STOCK PURCHASE AGREEMENT
This
Stock Purchase Agreement (the “Agreement”) is entered into as
of May 7, 2010, by and among Garb Oil & Power Corporation, a Utah
corporation (the “Company”) and Xxxx Xxxxxxxx
(the “Purchaser”). In
consideration of the mutual promises contained herein the Company and the
Purchaser hereby agree as follows:
1. Stock Purchase. To
the period ending December 31, 2009 accrued wages owing to the purchaser was
$42,338.00 and loans with aggregate outstanding principal owed to the purchaser
was $12,363.00 and accrued interest on this loan was $24,580.00. The Purchaser
hereby purchases from the Company and the Company hereby sells to the Purchaser
13,456 shares (the “Shares”) of the Company’s
class B preferred stock, $0.0001 par value (“Class B Preferred”) in full
satisfaction and accord of accrued wages in an amount equal to $30,338.00, and
full satisfaction of loans with aggregate outstanding principal and interest in
an amount equal to $36,943.00 owing to the Purchaser by the Company (the “Purchase
Price”). The Purchase Price constitutes full and adequate
consideration for the Shares, and the Shares, when issued in accordance with the
terms herein, will be fully-paid and nonassessable outstanding shares of Class B
Preferred. The balance of the accrued wages in the amount of $12,000.00 will
remain as owing to the Purchaser by the Company. The Loan plus all
corresponding interest is considered fully satisfied.
2. General. The
Purchaser hereby makes the representations on Exhibit
A with respect to the purchase of the Shares hereunder. The
Purchaser agrees to the restrictions on transfer on Exhibit
B. This Agreement shall be governed by the laws of the State
of Utah without regard to principles of conflicts of laws. The
representations, warranties, covenants and agreements made in this Agreement
shall survive the closing of the transactions contemplated
hereby. Neither party may assign this Agreement except with the prior
written consent of the other party. Except as otherwise provided in
this Agreement, the provisions of this Agreement shall inure to the benefit of,
and be binding upon, the successors and permitted assigns of the
parties. This Agreement constitutes the entire understanding and
agreement among the parties with regard to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings with
respect thereto. No provision of this Agreement may be amended or
waived except by a written instrument signed by all parties. No
unenforceable or invalid provision of this Agreement shall affect the
enforceability or validity of the remaining provisions hereof. This
Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties executing such counterparts, and all of which
together shall constitute one instrument. Facsimile copies of signed
signature pages of this Agreement shall be binding originals.
IN WITNESS WHEREOF, this Stock
Purchase Agreement is executed effective as of the date first set forth
above.
PURCHASER:
COMPANY:
GARB OIL & POWER
COROPRATION
a Utah corporation
By:
By:
Name:
Xxxx
Xxxxxxxx
Name: Xxxx
Xxxxx
Title: Chief Executive
Officer
Exhibit
A
INVESTMENT
REPRESENTATION STATEMENT
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1.
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Accredited
Investor. The Purchaser is an “accredited investor”
within the meaning of Regulation D, Rule 501(a), promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the “Securities
Act”).
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2.
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Purchasing for Own
Investment. The Purchaser is purchasing the Shares
solely for investment purposes, and not for further
distribution. The Purchaser’s entire legal and beneficial
ownership interest in the Shares is being purchased and shall be held
solely for the Purchaser’s account, except to the extent the Purchaser
intends to hold the Shares jointly with the Purchaser’s
spouse. The Purchaser is not a party to, and does not presently
intend to enter into, any contract or other arrangement with any other
person or entity involving the resale, transfer, grant of participation
with respect to or other distribution of any of the Shares. The
Purchaser’s investment intent is not limited to its present intention to
hold the Shares for the minimum capital gains period specified under any
applicable tax law, for a deferred sale, for a specified increase or
decrease in the market price of the shares, or for any other fixed period
in the future.
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3.
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Ability to Protect Own
Interests. The Purchaser can properly evaluate the
merits and risks of an investment in the Shares and can protect its own
interests in this regard, whether by reason of the Purchaser’s own
business and financial expertise, the business and financial expertise of
certain professional advisors unaffiliated with the Company with whom the
Purchaser has consulted, or the Purchaser’s preexisting business or
personal relationship with the Company or any of its officers, directors
or controlling persons.
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4.
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Informed About the
Company. The Purchaser is sufficiently aware of the
Company’s business affairs and financial condition to reach an informed
and knowledgeable decision to acquire the Shares. The Purchaser
has had opportunity to discuss the plans, operations and financial
condition of the Company with its officers, directors or controlling
persons, and have received all information it deems appropriate for
assessing the risk of an investment in the
Shares.
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5.
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Economic
Risk. The Purchaser realizes that the purchase of the
Shares involves a high degree of risk, and that the Company’s future
prospects are uncertain. The Purchaser is able to hold the
Shares indefinitely if required, and is able to bear the loss of its
entire investment in the Shares.
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6.
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Restricted
Securities. The Purchaser understands that the Shares
are “restricted securities” in that the sale of the Shares has not been
registered under the Securities Act in reliance upon an exemption for
non-public offerings. In this regard, the Purchaser also
understands and agrees that: (i) the Purchaser must hold the Shares
indefinitely, unless any subsequent proposed resale is registered under
the Securities Act, or unless an exemption from registration is otherwise
available (such as Rule 144); (ii) the Company is under no obligation
to register any subsequent proposed resale of the Shares; and (iii) the
certificate evidencing the Shares will be imprinted with a legend which
prohibits the transfer of the Shares unless such transfer is registered or
such registration is not required in the opinion of counsel for the
Company.
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7.
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Rule
144. The Purchaser is familiar with Rule 144
adopted under the Securities Act, which in some circumstances permits
limited public resales of “restricted securities” like the Shares acquired
from an issuer in a non-public offering. The Purchaser
understands that its ability to sell the Shares under Rule 144 in the
future is uncertain, and will depend upon, among other things:
(i) the availability of certain current public information about the
Company; (ii) the resale occurring more than one year after the
Purchaser’s purchase and full payment (within the meaning of Rule 144) for
the Shares; and (iii) if
the Purchaser is an affiliate of the Company, or a non-affiliate who has
held the Shares less than two years after the Purchaser’s purchase and
full payment: (A) the sale being made through a broker in an
unsolicited “broker’s transaction” or in transactions directly with a
market maker, as said term is defined under the Securities Exchange Act of
1934, as amended, (B) the amount of Shares being sold during any three
month period not exceeding the specified limitations stated in Rule 144,
and (C)
timely filing of a notice of proposed sale on Form 144, if
applicable.
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8.
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Availability of Rule
144. The Purchaser understands that the requirements of
Rule 144 may never be met, and that the Shares may never be
saleable. The Purchaser further understands that at the time
the Purchaser wishes to sell the Shares, there may be no public market for
the Company’s stock upon which to make such a sale, or the current public
information requirements of Rule 144 may not be satisfied, either of
which would preclude the Purchaser from selling the Shares under
Rule 144 even if the one-year minimum holding period had been
satisfied.
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9.
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Restrictions on
Resale. The Purchaser understands that in the event Rule
144 is not available it, any future proposed sale of any of the Shares by
the Purchaser will not be possible without prior registration under the
Securities Act, compliance with some other registration exemption (which
may or may not be available), or each of the
following: (i) written notice to the Company containing detailed
information regarding the proposed sale, (ii) an opinion of counsel
to the effect that such sale will not require registration, and (iii) the
Company notifying the Purchaser in writing that its counsel concurs in
such opinion. The Purchaser understands that neither the
Company nor its counsel is obligated to provide the Purchaser with any
such opinion. The Purchaser understands that although
Rule 144 is not exclusive, the Staff of the SEC has stated that
persons proposing to sell private placement securities other than in a
registered offering or pursuant to Rule 144 will have a substantial
burden of proof in establishing that an exemption from registration is
available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own
risk.
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Exhibit
B
RESTRICTIONS
ON TRANSFER
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1.
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Legends. The
Purchaser understands and agrees that the Company shall cause the legends
set forth below, or substantially equivalent legends, to be placed upon
any certificate(s) evidencing ownership of the Shares, together with any
other legends that may be required by the Company or by applicable state
or federal securities laws:
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THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”) OR ANY UNDER THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT
TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH
THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE
SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AS SET
FORTH IN THE STOCK PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH TRANSFER RESTRICTIONS ARE BINDING ON TRANSFEREES OF
THESE SHARES.
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2.
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Transfer Procedure;
Stop-Transfer Notices; Refusal to Transfer. Prior to
transferring any Shares, the Purchaser shall deliver to the Company a
written notice stating: (i) the Purchaser’s bona fide intention to make a
permitted transfer of its Shares; (ii) the name, address and phone number
of each proposed transferee; (iii) the aggregate number of Shares to be
transferred to each proposed transferee; and (iv) the exemptions under
applicable state and federal securities laws upon which the Purchaser is
relying in making the proposed transfer. The Purchaser shall
also deliver to the Company a written agreement executed by the transferee
or other recipient of Shares pursuant to which such transferee agrees to
be bound by the transfer restrictions set forth herein as was the
Purchaser. The Purchaser agrees that to ensure compliance with
the restrictions referred to herein, the Company may issue appropriate
“stop transfer” instructions to its transfer agent, if any, and that, if
the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records. The
Company shall not be required (a) to transfer on its books any Shares
that have been sold or otherwise transferred in violation of any of the
provisions of this Agreement or (b) to treat as owner of such Shares
or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such Shares shall have been so
transferred.
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