Exhibit 10.1

 

Third Amendment to Credit Agreement

 

This Third Amendment to Credit Agreement (herein, this “Amendment”) is entered
into as of March 21, 2018, by and among Limbach Facility Services LLC, a
Delaware limited liability company (the “Borrower”), Limbach Holdings LLC, a
Delaware limited liability company (the “Parent”), Limbach Holdings, Inc., a
Delaware corporation (“Limbach, Inc.”), the other Guarantors party hereto, the
Lenders party hereto, and Fifth Third Bank, an Ohio banking corporation, as
Administrative Agent and L/C Issuer.

 

Recitals:

 

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

 

B.           The Borrower, the Lenders and the Administrative Agent have agreed
to join Limbach, Inc. as a Guarantor to the Credit Agreement, and to make
certain amendments to the Credit Agreement in connection therewith, in each
case, pursuant to the terms and conditions set forth herein.

 

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

 

Section 1.           Incorporation of Recitals; Defined Terms.

 

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

 

Section 2.           Amendments to Credit Agreement.

 

Upon satisfaction of the conditions precedent set forth in Section 3 hereof, the
Credit Agreement shall be and hereby is amended as follows:

 

2.1.       The definition of “Applicable Margin”, “Fixed Charge Coverage Ratio”,
“Interest Expense”, “Net Income”, “Senior Leverage Ratio”, “Subordinated Debt”,
“Tangible Net Worth”, and “Total Funded Debt” appearing in Section 1.1 of the
Credit Agreement are each amended by replacing the reference to “the Parent” in
each place it appears therein with “Limbach, Inc.”

 

     

 

 

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

 

“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) non-recurring, one-time costs and expenses approved by the Administrative
Agent in its sole discretion in an aggregate amount not to exceed $250,000
during such period, (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, and
(g) non-cash charges, including stock based compensation expenses, incurred
during such period, minus all amounts included in arriving at such Net Income in
respect of non-cash gains realized during such period.

 

“Excess Cash Flow” means, with respect to any period, the amount (if any) by
which (a) EBITDA (without giving effect to any pro forma adjustments made
pursuant to the definition of Net Income) during such period exceeds (b) the sum
(without duplication) of (i) the aggregate amount of payments (including
voluntary prepayments of the Term Loans) actually made by Limbach, Inc. and its
Subsidiaries during such period in respect of all principal on all Indebtedness
(whether at maturity, as a result of mandatory sinking fund redemption,
mandatory prepayment, acceleration or otherwise, but excluding payments made on
the Revolving Credit), plus (ii) the aggregate amount of Capital Expenditures
made by Limbach, Inc. and its Subsidiaries during such period and not financed
with proceeds of Indebtedness (but excluding credit extended under the Revolving
Credit), plus (iii) the aggregate amount of all federal, state and local taxes
paid in cash with respect to such period, plus (iv) the aggregate amount of
Interest Expense for such period paid in cash, plus (v) the cash portion of any
Restricted Payments made pursuant to Section 6.15(b) or 6.15(c), plus (vi) the
cash portion of any Legacy Claims during such period in an aggregate amount not
to exceed $500,000 during such period and in an aggregate amount not to exceed
$2,500,000 during the term of this Agreement, plus (vii) transaction expenses
paid in cash during such period in connection with Permitted Acquisitions,
whether or not consummated, not to exceed $50,000 in the aggregate during such
period.

 

“Fixed Charges” means, with reference to any period, the sum of (a) all
scheduled payments of principal made or to be made during such period with
respect to Indebtedness (for clarity, excluding mandatory prepayments pursuant
to Section 2.8(b)(v)) (“Principal Payments”) of Limbach, Inc. and its
Subsidiaries, plus (b) the cash portion of any Interest Expense for such period,
plus (c) Restricted Payments made by Limbach, Inc. and its Subsidiaries during
such period pursuant to Section 6.15(b), plus (d) without duplication, federal,
state, and local income taxes paid in cash by Limbach, Inc. and its Subsidiaries
during such period.

 

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

 

“L/C Sublimit” means $8,000,000, as reduced pursuant to the terms hereof.

 

2.3.       Section 1.1 of the Credit Agreement is amended to add the following
new defined term in its appropriate alphabetical position to read in its
entirety as follows:

 

“Third Amendment Effective Date” means March 21, 2018.

 

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

 

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

 

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

 

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

 

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2.6.       Clause (a) of Section 6.1 of the Credit Agreement is amended by
replacing the reference to “the Parent” in each place it appears therein with
“Limbach, Inc.”

 

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

 

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

 

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

 

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2.8.       Clauses (d), (g) and (k) of Section 6.1 of the Credit Agreement are
each amended by replacing the reference to “the Parent” in each place it appears
therein with “Limbach, Inc.”

 

2.9.       The last sentence of Section 6.2 of the Credit Agreement is amended
and restated in its entirety to read as follows:

 

Limbach, Inc., 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 Administrative Agent in connection with any inspections,
examinations, or audits of any of the Loan Parties performed by the
Administrative Agent under this Section 6.2.

 

2.10       Clause (e) of Section 6.11 of the Credit Agreement is amended and
restated in its entirety to read as follows:

 

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

 

2.11.       Clause (h) of Section 6.13 of the Credit Agreement is amended by
replacing the reference to “the Borrower” appearing therein with “Limbach, Inc.”

 

2.12.       Clause (d) of Section 6.14 of the Credit Agreement is amended and
restated in its entirety to read as follows:

 

(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;

 

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2.13.       Section 6.15 of the Credit Agreement is amended and restated in its
entirety to read as follows:

 

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:

 

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

 

(b)       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 $100,000
in any fiscal year of Limbach, Inc. or $500,000 in the aggregate;

 

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

 

2.14.       Clauses (b), (c) and (d) of Section 6.20 of the Credit Agreement are
each amended by replacing the reference to “the Parent” in each place it appears
therein with “Limbach, Inc.”

 

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

 

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

 

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(A)       notice of Limbach, Inc.’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 Limbach, Inc. to be in compliance with such
covenants,

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding anything to the contrary in this Agreement, upon timely receipt
by Limbach, Inc. 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.

 

2.16.       Clause (e)(ii) of Section 6.20 of the Credit Agreement is amended by
replacing the reference to “the Parent” in each place it appears therein with
“Limbach, Inc.”

 

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2.17.       Section 6.25 of the Credit Agreement is amended and restated in its
entirety to read as follows:

 

           Section 6.25.           Limitations on Limbach, Inc. and the Parent.
(a) Limbach, Inc. shall not, directly or indirectly, (i) 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 (ii) 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:

 

(A)       investments in the Parent, Borrower and their Subsidiaries permitted
hereunder,

 

(B)       the undertaking of all actions necessary or advisable in connection
with being a publicly-traded company whether under the applicable laws of the
U.S. Securities and Exchange Commission or the rules of any market on which the
equity securities of Limbach, Inc. are traded or quoted, including the NASDAQ
Capital Market, and 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,

 

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

 

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

 

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

 

(F)       any other transaction or activity that Limbach, Inc. is permitted to
take under any Loan Document,

 

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

 

(H)       financing activities, including the issuance of equity securities, and
to the extent expressly permitted hereby, the issuance of debt securities, the
providing of guarantees, payment of dividends, and making contributions to the
capital of the Parent and the Borrower,

 

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(I)       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),

 

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

 

(K)       activities and contractual rights and obligations incidental and
reasonably related to the businesses or activities described in clauses (A)
through (J) of this Section 6.25(a).

 

(b)       The Parent shall not, directly or indirectly, (i) 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 (ii) 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:

 

(A)       investments in the Borrower and its Subsidiaries permitted hereunder,

 

(B)       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,

 

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

 

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

 

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

 

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

 

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

 

(H)       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,

 

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(I)       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),

 

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

 

(K)       activities and contractual rights and obligations incidental and
reasonably related to the businesses or activities described in clauses (A)
through (J) of this Section 6.25(b).

 

2.18.       Clauses (m), (n) and (o) of Section 7.1 of the Credit Agreement are
each amended by replacing the reference to “the Parent” in each place it appears
therein with “Limbach, Inc.

 

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

 

2.20.       Schedule 5.10 to the Credit Agreement is amended and restated in its
entirety by Schedule 5.10 attached hereto.

 

Section 3.           Conditions Precedent.

 

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

 

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

 

           3.2.           Limbach, Inc. shall have executed and delivered to the
Administrative Agent an Additional Guarantor Supplement in the form of Exhibit G
to the Credit Agreement and an Assumption and Supplement Security Agreement in
the form of Schedule G to the Security Agreement.

 

           3.3.           The Administrative Agent shall have received evidence
of insurance for Limbach, Inc. required to be maintained under the Loan
Documents, naming the Administrative Agent as additional insured and lenders
loss payee, as applicable.

 

           3.4.           The Administrative Agent shall have received (i)
copies of the Organization Documents of Limbach, Inc., (ii) copies of
resolutions of the Board of Directors (or similar governing body) of Limbach,
Inc. authorizing the execution, delivery and performance of the Loan Documents
to which it is a party, together with specimen signatures of the persons
authorized to execute such documents on the behalf of Limbach, Inc., and (iii) a
certificate of good standing for Limbach, Inc. from the office of the Secretary
of State of the State of Delaware (dated no earlier than thirty (30) days prior
to the date hereof), in each case, certified by a Duly Authorized Officer of
Limbach, Inc.

 

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           3.5.           The Administrative Agent shall have received financing
statement, tax and judgment lien search results against Limbach, Inc. and its
Property evidence the absence of Liens thereon (other than Permitted Liens).

 

           3.6.           The Administrative Agent shall have received a UCC
financing statement to be filed against Limbach, Inc., as debtor, in favor of
the Administrative Agent, as secured party.

 

           3.7.           The Administrative Agent shall have received the
favorable written opinion of counsel to Limbach, Inc., in form and substance
satisfactory to the Administrative Agent.

 

           3.8.           The Administrative Agent shall have received all
documentation and other information requested by any Lender required by bank
regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the Patriot Act; and the
Administrative Agent shall have received a fully executed IRS Form W-9 for
Limbach, Inc.

 

           3.9.           The Administrative Agent shall have received such
other agreements, instruments, documents and certificates as the Administrative
Agent may reasonably request.

 

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

 

Section 4.           Affirmation of Guarantors.

 

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

 

Section 5.           Acknowledgement of Liens.

 

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

 

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Section 6.           Representations and Warranties of Borrower and Guarantors.

 

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

 

Section 7.           Miscellaneous.

 

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

 

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

 

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

 

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

 

 - 12 - 

 

 

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

 

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

 

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

 

[Signature Pages to Follow]

 

 

 - 13 - 

 

 

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

 

 

  “Borrower”   Limbach Facility Services LLC           By John T. Jordan, Jr.  
  Name: John T. Jordan, Jr.     Title:

Executive Vice President, Chief

Financial Officer and Treasurer

 

 

[Signature Page to Third Amendment to Credit Agreement (Limbach Facility
Services LLC)]

 

 

 

 

  “Guarantors”       Limbach Holdings, Inc.         By Scott Wright     Name:
Scott Wright     Title: Corporate Secretary           Limbach Holdings LLC      
    By John T. Jordan, Jr.     Name: John T. Jordan, Jr.     Title:

Executive Vice President, Chief

Financial Officer and Treasurer

          Limbach Company LLC           By John T. Jordan, Jr.     Name: John T.
Jordan, Jr.     Title:

Executive Vice President, Chief

Financial Officer and Treasurer

          Harper Limbach LLC           By John T. Jordan, Jr.     Name: John T.
Jordan, Jr.     Title:

Executive Vice President and

Treasurer

          Limbach Company LP           By John T. Jordan, Jr.     Name: John T.
Jordan, Jr.     Title:

Executive Vice President, Chief

Financial Officer and Treasurer

          Harper Limbach Construction LLC           By John T. Jordan, Jr.    
Name: John T. Jordan, Jr.     Title:

Executive Vice President and

Treasurer

 

[Signature Page to Third Amendment to Credit Agreement (Limbach Facility
Services LLC)]

  

 

 

 

   “Lenders”  

Fifth Third Bank, an Ohio banking

    corporation, as a Lender, as L/C Issuer, and as

    Administrative Agent

          By S. Bradley McDougall     Name: S. Bradley McDougall     Title: Vice
President

 

[Signature Page to Third Amendment to Credit Agreement (Limbach Facility
Services LLC)]

 

 

 

 

 

CIBC Bank USA, formally known as The

    PrivateBank and Trust Company, as a Lender

          By David L. Sauerman     Name: David L. Sauerman     Title: Managing
Member

 

[Signature Page to Third Amendment to Credit Agreement (Limbach Facility
Services LLC)] 

 

 

 

 

 

Wheaton Bank & Trust Company, as a

    Lender

          By Christopher Van Tassel     Name: Christopher Van Tassel     Title:
Vice President

 

[Signature Page to Third Amendment to Credit Agreement (Limbach Facility
Services LLC)]

 

 

 

 

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

 

[Signature Page to Third Amendment to Credit Agreement (Limbach Facility
Services LLC)]

 

 

 

 

Exhibit E 

___________________________________________________

 

Compliance Certificate

 

Date:  __________, 20__

 

To:

Fifth Third Bank, as Administrative

Agent under, and the Lenders party to, the

Credit Agreement described below

 

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

 

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

 

1.           I am the duly elected/appointed ____________ of Limbach, Inc.

 

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

 

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

 

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

 

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

 

 

 

 

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

 

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

 

8.           Schedule III hereto sets forth a list of all non-recurring,
one-time costs and expenses incurred during the accounting period covered by the
attached financial statements.

 

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

 

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

 

________________________________________________________________       

 

________________________________________________________________       

 

________________________________________________________________       

 

________________________________________________________________       

 

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

 

  Limbach Holdings, Inc.                   By       Name       Title  

 

 - 2 - 

 

 

Schedule I

to Compliance Certificate

 

Limbach Facility Services LLC

 

Compliance Calculations

for Credit Agreement dated as of July 20, 2016

 

Calculations as of _____________, 20__

 

 

 

A. Reserved.   B. Senior Leverage Ratio (Section 6.20(b))     1. Total Funded
Debt[1] $___________   2. Subordinated Debt $___________   3. Line B1 minus Line
B2 $___________   4. Net Income for past 4 quarters $___________   5. Interest
Expense for past 4 quarters $___________   6. Federal, state and local income
taxes for past 4 quarters $___________   7. Depreciation and amortization
expense for past 4 quarters $___________   8. Transaction expenses incurred in
connection with Permitted Acquisitions, whether or not consummated (not to
exceed $50,000 in the aggregate) for past 4 quarters $___________   9.
Non-recurring, one-time costs and expenses approved by the Administrative Agent
in its sole discretion not to exceed $250,000 in the aggregate during such 4
quarters $___________   10. Losses or other charges related to Legacy Claims for
past 4 quarters in an amount not to exceed $500,000 during such 4 quarters (and
in an aggregate amount not to exceed $2,500,000 during the term of the Credit
Agreement) $___________   11. Non-cash charges, including stock based
compensation expenses, incurred during past 4 quarters $___________   12.
Non-cash gains realized during past 4 quarters $___________   13. Sum of Lines
B4, B5, B6, B7, B8, B9, B10, and B11, minus Line B12 (“EBITDA”) $___________

 

 

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

 

 

 

 

  14. Ratio of Line B3 to Line B13 (“Senior Leverage Ratio”) ____:1.00   15.
Senior Leverage Ratio (from Line B14) must not exceed ____:1.00   16. Limbach,
Inc. and its Subsidiaries are in compliance (circle yes or no) yes/no C. Fixed
Charge Coverage Ratio (Section 6.20(c))     1. EBITDA (from Line B13)
$___________   2. Capital Expenditures not financed with Indebtedness for past
4 quarters $___________   3. Line C1 minus Line C2 $___________   4. Regularly
Scheduled Principal Payments (excluding any Excess Cash Flow payment) for past
4 quarters $___________   5. Cash portion of Interest Expense for past 4
quarters $___________   6. Restricted Payments made pursuant to Section 6.15(b)
for past 4 quarters $___________   7. Federal, state and local income taxes paid
in cash for past 4 quarters $___________   8. Sum of Lines C4, C5, C6 and C7
(“Fixed Charges”) $___________   9. Ratio of Line C3 to Line C8 (“Fixed Charge
Coverage Ratio”) ____:1.00   10. Fixed Charge Coverage Ratio (from Line C9) must
not be less than 1.25:1.00   11. Limbach, Inc. and its Subsidiaries are in
compliance (circle yes or no) yes/no D. Minimum Tangible Net Worth
(Section 6.20(d))     1. Capital stock (less treasury stock), paid-in capital
surplus and retained earnings (deficit) of Limbach, Inc. 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 $___________

 

   

 

 - 2 - 

 

 

  4. Amount by which aggregate inventories or aggregate securities appearing on
the asset side of such consolidated balance sheet exceed the lower of cost or
market value (at the date of such balance sheet) $___________   5. Any write-up
in the book amount of any asset resulting from a revaluation thereof from the
book amount entered upon acquisition of such asset $___________   6. Sum of
Lines D2, D3, D4 and D5 $___________   7. Line D1 minus Line D6 $___________  
8. Line D7 must be less than $___________   9. The Loan Parties are in
compliance (circle yes or no) yes/no

 

 - 3 - 

 

 

Schedule II 

to Compliance Certificate

 

Limbach Facility Services LLC

 

Financial Statements

for Credit Agreement dated as of July 20, 2016

 

 

[See attached.]

 

 

 

 

Schedule III 

to Compliance Certificate

 

Limbach Facility Services LLC

  

Schedule of Non-Recurring, One-Time Costs and

Expenses and Non-Cash Charges

  

 

 

 

Schedule 5.9

to Compliance Certificate

 

Limbach Facility Services LLC

 

Updated Schedule 5.9

for Credit Agreement dated as of July 20, 2016

  

 

 

 

Schedule 5.10

 

Subsidiaries

 

List of Subsidiaries of each Loan Party:

 

1.Limbach Holdings LLC is a wholly-owned subsidiary of Limbach Holdings, Inc.

 

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

 

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

 

4.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 Holdings LLC Delaware Limbach Holdings, Inc. 100%
membership interest 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)