STOCK PURCHASE AGREEMENT by ZBB ENERGY CORP

 

STOCK PURCHASE AGREEMENT

 

             THIS STOCK PURCHASE AGREEMENT (the "Purchase Agreement") is made and entered into as of January 31, 2012, 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 STOCK

 

Section 1.1  Sale of Stock.  Subject to the terms and conditions of this Purchase Agreement, on the date hereof 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 $1,000,000 of shares of ZBB's Common Stock (the "Stock") at a purchase price of $0.80 per share, which represent the closing price of the Stock on the trading day preceding the date hereof, as reflected on Annex 1 attached hereto.

 

Section 1.2  Closing.  The Purchasers shall purchase the Stock at a closing that shall occur on (the "Closing Date") the later of (a) February 3, 2012 and (b) the day following receipt of clearance from NYSE Amex for issuance of the Stock.  At the closing, each Purchaser will pay the purchase price for the Stock to ZBB as reflected on Annex 1 attached hereto and ZBB will deliver to each Purchaser a certificate representing the Stock being purchased by such Purchaser hereunder. On or prior to the Closing Date, each Purchaser shall deliver to the Company, via wire transfer (in accordance with the wiring instructions set forth on Annex 2) or check, immediately available funds equal to such Purchaser's subscription amount as set forth on the signature page hereto executed by such Purchaser.

 

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.

 

 

Section 2.2  Valid Issuance of Common Stock. The Stock is 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.

 

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, 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 Stock.  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.

 

 

(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 Stock 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 Stock 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 Stock 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 Stock 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 Stock and the ownership, disposition or voting of the Stock by the Purchasers or the exercise of any right granted to the Purchasers pursuant to this Purchase Agreement.

 

 

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