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STOCK REDEMPTION AGREEMENT
(Brenton W. Hatch)
THIS STOCK REDEMPTION AGREEMENT (this “Agreement”) is made and entered
into this 26th day of May 2017, by and between Profire Energy, Inc., a Nevada corporation, and
Hatch Family Holding Company, LLC individual (“Hatch”). The Corporation and Hatch are
later sometimes collectively referred to in this Agreement as the “Parties.”
Background
A. The Corporation is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada. The authorized capital stock of the Corporation
consists of (i) 10,000,000 shares of preferred stock, of which, as of the date of this Agreement,
no shares are issued and outstanding, and (ii) 100,000,000 shares of common stock (the “Profire
Common Stock”), of which, as of the date of this Agreement 53,666,961 shares are issued and
50,044,115 outstanding;
B. Hatch owns 13,850,000 shares of the issued and outstanding shares of the
Profire Common Stock;
C. The Corporation desires to purchase and redeem from Hatch, and Hatch desires
to sell to the Corporation, 1,300,000 shares of Profire Common Stock (the “Redemption
Shares”) for the consideration and subject to the terms and conditions set forth in this
Agreement; and
D. The Parties desire that their agreement concerning the redemption of the
Redemption Shares by the Corporation be reduced to writing.
Agreement
NOW, THEREFORE, in consideration of the covenants and agreements set forth in this
Agreement, as well as other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the Parties agree each with the other that the Corporation will redeem
the Redemption Shares from Hatch and Hatch will sell the Redemption Shares to the Corporation
all upon the terms and conditions provided for in this Agreement.
1. Redemption and Sale of the Redemption Shares. Upon and subject to the
terms and conditions of this Agreement, Hatch agrees to sell, convey, transfer, and deliver and
by this Agreement does sell, convey, transfer, and deliver to the Corporation, and the
Corporation agrees to purchase, redeem, and to accept delivery of and by this Agreement does
purchase, redeem, and accept delivery from Hatch of the Redemption Shares, free and clear of
all restrictions on sale or other disposition, liens, charges, claims, security interests, or any
other encumbrances. Simultaneously with the execution and delivery of this Agreement by the
Parties. Hatch shall deliver to the Corporation the stock certificate evidencing his ownership of
the Redemption Shares, duly endorsed in blank.
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2. Purchase Price. Simultaneously with the execution and delivery of this
Agreement by the Parties and upon the delivery of the certificate for the Redemption Shares to
the Corporation, the Corporation shall pay Hatch in immediately available funds, the sum of
$1,703,000, which amount represents the number of Redemption Shares multiplied by the 30-
day average of the closing prices for the Profire Common Stock as reported by the Nasdaq
Capital Market for the 30 trading days immediately preceding the date of this Agreement.
3. Representations and Warranties of Hatch. Hatch represents and warrants to,
and covenants with, the Corporation and its successors and assigns that:
(i) Hatch owns all of the Redemption Shares, free and clear of any and all
claims, liens, restrictions, security interests, charges, or encumbrances;
(ii) the Redemption Shares are not in any way encumbered or pledged as
security;
(iii) Hatch has the full right and authority to sell, transfer, convey, and
deliver the Redemption Shares to the Corporation as in this Agreement provided;
(iv) simultaneously with the execution of this Agreement, Hatch has sold,
transferred, conveyed, and delivered to the Corporation all of the Redemption
Shares, free and clear of all restrictions on sale or other disposition, liens, charges,
encumbrances, security interests, or claims of every kind or nature;
(v) no entity or person has an option or right, present or future, legal or
equitable, written or unwritten, to purchase or acquire from Hatch any of the
Redemption Shares;
(vi) to the best of Hatch’s knowledge, Hatch’s delivery of the Redemption
Shares to the Corporation has conveyed to the Corporation good title to the
Redemption Shares free and clear of all restrictions on sale or other disposition,
liens, charges, encumbrances, security interests, or claims of every kind or nature;
(vii) Hatch has the full and unlimited right to transfer the Redemption
Shares as in this Agreement provided and Hatch will defend Hatch’s and the
Corporation’s ownership of the Redemption Shares as described in this
Agreement;
(viii) Hatch understands that the Corporation’s purchase of the Redemption
Shares will result in a taxable event for Hatch, an event as to which the
Corporation has not advised Hatch;
(ix) to the best of Hatch’s knowledge, Hatch has informed the Corporation
of all obligations and liabilities that have been or may be imposed on the
Corporation as a result of or in any way based on any acts or omissions to act of
Hatch; and
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(x) Hatch has had the opportunity to meet with officers of the Corporation,
to ask questions and receive answers concerning the Corporation, and has
received all information that Hatch believes is necessary or desirable in
connection with the transactions contemplated by this Agreement.
The representations, warranties, and covenants of Hatch set forth in this Agreement in general
and in this Paragraph 3 in particular or in any certificates or other documents provided or
executed by Hatch pursuant to this Agreement shall survive the closing of the purchase and sale
of the Redemption Shares and shall continue in full force and effect.
4. Mutual Representations and Warranties. Each party represents and warrants
to, and covenants with, the other party that:
(i) each party understands that he or it has been advised to consult with
independent legal counsel with respect to the advisability of executing this
Agreement; and
(ii) each party has made such investigation of the facts pertaining to this
Agreement and all matters pertaining to this Agreement as it or he deems
necessary or appropriate under the circumstances; each party has read and
understands all of the terms and provisions of this Agreement; each party is
signing this Agreement voluntarily and of his or its own free will, without
coercion or duress, intending to be legally bound thereby; and, in executing this
Agreement, each party has and does not rely on any inducements, promises, or
representations of the other party, other than the terms and conditions specifically
set forth in this Agreement.
5. Confidentiality. Hatch agrees that he shall maintain in the strictest confidence,
and shall not, without the express, prior written consent of the Corporation, reveal, disclose,
furnish, or make accessible, directly or indirectly, to any person or entity, any nonpublic
information provided to Hatch by the Corporation in connection with the transactions
contemplated by this Agreement.
6. Miscellaneous.
(a) Expenses. The Parties agree that the Corporation and Hatch shall each
be responsible for one-half of the legal fees charged by Stoel Rives LLP, counsel to the
Corporation, in connection with the transactions contemplated by this Agreement. Any other
expenses of any party to this Agreement not otherwise provided for in this Agreement, shall be
paid by such party, whether or not the transactions contemplated by or in this Agreement are in
fact consummated.
(b) Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be delivered (i) personally, (ii) by first-class
mail, certified, return receipt requested, postage prepaid, (iii) by overnight courier, with one
acknowledged receipt, or (iv) by facsimile transmission followed by delivery by first-class mail
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or by overnight courier, in the manner provided for in this Paragraph 6(b) and properly
addressed as follows:
If to the Corporation to:
Profire Energy, Inc.
321 South 1250 West, Suite 1
Lindon, UT 84042
Attention: Ryan W. Oviatt
If to Hatch:
Brenton W. Hatch
321 South 1250 West
Lindon, UT 84062
or to such other address as a party to this Agreement may indicate to the other party in the
manner provided for by this Paragraph 6(b). Notices, etc. given by mail shall be deemed
effective and complete four (4) business days following the date of the posting and mailing
thereof in accordance with this Paragraph 6(b); notices, etc. given by overnight courier shall be
deemed effective and complete upon delivery; notices by facsimile transmission shall be deemed
effective upon confirmed receipt, unless receipt thereof shall be disputed in which case receipt
shall be deemed effective as of the effective date of the follow-up notice called for by this
Paragraph 6(b) with respect to such facsimile-transmitted notice; and notices, etc. delivered
personally shall be deemed effective and complete at the time of the delivery of the notice and
the obtaining of a signed receipt for the notice, unless a party shall refuse to provide a signed
receipt, in which case the notice shall be effective upon the completion of personal delivery of
the notice in such a way as to insure the ability to establish personal delivery.
(c) Counterparts. This Agreement may be executed by the Parties signing
separate copies of this Agreement, in which event all such copies shall constitute original
counterparts of this one Agreement but all of which together shall constitute one and the same
agreement.
(d) Successors and Assigns. All the terms of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the Parties and their respective
successors, permitted assigns, heirs, and legal representatives, and nothing contained in this
Agreement is intended to confer any right, remedy, or benefit upon any other person. No
assignment or delegation of this Agreement, or of any of the rights or obligations under this
Agreement, by any party to this Agreement shall be valid without the written consent of the
other party.
(e) Paragraph Headings. The paragraph headings in this Agreement are
for the purpose of reference only, and shall not limit or otherwise affect any of the terms of this
Agreement.
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(f) Invalidity. If any part or parts of this Agreement shall be held to be null
or void or otherwise unenforceable, such invalidity shall not affect the validity and
enforceability of the rest of this Agreement.
(g) Incorporation of Recitals. Recitals A through D are incorporated by
reference into this Agreement.
(h) Additional Documents. The Parties shall execute any additional
documents that may be necessary or desirable to carry out the intent of this Agreement.
(i) Attorneys’ Fees. Should any party default in any of the covenants
contained in this Agreement, or in the event a dispute shall arise as to the meaning of any term
of this Agreement, the defaulting or non-prevailing party shall pay all costs and expenses,
including reasonable attorneys’ fees, that may arise or accrue from enforcing this Agreement,
securing an interpretation of any provision of this Agreement, or in pursuing any remedy
provided by applicable law whether such remedy is pursued or interpretation is sought by the
filing of a lawsuit, an appeal, or otherwise.
(j) Construction. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah, which internal laws exclude any
provision or interpretation of such laws that would call for, or permit, the application of the
laws of any other state or jurisdiction, and any dispute arising therefrom and the remedies
available shall be determined solely in accordance with such internal laws. Whenever the
context requires, the singular shall include the plural and the plural shall include the singular,
the whole shall include any part thereof, and any gender shall include all other genders. Time is
of the essence and performance of this Agreement.
(k) Nonwaiver. No failure by any party to take action on account of any
default, whether in a single instance or repeatedly, shall constitute a waiver of any such default
or of the performance required under this Agreement. No express waiver by any party of any
provision of or performance under this Agreement or of any default shall be construed as a
waiver of any other or future provision, performance, or default. Any waiver to be effective
must be in writing and signed by an appropriate officer of the Corporation or by Hatch, as the
case may be.
(l) Entire Agreement-Modification. This Agreement supersedes all prior
agreements or understandings of the Parties on the subject matter of this Agreement. Any prior
negotiations, correspondence, agreements, proposals, or understandings relating to the subject
matter of this Agreement shall be deemed to be merged into this Agreement and to the extent
inconsistent with this Agreement, such negotiations, correspondence, agreements, proposals, or
understandings shall be deemed to be of no force or effect. There are no representations,
warranties, or agreements, whether express or implied, or oral or written, with respect to the
subject matter of this Agreement, except as set forth in this Agreement.
This Agreement shall not be modified by any oral agreement, either express or implied,
and all modifications of this Agreement shall be in writing and be signed by all of the Parties.
The provisions of this Paragraph 6(l) may not be modified, either orally or by conduct, either
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expressly or impliedly, and it is the declared intention of the Parties that no provision of this
Agreement, including this Paragraph 6(l), shall be in any way modifiable in any manner
whatsoever except through a written document signed by all of the Parties.
[SIGNATURE PAGE FOLLOWS]
[Signature Page to Stock Redemption Agreement]
92858881.5 0059466-00001
IN WITNESS WHEREOF, Profire Energy, Inc. has caused this Agreement to be signed
on its behalf and Brenton Hatch has signed on behalf of Hatch Family Holding, LLC all on the
date indicated in the first paragraph of this Agreement.
PROFIRE ENERGY, INC.,
a Nevada corporation (the “Corporation”)
By: _______________________________
Ryan W. Oviatt
Chief Financial Officer
By: ________________________________
Hatch Family Holding Company, LLC