Document:

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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      STOCK
PURCHASE AGREEMENT

       

      This
Stock Purchase Agreement (the “Agreement”) is entered into as
of May 20, 2010, with an effective date as of May 12, 2010, by and among Garb
Oil & Power Corporation, a Utah corporation (the “Company”) and Preston F. Olsen
(the “Purchaser”).  In
consideration of the mutual promises contained herein the Company and the
Purchaser hereby agree as follows:

       

      1. Stock Purchase. The
Purchaser hereby purchases from the Company and the Company hereby sells to the
Purchaser 2,000 shares (the “Shares”) of the Company’s
class B preferred stock, $0.001 par value (“Class B Preferred”) for the purchase
amount of $5,000 (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.

       

      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:
Preston F.
Olsen                                                                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 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.

              

      

       

      
        	
                3.  

              	
                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.

              

      

       

      
        	
                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 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.

              

      

       

      
        	
                5.  

              	
                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.

              

      

       

      
        	
                6.  

              	
                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.

              

      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                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 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 six months 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 one year 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.

              

      

       

      
        	
                8.  

              	
                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.

              

      

       

      
        	
                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 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

       

       

      
        	
                1.  

              	
                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:

              

      

       

      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.

       

      
        	
                2.  

              	
                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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