ex48q033110.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    DEBT
CONVERSION AND STOCK PURCHASE AGREEMENT

     

    This Debt
Conversion and Stock Purchase Agreement (the “Agreement”) is entered into as
of May 6, 2010, by and among Garb Oil & Power Corporation, a Utah
corporation (the “Company”) and Greg Shepard
(the “Purchaser”).  In
consideration of the mutual promises contained herein the Company and the
Purchaser hereby agree as follows:

     

    Background:

    


    1.              On
January 3, 2006, the Company issued a Conventional Loan Document (Promissory
Note) in the original principal amount of $33,000.00 (“2006 Note”).

    


    2.              On
October 7, 2009, the Company issued a Conventional Loan Document (Promissory
Note) in the original principal amount of $6,000.00 (“2007 Note”, and together with
the 2006 Note, the “Notes”).

    


    3.              As
of the date of this Agreement, the amount due and owing under the Notes is
$103,507.00, which amount includes principal, accrued but unpaid interest in the
amount of 12% and loan fees.

    


    4.              The
Company and the Purchaser have agreed to have the Purchaser convert the Notes
into shares of Company common stock, par value $.0001 per share ("Common Shares"), of the
Company as set forth herein;

    


             NOW
THEREFORE, in consideration of the premises and the mutual covenants and
agreements of the parties hereinafter set forth, the parties hereto hereby agree
as follows:

     

    1. Debt Conversion / Stock
Purchase. Purchaser hereby agrees, subject to the conditions set forth
herein, to convert the principal and accrued interest on the Notes in the amount
of $103,507.00 into shares of the Company's Common Shares ("Conversion Shares") at a
conversion price equal to 50% of the average bid price of the Common Shares for
the five days preceding the date of this Agreement in full satisfaction and
accord of the obligations under the Note ("Debt Conversion"), subject to
appropriate adjustment for reclassifications, stock splits, stock dividends,
spin-offs or distributions, share combinations or other similar changes
affecting the Preferred Stock as a whole. The Debt Conversion and full
satisfaction of the Company’s obligations under the Notes constitute full and
adequate consideration for the Conversion Shares, and the Conversion Shares,
when issued in accordance with the terms herein, will be fully-paid and
nonassessable outstanding Common Shares.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2. General.  The
Purchaser hereby makes the representations on Exhibit
A with respect to the purchase of the Conversion Shares
hereunder.  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:                                                                

    Greg
Shepard

    Name: John
Rossi                                                                


    Title: Chief Executive
Officer                                                                


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Exhibit
A

     

    INVESTMENT
REPRESENTATION STATEMENT

     

     

    1. 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”).

     

    2. Purchasing for Own
Investment.  The Purchaser is purchasing the Conversion Shares
solely for investment purposes, and not for further distribution.  The
Purchaser’s entire legal and beneficial ownership interest in the Conversion
Shares is being purchased and shall be held solely for the Purchaser’s account,
except to the extent the Purchaser intends to hold the Conversion 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 Conversion
Shares.  The Purchaser’s investment intent is not limited to its
present intention to hold the Conversion 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.

     

    3. Ability to Protect Own
Interests.  The Purchaser can properly evaluate the merits and
risks of an investment in the Conversion 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.

     

    4. 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 Conversion 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 Conversion Shares.

     

    5. Economic
Risk.  The Purchaser realizes that the purchase of the
Conversion Shares involves a high degree of risk, and that the Company’s future
prospects are uncertain.  The Purchaser is able to hold the Conversion
Shares indefinitely if required, and is able to bear the loss of its entire
investment in the Conversion Shares.

     

    6. Restricted
Securities.  The Purchaser understands that the Conversion
Shares will be “restricted securities” unless (a) the Conversion Shares are
registered under the Securities Act or (b) Purchaser receives an opinion of
counsel that the Conversion Shares qualify for exemption for non-public
offerings under Rule 144.  If the Conversion Shares are classified as
restricted securities, the Purchaser also understands and agrees that: (i) the
Purchaser must hold the Conversion 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
Conversion Shares; and (iii) the
certificate evidencing the Conversion Shares will be imprinted with a legend
which prohibits the transfer of the Conversion Shares unless such transfer is
registered or such registration is not required in the opinion of counsel for
the Company.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    7. 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 Conversion Shares acquired from an
issuer in a non-public offering.  The Purchaser understands that its
ability to sell the Conversion Shares under Rule 144 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
Conversion Shares; and (iii) if the
Purchaser is an affiliate of the Company, or a non-affiliate who has held the
Conversion 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 Conversion 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.

     

    8. Availability of Rule
144.  The Purchaser further understands that at the time the
Purchaser wishes to sell the Conversion 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 Conversion Shares under
Rule 144 even if the one-year minimum holding period had been
satisfied.

     

    9. Restrictions on
Resale.  The Purchaser understands that in the event Rule 144
is not available it, any future proposed sale of any of the Conversion 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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