Exhibit 10.1
T3 MOTION, INC. DISTRIBUTION AGREEMENT
     THIS AGREEMENT (the “Agreement”) is made this 19th Day of March, 2009 (the
“Effective Date”), by and between T3 Motion, Inc., a Delaware corporation (“T3
Motion”), and Spear International, LTD. a company incorporated under the laws of
the Bahamas (“Distributor”). T3 Motion and the Distributor are sometimes
referred to herein as a “Party” or collectively as the “Parties.” The Parties
agree as follows:
     WHEREAS, T3 Motion is engaged in the business of providing a state of the
art personal mobility vehicle and ancillary related goods (the “Products”), as
described in Exhibit A;
     WHEREAS, Distributor desires to purchase, promote, market, sell, and
distribute the Product in a specified geographic area; and
     WHEREAS, T3 Motion wishes to obtain the services of Distributor to act as
an authorized representative of T3 Motion for the purpose of promoting, selling
and distributing the Product in the specified geographic area.
NOW THEREFORE, in consideration of the promises and of the mutual agreements and
understandings below, the Parties agree as follows:
1.0 APPOINTMENT OF DISTRIBUTOR AND LICENSES GRANTED
1.1 Exclusive Appointment.
          (a) T3 Motion appoints Distributor as its exclusive distributor in the
sales territory as defined in Exhibit B (the “Exclusive Territory”) and as a
non-exclusive distributor in the sales territory defined in Exhibit B (the
“Non-Exclusive Territory,” and together with the Exclusive Territories, the
“Territory”), and Distributor accepts such appointment. Distributor has the
exclusive, non-transferable right (subject to the Distributor’s assignment
rights as set forth in Section 12h and the Distributor’s right to appoint
Dealers and sub-distributors as set forth in Section 4.9) and license to
promote, market, sell, and distribute the Products within the Territory during
the Initial Term and any subsequent Renewal Term(s) (as defined in Section 10.1)
to commercial, governmental or other organizational end user markets (i.e.,
Government, Military, and Law Enforcement, only sales can only be made to
commercial or professional end users) as well as high net worth individuals as
set forth within the Territories defined in Exhibit B.
          (b) Distributor agrees that its status as an exclusive T3 Motion
Distributor in the Exclusive Territory depends upon its meeting, and continuing
to meet, standards of performance described herein, including minimum sales
requirements, as set forth in Exhibit C attached. During the Term of this
Agreement, without the Distributor’s prior written consent, T3 Motion shall not
appoint any other distributors in the Exclusive Territory other than the
Distributor and

 

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will not allow any other person or entity to provide T3 products and/or services
in the Exclusive Territory other than the Distributor, other than in accordance
with the provisions of Article 10.9 of this Agreement.
1.2 Restrictions.
          (a) Distributor shall not seek customers for the Products outside the
Territory nor establish or maintain any authorized branch or distribution center
outside the Territory without T3 Motion’s prior written consent. Distributor
shall not solicit orders from any prospective purchaser with its principal place
of business located outside the Territory. If Distributor receives any order
from a prospective purchaser whose principal place of business is located
outside the Territory, Distributor shall immediately refer that order to T3
Motion. Distributor shall not accept any such orders. Distributor may not
deliver or tender (or cause to be delivered or tendered) any Product outside of
the Territory. Distributor shall not sell any Products to a purchaser if
Distributor knows or has reason to believe that such purchaser intends to remove
those Products from the Territory. Distributor may resell the Products to, any
other distributor of T3 Motion or any other provider of T3 products and services
both in and outside of the assigned exclusive Territory (with the exception of
North America) with T3’s prior written consent. Distributor will provide repair
and maintenance services for any sale made by distributor outside of its defined
Territory.
          (b) Except as provided in this Section 1.2(b), Distributor may alter,
modify, or otherwise make changes to the Product as long as the changes do not
alter the machinery of the product. Distributor may only install additional
electronic or mechanical assemblies onto the Product with prior written approval
by T3 Motion. Distributor may also install sales decals and install additional
aftermarket lighting or customer requested paint and graphics only with T3
Motion’s prior written consent, which may not be unreasonably withheld.
Distributor specifically acknowledges and agrees to purchase and distribute all
Products as received without any alterations to the T3 Motion branding.
1.3 Limited Trademark License.
          (a) Distributor is authorized to use the T3 Motion trademarks, service
marks and trade names (the “Marks”) as identified in Exhibit C under the terms
and conditions contained therein, solely in connection with the promotion, sale
and marketing of the Product. Any unauthorized use or misuse of the Marks or any
use which is not in compliance with T3 Motion’s procedures is a breach of this
Agreement. The Marks are and shall remain the exclusive property of T3 Motion.
T3 Motion grants Distributor only a limited license to reproduce the Marks to
promote and market the Product during the Initial Term and any Renewal Term(s).
All Logos and markings are to remain on the Product as it is shipped by T3
Motion. Alteration(s) to any Product must receive prior approval from T3 Motion.
Any such use of a Mark by Distributor must correctly attribute ownership of such
mark to T3 Motion and must be in accordance with applicable law and T3 Motion’s
then-current trademark usage guidelines. Distributor will not remove or obscure
any Marks on or in the Products.
Distributor agrees that nothing in this Agreement gives it any right, title or
interest in the Marks (except the right to use the Marks in accordance with the
terms of this Agreement), and that the

 

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Marks are the sole property of T3 Motion and its affiliates. Distributor shall
not contest the validity or ownership of the Marks or T3 Motion’s right to
license the Marks. Distributor agrees that any and all uses by Distributor of
the Marks and the goodwill arising therefore shall be limited to the
identification of Distributor as an authorized Distributor of Products.
Distributor will not seek to register, re-register, assert claim to ownership
of, license or allow others to use, or otherwise appropriate to itself any of
the Marks or any mark or name confusingly similar thereto, or the goodwill
symbolized by any of the foregoing without obtaining the prior written approval
of T3 Motion. Distributor will at no time contest or aid in contesting the
validity of ownership of any Mark or take any action in derogation of T3
Motion’s rights herein, including, without limitation, selling any product or
applying to register any trademark, trade name or other designation that is
confusingly similar to any Mark.
          (b) The obligations undertaken by Distributor pursuant to this Section
shall survive termination of this Agreement, and in the event of such
termination, Distributor agrees not to register or use any trademarks or trade
names that are the same as, or confusingly similar to, the Marks both within and
outside of the Territory.
          (c) Distributor shall promptly notify T3 Motion of any and all
infringements of the Intellectual Property pertaining to the Products that may
come to Distributor’s attention and shall assist T3 Motion in taking such action
against said infringements as T3 Motion, in its sole discretion, may decide. All
expenses and costs of such legal action, including those of Distributor to the
extent requested by T3 Motion, shall be paid by T3 Motion.
1.4 No Solicitation of Other Parties.
          (a) During the term of this Agreement, T3 Motion will not
intentionally target Distributor’s customers and/or their affiliates (the
Distributor’s Customers”), nor knowingly solicit Distributor’s Customers nor
knowingly sell any products or services to Distributor’s Customers in any manner
whatsoever. The term Distributor’s Customers shall include any person or entity
to whom the Distributor has sold products or services to, introduced T3 Motion’s
products or services to and/or provided Product marketing and/or sales materials
to, within the Territory. Distributor will not intentionally target T3 Motion’s
Customers, nor knowingly solicit T3 Motion’s Customers on the basis of any
information that T3 Motion may provide, or which Distributor may naturally
acquire through the relationship of the Parties.
1.5 Relationship between Parties.
          (a) The relationship between T3 Motion and Distributor is that of
independent contractor and under no circumstance shall any of the employees of
one Party be deemed to be the employees of the other. This Agreement shall not
be construed as authority for either Party to act for the other Party in any
agency or other capacity or to make commitments of any kind for the account of,
or on behalf of, the other Party, except to the extent, and for the purposes of,
expressly provided herein. Each Party acknowledges that it is not, and shall not
hold itself out as, a joint venture, franchisee, partner or employee of the
other Party. The relationship created by this

 

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Agreement is not intended by the Parties to constitute the granting of a
franchise to Distributor by T3 Motion. The Agreement will serve as a license to
resell T3 Motion’s products and service. Distributor expressly acknowledges and
confirms that it has not paid and will not pay any fee to T3 Motion in
connection with this Agreement and that none of the terms, conditions or amounts
provided for in this Agreement can be characterized to constitute such a fee.
1.6 Competition. Distributor shall not directly sell, contract to sell or
arrange for the sale of any products that compete with the Products. (as defined
by exhibit A). T3 understands and agrees that the Distributor may engage
sub-dealers and/or sub-distributors that sell products that may compete with the
Products. The Distributor shall not share in any profits derived by such dealers
and/or sub-distributors from the sale of products competing with the Products.
2.0 PURCHASE AND RESALE OF PRODUCTS AND SERVICES
2.1 Sale of Products.
          (a) Distributor shall purchase the Products from T3 Motion and shall
re-sell the Products to Distributor’s Customers subject to all applicable T3
Motion tariffs, if any, now or hereafter filed with federal and/or state
authorities (“T3 Motion Tariffs”). T3 Motion shall have no obligation to pay any
taxes on the sale of the Products in the Territory and Distributor agrees to
indemnify and reimburse T3 Motion for any such taxes imposed on T3 Motion by any
Governmental Entity. “Governmental Entity” shall mean any federal, state, local,
international, foreign, or any other court of competent jurisdiction,
legislature, governmental agency, administrative agency or commission or other
governmental authority or instrumentality. The Distributor shall order from T3
Motion, and T3 Motion shall sell to Distributor, Products at the rates described
in Exhibit A. T3 Motion agrees to work with Distributor to help facilitate
achieving the minimum tax and duties. (IE: Help define the proper harmonized
codes to ensure the lowest taxes and duties upon import into sales territory.)
2.2 No Proprietary Interest.
          (a) Neither Distributor nor any of Distributor’s Customers shall
acquire any proprietary interest in any of the Products, which shall remain T3
Motion’s property. Any improvements, modifications or changes made to the
Products, either by Distributor or Distributor’s Customers shall be assigned to
T3 Motion and be the proprietary interest of T3 Motion.
2.3 Prices and Payment.
     (a) On the Effective Date, Distributor shall provide to T3 Motion a
forecast for the next three calendar months of Distributor’s anticipated
requirements of the Products and indicating the desired delivery dates.
Distributor shall update this forecast on a rolling basis from month to month.
Each update to the forecast will be due by the close of business at the end of
the first week of each month. Distributor shall thereafter from time to time
place firm orders with T3 Motion upon receipt of orders from the Distributor’s
clients.

  i.   Payment and Blanket Purchase Order Call off process

 

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  1.   Distributor places a Blanket Purchase order for the full contract volume.
    2.   Distributor submitted a monthly forecast with a rolling 90 day window
of visibility.     3.   Distributor submits a release to the Blanket Purchase
order (Order call off) _for the next 30 days of volume of product the
Distributor would like released for shipment. As the lead time of product is
30 days after receipt of call of and it would be required to meet shipment lead
time.     4.   Either an irrevocable bank letter of credit (or equivalent) or
process a wire transfer prior to shipment.     5.   Payment for products would
be made prior to shipment as defined in Exhibit A.

     (b) Distributor shall order Products from T3 Motion by submitting a firm
written order call off to a blanket purchase order in the form attached hereto
as Exhibit E (“Blanket Purchase Order and Order Release/Call Off”), identifying
the Products ordered, requested delivery date(s) and any export/import
information required to enable T3 Motion to fill the order. All orders for
Products are subject to acceptance by T3 Motion at 2990 Airway, Suite B, Costa
Mesa, 92626, telephone: (714) 619-3600.
     T3 Motion shall have no liability to Distributor with respect to purchase
orders which are not accepted; provided, however, that T3 Motion will not
unreasonably reject any purchase order for Products which does not require any
modifications or additions in order to meet the specifications of Distributor or
its customers.
     (c) If a Firm Purchase Order Call Off is accepted in accordance with
Section 2.3(b) above, the prices for Products covered by such Firm Purchase
Order Call Off shall be T3 Motion’s net distributor prices Exworks for the place
of origin specified in a Firm Purchase Order Call Off which are in effect on the
date of T3 Motion’s acceptance. T3 Motion may from time to time change those
prices provided such changes are directly related to actual changes in freight
costs, as freight and transportations costs are Distributors responsibility,
such change being effective immediately upon Distributor’s receipt of notice
thereof; provided, however, that no price change shall affect Firm Purchase
Order Call Offs offered by Distributor and accepted by T3 Motion prior to the
date such price change becomes effective. Products price may only change if
mutually agreed upon by both parties. Risk of loss and damage shall be as set
forth in Section 2 (h) below and T3 shall arrange for delivery of Products to
the place of delivery designated in the Firm Purchase Order Call Off at
Distributor’s expense as set forth above.
     (d) Distributor shall be free to establish its own pricing for Products
sold. Distributor shall notify T3 Motion of its pricing, as in effect from time
to time.
     (e) The ultimate shipment of orders to Distributor shall be subject to the
right and ability of T3 Motion to make such sales and obtain required licenses
and permits, under all decrees, statutes, rules and regulations of the
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instrumentalities thereof presently in effect or which may be in effect
hereafter, in particular, but without limitation, legislation pertaining to
International Traffic-in-Arms and other export controls. T3 has obtained all
permits and licenses necessary to sell the Products to the Distributor for
delivery in the Territories. See Exhibit F
     (f) Distributor hereby agrees: (i) to assist T3 Motion in obtaining any
such required licenses or permits by supplying such documentation or information
as may be requested by T3 Motion; (ii) to comply with such decrees, statutes,
rules and regulations of the government of U.S. and agencies or
instrumentalities thereof; (iii) to maintain the necessary records to comply
with such decrees, statutes, rules and regulations; (iv) not to re-export any
Products except in compliance with such decrees, statutes, rules and
regulations; (v) to obtain all governmental approvals and licenses necessary to
import the Products into the Territory; (vi) not to sell, transfer or otherwise
dispose of the Products in violation of the export laws of U.S.; and (vii) to
indemnify and hold harmless T3 Motion from any and all fines, damages, losses,
costs and expenses (including reasonable attorneys’ fees) incurred by T3 Motion
as a result of any breach of this subsection by Distributor or any of
Distributor’s customers. (NOTE: Distribution business decision) See Exhibit F
     (g) Distributor hereby expressly acknowledges that the technical data and
the direct product thereof are subject to export controls of the U.S. and agrees
that neither the technical data nor the direct product thereof will be
transferred, directly or indirectly, to any destination contrary to the
requirements of the law of the U.S., including but not limited to the terms of
any export license and the terms of Part 774 (re-exports) of the U.S. Export
Administration Regulations. Further, Distributor hereby provides its assurance
that it will not participate in any transaction which may involve any commodity
or technical data, or the direct product thereof, exported or to be exported
from U.S., or in any re-export thereof, or in any other transaction that is
subject to export controls of U.S., if a person denied export privileges from
U.S. may obtain any benefit from or have any interest in, directly or
indirectly, these transactions. Distributor to determine. T3’s controls are
defined within Exhibit F.
     (h) Unless Distributor requests otherwise, all Products ordered by
Distributor shall be packed for shipment and storage in accordance with T3
Motion’s standard commercial practices. It is Distributor’s obligation to notify
T3 Motion of any special packaging requirements (which shall be at Distributor’s
expense). T3 Motion shall deliver Products into the possession of a common
carrier designated by Distributor, no later than the date specified for such
delivery on the relevant purchase order for such Products and no earlier than
the date three (3) days prior to such specified date. Risk of loss and damage to
a Product shall pass to Distributor upon the delivery of such Product to the
place of delivery designated in the Firm Purchase Order Call Off . All claims
for non-conforming shipments must be made in writing to T3 Motion within ten
days of the passing of risk of loss and damage, as described above. Any claims
not made within such period shall be deemed waived and released.
     (i) Products shall be purchased and sold hereunder on the terms and
conditions set forth in T3 Motion’s standard terms and conditions of sale
attached hereto as a Exhibit as a purchase order, as in effect at the time of
acceptance of the purchase order for such Products,

 

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except that in the event of any discrepancy between such terms and conditions
and this Agreement, the terms of this Agreement shall govern.
3.0 PAYMENT FOR PRODUCTS
3.1 T3 Charges.
          (a) Distributor shall promptly pay to T3 Motion all sums due (“T3
Charges”) for the Products, which amounts shall be calculated and paid as set
forth in Exhibit A. The schedule of T3 Charges provided in Exhibit A shall
remain in force during the Initial Term (defined as 3 years) of this Agreement.
Thereafter prices payable by the Distributor for the Products will be
renegotiated either upward or downward on an annual basis upon mutual agreement
of the parties. In the event that during the Term of this Agreement any
distributor, seller and/or provider of T3 Motion products outside of the United
States (“Other T3 Seller”), has the right to purchase Products from T3 Motion at
a price less than that of the Distributor, the Distributor’s price for the
Products shall be immediately and automatically reduced to the lowest price
charged to any such distributor, seller or provider for Products. Such reduced
price shall apply to all Products not yet delivered by T3 Motion under pending
orders and all future orders placed by the Distributor. The foregoing price
reductions shall not apply in the event that such Other T3 Seller has committed
to purchase in excess of 6,000 T3i Series Vehicles over a three year period.
4.0 DISTRIBUTOR’S OBLIGATIONS
4.1 Distributor Diligence.
          (a) Except as otherwise allowed under this Agreement, Distributor
shall solicit the Customers for Products for its own account and under its own
trade name(s) or under its affiliates’ accounts and names. Distributor agrees to
faithfully and diligently use its best efforts to sell, promote and support the
Products in the Territory by commercially reasonable means.
4.2 Ethical Conduct.
          (a) Distributor will conduct its business in an honest, professional
and ethical manner and will not willingly commit any act or omission to act
which adversely affects T3 Motion. Distributor will comply with the reasonable
requirements and practices established by T3 Motion for the processing of
service forms, credit applications, collections, fraud prevention, and all other
administrative functions.
          (b) Distributor will also: (i) conduct business in a manner that
reflects favorably at all times on the Products and the good name, goodwill and
reputation of T3 Motion; (ii) make no false or misleading representations or
advertisements with regard to T3 Motion or the Products; and (iii) make no
representations, warranties or guarantees to customers or to the trade with
respect to the specifications, features or capabilities of the Products that are
inconsistent with the literature distributed by T3 Motion.

 

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4.3 Unlawful Use.
          (a) Any attempt by Distributor to use Products for an unlawful purpose
will be a material breach of this Agreement. T3 Motion may, by written notice to
Distributor, require Distributor to cancel the right to use service of any
Distributor Customer using or attempting to use Products for an unlawful
purpose, and failure of Distributor to cancel such Distributor Customer’s
service shall be deemed a material breach of this Agreement.
4.4 Distributor Warranty to Customers.
          (a) Distributor is responsible for all warranties, expressed or
implied, with regard to any Products that differ from T3 Motion’s limited
warranty contained herein.
4.5 Distributor Responsibility.
          (a) Distributor is solely responsible for all risks and expenses
incurred in connection with its actions in the sale of the Products pursuant to
this Agreement including without limitation, all expenses of its office, if any,
and activities, and all acts and expenses of its personnel, employees,
subcontractors, agent and representatives in the Territory.
4.6 Compliance with Law.
          (a) In performing its duties hereunder, Distributor shall materially
comply with all applicable laws, rules and regulations of any Governmental
Entity, including, without limitation, those of the United States of America,
including its export and import laws and regulations, for Products and
commercially reasonable or legally required policies of T3 Motion communicated
to Distributor, which are now or hereafter in effect. Distributor shall have and
maintain all necessary permits or certificates required by any Governmental
Entity or agency necessary for the performance of its duties hereunder and the
conduct of its business, which may include the necessity of filing a separate
tariff to sell Products as a distributor thereof. T3 represents and warrants to
the Distributor that (i) no approvals, authorizations and/or consents are needed
from the United States Government and/or any agency thereof in order for T3
Motion to ship or deliver the Products to the Distributor in any of the
Territories and/or for the Distributor to sell any Products in the Territories
and (ii) to T3 Motion’s knowledge, the Distributor will not be required to file
any notice and/or other documents with the United States Government and/or any
agency thereof in order to have the Products shipped and/or delivered to the
Distributor in any of the Territories and/or for the Distributor to sell any
Products in the Territories.
4.7 Competition.
          (a) Distributor shall have the right to engage, conduct, assist,
encourage, participate or aid any other party in other form of business however,
Distributor shall not engage in any form of business that shall constitute a
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for sale by T3 Motion within the attached Territories and shall maintain in
strict confidence all information regarding T3 Motion and the Products and as
more fully defined under Section 9. Without limiting the generality of the
foregoing, neither Distributor nor any of its affiliates shall market, sell,
solicit, distribute any products or services that directly compete with T3
Motion’s existing T3i Series products (as defined by Exhibit A). The foregoing
restrictions shall not apply to any dealer or sub-distributor of the Distributor
so long as the Distributor does not share in profits derived by such dealer or
sub-distributors sale of products competing with the Products.
4.8 Maintenance of Regulatory Approvals, Licenses, and Certifications.
     (a) Distributor shall be fully responsible for obtaining all necessary
certification and registration for Distributor to sell the Products in the
Territory. Distributor will be solely responsible for maintaining all
obligations required as part of any regulatory approvals, licenses and
certifications at T3 Motion’s cost. Distributor shall also maintain in good
standing all necessary regulatory approvals, licenses, and certifications during
the term of this Agreement.
     (b) Distributor will be solely responsible for ensuring that the promotion,
marketing, sales and distribution of Products is conducted in compliance with
all regulations applicable to Products in each country where such activities
take place. Distributor commits to ensure that all regulatory approvals,
licenses and certifications are properly maintained or obtained, as applicable,
such that there is no impairment of the good name and goodwill of T3 Motion.
     (c) Distributor will be solely responsible for communicating with pertinent
governmental agencies or other regulating bodies with respect to all regulatory
approvals, licenses and certifications in the Territory currently issued under
T3 Motion’s name.
     (d) Upon termination of this Agreement for any reason, Distributor, at the
request of T3 Motion, will use commercially reasonable efforts to transfer any
and all regulatory or governmental certifications or approvals pertaining to
Products to T3 Motion. T3 Motion shall reimburse Distributor for all reasonable
and actual costs incurred by Distributor related to any and all regulatory or
governmental certifications or approvals pertaining to the Products, if
obtaining such certifications or approvals had been approved by T3 Motion in
writing prior to being obtained.
4.9 Dealers Network. T3 authorizes the Distributor to develop a network of
Dealers and/or sub-distributors in the Territory for the introduction, sale,
maintenance, and distribution of the Products in the Territory. Distributor
shall be authorized to sublicense the rights granted under this Agreement to
such Dealers and sub-distributors provided that any and all agreements with such
Dealers and sub-distributors shall be subject to the terms and conditions of
this Agreement.
4.10 The Distributor undertakes to train its customers in line with the T3
training program on the operating and riding of the T3i series vehicles, either
by staff employed by the Distributor, staff employed by its Dealers, Sub
Distributors, or Agent, or by trained trainers employed by the customers
supported with a document that the customers trainers are responsible for this
training and have been trained to do this.

 

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5.0 DUTIES OF T3 MOTION
5.1 Products.
          (a) T3 Motion shall provide Products to Distributor, its Dealers,
subdistributors and/or any other party designated by Distributor in writing,
provided (a) Products are available, and (b) Distributor is not in material
breach of this Agreement. Notwithstanding the foregoing in all circumstances T3
shall provide Products to Distributor’s Customers that have been paid for in
full. T3 Motion agrees to faithfully and diligently use its best efforts to
support the distributors’ efforts to sell, promote, and provide overall support
of the products in the territory by commercially reasonable means.
5.2 Customer Support.
(a) Subject to the terms and conditions of this Agreement, once a Distributor
Customer has been sold a Product, T3 Motion shall provide customer support to
that Distributor Customer without charge to the Distributor.
5.3 No Other Obligation.
          (a) T3 Motion shall have no liability to Distributor or any of
Distributor’s Customers in connection with Products except as specifically set
forth in this Agreement, T3 Motion’s Tariffs, T3 Motion’s Limited Warranty
(contained herein), or T3 Products policies communicated to Distributor.
6.0 T3 MOTION LIMITED WARRANTY
6.1 Limited Warranty.
          (a) T3 Motion warrants that the Products will operate and conform to
T3 Motion’s published product warranty to the end user attached hereto as
Exhibit E (“limited warranty”). The limited warranty on a T3i Series, power
modules and charger is for parts only and is limited to 1 year or 2,500 miles
from date of sale to end user, whichever comes first. Distributor will pass
through T3 Motion’s standard limited warranty to its customers. Distributor will
not modify T3 Motion’s standard limited warranty or make any other warranty with
regard to Products without T3 Motion’s prior written consent. This section 6 in
its entirety shall survive the termination of this Agreement.
6.2 Warranty Exclusions.
          (a) THIS LIMITED WARRANTY DOES NOT EXTEND TO CLAIMS ARISING FROM
MISUSE OF THE PRODUCTS, CASUALTY LOSS OR DAMAGE, OR USE OF THE PRODUCTS FOR
PURPOSES OTHER THAN THOSE FOR WHICH THE PRODUCTS WERE DESIGNED. EXCEPT FOR THE
EXPRESS LIMITED WARRANTY SET

 

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FORTH ABOVE, T3 MOTION GRANTS NO WARRANTIES FOR THE PRODUCTS, EXPRESS OR
IMPLIED, AND T3 MOTION SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OF QUALITY,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.
6.3 Limited Remedy.
          (a) In the event that any Product or accessory violates its limited
warranty to the end user, T3 Motion will repair, replace, or refund the purchase
price to Distributor at T3 Motion’s discretion per the terms of the vehicle
warranty. Distributor is responsible for the administration and handling of all
warranty claims and returns to T3 Motion from Distributor’s customers within the
Territory at T3’s sole cost and expense. T3 reserves the right to determine the
manner of satisfying the warranty claim, such as replacement, repair or refund.
6.4 Return of Products.
          (a) T3 represents and warrants to the Distributor that warranty claims
for out of box failures (Definition: Out Of Box Failure is a take on a common
quality analysis term Out Of Box Experience, used in the electronics industries.
It refers to a system that has a major defect preventing (or severely
restricting) use that is immediately apparent upon opening the box of a new unit
or first turning the unit on.) have been made on less than 1% of Products
delivered by T3. In the event Distributor wishes to make a warranty claim,
Distributor shall notify T3 Motion in writing by telecopy of Distributor’s
desire to return a Product, stating the reason for such return. Distributor
shall not return any Product to T3 Motion without first obtaining a Return
Material Authorization (“RMA”) number from T3 Motion. Distributor shall send to
T3 Motion, at T3’s sole cost and expense, on a monthly basis, during the term of
this Agreement, all returned Products for which an RMA has been issued. As
promptly as possible, but no later than ninety working days after receipt by T3
Motion of a properly returned Product thereof, T3 Motion shall replace or
repair, per the terms of the vehicle warranty, the Product. Upon an RMA’s issued
by T3, T3 reserves the right to determine if the product should be shipped back
to T3 or not. T3 has the right to replace, repair or refund the Product without
having the goods shipped back to the U.S. T3 Motion shall pay all shipping and
other charges in connection with the return and shipment of replaced Products.
T3 Motion claim approval process is, generally, as follows:
Approval process is within 24 business hours
          (b) Warranty is defined in Owners Manual (Legal Section)

  •   Parts only. 1 year or 4000 Kilometers which ever comes first Warranty
excludes wearable items Grips, Tires, brakes, floor mat,     •   Accessories
(Pannier Bag and Cover)

6.5 Warranty Exclusion.

 

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          (a) T3 Motion shall not be liable for any failure of Products caused
by or resulting from (a) any incompatibility of Distributor’s Customers’
equipment (IE: After market add on equipment) or (b) any act or event beyond the
reasonable control of T3 Motion, including but not limited to wind, fire, flood,
earthquake, act of God, riot, war, strike or labor dispute, governmental acts or
orders or any other similar or dissimilar act or event not within the reasonable
control of T3 Motion.
6.6 Limitations of Liability.
          (a) EXCEPT FOR THE LIIMITED PRODUCT WARRANTY, T3 MOTION SHALL NOT BE
LIABLE FOR INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES. THIS LIMITATION
SURVIVES THE FAILURE OF ANY EXCLUSIVE REMEDY. UNDER NO CIRCUMSTANCES WILL T3
MOTION BE LIABLE FOR MORE THAN THE DOLLAR AMOUNT OF PRODUCTS SOLD PURSUANT TO
THIS AGREEMENT.]
6.7. Warranty Notifications
The Distributor must notify T3 Motion at the end of each calendar month the
serial numbers of all vehicles sold during that month including the name of the
customer purchasing the vehicle, and the date of sale, which information will
not be used by T3 and/or any other party for marketing and/or sales purposes. T3
reserves the right to continue service and support to the T3 end user clients in
the event that this agreement expires or terminates.
6.8 Service Center
Distributor agrees to maintain suitable premises for a Service Center. The
number of trained technicians (certified by T3 Motion) at the Service Center
will be determined by the Distributor based on need and completed sales .Trained
technicians shall have the ability to travel to service the destinations covered
in the Territories, shall be available full time (normal working hours) to
support service, the service center will maintain suitable premises, space and
equipment for service within, and accessible in, the defined territory, service
staff will be prepared to travel to customer sites as appropriate, response to
customer service calls will be within 24 hours and no longer than 48 hours,
service center will maintain minimum levels of parts inventory (TBD) to provide
service.
7.0 INDEMNITIES AND INSURANCE
7.1 By Distributor.

 

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          (a) Distributor shall indemnify and hold harmless T3 Motion, its
officers, directors, agents, employees, successors and assigns, from and against
losses, claims, actions, proceedings, liabilities, obligations, damages, costs
or expenses (“Claims”) , including the payment of reasonable attorney’s fees,
arising out of or resulting from (i) any breach by Distributor of this Agreement
or (ii) the acts or omissions of Distributor, its employees or agents
constituting gross negligence and/or willful misconduct. T3 Motion shall notify
Distributor of any such Claims and T3 Motion shall undertake the defense thereof
or require Distributor to do so. Should T3 Motion request Distributor to
undertake such defense and Distributor in fact undertakes such defense, T3
Motion can, at its election and at its sole cost, also participate in the
defense thereof.
7.2 By T3 Motion.
          (a) T3 Motion shall indemnify and hold harmless Distributor, its
officers, directors, agents, employees, successors and assigns, from and against
any and all Claims, including the payment of reasonable attorney’s fees, arising
out of or resulting from (i) any breach by T3 Motion of this Agreement or
(ii) the acts and omissions of T3 Motion constituting gross negligence and/or
willful misconduct.. Distributor shall notify T3 Motion of any such Claims, and
Distributor may undertake the defense thereof or require T3 Motion to do so.
Should Distributor request T3 Motion to undertake such defense and T3 Motion in
fact undertakes such defense, Distributor can, at its election and at its sole
cost, also participate in the defense thereof.
7.3 Required Insurance.
     (a) With respect to performance hereunder, Distributor shall maintain at
all times during the term of this Agreement the following insurance coverage (if
available at a commercially reasonable cost ) and any additional insurance
and/or bonds required by law in the Territories: (1) Workers’ Compensation
Insurance in compliance with the laws of the state in which the work is to be
performed, (2) Commercial Liability Insurance under a comprehensive general
liability form, which includes coverage for personal injury and property damage
with policy limits of not less than $1,000,000 per occurrence. If the Commercial
Liability Insurance is Claims-made coverage, the retroactive date must be prior
to or coincident with the inception date of this Agreement and shall not be
advanced during the term of this Agreement. Distributor shall provide proof of
Insurance upon request and prove when procuring Insurance is not possible at a
commercially reasonable cost.
     (b) Distributor expressly assumes responsibility for insuring against and
resolving third party liability claims that may arise in the Territory. With the
exception of third party liability claims based on the negligence or willful
misconduct of T3 Motion, T3 Motion shall not be liable for such third party
liability claims.
7.4 Indemnification.
          (a) T3 Motion further agrees, at T3 Motion’s own expense, to defend or
at T3 Motion’s option, to settle, any claim, suit or proceeding brought against
Distributor or

 

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Distributor’s customers on the issue of infringement of any patent, copyright,
trademark and/or intellectual property right in the U.S. and the Territories by
T3 Motion and/or the Products sold hereunder or the use thereof (including
breach of any license agreement relating to the Products). T3 Motion shall have
sole control of any such action or settlement negotiations, and T3 Motion agrees
to pay all losses, costs, claims, expenses, attorney fees, damages and/or
judgments incurred by and/or entered against Distributor or Distributor’s
customers on such issue in any such claim, suit or proceeding. Distributor
agrees that T3 Motion shall be relieved of the foregoing obligations unless
Distributor or Distributor’s customer notifies T3 Motion within a reasonable
period in writing of such claim, suit or proceeding. T3 Motion shall not be
liable for any costs or expenses incurred by the Distributor without T3 Motion’s
prior written authorization, which authorization shall not be unreasonably
withheld. It shall be unreasonable for T3 Motion to refuse to authorize a review
of any claim documents and/or legal documents by independent counsel for the
Distributor.
7.5 Remedies.
          (a) If the use or sale of the Products is or is likely to be enjoined
as a result of any claim or proceeding alleging infringement, or to settle any
such claim, T3 Motion may at its own expense: obtain for Distributor the right
to use or sell the Products at no additional cost to Distributor; modify the
Products so that they are functionally equivalent but non-infringing; or replace
the Products with functionally equivalent but non-infringing Products. T3 is not
aware of any claims, whether asserted or unasserted, that the Products violate
and/or infringe upon any patent, copyright, trademark and/or intellectual
property right of any party.
7.6 Limitation.
          (a) Notwithstanding the provisions of subsection (a) above, T3 Motion
assumes no liability for; (i) infringements involving any marking or branding
not applied by T3 Motion or involving any marking or branding applied at the
request of Distributor; or (iii) infringements involving the modification of the
Products, or any part thereof, unless such modification was done by T3 Motion,
with T3 Motion’s approval and/ or under T3 Motion’s authority.
7.7 Entire Liability.
          (a) THE FOREGOING PROVISIONS OF THIS SECTION STATE THE ENTIRE
LIABILITY AND OBLIGATIONS OF T3 MOTION TO DISTRIBUTOR AND THE EXCLUSIVE REMEDY
OF DISTRIBUTOR, WITH RESPECT TO ANY ALLEGED INFRINGEMENT OF PATENTS, COPYRIGHTS,
TRADEMARKS OR OTHER INTELLECTUAL PROPERTY RIGHTS BY THE PRODUCTS OR ANY PART
THEREOF.

 

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8.0 T3 MOTION RIGHT OF FIRST REFUSAL
8.1 Right.
          (a) Distributor grants to T3 Motion the right of first refusal on any
proposed sale of its Distributor’s T3 Motion Customer accounts Accordingly, if
Distributor desires at any time during the term of this Agreement to sell part
of Distributor’s T3 Motion Customer accounts, it shall first secure a written
bona fide offer from a third party to acquire such accounts. T3 Motion shall
then have the right of first refusal to match the offer.
8.2 Process.
          (a) Within thirty (30) days after Distributor’s receipt of any bona
fide written offer to acquire rights in Distributor’s T3 Motion Customer
accounts, Distributor shall provide T3 Motion a copy of such offer. T3 Motion
shall be provided timely access to all pertinent records pertaining to
Distributor’s Customers, including accounts receivable and aged balance, in
order to evaluate its option. Within ten (10) ) days after receipt of notice, T3
Motion shall notify Distributor in writing of its desire to meet the terms and
conditions of the offer or, if any part of the offer is non-cash, to make an
equivalent cash payment. If the parties cannot agree as to the cash equivalency
of the offer, the matter shall be submitted to binding arbitration in accordance
with Section 12.7, the costs of which shall be evenly split between Distributor
and T3 Motion.
8.3 Acceptance or Rejection.
          (a) If T3 Motion exercises its right to purchase, the parties will
endeavor to conclude the purchase as soon as practicable (Such purchase by the
T3 Motion must be completed and finalized by no later than 30 days from the date
of notice to the T3 Motion) Pending the closing, the parties will use their best
efforts to avoid any interruption of Products to Distributor’s Customers and
will do nothing to adversely affect Distributor’s Customer account base. If T3
Motion rejects such offer, or fails to accept within the ten (10) day period,
Distributor shall be free to sell its Distributor Customer accounts upon terms
no less favorable to Distributor than are contained in the offer submitted to T3
Motion. If Distributor does not accept the offer, which is at least as favorable
to Distributor as that submitted to T3 Motion (as far as terms that can be
satisfied by the payment of money and only as to Distributor’s Customer
accounts), then the provisions of this Section shall apply to all subsequent
offers for the purchase of a portion of the Distributor’s Customer accounts.
8.4 Non-Solicitation by Distributor.
          (a) In the event of any assumption or purchase by T3 Motion of such
Distributor’s T3 Motion Customer accounts under this Section, neither
Distributor nor any principal, director, owner, agent, majority stockholder, nor
a successor corporation or successor entity shall solicit the Distributor’s T3
Motion Customer accounts insofar as they remain a T3 Motion customer, for the
sale of any product in competition with the Products currently available for
sale by T3 for a period of one year following T3’s assumption or purchase of
such Distributor’s

 

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T3 Motion Customer accounts. Neither the Distributor nor any principal,
director, owner, agent, majority stockholder, nor a successor corporation or
successor entity shall be prevented from soliciting such Distributor’s T3 Motion
Accounts in connection with the marketing and sale of products and/or services
which are not in competition with the Products currently available for sale by
T3.
8.5 Non-Solicitation by T3 Motion.
          (a) In the event of any sale by Distributor of its Distributor
Customer accounts to another party, after T3 Motion’s prior refusal to purchase
under this Section, neither T3 Motion nor any principal, director, owner,
employee, agent, majority stockholder, nor any affiliate or successor
corporation or successor entity shall solicit the former Distributor Customer
accounts, insofar as they remain a T3 Motion customer, for a period of one year
following the third party’s assumption or purchase of Distributor’s Customer
accounts.
9.0 CONFIDENTIALITY
9.1 Definition.
          (a) “Confidential Information” as used herein means any idea, concept,
design, method, application, process, technology, know-how, technique or
material to the extent that such is not generally known by or to the public, or
modifications, improvements or extensions thereof, whether or not reduced to
tangible form, relating to the business of T3 Motion. Confidential Information
shall not include marketing and or sales materials regarding the Products if
such materials are generally known by or to the public.
9.2 Duty.
          (a) During the term of this Agreement, the parties shall not disclose
any Confidential Information belonging to the other party to any third party,
including but not limited to Distributor’s Customers. The parties acknowledge
that during the course of performance under this Agreement, certain of their
respective agents, employees and/or representatives may receive Confidential
Information belonging to the other party, therefore the parties agree that the
only agents, employees or representatives who will receive the Confidential
Information will be those who have a need-to-know such Confidential Information
and those who unavoidably come in contact with the Confidential Information
while on a party’s premises. The parties expressly agree to instruct their
agents, employees and representatives who may receive Confidential Information
to safeguard the Confidential Information from disclosure and treat such
Confidential Information as confidential.
9.3 Exceptions.
          (a) Notwithstanding anything to the contrary contained herein, the
parties may disclose (a) any information generally available or known to the
public; (b) any information already known or available to the party prior to the
disclosure of such information; (c) information which becomes part of the public
domain by publication or otherwise through no fault of the party; or (d)
information required by law to be disclosed to a court or tribunal; provided,
however, that if the party is required to disclose such information to a court
or tribunal it shall give notice of the

 

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proceeding to the other party in accordance herewith to allow the other party to
seek an appropriate protective order or waive compliance with this Agreement.
9.4 Return.
          (a) Any and all written information or materials exchanged by the
parties hereto pursuant to this Agreement shall be returned along with all
copies of the same to the other party upon request of such party.
9.5 Equitable Remedies.
          (a) The parties agree that the Confidential Information disclosed
hereunder is of a special and unique kind, the protection of which is essential
to the operation and competitive position of either party, and that if there is
a breach by the other party of the obligations hereunder, that party would leave
the non-breaching party without adequate remedy at law. Therefore, in addition
to any other remedies which may be available at law, the parties agree that
either shall be entitled to seek injunctive relief, specific performance or
other equitable relief or any or all of the above, as may be provided under the
laws of and in any judicial forum in the State of New York or the United States
of America, for any violation of this Agreement.
9.6 Reverse Engineering.
Distributor shall not disassemble or reverse engineer any of the Products or any
part thereof.
10.0 TERM AND TERMINATION
10.1 Term and Renewal.
          (a) Unless otherwise terminated in accordance with other provisions of
this Agreement, (a) the initial term of this Agreement shall begin on the
Effective Date and shall continue for thirty six (36) months (the “Initial
Term”), and (b) the term shall automatically renew after the Initial Term for
consecutive renewal terms of three years each (each, a “Renewal Term”)
commencing on the Anniversary Date of the Initial Term. After the expiration of
the Initial Term, Termination can be executed by either party by written notice
delivered at least ninety (90) days prior to the start of any Renewal Term. In
the event that T3 Motion notifies the Distributor of any price increase above
the prices appearing on Exhibit A applicable to any Renewal Term , the
Distributor may cancel this Agreement on thirty (30) days notice.
10.2 Monetary Default.
          (a) If, within thirty (30) days after receiving a notice of payment
default from T3 Motion, Distributor has not cured such default, T3 Motion shall
have the right to suspend or terminate this Agreement, effective immediately
upon delivery of a suspension or termination notice in writing.

 

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10.3 Material Breach.
          (a) If either party commits a material breach of this Agreement (other
than a monetary default) and has not cured such breach within thirty (30) days
or such time as is reasonably necessary after written notice thereof, the other
party may terminate this Agreement, effective immediately upon delivery of a
termination notice in writing.
10.4 Insolvency.
          (a) Either party may terminate this Agreement upon thirty (30) days’
written notice if the other party (a) becomes insolvent, bankrupt or makes an
assignment for the benefit of creditors; (b) applies for or consents to the
appointment of a trustee or receiver, or a trustee or receiver is appointed for
the other party; or (c) bankruptcy, insolvency or liquidation or other
proceedings are commenced by or against the other party, and such appointment or
proceedings are not discharged or dismissed within sixty (60) days after such
appointment or commencement.
10.5 Termination by T3 Motion.
          (a) This Agreement may be terminated by T3 Motion at any time upon
thirty (30) days’ prior written notice if (a) Distributor fails to comply with
the confidentiality and ownership provisions of this Agreement; (b) Distributor
or one of its officers, or directors:
          (i) has made any material misrepresentations or omissions in its
application to establish its relationship with T3 Motion, submits knowingly
false or fraudulent reports, forms or certifications to T3 Motion.. In such
event if the Distributor terminates the employment of the responsible or
violating party within 30 days of receipt of a notice from T3, T3 shall not have
the ability to terminate this Agreement.
          (ii) attempts to make an unauthorized assignment of this Agreement or
receives a notice of violation of the terms or conditions of this Agreement or
any license, approval, certification or permit required by Distributor or its
employees in the conduct of Distributor’s business and fails to correct such
violation or to terminate the employment of the responsible employee(s) within
the later of the time period specified in such notice if any, or within thirty
(30) days after receipt of such a notice, whichever comes first;
          (iii) fails to satisfy the minimum performance standards as set forth
in Exhibit B for the first contract year and such each additional contract year,
but only after a review and T3 Motion undertakes reevaluation.
          (iv) is acquired in whole or in substantial part by, or is merged
with, a third party where the Distributor is not the surviving entity, or sells
all or substantially all of its assets to a

 

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third party (except if such sale is pursuant to the Right of First Refusal under
Article 8), without the consent if T3 which will not be unreasonably withheld..
10.6 Effect of Termination.
          (i) Immediately upon the termination of this Agreement, Distributor
shall cease distributing the Products except to those Customers prior to the
termination date with Distributor for which Distributor has an existing purchase
order for Products. T3 Motion expressly agrees to provide Products for such
Distributor Customers after the termination of this Agreement. Distributor
agrees to pay for all outstanding purchase orders, if any.
          (ii) Termination regardless of cause or nature shall be without
prejudice to any other rights or remedies of the parties. Termination of this
Agreement for any cause shall not release either party from any liability which,
at the time of termination, has already accrued to such party, or which may
accrue with respect to any act or omission prior to termination or from any
obligation which is expressly stated herein to survive termination.
          (iii) Upon expiration or termination of this Agreement for any reason,
the parties agree to continue their cooperation in order to effect an orderly
termination of their relationship. Distributor shall immediately cease
representing itself as a Distributor of Products for T3 Motion and stop
utilizing T3 Motion’s Trademarks. Distributor agrees that it will comply with
any duties which T3 Motion reasonably requires of Distributor to affect an
orderly termination.
          (iv) In the event of termination by T3 Motion for any reason,
including material breach, T3 Motion has the option to repurchase any new
remaining stock Distributor has unsold at the prevailing T3 Motion price
schedule, which shall not be less than the price paid by the Distributor, within
thirty (30) days after such termination.
10.7 Automatic Termination.
          (a) This Agreement shall terminate automatically and without liability
or further obligation on the part of either Party to the other if T3 Motion’s or
its providers’ (“Service Providers”) licenses or other authority to operate are
revoked, suspended or not renewed; provided, however, that if such revocation,
suspension or non-renewal does not apply to all of T3 Motion’s facilities, then
this Agreement shall terminate only as to those facilities for which licensing
or other authority does not exist.
10.8 Termination Due to Government Action.
          (a) This Agreement shall be terminated by T3 Motion upon ten
(10) days’ prior written notice if any Governmental Entity approves, authorizes,
interprets or promulgates any law, rule, regulation or order which (a) in effect
or application prohibits or

 

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substantially impedes T3 Motion from fulfilling its obligations in providing
Products and/or services in the Territory; or (b) materially or adversely
affects T3 Motion’s ability to conduct business in the Territory upon the terms
and conditions acceptable to T3 Motion.
10.9 FAILURE TO MEET MINIMUM SALES FIGURES
          In the event the Distributor fails to meet the minimum sales figures
set forth in Exhibit C during any annual period, T3 shall have the right upon
thirty (30) days written notice to transform this Agreement into a non exclusive
distributorship. Such thirty (30) days notice may only be delivered after T3 has
met in person with the Distributor to review the Distributor’s performance and
the reasons why sales figures were not met. Upon the transformation of this
Agreement to a non exclusive distributorship all terms and conditions contained
in this Agreement shall remain in full force and effect except those which
granted the Distributor exclusivity ion the Territories.
11. NOTICES
Any notice or demand given or made hereunder shall be written and served in the
following manner:
If given to T3 Motion, notice shall be addressed to T3 Motion at:
T3 Motion, Inc.
2990 Airway Avenue
Costa Mesa, CA 92626
Attention: Noel Cherowbrier
With a copy to:
Richardson & Patel LLP
10900 Wilshire Boulevard, Suite 500
Los Angeles, California 90024
Attention: Ryan Hong, Esq.
If given to Distributor, notice shall be addressed to Distributor at:
Spear International
629 Fifth Avenue, 3rd Floor
Pelham, NY 10803
Attention: John Callaghan

 

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All notices may be served by registered or certified U.S. mail or by any regular
delivery service that provides receipt and evidence of delivery. Notices shall
be deemed to be given two days after the date of registration or certification
with the U.S. Postal Service or on the date of actual delivery if served by any
other method. Either party can change its address for notice purposes upon
reasonable notice to the other party.
12.0 MISCELLANEOUS
          (a) This Agreement and the terms of Exhibit A hereto shall apply in
all territories where T3 Motion Products are sold, subject to all local laws and
regulations. Each party hereto represents and warrants to the other that it has
(a) all necessary power and authority to enter into and perform this Agreement
in accordance with its terms, and (b) all necessary authorizations from federal,
state local, and foreign governmental entities.
          (b) The waiver, express or implied, by either Party, of any rights or
of any failure to perform or of any breach by the other Party shall not
constitute or be deemed a waiver of any other right hereunder or any other
failure to perform or breach by the other Party, whether of a similar or
dissimilar nature.
          (c) If any part of this Agreement is found to be in violation of any
federal, state or local law, rule, regulation, ordinance, order or judgment,
such portion shall be stricken from the Agreement and be of no effect, and the
balance of this Agreement shall continue in effect until it otherwise terminates
or expires. Moreover, in the event that any provision of this Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
          (d) In the event that any of the Products provided hereunder or the
charges made therefore at any time become subject to any Governmental Entity’s
regulation or tariff, then the terms and conditions of this Agreement including
the charges set forth in Exhibit A, shall be deemed amended to conform to any
conflicting terms and conditions in effect under such regulation or tariff. All
non-conflicting terms and conditions of this Agreement shall remain valid and
effective.
          (e) All claims or disputes between T3 Motion and Distributor arising
out of or relating to this contract, or breach thereof, shall be decided in
accordance with the commercial arbitration rules of the American Arbitration
Association then in effect to be held in the State of New York, County of New
York unless the parties mutually agree otherwise. Notice of the demand for
arbitration shall be filed in writing with the other party in reasonable time
after the dispute has arisen. The award rendered by the arbitrators shall be
final, and judgment may be entered upon it in accordance with applicable law in
any court having jurisdiction thereof. Notwithstanding the foregoing, the
parties may seek interim injunctive relief to protect their rights pending the
establishment or decision of the arbitrator. The Parties disclaim application of
the United Nations Convention on Contracts for the International Sale of Goods.
          (f) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
          (g) No rights or obligations hereunder shall be assigned or delegated,
in whole or in part, by Distributor to any other person, firm or corporation
without the prior written consent

 

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thereto by T3 Motion, which consent shall not be unreasonably withheld. T3
Motion shall be entitled to assign its interest hereunder without the consent of
Distributor, provided T3 Motion’s assignee is capable of performing T3 Motion’s
obligations under the terms of this Agreement. Notwithstanding the foregoing or
anything to the contrary contained in this Agreement, the Distributor shall be
entitled to assign this Agreement and all rights and obligations hereunder,
without the prior consent of T3, to Malloy Gulf Holdings, Ltd., a to be formed
Bahrain entity which will be controlled by the same shareholder group that
control’s the Distributor. Upon any such assignment a written notice thereof
will be delivered to T3.
          (h) The validity, construction and performance of this Agreement shall
be governed by and interpreted in accordance with the laws of the State of New
York in the appropriate court of New York County. Headings to articles and
sections of this Agreement are to facilitate reference only, do not form a part
of this Agreement, and shall not in any way affect the interpretation hereof.
          (i) This Agreement may be executed by the parties in counterparts,
each of which shall be deemed an original and both of which together shall
constitute the one and the same instrument. When executed, this Agreement and
the exhibits hereto shall constitute the entire Agreement of the Parties and
supersede all prior agreements, written or oral of every sort, and may not be
amended except in writing and signed by authorized representatives of each
Party.
          (j) This Agreement is executed in English and may be translated into
other languages. In the event of a conflict between the English version and any
translated version, the English version shall prevail.
(Signature page follows)

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by a person with full power and authority to bind such party.

                  “T3 Motion”    
 
                T3 Motion, Inc.    
 
           
 
  By:   /s/ Ki Nam    
 
  Name:  
 
Ki Nam    
 
  Title:   CEO    
 
                “Distributor”    
 
                Spear International    
 
           
 
  By:   /s/ John Callaghan    
 
  Name:  
 
John Callaghan    
 
  Title:   CFO    

 

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EXHIBIT A
T3 MOTION: T3i SERIES DISTRIBUTION PRICE LIST

                  Price list from January 2009 through the end of December 2011
(List Price Effective Feb 09)                 Limit                
Markup/Markdown T3 Motion Product   Description   Distribution Price   List
Price   From List Price Vehicle Package
T3i Series Model  
1. T3 Series Vehicle
2. Vehicle Charger
3. Qty 2 Type B1 Power Modules
4. Pannier Bar
5. Safety Helmet 
            Type B1 Power Module  
25 Mile Range Battery
            Vehicle Cover  
T3 Series Cover
            Pannier Bag  
Soft Storage Bag
            Vehicle Charger  
220V Dual Charging System
            Utility Trailer  
Flat Bed Trailer
           

 

Note:       1.   Shipping and Handling will be passed onto customers and paid up
front by Distributor.   2.   Product part numbers are defined in product
nomenclature reference sheet.   3.   Payment Prior to Shipment.

  (i)   Irrevocable Bank Letter of Credit (ILOC) is put in place once Firm
Purchase Order Call Off is processed. ILOC is processed once product ships from
origin under exworks terms.     (ii)   Unless a irrevocable bank letter of
credit (ILOC) is in place for the full amount of product on the Firm Purchase
Order Call Off.   % will be paid at the point of order call off, and the final
  % balance will be received by T3 Motion prior to shipment of the Product
specified in a Firm Purchase Order Call Off.

4.   Figures quoted do not account for import duties, local tariffs or other
costs. Distributor may choose pass on these costs to end customers)   5.   T3
Motion reserves the right to charge interest on overdue accounts to a maximum
amount of   %   6.   The price for 1st 7 demo vehicles will be at $      USD.
This is a onetime purchase.

TERMS:
POINT OF SALE MATERIALS:
T3 Motion will furnish product brochures, electronic files, and display
materials for each of the distributor stores.

 

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EXHIBIT B
SALES TERRITORIES AND MINIMUM PURCHASE QUANTITIES
1.0 Term to Purchase:
Distributor has the referenced time frame to purchase the minimum purchase under
the terms of this Agreement.
2.0 Purchase Quantities:
Distributor agrees to use its best efforts purchase a minimum of 6,000 T3i
Series vehicles during the Initial Term of this agreement (3 years) and a
blanket purchase order will be issued from Distributor when the contract is
signed. A blanket purchase order is to hold the pricing and delivery terms per
the Term of this Agreement contract years. Distributor will only be bound to
purchase Products upon the acceptance by T3 of a Firm Purchase Order Call Off
for the Products. Distributor agrees to use its best efforts to request
shipments of product in the below said volume of vehicles within the terms
outlined in table #1 for contract year 1.
2.1 Contract Years
Year 1 = March, 2009 to February 2009
Year 2 = March, 2010 to February 2011
Year 3 = March, 2011 to February 2012

 

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     Table #1

                                                                               
              Contract Year 1     FY 2009 Q1           Q2   Q3   Q4   Fy 2010  
Q1       Total     Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct  
Nov   Dec   Jan   Feb   Mar        
T3i
            14               210               28               322          
426           1000     T3i   Contract Year 2                                    
                                        2500     T3i   Contract Year 3          
                                                                  2500    
 
                                                                      Grand
Total         6000  

     A. During contract years 2 and 3 Distributor agrees to provide T3 Motion a
quarterly forecast updated and submitted from month to month with probability.
In order to help mitigate security supply on materials and delivery of product.
     3.0 Territories
a. The Exclusive Territory for this agreement is the (Gulf Co-Operation Council)
GCC region which includes The Kingdom of Saudi Arabia, Kuwait, Bahrain, Qatar,
Oman.
     (i) Exclusivity in “UAE”. If Distribution meets the volume of shipments
outlined through June 2009 (224 T3i Series vehicles) outlined in table “1”. T3
Motion agrees to grant

 

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Distributor Exclusivity in the UAE. T3 motion would then pass the
sub-distributor to Master Distributor (Spear).
b. The Non Exclusive Territory for this agreement is Yemen. Turkey, Egypt,
Lebanon , Morocco and until June, 2009 the
UAE (a.,(i) & b.,(i)).
(i) Until June, 2009 T3 Motion is under contract for The UAE with another
distributor which other distributor has the exclusive right to sell to
Police/Law Enforcement and a non exclusive right to sell to other market
segments. Accordingly until June, 2009 the Distributor shall not sell to
Police/Law Enforcement in the UAE.
(ii) Non Exclusive territories will remain Non Exclusive during 1st contract
year. the Distributor will be given the first right of refusal to become the
Exclusives Distributor ion the same terms and conditions set forth in this
Agreement for Non Exclusive territories upon successfully achieving the volume
purchase terms of the agreement for the 1st anniversary contract year.
          IN WITNESS WHEREOF, each of the parties hereto has caused this
Exhibit D to the Agreement to be executed by a person with full power and
authority to bind such party.

                  “T3 Motion”    
 
                T3 Motion, Inc.    
 
           
 
  By:   /s/ Ki Nam    
 
  Name:  
 
Ki Nam    
 
  Title:   CEO             “Distributor”    
 
                Spear International    
 
           
 
  By:   /s/ John Callaghan    
 
  Name:  
 
John Callaghan    
 
  Title:   CFO    

 

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EXHIBIT C
T3 MOTION MARKS
(PLEASE SEE ATTACHED T3 MOTION BRAND COMMUNICATION BOOK)
     IN WITNESS WHEREOF, each of the parties hereto has caused this Exhibit D to
the Agreement to be executed by a person with full power and authority to bind
such party.

                  “T3 Motion”    
 
                T3 Motion, Inc.    
 
           
 
  By:   /s/ Ki Nam    
 
  Name:  
 
Ki Nam    
 
  Title:   CEO             “Distributor”    
 
                Spear International    
 
           
 
  By:   /s/ John Callaghan    
 
  Name:  
 
John Callaghan    
 
  Title:   CFO    

 

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EXHIBIT D
T3i Series Competition
(PICTURE) [a51929a5192901.gif]

 

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EXHIBIT E

    T3i SERIES ORIGINAL WARRANTY

    T3 Motion, Inc., located at 2990 Airway Avenue, Costa Mesa, CA 92626,
provides this limited warranty to original purchasers of the T3i Series (“T3i”)
personal mobility vehicle and accessories.

    This original Limited Warranty is extended only to the original purchaser.
The term “purchaser,” as used herein, refers only to the original purchaser.    
  Subject to the exclusions, limitations and conditions stated below, T3 Motion.
Inc. warrants the following described components of the T3i against defects in
materials and workmanship for a period of one (1) year or 4,000 kilometers,
whichever comes first: Frame; steering assembly; drive motor/drive train
components (excluding drive system); power modules (battery replacement will be
pro-rated over the warranty period); battery charger; brake lever/calipers;
throttle; wheels/hubs; body panels/control headset housing; handlebars.      
LED Lighting; LCD control panel display; and internal wiring and the drive
system shall be warranted for a period of ninety (90) days. Subject to the
exclusions, limitations and conditions stated below:       User wear items
including tires; handlebar grips; brake pads; brake rotors; floor mat shall be
warranted only for defects in materials and workmanship. Failure due to normal
wear and tear shall not be covered by this Limited Warranty. During the
applicable Limited Warranty period, T3 Motion, Inc. shall, within a reasonable
period of time, repair or replace (with new or reconditioned parts) the
defective parts of the T3i, subject to exclusions, limitations, and conditions
stated below.       T3 Motion, Inc. may elect to simultaneously replace
non-defective parts that are part of a sub-assembly that contains the defective
part. Any replaced parts (defective parts and parts that are part of such a
subassembly) will become the property of T3 Motion, Inc.       The Limited
Warranty does not cover damage to a T3i caused by any of the following: all
external causes but not limited to, accident, collision, fire, immersion in
water, freezing, or objects striking the T3i; misusing the T3i, such as riding
over obstacles, overloading, racing, or otherwise using the T3 contrary to the
instructions and warnings in the user manual issued by T3 Motion, Inc. Altering
or modifying the T3i personal mobility vehicle; loosening or opening the
internal access panel; deterioration of paint, trim, and appearance items that
results from use and/or exposure to the elements; cleaning the T3i with a
high-pressure water system, abrasive, or solvents; exposure to environmental
conditions beyond the limits stated in the User Materials; all acts of nature,
including but not limited to: earthquakes, floods, tidal waves, hurricanes,
tornados; failure to properly maintain the T3i; improperly servicing the T3i
(including, without limitation, damage caused by use of non-T3 Motion, Inc.
parts or accessories); or improper charging of the T3i power modules.       To
obtain repair or replacement of parts under this Limited Warranty, the purchaser
must utilize the following procedure:       Call T3 Motion, Inc. Customer
Service at (714) 619-3600 and describe the problem to a T3 Motion, Inc. Customer
Service Representative. If the purchaser is unable to resolve the problem with
the assistance of the Customer Service Representative, and if this Limited
Warranty applies, the following procedures shall apply:

 

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    If the defective part is covered under the original one (1) year Limited
Warranty period stated above, T3 Motion, Inc. shall, within a reasonable period
of time, dispatch to the purchaser’s location (Certified Technician ).      
Repair or replacement of defective parts by T3 Motion, Inc. does not extend the
term of this Limited Warranty, which shall expire (as to original, repaired, and
replacement parts) upon expiration of the applicable Limited Warranty period
from the date of original delivery of the T3i to the purchaser.       T3 Motion,
Inc. obligations and liability for any defects in any T3i are limited to repair
or replacement of defective parts as required by the Limited Warranty. T3
Motion, Inc. neither assumes (nor authorizes anyone to assume for it) any other
obligation or liability in connection with a T3i Series personal mobility
vehicle or this warranty.       T3 Motion, Inc. is not responsible for any loss
of use of a T3i or for any inconvenience or other loss or damage which might be
caused from any defect in a T3i, or for any other incidental or consequential
damages the Purchaser or any other person may have as a result of any defect in
a T3i.       This original Limited Warranty is the only Original Limited
warranty applicable to the T3i and accessories. T3 Motion, Inc. disclaims all
other warranties, express or implied, including implied warranties of
merchantability or fitness for a particular purpose, other than those warranties
implied by and incapable of exclusion, restriction, or modification under
applicable law. Any such implied warranties which may be required by law and are
not disclaimed hereby are limited, to the extent allowed by law, to the
applicable period of the Limited Warranty, or to the applicable time period
provided by the applicable state law, whichever period is shorter. Some U.S.
states and foreign countries do not allow limitations on how long an implied
warranty lasts, so the above limitation may not apply to some purchasers. Some
U.S. states and foreign countries do not allow the exclusion or limitation of
incidental or consequential damages, so the above limitation or exclusion may
not apply to some purchasers. California law governs this Limited Warranty.

 

*   This Original Warranty is provided at no additional cost to all original
purchasers of T3i Series vehicles.

 

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EXHIBIT F

1.   Written Assurance. To enable the Disclosing Party to disclose “technical
data” to the

    Receiving Party in compliance with the requirements of the U.S. Commerce
Department’s Export Administration Regulations, the Receiving Party hereby gives
its assurance to the Disclosing Party that the Receiving Party will not
knowingly, unless prior written authorization is obtained from the Disclosing
Party and the appropriate governmental body, export, re-export or otherwise
disclose directly or indirectly, any “technical data” (or computer software and
any related documentation) received from the Disclosing Party which is not
otherwise available to the general public, nor allow the direct product thereof
to be shipped directly or indirectly, to any of the following countries (as such
list may be amended from time to time by the U.S. Department of Commerce and/or
the U.S. Treasury Department):

             
Cuba
  Liberia   Iran   Iraq
North Korea
  Rwanda        

    From time to time the UNITED STATES DEPARTMENT OF COMMERCE BUREAU OF
INDUSTRY AND SECURITY will continue to update, change, and modify the U.S.
Commerce Department’s list of embargoed nations.       Notwithstanding the other
provisions of this Agreement, this Paragraph shall survive any termination or
expiration of this Agreement.

  2.   Commodity Classification (See Figure “1”)

 

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Figure 1:

     
COMMODITY CLASSIFICATION
  UNITED STATES DEPARTMENT OF COMMERCE
 
  BUREAU OF INDUSTRY AND SECURITY
 
  WASHINGTON, D. C. 20230
 
   
CASE NUMBER: Z749562
   
 
   
TO MOTION
  NOVEMBER 14, 2008
ATTN: NOEL CHEROWBRIER
  CCATS #: G066351
2990 AIRWAY AVE
   
COSTA MESA, CA 92659
   

THE FOLLOWING INFORMATION IS IN RESPONSE TO YOUR INQUIRY OF NOVEMBER 07, 2008
REQUESTING LICENSE INFORMATION FOR:

                                                      IVL REQUIRED   LVS        
            FOR   DOLLAR COMMODITY   ECCN   LVS   COUNTRY GROUPS   LIMIT
ITEM #1:
                               
1) THE I-SERIES IS A 3 WHEELED VEHICLE AND IS THE EXPORT VERSION OF THE T3
VEHICLE SUPPLIED TO LOCAL GOVERNMENT, POLICE, POSTAL SERVICE AND SECURITY
COMPANIES IN THE USA. THE I-SERIES UNIT IS CE CERTIFIED AND EMC TESTED FOR
EXPORTING.
    EAR99                     $ 0  
I-SERIES
                               

COMMENTS FROM LICENSING OFFICER (S) :

ITEM #1:   EAR99 ITEMS CAN BE SHIPPED NLR (NO LICENSE REQUIRED) UNLESSEXPORTER
KNOWS OR IS INFORMED THAT ITEM WILL BE USED IN AN ACTIVITY RELATED TO NUCLEAR,
CHEMICAL, BIOLOGICALWEAPONS, OR MISSILES, OR FOR PROHIBITED DESTINATIONS.

ITEMS OTHERWISE ELIGIBLE FOR EXPORT OR REEXPORT UNDER A LICENSE EXCEPTION OR NLR
(NO LICENSE REQUIRED) AND USED IN THE DESIGN, DEVELOPMENT, PRODUCTION OR USE OF
NUCLEAR, CHEMICAL OR BIOLOGICAL WEAPONS OR MISSILES REQUIRE A LICENSE FOR EXPORT
OR REEXPORT AS PROVIDED IN PART 744 OF THE EXPORT ADMINISTRATION REGULATIONS
(EAR)
DESTINATIONS REQUIRING A LICENSE
SEE THE COMMERCE COUNTRY CHART (SUPPLEMENT NO. 1 TO PART 738 OF THE EAR) TO
DETERMINE WHICH COUNTRIES REQUIRE A LICENSE. USE THE COUNTRY CHART COLUMN
INFORMATION GIVEN ON THIS FORM IN CONJUNCTION WITH THE COUNTRY CHART TO
DETERMINE THE LICENSING REQUIREMENTS FOR YOUR PARTICULAR ITEMS. FOR ITEMS
CLASSIFIED EAR99, SEE PART 746 OF THE EAR TO DETERMINE THE LICENSING
REQUIREMENTS.
APPLICATIONS FOR EXPORT MUST BE SUBMITTED ON FORM BIS-748P MULTIPURPOSE
APPLICATION. THESE FORMS MAY BE OBTAINED BY CALLING (202) 482-3332 OR REQUESTING
DIRECTLY ON THE BIS INTERNET WEB SITE. ASSISTANCE IN FILLING OUT

 

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THE FORM, OR ANY ASPECT OF EXPORTING, IS PROVIDED BY THE EXPORT COUNSELING
DIVISION IN WASHINGTON,
D. C. AT (202) 482-4811 OR THE WESTERN REGIONAL OFFICE IN NEWPORT BEACH,
CALIFORNIA AT (714) 660–0144.
LICENSE EXCEPTIONS
BE AWARE THAT THE LICENSING REQUIREMENTS FOR SOME DESTINATIONS MAY BE OVERCOME
BY ANY LICENSE EXCEPTION FOR WHICH YOUR ITEMS QUALIFY. SEE PART 740 OF EAR FOR
INFORMATION ON LICENSE EXCEPTIONS. THE LICENSE AVAILABLE COLUMN ON THIS FORM
LISTS ONLY THOSE LICENSE EXCEPTIONS OF THE SET GBS, CIV, APP, TSR WHICH ARE
APPLICABLE TO YOUR ITEMS. OTHER LICENSE EXCEPTIONS MAY APPLY, DEPENDING UPON THE
CIRCUMSTANCES OF YOUR INTENDED TRANSACTION.
EXPORT CONTROL CLASSIFICATION NUMBERING SYSTEM (ECCN)
THE ECCN NUMBERING SYSTEM IS FOUND IN THE COMMERCE CONTROL LIST (CCL) PART 774
OF THE EAR. THE CCL IS A COMPREHENSIVE LIST THAT IDENTIFIES ALL ITEMS CONTROLLED
AND LICENSED BY COMMERCE. WITHIN THE CCL, ENTRIES ARE IDENTIFIED BY AN ECCN.
EACH ENTRY SPECIFIES THE LICENSE REQUIREMENTS FOR THE ITEM AND THE REASON
(S) FOR CONTROL. PLEASE CONSULT PARTS 738 AND 774 OF THE EAR FOR SPECIFIC
INFORMATION ON ECCNS.
SHIPPERS EXPORT DECLARATION (SED)
WHEN AN EXPORT IS MADE, IT IS NECESSARY FOR THE EXPORTER TO SHOW ON THE SHIPPERS
EXPORT DECLARATION (FORM 7525-V) IN BLOCK 27 EITHER THE LICENSE NUMBER, THE
APPLICABLE LICENSE EXCEPTION SYMBOL OR THE SYMBOL NLR. FORM 7525-V IS AVAILABLE
FROM THE SUPERINTENDENT OF DOCUMENTS, U.S. GOVERNMENT PRINTING OFFICE OF
WASHINGTON, D.C. 20402, AND FROM EXPORT ADMINISTRATION DISTRICT OFFICES (U.S.
DEPT. OF COMMERCE).

     
 
  FOR INFORMATION CONCERNING
 
  THIS CLASSIFICATION CONTACT
 
  WAN–KANG CHAN
STEVEN CLAGETT
  PHONE #: (202) 482–4516
DIVISION DIRECTOR
  BIS/ONP/NM

 

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EXHIBIT G
SAMPLE PURCHASE ORDER

      [Company Name]
[Your Company Slogan ]   PURCHASE ORDER
[Street Address ]
[ City, S T ZIP Code]
Phone [(212)444 - 0123] Fax [(212)444 - 0144]    
The following number must appear on all related
correspondence, shipping papers, and invoices:     P.O. NUMBER: [001]    

     
TO:
  SHIP TO:
[Name ]
  [Name]
[Company]
  [Company]
[Street Address ]
  [Street Address ]
[City, S T ZIP Code ]
  [City, ST ZIP Code ]
[Phone ]
  [Phone ]

                                  P.O. DATE     REQUISITIONER     SHIPPED VIA  
  F.O.B. POINT     TERMS    
 
                           

                                  QTY     UNIT     DESCRIPTION     UNIT PRICE  
  TOTAL    
 
                           
 
                SUBTOTAL

         
 
                SALES TAX

         
 
                SHIPPING & HANDLING

         
 
                OTHER

         
 
                TOTAL          
 
                         

1.   Please send two copies of your invoice.   2.   Enter this order in
accordance with the prices, terms, delivery method, and specifications listed
above.   3.   Please notify us immediately if you are unable to ship as
specified.   4.   Send all correspondence to:
[Name]
[Street Address]
[City, ST ZIP Code]
Phone [(212)444-0123] Fax [(212)444-0144]

         
 
 
 
Authorized by                    Date