UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 4, 2019

 

EVO Transportation & Energy Services, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   000-54218   37-1615850
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (I.R.S. Employer
Identification No.)

 

8285 West Lake Pleasant Parkway, Peoria, AZ 85382

(Address of principal executive offices) 

 

877-973-9191

Registrant’s telephone number, including area code:

 

Not Applicable

( Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registration under any of the following provisions ( see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company    ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.      ☐

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

The disclosures set forth in Items 2.01, 3.02 and 5.02 below are hereby incorporated by reference into this Item 1.01.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

Closing of Acquisition Option Agreement

 

On January 4, 2019 but effective January 2, 2019, EVO Transportation & Energy Services, Inc., a Delaware corporation (the “Company”), Sheehy Enterprises, Inc., a Wisconsin corporation (“Sheehy Enterprises”), John Sheehy, and Robert Sheehy (the “Sheehy Shareholders”) consummated the transactions contemplated by that certain Acquisition Option Agreement dated September 5, 2018 (the “Option Agreement”), by and among the Company, Sheehy Enterprises and the Sheehy Shareholders. Pursuant to the Exchange Agreement, the Company acquired all of the outstanding equity interests in Sheehy Mail, Inc., a Wisconsin corporation (the “Sheehy Mail Interests”) from the Sheehy Shareholders for 2,240,000 shares of Company common stock.

 

Pursuant to the Option Agreement, on January 4, 2019, Sheehy Enterprises and Sheehy Mail entered into an equipment lease agreement with an effective date of January 2, 2019 (the “Equipment Lease”), whereby Sheehy Enterprises agreed to lease to Sheehy Mail certain truck and trailer equipment owned by Sheehy Enterprises. The Equipment Lease provides for monthly payments of approximately $90,000 and a term of 48 months.

 

Sheehy Enterprises and Sheehy Mail are affiliates of John Sheehy. Mr. Sheehy has served as chief operating officer of the Company since September 5, 2018, the date of the Option Agreement. The amount of consideration payable to Sheehy Enterprises in connection with the sale of the Sheehy Mail Interests was determined by arms-length negotiations between the Company and Sheehy Enterprises prior to John Sheehy’s appointment as the Company’s chief operating officer, and not pursuant to any specific formula or principle.

 

The Option Agreement is described more fully in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2018. The description set forth above of the Lease Agreement is not complete and is subject to and qualified in its entirety by reference to the text of the Lease Agreement, a copy of which is filed herewith as Exhibit 10.1 and the terms of which are incorporated by reference.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

As consideration for the Sheehy Interests and pursuant to a subscription agreement with Sheehy Enterprises, on January 4, 2019, the Company issued 2,240,000 shares of common stock, par value $0.0001 per share, to Sheehy Enterprises. The issuance of common stock was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, because the issuance did not involve a public offering, the recipient took the shares for investment and not resale and the Company took appropriate measures to restrict transfer. The Company did not pay underwriter discounts or commissions in connection with the foregoing transaction.

 

The description set forth above of the subscription agreement is not complete and is subject to and qualified in its entirety by reference to the text of the subscription agreement, a copy of which is filed herewith as Exhibit 10.2 and the terms of which are incorporated by reference.

 

1
 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

  John Sheehy Employment Agreement

 

On January 4, 2019, the Company entered into an executive employment agreement effective January 1, 2019 (the “Sheehy Employment Agreement”) with John Sheehy pursuant to which John Sheehy will continue to serve as the chief operating officer of the Company. The Sheehy Employment Agreement provides for an initial term of four years, with automatic extensions (absent notice to the contrary) of one year upon the expiration of the initial term or any renewal term. Under the Sheehy Employment Agreement, Mr. Sheehy will be entitled to base compensation of $250,000 per year, incentive compensation based on Mr. Sheehy’s performance as determined by the Company’s board of directors and awards of stock options pursuant to any plans or arrangements the Company may have in effect from time to time.

 

If Mr. Sheehy is terminated without cause or he resigns with good reason, he will be entitled to receive severance, subject to his execution and non-revocation of a release of claims in favor of the Company and its officers, directors and affiliates, equal to any unpaid base salary, reimbursement for unpaid expenses and all other accrued payments or benefits through his termination date, plus the greater of: (1) his monthly base salary at the level in effect immediately prior to his termination date, multiplied by number of full or partial months, if any, in the period beginning on his termination date and ending on the date his initial employment term would have ended, if later than his termination date or (2) one-half of his annual base salary at the level in effect immediately prior to his termination date.

 

The Sheehy Employment Agreement also includes a customary confidentiality covenant and two-year post-termination nonsolicitation and non-interference covenants. 

 

The description set forth above of the Sheehy Employment Agreement is not complete and is subject to and qualified in its entirety by reference to the text of the subscription agreement, a copy of which is filed herewith as Exhibit 10.3 and the terms of which are incorporated by reference. 

 

Item 9.01 Financial Statements and Exhibits.

 

  (a) Financial Statements of Businesses Acquired: The Company intends to file financial statements required by this Item 9.01(a) under the cover of an amendment to this Current Report on Form 8-K no later than seventy-one (71) calendar days after the date on which this Form 8-K was required to be filed.

 

  (b) Pro Forma Financial Information: The Company intends to file the pro forma financial information that is required by this Item 9.01(b) under the cover of an amendment to this Current Report on Form 8-K no later than seventy-one (71) calendar days after the date on which this Form 8-K was required to be filed.

 

  (d) Exhibits: The following exhibits are filed as part of this report:

 

  Exhibit No.   Description
10.1   Equipment Lease Agreement dated January 2, 2019 between Sheehy Enterprises, Inc. and Sheehy Mail, Inc.
10.2   Subscription Agreement dated January 2, 2019 between EVO Transportation & Energy Services, Inc. and Sheehy Enterprises, Inc.
10.3   Employment Agreement dated January 2, 2019 between EVO Transportation & Energy Services, Inc. and John Sheehy

 

2
 

 

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.

 

Dated: January 10, 2019 By: /s/ John P. Yeros
  Its: Chief Executive Officer

  

  3  

 

 

Exhibit 10.1

 

EQUIPMENT LEASE AGREEMENT

 

This EQUIPMENT LEASE AGREEMENT (this “ Agreement ”) is entered into January 2, 2019 (the “ Effective Date ”), by and between Sheehy Enterprises, Inc., a Wisconsin corporation (the “ Lessor ”), and Sheehy Mail Contractors, Inc., a Wisconsin corporation (the “ Lessee ”). The Lessor and the Lessee may be referred to individually in this Agreement as a “ Party ” and collectively as the “ Parties .”

 

RECITALS

 

A. Pursuant to that certain Acquisition Option Agreement dated September 5, 2018 (the “ Option Agreement ”), by and between EVO Transportation & Energy Services, Inc., a Delaware corporation (the “ Buyer ”), the Lessor, John Sheehy, and Robert Sheehy, the Buyer is purchasing all of the issued and outstanding equity interests of the Lessee.

 

B. Section 2.2(c)(ix) of the Option Agreement requires that the Lessor deliver to the Buyer a lease agreement between the Lessor and the Lessee, in form and substance acceptable to the Buyer and duly executed by the Lessor and the Lessee, whereby the Lessee will lease from the Lessor all trucks, trailers, and other vehicles used in the Lessee’s Business (as defined in the Option Agreement).

 

C. Capitalized terms not otherwise defined herein will have the same meanings as in the Option Agreement.

 

AGREEMENT

 

For good and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to the following terms and conditions:

 

1. Equipment . The Lessor agrees to lease to the Lessee, and the Lessee agrees to lease from the Lessor, the equipment identified on Exhibit A attached hereto (the “ Leased Equipment ”) in accordance with the terms of this Agreement.

 

2. Lease Payments . Commencing on the Effective Date, the Lessee agrees to pay to the Lessor an amount equal to $91,667.00 per month (each, a “ Lease Payment ”) for 48 months (the “ Lease Term ”), unless earlier terminated in accordance with this Agreement. The first Lease Payment will be made on the Effective Date. Thereafter, Lease Payments during the Lease Term will be due on each subsequent monthly anniversary of the Effective Date.

 

3. Leased Equipment Use; Maintenance; Loss; Damage . The Lessee agrees to use the Leased Equipment in substantial compliance with all laws, rules, regulations, ordinances, statutes, and orders regarding the use, maintenance, and possession of the Leased Equipment. The Lessee will be responsible for obtaining applicable licensing and permits required for the Lessee’s use, maintenance, and possession of the Leased Equipment and any associated costs. The Lessee will be responsible for any repairs and maintenance necessary to keep the Leased Equipment in working order and repair as required by the Lessee during the Lease Term. The Lessee agrees to promptly report to the Lessor any loss of or material damage to the Leased Equipment.

 

 

 

  

4. Ownership of the Lessor . The Leased Equipment shall at all times be and remain the exclusive property of the Lessor.

 

5. Representations .

 

a. The Lessor and the Lessee each represent, warrant and covenant, respectively, that such Party has the full power, authority, and legal right to execute, deliver, and perform the terms of this Agreement, has the legal right to enter into this Agreement, and that this Agreement when executed by its representative signing this Agreement on its behalf is a valid and binding obligation on such Party.

 

b. The Lessor represents and warrants that it possesses good title to all of the Leased Equipment and that the Leased Equipment is not subject to any lien, charge, mortgage, security interest, claim, pledge, deposit, or other encumbrance (each, a “ Lien ”). During the Lease Term, the Lessor will not permit any Lien on any of the Leased Equipment and will not otherwise take any action, or permit any action to be taken, that interferes with the Lessee’s quiet use and enjoyment of the Leased Equipment.

 

6. Force Majeure . Each Party to this Agreement will be excused from its contractual obligations if it is prevented or delayed in such performance by any event which is unavoidable or beyond its reasonable control including acts of God, acts of public enemies, floods, rockslides, landslides, snowslides, washouts, avalanches, earthquake, expropriation, fire or explosion, strikes, lockouts, walkouts or other industrial disputes involving employees of either Party, war, sabotage, insurrection, derailment, labor shortages, power or fuel shortages, or the act or failure to act of any government or regulatory agency (each an event of “ Force Majeure ”). The Party affected by Force Majeure shall notify (with a sufficient description of the event) the other Party within five Business Days following the commencement of the Force Majeure event and shall also notify the other Party within five Business Days following the end of the Force Majeure. The Party affected will take all reasonable steps to remedy the event of Force Majeure; provided , however , that nothing contained in this Section 6 shall require any Party to settle any industrial dispute or to test any federal, provincial, or municipal law.

 

7. Notice . All notices, requests, demands and other communications required or permitted hereunder will be made in writing and will be deemed to have been duly given and effective: (a) on the date of delivery, if delivered personally; (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service; (c) on the earlier of the fourth (4 th ) day after mailing or the date of the return receipt acknowledgment, if mailed, postage prepaid, by certified or registered mail, return receipt requested; or (d) on the date of transmission, if sent by e-mail, facsimile, telecopy, telegraph, telex or other similar telegraphic communications equipment.

 

8. Governing Law; Jurisdiction; Waiver of Jury Trial . All issues and questions concerning the construction, validity, enforcement, and interpretation of this Agreement will be governed by the governing law, jurisdiction, waiver of jury trial, and other provisions set forth in Section 8.5 of the Option Agreement.

  

2

 

  

9. Cumulative Rights . The Lessor’s and the Lessee’s rights under this Agreement are cumulative and shall not be construed as exclusive unless otherwise required by law. The exercise of any rights and remedies by either Party shall not constitute a termination of this Agreement unless such Party so notifies the other Party in writing.

 

10. Waiver . The delay or failure of either Party to enforce any provisions of this Agreement shall not be deemed a waiver or limitation of that Party’s right to subsequently enforce and compel past, present, and future strict compliance with every provision of this Agreement.

 

11. Other Provisions . This Agreement constitutes the entire agreement between the Parties regarding the subject matter of this Agreement and supersedes any prior understanding or representation of any kind preceding the date of this Agreement. There are no other promises, conditions, understandings, or other agreements, whether oral or written, relating to the subject matter of this Agreement. This Agreement may only be modified in a writing signed by both the Lessor and the Lessee. This Agreement shall not be construed against either Party hereto since both Parties have had the opportunity to negotiate its provisions and contribute to its drafting. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Copies of this Agreement with signatures transmitted electronically ( e.g. by fax or .pdf) shall be deemed to be original signed versions of this Agreement. The obligations of the Parties which, by their nature, would continue beyond the termination or expiration of this Agreement will survive a termination of this Agreement.

 

[Signature Page Follows]

  

3

 

 

IN WITNESS WHEREOF, the Parties have executed this Equipment Lease Agreement as of the day and year first above written.

 

  LESSOR:
   
  SHEEHY ENTERPRISES, INC.
   
  /s/ John Sheehy
  By: John Sheehy
  Its: Chief Executive Officer
   
  LESSEE:
   
  EVO Transportation and Energy Services on behalf of:
   
  SHEEHY MAIL CONTRACTORS, INC.
   
  /s/ Damon Cuzick
  By: Damon Cuzick
  Its: Chief Executive Officer

 

[Signature Page to Equipment Lease Agreement]

   

 

 

  

EXHIBIT A

 

LEASED EQUIPMENT

 

Truck Number   Make & Year   VIN
248   2010 Ford   4V4NC9EH0CN551976
257   2012 Volvo   4V4NC9EH4CN551978
259   2012 Volvo   4V4NC9EH8CN551983
263   2012 Volvo   4V4NC9EH6CN551982
264   2012 Volvo   4V4NC9EHXCN551984
265   2012 Volvo   4V4NC9EH3CN551986
267   2012 Volvo   4V4NC9EH5CN551987
269ST   2013 Freightliner   1FVAC4DV3DHFA7493
271   2013 Volvo   4V4NC9EHXDN139839
272   2013 Volvo   4V4NC9EH6DN139840
276   2013 Volvo   4V4NC9EH3DN139844
277   2013 Freightliner   3AKJGEDV8DSFD9517
278   2013 Freightliner   3AKJGEDVXDSFD9518
279   2013 Freightliner   3AKJGEDV1DSFD9519
280   2013 Freightliner   3AKJGEDV0DSFE4484
281   2014 Freightliner   3AKJGEDV3ESFP9963
283   2014 Freightliner   3AKGJEDV7ESFP9965
284   2014 Freightliner   3AKJGEDV9ESFP9966
285   2014 Freightliner   1FUJGBD96ELFM6162
286   2014 Freightliner   1FUJGBD96ELFM6163
287   2014 Freightliner   1FUJGBD9XELFM6164
295   2014 Freightliner   1FUJGBD9XELFW4907

 

Trailer Number   Make   VIN
147001   2014 Stoughton   1DW1A5320ES524718
147002   2014 Stoughton   1DW1A5322ES524719
147003   2014 Stoughton   1DW1A5329ES524720
147004   2014 Stoughton   1DW1A5320ES524721
147005   2014 Stoughton   1DW1A5322ES524722
147006   2014 Stoughton   1DW1A5324ES524723
147007   2014 Stoughton   1DW1A5326ES524724
147008   2014 Stoughton   1DW1A5328ES524725
147009   2014 Stoughton   1DW1A532XES524726
147010   2014 Stoughton   1DW1A5321ES524727
147011   2014 Stoughton   1DW1A5323ES524728
147012   2014 Stoughton   1DW1A5325ES524729
147013   2014 Stoughton   1DW1A5323ES524730

 

A- 1

 

 

147014   2014 Stoughton   1DW1A5323ES524731
147015   2014 Stoughton   1DW1A5323ES524732
147016   2014 Stoughton   1DW1A5323ES524733
147017   2014 Stoughton   1DW1A5323ES524734
147018   2014 Stoughton   1DW1A5323ES524735
147019   2014 Stoughton   1DW1A5323ES524736
147020   2014 Stoughton   1DW1A5323ES524737
500IH02   1998 Stoughton   1DW1A5320WS207524
5231H01   1998 Stoughton   1DW1A532XWS207563
5231H02   2002 Wabash   1JJV532W12L793831
CV670   1999 Utility   1UYTS2484XA793201
F669   1998 Utility   IUYFS2484WA633704
F673   2005 Stoughton   IUYFS24005A566401
SMC117   2004 Stoughton   1DW1A48214S673401
SMC118   2004 Stoughton   1DW1A48234S673402
SMC119   2004 Stoughton   1DW1A48254S673403
SMC120   2004 Stoughton   1DW1A48274S673404
SMC121   2004 Stoughton   1DW1A48294S673405
SMC122   2004 Stoughton   1DW1A48204S673406
SMC123   2004 Stoughton   1DW1A48224S673407
SMC124   2004 Stoughton   1DW1A48244S673408
SMC125   2004 Stoughton   1DW1A53274S685601
SMC126   2004 Stoughton   1DW1A53294S685602
SMC127   2004 Stoughton   1DW1A53204S685603
SMC128   2004 Stoughton   1DW1A53224S685604
SMC129   2004 Stoughton   1DW1A53224S691001
SMC130   2004 Stoughton   1DW1A53244S691002
SMC132   2004 Stoughton   1DW1A53284S691004
SMC134   2005 Stoughton   1DW1A53255S820902
SMC135   2005 Stoughton   1DW1A53275S820903
SMC136   2005 Stoughton   1DW1A53295S820904
SMC137   2006 Stoughton   1DW1A53206S888901
SMC138   2006 Stoughton   1DW1A53226S888902
SMC139   2006 Stoughton   1DW1A53246S888903
SMC140   2006 Stoughton   1DW1A53256S898601
SMC141   2006 Stoughton   1DW1A53276S898602
SMC142   2006 Stoughton   1DW1A53296S898603
SMC143   2006 Stoughton   1DW1A53206S898604
SMC144   2006 Stoughton   1DW1A53226S898605
SMC145   2006 Stoughton   1DW1A53246S898606
SMC146   2006 Stoughton   1DW1A53266S898607

 

A- 2

 

 

SMC147   2006 Stoughton   1DW1A53286S898608
SMC148   2006 Stoughton   1DW1A532X6S898609
SMC149   2007 Stoughton   1DW1A53297S959501
SMC150   2007 Stoughton   1DW1A53207S959502
SMC151   2007 Stoughton   1DW1A53227S959503
SMC152   2007 Stoughton   1DW1A53247S959504
SMC153   2007 Stoughton   1DW1A53267S959505
SMC154   2007 Stoughton   1DW1A53287S959506
SMC155   2007 Stoughton   1DW1A532X7S959507
SMC156   2007 Stoughton   1DW1A53217S959508
SMC157   2007 Stoughton   1DW1A53237S959509
SMC158   2007 Stoughton   1DW1A532X7S959510
SMC159   2007 Stoughton   1DW1A53217S959511
SMC160   2007 Stoughton   1DW1A53237S959512
SMC161   2007 Stoughton   1DW1A53277S988401
SMC162   2007 Stoughton   1DW1A53297S988402
SMC163   2007 Stoughton   1DW1A53207S988403
SMC164   2007 Stoughton   1DW1A53227S988404
SMC165   2007 Stoughton   1DW1A53247S988405
SMC166   2007 Stoughton   1DW1A53267S988406
SMC167   2008 Stoughton   1UYVS25328P329111
SMC168   2008 Stoughton   1UYVS25328P329110
SMC169   2008 Stoughton   1UYVS25328P329112
SMC170   2009 Vanguard   SV8VA53219M902494
SMC171   2009 Vanguard   SV8VA53239M902495
SMC172   2009 Vanguard   SV8VA53259M902496
SMC173   2009 Vanguard   SV8VA53279M902497
SMC174   2009 Vanguard   SV8VA53259M902501
SMC175   2009 Stoughton   1DW1A53289S168203
SMC176   2009 Stoughton   1DW1A532X9S168204
SMC177   2009 Stoughton   1DW1A53219S168205
SMC178   2009 Stoughton   1DW1A53239S168206
SMC179   2009 Stoughton   1DW1A53259S168207
SMC180   2009 Stoughton   1DW1A53279S168208
SMC181   2009 Stoughton   1DW1A53299S168209
SMC182   2009 Stoughton   1DW1A53259S168210
SMC183   2009 Stoughton   1DW1A53219S150903
SMC184   2009 Stoughton   1DW1A53239S150904
SMC186   2009 Stoughton   1DW1A53279S150906
SMC187   2009 Stoughton   1DW1A53299S150907
SMC188   2009 Stoughton   1DW1A53209S150908

 

A- 3

 

 

SMC189   2009 Stoughton   1DW1A53229S150909
SMC190   2009 Stoughton   1DW1A53299S150910
SMC191   2009 Stoughton   1DW1A53209S150911
SMC192   2009 Stoughton   1DW1A53229S150912
SMC193   2009 Stoughton   1DW1A53249S150913
SMC194   2009 Stoughton   1DW1A53269S150914
SMC195   2009 Stoughton   1DW1A53289S150915
SMC196   2009 Stoughton   1DW1A53249S118849
SMC197   2009 Utility   1UYVS2480DP617201
SMC701   2011 Stoughton   1UYVS2533BP103701
SMC702   2011Stoughton   1UYVS2535BP103702
SMC703   2011Stoughton   1UYVS2539BP103704
SMC704   2011Stoughton   1UYVS2538BP103709
SMC705   2011Stoughton   1UYVS2536BP103711
SMC706   2011Stoughton   1UYVS2538BP103712
SMC707   2011Stoughton   1UYVS253XBP103713
SMC708   2011Stoughton   1UYVS2530BP103705
SMC709   2011Stoughton   1DW1A5325BS258110
SMC710   2011Stoughton   1DW1A5327BS258111
SMC711   2011Stoughton   1DW1A5329BS258109
SMC712   2012 Stoughton   1DW1A5321CS295205
SMC713   2012 Stoughton   1DW1A5323CS295206
SMC714   2012 Stoughton   1DW1A5325CS295207
SMC715   2012 Stoughton   1DW1A5327CS295208
SMC716   2012 Stoughton   1DW1A5329CS295209
SMC717   2012 Stoughton   1DW1A5325CS295210
SMC718   2012 Stoughton   1DW1A5326CB338601
SMC719   2012 Stoughton   1DW1A5328CB338602
SMC720   2012 Stoughton   1DW1A532XCB338603
SMC721   2012 Stoughton   1DW1A5321CB338604
SMC722   2012 Stoughton   1DW1A5323CB338605
SMC723   2012 Stoughton   1DW1A5325CB338606
SMC724   2012 Utility   1UYVS2533DP549012
SMC725   2012 Utility   1UYVS2535DP549013
SMC726   2012 Utility   1UYVS2531DP549025
SMC727   2012 Utility   1UYVS2533DP549026
SMC728   2012 Utility   1UYVS2537DP549028
SMC729   2012 Utility   1UYVS2539DP549029
SMC730   2013 Utility   1UYVS2539DP603820
SMC731   2013 Utility   1UYVS2530DP603821
SMC732   2013 Utility   1UYVS2534DP603823
SMC733   2013 Utility   1UYVS2536DP603824
SMC734   2013 Utility   1UYVS2538DP603825

 

Property   Description  
230 Boden   MKE Shop    

 

A- 4

 

Exhibit 10.2

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE SECURITIES PURCHASED HEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND RESALE UNDER A LIMITED LIABILITY COMPANY AGREEMENT AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND OTHER APPLICABLE LAWS PURSUANT TO REGISTRATION OR EXEMPTION FROM REQUIREMENTS THEREUNDER.

 

EVO Transportation & Energy Services, Inc.

 

SUBSCRIPTION AGREEMENT

  

This Subscription Agreement (this “ Agreement ”) is made as of January 2, 2019 between EVO Transportation & Energy Services, Inc., a Delaware corporation (the “ Company ”) and Sheehy Enterprises, Inc., a Wisconsin corporation (the “ Subscriber ”).

 

On the date hereof, the Subscriber and the Company consummated the transactions contemplated by that certain Acquisition Option Agreement dated September 5, 2018 (the “ Option Agreement ”), pursuant to which Subscriber agreed to sell to the Company all of the equity interests of Sheehy Mail Contractors, Inc., a Wisconsin corporation.

 

Pursuant to the terms of the Option Agreement, Subscriber is willing to purchase, and the Company is willing to issue and sell to the Subscriber, the number of shares of common stock of the Company (the “ Securities ”) set forth on Exhibit A hereto, all on the terms and subject to the conditions set forth herein and in the Option Agreement.

 

1 . Subscription and Purchase Price

 

(a) Subscription . On the terms and subject to the conditions set forth herein and in the Option Agreement, the undersigned hereby subscribes for and agrees to purchase the Securities set forth on Exhibit A hereto.

 

The Subscriber understands and agrees that, subject to applicable laws, by executing this Agreement, he, she or it is entering into a binding agreement.

 

2. Investor’s Representations, Warranties and Agreements

 

The undersigned hereby acknowledges, agrees with and represents and warrants to the Company and its affiliates, as follows:

 

(a) The undersigned has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the undersigned.

 

(b) The undersigned acknowledges his, her or its understanding that the offering and sale of the Securities is intended to be exempt from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), by virtue of Section 4(a)(2) of the Securities Act and the provisions of Regulation D promulgated thereunder (“ Regulation D ”). In furtherance thereof, the undersigned represents and warrants to the Company and its affiliates as follows:

 

(i) The undersigned is acquiring the Securities solely for the undersigned’s own beneficial account, for investment purposes, and not with view to, or resale in connection with, any distribution of the Securities;

 

 

 

 

(ii) The undersigned has the financial ability to bear the economic risk of his, her or its investment, has adequate means for providing for their current needs and contingencies, and has no need for liquidity with respect to the investment in the Company;

 

(iii) The undersigned and the undersigned’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively, “ Advisors ”), have received all documents requested by the undersigned or Advisors, if any, and have carefully reviewed them and understand the information contained therein, prior to the execution of this Agreement; and

 

(iv)       The undersigned (together with his, her or its Advisors, if any) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Securities. If other than an individual, the undersigned also represents it has not been organized solely for the purpose of acquiring the Securities.

 

(c) The information in the Investor Questionnaire (attached as Appendix A ) completed and executed by the undersigned (the “ Investor Questionnaire ”) is true and accurate in all respects, and the undersigned is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D.

 

(d) The undersigned has relied on the advice of, or has consulted with, only his, her or its Advisors. Each Advisor, if any, is capable of evaluating the merits and risks of an investment in the Securities, and each Advisor, if any, has disclosed to the undersigned in writing (a copy of which is annexed to this Agreement) the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the Company or any affiliate thereof.

 

(e) The undersigned represents, warrants and agrees that he, she or it will not sell or otherwise transfer the Securities without registration under the Securities Act or an exemption therefrom, and fully understands and agrees that the undersigned must bear the economic risk of his, her or its purchase because, among other reasons, the Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under the applicable securities laws of such states, or an exemption from such registration is available. In particular, the undersigned is aware that the Securities are “restricted securities,” as such term is defined in Rule 144 promulgated under the Securities Act (“ Rule 144 ”), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The undersigned also understands that, except as described in Section 5 of this Agreement, the Company is under no obligation to register the Securities on his, her or its behalf or to assist them in complying with any exemption from registration under the Securities Act or applicable state securities laws. The undersigned understands that any sales or transfers of the Securities are further restricted by state securities laws.

 

(f) No representations or warranties have been made to the undersigned by the Company, other than any representations of the Company contained herein, and in subscribing for the Securities the undersigned is not relying upon any representations other than those contained herein.

 

(g) The undersigned understands and acknowledges that his, her or its purchase of the Securities is a speculative investment that involves a high degree of risk and the potential loss of their entire investment and has carefully read and considered the matters set forth in the Company’s reports filed with the U.S. Securities and Exchange Commission (“ SEC ”), including in particular the matters under the caption “Risk Factors” contained in the Company’s Annual Report on Form 10-K filed with the SEC on April 17, 2018.

 

2

 

 

(h) The undersigned’s overall commitment to investments that are not readily marketable is not disproportionate to the undersigned’s net worth, and an investment in the Securities will not cause such overall commitment to become excessive.

 

(i) The undersigned understands and agrees that the Securities may bear substantially the following legend until (i) such Securities shall have been registered under the Securities Act and effectively disposed of in accordance with a registration statement that has been declared effective or (ii) in the opinion of counsel for the Company such Securities may be sold without registration under the Securities Act, as well as any applicable “blue sky” or state securities laws:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

 

(j) Neither the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the offering or confirmed the accuracy or determined the adequacy of any information provided to Subscriber. This offering has not been reviewed by any Federal, state or other regulatory authority.

 

(k) The undersigned and his, her or its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or persons acting on behalf of the Company concerning the offering of the Securities and the business, financial condition, results of operations and prospects of the Company, and all such questions have been answered to the full satisfaction of the undersigned and his, her or its Advisors, if any.

 

(l) The undersigned is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic mail over the Internet, in connection with the offering and sale of the Securities and is not subscribing for Securities and did not become aware of the offering of the Securities through or as a result of any seminar or meeting to which the undersigned was invited by, or any solicitation of a subscription by, a person not previously known to the undersigned in connection with investments in securities generally.

 

(m) The undersigned has taken no action which would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Agreement or the transactions contemplated hereby.

 

(n) The undersigned is not relying on the Company with respect to the legal, tax, economic and related considerations of an investment in the Securities, and the undersigned has relied on the advice of, or has consulted with, only his, her or its own Advisors.

 

(o) The undersigned acknowledges that any estimates or forward-looking statements or projections included in the Company’s filings with the SEC were prepared by the management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking statements cannot be guaranteed by the Company or its management and should not be relied upon.

 

3

 

 

(p) No oral or written representations have been made, or oral or written information furnished, to the undersigned or his, her or its Advisors, if any, in connection with the offering of the Securities.

 

(q) The undersigned agrees, acknowledges and understands that during the period commencing on the date hereof through the Company’s public announcement of the transactions contemplated by the Option Agreement, the undersigned will not directly or indirectly, through related parties, affiliates or otherwise, purchase, sell “short” or “short against the box” (as those terms are generally understood) any equity security of the Company.

 

(r) The foregoing representations, warranties and agreements will survive the completion of the offering.

 

3. Notices to Subscriber

 

(a) THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF ANY INFORMATION PROVIDED TO SUBSCRIBER. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

 

(b) THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. SUBSCRIBER SHOULD BE AWARE THAT HE MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

4. Miscellaneous Provisions

 

(a) Piggy-Back Registration . If at any time on or after February 1, 2019, the Company proposes to file any registration statement (other than any registration on Form S-4, S-8 or any other similarly inappropriate form, or any successor forms thereto) under the Securities Act covering a public offering of the Company’s common stock, it will notify the Subscriber at least ten (10) days prior to each such filing and will use its best efforts to include in such Registration Statement (to the extent permitted by applicable regulation), the common stock held by the Subscriber to the extent requested by the Subscriber within five (5) days after receipt of notice of such filing (which request shall specify the shares of common stock intended to be sold or disposed of by the Subscriber and describe the nature of any proposed sale or other disposition thereof); provided , however , that if a greater number of shares of the Company’s common stock is offered for participation in the proposed offering than in the reasonable opinion of the managing underwriter (if any) of the proposed offering can be accommodated without adversely affecting the proposed offering, then the amount of shares proposed to be offered by the Subscriber for registration, as well as the number of securities of any other selling stockholders participating in the registration, will be proportionately reduced to a number deemed satisfactory by the managing underwriter. The Company will bear all expenses and fees incurred in connection with the preparation, filing, and amendment of the Registration Statement with the SEC, except that the Subscriber shall pay all fees, disbursements and expenses of any counsel or expert retained by the Subscriber and all underwriting discounts and commissions, filing fees and any transfer or other taxes relating to the shares of common stock included in the Registration Statement. The Subscriber agrees to cooperate with the Company in the preparation and filing of any Registration Statement, and in the furnishing of information concerning the Subscriber for inclusion therein, or in any efforts by the Company to establish that the proposed sale is exempt under the Securities Act as to any proposed distribution.

 

4

 

 

(b) Modification . Neither this Agreement, nor any provisions hereof, may be waived, modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, modification, discharge or termination is sought.

 

(c) Survival . The undersigned’s representations and warranties made in this Subscription Agreement survive the execution and delivery of this Agreement and the delivery of the Securities.

 

(d) Notices . Any party may send any notice, request, demand, claim or other communication hereunder to the undersigned at the address set forth on the signature page of this Agreement or to the Company at the address set forth above using any means (including personal delivery, expedited courier, messenger service, fax, ordinary mail or email), but no such notice, request, demand, claim or other communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties written notice in the manner herein set forth.

 

(e) Binding Effect . Except as otherwise provided herein, this Agreement is binding upon, and inures to the benefit of, the parties to this Agreement and their heirs, executors, administrators, successors, legal representatives and assigns. If the undersigned is more than one person or entity, the obligation of the undersigned is joint and several and the agreements, representations, warranties and acknowledgments contained herein are deemed to be made by, and are binding upon, each such person or entity and his, her or its heirs, executors, administrators, successors, legal representatives and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter thereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

 

(f) Assignability . This Agreement is not transferable or assignable by the undersigned.

 

(g) Governing Law and Venue . This Agreement is governed by and construed in accordance with the laws of the State of Delaware, without giving effect to conflicts of law principles. Each party to this Agreement hereby irrevocably submits to the exclusive jurisdiction and venue of the state courts of the State of Delaware or the United States District Court located in the State of Delaware for the purpose of any action between the parties arising in whole or in part under or in connection with this Agreement.

 

(h) Counterparts . This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

  

[Remainder of page left intentionally blank]

 

5

 

 

ALL SUBSCRIBERS MUST COMPLETE THIS PAGE

 

IN WITNESS WHEREOF, the undersigned has executed this Agreement on the 2 nd day of January, 2019.

 

Manner in which Title is to be held (Please Check One ):

  

1. Individual 7.

Trust/Estate/Pension or Profit Sharing Plan

Date Opened:______________

           
2. Joint Tenants with Right of Survivorship 8.

As a Custodian for

________________________________

Under the Uniform Gift to Minors Act of the State of

________________________________

 

           
3. Community Property 9. Married with Separate Property
           
4. Tenants in Common 10. Keogh
           
5. Corporation/Partnership/ Limited Liability Company 11. Tenants by the Entirety
           
6. IRA      

 

ALTERNATIVE DISTRIBUTION INFORMATION

 

To direct distribution to a party other than the registered owner, complete the information below. YOU MUST COMPLETE THIS SECTION IF THIS IS AN IRA INVESTMENT.

 

Name of Firm (Bank, Brokerage, Custodian): ___________________________________________________________

 

Account Name: ________________________________________________________________________________

 

Account Number: _______________________________________________________________________________

 

Representative Name: ____________________________________________________________________________

 

Representative Phone Number: _____________________________________________________________________

 

Address: _____________________________________________________________________________________

 

City, State, Zip: _________________________________________________________________________________

 

IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
INDIVIDUAL SUBSCRIBERS MUST COMPLETE THE NEXT PAGE.
SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE THE PAGE THEREAFTER.

 

6

 

 

EXECUTION BY NATURAL PERSONS

 

 

 

Exact Name in Which Title is to be Held 

 

     
Name (Please Print)    Name of Additional Purchaser
     
     
Residence: Number and Street    Address of Additional Purchaser 
     
     
City, State and Zip Code    City, State and Zip Code 
     
     
Social Security Number   Social Security Number
     
     
Telephone Number   Telephone Number
     
     
Fax Number (if available)   Fax Number (if available)
     
     
E-Mail   E-Mail (if available)
     
     
(Signature)   (Signature of Additional Purchaser)

 

 

ACCEPTED this ______ day of _______________ 2019, on behalf of the Company.

  

  By:
    Chief Executive Officer

 

7

 

 

EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY

 (e.g., corporation, partnership, LLC, trust, etc.)

 

Sheehy Enterprises, Inc.

Name of Entity (Please Print)

 

Date of Incorporation or Organization: 8-15-1989

 

State of Principal Office: Wisconsin

 

Federal Taxpayer Identification Number: ________________________________________________

 

127 Central Ave.

Office Address

 

Waterloo, WI 53594

City, State and Zip Code

 

920-202-5086

Telephone Number

 

____________________________________________

Fax Number (if available)

 

john@sheehymail.com

E-Mail (if available)

  

  By: /s/ John P. Sheehy
    Name: John P. Sheehy
    Title: President
     
  7207 Kaltenberg Pass
     
  Sun Prairie, WI 53590
  Address

 

ACCEPTED this 2 nd day of January, 2019, on behalf of the Company.

 

  By: /s/ Damon Cuzick
    President

 

8

 

 

Appendix A

 

INVESTOR QUESTIONNAIRE

 

Instructions: Check all boxes below which correctly describe you.

 

  I am a ( i ) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”), ( ii ) a savings and loan association or other institution, as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity, ( iii ) a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), ( iv ) an insurance company as defined in Section 2(13) of the Securities Act, ( v ) an investment company registered under the Investment Company Act of 1940, as amended (the “ Investment Company Act ”), ( vi ) a business development company as defined in Section 2(a)(48) of the Investment Company Act, ( vii ) a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, ( viii ) a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political subdivisions, for the benefit of its employees and you have total assets in excess of $5,000,000, or ( ix ) an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”) and ( 1 ) the decision that you shall subscribe for and purchase the Securities, is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment adviser, (2) you have total assets in excess of $5,000,000 and the decision that you shall subscribe for and purchase the Securities is made solely by persons or entities that are accredited investors, as defined in Rule 501 of Regulation D promulgated under the Securities Act (“ Regulation D ”) or ( 3 ) you are a self-directed plan and the decision that you shall subscribe for and purchase the Securities is made solely by persons or entities that are accredited investors.

 

  I am a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.

 

  I am an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “ Code ”), a corporation, Massachusetts or similar business trust or a partnership, in each case not formed for the specific purpose of making an investment in the Securities and with total assets in excess of $5,000,000.

 

  I am a director or executive officer of the Company.

 

  I am a natural person whose individual net worth, or joint net worth with my spouse, exceeds $1,000,000 at the time of my subscription for and purchase of the Securities. For purposes of this Subscription Agreement, “net worth” means the excess of total assets at fair market value, including real and personal property, but excluding the value of your primary residence, over total liabilities. Total liabilities excludes any mortgage on the primary residence in an amount of up to the home’s estimated fair market value, but includes (i) any mortgage amount in excess of the home’s fair market value and (ii) any mortgage amount that was borrowed during the 60-day period before the closing date for the sale of Securities for the purpose of investing in the Securities.

 

  I am a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with my spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable expectation of reaching the same income level in the current year.

 

A- 1

 

 

  Appendix A

 

  I am a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose subscription for and purchase of the Securities is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D.

 

  I am an entity in which all of the equity owners are persons or entities described in one of the preceding paragraphs. Note : For Subscribers attempting to qualify under this item, each equity owner must complete, sign and return to the Company a separate copy of this Questionnaire).

 

  I do NOT meet any of the foregoing categories.

  

The undersigned hereby represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its execution of the Subscription Agreement pursuant to which it purchased Securities of the Company.

 

Sheehy Enterprises, Inc.    
Name of Purchaser [please print]   Name of Co-Purchaser [please print]
     
/s/ John P. Sheehy, President    
Signature of Purchaser
(Entities please provide signature of Purchaser’s duly authorized signatory.)
  Signature of Co-Purchaser
     
John P. Sheehy   1-2-2019
Name of Signatory (Entities only)   Date
     
President    
Title of Signatory (Entities only)     

  

A- 2

 

 

EXHIBIT A

 

SUBSCRIPTION SECURITIES

 

2,240,000 shares of Common Stock

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

  

Exhibit 10.3

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the “ Agreement ”) is entered into and effective as of January 1, 2019 (the “ Effective Date ”), by and between EVO Transportation & Energy Services, Inc. (the “ Company ”) and John Sheehy (“ Executive ”).

 

1. Duties and Scope of Employment.

 

(a) Positions and Duties. During the Employment Term (as defined below), Executive will be employed as the Chief Operating Officer of the Company. Executive’s authority, duties, and responsibilities will correspond to Executive’s position and will include any particular authority, duties, and responsibilities consistent with the Executive’s position that the Company may assign to Executive from time to time.

 

(b) Obligations. During the Employment Term, Executive is required to faithfully and conscientiously perform his assigned duties and to diligently observe all of his obligations to the Company. Executive agrees to devote his full business time and efforts, energy and skill to his employment at the Company, and Executive agrees to apply all his skill and experience to the performance of his duties and advancing the Company’s interests. The foregoing shall not preclude Executive from (i) engaging in civic, charitable or religious activities (including serving as a director, trustee or officer) or, with the prior written consent of the Company, from serving on the boards of directors of other companies, (ii) engaging in investments, including but not limited to real estate investments, investment activity of Sheehy Enterprises Inc., and Loadtrek and acting as the general partner or manager thereof, , or (iii) serving in leadership positions within industry organizations including but not limited to serving as national president of the National Star Route Mail Contractor’s Association, as long as such activities do not interfere or conflict with Executive’s responsibilities to or his abilities to perform his duties hereunder. During the Employment Term, Executive may not perform services as an employee or consultant of any other competitive organization and Executive will not assist any other person or organization in competing with the Company or in preparing to engage in competition with the business or proposed business of the Company. Executive shall comply with and be bound by Company’s operating policies, procedures, and practices from time to time in effect during his employment that apply to all executive-level employees of the Company. By signing this Agreement, Executive confirms to the Company that he has no contractual commitments or other legal obligations that would prohibit him from performing his duties for the Company.

 

(c) Employment Term. The term of this Agreement shall be four (4) years commencing on the Effective Date, unless terminated earlier pursuant to the terms herein (the “ Initial Term ”). Unless earlier terminated pursuant to the terms herein, the Initial Term shall be automatically renewed for consecutive additional one-year terms (each, a “ Renewal Term ”) upon the expiration of the Initial Term or any Renewal Term unless the Company or Executive delivers to the other at least 90 days prior to the expiration of the Initial Term or the then-current Renewal Term, as the case may be, a written notice specifying that the term of Executive’s employment will not be renewed at the end of the Initial Term or the then-current Renewal Term, as the case may be. Like the Initial Term, the then-current Renewal Term is subject to earlier termination pursuant to the terms herein. The Executive’s period of employment hereunder is referred herein as the “ Employment Term, ” whether the Initial Term, the then-current Renewal Term, or the shorter period through the date of an earlier termination thereof as provided elsewhere herein The notice of non-renewal given by the Company is referred to herein as the “ Company’s Non-Renewal .” The notice of non-renewal given by Executive is referred to herein as the “ Executive’s Non-Renewal .”

 

 

 

 

(d) Place of Performance. Executive will initially primarily report to the principal office of Sheehy Mail Contractors, Inc., an Affiliate of the Company, which is currently located in the Waterloo, Wisconsin area; provided, however, that the Company may require Executive to relocate his principal place of employment to the Company’s corporate headquarters in the Phoenix, Arizona area. Executive understands and agrees that his duties will include reasonable travel, including but not limited to travel to offices of the Company, its Affiliates, and such other business travel as is reasonably necessary and appropriate to the performance of Executive’s duties hereunder, subject to reimbursement of expenses pursuant to Section 6 below.

 

2. At-Will Employment. The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time, upon written notice, either by the Company without Cause (in any such case, “ Company’s At-Will Termination ”) or by Executive without Good Reason (in any such case, “ Executive’s At-Will Termination ”). Executive understands and agrees that neither his job performance for, nor promotions, commendations, bonuses or the like from, the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of his employment with the Company. However, as described in this Agreement, Executive may be entitled to Severance Pay (defined below) and Severance Benefits (defined below) depending upon the circumstances of the termination of the Employment Term as set forth in Section 7(b) below.

 

3. Compensation.

 

(a) Initial Base Salary. During the Employment Term, the Company will pay Executive an annual base salary as compensation for his services (the “ Base Salary ”) at the initial rate of $250,000. The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices. The Base Salary will be subject to review and adjustments will be made based upon the Company’s standard practices.

 

(b) Annual Incentive Bonus. During the Employment Term, Executive will be eligible to earn an annual incentive bonus (an “ Annual Bonus ”) under the same or substantially same bonus arrangement, plan or program as in effect for other executive-level employees of the Company from time to time and based upon the same general objective standards as are applied to the other executive-level employees of Company, provided that Executive’s personal performance objectives shall be unique to his role as Chief Operating Officer. Consistent therewith, the Board (or a committee of the Board, if applicable) will determine Executive’s target bonus opportunity and the criteria for earning such bonus, as well as Executive’s achievement of such criteria, and the amount of the Annual Bonus earned and payable to Executive for such year. Any Annual Bonus that is earned and becomes payable pursuant to this Section 3(b) will be paid no later than March 15 of the calendar year immediately following the calendar year to which the Annual Bonus relates. Executive’s Annual Bonus for calendar year 2019 shall be prorated on a weekly basis for his period of employment in such year. Executive must remain employed by the Company through December 31 of the applicable calendar year to be eligible to earn an Annual Bonus for such year; provided, however, that if the Employment Term ends prior to December 31 by reason of either termination by Executive for Good Reason or by the Company’s At-Will Termination, the Annual Bonus for such partial calendar year shall be prorated on a weekly basis for his period of employment in such year. The determinations of the Board (or a committee thereof) with respect to the Annual Bonus will be final and binding unless there is direct evidence that the determination was in violation of the terms and provision of this Section 3(b) or the applicable program, plan or arrangement.

 

2

 

 

(c) Equity. During the Employment Term, Executive will be eligible to receive awards of stock options pursuant to the same or substantially same stock option arrangement, plan or program as in effect for other executive-level employees of the Company from time to time and based upon the same objective standards as are applied to the other executive-level employees of Company. Consistent therewith, the Board (or a committee of the Board, if applicable) will determine whether Executive will be granted any such equity awards and the terms of any such award in accordance with the terms of the applicable program, plan or arrangement that may be in effect from time to time.

 

4. Employee Benefits. During the Employment Term, Executive will be entitled to participate in the employee benefit plans and programs currently and hereafter maintained by the Company of general applicability to other executive-level employees and to employees generally of the Company, subject to eligibility requirements and the applicable terms and conditions of the subject plan or program and the determination of any committee uniformly administering such plan or program. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time. In addition, the Company will cause Executive to be covered by a directors and officers liability insurance policy in an amount and scope of coverage customary for the size and industry of the Company’s business (but in no event less than $2,000,000) commencing on the date of this Agreement.

 

5. Vacation. During the Employment Term, Executive will be entitled to paid vacation of not less than 20 days per calendar year, prorated for any partial calendar year of employment, in accordance with the Company’s standard vacation policy (including, without limitation, its policy on the maximum accrual, carry-over and payout), with the timing and duration of specific vacations mutually and reasonably agreed to by Executive and the Company.

 

6. Expenses. During the Employment Term, the Company will reimburse Executive for reasonable travel, lodging, meal, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.

 

3

 

 

7. Accrued Obligations; Severance; COBRA.

 

(a) Accrued Obligations. Upon the termination or expiration of the Employment Term for any reason, Company shall pay to Executive the following: (i) all unpaid Base Salary through the last day of the Employment Term; (ii) all unreimbursed expenses that otherwise are payable to Executive pursuant to Section 6 above, and (iii) all other accrued payments or benefits to which Executive is entitled and has earned under the terms of any applicable compensation, bonus, award or similar arrangement, plan or program, subject to Section 3(b) with respect to bonus accrual and eligibility (collectively, the “ Accrued Obligations ”). The Accrued Obligations shall be paid to Executive in a lump sum in cash within thirty (30) days following the termination or expiration of the Employment Term, unless otherwise required by law or the terms of the applicable arrangement, plan or program, in which case the same shall be paid as soon as permitted thereunder.

 

(b) Severance. If the Employment Term ends by reason of either termination by Executive for Good Reason or by the Company’s At-Will Termination, the Company shall pay to Executive the greater of (as applicable, “ Severance Pay ”) (i) an amount equal to the product of (A) the number of full or partial months, if any, in the period beginning on the date the Employment Term ended and ending on the date the Initial Term would have ended, if later than the date the Employment Term actually ended, multiplied by (B) Executive’s monthly Base Salary (as in effect immediately prior to the termination date) or (ii) an amount equal to one-half of Executive’s annual Base Salary (as in effect immediately prior to the termination date). The Severance Pay shall be paid by the Company to Executive in substantially equal monthly installments, without reduction or set off (other than as provided in Section 11(a) below), in accordance with the Company’s standard payroll procedures, commencing on the 60th day following the termination or expiration of the Employment Term, provided that the revocation period(s) set forth in the Release Agreement set forth in Section 8(a) below have expired without revocation. If the Employment Terms ends by reason of termination by the Company for Cause, by the Company’s Non-Renewal or Executive’s Non-Renewal of the Initial Term or any Renewal Term, by Executive’s At-Will Termination, or due to Executive’s death or disability, no Severance Pay will be owing or paid to Executive.

 

(c) COBRA. If the Employment Term ends by reason of either termination by Executive for Good Reason or by the Company’s At-Will Termination, to the extent Executive and Executive’s spouse and/or dependent children properly (and timely) elect COBRA continuation coverage under the Company’s group health insurance plan, the Company shall pay, on Executive’s behalf, all of the premiums due for such coverage for a period beginning on the date the Employment Term so ended and ending on the earliest to occur of (as applicable, “ Severance Benefits ”) (i) the date on which Executive is no longer entitled to COBRA continuation coverage under the Company’s group health insurance plan, (ii) the last day of the month that includes or immediately precedes the first day that Executive is covered under another employer’s group health insurance plan or (iii) the last day of the month in which Executive receives his final Severance Pay payment; provided, however, that notwithstanding the foregoing or any other provision in this Agreement to the contrary, the Company may unilaterally amend this Section 7(c) or eliminate the benefit provided hereunder, upon written notice to Executive, but only if and to the extent necessary to avoid the imposition of excise taxes, penalties or similar charges on the Company, including, without limitation, under Code Section 4980D. If the Employment Term ends by reason of termination by the Company for Cause, by the Company’s Non-Renewal or Executive’s Non-Renewal of the Initial Term or any Renewal Term, by Executive’s At-Will Termination, or due to Executive’s death or disability, no Severance Benefits will be owing to Executive.

 

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8. Conditions to Receipt of Severance Pay and Severance Benefits.

 

(a) Release of Claims. The receipt of Severance Pay and Severance Benefits will be subject to Executive signing, delivering, not revoking and complying with a general release and waiver of claims in favor of the Company and its officers, directors and affiliates in substantially the form attached hereto as Exhibit A .

 

(b) Compliance with Covenants. The receipt of Severance Pay and Severance Benefits will be subject to Executive’s compliance with Sections 9(a), 9(b), 9(c) and 9(d) of this Agreement. In the event Executive breaches any of Sections 9(a), 9(b), 9(c) or 9(d), (i) all remaining payments of Severance Pay and/or Severance Benefits to which Executive otherwise is entitled pursuant to Section 7(b) and Section 7(c) will immediately cease, and (ii) Executive will repay, or cause to be repaid, to the Company the full amount of any payments of Severance Pay and Severance Benefits previously paid by the Company to Executive or on behalf of Executive pursuant to Section 7(b) and/or Section 7(c) prior to the date of such breach.

 

9. Restrictive Covenants.

 

(a) Non-Competition. In recognition of the consideration provided herein, and in connection with the protection of the Company’s trade secrets and customer contacts, Executive agrees that, during the Employment Term and ending on the later to occur of (i) the twelve (12) month anniversary following the termination or expiration of the Employment Term or (ii) the last day of the Severance Pay period as set forth in Section 7(b) (as applicable, the “ Restricted Period ”), Executive shall not either directly or indirectly, whether for consideration or otherwise: (i) engage in (except on behalf of the Company or any of its Affiliates), or compete with the Company or any of its Affiliates in, a Competing Business anywhere in the Territory (any such entity, a “ Competing Entity ”); or (ii) form or assist others in forming, be employed by, perform services for, become an officer, director, member or partner of, or participant in, or consultant or independent contractor to, invest in or own any interest in (whether through equity or debt securities), assist (financially or otherwise) or lend Executive’s name, counsel or assistance to, any Competing Entity.

 

(b) Non-Solicitation. In recognition of the consideration provided herein, Executive agrees that, during the Restricted Period, Executive shall not either directly or indirectly, whether for consideration or otherwise: (i) solicit or accept business from any customer of the Company for the purpose of providing goods or services in a Competing Business or solicit or induce any customer of the Company to terminate, reduce or alter in a manner adverse to the Company, any existing business arrangement or agreement with the Company, (ii) be employed by any customer of the Company or (iii) solicit, hire, attempt to solicit or attempt to hire any person who is or was an employee of the Company or any of its Affiliates at any time during the twelve (12) months prior to such solicitation or hire. The restrictions set forth in this Section 9(b) shall not prohibit any form of general advertising or solicitation that is not directed at a specific person or entity or does not relate to a Competing Business.

 

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(c) Non-Disclosure and Non-Use of Confidential Information. At all times both during the Employment Term and for five (5) years thereafter (except with regard to trade secrets, for so long as such information remains a trade secret), Employee, Executive agrees that he will not, either directly or indirectly, (i) divulge, use, disclose (in any way or in any manner, including by posting on the Internet), reproduce, distribute, or reverse engineer or otherwise provide Confidential Information to any person, firm, corporation, reporter, author, producer or similar person or entity; (ii) take any action that would make available Confidential Information to the general public in any form; (iii) take any action that uses Confidential Information to solicit any customer of the Company or prospective customer (with whom the Company has had a substantive discussion on it becoming a customer of the Company within the immediately preceding twelve (12) months) in violation of Section 9(b); or (iv) take any action that uses Confidential Information for solicitation of, or marketing for, any service or product on Executive’s behalf or on behalf of any entity other than the Company or its Affiliates with which Executive was in fact associated, except (A) as required in connection with the performance of such Executive’s duties to the Company or any of its Affiliates, (B) as required to be included in any report, statement or testimony requested by any municipal, state or national regulatory body having jurisdiction over Executive, (C) as required in response to any summons or subpoena or in connection with any litigation, (D) to the extent necessary in order to comply with any law, order, regulation, ruling or governmental request applicable to Executive, (E) as required in connection with an audit by any taxing authority, or (F) as permitted by the express written consent of the Company.

 

(i) In the event Executive is required to disclose Confidential Information pursuant to any of the foregoing exceptions, Executive shall promptly notify the Company of such pending disclosure and assist the Company (at the Company’s sole expense, which will be advanced to Executive whenever reasonable to do so) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Confidential Information. If the Company does not obtain such relief prior to the time that Executive is required to disclose such Confidential Information, Executive may disclose that portion of the Confidential Information (A) which counsel to Executive advises Executive that he is required to disclose or (B) which could subject Executive to be liable for contempt or suffer censure or penalty. In such cases, Executive shall promptly provide the Company with a copy of the Confidential Information so disclosed. This provision applies without limitation to unauthorized use of Confidential Information in any medium, including film, videotape, audiotape and writings of any kind (including books, articles, emails, texts, blogs and websites).

 

(ii) Executive is hereby notified, pursuant to the federal Defend Trade Secrets Act of 2016 (“ DTSA ”), that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (C) where the disclosure of a trade secret is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, Executive is hereby notified under the DTSA that, if an individual files a lawsuit for retaliation by an employer for reporting a suspected violation of law, the individual may disclose a trade secret to his or her attorney and use the trade secret information in the court proceeding if the individual (Y) files any document containing the trade secret under seal; and (Z) does not disclose the trade secret, except pursuant to court order.

 

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(d) Inventions and Patents; Third Party Information. The results and proceeds of Executive’s services to the Company (whether prior to or during the Employment Term), including, without limitation, any works of authorship related to the Company resulting from Executive’s services during Executive’s employment with the Company and any works in progress will be works-made-for-hire. The Company will be deemed the sole owner throughout the universe of such works-made-for-hire and any and all rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner the Company determines in its sole discretion without any further payment to Executive whatsoever. If, for any reason, any of such results and proceeds will not legally be a work-made-for-hire or there are any rights which do not accrue to the Company under the preceding sentence, then Executive hereby irrevocably assigns and agrees to assign to the Company any and all of Executive’s right, title and interest thereto, including, without limitation, any and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed. The Company will have the right to use the same in perpetuity throughout the universe in any manner the Company determines without any further payment to Executive whatsoever. Executive will, from time to time, as may be reasonably requested by the Company, and at the Company’s sole expense, sign such documents and assist the Company to establish or document the Company’s exclusive ownership of any and all rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright or patent applications or assignments. To the extent Executive has any rights in any such results and proceeds that cannot be assigned in the manner described above, Executive unconditionally and irrevocably waives the right to enforce such unassignable rights. This Section 9(d) is subject to, and will not be deemed to limit, restrict or constitute any waiver by the Company of, any rights of ownership to which the Company may be entitled by operation of law by virtue of the Company being Executive’s employer. This Agreement does not apply to an invention or other works of authorship for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on Executive’s own time, and (i) which does not relate (A) directly to the business of the Company or (B) to the Company’s actual or demonstrably anticipated research or development, or (ii) which does not result from any work performed by Executive for the Company hereunder.

 

(e) Enforcement; Remedies. Executive acknowledges that the covenants set forth in Sections 9(a), 9(b), 9(c) and 9(d) impose a reasonable restraint on Executive in light of the business and activities of the Company and its Affiliates. Executive acknowledges that a breach of Sections 9(a), 9(b), 9(c) or 9(d) by Executive will cause serious and potentially irreparable harm to the Company and its Affiliates. Executive therefore acknowledges that a breach of Sections 9(a), 9(b), 9(c) or 9(d) by Executive cannot be adequately compensated in an action for damages at law, and equitable relief would be necessary to protect the Company and its Affiliates from a violation of this Agreement and from the harm which this Agreement is intended to prevent. By reason thereof, Executive acknowledges that the Company is entitled, in addition to any other remedies it may have under this Agreement or otherwise, to preliminary and permanent injunctive and other equitable relief to prevent or curtail any breach or threatened breach of this Agreement. Executive acknowledges, however, that no specification in this Agreement of a specific legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable remedies in the event of a breach of this Agreement by Executive. If Executive breaches this Section 9, Executive shall pay the reasonable attorneys’ fees and costs incurred by the Company in connection with enforcing its rights under this Agreement.

 

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(f) Modification. In the event that any provision or term of this Sections 9(a), 9(b), 9(c) or 9(d), or any word, phrase, clause, sentence or other portion thereof (including, without limitation, the geographic and temporal restrictions and provisions contained in Sections 9(a) or 9(b)) is held to be unenforceable or invalid for any reason, such provision or portion thereof will be modified or deleted in such a manner as to be effective for the maximum period of time, the maximum geographical area, and otherwise to the maximum extent as to which it may be enforceable under applicable law. Such modified restriction(s) shall be enforced by a court having jurisdiction. In the event that such modification is not possible, because each of Executive’s obligations in Sections 9(a), 9(b), 9(c) and 9(d) is a separate and independent covenant, any unenforceable obligation shall be severed and all remaining obligations shall be enforceable.

 

10. Definitions. For purposes of this Agreement, the following defined terms have the following meanings:

 

(a) “ Affiliate ” means, with respect to the Company, any corporation, limited liability company, partnership, business trust or organization, or other entity directly or indirectly controlling, controlled by or under common control with the Company, where control means holding more than 50% of both the voting interests of the entity and the authority to direct the management and policies of the entity.

 

(b) “ Cause ” means any of the following: (i) Executive’s conviction of, or plea of guilty or nolo contendere to, a misdemeanor involving dishonesty, wrongful taking of property, immoral conduct, bribery or extortion or any felony; (ii) willful material misconduct by Executive in connection with the business of the Company and its Affiliates; (iii) Executive’s continued and willful failure to perform substantially his responsibilities to the Company under this Agreement; (iv) Executive’s material breach of this Agreement; (v) Executive’s fraud, theft or material dishonesty against the Company, its Affiliates or its customers; (vi) Executive’s willful and material breach of the Company’s written code of conduct and business ethics or other material written policy, procedure or guideline in effect from time to time and applicable to the Company’s employees generally relating to personal conduct; or (vii) Executive’s willful attempt to obstruct or willful failure to cooperate when with any investigation authorized by the Board or any governmental or self-regulatory entity. Any determination of Cause by the Company shall be made by a resolution approved by a majority of the members of the Board, provided that with respect to Sections 10(a)(ii), 10(a)(iii), 10(a)(iv), 10(a)(vi) and 10(a)(vii) and notwithstanding any other provision of this Agreement to the contrary, Company shall not terminate the Employment Term for Cause unless (x) the Company notifies Executive in writing of such determination within ninety (90) days following the Company’s first knowledge of the existence thereof (which notice specifically identifies the reasons and details therefore), (y) Executive fails to remedy the same within thirty (30) days after the date on which he received such notice (the “ Remedial Period ”), and (z) the Company terminates the Employment Term for Cause within thirty (30) days after the end of the Remedial Period.

 

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(c) “ Code ” means the Internal Revenue Code of 1986, as amended.

 

(d) “ Competing Business ” means (i) a business that is engaged in the acquisition or operation of compressed natural gas fueling stations, (ii) a business that is engaged in providing freight trucking services, or (iii) any other business in which the Company or any of its Affiliates is then-currently engaged or was engaged at any time in the twelve (12) month period prior to Executive’s last day of employment with the Company.

 

(e) “ Confidential Information ” means confidential or proprietary information and/or techniques of the Company or its Affiliates entrusted to, developed by, or made available by the Company or any of its Affiliates to Executive during the Employment Term, whether in writing, in computer form, reduced to a tangible form in any medium, or conveyed orally, that is not generally known by others in the form in which it is or was used by the Company or its Affiliates. Examples of Confidential Information include, without limitation: (i) sales, sales volume, sales methods, sales proposals, business plans or statements of work; (ii) customers of the Company, prospective customer (with whom the Company has had a substantive discussion on it becoming a customer of the Company within the immediately preceding twelve (12) months), and customer records, including contact and preference information; (iii) costs of goods or services charged by vendors and suppliers to the Company; (iii) prices charged to specific customers and non-public general price lists and similar pricing information; (iv) terms of contracts with customer; (vii) non- public information and materials describing or relating to the financial condition and affairs of the Company or its Affiliates, including but not limited to, financial statements, budgets, projections financial and/or investment performance information, research reports, personnel matters, products, services, operating procedures, organizational responsibilities and marketing matters, policies or procedures; (viii) non-public information and materials describing existing or new processes, products and services of the Company or its Affiliates, including marketing materials, analytical data and techniques, and product, service or marketing concepts under development, and the status of such development; (ix) the business or strategic plans of the Company or its Affiliates; (x) the information technology systems, network designs, computer program code, and application practices of the Company or its Affiliates; (xi) acquisition candidates of the Company or its Affiliates or any studies or assessments relating thereto; and (xii) trademarks, service marks, trade secrets, trade names and logos. In addition and notwithstanding the foregoing, Confidential Information does not include either (y) information that, other than as a result of a breach by Executive of this Agreement, is or becomes generally known to and available for use by the public and (z) information that is, at any time, either on the Company’s website or is in brochures, advertising and other materials furnished or provided to customers of the Company and prospective customer (with whom the Company has had a substantive discussion on it becoming a customer of the Company within the immediately preceding twelve (12) months).

 

(f) “ Disability ” means Executive’s inability to perform one or more essential functions of his position, after taking into account reasonable accommodations, by reason of any medically diagnosed physical or mental impairment and such inability continues for a period of at least 120 consecutive calendar days. A determination of such Disability will be made by a physician reasonably acceptable to the Company and Executive (or, if applicable, his spouse or legal representative).

 

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(g) “ Good Reason ” means the occurrence of any of the following events, without the written consent of Executive:

 

(i) any reduction in Executive’s Base Salary (as it may have been increased after the Effective Date), except by no more than ten percent (10%) as part of an across the board salary reduction uniformly applied to all executive-level employees of the Company;

 

(ii) any material reduction in Executive’s authority, duties or responsibilities or the assignment to Executive of any duties that are inconsistent with his position or;

 

(iii) any other action or inaction that constitutes a material breach by the Company of this Agreement or any other agreement under which Executive provides services to the Company or any of its Affiliates.

 

Notwithstanding any other provision of this Agreement to the contrary, Executive shall not terminate the Employment Term for Good Reason unless (A) Executive notifies the Company in writing of the condition that Executive believes constitutes Good Reason within ninety (90) days following the Executive’s first knowledge of the existence thereof (which notice specifically identifies such condition and the details regarding its existence), (ii) the Company fails to remedy such condition within thirty (30) days after the date on which it receives such notice (the “ Remedial Period ”), and (iii) Executive terminates the Employment Term within thirty (30) days after the end of the Remedial Period for Good Reason.

 

(h) “ Section 409A ” means Section 409A of the Code and the Treasury Regulations issued thereunder.

 

(i) “ Territory ” means any State in the United States in which the Company and its Affiliates then-currently conduct their business or have conducted their business at any time in the prior twelve (12) months.

 

11. Tax Matters

 

Withholding. All payments made pursuant to this Agreement will be

 

(a)subject to withholding of taxes as required by applicable law.

 

(b) Responsibility. Notwithstanding anything to the contrary herein, the Company makes no representations or warranties to Executive with respect to any tax, economic or legal consequences of this Agreement or any payments or other benefits provided hereunder, including without limitation under Section 409A, and no provision of the Agreement shall be interpreted or construed to transfer any liability for failure to comply with Section 409A or any other legal requirement from Executive or any other individual to the Company or any of its Affiliates, except as provided below. Executive, by executing this Agreement, shall be deemed to have waived any claim against the Company and its Affiliates with respect to any such tax, economic or legal consequences; provided, however, if any amount payable pursuant to this Agreement is included in Executive’s gross income under Section 409A(a)(1)(A) of the Code, then (i) Executive shall be responsible for the payment of the income taxes imposed on such payment and the amount of interest under Section 409A(a)(1)(B)(i)(I) of the Code and (ii) the Company shall be responsible for the payment of the amount due under Section 409A(a)(1)(B)(i)(II) of the Code within 30 days after such time as a final determination is made that such amount is due and payable by Executive (whether by an agreed assessment, a decision upon administrative appeal, or a decision by a court having jurisdiction). The parties intend that the payment under the preceding clause (ii) will comply with Treasury Regulation Sections 1.409A-3(i)(1)(i), 1.409A-3(i)(1)(v) and 1.409A-3(i)(1)(v).

 

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(c) Section 409A. The parties intend that this Agreement and the payments and other benefits provided hereunder be exempt from the requirements of Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulations Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treasury Regulations Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Section 409A is applicable to this Agreement and any such payments and benefits, the parties intend that this Agreement and such payments and benefits comply with the deferral, payout and other limitations and restrictions imposed under Section 409A. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with such intentions. Without limiting the generality of the foregoing, and notwithstanding any other provision of this Agreement to the contrary:

 

(i) if at the time Executive’s employment hereunder terminates, Executive is a “specified employee,” as defined in Treasury Regulations Section 1.409A-1(i) and determined using the identification methodology selected by the Company from time to time, or if none, the default methodology, then to the extent necessary to avoid subjecting Executive to the imposition of any additional tax under Section 409A, any and all amounts payable under this Agreement on account of such termination of employment that would (but for this provision) be payable within six (6) months following the date of termination, shall instead be paid in a lump sum on the first day of the seventh month following the date on which Executive’s employment terminates or, if earlier, upon Executive’s death;

 

(ii) a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service,” as defined in Treasury Regulations Section 1.409A-1(h) after giving effect to the presumptions contained therein, and, for purposes of any such provision of this Agreement, references to “terminate,” “termination,” “termination of employment” and like terms shall mean separation from service;

 

(iii) each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments; and

 

(iv) with regard to any provision in this Agreement that provides for reimbursement of expenses or in-kind benefits, except for any expense, reimbursement or in-kind benefit provided pursuant to this Agreement that does not constitute a “deferral of compensation,” within the meaning of Treasury Regulations Section 1.409A-1(b), (A) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (B) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (C) such payments shall be made no later than two and a half months after the end of the calendar year in which the expenses were incurred.

 

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(d) Limitation on Payments Under Certain Circumstances.

 

(i) Notwithstanding any other provision of this Agreement to the contrary, in the event that Executive becomes entitled to receive or receives any payments, options, awards or benefits (including, without limitation, the monetary value of any non-cash benefits and the accelerated vesting of stock awards) under any agreement, arrangement, plan or program with the Company or any person affiliated with the Company (collectively, the “ Payments ”), that may separately or in the aggregate constitute “parachute payments” within the meaning of Code Section 280G and the Treasury regulations promulgated thereunder (“ Section 280G ”) and it is determined that, but for this Section 12(d)(i), any of the Payments will be subject to any excise tax pursuant to Code Section 4999 or any similar or successor provision (the “ Excise Tax ”), the Company shall pay to Executive either (i) the full amount of the Payments or (ii) an amount equal to the Payments reduced by the minimum amount necessary to prevent any portion of the Payments from being an “excess parachute payment” (within the meaning of Section 280G) (the “ Capped Payments ”), whichever of the foregoing amounts results in the receipt by Executive, on an after-tax basis (with consideration of all taxes incurred in connection with the Payments, including the Excise Tax), of the greatest amount of Payments notwithstanding that all or some portion of the Payments may be subject to the Excise Tax. For purposes of determining whether Executive would receive a greater after-tax benefit from the Capped Payments than from receipt of the full amount of the Payments and for purposes of Section 11(d)(iii) (if applicable), Executive shall be deemed to pay federal, state and local taxes at the highest marginal rate of taxation for the applicable calendar year.

 

(ii) All computations and determinations called for by Sections 11(d)(i) and 11(d)(iii) shall be made and reported in writing to the Company and Executive by a third-party service provider selected by the Company and Executive (the “ Tax Advisor ”), and all such computations and determinations shall be conclusive and binding on the Company and Executive. For purposes of such calculations and determinations, the Tax Advisor may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Company and Executive shall furnish to the Tax Advisor such information and documents as the Tax Advisor may reasonably request in order to make their required calculations and determinations. The Company shall bear all fees and expenses charged by the Tax Advisor in connection with its services.

 

(iii) In the event that Section 11(d)(i) applies and a reduction is required to be applied to the Payments thereunder, the Payments shall be reduced by the Company in a manner and order of priority that provides Executive with the largest net after-tax value; provided that payments of equal after-tax present value shall be reduced in the reverse order of payment. Notwithstanding anything to the contrary herein, any such reduction shall be structured in a manner intended to comply with Section 409A.

 

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12. Assignment. This Agreement and Executive’s rights under this Agreement are personal to Executive and shall not be assignable by Executive. The Company may, by written notice to Executive, assign this Agreement to any affiliated or successor to all or substantially all of the business and assets the Company and then only so long as such affiliate or successor assumes and agrees, in such form and substance as is reasonably satisfactory to Executive, to perform all of the Company’s duties, responsibilities, obligations and liabilities hereunder, including without limitation upon the termination of the Employment Term; provided, however, the termination of Executive’s employment hereunder by such affiliate or successor and the immediate hiring and continuation of Executive’s employment by such affiliate or successor upon the identical terms and provisions of this Agreement shall not be deemed to constitute a termination of the Employment Term. All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

 

13. Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally, (b) one (1) day after being sent by a reputable commercial overnight service, or (c) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

 

If to the Company:

 

EVO Transportation & Energy Services, Inc.

 

8285 West Lake Pleasant Parkway
Peoria, AZ 85382
Attention: John P. Yeros

 

If to Executive:

 

John Sheehy

PO BOX 35

Waterloo, WI 53594

 

14. Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

 

15. Integration. This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. No waiver, alteration or modification of any of the provisions of this Agreement will be binding unless in writing that specifically refers to this Agreement and is signed by Executive and a duly authorized representative of the Company.

 

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16. Waiver of Breach. The waiver of a breach of any term or provision of this Agreement must be in writing and will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

 

17. Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

18. Governing Law. This Agreement will be construed and interpreted in accordance with, and any dispute or controversy arising from any breach or asserted breach of this Agreement will be governed by, the laws of the State of Wisconsin without regard to any choice of law rules. Any action brought to enforce or interpret this Agreement must be brought in the state or federal courts for the State of Wisconsin, and the parties hereby consent to the jurisdiction and venue of such courts in the event of any dispute. Each of the parties knowingly and voluntarily waives all right to trial by jury in any action or proceeding arising out of or relating to this Agreement, Executive’s employment by the Company, or for recognition or enforcement of any judgment.

 

19. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this Agreement with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

 

20. Counterparts. This Agreement may be executed in counterparts, and may delivered personally or by facsimile or electronic transmission, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned parties.

 

{Signature Page Follows}

 

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IN WITNESS WHEREOF, each of the parties has executed this Employment Agreement, in the case of the Company by its duly authorized officer, as of the Effective Date in the preamble hereof.

 

COMPANY:
EVO Transportation & Energy Services, Inc.

 

By: /s/ Damon Cuzick  

Name: Damon Cuzick

Title: President

 

Date: January 2, 2019

 

EXECUTIVE:

 

By: /s/ John Sheehy  

Name: John Sheehy

 

Date: January 2, 2019

 

 

 

 

Exhibit A

 

Form of Release

[Date]

 

[Via _____________]

Personal and Confidential

 

John Sheehy

[Employee Address]

 

Re: Separation Agreement and Release

 

Dear John:

 

As you know, your employment with EVO Transportation & Energy Services, Inc. (the “Company”) ended effective at the close of business on [Date] pursuant to Section 2 of your Executive Employment Agreement with the Company dated ______________ (the “Employment Agreement”). The purpose of this Separation Agreement and Release letter (“Agreement”) is to set forth the specific separation pay and benefits that the Company will provide you as set forth in Section 2 of your Employment Agreement in exchange for your agreement to the terms and conditions of this Agreement. Capitalized terms used but not defined in this Agreement have the meanings assigned to them in the Employment Agreement.

 

By your signature below, you agree to the following terms and conditions:

 

1. End of Employment . Your employment with the Company ended effective at the close of business on [Date]. Upon your receipt of your final paycheck, which includes payment for services through [Date], you will have received all wages, compensation and benefits owed to you by virtue of your employment with the Company or termination thereof. If applicable, information regarding your right to elect COBRA coverage will be sent to you via separate letter.

 

You are not eligible for any other payments or benefits by virtue of your employment with the Company or termination thereof except for those expressly described in this Agreement. You will not receive the separation pay and benefits described in Section 2 of this Agreement if you (i) do not sign this Agreement and return it to the Company by the Offer Expiration, (ii) rescind this Agreement after signing it, or (iii) violate any of the terms and conditions set forth in this Agreement.

 

2. Separation Pay and Benefits . Specifically in consideration of your signing this Agreement and subject to the limitations, obligations, and other provisions contained in this Agreement, the Company agrees as follows:

 

a. [See Employment Agreement]

 

 

 

 

3. Release of Claims . Specifically in consideration of the separation pay and benefits described in Section 2, and the release provided to you by the Company below, by signing this Agreement you, for yourself and anyone who has or obtains legal rights or claims through you, agree to the following:

 

a. You hereby do release and forever discharge the “Released Parties” (as defined in Section 2.e. below) of and from any and all manner of claims, demands, actions, causes of action, administrative claims, liability, damages, claims for punitive or liquidated damages, claims for attorney’s fees, costs and disbursements, individual or class action claims, or demands of any kind whatsoever, you have or might have against them or any of them, whether known or unknown, in law or equity, contract or tort, arising out of or in connection with your employment or independent contractor engagement with the Company, or the termination of that employment or engagement, or otherwise, and however originating or existing, from the beginning of time through the date of your signing this Agreement.

 

b. This release includes, without limiting the generality of the foregoing, any claims you may have for, wages, bonuses, commissions, penalties, deferred compensation, vacation, sick, and/or paid time off (PTO) pay, separation pay and/or benefits; tortious conduct, defamation, libel, slander, invasion of privacy, negligence, emotional distress; breach of implied or express contract, estoppel; wrongful discharge (based on contract, common law, or statute, including any federal, state or local statute or ordinance prohibiting discrimination or retaliation in employment); violation of any of the following: the United States Constitution, the Wisconsin Constitution, the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq ., Wisconsin Fair Employment Act, Wisconsin Wage Claim and Payment Law, Wisconsin Business Closing and Mass Layoff Law, Wisconsin Cessation of Health Care Benefits Law, Wisconsin Family and Medical Leave Law, Wisconsin Personnel Records Statute, Wisconsin Employment Peace Act, any paid sick leave law, any local human rights ordinance, Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq ., the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq ., the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq ., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq ., the National Labor Relations Act, 29 U.S.C. § 151 et seq ., the Sarbanes-Oxley Act, 15 U.S.C. § 7201 et seq .; any claim for retaliation; all waivable claims arising under Wisconsin and local statutes. You hereby waive any and all relief not provided for in this Agreement. You understand and agree that, by signing this Agreement, you waive and release any claim to employment with the Company.

 

c. If you file, or have filed on your behalf, a charge, complaint, or action, you agree that the payments and benefits described above in Section 1 are in complete satisfaction of any and all claims in connection with such charge, complaint, or action and you waive, and agree not to take, any award of money or other damages from such charge, complaint, or action. Notwithstanding the foregoing, you do not waive your right to receive and fully retain a monetary award from a government-administered whistleblower award program for providing information directly to a governmental agency.

 

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d. You are not, by signing this Agreement, releasing or waiving (1) any vested interest you may have in any 401(k) or profit sharing plan by virtue of your employment with the Company, (2) any rights or claims that may arise after the Agreement is signed, (3) the post-employment payments and benefits specifically promised to you under Section 1 of this Agreement, (4) the right to institute legal action for the purpose of enforcing the provisions of this Agreement, (5) any rights you have to workers compensation benefits, (6) any rights you have under unemployment compensation benefits laws, (7) the right to file a charge or complaint with a governmental agency such as the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Occupational Safety and Health Administration (“OSHA”), the Securities and Exchange Commission (“SEC”) or any other federal, state or local governmental agency, subject to Section 2(c) above, (8) the right to communicate with, testify, assist, or participate in an investigation, hearing, or proceeding conducted by, the EEOC, NLRB, OSHA, SEC or other governmental agency, (9) any rights you may have under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), or (10) any rights arising under any agreements between you and the Company related to any equity interests you may have in the Company.

 

e. The “Released Parties,” as used in this Agreement, shall mean the Company and its parent, subsidiaries, divisions, affiliated entities, insurers, if any, and its and their present and former officers, directors, shareholders, trustees, employees, agents, attorneys, representatives and consultants, and the successors and assigns of each, whether in their individual or official capacities, and the current and former trustees or administrators of any pension or other benefit plan applicable to the employees or former employees of the Released Parties in their official and individual capacities.

 

4. Notice of Right to Consult Attorney and Twenty-One (21) Calendar Day Consideration Period . By signing this Agreement, you acknowledge and agree that the Company has informed you by this Agreement that (1) you have the right to consult with an attorney of your choice prior to signing this Agreement, and (2) you are entitled to at least Twenty-One (21) calendar days from your receipt of this Agreement to consider whether the terms are acceptable to you. You have the right, if you choose, to sign this Agreement prior to the expiration of the Twenty-One (21) day period.

 

5. Notification of Rights under the Federal Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.) . You are hereby notified of your right to rescind the release of claims contained in Section 3 with regard to claims arising under the federal Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq .), within seven (7) calendar days of your signing this Agreement. In order to be effective, the rescission must (a) be in writing; (b) delivered to John P. Yeros, CEO, EVO Transportation & Energy Services, Inc., 8285 West Lake Pleasant Parkway, Peoria, AZ 85382, by hand or mail within the required period; and (c) if delivered by mail, the rescission must be postmarked within the required period, properly addressed to John P. Yeros, as set forth above, and sent by certified mail, return receipt requested. You understand and agree that if you rescind any part of this Agreement in accordance with this Section 5, the Company will have no obligation to provide you the payments and benefits described in Section 2 of this Agreement and you will be obligated to return to the Company any payment(s) and benefits already received in connection with Section 2 of this Agreement.

 

6. Return of Property . You acknowledge and agree that all documents and materials relating to the business of, or the services provided by, the Company are the sole property of the Company. You agree and represent that you have returned to the Company all of its property, including but not limited to, all data, files, documents and property within your possession or control, which in any manner relate to the business of, or the duties and services you performed on behalf of the Company.

 

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7. On-Going Obligations . If you breach any term of this Agreement or Section 9 of your Employment Agreement, the Company shall be entitled to its available legal and equitable remedies, including but not limited to suspending and recovering any and all payments and benefits made or to be made under Section 2 of this Agreement and payment by you of its attorneys’ fees and costs. If the Company seeks and/or obtains relief from an alleged breach of this Agreement, all of the provisions of this Agreement shall remain in full force and effect.

 

8. Cooperation . You agree that through ______________ [THE SEVERANCE PERIOD], you will respond to the Company in a timely and helpful manner via email or telephone should it have questions for you regarding your work for the Company such as, but not limited to, status of projects, location of data and documents, and passwords, provided that such questions must be reasonable in volume and time commitment.

 

9. Non-Disparagement and Confidentiality . You promise and agree not to disparage the Released Parties, the Company’s employees, products or services. You further promise and agree not to disclose or discuss, directly or indirectly, in any manner whatsoever, any information regarding the substance and/or nature of any dispute between the Company and any employee or former employee, including yourself. You agree that the only people with whom you may discuss this confidential information are your legal and financial advisors and your spouse, if applicable, provided they agree to keep the information confidential, federal and state tax authorities, the state unemployment compensation department, other government agencies, or as otherwise required by law.

 

10. Remedies . In the event of litigation arising out of this Agreement or the Employment Agreement, the prevailing party will be entitled to an award of its costs and reasonable attorneys’ fees. If either party breaches any term of this Agreement or the Employment Agreement, the prevailing party shall be entitled to its available legal and equitable remedies. For Company, this also includes but is not limited to suspending and recovering any and all payments and benefits made or to be made under Section 2 of this Agreement. If the Company seeks and/or obtains relief from an alleged breach of this Agreement, all of the provisions of this Agreement shall remain in full force and effect.

 

11. Non-Admission . It is expressly understood that this Agreement does not constitute, nor shall it be construed as, an admission by the Released Parties or you of any liability or unlawful conduct whatsoever. The Released Parties and you specifically deny any liability or unlawful conduct.

 

12. Successors and Assigns . This Agreement is personal to you and may not be assigned by you without the written agreement of the Company. The rights and obligations of this Agreement shall inure to the successors and assigns of the Released Parties.

 

13. Enforceability . If a court finds any term of this Agreement to be invalid, unenforceable, or void, the parties agree that the court shall modify such term to make it enforceable to the maximum extent possible. If the term cannot be modified, the parties agree that the term shall be severed and all other terms of this Agreement shall remain in effect.

 

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14. Law, Jurisdiction and Venue, Jury Trial Waiver . This Agreement will be construed and interpreted in accordance with, and any dispute or controversy arising from any breach or asserted breach of this Agreement will be governed by, the laws of the State of Wisconsin, without regard to any choice of law rules. Any action brought to enforce or interpret this Agreement must be brought in the state or federal courts for the State of Delaware, and the parties hereby consent to the jurisdiction and venue of such courts in the event of any dispute. Each of the parties knowingly and voluntarily waives all right to trial by jury in any action or proceeding arising out of or relating to this Agreement or for recognition or enforcement of any judgment.

 

15. Full Agreement . This Agreement contains the full agreement between you and the Released Parties as to your employment with the Company or termination thereof and may not be modified, altered, or changed in any way except by written agreement signed by both parties. The parties agree that this Agreement supersedes and terminates any and all other written and oral agreements and understandings between the parties as to your employment with the Company or termination thereof. Notwithstanding the foregoing, if you have previously signed an agreement or agreements with the Company containing confidentiality, trade secret, noncompetition, nonsolicitation, intellectual property, return of property, and/or similar provisions your obligations under such agreement(s) (including, without limitation, under Section 9 of your Employment Agreement) shall continue in full force and effect according to their terms and will survive the termination of your employment.

 

16. Counterparts . This Agreement may be executed by facsimile or electronic transmission and in counterparts, each of which shall be deemed an original and all of which shall constitute one instrument.

 

17. Acknowledgment of Reading and Understanding . By signing this Agreement, you acknowledge that you have read this Agreement, including the release of claims contained in Section 3, and understand that the release of claims is a full and final release of all claims you may have against the Company and the other entities and individuals covered by the release. By signing, you also acknowledge and agree that you have entered into this Agreement knowingly and voluntarily.

 

The deadline for accepting this Agreement is 5:00 p.m. on the 22nd calendar day following your receipt of this Agreement (the “Offer Expiration”). If not accepted by such time, the offer contained herein will expire. After you have reviewed this Agreement and obtained whatever advice and counsel you consider appropriate regarding it, please evidence your agreement to the provisions set forth in this Agreement by dating and signing the Agreement. Please then return a signed Agreement to me no later than the Offer Expiration. Please keep a copy for your records.

 

We wish you all the best.

 

Sincerely,

 

EVO Transportation & Energy Services, Inc.

 

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ACKNOWLEDGMENT AND SIGNATURE

 

By signing below, I, John Sheehy, acknowledge and agree to the following:

 

I have had adequate time to consider whether to sign this Separation Agreement and Release.
I have read this Separation Agreement and Release carefully.
I understand and agree to all of the terms of the Separation Agreement and Release.
I am knowingly and voluntarily releasing my claims against the Company and the other persons and entities defined as the Released Parties.
I have not, in signing this Agreement, relied upon any statements or explanations made by the Company except as for those specifically set forth in this Separation Agreement and Release.
I intend this Separation Agreement and Release to be legally binding.
I am signing this Separation Agreement and Release on or after my last day of employment with the Company.

 

Accepted this ____ day of ____________, 20__.

 

_______________________________

John Sheehy

  

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