exhibit1097.htm


     

    
      

      

    

     

    Exhibit
10.97

     

    
      VOTING ARRANGEMENT
AGREEMENT

       

      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/
      Joseph McAleese

              	 
      
	 
      	Joseph
      McAleese 	 
      
	 
      
	
                SMARTIRE
      SYSTEMS INC.

              
	 
      
	
                Per:

              	
                /s/
      David Warkentin

              	 
      
	 
      	David
      Warkentin	 
      
	 
      	 
      	 
      
	
                YA GLOBAL INVESTMENTS,
      L.P., f/k/a
      CORNELL
      CAPITAL PARTNERS L.P.

              
	 
      
	
                Per:

              	
                /s/
      Mark Angelo

              	 
      
	 
      	
                Mark
      Angelo, Portfolio Manager

              	 
      
	 
      	 
      	 
      
	
                XENTENIAL
      HOLDINGS LIMITED

              
	 
      
	
                Per:

              	
                /s/
      Mark Angelo

              	 
      
	 
      	
                Mark
      Angelo, Director

              	 
      
	 
      	 
      	 
      
	
                STARAIM
      ENTERPRISES LIMITED

              
	 
      
	
                Per:

              	
                /s/
      Mark Angelo

              	 
      
	 
      	
                Mark
      Angelo, 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:

              	 
      	 
      
	 
      	 
      	 
      
	 
      
	
                SMARTIRE
      SYSTEMS INC.

              
	 
      
	
                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.