SETTLEMENT AND RELEASE
AGREEMENT
This SETTLEMENT
AND RELEASE AGREEMENT (hereinafter, the “Release”) is
made and entered into as of March 4, 2009 by and between T3
Motion, Inc., a Delaware corporation (the “Company”) on
the one hand, and Sooner Cap, Albert Lin, and Maddog Executive
Services, an affiliate of Albert Lin, (collectively “Sooner
Cap”) on the other hand. The Company and Sooner Cap may be
collectively or singularly referred to hereafter as the
“Parties” or the “Party.”
A. WHEREAS,
on December 27, 2007, the Parties entered into that certain
agreement for the payment of funds and securities to Sooner Cap in
connection with certain financing transactions related to the
Company that arose during the period December 12, 2007 and
December 31, 2008 (the “Agreement”).
B. WHEREAS, a
dispute has arisen between the Parties over certain obligations
under the Agreement.
C. WHEREAS,
the Parties make no admission of liability or wrongdoing and are
entering into this Agreement for the sole purpose of resolving this
matter, avoiding the time and expense incident to protracted
litigation, and obtaining peace.
NOW, THEREFORE, in
consideration of the mutual covenants and promises in this
Agreement, and for other further good and valuable consideration,
including without limitation the mutual avoidance of further costs,
inconvenience, and uncertainties relating to litigation, the
Parties agree as follows.
1.
Recitals . The Recitals set forth above are an integral part
of this Release, and shall be used in any interpretation of this
Release.
2.
Settlement Obligations .
2.1
Stock Issuance . The Company shall issue to Sooner Cap a
total of 931,034 restricted and unregistered shares of the
Company’s common stock (the “Settlement Shares”).
The Company shall use its best efforts to issue and have delivered
to Sooner Cap a certificate representing the Settlement Shares as
soon as practicable after the execution of this Release.
2.2
Rule 144. At Sooner Cap’s cost, upon delivery of
reasonable certificates customary for Rule 144 opinions to
Company counsel and delivery of the certificate representing the
Settlement Shares to the Company’s transfer agent
(“Transfer Agent”), the Company shall cause its counsel
to issue a legal opinion to the Transfer Agent required to effect
the removal of any legend regarding federal securities act
compliance promptly after receipt of a written notice
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from Sooner Cap
requesting legend removal after (i) any sale of such
Settlement Shares pursuant to Rule 144 or (ii) such
Settlement Shares are eligible for sale under Rule 144 without
the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to such
Settlement Shares and without volume or manner-of-sale
restrictions.
The
Company agrees that following such time that a legend is no longer
required, it will promptly following the delivery by a Sooner Cap
to the Company or the Transfer Agent of a certificate representing
Settlement Shares, as applicable, issued with a restrictive legend,
deliver or cause to be delivered to such Sooner Cap a certificate
representing such shares that is free from all restrictive and
other legends. The Company may not make any notation on its records
or give instructions to the Transfer Agent that enlarge the
restrictions on transfer set forth in this Section 2.
Certificates for Settlement Shares subject to legend removal
hereunder shall be transmitted by the Transfer Agent to Sooner Cap
by crediting the account of the Sooner Cap’s prime broker
with the Depository Trust Company System as directed by such Sooner
Cap.
3.
Termination of Agreement .
3.1
Termination of Company’s Obligation to Make Cash
Payments . As of December 31, 2008, the Company owed
Sooner Cap an aggregate $251,993.00, net of expenses, pursuant to
the terms of the Agreement (“Cash Payment”). As of the
date of this Release, the Company’s obligation to
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