Document:

f10k2012ex4iv_carcharging.htm

Exhibit 4.4

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

Principal Amount: ­­__________      Issue Date: __________

SECURED CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, CAR CHARGING GROUP, INC., a Nevada corporation (hereinafter called “Borrower”), hereby promises to pay to the order of __________ (collectively, the “Holder”), without demand, the sum of __________ ($__________) (“Principal Amount”), with interest accruing thereon, on the six (6) month anniversary date of the Issue Date (the “Maturity Date”), if not sooner paid.

This Note is issued by Borrower pursuant to that certain Convertible Note Purchase Agreement dated of even date herewith.

 

This Note also contains a three (3) year warrant to purchase __________ shares of common stock substantially in the form attached as Exhibit A to the Note (the “Warrant”).

 

ARTICLE I

GENERAL PROVISIONS

1.1           Interest Rate.   Interest payable on this Note shall accrue at the annual rate of twelve percent (12%) and be payable on the Maturity Date, accelerated or otherwise, when the principal and remaining accrued but unpaid interest shall be due and payable, or sooner as described below.

1.2           Payment Grace Period.  The Borrower shall have a ten (10) day grace period to pay any monetary amounts due under this Note.  After the expiration of the grace period, during the pendency of an Event of Default (as described in Article III), a default interest rate of eighteen percent (18%) per annum shall be in effect.

1.3           Conversion Privileges.  The Conversion Rights set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default.  This Note shall be payable in full on the Maturity Date, unless previously converted into Common Stock in accordance with Article II hereof.

1.4           Prepayment.  This Note may be prepaid by the Borrower in whole, at any time, or in part, from time to time, without penalty or premium, upon four (4) business days prior written notice to the Holder.  Upon receipt of such notice, the Holder may determine to convert the Note pursuant to Article II.  No such notice shall be necessary if payment will be made on the Maturity Date.

1.5           Installation Payments.  Prior to the Maturity Date, for every One Million Dollars ($1,000,000) cumulatively received by Borrower from equity investor(s), the Holder shall be entitled to be repaid Twenty Five Thousand Dollars ($25,000).

 

 

  

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ARTICLE II

CONVERSION RIGHTS

The Holder shall have the right to convert the principal and any interest due under this Note into Shares of the Borrower's Common Stock, $0.001 par value per share (“Common Stock”) as set forth below.

2.1.           Conversion into the Borrower's Common Stock.

(a)           The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and accrued interest, at the election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of Common Stock as such stock exists on the date of issuance of this Note, or any shares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified, at the Fixed Conversion Price (as defined in Section 2.1(b) hereof), determined as provided herein.  Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is annexed hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days after the Conversion Date (such third day being the “Delivery Date”) that number of shares of Common Stock for the portion of the Note converted in accordance with the foregoing.  At the election of the Holder, the Borrower will deliver accrued but unpaid interest on the Note, if any, through the Conversion Date directly to the Holder on or before the Delivery Date.  The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal of the Note and interest, if any, to be converted, by the Fixed Conversion Price.

(b)   Subject to adjustment as provided herein, the fixed conversion price per share shall be equal to $1.00 (“Fixed Conversion Price”).

(c)         The Fixed Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a), shall be subject to adjustment from time to time upon the happening of certain events while this conversion right remains outstanding, as follows:

A.      Merger, Sale of Assets, etc.  If (A) the Borrower effects any merger or  consolidation of the Borrower with or into another entity, (B) the Borrower effects any sale of all or substantially all of its assets in one or a series of related transactions,  (C) any tender offer or exchange offer (whether by the Borrower or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Borrower consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other business combination), (E) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Borrower, or (F) the Borrower effects any reclassification of the Common Stock or any merger or voluntary or compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental  Transaction"), this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to convert into such number and kind of shares or other securities and property as would have been issuable or distributable on account of such Fundamental Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental Transaction.  The foregoing provision shall similarly apply to successive Fundamental Transactions of a similar nature by any such successor or purchaser.  Without limiting the generality of the foregoing, the anti-dilution provisions of this Section shall apply to such securities of such successor or purchaser after any such Fundamental Transaction.

  

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B.           Reclassification, etc.  If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

 

C.           Stock Splits, Combinations and Dividends.  If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

 

D.           Fundamental Transaction.   In the event the Borrower undergoes a Fundamental Transaction, as a condition thereof, Borrower covenants and agrees to cause the surviving entity to such transaction to assume the obligations under this Note, including the right to convert the outstanding Principal and Interest hereon into common stock of the company into which shares of the Common Stock of Borrower are exchanged or issues at the Fixed Conversion Price and upon the closing of such Fundamental Transaction, and as a condition thereof, such company shall assume the obligations of Borrower as if named as Borrower herein.

(d)           Whenever the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower shall promptly mail to the Holder a notice setting forth the Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

(e)           During the period the conversion right exists, Borrower will reserve from its authorized and unissued Common Stock not less than an amount of Common Stock equal to 120% of the amount of shares of Common Stock issuable upon the full conversion of this Note.  Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.  Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

2.2           Method of Conversion.  This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof.  Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

2.3.           Maximum Conversion.  The Holder shall not be entitled to convert on a Conversion Date that amount of the Note in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock issuable in connection with the unconverted portion of the Note, and (iii) the number of shares of Common Stock issuable upon the conversion of the Note with respect to which the determination of this provision is being made on a Conversion Date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock of the Borrower on such Conversion Date.  For the purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to the foregoing, the Holder shall not be limited to aggregate conversions of 4.99%.  The Holder shall have the authority and obligation to determine whether the restriction contained in this Section 2.3 will limit any conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which portion of the Notes are convertible shall be the responsibility and obligation of the Holder.

  

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2.4           Registration Rights. The Borrower shall grant to the Holder or its assignees, for any shares of Common Stock issued pursuant to this Note, piggyback registration rights, on Form S-3, Form SB-2, S-1 or such other form as may be applicable pursuant to the Securities Act of 1933 as amended in accordance with the terms set forth below.  Except as provided herein, the Borrower shall pay all expenses in connection with all registration of shares of the Common Stock. Notwithstanding the foregoing, each of the Borrower and the Holder shall be responsible for its own internal administrative and similar costs, which shall not constitute registration expenses.

ARTICLE III

EVENT OF DEFAULT

The occurrence of any of the following events of default ("Event of Default") shall, at the option of the Holder hereof, make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment, or grace period, all of which hereby are expressly waived, except as set forth below:

3.1           Failure to Pay Principal or Interest.  The Borrower fails to pay any installment of principal, interest or other sum due under this Note when due.

3.2           Breach of Covenant.  The Borrower breaches any material covenant or other term or condition of this Note in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.

3.3           Breach of Representations and Warranties.  Any material representation or warranty of the Borrower made herein, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made.

3.4           Liquidation.   Any dissolution, liquidation or winding up of Borrower or any substantial portion of its business.

 

3.5           Cessation of Operations.   Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due.

 

3.6           Receiver or Trustee.  The Borrower or any Subsidiary of Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

3.7           Judgments.  Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for more than $500,000, unless stayed vacated or satisfied within thirty (30) days.

3.8           Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower.

3.9           Reservation Default.   Failure by the Borrower to have reserved for issuance upon conversion of the Note the number of shares of Common Stock as required in this Note.

ARTICLE IV

SECURITY INTEREST

4.1 Security Interest.  Borrower hereby assigns, pledges, transfers and grants to Holder a first priority lien on and continuing security interest in all of the Borrower's assets listed on Exhibit A hereto (collectively hereinafter referred to as the “Collateral”).  Borrower shall execute such documents as may be reasonably required by Holder to perfect its security interest in the Collateral (including, without limitation, a financing statement and security agreement).  This Promissory Note shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the payment in full of amounts due hereunder, (b) be binding upon Borrower and its successors and assigns and (c) inure to the benefit of the Holder and its successors, transferees and assigns.  In the Event of an uncured Default, Holder shall have all of the rights and remedies of a secured party under the Uniform Commercial Code as in effect in the State of Florida.  Upon the payment in full of amounts due hereunder, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to Borrower.  Upon any such termination, the Holder will execute and deliver to Borrower such documents as Borrower shall reasonably request to evidence such termination.  Notwithstanding anything to the contrary, Borrower hereby pledges to the Holder, and creates in the Holder for its benefit, a first priority security interest for such time until all of the obligations are paid in full, in and to all of the property and assets of the Borrower including but not limited to all of the property and assets as set forth in Exhibit “A” attached hereto, whether presently owned or existing or hereafter acquired or coming into existence, and all additions and accessions thereto and all substitutions and replacements thereof (collectively, the “Pledged Property”).

  

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4.2   Waiver of Automatic Stay. The Borrower acknowledges and agrees that should a proceeding under any bankruptcy or insolvency law be commenced by or against the Borrower, or if any of the Collateral should become the subject of any bankruptcy or insolvency proceeding, then the Holder should be entitled to, among other relief to which the Holder may be entitled under hereunder and/or applicable law, an order from the court granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section 362 to permit the Holder to exercise all of its rights and remedies pursuant to this Note and/or applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362.  FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THIS NOTE AND/OR APPLICABLE LAW.  The Borrower hereby consents to any motion for relief from stay that may be filed by the Holder in any bankruptcy or insolvency proceeding initiated by or against the Borrower and, further, agrees not to file any opposition to any motion for relief from stay filed by the Holder.  The Borrower represents, acknowledges and agrees that this waiver is knowingly, intelligently and voluntarily made, that neither the Holder nor any person acting on behalf of the Holder has made any representations to induce this waiver, that the Borrower has been represented (or has had the opportunity to he represented) in the signing of this Note and in the making of this waiver by independent legal counsel selected by the Borrower and that the Borrower has discussed this waiver with counsel.

ARTICLE V

MISCELLANEOUS

5.1           Failure or Indulgence Not Waiver.  No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

5.2           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the first business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be: (i) if to the Borrower to: Car Charging Group, Inc., Michael Farkas, CEO, 1691 Michigan Avenue, Suite 601, Miami Beach, FL  33139, facsimile: (305) 521-0201, with a copy by fax only to: Greg Jaclin, Esq., Anslow + Jaclin, LLP, (732) 577-1188 and (ii) if to the Holder, to the name, address and facsimile number set forth on the front page of this Note.

 

  

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5.3           Amendment Provision.  The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.  This Note may only be amended or modified by a written document signed by Borrower and Holder.

 

5.4           Assignability.  This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.  The Borrower may not assign its obligations under this Note except as required in connection with a Fundamental Transaction or upon the prior written consent of Holder.

 

5.5           Cost of Collection.  If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

 

5.6           Governing Law, Venue, Waiver of Jury Trial.  This Note shall be governed by and construed in accordance with the laws of the State of Florida without regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement must be brought only in the civil or state courts of Florida or in the federal courts located in the State of Florida, County of Miami-Dade.  Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the Holder.  THE HOLDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE, ANY OTHER CONTRACT OR INSTRUMENT DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

5.7           Maximum Payments.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum rate permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum rate permitted by applicable law, any payments in excess of such maximum rate shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

5.8           Non-Business Days.   Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of Florida, such payment may be due or action shall be required on the next succeeding business day and, for such payment, such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

 

5.9           Redemption.  This Note may not be redeemed or called without the consent of the Holder except as described in this Note.

  

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5.10           Shareholders, Officers and Directors Not Liable.  In no event shall any shareholder, officer or director of Borrower be liable for any amounts due or payable pursuant to this Note.

5.11           Shareholder Status.  The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note.  However, the Holder will have the rights of a shareholder of the Borrower with respect to the Shares of Common Stock to be received after delivery by the Holder of a Conversion Notice to the Borrower.

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the date and year first above written.

CAR CHARGING GROUP, INC.

By: ________________________________

       Michael D. Farkas, Chief Executive Officer

 

  

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Exhibit A

DEFINITION OF COLLATERAL

 

For the purpose of securing prompt and complete payment and performance by the Borrower (hereinafter the “Company”) of all of the obligations under the Note, the Company unconditionally and irrevocably hereby grants to the Holder (hereinafter the “Secured Party”) a continuing first priority security interest in and to, and lien upon, the following pledged property of the Company:

 

 

 1 all cash, negotiable instruments, escrow funds, bank accounts, assets of all subsidiaries, shares of stocks of all subsidiaries, contract rights,  prepaid expenses and claims;

 

 (b) all goods of the Company, including, without limitation, machinery, equipment, computer, furniture, furnishings, fixtures, signs, lights, tools, parts, supplies and motor vehicles of every kind and description, now or hereafter owned by the Company or in which the Company may have or may hereafter acquire any interest, and all replacements, additions, accessions, substitutions and proceeds thereof, arising from the sale or disposition thereof, and where applicable, the proceeds of insurance and of any tort claims involving any of the foregoing;

 

 (c) all inventory of the Company, including, but not limited to, all goods, wares, merchandise, parts, supplies, finished products, other tangible personal property, including such inventory as is temporarily out of Company’s custody or possession and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing;

 

 (d) all contract rights and general intangibles of the Company, including, without limitation, goodwill, trademarks, trade styles, trade names, leasehold interests, partnership or joint venture interests, patents and patent applications, copyrights, deposit accounts whether now owned or hereafter created;

 

 (e) all documents, warehouse receipts, instruments and chattel paper of the Company whether now owned or hereafter created, including without limitation all files, records, books of account, business papers and computer programs;

 

 (f) all accounts and other receivables, instruments or other forms of obligations and rights to payment of the Company (herein collectively referred to as “Accounts”), together with the proceeds thereof, all goods represented by such Accounts and all such goods that may be returned by the Company’s customers, and all proceeds of any insurance thereon, and all guarantees, securities and liens which the Company may hold for the payment of any such Accounts including, without limitation, all rights of stoppage in transit, replevin and reclamation and as an unpaid vendor and/or lienor, all of which the Company represents and warrants will be bona fide and existing obligations of its respective customers, arising out of the sale of goods by the Company in the ordinary course of business;

 

 (g) to the extent assignable, all of the Company’s rights under all present and future authorizations, permits, licenses and franchises issued or granted in connection with the operations of any of its facilities; and

 

 (h) all products and proceeds (including, without limitation, insurance proceeds) from the above-described Pledged Property.

 

  

  

  

NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)

The undersigned hereby elects to convert $_________ of the principal and $_________ of the interest due on the Note issued by CAR CHARGING GROUP, INC. on __________ into Shares of Common Stock of CAR CHARGING GROUP, INC. (the “Borrower”) according to the conditions set forth in such Note, as of the date written below.

Date of Conversion:____________________________________________________________________

Conversion Price:______________________________________________________________________

Number of Shares of Common Stock Beneficially Owned on the Conversion Date: Less than 5% of the outstanding Common Stock of CAR CHARGING GROUP, INC.

Shares To Be Delivered:_________________________________________________________________

Signature:___________________________________________________________________________

Print Name:_________________________________________________________________________

Address:   ____________________________________________________________________________

   ____________________________________________________________________________Unassociated Document

Exhibit 10.21

 

PATENT LICENSE AGREEMENT

THIS PATENT LICENSE AGREEMENT (the “Agreement”) is made this 29th day of March, 2012 (the “Effective Date”) by and between Michael D. Farkas, an individual with a mailing address of 1691 Michigan Avenue, Suite 425, Miami Beach, FL  33139 and Balance Holdings, LLC, a Florida limited liability company with a mailing address of 1691 Michigan Avenue, Suite 425, Miami Beach, FL  33139 (collectively called “Licensor”) and Car Charging Group, Inc., a Nevada corporation with a mailing address of 1691 Michigan Avenue, Suite 601, Miami Beach, FL  33139 (called “Licensee”).

WHEREAS, Licensor owns all right, title and interest in and to the Patent Rights (as defined below); and

WHEREAS, Licensee desires to gain rights under the Patent Rights and to commercialize products and services covered by the Patent Rights; and

WHEREAS, Licensor is willing to grant and Licensee accepts a license under the Patent Rights in accordance with the terms and conditions set forth in this Agreement.

NOW THEREFOR, in consideration of the mutual covenants herein contained and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

	
1.

	
DEFINITIONS IN THIS AGREEMENT.

	
  

	
1.1.

	
“Patent Rights” means:

1.1.1.     U.S. Provisional Patent Application 61529016, any continuations, divisions, re-issues, re-examinations and extensions thereof and corresponding patents and applications in the U.S. or other countries.

1.1.2.     U.S. Provisional Patent Application 61529022, any continuations, divisions, re-issues, re-examinations and extensions thereof and corresponding patents and applications in the U.S. or other countries.

1.2.   “Licensed Process” means any process covered by a claim of the Patent Rights or a claim of any other patent rights licensed under this Agreement. A Licensed Process also includes the provision of any service using a Licensed Product.

1.3.   “Licensed Product” means any article, kit, equipment, system, unit, product or component part covered by a claim of the Patent Rights or a claim of any other patent rights licensed under this Agreement.

1.4.   “Affiliate” is a corporation of which more than 20% of the voting shares are owned by a party, or which owns more than 20% of the voting shares of a party, or of which more than 50% of the voting shares are owned by another Affiliate or if it owns more than 50% of another Affiliate.

	
2.

	
GRANT OF LICENSE.

2.1.   Grant: Licensor grants Licensee an unlimited, world-wide, exclusive license under the Patent Rights, to make, have made, use, sell, offer for sale, import and export Licensed Products and to practice Licensed Processes, subject to the following and to the terms and conditions outlined in this Agreement.

 

2.2.   Sublicensing: Licensee may grant sublicense rights only as follows:

2.2.1.     If a sublicense is required for use of the Licensed Product or Process acquired by an end-user from Licensee, then Licensee may grant the end-user a sublicense restricted to use of Licensed Product or Process only.  Such a sublicense to an end-user shall continue for the life of the Licensed Product or Process or the life of the Patent Rights or any other patent rights which are licensed hereunder, whichever is shorter. The end-user sublicense will continue despite early termination of this Agreement. An end-user shall not have the right to further sublicense any Patent Rights under this Agreement to any other third party.

 

 

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2.2.2.     Licensee may grant a sublicense to an Affiliate of Licensee provided that Licensee gives written notice to Licensor of such sublicense.  A sublicense granted to an Affiliate will terminate on the earlier of (i) termination of this Agreement or (ii) whenever the sub-licensee ceases to be an Affiliate.

3.     LICENSE FEES, ROYALTIES AND TAXES. Licensee agrees to pay royalties to Licensor (in such percentages as Licensor may direct in writing from time to time) equal to Ten Percent (10%) of the Gross Profits received by Licensee from the bona fide commercial sales and/or use of the Licensed Products and Licensed Processes (“Royalty Payments”).

3.1.   Accounting and Timing of Royalty Payments. Upon making each Royalty Payment, Licensee shall provide Licensor with a summary of the accounting used to determine the amount of Royalty Payment due.  Royalty Payments shall be made by wire transfer and shall be computed on Gross Profits received by the Licensee by the reporting close of each calendar quarter and distributed and paid to Licensor and on a quarterly basis, on or before the expiration of forty-five (45) days after the reporting close of each prior calendar quarter.

3.2.   Failure to Pay by Licensee. Should Licensee fail to make any payments as required herein, and should the Licensee fail to cure the breach created thereby within thirty (30) days of notice by Licensor, any and all rights, title and ownership to the Patent Rights provided to the Licensee under this Agreement shall be forfeited and any and all such  rights, title and ownership to the Patent Rights shall, upon notice of the failure to cure the breach, immediately revert to Licensor, and all monies paid by Licensee until such date shall be retained without forfeiture.

 

3.3.   For the purpose of this Agreement, “Gross Profits” shall mean total gross revenues less any discounts, manufacturing costs, rebates, shipping costs, handling costs, transportation insurance costs, installation costs, marketing and sales costs, applicable taxes, importation fees, and duties on any and all Licensed Products and/or Licensed Processes sold or used by the Licensee.

 

3.4.   Licensee hereby agrees to fund, at its sole cost and expense, the development, marketing and sale of the Licensed Products and Licensed Processes and the further registration of the Patent Rights, the Licensed Process and the Licensed Product.  Additionally, Licensee agrees it will develop, market and sell the Licensed Products and Licensed Processes under the name “EVCharge” and that it will take all steps reasonably necessary to maintain the URL and to secure and maintain the trademark rights and other intellectual property rights with regard to such name.

4.     TECHNICAL ASSISTANCE.  Licensor will provide technical assistance to Licensee or sublicensees relating to the use of Patent Rights.

5.     PUBLICITY.

5.1.   Announcements: Licensee shall have the right to make any public announcement regarding this Agreement or the terms hereof.

5.2.   Use of Licensor’s Name: Licensee shall have the right to use Licensor’s name, any abbreviations, words or images in its marketing and promotion of the Licensed Processes and Products.

6.     REPRESENTATIONS AND WARRANTIES OF LICENSOR.

6.1.   Licensor represents that it owns all rights to the Patent Rights that are necessary for granting a license pursuant to this Agreement.

6.2.   Licensor has not taken any action to encumber any of its right, title and interest in the Patent Rights;

6.3.   Licensor has not and shall not misappropriate the trade secrets or intellectual property rights of any other entities in its activities to develop the Patent Rights;

6.4.   Licensor is unaware of any activities by third parties that would constitute infringement of Patent Rights;

 

 

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6.5.   Licensor is not aware of any claims, judgments or settlements against or owed by Licensor and has not received notice of any pending or threatened claims or litigation relating to the Patent Rights or the use thereof.

6.6.   Licensor has not entered, and will not enter, into any agreement with any third party that is in conflict with the rights granted to the other party under this Agreement, and has not taken and will not take any action that would in any way prevent it from granting the rights granted to the other party under this Agreement, or that would otherwise materially conflict with or adversely affect the rights granted to the other party under this Agreement; and

6.7.   Licensor’s performance and execution of this Agreement will not result in a breach of any other contract to which it is a party.

7.     Protection of Intellectual Property Rights.

7.1.   Prosecution and Maintenance. Licensor shall have the sole right, at its sole expense, to prepare, file, prosecute and maintain any patents, copyrights or trademarks relating to the Patent Rights.

7.2.   Enforcement.  Each party shall promptly inform the other if it becomes aware of any actions by any third party which might reasonably be expected to constitute misappropriation or unauthorized use or disclosure of the Patent Rights. All parties shall reasonably co-operate to prevent such misappropriation or unauthorized use of the Patent Rights by a third party.  Licensor shall retain full ownership and title to the Patent Rights and shall use its best efforts to preserve and maintain such ownership and title. Licensor shall bear all litigation costs incurred hereunder in the protection and enforcement of the rights relating to the ownership and exploitation of the Patent Rights.

7.3.   Licensee Right to Take Action.  In the event Licensor fails to adequately protect the rights relating to the ownership and exploitation of the Patent Rights, Licensee shall have the right, but not the obligation, to take such measures as it may deem necessary to protect and enforce such rights.  Licensor shall promptly reimburse Licensee for any costs incurred in such protection and enforcement.

7.4.   Preservation.  During the term of this Agreement, the Licensee shall use commercially reasonable efforts to preserve the goodwill associated with the Patent Rights.

8.     DURATION AND TERMINATION. This Agreement shall be effective as of the Effective Date listed in the preamble of this Agreement.  The rights and obligations of this Agreement shall remain in effect until expiration of the last patent licensed under this Agreement, or termination by either party upon notice to the other party following the continuing breach of an obligation or requirement for thirty (30) days after notice of such breach is given.

9.     GENERAL TERMS AND CONDITIONS.

9.1.   Prior Agreement. This Agreement supersedes all prior communications, negotiations and agreements, written or oral, concerning the same subject matter.

9.2.   Entire Agreement. This Agreement represents the entire Agreement between the parties as of the effective date hereof and may only be subsequently altered or modified by an instrument in writing, signed by the parties, which expressly states the intention of affecting this Agreement.

9.3.   Waiver. A failure by any of the parties to assert rights arising from any breach or default of this Agreement shall not be regarded as a waiver of rights. No waiver or toleration implies any continuing or future waiver of rights.

9.4.   Information and Materials. Each party will provide to the other party such information and materials as the parties mutually agree to be necessary or useful to carry out the activities contemplated by this Agreement.

9.5.   Assignment. This Agreement and everything herein contained shall inure to the benefit of and be binding upon the successors and permitted assignees of the parties hereto, but shall not be assigned, sub-licensed, transferred, conveyed, or encumbered by Licensee or Licensor except to the extent otherwise herein expressly provided.

 

 

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9.6.   Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be construed in accordance with and governed by the laws of the State of Florida without regard to its conflicts of laws principles.  Any suit involving any dispute or matter arising under this Agreement may only be brought in State court of Miami-Dade County, Florida which shall have jurisdiction over the subject matter of the dispute or matter.  The parties irrevocably and unconditionally submit to the personal jurisdiction of such courts and agree to take any and all future action necessary to submit to the jurisdiction of such courts. The parties irrevocably waive any objection that they now have or hereafter may have to the laying of venue of any suit, action or proceeding brought in any such court and further irrevocably waive any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Final judgment against either party in any such suit shall be conclusive and may be enforced in other jurisdictions by suit on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and the amount of any liability of the party therein described, or by appropriate proceedings under any applicable treaty or otherwise.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER AGREEMENT OR INSTRUMENT DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

9.7.   Severability. Should any one or more of the provisions of this Agreement be held invalid or unenforceable by a court of competent jurisdiction, it shall be considered severed from this Agreement and shall not serve to invalidate the remaining provisions thereof. The parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by them when entering this Agreement may be realized. If the parties fail to reach a modified agreement within sixty (60) days after the relevant provision is held invalid or unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in Section 9.5.

9.8.   Notices. Any notices required by this Agreement shall be in writing, shall specifically refer to this Agreement and shall be sent by registered or certified airmail, postage prepaid, or by telefax, telex or cable, charges prepaid, or by overnight courier, postage prepaid and shall be forwarded to the respective addresses set forth in the first paragraph of this Agreement.  Notice shall be deemed delivered upon the earlier of (a) when received, (b) three (3) days after deposit into the mail, or (c) the date notice is sent via telefax, telex or cable, (d)the day immediately following delivery to overnight courier (except Sunday and holidays).

9.9.   Counterparts.  This Agreement may  be  executed   in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same agreement.

 

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IN WITNESS WHEREOF, the parties hereto have each caused this License Agreement to be executed by their duly-authorized representatives as of the Effective Date.

 

	 	
LICENSOR:

	 
	 	 	 
	 	

BALANCE HOLDINGS, LLC

By: The Farkas Group, Inc., its Manager

	 
	 	 	 	 
	 	
By: 

	/s/ Michael D. Farkas	 
	 	Michael D. Farkas, President	 
	 	 	 	 
	 	 	/s/ Michael D. Farkas	 
	 	

Michael D. Farkas, individually

	 

	 	

LICENSEE:

	 
	 	 	 
	 	

CAR CHARGING GROUP, INC.

	 
	 	 	 	 
	 	
By: 

	/s/ Andy Kinard	 
	 	

Andy Kinard, President

	 

 

 

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FIRSTADDENDUM TO

PATENT LICENSE AGREEMENT

This is the first addendum (this “Addendum”) to that certain Patent License Agreement (the “Agreement”) dated March 29, 2012 by and among Michael D. Farkas and Balance Holdings, LLC (collectively, “Licensor”) and Car Charging Group, Inc. (“Licensee”)

The parties make the following modifications to the Agreement:

1.         Modification.  Section 7.1 shall be deleted in its entirety and shall be replaced with the following:

7.1      Prosecution and Maintenance.  In consideration of Licensor’s exclusive license grant hereunder, Licensee may, in its sole discretion and at its sole cost and expense, prepare and maintain any patents, copyrights or trademarks relating to the Patent Rights.  The foregoing notwithstanding, Licensor shall retain ownership of all Patent Rights and shall be listed as owner on any application filed pursuant to this Section.

2.         Choice of Law, Jurisdiction and Venue.  This Addendum and the Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Florida.  The parties agree that Florida will be the venue of any dispute and will have jurisdiction over all parties.

3.         Conflicts.  In the event there is a conflict between the provisions of this Addendum and the Agreement, the terms stated in this Addendum shall prevail.  Any terms and conditions stated in the Agreement that remain unchanged by the terms of this Addendum shall remain in full force and effect.

4.         Counterparts.  This Addendum may be executed in any number of counterparts, including facsimile and scanned versions, each of which when so executed shall be deemed an original and all of which shall constitute together one and the same instrument, and shall be effective upon execution by all of the parties.

5.         Binding.  This Addendum shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.

IN WITNESS WHEREOF, the parties have executed this Second Addendum to Investor Relations Consulting Agreement on September 14, 2012.

 

	
BALANCE HOLDINGS, LLC

	 	
CAR CHARGING GROUP, INC.

	 
	 	 	 	 
	
/s/ Michael D. Farkas

	 	
/s/ Andy Kinard

	 
	
Michael D. Farkas, Manager

	 	
Andy Kinard, President

	 
	 	 	 	 
	
/s/ Michael D. Farkas

	 	 	 
	
Michael D. Farkas, Individually

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