Document:

exv4w4

Exhibit 4.4

 

 

 

 

 

 

 

T3 Motion, Inc.

 

 

and

 

 

Securities Transfer Corporation as

Warrant Agent

 

 

 

 

 

Warrant Agency Agreement

Dated as of _________, 2011

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	Section 1.

	 	Certain Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	Section 2.

	 	Appointment of Warrant Agent
	 	 	2	 
	 
	 	 	 	 	 	 
	Section 3.

	 	Book-Entry Warrant Certificates
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 4.

	 	Form of Warrant Certificates
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 5.

	 	Countersignature and Registration
	 	 	3	 
	 
	 	 	 	 	 	 
	Section 6.

	 	Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates
	 	 	4	 
	 
	 	 	 	 	 	 
	Section 7.

	 	Exercise of Warrants; Exercise Price; Expiration Date
	 	 	5	 
	 
	 	 	 	 	 	 
	Section 8.

	 	Cancellation and Destruction of Warrant Certificates
	 	 	6	 
	 
	 	 	 	 	 	 
	Section 9.

	 	Certain Representations; Reservation and Availability of Shares of Common Stock or Cash	 	 	7	 
	 
	 	 	 	 	 	 
	Section 10.

	 	Common Stock Record Date
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 11.

	 	Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants
	 	 	8	 
	 
	 	 	 	 	 	 
	Section 12.

	 	Certification of Adjusted Exercise Price or Number of Shares of Common Stock
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 13.

	 	Reclassification, Consolidation, Purchase, Combination, Sale or Conveyance
	 	 	12	 
	 
	 	 	 	 	 	 
	Section 14.

	 	Fractional Shares of Common Stock
	 	 	14	 
	 
	 	 	 	 	 	 
	Section 15.

	 	Agreement of Warrant Certificate Holders
	 	 	15	 
	 
	 	 	 	 	 	 
	Section 16.

	 	Warrant Certificate Holder Not Deemed a Shareholder
	 	 	16	 
	 
	 	 	 	 	 	 
	Section 17.

	 	Concerning the Warrant Agent
	 	 	17	 
	 
	 	 	 	 	 	 
	Section 18.

	 	Purchase or Consolidation or Change of Name of Warrant Agent
	 	 	18	 
	 
	 	 	 	 	 	 
	Section 19.

	 	Duties of Warrant Agent
	 	 	19	 
	 
	 	 	 	 	 	 
	Section 20.

	 	Change of Warrant Agent
	 	 	20	 

-i-

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	Section 21.

	 	Issuance of New Warrant Certificates
	 	 	21	 
	 
	 	 	 	 	 	 
	Section 22.

	 	Notices
	 	 	21	 
	 
	 	 	 	 	 	 
	Section 23.

	 	Supplements and Amendments
	 	 	22	 
	 
	 	 	 	 	 	 
	Section 24.

	 	Successors
	 	 	22	 
	 
	 	 	 	 	 	 
	Section 25.

	 	Benefits of this Agreement
	 	 	22	 
	 
	 	 	 	 	 	 
	Section 26.

	 	Governing Law
	 	 	23	 
	 
	 	 	 	 	 	 
	Section 27.

	 	Counterparts
	 	 	23	 
	 
	 	 	 	 	 	 
	Section 28.

	 	Captions
	 	 	23	 
	 
	 	 	 	 	 	 
	Section 29.

	 	Information
	 	 	23	 
	 
	 	 	 	 	 	 
	Section 30.

	 	Force Majeure
	 	 	23	 

-ii-

 

WARRANT AGENCY AGREEMENT

     WARRANT AGENCY AGREEMENT, dated as of ________, 2011 (“Agreement”), between T3 Motion,
Inc., a Delaware corporation (the “Company”) and _____________________(the “Warrant
Agent”).

W I T N E S S E T H

     WHEREAS, pursuant to an offering by the Company of Units consisting of Common Stock, Class H
Warrants and Class I Warrants pursuant to an effective registration statement, SEC File No. 333-
171163, the Company wishes to issue an aggregate of ____________ Class H Warrants and an aggregate
of ______________ Class I Warrant (collectively, the “Warrants”) entitling the respective
holders of the Warrants (the “Holders” which term shall include a Holder’s transferees,
successors and assigns) to purchase an aggregate of _______ shares of common stock, par value
$0.001 per share, of the Company (the “Common Stock”) upon the terms and subject to the
conditions hereinafter set forth; and

     WHEREAS, the Company may issue additional unregistered Class H Warrants and Class I Warrants
to certain existing securityholders upon the conversion or exchange of existing securities on or
about the issuance date of the registered Warrants, in amounts and to persons to be determined and
reported to the Warrant Agent in writing (the “Unregistered Warrants”);

     WHEREAS, the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant
Agent is willing so to act, in connection with the issuance, registration, transfer, exchange,
exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s
transfer agent, the delivery of the Warrant Shares;

     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the parties hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings indicated:

          (a) “Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).

          (b) “Business Day” means any day other than a Saturday, Sunday or a day on which the
New York Stock Exchange is authorized or obligated by law or executive order to close.

          (c) “Close of Business” on any given date means 5:00 p.m., New York City time, on such
date; provided, however, that if such date is not a Business Day it means 5:00
p.m., New York City time, on the next succeeding Business Day.

-1-

 

          (d) “Exercise Price” means the Initial Exercise Price as adjusted from time to time
pursuant to Section 11 hereof.

          (e) “Person” means an individual, corporation, association, partnership, limited
liability company, joint venture, trust, unincorporated organization, government or political
subdivision thereof or governmental agency or other entity.

          (f) “Class H Initial Exercise Price” means $[3.00] per share of Common Stock.

          (g) “Class I Initial Exercise Price” means $[5.25] per share of Common Stock.

          (h) “VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on NYSE AMEX, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock
Exchange (each, a “Trading Market”), the daily volume weighted average price of the Common
Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock
is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)), (b) the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the
Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for
the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market
value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.

          (i) “Warrant Certificate” means a certificate in substantially the form attached as
Exhibit 1 hereto as to the Class H Warrants and in the form attached as Exhibit 2
hereto as to the Class I Warrants, representing such number of Warrant Shares as is indicated on
the face thereof, provided that any reference to the delivery of a Warrant Certificate in this
Agreement shall include delivery of notice from the Depository or a Participant (each as defined
below) of the transfer or exercise of Warrant in the form of a Book-Entry Warrant Certificate (as
defined below).

          (j) “Warrant Shares” means the shares of Common Stock underlying the Warrants and
issuable upon exercise of the Warrants.

     Section 2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment. The

-2-

 

Company may from time to time appoint such Co-Warrant Agents as it may, in its sole discretion,
deem necessary or desirable.

     Section 3. Book-Entry Warrant Certificates.

          (a) The Warrants other than the Unregistered Warrants (which shall be represented by paper
warrant certificates bearing standard Securities Act restrictive legends) shall be issuable in book
entry (the “Book-Entry Warrant Certificates”). All of the Warrants except the Unregistered
Warrants shall initially be represented by one or more Book-Entry Warrant Certificates deposited
with the Depository Trust Company (“Depository”) and registered in the name of ____, a
nominee of the Depository. Ownership of beneficial interests in the Warrants other than the
Unregistered Warrants shall be shown on, and the transfer of such ownership shall be effected
through, records maintained by (i) the Depository or its nominee for each Book-Entry Warrant
Certificate or (ii) institutions that have accounts with the Depository (such institution, with
respect to a Warrant in its account, a “Participant”).

          (b) If the Depository subsequently ceases to make its book-entry settlement system available
for the Warrants, the Company may instruct the Warrant Agent regarding other arrangements for
book-entry settlement. In the event that the Warrants are not eligible for, or it is no longer
necessary to have the Warrants available in, book-entry form, the Warrant Agent shall provide
written instructions to the Depository to deliver to the Warrant Agent for cancellation each
Book-Entry Warrant Certificate, and the Company shall instruct the Warrant Agent to deliver to each
Holder a Warrant Certificate.

     Section 4. Form of Warrant Certificates. The Class H Warrant Certificate, together with the form of election to purchase Common Stock
(“Exercise Notice”) and the form of assignment to be printed on the reverse thereof, shall
be substantially in the form of Exhibit 1 hereto. The Class I Warrant Certificate, together
with the form of election to purchase Common Stock (“Exercise Notice”) and the form of
assignment to be printed on the reverse thereof, shall be substantially in the form of Exhibit
2 hereto

     Section 5. Countersignature and Registration. The Warrant Certificates shall be executed on behalf of the Company by its Chairman, its
President or a Vice President, either manually or by facsimile signature, and have affixed thereto
the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Warrant Certificates
shall be countersigned by the Warrant Agent either manually or facsimile signature and shall not
be valid for any purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be such officer of the Company before countersignature by the
Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless,
may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as
though the person who signed such Warrant Certificate had not ceased to be such officer of the
Company; and any Warrant Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Warrant Certificate, shall be a proper officer of

-3-

 

the Company to sign such Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such an officer.

     The Warrant Agent will keep or cause to be kept, at one of its offices, or at the office of
one of its agents, books for registration and transfer of the Warrant Certificates issued
hereunder. Such books shall show the names and addresses of the respective holders of the Warrant
Certificates, the number of warrants evidenced on the face of each of such Warrant Certificate and
the date of each of such Warrant Certificate.

     The Warrant Agent will create a special account for the issuance of Warrant Certificates. The
Company shall provide an opinion of counsel prior to the Initial Exercise Date to set up a reserve
of Warrants. The opinion shall state that all Warrants (other than the Unregistered Warrants) are:

(1) registered under the Securities Act of 1933, as amended, and all
appropriate State securities law filings have been made with respect to the
Warrants; and

(2) are validly issued, to our knowledge, fully paid and non-assessable.

     Section 6. Transfer, Split Up, Combination and Exchange of Warrant Certificates;
Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Subject to the provisions of Section 15 hereof and the last sentence of this first paragraph of
Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions
the Company may give to the Warrant Agent, at any time after the Close of Business on
________________ [45 days after the closing date of the Company’s public offering of Units] or such
earlier date as you and the Company have been advised in writing by Chardan Capital Markets, LLC
that the Warrants may trade separately from the Units, and at or prior to the Close of Business on
the Expiration Date (as such term is hereinafter defined), any Warrant Certificate or Warrant
Certificates or Book-Entry Warrant Certificate or Book-Entry Warrant Certificates may be
transferred, split up, combined or exchanged for another Warrant Certificate or Warrant
Certificates or Book-Entry Warrant Certificate or Book-Entry Warrant Certificates, entitling the
Holder to purchase a like number of shares of Common Stock as the Warrant Certificate or Warrant
Certificates or Book-Entry Warrant Certificate or Book-Entry Warrant Certificates surrendered then
entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange
any Warrant Certificate or Book-Entry Warrant Certificate shall make such request in writing
delivered to the Warrant Agent, and shall surrender the Warrant Certificate or Warrant Certificates to be transferred, split up, combined or
exchanged at the principal office of the Warrant Agent, provided that no such surrender is
applicable to the Holder of a Book-Entry Warrant Certificate. Thereupon the Warrant Agent shall,
subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the
person entitled thereto a Warrant Certificate or Warrant Certificates, as the case may be, as so
requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in

-4-

 

connection with any transfer, split up, combination or
exchange of Warrant Certificates. The Company shall compensate the Warrant Agent per its fee
schedule as in effect from time to time for all of the Warrant Agent’s reasonable expenses
incidental thereto other than taxes and governmental charges.

     Upon receipt by the Company and the Warrant Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Warrant Certificate, and, in case of loss, theft
or destruction, of indemnity or security in customary form and amount which shall include a
corporate bond of indemnity satisfactory to the Warrant Agent, and reimbursement to the Company and
the Warrant Agent of all reasonable expenses incidental thereto, and upon surrender to the Warrant
Agent and cancellation of the Warrant Certificate if mutilated, the Company will make and deliver a
new Warrant Certificate of like tenor to the Warrant Agent for delivery to the Holder in lieu of
the Warrant Certificate so lost, stolen, destroyed or mutilated.

     Section 7. Exercise of Warrants; Exercise Price; Expiration Date.

          (a) The Class H Warrants shall be exercisable commencing on the 45-day anniversary of the date
of issuance (the “Class H Initial Exercise Date”). The Class H Warrants shall cease to be
exercisable and shall terminate and become void, and all rights thereunder and under this Agreement
shall cease, at or prior to the Close of Business on the date that is the nine month anniversary of
the Class H Initial Exercise Date (the “Class H Expiration Date”). The Class I Warrants
shall be exercisable commencing on the 45 day anniversary of the date of issuance (the “Class I
Initial Exercise Date”). The Class I Warrants shall cease to be exercisable and shall
terminate and become void, and all rights thereunder and under this Agreement shall cease, at or
prior to the Close of Business on the date that is the five year anniversary of the Initial
Exercise Date (the “Class I Expiration Date”). Subject to the foregoing and to Section
7(b) below, the Holder of a Warrant may exercise the Warrant in whole or in part upon surrender of
the Warrant Certificate, if required, with the executed Exercise Notice and payment of the Exercise
Price, which may be made, at the option of the holder, by wire transfer or by certified or official
bank check in United States dollars, to the Warrant Agent at the principal office of the Warrant
Agent or to the office of one of its agents as may be designated by the Warrant Agent from time to
time. In the case of the Holder of a Book-Entry Warrant Certificate, the Holder shall deliver the
executed Exercise Notice and the payment of the Exercise Price as described herein.

          (b) If at the time of exercise hereof there is no effective registration statement
registering, or the prospectus contained therein is not available for the issuance of the Warrant
Shares to the Holder without a restrictive legend and all of the Warrant Shares are not then
registered for resale by Holder into the market at market prices from time to time on an effective
registration statement for use on a continuous basis (or the prospectus contained therein is not
available for use), then the Warrant may only be exercised, in whole or in part, at such time by
means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for
the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

-5-

 

	 	 	 	 	 

	(A)

	 	=
	 	the VWAP on the Business Day immediately preceding the date
on which Holder elects to exercise this Warrant by means of a “cashless
exercise,” as set forth in the applicable Exercise Notice;
	(B)

	 	=
	 	the Exercise Price of this Warrant, as adjusted hereunder;
and
	(X)

	 	=
	 	the number of Warrant Shares that would be issuable upon
exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.

Upon receipt of an Exercise Notice for a cashless exercise, the Warrant Agent will promptly deliver
a copy of the Exercise Notice to the Company to confirm the number of Warrant Shares issuable in
connection with the cashless exercise. The Company shall calculate and transmit to the Warrant
Agent, and the Warrant Agent shall have no obligation under this section to calculate, the number
of Warrant Shares issuable in connection with the cashless exercise.

          (c) Upon receipt of a Warrant Certificate at or prior to the Close of Business on the
applicable Expiration Date, with the executed Exercise Notice, accompanied by payment of the
Exercise Price for the shares to be purchased and an amount equal to any applicable tax,
governmental charge or expense reimbursement referred to in Section 6 in cash, or by certified
check or bank draft payable to the order of the Company (or, in the case of the holder of a
Book-Entry Warrant Certificate, the delivery of the executed Exercise Notice and the payment of the
Exercise Price and any other applicable amounts as set forth herein), the Warrant Agent shall use
reasonable efforts to cause the Warrant Shares to be promptly delivered to or upon the order of the
Holder of such Warrant, registered in such name or names as may be designated by such holder,
provided that the Warrant Agent shall not be liable to the Company or the Holder for any damages
arising out of the failure to deliver the Warrant Shares by any specified date. If the Company is
then a participant in the Deposit Withdrawal Agent Commission (“DWAC”) system of the
Depository and either (A) there is an effective registration statement permitting the issuance of
the Warrant Shares to or resale of the Warrant Shares by Holder or (B) the Warrant is being
exercised via cashless exercise, the certificates for Warrant Shares shall be transmitted by the
Warrant Agent to the Holder by crediting the account of the Holder’s broker with the Depository
through its DWAC system.

          (d) In case the Holder of any Warrant Certificate shall exercise fewer than all Warrants
evidenced thereby, a new Warrant Certificate evidencing the number of Warrants equivalent to the
number of Warrants remaining unexercised shall be issued by the Warrant Agent to the Holder of such
Warrant Certificate or to his duly authorized assigns, subject to the provisions of Sections 6 and
15 hereof.

     Section 8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered
to the

-6-

 

Warrant
Agent for cancellation or in canceled form, or, if surrendered to the Warrant Agent,
shall be canceled by it, and no Warrant Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Warrant Agreement. The Company shall deliver
to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and
retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the
Company, or shall, at the written request of the Company, destroy such canceled Warrant
Certificates, and in such case shall deliver a certificate of destruction thereof to the Company,
subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such
canceled certificates.

     Section 9. Certain Representations; Reservation and Availability of Shares of Common Stock
or Cash.

          (a) This Agreement has been duly authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery hereof by the Warrant Agent, constitutes a valid
and legally binding obligation of the Company enforceable against the Company in accordance with
its terms, and the Warrants have been duly authorized, executed and issued by the Company and,
assuming due authentication thereof by the Warrant Agent pursuant hereto, constitute valid and
legally binding obligations of the Company enforceable against the Company in accordance with their
terms and entitled to the benefits hereof; in each case except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

          (b) As of the date hereof, the authorized capital stock of the Company consists of (i)
150,000,000 shares of Common Stock, of which [____________] shares of Common Stock are issued and
outstanding, _________ shares of Common Stock are reserved for issuance upon exercise of the
Warrants; up to ____________shares issuable upon the exercise of other outstanding warrants and not
more than ____________ shares of Common Stock are reserved for issuance upon exercise of employee
stock options and (ii) 20,000,000 shares of preferred stock, of which _________ shares are outstanding. There are no other outstanding obligations, warrants,
options or other rights to subscribe for or purchase from the Company any class of capital stock of
the Company.

          (c) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock or its authorized and issued shares of Common
Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that
will be sufficient to permit the exercise in full of all outstanding Warrants.

          (d) The Warrant Agent will create a special account for the issuance of Common Stock upon the
exercise of Warrants.

-7-

 

          (e)

          (f) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon
exercise of the Warrants. The Company shall not, however, be required to pay any tax or
governmental charge which may be payable in respect of any transfer involved in the transfer or
delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a
name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for
exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any
Warrants until any such tax or governmental charge shall have been paid (any such tax or
governmental charge being payable by the holder of such Warrant Certificate at the time of
surrender) or until it has been established to the Company’s reasonable satisfaction that no such
tax or governmental charge is due.

     Section 10. Common Stock Record Date. Each person in whose name any certificate for shares of Common Stock is issued (or to whose
broker’s account is credited shares of Common Stock through the DWAC system) upon the exercise of
Warrants shall for all purposes be deemed to have become the holder of record for the Common Stock
represented thereby on, and such certificate shall be dated, the date upon which the Warrant
Certificate evidencing such Warrant was duly surrendered (but only if required herein) and payment
of the Exercise Price (and any applicable transfer taxes) and submission of the Exercise Notice was
made; provided, however, that if the date of such surrender (if applicable),
payment and submission is a date upon which the Common Stock transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding day on which the Common Stock transfer books of the
Company are open.

     Section 11. Adjustment of Exercise Price, Number of Shares of Common Stock or Number of
the Company Warrants. The Exercise Price, the number of shares covered by each Warrant and the number of Warrants
outstanding are subject to adjustment from time to time as provided in this Section 11.

          (a) In the event the Company shall at any time after the date of this Agreement (i) declare a
dividend on shares of Common Stock payable in shares of any class of capital stock of the Company,
(ii) subdivide the outstanding shares of Common Stock into a greater number of shares of Common
Stock, (iii) combine the outstanding shares of Common Stock into a smaller number of shares, or
(iv) issue any shares of capital stock in a reclassification of shares of the Common Stock
(including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), then in each case the Exercise Price in effect at that time
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding immediately after such
event, and the number of shares issuable upon

-8-

 

exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any
adjustment made pursuant to this Section 11(a) shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

          (b) In the event the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Common Stock (such rights, options or warrants not being available to
holders of Warrants) entitling them (for a period expiring within 45 calendar days after such date
of issue) to subscribe for or purchase Common Stock (or securities convertible into or exercisable
or exchangeable for Common Stock), at a price per share of Common Stock (or having a conversion,
exercise or exchange price per share of Common Stock, in the case of a security convertible into or
exercisable or exchangeable for Common Stock) less than the VWAP on such record date (or, if there
has been no such determination, then the Company must promptly cause such determination to be made
as contemplated by the definition of VWAP set forth herein, and any proposed record date must be
postponed until after such determination has been made), the Exercise Price in effect at that time
shall be multiplied by a fraction, of which the denominator shall be the number of shares of the
Common Stock outstanding on the date of issuance of such rights, options or warrants plus the
number of additional shares of Common Stock offered for subscription or purchase, and of which the
numerator shall be the number of shares of the Common Stock outstanding on the date of issuance of
such rights, options or warrants plus the number of shares which the aggregate offering price of
the total number of shares so offered (assuming receipt by the Company in full of all consideration
payable upon exercise of such rights, options or warrants) would purchase at such VWAP. Such
adjustment shall be made whenever such rights, options or warrants are issued, and shall become
effective immediately after the record date for the determination of stockholders entitled to
receive such rights, options or warrants.

          (c) In the event the Company shall fix a record date for the making of a dividend or
distribution to all holders of Common Stock of any evidences of indebtedness or assets or
subscription rights or warrants (excluding those referred to in Section 11(a) or (b) or other
dividends paid out of retained earnings), then in each such case the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above, and of which the
numerator shall be such VWAP on such record date less the then per share fair market value at such
record date of the portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as determined by the Board of Directors in good faith.
In either case the adjustments shall be described in a statement provided to the Holder of the
portion of assets or evidences of indebtedness so distributed or such subscription rights
applicable to one share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record date mentioned above.

-9-

 

          (d) In the event the Company shall consummate a tender offer for or otherwise repurchase or
redeem Common Stock, to the extent that the cash and value of any other consideration included in
such payment per share of Common Stock exceeds the VWAP per share of Common Stock on the trading
day next succeeding the Expiration Time (as defined below), unless the Company tenders for the
Warrants on terms which give effect to such excess consideration, the Exercise Price shall be
reduced so that the same shall equal the price determined by multiplying the Exercise Price in
effect immediately prior to the last time tenders or repurchases or redemptions may be made
pursuant to such tender or repurchase or redemption (the “Expiration Time”) by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding (including any
tendered, repurchased or redeemed shares) at the Expiration Time multiplied by the VWAP per share
of the Common Stock on the trading day next succeeding the Expiration Time, and the denominator
shall be the sum of (A) the fair market value of the aggregate consideration payable to
shareholders based on the acceptance of all shares validly tendered, repurchased or redeemed and
not withdrawn as of the Expiration Time (the shares deemed so accepted being referred to as the
“Purchased Shares”) and (B) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) at the Expiration Time and the VWAP per share of the Common Stock on
the trading day next succeeding the Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration Time. For purposes of this
paragraph (d), the value of non cash-consideration shall be as determined in good faith by the
Board of Directors of the Company.

          (e) Notwithstanding the foregoing paragraphs (a), (b), (c) and (d), no adjustment in the
Exercise Price pursuant to such paragraphs shall be required unless such adjustment would require
an increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or the
nearest hundredth of a share, as the case may be.

          (f) In the event that at any time, as a result of an adjustment made pursuant to Section
11(a), the holder of any Warrant thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than shares of Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to
the shares contained in Section 11(a), (b), (c) and (d), and the provisions of Sections Section 7,
9 and 13 with respect to the shares of Common Stock shall apply on like terms to any such other
shares.

          (g) All Warrants originally issued by the Company subsequent to any adjustment made to the
Exercise Price hereunder shall evidence the right to purchase, at the adjusted Exercise Price, the
number of shares of Common Stock purchasable from time to time hereunder upon exercise of the
Warrants, all subject to further adjustment as provided herein.

-10-

 

          (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Exercise Price as a result of the calculations made in Section 11(b), (c)
and (d), each Warrant outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares
(calculated to the nearest hundredth) obtained by (i) multiplying (x) the number of shares covered
by a Warrant immediately prior to such adjustment by (y) the Exercise Price in effect immediately
prior to such adjustment of the Exercise Price and (ii) dividing the product so obtained by the
Exercise Price in effect immediately after such adjustment of the Exercise Price.

          (i) The Company may elect on or after the date of any adjustment of the Exercise Price to
adjust the number of Warrants, in substitution for any adjustment in the number of shares of Common
Stock purchasable upon the exercise of a Warrant. Each of the Warrants outstanding after such
adjustment of the number of Warrants shall be exercisable for one share of Common Stock. Each
Warrant held of record prior to such adjustment of the number of Warrants shall become that number
of Warrants (calculated to the nearest hundredth) obtained by dividing the Exercise Price in effect
prior to adjustment of the Exercise Price by the Exercise Price in effect after adjustment of the
Exercise Price. The Company shall instruct the Warrant Agent to notify each of the record holders
of Warrants of its election to adjust the number of Warrants, indicating the record date for the
adjustment, and, if known at the time, the amount of adjustment to be made. Such record date may
be the date on which the Exercise Price is adjusted or any day thereafter, but shall be at least 10
days later than the date of the public announcement. Upon each adjustment of the number of
Warrants pursuant to this Section 11(i), the Company shall instruct the Warrant Agent to
distribute, as promptly as practicable, to holders of record of Warrant Certificates on such record
date Warrant Certificates evidencing, subject to Section 14, the additional Warrants to which such
holders shall be entitled as a result of such adjustment, or, at the option of the Company,
instruct the Warrant Agent to distribute to such holders of record in
substitution and replacement for the Warrant Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new Warrant
Certificates evidencing all the Warrants to which such holders shall be entitled after such
adjustment. Warrant Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the option of the Company, the adjusted
Exercise Price) and shall be registered in the names of the holders of record of Warrant
Certificates on the record date specified in the public announcement.

          (j) Irrespective of any adjustment or change in the Exercise Price or the number of shares of
Common Stock issuable upon the exercise of the Warrants, the Warrant Certificates theretofore and
thereafter issued may continue to express the Exercise Price per share and the number of shares
which were expressed upon the initial Warrant Certificates issued hereunder.

          (k) The Company agrees that it will not, by amendment of its Certificate of Incorporation or
through reorganization, consolidation, merger, dissolution or sale of assets, or by any other
voluntary act, avoid or seek to avoid the observance or

-11-

 

performance of any of the covenants,
stipulations or conditions to be observed or performed hereunder by the Company.

          (l) In any case in which this Section 11 shall require that an adjustment in the Exercise
Price be made effective as of a record date for a specified event, if any holder of a Warrant
exercises such Warrant after such record date, the Company may elect to defer, until the occurrence
of such event, the issuance of the shares of Common Stock and other capital stock of the Company in
excess of the shares of Common Stock and other capital stock of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such additional shares
and/or other capital securities upon the occurrence of the event requiring such adjustment.

     Section 12. Certification of Adjusted Exercise Price or Number of Shares of Common
Stock. Whenever the Exercise Price or the number of shares of Common Stock issuable upon the exercise
of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare
a certificate setting forth the Exercise Price of each Warrant as so adjusted, and a brief
statement of the facts accounting for such adjustment, (b) promptly file with the Warrant Agent and
with each transfer agent for the Common Stock a copy of such certificate and (c) instruct the
Warrant Agent to mail a brief summary thereof to each holder of a Warrant Certificate.

     Section 13. Reclassification, Consolidation, Purchase, Combination, Sale or Conveyance. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company
with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease,
license, assignment, transfer, conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to
which holders of Common Stock are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock or share purchase agreement or other business combination) (each a
“Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such

-12-

 

          Fundamental Transaction, the number of shares
of Common Stock, if any, of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable
as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes
of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is
not the survivor (the “Successor Entity”) and for which shareholders received any equity
securities of the Successor Entity, to assume in writing all of the obligations of the Company
under this Warrant in accordance with the provisions of this Section 13 pursuant to written
agreements in form and substance reasonably satisfactory to the Holders of a majority of the
Warrants then outstanding and shall, upon the written request of the holder of this Warrant,
deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by
a written instrument substantially similar in form and substance to this Warrant which is
exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its
parent entity), if any, plus any Alternate Consideration, receivable as a
result of such Fundamental Transaction by a holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such Fundamental Transaction, and with an
exercise price which applies the exercise price hereunder to such shares of capital stock, if any,
plus any Alternate Consideration (but taking into account the relative value of the shares of
Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such number of shares of capital stock and such exercise price being for the purpose of
protecting the economic value of this Warrant immediately prior to the consummation of such
Fundamental Transaction). Upon the occurrence of any such Fundamental Transaction the Successor
Entity shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant with the same effect as if such
Successor Entity had been named as the Company herein.

     As to the Class I Warrants only (and not the Class H Warrants) in the event of a Fundamental
Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule
13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving a person or entity not
traded on a national securities exchange, the Company or any Successor Entity (as defined above)
shall, at the Holder’s option, exercisable at any time concurrently with, purchase this Warrant
from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the
remaining unexercised portion

-13-

 

of this Warrant on the date of the consummation of such Fundamental
Transaction. “Black Scholes Value” means the value of the Class I Warrant based on the
Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P.
(“Bloomberg”) determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the time between the date of the public announcement of
the applicable Fundamental Transaction and the Class I Termination Date, (B) an expected volatility
equal to the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day
immediately following the public announcement of the applicable Fundamental Transaction, (C) the
underlying price per share used in such calculation shall be the sum of the price per share being
offered in cash, if any, plus the value of any non-cash consideration, if any, being offered to the
Company’s shareholders in such Fundamental Transaction and (D) a remaining option time equal to the
time between the date of the public announcement of the applicable Fundamental Transaction and the
Class I Expiration Date.

     The Company shall instruct the Warrant Agent to mail by first class mail, postage prepaid, to
each Holder of a Warrant, written notice of the execution of any such amendment, supplement or
agreement. Any supplemented or amended agreement entered into by the successor corporation or
transferee shall provide for adjustments, which shall be as nearly equivalent as may be practicable
to the adjustments provided for in Section 11 and this Section 13. The Warrant Agent shall be
under no responsibility to determine the correctness of any provisions contained in such agreement
relating either to the kind or amount of securities or other property receivable upon exercise of
warrants or with respect to the method employed and provided therein for any adjustments and shall
be entitled to rely upon the provisions contained in any such agreement. The provisions of
this Section 13 shall similarly apply to successive reclassifications, changes, consolidations,
mergers, sales and conveyances of the kind described above.

     Section 14. Fractional Shares of Common Stock.

          (a) The Company shall not issue fractions of Warrants or distribute Warrant Certificates which
evidence fractional Warrants. Whenever any fractional Warrant would otherwise be required to be
issued or distributed, the actual issuance or distribution shall reflect a rounding of such
fraction to the nearest whole Warrant (up or down), with half Warrants or less being rounded down
and fractions in excess of a half of a Warrant being rounded up.

          (b) The Company shall not issue fractions of shares of Common Stock upon exercise of Warrants
or distribute stock certificates which evidence fractional shares of Common Stock. Whenever any
fraction of a share of Common Stock would otherwise be required to be issued or distributed, the
actual issuance or distribution made shall reflect a rounding of such fraction to the nearest whole
share (up or down), with half shares or less being rounded down and fractions in excess of half of
a share being rounded up.

-14-

 

          (c) The holder of a Warrant by the acceptance of the Warrant expressly waives his right to
receive any fractional Warrant or any fractional share of Common Stock upon exercise of a Warrant.

     Section 15. Agreement of Warrant Certificate Holders. Every holder of a Warrant Certificate by accepting the same consents and agrees with the Company
and the Warrant Agent and with every other holder of a Warrant Certificate that:

          (a) the Warrant Certificates are transferable only on the registry books of the Warrant Agent
if surrendered at the principal office of the Warrant Agent, duly endorsed or accompanied by a
proper instrument of transfer; and

          (b) the Company and the Warrant Agent may deem and treat the person in whose name the Warrant
Certificate is registered as the absolute owner thereof and of the Warrants evidenced thereby
(notwithstanding any notations of ownership or writing on the Warrant Certificates made by anyone
other than the Company or the Warrant Agent) for all purposes whatsoever, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary.

          (c) Neither the Warrant Agent nor the Company shall effect any exercise of any Warrant, and a
Holder shall not have the right to exercise any portion
of a Warrant, to the extent that after giving effect to the issuance of shares of Common Stock
after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the
Holder’s Affiliates, and any other persons acting as a group together with the Holder or any of the
Holder’s Affiliates), would beneficially own in excess of 4.99% of the Company’s Common Stock. For
purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the
Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon exercise of the remaining,
nonexercised portion of any Warrant beneficially owned by the Holder or any of its Affiliates.
Except as set forth in the preceding sentence, for purposes of this Section 15(c), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by the Holder that neither the
Warrant Agent nor the Company is representing to the Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules
required to be filed in accordance therewith. To the extent that the limitation contained in this
Section 15(c) applies, the determination of whether a Warrant is exercisable (in relation to other
securities owned by the Holder together with any Affiliates) and of which portion of a Class H or
Class I Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of
a Notice of Exercise shall be deemed to be the Holder’s determination of whether such Warrant is
exercisable (in relation to other securities owned by the Holder together with any Affiliates) and
of which portion of a Warrant is exercisable, and neither the Warrant Agent nor the Company shall
have any obligation to verify or confirm the accuracy of such determination and neither of them
shall have any liability for any error made by the Holder. In addition, a determination as to any
group status as

-15-

 

contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section
15(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the
number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic
or annual report filed with the Securities and Exchange Commission, as the case may be, (B) a more
recent public announcement by the Company or (C) a more recent written notice by the Company or the
Company’s transfer agent setting forth the number of shares of Common Stock outstanding. The
provisions of this Section 15(c) shall be construed and implemented in a manner otherwise than in
strict conformity with the terms of this Section 15(c) to correct this subsection (or any portion
hereof) which may be defective or inconsistent with the intended beneficial ownership limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect
to such limitation. The limitations contained in this paragraph shall apply to a successor holder
of a Warrant.

     Section 16. Warrant Certificate Holder Not Deemed a Shareholder. No holder, as such, of any Warrant Certificate shall be entitled to vote, receive dividends or
distributions on, or be deemed for any purpose the holder of Common Stock or any other securities
of the Company which may at any time be issuable on the exercise of the Warrants represented
thereby, nor shall anything contained herein or in any
Warrant Certificate be construed to confer upon the holder of any Warrant Certificate, as such, any
of the rights of a shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions affecting shareholders, or
to receive dividends or distributions or subscription rights, or otherwise, until the Warrant or
Warrants evidenced by such Warrant Certificate shall have been exercised in accordance with the
provisions hereof.

     Section 17. Company Call Option With Respect to Class H Warrants. At any time after
the Class H Warrants first become exercisable, if the last reported sale price of the Common Stock
on the NYSE Amex or other national securities exchange for each of 20 consecutive Business Days
within a 30 consecutive Business Day period (the “Measurement Period”) exceeds [$6.00]
(subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and
the like after the Class H Initial Exercise Date), then the Company may, within three (3) Business
Days of the end of such Measurement Period, call for cancellation of all but not less than all
Class H Warrants for which a Notice of Exercise has not yet been delivered (such right, a
“Call”) for consideration equal to $.01 per Warrant Share. To exercise this right, the
Company must deliver or cause the Warrant Agent to deliver to the Holder an irrevocable written
notice (a “Call Notice”), indicating therein that the entire unexercised portion of the
Class H Warrant is being called for redemption. If the conditions set forth below for such Call
are satisfied from the period from the date of the Call Notice through and including the Call Date
(as defined below), then any portion of this Warrant subject to such Call Notice for which a Notice
of Exercise shall not have been received by the Call Date will be cancelled at 5:30 p.m. (New York
City time) on the 30th calendar day after the date the Call Notice is deemed received by
the Holder (such date and time, the “Call Date”). In furtherance thereof, the Company
covenants and agrees that it will honor all Notices of

-16-

 

Exercise with respect to Warrant Shares
subject to a Call Notice that are tendered through 5:30 p.m. (New York City time) on the Call Date.
Notwithstanding anything to the contrary set forth in this Warrant, the Company may not deliver a
Call Notice or require the cancellation of this Warrant (and any such Call Notice shall be void),
unless, from the beginning of the Measurement Period through the Call Date, (1) the Company or the
Warrant Agent shall have honored in accordance with the terms of this Warrant all Notices of
Exercise delivered by 5:30 p.m. (New York City time) on the Call Date, and (2) the Registration
Statement shall be effective as to all Warrant Shares and the prospectus thereunder available for
use by the Holder for the resale of all such Warrant Shares, and (3) the Common Stock shall be
listed or quoted for trading on the NYSE Amex or another national securities exchange, and (4)
there is a sufficient number of authorized shares of Common Stock for issuance of all Warrant
Shares.

     Section 18. Concerning
the Warrant Agent. The Company agrees to pay to the Warrant Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Warrant Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder.

     The Company covenants and agrees to indemnify and to hold the Warrant Agent harmless against
any costs, expenses (including reasonable fees of its legal counsel), losses or damages, which may
be paid, incurred or suffered by or to which it may become subject, arising from or out of,
directly or indirectly, any claims or liability resulting from its actions as Warrant Agent
pursuant hereto; provided, that such covenant and agreement does not extend to, and the Warrant
Agent shall not be indemnified with respect to, such costs, expenses, losses and damages incurred
or suffered by the Warrant Agent as a result of, or arising out of, its gross negligence, bad
faith, or willful misconduct.

     Promptly after the receipt by the Warrant Agent of notice of any demand or claim or the
commencement of any action, suit, proceeding or investigation, the Warrant Agent shall, if a claim
in respect thereof is to be made against the Company, notify the Company thereof in writing. The
Company shall be entitled to participate as its own expense in the defense of any such claim or
proceeding, and, if it so elects at any time after receipt of such notice, it may assume the
defense of any suit brought to enforce any such claim or of any other legal action or proceeding.
For the purposes of this Section 188, the term “expense or loss” means any amount paid or payable
to satisfy any claim, demand, action, suit or proceeding settled with the express written consent
of the Warrant Agent, and all reasonable costs and expenses, including, but not limited to,
reasonable counsel fees and disbursements, paid or incurred in investigating or defending against
any such claim, demand, action, suit, proceeding or investigation.

     The Warrant Agent shall be responsible for and shall indemnify and hold the Company harmless
from and against any and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to the Warrant Agent’s refusal or failure to comply with
the terms of this Agreement, or which arise out of Warrant Agent’s negligence or willful misconduct
or which arise out of the breach of any representation or warranty of the Warrant Agent hereunder,
for which the Warrant Agent

-17-

 

is not entitled to indemnification under this Agreement; provided,
however, that Warrant Agent’s aggregate liability during any term of this Agreement with respect
to, arising from, or arising in connection with this Agreement, or from all services provided or
omitted to be provided under this Agreement, whether in contract, or in tort, or otherwise, is
limited to, and shall not exceed, the amounts paid under this Agreement by the Company to Warrant
Agent as fees and charges, but not including reimbursable expenses.

          Promptly after the receipt by the Company of notice of any demand or claim or the commencement
of any action, suit, proceeding or investigation, the Company shall, if a claim in respect thereof
is to be made against the Warrant Agent, notify the Warrant Agent thereof in writing. The Warrant
Agent shall be entitled to participate at its own expense in the defense of any such claim or
proceeding, and, if it so elects at any time after receipt of such notice, it may assume the
defense of any suit brought to enforce any such claim or of any other legal action or proceeding.
For the purposes of this Section 18, the term “expense or loss” means any amount paid or payable to
satisfy any claim, demand, action, suit or proceeding settled with the express written consent of
the Company, and all reasonable costs and expenses, including, but not limited to, reasonable
counsel fees and disbursements, paid or incurred in investigating or defending against any such
claim, demand, action, suit, proceeding or investigation.

     Section 19. Purchase or Consolidation or Change of Name of Warrant Agent. Any corporation into which the Warrant Agent or any successor Warrant Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent or any successor Warrant Agent shall be party, or any corporation
succeeding to the corporate trust business of the Warrant Agent or any successor Warrant Agent,
shall be the successor to the Warrant Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under the provisions of
Section 211. In case at the time such successor Warrant Agent shall succeed to the agency created
by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered,
any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent
and deliver such Warrant Certificates so countersigned; and in case at that time any of the Warrant
Certificates shall not have been countersigned, any successor Warrant Agent may countersign such
Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the
successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force
provided in the Warrant Certificates and in this Agreement.

     In case at any time the name of the Warrant Agent shall be changed and at such time any of the
Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt
the countersignature under its prior name and deliver Warrant Certificates so countersigned; and in
case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in its changed name;
and in all such cases such Warrant Certificates shall have the full force provided in the Warrant
Certificates and in this Agreement.

-18-

 

     Section 20. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of Warrant Certificate,
by their acceptance thereof, shall be bound:

          (a) The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who
may be legal counsel for the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.

          (b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall
deem it necessary or desirable that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman, President or any Vice President of the Company and by the
Treasurer or any Assistant Treasurer or the Secretary of the Company and delivered to the Warrant
Agent; and such certificate shall be full authentication to the Warrant Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in reliance upon such
certificate.

          (c) The Warrant Agent shall be liable hereunder only for its own gross negligence, bad faith
or willful misconduct, pursuant to Section 199, above.

          (d) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Warrant Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.

          (e) The Warrant Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant
Agent) or in respect of the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be
responsible for the adjustment of the Exercise Price or the making of any change in the number of
shares of Common Stock required under the provisions of Section 11 or 13 or responsible for the
manner, method or amount of any such change or the ascertaining of the existence of facts that
would require any such adjustment or change (except with respect to the exercise of Warrants
evidenced by Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor
shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement
or any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly
authorized, validly issued, fully paid and nonassessable.

-19-

 

          (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Warrant Agent for the carrying out or performing by
the Warrant Agent of the provisions of this Agreement.

          (g) The Warrant Agent is hereby authorized to accept instructions with respect to the
performance of its duties hereunder from the Chairman or the President or any Vice President or the
Secretary of the Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable and shall be indemnified and held harmless for any
action taken or suffered to be taken by it in good faith in accordance with instructions of any
such officer, provided Warrant Agent carries out such instructions without gross negligence, bad
faith or willful misconduct.

          (h) The Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as though it were not Warrant
Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity.

          (i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorney or agents, and the
Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorney or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection and continued
employment thereof.

     Section 21. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 30
days’ notice in writing mailed to the Company and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Warrant Certificates by first-class mail.
The Company may remove the Warrant Agent or any successor Warrant Agent upon 30 days’ notice in
writing, mailed to the Warrant Agent or successor Warrant Agent, as the case may be, and to each
transfer agent of the Common Stock by registered or certified mail, and to the holders of the
Warrant Certificates by first-class mail. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent.
If the Company shall fail to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the holder of a Warrant Certificate (who shall, with such notice,
submit his Warrant Certificate for inspection by the Company), then the Holder of any Warrant
Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant
Agent. Any successor Warrant Agent, whether appointed by the Company or by such a

-20-

 

court, shall be a corporation organized and doing business under the laws of the United States or of a state
thereof, in good standing, which is authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by federal or state authority and which has at the
time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000.
After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Warrant Agent without further act or
deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent
any property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent
and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders of
the Warrant Certificates. However, failure to give any notice provided for in
this Section 21, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as
the case may be.

     Section 22. Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of the Warrants to the contrary, the
Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may
be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per
share and the number or kind or class of shares of stock or other securities or property
purchasable under the several Warrant Certificates made in accordance with the provisions of this
Agreement.

     Section 23. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or
by the Holder of any Warrant Certificate to or on the Company, (ii) subject to the provisions of
Section 22, by the Company or by the Holder of any Warrant Certificate to or on the Warrant Agent
or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate, shall be
deemed given (x) on the date delivered, if delivered personally, (y) on the first Business Day
following the deposit thereof with Federal Express or another recognized overnight courier, if sent
by Federal Express or another recognized overnight courier, and (z) on the fourth Business Day
following the mailing thereof with postage prepaid, if mailed by registered or certified mail
(return receipt requested), in each case to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):

	 	 	 	 	 
	 

	 	(a)
	 	If to the Company, to:

T3 Motion, Inc.

2990 Airway Avenue, Building A

Costa Mesa, CA 92626

Attention: Chief Financial Officer

Fax:
	 
	 	 	 	 
	 

	 	(b)
	 	If to the Warrant Agent, to:

-21-

 

	 	 	 	 	 
	 

	 	 	 	Securities Transfer Corporation

Dallas Parkway Suite 102

Frisco Texas 75034

Attention: President

Fax: (469) 633-0088

          (c) If to the Holder of any Warrant Certificate, to the address of such holder as shown on the
registry books of the Company. Any notice required to be
delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on
behalf of the Company.

     Section 24. Supplements and Amendments.

          (a) The Company and the Warrant Agent may from time to time supplement or amend this Agreement
without the approval of any Holders of Warrant Certificates in order to cure any ambiguity, to
correct or supplement any provision contained herein which may be defective or inconsistent with
any other provisions herein, or to make any other provisions with regard to matters or questions
arising hereunder which the Company and the Warrant Agent may deem necessary or desirable and which
shall not adversely affect the interests of the Holders of Warrants Certificates.

          (b) In addition to the foregoing, with the consent of Holders of Warrants entitled, upon
exercise thereof, to receive not less than a majority of the shares of Common Stock issuable
thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions of this Warrant
Agreement or modifying in any manner the rights of the holders of the Warrant Certificates;
provided, however, that no modification of the terms (including but not limited to
the adjustments described in Section 11) upon which the Warrants are exercisable or reducing the
percentage required for consent to modification of this Agreement may be made without the consent
of the holder of each outstanding warrant certificate affected thereby.

     Section 25. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the
Warrant Agent shall bind and inure to the benefit of their respective successors and assigns
hereunder.

     Section 26. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company and the
Warrant Agent any legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the
Holders of the Warrant Certificates.

-22-

 

     Section 27. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be governed by, and construed
in accordance with, the laws of the State of Delaware without giving effect to the conflicts of law
principles thereof.

     Section 28. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

     Section 29. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions hereof.

     Section 30. Information. The Company agrees to promptly provide the Holders of the Warrants the information it is
required to provide to the holders of the Common Stock.

     Section 31. Force Majeure. Notwithstanding anything to the contrary contained herein, Warrant Agent shall not be liable for
any delays or failures in performance resulting from acts beyond its reasonable control including,
without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunction of computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or
civil unrest.

-23-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	T3 MOTION, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	SECURITIES TRANSFER CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

-24-exv10w58

Exhibit 10.58

PREFERRED STOCK WAIVER AND CONVERSION AGREEMENT

     This Preferred Stock Waiver and Conversion Agreement (the “Agreement”), dated as of the __ day
of April, 2011, is made and entered into by and among T3 Motion, Inc., a Delaware corporation (the
“Company”), Vision Opportunity Master Fund Ltd. (“VOMF”) and Vision Capital Advantage Fund L.P. (“VCAF”, and together with VOMF, “Vision”) and
Ki Nam (the “CEO”).

     WHEREAS, Vision is the holder of an aggregate of 9,370,698 shares (the “Vision Shares”) of the
Company’s Series A Convertible Preferred Stock (the “Series A Preferred”); and

     WHEREAS, the CEO is the holder of that number of shares of Series A Preferred (the “CEO
Shares”) set forth in the Registration Statement relating to the Public Offering (as defined
below); and

     WHEREAS, the Company has filed a Registration Statement on Form S-1, File Number 333-171163
relating to an underwritten public offering (the “Public Offering”) of the Company’s securities;
and

     WHEREAS, it is a condition to the underwriters’ obligation to purchase the securities in the
Public Offering that the Vision Shares and the CEO Shares be converted into shares of the Company’s
common stock at a conversion price equal to $0.50 per share (prior to the anticipated 10-for-1
reverse stock split) as set forth in the applicable underwriting agreement (the “Conversion
Price”); and

     WHEREAS, Section 7 of the Certificate of Designation of Preferences, Rights and Limitations of
Series A Convertible Preferred Stock (the “Designation”) contains conversion price adjustment
provisions that would be triggered by the Public Offering; and

     WHEREAS, the Company and Vision believes it is in their mutual best interest that the
conversion of the Vision Shares (the “Conversion”) be effected on the terms and subject to the
conditions set forth in this Agreement and, in furtherance thereof, desire to waive the provisions
of Section 7 of the Designation.

     NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, and for
other good and valuable consideration, and sufficiency of which are hereby acknowledged and
intending to be legally bound hereby the parties agree as follows:

     1. Conversion. At the Closing (as defined in Section 2 below), Vision shall effect
the Conversion (the “Conversion Shares”) at the Conversion Price and the Company shall issue to
Vision the Conversion Shares in the names and denominations set forth on Schedule A to this
Agreement (the “Conversion”). The Company shall pay cash in lieu of any fractional Conversion
Shares that would otherwise be issuable upon the Conversion.

     2. Closing. If, and only if, the closing of the Public Offering occurs on or prior to
5:00 p.m. eastern time on May 30, 2011, the closing of the Conversion (the “Closing”) shall take
place at the offices of Loeb and Loeb LLP, 345 Park Avenue, New York, New York, 10154, or

 

 

such other place to be specified by the Company and Vision on the date of, and simultaneously
with, the closing of the Public Offering (the “Closing Date”).

     3. Representations and Warranties of the Company. The Company hereby represents and
warrants to Vision as follows:

          (a) Due Authorization. The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement and the Agreement has been duly authorized
and validly executed and delivered by the Company and, assuming the due authorization, execution
and delivery by Vision, constitutes legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their respective terms, except as rights to indemnity and
contribution may be limited by state or federal securities laws or the public policy underlying
such laws, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights
generally and except as enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at law).

          (b) Issuance of Conversion Shares. The Conversion Shares are duly authorized and,
when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully
paid and nonassessable, free and clear of all liens and shall not be subject to preemptive or
similar rights of stockholders other than those which have been exercised or waived prior to the
Closing Date. Assuming the accuracy of the representations and warranties of Vision in this
Agreement, the Conversion Shares will be issued in compliance with all applicable federal and state
securities laws.

          (c) Non-Contravention. The execution and delivery of this Agreement, the issuance and
sale of the Conversion Shares by the Company under this Agreement and the consummation of the
transactions contemplated hereby will not (A) conflict with or constitute a violation of, or
default (with the passage of time or otherwise) under, (i) any bond, debenture, note or other
evidence of indebtedness, or any material lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the Company or its wholly-owned
subsidiary, T3 Motion, Ltd. (the “Subsidiary”) is a party or by which the Company, the Subsidiary
or any of their property is bound, where such conflict, violation or default is likely to result in
a Material Adverse Effect, (ii) the charter, by-laws or other organizational documents of the
Company or the Subsidiary, or (iii) any law, administrative regulation, ordinance or order of any
court or governmental agency, arbitration panel or authority binding upon the Company or the
Subsidiary or any of their property, where such conflict, violation or default is likely to result
in a Material Adverse Effect, or (B) result in the creation or imposition of any Lien upon any of
the material properties or assets of the Company or the Subsidiary or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or any indenture, mortgage, deed of trust or any other
agreement or instrument to which the Company or the Subsidiary is a party or by which the Company
or the Subsidiary is bound or to which any of the property or assets of the Company or the
Subsidiary is subject. No consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or other governmental
body in the United States is required for the

2

 

execution, delivery and performance of this Agreement, the valid issuance and sale of the
Shares, other than such as have been made or obtained. “Material Adverse Effect” shall mean any of
(a) a material and adverse effect on the legality, validity or enforceability of this Agreement,
the schedules and exhibits attached hereto, and any other documents or agreements executed in
connection with the transactions contemplated hereunder, (b) a material and adverse effect on the
results of operations, assets, business or financial condition of the Company and the Subsidiary,
taken as a whole, or (c) any adverse impairment to the Company’s ability to perform in any material
respect on a timely basis its obligations under this Agreement.

          (d) CEO Conversion. The Company and the CEO have agreed that the CEO Shares shall be
converted into shares of the Company’s common stock at the Conversion Price on or prior to the
Closing Date.

     4. Representations and Warranties of Vision. Vision hereby represents and warrants to
the Company as follows:

          (a) Organization; Authority. Each of VOMF and VCAF is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization with
full right, corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and performance by Vision of the
transactions contemplated by this Agreement have been duly authorized by all necessary corporate or
similar action on the part of Vision. This Agreement has been duly executed by Vision, and when
delivered by Vision in accordance with the terms hereof, will constitute the valid and legally
binding obligation of Vision, enforceable against it in accordance with its terms, except: (i) as
limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.

          (b) Own Account. Vision understands that the Conversion Shares are “restricted
securities” and have not been registered under the Securities Act or any applicable state
securities law and is converting the Vision Shares into Conversion Shares as principal for its own
account and not with a view to or for distributing or reselling such Conversion Shares or any part
thereof in violation of the Securities Act or any applicable state securities law, has no present
intention of distributing any of such Conversion Shares in violation of the Securities Act or any
applicable state securities law and has no direct or indirect arrangement or understandings with
any other persons to distribute or regarding the distribution of such Conversion Shares (this
representation and warranty not limiting Vision’s right to sell the Conversion Shares pursuant to
any registration statement or otherwise in compliance with applicable federal and state securities
laws) in violation of the Securities Act or any applicable state securities law. Vision is
acquiring the Conversion Shares hereunder in the ordinary course of its business.

          (c) Investor Status. At the time Vision was offered the Conversion Shares, it was,
and as of the date hereof it is, and on the Closing Date it will be either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act
or

3

 

(ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
Vision is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

          (d) Experience of Vision. Each of VOMF and VCAF, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the Conversion, and has so
evaluated the merits and risks of such investment. Each of VOMF and VCAF is able to bear the
economic risk of an investment in the Conversion Shares and, at the present time, is able to afford
a complete loss of such investment.

     5. Conditions to Vision’s Conversion Obligation. The obligation of Vision hereunder to
consummate the Conversion at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are for the Vision’s sole
benefit and may be waived by Vision at any time in its sole discretion by providing the Company
with prior written notice thereof:

          (a) Issuance of Shares. The Company shall have delivered to Vision certificates
representing the Conversion Shares.

          (b) CEO Conversion. The CEO shall have converted the CEO shares into shares of the
Company’s common stock at the Conversion Price.

          (c) Representations and Warranties. The representations and warranties of the Company
set forth in Section 4 of this Agreement shall be true and correct in all material respects (except
for those representations and warranties that are qualified by materiality or Material Adverse
Effect, which shall be true and correct in all respects) as of the date when made and as of the
Closing Date as though made at that time (except for representations and warranties that speak as
of a specific date) and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Closing Date.

          (d) Performance. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by it at or prior to the Closing.

          (e) Officer’s Certificate. The Company shall have delivered to Vision a certificate,
dated as of the Closing Date and signed by its Chief Executive Officer or its President certifying
to the fulfillment of the conditions specified in Sections 5(c) and (d) in a form reasonably
acceptable to Vision.

          (f) Public Offering. The Registration Statement shall have been declared effective by
the Securities and Exchange Commission and the securities issued in the Public Offering shall have
commenced trading on the NYSE Amex, LLC.

          (g) Representations and Warranties to the Underwriters. The representations and
warranties of the Company contained in Section __ of the form of Underwriting Agreement relating to
the Public Offering shall be true and correct in all material respects.

4

 

     6. Transfer Restrictions.

          (a) Compliance with Laws. Notwithstanding any other provision of this Section 6,
Vision covenants that the Conversion Shares may be disposed of only pursuant to an effective
registration statement under, and in compliance with the requirements of, the Securities Act of
1933, as amended (the “Securities Act”), or pursuant to an available exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act, and in compliance
with any applicable state, federal or foreign securities laws. In connection with any transfer of
the Conversion Shares other than (i) pursuant to an effective registration statement, (ii) to the
Company, or (iii) pursuant to Rule 144 (provided that Vision provides the Company with reasonable
assurances (in the form of seller and broker representation letters) that the Conversion Shares may
be sold pursuant to such rule), the Company may require the transferor thereof to provide to the
Company, at the transferor’s expense, an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such
transferred Conversion Shares under the Securities Act.

     (b) Legends. Certificates evidencing the Conversion Shares shall bear any legend as
required by the “blue sky” laws of any state and a restrictive legend in substantially the
following form, until such time as they are not required under Section 6(c) or applicable law:

     THESE SECURITIES HAVE NOT BEEN REGISTERED] UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), 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 OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT. NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE
EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.

     (c) Removal of Legends. The restrictive legend set forth in Section 6(b) above shall
be removed and the Company shall issue or shall cause its transfer agent to issue a certificate
without such restrictive legend or any other restrictive legend to the holder of the applicable
Conversion Shares upon which it is stamped or issue to such holder by electronic delivery at the
applicable balance account at the Depository Trust Company (“DTC”), if (i) such Conversion Shares
are registered for resale under the Securities Act (provided that, if Vision is selling pursuant to
the effective registration statement registering the Conversion Shares for resale, Vision agrees to
only sell such Conversion Shares during such time that such registration statement is effective and
not withdrawn or suspended, and only as permitted by such registration statement), (ii) such
Conversion Shares are sold or transferred pursuant to Rule 144 (if the transferor is not an
“affiliate” of the Company, as such term is defined in the Securities Act), or (iii) such
Conversion Shares are eligible for sale under Rule 144, without the

5

 

requirement for the Company to be in compliance with the current public information required
under Rule 144 as to such securities and without volume or manner-of-sale restrictions.
Certificates for Conversion Shares subject to legend removal hereunder may be transmitted to Vision
by crediting the account of the Vision’s prime broker with DTC as directed by Vision.

     (d) Acknowledgement. Each of VOMF and VCAF acknowledge their primary responsibilities
under the Securities Act and accordingly will not sell or otherwise transfer the Conversion Shares
or any interest therein without complying with the requirements of the Securities Act.

     7. Notices. All notices, requests, consents and other communications hereunder shall
be in writing, shall be mailed (A) if within domestic United States by first-class registered or
certified airmail, or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by International Federal Express or
facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail
domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight
carrier, one (1) business day after so mailed, (iii) if delivered by International Federal Express,
two (2) business days after so mailed, (iv) if delivered by facsimile, upon electric confirmation
of receipt and shall be delivered as addressed as follows:

if to the Company or CEO, to:

T3 Motion, Inc.

2990 Airway Avenue, Building A

Costa Mesa, CA 92626

Attn: Kelly Anderson

Phone: (714) 619-3600

Telecopy: (714) 619-3616

with a copy to:

LKP Global Law LLP

1901 Avenue of the Stars, Suite 480

Los Angeles, CA 90067

Attn: Ryan Hong

Phone: (424) 239-1890

Telecopy: (424) 239-1882

if to Vision, to:

Vision Opportunity Master Fund, Ltd.

20 W 55th Street

New York, New York 10019

Attn: Carl Kleidman

Phone: (212) 849-8246

Telecopy:

with a copy to:

Loeb and Loeb LLP

345 Park Avenue

6

 

New York, NY 10154

Attn: Fran Stoller

Phone: (212) 407-4935

Telecopy: (212) 214-0706

     8. Legal Fees and Expenses. The Company shall pay its own fees and expenses and shall
pay the reasonable and documented fees and expenses of Vision’s legal counsel in connection with
this Agreements and the transactions contemplated hereby.

     9. Amendments; Existing Terms. This Agreement shall not be modified, amended or
terminated without the written consent of all of the parties hereto. Except as amended herein, the
Debenture remains in full force.

     10. Further Assurances. Each of the parties hereto shall use its reasonable best
efforts to do all things necessary and advisable to make effective the transaction contemplated
hereby and shall cooperate and take such action as may be reasonably requested by the other party
in order in carry out fully the provisions and purposes of this Agreement and the transactions
contemplated thereby.

     11. Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile) each of which shall be deemed to be an original, or which together shall
constitute one in the same instrument.

     12. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to principles of conflicts of law.

     IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above..

	 	 	 	 	 
	 	T3 MOTION, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 
	 	 	 
	 	Ki Nam 	 
	 
	 	VISION OPPORTUNITY MASTER FUND LTD.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

7

 

	 	 	 	 	 
	 	VISION CAPITAL ADVANTAGE FUND, LP

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

8

 

SCHEDULE A

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number of	 	Number of	 	 
	Name	 	Preferred Shares	 	Conversion Shares	 	IRS Employer I.D. Number
	Vision Opportunity
Master Fund, Ltd.
	 	 	7,451,765	 	 	 	 	 	 	 	 	 
	Vision Capital
Advantage Fund, LP
	 	 	1,918,933	 	 	 	 	 	 	 	 	 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00187-of-00352.parquet"}]]