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Item 1.01
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Entry into a Material Definitive Agreement
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On September 19, 2018, Limbach Holdings,
Inc. (the “Company”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among
the Company, Limbach Facility Services LLC, a wholly-owned subsidiary of the Company (“Buyer”), LED Construction Services,
Inc. (“Seller”), Peter J. Corogin (“Corogin”), Stephen E. Dunbar (“Dunbar” and, together with
Corogin, the “Stockholders”), and Dunbar Mechanical, Inc. (“DMI”). Pursuant to the terms of the Stock Purchase
Agreement, Buyer will acquire from the Seller all of the issued and outstanding capital stock of DMI, resulting in DMI becoming
an indirect wholly owned subsidiary of the Company.
The aggregate consideration to be paid by
the Company to the Seller will be approximately $20.2 million, comprised of (a) approximately $12.6 million in cash, subject to
a customary purchase price adjustment mechanism based on adjusted working capital at closing, (b) 402,259 shares of the Company’s
common stock, par value $0.0001 per share (“Company Shares”) (valued at $9.94 per share based on the average closing
price over the 30-day period prior to the date of signing), and (c) a subordinated promissory note of the Buyer in the principal
amount of $3.6 million, bearing interest at 6% per annum and payable on the second anniversary of the closing date.
Consummation of the transaction contemplated
by the Stock Purchase Agreement is subject to customary conditions of the respective parties, including receipt of consents of
applicable third parties and governmental authorities and the accuracy of the representations and warranties of the other parties
(subject to certain exceptions) and the performance in all material respects of the other parties’ respective covenants under
the Stock Purchase Agreement. In addition, consummation of the transactions contemplated by the Stock Purchase Agreement is subject
to other closing conditions, including, among others: (i) that there has been no material adverse effect on DMI’s business
or any event that could reasonably be expected to result in such a material adverse effect; and (ii) that the Buyer shall have
received financing to pay the purchase price and consummate the transactions contemplated by the Stock Purchase Agreement on terms
satisfactory to the Buyer in its sole discretion.
The Stock Purchase Agreement contains customary
representations, warranties, agreements and other obligations of the Seller, the Stockholders, the Company and the Buyer. The Seller
and the Stockholders, on the one hand, and the Company and the Buyer, on the other hand, have generally agreed to indemnify each
other for breaches of the representations and warranties contained in the Stock Purchase Agreement, subject to certain survival
period limitations, deductibles and caps.
The Stock Purchase Agreement may be terminated
under certain limited circumstances at any time prior to the closing. If the Stock Purchase Agreement is terminated pursuant to
the provisions of the Stock Purchase Agreement, all further obligations of the parties thereunder will terminate without any liability
of any party thereto, other than any obligation or liability arising from any prior willful breach by such party.
A copy of the Stock Purchase Agreement is
filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of
the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference thereto. The Stock Purchase
Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such
agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes
of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties
in connection with negotiating such agreement. The representations, warranties and covenants of the Seller and Stockholders
in the Stock Purchase Agreement are also modified in important part by the underlying disclosure letter which is not filed publicly
and which is subject to a contractual standard of materiality different from that generally applicable to stockholders and was
used for the purpose of allocating risk among the parties rather than establishing matters as facts. We do not believe that the
disclosure letter contains information that is material to an investment decision.