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EXHIBIT 10.2
BUY-SELL STOCK OPTION AGREEMENT
THIS BUY-SELL AND STOCK OPTION AGREEMENT is made as of May 19, 1997 by
and between X. X. XxXxxxxxxx, III and Xxxxx X. XxXxxxxxxx (collectively
"XxXxxxxxxx") and Energy Corporation of America ("ECA").
WHEREAS, XxXxxxxxxx owns, as of the date of this Agreement, 101,925
shares of the common stock of ECA and;
WHEREAS, XxXxxxxxxx and ECA have engaged in lengthy and thorough
discussions and negotiations concerning a possible sale of a portion of the
shares to ECA, as well as negotiations concerning the fair market value of the
shares; and
WHEREAS, in consideration of the Purchase Price to be paid by ECA to
XxXxxxxxxx as set forth below, XxXxxxxxxx and ECA have agreed to do and hereby
agree as follows:
1. Present Transfer of 2,980 of the Shares. XxXxxxxxxx agrees to
transfer, sell and assign, and does hereby transfer, sell and assign to ECA
2,980 shares of the common stock of Energy Corporation of America, a West
Virginia corporation, (the "Initial Shares") on the terms hereinafter set
forth.
2. Option to Purchase. After the transfer of the Initial Shares
to ECA pursuant to paragraph 1 above, XxXxxxxxxx will own 98,945 shares of ECA
common stock. XxXxxxxxxx hereby grants to ECA an option to purchase an
additional 8,940 shares (the "Option Shares") on the following terms:
a. ECA may purchase 2,980 of the Option Shares on
July 1, 1997 and on each July 1 for the next two (2) years for the
Purchase Price of $75.00 per share, payable in
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accordance with paragraph 5 below, by providing notice to XxXxxxxxxx
of its desire to purchase such shares. Such notice must be provided
on or before June 1 of each year. Accordingly, XxXxxxxxxx hereby
grants to ECA an exclusive option to purchase the Option Shares during
the period beginning July 1, 1997 and ending July 1, 1999 (the "Option
Period").
b. In the event ECA fails to exercise, in any year, its
option to purchase the Option Shares as provided in subparagraph a
above, ECA shall have the right to purchase such Option Shares on the
next July exercise date during the Option Period by providing
reasonable notice to XxXxxxxxxx and by paying the Purchase Price of
$75.00 per share in accordance with paragraph 5 below.
c. ECA shall have the absolute right, in its sole
discretion, to accelerate all options to purchase under this Agreement
and to purchase all, or any portion of the Option Shares at any time
during the Option Period.
3. Purchase Price. The Purchase Price for the Initial Shares
transferred simultaneously with the execution of this Agreement shall be
Seventy-Five Dollars ($75.00) per share (Two Hundred Twenty-three Thousand Five
Hundred Dollars ($223,500)), which Purchase Price shall be paid by ECA to
XxXxxxxxxx as set forth in paragraph 5 below. The Purchase Price for the
Option Shares shall be Seventy-Five Dollars ($75.00) per share, payable as
provided in paragraph 5.
4. Closing. The closing ("Closing") with respect to the Initial
Shares shall occur on June 10, 1997. XxXxxxxxxx shall deliver fully endorsed
stock certificates to ECA at 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx.
In the event ECA elects to exercise the option(s) to purchase all or any
portion of the Option Shares pursuant to paragraph 2, delivery of the fully
endorsed stock
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certificates relating to such shares likewise shall take place at 0000 X.
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000.
Payment.
At Closing, ECA will pay to XxXxxxxxxx the Purchase Price of
Seventy-Five Dollars ($75.00) per share (Two Hundred Twenty-Three Thousand Five
Hundred Dollars ($223,500)) for the 2,980 Initial Shares in accordance with
XxXxxxxxxx'x instructions.
In the event ECA elects to exercise its option with respect to
the Option Shares which are exercisable on July 1, 1997 (the July 1997 Shares),
ECA shall pay the Purchase Price of Two Hundred Twenty-Three Thousand Five
Hundred Dollars ($223,500) to XxXxxxxxxx for the July 1997 Shares on August 10,
1997. If ECA elects to exercise its option with respect to the July 1997
shares at a subsequent time pursuant to the terms of this Agreement ECA shall
pay to XxXxxxxxxx the Purchase Price with respect to the July 1997 Shares in
full.
In the event ECA elects to exercise the option(s) to purchase
all or any portion of the Option Shares which may be exercised in July 1998 or
July 1999 pursuant to paragraph 2, ECA will pay to XxXxxxxxxx the Purchase
Price in accordance with XxXxxxxxxx'x instructions for such shares in four
equal quarterly installments, due July 10, October 10, January 10 and March 10
following the exercise of such option(s). ECA shall have the right, at its
sole discretion, to pay any or all of the quarterly installments prior to the
time the same are due.
6. Representations and Warranties. XxXxxxxxxx represents and
warrants as follows:
a. He is the sole owner of and has the right to sell the
Initial Shares and the Option Shares.
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b. The Initial Shares and the Option Shares are free of
all liens and encumbrances.
c. ECA shall receive good and marketable title to the
Initial Shares free of all encumbrances.
d. In the event ECA elects to exercise the option(s) to
purchase all or any of the Option Shares pursuant to paragraph 2, ECA
shall receive good and marketable title to the Option Shares free of
all encumbrances.
7. Dividends. All dividends, voting rights, and other incidents
of ownership of the 2,980 Initial Shares shall be transferred at Closing. All
dividends declared upon the Option Shares, together with all voting rights and
all other incidents of ownership, shall be retained by XxXxxxxxxx until ECA
shall have exercised its rights to purchase said Option Shares pursuant to the
terms of this Agreement. Upon exercise of each of the options and the transfer
of the Option Shares from XxXxxxxxxx to ECA, all dividends, voting rights, and
other incidents of ownership associated with the shares transferred shall vest
in ECA.
8. Binding Effect; Assignment. This Agreement shall be binding
upon the parties, their heirs, legal representatives, successors and assigns.
ECA may assign its rights under this Agreement without the consent of
XxXxxxxxxx provided, however, that no such assignment shall relieve ECA of its
obligation to pay the Purchase Price as herein provided.
9. Entire Agreement. This agreement supersedes all prior
agreements, written and oral, between the parties relating to the subject
matter of this Agreement. There are no other understandings or agreements
between the parties concerning the subject matter of this Agreement.
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10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have signed this Agreement.
/s/ X. X. XxXXXXXXXX, III
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X. X. XxXXXXXXXX, III
/s/ XXXXX X. XxXXXXXXXX
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XXXXX X. XxXXXXXXXX
ENERGY CORPORATION OF AMERICA
By: /s/ XXXX XXXX
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Its: CEO
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