Document:

Make-Whole Award Deferred Stock Award Agreement - Comverse and Sharon Dayan

 Exhibit 10.187 

COMVERSE TECHNOLOGY, INC. 

2005 STOCK INCENTIVE COMPENSATION PLAN 

DEFERRED STOCK AWARD AGREEMENT 

REFERENCE NUMBER: 10-031 (MAKE WHOLE GRANT) 

SECTION 1. GRANT OF DEFERRED STOCK UNITS. 

(a) Award. On the terms and conditions set forth in this Agreement and the Notice of Grant of Deferred Stock Award for Israeli Employees (the
“Notice”), the Company granted to Sharon Dayan (the “Grantee”) a total of 30,000 Deferred Stock Units (the “Granted Units”) on June 13, 2010. 

(b) Shareholder Rights. The Grantee (or any successor in interest) shall not have any of the rights of a shareholder (including, without
limitation, voting, dividend and liquidation rights) with respect to the Granted Units until such time as the Company delivers to the Grantee the shares of Common Stock in settlement of the Granted Units, as described in Section 4. 

(c) Plan and Defined Terms. This award is granted under and subject to the terms of the 2005 Stock Incentive Compensation Plan and the Stock
Incentive Compensation Plan (2005) Addendum dated July 5, 2005 (together the “Plan”), which is incorporated herein by reference. Capitalized terms used herein and not defined in the Agreement shall have the meaning set forth in
the Plan. 
 (d) Grantee Undertaking. The Grantee agrees to execute such further instruments and to take such action as may reasonably be
necessary to carry out the intent of this Agreement. 
 SECTION 2. NO TRANSFER OR ASSIGNMENT OF AWARD. 

This Award and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law
or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process; provided, however, that the Grantee shall be permitted to transfer this award, in connection with his or her estate plan, to the Grantee’s
spouse, siblings, parents, children and grandchildren or a charitable organization that is exempt under Section 501(c)(3) of the Code or to trusts for the benefit of such persons or partnerships, corporations, limited liability companies or
other entities owned solely by such persons, including trusts for such persons or to the Grantee’s former spouse in accordance with a domestic relations order. 

SECTION 3. VESTING; TERMINATION OF SERVICE. 

(a) Vesting. This award shall vest with respect to one third (10,000 shares) of the Granted Units on June 13, 2011, one third (10,000
shares) of the Granted Units on June 13, 2012, and one third (10,000 shares) of the Granted Units on June 13, 2013, or, in each case, such earlier date as may be determined pursuant to the Comverse Technology, Inc. Executive
Severance Protection Plan, as amended from time to time (the “Executive Severance Protection Plan”) (each, a “Vesting Date”). 

(b) Termination of Continuous Service. Subject to section 3(c) below, and the terms of the Executive Severance Protection Plan, the unvested
portion of the award shall be forfeited as of 

 
the date (the “Termination Date”) that the Grantee actually ceases to provide services to the Company or an Affiliate in any capacity of Employee, Director or Consultant (irrespective
of whether the Grantee continues to receive severance or any other continuation payments or benefits after such date) for any reason (such cessation of the provision of services by Grantee being referred to as “Service Termination”). A
Service Termination shall not occur and Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Subsidiary or Affiliate, or any successor, in any
capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Subsidiary or Affiliate in any capacity of Employee, Director or Consultant. 

(c) Certain Terminations. Upon any termination of your employment by the Company without cause, the unvested portion of you Make Whole Award shall
vest immediately. 
 SECTION 4. SETTLEMENT OF GRANTED UNITS. 

Subject to Section 5 hereof, the Company shall deliver to the Grantee on each Vesting Date a number of shares of Common Stock equal to the aggregate
number of Granted Units that vest as of such date; provided, however, that no shares of Common Stock will be issued in settlement of this award unless the issuance of shares complies with all relevant provisions of law and the requirements of any
stock exchange upon which the shares of Common Stock may then be listed. No fractional shares of Common Stock will be issued. The Company will pay cash in respect of fractional shares of Common Stock. 

SECTION 5. WITHHOLDING REQUIREMENTS. 

In accordance with Section 14.2 of the Plan, the Grantee shall make arrangements satisfactory to the Company to enable it to satisfy all such
withholding requirements in respect of any delivery to the Grantee of shares of Common Stock pursuant to Section 4 hereof. 

SECTION 6. ADJUSTMENT OF GRANTED UNITS. 

If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends), any extraordinary dividend, distribution of cash
or other assets to Shareholders of the Company, in order to prevent dilution or enlargement of participants’ rights under the Plan, the Committee shall adjust, in an equitable manner, the number and kind of shares that will be paid to the
Grantee upon settlement of the Granted Units. 
 SECTION 7. MISCELLANEOUS PROVISIONS. 

(a) No Retention Rights, No Future Awards. Nothing in this award or in the Plan shall confer upon the Grantee any right to any future Awards and to
continue in Continuous Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Grantee) or of the Grantee, which rights are
hereby expressly reserved by each, to terminate his or her Continuous Service at any time and for any reason, with or without cause. 
  

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 (b) Award Unfunded. The Granted Units represent an unfunded promise. The Grantee’s rights with
respect to the Granted Units are no greater than the rights of a general unsecured creditor of the Company. 
 (c) Notice. Whenever under
this Agreement it becomes necessary to give notice, such notice shall be in writing, signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified,
by Federal Express (or other similar overnight service) or by registered or certified mail, with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the Grantee at the address that he or she
most recently provided in writing to the Company. 
 (d) Entire Agreement. This Agreement, the Plan, and The Executive Severance
Protection Plan constitute the entire contract between the parties hereto with regard to the Granted Units. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate
to the subject matter hereof. 
 (e) Waiver. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any
other or subsequent breach or condition whether of like or different nature. 
 (f) Successors and Assigns. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Grantee, the Grantee’s assigns and the legal representatives, heirs and legatees of the Grantee’s estate, whether or not
any such person shall have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof. 

(g) Section 409A. The following shall only be applicable if the Grantee is subject to taxation in the United States or the Grantee is
otherwise subject to Section 409A: 
 (i) If any Granted Units (any payment in lieu thereof), shares of Common Stock in
respect thereof or other benefit provided by the Company to the Grantee pursuant to this Agreement and in connection with the Grantee’s Service Termination is determined, in whole or in part, to constitute “nonqualified deferred
compensation” within the meaning of Section 409A and the Grantee is a specified employee as defined in Section 409A(2)(B)(i) as of the date of such Service Termination, no part of such Granted Units (any payment in lieu thereof),
shares of Common Stock in respect thereof or other benefit shall be delivered or paid before the day that is six (6) months plus one (1) day after the date of such Service Termination (the “New Payment Date”). The aggregate of
any Granted Units (any payment in lieu thereof), shares of Common Stock in respect thereof or other benefit that otherwise would have been delivered or paid to the Grantee during the period between the date of Service Termination and the New Payment
Date shall be delivered or paid to the Grantee in a lump sum on such New Payment Date. Thereafter, any delivery or payments that remain outstanding as of the date immediately following the New Payment Date shall be delivered or paid without delay
over the time period originally scheduled, in accordance with the terms of this Agreement. 
 (ii) The parties acknowledge and
agree that the interpretation of Section 409A and its application to the terms of this Agreement is uncertain and may be subject to change as additional guidance and interpretations become available. Anything to the contrary herein
notwithstanding, any Granted Units (any payment in lieu thereof), shares of Common Stock in respect thereof or other benefit provided by the Company to the Grantee that would be deemed to constitute “nonqualified deferred compensation”
within the meaning of Section 409A are 
  

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intended to comply with Section 409A. If however, the Granted Units (any payment in lieu thereof), shares of Common Stock in respect thereof or any other benefit is deemed to not comply with
Section 409A, the Company and the Grantee agree to renegotiate in good faith any such benefit or payment (including, without limitation, as to the timing of any settlement of Granted Units or any payment in lieu thereof) so that either
(i) Section 409A will not apply or (ii) compliance with Section 409A will be achieved; provided, however, that any resulting renegotiated terms shall provide to the Grantee the after-tax economic equivalent of what otherwise has
been provided to the Grantee pursuant to the terms of this Agreement; provided, further that any deferral of payments or other benefits shall be only for such time period as may be required to comply with Section 409A. 

(iii) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the
delivery of shares of Common Stock under vested Granted Units (or the payment of any amount in lieu thereof) subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from
service” within the meaning of Section 409A, and for purposes of any such provision of this Agreement, references to a “Service Termination” or termination or interruption of “Continuous Service” or like terms shall
mean separation from service. 
 (iv) If under this Agreement, an amount is paid or delivered in two or more installments, for
purposes of Section 409A, each installment shall be treated as a separate payment. 
 (v) Anything to the contrary herein
or in the Plan or the Executive Severance Protection Plan notwithstanding, neither the Company or any of its Subsidiaries or Affiliates or any of their respective employees, directors, officers, agents or representatives nor any member of the
Committee shall have any liability to a Grantee or otherwise with respect to the failure of the Plan, the Granted Units or the Award Agreement to comply with Section 409A. 

(h) Headings. Section and sub-section headings are for convenient reference only and shall not control or affect the meaning or construction of
any of its provisions. 
 (i) Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State
of New York (regardless of the law that might otherwise govern under applicable New York principles of conflict of laws). 
 SECTION 8.
RESTRICTIVE COVENANTS. 
 (a) Confidentiality. The Grantee shall not disclose to anyone or make use of any trade secret or proprietary
or confidential information of the Company or an Affiliate, including such trade secret or proprietary or confidential information of any customer or other entity to which the Company owes an obligation not to disclose such information, which he or
she acquires during the period of employment, including, without limitation, records kept in the ordinary course of business, except (i) as such disclosure or use may be required or appropriate in connection with his or her work as an employee
of the Company or an Affiliate, (ii) when required to do so by a court of law, governmental agency or administrative or legislative body (including a committee thereof) with apparent jurisdiction to order him or her to divulge, disclose or make
accessible such information or (iii) as to such confidential information that becomes generally known to the public or trade without his or her violation of this Section 7(a). The Grantee hereby sells, assigns and transfers to the Company
all of his or her right, title and interest in and to all inventions, discoveries, improvements and copyrightable subject matter (the 

 

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“Rights”) that, during his or her employment, are made or conceived by him or her, alone or with others, and that relate to the Company or an Affiliate’s present business or arise
out of any work he or she performs or information he or she receives regarding the business of the Company or an Affiliate while employed by the Company or an Affiliate. The Grantee shall fully disclose to the Company or an Affiliate as promptly as
possible all information known or possessed by him or her concerning the Rights, and upon request by the Company or an Affiliate and without any further compensation in any form to him or her by the Company or an Affiliate, but at the expense of the
Company or an Affiliate, execute all applications for patents and copyright registrations, assignments thereof and other applicable instruments and do all things that the Company or an Affiliate may reasonably deem necessary to vest and maintain in
it the entire right, title and interest in and to all such Rights. Grantee hereby agrees that prior to or immediately following his or her termination of employment he or she shall return all Company property in his or her possession (and signing a
written acknowledgement to this effect), including but not limited to all computer software, computer access codes, laptops, cell phone, Blackberries, keys and access cards, credit cards, vehicles, telephones, office equipment and all copies
(including drafts) of any documentation or information (however and wherever stored) relating to the business of the Company or an Affiliate. 

(b) Non-compete; Non-solicitation. For and in consideration of the compensation to be paid by the Company pursuant to the terms hereof, and in
recognition of the fact that the Grantee will have access to confidential information and other valuable rights of the Company or an Affiliate, the Grantee covenants and agrees that he will not, at any time during his employment with the Company or
an Affiliate and for a period of twelve (12) months thereafter, directly or indirectly, engage in any business or in any activity related to the development, sale, production, manufacturing, marketing or distribution of products or services
that are in competition with products or services that the Company, its parent company or any of their subsidiaries (in the case of other subsidiaries of the parent company, to the extent Grantee has had access to Confidential Information of such
subsidiaries) produces, sells, manufactures, markets, distributes or has interest in, in any state or foreign country in which the Company, its parent company or any of their subsidiaries (in the case of other subsidiaries of the parent company, to
the extent Grantee has had access to Confidential Information of such subsidiaries) then conducts business or reasonably has plans to conduct business. It is not the intent of this covenant to bar the Grantee from employment in any company whose
general business is the manufacture of communications equipment or delivery of communications services, only to limit specific and direct competition with the Company. Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
the Grantee from being an investor in securities of a competitor listed on a national securities exchange or actively traded over-the-counter so long as such investments are in amounts not significant as compared to his total investments or to the
aggregate of the outstanding securities of the issuer of the same class or issue of the specific securities involved. The Grantee further agrees that during his employment by the Company or an Affiliate and for a period of twelve (12) months
thereafter, the Grantee shall not, directly or indirectly, induce, attempt to induce, or aid others in inducing, an exempt employee of the Company or an Affiliate to accept employment or affiliation with another firm or corporation engaging in such
business or activity of which the Grantee is an employee, owner, partner or consultant. 
 (c) Scope. The Company and the Grantee agree
that the duration and geographic scope of the Restrictive Covenant provision set forth in this Section 7 are reasonable. In the event that any court of competent jurisdiction determines that the duration or the geographic scope, or both, are
unreasonable and that such provision is to that extent unenforceable, the Company and the Grantee agree that the provision shall remain in full force and effect for the greatest time period 

 

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and in the greatest area that would not render it unenforceable. The Company and the Grantee intend that this provision shall be deemed to be a series of separate covenants, one for each and
every county of each and every state of the United States of America and each and every political subdivision of each and every country outside the United States of America where this provision is intended to be effective. 

SECTION 9. CLAW BACK. 
 If a Grantee
violates the requirements of Section 7 of this Agreement, then in addition to all remedies in law and/or equity available to the Company, Grantee shall forfeit all unvested Granted Units and vested Granted Units for which delivery of the
underlying shares of Common Stock has not occurred. In addition, with respect to Granted Units for which shares of Common Stock were previously issued to the Grantee pursuant to Section 4 hereof, the Grantee shall immediately pay to the Company
the Fair Market Value of such Common Stock on the date(s) such Granted Units vested, without regard to any taxes that may have been deducted from such amount. 

SECTION 10. DEFINITIONS. 
 (a)
“Affiliate” shall mean (i) any entity other than the Subsidiaries in which the Company has a substantial direct or indirect equity interest, as determined by the Board, and (ii) any Subsidiary. 

(b) “Agreement” shall mean this Deferred Stock Award Agreement. 

(c) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.

 (d) “Effective Registration” shall mean the registration of the shares of Common Stock granted to the Grantee hereunder
pursuant to an effective registration statement on Form S-8 or any successor form under the Securities Act of 1933, as amended. 
 (e)
“Granted Units” shall have the meaning described in Section 1(a) of this Agreement. 
 (f) “Grantee”
shall have the meaning described in Section 1(a) of this Agreement. 
 (g) “Plan” shall have the meaning described in
Section 1(c) of this Agreement. 
 (h) “Section 409A” shall mean Section 409A of the Code and Department of Treasury
regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof. 

(i) “Service Termination” shall have the meaning described in Section 3(b) of this Agreement. 

(j) “Termination Date” shall have the meaning described in Section 3(b) of this Agreement. 

(k) “Vesting Date” shall have the meaning described in Section 3(a) of this Agreement. 

(Signature Page Follows) 
  

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 IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as set forth below and this Agreement shall be dated as of the latest date set forth below. 
  

											
	GRANTEE:	 		 	COMVERSE TECHNOLOGY, INC.	 	
					
	 /s/ Sharon Dayan
	 		 	By:	 	 /s/ Shefali A. Shah
	 	
		 		 		 	Name	 	: Shefali Shah	 	
	Dated:	 	 June 27, 2010
	 		 	Title:	 	SVP, General Counsel & Secretary	 	
		 		 		 	Dated:	 	 June 17, 2010
	 	

  

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 Notice of Grant of Deferred Stock Award 

June 17, 2010 

Sharon Dayan 
 Comverse, Ltd. 

29 Habarzel Street 
 Tel Aviv, Israel 69710

 Dear Sharon: 

Pursuant to the terms and conditions of the Comverse Technology, Inc. (the “Company”) 2005 Stock Incentive Compensation Plan,
as amended (the “Plan”), subject to the agreement to be bound by the terms of a Deferred Stock Award Agreement to be provided herewith (the “Agreement”), you have been granted a Deferred Stock Award consisting of 30,000 shares of
the Company’s common stock (the “Deferred Stock Award”) as outlined below: 
  

			
		
	 Grantee: Sharon Dayan
	 	
		
	 Grant Date: June 13, 2010
	 	
		
	 Time Shares: 30,000
	 	
	
	 Vesting Schedule:         10,000 shares on June 13,
2011

	
	          10,000 shares on June 13, 2012

	
	          10,000 shares on June 13, 2013;

The Deferred Stock Award and any additional rights including, without limitation, any share bonus that shall be distributed to you in
connection with the Deferred Stock Award (the “Additional Rights”), shall be allocated on your behalf to the Trustee – ESOP Trust Company (the “Trustee”). 

The Deferred Stock Award and the Additional Rights shall be allocated on your behalf to the Trustee under the provisions of the
Capital Gains Tax Track and will be held by the Trustee for the period (the “Holding Period”) stated in Section 102 of the Income Tax Ordinate, 1961 and the Income Tax Regulations (Tax Relieves in Allocation of Shares to
Employees), 2003 promulgated thereunder (“Section 102”). 
 If you sell or withdraw the Deferred Stock Award from the
Trustee before the end of the Holding Period (which shall be referred to herein as a “Violation”), you shall pay income tax at your marginal rate on the profits derived from the Deferred Stock Award plus payments to the National Insurance
Institute and Health Tax. You may also be required to reimburse the Company or your employing company, as the case may be (the “Employing Company”), for the employer portion of the payments to the National Insurance Institute, plus any
legally required linkage and interest. You also may be required to reimburse the Employing Company for any other expenses that the Employing Company shall bear as a result of the Violation. 

 

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 The Deferred Stock Award and the Additional Rights are granted to you and allocated to the
Trustee according to the provision of Section 102, the Plan and the Hebrew version of the Trust Agreement signed between the Company and the Trustee attached herewith and made part of this notice. 

The Deferred Stock Award is granted to you on the condition that you sign the Approval of the Designated Employee as detailed and defined
below. Should you choose not to sign the Approval, or if you do not return the signed Approval on or before July 9, 2010, the Deferred Stock Award shall be granted to you under the provisions of the Income Tax Track without a Trustee,
and you shall pay income tax at your marginal rate on the profits derived from the Deferred Stock Award plus payments to the National Insurance Institute and Health Tax. 

You will receive herewith, in addition to this Notice of Grant of Deferred Stock Award, the Agreement and a copy of the Plan. Please note
that this Notice of Grant for Israeli Employees relates to the same Deferred Stock Award. 
  

			
	COMVERSE TECHNOLOGY, INC.
		
	By:	 	 /s/ Shefali A. Shah

	Name:	 	Shefali Shah
	Title:	 	SVP, General Counsel & Secretary

  

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 APPROVAL OF THE DESIGNATED EMPLOYEE: 

I hereby agree that the Granted Units and Additional Rights granted to me, shall be allocated to the Trustee under provisions of the Capital Gains Tax
Track and shall be held by the Trustee for the period stated in Section 102 and in accordance with the provisions of the Trust Agreement, or for a shorter period if an approval is received from the Israeli Tax Authorities. 

I am aware that, upon termination of my employment in the Employing Company, I shall not have a right to the Granted Units, except as specified in the
Plan. 
 I hereby confirm that: 
  

	 	1.	I have read the Plan (which includes the Company’s 2005 Stock Incentive Compensation Plan and Stock Incentive Compensation Plan (2005) Addendum dated
July 5, 2005), I understand and accept its terms and conditions. I specifically confirm that I have read, understand and agree to Sections 3.1, 3.2 and 4 of the Addendum. I also am aware that the Company agrees to grant me the Granted Units and
allocate them on my behalf to the Trustee based on my confirmation; 

  

	 	2.	I understand the provisions of Section 102 and the applicable tax track of this grant of Granted Units; 

 

	 	3.	I agree to the terms and conditions of the Hebrew version of the Trust Agreement attached to this Notice of Grant; 

 

	 	4.	Subject to the provisions of Section 102, I confirm that I shall not sell and/or transfer the Granted Units or Additional Rights from the Trustee before the end of
the Holding Period; 

  

	 	5.	I hereby confirm that, if I shall sell the Granted Units or withdraw the Granted Units from the Trustee before the end of the Holding Period as defined in
Section 102(a) of the Tax Ordinance (the “Violation”), I shall reimburse the Employing Company for the employer any portion of the payment paid by the Employing Company to the National Insurance Institute plus linkage and
interest in accordance with the law, and also shall reimburse the Employing Company for any other expenses that the Employing Company shall incur as a result of the Violation (the payment to the National Insurance Institute and any other expense
hereinafter referred to as the “Payment”). I shall reimburse the Employing Company within three (3) days of the receipt of such a demand or, at the sole discretion of the Employing Company, the Employing Company or the Trustee shall
deduct the said Payment from monies received on my behalf as a result of sale of the said shares. 

  

	 	6.	I hereby confirm that I have: (i) read and understand this letter, and (ii) received all the clarifications and explanations that I have requested.

  

					
	 /s/ Sharon Dayan
	  		 	 June 27, 2010

	Sharon Dayan	  		 	Date
			
	Signature	  		 	

  

 10f8k082710a1ex10i_carcharge.htm

Exhibit 10.1

 

SUBSCRIPTION BOOKLET

 

 

 

CAR CHARGING GROUP, INC.

Up to $1,000,000 of Common Stock

Purchase Price Per Share: $0.30

CONTENTS

Instructions for Subscription

Subscription Agreement

Investor Questionnaire

 

  

1

  

 

CAR CHARGING GROUP, INC.

 

INSTRUCTIONS FOR SUBSCRIPTION

 

The subscriber must do the following:

 

1.           Complete, sign and deliver the Subscription Agreement included in this Subscription Booklet (fill out and sign on signature page).

 

2.           Complete, sign and deliver the Investor Questionnaire included in this Subscription Booklet (fill out and sign).

 

3.           Deliver payment in the aggregate amount of your subscription.

 

Delivery of the completed subscription documents described above and checks for subscription amounts made out to “Car Charging Group, Inc.” should be delivered directly to:

 

Brookville Capital Partners LLC

384 RXR Plaza

Uniondale, New York 11545

Attn: Richard Crockett

Subscription amounts may also be sent by wire transfer of immediately available funds to:

 

 

	 	Bank Name:  	HSBC BANK, N.A.
	 	Account Name: 	Car Charging Group, Inc.
	 	Account # :  	664683827
	 	ABA or Routing # :	021001088
	 	Swift Code:	MRMDUS33
	 	 	 
	 	Bank information: 	9201 Third Avenue
	 	 	Brooklyn, NY 11209
	 	 	Contact: Sophia Sudeall
	 	 	Tel: (718) 238-9329

 

THE COMPANY AND THE PLACEMENT AGENT MAY ACCEPT OR REJECT SUBSCRIPTIONS IN THEIR SOLE DISCRETION.  THE OFFERING IS AVAILABLE ONLY TO “ACCREDITED INVESTORS” AS DEFINED UNDER REGULATION D AND/OR TO NON-UNITED STATES PERSONS UNDER REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  In the event that a subscription offer is not accepted by the Company or the Placement Agent, the subscription funds shall be returned to the subscriber, without interest or deduction thereon.

 

  

2

  

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (the “Agreement”) is made as of the date set forth on the signature page of this Agreement by and between Car Charging Group, Inc., a Nevada corporation (“Car Charging” or the “Company”), and each party who is a signatory hereto (individually, a “Subscriber” and collectively with other signatories of similar subscription agreements entered into in connection with the Offering described below, the “Subscribers”).

 

RECITALS:

 

WHEREAS, Brookville Capital Partners LLC (“Brookville”) is acting as placement agent (the “Placement Agent”), on a “best efforts” basis, in a private offering (the “Offering”) consisting of up to three million three hundred thirty three thousand three hundred thirty three (3,333,333) shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a purchase price of $0.30 per share (the “Securities”);

 

WHEREAS, the Company desires to offer and sell the Securities at a purchase price of $0.30 per share (the “Purchase Price”) for aggregate gross proceeds of up to a maximum of $1,000,000, which Offering is being made on an “best efforts” basis.  The Securities sold in this Offering will not be registered under the Securities Act (as hereinafter defined) in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6), Regulation D (“Regulation D”) and/or Regulation S (“Regulation S”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”). The minimum investment per Subscriber is $10,000, although the Company or the Placement Agent, in their sole discretion may accept subscriptions of a lesser amount.

 

WHEREAS, the Company desires to enter into this Agreement to issue and sell the Common Stock and the Subscriber confirms his/her/its subscription for the purchase of that number of Common Stock as is set forth on the signature page hereto on the terms and conditions set forth herein; and

 

WHEREAS, the Company has retained the Placement Agent in connection with the sale of the Securities pursuant to this Agreement.

 

  

3

  

 

AGREEMENT:

 

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

 

	
I.

	
SUBSCRIPTION OF COMMON STOCK

 

1.1           Subject to the terms set forth herein, the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Company that number of Common Stock as is set forth on the signature page hereto at the Purchase Price.  The aggregate Purchase Price is payable by wire transfer of immediately available funds to:

 

	 	Bank Name:  	HSBC BANK, N.A.
	 	Account Name: 	Car Charging Group, Inc.
	 	Account # :  	664683827
	 	ABA or Routing # :	021001088
	 	Swift Code:	MRMDUS33
	 	 	 
	 	Bank information: 	9201 Third Avenue
	 	 	Brooklyn, NY 11209
	 	 	Contact: Sophia Sudeall
	 	 	Tel: (718) 238-9329

 

1.2           The minimum purchase that may be made by any prospective investor shall be $10,000.  Subscriptions for investment below the minimum investment may be accepted at the discretion of the Company or the Placement Agent.  The Company or the Placement Agent reserves the right to reject any subscription made hereby, in whole or in part, in their sole discretion.  The Company’s agreement with each Subscriber is a separate agreement and the sale of the Securities to each Subscriber is a separate sale.  Subscriber has hereby delivered and paid concurrently herewith the aggregate Purchase Price for the number of Common Stock set forth on the signature page hereof in an amount required to purchase pay for such Common Stock, which amount has been paid in U.S. Dollars by wire transfer or check, subject to collection, to Collateral Agents LLC as escrow agent for Car Charging Group, Inc.

 

1.3           Pending the sale of the Securities, all funds paid hereunder shall be deposited by the Company in an escrow account (“Escrow Account”) with  Collateral Agents LLC (the “Escrow Agent”) maintained at HSBC Bank, N.A.  The Offering period shall expire on the earlier of (i) the date upon which subscriptions for all of the Securities offered hereby have been accepted; (ii) August 31, 2010, unless extended by the Company and the Placement Agent without notice to investors to a date not later than September 30, 2010; or (iii) the date upon which the Company and the Placement Agent elect to terminate the Offering (the “Termination Date”).  The Subscriber acknowledges and understands that this subscription is being made on a “best efforts” basis.  The Subscriber hereby authorizes and directs the Company and the Placement Agent to direct the Escrow Agent to return any funds for unaccepted subscriptions to the same account from which the funds were drawn, without interest.

 

1.4           The Closing shall occur at the offices of Anslow & Jaclin, LLP at 195 Route 9 South, 2nd Floor, Manalapan, NJ 07726 at 2:00 p.m., New York time on such date as the Company and the Placement Agent may agree upon; provided, that all of the conditions set forth hereof and applicable to the Closing shall have been fulfilled or waived in accordance herewith.

 

  

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1.5           Certificates evidencing the Securities purchased by the Subscriber pursuant to this Agreement will be prepared for delivery to the Subscriber promptly following the Closing.  The Subscriber hereby authorizes and directs the Company to deliver the certificates representing the Common Stock purchased by the Subscriber pursuant to this Agreement directly to the Subscriber’s account maintained by either Placement Agent, if any, or, if no such account exists, to the residential or business address indicated on the signature page hereto.

 

Placement of the Securities will be made by the Company who will remit certain compensation to the Placement Agent for introduction to investors and other services.

 

	
II.

	
REPRESENTATIONS BY SUBSCRIBER

 

The Subscriber agrees, represents and warrants to the Company and the Placement Agent, severally and solely with respect to itself and its purchase hereunder and not with respect to any of the other Subscribers, that:

 

2.1           Organization and Qualification.  If an entity, the Subscriber is duly incorporated, organized or otherwise formed, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, organized or otherwise formed.

 

2.2           Authorization.  If an entity: (a) the Subscriber has the requisite corporate or other requisite power and authority to enter into and to perform its obligations under this Agreement and to consummate the transactions contemplated hereby in accordance with the terms hereof; and (b) the execution, delivery and performance of this Agreement by the Subscriber and the consummation by it of the transactions contemplated hereby have been duly authorized by the Subscriber’s Board of Directors or other governing body and no further consent or authorization of the Subscriber, its Board of Directors or its shareholders, members or other interest holders is required.

 

2.3           Enforcement.  This Agreement has been duly executed by the Subscriber and constitutes a legal, valid and binding obligation of the Subscriber enforceable against the Subscriber in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization or moratorium or similar laws affecting the rights of creditors generally and the application of general principles of equity.

 

2.4           Consents.  The Subscriber is not required to give any notice to, make any filing, application or registration with, obtain any authorization, consent, order or approval of or obtain any waiver from any person or entity in order to execute and deliver this Agreement or to consummate the transactions contemplated hereby, except for such notices, filings, applications, registrations, authorizations, consents, orders, approvals and waivers (if any) as have been obtained and the filing of a Form D with the Commission and other similar filings required by applicable state securities or “blue sky” laws and regulations in connection with offerings of securities under Rule 506 (“Rule 506”) promulgated under the Securities Act, if applicable.

 

2.5           Noncontravention.  Neither the execution and the delivery by the Subscriber of this Agreement, nor the consummation by the Subscriber of the transactions contemplated hereby, will (a) violate any law, rule, injunction, or judgment of any governmental agency or court to which the Subscriber is subject or any provision of its charter, bylaws, trust agreement, or other governing documents or (b) conflict with, result in a breach of, or constitute a default under, any agreement, contract, lease, license, instrument, or other arrangement to which the Subscriber is a party or by which the Subscriber is bound or to which any of its assets is subject.  Further, Subscriber represents and warrants that there are no actions, suits, proceedings or investigations pending against Subscriber or Subscriber’s assets before any court or governmental agency (nor, to Subscriber’s knowledge, is there any threat thereof) which would impair in any way Subscriber’s ability to enter into and fully perform Subscriber’s commitments and obligations under this Agreement or the transactions contemplated hereby

 

  

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2.6           Investment Purpose.  Subscriber is purchasing the Securities subscribed for hereby for his own account and investment purposes and not with a view to distribution or resale, nor with the intention of selling, transferring or otherwise disposing of all or any part thereof for any particular price, or at any particular time, or upon the happening of any particular event or circumstance, except selling, transferring, or disposing the Note in full compliance with all applicable provisions of the Securities Act, the rules and regulations promulgated by the SEC thereunder, and applicable state securities laws; and that an investment in the Securities is not a liquid investment.

 

2.7           Accredited Subscriber Status.  The Subscriber is an “accredited investor” as defined by Rule 501 of the Securities Act, and Subscriber is capable of evaluating the merits and risks of Subscriber’s investment in the Offering and has the ability and capacity to protect to Subscriber’s interests.  Subscriber has delivered to the Company an Investor Questionnaire substantially in the form of Exhibit I attached hereto.  The Subscriber hereby represents and warrants that, either by reason of the Subscriber’s business or financial experience or the business or financial experience of the Subscriber’s advisors (including, but not limited to, a “purchaser representative” (as defined in Rule 501(h) promulgated under Regulation D), attorney and/or an accountant each as engaged by the Subscriber at its sole risk and expense) the Subscriber (a) has the capacity to protect its own interests in connection with the transaction contemplated hereby and/or (b) the Subscriber has prior investment experience, including investments in securities of privately-held companies or companies whose securities are not listed, registered, quoted and/or traded on a national securities exchange, including the Nasdaq Global Select Market, the Nasdaq Global Market, and the Nasdaq Capital Market (together, the “NASDAQ”); to the extent necessary, the Subscriber has retained, at its sole risk and expense, and relied upon appropriate professional advice regarding the investment, tax and legal merits and consequences of this Agreement and the purchase of the Securities hereunder; if an entity, the Subscriber was not formed for the sole purpose of purchasing the Securities.

 

2.8           Reliance on Exemptions.  The Subscriber agrees, acknowledges and understands that the Securities being sold as part of this Offering are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and applicable state securities or “blue sky” laws and that the Company and its counsel are relying upon the truth and accuracy of, and the Subscriber’s compliance with, the representations, warranties, covenants, agreements, acknowledgments and understandings of the Subscriber set forth herein in order to determine the availability of such exemptions and the eligibility of the Subscriber to acquire the Securities.

 

2.9           No General Solicitation.  The Subscriber (a) was contacted regarding the sale of the Securities by the Company or the Placement Agent (or their authorized agents or representatives) with whom the Subscriber had a prior substantial pre-existing relationship and (b) no Securities were offered or sold to it by means of any form of general solicitation or general advertising, and in connection therewith, the Subscriber did not receive any general solicitation or general advertising including, but not limited to, the Subscriber’s: (i) receipt or review of any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over the Internet, television or radio, whether closed circuit, or generally available; or (ii) attendance at any seminar meeting or industry investor conference whose attendees were invited by any general solicitation or general advertising.

 

  

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2.10           Information.

 

The Subscriber agrees, acknowledges and understands that the Subscriber and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company, and materials relating to the offer and sale of the Securities that have been requested by the Subscriber or its advisors, the risk factors set forth therein (collectively with this Agreement. the “Offering Documents”).  The Subscriber represents and warrants that the Subscriber and its advisors, if any, have been afforded the opportunity to ask questions of the Company.  The Subscriber agrees, acknowledges and understands that neither such inquiries nor any other due diligence investigation conducted by the Subscriber or any of its advisors or representatives modify, amend or affect the Subscriber’s right to rely on the Company’s representations and warranties contained herein.

 

The Subscriber agrees, acknowledges and understands that the Placement Agent has not supplied any information for inclusion in this Agreement other than information furnished in writing to the Company by the Placement Agent specifically for inclusion in this Agreement relating to the Placement Agent, that the Placement Agent has no responsibility for the accuracy or completeness of this Agreement and that the Subscriber has not relied upon the independent investigation or verification, if any, which may have been undertaken by the Placement Agent.  The Subscriber further represents and warrants that Subscriber has not been furnished with any oral representation or oral information in connection with the Offering or the Securities that is not contained in, or is in any way contrary to or inconsistent with, the statements made in this Agreement.

 

In determining whether to make this investment, Subscriber has relied solely on (i) Subscriber’s own knowledge and understanding of the Company and its business based upon Subscriber’s own due diligence investigations and the information furnished pursuant to this paragraph, and (ii) the information described in subparagraph 2.11.1 below.  Subscriber understands that no person has been authorized to give any information or to make any representations which were not contained in this Agreement and Subscriber has not relied on any other representations or information.

2.11           Acknowledgement of Risk.  The Subscriber agrees, acknowledges and understands that its investment in the Securities involves a significant degree of risk, including, without limitation that: (a) the Company is a development stage business with limited operating history and requires substantial funds in addition to the proceeds from the sale of the Securities; (b) an investment in the Company is highly speculative and only subscribers who can afford the loss of their entire investment should consider investing in the Company and the Securities; (c) the Subscriber may not be able to liquidate its investment; (d) transferability of the Securities is extremely limited; and (e) in the event of a disposition of the Securities, the Subscriber can sustain the loss of its entire investment.

 

2.11.1  Consultation with Advisors.  Subscriber has carefully considered and has discussed with the Subscriber’s legal, tax, accounting and financial advisors, to the extent the Subscriber has deemed necessary, the suitability of this investment and the transactions contemplated by this Agreement for the Subscriber’s particular federal, state, local and foreign tax and financial situation and has independently determined that this investment and the transactions contemplated by this Agreement are a suitable investment for the Subscriber.  Subscriber has relied solely on such advisors and not on any statements or representations of the Company, the Placement Agent or any of their respective agents.  Subscriber understands that Subscriber (and not the Company or the Placement Agent) shall be responsible for Subscriber’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

2.12           Governmental Review.  The Subscriber agrees, acknowledges and understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities or an investment therein.

 

 

2.13           Transfer or Resale.  The Subscriber agrees, acknowledges and understands that:

 

(i)           the Securities have not been and, except as set forth herein, are not being registered under the Securities Act or any applicable state securities or “blue sky” laws.  Consequently, the Subscriber may have to bear the risk of holding the Securities for an indefinite period of time because the Securities may not be transferred unless: (i) the resale of the Securities is registered pursuant to an effective registration statement under the Securities Act; (ii) the Subscriber has delivered to the Company an opinion of counsel reasonably acceptable to the Company and its counsel (in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; or (iii) the Securities are sold or transferred pursuant to Rule 144 promulgated under the Securities Act (“Rule 144”);

 

(ii)           any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Commission promulgated thereunder; and

 

(iii)           except as set forth in herein, neither the Company nor any other person is under any obligation to register the Securities under the Securities Act or any state securities or “blue sky” laws or to comply with the terms and conditions of any exemption thereunder.

 

2.14           Legends.  The Subscriber agrees, acknowledges and understands that the certificates representing the Securities (the “Restricted Securities”) will bear restrictive legends in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Restricted Securities):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES OR “BLUE SKY” LAWS OF ANY STATE OF THE UNITED STATES.  THE SECURITIES MAY NOT BE REOFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS REOFFERED, SOLD, TRANSFERRED, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

 

The Subscriber agrees, acknowledges and understands that the Company will make a notation in the appropriate records with respect to the foregoing restrictions on the transferability of the Restricted Securities.  Certificates evidencing the Restricted Securities shall not be required to contain such legend or any other legend (a) following any sale of the Restricted Securities pursuant to Rule 144, or (b) if the Restricted Securities are eligible for sale under Rule 144 or have been sold pursuant to a registration statement and in compliance with the Subscriber’s obligations set forth in this Agreement, or (c) such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the Commission), in each such case (a) through (c) to the extent reasonably determined by the Company’s legal counsel.

 

  

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2.15           Residency.  The Subscriber is a resident of the jurisdiction set forth immediately below the Subscriber’s name on the signature pages hereto.

 

2.16           Acknowledgements and Conflicts of Interest Regarding Placement Agent.

 

The Subscriber agrees, acknowledges and understands that the Placement Agent are acting as placement agent for the Securities being offered hereby and will be compensated by the Company for acting in such capacity, including, but not limited to: (i) a commission equal to 10% of the aggregate gross proceeds of the Securities sold in this Offering to the Placement Agent upon Closing; (ii) a non-accountable expense allowance equal to 3% of the aggregate gross proceeds of the Securities sold in this Offering upon Closing; (iii) an equity fee consisting of that number of Securities equal to 10% of the number of Securities issued to investors in this Offering; and (iv) indemnification of the Placement Agent against certain liabilities, including liabilities under the Securities Act. The Company has also agreed to reimburse the Placement Agent for filing, legal, accounting, printing, and other costs and expenses aggregating approximately $25,000. The Subscriber further agrees, acknowledges and understands that the Placement Agent has acted solely as agents of the Company in connection with the Offering, that the information and data provided to the Subscriber in connection with the transactions contemplated hereby have not been subjected to independent verification by the Placement Agent and that the Placement Agent makes no representation or warranty with respect to the accuracy or completeness of such information, data or other related disclosure material.  The Subscriber further agrees and acknowledges that in making its decision to enter into this Agreement and purchase the Securities, it has relied on its own examination of the Company and the terms and consequences of holding the Securities.  The Subscriber further agrees, acknowledges and understands that the provisions of this section are for the benefit of, and may be enforced by, the Placement Agent.

 

CONFLICTS OF INTEREST - Certain conflicts of interest exist with respect to the Offering inasmuch as the Placement Agent and/or its assignees have an option to purchase up to 5,000,000 common shares of the Company from an existing shareholder up to 45 days after the last closing in this Offering, which will constitute a 4.7% interest in the Company (assuming the maximum amount of securities in the Offering is sold, and taking into consideration 25,000,000 shares issuable upon conversion of Series A Preferred Stock previously issued in connection with the acquisition of Car Charging Group, Inc.).

The Subscriber agrees, acknowledges and understands that the Placement Agent may engage other persons, selected by it in the Placement Agent’s discretion, who are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”), formerly the National Association of Securities Dealers, Inc., or who are located outside the United States, to assist the Placement Agent in connection with this Offering and that the Placement Agent shall be responsible for the compensation of any selected dealer so engaged.

 

2.17           Not a Registered Representative.  The Subscriber agrees, acknowledges and understands that if it is a Registered Representative of a FINRA member firm, he or she must give such firm the notice required by FINRA’s Rules of Fair Practice, receipt of which must be acknowledged by such firm in the Investor Questionnaire attached hereto as Exhibit I.

 

2.18           No Brokers.  The Subscriber has not engaged, consented to or authorized any broker, finder or intermediary to act on its behalf, directly or indirectly, as a broker, finder or intermediary in connection with the transactions contemplated by this Agreement.  The Subscriber hereby agrees to indemnify and hold harmless the Company and the Placement Agent from and against all fees, commissions or other payments owing to any such person or firm acting on behalf of the Subscriber hereunder.

 

  

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2.19           Reliance on Representations.  The Subscriber agrees, acknowledges and understands that the Company and its counsel, as well as the Placement Agent and their counsel, are entitled to rely on the representations, warranties and covenants made by the Subscriber herein.  Subscriber further represents and warrants that this Subscription Agreement and the Investor Questionnaire accompanying this Subscription Agreement do not contain any untrue statement or a material fact or omit any material fact concerning Subscriber.

 

2.20           No Representations by Placement Agent.  The Subscriber acknowledges that the Placement Agent (including any of their members, managers, employees, agents or representatives) have not made any representations or warranties to the Subscriber concerning the Company and its Subsidiaries (as defined below) and their respective businesses, condition (financial or otherwise) or prospects.

 

2.21           Additional Representations and Warranties of Non-United States Persons.

(i)           At the time the Subscriber was offered the Securities, it was not, and at the date hereof, such Subscriber is not a “U.S. Person” which is defined below:

 

(A)           Any natural person resident in the United States;

 

(B)   Any partnership or corporation organized or incorporated under the laws of the United States;

 

(C)   Any estate of which any executor or administrator is a U.S. person;

 

(D)           Any trust of which any trustee is a U.S. person;

 

(E)   Any agency or branch of a foreign entity located in the United States;

 

(F)   Any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

(G)   Any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and

 

(H)   Any partnership or corporation if (i) organized or incorporated under the laws of any foreign jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) of Regulation D promulgated under the Securities Act) who are not natural persons, estates or trusts.

“United States” or “U.S.” means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

 

  

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(iii)           The Subscriber understands that no action has been or will be taken in any jurisdiction by the Company that would permit a public offering of the Securities in any country or jurisdiction where action for that purpose is required.

(iv)           The Subscriber (i) as of the execution date of this Agreement is not located within the United States, and (ii) is not purchasing the Securities for the account or benefit of any U.S. person except in accordance with one or more available exemptions from the registration requirements of the Securities Act or in a transaction not subject thereto.

(v)           The Subscriber will not resell the Securities except in accordance with the provisions of Regulation S (Rule 901 through 905 and Preliminary Notes thereto), pursuant to a registration under the Securities Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the Securities Act.

(vi)           The Subscriber will not engage in hedging transactions with regard to shares of the Company prior to the expiration of the distribution compliance period specified in Category 2 or 3 (paragraph (b)(2) or (b)(3)) in Rule 903 of Regulation S, as applicable, unless in compliance with the Securities Act; and as applicable, shall include statements to the effect that the securities have not been registered under the Securities Act and may not be offered or sold in the United States or to U.S. persons (other than distributors) unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available.

(vii)           No form of “directed selling efforts” (as defined in Rule 902 of Regulation S under the Securities Act), general solicitation or general advertising in violation of the Securities Act has been or will be used nor will any offers by means of any directed selling efforts in the United States be made by the Subscriber or any of their representatives in connection with the offer and sale of the Shares.

2.22           Short Sales and Confidentiality. Other than the transaction contemplated hereunder, the Subscriber has not directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding with the Subscriber, executed any disposition, including short sales (but not including the location and/or reservation of borrowable shares of Common Stock), in the securities of the Company during the period commencing from the time that the Subscriber first received a term sheet from the Company or any other person setting forth the material terms of the transactions contemplated hereunder until the date that the transactions contemplated by this Agreement are first publicly.  The Subscriber covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company, the Subscriber will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). The Subscriber understands and acknowledges that the Commission currently takes the position that coverage of short sales of shares of the Common Stock “against the box” prior to the effective date of the Registration Statement with the Purchased Shares is a violation of Section 5 of the 1933 Act, as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporation Finance. Notwithstanding the foregoing, the Subscriber hereby represents, warrants and covenants that it will not engage in short sales in the securities of the Company for a period of twenty four (24) months following the Closing of the Offering.

2.23           No Distribution.  Subscriber represents and warrants that Subscriber has: (i) not distributed or reproduced this Agreement, in whole or in part, at any time, without the prior written consent of the Company, (ii) kept confidential the existence of this Agreement and the information contained therein or made available in connection with any further investigation of the Company and (iii) refrained and shall refrain from trading in the publicly-traded securities of the Company for so long as such recipient has been in possession of any material non-public information contained in the Offering Documents.

 

  

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2.24           OFAC.  The Subscriber should check the Office of Foreign Assets Control (“OFAC”) website at <http://www.treas.gov/ofac> before making the following representations. The Subscriber represents that the amounts invested by it in the Company in the Offering were not and are not directly or indirectly derived from activities that contravene federal, state or international laws and regulations, including anti-money laundering laws and regulations. Federal regulations and Executive Orders administered by OFAC prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals.  The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at <http://www.treas.gov/ofac>.  In addition, the programs administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals or entities in certain countries regardless of whether such individuals or entities appear on the OFAC lists;

To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a country, territory, individual or entity named on an OFAC list, or a person or entity prohibited under the OFAC Programs. Please be advised that the Company or Placement Agent, as applicable, may not accept any amounts from a prospective investor if such prospective investor cannot make the representation set forth in the preceding paragraph. The Subscriber agrees to promptly notify the Company and the Placement Agent should the Subscriber become aware of any change in the information set forth in these representations.  The Subscriber understands and acknowledges that, by law, the Company may be obligated to “freeze the account” of the Subscriber, either by prohibiting additional subscriptions from the Subscriber, declining any redemption requests and/or segregating the assets in the account in compliance with governmental regulations, and Selling Agent may also be required to report such action and to disclose the Subscriber’s identity to OFAC. The Subscriber further acknowledges that the Company may, by written notice to the Subscriber, suspend the redemption rights, if any, of the Subscriber if the Company reasonably deems it necessary to do so to comply with anti-money laundering regulations applicable to the Company and Selling Agent or any of the Company’s other service providers.  These individuals include specially designated nationals, specially designated narcotics traffickers and other parties subject to OFAC sanctions and embargo programs;

To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any person controlling or controlled by the Subscriber; (3) if the Subscriber is a privately-held entity, any person having a beneficial interest in the Subscriber; or (4) any person for whom the Subscriber is acting as agent or nominee in connection with this investment is a senior foreign political figure, or any immediate family member or close associate of a senior foreign political figure; and

If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign Bank”), or if the Subscriber receives deposits from, makes payments on behalf of, or handles other financial transactions related to a Foreign Bank, the Subscriber represents and warrants to the Company that: (1) the Foreign Bank has a fixed address, other than solely an electronic address, in a country in which the Foreign Bank is authorized to conduct banking activities; (2) the Foreign Bank maintains operating records related to its banking activities; (3) the Foreign Bank is subject to inspection by the banking authority that licensed the Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not provide banking services to any other Foreign Bank that does not have a physical presence in any country and that is not a regulated affiliate.

  

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III.

	
REPRESENTATIONS BY THE COMPANY

 

The Company hereby represents and warrants to each Subscriber and the Placement Agent as follows, with the intention and understanding, as to matters pertaining to the Company, that such representations and warranties are made as of the Closing and assuming that the Combination shall have been consummated immediately prior to the Closing:

 

3.1           Organization and Qualification.

 

The Company is duly incorporated, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.  The Company is duly qualified to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a material adverse effect on (a) the business, operations assets or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (b) the ability of the Company or any Subsidiary to perform its obligations pursuant to the transactions contemplated by this Agreement or under any instruments to be entered into or filed in connection herewith (collectively, a “Material Adverse Effect”).

 

Each Subsidiary has been duly organized, is validly existing and in good standing under the laws of the jurisdiction of its organization, has the power and authority  (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.  Each Subsidiary is duly qualified to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.  All of the issued and outstanding capital stock of each Subsidiary is owned, directly or indirectly, by the Company, in each case, free and clear of any liens, and has been duly authorized and validly issued, and is non-assessable.  Except for the Subsidiaries, the Company does not presently own or control, directly or indirectly, any interest in any other subsidiary, corporation, association or other business entity.

 

3.2           Authorization; Enforcement.  (a)  The Company has the requisite corporate power and authority to enter into and to perform its obligations under this Agreement, to consummate the transactions contemplated hereby and to issue the Securities in accordance with the terms hereof; (b) the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby (including without limitation the issuance of the Common Stock) have been duly authorized by the Company’s Board of Directors (the “Board”) and no further consent or authorization of the Company, its Board or its shareholders is required that has not or will not be obtained prior to the Closing; (c) this Agreement has been duly executed by the Company; and (d) this Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization or moratorium or similar laws affecting the rights of creditors generally and the application of general principles of equity.

 

3.3           Capitalization.  The number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all Common Stock and preferred shares reserved for issuance under the Company’s various option and incentive plans, together with the schedules to this Agreement.  There are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Stock or preferred shares, or contracts, 

 

  

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commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Common Stock or preferred shares, or securities or rights convertible or exchangeable into Common Stock or preferred shares.  The issue and sale of the Common Stock hereunder will not, immediately or with the passage of time, obligate the Company to issue any Common Stock or other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities.

 

3.4           Issuance of Common Stock.  The Common Stock purchased under this Agreement are duly authorized and, upon issuance in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, free and clear from all taxes, liens, claims, encumbrances and charges with respect to the issue thereof, will not be subject to preemptive rights or other similar rights of stockholders of the Company, and will not impose personal liability on the holders thereof.    The Common Stock, when issued in accordance, and upon receipt by the Company of the consideration set forth therein, shall have been duly authorized, validly issued, fully paid and non-assessable, free and clear from all taxes, liens, claims, encumbrances and charges with respect to the issue thereof, will not be subject to preemptive rights or other similar rights of stockholders of the Company, and will not impose personal liability on the holders thereof.

 

3.5           No Conflicts; No Violation.

 

The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (including, without limitation, the issuance of the Common Stock) will not: (i) conflict with or result in a violation of any provision of its Certificate of Incorporation or Bylaws or the certificate of incorporation, by-laws or other organizational documents of any Subsidiary; (ii) violate or conflict with, result in a breach of any provision of, constitute a default (or an event which with notice or lapse of time, or both, could become a default) under or give to others any rights of termination, amendment, acceleration or cancellation of any material agreement, indenture, patent, patent license or instrument to which the Company or any Subsidiary is a party; or (iii) result in a material violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities or “blue sky” laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any Subsidiary or by which any property or asset of the Company or any Subsidiary is bound or affected (except for such conflicts, breaches, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect).

 

Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities or “blue sky” laws or any listing agreement with any securities exchange or automated quotation system, neither the Company nor any Subsidiary is required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self regulatory agency in order for it to execute, deliver or perform any of the Company’s obligations under this Agreement in accordance with the terms hereof, or to issue and sell the Securities in accordance with the terms hereof.  All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.

 

3.6           Absence of Certain Changes.  Except as otherwise previously disclosed, since the date of this Agreement (including any subsequent amendments or supplements thereto) there has been no material adverse change in the assets, liabilities, business, properties, operations, financial condition, prospects or results of operations of the Company or any Subsidiary.

 

  

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3.7           Absence of Litigation.  Except as otherwise disclosed, there is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened, against or affecting the Company or any Subsidiary or any of their respective officers or directors acting as such that could, individually or in the aggregate, have a Material Adverse Effect.

 

3.8           Tax Status.  Except as otherwise disclosed, each of the Company and its Subsidiaries has timely made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company or such Subsidiary has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  Except as otherwise disclosed, to the knowledge of the Company, there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and each Subsidiary know of no basis for any such claim.  Neither the Company nor any Subsidiary has executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax.  To the Company’s knowledge, none of the Company’s and none of any Subsidiary’s tax returns are presently being audited by any taxing authority.

 

3.9           No Brokers.  Except as otherwise disclosed, neither the Company nor any Subsidiary has taken any action which would give rise to any claim by any person for brokerage commissions, finder’s fees or similar payments relating to this Agreement or the transactions contemplated hereby, except for dealings with the Placement Agent, whose commissions and fees will be paid by the Company.

 

3.10           Investment Company Status.  Neither the Company nor any Subsidiary is, and upon consummation of the sale of the Securities will not be, an “investment company,” a company controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.

 

3.11           Placement Agent.  The Company has engaged, consented to and authorized the Placement Agent to act as agent for the Company in connection with the transactions contemplated by this Agreement.  The Company will pay the Placement Agent a commission in the form of advisory fees in connection with the Offering, and the Company agrees to indemnify the Placement Agent against certain liabilities, including liabilities under the Securities Act.

 

3.12           Financial Statements.

 

Each report required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as the Company was required by law to file such reports) (the “Company Financial Statements”) present fairly present in all material respects the financial condition and position of the Company at the dates and for the periods indicated; and have been prepared in conformity with GAAP consistently applied throughout the periods covered thereby (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 Exchange Act), and fairly present in all material respects the financial position of the Company as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.  Since the date of the most recent balance sheet included 

 

  

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as part of the Company Financial Statements, there has not been: (a) any change in the assets, liabilities, financial condition or operations of the Company from that reflected in the Company Financial Statements, other than changes in the ordinary course of business, including ongoing losses, none of which individually or in the aggregate would reasonably be expected to have a Material Adverse Effect; (b) other than as a result of the Combination; or (c) any other event or condition of any character that, either individually or cumulatively, would reasonably be expected to have a Material Adverse Effect, except for the expenses incurred in connection with the transactions contemplated by this Agreement.

 

3.13           Disclosure.  This Agreement, the Schedules and Exhibits hereto and all other documents delivered to the Subscriber in connection herewith at the Closing, do not contain any untrue statement of a material fact, or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  There are no facts that, individually or in the aggregate, would have a Material Adverse Effect that have not been disclosed in the Offering Documents (including the Schedules and Exhibits thereto) or any other documents delivered to the Subscriber in connection herewith or therewith at the Closing.

 

3.14           Securities Law Exemption.  Assuming the truth and accuracy of the Subscriber’s representations and warranties in this Agreement and the truth and accuracy of each of the other Subscribers’ representations and warranties set forth in the subscription agreements executed by such other Subscribers, the offer, sale and issuance of the Securities as contemplated by this Agreement and the other subscription agreements are exempt from the registration requirements of the Act and applicable state securities laws, and neither the Company nor any authorized agent acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption.

 

3.15           No Integrated Offering.  Neither the Company nor any of its respective affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration under the Securities Act.  The issuance of the Securities will not be integrated with any past issuance of the Company’s securities for purposes of the Securities Act.  Except as otherwise disclosed, the Company has not sold or issued any Common Stock, preferred shares, convertible notes or warrants during the past six months, including sales pursuant to Rule 144A, Regulation D or Regulation S under the Act, other than shares issued pursuant to employee benefit plans, if any.

 

3.16           Books and Records.  The books, records and accounts of each of the Company and its Subsidiaries accurately and fairly reflect, in reasonable detail, the transactions in, and dispositions of, the assets of, and the results of operations of, the Company and its Subsidiaries, all to the extent required by generally accepted accounting principles.

 

3.17           No Change of Control.   The Company will not undertake a Change of Control (as defined below) transaction for a period of twenty four (24) months from the Closing of the Offering without the approval of the Placement Agent.

“Change in Control” shall mean (i) the acquisition by any one person, or more than one person acting as a group (within the meaning of Rule 13d-3), of ownership of stock of the Company possessing more than 50% of the total voting power of the capital stock of the Company (an “Acquirer”); or (ii) (a) any consolidation or merger of the Company, in which the stockholders of the Company immediately before the consolidation or merger will not own 50% or more of the voting shares of the continuing or surviving corporation (or if the transaction is structured as merger or consolidation of subsidiaries, 50% or more of the continuing or surviving parent corporation) immediately after such consolidation or merger, or (b) any sale, lease, exchange, or other transfer (in one transaction or series of related transactions) of all or substantially all of the assets of the Company.

 

  

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IV.

	
TERMS OF SUBSCRIPTION

 

4.1           The minimum subscription by any single Subscriber shall be $10,000; provided that the Company or the Placement Agent reserves the right to accept, in their sole discretion, subscriptions for a lesser amount of Securities.  The Offering shall terminate at the earlier of (i) the date upon which subscriptions for all of the Common Stock offered hereby have been accepted; (ii) August 31, 2010, unless extended by the Company and the Placement Agent without notice to investors to a date not later than September 30, 2010]; or (iii) the date upon which the Company and the Placement Agent elect to terminate the Offering.  Subject to the satisfaction of the conditions of the obligations of the Company and Subscriber set forth herein the Closing shall occur upon receipt of a properly executed copy of this Agreement from the Subscriber or such other subscriber and the purchase price for the Securities being purchased by the Subscriber or such other subscriber representing in the aggregate.  The date of the Closing is referred to herein as the “Closing Date.”

 

4.2           Pending the Closing Date, all funds paid hereunder shall be deposited by the Company in escrow with the Escrow Agent.

 

4.3           The Subscriber hereby authorizes and directs the Company to deliver the Securities to be issued to the Subscriber pursuant to this Agreement to the residential or business address indicated on the signature page hereto or to any customer account maintained with the Placement Agent.

 

4.4           The Subscriber hereby authorizes and directs the Company to return, without interest, any funds for unaccepted subscriptions (including any subscriptions that were not accepted as a result of the termination of the Offering) to the same account from which the funds were drawn, including any customer account maintained with the Placement Agent.

 

4.5           The Company’s agreement with each Subscriber is a separate agreement and the sale of Securities to each Subscriber is a separate sale.

 

	
V.

	
COVENANTS OF THE COMPANY AND SUBSCRIBER

 

5.1           Form D; Blue Sky Laws.  The Company shall timely file with the Commission, and the applicable states, a Notice of Sale of Securities on Form D with respect to the Offering, as required under Regulation D.

 

5.2           Expenses.  The Company and the Subscriber are liable for, and shall pay, their own expenses incurred in connection with the negotiation, preparation, execution and delivery of this Agreement, including, without limitation, attorneys’ and consultants’ fees and expenses.

 

5.3           Compliance with Law.  As long as the Subscriber owns any of the Common Stock, the Company will conduct its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business (including, without limitation, all applicable local, state and federal environmental laws and regulations), except for those laws, rules and regulations the failure to comply with which would not have a Material Adverse Effect.

 

5.4           Sales by Subscribers.  The Subscriber shall sell any and all Registrable Securities (as defined below) purchased hereby in compliance with applicable prospectus delivery requirements, if any, or otherwise in compliance with the requirements for an exemption from registration under the Securities Act and the rules and regulations promulgated thereunder. The Subscriber will not make any sale, transfer or other disposition of the Securities in violation of federal or state securities or “blue sky” laws and regulations.

 

  

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VI.

	
CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBER

 

The Subscriber’s obligation to purchase Securities at the Closing is subject to the fulfillment on or prior to the Closing of the following conditions, which conditions may be waived at the option of the Subscriber to the extent permitted by law:

 

6.1           Representations and Warranties Correct.  The representations and warranties made by the Company herein shall be true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date.

 

6.2           Covenants.  All covenants, agreements and conditions contained in this Agreement to be performed by the Company on or prior to such purchase shall have been performed or complied with in all material respects.

 

6.3           No Legal Order Pending.  There shall not then be in effect any legal or other order enjoining or restraining the transactions contemplated by this Agreement.

 

6.4           No Law Prohibiting or Restricting Such Sale.  There shall not be in effect any law, rule or regulation prohibiting or restricting such sale or requiring any consent or approval of any person which shall not have been obtained to issue the Common Stock (except as otherwise provided in this Agreement).

 

6.5           Legal Opinion.  On the Closing Date, the Company will provide an opinion reasonably acceptable to the Subscribers and the Placement Agent from the Company’s legal counsel opining on the availability of an exemption from registration under the 1933 Act as it relates to the offer and issuance of the Securities and other matters reasonably requested by the Placement Agent.

 

6.6           Officer’s Certificates.  The Company shall have delivered a Certificate, executed on behalf of the Company by its Chief Executive Officer, dated as of the Closing Date, certifying to the Subscribers and Placement Agent the fulfillment of the conditions specified herein and the Company shall have each delivered a Certificate, executed by the Chief Executive Officers, dated as of the Closing Date, certifying to the Subscribers and Placement Agent the representations and warranties and conditions set forth in the Agreement.

 

6.7           Secretary Certificates.  The Company shall have delivered a Certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying to the Subscribers and Placement Agent the resolutions adopted by the Board of Directors of the Company approving, as applicable, the transactions contemplated by this Agreement and the other Offering Documents, and the issuance of the Common Stock, certifying the current versions of its certificates of incorporation and bylaws or other organizational documents and certifying as to the signatures and authority of persons signing the Offering Documents and related documents on its behalf.

 

	
VII.

	
REGISTRATION RIGHTS AND INDEMNIFICATION

 

7.1           Registration.

 

  

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If at any time until two years after the Closing Date there is not an effective registration statement covering all of the Securities or the Securities are not saleable under Rule 144 and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities, but excluding Forms S-4 or S-8 and similar forms which do not permit such registration, then the Company shall send to each holder of any of the Securities written notice of such determination and, if within fifteen calendar days after receipt of such notice, any such holder shall so request in writing, the Company shall include in such registration statement all or any part of the Securities such holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights and any cutbacks in  accordance with guidance provided by the Securities and Exchange Commission (including, but not limited to, Rule 415).  The obligations of the Company under this Section may be waived by any holder of any of the Securities entitled to registration rights under this Section 7.1. The holders whose Securities are included or required to be included in such registration statement are granted the same rights, benefits, liquidated or other damages and indemnification granted to other holders of securities included in such registration statement.  Notwithstanding anything to the contrary herein, the registration rights granted hereunder to the holders of Securities shall not be applicable for such times as such Securities may be sold by the holder thereof without restriction pursuant to Section 144(b)(1) of the 1933 Act.  In no event shall the liability of any holder of Securities or permitted successor in connection with any Securities included in any such registration statement be greater in amount than the dollar amount of the net proceeds actually received by such Subscriber upon the sale of the Securities sold pursuant to such registration or such lesser amount applicable to other holders of Securities included in such registration statement. All expenses incurred by the Company in complying with Section 7, including, without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the NASD, transfer taxes, and fees of transfer agents and registrars, are called “Registration Expenses.” All underwriting discounts and selling commissions applicable to the sale of registrable securities are called "Selling Expenses."  The Company will pay all Registration Expenses in connection with the registration statement under Section 7.  Selling Expenses in connection with each registration statement under Section 7 shall be borne by the holder and will be apportioned among such holders in proportion to the number of Common Stock included therein for a holder relative to all the Securities included therein for all selling holders, or as all holders may agree

 

7.2           Indemnification.  In the event that any Securities are included in a Registration Statement under this section:

 

To the extent permitted by law, the Company will indemnify and hold harmless each holder, any underwriter (as defined in the Securities Act) for such holder and each person, if any, who controls such holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”):  (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, or any rule or regulation promulgated under the Securities Act, or the Exchange Act, and the Company will pay to each such holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this section shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.

 

  

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To the extent permitted by law, each selling holder will indemnify and hold harmless the Company, each of its directors, each of its officers, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other holder selling securities in such registration statement and any controlling person of any such underwriter or other holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, or the Exchange Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this section, in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this section shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the holder, which consent shall not be unreasonably withheld; provided, further, that, in no event shall any indemnity under this section exceed the greater of the cash value of the (i) gross proceeds from the offering received by such holder or (ii) such holder’s investment pursuant to this Agreement as set forth on the signature page attached hereto.

 

Promptly after receipt by an indemnified party under this section of notice of the commencement of any action (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against any indemnifying party under this section, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, to assume the defense thereof with counsel selected by the indemnifying party and approved by the indemnified party (whose approval shall not be unreasonably withheld); provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this section, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this section.

 

If the indemnification provided for in this section is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

  

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The obligations of the Company and Subscriber under this section shall survive the completion of any offering of Securities in a registration statement.

 

	
VIII.

	
MISCELLANEOUS

 

8.1           Governing Law; Jurisdiction.  This Agreement will be governed by and interpreted in accordance with the laws of the State of Florida without regard to the principles of conflict of laws.  The parties hereto hereby submit to the exclusive jurisdiction of the United States federal and state courts located in the State of Florida with respect to any dispute arising under this Agreement or the transactions contemplated hereby or thereby.

 

8.2           Counterparts; Signatures by Facsimile.  This Agreement may be executed in two or more counterparts, all of which are considered one and the same agreement and will become effective when counterparts have been signed by each party and delivered to the other parties.  This Agreement, once executed by a party, may be delivered to the other parties hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

 

8.3           Headings.  The headings of this Agreement are for convenience of reference only, are not part of this Agreement and do not affect its interpretation.

 

8.4           Severability.  If any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision will be deemed modified in order to conform to such statute or rule of law.  Any provision hereof that may prove invalid or unenforceable under any law will not affect the validity or enforceability of any other provision hereof.

 

8.5           Entire Agreement; Amendments.  This Agreement (including all schedules and exhibits hereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein.  This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.  Except as set forth in herein, no provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

8.6           Notices.  Any notices required or permitted to be given under the terms of this Agreement must be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) and will be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally, or by courier (including a recognized overnight delivery service), in each case addressed to a party.  The addresses for such communications are:

 

 

	 	If to the Company:  	Car Charging Group, Inc.
	 	 	Attn:   Michael D. Farkas
	 	 	Chief Executive Officer
	 	 	1691 Michigan Avenue
	 	 	Miami Beach, FL 33139
	 	 	Tel: (305) 521-0200

 

  

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	 	With copies to: 	Anslow & Jaclin, LLP
	 	 	Attn:  Gregg E. Jaclin
	 	 	195 Route 9 South, 2nd Floor
	 	 	Manalapan, NJ 07726
	 	 	Tel: (732) 409-1212
	 	 	Fax: (732) 577-1188

	
  

	
If to the Subscriber:

	
To the address set forth immediately below the

	
  

	
Subscriber’s name on the signature pages hereto.

Each party will provide written notice to the other parties of any change in its address.  Each party will copy the Placement Agent on any such notices as follows:

 

Brookville Capital Partners LLC

Attn: Anthony Lodati

384 RXR Plaza

Uniondale, New York 11556

Tel: (516) 349-0300

Fax: (516 )  349-7393

8.7           Removal of Legends.  Upon the earlier of (i) registration for resale as set forth herein, or (ii) an exemption under Rule 144 becoming available, the Company shall (A) deliver to the transfer agent for the Securities (the “Transfer Agent”) irrevocable instructions that the Transfer Agent shall reissue a certificate representing Common Stock without legends upon receipt by such Transfer Agent of the legended certificates for such shares, together with either (1) a customary representation by the Subscriber that Rule 144 applies to the Common Stock represented thereby or (2) a statement by the Subscriber that such Subscriber has sold the Common Stock represented thereby in accordance with the Plan of Distribution contained in the registration statement, and (B) cause its counsel to deliver to the Transfer Agent one or more blanket opinions to the effect that the removal of such legends in such circumstances may be effected under the Securities Act subject to such investor and broker representations and notifications that counsel may reasonably request.  From and after the earlier of such dates, upon a Subscriber’s written request, the Company shall promptly cause certificates evidencing the Subscriber’s securities to be replaced with certificates which do not bear such restrictive legends provided the provisions of either clause (i) or clause (ii) above, as applicable, are satisfied with respect to such Common Stock.

 

8.8           Successors and Assigns.  This Agreement is binding upon and inures to the benefit of the parties and their successors and assigns.  The Company will not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Subscriber and the Subscriber may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company.  Notwithstanding the foregoing, the Subscriber may assign all or part of its rights and obligations hereunder to any of its “affiliates,” as that term is defined under the Securities Act, without the consent of the Company so long as the affiliate is an accredited investor (within the meaning of Regulation D) and agrees in writing to be bound by this Agreement.  This provision does not limit the Subscriber’s right to transfer the Common Stock pursuant to the terms of this Agreement or to assign the Subscriber’s rights hereunder to any such transferee pursuant to the terms of this Agreement.

 

8.9           Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except that either Placement Agent is an intended beneficiary of all representations and warranties by any party and all covenants made by the parties, including but not limited to the Piggy-Back Registration Rights provided herein.

 

  

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8.10           Further Assurances.  Each party will do and perform, or cause to be done and performed, all such further acts and things, and will execute and deliver all other agreements, certificates, instruments and documents, as another party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

8.11           No Strict Construction.  The language used in this Agreement is deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

8.12           Equitable Relief.  The Company recognizes that, if it fails to perform or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Subscriber.  The Company therefore agrees that the Subscribers are entitled to seek temporary and permanent injunctive relief in any such case.

 

8.13           Acceptance.  Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of the Securities as herein provided, subject to acceptance by the Company; subject, however, to the right hereby reserved to the Company to enter into the same agreements with other Subscribers and to add and/or delete other persons as Subscribers.

 

8.14           Waiver.  It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

 

8.15           Other Documents.  The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

8.16           Public Statements.  The Subscriber agrees not to issue any public statement with respect to the Subscriber’s investment or proposed investment in the Company or the terms of any agreement or covenant between them and the Company without the Company’s prior written consent, except such disclosures as may be required under applicable law or under any applicable order, rule or regulation.

 

8.17           Exculpation Among Subscribers.  The Subscriber agrees, acknowledges and understands that it is not relying on any of the other Subscribers in making its investment or decision to invest in the Company.  The Subscriber agrees, acknowledges and understands that none of the other Subscribers nor their respective controlling persons, officers, directors, partners, agents or employees shall be liable to the Subscriber for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the purchase of the Securities or the execution of or performance under this Agreement, nor shall the Subscriber be liable to the other Subscribers for any action heretofore or hereafter taken or omitted to be taken by the Subscriber in connection with the purchase of the Securities or the execution of or performance under this Agreement.

 

8.18           Press Release and 8-K.  By 8:30 a.m. (New York City time) on the first business day following the Closing Date, the Company shall, in consultation with the Placement Agent, issue a press release disclosing the consummation of the transactions contemplated by this Agreement and within four (4) business days following the Closing Date, the Company shall file a Current Report on Form 8-K with the SEC disclosing such information required by Form 8-K.

 

  

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8.19           Several Obligations.  The obligations of each Subscriber under any Offering agreements are several and not joint with the obligations of any other Subscriber, and no Subscriber shall be responsible in any way for the performance of the obligations of any other Subscriber under any Offering agreement.  Nothing contained herein or in any other Offering agreement, and no action taken by any Subscriber pursuant hereto or thereto, shall be deemed to constitute the Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscribers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Offering agreements.  Each Subscriber confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors.  Each Subscriber shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Offering agreements, and it shall not be necessary for any other Subscriber to be joined as an additional party in any proceeding for such purpose.  The Company acknowledges that each of the Subscribers has been provided with the same Offering agreements for the purpose of closing a transaction with multiple Subscribers and not because it was required or requested to do so by any Subscriber.

 

8.20           Counterparts.  This Agreement may be executed in two or more counterparts each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

 

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SIGNATURE PAGE

Please acknowledge your acceptance of the foregoing Subscription Agreement with Car Charging Group, Inc. by signing and returning a copy to the Company whereupon it shall become a binding agreement.

Minimum Purchase is 33,333 Shares and costs $10,000 (i.e. $0.30 per share).

 

 

Number of Shares: _______    X  $0.30 per Share = Purchase Price: __________________

 

	
___________________________________

	
_____________________________________

	  	
Signature

	
Signature (if purchasing jointly)

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Name Typed or Printed

	
Name Typed or Printed

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Entity Name

	
Entity Name

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Address

	
Address

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
City, State and Zip Code

	
City, State and Zip Code

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Telephone - Business

	
Telephone - Business

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Telephone – Residence

	
Telephone – Residence

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Facsimile – Business

	
Facsimile - Business

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Facsimile – Residence

	
Facsimile – Residence

	  	  	  
	  	
___________________________________

	
_____________________________________

	  	
Tax ID # or Social Security #

	
Tax ID # or Social Security #

	  	  	  

Name in which securities should be issued:                                                                          

 

Dated:   _____________, 2010

 

  

24

  

 

This Subscription Agreement is agreed to and accepted as of ________________, 2010.

 

 

CAR CHARGING GROUP, INC.

By: _____________________________

       Name:

       Title:

25

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