Item
2.01
|
Completion
of Acquisition or Disposition of Assets.
|
Entry
into and Closing of Equity Purchase Agreement
On
June 1, 2018, EVO Transportation & Energy Services, Inc. (the “Company”) entered into an equity purchase agreement
(the “Purchase Agreement”) with Billy (Trey) Peck Jr. (“Peck”) pursuant to which the Company acquired
all of the issued and outstanding shares (the “TR Shares”) in Thunder Ridge Transport, Inc., a Missouri corporation
(“Thunder Ridge”), from Peck and Thunder Ridge became a wholly-owned subsidiary of the Company. Thunder Ridge is based
in Springfield, Missouri and is engaged in the business of fulfilling government contracts for freight trucking services.
As
consideration for the TR Shares, the Company issued a promissory note dated June 1, 2018 in the principal amount of $2,500,000
to Peck (the “TR Note”). The TR Note bears interest at 6% per year with a default interest rate of 9% per year and
has a maturity date of the earlier of (a) the date the Company raises $40,000,000 in public or private offerings of debt or equity;
(b) December 31, 2018 and (c) termination of Peck’s employment with the Company by the Company without cause or by Peck
for good reason. The TR Note is secured by all of the assets of Thunder Ridge pursuant to a security agreement dated June 1, 2018
between the Company, Thunder Ridge, and Peck (the “Security Agreement”), and is also secured by the TR Shares, which
the Company pledged to Peck pursuant to a stock pledge agreement dated June 1, 2018 between the Company and Peck (the “Pledge
Agreement”).
The
Company also agreed to pay $450,000 on behalf of Thunder Ridge to the Bank of Missouri, Thunder Ridge’s lender, within ten
business days following such time as the Company raises at least $40,000,000 in a public or private debt or equity offering. In
addition, approximately $1.8 million of Thunder Ridge indebtedness remained outstanding following completion of the transactions
contemplated by the Purchase Agreement.
If
the Company fails to repay the amounts outstanding under the TR Note or the $450,000 on or before December 31, 2018, Peck has
the right to require the Company to return the TR Shares and effectively rescind the sale of the TR Shares to the Company.
The
descriptions set forth above of the Purchase Agreement, the TR Note, the Pledge Agreement, and the Security Agreement are not
complete and are subject to and qualified in their entirety by reference to the text of the Purchase Agreement, the TR Note, the
Pledge Agreement, and the Security Agreement, copies of which are filed herewith as Exhibits 2.1, 10.1, 10.2, and 10.3, the terms
of which are incorporated by reference.
Trey
Peck Employment Agreement
On
June 1, 2018, the Company entered into an employment agreement (the “Peck Employment Agreement”) with Peck pursuant
to which Peck will serve as the executive vice president of business development of the Company. The Peck 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 Peck Employment Agreement, Peck will be entitled to base compensation of
$200,000 per year, incentive compensation based on Peck’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
Peck 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
Peck Employment Agreement also includes a customary confidentiality covenant and one-year post-termination nonsolicitation and
non-interference covenants.
The
description set forth above of the Peck Employment Agreement is not complete and is subject to and qualified in its entirety by
reference to the text of the Peck Employment Agreement, a copy of which is filed herewith and the terms of which are incorporated
by reference.