1
EXHIBIT 10.1
EXECUTION COPY
[**] The items marked by two asterisks have been omitted from this filing and
have been filed separately with the Securities and Exchange Commission.
ASSIGNMENT AND AMENDMENT AGREEMENT
THIS AGREEMENT dated the 13th day of December, 2000 (the "Agreement Date")
BETWEEN:
TRW INC., a company duly incorporated pursuant to the laws of the State of
Ohio, acting on behalf of its Automotive Electronics Group, North America,
00000 Xxxxxxxx Xx., Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
("TRW")
OF THE FIRST PART
AND:
SMARTIRE SYSTEMS INC., a company duly incorporated pursuant to the laws of
the Province of British Columbia, having an office at 000-00000 Xxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
("SmarTire")
OF THE SECOND PART
WHEREAS:
A. TRW and SmarTire entered into a license agreement (the "License
Agreement") dated April 20, 1998 whereby SmarTire granted to TRW an exclusive
license (the "License") to use SmarTire intellectual property (as defined
therein) to manufacture and sell tire pressure monitoring systems for passenger
cars and light, medium and heavy trucks;
B. TRW and SmarTire entered into a technical cooperation agreement (the
"Technical Cooperation Agreement") dated April 20, 1998, whereby the parties
agreed to cooperate in further technical developments.
C. TRW and SmarTire entered into an ASIS development/purchase agreement (the
"ASIS Agreement") dated September 1, 1998 with SensoNor asa ("SensoNor")
whereby SensoNor agreed to develop application specific integrated sensors for
sale to TRW and SmarTire upon the terms and conditions set forth therein;
D. TRW has not, as of the effective date of this Agreement, obtained any
orders for tire pressure monitoring systems in respect of its license rights in
and to the Medium and Heavy Duty Truck (as hereafter defined) market (the
"Medium and Heavy Duty Truck Market License"); and
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E. SmarTire wishes to purchase and obtain from TRW, and TRW wishes to
transfer, assign and sell to SmarTire, its rights to the Medium and Heavy Duty
Truck Market License under the terms and conditions set forth herein.
THEREFORE, in consideration of the premises, the parties covenant and agree as
follows:
1. ASSIGNMENT OF LICENSE
1.1 Upon and subject to the terms and conditions herein, TRW hereby
transfers, assigns and sells to SmarTire all of its right, title and interest
in and to the Medium and Heavy Duty Truck Market License.
1.2 The License Agreement is amended as follows:
(a) The existing Section 1.6 is renumbered to be section number 1.9;
(b) The following are added as new Section 1.6, 1.7, and 1.8:
" 1.6 Medium and Heavy Duty Trucks: Land based motor
vehicles, whether on or off road, commercial, agricultural, or
otherwise, having a gross vehicle weight rating ("GVWR") in the
United States and Canada of greater than 14,400 pounds and outside
the United States and Canada of greater than 3.5 metric tonnes;
provided that passenger vehicles designed to carry up to 8
passengers shall not be included unless their weight exceeds 14,400
pounds.
1.7 Non-Overlapping OE Customers: Those original equipment
manufacturers that have a purchasing organisation for tire
monitoring systems for Medium and Heavy Duty Trucks that is
separate and apart from the purchasing organisation that purchases
tire monitoring systems for passenger vehicles and light trucks."
1.8 High Pressure TMS: An application of tire pressure
monitoring to a tire that is rated by its manufacturer for normal
use at an inflation of 80 pounds per square inch or greater.
(c) Article 2 is deleted and replaced in its entirety with the
following:
" 2.1 Grant By SmarTire: Subject only to the reservation of
rights set forth in Section 2.2 hereof, SmarTire hereby grants to
TRW the exclusive, world wide right to make, have made, use, and
sell, Licensed Products for use as original equipment in passenger
car and truck markets, and for use as service parts for such
original equipment.
2.2 Reservation of Rights: SmarTire excludes from the
license of Section 2.1 and reserves to itself all rights to make,
have made, and use Licensed Products for sale:
(a) in the aftermarket, and
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(b) for use as original equipment and as service parts for
such original equipment in Medium and Heavy Duty Trucks where
either (i) the customer is a Non-Overlapping OE Customer, or (ii)
the application is for High Pressure TMS.
2.3 Overlap: The parties recognise that there could be some
minor overlap between the market identified in the exclusive license
of Section 2.1 and the market retained by SmarTire. For avoidance of
doubt, it will not be considered to be a violation of the exclusive
license of Section 2.1 if some products sold by SmarTire in its
retained market are used by customers as service replacements for
vehicles in TRW's market, or if some products sold by TRW in its
markets are used by customers as service replacement for vehicles in
SmarTire's market.
2.4 Logical Re-Allocation: The parties recognise that it may be
logically desirable (because of customer procurement requirements,
grouping of vehicles within families, territorial issues,
inappropriate classification of specific vehicles under the Agreement
definitions, need for a Licensed Product containing a pressure sensor
or other component unique to one party, etc.) for one party to assume
responsibility for a vehicle falling within the license rights of the
other party. The parties will determine which such vehicles
responsibilities should be transferred from one party to the other on
an ad hoc basis, provided, however, that neither party will be
required to agree to any such vehicle responsibility transfer.
2.5 Sublicenses: TRW may grant sublicenses to its Affiliates
under the rights granted herein without the consent of SmarTire, but
may grant sublicenses to others under the rights granted herein only
upon the prior written consent of SmarTire, which will not be
unreasonably withheld. TRW will report sales, and pay royalties on
sales, of sublicensees hereunder under the same terms and conditions
upon which TRW reports and pays royalties on its own sales hereunder.
2.6 Determination of GVWR: If the GVWR of a particular vehicle
has not been established by the vehicle manufacturer at the time that
the parties must decide who has responsibility therefor, and the
vehicle manufacturer is unwilling to provide an estimate of such GVWR,
then the parties will themselves estimate the GVWR of the vehicle by
reference to the GVWR of the most similar existing vehicle or
vehicles.
1.3 The Technical Cooperation Agreement is amended as follows:
(a) The existing Section 1.9 is renumbered to be section 1.12.
(b) Sections 1.7 and 1.8, are deleted and replaced with the following:
"1.7 SmarTire Markets: Aftermarket sales of products and components
for all vehicles, and the market for sale of original equipment
products and components for Medium and Heavy Duty Trucks (a) to
Non-Overlapping OE Customers or
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(b) to Overlapping OE Customers for tire pressure monitoring applications
with tires that are rated by their manufacturer for normal use at an
inflation of 80 pounds per square inch or greater."
"1.8 TRW Markets: The market for original equipment products and
components for passenger car and light trucks, and for service parts
for such products and components, and the entire market for original
equipment products and components for Overlapping OE Customers except
for tire pressure monitoring applications with tires that are rated by
their manufacturer for normal use at an inflation of 80 pounds per
square inch or greater."
(c) The following are added as new Sections 1.9, 1.10, and 1.11:
"1.9 Medium and Heavy Duty Trucks: Motor vehicles, whether on or off
road, commercial, agricultural, or otherwise, having a gross vehicle
weight rating ("GVWR") in the United States and Canada of greater than
14,400 pounds and outside the United States and Canada of greater than
3.5 metric tonnes; provided that passenger vehicles designed to carry
up to 8 passengers shall not be included unless their weight exceeds
14,400 pounds.
1.10 Non-Overlapping OE Customers: Those original equipment
manufacturers that have a purchasing organization for tire monitoring
systems for Medium and Heavy Duty Trucks that is separate and apart
from the purchasing organization that purchases tire monitoring
systems for passenger vehicles and light trucks.
1.11 Overlapping OE Customers: Original equipment manufacturers other
than Non-Overlapping OE Customers."
2. PURCHASE PRICE
2.1 Within 5 business days of execution of this Agreement, SmarTire will
allot and issue to TRW as fully paid and non-assessable 450,000 common shares
(the "Shares") in the capital of SmarTire.
2.2 TRW and SmarTire have been negotiating with SensoNor asa, the
manufacturer of the pressure sensor device. Although a definitive agreement has
not yet been signed with SensoNor, as of the signature date of this Agreement
it appears likely that the parties will pay ** to SensoNor for completed design
work, thereby to allow SensoNor to recalculate piece pricing to a more
commercially acceptable level, and another ** to SensoNor in consideration for
certain design changes.
(a) TRW and SmarTire have agreed that, as part of the consideration of
SmarTire to TRW under this Agreement, SmarTire will pay ** to SensoNor for the
equal and mutual benefit of both parties. It is expected by the parties that **
of such amount will be for completed design work and ** will be for design
changes.**
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(b) Upon the signature date of this Agreement, SmarTire will transfer
**, (the "trust amount") to the law firm of Xxxxx Xxxxxx, to be held
by Xxxxx Xxxxxx in trust for the parties until a definitive agreement
with SensoNor (the "SensoNor Agreement") is executed. Upon execution
of the SensoNor Agreement, Xxxxx Xxxxxx will pay the trust amount to
SensoNor in accordance with the terms of the SensoNor Agreement, it
being understood by the parties that the entire trust amount are
intended to be paid out to SensoNor before any fees are directly paid
to SensoNor by SmarTire or TRW. The parties will **.
(c) The parties consider it very unlikely that they will fail to execute
a definitive agreement with SensoNor within four months of the
effective date of this Agreement, or that the agreement with SensoNor
will require a payment from the parties of less than the entire trust
amount. However, in either such event, regardless of the cause of
such event, Xxxxx Xxxxxx will immediately and without condition
deliver the remaining trust amount (the "Refund") to SmarTire.
SmarTire will then issue to TRW a number of SmarTire common shares
(the "Additional Shares") equal to the Refund divided by the average
daily closing price of the SmarTire shares for the 30 days prior to
the Refund being delivered to SmarTire, in full payment of SmarTire's
obligations under this Agreement.
(d) Any acknowledgement or representation of TRW as to the Shares herein
will apply equally as to the Additional Shares.
3. AMENDMENT TO ASIS AGREEMENT
3.1 TRW will, immediately upon execution of this Agreement, use its best
efforts to negotiate with SensoNor an amendment to the ASIS Agreement, or a
replacement for the ASIS Agreement, acceptable both to TRW and to SmarTire
whereby (a) the parties agree to pay SensoNor for completed design work,
thereby to allow SensoNor to recalculate the price of Products (as defined in
the ASIS Agreement) to a more commercially acceptable level satisfactory to TRW
and SmarTire, and (b) SensoNor agrees to make certain design changes at a price
acceptable to TRW and SmarTire. SmarTire will provide all reasonable
co-operation in such negotiations.
4. DELIVERY OF SHARES
4.1 SmarTire will deliver new share certificates representing the initial
Shares referred to in Section 2.1, issued in the name of TRW, to TRW immediately
upon issuance. The Shares will be delivered via registered mail addressed to
TRW Inc., 0000 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000, attention Xxxxx X. Xxxxxx,
Esq.
5. LEGENDING OF SUBJECT SHARES
5.1 TRW hereby acknowledges that that upon the issuance thereof, and
until such time as the same is no longer required under the applicable
securities laws and regulations, the certificates representing any of the
Shares will bear a legend in substantially the following form:
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"NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY
U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS."
6. RESALE RESTRICTIONS
6.1 TRW acknowledges that any resale of the Shares will be subject to
resale restrictions contained in applicable legislation. TRW acknowledges that
the Shares have not been registered under the 1933 Act of the securities laws
of any state or the United States and that SmarTire does not intend to register
same under the 1933 Act, or the securities laws of any such state and has no
obligation to do so. The Shares may not be offered or sold in the United States
unless registered in accordance with federal securities laws and all applicable
state securities laws or exemptions from such registration requirements are
available.
6.2 TRW further acknowledges that:
(a) the Shares will be subject to a hold period under the Securities Act
(British Columbia) and may not be traded in British Columbia until one
year and day following the date of delivery of the Shares, except as
permitted by the Securities Act (British Columbia); and
(b) in lieu of SmarTire placing a legend on the certificates representing
the Shares pursuant to section 132(2) of the Rules under the B.C. Act,
TRW must file a report with the British Columbia Securities Commission
in the form attached as Schedule"A" within 10 days of the initial
trade of any Shares.
7. ACKNOWLEDGEMENTS OF TRW REGARDING THE SHARES
7.1 TRW acknowledges and agrees that:
(a) the Shares will be issued under the exemption from the prospectus
requirements of the Securities Act (British Columbia) (the "B.C. Act")
and will therefore be subject to resale restrictions under the B.C.
Act;
(b) TRW will be acquiring the Shares pursuant to an exemption from the
prospectus requirements under the B.C. Act on the basis that TRW is
sophisticated and, as a consequence, TRW:
(i) is restricted from using most of the civil remedies available
under securities legislation;
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(ii) may not receive information that would otherwise be required to
be provided to TRW under securities legislation; and
(iii) SmarTire is relieved from certain obligations that would
otherwise apply under securities legislation;
(c) the Shares have not been registered under the United States Securities
Act of 1933 (the "1933 Act"), or under any state securities or "blue
sky" laws of any state of the United States, and, unless so
registered, may not be offered or sold in the United States or to U.S.
persons ("U.S. Person") (as that term is defined in Regulation S under
the 1933 Act, which definition includes any person in the United
States) except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the 1933 Act;
(d) the decision to acquire the Shares pursuant to this Agreement has not
been based upon any oral or written representation as to fact or
otherwise made by or on behalf of SmarTire and such decision is based
entirely upon a review of any public information which has been filed
by SmarTire with the British Columbia Securities Commission and the
United States Securities and Exchange Commission in compliance, or
intended compliance, with applicable securities legislation;
(e) TRW and TRW's advisor(s) have had a reasonable opportunity to ask
questions of and receive answers from SmarTire; and
(f) TRW has been advised to consult its own legal, tax and other advisors
with respect to the merits and risks of an investment in the Shares
and with respect to applicable resale restrictions and it is solely
responsible (and SmarTire is not in any way responsible) for
compliance with applicable resale restrictions.
8. REPRESENTATIONS AND WARRANTIES OF SMARTIRE
8.1 SmarTire represents and warrants to TRW that, as of the date of this
Agreement and at the date of issuance of the initial Shares referred to in
Section 2.1:
(a) SmarTire is a valid and subsisting corporation duly incorporated and
in good standing under the laws of British Columbia;
(b) SmarTire is duly registered and licensed to carry on business in the
jurisdictions in which it carries on business;
(c) SmarTire has complied, or will comply, with all applicable corporate
and securities laws and regulations in connection with the offer, sale
and issuance of the Shares;
(d) the issuance and sale of the Shares by SmarTire does not and will not
conflict with and does not and will not result in a breach of any of
the terms, conditions or
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provisions of its constating documents or any agreement or instrument
to which SmarTire is a party;
(e) this Agreement has been duly authorized by all necessary corporate
action on the part of SmarTire and, subject to acceptance by SmarTire,
constitutes a valid obligation of SmarTire legally binding upon it and
enforceable in accordance with its terms;
(f) the Annual Report on Form 10-KSB filed by the SmarTire with respect to
the fiscal year ended July 31, 2000 and all reports subsequently filed
by the SmarTire with the U.S. Securities Exchange Commission pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, when
filed, did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading, and, since
October 31, 2000, there has been no material adverse change in the
financial position or affairs of the SmarTire; and
(g) total warrants, convertible debt and options outstanding would result
in fully diluted share capital of 15,965,139 common shares of which
14,506,297 were outstanding as of October 1, 2000.
8.2 SmarTire will promptly notify TRW of any material change in any
representation or warranty of SmarTire set out herein that occurs prior to the
initial Shares being issued and delivered hereunder.
9. REPRESENTATIONS AND WARRANTIES OF TRW
9.1 TRW represents and warrants to SmarTire that, as of the date of this
Agreement and at the date upon which the initial Shares referred to in Section
2.1 are to be issued hereunder:
(a) TRW has not assigned, transferred, sub-licensed or sold the Medium and
Heavy Duty Truck Market License to another party and TRW has absolute
authority to assign the Medium and Heavy Duty Truck Market License to
SmarTire;
(b) TRW is resident in the United States;
(c) TRW has such knowledge and experience in business matters as to be
capable of evaluating the merits and risks of its prospective
investment in the Shares; and it has the ability to bear the economic
risks of its prospective investment and can afford the complete loss
of such investment;
(d) TRW is not aware of any advertisement of any of the Shares;
(e) no person has made to TRW any written or oral representations:
(i) that any person will resell or repurchase any of the Shares;
(ii) that any person will refund the purchase price of any of the
Shares;
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(iii) as to the future price or value of any of the Shares; or
(iv) that any of the Shares will be listed and posted for trading on
any stock exchange or automated dealer quotation system or that
application has been made to list and post any of the Shares of
SmarTire on any stock exchange or automated dealer quotation
system; and
(f) TRW is acquiring the Shares as principal for its own account, for
investment purposes only, and not with a view to, or for, resale,
distribution or fractionalisation thereof, in whole or in part.
9.2 SmarTire is entitled to rely on the representations and warranties of TRW
contained in this Agreement and in the U.S. Securities Law Questionnaire (the
"Questionnaire") to be completed by TRW prior to closing in the form attached
as Schedule "B" hereto, which forms a part of this Agreement.
10. GENERAL
10.1 All references to dollar amounts are in United States currency.
10.2 All taxes, including but not limited to income taxes, duties, fees, and
dues, including interest and penalties, and all other charges, whether or not in
effect at the date first written above, which arise out of or by virtue of this
Agreement or the operation of the parties will be borne by, and be the
responsibility of, the party on whom legally levied. In addition, withholding
taxes, if any, will be considered levied on the recipient of any payment from
the other party, but will be remitted to the applicable governmental authority
by the payor and deducted from the amount otherwise payable to the recipient of
such payment. The payor will notify the recipient of any such withholding taxes,
if applicable, and will promptly furnish to the recipient a receipt evidencing
each such withholding tax payment in a form sufficient to enable the recipient
to obtain any tax credit to which it may be entitled under the laws of the
country of its incorporation.
10.3 No waiver of any right or remedy in respect of any occurrence or event on
one occasion will be deemed a waiver of such right or remedy in respect of such
occurrence or event on any subsequent occasion.
10.4 This Agreement will enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
10.5 This Agreement will be governed by and construed in accordance with the
laws of British Columbia and Canada.
10.6 This Agreement may be executed in several counterparts, each of which
will be deemed to be an original and all of which will together constitute one
and the same instrument.
10.7 Except as expressly amended by this Agreement, the License Agreement and
the Technical Cooperation Agreement are hereby ratified and confirmed.
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IN WITNESS WHEREOF the parties have executed this Agreement as of the date first
above written.
TRW INC.
Per: /s/ XXXXXXX X. XXXXXXX
---------------------------
Authorized Signatory
Xxxxxxx X. Xxxxxxx
Title: Assistant General Counsel & Assistant Secretary
-------------------------
SMARTIRE SYSTEMS INC.
Per: /s/ XXXXXX XXXXXX
---------------------------
Authorized Signatory
Title: President & CEO
-------------------------
Schedule A: Securities Act Initial Trade Report
Schedule B: U.S. Securities Law Questionnaire
TA-4326
13 December 2000
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SCHEDULE "A"
SECURITIES ACT
INITIAL TRADE REPORT
1. Name and address of reseller
--------------------------------------------------------------------------
--------------------------------------------------------------------------
2. Name and address of the issuer whose securities were traded by the seller
--------------------------------------------------------------------------
--------------------------------------------------------------------------
3. Name and address of the party from whom the seller acquired the securities
--------------------------------------------------------------------------
--------------------------------------------------------------------------
4. Description of securities sold
(a) Number and description of securities ---------------------
(b) Date of acquisition of securities by the seller ---------------------
(c) Exemption under which securities were acquired
by the seller ---------------------
(d) Exemption under which securities were traded by
the seller ---------------------
(e) Date of sale of securities ---------------------
(f) Sale Price ---------------------
5. Certificate of seller
The undersigned seller hereby certifies that the information given in this
report relating to the seller is true and that, to the best of the
seller's information and belief,
(a) the information given in this report relating to any other party is
true,
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(b) no unusual effort has been made to prepare the market or create a
demand for the securities, and
(c) no extraordinary commission or other consideration has been paid in
respect of the trade to which this report relates.
DATED at __________________ this ________ day of _________________, 2000
--------------------------------------------
Signature of the seller or, if the seller is
a company, signature of authorized signatory
--------------------------------------------
Name of the seller or, if the seller is a
company, name and office of authorized
signatory
INSTRUCTIONS;
1. If the space provided for any answer is insufficient, additional sheets may
be used. Each sheet must be cross-referenced to the relevant item, properly
identified and signed by the person whose signature appears on the report.
2. File this report with the required fee and completed Fee Checklist. In
order to determine the fee payable, consult section 22 of the Securities
Regulation, B.C. Reg. 478/95. Cheques should be made payable to the
"British Columbia Securities Commission".
IT IS AN OFFENCE FOR A PERSON TO MAKE A STATEMENT IN A DOCUMENT REQUIRED TO BE
FILED OR FURNISHED UNDER THE SECURITIES ACT THAT, AT THE TIME AND IN LIGHT OF
CIRCUMSTANCES UNDER WHICH IT IS MADE, IS A MISREPRESENTATION.
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SCHEDULE "B"
U.S. SECURITIES LAW QUESTIONNAIRE
All capitalized terms herein, unless otherwise defined, have the meanings
ascribed thereto in the Agreement. As used in this questionnaire, the term
"Securities" means "Shares" and "Additional Shares", as those terms are defined
in the Assignment and Amendment Agreement.
TRW covenants, represents and warrants to SmarTire that:
(a) TRW is a U.S. Person;
(b) TRW has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the
transactions detailed in the Agreement and TRW is able to bear the
economic risk of loss arising from such transactions;
(c) TRW is acquiring the Securities for investment only and not with a
view to resale or distribution and, in particular, TRW has no
intention to distribute either directly or indirectly any of the
Securities in the United States or to U.S. Persons; provided, however,
that TRW may sell or otherwise dispose of any of the Securities
pursuant to registration thereof pursuant to the Securities Act of
1933 (the "1933 Act") and any applicable State securities laws or
pursuant to an exemption from such registration requirements or if
registration is otherwise not required under the 1933 Act;
(d) TRW acknowledges that, except as otherwise provided for in the
Agreement, SmarTire has not undertaken, and will have no obligation,
to register any of the Securities under the 1933 Act;
(e) TRW understands that any of the Securities have not been registered
under the 1933 Act and that the issuance contemplated hereby is being
made in reliance on an exemption from such registration requirements;
(f) TRW satisfies one or more of the categories indicated below (please
check the appropriate box):
[ ] Category 1 An organization described in Section 501(c)(3) of
the United States Internal Revenue Code, a
corporation, a Massachusetts or similar business
trust or partnership, not formed for the specific
purpose of acquiring the Securities, with total
assets in excess of US $5,000,000;
[ ] Category 2 A natural person whose individual net worth, or
joint net worth with that person's spouse, on the
date of purchase exceeds US $1,000,000;
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[ ] Category 3 A natural person who had an individual income in excess of US
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of US $300,000 in each of
those years and has a reasonable expectation of reaching the
same income level in the current year;
[ ] Category 4 A "bank" as defined under Section (3)(a)(2) of the 1933 Act or
savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the 1933 Act acting in its individual
or fiduciary capacity; a broker dealer registered pursuant to
Section 15 of the Securities Exchange Act of 0000 (Xxxxxx
Xxxxxx); an insurance company as defined in Section 2(13) of
the 1933 Act; an investment company registered under the
Investment Company Act of 1940 (United States) or a business
development company as defined in Section 2(a)(48) of such
Act; a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 0000 (Xxxxxx Xxxxxx); a
plan with total assets in excess of $5,000,000 established and
maintained by a state, a political subdivision thereof, or an
agency or instrumentality of a state or a political
subdivision thereof, for the benefit of its employees; an
employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974 (United States) whose
investment decisions are made by a plan fiduciary, as defined
in Section 3(21) of such Act, which is either a bank, savings
and loan association, insurance company or registered
investment adviser, or if the employee benefit plan has total
assets in excess of $5,000,000, or, if a self-directed plan,
whose investment decisions are made solely by persons that are
accredited investors;
[ ] Category 5 A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 0000 (Xxxxxx
Xxxxxx);
[ ] Category 6 A director or executive officer of the company;
[ ] Category 7 A trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Securities, whose
purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) under the 1933 Act; or
[ ] Category 8 An entity in which all of the equity owners satisfy the
requirements of one or more of the foregoing categories;
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(g) TRW acknowledges that it is not acquiring the Securities as a result of
any form of general solicitation or general advertising including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio, or
television, or any seminar or meeting whose attendees have been invited by
general solicitation or general advertising;
(h) TRW agrees that if TRW decides to offer, sell or otherwise transfer any of
the Securities, TRW will not offer, sell or otherwise transfer any of such
securities directly or indirectly, unless:
(i) the sale is to SmarTire;
(ii) the sale is made outside the United States in a transaction
meeting the requirements of Rule 904 of Regulation S under the 1933
Act and in compliance with applicable local laws and regulations;
(iii) the sale is made pursuant to the exemption from the registration
requirements under the 1933 Act provided by Rule 144 thereunder if
available and in accordance with any applicable state securities or
"Blue Sky" laws; or
(iv) the Securities are sold in a transaction that does not require
registration under the 1933 Act or any applicable U.S. state laws
and regulations governing the offer and sale of securities, and it
has prior to such sale furnished to SmarTire an opinion of counsel
reasonably satisfactory to SmarTire;
(i) TRW understands and agrees that the Securities may not be transferred in
the United States or by or on behalf of a U.S. Person unless registered
under the 1933 Act and any applicable state securities laws unless an
exemption from such registration requirements is available;
(j) TRW acknowledges that TRW has not acquired the Securities as a result of,
and will not itself engage in, any "directed selling efforts" (as defined
in Regulation S under the 0000 Xxx) in the United States in respect of the
Securities which would include any activities undertaken for the purpose
of, or that could reasonable be expected to have the effect of,
conditioning the market in the United States for the resale of any of the
Securities; provided, however, that TRW may sell or otherwise dispose of
any of the Securities pursuant to registration of any of the securities
pursuant to the 1933 Act and any applicable state securities laws or under
an exemption from such registration requirements and as otherwise provided
herein; and
(k) TRW understands and acknowledges that upon the issuance thereof, and until
such time as the same is no longer required under the applicable
requirements of the 1933 Act or applicable U.S. State laws and regulations,
the certificates representing any of the Securities will bear a legend in
substantially the following form:
- Page B.3 -
16
EXECUTION COPY
"THESE SECURITIES HAVE NOT 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."
(l) TRW consents to SmarTire making a notation on its records or giving
instruction to the registrar and transfer agent of SmarTire in order
to implement the restrictions on transfer set forth and described
herein; and
(m) the office of TRW at which TRW received and accepted the offer to
acquire the Securities is the address listed on TRW's execution page
of the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as
of the _____ day of _____________, 2000.
TRW Inc.:
Per:
TRW Inc.
---------------------------------- ----------------------------------
Authorized Signatory Print Name
Corporation
---------------------------------- ----------------------------------
Type of Entity Social Security/Tax I.D. No.
-Page B.4-
