EXHIBIT 10.22

THIRD AMENDMENT TO SECOND

AMENDED AND RESTATED CREDIT AGREEMENT

THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is effective as of the 24th day of September, 2010 (the “Amendment
Effective Date”).

RECITALS

WHEREAS, MATRIX SERVICE COMPANY, a Delaware corporation (the “Borrower”),
JPMORGAN CHASE BANK, N.A., as Administrative Agent (the “Administrative Agent”)
and as a Lender and Issuing Bank, and the financial institutions therein named
as Lenders, are parties to that certain Second Amended and Restated Credit
Agreement dated as November 30, 2006, as it has been amended by (i) that certain
First Amendment to Second Amended and Restated Credit Agreement dated July 6,
2007 (the “First Amendment”) and (ii) that certain Second Amendment to Second
Amended and Restated Credit Agreement dated February 11, 2009 (as so amended,
and as it may be amended, supplemented or restated from time to time hereafter
in accordance with its terms, the “Credit Agreement”);

WHEREAS, all capitalized terms used but not defined in these Recitals shall have
the meanings assigned to them in the Credit Agreement;

WHEREAS, the Borrower has requested amendments to certain of the covenants and
other provisions of the Credit Agreement, and the Lenders have agreed to such
request on the terms and conditions and subject to certain other amendments set
forth in this Amendment.

NOW THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto agree as follows:

1. Incorporation by Reference; Defined Terms. Capitalized terms used but not
defined in this Amendment (including the Recitals) shall have the meanings given
to them in the Credit Agreement. All terms defined in the foregoing Recitals are
incorporated herein by reference.

The term “Loan Documents” is hereby amended to include the Credit Agreement, as
amended by this Amendment, all as they may be further amended from time to time
with the consent of the Administrative Agent and, to the extent required by the
Credit Agreement, the Lenders.

The term “Agreement”, as used in the Credit Agreement, is hereby amended to mean
the Credit Agreement, as amended by this Amendment and as it may be further
amended from time to time with the consent of the Administrative Agent and, to
the extent required by the Credit Agreement, the Lenders.

The term “Credit Agreement” in all other Loan Documents is hereby amended to
mean the Credit Agreement, as amended by this Amendment and as it may be further
amended from time to time with the consent of the Administrative Agent and, to
the extent required by the Credit Agreement, the Lenders.

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2. Amendments. The Credit Agreement is hereby amended as follows:

(a) The definition of “Consolidated EBIT” is hereby deleted.

(b) The definition of “Consolidated EBITDA” is amended by adding the following
sentence at the end of such definition: “Notwithstanding the foregoing, for the
purpose of determining Consolidated EBITDA for periods ending on or before
June 30, 2011, the charges incurred in relation to the California wage and hour
class action lawsuit shall be added.”

(c) In the definition of “Consolidated EBITDA,” after the reference to “Senior
Leverage Ratio” there is hereby added “or Fixed Charge Coverage Ratio,”.

(d) The Numerator for the definition of Fixed Charge Coverage Ratio is hereby
amended to read: “Consolidated EBITDA for the previous four fiscal quarters
ending on such day less all Capital Expenditures during the same period.”

(e) The Compliance Certificate attached as Exhibit C to the Credit Agreement is
hereby replaced with Exhibit C attached to this Amendment.

3. Waiver. The Fixed Charge Coverage Ratio for the period ended June 30, 2010
was not in compliance with Section 6.19 of the Credit Agreement. Borrower has
requested that the Lenders grant a waiver of such Default, and the Lenders have
agreed. Accordingly, Lenders hereby waive the provisions of Section 6.19 of the
Credit Agreement as they apply to the period ended June 30, 2010. Also, more
than thirty (30) days prior to the date of this Amendment Borrower formed a new
Subsidiary, Matrix Service International, LLC, a Delaware limited liability
company (the “New Subsidiary”), and prior to the date of this Amendment the
Borrower did not provide or cause to be provided to the Agent the documents
contemplated by Section 5.09 of the Credit Agreement in regard to the New
Subsidiary. Borrower has requested that the Lenders grant a waiver of such
Default, and the Lenders have agreed. Accordingly, Lenders hereby waive the
provisions of Section 5.09 of the Credit Agreement as they apply to the New
Subsidiary. These waivers shall be limited precisely as provided for herein
(including without limitation any time periods specified) and none of them shall
be deemed to be a waiver of, amendment to, consent to or modification of (i) any
other term or provision of the Credit Agreement or any of the other Loan
Documents or (ii) any other event, condition, or transaction on the part of the
Borrower or any other Person which would require the consent of the Agent or any
of the Lenders.

4. Effect of this Amendment. This Amendment shall not be deemed to be a waiver
of, amendment to, consent to or modification of any term or provision of the
Credit Agreement or of any term or provision of any of the other Loan Documents,
except as specifically set forth herein, and this Amendment shall not be deemed
to be a waiver of, amendment to, or consent to or modification of any event,
condition, or transaction on the part of the Borrower or any other Person except
as specifically set forth herein.

 

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5. Conditions. This Amendment shall be effective as of the Amendment Effective
Date, provided the following conditions precedent are satisfied:

(a) Administrative Agent’s receipt of the following, each of which shall be
originals or facsimile or portable document format (PDF) copies (followed
promptly by originals) unless otherwise specified, each properly executed, each
dated the Amendment Effective Date (or, in the case of certificates of
governmental officials, a recent date before the date of the Amendment) and each
in form and substance satisfactory to Administrative Agent and its legal
counsel:

(i) executed counterparts of this Amendment and all other documents and
instruments requested by Administrative Agent, sufficient in number for
distribution to each Lender and Borrower;

(ii) a corporate certificate with resolutions in the form required by
Administrative Agent;

(iii) fee letters in form acceptable to the Administrative Agent;

(iv) such other certificates of resolutions or other action, incumbency
certificates and/or other certificates of Authorized Officers of each Credit
Party as Lender may require evidencing the identity, authority and capacity of
each Authorized Officer thereof authorized to act as an Authorized Officer in
connection with this Amendment and the other Loan Documents to which such Credit
Party is a party;

(v) fully executed originals of the Ratification of Security Agreement and
Release and Ratification of Subsidiary Guaranty, in the forms set forth on
Schedules “1-A” and “1-B”, respectively, attached hereto, for each party thereto
(collectively the “Ratifications”);

(vi) fully executed original of a Pledge and Security Agreement and Subsidiary
Guaranty by the New Subsidiary in form acceptable to the Administrative Agent,
which shall hereafter be part of and included within the “Loan Documents” under
the Credit Agreement; and

(vii) a favorable written opinion (addressed to the Administrative Agent and the
Lenders and dated the Amendment Effective Date) of Conner & Winters, LLP,
counsel for the Borrower and the Subsidiaries, substantially in the form of
Annex 1 attached to this Amendment, and the Borrower hereby requests such
counsel to deliver such opinion;

(b) Administrative Agent’s receipt of such other assurances, certificates,
documents, and consents as Administrative Agent reasonably may require;

(c) the Borrower shall have paid all fees required by the fee letters; and

 

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(d) unless waived by Administrative Agent, Borrower shall have paid all fees,
expenses and disbursements of any law firm or other external counsel for
Administrative Agent to the extent invoiced prior to the date hereof, plus such
additional amounts of such fees, expenses and disbursements as shall constitute
its reasonable estimate thereof incurred or to be incurred by it through the
closing proceedings as to this Amendment (provided that such estimate shall not
thereafter preclude a final settling of accounts between Borrower and
Administrative Agent).

6. Acknowledgment and Ratification; Representations and Warranties. The Borrower
acknowledges and agrees that the Credit Agreement shall remain in full force and
effect as amended hereby. Borrower represents and warrants to the Lenders that
as of the date of execution of this Amendment and as of the Amendment Effective
Date:

(a) the representations and warranties set forth in the Credit Agreement are
true and correct in all material respects as though made on the date hereof,
except to the extent that any of them speak to a different specific date, in
which case they are true and correct as of such earlier date, and for purposes
of this Amendment the representations and warranties contained in subsection
(a) of Section 3.04 shall be deemed to refer to the most recent financial
statements furnished by the Borrower pursuant to clauses (a) and (b) of
Section 5.01;

(b) no Default or Event of Default exists;

(c) neither the Borrower nor any of the Guarantors owns or has any interest in
any “commercial tort claim” (as that term is defined in 12A Okla. Stat. §
1-9-102(a)(13) as of the Amendment Effective Date) that has not been
specifically described in a Security Agreement as part of the collateral
thereunder;

(d) the execution, delivery and performance by the Borrower of this Amendment
has been duly authorized by all necessary corporate action and do not and will
not contravene the terms of any of the Borrower’s organizational documents, any
law or any indenture, loan or credit agreement, or any other material agreement
or instrument to which the Borrower is a party or by which it is bound or to
which it or its properties are subject;

(e) no authorizations, approvals or consents of, and no filings or registrations
with, any Governmental Authority or any other Person are necessary for the
execution, delivery or performance by the Borrower of this Amendment or for the
validity or enforceability thereof, other than routine informational filings
with the SEC and/or other Governmental Authorities;

(f) this Amendment constitutes the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with its terms, and the
Ratifications constitute the legal, valid and binding obligations of the
Guarantors party thereto, enforceable against such Guarantors in accordance with
their terms, in all cases except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally or by equitable

 

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principles relating to enforceability, and by judicial discretion regarding the
enforcement of or any applicable laws affecting remedies (whether considered in
a court of law or a proceeding in equity); and

(g) Schedule 3.13 attached to the Second Amendment remains an accurate list of
and other information regarding the Borrower and all Subsidiaries of the
Borrower as of the date of this Amendment, setting forth their respective
jurisdictions of organization and the percentage of the respective capital stock
or other ownership interests of the Subsidiaries owned by the Borrower or other
Subsidiaries, except that omitted from such schedule is the New Subsidiary,
which is a wholly-owned Subsidiary of Borrower and for which there does not
currently exist any operating agreement or limited liability company agreement.
All of the issued and outstanding shares of capital stock or other Equity
Interests in such Subsidiaries have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and are fully paid and non-assessable.

7. Defaults Unaffected. Except as may be expressly set forth herein, nothing
contained in this Amendment shall prejudice, act as, or be deemed to be a waiver
of any Default or Event of Default or any right or remedy available to
Administrative Agent or any Lender by reason of the occurrence or existence of
any fact, circumstance or event constituting a Default or Event of Default.

8. Governing Law; Miscellaneous. This Amendment shall be governed by the
internal laws of the State of Oklahoma. Unless stated otherwise, (a) the
singular number includes the plural and vice versa and words of any gender
include each other gender, in each case, as appropriate, (b) headings and
captions may not be construed in interpreting provisions, (c) this Amendment may
be executed in any number of counterparts with the same effect as if all
signatories had signed the same document, and all of those counterparts must be
construed together to constitute the same document, and (d) this Amendment shall
be effective when it has been executed by the parties hereto and each party has
notified the Administrative Agent by facsimile transmission or telephone that it
has taken such action.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered by their proper and duly authorized officers as of the day and
year first above written.

 

MATRIX SERVICE COMPANY,

a Delaware corporation

By:  

/S/ Thomas E. Long

  Thomas E. Long, Chief Financial Officer

 

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JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, Lender

and Issuing Bank

By:  

/S/ Jennifer Kalvaitis

  Jennifer Kalvaitis, Vice President

 

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WELLS FARGO & CO. successor by merger to Wachovia Bank, National Association By:
 

/S/ Laura Christofferson

  Laura Christofferson, Vice President

 

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AMEGY BANK NATIONAL ASSOCIATION By:  

/S/ Dan Cox

  Dan Cox, Vice President

 

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BANK OF AMERICA, N.A., successor

by merger to LaSalle Bank National Association

By:  

/S/ Mark E. Wood

  Mark E. Wood, Senior Vice President

 

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BMO CAPITAL MARKETS FINANCING, INC. By:  

/S/ John Armstrong

  John Armstrong, Director

 

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Exhibit “C”

COMPLIANCE CERTIFICATE

 

To: The Lenders parties to the

Agreement Described Below

This Compliance Certificate is furnished pursuant to that certain Second Amended
and Restated Credit Agreement dated as of November 30, 2006 (as amended,
modified, renewed or extended from time to time, the “Agreement”) among Matrix
Service Company, a Delaware corporation (the “Borrower”), the Lenders party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders
and as Issuing Bank. Unless otherwise defined herein, capitalized terms used in
this Compliance Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am the duly elected chief financial officer of the Borrower;

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

3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below;

4. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrower’s compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct;

5. Schedule II attached hereto sets forth the determination of the interest
rates and other rates listed therein; and

6. Schedule III attached hereto sets forth the various reports and deliveries
which are required at this time under the Agreement and the other Loan Documents
and the status of compliance.

Described below are the exceptions, if any, to paragraph 3 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:

 

 

 

 

 

 

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The foregoing certifications, together with the computations set forth in
Schedules I, II and III hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this              day of
                    ,             .

 

       Chief Financial Officer,   MATRIX SERVICE COMPANY  

 

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SCHEDULE I TO COMPLIANCE CERTIFICATE

Compliance as of             ,          with certain

Provisions of the Agreement

All Calculations Below as of

                    , 20     Except

As Provided Otherwise Below

 

1. Detailed Calculation of Consolidated EBITDA for Fiscal Year to Date

 

2. Detailed Calculation of Consolidated EBITDA for Previous Four Fiscal Quarters

 

3. Detailed Calculation of Consolidated EBITDA for the most recently ended
calendar quarter

 

4. Detailed Calculation of Senior Leverage Ratio

 

5. Detailed Calculation of Fixed Charge Coverage Ratio

 

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6. Consolidated Tangible Net Worth Required

 

Consolidated Tangible Net Worth – Starting Point:

   $ 110,000,000.00

PLUS all Net Cash Proceeds of issuances of

  

           EquityInterests (including common stock,

  

           preferred stock, warrants or

  

           other equity (except exercise of options))

  

           after 11/30/08

         

PLUS 50% of positive Consolidated Net Income

  

           after 11/30/08

         

Total

         

 

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7. Calculation of Asset Coverage Ratio

 

Consolidated Eligible Assets:          

           Accounts:

  

           Less:Accounts unpaid

             morethan 90 days past

             dateof invoice

   (                              )                    Inventory          
           Net PP&E                       

           Total Consolidated

             Eligible Assets

          Funded Bank Debt:                       

Asset Coverage Ratio (Consolidated Eligible Assets/

             Funded Bank Debt)

         

 

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Schedule II to Compliance Certificate

Interest and Other Rates

 

APPLICABLE RATE

Actual Results: Senior Leverage Ratio:             

For Fiscal Quarter Ending                                 

     

Mark As

Applicable with

“X”

  

Senior Leverage

Ratio

  

Eurodollar

Spread (bps)

  

ABR

Spread

(bps)

     ³ 2.00 to 1.00    275    175     

< 2.00 to 1.00, but ³

1.50 to 1.00

   250    150     

< 1.50 to 1.00, but ³

1.00 to 1.00

   225    125      < 1.00 to 1.00    200    100

 

  Unused Revolving Credit Facility Fee

Actual Results: Senior Leverage Ratio:             

For Fiscal Quarter Ending                                 

     

Mark as

Applicable with

“X”

   Senior Leverage Ratio   

        Unused Revolving Credit

        Facility Fee (bps)

     ³ 2.00 to 1.00             50     

< 2.00 to 1.00, but ³

1.50 to 1.00

           50     

< 1.50 to 1.00, but ³

1.00 to 1.00

            40      < 1.00 to 1.00             35

 

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Schedule III to Compliance Certificate

List of Reports and Deliveries Due at this Time

and Status

 

Report or Delivery Due

 

  Status                                                                        
                           

 

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Schedule “1-A”

(Ratification of Security Agreement and Release)

 

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RATIFICATION OF

SECURITY AGREEMENTS AND RELEASE

Reference is made to that certain Third Amendment to Second Amended and Restated
Credit Agreement dated as of September             , 2010 (the “Agreement”),
among Matrix Service Company, a Delaware corporation (the “Borrower”), the
Lenders signatory thereto (the “Lenders”), and JPMorgan Chase Bank, N.A., as a
Lender, Issuing Bank and as Administrative Agent thereunder (“Agent”).

1. Terms used herein shall have the meanings ascribed to them in that certain
Second Amended and Restated Credit Agreement dated as of November 30, 2006, as
amended by that certain First Amendment to Second Amended and Restated Credit
Agreement dated July 6, 2007, by that certain Second Amendment to Second Amended
and Restated Credit Agreement dated February 11, 2009, and by the Agreement (as
so amended, the “Credit Agreement”), unless otherwise defined herein.

2. As inducement for and in consideration of the Agent and Lenders executing the
Agreement, each of the undersigned Borrower and Subsidiaries hereby ratifies and
confirms the Security Agreement to which it is a party in all respects and
agrees that, notwithstanding the Agreement, each such Security Agreement remains
in full force and effect, and agrees that the term “Credit Agreement” as used in
its Security Agreement shall hereafter mean the Credit Agreement described
above.

3. Borrower and each Subsidiary signatory hereto, for itself and on behalf of
all its predecessors, successors, assigns, agents, employees, representatives,
officers, directors, general partners, limited partners, joint shareholders,
beneficiaries, trustees, administrators, subsidiaries, affiliates, employees,
servants and attorneys (collectively the “Releasing Parties”), hereby releases
and forever discharges Agent, Issuing Bank and each Lender and their respective
successors, assigns, partners, directors, officers, agents, attorneys, and
employees from any and all claims, demands, cross-actions, controversies, causes
of action, damages, rights, liabilities and obligations, at law or in equity
whatsoever, known or unknown, whether past, present or future, now held, owned
or possessed by the Releasing Parties, or any of them, or which the Releasing
Parties or any of them may, as a result of any actions or inactions occurring on
or prior to the date hereof, hereafter hold or claim to hold under common law or
statutory right, arising, directly or indirectly, out of the Loan or any of the
Loan Documents or any of the documents, instruments or any other transactions
relating thereto or the transactions contemplated thereby. Borrower and each
Subsidiary signatory hereto understands and agrees that this is a full, final
and complete release and agrees that this release may be pleaded as an absolute
and final bar to any or all suit or suits pending or which may hereafter be
filed or prosecuted by any of the Releasing Parties, or anyone claiming by,
through or under any of the Releasing Parties, in respect of any of the matters
released hereby, and that no recovery on account of the matters described herein
may hereafter be had from anyone whomsoever, and that the consideration given
for this release is no admission of liability.

4. Borrower and each Subsidiary hereby confirms, reaffirms and restates that
(a) the representations and warranties made by it in the Security Agreement to
which it is a party are true and correct on and as of the date hereof (except to
the extent such representations and warranties relate solely to a specific
earlier date) and (b) no Default, as defined in such Security Agreement, has
occurred and is continuing on the date hereof, except as has been specifically
waived.

 

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5. This agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this agreement by signing any such counterpart.

IN WITNESS WHEREOF, the Borrower hereby executes this Ratification of Security
Agreements and Release as of September     , 2010.

 

MATRIX SERVICE COMPANY, a Delaware corporation By:  

 

  Thomas E. Long, Chief Financial Officer

 

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IN WITNESS WHEREOF, each of the Subsidiaries has caused this Ratification of
Security Agreements and Release to be duly executed by its authorized officer as
of September     , 2010.

 

MATRIX SERVICE INC., an Oklahoma corporation; MATRIX SERVICE INC., an Ontario,
Canada corporation; MATRIX SERVICE ULC, an Alberta unlimited liability
corporation

By:

 

 

  James P. Ryan, President MATRIX SERVICE INDUSTRIAL CONTRACTORS, INC. (formerly
known as MATRIX SERVICE MID-CONTINENT, INC.), an Oklahoma corporation; MATRIX
SERVICE SPECIALIZED TRANSPORT, INC. (formerly known as FRANK W. HAKE, INC.), a
Pennsylvania corporation; I & S, INC., a Pennsylvania corporation; MATRIX
SERVICE INDUSTRIAL CONTRACTORS CANADA, INC., a Delaware corporation; MATRIX
SERVICE INDUSTRIAL CONTRACTORS ULC, a Nova Scotia unlimited company, S.M.
ELECTRIC COMPANY, INC., a New Jersey corporation

By:

 

 

  Matthew J. Petrizzo, President

 

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The foregoing agreed to and accepted by Agent as of September     , 2010.

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By:

 

 

  Jennifer Kalvaitis, Vice President

 

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Schedule “1-B”

(Ratification of Subsidiary Guaranty)

 

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RATIFICATION OF AND AMENDMENT TO SUBSIDIARY GUARANTY

Reference is made to that certain Second Amendment to Second Amended and
Restated Credit Agreement dated as of September     , 2010 (the “Agreement”),
among Matrix Service Company, a Delaware corporation (the “Borrower”), the
Lenders signatory thereto (the “Lenders”), and JPMorgan Chase Bank, N.A., as a
Lender, Issuing Bank and as Administrative Agent thereunder (“Agent”).

1. Terms used herein shall have the meanings ascribed to them in that certain
Second Amended and Restated Credit Agreement dated as of November 30, 2006, as
amended by that certain First Amendment to Second Amended and Restated Credit
Agreement dated July 6, 2007, as amended by that certain Second Amendment to
Second Amended and Restated Credit Agreement dated February 11, 2009, and as
amended by the Agreement (as so amended, the “Credit Agreement”), unless
otherwise defined herein.

2. As inducement for and in consideration of the Lenders and Agent executing the
Agreement,

(i) each of the undersigned Guarantors ratifies and confirms its existing
Guarantee (each an “Existing Guarantee”) in all respects and agrees that,
notwithstanding the Agreement or any of the documents and agreements executed in
connection therewith, such Existing Guarantee remains in full force and effect;

(ii) each of the undersigned Guarantors confirms and agrees that its Existing
Guarantee shall extend to and include a guaranty of all Obligations; and

(iii) each of the undersigned Guarantors waives any and all defenses, claims or
offsets, including but not limited to any suretyship defenses, that might arise
from any term or provision of the Agreement or any of the documents and
agreements executed in conjunction with the Agreement or that otherwise may
exist.

3. Each Guarantor hereby confirms, reaffirms and restates that (a) the
representations and warranties made by it in its Existing Guarantee are true and
correct on and as of the date hereof (except to the extent such representations
and warranties relate solely to a specific earlier date) and (b) no default of
such Existing Guarantee has occurred and is continuing on the date hereof.

4. This Ratification may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Ratification by signing any such counterpart.

 

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IN WITNESS WHEREOF, the parties have caused this Ratification of Subsidiary
Guaranty to be duly executed by its authorized officer as of September     ,
2010.

 

MATRIX SERVICE INC., an Oklahoma corporation; MATRIX SERVICE INC., an Ontario,
Canada corporation; MATRIX SERVICE ULC, an Alberta unlimited liability
corporation

By:

 

 

  James P. Ryan, President MATRIX SERVICE INDUSTRIAL CONTRACTORS, INC. (formerly
known as MATRIX SERVICE MID-CONTINENT, INC.), an Oklahoma corporation; MATRIX
SERVICE SPECIALIZED TRANSPORT, INC. (formerly known as FRANK W. HAKE, INC.), a
Pennsylvania corporation; I & S, INC., a Pennsylvania corporation; MATRIX
SERVICE INDUSTRIAL CONTRACTORS CANADA, INC., a Delaware corporation; MATRIX
SERVICE INDUSTRIAL CONTRACTORS ULC, a Nova Scotia unlimited company, S.M.
ELECTRIC COMPANY, INC., a New Jersey corporation

By:

 

 

  Matthew J. Petrizzo, President

 

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The foregoing agreed to and accepted by Agent as of September     , 2010.

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent

By:

 

 

  Jennifer Kalvaitis, Vice President

 

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Annex 1

OPINION OF COUNSEL FOR THE BORROWER

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LOGO [g47686g44u10.jpg]

4000 One Williams Center

Tulsa, Oklahoma 74172

918.586.5711 Phone

918.586.8982 Fax

www.cwlaw.com

September     , 2010

The Administrative Agent, the Issuing Bank and the Lenders who are parties to
the Credit Agreement described below

Ladies and Gentlemen:

We have acted as counsel to Matrix Service Company, a Delaware corporation (the
“Borrower”), and its Subsidiaries as follows:

Matrix Service Inc. – an Oklahoma corporation

Matrix Service Industrial Contractors, Inc. – an Oklahoma corporation

Matrix Service Specialized Transport Inc. – a Pennsylvania corporation

I & S, Inc. – a Pennsylvania corporation

Matrix Service Industrial Contractors Canada, Inc., a Delaware corporation

Matrix Service Inc. – an Ontario, Canada corporation

Matrix Service Industrial Contractors ULC — a Nova Scotia, Canada unlimited
liability corporation

Matrix Service ULC – an Alberta, Canada unlimited liability corporation

S.M. Electric Company, Inc. – a New Jersey corporation

Matrix Service International, LLC – a Delaware limited liability company

(collectively with the Borrower, the “Clients”), in connection with (i) the
Borrower’s execution and delivery of that certain Third Amendment to Second
Amended and Restated Credit Agreement dated as of September     , 2010, among
the Borrower, the Lenders named therein, and JPMorgan Chase Bank, N.A., as a
Lender, Issuing Bank and as Administrative Agent (the “Administrative Agent”)
for the Lenders (the “Third Amendment”), which amends that certain Second
Amended and Restated Credit Agreement dated as of November 30, 2006, as amended
by that certain First Amendment to Second Amended and Restated Credit Agreement
dated as of July 6, 2007, and as further amended by that certain Second
Amendment to Second Amended and Restated Credit Agreement dated as of
February 11, 2009 (as so amended and as further amended by the Third Amendment,
the “Credit Agreement”) and (ii) the execution by certain of the other Clients
of certain other documents, all the documents referenced herein listed as
follows (collectively, the “Documents”):

 

  (a) the Third Amendment;

 

  (b) fee letters;

 

  (c) Ratification of Security Agreements and Release entered into by each of
the Clients other than Matrix Service International, LLC;

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  (d) Ratification of and Amendment to Subsidiary Guaranty entered into by each
of the Clients other than the Borrower and Matrix Service International, LLC;

 

  (e) Pledge and Security Agreement entered into by Matrix Service
International, LLC in favor of the Administrative Agent; and

 

  (f) Subsidiary Guaranty entered into by Matrix Service International, LLC in
favor of the Administrative Agent.

In addition to our review of the Documents, we have also examined and relied
upon originals or copies of organizational documents and other records of the
Clients as well as such certificates of public officials and officers of the
Clients and such other documents and matters as we have deemed necessary or
appropriate for purposes of this opinion.

All terms capitalized in this opinion letter without definition have the same
meanings as in the Credit Agreement.

In rendering this opinion, we have assumed the following to be true and have
conducted no investigation to confirm such assumptions or to determine to the
contrary:

A. (i) The authenticity of all documents, instruments and certificates submitted
to us as originals, (ii) the conformity with the original documents of all
documents, instruments and certificates submitted to us as certified, conformed,
photostatic or electronic copies, and (iii) the authenticity of the originals
from which all such copies were made.

B. All parties to the Documents (other than the Clients) have full power and
authority to execute, deliver and perform their respective obligations under the
Documents and under the documents required or permitted to be delivered and
performed thereunder, and all such documents have been duly authorized by all
necessary action by such parties, have been fully executed by such parties, have
been duly delivered by such parties and are or will be valid, binding and
enforceable obligations of such parties.

C. All signatures on the Documents (other than those on behalf of the Clients)
are genuine.

D. The conduct of the parties to the Documents has and will comply with any
requirement of good faith, fair dealing, conscionability and commercial
reasonableness.

E. There has not been any mutual mistake of fact or misunderstanding, fraud,
duress or undue influence in connection with the Documents.

F. Each party to each of the Documents (other than the Clients) is in good
standing under the laws of the jurisdiction in which it is incorporated or
organized.

G. The execution, delivery and performance by each party (other than the
Clients) of the Documents does not breach, conflict with or constitute a
violation of (i) the certificate of incorporation, bylaws or any other charter
or organizational document of such party, or (ii) the laws or governmental rules
and regulations of any jurisdiction, or (iii) any agreement, instrument or
document to which any such party is a party or by which any such party or any of
its properties is bound or (iv) any order, judgment or decree to which any such
party is subject or by which any of its properties is bound.

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In rendering this opinion, we have relied as to matters of fact, to the extent
we deem such reliance appropriate, without investigation, upon certificates of
public officials and upon affidavits, certificates and written statements of
officers and employees of the Borrower and Subsidiaries, including the various
factual representations of the Clients set forth in the Documents and the
Secretary’s Certificate delivered to the Administrative Agent on behalf of the
Clients of even date herewith.

Based upon the foregoing, and subject to the qualifications and limitations set
forth herein, we are of the opinion that:

l. Each of the Clients (other than Matrix Service Inc., an Ontario, Canada
corporation, Matrix Service Industrial Contractors ULC, a Nova Scotia, Canada
unlimited liability corporation, and Matrix Service ULC, an Alberta, Canada
unlimited liability corporation, as to which no opinion is expressed in this
paragraph 1) is a corporation or limited liability company duly and properly
incorporated or organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization and has all requisite
corporate or limited liability company authority to conduct its business in each
jurisdiction in which its business is conducted; and each of the Clients is
qualified to do business and is in good standing in each other jurisdiction
where the nature of the business conducted by it makes such qualification
necessary or appropriate, except where the failure to be so qualified would not
have a Material Adverse Effect.

2. The execution and delivery by the Clients of the Documents to which they, or
any of them, is a party, and the performance by such Client or Clients, as the
case may be, of their respective obligations thereunder, have been duly
authorized by proper proceedings on the part of the respective Clients and do
not and will not:

(a) require any consent of any of the Clients’ shareholders or members (other
than any such consent as has already been given and remains in full force and
effect);

(b) violate (i) any United States or Oklahoma law, rule, or regulation, which,
in our experience, would normally apply to transactions of the type contemplated
by the Documents, (ii) any order, writ, judgment, injunction, decree or award of
which we have knowledge that is applicable to or binding upon any of the
Clients, (iii) any Clients’ articles or certificate of incorporation or
organization, by-laws or other organizational documents, as the case may be, or
(iv) the provisions of any indenture, instrument or agreement that has either
been listed as an exhibit to any periodic report filed by the Borrower since
January 1, 2005 with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the “Exchange Act Documents”), or is otherwise
known to us, to which any of the Clients is a party or is subject, or by which
it, or its property, is bound, or conflict with or constitute a default
thereunder; or

(c) result in, or require, the creation or imposition of any Lien in, of or on
any of the property of any Client pursuant to the terms of any indenture,
instrument or agreement binding upon any of the Clients that has been filed as
an exhibit to any of the Exchange Act Documents or that is otherwise known to
us.

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3. The Documents to which any of the Clients is a party have been duly executed
and delivered by the Clients identified therein as party thereto and constitute
legal, valid and binding obligations of the Clients party thereto, enforceable
against such Clients in accordance with their terms, except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors’ rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.

4. Except as described in Schedule 3.06 to the Credit Agreement, to our
knowledge, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or threatened against any of the Clients which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.

5. No order, consent, adjudication, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by any Client, is required to
be obtained by any Client in connection with the execution and delivery of the
Documents, the borrowings under the Credit Agreement, the payment and
performance by the Borrower of the Obligations, or the legality, validity,
binding effect or enforceability of any of the Documents.

This opinion is subject to the following qualifications and limitations:

(i) The provisions contained in the Documents that permit any person to take
action or make determinations, or to benefit from indemnities or similar
undertakings, may be subject to requirements that such action be taken or such
determinations be made, or that any action or inaction by such person that may
give rise to a request for payment under such an indemnity or similar
undertaking be taken or not taken, on a reasonable basis and in good faith.

(ii) Under certain circumstances the requirements that the provisions of the
Documents may be modified or waived only in writing or only in a specific
instance may be unenforceable to the extent that an oral agreement has been
effected or a course of dealing has occurred modifying such provisions.

(iii) A court may modify or limit contractual awards of attorneys’ fees.

(iv) We express no opinion with regard to the effect of any (a) federal or state
securities and “blue sky” laws and regulations, (b) federal or state antitrust
and unfair competition laws and regulations, (c) federal or state pension and
employee benefit laws and regulations, (d) federal or state environmental,
subdivision, zoning, health, safety or land use laws and regulations,
(e) federal or state racketeering laws and regulations and banking laws and
regulations, and (f) administrative decisions, and rules and regulations of
county and municipal political subdivisions.

(v) With respect to our opinion in paragraph 3 above, we express no opinion as
to the enforceability of any Documents that purport to be governed by the laws
of any jurisdiction other than the State of Oklahoma or that purport to
(a) limit or expand remedies beyond those recognized in Oklahoma; (b) give the
right of specific performance; (c) alter rules of civil procedure or evidence;
(d) waive defenses or rights; (e) create and govern a trustee or creditor in
possession status; (f) create indemnities or exculpate a party from liability
for its own wrongful or negligent acts; (g) authorize the secured party to take
discretionary independent action for the account of or as an agent or

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attorney-in-fact for the debtor; (h) limit or expand the rights of set-off;
(i) guarantee the performance of acts other than payment of money; (j) limit
jurisdiction of the courts, establish any exclusive venue, purport to waive jury
trial, or establish evidentiary standards; or (k) provide for the appointment of
a receiver without notice. The invalidity or unenforceability of such provisions
should not, in our opinion, substantially interfere with the practical
realization of the benefits of the Documents.

(vi) We express no opinion with respect to matters of perfection or priority of
liens and security interests in any property of the Borrower and its
Subsidiaries.

(vii) With respect to our opinion in paragraph 5, we express no opinion
regarding any filings the Lenders would be required to make subsequent to
foreclosure in connection with the ownership and operation of the Clients’
assets.

We have not relied upon, nor do we undertake for the purpose of this opinion the
responsibility to review, the records of any court or administrative or
governmental body to determine the existence of any judicial or administrative
proceeding, order, decree, writ or judgment. As to all matters where we refer to
“our knowledge” of the existence of any facts, situations or instruments, such
knowledge means that after considering the actual knowledge of those attorneys
in our firm who have given substantive attention to the Borrower’s affairs, we
find no reason to believe that the opinions expressed above are factually
incorrect.

We are members of the bar of the State of Oklahoma. Our opinions expressed above
are limited to the laws of the State of Oklahoma, the corporate laws of the
State of Delaware, the corporate laws of the Commonwealth of Pennsylvania, the
corporate laws of the State of New Jersey, and the federal laws of the United
States of America, and we do not express any opinion herein concerning the laws
of any other jurisdiction. To the extent the opinions expressed in paragraphs 2
and 3 above are governed by the laws of a province of Canada, we have assumed
that the applicable law in those jurisdictions is the same as the applicable law
in the State of Oklahoma in all relevant respects.

The effective date of this opinion is the date first set forth above, and we do
not undertake to advise you of any matter brought to our attention thereafter
which would or may modify, in whole or in part, any or all of the foregoing.
This opinion is limited to the matters expressly stated herein, and no opinion
is implied or may be inferred beyond the matters expressly stated.

This opinion is rendered to the Administrative Agent, the Issuing Bank, the
Lenders who are parties to the Credit Agreement and their respective permitted
participants and assigns under the Credit Agreement, is for their sole benefit
and may only be relied upon by them. At your request, we hereby consent to
reliance hereon by any future permitted participant, successor or assignee under
the Credit Agreement on the condition and with the understanding that (i) this
opinion speaks only as of the date hereof, (ii) we have no responsibility or
obligation to update this opinion, to consider its applicability or correctness
to any person other than those named in the preceding sentence, or to take into
account changes in law, facts or any other developments of which we may later
become aware, and (iii) any such reliance by a future participant, successor or
assignee must be actual and reasonable under the circumstances existing at the
time of the applicable participation, assignment or transfer, including any
changes in law, facts or any other developments known to or reasonably knowable
by the participant, assignee or transferee at such time.

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This opinion is not to be quoted in whole or in part or otherwise referred to,
nor is it to be filed with or delivered or communicated to any government agency
(other than any government agency with regulatory authority as to any of the
Lenders or as may otherwise be required by law) or any other person, without our
prior written consent.

 

Very truly yours, CONNER & WINTERS, LLP