Exhibit 10.1
STOCK PURCHASE AGREEMENT
     THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into as of this
18th day of December, 2007 (the “Effective Date”), by and between DAN F.
WHETSTONE (“DFW”), an individual, PAMELA R. LOWRY, an individual, PAULA A.
POOLE, an individual, WILLIAM J. JUNKERMIER, an individual, and ROGER W.
JUNKERMIER, an individual (collectively referred to herein as the “Selling
Shareholders”), and ENERGY WEST, INCORPORATED, a corporation formed under the
laws of the State of Montana, USA, or its nominee (“Purchaser”).
W I T N E S S E T H:
     WHEREAS, Selling Shareholders collectively own 83.16% of the issued and
outstanding capital stock of Cut Bank Gas Company, a corporation organized under
the laws of the State of Montana (the “Company”), which ownership is divided as
follows:

     
Shareholder:
  Number of Shares Owned:

                           
DAN F. WHETSTONE
    Stock Certificate No.     Shares Owned    
 
      40         10      
 
      164         30      
 
      201         25      
 
      212         100      
 
      220         5      
 
      227         50      
 
      241         13      
 
      256         150      
 
      262         50      
 
      298         25      
 
      301         4391      
 
      303         75      
 
      307         20      
 
      311         75      
 
      314         150      
 
      315         20      
 
      318         50      
 
      322         21      
 
      332         50      
 
      334         11      
 
      341         1      
 
      342         100      
 
      343         10      
 
      344         100      
 
      345         5      
 
      350         10      
 
      353         390      
 
      360         2      
TOTAL (DAN WHETSTONE SHARES)
                5,939      

 

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‘JUNKERMIER INTEREST”
    Stock Certificate No.     Shares Owned    
PAMELA R. LOWRY
      356         393      
PAULA A. POOLE
      357         393      
WILLIAM J. JUNKERMIER
      358         393      
ROGER J. JUNKERMIER
      359         393      
TOTAL (JUNKERMIER INTEREST)
                1,572      

OWNERSHIP PERCENTAGES

                           
Cut Bank Gas Company Outstanding Shares
                9,031      
 
                       
Dan F. Whetstone
      5,939         65.76 %    
“Junkermier Interest”
      1,572         17.40 %    
TOTAL
      7,511         83.16 %    
 
                       
 
                       

     The shares listed above shall be collectively referred to herein as the
“Purchased Shares”.
     WHEREAS, Purchaser desires to purchase from the Selling Shareholders and
the Selling Shareholders desires to sell to Purchaser, the Purchased Shares in
exchange for shares of capital stock of Purchaser, all in accordance with the
terms and subject to the conditions set forth herein.
     WHEREAS, the parties hereto acknowledge that as part of this transaction,
Purchaser is also acquiring the goodwill of the Company.
     NOW, THEREFORE, in consideration of the premises and the mutual promises,
representations, warranties and covenants hereinafter set forth, the parties
hereto agree as follows:
1. PURCHASE AND SALE
     Purchase and Sale of the Assets by Purchaser — On the Closing Date, and
subject to the terms and conditions of this Agreement, and upon the basis of the
agreements, representations and warranties herein contained, Selling
Shareholders shall sell, convey, transfer, assign, set over and deliver to
Purchaser free and clear of all liens, encumbrances, liabilities, and rights of
third parties whatsoever, and Purchaser shall purchase from Selling Shareholders
the Purchased Shares.

 

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2. CONSIDERATION AND SHARE EXCHANGE
          2.1 For each Purchased Share owned, each Selling Shareholders shall be
entitled to receive that certain number of validly issued, fully paid and
non-assessable shares of Energy West, Incorporated common stock (the “EWI
Shares”) calculated as follows: Each share of Cut Bank Gas Company stock shall
be valued at $66.44 per share.
          2.1.1 DAN F. WHETSTONE shall receive EWI Shares valued at $394,587.16
($66.44 x 5,939 shares);
          2.1.2 PAMELA R. LOWRY shall receive EWI Shares valued at $26,110.92
($66.44 x 393 shares);
          2.1.3 PAULA A. POOLE shall receive EWI Shares valued at $26,110.92
($66.44 x 393 shares);
          2.1.4 WILLIAM J. JUNKERMIER shall receive EWI Shares valued at
$26,110.92 ($66.44 x 393 shares);
          2.1.5 ROGER W. JUNKERMIER shall receive EWI Shares valued at
$26,110.92 ($66.44 x 393 shares);
     2.2 Calculation of Number of Shares of EWI Shares: The number of EWI Shares
that each Seller shall receive shall be calculated by the set price of one EWI
Share as reported by NASDAQ at 1:00 p.m. Mountain Standard Time the day prior to
closing. 1
     For illustrative purposes only, if one EWI Share is valued at $13.75 at
1:00 p.m. the day prior to closing on the NASDAQ stock exchange,
          1. DAN F. WHETSTONE shall receive 28,697.248 EWI Shares; ($394,587.16/
$13.75);
          2. PAMELA R. LOWRY shall receive 1,898.976 EWI Shares ($26,110.92 /
$13.75);
          3. PAULA A. POOLE shall receive 1,898.976 EWI Shares ($26,110.92 /
$13.75);
          4. WILLIAM J. JUNKERMIER shall receive 1,898.976 EWI Shares
($26,110.92 / $13.75);
          5. ROGER W. JUNKERMIER shall receive 1,898.976 EWI Shares ($26,110.92
/ $13.75).
 

1   In the event Energy West Inc. was to do a stock split prior to closing, said
stock split shall be removed from the calculation.

 

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     2.3 On the Closing Date:

  (i)   Selling Shareholders shall surrender and deliver all certificates
representing the Purchased Shares or, if applicable, replacement certificates
together with lost certificate affidavits and indemnifications (in form and
substance reasonably acceptable to Purchaser), duly endorsed for transfer or
accompanied with executed blank stock powers (in form and substance reasonably
acceptable to Purchaser), together with a new certificate representing such
shares issued in the name of Purchaser; together with cash in the event
Purchaser does not issue fractional shares of stock.     (ii)   Within five
(5) Business Days after the Closing Date and upon delivery of the certificates
for the Purchased Shares in accordance with subsection (i) above, each Selling
Shareholder shall receive a certificate evidencing the EWI Shares issued to said
Selling Shareholders pursuant to the terms of this Section 2.

3. PRE-CLOSING RESTRICTIONS AND UNDERTAKINGS
     3.1 Conduct of the Business of the Company Prior to Closing
          Except with the prior written consent of the Purchaser, during the
period commencing on the date of this Agreement and terminating at the Closing,
the Company shall:

  (a)   preserve intact its legal existence and carry on its business in the
ordinary course of business in accordance with past practices;     (b)   use
commercially reasonable efforts to maintain in full force and effect all
Government Permits held by the Company;     (c)   not sell any assets, except in
the Company’s ordinary course of business, nor make any distributions of the
assets of the Company in the form of return of capital or dividends;     (d)  
not make or permit any change in the Company’s Organizational Documents, or in
the Company’s authorized, issued or outstanding securities;     (e)   not issue
any additional shares of capital stock, membership interests or other securities
or ownership interests of the Company, grant any stock option or right to
purchase any security or ownership interest of the Company, issue any security
or ownership interest convertible into such securities or ownership interests,
purchase, redeem, retire or otherwise acquire any of such securities or
ownership interests, or declare, set aside or pay any dividend or cash
distribution in respect of the securities or ownership interests of the Company;

 

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  (f)   not make any changes in the Company’s accounting methods or practices;  
  (g)   not (i) pay, or incur any obligation for any payment of, any
contribution or other amount to, or with respect to, any Company benefit plans,
except in the ordinary course of business consistent with past practices (ii)
pay any bonus to, make any loan, pay or transfer any assets to, or grant any
increase in the compensation of, any director or officer, of the Company, or
(iii) make any increase in the pension, retirement or other benefits of the
Company’s directors, officers, or employees except in the ordinary course of
business consistent with past practices;     (h)   not have the Company pay,
lend or advance any amount to or in respect of, or sell, transfer or lease any
assets to, or enter into any agreement, arrangement or transaction with, Selling
Shareholders, except for (i) payments, agreements, transactions and arrangements
in the ordinary course of business consistent with past practices;     (i)   not
permit the Company to (i) incur or assume any indebtedness for borrowed money
except in the ordinary course of business consistent with past practices or
issue any debt securities, or (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any third party;     (j)   not permit the Company to (i) make
any loans, advances or capital contributions to, or investments; (ii) pledge or
otherwise encumber             shares of the Company’s capital stock, or
(iii) mortgage or pledge any of the assets, or create or suffer to exist any
lien thereupon except in the ordinary course of business consistent with past
practices;     (k)   not permit the Company to enter into any merger,
consolidation or purchase of any of the entity, or (ii) enter into a joint
venture, partnership or any other equity alliance with any other entity;     (l)
  not (i) permit the Company to terminate the employment of any of its employees
except in the ordinary course of business consistent with past practices, or
(ii) permit the Company to hire any additional employees who were not employees
of the Company as of the date of this Agreement except in the ordinary course of
business consistent with past practices, and

     3.2 Montana Public Service Commission (“MTPSC”) Regulatory Filing.
          3.2.1 Purchaser and the Company through DFW shall have joint
responsibility for the preparation and filing of the regulatory filing(s) to be
made to the MTPSC requesting the Regulatory Approval (the “Regulatory Filing”).
Upon the request of the other party, Company and Purchaser shall use
commercially reasonable efforts to cooperate with such other party to prepare
and file the Regulatory Filing. Each party will bear it own legal and
professional services costs incurred in connection with the preparation and
filing of the Regulatory Filing.

 

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          3.2.2 Nothing in this Agreement will require Purchaser to accept any
condition to, limitation on, or other terms concerning the grant of the
Regulatory Approval requested and/or require Purchaser to waive any condition
required by Purchaser in its MTPSC regulatory filings.
     3.3 Due Diligence Investigation
          3.3.1 During the period beginning on the Effective Date and ending at
5:00 P.M. Mountain Time on the sixtieth (60th) day thereafter (the “Due
Diligence Period”), Purchaser and its representatives shall have the right to
investigate the feasibility of the transaction contemplated by this Agreement,
which investigation may include but is not limited to the review and inspection
of the Company’s corporate books, financial statements, records, contracts,
documents, offices and facilities (the “Due Diligence Investigation”).
          3.3.2 During the Due Diligence Period and continuing through the
Closing Date, DFW shall cause the Company to (a) give Purchaser and its
authorized representatives reasonable access, during normal business hours and
upon reasonable notice, to all books, records, files, documents and contracts of
the Company, and (b) allow Purchaser (together with its authorized
representatives) to make a reasonable number of visits to each office, facility
and other property owned or leased by the Company subject however to the terms
and conditions of the Confidentiality Agreement executed by Purchaser on
December 5, 2006. DFW shall also make the Company’s employees, officers, agents,
accountants and other representatives reasonably available to Purchaser to
answer questions regarding the Company’s business.
     3.4 Delivery of Financial Statements and Regulatory Filings
          During the period commencing on the date of this Agreement and
terminating at the Closing, DFW shall cause the Company to deliver to Purchaser,
within thirty (30) days of being available or filed, copies of (a) all regularly
prepared unaudited monthly, quarterly and annual consolidated financial
statements of the Company prepared after the date of this Agreement, and (b) all
filings or submissions by the Company with any Governmental Authority made after
the date of this Agreement.
     3.5 Public Announcements
          No party or any of their affiliates shall make any public announcement
of the execution and delivery of this Agreement or the transactions contemplated
by this Agreement without first obtaining the prior written consent of the other
party, such consent not to be unreasonably withheld, delayed or conditioned;
provided, however, that nothing contained in this Section 3.5 shall prohibit any
party hereto or any of its affiliates from (i) making any disclosures or having
any discussions with the MTPSC regarding this Agreement or the transaction
contemplated by this Agreement in accordance with Section 3.2.2, or (ii) making
any public announcement if such party or its affiliate determines in good faith,
on the advice of legal counsel, that such public disclosure is required by
applicable Law; provided further, that in such event, such party or its
affiliate shall consult with the other party prior to making such disclosure to
the extent reasonably practicable.

 

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     3.6 Access to Information
          (a) From and after the Effective Date, each party shall grant to the
other party (or its designees) access to the information, books and records
relating to the Company within the party’s possession (including without
limitation work papers and correspondence with taxing authorities, and shall
afford the other party (or its designees) the right to take extracts therefrom
and to make copies thereof. Subject to the terms of the Confidentiality
Agreement dated December 5, 2006.
          (b) Purchaser and DFW shall provide (and cause the Company to provide)
each other with such assistance as may reasonably be requested by the other in
connection with the preparation of any tax return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liabilities for taxes. Such assistance shall include
making employees available on a mutually convenient basis to provide additional
information or explanation of material provided hereunder and shall include
providing copies of relevant tax returns and supporting material. Purchaser
shall be responsible for any additional taxes, interest, penalties and payment
on any claims, or resulting audits other proceedings. In the event said
assistance is required after closing, Purchaser shall compensate DFW and his
accountants and attorneys for their time and costs in assisting Purchaser.
4. POST CLOSING REQUIREMENTS AND UNDERTAKINGS
     4.1 Employee and Benefit Matters
          Exhibit “B” contains a list of employees who are actively employed by
the Company (including individuals on vacation, short-term disability or similar
leave but excluding those persons on long-term disability leave) on the date
hereof who the parties agree and acknowledge will be treated as employees of the
Company for purposes of this Agreement, which such Exhibit “B” shall be amended
as of the Closing Date to include such employees employed in positions at the
Company as of the Closing Date (“Company’s Employees”). Exhibit “B” shall also
include the amount of accrued sick leave, flex time and vacation time for each
of Company’s Employees. From and after the Closing Date, Purchaser shall have
the right to terminate any or all of Company’s Employees at will or to continue
the employment of any or all of Company’s Employees with the Company upon terms
and conditions acceptable to Purchaser in Purchaser’s sole and absolute
discretion.
     4.2 Agreement Not to Solicit Employees
          Unless otherwise consented to in writing by Purchaser, DFW agrees that
during the Restricted Period, DFW and/or any company affiliated with DFW shall
not solicit or hire away any Company employee, unless said employee has been
terminated from employment by Purchaser.

 

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5. REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDERS
     5.1 Each Selling Shareholder represents and warrants as to their Purchased
Shares that they own their respective Purchased Shares free and clear of any and
all liens and encumbrances whatsoever. There are no outstanding subscriptions,
options, warrants, rights of first refusal or other agreements or commitments,
other than this Agreement, obligating them to transfer, or granting an option or
right to any third party to purchase or acquire from them the Purchased Shares.
That each Selling Shareholder is the sole legal and beneficial owner of their
respective Purchased Shares.
     5.2 DFW represents and warrants that the authorized capital stock of the
Company consists of 9,031 shares of common stock, $10.00 par value per share, of
which 9,031 shares are issued and outstanding, the ownership of which shares is
accurately and completely set forth in Exhibit “A” attached hereto and
incorporated herein by this reference. The Purchased Shares were validly
authorized and issued, fully paid for, and nonassessable.
6. [INTENTIONALLY OMITTED]
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
     The obligations of Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing,
of each and every one of the following conditions, all or any of which may be
waived, in whole or in part, by Purchaser in writing for purposes of
consummating such transactions:
     7.1 Warranties and Representations True at Closing
          The representations and warranties as contained in Section 5 above
shall be true and correct when made, and immediately prior to the Closing, other
than shares of Cut Bank Gas Company which may be transferred by shareholders
other than DAN F. WHETSTONE with the same force and effect as though such
covenants, representations, and warranties had been made on and as of such time.
     7.2 No Injunction, Etc.
          No known action, proceeding, investigation, regulation or legislation
shall have been instituted or threatened to enjoin, restrain or prohibit the
consummation of the transactions contemplated hereby.
     7.3 Consents, Approvals and Waivers
          The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, and all requests, conditions and/or
requirements made by the Purchaser to the MTPSC in regard to the regulatory
filings and requested approvals shall have been approved by the MTPSC and any
other required Governmental Authorities under terms and conditions which are
acceptable to Purchaser in its sole and absolute discretion.

 

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     7.4 The Company has not taken or suffered any known act that may reasonably
be expected to cause or result in a known material adverse effect on the assets
and/or business prospects of the Company.
     7.5 Other Agreements
     DFW shall have entered into a Non-Compete Agreement in a form mutually
agreeable to the parties.
     7.6 Purchaser shall have acquired no less than eighty percent (80%) of the
issued and outstanding shares of the Company.
     7.7 The Section 3 Pre-Closing Restrictions and Undertakings have not been
knowingly breached.
     7.8 There has been no known material adverse change in the business and/or
prospects of the Company.
8. [INTENTIONALLY OMITTED]
9. CLOSING
     9.1 Time and Place of Closing
          Upon the terms and subject to the conditions set forth herein, the
Closing shall take place at the offices of Purchaser, 1st Avenue South, Great
Falls, Montana, 59403 commencing at 10:00 a.m., on the last Business Day of the
month in which all of the conditions to the Closing set forth in Section 7 have
been satisfied or waived, or at such other place, time or date the parties may
agree in writing (the date of the Closing being referenced herein as the
“Closing” or the “Closing Date”), provided, however, that the Closing shall be
effective as of the first day of the month following the Closing Date.
     9.2 Closing Requirements
          At the Closing, DFW shall deliver and/or cause the Company to deliver
and/or cause to be delivered to Purchaser:
          9.2.1 original stock ledgers, articles of incorporation, certificates
of incorporation, charters, certificates of formation, bylaws, joint venture
agreements, partnership agreements, limited liability company operating
agreements, and board of directors’, shareholders’ and members’ minutes of the
Company;
          9.2.2 resignations, or evidence of termination by each director and
officer of the Company, unless otherwise agreed by the parties;
          9.2.3 such other evidence of the performance of all covenants and
reasonable satisfaction of all conditions required of Selling Shareholders by
this Agreement, at or prior to the Closing, as Purchaser may reasonably require;

 

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          9.2.4 all books and records relating to the operation of the Company,
including but not limited to all such electronic records, files, ledgers and
other documentation reasonably required by Purchaser in connection with the
ongoing operation of the Company; and
          9.2.5 the share certificates as required under Section 2.2(i).
     9.3 Purchaser’s Obligation at Closing
          Within five (5) days of the Closing Date, Purchaser shall pay and/or
deliver to Selling Shareholders the certificates representing the EWI Shares
issued to Selling Shareholders in accordance with Section 2.2(ii);
     Purchaser shall at the time of closing purchase all other Cut Bank Gas
Company shares from those Shareholders who wish to sell their shares in exchange
for EWI Shares in accordance with the share price formula set forth in Section 2
hereof. Upon receipt of the approval from the MTPSC as contemplated in
Section 3.2 hereof, Purchaser shall make a commercially reasonable attempt to
contact all other Cut Bank Gas Company Shareholders and offer to purchase said
Shareholder’s Shares in accordance with said formula.
10. SURVIVAL OF REPRESENTATIONS
     10.1 All representations, warranties, covenants and agreements of Purchaser
, DFW and the Selling Shareholders as contained in this Agreement or in any
separate certificate or other instrument furnished or to be furnished pursuant
to this Agreement shall survive the Closing.
11. TERMINATION
     11.1 Method of Termination
          This Agreement constitutes the binding and irrevocable agreement of
the parties hereto to consummate the transactions contemplated hereby subject to
the terms and conditions contained herein, the consideration for which is the
covenants set forth herein, and expenditures and obligations incurred and to be
incurred by Purchaser, on the one hand, and by Selling Shareholders, the
Company, on the other hand, in respect of this Agreement, and this Agreement may
be terminated or abandoned only as follows:
          11.1.1. By the unanimous written consent of DFW and Purchaser;
          11.1.2 If any condition to the Closing under Section 7 has not been
satisfied (or waived by Purchaser) by 5:00 p.m. on the one (1) year anniversary
of the Effective Date or at such other time and date as may be mutually agreed
upon by the parties in writing, Purchaser may terminate this Agreement by
written notice given to DFW; or
          If any condition to the Closing under Section 7 has not been satisfied
(or waived by Purchaser) by 5:00 p.m. on the one (1) year anniversary of the
Effective Date or at such other time and date as may be mutually agreed upon by
the parties in writing, any Seller may terminate this Agreement by written
notice given to Purchaser; or

 

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          11.1.3 By either Selling Shareholders or Purchaser if (a) there shall
be any Law that makes consummation of the transactions contemplated herein
illegal or otherwise prohibited; or (b) any judgment, injunction, order or
decree permanently enjoining any of the parties hereto from consummating the
transactions contemplated herein is entered and such judgment, injunction, order
or decree shall become final and non-appealable.
          11.1.4 By Purchaser within five (5) days after the expiration of the
Due Diligence Period, if Purchaser is not satisfied in its sole and absolute
discretion with the results of its Due Diligence Investigation for any reason
whatsoever.
     11.2 Procedure and Effect of Termination
          11.2.1. In the event of a termination by any party pursuant to and in
accordance with Section 11.1, such terminating party shall give prompt written
notice thereof as provided therein to the other party, and the transactions
contemplated hereby shall be abandoned and terminated, without further action by
any of the parties hereto.
          11.2.2. In the event of a termination pursuant to Section 11.1, all
filings, applications and other submissions relating to the consummation of the
transactions contemplated herein shall, to the extent practicable, be withdrawn
from the MTPSC and/or any other Governmental Authority to which made.
12. MISCELLANEOUS
     12.1 Notices
          All notices, demands and requests hereunder by any party hereto to the
other party hereto shall be in writing, and shall be delivered by hand,
nationally recognized overnight courier, facsimile, or registered or certified
mail, return receipt requested, first class postage prepaid, addressed as
follows:

     
12.1.1
  If to Seller:
 
   
 
  Dan F. Whetstone
 
  P.O. Box 844
 
  Cut Bank, MT 59427
 
  Facsimile No.: (406) 873-4735
 
   
 
  Pamela R. Lowry
 
  10602 SE 29th Street
 
  Beaux Arts, WA 98004

 

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  Paula A. Poole
 
  14106 60 Ave. West
 
  Edmonds, WA 98026
 
   
 
  William J. Junkermier
 
  c/o Cerium Networks
 
  1011 East 2nd Avenue
 
  Spokane, WA 99202
 
   
 
  Roger W. Junkermier
 
  c/o Cerium Networks
 
  1011 East 2nd Avenue
 
  Spokane, WA 99202
 
   
 
  and copies to legal counsel for Seller (as to DFW only)
 
   
 
  Warren C. Wentz. Esq.
 
  Jardine, Stephenson, Blewett and Weaver
 
  300 Central Ave., 7th Floor
 
  P.O. Box 2269
 
  Great Falls, MT 59403
 
  Facsimile No.: (406) 727-5419
 
   
 
  and copies to legal counsel for the Cut Bank Gas Company
 
   
 
  David F. Stufft, Esq.
 
  P.O. Box 2559
 
  Kalispell, MT 59903
 
  Facsimile No. 406-752-4459
 
  E-mail: dstufft@montanasky.net
 
   
12.1.2
  If to Purchaser:
 
   
 
  Energy West, Incorporated
 
  P.O. Box 2229
 
  Great Falls, MT 59403
 
  Attn: David A. Cerotzke, Vice-Chairman
 
  Facsimile No.: (406) 791-7560
 
   
 
  and copies to legal counsel to Purchaser:
 
   
 
  Dworken & Bernstein Co., LPA
 
  60 South Park Place
 
  Painesville, OH 44077
 
  Attn: Melvyn E. Resnick and Jodi Littman Tomaszewski
 
  Facsimile No.: (440) 352-3469

 

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  and copies to Purchaser’s Regulatory legal counsel:
 
   
 
  Browning, Kaleczyc, Berry, and Hoven, P.C
 
  139 N. Last Chance Gulch
 
  P.O. Box 1697
 
  Helena, MT 59624
 
  Attn: Kimberly A. Beatty
 
  Facsimile No.: (406) 443-6883

          12.1.3 If delivered by hand or nationally recognized overnight
courier, the day on which a notice, demand or request is delivered shall be the
date on which such delivery is made, if delivered by facsimile, the day upon
which sender receives from its facsimile machine the correct answerback of the
addressee and confirmation of uninterrupted transmission by a transmission
report or the recipient confirming by telephone to the sender that the recipient
has received the facsimile message shall be the date on which such delivery is
made (provided a hard copy of such transmission is dispatched by first class
mail within 48 hours), and, if delivered by mail, the day on which such notice,
demand or request is received shall be the date of delivery; provided that a
notice given in accordance with this Section 12.1 but received on any day other
than a Business Day or after business hours in the place of receipt, will be
deemed to be received on the next Business Day in that place.
          12.1.4 Any party hereto may change its address or facsimile number
specified for notices herein by designating a new address or facsimile number
for notices by notice to the other party in accordance with this Section 12.1.
     12.2 Controlling Law — This Agreement is executed and to be performed in
the State of Montana and shall be construed, interpreted and enforced in
accordance with the laws of the State of Montana.
     12.3 Parties, Successors, Assigns — This Agreement shall be binding upon
and shall inure to the benefit of the respective legal representatives,
successors and assigns of the parties hereto.
     12.4 Counterparts — This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.
     12.5 Expenses — Each party hereto agrees to pay the expenses incurred by
him or it under or in connection with this Agreement, including counsel and
accountant’s fees, expenses of his or its representatives, whether or not the
transaction contemplated by this Agreement is, in fact, consummated. The parties
hereto acknowledge that no broker has been involved in this transaction. All
expenses, incurred by the Cut Bank Gas Company and the Sellers including but not
limited to its legal and accounting and all travel expenses, including if not
paid at time of closing shall be paid by EWI.
     12.6 Severability — In the event any section, paragraph, or portion of this
Agreement shall be or be deemed to be by any court having lawful jurisdiction of
the subject matter of this Agreement void, voidable, or invalid for any reason,
this Agreement shall be otherwise valid and enforceable as if said void,
voidable or invalid section, paragraph, or portion of this Agreement had not
been a part hereof in the first instance.

 

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     12.7 Construction — The language of this Agreement has been reviewed by all
parties with benefit of counsel. Any ambiguities herein shall not be construed
against any party as drafter of the Agreement.
13. CONSTRUCTION OF CERTAIN TERMS AND PHRASES
     Unless the context of this Agreement otherwise requires, (a) words of any
gender include the other gender; (b) words using the singular or plural number
also include the plural or singular number, respectively; (c) the terms
“hereof,” “herein,” “hereunder,” “hereby” and derivative or similar words refer
to this entire Agreement; (d) the terms “include,” “includes,” and “including”
shall be deemed to be followed by the words “but not limited to;” (e) the term
“Section” refers to the specified Section of this Agreement; (f) the term
“Schedule” or “Exhibit” refers to a Schedule or Exhibit attached to this
Agreement; (g) references to time are to Great Falls, Montana Standard time; and
(h) the term “material” and derivative or similar words refer to materiality
with respect to the Company on an aggregate basis. Whenever this Agreement
refers to a number of days, such number shall refer to calendar days unless
Business Days are specified.
14. NO REPRESENTATION OR WARRANTY OF CONDITION OR PROPERTY.
     Not withstanding anything to the contrary in this agreement, the underlying
property and business have been fully inspected by Purchaser. No representation
has been made by Sellers to Purchaser concerning the state or condition of said
underlying property and business, and Purchaser has not relied on any statement
or declaration of Sellers, oral or in writing, as an inducement to the purchase
of said stock. Furthermore, no representation is made by Sellers to Purchaser
regarding the financial condition or profitability of said underlying property
and business and Purchaser has not relied on any statement or declaration of
Sellers, oral or in writing, as an inducement to making of this contract.
Purchaser accepts said underlying property and business AS IS and WHERE IS
without any representation.
15. TIME IS OF THE ESSENCE.
     Time is of the essence in the performance of the terms of this contract.16.
This agreement constitutes the entire agreement between the parties. It is
agreed that all previous negotiations, agreements and communications between the
parties, or their respective predecessors in title, either verbal or written,
and not herein contained, are hereby withdrawn and annulled.

 

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     IN WITNESS WHEREOF, each party hereto has caused this Stock Purchase
Agreement to be executed on its behalf, all as of the day and year first above
written.

              Seller:
 
            DAN F. WHETSTONE
 
            /s/ Dan F. Whetstone      
 
  Dated:   December 14, 2007
 
       
 
            PAMELA R. LOWRY
 
            /s/ Pamela R. Lowry      
 
  Dated:   December 12, 2007
 
       
 
            PAULA A. POOLE
 
            /s/ Paula A. Poole      
 
  Dated:   December 11, 2007
 
       
 
            WILLIAM J. JUNKERMIER
 
            /s/ William J. Junkermier      
 
  Dated:   December 13, 2007
 
       
 
            ROGER W. JUNKERMIER
 
            /s/ Roger W. Junkermier      
 
  Dated:   December 13, 2007
 
       
 
            Purchaser:
 
            ENERGY WEST INCORPORATED
 
            By: /s/ David A. Cerotzke      
 
      David A. Cerotzke, Vice-Chairman
 
  Dated:   December 18, 2007
 
       

 

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Exhibit “A”
Cut Bank Gas Company Shareholder List

 

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Exhibit “B”
COMPANY EMPLOYEES