SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
EXHIBIT
10.1
SIXTH
AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT (the “Amendment”),
dated August 18, 2009, is entered into by and between PURE EARTH, INC., a
Delaware corporation (“Pure Earth”) and all of its wholly owned subsidiaries and
XXXXX FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting through its Xxxxx
Fargo Business Credit operating division.
RECITALS
The Borrower and the Lender are parties
to a Credit and Security Agreement dated October 24, 2006 (as amended from time
to time, the “Credit Agreement”). Capitalized terms used in this Amendment have
the meanings given to them in the Credit Agreement unless otherwise
specified.
NOW, THEREFORE, in consideration of the
premises and of the mutual covenants and agreements herein contained, it is
agreed as follows:
1. The
definition of “Floating Rate” set forth in Section 1.1 of the Credit Agreement
shall be deleted in its entirety and replaced with the following:
“Floating
Rate” means, retroactive to June 1, 2009, an annual interest rate equal to the
sum of the Prime Rate plus five and three quarters percent (5.75%), which
interest rate shall change when and as the Prime Rate changes.
2. The
definition of “Maximum Line” set forth in Section 1.1 of the Credit Agreement
shall be deleted in its entirety and replaced with the following:
“Maximum
Line” means $4,700,000, unless this amount is reduced pursuant to Section 2.10,
in which event it means such lower amount.
3. Section
6.2(b) of the Credit Agreement shall be deleted in its entirety.
4. LIBOR
Advances. LIBOR Advances shall not be available at any
time.
5. Events of
Default. The Borrower is in default of the following
provisions of the Credit Agreement (collectively, the “Existing
Defaults”):
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a.
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Section
6.2(a) Minimum Adjusted Net Income. For the quarter ending June
30, 2009, the Company reported Adjusted Net Income of
($2,770,000), which does not satisfy the requirement that such amount be
not less than ($2,120,000); and
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b. Section
6.2(c) Debt Service Coverage Ratio. The Company reported a Debt
Service Coverage Ratio for the cumulative six months ending June 30, 2009 of
(0.10:1) which does not satisfy the requirement that such amount be not less
than 0.54:1.
The
Existing Defaults constitute Events of Default under the Credit Agreement. Upon
the terms and subject to the conditions set forth in this Amendment, the Lender
hereby waives the Existing Defaults, effective as of June 30,
2009. This waiver shall be effective only in this specific instance
and for the specific purpose for which it is given, and this waiver shall not
entitle the Borrower to any other or further waiver in any similar or other
circumstances.
6. Termination of Credit
Agreement on Maturity Date. The Credit Agreement shall not
renew on October 23, 2009 and shall be fully due and payable on October 23,
2009, unless terminated earlier by Xxxxx Fargo.
7. Reserves. The
Lender agrees to release the NE Reserve and the $490,000 reserve referenced in
the Consent and Waiver dated March 4, 2008. The first $1,000,000 of
otherwise Eligible Accounts shall be deemed ineligible. The foregoing
notwithstanding, the Lender reserves all rights under the Credit Agreement to
institute and implement Borrowing Base Reserves.
8. Payments to Fidus Mezzanine
Capital, L.P. Borrower may not make any cash payments to Fidus
Mezzanine Capital, L.P.
9. No Other Changes.
Except as explicitly amended by this Amendment, all of the terms and conditions
of the Credit Agreement shall remain in full force and effect and shall apply to
any advance or letter of credit thereunder.
10. Representations and
Warranties. The Borrower hereby represents and warrants to the Lender as
follows:
(a) The
Borrower has all requisite power and authority to execute this Amendment and any other agreements
or instruments required hereunder and to perform all of its obligations
hereunder, and this Amendment and all such other
agreements and instruments has been duly executed and delivered by the Borrower
and constitute the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms.
(b) The
execution, delivery and performance by the Borrower of this Amendment and any other agreements
or instruments required hereunder have been duly authorized by all necessary
corporate action and do not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree presently in
effect, having applicability to the Borrower, or the articles of incorporation
or by-laws of the Borrower, or (iii) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected.
(c) All
of the representations and warranties contained in Article V of the Credit
Agreement are correct on and as of the date hereof as though made on and as of
such date, except to the extent that such representations and warranties relate
solely to an earlier date.
11. References. All
references in the Credit Agreement to “this Agreement” shall be deemed to refer
to the Credit Agreement as amended hereby; and any and all references in the
Security Documents to the Credit Agreement shall be deemed to refer to the
Credit Agreement as amended hereby.
12. No Other Waiver.
Except as provided in Section 5, the execution of this Amendment and the
acceptance of all
other agreements and instruments related hereto shall not be deemed to be a
waiver of any Default or Event of Default under the Credit Agreement or a waiver
of any breach, default or event of default under any Security Document or other
document held by the Lender, whether or not known to the Lender and whether or
not existing on the date of this Amendment.
13. Release. The Borrower
hereby absolutely and unconditionally releases and forever discharges the
Lender, and any and all participants, parent corporations, subsidiary
corporations, affiliated corporations, insurers, indemnitors, successors and
assigns thereof, together with all of the present and former directors,
officers, agents and employees of any of the foregoing, from any and all claims,
demands or causes of action of any kind, nature or description, whether arising
in law or equity or upon contract or tort or under any state or federal law or
otherwise, which the Borrower has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.
14. Costs and Expenses.
The Borrower hereby reaffirms its agreement under the Credit Agreement to pay or
reimburse the Lender on demand for all costs and expenses incurred by the Lender
in connection with the Loan Documents, including without limitation all
reasonable fees and disbursements of legal counsel. Without limiting the
generality of the foregoing, the Borrower specifically agrees to pay all fees
and disbursements of counsel to the Lender for the services performed by such
counsel in connection with the preparation of this Amendment and the documents
and instruments incidental hereto. The Borrower hereby agrees that the Lender
may, at any time or from time to time in its sole discretion and without further
authorization by the Borrower, make a loan to the Borrower under the Credit
Agreement, or apply the proceeds of any loan, for the purpose of paying any such
fees, disbursements, costs and expenses.
15. Miscellaneous. This
Amendment may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same
instrument.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.
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XXXXX
FARGO BANK,
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NATIONAL
ASSOCIATION
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By:
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/s/ Xxxx Xxxxx
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Xxxx
Xxxxx
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By:
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/s/ Xxxxx
Xxxxxxxxxx
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Its
Vice President
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Xxxxx
Xxxxxxxxxx
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Its
Executive Vice
President
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