VIVK 8-K
Vivakor, Inc. (VIVK)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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).
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K or this Report contains forward-looking statements. Any and all statements contained in this Report that are not statements of historical fact may be deemed forward-looking statements. Terms such as “may,” “might,” “would,” “should,” “could,” “project,” “estimate,” “pro-forma,” “predict,” “potential,” “strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,” “believe,” “continue,” “intend,” “expect,” “future” and terms of similar import (including the negative of any of the foregoing) may be intended to identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this Report may include, without limitation, statements regarding the plans and objectives of management for future operations.
The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances, including the closing of the Membership Interest Purchase Agreement disclosed below, and may not be realized because they are based upon our current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which we have no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties.
Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them We disclaim any obligation to update the forward-looking statements contained in this Report to reflect any new information or future events or circumstances or otherwise, except as required by law.
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| Item 1.01 | Entry Into Material Definitive Agreement |
Consulting Agreement
On February 11, 2025, in order to assist our management in managing our new, combined business operations after the acquisition of the Endeavor Entities, we entered into a Consulting Agreement with WSGS, LLC, which has extensive experience in assisting public companies in the energy sector. Under the terms of the Consulting Agreement, we will pay the consultant up to $1.3M per year, payable in registered shares of our common stock under our 2023 Equity Incentive Plan. The Consulting Agreement is for an initial term of one year, with the option for a second year. The principal of WSGS, LLC is also a former officer and director of Empire Diversified Energy, Inc., a Delaware corporation, that we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with on February 26, 2024, but has not closed, and E-Starts Money Co., a Delaware corporation, which is an investor in our common stock.
Side Letter
On February 10, 2025, we entered into a Side Letter related to our Executive Employment Agreement with Tyler Nelson, a Director and our Chief Financial Officer, and dated June 13, 2024 and the Promissory Note issued to Mr. Nelson dated June 13, 2024, under which we amended and clarified Mr. Nelson’s Employment Agreement and the Promissory Note to (i) clarify that effective October 1, 2024, Mr. Nelson’s Employment Agreement is with Vivakor Administration, LLC with all material obligations guaranteed by us, (ii) confirming the Promissory Note is still our primary obligation; (iii) confirming the payment obligations of the company are triggered but not just fund raising by the company but also fundraising by our subsidiaries, that the maturity date under the Promissory Note is extended until June 30, 2025, and that a 5% fee will be assessed on the outstanding principal and interest due under the Promissory Note as of December 31, 2024 as a result of the Promissory Note not being paid by December 31, 2024, and (iv) to clarify that no taxable event will occur related to amounts due under the Promissory Note until those amounts are actually paid by the Company to Mr. Nelson.
On February 1, 2025, our wholly-owned subsidiary, Vivakor Administration, LLC, entered into an Employment Agreement with Andre Johnson, for Mr. Johnson to serve as our Vice President, Human Resources, with his compensation effective October 1, 2024. Under the Employment Agreement, we agreed (i) to pay Mr. Johnson an annual salary of $180,000 from October 1, 2024 to December 31, 2024, and increasing to $200,000 effective January 1, 2025, (ii) to annual equity compensation of $75,000 worth of our common stock, issued in equal quarterly installments and priced per share based on the volume-weighted average price for the preceding five (5) NASDAQ trading days prior to the end of each applicable calendar quarter and issued under our 2023 Equity Incentive Plan but subject to an 18-month lock-up, and (iii) to a one-time signing bonus of $250,000 to be paid in shares of our common stock priced per share based on the volume-weighted average price for the preceding five (5) NASDAQ trading days prior to the day of such grant with all shares comprising the signing bonus to be issued under Vivakor’s 2023 Equity and Incentive Plan subject to an 18-month lock-up.
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 agreements, and such description is qualified in its entirety by reference to the full text of the agreements and its exhibits, which attached hereto as Exhibits 10.1, 10.2, and 10.3.
| Item 3.02 | Unregistered Sales of Equity Securities |
As previously disclosed, On October 1, 2024, we acquired all of the issued and outstanding membership interests in 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, and Silver Fuels Processing, LLC, a Texas limited liability company (collectively with their subsidiaries, the “Endeavor Entities”), making those entities wholly-owned subsidiaries. The purchase price is $120 million (the “Purchase Price”), subject to post-closing adjustments, including assumed debt and an earn-out adjustment, payable in a combination of our common stock, $0.001 par value per share (“Common Stock”) and shares of our Series A Preferred Stock $0.001 par value per share (“Preferred Stock”). The Preferred Stock has the payment of a cumulative six percent (6%) annual dividend per share payable quarterly in arrears in shares of Common Stock (so long as such issuances of Common Stock would not result in the Sellers beneficially owning great than 49.99% of the issued and outstanding Common Stock), and the Company having the right to convert the Preferred Stock at any time using the stated value of $1,000 per share of Preferred Stock and the conversion price of one dollar ($1) per share of Common Stock. The sellers are beneficially owned by James Ballengee, our chairman, chief executive officer and principal shareholder. As a portion of the Purchase Price, we previously issued the sellers 6,700,000 shares of our common stock. On February 11, 2025, we issued the sellers an additional 24,291 shares of our common stock and 56,880 shares of our Series A Preferred Stock (includes 16,880 shares of Series A Preferred Stock held in escrow pending completion of full purchase price accounting) with both the amount of shares of common stock and shares of Series A Preferred Stock subject to adjustment once final purchase price accounting has been completed. The stock certificates representing the shares of common stock and Series A Preferred Stock contain a standard Rule 144 restrictive legend. The issuances of the foregoing securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act promulgated thereunder as the holder is one of our executive officers and familiar with our operations.
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On July 5, 2024, we issued a convertible promissory note to Ballengee Holdings, LLC (“Ballengee Holdings”), whose beneficial owner is our Chief Executive Officer, in the principal amount of $500,000, in exchange for $500,000 and in connection therewith, we agreed to issue 21,552 ($50,000) restricted shares of our common stock to Ballengee Holdings (the “BH Shares”). On February 12, 2025, we issued the BH Shares to Ballengee Holdings. The stock certificate representing the shares of common stock contains a standard Rule 144 restrictive legend. The issuances of the foregoing securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act promulgated thereunder as the holder is one of our executive officers and familiar with our operations.
On July 8, 2024, we issued a convertible promissory note to Justin Ellis (“Ellis”) in the principal amount of $350,000, in exchange for $350,000 and in connection therewith, we agreed to issue 15,982 ($35,000) restricted shares of our common stock to Ellis (the “Ellis Shares”). On February 12, 2025, we issued the Ellis Shares to Ellis. The stock certificate representing the shares of common stock contains a standard Rule 144 restrictive legend. The issuances of the foregoing securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act promulgated thereunder as the holder is a sophisticated investor and familiar with our operations.
On February 13, 2025, we issued ClearThink Capital 139,535 shares for payment of $180,000 in outstanding invoices. The issuances of the foregoing securities was exempt from registration pursuant to Section 4(a)(2) of the Securities Act promulgated thereunder as the holder is a sophisticated investor and familiar with our operations.
| Item 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year |
On February 11, 2025, we filed a Certificate of Designation for our Series A Preferred Stock (the “Certificate of Designation”), with the Secretary of State of the State of Nevada setting forth the rights and preferences of our Series A Preferred Stock. As a result, as of February 6, 2025 we had 15,000,000 shares of preferred stock authorized with no shares designated to any series and no shares of preferred stock outstanding.
The above description of the Certificate of Designation does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designation, which is filed as Exhibit 3.1to this Current Report on Form 8-K and is incorporated by reference herein.
| Item 8.01 | Other Events |
On February 12, 2025, we issued James Ballengee, our Chairman, Chief Executive Officer and principal shareholder, 160,266 shares of our common stock (net of tax withholdings) under the terms of the Ballengee Employment Agreement for his services rendered from October 28, 2024 to January 27, 2025. The shares were issued as unrestricted shares under our Equity Incentive Plan registered under a Registration Statement on Form S-8. Based on the Ballengee Employment Agreement, we owe Mr. Ballengee 688,891 shares of Common Stock for his employment period beginning October 28, 2024 through October 27, 2025, to be paid in three equal quarterly installments of 172,222 shares of Common Stock, and one installment of 172,225 shares (prior to tax withholdings).
Under our Employment Agreement with Tyler Nelson, our Chief Financial Officer, he is due bonuses at various times and/or upon certain events happening, namely an annual cash incentive bonus for December 31, 2024 of $225,000, an annual equity incentive bonus of $112,500, and a bonus for the close of the acquisition of the Endeavor Entities of $100,000, totaling $437,500 (the “Nelson Bonuses”), The Nelson Bonuses are due to Mr. Nelson in shares of common stock, which total 462,462 shares of common stock (prior to tax withholdings) based on the calculations in the Nelson Employment Agreement. In payment of the Nelson Bonuses, on February 12, 2025, we issued Mr. Nelson 105,213 shares of our common stock after tax withholdings. The shares were issued as unrestricted shares under our Equity Incentive Plan registered under a Registration Statement on Form S-8.
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| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
| (d) | Exhibits |
| Exhibit No. | Title | |
| 3.1 | Certificate of Designation for Series A Preferred Stock | |
| 10.1 | Consulting Agreement with WSGS, LLC dated February 11, 2025 | |
| 10.2 | Side Letter with Tyler Nelson dated February 10, 2025 | |
| 10.3 | Employment Agreement with Andre Johnson dated February 12, 2025 | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
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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: February 14, 2025 | By: | /s/ James H. Ballengee | |
| Name: | James H. Ballengee | ||
| Title: | Chairman, President & CEO | ||
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Exhibit 3.1
Vivakor, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
PURSUANT TO NRS 78.1955
The undersigned, James Ballengee, does hereby certify that:
| 1. | He is the Chief Executive Officer of Vivakor, Inc., a Nevada corporation (the “Company”). |
| 2. | The Company is authorized to issue 15,000,000 shares of preferred stock, none of which have been issued. |
| 3. | The following resolutions were duly adopted by the board of directors of the Company (the “Board of Directors”): |
WHEREAS, the certificate of incorporation of the Company provides for a class of its authorized stock known as preferred stock, consisting of 15,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;
WHEREAS, the Company’s Board of Directors previously authorized five (5) series of preferred stock entitled Series A Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock, Series C Preferred Stock and Series C-1 Preferred Stock (the “Prior Preferred Stock”);
WHEREAS, all outstanding shares of the Prior Preferred Stock were converted into shares of the Company’s common stock, and on February 6, 2025, the Company filed a Certificate of Amendment with the State of Nevada Secretary of State to eliminate from the Company’s Articles of Incorporation all matters related to each series of Prior Preferred Stock such that the Prior Preferred Stock does not exist and is of no force or effect, and therefore returning all shares that were designated as Prior Preferred Stock to the status of authorized but unissued shares of preferred stock of the Company;
WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and
WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the preferred stock, which shall consist of, up to 150,000 shares of the preferred stock which the Company has the authority to issue, as follows:
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:
TERMS OF PREFERRED STOCK
I. DESIGNATION AND AMOUNT; DIVIDENDS
A. Designation. The designation of said series of preferred stock shall be Series A Preferred Stock, $0.001 par value per share (the “Series A Preferred”).
B. Number of Shares. The number of shares of Series A Preferred authorized shall be One Hundred Fifty Thousand (150,000) shares. Each share of Series A Preferred shall have a stated value equal to $1,000 (as may be adjusted for any stock dividends, combinations or splits with respect to such shares) (the “Series A Stated Value”).
C. Certain Definitions. In addition to terms defined elsewhere in this Certificate of Designations, Preferences, Rights and Limitations, the following terms have the following meanings:
“Common Stock” means the Company’s common stock, par value $0.001 per share.
“Deemed Liquidation Event” shall mean (i) a merger or consolidation in which (x) the Company is a constituent party or (y) a subsidiary of the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the share capital stock of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (a) the surviving or resulting corporation; or (b) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or (ii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all of the assets of the Company and its subsidiaries taken as a whole or the sale or disposition (whether by merger, consolidation or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company; provided, however, that the Company’s transaction with Empire Diversified Energy, Inc., contemplated to occur in 2024, will not be a Deemed Liquidation Event.
“Holder” shall mean a holder of record of the Series A Preferred.
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“Membership Interest Purchase Agreement” shall mean that certain Membership Interest Purchase Agreement dated as of March 21, 2024, by and among the Company, Jorgan Development, LLC, a Louisiana limited liability company, and JBAH Holdings, LLC, a Texas limited liability company, for the purchase and sale Endeavor Crude, LLC f/k/a Meridian Transport, LLC, a Texas limited liability company, et al.
“Original Issue Date” shall mean the date of the first issuance of any shares of the Series A Preferred regardless of the number of transfers of any particular shares of Series A Preferred and regardless of the number of certificates which may be issued to evidence such Series A Preferred.
“Shareholder Approval” means such approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market (or any successor entity) from the shareholders of the Company with respect to the transactions contemplated by the Transaction Documents, including the issuance of all of the Underlying Shares in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date.
“Transaction Documents” means this Certificate of Designation, the Membership Interest Purchase Agreement and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated pursuant to the Membership Interest Purchase Agreement.
“Underlying Shares” means the shares of Common Stock issued and issuable pursuant to the Transaction Documents, including upon conversion of the Series A Preferred and issued and issuable in lieu of the cash payment of dividends thereon in accordance with the terms of this Certificate of Designation.
D. Dividends.
(i) Quarterly Dividends. The Holders of shares of the Series A Preferred shall be entitled to receive dividends out of any assets legally available, to the extent permitted by Nevada law, at an annual rate equal to six percent (6%) of the Series A Stated Value of such shares of Series A Preferred, calculated on the basis of a 360 day year, consisting of twelve 30-day months, and shall accrue from the date of issuance of such shares of Series A Preferred, payable quarterly in the Common Stock, as the Company shall determine in its sole discretion, with the first such payment due on October 31, 2024; provided, however, that the Company shall not pay any dividends in Common Stock if it would cause the Holders to be directly or indirectly vested with forty-nine and 99/100 hundredths percent (49.99%) or more of all of the issued and outstanding Common Stock of the Company or without compliance with applicable sections of Nasdaq Listing Rule 5635. Any unpaid dividends shall accrue at the same rate. To the extent not paid on the last day of April, July, October and January of each calendar year, all dividends on any share of Series A Preferred shall accumulate whether or not declared by the Board and shall remain accumulated dividends until paid pursuant hereto. All accrued and unpaid dividends shall be paid upon a Liquidation Event pursuant to Section II, conversion pursuant to Section IIIA. - D or redemption pursuant to Section III.C. The Holders of the Series A Preferred may convert any such unpaid dividends into common stock of the Company, at the Conversion Price (defined below), and otherwise in accordance with the terms and conditions hereof.
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(ii) Junior Stock Dividends. All accrued and accumulated dividends on the shares of Series A Preferred shall be paid prior and in preference to any dividend on any Junior Stock (as defined herein). The Company shall not declare or pay any cash dividends on, or make any other distributions with respect to or redeem, purchase or otherwise acquire for consideration, any shares of Junior Stock unless and until all accrued and unpaid dividends on the Series A Preferred Stock have been paid in full. In all events, Junior Stock dividends shall be subject to the restrictions set forth in Section II.A. below.
(iii) Partial Dividend Payments. Except as otherwise provided herein, if at any time the Company pays less than the total amount of dividends then accrued and accumulated with respect to the Series A Preferred, such payment shall be distributed pro rata among the Holders thereof based upon the aggregate accrued and accumulated but unpaid dividends on the shares of Series A Preferred held by each such Holder.
II. LIQUIDATION PREFERENCE
A. Preferential Payments to Holders of Series A Preferred. In the event of any liquidation, dissolution or winding up of the Company or a Deemed Liquidation Event, either voluntary or involuntary, the Holders of record of shares of Series A Preferred shall be entitled to receive, immediately prior and in preference to any distribution to the holders of the Company’s other equity securities (including the Company’s Common Stock and any Junior Stock), a liquidation preference equal to the Series A Stated Value per share plus all accrued and accumulated but unpaid dividends, whether or not declared (the amount payable pursuant to this sentence is hereinafter referred to as the “Liquidation Preference Amount”). The payment of any Liquidation Preference Amount must be paid in like consideration, and in pro rata percentages, of what the Company receives in the liquidation event. As an example, if the Company receives $1,500,000 in cash and $500,000 in equity in a liquidation event, the payment of any Liquidation Preference Amount must be paid to the Holders in 75% cash and 25% in equity and then the holders of Junior Stock shall have the right to receive the same form of pro rata consideration as the Holders on a pro rata basis. If upon the occurrence of such event (a “Liquidation Event”) the assets and funds thus distributed among the Holders shall be insufficient to permit the payment to such Holders of the full Liquidation Preference Amounts due to the Holders of the Series A Preferred, then the entire assets and funds of the Company legally available for distribution shall be distributed among the Holders, pro rata, based on the Liquidation Preference Amounts to which such Holders are entitled and the Company shall not make or agree to make any payments to holders of any Junior Stock.
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B. Notice of Liquidation Event. In the event of any Liquidation Event, the Company shall, within ten (10) days of the date the Board approves such action, or no later than twenty (20) days of any shareholders’ meeting called to approve such action, or within twenty (20) days of the commencement of any involuntary proceeding, whichever is earlier, give each Holder of shares of Series A Preferred written notice of the proposed action. Such written notice shall describe the material terms and conditions of such proposed action, including a description of the stock, cash and property to be received by the Holders of shares of Series A Preferred upon consummation of the proposed action and the date of delivery thereof. If any material change in the facts set forth in the initial notice shall occur, the Company shall promptly give written notice to each Holder of such material change.
C. Other Distributions. Upon the completion of the distribution required by this Section, if assets remain in this Company, they shall be distributed to holders of Parity Securities (unless holders of Parity Securities have received distributions pursuant to this section) and Junior Stock in accordance with the Certificate of Incorporation, as amended.
III. CONVERSION
A. Forced Conversion. Subject to Section III.C, the Company shall have the right, subject to the conversion limitations set forth below, at any time after the Original Issue Date, and without payment of additional consideration, to convert the aggregate Series A Stated Value of such shares, as well as accrued and accumulated but unpaid declared dividends on the Series A Preferred (collectively the “Conversion Amount”) into fully paid and non-assessable shares of Common Stock of the Company (“Conversion Shares”). The “Conversion Price” of the Series A Preferred shall be $1.00 per share of Common Stock, subject to adjustment and except as otherwise set forth below. No fractional shares of Common Stock shall be issued upon conversion of Series A Preferred. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall round up to the nearest whole share. In connection with any conversion, the Holder shall surrender the certificate or certificates therefor, duly endorsed, to the principal office of the Company, after receiving written notice from the Company at least five (5) days prior to the date the Company desires to effect the conversion that the Company elects to convert the same, the number of shares of Series A Preferred to be converted and a calculation of the Conversion Price (with an advance copy of the certificate(s) and the notice by facsimile)(the “Conversion Notice”); provided, however, that the Company shall not be obligated to issue certificates evidencing shares of Common Stock issuable upon
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such conversion unless such shares of Series A Preferred are delivered to the Company as provided above, or the Holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company and its transfer agent to indemnify the Company from any loss incurred by it in connection with such certificates. Notice of conversion may be given by the Company at any time during the day up to 5:00 p.m. New York City time and such conversion shall be deemed to have been made five (5) days after the notice of conversion is sent by the Company to the Holder(s) and the shares of Common Stock issuable upon conversion of the specified shares of Series A Preferred shall be deemed to be outstanding of record as of such date. Within three (3) business days after the conversion date in the notice of conversion, the Company shall instruct the transfer agent to issue shares of its Common Stock and to forward the same to the Holder, or upon the election of the Holder, the Company shall transmitted the shares of Common Stock to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the shares to or resale of the shares by the Holder or (B) the shares are eligible for resale by the Holders without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery to the Holder. All shares of Common Stock issued hereunder by the Company shall be duly and validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof. The Company shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Series A Preferred pursuant to this Section III. The Holders do not have the right to force the conversion of the Series A Preferred Stock into common stock.
In case of conversion under this Section III of only a part of the shares of Series A Preferred represented by a certificate surrendered to the Company, the Company shall issue and deliver a new certificate for the number of shares of Series A Preferred which have not been converted, upon receipt of the original certificate or certificates representing shares of Series A Preferred so converted. Until such time as the certificate or certificates representing shares of Series A Preferred which have been converted are surrendered to the Company and a certificate or certificates representing the Common Stock into which such shares of Series A Preferred have been converted have been issued and delivered, the certificate or certificates representing the shares of Series A Preferred Stock which have been converted shall represent the shares of Common Stock into which such shares of Series A Preferred have been converted.
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B. Adjustments. The Conversion Price shall be subject to adjustment from time to time as follows:
(i) Consolidation, Merger, Sale, Lease or Conveyance. In case of any consolidation or merger of the Company with or into another Company where the Company is not the surviving entity, or in case of any sale, lease or conveyance to another Company of all or substantially all the assets of the Company, each share of the Series A Preferred shall after the date of such consolidation, merger, sale, lease or conveyance be convertible into, in lieu of the number of shares of Common Stock which the Holders would otherwise have been entitled to receive, the number of shares of stock or other securities or property (including cash) to which the Common Stock issuable (at the time of such consolidation, merger, sale, lease or conveyance) upon conversion of such share of the Series A Preferred would have been entitled upon such consolidation, merger, sale, lease or conveyance; and in any such case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter of the Holder of the shares of the Series A Preferred shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of the Series A Preferred. Notwithstanding the foregoing, if upon the occurrence of a Liquidation Event the Holder of shares of Series A Preferred receives the entire Liquidation Preference Amount either in cash or in shares of Common Stock pursuant to Section II above, the Conversion Price shall not be adjusted as a result of such Liquidation Event; provided that, the Conversion Price will continue to be subject to adjustment with respect to any subsequent events described in this Section III.B(i).
(ii) Stock Dividends, Subdivisions, Reclassification, or Combinations. If the Company shall (1) declare a dividend or make a distribution on its Common Stock in shares of its Common Stock, (2) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares, or (3) combine or reclassify the outstanding Common Stock into a smaller number of shares, then in any such case, the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination, or reclassification shall be proportionately adjusted so that the Holder of any shares of the Series A Preferred surrendered for conversion after such date shall be entitled to receive the number of shares of Common Stock that such Holder would have owned or been entitled to receive had such Series A Preferred been converted immediately prior to such date on terms in effect as of such time. Successive adjustments in the Conversion Price shall be made whenever any event specified above shall occur. If the Company shall subdivide (by stock split, by payment of a stock dividend or otherwise) the outstanding shares of Series A Preferred, into a greater number of shares of Series A Preferred, the Conversion Price of the Series A Preferred in effect immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding shares of Series A Preferred shall be combined (by reclassification or otherwise) into a lesser number of shares of Series A Preferred, the Conversion Price of the Series A Preferred in effect immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately increased.
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C. Conversion Limitations. In no event shall the Holder, or any future Holder, be entitled to convert any portion of the Series A Preferred without compliance with applicable sections of Nasdaq Listing Rule 5635. Additionally, in no event shall the Holder, or any future Holder, be entitled to convert any portion of the Series A Preferred in excess of that portion of the Series A Preferred upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Series A Preferred or the unexercised or unconverted portion of any other security of the Company subject to a limitation on conversion of exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of the Series A Preferred with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 49.99% of the issued and outstanding shares of Common Stock of the Company. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of Securities Exchange Act of 1934, as amended, and Rule 13d-3 thereunder. Subject to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the issuance of more than 49.99% of the Common Stock of the Company. The restriction described in this paragraph may be waived, in whole or in part, upon sixty-one (61) days’ prior notice from the Holder to the Company to increase such percentage; provided, however, that such waiver will not be effective to the extent that it results in (i) such Holder beneficially owning more than 19.99% of the outstanding shares of Common Stock of the Company or (ii) in the mutually exclusive alternative, specifically with respect to James Ballengee, together with affiliates of James Ballengee, beneficially owning more than 49.99% of the outstanding shares of Common Stock of the Company.
D. Issuance Limitations. Further to the conversion limitations set forth in Section III C. above,, if the Company has not obtained Shareholder Approval in accordance with Nasdaq Listing Rule 5635(d), then the Company may not issue, upon conversion of the Series A Preferred or payments in kind of dividends on the Series A Preferred Stock, a number of shares of Common Stock which, when aggregated with any shares of Common Stock issued on or after the Original Issue Date and prior to such Conversion Date or dividend issuance date in connection with any conversion of or dividend payment in Common Stock on Series A Preferred issued pursuant to the Membership Interest Purchase Agreement would exceed the 20% limitation of Nasdaq Listing Rule 5635(d) (subject to adjustment for forward and reverse stock splits, recapitalizations and the like) (such number of shares, the “Issuable Maximum”). Each Holder shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing (x) the original Stated Value of such Holder’s Series A Preferred by (y) the aggregate Stated Value of all Series A Preferred issued on the Original Issue Date to all Holders.
IV. RANK
All shares of the Series A Preferred shall rank (i) senior to the Company’s Common Stock and any other class or series of capital stock of the Company hereafter created, the terms of which shall specifically provide that such class or series shall rank junior to the Series A Preferred (each of the securities in clause (i) collectively referred to as “Junior Stock”) and (ii) pari passu with any class or series of capital stock of the Company hereafter created and specifically ranking, by its terms, on par with the Series A Preferred (“Parity Securities”), in each case as to dividend distributions or distributions of assets upon liquidation, dissolution or winding up of the Company or a Deemed Liquidation Event, whether voluntary or involuntary.
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V. VOTING RIGHTS
The Holders will not have any voting rights with respect to matters submitted to a vote of holders of Common Stock (whether at a meeting of shareholders or by written consent).
VI. MISCELLANEOUS
A. Status of Redeemed Stock. In case any shares of Series A Preferred shall be redeemed or otherwise repurchased or reacquired, the shares so redeemed, repurchased, or reacquired shall resume the status of authorized but unissued shares of preferred stock, and shall no longer be designated as Series A Preferred Stock.
B. Lost or Stolen Certificates. Upon receipt by the Company of (i) evidence of the loss, theft, destruction or mutilation of any Preferred Stock Certificate(s) and (ii) in the case of loss, theft or destruction, indemnity (with a bond or other security) reasonably satisfactory to the Company, or in the case of mutilation, the Preferred Stock Certificate(s) (surrendered for cancellation), the Company shall execute and deliver new Preferred Stock Certificates.
C. Waiver. Notwithstanding any provision in this Certificate of Designation to the contrary, any provision contained herein and any right of the Holders granted hereunder may be waived as to all shares of Series A Preferred (and the Holders thereof) upon the unanimous written consent of the Holders.
D. Notices. Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally, by nationally recognized overnight carrier or by confirmed facsimile transmission, and shall be effective five (5) days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by nationally recognized overnight carrier or confirmed facsimile transmission, in each case addressed to a party as set forth below, or such other address and telephone and fax number as may be designated in writing hereafter in the same manner as set forth in this Section.
If to the Company:
Vivakor, Inc.
5220 Spring Valley Road, Suite 500
Dallas, TX 75254
Attention: Patrick Knapp, General Counsel
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If to the Holders, to the address listed in the Company’s books and records.
E. Amendment and Waiver. Notwithstanding any provision in the Certificate of Designation to the contrary, no provision contained in this Certificate of Designation may be amended, modified or waived except by an instrument in writing executed by the Company and all of the Holders of the shares of Series A Preferred then outstanding. Without limiting the generality of the foregoing, no amendment, modification or waiver of the terms or relative priorities of the Series A Preferred may be accomplished by the merger, consolidation or other transaction of the Company with another corporation or entity unless the Company has obtained the prior written consent of the Holders of 75% of the outstanding shares of Series A Preferred at such time, in accordance with Section V.B. hereof.”
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Exhibit 10.1
INDEPENDENT CONTRACTOR AGREEMENT
THIS INDEPENDENT CONTRACTOR AGREEMENT (the “Agreement”) is made and entered into as of February 11, 2025 to document services that began on January 1, 2025 (the “Effective Date”), by and between WSGS, LLC, a South Carolina limited liability company (the “Consultant”), and Vivakor, Inc., a Nevada corporation and its subsidiaries (the “Client”) whose principal place of business is 5220 Spring Valley Rd. #500, Dallas, Texas 75254 (together the “Parties”).
WHEREAS, the Client is a public company in the energy sector in need of management consulting services and assistance integrating recently acquired companies, as set forth in this Agreement below;
WHEREAS, the Consultant has extensive experience in managing public companies in the energy sector and is ready, willing and agreeable to render such services to the Client.
NOW THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Consulting Services.
(a) The Client hereby retains the Consultant as an independent contractor to the Client and the Consultant hereby accepts and agrees to such retention.
(b) Consultant shall have such duties and responsibilities as are consistent with Consultant’s position as determined by the CEO and CFO. Specifically, Consultant shall be responsible for assisting in the management and operations related to Client being a public company, assisting the Client with integrating the new personnel and operations from recently acquired companies and provide advice regarding the strategy of the Client and its subsidiaries, advice regarding the structuring and implementation of equity participation plans, employee benefit plans and other incentive arrangements for certain key consultant and/or employees of the Client, general advice regarding dispositions and/or acquisitions and other advice and negotiation assistance, which the Client believes will be beneficial to it, and any other management consulting and project management needs the Client may stand in need of as communicated in writing (the “Services”).
(c) It is acknowledged and agreed by the Client that the Consultant is not required to maintain nor acquire any specific professional license(s), and is not rendering legal advice, nor acting as an investment advisor or broker/dealer within the meaning of the applicable state and federal securities laws to perform the Services. The Services of the Consultant shall not be exclusive, nor shall the Consultant be required to render any specific number of hours of Services.
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2. Independent Contractor. Consultant is not an employee of Client for any purpose whatsoever, including local, state, federal and foreign taxes and workers’ compensation insurance, but is an independent contractor. Neither this Agreement, the relationship created between Parties hereto pursuant to this Agreement, nor any course of dealing between the Parties hereto is intended to create, or shall create, an employment relationship, a joint venture, partnership or any similar relationship. Client is interested in the results obtained by Consultant, who is responsible for the manner and means of performing under this Agreement. Consultant does not have, nor shall Consultant hold itself (or any of its personnel) out as having, any right, power or authority to create any contract or obligation, either express or implied, on behalf of, in the name of, or binding Client, or to pledge Client’s credit, or to extend credit in Client’s name unless expressly authorized to do so by Client and, if so authorized, then only to the extent so authorized. Consultant will pay any and all taxes (local, state, federal or foreign) owed on any compensation received by Consultant pursuant to this Agreement. Consultant agrees to defend, indemnify and hold Client harmless from any and all claims made by any person or entity on account of an alleged failure by Consultant to satisfy any tax, withholding, or other similar regulatory or statutory obligations, or arising out of Consultant’s employment or engagement of persons to provide the Services. Consultant’s relationship with Client is further defined as below:
(a) Client will not withhold any monies for any local, state, federal or foreign taxing authorities from compensation earned by Consultant pursuant to this Agreement. Client shall prepare and file a Form 1099 with the U.S. Internal Revenue Service reporting the compensation paid to Consultant if such reporting is required by law. Consultant will comply with all requests for information to be provided to the Client to be able to prepare and file a Form 1099.
(b) Consultant shall not receive any fringe benefits under this Agreement or from Client whatsoever, and accordingly, shall receive no insurance benefits, disability income, pension, 401(k), vacation, holiday pay, sick pay, expense reimbursement or any other benefits.
(c) Client shall not provide any workers’ compensation coverage for Consultant. Any and all workers’ compensation coverage shall be the sole responsibility of Consultant.
(d) Client shall not provide any employment insurance coverage for Consultant. Any and all employment insurance remittances shall be the sole responsibility of Consultant.
(e) Consultant shall be responsible for establishing and incurring the expense of Consultant’s office.
3. Time, Place and Manner of Performance. The Consultant shall be available for advice and counsel to the officers and directors of the Client as such reasonable and convenient times and places as may be mutually agreed upon. Except as aforesaid, the time, place and manner of performance of the services hereunder, including the amount of time to be allocated by the Consultant to any specific service, shall be determined at the sole discretion of the Consultant. The Consultant will be notified by the Client regarding the consulting and management services it desires from the Consultant from time to time after the execution of this Agreement. The primary principal place of performance of this Agreement and of the Services is at the Consultant’s offices in the state of South Carolina, but Consultant can perform the Services at the location of his choosing unless the Services require him to be at a specific location for a specific meeting or event.
4. Compensation and Expenses.
In exchange for the Services, the Client shall pay the Consultant:
(a) Flat consulting fee of $34,000 per month beginning on the Effective Date payable on the 15th day of each calendar month or, if such day falls on a weekend or holiday, on the next business day (“Regular Consulting Fees”).
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(b) The Consultant will also be entitled to additional quarterly special consulting fees, which shall increase if the Client meets certain quarterly performance thresholds, payable on the 15th day subsequent to the applicable calendar quarter upon which fees are due, or if such day falls on a weekend or holiday, on the next business day (collectively, the “Special Consulting Fees”), namely:
(i) If the Client achieves at least $8,000,000 in Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) for the quarter ended March 31, 2025 (or as applicable March 31, 2026, if this Agreement is extended pursuant to Section 7), then the Consultant will receive $300,000 in Special Consulting Fees. Notwithstanding the above, the Special Consulting Fees will not be less than $200,000 for the quarter ended March 31, 2025 (or as applicable March 31, 2026, if this Agreement is extended pursuant to Section 7);
(ii) If the Client achieves at least $8,000,000 in EBITDA for the quarter ended June 30, 2025 (or as applicable June 30, 2026, if this Agreement is extended pursuant to Section 7),, then the Consultant will receive $300,000 in Special Consulting Fees. Notwithstanding the above, the Special Consulting Fees will not be less than $200,000 for the quarter ended June 30, 2025 (or as applicable June 30, 2026, if this Agreement is extended pursuant to Section 7);
(iii) If the Client achieves at least $8,000,000 in EBITDA for the quarter ended September 30, 2025 (or as applicable September 30, 2026, if this Agreement is extended pursuant to Section 7), then the Consultant will receive $300,000 in Special Consulting Fees. Notwithstanding the above, the Special Consulting Fee will not be less than $200,000 for the quarter ended September 30, 2025 (or as applicable September 30, 2026, if this Agreement is extended pursuant to Section 7).
(c) The Consultant will also be entitled to, as an additional inducement for entering into this Agreement with Client, a contract signing fee of $300,000 (the “Contract Signing Fee”) and an additional $300,000 if this Agreement is extended pursuant to Section 7 (the “Contract Extension Fee”), each of which shall be payable on the 15th day subsequent to which each Fee shall be due, if applicable, or, if such day falls on a weekend or holiday, on the next business day.
(d) In no event will the Regular Consulting Fees, when combined with the Special Consulting Fees, exceed $1,308,000 in any twelve-month period. The Regular Consulting Fees, Special Consulting Fee, Contract Signing Fee and Contract Extension Fee, if applicable, will be paid in common stock, par value $0.001, (“Common Stock”) of the Client. Such Common Stock shall be priced per share based on the 52-week low closing price preceding the end of the prior calendar quarter for each of the Regular Consulting Fee, Special Consulting Fees Contract Signing Fee and Contract Extension Fee, if applicable, but in no event greater than the closing bid price on the Effective Date of this Agreement. Such shares shall be issued pursuant to a Registration Statement filed on Form S-8 with the Securities and Exchange Commission. Any shares issued pursuant to a Registration Statement on Form S-8 will be issued to, and in the name of an individual as designated by the Consultant. In the event that a Registration Statement filed on Form S-8 is unavailable for use, the shares of Common Stock issued in the amount equal to the Regular Consulting Fees or Special Consulting Fees, such Common Stock shall be eligible for Piggy-Back Registration Rights, subject to underwriter approval (if applicable), on all future Registration Statements filed on Form S-1. The Client will not issue any Common Stock to the Consultant if the issuance of such shares would cause the Consultant to beneficially own more than 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of the shares of Common Stock (the “Beneficial Ownership Limitation”). The Consultant may increase or decrease the Beneficial Ownership Limitation provisions of this Section, provided that the Beneficial Ownership Limitation may in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of the shares of Common Stock. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Client. Notwithstanding the above, the Consultant has represented to the Client that it, and its members and managers, are knowledgeable regarding the prohibitions on using shares registered in an S-8 Registration Statement for services related to the offer or sale of securities in a capital-raising transaction, or services that are directly or indirectly related to promoting or maintaining a market in the Client’s securities. The Consultant agrees that to the extent it provides any services related to those prohibited activities it will notify the Client and the Parties agree that the shares of Common Stock owed for those activities will not be issued pursuant to an S-8 Registration Statement and will either be registered on another form of registration statement, such as an S-1 Registration Statement consistent with this Agreement, or such shares will be issued to the Consultant as unregistered, restricted stock.
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(e) The Client will not pay the Consultant for expenses or costs incurred for the performance of services unless the Client authorizes the expense in writing to the Consultant prior to its occurrence, while this Agreement between the Consultant and the Client remains in effect. Notwithstanding the foregoing, expenses which do not require approval are (i) airfare expenses, (ii) lodging expenses, (iii) transportation services and (iv) other miscellaneous expenses such as parking expenses incurred pertaining to the Client’s business, none of which shall exceed the amount $1,000, while this Agreement between the Consultant and the Client remains in effect.
5. Representations and Warranties of the Client.
The Client represents and warranties the following:
(a) Corporate Good Standing. The Client is a corporation, duly organized, validly existing, and in good standing under the laws of Nevada, and has all requisite corporate power and authority to carry on its business as now conducted by it and to own and operate its assets as now owned and operated by it.
(b) Authority; Enforceability.
(i) The Client has the right, power, and authority to execute and deliver this Agreement, and to perform its obligations hereunder. This Agreement constitutes (or will, when executed and delivered as contemplated herein, constitute) the legally binding obligations of the Client, enforceable in accordance with its terms.
(ii) The execution, delivery, and performance of this Agreement by the Client, and the consummation of the transactions contemplated hereby, do not and will not: (i) require the consent, waiver, approval, license, or other authorization of any person, except as provided for herein; (ii) violate any of provision of applicable law; (iii) contravene, conflict with, or result in a violation of any provision of the Client’s organizational documents; (iv) conflict with, require a consent or waiver under, result in the termination of any provisions of, constitute a default under, accelerate any obligations arising under, trigger any payment under, result in the creation of any lien pursuant to, or otherwise adversely affect, any contract to which the Client is a party or by which any of its assets are bound, in each such case whether with or without the giving of notice, the passage of time, or both.
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(c) All requisite corporate action has been taken by the Client to authorize and approve the execution and delivery of this Agreement, the performance by the Client of its obligations hereunder, and of all other acts necessary or appropriate for the consummation of the transactions contemplated by this Agreement.
6. Representations and Warranties of the Consultant.
The Consultant represents and warranties the following:
(a) Corporate Good Standing. The Consultant is a limited liability company, duly organized, validly existing, and in good standing under the laws of South Carolina, and has all requisite corporate power and authority to carry on its business as now conducted by it and to own and operate its assets as now owned and operated by it.
(b) Authority; Enforceability.
(i) The Consultant has the right, power, and authority to execute and deliver this Agreement, and to perform its obligations hereunder. This Agreement constitutes (or will, when executed and delivered as contemplated herein, constitute) the legally binding obligations of the Consultant, enforceable in accordance with its terms.
(ii) The execution, delivery, and performance of this Agreement by the Consultant, and the consummation of the transactions contemplated hereby, do not and will not: (i) require the consent, waiver, approval, license, or other authorization of any person, except as provided for herein; (ii) violate any of provision of applicable law; (iii) contravene, conflict with, or result in a violation of any provision of the Consultant’s organizational documents; (iv) conflict with, require a consent or waiver under, result in the termination of any provisions of, constitute a default under, accelerate any obligations arising under, trigger any payment under, result in the creation of any lien pursuant to, or otherwise adversely affect, any contract to which the Consultant is a party or by which any of its assets are bound, in each such case whether with or without the giving of notice, the passage of time, or both.
(c) All requisite corporate action has been taken by the Consultant to authorize and approve the execution and delivery of this Agreement, the performance by the Consultant of its obligations hereunder, and of all other acts necessary or appropriate for the consummation of the transactions contemplated by this Agreement.
(d) The Consultant hereby represents that it has in place policies and procedures relating to, and addressing, with the commercially reasonable intent to ensure compliance with, applicable securities laws, rules and regulations, including, but not limited to:
(i) The use, release or other publication of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act of 1934 (the “Exchange Act”).
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(ii) Disclosure requirements outlined in Section 17B of the Exchange Act regarding the required disclosure of the nature and terms of the Consultant’s relationship with the Client in any and all of the Consultant’s literature or other communication(s) relating to the Client, including, but not limited to: press releases, letters to investors and telephone or other personal communication(s) with potential or current investors.
(e) The Consultant further acknowledges that by the very nature of its relationship with the Client it will, from time to time, have knowledge of or access to material, non-public information (as such term is defined by the Exchange Act) and the Consultant hereby agrees and covenants that:
(i) The Consultant will not make any purchases or sales in the shares of the Client in the public marketplace while in possession or having knowledge of any material, non-public information.
(ii) The Consultant will utilize its commercially reasonable efforts to safeguard and prevent the dissemination of any such material, non-public information to third parties unless authorized in writing by the Client to do so as may be necessary or appropriate in the performance of its services under this Agreement.
(iii) The Consultant will not, in any way, utilize or otherwise include such material, non-public information, in actual form or in substantive content, in its analysis for, preparation of or release of any of the Consultant’s literature or other communication(s) relating to the Client, including, but not limited to: press releases, letters to investors and telephone or other personal communication(s) with potential or current investors; provided, however, that the Consultant may use such material non-public information in its analysis for only the Client’s review and in its preparation of any documents meant only for the Client to receive.
(f) Consultant represents that it, and its members and managers, are knowledgeable regarding the prohibitions on using shares registered in an S-8 Registration Statement for services related to the offer or sale of securities in a capital-raising transaction, or services that are directly or indirectly related to promoting or maintaining a market in the Client’s securities.
(g) The manager of Consultant is also the President of E-Starts Money Co., a Delaware corporation, which is an investor in the Client, and is a former officer and director of Empire Diversified Energy, Inc., a Delaware corporation, that Client entered into an Agreement and Plan of Merger (the “Merger Agreement”) with on February 26, 2024, but has not closed.
7. Term and Termination.
(a) The term of this Agreement shall commence on the date of this Agreement and continues for the term of twelve (12) months which shall automatically be extended for an additional twelve (12) months unless either Party gives the other Party written notice at least thirty (30) days prior to the end of initial twelve (12) month term that the Party is terminating this Agreement at the end of the initial term.
(b) This Agreement may be terminated by Consultant at any time, for any reason, upon giving thirty (30) days written notice to the Client.
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(c) This Agreement may be terminated by either party at any time for material breach upon giving thirty (30) days written notice to the other party and that party’s failure to cure such identified material breach within such time.
(d) Both Parties agree to act with commercially reasonable efforts to cure any such material breaches of this Agreement within fourteen (14) days of written notice of any material breach under this Agreement.
(e) Consultant and Client shall have the right and discretion to terminate this Agreement should the other party: (i) violate any law, ordinance, permit or regulation of any governmental entity, except for violations which either singularly or in the aggregate do not have or will not have a material adverse effect on the operations of the Client, or (ii) engage in activities which may, in the reasonable opinion of the terminating party, bring the reputation of the terminating party into disrepute.
(f) This Agreement shall automatically terminate upon the dissolution, assignment for the benefit of creditors, or bankruptcy of the Client or the Consultant.
(g) In the event of any termination of this Agreement for the reasons set forth in Sections 8(b) through 8(f), all amounts owed to the Consultant for services rendered through the date of termination shall be fully earned and non-refundable, including the Contract Signing Fee and Contract Extension Fee, if applicable. For the avoidance of doubt, the Special Consulting Fees shall be fully earned upon the substantial performance of the Consultant’s duties for any relevant quarter under Section 4(b). Further, termination of this Agreement shall not be valid if it serves to frustrate payment of Special Consulting Fees for any particular quarter.
(h) In the event of any termination of this Agreement, the Consultant shall be responsible to comply with the provisions of Sections 8 and 9, below.
8. Proprietary Information.
(a) Consultant understands that Client possesses and will possess Proprietary Information that is important to its business. For purposes of this Agreement, “Proprietary Information” is all information that is disclosed to Consultant or that was or will be developed, learned, created, or discovered by Consultant (or others) for or on behalf of Client, or that became or will become known by, or was or is conveyed to Client and has commercial value in Client’s business, or that is developed at Client’s facilities or with use of Client’s equipment. Proprietary Information includes, but is not limited to, information (and all tangible items in any form incorporating, embodying or containing information) relating to (i) all client/customer lists, vendor lists and all lists or other compilations containing client, customer or vendor information; (ii) information about services, proposed services, research, product development, know-how, techniques, processes, costs, profits, markets, marketing plans, strategies, forecasts, sales and commissions, and unpublished information relating to technological and scientific developments; (iii) plans for future development and new service concepts; (iv) plans, information or proposed terms regarding any merger or acquisition, or any other business transaction involving Client or any of its assets; (v) financial performance or financial projections; (vi) all documents, books, papers, drawings, schematics, models, sketches, computer programs, databases, and other data of any kind and descriptions including electronic data recorded or retrieved by any means; (vii) the compensation, performance and terms of employment of Client employees; (viii) software in various stages of development, and any designs, drawings, schematics, specifications, techniques, models, data, source code, algorithms, object code, documentation, diagrams, flow charts, research and development, processes and procedures relating to any software; and (ix) all other information that has been or will be given to Consultant in confidence by Client (or any affiliate) concerning Client’s actual or anticipated business, research or development, or that is received in confidence by or for Client from any other person or entity. Proprietary Information does not include information that (i) is in the public domain through lawful means that do not directly or indirectly result from any act or omission of Consultant in breach of his obligations hereunder or (ii) was already rightfully known to Consultant (other than in connection with this Agreement or Consultant’s prior employment work with the Client) without restriction on use or disclosure at the time of Client’s disclosure to Consultant.
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(b) Non-Disclosure. Consultant understands that this Agreement creates a relationship of confidence and trust between Consultant and Client with regard to Proprietary Information. Consultant will at all times, both during and after the term of this Agreement, keep the Proprietary Information in confidence and trust. Consultant will not, without the prior written consent of an executive officer of Client, (i) copy, use or disclose any Proprietary Information, or (ii) deliver any Proprietary Information to any person or entity outside of the Client. Notwithstanding the foregoing, Consultant may use the Proprietary Information, without disclosing it to any other party, as may be necessary and appropriate in the ordinary course of performing the Services.
(c) Return and Destruction of Proprietary Information. Consultant agrees that upon termination of this Agreement for any reason or upon Client’s request, Consultant shall promptly deliver to Client all Proprietary Information, any document or media that contains Proprietary Information (and all copies thereof), and any apparatus or equipment (and other physical property or any reproduction of such property), and delete or otherwise irrevocably destroy all such Proprietary Information in the custody of Consultant, excepting only Consultant’s copy of this Agreement.
9. Confidentiality. The Consultant recognizes and acknowledges that it has and will have access to certain confidential information of the Client and its affiliates that are valuable, special and unique assets and property of the Client and such affiliates. The Consultant will not, during the term of this Agreement, disclose, without the prior written consent or authorization of the Client, any of such information to any person, for any reason or purpose whatsoever, save and except for the employees, officers, directors, accountants, auditors, attorneys, advisors, agents and representatives of the Client. In this regard, the Client agrees that such authorization or consent to disclose may be conditioned upon the disclosure being made pursuant to a secrecy agreement, protective order, provision of statute, rule, regulation or procedure under which the confidentiality of the information is maintained in the hands of the person to whom the information is to be disclosed or in compliance with the terms of a judicial order or administrative process.
10. Conflict of Interest. The Consultant shall be free to perform Services for other persons. The Consultant will notify the Client of its performance of Services for any other person that could conflict with its obligations under the Agreement.
11. Disclaimer of Responsibility for Act of the Client. In no event shall Consultant be required by this Agreement to represent or make management decisions for the Client. Consultant shall, under no circumstances, be liable for any expense incurred or loss suffered by the Client as a consequence of such decisions made by the Client or any affiliates or subsidiaries of the Client.
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12. Indemnification.
(a) The Client shall protect, defend, indemnify and hold Consultant and its assigns and attorneys, accountants, employees, officers and director harmless from and against all losses, liabilities, damages, judgments, claims, counterclaims, demands, actions, proceedings, costs and expenses (including reasonable attorneys’ fees) of every kind and character resulting from, relating to or arising out of (a) the inaccuracy, non-fulfillment or breach of any representation, warranty, covenant or agreement made by the Client herein, (b) negligence or willful misconduct with respect to any of the decisions made by the Client or any of its directors, officers, employees, agents or affiliates, or (c) a violation of state or federal securities laws by the Client or any of its directors, officers, employees, agents or affiliates.
(b) The Consultant shall protect, defend, indemnify and hold Client and its assigns and attorneys, accountants, employees, officers and director harmless from and against all losses, liabilities, damages, judgments, claims, counterclaims, demands, actions, proceedings, costs and expenses (including reasonable attorneys’ fees) of every kind and character resulting from, relating to or arising out of (a) the inaccuracy, non-fulfillment or breach of any representation, warranty, covenant or agreement made by the Consultant herein, (b) negligence or willful misconduct with respect to any of the decisions made by the Consultant, or (c) a violation of state or federal securities laws by the Consultant.
13. Notices. Any notices required or permitted to be given under this Agreement shall be sufficient if in writing and delivered or sent by email, registered or certified mail, or by Federal Express or other recognized overnight courier to the addresses set forth above for each party.
14. Waiver of Breach. Any waiver by either party or a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by any party.
15. Assignment. This Agreement and the right and obligations of the Consultant hereunder shall not be assignable without the written consent of the Client, except that the Consultant may fully assign its rights and obligations of this Agreement to a company that is wholly owned by the Consultant.
16. Applicable Law/Venue. It is the intention of the Parties hereto that this Agreement and the performance hereunder and all suits and special proceedings hereunder be construed in accordance with and under and pursuant to the laws of the State of Texas and that in any action, special proceeding or other proceedings that may be brought arising out of, in connection with or by reason of this Agreement, the law of the State of Texas shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction on which any action or special proceeding may be instituted. If any legal action is filed by either party regarding this Agreement, the parties hereto irrevocably and unconditionally submit to the exclusive jurisdiction of the state or federal courts sitting in and for Dallas County, Texas. The Parties hereby consent to such exclusive jurisdiction and venue. IN THE EVENT OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PARTIES HERETO KNOWINGLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVE ANY RIGHT TO DEMAND A TRIAL BY JURY.
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17. Severability. All agreements and covenants contained herein are severable, and in the event any of them shall be held to be invalid by any competent court, the Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein.
18. Entire Agreement. This Agreement constitutes and embodies the entire understanding and agreement of the Parties and supersedes and replaces all other or prior understandings, agreements and negotiations between the Parties.
19. Waiver and Modification. Any waiver, alteration, or modification of any of the provisions of this Agreement shall be valid only if made in writing and signed by the Parties hereto. Each party hereto, may waive any of its rights hereunder without affecting a waiver with respect to any subsequent occurrences or transactions hereof.
20. Counterparts and Facsimile Signature. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Agreement by such party. Such facsimile copies shall constitute enforceable original documents.
21. Headings; Interpretation. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement. As used in this Agreement, unless the context expressly indicates otherwise, the word “or” is inclusive and means “and/or” and the word “including” (or any variation of that word) means “including without limitation” or a phrase of equivalent meaning.
[signature page follows]
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IN WITNESS WHEREOF, the Parties have duly executed and delivered this Agreement, effective as of the Effective Date.
CONSULTANT:
WSGS, LLC, a South Carolina limited liability company
| By: | ||
| Bill Tourto, its Manager |
CLIENT:
Vivakor, Inc., a Nevada corporation
| By: | ||
| James Ballengee, Chief Executive Officer |
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Exhibit 10.2
Vivakor, Inc.
5220 Spring Valley Road, Suite 500
Dallas, TX 75242
February 10, 2025
Tyler Nelson
| Re: | Side Letter Related to Transfer of Tyler Nelson Executive Employment Agreement to Vivakor Administration, LLC. |
Ladies and Gentlemen:
Reference is hereby made to that certain Executive Employment Agreement by and between Tyler Nelson, an individual (“Nelson”), and Vivakor, Inc., a Nevada corporation (the “Company”) dated June 13, 2024 (the “Employment Agreement”), that certain Settlement Agreement by and between Nelson and Company dated June 13, 2024 (the “Settlement Agreement”), and the Promissory Note issued by the Company to Nelson dated June 13, 2024 (the “Note”).This letter agreement is referred to as the “Side Letter” herein.
On October 1, 2024, the Company acquired 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, and Silver Fuels Processing, LLC, a Texas limited liability company (collectively, the “Endeavor Entities”) under the terms of a Membership Interest Purchase Agreement among them dated March 21, 2024, as amended (the “MIPA”) (the “Closing”). In connection with the Closing, the Company sent its employees, including Nelson, a Transfer of Employment and Employment Agreement to transfer their employment from the Company to Vivakor Administration, LLC (“AdminCo”) dated October 1, 2024 (the “Nelson Transfer Letter”).
The Company, AdminCo and Nelson are entering into this Side Letter in order clarify certain issues related to Nelson’s employment by the Company and/or AdminCo, specifically:
A. Nelson will remain as the Chief Financial Officer of the Company but his employment will be with AdminCo under the same terms as those in the Employment Agreement, effective on the date of this agreement. To the extent AdminCo does not timely fulfill its obligations to Nelson under the Employment Agreement then the Company will guarantee and timely fulfill those obligations. The Nelson Transfer will not be deemed to be a termination of, breach of, or change of control under, the Employment Agreement and will not trigger any severance or other payments being due to Nelson under the Employment Agreement or the Note. In the event Nelson’s employment with AdminCo is terminated for any reason, the applicable provisions of the Employment Agreement will apply.
B. The Nelson Transfer does not affect the Note and the Note is still the obligation of the Company. Since the Nelson Transfer is not a termination of the Employment Agreement the Nelson Transfer is not a breach or default under the Note and does not trigger any acceleration provisions, interest rate increases, or payment provisions. Likewise, if Nelson’s employment with AdminCo is terminated for any reason, it will trigger any applicable provisions under the Note in the same way as when he was employed by the Company.
C. Under the terms of the Note, the Note is to be paid with five percent (5%) of all funds received by the Company as a result of financing transactions, merger transactions, acquisition transactions, or sale of asset (including sale and leaseback) transactions that are completed after the Effective Date, except funds received from any loans by an officer or director of the Company, with any remaining amounts to be paid in full on December 31, 2024. Upon maturity of the Note on December 31, 2024, the outstanding principal balance plus all accrued unpaid interest was not fully paid by the Company, which under the terms of the Note, the Borrower would be charged a delinquency fee of five percent (5%) of the sum of the outstanding principal balance and all accrued unpaid interest, and future interest would accrue at the Maximum Rate. The Company and Nelson desire to clarify that (i) the five percent (5%) of all funds received by the Company in financing transactions, merger transactions, acquisition transactions or sale of assets (including sale and leaseback) transactions (“Qualifying Transactions”) includes any funds received by the Company’s wholly-owned subsidiaries or sub-subsidiaries (together, the “Subsidiaries”) (ii) the failure to pay Nelson any amounts due to Nelson from Qualifying Transactions by the Subsidiaries that closed prior to the date of this Side Letter will not be deemed to be an Event of Default under the Note and (iii) a five percent (5%) fee will be assessed on the sum of the outstanding principal balance and all accrued but unpaid interest on December 31, 2024, which fee will be assessed and added to the principal balance of the Note December 31, 2024, and Nelson agrees that the interest rate will not increase to the Maximum Rate as a result of an extension of the Maturity Date to June 30, 2025.
D. In exchange for the mutual consideration hereunder, the Company and Nelson agree to extend the Maturity Date under the Note until June 30, 2025.
E. Based on advice from the Company’s tax experts, the Company and Nelson agree that no taxable event will occur for amounts due under the Note until such time as payments are made by the Company to Nelson in accordance with the terms of the Note. Both parties acknowledge that in the event the Company’s financial situation significantly improves and/or the Company raises money that would trigger a payment under the Note but a payment is not made to Nelson then it could change the tax analysis provided by the tax experts and a taxable event for the Company and Nelson could occur. Nelson and the Company agree to attribute 100% of the payments made by the Company in 2024 to the principal balance of the loan, and that no interest was paid down in 2024, and that the Company will withhold applicable taxes from the principal payments made in 2024 and report it as salary on Nelson’s 2024 Form W-2 for tax purposes. Similar to the principal payments, any accrued interest or delinquency fees associated with the Note will be reported to the Internal Revenue Service on the appropriate Form 1099 in the applicable year when the interest or fees are paid to Nelson.
F. Nelson will receive an additional $5,000 as legal fees reimbursement for money he spent on personal attorneys related to this Side Letter, which was largely necessitated by the Nelson Transfer Letter contained. This payment will be processed as an expense reimbursement and received in the next payroll run processed by the Company after the date of this Side Letter.
2
This consent letter may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission or PDF shall be binding upon such party and be deemed to be an original signature hereto.
THIS SIDE LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS.
[SIGNATURE PAGES FOLLOW]
3
| Very Truly Yours, | ||
| NELSON: | ||
| TYLER NELSON, | ||
| an individual | ||
| By: | ||
| Tyler Nelson | ||
| COMPANY: | ||
| VIVAKOR, INC., | ||
| a Nevada corporation | ||
| By: | ||
| Name: | James H. Ballengee | |
| Title: | Chairman, CEO & President | |
[SIGNATURE PAGE TO SIDE LETTER]
4
Exhibit 10.3
Execution Copy
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”) dated effective February 12, 2025 (the “Effective Date”), is by and between Vivakor ADMINISTRATION, LLC, a Texas limited liability company, Employer Flexible HR, LLC (together, the “Company”), and ANDRE JOHNSON, an individual domiciled in [_________] County, Texas (the “Employee”). The Company and Employee may herein be referred to individually as a “Party” or collectively as the “Parties”.
RECITALS
WHEREAS, Employee is an experienced human resources administrator;
WHEREAS, Employee was under an employment agreement with Endeavor Crude, LLC, a Texas limited liability company (“Endeavor”) dated August 16, 2023 where he served as Endeavor’s human resources administrator (the “Endeavor Employment Agreement”);
WHEREAS, on October 1, 2024, Vivakor, Inc., a Nevada corporation (“Vivakor”), acquired Endeavor;
WHEREAS, on October 1, 2024, Vivakor notified Employee that it was assigning the Endeavor Employment Agreement to the Company, however, due to certain changes in the terms of Employee’s employment that were to begin on October 1, 2024, the Company and Employee desire to enter into this Agreement to memorialize the terms of Employee’s employment with the Company and replace the Endeavor Employment Agreement;
WHEREAS, Company desires to employ the Employee pursuant to the terms and conditions herein contained, and Employee desires to be employed by Company upon the terms and conditions herein contained;
NOW THEREFORE, in consideration of the mutual promises, covenants and obligations set forth herein, the Parties agree as follows:
1. Employment. The Company shall employ the Employee and the Employee shall accept such employment subject to the terms and conditions contained in this Agreement applying retroactively to October 1, 2024. From and after the Effective Date, the Employee shall be engaged as an employee of the Company and the Employee and the Company do not intend to create a joint venture, partnership or other relationship that might impose similar such fiduciary obligations on the Employee or the Company in the performance of this Agreement. In all respects not controlled by or set forth in this Agreement, the Employee’s employment shall be at-will according to the laws of the State of Texas.
2. Employee’s Duties. The Employee shall be employed by the Company on a full-time basis. Throughout the term of this Agreement, the Employee will use the Employee’s best efforts and due diligence to assist the Company in the objective of achieving the most profitable operation of the Company and the Company’s affiliated entities consistent with developing and maintaining a quality business operation.
(a) Specific Rights and Duties. From the Effective Date and the term of this Agreement, the Employee shall have the title of Vice President, Human Resources of the Company (and, if applicable, its affiliates and subsidiaries). In this role, Employee will have all the responsibilities, duties and authority as are generally associated with the position of Chief Administrative Officer, including the managing, directing, and supervising the human resources area of the Company (and its affiliates and subsidiaries). The Employee agrees to perform all of the services required to fully and faithfully execute the offices and positions to which the Employee is appointed and such other services as may be reasonably directed by the Chief Executive Officer and/or Chief Financial Officer of the Company in accordance with this Agreement. The Employee’s principal place of employment will be in Dallas County, Texas.
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(b) Employee Handbook, Rules and Regulations. From time to time, the Company or its parent companies may issue policies and procedures applicable to employees and the Employee including an Employment Policies Manual or Employee Handbook. The Employee agrees to comply with such policies and procedures, except to the extent such policies are inconsistent with this Agreement. Such policies and procedures may be supplemented, modified, changed or adopted without notice in the sole discretion of the Company at any time. In the event of a conflict between such policies and procedures and this Agreement, this Agreement shall control unless compliance with this Agreement will violate any governmental law or regulation applicable to the Company or its affiliated entities. Any activity by the Employee that is expressly permitted by this Agreement is hereby deemed by the Company not to violate such policies and procedures.
(c) Licensing and Registration. During the Term, (i) the Employee shall maintain all licenses, registrations, or accreditations necessary under applicable law or as may be required by any professional association, professional sports league, players association, or other regulatory body that are necessary or advisable to fully perform Employee’s duties under this Agreement; and (ii) the Employee shall at all times perform Employee’s employment in accordance with all regulations or other standards of conduct issued or maintained by any applicable governmental authority or professional association. To the maximum extent permitted by applicable law, in the event the Employee breaches the obligations of this Section 2(a), the Employee acknowledges that the Company shall be entitled to claw back, and that the Employee shall be obligated to repay to the Company, (i) any expenses incurred for continuing education or certification to maintain such licenses, registrations, and accreditations, and (ii) any Base Salary, Wages or other compensation paid to Employee during the period in which the Employee failed to comply with such professional. The Employee acknowledges and agrees the Company may satisfy Employee’s repayment obligation by way of deduction from any other amounts owed by the Company to the Employee and authorizes such deduction in accordance with any applicable state law.
3. Employee’s Compensation. The Company agrees to compensate the Employee as follows:
(a) Incentive Equity Signing Bonus. Promptly after the Effective Date, restricted shares of Vivakor’s common stock equal to Two Hundred Fifty Thousand and No/100s U.S. Dollars ($250,000.00), as defined below, shall be paid to the Employee as an incentive equity grant to enter into this Agreement (the “Signing Bonus”). All of the Signing Bonus restricted common stock will be priced per share based on the volume-weighted average price for the preceding five (5) NASDAQ trading days prior to the day of such grant. All shares comprising the Signing Bonus shall be issued under Vivakor’s 2023 Equity and Incentive Plan or successor plan and otherwise in accordance with applicable law and the rules and regulations of The Nasdaq Capital Market, and, in the event that any such shares cannot be issued because compliance with such requirements has not been met, the obligation to issue such shares will be accrued until such time as such compliance requirements have been satisfied. As a condition to receiving the Signing Bonus, the Employee must execute and enter into a lock-up agreement substantially and materially in the form and content set forth on Exhibit “B” hereto.
(b) Base Cash Compensation. Annualized cash salary compensation equal to not less than One Hundred Eighty Thousand and No/100s U.S. Dollars ($180,000) from October 1, 2024 to December 31, 2024, with the annualized cash salary compensation increasing to Two Hundred Thousand and No/100s U.S. Dollars ($200,000.00 USD) effective January 1, 2025, to be paid to the Employee in equal bi-weekly installments (the “Base Compensation”). The Base Compensation may be further increased by the Company from time to time.
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(c) Base Equity Compensation. In addition to Employee’s annual cash compensation, Employee will be issued annual equity compensation in the form of restricted shares of Vivakor’s common stock equal to Seventy Five Thousand and No/100s U.S. Dollars ($75,000.00), as defined below, shall be paid to the Employee in equal quarterly installments each calendar quarter so long as Employee is employed by the Company at the end of each respective calendar quarter (the “Annual Salary Shares”). All of the Annual Salary Shares will be restricted common stock and priced per share based on the volume-weighted average price for the preceding five (5) NASDAQ trading days prior to the end of each applicable calendar quarter. All shares comprising the Annual Salary Shares shall be issued under Vivakor’s 2023 Equity and Incentive Plan or successor plan and otherwise in accordance with applicable law and the rules and regulations of The Nasdaq Capital Market, and, in the event that any such shares cannot be issued because compliance with such requirements has not been met, the obligation to issue such shares will be accrued until such time as such compliance requirements have been satisfied. As a condition to receiving the Annual Salary Shares, the Employee must execute and enter into a lock-up agreement substantially and materially in the form and content set forth on Exhibit “B” hereto.
(d) Annual Incentive Compensation. In connection with the Company acquiring Endeavor, the Company is granting the Employee a one-time cash incentive bonus of $150,000 for services rendered in 2024 to be paid as follows (i) two percent (2%) of all funds received by the Company as a result of financing transactions, merger transactions, acquisition transactions, or sale of asset transactions that are completed after February 15, 2025, except funds received from any loans by an officer or director of the Company, and (ii) all remaining amounts due in full on or before April 30, 2025 (the “Initial Bonus”). In future years, the Employee shall be eligible for such annual bonuses in such amounts up to 100% of the value of his annual Base Compensation and at such times, annual or otherwise, as determined in the sole discretion of the Chief Executive Officer and/or Chief Financial Officer and/or the Compensation Committee of the Board of Directors of Vivakor. Nothing contained herein should be interpreted as guaranteeing Employee any annual bonus except for the Initial Bonus.
(e) Benefits. The Company agrees to extend to the Employee retirement benefits, deferred compensation, travel, tolls, meal, lodging, entertainment, customer development and retention, and any other benefits the Company provides to other full-time employees from time to time on the same terms as such benefits are provided to such individuals, as well as coverage under the Company’s medical, life and disability insurance plans, if any (the “Benefits”). If the Employee is accepted for coverage under such plans, the Company will provide such coverage on the same terms as is customarily provided by the Company to the plan participants as modified from time to time. The Company may condition any such benefits on the Employee paying any amounts which the Company requires other employees to pay with respect to such benefits.
(f) Retirement Plan Contributions. Notwithstanding anything contained herein to the contrary, in lieu of any cash compensation set forth in Sections 3(b), on annual basis Employee may elect, in their sole and absolute discretion, for Company to contribute to Employee’s retirement plan maintained by the Company such amount of cash compensation as directed by Employee, up to the maximum total annual combined contribution limit of employer and employees to retirement plans set forth by the Internal Revenue Service, and to deduct the same from Employee’s Base Cash Compensation, as directed. Such amount shall be remitted as an employer contribution to Employee’s retirement plan maintained by the Company. Such retirement plan contributions shall be deducted by Company on a pre-tax basis, as applicable, from Employee’s cash compensation set forth in Sections 3(b).
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(g) Vacation. The Employee will be entitled to take paid time off, sick leave, and vacation in accordance with the Company’s general employment policies set forth in the Employee Handbook.
(h) Expenses. The Company may reimburse Employee for reasonable, out-of-pocket expenses incurred for the benefit of the Company and in the course of Employee’s employment. In order to receive reimbursement for such expenses, Employee must (i) submit copies of receipts for all such expenses, together with an aggregated expense report, to the Company no later than thirty (30) days after such expenses were incurred; (ii) seek advance approval for any single expenses reasonably anticipated to exceed $1,000.00 individually or $3,000.00 in the aggregate if such expenses relate to the same business purposes (e.g., travel, meals and lodging for an event or conference); and (iii) comply with any applicable expense reimbursement policies of the Company. Reimbursement for all expenses remains subject to Company review and approval. Except to the extent required by applicable law, the Company shall have no obligation to reimburse the Employee for expenses if the foregoing criteria are not met.
(i) Taxes and Withholdings. All compensation payable to the Employee under this Section 3 shall be less all taxes and withholdings required by applicable law.
4. Term. This Agreement shall be for a term commencing on the Effective Date and terminating at the conclusion of the Employee’s employment by the Company, whether by resignation, termination without cause, termination for Cause, or death of the Employee.
5. Termination. This Agreement may be terminated in accordance with the following terms and conditions:
(a) Termination without Cause. The Employee or the Company may terminate the Employee’s employment without Cause at any time by the service of written notice of termination to the Employee specifying an effective date of such termination not sooner than five (5) business days after the date of such notice (the “Termination Date”). In the event the Employee is terminated without Cause by the Company, the Employee shall be entitled to: (i) the then-current Base Cash and Equity Compensation in an amount equal to twelve (12) calendar months’ pay; (ii) excepting participation in any retirement or deferred compensation plan maintained by the Company, continuation of the Benefits at the levels and upon the terms provided on the date of termination hereunder, for twelve (12) calendar months’ following termination of Employee’s employment; (iii) all accrued but unused paid time off, vacation days, personal days, and sick days, and (iv) the cost of outplacement services (the “Termination Compensation”).
(b) Termination for Cause. The Company may terminate this Agreement for Cause. For purposes of this Agreement, “Cause” means: (i) the willful and continued failure of the Employee to perform substantially the Employee’s duties with the Company or one of the Company subsidiaries (other than a failure resulting from incapacity due to physical or mental illness); or (ii) the willful engaging by the Employee in illegal conduct, gross misconduct, or a clearly established violation of the Company’s written policies and procedures, in each case which is materially and demonstrably injurious to the Company. For purposes of this provision, an act or failure to act, on the part of the Employee, will not be considered “willful” unless it is done, or omitted to be done, by the Employee in bad faith or without reasonable belief that the Employee’s action or omission was in the best interests of the Company. In the event this Agreement is terminated for Cause, the Company shall have only the obligation to pay (x) accrued but unpaid Base Compensation and (y) accrued but unpaid paid time off, including sick days, vacation days, and personal days, to the Employee after the effective date of such termination.
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(c) Termination for Diminution of Duties. If the Employee resigns their Employment for (i) a material and adverse diminution of the Employee’s duties, responsibilities or authorities, (ii) a reduction in the Base Compensation, (iii) a relocation of the Employee’s principal place of employment more than fifty (50) miles outside the Dallas-Fort Worth metropolitan area (each, a “Diminution”), then the Employee shall be entitled to the Termination Compensation. The Employee must deliver written notice of a Diminution to the Board of Directors of the Company and permit the Company thirty (30) days to cure such Diminution.
(d) Payment. The Termination Compensation under this Section 5 shall be paid in equal installments in equal bi-weekly installments for the period of time such Termination Compensation is calculated. All payments shall be made in U.S. Dollars, in the form and manner in which the Employee was receiving his Base Compensation at the time of termination, unless the parties shall otherwise mutually agree, less applicable governmental withholdings. Subsequent to a termination without Cause of the Employee’s employment, the receipt of a notice of Diminution of Duties by the Board of Directors, or a Change in Control, the Company shall be prohibited from terminating the Employee for Cause.
(e) Release. As a condition to receiving the Termination Compensation, the Company may require the Employee to execute a release materially and substantially in the form and content attached hereto as Exhibit “A” at the time of the termination of Employee’s employment. The Company shall be obligated to pay the Employee in accordance with the terms hereof only if the Employee returns an originally-executed copy of such release to the Company’s designated representative.
6. Indemnification. In addition to any rights Employee may have under the Company’s charters, bylaws, or other governing documents, the Company agrees to indemnify Employee and hold Employee harmless, both during the Term and thereafter, against all costs, expenses (including, without limitation, fines, excise taxes and attorneys’ and accountants’ fees) and liabilities (other than settlements to which the Company does not consent, which consent shall not be unreasonably withheld) (collectively, “Losses”) reasonably incurred by Employee in connection with any claim, action, proceeding or investigation brought against or involving Employee with respect to, arising out of or in any way relating to Employee’s employment with the Company; provided, however, that the Company shall not be required to indemnify Employee for Losses incurred as a result of Employee’s intentional misconduct or gross negligence (other than matters where Employee acted in good faith and in a manner he reasonably believed to be in and not opposed to the Company’s best interests). Employee shall promptly notify the Company of any claim, action, proceeding or investigation under this paragraph and the Company shall be entitled to participate in the defense of any such claim, action, proceeding or investigation and, if it so chooses, to assume the defense with counsel selected by the Company; provided that Employee shall have the right to employ counsel to represent them (at the Company’s expense) if Company counsel would have a conflict of interest in representing both the Company and Employee. The Company shall not settle or compromise any claim, action, proceeding or investigation without Employee’s consent, which consent shall not be unreasonably withheld; provided, however, that such consent shall not be required if the settlement entails only the payment of money (and no admission of guilt or wrong doing by Employee) and the Company fully indemnifies Employee in connection therewith. The Company further agrees to advance any and all expenses (including, without limitation, the fees and expenses of counsel) reasonably incurred by Employee in connection with any such claim, action, proceeding or investigation. The Company, as soon as reasonably possible, will obtain and maintain a policy of directors’ and officers’ liability insurance covering Employee and, notwithstanding the expiration or earlier termination of this Agreement, the Company shall maintain a directors’ and officers’ liability insurance policy covering Employee for a period of time following such expiration or earlier termination equal to the statute of limitations for any claim that may be asserted against Employee for which coverage is available under such directors’ and officers’ liability insurance policy. The provisions of this paragraph shall survive the termination of this Agreement without limitation.
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7. Arbitration. Any dispute, controversy or claim arising out of or relating in any way to the employment of the Employee or this Agreement, including without limitation any dispute concerning the construction, validity, interpretation, enforceability or breach of Agreement, shall be solely and exclusively resolved by confidential, binding arbitration upon a Party’s submission of the dispute to arbitration. The demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen, and in no event shall it be made more than two (2) years from when the aggrieved Party knew or should have known of the controversy, claim, dispute or breach.
(a) This agreement to arbitrate shall be specifically enforceable. A Party may apply to any court with jurisdiction for interim or conservatory relief, including without limitation a proceeding to compel arbitration.
(b) The arbitration shall be conducted by one (1) arbitrator to be selected by the Employee. Any Party may initiate arbitration by serving notice upon the other Party and filing a demand for arbitration with the American Arbitration Association.
(c) Unless waived in writing by all parties to the arbitration, the arbitration shall be conducted in accordance with the then-existing Expedited Labor Arbitration Rules of the American Arbitration Association, and shall be held and conducted in Dallas County, Texas.
(d) Except as may be required by law, neither Party nor its representatives may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of the other Party.
(e) No later than thirty (30) days after the selection of an arbitrator, each Party shall prepare and deliver to both the arbitrator and other Party its last, best offer for fully and finally resolving the dispute and a memorandum in support thereof. The Parties shall also provide the arbitrator with a copy of this Agreement. Each Party may submit to the arbitrator (with a copy to the other Party) a rebuttal to the other Party’s support memorandum and will at such time have the opportunity to amend its last such offer based on any new information contained in the other Party’s support memorandum. Within forty-five (45) days after the arbitrator’s appointment, the arbitrator will select from the two (2) proposals provided by the Parties the proposal such arbitrator believes is most consistent with the intent of the Parties when this Agreement was entered into; provided, however, the arbitrator may not alter the terms of this Agreement nor the proposals of either Party.
(f) Notwithstanding the foregoing, the arbitrator shall have no authority to award punitive, consequential, special, or indirect damages, or equitable relief. The arbitrator shall award interest from the time of the breach to the time of payment of the award at the rate equal to the prime rate of interest published in the most recent edition of The Wall Street Journal at the time of any award plus three percent (3%).
(g) The cost of the arbitration proceeding, as applicable (including, without limitation, reasonable attorneys’ fees and costs, expert fees, arbitrator fees, and related costs and expenses), shall be borne by the non-prevailing Party. The cost of any proceeding in court to confirm or to vacate any arbitration award shall be borne by the non-prevailing Party thereto. For purposes of this subsection, the “non-prevailing Party” is the Party whose proposal was not selected by the arbitrator for award.
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(h) The arbitrator’s award or decision shall be final, binding, and non-appealable. It is specifically understood and agreed that any Party may enforce any award rendered pursuant to the arbitration provisions hereof by bringing suit in a court of competent jurisdiction situated in Dallas County, Texas. IN RESPECT OF ANY ENFORCEMENT ACTION OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS AND WAIVES ALL OBJECTION TO THE CONTRARY TO THE SOLE AND EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT OF COMPETENT JURISDICTION LOCATED WITHIN DALLAS COUNTY, STATE OF TEXAS, WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON HIM, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY FIRST CLASS REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, DIRECTED TO HIM AT THE ADDRESS SPECIFIED IN THIS AGREEMENT.
(i) Employee has read and understands this arbitration provision and has had the opportunity to seek independent legal counsel regarding the process and potential impact of binding arbitration.
8. Restrictive Covenants.
(a) Acknowledgments. The Employee understands and acknowledges that by virtue of the Employee’s employment with the Company, the Employee will have access to and knowledge of Confidential Information and trade secrets of the Company, will be in a position of trust and confidence with the Company, and will benefit from the Company’s goodwill. The Employee understands and acknowledges that the Company invested significant time and expense in developing the Confidential Information and goodwill. The Employee further understands and acknowledges that the restrictive covenants below are necessary to protect the Company’s legitimate business interests in its Confidential Information and goodwill. The Employee further understands and acknowledges that the Company’s ability to reserve these for the exclusive knowledge and use of the Company is of great competitive importance and commercial value to the Company and that the Company would be irreparably harmed if the Employee violates the restrictive covenants below.
(b) Non-Solicitation of Employees. Employee understands and acknowledges that the Company has expended and continues to expend significant time and expense in recruiting, training, and retaining its employees and that the loss of employees would cause significant and irreparable harm to the Company. Employee agrees and covenants, during the term of the Employee’s employment with the Company and for a period of twelve (12) months from the termination of the Employee’s employment with the Company for any reason, not to, on the Employee’s own behalf or on behalf of any other person or entity other than the Company, directly or indirectly, solicit, hire, recruit, attempt to hire or recruit away from the Company, or induce the termination of employment or services of, any employee, consultant, or independent contractor employed or engaged by the Company in the twelve (12) months preceding the last day of the Employee’s employment with the Company.
(c) Non-Interference. The Employee agrees and covenants, during the first twelve (12) months, to run consecutively, beginning on the last day of the Employee’s employment with the Company for any reason, not to directly or indirectly induce, influence, or encourage any customer, supplier, vendor, referral source, or other business relation of the Company to negatively alter, terminate, diminish, or breach its contractual or other business relationship with the Company or to enter any transaction that would result in any of the foregoing.
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(d) Acknowledgments. With regard to the covenants set forth in this Section 8, the Employee acknowledges and agrees that: (i) the restrictions are ancillary to an enforceable agreement, including the provisions of this Agreement regarding disclosure, ownership and use of Confidential Information, and goodwill of the Company; (ii) the limitations as to time, geographical area, and scope of activity to be restrained are reasonable and acceptable to the Employee, and do not impose any greater restraint than is reasonably necessary to protect the goodwill, Confidential Information, and other business interests of the Company; (iii) performance by the Employee of the covenants and agreements contained herein, and the enforcement by the Company of the provisions contained herein, will cause no undue hardship on the Employee; and (iv) the restrictions in this Section 8 are in addition to, and not in lieu of, any other restrictive covenant agreements between the Employee and the Company.
(e) Reformation. If any provision in this Section 8 is determined to be prohibited by or invalid under applicable law, the prohibited or invalid provision(s) shall be modified or deleted and enforced to the maximum reasonable extent allowed by law to protect the legitimate business interests of the Company. However, the Parties have carefully read and understand the provisions herein and agree that all aspects of this Agreement are reasonable. Further, each of the restrictions in this Agreement shall be construed as independent covenants, and the existence of any claim or cause of action of the Employee against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and restrictions contained herein.
(f) Tolling. If the Employee violates any of the terms of the restrictive covenant obligations articulated in this Section 8, the term of the obligation at issue will be tolled for the period during which the Employee is in violation and will be deemed to run from the first date on which the Employee ceases to be in violation of such obligation.
(g) Notice to Subsequent Employer. When the Employee’s employment with the Company terminates for any reason, the Employee agrees to notify any subsequent employer of the restrictive covenants sections contained in this Agreement prior to accepting an offer of employment. The Employee authorizes the Company to provide a copy of the restrictive covenants sections of this Agreement to third parties, including but not limited to, the Employee’s subsequent or anticipated future employer.
(h) Non-Disparagement. The Employee agrees and covenants that the Employee will not at any time make, publish or communicate to any person or entity or in any public forum any defamatory or untrue disparaging remarks, comments, or statements concerning the Company or its businesses, or any of its employees, officers, investors and other associated third parties.
9. Exit Obligations. Upon (a) voluntary or involuntary termination of the Employee’s employment or (b) the Company’s request at any time during the Employee’s employment, the Employee shall (i) provide or return to the Company any and all Confidential Information, Company property, and all other documents, data, and materials belonging to the Company and stored in any fashion that are in the possession or control of the Employee; and (ii) (with the Company’s written permission) delete or destroy all copies of any such documents and materials not returned to the Company that remain in the Employee’s possession or control, including those stored on any non-Company devices, networks, storage locations and media in the Employee’s possession or control. Employee agrees to provide the Company access to any personally owned devices, networks, storage locations or media to confirm Employee’s compliance with the terms of this Section 9.
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10. Cooperation. The Parties agree that certain matters in which the Employee will be involved during the term may necessitate the Employee’s cooperation after the end of the Employee’s employment. Accordingly, following the termination or resignation of the Employee’s employment for any reason, to the extent requested by the Company, the Employee shall cooperate with the Company in connection with matters arising out of the Employee’s service to the Company, including, but not limited to, successfully transferring current and prospective client and other business relationships to the Employee’s successor, successfully transferring current projects to the Employee’s successor, and assisting the Company’s counsel with pending or future legal matters.
11. Representation. The Employee represents and warrants to the Company, and the Employee acknowledges that the Company has relied on such representations and warranties in employing the Employee, that neither the Employee’s duties as an employee of the Company nor the Employee’s performance of this Agreement will breach any other agreement to which the Employee is a party, including without limitation, any agreement or obligation with a former employer or any agreement or obligation limiting the use or disclosure of any information acquired by the Employee prior to the Employee’s employment by the Company. In the course of performing the Employee’s work for the Company, the Employee will not disclose or make use of any information, documents or materials that Employee is under any obligation to any other party to maintain in confidence.
12. Notice Regarding Trade Secrets. The Employee is hereby notified in accordance with the Defend Trade Secrets Act of 2016 that the Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.
13. Conflicting Duties. The Employee hereby confirms that he is under no contractual commitments inconsistent with his obligations set forth in this Agreement. The Company agrees that the Employee may, during the Term of this Agreement, perform services for Ballengee Holdings, LLC, so long as such services are not inconsistent with the provisions of this Agreement and Employee is still able to work full-time for the Company.
14. Miscellaneous. The Parties further agree as follows:
(a) Time. Time is of the essence with respect to this Agreement.
(b) Notices. Any notice, payment, demand or communication required or permitted to be given by any provision of this Agreement will be in writing and will be deemed to have been given when delivered personally or by facsimile to the party designated to receive such notice, or on the date following the day sent by overnight courier, or on the third (3rd) business day after the same is sent by certified mail, postage and charges prepaid, directed to the following address or to such other or additional addresses as any party might designate by written notice to the other party:
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| To the Company: | Vivakor Administration, LLC | |
|
5220 Spring Valley Rd., Ste. 500 Dallas, TX 75254 Attn: Legal Email [email protected] |
| To the Employee: | Andre Johnson | |
|
[________________] [________________] Cell: [_____________] Email: [email protected] |
(c) Assignment. The Company may assign this Agreement in whole upon the written consent of Employee, which shall not be unreasonably denied or delayed. The Employee may not assign this Agreement in whole or in part.
(d) Governing Law; Venue. This Agreement shall be interpreted in accordance with the laws of the State of Texas, without regard to its rules regarding conflicts of laws. Any proceeding or other legal action arising out of or relating to this Agreement or the enforcement of any provision of this Agreement that is not subject to arbitration under Section 7 shall exclusively be brought or otherwise commenced in any state or federal court located in Dallas County, Texas, and the parties irrevocably submit to the exclusive jurisdiction of such courts.
(e) Construction. This Agreement is intended to be interpreted according to its plain meaning within the four corners of the document. Headings are used for reference only and are not intended to have any binding effect on the construction hereof.
(f) Severance. If any provision of this Agreement or the application thereof is determined, to any extent, to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision, shall not be affected thereby, and each other term and provision of this Agreement shall remain valid and enforceable to the fullest extent permitted by law.
(g) Entire Agreement. This Agreement constitutes the complete agreement of the Parties with respect to the subject matter contemplated herein. Each and every prior agreement, whether oral or written, concerning the Employee’s employment is hereby expressly superseded and replaced by this Agreement, including, but not limited to, the Endeavor Employment Agreement. This Agreement may not be modified except in a writing signed by both parties.
(h) Binding Effect. This Agreement shall be binding on the parties and their respective successors, legal representatives and permitted assigns. In the event of a merger, consolidation, combination, dissolution or liquidation of the Company, the performance of this Agreement will be assumed by any entity which succeeds to or is transferred the business of the Company as a result thereof.
[Signature page(s) follow; the remainder of this page is intentionally blank.]
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COMPANY’S SIGNATURE PAGE
IN WITNESS WHEREOF, the duly authorized representatives of the Company have executed and entered into this Agreement as of the Effective Date.
| COMPANY: | ||
| VIVAKOR ADMINISTRATION, LLC, | ||
| a Texas limited liability company | ||
| By: | ||
| Name: | James H. Ballengee | |
| Title: | Chairman, President & CEO | |
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EMPLOYEE’S SIGNATURE PAGE
IN WITNESS WHEREOF, the Employee has executed and entered into this Agreement as of the Effective Date.
| EMPLOYEE: | |
| Andre Johnson, individually |
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EXHIBIT “A”
FORM OF
GENERAL RELEASE AND WAIVER
For and in consideration of the payments and benefits due to the undersigned under that certain Employment Agreement dated February 12, 2025, executed by and between Vivakor Administration, LLC, as Company, and Andre Johnson, as Employee (the “Employment Agreement”), and for other good and valuable consideration, the undersigned (the “Employee”) hereby agrees, for the Employee, the Employee’s spouse and child or children (if any), the Employee’s heirs, beneficiaries, devisees, executors, administrators, attorneys, personal representatives, successors and assigns, to forever release, discharge and covenant not to sue Vivakor Administration, LLC, any of its parents, members, subsidiaries, or any of their affiliates (collectively, the “Company”), or any of their predecessors, successors, or assigns, and, with respect to such entities, their officers, directors, trustees, employees, agents, administrators, representatives, attorneys, insurers and fiduciaries, past, present and future (the “Released Parties”) from any and all claims relating to the Employee’s employment or other service relationship with the Released Parties, including but not limited to any claims arising out of, or related to the Employee’s compensation as an employee or other service provider of or to the Released Parties, or the Employee’s separation from employment with the Released Parties, in each case which the Employee now has or may have against the Released Parties, whether known or unknown to the Employee, by reason of facts which have occurred on or prior to the date that the Employee has signed this Release. Such released claims include, without limitation, any and all claims under federal, state or local laws pertaining to employment, including, without limitation, the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et. seq., the Fair Labor Standards Act, as amended, 29 U.S.C. Section 201 et. seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101 et. seq., the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981 et. seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 et. seq., the Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 et. seq., and any and all federal, state, foreign or local laws regarding employment discrimination or wage payment and/or federal, state, foreign or local laws of any type or description regarding employment.
The Employee has read this Release carefully, acknowledges that the Employee has been given at least forty-five (45) days to consider all of its terms and has been advised to consult with an attorney and any other advisors of the Employee’s choice prior to executing this Release, and the Employee fully understands that by signing below the Employee is voluntarily giving up rights which the Employee may have to sue or bring any other claims against the Released Parties, including rights and claims under the Age Discrimination in Employment Act. The Employee also understands that the Employee has a period of seven (7) days after signing this Release within which to revoke his or her agreement, and that neither the Company nor any other person is obligated to make the payments or provide the benefits under the Employment Agreement that are conditioned upon the execution and non-revocation of this Release until eight (8) days have passed since the Employee’s signing of this Release without the Employee’s signature having been revoked. Finally, the Employee has not been forced or pressured in any manner whatsoever to sign this Release, and the Employee agrees to all of its terms voluntarily.
Notwithstanding anything else herein to the contrary, this Release shall not: (i) affect any rights of the Employee to indemnification or liability insurance coverage the Employee may have under the by- laws (or similar governing documents) of any entity constituting the Company or applicable law, (ii) release any claim that cannot be released as a matter of applicable law, (iii) bar Employee’s right to file an administrative charge with the Equal Employment Opportunity Commission (EEOC) and/or to participate in an investigation by the EEOC, although this Release does bar Employee’s right to recover any personal relief if Employee or any person, organization, or entity asserts a charge on Employee’s behalf, including in a subsequent lawsuit or arbitration, (iv) release the Company’s legally binding obligations under the Employment Agreement, (v) claims to any benefit entitlements vested as the date of separation of Employee’s employment, or (vi) release any of the Employee’s rights as a holder of vested equity securities or options or other rights in respect thereof.
Page A-1
The Employee has not been forced or pressured in any manner whatsoever to sign this Release, and the Employee agrees to all of its terms voluntarily. This Release shall be governed by Texas law, without regard to its rules regarding conflicts of laws.
| EMPLOYEE: | |
| [EXHIBIT ONLY—DO NOT EXECUTE] | |
| Andre Johnson, individually |
Page A-2
EXHIBIT “B”
FORM OF
LOCK-UP AGREEMENT
This LOCK-UP AGREEMENT (this “Lock-Up Agreement”) is made and entered into as of February 12, 2025, by and between Vivakor, Inc., a Nevada corporation (the “Company”) and the undersigned holder of shares of the Company’s common stock (the “Holder” and, together with the Company, the “Parties”). For all purposes of this Agreement, “Holder” includes any affiliate or controlling person of Holder, and any other agent, representative or other person with whom Holder is acting in concert.
WHEREAS, the Parties have entered into that certain Employment Agreement (the “Employment Agreement”), dated February 12, 2025, by and between the Company and the Holder, pursuant to which, and subject to the terms and conditions set forth therein, the Company will employ the Holder as an officer of the Company;
WHEREAS, pursuant to the Employment Agreement, the Holder will receive shares of the Company’s common stock, par value $0.001 per share, as a Signing Bonus and additional shares as part of his annual compensation , and may receive additional shares as a part of any bonus (together, the “Lock-Up Securities”);
WHEREAS, as a condition and inducement to the willingness of the Company to consummate the transactions contemplated by the Employment Agreement, the Holder has agreed to certain transfer restrictions with respect to the Lock-Up Securities held by the Holder immediately following the granting and award thereof (the “Granting Date”).
NOW THEREFORE, in consideration of the foregoing, and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the Holder and the Company hereby agree as follows:
1. Lock-Up Period. The Holder agrees that, from the Granting Date until a date that is eighteen (18) calendar months from the date thereof (such period, the “Lock-Up Period”), the Holder shall be subject to the lock-up restrictions set forth in Section 2 below.
2. Lock-Up Restriction.
(a) Lock-Up. During the Lock-Up Period, the Holder will not offer, sell, contract to sell, or otherwise transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the sale, transfer or disposition, whether by actual or effective economic sale or disposition due to cash settlement or otherwise) by the Holder or any affiliate of the Holder or any person in privity with the Holder or any affiliate of the Holder), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the U.S. Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, with respect to the Lock-Up Securities, unless such transaction is a Permitted Disposition (as defined below).
(b) Permitted Disposition. A “Permitted Disposition” shall include the following: (i) transfers of Lock-Up Securities to a trust or affiliated entity for the benefit of the undersigned or as a bona fide gift, by will or intestacy or to a family member or trust for the benefit of a family member of the undersigned (for purposes of this Lock-Up Agreement, “family member” means any relationship by blood, marriage or adoption, not more remote than the second degree or consanguinity or affinity); (ii) transfers of Lock-Up Securities to a charitable organization or educational institution; (iii) transfers of the Lock-Up Securities by the Holder upon the prior written consent of the Company; provided that in the case of any transfer pursuant to the foregoing clauses (i) - (iii), (A) any such transfer shall not involve a disposition for value, (B) each transferee shall sign and deliver to the Company a lock-up agreement substantially in the form of this Lock-Up Agreement and (C) no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made, or (iv) a pledge or hypothecation of the Lock-Up Securities as collateral for indebtedness.
Page B-1
(c) Stop Orders. The Holder further acknowledges and agrees that the Company is authorized to, and the Company agrees to, place “stop orders” on its books to prevent any transfer of any Lock-Up Securities of the Company held by the Holder in violation of this Lock-Up Agreement. The Company agrees not to allow any transaction to occur that is inconsistent with this Lock-Up Agreement.
3. Miscellaneous.
(a) At any time, and from time to time, after the signing of this Lock-Up Agreement, the Holder will execute such additional instruments and take such action as may be reasonably requested by the Company to carry out the intent and purposes of this Lock-Up Agreement.
(b) This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either Party against the other concerning the transactions contemplated by this Lock-Up Agreement shall be brought only in the state courts of Nevada or in the federal courts located in the State of Nevada. The Parties hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based on forum non conveniens. The Parties hereto and to any other agreements referred to herein or delivered in connection herewith agree to submit to the in personam jurisdiction of such courts and hereby irrevocably waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees and costs. In the event that any provision of this Lock-Up Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
(c) Any and all notices or other communications given under this Lock-Up Agreement shall be in writing and shall be deemed to have been duly given on (i) the date of delivery, if delivered in person to the addressee, (ii) the next business day if sent by overnight courier, or (iii) three (3) days after email, read receipt requested, to the party entitled to receive same, at his or its address or email address set forth below:
If to the Company:
Vivakor, Inc.
5220 Spring Valley Rd., Ste. 500
Dallas, TX 75254
Attn: Pat Knapp
Email: [email protected]
If to the Holder:
Andre Johnson
[________________]
[________________]
Page B-2
(d) The restrictions on transfer described in this Lock-Up Agreement are in addition to and cumulative with any other restrictions on transfer otherwise agreed to by the Holder or to which the Holder is subject to by applicable law.
(e) This Lock-Up Agreement shall not be assigned in whole or in part, without the prior written consent of the other Party. Except as otherwise provided herein, this Lock-Up Agreement shall be binding upon Holder, its legal representatives, and permitted successors and assigns.
(f) This Lock-Up Agreement may be executed and delivered in two or more counterparts (including by means of electronic mail), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(g) The Company agrees not to take any action or allow any act to be taken which would be inconsistent with this Lock-Up Agreement.
(h) The terms and provisions of this Lock-Up Agreement may only be amended by a written instrument signed by the Company and the Holder.
[Signature page follows; the remainder of this page is intentionally blank.]
Page B-3
IN WITNESS WHEREOF, the Parties hereto and/or their duly authorized representatives have executed and entered this Lock-Up Agreement as of the date first above written.
| COMPANY: | ||
| VIVAKOR, INC., a Nevada corporation | ||
| By: | [EXHIBIT ONLY—DO NOT EXECUTE] | |
| Name: | [●] | |
| Title: | [●] | |
| HOLDER: | ||
| [EXHIBIT ONLY—DO NOT EXECUTE] | ||
| Andre Johnson | ||
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