not constitute Capital
Expenditures.

 

“Capital Lease” means any lease of Property which in accordance with GAAP is
required to be capitalized on the balance sheet of the lessee; provided that, no
operating lease shall constitute a Capital Lease by virtue of a change in GAAP
occurring after the Closing Date. Each Capital Lease in effect on the Closing
Date is set forth on Schedule 1-A attached hereto.

 

“Capitalized Lease Obligation” means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.

 

“Cash Equivalents” means, as to any Person: (a) investments in direct
obligations of, or fully guaranteed by, the United States of America or of any
agency or instrumentality thereof whose obligations constitute full faith and
credit obligations of the United States of America, provided that any such
obligations shall mature within one year of the date of acquisition thereof;
(b) investments in commercial paper rated at least P-1 by Moody’s or at least
A-1 by S&P (or, if at any time neither Moody’s or S&P shall be rating such
obligations, an equivalent rating from another nationally recognized rating
service) maturing within one year of the date of issuance thereof;
(c) certificates of deposit or bankers’ acceptances maturing within one year
from the date of acquisition thereof and issued or accepted by any Lender or by
any commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia that (i) is at least “adequately
capitalized” (as defined in the regulations of its primary federal banking
regulator) and (ii) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; (d) investments in repurchase obligations with a term of
not more than seven (7) days for underlying securities of the types described in
clause (a) above entered into with any bank meeting the qualifications specified
in clause (c) above, provided all such agreements require physical delivery of
the securities securing such repurchase agreement, except those delivered
through the Federal Reserve Book Entry System; and (e) marketable short-term
money market or similar securities having a rating of at least P-2 by Moody’s or
A-2 by S&P (or, if at any time neither Moody’s or S&P shall be rating such
obligations, an equivalent rating from another nationally recognized rating
service).

 

 -3- 

 

 

“Cash Interest Rate” means thirteen percent (13.00%) per annum.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority, or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided, that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, regulations, guidelines or directives thereunder or issued
in connection therewith and (y) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

“Change of Control” means any of (a) the acquisition by any “person” or “group”
(as such terms are used in sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) (other than Permitted Holders) at any time of
beneficial ownership of fifty percent (50%) or more of the outstanding Ownership
Interests of Limbach, Inc. on a fully-diluted basis; (b) Limbach, Inc. shall
fail to own one hundred percent (100%) of the Ownership Interests of the Parent,
(c) the Parent shall fail to own one hundred percent (100%) of the Ownership
Interests of the Borrower or any of its other Subsidiaries, (d) the Borrower
shall fail to own, directly or indirectly, one hundred percent (100%) of the
Ownership Interests of any of its Subsidiaries that are Guarantors or that are
required to be Guarantors under this Agreement, (e) during any period of twelve
(12) consecutive months, a majority of the members of the board of directors or
other equivalent governing body of the Borrower cease to be composed of
individuals (i) who were members of that board or equivalent governing body on
the first day of such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent
governing body; or (f) any “Change of Control” (or words of like import), as
defined in any agreement or indenture relating to any issue of Material
Indebtedness (including the Senior Facility Debt) of any Loan Party shall occur.

 

“Closing Date” means the date of this Agreement or such later Business Day upon
which each condition described in Section 3.1 shall be satisfied or waived in a
manner acceptable to the Agent in its discretion.

 

“Code” means the Internal Revenue Code of 1986, or any successor statute
thereto.

 

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

 

 -4- 

 

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

 

“Contingent Obligation” means as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness (“primary obligations”)
of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any Property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business or
entered into in the ordinary course of business in connection with any
contractual arrangement, including any Acquisition, Capital Expenditure,
Investment or disposition of assets permitted under this Agreement (other than
such obligations with respect to Indebtedness). The amount of any Contingent
Obligation shall be deemed to be the amount required to be reflected on the
financial statements of a Person determined in accordance with GAAP.

 

“Controlled Group” means all members of a controlled group of corporations,
limited liability companies, partnerships and all trades or businesses (whether
or not incorporated) under common control which, together with any Loan Party,
are treated as a single employer under Section 414(b) or (c) of the Code and,
for purposes of Section 302 of ERISA and Section 412 of the Code, under Section
414(b), (c), (m), and (o) of the Code.

 

“Conversion Date” means the date upon which any Conversion Event occurs.

 

“Conversion Event” is defined in Section 2.4(b).

 

“Conversion Price” means, with respect to the Deferred Interest capitalized
pursuant to Section 2.4(b) on any Interest Payment Date, ten dollars ($10.00)
per share, subject to appropriate adjustment in the event of any subdivision (by
stock split, stock dividend or otherwise) or any combination (by reverse stock
split or otherwise).

 

“Conversion Shares” is defined in Section 2.4(b).

 

“Damages” means all damages, including punitive damages (if payable to a third
party), liabilities, costs, expenses, losses, judgments, fines, penalties,
demands, claims, cost recovery actions, lawsuits, administrative proceedings,
orders, response action, removal and remedial costs, compliance costs,
investigation expenses, consultant fees, attorneys’ and paralegals’ fees and
litigation expenses.

 

 -5- 

 

 

“Debtor Relief Laws” means the United States Bankruptcy Code and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States of America or other
applicable jurisdictions from time to time in effect.

 

“Default” means any event or condition the occurrence of which would, with the
passage of time or the giving of notice, or both, constitute an Event of
Default.

 

“Deferred Interest” is defined in Section 2.4(a).

 

“Deferred Interest Principal” is defined in Section 2.4(b).

 

“Deferred Interest Rate” means three percent (3.00%) per annum.

 

“Disposition” means the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
Sections 6.13(a) or6.13(g).

 

“Dollars” and “$” each means the lawful currency of the United States of
America.

 

“Duly Authorized Officer” means the President, Chief Executive Officer, the
Chief Financial Officer, any Vice-President, the Treasurer (if at any time
applicable), and the Secretary of each Loan Party, as applicable.

 

“EBITDA” means, with reference to any period, Net Income for such period plus,
without duplication,the sum of all amounts deducted in arriving at such Net
Income amount in respect of (a) Interest Expense for such period, (b) federal,
state, and local income taxes for such period, (c) depreciation of fixed assets
and amortization of intangible assets for such period, (d) transaction expenses
incurred during such period in connection with Permitted Acquisitions, whether
or not consummated, not to exceed $50,000 in the aggregate during such period,
(e) all fees and expenses paid in cash by the Borrower and its Subsidiaries
during such period and paid on or before that date occurring six months after
the Closing Date in connection with this Agreement and the Related Transactions
in an aggregate amount not to exceed $2,500,000 and (f) losses or other charges
related to Legacy Claims during such period in an 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; provided that, for each fiscal quarter ending on the
dates set forth below, “EBITDA” shall be equal to the corresponding amount set
forth below for each such respective quarter and EBITDA for the fiscal quarter
ending June 30, 2016 shall mean the actual EBITDA for the period then ending
calculated in accordance with the foregoing definition plus the amounts set
forth on Schedule 1-B:

 

September 30, 2015  $3,346,000         December 31, 2015  $5,068,000        
March 31, 2016  $3,311,000 

 

 -6- 

 

 

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.9(b)(iii), 10.9(b)(v) and 10.9(b)(vi) (subject to such
consents, if any, as may be required under Section 10.9(b)(iii)).

 

“Environmental Claim” means any investigation, notice of violation, demand,
allegation, action, suit, injunction, judgment, order, consent decree, penalty,
fine, lien, proceeding or claim (whether administrative, judicial or private in
nature) arising pursuant to or in connection with: (a) an actual or alleged
violation of any Environmental Law, (b) any Hazardous Material, (c) any actual
or threatened abatement, removal, investigation, remediation or corrective or
response action required by Environmental Laws or any Governmental Authority, or
(d) any actual or alleged damage, injury, threat or harm to human health, safety
natural resources or the environment.

 

“Environmental Law” means any applicable Legal Requirement pertaining to (a) the
protection, conservation, use or management of the environment, human health and
safety, natural resources and wildlife, (b) the protection or use of surface
water or groundwater, (c) the management, manufacture, possession, presence,
use, generation, transportation, treatment, storage, disposal, Release,
threatened Release, investigation, abatement, removal, remediation or handling
of, or exposure to, any Hazardous Material, or (d) any Release of Hazardous
Materials to air, land, surface water or groundwater, and any amendment, rule,
regulation, order or directive issued thereunder.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

“ERISA Event” means (a) a reportable event as described in Section 4043(c) of
ERISA (unless the 30-day notice requirement has been waived under applicable
regulations) with respect to a Plan; (b) the withdrawal of the Loan Party or any
member of its Controlled Group from a Plan subject to Section 4063 of ERISA
during a plan year in which such entity was a “substantial employer” as defined
in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Loan Party or any member of its Controlled Group from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of reorganization, insolvency or
termination (or the treatment of a plan amendment as a termination) under
Section 4041 or 4041A of ERISA; (e) the termination of a Plan or the filing of a
notice to terminate a Plan under Section 4041(c) of ERISA; (f) the institution
by the PBGC of proceedings to terminate a Plan; (g) any event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (h) the determination that any
Plan is considered an at-risk plan within the meaning of Section 430 of the Code
or Section 303 of ERISA; (i) the determination that any Multiemployer Plan is in
critical or at-risk status within the meaning of Section 432 of the Code or
Section 305 of ERISA; (j) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Loan Party or any member of its Controlled Group; or (k) a
failure by the Loan Party or any member of its Controlled Group to meet all
applicable requirements regarding minimum required contributions set forth in
Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and
305 of ERISA in respect of a Plan, whether or not waived, or the failure by the
Loan Party or any member of its Controlled Group to make any required
contribution to a Multiemployer Plan.

 

 -7- 

 

 

“Event of Default” means any event or condition identified as such in
Section 7.1.

 

“Event of Loss” means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property or (b) any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such Property, or confiscation of such Property or the requisition of the use of
such Property.

 

“Excess Interest” is defined in Section 10.16.

 

“Excluded Equity Issuances” means the issuance by any Subsidiary of equity
securities to the Borrower or any Guarantor, as applicable.

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan (or otherwise pursuant
to any Loan Document) pursuant to a law in effect on the date on which (i) such
Lender acquires such interest in the Loan or becomes a party to this Agreement
(other than pursuant to an assignment request by the Borrower under Section
10.2(b)) or (ii) such Lender changes its lending office, except in each case to
the extent that, pursuant to Section 10.1, amounts with respect to such Taxes
were payable either to such Lender’s assignor immediately before such Lender
became a party hereto or to such Lender immediately before it changed its
lending office, (c) Taxes attributable to such Lender’s failure to comply with
Section 10.1(g), and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version of such sections that are
substantively comparable and not materially more onerous to comply with) and any
current or future regulations or official interpretations thereof (including any
Revenue Ruling, Revenue Procedure Notice or similar guidance issued by the U.S.
Internal Revenue Service as a precondition to relief or exemption from taxes
under such provisions), and any agreements entered into pursuant to
Section 1471(b)(1) of the Code and any intergovernmental agreement entered into
in connection with the implementation of such Sections.

 

“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 Borrower
and its Subsidiaries then most recently ended less Capital Expenditures made by
the Borrower 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.

 

 -8- 

 

 

“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) of the Senior Credit Agreement) (“Principal Payments”) of
the Borrower and its Subsidiaries, plus (b) the cash portion of any Interest
Expense for such period, plus (c) Restricted Payments made by the Borrower and
its Subsidiaries during such period (including, for the avoidance of doubt, Tax
Distributions made during such period), plus (d) without duplication federal,
state, and local income taxes paid in cash by the Borrower and its Subsidiaries
during such period. For purposes of calculating Fixed Charges for any period
prior to the quarter ending September 30, 2017, (x) scheduled payments of
principal shall be deemed for all periods included in such calculation to be an
aggregate of $3,000,000 and (y) the cash portion of any Interest Expense for
such period shall mean (A) for the fiscal quarter ending September 30, 2016, the
actual cash Interest Expense for such quarter multiplied by 4, (B) for the
fiscal quarter ending December 31, 2016, the actual cash Interest Expense for
the fiscal quarters ending September 30, 2016 and December 31, 2016 multiplied
by 2, and (C) for the fiscal quarter ending March 31, 2017, the actual cash
Interest Expense for the fiscal quarters ending September 30, 2016, December 31,
2016 and March 31, 2017 multiplied by 4/3.

 

“Florida Property” means that certain parcel of real property located at 5401
Benchmark Lane, Sanford, Florida 32773.

 

“Foreign Lender” means a Lender that is not a U.S. Person.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

 -9- 

 

  

“Guaranteed Obligations” means the Obligations, whether now existing or
hereafter arising, due or to become due, direct or indirect, absolute or
contingent, and howsoever evidenced, held or acquired (including all interest,
costs, fees, and charges after the entry of an order for relief against any Loan
Party in a case under the United States Bankruptcy Code or any similar
proceeding, whether or not such interest, costs, fees and charges would be an
allowed claim against such Loan Party in any such proceeding).

 

“Guarantors” means and includes the Parent, each direct and indirect Subsidiary
of the Borrower, and the Borrower, in its capacity as a guarantor of the
Obligations of another Loan Party.

 

“Guaranty Agreements” means and includes the Guarantee of the Loan Parties
provided for in Section 11, and any other guaranty agreement executed and
delivered in order to guarantee the Obligations or any part thereof in form and
substance acceptable to the Agent.

 

“Hazardous Material” means any hazardous, toxic or harmful chemical, substance,
waste, compound, material, product or byproduct subject to or regulated under
Environmental Laws, including but not limited to radon, asbestos,
polychlorinated biphenyls, petroleum (including crude oil or any fraction
thereof) and lead.

 

“Hedge Agreement” means any (a) agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
any Loan Party or its Subsidiaries shall be a Hedge Agreement or (b) any form of
master agreement published by the International Swaps and Derivatives
Association, Inc., any International Foreign Exchange Master Agreement, or any
other similar master agreement.

 

“Hostile Acquisition” means the acquisition of the Ownership Interests of a
Person through a tender offer or similar solicitation of the owners of such
Ownership Interests which has not been approved (prior to such acquisition) by
resolutions of the board of directors of such Person or by similar action if
such Person is not a corporation, and, if such acquisition has been so approved,
as to which such approval has not been withdrawn.

 

 -10- 

 

 

“Indebtedness” means for any Person (without duplication) (a) all indebtedness
of such Person for borrowed money, whether current or funded, or secured or
unsecured, (b) all indebtedness of such Person for the deferred purchase price
of Property or services, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of a default are limited to
repossession or sale of such Property), (d) all indebtedness of such Person
secured by a purchase money mortgage or other Lien to secure all or part of the
purchase price of Property subject to such mortgage or Lien, whether or not such
Person has assumed or become liable for the payment of such indebtedness,
(e) all indebtedness secured by any Lien upon property of such Person, (f) all
Capitalized Lease Obligations of such Person, (g) any existing reimbursement,
payment or similar obligations of such Person in respect of bankers’
acceptances, letters of credit and other extensions of credit whether or not
representing obligations for borrowed money, (h) all obligations of such Person
to purchase, redeem, retire, defease or otherwise make any payment in respect of
any Ownership Interest in such Person or any other Person or any warrant, right
or option to acquire such Ownership Interest, valued, in the case of a
redeemable preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (i) all obligations of
such Person under any Hedge Agreement (in each case valued as the termination
value thereof computed in accordance with a method approved by the International
Swap Dealers Association and agreed to by such Person in the applicable
agreement, if any), (j) any indebtedness, whether or not assumed, secured by
Liens on Property acquired by such Person at the time of acquisition thereof,
(k) all obligations under any so-called “synthetic lease” transaction entered
into by such Person, (l) all obligations under any so-called “asset
securitization” transaction entered into by such Person, and (m) all Contingent
Obligations of such Person in respect of indebtedness referred to in clauses (a)
through (l) above, it being understood that the term “Indebtedness” shall not
include (i) payables, purchase orders, and accrued expenses arising in the
ordinary course of business or (ii)  obligations of such Person in respect of
(x) payment of bonuses or other deferred compensation to employees of such
Person or any of its Subsidiaries, (y) any purchase price adjustment, earnout or
deferred payment obligation of a similar nature incurred in connection with an
Acquisition, and (z) deposits from customers. For the avoidance of doubt, any
premiums payable under the Bonding Agreements shall not be Indebtedness unless
not paid when due.

 

“Indemnified Taxes” means (a) all Taxes, other than Excluded Taxes, imposed on
or with respect to any payment made by or on account of any obligation of any
Loan Party under any Loan Document and (b) to the extent not otherwise described
in (a), Other Taxes.

 

“Indemnitee” is defined in Section 10.12(b).

 

“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 Borrower and its Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP.

 

“Interest Payment Date” is defined in Section 2.4(a).

 

 -11- 

 

 

“Inventory” means “inventory” as defined in the UCC, including, without
limitation, any and all inventory and goods of each Loan Party, wheresoever
located, whether now owned or hereafter acquired by such Loan Party, which are
held for sale or lease, furnished under any contract of service or held as raw
materials, work-in-process or supplies, and all materials used or consumed in
such Loan Party’s business, and shall include such property the sale or other
disposition of which has given rise to Accounts and which has been returned to
or repossessed or stopped in transit by such Loan Party.

 

“Investment” means any investment in any Person, whether by means of a loan or
advance, guarantee of obligations, purchase of equity or obligations,
acquisition of all or any substantial part of the assets or business of any
Person or any division thereof, entry into joint ventures or partnerships,
purchase or ownership of a futures contract or otherwise becoming liable for the
purchase or sale of currency or other commodities at a future date in the nature
of a futures contract.

 

“IRS” means the United States Internal Revenue Service.

 

“Legacy Claims” means charges and/or losses pertaining to the pending litigation
arising out of the contracts or construction projects commonly known as SCI
Fayette and Wilshire Vermont as described on Schedule 5.5 to this Agreement.

 

“Legal Requirement” means any treaty, convention, statute, law, common law,
regulation, ordinance, license, permit, governmental approval, injunction,
judgment, order, consent decree, restriction or other requirement of any
Governmental Authority.

 

“Lenders” means and includes the banks, financial institutions and other lenders
from time to time party to this Agreement, as a “Lender” hereunder, including
each assignee Lender pursuant to Section 10.9.

 

“Lien” means any lien, mortgage, deed of trust, pledge, assignment as collateral
security, security interest, charge, or encumbrance in the nature of security in
respect of any Property, including the interests of a vendor or lessor under any
conditional sale, Capital Lease or other title retention arrangement, and any
option, trust, authorized UCC financing statement or other preferential
arrangement having the practical effect of any of the foregoing.

 

“Limbach, Inc.” means Limbach Holdings, Inc., a Delaware corporation, which
entity was named 1347 Capital Corp. prior to the consummation of the Required
Merger and the Related Transactions.

 

“Limbach Stock” means the common stock of Limbach, Inc.

 

”Liquidation Shares” means the number of shares of Limbach Stock equal to (i)
the portion of the Deferred Interest Principal being converted divided by (ii)
the five day weighted trading average of a share of Limbach Stock for the five
Business Days preceding the Conversion Date.

 

“Loan” is defined in Section 2.1.

 

 -12- 

 

 

“Loan Documents” means this Agreement, the Notes (if any), the Guaranty
Agreements, the Senior Subordination Agreement, the Surety Subordination
Agreement, the Subordination Agreements and each other agreement, instrument or
document to be delivered hereunder or thereunder or otherwise in connection
therewith.

 

“Loan Party” means the Borrower and each of the Guarantors.

 

“Margin Stock” shall have the meaning given to such term in Regulation U of the
Board of Governors of the Federal Reserve System.

 

“Material Adverse Effect” means (a) a material adverse change in, or material
adverse effect upon, the business, condition (financial or otherwise),
operations, performance or Properties of the Borrower or of the Loan Parties
taken as a whole, (b) a material impairment of the ability of any Loan Party to
perform its material obligations under any Loan Document or (c) a material
adverse effect upon  the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document or the rights and remedies of the
Agent and the Lenders thereunder.

 

“Material Agreement” means:

 

(a)          any agreement (or group of related agreements) for the lease of
personal property to or from any Person providing for lease payments in excess
of $1,100,000 per annum;

 

(b)          any agreement (or group of related agreements) for the purchase or
sale of raw materials, commodities, supplies, products, or other personal
property, or for the furnishing or receipt of services, other than in the
ordinary course of business, the term of which extends over a period of more
than one year from the date hereof or which involves consideration in excess of
$825,000;

 

(c)          any agreement concerning a partnership or joint venture;

 

(d)          any agreement (or group of related agreements) under which Borrower
or any of its Subsidiaries has created, incurred, assumed, or guaranteed any
Indebtedness, or any Capitalized Lease Obligation, in excess of $825,000 or
under which a Person has imposed a lien on any of the Borrower’s or its
Subsidiaries’ Property;

 

(e)          [reserved];

 

(f)          any agreement for the employment of any individual on a full-time,
part-time, consulting, or other basis providing annual compensation in excess of
$550,000 or providing material severance benefits;

 

(g)          any agreement under which the consequences of a default or
termination would have a Material Adverse Effect;

 

 -13- 

 

 

(h)          any agreement under which Borrower or any Subsidiary of the
Borrower has loaned any Person, other than an officer, manager or director of
the Borrower or any Subsidiary of the Borrower, amounts in the aggregate
exceeding $825,000; or

 

(i)          other agreement (or group of related agreements) entered into other
than in the ordinary course of business, the performance of which involves
consideration in excess of $825,000.

 

“Maximum Rate” is defined in Section 10.16.

 

“Merger Agreement” means that certain Agreement and Plan of Merger, dated as of
March 23, 2016, by and between the Parent and Limbach, Inc.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means any employee benefit plan described in Section
4001(a)(3) of ERISA, to which a Loan Party or any member of the Controlled Group
makes or is obligated to make contributions, or during the preceding five plan
years, has made or has been obligated to make contributions or to which a Loan
Party or member of the Controlled Group may have liability.

 

“Net Cash Proceeds” means, as applicable, (a) with respect to any Disposition by
a Person, cash and cash equivalent proceeds received by or for such Person’s
account, net of (i) reasonable direct costs relating to such Disposition,
(ii) sale, use or other transactional taxes paid or payable (or, without
duplication Tax Distributions) by such Person as a direct result of such
Disposition, (iii) the amount of any reserves established to fund contingent
liabilities reasonably estimated to be payable (the “Reserve Cash Proceeds”) in
each case during the year that such Disposition occurred or in the next
succeeding year (the “Reserve Period”) and that are directly attributable to
such Disposition (as determined reasonably and in good faith by a Duly
Authorized Officer); provided that (A) the Borrower has provided the Agent
written notice of such Reserve Cash Proceeds prior to or contemporaneously upon
receiving such cash proceeds and (B) any and all Reserve Cash Proceeds that have
not been used to pay such liabilities shall be paid ratably to the Lenders on
the last day of the applicable Reserve Period, and (iv) the amount of any
Indebtedness secured by a Lien on the asset and discharged from the proceeds of
such Disposition, (b) with respect to any Event of Loss of a Person, cash and
cash equivalent proceeds received by or for such Person’s account (whether as a
result of payments made under any applicable insurance policy therefor or in
connection with condemnation proceedings or otherwise), net of (i) reasonable
direct costs incurred in connection with the collection of such proceeds, awards
or other payments and (ii) all money actually applied to repair or reconstruct
the damaged Property or Property affected by the condemnation or taking, and
(c) with respect to any offering of Ownership Interests of a Person or the
issuance of any Indebtedness by a Person, cash and cash equivalent proceeds
received by or for such Person’s account, net of reasonable legal, underwriting,
and other fees and expenses incurred as a direct result thereof.

 

 -14- 

 

 

“Net Income” means, with reference to the applicable period, the net income (or
net loss) of the Borrower and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income:(a) extraordinary gains and losses reasonably
acceptable to the Agent in its Permitted Discretion, (b) non-cash gains and
losses realized on any Disposition, (c) the cumulative effect of a change in
accounting principles and (d) non-cash write ups and write downs resulting from
purchase accounting adjustments other than goodwill, inventory and accounts
receivable in connection with a Permitted Acquisition; provided further that,
there shall also be excluded from Net Income (x) the net income (or net loss) of
any Person accrued prior to the date it becomes a Subsidiary of, or has merged
into or consolidated with, the Borrower or another Subsidiary, except to the
extent that the Borrower has delivered the financial statements of the Acquired
Business for such period, which financial statements shall have been reviewed or
audited by an independent accounting firm reasonably satisfactory to the Agent,
and the Agent agrees to the inclusion of such net income (or net loss) of such
Person, (y) the net income (or net loss) of any Person (other than a Subsidiary)
in which the Borrower or any of its Subsidiaries has an Ownership Interest in,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or any of its Subsidiaries during such period, and (z) the
undistributed earnings of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation (other than under any
Loan Document) or Legal Requirement applicable to such Subsidiary.

 

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (a) requires the approval of all affected Lenders or
all Lenders, in each instance in accordance with the terms of Section 10.10, and
(b) has been approved by the Required Lenders.

 

“Note” is defined in Section 2.12(d).

 

“Obligations” means all obligations of the Borrower to pay principal and
interest on the Loans (including all after the commencement of an insolvency
proceeding regardless of whether allowed or allowable in whole or in part as a
claim in such insolvency proceeding), all fees and charges payable hereunder,
and all other payment obligations of any Loan Party arising under or in relation
to any Loan Document, in each case whether now existing or hereafter arising,
due or to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired, and including all interest costs, fees, and charges
after commencement of an insolvency proceeding regardless of whether allowed or
allowable in whole or in part as a claim in such insolvency proceeding.

 

“OFAC” means the United States Department of Treasury Office of Foreign Assets
Control.

 

“Original Principal” means the outstanding principal amount of the Loans that is
not Deferred Interest Principal.

 

 -15- 

 

 

“Organization Documents” means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, or code of regulations, or other similar
document and any certificate of designations or instrument relating to the
rights of shareholders of such corporation, (b) for any partnership, the
partnership agreement or other similar agreement and, if applicable, certificate
of limited partnership, (c) for any limited liability company, the operating
agreement, limited liability company agreement, or other similar agreement, and
articles or certificate of formation of such limited liability company, and (d)
with respect to any joint venture, trust or other form of business entity, the
joint venture or other applicable agreement of formation or organization and any
agreement, instrument, filing or notice with respect thereto filed in connection
with its formation or organization with the applicable Governmental Authority in
the jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a Lien under,
engaged in any other transaction pursuant to or enforced any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 10.2(b)).

 

“Ownership Interest” means all shares, interests, participations, rights to
purchase, rights to transfer, rights to control, options, warrants, general or
limited partnership interests, limited liability company interests or other
equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity, whether voting or nonvoting,
including common stock, preferred stock or any other “equity security” (as such
term is defined in Rule 3a11-1 of the Rules and Regulations promulgated by the
Securities and Exchange Commission (17 C.F.R. § 240.3a11-1) under the Securities
and Exchange Act of 1934).

 

“Parent” is defined in the introductory paragraph of this Agreement.

 

“Participant” is defined in Section 10.9(d).

 

“Participant Register” is defined in Section 10.9(d).

 

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. 107-56.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any Person succeeding
to any or all of its functions under ERISA.

 

“Percentage” means, for each Lender, the percentage held by such Lender of the
aggregate principal amount of all Loans then outstanding.

 

 -16- 

 

 

“Perfection Certificate” means that certain Perfection Certificate dated as of
the Closing Date from the Borrower to the Agent.

 

“Permitted Acquisition” means any Acquisition with respect to which all of the
following conditions shall have been satisfied:

 

(a)          the Acquired Business is in the same line of business engaged in as
of the date of this Agreement by the Borrower and any of its Subsidiaries or a
Related Line of Business and has its primary operations in the United States of
America;

 

(b)          the Acquisition shall not be a Hostile Acquisition;

 

(c)          the Total Consideration for the Acquired Business, when taken
together with the Total Consideration for all Acquired Businesses acquired
during the immediately preceding 12-month period, shall not exceed $2,500,000 in
the aggregate during such period, or $10,000,000 in the aggregate during the
term of this Agreement or such greater amount as approved by the Required
Lenders;

 

(d)          the Borrower shall have notified the Agent and Lenders not less
than fifteen (15) days (or such shorter time period as may be agreed to by the
Agent and the Required Lenders) prior to any such Permitted Acquisition;

 

(e)          if a new Subsidiary is formed or acquired as a result of or in
connection with the Acquisition, the Borrower shall have complied with the
requirements of Section 4 in connection therewith;

 

(f)          the financial statements of the Acquired Business shall have been
audited by a nationally recognized independent accounting firm or have undergone
a review by an accounting firm reasonably acceptable to the Agent or a quality
of earnings report shall have been furnished to the Agent from a firm reasonably
acceptable to the Agent; and

 

(g)          (i) the Borrower shall have (x) Unused Revolving Credit Commitments
(as defined in the Senior Credit Agreement) plus unrestricted cash and Cash
Equivalents and (y) Borrowing Base Availability (as defined in the Senior Credit
Agreement) plus unrestricted cash and Cash Equivalents, in each case, of at
least $10,000,000 and (ii) no Default or Event of Default shall exist, including
with respect to the covenants contained in Section 6.20 on a pro forma basis,
provided that the Total Leverage Ratio on a pro forma basis shall be no greater
than 0.25 less than the most recently applicable Total Leverage Ratio level, and
the Borrower shall have delivered to the Agent a compliance certificate in the
form of Exhibit E attached hereto evidencing such compliance with Section 6.20.

 

For the avoidance of doubt, the Loan Parties may enter into joint ventures
(including Special Purpose Joint Ventures) in accordance with the terms of this
Agreement, and no joint venture shall be deemed to be a Permitted Acquisition
hereunder.

 

 -17- 

 

 

“Permitted Discretion” means a reasonable determination made by the Agent in
good faith and in the exercise of reasonable business judgment from the
perspective of an unsecured lender.

 

“Permitted Holders” means FdG HVAC LLC, Limbach Management Holding Company, LLC,
Marathon Special Opportunity Master Fund, Ltd. and Charles A. Bacon III.

 

“Permitted Lien” is defined in Section 6.12.

 

“Person” means any natural person, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a Governmental Authority.

 

“Plan” means any employee pension benefit plan covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code, but
excluding any Multiemployer Plan, that is maintained or contributed to, or
during the preceding five plan years, has been maintained or contributed to by a
Loan Party or by a member of the Controlled Group or to which a Loan Party or
member of the Controlled Group may have liability.

 

“Prepayment Premium” means (i) if such prepayment occurs prior to the first
anniversary of the Closing Date, three percent (3%) of the principal amount of
the Loans being prepaid plus all interest that would be due on the Loans if the
same had remained outstanding until the first anniversary of the Closing Date
and (ii) if such prepayment occurs on or after the first anniversary of the
Closing Date and on or prior to the second anniversary of the Closing Date,
three percent (3%) of the principal amount of the Loans being prepaid.

 

“Property” means, as to any Person, all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent balance sheet of such Person and its Subsidiaries under GAAP.

 

“Recipient” means (a) the Agent and (b) any Lender.

 

“Register” is defined in Section 10.9(c).

 

“Related Agreements” means the Bonding Agreements and the Merger Agreement.

 

“Related Line of Business” means engineering, design, construction and
service/maintenance of general trades, mechanical, electrical, plumbing and/or
fire protection business in the United States.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

 

“Related Transactions” means the transactions contemplated by the Related
Agreements.

 

 -18- 

 

 

“Release” means any placing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migrating into the environment, including the exacerbation of existing
environmental conditions and the abandonment or discarding of barrels, drums,
containers, tanks or other receptacles containing or previously containing any
Hazardous Material.

 

“Required Bonding Facility” means a bonding facility of adequate size to support
the work program of the Borrower and its Subsidiaries and which is otherwise
reasonably satisfactory to the Agent.

 

“Required Lenders” means, as of the date of determination thereof, Lenders whose
outstanding Loans constitute more than 66 2/3% of the sum of the total
outstanding Loans.

 

“Required Merger” means the acquisition and merger transaction contemplated by
the Merger Agreement.

 

“Resignation Effective Date” is defined in Section 9.7(a).

 

“Restricted Payments” means (i) any dividends on or any other distributions in
respect of any class or series of Ownership Interests and (ii) any purchase,
redemption or other acquisition or retirement of Ownership Interests.

 

“Retainage” means any all compensation withheld from the Borrower by customers
pursuant to the common construction contracting practice commonly called or
referred to as “retainage”.

 

“S&P” means Standard & Poor’s Ratings Services Group, a Standard & Poor’s
Financial Services LLC business.

 

“Sanctioned Country” means a country or territory that is the subject of a
Sanctions Program.

 

“Sanctioned Person” means (a) a Person named on a Sanctions List, each Person
owned or controlled by a Person named on a Sanctions List, and each other Person
that is subject to a Sanctions Program, (b) an agency or government of a
Sanctioned Country, (c) an organization controlled directly or indirectly by a
Sanctioned Country, or (d) a Person resident in a Sanctioned Country, to the
extent subject to a Sanctions Program.

 

“Sanctions Event” means the event specified in Section 6.21(c).

 

“Sanctions Lists” means, and includes, (a) the list of the Specially Designated
Nationals and Blocked Persons maintained by OFAC, (b) the list of Sectoral
Sanctions Identifications maintained by the U.S. Department of Treasury, (c) the
list of Foreign Sanctions Evaders maintained by the U.S. Department of Treasury,
and (d) any similar list maintained by the U.S. State Department, the U.S.
Department of Commerce, the U.S. Department of Treasury, or any other U.S.
Governmental Authority, or maintained by a Canadian Governmental Authority, the
United Nations Security Counsel, or the European Union.

 

 -19- 

 

 

“Sanctions Programs” means (a) all economic, trade, and financial sanctions
programs administered by OFAC (including all laws, regulations, and Executive
Orders administered by OFAC), the U.S. State Department, and any other U.S.
Governmental Authority, including the Bank Secrecy Act, anti-money laundering
laws (including the Patriot Act), and any and all similar United States federal
laws, regulations or Executive Orders, and any similar laws, regulations or
orders adopted by any State within the United States, and (b) to the extent
applicable, all similar economic, trade, and financial sanctions programs
administered, enacted, or enforced by the European Union or the United Kingdom.

 

“Senior Agent” means Fifth Third Bank, an Ohio banking corporation, as agent for
the Senior Lenders.

 

“Senior Credit Agreement” means that certain Credit Agreement dated as of the
date hereof, among the Loan Parties, the Senior Agent, and the Senior Lenders,
as amended, modified, supplemented, restated or amended and restated from time
to time in accordance with the terms of the Senior Subordination Agreement.

 

“Senior Facility Debt” has the meaning given to such term in the Senior
Subordination Agreement.

 

“Senior Facility Loan Documents” has the meaning given to such term in the
Senior Subordination Agreement.

 

“Senior Lenders” means the various financial institutions from time to time
party to the Senior Credit Agreement as lenders.

 

“Senior Subordination Agreement” means that certain Subordination and
Intercreditor Agreement dated as of the date hereof among the Agent, the Senior
Agent, and the Loan Parties.

 

“Solvent” or “Solvency” means, when used with respect to any Person, that, as at
any date of determination, (a) the amount of the “present fair saleable value”
of the assets of such Person will, as of such date, exceed the amount of all
“liabilities of such Person, contingent or otherwise” as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) such Person will not
have, as of such date, an unreasonably small amount of capital with which to
conduct its business, and (c) such Person will be able to pay its debts as they
mature. The amount of contingent liabilities at any time shall be computed as
the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

 

“Special Purpose Joint Venture” means a joint venture entered into by one of the
Loan Parties with another Person solely with respect to a particular contract,
project or job and in which a subcontract is awarded to one of the Loan Parties
from such joint venture entity.

 

 -20- 

 

 

“Stated Interest Rate” means sixteen percent (16.00%) per annum.

 

“Subordinated Debt” means any Indebtedness of the Parent and its Subsidiaries
owing to a Person by that is subordinated in right of payment to the prior
payment of the Obligations pursuant to subordination provisions approved in
writing by the Agent in its reasonable discretion, which Indebtedness shall have
interest rates, payment terms, maturities, amortization schedules, covenants,
defaults, remedies and other material terms that are acceptable in form and
substance to the Agent and which subordination provisions shall contain
restrictions on enforcement, restrictions on payment, subordination terms, and
other material terms that are acceptable in form and substance to the Agent.

 

“Subordination Agreements” means, collectively, any subordination agreements
entered into with respect to Subordinated Debt.

 

“Subsidiary” means, as to any particular parent corporation or organization, any
other corporation or organization more than 50% of the outstanding Voting
Interests of which is at the time directly or indirectly owned by such parent
corporation or organization or by any one or more other entities which are
themselves subsidiaries of such parent corporation or organization. Unless
otherwise expressly noted herein, the term “Subsidiary” means a Subsidiary of
the Borrower or of any of its direct or indirect Subsidiaries; provided,
however, that no entity formed for the sole purpose of being a Special Purpose
Joint Venture shall be deemed a Subsidiary of the Borrower.

 

Surety Subordination Agreement” means that certain Intercreditor Agreement dated
as of the date hereof by and between the Bonding Company and the Agent.

 

“Tangible Net Worth” shall mean, with respect to the Borrower and its
Subsidiaries, the total of the capital stock (less treasury stock), paid-in
capital surplus, and retained earnings (deficit) of the Borrower and any of its
Subsidiaries as determined on a consolidated basis in accordance with GAAP after
eliminating all inter-company items and all amounts properly attributable to
minority interests, if any, in the stock and surplus of any such Subsidiary,
minus the following items (without duplication of deductions), if any, appearing
on the consolidated balance sheet of the Borrower or any of its Subsidiaries:
(a) all deferred charges (less amortization, unamortized debt discount and
expenses and corporate organization expenses), (b) the 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, (c) the 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) and (d) 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.

 

 -21- 

 

 

“Tax Distributions” means distributions made by a Loan Party to Limbach, Inc.
for the payment of taxes by Limbach, Inc. in quarterly installments, based on
Limbach, Inc.’s good-faith and reasonable estimate of income to be generated by
Limbach, Inc.’s and its Subsidiaries business in such year to allow Limbach,
Inc. to meet its tax obligations on such income taking into account the
carryforward of net operating losses for any previous tax year that begins on or
after the Closing Date, but only to the extent such carryforward is permitted
under applicable law and has not already been utilized to reduce, in any tax
year during which this Agreement is in effect, the amount of any distribution
otherwise permitted hereunder.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax, liabilities or penalties applicable thereto.

 

“Termination Date” means the date on which the principal of and interest on the
Loans and all other Obligations payable by the Borrower and the other Loan
Parties under this Agreement and all other Loan Documents (other than any
contingent or indemnification obligations not then due) shall have been paid in
full or collateralized in a manner reasonably acceptable to the Lender or
Affiliate of a Lender to whom such obligations are owed.

 

“Total Consideration” means the sum (but without duplication) of (a) cash paid
or payable in connection with any Acquisition, whether paid at or prior to or
after the closing thereof, plus (b) Indebtedness payable to the seller in
connection with such Acquisition, plus (c) the fair market value of any
Ownership Interests, delivered to the seller in connection with any Acquisition,
plus (d) purchase price payments which are required to be made over a period of
time and are not contingent upon the Borrower or any other Loan Party meeting
financial performance objectives (exclusive of salaries paid in the ordinary
course of business) (discounted at the Base Rate (as defined in the Senior
Credit Agreement), but only to the extent not included in clause (a), (b) or (c)
above, plus (e) the principal amount of Indebtedness assumed in connection with
such Acquisition.

 

“Total Funded Debt” means, at any time the same is to be determined, the sum
(but without duplication) of all Indebtedness (including obligations in respect
of Letters of Credit (as defined in the Senior Credit Agreement), whether or not
representing obligations for borrowed money, except to the extent Cash
Collateralized (as defined in the Senior Credit Agreement)), of the Parent and
its Subsidiaries at such time determined on a consolidated basis in accordance
with GAAP, but excluding obligations in respect of Bonding Agreements.

 

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

 

“UCC” is defined in Section 1.2.

 

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” is defined in Section 10.1(g)(ii).

 

 -22- 

 

 

“Voting Interests” of any Person means Ownership Interests of any class or
classes (however designated) having ordinary power for the election of directors
or other similar governing body of such Person (including general partners of a
partnership), other than Ownership Interests having such power only by reason of
the happening of a contingency.

 

“Welfare Plan” means a “welfare plan” of the Loan Parties as defined in
Section 3(1) of ERISA that is maintained or contributed to by a Loan Party or a
Subsidiary of a Loan Party.

 

“Wholly-owned Subsidiary” means, at any time, any Subsidiary of which all of the
issued and outstanding Ownership Interests (other than directors’ qualifying
Ownership Interests as required by law) are owned by any one or more of the
Borrower and the Borrower’s other Wholly-owned Subsidiaries at such time.

 

“Withholding Agent” means any Loan Party and the Agent.

 

Section 1.2.          Interpretation. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
permitted assigns, (c) the words “herein,” “hereof” and “hereunder,” and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Sections, Exhibits and Schedules shall be construed to refer to Sections of, and
Exhibits and Schedules to, this Agreement, (e) any reference to any law or
regulation herein shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time, and any
successor of such law or regulation and (f) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights. All references to time of day herein are
references to Cincinnati, Ohio, time unless otherwise specifically provided.
Where the character or amount of any asset or liability or item of income or
expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, it shall
be done in accordance with GAAP except where such principles are inconsistent
with the specific provisions of this Agreement. All terms that are used in this
Agreement which are defined in the Uniform Commercial Code of the State of New
York as in effect from time to time (“UCC”) shall have the same meanings herein
as such terms are defined in the UCC, unless this Agreement shall otherwise
specifically provide. References “from” or “through” any date mean, unless
otherwise specified, “from and including” or “through and including”,
respectively. Unless otherwise specified herein, the settlement of all payments
and fundings hereunder between or among the parties hereto shall be made in
lawful money of the United States of America and in immediately available funds.
All amounts used for purposes of financial calculations required to be made
herein shall be without duplication. References to any statute or act, without
additional reference, shall be deemed to refer to federal statutes and acts of
the United States of America.

 

 -23- 

 

 

Section 1.3.          Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 5.3 and such
change shall result in a change in the method of calculation of any financial
covenant, standard or term found in this Agreement, either the Borrower or the
Required Lenders may by notice to the Lenders and the Borrower, respectively,
require that the Lenders and the Borrower negotiate in good faith to amend such
covenant, standard, and term so as equitably to reflect such change in
accounting principles, with the desired result being that the criteria for
evaluating the financial condition of the Borrower and its Subsidiaries or such
covenant, standard or term shall be the same as if such change had not been
made. No delay by the Borrower or the Required Lenders in requiring such
negotiation shall limit their right to so require such a negotiation at any time
after such a change in accounting principles. Until any such covenant, standard,
or term is amended in accordance with this Section 1.3, financial covenants (and
all related defined terms) and applicable covenants, terms and standards shall
be computed and determined in accordance with GAAP in effect prior to such
change in accounting principles.

 

Section 1.4.          Rounding. Any financial ratios required to be maintained
pursuant to this Agreement (or required to be satisfied in order for a specific
action to be permitted under this Agreement) shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding up if
there is no nearest number).

 

Section 2.          Loans.

 

Section 2.1.          Loans. Each Lender severally and not jointly agrees,
subject to the terms and conditions hereof, to make a loan (each individually a
“Loan” and, collectively, the “Loans”) in Dollars to the Borrower in the amount
set forth opposite such Lender’s name on Schedule 1 attached hereto and made a
part hereof. The Loans shall be advanced on the Closing Date. No amount of any
Loan may be reborrowed once it is repaid.

 

Section 2.2.          [Reserved].

 

Section 2.3.          [Reserved].

 

 -24- 

 

 

Section 2.4.          Interest. (a)  Interest Rate; Payments. Interest on the
outstanding principal amount of the Loans shall accrue from and including the
Closing Date through and until full and final repayment of the principal amount
of the Loans and payment of all interest in full at an aggregate rate equal to
the Stated Interest Rate, and shall be compounded quarterly and computed on the
basis of the actual number of days elapsed and a 360-day year. On the last day
of each calendar quarter in which the Notes are outstanding, the Borrower shall
pay in arrears in cash by automatic bank draft to an account designated in
writing by each Lender interest accrued on the outstanding principal amount of
the Loans at the Cash Interest Rate. The full remaining portion of all interest
accruing on the Notes at the Deferred Interest Rate (the “Deferred Interest”)
may, at the Borrower’s option, be paid in cash on such day and, to the extent
not paid in cash, shall be paid as set forth in Section 2.4(b). If any date on
which interest is to be paid is not a Business Day, such interest shall be
calculated and paid on the next succeeding Business Day to occur after such date
(each date upon which interest shall be so payable, an “Interest Payment Date”).

 

(b)          Deferred Interest. Deferred Interest shall accrue as set forth
above and on each Interest Payment Date any such Deferred Interest which is not
paid in cash shall be capitalized and added to the principal amount of the Loans
(the aggregate amount of all such Deferred Interest so capitalized, the
“Deferred Interest Principal”) and shall thereafter bear interest as set forth
herein and shall be payable in full at maturity as set forth in Section 2.7 if
not otherwise paid prior to such date; provided, that all accrued Deferred
Interest shall accrue cumulatively whether or not the Borrower shall have
capital, surplus, earnings, or other amounts sufficient lawfully to pay such
amounts. At any time and from time to time on or after the earliest to occur of
(A) the prepayment of seventy five percent (75%) or more of the Original
Principal, (B) the occurrence of an acceleration of the Loans in full, (C) the
occurrence of a Change of Control, or (D) the final maturity of the Loans (each,
a “Conversion Event”), the Required Lenders may elect to receive, in
satisfaction of all or a portion of the outstanding principal of the Loans which
constitutes Deferred Interest Principal, the number of shares of Limbach Stock
(the “Conversion Shares”) equal to (i) the portion of the Deferred Interest
Principal being converted divided by (ii) the Conversion Price. If the Required
Lenders elect to receive the Conversion Shares, they shall notify the Borrower
in writing of such election as follows: (i) in the case of an acceleration of
the Loans in full, on or prior to the Conversion Date, (ii) in the case of the
final maturity of the Loans, not less than thirty (30) days prior to the
Conversion Date, and (iii) in the case of any other Conversion Event, within
five (5) days after notice by Borrower of such Conversion Event, which notice
must be given to the Agent and the Lenders at least ten (10) days prior to the
Conversion Date. On the Conversion Date, at the election of the Required
Lenders, the Borrower shall either (x) issue to the Lenders the Conversion
Shares or (y) (i) pay, in cash, an amount equal to the portion of the Deferred
Interest Principal being converted and (ii) issue to the Lenders the number of
shares of Limbach Stock equal to the Conversion Shares minus the Liquidation
Shares, in each case on a pro rata basis based on the Deferred Interest
Principal owed to each such Lender; provided, however, that if the Conversion
Event occurs in connection with an acceleration of the loans in full, the
Borrower shall deliver such shares or cash within ten (10) days after the
Conversion Date. Set forth on Schedule 2.4(b) is an example calculation of the
amount of cash and number of shares of Limbach Stock the Borrower would be
required to deliver to the Lenders upon an exercise of the option set forth in
clause (y) of the foregoing sentence. The example calculation set forth on
Schedule 2.4(b) is for illustrative purposes only and uses hypothetical figures.

 

 -25- 

 

 

(c)          Default Rate. While any Event of Default exists or after
acceleration, the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Loans and other amounts owing by it at a rate per annum equal to the sum of
3.00% per annum plus the Stated Interest Rate; provided, however, that in the
absence of acceleration, any increase in interest rates pursuant to this Section
shall be made at the election of the Agent, acting at the request or with the
consent of the Required Lenders, with written notice to the Borrower (which
election may be retroactively effective to the date of such Event of Default).
While any Event of Default exists or after acceleration, accrued interest shall
be paid on demand of the Agent at the request or with the consent of the
Required Lenders.

 

(d)          AHYDO. Notwithstanding anything in this Agreement or the Notes to
the contrary, on the date of the end of each accrual period (as determined for
purposes of Section 163(i) of the Code) ending after the fifth anniversary of
the issuance of a Note (as determined for U.S. federal income tax purposes)
(each such date, an “AHYDO Payment Date”), the Borrower shall pay in cash to
each Lender holding a Note issued by such Borrower an amount equal to its pro
rata portion of the excess of (i) the aggregate amount that would be includible
in such Lender’s aggregate gross income with respect to such Lender’s Note for
all periods ending on or before such AHYDO Payment Date over (ii) an amount
equal to the sum of (x) the aggregate amount of interest to be paid under such
Note on or before such date and (y) the product of (A) the issue price (as
defined in Sections 1273(b) and 1274(a) of the Code) of such Note and (B) the
yield to maturity of such Note (as determined for purposes of Section 163(i) of
the Code). The parties intend for the Notes to not constitute “applicable high
yield discount obligations” within the meaning of Section 163(i) of the Code,
and this Section 2.4(d) shall be interpreted consistent with such intent.

 

Section 2.5.          [Reserved].

 

Section 2.6.          [Reserved].

 

Section 2.7.          Maturity of Loans. A final payment comprised of all
principal and interest not sooner paid on the Loans, shall be due and payable to
the Lenders holding the Loans pro rata based upon their Percentages on July 20,
2022, the final maturity thereof.

 

Section 2.8.          Prepayments. (a) Voluntary. Subject to the terms of the
Senior Subordination Agreement, the Borrower may prepay the Loans in whole or in
part at any time upon notice by the Borrower to the Agent and the Lenders, such
prepayment to be made by the payment of (i) first, the Original Principal to be
prepaid and cash interest accrued thereon to the date fixed for prepayment until
paid in full and, second, the Deferred Interest Principal to be prepaid and cash
interest accrued thereon to the date fixed for repayment plus (ii) the
applicable Prepayment Premium, if any plus (iii) all outstanding and unpaid fees
and expenses payable to the Lenders under this Agreement and the other Loan
Documents through the date of repayment; provided, however, the Borrower may not
partially repay the Loans in a principal amount less than $500,000.

 

 -26- 

 

 

(b)          Mandatory. (i) Subject to the terms of the Senior Subordination
Agreement, if the Borrower or any Subsidiary shall at any time or from time to
time make or agree to make a Disposition or shall suffer an Event of Loss with
respect to any Property which results in Net Cash Proceeds in excess of $110,000
individually or $220,000 on a cumulative basis in any fiscal year of the
Borrower, then (x) the Borrower shall promptly notify the Agent of such proposed
Disposition or Event of Loss (including the amount of the estimated Net Cash
Proceeds to be received by the Borrower or such Subsidiary in respect thereof)
and (y) promptly upon receipt by the Borrower or the Subsidiary of the Net Cash
Proceeds of such Disposition or such Event of Loss, the Borrower shall prepay
the Obligations in an aggregate amount equal to 100% of the amount of all such
Net Cash Proceeds in excess of $110,000 individually or $220,000 on a cumulative
basis in any fiscal year of the Borrower; provided that in the case of each
Disposition and Event of Loss, if the Borrower states in its notice of such
event that the Borrower or the applicable Subsidiary intends to invest or
reinvest, as applicable, within one hundred eighty (180) days of the applicable
Disposition or receipt of Net Cash Proceeds from an Event of Loss, the Net Cash
Proceeds thereof in assets used or useful in the business, then so long as no
Default or Event of Default then exists, the Borrower shall not be required to
make a mandatory prepayment under this Section in respect of such Net Cash
Proceeds to the extent such Net Cash Proceeds are actually invested or
reinvested as described in the Borrower’s notice within such one hundred eighty
(180) day period. Promptly after the end of such one hundred eighty (180) day
period, the Borrower shall notify the Agent whether the Borrower or such
Subsidiary has invested or reinvested such Net Cash Proceeds as described in the
Borrower’s notice, and to the extent such Net Cash Proceeds have not been so
invested or reinvested, the Borrower shall promptly prepay the Obligations in
the amount of such Net Cash Proceeds in excess of $110,000 individually or
$220,000 on a cumulative basis in any fiscal year of the Borrower not so
invested or reinvested.

 

(ii)         Subject to the terms of the Senior Subordination Agreement, if
after the Closing Date the Borrower or any Subsidiary shall issue any new
Ownership Interests (other than Excluded Equity Issuances) or incur or assume
any Indebtedness other than that permitted by Section 6.11, the Borrower shall
promptly notify the Agent of the estimated Net Cash Proceeds of such issuance,
incurrence or assumption to be received by or for the account of the Borrower or
such Subsidiary in respect thereof. Promptly upon receipt by the Borrower or
such Subsidiary of Net Cash Proceeds of such issuance, incurrence or assumption
the Borrower shall prepay the Obligations in the amount of such Net Cash
Proceeds. The Borrower acknowledges that its performance hereunder shall not
limit the rights and remedies of the Lenders for any breach of Section 6.11 or
any other terms of this Agreement.

 

(iii)        [Reserved].

 

(iv)        Subject to the terms of the Senior Subordination Agreement, if after
the Closing Date the Borrower or any Subsidiary shall issue any Subordinated
Debt, the Borrower shall promptly notify the Agent of the estimated Net Cash
Proceeds of such issuance to be received by or for the account of the Borrower
or such Subsidiary in respect thereof. Promptly upon receipt by the Borrower or
such Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay
the Obligations in the amount of such Net Cash Proceeds. The Borrower
acknowledges that its performance hereunder shall not limit the rights and
remedies of the Lenders for any breach of Section 6.11 or any other terms of
this Agreement.

 

 -27- 

 

 

(v)         Upon the occurrence of a Change of Control, concurrently with the
closing of any such transaction, at the election of the Required Lenders,
Borrower shall repay the Loans in full by payment of the outstanding principal
balance of the Loans, plus (1) the applicable Prepayment Premium, if any, (2)
all unpaid interest accrued thereon through the date repayment and (3) all
outstanding and unpaid fees and expenses payable to the Lenders under this
Agreement and the other Loan Documents through the date of repayment.

 

(vi)        [Reserved].

 

(vii)       Except as otherwise set forth in Section 2.8(b)(v), each prepayment
of Loans under this Section 2.8(b) shall be made by the payment of (x) first,
the Original Principal to be prepaid and cash interest accrued thereon to the
date of prepayment until paid in full and, second, the Deferred Interest
Principal and cash interest accrued thereon to the date of prepayment plus (y)
the applicable Prepayment Premium, if any.

 

(c)          Lender Notification. The Agent will promptly advise each Lender of
any notice of prepayment it receives from the Borrower.

 

Section 2.9.          Place and Application of Payments. Unless as otherwise set
forth herein, all payments of principal of and interest on the Loans and of all
other Obligations payable by the Borrower under this Agreement and the other
Loan Documents, shall be made by the Borrower to each Lender by no later than
12:00 Noon (New York time) on the due date thereof at the office set forth next
to such Lenders name on Schedule 1 hereto (or such other location such Lender
may designate to the Borrower in writing) for the benefit of the applicable
Lender entitled thereto. Any payments received after such time shall be deemed
to have been received by the Agent on the next Business Day. All such payments
shall be made in Dollars, in immediately available funds at the place of
payment, in each case without set-off or counterclaim.

 

Section 2.10.         [Reserved].

 

Section 2.11.         [Reserved].

 

Section 2.12.         Evidence of Indebtedness. (a) Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
Indebtedness of the Borrower to such Lender resulting from the Loan made by such
Lender, including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder.

 

(b)          [Reserved].

 

(c)          The entries maintained in the accounts maintained pursuant to
Section 2.12(a) above shall be prima facie evidence of the existence and amounts
of the Obligations therein recorded (absent manifest error); provided, however,
that the failure of any Lender to maintain such accounts or any error therein
shall not in any manner affect the obligation of the Borrower to repay the
Obligations in accordance with their terms.

 

 -28- 

 

 

(d)          Any Lender may request that its Loans be evidenced by a promissory
note or notes in the form of Exhibit D (referred to herein as a “Note”). 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 Loan. Thereafter, the
Loans evidenced by such Note or Notes and interest thereon shall at all times
(including after any assignment pursuant to Section 10.9) be represented by one
or more Notes payable to the order of the payee named therein or any assignee
pursuant to Section 10.9, except to the extent that any such Lender or assignee
subsequently returns any such Note for cancellation and requests that such Loans
once again be evidenced as described in subsections (a) and (b) above.

 

Section 2.13.         Fees. (a) Closing Fee. Upon the execution of this
Agreement, the Borrower shall pay to the Lenders a closing fee equal to
$260,000, allocated among ratably the Lenders as set forth on Schedule 1 hereto.

 

(b)          Valuation Fee. The Borrower shall pay to Alcentra an annual
valuation fee in the amount of $20,000, payable in full on the Closing Date and
on the Interest Payment Date closest to each anniversary of such date for so
long as Alcentra or any of its Affiliates is a Lender hereunder.

 

Section 3.          Conditions Precedent.

 

Section 3.1.          Loans. The obligation of each Lender to advance any Loan
shall be subject to satisfaction (or waiver) of the following conditions
precedent:

 

(a)          the Agent shall have received this Agreement duly executed by the
Loan Parties and the Lenders;

 

(b)          the Agent shall have received for each Lender requesting Notes,
such Lender’s duly executed Notes of the Borrower, dated the date hereof and
otherwise in compliance with the provisions of Section 2.12(d);

 

(c)          [reserved];

 

(d)          the Agent shall have received the Senior Subordination Agreement
duly executed by the Senior Agent and the other parties thereto, together with
certified copies of the Senior Credit Agreement and the other Senior Facility
Loan Documents in effect on the Closing Date, which documents shall be in form
and substance reasonably satisfactory to the Agent;

 

(e)          the Agent shall have received the Surety Subordination Agreement
duly executed by the Bonding Company and the other parties thereto, together
with copies of the Bonding Agreements in effect on the Closing Date certified by
a Duly Authorized Officer of the Borrower, which documents, including the
aggregate bonding availability thereunder, shall be in form and substance
reasonably satisfactory to the Agent;

 

 -29- 

 

 

(f)          the Agent shall have received evidence of insurance required to be
maintained under the Loan Documents, naming the Agent as additional insured and
lenders loss payee, as applicable;

 

(g)          the Agent shall have received copies of each Loan Party’s
Organization Documents, certified in each instance by a Duly Authorized Officer
and, with respect to Organization Documents filed with a Governmental Authority,
by the applicable Governmental Authority;

 

(h)          the Agent shall have received copies of resolutions of each Loan
Party’s board of directors (or similar governing body) authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby, together with specimen signatures of the
persons authorized to execute such documents on such Loan Party’s behalf, all
certified in each instance by a Duly Authorized Officer;

 

(i)          the Agent shall have received copies of the certificates of good
standing, or nearest equivalent in the relevant jurisdiction, for each Loan
Party (dated no earlier than thirty (30) days prior to the date hereof) from the
office of the secretary of state or other appropriate governmental department or
agency of the state of its formation, incorporation or organization, as
applicable;

 

(j)          the Agent shall have received a list of the Borrower’s Authorized
Representatives;

 

(k)          the Agent and the Lenders shall have received the fees required by
Section 2.13 to be paid on the Closing Date;

 

(l)          the Agent shall have received certification from the Borrower’s
Chief Financial Officer or other Duly Authorized Officer of the Borrower
acceptable to the Agent of the Solvency of the Loan Parties on a consolidated
basis after giving effect to the Related Transactions and the advancing of the
Loans;

 

(m)          the Agent shall have received: (i) an executed compliance
certificate in the form of Exhibit E, calculated based on the Borrower’s
financial conditions as of March 31, 2016, but giving effect to the Related
Transactions and the advancing of the Loans; (ii) a closing date balance sheet
for the Borrower and its Subsidiaries calculated based on the Borrower’s
financial conditions as of March 31, 2016, but giving effect to the Related
Transactions and the advancing of the Loans; (iii) unaudited historical
quarterly financial statements for the Borrower and its Subsidiaries for the
quarter ended March 31, 2016 and unaudited historical monthly financial
statements for the Borrower and its Subsidiaries for each of the months ended
April 30, 2016 and May 31, 2016; (iv) a certificate from the Borrower’s Chief
Financial Officer or other Duly Authorized Officer of the Borrower acceptable to
the Agent, certifying that since March 31, 2016, no Material Adverse Effect has
occurred and that the conditions set forth in Section 3.1(n) have been
satisfied; (v) the Borrowing Base Certificate (as defined in the Senior Credit
Agreement) required to be delivered pursuant to Section 3.2(m) of the Senior
Credit Agreement; and (vi) a certificate from the Borrower’s Chief Financial
Officer or other Duly Authorized Officer of the Borrower acceptable to the Agent
certifying as of the Closing Date, (A) the ratio of (x) Total Funded Debt of the
Borrower and its Subsidiaries, after giving effect the Related Transactions and
the advancing of the Loans, to (y) EBITDA for the period of twelve (12)
consecutive months ended on March 31, 2016, calculated on a pro forma basis
after giving effect to the Related Transactions and the advancing of the Loans,
shall not exceed 3.65:1.00 and (ii) EBITDA for the period of twelve (12)
consecutive months ending on March 31, 2016 shall be equal to or greater than
$11,600,000.

 

 -30- 

 

 

(o)          the Agent shall have received financing statement and, as
appropriate, tax and judgment lien search results against the Loan Parties, and
their Property evidencing the absence of Liens thereon, except for Permitted
Liens;

 

(p)          the Agent shall have received pay-off and lien release letters from
secured creditors (other than holders of Permitted Liens) of the Loan Parties
and of the Amended and Restated Senior Subordinated Loan Agreement, setting
forth, among other things, the total amount of indebtedness outstanding and
owing to them (or outstanding letters of credit issued for the account of any of
the Loan Parties) and containing an undertaking to cause to be delivered to the
Agent UCC termination statements and any other lien release instruments
necessary to release their Liens on the assets of any of the Loan Parties, which
pay-off and lien release letters shall be in form and substance acceptable to
the Agent;

 

(q)          the Agent shall have received the favorable written opinions of
counsel to the Loan Parties, in form and substance reasonably satisfactory to
the Agent;

 

(r)          the Agent’s due diligence with respect to the Loan Parties and
their Subsidiaries, if any, shall be completed in a manner reasonably acceptable
to the Agent;

 

(s)          each of the Lenders shall have received, sufficiently in advance of
the Closing Date, all documentation and other information requested by any such
Lender required by bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the Patriot
Act; and the Agent shall have received a fully executed IRS Form W-9 (or its
equivalent) for each of the Loan Parties;

 

(t)          none of the Loan Parties nor any of their Subsidiaries, if any,
shall have obtained or attempted to obtain, place, arrange or renew any debt
financing, except for the Senior Facility Debt and as otherwise permitted by
Section 6.11, prior to the Closing Date;

 

(u)          (i) the Agent shall have received the Merger Agreement duly
executed by the Parent and the other parties thereto, and certified by a Duly
Authorized Officer of the Borrower, which agreement shall be in form and
substance reasonably satisfactory to the Agent and (ii) the Agent shall have
received evidence satisfactory to it that the Required Merger has closed or will
close simultaneously with the closing of this Agreement;

 

 -31- 

 

 

(v)         the Agent shall have received a registration rights agreement, in
form and substance satisfactory to it, duly executed by Limbach, Inc.

 

(w)          the Agent shall have received such other agreements, instruments,
documents, certificates, and opinions as the Agent may reasonably request;

 

(x)          each of the representations and warranties set forth herein and in
the other Loan Documents 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 the Closing Date, 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); and

 

(y)          no Default or Event of Default shall have occurred and be
continuing or would occur after giving effect to the Loans.

 

Section 4.          The Guaranties.

 

Section 4.1.          [Reserved].

 

Section 4.2.          [Reserved].

 

Section 4.3.          Guaranties. The payment and performance of the Guaranteed
Obligations shall at all times be jointly and severally guaranteed by each
Guarantor pursuant to one or more Guaranty Agreements.

 

Section 4.4.          Further Assurances. In the event any Loan Party forms or
acquires any other Subsidiary after the Closing Date, the Loan Parties shall
promptly upon such formation or acquisition cause such newly formed or acquired
Subsidiary to execute a Guaranty Agreement and the Loan Parties shall also
deliver to the Agent, or cause such Subsidiary to deliver to the Agent, at the
Borrower’s cost and expense, such other instruments, documents, certificates,
and opinions reasonably required by the Agent in connection therewith.

 

Section 5.          Representations and Warranties.

 

Each Loan Party represents and warrants to each Lender and the Agent as follows:

 

Section 5.1.          Organization and Qualification. Each Loan Party (a) is
duly organized and validly existing under the laws of the jurisdiction of its
organization, (b) is in good standing under the laws of the jurisdiction of its
organization, (c) has the power and authority to own its property and to
transact the business in which it is engaged and proposes to engage and (d) is
duly qualified and in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualification, except, in each case of clauses (a), (b) (other than with respect
to the Borrower where failure to maintain such good standing is not curable or
results in the dissolution of the Borrower), (c) and (d), where the same could
not be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect.

 

 -32- 

 

  

Section 5.2.          Authority and Enforceability. The Borrower has the power
and authority to enter into this Agreement and the other Loan Documents executed
by it, to make the borrowings herein provided for, to issue its Notes (if any),
and to perform all of its obligations hereunder and under the other Loan
Documents executed by it. Each Guarantor has the power and authority to enter
into the Loan Documents executed by it, to guarantee the Obligations, and to
perform all of its obligations under the Loan Documents executed by it. The Loan
Documents delivered by the Loan Parties have been duly authorized by proper
corporate and/or other organizational proceedings, executed, and delivered by
such Persons and constitute valid and binding obligations of such Loan Parties
enforceable against each of them in accordance with their terms, except as
enforceability may be limited by Debtor Relief Laws and general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law); and this Agreement and the other Loan
Documents do not, nor does the performance or observance by any Loan Party of
any of the matters and things herein or therein provided for, (a) contravene or
violate any applicable Legal Requirement binding upon any Loan Party or any
provision of the Organization Documents of any Loan Party, (b) violate or
constitute a default under any covenant, indenture or agreement of or affecting
the any Loan Party or any of its Property, in each case where such violation,
contravention or default, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or (c) result in the creation or
imposition of any Lien on any Property of any Loan Party.

 

Section 5.3.          Financial Reports. The audited consolidated and
consolidating financial statements of the Parent and its Subsidiaries as at
December 31, 2015, and the unaudited interim consolidated and consolidating
financial statements of the Parent and its Subsidiaries as at March 31, 2016,
for the three (3) months then ended, heretofore furnished to the Agent, fairly
and adequately present the consolidated and consolidating financial condition of
the Parent and its Subsidiaries as at said dates and the consolidated and
consolidating results of their operations and cash flows for the periods then
ended in conformity with GAAP applied on a consistent basis. As of any date
after the Closing Date, the audited consolidated and consolidating financial
statements of the Borrower and its Subsidiaries most recently furnished to the
Agent pursuant to Section 6.1, fairly and adequately present in all material
respects the consolidated and consolidating financial condition of the Borrower
and its Subsidiaries as at said dates and the consolidated and consolidating
results of their operations and cash flows for the periods then ended in
conformity with GAAP applied on a consistent basis. As of the date of the most
recently delivered annual financial statements, no Loan Party or any Subsidiary
of a Loan Party has contingent liabilities required to be disclosed under GAAP
or judgments, orders or injunctions against it that are material to it and which
otherwise constitute an Event of Default under Section 7.1(g), other than as
indicated on such financial statements or, with respect to future periods, on
the financial statements furnished pursuant to Section 6.1.

 

 -33- 

 

 

Section 5.4.          No Material Adverse Change. Since the date of the most
recent audited financial statements of Limbach, Inc. provided to the Agent
pursuant to Section 6.1(b), there has been no change in the business condition
(financial or otherwise), operations, performance or Properties of any Loan
Party or any Subsidiary of any Loan Party except those occurring in the ordinary
course of business, none of which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.

 

Section 5.5.          Litigation and Other Controversies. Except as set forth on
Schedule 5.5, there is no litigation, arbitration, labor controversy or
governmental proceeding pending or, to the knowledge of any Loan Party,
threatened against any Loan Party or any of its Subsidiaries, or any of their
respective Property, that could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

 

Section 5.6.          True and Complete Disclosure. All information furnished by
or on behalf of the Loan Parties or any of their Subsidiaries to the Agent or
any Lender for purposes of or in connection with this Agreement, or any
transaction contemplated herein, does not contain any untrue statements or
material fact or omit a material fact necessary to make the material statements
herein or therein not misleading in light of the circumstances under which such
information was provided; provided that, with respect to projected financial
information furnished by or on behalf of the Loan Parties or any of their
Subsidiaries, the Loan Parties only represent and warrant that such information
is prepared in good faith based upon assumptions and estimates believed to be
reasonable by the Loan Parties at the time of preparation and at the time of
delivery.

 

Section 5.7.          Use of Proceeds; Margin Stock. The Borrower shall use all
proceeds of the Loans to refinance existing Indebtedness outstanding on the
Closing Date, to finance Capital Expenditures and Permitted Acquisitions and to
fund certain fees and expenses associated with this Agreement and the Related
Agreements and the transactions contemplated hereby and thereby; and for working
capital purposes and other general corporate purposes of the Loan Parties and
their Subsidiaries. No part of the proceeds of any Loan or other extension of
credit hereunder will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.
Neither the making of any Loan or other extension of credit hereunder nor the
use of the proceeds of Loans will violate or be inconsistent with the provisions
of Regulations T, U or X of the Board of Governors of the Federal Reserve System
and any successor to all or any portion of such regulations. Margin Stock
constitutes less than 25% of the value of those assets of the Loan Parties and
their Subsidiaries that are subject to any limitation on sale, pledge or other
restriction hereunder.

 

Section 5.8.          Taxes. Each Loan Party and each of its Subsidiaries has
timely filed or caused to be timely filed all tax returns required to be filed
by such Loan Party and/or any of its Subsidiaries, except where (i) extensions
have been duly obtained or (ii) failure to so file could not be reasonably
expected to have, either individually or in the aggregate, a Material Adverse
Effect. Each Loan Party and each of its Subsidiaries has paid (or made adequate
provisions and established appropriate reserves for) all Taxes payable by them
other than Taxes which are not delinquent, except those that are being contested
in good faith and by appropriate legal proceedings and as to which appropriate
reserves have been provided for in accordance with GAAP and no Lien resulting
therefrom attaches to any of its Property (other than any Permitted Liens).

 

 -34- 

 

 

Section 5.9.          ERISA. Except as would not reasonably be expected to
result in liability in excess of $825,000, or except as set forth on Schedule
5.9, (a) no ERISA Event has occurred and no Loan Party or any member of its
Controlled Group is aware of any fact, event or circumstance that could
reasonably be expected to constitute or result in an ERISA Event; (b) each Plan
is in compliance with all applicable Legal Requirements; (c) there is no
existing or pending (or to the knowledge of the Loan Party, threatened) claims
(other than routine claims for benefits in the normal course), sanctions,
actions, lawsuits or other proceedings or investigation involving any Plan or
Welfare Plan; (d) no Loan Party or any member of the Controlled Group has
received in the past five years any requests for a “Statement of Business
Affairs” from any Multiemployer Plan it has contributed to; and (e)
substantially all of the employees for whom any Loan Party or member of its
Controlled Group has an obligation to contribute to a Multiemployer Plan perform
work in the building and construction industry. No Lien has been imposed under
Section 430(k) of the Code or Sections 303 or 4068 of ERISA on any asset of a
Loan Party or a Subsidiary of a Loan Party. An update to this Schedule 5.9 will
be included as an attachment to each certificate delivered pursuant to Section
6.1(c).

 

Section 5.10.         Subsidiaries. Schedule 5.10 (as supplemented from time to
time pursuant to Section 6.18) identifies (a) each Subsidiary (including
Subsidiaries that are Loan Parties) and (b) the following information for each
Subsidiary: (i) jurisdiction of its organization; and (ii) the percentage of
issued and outstanding interests of each class of its Ownership Interests owned
by any Loan Party and/or its Subsidiaries; and, if such percentage is not 100%
(excluding directors’ qualifying shares as required by law), a description of
each class of its authorized Ownership Interests and the number of interests of
each class issued and outstanding. All of the outstanding Ownership Interests of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable and all such Ownership Interests indicated on Schedule 5.10 (as
supplemented from time to time pursuant to Section 6.18) as owned by a Loan
Party or another Subsidiary are owned, beneficially and of record, by such Loan
Party or Subsidiary free and clear of all Liens, other than Permitted Liens.
There are no outstanding commitments or other obligations of any Subsidiary to
issue, and no options, warrants or other rights of any Person to acquire, any
shares of any class of Ownership Interests of any Subsidiary.

 

Section 5.11.         Compliance with Laws. The Loan Parties and their
Subsidiaries are in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities in respect of the conduct of their businesses and the ownership of
their Property, except such noncompliances as could not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect.

 

 -35- 

 

 

Section 5.12.         Environmental Matters. Except as could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect,
each Loan Party and each of its Subsidiaries: (i) is and has been in compliance
with all applicable Environmental Laws; and (ii) has obtained all permits,
licenses and approvals required by Environmental Laws, all such permits,
licenses and approvals are in full force and effect and each Loan Party and each
of its Subsidiaries is in compliance with the terms and conditions of all such
permits, licenses and approvals. There are no pending or, to the best knowledge
of the Loan Parties and their Subsidiaries after due inquiry, threatened
Environmental Claims against any Loan Party or any of its Subsidiaries or any
real property, including leaseholds, owned or operated by any Loan Party or any
of its Subsidiaries. There are no facts, circumstances, conditions or
occurrences that, to the best knowledge of the Loan Parties and their
Subsidiaries after due inquiry, could reasonably be expected to (i) form the
basis of an Environmental Claim against any Loan Party or any of its
Subsidiaries or any real property, including leaseholds, owned or operated by
any Loan Party or any of its Subsidiaries, or (ii) cause any such real property
to be subject to any restrictions on its ownership, occupancy, use or
transferability under Environmental Laws. Hazardous Materials have not been
Released on or from any real property, including leaseholds, owned or operated
by any Loan Party or any of its Subsidiaries or at any off-site location for
which any Loan Party or any of its Subsidiaries is liable, that individually or
in the aggregate could reasonably be expected to have a Material Adverse Effect.
The Loan Parties have made available to Agent accurate and complete copies of
all material environmental reports, studies, assessments, investigations,
audits, correspondence and other documents relating to environmental or
occupational safety and health matters with respect to any real property,
including leaseholds, owned or operated by the Loan Parties or any of their
Subsidiaries that are in the Loan Parties’ possession or control.

 

Section 5.13.         Investment Company. No Loan Party nor any of its
Subsidiaries is an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940.

 

Section 5.14.         Intellectual Property. Each Loan Party and each of its
Subsidiaries owns or has obtained licenses or other rights of whatever nature to
all the patents, trademarks, service marks, trade names, copyrights, trade
secrets, know-how or other intellectual property rights necessary for the
present conduct of its businesses, in each case without any known conflict with
the rights of others except for such conflicts, rights to use and any failure to
own or obtain such licenses and other rights, as the case may be, as could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 5.15.         Good Title. The Loan Parties and their Subsidiaries have
good and marketable title to, or valid leasehold interests in, or rights to use,
their assets as reflected on the Loan Parties’ most recent consolidated balance
sheet provided to the Agent (except for sales of assets in the ordinary course
of business, and such defects in title or interests that could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect) and is subject to no Liens, other than Permitted Liens.

 

Section 5.16.         Labor Relations. No Loan Party nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 5.16, there is
(a) no strike, labor dispute, slowdown, or stoppage pending against any Loan
Party or any of its Subsidiaries or, to the best knowledge of the Loan Parties
and their Subsidiaries, threatened against any Loan Party or any of its
Subsidiaries, (b) to the best knowledge of the Loan Parties and their
Subsidiaries, no union representation proceeding is pending with respect to the
employees of any Loan Party or any of its Subsidiaries and no union organizing
activities are taking place and (c) no Loan Party nor any of its Subsidiaries is
a party to a collective bargaining agreement, except (with respect to any matter
specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as could not reasonably be expected to have a Material Adverse
Effect.

 

 -36- 

 

 

Section 5.17.         Governmental Authority and Licensing. The Loan Parties and
their Subsidiaries have received all licenses, permits, and approvals of each
Governmental Authority necessary to conduct their businesses, in each case where
the failure to obtain or maintain the same could reasonably be expected to have
a Material Adverse Effect. No investigation or proceeding that, if adversely
determined, could reasonably be expected to result in revocation or denial of
any license, permit or approval is pending or, to the knowledge of the Loan
Parties, threatened, except where such revocation or denial could not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

Section 5.18.         Approvals. No authorization, consent, license or exemption
from, or filing or registration with, any Governmental Authority, nor any
approval or consent of any other Person, is or will be necessary to the valid
execution, delivery or performance by any Loan Party of any Loan Document,
except for (a) such approvals, authorizations, consents, licenses or exemptions
from, or filings or registrations which have been obtained prior to the date of
this Agreement and remain in full force and effect and (b) filings which are
necessary to release Liens granted pursuant to the document related to the
Indebtedness to be refinanced on the Closing Date.

 

Section 5.19.         Affiliate Transactions. No Loan Party nor any of its
Subsidiaries is a party to any contracts or agreements with any of its
Affiliates (other than with Wholly-owned Subsidiaries) on terms and conditions
which are less favorable to such Loan Party or such Subsidiary than would be
usual and customary in similar contracts or agreements between Persons not
affiliated with each other.

 

Section 5.20.         Solvency. The Loan Parties and their Subsidiaries are, on
a consolidated basis, Solvent.

 

Section 5.21.         No Broker Fees. No broker’s or finder’s fee or commission
will be payable with respect hereto or any of the transactions contemplated
thereby; and the Loan Parties hereby agree to indemnify the Agent and the
Lenders against, and agree that they will hold the Agent and the Lenders
harmless from, any claim, demand, or liability for any such broker’s or finder’s
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable attorneys’ fees) arising in connection with any
such claim, demand, or liability.

 

Section 5.22.         No Default. No Default or Event of Default has occurred
and is continuing.

 

Section 5.23.         Compliance with Sanctions Programs.  Each Loan Party is in
compliance with the requirements of all Sanctions Programs applicable to it.
Each Subsidiary of each Loan Party is in compliance with the requirements of all
Sanctions Programs applicable to such Subsidiary. Each Loan Party has provided
to the Agent and the Lenders all information regarding such Loan Party and its
directors, officers, Affiliates and Subsidiaries necessary for the Agent and the
Lenders to comply with all applicable Sanctions Programs. To the best of each
Loan Party’s knowledge, neither any Loan Party nor any of its officers or
directors, Affiliates or Subsidiaries is, as of the date hereof, a Sanctioned
Person. No part of the proceeds of the Loans will be used, directly or
indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone
else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977.

 

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Section 5.24.         Merger Agreement; Bonding Facility. (a) Merger Agreement.
The Borrower has provided to the Agent a true and correct copy of the Merger
Agreement. The Merger Agreement is in full force and effect and has not, except
as reflected in amendments provided to the Agent, been amended or modified in
any material respect from the version so delivered to the Agent, no material
condition to the effectiveness thereof has been waived and no material
obligations of Limbach, Inc. or the Parent thereunder have been waived, except
to the extent approved in writing by the Agent, and no Loan Party is aware of
any default thereunder. No authorization, consent, license, or exemption from,
or filing or registration with, any Governmental Authority, nor any material
approval or consent of any other Person, is or will be necessary to the valid
execution, delivery, or material performance by Limbach, Inc. or the Parent of
the Merger Agreement or of any other instrument or document executed and
delivered in connection therewith. As of the Closing Date, to each Loan Party’s
knowledge, all representations and warranties in the Merger Agreement are true
and correct.

 

(b)          Bonding Facility. The Loan Parties have provided to the Agent a
true and correct copy of all agreements establishing the Required Bonding
Facility (together, the “Bonding Agreements”). The Borrower and its Subsidiaries
have available bonding capacity under one or more Bonding Agreements in an
amount sufficient to operate their respective businesses in the ordinary course
of business. Each of the Bonding Agreements is in full force and effect and no
Duly Authorized Officer is aware of any condition that would constitute a
default under Section 7.1(l) of this Agreement.

 

Section 5.25.         Other Agreements and Documents. All Material Agreements
existing on the Closing Date are listed on Schedule 5.25, and, except as set
forth on such Schedule, all such Material Agreements are in full force and
effect and no defaults currently exist under such agreements which individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect. There does not exist any violation of any Organization Documents which
could reasonably be expected to have a Material Adverse Effect.

 

Section 5.26.         Options and Warrants, Etc. On the Closing Date, except as
set forth on Schedule 5.26, there are no outstanding securities convertible into
or exchangeable for Limbach Stock or options, warrants or other rights to
purchase or subscribe for Limbach Stock, or contracts, commitments, agreements,
understandings or arrangements of any kind to which Limbach, Inc., any Loan
Party or any Subsidiary of a Loan Party is a party relating to any such
convertible or exchangeable securities or any such options, warrants or rights.

 

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Section 5.27.         Senior Facility Debt. The Borrower has delivered to the
Agent true, correct and complete copies of all Senior Facility Loan Documents
(including all schedules, exhibits, amendments, supplements, modifications and
assignments delivered pursuant thereto or in connection therewith). All
Obligations constitute Indebtedness entitled to the benefits of the
subordination provisions contained in the Senior Facility Loan Documents and the
Senior Subordination Agreement.

  

Section 6.          Covenants.

 

Each Loan Party covenants and agrees that, so long as any Loans remain
outstanding and until the Termination Date:

 

Section 6.1.          Information Covenants. The Loan Parties will furnish to
the Agent, with sufficient copies for each Lender:

 

(a)          Quarterly Reports. Within forty-five (45) days after the end of
each fiscal quarter of the Borrower, commencing with the fiscal quarter of the
Borrower ending June 30, 2016, (i) the Borrower and its Subsidiaries’
consolidated and consolidating balance sheet as at the end of such fiscal
quarter and the related consolidated and consolidating 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 Borrower 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
Borrower acceptable to the Agent that the consolidated and consolidating
schedules fairly present in all material respects in accordance with GAAP the
financial condition of the Borrower 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 Borrower and its
Subsidiaries as at the end of such fiscal quarter in form and substance
reasonably acceptable to the Agent, and (iii) a management discussion and
analysis (with reasonable detail and specificity) of the results of operations
for the fiscal periods reported.

 

(b)          Annual Statements. Within one hundred twenty (120) days after the
close of each fiscal year of the Borrower, (i) a copy of Limbach, Inc.’s
consolidated and consolidating balance sheet as of the last day of the fiscal
year then ended and Limbach, Inc.’s consolidated and consolidating 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 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 and (ii) the unaudited consolidating balance sheet
as of the last day of the fiscal year then ended of the Borrower and its
Subsidiaries and the unaudited consolidated and consolidating statements of
income, retained earnings, and cash flows for the fiscal year then ended of the
Borrower and its Subsidiaries which shall be certified by the Chief Financial
Officer or other Duly Authorized Officer of the Borrower acceptable to the Agent
that such financial statements fairly present in all material respects in
accordance with GAAP the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their operations and
changes in their cash flows for the periods indicated.

 

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(c)          Officer’s Certificates. Within forty-five (45) days after the end
of each fiscal quarter of the Borrower 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 Borrower ending June 30, 2016, (i) a certificate of the Chief
Financial Officer or other Duly Authorized Officer of the Borrower acceptable to
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 Borrower is 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 Borrower’s compliance with the covenants set forth
in 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 clause 6.1(d).

 

(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 Borrower, a budget in
form satisfactory to the 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 Borrower and its Subsidiaries
in reasonable detail satisfactory to the 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.

 

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(e)          Notice of Default or Litigation, Labor Materials and Contracts.
Promptly, and in any event within five (5) Business Days after any officer of
any Loan Party obtains knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or an Event of Default or any other event
which could reasonably be expected to have a Material Adverse Effect, which
notice shall specify the nature thereof, the period of existence thereof and
what action the Loan Parties propose to take with respect thereto; provided that
this reporting obligation shall not apply to ordinary course short term
performance defaults incurred under construction contracts entered into in the
ordinary course of business, (ii) the commencement of, or threat of, or any
significant development in, any litigation, labor controversy, arbitration or
governmental proceeding pending against any Loan Party or any of its
Subsidiaries which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect, (iii) any labor dispute to which any Loan Party
or any of its Subsidiaries may become a party and which may have a Material
Adverse Effect, (iv) any strikes, walkouts, or lockouts relating to any of the
Loan Parties’ or any of their Subsidiaries’ plants or other facilities, and (v)
the occurrence of any event which constitutes a default or an event of default
under any Material Agreement; provided that this reporting obligation shall not
apply to ordinary course short term performance defaults incurred under
construction contracts entered into in the ordinary course of business. In
addition, the Loan Parties agree to provide the Lenders, promptly upon receipt
by any Loan Party, with copies of all pleadings filed relating to any litigation
matter disclosed pursuant to this Section 6.1(e).

 

(f)          Management Letters. Promptly after any Loan Party’s receipt
thereof, a copy of each report or any “management letter” submitted to any Loan
Party or any of its Subsidiaries by its certified public accountants and the
management’s responses thereto.

 

(g)          Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other material information, certificates,
reports, statements and completed forms, if any, which Limbach, Inc. or any of
its Subsidiaries (x) has furnished to the shareholders of Limbach, Inc. or the
U.S. Securities and Exchange Commission or (y) has delivered to the Senior Agent
or the holders of, or to any other agent or trustee with respect to,
Indebtedness of the Parent or any of its Subsidiaries in their capacity as such
a holder, agent or trustee to the extent that the aggregate principal amount of
such Indebtedness exceeds (or upon the utilization of any unused commitments may
exceed) $550,000.

 

(h)          Environmental Matters. Promptly upon, and in any event within five
(5) Business Days after any officer of any Loan Party obtains knowledge thereof,
notice of one or more of the following environmental matters which individually,
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect: (i) any violation of Environmental Law by, or notice of an Environmental
Claim against, any Loan Party or any of its Subsidiaries or any real property
owned or operated by any Loan Party or any of its Subsidiaries; (ii) any Release
or threatened Release of Hazardous Substances that occurs on or arises from any
real property owned or operated by any Loan Party or any of its Subsidiaries or
for which any Loan Party or any Subsidiary of any Loan Party is liable, in each
case that (x) is not in compliance with applicable Environmental Laws or
(y) could reasonably be expected to form the basis of an Environmental Claim
against any Loan Party or any of its Subsidiaries or any such real property;
(iii) any condition or occurrence on any real property owned or operated by any
Loan Party or any of its Subsidiaries that could reasonably be expected to cause
such real property to be subject to any restrictions on the ownership,
occupancy, use or transferability by any Loan Party or any of its Subsidiaries
of such real property under any Environmental Law; and (iv) any investigative,
removal or remedial actions to be taken in response to the actual or alleged
presence of any Hazardous Material on any real property owned or operated by any
Loan Party or any of its Subsidiaries, or by any Loan Party or any of its
Subsidiaries at any off-site location, to the extent required by any
Environmental Law or Governmental Authority. All such notices shall describe in
reasonable detail the nature of the claim, investigation, condition, occurrence
or removal or remedial action and such Loan Party’s or such Subsidiary’s
response thereto. In addition, the Loan Parties agree to provide the Lenders
with copies of all material written communications by the Loan Parties or any of
their Subsidiaries with any Person or Governmental Authority relating to any of
the matters set forth in clauses (i)-(iv) above, and such detailed reports
relating to any of the matters set forth in clauses (i)-(iv) above as may
reasonably be requested by the Agent or the Required Lenders.

 

 -41- 

 

 

(i)          Multiemployer Plans. Promptly after receipt by any Loan Party or
any member of the Controlled Group, (x) a copy of any “Statement of Business
Affairs” issued by any Multiemployer Plan to any Loan Party or any member of the
Controlled Group and (y) a copy of any “estimate of withdrawal liability”
received by any Loan Party or any member of its Controlled Group from any
Multiemployer Plan it has contributed to, which estimate shall be requested or
caused to be requested by the Loan Parties at any time withdrawal from any
Multiemployer Plan is contemplated by any Loan Party or any member of the
Controlled Group.

 

(j)          Monthly Board Reports. A copy of each “Monthly Board Report”
prepared for the board of directors of Parent and relating to key performance
indicators, which report shall be prepared and distributed no less than monthly,
promptly upon distribution of such report to the board of directors of Parent.

 

(k)          Other Information. From time to time, such other information or
documents (financial or otherwise) as the Agent or any Lender may reasonably
request.

 

For the avoidance of doubt, the reporting and delivery requirements of this
Section 6.1 shall not be deemed to be duplicative of the satisfaction of any of
the delivery requirements set forth in Section 6.28.

 

Section 6.2.          Inspections; Field Examinations. Each Loan Party will, and
will cause each of its Subsidiaries to, permit officers, representatives and
agents of the Agent or any Lender, to visit and inspect any Property of such
Loan Party or such Subsidiary, and to examine the financial records and
corporate books of such Loan Party or such Subsidiary, and discuss the affairs,
finances, and accounts of such Loan Party or such Subsidiary with its and their
Duly Authorized Officer and independent accountants, all at such reasonable
times as the Agent or any Lender may request, and with respect to the
independent accountants, after prior notice to the Borrower; provided that the
Borrower shall be permitted to attend any visit with the independent accountants
of the Loan Parties; provided, further, so long as no Default or Event of
Default exists, prior written notice of any such visit, inspection, or
examination shall be provided to the Borrower and such visit, inspection, or
examination shall be performed at reasonable times to be agreed to by the
Borrower, which agreement will not be unreasonably withheld. The Borrower shall
pay to the Agent for its own use and benefit reasonable charges for examinations
of the Borrower’s Property, financial records and corporate books performed by
the Agent or its agents or representatives in such customary per diem amounts
and related out-of-pocket costs and expenses as the Agent may from time to time
request (the Agent acknowledging and agreeing that such charges shall be
computed in the same manner as it at the time customarily uses for the
assessment of charges for similar examinations); provided, however, that in the
absence of any Default and Event of Default, the Borrower shall not be required
to pay the Agent for more than one such examination per calendar year; provided,
further, that if an Event of Default has occurred and is continuing, the Agent
shall be permitted to conduct inspections, audits and examinations as it
reasonably deems advisable at the reasonable cost and expense of the Borrower.
The Parent and the Borrower agree to pay (and shall cause each of their
Subsidiaries to pay) on demand all reasonable costs, expenses and fees incurred
by the Agent in connection with any inspections, examinations, or audits of any
of the Loan Parties performed by the Agent under this Section 6.2.

 

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Section 6.3.          Maintenance of Property and Insurance; Environmental
Matters. (a) Each Loan Party will, and will cause each of its Subsidiaries to,
(i) keep its Property, plant, and equipment in good repair, working order and
condition, normal wear and tear, casualty, and condemnation excepted, and shall
from time to time make all necessary and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto so that at all times
such Property, plant, and equipment are reasonably preserved and maintained and
(ii) maintain in full force and effect with financially sound and reputable
insurance companies insurance which provides substantially the same (or greater)
coverage and against at least such risks as is in accordance with industry
practice, and shall furnish to the Agent upon request full information as to the
insurance so carried.

 

(b)          Without limiting the generality of Section 6.3(a), each Loan Party
and its Subsidiaries shall: (i) materially comply with, and maintain all real
property owned or operated by any Loan Party or any of its Subsidiaries in
material compliance with, applicable Environmental Laws; (ii) obtain and
maintain in full force and effect all permits, licenses and approvals required
for its operations and the occupancy of its properties by Environmental Laws;
(iii) cure as soon as reasonably practicable any violation of applicable
Environmental Laws which individually or in the aggregate may reasonably be
expected to have a Material Adverse Effect; (iv) not, and shall not permit any
other Person to, own or operate on any of its properties any underground storage
tank, landfill, dump or hazardous waste treatment, storage or disposal facility
as defined pursuant to Environmental Laws; and (v) shall not use, generate,
treat, store, Release or dispose of Hazardous Materials at or on any real
property owned or operated by any Loan Party or any of its Subsidiaries except
in the ordinary course of its business and in compliance with all Environmental
Laws. Each Loan Party and its Subsidiaries shall conduct any investigation,
study, sampling and testing, abatement, cleanup, removal, remediation or other
response or preventative action necessary to remove, remediate, prevent, cleanup
or abate any Release or threatened Release of Hazardous Materials or any
migration or continuation thereof required by Environmental Laws.

 

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Section 6.4.          Compliance with Laws and Material Agreements. Each Loan
Party shall, and shall cause each of its Subsidiaries to, comply in all respects
with the requirements of all laws, rules, regulations, ordinances and orders of
any Governmental Authority applicable to such Loan Party or any of its
Subsidiaries’ Property or business operations, where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or result in a Lien upon any of its Property (other than
Permitted Liens). Each Loan Party shall, and shall cause each of its
Subsidiaries to, timely satisfy all assessments, fines, costs and penalties
imposed by any Governmental Authority against such Person or any Property of
such Person, where any such failure to pay, individually or in the aggregate,
would result in a Material Adverse Effect. Each Loan Party shall, and shall
cause each of its Subsidiaries to, comply with any and all agreements or
instruments evidencing Indebtedness and any other Material Agreement to which it
is a party or by which it is bound, where such default would result in a
Material Adverse Effect.

 

Section 6.5.          ERISA. Each Loan Party shall, and shall cause each member
of its Controlled Group to, promptly pay and discharge all obligations and
liabilities arising under ERISA of a character which if unpaid or unperformed
could reasonably be expected to have a Material Adverse Effect or result in a
Lien upon any of the Loan Party’s or any of its Subsidiary’s Property. Each Loan
Party shall, and shall cause each of its Subsidiaries to, promptly notify the
Agent and each Lender of the occurrence of any other ERISA Event that could
reasonably be expected to result in liability in excess of $825,000; provided,
however, that each Loan Party shall, and shall cause each of its Subsidiaries
to, promptly notify the Agent and each Lender of the occurrence of an event that
may reasonably be expected to result in a complete or partial withdrawal by the
Loan Party or any member of its Controlled Group from a Multiemployer Plan,
regardless of whether the resulting liability is reasonably expected to be in
excess of $825,000.

 

Section 6.6.          Payment of Taxes. Each Loan Party shall, and shall cause
each of its Subsidiaries to, pay and discharge, all Taxes imposed upon it or any
of its Property, before becoming delinquent and before any penalties accrue
thereon, unless and to the extent that the same are being contested in good
faith and by appropriate proceedings and as to which appropriate reserves have
been provided for in accordance with GAAP.

 

Section 6.7.          Preservation of Existence. Each Loan Party shall, and
shall cause each of its Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and,
except where the failure to do so would not reasonably be expected to have a
Material Adverse Effect, its franchises, bonds, authority to do business,
licenses, patents, trademarks, copyrights, contracts and other rights that are
necessary for the Loan Parties and their Subsidiaries to conduct their
respective businesses as presently conducted, except for such patents,
trademarks, copyrights, and other proprietary rights which, in the Loan Parties’
reasonable good faith determination, are no longer used, useful, or valuable to
their respective businesses; provided, however, that nothing in this Section 6.7
shall prevent, to the extent permitted by Section 6.13, sales of assets by the
Loan Parties or any of their Subsidiaries, the dissolution or liquidation of any
Subsidiary of any Loan Party, or the merger or consolidation between or among
the Subsidiaries of any Loan Party.

 

Section 6.8.          Contracts with Affiliates. No Loan Party shall, nor shall
it permit any of its Subsidiaries to, enter into any contract, agreement or
business arrangement with any of its Affiliates (other than Wholly-owned
Subsidiaries that are Loan Parties) on terms and conditions which are less
favorable to such Loan Party or such Subsidiary than would be usual and
customary in similar contracts, agreements or business arrangements between
Persons not affiliated with each other.

 

 -44- 

 

 

Section 6.9.          Restrictions or Changes and Amendments. No Loan Party
shall, nor shall it permit any of its Subsidiaries to, change its fiscal year or
fiscal quarters from its present basis or amend or change, or allow to be
amended or changed: (a) its Organization Documents in any way that could
reasonably be expected to have a Material Adverse Effect; provided that prior to
any amendment or modification of such Loan Party’s Organization Documents, the
Borrower shall cause such Loan Party to furnish a true, correct and complete
copy of such proposed amendment or modification to the Agent, or (b) any
Material Agreement in a manner that could reasonably be expected to have a
Material Adverse Effect.

 

Section 6.10.         Change in the Nature of Business. No Loan Party shall, nor
shall it permit any of its Subsidiaries to, engage in any business or activity
if as a result the general nature of the business of such Loan Party or any of
its Subsidiaries would be changed in any material respect from the general
nature of the business engaged in by it as of the Closing Date or a Related Line
of Business.

 

Section 6.11.         Indebtedness. No Loan Party shall, nor shall it permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, including liabilities under any Hedge Agreement, except:

 

(a)          the Obligations of the Loan Parties and their Subsidiaries owing to
the Agent and the Lenders (and their Affiliates);

 

(b)          Indebtedness owed pursuant to Hedge Agreements entered into in the
ordinary course of business and not for speculative purposes with Persons other
than Lenders (or their Affiliates);

 

(c)          intercompany Indebtedness among the Loan Parties to the extent
permitted by Section 6.14;

 

(d)          (i) Indebtedness consisting of Capitalized Lease Obligations of the
Loan Parties, and (ii) Indebtedness secured by a Lien that is (A) placed upon
fixed or capital assets, acquired, constructed or improved by the Loan Parties
so long as each such Lien shall only attach to the property to be acquired, and
the Indebtedness incurred shall not exceed one hundred percent (100%) of the
purchase price of the item or items purchased; provided that the aggregate
outstanding principal amount (using Capitalized Lease Obligations in lieu of
principal amount, in the case of any Capital Lease) of Indebtedness permitted by
this subpart (d) shall not exceed $5,500,000 in the aggregate at any one time
outstanding;

 

(e)          Guarantees made by the Parent of Indebtedness allowed under this
Section 6.11, provided that such guarantees are made in the ordinary course of
business;

 

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(f)          Senior Facility Debt in an aggregate principal amount not to exceed
the amount permitted by the Senior Subordination Agreement;

 

(g)          endorsement of items for deposit or collection of commercial paper
received in the ordinary course of business;

 

(h)          Indebtedness incurred under the Bonding Agreements;

 

(i)          Indebtedness under tax-favored or government-sponsored financing
transactions; provided that (x) the terms of such transactions and the Loan
Parties thereto have been approved by the Agent in its reasonable discretion and
(ii) the aggregate principal amount of such Indebtedness shall not exceed
$1,100,000 at any one time;

 

(j)          unsecured Indebtedness of the Loan Parties and their Subsidiaries
not otherwise permitted by this Section in an amount not to exceed $825,000 in
the aggregate at any one time outstanding; and

 

(k)          Indebtedness in respect of netting services, overdraft protections
and other like services, in each case incurred in the ordinary course of
business.

 

Section 6.12.         Liens. No Loan Party shall, nor shall it permit any of its
Subsidiaries to, create, incur or suffer to exist any Lien on any of its
Property; provided that the foregoing shall not prevent the following (the Liens
described below, the “Permitted Liens”):

 

(a)          inchoate Liens for the payment of Taxes which are not yet
delinquent or the payment of which is not required by Section 6.6;

 

(b)          Liens arising by statute in connection with worker’s compensation,
unemployment insurance, old age benefits, social security obligations, Taxes,
assessments, statutory obligations or other similar charges (other than Liens
arising under ERISA), good faith cash deposits in connection with bids, tenders,
contracts, or leases to which any Loan Party or any Subsidiary of any Loan Party
is a party or other cash deposits required to be made in the ordinary course of
business, provided in each case that the obligation is not for borrowed money
and that the obligation secured is not overdue or, if overdue, is being
contested in good faith by appropriate proceedings which prevent enforcement of
the matter under contest and for which adequate reserves have been established
in accordance with GAAP;

 

(c)          Liens in respect of property or assets imposed by law that were
incurred in the ordinary course of business, such as carriers’, suppliers’,
warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens
arising in the ordinary course of business, that do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Borrower or any
of its Subsidiaries and do not secure any Indebtedness;

 

 -46- 

 

 

(d)          Liens created by or pursuant to the Senior Credit Agreement and the
Senior Facility Loan Documents;

 

(e)          Liens on Property of any Loan Party or any Subsidiary of any Loan
Party created solely for the purpose of securing Indebtedness permitted by
Section 6.11(d), representing or incurred to finance the purchase price of
Property; provided that, no such Lien shall extend to or cover other Property of
such Loan Party or such Subsidiary other than the respective Property so
acquired, and the principal amount of indebtedness secured by any such Lien
shall at no time exceed the purchase price of such Property, as reduced by
repayments of principal thereon;

 

(f)          easements, permits, rights-of-way, encroachments, restrictions,
zoning or building codes or ordinances, other land use laws regulating the use
or occupancy of real property or the activities conducted thereon which are
imposed by any Governmental Authority and other similar encumbrances against
real property incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not and are not likely,
either individually or in the aggregate, to involve a substantial and prolonged
disruption of the business activities of any Loan Party or a Material Adverse
Effect;

 

(g)          Liens granted to the Bonding Company to secure the performance of
surety bonds in accordance with the terms of the Bonding Agreements; provided
that (i) such Liens are not perfected by the filing of a UCC Financing
Statement, and (ii) such Liens do not include cash deposits or the issuance of
letters of credit for the benefit of the Bonding Company, in each case, in
excess of $1,100,000 in the aggregate; provided that the Existing Letters of
Credit (as defined in the Senior Credit Agreement) shall be permitted hereunder
notwithstanding the foregoing limit of $1,100,000 in the aggregate in clause
(iii);

 

(h)          Liens arising from the rights of lessors under leases that are not
Capital Leases (including financing statements regarding Property subject to a
lease) not in violation of the requirements of this Agreement; provided that
such Liens are only in respect of the Property subject to, and secure only, the
respective lease (and any other lease with the same or an affiliated lessor);

 

(i)          Liens arising in connection with financing transactions permitted
by Section 6.11(i); provided that such Liens do not at any time encumber any
Property except that financed in such transactions;

 

(j)          Liens consisting of judgment or judicial attachment liens (other
than for the payment of Taxes) in respect of judgments, the existence of which
do not constitute an Event of Default; and

 

(k)          Liens in favor of collecting banks arising under Section 4-210 of
the UCC.

 

 -47- 

 

 

Section 6.13.         Consolidation, Merger, and Sale of Assets. No Loan Party
shall, nor shall it permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or merge or consolidate, or convey, sell, lease, or
otherwise dispose of all or any part of its Property, including any disposition
as part of any sale-leaseback transactions except that this Section shall not
prevent:

 

(a)          the sale and lease of inventory in the ordinary course of business;

 

(b)          the sale, transfer or other disposition of any tangible personal
property that, in the reasonable judgment of the Loan Parties or their
Subsidiaries, has become obsolete, or worn out, or is no longer used or useful
in the business of the Loan Parties and their Subsidiaries;

 

(c)          the sale, transfer, lease, or other disposition of Property of any
Loan Party to another Loan Party;

 

(d)          the merger (or dissolution) of any Loan Party with and into the
Borrower or any other Loan Party, provided that, in the case of any merger (or
dissolution) involving the Borrower, the Borrower is the legal entity surviving
the merger (or dissolution);

 

(e)          the disposition or sale of Cash Equivalents on consideration for
cash;

 

(f)          the sale of vehicles in the ordinary course of business that are
owned by the Loan Parties;

 

(g)          the disposition or sale of the Florida Property, provided that the
proceeds are used and applied as required by Section 2.8(b);

 

(h)          the sale, transfer, lease, or other disposition of Property of any
Loan Party or any Subsidiary of any Loan party (including any disposition of
Property as part of a sale and leaseback transaction) having an aggregate fair
market value of not more than $275,000 during any fiscal year of the Borrower;
and

 

(i)          dispositions resulting from an Event of Loss, provided that the
proceeds are used and applied as required by Section 2.8(b).

 

Section 6.14.         Advances, Investments, and Loans. No Loan Party shall, nor
shall it permit any of its Subsidiaries to, directly or indirectly, make an
Investment except that this Section shall not prevent:

 

(a)          receivables created in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms;

 

(b)          Investments in cash and Cash Equivalents; provided that the
aggregate amount of all investments in cash and Cash Equivalents not held in an
account with the Senior Agent or an account with another Senior Lender subject
to a control agreement in favor of the Senior Agent, in form and substance
reasonably acceptable to the Senior Agent, shall not exceed $110,000;

 

 -48- 

 

 

(c)          Investments (including debt obligations) (x) received in connection
with the bankruptcy or reorganization of suppliers and customers and (y) in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;

 

(d)          the Loan Parties’ existing Investments in their respective
Subsidiaries on the Closing Date, and Investments made from time to time in
other Loan Parties (other than the Parent);

 

(e)          intercompany advances made from time to time among the Loan Parties
in the ordinary course of business;

 

(f)          Permitted Acquisitions;

 

(g)          loans and advances to employees (i) for business-related travel
expenses, moving expenses costs of replacement homes, business machines or
supplies, automobiles and other similar expenses, in each case incurred in the
ordinary course of business and (ii) to finance the purchase of Ownership
Interests of Limbach, Inc. pursuant to that certain Omnibus Incentive Plan of
Limbach, Inc., provided that the aggregate outstanding amount of all such loans
and advances under this clause (g) shall not exceed $550,000 in the aggregate at
any one time;

 

(h)          workers compensation deposits, payment of any premiums on insurance
policies, if any, and other deposits made in the ordinary course of any Loan
Party’s business;

 

(i)          Investments in joint ventures of up to $1,100,000 in the aggregate
at any one time, so long as (A) any Indebtedness for borrowed money at any time
Guaranteed by any Loan Party on or after the date of such Investment is
permitted Indebtedness under Section 6.11 of this Agreement and no such
Indebtedness is secured by Liens on any of the Property of any Loan Party, (B)
the Borrower provides the Agent with reasonable notice of all Investments to be
made in joint ventures and provides any documents relating thereto reasonably
requested by the Agent, and (C) both before and after such Investments, no
Default or Event of Default exists hereunder; and

 

(j)          Other Investments in addition to those otherwise permitted by this
Section in an amount not to exceed $275,000 in the aggregate at any one time
outstanding.

  

Section 6.15.         Restricted Payments. No Loan Party shall, nor shall it
permit any of its Subsidiaries to, directly or indirectly, declare or make any
Restricted Payments; provided, however, that the foregoing shall not operate to
prevent:

 

 -49- 

 

 

(a)          the making of dividends or distributions by any Subsidiary to the
Borrower or by any Subsidiary to any other Loan Party (other than the Parent)
that is the parent entity of such Subsidiary;

 

(b)          the making of Tax Distributions to the Parent and the Parent may,
in turn, make Tax Distributions to Limbach, Inc.;

 

(c)          so long as no Event of Default or Default exists or would result
therefrom, the Borrower may purchase or redeem (or make distributions to
Limbach, Inc. to permit Limbach, Inc. to purchase or redeem) equity interests of
Limbach, Inc. held by employees upon the termination of such employees, pursuant
to that certain Omnibus Incentive Plan of Limbach, Inc., not to exceed $110,000
in any fiscal year of the Borrower or $550,000 in the aggregate; and

 

(d)          distributions to the Parent and the Parent may, in turn, make
distributions to Limbach, Inc., to pay (i) general administrative costs and
expenses in an aggregate amount not to exceed $1,000,000 in any fiscal year of
the Parent, (ii) customary indemnifications of officers and directors, and (iii)
customary directors’ fees.

 

Section 6.16.         Limitation on Restrictions. No Loan Party shall, nor shall
it permit any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any restriction on the
ability of any such Loan Party or to (a) pay dividends or make any other
distributions on any Ownership Interests owned by a Loan Party or any
Subsidiary, (b) pay or repay any Indebtedness owed to any Loan Party or any
Subsidiary, (c) make loans or advances to any Loan Party or any Subsidiary,
(d) transfer any of its Property to any Loan Party or any Subsidiary,
(e) encumber or pledge any of its assets to or for the benefit of the Agent, or
(f) guaranty the Guaranteed Obligations; provided that, the foregoing shall not
prevent restrictions contained in any Loan Document.

 

Section 6.17.         Limitation on Issuances of New Ownership Interests by
Subsidiaries. No Loan Party will permit any of its Subsidiaries to issue any new
Ownership Interests (including by way of sales of treasury stock); provided
that, notwithstanding the foregoing, (a) Subsidiaries shall be permitted to
issue new Ownership Interests in connection with their creation, so long as such
creation is in compliance with Section 6.18, (b) so long as no Change of Control
is caused thereby, the Loan Parties and their Subsidiaries shall be permitted to
issue Ownership Interests to effect a Permitted Acquisition and (c) the Loan
Parties and their Subsidiaries shall be permitted to issue new Ownership
Interests in connection with the exercise of stock options.

 

Section 6.18.         Limitation on the Creation of Subsidiaries.
Notwithstanding anything to the contrary contained in this Agreement, no Loan
Party will, nor will it permit any of its Subsidiaries to, establish, create or
acquire after the Closing Date any Subsidiary; provided that the Loan Parties
shall be permitted to establish or create Wholly-owned Subsidiaries so long as
at least thirty (30) days (or such shorter period agreed to by the Agent) prior
written notice thereof is given to the Agent, and the Loan Parties timely comply
with the requirements of Section 4 (at which time Schedule 5.10 shall be deemed
to include a reference to such Subsidiary).

 

 -50- 

 

  

Section 6.19.         [Reserved].

 

Section 6.20.         Financial Covenants.

 

(a)          Total Leverage Ratio. As of the last day of each fiscal quarter of
the Borrower, the Borrower and its Subsidiaries shall not permit the Total
Leverage Ratio to be greater than 3.75:1.00.

 

(b)          [Reserved].

 

(c)          Fixed Charge Coverage Ratio. As of the last day of each fiscal
quarter of the Borrower, the Borrower and its Subsidiaries shall maintain a
Fixed Charge Coverage Ratio of not less than 1.00:1.00.

 

(d)          Minimum Tangible Net Worth. The Loan Parties shall not permit the
Tangible Net Worth to be less than $7,200,000 (the “Minimum Tangible Net Worth”)
at any time from and including the Closing Date to the end of the fiscal quarter
ending December 31, 2016; provided that, as of January 1, 2017, and on January 1
of each fiscal year of the Parent thereafter, the Minimum Tangible Net Worth
shall increase by twenty-five percent (25%) of Net Income for the Parent’s
immediately prior fiscal year, to the extent such Net Income is a positive
amount (i.e. Minimum Tangible Net Worth shall not decrease on January 1 of any
fiscal year when the Net Income of the Parent’s immediately prior fiscal year is
less than zero ($0.00)).

 

(e)          Equity Cure.

 

(i)          Cash Equity Contribution Requirements. In the event the Borrower
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 Borrower, 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:

 

(A)         notice of the Borrower’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 Borrower 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,

 

 -51- 

 

 

(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)         subject to the Senior Subordination Agreement, the proceeds received
by the Borrower from all Specified Equity Contributions shall be promptly used
by the Borrower to prepay the Loans in the manner set forth in Section 2.8(d),
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 Borrower 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.

 

(ii)         Other Equity Cure Terms. Notwithstanding the foregoing, no single
Specified Equity Contribution shall exceed $1,000,000 and the Specified Equity
Contributions shall not exceed $2,500,000 in the aggregate during the term of
this Agreement. In the event that (A) no Event of Default exists other than that
arising due to the failure of the Loan Parties to comply with the financial
covenants set forth in Section 6.20(a), (b). (c) or (d), and (B) such Specified
Equity Contribution if fully consummated would be sufficient in accordance with
the terms hereof to cause the Borrower and its Subsidiaries to be in compliance
with Section 6.20(a), (b), (c) and/or (d), as applicable, as of the relevant
date of determination, then from and following the date of the occurrence of the
applicable Event of Default and until the date that is the earlier of
(x) fifteen (15) days subsequent to the date the applicable financial statements
are required to be delivered and (y) the date, if any, on which the Borrower
notifies the Agent in writing that such Specified Equity Contribution shall not
be exercised, then neither Agent nor any Lender shall exercise any remedies set
forth in Section 2.4(c) or Section 7 during such period solely as a result of
the existence of such Event of Default; provided, that in the event notice of
such Specified Equity Contribution is given but such Specified Equity
Contribution is not exercised, the Agent (acting at the request or with the
consent of the Required Lenders) may elect pursuant to Section 2.4(c) to have
the outstanding Obligations accrue interest at the default rates effective
retroactively from the date of the occurrence of the applicable Event of
Default.

 

Section 6.21.         Compliance with Sanctions Programs. (a) Each Loan Party
shall at all times comply with the requirements of all Sanctions Programs
applicable to such Loan Party and shall cause each of its Subsidiaries to comply
with the requirements of all Sanctions Programs applicable to such Subsidiary.

 

 -52- 

 

 

(b)          Each Loan Party shall provide the Agent and the Lenders any
information regarding such Loan Party, its Affiliates, and its Subsidiaries
necessary for the Agent and the Lenders to comply with all applicable Sanctions
Programs; subject however, in the case of Affiliates, to such Loan Party’s
ability to provide information applicable to them.

 

(c)          If any Loan Party obtains actual knowledge or receives any written
notice that such Loan Party, any of its officers or directors, any Affiliate, or
any Subsidiary is named on any then current Sanctions List (such occurrence, a
“Sanctions Event”), such Loan Party shall promptly (i) give written notice to
the Agent and the Lenders of such Sanctions Event, and (ii) comply with all
applicable laws with respect to such Sanctions Event (regardless of whether the
party included on the Sanctions List is located within the jurisdiction of the
United States of America), including the Sanctions Programs, and each Loan Party
hereby authorizes and consents to the Agent and the Lenders taking any and all
steps the Agent or the Lenders deem necessary, in their sole but reasonable
discretion, to avoid violation of all applicable laws with respect to any such
Sanctions Event, including the requirements of the Sanctions Programs (including
the freezing and/or blocking of assets and reporting such action to OFAC and/or
the U.S. Department of Treasury’s Office of Foreign Assets Control).

 

(d)          No Loan Party will use any proceeds of the Loans to finance or
otherwise fund, directly or indirectly, (i) any activity or business with or
related to any Sanctioned Person or any Sanctioned Country or (ii) in any other
manner that will result in a violation of any Sanctions Program by any Person
(including any Person participating in the Loans, whether as lender,
underwriter, advisor, investor, or otherwise).

 

Section 6.22.         Subordinated Debt. No Loan Party shall, nor shall it
permit any of its Subsidiaries to, (a) amend or modify any of the terms or
conditions relating to Subordinated Debt, (b) make any voluntary prepayment of
Subordinated Debt or effect any voluntary redemption thereof; provided, that the
Loan Parties shall be permitted to make a voluntary prepayment of Subordinated
Debt so long as (i) immediately prior to, and after giving pro forma effect to,
the voluntary prepayment, (A) the Total Leverage Ratio shall be no greater than
0.25 less than the most recently applicable Total Leverage Ratio required under
Section 6.20(a), (B) the Loan Parties are in compliance with the most recently
applicable covenants set forth in Sections 6.20(c) and (d), (C) no Default or
Event of Default shall exist, and (D) the Borrower has (x) Unused Revolving
Credit Commitments (as defined in the Senior Credit Agreement) plus unrestricted
cash and Cash Equivalents and (y) Borrowing Base Availability (as defined in the
Senior Credit Agreement) plus unrestricted cash and Cash Equivalents, in each
case, of at least $10,000,000, and (ii) the Borrower has delivered to the Agent
a compliance certificate in the form of Exhibit E attached hereto evidencing
compliance with the financial covenants as set forth above, or (c) make any
payment on account of Subordinated Debt, in each case of (a), (b) and (c), that
is prohibited under the terms of the applicable Subordination Agreement.
Notwithstanding the foregoing, the Loan Parties may agree to a decrease in the
interest rate applicable thereto or to a deferral of repayment of any of the
principal of or interest on the Subordinated Debt beyond the current due dates
therefor.

 

 -53- 

 

 

Section 6.23.         Anti-Layering. No Loan Party shall, nor shall it cause or
permit any of its Subsidiaries to, create, incur or otherwise permit to exist
any Indebtedness that is contractually subordinated in right of payment to any
Senior Facility Debt unless such Indebtedness is subordinate in right of payment
to the Obligations to at least the same extent as the Obligations are
subordinate in right of payment to such Senior Facility Debt. For the avoidance
of doubt, this provision shall not be deemed to permit any Indebtedness other
than permitted Indebtedness under Section 6.11 of this Agreement.

 

Section 6.24.         [Reserved].

 

Section 6.25.         Limitations on Parent. Parent shall not, directly or
indirectly, (a) other than with respect to its own Ownership Interests, enter
into or permit to exist any transaction (including the incurrence or assumption
of Indebtedness (other than this Agreement, the other Loan Documents, and
Indebtedness permitted by Section 6.11), any purchase, sale, lease or exchange
of any Property, or the rendering of any service) between itself and any other
Person or (b) engage in any material business or conduct any material activity
(including the making of any investment or payment other than payments permitted
hereunder), in each case, other than:

 

(i)          investments in the Borrower and Subsidiaries permitted hereunder,

 

(ii)         the performance of ministerial activities and payment of taxes and
administrative fees necessary for the maintenance of its existence and
compliance with applicable laws and legal, tax and accounting matters related
thereto,

 

(iii)        transactions or activities relating to its employees, directors and
officers,

 

(iv)        activities relating to the performance of obligations under the Loan
Documents,

 

(v)         the receipt and payment of Restricted Payments permitted under
Section 6.15,

 

(vi)        any other transaction or activity that Parent is permitted to take
under any Loan Document,

 

(vii)       the performance of its obligations with respect to the Loan
Documents,

 

(viii)      financing activities, including the issuance of securities, the
providing of guarantees, payment of dividends, and making contributions to the
capital of the Borrower, in each instance to the extent expressly permitted
hereby,

 

(ix)         holding any cash or property (but not operating any property of any
Loan Party or operating any business, except as otherwise permitted by this
Section),

 

(x)          providing indemnification to officers, managers and directors, and

 

 -54- 

 

 

(xi)         activities and contractual rights and obligations incidental and
reasonably related to the businesses or activities described in clauses (i)
through (x) of this Section 6.25.

 

Section 6.26.         Bonding Capacity. The Borrower and its Subsidiaries shall
(i) have available bonding capacity under one or more Bonding Agreements in an
amount sufficient to operate their respective businesses in the ordinary course,
and (ii) be in compliance in all material respects with all terms and conditions
set forth in each Bonding Agreement and shall not permit a default to occur
thereunder, except as permitted by Section 5.24(b) and to the extent such a
default would not constitute an Event of Default under Section 7.1(l). No Loan
Party shall modify any term of any Bonding Agreement such that the Property
subject to any Lien in favor of the Bonding Company attaches to any Property not
directly connected to the applicable Bond.

 

Section 6.27.         Use of Proceeds; Margin Stock. The Borrower shall use all
proceeds of the Loans solely for the purposes set forth in, or otherwise
permitted by, Section 5.7.

 

Section 6.28.         Board Observer. (a) Limbach, Inc. shall hold regular
meetings of its board of directors (or equivalent governing body) at least once
per fiscal quarter. So long as Alcentra holds at least 75% of the original
principal amount of the Loan advanced on the Closing Date, Alcentra shall be
entitled to designate one (1) observer to the board of directors (or equivalent
governing body) of Limbach, Inc. and each of its Subsidiaries, and any committee
thereof, which observer shall receive (at the same time and in the same manner
provided to the directors) notice of and copies of all materials provided to
directors in connection with, and shall be entitled to attend and participate
in, at the Loan Parties’ expense, all meetings of the board of directors (or
equivalent governing body) of Limbach, Inc. and each of its Subsidiaries, and
any committee thereof. Such observer shall also receive (at the same time and in
the same manner provided to the directors) notice of and copies of all materials
provided to the directors in connection with any actions to be taken by written
consent of the board of directors (or equivalent governing body) of Limbach,
Inc. and each of its Subsidiaries, and any committee thereof; provided that such
observer shall execute a customary confidentiality agreement on terms reasonably
satisfactory to the board of directors (or equivalent governing body) of
Limbach, Inc. relating to such observer’s attendance at such board meetings;
provided further that notwithstanding anything herein to the contrary, the board
of directors (or equivalent governing body) of Limbach, Inc. and each of its
Subsidiaries, and any committee thereof may exclude such observer from any
portion of such meeting, as determined in good faith, in order to preserve
attorney-client privilege or to avoid a conflict of interest where the
discussions in such meeting directly relate to matters pertaining to the Loans
as to which the interests of the Loan Parties and Alcentra are reasonably
expected to be adverse. The Loan Parties shall reimburse Alcentra for all
reasonable expenses (including all travel, meal and lodging expenses) incurred
by its observer in connection with attending any meetings described above.

 

Section 6.29.         Prohibition on Assignment of Senior Facility Debt. No Loan
Party shall consent to the assignment, sale or other transfer of the Senior
Facility Debt to Limbach, Inc. or any of its Affiliates.

 

 -55- 

 

 

Section 6.30.         Post-Closing Matters. The Loan Parties shall execute and
deliver the documents and complete the tasks expressed on Schedule 6.30 in each
instance within the time limits specified on such Schedule.

 

Section 7.          Events of Default and Remedies.

 

Section 7.1.          Events of Default. Any one or more of the following shall
constitute an “Event of Default” hereunder:

 

((i) default in the payment when due (whether at the stated maturity thereof or
at any other time provided for in this Agreement) of all or any part of the
principal of any Loan or (ii) default for a period of five (5) Business Days in
the payment when due of any interest, fee or any other Obligation payable
hereunder or under any other Loan Document;

 

(b)          default in the observance or performance of any covenant set forth
in Sections 6.1, 6.4, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16,
6.17, 6.18, 6.20, 6.21, 6.22, 6.23, 6.25, 6.26, 6.27, 6.28, 6.29 or 6.30;

 

(c)          default in the observance or performance of any other provision
hereof or of any other Loan Document which is not remedied within thirty
(30) days after the earlier of (i) the date on which such default shall first
become known to any officer of any Loan Party or (ii) written notice of such
default is given to the Borrower by the Agent;

 

(d)          any representation or warranty made herein or in any other Loan
Document or in any certificate delivered to the Agent or the Lenders pursuant
hereto or thereto or in connection with any transaction contemplated hereby or
thereby proves untrue in any material respect as of the date of the issuance or
making or deemed making thereof;

 

(e)          (i) any event occurs or condition exists (other than those
described in subsections (a) through (d) above) which is specified as an event
of default under any of the other Loan Documents (after the expiration of any
applicable cure or grace period), or (ii) any of the Loan Documents shall for
any reason not be or shall cease to be in full force and effect or is declared
to be null and void, (iii) any Loan party takes any action for the purpose of
terminating, repudiating or rescinding any Loan Document executed by it or any
of its obligations thereunder, or (iv) any Loan Party or any Subsidiary of a
Loan Party makes any payment on account of any Subordinated Debt which is
prohibited under the terms of any instrument subordinating such Subordinated
Debt to any Obligations, or any subordination provision in any document or
instrument (including, without limitation, any intercreditor or subordination
agreement) relating to any Subordinated Debt shall cease to be in full force and
effect, or any Person (including the holder of any Subordinated Debt) shall
contest in any manner the validity, binding nature or enforceability of any such
provision;

 

 -56- 

 

 

(f)           (i) any event shall occur or condition shall exist under the
Senior Facility Loan Documents the effect of which is to automatically
accelerate or cause the acceleration of the maturity of the Senior Facility
Debt, (ii) any default shall occur under any Indebtedness of any Loan Party
(other than the Obligations and the Senior Indebtedness) aggregating in excess
of $550,000, or under any indenture, agreement or other instrument under which
the same may be issued, and such default shall continue for a period of time
sufficient to permit the acceleration of the maturity of any such Indebtedness
(whether or not such maturity is in fact accelerated), or any such Indebtedness
shall not be paid when due (whether by demand, lapse of time, acceleration or
otherwise), in each case after giving effect to applicable grace or cure
periods, if any, (iii) any default shall occur under any Hedge Agreement of any
Loan Party with any Senior Lender or any Affiliate of a Senior Lender, or
(iv) any party to the Senior Subordination Agreement or to any other
Subordination Agreement breaches or violates, or attempts to terminate or
challenge the validity of, the Senior Subordination Agreement or such other
Subordination Agreement, or the Senior Subordination Agreement or such other
Subordination Agreement shall be invalid or unenforceable;

 

(g)          (i) any final judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, shall be entered or
filed against any Loan Party, or against any of its Property, in an aggregate
amount in excess of $550,000 (except to the extent fully and unconditionally
covered by insurance pursuant to which the insurer has accepted liability
therefor in writing and except to the extent fully and unconditionally covered
by an appeal bond, for which such Loan Party has established in accordance with
GAAP a cash or Cash Equivalent reserve in the amount of such judgment, writ or
warrant), and which remains undischarged, unvacated, unbonded or unstayed for a
period of thirty (30) days, or any action shall be legally taken by a judgment
creditor to attach or levy upon any Property of any Loan Party to enforce any
such judgment, or (ii) any Loan Party shall fail within thirty (30) days to
discharge one or more non-monetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
which judgments or orders, in any such case, are not stayed on appeal or
otherwise being appropriately contested in good faith by proper proceedings
diligently pursued;

 

(h)          the occurrence of (a) an ERISA Event with respect to a Plan or a
Multiemployer Plan that, individually or in the aggregate, has resulted in or
could reasonably be expected to result in liability in excess of $825,000,
provided that with respect to an ERISA Event of the type described in clause (i)
of the ERISA Event definition relating to a Multiemployer Plan being in
endangered or critical status, an Event of Default shall occur only if either
(i) in addition to the dollar amount set forth above in this clause (a), a Loan
Party or any member of its Controlled Group fails to timely satisfy a
requirement resulting from such status or (ii) the dollar amount set forth above
in this clause (a), measured for any one-year period, is exceeded, or (b) any
event that could reasonably be expected to result in the imposition of a Lien
under Section 430(k) of the Code or Section 303 or 4068 of ERISA on any assets
of a Loan Party or a Subsidiary of a Loan Party;

 

 -57- 

 

 

(i)          Limbach, Inc. (i) shall, within ninety (90) days after the Closing
Date (which ninety (90) day period may be extended by the Agent in its sole
discretion), fail to submit an application to be listed on the NASDAQ Capital
Market or (ii) ceases to have its securities registered with the Securities and
Exchange Commission pursuant to Section 12(b) of the Securities and Exchange Act
of 1934;

 

(j)          any Loan Party shall (i) have entered involuntarily against it an
order for relief under the United States Bankruptcy Code, as amended, (ii) not
pay, or admit in writing its inability to pay, its debts generally as they
become due, (iii) make an assignment for the benefit of creditors, (iv) apply
for, seek, consent to or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered against it
an order for relief under the United States Bankruptcy Code to adjudicate it
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any Debtor
Relief Law or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vi) take any action in
furtherance of any matter described in parts (i) through (v) above, or
(vii) fail to contest in good faith any appointment or proceeding described in
Section 7.1(k);

 

(k)          a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for any Loan Party, or any substantial part of any
of its Property, or a proceeding described in Section 7.1(j)(v) shall be
instituted against any Loan Party, and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of sixty
(60) days;

 

(l)          With respect to the Bonding Agreements:

 

(i) the Bonding Company for any reason ceases to issue bonds, undertakings or
instruments of guaranty and the amount of such reduction in bonding capacity
exceeds $110,000,000 and the Borrower and its Subsidiaries shall fail to cause
another Person reasonably acceptable to the Agent (provided that any such Person
shall be deemed to be acceptable if its bonds, undertakings or instruments of
guaranty are accepted by contract providers for the Borrower and its
Subsidiaries) to issue bonds, undertakings or instruments of guaranty pursuant
to a Required Bonding Facility within fifteen (15) days of the date that the
Bonding Company ceased to issue bonds, undertakings or instruments of guaranty;
or

 

(ii) (A) at any time, the Bonding Company for the Borrower or any of its
Subsidiaries shall violate any term of the Surety Subordination Agreement, which
violation would adversely affect the rights or interests of the Agent or the
Lenders under the Loan Documents and such violation shall continue for a period
of five (5) Business Days after the Agent’s delivery of written notice thereof
to the Bonding Company and the Borrower; or

 

 -58- 

 

 

(iii) the Borrower or any of its Subsidiaries defaults in the payment when due
of any amount due under any Bonding Agreement or breaches or defaults with
respect to any other term of any Bonding Agreement and (x) such failure
continues unremedied for a period of five (5) Business Days or (y) if the effect
of such failure to pay, default or breach is to cause the Bonding Company to
take possession of the work under any of the bonded contracts of the Borrower or
any of its Subsidiaries and value of the contract or project that has been taken
over by the Bonding Company exceeds $550,000 (as determined by the Agent in its
reasonable judgment); or

 

(iv) the Borrower or any Subsidiary breaches or defaults with respect to any
term under any of the bonded contracts of the Borrower or such Subsidiary, if
the effect of such default or breach is to cause the Bonding Company to take
possession of the work under such bonded contract and value of the contract or
project that has been taken over by the Bonding Company exceeds $550,000 (as
determined by the Agent in its reasonable judgment);

 

(m)          a notice of Lien, levy or assessment (other than with respect to a
permitted Lien) is filed or recorded with respect to any of the assets of the
Parent or any of its Subsidiaries by the United States, or any department,
agency or instrumentality thereof, or by any state, county, municipality or
other governmental agency or any taxes or debts owing at any time or times
hereafter to any one or more of them become a Lien (other than a permitted
Lien), upon any of the assets of the Parent or any of its Subsidiaries, in each
case, other than a Lien permitted under Section 6.12);

 

(n)          the Parent or any of its Subsidiaries is enjoined, restrained, or
in any way prevented by the order of any court or any administrative or
regulatory agency from conducting all or any material part of its business
affairs;

 

(o)          there shall be instituted in any court criminal proceedings against
the Parent or any of its Subsidiaries or the Parent or any of its Subsidiaries
shall be indicted for any crime, in either case, for which the forfeiture of
greater than five percent (5.00%) of the consolidated assets of the Loan Parties
is a reasonably likely penalty; or

 

(p)          any Loan Party shall be subject to suspension or debarment
proceedings by the government of the United States, or any department, agency or
instrumentality thereof.

 

Section 7.2.          Non-Bankruptcy Defaults. When any Event of Default exists
other than those described in subsection (j) or (k) of Section 7.1, the Agent
shall, by written notice to the Borrower, if so directed by the Required
Lenders, declare the principal of and the accrued interest on all outstanding
Loans to be forthwith due and payable and thereupon all outstanding Loans,
including both principal and interest thereon, shall be and become immediately
due and payable together with all other amounts payable under the Loan Documents
without further demand, presentment, protest or notice of any kind. The Agent,
after giving notice to the Borrower pursuant to Section 7.1(c) or this
Section 7.2, shall also promptly send a copy of such notice to the other
Lenders, but the failure to do so shall not impair or annul the effect of such
notice.

 

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Section 7.3.          Bankruptcy Defaults. When any Event of Default described
in subsections (j) or (k) of Section 7.1 exists, then all outstanding
Obligations shall immediately and automatically become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind (each of which is hereby waived by the
Borrower).

 

Section 7.4.          [Reserved].

 

Section 7.5.          Notice of Default. The Agent shall give notice to the
Borrower under Section 7.1(c) promptly upon being requested to do so by any
Lender and shall thereupon notify all the Lenders thereof.

 

Section 8.          Change in Circumstances and Contingencies.

 

Section 8.1.          [Reserved].

 

Section 8.2.          [Reserved].

 

Section 8.3.          [Reserved].

 

Section 8.4.          Increased Costs. (a) Increased Costs Generally. If any
Change in Law shall:

 

(i)          impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender;

 

(ii)         subject any Recipient to any Taxes (other than (A) Indemnified
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto; or

 

(iii)        impose on any Lender any other condition, cost or expense (other
than Taxes) affecting this Agreement or Loans made by such Lender or
participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan or of maintaining its obligation to make any such Loan, or
to reduce the amount of any sum received or receivable by such Lender or other
Recipient hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or other Recipient, the Borrower will pay to such
Lender or other Recipient, as the case may be, such additional amount or amounts
as will compensate such Lender or other Recipient, as the case may be, for such
additional costs incurred or reduction suffered.

 

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(b)          Capital Requirements. If any Lender determines that any Change in
Law affecting such Lender or any lending office of such Lender or such Lender’s
holding company, if any, regarding capital or liquidity requirements, has or
would have the effect of reducing the rate of return on such Lender’s capital or
on the capital of such Lender’s holding company, if any, as a consequence of
this Agreement or the Loans made by such Lender to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender or such Lender’s or holding company for any such
reduction suffered.

 

(c)          Certificates for Reimbursement. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in Section 8.4(a) or (b) above which
shall include the basis for and calculation of such requested compensation and
delivered to the Borrower, shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within ten (10) Business Days after receipt thereof.

 

(d)          Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than nine months prior to
the date that such Lender notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions, and of such Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

 

Section 9.          The Agent.

 

Section 9.1.          Appointment and Authorization of Agent. Each Lender hereby
appoints Alcentra Capital Corporation, a Maryland corporation, to act on its
behalf as the Agent under the Loan Documents and authorizes the Agent to take
such action as Agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this
Section 9 are solely for the benefit of the Agent and the Lenders, and neither
the Borrower nor any other Loan Party shall have rights as a third-party
beneficiary of any of such provisions. It is understood and agreed that the use
of the term “agent” in this Agreement or in any other Loan Document (or any
other similar term) with reference to the Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead such term is used as a matter of market
custom, and is intended to create or reflect only an administrative relationship
between contracting parties.

 

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Section 9.2.          Agent and Its Affiliates. The Agent shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise or refrain from exercising such rights and powers as though it were not
the Agent, and the Agent and its Affiliates may accept deposits from, lend money
to, own securities of, act as the financial advisor or in any other advisory
capacity for, and generally engage in any kind of banking, trust, financial
advisory, or other business with any Loan Party or any Affiliate of any Loan
Party as if it were not the Agent under the Loan Documents and without any duty
to account therefor to the Lenders. The terms “Lender” and “Lenders”, unless
otherwise expressly indicated or unless the context otherwise clearly requires,
includes the Agent in its individual capacity as a Lender.

 

Section 9.3.          Exculpatory Provisions. (a) The Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents, and its duties hereunder shall be administrative in nature.
Without limiting the generality of the foregoing, the Agent and its Related
Parties:

 

(i)          shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing;

 

(ii)         shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the Agent is
required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents); provided that the Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel,
may expose the Agent to liability or that is contrary to any Loan Document or
any Legal Requirement, including for the avoidance of doubt any action that may
be in violation of the automatic stay under any Debtor Relief Law, and the Agent
shall in all cases be fully justified in failing or refusing to act hereunder or
under any other Loan Document unless it first receives any further assurances of
its indemnification from the Lenders that it may require, including prepayment
of any related expenses and any other protection it requires against any and all
costs, expense, and liability which may be incurred by it by reason of taking or
continuing to take any such action; and

 

(iii)        shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any Loan Party or any of its
Affiliates that is communicated to or obtained by the Person serving as the
Agent or any of its Affiliates in any capacity.

 

(b)          Any instructions of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Section 10.10) shall be binding upon all the Lenders. Neither the Agent nor any
of its Related Parties shall be liable for any action taken or not taken by the
Agent (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Section 10.10), or (ii) in the absence of its own gross negligence
or willful misconduct as determined by a court of competent jurisdiction by
final and nonappealable judgment. In all cases in which the Loan Documents do
not require the Agent to take specific action, the Agent shall be fully
justified in using its discretion in failing to take or in taking any action
thereunder. The Agent shall be entitled to assume that no Default or Event of
Default exists, and shall be deemed not to have knowledge of any Default or
Event of Default, unless and until notice describing such Default is given to
the Agent in writing by the Borrower or a Lender. If the Agent receives from any
Loan Party a written notice of an Event of Default pursuant to Section 6.1, the
Agent shall promptly give each of the Lenders written notice thereof.

 

 -62- 

 

 

(c)          Neither the Agent nor any of its Related Parties shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any
other Loan Document, or the advancing of the Loans, (ii) the contents of any
certificate, report or other document delivered under this Agreement or any
other Loan Documents or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein or the occurrence of any Default or Event
of Default, (iv) the validity, enforceability, effectiveness, genuineness,
value, worth, or collectability of this Agreement, any other Loan Document or
any other agreement, instrument, document or writing furnished in connection
with any Loan Document, or (v) the satisfaction of any condition set forth in
Section 3 or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Agent; and the Agent makes no representation of
any kind or character with respect to any such matter mentioned in this
sentence.

 

Section 9.4.          Reliance by Agent. The Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan that
by its terms must be fulfilled to the satisfaction of a Lender, the Agent may
presume that such condition is satisfactory to such Lender unless the Agent
shall have received notice to the contrary from such Lender prior to the making
of such Loan. The Agent may consult with legal counsel (who may be counsel for
the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts. The Agent may treat the
payee of any Note or any Loan as the holder thereof until written notice of
transfer shall have been filed with the Agent signed by such payee in form
satisfactory to the Agent.

 

Section 9.5.          Delegation of Duties. The Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the Agent. The
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Section 9 shall apply to any such sub-agent and
to the Related Parties of the Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the Facilities
as well as activities as Agent. The Agent shall not be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of
competent jurisdiction determines in a final and nonappealable judgment that the
Agent acted with gross negligence or willful misconduct in the selection of such
sub-agents.

 

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Section 9.6.          Non-Reliance on Agent and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender or
any of their Related Parties and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.

 

Section 9.7.          Resignation of Agent and Successor Agent. (a) The Agent
may at any time give notice of its resignation to the Lenders and the Borrower.
Upon receipt of any such notice of resignation, the Required Lenders shall have
the right, in consultation with the Borrower, to appoint a successor and, so
long as no Event of Default shall have occurred and be continuing, such
appointment shall be within the Borrower’s consent (which shall not be
unreasonably withheld). If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Agent gives notice of its resignation (or such
earlier day as shall be agreed by the Required Lenders) (the “Resignation
Effective Date”), then the retiring Agent may (but shall not be obligated to),
on behalf of the Lenders, appoint a successor Agent meeting the qualifications
set forth above. Whether or not a successor has been appointed, such resignation
shall become effective in accordance with such notice on the Resignation
Effective Date.

 

(b)          [Reserved].

 

(c)          With effect from the Resignation Effective Date (1) the retiring or
removed Agent shall be discharged from its duties and obligations hereunder and
under the other Loan Documents (except that in the case of any collateral
security held by the Agent on behalf of the Lenders under any of the Loan
Documents, the retiring or removed Agent shall continue to hold such collateral
security until such time as a successor Agent is appointed) and (2) except for
any indemnity payments owed to the retiring or removed Agent, all payments,
communications and determinations provided to be made by, to or through the
Agent shall instead be made by or to each Lender directly, until such time, if
any, as the Required Lenders appoint a successor Agent as provided for above.
Upon the acceptance of a successor’s appointment as Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring or removed Agent (other than any rights to
indemnity payments owed to the retiring or removed Agent), and the retiring or
removed Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents. The fees payable by the Borrower to
a successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the retiring or
removed Agent’s resignation or removal hereunder and under the other Loan
Documents, the provisions of this Section 9 and Section 10.12 shall continue in
effect for the benefit of such retiring or removed Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring or removed Agent was acting as Agent.

 

 -64- 

 

 

Section 9.8.          [Reserved].

 

Section 9.9.          [Reserved].

 

Section 9.10.         No Other Duties; Designation of Additional Agents. The
Agent shall have the continuing right, for purposes hereof, at any time and from
time to time to designate one or more of the Lenders (and/or its or their
Affiliates) as “syndication agents,” “documentation agents,” “arrangers” or
other designations for purposes hereto, but such designation shall have no
substantive effect, and such Lenders and their Affiliates shall have no
additional powers, duties or responsibilities as a result thereof; provided that
if at any time there is no Person acting as Agent hereunder and under the other
Loan Documents, then (i) the Required Lenders shall have the rights otherwise
given to the Agent pursuant to this Section 9 and (ii) subject to Section 10.7,
any Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.

 

Section 9.11.         Authorization to Enter into, and Enforcement of the
Guaranty. The Lenders irrevocably authorize the Agent to execute and deliver the
Senior Subordination Agreement, the Surety Subordination Agreement, each
Subordination Agreement and each Guaranty Agreement on their behalf and on
behalf of each of their Affiliates and to take such action and exercise such
powers under the Senior Subordination Agreement, the Surety Subordination
Agreement, any Subordination Agreement or any Guaranty Agreement as the Agent
considers appropriate, provided the Agent shall not amend the Senior
Subordination Agreement, the Surety Subordination Agreement, any Subordination
Agreement or any Guaranty Agreement unless such amendment is agreed to in
writing by the Required Lenders. Each Lender acknowledges and agrees that it
will be bound by the terms and conditions of the Senior Subordination Agreement,
the Surety Subordination Agreement, each Subordination Agreement and each
Guaranty Agreement upon the execution and delivery thereof by the Agent. Except
as otherwise specifically provided for herein, no Lender (or its Affiliates)
other than the Agent shall have the right to institute any suit, action or
proceeding in equity or at law for the execution of any trust or power in
respect of any Guaranty Agreement or for the appointment of a receiver or for
the enforcement of any other remedy under any Guaranty Agreement.

 

Section 9.12.         Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law, the Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Agent shall have
made any demand on the Borrower) shall be entitled and empowered (but not
obligated), by intervention in such proceeding or otherwise:

 

(a)          to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Agent and their respective agents and counsel and all
other amounts due the Lenders and the Agent under Sections 2.13 and 10.12(a))
allowed in such judicial proceeding; and

 

 -65- 

 

 

(b)          to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Agent and, in the event that the Agent
shall consent to the making of such payments directly to the Lenders, to pay to
the Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Agent and its agents and counsel, and any
other amounts due the Agent under Sections 2.13 and 10.12(a). Nothing contained
herein shall be deemed to authorize the Agent to authorize or consent to or
accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender
or to authorize the Agent to vote in respect of the claim of any Lender in any
such proceeding.

 

Section 9.13.         Guaranty Matters. The Lenders irrevocably authorize the
Agent, at its option and in its discretion, to release any Guarantor from its
obligations under its Guaranty Agreement if such Person ceases to be a Loan
Party as a result of a transaction permitted under the Loan Documents. Upon
request by the Agent at any time, the Required Lenders will confirm in writing
the Agent’s authority to release any Guarantor from its obligations under its
Guaranty Agreement pursuant to this Section 9.13.

 

Section 10.         Miscellaneous.

 

Section 10.1.          Taxes. (a) FATCA. For purposes of this Section 10.1, the
term “applicable law” includes FATCA.

 

(b)          Payments Free of Taxes. Any and all payments by or on account of
any obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

 -66- 

 

 

(c)          Payment of Other Taxes by the Loan Parties. Each Loan Party shall
timely pay to the relevant Governmental Authority in accordance with applicable
law, or at the option of the Agent timely reimburse it for the payment of, any
Other Taxes.

 

(d)          Indemnification by the Loan Parties. The Loan Parties shall jointly
and severally indemnify each Recipient, within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Agent), or by the Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(e)          Indemnification by the Lenders. Each Lender shall severally
indemnify the Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Loan Parties have not already indemnified the Agent for such Indemnified Taxes
and without limiting the obligation of the Loan Parties to do so), (ii) any
Taxes attributable to such Lender’s failure to comply with the provisions of
Section 10.9(d) relating to the maintenance of a Participant Register and (iii)
any Excluded Taxes attributable to such Lender, in each case, that are payable
or paid by the Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to any Lender by the Agent shall be conclusive absent manifest error. Each
Lender hereby authorizes the Agent to set off and apply any and all amounts at
any time owing to such Lender under any Loan Document or otherwise payable by
the Agent to the Lender from any other source against any amount due to the
Agent under this Section 10.1(e).

 

(f)          Evidence of Payments. As soon as practicable after any payment of
Taxes by any Loan Party to a Governmental Authority pursuant to this Section
10.1, such Loan Party shall deliver to the Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Agent.

 

(g)          Status of Lenders. (i) Any Lender that is entitled to an exemption
from or reduction of withholding Tax with respect to payments made under any
Loan Document shall deliver to the Borrower and the Agent, at the time or times
reasonably requested by the Borrower or the Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the Agent as will
permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Borrower or
the Agent, shall deliver such other documentation prescribed by applicable law
or reasonably requested by the Borrower or the Agent as will enable the Borrower
or the Agent to determine whether or not such Lender is subject to backup
withholding or information reporting requirements. Notwithstanding anything to
the contrary in the preceding two sentences, the completion, execution and
submission of such documentation (other than such documentation set forth in
Section 10.1(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

 

 -67- 

 

 

(ii)         Without limiting the generality of the foregoing,

 

(A)         any Lender that is a U.S. Person shall deliver to the Borrower and
the Agent on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the reasonable request of
the Borrower or the Agent), executed originals of IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding tax;

 

(B)         any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), whichever of the following is
applicable:

 

(i)          in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or
W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Loan Document,
IRS Form W-8BEN or W-8BEN-E, as applicable, establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “business profits” or
“other income” article of such tax treaty;

 

(ii)         executed originals of IRS Form W-8ECI;

 

(iii)        in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate in form reasonably acceptable to the Agent representing that such
Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)
executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable; or

 

(iv)         to the extent a Foreign Lender is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W-8BEN or W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate in form
reasonably acceptable to the Agent, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate in form reasonably
acceptable to the Agent on behalf of each such direct and indirect partner;

 

 -68- 

 

 

(C)          any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to the Borrower and the Agent (in such number of copies as shall
be requested by the recipient) on or prior to the date on which such Foreign
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of the Borrower or the Agent), executed originals of
any other form prescribed by applicable law as a basis for claiming exemption
from or a reduction in U.S. federal withholding Tax, duly completed, together
with such supplementary documentation as may be prescribed by applicable law to
permit the Borrower or the Agent to determine the withholding or deduction
required to be made; and

 

(D)         if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Agent such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Borrower or the Agent as may be
necessary for the Borrower and the Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Agent in writing
of its legal inability to do so.

 

(h)          Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 10.1 (including by
the payment of additional amounts pursuant to this Section 10.1), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out of pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this Section 10.1(h) (plus
any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this Section 10.1(h), in no event will the indemnified party be required to
pay any amount to an indemnifying party pursuant to this Section 10.1(h) the
payment of which would place the indemnified party in a less favorable net
after-Tax position than the indemnified party would have been in if the Tax
subject to indemnification had not been deducted, withheld, or otherwise imposed
and the indemnification payments or additional amounts giving rise to such
refund had never been paid. This Section 10.1(h) shall not be construed to
require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

 -69- 

 

 

(i)          Required Elections. In the event that the Borrower is classified as
a partnership for federal income tax purposes, or any taxable years for which
Sections 6221 through 6241 of the Code apply to the Borrower, the partnership
representative shall, to the extent eligible, make the election under Section
6221(b) of the Code with respect to the Borrower and take any other action such
as disclosures and notifications necessary to effectuate such election. If the
election described in the preceding sentence is not available, to the extent
applicable, the partnership representative shall make the election under Section
6226(a) of the Code with respect to the Borrower and take any other action such
as filings, disclosures and notifications necessary to effectuate such election.

 

(j)          Survival. Each party’s obligations under this Section 10.1 shall
survive the resignation or replacement of the Agent or any assignment of rights
by, or the replacement of, a Lender and the repayment, satisfaction or discharge
of all obligations under any Loan Document.

 

Section 10.2.          Mitigation Obligations; Replacement of Lenders. (a)
Designation of a Different Lending Office. If any Lender requests compensation
under Section 8.4, or requires the Borrower to pay any Indemnified Taxes or
additional amounts to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 10.1, then such Lender shall (at the request
of the Borrower) use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 8.4 or Section 10.1, as the case
may be, in the future, and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b)          Replacement of Lenders. If any Lender requests compensation under
Section 8.4, or if the Borrower is required to pay any Indemnified Taxes or
additional amounts to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 10.1 and, in each case, such Lender has
declined or is unable to designate a different lending office in accordance with
Section 10.2(a), or if any Lender is a Non-Consenting Lender, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by,
Section 10.9(b)), all of its interests, rights (other than its existing rights
to payments pursuant to Section 8.4 or Section 10.1) and obligations under this
Agreement and the related Loan Documents to an Eligible Assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that:

 

 -70- 

 

 

(i)          the Borrower shall have paid to the Agent the assignment fee (if
any) specified in Section 10.9(b)(iv);

 

(ii)         such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts);

 

(iii)        in the case of any such assignment resulting from a claim for
compensation under Section 8.4 or payments required to be made pursuant to
Section 10.1 such assignment will result in a reduction in such compensation or
payments thereafter;

 

(iv)        such assignment does not conflict with applicable law; and

 

(v)         in the case of any assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable Eligible Assignee shall have consented to
the applicable amendment, waiver or consent.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

Section 10.3.          No Waiver, Cumulative Remedies. No delay or failure on
the part of the Agent or any Lender or on the part of the holder or holders of
any of the Obligations in the exercise of any power or right under any Loan
Document shall operate as a waiver thereof or as an acquiescence in any default,
nor shall any single or partial exercise of any power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
The rights and remedies hereunder of the Agent, the Lenders and of the holder or
holders of any of the Obligations are cumulative to, and not exclusive of, any
rights or remedies which any of them would otherwise have.

 

Section 10.4.          Non-Business Days. If the payment of any obligation or
the performance of any covenant, duty or obligation hereunder becomes due and
payable on a day which is not a Business Day, the due date of such payment or
performance shall be extended to the next succeeding Business Day on which date
such payment or performance shall be due and payable. In the case of any payment
of principal falling due on a day which is not a Business Day, interest on such
principal amount shall continue to accrue during such extension at the rate per
annum then in effect, which accrued amount shall be due and payable on the next
scheduled date for the payment of interest.

 

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Section 10.5.          Survival of Representations. All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any
Obligations (other than contingent obligations not due and owing) remain unpaid
hereunder.

 

Section 10.6.          Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans, including, but not
limited to, Sections 8.1, 8.4, 10.4 and 10.13, shall survive the termination of
this Agreement and the other Loan Documents and the payment of the Obligations
(other than contingent obligations not due and owing).

 

Section 10.7.          Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or other Obligations
hereunder resulting in such Lender receiving payment of a proportion of the
aggregate amount of its Loans and accrued interest thereon or other such
Obligations greater than its pro rata share thereof as provided herein, then the
Lender receiving such greater proportion shall (a) notify the Agent of such
fact, and (b) purchase (for cash at face value) participations in the Loans and
such other obligations of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them;
provided that:

 

(i)          if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(ii)         the provisions of this Section 10.7 shall not be construed to apply
to (x) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement, or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to any Loan Party (as to which
the provisions of this Section 10.7 shall apply).

 

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of each Loan Party in the
amount of such participation.

 

Section 10.8.          Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in Section
10.8(b) below), all notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile or electronic mail
as follows:

 

 -72- 

 

 

(i)if to any Loan Party:

 

Limbach Facility Services LLC

13261 Mid Atlantic Blvd

Laurel, MD 20708

  Attention: John T. Jordan, Jr.   Telephone: (301) 623-4799   Facsimile: (412)
359-2287   Email: john.jordan@limbachinc.com

 

with a copy (which shall not constitute notice to):

 

Honigman Miller Schwartz and Cohn LLP

2290 First National Building

660 Woodward Avenue

Detroit, MI 48226

Attention:Joshua Opperer

Telephone:(313) 465-7456

Facsimile:(313) 465-7457

 

(ii)if to the Agent:

 

Alcentra Capital Corporation

200 Park Avenue, 7th Floor

New York, NY 10166

Attention:Branko Krmpotic

Telephone:(212) 922-8071

Email:branko.krmpotic@alcentra.com; mmreporting@alcentra.com

 

with a copy (which shall not constitute notice to):

 

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.

Wells Fargo Capitol Center

150 Fayetteville Street, Suite 2300

P.O. Box 2611

Raleigh, NC 27602

Attention:Anne E. Croteau

Telephone:(919) 821-6658

Email:acroteau@smithlaw.com

 

(iii)if to a Lender, to it at its address (or facsimile number) set forth in its
Administrative Questionnaire.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications, to the extent
provided in Section 10.8(b) below, shall be effective as provided in said
Section 10.8(b).

 

 -73- 

 

 

(b)        Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Agent. The Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

 

Unless the Agent otherwise prescribes, (i) notices and other communications sent
to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient, at its e-mail address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefore, provided that, for both clauses (i)
and (ii) above, if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

 

(c)          Change of Address, Etc. Any party hereto may change its address or
facsimile number for notices and other communications hereunder by written
notice to the other parties hereto. In addition, each Lender agrees to notify
the Agent from time to time to ensure that the Agent has on record (i) an
effective address, contact name, telephone number, facsimile number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

 

Section 10.9.          Successors and Assigns; Assignments and
Participations.  (a)  Successors and Assigns Generally. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
under any Loan Document without the prior written consent of the Agent and each
Lender, and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section 10.9(b) below, (ii) by way of participation in accordance
with the provisions of Section 10.9(d) below or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of Section 10.9(f)
below (and any other attempted assignment or transfer by any party hereto shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in Section 10.9(d) below and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

 -74- 

 

 

(b)          Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of the Loans at the time owing to
it); provided that any such assignment shall be subject to the following
conditions:

 

(i)          Minimum Amounts.

 

(A)         In the case of an assignment of the entire remaining amount of the
Loans at the time owing to the assigning Lender or contemporaneous assignments
to related Approved Funds that equal at least the amount specified in
Section 10.9(b)(i)(B) below in the aggregate or in the case of an assignment to
a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need
be assigned;

 

(B)          In any case of an assignment not described in Section 10.9(b)(i)(A)
above, 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 Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than $1,000,000, unless each of the 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).

 

(ii)         Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan assigned.

 

(iii)        Required Consents. No consent shall be required for any assignment
except to the extent required by Section 10.9(b)(i)(B) above and, in addition:

 

(A)         the consent of the Borrower (such consent not to be unreasonably
withheld or delayed) shall be required unless (x) an Event of Default has
occurred and is continuing at the time of such assignment, or (y) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;
provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the Agent within
five (5) Business Days after having received notice thereof; and

 

(B)         the consent of the Agent (such consent not to be unreasonably
withheld, delayed, or conditioned) shall be required for assignments to a Person
who is not a Lender, an Affiliate of a Lender or an Approved Fund;

 

(iv)        Assignment and Assumption. The parties to each assignment shall
execute and deliver to the Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; provided that the Agent may, in its
sole discretion, elect to waive such processing and recordation fee in the case
of any assignment. The Eligible Assignee, if it shall not be a Lender, an
Affiliate of a Lender, or an Approved Fund with respect to a Lender, shall
deliver to the Agent an Administrative Questionnaire.

 

 -75- 

 

 

(v)        No Assignment to Certain Persons. No Lender shall assign any of its
rights or obligations hereunder to the Borrower or any of the Borrower’s
Affiliates or Subsidiaries.

 

(vi)        No Assignment to Natural Persons. No such assignment shall be made
to a natural person.

 

Subject to acceptance and recording thereof by the Agent pursuant to
Section 10.9(c), from and after the effective date specified in each Assignment
and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 8.1, 8.4, 10.1 and 10.12 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 10.9(d) below.

 

(c)          Register. The Agent, acting solely for this purpose as an agent of
the Borrower (such agency being solely for tax purposes), shall maintain a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the principal amounts
(and stated interest) of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive absent manifest error, and the Borrower, the Agent and the Lenders
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

 

(d)          Participations. Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower’s Affiliates
or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
the Loans owing to it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agent and the Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 10.12(c) with respect to any
payments made by such Lender to its Participant(s).

 

 -76- 

 

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in Section 10.10(i) and (ii)
that affects such Participant. The Borrower agrees that each Participant shall
be entitled to the benefits of Sections 8.1, 8.4, and 10.1 (subject to the
requirements and limitations therein, including the requirements under Section
10.1(g) (it being understood that the documentation required under Section
10.1(g) shall be delivered to the participating Lender)) to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
Section 10.9(b) above; provided that such Participant (A) agrees to be subject
to the provisions of Section 10.2 as if it were an assignee under
Section 10.2(b) above; and (B) shall not be entitled to receive any greater
payment under Section 8.4 or Section 10.1, with respect to any participation,
than its participating Lender would have been entitled to receive, except to the
extent such entitlement to receive a greater payment results from a Change in
Law that occurs after the Participant acquired the applicable participation.
Each Lender that sells a participation agrees, at the Borrower's request and
expense, to use reasonable efforts to cooperate with the Borrower to effectuate
the provisions of Section 10.2(b) with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.13 as though it were a Lender; provided that such Participant agrees
to be subject to Section 10.7 as though it were a Lender. Each Lender that sells
a participation shall, acting solely for this purpose as an agent of the
Borrower, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any Participant or any information relating to a Participant’s
interest in any Loans or its other Obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such Loan or other Obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Agent (in its capacity as Agent)
shall have no responsibility for maintaining a Participant Register.

 

(e)          Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

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(f)          Electronic Execution of Assignments. The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act
or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

Section 10.10.         Amendments. Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrower, (b) the Required Lenders
(or the Agent with the consent of the Required Lenders), and (c) if the rights
or duties of the Agent are affected thereby, the Agent; provided that:

 

(i)          no amendment or waiver pursuant to this Section 10.10 shall
(A) reduce or waive the amount of or postpone the date for any scheduled payment
(but not including any mandatory prepayment) of any principal of or interest on
any Loan (except in connection with the waiver of acceptability of any
post-default increase in interest rates (which waiver shall be effective with
the consent of the Required Lenders)) or of any fee payable hereunder without
the consent of the Lender to which such payment is owing or which has committed
to make such Loan (or participate therein) hereunder or (B) change the
application of payments set forth in Section 2.9 without the consent of any
Lender adversely affected thereby;

 

(ii)         no amendment or waiver pursuant to this Section 10.10 shall, unless
signed by each Lender, change the definition of Required Lenders, change the
provisions of this Section 10.10, release any material Guarantor (except as
otherwise provided for in the Loan Documents), affect the number of Lenders
required to take any action hereunder or under any other Loan Document, or
change or waive any provision of any Loan Document that provides for the pro
rata nature of disbursements or payments to Lenders; and

 

(iii)        in addition to the other requirements of this Section 10.10, no
amendment to Section 11 shall be made without the consent of the Guarantor(s)
affected thereby.

 

Notwithstanding anything to the contrary herein, any provision of this Agreement
may be amended by an agreement in writing entered into by the Borrower, the
Required Lenders and the Agent if, at the time such amendment becomes effective,
each Lender not consenting thereto receives payment (including pursuant to an
assignment to a replacement Lender in accordance with the terms herein) in full
of the principal of and interest accrued on each Loan made by it and all other
Obligations owing to it or accrued for its account under this Agreement,.

 

Section 10.11.         Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.

 

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Section 10.12.         Expenses; Indemnity; Damage Waiver. (a) Costs and
Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Agent), in connection with the syndication
of the Loans, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents, or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), and (ii) all out-of-pocket expenses incurred by the Agent or any
Lender (including the fees, charges and disbursements of any counsel for the
Agent or any Lender), in connection with any Default or Event of Default
hereunder or with the enforcement or protection of its rights (including all
such expenses incurred in connection with any proceeding under the United States
Bankruptcy Code involving any Loan Party or any of its Subsidiaries as a debtor
thereunder) (A) in connection with this Agreement and the other Loan Documents,
including its rights under this Section, or (B) in connection with the Loans
made hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.

 

(b)          Indemnification by the Borrower. The Borrower shall indemnify the
Agent (and any sub-agent thereof), each Lender, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”) against,
and hold each Indemnitee harmless from, any and all Damages (including the fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any Person (including the
Borrower or any Guarantor) other than such Indemnitee and its Related Parties
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or the use or
proposed use of the proceeds therefrom, (iii) any actual or alleged violation of
Environmental Laws, the presence, Release or threatened Release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries or at any off-site location for which the Borrower or any of
its Subsidiaries may be liable, or any Environmental Claim related in any way to
the Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any Guarantor, and regardless of whether any
Indemnitee is a party thereto, provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee, or (y) result from a claim
brought by the Borrower or any Guarantor against an Indemnitee for breach in bad
faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if the Borrower or such Guarantor has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction. This Section 10.12(b) shall not apply with respect to
Taxes other than any Taxes that represent losses or damages arising from any
claim not related to any such Taxes.

 

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(c)          Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under Sections 10.12(a)
or (b) to be paid by it to the Agent (or any sub-agent thereof) or any Related
Party of the Agent, each Lender severally agrees to pay to the Agent (or any
such sub-agent) or such Related Party, as the case may be, such Lender’s
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount (including any such unpaid
amount in respect of a claim asserted by such Lender), provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Agent (or
any such sub-agent) or against any Related Party of the Agent acting for the
Agent (or any such sub-agent) in connection with such capacity. The obligations
of the Lenders under this Section 10.12(c) are several and not joint. The Agent
shall be entitled to offset amounts received for the account of a Lender under
this Agreement against unpaid amounts due from such Lender to the Agent
hereunder (whether as fundings of participations, indemnities or otherwise), but
shall not be entitled to offset against amounts owed to the Agent by any Lender
arising outside of this Agreement and the other Loan Documents.

 

(d)          Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, the Borrower shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

 

(e)          Payments. All amounts due under this Section shall be payable
promptly after demand therefor.

 

(f)          Survival. The obligations of the Borrower under this Section shall
survive the termination of this Agreement and the payment of Obligations
hereunder.

 

Section 10.13.         Set-off. If an Event of Default shall have occurred and
be continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held,
and other obligations (in whatever currency) at any time owing, by such Lender
or any such Affiliate, to or for the credit or the account of any Loan Party
against any and all of the obligations of such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender or its
Affiliates, irrespective of whether or not such Lender or Affiliate shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of such Loan Party may be contingent or unmatured or are owed
to a branch, office or Affiliate of such Lender different from the branch,
office or Affiliate holding such deposit or obligated on such Indebtedness. The
rights of each Lender and its respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or its Affiliates may have. Each Lender and agrees to notify the
Borrower and the Agent promptly after any such setoff and application; provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

 

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Section 10.14.         Governing Law; Jurisdiction; Etc. (a) Governing Law. This
Agreement and the other Loan Documents and any claims, controversy, dispute, or
cause of action (whether in contract or tort or otherwise) based on, arising out
of, or relating to this Agreement or any other Loan Document (except, as to any
other Loan Document, as expressly set forth therein) and the transactions
contemplated hereby and thereby shall be governed by, and construed in
accordance with, the law 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).

 

(b)          Jurisdiction. Each Loan Party irrevocably and unconditionally
agrees that it will not commence any action, litigation or proceeding of any
kind or description, whether in law or equity, whether in contract or in tort or
otherwise, against the Agent, any Lender, or any Related Party of the foregoing
in any way relating to this Agreement or any other Loan Document or the
transactions relating hereto or thereto, in each case in any forum other than
the courts of the State of New York sitting in New York County, and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, and each of the parties hereto irrevocably and
unconditionally submits to the non-exclusive jurisdiction of such courts and
agrees that all claims in respect of any such action, litigation or proceeding
may be heard and determined in such New York State court or, to the fullest
extent permitted by applicable law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action, litigation or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by applicable Legal Requirements.
Nothing in this Agreement or in any other Loan Document shall affect any right
that the Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party or its properties in the courts of any jurisdiction.

 

(c)          Waiver of Venue. Each Loan Party irrevocably and unconditionally
waives, to the fullest extent permitted by applicable Legal Requirements, any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in Section 10.14(b) above. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
Legal Requirements, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

 

(d)          Service of Process. Each party hereto irrevocably consents to
service of process in any action or proceeding arising out of or relating to any
Loan Document, the manner provided for notices (other than telecopy or email) in
Section 10.8. Nothing in this Agreement or any other Loan Document will affect
the right of any party hereto to serve process in any other manner permitted by
applicable Legal Requirements.

 

Section 10.15.         Severability of Provisions Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights, remedies
and powers provided in this Agreement and the other Loan Documents may be
exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provisions of law, and all the provisions of this Agreement
and other Loan Documents are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.

 

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Section 10.16.         Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount of interest in excess
of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the Loans or other obligations outstanding under this Agreement or
any other Loan Document (“Excess Interest”). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section shall govern and control,
(b) no Loan Party nor any endorser shall be obligated to pay any Excess
Interest, (c) any Excess Interest that the Agent or any Lender may have received
hereunder shall, at the option of the Agent, be (i) applied as a credit against
the then outstanding principal amount of Obligations hereunder and accrued and
unpaid interest thereon (not to exceed the maximum amount permitted by
applicable law), (ii) refunded to the Borrower, or (iii) any combination of the
foregoing, (d) the interest rate payable hereunder or under any other Loan
Document shall be automatically subject to reduction to the maximum lawful
contract rate allowed under applicable usury laws (the “Maximum Rate”), and this
Agreement and the other Loan Documents shall be deemed to have been, and shall
be, reformed and modified to reflect such reduction in the relevant interest
rate, and (e) No Loan Party nor any endorser shall have any action against the
Agent or any Lender for any Damages whatsoever arising out of the payment or
collection of any Excess Interest. Notwithstanding the foregoing, if for any
period of time interest on any of Borrower’s Obligations is calculated at the
Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of
interest payable on the Borrower’s Obligations shall remain at the Maximum Rate
until the Lenders have received the amount of interest which such Lenders would
have received during such period on the Borrower’s Obligations had the rate of
interest not been limited to the Maximum Rate during such period.

 

Section 10.17.         Construction. The parties acknowledge and agree that the
Loan Documents shall not be construed more favorably in favor of any party
hereto based upon which party drafted the same, it being acknowledged that all
parties hereto contributed substantially to the negotiation of the Loan
Documents. The provisions of this Agreement relating to Subsidiaries and to
Guarantors, respectively, shall apply only during such times as the Borrower has
one or more Subsidiaries and as there are one or more Guarantors, respectively.

 

Section 10.18.         Lenders’ Obligations Several. The obligations of the
Lenders hereunder are several and not joint. Nothing contained in this Agreement
and no action taken by the Lenders pursuant hereto shall be deemed to constitute
the Lenders a partnership, association, joint venture or other entity.

 

Section 10.19.         USA Patriot Act. Each Lender hereby notifies the Borrower
that pursuant to the requirements of the Patriot Act it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with the Patriot Act.

 

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Section 10.20.         Waiver of Jury Trial. Each of the Loan Parties, the
Agent, and the Lenders hereby irrevocably waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in any
legal proceeding directly or indirectly arising out of or relating to this
Agreement or any other Loan Document or the transactions contemplated hereby or
thereby (whether based on contract, tort or any other theory). Each party hereto
(a) certifies that no representative, agent or attorney of any other person has
represented, expressly or otherwise, that such other person would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement and the other Loan Documents by, among other things, the mutual
waivers and certifications in this section.

 

Section 10.21.         Treatment of Certain Information; Confidentiality. Each
of the Agent and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its Affiliates and to its Related Parties (it being understood that the Persons
to whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent required or requested by any regulatory authority purporting to have
jurisdiction over such Person or its Related Parties (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights and obligations under this Agreement provided
that such assignee or Participant is subject to the provisions of this Section
10.21, (g) on a confidential basis to (i) any rating agency in connection with
rating the Loan Parties or the Loans or (ii) the CUSIP Service Bureau or any
similar agency in connection with the issuance and monitoring of CUSIP numbers
with respect to the Loans, (h) with the consent of the Borrower, or (i) to the
extent such Information (A) becomes publicly available other than as a result of
a breach of this Section or (B) becomes available to the Agent, any Lender, or
any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrower. In addition, the Agent and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry and service
providers to the Agent and the Lenders in connection with the administration of
this Agreement and the other Loan Documents.

 

For purposes of this Section, “Information” means all information received from
any Loan Party relating to the Loan Parties or any of their respective
businesses, other than any such information that is available to the Agent or
any Lender on a nonconfidential basis prior to disclosure by any Loan Party or
any of its Subsidiaries, provided that, in the case of information received from
any Loan Party or any of its Subsidiaries after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

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Section 10.22.         Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents, and any separate letter agreements with respect to fees payable
to the Agent, constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 3.1, this Agreement shall become effective when it shall
have been executed by the Agent and when the Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or in electronic (e.g. “pdf” or “tif”)
format shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

Section 10.23.         All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Agent and any Persons
designated by the Agent or any Lender pursuant to any provisions of this
Agreement or any of the other Loan Documents shall be deemed coupled with an
interest and shall be irrevocable until the Termination Date. All such powers of
attorney shall be for security.

 

Section 10.24.         Managerial Assistance. The Borrower acknowledges that
Alcentra is a Business Development Company under the Investment Company Act (in
such capacity, “BDC Purchaser”). BDC Purchaser will make available significant
managerial assistance to the Borrower as required by the Investment Company Act.
As such, BDC Purchaser’s officers, directors and employees are available to
provide the Borrower with guidance and counsel with respect to various
management concerns, including operations or business objectives, implementing
best practices and policies, selective participation in board and management
meetings (to the extent BDC Purchaser does not already have a board observer
position in connection with the financing), consulting with the Borrower’s
officers and executives on significant management matters, reviewing proposed
annual budgets and operating plans or providing other organizational and
financial guidance. In connection with providing such managerial assistance, BDC
Purchaser may need to examine the books and records of the Borrower and inspect
its facilities at reasonable times and intervals concerning the general status
of the Borrower’s financial condition and operations, provided that access to
confidential proprietary information and facilities need not be provided. BDC
Purchaser agrees that any confidential information provided to or learned by it
in connection with providing such managerial assistance shall be kept in
confidence in keeping with the confidentiality provisions set forth herein.

 

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Section 11.         The Guarantees.

 

Section 11.1.          The Guarantees. To induce the Lenders to make the Loans
described herein and in consideration of benefits expected to accrue to the
Borrower by reason of the Loans and for other good and valuable consideration,
receipt of which is hereby acknowledged, the Parent and each Subsidiary party
hereto (including any Subsidiary executing an Additional Guarantor Supplement
substantially in the form attached hereto as Exhibit G or such other form
reasonably acceptable to the Agent) and the Borrower (as to the Guaranteed
Obligations of another Loan Party) hereby unconditionally and irrevocably
guarantees jointly and severally to the Agent and the Lenders the due and
punctual payment of all present and future Obligations, including, but not
limited to, the due and punctual payment of principal of and interest on the
Loans and the due and punctual payment of all other Obligations now or hereafter
owed by the Borrower under the Loan Documents, in each case as and when the same
shall become due and payable, whether at stated maturity, by acceleration, or
otherwise, according to the terms hereof and thereof (including all interest,
costs, fees, and charges after the entry of an order for relief against the
Borrower or such other obligor in a case under the United States Bankruptcy Code
or any similar proceeding, whether or not such interest, costs, fees and charges
would be an allowed claim against the Borrower or any such obligor in any such
proceeding). In case of failure by the Borrower or other obligor punctually to
pay any Guaranteed Obligations guaranteed hereby, each Guarantor hereby
unconditionally, jointly and severally agrees to make such payment or to cause
such payment to be made punctually as and when the same shall become due and
payable, whether at stated maturity, by acceleration, or otherwise, and as if
such payment were made by the Borrower or such obligor.

 

Section 11.2.          Guarantee Unconditional. The obligations of each
Guarantor under this Section 11 shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged, or
otherwise affected by:

 

(a)          any extension, renewal, settlement, compromise, waiver, or release
in respect of any obligation of any Loan Party or other obligor or of any other
guarantor under this Agreement or any other Loan Document or by operation of law
or otherwise;

 

(b)          any modification or amendment of or supplement to this Agreement or
any other Loan Document;

 

(c)          any change in the corporate existence, structure, or ownership of,
or any proceeding under any Debtor Relief Law affecting, the Borrower or other
obligor, any other guarantor, or any of their respective assets, or any
resulting release or discharge of any obligation of any Loan Party or other
obligor or of any other guarantor contained in any Loan Document;

 

(d)          the existence of any claim, set-off, or other rights which any Loan
Party or other obligor or any other guarantor may have at any time against the
Agent, any Lender or any other Person, whether or not arising in connection
herewith;

 

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(e)          any failure to assert, or any assertion of, any claim or demand or
any exercise of, or failure to exercise, any rights or remedies against any Loan
Party or other obligor, any other guarantor, or any other Person or Property;

 

(f)          any application of any sums by rights of set-off, counterclaim, or
similar rights to any obligation of any Loan Party or other obligor, regardless
of what obligations of any Loan Party or other obligor remain unpaid, including
the Guaranteed Obligations;

 

(g)          any invalidity or unenforceability relating to or against any Loan
Party or other obligor or any other guarantor for any reason of this Agreement
or of any other Loan Document or any provision of applicable law or regulation
purporting to prohibit the payment by any Loan Party or other obligor or any
other guarantor of the principal of or interest on any Loan or any other amount
payable under the Loan Documents; or

 

(h)          any other act or omission to act or delay of any kind by the Agent,
any Lender or any other Person or any other circumstance whatsoever that might,
but for the provisions of this clause (h), constitute a legal or equitable
discharge of the obligations of any Guarantor under this Section 11.

 

Section 11.3.          Discharge Only upon Termination Date; Reinstatement in
Certain Circumstances. Each Guarantor’s obligations under this Section 11 shall
remain in full force and effect until the Termination Date. If at any time any
payment of the principal of or interest on any Loan or any other amount payable
by any Loan Party or other obligor or any Guarantor under the Loan Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy, or reorganization of such Loan Party or other obligor or of any
guarantor, or otherwise, each Guarantor’s obligations under this Section 11 with
respect to such payment shall be reinstated at such time as though such payment
had become due but had not been made at such time.

 

Section 11.4.          Subrogation. Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation, reimbursement or
indemnification by any payment made hereunder, or otherwise, until all the
Guaranteed Obligations (other than any contingent or indemnification obligations
not then due) shall have been paid in full or collateralized in a manner
reasonably acceptable to the Lender or Affiliate of a Lender to whom such
obligations are owed. If any amount shall be paid to a Guarantor on account of
such subrogation, reimbursement or indemnification rights at any time prior to
the Termination Date, such amount shall be held in trust for the benefit of the
Agent and the Lenders (and their Affiliates) and shall forthwith be paid to the
Agent for the benefit of the Lenders (and their Affiliates) or be credited and
applied upon the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of this Agreement.

 

Section 11.5.          Subordination. Each Guarantor hereby subordinates the
payment of all indebtedness, obligations, and liabilities of the Borrower or any
other Loan Party owing to such Guarantor, whether now existing or hereafter
arising, to the indefeasible payment in full in cash of all Guaranteed
Obligations (other than any contingent obligations not due and owing). During
the existence of any Event of Default, subject to Section 11.4 above, any such
indebtedness, obligation, or liability of the Borrower or any other Loan Party
owing to such Guarantor shall be enforced and performance received by such
Guarantor as trustee for the benefit of the holders of the Guaranteed
Obligations and the proceeds thereof shall be paid over to the Agent for
application to the Guaranteed Obligations (whether or not then due), but without
reducing or affecting in any manner the liability of such Guarantor under this
Section 11.

 

 -86- 

 

 

Section 11.6.          Waivers. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the Agent, any
Lender, or any other Person against the Borrower or any other Loan Party or
other obligor, another guarantor, or any other Person.

 

Section 11.7.          Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 11 shall
not exceed $1.00 less than the lowest amount which would render such Guarantor’s
obligations under this Section 11 void or voidable under applicable law,
including fraudulent conveyance law.

 

Section 11.8.          Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower or other Loan Party or other
obligor under this Agreement or any other Loan Document is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower or such other Loan
Party or obligor, all such amounts otherwise subject to acceleration under the
terms of this Agreement or the other Loan Documents shall nonetheless be payable
by the Guarantors hereunder forthwith on demand by the Agent made at the request
or otherwise with the consent of the Required Lenders.

 

Section 11.9.          Benefit to Guarantors. The Loan Parties are engaged in
related businesses and integrated to such an extent that the financial strength
and flexibility of the Borrower and the other Loan Parties has a direct impact
on the success of each Guarantor. Each Guarantor will derive substantial direct
and indirect benefit from the extensions of credit hereunder, and each Guarantor
acknowledges that this guarantee is necessary or convenient to the conduct,
promotion and attainment of its business.

 

Section 11.10.         [Reserved].

 

Section 11.11.         Guarantor Covenants. Each Guarantor shall take such
action as the Borrower is required by this Agreement to cause such Guarantor to
take, and shall refrain from taking such action as the Borrower is required by
this Agreement to prohibit such Guarantor from taking.

 

[Signature Pages to Follow]

 

 -87- 

 

 

This Agreement is entered into between us for the uses and purposes hereinabove
set forth as of the date first above written.

 

  “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       “Guarantors”       Limbach Holdings LLC  
      By 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

 

[Signature Page to Loan Agreement]

 

 

 

 

  Harper Limbach Construction LLC       By /s/ John T. Jordan Jr.     Name: John
T. Jordan Jr.     Title: Executive Vice President and Treasurer

 

[Signature Page to Loan Agreement]

 

 

 

 

  “Agent”       Alcentra Capital Corporation, a Maryland corporation, as a
Lender and as Agent       By: Alcentra NY LLC as Advisor to Alcentra Capital
Corporation         By /s/ Branko Krmpotic     Name: Branko Krmpotic     Title:
Senior Vice President         “Lenders”       Alcentra Capital Corporation, a
Maryland corporation, as a Lender and as Agent       By: Alcentra NY LLC as
Advisor to Alcentra Capital Corporation         By /s/ Branko Krmpotic     Name:
Branko Krmpotic     Title: Senior Vice President

 

[Signature Page to Loan Agreement]

 

 

 

 

 

 

Exhibit D

 

Note

 

THIS NOTE IS SUBJECT TO THE SUBORDINATION AND INTERCREDITOR AGREEMENT, DATED AS
OF JULY 20, 2016, AMONG THE MAKER OF THIS NOTE, ALCENTRA CAPITAL CORPORATION, AS
SUBORDINATE AGENT AND FIFTH THIRD BANK, AS SENIOR AGENT, UNDER WHICH THIS NOTE
AND THE MAKER’S OBLIGATIONS HEREUNDER ARE SUBORDINATED IN THE MANNER SET FORTH
THEREIN TO THE PRIOR PAYMENT OF CERTAIN INDEBTEDNESS AND OBLIGATIONS TO THE
HOLDERS OF SENIOR FACILITY DEBT AS DEFINED IN THE SUBORDINATION AND
INTERCREDITOR AGREEMENT.

 

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 the Lender (or such other location as the Lender may
designate to the Borrower), in immediately available funds, the principal sum of
___________________ Dollars ($__________) or, if less, the aggregate unpaid
principal amount of the Loan made or maintained by the Lender to the Borrower
pursuant to the Loan Agreement (as defined below), together with interest on the
principal amount of such Loan from time to time outstanding hereunder at the
rates, and payable in the manner and on the dates, specified in the Loan
Agreement.

 

This Note (this “Note”) is one of the Notes referred to in the Loan 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 Alcentra Capital Corporation, a Maryland
corporation, as Agent (as amended, restated, modified or supplemented from time
to time, the “Loan 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 Loan 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 Loan 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
Loan Agreement.

 

 

 

 

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

 

[Signature Page to Follow]

 

 -2- 

 

 

 

 

In Witness Whereof, the Borrower has caused this Note to be duly executed and
delivered on the date set forth above by the duly authorized representative of
the Borrower.

 

  Limbach Facility Services LLC           By       Name       Title        

 

 

 

 

 

 

Exhibit E

 

___________________________________________________

 

Compliance Certificate

 

Date:  __________, 20__

 

To:Alcentra Capital Corporation, as Agent under, and the Lenders party to, the
Loan Agreement described below

 

Reference is made to the Loan 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
Alcentra Capital Corporation, a Maryland corporation, as Agent (as amended,
restated, modified or supplemented from time to time, the “Loan Agreement”).
Capitalized terms used herein and not defined herein have the meanings assigned
to them in the Loan Agreement. This Compliance Certificate is furnished to the
Agent and the Lenders pursuant to the Loan 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 Borrower.

 

2. I have reviewed the terms of the Loan 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 Loan Agreement and
being furnished to you concurrently with this Compliance Certificate fairly and
adequately present in all material respects the financial condition of the
Borrower 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 Loan
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 Loan 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 Loan
Agreement.

 

7. Schedule II hereto sets forth a comparison of current financials against the
budget for such period required to be submitted pursuant to Section 6.1(d) of
the Loan Agreement.

 

8. 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 Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:

 

       

 

 

9. Schedule III hereto sets forth any update to Schedule 5.9, as required
pursuant to Section 5.9 of the Loan Agreement.

 

 

 

 

In the event of a conflict between the attached Schedule I and any
certifications relating thereto and the Loan Agreement and related definitions
used in calculating such covenants, the Loan 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 Facility Services LLC           By       Name       Title        

 

 

[Signature Page to Compliance Certificate]

 

 

 

 

 

Schedule I

 

to Compliance Certificate

 

Limbach Facility Services LLC

 

Compliance Calculations

 

for Loan Agreement dated as of July 20, 2016

 

Calculations as of _____________, 20__

 

 

        A. Total Leverage Ratio (Section 6.20(a))     1. Total Funded Debt1
$___________   2. Net Income for past 4 quarters $___________   3. Interest
Expense for past 4 quarters $___________   4. Federal, state and local income
taxes for past 4 quarters $___________   5. Depreciation and amortization
expense for past 4 quarters $___________   6. Transaction expenses incurred in
connection with Permitted Acquisitions, whether or not consummated (not to
exceed $50,000 in the aggregate) for past 4 quarters $___________   7. Fees and
expenses paid in cash for past 4 quarters in connection with the Loan 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 $___________   8. 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 Loan
Agreement) $___________   9. Sum of Lines A2, A3, A4, A5, A6, A7 and A8
(“EBITDA”) $___________   10. Ratio of Line A1 to Line A9 (“Total Leverage
Ratio”) ____:1.00   11. Total Leverage Ratio (from Line A10) must not exceed
3.75:1.00   12. The Borrower and its Subsidiaries are in compliance (circle yes
or no) yes/no

 

 

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

 

 

 

 

C. Fixed Charge Coverage Ratio (Section 6.20(c))     1. EBITDA (from Line A9)
$___________   2. Capital Expenditures not financed with Indebtedness for past
4 quarters $___________   3. Line C1 minus Line C2 $___________   4. Principal
Payments for past 4 quarters2 $___________   5. Cash portion of Interest Expense
for past 4 quarters3 $___________   6. Restricted Payments (including without
duplication Tax Distributions) 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 1.00:1.00   11. The Borrower
and its Subsidiaries are in compliance (circle yes or no) yes/no

 

 

2For purposes of calculating Fixed Charges for any period prior to the quarter
ending September 30, 2017, scheduled payments of principal shall be deemed for
all periods included in such calculation to be an aggregate of $3,000,000.

 

3For purposes of calculating Fixed Charges for any period prior to the quarter
ending September 30, 2017, the cash portion of any Interest Expense for such
period shall mean (A) for the fiscal quarter ending September 30, 2016, the
actual cash Interest Expense for such quarter multiplied by 4, (B) for the
fiscal quarter ending December 31, 2016, the actual cash Interest Expenses for
the fiscal quarters ending September 30, 2016 and December 31, 2016 multiplied
by 2, and (C) for the fiscal quarter ending March 31, 2017, the actual cash
Interest Expenses for the fiscal quarters ending September 30, 2016, December
31, 2016 and March 31, 2017 multiplied by 4/3.

 

 

 -2- 

 

 

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. 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 not be less than $15,000,000   9. The
Borrower and its Subsidiaries are in compliance (circle yes or no) yes/no

 

 -3- 

 

 

Schedule II

to Compliance Certificate

 

 

Limbach Facility Services LLC

 

 

Financial Statements 

for Loan Agreement dated as of July 20, 2016

 

 

 

 

 

 

 

[See attached.]

 

 

 

 

 

Schedule III

to Compliance Certificate

 

Limbach Facility Services LLC

 

 

 

 

Schedule 5.9 to Loan Agreement

 

 

 

 

 

 

 

[See attached.]

 

 

 

 

 

Exhibit F

 

Assignment and Assumption

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
Name of Assignor] (the “Assignor”) and [Insert Name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Loan Agreement identified below (as amended, the
“Loan Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Loan Agreement, as of the Effective Date inserted by the
Agent as contemplated below (i) all of the Assignor’s rights and obligations in
its capacity as a Lender under the Loan Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the Loans and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Loan
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as, the “Assigned Interest”).
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by the Assignor.

 

1. Assignor:    

 

2. Assignee:       [and is an Affiliate/Approved Fund of [identify Lender]4]

 

3.Borrower: Limbach Facility Services LLC, a Delaware limited liability company

 

4.Agent: Alcentra Capital Corporation, a Maryland corporation, as Agent under
the Loan Agreement

 

 

 

4Select as applicable.

 

 

 

 

 

 

 

5.Loan Agreement: The Loan Agreement dated as of July 20, 2016, by and among the
Borrower, Limbach Holdings LLC (the “Parent”), the other Guarantors party
thereto, the Lenders party thereto, and Alcentra Capital Corporation, as Agent

 

6.Assigned Interest:

 

 

Aggregate Amount of
Loans for all Lender Amount of Loans
Assigned5 Percentage Assigned of
Loans6 $ $ %

 

[7.Trade Date: _____________________________________________ ]7

 

[Page Break]

 

 

 

 

 

5Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.

 

6Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

7To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

 

 

 

   

Effective Date: _____________ ___, 20___ [To be inserted by Agent and which
shall be the effective date of recordation of transfer in the register
therefor.]

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 

  Assignor       [Name of Assignor]       By       Name       Title        

 

 

  Assignee       [Name of Assignee]       By       Name       Title        

 

 

[Signature Page to Assignment and Assumption]

 

 

 

 

Consented to and Accepted:       Alcentra Capital Corporation,
as Agent       By       Name       Title          

 

 

[Consented to:]8       [Name of Relevant Party]       By       Name       Title
         

 

 

 

8To be added only if the consent of the Borrower and/or other parties is
required by the terms of the Credit Agreement.

 

[Signature Page to Assignment and Assumption]

 

 

 

 

 

Annex 1

 

Standard Terms and Conditions for
Assignment and Assumption

 

Section 1. Representations and Warranties.

 

Section 1.1. Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Loan Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Parent, the Borrower or any of their Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Parent, the Borrower or any of their Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document.

 

Section 1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Loan Agreement, (ii) it
meets all the requirements to be an assignee under the definition of “Eligible
Assignee” of the Loan Agreement, (iii) from and after the Effective Date, it
shall be bound by the provisions of the Loan Agreement as a Lender thereunder
and, to the extent of the Assigned Interest, shall have the obligations of a
Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by the Assigned Interest and either it, or the
Person exercising discretion in making its decision to acquire the Assigned
Interest, is experienced in acquiring assets of such type, (v) it has received a
copy of the Loan Agreement, and has received or has been accorded the
opportunity to receive copies of the most recent financial statements delivered
pursuant to Section 6.1 thereof, as applicable, and such other documents and
information as it deems appropriate to make its own credit analysis and decision
to enter into this Assignment and Assumption and to purchase the Assigned
Interest, (vi) it has, independently and without reliance upon the Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest, and (vii) if it
is not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Loan Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

 

 

 

Section 2. Payments.

 

From and after the Effective Date, the Agent shall make all payments in respect
of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignee whether such amounts have accrued prior to, on or
after the Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Agent for periods prior to the
Effective Date or with respect to the making of this assignment directly between
themselves. Notwithstanding the foregoing, the Agent shall make all payments of
interest, fees or other amounts paid or payable in kind from and after the
Effective Date to the Assignee.

 

Section 3. General Provisions.

 

This Assignment and Assumption shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of
a signature page of this Assignment and Assumption by telecopy shall be
effective as delivery of a manually executed counterpart of this Assignment and
Assumption. This Assignment and Assumption shall be governed by, and construed
in accordance with, the law 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).

 

 

 -2- 

 

 

Exhibit G

 

Additional Guarantor Supplement

 

Date:  __________, 20__

 

To:Alcentra Capital Corporation, as Agent under, and the Lenders party to, the
Loan Agreement described below

 

Ladies and Gentlemen:

 

Reference is made to the Loan 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
Alcentra Capital Corporation, a Maryland corporation, as Agent (as amended,
restated, modified or supplemented from time to time, the “Loan Agreement”).
Capitalized terms used herein and not defined herein have the meanings assigned
to them in the Loan Agreement.

 

The undersigned, [Insert Name of Guarantor], a(n) ________ ___________, hereby
elects to be a “Guarantor” for all purposes of the Loan Agreement, effective
from the date hereof. The undersigned confirms that the representations and
warranties set forth in Section 5 of the Loan 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 to the undersigned to the extent
applicable to it as of the date hereof (unless such representations and
warranties related to an earlier specified 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)
and the undersigned shall comply with each of the covenants set forth in
Section 6 of the Loan Agreement applicable to it.

 

Without limiting the generality of the foregoing, the undersigned hereby agrees
to perform all the obligations of a Guarantor under, and to be bound in all
respects by the terms of, the Loan Agreement, including without limitation
Section 11 thereof, to the same extent and with the same force and effect as if
the undersigned were a signatory party thereto.

 

The undersigned acknowledges that this Additional Guarantor Supplement shall be
effective upon its execution and delivery by the undersigned to the Agent, and
it shall not be necessary for the Agent or any Lender, or any of their
Affiliates entitled to the benefits hereof, to execute this Additional Guarantor
Supplement or any other acceptance hereof. This Additional Guarantor Supplement
shall be construed in accordance with and governed by 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).

 

 

 

 

 

  Very truly yours,       [Insert Name of Guarantor]       By       Name      
Title        

 

 

 

Acknowledged and Agreed       Alcentra Capital Corporation, as Agent       By  
    Name       Title          

 

 

 

 -2- 

 

 

 

 

Schedule 1

 

 

 

Loans

 

 

 

 

 

Name and Payment Address of Lender Loan Closing Fee      

Alcentra Capital Corporation

200 Park Avenue, 7th Floor

New York, NY 10166

 

$13,000,000 $260,000       Total: $13,000,000.00 $260,000

 

 

 

 

 

 

Schedule 1-A

  

Capital Leases

 

 

1.Lease Agreement (#100171), dated as of May 1, 2009, by and between Bud Behling
Leasing, Inc., dba BBL Fleet and Limbach Facility Services LLC.

 

2.Agreement (No. 1138814), dated as of March 27, 2014, by and between
GreatAmerica Financial Services Corporation and Limbach Company LLC.

 

 

 

 

 

  

Schedule 1-B 

 

June 2016 EBITDA Calculations

 

  

1.Management Fees in an amount not to exceed $668,000.

 

 

 

 

 

 

 

 

Schedule 2.4(b)

 

 

 

Conversion Calculation

 

 

 

FOR ILLUSTRATIVE PURPOSES ONLY

 

 

 

A.

Deferred Interest Principal being Converted:

 

$2,000,000.00 B.

Conversion Price:

 

$10.00 C.

Five (5) day weighted trading average of a share of Limbach Stock for the five
Business Days preceding the Conversion Date:

 

 

 $25.00

D.

Conversion Shares (A./B.):

 

200,000 = $2,000,000.00/$10.00 E.

Liquidation Shares (A./C.):

 

80,000 = $2,000,000.00/$25.00 F. Shares to be delivered to Lenders (D. - E.):

120,000 = 200,000 – 80,000

 

G.

Value of shares to be delivered to Lenders (F. x C.):

 

$3,000,000.00 = 120,000 x $25.00

 

H. Cash to be paid to Lenders (A.):

$2,000,000.00

 

I.

Value of shares and cash to be delivered to Lenders

(G +A.):

 

$5,000,000.00

 

 

 

 

 

 

 

Schedule 5.5

 

Litigation and Other Controversies

 

1.Pennsylvania Department of General Services Project (SCI Fayette): This
lawsuit was filed by the Commonwealth of Pennsylvania (the “Commonwealth”)
against Limbach Facility Services LLC (“LFS”) for a construction project
completed in the fall of 2002. LFS contracted with the Pennsylvania Department
of General Services (“DGS”) in 2001, to perform mechanical construction work at
the State Correctional Institution in Fayette County, PA. In 2007, DGS
discovered leaks in the underground thermal pipe system supplied by LFS’
subcontractor, Thermacor Process LP (“Thermacor”); however, LFS believes that it
is not responsible for the leaks. DGS did not pursue the matter further until it
filed and served a complaint against LFS in September 2012, seeking in excess of
$8,000,000 in damages. In late December 2012, LFS filed an answer to the
complaint and joined Thermacor, Allegheny Group (Thermacor’s distributor) and
the project engineer of record, L. Robert Kimball and Associates, as defendants.
Significant discovery has occurred during the ensuing three years. LFS submitted
defense of the suit to Arch Insurance and Travelers Insurance, and coverage was
accepted under a reservation of rights by Travelers Insurance. Trial is not
anticipated until 2017, and the parties hope to submit to mediation in the fall
of 2016.

 

2.Wilshire Vermont Apartments Project: This matter relates to LFS’ work as a
subcontractor to Taisei Construction for the Wilshire Vermont apartments project
in 2004. On April 18, 2013, LFS was sued by the project owner (the “Owner”) for
alleged construction defects as part of a larger claim against the general
contractor, the design team and almost all subcontractors. LFS submitted defense
of the suit to Arch Insurance and coverage was accepted under a reservation of
rights. The Owner alleges three defects in LFS’ work, seeking damages of
approximately $900,000, with the total suit claiming damages in of the
approximate amount of $70,000,000. LFS has asserted defenses to each item,
including that liability may rest with a subcontractor or supplier that LFS has
brought into the case. LFS’ expert also believes the total value of the three
items claimed by the Owner to be far less than claimed. All parties participated
in mediation over three days, commencing on July 27, 2015; however, no
settlement was reached. LFS is working with the mediator to set up a meeting
between the Owner and LFS’ experts aimed at narrowing the issues and agreeing on
the costs of repair, in hopes of allowing a settlement to be reached when
mediation resumes in 2016.

 

Legacy Claims

 

For purposes of the Loan Agreement, the claims described in items #1 and #2
above are “Legacy Claims”.

 

 

 

 

Schedule 5.9

 

ERISA

  

(a)

 

1.Central States Pension Fund Matter: In September 2014, Central States Pension
Fund (“CSPF”) issued to LFS a demand for payment of withdrawal liability
stemming from allegations that LFS had completely withdrawn from CSPF by virtue
of ceasing to employ teamsters in the Company’s Michigan branch (the “Central
States Pension Fund Matter”). CSPF assessed the amount of withdrawal liability
to be $613,485. LFS disputed the amount of the assessment and filed arbitration
against CSPF on May 14, 2015. A settlement was reached in December 2015, and the
parties entered into that certain Settlement Agreement and Release, dated March
31, 2016, between Central States, Southeast and Southwest Areas Pension Fund and
Limbach Company LLC.

 

(b)

 

1.Sheet Metal Workers Local 98 Pension Fund

 

2.Sheet Metal Workers' Pension Plan of Southern California, Arizona and Nevada

 

3.Heating, Piping and Refrigeration Pension Fund

 

4.Sheet Metal Workers' Local Union No. 80 Pension Fund

 

5.Steamfitters Local Union No. 420 Pension Plan

 

6.Plumbers and Pipefitters Local Union No. 333 Pension Plan

 

7.Pipefitters Local No. 636 Defined Benefit Pension Fund

 

8.Sheet Metal Workers’ National Pension Fund

 

9.Plumbers and Pipefitters National Pension Fund

 

10.Plumbers Local No. 98 Defined Benefit Pension Fund

 

11.Plumbers & Steamfitters Local No. 577 Pension Plan

 

12.Flint Area Sheet Metal Workers Local Union No. 7, Zone 4 Pension Fund

 

(c)

 

None.

  

(d)

 

1.A “Statement of Business Affairs” was requested from LFS in connection with
the Central States Pension Fund Matter.

 

(e)

 

None.

 

 

 

 

Schedule 5.10

  

Subsidiaries 

 

List of Subsidiaries of each Loan Party:

 

1.Limbach Facility Services LLC is a wholly-owned Subsidiary of Limbach Holdings
LLC.

 

2.Harper Limbach Construction LLC, Harper Limbach LLC and Limbach Company LLC
are wholly-owned Subsidiaries of Limbach Facility Services LLC.

 

3.Limbach Company LP is 99%-owned by Limbach Facility Services LLC and 1%-owned
by Limbach Company LLC.

 

Subsidiary Jurisdiction of
Organization Holder(s) Percentage of
Subsidiary’s Equity
Interests Held Limbach Facility Services LLC Delaware Limbach Holdings LLC 10
Units (100% membership interest) Harper Limbach Construction LLC Delaware
Limbach Facility Services LLC 10 Units (100% membership interest) Harper Limbach
LLC Delaware Limbach Facility Services LLC 10 Units (100% membership interest)
Limbach Company LP Delaware Limbach Facility Services LLC 99% partnership
interest Limbach Company LLC 1% partnership interest Limbach Company LLC
Delaware Limbach Facility Services LLC 10 Units (100% membership interest)

 

 

 

 

 

 

Schedule 5.16

 

 

 

Labor Relations

 

 

 

(a)None

 

(b)None.

 

(c)Collective Bargaining Agreements:

 

1.Agreement, dated July 1, 2010, between SMACNA of Western Pennsylvania Sheet
Metal, Roofing, Ventilation and Air Conditioning Contracting Divisions of the
Construction Industry and Sheet Metal Workers Local 12.

 

2.Agreement, dated June 1, 2012, between The Sheet Metal Workers of Central Ohio
and Sheet Metal Workers Local Union No. 24.

 

3.Construction Agreement, dated June 1, 2009, between SMACNA Metropolitan
Detroit Chapter and Sheet Metal Workers’ International Association Local Union
No. 80.

 

4.Collective Bargaining Agreement, dated January 1, 2011, between Sheet Metal
Air Conditioning Contractors’ National Association (SMACNA Los Angeles and
Orange Empire SMACNA) and Sheet Metal Workers’ International Association Local
Union 105.

 

5.Construction Agreement, dated June 1, 2013, between SMACNA Metropolitan
Detroit Chapter and Sheet Metal Air Rail Transportation International
Association (SMART) Local Union No. 80.

 

6.Agreement, dated June 2, 2014, between Mechanical Contractors Association of
Detroit, Inc. and Journeymen Plumbers Local No. 98 of Detroit, Michigan.

 

7.Joint Agreement, dated September 1, 2013, between New England Mechanical
Contractors Association Incorporation and Local Union 537 of The United
Association of Pipefitters and Apprentices of Boston and Vicinity of The
Plumbing and Pipe Fitting Industry in the United States, Canada and Australia –
AFL-CIO.

 

8.Joint Agreement, dated September 1, 2013, between NEMCA/Air-Conditioning and
Refrigeration Contractors of BOSTON, Inc. and Local Union 537 of The United
Association of Pipefitters and Apprentices of Boston and Vicinity of The
Plumbing and Pipe Fitting Industry in the United States, Canada and Australia –
AFLI-CIO.

 

9.Agreement, dated September 1, 2014, between Mechanical Contractors Association
of Metropolitan Washington, DC and Baltimore/Washington Construction & Public
Employees Laborers’ District Council, LIUNA, Local 657 and Local 11.

 

 

 

 

10.Inside Wireman Agreement, dated June 1, 2015, between Washington, D.C.
Chapter National Electrical Contractors Association and Local Union No. 26,
International Brotherhood of Electrical Workers.

 

11.Residential Agreement, dated June 1, 2015, by Washington, D.C. Chapter
National Electrical Contractors Association and Local Union No. 26,
International Brotherhood of Electrical Workers.

 

12.Service Master Labor Agreement, dated September 1, 2015, between The
Airconditioning, Refrigeration and Mechanical Contractors Association of
Southern California (ARCA/MCA) and The Southern California Pipe Trades District
Council 16 (DC 16).

 

13.Joint Agreement, dated June 1, 2015, between The Mechanical Contractors
Association of Southeastern Ohio and The United Association of Journeyman &
Apprentices of the Plumbing and Pipefitting Industry Local No. 577.

 

14.Agreement, dated June 1, 2014, between Local Union No. 24 I.B.E.W. and
Baltimore Division, Maryland Chapter, National Electrical Contractors
Association, Inc.

 

15.Collective Bargaining Agreement, dated July 1, 2013, between Local Union No.
9 of the United Association of Journeymen and Apprentices of the Plumbing and
Pipefitting Industry of The United States and Canada, AFL-CIO and Mechanical
Contractors Association of New Jersey, Inc.

 

16.Agreement, dated May 1, 2014, between South Jersey Mechanical Contractors
Association, Inc. and LOCAL 322 of the United Association of Journeymen and
Apprentices of the Plumbing and Pipe Fitting Industry of the United States and
Canada, AFL-CIO.

 

17.Basic Construction Agreement, dated August 1, 2014, between Mechanical
Contractors Association of Metropolitan Washington, Inc. and Plumber Local Union
No. 5 of the United Association of Journeymen and Apprentices of the Plumbing
and Pipe Fitting Industry of the United States and Canada, AFL-CIO.

 

18.Supplemental Service Agreement, dated August 1, 2014, between Mechanical
Contractors Association of Metropolitan Washington, Inc. and Plumber Local Union
No. 5 of the United Association of Journeymen and Apprentices of the Plumbing
and Pipe Fitting Industry of the United States and Canada, AFL-CIO.

 

19.Speculative Agreement “B”, dated August 1, 2014, between Mechanical
Contractors Association of Metropolitan Washington, Inc. and Plumber Local Union
No. 5 of the United Association of Journeymen and Apprentices of the Plumbing
and Pipe Fitting Industry of the United States and Canada, AFL-CIO.

 

20.Core Drilling Agreement, dated August 1, 2014, between Mechanical Contractors
Association of Metropolitan Washington, Inc. and Plumber Local Union No. 5 of
the United Association of Journeymen and Apprentices of the Plumbing and Pipe
Fitting Industry of the United States and Canada, AFL-CIO.

 

 

 

 

21.Ground Penetrating Radar Agreement, dated August 1, 2014, between Mechanical
Contractors Association of Metropolitan Washington, Inc. and Plumber Local Union
No. 5 of the United Association of Journeymen and Apprentices of the Plumbing
and Pipe Fitting Industry of the United States and Canada, AFL-CIO.

 

22.Building Construction Agreement, dated October 21, 2013, between the
Mechanical Contractors Association of Metropolitan Washington, Inc. and Local
Union No. 602 of the United Association of Journeymen and Apprentices of the
Plumbing and Pipefitting Industry of the United States and Canada (AFL-CIO).

 

23.Supplemental Service Agreement, dated October 21, 2013, between the
Mechanical Contractors Association of Metropolitan Washington, Inc. and Local
Union No. 602 of the United Association of Journeymen and Apprentices of the
Plumbing and Pipefitting Industry of the United States and Canada (AFL-CIO).

 

24.Agreement, dated July 1, 2013, between Sheet Metal and Air Conditioning
Contractors’ National Association of Western Pennsylvania and Local Union No. 12
of International Association of Sheet Metal, Air, Rail and Transportation
Workers.

 

25.Agreement, dated June 1, 2015, between the Mechanical Contractors Association
of Western Pennsylvania, Inc. and Plumbers Local Union No. 27 of the United
Association of Journeymen and Apprentices of the Plumbing and Pipefitting
Industry of the United States and Canada.

 

26.Inside Agreement, dated July 1, 2015, between Western Maryland Division,
Maryland Chapter, National Electric Contractors Association and Local Union No.
307, IBEW.

 

27.Articles of Agreement, dated June 1, 2015, between Local Union No. 354 of the
United Association of Journeymen and Apprentices of the Plumbing and Pipe
Fitting Industry of the United States and Canada, AFL-CIO and Laurel Mechanical
Contractors Association, Inc. and Independent Contractors.

 

28.Agreement, dated May 1, 2014, between Mechanical Contractors Association of
Eastern Pennsylvania, Inc. and Local Union No. 420 of the United Association of
Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the
United States and Canada.

 

29.Agreement, dated May 15, 2014, between Steamfitters Local Union No. 420 of
the United Association of Journeymen and Apprentices of the Plumbing and Pipe
Fitting Industry of the United States and Canada and Servicing Contractors
Association of Greater Delaware Valley, Inc.

 

30.Agreement, dated June 1, 2015, between The Mechanical Contractors Association
of Western Pennsylvania, Inc. and The United Association of Journeymen and
Apprentices of the Plumbing and Pipe Fitting Industry of the United States and
Canada, Local Union No. 449.

 

 

 

 

31.Agreement, dated May 1, 2013, between Mechanical Contractors Association of
Eastern Pennsylvania, Inc. and Plumbers Local Union No. 690 of the United
Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting
Industry of the United States and Canada Covering Philadelphia, Bucks, Chester,
Delaware and Montgomery Counties.

 

32.National Service and Maintenance Agreement, dated August 1, 2015, between
United Association of Journeymen and Apprentices of the Plumbing and Pipe
Fitting Industry of the United States and Canada, AFL-CIO and Mechanical Service
Contractors of America.

 

33.Construction Labor Agreement, dated November 19, 2012, between Mechanical
Contractors Association of Detroit, Inc. and Pipefitters, Steamfitters,
Refrigeration, and Air Conditioning Service Local Union No. 636 of Metropolitan
Detroit Area, Michigan.

 

34.Master Agreement for the Plumbing and Piping Industry of Southern California,
dated July 1, 2014, between California Plumbing and Mechanical Contractors
Association and Southern California Pipe Trades District Council No. 16 of the
United Association.

 

35.Participation Agreement, dated November 11, 2015, between Limbach Co LLC and
United Association of Plumbers & Pipefitters Local Union #162.

 

36.Agreement, dated June 1, 2015, between Sheet Metal Contractors Association of
Central Ohio and Local Union #24 of International Association of Sheet Metal,
Air, Rail and Transportation Workers.

 

37.Master Agreement, dated May 1, 2013, between Mechanical Contractors
Association of Maryland, Inc. and Plumbers and Steamfitters U.A. Local 486 of
Baltimore, Maryland.

 

38.Service & Maintenance Agreement, dated May 1, 2013, between The Mechanical
Contractors Association of Maryland, Inc. and Plumbers & Steamfitters U.A. Local
486 of Baltimore, Maryland.

 

39.Marketing Agreement, dated May 1, 2013, between The Mechanical Contractors
Association of Maryland, Inc. and Plumbers and Steamfitters U.A. Local 486 of
Baltimore, Maryland.

 

 

 

 

 

Schedule 5.25

 

 

 

Material Agreements

 

(a)None.

 

(b)None.

 

(c)

 

1.Agreement of Limited Partnership of Limbach Company LP (f/k/a Western Air
Limbach LP), dated December 13, 2002, as amended by that certain Amendment No. 1
to Agreement of Limited Partnership, dated July 13, 2007, and as further amended
by that certain Amendment No. 2 to Agreement of Limited Partnership, dated June
16, 2011.

 

2.Joint Venture Agreement, dated August 2012, between Limbach Company LLC and
Sauer Group, Inc.

 

3.Joint Venture Agreement, dated September 17, 2010, among Limbach Company LLC,
Coleman Spohn Corporation and Sauer Group, Inc.

 

4.Operating Agreement of HMPC, A Joint Venture, dated September 17, 2010,
between Limbach Company LLC, Coleman Spohn Corporation and Sauer Group, Inc.

 

5.Joint Venture Agreement, dated October 1, 2015, between Limbach Company LLC
and Dunbar Mechanical Inc.

 

6.Joint Venture Agreement, dated November 3, 2014, between Limbach Company LLC
and Gunthorpe Plumbing & Heating, Inc.

 

7.Joint Venture Agreement, dated April 20, 2015, between Limbach Company LLC and
Gunthrope Plumbing & Heating, Inc.

 

8.Joint Venture Agreement, dated October 19, 2015, between Limbach Company LLC
and Gunthrope Plumbing & Heating, Inc.

 

9.Joint Venture Agreement, dated December 1, 2015, between Limbach Company LLC
and Watson Bros. Service Company Inc.

 

10.Joint Venture Agreement, dated June 31, 2012, between Limbach Company LLC and
Professional Mechanical Sales and Services, Inc.

 

11.Joint Venture Agreement, dated October 8, 2015, between Limbach Company LLC
and Professional MSL Mechanical Contractors, LLC.

 

 

 

 

12.Joint Venture Agreement, dated February 16, 2012, between Limbach Company LLC
and Professional MSL Mechanical Contractors, LLC (Detroit Building Authority –
Public Safety Headquarters Project).

 

13.Operating Agreement of MSL Limbach, dated October 7, 2011, between Limbach
Company LLC and MSL Mechanical Contractors, LLC.

 

14.Joint Venture Agreement, dated February 16, 2012, between Limbach Company LLC
and MSL Mechanical Contractors, LLC (5 West/6 West Nursing Unit Renovations
Project).

 

15.Joint Venture Agreement, dated November 15, 2012, between Limbach Company LLC
and MSL Mechanical Contractors, LLC.

 

16.Joint Venture Agreement, dated December 22, 2014, between Limbach Company LLC
and MSL Mechanical Contractors, LLC.

 

17.Planned Maintenance Service Agreement, dated September 23, 2014, between HMPC
and The Ohio State University Medical Center.

 

18.Joint Venture Agreement, dated undated, between Limbach Company LLC and Rieck
Services.

 

(d)

 

1.Commercial Lease Agreement, dated September 9, 2011, between Harper Limbach
LLC, as Tenant, and Eagle Creek 5 & 6, LLC, as Landlord, as amended by the
Addendum, dated September 9, 2014, for the real property commonly known as 9051
Florida Mining Boulevard, Suite 103/104, Tampa, Florida.

 

2.Commercial Lease Agreement, dated November 18, 2009, between Limbach Company
LLC, as Tenant, and Jackson-Shaw / Brickyard Limited Partnership, LP, as
Landlord, for the real property commonly known as 13261 Mid-Atlantic Boulevard,
Laurel, Maryland (Building E).

 

3.Lease Agreement, dated May 20, 2010, between Limbach Company LLC, as Tenant,
and LIT-CHRIS/RIDGE, L.L.C., as Landlord, as amended by the First Amendment,
dated June 1, 2013, and the Second Amendment, dated May 12, 2015, for the real
property commonly known as 5C Chris Court, South Brunswick, New Jersey.

 

4.General Indemnity Agreement, dated March 30, 2010, made by Harper Limbach LLC,
Limbach Company LP f/k/a Western Air Limbach LP, Limbach Facility Services LLC,
Limbach Company LLC, collectively as Principal/Indemnitor, Limbach Management
Holding Company, LLC, Limbach Holdings LLC and FdG HVAC LLC, collectively as
Indemnitor, in favor of Arch Insurance Company, as Surety.

 

 

 

 

5.General Indemnity Agreement, dated March 11, 2016, made by MSL Limbach JV V,
MSL Mechanical Contractors, LLC and Limbach Company LLC, as Indemnitors, in
favor of Arch Insurance Company, Arch Reinsurance Company and any future or
present subsidiary or affiliate of Arch Insurance Company, as Surety.

 

6.General Agreement of Indemnity, dated July 12, 2016, made by Harper Limbach
LLC, Limbach Facility Services LLC, Limbach Company LLC, Limbach Holdings LLC,
Limbach Company LP, Harper Limbach Construction LLC, as Indemnitors, in favor of
Travelers Casualty and Surety Company of America.

 

(f)None.

 

(g)

 

1.RCH Bed Tower Expansion & Renovation, dated June 17, 2014, between Skanska USA
Building Inc. and Limbach Company LP.

 

2.Detroit Entertainment & Events Center, dated October 21, 2015, between Barton
Malow/Hunt, a Joint Venture, in Association with White Construction and MSL
Limbach JV V.

 

3.Boston Medical Center – Menino Addition and Renovation, dated March 11, 2014,
between Suffolk Construction Co., Inc. and Limbach Company LLC.

 

4.Washington Metropolitan Area Transit Authority Rehabilitation of Rail Yard
Facilities (Yard-1), Dated September 18, 2013, between Potomac Construction
Company, Inc. and Limbach Company LLC.  

 

(h)None.

 

(i)

 

1.Agreement and Plan of Merger, dated March 23, 2016, by and among Limbach
Holdings LLC, 1347 Capital Corp. and FdG HVAC LLC, solely in its capacity as the
Limbach Holders’ Representative.

 

 

 

 

 

Schedule 5.26

  

Options and Warrants, Etc.

 

1.4,600,000 warrants, each exercisable for one-half of one share common stock at
an exercise price of $5.75 per half share ($11.50 per whole share);

 

2.198,000 warrants, each exercisable for one-half of one share at an exercise
price of $5.75 per half share ($11.50 per whole share);

 

3.600,000 warrants, each exercisable for one share of common stock at an
exercise price of $15.00 per shares;

 

4.1,000,000 warrants, each exercisable for one share of common stock at an
exercise price of $11.50 per share;

 

5.666,667 warrants, each exercisable for one share of common stock at an
exercise price of $12.50 per share; and

 

6.$10 million of convertible preferred stock.

 

 

 

 

 

 

 

Schedule 6.30

 

 

 

Post-Closing Matters

 

 

 

None.