Exhibit 10.8.1
SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
     THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT is made and
entered into as of July 31, 2007 (“Agreement”) 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”), (Parent, Project, Enviro-Tech and PDG collectively, the
“Initial Borrowers”), Flagship Restoration, Inc., a Delaware corporation
(“Flagship”), and Servestec, Inc., a Florida corporation (Initial Borrowers,
Flagship and Servestec, collectively, the “Borrowers”) and Sky Bank, an Ohio
banking institution having an office at 1 East State Street, Sharon,
Pennsylvania 16146 (“Bank”).
     WHEREAS, the Bank has provided certain loans to Borrowers pursuant to the
terms of a an Amended and Restated Credit Agreement dated as of June 9, 2006 and
a Waiver and First Amendment to Amended and Restated Loan Agreement dated as of
May 15, 2007, between the Borrowers and the Bank (together with all prior and
future amendments, extensions, modifications and restatements thereof, the
“Credit Agreement”); and
     WHEREAS, the loans made in accordance with the Credit Agreement (“Loans”)
are evidenced by (i) the Facility A Note in the principal amount of $400,000,
(ii) the Facility D Note in the maximum aggregate amount of $15,000,000, and
(iii) the Facility F Loans in the principal amount of $400,000 executed by
Borrowers in favor of the Bank; and
     WHEREAS, the indebtedness and obligations evidenced by the Notes are
secured by, among other things, Borrowers’ inventory, accounts, accounts
receivable, the proceeds and products of the foregoing, and all other property
identified in the Security Agreements executed by Borrowers in favor of the Bank
(together with all prior and future amendments, extensions, modifications and
restatements thereof, collectively the “Security Agreements”); and
     WHEREAS, the Credit Agreement, the Notes, the Security Agreements, and this
Agreement, and any and all other documents, agreements, and instruments entered
into in connection with any of the foregoing are collectively referred to as the
“Loan Documents”; and
     WHEREAS, the Borrowers have requested the Bank to amend certain provisions
of the Loan Documents; and
     WHEREAS, the Bank is willing to amend certain provisions of the Loan
Documents subject to the terms and conditions set forth in this Agreement; and
     NOW THEREFORE, the parties hereto for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, covenant and agree as follows:

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1. Affirmation of Recitals. The recitals set forth above are true and correct
and incorporated herein by reference.
2. Definitions. All capitalized terms used herein, but not otherwise defined,
shall have the meaning ascribed to such terms in the Loan Documents.
3. Amendments to Credit Agreement. Effective from and after the date hereof, the
Credit Agreement is hereby amended as follows:
          (a) The defined term “Facility D Expiry Date” shall mean June 6, 2009.
          (b) The following language shall be inserted into the Credit Agreement
as Section 2.14 thereof:
“Section 2.14 Interest Rate Incentive Pricing. If, based on the 10-Q filed with
the Securities and Exchange Commission, the Debt to Worth Ratio at the end of
each fiscal quarter is equal to or less than 2.0, then, during the subsequent
fiscal quarter (and only the subsequent fiscal quarter unless the foregoing
condition is satisfied again), interest on the Facility D Loans shall be reduced
to an annual rate equal to the Prime Rate.”
          (c) The last paragraph of Section 5.01(a) Reporting and Information
Requirements is hereby amended and restated as follows:
“In addition to the annual reports required as set forth above, Borrower shall
be required to furnish Bank with, within thirty (30) days of the end of each
month, monthly statements of income and retained earnings (setting forth in
comparative form actual performance versus budgeted figures, including an
explanation for any significant variances between such figures) and cash flow
and balance sheets, all in reasonable detail. Borrower shall also be required to
furnish Bank with, within thirty (30) days after the end of each quarter, an
officer’s certificate as more particularly described in Section 5.01 (c) below,
stating that no Event of Default or Potential Default exists and that Borrower
is in compliance with the financial covenants set forth in Sections 5.13, 5.14,
5.15 and 5.20. Borrower shall also be required to furnish Bank with, within
thirty (30) days of the end of each month, monthly back-log reports and monthly
job status reports, including an explanation of any significant variances.
Borrower shall be required to furnish Bank with, within five (5) days of such
filings, a copy of all of its public filings and disclosures, including its 10K
statements, 10Q statements, and interim statements.”
          (d) Section 5.14 Debt to Worth Ratio is hereby amended and restated in
its entirety to read as follows:

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“Borrowers shall maintain a Debt to Worth Ratio of not greater than 2.75 to 1.0
on April 30, 2007; 2.50 to 1.0 on July 31, 2007; 2.25 to 1.0 on October 31, 2007
and at the end of each fiscal quarter thereafter. This Ratio shall be tested at
the end of each fiscal quarter.”
          (e) The last sentence of Section 5.01(f) Visitation; Audits shall be
amended and restated as follows:
“Borrower and Bank acknowledge that a field audit on the Borrowing Base will be
performed by Sisterson (or another auditor acceptable to Bank in its sole
discretion) on an annual basis, or more frequently if so requested by Bank.
4. Collateral. The Obligations shall continue to be secured by a first priority
security interest in and lien upon all of the Borrowers’ inventory, accounts,
accounts receivable, and the proceeds and products thereof, and all of the other
property that may be identified in the Security Agreement and the Mortgage.
5. Conditions to this Agreement. The obligation of the Bank to enter into this
Agreement and to continue to make any loan or advance under the Credit Agreement
is subject to the satisfaction of the following further conditions:
     (a) This Agreement shall have been executed by the Borrower and delivered
to the Bank by 5:00 p.m. (Pittsburgh, PA time) on August 2, 2007;
     (b) Corporate resolutions and other certifications by or on behalf of the
Borrowers, in form and substance required by the Bank in its sole and absolute
discretion and such resolutions and certifications shall have been delivered to
the Bank by 5:00 p.m. (Pittsburgh, PA time) on August 2, 2007;
     (c) Each of the Borrowers shall bring down, as of the date hereof, each of
the representations and warranties contained in this Agreement and the Credit
Agreement, respectively; and
     (d) The Borrowers shall pay to the Bank all fees provided for in Section 11
hereof by August 2, 2007.
6. Acknowledgment of No Claims. Each of the Borrowers acknowledges and agrees
that it (a) has no claims, counterclaims, setoffs, actions or causes of action
of any kind or nature whatsoever against the Bank or any of its directors,
officers, employees, agents, attorneys, legal representatives, successor or
assigns, that directly or indirectly arise out of or are based upon or in any
manner connected with any Prior Related Event, (b) certifies that there is no
impairment of the validity or enforceability of this Agreement or any of the
Loan Documents to which it is a party, and (c) hereby waives and releases the
same. As used herein the term “Prior Related Event” means any transaction,
event, circumstance, action, failure to act or occurrence of any sort or type,
whether known or unknown, which occurred, existed, was taken, was permitted or

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begun prior to the execution of this Agreement and occurred, existed, was taken,
was permitted or begun in accordance with, pursuant to or by virtue of any of
the terms of this Agreement or any of the Loan Documents (or prior iterations
thereof), or which was related or connected in any manner, directly or
indirectly, to the loans made or secured pursuant thereto or evidenced thereby.
7. No Bankruptcy Intent. Each of the Borrowers represents and warrants that it
has no present intent (i) to file any voluntary petition under any chapter of
the Bankruptcy Code, title 11 U.S.C., or in any manner seek relief, protection,
reorganization, liquidation or dissolution, or similar relief for borrowers
under any other state, local, federal or other insolvency laws, either at the
present time, or at any time hereafter, or (ii) directly or indirectly to cause
any involuntary petition to be filed against any Borrower, or directly or
indirectly to cause any Borrower to become the subject of any proceedings
pursuant to any other state, federal or other insolvency law providing for the
relief of borrowers, either at the present time, or at any time hereafter, or
(iii) directly or indirectly to cause any interest of any Borrower to become the
property of any bankrupt estate or the subject of any state, federal or other
bankruptcy, dissolution, liquidation or insolvency proceedings.
8. No Fraudulent Intent. Neither the execution and delivery of this Agreement,
nor the performance of any actions required hereunder or described herein is
being consummated by any Borrower with or as a result of any actual intent by
such Borrower to hinder, delay or defraud any entity to which such Borrower is
not or will hereafter become indebted.
9. Extension Fee; Reimbursement of Expenses.
     On the date hereof, Borrowers shall pay Bank an extension fee of Thirty
Thousand 00/100 Dollars ($30,000.00). In addition, the Borrowers, jointly and
severally, agree to pay or cause to be paid and save the Bank harmless against
liability for the payment of all out-of-pocket expenses incurred by the Bank,
including without limitation, appraisals, environmental consultants, accountants
and other professional experts or independent contractor fees, costs and
expenses and fees and expenses of legal counsel (including inside counsel)
(a) arising in connection with the development, preparation, printing,
execution, administration, interpretation and performance of this Agreement and
any of the Loan Documents, (b) relating to any requested amendments, waivers or
consents pursuant to the provisions hereof or thereof whether or not such are
implemented, and (c) arising in connection with the enforcement of this
Agreement or any Loan Documents, including the proof and allowability of any
claim arising thereunder, whether in bankruptcy or receivership proceedings or
otherwise and monitoring and otherwise participating in any bankruptcy,
receivership or similar proceeding involving or affecting the Borrower or any
other person or entity which may have any liability for any of the obligations
of the Borrower under this Agreement and the Loan Documents.
10. Notices. Any notice or other written communication required hereunder shall
be in writing and shall be deemed to have been validly delivered (a) upon
deposit in the United States mail, with proper postage prepaid, (b) by hand
delivery, or (c) by overnight express mail courier, and addressed to the party
to be notified at the following address or to such other address as each party
may designate for himself or herself in writing by like notice:

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          To the Borrowers or any of them:   To the Bank:
 
        PDG Environmental, Inc.   Sky Bank 1386 Beulah Road, Building 801  
Commercial Loan Department Pittsburgh, PA 15235   1 East State Street Attention:
John C. Regan   Sharon, PA 16146
 
  Attention:   Douglas K. Pyle
with a copy to
      Vice President
 
        James D. Chiafullo, Esq.   with a copy to:
Cohen & Grigsby, P.C.
        11 Stanwix Street   Suzanne Ewing, Esq. Pittsburgh, PA 15222   Buchanan
Ingersoll & Rooney     20th Floor, One Oxford Centre     Pittsburgh, PA 15219

11. Due Authority; Valid and Binding. Each of the Borrowers represents that its
execution and delivery of this Agreement and the carrying out of this Agreement
and the Loan Documents to which it is a party, as amended hereby, will not
violate any provisions of the law, its articles of incorporation or bylaws, or
of any agreement or other instrument to which the it is a party or by which it
is bound or to which it is subject. Each of the Borrowers further represent that
this Agreement has been duly authorized by all necessary action and this
Agreement and the Loan Documents to which it is a party, as amended, constitute
legal, valid and binding obligations of such party, enforceable in accordance
with the terms hereof.
12. Entire Agreement; Governing Law. This Agreement sets forth the entire
agreement relating to the subject matter hereof and supersedes all prior
statements, agreements and understandings, whether written or oral, relating
thereto. None of the provisions hereof may be waived, changed or terminated,
except by a writing signed by the parties hereto. This Agreement and the
respective rights and obligations created hereby shall be interpreted in
accordance with and governed by the laws of the Commonwealth of Pennsylvania
applicable to contracts made and to be wholly performed within such
Commonwealth. The paragraph titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement to the parties hereto.
13. Jurisdiction and Venue. The parties hereto agree that the United States
District Court for the Western District of Pennsylvania and the Court of Common
Pleas of Allegheny County, Pennsylvania, may have jurisdiction to hear and
determine any claims or disputes as to matters pertaining to this Agreement or
any matter arising therefrom. The parties hereto hereby expressly submit and
consent in advance to such jurisdiction and venue in any proceeding commenced
against the parties in either of such courts. Notwithstanding the foregoing, the
parties hereto reserve to themselves the right to assert federal court
jurisdiction based upon diversity of citizenship or any other basis upon which
such federal jurisdiction may be properly claimed and asserted and, to such end,
reserve to themselves the right to remove any action commenced in the Court of
Common Pleas of Allegheny County, Pennsylvania, to the United

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States District Court for the Western District of Pennsylvania if such removal
be authorized by law.
14. WAIVER OF JURY TRIAL. THE PARTIES HERETO EACH WAIVE THEIR RIGHT TO TRIAL BY
JURY IN ANY CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT.
15. ACKNOWLEDGMENT OF DISCLOSURE AND WAIVER OF CONFESSION OF JUDGMENT RIGHTS.
(a) EACH OF THE BORROWERS HEREBY ACKNOWLEDGES AND AGREES THAT THE NOTE CONTAINS
PROVISIONS UNDER WHICH THE BANK MAY ENTER JUDGMENT BY CONFESSION AGAINST THE
BORROWERS. EACH OF THE BORROWERS BEING FULLY AWARE OF ITS RIGHTS TO PRIOR NOTICE
AND A HEARING ON THE VALIDITY OF ANY JUDGMENT OR OTHER CLAIMS THAT MAY BE
ASSERTED AGAINST IT BY THE BANK HEREUNDER BEFORE JUDGMENT IS ENTERED, IT HEREBY
FREELY AND KNOWINGLY WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO
THE BANK ENTERING JUDGMENT AGAINST IT BY CONFESSION PURSUANT TO THE TERMS
THEREOF.
     (b) EACH OF THE BORROWERS ALSO ACKNOWLEDGES AND AGREES THAT THE NOTE
CONTAINS PROVISIONS UNDER WHICH THE BANK, TO THE EXTENT PERMITTED BY APPLICABLE
LAW MAY, AFTER ENTRY OF JUDGMENT AND WITHOUT EITHER NOTICE OR A HEARING, ATTACH,
LEVY OR OTHERWISE SEIZE PROPERTY OF THE BORROWERS IN FULL OR PARTIAL PAYMENT OF
THE JUDGMENT, BEING FULLY AWARE OF ITS RIGHTS AFTER JUDGMENT IS ENTERED
(INCLUDING, WITHOUT LIMITATION, THE RIGHT TO MOVE TO OPEN OR STRIKE THE
JUDGMENT), EACH OF THE BORROWERS HEREBY FREELY, KNOWINGLY AND INTELLIGENTLY
WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO THE BANK’S TAKING SUCH
ACTIONS AS MAY BE PERMITTED UNDER APPLICABLE STATE AND FEDERAL LAW WITHOUT PRIOR
NOTICE TO IT.
16. Time is of the Essence. Time shall be of the strictest essence in the
performance of each and every one of the Borrowers’ obligations hereunder
including, without limitation, the obligations to make payments to the Bank, to
furnish information to the Bank and to comply with all reporting information.
17. No Waiver of Rights under the Loan Documents. The Bank expressly reserves
any and all rights and remedies available to it under this Agreement, the Loan
Documents, any other agreement or at law or in equity or otherwise. No failure
to exercise, or delay by the Bank in exercising any right, power or privilege
hereunder or under any of the Loan Documents shall preclude any other or further
exercise thereof, or the exercise of any other right, power or privilege. The
rights and remedies provided in this Agreement and the Loan Documents are
cumulative and not exhaustive of each other or of any right or remedy provided
by law or equity or otherwise. No notice to or demand upon any Borrower in any
instance shall, in itself, entitle

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any Borrower to constitute a waiver of any right of the Bank to take any other
or further action in any circumstance without notice or demand.
18. No Commitment. This Agreement is not intended as a commitment by the Bank to
modify the Loan Documents in any respect or otherwise, except to the extent
expressly set forth herein, and the Bank hereby specifically confirms that it
makes no such commitment and specifically advises that no action should be taken
by any Borrower based upon any understanding that such a commitment exists or on
any expectation that any such commitment will be made in the future.
19. No Third Party Beneficiaries. This Agreement is made for the sole benefit
and protection of the Bank and the Borrowers and their respective successors and
permitted assigns. By execution of this Agreement, the Bank does not intend to
assume and is not hereby assuming any obligation to any third party. No third
party shall be or shall be deemed a beneficiary of this Agreement.
20. Marshalling; Payments Set Aside. The Bank shall not be under any obligation
to marshall any assets in favor of any Borrower or any other person or against
or in payment of any or all of the Obligations. To the extent that a payment or
payments are made to the Bank or the Bank enforces any of its liens, and such
payment or payments or the proceeds of such enforcement or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Borrowers, or any of them, a trustee, receiver or any other
person under any law including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of any such
restoration, the obligation or part thereof and any lien relating thereto
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement had not
occurred.
21. Voluntary Agreement. Each of the Borrowers represents and warrants that it
is represented by legal counsel of its choice and that it has consulted with
counsel regarding this Agreement, that it is fully aware of the terms contained
herein and that it has voluntarily and without coercion or duress of any kind
entered into this Agreement.
22. Severability. In case any one or more of the provisions of this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby, and such invalid, illegal or
unenforceable provision shall be deemed modified to the extent necessary to
render it valid while most nearly preserving its original intent.
23. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
24. Binding Agreement. This Agreement shall be binding upon and shall inure to
the benefit of the Borrowers and the Bank and their respective heirs, successors
and assigns; provided, however, that the Borrowers may not assign any of their
rights or duties hereunder without the prior written consent of the Bank.

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[SIGNATURES APPEAR ON THE NEXT PAGE.]

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     WITNESS the due execution hereof with the intent to be legally bound.

              ATTEST:   PDG ENVIRONMENTAL, INC.
 
           
By:
      By:   /s/ John C. Regan
 
           
 
            ATTEST:   PROJECT DEVELOPMENT GROUP, INC.
 
           
By:
      By:   /s/ John C. Regan
 
           
 
            ATTEST:   ENVIRO-TECH ABATEMENT SERVICES, CO.
 
           
By:
      By:   /s/ John C. Regan
 
           
 
            ATTEST:   PDG, INC.
 
           
By:
      By:   /s/ John C. Regan
 
           
 
            ATTEST:   FLAGSHIP RESTORATION, INC.
 
           
By:
      By:   /s/ John C. Regan
 
           

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            ATTEST:   SERVESTEC, INC.
 
           
By:
      By:    
 
           
 
            ATTEST:   SKY BANK
 
           
By:
      By:   /s/ Douglas K. Pyle
 
           
 
          Douglas K. Pyle, Vice President

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