Exhibit 10.24
SEVENTH AMENDMENT TO CREDIT AGREEMENT
     THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered
into as of December 10, 2008, but shall be effective for all purposes as of the
Effective Date (defined below) among Powell Industries, Inc., a Delaware
corporation (“Parent”), Switchgear & Instrumentation Ltd., an entity organized
under the laws of England and Wales (formerly known as Inhoco 3210 Limited,
“Inhoco”), Switchgear & Instrumentation Properties Limited, an entity organized
under the laws of England and Wales (“SI Properties” and together with Inhoco,
“UK Borrower”), Bank of America, N.A., a national banking association, as Agent,
Swing Line Lender and L/C Issuer under the Credit Agreement (in such capacity as
administrative agent, together with its successors in such capacity, “Agent”),
and each lender from time to time party to the Credit Agreement (collectively,
“Lenders” and individually, a “Lender”). Capitalized terms used but not defined
in this Amendment have the meaning given them in the Credit Agreement (defined
below).
RECITALS
     A. Parent, Inhoco, and SI Properties, as borrowers (each a “Borrower” and
collectively “Borrowers”), Agent and Lenders entered into that certain Credit
Agreement dated as of June 29, 2005 (as amended by the First Amendment to Credit
Agreement dated November 7, 2005, as amended by the Second Amendment to Credit
Agreement dated January 11, 2006, as amended by the Third Amendment to Credit
Agreement dated August 4, 2006, as amended by the Fourth Amendment to Credit
Agreement dated December 7, 2006, as amended by the Fifth Amendment to Credit
Agreement dated December 4, 2007, Sixth Amendment to Credit Agreement dated
December 14, 2007, and as amended, restated or supplemented, the “Credit
Agreement”).
     B. Borrowers, Agent and Lenders have agreed to amend the Credit Agreement,
subject to the terms and conditions of this Amendment.
     NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the undersigned hereby agree as follows:
     1. Amendment to Credit Agreement. The Credit Agreement is amended as set
forth below as of the Effective Date:
     (a) The definitions of Applicable Rate, Approved Period, Designated
Sublimit, Letter of Credit Sublimit, and Termination Date in Section 1.01 of the
Credit Agreement are deleted in their entirety and are replaced with the
following:
“Applicable Rate means, except as specified below, the following percentages per
annum, based upon the Consolidated Leverage Ratio as set out in the most recent
Compliance Certificate received by Agent pursuant to Section 6.02(b):

                                  Pricing   Consolidated Leverage   Eurocurrency
      Letter of   Commitment Level   Ratio   Rate   Base Rate   Credit Fee   Fee
  1    
<1,25:1.00
  +1.25%   -0.50%     1.25 %     0.25 %

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                                  Pricing   Consolidated Leverage   Eurocurrency
      Letter of   Commitment Level   Ratio   Rate   Base Rate   Credit Fee   Fee
  2    
>1.25: l.00 but <1.75:1.00
  +1.50%   -0.25%     1.50 %     0.25 %   3    
>1.75:1.00 but <2.25:1.00
  +1.75%   +0.00%     1.75 %     0.25 %   4    
>2.25:1.00 but <2.75: 1.00
  +2.00%   +0.25%     2.00 %     0.375 %   5    
>2.75:1.00
  +2.25%   +0.50%     2.25 %     0.375 %

Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.02(b); provided that, if a Compliance Certificate is not delivered
when due in accordance with such Section, then Pricing Level 4 shall apply as of
the first Business Day after the date on which such Compliance Certificate was
required to have been delivered until the first Business Day after a Compliance
Certificate establishing a lower applicable Pricing Level is delivered pursuant
to Section 6.02(b). Notwithstanding the foregoing, the Applicable Rate in effect
commencing December 10, 2008, and ending on the first Business Day immediately
following the date that a Compliance Certificate for the period ended May 31,
2009, is delivered pursuant to Section 6.02(b), shall not be less than Pricing
Level 2 at any time.
Approved Period means the period commencing on the Closing Date and ending on
December 31, 2012 (such period may be extended if requested by UK Borrower and
if the Required Lenders agree, in their sole discretion, to an extension in
writing).
Designated Sublimit means (a) with respect to Parent, the Commitment amount then
in effect per Schedule 2.01 (C) and subject to reduction as specified in
footnote 2 on Schedule 2.01 and (b) with respect to UK. Borrower, £4,000,000.
Letter of Credit Sublimit means (a) with respect to Parent, the Commitment
amount then in effect per Schedule 2.01 (C) and subject to reduction as
specified in footnote 2 on Schedule 2.01 and (b) with respect to UK Borrower,
£4,000,000. The Letter of Credit Sublimit is part of, and not in addition to,
the Revolving Committed Amount.
Termination Date means the earlier of (a) December 31, 2012, or (b) the
effective date that the Lenders’ commitments to make Revolving Loans and
purchase participations in L/C’s and Swing Line Loans are otherwise cancelled or
terminated in accordance with Section 8 of this Agreement, or otherwise.”
     (b) Section 2.05(e) of the Credit Agreement is deleted in its entirety and
replaced with the following:
“(e) If for any reason (i) the Outstanding Amount of Revolving Loans, L/C
Obligations, and Swing Line Loans ever exceeds the Revolving Committed Amount
then in effect, (ii) the Outstanding Amount of Revolving Loans to UK

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Borrower exceeds its Designated Sublimit, or (iii) the Outstanding Amount of
Revolving Loans to Parent exceeds its Designated Sublimit, then, subject to
Section 2.01(c), each of the Borrowers, individually or in the aggregate, shall
promptly, and in any event no later than 3 Business Days after written notice
from Agent, prepay the Revolving Facility in an amount equal to the excess,
together with all accrued and unpaid interest on the principal amount prepaid
and any additional amounts required pursuant to Section 3.05 and/or Cash
Collateralize the L/C Obligations; provided that, Borrower shall not be required
to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(e)
unless after the prepayment in full of the Revolving Facility the Total
Outstandings exceed the Aggregate Commitments then in effect. All such
prepayments of each Borrower shall be applied ratably among its Revolving Notes
(based on the proportion of each Revolving Note’s outstanding principal to the
Outstanding Amount of all Revolving Loans).”
     (c) Sections 7.03(i) and (j) of the Credit Agreement are deleted in their
entirety and replaced with the following:
“(i) during the Approved Period, Indebtedness of UK Borrower under its HSBC Bond
Facility that does not exceed £22,500,000 at any time;
(j) during the Approved Period, the guaranty by Parent in respect of
Indebtedness under the HSBC Bond Facility, provided that, the amount of its
guaranteed obligation does not exceed £22,500,000 at any time; and”
     (d) Section 7.11(c) of the Credit Agreement is deleted in its entirety and
replaced with the following:
“(c) Minimum Tangible Net Worth. Permit Consolidated Tangible Net Worth as of
the end of each fiscal quarter, commencing with the quarter ending December 31,
2008, to be less than the sum of (i) $172,500,000 plus (ii) an amount equal to
50% of the Consolidated Net Income for each fiscal quarter, commencing with the
fiscal quarter ending December 31, 2008, and for each fiscal quarter thereafter
(with no deduction for a net loss in any fiscal quarter), plus (iii) an amount
equal to 100% of the aggregate increases in Shareholders’ Equity of Parent and
its Subsidiaries after the date hereof by reason of the issuance and sale of any
Equity Interests of Parent or any Subsidiary (other than issuances to Parent or
a wholly-owned Subsidiary), including upon any conversion of debt securities of
Parent into such capital stock or other equity interests.”
   2. Schedule. The existing Schedule 2.01 to the Credit Agreement is deleted in
its entirety and replaced with Schedule 2.01 attached to this Amendment.
   3. Conditions. This Amendment shall be effective as of December 10, 2008 (the
“Effective Date”) once each of the following have been delivered to Agent:

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     (a) this Amendment executed by Borrowers, Agent and Lenders;
     (b) Guarantors’ Consent and Agreement executed by the Guarantors;
     (c) a replacement Revolving Note executed by Parent and made payable to
Bank of America, N.A., in the original principal amount of $83,500,000;
     (d) payment of an amendment fee to Bank of America, N.A., as specified in
that certain Fee Letter dated December 10, 2008, among Borrowers and Bank of
America, N.A.;
     (e) Officer’s Certificate of Parent certifying as to incumbency of
officers, specimen signatures, no changes to articles of incorporation and
bylaws since the date of the certificate delivered in connection with the Credit
Agreement, and resolutions adopted by the Board of Directors authorizing this
Amendment; and
     (f) such other documents as Agent or Lenders may reasonably request.
     4. Representations and Warranties. Each Borrower represents and warrants to
Agent and Lenders that (a) it possesses all requisite power and authority to
execute, deliver and comply with the terms of this Amendment, (b) this Amendment
has been duly authorized and approved by all requisite corporate action on the
part of Borrower, (c) no other consent of any Person (other than Lenders) is
required for this Amendment to be effective, (d) the execution and delivery of
this Amendment does not violate its organizational documents, (e) the
representations and warranties in each Loan Document to which it is a party are
true and correct in all material respects on and as of the date of this
Amendment as though made on the date of this Amendment (except to the extent
that such representations and warranties speak to a specific date), (f) it is in
full compliance with all covenants and agreements contained in each Loan
Document (as amended by this Amendment) to which it is a party, and (g) no
Default or Event of Default has occurred and is continuing. The representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment. No investigation by Agent or Lenders is required for Agent or
Lenders to rely on the representations and warranties in this Amendment.
     5. Scope of Amendment; Reaffirmation; Release. All references to the Credit
Agreement shall refer to the Credit Agreement as amended by this Amendment.
Except as affected by this Amendment, the Loan Documents are unchanged and
continue in full force and effect. However, in the event of any inconsistency
between the terms of the Credit Agreement (as amended by this Amendment) and any
other Loan Document, the terms of the Credit Agreement shall control and such
other document shall be deemed to be amended to conform to the terms of the
Credit Agreement. Borrowers hereby reaffirm their obligations under the Loan
Documents to which each is a party and agree that all Loan Documents to which
they are a party remain in full force and effect and continue to be legal,
valid, and binding obligations enforceable in accordance with their terms (as
the same are affected by this Amendment). Borrowers hereby release Agent and
Lenders from any liability for actions or omissions in connection with the
Credit Agreement and the other Loan Documents prior to the date of this
Amendment.

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6. Miscellaneous.
     (a) Waiver. This Amendment does not constitute (i) a waiver of, or a
consent to (A) any provision of the Credit Agreement or any other Loan Document
not expressly referred to in this Amendment, or (B) any present or future
violation of, or default under, any provision of the Loan Documents, or (ii) a
waiver of Agent’s or Lenders’ right to insist upon future compliance with each
term, covenant, condition and provision of the Loan Documents.
     (b) Form. Each agreement, document, instrument or other writing to be
furnished to Lenders under any provision of this Amendment must be in form and
substance satisfactory to Agent and its counsel.
     (c) Headings. The headings and captions used in this Amendment are for
convenience only and will not be deemed to limit, amplify or modify the terms of
this Amendment, the Credit Agreement, or the other Loan Documents.
     (d) Costs. Expenses and Attorneys’ Fees. Borrowers agree to pay or
reimburse Agent on demand for all of their reasonable out-of-pocket costs and
expenses incurred in connection with the preparation, negotiation, and execution
of this Amendment, including, without limitation, the reasonable fees and
disbursements of Agent’s counsel.
     (e) Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of each of the undersigned and their respective successors and
permitted assigns.
     (f) Multiple Counterparts. This Amendment may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document. All counterparts must be construed together to constitute one and the
same instrument. This Amendment may be transmitted and signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on Borrowers, Agent and Lenders. Agent may also require that any such
documents and signatures be confirmed by a manually-signed original; provided
that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.
     (g) Governing Law. This Amendment and the other Loan Documents must be
construed, and their performance enforced, under Texas law.
     (h) Entirety. The Loan Documents (as amended hereby) Represent the Final
Agreement Among Borrowers, Agent and Lenders and May Not Be Contradicted by
Evidence of Prior, Contemporaneous, or Subsequent Oral Agreements by the
Parties. There are No Unwritten Oral Agreements among the Parties.
[Signatures appear on the following pages.]

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     The Amendment is executed as of the date set out in the preamble to this
Amendment.

            BORROWERS:

POWELL INDUSTRIES, INC.
      By:   /s/ Don R. Madison         Don R. Madison        Vice President,
Secretary and Treasurer        SWITCHGEAR & INSTRUMENTATION
LTD., formerly known as Inhoco 3210 Limited
      By:   /s/ Don R. Madison         Don R. Madison        Director       
SWITCHGEAR & INSTRUMENTATION
PROPERTIES LIMITED
      By:   /s/ Don R. Madison         Don R. Madison        Director     

Signature Page to Seventh Amendment to Credit Agreement

                                 

 

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            BANK OF AMERICA, N.A., as Agent
      By:   /s/ Daniel J. Lintner         Daniel J. Lintner        Senior Vice
President        BANK OF AMERICA, N.A., as a Lender, L/C
Issuer and Swing Line Lender
      By:   /s/ Daniel J. Lintner         Daniel J. Lintner        Senior Vice
President     

Signature Page to Seventh Amendment to Credit Agreement

 

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GUARANTORS’ CONSENT AND AGREEMENT TO SEVENTH AMENDMENT
     As an inducement to Agent and Lenders to execute, and in consideration of
Agent’s and Lenders’ execution of, this Amendment, the undersigned hereby
consents to this Amendment and agrees that this Amendment shall in no way
release, diminish, impair, reduce or otherwise adversely affect the obligations
and liabilities of the undersigned under the Guaranty executed by each of the
undersigned in connection with the Credit Agreement, or under any Loan
Documents, agreements, documents or instruments executed by the undersigned to
create liens, security interests or charges to secure any of the Obligations (as
defined in the Credit Agreement), all of which are in full force and effect. The
undersigned further represents and warrants to Agent and Lenders that (a) the
representations and warranties in each Loan Document to which it is a party are
true and correct in all material respects on and as of the date of this
Amendment as though made on the date of this Amendment (except to the extent
that such representations and warranties speak to a specific date), (b) it is in
full compliance with all covenants and agreements contained in each Loan
Document to which it is a party, and (c) no Default or Event of Default has
occurred and is continuing. Guarantors hereby release Agent and Lenders from any
liability for actions or omissions in connection with the Loan Documents prior
to the date of this Amendment. This Guarantors’ Consent and Agreement shall be
binding upon each of the undersigned, and its permitted assigns, and shall inure
to the benefit of Agent, Lenders, and its successors and assigns.
GUARANTORS:

                      TRANSDYN, INC.,       POWELL INDUSTRIES ASIA, INC.,     a
Delaware corporation       a Delaware corporation    
 
                   
By:
  /s/ Don Madison
 
Don Madison       By:   /s/ Don Madison
 
Don Madison    
 
  Vice President, Secretary, and Treasurer           Vice President, Secretary,
and Treasurer    
 
                    POWELL INDUSTRIES INTERNATIONAL,       POWELL ELECTRICAL
SYSTEMS, INC.,     INC., a Delaware corporation       a Delaware corporation    
 
                   
By:
  /s/ Don Madison
 
Don Madison       By:   /s/ Don Madison
 
Don Madison    
 
  Vice President, Secretary, and Treasurer           Vice President, Secretary,
and Treasurer    

Guarantors’ Consent and Agreement to Seventh Amendment

 

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SCHEDULE 2.01
COMMITMENTS
AND APPLICABLE PERCENTAGES
A. Term Facility for UK Borrower

                              Applicable Lender   Commitment   Percentage  
Bank of America, N.A.
  £ 6,000,000       100 %
 
               
Total
  £ 6,000,000       100 %

B. Revolving Facility for UK Borrower

                              Applicable Lender   Commitment   Percentage  
Bank of America, N.A.
  £ 4,000,000       100 %
 
               
Total
  £ 4,000,000 1     100 %

C. Revolving Facility for Parent

                              Applicable Lender   Commitment   Percentage  
Bank of America, N.A.
  $ 83,500,000 2     100 %
 
               
Total
  $ 83,500,000 3     100 %

 

1  
The Revolving Committed Amount, when determined, is the sum of the amount in
footnote 1 plus the amount in footnote 3, as reduced pursuant to footnote 2.
  2  
This amount shall (i) reduce to $71,000,000 for the period commencing March 1,
2009 through May 31, 2009, and (ii) further reduce to $58,500,000 for the period
commencing June 1, 2009 through the Termination Date, and Borrowers covenant and
agree to make the mandatory prepayments of the Revolving Loans pursuant to
Section 2.05(e).
  3  
The Revolving Committed Amount, when determined, is the sum of the amount in
footnote 1 plus the amount in footnote 3, as reduced pursuant to footnote 2.

Schedule 2.01 to the Seventh Amendment