Exhibit 10.7
WARRANT PLACEMENT AGREEMENT
WARRANT PLACEMENT AGREEMENT (this "Agreement") made as of this 5th day of
April 2006 among Energy Services Acquisition Corp., a Delaware corporation (the
"Company") and the persons set forth at Schedule A (the "Purchasers").
WHEREAS, the Company intends to file with the Securities and Exchange
Commission ("SEC") a registration statement on Form S-1, (the "Registration
Statement"), in connection with the Company's initial public offering (the
"IPO") of up to 10,000,000 units, each unit ("Unit") consisting of one share of
the Company's common stock, $.0001 par value (the "Common Stock"), and two
warrants (the "Warrants"), each Warrant to purchase one share of Common Stock;
and
WHEREAS, the Company desires to sell in a private placement to the
Purchasers (the "Placement") an aggregate of 3,076,923 Warrants (the "Placement
Warrants") substantially identical to the Warrants being issued in the IPO
pursuant to the terms and conditions hereof and as set forth in the Registration
Statement, except that the Placement Warrants to be issued in the Placement
shall not be registered under the Securities Act of 1933, as amended (the
"Securities Act");
WHEREAS, the Purchasers desires to acquire the number of Placement Warrants
set forth opposite their name on Schedule A hereto;
WHEREAS, the Warrants included in the Placement Warrants shall be governed
by the Warrant Agreement filed as an exhibit to the Registration Statement.
WHEREAS, the Purchasers are entitled to registration rights with respect to
the Warrants comprising the Placement Warrants and the Common Stock underlying
such Warrants (collectively, the "Registrable Securities") on the terms set
forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
1. Purchase of Placement Warrants. The Purchasers hereby agree, directly or
through nominees, to purchase an aggregate of 3,076,923 Placement Warrants at a
purchase price of $0.65 per Placement Warrant, or an aggregate of $2,000,000
(the "Purchase Price"). Such purchases shall be in the names and amounts set
forth on Schedule A hereto.
2. Closing. The closing of the purchase and sale of the Placement Warrants
(the "Closing") will take place at such time and place as the parties may agree
(the "Closing Date"), but in no event later than the date on which the SEC
declares the Registration Statement effective (the "Effective Date"). On the
Effective Date, the Purchasers shall pay the Purchase Price by wire transfer of
funds to an account maintained by the Company. Immediately prior to the closing
of the IPO, the Company shall deposit $2,000,000 of the Purchase Price into the
trust account described in the Registration Statement (the "Trust Account"). The
certificates for the Warrants comprising the Placement Warrants
shall be delivered to the Purchasers promptly after the closing of the IPO.
3. Voting of Shares. If the Company solicits approval of its stockholders
of a Business Combination, the Purchasers shall vote all of the shares of the
Common Stock acquired by the Purchasers (i) pursuant to this Agreement, (ii) in
the IPO and (iii) in the aftermarket in accordance with a majority of the shares
voted by the public shareholders in the IPO and therefore waive any redemption
rights they might have with respect to certain of such shares. As used herein, a
"Business Combination" shall mean an acquisition by merger, capital stock
exchange, asset or stock acquisition of, or similar business combination with,
one or more entities with agreements to acquire an operating business selected
by the Company.
4. Waiver of Liquidation Distributions. In connection with the Placement
Warrants purchased pursuant to this Agreement, the Purchasers hereby waives any
and all right, title, interest or claim of any kind in or
2.2 Piggy-Back Registration.
to any liquidating distributions by the Company in the event of a liquidation of
the Company upon the Company's failure to timely complete a Business
Combination. For purposes of clarity, any shares of Common Stock purchased in
the IPO or the aftermarket by the Purchasers shall be eligible to receive any
liquidating distributions by the Company.
5. Lock-Up Agreement. The Purchasers shall not sell, assign, hypothecate,
or transfer any of the Warrants purchased pursuant to this Agreement until
the consummation of a Business Combination.
6. Representations and Warranties of the Purchasers. Each Purchaser hereby
represents and warrants to the Company that:
6.1 The Purchaser is an "accredited investor" as that term is defined in
Rule 501 of Regulation D promulgated under the Securities Act.
6.2 The Placement Warrants are being acquired for the Purchaser's own
account, only for investment purposes and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act.
6.3 The Purchaser has the full right, power and authority to enter into
this Agreement and this Agreement is a valid and legally binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms.
7. Registration Rights.
7.1 Demand Registration. At any time and from time to time on or after the
date on which the Company has publicly announced that it has entered into a
letter of intent or made a comparable announcement with respect to a Business
Combination, the Purchasers or their transferees holding a majority-in-interest
of the Registrable Securities may make a written demand for registration under
the Securities Act of all or part of their Registrable Securities (a "Demand
Registration"). Any demand for a Demand Registration shall specify the number of
Registrable Securities proposed to be sold and the intended method(s) of
distribution thereof. The Company will notify all holders of Registrable
Securities of the demand, and each holder of Registrable Securities who wishes
to include all or a portion of such holder's Registrable Securities in the
Demand Registration (each such holder including shares of Registrable Securities
in such registration, a "Demanding Holder") shall so notify the Company within
fifteen (15) days after the receipt by the holder of the notice from the
Company. Upon any such request, the Demanding Holders shall be entitled to have
their Registrable Securities included in the Demand Registration. The Company
shall, as expeditiously as possible and in any event within sixty (60) days
after receipt of a request for a Demand, prepare and file with the SEC a
Registration Statement on any form for which the Company then qualifies or which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use
its best efforts to cause such Registration Statement to become effective as
promptly as practicable, but in no event prior to the consummation of the
Business Combination. The Company shall not be obligated to effect more than two
Demand Registrations in respect of Registrable Securities.
7.2 "Piggyback" Registration Rights. Subject to the last sentence of this
Section 7.2, at any time after a Business Combination, if the Company shall
determine to proceed with the actual preparation and filing of a new
registration statement under the Securities Act in connection with the proposed
offer and sale of any of its securities by it or any of its security holders
(other than a registration statement on Form X-0, X-0 or other limited purpose
form), the Company will give written notice of its determination to the
Purchasers or their nominees. Upon the written request from a
majority-in-interest of the Purchasers, within 15 days after receipt of any such
notice from the Company, the Company will, except as herein provided, cause all
of the Registrable Securities covered by such request (the "Requested Stock")
held by the Purchasers making such request (the "Requesting Holders") to be
included in such registration statement (each, a "Piggy-Back Registration"), all
to the extent requisite to permit the sale or other disposition by the
prospective seller or sellers of the Requested Stock; provided, further, that
nothing herein shall prevent the Company from, at any time, abandoning or
delaying any registration. If any registration pursuant to this Section 7.2
shall be underwritten in whole or in part, the Company may require that the
Requested Stock be included in the underwriting on the same terms and conditions
as the securities otherwise being sold
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through the underwriters. In such event, the Requesting Holders shall, if
requested by the underwriters, execute an underwriting agreement containing
customary representations and warranties by selling stockholders and a lock-up
on Registrable Securities not being sold. If in the good faith judgment of the
managing underwriter of such public offering the inclusion of all of the
Requested Stock would reduce the number of shares to be offered by the Company
or interfere with the successful marketing of the shares of stock offered by the
Company, the number of shares of Requested Stock otherwise to be included in the
underwritten public offering may be reduced pro rata (by number of shares) among
the Requesting Holders and all other holders of registration rights who have
requested inclusion of their securities or excluded in their entirety if so
required by the underwriter. To the extent only a portion of the Requested Stock
is included in the underwritten public offering, those shares of Requested Stock
which are thus excluded from the underwritten public offering and any other
securities of the Company held by such holders shall be withheld from the market
by the Holders thereof for a period, not to exceed 90 days, which the managing
underwriter reasonably determines is necessary in order to effect the
underwritten public offering. At such time as the provisions of the registration
rights agreement filed as an exhibit to the Registration Statement covering the
shares of Common Stock acquired by the Purchasers prior to the IPO may be
exercised, the exercise and procedural provisions of such agreement, rather than
the provisions of Sections 7.2, 7.3 and 7.4 hereof, shall govern the Registrable
Securities with respect to Piggy-Back Registrations.
7.3 Registration Procedures. To the extent required by Sections 7.1 or 7.2,
the Company will:
(a) prepare and file with the SEC a registration statement with respect to
such securities, and use its best efforts to cause such registration statement
to become and remain effective until the earlier of the date on which all of the
Registrable Securities included in the registration statement have been disposed
of in accordance with the intended method(s) of distribution set forth in such
Registration Statement or three years from the effective date;
(b) prepare and file with the SEC such amendments to such registration
statement and supplements to the prospectus contained therein as may be
necessary to keep such registration statement effective until the earlier of the
date on which all of the Registrable Securities included in the registration
statement have been disposed of in accordance with the intended method(s) of
distribution set forth in such Registration Statement or three years from the
effective date;
(c) furnish to the holders participating in such registration and to the
underwriters of the securities being registered such reasonable number of copies
of the registration statement, preliminary prospectus, final prospectus and such
other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities covered by
such registration statement under such state securities or blue sky laws of such
jurisdictions as the holders may reasonably request in writing within 20 days
following the original filing of such registration statement, except that the
Company shall not for any purpose be required to execute a general consent to
service of process or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(e) notify the holders, promptly after it shall receive notice thereof, of
the time when such registration statement has become effective or a supplement
to any prospectus forming a part of such registration statement has been filed;
(f) notify the holders promptly of any request by the SEC for the amending
or supplementing of such registration statement or prospectus or for additional
information;
(g) prepare and promptly file with the SEC and promptly notify such holders
of the filing of such amendment or supplement to such registration statement or
prospectus as may be necessary to correct any statements or omissions if, at the
time when a prospectus relating to such securities is required to be delivered
under the Securities Act, any event shall have occurred as the result of which
any such prospectus or any other prospectus as then in effect would include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading; and
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(h) advise the holders, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of such registration statement or the initiation or threatening of
any proceeding for that purpose and promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such stop order should
be issued.
The Purchasers shall cooperate with the Company in providing the
information necessary to effect the registration of the Registrable Securities,
including completion of customary questionnaires.
7.4 Expenses. The Company shall bear all costs and expenses incurred in
connection with any Demand Registration pursuant to Section 7.1, any Piggy-Back
Registration pursuant to Section 7.2, and all expenses incurred in performing or
complying with its other obligations under this Agreement, whether or not the
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or "blue sky" laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities); (iii)
printing expenses; (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees); (v) the
fees and expenses incurred in connection with the exchange listing of the
Registrable Securities; (vi) National Association of Securities Dealers, Inc.
fees; (vii) fees and disbursements of counsel for the Company and fees and
expenses for independent certified public accountants retained by the Company
(including the expenses or costs associated with the delivery of any opinions or
comfort letters); (viii) the fees and expenses of any special experts retained
by the Company in connection with such registration and (ix) the fees and
expenses of one legal counsel selected by the holders of a majority-in-interest
of the Registrable Securities included in such registration. The Company shall
have no obligation to pay any underwriting discounts or selling commissions
attributable to the Registrable Securities being sold by the holders thereof,
which underwriting discounts or selling commissions shall be borne by such
holders. Additionally, in an underwritten offering, all selling shareholders and
the Company shall bear the expenses of the underwriter pro rata in proportion to
the respective amount of shares each is selling in such offering.
8. Waiver of Claims; Indemnification The Purchasers hereby waive any and
all rights to assert any present or future claims, including any right of
rescission, against the Company, Xxxxxx, Xxxxx Xxxxx Incorporated ("FBW") or the
other underwriters in the IPO with respect to their purchase of the Placement
Warrants, and the Purchasers agree to indemnify and hold the Company, FBW and
the other underwriters in the IPO harmless from all losses, damages or expenses
that relate to claims or proceedings brought against the Company, FBW or such
other underwriters by any Purchasers of the Placement Warrants or their
transferees, heirs, assigns or any subsequent holders of the Placement Warrants.
9. Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.
This Agreement or any counterpart may be executed via facsimile transmission,
and any such executed facsimile copy shall be treated as an original.
10. Governing Law. This Agreement shall for all purposes be deemed to be
made under and shall be construed in accordance with the laws of the State of
West Virginia. Each of the parties hereby agrees that any action, proceeding or
claim against it arising out of or relating in any way to this Agreement shall
be brought and enforced in the courts of the State of West Virginia or the
United States District Court for the District of West Virginia, and irrevocably
submits to such jurisdiction, which jurisdiction shall be exclusive. Each of the
parties hereby waives any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
5th day of April, 2006.
ENERGY SERVICES ACQUISITION CORP.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive
Officer
PURCHASER:
/s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
/s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
/s/ Xxx Xxxxxxxx
----------------------------------------
Name: Xxx Xxxxxxxx
/s/ Xx Xxxxx
----------------------------------------
Name: Xx Xxxxx
/s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
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SCHEDULE A
Number of
Warrants
---------
Xxxxxxxx X. Xxxxxxxx $1,749,997 2,692,303
Xxxx Xxxxxxxx $ 50,001 76,924
Xxxx Xxxxxx $ 50,001 76,924
Xxxxx X. Xxxxx $ 50,001 76,924
Xxxxxx X. Xxxxxxxx $ 50,001 76,924
Xxxxxxx Xxxxxxxx $ 50,001 76,924
