EXHIBIT 10.5
AGREEMENT TO REDEEM MEMBERSHIP INTEREST, TRANSFER INTELLECTUAL PROPERTY
AND AMEND ASSET PURCHASE AGREEMENT
THIS AGREEMENT TO REDEEM MEMBERSHIP INTEREST, TRANSFER INTELLECTUAL
PROPERTY AND AMEND ASSET PURCHASE AGREEMENT ("Agreement") is made by and among
TRAFFIC SYSTEMS, L.L.C., an Arizona limited liability company ("Buyer"), UNITY
WIRELESS SYSTEMS CORPORATION, a corporation incorporated under the laws of
British Columbia ("Seller"), TRAFFIC SAFETY PRODUCTS, INC., an Arizona
corporation ("TSP"), and XXX XXXX ("Xxxx"), effective the 9th day of April,
2001.
RECITALS:
A. The parties hereto are parties to that certain Asset Purchase
Agreement, dated October 6, 2000 ("Asset Purchase Agreement"),
whereby, among other things, Seller sold certain assets to Buyer,
licensed certain intellectual property to Buyer and received a
thirty-seven percent (37%) interest in Buyer (the "Interest"). The
intellectual property is more specifically described in Exhibit "A"
attached hereto ("Intellectual Property").
B. One of the parties to the Asset Purchase Agreement, 568608 B.C. Ltd.
has merged with Seller, with Seller the surviving corporation; and
C. Seller desires to transfer all the Interest and the Intellectual
Property to Buyer, subject to the terms and conditions of this
Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. Redemption of Seller's Interest. Buyer hereby redeems the Interest.
2. Transfer of the Intellectual Property. Seller assigns to Buyer the
Intellectual Property, effective April 30, 2001. Concurrent with the execution
of this Agreement, Seller and Buyer agree to enter into an Assignment of
Intellectual Property, in the form attached hereto as Exhibit "B". Buyer agrees
to pay all costs associated with the assignment of the Intellectual Property,
including any related patent office fees. Buyer accepts the Intellectual
Property "as is".
3. Amendment and Restatement of Subparagraph 6(a) and Paragraph 7 of Asset
Purchase Agreement. Subparagraph 6(a) of the Asset Purchase Agreement is hereby
amended and restated in its entirety to read as follows:
"a. All obligations to perform any work required on existing
installations of Sonem preemption products necessary to bring
such installations into compliance with the terms of the written
warranty provided by Seller with respect to such products and for
any work required at common law on such installations, all such
work with respect to a specific installation to be completed
within a reasonable time after Buyer receives written notice that
such installation is not in compliance with such warranty
provisions or common law; and"
Paragraph 7 of the Asset Purchase Agreement is hereby amended and restated
in its entirety to read as follows:
"7. Release. Buyer hereby releases and discharges each of Seller, its
successors and assigns, from all actions, causes of action,
suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses,
damages, judgments, extents, executions, claims and demands
whatsoever, in law or equity, which against Seller, its
successors and assigns any of Buyer, its successors and assigns
ever had, now have or hereafter can, shall or may have, in
connection with the work obligations referred to in paragraph
6(a) above."
4. Representations and Warranties.
Seller represents and warrants as follows:
a. Seller has the full power and right to enter into this Agreement
and to consummate the sale and transfer of the Interest and the
Intellectual Property, free and clear of any option, commitment,
lien or other encumbrance.
b. Buyer shall receive good and marketable title to the Interest.
c. Seller has provided Buyer with copies of all written notices of
required or requested warranty work with respect to existing
installations of Sonem preemption products, and Seller has not
received any other such notices orally.
d. Attached hereto as Exhibit "C" is a true and correct copy of the
written warranty referred to in subparagraph 6(a) of the Asset
Purchase Agreement, as amended hereby.
Buyer represents and warrants as follows:
a. Buyer has sent the letter attached as Exhibit "D" to all Sonem
distributors.
b. Buyer will send a letter containing wording similar to that in
Exhibit "E" to all Sonem distributors on or before April 15, 2001
5. Indemnification. Buyer agrees to indemnify Seller from and against all
claims, damages, costs and liabilities suffered by Seller in connection with the
debts, obligations and liabilities identified in subparagraph 6(a) of the Asset
Purchase Agreement, as amended hereby, within a reasonable time after receiving
written notice thereof. Seller agrees to indemnify, defend, and hold Buyer
harmless from any damages, costs or liabilities incurred as a result of the
falsity of any representation made by Seller under this Agreement.
6. Payment of Purchase Price.
a. In the event of a sale of Buyer, either through the sale of all or
substantially all of its assets which it acquired from Seller as a result of the
Asset Purchase Agreement and/or this Agreement, or a transaction or series of
related transactions pursuant to which the members of Buyer cease to own the
majority of the outstanding membership interest of Buyer or its acquirer or
successor (any such sale of Buyer, a "Sale"), in which the cash purchase price
payable to Buyer or TSP upon completion of the Sale is at least US$2,500,000,
Seller shall become entitled to receive the remaining balance of the amount
described in Paragraph 2(b) of the Asset Purchase Agreement, within five
business days following completion of the Sale or at such later time as may be
agreed between Buyer and Seller.
b. In the event of a Sale in which the cash purchase price payable to
Buyer or TSP upon completion of the Sale is less than US$2,500,000, Seller, on
the one hand, and Buyer or TSP, on the other hand, agree to confer in good faith
prior to the closing of such Sale for the purpose of arriving at a definitive
written agreement regarding the allocation of the purchase price between Buyer
or TSP, on the one hand, and Seller, on the other hand.
c. Buyer and TSP covenant that neither of them will enter into any
agreement contemplating a Sale referred to in subparagraph 6(b) above unless
such agreement requires, as a condition
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precedent to the closing of such Sale, that Seller shall have executed an
agreement contemplated by subparagraph 6(b) above regarding the allocation of
the purchase price in such Sale.
d. If the terms of the payment of the purchase price for any Sale do
not provide for full payment on the closing of such Sale, then any such Sale
agreement shall provide, in addition to its other terms, that Seller shall be
entitled to fifty percent (50%) of the purchase price money payable to Buyer or
TSP after the closing of such Sale, when payable, until the remaining balance of
the amount described in Paragraph 2(b) of the Asset Purchase Agreement has been
paid in full.
7. Asset Purchase Agreement. The parties acknowledge that no further
materials or monies are due from Seller to Buyer either as a result of the Asset
Purchase Agreement or otherwise and that Seller is not obligated to provide any
technical, development or manufacturing support to Buyer either as a result of
the Asset Purchase Agreement or otherwise.
8. Amendment and Restatement of Paragraph 15 of Asset Purchase Agreement.
Paragraph 15 of the Asset Purchase Agreement is hereby amended and restated in
its entirety to read as follows:
"15. The parties acknowledge that Seller is not required to maintain product
liability insurance on installations installed after October 6, 2000.
Notwithstanding the foregoing, Seller shall be solely responsible for
maintaining in effect product liability insurance coverage for all traffic
preemption installations existing as of October 6, 2000 and represents that it
has named Buyer as an additional insured under the relevant policy."
9. Closing. The closing (the "Closing") of the sale and purchase of the
Interest and the Intellectual Property shall take place at the offices of SACKS
TIERNEY P.A. commencing at 10:00 a.m. local time on April 30, 2001 or at such
other time and place as the parties may agree in writing. The date of Closing is
sometimes herein referred to as the "Closing Date" or the "Closing."
10. Items to be Delivered at Closing. At the Closing and subject to the
terms and conditions herein contained:
Seller will deliver to Buyer the following:
(a) duly executed Assignment of Intellectual Property in the form of
Exhibit B.
(b) duly executed Assignment by Seller to Buyer of the Interest;
Buyer will deliver to Seller the following:
(a) duly executed Assignment by Seller to Buyer of the Interest;
11. Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by an instrument in
writing signed by the parties.
12. Conflict. In the event of any conflict between the terms of this
Agreement and the terms of the Asset Purchase Agreement, the terms of this
Agreement shall control and the Asset Purchase Agreement shall be amended as
provided herein.
13. Severability. If any provision of this Agreement is held to be invalid
or unenforceable to any extent in any context, it shall nevertheless be enforced
to the fullest extent allowed by law in that and other contexts, and the
validity and force of the remainder of this Agreement shall not be affected
thereby.
14. Governing Law. This Agreement, including all matters of construction,
validity and performance, shall be governed by and construed and enforced in
accordance with the laws of the State of Arizona, as applied to contracts made,
executed and to be fully performed in such state by citizens of such state,
without regard to its choice of law and conflict of laws rules.
3
15. Interpretation. The headings contained in this Agreement are for
reference only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word "including" is used in this Agreement it shall
be deemed to be followed by the words "without limitation."
16. Heirs, Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
heirs, successors and assigns of the parties. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective heirs, successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement except as
expressly provided in this Agreement.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. Signatures to this
Agreement are deemed acceptable by facsimile transmission.
18. Entire Agreement. This Agreement, the other documents delivered at the
Closing and the Asset Purchase Agreement as amended hereby supersede all prior
agreements with respect to the subject matter hereof. In interpreting and
construing this Agreement, the fact that a particular party may have drafted
this Agreement or any provision hereof shall not be given any weight or
relevance.
19. Authority. Each party warrants that it has the authority to enter into
this Agreement and that the person signing on its behalf, if any, is duly
authorized to do so.
IN WITNESS WHEREOF, the parties herein have executed this Agreement the day
and year first above written.
BUYER:
TRAFFIC SYSTEMS, LLC, an Arizona limited
liability company
By:
--------------------------------------------
Its:
-------------------------------------------
SELLER:
UNITY WIRELESS SYSTEMS CORPORATION
By:
--------------------------------------------
Its:
-------------------------------------------
TRAFFIC SAFETY PRODUCTS, INC., an Arizona
corporation
By:
--------------------------------------------
Its:
-------------------------------------------
--------------------------------------
XXXXX X. XXXX
4
EXHIBIT "A"
INTELLECTUAL PROPERTY
A. Seller is the owner of the following patents for siren-detector inventions:
Country Patent Number Issue Date Expiry Date
------- ------------- ---------- -----------
Australia 681380 18 December, 1997 4 March, 0000
Xxxxxx 1,322,586 28 September, 1993 28 September, 2010
China 94195085.9 28 April, 2000 4 March, 2014
France EP 318668 8 January, 1997 1 October, 2008
France EP 748494 17 June, 1998 4 March, 2014
Germany P69411195.3 8 January, 1997 1 October, 2008
Germany EP 748494 17 June, 1998 4 March, 2014
Hong Kong HK1009352 28 May, 1999 4 March, 0000
Xxxxx EP 318668 8 January, 1997 1 October, 2008
New Zealand 262083 8 September, 1998 4 March, 2014
Xxxxxxxxx 00000 21 December 1998 4 March, 0000
Xxxxx 2011597 8 January, 1997 1 October, 2008
United Kingdom EP 318668 8 January, 1997 1 October, 2008
United Kingdom EP 748494 17 June, 1998 4 March, 2014
U.S.A. 4,864,297 5 September, 1989 14 October, 2007
U.S.A. 5,710,555 20 January, 1998 1 March, 2014
B. Seller has filed applications to patent a siren-detector invention as
follows:
Country Patent Number Issue Date Expiry Date
------- ------------- ---------- -----------
Canada 2,183,868 4 March, 1994 4 March, 0000
Xxxxx 7-522583 4 March, 1994 4 March, 2014
C. Seller is the owner of the following patents for other inventions:
Country Patent Number Issue Date Expiry Date
------- ------------- ---------- -----------
Audio Railway Crossing Detector:
U.S.A. 5,910,929 8 June, 1999 10 July, 2018
Control Signal Coding and Detection in the Audible and Inaudible Ranges:
U.S.A. 6,133,849 17 October, 2000 20 February, 2016
5
EXHIBIT "B"
ASSIGNMENT OF INTELLECTUAL PROPERTY
[This Exhibit to be provided by Traffic Systems LLC.]
6
EXHIBIT "C"
SELLER'S WRITTEN WARRANTY
Limited Warranty
Sonic Systems Corporation will repair or replace any SONEM 2000 Digital
Siren Detector component or components found to be defective in materials
and/or workmanship within five (5) years from the date of shipment from
Sonic. Some states and jurisdictions do not allow limitations on duration
of an implied warranty, so the above limitation may not apply to the
Customer. To the extent allowed by applicable law, implied warranties on
the SONEM 2000 are limited to one (1) year for hardware and equipment and
to five (5) years for software unless altered in writing by Sonic Systems
Corporation.
Customer Remedies
In the event that any unit of the SONEM 2000, or any part thereof, does not
meet Sonic's Limited Warranty, the entire liability of Sonic and its
suppliers, directors, officers, employees, and agents, and the Customer's
sole remedy, shall be, at Sonic's option, either: (a) the return of the
price paid by the Customer for the SONEM 2000 (excluding taxes, duties, and
other similar charges and installation costs) or (b) the repair or
replacement of the SONEM 2000 or any component part thereof (excluding
taxes, duties, and other similar charges and installation costs). This
Limited Warranty is void if the failure of the SONEM 2000 or any component
part thereof has resulted from improper installation, operation, and/or
maintenance (including repair or modification by persons unauthorized by
Sonic), accident, abuse, negligence, and/or misapplication. Any replacement
of the SONEM 2000 or any component part thereof will be warranted for the
remainder of the original warranty period or for one (1) year, whichever is
longer. In jurisdictions where Sonics markets the SONEM 2000 through an
authorized dealer, the above remedies will not be available to the Customer
without proof of purchase from the authorized dealer or distributor.
No Other Warranties
To the maximum extent permitted by applicable law, Sonic and its suppliers
and distributors disclaim all other warranties, either express or implied,
including without limitation implied warranties of merchantability and
fitness for a particular purpose with regard to the SONEM 2000 and as to
the validity or scope of the technology of Sonic or that the technology or
Sonic does not infringe on the rights of any third party. The limited
warranty set out in this agreement provides the customer with specific
legal rights. The customer may have others, which may vary from
jurisdiction to jurisdiction.
7
No Liability For Consequential Damages
To the maximum extent permitted by applicable law, in no event shall Sonic
or its suppliers or distributors be liable for any special, incidental,
direct, indirect, or consequential damages or expenses whatsoever
(including without limitation, damages for loss of business profits,
business interruption, loss of business information, or any other economic,
commercial, or pecuniary loss) arising out of the functioning or use of or
inability to use the SONEM 2000, even if Sonic had been advised of the
possibility of such damages or expenses. Liability for consequential or
incidental damages and, therefore, the above limitations may not apply to
the customer.
Changes to and Use of the SONEM 2000
Sonic reserves the right to make any changes in the design and/or
construction of the SONEM 2000 or the component parts thereof at any time
without incurring any obligation to make any change whatsoever in the
system or components previously sold and delivered. The unit(s) of the
SONEM 2000, and any component parts thereof, supplied to the Customer are
sold for use at only the number of intersections specifically recited on
applicable purchase documents. The SONEM 2000 is covered by U.S. Patent No.
4,864,297 and its corresponding foreign applications. Sonic has also
applied for additional patent protection for improvements and modifications
to the SONEM2000. Individual components are sold separately only for
incorporation into the SONEM 2000 or for replacement purposes, and such
individual component sales for not grant or imply a license under the
above-mentioned patent rights, or any other intellectual property rights
held by or licensed to Sonic.
8
EXHIBIT "D"
BUYER'S LETTER TO DISTRIBUTORS
Traffic Systems, L.L.C.
0000 XXXX XXXXXXXX XXXXX, XXXXX 000
XXXXXXXXXX, XXXXXXX 00000-0000
(000)000-0000 FAX (000)000-0000
0-000-000-0000
November 17, 2000
Xx. Xxx Xxxxxx
RGH Pacific
101, 0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Dear Xx. Xxxxxx:
Traffic Systems L.L.C. has just completed the purchase of Sonic Systems from
Unity Wireless Systems Corporation.
This letter is intended to introduce ourselves and to establish contact with the
Sonic Distributors.
Traffic Systems purchased all of the Sonic assets from Unity Wireless Systems.
All contracts and purchase orders have been transferred from Unity Wireless
Systems, Corp. to Traffic Systems, L.L.C.
We would like to continue having you as a distributor for the Sonem 2000. Your
territory will remain the same as it is now. Sonem 2000 will remain as the
product name. However the system has been reconfigures to use a different
detector. The software has been enhanced and we have changed the enclosure.
Pricing has not changed at the present time.
Traffic Systems L.L.C. will honor any warranty claims for the Sonem components.
The manuals and brochures are being rewritten and should be available in
approximately two weeks. We will have E-mail when the local telephone company
installs a line without destroying all of our other lines.
Bear with us for a short time as we play catch up and then we should have a
smooth operation.
Please feel free to contact any of the following people as needed:
Xxx Xxxx - Anything
Xxxxxx Xxxxx - Technical support and Installation
Xxxxxx Xxxx - Accounting
Xxxx Xxxx - Production and Shipping
Xxxxx Xxxxxx - Sales
9
November 17, 2000
Xx. Xxxxxx
Page 2
The Traffic System group has about 100 years of traffic, preemtion and U.S. DOT
funding experience. We are here to provide whatever assistance to you, we can.
I am looking forward to meeting with you in the not to distant future. We will
be working to provide all the service and support you need, so we may enjoy a
mutually prosperous and beneficial relationship.
Sincerely,
Traffic Systems, LLC
Xxxxx X. Xxxx
President
10
EXHIBIT "E"
BUYER'S SECOND LETTER TO DISTRIBUTORS
Traffic Systems LLC will send a letter to all Sonem distributors (past and
present) with wording similar to this, to ensure that all distributors are clear
that Traffic Systems has assumed all warranty responsibilities for Sonem
products:
When Traffic Systems LLC purchased the Sonem business from Unity Wireless
Systems Corp. (formerly Sonic Systems Inc.) in October, 2000, Unity
Wireless retained a minority ownership share in Traffic Systems.
The transition is now complete, and Traffic Systems has bought out the
minority ownership interest previously held by Unity Wireless. As has been
the practice for the past several months, please continue to direct all
inquiries regarding the Sonem products and related warranty issues to
Traffic Systems LLC; all requests relating to the Sonem products received
by Unity Wireless will be redirected to Traffic Systems.
11
Traffic Systems, L.L.C.
0000 XXXX XXXXXXXX XXXXX, XXXXX 000
XXXXXXXXXX, XXXXXXX 00000-0000
(000)000-0000 FAX (000)000-0000
0-000-000-0000
April 13, 2001
Xx. Xxx Xxxx
Camp Safety Equipment
0000 Xxxx Xxx Xxxx
Xxxxxxxxxx, XX 00000
Dear Xxx:
When Traffic Systems, L.L.C. purchased Sonem from Unity Wireless (formerly Sonic
Systems, Inc.) last October, Unity Wireless retained a minority ownership share
of Traffic Systems, L.L.C.
Traffic Systems has now bought out the minority ownership interest of Unity
Wireless. As has been the practice since October, please continue to work
directly with us regarding our Sonem products and any related warranty issues.
I believe having complete ownership of Traffic systems will be beneficial for
both of us.
If I can be of assistance to you in any manner, please let me know.
Thank you, for your continued support of our Sonem 2000 products.
Sincerely,
Xxxxx X. Xxxx
President
JLH/gf
12
LIMITED LIABILITY COMPANY
MEMBERSHIP INTEREST REDEMPTION AGREEMENT
THIS MEMBERSHIP INTEREST REDEMPTION AGREEMENT ("Agreement") is made and
entered into this ___ day of April, 2001, by and among UNITY WIRELESS SYSTEMS
CORPORATION, a corporation incorporated under the laws of British Columbia
("Unity") TRFFIC SYSTEMS L.L.C. and Arizona limited company ("Traffic Systems"),
and TRAFFIC SAFETY PRODUCTS, INC., an Arizona corporation ("TSP").
RECITALS
A. Unity and TSP are the owners of all of the membership interests in
Traffic Systems.
B. Unity wishes to transfer one hundred percent (100%) of its interest to
Traffic Systems (the "Interest"), and Traffic Systems wishes to redeem all the
Interest on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
AGREEMENTS
1. Redemption of Interest. Unity hereby transfers to Traffic Systems, and
Traffic Systems hereby redeems from Unity, all of the Interest, free and clear
of any liens, encumbrances, claims and rights of third parties.
2. Redemption Price. In consideration for such redemption, Traffic Systems
has agreed to assume certain obligations pursuant to that certain Agreement to
Redeem Membership Interest, Transfer Intellectual Property and Amend asset
Purchase Agreement.
3. Representations, Warranties and Covenants of Unity. Unity owns, free and
clear of all liens, encumbrances, equities and claims whatsoever, the Interest
being sold pursuant to this Agreement. Unity has full legal right and power to
sell, assign and transfer all of the Interest to Traffic Systems free and clear
of all liens, encumbrances, claims and rights of third parties of whatever
nature.
4. Attorney Fees. The prevailing party in any litigation, arbitration or
other proceeding arising out of this Agreement shall be reimbursed by the other
party for all costs and expenses in such proceeding, including reasonable
attorney fees.
5. Arbitration. If any dispute arises between the Parties, the Parties
agree to have an arbitrator settle the dispute, the decision of such arbitrator
being deemed final and conclusive. In the event of a dispute, the parties shall
attempt to agree on an arbitrator. If they are able to agree,
13
that arbitrator shall serve as the sole arbitrator. If the Parties are unable to
agree, then the Parties shall each select an arbitrator, and those arbitrators
shall select an independent arbitrator, which independent arbitrator shall be
the sole arbitrator. The cost of any arbitration shall be shares equally between
the Parties.
6. Miscellaneous
a. Amendments. This agreement may not be amended or modified except in
writing signed by the parties.
b. Entire Agreement. This agreement contains the entire understanding
of the parties and supersedes any prior understandings and agreements, written
or oral, respecting the subjects discussed herein.
c. Governing law. This Agreement shall be governed by the laws of the
State of Arizona.
d. Heirs and Assigns. This Agreement shall be binding on and inure to
the benefit of the parties, their respective heirs, successors and assigns.
e. Counterparts. This Agreement may be executed in counterparts, each
of which, when executed, shall be deemed an original.
f. Authority. Each party warrants that it has the authority to enter
into this Agreement and that the person signing on its behalf, if any, is duly
authorized to do so.
g. Fees and Expenses. Each party shall bear its own legal and
accounting fees, and other expenses of whatever nature.
h. Notices. Any and all notices required by this Agreement shall be
personally delivered or sent by Federal Express or other overnight mail, postage
prepaid, addressed as follows:
To Unity:
Unity Wireless Systems Corporation
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, X.X.
Xxxxxx X0X0X0
Attn: Xxx Xxxx
To Traffic Systems:
Traffic Systems, L.L.C.
0000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxx
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To TSP:
Traffic Safety Products, Inc.
0000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxx
or at such other addresses as the parties ma designate to each other in
accordance with this Section. A notice shall be deemed effective when mailed,
or, if personally delivered, when delivered.
DATED as of this ________ day of April, 2001.
UNITY WIRELESS SYSTEMS CORPORATION, a
Corporation incorporated under the laws of
British Columbia
By: ____________________________________
Its: ____________________________________
TRAFFIC SYSTEMS, LLC, an Arizona limited
Liability company
By: ____________________________________
Its: ____________________________________
TRAFIC SAFETY PRODUCTS, INC., an Arizona
corporation
By: ____________________________________
Its: ____________________________________
15
April 18, 2001
Mr. Xxx Xxxx
Traffic Systems LLC
0000 Xxxx Xxxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
RE: CLARIFICATION OF PARAGRAPH 7
Dear Xxx:
As we discussed, this document is to confirm that Paragraph 7 on Page 3 of the
"Agreement to Redeem Membership Interest, Transfer Intellectual Property and
Amend Asset Purchase Agreement" does not apply to the original Asset Purchase
Agreement, Paragraph 1 (c).
As part of the original Asset Purchase Agreement, Unity promised to supply
enough materials to build detectors for 100 4-way intersections. Since that
time, there has been a question raised as to the number of Atlas horns required
for 100 intersections (i.e. 400 or 800 horns).
We agree to work out the payments for these horns separately from the main
Agreement. Please signify your agreement by signing below.
Regards,
Xxx Xxxx
Senior Vice-President & General Manager,
Unity Wireless Systems Corporation
Xxxxx X. Xxxx ---------------------------------
For Traffic Sytems LLC
16
April 9, 2001
Mr. Xxx Xxxx
Traffic Systems LLC
0000 Xxxx Xxxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
RE: AMENDMENT TO ASSET PURCHASE AGREEMENT
Dear Xxx:
As we discussed, this document is to amend the Asset Purchase Agreement, dated
for reference October 6, 2000, between Unity Wireless Systems Corporation,
568608 BC Ltd. (since amalgamated with Unity Wireless Systems Corp.), Traffic
Systems LLC, Traffic Safety Products Inc. and Xxxxx Xxxx, as follows:
Replace the last sentence of Paragraph 4 (Royalty Payment) with:
Such royalty shall be paid by Buyer commencing on the fifteenth (15th) day
of the first quarter of 2001 and continuing on the thirtieth (30th) day of
each quarter thereafter based upon the gross profits of Buyer for the
immediately preceding quarter.
Please signify your agreement by signing and returning this document.
Regards,
Xxx Xxxx
Senior Vice-President & General Manager,
Unity Wireless Systems Corporation
Traffic Systems LLC ----------------------------------
Traffic Safety Products Inc. ----------------------------------
Xxxxx X. Xxxx ----------------------------------
17
