Exhibit 10.8
SEVENTH AMENDMENT TO CREDIT AGREEMENT
This Seventh Amendment to Credit Agreement (“Seventh Amendment”) is made as of
this 12th day of September, 2011, by and among PMFG, Inc. (“Holdings”),
Borrowers (as defined below), which are listed on attached Schedule 1, the
Lenders (as defined below) signatory hereto and Comerica Bank, as Agent for the
Lenders (in such capacity, the “Agent”).
RECITALS
A. Holdings, Peerless Mfg. Co. (the “Company”), PMC Acquisition, Inc. (“PMC
Acquisition”), and, following the execution and delivery by any other Subsidiary
(as defined in the Credit Agreement), and acceptance by the Agent, from time to
time, of a Credit Agreement Joinder Agreement from such Subsidiary, collectively
with the Company, PMC Acquisition and each such Subsidiary, the “Borrowers” and
each individually, a “Borrower”) are party to that certain Revolving Credit and
Term Loan Agreement dated April 30, 2008, with the financial institutions from
time to time signatory thereto (individually a “Lender,” and any and all such
financial institutions collectively the “Lenders”) and Agent (as amended or
otherwise modified from time to time, the “Credit Agreement”).
B. Borrowers have requested that Agent and the Lenders make certain amendments
to the Credit Agreement and waive certain defaults as set forth herein and Agent
and the Lenders are willing to do so, but only on the terms and conditions set
forth in this Seventh Amendment.
NOW, THEREFORE, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, Borrowers, Agent and the Lenders agree as follows:
1. The following definition in Section 1 of the Credit Agreement is hereby
amended and restated as follows:
“Revolving Credit Maturity Date” shall mean the earlier to occur of
(i) April 30, 2013, and (ii) the date on which the Revolving Credit Aggregate
Commitment shall terminate in accordance with the provisions of this Agreement.
2. Section 7.9(b) of the Credit Agreement is amended and restated as follows:
“(b) Consolidated Fixed Charge Coverage Ratio. Maintain a Consolidated Fixed
Charge Coverage Ratio as of the last day of each fiscal quarter during the
periods specified below of not less than the ratio set forth below opposite the
applicable period:

          Period   Ratio  
July 2, 2011
  1.25 to 1.00
July 3, 2011 through June 30, 2012
  1.10 to 1.00
July 1, 2012 and thereafter
  1.25 to 1.00”

 

 

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3. Borrowers have requested that the Lenders consent to the acquisition
(“Burgess Manning Acquisition”) of Burgess-Manning GmbH for a purchase price not
to exceed €4,500,000. The Lenders hereby consent to the Burgess-Manning
Acquisition provided that (a) no Default or Event of Default has occurred and is
continuing at the time of the consummation of the Burgess-Manning Acquisition,
(b) the purchase price does not exceed €4,500,000, (c) the Burgess-Manning
Acquisition is consummated on or before December 31, 2011, (d) the Agent and the
Lenders have received all documents and information as requested by Agent or any
Lender in connection with the Burgess-Manning Acquisition and (e) the
Burgess-Manning Acquisition is otherwise on terms and conditions satisfactory to
the Lenders.
4. The Lenders hereby (a) waive any Default or Event of Default arising solely
from the Borrowers’ failure to comply with Section 7.9(b) of the Credit
Agreement for the fiscal quarter ended July 2, 2011 and (b) consent to the
making Section 8.5 of the Credit Agreement to the extent Holdings made any
Distributions to holders of its Series A convertible preferred stock before the
date hereof at a time when Section 8.5 would have prohibited such Distributions
solely as a result of the existence of the Default or Event of Default described
in clause (a) above.
5. Borrowers have requested that the Lenders consent to payment by Holdings of
Distributions in cash, in an aggregate not to exceed $4,500, to holders of
Holdings’ Series A convertible preferred stock (the “Preferred Stock”) upon the
conversion, on or before September 30, 2011, of the Preferred Stock (the
“September 2011 Cash Distributions”). The Lenders hereby consent to the
September 2011 Cash Distribution, provided that no Default or Event of Default
has occurred and is continuing at the time of the payment of the September 2011
Cash Distribution.
6. This Seventh Amendment shall become effective (according to the terms hereof)
on the date (the “Seventh Amendment Effective Date”) that the following
conditions have been fully satisfied by Borrowers (the “Conditions”):

  (a)  
Agent shall have received via facsimile or electronic mail (followed by the
prompt delivery of original signatures) counterpart originals of this Seventh
Amendment, in each case duly executed and delivered by the Agent, Borrowers and
the Lenders.
    (b)  
Borrowers shall have paid (i) to the Agent for distribution to each Lender a
nonrefundable amendment fee in an amount equal to twenty basis points on such
Lender’s Percentage of the Revolving Credit Aggregate Commitment and (ii) to the
Agent all fees and other amounts, if any, that are due and owing to the Agent as
of the Seventh Amendment Effective Date in accordance with the Loan Documents.

 

 

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7. Borrowers hereby certify to the Agent and the Lenders as of the Seventh
Amendment Effective Date and after giving effect to this Amendment, that
(a) execution and delivery of this Seventh Amendment and the other Loan
Documents required to be delivered hereunder, and the performance by Borrowers
of their obligations under the Credit Agreement as amended hereby (herein, as so
amended, the “Amended Credit Agreement”) are within the Borrowers’ powers, have
been duly authorized, are not in contravention of law or the terms of its
articles of incorporation or bylaws or other organizational documents of the
parties thereto, as applicable, and except as have been previously obtained do
not require the consent or approval, material to the amendments contemplated in
this Seventh Amendment, of any governmental body, agency or authority, and the
Amended Credit Agreement and the other Loan Documents required to be delivered
hereunder will constitute the valid and binding obligations of such undersigned
parties enforceable in accordance with its terms, except as enforcement thereof
may be limited by applicable bankruptcy, reorganization, insolvency, moratorium,
ERISA or similar laws affecting the enforcement of creditors’ rights generally
and by general principles of equity (whether enforcement is sought in a
proceeding in equity or at law), (b) the representations and warranties set
forth in Section 6 of the Amended Credit Agreement are true and correct on and
as of the Seventh Amendment Effective Date (except to the extent such
representations specifically relate to an earlier date), and (c) on and as of
the Seventh Amendment Effective Date, after giving effect to this Seventh
Amendment, no Default or Event of Default shall have occurred and be continuing.
8. Except as specifically set forth above, this Seventh Amendment shall not be
deemed to amend or alter in any respect the terms and conditions of the Amended
Credit Agreement (including without limitation all conditions and requirements
for Advances and any financial covenants), any of the Notes issued thereunder or
any of the other Loan Documents. Except as specifically set forth above, this
Seventh Amendment shall not constitute a waiver or release by the Agent or the
Lenders of any right, remedy, Default or Event of Default under or a consent to
any transaction not meeting the terms and conditions of the Amended Credit
Agreement, any of the Notes issued thereunder or any of the other Loan Documents
or affect in any manner whatsoever any rights or remedies of the Lenders with
respect to any non-compliance by Borrowers or any Guarantor with the Amended
Credit Agreement or the other Loan Documents, whether in the nature of a Default
or Event of Default, and whether now in existence or subsequently arising, and
shall not apply to any other transaction. Borrowers hereby confirm that each of
the Collateral Documents continues in full force and effect and secures, among
other things, all of its obligations, liabilities and indebtedness owing to the
Agent and the Lenders under the Credit Agreement and the other Loan Documents
(where applicable, as amended herein).
9. Borrowers hereby acknowledge and agree that this Seventh Amendment and the
amendments contained herein do not constitute any course of dealing or other
basis for altering any obligation of Borrowers, any other Credit Party, any
Guarantor or any other party or any rights, privilege or remedy of the Lenders
under the Credit Agreement, any other Loan Document, any other agreement or
document, or any contract or instrument.
10. Except as specifically defined to the contrary herein, capitalized terms
used in this Seventh Amendment shall have the meanings set forth in the Credit
Agreement.
11. This Seventh Amendment may be executed in counterpart in accordance with
Section 13.9 of the Credit Agreement and shall be considered a “Loan Document”
within the meaning of the Credit Agreement.
12. This Seventh Amendment shall be construed in accordance with and governed by
the laws of the State of Texas.

 

 

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WITNESS the due execution hereof as of the day and year first above written.

            COMERICA BANK, as Agent
      By:   /s/ Kelly Cowherd         Name:   Kelly Cowherd        Title:   Vice
President   

 

 

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            PMFG, INC.
      By:   /s/ Peter Burlage         Name:   Peter Burlage        Title:  
President     
PEERLESS MFG. CO.
      By:   /s/ Peter Burlage         Name:   Peter Burlage        Title:  
President     
PMC ACQUISITION, INC.
      By:   /s/ Peter Burlage         Name:   Peter Burlage        Title:  
President     
NITRAM ENERGY, INC.
      By:   /s/ Peter Burlage         Name:   Peter Burlage        Title:  
President     
BOS-HATTEN, INC.
      By:   /s/ Peter Burlage         Name:   Peter Burlage        Title:  
President     
BURGESS — MANNING, INC.
      By:   /s/ Peter Burlage         Name:   Peter Burlage        Title:  
President   

 

 

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            BURMAN MANAGEMENT, INC.
      By:   /s/ Peter Burlage         Name:   Peter Burlage        Title:  
President   

 

 

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LENDERS:

            COMERICA BANK, as a Lender, Issuing Lender
and Swing Line Lender
      By:   /s/ Kelly Cowherd         Name:   Kelly Cowherd        Title:   Vice
President   

 

 

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            MB FINANCIAL BANK, N.A.
      By:   /s/ Evelyn Guzman         Name:   Evelyn Guzman        Title:  
Assistant Vice President   

 

 

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            CITIBANK N.A.
      By:   /s/ Deb Purvin         Name:   Deb Purvin        Title:   Senior
Vice President   

 

 

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SCHEDULE 1
Peerless Mfg. Co.
PMC Acquisition, Inc.
Nitram Energy, Inc.
Bos-Hatten, Inc.
Burgess — Manning, Inc.
Burman Management, Inc.