IP TRANSFER AND SECURITIES PURCHASE AGREEMENT
STS
Turbo, Inc.
IP
TRANSFER
AND
SECURITIES
PURCHASE AGREEMENT
This IP
Transfer and Securities Purchase Agreement (this “Agreement”) is made and
entered into effective as of the 13th day of January, 2010 (the “Effective
Date”) by and between STS Turbo, Inc., a Nevada corporation (the “Company”), and
Xxxxxxx X. Xxxxxxx, an individual (the “Purchaser”). The Company and
Purchaser shall each be referred to as a “Party” and collectively as the
“Parties.”
1. TRANSFER OF INTELLECTUAL
PROPERTY; PURCHASE OF SHARES:
a) Purchaser
hereby transfers to the Company all of his rights, title and interest in and to
the intellectual property (the “Intellectual Property”) described in Exhibit A attached
hereto (the “IP Transfer”) which amount, when and if accepted by the Company,
will constitute the payment by the Purchaser of the Purchase Price for the
Shares (as defined below).
b) In
exchange for the IP Transfer, the Company hereby agrees to issue to Purchaser
Five Million (5,000,000) shares of its common stock (the “Shares”)
2. REPRESENTATIONS, WARRANTIES
AND AGREEMENTS BY PURCHASER: The Purchaser hereby represents,
warrants and agrees as follows:
a) Purchase for Own
Account. Purchaser represents that he is acquiring the Shares
solely for his own account and beneficial interest for investment and not for
sale or with a view to distribution of the Shares or any part thereof, has no
present intention of selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the same, and does not
presently have reason to anticipate a change in such intention.
b) Ability to Bear Economic
Risk. Purchaser acknowledges that investment in the Shares
involves a high degree of risk, and represents that he is able, without
materially impairing his financial condition, to hold the Shares for an
indefinite period of time and to suffer a complete loss of his
investment.
c) Access to Information. The
Purchaser acknowledges that the Purchaser has been furnished with such financial
and other information concerning the Company, the directors and officers of the
Company, and the business and proposed business of the Company as the Purchaser
considers necessary in connection with the Purchaser’s investment in the
Shares. Purchaser further acknowledges receipt of the Investor Term
Sheet attached hereto as Exhibit
B. As a result, the Purchaser is thoroughly familiar with the
proposed business, operations, properties and financial condition of the Company
and has discussed with officers of the Company any questions the Purchaser may
have had with respect thereto. The Purchaser
understands:
(i) The
risks involved in this investment, including the speculative nature of the
investment;
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(ii) The
financial hazards involved in this investment, including the risk of losing the
Purchaser’s entire investment;
(iii) The
lack of liquidity and restrictions on transfers of the Shares; and
(iv) The
tax consequences of this investment.
The Purchaser has consulted with the
Purchaser’s own legal, accounting, tax, investment and other advisers with
respect to the tax treatment of an investment by the Purchaser in the Shares and
the merits and risks of an investment in the Shares.
d) Shares Part of Private Placement. The
Purchaser has been advised that the Shares have not been registered under the
Securities Act of 1933, as amended (the “Act”), or qualified under the
securities law of any state, on the ground, among others, that no distribution
or public offering of the Shares is to be effected and the Shares will be issued
by the Company in connection with a transaction that does not involve any public
offering within the meaning of section 4(2) of the Act and/or Regulation D as
promulgated by the Securities and Exchange Commission under the Act, and under
any applicable state blue sky authority. The Purchaser understands
that the Company is relying in part on the Purchaser’s representations as set
forth herein for purposes of claiming such exemptions and that the basis for
such exemptions may not be present if, notwithstanding the Purchaser’s
representations, the Purchaser has in mind merely acquiring Shares for resale on
the occurrence or nonoccurrence of some predetermined event. The
Purchaser has no such intention.
e) Further Limitations on
Disposition. Purchaser further acknowledges that the Shares
are restricted securities under Rule 144 of the Act, and, therefore, when issued
by the Company to the Purchaser will contain a restrictive legend substantially
similar to the following:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
Purchaser further acknowledges that the
Shares are subject to the terms and conditions of that certain Lock Up Agreement
dated May 8, 2009 by and between the Company, Purchaser, and other shareholders
of the Company.
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f) Purchaser
has the full right, power and authority to enter into this Agreement and to
carry out and consummate the transactions contemplated herein. This
Agreement, and all of the Exhibits attached hereto, constitutes the legal, valid
and binding obligation of Purchaser. The Purchaser shall transfer
title in and to the Intellectual Property free and clear of all
liens, security interests, pledges, encumbrances, charges, restrictions,
demands, and claims of any kind or nature whatsoever, whether direct or indirect
or contingent.
3. REPRESENTATIONS, WARRANTIES
AND AGREEMENTS BY COMPANY: The Company hereby represents,
warrants and agrees as follows:
a) Corporate
Power. The Company has all requisite corporate power to
execute and deliver this Agreement and to carry out and perform its obligations
under the terms of this Agreement.
b) Authorization. All
corporate action on the part of the Company, its directors and its stockholders
necessary for the authorization, execution, delivery and performance of this
Agreement by the Company and the performance of the Company’s obligations
hereunder has been taken or will be taken prior to the issuance of the
Shares. This Agreement, when executed and delivered by the Company,
shall constitute valid and binding obligations of the Company enforceable in
accordance with their terms, subject to laws of general application relating to
bankruptcy, insolvency, the relief of debtors and, with respect to rights to
indemnity, subject to federal and state securities laws. The issuance
of the Shares will be validly issued, fully paid and nonassessable, will not
violate any preemptive rights, rights of first refusal, or any other rights
granted by the Company, and will be issued in compliance with all applicable
federal and state securities laws, and will be free of any liens or
encumbrances, other than any liens or encumbrances created by or imposed upon
the Purchaser through no action of the Company; provided, however, that the
Shares may be subject to restrictions on transfer under state and/or federal
securities laws as set forth herein or as otherwise required by such laws at the
time the transfer is proposed.
c) Governmental
Consents. All consents, approvals, orders, or authorizations
of, or registrations, qualifications, designations, declarations, or filings
with, any governmental authority required on the part of the Company in
connection with the valid execution and delivery of this Agreement, the offer,
sale or issuance of the Shares, or the consummation of any other transaction
contemplated hereby shall have been obtained, except for notices required or
permitted to be filed with certain state and federal securities commissions,
which notices will be filed on a timely basis.
4. INDEMNIFICATION: The
Purchaser hereby agrees to indemnify and defend the Company and its directors
and officers and hold them harmless from and against any and all liability,
damage, cost or expense incurred on account of or arising out of:
(a) Any
breach of or inaccuracy in the Purchaser’s representations, warranties or
agreements herein;
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(b) Any
disposition of any Shares contrary to any of the Purchaser’s representations,
warranties or agreements herein;
(c) Any
action, suit or proceeding based on (i) a claim that any of said
representations, warranties or agreements were inaccurate or misleading or
otherwise cause for obtaining damages or redress from the Company or any
director or officer of the Company under the Act, or (ii) any disposition of any
Shares.
5. MISCELLANEOUS:
a) Binding
Agreement. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the Parties. Nothing in this Agreement, expressed or
implied, is intended to confer upon any third party any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
b) Governing Law;
Venue. This Agreement shall be governed by and construed under
the laws of the State of Utah as applied to agreements among Utah residents,
made and to be performed entirely within the State of Utah. The
Parties agree that any action brought to enforce the terms of this Agreement
will be brought in the appropriate federal or state court having jurisdiction
over Salt Lake County, Utah, United States of America.
c) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
d) Titles and
Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
e) Notices. All notices required
or permitted hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the Party to be notified, (b) when sent by
confirmed facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, or (c) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent as
follows:
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If
to the Company:
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STS
Turbo, Inc.
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000
X. 0000 Xxxx, Xxxxx X-0
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Xxxx,
XX 00000
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Facsimile
No.: (000) 000-0000
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Attn: President
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If
to Purchaser:
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Xxxxxxx
X. Xxxxxxx
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000
X. 0000 Xxxx, Xxxxx X-0
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Xxxx,
XX 00000
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Facsimile
No.: (000)
000-0000
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or at
such other address as the Company or Purchaser may designate by ten (10) days
advance written notice to the other Party hereto.
f) Modification;
Waiver. No modification or waiver of any provision of this
Agreement or consent to departure therefrom shall be effective unless in writing
and approved by the Company and the Purchaser.
g) Entire Agreement;
Successors. This Agreement and the Exhibits hereto constitute
the full and entire understanding and agreement between the Parties with regard
to the subjects hereof and no Party shall be liable or bound to the other Party
in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein. The representations,
warranties and agreements contained in this Agreement shall be binding on the
Purchaser’s successors, assigns, heirs and legal representatives and shall inure
to the benefit of the respective successors and assigns of the Company and its
directors and officers.
h)
Expenses. Each
Party shall pay their own expenses in connection with this
Agreement. In addition, should either Party commence any action, suit
or proceeding to enforce this Agreement or any term or provision hereof, then in
addition to any other damages or awards that may be granted to the prevailing
Party, the prevailing Party shall be entitled to have and recover from the other
Party such prevailing Party’s reasonable attorneys’ fees and costs incurred in
connection therewith.
IN
WITNESS WHEREOF, the Parties have
executed this IP Transfer and Securities Purchase Agreement as of the date first
written above.
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“Company”
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“Purchaser”
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STS
Turbo, Inc.,
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a
Nevada corporation
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| /s/ Xxxxxxx X. Xxxxxxx | /s/ Xxxxxxx X. Xxxxxxx | |
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By: Xxxxxxx
X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx, an individual
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Its: President
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Exhibit
A
Intellectual
Property
A ‘green’ power producing technology
that harnesses wasted energy that already exists in vehicles, and converts that
wasted energy into a usable power source capable of dramatically enhancing the
fuel mileage and efficiency of all types of vehicles.
A -
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Exhibit
B
STS
TURBO, INC.
TERM
SHEET
January
13, 2009
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Company:
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STS
Turbo, Inc., a Nevada corporation
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Date
of Formation:
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August
28, 2008
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Capitalization:
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Before the
offering:
· The
Company is authorized to issue 100,000,000 shares of common stock and
10,000,000 shares of preferred stock.
·
There are 28,646,000 shares of common stock and 500,000 shares of
preferred stock outstanding.
After the
offering:
·
There will be 33,646,000 shares of common stock and 500,000 shares
of preferred stock outstanding.
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Subsidiaries:
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The
Company has one wholly-owned subsidiary, Xxxxxxx Turbo Systems, Inc., a
Utah corporation.
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B -
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