Exhibit 10

TENTH AMENDMENT TO AMENDED AND
 
RESTATED LOAN AND SECURITY AGREEMENT
 
THIS TENTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (“Tenth
Amendment”) is made as of this 11th day of May, 2010, by and among BANK OF
AMERICA, N.A., a national banking association (“Bank of America”) with an office
at 135 South LaSalle Street, 4th Floor, Chicago, Illinois 60603, individually as
a Lender and as Agent (“Agent”) for itself and any other financial institution
which is or becomes a party hereto (each such financial institution, including
Bank of America, is referred to hereinafter individually as a “Lender” and
collectively as the “Lenders”), the LENDERS and MFRI, INC., a Delaware
corporation (“MFRI”), MIDWESCO FILTER RESOURCES, INC., a Delaware corporation
(“Midwesco”), PERMA-PIPE, INC., a Delaware corporation (“Perma-Pipe”), THERMAL
CARE, INC., a Delaware corporation (“Thermal Care”), TDC FILTER MANUFACTURING,
INC., a Delaware corporation (“TDC”), MIDWESCO MECHANICAL AND ENERGY, INC., a
Delaware corporation (“Mechanical”) and FREEZONE HOLDINGS LIMITED LIABILITY
COMPANY, a Delaware limited liability company (“Freezone”) and PERMA-PIPE
CANADA, INC., a Delaware corporation (“Perma-Pipe Canada”).  Capitalized terms
used in this Agreement have the meanings assigned to them in Appendix A, General
Definitions.  Accounting terms not otherwise specifically defined herein shall
be construed in accordance with GAAP consistently applied.  MFRI, Midwesco,
Perma-Pipe, Thermal Care, TDC, Mechanical, Freezone and Perma-Pipe Canada are
sometimes hereinafter referred to individually as a “Borrower” and collectively
as “Borrowers”.
 
WHEREAS, Borrowers (other than Mechanical, Freezone and Perma-Pipe Canada),
Agent, and the Lender signatories thereto hereto entered into that certain
Amended and Restated Loan and Security Agreement dated December 15, 2006, as
amended by that First Amendment to Amended and Restated Loan and Security
Agreement dated February 28, 2007 by and among Borrowers (other than Freezone
and Perma-Pipe Canada), Agent and Lenders, by that certain Second Amendment to
Amended and Restated Loan and Security Agreement dated August 28, 2007 by and
among Borrowers (other than Freezone and Perma-Pipe Canada), Agent and Lenders,
by that certain Third Amendment to Amended and Restated Loan and Security
Agreement dated December 13, 2007 by and among Borrowers (other than Freezone
and Perma-Pipe Canada), Agent and Lenders, by that certain Fourth Amendment to
Amended and Restated Loan and Security Agreement dated April 17, 2008 by and
among Borrowers (other than Freezone and Perma-Pipe Canada), Agent and Lenders,
by that certain Fifth Amendment to Amended and Restated Loan and Security
Agreement dated September 7, 2008 by and among Borrowers (other than Freezone
and Perma-Pipe Canada), Agent and Lenders, by that certain Sixth Amendment to
Amended and Restated Loan and Security Agreement dated January 12, 2009 by and
among Borrowers (other than Freezone and Perma-Pipe Canada), Agent and Lenders,
by that certain Seventh Amendment to Amended and Restated Loan and Security
Agreement dated August 5, 2009 by and among Borrowers (other than Freezone and
Perma-Pipe Canada), Agent and Lender, by that certain Eighth Amendment to
Amended and Restated Loan and Security Agreement dated December 9, 2009 by and
among Borrowers, Agent and Lenders and by that certain Ninth Amendment to
Amended and Restated Loan and Security Agreement dated April 13, 2010 by and
among Borrowers, Agent and Lender (said Amended and Restated Loan and Security
Agreement, as amended from time to time, the “Loan Agreement”); and
 
 
 

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WHEREAS, Borrowers, Agent and Lenders desire to amend the Loan Agreement as
provided herein, including, without limitation, to add Freezone and Perma-Pipe
Canada as an additional Borrower;
 
NOW, THEREFORE, in consideration of the following terms and conditions, the
parties agreed as follows:
 
1. Definitions.  Except as otherwise specifically provided for herein, all
capitalized terms used herein without definition shall have the meanings
contained in the Loan Agreement.
 
2. Amended and Additional Definitions.  The definition of “Permitted Purchase
Money Indebtedness” is hereby deleted from the Loan Agreement and the following
is inserted in its stead.  The following definition of “2010 Equipment Loan and
Lease Agreement” is hereby inserted into Appendix A to the Loan Agreement.
 
“Permitted Purchase Money Indebtedness – (x) Purchase Money Indebtedness of
Borrowers incurred after the date hereof which is secured by a Purchase Money
Lien and the principal amount of which, when aggregated with the principal
amount of all other such Indebtedness and Capitalized Lease Obligations of
Borrowers and their Subsidiaries at the time outstanding, does not exceed
$1,500,000, (y) Purchase Money Indebtedness of Borrowers in an aggregate amount
not to exceed $6,000,000 incurred after December 1, 2007 in connection with the
acquisition and immediate improvements by TDC of a new facility in suburban
Chicago which Purchase Money Indebtedness shall be secured by a Purchase Money
Lien on such facility and the fixed assets located thereon so long as the other
terms and conditions of such Purchase Money Indebtedness are acceptable to Agent
in its reasonable discretion and (z) Purchase Money Indebtedness or other
Indebtedness incurred pursuant to that certain master lease agreement and/or
loan agreement (“2010 Equipment Loan and Lease Agreement”) dated on or about May
11, 2011, a copy of which, in substantial final form, has been delivered to
Agent, by and between all or any Borrower and Banc of America Leasing & Capital,
LLC (or its successor-in-interest); provided that the aggregate amount of
Borrowers’ Indebtedness under such 2010 Equipment Loan and Lease Agreement does
not exceed $3,000,000 (plus actual or imputed interest), that the term of such
2010 Equipment Loan and Lease Agreement is forty-eight (48) months or more and
that such 2010 Equipment Loan and Lease Agreement is otherwise in form and
substance reasonably acceptable to Agent.
 
*      *      *
 
2010 Equipment Loan and Lease Agreement – as defined in clause (z) of the
definition of Permitted Purchase Money Indebtedness.”
 
3. Release of Equipment.  Immediately prior to or simultaneous with the
effectiveness of the 2010 Equipment Loan and Lease Agreement and the first
$1,000,000 advance to be made thereunder, Agent agrees to release its Lien on
the Equipment more particularly described in Schedule 1 attached to this Tenth
Amendment and to file such UCC-3 termination statements as are necessary or
appropriate to reflect such release.  In order to induce Agent and Lenders to
agree to such Lien release, Borrowers acknowledge that Agent, at Borrowers’
expense, will obtain a new appraisal of Borrowers’ Equipment that remains
subject to Agent’s Lien, which appraisal shall be in form and substance
reasonably acceptable to Agent.  In the event that such new appraisal evidences
that the net orderly liquidation value of such Equipment has deteriorated from
that stated in the most recent prior appraisal, then Borrowers acknowledge that
Agent may implement reserves pursuant to such Section 1.1.1 of the Loan
Agreement to reflect such reduced value.
 
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4. Term of Agreement.  Section 4.1 of the Loan Agreement is hereby deleted and
the following is inserted in its stead:
 
“SECTION 4.  TERM AND TERMINATION
 
“4.1           Term of Agreement.  Subject to the right of Lenders to cease
making Loans to Borrowers during the continuance of any Default or Event of
Default, this Agreement shall be in effect for a period through and including
November 30, 2013 (the “Term”), unless terminated as provided in Section 4.2
hereof.”
 
5. Total Indebtedness.  Subsection 8.2.3 of the Loan Agreement is hereby deleted
and the following is inserted in its stead:
 
“8.2.3           Total Indebtedness.  Create, incur, assume, or suffer to exist,
or permit any Subsidiary of Borrower to create, incur or suffer to exist, any
Indebtedness, except:
 
(i)           Obligations owing to Agent and Lenders;
 
(ii)           Indebtedness of any Subsidiary of Borrower to Borrower;
 
(iii)           accounts payable to trade creditors and current operating
expenses (other than for Money Borrowed) which are not aged more than 120 days
from billing date or more than 60 days from the due date, in each case incurred
in the ordinary course of business and paid within such time period, unless the
same are being actively contested in good faith and by appropriate and lawful
proceedings; and Borrower or such Subsidiary shall have set aside such reserves,
if any, with respect thereto as are required by GAAP and deemed adequate by
Borrower or such Subsidiary and its independent accountants;
 
(iv)           Obligations to pay Rentals permitted by Section 8.2.13;
 
(v)           Permitted Purchase Money Indebtedness;
 
(vi)           contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course of
business;
 
(vii)           Capital Lease Obligations to the extent permitted by
Section 8.2.8 in an aggregate principal amount of not more than $750,000;
 
(viii)           Indebtedness in respect to deferred taxes;
 
 
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(ix)           Indebtedness relating to compensation owed to Borrower’s
employees for services rendered in the ordinary course of business;
 
(x)           all unfunded pension and other employee benefit plan obligations
and liabilities but only to the extent they are permitted to remain unfunded
under applicable law;
 
(xi)           insurance reserves created in the ordinary course of business;
 
(xii)           Indebtedness incurred in connection with loans on the cash
surrender value of key-man life insurance policies so long as the principal
amount of such Indebtedness does not exceed $2,000,000, the per annum interest
rate payable with respect to such Indebtedness does not exceed 4.25% and such
Indebtedness does not require any principal amortization on or prior to
December 31, 2013; and
 
(xiii)           Indebtedness not included in paragraphs (i) through (xiii)
above which does not exceed at any time, in the aggregate, the sum of $500,000.”
 
6. Liens.  Subsection 8.2.5 of the Loan Agreement is hereby deleted and the
following is inserted in its stead:
 
“8.2.5           Limitation on Liens.  Create or suffer to exist, or permit any
Subsidiary of Borrower to create or suffer to exist, any Lien upon any of its
Property, income or profits, whether now owned or hereafter acquired, except:
 
(i)           Liens at any time granted in favor of Agent for its benefit and
the ratable benefit of Lenders;
 
(ii)           Liens for taxes (excluding any Lien imposed pursuant to any of
the provisions of ERISA) not yet due, or being contested in the manner described
in Section 7.1.14 hereto, but only if in Agent’s judgment such Lien does not
adversely affect Agent’s rights or the priority of Agent’s Lien in the
Collateral;
 
(iii)           Liens arising in the ordinary course of Borrower’s business by
operation of law or regulation, but only if payment in respect of any such Lien
is not at the time required and such Liens do not, in the aggregate, materially
detract from the value of the Property of Borrower or materially impair the use
thereof in the operation of Borrower’s business;
 
(iv)           Purchase Money Liens securing Permitted Purchase Money
Indebtedness;
 
(v)           Liens securing Indebtedness of one of Borrower’s Subsidiaries to
Borrower or another such Subsidiary;
 
(vi)           Liens securing Capital Lease Obligations to the extent the
underlying Capital Lease Obligation is permitted by the terms of this Agreement;
 
 
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(vii)           such other Liens as appear on Exhibit 8.2.5 hereto;
 
(viii)           Liens on certain Inventory granted to Prairie State Generating
Company LLC and/or Bechtel Power Corporation subject to and to the extent
provided in that certain consent letter dated December 8, 2008 from Agent to
Borrower, a copy of which is attached to Exhibit 8.2.5;
 
(xi)           Liens on the cash surrender value of life insurance policies
securing Indebtedness permitted under Subsection 8.2.8(xii); and
 
(x)           such other Liens as Required Lenders may hereafter approve in
writing.”
 
7. Conditions Precedent.  This Tenth Amendment shall become effective upon
receipt by Agent of a fully executed copy of this Tenth Amendment.
 
8. Governing Law.  This Tenth Amendment shall be governed by, and construed in
accordance with, the laws of the State of Illinois, without regard to the
principles thereof relating to conflict of laws.
 
9. Execution in Counterparts.  This Tenth Amendment may be executed in any
number of counterparts, which shall, collectively and separately, constitute one
Agreement.
 
10. Continuing Effect.  Except as otherwise provided herein, the Loan Agreement
remains in full force and effect.
 
(Signature Page Follows)
 

CHICAGO/#2067104.4
 
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(Signature Page to Tenth Amendment to
 
Amended and Restated Loan and Security Agreement)
 

 
MFRI, INC.
       
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
VP CFO
       
MIDWESCO FILTER RESOURCES, INC.
     
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
Vice President
             
PERMA-PIPE, INC.
     
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
Vice President
       
THERMAL CARE, INC.
     
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
Vice President
       
TDC FILTER MANUFACTURING, INC.
     
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
Vice President
       
MIDWESCO MECHANICAL AND ENERGY, INC.
     
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
Vice President
                                   

 
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FREEZONE HOLDINGS LIMITED
LIABILITY COMPANY
     
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
Manager
       
PERMA-PIPE CANADA, INC.
     
By:
/s/ Michael D. Bennett
   
Name:
Michael D. Bennett
 
Title:
Vice President
       
BANK OF AMERICA, N.A., as Agent and as a Lender
     
By:
/s/ Brian Conole
   
Name:
Brian Conole
 
Title:
Senior Vice President
           

     

CHICAGO/#2067104.4
 
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SCHEDULE I
 
Description of Equipment to be Released
 

 
 
 
 
 
 
 
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