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Item 1.01
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Entry into a Material Definitive Agreement.
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On February 24, 2021,
Limbach Facility Services LLC (the “Borrower”), Limbach Holdings LLC (the “Intermediate Holdco”) and the
direct and indirect subsidiaries of the Borrower from time to time included as parties to the agreement (the “Guarantors”)
entered into a Credit Agreement (the “Credit Agreement”) by and among the Borrower, Intermediate Holdco, Guarantors,
the lenders party thereto from time to time, Wheaton Bank & Trust Company, N.A., a subsidiary of Wintrust Financial Corporation
(collectively, “Wintrust”), as administrative agent and L/C issuer, Bank of the West as documentation agent, M&T
Bank as syndication agent, and Wintrust as lead arranger and sole book runner.
In accordance with the
terms of the Credit Agreement, Lenders provide to Borrower (i) a $30,000,000 senior secured term loan (the “Term Loan”);
and (ii) a $25,000,000 senior secured revolving credit facility with a $5,000,000 sublimit for the issuance of letters of credit
(the “Revolving Loan” and, together with the Term Loan, the “Loans”).
Proceeds of the Loans
will be used to refinance certain existing indebtedness, finance working capital and other general corporate purposes and fund
certain fees and expenses associated with the closing of the Loans.
The Revolving Loan
bears interest, at the Borrower’s option, at either LIBOR (with a 0.25% floor) plus 3.5% or a base rate (with a 3.0%
floor) plus 0.50%, subject to a 50 basis point step-down based on the ratio between the senior debt of Limbach Holdings, Inc.
(the “Company”) and its subsidiaries to the EBITDA (earnings before interest, income taxes, depreciation and
amortization) of the Borrower and its subsidiaries for the most recently ended four fiscal quarters (the “Senior
Leverage Ratio”). The Term Loan bears interest, at the Borrower’s option, at either LIBOR (with a 0.25% floor)
plus 4.0% or a base rate (with a 3.0% floor) plus 1.00%, subject to a 50 (for LIBOR) or 75 (for base rate) basis point
step-down based on the Senior Leverage Ratio.
Borrower shall make principal
payments on the Term Loan in $500,000 installments on the last business day of each month commencing on March 31, 2021 with a final
payment of all principal and interest not sooner paid on the Term Loan due and payable on February 24, 2026. The Revolving Loan
shall mature and become due and payable by the Borrower on February 24, 2026.
The Loans are secured
by (i) a valid, perfected and enforceable lien of the Administrative Agent on the ownership interests held by each of the Borrower
and Guarantors in their respective subsidiaries; and (ii) a valid, perfected and enforceable lien of the Administrative Agent on
each of the Borrower and Guarantors’ personal property, fixtures and real estate, subject to certain exceptions and limitations.
Additionally, the re-payment of the Loans shall be jointly and severally guaranteed by each Guarantor.
The Credit Agreement contains
representations and warranties, covenants and events of default that are customary for facilities of this type, as more particularly
described in the Credit Agreement.
Borrower and its affiliates
maintain various commercial and service relationships with certain members of the syndicate and their affiliates in the ordinary
course of business.
The description of the
Credit Agreement contained herein is qualified in its entirety by reference to the Credit Agreement, a copy of which is filed herewith
as Exhibit 10.1 and is incorporated herein by reference.