Exhibit 10.2

SEVENTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
 
THIS SEVENTH AMENDMENT (the “Amendment”), dated October 23, 2009, is entered
into by and between PURE EARTH, INC., a Delaware corporation (“Pure Earth”) and
all of its wholly owned subsidiaries (collectively, the “Borrower”) and WELLS
FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting through its Wells 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 “Accounts Advance Rate” set forth in Section 1.1
of the Credit Agreement shall be deleted in its entirety and replaced with the
following:
 
“Accounts Advance Rate” means up to seventy-five percent (75%), or such lesser
rate as the Lender in its sole, but reasonable, discretion may deem appropriate
from time to time.
 
2.           The definition of “Adjusted Net Income” set forth in Section 1.1 of
the Credit Agreement shall be deleted in its entirety and replaced with the
following:
 
“Adjusted Net Income” means Net Income (a) plus the amount of any income taxes
accrued and unpaid and deducted in the calculation of Net Income, (b) plus any
loss included in the calculation of Net Income arising from (i) the book loss
associated with the sale or other divestiture of Equipment that is idle,
obsolete, or otherwise not necessary for the current operations of Borrowers’
business, in an aggregate amount per calendar year not to exceed $1,000,000;
(ii) GAAP-required non-cash adjustments to earnings arising from stock options
and warrants, restricted stock awards and other similar items, (iii) goodwill
and intangible asset impairments under GAAP, and (iv) non-cash losses
attributable to any outstanding interest rate swap obligations; (c) less any
gain included in the calculation of Net Income arising from GAAP-required
non-cash adjustments to earnings arising from stock options and warrants,
restricted stock awards and other similar items, (d) less the amount of any
income tax benefit included in the calculation of Net Income, and (e) less
non-cash gains attributable to any outstanding interest rate swap obligations.

 
 

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3.           The definition of “Current Maturities of Long Term Debt” set forth
in Section 1.1 of the Credit Agreement shall be deleted in its entirety and
replaced with the following:
 
  “Current Maturities of Long Term Debt” means, during a period beginning and
ending on designated dates, the amount of Borrower’s long-term debt and
capitalized leases which become due during that period.
 
4.           The definition of “Debt Service Coverage Ratio” set forth in
Section 1.1 of the Credit Agreement shall be deleted in its entirety and
replaced with the following:
 
  “Debt Service Coverage Ratio” means (a) the sum of (i) Funds from Operations
and (ii) Interest Expense divided by (b) the sum of (i) Current Maturities of
Long Term Debt and (ii) Interest Expense.
 
5.           The definition of “Eligible Accounts” set forth in Section 1.1 of
the Credit Agreement shall be deleted in its entirety and replaced with the
following:
 
“Eligible Accounts” means all unpaid Accounts of the Borrower arising from the
sale or lease of goods or the performance of services, net of any credits, but
excluding any such Accounts having any of the following characteristics:
 
 
(i)
That portion of Accounts unpaid more than 90 days or more after the invoice
date, but in no event more than 60 days past due date;

 
 
(ii)
That portion of Accounts related to goods or services with respect to which the
Borrower has received notice of a claim or dispute, which are subject to a claim
of set-off or a contra account (to the extent of such claim of set-off or contra
account), or which reflect a reasonable reserve for warranty claims or returns;

 
 
(iii)
That portion of Accounts not yet earned by the final delivery of goods or
rendition of services, as applicable, by the Borrower to the customer, including
progress billings, and that portion of Accounts for which an invoice has not
been sent to the applicable account debtor;

 
 
(iv)
Accounts constituting (i) proceeds of copyrightable material unless such
copyrightable material shall have been registered with the United States
Copyright Office, or (ii) proceeds of patentable inventions unless such
patentable inventions have been registered with the United States Patent and
Trademark Office;

 
 
(v)
Accounts owed by any unit of government, whether foreign or domestic (provided,
however, that there shall be included in Eligible Accounts that portion of
Accounts owed by such units of government for which the Borrower has provided
evidence satisfactory to the Lender that (A) the Lender has a first priority
perfected security interest and (B) such Accounts may be enforced by the Lender
directly against such unit of government under all applicable laws);

 
 
 

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(vi)
Accounts denominated in any currency other than United States dollars;

 
 
(vii)
Accounts owed by an account debtor located outside the United States which are
not (A) backed by a bank letter of credit naming the Lender as beneficiary or
assigned to the Lender, in the Lender’s possession or control, and with respect
to which a control agreement concerning the letter-of-credit rights is in
effect, and acceptable to the Lender in all respects, in its sole discretion, or
(B) covered by a foreign receivables insurance policy acceptable to the Lender
in its sole discretion;

 
(viii)
Accounts owed by an account debtor that is insolvent, the subject of bankruptcy
proceedings or has gone out of business;

 
 
(ix)
Accounts owed by an Owner, Subsidiary, Affiliate, Officer or employee of the
Borrower;

 
 
(x)
Accounts not subject to a duly perfected security interest in the Lender’s favor
or which are subject to any Lien in favor of any Person other than the Lender;

 
 
(xi)
That portion of Accounts that has been restructured, extended, amended or
modified;

 
 
(xii)
That portion of Accounts that constitutes advertising, finance charges, service
charges or sales or excise taxes;

 
(xiii)
Accounts owed by an account debtor, regardless of whether otherwise eligible, to
the extent that the aggregate balance of such Accounts exceeds ten percent (10%)
of the aggregate amount of all Accounts (with ineligibility under this
subsection limited to such excess), except Account owed by Conti Services to the
to the extent that the aggregate balance of such Accounts owed by Conti Services
exceeds fifteen percent (15%) of the aggregate amount of all Accounts (with
ineligibility under this subsection limited to such excess);

 
(xiv)
Accounts owed to the Borrower by Civetta Cousins, to the extent that the
aggregate balance of such Accounts exceeds $1,000,000 (with ineligibility under
this subsection limited to such excess);

 
 
(xv)
Accounts owed to the Borrower by The Laquila Group;

 
(xvi)
Accounts owed by an account debtor, regardless of whether otherwise eligible, if
twenty-five percent (25%) or more of the total amount of Accounts due from such
debtor is ineligible under clauses (i), (ii), or (x) above; and

 
(xvii)
Accounts, or portions thereof, otherwise deemed ineligible by the Lender in its
sole reasonable discretion.

 
 
 

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6.           The definition of “Funds from Operations” set forth in Section
Section 1.1 of the Credit Agreement shall be deleted in its entirety and
replaced with the following:
 
“Funds from Operations” means for a given period, the sum, without duplication
of (a) Adjusted Net Income, (b) depreciation and amortization, and (c) any
increase (or decrease) in deferred income taxes, (d) any increase (or decrease)
in lifo reserves, and (e) other non-cash items, each as determined for such
period in accordance with GAAP.
 
7.           The definition of “Interest Expense” set forth in Section 1.1 of
the Credit Agreement shall be deleted in its entirety and replaced with the
following:
 
“Interest Expense” means for a fiscal year-to-date period, Borrower’s total
gross interest expense during such period (excluding interest income), and shall
in any event include (a) interest expensed and paid on all Debt, but
specifically excluding dividends (treated as interest under GAAP) paid-in-kind
in connection with Series B Preferred Stock issued in the Fidus Transaction,
(b) the amortization of debt discounts (excluding debt discounts in connection
with the Fidus Transaction), (c) the amortization of all fees payable in
connection with the incurrence of Debt to the extent included in interest
expense (excluding transaction fees paid in connection with the Fidus
Transaction, the Susquehanna Bank Financing and any financing with the Lender),
and (d) the portion of any capitalized lease obligation allocable to interest
expense.
 
8.           The definition of “Maturity Date” set forth in Section 1.1 of the
Credit Agreement shall be deleted in its entirety and replaced with the
following:
 
“Maturity Date” means April 23, 2010.
 
9.           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 $3,300,000 on the date hereof, reducing to $3,150,000 on
December 15, 2009 and reducing to $3,000,000 on February 15, 2010, unless this
amount is reduced pursuant to Section 2.10, in which event it means such lower
amount.
 
10.         The definition of “Unfinanced Capital Expenditures” in Section 1.1
of the Credit Agreement shall be deleted in its entirety and replaced with the
following :
 
“Unfinanced Capital Expenditures” means for a period, any expenditure of money
during such period for the purchase or construction of assets, or for
improvements or additions to such assets, which are not financed with borrowed
funds and are capitalized on Borrower’s balance sheet.
 
11.         Section 6.2 of the Credit Agreement shall deleted in its entirety
and replaced with the following:
 
 
 

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(a)           Minimum Debt Service Coverage Ratio.  Commencing the month ending
January 31, 2010, Borrower shall maintain, as of each month end, a Debt Service
Coverage Ratio of not less than 1.0 to 1.0; provided, however no default shall
be deemed to have occurred hereunder, if it is determined within twenty-five
days after the end of any month that Borrower’s Minimum Debt Service Coverage
Ratio is less than 1.0 to 1.0, and cured within five (5) business days
thereafter by Borrower receiving a cash infusion in the form of equity or
subordinated debt in an amount which, if treated as an “add back” in the
determination of  Adjusted Net Income for the relevant month, would result in
Borrower achieving a Minimum Debt Service Coverage Ratio of not less than 1.0 to
1.0. for such month.
 
(b)           Capital Expenditures.  Borrower will not incur or contract to
incur any Unfinanced Capital Expenditures in excess of $50,000 from November 1,
2009 through and including the Maturity Date.
 
(c)           Account Aging Limits.  Commencing November 30, 2009, Accounts
older than ninety (90) days past invoice date shall not exceed the greater of
thirteen percent (13%) of all Accounts or $1,250,000.
 
12.         No Cash Dividends.  Borrower will not declare or pay any dividends
(other than dividends payable solely in stock of Borrower) on any class of its
stock, or make any payment on account of the purchase, redemption or other
retirement of any shares of such stock, or other securities or evidence of its
indebtedness or make any distribution in respect thereof, either directly or
indirectly.
 
13.         LIBOR Advances.  LIBOR Advances shall not be available at any time.
 
14.         Supplemental Reports.  Copies of all invoices and credit memos along
with detailed supporting materials shall be included in the supplemental reports
required under Section 6.1(e) of the Credit Agreement.
 
15.         Equity Investment.  On or before November 30, 2009, Borrower shall
raise new equity or subordinated debt in the Borrower of no less than $800,000,
on terms acceptable to the Lender.  On or before February 15, 2010, Borrower
shall raise additional new equity or subordinated debt in the Borrower of no
less than $1,000,000, on terms acceptable to the Lender.
 
16.         Retention of Consultant.  Borrower shall retain a consultant,
reasonably acceptable to the Lender, to review the Borrower’s business strategy
and projections.  The consultant shall provide a report of its findings to the
Borrower and the Lender on or before January 15, 2010.
 
17.         Laquilla Group Inc.  Borrower shall notify Laquilla Group, Inc. that
it must remit to the Lockbox all payments due Borrower under the May 29, 2009
Settlement Agreement among 775 Columbus, LLC, Laquilla Group, Inc., Chetrit
Group, LLC and Borrower.
 
18.         Amendment Fee. The Borrower shall pay the Lender a fully earned, as
of the date hereof, non-refundable fee in the amount of $75,000 in consideration
of the Lender’s execution and delivery of this Amendment, payable $37,500 on
November 30, 2009 and $37,500 on February 15, 2010.
 
 
 

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19.         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.
 
20.         Conditions Precedent. This Amendment shall be effective when the
Lender shall have received an executed original hereof, together with each of
the following, each in substance and form acceptable to the Lender in its sole
discretion:
 
a.           A Certificate of the Secretary of Pure Earth (i) certifying as to
the resolutions of the board of directors of Pure Earth approving the execution
and delivery of this Amendment, copies of which will be attached to such
Certificate; (ii) certifying that the articles of incorporation or certificates
of formation or other organizational documents of Pure Earth and each of the
other Borrowers have not been amended or otherwise modified since March 12,
2009, or if they have been amended or otherwise modified, attaching a copy of
such amended and or modified organizational documents to such Certificate;
(iii) certifying that the bylaws or operating agreements, if any, of Pure Earth
and each of the other Borrowers have not been amended or otherwise modified
since March 12, 2009, or if they have been amended or otherwise modified,
attaching a copy of such amended and or modified bylaws or operating agreements
to such Certificate; and (iv) certifying that the officers of Pure Earth and
each other Borrower set forth on a schedule to such Certificate have the due
authority to sign and act on behalf of Pure Earth and each such other Borrower
in connection with the execution and delivery of this Amendment and all other
documents, agreements and certificates on behalf of Pure Earth and each such
other Borrower.
 
b.           The Liquidation Support Agreement of Brent Kopenhaver, in the form
attached hereto as Exhibit A.
 
21.         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.

 
 

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(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.

22.         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.

23.         No Waiver. 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.

24.         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.

25.         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.

26.         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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WELLS FARGO BANK,
 
PURE EARTH, INC.
NATIONAL ASSOCIATION
               
By:
/s/  John Erwin
 
By:
/s/   Brent Kopenhaver
 
John Erwin
   
Brent Kopenhaver
 
Its Vice President
   
Its Executive Vice President and Chief
Financial Officer
         
GEO METHODS, LLC
 
PURE EARTH ENERGY RESOURCES, INC.
         
By:
/s/  Brent Kopenhaver
 
By:
/s/   Brent Kopenhaver
 
Brent Kopenhaver
   
Brent Kopenhaver
 
Its Treasurer
   
Its Treasurer
          PURE EARTH TREATMENT (NJ), INC.  
NEW NYCON, INC.
         
By: :
/s/  Brent Kopenhaver
 
By: :
/s/   Brent Kopenhaver
 
Brent Kopenhaver
   
Brent Kopenhaver
 
Its Treasurer
   
Its Treasurer
         
REZULTZ, INCORPORATED
 
PURE EARTH RECYCLING (NJ), INC.
         
By:
/s/  Brent Kopenhaver
 
By:
/s   Brent Kopenhaver
 
Brent Kopenhaver
   
Brent Kopenhaver
 
Its Treasurer
   
Its Treasurer

 
 

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BIO METHODS, LLC.
 
PURE EARTH ENVIRONMENTAL, INC.
By:
/s/   Brent Kopenhaver
 
By:
/s/   Brent Kopenhaver
 
Brent Kopenhaver
   
Brent Kopenhaver
 
Its Treasurer
   
Its Treasurer
         
HFH ACQUISITION CORP.
 
JUDA CONSTRUCTION, LTD
         
By:
/s/   Brent Kopenhaver
 
By:
/s/   Brent Kopenhaver
 
Brent Kopenhaver
   
Brent Kopenhaver
 
Its Treasurer
   
Its Treasurer
PURE EARTH TRANSPORTATION AND DISPOSAL, INC.
 
PURE EARTH MATERIALS, INC.
         
By:
/s/   Brent Kopenhaver
 
By:
/s/  Brent Kopenhaver
 
Brent Kopenhaver
   
Brent Kopenhaver
 
Its Treasurer
   
Its Treasurer
          PURE EARTH MATERIALS, (NJ) INC.   PEI DISPOSAL GROUP, INC.          
By:
/s/   Brent Kopenhaver
 
By:
/s/  Brent Kopenhaver
 
Brent Kopenhaver
   
Brent Kopenhaver
 
Its Treasurer
   
Its Treasurer

ECHO LAKE BROWNFIELD, LLC.
       
By:
/s/ Brent Kopenhaver
   
Brent Kopenhaver
   
Its Treasurer
 

 
 

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