Exhibit 2.1
EXECUTION COPY
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this
“Agreement”)
is made as of this 22nd day of March, 2017, among Wrap
Technologies, LLC, a Delaware limited liability company
(“Buyer”),
Petro River Oil Corp., a Delaware corporation (the
“Shareholder”),
and Megawest Energy Montana Corp., a Delaware corporation (the
“Company”).
RECITALS
A.
The Shareholder owns all of the presently issued
and outstanding shares of capital stock of the Company (the
“Shares”)
and desires and intends to sell the Shares to Buyer at the price
and on the terms and subject to the conditions set forth below;
and
B.
The
Buyer desires and intends to acquire the Shares from the
Shareholder at the price and on the terms and subject to the
conditions set forth below.
AGREEMENT
NOW
THEREFORE, in consideration of the covenants and conditions set
forth herein, the parties agree as follows:
1.
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Purchase and Sale of Shares
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Subject
to the terms and conditions of this Agreement, at the Closing (as
defined in Section 3 of this Agreement), the Shareholder shall
sell, convey, transfer, and assign, upon the terms and conditions
hereinafter set forth, to Buyer, free and clear of all liens,
pledges, claims, and encumbrances of every kind, nature and
description, and Buyer shall purchase and accept from the
Shareholder the Shares, which comprise all of the outstanding
capital stock of the Company.
Buyer shall purchase the Shares for and in
consideration for the issuance to Shareholder at the Closing of
16.75 membership units of Buyer (the “Membership
Interest”) (the
“Purchase
Price”), which Membership
Interest shall represent 2% of the issued and outstanding
membership interests of the Buyer.
The Shareholder shall not retain any right, title
and interest in any assets of the Company (the
“Excluded
Assets”) following
consummation of the Closing.
The consummation of the purchase and sale of the
Shares contemplated herein (the “Closing”)
shall take place at the offices of the Company at 55
5th
Avenue, New York, New York 10003 at
such other time and place as the Buyer, the Shareholder and the
Company agree upon orally or in writing. The date upon which the
Closing occurs is referred to herein as the
“Closing
Date”.
5.
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Representations and Warranties of the Company and the
Shareholder
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The
Company and the Shareholder, jointly and severally, represent and
warrant to the Buyer as of the date hereof (which representations
and warranties shall survive the Closing as provided in Section
13.1 of this Agreement) as follows:
The Shareholder owns one thousand (1,000) shares
of the Company’s common stock, $0.01 par value, (the
“Common
Stock”), which represents
all of the issued and outstanding capital stock of the
Company. Such Shares are owned free and clear of any lien,
encumbrance, adverse claim, restriction on sale, transfer or voting
(other than restrictions imposed by applicable securities laws),
preemptive right, option or other right to purchase, and upon the
consummation of the sale of such Shares as contemplated hereby, the
Buyer will have good title to such Shares, free and clear of any
lien, encumbrance, adverse claim, restriction on sale, transfer or
voting (other than restrictions imposed by applicable securities
laws), preemptive right, option or other right to
purchase.
The Shareholder has all requisite power, right and
authority to enter into this Agreement and the documents
contemplated hereby (the “Transaction
Documents”) to which they
are a party, to consummate the transactions contemplated hereby and
thereby, and to sell and transfer the Shares without the consent or
approval of any other person, corporation, partnership, joint
venture, organization, other entity or governmental or regulatory
authority (“Person”).
The Shareholder has taken, or will take prior to the Closing, all
actions necessary for the authorization, execution, delivery and
performance of this Agreement and the other Transaction
Documents.
This
Agreement has been, and the other Transaction Documents to which
the Shareholder is a party on the Closing Date, will be, duly
executed and delivered by the Shareholder, and this Agreement is,
and each of the other Transaction Documents to which they are a
party on the Closing will be, the legal, valid and binding
obligation of the Shareholder, enforceable against the Shareholder
in accordance with their terms.
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5.1.4
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No Approvals or Notices Required; No Conflicts
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The
execution, delivery and performance of this Agreement and the other
Transaction Documents by the Shareholder, and the consummation of
the transactions contemplated hereby and thereby, will not (a)
constitute a violation (with or without the giving of notice or
lapse of time, or both) of any provision of any law, judgment,
decree, order, regulation or rule of any court, agency or other
governmental authority applicable to the Shareholder, (b) require
any consent, approval or authorization of, or declaration, filing
or registration with, any Person, (c) result in a default (with or
without the giving of notice or lapse of time, or both) under,
acceleration or termination of, or the creation in any party of the
right to accelerate, terminate, modify or cancel, any agreement,
lease, note or other restriction, encumbrance, obligation or
liability to which the Company is a party or by which it is bound
or to which any assets of the Company are subject, or (d) result in
the creation of any lien or encumbrance upon the assets of the
Shareholder, or upon the Shares or other securities of the
Company.
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5.1.5
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Securities Law Representations and Warranties
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The Shareholder has been advised that the
Membership Interest is not registered under the Securities Act of
1933, as amended (the “Act”),
or applicable state securities laws, but is being issued pursuant
to exemptions from such laws, and that the Buyer’s reliance
upon such exemptions is predicated in part on the
Shareholder’s representations contained herein. The
Shareholder acknowledges that the Buyer is relying in part upon the
Shareholder’s representations and warranties contained herein
for the purpose of qualifying the issuance of the Membership
Interest for applicable exemptions from registration or
qualification pursuant to federal or state securities laws, rules
and regulations.
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(a)
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Acquired Entirely for Own Account
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The Membership Interest will be acquired for the
Shareholder’s own account, not as a nominee or agent, and not
with a view to distributing all or any part thereof, except in
compliance with the Act; provided,
however, it is currently
intended that the Membership Interest may be distributed to
stockholders of Shareholder as a dividend at such time as the
Membership Interest, or such securities issuable upon conversion or
exchange of such Membership Interest, is registered under the Act.
Other than as set forth above, the Shareholder has no present
intention of selling, granting any participation in or otherwise
distributing any of the Membership Interest in a manner contrary to
the Act or any applicable state securities law. The Shareholder
does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participation to such
person or to any third person with respect to any of the Membership
Interest.
The
Shareholder has been solely responsible for their own due diligence
investigation of the Buyer and its business, and their analysis of
the merits and risks of the investment made pursuant to this
Agreement, and are not relying on anyone else’s analysis or
investigation of the Buyer, its business or the merits and risks of
the Membership Interest other than professional advisors employed
specifically by the Shareholder to assist the
Shareholder.
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(c)
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Access to Information
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The
Shareholder believes they have been given access to full and
complete information regarding the Buyer, including, in particular,
the current financial condition and lack of tangible assets of the
Buyer and the risks associated therewith, and has utilized such
access to its satisfaction for the purpose of obtaining information
about the Buyer; particularly, the Shareholder has either attended
or been given reasonable opportunity to attend a meeting with the
senior executives of the Buyer, for the purpose of asking questions
of, and receiving answers from, such persons concerning the terms
and conditions of the issuance of the Membership
Interest and to obtain any additional information, to the extent
reasonably available, necessary to verify the accuracy of
information provided to the Shareholder about the Buyer. No such
investigation, however, shall qualify in any respect the
representations and warranties of the Buyer in this
Agreement.
The
Shareholder, either alone or with the assistance of their
professional advisor, are sophisticated investors, are able to fend
for themselves in the transactions contemplated by this Agreement,
and have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of
the prospective investment in the Membership Interest.
The
investment in the Membership Interest is suitable for the
Shareholder based upon its investment objectives and financial
needs, and the Shareholder has adequate net worth and means for
providing for their current financial needs and contingencies and
has no need for liquidity of investment with respect to the
Membership Interest. The Shareholder’s overall commitment to
investments that are illiquid or not readily marketable is not
disproportionate to its net worth, and investment in the Membership
Interest will not cause such overall commitment to become
excessive.
The
Shareholder has obtained, to the extent it deems necessary, its own
professional advice with respect to the risks inherent in the
investment in the Membership Interest, the condition of the Buyer
and the suitability of the investment in the Membership Interest in
light of the Shareholder’s financial condition and investment
needs.
The
Shareholder is in a financial position to purchase and hold the
Membership Interest and is able to bear the economic risk and
withstand a complete loss of its investment in the Membership
Interest.
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(h)
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Restricted Securities
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The Shareholder realizes that (a) the Membership
Interests have not been registered under the Act, is characterized
under the Act as “restricted
securities” and,
therefore, cannot be sold or transferred unless subsequently
registered under the Act or an exemption from such registration is
available, and (b) there is presently no public market for the
Membership Interest and the Shareholder would most likely not be
able to liquidate its investment in the event of an emergency or to
pledge the Membership Interest as collateral security for loans.
The Shareholder’s financial condition is such that it is
unlikely that the Shareholder would need to dispose of any of the
Membership Interest in the foreseeable future. In this connection,
the Shareholder represents that it is familiar with Rule 144 of the
Securities and Exchange Commission (the “SEC”),
as presently in effect, and understand the resale limitations
imposed thereby and by the Act.
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5.2
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Company Organization, Good Standing; Corporate Authority;
Enforceability
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5.2.1
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Organization, Good Standing, etc.
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The
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Company
is duly qualified to do business and is in good standing in the
states where qualification is required due to (a) the
Company’s ownership or lease of real or personal property for
use in the operation of the Company’s business or (b) the
nature of the business conducted by the Company. The Company has
not at any time owned nor leased any real or personal property, or
had any business, operations, obligations or liabilities under any
assumed or fictitious names. The Company has all requisite power,
right and authority to own, operate and lease its properties and
assets, and to carry on its business as now conducted.
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5.2.2
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Corporate Authority
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The
Company has full corporate power and authority to execute and
deliver this Agreement and the documents contemplated hereby to
which it is a party and to perform its obligations hereunder and
thereunder. The execution and delivery by the Company of this
Agreement and the Transaction Documents to which it is a party, the
performance by the Company of its obligations hereunder and
thereunder and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action. This Agreement constitutes a valid and
binding obligation of the Company, enforceable against the Company
in accordance with its terms, and the Transaction Documents to
which the Company is a party, when executed and delivered by the
Company, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
respective terms.
(a) The authorized capital stock of the Company
consists of one thousand (1,000) shares of common stock, without
par value (the “Common
Stock”).
(b)
The issued and outstanding capital stock of the Company consists
and as of the Closing will consist solely of one thousand (1,000)
shares of Common Stock, all of which are, and as of the Closing
Date will be, held of record by the Shareholder. All shares of
Common Stock, that are issued and outstanding are, and as of the
Closing Date will be, duly authorized, validly issued, fully paid
and nonassessable, and issued in compliance with all applicable
federal, state and foreign securities laws. Except for the
Shareholder, no Person holds any interest in any
Shares.
(c)
There are no outstanding rights of first refusal, preemptive
rights, options, warrants, conversion rights or other agreements,
either directly or indirectly, for the purchase or acquisition from
the Company of the Common Stock or other securities of the
Company.
(d)
The Company is not a party or subject to any agreement or
understanding, and there is no agreement or understanding between
any Persons, that affects or relates to the voting or giving of
written consents with respect to any securities of the Company or
the voting by any director of the Company.
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5.4
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Subsidiaries and Affiliates
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The
Company does not have, and has never had, any Subsidiaries. The
Company does not own, directly or indirectly, any ownership,
equity, profits or voting interest in, or otherwise control, any
corporation, partnership, joint venture or other entity, and has no
agreement or commitment to purchase any such interest.
The
execution, delivery and performance of this Agreement and/or the
Transaction Documents by the Company and the consummation of the
transactions contemplated hereby and thereby will not: (a) violate,
conflict with, or result in any breach of, or constitute a default
under, any provision of the Company’s articles of
incorporation or by-laws; (b) violate, conflict with, result in any
breach of, or constitute a default (or an event that, with notice
or lapse of time or both, would constitute a default) under, any
contract or judgment to which the Company is a party or by which it
is bound or which relates to the Company’s business or
assets; (c) result in the creation of any encumbrance, security
interest, mortgage, lien, charge, option, license, adverse claim or
restriction of any kind on any of the assets of the Company or upon
any Shares or other securities of the Company; (d) violate any
applicable law, statute, rule, ordinance or regulation of any
governmental body; (e) give any party with rights under any
contract, judgment or other restriction to which the Company is a
party or by which it is bound, the right to terminate, modify or
accelerate any rights, obligations or performance under such
contract, judgment or restriction; (f) result in the creation of
any lien or encumbrance upon the assets of the Company, or upon any
Shares or other securities of the Company; or (g) invalidate or
adversely affect any permit, license, authorization or status used
in the conduct of the business of the Company.
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5.6
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Consents and Approvals
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(a)
No consent, approval or authorization of, or declaration, filing or
registration with, any governmental body is required for the
execution, delivery and performance by the Company of this
Agreement and the Transaction Documents to which it is a party or
for the consummation by the Company of the transactions
contemplated hereby and thereby and (b) no consent, approval or
authorization of any third party is required for the execution,
delivery and performance by the Company of this Agreement and the
Transaction Documents to which it is a party and the consummation
by the Company of the transactions contemplated hereby and
thereby.
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5.7
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Corporate Books and Records
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The
Company has furnished to Buyer true and complete copies of (a) the
articles of incorporation and bylaws of the Company as currently in
effect, including all amendments thereto, (b) the minute books of
the Company and (c) the stock transfer books of the Company. Such
minutes reflect all meetings of the Company’s shareholders,
Board of Directors and any committees thereof since the
Company’s inception, and such minutes accurately reflect the
events of and actions taken at such meetings. Such stock transfer
books accurately reflect all issuances and transfers of shares of
capital stock of the Company since its inception.
The
Company is and has been in compliance with all laws, statutes,
rules, ordinances and regulations promulgated by any governmental
body and all judgments applicable to the operation of its business,
to its employees or to its property. The Company has not received
notice of any alleged violation (whether past or present and
whether remedied or not), nor is the Company aware of any basis for
any claim of any such violation, of any such law, statute, rule,
ordinance, regulation or judgment.
No
broker, finder or other financial consultant has acted on behalf of
the Company or the Shareholder in connection with this
Agreement.
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5.10
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Financial
Statements
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The Company has provided to the Buyer an unaudited
balance sheet, dated December 31, 2016 and an unuadited operating
statement for the 12 month periods ended December 31, 2016
(collectively, the “Financial
Statements”). The
Financial Statements were prepared from the books and records kept
by the Company and fairly present the financial position, results
of operations and changes in financial position of the Company, as
of their respective dates and for the periods indicated, in
accordance with generally accepted accounting principles
consistently applied. The Company has no liabilities or obligations
of any nature (absolute, accrued or contingent) that are not fully
reflected or reserved against in the balance sheet dated December
31, 2016 (the “Most Recent
Balance Sheet”), as
prescribed by generally accepted accounting principles, except
liabilities or obligations incurred since the date of the Most
Recent Balance Sheet in the ordinary course of business and
consistent with past practice. The Company is not a guarantor,
indemnitor, surety or other obligor of any indebtedness of any
other Person.
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5.11
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Absence of Undisclosed Liabilities
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The
Company has no liabilities or obligations, secured or unsecured,
whether accrued, absolute, contingent, unasserted or otherwise,
except for liabilities (a) reflected or reserved against in the
Most Recent Balance Sheet or (b) incurred in the ordinary course of
business after the date of the Most Recent Balance Sheet and not
material in amount, either individually or in the aggregate. The
Company has not entered into or agreed to enter into any
transaction, agreement or commitment, suffered the occurrence of
any event or events or experienced any change in financial
condition, business, results of operations or otherwise that, in
the aggregate, has (i) interfered with the normal and usual
operations of the business or business prospects of the Company or
(ii) resulted, or could reasonably be expected to result, in a
material adverse change in the business, assets, operations,
prospects or condition (financial or otherwise) of the
Company.
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5.12
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Environmental
Matters.
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The
Company is, and at all times has been, in full compliance with, and
has not been and is not in violation of or liable under, any
federal, state and municipal environmental laws
(“Environmental
Laws”). There are no pending or, to the knowledge of
Company, threatened claims, encumbrances, or other restrictions of
any nature, resulting from any environmental, health, and safety
liabilities or arising under or pursuant to any Environmental Law,
with respect to or affecting any of the assets of the
Company.
6.
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Representations and Warranties of Buyer
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The
Buyer represents and warrants to the Company and the Shareholder as
follows:
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6.1
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Organization, Good Standing, etc.
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The
Buyer is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware. Buyer has
all requisite power and authority to own, operate and lease its
assets and to carry on its business as it is now
conducted.
The
Buyer has full power and authority to execute and deliver this
Agreement and the Transaction Documents to which it is a party and
to perform its obligations hereunder and thereunder. The execution
and delivery by the Buyer of this Agreement and Transaction
Documents to which it is a party, the performance by the Buyer of
its obligations hereunder and thereunder and the consummation by
the Buyer of the transactions contemplated hereby and thereby have
been duly authorized. This Agreement constitutes a valid and
binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, and the Transaction Documents to which
the Buyer is a party, when executed and delivered by the Buyer,
will constitute valid and binding obligations of the Buyer,
enforceable against the Buyer in accordance with their respective
terms.
The
execution, delivery and performance of this Agreement and/or the
Transaction Documents by the Buyer and the consummation of the
transactions contemplated hereby or thereby by the Buyer will not
(a) violate, conflict with, or result in any breach of, any
provision of the Buyer’s articles of incorporation or bylaws;
(b) violate, conflict with, result in any breach of, or constitute
a default (or an event that, with notice or lapse of time or both,
would constitute a default) under any contract or judgment to which
the Buyer is a party or by which it is bound or (c) violate any
applicable law, statute, rule, ordinance or regulation of any
governmental body.
7.
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Conditions Precedent to Buyer’s Obligations
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The
Buyer’s obligations under this Agreement are subject to the
satisfaction of each of the following conditions, each of which is
material, for the sole benefit of the Buyer and may be waived only
in writing by the Buyer:
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7.1
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Representations and Warranties
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The
representations of the Company and the Shareholder contained in
Section 5 of this Agreement shall be true on and as of the Closing
Date with the same effect as though such representations and
warranties had been made on and as of the Closing
Date.
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7.2
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Performance of Agreements
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The
Company and the Shareholder shall have duly performed and complied
with all covenants and obligations contained in this Agreement or
any other Transaction Document that are required to be performed or
complied with by them on or before the Closing Date.
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7.3
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Officer’s Certificate
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The
Buyer shall have received a certificate of an officer of the
Company, in a form reasonably acceptable to Buyer, dated the
Closing Date, certifying that the conditions set forth in Sections
7.1, 7.2, 7.4, 7.6, 7.7, 7.9, 7.11, 7.12, 7.13, and 7.15 have been
fulfilled.
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7.4
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Shareholder’s Certificate
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The
Buyer shall have received a certificate of the Shareholder, in a
form reasonably acceptable to the Buyer, dated the Closing Date,
certifying that the conditions set forth in Sections 7.1, 7.2, 7.5,
7.6, 7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13 and 7.15 have been
fulfilled.
The
Buyer shall have received the resignations from all officers and
directors of the Company, effective as of the Closing.
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7.8
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Delivery of Certificates
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The
Shareholder shall have delivered to the Buyer certificates
representing the Shares, duly endorsed for transfer on the
Company’s books.
Authority
to act on behalf of the Company shall be transferred solely to the
Buyer, in connection with all banks, trust companies, savings and
loan associations and other financial institutions at which the
Company maintains safe deposit boxes or accounts.
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7.10
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Termination of Options and Warrants
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All
options, warrants and other contractual rights to purchase capital
stock of the Company shall have expired or been
terminated.
The
results of the Buyer’s due diligence investigation of the
Company and the Shareholder as it relates to the Shares shall be
satisfactory in all respects to the Buyer.
From
the date of this Agreement to the Closing Date, there shall not
have been any material adverse change in (a) the business,
operations, assets, liabilities, earnings, condition (financial or
otherwise) or prospects of the Company or (b) with respect to the
Shareholder and the Shares, and no material adverse change shall
have occurred (or be threatened) in any domestic or foreign laws
affecting the Company or in any third party contractual or other
business relationships of the Company.
8.
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Conditions to the Company’s and Shareholder’s
Obligations
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The
Company’s and Shareholder’s obligations under this
Agreement are subject to the satisfaction of the following
conditions:
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8.1
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Representations and Warranties
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The
representations of the Buyer contained in Section 6 of this
Agreement shall be true on and as of the Closing Date with the same
effect as though such representations and warranties had been made
on and as of the Closing Date.
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8.2
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Registration
Agreement
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The
Buyer shall agree to file a registration statement with the SEC
withing sixty (60) daysfrom the Closing Date, which registration
statement registers the Shares under the Act.
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8.3
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Performance of Agreements
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Buyer
shall have duly performed and complied with all covenants and
obligations contained in this Agreement or any other Transaction
Document that are required to be performed or complied with by it
on or before the Closing Date.
From
the date of this Agreement through the Closing Date, the Company
shall conduct its business in the ordinary course consistent with
the Company’s past practice and shall not engage in any
extraordinary transaction without the Buyer’s prior written
Consent.
Upon
the terms and subject to the conditions hereof, each of the parties
shall (a) make promptly its respective filings, and thereafter make
any other required submissions, under applicable laws with respect
to the transactions contemplated hereby and shall cooperate with
the Buyer with respect to such filings and submissions and (b)
use under
this Agreement, the substantially prevailing party shall be
entitled to recover its attorneys’ its best efforts to take,
or cause to be taken, all appropriate action, and to do, or cause
to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated hereby, including, without
limitation, using its best efforts to obtain all waivers, licenses,
permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts as are
necessary for the consummation of the transactions contemplated
hereby and to fulfill the conditions to the closing of the sale of
the Shares to the Buyer. In case at any time after the Closing Date
any further action is necessary or desirable to carry out the
purposes of this Agreement, each party to this Agreement shall use
its best efforts to take all such action. None of the Buyer, the
Company or the Shareholder will undertake any course of action
inconsistent with this Agreement or that would make any
representations, warranties or agreements made by such party in
this Agreement untrue or any conditions precedent to this Agreement
unable to be satisfied at or prior to the Closing.
Buyer
shall prepare, or cause to be prepared, and file, or cause to be
filed, all tax returns of the Company for all periods ending on or
prior to the Closing Date (which are filed after the Closing Date)
and for all periods that began before the Closing Date and end
after the Closing Date.
Each
party shall be responsible for its own costs and expenses incurred
in connection with the preparation, negotiation and delivery of
this Agreement and the Transaction Documents, including but not
limited to attorneys’ and accountants’ fees and
expenses; except that in no event shall any of such costs or
expenses be borne by or charged to the Company.
12.
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Attorneys’ Fees and Costs
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In
the event that a party commences a legal proceeding (including
arbitration pursuant to Section 14.2 of this Agreement) to enforce
its rights fees and costs from the non-prevailing party or parties,
including those incurred in any arbitration, bankruptcy or appeal
procedure.
13.
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Survival and Indemnification
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All
representations and warranties of the Company and the Shareholder
contained in this Agreement or in the Transaction Documents or in
any certificate delivered pursuant hereto or thereto shall survive
the Closing for a period of twenty-four (24) months after the
Closing Date. The covenants and agreements of the Company, the
Shareholder and the Buyer contained in this Agreement or in the
Transaction Documents shall survive the Closing and shall continue
until all obligations with respect thereto shall have been
performed or satisfied or shall have been terminated in accordance
with their terms.
(a) The Shareholder shall indemnify, defend and
hold harmless Buyer and the Company from and against all claims,
damages, losses, liabilities, costs, expenses (including, without
limitation, settlement costs and any legal, accounting or other
expenses for investigating or defending any actions or threatened
actions and any damages or additional tax costs attributable to any
reductions in any tax attributes of the Company for taxable periods
after the Closing Date) (“Damages”)
incurred by the Company prior to the Closing Date or resulting
from:
(i)
any breach by the Company or the Shareholder of any representation
or warranty in this Agreement or any Transaction
Document;
(ii)
any breach of any covenant, agreement or obligation of the Company
or the Shareholder contained in this Agreement or any Transaction
Document;
(iii)
any misrepresentation contained in any statement, certificate or
schedule furnished by or on behalf of the Company or the
Shareholder pursuant to this Agreement, the Transaction Documents
or in connection with the transactions contemplated
thereby;
(iv)
any federal, state and local income, sales, business and
occupation, franchise, or other activity-based tax liabilities
incurred by the Company on or prior to the Closing Date, and any
taxes arising out of or resulting from the payment of the Purchase
Price; or
(v)
any claims or legal proceedings against the Company arising prior
to the Closing Date.
(b)
The Buyer shall indemnify and hold the Shareholder harmless from
any and all Damages resulting from (i) any breach of any
representation or warranty made by the Buyer in this Agreement or
in any Transaction Document and (ii) any breach by the Buyer of any
covenant, agreement or obligation of the Buyer contained in this
Agreement or any Transaction Document.
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13.3
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Claims for Indemnification
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Whenever any claim shall arise for indemnification
under Section 13 of this Agreement, the party seeking
indemnification (the “Indemnified
Party”) shall promptly
notify the party from whom indemnification is sought (the
“Indemnifying
Party”) of the existence
of the claim and, when known, the facts constituting the basis for
such claim. In the event any such claim for indemnification is made
resulting from or in connection with any claim or legal proceedings
by a third party, the notice to the Indemnifying Party shall
specify, if known, the amount or an estimate of the amount of the
liability arising from such claim. The Indemnified Party shall not
settle or compromise any claim by a third party for which it is
entitled to indemnification without the prior written consent of
the Indemnifying Party, which consent shall not unreasonably be
withheld, unless suit shall have been instituted against it and the
Indemnifying Party shall not have taken control of such suit after
notification as provided in Section 14.4 of this
Agreement.
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13.4
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Defense by Indemnifying Party
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In
connection with any claim giving rise to indemnity resulting from
or arising out of any claim or legal proceeding by a person or
entity who is not a party to this Agreement, the Indemnifying Party
at its sole cost and expense may, upon written notice to the
Indemnified Party, assume the defense of any such claim or legal
proceeding if it acknowledges to the Indemnified Party in writing
its obligations to indemnify the Indemnified Party with respect to
all elements of such claim. The Indemnified Party shall be entitled
to participate in (but not control) the defense of any such action,
with its counsel and at its own expense. If the Indemnifying Party
does not assume the defense of any such claim or resulting
litigation within thirty (30) days after the date that notice of
such claim is received from the Indemnified Party, (a) the
Indemnified Party may defend against such claim or litigation, in
such manner as it may deem appropriate, including, but not limited
to, settling such claim or litigation, after giving notice of the
same to the Indemnifying Party, on such terms as the Indemnified
Party may deem appropriate, and (b) the Indemnifying Party shall be
entitled to participate in (but not control) the defense of such
action, with its counsel and at its own expense. If the
Indemnifying Party thereafter seeks to question the manner in which
the Indemnified Party defended such third party claim or the amount
or nature of any such settlement, the Indemnifying Party shall have
the burden to prove by a preponderance of the evidence that the
Indemnified Party did not defend or settle such third party claim
in a reasonably prudent manner.
No
party may assign any of its rights or obligations hereunder without
the prior written consent of the other party. This Agreement shall
be binding upon and inure to the benefit of the parties and their
respective heirs, legal representatives, successors and
assigns.
Any claims or disputes arising out of this
Agreement which cannot be resolved amicably between the parties
shall be settled by submission to the American Arbitration
Association (the “AAA”)
for binding arbitration to be conducted in New York, New York. The
arbitration shall be conducted by one arbitrator mutually agreed
upon by the parties, or, if the parties cannot agree, chosen in
accordance with the AAA rules, and resolution of the dispute by
such arbitrator shall be binding and conclusive upon the parties.
On prior leave of the arbitrator, the parties may engage in limited
discovery, including limited depositions. Any award made pursuant
to this Section 15.2 may be entered in and enforced by any court
having jurisdiction, and the parties consent and commit themselves
to the jurisdiction of the courts of the State of New York for the
purpose of the enforcement of any such award. The arbitrator shall
award attorneys’ fees and costs to the substantially
prevailing party in accordance with Section 13 of this Agreement.
The fees of the arbitrator shall be borne equally by the parties
except that, in the discretion of the arbitrator, any award may
include a party’s share of such fees.
This
Agreement embodies and constitutes the entire understanding among
the parties with respect to the transactions contemplated by this
Agreement, and all prior or contemporaneous agreements,
understandings, representations and statements between the parties,
oral or written, are merged into and superseded by this
Agreement.
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14.4
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Modification and Waiver
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Neither
this Agreement nor any of its provisions may be modified, amended,
discharged or terminated except in writing signed by the party
against which the enforcement of such modification, amendment,
discharge or termination is sought, and then only to the extent set
forth in such writing. No failure of a party to insist upon strict
performance by the other party of any of the terms and conditions
of this Agreement shall constitute or be deemed to be a waiver of
any such term or condition, or constitute an amendment or waiver of
any such term or provision by course of performance, and each
party, notwithstanding any failure to insist upon strict
performance, shall have the right thereafter to insist upon strict
performance by the other party of any and all of the terms and
conditions of this Agreement. Any party may, in its sole and
absolute discretion, waive, only in writing, any condition set
forth in this Agreement to such party’s obligations under
this Agreement which is for the sole benefit of the waiving party,
in which event the non-waiving party or parties shall be obligated
to close the transaction upon all of the remaining terms and
conditions of this Agreement.
Any
notice required or permitted under this Agreement shall be in
writing, and shall be delivered personally or sent by first class
certified mail, or by air courier, postage or other charges
prepaid, to the parties at the following addresses:
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to the Company:
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Megawest
Energy Montana Corp
55
5th
Avenue, Suite 1702
New
York, NY 10003
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to the Shareholder:
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Petro
River Oil Corp
55
5th
Avenue, Suite 1702
New
York, NY 10003
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to
Buyer:
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Wrap
Technologies, LLC
4620
Arville Street, Ste ELas Vegas, NV 89103
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or to such other address or addresses as the parties may from time
to time specify in writing. Notice shall be provided by air courier
and shall be deemed effective upon the earlier of actual delivery
to the recipient or six days after the date on which such notice
was delivered to the courier service. If notice is sent in any
manner other than as provided by this Section 15.5, notice shall be
deemed received when actually received by the party to whom the
notice was delivered.
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14.6
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Governing Law; Severability
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This
Agreement shall be governed for all purposes by the laws of the
State of New York applicable to agreements executed and to be
wholly performed in New York. Nothing contained in this Agreement
shall be construed so as to require the commission of any act
contrary to law, and whenever there is any conflict between any
provision contained in this Agreement and any present or future
statute or law, ordinance or regulation or judicial ruling or
governmental decision with the force of law contrary to which the
parties have no legal right to contract, the latter shall prevail,
but the provision of the Agreement which is affected shall be
limited only to the extent necessary to bring it within the
requirements of such law, ruling or decision without invalidating
or affecting the remaining provisions of the
Agreement.
This
Agreement may be executed in counterparts, each of which shall be
an original, but such documents shall constitute one and the same
document.
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14.8
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Contract Interpretation
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The
parties acknowledge that they have caused this Agreement to be
reviewed and approved by legal counsel of their own choice. This
Agreement has been specifically negotiated, and any presumption
that an ambiguity contained in this Agreement shall be construed
against the party that caused this Agreement to be drafted shall
not apply to the interpretation of this Agreement.
Nothing
contained in this Agreement shall be construed as giving any
person, firm, corporation or other entity, other than the parties
to this Agreement and their successors and permitted assigns, any
right, remedy or claim under or in respect of this Agreement or any
term or condition contained in this Agreement.
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14.10
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Incorporation by Reference
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All
attached exhibits and schedules are incorporated as terms of this
Agreement by this reference.
[Signature page follows]
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective representatives hereunto
authorized as of the day and year first above
written.
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THE
COMPANY:
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MEGAWEST ENERGY MONTANA CORP
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By:
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/s/
Stephen Brunner
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Stephen
Brunner
Its
Authorized Officer
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THE
SHAREHOLDER:
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By:
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/s/ Stephen
Brunner
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Stephen
Brunner
Its
President
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BUYER:
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By:
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/s/ James A.
Barnes
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James
A. Barnes
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Its:
Manager
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