Document:

ex_444907.htm

Exhibit 10.1

 

 

NOTE EXCHANGE AGREEMENT

 

This Note Exchange Agreement (the “Agreement”) is dated and made effective as of November 3, 2022(the “Effective Date”), by and between Enservco Corporation, a Delaware corporation (the “Company”) and Cross River Partners, LP, a Delaware limited partnership (“Cross River”). (collectively, the “Parties”).

 

INTRODUCTION

 

A.         In exchange for a $750,000 revolving credit facility, the Company issued a Revolving Promissory Note to Cross River in principal amount of $750,000 dated September 22, 2022 (the “Revolving Note”).

 

B.         As of the Effective Date, the outstanding principal balance of the Revolving Note is $750,000 (the “Existing Advances”) and Company requires additional capital to fund operations at the beginning of its peak season;

 

C.         The Company desires to borrow, and Cross River is willing to lend, an additional $450,000 (the “Additional Principal Advance”) on the terms provided in this Agreement; and

 

D.         The parties desire to exchange the Revolving Note and borrow/lend the Additional Principal Amount for a Convertible Secured Subordinated Promissory Note in the original principal amount of $1,200,000.00 (the “Exchange Note”) and a warrant to acquire Company common stock as provided herein

 

 

AGREEMENT

 

Now, Therefore, the Parties hereby agree as follows:

 

1.    Note Exchange. Effective as of the Effective Date, Cross River hereby a) delivers the Revolving Note to the Company and b) advances the Additional Principal Advance in exchange for: (a) the Exchange Note in the form attached hereto as Exhibit A (delivered in replacement of the Revolving Note) and (b) warrants to acquire shares of Company common stock in the form attached hereto as Exhibit B (the “Warrants”) in exchange for the Company’s contemporaneous execution and delivery of the(a) Exchange Note (evidencing the Existing Advances and the Additional Principal Advance) and (b) the Warrants.

 

2.    Collateral. As a condition subsequent to Cross River’s loan evidenced by the Revolving Note, Company agreed to deliver (or cause its affiliate to deliver) a mortgage (the “Revolving Mortgage”) on certain real property located in North Dakota to secure the Company’s obligations under the Revolving Note. The Revolving Mortgage has not been recorded as of the date of this Agreement. In consideration of the Existing Advances and the Company’s ongoing obligation to deliver the Revolving Mortgage, and Cross River’s willingness to make the Additional Principal Advance, the Company hereby agree to execute a new mortgage to secure amounts evidenced by the Exchange Note (including the Existing Advances and the Additional Principal Advance. The Company shall use best efforts to have such mortgage filed within 30 days of the date of the Effective Date.

 

3.    Cross River Representations. Cross River hereby represents and warrants to the Company that: (a) the recitals set forth in the Introduction above, are true and correct in all respects; (b) the execution, delivery and performance of this Agreement by Cross River does not conflict with any other agreement binding upon Cross River and this Agreement represents the valid and binding obligation of Cross River, enforceable in accordance with its terms; and (c) Cross River is the record and beneficial owner of the Revolving Note and has the full power, authority and capacity to transfer the Revolving Note free and clear of any liens, pledges, security interests, restrictions of transfer or encumbrances of any kind or nature.

 

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4.    Company Representations. The Company hereby represents and warrants to Cross River that: (a) the recitals set forth in the Introduction above, are true and correct in all respects; (b) the execution, delivery and performance of this Agreement by each of the Company does not conflict with any other agreement binding upon the Company, and this Agreement represents the valid and binding obligation of the Company, enforceable in accordance with its terms; (c) the Company has the requisite power and authority to enter into this Agreement and to carry out its respective obligations hereunder; and (c) the Company represents that the Warrant and shares of Company Common Stock when issued pursuant to the Warrant shall be validly issued, duly authorized and non-assessable.

 

5.    General Provisions.

 

(a)    This Agreement constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the Parties with respect to the subject matter hereof. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by all Parties. This Agreement may not be assigned.

 

(b)    The laws of the State of New York will govern the validity, construction and performance of this Agreement without regard to its conflicts-of-law principles. Any legal proceeding related to this Agreement will be brought in an appropriate New York court, and Cross River and the Company hereby consent to the exclusive jurisdiction of such State’s courts for this purpose.

 

(c)    Wherever possible, each provision of this Agreement will be interpreted so that it is valid under the applicable law. If any provision of this Agreement is to any extent invalid under the applicable law, that provision will still be effective to the extent it remains valid. The remainder of this Agreement also will continue to be valid, and the entire Agreement will continue to be valid in other jurisdictions.

 

(d)    This Agreement may be executed in counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument. A facsimile or other electronic transmission of this signed Agreement shall be legal and binding on the Parties.

 

 

[Signature Page Follows]

 

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In Witness Whereof, the undersigned have executed this Agreement to be effective as of the Effective Date.

 

 

ENSERVCO CORPORATION,

a Delaware corporation

 

 

 

By:          /s/ Mark Patterson                                             

Mark Patterson, its Chief Financial Officer

 

 

CROSS RIVER PARTNERS, LP

a Delaware limited partnership

 

 

By:          Richard Murphy                                             

 

Its:           Managing Partner                                             

 

3ex_444908.htm

Exhibit 10.2

 

CONVERTIBLE SECURED SUBORDINATED PROMISSORY NOTE

 

	$1,200,000.00	November 3, 2022

         

FOR VALUE RECEIVED, Enservco Corporation, a Delaware corporation (“Borrower”), promises to pay to the order of Cross River Partners, LP, a Delaware limited partnership (“Holder”), the original principal sum of ONE MILLION TWO HUNDRED THOUSAND DOLLARS AND NO CENTS ($1,200,000.00), or such other amount as shall then be equal to the outstanding principal amount hereof, in the manner provided in this Promissory Note (this “Note”).

 

1.            Loan.This Note is issued pursuant to that certain Note Exchange Agreement by and between Borrower and Holder dated November 3, 2022 and reflects a) the exchange of the Revolving Note in principal amount of $750,000 issued September 22, 2022 and b) the loan of $450,000 made by Holder to Borrower via wire on or about November 3, 2022.

 

2.             Interest. This Note shall bear interest of Ten (10) percent per annum.

 

3.             Maturity Date. November 3, 2024 unless sooner converted or prepaid.

 

4.          Payment of Principal and Interest; Maturity. Interest only payments shall be required on a quarterly basis, starting March 30, 2023 and following on the last business day of each calendar quarter. Interest shall be payable at the option of the Borrower in cash or in Borrower common stock issued at a conversion price of $2.11 per share. Any outstanding principal and interest due on the Maturity Date (or on the business day prior to Maturity Date if the Maturity Date is a bank holiday).

 

5.           Security Interest. Borrower shall grant to Lender a mortgage in certain real property located in North Dakota to secure Borrower’s obligations under this Note. Borrower shall use best efforts to have such mortgage filed within 30 days of the date of this note.

 

6.            Optional Conversion to Common Stock. Subject to any required Borrower stockholder consent as required by the exchange upon which Borrower common stock is then listed, all or some of the outstanding principal and accrued but unpaid interest of this Note, may converted to Borrower common stock at the option of the Holder at a per share conversion price equal to the lower of a) $2.11 per share or b) the per share price Borrower receives for its common stock in the next subsequent equity offering in excess of $2.0 million.

 

7.             Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

 

	 	
			a.

				
			Failure to Pay. The failure of the Borrower to (i) timely pay the Holder hereof any payment of interest, principal or other amounts as and when due hereunder, or (ii) pay the Holder hereof the entire amount of any unpaid principal amount plus any other amounts owed but unpaid hereunder upon Maturity Date.

			

 

	 	
			b.

				
			Voluntary Bankruptcy or Insolvency Proceedings. Should Borrower (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of it or of all or a substantial part of its property; (ii) make a general assignment for the benefit of its creditors; or (iii) commence a voluntary case or any other proceeding seeking liquidation, reorganization or other relief with respect to either Borrower or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in any involuntary case or other proceeding commenced against it.

			

 

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			c.

				
			Involuntary Bankruptcy or Insolvency Proceedings. Should proceedings for the appointment of a receiver, trustee, liquidator or custodian of Borrower or of all or a substantial part of the property of Borrower, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to Borrower or the debts of Borrower under any bankruptcy, insolvency or other similar law, now or hereafter in effect, be commenced and not dismissed or discharged within sixty (60) days of commencement.

			

 

	 	
			d.

				
			Merger and Other Changes. Without the written consent of Holder, should Borrower merge or consolidate with or into, or convey, transfer, lease, or otherwise dispose of, whether in on transaction or in a series of transaction, all or substantially all of the property and assets (whether now owned or hereafter acquired) of Borrower to, any person, or should there be a change in the holders of a majority of the voting control of Borrower, whether directly or indirectly.

			

 

8.           Rights of Holder Upon Default. Upon the occurrence or existence of any Event of Default, and after any required notice, or at any time thereafter, Holder immediately may declare all outstanding obligations payable by Borrower hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right, power or remedy granted to it or otherwise permitted to it under this Note, the Security Agreement or by law (either by suit in equity or by action at law, or both).

 

9.               Prepayment. Borrower may prepay this Note without penalty in whole or in part at any time.

 

10.           Successors and Assigns. The rights and obligations of Borrower and Holder under this Note shall be binding upon and benefit the successors, assigns and transferees of the parties. This Note may not be assigned by the Borrower without the prior written consent of Holder. All references in this Note to the “Borrower” and the “Holder” shall be deemed to apply to the Borrower and the Holder, respectively, and to their respective successors and assigns.

 

11.             Waiver and Amendment. Any provision of this Note may only be amended, waived or modified upon the written consent of the Borrower and the Holder.

 

12.            Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to the conflicts of law provisions of the State of Colorado or of any other state.

 

13.           Miscellaneous.

 

	 	
			a.

				
			Borrower:

			

 

	 	
			i.

				
			Waives diligence, presentment, demand for payment, notice of dishonor, notice of non-payment, protest, notice of protest, and any and all other demands in connection with the delivery, acceptance, performance, default or enforcement of this Note;

			

 

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			ii.

				
			Waives the benefit of any statute of limitations to the maximum extent permitted by law with respect to any action to enforce this Note and any other action related to this Note;

			

 

	 	
			iii.

				
			Agrees that no failure on the part of Holder to exercise any power, right or privilege hereunder, or to insist upon prompt compliance with the terms of this Note, will constitute a waiver of that power, right or privilege; and

			

 

	 	
			iv.

				
			Agrees that the acceptance at any time by Holder of any past due amounts will not be deemed to be a waiver of the requirement to make prompt payment when due of any other amounts then or hereafter due and payable.

			

 

	 	
			b.

				
			THE INDEBTEDNESS EVIDENCED BY THIS NOTE SHALL BE JUNIOR AND SUBORDINATE TO INDEBTEDNESS WHICH BORROWER MAY NOW OR AT ANY TIME HEREAFTER OWE TO ANY LENDER, WHETHER SUCH INDEBTEDNESS NOW EXISTS OR IS HEREAFTER CREATED OR INCURRED, AND WHETHER SUCH INDEBTEDNESS IS FIXED OR CONTINGENT, LIQUIDATED OR UNLIQUIDATED. IN FURTHERANCE HEREOF AND CONSISTENT WITH THIS COVENANT OF SUBORDINATION, HOLDER WILL ENTER INTO WRITTEN SUBORDINATION AGREEMENTS FOR THE BENEFIT OF ANY SUCH LENDERS AS AND WHEN REQUESTED BY SUCH LENDERS; PROVIDED THAT SUCH LENDERS AGREE IN SUCH SUBORDINATION AGREEMENT THAT BORROWER MAY CONTINUE TO PAY ALL AMOUNTS DUE AND PAYABLE UNDER THIS NOTE IF AT THE TIME OF SUCH PAYMENT NO DEFAULT EXISTS OR WILL EXIST AS A RESULT OF SUCH PAYMENT UNDER ANY AGREEMENTS WITH SUCH LENDERS.

			

 

IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures to this Note effective as of the date first set forth above.

 

 

	
			 

				
			ENSERVCO CORPORATION

				
			 

			
	
			 

				
			 

				 	
			 

				
			 

			
	
			 

				
			By: 

				 	
			/s/ Mark Patterson 

				
			 

			

	 	Name: Mark Patterson
	 	Title: Chief Financial Officer

 

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