Vivakor, Inc 8-K/A, filed Nov 15, 2024
Vivakor, Inc. (VIVK)
About this 8-K/A
Vivakor, Inc filed this 8-K/A on November 15, 2024, reporting on events of November 5, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 3.02: Unregistered sale of equity
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| The (Nasdaq Capital Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
EXPLANATORY NOTE
| Item 1.01. | Entry into a Material Definitive Agreement. |
Loan and Security Agreement and Issuance of Secured Promissory Note
On October 31, 2024, Vivakor, Inc. (the “Company”), as the borrower, and certain of its subsidiaries, being Vivaventures Management Company, Inc., Vivaventures Oil Sands, Inc., Silver Fuels Delhi, LLC, White Claw Colorado City, LLC, Vivaventures Remediation Corporation, Vivaventures Energy Group, Inc., Endeavor Crude, LLC, and Meridian Equipment Leasing, LLC, and Silver Fuels Processing, LLC, as guarantors (collectively, the “Guarantors” or “Subsidiaries”, as context requires), Cedarview Opportunities Master Fund LP, as the lender (the “Lender”); and Cedarview Capital Management, LLC, as the agent (the “Agent”), entered into a Loan and Security Agreement (the “Loan Agreement”).
Pursuant to the Loan Agreement, the Company issued a secured promissory note (the “Note”) in the principal amount of $3,670,160.77, and the Lenders agreed to provide such term loan to the Company (the “Term Loan”) with maturity on October 31, 2025. On November 5 and 6, 2024 (the “Funding Dates”), the Company received the net proceeds from the Term Loan less (i) a 3% origination fee, and (ii) repayment of $2,000,000 in outstanding principal, $68,009 in accrued interest, and a $242,991 prepayment fee pursuant to that certain Loan and Security Agreement dated February 5, 2024, by and between the Company, as borrower thereunder, certain of its Subsidiaries, as guarantors thereunder, and Lender and Agent (the “Prior Cedarview Loan”). As a result of the Term Loan, the Company received net proceeds of approximately $1,250,000 and the Prior Cedarview Loan was repaid in full.
The Term Loan will bear interest at a rate per annum of 22%. The Company will be obligated to make monthly payments of $343,506.42 beginning November 30, 2024.
In the event of any prepayment, the Company shall pay a prepayment premium in the amount of ten percent (10%) of the principal amount of the Term Loan outstanding prior to such prepayment (the “Prepayment Premium”). Notwithstanding the foregoing, if and when the Company raises in the aggregate $10,000,000 or more from the sale of its equity completed more than 90 days after the initial Funding Date (other than in connection with any acquisition, merger, or like transaction), the Company shall immediately offer to prepay the entire outstanding balance of the Term Loan (plus the Prepayment Premium), which offer may be accepted or rejected by the Agent.
The amounts borrowed pursuant to the terms of the Loan Agreement are secured by substantially all of the present and after-acquired assets of the Company and the Subsidiaries, except for certain after-acquired assets that as provided by the Term Loan. Additionally, the Company’s obligations under the Loan Agreement are jointly and severally guaranteed by the Subsidiaries.
The Loan Agreement contains customary representations, warranties and affirmative and negative financial and other covenants for a loan of this type. The closing was subject to customary closing conditions.
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In connection with the Loan Agreement, and as additional consideration for the Lender agreeing to loan funds to the Company thereunder, the Company issued an irrevocable letter to its transfer agent (the “Transfer Agent”) to reserve 3,000,000 shares of the Company’s common stock (the “Collateral Securities”) until the Term Loan is repaid in full. In the event the Term Loan is not paid in full by the Maturity Date, the Agent may instruct the Transfer Agent to issue the Collateral Securities to the Agent, which the Agent may then sell until such time the amounts due under the Term Loan are repaid in full, after which any shares of Collateral Securities remaining shall be returned to the Company. As a result of the repayment of the Prior Cedarview Loan with the Term Loan, the irrevocable instruction letter to the Company’s transfer agent that required certain collateral securities be reserved by the Company’s transfer agent to help secure the repayment of the Prior Cedarview Loan was terminated by the Lender and those shares are no longer reserved by the transfer agent.
The Company issued to the Lender 300,000 shares of the Company’s common stock, restricted in accordance with Rule 144, as additional consideration for the Term Loan.
Item 1.01 of this Current Report on Form 8-K contains only a brief description of the material terms of, and does not purport to be a complete description of, the rights and obligations of the parties to the agreements in connection with the Loan Agreement, and such description is qualified in its entirety by reference to the full text of the Loan Agreement and its exhibits, which are attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 3.02. | Unregistered Sales of Equity Securities. |
To the extent required by this Item 3.02, the information contained in Item 1.01 is incorporated herein by reference. The Company relied on the exemption provided for under Section 4(a)(2) of the Securities Act for the issuance of the 300,000 restricted shares of its common stock as the investor is an accredited investor and familiar with the Company’s operations.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| (1) | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on November 7, 2024. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VIVAKOR, INC. | |||
| Dated: November 15, 2024 | By: | /s/ James H. Ballengee | |
| Name: | James H. Ballengee | ||
| Title: | Chairman, President & CEO | ||
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Exhibit 4.1
EXHIBIT A
(see attached)
NOTE
| $3,670,160.77 | October [ ], 2024 |
FOR VALUE RECEIVED, the undersigned (the “Borrower”), HEREBY PROMISES TO PAY to the order of Cedarview Opportunities Master Fund LP, a Delaware limited partnership the (“Lender”), on or before the Maturity Date (as such term is defined in the Loan Agreement (as defined below)), the principal sum of THREE MILLION SIX HUNDRED SEVENTY THOUSAND ONE HUNDRED AND SIXTY and 77/100 Dollars ($3,670,160.77) in accordance with the terms and provisions of that certain Loan and Security Agreement, dated as of the date hereof, by and among the Borrower, VivaVentures Management Company, Inc., a Nevada corporation, VivaVentures Oil Sands, Inc., a Utah corporation, Silver Fuels Delhi, LLC, a Louisiana limited liability company, White Claw Colorado City LLC, a Texas limited liability company, VivaVentures Remediation Corporation, a Texas corporation, and VivaVentures Energy Group, Inc., a Nevada corporation, Endeavor Crude, LLC, a Texas limited liability company, Equipment Transport, LLC, a Pennsylvania limited liability company, Meridian Equipment Leasing LLC, a Texas limited liability company, Silver Fuels Processing LLC, a Texas limited liability company (each, a “Guarantor” and, collectively, the “Guarantors”), Cedarview Capital Management, LLC, a Delaware limited liability company, as Agent, and the Lenders party thereto (as same may be amended, modified, increased, supplemented and/or restated from time to time, the “Loan Agreement”; capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement).
The outstanding principal balance of this Note, together with all accrued and unpaid interest thereon, shall be due and payable on the Maturity Date. The Borrower promises to pay interest on the unpaid principal balance of this Note from the Issue Date until the principal balance thereof is paid in full. Interest shall accrue on the outstanding principal balance of this Note from and including the Issue Date to but not including the Maturity Date at the rate or rates, and shall be due and payable on the dates and paid in accordance with the terms and conditions, set forth in the Loan Agreement.
Payments of principal, and all amounts due with respect to costs and expenses pursuant to the Loan Agreement, shall be made in lawful money of the United States of America in immediately available funds, without deduction, set-off or counterclaim to the Lender to the account maintained by the Agent not later than 11:59 a.m. (New York time) on the dates on which such payments shall become due pursuant to the terms and provisions set forth in the Loan Agreement. Payments of interest shall be payable in accordance with the provisions of the Loan Agreement. The Obligations of the Borrower under this Note and any additional note issued hereunder are secured in accordance with the terms of the Collateral Documents.
If any payment of principal or interest on this Note shall become due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall in such case be included in computing interest in connection with such payment.
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This Note is the Note provided for in, and is entitled to the benefits of, the Loan Agreement, which Loan Agreement, among other things, contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions and with the effect therein specified, and provisions to the effect that no provision of the Loan Agreement or this Note shall require the payment or permit the collection of interest in excess of the Highest Lawful Rate.
Borrower hereby authorizes Agent to record in its books and records the date all payments of principal amounts in respect of the Term Loan made after the date hereof, which records shall, absent manifest error, be conclusive evidence of the outstanding principal amount evidenced by this Note; provided, however, that the failure by Agent to make any such notation with respect to payment shall not limit or otherwise effect the obligations of Borrower under this Note.
The Borrower and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor or default, protest, notice of protest, notice of intent to accelerate, notice of acceleration and diligence in collecting and bringing of suit against any party hereto, and agree to all renewals, extensions or partial payments hereon and to any release or substitution of security hereof, in whole or in part, with or without notice, before or after maturity.
This Note shall be binding upon the Borrower and its successors and assigns and the terms hereof shall inure to the benefit of the Lender and its successors and assigns including subsequent holders hereof (collectively, “Assignees”), except that the Borrower may not assign or transfer any of its rights or obligations under this Note without the prior written consent of the Lender (which consent shall be in the sole and absolute discretion of the Lender). The term “Lender” as used in this Note shall be deemed to include the Lender and its Assignees. The Lender shall, upon notice to the Borrower, have the unrestricted right at any time or from time to time, and without the Borrower’s consent, to assign all or any portion of its rights and obligations hereunder to any other person, which shall thereupon become vested with all the powers and rights above given to the Lender in respect thereof; provided, however, that any such assignment or transfer of this Note shall be made in accordance with all applicable securities laws. The Lender agrees that it shall execute, or cause to be executed, such documents, including without limitation, amendments to this Note and to any other documents, instruments and agreements executed in connection herewith as the Lender shall reasonably deem necessary to effect the foregoing. In addition, at the request of the Lender and any such Assignee, the Borrower shall issue one or more new promissory notes, as applicable, to any such Assignee and, if the Lender has retained any of its rights and obligations hereunder following such assignment, to the Lender, which new promissory note held by the Lender prior to such assignment shall reflect the principal amount of this Note held by such Assignee and the Lender after giving effect to such assignment. Upon the execution and delivery of appropriate assignment documentation, amendments and any other documentation reasonably required by the Lender in connection with such assignment, and the payment by the Assignee of the purchase price agreed to by the Lender and such Assignee, such Assignee shall be a holder of this Note shall have all of the rights and obligations of the Lender hereunder (and any other guaranties, documents, instruments and agreements executed in connection herewith) to the extent that such rights and obligations have been assigned by the Lender pursuant to the assignment documentation between the Lender and such Assignee, and the Lender shall be released from any obligations it may have hereunder and thereunder to a corresponding extent, subject to the terms of the Loan Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF UTAH APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed and delivered effective as of the date first above written.
| VIVAKOR, INC., | ||
| a Nevada corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
[Signature Page to Note]
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Exhibit 10.2
EXHIBIT C-2
Borrower Security Agreement
PLEDGE AGREEMENT
(Borrower)
PLEDGE AGREEMENT, dated as of October 31, 2024 (this “Agreement”), among Cedarview Capital Management, LLC, a Delaware limited liability company (“Secured Party”) on behalf of the Lenders under the Loan Agreement (defined below), and Vivakor, Inc., a Nevada corporation (the “Borrower,” also referred to herein as the “Debtor”), and the Affiliates of Debtor identified in the signature line hereto (each, a “Debtor Holdco”).
WITNESSETH:
WHEREAS, the Borrower has entered into that certain Loan and Security Agreement, dated as of the date hereof (as it may hereafter be modified, supplemented, extended, or renewed and in effect from time to time, the “Loan Agreement”) by and among the Borrower, VivaVentures Management Company, Inc., a Nevada corporation, VivaVentures Oil Sands, Inc., a Utah corporation, Silver Fuels Delhi, LLC, a Louisiana limited liability company, White Claw Colorado City LLC, a Texas limited liability company, VivaVentures Remediation Corporation, a Texas corporation, VivaVentures Energy Group, Inc., a Nevada corporation, Endeavor Crude, LLC, a Texas limited liability company, Meridian Equipment Leasing LLC, a Texas limited liability company and Silver Fuels Processing LLC, a Texas limited liability company (each, a “Guarantor” and, collectively, the “Guarantors”), the Agent and the other Lenders party thereto;
WHEREAS, it is a condition to the obligations of the Secured Party and the Lenders under the Loan Agreement that this Agreement be duly executed and delivered;
WHEREAS, the Debtor and Secured Party wish to enter into this Agreement in order to secure the obligations of the Debtor under the Loan Documents (such obligations, together with any obligations of the Debtor under this Agreement, the “Secured Obligations”).
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
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ARTICLE II. Definitions. Capitalized terms used but not defined herein shall have the meanings provided therefor in the Loan Agreement. In addition, when used in this Agreement, including in any Schedule or Exhibit, the following terms shall have the following meanings:
“Equity Interest” means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial partnership or membership interests, joint venture interests, units, limited liability company interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting.
ARTICLE III. Security Interest.
SECTION 3.1. The Debtor, or each Debtor Holdco, as the case may be, respectively, hereby pledges to Secured Party on behalf of the Lenders, as security for the Secured Obligations, representing a continuing security interest in, lien on and right of set-off against, all of its right, title and interest in and to all of the Equity Interests, and any warrants, options, purchase rights, conversion or exchange rights, voting rights, calls or claims of any character, regardless of class or designation, owned or hereafter acquired by the Debtor, in each of the issuing entities described in Schedule I hereto (collectively, including the Additional Pledged Interests (as defined below), the “Pledged Interests”), and all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, including any certificates representing the Pledged Interests (including the Additional Pledged Interests), the right to request, after the occurrence and during the continuation of an Event of Default, that the Pledged Interests (including the Additional Pledged Interests) be registered in the name of Secured Party or any of its nominees, the right to receive any certificates representing any of the Pledged Interests (including any certificates representing any of the Additional Pledged Interests) and the right to require that same be delivered to Secured Party together with undated powers or assignments of investment securities with respect thereto, duly endorsed in blank by the Debtor, all warrants, options, share appreciation rights and other rights, contractual or otherwise, in respect thereof and of all dividends, distributions of income, profits, surplus or other compensation by way of income or liquidating distributions, in cash or in kind, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in addition to, in substitution of, on account of or in exchange for any or all of the Pledged Interests (including the Additional Pledged Interests), whether now owned or hereafter acquired the Debtor (the Pledged Interests and any other collateral pledged pursuant to this Section 2(a) are referred to herein, collectively, as the “Pledged Collateral” or “Collateral”).
SECTION 3.2. This Agreement secures the payment of all obligations of the Debtor now or hereafter existing under and in connection with the Loan Documents and all Secured Obligations now or hereafter existing under this Agreement. Without limiting the generality of the foregoing, this Agreement additionally secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by the Debtor to the Secured Party and Lenders under and in connection with the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.
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ARTICLE IV. Delivery of Collateral. The Debtor has delivered to and deposited with Secured Party (or will promptly (in any event within two (2) Business Days of Debtor’s receipt thereof) deliver and deposit with Secured Party the applicable certificates in accordance with Section 4) all certificates, if any, representing the Pledged Interests owned by the Debtor to the extent such Pledged Interests are represented by certificates, and undated powers endorsed in blank with respect to such certificates, in New York c/o Olshan Frome Wolosky LLP, 1325 Avenue of the Americas, New York, New York 10019, Attention: Jason S. Saltsberg, Esq. The Debtor agrees that all property comprising part of the Collateral shall be accompanied by proper instruments of assignment duly executed by the Debtor or each Debtor Holdco, as the case may be, and by any such other instruments or documents as Secured Party may request. The parties hereto acknowledge and agree that the Secured Party shall file UCC financing statements with the Massachusetts Secretary of State for the Collateral in order to perfect the security interests granted herein.
ARTICLE V. Additional Pledged Interests.
(a) During the Term of this Agreement, in the event that the Debtor shall receive or become entitled to receive any additional Equity Interests of any Person consisting of (i) any Equity Interests received through a dividend or a distribution in connection with any reclassification, increase or reduction of capital, merger, consolidation, sale of assets, combination or other reorganization by virtue of such Debtor having been an owner of any of the Pledged Collateral (all of such additional Equity Interests, collectively, the “Additional Pledged Interests”), or (ii) any promissory note, instrument, or other asset (including any options, warrants, subscriptions or other rights, whether as an addition to, in substitution for, or in exchange for any of the Pledged Interests or otherwise) constituting Pledged Collateral, the Debtor agrees to deliver promptly, or authorize, as applicable (and in any event within two (2) Business Days of Debtor’s receipt thereof), to Secured Party at the address specified in Section 3 the following: (1) with respect to any such Additional Pledged Interests or other Pledged Collateral represented by a certificate or other instrument, or any such promissory note or other instrument received, such certificate, promissory note or other instrument, together with undated powers or assignment endorsed in blank by the Debtor; and (2) a duly executed Pledge and Security Agreement Addendum in substantially the form of Exhibit A hereto (a “Pledge and Security Agreement Addendum”) identifying the Additional Pledged Interests, promissory note or other instrument or other Pledged Collateral which are pledged by such Debtor pursuant to this Agreement. Upon the execution and delivery of any Pledge and Security Agreement Addendum, any Additional Pledged Interests, promissory note or other instrument and other Pledged Collateral identified thereon shall thereafter constitute Pledged Collateral to be held by Secured Party pursuant to the terms of this Agreement.
(b) During the Term of this Agreement, in the event that any distribution of any Equity Interests or other securities of any Person, regardless of class or designation, or any warrants, options, purchase rights, conversion or exchange rights, voting rights, calls or claims of any character with respect to any of the foregoing, shall be made on or in respect of the Pledged Collateral or any property shall be distributed to the Debtor upon or with respect to the Pledged Collateral pursuant to the recapitalization or reclassification of the Equity Interests or other securities of the issuer thereof or pursuant to the reorganization thereof, the property so distributed shall be delivered promptly (and in any event within two Business Days of the Debtor’s receipt thereof) by the Debtor to Secured Party to be held by it as additional collateral security for the Secured Obligations. All sums of money and property so paid or distributed in respect of the Pledged Collateral which are received by the Debtor shall, until paid or delivered to Secured Party, be held by the Debtor in trust for the benefit of Secured Party on behalf of the Lenders, segregated from the Debtor’s other property, and Debtor shall deliver it forthwith to Secured Party in the exact form received, together with the authorization to file any necessary Uniform Commercial Code financing statements or any necessary endorsement or appropriate stock or other powers or assignments duly endorsed in blank by the Debtor.
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ARTICLE VI. Representations and Agreements of the Debtor. The Debtor represents and agrees that:
SECTION 6.1. Except for (i) the security interest granted hereby, (ii) any restriction on transfer under the federal, state or provincial securities laws and (iii) any liens or security interests permitted by the Loan Agreement (collectively, the “Permitted Encumbrances”), the Debtor is and will continue to be (or, in the case of after-acquired Collateral, at the time the Debtor acquires rights in such Collateral), the owner and holder of the Collateral, free from any adverse claim, security interest, encumbrance, lien, charge, or other right, title or interest of any person. The Debtor agrees that at all times the Collateral will be and remain free of all such adverse claims, security interests, or other liens or encumbrances, other than any Permitted Encumbrance. The Debtor will defend the Collateral against all claims and demands (other than any Permitted Encumbrance) of all persons at any time claiming the same or any interest therein.
SECTION 6.2. Upon the filing of financing statements relating to the Collateral with the Secretary of State of the State of Nevada (with respect to the Debtor), Secured Party will have a valid and perfected security interest in the Collateral (to the extent a security interest therein may be perfected by the filing of a financing statement).
SECTION 6.3. The Debtor has not heretofore signed any financing statement or security agreement which covers any of the Collateral, and no such financing statement or security agreement is now on file in any public office. The Debtor will not enter into or execute any security agreement or any financing statement covering the Collateral, other than those security agreements and financing statements in favor of Secured Party hereunder, and the Debtor agrees that there will not be on file in any public office any financing statement or statements (or any documents or papers filed as such) covering the Collateral, other than financing statements in favor of Secured Party hereunder, unless in any case the prior written consent of Secured Party shall have been obtained.
SECTION 6.4. The Debtor and each Debtor Holdco has full legal capacity and lawful authority to enter into this Agreement and to grant to Secured Party the security interest in the Collateral as herein provided and all corporate or other action on the part of the Debtor or Debtor Holdco requisite for the due execution, delivery, and performance of this Agreement has been duly and effectively taken.
SECTION 6.5. The execution, delivery and performance hereof are not in contravention of any agreement or undertaking to which the Debtor is a party or by which the Debtor, or its property, is bound and will not result in the imposition of any security interest or lien on any other property of the Debtor.
SECTION 6.6. The Debtor’s and each Debtor Holdco’s exact legal name is as set forth in on Schedule II attached hereto.
SECTION 6.7. The state or jurisdiction of incorporation, formation, organization or primary residence as applicable, of the Debtor and each Debtor Holdco is as set forth on Schedule II attached hereto.
SECTION 6.8. The Debtor’s and each Debtor Holdco’s chief executive office or primary residence is as set forth on Schedule II attached hereto.
SECTION 6.9. The Equity Interests of the issuing entities listed on Schedule I attached hereto (including without limitation the Pledged Interests) whose Equity Interests are being pledged by the Debtor hereunder (i) are not dealt in or traded on securities exchanges or in securities markets, (ii) do not constitute investment company securities, (iii) are not held by any Person in a securities account and (iv) are not evidenced by any certificate.
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ARTICLE VII. Rights of Secured Party and the Debtor Related to Collateral.
SECTION 7.1. To the extent permitted by applicable law, the Secured Party may from time to time following the occurrence of an Event of Default, but subject to the terms herein:
(a) transfer any of the Collateral into the name of the Secured Party or its nominee;
(b) notify parties obligated on any of the Collateral to make payment to Secured Party of any amounts due or to become due thereunder;
(c) enforce collection of any of the Collateral by suit or otherwise; surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligation of any nature of any party with respect thereto; and exercise all other rights of the Debtor in any of the Collateral (including, without limitation, the right to vote or exercise other consensual interests in the Collateral); and/or
(d) take possession or control of any proceeds of the Collateral.
SECTION 7.2. So long as no Event of Default has occurred and is continuing, the Debtor shall have the right to receive all income from or interest on the Collateral, as applicable, other than any such income or interest which would be prohibited by the Loan Agreement (such income or interest distributed by way of a dividend or otherwise shall be promptly delivered to Secured Party to be held as additional Collateral hereunder (such delivery to be in the manner contemplated by Section 3 above)). Upon the occurrence and during the continuance of an Event of Default, the Debtor will not demand or receive any income from or interest on the Collateral, as applicable, and if the Debtor receives any such income or interest without any demand by it, the same shall be held by the Debtor in trust for Secured Party in the same medium in which received, shall not be commingled with any assets of the Debtor and shall be delivered to Secured Party in the form received, properly endorsed to permit collection, not later than the second Business Day following the day of its receipt.
SECTION 7.3. So long as no Event of Default has occurred and is continuing, the Debtor and each Debtor Holdco, as the case may be, shall be entitled, in its sole discretion without the need to notify the Secured Party, to exercise any and all voting and other consensual rights pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms or purpose of this Agreement or the Loan Agreement.
SECTION 7.4. In the event Secured Party shall pay any taxes, assessments, interests, costs, penalties or expenses incident to or in connection with the collection of the Collateral or protection or enforcement of the Collateral or any security therefor, the Debtor, upon demand of Secured Party, shall pay to Secured Party the full amount thereof with interest thereon from the date expended by Secured Party until repaid at a rate per annum (based on a 360-day year for the actual number of days involved) equal to fifteen percent (15%).
SECTION 7.5. The Debtor and each Debtor Holdco shall not sell, assign, alienate, exchange, convey, transfer, hypothecate or otherwise dispose of or encumber any of the Pledged Interests without the prior written consent of Secured Party.
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ARTICLE VIII. Further Assurances; Secured Party as Agent. The Debtor agrees to take such actions and to execute such stock or bond powers and such other or different writings as Secured Party may request (and irrevocably authorizes Secured Party to execute such writings as such Debtor’s agent and attorney-in-fact) to create, preserve, perfect or validate Secured Party’s security interest in the Collateral, or to enable Secured Party to exercise or enforce its rights under this Agreement with respect to the Collateral, including (without limitation) the right to receive, indorse and collect all instruments made payable to the Debtor representing any dividend, interest payment or other distribution in respect of the Collateral or any part thereof.
ARTICLE IX. Events of Default. The occurrence of any Event of Default pursuant to any of the Loan Documents or a breach by the Debtor of the Secured Obligations, shall constitute an “Event of Default” hereunder.
ARTICLE X. Rights and Remedies of Secured Party upon Default.
SECTION 10.1. In addition to the rights and privileges set forth in Section 9(b) and (c) and notwithstanding anything to the contrary herein, the Debtor and each Debtor Holdco grants to Secured Party an IRREVOCABLE PROXY, to vote from time to time all or any part of the Pledged Interests pledged by the Debtor hereunder, in each case in any manner Secured Party deems advisable, either for or against any or all matters submitted, or which may be submitted, to a vote of shareholders, partners, or members, as the case may be, and to exercise all other rights, powers, privileges and remedies to which any such shareholders, partners, or members would be entitled (including, without limitation, giving or withholding written consents, clarifications, and waivers with respect to the Pledged Interests, calling special meetings of the holders of the Pledged Interests and voting at such meetings). The IRREVOCABLE PROXY granted hereby is effective automatically, without the necessity that any other action (including, without limitation, that any transfer of any of the Pledged Interests be recorded on the books and records of the issuer of such Pledged Interests) be taken by any Person (including the Debtor, any issuer of Pledged Interests or any officer or agent thereof), is coupled with an interest, shall be irrevocable, shall survive the bankruptcy, dissolution or winding up of the Debtor, and shall terminate at such time as the Secured Obligations shall have been paid in full; provided that, at the earlier of (i) such time as the Secured Obligations shall have been paid in full and (ii) such IRREVOCABLE PROXY is rescinded in writing by the Secured Party, the Debtor will have the right to exercise the voting and consensual rights and powers that it would otherwise be entitled to exercise with respect to its Pledged Interests and all rights of the Secured Party to vote all or any part of the Pledged Interests will cease automatically without the necessity that any other action be taken by any Person (including Secured Party or any officer or agent thereof). The Debtor covenants and agrees that, prior to the expiration of such IRREVOCABLE PROXY and to the extent reasonably requested by Secured Party, the Debtor will reaffirm such IRREVOCABLE PROXY in a manner reasonably satisfactory to the Secured Party. The Secured Party shall not be liable for any failure of the Secured Party not to vote all or any part of any Pledged Interests pledged by the Debtor hereunder or to exercise any other rights pursuant to this Section 9(a). Notwithstanding the foregoing, Secured Party shall not exercise the IRREVOCABLE PROXY (other than in actions solely to maintain the effectiveness and enforceability of the IRREVOCABLE PROXY) set forth in this clause (a) except upon the occurrence and during the continuance of an Event of Default.
SECTION 10.2. Upon the occurrence and continuance of an Event of Default, and to the extent permitted by the UCC and other applicable law:
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(a) Secured Party shall have and may exercise with reference to the Collateral and the Secured Obligations any or all of the rights and remedies of a secured party under the UCC, and as otherwise granted herein or under any other applicable law or any other agreement now or hereafter in effect executed by the Debtor, including, without limitation, the right and power to sell, at public or private sale or sales, or otherwise dispose of, or otherwise utilize the Collateral and any part or parts thereof in any manner authorized or permitted under the UCC or any other applicable law after default by a debtor, and to apply the proceeds in accordance with Section 11 hereof. Without limiting the foregoing, Secured Party shall have the right to take possession of all or any part of the Collateral and of all books, records, papers and documents of the Debtor or in any of the Debtor’s possession or control relating to the Collateral which are not already in Secured Party’s possession. In addition, if permitted by applicable law, Secured Party will be entitled to appoint any Person as receiver or receiver and manager (a “Receiver”) of all or any part of the Collateral in which the Debtor has an interest, and any Receiver so appointed will have all the rights and remedies of Secured Party (except the right to appoint a Receiver). To the extent permitted by law, the Debtor expressly waives any notice of sale or other disposition of the Collateral and all other rights or remedies of the Debtor or formalities prescribed by law relative to sale or disposition of the Collateral or exercise of any other right or remedy of Secured Party existing after default hereunder; and to the extent any such notice is required and cannot be waived, the Debtor agrees that if such notice is given in the manner provided in Section 15 hereof at least five (5) days before the time of the sale or disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement for giving of said notice. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale.
(b) Upon notice by Secured Party to the Debtor, Secured Party or its nominee or nominees shall have the sole and exclusive right to exercise all voting and consensual powers pertaining to the Collateral or any part thereof and may exercise such powers in such manner as Secured Party may elect.
(c) All rights to marshalling of assets of the Debtor, including any such right with respect to the Collateral are hereby waived by the Debtor.
(d) All recitals in any instrument of assignment or any other instrument executed by Secured Party incident to sale, lease, transfer, assignment or other disposition, lease or utilization of the Collateral or any part thereof under this Section 8(a) shall be full proof of the matters stated therein and no other proof shall be requisite to establish full legal propriety of the sale or other action taken by Secured Party or of any fact, condition or thing incident thereto and all prerequisites of such sale or other action or of any fact, condition or thing incident thereto shall be presumed conclusively to have been performed or to have occurred.
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SECTION 10.3. THE DEBTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS SECURED PARTY AS THE PROXY AND ATTORNEY-IN-FACT OF THE DEBTOR WITH RESPECT TO THE COLLATERAL, INCLUDING, SOLELY DURING THE CONTINUANCE OF AN EVENT OF DEFAULT EVENT OF DEFAULT, (I) THE RIGHT TO TRANSFER AND REGISTER IN ITS NAME OR IN THE NAME OF ITS NOMINEE THE WHOLE OR ANY PART OF THE COLLATERAL, (II) THE RIGHT TO VOTE THE PLEDGED INTERESTS, WITH FULL POWER OF SUBSTITUTION TO DO SO, (III) THE RIGHT TO RECEIVE AND COLLECT ANY DIVIDEND OR OTHER PAYMENT OR DISTRIBUTION IN RESPECT OF OR IN EXCHANGE FOR THE COLLATERAL OR ANY PORTION THEREOF, TO GIVE FULL DISCHARGE FOR THE SAME AND TO INDORSE ANY INSTRUMENT MADE PAYABLE TO SUCH DEBTOR FOR SAME, (IV) THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE COLLATERAL WOULD BE ENTITLED (INCLUDING, WITH RESPECT TO THE PLEDGED INTERESTS, GIVING OR WITHHOLDING WRITTEN CONSENTS OF MEMBERS, CALLING SPECIAL MEETINGS OF MEMBERS AND VOTING AT SUCH MEETINGS), AND (V) THE RIGHT TO TAKE ANY ACTION AND TO EXECUTE ANY INSTRUMENT WHICH AGENT MAY DEEM NECESSARY OR ADVISABLE TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT. THE APPOINTMENT OF SECURED PARTY AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION OF THIS AGREEMENT. SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY PLEDGED INTERESTS ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED INTERESTS OR ANY OFFICER OR AGENT THEREOF). NOTWITHSTANDING THE FOREGOING, SECURED PARTY SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.
SECTION 10.4. Secured Party shall never be under any obligation to collect, attempt to collect, protect or enforce the Collateral, which the Debtor agrees and undertake to do at its expense, but Secured Party may do so in its discretion at any time after the occurrence of an Event of Default. All expenses (including, without limitation, attorneys’ fees and expenses) incurred or paid by Secured Party in connection with or incident to any such collection or attempt to collect the Collateral or actions to protect or enforce the Collateral shall be borne by the Debtor or reimbursed by the Debtor to Secured Party upon demand.
SECTION 10.5. The Secured Party will act in good faith and in a commercially reasonable manner in the exercise of any of its rights and remedies hereunder.
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ARTICLE XI. Special Provisions. The Debtor hereby acknowledges that the sale by Secured Party of any Pledged Interests resulting from an exercise by Secured Party of its rights hereunder must be made in compliance with the Securities Act of 1933 (the “Securities Act”), as well as any applicable Blue Sky or other state or provincial securities laws that may impose limitations as to the manner in which Secured Party or any other person may dispose of securities. The Debtor acknowledges that any sale or disposition contemplated pursuant hereto may be at prices and on terms less favorable to Secured Party than those obtainable through a public sale without any applicable restrictions, and, notwithstanding such circumstances, the Debtor agrees that any such sale or other disposition shall be deemed to have been made in a commercially reasonable manner. Secured Party shall have no obligation to engage in public sales and no obligation to delay the sale of any Collateral for any period of time; and the Debtor waives any claims against Secured Party arising by reason of the fact that the price that might have been obtainable in a public sale was greater than the price obtained in any such sale or disposition pursuant hereto, even if Secured Party accepts the first offer received and does not offer the Collateral to more than one offeree.
ARTICLE XII. Application of Proceeds. In the event Secured Party sells or otherwise disposes of the Collateral in the course of exercising the remedies provided for in this Agreement, any amounts held, realized or received by Secured Party pursuant to the provisions hereof, including the proceeds of the sale of any of the Collateral or any part thereof, shall be applied by Secured Party first toward the payment of any costs and expenses incurred by Secured Party in enforcing this Agreement, in realizing on or protecting any Collateral and in enforcing or collecting any Secured Obligations or any guaranty thereof, including, without limitation, the actual attorneys’ fees and expenses incurred by Secured Party, all of which costs and expenses the Debtor agrees to pay, and then to such other Secured Obligations in such order as Secured Party may elect. Any amounts and any Collateral remaining after such application and after payment to Secured Party of satisfaction of all of the Secured Obligations in full shall be paid or delivered to the Debtor, its successor or assigns, or as a court of competent jurisdiction may direct.
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ARTICLE XIII. Care of Collateral. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Secured Party accords its own property, it being understood that Secured Party shall not have any responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Collateral. Prior to an Event of Default, Secured Party agrees to follow the Debtor’s reasonable instructions in connection with any action with respect to the Collateral, provided that such action is not prohibited hereby and such action would not impair the value or liquidity of the Collateral (or the relationship between the Collateral and the Secured Obligations).
ARTICLE XIV. Termination. This Agreement and the security interest created hereunder shall terminate upon such date on which all the Secured Obligations have been paid in full. Upon termination hereof, Secured Party shall execute and deliver (and file all instruments, terminations, and certificates) to the Debtor all documents which the Debtor shall reasonably request to evidence termination of such security interest and shall return physical possession of any Collateral then held by Secured Party to the Debtor; provided, however, that all indemnities of the Debtor contained in this Agreement shall survive, and remain in full force and effect regardless of the termination of the security interest or this Agreement. Notwithstanding the foregoing, this Agreement and the security interest granted hereunder shall be reinstated if at any time any payment or delivery pursuant to an Obligation, in whole or in part, is rescinded or must otherwise be returned by Secured Party under the application of the Bankruptcy Code or any other Debtor Law, all as though such payment or delivery had not been made.
ARTICLE XV. Additional Information. The Debtor agrees to furnish Secured Party from time to time with such additional information and copies of such documents relating to this Agreement and the Collateral, as Secured Party may reasonably request.
ARTICLE XVI. Notices. Any communication, notice or demand to be given hereunder shall be given in accordance with the Loan Agreement.
ARTICLE XVII. Indemnity and Expenses. The Debtor agrees to indemnify Secured Party from and against any and all claims, losses and liabilities growing out of or resulting from this Agreement (including, without limitation, enforcement of any rights under this Agreement, and any claims or demands of any persons at any time claiming the Collateral or any interest therein), except claims, losses or liabilities resulting from Secured Party’s gross negligence or willful misconduct. The Debtor agrees to pay on demand all out-of-pocket expenses (including the reasonable fees and expenses of Secured Party’s legal counsel, experts and agents) in any way relating to the monitoring, administration, enforcement or protection of the rights of Secured Party hereunder.
ARTICLE XVIII. No Waiver; Cumulative Rights. No failure on the part of Secured Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Secured Party of any right, remedy or power hereunder preclude any other or future exercise of any other right, remedy or power. Each and every right, remedy and power hereby granted to Secured Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by Secured Party from time to time.
ARTICLE XIX. Applicable Law. Except to the extent that the laws of a particular province provide that its laws apply to the validity of security interests in particular collateral, this Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance with, the laws of the State of Utah applicable to contracts made and to be performed entirely within such state without regards to the conflict of laws principles thereof other than mandatory provisions of law.
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ARTICLE XX. Assignment; Binding Effect; Benefit. The rights and obligations of the parties under this Agreement are not assignable without the prior written consent of the other parties, except that Secured Party may assign all or any of its rights and benefits hereunder, and may delegate all or any of its obligations or liabilities (whether by assignment, merger, liquidation or otherwise), and upon any such assignment, Secured Party’s rights, benefits, obligations and liabilities shall automatically cease. Subject to the immediately preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.
ARTICLE XXI. Third Party Rights. Any obligations or rights of the Debtor or the Secured Party of any nature under the terms of this Agreement will not be construed to confer any right or benefit upon any unrelated third-party (individual or entity) that is not party to this Agreement, including, without limitation, any third-party creditor of the Debtor or the Secured Party.
ARTICLE XXII. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
[remainder of page intentionally blank]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written.
| SECURED PARTY: | ||
| CEDARVIEW CAPITAL MANAGEMENT, LLC, a Delaware limited liability company | ||
| By: | ||
| Name: | Burton Weinstein | |
| Title: | Manager | |
[Signature Page to Pledge Agreement – Vivakor, Inc.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written.
| DEBTOR: | ||
| VIVAKOR, INC., a Nevada corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| DEBTOR HOLDCOS: | ||
| VIVAVENTURES MANAGEMENT COMPANY, INC., a Nevada corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| VIVAKOR OPERATING, LLC, a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
| VIVAKOR TRANSPORTATION, LLC, a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
[Signature Page to Pledge Agreement – Vivakor, Inc.]
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| VM FACILITIES, LLC, a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
[Signature Page to Pledge Agreement – Vivakor, Inc.]
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Execution Copy
SCHEDULE I
PLEDGED INTERESTS
| Debtor | Pledged equity interests | Type and Amount of Ownership |
Pledged Interest |
| Vivakor, Inc. | VivaVentures Management Company, Inc. | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | VivaVentures Oil Sands, Inc. | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | Silver Fuels Delhi, LLC | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | White Claw Colorado City LLC | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | Vivaventures Remediation Corporation | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | VivaVentures Energy Group, Inc. | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | Endeavor Crude, LLC | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | Meridian Equipment Leasing LLC | 100% | 100% of Ownership Interest |
| Vivakor, Inc. | Silver Fuels Processing LLC | 100% | 100% of Ownership Interest |
| * | The terms of such pledge are the subject of the Irrevocable Instruction Letter, as defined in the Loan Agreement. |
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Execution Copy
SCHEDULE II
DEBTOR INFORMATION
| Debtor’s Legal Name | Debtor’s State of Formation or State of Primary Residence |
Debtor’s Chief Executive Office or Primary Residence |
| Vivakor, Inc. | Nevada |
5220 Spring Valley Road, Suite 500 Dallas, TX 75254 |
DEBTOR HOLDCO INFORMATION
| Debtor’s Legal Name | Debtor’s State of Formation or State of Primary Residence |
Debtor’s Chief Executive Office or Primary Residence |
| VivaVentures Management Company, Inc. | Nevada |
5220 Spring Valley Road, Suite 500 Dallas, TX 75254 |
| Vivakor Operating, LLC | Texas |
5220 Spring Valley Road, Suite 500 Dallas, TX 75254 |
| Vivakor Transportation, LLC | Texas |
5220 Spring Valley Road, Suite 500 Dallas, TX 75254 |
| VM Facilities, LLC | Texas |
5220 Spring Valley Road, Suite 500 Dallas, TX 75254 |
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Exhibit 10.3
EXHIBIT B
Guaranty
GUARANTY
THIS GUARANTY (this “Guaranty”) is made as of October 31, 2024, by VivaVentures Management Company, Inc., a Nevada corporation, VivaVentures Oil Sands, Inc., a Utah corporation, Silver Fuels Delhi, LLC, a Louisiana limited liability company, White Claw Colorado City LLC, a Texas limited liability company, VivaVentures Remediation Corporation, a Texas corporation, VivaVentures Energy Group, Inc., a Nevada corporation, Endeavor Crude, LLC, a Texas limited liability company, Meridian Equipment Leasing LLC, a Texas limited liability company and Silver Fuels Processing LLC, a Texas limited liability company (each, a “Guarantor” and, collectively, the “Guarantors”), in favor of Cedarview Capital Management, LLC, a Delaware limited liability company (the “Agent”) on behalf of the lenders under the Loan Agreement (as defined below) (including their respective successors, transferees and assigns, collectively, “Lenders”; each individually, a “Lender”).
RECITALS:
WHEREAS, Lenders, Agent, the Guarantors and Vivakor, Inc., a Nevada corporation (the “Borrower”), have entered into that certain Loan and Security Agreement, dated as of the date hereof (as it may hereafter be modified, supplemented, extended, or renewed and in effect from time to time, the “Loan Agreement”), which Loan Agreement sets forth the terms and conditions of Borrower’s obligations under the Loan Documents (said obligations being referred to herein as the “Obligations”), all capitalized terms used and not defined in this Guaranty shall have the meaning given to such terms in the Loan Agreement, and this Guaranty is one of the Loan Documents described in the Loan Agreement;
WHEREAS, each Guarantor is an Affiliate of Borrower and will receive direct or indirect benefit from Lenders’ making of the Obligations to Borrower;
WHEREAS, the Obligations are evidenced by those certain promissory notes executed by Borrower and payable to the order of a Lender (such promissory notes, as they may hereafter be renewed, extended, supplemented, increased or modified and in effect from time to time, and all other notes given in substitution therefor, or in modification, renewal, or extension thereof, in whole or in part, collectively, the “Note”).
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and as a material inducement to Lenders to extend credit to Borrower, each Guarantor hereby jointly and severally guarantees to Agent on behalf Lenders, the prompt and full payment and performance of the Guaranteed Obligations of Borrower (defined below), this Guaranty being upon the following terms and conditions:
1. Guaranteed Obligations of Borrower. Each Guarantor hereby unconditionally and irrevocably jointly and severally with the other Guarantors guarantees to Agent on behalf of Lenders the punctual payment when due, and not merely the collectability, whether by lapse of time, by acceleration of maturity, or otherwise, and at all times thereafter the payment of the Guaranteed Obligations of Borrower. As used herein, the term “Guaranteed Obligations of Borrower” shall mean: (i) any and all interest payments for which Borrower shall be liable to Lenders pursuant to the Loan Documents and (ii) upon the occurrence of a Guarantor Recourse Event (as defined below), any and all obligations (including, without limitation, payment of the Debt (as defined below) in full) and liabilities of Borrower for which Borrower shall be liable to Agent and/or Lender pursuant the Loan Agreement. As used herein, the term “Guarantor Recourse Event” shall mean: (i) the first time a monthly payment of Cash Interest due pursuant to the Loan Documents is not paid in full when due, and not cured within any applicable grace or cure period; (ii) the first time any fee payable to the Agent or Lender pursuant to the Loan Documents is not paid in full when due, and not cured within any applicable grace or cure period; (iii) the first time the Minimum Interest is not paid in full when due, and not cured within any applicable grace or cure period; (iv) the dissolution, bankruptcy and/or insolvency of any Guarantor or the Borrower; (v) fraud or material intentional misrepresentation by the Borrower or any Guarantor or any of their respective principals (if any) or (vi) the Borrower or any Guarantor or any of their respective principals (if any) hindering or contesting (except by way of raising any good faith defenses), or causing another person or entity to hinder or contest, Agent’s exercise of its remedies under the Loan Documents.
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2. Certain Agreements and Waivers by Guarantors.
(a) Each Guarantor hereby agrees that each of the following shall constitute “Events of Default” hereunder (i) the occurrence of a default by any Guarantor in payment of the Guaranteed Obligations of Borrower, or any part thereof, when such indebtedness becomes due, and the applicable grace or cure period had expired, and (ii) the dissolution, bankruptcy and/or insolvency of any Guarantor.
(b) Upon the occurrence of any Event of Default hereunder, the Guaranteed Obligations of Borrower, for purposes of this Guaranty, shall be deemed immediately due and payable at the election of Agent. Each Guarantor shall, on written demand, pay the Guaranteed Obligations of Borrower to Agent. It shall not be necessary for Agent, in order to enforce such payment, first to (i) institute suit or pursue or exhaust any rights or remedies against Borrower or others liable for the Obligations together with all interest accrued and unpaid thereon and all other sums due to Agent and/or Lender in respect of the Obligations pursuant to the Loan Documents (the “Debt”), (ii) enforce any rights against any security that shall ever have been given to secure the Debt, (iii) join Borrower or any others liable for the payment or performance of the Guaranteed Obligations of Borrower or any part thereof in any action to enforce this Guaranty and/or (iv) resort to any other means of obtaining payment or performance of the Guaranteed Obligations of Borrower.
(c) In the event any payment by Borrower or any other Person to Agent or Lender is held to constitute a preference, fraudulent transfer or other voidable payment under any bankruptcy, insolvency or similar law, or if for any other reason Agent or any Lender is required to refund such payment or pay the amount thereof to any other party, such payment by Borrower or any other party to Agent or any such Lender, as applicable, shall not constitute a release of any Guarantor from any liability hereunder and this Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release, surrender or discharge by Agent or such Lender of this Guaranty or of any Guarantor), as the case may be, with respect to, and this Guaranty shall apply to, any and all amounts so refunded by Agent or any Lender, as applicable, or paid by Agent or Lender, as applicable, to another Person (which amounts shall constitute part of the Guaranteed Obligations of Borrower), and any interest paid by Agent or any Lender and any attorneys’ fees, costs and expenses paid or incurred by Agent or Lender in connection with any such event. If acceleration of the time for payment of any amount payable by Borrower under any Loan Document is stayed or delayed by any law or tribunal, any amounts due and payable hereunder shall nonetheless be payable by any Guarantor on demand by Agent.
3. Subordination. If, for any reason whatsoever, Borrower is now or hereafter becomes indebted to any Guarantor:
(a) indebtedness and all interest thereon and all liens, security interests and rights now or hereafter existing with respect to property of Borrower securing same shall, at all times, be subordinate in all respects to the Guaranteed Obligations of Borrower and to all liens, security interests and rights now or hereafter existing to secure the Guaranteed Obligations of Borrower;
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(b) No Guarantor shall be entitled to enforce or receive payment, directly or indirectly, of any such indebtedness of Borrower to any Guarantor until the Guaranteed Obligations of Borrower have been fully and finally paid and performed except as otherwise set forth in the Loan Agreement;
(c) Each Guarantor hereby assigns and grants to Agent on behalf of Lender a security interest in all such indebtedness and security therefor, if any, of Borrower to such Guarantor now existing or hereafter arising, including any dividends and payments pursuant to debtor relief or insolvency proceedings referred to below. In the event of receivership, bankruptcy, reorganization, arrangement or other debtor relief or insolvency proceedings involving Borrower as debtor, Agent shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and shall have the right to receive directly from the receiver, trustee or other custodian (whether or not an Event of Default shall have occurred or be continuing hereunder or under any of the other Loan Documents), dividends and payments that are payable upon any obligation of Borrower to a Guarantor now existing or hereafter arising, and to have all benefits of any security therefor, until the Guaranteed Obligations of Borrower have been fully and finally paid and performed. If, notwithstanding the foregoing provisions, a Guarantor should receive any payment, claim or distribution that is prohibited as provided above in this Section 3, such Guarantor shall pay the same to Agent immediately, such Guarantor hereby agreeing that it shall receive the payment, claim or distribution in trust for Agent and shall have absolutely no dominion over the same except to pay it immediately to Agent; and
(d) Each Guarantor shall promptly upon request of Agent from time to time execute such documents and perform such acts as Agent may require to evidence and perfect its interest and to permit or facilitate exercise of its rights under this Section.
4. Other Liability of Guarantor or Borrower. If any Guarantor is or becomes liable, by endorsement or otherwise, for any indebtedness owing by Borrower to Agent or Lender other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby, and the rights of Agent and Lender hereunder shall be cumulative of any and all other rights that Agent and Lender may have against such Guarantor.
5. Assignment by Agent. This Guaranty is for the benefit of Agent and Lender and their successors and assigns, and in the event of an assignment of the Guaranteed Obligations of Borrower, or any part thereof, the rights and benefits hereunder, to the extent applicable to the Guaranteed Obligations of Borrower so assigned, may be transferred with such Guaranteed Obligations of Borrower. Each Guarantor waives notice of any transfer or assignment of the Guaranteed Obligations of Borrower, or any part thereof, and agrees that failure to give notice will not affect the liabilities of Guarantor hereunder.
6. Binding Effect. This Guaranty is binding not only on each Guarantor, but also on each of the Guarantor’s respective successors and assigns. Without limitation of any other term, provision or waiver contained herein, each Guarantor hereby acknowledges and agrees that he or she, as applicable, has been furnished true, complete and correct copies of the Loan Documents and has reviewed the terms and provisions thereof (including, without limitation, the Guaranteed Obligations of Borrower).
7. Nature of Guaranty. Each Guarantor hereby acknowledges and agrees that this Guaranty (a) is a guaranty of payment and not only of collection and that each Guarantor is jointly and severally with the other Guarantors liable hereunder as a primary obligor, (b) shall only be deemed discharged after the indefeasible satisfaction in full of the Guaranteed Obligations of Borrower and the Debt, (c) shall not be reduced, released, discharged, satisfied or otherwise impacted in connection with (i) any act or occurrence that might, but for the provisions hereof, be deemed a legal or equitable reduction, satisfaction, discharge or release and/or (ii) Agent or Lenders’ enforcement of remedies under the Loan Documents and (d) shall survive the foregoing and shall not merge with any resulting foreclosure deed, deed in lieu or similar instrument (if any).
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8. Governing Law. The governing law and related provisions set forth in Section 10.11 of the Loan Agreement are hereby incorporated by reference as if fully set forth herein (with the Guarantors substituted in all places where Borrower appears thereunder) and shall be deemed fully applicable to each Guarantor hereunder. Each Guarantor hereby certifies that it or he has received and reviewed the Loan Agreement (including, without limitation, Section 10.11 thereof). In the event of any conflict or inconsistency between the terms and conditions thereof and this Section 8, this Section 8 shall control.
9. Invalidity of Certain Provisions. If any provision of this Guaranty or the application thereof to any Person or circumstance shall, for any reason and to any extent, be declared to be invalid or unenforceable, neither the remaining provisions of this Guaranty nor the application of such provision to any other Person or circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the applicability of such provision to other Persons or circumstances, as applicable, shall remain in effect and be enforceable to the maximum extent permitted by applicable legal requirements.
10. Attorneys’ Fees, Costs and Expenses of Collection. The Guarantors jointly and severally agree to pay on demand all attorneys’ fees, costs and expenses and all other costs and expenses incurred by Agent and/or Lenders in the enforcement of or preservation of Agent and Lenders’ rights under this Guaranty including, without limitation, all court costs, whether or not suit is filed herein, or whether at maturity or by acceleration, or whether before or after maturity, or whether in connection with bankruptcy, insolvency or appeal, or whether in connection with the collection and enforcement of this Guaranty against any other Guarantor. Each Guarantor jointly and severally with the other Guarantors agrees to pay interest on any expenses or other sums due to Agent and Lenders under this Section 10 that are not paid when due, at a rate per annum equal to the interest rate provided for in the Loan Agreement. Guarantor’s obligations and liabilities under this Section 10 shall survive any payment or discharge in full of the Guaranteed Obligations of Borrower.
11. Payments. All sums payable under this Guaranty shall be paid in lawful money of the United States of America that at the time of payment is legal tender for the payment of public and private debts.
12. Controlling Agreement. It is not the intention of Agent, Lenders or any Guarantor to obligate any Guarantor to pay interest in excess of that lawfully permitted to be paid by Guarantor under applicable legal requirements. Should it be determined that any portion of the Guaranteed Obligations of Borrower or any other amount payable by any Guarantor under this Guaranty constitutes interest in excess of the maximum amount of interest that such Guarantor, in such Guarantor’s capacity as guarantor, may lawfully be required to pay under applicable legal requirements, the obligation of such Guarantor to pay such interest shall automatically be limited to the payment thereof in the maximum amount so permitted under applicable legal requirements.
13. Notices. Any and all notices, elections, demands, requests and responses thereto permitted or required to be given under this Guaranty shall be given in accordance with the applicable terms and conditions of the Loan Agreement. Notices to any Guarantor shall be addressed as follows:
Guarantor
c/o Vivakor, Inc.
5220 Spring Valley Road, Suite 500
Dallas, TX 75242
Telephone: 318 469 3084
E-mail: jballengee@vivakor.com
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14. Cumulative Rights. The exercise by Agent or Lenders of any right or remedy hereunder or under any other Loan Document, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy. Agent and Lenders shall have all rights, remedies and recourses afforded to Agent and Lenders by reason of this Guaranty or any other Loan Document or by law or equity or otherwise, and the same (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against any Guarantor or others obligated for the Guaranteed Obligations of Borrower, or any part thereof, or against any one or more of them, or against any security or otherwise, at the sole discretion of Agent or Lenders, as applicable, (c) may be exercised as often as occasion therefor shall arise, it being agreed by each Guarantor that the exercise of, discontinuance of the exercise of or failure to exercise any of such rights, remedies, or recourses shall in no event be construed as a waiver or release thereof or of any other right, remedy, or recourse, and (d) are intended to be, and shall be, nonexclusive. No waiver of any default on the part of any Guarantor or of any breach of any of the provisions of this Guaranty or of any other document shall be considered a waiver of any other or subsequent default or breach, and no delay or omission in exercising or enforcing the rights and powers granted herein or in any other document shall be construed as a waiver of such rights and powers, and no exercise or enforcement of any rights or powers hereunder or under any other document shall be held to exhaust such rights and powers, and every such right and power may be exercised from time to time. The granting of any consent, approval or waiver by Agent or Lenders shall be limited to the specific instance and purpose therefor and shall not constitute consent or approval in any other instance or for any other purpose. No notice to or demand on any Guarantor in any case shall of itself entitle such Guarantor to any other or further notice or demand in similar or other circumstances. No provision of this Guaranty or any right, remedy or recourse of Agent or Lenders with respect hereto, or any default or breach, can be waived, nor can this Guaranty or any Guarantor be released or discharged in any way or to any extent, except specifically in each case by a writing intended for that purpose (and which refers specifically to this Guaranty) executed, and delivered to such Guarantor, by Agent.
15. Subrogation. Notwithstanding anything to the contrary contained herein, (a) no Guarantor shall have any right of subrogation in or under any of the Loan Documents or to participate in any way therein, or in any right, title or interest in and to any security or right of recourse for the Guaranteed Obligations of Borrower, until the Guaranteed Obligations of Borrower have been fully and finally paid, and (b) if any Guarantor is or becomes an “insider” (as defined in Section 101 of the Bankruptcy Code) with respect to Borrower, then such Guarantor hereby irrevocably and absolutely waives any and all rights of contribution, indemnification, reimbursement or any similar rights against Borrower with respect to this Guaranty (including any right of subrogation, except to the extent of collateral held by Agent), whether such rights arise under an express or implied contract or by operation of law. It is the intention of the parties that no Guarantor shall be deemed to be a “creditor” (as defined in Section 101 of the Bankruptcy Code) of Borrower by reason of the existence of this Guaranty in the event that either one of the Borrower or a Guarantor becomes a debtor in any proceeding under the Bankruptcy Code. This waiver is given to induce Lender to make the Term Loan as evidenced by the Note to Borrower.
16. Further Assurances. Each Guarantor at such Guarantor’s expense will promptly execute and deliver to Agent upon Agent’s request all such other and further documents, agreements, and instruments in compliance with or accomplishment of the agreements of such Guarantor under this Guaranty.
17. No Fiduciary Relationship. The relationship between Agent and Lenders, respectively, and each Guarantor, is solely that of lender and guarantor. Neither Agent nor any Lender has a fiduciary or other special relationship with or duty to any Guarantor and none are created hereby or may be inferred from any course of dealing or act or omission of Agent or any Lender.
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18. Interpretation. If this Guaranty is signed by more than one Person as “Guarantor”, then the term “Guarantor” as used in this Guaranty shall refer to all such Persons jointly and severally, and all promises, agreements, covenants, waivers, consents, representations, warranties and other provisions in this Guaranty are made by and shall be binding upon each and every such undersigned Person, jointly and severally and Agent may pursue any Guarantor hereunder without being required (i) to pursue any other Guarantor hereunder or (ii) pursue rights and remedies under the Loan Agreement and/or applicable legal requirements with respect to the Collateral or any other Loan Documents.
19. Time of Essence. Time shall be of the essence in this Guaranty with respect to all of each Guarantor’s obligations hereunder.
20. Execution. This Guaranty may be executed in multiple counterparts, each of which, for all purposes, shall be deemed an original, and all of which together shall constitute one and the same agreement.
21. Entire Agreement. This Guaranty embodies the entire agreement between Agent, and Lenders, respectively, and each Guarantor with respect to the guaranty by such Guarantor of the Guaranteed Obligations of Borrower. This Guaranty supersedes all prior agreements and understandings, if any, with respect to guaranty by each Guarantor of the Guaranteed Obligations of Borrower. No condition or conditions precedent to the effectiveness of this Guaranty exist. This Guaranty shall be effective as to each Guarantor upon execution by such Guarantor and delivery to Agent. This Guaranty may not be modified, amended or superseded except in a writing signed by Agent and each Guarantor referencing this Guaranty by its date and specifically identifying the portions hereof that are to be modified, amended or superseded. The Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.
22. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH SUCH GUARANTOR AND AGENT AND/OR LENDERS MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH, OR IN ANY WAY PERTAINING TO, THIS GUARANTY AND ANY OTHER LOAN DOCUMENT. IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS GUARANTY. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY EACH GUARANTOR, AND EACH GUARANTOR HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH GUARANTOR FURTHER REPRESENTS AND WARRANTS THAT IT OR HE HAS BEEN REPRESENTED IN THE SIGNING OF THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF HIS OR HER OWN FREE WILL, AS APPLICABLE, AND THAT HE OR SHE, AS APPLICABLE HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
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23. Consent to Jurisdiction. Each Guarantor irrevocably submits generally and unconditionally for itself and in respect of its property to the nonexclusive jurisdiction of the federal and state courts located in the State of Utah over any suit, action or proceeding arising out of, or relating to, this Guaranty, and irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such state or federal court. Each Guarantor irrevocably waives, to the fullest extent permitted by law, any objection that such Guarantor may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any such court, and any claims that any such suit, action or proceeding is brought in an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon each Guarantor and may be enforced in any court in which such Guarantor is subject to jurisdiction, by a suit upon such judgment provided that service of process is effected upon a Guarantor as provided in the Loan Documents or as otherwise permitted by applicable legal requirements. Each Guarantor hereby releases, to the extent permitted by applicable legal requirements, all errors and all rights of exemption, appeal, stay of execution, inquisition, and other rights to which such Guarantor may otherwise be entitled under the laws of the United States of America or of any state of possession of the United States of America now in force and which may hereinafter be enacted. The authority and power to appear for and enter judgment against a Guarantor shall not be exhausted by one or more exercises thereof or by any imperfect exercise thereof and shall not be extinguished by any judgment entered pursuant thereto. Such authority may be exercised on one or more occasions or from time to time in the same or different jurisdiction as often as Agent shall deem necessary and desirable, for all of which this Guaranty shall be sufficient warrant.
24. Waivers.
(a) Each Guarantor hereby agrees that neither Agent’s nor Lenders’ rights or remedies nor such Guarantor’s obligations under the terms of this Guaranty shall be released, diminished, impaired, reduced or affected by any one or more of the following events, actions, facts, or circumstances, and the liability of each Guarantor under this Guaranty shall be absolute and unconditional irrespective of (and each Guarantor hereby waives any rights or protections related to):
(i) any limitation of liability or recourse in any other Loan Document or arising under any law;
(ii) any claim or defense that this Guaranty was made without consideration or is not supported by adequate consideration;
(iii) the taking or accepting of any other security or guaranty for, or right of recourse with respect to, any or all of the Guaranteed Obligations of Borrower;
(iv) any release, surrender, abandonment, exchange, alteration, sale or other disposition, subordination, deterioration, waste, failure to protect or preserve, impairment, or loss of, or any failure to create or perfect any lien or security interest with respect to, or any other dealings with, any collateral or security at any time existing or purported, believed or expected to exist in connection with any or all of the Guaranteed Obligations of Borrower, including any impairment of a Guarantor’s recourse against any Person or collateral;
(v) whether express or by operation of law, any partial release of the liability of a Guarantor hereunder, or if one or more other guaranties are now or hereafter obtained by Agent or Lenders covering all or any part of the Guaranteed Obligations of Borrower, any complete or partial release of any one or more of such guarantors under any such other guaranty, or any complete or partial release or settlement of Borrower or any other party liable, directly or indirectly, for the payment or performance of any or all of the Guaranteed Obligations of Borrower;
(vi) the death, insolvency, bankruptcy, disability, dissolution, liquidation, termination, receivership, reorganization, merger, amalgamation, consolidation, change of form, structure or ownership, sale of all assets, or lack of corporate, partnership or other power of Borrower or any other party at any time liable for the payment or performance of any or all of the Guaranteed Obligations of Borrower;
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(vii) either with or without notice to or consent of a Guarantor: any renewal, extension, modification or rearrangement of the terms of any or all of the Guaranteed Obligations of Borrower and/or any of the Loan Documents;
(viii) any neglect, lack of diligence, delay, omission, failure, or refusal of Agent or Lenders to take or prosecute (or in taking or prosecuting) any action for the collection or enforcement of any of the Guaranteed Obligations of Borrower, or to foreclose or take or prosecute any action to foreclose (or in foreclosing or taking or prosecuting any action to foreclose) upon any security therefor, or to exercise (or in exercising) any other right or power with respect to any security therefor, or to take or prosecute (or in taking or prosecuting) any action in connection with any Loan Document, or any failure to sell or otherwise dispose of in a commercially reasonable manner any collateral securing any or all of the Guaranteed Obligations of Borrower;
(ix) any failure of Agent or Lenders to notify a Guarantor of any creation, renewal, extension, rearrangement, modification, supplement, subordination, or assignment of the Guaranteed Obligations of Borrower or any part thereof, or of any Loan Document, or of any release of or change in any security, or of any other action taken or refrained from being taken by Agent or Lenders against Borrower or any security or other recourse, or of any new agreement between Agent or Lenders and Borrower, it being understood that neither Agent nor Lenders shall not be required to give a Guarantor any notice of any kind under any circumstances with respect to or in connection with the Guaranteed Obligations of Borrower, any and all rights to notice a Guarantor may have otherwise had being hereby waived by each Guarantor, and each Guarantor shall be responsible for obtaining for itself information regarding Borrower, including, but not limited to, any changes in the business or financial condition of Borrower, and each Guarantor acknowledges and agrees that neither Agent nor Lenders shall have no duty to notify any Guarantor of any information which Agent or Lenders may have concerning Borrower;
(x) if for any reason Agent or any Lender is required to refund any payment by Borrower to any other party liable for the payment or performance of any or all of the Guaranteed Obligations of Borrower or pay the amount thereof to someone else;
(xi) the making of advances by Agent or any Lender to protect its interest in the Collateral, preserve the value of the Collateral or for the purpose of performing any term or covenant contained in any of the Loan Documents;
(xii) the existence of any claim, counterclaim, set off, recoupment, reduction or defense based upon any claim or other right that a Guarantor may at any time have against the Borrower, Agent, Lender, or any other Person, whether or not arising in connection with this Guaranty, the Note, the Loan Agreement, or any other Loan Document;
(xiii) the unenforceability of all or any part of the Guaranteed Obligations of Borrower against Borrower, whether because the Guaranteed Obligations of Borrower exceed the amount permitted by law or violate any usury law, or because the act of creating the Guaranteed Obligations of Borrower, or any part thereof, is ultra vires, or because the officers or Persons creating same acted in excess of their authority, or because of a lack of validity or enforceability of or defect or deficiency in any of the Loan Documents, or because Borrower have any valid defense, claim or offset with respect thereto, or because Borrower’s obligation ceases to exist by operation of law, or because of any other reason or circumstance, it being agreed that each Guarantor shall remain liable hereon regardless of whether Borrower or any other Person be found not liable on the Guaranteed Obligations of Borrower, or any part thereof, for any reason (and regardless of any joinder of Borrower or any other party in any action to obtain payment or performance of any or all of the Guaranteed Obligations of Borrower);
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(xiv) any order, ruling or plan of reorganization emanating from proceedings under any bankruptcy or similar insolvency laws with respect to Borrower or any other Person, including any extension, reduction, composition, or other alteration of the Guaranteed Obligations of Borrower, whether or not consented to by Agent or Lenders; and/or
(xv) any partial or total transfer, pledge and/or reconstitution of Borrower and/or any direct or indirect owner of Borrower (regardless of whether the same is permitted under the Loan Documents).
(xvi) This Guaranty shall be effective as a waiver of, and each Guarantor hereby expressly waives:
(xvii) any and all rights to which a Guarantor may otherwise have been entitled under any suretyship laws in effect from time to time, including any right or privilege, whether existing under statute, at law or in equity, to require Agent or Lenders to take prior recourse or proceedings against any collateral, security or Person whatsoever;
(xviii) any other circumstance that may constitute a defense of Borrower or a Guarantor hereunder and/or under the other Loan Documents; and
(xix) any right and/or requirement of or related to notice, presentment, protest, notice of protest, further notice of nonpayment, notice of dishonor, default, nonperformance, intent to accelerate, acceleration, existence of the Debt and/or any amendment or modification of the Debt.
25. Representations, Warranties and Covenants of Each Guarantor. Each Guarantor hereby makes the following representations, warranties and covenants (each of which shall remain materially true and correct during the term hereof):
(a) This Guaranty and the other Loan Documents to which a Guarantor is a party constitutes when delivered, valid and binding obligations of such Guarantor, enforceable in accordance with their respective terms;
(b) There is no existing event of default, and no event has occurred which with the passage of time or the giving of notice or both will constitute an event of default, under any agreement to which such Guarantor is a party, the effect of which event of default will impair performance by such Guarantor of such Guarantor’s obligations pursuant to and as contemplated by the terms of this Guaranty, and neither the execution and delivery of this Guaranty nor compliance with the terms and provisions hereof (i) will violate any presently existing provision of law or any presently existing regulation, order, writ, injunction or decree of any court or governmental department, commission, board, bureau, agency or instrumentality, or (ii) will conflict or will be inconsistent with, or will result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, instrument, document, agreement or contract of any kind that creates, represents, evidences or provides for any lien, charge or encumbrance upon any of the property or assets of such Guarantor, or any other indenture, mortgage, deed of trust, instrument, document, agreement or contract of any kind to which such Guarantor is a party or by which such Guarantor or any of such Guarantor’s property may be subject, or in the event of any such conflict, the required consent or waiver of the other party or parties thereto has been validly granted, is in full force and effect, is valid and sufficient therefor and has been approved in writing by Agent;
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(c) There are no actions, suits or proceedings pending or threatened against such Guarantor before any court or any governmental, administrative, regulatory, adjudicatory or arbitrational body or agency of any kind that will adversely affect performance by such Guarantor of such Guarantor’s obligations pursuant to and as contemplated by the terms and provisions of this Guaranty;
(d) Neither this Guaranty nor any document, financial statement, credit information, certificate or statement heretofore furnished or required herein to be furnished to Agent and/or Lenders by such Guarantor contains any untrue statement of fact or omits to state a fact material to this Guaranty; and
(e) Each of the representations and covenants of and/or relating to such Guarantor set forth in the other Loan Documents are hereby re-made by such Guarantor and incorporated herein by reference as if fully set forth herein.
26. Financial Covenants of Guarantor.
(a) Each Guarantor (i) shall keep and maintain complete and accurate books and records and (ii) shall permit Agent and any authorized representatives of Agent to have access to and to inspect, examine and make copies of the books and records, any and all financial accounts, financial data and other documents of such Guarantor, at all reasonable times, during normal business hours, at such Guarantor’s address for notices as set forth herein upon the giving of reasonable notice of such intent. Each Guarantor shall also provide to Agent, upon Agent’s reasonable request, such proofs of payments, costs, expenses, revenues and earnings, and other documentation as Agent may reasonably request, from time to time, and with such other information, in such detail as may reasonably be required by Agent.
(b) On the date hereof and immediately following the effectiveness of this Guaranty, each Guarantor will be Solvent. As used in this paragraph, the term “Solvent” means, with respect to each Guarantor on a particular date, that on such date (A) the present fair market value (or present fair saleable value) of the assets of such Guarantor are not less than the total amount required to pay the probable liabilities of such Guarantor on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (B) such Guarantor is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business, (C) such Guarantor is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature and (D) such Guarantor is not engaged in any business or transaction, and is not about to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Guarantor is engaged. In computing the amount of such contingent liabilities at any time, it is intended that such liabilities will be computed at the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
27. Replacement Guarantors. The death or incompetency of a Guarantor shall be an Event of Default hereunder (a “Specified EOD”) unless such Guarantor is replaced in accordance with this Section 27. In connection with the occurrence of a Specified EOD, Borrower shall be permitted to substitute a replacement guarantor and no “Event of Default” shall be deemed to have occurred hereunder as a result thereof, provided, that (a) no other Event of Default hereunder or under and as defined in the Loan Agreement has occurred and is then continuing and (b) each of the following terms and conditions are satisfied (i) within thirty (30) days after the occurrence of such death or incompetency, Borrower deliver Agent written notice of its intent to substitute the guarantor; (ii) the replacement guarantor is a Satisfactory Replacement Guarantor (as defined below); (iii) within fifteen (15) days after delivery of the written notice described in the preceding subclause (i), such Satisfactory Replacement Guarantor assumes the obligations of the replaced Guarantor hereunder and under the other Loan Documents in a manner reasonably acceptable to Agent; (iv) concurrently with such assumption, (A) such Replacement Guarantor delivers to Agent a Spousal Consent (as defined below), as and to the extent applicable and (B) Borrower and such Replacement Guarantor affirms each of their respective obligations under the Loan Documents in a manner reasonably acceptable to Agent; and (v) prior to or concurrently with such assumption, as applicable, Agent receives such information, documentation and opinions as may be required by Agent in connection with such assumption and the foregoing in order to be reasonably acceptable to Agent). As used herein, the term “Satisfactory Replacement Guarantor” shall mean a replacement guarantor that (1) is reasonably acceptable to Agent and (2) is an Affiliate of Borrower.
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IN WITNESS WHEREOF, the Guarantors have duly executed this Guaranty under as of the date first written above.
| GUARANTORS: | ||
| VIVAVENTURES MANAGEMENT COMPANY, INC., a Nevada corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| VIVAVENTURES OIL SANDS, INC., a Utah corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| SILVER FUELS DELHI, LLC, a Louisiana limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
| WHITE CLAW COLORADO CITY LLC, a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
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| VIVAVENTURES REMEDIATION CORPORATION, a Texas corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| VIVAVENTURES ENERGY GROUP, INC., a Nevada corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| ENDEAVOR CRUDE, LLC, a Texas limited liability | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
| MERIDIAN EQUIPMENT LEASING LLC, a Texas limited liability company, | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
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| SILVER FUELS PROCESSING LLC, a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO |
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Exhibit 10.4
EXHIBIT C-3
Guarantor Security Agreement
SECURITY AGREEMENT
(Guarantors)
SECURITY AGREEMENT, dated as of October 31, 2024 (this “Agreement”), among Cedarview Capital Management, LLC, a Delaware limited liability company (the “Agent” and the “Secured Party”) on behalf of the Lenders under the Loan Agreement (defined below), Vivakor, Inc., a Nevada corporation (the “Borrower”), VivaVentures Management Company, Inc., a Nevada corporation, VivaVentures Oil Sands, Inc., a Utah corporation, Silver Fuels Delhi, LLC, a Louisiana limited liability company, White Claw Colorado City LLC, a Texas limited liability company, VivaVentures Remediation Corporation, a Texas corporation, VivaVentures Energy Group, Inc., a Nevada corporation, Endeavor Crude, LLC, a Texas limited liability company, Meridian Equipment Leasing LLC, a Texas limited liability company and Silver Fuels Processing LLC, a Texas limited liability company (each a “Guarantor” and a “Debtor” and collectively the “Guarantors” and the “Debtors”).
WITNESSETH:
WHEREAS, the Borrower has entered into that certain Loan and Security Agreement, dated as of the date hereof (as it may hereafter be modified, supplemented, extended, or renewed and in effect from time to time, the “Loan Agreement”) by and among the Borrower, the Guarantors, the Agent and the other Lenders party thereto;
WHEREAS, it is a condition to the obligations of the Secured Party and the Lenders under the Loan Agreement that this Agreement be duly executed and delivered;
WHEREAS, each Debtor and Secured Party wish to enter into this Agreement in order to secure the obligations of the Debtor under the Loan Documents (such obligations, together with any obligations of the Debtor under this Agreement, the “Secured Obligations”).
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE XXIII. Definitions. Capitalized terms used but not defined herein shall have the meanings provided therefor in the Loan Agreement.
ARTICLE XXIV. Security Interest.
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SECTION 24.1. Each Debtor hereby grants to Secured Party on behalf of the Lenders, as security for the Secured Obligations, a continuing security interest in, lien on and right of set-off against all right, title and interest in, to and under, all of the property and assets currently owned or owing to, or hereafter acquired or arising in favor of such Debtor (unless excepted in the Side Letter, as defined in the Loan Agreement), wherever located, including, but not limited to, all of such Debtor’s present and after-acquired (unless excepted in the Side Letter, as defined in the Loan Agreement), personal property, including, but not limited to, all accounts, deposit accounts, chattel paper, instruments, documents, securities, contract rights, rights to payment of money, receivables, equipment, goods, inventory, investment property, goodwill, general intangibles, intellectual property, patents, patent applications, trademarks, trademark applications, trade names, copyrights, copyright applications, Internet domain names, service marks, trade secrets, know-how, technology, software, hardware, commercial tort claims, furniture, fixtures, warranties and guarantees, as any of the foregoing terms may be defined in the Utah Uniform Commercial Code (the “UCC”), and including any products, proceeds (including insurance proceeds) or income derived therefrom, whether by disposition or otherwise, and the products, proceeds and accessions of any of the foregoing (the “Additional Collateral”).
SECTION 24.2. Each Debtor hereby pledges to Secured Party on behalf of the Lenders, as security for the Secured Obligations, representing a continuing security interest in, lien on and right of set-off against, the deposit accounts held or controlled by such Debtor described in Schedule I hereto, and the products, proceeds and accessions thereof (the “Deposit Accounts”, together with the Additional Collateral, the “Collateral”).
SECTION 24.3. This Agreement secures the payment of all obligations of each Debtor now or hereafter existing under and in connection with the Loan Documents and all Secured Obligations now or hereafter existing under this Agreement. Without limiting the generality of the foregoing, this Agreement additionally secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by each Debtor to the Secured Party and Lenders under and in connection with the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any Debtor.
ARTICLE XXV. Delivery of Collateral. Each Debtor agrees that all property comprising part of the Collateral shall be accompanied by proper instruments of assignment duly executed by such Debtor, and by any such other instruments or documents as Secured Party may request. The parties hereto acknowledge and agree that the Secured Party shall file UCC financing statements with the applicable Secretary of State for the Collateral in order to perfect the security interests granted herein.
ARTICLE XXVI. Representations and Agreements of the Debtor. Each Debtor represents and agrees that:Except for (i) the security interest granted hereby, (ii) any restriction on transfer under the federal, state or provincial securities laws and, (iii) any liens or security interests permitted by the Loan Agreement (collectively, the “Permitted Encumbrances”), such Debtor is and will continue to be (or, in the case of after-acquired Collateral, at the time such Debtor acquires rights in such Collateral), the owner and holder of the Collateral, free from any adverse claim, security interest, encumbrance, lien, charge, or other right, title or interest of any person. Each Debtor agrees that at all times the Collateral will be and remain free of all such adverse claims, security interests, or other liens or encumbrances, other than any Permitted Encumbrance. Each Debtor will defend the Collateral against all claims and demands (other than any Permitted Encumbrance) of all persons at any time claiming the same or any interest therein.
SECTION 26.1. Upon the filing of financing statements relating to the Collateral with the applicable Secretary of State of the State (with respect to each Debtor), Secured Party will have a valid and perfected security interest in the Collateral (to the extent a security interest therein may be perfected by the filing of a financing statement).
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SECTION 26.2. Except for any financing statements related to any Permitted Encumbrance, each Debtor has not heretofore signed any financing statement or security agreement which covers any of the Collateral, and no such financing statement or security agreement is now on file in any public office. Each Debtor will not enter into or execute any security agreement or any financing statement covering the Collateral, other than those security agreements and financing statements in favor of Secured Party hereunder, and each Debtor agrees that there will not be on file in any public office any financing statement or statements (or any documents or papers filed as such) covering the Collateral, other than financing statements in favor of Secured Party hereunder or related to a Permitted Encumbrance, unless in any case the prior written consent of Secured Party shall have been obtained.
SECTION 26.3. Each Debtor has full legal capacity and lawful authority to enter into this Agreement and to grant to Secured Party the security interest in the Collateral as herein provided and all corporate or other action on the part of such Debtor requisite for the due execution, delivery, and performance of this Agreement has been duly and effectively taken.
SECTION 26.4. The execution, delivery and performance hereof are not in contravention of any agreement or undertaking to which each Debtor is a party or by which such Debtor, or its property, is bound and will not result in the imposition of any security interest or lien on any other property of such Debtor.
SECTION 26.5. Each Debtor’s exact legal name is as set forth in on Schedule II attached hereto.
SECTION 26.6. The state or jurisdiction of incorporation, formation, organization or primary residence as applicable, of each Debtor is as set forth on Schedule II attached hereto.
SECTION 26.7. each Debtor’s chief executive office or primary residence is as set forth on Schedule II attached hereto.
ARTICLE XXVII. Rights of Secured Party and each Debtor Related to Collateral.
SECTION 27.1. To the extent permitted by applicable law, the Secured Party may from time to time following the occurrence of an Event of Default, but subject to the terms herein:
(a) transfer any of the Collateral into the name of the Secured Party or its nominee;
(b) notify parties obligated on any of the Collateral to make payment to Secured Party of any amounts due or to become due thereunder;
(c) enforce collection of any of the Collateral by suit or otherwise; surrender, release or exchange all or any part thereof, or compromise or extend or renew for any period (whether or not longer than the original period) any obligation of any nature of any party with respect thereto; and exercise all other rights of each Debtor in any of the Collateral (including, without limitation, the right to vote or exercise other consensual interests in the Collateral); and/or
(d) take possession or control of any proceeds of the Collateral.
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SECTION 27.2. So long as no Event of Default has occurred and is continuing, each Debtor shall have the right to receive all income from or interest on the Collateral, as applicable, other than any such income or interest which would be prohibited by the Loan Agreement (such income or interest distributed by way of a dividend or otherwise shall be promptly delivered to Secured Party to be held as additional Collateral hereunder (such delivery to be in the manner contemplated by Section 3 above)). Upon the occurrence and during the continuance of an Event of Default, if a Debtor receives any income or interest on the Collateral, as applicable, the same shall be held by such Debtor in trust for Secured Party in the same medium in which received, shall not be commingled with any assets of such Debtor and shall be delivered to Secured Party in the form received, properly endorsed to permit collection, not later than the second Business Day following the day of its receipt.
SECTION 27.3. In the event the Secured Party shall pay any taxes, assessments, interests, costs, penalties or expenses incident to or in connection with the collection of the Collateral or protection or enforcement of the Collateral or any security therefor, each Debtor, upon demand of Secured Party, shall pay to Secured Party the full amount thereof with interest thereon from the date demanded by Secured Party until repaid at a rate per annum (based on a 360-day year for the actual number of days involved) equal to fifteen percent (15%).
ARTICLE XXVIII. Further Assurances; Secured Party as Agent. Each Debtor agrees to take such actions and to execute such writings as Secured Party may request (and irrevocably authorizes Secured Party to execute such writings as such Debtor’s agent and attorney-in-fact) to create, preserve, perfect or validate Secured Party’s security interest in the Collateral, or to enable Secured Party to exercise or enforce its rights under this Agreement with respect to the Collateral, including (without limitation) the right to receive, indorse and collect all instruments made payable to such Debtor in respect of the Collateral or any part thereof.
ARTICLE XXIX. Events of Default. The occurrence of any Event of Default pursuant to any of the Loan Documents or a breach by any Debtor of the Secured Obligations, shall constitute an “Event of Default” hereunder.
ARTICLE XXX. Rights and Remedies of Secured Party Upon Default.
SECTION 30.1. Upon the occurrence and continuance of an Event of Default, and to the extent permitted by the UCC and other applicable law:
(a) Secured Party shall have and may exercise with reference to the Collateral and the Secured Obligations any or all of the rights and remedies of a secured party under the UCC, and as otherwise granted herein or under any other applicable law or any other agreement now or hereafter in effect executed by the Debtors, including, without limitation, the right and power to sell, at public or private sale or sales, or otherwise dispose of, or otherwise utilize the Collateral and any part or parts thereof in any manner authorized or permitted under the UCC or any other applicable law after default by a debtor, and to apply the proceeds in accordance with Section 9 hereof. Without limiting the foregoing, Secured Party shall have the right to take possession of all or any part of the Collateral and of all books, records, papers and documents of any Debtor or in the possession of any Debtor or control relating to the Collateral which are not already in Secured Party’s possession. In addition, if permitted by applicable law, Secured Party will be entitled to appoint any Person as receiver or receiver and manager (a “Receiver”) of all or any part of the Collateral in which any Debtor has an interest, and any Receiver so appointed will have all the rights and remedies of Secured Party (except the right to appoint a Receiver). To the extent permitted by law, each Debtor expressly waives any notice of sale or other disposition of the Collateral and all other rights or remedies of such Debtor or formalities prescribed by law relative to sale or disposition of the Collateral or exercise of any other right or remedy of Secured Party existing after default hereunder; and to the extent any such notice is required and cannot be waived, each Debtor agrees that if such notice is given in the manner provided in Section 13 hereof at least five (5) days before the time of the sale or disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement for giving of said notice. Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured Party may adjourn any public or private sale.
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(b) All rights to marshalling of assets of each Debtor, including any such right with respect to the Collateral are hereby waived by such Debtor.
(c) All recitals in any instrument of assignment or any other instrument executed by Secured Party incident to sale, lease, transfer, assignment or other disposition, lease or utilization of the Collateral or any part thereof under this Section 8(a) shall be full proof of the matters stated therein and no other proof shall be requisite to establish full legal propriety of the sale or other action taken by Secured Party or of any fact, condition or thing incident thereto and all prerequisites of such sale or other action or of any fact, condition or thing incident thereto shall be presumed conclusively to have been performed or to have occurred.
SECTION 30.2. EACH DEBTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS SECURED PARTY AS ATTORNEY-IN-FACT OF SUCH DEBTOR WITH RESPECT TO THE COLLATERAL SOLELY DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, GIVING THE SECURED PARTY (I) THE RIGHT TO TRANSFER AND REGISTER IN ITS NAME OR IN THE NAME OF ITS NOMINEE THE WHOLE OR ANY PART OF THE COLLATERAL, (II) THE RIGHT TO RECEIVE AND COLLECT ANY PAYMENT IN RESPECT OF OR IN EXCHANGE FOR THE COLLATERAL OR ANY PORTION THEREOF, TO GIVE FULL DISCHARGE FOR THE SAME AND TO INDORSE ANY INSTRUMENT MADE PAYABLE TO SUCH DEBTOR FOR SAME, (III) THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF THE COLLATERAL WOULD BE ENTITLED, AND (IV) THE RIGHT TO TAKE ANY ACTION AND TO EXECUTE ANY INSTRUMENT WHICH AGENT MAY DEEM NECESSARY OR ADVISABLE TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT. THE APPOINTMENT OF SECURED PARTY AS ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION OF THIS AGREEMENT.
SECTION 30.3. Secured Party shall never be under any obligation to collect, attempt to collect, protect or enforce the Collateral, which such Debtor agrees and undertakes to do at its expense, but Secured Party may do so in its discretion at any time after the occurrence of an Event of Default. All expenses (including, without limitation, attorneys’ fees and expenses) incurred or paid by Secured Party in connection with or incident to any such collection or attempt to collect the Collateral or actions to protect or enforce the Collateral shall be borne by the Debtor or reimbursed by the Debtor to Secured Party upon demand.
SECTION 30.4. The Secured Party will act in good faith and in a commercially reasonable manner in the exercise of any of its rights and remedies hereunder.
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ARTICLE XXXI. Application of Proceeds. In the event Secured Party sells or otherwise disposes of the Collateral in the course of exercising the remedies provided for in this Agreement, any amounts held, realized or received by Secured Party pursuant to the provisions hereof, including the proceeds of the sale of any of the Collateral or any part thereof, shall be applied by Secured Party first toward the payment of any costs and expenses incurred by Secured Party in enforcing this Agreement, in realizing on or protecting any Collateral and in enforcing or collecting any Secured Obligations or any guaranty thereof, including, without limitation, the actual attorneys’ fees and expenses incurred by Secured Party, all of which costs and expenses the Debtor agrees to pay, and then to such other Secured Obligations in such order as Secured Party may elect. Any amounts and any Collateral remaining after such application and after payment to Secured Party of satisfaction of all of the Secured Obligations in full shall be paid or delivered to the Debtor, its successor or assigns, or as a court of competent jurisdiction may direct.
ARTICLE XXXII.
ARTICLE XXXIII.
ARTICLE XXXIV.
ARTICLE XXXV.
ARTICLE XXXVI. Care of Collateral. Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which Secured Party accords its own property, it being understood that Secured Party shall not have any responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral, whether or not Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Collateral. Prior to an Event of Default, Secured Party agrees to follow the Debtors’ reasonable instructions in connection with any action with respect to the Collateral, provided that such action is not prohibited hereby and such action would not impair the value or liquidity of the Collateral (or the relationship between the Collateral and the Secured Obligations).
ARTICLE XXXVII. Termination. This Agreement and the security interest created hereunder shall terminate upon such date on which all the Secured Obligations have been paid in full. Upon termination hereof, Secured Party shall execute and deliver (and file all instruments, terminations, and certificates) to each Debtor all documents which such Debtor shall reasonably request to evidence termination of such security interest and shall return physical possession of any Collateral then held by Secured Party to such Debtor; provided, however, that all indemnities of each Debtor contained in this Agreement shall survive, and remain in full force and effect regardless of the termination of the security interest or this Agreement. Notwithstanding the foregoing, this Agreement and the security interest granted hereunder shall be reinstated if at any time any payment or delivery pursuant to an Obligation, in whole or in part, is rescinded or must otherwise be returned by Secured Party under the application of the Bankruptcy Code or any other Debtor Law, all as though such payment or delivery had not been made.
ARTICLE XXXVIII. Additional Information. Each Debtor agrees to furnish Secured Party from time to time with such additional information and copies of such documents relating to this Agreement and the Collateral, as Secured Party may reasonably request.
ARTICLE XXXIX. Notices. Any communication, notice or demand to be given hereunder shall be given in accordance with the Loan Agreement.
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ARTICLE XL. Indemnity and Expenses. Each Debtor agrees to indemnify Secured Party from and against any and all claims, losses and liabilities growing out of or resulting from this Agreement (including, without limitation, enforcement of any rights under this Agreement, and any claims or demands of any persons at any time claiming the Collateral or any interest therein), except claims, losses or liabilities resulting from Secured Party’s gross negligence or willful misconduct. Each Debtor agrees to pay on demand all out-of-pocket expenses (including the reasonable fees and expenses of Secured Party’s legal counsel, experts and agents) in any way relating to the monitoring, administration, enforcement or protection of the rights of Secured Party hereunder.
ARTICLE XLI. No Waiver; Cumulative Rights. No failure on the part of Secured Party to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Secured Party of any right, remedy or power hereunder preclude any other or future exercise of any other right, remedy or power. Each and every right, remedy and power hereby granted to Secured Party or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by Secured Party from time to time.
ARTICLE XLII. Applicable Law. Except to the extent that the laws of a particular province provide that its laws apply to the validity of security interests in particular collateral, this Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance with, the laws of the State of Utah applicable to contracts made and to be performed entirely within such state without regards to the conflict of laws principles thereof other than mandatory provisions of law.
ARTICLE XLIII. Assignment; Binding Effect; Benefit. The rights and obligations of the parties under this Agreement are not assignable without the prior written consent of the other parties, except that Secured Party may assign all or any of its rights and benefits hereunder, and may delegate all or any of its obligations or liabilities (whether by assignment, merger, liquidation or otherwise), and upon any such assignment, Secured Party’s rights, benefits, obligations and liabilities shall automatically cease. Subject to the immediately preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.1
ARTICLE XLIV. Third Party Rights. Any obligations or rights of any Debtor or the Secured Party of any nature under the terms of this Agreement will not be construed to confer any right or benefit upon any unrelated third-party (individual or entity) that is not party to this Agreement, including, without limitation, any third-party creditor of any Debtor or the Secured Party.
ARTICLE XLV. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
[remainder of page intentionally blank]
| 1 | NTD—Fix section formatting prior to execution. |
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written.
| SECURED PARTY: | ||
| CEDARVIEW CAPITAL MANAGEMENT, LLC, | ||
| a Delaware limited liability company | ||
| By: | ||
| Name: | Burton Weinstein | |
| Title: | Manager | |
[Signature Page(s) to Security Agreement – Guarantors of Vivakor, Inc.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written.
| DEBTORS: | ||
|
VIVAVENTURES MANAGEMENT COMPANY, INC., a Nevada corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| VIVAVENTURES OIL SANDS, INC., | ||
| a Utah corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| SILVER FUELS DELHI, LLC, | ||
| a Louisiana limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, | ||
| its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
|
WHITE CLAW COLORADO CITY LLC, a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, | ||
| its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
[Signature Page(s) to Security Agreement – Guarantors of Vivakor, Inc.]
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|
VIVAVENTURES REMEDIATION CORPORATION, a Texas corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| VIVAVENTURES ENERGY GROUP, INC., | ||
| a Nevada corporation | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| ENDEAVOR CRUDE, LLC, | ||
| a Texas limited liability | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, | ||
| its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
| MERIDIAN EQUIPMENT LEASING LLC, | ||
| a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, | ||
| its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
[Signature Page(s) to Security Agreement – Guarantors of Vivakor, Inc.]
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| SILVER FUELS PROCESSING LLC, | ||
| a Texas limited liability company | ||
| By: VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company, | ||
| its Manager | ||
| By: | ||
| Name: | James Ballengee | |
| Title: | Chairman, President, & CEO | |
[Signature Page(s) to Security Agreement – Guarantors of Vivakor, Inc.]
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SCHEDULE I
DEPOSIT ACCOUNTS
| Guarantor | Name of Bank | Type of Account | Account Numbers |
| RPC Design & Manufacturing LLC | US Bank | Checking | 157529257543 |
| Vivakor, Inc. | US Bank | Checking | 157529257535 |
| Vivakor, Inc. | Business First Bank | Checking | 80030345322 |
| Vivaventures Remediation Corporation | Business First Bank | Checking | 80030365560 |
| White Claw Colorado City LLC | Business First Bank | Checking | 80030219221 |
| Silver Fuels Delhi, LLC | Business First Bank | Checking | 80030064159 |
| Endeavor Crude, LLC | |||
| Meridian Equipment Leasing LLC | |||
| Silver Fuels Processing LLC |
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SCHEDULE II
DEBTOR INFORMATION
| Debtor’s Legal Name | Debtor’s
State of Formation or State of Primary Residence |
Debtor’s
Chief Executive Office or Primary Residence |
| VivaVentures Management Company, Inc. | Nevada |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| VivaVentures Oil Sands, Inc. | Utah |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| Silver Fuels Delhi, LLC | Louisiana |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| White Claw Colorado City LLC | Texas |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| Vivaventures Remediation Corporation | Texas |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| VivaVentures Energy Group, Inc. | Nevada |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| Endeavor Crude, LLC | Texas |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| Meridian Equipment Leasing LLC | Texas |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
| Silver Fuels Processing LLC | Texas |
5220 Spring Valley, Suite 500 Dallas, Texas 75254 |
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