SAFETRAN AGREEMENT
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING (herein after referred to as the
"Understanding") is entered into this 25th day of January1999, by and between
Sonic Systems Corporation, a British Columbia company, and Safetran Traffic
Systems Inc., a Colorado Corporation, for the purpose of establishing a working
relationship for the manufacture, distribution and sale of a CDPD MODEM for use
within the Traffic Control 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
DEFINITION
1.1 "Manufacturer" shall refer to Sonic Systems Corporation, whose place of
business is at #101 - 0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X
0X0 Xxxxxx.
1.2 "Distributor" shall refer to Safetran Traffic Systems, Inc., whose
place of business is at 1485 Garden of the Xxxx Xxxx, Xxxxxxxx Xxxxxxx,
Xxxxxxxx 00000.
1.3 "Product" shall refer to the CDPD Modem designed and manufactured by
the Manufacturer for use with the Distributor's 170, and Advanced
Traffic Controllers within the Traffic Control 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 UNDERSTANDING
The purpose of this Understanding 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 of both parties.
ARTICLE III
TERM
The term of the Understanding shall commence upon the signing of this document
and shall remain in force for a minimum of two years. The Understanding shall be
renewed at the conclusion of this initial period, if each party agrees, 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 Understanding. Either party may terminate this Agreement if the
other is in breach of a provision of this Understanding and has not remedied
such breach within 30 days of receipt of notice of the breach.
ARTICLE IV
RESPONSIBILITIES
THE MANUFACTURER
Shall design the Product and the Product shall be compatible with 170 traffic
controllers and capable of communicating in the following manners:
4.1 Over hardwire or telephone lines equivalent to a Xxxx 202 Modem
4.2 By means equivalent to Cellular Phone:
4.3 By direct dial, Transmitter to Receiver.
4.4 Operation similar to communicating over the Internet.
In addition, the Product shall be capable of receiving analog signals, acting
upon them and transmitting the results digitally.
The Manufacturer shall manufacture, test and provide a warrantee and repairs for
the Product. The Manufacturer shall sell the Product to the Distributor in
accordance with the price list set out in Schedule "A" to this Understanding.
Such prices exclude shipping costs, which will be borne by the Distributor. The
Product will be shipped to the Distributor at its location in Colorado Springs,
CO or to locations as designated by the Distributor in purchase orders delivered
by the Distributor to the Manufacturer.
The Manufacturer shall provide training and manuals on the Product for the
Distributor and the Distributor's personnel.
The Manufacturer shall provide catalog cuts to the Distributor and advertise the
Product in the trade journals for the Traffic Control 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 follow-up and potential sale of the Product.
Nothing in this Understanding is intended to restrict the Manufacturer's right
to develop, manufacture and sell other CDPD Modems for use within the Traffic
Control Industry with other types of controllers (NEMA Controllers) and to
appoint distributors other than the Distributor in respect of such modems.
THE DISTRIBUTOR
The Distributor shall work closely with the Manufacturer and potential customers
to formulate the design characteristics of the Product.
The Distributor shall be the master distributor of the Product and shall not
carry competing products. The Distributor shall utilize its position within the
Traffic Control Industry and its relationship with its distribution network and
customers 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 industry and the Territory. [The Distributor agrees to deliver orders to the
Manufacturer for at least that number of units of the Product as set out
Schedule "B" hereto.]
The Distributor shall demonstrate the Product at trade shows, training sessions,
and during new product introductions throughout the Territory.
The Distributor, upon receiving potential customer referrals either from the
Manufacturer or directly, shall provide immediate follow up, and shall in all
instances recommend and try to provide a demonstration of the Product.
ARTICLE V
TERRITORY
The Distributor shall have the exclusive right to distribute and sell the
Product within the Territory. The Distributor shall also have the first right of
refusal to acquire exclusive rights to distribute the Product in each of the
countries in the International Territories, which right must be exercised within
30 days of notice by the Manufacturer to the Distributor of the Manufacturer's
intent to award exclusive distribution rights to the Product in one or more of
the countries in the International Territories to another person.
[This space deliberately left blank.]
ARTICLE VI
SAMPLE UNITS
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.
Agreed:
Date Date
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SONIC SYSTEMS, CORP. SAFETRAN TRAFFIC SYSTEMS, INC.
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Xxx Xxxxxxx Xxxxxxx Xxxxx
CONTINGENCY:
Both parties agree that the signing of this document is contingent upon both
parties agreeing to the contents of Schedules "A" and "B" attached hereto.
