EXHIBIT 10.22
EXECUTION COPY
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement (the "Release") is entered into effective
as of this 31st day of August 2001 (the "Effective Date"), by and between
SmarTire Systems Inc. ("SmarTire"), a British Columbia, Canada corporation, and
TRW Inc. ("TRW"), an Ohio corporation.
W I T N E S S E T H:
WHEREAS, TRW and SmarTire entered into a license agreement (the "License
Agreement") dated as of April 20, 1998, as amended by an Assignment and
Amendment Agreement dated December 13, 2000 (the "Assignment Agreement"); and
WHEREAS, TRW and SmarTire entered into a technical cooperation agreement
dated as of April 20, 1998, as amended by the Assignment Agreement (the
"Technical Cooperation Agreement"); and
WHEREAS, TRW and SmarTire entered into a supply agreement dated April
20, 1998 (the "Supply Agreement"); and
WHEREAS, TRW and SmarTire entered into a Mutual Secrecy Agreement dated
January 6, 1998, as amended by a First Amendment of Mutual Secrecy Agreement
dated February 18, 1998 (collectively, the "Secrecy Agreement"); and
WHEREAS, TRW and SmarTire have agreed to terminate the License
Agreement, the Technical Cooperation Agreement, the Supply Agreement and the
Secrecy Agreement (together, the "April 1998 Agreements"); and
WHEREAS, TRW and SmarTire desire to settle any and all claims among
themselves arising out of, or in any way relating to, the April 1998 Agreements.
NOW, THEREFORE, in consideration of One United States Dollar (US$1.00)
and the mutual promises set forth in this Release, and intending to be legally
bound hereby, TRW and SmarTire agree as follows:
1. GENERAL RELEASES.
(a) Except as set forth in Section 2 below, TRW, for itself and its
officers, directors, shareholders, employees, partners, agents, assigns,
successors, heirs, subsidiary corporations and related or affiliated
corporations, partnerships, persons and entities (collectively,
"Representatives"), does hereby remise, release and forever discharge SmarTire
and SmarTire's Representatives from any and all Claims (as defined below) TRW
and its Representatives may or shall have against SmarTire and SmarTire's
Representatives arising out of, or in any way relating
to: (i) the April 1998 Agreements; and (ii) the activities, events and/or
transactions undertaken in connection with, or pursuant to, the April 1998
Agreements.
(b) Except as set forth in Section 2 below, SmarTire, for itself and its
Representatives, does hereby remise, release and forever discharge TRW and TRW's
Representatives from any and all Claims (as defined below) SmarTire and
SmarTire's Representatives may or shall have against TRW and TRW's
Representatives, including without limitation any and all Claims arising out of,
or in any way relating to: (i) the April 1998 Agreements; (ii) the activities,
events and/or transactions undertaken in connection with, or pursuant to, the
April 1998 Agreements; and (iii) the activities, actions or inactions of any TRW
employee serving on SmarTire's Board of Directors.
(c) SmarTire, for itself and its Representatives, does hereby remise,
release and forever discharge Xxxx Xxxxxxxxx to the maximum extent permitted
under the Company Act (British Columbia) and SmarTire's Articles of
Incorporation from any and all Claims (as defined below) SmarTire may or shall
have against Xxxx Xxxxxxxxx.
(d) For the purposes hereof, "Claims" shall mean any and all present and
future claims, actions, causes of action, suits, cross claims, counterclaims,
sums of money, judgments, liabilities, obligations, damages, debts, losses,
indemnities, costs, expenses, penalties, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, extents, executions, and demands of any kind and of any
nature whatsoever, whether direct, indirect, known or unknown, accrued,
inchoate, contingent, potential or otherwise in statutory or common law, or in
equity.
2. CLAIMS NOT RELEASED. Nothing in this Release constitutes, and no party
shall claim that this Release constitutes, a release, or otherwise impairs the
enforceability, of any or all of the following:
(a) The rights and obligations of the parties under the Termination
Agreement entered into by the parties on the date hereof, or the other documents
referenced therein, or any Claim for breach of or default under any of the
provisions of such documents; or
(b) TRW's rights as a shareholder of SmarTire; or
(c) Claims for breach of those provisions of the Secrecy Agreement that
survive termination thereof, but only for breaches of the surviving provisions
that occur after the date of this Release and that are not otherwise permitted
by the Termination Agreement or the documents referenced therein.
3. INDEMNIFICATION AND EXCULPATION OF TRW APPOINTED SMARTIRE DIRECTORS.
SmarTire covenants to maintain in effect for a period of at least six (6) years
after the Effective Date policies of directors' and officers' liability
insurance equivalent in all material respects to those maintained by or on
behalf of SmarTire on the date hereof (and having coverage and containing terms
and conditions which in the aggregate are not less advantageous to the persons
currently covered by such policies as insured) with respect to Claims arising
from any actual or alleged
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wrongful act or omission by any TRW employees who served as a SmarTire director
prior to the Effective Date. If at any time during the six (6) years after the
Effective Date SmarTire desires to change any of the material terms of its
directors' and officers' liability insurance or the carrier(s) of such
insurance, SmarTire will give to TRW and each TRW employee who served as a
SmarTire director advance written notice sufficient to permit them to protect
their interest in such policies of insurance, but not less than fourteen (14)
days notice. Notwithstanding any other provision hereof, the provisions of this
Section are (i) intended to be for the benefit of, and will be enforceable by,
TRW, each TRW employee who served as a director of SmarTire, their heirs and
representatives, and (ii) are in addition to, and not in substitution for, any
other rights to indemnification or contribution that any such person may have by
contract or otherwise. SmarTire represents and warrants that a true, correct and
complete copy of SmarTire's existing officers' and directors' liability
insurance policies have been, or will be within ten (10) days after the date on
which SmarTire receives copies of such policies from its insurers, provided to
TRW.
4. COVENANT NOT TO XXX. Each of SmarTire and TRW hereby covenants to and
agrees with the other that it will not commence or prosecute any action or suit
in law or in equity against the other involving any claim (including without
limitation any of the Claims) that now exists or may hereafter exist arising
from, or in any way relating to, any of the matters released by it in Section 1
of this Release. Upon the breach of this covenant by a party, the other party
hereto shall be entitled to recover from the breaching party, in addition to any
other damages or remedy, all liability and actual attorneys' fees and costs
incurred by the other party in the defense or settlement of such action or suit.
5. REPRESENTATIONS AND WARRANTIES.
(a) Each of SmarTire and TRW warrants and represents to the other that
no person or entity not bound legally by this Release has any right to assert
any of the Claims released by it in Section 1, above, by or through that party,
and that it has not assigned or otherwise transferred to any person or entity
not bound legally by this Release any of the Claims released by it in Section 1
or any interest in, or right to, any of such Claims. Each of SmarTire and TRW
hereby agrees to indemnify, defend and hold the other harmless from any and all
liability and expenses, including without limitation actual attorneys' fees,
arising from, or in any way relating to, any claim asserted by any person or
entity contending not to be bound legally by this Release and based upon such
person's or entity's claiming to have any right to assert any of such Claims.
(b) Each of the parties warrants and represents that no promises or
inducements have been offered except as herein stated, and this Release is
executed without reliance upon any statement or representation by the other
party concerning the nature or extent of any claims, damages or legal liability.
By execution of this Release, the parties hereto agree to be deemed joint
authors and drafters of this Release.
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6. GENERAL.
(a) It is understood and acknowledged that the payment and promises set
forth herein represent the full and complete compromise and settlement of the
Claims. Nothing contained in this Release shall be construed as an admission of
liability on the part of any person.
(b) Each party hereby acknowledges and agrees that this Release is
freely and voluntarily given without any duress or coercion and after it has
either consulted with legal counsel or been given the opportunity to do so, and
each party has carefully and completely read all of the terms and provisions of
this Release.
(c) This Release constitutes the entire understanding between the
parties hereto with respect to the settlement and release of claims by the
parties hereto, and, except to the extent contemplated by Section 1(c) above,
any other agreement made by the parties at any time prior to the date hereof
with respect to the foregoing shall not be of any force or effect. The
provisions herein are, and shall be, binding upon, and shall inure to the
benefit of, the respective heirs, executors, administrators, assigns and
successors of the parties.
(d) Each provision, covenant, obligation, warranty or representation
stated herein shall be deemed to be effective, operative, made, entered into and
taken in the manner and to the fullest extent permitted by law. If any provision
of this Release, or any covenant, obligation, warranty or representation
contained in this Release is determined by a court to be invalid or
unenforceable, that determination shall not affect any other provision,
covenant, obligation or representation, each of which shall be construed and
enforced as if the invalid or unenforceable portion were not contained herein.
(e) This Release may be amended, modified or supplemented only by a
written instrument signed by the parties hereto.
(f) This Release may be executed in counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same
instrument.
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(g) This Release is governed by, and shall be construed and enforced in
accordance with, the law of the State of Ohio.
IN WITNESS WHEREOF, the parties, by their respective, duly authorized
representatives, have executed this Release to be effective on the day and year
first above written.
SMARTIRE SYSTEMS INC.
By: /s/ XXXXXX X. XXXXXX
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Its: President & Chief Executive Officer
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("SmarTire")
TRW INC.
By: /s/ XXXXXX X. XXXXXXX
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Its: Vice President and General Manager
Safety & Security Systems
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("TRW")
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