ENSV ENSERVCO Corporation

Delaware		001-36335		84-0811316
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.005 par value	ENSV	NYSE American

Exhibit Number		Description
10.1		Credit and Security Agreement, by and among Buckshot Trucking LLC, Enservco Corporation and Pathward, National Association. dated as of October 23, 2024
10.2		Security Agreement, by and between Enservco Corporation and Pathward, National Association dated as of October 23, 2024
10.3		Revolving Note issued by Buckshot Trucking LLC as of October 23, 2024.
10.4		Guaranty of Enservco Corporation in favor of Pathward, National Association dated as of October 23, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	Enservco Corporation
	By:	/s/ Richard A. Murphy
		Richard A. Murphy, Chair and CEO

Exhibit 10.1

 

CREDIT AND SECURITY AGREEMENT

 

PATHWARD, NATIONAL ASSOCIATION (together with its successors and assigns, “Lender”), BUCKSHOT TRUCKING LLC, a Wyoming limited liability company (“Buckshot”; and together with each other person that joins this Agreement as a Borrower, each a “Borrower” and collectively the “Borrowers”), and ENSERVCO CORPORATION, a Delaware corporation (“Enservco”; and together with each other entity that joins this Agreement as a corporate guarantor are individually and collectively, the “Corporate Guarantor”) enter into this Credit and Security Agreement (as the same may be amended, restated, supplemented or otherwise modified, the “Agreement”) on October 23, 2024 (the “Closing Date”). For good and valuable consideration, the receipt and sufficiency of which are acknowledged, Borrowers and Lender agree as follows:

 

ARTICLE 1
DEFINITIONS

 

1.1

Accounting Terms. Except as otherwise provided in this Agreement, all accounting and financial terms used in the Loan Documents are interpreted, all accounting determinations must be made, and all financial statements delivered in connection with the Loan Documents must be prepared in accordance with GAAP as in effect from time to time. If at any time any change in GAAP would, in either case, affect the computation of any financial ratio or financial requirement set forth in any Loan Document, and either Borrowers or Lender so requests, Lender and Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof.

 

1.2	General Terms. Terms not otherwise defined herein shall have the meanings given to them in Annex 1 hereto.

 

1.3

General Construction. When computing time periods from a specified date to a later specified date, “from” means “from and including” and “to” and “until” each mean “to but excluding”. In the Loan Documents: (1) unless otherwise specified herein, “discretion” when not capitalized means a determination made by Lender in its sole and absolute discretion; (2) wherever appropriate in the context, terms used in the Loan Documents in the singular also include the plural and vice versa; (3) any reference to any Loan Document or any other document, agreement, instrument, report, certificate, or other similar deliverable means that the Loan Document or other deliverable is satisfactory in form and substance to Lender in its discretion; (4) the words “include,” “includes,” and “including” are treated as being followed by “without limitation”; and (5) captions used in the Loan Documents are for convenience only and are not taken into account in interpreting the document.

 

ARTICLE 2
LOANS, PAYMENTS

 

2.1    Revolving Loans.

 

(a)

Subject to the terms and conditions in this Agreement and the Revolving Loan Schedule, Lender may make Advances to Borrower, from time to time and at its discretion, in an aggregate amount not to exceed at any one time outstanding the Maximum Borrowing Amount. The Revolving Loans are evidenced by the Revolving Note. Revolving Loans may be borrowed, repaid, and reborrowed in accordance with the Loan Documents.

 

(b)

Lender will endeavor to provide the requested funds by the end of the same Business Day so long as Lender receives the request for the Advance, together with the complete package of information required hereunder for such request, by 10:30 a.m. Eastern Time on the day such request is made. If any principal, interest, fees, Expenses, or other obligations under the Loan Documents or any other agreement with Lender become due, Lender may at its discretion and without further consent of the Borrower, treat that as a request by Borrowers for a Revolving Loan to pay the applicable obligation.

 

(c)

The Revolving Loan Outstanding may not at any time exceed the Maximum Borrowing Amount (and if it does for any reason Borrowers shall immediately and without demand pay the excess to Lender).

 

 

(d)

Lender may in its discretion (i) reduce any of the percentages set forth in the Advance Formula, (ii) establish, increase, and reduce Reserves, and (iii) reduce one or more of the elements used to compute the Advance Formula.

 

(e)

Each Advance request made by the Borrower is a representation and warranty that, as of the date of such request, (i) each representation and warranty made by each Loan Party in any Loan Document is true, correct and complete in all material respects, and (ii) no Event of Default exists or would exist after giving effect to the requested Advances or Loans.

 

2.2	Loan Repayment.

 

(a)

The Loans are due and payable on the Revolving Loan Termination Date.

 

(b)

Each time an Advance is made, the Obligations will be increased by the amount of the Advance. Three (3) business days after checks, ACH or wire transfers or other credit instruments are deposited in the Lockbox Account, Lender will credit the Loan Account with the net amount actually received, whereupon interest and Maintenance Fees will no longer be charged on such amount. The date the Borrower will receive credit on funds for purposes of determining Availability is set forth in the Revolving Loan Schedule.

 

(c)

Lender does not have to credit the Loan Account for any payment item that is not satisfactory to Lender in its discretion. All credits are provisional and are subject to verification and final settlement. Lender may charge the Loan Account for any payment item that is returned unpaid or otherwise not collected.

 

(d)

The Loan Parties must make all payments in full under the Loan Documents to Lender (without any deduction whatsoever, including any setoff, recoupment, or counterclaim), at the payment office that Lender specifies in writing to Borrowers, not later than 11:59 a.m. Eastern time, on the respective due date.

 

2.3

Statements. Lender will maintain a loan account with respect to the Revolving Loan in accordance with its customary procedures in Borrowers’ name (the “Loan Account”) in which it will record, among other things, the date and amount of each Advance and the date and amount of each payment. Lender’s failure to record this information does not affect Lender’s rights, create any liability, or release any Loan Party from any liability.

 

2.4	Additional Payments. Any Expenses incurred and taxes paid by Lender may be charged to the Loan Account as a Loan and added to the Obligations (or, at Lender’s option, must be paid by Borrowers to Lender immediately on demand).

 

2.5

Reserved.

 

ARTICLE 3
FEES

 

3.1

Fees. Borrower shall pay Lender all the fees outlined in this Agreement including those listed on the Revolving Loan Schedule. Fees are computed on the basis of a year of 360 days for the actual number of days elapsed. If any payment is due on a day that is not a Business Day, the due date is extended to the next Business Day.

 

3.2	Maximum Revolving Loan Amount. The term “Maximum Revolving Loan Amount” as referenced in this Agreement (including in the Revolving Loan Schedule) means $3,500,000.00.

 

 

ARTICLE 4
COLLATERAL

 

4.1

Security Interest; Perfection; Preservation. To secure the prompt payment and performance of the Obligations now or in the future owed by Borrower to Lender, Borrower grants to Lender (and each of its Affiliates) a continuing Lien on, security interest in, pledge of, and assignment of all of the personal property in which any Borrower has any interest, whether now existing or hereafter acquired, wherever located, including all: (a) Accounts, (b) Inventory, (c) Equipment, (d) furniture and Fixtures, (e) General Intangibles, Payment Intangibles, and Intellectual Property, (f) Investment Property, (g) Deposit Accounts and monies credited by or due from any financial institution or other depository, (h) Chattel Paper, Instruments, and Documents, (i) Goods, (j) Commercial Tort Claims, (k) Letter-of-Credit Rights, (l) Contract Rights, (m) Books and records, computer software, computer programs, and supporting obligations relating to any of the foregoing, and (n) Proceeds of any of the foregoing in whatever form (collectively the “Collateral”); provided, however, that the Collateral shall not in any event secure payment or performance of any loan incurred by a Borrower under 15 U.S.C. 636(a)(36) (as added to the Small Business Act by Section 1102 of the CARES Act). All capitalized terms used in this section which are not otherwise defined in this Agreement have the meanings assigned to them in the UCC. The Collateral also includes all monies on deposit with Lender, or on deposit in the Lockbox Account.

 

Borrower must immediately take all actions that Lender requests to (x) maintain the validity, perfection, enforceability, and priority of Lender’s Lien on the Collateral, (y) preserve and protect the Collateral or (z) to enable Lender to protect, exercise, or enforce its rights under the Loan Documents and the Collateral, including, but not limited to, the execution (if required) and delivery of security agreements, Waivers, control agreements, contracts and any other documents required hereunder. Borrower authorizes Lender to file against it, at Borrower’s expense, financing, continuation and/or amendments statements and all other appropriate documentation for Lender to perfect and maintain its security interest in the Collateral.

 

4.2

Protective Advances. When a Default or Event of Default exists, Lender may from time to time in its discretion (and without Loan Party’s consent) make Revolving Loans for Borrower’s account that Lender in its discretion believes are necessary or desirable: (1) to preserve or protect any Collateral; or (2) to enhance the likelihood of the repayment of the Obligations.

 

4.3

Risk of Loss. At all times with respect to all Collateral, Borrower shall bear the full risk of any loss.

 

4.4

Defending Lender’s Interests. Until (a) the Obligations are irrevocably paid in full and (b) the Loan Documents are terminated by Lender in writing, Lender’s interests in the Collateral shall continue in full force and effect. When an Event of Default exists, in addition to all other rights and remedies in this Agreement or by applicable law: (1) Lender may take possession of all or any part of the Collateral; (2) each Borrower must, and Lender may, at its option, instruct all suppliers, carriers, forwarders, or others receiving or holding cash, checks, Inventory, documents, or instruments in which Lender holds a Lien to deliver them to Lender and subject them to Lender’s order; (3) each Loan Party grants to Lender an irrevocable, assignable, non-exclusive license (exercisable without royalty payments or other compensation) to use, assign, license, or sublicense any present or future Intellectual Property (including in the license or sublicense access to all media in which any of the licensed items may be recorded or stored and to all related computer programs); (4) each Loan Party grants to Lender an irrevocable, assignable, non-exclusive license and lease or sublease to use, assign, license, or sublicense any leased or owned Real Property (exercisable without paying any royalty, rent, or other compensation); (5) each Loan Party Borrower authorizes Lender to pay, purchase, contest, or compromise any Lien that in Lender’s discretion appears to conflict with or impair Lender’s Liens; and (6) Lender may at any time take any other steps that Lender in its discretion believes are necessary or desirable to protect and preserve the Collateral. All of Lender’s Expenses incurred in accordance with the preceding sentence will be charged to the Loan Account and added to the Obligations.

 

4.5

Financial Disclosure. Each Borrower irrevocably authorizes and directs its accountants and auditors to promptly upon Lender’s request, to deliver to Lender copies of each Borrower’s financial statements, trial balances, and all other accounting records in the accountant’s or auditor’s possession, and to disclose to Lender any information they may have concerning each Borrower.

 

 

4.6 Accounts.

 

(a)

Remittances. Borrower must immediately notify all of its Account Debtors and any other person or party that is liable to it (collectively a “Debtor”) to remit all payments due Borrower to the Lockbox Account. The remit to address on all documents related to the accounts must be the Lockbox Account. At Lender’s request, all such documents, including invoices, purchase orders, or contracts must be marked by Borrowers to show assignment to Lender, and each Borrower must notify each of its Account Debtors by mail, in a form approved by Lender, that the Account has been assigned to Lender and that all payments on the Account must be made payable to such Borrower or Lender, at Lender’s discretion, to the Lockbox Account or such other address provided by Lender in writing. Lender may at any time and from time to time, and at its discretion, notify any Debtor or third-party payee to make payments payable directly to Lender or to notify Debtor of the assignment to Lender. All of Lender’s expenses for notifications will be paid by Borrowers.

 

If a Borrower receives any funds from a Debtor, or if a Borrower receives any proceeds of insurance, tax refunds or any and all other funds of any kind, such Borrower shall hold such funds in trust for Lender, shall not mix such funds received with any other funds, and shall immediately deposit such funds in the Lockbox Account in the form received. Lender will have sole ownership, possession and control over the Lockbox Account and all deposits in the Lockbox Account. No Borrower has any right to the Lockbox Account or any deposits in the Lockbox Account. Lender has no duty as to collection or protection of funds in the Lockbox Account as long as it is not grossly negligent or commits actual fraud. All expenses plus any applicable administration and servicing fees of the Lockbox Account will be paid by Borrowers.

 

(b)

Adjustments. Without Lender’s prior written consent, no Borrower may (1) compromise or adjust any Account (or extend the time for its payment) or (2) accept any returns of merchandise or grant any discounts, allowances, or credits, except in the ordinary course of such Borrower’s business consistent with such Borrower’s past practices and that have been disclosed to Lender in writing.

 

(c)

No Liability. Lender does not have any liability for any error or omission or delay of any kind occurring in the settlement, collection, or payment of any of the Collateral or any instrument received in payment of Collateral, or for any damage resulting therefrom. Lender may accept the return of the goods represented by any of the Accounts (without notice to or consent by any Borrower), all without discharging or in any way affecting any Borrower’s liability.

 

ARTICLE 5
REPRESENTATIONS AND WARRANTIES

 

Each Borrower represents and warrants that:

 

5.1

Authority. It has the full power, authority, and legal right to enter into the Loan Documents and to perform its obligations under the Loan Documents. Each Borrower’s execution, delivery, and performance of the Loan Documents has been approved by all necessary legal and organizational Persons. The individual(s) executing the Loan Documents on behalf of Borrower has or have been properly and duly authorized. All obligations under each Loan Document it executes are legal, valid, and binding obligations enforceable against it in accordance with their terms.

 

5.2

Formation; Qualification; Subsidiaries. Each Borrower (a) is duly organized and existing in good standing in the state of its jurisdiction; (b) is duly qualified and authorized to conduct business in any state in which the nature and extent of its business requires qualification and (c) has no Subsidiaries or other Affiliates except for as identified in the Revolving Loan Schedule. Borrower’s organizational identification number, state of organization, and states where it is qualified to do business are as identified in the Revolving Loan Schedule.

 

5.3

Collateral.  Borrower is the owner of all of the Collateral, is listed as the owner of all titled Collateral, and there are no other liens or claims against the Collateral, except for the Permitted Liens. All of the Collateral is personal property and none of the Collateral will be permanently affixed to real estate.

 

 

5.4

No Governmental Approval; No Conflict. The transactions contemplated by this Agreement and the other Loan Documents do not (a) require any consent or approval of, registration or filing with, or any other action by, any Governmental Body (except for those that have been obtained); (b) violate any law, government rule, regulation, order, judgment or award applicable to any Loan Party or the Collateral; (c) violate or create a default under any indenture, agreement, or other instrument binding on any Loan Party or any of their respective assets; (d) violate any provision of any Loan Party’s organizational documents; or (e) create any Lien on any asset of any Loan Party (except Liens created under the Loan Documents).

 

5.5

Tax Returns. Each Loan Party (a) has timely filed and will timely file all federal, state, and local tax returns, and all other reports required by law to be filed, and (b) has timely paid all taxes, assessments, fees, and other governmental charges. No tax liens have been filed against any asset of any Loan Party and no claims are being asserted for any taxes.

 

5.6	Financial Information.

 

(a)

The financial information furnished by the Loan Parties to Lender has been prepared in accordance with GAAP, consistently applied, all financial statements present fairly in all material respects the Loan Parties’ financial condition at such date and the results of their operations for the applicable period, and any projections of the business operations of each Loan Party that have been give or will be given to Lender will be based upon such Loan Party’s reasonable assumptions and estimates.

 

(b)

Since July 2024, there has been no event, development or other change in circumstances that has had or could reasonably expected to have a Material Adverse Effect in the business, operations, condition, property or prospects (financial or otherwise) of the Loan Parties, taken as a whole.

 

5.7

Name; Tradenames. During the last five years no Loan Party (a) has been known by any other name or has sold Inventory under any other name; (b) has been the surviving entity of a merger or consolidation or has acquired a material portion of the assets of any Person; or (c) has used any fictitious name, d/b/a, tradename or tradestyle (collectively, the “Tradenames”), except as set forth in the Revolving Loan Schedule.

 

5.8

Borrower Locations. The Revolving Loan Schedule sets forth (a) where Borrower’s chief executive office is located; (b) of all places of business of Borrowers; (c) where any Equipment and Inventory of Borrowers are located; and (d) where Borrower keeps the other Collateral and its books and records related thereto.

 

5.9	Licenses and Permits. Each Loan Party has complied with and has all applicable licenses or permits to conduct its business required by applicable federal, state, and local laws.

 

5.10	Solvency; No Litigation; No Violation

 

(a)

After giving effect to the transactions contemplated by the Loan Documents and the Subordinated Debt, each Borrower is and will continue to be solvent, able to pay its debts as they mature, and have sufficient capital to carry on its business and all businesses in which it is about to engage.

 

(b)

Except as set forth in the Revolving Loan Schedule, (1) no Borrower or other Loan Party has any pending or threatened litigation, investigation, arbitration, actions, or proceedings (including commercial tort claims in which Borrower is the plaintiff or moving party) against such Borrower or other Loan Party; and (2) no Borrower or any other Loan Party has violated any statute, regulation or ordinance, or any order of any court, Governmental Body, in each case that could reasonably be expected to have a Material Adverse Effect.

 

5.11	No Default. No Loan Party is in default under any Indebtedness or under a contract that could reasonably be expected to have a Material Adverse Effect.

 

5.12	No Labor Disputes. No Borrower is involved in or aware of any labor dispute.

 

5.13

Disclosure. No representation or warranty made by any Loan Party in any Loan Document or in any financial statement, report, certificate, or other document furnished to Lender by any Loan Party is untrue or misleading in any respect (through omission or otherwise). Each Loan Party has disclosed to Lender in writing each fact and circumstance that could reasonably be expected to have a Material Adverse Effect.

 

 

5.14	Anti-Terrorism.

(a)

No Loan Party or any of its Affiliates or any of their respective agents is any of the following (each a “Blocked person”): (1) a person that is listed in the annex to, or is subject to, Executive Order No. 13224; (2) a person that is owned or controlled by, or acting for or on behalf of, any person, that is listed in the annex to, or is subject to, Executive Order No. 13224; (3) a person with whom Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (4) a person that commits, threatens, or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224; (5) a person that is named as a “specially designated national” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control; or (6) a person who is affiliated or associated with any of the foregoing persons.

(b)

No Loan Party or any of its agents acting or benefiting in any capacity in connection with the transactions under the Loan Documents (1) conducts any business or engages in making or receiving any funds, goods, or services to or for the benefit of any Blocked person or (2) deals in (or otherwise engages in) any transaction relating to any property or interests in property blocked under Executive Order No. 13224.

(c)

Neither the extension of the Loans made pursuant to this Agreement nor the use of the proceeds thereof will violate any Anti-Terrorism Law.

 

5.15

Delivery of Subordinated Debt Documents. Lender has received complete copies of the Subordinated Debt Documents and related documents (including all exhibits, schedules and disclosure letters referred to therein or delivered pursuant thereto, if any) and all amendments thereto, waivers relating thereto and other side letters or agreements affecting the terms thereof. None of such documents and agreements has been amended or supplemented, nor have any of the provisions thereof been waived, except pursuant to a written agreement or instrument which has been delivered to Lender.

 

5.16

ERISA Matters. Except as disclosed to the Lender in writing prior to the date hereof, neither any Borrower nor any ERISA Affiliate (a) maintains or has maintained any Pension Plan, (b) contributes or has contributed to any Multiemployer Plan or (c) provides or has provided post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required under Section 601 of ERISA, Section 4980B of the Code or applicable state Law).

 

Refer to the Revolving Loan Schedule for any additional Representations and Warranties.

 

ARTICLE 6
AFFIRMATIVE COVENANTS

 

Until all Obligations are irrevocably paid and performed in full and the Loan Documents are terminated, each Borrower shall:

 

6.1

Conducting Business; Maintaining Existence; and Assets. Continuously conduct and operate its business according to good business practice, keep its existence in full force and effect, file all reports and pay all franchise and other taxes and license fees, and do all other acts and things that are necessary or desirable to maintain its rights, licenses, leases, powers, and franchises.

 

6.2	Compliance with Laws. Comply with all applicable laws, acts, rules, orders, regulations, or ordinances of any Governmental Body, except to the extent that failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.3	Financial Covenants. Reserved.

 

 

6.4

Indebtedness; Payment of Obligations. Pay, when due, all Indebtedness and its other obligations of whatever nature, including without limitation all taxes, assessments, and other governmental charges, claims for labor, supplies, rent, or other obligations (except where the amount or validity thereof is being disputed in good faith and reserves in conformity with GAAP with respect thereto have been provided on the books of the Borrowers) and not otherwise default under any Indebtedness or its other obligations.

 

6.5

Deposit Accounts. Except for the accounts listed on the Revolving Loan Schedule, maintain all deposit, investment, brokerage, and other financial accounts with Lender. Each account on the Revolving Loan Schedule, upon the request of Lender, must at all times be subject to an account control agreement satisfactory to Lender.

 

6.6

Insurance.  Maintain, at its own cost and expense, (a) insurance against all risks of physical loss of or damage to all properties and assets in which any Borrower has an interest in such amounts as Lender may require in its Discretion and maintain business interruption insurance as is customary for companies engaged in businesses similar to each Borrower, and (b) commercial general liability insurance (including blanket contractual liability coverage and products liability coverage) for personal and bodily injury and property damage in such amounts as Lender may require in its Discretion. All such insurance shall be in form (including all endorsements required by Lender), in amounts and with carriers satisfactory to Lender. All insurance policies shall name Lender, and its successors and assigns, as “Lender Loss Payee” (under all property insurance policies) and as “Additional Insured” (under all liability insurance policies) and shall require that the insurer provide at least thirty (30) days prior written notice to Lender before a cancellation of or a material change to an insurance policy. Each Borrower must furnish Lender with evidence of insurance satisfactory in form and substance to Lender. If any Borrower does not obtain, maintain, or renew any insurance required by the Loan Documents, Lender may obtain and pay for it.

 

6.7

Beneficial Ownership Certificate. Provide to Lender: (a) a new Beneficial Ownership Certificate when the individual(s) identified as a Beneficial Owner have changed; and (b) any other information and documentation that Lender may request from time to time related to Lender’s compliance with applicable laws (including the USA PATRIOT Act and other “know your customer” and anti-money laundering rules and regulations).

 

6.8

Collateral Maintenance and Warranties. Maintain the Collateral in good operating condition and repair (reasonable wear and tear excepted), in accordance with industry standards, and must make all necessary replacements and repairs so that its value and operating efficiency are maintained and preserved.

 

6.9

Environmental Matters. Ensure that no Hazardous Substances are on any Real Property (except as permitted by applicable law or appropriate Governmental Bodies), notify Lender all claims, complaints, notices or inquiries relating to compliance with Environmental Laws, which, if adversely determined, could reasonably be expected to have a Material Adverse Effect, cure and have dismissed with prejudice any material actions and proceedings relating to its compliance with Environmental Laws.

 

6.10	Notices. Notify Lender in writing:

 

(a)

Immediately if any of the following occur: (i) any Default or Event of Default; (ii) any event or circumstance that could reasonably be expected to cause any financial statement, projection, Borrowing Base Certificate (if applicable) or other information or report furnished to Lender to be untrue or misleading; (iii) a transfer of the ownership of any Equity Interest in any Borrower; (iv) any Borrower knows or has reason to believe that any Account Debtor disputes any Account, whether or not such dispute is deemed valid by any Borrower; (v) any litigation, suit, administrative proceeding, or other proceeding affecting any Loan Party or the Collateral (whether or not the claim is covered by insurance) in which the amount of damages claimed exceeds $20,000 (individually or in the aggregate); (vi) any matter materially affecting the Collateral or if any Account Debtor asserts any claims or setoffs against Accounts ; (vii) any Loan Party or any Collateral violates or is alleged to have violated any Governmental Body’s laws, statutes, regulations, or ordinances, (viii) any representation or warranty made hereunder would be materially untrue or misleading if remade; and (ix) any other development that has or could reasonably be expected to have a Material Adverse Effect.

 

 

(b)

At least 30 days prior to any Loan Party opening any new place of business, closing any existing place of business, or changing its legal name, entity type, or jurisdiction of organization, incorporation, or formation.

 

6.11

Field Examinations. Borrowers shall permit Lender to at any time examine, audit, check, inspect, and make abstracts and copies of Borrower’s books, records, assets and liabilities audits, correspondence, and all other materials related to the Collateral. Lender has no obligation to provide any Loan Party with the results of the examination or copies of any reports. Upon request and the occurrence of a Default, Borrowers shall reimburse Lender for the costs to perform field examinations that will be performed by Lender’s inspector, whether an officer of Lender or an independent party with all expenses, including all out of pocket expenses, including, but not limited to, transportation, hotel, parking, and meals paid by Borrowers.

 

6.12	Financial Statements.

 

(a)

Furnish Lender within 120 days after the end of each of the Borrowers’ fiscal years, the Borrowers’ financial statements on a consolidated and consolidating basis (including statements of income, stockholders’ equity, and cash flow from the beginning of the current fiscal year to the end of the current fiscal year) and the balance sheet as at the end of the fiscal year, certified by a Responsible Representative of Borrower; and

 

(b)

Furnish Lender within 30 days after the end of each month, the Borrowers’ unaudited balance sheet on a consolidated and consolidating basis and the Borrowers’ unaudited statements of income, stockholders’ equity, and cash flow on a consolidated and consolidating basis, certified by a Responsible Representative of Borrower, reflecting the results of operations from the beginning of the month to the end of the month (and for the month), setting forth in each case in comparative form the figures from the projected annual operating budget delivered under Section 6.13(a) for the current fiscal year.

 

6.13	Certificates; Reports; Other Financial Information. Furnish to Lender, in form and substance satisfactory to Lender in its discretion:

 

(a)

If requested by Lender, the Borrowers’ month-by-month projected operating budget and cash flows on a consolidated and consolidating basis for the following fiscal year (including for each month an income statement, a cash flow statement, and a balance sheet and Availability projection);

 

(b)

(i) no later than 15 days after the end of each month, a detailed accounts receivable aging report including all invoices aged by invoice date (reconciled to the general ledger and the Borrowing Base Certificate, if applicable), and (ii) if requested by Lender, a summary accounts payable aging report including all accounts payable aged by invoice date (reconciled to the general ledger);

 

(c)

Prior to any request for an Advance, upon request by Lender, and at such intervals as Lender may require in its Discretion: (i) assignment schedules; (ii) copies of Account Debtor invoices; (iii) evidence of shipment and delivery of Goods; and (iv) such further schedules, documents, certificates, reports and information as Lender may require(including, without limitation, trial balances, test verifications, credit memos, sales and cash receipt journals, purchase orders, evidence of delivery, proof of shipment, and timesheets), in each case satisfactory to Lender in its Discretion and certified as true and correct in all material respects by a Responsible Representative of Borrowers. Lender may contact any Persons who hold or are obligated on any part of the Collateral, such as Account Debtors, to notify them of Lender’s Lien and to confirm and verify Accounts by any manner and through any medium it chooses;

 

(d)

Reserved;

 

(e)

Reserved;

 

(f)

If requested, current annual tax returns of each Loan Party prior to April 15 of each calendar year or, if an extension is filed, at the earlier of (a) filing, or (b) the extension deadline;

 

 

(g)

If requested, weekly payroll summaries and evidence of tax payments of Borrowers together with copies of bank statements from which the funds are impounded;

 

(h)

If requested, detailed customer lists of each Borrower showing the customer’s name, address, e-mail address, phone number and any other information Lender reasonably requests; and

 

(i)

promptly upon request, such other financial information as Lender may from time to time request in its Discretion.

 

Refer to the Revolving Loan Schedule for any additional required certificates, reports, and information.

 

6.14

Supplemental Instruments; Further Assurances. From time to time at Borrower’s expense, execute and deliver, or cause to be executed and delivered, to Lender all other documents and take or cause to be taken such further actions are required by law or that that Lender may request in its Discretion to carry out the terms and conditions of the Loan Documents and to ensure the perfection and priority of Lender’s Liens (including cooperating with Lender in obtaining control of any Collateral in the possession of third Persons).

 

Refer to the Revolving Loan Schedule for any additional Affirmative Covenants.

 

ARTICLE 7
NEGATIVE COVENANTS

 

Until all Obligations are irrevocably paid and performed in full and the Loan Documents are terminated, no Borrower may:

 

7.1	Mergers; Consolidations; Asset Sales.

 

(a)

Merge, consolidate, divide, or otherwise reorganize with or into any Person or acquire all or a material portion of any Person’s assets or Equity Interests.

 

(b)

Sell, pledge, lease, transfer, or otherwise dispose of any of its properties or assets (except Inventory sold in the ordinary course of Borrowers’ business), provided however that Borrower may sell, swap, replace or retire up to ten percent (10%) of its fleet of revenue equipment from time to time as necessary to operate its trucking business, without requesting consent from Lender.

 

7.2	Liens. Create, assign, transfer, or allow to exist any Lien on any of its property, except for Permitted Liens.

 

7.3	Investments. Purchase or acquire assets, obligations or Equity Interests of, or any other interest in, any Person, without the prior written consent of Lender.

 

7.4

Loans. Make advances, loans, or credit extensions to any Person, (including any Affiliate, Subsidiary, officer, shareholder, member, partner, director, or employee), except for commercial trade credit in connection with Inventory sales in the ordinary course of its business and consistent with practices that existed on the Closing Date and that have been disclosed to Lender in writing.

 

7.5	Distributions and Management Fees.

 

(a)

Declare or pay any dividend or make any other distribution with regard to its Equity Interests or redeem, purchase, or otherwise acquire directly or indirectly any of its Equity Interests, provided that (i) if a Borrower is taxed as an S Corporation or other “pass-through” entity, such Borrower may, so long as no Default or Event of Default exists or would result therefrom, distribute profits to its equity holders in the maximum amount necessary to enable such holders to pay personal, state and federal taxes directly attributable to the profits earned by such Borrower for such year, and (ii) Borrower may make distributions of profits to its equity holders provided that at the time of such distribution and after giving effect to such distribution, Borrower has (x) a Debt Service Coverage Ratio of at least 1.25:1.00, and (y) a minimum Liquidity of $350,000.00.

 

 

(b)

Enter into or issue, as applicable, any subscriptions, options, warrants, calls, rights, or other agreements or commitments of any kind relating to any Equity Interests; of any Borrower.

 

(c)

Pay any management, advisory, consulting, or other similar fees to any Person.

 

7.6	Indebtedness. Create, incur, assume, or allow to exist any Indebtedness, loan or guaranty or assume any obligation or liability, whether as borrower, guarantor, surety, indemnitor or otherwise except:

 

(a)

Indebtedness existing on the Closing Date;

 

(b)

Indebtedness to Lender;

 

(c)

unsecured Indebtedness in an aggregate principal amount not to exceed $100,000; and

 

(d)

The Subordinated Debt provided that it is at all times subject to a Subordination Agreement; and

 

(e)

Purchase money security interest Indebtedness in the aggregate principal amount not to exceed $250,000.

 

7.7	Business. Change in any material respect the nature of the business that it engaged in on the Closing Date.

 

7.8

Affiliate Transactions. Directly or indirectly, purchase, acquire, or lease any property from, or sell, transfer, or lease any property to, or otherwise deal with, any Affiliate, except transactions on an arm’s length basis and on terms no less favorable than terms that could be obtained from a Person who is not an Affiliate.

 

7.9	Subsidiaries; Partnerships. Form any Subsidiary, or enter into any partnership, joint venture, or similar agreement with any third party without the prior written consent of Lender.

 

7.10	Fiscal Year and Accounting Changes. Change its fiscal year-end from December 31 or make any material change (1) in accounting treatment and reporting practices (except as required by GAAP) or (2) in tax reporting treatment (except as required or permitted by law).

 

7.11	Amending Charter Documents. Amend, modify, or waive any term or provision of its charter, certificate, or articles of incorporation or organization, by-laws, partnership agreement, operating agreement, and other similar organizational or governing documents.

 

7.12

Anti-Terrorism Laws. At any time: (1) Directly or through its Affiliates or agents, conduct any business or engage in any transaction or deal with any Blocked Person, including making or receiving any funds, goods, or services to or for the benefit of any Blocked Person; (2) directly or through its Affiliates or agents, deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked under Executive Order No. 13224; (3) directly or through its Affiliates or agents, engage in or conspire to engage in any transaction that evades or avoids (or whose purpose is to evade or avoid), or attempts to violate, any of the prohibitions in Executive Order No. 13224, the USA Patriot Act, or any other Anti-Terrorism Law; or (4) not deliver to Lender any certification or other evidence requested by Lender in its sole judgment confirming each Borrower’s compliance with this Section.

 

7.13

Subordinated Debt; Modification of Subordinated Debt Documents. Except as expressly allowed by the Subordination Agreements, at any time, directly or indirectly, pay, prepay, repurchase, redeem, retire or otherwise acquire, or make any payment on account of any Subordinated Debt. Amend, modify, or waive any term or provision of any Subordinated Debt Document.

 

7.14	Amending Leases. Amend, modify, or waive any term or provision of any lease of real property (except amendments, modifications, and waivers consented to in writing by Lender in its Discretion).

 

7.15

ERISA. Except as disclosed to the Lender in writing prior to the date hereof, neither any Borrower nor any ERISA Affiliate will (a) adopt, create, assume or become a party to any Pension Plan, (b) incur any obligation to contribute to any Multiemployer Plan, (c) incur any obligation to provide post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required by law) or (d) amend any Plan in a manner that would materially increase its funding obligations.

 

 

7.16	Redirection of Funds. Notify any Account Debtor to make payment to any account other than the Lockbox Account or request an Account Debtor to withhold or stop any payment otherwise directed by Lender.

 

Refer to the Revolving Loan Schedule for any additional Negative Covenants.

 

ARTICLE 8

CONDITIONS PRECEDENT AND POST-CLOSING DELIVERABLES

 

Refer to the Revolving Loan Schedule for any Conditions Precedent and Post-Closing Deliverables.

 

 

ARTICLE 9
EVENTS OF DEFAULT

 

Any of the following events is an “Event of Default”:

 

9.1	Payment. Any Loan Party does not pay any Obligation when due (whether at maturity, by demand, by acceleration, or otherwise).

 

9.2

Misrepresentation. Any representation or warranty made or treated as having been made by any Loan Party in any Loan Document, any related agreement, or in any certificate, document, or financial or other statement furnished to Lender is misleading in any material respect on the date when made or treated as having been made.

 

9.3	Covenant Breaches. Any Loan Party does not perform, keep, or observe any term, provision, condition, or covenant in any Loan Document or in any other agreement with Lender.

 

9.4	Judgments. Any judgment or judgments are rendered or judgment liens are filed against any Borrower (or any of its property) for an aggregate amount exceeding $20,000 that, within 15 days, are not to Lender’s satisfaction satisfied, stayed, discharged of record, or bonded.

 

9.5

Insolvency. Any Borrower: (1) becomes insolvent; (2) is unable, or admits in writing its inability, to pay its debts as they become due; (3) makes a general assignment for the benefit of creditors or to a liquidation agent; (4) files on its behalf or consents to an Insolvency Proceeding; (5) has an Insolvency Proceeding filed or instituted against it that is not dismissed within 30 days after it is filed or instituted; (6) applies to a court for the appointment of a receiver, trustee, or custodian for any of its assets; (7) has a receiver, trustee, or custodian appointed for any of its assets (with or without its consent); or (8) commences a self-liquidation of its assets.

 

9.6	Material Adverse Effect. A Material Adverse Effect occurs.

 

9.7	Lender’s Lien Priority. For any reason any Lien created under any Loan Document is not or no longer remains a valid, perfected, first-priority Lien (other than purchase-money Liens on Equipment that are expressly allowed under this Agreement).

 

9.8

Default Under Indebtedness. With respect to any Indebtedness with a balance of $50,000 or more (1) a default exists under that Indebtedness that allows the holder of the Indebtedness to accelerate the Indebtedness (whether or not that right has been waived or deferred), or (2) any other default exists under any agreement of any kind now or hereafter existing between any Borrower and Lender, or any of Lender’s Affiliates.

 

9.9

Change of Control. Borrower effects an acquisition, change in control, sale, merger, reorganization or other event (whether in one or more transactions) that results in the holders of more than 25% of the Equity Interests of such Person immediately before such event no longer being the holders of more than 25% of the Equity Interests of such Person or its successor immediately after such event.

 

 

9.10	Invalidity. Any provision of any Loan Document is not, at any time and for any reason, valid and binding on each Loan Party, or any Loan Party claims in writing that any provision of any Loan Document is not, for any reason, valid and binding on any Loan Party.

 

9.11

Destruction of Collateral. Any portion of the Collateral is seized or taken by a Governmental Body, or any Loan Party (or any Loan Party’s title or rights), are subject to litigation that might, as determined by Lender in its discretion, result in material impairment or loss of the security provided by any Loan Document, or a casualty occurs as to any material asset used in the conduct of any Loan Party’s business.

 

9.12

Guarantor Repudiation. (1) Any Guaranty is not in full force and effect; (2) any action is taken to discontinue or to assert that any Guaranty is not in full force and effect; (3) any Guarantor does not comply with any of the terms or provisions of its Guaranty or any other default occurs under any Guaranty; or (4) any Guarantor denies or gives Lender notice that it purports to have no further liability under any Guaranty.

 

9.13

Indictment; Forfeiture. The indictment of, or institution of any legal process or proceeding against any Loan Party, or any of its or their officers or directors, where the relief, penalties, or remedies sought or available are a felony or include the forfeiture of more than $20,000 of property of any Loan Party or the imposition of any stay or other order, the effect of which could cause a Material Adverse Effect on the business of any Loan Party.

 

9.14	Post-Closing Deliverables. Borrowers shall fail to timely deliver to Lender any of the Post-Closing Deliverables within the respective time period set forth herein.

 

9.15	Subordinated Debt Default. An event of default occurs under any Subordinated Debt Documents or if any party to a Subordination Agreement attempts to terminate or challenge the validity of that Subordination Agreement.

 

The demand nature of the Obligations is not modified by reference to a Default or Event of Default in this Agreement or the other Loan Documents and any reference to a Default is for the purpose of permitting Lender to exercise its default remedies, including without limitation, charging interest at the Default Rate (as defined and provided in the Revolving Note).

 

ARTICLE 10
LENDER’S RIGHTS AND REMEDIES AFTER AN EVENT OF DEFAULT

 

10.1

Rights and Remedies. When an Event of Default occurs under Section 9.5, all Obligations are immediately due and payable. Without limiting the demand nature of the Obligations (including the Prepayment Fee), when any Event of Default exists, Lender has all rights and remedies provided under the Loan Documents, by law, or in equity and under all other existing and future agreements between Lender and any Loan Party. All rights and remedies are cumulative. Without limiting the preceding, when an Event of Default exists, Lender may, at its election, without notice and without demand, do any one or more of the following (all of which are authorized by the Borrowers):

 

(a)

Charge the Default Rate.

 

(b)

Declare all Obligations immediately due and payable.

 

(c)

Stop making Loans or Advances.

 

(d)

Terminate Lender’s future obligations to any Borrower (which does not affect Lender’s rights, its Liens on the Collateral, or the Obligations).

 

(e)

Settle or adjust disputes and claims directly with Account Debtors on terms that Lender determines in its discretion.

 

(f)

Direct the Borrowers to hold and segregate all returned Inventory in trust for Lender.

 

 

(g)

Request Borrowers to assemble the Collateral, deliver the Collateral to any location specified by Lender, or allow Lender or its agents to pick up the Collateral.

 

(h)

Without retaining any Collateral in satisfaction of an obligation (within the meaning of Section 9-620 of the UCC), Lender may hold or set off and apply to the Obligations any: (1) balances and deposits of any one or more of the Borrowers held by Lender (including any amounts received in the lockbox); (2) Indebtedness at any time owing to or for the credit or the account of any Borrower held by Lender; and (3) all of each Borrower’s balances and deposits of any Borrower held or controlled by Lender (including any amounts received in the lockbox).

 

(i)

Sell the Collateral at either a public or private sale in such manner and at such places as Lender determines is commercially reasonable. Lender, may but is not obligated to, credit bid and purchase all or any portion of the Collateral at any sale. The Borrowers’ rights under all licenses and all franchise agreements may be used by Lender without cost.

 

(j)

Appoint a receiver for all or any part of the Collateral (whether the receivership is incidental to a proposed sale of the Collateral under the UCC or otherwise). Each Borrower consents to the appointment of a receiver without notice or bond, to the fullest extent not prohibited by applicable law, and waives all notices of and defenses to the appointment of a receiver and may not oppose any application Lender makes for the appointment of a receiver.

 

10.2

No Waiver. No delay on Lender’s part in exercising any right, power, or privilege under this Agreement or any Loan Document is a waiver, nor does any single or partial exercise of any right, power, or privilege under this Agreement or otherwise preclude the exercise of any other right, power, or privilege.

 

ARTICLE 11
WAIVERS AND JUDICIAL PROCEEDINGS

 

11.1

Notice Waiver. To the fullest extent not prohibited by law, each Borrower waives all notices and demands that it would otherwise be entitled to receive (including non-payment of any of the Accounts, demand, presentment, protest, notice of acceptance, notice of Loans or Advances made, credit extended, or Collateral received or delivered).

 

11.2	Delay. Any delay or omission by Lender in exercising any right, remedy, or option does not waive that right (or any other right, remedy, option, or default).

 

11.3

Jury Waiver. EACH PARTY TO THIS AGREEMENT EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (1) ARISING UNDER ANY LOAN DOCUMENT, OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH ANY LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT, ANY LOAN DOCUMENT, OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH ANY OF THE PRECEDING, OR THE TRANSACTIONS RELATED TO ANY OF THE PRECEDING.

 

 

ARTICLE 12
MISCELLANEOUS

 

12.1

Governing Law; Jurisdiction. This Agreement and the other Loan Documents will be interpreted and determined under the laws of the State of Michigan without any regard to any conflict of laws provisions. EACH BORROWER AGREES THAT ANY ACTION TO ENFORCE SUCH BORROWER’S OR ANY OTHER LOAN PARTY’S OBLIGATIONS TO LENDER SHALL BE PROSECUTED EITHER IN THE CIRCUIT COURT OF OAKLAND COUNTY MICHIGAN OR THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN (UNLESS LENDER ELECTS SOME OTHER JURISDICTION), AND EACH BORROWER SUBMITS TO THE JURISDICTION OF ANY SUCH COURT SELECTED BY LENDER. EACH BORROWER WAIVES ANY AND ALL RIGHTS TO CONTEST THE JURISDICTION AND VENUE OF ANY ACTION BROUGHT IN THIS MATTER AND BORROWERS AND OTHER LOAN PARTIES MAY BRING ANY ACTION AGAINST LENDER ONLY IN THE CIRCUIT COURT FOR THE COUNTY OF OAKLAND OR THE FEDERAL COURT OR THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN.

 

12.2

Entire Understanding and Amendments. This Agreement and the other Loan Documents, including all exhibits, schedules, annexes and similar attachments hereto (all of which are incorporated herein by reference), are the entire agreement among the parties related to the subject matter of the Loan Documents. The Loan Documents supersede all prior agreements, commitments, and understandings among the parties related to the subject matter of the Loan Documents. No part of the Loan Documents may be changed, modified, amended, waived, supplemented, discharged, cancelled, or terminated other than by an agreement in writing signed by Lender and the Borrowers.

 

12.3

Transfers and Assignments. The Borrowers may not assign or otherwise transfer any of their rights or Obligations without Lender’s prior written consent. Lender may at any time sell or grant a lien on all or any portion of its interest in the Loan Documents and the Obligations through sales, participations, or otherwise.

 

12.4

Maximum Charges. If interest, fees, and other charges under the Loan Documents would exceed the highest rate allowed under law, the excess amount will instead be first applied to any unpaid principal balance owed by Borrowers and then Lender will refund the remaining balance to Borrowers. In addition, the Loan Documents will be automatically amended to provide for the highest allowed rate.

 

12.5

Payment Application. Lender has the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of the Obligations in such order as Lender determines in its discretion. If any Borrower makes a payment or Lender receives any payment or proceeds of the Collateral for any Borrower’s benefit that are later invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid to a trustee, debtor-in-possession, receiver, custodian, or any other Person then, to that extent, the Obligations or part of the Obligations intended to be satisfied is revived and continue as if the payment or proceeds had not been received by Lender.

 

12.6

Indemnity. Each Borrower indemnifies Lender (and each of its purchasers, assigns and holders of participation interests) and each of its officers, directors, attorneys, representatives, Affiliates, employees, advisors, and agents from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, Expenses, and disbursements of any kind or nature whatsoever (including attorneys’ fees, costs and disbursements of counsel) that may be imposed on, incurred by, or asserted against Lender in any litigation, proceeding, or investigation with respect to any aspect of, or any transaction contemplated by, or referred to in, or any matter related to, the Loan Documents, whether or not Lender is a party to the Loan Documents, excluding those matters caused solely by Lender’s gross negligence or willful misconduct. The Borrowers’ obligation to pay the Expenses and all of the reimbursement and indemnification obligations provided for in the Loan Documents are part of the Obligations, are secured by all of the Collateral, and survive the repayment of the Obligations.

 

12.7

Termination. The termination of this Agreement does not affect any Borrower’s Obligations arising before the effective termination date, and the Loan Documents remain in full force and effect until all Obligations are irrevocably paid and performed in full. The Liens and rights granted to Lender continue in full force and effect notwithstanding the termination of this Agreement or that the Loan Account may from time to time be in a zero or credit position, until all of the Obligations of each Loan Party have been paid or performed in full. All indemnification obligations in the Loan Documents survive the termination of the Loan Documents and payment and performance of the Obligations in full. In addition, certain provisions of the Loan Documents remain in effect even after all Obligations are irrevocably paid and performed in full. In recognition of among other things, Borrowers’ indemnification obligations and Lender’s right to have its attorneys’ fees and other expenses incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of all Obligations by Borrower, Lender shall not be required to record any terminations or satisfactions of any of its liens on the Collateral unless and until Borrowers and all other Loan Parties have executed and delivered to Lender a general release in a form acceptable to Lender in its discretion. Each Borrower understands that this provision constitutes a waiver of rights it may have under §9-513 of the UCC.

 

 

12.8

Notice. Any notice or request may be given to Borrowers or to Lender at their addresses stated on the signature page hereto (or at such other address as may be specified in writing). Any notice, request, demand, direction, or other communication (for purposes of this Section only, a “Notice”) to be given to or made on any party under any provision of the Loan Documents must be given or made in writing (which includes by means of electronic transmission (i.e., “email”) or facsimile transmission). Any Notice given to Borrower is treated as having been given to each other Loan Party. Any Notice is effective by either party if sent in writing or facsimile transmission with confirmation of receipt or by certified mail or personal delivery or expedited mail services to the addresses forth their respective signature block below.

 

12.9

Joint and Several Obligations. If more than one person or entity is named as Borrower in this Agreement, all Obligations, representations, warranties, covenants and indemnities of Borrower set forth herein and in the other Loan Documents shall be the joint and several obligations of such Persons. Each Borrower hereby appoints each other Borrower as its true and lawful attorney-in-fact, with full right and power, for purposes of exercising all rights of such person under this Agreement and applicable law with regard to the transactions contemplated under this Agreement. The foregoing is a material inducement to the agreement of Lender to enter into this Agreement and to consummate the transactions contemplated under this Agreement. Each Borrower represents that (i) it will receive a direct economic and financial benefit from the obligations incurred under this Agreement, (ii) all Borrowers are directly dependent upon each other for, and in connection with, their respective business activities and financial resources, and (iii) the incurrence of the obligations under this Agreement is in the best interest of such Borrower.

 

12.10

Cross-Guaranty.

 

(a)

Notwithstanding that Borrowers are jointly and severally liable for all Obligations, if for any reason the Borrowers are found in a final, non-appealable order not to be jointly and severally liable for all Obligations, then provisions of this Section 12.10 apply and Borrower absolutely and unconditionally guarantees to Lender, the full and prompt payment (whether at stated maturity, by acceleration, or otherwise) and performance of all Obligations. Borrower’s guaranty obligation is in addition to all other guaranty obligations and is a payment and performance guaranty (and not a collection guaranty), and its obligations under this Section 12.10 are absolute and unconditional, irrespective of, and not affected by (i) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, any other Loan Document or any other document to which the other Loan Parties are or may become a party; (ii) Lender not enforcing the Loan Documents; (iii) the existence, value, release, or condition of any Collateral, or Lender releasing any Person liable for the Obligations; or (iv) any other action or circumstances that could be a legal or equitable defense of a surety or guarantor.

 

(b)

Lender does not have to proceed against any other Person (including any other Loan Party) or any Collateral before requiring payment by any one or more of the Loan Parties.

 

(c)

Borrower waives and agrees that it may not at any time insist on, plead, or claim, or take the benefit or advantage of any laws, claims, or doctrines related to appraisal, valuation, stay, extension, marshaling, redemption, or exemption. Borrower waives with respect to any of the Obligations: (1) all defenses with respect to diligence, presentment, demand, maturity, extension of time, change in nature or form of the Obligations, acceptance, release of security, composition, or agreement arrived at as to the amount of, or the terms of, the Obligations; (2) notice of adverse change in the other Loan Parties’ financial condition; and (3) any other fact that might increase the risk to that Loan Party. Borrower also waives the benefit of all provisions of law that are or might be in conflict with the terms of this Section 12.10. Borrower represents, warrants, and agrees that its obligations under this Section 12.10 are not and will not be subject to any setoffs, defenses, or counterclaims. Borrower’s obligations under this Section 12.10 remain in full force and effect until the Obligations have been irrevocably paid and performed in full and the Loan Documents have been terminated (other than contingent obligations with respect to which no claim has been asserted or threatened). Borrower is in the same position as a principal debtor with respect to the Obligations and expressly waives all rights it has and may have to require that Lender proceed against any other Loan Party or any Collateral before proceeding against, or as a condition to proceeding against, that Loan Party. The parties acknowledge that, but for the provisions of this Section 12.10 (including the waivers), Lender would not enter into the Loan Documents.

 

 

(d)

Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, until the Obligations are irrevocably paid and performed in full (other than contingent obligations with respect to which no claim has been asserted or threatened), Borrower (i) irrevocably subordinates and defers all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification, setoff, or any other rights that a surety could have against a principal, a guarantor, a maker, a co-maker, an obligor, an accommodation party, a holder, a transferee, and that a Loan Party may have against any Person (including another Loan Party) in connection with or as a result of a Loan Party performing its obligations under the Loan Documents or any other agreements; (ii) irrevocably subordinates and defers any “claim” (as defined in the Bankruptcy Code) against any Person (including the other Loan Parties and any surety for any of the Obligations), either directly or as an attempted set off to any action instituted by Lender against any Person (including the other Loan Parties); and (iii) acknowledges and agrees (x) that this subordination and deferral is intended to benefit Lender and does not limit or otherwise affect that Loan Party’s liability or the enforceability of this Section 12.10 and (y) that Lender and its respective successors and assigns are intended third-party beneficiaries of the waivers and agreements set forth in this Section 12.10.

 

12.11

Successors and Assigns. This Agreement inures to the benefit of, and is binding on, the respective successors and permitted assigns of each Loan Party, Lender, and their respective successors and assigns.

 

12.12

Waivers. Each Borrower waives (1) all rights with respect to subrogation, reimbursement, indemnity, exoneration, contribution, or any other claim that has or could have against the other Loan Parties or other Person directly or contingently liable for the Obligations, or against or with respect to the other Person’s (including any Loan Party’s) property (including, any property that is Collateral for the Obligations), arising in connection with the Loan Documents, until the Loan Documents are terminated and the Obligations are irrevocably paid and performed in full (other than contingent obligations with respect to which no claim has been asserted or threatened) and (2) any defense it may otherwise have to paying and performing the Obligations based on any contention that its liability under the Loan Documents is limited and not joint and several. The preceding waivers and all other waivers in the Loan Documents are a material inducement to Lender’s agreement to enter into the Loan Documents and to make Advances and other Loans.

 

12.13

Severability. If any part of the Loan Documents is found for any reason to be unenforceable, all other parts nevertheless remain enforceable.

 

12.14

Injunctive Relief. If any Loan Party does not perform, observe, or discharge its obligations or liabilities under the Loan Documents (or threatens to fail or refuse to perform, observe, or discharge its obligations or liabilities) any remedy at law may prove to be inadequate relief to Lender. Therefore, Lender is entitled to temporary and permanent injunctive relief in any such case without the necessity of proving that actual damages are not an adequate remedy.

 

12.15

Consequential Damages. Under no circumstances is Lender, its Affiliates, its agents, or its attorneys liable to any Borrower for any special, incidental, consequential, or punitive damages (including those arising from any breach of contract, tort, or other wrong relating to the Obligations, the Loan Documents, the Collateral, any banking product, or any agreement between Lender and any one or more of the Borrowers).

 

 

12.16

Counterparts; Signature Transmission. The Loan Documents may be executed in any number of counterparts with the same effect as if all signatories had signed the same document. All counterparts must be construed together to constitute one instrument. Any signature delivered by facsimile or email transmission is treated as an original signature.

 

12.17

Construction. Each party and its counsel have reviewed this Agreement. Accordingly, the normal rule of construction that any ambiguities are resolved against the drafting party does not apply in interpreting this Agreement or any other Loan Document, or any amendment, schedules, or exhibits to this Agreement and the other Loan Documents.

 

12.18

Confidentiality and Sharing Information. Lender will hold all non-public confidential information obtained by them from the Loan Parties in accordance with their customary procedures for handling confidential information, but they may disclose, without notice to any Loan Parties, confidential information: (1) to their examiners, Affiliates, agents, employees, outside auditors, counsel, and other professional advisors; (2) to potential assignees of or participants in Lender’s interest in the Loans; (3) to any party that executes a non-disclosure agreement with Lender; (4) as required or requested by any Governmental Body (or its representatives); (5) under legal process; or (6) as otherwise required by law, regulation, or court order.

 

12.19

Publicity. Each Borrower authorizes Lender to publicly announce the financial arrangements entered into among the Borrowers and Lender (including announcements that are commonly known as tombstones) in any form and media Lender determines.

 

12.20

Conflict. If there is any conflict, inconsistency, or discrepancy between the provisions of this Agreement and the provisions of the other Loan Documents, the provisions giving Lender greater rights or remedies (as determined by Lender) govern to the maximum extent not prohibited by applicable law (it being understood that the purpose of this Agreement and any Loan Document is to add to, and not to limit, detract, or derogate from, diminish, or otherwise impair or reduce the rights granted to Lender in this Agreement or the Loan Documents).

 

12.21

USA Patriot Act. Lender, pursuant to the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies each Loan Party that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow Lender to identify each Loan Party in accordance with the Act, and each Borrower agrees to provide, or cause the other Loan Parties to provide, such information from time to time to Lender.

 

12.22

No Liability. Nothing in this Agreement makes Lender any Borrower’s agent for any purpose, and Lender does not assume any of any Borrower’s obligations under any contract or agreement assigned to Lender. Lender is not responsible or liable for any reason for any shortage, discrepancy, damage, loss, warranty claim or destruction of any Collateral.

 

 

12.23

Power of Attorney. Each Borrower irrevocably appoints Lender, or any person(s) designated by Lender as its attorney-in-fact, which appointment is coupled with an interest and shall remain in full force and effect until all Obligations of Borrowers to Lender have been fully satisfied and discharged, with full power, at Borrowers’ sole expense, to exercise at any time in Lender’s discretion all or any of the following powers: (a) receive, take, endorse, assign, deliver, accept, and deposit, in the name of Lender or Borrowers (or any of them), any and all cash, checks, commercial paper, drafts, remittances, and other instruments and documents relating to the Collateral or the proceeds thereof; (b) change a Borrower’s address and place Legends on all invoices and statements relating to an Account mailed or to be mailed to such Borrower’s customers and to substitute thereon the address designated by Lender, and to receive and open all mail addressed to such Borrower (including under Borrower’s Tradenames), at Lender’s address, or any other designated address; (c) upon and after the occurrence of an Event of Default, to change the address for delivery of a Borrower’s mail to Lender’s or an address designated by Lender, and to sign any forms on behalf of such Borrower to affect this change; (d) upon and after the occurrence of an Event of Default, take or bring, in the name of Lender or any Borrower, all steps, actions, suits or proceedings deemed by Lender necessary or desirable to effect collection of or other realization upon any Collateral; (e) execute on behalf of any Borrower any notices or other documents necessary or desirable to carry out the purpose and intent of this Agreement, and to do any and all things reasonably necessary and proper to carry out the purpose and intent of this Agreement; (f) transfer any lockboxes belonging to any Borrower to Lender; (g) initiate ACH transfers from any Borrower’s depository accounts; (h) endorse and take any action with respect to bills of lading covering any inventory; (i) upon and after the occurrence of an Event of Default, or at any time if any Borrower fails to do so within a reasonable time, execute, file and serve, in its own name or in the name of such Borrower, mechanics lien or similar notices, or claims under any payment or performance bond for the benefit of such Borrower; (j) upon and after the occurrence of an Event of Default, or at any time if any Borrower fails to do so within a reasonable time, pay any sums necessary to discharge any lien or encumbrance on the Collateral (including taxes and assessments), which sums shall be included as Obligations hereunder, and which sums may, at Lender’s discretion, accrue interest at the Default Rate until paid in full; and (k) negotiate any and all claims under all insurance policies relating to Collateral and the interruption of Borrower’s business and Lender also has the power to negotiate any payments on the insurance policies.

 

12.24

Electronic Signatures. Each party agrees that an Electronic Signature of such party affixed to this Agreement, any of the other Loan Documents, and to any amendment, supplement or other modification to such Loan Documents, or any other document or instrument delivered by such party in connection with the Loan Documents or any of the transactions contemplated thereby is intended to authenticate such writing and shall have the same force and effect as if it had been manually signed and physically delivered by such party. Upon request, each Borrower agrees to provide a manually executed counterpart of any Loan Document or other applicable document related to the Loan Documents previously executed by Electronic Signature.

 

Refer to the Revolving Loan Schedule for any additional Miscellaneous provisions.

 

[Remainder of Page Intentionally Left Blank – Signature Pages Follow]

 

 

Borrower, Guarantors and Lender entered into this Agreement on the Closing Date.

 

	BORROWER:   BUCKSHOT TRUCKING LLC, a Wyoming limited liability company
	By:	/s/ Richard A. Murphy
	Name:	Richard A. Murphy
	Its:	Chief Executive Officer
	Address for notices: 5200 DTC Pkwy, Suite 410 Greenwood Village, Colorado 80111 Phone: 303-333-3678 Email: rmurphy@enservco.com

 

	GUARANTORS:   ENSERVCO CORPORATION, a Delaware corporation
	By:	/s/ Richard A. Murphy
	Name:	Richard A. Murphy
	Its:	Chief Executive Officer
	Address for notices: 14133 County Road 9 ½ Longmont, Colorado 80504 Phone: 303-333-3678 Email: rmurphy@enservco.com

 

 

 

 

 

Signature Page to Credit and Security Agreement

 

 

	LENDER:   PATHWARD, NATIONAL ASSOCIATION
	By:	/s/ Andrew Carol
	Name:	Andrew Carol
	Its:	Assistant Vice President
	Address for Notice:   Pathward, National Association                            5480 Corporate Drive, Ste 350 Troy, Michigan 48098 Attention: Legal Department Tel: (248) 641-5100 Email: legalnotice@pathward.com

 

 

 

 

Signature Page to Credit and Security Agreement

 

 

 

ANNEX 1

DEFINITIONS

 

The terms below have the following meanings:

 

“Account Debtor” means any person who is obligated on any Account of a Borrower.

 

“Act” is defined in Section 12.21.

 

“Advance” means an advance of the Revolving Loan.

 

“Advance Formula” has the meaning set forth in Section 2.1(d) of the Revolving Loan Schedule.

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, (x) to vote 25%or more of the Equity Interests of such Person, or (y) to direct or cause the direction of the management or policies of such Person.

 

“Anti-Terrorism Laws” means all laws and sanctions relating to terrorism or money laundering (including Executive Order No. 13224, the USA Patriot Act (Public Law 107-56), the Bank Secrecy Act (Public Law 91-508), the Trading with the Enemy Act (50 U.S.C. Section 1 et seq.), the International Emergency Economic Powers Act (50 U.S.C. Section 1701 et seq.), and the related sanction regulations promulgated by the Office of Foreign Assets Control, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957).

 

“Availability” means, as of any date of determination, the amount that Borrowers are entitled to borrow as Revolving Loans under Section 2.1 of this Agreement.

 

“Bankruptcy Code” means Title 11 of the United States Code or any similar federal or state debtor relief laws.

 

“Beneficial Owner” means, with respect to each Loan Party: (1) each individual, if any, that, directly or indirectly, owns 25% or more of that Loan Party’s Equity Interests; and (2) a single individual with significant responsibility to control, manage, or direct that Loan Party.

 

“Beneficial Ownership Certificate” means a certificate, for each Loan Party, acceptable to Lender in its Discretion, certifying, among other things, the Beneficial Owner of each Loan Party.

 

“Business Day” means any day other than Saturday, Sunday, a legal holiday on which commercial banks are authorized or required by law to be closed in Michigan, or any other day Lender is closed for transacting business.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” is defined in Section 4.1. “Collateral” also includes all property of any Person that at any time secures any of the Obligations.         

 

 

“Covenant Compliance Certificate” means a management-prepared certificate of Borrowers signed by a Responsible Representative of Borrowers appropriately completed and in the form provided by Lender to Borrowers, if applicable.

 

“Debtor” is defined in Section 4.6(a).

 

“Debt Service Coverage Ratio” shall mean as of the date of determination, the ratio determined by a fraction, the numerator of which is the sum of Borrowers’ net income, plus, without duplication and to the extent deducted in determining such net income, (i) interest expense, (ii) income tax expense, and (iii) depreciation and amortization expense, and the denominator of which is the sum of principal and interest expense for all debt obligations.

 

“Default” means any event or circumstance that, with notice, the passage of time, or both, would be an Event of Default.

 

“Discretion” means a determination made in good faith in the exercise of Lender’s business judgment (from the perspective of a secured, asset-based lender). The burden of establishing that Lender did not act in its Discretion is on Borrowers.

 

“Electronic Signature” means any electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a party with the intent to sign such record.

 

“Eligible Accounts” means, at any time, Accounts owned by a Borrower that Lender determines in its discretion are Eligible Accounts. Without limiting Lender’s discretion, Eligible Accounts does not include any Account:

 

(a)    That is not subject to a first-priority perfected Lien in Lender’s favor;

 

(b)    That is subject to any Lien (other than a Permitted Lien that does not have priority over Lender’s Lien);

 

(c)    That is owed by an Account Debtor that is an Affiliate, officer, employee, or agent of any Borrower or has common shareholders, officers, or directors with any Borrower;

 

(d)    That is: (i) unpaid more than 90 days after the original invoice date, (ii) invoiced more than 10 days after the date of sale or service, or (iii) contains payment terms of greater than 90 days from the date of invoice;

 

(e)    That is owing by an Account Debtor which, as of the date of determination, has failed to pay 25% or more of the aggregate amount of its Accounts owing to any Borrower within 90 days since the original invoice date corresponding to such Accounts;

 

(f)    Reserved;

 

(g)    With respect to which any covenant, representation, or warranty in any Loan Document has been breached or is not true;

 

(h)    That: (i) does not arise from the sale of goods or performance of services in the ordinary course of business; (ii) is contingent upon a Borrower’s completion of any further performance (including “pre-billed” Accounts); (iii) is a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery, any repurchase or return basis, or any other similar basis; or (iv) is a cash sale (including COD) or credit card sale;

 

 

(i)    With respect to which the Account Debtor is the United States or any department, agency or instrumentality of the United States; provided, however, that an Account shall not be deemed ineligible by reason of this clause if Borrowers have completed all of the steps necessary, in the discretion of Lender, to comply with the Federal Assignment of Claims Act of 1940 (31 U.S.C. Section 3727) with respect to such Account;

 

(j)    That is owed by an Account Debtor that is any state of the United States or any city, town, municipality, county or division thereof;

 

(k)    With respect to which the Account Debtor is not a resident of the United States or Canada (provided, however, all Accounts originating from the Province of Quebec are ineligible)

 

(l)    That is owed by an Account Debtor that has admitted in writing its inability (or is generally unable) to pay its debts as they become due, is insolvent, or is the subject of a bankruptcy, receivership or similar proceeding;

 

(m)    That is owed in any currency other than U.S. Dollars;

 

(n)    That is owed by an Account Debtor that is a creditor or supplier of any Borrower, or that is otherwise subject to a potential offset, counterclaim, deduction, discount, recoupment, reserve, defense, chargeback, credit, allowance or adjustment (but ineligibility is limited to the amount thereof);

 

(o)    That represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond, or similar assurance has been issued;

 

(p)    That is evidenced by a promissory note, chattel paper, or an instrument;

 

(q)    That does not comply in all material respects with all laws and regulations imposed by any Governmental Body;

 

(r)    That is disputed; or

 

(s)    That is an Account owed by an Account Debtor that is deemed unacceptable by Lender in its discretion.

 

In determining the amount of Eligible Accounts, Lender may reduce the face amount of Accounts by (i) all accrued and actual discounts, claims, credits, pending credits, promotional program allowances, price adjustments, finance charges, or other allowances and (ii) the aggregate amount of all cash received with respect to Accounts but not yet applied by Borrowers to reduce Accounts.

 

“Environmental Laws” means all federal, state, and local environmental, land use, zoning, health, and safety laws, statutes, ordinances, and codes related to protecting the environment or governing the use, storage, treatment, generation, transportation, processing, handling, production, or disposal of Hazardous Substances.

 

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, or other equity ownership interests in a Person (and any warrants, options, or other rights entitling the holder to purchase or acquire any equity ownership interest), but excluding any debt securities convertible into any of the foregoing.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

 

“ERISA Affiliate” means any Person who for purposes of Title IV of ERISA is a member of a Borrower’s controlled group of corporations (as defined in 26 U.S.C. § 1563), or under common control with such Borrower, within the meaning of Section 414 of the Code.

 

“Event of Default” is defined in Article 9.

 

“Excluded Collateral” has the meaning set forth in the Revolving Loan Schedule.

 

“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001.

 

“Expenses” means all reasonable fees (including attorneys’ fees), costs, expenses, charges, and out-of-pocket disbursements incurred by Lender and its counsel and court costs, in any way arising from or in connection with the Loan Documents (including due to any Loan Party not performing or complying with its obligations under any Loan Document), any Collateral (including those associated with Section 4 and Section 6 of this Agreement), any Obligations, or the business relationship between Lender and any Loan Party.

 

“GAAP” means the generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and the Financial Accounting Standards Board and that are applicable to the circumstances as of the date of determination and applied on a consistent basis.

 

“Governmental Body” means any nation or government, any state or other political subdivision of a nation or government, or any entity exercising the legislative, judicial, regulatory, or administrative functions of or pertaining to a government.

 

“Guarantor” means, individually and collectively and jointly and severally, each Person that guarantees all or any Obligations, including, without limitation, the Corporate Guarantor.

 

“Guaranty” collectively means the guaranty agreements executed and delivered by the applicable Guarantor in favor of Lender, with respect to the Obligations, in each case as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time in accordance with the terms thereof.

 

“Hazardous Substance” means any Hazardous Wastes, or Toxic Substances, or related materials as used or defined in any applicable Environmental Law.

 

“Hazardous Wastes” means all waste materials regulated by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.)., the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), or applicable state law, and any other applicable federal and state laws relating to hazardous waste disposal.

 

“Indebtedness” of any Person means, as of any date, the sum, whether off-balance sheet or otherwise, of: (1) all indebtedness or liabilities of such Person for borrowed money (including, without limitation, obligations evidenced by bonds, debentures, notes, or other similar instruments); (2) obligations for the deferred purchase price of property or services; (3) obligations under letters of credit; (4) all guaranties and other contingent obligations to purchase, to supply funds, or otherwise to assure a creditor against loss; (5) obligations under capital leases; and (6) obligations secured by any Liens, whether or not the obligations have been assumed (other than Permitted Liens).

 

 

“Insolvency Proceeding” means any proceeding under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law (including assignments for the benefit of creditors or other proceedings seeking reorganization, liquidation, arrangement, or other similar relief).

 

“Lender” is defined on page 1.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim, encumbrance or other security arrangement held or asserted with respect to any asset.

 

“Liquidity” shall mean cash or short-term investments immediately available to Borrowers plus Revolving Loan Availability.

 

“Loan” means each Revolving Loan, and “Loans” means all Revolving Loans.

 

“Loan Documents” means this Agreement (including the Revolving Loan Schedule), the Note, each Guaranty, the Perfection Certificate (if applicable), each Borrowing Base Certificate (if applicable), each Covenant Compliance Certificate (if applicable), the Beneficial Ownership Certificate, the Waivers, the Subordination Agreements, and any and all other agreements, instruments, documents, including pledges, mortgages and deeds of trust, powers of attorney, consents, and all other writings before, now, or later executed by any Loan Party or delivered to Lender with respect to the transactions contemplated by any of the foregoing documents, in each case as amended from time to time in accordance with the terms thereof.

 

“Loan Party” means each Borrower, each Guarantor and each Person that grants Lender a Lien on any Collateral to secure any Obligation.

 

“Lockbox Account” means the remit-to address on all documents related to collection of the Accounts, including the lockbox address or pursuant to the wire transfer or ACH instructions set forth in Section 4.6 of the Revolving Loan Schedule.

 

“Material Adverse Effect” means a material adverse effect in or on: (1) any Loan Party’s financial condition, operational results, business, or prospects; (2) any Loan Party’s ability to pay or perform any Obligation in accordance with its terms; (3) the value of the Collateral or the priority of Lender’s Lien on any Collateral; or (4) the validity or enforceability of any Loan Document or Lender’s rights or remedies under any Loan Document.

 

“Maximum Borrowing Amount” means, at any time, an amount equal to the lesser of (1) the Maximum Revolving Loan Amount minus all Reserves that could require a cash expenditure by Lender and (2) the Advance Formula .

 

“Maximum Revolving Loan Amount” is defined in Section 3.2.

 

“Multiemployer Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which any Borrower or any ERISA Affiliate contributes or is obligated to contribute.

 

“Note” means the Revolving Note.

 

“Notice” is defined in Section 12.8.

 

 

“Obligations” means any and all loans, advances, debts, liabilities, obligations, covenants, indemnities, and duties (absolute, contingent, matured, or unmatured) owing by any one or more of the Loan Parties to Lender (or to any of its direct or indirect Subsidiaries or Affiliates) arising under any Loan Document or otherwise, of any kind or nature, present or future (including any interest accruing after maturity or the filing of any petition in bankruptcy, or the commencement of any Insolvency Proceeding relating to any Loan Party, whether a claim for post filing or post-petition interest is allowed in that proceeding), whether direct or indirect, absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, and any amendments, extensions, renewals, or increases and all Expenses Lender incurs in the documentation, negotiation, modification, enforcement, collection, or otherwise in connection with any of the preceding, and all obligations of any Loan Party to Lender to perform acts or refrain from taking any action.

 

“parent” is defined in the defined term “Subsidiary”.

 

“Perfection Certificate” means the perfection certificate completed and delivered by a Responsible Representative of Borrowers prior to Closing, if applicable.

 

“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) maintained for employees of any Borrower or any ERISA Affiliate and covered by Title IV of ERISA.

 

“Permitted Liens” means (1) Liens in favor of Lender; (2) Liens for taxes, assessments, or other charges that (x) are not delinquent or (y) are being contested in good faith by appropriate proceedings that stay the enforcement of those Liens and with respect to which proper reserves have been taken by Borrowers in accordance with GAAP (but only if these Liens have no effect on the priority of Lender’s Liens or the value of the Collateral, and a stay of enforcement of the Lien is in effect); (3) mechanics’, workers’, materialmen’s, warehousemen’s, common carriers’, landlord’s or other similar Liens arising in the ordinary course of any Borrower’s business with respect to obligations that are not due or that are being contested in good faith by the applicable Borrower; (4) Liens in favor of Libertas Funding, LLC that are reflected on the UCC-1 Financing Statement filed on September 26, 2024 with the Wyoming Secretary of State, bearing file number 20248452837, if the liens are subject to a Subordination Agreement in form and substance satisfactory to Lender in its Discretion; (5) Liens in favor of (i) InBank that are reflected on the UCC-1 Financing Statements each filed on February 7, 2020 with the Colorado Secretary of State, bearing file numbers 20202013423 and 20202013428, (ii) Liens in favor of BMO Harris Bank N.A. that are reflected on the UCC-1 Financing Statement filed on May 11, 2021 with the Wyoming Secretary of State, bearing file number 2021-19070119, and (iii) Liens in favor of Citibank Europe PLC that are reflected on the UCC-1 Financing Statement filed on July 1, 2021 with the Wyoming Secretary of State, bearing file number 2021-19487739 (but only if the principal amount secured as of the Closing Date is not increased and no additional assets become subject to the Lien); and (6) purchase money security interest liens for equipment securing Indebtedness up to an aggregate amount of $250,000.

 

“Person” means any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, institution, public benefit corporation, joint venture, entity, or Governmental Body.

 

“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) maintained for employees of any Borrower or any ERISA Affiliate.

 

“Prepayment Fee” is defined in Section 3.1 D of the Revolving Loan Schedule.

 

“Real Property” means Borrowers’ owned and leased real property.

 

 

“Reportable Event” means a reportable event (as defined in Section 4043 of ERISA), other than an event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.

 

“Reserves” means any reserves that Lender in its discretion deems necessary to maintain with respect to the Collateral or any Borrower.

 

“Responsible Representative” means a Person’s president, chief executive officer, chief financial officer, manager or authorized member (in the case of a limited liability company) or any other individual approved in writing by Lender in its Discretion.

 

“Revolving Loan” means a Loan made under Section 2.1.

 

“Revolving Loan Fee” is defined in Section 3.1 A. of the Revolving Loan Schedule.

 

“Revolving Loan Outstanding” means, at any time the aggregate amount of outstanding principal, accrued and unpaid interest, fees and costs and expenses (including reasonable attorneys’ fees) due in connection with to the Revolving Loans.

 

“Revolving Loan Schedule” means the Revolving Loan Schedule attached hereto as Exhibit A and made a part hereof.

 

“Revolving Loan Termination Date” means the date that Lender, in its discretion, demands payment of the Obligations.

 

“Revolving Note” means, individually and collectively, any and all promissory notes evidencing the Revolving Loan.

 

“Specified Balance” is defined under Section 3.1 C(a)(ii) of the Revolving Loan Schedule.

 

“Subordinated Debt Documents” means any instruments, agreements and documents evidencing or relating to any Subordinated Debt.

 

“Subordinated Debt” means all Indebtedness of Borrowers, or any of them, that is subordinated to the prior payment and satisfaction of the Obligations pursuant to a Subordination Agreement.

 

“Subordination Agreement” means any intercreditor and/or subordination agreement in form and substance satisfactory to Lender in its Discretion (i) by and between a subordinating creditor and Lender or (ii) by and among Borrowers, a subordinating Creditor and Lender, pursuant to which Subordinated Debt is subordinated to the prior payment and satisfaction of the Obligations and the Liens securing such Subordinated Debt, if any, granted by Borrowers to such subordinated creditor are subordinated to the Obligations and the Liens created hereunder and under any other Loan Document.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any Person of which Equity Interests representing more than 50% of the Equity Interests or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of that date, owned, controlled, or held, or (2) that is, as of such date, otherwise controlled, by the parent or one or more Subsidiaries of the parent.

 

“Toxic Substances” means any material that has been shown to have an adverse effect on human health or that is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. Section 2601 et seq., applicable state law, or any other present and future applicable Federal or state laws related to toxic substances, and includes asbestos, polychlorinated biphenyls (PCBs) and lead based paints.

 

 

“Tradenames” is defined in Section 5.7.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in Michigan (but if the law, perfection, or the effect of perfection or non-perfection of any Lien on any Collateral is governed by the Uniform Commercial Code in effect in a different jurisdiction, “UCC” means the Uniform Commercial Code as in effect in that other jurisdiction with respect to perfection or the effect of perfection or non-perfection).

 

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

 

“Waivers” means all landlord’s waivers, warehouseman’s waivers, creditor’s waivers, mortgagee waivers, processing facility and bailee waivers, and customs broker waivers that are executed and delivered in connection with this Agreement.

 

Exhibit 10.2

 

SECURITY AGREEMENT

(All Assets)

 

This Security Agreement (“Agreement”) is made October 23, 2024, by and between PATHWARD, NATIONAL ASSOCIATION (together with its successors and assigns, "Lender"), whose address is 5480 Corporate Drive, Suite 350, Troy, Michigan 48098 and ENSERVCO CORPORATION, a Delaware corporation, whose address is 14133 County Road 9 ½, Longmont, Colorado 80504 ("Guarantor").

 

BACKGROUND:

 

BORROWER, BUCKSHOT TRUCKING LLC, a Wyoming limited liability company ("Borrower"), is requesting a Three Million Five Hundred Thousand and 00/100 Dollars ($3,500,000.00) Revolving Loan (the “Loan”) from Lender pursuant to a Credit and Security Agreement dated of even date herewith between Lender and Borrower, including all extensions, modifications, alterations, and amendments thereof ("Credit Agreement"); and

 

As a condition to making the Loan to Borrower, Lender is requiring that Guarantor execute a Guaranty (“Guaranty”) of the Loan and any other Obligations (as defined in the Guaranty) and secure such Guaranty by granting a first lien on all of Guarantor's assets to Lender.

 

NOW, THEREFORE, for and in consideration hereof, the Guarantor agrees as follows:

 

1.    GRANT OF SECURITY INTEREST: Guarantor hereby grants to Lender a continuing security interest in the "Collateral" described in Paragraph 2 below to secure (i) the repayment of any indebtedness arising under the Guaranty, as the same may be amended, modified, altered, extended or reaffirmed, from time to time ; (ii) the repayment of the Obligations(as defined in the Guaranty), including the Loan and all other loans and advances (including all renewals and extensions thereof) to Borrower or any Guarantor; and (iii) all obligations of any and every kind and nature heretofore, now or hereafter owing to Lender from Guarantor, however incurred or evidenced (collectively, the "Liabilities") plus all interest, costs, expenses, and reasonable attorneys' fees, which may be made or incurred by Lender in the disbursement, administration, and collection of said Liabilities, and in the protection, maintenance, and liquidation of the Collateral. This Agreement will continue in effect as long as any Liabilities and any other obligations of Borrower or Guarantor to Lender are outstanding and unpaid.

 

2.    COLLATERAL: The "Collateral" covered by this Agreement is all of Guarantor's personal property, wherever located, which Guarantor now owns or shall hereafter acquire or create, immediately upon the acquisition or creation thereof, including without limitation all: (a) Accounts (including health-care insurance receivables); (b) Chattel Paper (whether tangible or electronic); (c) Inventory; (d) Goods (other than Inventory), but including Equipment; (e) Instruments, including Promissory Notes; (f) Investment Property and Securities; (g) Documents; (h) Deposit Accounts; (i) Commercial Tort Claims specifically identified by Lender; (k) money; (l) Letters of Credit and Letter of Credit Rights; (m) General Intangibles (including payment intangibles and software); (n) Supporting Obligations; and (o) to the extent not listed above as original collateral, all proceeds and products of the foregoing.

 

Terms used and not otherwise defined in this Agreement shall have the meaning given such terms in the Michigan Uniform Commercial Code. In the event the meaning of any term defined in the Michigan Uniform Code is amended after the date of this Agreement, the meaning of such term as used in this Agreement shall be that of the more encompassing of: (i) the definition contained in the Michigan Uniform Commercial Code prior to the amendment, and (ii) the definition contained in the Michigan Uniform Commercial Code after the amendment.

 

 

The parties agree that the foregoing description is meant to cover "all assets" of Guarantor.

 

3.    PERFECTION OF SECURITY INTEREST: Guarantor hereby irrevocably authorizes Lender to file financing statement(s) describing the Collateral in all public offices deemed necessary by Lender, and to take any and all actions, including, without limitation, filing all financing statements, continuation financing statements and all other documents that Lender may reasonably determine to be necessary to perfect and maintain Lender's security interests in the Collateral. Guarantor shall have possession of the Collateral, except where expressly otherwise provided in this Agreement or where Lender chooses to perfect its security interest by possession, whether or not in addition to the filing of a financing statement. Where Collateral is in the possession of a third party, Guarantor will join with Lender in notifying the third party of Lender’s security interest and obtaining an acknowledgement from the third party that it is holding the Collateral for the benefit of Lender. Guarantor will cooperate with Lender in obtaining control with respect to Collateral consisting of Deposit Accounts, Investment Property, Letter-of-Credit Rights, and Electronic Chattel Paper. Guarantor will not create any Chattel Paper without placing a legend on the Chattel Paper acceptable to Lender indicating that Lender has a security interest in the Chattel Paper. Guarantor shall pay the cost of filing or recording all financing statement(s) and other documents. Guarantor agrees to promptly execute and deliver to Lender all financing statements, continuation financing statements, assignments, certificates of title, applications for vehicle titles, affidavits, reports, notices, schedules of Accounts, designations of Inventory, letters of authority and all other documents that Lender may reasonably request in form satisfactory to Lender to perfect and maintain Lender's security interests in the Collateral. In order to fully consummate all of the transactions contemplated hereunder, Guarantor shall make appropriate entries on its books and records disclosing Lender's security interests in the Collateral.

 

4.    REPRESENTATIONS AND WARRANTIES: Guarantor represents and warrants that: (a) the Collateral is free and clear of all liens or security interests, except Lender's security interest and any Permitted Encumbrance described on Exhibit A attached hereto; (b) all Chattel Paper constituting Collateral evidences a perfected security interest in the goods covered by it free from all other liens and security interests; (c) Lender has a first priority security interest in the Collateral; (d) if Inventory is represented or covered by documents of title, Guarantor is the owner of the documents free of all liens and security interests other than Lender's security interest and warehousemen's charges, if any, not delinquent; (e) the Guarantor’s exact legal name and the address of the Guarantor’s chief executive office are as set forth in the first paragraph of this Agreement; (f) the State under which Guarantor is organized is as set forth in the first paragraph of this Agreement; (g) all Collateral consisting of Goods is located in the State where the Guarantor’s chief executive office is located except as otherwise disclosed in a schedule attached to this Agreement; (h) the Collateral, wherever located, is covered by this Agreement; (i) each Account, Chattel Paper and General Intangible constituting Collateral is genuine and enforceable against the account debtor according to its terms, and it, and the transaction out of which it arose, comply with all applicable laws and regulations, the amount represented by Guarantor to Lender as owing by each account debtor is the amount actually owing and is not subject to setoff, credit, allowance or adjustment except any discount for prompt payment, nor has any account debtor returned the goods or disputed his liability, there has been no default according to the terms of any such Collateral, and no step has been taken to foreclose the security interest it evidences or to otherwise enforce its payment; (j) the execution and delivery of this Agreement and any instruments evidencing Liabilities will not violate nor constitute a breach of Guarantor's articles of incorporation or amended and restated bylaws, or any agreement or restriction of any type whatsoever to which Guarantor is a party or is subject; (k) all financial statements and information relating to Guarantor delivered or to be delivered by Guarantor to Lender are true and correct and prepared in accordance with generally accepted accounting principles, and there has been no material adverse change in the financial condition of Guarantor since the submission of any such financial information to Lender; (l) there are no actions or proceedings which are threatened or pending against Guarantor which might result in any material adverse change in Guarantor's financial condition or which might materially affect any of Guarantor's assets; and (m) Guarantor has duly filed all federal, state, and other governmental tax returns which Guarantor is required by law to file, and will continue to file same during such time as any of the Liabilities hereunder remain owing to Lender, and all such taxes required to be paid have been paid, in full.

 

 

5.    COVENANTS: Guarantor covenants and agrees that while any of the Liabilities remain unperformed and unpaid it will: (a) preserve its legal existence and not, in one transaction or a series of related transactions, merge into or consolidate with any other entity, or sell all or substantially all of its assets; (b) not change the state where it is located; (c) neither change its name, form of business entity nor address of its chief executive office without giving written notice to Lender thereof at least thirty (30) days prior to the effective date of such change, and Guarantor agrees that all documents, instruments, and agreements demanded by Lender in response to such change shall be prepared, filed, and recorded at Guarantor's expense prior to the effective date of such change; (d) not use the Collateral, nor permit the Collateral to be used, for any unlawful purpose, whatever; (e) maintain the Collateral in first-class condition and repair; and (f) indemnify and hold Lender harmless against claims of any persons or entities not a party to this Agreement concerning disputes arising over the Collateral.

 

6.    GUARANTOR REMAINS LIABLE: Anything contained herein to the contrary notwithstanding, (a) Guarantor shall remain liable under the contracts and agreements included in the Collateral to perform all of its duties and obligations to the same extent as if this Agreement had not been executed, (b) the exercise by Lender of any of its rights under the Credit Agreement, Collateral Documents, including this Guaranty, or this Agreement shall not release the Guarantor from any of its duties or obligations under the contracts and agreements included in the Collateral and (c) Lender shall have no obligation or liability under the contracts and agreements included in the Collateral by reason of this Agreement, nor shall Lender be obligated to perform any of the obligations or duties of Guarantor thereunder or to take any action to collect or enforce any claim for payment assigned thereunder.

 

7.    INSURANCE, TAXES, ETC.: Guarantor shall (a) pay all taxes, levies, assessments, judgments and charges of any kind upon or relating to the Collateral, to Guarantor's business, and to Guarantor's ownership or use of any of its assets, income or gross receipts; (b) at its own expense, keep and maintain all of the Collateral fully insured against loss or damage by fire, theft, explosion and other risks in such amounts, with such companies, under such policies and in such form as shall be satisfactory to Lender, which policies shall expressly provide that loss thereunder shall be payable to Lender as its interest may appear (and Lender shall have a security interest in the proceeds of such insurance and may apply any such proceeds which may be received by it toward payment of Guarantor's Liabilities, whether or not due, in such order of application as Lender may determine); (c) maintain at its own expense public liability and property damage insurance in such amounts with such companies, under such policies and in such form as shall be reasonably satisfactory to Lender; and, upon Lender's request, shall furnish Lender with such policies and evidence of payment of premiums thereon. If Guarantor at any time hereafter should fail to obtain or maintain any of the policies required above or pay a premium in whole or in part relating thereto, or shall fail to pay any such tax, assessment, levy, or charge or to discharge any such lien or encumbrance, then Lender, without waiving or releasing any obligation or default of Guarantor hereunder, may at any time hereafter (but shall be under no obligation to do so) make such payment or obtain such discharge or obtain and maintain such policies of insurance and pay such premiums, and take such action with respect thereto as Lender deems advisable. All sums so disbursed by Lender, including reasonable attorneys' fees, court costs, expenses, and other charges relating thereto, shall be part of Guarantor's Liabilities, secured hereby, and payable on demand.

 

 

8.    INFORMATION: Guarantor shall permit Lender or its agents to have access to and to inspect and verify the Collateral in the name of Lender or Guarantor. Guarantor will make same available at any time for such purposes. In addition, Guarantor shall promptly supply Lender with financial and such other information concerning its affairs and assets as Lender may request from time to time.

 

9.    CARE, CUSTODY, AND DEALINGS WITH COLLATERAL. Lender shall have no liability to Guarantor with respect to Lender's care and custody of any Collateral in Lender’s possession and shall have no duty to sell, surrender, collect or protect the same or to preserve rights against prior parties or to take any action with respect thereto beyond the custody thereof, exercising that reasonable custodial care which it would exercise in holding similar interests for its own account. Lender shall only be liable for its acts of gross negligence. Lender is hereby authorized and empowered to take the following steps, either prior or subsequent to default hereunder: (a) to deal directly with issuers, entities, owners, transfer agents and custodians to effect changes in the registered name of any such Collateral, to effect substitutions and replacements thereof necessitated by any reason (including by reason of recapitalization, merger, acquisition, debt restructuring or otherwise), to execute and deliver receipts therefor and to take possession thereof; (b) to communicate and deal directly with payors of instruments (including securities, promissory notes, letters of credit, certificates of deposits and other instruments), which may be payable to or for the benefit of Guarantor at any time, with respect to the terms of payment thereof; (c) in the Guarantor's name, to agree to any extension of payment, any substitution of Collateral or any other action or event with respect to the Collateral; (d) to notify parties who have an obligation to pay or deliver anything of value (including money or securities) with respect to the Collateral to pay or deliver the same directly to Lender on behalf of Guarantor and to receive and receipt for any such payment or delivery in Guarantor's name as an addition to the Collateral; (e) to surrender renewable certificates or any other instruments or securities forming a portion of the Collateral which may permit or require reissuance, renewal or substitution at any time and to immediately take possession of and receive directly from the issuer, maker or other obligor, the substituted instrument or securities; (f) to exercise any right which Guarantor may have with respect to any portion of the Collateral, including rights to seek and receive information with respect thereto; and (g) to do or perform any other act and to enjoy all other benefits with respect to the Collateral as Guarantor could in its own name.

 

10.    DISPOSITION OF COLLATERAL. Lender does not authorize, and Guarantor agrees not to make any sales or leases of any of the Collateral, license any of the Collateral, or grant any other security interest in any of the Collateral; provided, however, that until such time as Lender shall notify Guarantor of the revocation of such power and authority, Guarantor (a) may only in the ordinary course of its business, at its own expense, sell, lease or furnish under contracts of service any of the inventory normally held by Guarantor for such purpose; (b) may use and consume any raw materials, work in process or materials, the use and consumption of which is necessary in order to carry on Guarantor's business; and (c) will at its own expense, endeavor to collect, as and when due, all accounts due with respect to any of the Collateral, including the taking of such action with respect to such collection as Lender may reasonably request or, in the absence of such request, as Guarantor may deem advisable. A sale in the ordinary course of business does not include a transfer in partial or total satisfaction of a debt. To the extent Guarantor uses any proceeds of any of the Liabilities to purchase Collateral, Guarantor’s repayment of the Liabilities shall apply on a “first-in-first-out” basis so that the portion of the Liabilities used to purchase a particular item of Collateral shall be deemed paid in the chronological order the Guarantor purchased the Collateral.

 

 

11.    DEFAULT:

 

A.    The occurrence of any of the following events without notice or demand of any kind, shall constitute a Default under this Agreement; (a) the non-payment, when due, of any amount payable on any of the Liabilities or any extension or renewal thereof or the failure to perform any agreement of Guarantor contained herein or in the Guaranty; (b) any statement, representation or warranty of Guarantor herein or in the Guaranty, or in any other writing furnished by Guarantor to Lender, at any time, is untrue in any respect as of the date made; (c) any Obligor (which term, as used herein, shall mean Guarantor or Borrower and each other party primarily or secondarily liable on any of the Liabilities) becomes insolvent or unable to pay debts as they mature or makes an assignment for the benefit of creditors, conveys any assets to a trustee for the benefit of Obligor's creditors, conveys substantially all of its assets, or any proceeding is instituted by or against any Obligor alleging that such Obligor is insolvent or unable to pay debts as they mature or a petition of any kind is filed under the Federal Bankruptcy Act by or against such Obligor; (d) entry of any final judgment, and the expiration of any appeal period related thereto, against any Obligor or order of attachment, execution, sequestration or other order in the nature of a writ is levied on the Collateral; (e) dissolution, merger, consolidation, or transfer of a substantial part of the property of any Obligor; or (f) the occurrence of any other Event of Default as set forth in the Credit Agreement.

 

B.    Upon the occurrence of a Default, the notes and all other Liabilities may (notwithstanding any provisions thereof) at the option of Lender and without demand or notice of any kind, be declared, and thereupon immediately shall become due and payable, and Lender may exercise from time to time any rights and remedies, including the right to immediate possession of the Collateral, available to it under the Credit Agreement, Collateral Documents and applicable law. Guarantor agrees to assemble, at its expense, all the Collateral at a convenient place acceptable to Lender and to pay all costs of Lender of collection of the notes and all other Liabilities, and to pay all costs of the enforcement of this Agreement, including reasonable attorneys' fees and expenses of locating the Collateral and repairing any realty or other property to which any of the Collateral may be affixed or be a part.

 

C.    If any notification of intended disposition of any of the Collateral is required by law, such notification, if mailed, shall be deemed reasonably and properly given if sent at least ten (10) days before such disposition, postage pre-paid, addressed to the Guarantor either at the address shown above or at any other address of the Guarantor appearing on the records of Lender and to such other parties as may be required by the Michigan Uniform Commercial Code. Guarantor acknowledges that Lender may be unable to effect a public sale of all or any portion of the Collateral because of certain legal and/or practical restrictions and provisions which may be applicable to the Collateral and, therefore, may be compelled to resort to one or more private sales to a restricted group of offerees and purchasers. Guarantor consents to any such private sale so made even though at places and upon terms less favorable than if the Collateral were sold at public sale. Lender shall have no obligation to clean-up or otherwise prepare the Collateral for sale. Lender may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral. Lender may specifically disclaim any warranties as to the Collateral. If Lender sells any of the Collateral upon credit, Guarantor will be credited only with payments actually made by the purchaser, received by Lender and applied to the Obligationsof the purchaser. In the event the purchaser fails to pay for the Collateral, Lender may resell the Collateral and the Guarantor shall be credited with the proceeds of sale. Lender shall have no obligation to marshal any assets in favor of the Guarantor. Guarantor waives the right to jury trial in any proceeding instituted with respect to the Collateral. Out of the net proceeds from sale or disposition of the Collateral, Lender shall retain all the Liabilities then owing to it and the actual cost of collection (including reasonable attorney fees) and shall tender any excess to Guarantor or its successors or assigns. If the Collateral shall be insufficient to pay the entire Liabilities, Guarantor shall pay to Lender the resulting deficiency upon demand. Guarantor expressly waives any and all claims of any nature, kind or description which it has or may hereafter have against Lender or its representatives, by reason of taking, selling or collecting any portion of the Collateral. Guarantor consents to releases of the Collateral at any time (including prior to default) and to sales of the Collateral in groups, parcels or portions, or as an entirety, as Lender shall deem appropriate. Guarantor expressly absolves Lender from any loss or decline in market value of any Collateral by reason of delay in the enforcement or assertion or nonenforcement of any rights or remedies under this Agreement. Guarantor agrees that Lender shall, upon the occurrence of a Default, have the right to peacefully retake any of the Collateral. Guarantor waives any right it may have in such instance to a judicial hearing prior to such retaking.

 

 

D.    GUARANTOR AGREES THAT LENDER SHALL, IN THE EVENT OF ANY DEFAULT, HAVE THE RIGHT TO PEACEFULLY RETAKE ANY OF THE COLLATERAL, GUARANTOR WAIVES ANY RIGHT IT MAY HAVE, IN SUCH INSTANCE, TO A JUDICIAL HEARING PRIOR TO SUCH RETAKING.

 

12.    GENERAL: Time shall be deemed of the very essence of this Agreement. Except as otherwise defined in this Agreement, all terms in this Agreement shall have the meanings provided by the Michigan Uniform Commercial Code. Lender shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if it takes such action for that purpose as Guarantor requests in writing, but failure of Lender to comply with any such request shall not of itself be deemed a failure to exercise reasonable care, and failure of Lender to preserve or protect any rights with respect to such Collateral against any prior parties or to do any act with respect to the preservation of such Collateral not so requested by Guarantor shall not be deemed a failure to exercise reasonable care in the custody and preservation of such Collateral. Any delay on the part of Lender in exercising any power, privilege or right hereunder, or under any other instrument executed by Guarantor to Lender in connection herewith shall not operate as a waiver thereof, and no single or partial exercise thereof, or the exercise of any other power, privilege or right shall preclude other or further exercise thereof, or the exercise of any other power, privilege or right. The waiver by Lender of any Default by Guarantor shall not constitute a waiver of any subsequent defaults, but shall be restricted to the default so waived. If any part of this Agreement shall be contrary to any law which Lender might seek to apply or enforce, or should otherwise be defective, the other provisions of this Agreement shall not be affected thereby, but shall continue in full force and effect. All rights, remedies and powers of Lender hereunder are irrevocable and cumulative, and not alternative or exclusive, and shall be in addition to all rights, remedies and powers given hereunder or in or by any other instruments or by the Michigan Uniform Commercial Code, or any laws now existing or hereafter enacted.

 

This Agreement has been delivered in Michigan, and shall be construed in accordance with the laws of the State of Michigan. Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. The rights and privileges of Lender hereunder shall inure to the benefit of its successors and assigns and this Agreement shall be binding on all heirs, executors, administrators, assigns and successors of Guarantor.

 

13.    COUNTERPARTS: This Security Agreement may be executed in several counterparts, and each executed counterpart shall constitute an original instrument, but such counterparts shall together constitute but one and the same instrument.

 

14.    ENTIRE AGREEMENT: Guarantor acknowledges that this is the entire Agreement between the parties except to the extent that writings signed by the party to be charged are specifically incorporated herein by reference either in this Agreement or in such writings, and acknowledges receipt of a true and complete copy of this Agreement.

 

 

15.    ELECTRONIC SIGNATURE: Guarantor agrees that its Electronic Signature affixed to this Agreement, any of the other Loan Documents (as defined in the Credit Agreement), and to any amendment, supplement or other modification to such Loan Documents, or any other document or instrument delivered by Guarantor in connection with the Loan Documents or any of the transactions contemplated thereby is intended to authenticate such writing and shall have the same force and effect as if it had been manually signed and physically delivered by such party. Upon request, Guarantor agrees to provide a manually executed counterpart of any Loan Document, including, without limitation, this Agreement, or other applicable document related to the Loan Documents previously executed by Electronic Signature. “Electronic Signature” means any electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a party with the intent to sign such record.

 

 

[SIGNATURE PAGE TO FOLLOW]         

 

 

IN WITNESS WHEREOF, the parties hereto execute this Agreement on the date and year first written above.

 

 

	GUARANTOR:   ENSERVCO CORPORATION, a Delaware corporation
	By:	/s/ Richard A. Murphy
	Name:	Richard A. Murphy
	Title:	Chief Executive Officer

 

 

	LENDER:   PATHWARD, NATIONAL ASSOCIATION
	By:	/s/ Andrew Carol
	Name:
	Title:	Assistant ViAndrew Carolce President

 

 

[Signature Page to Security Agreement]

 

 

 

EXHIBIT A

 

PERMITTED ENCUMBRANCES

 

1.

Liens in favor of C T Corporation System, as representative, evidenced by that UCC-1 Financing Statement filed on August 16, 2024, bearing UCC file number 20245660863.

Exhibit 10.3

 

REVOLVING NOTE

 

 

Principal Amount $3,500,000.00	Troy, Michigan
Dated:	October 23, 2024

 

 

FOR VALUE RECEIVED, BUCKSHOT TRUCKING LLC, a Wyoming limited liability company ( “Borrower”), promises to pay to the order of PATHWARD, NATIONAL ASSOCIATION (together with its successors and assigns, “Lender"), ON DEMAND, at its offices located at 5480 Corporate Drive, Suite 350, Troy, Michigan 48098 or at such other place as Lender or the person that then holds this Note designates in writing, the principal amount set forth above or such lesser or greater amount as may then be due under the Credit Agreement (as defined below), plus interest, fees and expenses as hereinafter provided. All payments must be made in lawful money of the United States of America in immediately available funds. Borrower does not have any right to offset, deduction, or counterclaim from the amount due.

 

This Revolving Note (“Note”) is referred to in and was delivered pursuant to the Credit and Security Agreement (as amended, restated or otherwise modified from time to time, the “Credit Agreement”) as of even date herewith between Borrower and Lender under which Advances, repayment and further Advances may be made from time to time, pursuant to the provisions of the Credit Agreement. Reference is made to the Credit Agreement for additional terms relating to this Note and the security given for this Note. Any capitalized terms used in this Note, if not defined in this Note, will have the meanings assigned to such terms in the Credit Agreement.

 

The outstanding principal balance of this Note will bear interest based upon a year of 360 days with interest being charged for each day the principal amount is outstanding including the date of actual payment. The interest rate will be a rate which is equal to 2.5% in excess of the Wall Street Journal Prime Rate (the “Effective Rate”). The term “Wall Street Journal Prime Rate” means that rate of interest reported in the Wall Street Journal as the Prime Rate, as such rate may vary from time to time. Interest on this Note will change with each change in the Wall Street Journal Prime Rate so published. If at any time Lender either abandons the use of the Wall Street Journal Prime Rate or the Wall Street Journal Prime Rate is no longer published, then Lender will establish a similar replacement rate in its sole discretion. Notwithstanding the foregoing, at no time will the Effective Rate be less than 8.0% per annum.

 

Borrower must pay interest on the principal amount which is outstanding each month in arrears commencing on the first day of the month following the funding of the transaction, and continuing on the first day of each month thereafter until the Obligations under the Revolving Loan are fully paid. If the Credit Agreement so provides, interest will also be payable at the same rate on all other sums constituting Obligations under the Revolving Loan. Any payment due on a day that is not a Business Day shall be made on the next Business Day. Payments will be applied in the manner provided in the Credit Agreement. If Borrower at any time pays less than the amount then due, Lender may accept such payment, but the failure to pay the entire amount due is an Event of Default. Upon the occurrence of an Event of Default, Lender will be permitted to charge the Default Rate. The “Default Rate” shall mean the Effective Rate plus 5.00% per annum.

 

Should Borrower make any payment by mail, the payment must be actually received by Lender before the payment is credited but payment is still subject to the terms set forth in Article 2 of the Credit Agreement. Borrower assumes all risk resulting from non-delivery or delay, in delivery of any payment no matter how the payment is delivered.

 

 

If Borrower elects to prepay this Note and/or terminate the Credit Agreement, Borrower may do so, but only upon payment of all the Obligations under the Loans, including the Prepayment Fee set forth in the Agreement.

 

It is the intent of the parties that the rate of interest and other charges to Borrower under this Note shall be lawful; therefore, if for any reason the interest or other charges payable hereunder are found by a court of competent jurisdiction, in a final determination, to exceed the limit Lender may lawfully charge Borrower, then the obligation to pay interest or other charges shall automatically be reduced to such limit and, if any amount in excess of such limit shall have been paid, then such amount shall be credited to the outstanding principal balance of this Note, or if no such amount is outstanding, refunded to Borrower.

 

Borrower waives any obligation of Lender to present this Note for payment or to give any notice of nonpayment or notice of protest and any other notices of any kind. The liability of the Borrower is absolute and unconditional, without regard to the liability of any other party.

 

If this Note is signed by two or more parties, the term “Borrower” means each Borrower individually as well as all of the Borrowers together. Each Borrower shall be jointly and severally liable for all amounts due and payable under this Note and for all obligations under the Credit Agreement, as further described in the Credit Agreement.

 

Borrower agrees that its Electronic Signature affixed to this Note, any of the other Loan Documents, and to any amendment, supplement or other modification to such Loan Documents, or any other document or instrument delivered by Borrower in connection with the Loan Documents or any of the transactions contemplated thereby is intended to authenticate such writing and shall have the same force and effect as if it had been manually signed and physically delivered by such party. Upon request, Borrower agrees to provide a manually executed counterpart of any Loan Document, including, without limitation, this Note, or other applicable document related to the Loan Documents previously executed by Electronic Signature.

 

In the event it is determined that this Note is governed by Article 3 of the Uniform Commercial Code, Borrower acknowledges and agrees that this Note is an effective, enforceable and valid Transferable Record. A “Transferable Record” means an electronic record that (i) would be a note under Article 3 of the Uniform Commercial Code if the electronic record were in writing, and (ii) Borrower, as the issuer, has agreed is a transferable record.

 

 

	BORROWER:
	BUCKSHOT TRUCKING LLC, a Wyoming limited liability company
	By: /s/ Richard A. Murphy
	Name: Richard A. Murphy Its: Chief Executive Officer

 

Exhibit 10.4

 

GUARANTY

 

This Guaranty ("Guaranty") is made on October 23, 2024, by ENSERVCO CORPORATION, a Delaware corporation ("Guarantor") whose mailing address is 14133 County Road 9 1/2, Longmont, Colorado 80504, in favor of PATHWARD, NATIONAL ASSOCIATION (together with its successors and assigns, "Lender") whose mailing address is 5480 Corporate Drive, Suite 350, Troy, Michigan 48098 to induce Lender to make a loan and/or extend or continue credit to BUCKSHOT TRUCKING LLC, a Wyoming limited liability company (the "Borrower") and because Guarantor, whose economic success is vitally linked to Borrower's success, has determined that executing and delivering this Guaranty is in Guarantor’s interest and to Guarantor’s financial benefit.

 

1.    Guaranty. Guarantor hereby absolutely, irrevocably and unconditionally guarantees to Lender: (a) the full, prompt and unconditional payment when due of all existing and future obligations of the Borrower to Lender (“Obligations”), including but not limited to all indebtedness of Borrower under the Credit and Security Agreement between Lender and Borrower (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), and all principal, interest and fee under any and all related notes, as they may be amended or restated and whether on demand, a maturity, pursuant to mandatory or optional prepayments, by acceleration or otherwise; and (b) the punctual and faithful performance and observation by Borrower of all duties, agreements, covenants, representations and obligations of Borrower contained in the Loan Documents (as defined Section 3).

 

2.    Absolute, Unconditional and Continuing Obligation. This Guaranty is an absolute, continuing, unconditional, unlimited and irrevocable guaranty. Guarantor will not be relieved from any obligations under this Guaranty until this Guaranty is terminated in accordance with Section 13. The obligations and liabilities of Guarantor will continue notwithstanding any defect in the genuineness, validity or enforceability of the Obligations or the Loan Documents, or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of the liabilities of a surety or guarantor or which might otherwise limit recourse against Guarantor. This is a guarantee of payment and not of collection.

 

3.    The Loan Documents. The Credit Agreement, all related notes, and all other related documents now existing or hereafter arising and executed in connection with the Credit Agreement, including all amendments and restatements thereto are collectively referred to as the "Loan Documents". Any capitalized terms not otherwise defined in this Guaranty shall have the meanings ascribed to them in the Loan Documents.

 

4.    Continuation of Liability. The liability and obligations of Guarantor will in no way be affected, impaired, diminished or released by (a) any amendment, restatement, alteration, extension, renewal, waiver indulgence, extension of time regarding performance or other modification of the Loan Documents or the Obligations contained therein; (b) any settlement or compromise in connection with the Obligations; (c) any subordination of payments under the Loan Documents to any other debt or claim; (d) any substitution, exchange, release or other disposition of all or any part of the Obligations or the collateral securing the Obligations; (e) any failure, delay, neglect, or omission to act by Lender in connection with the Obligations; (f) any advances for the purpose of performing any covenant or agreement of Borrower, or curing any breach or violation of the Loan Documents; (g) the filing by or against Borrower of bankruptcy, insolvency, reorganization or other debtor's relief afforded Borrower pursuant to the present or future provisions of the Bankruptcy Code or any other state or federal statute or by the decision of any court; or (h) any other matter whether similar or dissimilar to the foregoing.

 

 

5.    Unconditional Waiver of all Defenses. Guarantor unconditionally, absolutely and irrevocably waives each and every defense, which under principles of guaranty or suretyship law would otherwise operate to impair or diminish the liability of Guarantor for the Obligations. Without limiting the generality of the foregoing waiver, Guarantor agrees that none of the following acts, omissions or occurrences will diminish or impair the liability of Guarantor in any respect, and Guarantor waives: (a) notice of acceptance of this Guaranty and of the creation of additional Obligations; (b) presentment and demand for payment of any Obligations; (c) protest, notice of protest, and notice of dishonor or default to Guarantor or to any other party with respect to the Obligations; (d) all other notices to which Guarantor might otherwise be entitled; (e) any defense of Borrower; (f) any rights to extension, composition or otherwise under the Bankruptcy Code or any amendments thereof, or under any state or other federal statute; and (g) any right or claim or claim of right to cause a marshalling of Borrower's assets, and it is agreed that Lender shall be under no duty to marshal the assets of Borrower for Guarantor's benefit or the benefit of any third party. No notice to or demand on Guarantor shall be deemed to be a waiver of the obligation of Guarantor or of the right of Lender to take further action without notice or demand as provided herein. No modification or waiver of the provisions of this Guaranty will be effective unless in writing, nor shall any such waiver be applicable except in the specific instance for which it is given.

 

6.    Immediate Recourse/Exercise of Rights by Lender. At any time when the Obligations, or any portion thereof, has not been paid when due (whether by acceleration or otherwise), Lender can require that Guarantor pay Lender the amounts owing on this Guaranty immediately. Lender is not required to collect first from Borrower, any collateral, any other guarantor, or any other person. No delay or stay in any acceleration of the Obligations, as against the Borrower, due to the application of any bankruptcy, insolvency or other law or proceeding will be effective under this Guaranty, and Guarantor agrees to immediately pay the amount of the Obligations that would be due and payable but for such delay or stay. All rights, powers, and remedies of Lender hereunder and under the Loan Documents are cumulative and not alternative and shall be in addition to all rights, powers, and remedies given to Lender by law and by agreement.

 

7.    Subordination/Subrogation. In the event that Guarantor advances or becomes obligated to pay any sums to Borrower, or in the event that Borrower or any subsequent owner of any collateral pledged as security for the Obligations is now or hereafter becomes indebted to Guarantor, the amount of such Obligations will at all times be subordinate as to lien, time of payment and all other respects, to the amounts owing to Lender by Borrower with regard to the subject property or any right to participate in any way therein or in the right, title or interest of Lender in such property, all rights of subrogation and participation being hereby expressly subordinated as aforesaid. Guarantor hereby absolutely, irrevocably and unconditionally waives all rights Guarantor may have, at law or in equity to seek or claim subrogation (including any right of subrogation hereafter arising against Borrower resulting from a right of contribution from any other guarantor), contribution, indemnification, or any other form of reimbursement from Borrower or from any other guarantor by virtue of any payment(s) made to Lender under this Guaranty or otherwise, until the Obligations is irrevocably paid in full in cash. Guarantor acknowledges and agrees with Lender that if Lender is at any time required to return or restore to Borrower or to any trustee in bankruptcy, any payment(s) made upon the Obligations, this Guaranty shall continue in full force and effect or shall be fully reinstated, as the case may be, and Guarantor's obligations to Lender under this Guaranty shall be increased by the amount of any such payment(s), plus interest thereon from the date(s) the payments(s) were originally made. Guarantor agrees to indemnify and hold Lender harmless from and against any and all costs, fees and expenses including, without limitation, reasonable attorney fees, in connection with Lender's defending any preference or fraudulent conveyance claim or action brought against Lender in any bankruptcy proceeding concerning Borrower, Guarantor or any other guarantor. Lender has no duty to enforce or protect any rights which the Guarantor may have against Borrower or any other person, and Guarantor assumes full responsibility for enforcing and protecting such rights.

 

 

8.    Representations and Warranties. Guarantor represents, warrants and covenants to Lender that, as of the date of this Guaranty: (a) the fair stable value of Guarantor’s assets exceed its liabilities; (b) Guarantor is meeting its current liabilities as they mature, (c) it is duly organized, validly existing and in good standing under the laws of the state in which it is organized and qualified to do business in all states where it conducts business; (d) the execution and delivery of this Guaranty and the performance of the obligations under this Guaranty are within Guarantor's powers, have been duly authorized by all necessary action and do not contravene its articles of incorporation or amended and restated bylaws; (e) Guarantor has completely read and understands the Loan Documents, agrees to all those terms and provisions therein which apply to Guarantor and Guarantor acknowledges that it is a “Guarantor” as defined in the Credit Agreement; (f) Guarantor was provided an opportunity to review the Loan Documents with its legal counsel; (g) any financial statements of Guarantor furnished to Lender are true and correct and include all contingent liabilities of Guarantor; (h) since the date of any financial statements furnished to Lender, no material adverse change has occurred in the financial condition of Guarantor; (i) there are no pending or threatened material court or administrative proceedings or undischarged judgments against Guarantor, and no federal or state tax liens have been filed or threatened against Guarantor; and (j) Guarantor is not in default or claimed default under any agreement for borrowed money. Guarantor agrees to immediately give Lender written notice of any material adverse change in its financial condition

 

9.    Expenses. Guarantor agrees to pay all expenses (including attorneys’ fees) incurred by Lender in connection with the enforcement of Lender’s rights under the Loan Documents this Guaranty, and the collection of the Obligations.

 

10.    Transfer of Assets. Guarantor further agrees that until the Obligations is indefeasibly paid in full in immediately available funds, Guarantor will not, without Lender’s prior written consent: (i) make any voluntary transfer of any of Guarantor's asse which would have the effect of materially diminishing Guarantor's present net worth, or (ii) guaranty the debts or obligations of any other person or entity .

 

11.    Reinstatement. This Guaranty will continue to be effective or will be automatically reinstated, as the case may be, if at any time payment of all or part of the Obligations is rescinded or must otherwise be restored or returned by Lender, including in connection with Borrower’s bankruptcy or insolvency.

 

12.    Assignability/Binding Effect. This Guaranty shall be assignable (through sales, participations or otherwise) by Lender without notice to Guarantor and shall inure to the benefit of Lender and to any subsequent successors and assigns. This Guaranty shall be binding upon Guarantor and any of its estates, heirs, successors and assigns, provided however, that Guarantor may not assign or transfer any of its obligations under this Guaranty without the prior written consent of Lender.

 

13.    Termination. Notwithstanding anything contained herein to the contrary, the liability of Guarantor will be terminated only in the event that (i) Borrower or Guarantor has indefeasibly paid Lender the Obligations in full in immediately available funds, and (ii) the Credit Agreement is terminated.

 

14.    Severability. If any provision of this Guaranty is in conflict with any statute or rule of law or is otherwise unenforceable for any reason, then that provision will be deemed null and void to the extent of the conflict or unenforceability and will be deemed severable, but it will not invalidate any other provision of this Guaranty.

 

 

15.    Complete Agreement. This Guaranty is the final, complete and exclusive expression of the agreement between Guarantor and Lender with respect to the subject matter of this Guaranty. This Guaranty cannot be modified or amended except in a writing signed by both Guarantor and Lender.

 

16.    Governing Law; Jurisdiction; Venue. This Guaranty shall be governed by the laws of the State of Michigan, without regard to any conflict of laws provision. GUARANTOR AGREES THAT ANY ACTION TO ENFORCE BORROWER’S OR GUARANTOR’S OBLIGATIONS TO LENDER SHALL BE PROSECUTED EITHER IN THE CIRCUIT COURT OF OAKLAND COUNTY MICHIGAN OR THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN (UNLESS LENDER, IN ITS SOLE DISCRETION, ELECTS SOME OTHER JURISDICTION), AND GUARANTOR SUBMITS TO THE JURISDICTION OF ANY SUCH COURT SELECTED BY LENDER. GUARANTOR WAIVES ANY AND ALL RIGHTS TO CONTEST THE JURISDICTION AND VENUE OF ANY ACTION BROUGHT IN THIS MATTER AND GUARANTOR MAY BRING ANY ACTION AGAINST LENDER ONLY IN THE CIRCUIT COURT FOR THE COUNTY OF OAKLAND OR THE FEDERAL COURT OR THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN.

 

17.    WAIVER OF JURY TRIAL. GUARANTOR KNOWINGLY AND VOLUNTARILY, AND FOR ITS BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS GUARANTY OR THE OBLIGATIONS. GUARANTOR ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO REVIEW THE EFFECT OF THIS PROVISION WITH COUNSEL OF THEIR CHOICE.

 

18.    Notice. Any notice given pursuant to this Guaranty is effective if sent in writing or facsimile with confirmation of receipt or by certified mail or personal delivery or expedited mail services to the addresses shown above or such other address that may subsequently designated by Guarantor or Lender.

 

19.    Joint and Several Liability. The term “Guarantor” shall mean each person executing this Guaranty, each individually and together collectively, and the obligations of Guarantor and any other guarantor executing a guaranty, including in connection with the Loan will be joint and several.

 

20.    Electronic Signature. Guarantor agrees that its Electronic Signature affixed to this Guaranty, any of the other Loan Documents, and to any amendment, supplement or other modification to such Loan Documents, or any other document or instrument delivered by Guarantor in connection with the Loan Documents or any of the transactions contemplated thereby is intended to authenticate such writing and shall have the same force and effect as if it had been manually signed and physically delivered by such party. Upon request, Guarantor agrees to provide a manually executed counterpart of any Loan Document, including, without limitation, this Guaranty, or other applicable document related to the Loan Documents previously executed by Electronic Signature.

 

 

[SIGNATURE PAGE TO FOLLOW]

 

 

The Guarantor executes this Guaranty as of the day and year first above written.

 

 

	ENSERVCO CORPORATION, a Delaware corporation
	By:	/s/ Richard A. Murphy
	Name: Richard A. Murphy
	Its: Chief Executive Officer

 

 

[Signature page to Guaranty]

 

v3.24.3

Document And Entity Information	Oct. 23, 2024
Document Information [Line Items]
Entity, Registrant Name	Enservco Corporation
Document, Type	8-K
Document, Period End Date	Oct. 23, 2024
Entity, Incorporation, State or Country Code	DE
Entity, File Number	001-36335
Entity, Tax Identification Number	84-0811316
Entity, Address, Address Line One	14133 County Road 9½
Entity, Address, City or Town	Longmont
Entity, Address, State or Province	CO
Entity, Address, Postal Zip Code	80504
City Area Code	303
Local Phone Number	333-3678
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	ENSV
Security Exchange Name	NYSE
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000319458

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