EX-10.59 27 vivakor_ex10-59.htm EXHIBIT 10.59

 

Exhibit 10.59

 

 

Schedule No. 004, dated August 9, 2024

 

This Schedule hereby fully incorporates by reference that certain Master Agreement No. 1462 dated December 28, 2021 (the “Master Agreement”) between Maxus Capital Group, LLC, as Lessor, and White Claw Colorado City, LLC, as Lessee, and Jorgan Development, LLC, as Co-Lessee, jointly and severally as Lessee.

 

LESSEE AGREES TO LEASE THE DESCRIBED EQUIPMENT FROM LESSOR, AND LESSOR BY ACCEPTANCE OF THIS SCHEDULE AGREES TO LEASE THE EQUIPMENT TO LESSEE, ON THE TERMS AND CONDITIONS SET FORTH IN THIS SCHEDULE AND THE MASTER AGREEMENT, WHICH IS INCORPORATED HEREIN BY REFERENCE.

 

Equipment Description:

 

Quantity   Description
1   Compressed Air and Gas Equipment: UD145+ (S/N: WFL2349658)
1   660 Gallon Vertical Air Tank (165 PSI) Power Coat Paint
1   Compressed Air Equipment: SO T.T GA37+-45+ (S/N: API218055)
1   Oil Injected Screw Compressor: GA37+ A 125 MEAF 460 (234.4 CFM @ 125PSI Oil Injected Screw Compressor: FX150N(E11) 460/60-F
1   Oil Injected Screw Compressor: GA37+P (S/N: AP1443572)
1   Oil Injected Screw Compressor: FX150N (S/N: ITJ775233)
1   660 Gallon Vertical Air Tank (150 PSI)
1   660 Gallon Vertical Air Tank (165 PSI)
1   Rectangular Water Tank (20,000 Gallons)
1   Cylindrical Water Tank (6,000 Gallons)
1   1976 Trinity 12,000 Gallon Skid Mounted Tank: 250PSA (S/N: 609442)
1   Metal Building (60’ X 130’) with Portal Framing and 6’ Overhang
27   Safety Bollards
9   3” Check Valves - Swing Check 150
7   3” Ball Valves - FP CS 150
9   3” Ball Valves - Ohio LVR CS 150
5   2” Ball Valves - Sharp CS/SS
3   40’ L x 3” W Pipes
250   3” STD BLK PE IMP Pipes
6   4” Ball Valves - FP CS 150
17   3” Ball Valves - FP CS 150
9   3” Check Valves - Swing Check 150
1   Scully ST-47-115 ELK/D
1   Steel Tank (10’ X 16’) - Painted White
1   (399 Feet) 2” XH Black PE IMP Pipe (A53B ERW)
1   (21 Feet) 4” STD Black PE IMP Pipe (A53B ERW)
1   (40 Feet) 2” - 3000 FS SKT W 90 ELL Pipe
1   (6 Feet) 2” - 3000 FS SKT/W 45 ELL Pipe
6   2” Flange RF SW STD 150#
12   4” PTFE U-Bolts with 1/8” FTFE Pad
16   2” PTFE U-Bolts with 1/8” PTFE Pad
24   1” PTFE U-Bolts with 1/8” PTFE Pad
1   (1,414 Feet) 6 foot Commercial Chain Link Fence; 2” x 9 GA KT Fabric, 2 7/8” Terminal
1   Posts, 1 7/8” Line Post, 1 5/8” Top Rail & 3 Strands of Barbwire
1   34 Foot Wide Commercial Cantilever Gate, 4” Posts and Latch to Install Pad Lock
1   Oil / Water Separator (P/N: 15-00-280)
1   Oil / Water Separator Tank Adders with Oil Skimmer, Voraxial Feed and Return Line Plumbing, Suction / Drain Line on Oil / Water Separator System, and 8” Manifold
1   Plumbing Adder for Oil / Water Separator Discharge Line

 

The Equipment is further defined and described on the attached Exhibit A - Equipment Description (the “Equipment”)

 

 

Schedule Page 2 of 4

Maxus Lease No. 1462-004

 

1. Base Monthly Rental:   $32,161.00. The Base Monthly Rental shall be adjusted prior to the Base Term Commencement Date in accordance with changes in the 3-Year Interest Rates, as reported in the Federal Reserve Statistical Release H.15 under the heading “Treasury constant maturities, Nominal,” as of the business day preceding the date on which all of the Equipment is accepted for purposes of the Lease as evidenced by the Installation Certificate. If, for the business day preceding the date on which the Equipment is accepted, the interest rate on the aforementioned 3-Year Interest Rates is greater than 4.49% (the “Benchmark Rate”), the Base Monthly Rental will be adjusted as follows: for each one one- hundredth of one percent (.01%) variance, all rent amounts due pursuant to this paragraph will be increased (in accordance with the variance from the 3-Year Interest Rate) by $6.00 (the “Rental Adjustment Factor”).
       
2. Equipment Location:   18511 Beaumont Highway, Houston, TX 77049 as further described in Exhibit A
       
3. Equipment Return Location:   To be determined by Lessor
       
4. Expected Delivery Date:   Unless and until Lessee has executed an Installation Certificate, Lessor may establish the actual delivery date by reference to the shipping records of the Supplier or the shipper or by other reliable means.
       
5. Base Term:   48 months
       
6.

Lessee Address for Notices:

(if different from Master Agreement)

   N/A
       
7. Value of Calculation for Stipulated Loss Value:   $1,200,000.00
       
8. Special Terms:   i.) Security Deposit to be held by Lessor in any of its accounts without the payment of interest, and to be applied by Lessor as set forth in Section 19 of the Master Agreement: $32,161.00
       
      ii.) Prior to Acceptance: Prior to the receipt by Lessor of an executed Installation Certificate, including during a period of progress payments, Lessor may, in its sole discretion, cease funding the purchase of Equipment if Lessor determines in its commercially reasonable discretion that a material adverse change has occurred in Lessee’s financial condition or business, after which determination Lessee will immediately repay all amounts advanced by Lessor plus interest and charges due.
       
      iii.) Lessor irrevocably consents, agrees to, and approves the execution and entering into by Lessee of that certain Equipment Sublease Agreement of even date herewith by and between Lessee, as Sublessor, and VivaVentures Remediation Corporation, as Sublessee (the “Sublease”) pursuant to Master Agreement Section 9(c). Furthermore, Lessor permits VivaVentures Remediation Corporation to obtain at their expense the insurance conforming with the Master Agreement pursuant to Section 15 thereof.
       
      iv.) Lessee shall have the right to exercise an early buyout option with respect to the Equipment in accordance with the terms of this section. To exercise such right: (a) no Event of Default, or event or condition which, with the giving of notice or the passage of time or both, would constitute an Event of Default, shall have occurred under this Lease; and (b) Lessee shall have given Lessor prior written notice of its election to exercise such option, which notice shall designate the respective early purchase option to be exercised and shall be given no more than 180 days, nor less than 120 days prior to the applicable EBO Date, as such term is hereafter defined. Upon such exercise, Lessee shall purchase all but not less than all of the Equipment covered by this Lease, effective as of the Base Monthly Rent due date which falls exactly on the third anniversary of the Base Term Commencement Date (the “EBO Date”), by paying Lessor, in immediately available funds, the sum of the amount listed below, plus all Base Monthly Rent, including the Base Monthly Rent amount due on such EBO Date, and all other amounts then due and payable under this Lease as of such EBO Date. Upon receipt of such sum, together with any applicable taxes then or thereafter due, Lessor shall execute and deliver to Lessee a bill of sale for the Equipment, without representation or warranty except that the Equipment shall be free and clear of any liens, claims or encumbrances created by or through Lessor:
       
      Early Buyout Option Amount for 36 months: $374,701.62

 

 

Schedule Page 3 of 4

Maxus Lease No. 1462-004

 

      v.) End of Base Term Options: Provided that no Event of Default or event or condition which, with the giving of notice or the lapse of time or both, would constitute an Event of Default has occurred, at the end of the Base Term of the Lease, Lessee may elect one of the following options: (1) purchase all, but not less than all, of the Equipment for its then fair market value; or (2) renew the Lease for a mutually agreeable term and rental payment at the Equipment’s then fair market value; or (3) return the Equipment to a location within the continental United States to be designated by Lessor, together with a payment to Lessor of a refitting / restocking fee equal to fifteen percent (15%) of the Value of Calculation for Stipulated Loss Value. For purposes of this paragraph, and in lieu of any other definition thereof, “fair market value” means the value determined by Lessor in its reasonable discretion in accordance with its usual procedures, subject to an appraisal if reasonably requested by Lessee at the expense of Lessee with an appraiser selected by Lessor. If Lessee elects to exercise its purchase option, upon receipt of such purchase price, together with any applicable taxes then or thereafter due, Lessor shall execute and deliver to Lessee a bill of sale for the Equipment, without representation or warranty except that the Equipment is free and clear of any liens, claims or encumbrances created by or through Lessor. Lessee covenants that it will not enter into negotiations for future lease or financing transactions with Lessor’s Assignee without prior written consent of Lessor.
       
      vi.) Financial Covenants:
       
      (a) Fixed Charge Coverage Ratio: Lessee shall maintain a Fixed Charge Coverage Ratio of not less than 2.50 to 1.00, calculated and tested as of the last day of each fiscal quarter during the Base Term on a trailing twelve-month basis beginning with the fiscal year ending December 31, 2024. As used herein, “Fixed Charge Coverage Ratio” shall be defined as (1) the EBITDA of Lessee, being the sum of net income plus (+) interest expense, plus (+) federal, state and local income taxes, plus (+) depreciation and amortization, such sum to be divided by (2) the aggregate payment obligations of Lessee, being the principal payments on all long-term debt, plus (+) interest expense, plus (+) federal, state and local income taxes.
       
      (b) Leverage Ratio: Lessee shall maintain a Debt to Tangible Net Worth Ratio of not more than 3.00 to 1.00, calculated and tested as of the last day of each fiscal quarter during the Base Term beginning with the fiscal year ending December 31, 2024.
       
      “Leverage Ratio” shall be defined as follows: (1) Total Liabilities minus (-) Subordinated Debt, as defined below, divided by (2) Tangible Net Worth (total assets minus (-) intangible assets, which include patents and copyrights, minus (-) Total Liabilities plus (+) Subordinated Debt.
       
      “Subordinated Debt” shall mean the present balance of liabilities owed by Lessee to its equity members, officers, and affiliated companies, as identified in a debt schedule provided by Lessee of the same date as the applicable fiscal quarter financial statements for which this Leverage Ratio is being calculated.
       
      (c) Cash Flow Distribution: After the Base Term Commencement Date and continuously thereafter while any Rent payments are due and owing Lessor, any equitable distribution of cash by Lessee to its members is subject to the approval of Lessor, which approval shall not be unreasonably withheld or delayed.
       
      vii.) Lessee will maintain with Lessor a Cash Reserve in an amount equal to a maximum of six Base Monthly Rental payments totaling $192,966.00 (the “Maximum Reserve). The first $50,000.00 will be funded as part of the Value of Calculation for Stipulated Loss Value. Commencing on the twenty-fourth (24th) day of the month immediately following the Base Term Commencement Date, or in the case of such day being a Saturday, Sunday, or New York banking holiday, then on the first succeeding regular banking day, and thereafter each month during the Base Term, Lessee shall pay Lessor by wire transfer to an account designated by Lessor, which account may change from time to time, a cash reserve payment equal to $11,913.83 (the “Reserve Payment”), monthly in arrears, during the first twelve (12) months of the Base Term until Lessor has received an additional amount equal to $142,966.00. For the purpose of securing all of Lessee’s obligations under the Master Agreement and all Schedules, Lessee grants to Lessor a security interest in the Cash Reserve described herein. Any and all such Cash Reserve may be commingled by Lessor with other funds without any interest payable to Lessee. Upon an Event of Default by Lessee hereunder, Lessor may, but shall not be obligated to, apply any such Cash Reserve to any obligation of Lessee under any Lease, in which event Lessee shall promptly restore the amount thereof on demand. Upon compliance by Lessee with all terms of each Schedule, and within thirty (30) days after the End of Term, Lessor shall return to Lessee the balance of any Cash Reserve. Lessee agrees that, in the event of Lessee’s bankruptcy, Lessor shall be entitled to set off and retain any amount of the Cash Reserve against any and all amounts due to Lessor from Lessee, whether such amounts are classified as “pre-petition” or “post-petition” liabilities and whether or not the same are entitled to priority.
       
      viii.) If Lessor takes possession of the Equipment, whether in exercising a remedy under this Lease or as a result of Lessee’s election to return the Equipment to Lessor at End of Term, then Lessee hereby grants Lessor a non-exclusive right of restricted use and license, at no cost to Lessor, of Lessee’s intellectual property and other proprietary technology related to the Equipment, including, but not limited to, Lessee’s rights in the proprietary and confidential information of the Equipment’s manufacturer and vendor and the Assignment of Lease Agreements detailed in section “XI” of the attached Exhibit A - Equipment Description, solely (a) to allow Lessor to demonstrate the Equipment to prospective purchasers or lessees, and (b) to grant a one-time sub- license of said intellectual property to any actual purchaser or lessee of the Equipment on a “no-fee” basis.

 

 

Schedule Page 4 of 4

Maxus Lease No. 1462-004

 

THIS SCHEDULE (INCORPORATING THE MASTER AGREEMENT) CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE LESSOR AND LESSEE AS TO THE LEASE AND THE EQUIPMENT. IN THE EVENT OF A CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THIS SCHEDULE AND THOSE OF THE MASTER AGREEMENT, THE TERMS AND PROVISIONS OF THIS SCHEDULE SHALL CONTROL AND PREVAIL.

 

Lessee:  White Claw Colorado City, LLC   Lessor:  Maxus Capital Group, LLC
         
By:     By:  
Print Name:  James H. Ballengee     Anthony N. Granata
Title: President & CEO     Vice President

 

Notwithstanding anything contained in this Schedule, or any other writing to the contrary, Co-Lessee does hereby consent, agree, execute and enter into this Schedule solely, exclusively, and INSOFAR AND ONLY INSOFAR, for the purposes set forth in the Master Agreement:

 

Co-Lessee:  Jorgan Development, LLC  
     
By:    
Print Name:  James H. Ballengee  
Title: Manager  

 

 

 

This is Counterpart No. ___ of 2 serially numbered counterparts. To the extent that this document constitutes chattel paper under the Uniform Commercial Code, no security interest in this document may be created through the transfer and possession of any counterpart other than Counterpart No. 1.