VOTING ARRANGEMENT AGREEMENT
Exhibit
10.97
This
Voting Arrangement Agreement (this “Agreement”) is made as of
December 4, 2008, between Bendix CVS Canada Inc. (the “Purchaser”), SmarTire Systems
Inc. (the “Vendor”), YA
Global Investments, L.P., f/k/a Cornell Capital Partners LP, (“YA Global”), Xentenial
Holdings Limited (“Xentenial”), Staraim
Enterprises Limited (together with YA Global and Xentenial, the “Convertible Debenture
Holders”).
WHEREAS:
|
A.
|
The
Purchaser, Bendix Commercial Vehicle Systems LLC (as guarantor of the
Purchaser), the Vendor and certain subsidiaries of the Vendor intend to
enter into an Asset Purchase Agreement (the “Asset Purchase
Agreement”) which provides for, among other things, the purchase by
the Purchaser of certain assets of the Vendor (the “Assets”), pursuant to a
letter of intent dated October 15,
2008.
|
|
B.
|
Pursuant
to the Asset Purchase Agreement, the Vendor covenants with the Purchaser
that it will hold a special meeting of the shareholders of the Vendor (the
“Special Meeting”)
to approve and adopt the special resolutions attached as Exhibit 1 to
Appendix A (the “Special
Resolutions”).
|
|
C.
|
The
Convertible Debenture Holders, upon conversion of the necessary amount of
convertible debt into common shares of the Vendor, will vote such shares
to approve the Special Resolutions at the Special Meeting in accordance
with the terms and conditions hereinafter set
forth.
|
|
D.
|
It
is in the best interests of the Convertible Debenture Holders that the
purchase and sale of the Assets contemplated in the Asset Purchase
Agreement proceed.
|
|
E.
|
As
a condition precedent to the Purchaser entering into the Asset Purchase
Agreement, the Vendor and the Convertible Debenture Holders have agreed to
enter into this Agreement with the
Purchaser.
|
NOW,
THEREFORE, in consideration of the foregoing premises, $1 paid by each party to
each other party hereto and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
|
1.
|
Each
of the Convertible Debenture Holders represents and warrants to the Purchaser
that:
|
|
(a)
|
collectively
the Convertible Debenture Holders have the right to convert a portion of
their convertible debt into at least twenty-four billion common shares of
the Vendor (the “Conversion
Shares”).
|
|
(b)
|
neither
the execution, delivery or performance of this Agreement will constitute a
violation of, or conflict with, or default under, any contract,
understanding, arrangement or restriction of any kind to which it is a
party, including any of its organizational documents;
and
|
|
(c)
|
this
Agreement is a valid and binding agreement enforceable by the Purchaser
against it in accordance with its terms, subject to applicable laws,
including, without limitation, laws relating to fiduciary duties and laws
relating to bankruptcy, insolvency, reorganization and other laws of
general application relating to or affecting creditors’ rights generally
and the availability of equitable
remedies.
|
|
2.
|
Each
of the Convertible Debenture Holders hereby agrees and undertakes to
cause, prior to the Time of Closing (as defined in the Asset Purchase
Agreement), and subject to the satisfaction of the Conditions (as defined
below):
|
|
(a)
|
to
exercise its right to convert the necessary amount of convertible debt to
provide the required number of common shares of the Vendor to pass the
Special Resolutions, provided that the Vendors shall not be required to
convert more than US$2,000,000.00 of their convertible debt in connection
with the same;
|
|
(b)
|
to
enter into the voting agreement with the Purchaser and Vendor in the form
attached as Appendix A (the “Voting Agreement”);
and
|
|
(c)
|
to
act in accordance with its obligations under the Voting
Agreement.
|
|
3.
|
Each
of the Convertible Debenture Holders hereby acknowledges and confirms that
the collateral assignment to YA Global (in its capacity as collateral
agent for the Convertible Debenture Holders) of, and security interest in
and to, payments due the Vendor under the Asset Purchase Agreement are
subject to the Purchaser's set-off rights set forth in the Purchase
Agreement.
|
|
4.
|
As
used herein, “Conditions” means: (i)
the Asset Purchase Agreement shall not have terminated in accordance with
its terms; (ii) neither the Vendor nor any one of the Convertible
Debenture Holders shall have received or become subject to any executive,
administrative or judicial order, writ, injunction, stay or other process
prohibiting or restricting such party from taking any of the actions
contemplated under this Agreement, the Asset Purchase Agreement or any
Voting Agreement; (iii) there shall not have been commenced or threatened
in writing against any of the Convertible Debenture Holders any material
action or proceeding relating to any of the transactions contemplated
under this Agreement or any Voting Agreement whereby such Convertible
Debenture Holder believes, acting reasonably, there is a material risk
that such action or proceeding has merit, provided, however that if the
Purchaser, acting reasonably, disagrees that there is such a material
risk, the parties will promptly obtain a legal opinion from a third party
law firm reasonably acceptable to both parties as to whether
there is such a material risk, and if such legal opinion indicates that
there is no such material risk, this condition shall be satisfied; and
(iv) the performance by a Convertible Debenture Holder of its obligations
hereunder or under any Voting Agreement would constitute a breach by such
Convertible Debenture Holder of applicable law, as determined by such
Convertible Debenture Holder acting reasonably, provided, however, that if
the Purchaser, acting reasonably, disagrees with such Convertible
Debenture Holder as to whether such performance would cause a breach of
applicable law, the parties will promptly obtain a legal opinion from a
third party law firm reasonably acceptable to both parties as to whether
such performance would constitute a violation of applicable law, and if
such legal opinion indicates that no such violation or breach would occur,
this condition shall be satisfied; provided, that if, any
event described in the foregoing clause (ii), (iii), or (iv) occurs
involving one or more of the Convertible Debenture Holders, each such
Convertible Debenture Holder agrees to use its commercially reasonable
best efforts to (x) cause such order, writ, injunction, stay, process,
action or proceeding to be dismissed or threat to be withdrawn as to such
Convertible Debenture Holder as soon as practicable, and/or (y) determine
and act in a manner in which to perform its obligations hereunder which
does not, or will not, constitute a breach of such applicable law,
provided that the Convertible Debenture Holders shall not be required to
pay more than US$250,000.00 in out of pocket expenses (including, without
limitation, attorneys fees and expenses) or payments to third parties in
order to obtain or satisfy conditions (x) or (y). If at
any time any party hereto believes condition (ii), (iii) or (iv) may
become applicable, it will forthwith both notify the other parties and
provide all relevant information to the other parties and, if applicable,
any appointed third party law firm in order for each of the parties and
such law firm to make its own
determination.
|
|
5.
|
Each
of the parties will from time to time execute and deliver all such further
documents and instruments and do all acts and things as any other party
may reasonably require to effectively carry out or better evidence or
perfect the full intent and meaning of this
Agreement.
|
|
6.
|
This
Agreement shall be binding upon and enure to the benefit of the parties
and their respective successors and
assigns.
|
|
7.
|
This
Agreement shall be governed by and construed in accordance with the laws
of the Province of British Columbia and the laws of Canada applicable
therein.
|
|
8.
|
For
the purpose of all legal proceedings, this Agreement will be deemed to
have been performed in the Province of British Columbia and the courts of
the Province of British Columbia will have jurisdiction to entertain any
action arising under this Agreement. Each of the parties
attorns to the jurisdiction of the courts of the Province of British
Columbia.
|
|
9.
|
This
Agreement may be executed in any number of counterparts, each of which
will be deemed to be an original and all of which taken together will be
deemed to constitute one and the same
instrument.
|
|
10.
|
Delivery
of an executed signature page to this Agreement by any party by electronic
transmission will be as effective as delivery of a manually executed copy
of this Agreement by such party.
|
IN
WITNESS WHEREOF the Parties have executed this Agreement.
|
BENDIX
CVS CANADA INC.
|
||
|
Per:
|
/s/
Xxxxxx XxXxxxxx
|
|
| Xxxxxx XxXxxxxx | ||
|
Per:
|
/s/
Xxxxx Xxxxxxxxx
|
|
| Xxxxx Xxxxxxxxx | ||
|
YA GLOBAL INVESTMENTS,
L.P., f/k/a
CORNELL
CAPITAL PARTNERS L.P.
|
||
|
Per:
|
/s/
Xxxx Xxxxxx
|
|
|
Xxxx
Xxxxxx, Portfolio Manager
|
||
|
XENTENIAL
HOLDINGS LIMITED
|
||
|
Per:
|
/s/
Xxxx Xxxxxx
|
|
|
Xxxx
Xxxxxx, Director
|
||
|
STARAIM
ENTERPRISES LIMITED
|
||
|
Per:
|
/s/
Xxxx Xxxxxx
|
|
|
Xxxx
Xxxxxx, Director
|
||
APPENDIX
A
VOTING
AGREEMENT
This
Voting Agreement (this “Agreement”) is made as of
____________, 2008, between Bendix CVS Canada Inc. (the “Purchaser”), SmarTire Systems
Inc. (the “Vendor”) and
the undersigned shareholder of the Vendor (the “Shareholder”).
WHEREAS:
|
A.
|
The
Purchaser, Bendix Commercial Vehicle Systems LLC (as guarantor of the
Purchaser), the Vendor and certain subsidiaries of the Vendor have entered
into an Asset Purchase Agreement (the “Asset Purchase
Agreement”) dated December 4, 2008 which provides for, among
other things, the purchase by the Purchaser of certain assets of the
Vendor (the “Assets”).
|
|
B.
|
Pursuant
to the Asset Purchase Agreement, the Vendor covenants with the Purchaser
that it will hold a special meeting of the shareholders of the Vendor (the
“Special Meeting”)
to approve and adopt the special resolutions attached as Exhibit 1 (the
“Special
Resolutions”).
|
|
C.
|
It
is in the best interests of the Shareholder that the purchase and sale of
the Assets contemplated in the Asset Purchase Agreement
proceed.
|
|
D.
|
As
a condition precedent to the obligations of the Purchaser to complete the
purchase of the Assets under the Asset Purchase Agreement, the Vendor and
the Shareholder have agreed to enter into this Agreement with the
Purchaser.
|
NOW,
THEREFORE, in consideration of the foregoing premises, $1 paid by each party to
each other party hereto and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
|
1.
|
The
Shareholder represents and warrants to the Purchaser
that:
|
|
(a)
|
it
is the legal and beneficial owner of, and has the irrevocable right to
vote or cause to be voted in respect of the Special Resolutions, the
number of common shares of the Vendor as set forth on the signature page
hereof (together with any common shares of the Vendor acquired by the
Shareholder prior to the Special Meeting, the “Shares”);
|
|
(b)
|
neither
the execution, delivery or performance of this Agreement will constitute a
violation of, or conflict with, or default under, any contract,
understanding, arrangement or restriction of any kind to which the
Shareholders is a party, including any of its organizational
documents;
|
|
(c)
|
this
Agreement is a valid and binding agreement enforceable by the Purchaser
against the Shareholder in accordance with its terms, subject to
applicable laws, including, without limitation, laws relating to fiduciary
duties and laws relating to bankruptcy, insolvency, reorganization and
other laws of general application relating to or affecting creditors’
rights generally and the availability of equitable
remedies.
|
|
2.
|
The
Shareholder hereby agrees and undertakes, subject to satisfaction of the
Conditions (as defined below), to:
|
|
(a)
|
ensure
that all of the Shares are represented at the Special
Meeting;
|
|
(b)
|
vote
all of the Shares at the Special Meeting in favour of the Special
Resolutions;
|
|
(c)
|
vote
all of the Shares against any proposed resolution which would or is
reasonably likely to interfere, impede, delay, frustrate, prevent, or
adversely affect the consummation of the Asset Purchase Agreement and the
transactions contemplated thereby or would or is reasonably likely to
result in a breach (or failure to comply) in any material respect of any
representation, warranty, covenant or agreement of the Vendor under the
Asset Purchase Agreement; and
|
|
(d)
|
vote
all of the Shares against any other action, transaction, proposal or
agreement, without regard to the terms of such action, transaction,
proposal or agreement, made in opposition to adoption of the Asset
Purchase Agreement or in competition or inconsistent with the Asset
Purchase Agreement and the transactions contemplated
thereby.
|
|
3.
|
The
Shareholder hereby undertakes, subject to satisfaction of the Conditions,
that it will not with respect to the
Shares:
|
|
(a)
|
take
any action that would make any representation or warranty contained herein
untrue or incorrect or could reasonably be expected to have the effect of
preventing, impeding or interfering with or adversely affecting its
performance of its obligations
hereunder;
|
|
(b)
|
grant
any proxies or enter into any voting trust or other agreements or
arrangements with respect to the voting of any shares, other than any
proxies, voting trusts or voting agreements or arrangements that are not
inconsistent with the voting obligations hereunder;
and
|
|
(c)
|
sell,
assign, transfer, give, bequeath, encumber or otherwise dispose of, or
enter into any contract, option or other arrangement or understanding with
respect to the direct or indirect assignment, transfer, encumbrance or
other disposition of any of the
Shares.
|
|
4.
|
As
used herein, “Conditions” means: (i)
the Asset Purchase Agreement shall not have terminated in accordance with
its terms; (ii) neither the Vendor nor any one of the Convertible
Debenture Holders (as defined in the voting arrangement agreement (the
“Voting Arrangement
Agreement”) made as of December 4, 2008 between the Vendor,
the Purchaser and YA Global Investments, L.P., f/k/a Cornell Capital
Partners LP, Xentenial Holdings Limited, and Staraim Enterprises Limited)
or any Voting Agreement (as defined in the Voting Arrangement Agreement)
shall have received or become subject to any executive, administrative or
judicial order, writ, injunction, stay or other process prohibiting or
restricting such party from taking any of the actions contemplated under
this Agreement, the Asset Purchase Agreement or the Voting Arrangement
Agreement; (iii) there shall not have been commenced or threatened in
writing against any of the Convertible Debenture Holders any material
action or proceeding relating to any of the transactions contemplated
under this Agreement or the Voting Arrangement Agreement whereby such
Convertible Debenture Holder believes, acting reasonably, there is a
material risk that such action or proceeding has merit, provided, however
that if the Purchaser, acting reasonably, disagrees that there is such a
material risk, the parties will promptly obtain a legal opinion from a
third party law firm reasonably acceptable to both parties as
to whether there is such a material risk, and if such legal opinion
indicates that there is no such material risk, this condition shall be
satisfied; and (iv) the performance by a Convertible Debenture Holder of
its obligations hereunder or under the Voting Arrangement Agreement would
constitute a breach by such Convertible Debenture Holder of applicable
law, as determined by such Convertible Debenture Holder acting reasonably,
provided, however, that if the Purchaser, acting reasonably, disagrees
with such Convertible Debenture Holder as to whether such performance
would cause a breach of applicable law, the parties will promptly obtain a
legal opinion from a third party law firm reasonably acceptable to both
parties as to whether such performance would constitute a violation of
applicable law, and if such legal opinion indicates that no such violation
or breach would occur, this condition shall be satisfied; provided, that if, any
event described in the foregoing clause (ii), (iii), or (iv) occurs
involving one or more of the Convertible Debenture Holders, each such
Convertible Debenture Holder agrees to use its commercially reasonable
best efforts to (x) cause such order, writ, injunction, stay, process,
action or proceeding to be dismissed or threat to be withdrawn as to such
Convertible Debenture Holder as soon as practicable, and/or (y) determine
and act in a manner in which to perform its obligations hereunder which
does not, or will not, constitute a breach of such applicable law,
provided that the Convertible Debenture Holders shall not be required to
pay more than US$250,000.00 in out of pocket expenses (including, without
limitation, attorneys fees and expenses) or payments to third parties in
order to obtain or satisfy conditions (x) or (y). If at
any time any party hereto believes condition (ii), (iii) or (iv) may
become applicable, it will forthwith both notify the other parties and
provide all relevant information to the other parties and, if applicable,
any appointed third party law firm in order for each of the parties and
such law firm to make its own
determination.
|
|
5.
|
Each
of the parties will from time to time execute and deliver all such further
documents and instruments and do all acts and things as any other party
may reasonably require to effectively carry out or better evidence or
perfect the full intent and meaning of this
Agreement.
|
|
6.
|
This
Agreement shall be binding upon and enure to the benefit of the parties
and their respective successors and
assigns.
|
|
7.
|
This
Agreement shall be governed by and construed in accordance with the laws
of the Province of British Columbia and the laws of Canada applicable
therein.
|
|
8.
|
For
the purpose of all legal proceedings, this Agreement will be deemed to
have been performed in the Province of British Columbia and the courts of
the Province of British Columbia will have jurisdiction to entertain any
action arising under this Agreement. Each of the parties
attorns to the jurisdiction of the courts of the Province of British
Columbia.
|
|
9.
|
This
Agreement may be executed in any number of counterparts, each of which
will be deemed to be an original and all of which taken together will be
deemed to constitute one and the same
instrument.
|
|
10.
|
Delivery
of an executed signature page to this Agreement by any party by electronic
transmission will be as effective as delivery of a manually executed copy
of this Agreement by such party.
|
IN
WITNESS WHEREOF the Parties have executed this Agreement.
|
BENDIX
CVS CANADA INC.
|
||
|
Per:
|
||
|
Per:
|
||
|
|
||
|
Per:
|
||
|
Number
of Common Shares of the
Vendor
subject to this Agreement
|
||
EXHIBIT
1
SPECIAL
RESOLUTIONS
SALE OF
SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY
The
Company has entered into an Asset Purchase Agreement (the “Asset Purchase
Agreement”) dated December , 2008 amongst Bendix CVS Canada Inc., Bendix
Commercial Vehicle Systems LLC (as guarantor of Bendix CVS Canada Inc.),
SmarTire Technologies Inc. and SmarTire USA, Inc., whereby the Company has
agreed to sell substantially all of the assets of the Company, SmarTire
Technologies Inc. and SmarTire USA, Inc. to Bendix CVS Canada Inc. on the terms
and conditions as set out in the Asset Purchase Agreement.
Shareholder
approval is being sought to approve the following special
resolution:
“RESOLVED
AS A SPECIAL RESOLUTION THAT:
|
|
1.
|
In
accordance with Section 301(1) of the Business Corporations
Act (British Columbia) the sale of all or substantially all of the
undertaking of the Company by the Company, SmarTire Technologies Inc. and
SmarTire USA, Inc. to Bendix CVS Canada Inc. pursuant to the Asset
Purchase Agreement, as such agreement may be amended from time to time be
and is hereby ratified, confirmed and approved;
and
|
|
|
2.
|
Any
director or officer of the Company be and is hereby authorized, for and on
behalf of and in the name of the Company, to execute and deliver any
documents and instruments and take any such actions as such director or
officer may determine to be necessary or desirable to implement this
resolution and the matters authorized hereby, such determination to be
conclusively evidenced by the execution and delivery of any such documents
or instruments and the taking of any such
actions.
|
NAME
CHANGE
A
requirement of the Asset Purchase Agreement is that the company change the name
of the company from SmarTire Systems Inc. to or such other name as is
approved by the regulatory authorities having jurisdiction.
Shareholder
approval is being sought to approve the following special
resolution:
“RESOLVED
AS A SPECIAL RESOLUTION THAT:
|
1.
|
The
company change its name from SmarTire Systems Inc. to or such
other name as is approved by the regulatory authorities having
jurisdiction; and
|
|
2.
|
Any
director or officer of the Company be and is hereby authorized, for and on
behalf of and in the name of the Company, to execute and deliver any
documents and instruments and take any such actions as such director or
officer may determine to be necessary or desirable to implement this
resolution and the matters authorized hereby, such determination to be
conclusively evidenced by the execution and delivery of any such documents
or instruments and the taking of any such
actions.
|
