Document:

ex10_13.htm

    

      
        

      

      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, 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.

       

      UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST NOT TRADE THE SECURITY IN CANADA BEFORE THE DATE THAT IS 4 MONTHS AND A DAY
AFTER THE LATER OF (I) DECEMBER 31, 2007 AND (II) THE DATE THE ISSUER
BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.

       

      

      THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS

      EXERCISE
ARE SUBJECT TO THE RESTRICTIONS ON

      TRANSFER SET FORTH IN
SECTION 5 OF THIS WARRANT

       

      
        	
                Warrant
      No. 2007A-1

              	
                Number
      of Shares: 697,639

              
	 
      	
                (subject
      to adjustment)

              
	
                Date
      of Issuance:  December 31, 2007

              	 
      
	
                Original
      Issue Date (as defined in subsection 2(a)): December 31,
    2007

              	 
      

      

      T3 MOTION,
INC.

       

      Common Stock Purchase
Warrant

       

      (Void
after December 31, 2012)

       

      T3
Motion, Inc., a Delaware corporation (the “Company”), for value received, hereby
certifies that Immersive Media Corp., or its registered assigns (the “Registered
Holder”), is entitled, subject to the terms and conditions set forth below, to
purchase from the Company, at any time or from time to time on or after the date
of issuance and on or before 5:00 p.m. (Los Angeles time) on December 31, 2012,
SIX HUNDRED NINETY SEVEN THOUSAND SIX HUNDRED THIRTY NINE (697,639) shares of
Common Stock, $0.001 par value per share, of the Company (“Common Stock”), at a
purchase price of $1.081 per share.  The shares purchasable upon
exercise of this Warrant, and the purchase price per share, each as adjusted
from time to time pursuant to the provisions of this Warrant, are hereinafter
referred to as the “Warrant Shares” and the “Purchase Price,”
respectively.  This Warrant is being issued in conjunction with the
issuance and sale of Company common shares and a Company promissory note
pursuant to a Securities Purchase Agreement by and between the Company and the
Registered Holder on or about this date.

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      1.           Exercise.

       

      (a)           Exercise for
Cash.  The Registered Holder may, at its option, elect to
exercise this Warrant, in whole or in part and at any time or from time to time,
by surrendering this Warrant, with the purchase form appended hereto as Exhibit I duly
executed by or on behalf of the Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, in lawful money of the United States, of the
Purchase Price payable in respect of the number of Warrant Shares purchased upon
such exercise.

       

      (b)           Exercise
Date.  Each exercise of this Warrant shall be deemed to have
been effected immediately prior to the close of business on the day on which
this Warrant shall have been surrendered to the Company as provided in
subsection 1(a) above (the “Exercise Date”).  At such time, the person
or persons in whose name or names any certificates for Warrant Shares shall be
issuable upon such exercise as provided in subsection 1(c) below shall be deemed
to have become the holder or holders of record of the Warrant Shares represented
by such certificates.

       

      (c)           Issuance of
Certificates.  As soon as practicable after the exercise of
this Warrant in whole or in part, and in any event within 5 days thereafter, the
Company, at its expense, will cause to be issued in the name of, and delivered
to, the Registered Holder, or as the Registered Holder (upon payment by the
Registered Holder of any applicable transfer taxes) may direct:

       

      (i)           a
certificate or certificates for the number of full Warrant Shares to which the
Registered Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which the Registered Holder would otherwise be entitled,
cash in an amount determined pursuant to Section 3 hereof; and

       

      (ii)           in
case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof for
the number of Warrant Shares equal (without giving effect to any adjustment
therein) to the number of such shares called for on the face of this Warrant
minus the number of Warrant Shares for which this Warrant was so exercised
(which, in the case of an exercise pursuant to subsection 1(b), shall include
both the number of Warrant Shares issued to the Registered Holder pursuant to
such partial exercise and the number of Warrant Shares subject to the portion of
the Warrant being cancelled in payment of the Purchase Price).

       

      2.           Adjustments.

       

      (a)           Adjustment for Stock Splits
and Combinations.  If the Company shall at any time or from
time to time after the date on which this Warrant was first issued (or, if this
Warrant was issued upon partial exercise of, or in replacement of, another
warrant of like tenor, then the date on which such original warrant was first
issued) (either such date being referred to as the “Original Issue Date”) effect
a subdivision of the outstanding Common Stock, the Purchase Price then in effect
immediately before that subdivision shall automatically, without any action by
any person, be proportionately decreased.  If the Company shall at any
time or from time to time after the Original Issue Date combine the outstanding
shares of Common Stock, the Purchase Price then in effect immediately before the
combination shall be proportionately increased.  Any adjustment under
this paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

       

      (b)           Adjustment
for Certain Dividends and Distributions.  In the event the
Company at any time, or from time to time after the Original Issue Date, shall
make or issue, or fix a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect immediately before such event shall automatically, without
any action by any person, be decreased as of the time of such issuance or, in
the event such a record date shall have been fixed, as of the close of business
on such record date, by multiplying the Purchase Price then in effect by a
fraction:

       

      (1)           the
numerator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date, and

       

      (2)           the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution;

       

      provided, however, that if such
record date shall have been fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Purchase Price
shall be recomputed accordingly as of the close of business on such record date
and thereafter the Purchase Price shall be adjusted pursuant to this paragraph
as of the time of actual payment of such dividends or
distributions.

       

      
        (c)              Adjustment in Number of
Warrant Shares.  When any adjustment is required to be made in
the Purchase Price pursuant to subsections 2(a) or 2(b), the number of
Warrant Shares purchasable upon the exercise of this Warrant shall automatically
be changed, without any action by any person, to the number determined by
dividing (i) an amount equal to the number of shares issuable upon the
exercise of this Warrant immediately prior to such adjustment, multiplied by the
Purchase Price in effect immediately prior to such adjustment, by (ii) the
Purchase Price in effect immediately after such adjustment.

      

       

      
        (d)              Adjustments for Other
Dividends and Distributions.  In the event the Company at any
time or from time to time after the Original Issue Date shall make or issue, or
fix a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the Company
(other than shares of Common Stock) or in cash or other property (other than
regular cash dividends paid out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles), then and in each such
event provision shall be made so that the Registered Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock issuable
hereunder, the kind and amount of securities of the Company, cash or other
property which the Registered Holder would have been entitled to receive had
this Warrant been exercised on the date of such event and had the Registered
Holder thereafter, during the period from the date of
such event to and including the Exercise Date, retained any such securities
receivable during such period, giving application to all adjustments called for
during such period under this Section 2 with respect to the rights of the
Registered Holder.

        
 

      

      
        
          
             

          

          
            -3-

            
              

            

          

          
             

          

        

      

       

       

      (e)           Adjustment for
Reorganization.  If there shall occur any reorganization,
recapitalization, reclassification, consolidation, merger or other transaction
involving the Company in which the Common Stock is converted into or exchanged
for securities, cash or other property (other than a transaction covered by
subsections 2(a), 2(b) or 2(d)) (collectively, a “Reorganization”), then,
following such Reorganization, the Registered Holder shall receive upon exercise
hereof the kind and amount of securities, cash or other property which the
Registered Holder would have been entitled to receive pursuant to such
Reorganization if such exercise had taken place immediately prior to such
Reorganization.  In any such case, appropriate adjustment (as
determined in good faith by the Board) shall be made in the application of the
provisions set forth herein with respect to the rights and interests thereafter
of the Registered Holder, to the end that the provisions set forth in this
Section 2 (including provisions with respect to changes in and other adjustments
of the Purchase Price) shall thereafter be applicable, as nearly as reasonably
may be, in relation to any securities, cash or other property thereafter
deliverable upon the exercise of this Warrant.

       

      (f)           Certificate as to
Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Purchase Price pursuant to this Section 2, the Company at
its expense shall, as promptly as reasonably practicable but in any event not
later than 10 days thereafter, compute such adjustment or readjustment in
accordance with the terms hereof and furnish to the Registered Holder a
certificate setting forth such adjustment or readjustment (including the kind
and amount of securities, cash or other property for which this Warrant shall be
exercisable and the Purchase Price) and showing in detail the facts upon which
such adjustment or readjustment is based.  The Company shall, as
promptly as reasonably practicable after the written request at any time of the
Registered Holder (but in any event not later than 5 days thereafter), furnish
or cause to be furnished to the Registered Holder a certificate setting forth
(i) the Purchase Price then in effect and (ii) the number of shares of
Common Stock and the amount, if any, of other securities, cash or property which
then would be received upon the exercise of this Warrant.

       

      3.           Fractional
Shares.  This Warrant may not be exercised for any fractional
shares.

       

      4.           Investment
Representations.  The initial Registered Holder represents and
warrants to the Company as follows:

       

      (a)           Investment.  It
is acquiring the Warrant, and (if and when it exercises this Warrant) it will
acquire the Warrant Shares, for its own account for investment and not with a
view to, or for sale in connection with, any distribution thereof, nor with any
present intention of distributing or selling the same; and the Registered Holder
has no present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition thereof.

       

      (b)           Accredited
Investor.  The Registered Holder is an "accredited investor" as
defined in Rule 501(a) under the Securities Act of 1933, as amended (the
“Act”).

       

      (c)           Experience.  The
Registered Holder has made such inquiry concerning the Company and its business
and personnel as it has deemed appropriate; and the Registered Holder has
sufficient knowledge and experience in finance and business that it is capable
of evaluating the risks and merits of its investment in the
Company.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

       

      5.           Transfers,
etc.

       

      (a)           This
Warrant and the Warrant Shares shall not be sold or transferred unless either
(i) the resale thereof shall first have been registered under the Act, or
(ii) the Company first shall have been furnished with an opinion of legal
counsel, reasonably satisfactory to the Company, to the effect that such sale or
transfer is exempt from the registration requirements of the
Act.  Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which
is an entity to a wholly owned subsidiary of such entity, a transfer by a
Registered Holder which is a partnership to a partner of such partnership or a
retired partner of such partnership or to the estate of any such partner or
retired partner, or a transfer by a Registered Holder which is a limited
liability company to a member of such limited liability company or a retired
member or to the estate of any such member or retired member, provided that the
transferee in each case agrees in writing to be subject to the terms of this
Section 5, or (ii) a transfer made in accordance with Rule 144 or
Rule 144A under the Act.

       

      (b)           Each
certificate representing Warrant Shares shall bear a legend substantially in the
following form:

       

      “THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
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, 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.

       

      UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST NOT TRADE THE SECURITY IN CANADA BEFORE THE DATE THAT IS 4 MONTHS AND A DAY
AFTER THE LATER OF (I) [INSERT THE DISTRIBUTION
DATE], AND (II) THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY
PROVINCE OR TERRITORY.”

       

      The
foregoing legend shall be removed from the certificates representing any Warrant
Shares, at the request of the holder thereof, at such time as they become
eligible for resale pursuant to Rule 144(k) under the Act or any successor
rule thereto.

       

      (c)           The
Company will maintain a register containing the name and address of the
Registered Holder of this Warrant.  The Registered Holder may change
its address as shown on the warrant register by written notice to the Company
requesting such change.

       

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

       

      (d)           Subject
to the provisions of Section 5 hereof and compliance with all applicable laws,
including, without limitation, Canadian and United States federal, provincial
and state
securities laws, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant with a properly executed
assignment (in the form of Exhibit II
hereto) at the principal office of the Company (or, if another office or agency
has been designated by the Company for such purpose, then at such other office
or agency).

       

      6.           No
Impairment.  The Company will not, by amendment of its charter
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Registered Holder against impairment.

       

      7.           Notices of Record Date,
etc.  In the event:

       

      (a)           the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time deliverable upon the exercise of this Warrant) for the
purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right;
or

       

      (b)           of
any capital reorganization of the Company, any reclassification of the Common
Stock of the Company, any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity and its Common Stock is not converted into or exchanged
for any other securities or property), or any transfer of all or substantially
all of the assets of the Company; or

       

      (c)           of
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

       

      then, and
in each such case, the Company will send or cause to be sent to the Registered
Holder a notice specifying, as the case may be, (i) the record date for such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such other stock or securities at the
time deliverable upon the exercise of this Warrant) shall be entitled to
exchange their shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up.  Such notice shall be sent at least 15 days prior to the
record date or effective date for the event specified in such
notice.

       

      8.           Reservation of
Stock.  The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property, as
from time to time shall be issuable upon the exercise of this
Warrant.

       

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      9.           Exchange or Replacement of
Warrants.

      (a)           Upon
the surrender by the Registered Holder, properly endorsed, to the Company at the
principal office of the Company, the Company will, subject to the provisions of
Section 5 hereof, issue and deliver to or upon the order of the Registered
Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in
the name of the Registered Holder or as the Registered Holder (upon payment by
the Registered Holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock (or other securities, cash and/or property) then issuable upon exercise of
this Warrant.

       

      (b)           Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company will
issue, in lieu thereof, a new Warrant of like tenor.

       

      10.           Notices.  All
notices and other communications from the Company to the Registered Holder in
connection herewith shall be mailed by certified or registered mail, postage
prepaid, or sent via a reputable nationwide overnight courier service
guaranteeing next business day delivery, to the address last furnished to the
Company in writing by the Registered Holder.  All notices and other
communications from the Registered Holder to the Company in connection herewith
shall be mailed by certified or registered mail, postage prepaid, or sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, to the Company at its principal office set forth below.  If
the Company should at any time change the location of its principal office to a
place other than as set forth below, it shall give prompt written notice to the
Registered Holder and thereafter all references in this Warrant to the location
of its principal office at the particular time shall be as so specified in such
notice. All such notices and communications shall be deemed delivered
(i) two business days after being sent by certified or registered mail,
return receipt requested, postage prepaid, or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery.

       

      11.           No Rights as
Stockholder.  Until the exercise of this Warrant, the
Registered Holder shall not have or exercise any rights by virtue hereof as a
stockholder of the Company.  Notwithstanding the foregoing, in the
event (i) the Company effects a split of the Common Stock by means of a
stock dividend and the Purchase Price of and the number of Warrant Shares are
adjusted as of the date of the distribution of the dividend (rather than as of
the record date for such dividend), and (ii) the Registered Holder
exercises this Warrant between the record date and the distribution date for
such stock dividend, the Registered Holder shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock
acquired upon such exercise, notwithstanding the fact that such shares were not
outstanding as of the close of business on the record date for such stock
dividend.

       

      12.           Amendment or
Waiver.  Any term of this Warrant may be amended or waived only
by an instrument in writing signed by the party against which enforcement of the
change or waiver is sought.  No waivers of any term, condition or
provision of this Warrant, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.

       

      13.           Section
Headings.  The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.

       

      
        
           

        

        
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      14.           Governing
Law.  This Warrant will be governed by and construed in
accordance with the internal laws of the State of California (without reference
to the conflicts of law provisions thereof).

       

      15.           Facsimile Signatures.
This Warrant may be executed by facsimile signature.

       

      EXECUTED
as of the Date of Issuance indicated above.

       

      T3
MOTION, INC.

       

      By:________________________________

       

      Name:

       

      Title:

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      EXHIBIT
I

       

      PURCHASE
FORM

       

      To:_________________                                                                                                                         Dated:____________

       

      The undersigned, pursuant to the
provisions set forth in the attached Warrant (No. ___), hereby elects to
purchase ____ shares of the Common Stock of T3 Motion, Inc. covered by such
Warrant (the “Shares”).

       

      The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant.  Such payment takes
the form of $______ in lawful money of the United States.

       

      The
undersigned represents and warrants that it is acquiring the Shares for its own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof, nor with any present intention of distributing or
selling the same; and the Registered Holder has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or commitment
providing for the disposition thereof.

       

      The
undersigned represents and warrants that it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act of 1933, as
amended.

       

      

       

                      Signature:   ______________________

       

                      Address:    _______________________

       

                      _______________________

              

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      EXHIBIT
II

       

      ASSIGNMENT
FORM

       

      FOR VALUE
RECEIVED, ________________________________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant (No.
____) with respect to the number of shares of Common Stock of T3 Motion, Inc.
covered thereby set forth below, unto:

       

      
        	
                Name of
      Assignee

              	
                Address

              	
                No. of
      Shares

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

       

       

      Dated:_____________________Signature:________________________________

       

      Signature
Guaranteed:

       

      By:
_______________________

       

      The
signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.

       

      

       

      

       

      
        
           

        

        
          -10-ex10_14.htm

    
      

        
          

        
                                                                                                                                      

        

        INVESTOR
RIGHTS AGREEMENT

         

        

         

        INVESTOR RIGHTS AGREEMENT
(this "Agreement"),
dated as of December 31, 2007, by and among T3 Motion, Inc., a Delaware
corporation (the "Company"), and Immersive Media
Corp., an Alberta, Canada corporation ("Purchaser").

         

        WHEREAS:

         

        A.           In
connection with the Securities Purchase Agreement by and among the parties
hereto dated December __, 2007 (the "Securities Purchase
Agreement"), the Company, has agreed, upon the terms and subject to the
conditions set forth in the Securities Purchase Agreement, to issue and sell to
Purchaser among other things (i)  shares (the "Common Shares") of the
Company's common stock, $0.001 par value per share (the "Common Stock"), and (ii)
warrants (the "Warrants"), which will be
exercisable to purchase shares of Common Stock (as exercised collectively, the
"Warrant
Shares").

         

        B.           To induce the Purchaser to execute and
deliver the Securities Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and
the rules and regulations thereunder, or any similar successor statute
(collectively, the "1933 Act"), and applicable state securities
laws.

         

        NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and each of the Purchaser hereby agree as
follows:

         

        1.      Definitions.

         

        Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Securities Purchase Agreement.  As used in
this Agreement, the following terms shall have the following
meanings:

         

        a.      "Business Day" means any day
other than Saturday, Sunday or any other day on which commercial banks in the
State of California are authorized or required by law to remain
closed.

         

        b.      "Closing Date" shall have the
meaning set forth in the Securities Purchase Agreement.

         

        c.      "Effective Date" means the date
the Registration Statement has been declared effective by the SEC.

         

        d.      "Effectiveness Deadline" means,
with respect to the First Registration Statement, the date which is 90 days
after the Filing Date of the First Registration Statement, or if there is a
review of such Registration Statement by the SEC, 150 days after the Filing Date
of the First Registration Statement; and with respect to the Second Registration
Statement, the date which is 90 days after the Filing Date of the Second
Registration Statement, or if there is a review of such Registration Statement
by the SEC, 150 days after the Filing Date of the Second Registration
Statement.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            
            

            
              

            

          

          
             

          

        

         

         

        e.      "Filing Date" means the date
the applicable Registration Statement has been filed with the SEC.

         

        f.      "Filing Deadline" means, with
respect to the First Registration Statement,  45 days after the date
hereof and, if necessary, with respect to the Second Registration Statement, 30
days after the SEC shall permit the registration of the remaining Registrable
Securities under Rule 415.

         

        g.      "Investor" means a Purchaser or
any transferee or assignee thereof to whom a Purchaser assigns its rights under
this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any transferee or assignee thereof to
whom a transferee or assignee assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9.

         

        h.      "Person" means an individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof.

         

        i.      "register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.

         

        j.      "Registrable Securities" means
(i) the Common Shares, (ii) the Warrant Shares issued or issuable upon
exercise of the Warrants, and (iii) any shares of capital stock of the Company
issued or issuable with respect to the Warrant Shares and the Warrants as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise.

         

        k.      "Registration Statement" means
the registration statement or registration statements of the Company filed under
the 1933 Act covering the Registrable Securities.

         

        l.      "Required Registration Amount"
for the Registration Statement means the sum of (i) 100% of the Common Shares
issued as of the Business Day immediately preceding the applicable date of
determination, and (ii) 100% the number of Warrant Shares issued and issuable
pursuant to the Warrants as of the Business Day immediately preceding the
applicable date of determination; provided, however, that the 100% of the number
of the Common Shares shall be reduced to the extent necessary in the event the
SEC will not declare the Registration Statement effective without such
reduction.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -2-

            
              

            

          

          
             

          

        

        m.       "Rule 415" means Rule 415 under
the 1933 Act or any successor rule providing for offering securities on a
continuous or delayed basis.

         

        n.      "SEC" means the United States
Securities and Exchange Commission.

         

        2.      Registration.

         

        a.      Mandatory
Registration.

         

        (1)           First Registration
Statement.  The Company shall prepare, and, as soon as
practicable but in no event later than the Filing Deadline, file with the SEC
under the 1933 Act, a Registration Statement on Form S-1 or Form S-3 covering
the resale of all of the Registrable Securities.  In the event that
Form S-1 or Form S-3 is unavailable for such a registration, the Company shall
use such other form as is available for such a registration on another
appropriate form reasonably acceptable to the Investors.

         

        (2)           Second Registration
Statement. In the event that the SEC has limited the number of shares
that may be registered pursuant to Rule 415 under the First Registration
Statement, the Company shall prepare, and, as soon as practicable but in no
event later than the Filing Deadline, file with the SEC the Registration
Statement on Form S-1 or Form S-3 covering the resale of the balance of the
Required Registration Amount.  In the event that Form S-1 or Form S-3
is unavailable for such a registration, the Company shall use such other form as
is available for such a registration on another appropriate form reasonably
acceptable to the Investors.

         

        (3)           The
Company shall use its best efforts to have the Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than the
Effectiveness Deadline.  The Company shall cause such Registration
Statement to remain at all times effective for a period of 24 months from the
date of effectiveness of such Registration Statement (“Termination Date”), and shall
file and maintain the effectiveness of such further Registration Statements, in
accordance with the terms hereof, as may be required to ensure that a
Registration Statement covering all Registrable Securities previously registered
on the Registration Statement that is subject to the Termination Date and not
otherwise eligible to be sold under Rule 144(k) or any successor provision, is
at all times effective under the 1933 Act until the date that is six years from
the Closing Date.

         

        b.      Piggyback
Registration.  After the date hereof, if the Company proposes
to register (including for this purpose a registration statement effected by the
Company for stockholders ) any of its stock or other securities under the 1933
Act (other than a registration relating solely to the sale of securities to
participants in a Company employee stock or similar plan on Form S-8 and an
exchange registration on Form S-4) and all of the Registrable Securities are not
then subject to effective or filed registration statements,  the
Company shall, at such time, promptly give each holder of Registrable Securities
written notice of such registration.  Upon the written request of each
holder of Registrable Securities given within twenty (20) days after mailing of
such notice by the Company, the Company shall, cause in such registration to be
registered
under the 1933 Act all of the Registrable Securities that each such holder has
requested to be registered.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -3-

            
              

            

          

          
             

          

        

         

        3.      Related
Obligations.

         

        At such
time as the Company is obligated to file a Registration Statement with the SEC
pursuant to Section 2(a), the Company will use its best efforts to effect the
registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have the
following obligations:

         

        a.      The
Company shall submit to the SEC, within two (2) Business Days after the Company
learns that no review of a particular Registration Statement will be made by the
staff of the SEC or that the staff has no further comments on a particular
Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
48 hours after the submission of such request.  The Company shall
provide notice in accordance herewith to each holder of Registrable Securities
of the effectiveness of the Registration Statement.  Subject to
Section 2(a)(3), the Company shall keep each Registration Statement effective
under the 1933 Act at all times until the earlier of (i) the date as of which
the Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or any
successor thereto) promulgated under the 1933 Act or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered by such
Registration Statement (the "Registration
Period").  The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.

         

        b.      The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as all of such
Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement.

         

        c.      Upon
reasonable request, provide copies to and permit counsel designated by the
Investors to review each Registration Statement and all amendments and
supplements thereto prior to their filing with the SEC and not file any document
to which such counsel reasonably objects.

         

        d.      Upon
reasonable request, the Company shall furnish to the Investors and their legal
counsel, without charge, (i) copies of any correspondence from the SEC or the
staff of the SEC to the Company or its representatives relating to any
Registration Statement, (ii) promptly
after the same is prepared and filed with the SEC, such reasonable number of
copies of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, as may be requested by an Investor, and all exhibits and (iii) upon
the effectiveness of any Registration Statement, one copy of the prospectus
included in such Registration Statement and all amendments and supplements
thereto.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -4-

            
              

            

          

          
             

          

        

         

        e.      Upon
request, the Company shall furnish to each Investor whose Registrable Securities
are included in any Registration Statement, without charge, (i) promptly after
the same is prepared and filed with the SEC, such reasonable number of copies of
such Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, as
may be requested by an Investor, all exhibits and each preliminary prospectus
and  (ii) such other documents, including copies of any preliminary or
final prospectus, as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such
Investor.

         

        f.      The
Company shall notify each Investor in writing of the happening of any event, as
promptly as practicable after becoming aware of such event, as a result of which
the prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, non-public
information), and, promptly prepare and file a supplement or amendment to such
Registration Statement to correct such untrue statement or
omission.

         

        g.      The
Company shall use its best efforts to prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify each Investor who holds Registrable Securities being sold of the issuance
of such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.  The Company
shall provide a transfer agent and registrar for all Registrable Securities
registered pursuant to a Registration Statement and a CUSIP number for all such
Registrable Securities, in each case not later than the Effective
Date.

         

        h.      The
Company shall cooperate with the Investors who hold Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, as the Investors may reasonably request and registered in such names as the
Investors may request.

         

        i.      The
Company shall use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with, qualified under or approved
by such other governmental agencies or authorities, including, without
limitation, under applicable state and provincial securities laws, as may be
necessary to consummate the disposition
of such Registrable Securities; provided, that, the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to
service of process in any such jurisdiction.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -5-

            
              

            

          

          
             

          

        

         

        j.      The
Company shall otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC in connection with any registration hereunder, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company’s first full calendar quarter after the effective
date of the Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158
thereunder.

         

        k.      Notwithstanding
anything to the contrary herein, at any time after the Effective Date, for not
more than 45 consecutive days or for a total of not more than 60 days in any
twelve (12) month period, the Company may delay the disclosure of material,
non-public information concerning the Company (A) the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company
and its outside legal counsel, in the best interest of the Company and, in the
opinion of counsel to the Company, otherwise required or (B) to the extent the
Company is required to file a post-effective amendment to the Registration
Statement (a "Grace
Period");  provided, that the Company shall promptly (a) notify
the Investors in writing of the existence of (but in no event, without the prior
written consent of a Investor, shall the Company disclose to such Investor any
of the facts or circumstances regarding) material non-public information giving
rise to a Grace Period, (b) advise the Investors in writing to cease all sales
under the Registration Statement until the end of the Grace Period and (c) use
commercially reasonable efforts to terminate a Grace Period as promptly as
practicable.

         

        l.      The
Company shall cause all Registrable Securities registered pursuant to the
Registration Statement to be listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed.

         

        m.           The
Company shall permit any holder of Registrable Securities which holder, in its
reasonable judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of the Registration
Statement and to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of such holder and its
counsel should be included so long as such material is reasonably acceptable to
the Company.

         

        4.      Obligations of the
Investors.

         

        a.      At
least four (4) Business Days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify each Investor in writing of the
information the Company requires from each such Investor if such Investor elects
to have any of such Investor's Registrable Securities included in such
Registration Statement.  It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

           

        

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -6-

            
              

            

          

          
             

          

        

        b.      Each
Investor, by such Investor's acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Investor has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.

         

        c.      Each
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(f) or 3(g), such
Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
prospectus or receipt of notice that no supplement or amendment is
required.

         

        d.      Each
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it or an exemption therefrom in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

         

        5.      Expenses of
Registration.

         

        All
expenses, other than underwriting discounts and commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
legal counsel for the Company shall be paid by the Company.

         

        6.      Indemnification.

         

        In the
event any Registrable Securities are included in a Registration Statement under
this Agreement:

         

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -7-

            
              

            

          

          
             

          

        

                        a.      To the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend each Investor, the directors, officers, members,
partners, employees, agents, representatives of, and each Person, if any, who
controls any Investor within the meaning of the 1933 Act or the 1934 Act (each,
an "Indemnified
Person"), against any losses, claims, damages, liabilities, judgments,
fines, penalties, charges, costs, reasonable attorneys' fees, amounts paid in
settlement or expenses, joint or several, (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified
Damages"), to which any of them may become subject insofar as such Claims
(or actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon:  (i) any
untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered ("Blue
Sky Filing"), or the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of such Registration Statement, or contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements therein
were made, not misleading, (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement or (iv) any violation of this Agreement (the matters in
the foregoing clauses (i) through (iv) being, collectively, "Violations").  Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly
as such expenses are incurred and are due and payable, for any legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim.  Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section
6(a):  (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such prospectus was timely made available by the Company pursuant to
Section 3(e) and (ii) shall not apply to amounts paid in settlement of any Claim
if such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed.  Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section
9.

         

        b.      In
connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified
Party"), against any Claim or Indemnified Damages to which any of them
may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon any Violation,
in each case to the extent, and only to the extent, that such Violation occurs
in reliance upon and in conformity with written information furnished to the
Company by such Investor expressly for use in connection with such Registration
Statement, including without limitation material required to be inserted
pursuant to Section 3(m) ; and, subject to Section 6(c), such Investor will
reimburse any legal or other expenses reasonably incurred by an Indemnified
Party in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the gross proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement.  Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9.  Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Section 6(b)
with respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -8-

            
              

            

          

          
             

          

        

         

        c.      Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own legal counsel with the fees and expenses
of not more than one legal counsel for such Indemnified Person or Indemnified
Party to be paid by the indemnifying party, if, in the reasonable opinion of
legal counsel retained by the indemnifying party, the representation by such
legal counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or potential differing
interests between such Indemnified Person or Indemnified Party and any other
party represented by such legal counsel in such proceeding.  In the
case of an Indemnified Person, legal counsel referred to in the immediately
preceding sentence shall be selected by the Investors holding at least a
majority in
interest of the Registrable Securities (“Required
Holders”) included in the Registration Statement to which the Claim
relates.  The Indemnified Party or Indemnified Person shall cooperate
fully with the indemnifying party in connection with any negotiation or defense
of any such action or Claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person which relates to such action or Claim.  The
indemnifying party shall keep the Indemnified Party or Indemnified Person
reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto.  No indemnifying party
shall be liable for any settlement of any action, claim or proceeding effected
without its prior written consent, provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its
consent.  No indemnifying party shall, without the prior written
consent of the Indemnified Party or Indemnified Person, consent to entry of any
judgment or enter into any settlement or other compromise which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation, and such settlement shall not include any
admission as to fault on the part of the Indemnified Party.  Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made.  The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -9-

            
              

            

          

          
             

          

        

         

         

        d.      The
indemnification required by this Section 6 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or Indemnified Damages are incurred.

         

        e.      The
indemnity agreements contained herein shall be in addition to  (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

         

        7.      Contribution.

         

        To the
extent any indemnification by an Indemnifying Party is prohibited or limited by
law, the Indemnifying Party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that:  (i) no
Person involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to contribution from any
Person involved in such sale of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

         

        8.      Reports Under the 1934
Act.

         

        With a
view to making available to the Investors the benefits of Rule 144 promulgated
under the 1933 Act ("Rule
144"), Rule 144A promulgated under the 1933 Act ("Rule 144A") or any other similar rule or
regulation of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration, following
effectiveness of the Registration Statement, the Company agrees to:

         

        a.      at
all times, make and keep public information available, as those terms are
understood and defined in Rule 144;

         

        b.      file
with, or furnish to, the SEC all reports and other documents required to be
filed or furnished by the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements and the filing or furnishing of
such reports and other documents is required in order to sell securities
pursuant to Rule 144, Rule 144A or any other
rule or regulation of the SEC allowing it to sell any such securities without
registration; and

           

        

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -10-

            
              

            

          

          
             

          

        

        c.      so
long as an Investor owns any Registrable Securities, furnish to such Investor
forthwith upon reasonable request:  a written statement by the Company
as to its compliance with the reporting requirements of Rule 144, and of the
1934 Act (at any time after it has become subject to such reporting
requirements); unless it is available on EDGAR, a copy of the most recent annual
or quarterly report of the Company filed with the SEC; and unless they are
available on EDGAR, such other reports and documents as an Investor may
reasonably request in connection with availing itself of any rule or regulation
of the SEC allowing it to sell any such securities without
registration.

         

        9.      Assignment of Registration
Rights.

         

        Prior to
the initial declaration by the SEC of the effectiveness of the applicable
Registration Statement, the rights under this Agreement shall be automatically
assignable by the Investors to any transferee of all or any portion of such
Investor's Registrable Securities if:  (i) the Investor agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such securities
by the transferee or assignee is restricted under the 1933 Act or applicable
state securities laws; (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein; and (v) such transfer shall have been made in accordance with
the applicable requirements of the Securities Purchase Agreement.

         

        10.           Amendment of Registration
Rights.

         

        Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investors
holding a majority of the Registrable Securities, calculated on an as converted
basis.  Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.  No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Registrable Securities.

         

        11.           Participation in Future
Financing.

         

        a.      From
the date hereof until the date that is the 18 month anniversary of the Effective
Date, upon any issuance by the Company or any of its Subsidiaries (as such term
is defined in the Securities Purchase Agreement) of Common Stock or warrants,
options, or convertible debt (“Common Stock Equivalents”) for
cash consideration (a “Subsequent Financing”), the
Purchaser shall have the right to participate in up to an amount of the Subsequent
Financing equal to that percentage of the Subsequent Financing (the “Participation Maximum”) equal
to the Purchaser’s percentage ownership of the Common Stock, calculated as of
any determination date assuming the conversion of all Registrable Securities, on
the same terms, conditions and price provided for in the Subsequent
Financing.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -11-

            
              

            

          

          
             

          

        

         

        b.      At
least 15 Business Days prior to the closing of the Subsequent Financing, the
Company shall deliver to the Purchaser a written notice of its intention to
effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice
shall ask such Purchaser if it wants to review the details of such financing
(such additional notice, a “Subsequent Financing
Notice”).  Upon the request of a Purchaser, and only upon a
request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than 10 Business Days after such request, deliver a
Subsequent Financing Notice to such Purchaser.  The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such
Subsequent Financing, the amount of proceeds intended to be raised thereunder
and the Person or Persons through or with whom such Subsequent Financing is
proposed to be effected and shall include a term sheet or similar document
relating thereto as an attachment.

         

        c.      Any
Purchaser desiring to participate in such Subsequent Financing must provide
written notice to the Company by not later than 5:30 p.m. (Calgary time) on the
5th
Business Day after the Purchaser has received the Pre-Notice that the Purchaser
is willing to participate in the Subsequent Financing, the amount of the
Purchaser’s participation, and that the Purchaser has such funds ready, willing,
and available for investment on the terms set forth in the Subsequent Financing
Notice.  If the Company receives no notice from a Purchaser as of such
5th
Business Day, such Purchaser shall be deemed to have notified the Company that
it does not elect to participate.

         

        d.      If
by 5:30 p.m. (Calgary time) on the 5th
Business Day after the Purchaser has received the Pre-Notice,
notifications by the Purchaser of its willingness to participate in the
Subsequent Financing (or to cause their designees to participate) is, in the
aggregate, less than the total amount of the Subsequent Financing, then the
Company may effect the remaining portion of such proposed Subsequent Financing
on the terms and with the Persons set forth in the Subsequent Financing
Notice.

         

        e.      The
Company must provide the Purchaser with a second Subsequent Financing Notice,
and the Purchaser will again have the right of participation set forth above in
this Section 11, if the Subsequent Financing subject to the initial Subsequent
Financing Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 40 Business Days after the date of the
initial Subsequent Financing Notice.

         

        f.      Notwithstanding
the foregoing, this Section 11 shall not apply in respect of (i) an Exempt
Issuance, or (ii) an underwritten public offering of Common Stock. “Exempt Issuance” means the
issuance of (a) shares of Common Stock or options to employees, consultants,
officers or directors of the Company pursuant to any stock or option plan duly
adopted for such purpose by a majority of the non-employee members of the Board
of Directors of the Company or a majority of the members of a committee of
non-employee directors
of the Company established for such purpose, (b) securities upon the exercise or
exchange of or conversion of any securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or
conversion price of such securities, (c) shares issuable to institutional
lenders to the Company in connection with a loan transaction, and (d) securities
issued pursuant to acquisitions or strategic transactions approved by a majority
of the disinterested directors of the Company, provided that any such issuance
shall only be to a Person which is, itself or through its subsidiaries, an
operating company in a business synergistic with the business of the Company and
in which the Company receives benefits in addition to the investment of funds,
but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -12-

            
              

            

          

          
             

          

        

         

         

        12.           Miscellaneous.

         

        a.      A
Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities.  If
the Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the such
record owner of such Registrable Securities.

         

        b.      Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same.  The addresses and facsimile numbers for such
communications shall as set forth in Section 8(f) of the Securities Purchase
Agreement, or to such other address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change.  Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

         

        c.      Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.

         

        d.      This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of California without regard to the conflict of law principles
thereof.  Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of California located in Los
Angeles County and the United States District Court for the Central District of
California for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated
hereby.  Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this
Agreement.  Each of the parties hereto irrevocably consents to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE
PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -13-

            
              

            

          

          
             

          

        

         

         

        e.      This
Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement) and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof.  There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein and
therein.  This Agreement, the other Transaction Documents and the
instruments referenced herein and therein supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.

         

        f.      Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of
and be binding upon the permitted successors and assigns of each of the parties
hereto.

         

        g.      The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

         

        h.      This
Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same
agreement.  This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

         

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

         

        j.      All
consents and other determinations required to be made by the Investors pursuant
to this Agreement shall be made, unless otherwise specified in this Agreement,
by the Required Holders.

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -14-

            
              

            

          

          
             

          

        

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

         

        l.      This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.

         

        

         

         

        * * * * *
*

        

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -15-

            
              

            

          

          
             

          

        

        IN WITNESS WHEREOF, the
Purchaser and the Company have caused their respective signature page to this
Investor Rights agreement to be duly executed as of the date first written
above.

         

        

        
          
            	 	COMPANY:	 
	 	 T3 MOTION,
INC.	 
	
                     

                  	
                    By:
      

                  	/s/ 	 
	 	 	Ki
      Nam	 
	 	 	Chief
      Executive Officer	 
	 	 	 	 

          

        

         

        

         

        
          
            	 	PURCHASER:	 
	 	 IMMERSIVE MEDIA CORP.	 
	
                     

                  	
                    By:
      

                  	/s/ 	 
	 	 	Name 	 
	 	 	Chief
      Executive Officer	 
	 	 	 	 

          

         

         

        
          
            INVESTORS
RIGHTS AGREEMENT

             

          

          
            -16-

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