STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT, made this 17th day of February, 1998, by and
among WESTECH ENERGY CORPORATION, a Colorado corporation ("Westech"), WESTECH
ENERGY NEW ZEALAND LIMITED, a ________________ corporation ("WESNZ"), and XXXXXX
XXXXXX ("Xxxxxx").
W I T N E S S E T H:
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WHEREAS, Westech is a wholly owned subsidiary of Energy Corporation of
America, a West Virginia corporation ("ECA"), and ECA owns all of the issued and
outstanding voting common stock of Westech, consisting of One Million
(1,000,000) shares, One Dollar ($1.00) par value; and
WHEREAS, the Articles of Incorporation of Westech have been amended to
create a new class of nonvoting stock referred to as Class A stock, which shares
have all the same rights and privileges as the stock owned by ECA other than
voting rights; and
WHEREAS, WESNZ is a wholly owned subsidiary of ECA and ECA owns all of the
issued and outstanding voting stock of WESNZ, consisting of One Thousand (1,000)
shares _____ par value; and
WHEREAS, WESNZ's corporate documents have been amended to create a new
class of nonvoting stock referred to as Class A stock, which shares have all
the same rights and privileges as stock owned by ECA other than voting rights;
and
WHEREAS, Davies is the President of Westech and a valued employee of
Westech and ECA considers it desirable and in its best interest that Davies be
given an added incentive to advance the interests of the company; and
WHEREAS, Westech desires to issue to Davies Twenty-Five Thousand Six
Hundred Forty-One (25,641) shares of Class A stock of Westech, which shares when
issued will represent 2.5 percent of all the outstanding stock of Westech, and
Davies desires to purchase Twenty-Five Thousand Six Hundred Forty-One (25,641)
shares of Class A stock of Westech on the terms and conditions set forth herein;
and
WHEREAS, WESNZ desires to issue to Davies Twenty-Six (26) shares of Class A
stock of WESNZ, which shares when issued will represent 2.5 percent of all
outstanding stock of WESNZ,, and Davies desires to purchase Twenty-Six (26)
shares of Class A stock of WESNZ on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties do hereby agree as follows:
1. Sale and Issurance of Stock. Westech agrees to sell and issue to
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Davies and Davies agrees to purchase from Westech Twenty-Five Thousand Six
Hundred Forty-One (25,641) shares of Class A stock representing 2.5 percent of
all outstanding stock of Westech. WESNZ agrees to sell and issue to Davies and
Davies agrees to purchase from WESNZ Twenty-Six (26) shares of Class A stock to
WESNZ representing 2.5 percent of all outstanding stock of WESNZ. The
Twenty-Five Thousand Six Hundred Forty-One (25,641) shares WESNZ Class A stock
are hereinafter collectively referred to as the "Stock". Davies agrees to pay a
total purchase price of One Hundred Fifty Thousand Dollars ($150,000.00) for the
Stock.
2. Payment of Purchase Price. In payment of the purchase price for the
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Stock, Davies agrees to execute and deliver in favor of Westech and WESNZ a
promissory note substantially in the form of Exhibit A hereto, in the principal
amount of One Hundred Fifty Thousand Dollars ($150,000.00) bearing interest at
the rate of eight percent (8%) per year, interest payable quarterly, with all
outstanding interest and principal payable ten (10) years from the date of
execution of the promissory note.
3. Stock Pledge. To secure the repayment of the promissory note to be
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executed and delivered in accordance with Paragraph 2 above, Davies hereby
agrees to pledge his Westech and WESNZ shares to Westech and WESNZ respectively
and to execute and deliver to Westech and WESNZ a Stock Pledge Agreement
substantially in the form of Exhibit B attached hereto.
4. Restrictions. The Stock acquired by Davies hereunder shall be
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subject to the following restrictions:
(a) The Stock is nontransferable and is subject to the terms and
conditions of this Stock Purchase Agreement, including Davies' obligation to
resell the Westech shares to Westech and the WESNZ shares to WESNZ as set forth
in Paragraph 4(b) below.
(b) If Davies' employment with Westech is terminated for any
reason, including death, Davies, or the executor of Davies' estate, agrees to
immediately resell the Stock purchased hereunder to the respective corporation
at the price per share set forth herein. The resale price per share for the
Westech shares shall be equal to six (6) times the average per share earnings
for the most recent three (3) fiscal years of Westech.
"Earnings" shall mean Westech's earnings (net of extraordinary items,
Windfall Profits Taxes, and other similar and/or substituted taxes, and state
and local taxes, but before provisions for federal income taxes) as determined
in accordance with generally accepted accounting principles consistently applied
by Westech's regularly engaged accountants, which determination shall be final
and binding upon Davies and Westech.
The resale price per share for the WESNZ shares shall be equal to six (6)
times the average per share earnings for the most recent three (3) fiscal years
of WESNZ.
"Earnings" shall mean WESNZ's earnings (net of extraordinary items,
Windfall Profits Taxes, and other similar and/or substituted taxes, and state
and local taxes, but before provisions for federal income taxes) as determined
in accordance with generally accepted accounting principles consistently applied
by WESNZ's regularly engaged accountants, which determination shall be final and
binding upon Davies and WESNZ.
5. Binding Effect. This agreement shall be binding upon and inure to
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the benefit of any successor or successors of Westech or WESNZ.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed
as of the day and year first above written.
WESTECH ENERGY CORPORATION
By:/s/ Xxxx X. Xxxxxxx
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Its: Secretary
WESTECH ENERGY NEW ZEALAND LIMITED
By:/s/ Xxxx X. Xxxxxxx
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Its: Secretary
/s/ Xxxxxx Xxxxxx
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XXXXXX XXXXXX
