EXHIBIT 10
ELEVENTH AMENDMENT TO LOAN AGREEMENT
THIS ELEVENTH AMENDMENT TO LOAN AGREEMENT (this "ELEVENTH AMENDMENT"),
dated as of June 22, 2005 (the "ELEVENTH AMENDMENT DATE"), is made by and among
PDG ENVIRONMENTAL, INC., a Delaware corporation ("PARENT"), PROJECT DEVELOPMENT
GROUP, INC., a Pennsylvania corporation ("PROJECT"), ENVIRO-TECH ABATEMENT
SERVICES, CO., a North Carolina corporation ("ENVIRO-TECH"), and PDG, INC., a
Pennsylvania corporation ("PDG"), (collectively, "BORROWERS"), and SKY BANK, an
Ohio banking institution, having an office at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxx, Xxxxxxxxxxxx 00000 ("BANK").
W I T N E S S E T H
-------------------
WHEREAS, Borrowers and Bank entered into a Loan Agreement dated as of
August 3, 2000 (the "ORIGINAL LOAN Agreement"), as amended by that certain
Amendment to Loan Agreement dated as of June 14, 2001 (the "FIRST AMENDMENT"),
that certain Second Amendment to Loan Agreement dated as of May 6, 2002 (the
"SECOND AMENDMENT"), that certain Third Amendment to Loan Agreement dated as of
August 30, 2002 (the "THIRD AMENDMENT"), that certain Fourth Amendment to Loan
Agreement dated as of December 31, 2002 (the "FOURTH AMENDMENT"), that certain
Fifth Amendment to Loan Agreement dated as of February 28, 2003 (the "FIFTH
AMENDMENT"), that certain Sixth Amendment to Loan Agreement dated as of July 22,
2003 (the "SIXTH AMENDMENT"), that certain Seventh Amendment to Loan Agreement
dated as of January 28, 2004 (the "SEVENTH AMENDMENT"), that certain Eighth
Amendment to Loan Agreement dated July 8, 2004 (the "EIGHTH AMENDMENT"), that
certain Ninth Amendment to Loan Agreement dated November 3, 2004 (the "NINTH
AMENDMENT") and that certain Tenth Amendment to Loan Agreement dated December
21, 2004 (the "TENTH AMENDMENT"), as further amended by letter agreement dated
June 13, 2005 (collectively the "LOAN AGREEMENT"), pursuant to which Borrowers
requested Bank (i) to extend credit to Borrowers in an amount not to exceed
$400,000, the proceeds of which were made available as working capital and to
refinance certain debt ("FACILITY A"), (ii) to extend credit to Borrowers in an
amount not to exceed One Million and 00/100 Dollars ($1,000,000.00), the
proceeds of which were made available as working capital and to refinance
certain other debt ("FACILITY B"), (iii) to extend credit to Borrowers in an
amount not to exceed $300,000, the proceeds of which were made available to
finance a portion of certain capital asset purchases ("FACILITY C"), (iv) to
extend credit to Borrowers in an original amount not to exceed $5,250,000 and
subsequently reducing to an amount not to exceed $4,600,000, which included a
temporary overline loan (as created in the Second Amendment and terminated in
the Sixth Amendment) in the amount of $750,000, and subsequently increased to
$5,000,000, then to $5,500,000, then to $6,500,000, then to $7,500,000 through a
second overline note (as created in the Ninth Amendment), and then to $8,000,000
through a $500,000 increase to the second overline note (as authorized in the
Tenth Amendment), the proceeds of which were made available to refinance an
existing line of credit and to provide working capital ("FACILITY D"), and (v)
to extend credit to the Borrowers in an amount not to exceed $300,000, the
proceeds of which were used to purchase equipment ("FACILITY E"); and
WHEREAS, Borrowers and Bank desire to amend certain provisions of the
Loan Agreement as provided in this Eleventh Amendment for the purpose of, inter
alia, extending the Facility D Expiration Date and the Overline Expiry Date,
decreasing the interest rate on the Facility D Loan, making an additional loan
to the Borrowers in an amount not to exceed $400,000 and making related changes
to the Loan Documents.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements herein contained and intending to be legally bound
hereby, covenant and agree as follows:
Section 1. Definitions. Terms which are used in this Eleventh Amendment
as defined terms which are not otherwise defined herein shall have the meanings
ascribed to those terms in the Loan Agreement. The Loan Agreement and this
Eleventh Amendment are to be treated as one agreement and are together referred
to hereafter as the "AGREEMENT."
(a) The following definitions shall be inserted in Section I of the
Loan Agreement in the appropriate alphabetical order:
"ELEVENTH AMENDMENT" shall mean the Eleventh Amendment to Loan
Agreement by and between the Borrowers and Bank dated as of the
Eleventh Amendment Date.
"ELEVENTH AMENDMENT DATE" shall mean the date set forth in the
introductory paragraph of the Eleventh Amendment.
"ELEVENTH AMENDMENT DOCUMENTS" shall collectively mean all
documents to be executed and delivered by any Borrower or Guarantor in
connection with the Eleventh Amendment including, without limitation,
the Eleventh Amendment, the Facility F Notes, the Security Agreement
Amendments, the Guaranty and the Tenth Mortgage Modification.
"FACILITY F EXPIRY DATE" shall mean June __, 2009.
"FACILITY F LOAN" shall mean as set forth in Section 2.04(j)
of this Agreement.
"FACILITY F NOTES" shall mean as set forth in Section 2.04(k)
of this Agreement.
"SECURITY AGREEMENT AMENDMENTS" shall collectively mean the
four Amendment No. 1 to Security Agreements, each dated as of the date
of this Eleventh Amendment, by and between a Borrower and Bank.
"TENTH MORTGAGE MODIFICATION" shall mean the Tenth
Modification of Mortgage dated the Eleventh Amendment Date, made by
Project in favor of Bank.
Page 2
(b) The following definitions in Section I of the Loan Agreement are
hereby amended and restated to read as follows:
"AGREEMENT" shall mean this Loan Agreement as amended by the
First Amendment, the Second Amendment, the Third Amendment, the Fourth
Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh
Amendment, the Eight Amendment, the Ninth Amendment, the Tenth
Amendment and the Eleventh Amendment as the same may be further
amended, modified or supplemented from time to time.
"FACILITY D EXPIRY DATE" shall mean June 6, 2007.
"GUARANTOR" shall mean Servestec, Inc., a Florida corporation.
"GUARANTY" shall mean the Guaranty and Suretyship Agreement of
Servestec dated as of the Eleventh Amendment Date, and all amendments,
modifications and supplements thereto.
"MORTGAGE" shall mean that certain Open-End Mortgage and
Security Agreement dated August 3, 2000, as modified by that certain
Modification of Open-End Mortgage and Security Agreement dated June 14,
2001, that certain Second Modification of Open End Mortgage dated May
6, 2002, that certain Third Modification of Open End Mortgage and
Security Agreement dated as of August 30, 2002, that certain Fourth
Modification of Open End Mortgage and Security Agreement dated as of
February 28, 2003, that certain Fifth Modification of Open End Mortgage
and Security Agreement dated as of the Sixth Amendment Date, that
certain Sixth Modification of Open End Mortgage and Security Agreement
dated as of the Seventh Amendment Date, that certain Seventh
Modification of Open End Mortgage and Security Agreement dated as of
the Eighth Amendment Date, that certain Eighth Modification of Open End
Mortgage and Security Agreement dated as of the Ninth Amendment Date,
that certain Ninth Modification of Open End Mortgage and Security
Agreement dated as of the Tenth Amendment Date and that certain Tenth
Modification of Open End Mortgage and Security Agreement dated as of
the Eleventh Amendment Date, and all other modifications and amendments
thereto, each by Project in favor of Bank.
"NOTES" shall collectively mean the (i) the Facility A Note,
(ii) the Facility B Note, (iii) the Facility C Notes, (iv) the Facility
D Note, (v) the Facility E Notes, and (vi) the Facility F Notes and any
other note of Borrowers executed and delivered pursuant to this
Agreement, together with all extensions, renewals, refinancings or
refundings in whole or in part.
"OVERLINE EXPIRY DATE" shall mean June 6, 2007.
"SECURITY AGREEMENTS" means the four Security Agreements, each
dated as of the date of this Agreement, by and between a Borrower and
Bank, each as amended by the
Page 3
Amendment No. 1 to the Security Agreement, and the Security Agreement
of Servestec, as may be further amended, modified or supplemented from
time to time.
"SERVESTEC" means Servestec, Inc., a Florida corporation.
Section 2. Amendment of Section 2.04 of the Loan Agreement.
(a) The title of Section 2.04 of the Loan Agreement is hereby amended
and restated as follows:
"2.04 Facility D, Facility E and Facility F"
(b) Section 2.04 of the Loan Agreement is amended by inserting the
following subparagraphs as subparagraphs (j), (k), (l) and (m), respectively.
(j) Facility F Loans. Subject to the terms and
conditions of, and relying upon the representations and
warranties set forth in this Agreement and the Loan Documents,
Bank agrees to make term loans ("Facility F Loans") to any of
the Borrowers at any time or from time to time on or after the
Eleventh Amendment Date and to and including the day
immediately preceding the Facility F Expiry Date, in an
aggregate principal amount not to exceed Four Hundred Thousand
and 00/100 Dollars ($400,000.00). Each Borrower may borrow
under this Section 2.04(j). The proceeds of each Facility F
Loan shall be used by such Borrower only to purchase equipment
to be used by such Borrower. The amount of each Facility F
Loan shall be limited to 100% of the invoiced purchase price
of such equipment.
(k) Facility F Note. The obligations of Borrowers to
repay the unpaid principal amount of each Facility F Loan made
to any Borrower by Bank and to pay interest on the unpaid
principal amount thereof shall be joint and several and shall
be evidenced in part by a Facility F Note of Borrowers, dated
the Eleventh Amendment Date, in substantially the form
attached as Exhibit "B" to the Eleventh Amendment, with the
blanks appropriately filled. Each executed Facility F Note
shall be delivered by Borrowers to Bank on the date the
related Facility F Loan is made by Bank.
(l) Making of Facility F Loans. Subject to the terms
and conditions of this Agreement and the other Loan Documents,
no Facility F Loans shall be made until Borrowers have
satisfied all applicable conditions specified in Article IV
hereof and have furnished to Bank evidence satisfactory to
Bank of compliance with the requirements of Section 2.04(j)
hereof. Each Facility F Loan that is made shall be made on
such Business Day and in such amount as the Borrower to whom
such Loan is to be made shall request by written notice
(together with the aforesaid evidence and an invoice for the
equipment to be purchased, all in form and substance
satisfactory to the Bank) received by Bank no later than 2:00
p.m.
Page 4
(New Castle, Pennsylvania time) on the date which is five
(5) Business Days before the date of requested disbursement
for such Loan (the "Loan Disbursement Date"). Bank shall make
the proceeds of such Loan available to such Borrower at Bank's
Office in immediately available funds not later than 3:00
p.m., New Castle, Pennsylvania, time on the Loan Disbursement
Date.
(m) Payments of Principal and Maturity. On the first
day of the first calendar month after the date a Facility F
Loan is made, Borrowers shall pay to Bank the amount of
interest accruing on such Loan to such day. On the first day
of each calendar month thereafter, through and including June
1, 2009, Borrowers shall make a payment of principal and
interest on such Loan in that amount, as determined by Bank at
the time such Loan is made, which would fully amortize the
then principal balance of such Loan in equal monthly
installments, at the interest rate applicable to such Loan at
the time of determination, over the term of such Loan ending
on the Facility F Expiry Date. Each such payment shall be
applied first to accrued interest and the balance to the
reduction of principal. All remaining unpaid principal,
accrued interest and all other sums and costs incurred by
Bank, pursuant to this Agreement, the Facility F Notes or the
making of the Facility F Loans, shall be immediately due and
payable on the Facility F Expiry Date without notice,
presentment or demand.
Section 3. Amendment of Section 2.05(b) of the Loan Agreement. Section
2.05(b) of the Loan Agreement is hereby amended and restated as follows:
"(b) Interest on Facilities B, C, D, E and F. Subject to the
terms and conditions of this Agreement, (i) the aggregate
outstanding principal balance of the Facility B Loan, the
Facility C Loans and the Facility E Loans shall bear interest
at a rate per annum equal to one percent (1%) above the Prime
Rate, (ii) the aggregate outstanding principal balance of the
Facility D Loans shall bear interest at a rate per annum equal
to twenty-five hundredths percent (0.25%) above the Prime
Rate, and (iii) the aggregate outstanding principal balance of
the Facility F Loans shall bear interest at a rate per annum
equal to seven and twenty-five hundredths percent (7.25%)."
Section 4. Amendment of Section 2.08 of the Loan Agreement. Section
2.08 of the Loan Agreement is hereby amended and restated as follows:
"2.08 Facility D Origination Fee. Borrowers shall pay to Bank
a commitment fee for Facility D payable in advance on June 6,
2005 and on each June 6 thereafter to but excluding the
Facility D Expiry Date, each in the amount of Sixteen Thousand
Dollars ($16,000)."
Section 5. Representations and Warranties. Borrowers hereby represent
and warrant to the Bank that:
Page 5
(a) Each Borrower has and will continue to have corporate power and
authority to execute, deliver and perform the provisions of this Eleventh
Amendment, the other Eleventh Amendment Documents, and the Loan Agreement as
amended hereby and to execute and deliver the instruments required by the
provisions of the Loan Agreement as amended hereby to be executed and delivered
by it; and all such action has been duly and validly authorized by all necessary
corporate proceedings on the part of each Borrower.
(b) The execution and delivery of this Eleventh Amendment and the
carrying out of this Eleventh Amendment, the other Eleventh Amendment Documents,
and the Loan Agreement as amended hereby will not violate any provisions of law
or the articles of incorporation or bylaws of any Borrower or of any agreement
or other instrument to which any Borrower is a party or by which it is bound or
to which it is subject.
(c) This Eleventh Amendment and the other Eleventh Amendment Documents,
which have been duly and validly executed and delivered by Borrowers, and the
Loan Agreement as amended hereby, constitute legal, valid and binding
obligations of each Borrower enforceable in accordance with the terms hereof and
thereof.
(d) The representations and warranties by the Borrowers and the
Guarantor contained in the Loan Agreement and the other Loan Documents are
correct and accurate on and as of the date hereof.
(e) No event has occurred and is continuing and no condition exists
which constitutes an Event of Default or Potential Default.
Section 6. Effective Date; Conditions to Closing; Post-Closing
Obligations.
(a) The effective date of this Eleventh Amendment shall be the Eleventh
Amendment Date. As a condition to the effectiveness of this Eleventh Amendment,
prior to or contemporaneously with the execution of this Eleventh Amendment
(unless otherwise specified on the Exhibit A), the Borrowers shall satisfy the
conditions set forth in Exhibit A attached hereto.
(b) Borrowers shall deliver within 45 days after the date of this
Eleventh Amendment a certificate of title insurance with respect to the Mortgage
Modification in form and substance satisfactory to Bank.
Section 7. No Waiver. Nothing contained in this Eleventh Amendment
shall be construed to impair the security of Bank, its successors and assigns
under the Loan Agreement and the other Loan Documents, nor affect nor impair any
rights or powers that Bank may have under the Loan Documents including without
limitation those rights for the recovery of the indebtedness of Borrowers to
Bank in case of non-fulfillment of the terms, provisions and covenants contained
in this Eleventh Amendment or the other Loan Documents not modified by this
Eleventh Amendment. All rights, powers and remedies of Bank under any other
agreement
Page 6
now or at any time hereafter in force between Bank and Borrower shall be
cumulative and not alternative, and shall be in addition to all rights, powers
and remedies given to Bank by law.
Section 8. Security. The Borrowers' obligations under the Notes and the
Loan Agreement as amended hereby (including any increase in such obligations as
provided in the Loan Documents) are and will continue to be secured by the
Security Agreements, the Mortgage, the Guaranty and the other Loan Documents (as
each such term is defined in the Agreement) and the liens and security interests
granted to the Bank thereunder, and such obligations are and will continue to be
a part of the Debt which is secured by the liens and security interests granted
in the Security Agreements and the Mortgage and the other Loan Documents and a
part of the Guaranteed Obligations (as defined in the Guaranty) which are
guaranteed by the Guaranty.
Section 9. Further Assurances. Borrowers and Guarantor hereby agree to
execute such amendments to the Loan Documents and to take such actions as the
Bank deems reasonably necessary in connection with the foregoing amendments of
the Loan Agreement.
Section 10. UCC. Each Borrower hereby irrevocably authorizes the Bank
to execute (on behalf of each respective Borrower) and file against each
Borrower one or more financing, continuation or amendment statements pursuant to
the Code in form satisfactory to Borrowers and the Bank, and Borrowers will pay
the reasonable cost of preparing and the filing of the same in all jurisdictions
in which such filing is deemed by the Bank to be necessary or desirable in order
to perfect, preserve and protect its security interests.
Section 11. Expenses. Borrowers agree to pay Bank at the closing of the
transactions contemplated by this Amendment a Facility F Loan Origination Fee of
$500.00. Additionally, Borrowers agree to pay and hold Bank harmless against
liability for the payment of all out-of-pocket expenses of Bank arising in
connection with this Eleventh Amendment, including without limitation the fees
and expenses of legal counsel for Bank.
Section 12. Miscellaneous. Except as amended hereby, the provisions of
the Loan Documents shall remain in full force and effect and Borrowers and Bank
hereby confirm and ratify the Loan Agreement in its entirety as amended hereby.
This Eleventh Amendment shall be deemed to be a contract under the laws of the
Commonwealth of Pennsylvania and for all purposes shall be construed in
accordance with, and governed by, such laws excluding the rules applicable to
the conflict of laws. All representations, warranties and covenants contained
herein or made in writing by Borrowers in connection herewith shall survive the
execution and delivery of this Eleventh Amendment and will bind and inure to the
benefit of the successors and assigns of the parties hereto, provided that,
without the prior written consent of the Bank, Borrowers may not assign the Loan
Agreement as amended hereby or any of their rights or obligations under the Loan
Agreement and this Eleventh Amendment and any such attempted assignment shall be
null and void.
Page 7
Section 13. Recitals. The Recitals set forth in the beginning of this
Eleventh Amendment are hereby fully incorporated by reference.
Section 14. Waiver Of Trial By Jury.
--------------------------------------------------------------------------------
BORROWERS AND BANK EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVE ALL INITIALS:
BENEFIT AND ADVANTAGE OF ANY RIGHT TO A TRIAL BY JURY, AND NEITHER Borrowers:
WILL AT ANY TIME INSIST UPON, OR PLEAD OR IN ANY MANNER WHATSOEVER JCR
CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF A TRIAL BY JURY IN ANY JCR
ACTION ARISING IN CONNECTION WITH THIS ELEVENTH AMENDMENT, THE JCR
NOTES OR ANY OF THE LOAN DOCUMENTS. JCR
Bank:
DKP
--------------------------------------------------------------------------------
Page 8
IN WITNESS WHEREOF, and intending to be legally bound, the parties, by
their duly authorized officers, have executed and delivered this Eleventh
Amendment as of the date set forth at the beginning of this Eleventh Amendment.
BORROWERS:
ATTEST: PDG ENVIRONMENTAL, INC.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
--------------------------------- ---------------------------------
Assistant Secretary Title: President & CEO
----------------------
ATTEST: PROJECT DEVELOPMENT GROUP, INC.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
--------------------------------- ----------------------------------
Assistant Secretary Title: President & CEO
----------------------
ATTEST: ENVIRO-TECH ABATEMENT
SERVICES, CO.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
--------------------------------- ----------------------------------
Assistant Secretary Title: President & CEO
----------------------
ATTEST: PDG, INC.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
--------------------------------- ----------------------------------
Assistant Secretary Title: President & CEO
----------------------
GUARANTOR:
SERVESTEC, INC.
By: /s/ Xxxx X Xxxxx
----------------------------------
Title: President & CEO
----------------------
BANK:
SKY BANK
By: /s/ Xxxxxxx X. Xxxx
-------------------------
Xxxxxxx X. Xxxx,
Vice President
Page 9
JOINDER TO ELEVENTH AMENDMENT TO LOAN AGREEMENT
Each of the following entities or individuals join in the foregoing
Eleventh Amendment to Loan Agreement for the purpose of consenting to the terms
thereof and ratifying and confirming its or his obligations under its or his
respective Security Agreement, Mortgage, Guaranty, Indemnity Agreement, Lock Box
Agreement or any other Loan Document (as those terms are defined in the Loan
Agreement) as the case may be, including, without limitation, any warrant to
confess judgment and any waiver of jury trial contained therein, previously
delivered to the Bank. The undersigned expressly agree to the Termination
Agreement dated on or about the date hereof.
ATTEST: PDG ENVIRONMENTAL, INC.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
----------------------------------- -----------------------------
Secretary Title: President & CEO
--------------------------
ATTEST: PROJECT DEVELOPMENT GROUP, INC.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
----------------------------------- -----------------------------
Secretary Title: President & CEO
--------------------------
ATTEST: ENVIRO-TECH ABATEMENT
SERVICES, CO.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
----------------------------------- -----------------------------
Secretary Title: President & CEO
--------------------------
ATTEST: PDG, INC.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
----------------------------------- -----------------------------
Secretary Title: President & CEO
--------------------------
ATTEST: SERVESTEC, INC.
/s/ Xxxxx X'Xxxx By: /s/ Xxxx X Xxxxx
----------------------------------- -----------------------------
Secretary Title: President & CEO
--------------------------
EXHIBIT A
The following deliveries are to be made by the Borrowers before the
Eleventh Amendment to Loan Agreement shall be effective:
(a) Borrowers shall execute and deliver the Eleventh Amendment to
Loan Agreement and the same shall be consented to by the
Guarantor.
(b) Borrowers shall execute and deliver the Facility F Note in the
form attached to this Amendment as Exhibit B.
(c) Each party to the Mortgage shall execute and deliver the Tenth
Modification to Mortgage in the form attached hereto as
Exhibit C.
(d) Borrowers shall execute and deliver the Amendment No. 1 to
Security Agreement in the form attached hereto as Exhibit D.
(e) Borrowers shall execute the Joinder to the Eleventh Amendment
to Loan Agreement (the "JOINDER") and obtain signatures from
all other parties to the Joinder and deliver the fully
executed Joinder to the Bank.
(f) Counsel for the Borrowers shall deliver an opinion in the form
and substance satisfactory to Bank and its counsel.
(g) Each Borrower shall deliver a certificate of the corporate
secretary of each Borrower stating that the articles of
incorporation and by-laws of each such corporation remain in
effect in the form delivered to the Bank on the Closing Date
and attaching copies of resolutions properly adopted by the
directors of each such corporation.
(h) Borrowers shall pay the sum of $_______ to Biltmore Abstract,
Limited Partnership for the certificates of title insurance
for the mortgage modification executed and delivered by
Project in connections with this Eleventh Amendment.
(i) Borrowers shall pay the sum of $_______ to the Bank as a loan
origination fee for Facility F.
(j) Borrowers shall deliver updated lien searches of the
Borrowers, and a lien search of Servestec, Inc. in form and
substance satisfactory to the Bank.
(k) Servestec, Inc. shall execute and deliver the Guaranty and
Suretyship Agreement and the Security Agreement in form and
substance satisfactory to the Bank.
EXHIBIT B
(Form of Facility F Note)
EXHIBIT C
(Form of Tenth Modification to Open End Mortgage and Security Agreement)
EXHIBIT D
Form of Amendment No. 1 to Security Agreement
