UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): February 11,
2010
Pure
Earth, Inc.
|
||||
(Exact
Name of Registrant as Specified in Its Charter)
|
||||
Delaware
|
000-53287
|
84-1385335
|
||
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
||
One
Neshaminy Interplex, Suite 201, Trevose, Pennsylvania
|
19053
|
|||
(Address
of principal executive offices)
|
(Zip
Code)
|
|||
Registrant’s
telephone number, including area code (215)
639-8755
|
||||
Not
Applicable
|
||||
(Former
name or former address, if changed since last
report)
|
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Entry
into a Material Definitive
Agreement.
|
On
February 11, 2010, Pure Earth Materials, Inc., PEI Disposal Group, Inc., Pure
Earth Transportation & Disposal, Inc., and Pure Earth Recycling (NJ), Inc.
(collectively, the “Borrower Subsidiaries”), each of which is a wholly owned
subsidiary of Pure Earth, Inc. (the “Company”), entered into that certain
Commercial Financing Agreement (the “Agreement”), and certain related documents
and agreements, with Porter Capital Corporation (“Porter
Capital”). Subject to the terms, conditions, limitations and
covenants contained in the Agreement, Porter Capital has agreed to make
available to the Borrower Subsidiaries a line of credit in a principal amount of
up to the lesser of (i) $5.0 million, or (ii) 85% of all eligible accounts
receivable (as defined under the Agreement) that have not been
paid. All of the accounts receivable of the Borrower Subsidiaries
will be tendered to Porter Capital for purchase, and Porter Capital will
purchase from the Borrower Subsidiaries such accounts receivable as it
determines for a purchase price equal to the face value of each such accepted
invoice, less trade and cash discounts allowable or taken by the
customer. Proceeds from the collection of the accounts receivable
sold to Porter Capital will be used to reduce the amount of the obligations
outstanding under the line of credit. In the event of a customer
dispute with respect to any purchased receivables, Porter Capital may
immediately reduce the amount available for borrowing by the Borrower
Subsidiaries under the line of credit by an amount up to the full amount of the
receivable subject to the dispute, to the extent and as provided in the
Agreement. Porter Capital also has the right to reduce the 85%
advance percentage with respect to a particular account in its reasonable
discretion. Eligible accounts receivable will also be reduced by, among other
things, (i) the amount of any account that at the time exceeds 20% of all
accounts receivable of the Borrower Subsidiaries, but only to the extent of such
excess, and (ii) the amount of any account that is the subject to a claim or
disagreement by a customer against a Borrower Subsidiary. The Company
and its wholly owned subsidiaries have also entered into a Security Agreement,
dated February 11, 2010, with Porter Capital, pursuant to which any and all
amounts due under the line of credit shall be secured by an assignment of their
accounts receivable. The obligations of the Borrower Subsidiaries
under the Agreement have also been unconditionally guaranteed by the Company and
each of its wholly owned subsidiaries, on a joint and several
basis.
The
Company will be required to pay Porter Capital a invoice service fee equal to
0.95% charged monthly on the daily outstanding principal balance under the line
of credit. An origination/commitment or underwriting fee of 0.5% of
the line of credit shall be paid by the Company to Porter Capital at first
funding during the initial term and a renewal or underwriting fee of 0.5% of the
line of credit shall be paid at the beginning of each succeeding
term. Interest shall be charged by Porter Capital on the daily
outstanding principal balance of the line of credit at the prime rate plus 2.5%
on an annualized basis charged daily, collected at the end of each
month. The prime rate is the greater of the prime rate as published
in the Wall Street
Journal as the “Prime Rate” (equal to the base rate on corporate loans
posted by at least 75% of the nation’s 30 largest banks) or 5% per
year. The Company also was required to pay Porter Capital’s legal
fees and expenses and other customary closing costs in connection with the
Agreement.
The
Agreement expires on July 31, 2010, and will be automatically renewed for
successive six-month periods unless the Borrower Subsidiaries shall deliver
written notice of cancellation to Porter Capital not earlier than 90 days and
not later than 30 days prior to the expiration date of the initial term or any
succeeding renewal term. If the line of credit is terminated prior to
July 31, 2010, the Company will be required to pay a prepayment penalty equal to
0.95% of the difference between $15.0 million and the aggregate amount of
invoices actually tendered to Porter Capital during the initial
term.
Item
1.02.
|
Termination
of a Material Definitive Agreement.
|
On
February 11, 2010, the Company terminated that certain Credit and Security
Agreement with Wells Fargo Bank, National Association (the “Lender”), acting
through its Wells Fargo Business Credit operating division (the “Credit
Agreement”). A brief description of the terms and conditions of the
Credit Agreement material to the Company has been previously reported in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as
filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2009,
and in the Company’s Current Report on Form 8-K as filed with the SEC on October
29, 2009. The Credit Agreement had been set to expire on April 23,
2010, and was terminated upon the repayment in full by the Company of all
amounts due and payable under the Credit Agreement with borrowings made under
the Agreement.
Item
2.03. Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information reported under Item
1.01 herein is incorporated by reference in response to this Item
3.02.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
PURE
EARTH, INC.
|
|||
Date:
February 17, 2010
|
By:
|
/s/ Brent
Kopenhaver
|
|
Brent
Kopenhaver
|
|||
Chairman,
Executive Vice President,
|
|||
Chief
Financial Officer and
Treasurer
|
3