STOCKHOLDERS AGREEMENT
Exhibit 10.8
THIS STOCKHOLDERS AGREEMENT (the “Agreement”) is made as of December 30, 2009, by and
among T3 Motion, Inc., a Delaware corporation (the “Company”), Ki Nam, an individual
(“Mr. Nam”), and Vision Opportunity Master Fund, Ltd. (“VOMF”) and Vision Capital
Advantage Fund, L.P. (“VCAF” and together with VOMF, “Vision”). Each of the
Company, Mr. Nam and Vision may herein be referred to as a “Party” and collectively, the
“Parties”.
WHEREAS, the Company issued to Mr. Nam a 10% Convertible Note, dated February 23, 2009 (the
“Note”), pursuant to which the outstanding principal and unpaid accrued interest is
$976,864.95;
WHEREAS, Vision and the Company have entered into a Securities Exchange Agreement dated as of
December 30, 2009 (the “Exchange Agreement”) and certain related agreements, pursuant to
which the Company will issue to Vision shares of its Series A Preferred Stock (“Series A
Preferred Stock”) and warrants to purchase shares of the Company’s Common Stock
(“Warrants”);
WHEREAS, the transactions contemplated by the Exchange Agreement and the other transactions
related thereto constitute an “Equity Financing Offer” as defined in the Note;
WHEREAS, in connection with such Equity Financing Offer, Mr. Nam desires to convert the
outstanding principal and unpaid accrued interest under the Note into shares of Series A Preferred
Stock and Warrants, in accordance with the terms of the Note; and
WHEREAS, the parties also desire that this Agreement to set forth their agreements and
understandings with respect to how shares of the Company’s capital stock held by Ki Nam will be
voted;
WHEREAS, it is a condition to the obligations of Vision under the Exchange Agreement that this
Agreement be executed by the parties hereto, and the parties are willing to execute this Agreement
and be bound by the provisions hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
SECTION I — DEFINITIONS
Section 1.1. Terms Not Defined. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Exchange Agreement.
Section 1.2. Defined Terms. The following capitalized terms, as used in this Agreement,
shall have the meanings set forth below.
“Board of Directors” means the board of directors of the Company.
“Shares” means, at any time, shares of (i) Common Stock, (ii) Series A Preferred
Stock, and (iii) any other equity securities now or hereafter issued by the Company, together with
any other shares of stock issued or issuable with respect thereto (whether by way of a stock
dividend, stock split or in exchange for or upon conversion of such shares or otherwise in
connection with a combination of shares, recapitalization, merger, consolidation or other corporate
reorganization).
“Transfer” means any direct or indirect transfer, donation, sale, assignment, pledge,
hypothecation, grant of a security interest in or other disposal or attempted disposal of all or
any portion of a security, any interest or rights in a security, or any rights under this
Agreement. “Transferred” means the accomplishment of a Transfer, and “Transferee” means
the recipient of a Transfer.
SECTION II — REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of Each Party. Each Party hereby represents,
warrants and covenants to the other Parties as follows:
(a) such Party has full authority and power under its charter, by-laws, governing partnership
agreement or comparable document (if applicable) to enter into this Agreement and perform its
obligations hereunder;
(b) this Agreement constitutes the valid and binding obligation of such Party enforceable
against it in accordance with its terms, except: (i) as limited by 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) to the extent the
indemnification provisions may be limited by applicable federal or state securities laws; and
(c) the execution, delivery and performance by such Party of this Agreement: (i) does not and
will not violate any laws, rules or regulations of the United States or any state or other
jurisdiction applicable to such Party, or require such Party to obtain any approval, consent or
waiver of, or to make any filing with, any person that has not been obtained or made; and (ii) does
not and will not result in a breach of, constitute a default under, accelerate any obligation under
or give rise to a right of termination of any indenture or loan or credit agreement or any other
agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award to which such Party is a party or
by which the property of such Party is bound or affected, or result in the creation or imposition
of any mortgage, pledge, lien, security interest or other charge or encumbrance on any of the
assets or properties of such Party.
SECTION III — CONVERSION OF NOTE
Section 3.1. Conversion of Note. Upon the closing of the transactions contemplated by the Exchange Agreement, the outstanding
principal amount and unpaid accrued interest on the Note shall be converted into, and the Company
shall issue to Mr. Nam:
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(a) 976,865 shares of Series A Preferred Stock; and
(b) Warrants to purchase up to 1,953,730 shares of Common Stock at an exercise price of
$0.70 per share.
Section 3.2. Warrants. The Warrants issued to Mr. Nam pursuant to Section 3.1(b) shall be
in the same form and have the same terms (other than with respect to the number of Warrant Shares)
as the “Series G Common Stock Purchase Warrant” issued to Vision pursuant to the Exchange
Agreement.
Section 3.3. No Further Obligations under Note. Upon the conversion of the Note as set
forth in Section 3.1, the Note (and all outstanding amounts due thereunder) shall be deemed
satisfied in full, and no party thereto shall have any further rights or obligations thereunder.
SECTION IV — ELECTION OF DIRECTORS
Section 4.1. Board Composition. Mr. Nam agrees to vote his Shares having voting power (and
any other Shares over which he exercises voting control) to the extent necessary, in connection
with the election of members of the Board of Directors, to elect and continue in office as
Directors: (i) Two (2) persons nominated by Vision if Vision holds 22% or more of the outstanding
Common Stock (assuming that all of Vision’s preferred stock has been converted into Common Stock,
but not including any of the Warrants) or (ii) one person nominated by Vision if Vision holds 12%
or more, but less than 22%, of the outstanding Common Stock (assuming that all of Vision’s
preferred stock has been converted into Common Stock, but not including any of the Warrants). Each
person or persons nominated by Vision in accordance with the foregoing sentence shall be referred
to herein as a “Vision Nominee”. Vision agrees to vote all its Shares in connection with
the election of the members of the Board of Directors for the Vision Nominees.
Section 4.2. Removal; Vacancies. Mr. Nam agrees to vote his Shares having voting power
(and any other Shares over which he exercises voting control) to the extent necessary, for the
removal of any Vision Nominee as a Director upon the request of Vision, and for the election to the
Board of Directors of a substitute designated by Vision in accordance with the provisions hereof.
Mr. Nam further agrees to vote his Shares having voting power (and any other Shares over which he
exercises voting control) in such manner as shall be necessary or appropriate to ensure that any
vacancy on the Board of Directors occurring for any reason involving a Vision Nominee shall be
filled only in accordance with the provisions of this Section IV.
Section 4.3. Assignment. Mr. Nam agrees, as a condition to any Transfer of his Shares
other than open market sales, to cause the Transferee to agree to the provisions of this Section
IV, whereupon such Transferee shall be subject to the provisions hereof to the same extent as Mr.
Nam in connection with its ownership of the Shares so Transferred.
SECTION V — MISCELLANEOUS PROVISIONS
Section 5.1. Legend on Securities. The Company and Mr. Nam acknowledge and agree that in
addition to any other legend on the certificates representing Shares held by Mr. Nam, the following
legend shall substantially be typed on each certificate evidencing any of the
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Shares held at any
time by Mr. Nam; provided, however, that such legend will be removed in order to facilitate a
pending open market sale of any of the Shares:
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE PROVISIONS OF A CERTAIN STOCKHOLDERS
AGREEMENT, DATED AS OF DECEMBER 30 2009, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET
FORTH THEREIN. A COMPLETE AND CORRECT COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT
THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST AND WITHOUT
CHARGE.
Section 5.2. Amendment and Waiver. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed, in the case of an amendment, by the
Company, Mr. Nam and Vision, in the case of a waiver, by the party against whom enforcement of any
such waived provision is sought. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.
Section 5.3. Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of: (a) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (Los Angeles time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile number set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (Los
Angeles time) on any Trading Day, (c) the second (2nd) Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt
by the party to whom such notice is required to be given. The address for such notices and communications shall be as
set forth on the signature pages attached hereto.
Section 5.4. Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
Section 5.5. Counterparts. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data
file, such signature shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and effect as if such facsimile or
“.pdf” signature page were an original thereof.
Section 5.6. Remedies. It is specifically understood and agreed that any breach of the
provisions of this Agreement by any Person subject hereto will result in irreparable injury to the
other parties hereto, that the remedy at law alone will be an inadequate remedy for such breach,
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and that, in addition to any other legal or equitable remedies which they may have, such other
parties may enforce their respective rights by actions for specific performance (to the extent
permitted by law) and the Company may refuse to recognize any unauthorized Transferee as one of its
stockholders for any purpose, including, without limitation, for purposes of voting rights, until
the relevant party or parties have complied with all applicable provisions of this Agreement.
Section 5.7. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
Section 5.8. Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter contained herein.
Section 5.9. Law Governing. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the state of Delaware (without giving effect to principles of
conflicts of law).
Section 5.10. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the respective successors and permitted assigns of the parties hereto as
contemplated herein, and any successor to the Company by way of merger or otherwise shall
specifically agree to be bound by the terms hereof as a condition of such successor. This
Agreement may not be assigned by any Party hereto without the prior written consent of the other
Parties, which consent shall not be unreasonably withheld.
Section 5.11. WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
Section 5.12.
Section 5.13.
Section 5.14.
Section 5.12.
Section 5.13.
Section 5.14.
Section 5.15. Term. This Agreement shall terminate upon the earlier of such time that Vision holds
less than 12% of the outstanding Common Stock (assuming that all of Vision’s preferred stock has
been converted into Common Stock, but not including any of the Warrants).
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Stockholders Agreement to be duly
executed as of the date first set forth above.
| T3 Motion Inc. | ||||||||
| By: | /s/ Xxxxx Xxxxxxxx | |||||||
| Name: | Xxxxx Xxxxxxxx | |||||||
| Its: | CFO | |||||||
| Address: | 0000 Xxxxxx Xxx, Xxx X | |||||||
| Fax: | ||||||||
| Vision Opportunity Master Fund, Ltd. | ||||||||
| By: | /s/ Xxxx Xxxxxxxx | |||||||
| Name: | Xxxx Xxxxxxxx | |||||||
| Its: | Director | |||||||
| Address: | ||||||||
| Fax: | ||||||||
| Vision Capital Advantage Fund, L.P. | ||||||||
| By: | VCAF GP, LLC | |||||||
| By: | /s/ Xxxx Xxxxxxxx | |||||||
| Xxxx Xxxxxxxx, Authorized Signatory | ||||||||
| Address: | ||||||||
| Fax: | ||||||||
| /s/ Ki Nam | ||||||||
| Ki Nam | ||||||||
| Address: | ||||||||
| Fax: | ||||||||
