Pursuant to the agreement, shareholders of S T Pipeline shall have a right to receive up to $15,200 per share in cash, or $19 million in the aggregate, subject to a reduction to reflect the book value of certain assets and a further reduction of $3 million that will be paid to S T Pipeline shareholders on a deferred basis.
In addition, Energy Services has agreed to enter into a three-year employment agreement with James Shafer and a non-compete agreement with Pauletta Shafer, the owners of S T Pipeline. Each of Mr and Mrs Shafer has agreed to vote their shares in favor of the S T Pipeline acquisition.
The closing of the S T Pipeline acquisition is subject to various closing conditions, including the acquisition of another business or businesses, such that the total value of the businesses acquired have an aggregate fair value of 80% of Energy Services net assets, as defined in its initial public offering.
In addition, the closing of the acquisition is further conditioned on holders of less than 20% of the shares of Energy Services common stock voting against the transaction and electing to convert their Energy Services common stock into cash from the fund established in connection with Energy Services initial public offering.
