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Exhibit 10.1
 

 
STOCK PURCHASE AGREEMENT
 
             THIS STOCK PURCHASE AGREEMENT (the “Purchase Agreement”) is made
and entered into as of December 14, 2011, by and between ZBB Energy Corporation,
a Wisconsin corporation (“ZBB”), and each purchaser identified on the signature
pages hereto (each, including its successors and assigns, a “Purchaser” and
collectively the “Purchasers”).
 
ARTICLE 1 - SALE OF SHARES
 
Section 1.1  Sale of Shares.  Subject to the terms and conditions of this
Purchase Agreement, on the Closing Date ZBB agrees to issue and sell to the
Purchasers, and the Purchasers, severally and not jointly, agree to purchase
from ZBB, an aggregate of up to $4,000,000 of shares of ZBB’s Common Stock (the
“Shares”) at a purchase price of $0.7101 per share, which represents the closing
price of the Shares on the trading day preceding the date hereof, as reflected
on Annex 1 attached hereto.  Certain of the Shares as indicated on the
applicable Purchaser signature pages shall be settled by delivery by the Company
via DWAC of the Shares to the Purchaser prior to the Company’s receipt of the
subscription amount from such Purchaser (the “DPP Shares”).
 
Section 1.2  Closing.  The Purchasers shall purchase the Shares at a closing
that shall occur on December 16, 2011 (the “Closing Date”).  On or prior to the
Closing Date, the Company shall deliver or cause to be delivered to each
Purchaser a copy of the irrevocable instructions to the Company’s transfer agent
(the “Transfer Agent”) instructing the Transfer Agent to deliver on an expedited
basis via The Depository Trust Company Deposit or Withdrawal at Custodian system
(“DWAC”) Shares equal to the number of Shares being purchased by such Purchaser
as reflected on Annex 1 attached hereto, registered in the name of such
Purchaser or in the case of the DPP Shares to MDB Capital Group’s clearing
firm.  On or prior to the Closing Date, each Purchaser shall deliver to the
Company, via wire transfer, immediately available funds equal to such
Purchaser’s subscription amount as set forth on the signature page hereto
executed by such Purchaser (the “Subscription Amount”).
 
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF ZBB
 
ZBB hereby represents and warrants to Purchaser as follows:
 
Section 2.1  Organization, Good Standing and Qualification. ZBB is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Wisconsin and has all requisite corporate power and authority to carry
on its business as now conducted and to own or lease its properties. Each of
ZBB’s Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted and to own or lease its properties, in each case
as described in the SEC Filings (as defined below).  Each of ZBB and its
Subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification or leasing necessary
unless the failure to so qualify has not had and could not reasonably be
expected to have a material adverse effect on (i) the assets, liabilities,
results of operations, condition (financial or otherwise), business or prospects
of ZBB and its Subsidiaries taken as a whole, or (ii) the ability of ZBB to
perform its obligations under this Agreement (a “Material Adverse Effect”). For
purposes of this Agreement, a “Subsidiary” of ZBB means another Person, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its board of
directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly by
ZBB. “Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.
 
 
 
 

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Section 2.2  Valid Issuance of Shares. The Shares are duly authorized, validly
issued, fully paid and non-assessable and is free and clear of all liens,
encumbrances and restrictions other than restrictions on transfer imposed by
applicable securities laws. The issuance and sale of the Shares will be
registered pursuant the Registration Statement on Form S-3 (No. 333-171957)
originally filed by ZBB with the Securities and Exchange Commission (the
“Commission”) on January 31, 2011 (the “Registration Statement”).
 
Section 2.3  Authority.  ZBB has all requisite corporate power and authority to
enter into this Purchase Agreement and to consummate the transactions
contemplated hereby and has taken all requisite action on its part, and on the
part of its officers, directors and shareholders necessary for (i) the
authorization, execution and delivery of this Purchase Agreement, (ii) the
authorization of the performance of all obligations of ZBB hereunder, and (iv)
the authorization, issuance and delivery of the Shares.  This Purchase Agreement
has been duly executed and delivered by ZBB, and constitutes the valid and
binding obligation of ZBB, enforceable in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the enforcement
of creditors’ rights generally and by general principles of equity. 
 
Section 2.4  Capitalization; Subsidiaries.
 
(a)  ZBB has duly and validly authorized capital stock as set forth in the SEC
Filings and in the Articles of Incorporation of ZBB, as amended and as in effect
as of the Closing Date (the “Articles of Incorporation”). All of the issued and
outstanding shares of ZBB’s capital stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of pre-emptive rights and were
issued in full compliance with applicable state and federal securities law and
any rights of third parties. Except as described in the SEC Filings, all of the
issued and outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid, nonassessable and free of
pre-emptive rights, were issued in full compliance with applicable state and
federal securities law and any rights of third parties and are owned by ZBB,
beneficially and of record, subject to no lien, encumbrance or other adverse
claim. Except as described in the SEC Filings, no Person is entitled to
pre-emptive or similar statutory or contractual rights with respect to any
securities of ZBB. Except as described in the SEC Filings, there are no
outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which ZBB or any of its
Subsidiaries is or may be obligated to issue any equity securities of any kind.
Except as described in the SEC Filings, there are no voting agreements, buy-sell
agreements, option or right of first purchase agreements or other agreements of
any kind among ZBB and any of the securityholders of ZBB relating to the
securities of ZBB held by them. Except as described in the SEC Filings, the
issuance and sale of the Shares pursuant to the Purchase Agreements will not
obligate ZBB to issue shares of Common Stock or other securities to any other
Person (other than the Purchasers) and will not result in the adjustment of the
exercise, conversion, exchange or reset price of any outstanding security.
Except as described in the SEC Filings, ZBB does not have outstanding any
shareholder purchase rights or “poison pill” or any similar arrangement in
effect giving any Person the right to purchase any equity interest in ZBB upon
the occurrence of certain events.
 
 
 
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(b)  ZBB has no significant subsidiary (as such term is defined in Rule 1-02(w)
of Regulation S-X promulgated by the Securities and Exchange Commission (the
“SEC”)) other than the Subsidiaries disclosed in the SEC Filings. All of the
issued and outstanding shares of capital stock or other equity interests of each
Subsidiary have been duly and validly authorized and issued, are fully paid and
non-assessable and, except as otherwise described in the SEC Filings, are owned
directly by ZBB or through its wholly owned Subsidiaries, free and clear of all
liens, encumbrances, equities or claims. There is no outstanding option, right
or agreement of any kind relating to the issuance, sale or transfer of any
capital stock or other equity securities of the Subsidiaries to any person or
entity except ZBB, and none of the outstanding shares of capital stock or other
equity interests of any Subsidiary was issued in violation of any preemptive or
other rights to subscribe for or to purchase or acquire any securities of any of
the Subsidiaries. Except for the Subsidiaries, ZBB owns no beneficial interest,
directly or indirectly, in any corporation, partnership, joint venture or other
business entity.
 
Section 2.5  Consents.  Except as described in the SEC Filings, the execution,
delivery and performance by ZBB of this Purchase Agreement, and the offer,
issuance and sale of the Shares require no consent of, action by or in respect
of, or filing with, any Person, governmental body, agency, or official or of or
with any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the NYSE Amex (“Amex”)), or approval
of the stockholders of ZBB (including, but not limited to, such as may be
required pursuant to the NYSE Amex Company Guide), is required in connection
with the issuance and sale of the Shares or the consummation by ZBB of the
transactions contemplated by this Purchase Agreement, other than (i) filings as
may be required under the Securities Act and state securities law and (ii) under
the rules and regulations of the Financial Industry Regulatory Authority
(“FINRA”), which ZBB undertakes to file within the applicable time periods and
(iii) receipt of clearance from NYSE Amex for issuance of the Shares which is a
closing condition under this Purchase Agreement. Subject to the accuracy of the
representations and warranties of each Purchaser set forth in this Purchase
Agreement, ZBB has taken all action necessary to exempt the issuance and sale of
the Shares from the provisions of any shareholder rights plan or other “poison
pill” arrangement, any anti-takeover, business combination or control share law
or statute binding on ZBB or to which ZBB or any of its assets and properties
may be subject and any provision of the Articles of Incorporation or ZBB’s
Bylaws, as amended and as in effect as of the Closing Date (the “Bylaws”), that
is or could reasonably be expected to become applicable to the Purchasers as a
result of the transactions contemplated hereby, including, without limitation,
the issuance of the Shares and the ownership, disposition or voting of the
Shares by the Purchasers or the exercise of any right granted to the Purchasers
pursuant to this Purchase Agreement.
 
 
 
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Section 2.6  SEC Filings; Business.
 
(a)  ZBB has made available to the Purchasers through the EDGAR system of the
SEC (“EDGAR”), true and complete copies of ZBB’s most recent Annual Report on
Form 10-K for the fiscal year ended June 30, 2011 (as amended prior to the date
hereof, the “10-K”), and all other reports filed by ZBB pursuant to Sections
13(a), 13(e), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder
(the “1934 Act”) since the filing of the 10-K and during the twelve (12) months
preceding the date hereof (the foregoing materials, including the exhibits
thereto and the documents incorporated by reference therein, collectively, the
“SEC Filings”). The SEC Filings are the only filings required of ZBB pursuant to
the 1934 Act for such period and each SEC Filing was filed in a timely manner.
ZBB and its Subsidiaries are engaged in all material respects only in the
business described in the SEC Filings and the SEC Filings contain a complete and
accurate description in all material respects of the business of ZBB and its
Subsidiaries, taken as a whole.
 
(b)  Any statistical, industry-related and market-related data included or
incorporated by reference in the SEC Filings are based on or derived from
sources that ZBB reasonably and in good faith believes to be reliable and
accurate, and such data agree with the sources from which they are derived.
 
Section 2.7  No Material Adverse Change. Since June 30, 2011, except as
described in the SEC Filings, there has not been:
 
(a)  any change in the consolidated assets, liabilities, financial condition or
operating results of ZBB from that reflected in the financial statements
included in ZBB’s Quarterly Report on Form 10-Q for the quarter ended September
30, 2011, except for changes in the ordinary course of business which have not
had and could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate;
 
(b)  any declaration or payment of any dividend, or any authorization or payment
of any distribution, on any of the capital stock of ZBB, or any redemption or
repurchase of any securities of ZBB;
 
(c)  any material damage, destruction or loss, whether or not covered by
insurance to any assets or properties of ZBB or its Subsidiaries;
 
 
 
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(d)  any waiver, not in the ordinary course of business, by ZBB or any
Subsidiary of a material right or of a material debt owed to it;
 
(e)  any satisfaction or discharge of any lien, claim or encumbrance or payment
of any obligation by ZBB or a Subsidiary, except in the ordinary course of
business and which is not material to the assets, properties, financial
condition, operating results or business of ZBB and its Subsidiaries taken as a
whole (as such business is presently conducted and as it is proposed to be
conducted);
 
(f)  any change or amendment to the Articles of Incorporation (other than in
connection with the transactions contemplated hereby) or Bylaws, or material
change to any Material Contract or arrangement by which ZBB or any Subsidiary is
bound or to which any of their respective assets or properties is subject;
 
(g) any material labor difficulties or labor union organizing activities with
respect to employees of ZBB or any Subsidiary;
 
(h) any material transaction entered into by ZBB or a Subsidiary other than in
the ordinary course of business;
 
(i)  the loss of the services of any key employee, or material change in the
composition or duties of the senior management of ZBB or any Subsidiary;
 
(j)  the loss or, to ZBB’s Knowledge, threatened loss of any customer which has
had or could reasonably be expected to have a Material Adverse Effect; or
 
(k)  any other event or condition of any character that has had or could
reasonably be expected to have a Material Adverse Effect.
 
For purposes of this Agreement, “ZBB’s Knowledge” means the actual knowledge of
the executive officers (as defined in Rule 405 under the 1933 Act) of ZBB, after
due inquiry; “ Material Contract” means any contract, instrument or other
agreement to which ZBB or any Subsidiary is a party or by which it is bound
which has been filed as an exhibit to the SEC Filings pursuant to Item 601(b)(4)
or Item 601(b)(10) of Regulation S-K.

Section 2.8  SEC Filings.
 
(a)  At the time of filing thereof, the SEC Filings complied as to form in all
material respects with the requirements of the 1934 Act and did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
 
(b)  Each registration statement and any amendment thereto filed by ZBB since
January 1, 2010 pursuant to the 1933 Act and the rules and regulations
thereunder, as of the date such statement or amendment became effective,
complied as to form in all material respects with the 1933 Act and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein not misleading; and each prospectus filed pursuant to Rule 424(b)
under the 1933 Act, as of its issue date and as of the closing of any sale of
securities pursuant thereto did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The SEC has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by ZBB or any Subsidiary under the 1933 Act or the 1934 Act.
 
 
 
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Section 2.9  No Conflict, Breach, Violation or Default. Except as described in
the SEC Filings, the execution, delivery and performance of this Purchase
Agreement by ZBB and the issuance and sale of the Shares will not (i) conflict
with or result in a breach or violation of (a) any of the terms and provisions
of, or constitute a default under the Articles of Incorporation or the Bylaws
(true and complete copies of which have been made available to the Purchasers
through EDGAR), or (b) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over ZBB, any Subsidiary or any of their respective assets or
properties, or (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in
the creation of any lien, encumbrance or other adverse claim upon any of the
properties or assets of ZBB or any Subsidiary or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any Material Contract, except in the case of clauses
(i)(b) and (ii) above, such as could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate.
 
Section 2.10  Tax Matters. ZBB and each Subsidiary have prepared and filed (or
filed applicable extensions therefore) all tax returns required to have been
filed by ZBB or such Subsidiary with all appropriate governmental agencies and
paid all taxes shown thereon or otherwise owed by it, other than any such taxes
which ZBB or any Subsidiary are contesting in good faith and for which adequate
reserves have been provided and reflected in ZBB’s financial statements included
in the SEC Filings.  The charges, accruals and reserves on the books of ZBB in
respect of taxes for all fiscal periods are adequate in all material respects,
and there are no material unpaid assessments against ZBB or any Subsidiary nor,
to ZBB’s Knowledge, any basis for the assessment of any additional taxes,
penalties or interest for any fiscal period or audits by any federal, state or
local taxing authority except for any assessment which is not material to ZBB
and its Subsidiaries, taken as a whole. All taxes and other assessments and
levies that ZBB or any Subsidiary is required to withhold or to collect for
payment have been duly withheld and collected and paid to the proper
governmental entity or third party when due, other than any such taxes which ZBB
or any Subsidiary are contesting in good faith and for which adequate reserves
have been provided and reflected in ZBB’s financial statements included in the
SEC Filings. There are no tax liens or claims pending or, to ZBB’s Knowledge,
threatened in writing against ZBB or any Subsidiary or any of their respective
assets or property. Except as described in the SEC Filings, there are no
outstanding tax sharing agreements or other such arrangements between ZBB and
any Subsidiary or other corporation or entity.
 
 
 
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Section 2.11  Title to Properties. Except as disclosed in the SEC Filings, ZBB
and each Subsidiary have good and marketable title to all real properties and
all other properties and assets (excluding Intellectual Property assets which
are the subject of Section 2(o) hereof) owned by it, in each case free from
liens, encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or currently planned to be made
thereof by them; and except as disclosed in the SEC Filings, ZBB and each
Subsidiary hold any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use made or
currently planned to be made thereof by them.
 
Section 2.12  Certificates, Authorities and Permits. ZBB and each Subsidiary
possess adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now operated
by it, except to the extent failure to possess such certificates, authorities or
permits could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate, and neither ZBB nor any Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined adversely to ZBB
or such Subsidiary, could reasonably be expected to have a Material Adverse
Effect, individually or in the aggregate.
 
Section 2.13  Labor Matters.
 
(a)  Except as set forth in the SEC Filings, ZBB is not a party to or bound by
any collective bargaining agreements or other agreements with labor
organizations. ZBB has not violated in any material respect any laws,
regulations, orders or contract terms, affecting the collective bargaining
rights of employees, labor organizations or any laws, regulations or orders
affecting employment discrimination, equal opportunity employment, or employees’
health, safety, welfare, wages and hours.
 
(b)  There are (1) no labor disputes existing, or to ZBB’s Knowledge,
threatened, involving strikes, slow-downs, work stoppages, job actions,
disputes, lockouts or any other disruptions of or by ZBB’s employees, (2) no
unfair labor practices or petitions for election pending or, to ZBB’s Knowledge,
threatened before the National Labor Relations Board or any other federal, state
or local labor commission relating to ZBB’s employees, (3) no demands received
by ZBB for recognition or certification heretofore made by any labor
organization or group of employees is pending with respect to ZBB. To ZBB’s
Knowledge, ZBB enjoys good labor and employee relations with its employees and
labor organizations.
 
(c)  ZBB is, and at all times has been, in compliance with all applicable laws
respecting employment (including laws relating to classification of employees
and independent contractors) and employment practices, terms and conditions of
employment, wages and hours, and immigration and naturalization, except where
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect, individually or in the aggregate. There are no claims pending
against ZBB before the Equal Employment Opportunity Commission or any other
administrative body or in any court asserting any violation of Title VII of the
Civil Rights Act of 1964, the Age Discrimination Act of 1967, 42 U.S.C. §§ 1981
or 1983 or any other federal, state or local Law, statute or ordinance barring
discrimination in employment.
 
 
 
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(d)  Except as disclosed in the SEC Filings and except as would not be required
to be disclosed in the SEC Filings, ZBB is not a party to, or bound by, any
employment or other contract or agreement that contains any severance,
termination pay or change of control liability or obligation, including, without
limitation, any “excess parachute payment,” as defined in Section 280G(b) of the
Internal Revenue Code of 1986, as amended.
 
(e)  ZBB has no liability for the improper classification by ZBB of its
employees as independent contractors or leased employees prior to the Closing.
 
Section 2.14  Intellectual Property. ZBB and its Subsidiaries own, or have
obtained valid and enforceable licenses for, or other rights to use, the
Intellectual Property necessary for the conduct of the business of ZBB and its
Subsidiaries as currently conducted and as described in the SEC Filings as being
owned or licensed by them, except where the failure to own, license or have such
rights could not reasonably be expected to result in a Material Adverse Effect,
individually or in the aggregate. For purposes of this Agreement, “Intellectual
Property” means all of the following: (i) patents, patent applications, patent
disclosures and inventions (whether or not patentable and whether or not reduced
to practice); (ii) trademarks, service marks, trade dress, trade names,
corporate names, logos, slogans and Internet domain names, together with all
goodwill associated with each of the foregoing; (iii) copyrights and
copyrightable works; (iv) registrations, applications and renewals for any of
the foregoing; and (v) proprietary computer software (including but not limited
to data, data bases and documentation). Except as described in the SEC Filings,
(i) there are no third parties who have or will be able to establish rights to
any Intellectual Property, except for the ownership rights of the owners of the
Intellectual Property which is licensed to ZBB as described in the SEC Filings
or where such rights could not reasonably be expected to result in a Material
Adverse Effect, individually or in the aggregate, (ii) there is no pending or,
to ZBB’s Knowledge, threat of any, action, suit, proceeding or claim by others
challenging ZBB’s or any Subsidiary’s rights in or to any Intellectual Property
owned by or licensed to ZBB or any Subsidiary or claiming that the use of any
Intellectual Property by ZBB or any Subsidiary in their respective businesses as
currently conducted infringes, violates or otherwise conflicts with the
intellectual property rights of any third party, and (iii) the use by ZBB or any
Subsidiary of any Intellectual Property by ZBB or any Subsidiary in their
respective businesses as currently conducted does not infringe, violate or
otherwise conflict with the intellectual property rights of any third party.
 
Section 2.15  Environmental Matters. Neither ZBB nor any Subsidiary is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim has had or could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate; and there is no pending or, to ZBB’s Knowledge, threatened
investigation that might lead to such a claim.
 
 
 
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Section 2.16  Litigation. Except as described in the SEC Filings, (i) there are
no pending actions, suits or proceedings against or affecting ZBB, its
Subsidiaries or any of its or their properties before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, Amex), and
(ii) to ZBB’s Knowledge, no such actions, suits or proceedings are threatened,
except for any such proceeding, which if resolved adversely to ZBB or any
Subsidiary, could not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate. Neither ZBB nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty. There has not been, and to ZBB’s Knowledge,
there is not pending or contemplated, any investigation by the SEC involving ZBB
or any current or former director or officer of ZBB.
 
Section 2.17  Financial Statements. The financial statements included in each
SEC Filing comply in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto as in
effect at the time of filing (or to the extent corrected by a subsequent
restatement) and present fairly, in all material respects, the consolidated
financial position of ZBB as of the dates shown and its consolidated results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis (“GAAP”) (except as may be
disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-Q under the 1934 Act). There are
no other financial statements (historical or pro forma) that are required to be
included in the SEC Filings; and ZBB and the Subsidiaries do not have any
material liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not disclosed in the SEC Filings. The SEC
Filings do not include any “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the SEC). Except as set forth in the SEC
Filings, neither ZBB nor any of its Subsidiaries has incurred any liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent (as to amount and nature) with past practices since the
date of such financial statements, none of which, individually or in the
aggregate, have had or could reasonably be expected to have a Material Adverse
Effect.
 
Section 2.18  Insurance Coverage. ZBB and each Subsidiary maintains in full
force and effect insurance coverage that is customary for comparably situated
companies for the business being conducted and properties owned or leased by ZBB
and each Subsidiary. Neither ZBB nor any of the Subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect.
 
 
 
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Section 2.19  Compliance with Amex Continued Listing Requirements. Except as
described in the SEC Filings, (a) ZBB is in compliance with applicable Amex
continued listing requirements, and (b) ZBB has taken no action designed to
terminate, or likely to have the effect of terminating, the listing of the
Common Stock.
 
Section 2.20  Questionable Payments. Neither ZBB nor any of its Subsidiaries
nor, to ZBB’s Knowledge, any of their respective current or former shareholders,
directors, officers, employees, agents or other Persons acting on behalf of ZBB
or any Subsidiary, has on behalf of ZBB or any Subsidiary or in connection with
their respective businesses: (a) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (b) made any direct or indirect unlawful payments to any
governmental officials or employees from corporate funds; (c) established or
maintained any unlawful or unrecorded fund of corporate monies or other assets;
(d) made any false or fictitious entries on the books and records of ZBB or any
Subsidiary; or (e) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment of any nature.
 
Section 2.21  Transactions with Affiliates. Except as disclosed in the SEC
Filings and except as would not be required to be disclosed in the SEC Filings,
none of the officers or directors of ZBB and, to ZBB’s Knowledge, none of the
employees of ZBB is presently a party to any transaction with ZBB or any
Subsidiary (other than as holders of stock options and/or warrants, and for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to
ZBB’s Knowledge, any entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner.
 
Section 2.22  Internal Controls. ZBB is in material compliance with the
provisions of the Sarbanes-Oxley Act of 2002 currently applicable to ZBB. ZBB
and its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. ZBB has established disclosure
controls and procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e))
for ZBB and designed such disclosure controls and procedures to ensure that
material information relating to ZBB, including the Subsidiaries, is made known
to the certifying officers by others within those entities, particularly during
the period in which ZBB’s most recently filed periodic report under the 1934
Act, as the case may be, is being prepared. ZBB’s certifying officers have
evaluated the effectiveness of ZBB’s controls and procedures as of the end of
the period covered by the most recently filed periodic report under the 1934 Act
(such date, the “Evaluation Date”). ZBB presented in its most recently filed
periodic report under the 1934 Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in ZBB’s internal controls (as such term is defined
in Item 308 of Regulation S-K) or, to ZBB’s Knowledge, in other factors that
could significantly affect ZBB’s internal controls. ZBB maintains and will
continue to maintain a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of the 1934
Act.
 
 
 
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Section 2.23  Investment Company. ZBB is not required to be registered as, and
is not an Affiliate of (as defined under the 1934 Act), and immediately
following the Closing will not be required to register as, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
 
Section 2.24  No Price Stabilization. Neither ZBB nor any of its Subsidiaries
nor, to ZBB’s knowledge, any of their respective officers, directors, affiliates
or controlling persons has taken or will take, directly or indirectly, any
action designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute the stabilization or manipulation of the
price of any security of ZBB to facilitate the sale or resale of the Shares.
 
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
                Each Purchaser severally hereby represents and warrants to ZBB
as follows:
 
Section 3.1  Authority.  Purchaser has all requisite power and authority to
enter into this Purchase Agreement and to consummate the transactions
contemplated hereby.  This Purchase Agreement has been duly executed and
delivered by Purchaser, and constitutes the valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting the enforcement of creditors’
rights generally and by general principles of equity.
 
Section 3.2  Investment Experience.  Purchaser is an “accredited investor” as
defined in Rule 501(a) under the Securities Act of 1933, as amended (the
“Securities Act”).  Purchaser is aware of ZBB’s business affairs and financial
condition and has had access to and has acquired sufficient information about
ZBB to reach an informed and knowledgeable decision to acquire the Shares. 
Purchaser has such business and financial experience as is required to give him
the ability to protect his own interests in connection with the purchase of the
Shares.
 
Section 3.3  Ability to Bear Risk.  Purchaser is able to bear the economic risk
of his investment in the Shares and acknowledges that he could bear a complete
or significant loss on his investment in the Shares.
 
Section 3.4  Access to Information.  Purchaser has had an opportunity to ask
questions and receive answers concerning the terms and conditions of the
offering of Shares and has had full access to such other information concerning
ZBB as Purchaser has requested.
 
 
 
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ARTICLE 4 - CONDITIONS TO CLOSING
 
Section 4.1  Conditions to Purchasers’ Obligations to Close.  Each Purchaser’s
obligation to purchase the Shares at the Closing is subject to the fulfillment
on or before the Closing Date of each of the following conditions, unless waived
in writing by the applicable Purchaser purchasing the Shares at the Closing:
 
(a)  Representations and Warranties.  The representations and warranties made by
ZBB in Article 2 shall be true and correct in all material respects as of the
Closing Date.
 
(b)  Covenants.  All covenants, agreements and conditions contained in this
Agreement to be performed by ZBB on or prior to the Closing Date shall have been
performed or complied with in all material respects.
 
(c)  Clearance from NYSE Amex.  ZBB shall have received clearance from NYSE AMEX
for the issuance of the Shares.
 
(d)  Blue Sky.  ZBB shall have obtained all necessary Blue Sky law permits and
qualifications, or have the availability of exemptions therefrom, required by
any state for the offer and sale of the Shares.
 
(e)  Proceedings and Documents.  All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Purchasers and their counsel and the Purchasers and their counsel shall have
received all such counterpart original and certified or other copies of such
documents as are reasonably requested.
 
Section 4.2  Conditions to ZBB’s Obligations to Close.  ZBB’s obligation to
issue and sell the Shares at the Closing is subject to the fulfillment on or
before the Closing Date of each of the following conditions, unless waived in
writing by ZBB at the Closing:
 
(a)  Payment.  The payment by each Purchaser of its respective Subscription
Amount (other than the Subscription Amount for DPP Shares, which funds shall be
delivered after the Company’s delivery of Shares, on the same day of the
delivery of Shares).
 
(b)  Representations and Warranties.  The representations and warranties made by
the Purchasers in Article 3 shall be true and correct in all material respects
as of the Closing Date.
 
 
 
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(c)  Covenants.  All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.
 
(d)  Clearance from NYSE Amex.  ZBB shall have received clearance from NYSE AMEX
for the issuance of the Shares.
 
(e)  Proceedings and Documents.  All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to ZBB
and its counsel and ZBB and its counsel shall have received all such counterpart
original and certified or other copies of such documents as are reasonably
requested.
 
ARTICLE 5 - MISCELLANEOUS
 
Section 5.1  Governing Law.  This Purchase Agreement shall be governed in all
respects by the laws of the State of New York (without reference to its
conflicts of laws principles).
 
Section 5.2  Successors and Assigns.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
 
Section 5.3  Entire Agreement.  This Purchase Agreement constitutes the full and
entire understanding and agreement among the parties with regard to the subjects
hereof and thereof.
 
Section 5.4  Remedies.  Each of the parties to this Purchase Agreement will be
entitled to enforce its rights under this Purchase Agreement specifically, to
recover damages and costs (including reasonable attorneys’ fees) caused by any
breach of any provision of this Purchase Agreement and to exercise all other
rights existing in its favor.
 
Section 5.5  Counterparts.  This Purchase Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
 
 
 
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IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of the
day and year set forth in the first paragraph hereof.
 
 

 

 
ZBB ENERGY CORPORATION
     
By:  ­­­­­­­­­­­­­­­­­­    ____________________________
Name: Eric Apfelbach
 
Title:   President and CEO
 
       
Address:
 
N93 W14475 Whittaker Way
Menomonee Falls, WI 53051
 
Attn: Will Hogoboom

 
 

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Signature Page to Stock Purchase Agreement
 

 
 
____________________________
Purchaser
 
____________________________
Signature of Purchaser
 
____________________________
Title, if Purchaser is an entity
 
 
Subscription
Amount:$ ____________________________                                    
 
Address:
____________________________
____________________________
____________________________
____________________________
 
Check here if shares shall be settled by Delivery Prior to Payment: o
 
DWAC Instructions:
____________________________
____________________________
____________________________
____________________________
 

 
 

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