Exhibit 10
 
AMENDMENT TO
LOAN AND SECURITY AGREEMENT

 
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT (the “Amendment”) is dated and
effective as of May 21, 2010, by and among The Wood Energy Group, Inc., a
Missouri corporation (the “Borrower”), whose address is 2255 Glades Road, Suite
342-W, Boca Raton, Florida 33431, and FIFTH THIRD BANK, an Ohio banking
corporation, successor by merger with Fifth Third Bank, a Michigan banking
corporation, whose address is 222 South Riverside Plaza, 32nd Floor, Chicago,
Illinois, 60606 (the “Bank”).
 
RECITALS
 
A.  
Borrower and the Bank entered into that certain Loan and Security Agreement
dated as of September 4, 2009, pursuant to which the Bank agreed to make certain
Revolving and Term Loans to Borrower (the “Loan Agreement”).

 
B.  
Borrower has requested that the Bank increase the Revolving Loan Commitment,
reduce the Capex Loan Commitment and adjust the retainage amount for purposes of
advances on the Revolving Loan.

 
C.  
The Bank is willing to increase the Revolving Loan Commitment, reduce the Capex
Loan Commitment and adjust the retainage, subject to the amendments to the Loan
Agreement set forth herein and execution of the Loan Documents attached hereto,
and the other terms and conditions hereinafter set forth.

 
NOW THEREFORE, in consideration of the foregoing Recitals, and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
 
1. 1.         Defined Terms.  Capitalized terms used herein and not otherwise
defined in this Amendment shall have the meanings specified for such terms in
the Loan Agreement and the Loan Documents identified therein and herein.  All
references herein to Articles and Sections shall mean the Articles and Sections
of the Loan Agreement.
 
2. 2.         Amendments to Loan Agreement.
 
(a)           The following definitions contained in Article 1 of the Loan
Agreement are hereby deleted and replaced in their entirety with the following:
 
“Revolving Loan Commitment” shall mean an amount equal to One Million and No/100
Dollars ($1,000,000.00).
 
“Revolving Loan Maturity Date” shall mean July 3, 2011.
 
“Capex Loan Commitment” shall mean an amount equal to One Million and No/100
Dollars ($1,000,000.00).

 
 

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“Capex Facility” shall mean a Capex Loan in the principal amount of One Million
and No/100 Dollars ($1,000,000.00), converting to a Term Loan, for the purpose
of financing the purchase of Equipment.
 
“Working Capital Facility” shall mean a facility encompassing Revolving Loans in
the principal amount of One Million and No/100 Dollars ($1,000,000.00) for the
purposes of financing working capital and other reasonable and appropriate
corporate purposes.
 
(b)           The following definition contained in Article 1 of the Loan
Agreement is amended as follows:
 
The following language is added to the last sentence of “Borrowing Base Amount”:
 
…plus (iii) fifty percent (50%) of the retainage held by Union Pacific Railroad
Company (“UP”) with respect to contracts by and between Borrower and UP, up to a
maximum of Five Hundred Thousand and No/100 Dollars ($500,000.00).
 
(c)           The second paragraph of Section 2.2(d) of the Loan Agreement is
deleted and the following paragraph is substituted in lieu thereof:
 
If Borrower has generated Excess Cash Flow during any calendar year that this
Agreement remains in effect (not including calendar year 2009), then
seventy-five percent (75%) of that Excess Cash Flow shall constitute a required
Mandatory Term Loan Prepayment, Borrower shall, without notice or demand of any
kind, pay to the Bank seventy-five percent (75%) of such Excess Cash Flow within
one hundred twenty (120) days after the end of each such calendar year, and such
amount shall be applied to the then-outstanding Term Loan balance.
 
(d)           Section 9.7(b) of the Loan Agreement is deleted and the following
paragraph is substituted in lieu thereof:
 
(b)
as soon as available, and in any event, within forty-five (45) days following
the end of each fiscal quarter, a copy of the financial statements of the
Borrower regarding such fiscal quarter, including balance sheet, statement of
income and retained earnings, statement of cash flows for the fiscal quarter
then ended in the format and detail and such other information (including
non-financial information) required by the Securities and Exchange Commission or
as the Bank may request, in reasonable detail, prepared and certified as
accurate by the Borrower; and

 
3.            Certain Documents.  Simultaneously with the execution and delivery
of this Amendment, Borrower shall deliver or cause to be delivered, to Bank the
following:
 
(a)  
Substitute Revolving Note in the form attached hereto as Exhibit A-1;

 
(b)  
Substitute Capex Note in the form attached hereto as Exhibit B-1;

 
(c)  
Resolutions of the Board of Directors and/or Shareholders of the Borrower and
Guarantor authorizing the execution of this Amendment and the Loan Documents;

 
 
(d)
Notice of Borrowing.

 
 
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4. 4.         Amendment Consent Fee. At Closing, Borrower shall pay to the Bank
an Amendment Consent Fee of Six Thousand Five Hundred Dollars ($6,500.00).
 
5. 5.         Representations and Warranties.  To induce Bank to enter into this
Amendment, Borrower hereby represents and warrants to Bank that the execution
and delivery of this Amendment and the Loan Documents described in Section 3 to
which Borrower is a party have been duly authorized by all necessary corporate
action on the part of Borrower, and that this Amendment and the Loan Documents
to which Borrower is a party have been duly executed and delivered by Borrower
and constitute legal and binding obligations of Borrower, enforceable against
Borrower in accordance with their terms.
 
6. 6.         Reimbursement of Expenses.  To further induce Bank to enter into
this Amendment, Borrower hereby agrees to pay, at closing, all costs and
expenses reasonably incurred by Bank (including, without limitation, reasonable
attorneys’ fees and disbursements) in connection with the preparation,
negotiation, execution and delivery of this Amendment and the Loan Documents
contemplated hereby, including all reasonable outstanding costs and expenses in
connection to the Loan Agreement or any proposed amendments thereto.
 
7. 7.         Re-adoption.  Borrower hereby remakes and readopts each and every
covenant, representation and warranty set forth in the Loan Agreement and the
other Loan Documents (except for representations which specifically relate to an
earlier date).  Borrower hereby represents and warrants to Bank that no Event of
Default has occurred and is continuing and no Unmatured Event of Default has
occurred and is continuing.
 
8. 8.         No Waiver.  Nothing contained in this Amendment shall be deemed to
constitute or shall be construed as a waiver of any rights, remedies or security
granted to Bank under the Loan Agreement, or any of the other Loan Documents
executed and delivered in connection therewith, or a waiver of or acquiescence
to any Event of Default.
 
9. 9.         No Other Modifications.  Except as expressly set forth herein, all
of the terms, covenants, agreements and conditions set forth in the Loan
Agreement shall remain unmodified and in full force and effect.  To the extent
any of such terms, covenants, agreements or conditions in any of the other Loan
Documents executed and delivered in connection with the Loan Agreement or this
Amendment may contradict or be in conflict with the Loan Agreement, as amended
hereby, such terms, covenants, agreements and conditions are hereby deemed
modified and amended accordingly, effective as of the date hereof, to reflect
the terms and conditions of the Loan Agreement, as amended hereby.
 
10. 10.     Facsimile Counterparts.  This Amendment may be executed by facsimile
in any number of counterparts and by the different parties hereto by facsimile
on separate counterparts and each such counterpart shall be deemed an original,
but all such counterparts shall constitute one and the same document.
 
[The rest of this page is intentionally blank.  The Parties’ signatures appear
on following page]

 
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[Signature Page For Amendment To Loan And Security Agreement]
 
IN WITNESS WHEREOF, the Borrower and the Bank have executed this Amendment to
Loan and Security Agreement as of the date first above written.

 

 
THE WOOD ENERGY GROUP, INC., a Missouri corporation
       
By:
   
Its:
     
Agreed and accepted:
     
FIFTH THIRD BANK,
 
an Ohio banking corporation, successor by
 
merger with Fifth Third Bank,
 
a Michigan banking corporation,
       
By:
   
Its:
   

 
 
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EXHIBIT A-1

 
SUBSTITUTE REVOLVING NOTE
 
$1,000,000.00
Chicago, Illinois
 
May 21, 2010

FOR VALUE RECEIVED, The Wood Energy Group, Inc., a Missouri corporation
(“Maker”), promises to pay to the order of Fifth Third Bank, an Ohio banking
corporation, successor by merger with Fifth Third Bank, a Michigan banking
corporation (“Bank”), at its offices at 222 South Riverside Plaza, 32nd Floor,
Chicago, Illinois 60606 or at such other place as the holder of this Note may
designate in writing to the Maker, on or before July 3, 2011, the principal sum
of One Million and 00/100 Dollars ($1,000,000.00), or, if less, the aggregate
amount of Revolving Loans with respect to the Working Capital Facility advanced
and unpaid pursuant to that certain Loan and Security Agreement dated as of
September 4, 2009, made by and between the Maker and the Bank, as amended by
that certain Amendment to Loan and Security Agreement, dated as of even date
herewith, and as the same may be further amended from time to time (the “Loan
Agreement”), the terms of which are incorporated by reference and made a part of
this Note as though fully set out herein.  Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan Agreement.  The amount advanced and outstanding under the Loan Agreement as
shown on the books and records of the Bank shall be considered correct and
conclusively binding on the Maker absent manifest error.
 
The Maker further promises to pay interest on the Revolving Loans as provided in
the Loan Agreement.  All payments received from the Maker hereunder shall be
applied by the Bank in accordance with the terms of the Loan Agreement.
 
This Note and any renewals and extensions hereof, and any other Obligations of
the undersigned to the Holder hereof (the term “Holder” shall include the Bank
and any subsequent holder hereof) due or to become due, now existing or
hereafter contracted, and howsoever acquired by the Holder, are secured in the
manner described in the Loan Agreement.
 
This Note is issued under the Loan Agreement and this Note and the Holder are
entitled to all of the benefits provided for by the Loan Agreement or referred
to therein, to which Loan Agreement reference is made for a statement
thereof.  Pre-payments may be made hereon only at the times, in the events and
in the manner provided in the Loan Agreement.
 
All unpaid amounts owing on this Note or on any other Obligations immediately
shall become due and payable at the option of the Holder, without notice or
demand, upon the occurrence of any Event of Default.
 
This Note is issued in substitution for and in replacement of, but not in
payment of, that certain Revolving Note, dated September 4, 2009, in the
original principal amount of Five Hundred Thousand Dollars ($500,000.00), issued
by Maker and payable to the order of the Bank.
 
 

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In the event of default in the payment of any sums due under this Note, the
Maker hereby agrees that the Bank may offset all money, bank or other deposits
or credits now or hereafter held by the Bank or owed by the Bank to Maker
against all amounts due under this Note or against any other amounts which may
be due the Bank from the Maker.
 
No clause or provision contained in this Note or any documents related hereto
shall be construed or shall so operate (a) to raise the interest rate set forth
in this Note above the lawful maximum, if any, in effect from time to time in
the applicable jurisdiction for loans to borrowers of the type, in the amount,
for the purposes, and otherwise of the kind contemplated, or (b) to require the
payment or the doing of any act contrary to law, but if any clause or provision
contained herein shall otherwise so operate to invalidate this Note, in whole or
in part, then (i) such clauses or provisions shall be deemed modified to the
extent necessary to be in compliance with the law, or (ii) to the extent not
possible, shall be deemed void as though not contained and the remainder of this
Note and such document shall remain operative and in full force and effect.
 
All makers and any endorsers, guarantors, sureties, accommodation parties and
all other persons liable or to become liable for all or any part of this
indebtedness, jointly and severally waive diligence, presentment, protest and
demand, and also notice of protest, of demand, of nonpayment, of dishonor and of
maturity and also recourse or suretyship defenses generally; and they also
jointly and severally hereby consent to any and all renewals, extensions or
modifications of the terms of this Note, including time for payment, and further
agree that any such renewals, extension or modification of the terms of this
Note or the release or substitution of any security for the indebtedness under
this Note or any other indulgences shall not affect the liability of any of the
parties for the indebtedness evidenced by this Note.  Any such renewals,
extensions or modifications may be made without notice to any of said parties.
 
The Maker shall be liable to the Holder for all reasonable costs and expenses
incurred in connection with collection, whether by suit or otherwise, of any
amount due under this Note, including, without limitation, attorneys’ fees, as
more fully set forth in the Loan Agreement.
 
This Note shall be governed by and construed in accordance with the laws of the
State of Illinois.
 
The Wood Energy Group, Inc.
     
By:
   
Its:
   

 
 

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EXHIBIT B-1
 
SUBSTITUTE CAPEX NOTE
 
$1,000,000.00
Chicago, Illinois
 
May 21, 2010

FOR VALUE RECEIVED, The Wood Energy Group, Inc., a Missouri corporation
(“Maker”), promises to pay to the order of Fifth Third Bank, an Ohio banking
corporation, successor by merger with Fifth Third Bank, a Michigan banking
corporation (“Bank”), at its offices at 222 South Riverside Plaza, 32nd Floor,
Chicago, Illinois 60606 or at such other place as the holder of this Note may
designate in writing to the Maker, on or before September 3, 2010, the principal
sum of One Million and 00/100 Dollars ($1,000,000.00), or, if less, the
aggregate amount of Capex Loans with respect to the Capex Facility advanced and
unpaid pursuant to that certain Loan and Security Agreement dated as of
September 4, 2009, made by and between the Maker and the Bank, as amended by
that certain Amendment to Loan and Security Agreement, dated as of even date
herewith and as the same may be further amended from time to time (the “Loan
Agreement”), the terms of which are incorporated by reference and made a part of
this Note as though fully set out herein.  Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan Agreement.  The amount advanced and outstanding under the Loan Agreement as
shown on the books and records of the Bank shall be considered correct and
conclusively binding on the Maker absent manifest error.
 
The Maker further promises to pay interest on the Capex Loans as provided in the
Loan Agreement.  All payments received from the Maker hereunder shall be applied
by the Bank in accordance with the terms of the Loan Agreement.  Principal
amounts repaid on the Capex Loans may not be borrowed again.
 
This Note and any renewals and extensions hereof, and any other Obligations of
the undersigned to the Holder hereof (the term “Holder” shall include the Bank
and any subsequent holder hereof) due or to become due, now existing or
hereafter contracted, and howsoever acquired by the Holder, are secured in the
manner described in the Loan Agreement.
 
This Note is issued under the Loan Agreement and this Note and the Holder are
entitled to all of the benefits provided for by the Loan Agreement or referred
to therein, to which Loan Agreement reference is made for a statement
thereof.  Pre-payments may be made hereon only at the times, in the events and
in the manner provided in the Loan Agreement.
 
All unpaid amounts owing on this Note or on any other Obligations immediately
shall become due and payable at the option of the Holder, without notice or
demand, upon the occurrence of any Event of Default.
 
This Note is issued in substitution for and in replacement of, but not in
payment of, that certain Capex Note, dated September 4, 2009, in the original
principal amount of One Million Five Hundred Thousand Dollars ($1,500,000.00),
issued by Maker and payable to the order of the Bank.
 
 

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In the event of default in the payment of any sums due under this Note, the
Maker hereby agrees that the Bank may offset all money, bank or other deposits
or credits now or hereafter held by the Bank or owed by the Bank to Maker
against all amounts due under this Note or against any other amounts which may
be due the Bank from the Maker.
 
No clause or provision contained in this Note or any documents related hereto
shall be construed or shall so operate (a) to raise the interest rate set forth
in this Note above the lawful maximum, if any, in effect from time to time in
the applicable jurisdiction for loans to borrowers of the type, in the amount,
for the purposes, and otherwise of the kind contemplated, or (b) to require the
payment or the doing of any act contrary to law, but if any clause or provision
contained herein shall otherwise so operate to invalidate this Note, in whole or
in part, then (i) such clauses or provisions shall be deemed modified to the
extent necessary to be in compliance with the law, or (ii) to the extent not
possible, shall be deemed void as though not contained and the remainder of this
Note and such document shall remain operative and in full force and effect.
 
All makers and any endorsers, guarantors, sureties, accommodation parties and
all other persons liable or to become liable for all or any part of this
indebtedness, jointly and severally waive diligence, presentment, protest and
demand, and also notice of protest, of demand, of nonpayment, of dishonor and of
maturity and also recourse or suretyship defenses generally; and they also
jointly and severally hereby consent to any and all renewals, extensions or
modifications of the terms of this Note, including time for payment, and further
agree that any such renewals, extension or modification of the terms of this
Note or the release or substitution of any security for the indebtedness under
this Note or any other indulgences shall not affect the liability of any of the
parties for the indebtedness evidenced by this Note.  Any such renewals,
extensions or modifications may be made without notice to any of said parties.
 
The Maker shall be liable to the Holder for all reasonable costs and expenses
incurred in connection with collection, whether by suit or otherwise, of any
amount due under this Note, including, without limitation, attorneys’ fees, as
more fully set forth in the Loan Agreement.
 
This Note shall be governed by and construed in accordance with the laws of the
State of Illinois.

 
The Wood Energy Group, Inc.
     
By:
   
Its:
   

 
 

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