SUBSIDIARY
GUARANTEE, dated as of May 28, 2009 (this “
Guarantee ”), made by each of the signatories hereto
(together with any other entity that may become a party hereto as
provided herein, the “ Guarantors ”), in favor
of the purchasers signatory (together with their permitted assigns,
the “ Purchasers ”) to that certain Securities
Purchase Agreement, dated as of the date hereof, between T3 Motion,
Inc., a Delaware corporation (the “ Company ”),
and the Purchasers.
WHEREAS, pursuant
to that certain Securities Purchase Agreement, dated as of the date
hereof, by and between the Company and the Purchasers (the “
Purchase Agreement ”), the Company has agreed to sell
and issue to the Purchasers, and the Purchasers have agreed to
purchase from the Company the Debentures, subject to the terms and
conditions set forth therein; and
WHEREAS, each
Guarantor will directly benefit from the extension of credit to the
Company represented by the issuance of the Debentures;
and
NOW, THEREFORE, in
consideration of the premises and to induce the Purchasers to enter
into the Purchase Agreement and to carry out the transactions
contemplated thereby, each Guarantor hereby agrees with the
Purchasers as follows:
1.
Definitions . Unless otherwise defined herein, terms defined
in the Purchase Agreement and used herein shall have the meanings
given to them in the Purchase Agreement. The words
“hereof,” “herein,” “hereto”
and “hereunder” and words of similar import when used
in this Guarantee shall refer to this Guarantee as a whole and not
to any particular provision of this Guarantee, and Section and
Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms. The following terms shall have the following
meanings:
“
Guarantee ” means this Subsidiary Guarantee, as the
same may be amended, supplemented or otherwise modified from time
to time.
“
Obligations ” means, in addition to all other costs
and expenses of collection incurred by Purchasers in enforcing any
of such Obligations and/or this Guarantee, all of the liabilities
and obligations (primary, secondary, direct, contingent, sole,
joint or several) due or to become due, or that are now or may be
hereafter contracted or acquired, or owing to, of the Company or
any Guarantor to the Purchasers, including, without limitation, all
obligations under this Guarantee, the Debentures and any other
instruments, agreements or other documents executed and/or
delivered in connection herewith or therewith, in each
case,
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whether now or
hereafter existing, voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or
recovered directly or indirectly from any of the Purchasers as a
preference, fraudulent transfer or otherwise as such obligations
may be amended, supplemented, converted, extended or modified from
time to time. Without limiting the generality of the foregoing, the
term “Obligations” shall include, without limitation:
(i) principal of, and interest on the Debentures and the loans
extended pursuant thereto; (ii) any and all other fees,
indemnities, costs, obligations and liabilities of the Company or
any Guarantor from time to time under or in connection with this
Guarantee, the Debentures and any other instruments, agreements or
other documents executed and/or delivered in connection herewith or
therewith; and (iii) all amounts (including but not limited to
post-petition interest) in respect of the foregoing that would be
payable but for the fact that the obligations to pay such amounts
are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the
Company or any Guarantor.
(i) The Guarantors
hereby, jointly and severally, unconditionally and irrevocably,
guarantee to the Purchasers and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment
and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
(ii) Anything
herein or in any other Transaction Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Transaction Documents shall in no event exceed
the amount which can be guaranteed by such Guarantor under
applicable federal and state laws, including laws relating to the
insolvency of debtors, fraudulent conveyance or transfer or laws
affecting the rights of creditors generally (after giving effect to
the right of contribution established in
Section 2(b)).
(iii) Each
Guarantor agrees that the Obligations may at any time and from time
to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this
Section 2 or affecting the rights and remedies of the
Purchasers hereunder.
(iv) The guarantee
contained in this Section 2 shall remain in full force and
effect until all the Obligations and the obligations of
each
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Guarantor under
the guarantee contained in this Section 2 shall have been
satisfied by indefeasible payment in full.
(v)
Notwithstanding anything to the contrary in this Guarantee, with
respect to any defaulted non-monetary Obligations the specific
performance of which by the Guarantors is not reasonably possible
(e.g. the issuance of the Company’s Common Stock), the
Guarantors shall only be liable for making the Purchasers whole on
a monetary basis for the Company’s failure to perform such
Obligations in accordance with the Transaction
Documents.
(b) Right of
Contribution . Subject to Section 2(c), each Guarantor
hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder,
such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor’s
right of contribution shall be subject to the terms and conditions
of Section 2(c). The provisions of this Section 2(b) shall in
no respect limit the obligations and liabilities of any Guarantor
to the Purchasers and each Guarantor shall remain liable to the
Purchasers for the full amount guaranteed by such Guarantor
hereunder.
(c) No
Subrogation . Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor
by the Purchasers, no Guarantor shall be entitled to be subrogated
to any of the rights of the Purchasers against the Company or any
other Guarantor or any collateral security or guarantee or right of
offset held by the Purchasers for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder,
until all amounts owing to the Purchasers by the Company on account
of the Obligations are indefeasibly paid in full. If any amount
shall be paid to any Guarantor on account of such subrogation
rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Guarantor in trust
for the Purchasers, segregated from other funds of such Guarantor,
and shall, forthwith upon receipt by such Guarantor, be turned over
to the Purchasers in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Purchasers, if required),
to be applied against the Obligations, whether matured or
unmatured, in such order as the Purchasers may
determine.
(d) Amendments,
Etc. With Respect to the Obligations . Each Guarantor shall
remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to
or further assent by any Guarantor, any demand for payment of any
of the Obligations made by the Purchasers may be rescinded by the
Purchasers and any of the Obligations continued, and the
Obligations, or the liability of any other Person upon or for
any
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part thereof,
or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part,
be renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Purchasers, and the Purchase
Agreement and the other Transaction Documents and any other
documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part,
as the Purchasers may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held
by the Purchasers for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. The Purchasers shall
have no obligation to protect, secure, perfect or insure any Lien
at any time held by them as security for the Obligations or for the
guarantee contained in this Section 2 or any property subject
thereto.
(e) Guarantee
Absolute and Unconditional . Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Purchasers
upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Obligations,
and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and
all dealings between the Company and any of the Guarantors, on the
one hand, and the Purchasers, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance
upon the guarantee contained in this Section 2. Each Guarantor
waives to the extent permitted by law diligence, presentment,
protest, demand for payment and notice of default or nonpayment to
or upon the Company or any of the Guarantors with respect to the
Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment and
performance without regard to (a) the validity or
enforceability of the Purchase Agreement or any other Transaction
Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by the Purchasers, (b) any
defense, set-off or counterclaim (other than a defense of payment
or performance or fraud by Purchasers) which may at any time be
available to or be asserted by the Company or any other Person
against the Purchasers, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Company
or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company for the
Obligations, or of such Guarantor under the guarantee contained in
this Section 2, in bankruptcy or in any other instance. When
making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Purchasers may, but
shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as they may have against
the Company, any other Guarantor or any other Person or against any
collateral security or guarantee for the Obligations or any right
of offset with respect thereto, and any failure by the Purchasers
to make any such demand, to pursue such other rights or remedies
or
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to collect any
payments from the Company, any other Guarantor or any other Person
or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Company,
any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Purchasers against any
Guarantor. For the purposes hereof, “demand” shall
include the commencement and continuance of any legal
proceedings.
(f)
Reinstatement . The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as
the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored
or returned by the Purchasers upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or any
Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for,
the Company or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been
made.
(g)
Payments . Each Guarantor hereby guarantees that payments
hereunder will be paid to the Purchasers without set-off or
counterclaim in U.S. dollars at the address set forth or referred
to in the Signature Pages to the Purchase Agreement.
3.
Representations and Warranties . Each Guarantor hereby makes
the following representations and warranties to Purchasers as of
the date hereof:
(a)
Organization and Qualifi
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