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.”
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.
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.
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 (4th) 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.
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]
IN WITNESS WHEREOF, the Parties have executed this Equipment Lease Agreement as of the day and year first above written.
|SHEEHY ENTERPRISES, INC.|
|/s/ John Sheehy|
|By: John Sheehy|
|Its: Chief Executive Officer|
|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]
|Truck Number||Make & Year||VIN|
|230 Boden||MKE Shop|