Document:

Exhibit 10.5

 

LOCK-UP AGREEMENT

 

December
6, 2007

 

Each
Purchaser referenced below:

 

	
  Re:

  	
   

  	
  Securities Purchase Agreement, dated as of December 6, 2007 (the
  “Purchase Agreement”), between Ecotality, Inc., a Nevada corporation
  (the “Company”) and the purchasers signatory thereto (each, a “Purchaser”
  and, collectively, the “Purchasers”)

  

 

Ladies
and Gentlemen:

 

Defined
terms not otherwise defined in this letter agreement (the “Letter Agreement”)
shall have the meanings set forth in the Purchase Agreement. Pursuant to
Section 2.2(a) of the Purchase Agreement and in satisfaction of a condition of
the Company’s obligations under the Purchase Agreement, the undersigned
irrevocably agrees with the Company that, from the date hereof until 90
calendar days after the Effective Date (such period, the “Restriction Period”),
the undersigned will not offer, sell, 
contract to sell, hypothecate, pledge or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the undersigned or any
Affiliate of the undersigned or any person in privity with the undersigned or
any Affiliate of the undersigned), directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Exchange Act with respect to, any shares of Common Stock or Common
Stock Equivalents beneficially owned, held or hereafter acquired by the
undersigned (the “Securities”). Beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act. In order to enforce this
covenant, the Company shall impose irrevocable stop-transfer instructions
preventing the Transfer Agent from effecting any actions in violation of this
Letter Agreement.

 

The
undersigned acknowledges that the execution, delivery and performance of this
Letter Agreement is a material inducement to each Purchaser to complete the
transactions contemplated by the Purchase Agreement and that each Purchaser
(which shall be a third party beneficiary of this Letter Agreement) and the
Company shall be entitled to specific performance of the undersigned’s
obligations hereunder. The undersigned hereby represents that the undersigned
has the power and authority to execute, deliver and perform this Letter Agreement,
that the undersigned has received adequate consideration therefor and that the
undersigned will indirectly benefit from the closing of the transactions
contemplated by the Purchase Agreement.

 

This Letter Agreement may not be amended or
otherwise modified in any respect without the written consent of each of the
Company, each Purchaser and the undersigned. This Letter Agreement shall be
construed and enforced in accordance with the laws of the State of New York
without regard to the principles of conflict of laws. The undersigned hereby
irrevocably

 

 

submits to the exclusive jurisdiction of the United
States District Court sitting in the Southern District of New York and the
courts of the State of New York located in Manhattan, for the purposes of any
suit, action or proceeding arising out of or relating to this Letter Agreement,
and hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that (i) it is not personally subject to the jurisdiction
of such court, (ii) the suit, action or proceeding is brought in an
inconvenient forum, or (iii) the venue of the suit, action or proceeding is
improper. The undersigned
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy thereof
sent to the Company at the address in effect for notices to it under the
Purchase Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. The undersigned hereby waives
any right to a trial by jury. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. The
undersigned agrees and understands that this Letter Agreement does not intend
to create any relationship between the undersigned and each Purchaser and that
each Purchaser is not entitled to cast any votes on the matters herein
contemplated and that no issuance or sale of the Securities is created or
intended by virtue of this Letter Agreement.

 

By
its signature below, the Company’s Transfer Agent hereby acknowledges and
agrees that, reflecting this Letter Agreement, it has placed an irrevocable
stop transfer instruction on all Securities beneficially owned by the
undersigned until the end of the Restriction Period. This Letter Agreement
shall be binding on successors and assigns of the undersigned with respect to
the Securities and any such successor or assign shall enter into a similar
agreement for the benefit of the Purchasers.

 

***
SIGNATURE PAGE FOLLOWS***

 

2

 

This Letter Agreement may be executed in two or more
counterparts, all of which when taken together may be considered one and the
same agreement.

 

 

	
   

  	
   

  
	
  Signature

  
	
   

  
	
   

  	
   

  
	
  Print Name

  
	
   

  
	
   

  	
   

  
	
  Position in Company

  
	
   

  
	
  Address for Notice:

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  
	
  Number of shares of Common Stock

  
	
   

  
	
   

  	
   

  
	
  Number of shares of Common Stock underlying subject to warrants,
  options, debentures or other convertible securities

  
					

 

By
signing below, the Company agrees to enforce the restrictions on transfer set
forth in this Letter Agreement.

 

Ecotality, Inc.

 

	
  By: 

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

 

Acknowledged
and agreed to

as
of the date set forth above:

 

Holladay Stock Transfer,
Inc.

 

	
  By: 

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  

 

3Exhibit 10.6

 

SUBSIDIARY GUARANTEE

 

SUBSIDIARY GUARANTEE, dated as of December 6, 2007 (this “Guarantee”),
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the “Guarantors”), in favor of
the purchasers signatory (the “Purchasers”) to that certain Securities
Purchase Agreement, dated as of the date hereof, between Ecotality, Inc., a
Nevada corporation (the “Company”) and the Purchasers.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Securities
Purchase Agreement, dated as of the date hereof, by and between the Company and
the Purchasers (the “Purchase Agreement”), the Company has agreed to
sell and issue to the Purchasers, and the Purchasers have agreed to purchase
from the Company the Company’s Secured Convertible Debentures, due June     , 2010 (the “Debentures”),
subject to the terms and conditions set forth therein; and

 

WHEREAS, each Guarantor will directly benefit from the extension of
credit to the Company represented by the issuance of the Debentures; and

 

NOW, THEREFORE, in consideration of the
premises and to induce the Purchasers to enter into the Purchase Agreement and
to carry out the transactions contemplated thereby, each Guarantor hereby
agrees with the Purchasers as follows:

 

1.             Definitions. Unless otherwise defined herein, terms defined in the Purchase Agreement and used herein shall have the meanings given to them in the Purchase Agreement. The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The following terms shall have the following meanings:

 

“Guarantee” means this Subsidiary
Guarantee, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Obligations” means, in addition to all other costs
and expenses of collection incurred by Purchasers in enforcing any of such
Obligations and/or this Guarantee, all of the liabilities and obligations
(primary, secondary, direct, contingent, sole, joint or several) due or to
become due, or that are now or may be hereafter contracted or acquired, or
owing to, of any Debtor to the Secured Parties, including, without limitation,
all obligations under this Agreement, the Debentures, this Guarantee and any
other instruments, agreements or other

 

1

 

documents
executed and/or delivered in connection herewith or therewith, in each case,
whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion
of such obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from any of the
Secured Parties as a preference, fraudulent transfer or otherwise as such
obligations may be amended, supplemented, converted, extended or modified from
time to time. Without limiting the generality of the foregoing, the term “Obligations”
shall include, without limitation: (i) principal of, and interest on the
Debentures and the loans extended pursuant thereto; (ii) any and all other
fees, indemnities, costs, obligations and liabilities of the Debtors from time
to time under or in connection with this Agreement, the Debentures, the
Guarantee and any other instruments, agreements or other documents executed
and/or delivered in connection herewith or therewith; and (iii) all amounts
(including but not limited to post-petition interest) in respect of the
foregoing that would be payable but for the fact that the obligations to pay
such amounts are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Debtor.

 

2.             Guarantee.
 

(a)           Guarantee.

 

(i)            The Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to the Purchasers and
their respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.

 

(ii)           Anything herein or in any other Transaction
Document to the contrary notwithstanding, the maximum liability of each
Guarantor hereunder and under the other Transaction Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws, including laws relating to the insolvency of debtors,
fraudulent conveyance or transfer or laws affecting the rights of creditors
generally (after giving effect to the right of contribution established in
Section 2(b)).

 

(iii)          Each Guarantor agrees that the Obligations
may at any time and from time to time exceed the amount of the liability of
such Guarantor hereunder without impairing the guarantee

 

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                contained
in this Section 2 or affecting the rights and remedies of the Purchasers
hereunder.

 

(iv)          The
guarantee contained in this Section 2 shall remain in full force and effect
until all the Obligations and the obligations of each Guarantor under the
guarantee contained in this Section 2 shall have been satisfied by payment in
full.

 

(v)           No
payment made by the Company, any of the Guarantors, any other guarantor or any
other Person or received or collected by the Purchasers from the Company, any
of the Guarantors, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Obligations or any payment
received or collected from such Guarantor in respect of the Obligations),
remain liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations are paid in full.

 

(vi)          Notwithstanding
anything to the contrary in this Agreement, with respect to any defaulted
non-monetary Obligations the specific performance of which by the Guarantors is
not reasonably possible (e.g. the issuance of the Company’s Common Stock), the
Guarantors shall only be liable for making the Purchasers whole on a monetary
basis for the Company’s failure to perform such Obligations in accordance with
the Transaction Documents.

 

(b)           Right of Contribution. Each Guarantor
hereby agrees that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Guarantor shall be
entitled to seek and receive contribution from and against any other Guarantor
hereunder which has not paid its proportionate share of such payment. Each
Guarantor’s right of contribution shall be subject to the terms and conditions
of Section 2(c). The provisions of this Section 2(b) shall in no respect limit
the obligations and liabilities of any Guarantor to the Purchasers, and each
Guarantor shall remain liable to the Purchasers for the full amount guaranteed
by such Guarantor hereunder.

 

(c)           No Subrogation. Notwithstanding any
payment made by any Guarantor hereunder or any set-off or application of funds
of any Guarantor by

 

3

 

the Purchasers, no Guarantor shall be entitled to be subrogated to any
of the rights of the Purchasers against the Company or any other Guarantor or
any collateral security or guarantee or right of offset held by the Purchasers
for the payment of the Obligations, nor shall any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder, until all
amounts owing to the Purchasers by the Company on account of the Obligations
are paid in full. If any amount shall be paid to any Guarantor on account of
such subrogation rights at any time when all of the Obligations shall not have
been paid in full, such amount shall be held by such Guarantor in trust for the
Purchasers, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Purchasers in the exact
form received by such Guarantor (duly indorsed by such Guarantor to the
Purchasers, if required), to be applied against the Obligations, whether
matured or unmatured, in such order as the Purchasers may determine.

 

(d)           Amendments, Etc. With Respect to the
Obligations. Each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any Guarantor
and without notice to or further assent by any Guarantor, any demand for
payment of any of the Obligations made by the Purchasers may be rescinded by
the Purchasers and any of the Obligations continued, and the Obligations, or
the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Purchasers, and the Purchase Agreement and the other Transaction Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Purchasers may deem advisable from time to time, and any collateral security, guarantee
or right of offset at any time held by the Purchasers for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. The
Purchasers shall have no obligation to protect, secure, perfect or insure any
Lien at any time held by them as security for the Obligations or for the
guarantee contained in this Section 2 or any property subject thereto.

 

(e)           Guarantee Absolute and Unconditional.
Each Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Purchasers upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee contained
in this Section 2; and all dealings between the Company and any of the
Guarantors, on the one hand, and the Purchasers, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. Each Guarantor waives to the extent
permitted by law diligence, 

 

4

 

presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Company or any of the Guarantors with respect to the
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Purchase Agreement or any other Transaction Document, any
of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Purchasers, (b) any defense, set-off or counterclaim (other than a defense
of payment or performance or fraud or misconduct by Purchasers) which may at
any time be available to or be asserted by the Company or any other Person
against the Purchasers, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Company or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Company for the Obligations, or of such Guarantor under the
guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Purchasers may, but shall be under no
obligation to, make a similar demand on or otherwise pursue such rights and
remedies as they may have against the Company, any other Guarantor or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Purchasers to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Company, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Company, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Purchasers against any Guarantor. For the
purposes hereof, “demand” shall include the commencement and continuance of any
legal proceedings.

 

(f)            Reinstatement. The guarantee
contained in this Section 2 shall continue to be effective, or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or returned by the
Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Company or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Company or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

(g)           Payments. Each Guarantor hereby
guarantees that payments hereunder will be paid to the Purchasers without
set-off or counterclaim in U.S. dollars at the address set forth or referred to
in the Purchase Agreement.

 

5

 

3.             Representations and Warranties. Each Guarantor hereby makes the following representations and warranties to Purchasers as of the date hereof:

 

(a)           Organization and Qualification. The Guarantor is a corporation, duly
incorporated, validly existing and in good standing under the laws of the
applicable jurisdiction set forth on Schedule 1, with the requisite corporate
power and authority to own and use its properties and assets and to carry on
its business as currently conducted. The Guarantor has no subsidiaries other
than those identified as such on the Disclosure Schedules to the Purchase
Agreement. The Guarantor is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, (x) adversely
affect the legality, validity or enforceability of any of this Guaranty in any material
respect, (y) have a material adverse effect on the results of operations,
assets, prospects, or financial condition of the Guarantor or (z) adversely
impair in any material respect the Guarantor’s ability to perform fully on a
timely basis its obligations under this Guaranty (a “Material Adverse Effect”).

 

(b)           Authorization;
Enforcement. The Guarantor
has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Guaranty, and otherwise to carry out its
obligations hereunder. The execution and delivery of this Guaranty by the
Guarantor and the consummation by it of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the part of the
Guarantor. This Guaranty has been duly executed and delivered by the Guarantor
and constitutes the valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

 

(c)           No
Conflicts. The execution, delivery
and performance of this Guaranty by the Guarantor and the consummation by the
Guarantor of the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of its Certificate of Incorporation or
By-laws or (ii) conflict with, constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Guarantor is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Guarantor is subject (including Federal and state securities laws
and regulations), or by which any material property or asset of the Guarantor
is bound or affected, except in the case of each of clauses (ii) and

 

6

 

(iii),
such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as could not, individually or in the aggregate,
have or result in a Material Adverse Effect. The business of the Guarantor is
not being conducted in violation of any law, ordinance or regulation of any governmental
authority, except for violations which, individually or in the aggregate, do
not have a Material Adverse Effect.

 

(d)           Consents
and Approvals. The Guarantor
is not required to obtain any consent, waiver, authorization or order of, or
make any filing or registration with, any court or other federal, state, local,
foreign or other governmental authority or other person in connection with the
execution, delivery and performance by the Guarantor of this Guaranty.

 

(e)           Purchase
Agreement. The representations
and warranties of the Company set forth in the Purchase Agreement as they
relate to such Guarantor, each of which is hereby incorporated herein by
reference, are true and correct as of each time such representations are deemed
to be made pursuant to such Purchase Agreement, and the Purchasers shall be
entitled to rely on each of them as if they were fully set forth herein,
provided that each reference in each such representation and warranty to the
Company’s knowledge shall, for the purposes of this Section 3, be deemed to be
a reference to such Guarantor’s knowledge.

 

(f)            Foreign
Law. Each Guarantor has
consulted with appropriate foreign legal counsel with respect to any of the
above representations for which non-U.S. law is applicable. Such foreign
counsel have advised each applicable Guarantor that such counsel knows of no
reason why any of the above representations would not be true and accurate.
Such foreign counsel were provided with copies of this Subsidiary Guarantee and
the Transaction Documents prior to rendering their advice.

 

4.             Covenants.
 

(a)       Each Guarantor covenants and agrees with the
Purchasers that, from and after the date of this Guarantee until the
Obligations shall have been paid in full, such Guarantor shall take, and/or
shall refrain from taking, as the case may be, each commercially reasonable
action that is necessary to be taken or not taken, as the case may be, so that
no Event of Default is caused by the failure to take such action or to refrain
from taking such action by such Guarantor.

 

(b)       So long as any of the Obligations are
outstanding, unless Purchasers holding at least 75% of the aggregate principal
amount of the then outstanding Debentures shall otherwise consent in writing,
each Guarantor will not directly or indirectly on or after the date of this
Guarantee:

 

i.              other than Permitted Indebtedness (as defined in the Debentures) enter into, create, incur, assume or suffer to exist any

 

7

 

indebtedness for borrowed money of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;
 
ii.             other than Permitted Liens (as defined in the Debentures) enter into, create, incur, assume or suffer to exist any liens of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;
 
iii.            amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder hereunder;
 
iv.            repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its securities or debt obligations;
 
v.             pay cash dividends on any equity securities of the Company;
 
vi.            enter into any transaction with any Affiliate of the Guarantor which would be required to be disclosed in any public filing of the Company with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or
 
vii.           enter into any agreement with respect to any of the foregoing.
 
5.             Miscellaneous.
 

(a)           Amendments in Writing. None of the
terms or provisions of this Guarantee may be waived, amended, supplemented or
otherwise modified except in writing by the Purchasers.

 

(b)           Notices. All notices, requests and
demands to or upon the Purchasers or any Guarantor hereunder shall be effected
in the manner provided for in the Purchase Agreement, provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 5(b).

 

(c)           No Waiver By Course Of Conduct; Cumulative Remedies. The Purchasers shall not by any act (except
by a written instrument pursuant to Section 5(a)), delay, indulgence, omission
or otherwise be deemed to have waived

 

8

 

any
right or remedy hereunder or to have acquiesced in any default under the
Transaction Documents or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Purchasers, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Purchasers of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Purchasers would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.

 

(d)           Enforcement Expenses; Indemnification.

 

(i)            Each
Guarantor agrees to pay, or reimburse the Purchasers for, all its costs and
expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Guarantee and the other Transaction Documents to which such Guarantor is a
party, including, without limitation, the reasonable fees and disbursements of
counsel to the Purchasers.

 

(ii)           Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes which may be payable or determined to be
payable in connection with any of the transactions contemplated by this
Guarantee.

 

(iii)          Each
Guarantor agrees to pay, and to save the Purchasers harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Guarantee to the extent the Company would be required to do so pursuant
to the Purchase Agreement.

 

(iv)          The
agreements in this Section shall survive repayment of the Obligations and all
other amounts payable under the Purchase Agreement and the other Transaction
Documents.

 

(e)           Successor and Assigns. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Purchasers and their respective successors and assigns; provided that no

 

9

 

Guarantor
may assign, transfer or delegate any of its rights or obligations under this
Guarantee without the prior written consent of the Purchasers.

 

(f)            Set-Off. Each Guarantor
hereby irrevocably authorizes the Purchasers at any time and from time to time
while an Event of Default under any of the Transaction Documents shall have
occurred and be continuing, without notice to such Guarantor or any other
Guarantor, any such notice being expressly waived by each Guarantor, to set-off
and appropriate and apply any and all deposits, credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Purchasers
to or for the credit or the account of such Guarantor, or any part thereof in
such amounts as the Purchasers may elect, against and on account of the
obligations and liabilities of such Guarantor to the Purchasers hereunder and
claims of every nature and description of the Purchasers against such
Guarantor, in any currency, whether arising hereunder, under the Purchase
Agreement, any other Transaction Document or otherwise, as the Purchasers may
elect, whether or not the Purchasers have made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Purchasers shall notify such Guarantor promptly of any such
set-off and the application made by the Purchasers of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Purchasers under this Section
are in addition to other rights and remedies(including, without limitation,
other rights of set-off) which the Purchasers may have.

 

(g)           Counterparts. This Guarantee may be executed by one or
more of the parties to this Guarantee on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

(h)           Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

(i)            Section
Headings. The Section
headings used in this Guarantee are for convenience of reference only and are
not to affect the construction hereof or be taken into consideration in the
interpretation hereof.

 

(j)            Integration. This Guarantee and the other Transaction
Documents represent the agreement of the Guarantors and the Purchasers with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Purchasers relative to
subject matter hereof

 

10

 

and
thereof not expressly set forth or referred to herein or in the other
Transaction Documents.

 

(k)           Governing
Law.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
PRINCIPLES OF CONFLICTS OF LAWS.

 

(l)            Submission
to Jurisdictional; Waiver.
Each Guarantor hereby

irrevocably and unconditionally:

 

(i)            submits for itself and its property in any
legal action or proceeding relating to this Guarantee and the other Transaction
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, located in New York County, New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

 

(ii)           consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(iii)          agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Guarantor at its address
referred to in the Purchase Agreement or at such other address of which the
Purchasers shall have been notified pursuant thereto;

 

(iv)          agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

 

(v)           waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.

 

(m)          Acknowledgements. Each Guarantor hereby acknowledges that:

 

11

 

(i)            it has been advised by counsel in the
negotiation, execution and delivery of this Guarantee and the other Transaction
Documents to which it is a party;

 

(ii)           the
Purchasers have no fiduciary relationship with or duty to any Guarantor arising
out of or in connection with this Guarantee or any of the other Transaction
Documents, and the relationship between the Guarantors, on the one hand, and
the Purchasers, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and

 

(iii)          no
joint venture is created hereby or by the other Transaction Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Guarantors and the Purchasers.

 

(n)           Additional
Guarantors. The Company shall
cause each of its subsidiaries formed or acquired on or subsequent to the date
hereof to become a Guarantor for all purposes of this Guarantee by executing
and delivering an

Assumption Agreement in the form of Annex 1 hereto.

 

(o)           Release
of Guarantors. Subject to
Section 2.6, each Guarantor will be released from all liability hereunder
concurrently with the repayment in full of all amounts owed under the Purchase
Agreement, the Debentures and the other Transaction Documents.

 

(p)           Seniority. The Obligations of each of the Guarantors
hereunder rank senior in priority to any other Indebtedness (as defined in the
Purchase Agreement) of such Guarantor.

 

(q)           Waiver
of Jury Trial. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE
PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.

 

12

 

IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly
executed and delivered as of the date first above written.

 

 

	
  ECOTALITY STORES, INC.

  
	
   

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  PORTABLE ENERGY DE MEXICO,
  S.A. D C.V.

  
	
   

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
   

  
	
  ELECTRIC TRANSPORTATION ENGINEERING CORPORATION

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  
	
  THE CLARITY GROUP, INC.

  
	
   

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  

 

13

 

SCHEDULE 1
 
GUARANTORS
 
The following are the names, notice addresses and jurisdiction of organization of each Guarantor.
 

	
   

  	
   

  	
   

  	
   

  	
  COMPANY

  	
   

  
	
   

  	
   

  	
  JURISDICTION OF

  	
   

  	
  OWNED BY

  	
   

  
	
   

  	
   

  	
  INCORPORATION

  	
   

  	
  PERCENTAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

14

 

Annex 1 to

SUBSIDIARY GUARANTEE

 

ASSUMPTION
AGREEMENT, dated as of          ,         
made by                   ,
a               
corporation (the “Additional Guarantor”), in favor of the Purchasers
pursuant to the Purchase Agreement referred to below. All capitalized terms not
defined herein shall have the meaning ascribed to them in such Purchase
Agreement.

 

W I T N E S S E T H :

 

WHEREAS, Ecotality, Inc., a
Nevada corporation (the “Company”)
and the Purchasers have entered into a Securities Purchase Agreement, dated as
of November    , 2007 (as amended, supplemented or otherwise
modified from time to time, the “Purchase Agreement”);

 

WHEREAS, in connection with
the Purchase Agreement, the Company and its Subsidiaries (other than the
Additional Guarantor) have entered into the Subsidiary Guarantee, dated as of
November    , 2007 (as amended, supplemented or otherwise
modified from time to time, the “Guarantee”) in favor of the Purchasers;

 

WHEREAS, the Purchase
Agreement requires the Additional Guarantor to become a party to the Guarantee;
and

 

WHEREAS, the Additional
Guarantor has agreed to execute and deliver this Assumption Agreement in order
to become a party to the Guarantee;

 

NOW, THEREFORE, IT IS AGREED:

 

1.             Guarantee. By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 5(n) of the Guarantee, hereby becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 1 to the Guarantee. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 3 of the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after giving effect to this Assumption Agreement) as if made on and as of such date.
 
2.             Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

15

 

IN WITNESS WHEREOF, the undersigned has caused
this Assumption Agreement to be duly executed and delivered as of the date
first above written.

 

 

	
   

  	
  [ADDITIONALGUARANTOR]

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

16

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