Exhibit 10.2

 

VOTING AGREEMENT

 

This Voting Agreement (this “Agreement”) is dated as of July 20, 2018, by and
between ClearSign Combustion Corporation, a Washington corporation (the
“Company”) and CLIRSPV, LLC, a Delaware limited liability Company (“Investor”).

 

RECITALS

 

A.       The Stock Purchase Agreement, dated as of July 12, 2018, by and between
the Company and the Investor (the “Purchase Agreement”), provides for the
issuance and sale by the Company to the Investor, and the purchase by the
Investor, of shares (collectively, the “Purchased Shares”) of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”); and

 

B.       As a condition to consummating the transactions contemplated by the
Purchase Agreement, the Investor and the Company have agreed upon certain rights
and obligations as set forth herein, and it is a condition to the closing under
the Purchase Agreement that this Agreement be executed and delivered by the
Investor and the Company.

 

AGREEMENT

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor agree
as follows:

 

SECTION 1.

DEFINITIONS

 

As used in this Agreement, the following terms shall have the following
meanings:

 

 

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by, or under common Control with such Person;
provided, however, that the Company, any of its subsidiaries or any of the
Company’s other Controlled Affiliates, in each case, will not be deemed
Affiliates of the Investor for purposes of this Agreement.

 

“Agreement” shall have the meaning set forth in the Preamble to this Agreement.

 

“beneficial owner,” “beneficially owns,” “beneficial ownership” and terms of
similar import used in this Agreement shall, with respect to a Person, have the
meaning set forth in Rule 13d-3 under the Exchange Act (a) assuming the full
conversion into, and exercise and exchange for, shares of Common Stock of all
Common Stock Equivalents beneficially owned by such Person and (b) determined
without regard for the number of days in which such Person has the right to
acquire such beneficial ownership.

 

“Board of Directors” shall mean the Board of Directors of the Company.

  

“Change in Control” shall mean, with respect to the Company, any of the
following events: (a) any Person or Group is or becomes the beneficial owner,
directly or indirectly, of a majority of the total voting power represented by
all Shares of Then Outstanding Common Stock; (b) the Company consolidates with
or merges into another corporation or entity, or any corporation or entity
consolidates with or merges into the Company, other than (i) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof) a majority of the
combined voting power of the voting securities of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
becomes the beneficial owner, directly or indirectly, of a majority of the total
voting power of all Shares of Then Outstanding Common Stock; (c) the Company
conveys, transfers or leases all or substantially all of its assets to any
Person other than a wholly owned Affiliate of the Company or (d) individuals who
constitute Continuing Directors cease for any reason to constitute at least a
majority of the Board of Directors.

 

 

 

 

“Closing Date” shall have the meaning set forth in the Purchase Agreement.

 

“Common Stock” shall have the meaning set forth in the Preamble to this
Agreement.

 

“Common Stock Equivalents” shall mean any options, warrants or other securities
or rights convertible into or exercisable or exchangeable for, whether directly
or following conversion into or exercise or exchange for other options, warrants
or other securities or rights, shares of Common Stock.

 

“Company” shall have the meaning set forth in the Preamble to this Agreement.

  

“Continuing Directors” shall mean the directors of the Company on the date
hereof, and each other director, if in each case, such other director’s
nomination for election to the Board of Directors was recommended by, or whose
appointment to the Board of Directors was approved by, at least a majority of
the other Continuing Directors.

 

“Control” (including the correlative terms “Controlled by,” “Controlling,” and
“under common Control with”), as applied to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership or voting of securities, by contract or otherwise.

 

“Controlled Affiliate” shall mean, with respect to a Person, an Affiliate of
such Person Controlled by such Person.

   

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

 

“Governmental Authority” shall mean any court, agency, authority, department,
regulatory body or other instrumentality of any government or country or of any
national, federal, state, provincial, regional, county, city or other political
subdivision of any such government or country or any supranational organization
of which any such country is a member.

 

“Group” shall mean two or more Persons acting as a partnership, limited
partnership, syndicate or other group within the meaning of Section 13(d) of the
Exchange Act.

 

“Initial Designee” shall have the meaning set forth in Section 2.

 

“Investor” shall have the meaning set forth in the Preamble to this Agreement.

 

“Investor Designee” shall have the meaning set forth in Section 2.

 

“Law” or “Laws” shall mean all laws, statutes, rules, regulations, orders,
judgments, injunctions and/or ordinances of any Governmental Authority.

 

“Modified Clause” shall have the meaning set forth in Section 5.8.

  

“Non-Controlled Affiliate” shall mean, with respect to a Person, an Affiliate of
such Person that is not a Controlled Affiliate of such Person.

   

“Person” shall mean any individual, partnership, firm, corporation, association,
trust, unincorporated organization, government or any department or agency
thereof or other entity.

 

 

 

 

“Purchase Agreement” shall have the meaning set forth in the Preamble to this
Agreement, and shall include all appendices, exhibits and schedules attached
thereto.

 

“Purchased Shares” shall have the meaning set forth in the Preamble to this
Agreement, and shall be adjusted for (a) any stock split, stock dividend, share
exchange, merger, consolidation or similar recapitalization and (b) any Common
Stock issued as (or issuable upon the exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with respect to, or
in exchange or in replacement of, the Purchased Shares.

 

“Qualified Investor Designee” shall have the meaning set forth in Section 2.

  

“Registration Rights Agreement” shall mean the Registration Rights Agreement by
and between the Company and the Investor of even date herewith.

 

“Replacement Designee” shall have the meaning set forth in Section 2.

 

“SEC” shall mean the United States Securities and Exchange Commission.

 

“Shares of Then Outstanding Common Stock” shall mean, at any time, the issued
and outstanding shares of Common Stock at such time.

 

“Third Party” shall mean any Person other than the Investor, the Company or any
of their respective Affiliates.

 

SECTION 2.

ADDITIONAL AGREEMENTS

 

Board Nomination Right.  For so long as the Investor beneficially owns at least
three million (3,000,000) shares of Common Stock (as adjusted for any stock
split, stock dividend or any subdivision of the Common Stock, or any other
reclassification or other similar recapitalization after the date hereof), or
such lesser number of shares of Common Stock which then constitute at least 10%
of the Shares of Then Outstanding Common Stock, at each annual meeting of the
stockholders of the Company or at any meeting of the stockholders of the Company
at which members of the Board of Directors are to be elected, or whenever such
action is to be taken by written consent for such purposes, the Company agrees
to nominate for election one individual designated by the Investor (an “Investor
Designee”) who shall be reasonably acceptable to the nominating and corporate
governance committee of the Board of Directors (an Investor Designee who
satisfied such requirements, a “Qualified Investor Designee”).  The Investor’s
initial designee under this Agreement shall be Robert T. Hoffman Sr. (the
“Initial Designee”), whom the Company agrees is a Qualified Investor Designee. 
On or prior to the Closing Date, the Company shall take all actions necessary
(including, if necessary, by approving an enlargement of its Board of Directors
to create a vacancy thereon) to cause the appointment to the Board of Directors
of the Initial Designee effective as of the Closing Date, and thereafter, for so
long as the Investor’s board nomination right under this Section 2 continues,
the Company will use its commercially reasonable efforts to cause the election
and reelection of such individual to the Board of Directors for so long as he or
she is a Qualified Investor Designee (including recommending that the Company’s
stockholders vote in favor of the election of such an individual and otherwise
supporting him for election in a manner no less rigorous and favorable than the
manner in which the Company supports its other nominees), provided that if the
Investor determines to designate a different individual (“Replacement Designee”)
as its Investor Designee, and such Replacement Designee is a Qualified Investor
Designee, such obligation shall instead apply to the Replacement Designee.  If
any Investor Designee vacates the Board of Directors, the Company shall take all
actions necessary to cause the appointment to the Board of Directors of a
Qualified Investor Designee nominated by the Investor to fill the vacancy and
thereafter the Company will use its commercially reasonable efforts to cause the
election of such an individual to the Board of Directors, subject to the same
conditions and limitations as set forth in the foregoing sentence.  For
avoidance of doubt, the Investor shall be limited to only one designee serving
on the Board at any time pursuant to this Section 2.  Such designee shall be
entitled to the same level of directors’ and officers’ indemnity insurance
coverage and indemnity and exculpation protection (including under any
indemnification agreement) as the other members of the Board of Directors.  For
so long as an Investor Designee serves on the Board of Directors, the Company
shall maintain in place directors’ and officers’ indemnity insurance coverage in
an amount deemed appropriate by the Board of Directors.  Any Investor Designee
shall be subject to the same Company policies and procedures as the other
directors on the Board of Directors, including with respect to conflicts of
interest and recusal from deliberations and voting.

 

 

 

 

SECTION 3.

TERMINATION OR SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS

 

Except as otherwise provided in this Agreement, this Agreement shall terminate
in its entirety upon the earlier to occur of (a) the mutual written agreement of
the parties; (b) the occurrence of a Change in Control; and (c) a decline,
whether as a result of the Company’s issuance of additional shares of Common
Stock or as a result of the Investor’s sale of shares of the Company’s Common
Stock, in the Investor’s ownership of the Company’s Common Stock to less than
10% of Shares of Then Outstanding Common Stock.  Notwithstanding the foregoing,
the rights and obligations provided in Section 4, and Section 5 shall survive
termination of this Agreement.

 

SECTION 4.

NOTICES

 

All notices, requests, consents and other communications hereunder shall be in
writing, shall be sent by confirmed facsimile or electronic mail, or mailed by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, and shall be deemed given when so sent in the
case of facsimile or electronic mail transmission, or when so received in the
case of mail or courier, and addressed as follows:

 

  if to the Company, to: ClearSign Combustion Corporation

12870 Interurban Avenue South

Seattle, WA 98168

Attention: Chief Executive Officer

E-Mail: Steve.Pirnat@clearsign.com

Facsimile: 206.673.4848

 

  with a copy (which shall not constitute notice) to: Mitchell Silberberg &
Knupp LLP

12 East 49th Street, 30th Floor

New York, NY 10017

Attn.: Melanie Figueroa, Esq.

E-Mail: mxf@msk.com

Facsimile: 212.509.7239

 

  if to the Investor, to: GPclirSPV LLC

119 Warren Ave

3rd Floor

Spring Lake, NJ 07762

Attention: Robert T. Hoffman Sr.

E-Mail: rhoffman@princetonopp.com

 

  with copies (which shall not constitute notice) to: Bressler, Amery & Ross

325 Columbia Turnpike

Florham Park, NJ 07932

Attention: Kim Larsen

E-Mail: Klarsen@bressler.com

 

, or to such other person, at such other place or in such manner as one party
shall designate to other party in writing.

 

 

 

 

SECTION 5.

MISCELLANEOUS

 

5.1   Waivers and Amendments.  Waiver by a party of a breach hereunder by
another party shall not be construed as a waiver of any subsequent breach of the
same or any other provision.  No delay or omission by a party in exercising or
availing itself of any right, power or privilege hereunder shall preclude the
later exercise of any such right, power or privilege by such party.  Neither
this Agreement nor any provision hereof may be changed, waived, discharged,
terminated, modified or amended except upon the written consent of the Company
and the Investor.

 

5.2   Governing Law; Submission to Jurisdiction.  This Agreement shall be
governed by and construed in accordance with the Laws of the State of New York,
without regard to the conflict of laws principles thereof that would require the
application of the Law of any other jurisdiction.  The parties irrevocably and
unconditionally submit to the exclusive jurisdiction of the state and federal
courts sitting in the County of New York, in the State of New York, solely and
specifically for the purposes of any action or proceeding arising out of or in
connection with this Agreement.

 

5.3   Remedies.  The rights, powers and remedies of the parties under this
Agreement are cumulative and not exclusive of any other right, power or remedy
which such parties may have under any other agreement or Law.  No single or
partial assertion or exercise of any right, power or remedy of a party hereunder
shall preclude any other or further assertion or exercise thereof.

 

5.4   Specific Performance.  The parties hereby acknowledge and agree that the
rights of the parties hereunder are special, unique and of extraordinary
character, and that if any party refuses or otherwise fails to act, or to cause
its Affiliates to act, in accordance with the provisions of this Agreement, such
refusal or failure would result in irreparable injury to the Company or the
Investor, as the case may be, the exact amount of which would be difficult to
ascertain or estimate and the remedies at law for which would not be reasonable
or adequate compensation.  Accordingly, if any party refuses or otherwise fails
to act, or to cause its Affiliates to act, in accordance with the provisions of
this Agreement, then, in addition to any other remedy which may be available to
any damaged party at law or in equity, such damaged party will be entitled to
seek specific performance and injunctive relief, without posting bond or other
security, and without the necessity of proving actual or threatened damages,
which remedy such damaged party will be entitled to seek in any court of
competent jurisdiction.  Notwithstanding this Section 5.4, except as otherwise
provided herein, if any act or failure to act by a Non-Controlled Affiliate of
the Investor contravenes this Agreement (or would contravene this Agreement to
the extent it was binding on such Non-Controlled Affiliate, notwithstanding that
it is not binding on such Non-Controlled Affiliate), upon written notice by the
Company, the Investor shall use its best efforts to take or cause such
Non-Controlled Affiliate to take appropriate measures to remedy such inaction to
the reasonable satisfaction of the Company.

 

5.5   Successors and Assigns.  Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto. 
Except as otherwise expressly provided herein, this Agreement, or any rights or
obligations hereunder, may not be assigned by either party without the prior
written consent of the other.

 

5.6   Headings.  The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.

 

5.7   Severability.  If, under applicable Laws, any provision hereof is invalid
or unenforceable, or otherwise directly or indirectly affects the validity of
any other material provision(s) of this Agreement in any jurisdiction (“Modified
Clause”), then, it is mutually agreed that this Agreement shall endure and that
the Modified Clause shall be enforced in such jurisdiction to the maximum extent
permitted under applicable Laws in such jurisdiction; provided that the parties
shall consult and use all reasonable efforts to agree upon, and hereby consent
to, any valid and enforceable modification of this Agreement as may be necessary
to avoid any unjust enrichment of either party and to match the intent of this
Agreement as closely as possible, including the economic benefits and rights
contemplated herein.

 

 

 

 

5.8   Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original but which together shall constitute one and
the same instrument.

 

5.9   Entire Agreement.  This Agreement, the Purchase Agreement and the
Registration Rights Agreement contain the entire agreement among the parties
with respect to the subject matter hereof and thereof and supersede all prior
and contemporaneous arrangements or understandings, whether written or oral,
with respect hereto and thereto.

 

5.10 Third Party Beneficiaries.  None of the provisions of this Agreement shall
be for the benefit of or enforceable by any Third Party.  No Third Party shall
obtain any right under any provision of this Agreement or shall by reason of any
such provision make any claim in respect of any debt, liability or obligation
(or otherwise) against any party hereto.

 

5.11 No Conflicting Agreements.  The Investor hereby represents and warrants to
the Company that neither it nor any of its Affiliates is, as of the date of this
Agreement, a party to, and agrees that, on or after the date of this Agreement,
the Investor shall not (and shall cause its Controlled Affiliates and use
commercially reasonable efforts to cause any Non-Controlled Affiliates not to)
enter into any agreement that conflicts with the rights granted to the Company
in this Agreement.

 

(Signature Page Follows)

 

 

 

 

IN WITNESS WHEREOF, the parties have executed and delivered this Voting
Agreement as of the date first above written.

 

  COMPANY:       CLEARSIGN COMBUSTION CORPORATION       By: /s/ Stephen E.
Pirnat   Name:   Stephen E. Pirnat   Title: Chief Executive Officer          
INVESTOR:       CLIRSPV, LLC   By: GPCLIRSPV LLC   Its Manager       By: /s/
Robert T. Hoffman Sr.   Name: Robert T. Hoffman Sr.   Title: Managing Member