Document:

Filed by Bowne Pure Compliance

EXHIBIT
10.7.1

FINAL

FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT

THIS FIRST AMENDMENT (the “Amendment”), dated December 29, 2006, is entered into by and
between PURE EARTH, INC., a Delaware corporation (“Pure Earth”) and its wholly owned subsidiaries,
SOUTH JERSEY DEVELOPMENT, INC., a Pennsylvania corporation (“South Jersey”), AMERICAN
TRANSPORTATION & DISPOSAL SYSTEMS, LTD., a Delaware corporation (“American”), and JUDA
CONSTRUCTION, LTD., a New York corporation (“Juda”), (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 these
recitals have the meanings given to them in the Credit Agreement unless otherwise specified.

The Borrower has requested that certain amendments be made to the Credit Agreement, which the
Lender is willing to make pursuant to the terms and conditions set forth herein.

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 “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 90 days or more after the invoice 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);

(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;

 

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(xiii) Accounts owed by an account debtor, regardless of whether otherwise eligible, to
the extent that the aggregate balance of such Accounts exceeds 25% of the
aggregate amount of all Accounts (with ineligibility under this subsection limited to
such excess), except:

(1) Accounts owed to the Borrower by Civetta Cousins, to the extent that the aggregate
balance of such Accounts exceeds 35% of the aggregate amount of all Accounts (with
ineligibility under this subsection limited to such excess);

(2) Until the earlier of (A) December 1, 2007, or (B) termination of payment bond 8204
40 51 issued by Federal Insurance Company, or (C) completion of work by the Borrower for The
Laquila Group on the Rego Park Mall, Accounts owed to the Borrower by The Laquila Group with
respect to the Rego Park Mall, to the extent that the aggregate balance of such Accounts
exceeds the lesser of 50% of the aggregate amount of all Accounts or $2,500,000 (with
ineligibility under this subsection limited to such excess). All other Accounts owed to the
Borrower by The Laquila Group shall be deemed ineligible to the extent that the aggregate
balance of such Accounts exceeds 25% of the aggregate amount of all Accounts or are
otherwise ineligible;

(xiv) 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

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

2. Section 6.2(b) of the Credit Agreement shall be amended as follows:

“(b) Capital Expenditures. The Borrower will not incur or contract to incur unfinanced
Capital Expenditures of more than $725,000 for the fiscal year ending December 31, 2006 and
$300,000 in the aggregate during any subsequent fiscal year.”

3. Section 6.6 of the Credit Agreement shall be amended to add subsection (e) as follows:

“(e) The Administrative Borrower may advance up to $300,000, in the aggregate, during each
calendar year, to its subsidiaries Terrasyn Environmental Corp., Environmental Venture Partners
LLC, Bio Methods, LLC and Geo Methods, LLC. So long as no Default exists, any funds transferred to
the Lender from Terrasyn Environmental Corp., Environmental Venture Partners LLC, Bio Methods, LLC
and Geo Methods, LLC may be re-advanced to those entities by the Administrative Borrower and will
not be used in calculating the foregoing $300,000 annual intercompany advance.”

 

-3-

 

4.  Consent to Acquisition. The Lender consents to the Borrower’s acquisition of
Terrasyn Environmental Corp., Environmental Venture Partners LLC, Bio Methods, LLC and Geo Methods,
LLC (collectively, the “Acquired Entities”) on the following conditions:

(a) The Lender shall have a first perfected lien upon and security interest in all assets of
the Acquired Entities evidenced by a security agreement acceptable to the Lender; and

(b) The Acquired Entities shall guarantee the Indebtedness, unconditionally, evidenced by a
guarantee acceptable to the Lender.

5. Exhibit B of the Credit Agreement shall be deleted and replaced with Exhibit B attached
hereto.

6. Exhibit C of the Credit Agreement shall be amended to include the following:

“Leased Properties

36 Sheffield Street, Waterbury, Connecticut (initial term ends 2/28/09 with two (2) five year
renewal options)”

7. Schedule 5.1 of the Credit Agreement shall be deleted in its entirety and replaced with
Schedule 5.1 attached hereto.

8. Schedule 5.5 of the Credit Agreement shall be amended to reflect the addition of the
following subsidiaries:

“Terrasyn Environmental Corp. (100% owned subsidiary of Pure Earth, Inc.)

Environmental Venture Partners LLC (100% owned subsidiary of Pure Earth, Inc.)

Bio Methods, LLC (100% owned subsidiary of Pure Earth, Inc.)

Geo Methods, LLC (100% owned subsidiary of Pure Earth, Inc.)”

9. Schedule 6.4 of the Credit Agreement shall be deleted in its entirety and replaced with
Schedule 6.4 attached hereto

10. 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.

11. Amendment Fee. On November 30, 2006, Borrower paid to the Lender a fully earned,
non-refundable fee in the amount of $7,500 in consideration of the Lender’s execution and delivery
of this Amendment.

 

-4-

 

12. 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 the Borrower certifying as to (i) the resolutions of the
board of directors of the Borrower approving the execution and delivery of this Amendment, (ii) the
fact that the articles of incorporation and bylaws of the Borrower, which were certified and
delivered to the Lender pursuant to the Certificate of Authority of the Borrower’s secretary or
assistant secretary dated October 24, 2006 continue in full force and effect and have not been
amended or otherwise modified except as set forth in the Certificate to be delivered, and
(iii) certifying that the officers and agents of the Borrower who have been certified to the
Lender, pursuant to the Certificate of Authority of the Borrower’s secretary or assistant secretary
dated October 24, 2006, as being authorized to sign and to act on behalf of the Borrower continue
to be so authorized or setting forth the sample signatures of each of the officers and agents of
the Borrower authorized to execute and deliver this Amendment and all other documents, agreements
and certificates on behalf of the Borrower.

(b) Payment of the fee described in Paragraph 7.

(c) Such other matters as the Lender may require.

13. 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.

 

-5-

 

14. 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.

15. 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.

16. 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.

17. 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 and the fee required under Paragraph 7
of this Amendment.

18. 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.

 

-6-

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the
date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	WELLS FARGO BANK,	 	 	 	 	 	 	 	 
	NATIONAL ASSOCIATION	 	 	 	PURE EARTH, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Alan I. Cohen
 

Alan I. Cohen
	 	 
	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 
	 

	 	Its Vice President, Relationship Manager
	 	 	 	 	 	Its Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	JUDA CONSTRUCTION, LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 
	 

	 	 	 	 	 	 	 	Its Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	AMERICAN TRANSPORTATION &	 	 
	 	 	 	 	 	 	DISPOSAL SYSTEMS, LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 
	 

	 	 	 	 	 	 	 	Its Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SOUTH JERSEY DEVELOPMENT, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 
	 

	 	 	 	 	 	 	 	Its Treasurer	 	 

 

-7-

 

Exhibit B to Credit and Security Agreement

COMPLIANCE CERTIFICATE

	 	 	 
	1.
	 	To: Wells Fargo Bank, National Association
	Date:

	 	[                                        , 200                    ]
	Subject:

	 	Financial Statements

In accordance with our Credit and Security Agreement dated as
of [                    ]
(as amended
from time to time, the “Credit Agreement”), attached are the financial statements of PURE EARTH,
INC., a Delaware corporation and its subsidiaries, SOUTH JERSEY DEVELOPMENT, INC., a Pennsylvania
corporation, AMERICAN TRANSPORTATION & DISPOSAL SYSTEMS, LTD., a Delaware corporation, and JUDA
CONSTRUCTION, LTD., a New York corporation (collectively, the “Borrower”) as of and for
                    ,
200_____ 

(the “Reporting Date”) and the year-to-date period then ended (the
“Current Financials”). All terms used in this certificate have the meanings given in the Credit
Agreement.

I certify that the Current Financials have been prepared in accordance with GAAP, subject to
year-end audit adjustments, and fairly present the Borrower’s financial condition as of the date
thereof.

I further hereby certify as follows: Events of Default. (Check one):

	 	•	 	o The undersigned does not have knowledge of the occurrence of a Default or Event of
Default under the Credit Agreement except as previously reported in writing to the
Lender.
	 
	 	•	 	o The undersigned has knowledge of the occurrence of a Default or Event of Default
under the Credit Agreement not previously reported in writing to the Lender and
attached hereto is a statement of the facts with respect to thereto. The Borrower
acknowledges that pursuant to Section 2.6(d) of the Credit Agreement, the Lender may
impose the Default Rate at any time during the resulting Default Period.
	 
	 	•	 	Material Adverse Change in Litigation Matters of the Borrower. I further
hereby certify as follows (check one):

	 	•	 	o The undersigned has no knowledge of any material adverse change to the litigation
exposure of the Borrower or any of its Affiliates.
	 
	 	•	 	o The undersigned has knowledge of material adverse changes to the litigation exposure
of the Borrower or any of its Affiliates not previously
disclosed in Schedule 5.7. Attached to this Certificate is a statement of the facts
with respect thereto.

 

 

 

Financial Covenants. I further hereby certify as follows (check and complete each of
the following):

1. Minimum Tangible Net Worth. Pursuant to Section 6.2(a) of the Credit Agreement, as of the
Reporting Date, the Borrower’s Tangible Net Worth was $                    , which o satisfies o does not
satisfy the requirement that such amount be not less than $2,500,000 on the Reporting Date.

2. Capital Expenditures. Pursuant to Section 6.2(b) of the Credit Agreement, for the
year-to-date period ending on the Reporting Date, the Borrower has expended or contracted to expend
during the year ended [                    ,
200_____,_] for unfinanced Capital Expenditures,
$                                         in the aggregate, which o satisfies o does not satisfy the requirement that such
unfinanced expenditures not exceed $725,000 in the aggregate during the fiscal year ending December
31, 2006 and $300,000 in the aggregate during any subsequent fiscal year.

3. Salaries. As of the Reporting Date, the Borrower has not paid excessive or unreasonable
salaries, bonuses, commissions, consultant fees or other compensation, and as a consequence o is o
 is not in compliance with Section 6.8 of the Credit Agreement.

4. Advances to Affiliates. As of the Reporting Date, outstanding advances to Terrasyn
Environmental Corp. and Environmental Venture Partners LLC (the “Acquired Entities”) o do o do not
$300,000 may be owed by Terrasyn Environmental Corp. and Environmental Venture Partners LLC to the
Administrative Borrower at any time. For the year-to-date period ended                      
 _____, 200_____,
the Administrative Borrower has advanced to the Acquired Entities $                     in the aggregate and
has received $                     in the aggregate from the Acquired Entities.

Attached hereto are all relevant facts in reasonable detail to evidence, and the computations
of the financial covenants referred to above. These computations were made in accordance with
GAAP.

	 	 	 	 	 	 	 
	 	 	PURE EARTH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Its Chief Financial Officer
	 	 

 

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Schedule 5.1 to Credit and Security Agreement

TRADE NAMES, CHIEF EXECUTIVE OFFICE, PRINCIPAL PLACE OF 

BUSINESS,

AND LOCATIONS OF COLLATERAL

TRADE NAMES

	 	•	 	Pure Earth, Inc. was formerly known as Info Investors, Inc. Its name was changed on
January 17, 2006.
	 
	 	•	 	South Jersey Development, Inc. has operated only under its corporate name since
inception.
	 
	 	•	 	Juda Construction, Ltd. has operated only under its corporate name since inception.
	 
	 	•	 	American Transportation & Disposal Systems, Ltd. has operated only under its corporate
name since inception. It did, however, change its name to Pure Earth of New York, Inc. on
April 24, 2006, and changed it back to American Transportation & Disposal Systems, Ltd. on
September 1, 2006.
	 
	 	•	 	None of the borrowers has otherwise operated under any other trade name.

CHIEF EXECUTIVE OFFICE/PRINCIPAL PLACE OF BUSINESS

Pure Earth, Inc. Chief Executive Office and Principal Place of Business:

One Neshaminy Interplex, Suite 201

Trevose, PA 19053

South Jersey Development, Inc. Chief Executive Office:

One Neshaminy Interplex, Suite 201

Trevose, PA 19053

South Jersey Development, Inc. Principal Place of Business:

95-05 Fairview (95th Street)

North Bergen, NJ 07047

 

 

 

Juda Construction, Ltd. Chief Executive Office and Principal Place of Business:

1215 E. Bay Avenue

Bronx, NY 10474

American Transportation & Disposal Systems, Ltd. Chief Executive Office and Principal Place of
Business:

400 Tiffany Street

Bronx, NY 10474

Terrasyn Environmental Corp.

36 Sheffield Street

Waterbury, CT 06704

Environmental Venture Partners, LLC

36 Sheffield Street

Waterbury, CT 06704

Bio Methods, LLC

36 Sheffield Street

Waterbury, CT 06704

Geo Methods, LLC

36 Sheffield Street

Waterbury, CT 06704

 

S-5.1-1

 

OTHER INVENTORY AND EQUIPMENT LOCATIONS

Inventory –

N/A

Equipment –

	•	 	Juda Construction, Ltd. owns a crushing unit located at 95-05 Fairview (95th
Street), North Bergen, NJ 07047, which is operated by South Jersey Development, Inc. All
other Juda equipment is stored at 400 Tiffany Street, Bronx, NY.
	 
	•	 	South Jersey Development, Inc.’s equipment is located at 95-05 Fairview (95th
Street), North Bergen, NJ 07047.

S-5.1-2

 

 

 

Schedule 5.2 to Credit and Security Agreement

CAPITALIZATION OF PURE EARTH, INC. AND ORGANIZATIONAL CHART

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	No. of shares (after	 	 	 	 
	 	 	Type of	 	 	exercise of all rights	 	 	Percent interest on	 
	Holder	 	Rights/Stock	 	 	to acquire shares)	 	 	a fully diluted basis	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Public Company
	 	Common Stock	 	 	15,207,889	 	 	 	100	%

Attach organizational chart showing the ownership structure of all Subsidiaries of the Borrower.

 

 

 

Schedule 6.4 to Credit and Security Agreement

Permitted Indebtedness and Guaranties

INDEBTEDNESS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	 	 	 	 	 	 	 
	 	 	Amount	 	 	 	 	 	 	 	 
	 	 	(as of	 	 	Maturity	 	Monthly	 	 	 
	Creditor	 	8/31/06)	 	 	Date	 	Payment	 	 	Collateral
	Orix Financial Services
	 	$	208,019.95	 	 	9/1/08	 	$	9,314.00	 	 	2- 2006 Kenworths
	Hitachi
	 	$	30,780.00	 	 	7/5/07	 	$	3,078.00	 	 	Kawasaki Loader
	Key Equipment
	 	$	39,820.35	 	 	7/6/07	 	$	3,770.00	 	 	2004 Kenworth
	DCS
	 	$	42,540.20	 	 	5/9/08	 	$	2,153.40	 	 	2001 Kenworth
	GE Commercial
	 	$	20,158.04	 	 	12/20/06	 	$	6,806.47	 	 	2- 2003 Kenworths
	GE Commercial
	 	$	4,067.54	 	 	12/20/06	 	$	1,376.26	 	 	2004 Flowboys
	GE Transportation Finance
	 	$	21,337.20	 	 	3/2/07	 	$	3,127.10	 	 	2- 2004 Flowboys
	Pacar Financial
	 	$	50,357.35	 	 	9/1/07	 	$	4,397.35	 	 	2005 Kenworth
	Pinnacle – All Points
	 	$	500,660.01	 	 	4/15/09	 	$	18,240.00	 	 	1987 Cat. Exc.; 1994 Hitachi Exc.; and other equipment
	Key Equipment
	 	$	274,541.54	 	 	9/12/06	 	$	12,863.11	 	 	3- 2005 Kenworths
	DCS
	 	$	299,960.42	 	 	9/23/08	 	$	12,928.08	 	 	3- 2006 Western Stars
	DCS
	 	$	543.576.99	 	 	6/18/11	 	$	11,275.42	 	 	4- 2006 Western Stars
	John Deere
	 	$	108,598.54	 	 	9/10/09	 	$	3,218.38	 	 	JD750 Tractor
	Subordinated Debentures
	 	$	800,000.00	 	 	6/30/08	 	 	N/A	 	 	Stock
	Mgmt Loan-Mark Alsentzer
	 	$	319,873.13
(as of 9-30-06	)	 	Demand	 	 	N/A	 	 	Unsecured
	Mgmt Loan-Brent Kopenhaver
	 	$	51,350.95
(as of 9-30-06	)	 	Demand	 	 	N/A	 	 	Unsecured
	Mgmt Loan-Whitney Contracting
	 	$	75,000.00
(as of 9-30-06	)	 	Demand	 	 	N/A	 	 	Unsecured
	Mgmt Loan-CNT Partners
	 	$	8,996.00
(as of 9-30-06	)	 	Demand	 	 	N/A	 	 	Unsecured
	Mgmt Loan-Interest
	 	$	19,827.16
(as of 9-30-06	)	 	Demand	 	 	N/A	 	 	Unsecured

 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	 	 	 	 	 	 	 
	 	 	Amount	 	 	 	 	 	 	 	 
	 	 	(as of	 	 	Maturity	 	Monthly	 	 	 
	Creditor	 	8/31/06)	 	 	Date	 	Payment	 	 	Collateral
	Mgmt Loan-Chris Uzzi
	 	$	426,000.00
(as of 9-30-06	)	 	Demand	 	 	N/A	 	 	Unsecured
	Mgmt Loan-Fullerton Land
	 	$	190,000.00
(as of 9-30-06)	 	 	Demand	 	 	N/A	 	 	Unsecured
	Mgmt Loan-Whitney Contracting
	 	$	2,443.46
(as of 90-30-06	)	 	Demand	 	 	N/A	 	 	Unsecured
	Loehmann-Blasius Chevrolet, Inc.
	 	$	45,952.80	 	 	10/2011	 	$	765.88	 	 	2007 Chevrolet Avalanche
	Loehmann-Blasius Chevrolet, Inc.
	 	$	30,406.20	 	 	10/2011	 	$	506.77	 	 	2004 Ford F-150
	Pure Earth, Inc. 
	 	$	11,500.00	 	 	On Demand	 	 	Short-Term Loan	 	 	1985 Gus Pech
Rotary/Auger Drill Machine

	 	 	 
	*	 	Obligation of South Jersey
	 
	**	 	Obligation of Pure Earth
	 
	***	 	Obligation of American

All other obligations above are obligations of Juda.

All indebtedness of Borrowers relating to Permitted Liens as of the date of this Agreement is
Permitted Indebtedness hereunder, whether or not listed above.

GUARANTIES

	 	 	 	 	 	 	 	 	 
	 	 	Amount and Description of	 	 	 	 
	Primary Obligor	 	Obligation Guaranteed	 	 	Beneficiary of Guaranty	 
	 
	 	 	 	 	 	 	 	 
	 
	 	NONE	 	 	 	 

S-6.4-2

 

-15-Filed by Bowne Pure Compliance

EXHIBIT
10.7.2

FINAL

SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT

AND WAIVER OF DEFAULTS

THIS SECOND AMENDMENT (the “Amendment”), dated May 16, 2007, is entered into by and between
PURE EARTH, INC., a Delaware corporation (“Pure Earth”) and its wholly owned subsidiaries, PURE
EARTH TRANSPORTATION AND DISPOSAL, INC., a Pennsylvania corporation, PURE EARTH MATERIALS, INC., a
Delaware corporation, and JUDA CONSTRUCTION, LTD., a New York corporation, (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.

The Borrower has requested that certain amendments be made to the Credit Agreement, which the
Lender is willing to make pursuant to the terms and conditions set forth herein.

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 “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 Amount” means $7,500,000 unless this amount is reduced pursuant to Section
2.10, in which event it means such lower amount.”

2. The definition of “Target Companies” shall be added to Section 1.1 of the Credit Agreement
as follows:

“”Target Companies” means Casie Ecology Oil Salvage, Inc., Rezultz, Incorporated, and
MidAtlantic Recycling Technologies, Inc.

 

 

 

3. The definition of “Stock Pledge Agreement” shall be added to Section 1.1 of the Credit
Agreement as follows:

“Stock Pledge Agreement” means the Borrower’s agreement in favor of the Lender in
substantially the form of Exhibit D hereto, as same may be renewed and amended from time to time,
and all replacements thereto.”

4. Section 2.7(e) shall be amended as follows:

“(e) Termination and Line Reduction Fees. If (i) the Lender terminates the Credit
Facility during a Default Period, or if (ii) the Borrower terminates or reduces the
Credit Facility on a date prior to the Maturity Date, then the Borrower shall pay
the Lender as liquidated damages and not as a penalty a termination fee in an amount
equal to a percentage of the Maximum Line Amount (or the reduction of the Maximum
Line Amount, as the case may be) calculated as follows: (A) two percent (2%) if the
termination or reduction occurs on or before the first anniversary of the Funding
Date; or (B) one percent (1%) if the termination or reduction occurs after the first
anniversary of the Funding Date.

As a one-time accommodation to the Borrower, the termination fee applicable for any
complete termination of the Credit Facility shall be charged as if the Maximum Line
Amount is $5,000,000. This accommodation shall not be applicable to future
increases of the Maximum Line Amount.”

5. Section 6.2(b) of the Credit Agreement shall be amended as follows:

“(b) Capital Expenditures. The Borrower will not incur or contract to incur unfinanced
Capital Expenditures of more than $725,000 for the fiscal year ending December 31, 2006 and
$300,000 in the aggregate during any subsequent fiscal year. The Borrower may make additional
Capital Expenditures on behalf of the Target Companies from the New Equity of $1,000,000 on or
before July 31, 2007 and $1,500,000 upon installation of second indirect dryer and BDAT unit at
3137 Chammings Drive, Vineland, New Jersey on or before March 30, 2009, provided no Event of
Default exists.”

6. Exhibit A of the Credit Agreement shall be deleted and replaced with Exhibit A attached
hereto.

7. Exhibit B of the Credit Agreement shall be deleted and replaced with Exhibit B attached
hereto.

8. Schedule 5.1 of the Credit Agreement shall be deleted and replaced with Schedule 5.1
attached hereto.

9. Schedule 5.2 of the Credit Agreement shall be deleted and replaced with Schedule 5.2
attached hereto.

 

-2-

 

10. Schedule 5.5 of the Credit Agreement shall be deleted and replaced with Schedule 5.5
attached hereto.

11. Schedule 6.3 of the Credit Agreement shall be deleted and replaced with Schedule 6.3
attached hereto.

12. Schedule 6.4 of the Credit Agreement shall be deleted and replaced with Schedule 6.4
attached hereto.

13. Consent to Acquisition. The Lender consents to the Borrower’s acquisition of the
Target Companies on the terms and conditions set forth in the Stock Purchase Agreement dated as of
February 13, 2007, as amended by a certain First Amendment to Stock Purchase Agreement dated as of
February 28, 2007, a certain Second Amendment to Stock Purchase Agreement, dated as of March 26,
2007, and a certain Third Amendment to Stock Purchase Agreement, dated as of May 7, 2007 among the
Borrower, the Target Companies, Gregory W. Call and Rex Mouser.

14. Preferred Stock Issuance. The Borrower shall request the Lender’s approval, if
any party seeks to exercise the put/call provisions contained in any preferred stock issuance.

15. Release of Guarantor. Environmental Venture Partners LLC is hereby released as
Guarantor, as this entity was legally dissolved on February 15, 2007.

16. Consent to Name Change. American Transportation and Disposal Systems, Ltd. shall
change its name to Pure Earth Transportation and Disposal, Inc. South Jersey Development, Inc.
shall change its name to Pure Earth Materials, Inc.

17. Formation of Pure Earth of PA, Inc. The Borrower may form Pure Earth of PA, Inc.,
as a wholly owned subsidiary. Pure Earth of PA, Inc. shall become a Borrower following its
formation and upon approval by the Lender of the Constituent Documents of Pure Earth of PA, Inc.

18. Waiver of Defaults. The Borrower is in default of the following provisions of the
Credit Agreement (collectively, the “Existing Defaults”):

	 	 	 	 	 
	Section/Covenant	 	Required Performance	 	Actual Performance
	 
	 	 	 	 
	6.1(d) Projections
	 	Projections due by December 1, 2006.	 	Projections to be provided by May 31, 2007.

 

-3-

 

Upon the terms and subject to the conditions set forth in this Amendment, the Lender hereby waives
the Existing Defaults. 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.

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. Amendment Fee. The Borrower shall pay the Lender as of the date hereof a fully
earned, non-refundable fee in the amount of $20,000 in consideration of the Lender’s execution and
delivery of this Amendment.

21. 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) The Revolving Note, duly executed on behalf of the Borrower.

(b) The Acknowledgment and Agreement of Guarantors set forth at the end of this Amendment,
duly executed by each Guarantor.

(c) The Stock Pledge Agreement, duly executed by the Borrower.

(d) The Subordination Agreement of Gregory W. Call, in form and substance acceptable to the
Lender.

(e) A Certificate of the Secretary of the Borrower certifying as to (i) the resolutions of the
board of directors of the Borrower approving the execution and delivery of this Amendment, (ii) the
fact that the articles of incorporation and bylaws of the Borrower, which were certified and
delivered to the Lender pursuant to the Certificate of Authority of the Borrower’s secretary or
assistant secretary dated October 24, 2006 continue in full force and effect and have not been
amended or otherwise modified except as set forth in the Certificate to be delivered, and
(iii) certifying that the officers and agents of the Borrower who have been certified to the
Lender, pursuant to the Certificate of Authority of the Borrower’s secretary or assistant secretary
dated December 29, 2006, as being authorized to sign and to act on behalf of the Borrower continue
to be so authorized or setting forth the sample signatures of each of the officers and agents of
the Borrower authorized to execute and deliver this Amendment and all other documents, agreements
and certificates on behalf of the Borrower.

(f) Payment of the fee described in Paragraph 20.

 

-4-

 

(g) Evidence of the dissolution of Environmental Venture Partners LLC satisfactory to the
Lender.

(h) Evidence of name changes set forth in Paragraph 16 satisfactory to the Lender.

(i) Current searches of appropriate filing offices showing that no Liens have been filed and
remain in effect against Pure Earth Transportation and Disposal, Inc., and Pure Earth Materials,
Inc. except Permitted Liens or Liens held by Persons who have agreed in writing that upon receipt
of proceeds of the initial Advances, they will satisfy, release or terminate such Liens in a manner
satisfactory to the Lender.

(j) A current certificate issued by the Secretary of State of Delaware relating to Pure Earth
Transportation and Disposal, Inc. and the Secretary of State of Pennsylvania relating to Pure Earth
Materials, Inc. certifying that Pure Earth Transportation and Disposal, Inc., and Pure Earth
Materials, Inc. are in compliance with all applicable subsistence requirements of the States of
Delaware and Pennsylvania.

(k) Certificates of the insurance required under the Credit Agreement, with all hazard
insurance containing a lender’s loss payable endorsement in the Lender’s favor subject to the
rights of any Person having security interests in assets of Pure Earth Transportation and Disposal,
Inc., and Pure Earth Materials, Inc. senior in priority to the right therein in favor of Lender and
with all liability insurance naming the Lender as an additional insured.

(l) A true and correct copy of the closing binder(s) evidencing the Borrower’s acquisition of
the Target Companies, including but not limited to the Stock Purchase Agreement dated as of March
30, 2007 among the Borrower, the Target Companies and Gregory W. Call.

(m) Such other matters as the Lender may require.

22. 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.

 

-5-

 

(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.

23. 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.

24. No Other Waiver. Except as otherwise provided in Paragraph 14 hereof, 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.

25. Release. The Borrower, and each Guarantor signing the Acknowledgment and Agreement
of Guarantors set forth below, 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 or each Guarantor 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.

 

-6-

 

26. 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
and the fee required under Paragraph 20 of this Amendment.

27. Miscellaneous. This Amendment and the Acknowledgment and Agreement of Guarantors
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.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WELLS FARGO BANK,	 	 	 	PURE EARTH, INC.	 	 	 	PURE EARTH MATERIALS, INC.	 	 
	NATIONAL ASSOCIATION	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Alan I. Cohen
	 	 	 	By:
	 	/s/ Brent Kopenhaver
	 	 	 	By:	 	 	 	 
	 

	 	 

Alan I. Cohen
	 	 
	 	 	 	 

Brent Kopenhaver
	 	 
	 	 	 	 
	 	 
	 
	 	Its Vice President	 	 	 	 	 	Its Executive Vice President	 	 	 	 	 	 Its President
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	JUDA CONSTRUCTION, LTD.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Its Treasurer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PURE EARTH TRANSPORTATION AND	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	DISPOSAL, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Its Treasurer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PURE EARTH MATERIALS, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Its Treasurer	 	 	 	 	 	 	 	 

 

-7-

 

ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

The undersigned, each a guarantor of the indebtedness of Pure Earth, Inc. and its wholly owned
subsidiaries (the “Borrower”) to Wells Fargo Bank, National Association (the “Lender”), acting
through its Wells Fargo Business Credit operating division, pursuant to a Guaranty dated December
29, 2006 (the “Guaranty”), hereby (i) acknowledges receipt of the foregoing Amendment;
(ii) consents to the terms (including without limitation the release set forth in Paragraph 25 of
the Amendment) and execution thereof; (iii) reaffirms all obligations to the Lender pursuant to the
terms of the Guaranty; and (iv) acknowledges that the Lender may amend, restate, extend, renew or
otherwise modify the Agreement and any indebtedness or agreement of the Borrower, or enter into any
agreement or extend additional or other credit accommodations, without notifying or obtaining the
consent of the undersigned and without impairing the liability of the undersigned under the
Guaranty for all of the Borrower’s present and future indebtedness to the Lender.

	 	 	 	 	 	 	 	 	 	 	 
	Geo Methods, LLC	 	 	 	Terrasyn Environmental Corp.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 
	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 
	 

	 	Its Treasurer
	 	 	 	 	 	Its Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:	 	 	 	Address:	 	 
	One Neshaminy Interplex, Ste. 201	 	 	 	One Neshaminy Interplex, Ste. 201	 	 
	Trevose, PA  19053	 	 	 	Trevose, PA  19053	 	 
	Attention: Brent Kopenhaver	 	 	 	Attention: Brent Kopenhaver	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Bio Methods, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Brent Kopenhaver
 

Brent Kopenhaver
	 	 
	 

	 	 	 	 	 	 	 	Its Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Address:	 	 
	 	 	 	 	 	 	One Neshaminy Interplex, Ste. 201	 	 
	 	 	 	 	 	 	Trevose, PA  19053	 	 
	 	 	 	 	 	 	Attention: Brent Kopenhaver	 	 

 

-8-

 

Exhibit A

REVOLVING NOTE

			
	 	 	 
	$7,500,000
	 	May _____, 2007

For value received, the undersigned, PURE EARTH, INC., a Delaware corporation and its
subsidiaries, PURE EARTH TRANSPORTATION AND DISPOSAL, INC., a Pennsylvania corporation, PURE EARTH
MATERIALS, INC., a Delaware corporation, and JUDA CONSTRUCTION, LTD., a New York corporation,
(collectively, the “Borrower”), hereby promise, jointly and severally, to pay to the order of WELLS
FARGO BANK, NATIONAL ASSOCIATION (the “Lender”), acting through its Wells Fargo Business Credit
operating division, on the Termination Date referenced in the Credit and Security Agreement dated
the same date as this Revolving Note that was entered into by the Lender and the Borrower (as
amended from time to time, the “Credit Agreement”), at Lender’s office located at Philadelphia,
Pennsylvania, or at any other place designated at any time by the holder hereof, in lawful money of
the United States of America and in immediately available funds, the principal sum of Seven Million
Five Hundred Thousand Dollars ($7,500,000) or the aggregate unpaid principal amount of all
Revolving Advances made by the Lender to the Borrower under the Credit Agreement, together with
interest on the principal amount hereunder remaining unpaid from time to time, computed on the
basis of the actual number of days elapsed and a 360-day year, from the date hereof until this
Revolving Note is fully paid at the rate from time to time in effect under the Credit Agreement.

This Revolving Note is the Revolving Note referenced in the Credit Agreement, and is subject
to the terms of the Credit Agreement, which provides, among other things, for acceleration hereof.
Principal and interest due hereunder shall be payable as provided in the Credit Agreement, and this
Revolving Note may be prepaid only in accordance with the terms of the Credit Agreement. This
Revolving Note is secured, among other things, pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or more other security
agreements, mortgages, deeds of trust, assignments or other instruments or agreements.

The Borrower shall pay all costs of collection, including reasonable attorneys’ fees and legal
expenses if this Revolving Note is not paid when due, whether or not legal proceedings are
commenced.

Presentment or other demand for payment, notice of dishonor and protest are expressly waived.

 

-9-

 

This Note supersedes and replaces, but does not extinguish, any of the unpaid liabilities and
obligations under, nor does this Note constitute a novation with respect to the Revolving Note
dated October 24, 2006 in the original principal amount of $5,000,000 executed by the Borrower in
favor of the Lender.

	 	 	 	 	 	 	 
	 	 	PURE EARTH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Brent Kopenhaver
	 	 
	 

	 	 	 	Its Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	JUDA CONSTRUCTION, LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Brent Kopenhaver
	 	 
	 

	 	 	 	Its Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	PURE EARTH TRANSPORTATION AND DISPOSAL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Brent Kopenhaver
	 	 
	 

	 	 	 	Its Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	PURE EARTH MATERIALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Brent Kopenhaver
	 	 
	 

	 	 	 	Its Treasurer	 	 
	 
	 	 	 	 	 	 
	 	 	PURE EARTH MATERIALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 
	 	 	 	 
	 	 
	 
	 	 	 	 
	 	 
	 
	 	 	 	Its President	 	 

 

-10-

 

Exhibit B to Credit and Security Agreement

COMPLIANCE CERTIFICATE

	 	 	 
	1.

	 	To: Wells Fargo Bank, National Association
	Date:
	 	[                                        ,
200 _____]
	Subject:

	 	Financial Statements

In accordance with our Credit and Security Agreement dated as of [                    ](as amended
from time to time, the “Credit Agreement”), attached are the financial statements of PURE EARTH,
INC., a Delaware corporation and its subsidiaries, PURE EARTH TRANSPORTATION AND DISPOSAL, INC., a
Pennsylvania corporation, PURE EARTH MATERIALS, INC., a Delaware corporation, and JUDA
CONSTRUCTION, LTD., a New York corporation (collectively, the “Borrower”) as of and for
                    ,
200_____ (the “Reporting Date”) and the year-to-date period then ended (the
“Current Financials”). All terms used in this certificate have the meanings given in the Credit
Agreement.

I certify that the Current Financials have been prepared in accordance with GAAP, subject to
year-end audit adjustments, and fairly present the Borrower’s financial condition as of the date
thereof.

I further hereby certify as follows: Events of Default. (Check one):

	 	•	 	The undersigned does not have knowledge of the occurrence of a Default or Event of
Default under the Credit Agreement except as previously reported in writing to the
Lender.
	 
	 	•	 	The undersigned has knowledge of the occurrence of a Default or Event of Default
under the Credit Agreement not previously reported in writing to the Lender and
attached hereto is a statement of the facts with respect to thereto. The Borrower
acknowledges that pursuant to Section 2.6(d) of the Credit Agreement, the Lender may
impose the Default Rate at any time during the resulting Default Period.
	 
	 	•	 	Material Adverse Change in Litigation Matters of the Borrower. I further
hereby certify as follows (check one):

	 	•	 	The undersigned has no knowledge of any material adverse change to the litigation
exposure of the Borrower or any of its Affiliates.
	 
	 	•	 	The undersigned has knowledge of material adverse changes to the litigation exposure
of the Borrower or any of its Affiliates not previously
disclosed in Schedule 5.7. Attached to this Certificate is a statement of the facts
with respect thereto.

 

-11-

 

Financial Covenants. I further hereby certify as follows (check and complete each of
the following):

1. Minimum Tangible Net Worth. Pursuant to Section 6.2(a) of the Credit Agreement, as of the
Reporting Date, the Borrower’s Tangible Net Worth was $                     , which satisfies does not
satisfy the requirement that such amount be not less than $2,500,000 on the Reporting Date.

2. Capital Expenditures. Pursuant to Section 6.2(b) of the Credit Agreement, for the
year-to-date period ending on the Reporting Date, the Borrower has expended or contracted to expend
during the year ended [                    ,
200_____,_] for unfinanced Capital Expenditures,
$                     in the aggregate, which satisfies  does not satisfy the requirement that such
unfinanced expenditures not exceed $750,000 in the aggregate during the fiscal year ending December
31, 2006 and $300,000 in the aggregate during any subsequent fiscal year. The Borrower has/has not
made additional Capital Expenditures on behalf of the Target Companies from the New Equity of
$1,000,000 on or before July 31, 2007. The Borrower has/has not made additional Capital
Expenditures on behalf of the Target Companies from the New Equity of $1,500,000 upon installation
of second indirect dryer and BDAT unit at 3137 Chammings Drive, Vineland, New Jersey on or before
March 30, 2009.

3. Salaries. As of the Reporting Date, the Borrower has not paid excessive or unreasonable
salaries, bonuses, commissions, consultant fees or other compensation, and as a consequence is/is
not in compliance with Section 6.8 of the Credit Agreement.

4. Advances to Affiliates. As of the Reporting Date, outstanding advances to Terrasyn
Environmental Corp. and Environmental Venture Partners LLC (the “Acquired Entities”) o do o do not
satisfy the requirement that no more than $300,000 may be owed by Terrasyn Environmental Corp. and
Environmental Venture Partners LLC to the Administrative Borrower at any time. For the
year-to-date period ended                      
 _____, 200_____, the Administrative Borrower has advanced to the
Acquired Entities $                     in the aggregate and has received $                     in the aggregate from the
Acquired Entities.

Attached hereto are all relevant facts in reasonable detail to evidence, and the computations
of the financial covenants referred to above. These computations were made in accordance with
GAAP.

	 	 	 	 	 	 	 
	 	 	PURE EARTH, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Its Chief Financial Officer
	 	 

 

-12-

 

EXHIBIT D

 

-13-

 

Schedule 5.1 to Credit and Security Agreement

TRADE NAMES, CHIEF EXECUTIVE OFFICE, PRINCIPAL PLACE OF 

BUSINESS,

AND LOCATIONS OF COLLATERAL

TRADE NAMES

	 	•	 	Pure Earth, Inc. was formerly known as Info Investors, Inc. Its name was changed on
January 17, 2006.
	 
	 	•	 	South Jersey Development, Inc. has operated only under its corporate name since
inception. Name changed to Pure Earth Materials, Inc. effective 2/26/07.
	 
	 	•	 	Juda Construction, Ltd. has operated only under its corporate name since inception.
	 
	 	•	 	American Transportation & Disposal Systems, Ltd. has operated only under its corporate
name since inception. It did, however, change its name to Pure Earth of New York, Inc. on
April 24, 2006, and changed it back to American Transportation & Disposal Systems, Ltd. on
September 1, 2006. The company’s name was changed to Pure Earth Transportation & Disposal,
Inc. effective as of February 28, 2007.
	 
	 	•	 	None of the borrowers has otherwise operated under any other trade name.

CHIEF EXECUTIVE OFFICE/PRINCIPAL PLACE OF BUSINESS

Pure Earth, Inc. Chief Executive Office and Principal Place of Business:

One Neshaminy Interplex, Suite 201

Trevose, PA 19053

Pure Earth Materials, Inc. Chief Executive Office:

One Neshaminy Interplex, Suite 201

Trevose, PA 19053

Pure Earth Materials, Inc. Principal Place of Business:

9505 Fairview Avenue (95th Street)

North Bergen, NJ 07047

Juda Construction, Ltd. Chief Executive Office and Principal Place of Business:

1215 E. Bay Avenue

Bronx, NY 10474

 

S-5.1-1

 

Pure Earth Transportation & Disposal, Inc. Chief Executive Office and Principal Place of Business:

400 Tiffany Street

Bronx, NY 10474

Terrasyn Environmental Corp.

36 Sheffield Street

Waterbury, CT 06704

Bio Methods, LLC

36 Sheffield Street

Waterbury, CT 06704

Geo Methods, LLC

36 Sheffield Street

Waterbury, CT 06704

Casie Ecology Oil Salvage, Inc. t/a Casie Protank

PO Box 92

Franklinville, NJ 08322

3209 N. Mill Road

Vineland, NJ 08360

Rezultz

PO Box 92

Franklinville, NJ 08322

3209 N. Mill Road

Vineland, NJ 08360

Mid Atlantic Recycling Technologies, Inc.

3137 Chammings Court

Vineland, NJ 08360

 

S-5.1-2

 

OTHER INVENTORY AND EQUIPMENT LOCATIONS

Inventory–

N/A

Equipment –

	•	 	Juda Construction, Ltd. owns a crushing unit located at 9505 Fairview Avenue
(95th Street), North Bergen, NJ 07047, which is operated by Pure Earth
Materials, Inc. All other Juda equipment is stored at 400 Tiffany Street, Bronx, NY.
	 
	•	 	Pure Earth Materials, Inc.’s equipment is located at 9505 Fairview Avenue
(95th Street), North Bergen, NJ 07047.

 

S-5.1-3

 

Schedule 5.2 to Credit and Security Agreement

CAPITALIZATION OF PURE EARTH, INC. AND ORGANIZATIONAL CHART

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	No. of shares (after	 	 	 	 
	 	 	Type of	 	 	exercise of all rights	 	 	Percent interest on	 
	Holder	 	Rights/Stock	 	 	to acquire shares)	 	 	a fully diluted basis	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Public Company
	 	Common Stock	 	 	17,283,972	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Mark Alsentzer
	 	Common Stock	 	 	2,660,000	 	 	Approx. 17%

Mr. Alsentzer is the only Person owing 10% or more of Pure Earth, Inc.

Organizational chart showing the ownership structure of all Subsidiaries of the Pure Earth, Inc.

 

S-5.2-1

 

Schedule 5.5 to Credit and Security Agreement

SUBSIDIARIES

Pure Earth Materials, Inc. (100% owned subsidiary of Pure Earth, Inc.)

Pure Earth Transportation & Disposal, Inc. (100% owned subsidiary of Pure Earth Materials, Inc.)

Juda Construction, Ltd. (100% owned subsidiary of Pure Earth Materials, Inc.)

Terrasyn Environmental Corp. (100% owned subsidiary of Pure Earth, Inc.)

Geo Methods, LLC (100% owned subsidiary of Pure Earth, Inc.)

Bio Methods, LLC (100% owned subsidiary of Pure Earth, Inc.)

Casie Ecology Oil Salvage, Inc. t/a Casie Protank (100% owned subsidiary of Pure Earth, Inc.)

Rezultz (100% owned subsidiary of Pure Earth, Inc.)

Mid Atlantic Recycling Technologies, Inc. (100% owned subsidiary of Pure Earth, Inc.)

 

S-5.5-1

 

Schedule 6.3 to Credit and Security Agreement

PERMITTED LIENS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Filing	 	 
	Borrower	 	Creditor	 	Collateral	 	 	Jurisdiction	 	Date	 	Filing Number
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Juda
	 	City of NY	 	$	13,110.00	 	 	Bronx County	 	7/15/02	 	Index #2000SX03950000
	Juda
	 	Nicholas Raptis	 	$	1,251,693.12	 	 	Bronx County	 	4/4/03	 	Index #16529/990000
	 
	 	 	Note: Lawsuit above from
Nicholas Raptis was dismissed
from the courts — no longer a
liability or judgment.
Provided
documents to the bank.
	 
	Juda
	 	City of New York Law Dept.	 	$	27,230.00	 	 	Bronx County	 	9/27/04	 	Index 
#04AL0216080000
	Juda
	 	Gonzalez Emmanuel	 	$	617.84	 	 	Bronx County	 	1/19/05	 	Index #14540/02
	Juda
	 	Atlantic Mutual
 Ins Co	 	$	58,929.11	 	 	Westchester County 
Supreme	 	6/27/06	 	1372-06
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Note: Our truck flipped over
bridge and landed on
equipment in yard. It
caused damage to the
equipment. Our insurance
company should cover
this lien.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Pure Earth Materials, Inc.
	 	John Deere Construction & Forestry Co	 	John Deere 750C Crawler Dozer S/N 933757 (per amendment)	 	PA Sec. of State	 	4/17/06	 	2006041703522
 (amended collateral
 descrip. in 
2006041702570)
	Pure Earth Materials, Inc.
	 	John Deere Construction & Forestry Co	 	John Deere 750C Crawler Dozer S/N 506205	 	PA Sec. of State	 	4/17/06	 	2006041703041
	Juda
	 	Orix Credit Alliance, Inc.	 	New Flow Boy Semi End Dump Trailer	 	NY Sec. of State	 	4/30/97 continued 12/6/01	 	088672

240073
	Juda
	 	Orix Credit Alliance, Inc.	 	3 Western Star Tractors & 1 Ford Van	 	NY Sec. of State	 	7/22/98 continued 7/22/03	 	157161

200307221359452
	Juda
	 	Orix Credit Alliance, Inc.	 	2 Travis Steel HRS Dump Trailers	 	NY Sec. of State	 	8/7/98 continued 7/23/03	 	169514

200307221359440
	Juda
	 	Orix Financial Services, Inc.	 	2 – 2006 Kenworth T800	 	NY Sec. of State	 	9/29/05	 	200509295858254

 

S-6.3-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Filing	 	 
	Borrower	 	Creditor	 	Collateral	 	 	Jurisdiction	 	Date	 	Filing Number
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Juda
	 	Paccar Financial Corporation	 	2005 Kenworth T800	 	NY Sec. of State	 	9/15/04	 	200409150936723
	Juda
	 	All Points Capital Corporation	 	1987 Caterpillar Excavator, 1994 Hitachi Excavator (list of additional equipment)	 	NY Sec. of State	 	4/12/05	 	200504120501033
	Juda
	 	All Points Capital Corporation	 	2006 Kenworth W900B Tri-Axle Dump	 	NY Sec. of State	 	12/23/05	 	200512236119216
	Juda
	 	Key Equipment Finance, Inc.	 	Specific Equipment	 	NY Sec. of State	 	5/17/06	 	200605175480466
	Juda
	 	Daimler Chrysler Financial Services Americas, LLC	 	Specific Equipment	 	NY Sec. of State	 	6/7/06	 	200606075555947
	Casie, Rezultz, Mart
	 	Parke Bank	 	All assets	 	NJ Sec. of State	 	 	 	 
	Casie, Rezultz, Mart
	 	Citi Capital	 	Gradall	 	NJ Sec of State	 	 	 	 
	Casie, Rezultz, Mart
	 	Capital Lease	 	2004 Lincoln Towne Car	 	NJ Sec. of State	 	 	 	 

 

S-6.3-2

 

Schedule 6.4 to Credit and Security Agreement

Permitted Indebtedness and Guaranties

INDEBTEDNESS

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Principal	 	 	 	 	 	 	 	 
	 	 	Amount	 	 	 	 	 	 	 	 
	 	 	(as of	 	 	Maturity	 	Monthly	 	 	 
	Creditor	 	3/31/07)	 	 	Date	 	Payment	 	 	Collateral
	Orix Financial Services
	 	$	149,716.00	 	 	9/1/08	 	$	9,314.00	 	 	2- 2006 Kenworths
	Hitachi
	 	$	9,234.00	 	 	7/5/07	 	$	3,078.00	 	 	Kawasaki Loader
	Key Equipment
	 	$	11,158.00	 	 	7/6/07	 	$	3,770.00	 	 	2004 Kenworth
	DCS
	 	$	28,902.00	 	 	5/9/08	 	$	2,153.40	 	 	2001 Kenworth
	GE Transportation Finance
	 	$	3,068.00	 	 	3/2/07	 	$	3,127.10	 	 	2- 2004 Flowboys
	Pacar Financial
	 	$	21,516.00	 	 	9/1/07	 	$	4,397.35	 	 	2005 Kenworth
	Pinnacle – All Points
	 	$	391,529.00	 	 	4/15/09	 	$	18,240.00	 	 	1987 Cat. Exc.; 1994 Hitachi Exc.; and other equipment
	Key Equipment
	 	$	206,713.00	 	 	9/12/06	 	$	12,863.11	 	 	3- 2005 Kenworths
	DCS
	 	$	208,669.00	 	 	9/23/08	 	$	12,928.08	 	 	3- 2006 Western Stars
	DCS
	 	$	474,500.00	 	 	6/18/11	 	$	11,275.42	 	 	4- 2006 Western Stars
	John Deere
	 	$	82,851.50	 	 	9/10/09	 	$	3,218.38	 	 	JD750 Tractor
	Subordinated Debentures
	 	$	800,000.00	 	 	6/30/08	 	 	N/A	 	 	Stock
	Loehmann-Blasius Chevrolet, Inc.
	 	$	40,591.64	 	 	10/2011	 	$	765.88	 	 	2007 Chevrolet Avalanche
	Loehmann-Blasius Chevrolet, Inc.
	 	$	26,858.81	 	 	10/2011	 	$	506.77	 	 	2004 Ford F-150
	Pure Earth, Inc.
	 	$	11,500.00	 	 	On Demand	 	Short-Term Loan	 	 	1985 Gus Pech Rotary/Auger Drill Machine
	Parke Bank
	 	$	6,000,000.00	 	 	Various	 	Various	 	 	All assets
	Greg Call – Sub. Debt
	 	$	4,425,000.00	 	 	Various	 	Various	 	 	Unsecured
	Citi Capital
	 	$	43,491.00	 	 	4/2010	 	$	1,169.65	 	 	Gradual
	Capital Lease
	 	$	20,835.00	 	 	3/2009	 	$	771.66	 	 	2004 Lincoln Town Car
	Misc. Equipment Lines
	 	$	437,000.00	 	 	N/A	 	 	N/A	 	 	N/A

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