TRW has transferred to SmarTire an exclusive license to manufacture and sell tyre monitoring systems to OEMs of medium and heavy duty trucks.
As primary consideration for this transaction, TRW receives 450,000 shares of SmarTire common stock to add to its existing portfolio.
The Agreement paves the way for SmarTire to enter the commercial vehicle market in 2001 on both the original equipment and aftermarket levels.
Under the SmarTire / TRW alliance established in April 1998, SmarTire granted TRW an exclusive license to use SmarTire technology in tyre monitoring systems for passenger cars and light, medium and heavy duty trucks sold to original equipment manufacturers.
Now, in response to escalating demand for tyre monitoring systems by OEMs resulting from recently approved US legislation (the TREAD Act) requiring new motor vehicles to be equipped with a system that warns drivers of significantly under-inflated tyres starting in late 2003, TRW will be concentrating its efforts primarily on the passenger car and light truck markets.
In addition to servicing the needs of the North American and European passenger car and light truck aftermarkets, SmarTire is taking strategic steps to expand its product development and marketing activities to include the commercial vehicle market involving both original equipment manufacturers and aftermarket customers.
The US law, The Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, was introduced September 13, 2000 and passed Congress in less than a month. It enacts a number of new provisions applicable to automobile, tyre and automobile parts manufacturers.