Exhibit 10.1

 

TENTH AMENDMENT TO

AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT

 

This TENTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY
AGREEMENT (this “Amendment”), effective as of March 31, 2017, is entered into by
and among ENSERVCO CORPORATION, a Delaware corporation (“Enservco”), DILLCO
FLUID SERVICE, INC., a Kansas corporation (“Dillco”), HEAT WAVES HOT OIL SERVICE
LLC, a Colorado limited liability company (“Heat Waves”), and HEAT WAVES WATER
MANAGEMENT LLC, a Colorado limited liability company (“Heat Waves Water,” and
together with Enservco, Dillco and Heat Waves, and each Person joined to the
Credit Agreement (as defined below) as a borrower from time to time, each, a
“Borrower” and collectively, “Borrowers”), PNC BANK, NATIONAL ASSOCIATION
(“PNC”), as the sole Lender on the date hereof, and PNC, as Agent for the
Lenders (in such capacity, “Agent”), with reference to the following facts:

 

RECITALS

 

A.     The parties to this Amendment have entered into an Amended and Restated
Revolving Credit and Security Agreement dated as of September 12, 2014, as
amended by the Consent and First Amendment to Amended and Restated Revolving
Credit and Security Agreement dated as of February 27, 2015, the Second
Amendment to Amended and Restated Revolving Credit and Security Agreement dated
as of March 29, 2015, the Third Amendment to Amended and Restated Revolving
Credit and Security Agreement dated as of July 16, 2015, the Fourth Amendment to
Amended and Restated Revolving Credit and Security Agreement and First Amendment
to Amended and Restated Pledge and Security Agreement dated as of October 19,
2015, the Fifth Amendment to Amended and Restated Revolving Credit and Security
Agreement dated as of December 31, 2015, the Sixth Amendment to Amended and
Restated Revolving Credit and Security Agreement dated as of March 29, 2016, the
Seventh Amendment to Amended and Restated Revolving Credit and Security
Agreement dated as of August 10, 2016, the Joinder and Eighth Amendment to
Amended and Restated Revolving Credit and Security Agreement dated as of October
4, 2016, and the Ninth Amendment to Amended and Restated Revolving Credit and
Security Agreement dated as of December 31, 2016 (as may be further amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), pursuant to which the Lenders provide certain credit facilities to
Borrowers;

 

B.     Any and all initially capitalized terms used in this Amendment without
definition shall have the respective meanings assigned thereto in the Credit
Agreement;

 

C.     Borrowers have requested Agent and the Lenders amend certain provisions
of the Credit Agreement as more fully set forth herein; and

 

D.     Agent and the Lenders are willing to make such amendments to the Credit
Agreement, in accordance with, and subject to the terms and conditions set forth
herein.

 

 
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NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

 

 

ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT

 

1.01     New Definitions. The following definitions are hereby added to Section
1.2 of the Credit Agreement in the appropriate alphabetical order:

 

“Tenth Amendment” shall mean the Tenth Amendment to Amended and Restated
Revolving Credit and Security Agreement dated as of the Tenth Amendment
Effective Date.

 

“Tenth Amendment Availability Block” means a reserve in the amount of $1,000,000
against borrowing availability under the Revolving Advances facility, which
shall be imposed as of Tenth Amendment Effective Date and shall remain in effect
throughout the remainder of the Term.

 

“Tenth Amendment Effective Date” shall mean March 31, 2017.

 

“Tenth Amendment Letter of Credit” shall mean an irrevocable standby letter of
credit in the face amount of $1,500,000 issued by Signature Bank for the benefit
of PNC, in form and substance satisfactory to Agent in its Permitted Discretion.

 

1.02     Amendment to Definition of Adjusted EBITDA Section 1.2 of the Credit
Agreement is hereby further amended by amending and restating the definition of
“Adjusted EBITDA” to read in full as follows (additions to text are indicated in
bold and italics and are underscored):

 

‘“Adjusted EBITDA’ shall mean, for any period, EBIDTA for such period plus: (A)
depletion, (B) amortization of deferred financing costs, (C) impairment, (D)
non-cash expenses relating to share based payments recognized under ASC Topic
718 and ASC Subtopic 505-50, (E) pre-tax unrealized gains and losses on foreign
currency, (F) pre-tax unrealized gain and losses on any Interest Rate Hedge or
other Hedge Liabilities or commodity price risk management activities, (G)
losses on derivatives for such period, (H) losses on sale of damaged, obsolete
or worn-out equipment for such period, (i) losses on sale of investments for
such period; minus (X) gains on derivatives for such period, (ii) gains on sale
of damaged, obsolete or worn-out equipment for such period, and (iii) gains on
sale of investments for such period, and (I) for any period of four or fewer
consecutive fiscal quarters that includes the fiscal quarter of Borrowers ending
March 31, 2017, the face amount of the Tenth Amendment Letter of Credit.”

 

1.03     Amendments to Formula Amount Provision; Imposition of Tenth Amendment
Availability Block..

 

A.     Section 2.1(a)(y) of the Credit Agreement is hereby amended by replacing
the period at the end of clause (v) with the word “minus” and by adding a new
clause (vi) immediately following clause (v), to read in full as follows:

 

“(vi)     the Tenth Amendment Availability Block.”

 

 
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B.     Section 2.1(a)(y) of the Credit Agreement is hereby further amended by
amending and restating the last paragraph thereof to read in full as follows
(additions to text are indicated in bold and italics and are underscored):

 

“The amount derived from (x) Section 2.1(a)(y)(i), plus Section 2.1(a)(y)(ii),
plus Section 2.1(a)(y)(iii), minus (y) Sections 2.1(a)(y)(iv), (v) and (vi) at
any time and from time to time shall be referred to as the “Formula Amount.” The
Revolving Advances shall be evidenced by one or more secured promissory notes
(collectively, the “Revolving Credit Note”) substantially in the form attached
hereto as Exhibit 2.1(a).”

 

1.04     Amendments to Financial Covenants. Section 6.5(a) of the Credit
Agreement is hereby amended and restated in its entirety as follows (additions
to text are indicated in bold and italics and are underscored):

 

“6.5     Financial Covenants.

 

“(a)     Fixed Charge Coverage Ratio. Commencing on March 31, 2017 and
continuing as of the last day of each fiscal quarter ending thereafter,
Borrowers will cause to be maintained as of the last day of each such fiscal
quarter (the ‘compliance test date’ as used in this Section 6.5), a Fixed Charge
Coverage Ratio of not less than 1.25 to 1.00 in respect of each compliance test
date. For the purpose of this covenant, the Fixed Charge Coverage Ratio shall be
determined on the basis of Adjusted EBITDA for, as applicable, (i) the trailing
four-quarter period ending on the applicable compliance test date or (ii) the
shorter cumulative period commencing on October 1, 2016 and ending on the
applicable compliance test date. For the avoidance of doubt, the Fixed Charge
Coverage Ratio shall not be measured for the fiscal quarter ended December 31,
2016.

 

(b)     Leverage Ratio. Commencing on March 31, 2017 and continuing as of the
last day of each fiscal quarter ending thereafter, Borrowers will maintain as of
the end of each such fiscal quarter a ratio of Funded Debt to Adjusted EBITDA
(the ‘Leverage Ratio’) of not greater than the applicable amount set forth below
opposite such fiscal quarter:

 

Fiscal Quarter Ending:

Maximum Leverage Ratio

March 31, 2017 

5.50:1.00

June 30, 2017

4.50:1.00

September 30, 2017

4.50:1.00

December 31, 2017

7.00:1.00

March 31, 2018 

5.50:1.00

 

For the purpose of this covenant, the Leverage Ratio shall be determined on the
basis of Adjusted EBITDA for , as applicable, (i) the trailing four-quarter
period ending on the applicable compliance test date or (ii) the shorter
cumulative period commencing on October 1, 2016 and ending on the applicable
compliance test date.

 

(c)     Intentionally Deleted.”

 

 
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1.05     Amendment to Term Provision. Section 13.1 of the Credit Agreement is
hereby amended by amending and restating the first sentence thereof to read in
full as follows (changes to text are indicated in bold and italics and are
underscored):

 

“This Agreement, which shall inure to the benefit of and shall be binding upon
the respective successors and permitted assigns of each Borrower, Agent and each
Lender, shall become effective on the date hereof and shall continue in full
force and effect until April 30, 2018 (the ‘Term’) unless sooner terminated as
herein provided.”

 

1.06     Additional Subordinated Indebtedness. No later than May 15, 2017,
Enservco shall receive at least $1,000,000 of additional unsecured Indebtedness
that is subordinated to the Obligations in a manner satisfactory to Agent in its
Permitted Discretion. Enservco shall use all of the proceeds of such
Indebtedness to pay down the principal balance of the Revolving Advances. Upon
such pay down, Agent shall impose a permanent block against availability under
the Revolving Advances facility in an amount equal to the amount of such pay
down.

 

1.07     Application of Proceeds of Tenth Amendment Letter of Credit. If Agent
makes a drawing under the Tenth Amendment Letter of Credit, Agent shall apply
all of the proceeds of the Tenth Amendment Letter of Credit to pay down the
principal balance of the Revolving Advances. Upon such pay down, Agent shall
impose a permanent block against availability under the Revolving Advances
facility in an amount equal to the amount of such pay down.

 

ARTICLE II
Conditions Precedent

 

2.01     Closing Conditions. This Amendment shall become effective as of the day
and year first set forth above (the “Tenth Amendment Effective Date”) upon
satisfaction of the following conditions (in each case, in form and substance
reasonably acceptable to Agent):

 

 

(a)

Amendment. Agent shall have received from Borrowers this Amendment, duly
executed by Borrowers and by PNC, as Agent and as the sole Lender as of the
Tenth Amendment Effective Date;

 

 

(b)

Fee Letter. Agent shall have received from Borrowers the fee letter agreement by
and between Borrowers and Agent, dated the Tenth Amendment Effective Date (the
“Fee Letter”), duly executed by Borrowers and by PNC as Agent and as the sole
Lender as of the Tenth Amendment Effective Date;

 

 

(c)

Tenth Amendment Letter of Credit. Agent shall have received the Tenth Amendment
Letter of Credit;

 

 

(d)

Fees and Expenses. (a) Agent shall have received from Borrowers the fee
described in the Fee Letter that is due and payable on the Tenth Amendment
Effective Date and (b) Agent’s counsel shall have received from Borrowers
payment of all outstanding fees and expenses previously incurred and all fees
and expenses incurred in connection with this Amendment, to the extent invoiced
to Borrowers on or before the Tenth Amendment Effective Date;

  

 
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(e)

Default. No Default or Event of Default shall have occurred and be continuing;
and

 

 

(f)

Representations and Warranties. The representations and warranties set forth in
the Credit Agreement must be true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations
and warranties that already are qualified or modified by materiality in the text
thereof).

 

ARTICLE III
Miscellaneous

 

3.01     Survival of Representations and Warranties. All representations and
warranties made in the Credit Agreement or in any Other Document and any related
agreements to which any Borrower is a party, and each of the representations and
warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with the Credit
Agreement, the Other Documents or any related agreement is true and correct in
all material respects on and as of the date hereof as though made on and as of
the date hereof, other than representations and warranties relating to a
specific earlier date, and in such case such representations and warranties are
true and correct in all material respects as of such earlier date.

 

3.02     Authority. Each Borrower has full power, authority and legal right to
enter into this Amendment and to perform all its respective Obligations
hereunder and under the Other Documents (as amended or modified hereby). This
Amendment has been duly executed and delivered by such Person, and this
Amendment constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, moratorium or similar laws
affecting creditors’ rights generally. The execution, delivery and performance
of this Amendment (a) are within such Person’s corporate, limited liability
company or limited partnership powers (as applicable), have been duly authorized
by all necessary company or partnership (as applicable) action, are not in
contravention of law or the terms of such Person’s operating agreement, bylaws,
partnership agreement, certificate of formation, articles of incorporation or
other applicable documents relating to such Person’s formation or to the conduct
of such Person’s business or of any material agreement or undertaking to which
such Person is a party or by which such Person is bound, (b) will not, in any
material respect, conflict with or violate any law or regulation, or any
judgment, order or decree of any Governmental Body, (c) will not require the
Consent of any Governmental Body or any other Person, except those Consents
which have been duly obtained, made or compiled prior to the date hereof and
which are in full force and effect or except those which the failure to have
obtained would not have, or could not reasonably be expected to have, a Material
Adverse Effect and (d) will not conflict with, nor result in any breach in any
of the provisions of or constitute a default under or result in the creation of
any Lien except Permitted Encumbrances upon any asset of any Borrower or
Guarantor under the provisions of any material agreement, charter document,
operating agreement or other instrument to which any Borrower or Guarantor is a
party or by which it or its property is a party or by which it may be bound.

 

 
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3.03     No Default. After giving effect to this Amendment, no event has
occurred and is continuing that constitutes a Default or an Event of Default.

 

3.04     References to the Credit Agreement. The Credit Agreement, each of the
Other Documents, and any and all other agreements, documents or instruments now
or hereafter executed and delivered pursuant to the terms hereof, or pursuant to
the terms of the Credit Agreement as amended hereby, are hereby amended so that
any reference therein to the Credit Agreement shall mean a reference to the
Credit Agreement as amended by this Amendment.

 

3.05     Credit Agreement Remains in Effect. The Credit Agreement and the Other
Documents remain in full force and effect, and Borrowers ratify and confirm
their agreements and covenants contained therein. Borrowers hereby confirm that,
after giving effect to this Amendment, no Event of Default or Default has
occurred and is continuing. The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Agent or the Lenders under any of the Other Documents, nor constitute a waiver
of any provision of any of the Other Documents.

 

3.06     Submission of Amendment. The submission of this Amendment to the
parties or their agents or attorneys for review or signature does not constitute
a commitment by Agent or the Lenders to modify any of their respective rights
and remedies under the Other Documents, and this Amendment shall have no binding
force or effect until all of the conditions to the effectiveness of this
Amendment have been satisfied as set forth herein.

 

3.07     Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

 

3.08     Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

 

3.09     Headings. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

 

3.10     Expenses of Agent. Borrowers agree to pay on demand all costs and
expenses reasonably incurred by Agent in connection with the preparation,
negotiation and execution of this Amendment, including, without limitation, the
costs and fees of Agent’s legal counsel.

 

3.11     General Release. From and after the Tenth Amendment Effective Date,
each Borrower hereby agrees that, without any further act, Agent and PNC as the
sole Lender as of the Tenth Amendment Effective Date, are fully and forever
released and discharged from any and all claims for damages or losses to any
Borrower or to any property of any Borrower (whether any such damages or losses
are known or unknown, foreseen or unforeseen, or patent or latent), including,
without limitation, any tort claim, demand, action or cause of action of any
nature, whatsoever, arising under or relating to the Credit Agreement or the
Other Documents or any of the transactions related thereto, prior to the date
hereof, and each Borrower hereby waives application of California Civil Code
Section 1542. Each Borrower certifies that it has read the following provisions
of California Civil Code Section 1542:

  

A general release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

 
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Each Borrower understands and acknowledges that the significance and consequence
of this waiver of California Civil Code Section 1542 is that even if such
Borrower should eventually suffer additional damages arising out of the facts
referred to above, it will not be able to make any claim for those damages.
Furthermore, each Borrower acknowledges that it intends these consequences even
as to claims for damages that may exist as of the date of this release but which
such Borrower does not know exist, and which, if known, would materially affect
such Borrower’s decision to execute this Agreement, regardless of whether such
Borrower’s lack of knowledge is the result of ignorance, oversight, error,
negligence, or any other cause.

 

3.12     NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE FEE LETTER, AS
WRITTEN, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[Signature Pages Follow]

 

 
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IN WITNESS WHEREOF, the parties have entered into this Amendment by their
respective duly authorized officers as of the date first above written. 

 

 

 

BORROWERS:  

 

 

 

 

 

 

 

ENSERVCO CORPORATION,
a Delaware corporation

 

 

 

 

 

 

 

By:

/s/ Rick D. Kasch

 

 

Rick D. Kasch
President

 

 

 

 

 

 

 

DILLCO FLUID SERVICE, INC.,
a Kansas corporation  

 

 

 

 

 

 

 

By:

/s/ Rick D. Kasch

 

 

Rick D. Kasch
President

 

 

 

 

 

 

 

HEAT WAVES HOT OIL SERVICE LLC,
a Colorado limited liability company  

 

 

 

 

 

 

 

By:

/s/ Rick D. Kasch

 

 

Rick D. Kasch
Manager 

 

 

 

 

 

 

 

HEAT WAVES WATER MANAGEMENT LLC,
a Colorado limited liability company  

 

 

 

 

 

 

 

By:

/s/ Rick D. Kasch

    Rick D. Kasch
Manager

  

 
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AGENT AND SOLE LENDER:  

 

 

 

 

PNC BANK, NATIONAL ASSOCIATION  

 

 

 

 

 

 

 

By:

/s/ Mark Tito

 

 

Mark Tito
Vice President

 

 

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