Standard Exclusive Distributorship Agreement





3i Traffic Limited

3 Tarndale Grove

, P.O. Box 305 475

Albany, Auckland

New Zealand





The Distributor







1.    3i Traffic is engaged in the design marketing and sale of optical road guidance systems, its control and associated equipment.

2.    3i Traffic and the Distributor have determined a common interest for business co-operation and of their own free wills have entered into the following agreements:

3.    This Distributorship agreement (the Agreement) has been reached between 3i Traffic , being the Supplier and lawful owner of all and unlimited sales rights of the products covered by this Agreement - hereinafter referred to as "the Supplier" of the one part and Distributor hereinafter referred to as "the Distributor" - of the second part.





1.1.            Upon the terms and conditions hereinafter set forth, the Supplier hereby grants the Distributor and the Distributor hereby, accepts the exclusivity
of the sales rights for products as defined in ARTICLE 2 hereof - hereinafter referred to as "the Products" - to customers domiciled and/or having their registered offices within the territory of the Distributor hereinafter referred to as the Territory.

1.2.            The Distributor shall act, trade and deal in the Products and relieves the Supplier of any responsibility for any act or action committed by the Distributor under the terms of the Agreement.

1.3.            During the terms of the Agreement the Distributor shall not, in the territory, without prior written approval of the Supplier sell, purchase or assist in the promotion of other products which are directly competitive with the Products of the Supplier.





2.1       Term shall be for an agreed period. A further renewal shall apply subject to meeting a satisfactory sales performance.

2.2       The Agreement covers the promotion and sales of products relating to 3i Traffic systems.

2.3       The Supplier shall be entitled to withdraw on 3 months notice any of the Products which he shall cease to market or which have fallen short of reasonable marketing expectations.





3.1.        The Distributor shall not take any steps to promote the Products directly or indirectly, through own sales activities, third parties, advertising, servicing, warehousing or any other form of sales promotion directed towards any area outside the Territory.

3.2.        The same conditions apply to the Supplier or any representative appointed
by him with regard to the sale of the Products towards and from outside the Territory.

3.3.1.    If, despite these restrictions, orders are received by the Distributor from outside the Territory, the Distributor shall (must) inform the Supplier on receipt of such orders.

3.3.2.    Should orders be received for the Products from the Territory or destined
for delivery to the Territory, the Supplier shall (must) inform the Distributor of this information.

3.3.        In the circumstances described in Clause 3.3.1. and 3.3.2. above the Supplier and the Distributor shall discuss and agree a fair and equitable arrangement reflecting the work done by each of them to obtain the order.





4.1.       The Distributor agrees to use his best endeavours (best efforts, knowledge, local resources, experience) to promote and deal exclusively in the sale of the Products within the Territory and in addition
at his expense:

4.1.1.    To protect the best interests of the Supplier with good business attention and by using his best efforts, knowledge, local resources and experience to maintain good commercial relations with customers and potential customers.

4.1.2.    To aquaint himself with the specification performance and potential applications of the Products and to obtain all or any necessary certifications and approvals from the relevant authorities trade associations and other regulatory bodies in the Territory to enable the Products to be sold and installed without restriction.

4.2.      Both Supplier and Distributor agree, during the continuance of the Agreement and for an unrestricted period thereafter, not to disclose each others confidential information, price calculations, drawings, specifications, designs or other technical or commercial data to any third party, or use said confidential material in such a way as to be harmful, detrimental or competitive to the other party.

4.3.      The Distributor agrees not to represent, purchase, sell or promote either directly or indirectly during the term of the Agreement any goods of the same nature or being in competition with the Products.

4.4.        The Supplier agrees to provide practical co-operation and support by:

4.4.1.    Providing the Distributor the original files for leaflets, manuals, technical papers and such other materials which
in the opinion of the Supplier would assist the Distributor in the promotion of the Products.  Such sales aids to be provided in the English language in editable format ready for translation.

4.4.2.    Providing photos, know-how, case histories and other suitable aids and materials to help the Distributor in producing leaflets in local language/languages.

4.4.3.    Supplying on loan to the Distributor sales demo products (the number and type to be agreed) for presentations. These products can also to be used by the Distributor to participate at local trade fairs and exhibitions in the Territory as sales promotion for the 3i Traffic  products. Loan items to be returned on termination of this agreement. The Supplier will advise the Distributor on such trade fairs and exhibitions and on the sales aids and promotional material to use.

4.4.4.    Permitting the Distributor to use the intellectual property of the Supplier described herein for the duration of this Agreement to the extent necessary for the proper performance thereof.

4.5.        Providing technical assistance required by the Distributor for special and/or large projects.  The remuneration for such technical assistance will be subject to an individual agreement on a project by project basis to be negotiated and agreed between the Supplier and the Distributor.





5.1.        The Distributor buys and sells in his own name and for his own account. 
The Distributor acts as an independent trader between the Supplier and the customers. The Distributor is not authorised to act in the name of the Supplier and the Supplier is not authorised to act in the name of the Distributor.

5.2.        In the event that a customer obtained by the distributor wishes to contract directly with the Supplier and the Supplier successfully negotiates the contract, then the Distributor shall agree such arrangement and shall be entitled to a commission the rate of commission shall be mutually agreed between the Supplier and Distributor based on the price invoiced by the supplier to the customer.





6.1.        The Supplier undertakes to train reasonable numbers of the staff of the Distributor and his selected installation subcontractors in the sale and installation of the products, such training to take place in the Territory. Such training provided by the sales staff will be free of charge and associated costs will be agreed in advance.





7.1.        The Supplier grants the Distributor the right to use the names, Smartstud, 3i, 3i Traffic and associated 3i brands in the Territory.

7.2.        The Distributor may use his own trademarks together with the Trademarks, but shall give the Trademarks at least equal prominence to his own.

7.3.        The Distributor shall use the name 3i Traffic and 3i Traffic  on all of the Products, leaflets and literature and shall give at least equal prominence with his own name.

7.4.        The Distributor undertakes not to use the Trademarks, Patents and know-how for any purpose other than for the distribution of the Products.

7.5.        The Distributor particularly and explicitly undertakes not to use the Trademarks, Patents and Know-how in the Territory or anywhere else otherwise than in accordance with the Agreement, or after the termination
of the Agreement, directly or indirectly in any form whatsoever.

7.6.        The Distributor undertakes to keep the know-how secret at all times during the term of the Agreement and after its termination and to impose a similar obligation on any of its employees, agents, consultants or customers that may in any form gain access to the know-how in the course of distribution of the Products.

7.7.        The Distributor undertakes forthwith upon the termination of this Agreement howsoever occurring to cease all and any use of the intellectual property of the Supplier acknowledging that all technical information, advice, know-how, drawings, designs, specifications and any other matter referred to herein is 3i Traffic copyright and has been made available to the Distributor in strict confidence for the performance of this agreement.

7.8.        The Distributor undertakes that on the termination of this Agreement howsoever occurring the Distributor will not make any further use of any such intellectual property referred to herein or disclose the same to any third party without the specific prior written consent of the Supplier.

7.9.        The rights hereby granted to use the Trademarks, Patents and know-how are free of royalty during the duration of the Agreement.





8.1.        The Distributor shall inform the Supplier of all acts of unfair competition and of all infringements of trademarks, patents or similar rights of the Supplier as this information comes to his notice. The Distributor shall assist to the best
of his ability to protect the Products against such acts of infringement.





9.1.        The Supplier will issue annually, effective from the 1st January each year, price lists of standard products based on ex-works Auckland, New Zealand for the Distributor for products, but excluding transport, customs duties and taxes.

9.2.        The Distributor will purchase at the current export prices stipulated by the Supplier: Adjustments of export prices shall follow general cost developments related to the manufacture of the Products.  Any alterations of export prices or general conditions of sales and delivery will be given in writing by the Supplier, 30 days prior to such alterations taking effect.  In exceptional cases both parties to mutually agree on special price considerations for high volume items.

9.3.        All orders will be delivered in accordance with Incoterms 2000 as revised. Normal delivery terms DDU.

9.4.        All prices will be quoted and invoiced in USD, Euro or the Distributor's currency.

9.5.        Transport and clearance costs to be charged on a full recovery basis only at time of shipping.

9.6.        Under this Agreement the Distributor shall be free to set its own selling price in the Territory.





10.1.      Payments must be effected in USD, Euro or the Distributor's currency. Payment of the Supplier for deliveries to the Distributor shall be effective on delivery.

10.2.      Payment for the Products by the Distributor to the Supplier shall be made from the Distributor's trading bank, to the account of the Supplier's Bank.

10.3.      Unless otherwise agreed payment is to be made on despatch of goods.

10.4.      The Distributor will undertake to keep all accounts and records as will be necessary to the conduct of the Distributorship.





11.1       All orders from the Distributor to the Supplier shall be in written form. The order is only valid if confirmed in writing by the Supplier. The Distributor shall be responsible for accurate information and specifications with regard to specially manufactured products. The Supplier's order confirmations must be confirmed within ten working days from receipt of the order for standard products.





12.1       The time of delivery will be stipulated by the Supplier in his order confirmation, based on standard delivery list.

12.2.      The form of shipment and the carrier to be appointed shall be stipulated by mutual agreement; it is customary that the Distributor takes care of this choice.





13.1       The Distributor shall furnish the Supplier at monthly intervals with a written report on the number and value of all quotations including orders received to keep the Supplier informed of all matters of interest related to the Products in the territory and in particular of competitors activities, the market developments and the Distributor's sales expectations for the succeeding six months.

13.2       To assist in forecasting and planning the Distributor is required to complete an initial project report for each new project.

13.3       The Supplier undertakes to inform the Distributor without delay of any developments related to the Products.





14.1       The Supplier guarantees the Products in accordance with all relevant law and local standards.

14.2       Any damage occurred in transit, stocking in the Territory, faulty installation or improper use is not covered by the guarantee.

14.3       The Supplier is not in any way responsible under the guarantee terms or otherwise for any direct or indirect expenses that may be the result of an individual claim.

14.4       The Supplier is bound by the terms and conditions of the sale and purchase agreement as attached to the invoice.





15.1       The terms under which the Agreement is fulfilled confirm that the Distributor shall have the responsibility of preparing specifications, quotations, assembly, installation, servicing, choosing its clients and bearing all risks, with assistance and support of Supplier if necessary.





16.1     Any one of the parties is entitled to cancel the Agreement with immediate effect after receipt of a reminder notice and the expiry of a reasonable deadline if, in the case of the Distributor that the Supplier or in the case of the Supplier that the Distributor, does not meet the obligations under the Agreement, goes into bankruptcy or liquidation, suspends payments or becomes insolvent in any manner, or in the event that national or   agreements or legislation render the Agreement invalidated or make its fulfilment impossible. The Distributor may re-negotiate or terminate the Agreement if there is a change in the beneficial ownership of the Supplier and the supplier may re-negotiate or terminate the Agreement if there is a change in the beneficial ownership of the Distributor.





17.1.     This Agreement shall be deemed to commence as per Article 2.1 unless terminated with not less than 6 months notice in writing given by either party.

17.2.     Termination of the Agreement shall involve an extinction of all liabilities of the Supplier to the Distributor.

17.3.     Termination of the Agreement shall not release the Distributor from paying all outstanding accounts for the products delivered, but not invoiced, or to be delivered as the case may be.

17.4.     Any orders placed by the Distributor and duly confirmed by the Supplier, before termination takes effect, must be honored by the Supplier.

17.5.     The Distributor shall return all promotional material and confidential information as directed including details of outstanding sales quotations where orders are forthcoming.

17.6.     If the case arises final financial rights and liabilities will be decided on an independent firm of accountants to be agreed.

17.7.     In case the Distributor so requests, the Supplier shall be obliged to repurchase any of the Products which are new, current and unsold and in stock of the Distributor, at the price once invoiced by the Supplier subject to satisfactory prior inspection by the Supplier.

17.8.     Continued deliveries of the Products from the Supplier to the Distributor shall, after termination of the Agreement, under no circumstances be regarded as implying a prolongation of the Agreement. Any such deliveries as well as all sales of the Products affected by the Distributor after the date of termination shall be subject to the provisions of the Agreement.

17.9.     The Supplier reserves the right to require the Distributor to relinquish any use whatsoever of the name 3i Traffic upon the termination of the Agreement.





18.1.The Distributor is not entitled to assign in whole or in part the rights, duties or obligations under this Agreement.





19.1       Modifications or additions to the Agreement shall not be valid unless in writing.





20.1.     The Agreement shall be construed and governed in all respects in all respects in accordance with the law of New Zealand.  The language to be used is English.  Any disputes arising from the Agreement of anything connected herewith shall by submitted to the New Zealand Law Society, who will appoint an arbitrator.  The cost of such arbitration proceeding will be defrayed as laid down by the arbitrator. 





21.1       The Agreement has been made out in the English language.



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