NEITHER THIS
SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER 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 ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
SERIES E COMMON STOCK PURCHASE
WARRANT
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Initial
Exercise Date: May 28, 2009
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THIS
COMMON STOCK PURCHASE WARRANT (the “ Warrant ”)
certifies that, for value received,
(the “ Holder ”) is entitled, upon the terms and
subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the
“ Initial Exercise Date ”) and on or prior to
the close of business on the five year anniversary of the Initial
Exercise Date (the “ Termination Date ”) but not
thereafter, to subscribe for and purchase from T3 Motion, Inc., a
Delaware corporation (the “ Company ”), up to
shares (the “ Warrant Shares ”) of Common Stock.
The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section
2(b).
Section 1 . Definitions . Capitalized terms used
and not otherwise defined herein shall have the meanings set forth
in that certain Securities Purchase Agreement (the “
Purchase Agreement ”), dated May 28, 2009, among
the Company and the purchasers signatory thereto.
a) Exercise of
Warrant . Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date and on or before the Termination
Date by delivery to the Company (or such other office or agency of
the Company as it may designate by notice in writing to the
registered Holder at the address of the Holder appearing on the
books of the
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Company) of a
duly executed facsimile copy of the Notice of Exercise Form annexed
hereto; and, within 3 Business Days of the date said Notice of
Exercise is delivered to the Company, the Company shall have
received payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn
on a United States bank. Notwithstanding anything herein to the
contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of
the Warrant Shares available hereunder and the Warrant has been
exercised in full, in which case, the Holder shall surrender this
Warrant to the Company for cancellation within 3 Business Days of
the date the final Notice of Exercise is delivered to the Company.
Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder
shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable
number of Warrant Shares purchased. The Holder and the Company
shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases. The Company shall deliver
any objection to any Notice of Exercise Form within 1 Business Day
of receipt of such notice. In the event of any dispute or
discrepancy, the records of the Holder shall be controlling and
determinative in the absence of manifest error. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number
of Warrant Shares available for purchase hereunder at any given
time may be less than the amount stated on the face
hereof.
b)
Exercise Price . The exercise price per share of the Common
Stock under this Warrant shall be $1.20 , subject to
adjustment hereunder (the “ Exercise Price
”).
c)
Cashless Exercise . If at any time after the 18-month
anniversary of the date of the Purchase Agreement, there is no
effective Registration Statement registering, or no current
prospectus available for, the resale of the Warrant Shares by the
Holder, then this Warrant may also be exercised 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:
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(A)
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=
the VWAP on the Business Day immediately preceding the date of the
delivery of the Notice of Exercise;
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(B)
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=
the Exercise Price of this Warrant, as adjusted; and
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(X)
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= the number of Warrant Shares
issuable upon exercise of this Warrant in accordance with the terms
of this Warrant by means of a cash exercise rather than a cashless
exercise.
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d)
Exercise Limitations . The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with
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the
Holder’s Affiliates, and any other person or entity acting as
a group together with the Holder or any of the Holder’s
Affiliates), would beneficially own in excess of the Beneficial
Ownership Limitation (as defined below). 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 (A) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the
Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by
the Holder or any of its affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 2(d),
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 the Company is
not 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 2(d) applies, the determination of whether this
Warrant is exercisable (in relation to other securities owned by
the Holder together with any Affiliates) and of which portion of
this 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 this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates) and of which portion of this Warrant
is exercisable, in each case subject to the Beneficial Ownership
Limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. In addition, a
determination as to any group status as 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 2(d), 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, as the case
may be, (B) a more recent public announcement by the Company
or (C) any other notice by the Company or the Transfer Agent
setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of a Holder, the Company shall
within two Business Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding. In
any case, the number of outstanding shares of Common Stock shall be
determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or
its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The “
Beneficial Ownership Limitation ” shall be 9.99% of
the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock
issuable upon exercise of this Warrant. The Holder, upon not less
than 61 days’ prior notice to the Company (unless there
are less than 61 days remaining until the Termination Date, in
which case such notice period shall be one day less than the number
of days remaining until the Termination Date), may waive the
Beneficial
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Ownership
Limitation provisions of this Section 2(d). Any such waiver
will not be effective until the 61st day after such notice is
delivered to the Company (or such shorter period described in the
previous sentence if there are less than 61 days remaining
until the Termination Date). The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(d) to correct this
paragraph (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 this Warrant.
e) Mechanics of
Exercise .
i. Delivery of
Certificates Upon Exercise . Certificates for shares purchased
hereunder shall be transmitted by the Transfer Agent to the Holder
by crediting the account of the Holder’s prime broker with
the Depository Trust Company through its Deposit Withdrawal Agent
Commission (“ DWAC ”) system if the Company is
then a participant in such system and either (A) there is an
effective Registration Statement permitting the resale of the
Warrant Shares by the Holder or (B) the shares are eligible
for resale without volume or manner-of-sale limitations pursuant to
Rule 144, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise within 7 Business
Days from the delivery to the Company of the Notice of Exercise
Form, surrender of this Warrant (if required) and payment of the
aggregate Exercise Price as set forth above (the “ Warrant
Share Delivery Date ”). This Warrant shall be deemed to
have been exercised on the date the Exercise Price is received by
the Company. The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 2(e)(vi) prior to
the issuance of such shares, have been paid.
ii. Delivery of
New Warrants Upon Exercise . If this Warrant shall have been
exercised in part, the Company shall, at the request of a Holder
and upon surrender of this Warrant certificate, at the time of
delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of
Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
iii. Rescission
Rights . If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates
representing
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the Warrant
Shares pursuant to Section 2(e)(i) by the Warrant Share
Delivery Date, then, the Holder will have the right to rescind such
exercise.
iv.
Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Exercise . In addition to any other rights
available to the Holder, if the Company fails to cause the Transfer
Agent to transmit to the Holder a certificate or the certificates
representing the Warrant Shares pursuant to an exercise on or
before the Warrant Share Delivery Date, and if after such date the
Holder is required by its broker to purchase (in an open market
transaction or otherwise) or the Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “
Buy-In ”), then the Company shall (A) pay in cash
to the Holder the amount by which (x) the Holder’s total
purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount
obtained by multiplying (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with
the exercise at issue times (2) the price at which the sell
order giving rise to such purchase obligation was executed, and (B)
at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Warrant Shares for which such
exercise was not honored or deliver to the Holder the number of
shares of Common Stock that would have been issued had the Company
timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted exercise of shares of Common Stock with an aggregate
sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of
the Company, evidence of the amount of such loss. Nothing herein
shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms
hereof.
v. No
Fractional Shares or Scrip . No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of
such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole
share.
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vi. Charges,
Taxes and Expenses . Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance
of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by the
Holder; provided , however , that in the event
certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder and the Company may require, as
a condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto.
vii. Closing of
Books . The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.
Section 3 . Certain Adjustments .
a) Stock
Dividends and Splits . If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise
make a distribution or distributions on shares of its Common Stock
or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (ii) subdivides outstanding shares
of Common Stock into a larger number of shares,
(iii) combine
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