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<SEC-DOCUMENT>0000914122-07-000088.txt : 20071214
<SEC-HEADER>0000914122-07-000088.hdr.sgml : 20071214
<ACCEPTANCE-DATETIME>20071214154232
ACCESSION NUMBER:		0000914122-07-000088
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20071213
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20071214
DATE AS OF CHANGE:		20071214

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MFRI INC
		CENTRAL INDEX KEY:			0000914122
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564]
		IRS NUMBER:				363922969
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32530
		FILM NUMBER:		071307357

	BUSINESS ADDRESS:	
		STREET 1:		7720 LEHIGH AVE
		CITY:			NILES
		STATE:			IL
		ZIP:			60714
		BUSINESS PHONE:		8479661000

	MAIL ADDRESS:	
		STREET 1:		7720 LEHIGH AVE
		CITY:			NILES
		STATE:			IL
		ZIP:			60714

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MIDWESCO FILTER RESOURCES INC
		DATE OF NAME CHANGE:	19970402
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<TYPE>8-K
<SEQUENCE>1
<FILENAME>mfri8k121407.htm
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Washington, D.C. 20549</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>__________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>FORM 8-K</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>CURRENT REPORT</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Pursuant to Section 13 OR 15(d) of</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>The Securities Exchange Act of 1934</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Date of Report (Date of earliest event reported) </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size="2">
December 13, 2007</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>MFRI, INC.</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Exact name of registrant as specified in its charter)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse'>
    <tr >
        <td width="197" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Delaware</font></p> </td>
        <td width="197" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>0-18370</font></p> </td>
        <td width="197" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>36-3922969</font></p> </td> </tr>
    <tr >
        <td width="197" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(State or Other</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Jurisdiction of</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Incorporation)</font></p> </td>
        <td width="197" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Commission</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>File Number)</font></p> </td>
        <td width="197" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(IRS Employer</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Identification No.)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table border="0" cellspacing=0 cellpadding=0 width="475" style='border-collapse:collapse'>
    <tr >
        <td width="384" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7720 Lehigh Avenue, Niles, Illinois</font></p> </td>
        <td width="60" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>60714</font></p> </td>
        <td  width="31">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >
        <td width="384" nowrap valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Address of principal executive offices)</font></p> </td>
        <td  nowrap colspan="2" valign=top >
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Zip Code)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Registrant&#146;s telephone number, including area code: 847-966-1000 </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Not Applicable</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>(Former name or former address, if changed since last report.)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2><font face=Wingdings>o</font> Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2><font face=Wingdings>o</font> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2><font face=Wingdings>o</font> Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2><font face=Wingdings>o</font> Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<br>
<HR noshade align="center" width="100%" size="2">
<b>
<font size="2">Item 1.01&nbsp; Entry into a Material Definitive Agreement.</font>
</b>
<p><font size="2">By Third Amendment dated December 13, 2007 to Loan and
Security Agreement between the Company and Bank of America (1) financial
statement covenants were amended, (2) the limitation on restricted investments was increased to
$23,000,000, and (3) permission was granted to add a mortgage loan.</font></p>
<b>
<font size="2">Item 2.03&nbsp; Creation of a Direct Financial Obligation or
an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.</font>
</b>
<p><font size="2">The information contained in Item 1.01 of this report is
incorporated herein by reference.</font></p>
<b>
<font size="2">Item 9.01&nbsp; Financial Statements and Exhibits.</font>
</b><font SIZE="1"></font>
<p><font size="2">(d) Exhibits</font></p>
<p><font size="2">The following Exhibits are included with this Report:</font></p>
<p><font size="2">10.1 Third Amendment to Amended and Restated Loan and Security Agreement.</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<font size=2>&nbsp;</font>

</p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><b><font size=2>Signature</font></b></p>

<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font size=2>Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </font></p>

<p style=' margin-bottom:0pt; margin-top:5pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:5pt;text-align:left;'><font size=2>&nbsp;</font></p>


<table width="100%" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse'>
    <tr >
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=2>Date: December 14, 2007</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="320" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=2>MFRI, Inc.</font></p> </td> </tr>
    <tr >
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="320" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p align=right style='text-align:right'><font size=2>By:</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="320" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="320" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=2>Vice President, Secretary and Treasurer</font></p> </td> </tr>
    <tr >
        <td width="175" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="72" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=1>&nbsp;</font></p> </td>
        <td width="320" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
            <p><font size=2>(Principal Financial and Accounting Officer)</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>&nbsp;Exhibit
10.1</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>THIRD AMENDMENT TO</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><B><font SIZE=2>THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT</font></B><font size=2> is made as of this 13th day of December, 2007, by and among BANK OF AMERICA, N.A., a national banking association (&#147;Bank of America&#148;) with an office at 231 South LaSalle Street, 7<sup>th</sup> Floor, Chicago, Illinois 60604, individually as a Lender and as Agent (&#147;Agent&#148;) 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 &#147;Lender&#148; and collectively as the &#147;Lenders&#148;), the </font><B><font SIZE=2>LENDERS</font></B><font size=2> and </font><B><font SIZE=2>MFRI, INC.</font></B><font size=2>, a Delaware corporation (&#147;MFRI&#148;), </font><B><font SIZE=2>MIDWESCO FILTER RESOURCES, INC.</font></B><font size=2>, a
Delaware corporation (&#147;Midwesco&#148;), </font><B><font SIZE=2>PERMA-PIPE, INC.</font></B><font size=2>, a Delaware corporation (&#147;Perma-Pipe&#148;), </font><B><font SIZE=2>THERMAL CARE, INC.</font></B><font size=2>, a Delaware corporation (&#147;Thermal Care&#148;), </font><B><font SIZE=2>TDC FILTER MANUFACTURING, INC.</font></B><font size=2>, a Delaware corporation (&#147;TDC&#148;) and </font><B><font SIZE=2>MIDWESCO MECHANICAL AND ENERGY, INC.</font></B><font size=2>, a Delaware corporation (&#147;Mechanical&#148;).  Capitalized terms used in this Agreement have the meanings assigned to them in Appendix&nbsp;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 and Mechanical are sometimes hereinafter referred to individually as a &#147;Borrower&#148; and collectively as &#147;Borrowers&#148;.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>WHEREAS, Borrowers (other than Mechanical), 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, Agent and Lenders and by that certain Second Amendment to Amended and Restated Loan and Security Agreement dated August 28, 2007 by and among Borrowers, Agent and Lenders (said Amended and Restated Loan and Security Agreement, as amended from time to time, the &#147;Loan Agreement&#148;); and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>WHEREAS, Borrowers, Agent and Lenders desire to amend and restate the Loan Agreement as provided herein;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>NOW, THEREFORE, in consideration of the following terms and conditions, the parties agreed as follows:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Definitions</font></u><font size=2>.  All capitalized terms used herein without definition shall have the meanings contained in the Loan Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Amended Definitions</font></u><font size=2>.  The definitions of &#147;Existing Mortgage Indebtedness&#148; and &#147;Permitted Purchase Money Indebtedness&#148; contained in Appendix A to the Loan Agreement are hereby deleted and the following are inserted in their stead:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>&#147;</font><u><font size=2>Existing Mortgage Indebtedness</font></u><font size=2> &#150; (i) Money Borrowed owed by Borrowers in the aggregate principal amount of approximately $7,375,000 for existing mortgages on properties of Borrowers in Niles, Illinois, Winchester, Virginia, Lebanon, Tennessee, and Cicero, Illinois, and Borrowers&#146; foreign Subsidiaries in Assens, Denmark, and Nakskov, Denmark, and (ii) a pending refinancing to an amount not to exceed $4,500,000 in </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>CHICAGO/#1721509.6</font><font size=2> </font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>connection with the existing mortgage financing at MFRI&#146;s headquarters located at 7720&nbsp;North Lehigh Avenue, Niles, Illinois 60714, and any refinancings thereof so long as the terms and conditions of any such refinancings are acceptable to Agent in the reasonable exercise of its discretion and the Liens securing such refinancing are limited to the fixed properties identified above.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><u><font size=2>Permitted Purchase Money Indebtedness</font></u><font size=2> &#150; (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 and (y) Purchase Money Indebtedness of Borrowers in an aggregate amount not to exceed $6,000,000 incurred after December&nbsp;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.&#148;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Compliance Certificate</font></u><font size=2>.  </font><u><font size=2>Exhibit 8.1.3</font></u><font size=2> of the Loan Agreement is hereby deleted and </font><u><font size=2>Exhibit 8.1.3</font></u><font size=2> attached hereto is incorporated into the Loan Agreement in its stead.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Restricted Investments</font></u><font size=2>.  Subsection 8.2.12 of the Loan Agreement is hereby deleted and the following is inserted in its stead:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>&#147;8.2.12</font><u><font size=2>Restricted Investment</font></u><font size=2>.  Make or have, or permit any Subsidiary of any Borrower to make or have, any Restricted Investment, except that Borrowers may invest up to Twenty-Three Million Dollars ($23,000,000) in any foreign Subsidiary including a new foreign Subsidiary so long as (x) immediately after the applicable Borrower has made such Investment, no Event of Default has occurred and is continuing and (y)&nbsp;Borrowers shall have pledged to Agent for the benefit of Lenders sixty-six and two-thirds percent (66-2/3%) of the outstanding capital stock of any such new foreign Subsidiary pursuant to a pledge agreement or amendment in form and substance acceptable to Agent.  So long as Borrowers shall have complied with the provisions of the preceding sentence, Agent and Lenders shall be deemed to have consented to
the creation of any such new foreign Subsidiary and Borrowers shall be deemed to have complied with subsection 8.1.7 of the Loan Agreement with respect to such new foreign Subsidiary.&#148;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Financial Covenants</font></u><font size=2>.  </font><u><font size=2>Exhibit 8.3</font></u><font size=2> to the Loan Agreement is hereby deleted and </font><u><font size=2>Exhibit 8.3</font></u><font size=2> attached to this Third Amendment is inserted in its stead:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Waiver</font></u><font size=2>.  Lenders and Agent waive any Event of Default resulting from the failure of Borrowers to achieve the minimum Fixed Charge Coverage Ratio for the period ended October 31, 2007 as required by Section 8.3 and </font><u><font size=2>Exhibit 8.3</font></u><font size=2> of the Loan Agreement.  The waiver contained in this Section&nbsp;6 only pertains to the Minimum Fixed Charge Coverage Ratio for the period ended October&nbsp;31, 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>2</font></p> </td>

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<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>CHICAGO/#1721509.6</font><font size=2> </font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Conditions Precedent</font></u><font size=2>.  This Third Amendment shall become effective upon satisfaction of each of the following conditions precedent:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:0.5in;text-align:justify;'><font size=2>(A)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrowers, Agent and Lenders shall have executed and delivered to each other this Third Amendment.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Governing Law</font></u><font size=2>.  This Third 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.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Execution in Counterparts</font></u><font size=2>.  This Third Amendment may be executed in any number of counterparts, which shall, collectively and separately, constitute one Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><u><font size=2>Continuing Effect</font></u><font size=2>.  Except as otherwise provided herein, the Loan Agreement remains in full force and effect.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><i><b><font size=2>(Signature Page Follows)</font></b></i></p>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>3</font></p> </td>

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<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>CHICAGO/#1721509.6</font><font size=2> </font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><i><b><font size=2>(Signature Page to Third Amendment to</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><i><b><font size=2>Amended and Restated Loan and Security Agreement)</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'>&nbsp;</p>


<table width="660" border="0" cellspacing=0 cellpadding=0 style='border-collapse: collapse'>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>MFRI, INC. </font></B></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="249">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td width="145" valign=top style='border-top: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael D. Bennett</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td width="143" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>VP CFO</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael D. Bennett</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>VP CFO</font></p> </td> </tr>
    <tr >
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
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        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td width="145" valign=top style='border-top: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td width="143" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>VP CFO</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="331">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>THERMAL CARE, INC. </font></B></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="249">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td width="145" valign=top style='border-top: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td width="143" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>VP CFO</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="331">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>TDC FILTER MANUFACTURING, INC. </font></B></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="249">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td width="145" valign=top style='border-top: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td width="143" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>VP CFO</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="3" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="331">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><B><font SIZE=2>MIDWESCO MECHANICAL AND INERGY, INC. </font></B></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
        <td  colspan="2" valign=top style='border-bottom: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="249">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
        <td width="145" valign=top style='border-top: 1.0pt solid black; padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael D. Bennett</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="88" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Title:</font></p> </td>
        <td width="143" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>VP CFO</font></p> </td> </tr>
    <tr >
        <td width="297" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td width="68" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in'>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
        <td  colspan="2" valign=top style='padding-left: 5.4pt; padding-right: 5.4pt; padding-top: 0in; padding-bottom: 0in' width="247">
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;&nbsp;</font></p>

<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="639" style='border-collapse:collapse'>
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        <td width="213" valign=top style='padding:0in 5.75pt 0in 5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="213" valign=top style='padding:0in 5.75pt 0in 5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="213" valign=top style='padding:0in 5.75pt 0in 5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>CHICAGO/#1721509.6</font><font size=2>
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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:center;'><i><b><font size=2>(Signature Page to Third Amendment to</font></b></i></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><i><b><font size=2>Amended and Restated Loan and Security Agreement)</font></b></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'>&nbsp;</p>


<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr style='page-break-inside:avoid'>
        <td width="280" valign=top style='padding:0in .25in 0in 0in'>
            <font size=1>&nbsp;</font></td>
        <td width="344" valign=top style='padding:0in 0in 0in .25in'>
            <B><font SIZE=2>BANK OF AMERICA, N.A., </font></B><font size=2>as Agent and as a Lender</font></td> </tr></table>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='margin-left:5.4pt;border-collapse:collapse; '>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Brian Conole</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Name:</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Brian Conole</font></p> </td> </tr>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
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            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Senior Vice President</font></p> </td> </tr></table>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>CHICAGO/#1721509.6</font><font size=2> </font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><u><B><font SIZE=2>EXHIBIT</font></B><font size=2>&nbsp;</font><b><font size=2>8.1.3</font></b></u></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><font SIZE=2>COMPLIANCE CERTIFICATE</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><font size=2>[________________________]</font></p>

<p style=' margin-bottom:24pt; margin-top:0pt; margin-left:3.75in;text-align:left;'><font size=2>__________________, ___</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Bank of America Capital Corporation, as Agent</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>231 South LaSalle Street, 7<sup>th</sup> Floor</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><font size=2>Chicago, Illinois  60604</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>The undersigned, the chief financial officer of MFRI, Inc. (&#147;MFRI&#148;), gives this certificate to Bank of America Capital Corporation, in its capacity as Agent (&#147;Agent&#148;) in accordance with the requirements of subsection&nbsp;8.1.3 of that certain Amended and Restated Loan and Security Agreement dated December __, 2006 among MFRI, Midwesco Filter Resources, Inc., Perma-Pipe, Inc., Thermal Care, Inc., TDC Filter, Inc., Agent and the Lenders party thereto (&#147;Loan Agreement&#148;).  Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon my review of the balance sheets and statements of income of MFRI and its Subsidiaries for the [__________] period ending _______________, ____, copies of which are attached hereto, I hereby certify that:</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:1.04in;text-align:justify;'><b><font size=2> [(i)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>At no time between __________ and __________ was Availability less than $6,500,000]</font></b><font size=2> or</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:1.04in;text-align:justify;'><b><font size=2> [(i)</font></b><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><b><font size=2>During the time between __________ and __________ Availability was less than $6,500,000]</font></b><font size=2>; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:1.04in;text-align:justify;'><font size=2> (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed Change Coverage Ratio for the ______ month period ended _______________ is to 1; and</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; margin-left:0.5in; text-indent:1.04in;text-align:justify;'><font size=2> (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EBITDA for the most recent four fiscal quarters ended _____________ was $_____________.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Default exists on the date hereof, other than: __________________ ________________________________________________ [</font><b><font size=2>if none, so state</font></b><font size=2>]; and</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 8.1.3 &#150; Page 1</font></p> </td>

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<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font SIZE=1>CHICAGO/#1721509.6</font><font size=2> </font></p>
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<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><font size=2>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Event of Default exists on the date hereof, other than __________ ____________________________________________________ [</font><b><font size=2>if none, so state</font></b><font size=2>].</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.5in;text-align:left;'><font size=2>Very truly yours,</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.5in;text-align:left;'><font size=2>_______________________________</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:3.5in;text-align:left;'><font size=2>Chief Financial Officer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit 8.1.3 &#150; Page 2</font></p> </td>

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<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>EXHIBIT 8.3</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><font SIZE=2>FINANCIAL COVENANTS</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>DEFINITIONS</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><u><b><font size=2>Cash Flow</font></b></u><font size=2> &#150; with respect to any fiscal period, EBITDA for such period </font><u><font size=2>minus </font></u><font size=2>(i)&nbsp;Capital Expenditures (excluding, however, Capital Expenditures financed by third party financing) made within such period, (ii) income taxes paid in cash in such period, (iii) Interest Expense paid in cash within such period and (iv) principal payments of Money Borrowed (other than Revolving Credit Loans) made within such period.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><u><b><font size=2>Consolidated Net Income (Loss)</font></b></u><font size=2> &#150; with respect to any fiscal period, the net income (or loss) of MFRI determined in accordance with GAAP on a Consolidated basis; provided, however, Consolidated Net Income shall not include:  (a) the income (or loss) of any Person (other than a Subsidiary of any Borrower) in which a Borrower or any of its wholly-owned subsidiaries has an ownership interest unless received in a cash distribution or requiring the payment of cash; (b) the income (or loss) of any Person accrued prior to the date it became a Subsidiary of a Borrower or is merged into or consolidated with a Borrower; (c) all amounts included in determining net income (or loss) in respect of the write-up of assets on or after the Closing Date, including the subsequent amortization or expensing of the written-up portion of the assets; (d) extraordinary gains as
defined under GAAP; and (e) gains from asset dispositions (other than sales of inventory); and any increase or decrease in expenses resulting from the implementation of FASB 146.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><U><B><font SIZE=2>EBITDA</font></B></U><font size=2> &#150; with respect to any fiscal period, the sum of Consolidated Net Income (Loss) before Interest Expense, income taxes, depreciation and amortization for such period (but excluding any extraordinary gains for such period), </font><u><font size=2>plus</font></u><font size=2> the amount of any expenses or charges deducted from Consolidated Net Income for the applicable period in connection with the closure and write down of TDC&#146;s facility at 1331 South 55<sup>th</sup> Court, Cicero, Illinois; </font><u><font size=2>provided</font></u><font size=2> that the aggregate amount of add-backs to EBITDA as a result of any such charges or expenses shall not exceed $2,500,000, all as determined for Borrowers and their Subsidiaries on a Consolidated basis and in accordance with GAAP.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><u><b><font size=2>Fixed Charge Coverage Ratio</font></b></u><font size=2> &#150; with respect to any fiscal period, the ratio of (i)&nbsp;EBITDA for such period </font><u><font size=2>minus</font></u><font size=2> Capital Expenditures (excluding, however, Capital Expenditures financed by third party financing) made within such period </font><u><font size=2>minus</font></u><font size=2> income taxes paid in cash in such period to (ii) the sum of Interest Expense paid in cash within such period </font><u><font size=2>plus</font></u><font size=2> principal payments of Money Borrowed (other than Revolving Credit Loans) made within such period.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><u><b><font size=2>Interest Coverage Ratio</font></b></u><font size=2> &#150; with respect to any fiscal period, the ratio of (i)&nbsp;EBITDA for such period to (ii) Interest Expense paid in cash in such period, all as defined for MFRI and its subsidiaries on a Consolidated basis in accordance with GAAP.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit&nbsp;8.3 &#150; Page&nbsp;1</font></p> </td>

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<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><u><b><font size=2>Interest Expense</font></b></u><font size=2> &#150; with respect to any fiscal period, interest expense paid or accrued for such period, including without limitation the interest portion of Capitalized Lease Obligations, plus the Letter of Credit and LC Guaranty fees owing for such period, all as determined for MFRI and its Subsidiaries on a Consolidated basis and in accordance with GAAP.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>COVENANTS</font></B></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><u><b><font size=2>Minimum EBITDA</font></b></u><font size=2>.  Borrowers shall achieve EBITDA of at least $8,000,000 as of the last day of each fiscal quarter ending each October 31, January 31, April 30 and July 31 for the most recent four fiscal quarters then ended.</font></p>

<p style=' margin-bottom:12pt; margin-top:0pt; text-indent:1in;text-align:justify;'><u><b><font size=2>Minimum Fixed Charge Coverage Ratio</font></b></u><font size=2>.  If at any time Availability is less than $6,500,000, then Borrowers shall not permit Fixed Charge Coverage Ratio for the most recently ended twelve month period to be less than 1.00 to 1.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Exhibit&nbsp;8.3 &#150; Page&nbsp;2</font></p> </td>

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