PEEK AGREEMENT
DISTRIBUTOR AGREEMENT
THIS DISTRIBUTOR AGREEMENT (hereinafter referred to as the "Agreement") is
entered into this 15th day of February 2000, by and between Sonic Systems
Corporation, a British Columbia company, and Peek Traffic Systems Inc., a
Florida corporation, for the purpose of establishing a working relationship for
the manufacture, distribution and sale of a CDPD Modem for use within the
Transportation Industry (the "Product").
WHEREAS, the parties are desirous of working together in the design,
manufacturing, distribution and sale of the Product, and are desirous of fixing
and defining between themselves their respective responsibilities, interests,
and liabilities in connection with the Product.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein
contained, the Parties hereto agree to constitute themselves as Manufacturer and
Distributor for the purposes before mentioned and, intending to be legally bound
hereby, the parties hereto, after first being duly sworn, do covenant, agree and
certify as follows:
ARTICLE I - DEFINITIONS
1.1 "Manufacturer" shall refer to Sonic Systems Corporation, whose place of
business is at #000 - 0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx X0X 0X0.
1.2 "Distributor" shall refer to Peek Traffic Systems, Inc., whose place of
business is at 0000 Xxxxxxxxxxxx Xxxx., Xxxxxxxxxxx, Xxxxxxx, XXX
00000-0000.
1.3 "Product" shall refer to the CDPD Modem designed and manufactured by
the Manufacturer for use with all NEMA controllers and the
Distributor's advanced transportation controllers within the
Transportation Industry,
1.4 "Territory" is defined as the United States and it's territories,
Canada, and Mexico.
1.5 "International Territories" is defined as all countries and territories
not mentioned in 1.4 above.
ARTICLE II - PURPOSE OF THE AGREEMENT
2.1 The purpose of this AGREEMENT is to provide guidelines for the
establishment of a working relationship between the Manufacturer, as
designer and manufacturer, and the Distributor, as distributor of the
Product. As the relationship matures, or if additional products are
developed, this document may be modified upon the agreement in writing
of both parties. The parties agree to explore the transfer of
manufacturing responsibility to Distributor under a licensing agreement
after an initial period of 6 months.
ARTICLE III - TERM
3.1 The term of the AGREEMENT shall commence upon the signing of this
document and shall remain in force for a period of two years unless
modified in writing and agreed to by both parties. The AGREEMENT shall
be renewed at the conclusion of the 2 year term for additional one year
term(s), if each party agrees in writing in its complete discretion,
and without any requirement to compensate the other party if it elects
not to renew, that it is in its best interest to continue the
relationship and the terms of this AGREEMENT. Either party may
terminate this Agreement if the other is in breach of a provision of
this AGREEMENT and has not remedied such breach within 30 days of
receipt of notice of the breach.
3.2 This agreement sets forth the full and complete understanding of the
parties concerning the project as of the date hereof, and there are no
other representations, covenants or agreements expressed, implied or
statutory other than those expressly set forth herein. No amendments or
modifications hereof shall be valid unless evidenced in writing and
executed on behalf of both of the parties. All notices must be sent to
the respective parties at the addresses referenced herein.
ARTICLE IV - RESPONSIBILITIES
4.1 Manufacturer
4.1.1 The manufacturer shall design the Product and the Product shall be
compatible with NEMA traffic controllers and shall comply with "MPIC
Product Description", document number TC.0003.D1, dated January 7,
2000, as well as "MPIC: Application Protocol Specification", document
number EN0XXX, release number Beta 0.9.0, dated December 2, 1999.
Within 30 days of the release of revised version(s) of these
document(s), the Manufacturer shall deliver them to the Distributor
and, upon mutual written agreement of the parties, the Product shall be
required to comply with the revised document(s).
4.1.2 The Manufacturer shall manufacture, test and provide a warranty and
repairs for the Product. Warranty will be for a period of one year from
installation at customer site or 18 months from date of shipment from
Manufacturer, whichever occurs first, and will cover all parts and
labor for replacement of components which fail in normal operation of
the unit (s). Warranty will not cover units damaged by abuse, misuse,
vandalism, improper installation, misapplication of power, accident,
lightning, storms, or acts of God, and does not cover costs related to
installation or removal.
4.1.3 The Manufacturer shall sell the Product to the Distributor in
accordance with the price list set out in Schedule "A" to this
AGREEMENT. Such prices exclude shipping costs, duties and taxes, which
will be borne by the Distributor. The Product will be shipped to the
Distributor at its location in Tallahassee, Florida or to locations as
designated by the Distributor in purchase orders delivered by the
Distributor to the Manufacturer.
4.1.4 The Manufacturer shall provide training and manuals on the Product for
the Distributor and the Distributor's personnel. Distributor and
Manufacturer shall each be responsible for all training-related costs
for their respective personnel, including travel and lodging costs.
4.1.5 During the warranty period the Manufacturer shall provide direct
customer support to the end user in those instances when the Product is
not performing in accordance with its advertised specifications and
such lack of performance is deemed to be a result of design flaw(s)
and/or substandard component(s) in the Product. This direct customer
support may in some instances require the Manufacturer to provide
on-site support to the customer, and the Manufacturer will provide such
support to the customer at no cost to the Distributor when mutually
deemed appropriate by both the Manufacturer and the Distributor.
4.1.6 The Manufacturer shall provide catalog cuts to the Distributor and
advertise the Product in the trade journals for the Transportation
Industry. The Distributor shall be specified as the Manufacturer's
distributor of the Product in any advertising, and will be referred all
customer inquires received by the Manufacturer for all NEMA
applications and applications of the Distributor's advanced
transportation controllers, for follow-up and potential sale of the
Product.
4.1.7 Nothing in this AGREEMENT is intended to restrict the Manufacturer's
right to develop, manufacture and sell CDPD Modems for use a) within
the Transportation
Industry with devices other than controllers and b) in other
applications outside of the Transportation Industry, and to appoint
distributors other than the Distributor in respect of such modems.
4.2 Distributor
4.2.1 The Distributor shall be the master distributor of the Product for all
NEMA applications and applications of the Distributor's advanced
transportation controllers in the Territory and shall not carry
competing products. The Distributor shall also be the master
distributor of the Product for all Peek Traffic companies. The
Distributor shall use its best efforts to utilize its position within
the Transportation Industry, and its relationship with its distribution
network and customers, and its relationship with other Peek Traffic
companies to create a market for the Product. The Distributor shall
provide the necessary personnel and financial resources to introduce
and support the Product within the Transportation Industry in the
Territory. The Distributor agrees to deliver orders to the Manufacturer
for at least that number of units of the Product as set out in Schedule
"B" hereto.
4.2.2 The Distributor shall demonstrate the Product at trade shows, training
sessions, and during new product introductions throughout the
Territory, and shall ensure its resellers are adequately trained to
sell and support the Product.
4.2.3 The Distributor, upon receiving potential customer referrals either
from the Manufacturer or directly, shall provide immediate follow up,
and shall recommend and try to provide a demonstration of the Product
in those instances which, in the sole opinion of the Distributor, are
expected to provide a reasonable economic return.
4.2.4 Distributor and/or its resellers shall stock sufficient inventory for
spares and immediate sales.
4.2.5 Distributor and its resellers shall provide direct, first contact
customer support regarding all aspects of use of the Product, whether
arising in connection with the equipment, application, hardware,
software or service, including, for example, issues relating to
software configuration and setup, usability issues, service activation
and service coverage.
ARTICLE V - EXCLUSIVITY
5.1 The Distributor shall have the exclusive right to distribute and sell
the Product within the Territory. Distributor shall have right of first
refusal on exclusive marketing rights within the Territory to
distribute products derived from the Product for all applications
involving NEMA controllers or the Distributor's advanced transportation
controllers. Such derivative products may include but are not limited
to enhanced CDPD Modems and other digital wireless communications
devices or protocols.
5.2 The Distributor shall have non-exclusive rights to sell the Product in
International Territories, as defined in 1.5 above, to the extent that
such non-exclusive rights do not conflict with market- or
segment-specific exclusivity agreements as may be granted from time to
time by the Manufacturer, in Manufacturer's sole discretion.
5.3 In some competitive situations, resellers in the Territory may wish to
not purchase from Distributor, in which case after consultation with
Distributor, Manufacturer may sell direct and pay Distributor a
commission equal to a minimum of 5% of the net proceeds of the sale.
ARTICLE VI - SAMPLE UNITS
6.1 The Manufacturer shall make available and the Distributor shall
purchase a suitable number of sample units of the Product for
demonstration purposes. The price for the sample units of the Products
shall be discounted by 50% from the normal price paid by the
Distributor, as these sample units will be for demonstration purposes
and will not be sold.
ARTICLE VII - GENERAL
7.1 Orders for Product will be submitted to Manufacturer on Distributor's
standard purchase order form, and in the case of conflicting terms, the
terms of this AGREEMENT shall override the terms of the standard
purchase order. (Xxx - wll fax and fedex today; I don't think we need
to include it as an exhibit because the clause above allows this
agreement to govern in the case of conflicting terms.)
7.2 Manufacturer will use its best efforts to ship products ordered within
30 days of receipt of purchase order if the order was previously
forecast; or 60 days after receipt of order if not forecast.
7.3 Payment for the Products shall be made by the Distributor "Net 60 days"
after shipment, on established credit terms, for Product which will be
resold by Distributor to end customers; terms shall be "Net 30 days",
on established credit, for Product for use as demonstration units and
for all spares and paid repairs. Deposits may be required for orders
larger than established credit terms.
7.4 Product returned for warranty repair must be accompanied with a Return
Material Authorization number ("RMA") assigned by Manufacturer prior to
shipment. Warranty returns shall be shipped prepaid to Manufacturer,
and shall be returned prepaid ground transportation to the Distributor.
7.5 Nothing in this AGREEMENT shall transfer or modify ownership of either
party's intellectual property or trademarks.
7.6 The Manufacturer is not selling the Products with any implied
suitability for use in any application. Manufacturer in no case accepts
responsibility for indirect, incidental or consequential damages of the
Distributor or any of its resellers or customers under the warranty or
otherwise.
7.7 Manufacturer and Distributor agree not to offer employment or employ
any employee of the other party during the term of this agreement and
for a period of one year after expiration or termination of this
agreement.
7.8 This agreement shall be construed and all disputes hereunder shall be
settled in accordance with The Florida International Arbitration Act.
ARTICLE VIII - NON TRANSFER
8.1 This Agreement may not be transferred by either party without the
express written permission of the other party. For the purposes of this
Agreement, a change of ownership (as evidenced by a change of control)
of a party constitutes a transfer of the Agreement, and the Agreement
will automatically terminate if the other party does not agree to such
transfer.
ARTICLE IX -- MISCELLANEOUS
9.1 FURTHER ASSURANCES - The parties hereto agree to execute such further
and other assurances and/or documents as may be necessary to complete
the true intent and meaning of this Agreement.
9.2 NOTICE - All notices, requests, demands and other communications
required or permitted hereunder, or desired to be given with respect to
rights or interests herein, will be in writing and must be mailed,
telegraphed, delivered or sent by telex or telecopier to the parties at
their respective addresses as set out on the signature page hereof. Any
such notice will be deemed to have been given, if mailed, 7 days
following the date of posting; provided that if there is, between the
time of mailing and the actual receipt of the notice, a mail strike,
slow down or other labour dispute which might affect delivery of such
notice by mail, then such notice will be effective only if delivered;
and, if given by personal delivery, when delivered.
9.3 COUNTERPARTS - This Agreement and any certificate or other writing
delivered in connection herewith may be executed in any number of
counterparts and any party hereto may execute any counterpart, each of
which when executed and delivered will be deemed to be an original and
all of which counterparts of this agreement or such other writing as
the case may be, taken together will be deemed to be one and the same
instrument. The execution of this Agreement or any other writing by any
party hereto will not become effective until all counterparts hereof
have been executed by all the parties hereto.
9.4 HEADINGS - The headings are for convenience only and do not form a part
of this Agreement and are not intended to interpret, define or limit
the scope, extent or intent of this Agreement or any provision hereof.
9.5 TIME OF ESSENCE - TIME will be of the essence of this Agreement.
9.6 ENUREMENT - THIS Agreement will enure to the benefit of and be binding
upon the parties hereto, their respective heirs, executors,
administrators, successors and permitted assigns.
9.7 LEGAL AND TAX ADVICE - Each of the parties hereto covenants, agrees and
acknowledges that each of them was fully and plainly instructed to seek
and obtain independent legal and tax advice regarding the terms and
conditions and execution of this Agreement and each of them has sought
and obtained such legal and tax advice and acknowledges that each has
executed this Agreement voluntarily understanding the nature and effect
of this Agreement after receiving such advice.
9.8 SEVERABILITY - In the event that any of the covenants herein contained
shall be held unenforceable or declared invalid for any reason
whatsoever, such unenforceability or invalidity shall not affect the
enforceability or validity of the remaining provisions of this
Agreement and such unenforceable or invalid portion shall be severable
from the remainder of this Agreement.
9.9 FORCE MAJEURE - IN the event of an inability or failure by the
Manufacturer to manufacture, supply or ship the Product by reason of
any fire, explosion, war, riot, strike, walk-out, labor controversy,
flood, shortage of water, power, labor, transportation facilities or
necessary materials or supplies, default or failure of carriers,
breakdown in or the loss of production or anticipated production from
plant or equipment, act of God or public enemy, any law, act or order
of any court, board, government or other authority of competent
jurisdiction, or any other direct cause (whether or not of the same
character as the foregoing) beyond the reasonable control of the
Manufacturer, then the Manufacturer shall not be liable to the
Distributor during the period and to the extent of such inability or
failure. Deliveries omitted in whole or in part while such inability
remains in effect shall be cancelled.
9.10 STATUS OF DISTRIBUTOR - THE parties hereto acknowledge that the
Distributor is an independent contractor and nothing in this Agreement
is intended to constitute the Distributor as an agent or a partner of
the Manufacturer. The Distributor has
no authority to assume or to create any obligation or liability,
expressed or implied on behalf of or in the name of the Manufacturer.
9.11 INDEMNIFICATION BY DISTRIBUTOR - The Distributor hereby agrees, during
and after the term of this Agreement, to indemnify and save the
Manufacturer harmless from any and all liabilities, losses, suits,
claims, demands, costs, fines and actions of any kind or nature
whatsoever to which the Manufacturer shall or may become liable for, or
suffer by reason of any breach, violation or non-performance on the
part of the Distributor, or any of its agents, servants or employees,
of any term or condition of this Agreement and from all claims,
damages, suits, costs or actions of any persons, firms or corporations
arising from the Distributor selling and/or marketing the Products.
9.12 INDEMNIFICATION BY MANUFACTURER - The Manufacturer hereby agrees,
during and after the term of this Agreement, to indemnify and save the
Distributor harmless from any and all liabilities, losses, suits,
claims, demands, costs, fines and actions of any kind or nature
whatsoever to which the Distributor shall or may become liable for, or
suffer by reason of any breach, violation or non-performance on the
part of the Manufacturer, or any of its agents, servants or employees,
of any term or condition of this Agreement and from all claims,
damages, suits, costs or actions of any persons, firms or corporations
arising from the Manufacturer designing, manufacturing, and/or selling
the Product to the Distributor.
Agreed:
Date Date
-------------------------- ---------------------------
SONIC SYSTEMS, CORP. PEEK TRAFFIC SYSTEMS, INC.
#000 - 0000 Xxxx Xxxxxx 0000 Xxxxxxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxx Xxxxxxxx Tallahassee, Florida
Canada V6P 3G2 USA 32303-3157
------------------------------ -------------------------------
Xxx Xxxx Xxx Xxxxxxxx
Both parties agree that this document is of no force or effect until both
parties have agreed to, and indicated their agreement by initialing, the
contents of Schedules "A" , and "B", attached hereto.
