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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
(Mark One)
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1999
OR
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____to ________
Commission file number 0-7336
RELM WIRELESS CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 04-2225121
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
7505 Technology Drive, West Melbourne, Florida 32904
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 984-1414
<PAGE>
Pursuant to Rule 12b-15 of the Securities and Exchange Act of 1934, as amended,
Relm Wireless Corporation hereby files this Amendment No. 1 on Form 10-K/A to
amend and supplement Part IV, Item 14 of its Annual Report on Form 10-K for the
year ending December 31, 1999. This Amendment No. 1 to the Registrant's Form
10-K/A is being filed to include complete copies of Exhibits 10(i), 10(k),
10(l), 10(m), and 27, which were inadvertently omitted from the Exhibits filed
by the registrant with the Form 10-K on March 30, 2000.
PART IV. Exhibits, Financial Statement, Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements: See index to the Consolidated Financial Statements on
page F-1 hereof.
2. Financial Statement Schedules: All schedules have been omitted because they
are inapplicable or not material, or the information called for thereby is
included in the Consolidated Financial Statements and notes thereto.
3. Exhibits: The exhibits listed below are filed as a part of, or incorporated
by reference into this report:
<TABLE>
<CAPTION>
Number Exhibit
------ -------
<S> <C>
3 (i) Articles of Incorporation **
3 (ii) By-Laws **
4 (ii) 8% Convertible Subordinate Promissory Note
10 (a) 1996 Stock Option Plan for Non-Employee Directors *
10 (b) 1997 Stock Option Plan **
10 (c) Loan and Security Agreement ****
10 (d) Workers Compensation Close Out Agreement ****
10 (e) Amendment to Security and Loan Agreement
10 (f) 2nd Amendment to Security and Loan Agreement
10 (g) 3rd Amendment to Security and Loan Agreement
10 (h) Simmonds Agreement
10 (i) Contract for Sale of West Melbourne Fl. Real Estate *****
10 (j) Sub Lease Agreement
10 (k) Uniden Asset Purchase Agreement *****
10 (l) OEM Uniden Manufacturing Agreement *****
10 (m) Uniden ESAS Technology Agreement *****
10 (n) Manufacturing Agreement
10 (o) Transaction Agreement for Real Estate Sale and Contract Manufacturing
21 Subsidiaries of Registrant ***
27 Financial Data Schedule *****
</TABLE>
* Incorporated by reference from the Adage, Inc. (predecessor to RELM
Wireless Corporation) report on form 10K for the year ended December 31,
1996.
** Incorporated by reference from the Company's report on form 10K for the
year ended December 31, 1997.
<PAGE>
*** Incorporated by reference from the Company's report on form 10K for the
year ended December 31, 1998.
**** Incorporated by reference from the Company's report on form 10Q quarter 1
for the year ended December 31, 1999.
***** Filed pursuant to Amendment #1 to Form 10K for the year ended December 31,
1999.
(b) No reports on Form 8-K have been filed during the period ended December
31, 1999 by the Company.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RELM WIRELESS CORPORATION
(Registrant)
Date: April , 2000 By:
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Richard K. Laird, President, Chief Financial
Officer
<PAGE>
INDEX
<TABLE>
<CAPTION>
Number Exhibit
------ -------
<S> <C>
3 (i) Articles of Incorporation **
3 (ii) By-Laws **
4 (ii) 8% Convertible Subordinate Promissory Note
10 (a) 1996 Stock Option Plan for Non-Employee Directors *
10 (b) 1997 Stock Option Plan **
10 (c) Loan and Security Agreement ****
10 (d) Workers Compensation Close Out Agreement ****
10 (e) Amendment to Security and Loan Agreement
10 (f) 2nd Amendment to Security and Loan Agreement
10 (g) 3rd Amendment to Security and Loan Agreement
10 (h) Simmonds Agreement
10 (i) Contract for Sale of West Melbourne Fl. Real Estate *****
10 (j) Sub Lease Agreement
10 (k) Uniden Asset Purchase Agreement *****
10 (l) OEM Uniden Manufacturing Agreement *****
10 (m) Uniden ESAS Technology Agreement *****
10 (n) Manufacturing Agreement
10 (o) Transaction Agreement for Real Estate Sale and Contract Manufacturing
21 Subsidiaries of Registrant ***
27 Financial Data Schedule *****
</TABLE>
* Incorporated by reference from the Adage, Inc. (predecessor to RELM
Wireless Corporation) report on form 10K for the year ended December 31,
1996.
** Incorporated by reference from the Company's report on form 10K for the
year ended December 31, 1997.
*** Incorporated by reference from the Company's report on form 10K for the
year ended December 31, 1998.
**** Incorporated by reference from the Company's report on form 10Q quarter 1
for the year ended December 31, 1999.
***** Filed pursuant to Amendment #1 to Form 10K for the year ended December 3,
1999.
EXCLUSIVE RIGHT OF SALE LISTING AGREEMENT
FLORIDA ASSOCIATION OF REALTORS(R)
This Exclusive Right of Sale Listing Agreement ("Agreement") is between
RELM WIRELESS CORPORATION / REGENCY COMMUNICATIONS, INC. ("Seller") and
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COLDWELL BANKER COMMERCIAL SUN LAND REALTY OF FL, INC. ("BROKER").
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1. AUTHORITY TO SELL PROPERTY: SELLER gives BROKER the EXCLUSIVE RIGHT TO SELL
the real and personal property (collectively "Property") described below, at the
price and terms described below, beginning the 25TH day of OCTOBER, 1999, and
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terminating at 11:59 p.m. the 25TH day of OCTOBER, 2000 ("Termination Date").
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Upon full execution of a contract for sale and purchase of the Property, all
rights and obligations of this Agreement will automatically extend through the
date of the actual closing of the sales contract. SELLER and BROKER acknowledge
that this Agreement does not guarantee a sale. This Property will be offered to
any person without regard to race, color, religion, sex, handicap, familial
status, national origin or any other factor protected by federal, state or local
law. SELLER certifies and represents that he/she/it is legally entitled to
convey the Property and all improvements.
<TABLE>
<S> <C>
2. DESCRIPTION OF PROPERTY:
(A) Real Property Street Address: 7505 TECHNOLOGY DRIVE, W. MELBOURNE, FL 32904
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REAL ESTATE BEING OFFERED AS SALE/LEASE BACK AT TERMS ACCEPTABLE TO SELLER/TENANT
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Legal Description: PART OF NW 1/4 AS DES. IN ORB 2287 PG 248
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TAX ID # 2736 36 00 0260.0 000.00 / / See Attachment
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(B) Personal Property, including appliances: NONE
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REAL ESTATE BEING OFFERED AS SALE/LEASE BACK AT TERMS ACCEPTABLE TO SELLER/TENANT
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/ / See Attachment
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(C) Occupancy: Property /X/ is / / is not currently occupied by a tenant. If occupied, the lease term expires LEASE BACK
</TABLE>
3. PRICE AND TERMS: The property is offered for sale on the following terms, or
on other terms acceptable to SELLER:
(A) PRICE: $5,600,000
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(B) FINANCING TERMS: /X/ Cash /X/ Conventional / / VA / / FHA / /Other
/ / SELLER Financing: SELLER will hold a purchase money mortgage in the amount
OF $___________________ with the following terms:_______________________________
________________________________________________________________________________
/ / Assumption OF Existing Mortgage: BUYER may assume existing mortgage for
$___________________ plus an assumption FEE of $_____________________. The
mortgage is for a term of ______________ years beginning in _____________, at an
interest rate of _______% / / fixed / / variable (describe) ____________________
________________________________________________________________________________
Lender approval of assumption is required is not required unknown. Notice to
SELLER: You may remain liable for an assumed mortgage for a number of years
after the Property is sold. Check with your lender to determine the extent of
your liability. SELLER will ensure that all mortgage payments and required
escrow deposits are current at the time of closing and will convey the escrow
deposit to the buyer at closing.
(C) SELLER EXPENSES: SELLER will pay mortgage discount or other closing costs
not to exceed _______________% of the purchase price; and any other expenses
Seller agrees to pay in connection with a transaction.
4. BROKER OBLIGATIONS AND AUTHORITY: BROKER agrees to make diligent and
continued efforts to sell the Property until a sales contract is pending on the
Property. SELLER authorizes BROKER to:
(A) Advertise the Property as BROKER deems advisable in newspapers,
publications, computer networks and other media; place appropriate transaction
signs on the Property, including "For Sale" signs and "Sold" signs (once SELLER
signs a sales contract); and use SELLER'S name in connection with marketing or
advertising the Property;
(B) Obtain information relating to the present mortgage(s) on the Property.
(C) Place the Property in a multiple listing service (MLS). SELLER authorizes
BROKER to report to the MLS/Association of Realtors(R) this listing information
and price, terms and financing information on any resulting sale. SELLER
authorizes BROKER, the MLS and/or Association of Realtors(R) to use, license or
sell the active listing and sold data.
(D) (Check if applicable) / / Use a lock box system to show and access the
Property. A lock box does not ensure the Property's security; SELLER is advised
to secure or remove valuables. SELLER agrees that the lock box is for SELLER'S
benefit and releases BROKER, persons working through BROKER and BROKER'S local
Realtor Board / Association from all liability and responsibility in connection
with any loss that occurs. / / Withhold verbal offers. / / Withhold all offers
once SELLER accepts a sales contract for the Property.
(E) Act as a single agent of SELLER with consent to transition to transaction
broker.
ERS-8tn Rev. 10/99(C)1999 Florida Association of REALTORS(R) All Rights
Reserved PAGE 1 OF 4
This form is licensed for use with FORMULATOR(R) Forms Software by ISG
McAllister Publishing, Inc. 800-336-1027
<PAGE>
5. SELLER OBLIGATIONS: In consideration of BROKER'S obligations, SELLER agrees
to:
(A) Cooperate with BROKER in carrying out the purpose of this Agreement,
including referring immediately to BROKER all inquiries regarding the Property's
transfer, whether by purchase or any other means of transfer.
(B) Provide BROKER with keys to the Property and make the Property available for
BROKER to show during reasonable times.
(C) Inform BROKER prior to leasing, mortgaging or otherwise encumbering the
Property.
(D) Indemnify BROKER and hold BROKER harmless from losses, damages, costs and
expenses of any nature, including attorney's fees, and from liability to any
person, that BROKER incurs because of (1) SELLER'S negligence, representations,
misrepresentations, actions or inactions, (2) the use of a lock box, (3) the
existence of undisclosed material facts about the Property, or (4) a court or
arbitration decision that a broker who was not compensated in connection with a
transaction is entitled to compensation from BROKER. This clause will survive
BROKER'S performance and the transfer of title.
(E) To perform any act reasonably necessary to comply with FIRPTA (internal
Revenue Code Section 1445).
(F) Make all legally required disclosures, including all facts that materially
affect the Property's value and are not readily observable or known by the
buyer. SELLER represents there are no material facts (building code violations,
pending code citations,
unobservable defects, etc.) other than the following: NONE
----
SELLER will immediately inform BROKER of any material facts that arise after
signing this Agreement.
(G) Consult appropriate professionals for related legal, tax, property
condition, environmental, foreign reporting requirements and other specialized
advice.
6. COMPENSATION: SELLER will compensate BROKER as specified below for procuring
a buyer who is ready, willing and able to purchase the Property or any interest
in the Property on the terms of this Agreement or on any other terms acceptable
to SELLER. SELLER will pay BROKER as follows (plus applicable sales tax):
(A) 4% of the total purchase price OR $____________________, no later than the
--
date of closing specified in the sales contract. However, closing is not a
prerequisite for BROKER'S FEE being earned.
(B) 50% ($ or %) of the consideration paid for an option, at the time an option
is created. If the option is exercised, SELLER will pay BROKER the paragraph
6(a) fee, less the amount BROKER received under this subparagraph.
(C) N/A ($ or %) of gross lease value as a leasing fee, on the date SELLER
enters into a lease or agreement to lease, whichever is soonest. This fee is not
due if the Property is or becomes the subject of a contract granting an
exclusive right to lease the Property.
(D) BROKER'S fee is due in the following circumstances: (1) If any interest in
the Property is transferred, whether by sale, lease, exchange, governmental
action, bankruptcy or any other means of transfer, regardless of whether the
buyer is secured by BROKER, SELLER or any other person. (2) If SELLER refuses or
fails to sign an offer at the price and terms stated in this Agreement, defaults
on an executed sales contract or agrees with a buyer to cancel an executed sales
contract. (3) If, within 120 days after Termination Date ("Protection Period"),
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SELLER transfers or contracts to transfer the Property or any interest in the
Property to any prospects with whom SELLER, BROKER or any real estate licensee
communicated regarding the Property prior to Termination Date. However, no fee
will be due BROKER if the Property is relisted after Termination Date and sold
through another broker.
(E) Retained Deposits: As consideration for BROKER'S services, BROKER is
entitled to receive 25% of all deposits that SELLER retains as liquidated
---
damages for a buyer's default in a transaction, not to exceed the paragraph 6(a)
fee.
7. COOPERATION WITH OTHER BROKERS: BROKER'S office policy is to cooperate with
all other brokers except when not in SELLER'S best interest, and to offer
compensation to: /X/ Buyer's agents, who represent the interest of the buyer and
not the interest of SELLER in a transaction, even if compensated by SELLER or
BROKER. /X/ Nonrepresentatives /X/ Transaction brokers. / / None of the above
(if this box is checked, the Property cannot be placed in the MLS). / /
Subagents (if BROKER is acting as a single agent).
ERS-8tn Rev. 10/99(C)1999 Florida Association of REALTORS(R) All Rights
Reserved PAGE 2 OF 4
This form is licensed for use with FORMULATOR(R) Forms Software by ISG
McAllister Publishing, Inc. 800-336-1027
<PAGE>
8. BROKERAGE RELATIONSHIP:
IMPORTANT NOTICE
FLORIDA LICENSEES PROVIDE THIS NOTICE TO ALL POTENTIAL SELLERS AND BUYERS OF
REAL ESTATE.
You should not assume that any real estate broker or salesperson represents you
unless you agree to engage a real estate licensee in an authorized brokerage
relationship, either as a single agent or as a transaction broker. You are
advised not to disclose any information you want to be held in confidence until
you make a decision on representation.
SINGLE AGENT NOTICE
FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS SINGLE AGENTS
DISCLOSE TO BUYERS AND SELLERS THEIR DUTIES.
AS a single agent, COLDWELL BANKER COMMERCIAL SUN LAND REALTY OF FLORIDA, INC.
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and its associates owe to you the following duties:
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1. Dealing honestly and fairly;
2. Loyalty;
3. Confidentiality;
4. Obedience;
5. Full disclosure;
6. Accounting for all funds;
7. Skill, care, and diligence in the transaction;
8. Presenting all offers and counteroffers in a timely manner, unless a
party has previously directed the licensee otherwise in writing', and
9. Disclosing all known facts that materially affect the value of
residential real property and are not readily observable.
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DATE SIGNATURE SIGNATURE
ERS-8tn Rev. 10/99(C)1999 Florida Association of REALTORS(R) All Rights
Reserved PAGE 3 OF 4
This form is licensed for use with FORMULATOR(R) Forms Software by ISG
McAllister Publishing, Inc. 800-336-1027
<PAGE>
CONSENT TO TRANSITION TO TRANSACTION BROKER
IMPORTANT NOTICE
FLORIDA LAW ALLOWS REAL ESTATE LICENSEES WHO REPRESENT A BUYER OR SELLER AS A
SINGLE AGENT TO CHANGE FROM A SINGLE AGENT RELATIONSHIP TO A TRANSACTION
BROKERAGE RELATIONSHIP IN ORDER FOR THE LICENSEE TO ASSIST BOTH PARTIES IN A
REAL ESTATE TRANSACTION BY PROVIDING A LIMITED FORM OF REPRESENTATION TO BOTH
THE BUYER AND THE SELLER. THIS CHANGE IN RELATIONSHIP CANNOT OCCUR WITHOUT YOUR
PRIOR WRITTEN CONSENT.
TRANSACTION BROKER NOTICE
FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS TRANSACTION BROKERS
DISCLOSE TO BUYERS AND SELLERS THEIR ROLE AND DUTIES IN PROVIDING A LIMITED FORM
OF REPRESENTATION.
As a transaction broker, _______________________________________________________
and its associates, provides to you a limited form of representation that
includes the following duties:
1. Dealing honestly and fairly;
2. Accounting for all funds;
3. Using skill, care, and diligence in the transaction;
4. Disclosing all known facts that materially affect the value of
residential real property and are not readily observable to the buyer;
5. Presenting all offers and counteroffers in a timely manner, unless a
party has previously directed the licensee otherwise in writing;
6. Limited confidentiality, unless waived in writing by a party. This
limited confidentiality will prevent disclosure that the seller will accept a
price less than the asking or listed price, that the buyer will pay a price
greater than the price submitted in a written offer, of the motivation of any
party for selling or buying property, that a seller or buyer will agree to
financing terms other than those offered, or of any other information requested
by a party to remain confidential; and
7. Any additional duties that are entered into by this or by separate
written agreement. Limited representation means that a buyer or seller is not
responsible for the acts of the licensee. Additionally, parties are giving up
their rights to the undivided loyalty of the licensee. This aspect of limited
representation allows a licensee to facilitate a real estate transaction by
assisting both the buyer and the seller, but a licensee will not work to
represent one party to the detriment of the other party when acting as a
transaction broker to both parties.
407-953-7894 Facsimile: 407-984-0160 W. MELBOURNE, FL 32904
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AUTHORIZED LISTING ASSOCIATE OR BROKER:
Date:
The Florida Association of REALTORS makes no representation as to the legal
validity or adequacy of any Provision of this form in any specific transaction.
This standardized form should not be used in complex transactions or with
extensive riders or additions. This form is available for use by the entire real
estate industry and is not intended to identify the user as a REALTOR. REALTOR
is a registered collective membership mark which may be used only by real estate
licensees who are members of the NATIONAL ASSOCIATION OF REALTORS and who
subscribe to its Code of Ethics. The copyright laws of the United States (17
U.S. Code) forbid the unauthorized reproduction of this form by any means
including facsimile or computerized forms.
I agree that my agent may assume the role and duties of a transaction broker.
(must be initialed or signed)
ERS-8tn Rev. 10/99(C)1999 Florida Association of REALTORS(R) All Rights
Reserved PAGE 4 OF 4
This form is licensed for use with FORMULATOR(R) Forms Software by ISG
McAllister Publishing, Inc. 800-336-1027
<PAGE>
9. Either party may terminate this agreement without penalty upon giving 90 days
written notice of termination.
10. DISPUTE RESOLUTION. This Agreement will be construed under Florida law. All
controversies, claims and other matters in question between the parties arising
out of or relating to this Agreement or the breach thereof will be settled by
first attempting mediation under the rules of the American Mediation Association
or other mediator agreed upon by the parties. If litigation arises out of this
Agreement, the prevailing party will be entitled to recover reasonable
attorney's fees and costs, unless the parties agree that disputes will be
settled by arbitration as follows:
ARBITRATION: By initialing in the space provided, SELLER ( ) ( ), Listing
Associate ( ) and Listing Broker ( )agree that disputes not resolved by
mediation will be settled by neutral binding arbitration in the county in which
the Property is located in accordance with the rules of the American Arbitration
Association or other arbitrator agreed upon by the parties. Each party to any
arbitration or litigation (including appeals and interpleaders) will pay its own
fees, costs and expenses, including attorney's fees, and will equally split the
arbitrators' fees and administrative fees of arbitration.
11. MISCELLANEOUS: This Agreement is binding on BROKER'S and SELLER'S heirs,
personal representatives, administrators, successors and assigns. BROKER may
assign this Agreement to another listing office. Signatures, initials and
modifications communicated by facsimile will be considered as originals. The
term "buyer" as used in this Agreement includes buyers, tenants, exchangers,
optionees and other categories of potential or actual transferees.
Date: Seller:
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Home Telephone: Work Telephone:
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Address: RELM WIRELESS CORP. / 7505 TECHNOLOGY DRIVE
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Date: Seller: Tax ID No:
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Home Telephone: Work Telephone:
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<TABLE>
MICHAEL E. DREYER, CCIM
<S> <C>
Brokerage Firm Name: COLDWELL BANKER COMMERCIAL SUN LAND REALTY OF FL Telephone: 407-751-0700
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Address: 3150 N. WICKHAM ROAD, SUITE 1 MELBOURNE, FL 32935
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</TABLE>
ASSET PURCHASE AGREEMENT
DATED MARCH 13, 2000
AMONG
UNIDEN AMERICA CORPORATION,
RELM WIRELESS CORPORATION
AND
SIMMONDS CAPITAL LIMITED
COVERING THE PURCHASE
OF SPECIFIED ASSETS OF
UNIDEN AMERICA CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. GENERAL DEFINITIONS; INTERPRETATION
1.1 Definitions
1.2 Reference to this Agreement; Interpretation
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE
2.1 Purchase and Sale
2.2 Delivery of Assets and Transfer Documents; Restriction on Disposition of Tooling Assets and
Tooling Asset Provisions
2.3 Ancillary Documents
2.4 Closing; Closing Date
3. OBLIGATIONS
3.1 Assumed Obligations
3.2 Retained Obligations
4. PURCHASE PRICE
4.1 Price and Payment; Earnest Money
4.2 Transfer Taxes
4.3 Inventory Adjustment
5. REPRESENTATIONS AND WARRANTIES OF SELLER
5.1 Incorporation
5.2 Authorization
5.3 Brokers and Finders
5.4 Asserted Warranty Claims
5.5 Legal Proceedings
5.6 Title, No Liens
5.7 Effect of Agreement
5.8 Compliance with Laws
5.9 Location of Assets
5.10 Intellectual Property Claims
5.11 Tooling Assets
6. REPRESENTATIONS AND WARRANTIES OF BUYER AND GUARANTOR
6.1 Incorporation
6.2 Authorization
6.3 Article 9 Performance Obligations
6.4 Brokers and Finders
6.5 Buyer Insurance
6.6 Effect of Agreement
6.7 Compliance with Laws
</TABLE>
<TABLE>
<S> <C>
7. SURVIVAL OF INDEMNIFICATIONS, GUARANTEES, COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES
8. DUE DILIGENCE
8.1 Due Diligence Period Ended
8.2 No Due Diligence Representations
9. POST-CLOSING COVENANTS AND AGREEMENTS
9.1 Buyer Facilities
9.2 Buyer Continuing Service Obligation
9.3 Transition Support
10. BUYER INDEMNITY
10.1 Indemnity
10.2 Notice of Claim
10.3 Right of Buyer to Participate in Defense
10.4 Payment
11. SELLER INDEMNITY
11.1 Indemnity
11.2 Notice of Claim
11.3 Right of Seller to Participate in Defense
11.4 Payment
12. CUSTOMER LIST
13. GUARANTY
14. EXPENSES
15. FURTHER ACTIONS
16. NOTICES
17. GENERAL PROVISIONS
17.1 Governing Law; Interpretation; Section Headings
17.2 Severability
17.3 Entire Agreement
17.4 Binding Effect
17.5 Assignment
</TABLE>
ii
<PAGE>
17.6 Amendment; Waiver
17.7 Gender; Numbers
17.8 Counterparts
17.9 Telecopy Execution and Delivery
17.10 No Partnership
17.11 Drafting Conventions
17.12 Dispute Resolution
17.13 Submission to Jurisdiction
17.14 Consequential Damages
iii
<PAGE>
SCHEDULES
SCHEDULE 2.1A
INVENTORY ASSETS
SCHEDULE 2.1B
TEST EQUIPMENT
SCHEDULE 2.1C
TOOLING ASSETS
SCHEDULE 2.1D
CONTRACTS
SCHEDULE 2.1E
CERTAIN EXCLUDED ASSETS
SCHEDULE 3.1
CERTAIN ASSUMED OBLIGATIONS
SCHEDULE 3.2
RETAINED OBLIGATIONS
SCHEDULE 4.1
ALLOCATION
SCHEDULE 5.4
WARRANTY CLAIMS
SCHEDULE 5.6
LEGAL PROCEEDINGS
SCHEDULE 5.7
CONSENTS
iv
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
March 13, 2000, between UNIDEN AMERICA CORPORATION, a Delaware, United States,
corporation ("Seller"), RELM WIRELESS CORPORATION, a Nevada corporation
("Buyer"), and SIMMONDS CAPITAL LIMITED, an Ontario, Canada, corporation
("Guarantor").
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, Seller is the owner of the Assets, which are certain, but not all,
of the assets currently used in Seller's PRC business, which consists of
Seller's specialized mobile radio and land mobile radio businesses (the
"Business");
WHEREAS, Seller desires to sell the Assets to Buyer and Buyer desires to
acquire the Assets from Seller;
WHEREAS, Guarantor wishes to guarantee Buyer's obligations under this
Agreement;
WHEREAS, the parties desire to set forth certain representations,
warranties and covenants made by each to the other parties as an inducement to
the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement and to set forth certain additional
agreements related to the transactions contemplated by this Agreement;
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. GENERAL DEFINITIONS; INTERPRETATION. For purposes of this Agreement, the
following terms have the meanings set forth below:
1.1 Definitions.
"Abandons" or "Abandonment" means if Buyer (i) does not place an Order (as
defined in the OEM Agreement) for at least 5,000 units of Product (as defined in
the OEM Agreement) per month for a period of four consecutive months during the
term of the OEM Agreement (as it may be extended); or (ii) does not sell to a
third-party any unit of any Product (as defined in the OEM Agreement) for a
period of three consecutive months during the term of the OEM Agreement (as it
may be extended); provided, however, that Abandonment shall not be deemed to
have occurred if subsections (i) or (ii) have not been met as a result of the
lack of market demand for Product (as defined in the OEM Agreement).
-1-
<PAGE>
"Accounts Receivable Agreement" means the Accounts Receivable Agreement
entered into concurrently with the execution of this Agreement between Seller
and Guarantor.
"Accounts Receivable Bill of Sale" means the Bill of Sale, Assignment and
Assumption Agreement related to the Accounts Receivable Agreement.
"Affiliate" of any Person means any Person Controlling, Controlled by or
under common Control with such Person.
"Allowance" has the meaning set forth in Section 3.1(a).
"Ancillary Documents" means the IP Licenses, the Guaranty, the Bill of
Sale, the OEM Agreement and the Non-Disclosure Agreements.
"Assets" means the Inventory Assets, the Test Equipment, the Tooling Assets
and all of the right, title and interest of Seller and its Affiliates in the
Contracts.
"Assumed Obligations" has the meaning set forth in Section 3.1.
"Balance Payment" has the meaning set forth in Section 4.1.
"Bill of Sale" means the Bill of Sale, Assignment and Assumption Agreement
executed in connection with the transfer of the Assets and the assumption of the
Assumed Liabilities.
"Business" has the meaning set forth in the Recitals.
"Closing" has the meaning set forth in Section 2.4.
"Closing Date" has the meaning set forth in Section 2.4.
"Contracts" means the contracts to which Seller or an Affiliate of Seller
is a party listed on Schedule 2.1D.
"Control" and all derivations thereof means the ability to either (i) vote
(or direct the vote of) 50% or more of the voting interests in any Person or
(ii) direct the affairs of another, whether through voting power, contract or
otherwise.
"Delivers," for purposes of the definition of Inventory Assets, Tooling
Assets and Test Equipment, means, (i) with respect to Assets that are in
Seller's possession as of the date of this Agreement, that such Asset has been
physically delivered to Buyer, and, (ii) with respect to Assets that are not in
Seller's possession as of the date of this Agreement, that such Asset exists and
is located at the vendor identified for such Asset on Schedule 2.1C and could
have been physically delivered by Seller as of the date of this Agreement.
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"Earnest Money" means the $500,000.00 previously delivered by Guarantor to
Seller.
"ESAS" means Seller's proprietary land mobile radio trunking protocol. ESAS
is a registered trademark of Seller and is used to indicate that Seller is the
source for ESAS protocol.
"Existing IP Claims" has the meaning set forth on Schedule 3.2 .
"Guaranty" means the Guaranty and Joint and Several Liability Agreement
executed by Guarantor concurrently with the execution of this Agreement.
"Governmental Authority" means any and all foreign, federal, state or local
governments, governmental institutions, public authorities and governmental
entities of any nature whatsoever, and any subdivisions or instrumentalities
thereof, including departments, boards, bureaus, commissions, agencies, courts,
administrations and panels, and any divisions or instrumentalities thereof,
whether permanent or ad hoc and whether now or hereafter constituted or
existing.
"Governmental Requirement" means any and all laws (including applicable
common law principles), statutes, ordinances, codes, rules, regulations,
interpretations, guidelines, directions, orders, judgments, writs, injunctions,
decrees, decisions or similar items or pronouncements, promulgated, issued,
passed or set forth by any Governmental Authority.
"Inventory Assets" means the PRC system inventory of Seller that is both
(i) listed on Schedule 2.1A and (ii) Delivered to Buyer. Schedule 2.1A may
include inventory that Seller does not own that does not constitute "Inventory
Assets."
"IP Licenses" means the following agreements entered into between Seller or
an Affiliate of Seller and Buyer concurrently with the execution of this
Agreement: an Assignment of Certain Trademark Rights, two Trademark License
Agreements related to the trademark "Uniden" between Seller and Buyer, a
Trademark License Agreement related to the trademark "Uniden" between an
Affiliate of Seller and Buyer, a Trademark License Agreement related to the
trademark "ESAS" and a Technology License Agreement.
"Knowledge," as with respect to Seller, means knowledge of a vice president
or the president of Seller.
"Non-Disclosure Agreement" means the non-disclosure agreements executed by
the parties simultaneously with the execution of this Agreement.
"OEM Agreement" means the OEM Manufacturing Contract entered into
concurrently with the execution of this Agreement between Buyer and an Affiliate
of Seller.
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"Person" means any natural person, any Governmental Authority and any
entity, including corporations, partnerships, joint ventures, limited liability
companies, joint stock companies, trusts, estates, companies and associations,
whether organized for profit or otherwise.
"PRC Products" means all conventional UHF, conventional VHF, 800 MHZ and
ESAS systems manufactured, owned or sold by Seller or its Affiliates and all
other PRC product that Seller or its Affiliates have manufactured, owned or
sold.
"Retail Warranty" means any express or implied retail, consumer or end-user
warranty, including any consumer or end-user warranty included in any package in
which the PRC Product is or has been delivered to consumers or end users.
"Retained Obligations" has the meaning set forth in Section 3.2.
"Schedule" means the Schedules to this Agreement, unless otherwise stated.
The Schedules to this Agreement may be attached to this Agreement or may be set
forth in a separate document denoted as the Schedules to this Agreement, or
both.
"Section" means the Section of this Agreement, unless otherwise stated.
"Test Equipment" means the test equipment that is both (i) listed on
Schedule 2.1B and (ii) Delivered to Buyer. Schedule 2.1B may include test
equipment that Seller does not own that does not constitute "Test Equipment."
"Tooling Assets" means the tooling assets that are both (i) listed on
Schedule 2.1C and (ii) Delivered to Buyer. Schedule 2.1C may include tooling
assets that Seller does not own that do not constitute "Tooling Assets."
"Transition Costs" means all costs Seller or any of its Affiliates incur in
connection with Seller's provision of Transition Support or performance of
Seller's other obligations under Section 9.3; provided, however, that Seller's
Transition Costs will not include its own costs incurred in connection with the
Closing. Without limiting the types of costs that may constitute Transition
Costs, costs related to the following will constitute Transition Costs: packing
and freight, wages, travel and expense, communications, supplies, tax,
insurance, facility and equipment repair and maintenance, rent, lease,
professional services, overhead allocations and support allocations from Seller
or collateral divisions of Seller or its Affiliates and other incremental costs
Seller or its Affiliates incur in connection with the provision of Transition
Support.
"Transition Support" means transition support provided by Seller
related to the Inventory Assets and all other support, services or aid that
Seller provides to Buyer in connection with the Assets, including transition
support related to the Inventory Assets that pertains to sales, sales
administration, technical support, warehousing, traffic or shipping. Seller and
Buyer may agree that
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Transition Support includes other services; provided, however, that Transition
Support will not include repair or service of products.
"Uniden" is a registered trademark of Seller.
"Year 2000 Compliance" means that software and computer systems in PRC
Products will not fail as a result of the advent of the year 2000.
1.2 Reference to this Agreement; Interpretation. Numbered or lettered
articles, sections and subsections herein contained refer to articles, sections
and subsections of this Agreement unless otherwise expressly stated. Unless the
context indicates otherwise, the words "herein," "hereof," "hereunder,"
"hereby," "this Agreement" and other similar references shall be construed to
mean and include this Agreement, the Exhibits and Schedules referenced herein
and the Ancillary Documents, and all amendments thereof and supplements thereto
unless the context shall clearly indicate or require otherwise. The use of the
words "include," "including" and derivations thereof in this Agreement shall be
deemed to have the phrase "without limitation" attached thereto unless otherwise
expressly stated. Any reference in this Agreement to statutes or laws shall
include all amendments, modifications or replacements of the specific section
and provisions concerned. References to $ or dollars are to U.S. dollars.
2. PURCHASE AND SALE OF THE ASSETS; CLOSING DATE.
2.1 Purchase and Sale.
(a) Subject to the terms and conditions of this Agreement and pursuant
to the Bill of Sale, Seller hereby sells, assigns, transfers and delivers
to Buyer the Assets. Any assets owned by Seller or its Affiliates that are
not described on Schedule 2.1A-D (or assets described on Schedule 2.1A-D
that do not constitute Assets) (such assets referred to in both instances
as the "Excluded Assets") do not constitute Assets and are not being
transferred under this Agreement, although some or all of the Excluded
Assets may have been used in or may relate to the Business. The Excluded
Assets include the assets described on Schedule 2.1E. The transfer of the
Tooling Assets is subject to Section 2.2(b)-(e) and the OEM Agreement.
(b) Subject to the terms and conditions of this Agreement and pursuant
to the Bill of Sale, Assignment and Assumption Agreement attached as
Exhibit 2.1 (the "Bill of Sale"), Buyer hereby purchases from Seller the
Assets in consideration for the Purchase Price (as defined in Section 4.1),
payable as set forth in Section 4.1, the assumption of the Assumed
Obligations and performance of Buyer's obligations under this Agreement.
(c) SUBJECT TO ARTICLE 5 AND SECTION 11.1(c), NO RETAIL WARRANTY (AS
DEFINED) OR OTHER WARRANTY, EXPRESS OR IMPLIED, WILL APPLY TO THE ASSETS.
SELLER MAKES NO WARRANTY OF
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MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE IN RESPECT OF THE
ASSETS, AND THE SAME ARE SOLD IN "AS IS, WHERE IS" CONDITION, WITH ALL
FAULTS. BY EXECUTION OF THIS AGREEMENT, BUYER AFFIRMS THAT IT HAS NOT
RELIED ON SELLER'S SKILL OR JUDGMENT TO SELECT OR FURNISH THE ASSETS FOR
ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE ASSETS
ARE FIT FOR ANY PARTICULAR PURPOSE, AND THAT THE ASSETS ARE BEING SOLD TO
BUYER WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, EXCEPT AS MAY BE OTHERWISE PROVIDED IN ARTICLE 5 OR SECTION
11.1(c).
(d) For avoidance of doubt, as of the date of this Agreement, Buyer
assumes all risk of loss and liability related to Assets, including all
Inventory Assets being shipped, warehoused or in any way handled by Seller
in connection with Seller's provision of Transition Support.
(e) Seller makes no representation or warranty as to the quantity of
the Inventory Assets.
2.2 Delivery of Assets and Transfer Documents; Restriction on Disposition
of Tooling Assets and Tooling Asset Provisions.
(a) Seller will take all reasonable steps necessary to put Buyer in
possession of the Assets and, simultaneously with the execution of this
Agreement, is delivering to Buyer a duly executed Bill of Sale covering the
Assets and the Assumed Obligations. Buyer is also executing the Bill of
Sale.
(b) The transfer of the Tooling Assets does not include any
intellectual property rights other than those granted in the IP Licenses.
(c) (i) Except as provided in this Section 2.2(c), Buyer may not
transfer, sell, assign or otherwise dispose of the Tooling Assets. If Buyer
decides to transfer, sell, assign or otherwise dispose of any Tooling
Asset, Buyer shall give Seller notice (the "Offering Notice") of Buyer's
intention to do so. The Offering Notice shall set forth in reasonable
detail the terms and provisions of the proposed disposition, including (x)
the Tooling Assets to be disposed of (the "Offered Interest") and (y) the
identity and address of the third-party transferee to whom Buyer proposes
to dispose of the Offered Interest.
(ii) Seller shall have the option, but not the obligation, for
thirty (30) days following receipt of the Offering Notice, to purchase all,
but not less than all, of the Offered Interest, free and clear of all
liens, claims and encumbrances of any nature, at a price of $1.00 (subject
to Section 2.2(c)(v)).
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(iii) The closing of the purchase of the Offered Interest shall
be within ninety (90) days from the date of the Offering Notice.
(iv) If Seller does not elect to purchase all of the Offered
Interest during the option period, the option shall be deemed to be lapsed
without exercise, and Buyer shall be permitted, at any time or times
within, but not after, thirty (30) days after the expiration of the option
periods, to dispose of the Offered Interest that was the subject of the
Offering Notice; provided, however, that no such disposition shall be made
to any third-party transferee other than as specified in the Offering
Notice.
(v) In no event will Seller be required to pay more than an
aggregate of $1.00 for the Tooling Assets. Following the first purchase of
Tooling Assets by Seller under this Section 2.2(c), subsequent prices will
be $0.00, and not $1.00.
(d) If Buyer Abandons the Tooling Assets, Seller will have the right
to purchase all of the Tooling Assets from Buyer, free and clear of all
liens, claims and encumbrances of any nature, for a purchase price of
$1.00, by giving Buyer notice of Seller's intention to purchase the Tooling
Assets.
(e) After the date of this Agreement, all risk of loss of the Tooling
Assets will pass to Buyer.
2.3 Ancillary Documents.
(a) Simultaneously with the execution of this Agreement, Seller or an
Affiliate of Seller and Buyer are entering into IP Licenses. Buyer
acknowledges and agrees that Buyer is acquiring no intellectual property
rights under this Agreement other than the intellectual property rights
described and transferred in the IP Licenses.
(b) Simultaneously with the execution and delivery of this Agreement,
an Affiliate of Seller and Buyer are entering into the OEM Manufacturing
Agreement.
(c) Simultaneously with the execution and delivery of this Agreement,
Guarantor is executing and delivering to Seller the Guaranty.
(d) Simultaneously with the execution and delivery of this Agreement,
the parties are entering into the Nondisclosure Agreements.
(e) Simultaneously with the execution of this Agreement, Buyer shall
deliver a certificate that the Inventory Assets are being purchased by
Buyer for resale.
2.4 Closing; Closing Date. Subject to the terms and conditions of this
Agreement, the consummation of the transactions referenced above will take place
(the "Closing") on the date of this Agreement at the offices of Fulbright &
Jaworski L.L.P. at 2200 Ross Avenue, Ste. 2800, Dallas, Texas,
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or at such other time, date and place as Buyer and Seller designate in writing.
The date of the Closing is referred to herein as the "Closing Date."
3. OBLIGATIONS.
3.1 Assumed Obligations.
(a) Pursuant to the Bill of Sale, Buyer hereby assumes and agrees to
discharge timely the obligations listed on Schedule 3.1 (collectively, the
"Assumed Obligations"). In consideration of Buyer's assumption of the
Assumed Obligations, the Purchase Price will be reduced by an amount equal
to $350,000.00 (the "Allowance"), as provided in Article 4.
(b) The Assumed Obligations do not include the Retained Obligations.
3.2 Retained Obligations. Buyer is not assuming or becoming liable for, and
Seller will retain, pay, perform and discharge, the retained obligations set
forth on Schedule 3.2 (the "Retained Obligations").
4. PURCHASE PRICE.
4.1 Price and Payment; Earnest Money.
(a) In addition to Buyer's assumption of the Assumed Obligations, the
aggregate consideration for the Assets is $2,213,996.00, less the Allowance
(after this adjustment, the "Purchase Price").
(b) The Purchase Price is payable to Seller as follows:
(i) Upon execution and delivery of this Agreement, the Earnest Money
will become completely non-refundable and Guarantor will no
longer have any rights to the return of the Earnest Money. Buyer
acknowledges Buyer has no rights in the Earnest Money.
(ii) Simultaneously with the execution and delivery of this Agreement,
Buyer is paying Seller $1,363,996.00 by delivery of a bank
certified or cashiers check or by wire transfer (the "Closing
Payment").
(c) The Purchase Price is allocated among the Assets as set forth on
Schedule 4.1.
4.2 Transfer Taxes. Buyer will be responsible for paying all sales, use,
transfer or other similar tax, imposed as a result of the consummation of the
transactions contemplated by this Agreement. Buyer agrees to pay and discharge,
and to indemnify Seller against, and protect, save
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and hold Seller harmless from, any liability, obligation, claim, assessment or
deficiency (whether or not ultimately successful) for any and all sales, use,
transfer or other similar taxes (and any and all interest, penalties and
additions to related taxes and fines) resulting or arising from or incurred in
connection with the consummation of the transactions contemplated by this
Agreement.
4.3 Inventory Adjustment.
(a) If the Closing Inventory Value (as defined in Section 4.3(b)) is
greater or less than $3,680,762.00, a post-closing payment under this
Section 4.3 will be made. No payment will be made unless the variance
between the Closing Inventory Value and $3,680,762.00 exceeds $100,000.00.
If the shortage or surplus exceeds $100,000.00, Seller will pay Buyer or
Buyer will pay Seller, as appropriate, the amount that such shortage or
excess exceeds $100,000.00.
(b) For purposes of this Section 4.3, the "Closing Inventory Value"
means the value of all PRC Product inventory, as shown on the books of
Seller (or as would have been shown had such inventory been shown on such
records), on the date(s) such PRC Product inventory is loaded on to a
carrier's equipment in Fort Worth, Texas, for delivery to Buyer pursuant to
this Agreement. The Closing Inventory Value will be the sum of the value of
all PRC Product inventory loaded for delivery to Buyer, as such values are
shown on the records of Seller (or as would have been shown had such
inventory been shown on such records). A representative of Seller and Buyer
will be present to monitor the loading of such inventory and the
calculation of the Closing Inventory Value.
(c) The determination under this Section 4.3 will be made within 10
days of the final shipment of the Inventory Assets.
(d) To the extent Buyer owes Seller or Seller owes Buyer any amount
under this Section 4.3, such payment will be made by delivery, within ten
(10) days of the adjustment contemplated by this Section 4.3, of a bank
certified or cashier's check or by wire transfer.
5. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants
to Buyer as follows:
5.1 Incorporation. Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
5.2 Authorization. Seller has full legal right, power and authority to
enter into and deliver this Agreement (and the Ancillary Documents to which it
is a party) and to consummate the transactions set forth in this Agreement (and
the Ancillary Documents to which it is a party) and to perform all the terms and
conditions of this Agreement (and the Ancillary Documents to which Seller is a
party) to be performed by Seller. The execution and delivery of this Agreement
(and the Ancillary Documents to which Seller is a party) by Seller and the
performance by Seller of the transactions contemplated in this Agreement (and
the Ancillary Documents to which it is a party)
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have been duly and validly authorized by all requisite corporate action of
Seller. This Agreement (and the Ancillary Documents to which Seller is a party)
has been duly and validly executed and delivered by Seller and, assuming due
execution and delivery by Buyer and Guarantor, are a legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with the terms
hereof and thereof, except as limited by applicable bankruptcy, moratorium,
insolvency or other similar laws affecting generally the rights of creditors or
by principles of equity.
5.3 Brokers and Finders. No broker or finder has acted for Seller in
connection with this Agreement or the transactions contemplated by this
Agreement and no broker or finder is entitled to any brokerage or finder's fee
or to any commission in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Seller.
5.4 Asserted Warranty Claims. To Seller's knowledge, Schedule 5.4 lists all
valid product warranty claims for PRC Product that Seller has received in
writing from PRC Product customers.
5.5 Legal Proceedings. Schedule 5.5 lists all pending litigation to which
Seller is a party relating to the Assets or the Business and all litigation
that, to Seller's knowledge, is threatened against Seller relating to the Assets
or the Business.
5.6 Title, No Liens. Seller has good and valid title to the Assets
transferred hereunder, free and clear of any liens, claims or encumbrances of
any kind.
5.7 Effect of Agreement. The execution and delivery of this Agreement (and
the Ancillary Documents) by Seller and the consummation of the transactions
contemplated hereby (and by the Ancillary Documents) by Seller will not (i)
result in any breach of any of the terms or conditions of, or constitute a
default under, the organization documents of Seller, or any commitment,
mortgage, note, bond, debenture, deed of trust, contract, agreement, license or
other instrument or obligation to which Seller is now a party or by which the
Assets are bound; (ii) result in any violation of any Governmental Requirement
applicable to the Assets or the Business; or (iii) require notice to or the
consent, authorization, approval or order of any Person.
5.8 Compliance with Laws. Seller has received no notice of violation by
Seller of any Governmental Requirement relating to the Assets or the Business.
5.9 Location of Assets. The Inventory Assets are located in Fort Worth,
Texas. To Seller's knowledge, each Tooling Asset is located with the vendor
identified for such Tooling Asset on Schedule 2.1C. The Test Equipment is
located in Fort Worth, Texas.
5.10 Intellectual Property Claims. To Seller's knowledge, Schedule 3.2
includes a complete list of all intellectual property claims to which Seller is
party that specifically allege infringement by any PRC Product sold before the
Closing Date.
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5.11 Tooling Assets. The Tooling Assets consist of all tooling assets
necessary to manufacture the product models listed on Appendix A-1 to the OEM
Agreement; provided, however, that this representation applies only to the
sufficiency of the Tooling Assets for such purpose on the date hereof and is not
a representation related to any Product (as defined in the OEM Agreement).
6.0 REPRESENTATIONS AND WARRANTIES OF BUYER AND GUARANTOR. Buyer and
Guarantor jointly and severally represent and warrant to Seller as follows:
6.1 Incorporation. Guarantor and Buyer are each a corporation duly
organized, validly existing and in good standing under the laws of their
respective jurisdictions of formation.
6.2 Authorization. Buyer and Guarantor each have full legal right and
corporate power to enter into and deliver this Agreement (and the Ancillary
Documents to which one of them is a party) and to consummate the transactions
set forth in this Agreement (and the Ancillary Documents to which one of them is
a party) and to perform all the terms and conditions in this Agreement (and the
Ancillary Documents to which one of them is a party) to be performed by Buyer or
Guarantor, respectively. The execution and delivery of this Agreement (and the
Ancillary Documents to which Buyer or Guarantor is a party) by Buyer and
Guarantor and the performance by Buyer and Guarantor of the transactions
contemplated in this Agreement (and the Ancillary Documents to which one of them
is a party) have been duly and validly authorized by all requisite corporate
action of Buyer and Guarantor. This Agreement (and the Ancillary Documents to
which Buyer or Guarantor is a party) has been duly executed and delivered by
Buyer and Guarantor and, assuming due execution and delivery by Seller, is a
legal, valid and binding obligation of Buyer and Guarantor enforceable in
accordance with the terms hereof and thereof, except as limited by applicable
bankruptcy, moratorium, insolvency or other laws affecting generally the rights
of creditors or by principles of equity.
6.3 Article 9 Performance Obligations. Buyer has the capacity, financial
resources and expertise to perform Buyer's obligations under Article 9.
6.4 Brokers and Finders. No broker or finder has acted for Buyer (other
than Guarantor) or Guarantor in connection with this Agreement or the
transactions contemplated by this Agreement and no broker or finder (other than
Guarantor) is entitled to any brokerage or finder's fee or to any commission in
respect thereof based in any way on agreements, arrangements or understandings
made by or on behalf of Buyer or Guarantor.
6.5 Buyer Insurance. Buyer has obtained (i) commercial general liability
insurance (including a product liability coverage feature), (ii) property
insurance and (iii) umbrella coverage related to the Business and the Assets.
The policy limits of each of these coverages is $2,000,000.00, $15,000,000.00
and $10,000,000.00, respectively. Seller is named as an additional insured in
each such policy. Such policies specifically cover activities of Buyer or its
Affiliates related to the transition of the Business and specifically cover such
activities that occur on the property of Seller or its Affiliates.
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6.6 Effect of Agreement. The execution and delivery of this Agreement (and
the Ancillary Documents) by Buyer and Guarantor and the consummation of the
transactions contemplated hereby (and by the Ancillary Documents) by Buyer and
Guarantor will not (i) result in any breach of any of the terms or conditions
of, or constitute a default under, the organization documents of Buyer or
Guarantor, or any commitment, mortgage, note, bond, debenture, deed of trust,
contract, agreement, license or other instrument or obligation to which Buyer or
Guarantor is now a party; (ii) result in any violation of any Governmental
Requirement applicable to Buyer or Guarantor; or (iii) require notice to or the
consent, authorization, approval or order of any Person.
6.7 Compliance with Laws. Guarantor and Buyer have received no notice of
violation of any Governmental Requirement by Buyer or Guarantor pertaining to
Buyer's purchase of the Assets or the Business or the consummation of the
transactions contemplated by this Agreement (and the Ancillary Documents).
Guarantor and Buyer have received no notice of any action or claim asserted by
any Person with respect to the Assets or the Business or Buyer's purchase
thereof or the consummation of the transactions contemplated by this Agreement
(and the Ancillary Documents).
7.0 SURVIVAL OF INDEMNIFICATIONS, GUARANTEES, COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES. All indemnifications, guarantees, covenants and
agreements made by either party in this Agreement will survive the Closing,
without limitation, regardless of any investigation made at any time by or on
behalf of the other party. All representations and warranties in Articles 5 or 6
made by any party in this Agreement will survive the Closing for a period of one
year regardless of any investigation made at any time by or on behalf of the
other party. Any claim related to a breach of the representations and warranties
in Articles 5 or 6 must be made within one year of the Closing Date.
8.0 DUE DILIGENCE.
8.1 Due Diligence Period Ended. The parties acknowledge that the due
diligence period has ended and that each party has afforded, to the officers and
authorized representatives of the other parties, access to the first party's
operations, assets, books and records related to this Agreement and has
furnished the other parties with such financial and operating data and other
information relating to this Agreement as the other parties have requested.
8.2 No Due Diligence Representations. No party will be liable for
representations, warranties or statements other than those included in this
Agreement, whether contained in any other written material furnished or in
information orally transmitted to any Person.
9.0 POST-CLOSING COVENANTS AND AGREEMENTS.
9.1 Buyer Facilities. Buyer will establish facilities in the United States
and elsewhere necessary to fulfill Buyer's Assumed Obligations and Buyer's
covenants under this Article 9.
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9.2 Buyer Continuing Service Obligation.
(a) Buyer will service, support and repair all PRC Product that Seller
has sold or otherwise transferred to customers before the Closing Date.
Buyer will be responsible for the full support obligation, which obligation
includes instruction, technical service, trouble shooting and development
and includes all technical support and engineering functions for all PRC
Product sold by Seller before the Closing Date, acquired by Buyer under
this Agreement or manufactured or sold by Buyer after the Closing Date.
This support obligation includes not only the performance of contractual
obligations related to manufactured or sold PRC Product, but also such
customer service appropriate to ensure that the Business will continue as a
going concern. Buyer will operate the Business in accordance with good
business practice and industry standards appropriate for an ongoing
business and in the manner intended to increase sales, service and support
levels above the levels that the Business had in the two years immediately
preceding the Closing Date.
(b) Buyer will manufacture and sell all product models that are
included in the Inventory Assets in a manner intended to increase sales,
service and support levels of each product model above the sales, service
and support levels of each such product model in the two years immediately
preceding the Closing Date. Notwithstanding anything to the contrary in
this Agreement, Buyer may discontinue the manufacture and sale of
obsolescent PRC Product models in a commercially reasonable manner if doing
so would be consistent with the continuing operation of the Business as a
going concern. Buyer shall, however, continue to offer for sale ESAS
subscriber models compatible with PRC Product previously marketed by
Seller. These obligations will end three years from the Closing Date.
(c) Buyer will maintain a relationship with all of Seller's current
PRC Product customers in a manner intended to maintain or improve the
relationships with each such customer; provided, however, Buyer may
discontinue relationships with PRC Product customers if discontinuing the
relationship would be consistent with (i) continuing operation of the
Business as a going concern and (ii) good business practice and industry
standards appropriate for an ongoing business. This obligation will expire
three years from the Closing Date.
9.3 Transition Support. Between the Closing Date and March 31, 2000,
Seller, as an independent contractor, will provide Transition Support for Buyer.
Buyer will pay Seller the Transition Costs that Seller incurs and bills to Buyer
monthly. Seller and Buyer will agree what Transition Support services Seller
will provide and the cost of such services to Buyer. If there is no agreement in
writing as to such Transition Support and/or its cost, Seller is not obligated
to provide such Transition Support.
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10.0 BUYER INDEMNITY.
10.1 Indemnity. Buyer agrees to indemnify, hold harmless and defend Seller
and its officers, directors, employees, agents, consultants, representatives and
Affiliates (collectively, the "Seller Parties") at all times from and after the
date of this Agreement from and against any and all penalties, demands, damages,
punitive damages, losses, loss of profits, liabilities, suits, costs, costs of
any settlement or judgment, claims of any and every kind whatsoever, refund
obligations (including interest and related penalties), remediation costs and
expenses (including reasonable attorneys' fees), of or to any of the Seller
Parties ("Seller Damages"), that may now or in the future be paid, incurred or
suffered by or asserted against the Seller Parties by any Person resulting or
arising from or incurred in connection with any one or more of the following;
provided, that this Section 10.1 will not apply to any Retained Obligations:
(a) any liability or claim for liability (whether in contract, in tort
or otherwise, and whether or not successful) related in any way to the
Assets to the extent such liability or claim for liability arises in
connection with any action, omission or event occurring after the Closing;
(b) any liability or claim for liability (whether in contract, in tort
or otherwise, and whether or not successful) related to the Transition
Support Seller or one of its Affiliates provides and Seller's fulfillment
of its obligations under Section 9.3, including liability or claim for
liability related to the Transition Personnel;
(c) any misrepresentation, breach of warranty or nonfulfillment of any
covenant or agreement on the part of Buyer under this Agreement (including
Article 9 and the Ancillary Documents) or from any misrepresentation in or
omission from any certificate furnished or to be furnished to Seller by
Buyer pursuant to the terms of this Agreement (including the Ancillary
Documents);
(d) any liability or claim for liability (whether in contract, in tort
or otherwise, and whether or not successful) related in any way to the
Tooling Assets, including liability or claims that arise in connection with
use by Seller or its Affiliates of the Tooling Assets to satisfy
obligations under the OEM Agreement;
(e) any liability or claim for liability (whether in contract, in tort
or otherwise, and whether or not successful) related in any way to the
Assumed Obligations; and
(f) all actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including costs of court and reasonable
attorneys' fees) incident to any of the foregoing.
10.2 Notice of Claim. Seller agrees that upon its discovery of facts giving
rise to a claim for indemnity under the provisions of this Agreement, including
receipt by it or any Seller Party of notice of any demand, assertion, claim,
action or proceeding, judicial or otherwise, by any Person with respect to any
matter as to which any of the Seller Parties are entitled to indemnity under the
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provisions of this Agreement (any such action referred to as a "Seller Claim"),
Seller will give prompt notice thereof in writing to Buyer together with a
statement of such information respecting any of the foregoing as it shall then
have; provided, that any delay in giving or failure to give such notice will not
limit the rights of Seller or any Seller Party to indemnity under this Agreement
except to the extent that Buyer is shown to have been damaged by such delay or
failure.
10.3 Right of Buyer to Participate in Defense. With respect to any Seller
Claim as to which Seller seeks indemnity hereunder, Seller will provide Buyer
the opportunity to participate in the defense of such Seller Claim with separate
counsel of Buyer's choice and at Buyer's cost and expense; provided, that Seller
will have the right to retain lead counsel to defend any such Seller Claim. To
the extent reasonably requested by Seller, Buyer will reasonably cooperate with
Seller and its representatives and counsel in any dispute or defense related to
any Seller Claim.
10.4 Payment. Buyer will promptly pay Seller or such other Seller Party as
may be entitled to indemnity under this Agreement in cash the amount of any
Seller Damages to which Seller or such Seller Party may become entitled by
reason of the provisions of this Agreement.
11.0 SELLER INDEMNITY.
11.1 Indemnity. Seller agrees to indemnify, hold harmless and defend Buyer
and Buyer's officers, directors, employees, agents, consultants, representatives
and Affiliates (collectively, the "Buyer Parties") at all times from and after
the date of this Agreement from and against any and all penalties, demands,
damages, punitive damages, losses, loss of profits, liabilities, suits, costs,
costs of any settlement or judgment, claims of any and every kind whatsoever,
refund obligations (including interest and related penalties), remediation costs
and expenses (including reasonable attorneys' fees), of or to any of the Buyer
Parties ("Buyer Damages"), that may now or in the future be paid, incurred or
suffered by or asserted against the Buyer Parties by any Person resulting or
arising from or incurred in connection with any one or more of the following;
provided, that this Section 11.1 will not apply to any items that have been
retained or assumed by Buyer under this Agreement, including the Assumed
Obligations:
(a) any misrepresentation, breach of warranty or nonfulfillment of any
covenant or agreement on the part of Seller under this Agreement (including
Article 9 and the Ancillary Documents) or from any misrepresentation in or
omission from any certificate furnished or to be furnished to Buyer by
Seller pursuant to the terms of this Agreement (including the Ancillary
Documents);
(b) any liability or claim for liability (whether in contract, in tort
or otherwise, and whether or not successful) related in any way to the
Retained Obligations;
(c) all material product defects related to Year 2000 Compliance (x)
on finished goods that are Inventory Assets or (y) related to limited
written warranties of Seller related to PRC Product that Seller sold before
the Closing Date; provided, that, in the case of (x),
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Seller's indemnification obligations under this Section 11.1(c) will not
exceed the lesser of (i) the repair cost of the Inventory Assets with such
defects and (ii) the amount Buyer paid Seller for such Inventory Assets
with such defects; provided, further, Buyer must make all claims under this
Section 11.1(c) before June 30, 2000; and
(d) all actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (including costs of court and reasonable
attorneys' fees) incident to any of the foregoing (subject to the first
proviso in Section 11.1(c)).
11.2 Notice of Claim. Buyer agrees that upon its discovery of facts giving
rise to a claim for indemnity under the provisions of this Agreement, including
receipt by it or any Buyer Party of notice of any demand, assertion, claim,
action or proceeding, judicial or otherwise, by any Person with respect to any
matter as to which any of the Buyer Parties are entitled to indemnity under the
provisions of this Agreement (any such action referred to as a "Buyer Claim"),
Buyer will give prompt notice thereof in writing to Seller together with a
statement of such information respecting any of the foregoing as it shall then
have; provided, that any delay in giving or failure to give such notice will not
limit the rights of Buyer or any Buyer Party to indemnity under this Agreement,
except to the extent that Seller is shown to have been damaged by such delay or
failure.
11.3 Right of Seller to Participate in Defense. With respect to any Buyer
Claim as to which Buyer seeks indemnity hereunder, Buyer will provide Seller
with the opportunity to participate in the defense of such Buyer Claim with
separate counsel of Seller's choice and at Seller's cost and expense; provided,
that Buyer will have the right to retain lead counsel to defend any such Buyer
Claim. To the extent reasonably requested by Buyer, Seller will reasonably
cooperate with Buyer and its representatives and counsel in any dispute or
defense related to any Buyer Claim.
11.4 Payment. Seller will promptly pay to Buyer or such other Buyer Party
as may be entitled to indemnity under this Agreement in cash the amount of any
Buyer Damages to which Buyer or such Buyer Party may become entitled by reason
of the provisions of this Agreement.
12.0 CUSTOMER LIST. Seller has delivered to Buyer a complete list of
Seller's current PRC Product customers. Seller is providing this list only to
Buyer and to no other Person, except that Seller and its Affiliates may use the
list for any purpose within the organization of Seller and its Affiliates. In
connection with the delivery of this list, Seller will allow Buyer to have
nonexclusive access to sales history reports from Seller's "Sales Workbench"
computer program, subject in all instances to the Nondisclosure Agreement. All
information provided is without representation or warranty.
13.0 GUARANTY. Guarantor guarantees and agrees to be jointly and severally
liable for Buyer's performance of each and every obligation of Buyer under this
Agreement (including Buyer's obligations under the Ancillary Documents (other
than the OEM Agreement)) and agrees to be jointly and severally liable for any
breach or nonfulfillment of this Agreement by Buyer. To evidence this Guaranty,
Guarantor is executing and delivering the Guaranty.
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14.0 EXPENSES. Each of the parties will pay its own costs and expenses of
performance of and compliance with this Agreement.
15.0 FURTHER ACTIONS. From time to time, at the request of any party, the
other parties will execute and deliver such instruments and take such action as
may be reasonably requested to evidence the transactions contemplated by this
Agreement.
16.0 NOTICES. All notices, requests, demands and other communications
required or permitted to be given under this Agreement must be in writing and
will be deemed to have been duly given if delivered personally, given by prepaid
telex or telegram or by facsimile or other similar electronic transmission
device or mailed first class, postage prepaid, certified United States mail,
return receipt requested, as follows:
(a) If to Seller, at:
Uniden America Corporation
4700 Amon Carter Boulevard
Fort Worth, Texas 76155
Attention: President
Facsimile No.: (817) 858-3585
With a copy to:
Uniden America Corporation
4700 Amon Carter Boulevard
Fort Worth, Texas 76155
Attention: Office of General Counsel
Facsimile No.: (817) 858-3585
(b) If to Guarantor, at:
Simmonds Capital Limited
580 Granite Court
Pickering, Ontario L1W324
Attention: John G. Simmonds
Facsimile No.: (905) 837-1139
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(c) If to Buyer at:
RELM Wireless Corporation
7505 Technology Drive
West Melbourne, Florida 32904
Attention: President
Facsimile No.: (321) 984-0434
With a copy to:
Greenberg Traurig, P.A.
777 South Florida Drive, Suite 300 East
West Palm Beach, Florida 33401
Attention: Denise Gordon Reeder
Facsimile No.: (561) 655-1222
provided that any party may change its address for notice by giving to the other
parties written notice of such change. Any notice given under this Article 16
will be effective on receipt.
17.0 GENERAL PROVISIONS.
17.1 Governing Law; Interpretation; Section Headings. This Agreement will
be governed by and construed and enforced in accordance with the laws of the
State of Texas, without regard to conflict-of-laws rules applied in Texas. The
section headings contained in this Agreement are for purposes of convenience
only, and will not be deemed to constitute a part of this Agreement or to affect
the meaning or interpretation of this Agreement in any way.
17.2 Severability. Should any provision of this Agreement be held
unenforceable or invalid under the laws of the United States of America or the
State of Texas, then the parties agree that such provision will be deemed
modified for purposes of performance of this Agreement in such jurisdiction to
the extent necessary to render it lawful and enforceable, or if such a
modification is not possible without materially altering the intention of the
parties, then such provision will be severed from this Agreement for purposes of
performance of this Agreement in such jurisdiction. The validity of the
remaining provisions of this Agreement will not be affected by any such
modification or severance, except that if any severance materially alters the
intentions of the parties as expressed in this Agreement (a modification being
permitted only if there is no material alteration), then the parties will use
commercially reasonable efforts to agree to appropriate equitable amendments to
this Agreement in light of such severance.
17.3 Entire Agreement. This Agreement, the Schedules and the documents and
agreements referenced in this Agreement (including the Ancillary Documents, the
"Transaction Documents") set forth the entire agreement and understanding of the
parties to this Agreement with respect to the transactions contemplated by this
Agreement and supersede all prior agreements, arrangements and understandings
related to the subject matter of this Agreement, including (i) the
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nondisclosure agreement between Seller and Guarantor dated February 9, 1999,
(ii) the nondisclosure agreement between Seller and Buyer dated November 30,
1999, (iii) the letter of understanding and attached terms sheet dated as of May
26, 1999, and executed by Guarantor on May 27, 1999, (iv) the letter of
understanding and attached terms sheet dated December 31, 1999 and (v) the
letter of understanding and attached terms sheet dated January 24, 2000. No
representation, promise, inducement or statement of intention has been made by
any party to this Agreement that is not embodied or referenced in the
Transaction Documents, and no party in this Agreement will be bound by or liable
for any alleged representation, promise, inducement or statement of intention
not so set forth.
17.4 Binding Effect. All the terms, provisions, covenants and conditions of
this Agreement will be binding upon and inure to the benefit of and be
enforceable by the parties to this Agreement and their respective successors and
assigns.
17.5 Assignment. This Agreement and the rights and obligations of the
parties to this Agreement may not be assigned or delegated by the parties to
this Agreement without the prior written consent of the other parties to this
Agreement.
17.6 Amendment; Waiver. This Agreement may be amended, modified, superseded
or canceled, and any of the terms, provisions, representations, warranties,
covenants or conditions of this Agreement may be waived, only by a written
instrument executed by all parties to this Agreement, or, in the case of a
waiver, by the party waiving compliance. The failure of any party at any time or
times to require performance of any provision of this Agreement will in no
manner affect the right to enforce the same. No waiver by any party of any
condition contained in this Agreement, or of the breach of any term, provision,
representation, warranty or covenant contained in this Agreement, in any one or
more instances, will be deemed to be or construed as a further or continuing
waiver of any such condition or breach, or as a waiver of any other condition or
of the breach of any other term, provision, representation, warranty or
covenant.
17.7 Gender; Numbers. All references in this Agreement to the masculine,
feminine or neuter genders will, where appropriate, be deemed to include all
other genders. All plurals used in this Agreement will, where appropriate, be
deemed to be singular, and vice versa.
17.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Agreement will be
binding when one or more counterparts, individually or taken together, bears the
signatures of the parties reflected as signatories.
17.9 Telecopy Execution and Delivery. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties, and an
executed copy of this Agreement may be delivered by one or more parties by
facsimile or similar instantaneous electronic transmission device pursuant to
which the signature of or on behalf of such party can be seen, and such
execution and delivery will be considered valid, binding and effective for all
purposes. At the request of any
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party, the parties will execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
17.10 No Partnership. Nothing in this Agreement, including Article 9,
should be construed to create a joint venture, agency, partnership or similar
arrangement between or among any two or more of the parties.
17.11 Drafting Conventions. The language in all parts of this Agreement
should in all cases be construed according to its fair meaning and not against
the drafting party.
17.12 Dispute Resolution.
(a) In the event of a dispute related to this Agreement the parties
shall promptly, amicably and in good faith attempt to resolve the dispute
through negotiation. If the parties are unable to resolve the dispute
within thirty (30) days of the date any party gives the other parties
notice of the dispute, any party may submit the dispute to mediation.
(b) The mediation of any dispute hereunder shall be conducted in
accordance with the Commercial Mediation Rules and Procedures of the
American Arbitration Association ("AAA"). The parties shall attempt to
agree upon an impartial mediator to mediate the dispute, but if they are
unable or fail to appoint a mediator within ten (10) days of the filing of
a written request for mediation with the AAA, the AAA will appoint a
qualified mediator to mediate the dispute. The mediation shall be held in
Fort Worth, Texas, within thirty (30) days of appointment of the mediator.
17.13 Submission to Jurisdiction. Each party submits exclusively to the
jurisdiction of the federal court sitting in the Northern District of Texas,
Dallas Division, in any action or proceeding arising out of or relating to this
Agreement or the Ancillary Documents and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such court. Each
party agrees to bring any action or proceeding arising out of or relating to
this Agreement or the Ancillary Documents exclusively in such court. Each of the
parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any related bond, surety, or other
security that might be required of any other party. Buyer and Guarantor appoint
the Secretary of State of the State of Texas as their agent to receive on their
behalf service of copies of the summons and complaint and any other process that
might be served in an action or proceeding (the "Process Agent"). Any party may
make service on any other party by sending or delivering a copy of the process
(a) to the party to be served at the address and in the manner provided for the
giving of notices in Article 17, in the case of service on Seller, or, (b) in
care of the Process Agent in the manner provided for the giving of notices in
Article 17, in the case of service on Buyer or Guarantor.
17.14 Consequential Damages. Notwithstanding any provision of this
Agreement that may be to the contrary, no party, nor its officers, employees,
agents, partners, Affiliates or subcontractors will be liable to the other
parties, its officers, employees, agents, partners, Affiliates or
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subcontractors for claims for incidental, indirect, consequential, exemplary,
punitive or other special damages, including damages for a loss of profits or
opportunity costs, connected with or resulting from any performance or lack of
performance under this Agreement regardless of whether a claim is based on
contract, warranty, tort (including negligence), theory of strict liability, or
any other legal or equitable principle.
18.0 PURCHASE OF PARTS. For so long as parts for PRC Products ("PRC Parts")
are available from Seller's current on-hand supplies of PRC Parts, Buyer may
purchase these PRC Parts at Seller's cost therefor. Seller shall have no
obligation to acquire, nor an obligation to sell, PRC Parts beyond its current
supplies. Terms for the sale and purchase of such PRC Parts shall be FOB
Seller's distribution center in Fort Worth, Texas, with all invoices for PRC
Parts due and payable net thirty (30) days from date of invoice.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
BUYER:
RELM WIRELESS CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
SELLER:
UNIDEN AMERICA CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
GUARANTOR:
SIMMONDS CAPITAL LIMITED
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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SCHEDULE 2.1A
INVENTORY ASSETS
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SCHEDULE 2.1B
TEST EQUIPMENT
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SCHEDULE 2.1C
TOOLING ASSETS
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SCHEDULE 2.1D
CONTRACTS
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SCHEDULE 2.1E
CERTAIN EXCLUDED ASSETS
1. Patent rights and other intellectual property rights not specifically
included in the Assets.
2. All cash and note accounts receivable of Seller or any Affiliate of Seller.
3. Any asset, right or interest not described on Schedule 2.1A - Schedule
2.1D.
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SCHEDULE 3.1
CERTAIN ASSUMED OBLIGATIONS
1. All product warranty obligations related to PRC Products or the Business,
including those listed on Schedule 5.4. All liability for all products, business
and intellectual property claims made before or after the Closing Date related
to the PRC Products or the Business regardless of (i) when the product on which
the claim is based was sold or (ii) when the act or omission on which the claim
is based occurred, except that Seller will retain liability for Existing IP
Claims, and such liability will not constitute an Assumed Obligation.
2. Obligations (other than Retained Obligations) under all contracts to which
Seller or any of its Affiliates is a party relating to the Assets or the
Business, whether such obligations arise or have arisen before or after the
Closing Date. Such contracts include all contracts related to the Business
entered into by Seller and, before October 1998, all contracts related to the
Business entered into by Uniden Financial Inc. (F/K/A Uniden America
Corporation).
3. The parties intend that Buyer assume all liabilities and obligations of
Seller or its Affiliates (other than Retained Obligations) related to the
Business whenever such liabilities or obligations arise or have arisen and
regardless of when the act or omission on which the liabilities or obligations
are based occurred.
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SCHEDULE 3.2
RETAINED OBLIGATIONS
1. Any pending third party intellectual property infringement claims (a
complete list of which claims is included below) made before the Closing
Date with respect to PRC Product sold before the Closing Date (the
"Existing IP Claims").
ATTACHED IS A LIST OF INTELLECTUAL PROPERTY CLAIMS:
2. The product defects for which Seller has agreed to indemnify Buyer in
Section 11.1(c).
3. All liability and obligation related to the proceedings listed on Schedule
5.5; provided, however, Seller does not hereby assume any liability or
obligation for acts or omissions of Buyer relating to the Business or the
Assets occurring after the Closing Date. Should Buyer be added as a party
to a proceeding listed on Schedule 5.5 solely as a result of Buyer entering
into this Agreement, Seller alone shall continue to undertake all liability
and obligation related to such proceeding.
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SCHEDULE 4.1
ALLOCATION
o $1,913,996.00 to the Inventory Assets and all other Assets other than the
Tooling Assets.
o $300,000 to the Tooling Assets.
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SCHEDULE 5.4
WARRANTY CLAIMS
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SCHEDULE 5.5
LEGAL PROCEEDINGS
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SCHEDULE 5.7
CONSENTS
None
-33-
OEM MANUFACTURING CONTRACT
BETWEEN
RELM WIRELESS CORPORATION
AND
UNIDEN CORPORATION
THIS OEM MANUFACTURING CONTRACT ("CONTRACT") is made this 13th day of March,
2000, by and between UNIDEN CORPORATION, a Japan corporation with principal
place of business at 2-12-7 Hatchobori, Chuo-Ku 104, Japan ("SELLER"), and RELM
WIRELESS CORPORATION, a Nevada corporation with a place of business at 7505
Technology Drive, West Melbourne, FL 32904 ("BUYER").
RECITALS
Buyer may desire from time to time during the term hereof to purchase Product
(as defined herein) from Seller and Seller may desire to sell Product to Buyer.
Any such sales will be in accordance with the terms and conditions of this
Contract.
NOW THEREFORE WITNESSETH, that for good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS, SCOPE OF CONTRACT
A. Definitions
As used herein, the following terms shall have the definitions set forth:
1. "Buyer" shall mean RELM Wireless Corporation
2. "Seller" shall mean Uniden USA, Inc.
3. "Product" shall mean the product listed in APPENDIX A-1, and any
additional products that the parties may agree to include under
this Contract pursuant to Section 2.A.
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4. "Contract" shall mean this agreement including all appendices,
the terms and provisions of which are incorporated into the
Contract by reference.
5. "Effective Date of this Contract" shall be the date so designated
by the parties on the first page of this Contract or, if no date
is designated, shall be the date on which the Contract is signed
by the last of the parties to sign.
6. "Specifications" shall mean the design, performance, and features
of the respective Product as established and determined by
Seller, and as such Specifications may be modified pursuant to
Section 11.B.
7. "Affiliate" of any Person means any Person Controlling,
Controlled by or under common Control with such Person.
8. "Control" and all derivations thereof means the ability to either
(i) vote (or direct the vote of) 50% or more of the voting
interests in any Person or (ii) direct the affairs of another,
whether through voting power, contract or otherwise.
9. "Persons" means any natural person, any governmental authority or
agency and any entity, including corporations, partnerships,
joint ventures, limited liability companies, joint stock
companies, trusts, estates, companies and associations, whether
organized for profit or otherwise.
10. "Asset Purchase Agreement" means that certain Asset Purchase
Agreement among Buyer, Uniden America Corporation and Simmonds
Capital Limited dated as of the date of this Contract.
11. "Uniden License" means Trademark License Agreement for the mark
"Uniden" pursuant to which Seller is granting Buyer a limited
license to use of the mark "Uniden."
B. Scope of Contract
This Contract sets forth the terms and conditions regarding purchases
by Buyer of the Products from Seller and shall apply to each purchase
and sale of the Products to be made in accordance with the Orders (as
defined in Section 2C.1) issued
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from time to time by Buyer and accepted by Seller pursuant to
Section 2 hereof during the term of this Contract.
2. PRODUCT, PRICE, ORDERING AND MINIMUM
A. Product Models
1. The initial Product models available hereunder are set forth on
APPENDIX A-1. Additional Product models may be agreed to by the
parties in writing by execution of a New Model Addendum,
substantially in the form of APPENDIX A-2. Orders for Product
models for which there is a "Remark" on APPENDIX A-1 must comply
with that "Remark." Seller has no obligation to accept Orders or
to deliver any Product for which Seller does not accept Orders
due to the unavailability or substantial increase in Seller's
cost of parts or components for such Product.
2. Buyer has accepted the initial models of Product set forth on
APPENDIX A-1. Buyer agrees to provide all necessary tooling,
jigs, special equipment, etc. to Seller needed for the
manufacture of the initial models and the additional Product
models. Should any additional tooling, jigs, special equipment,
etc. be required, it shall be at the cost of Buyer. Seller will
exercise ordinary care in the normal maintenance and care of such
tooling, jigs, special equipment, etc. Buyer is responsible for
all risks relating to the tooling, jigs, special equipment, etc.
For any additional Product models agreed upon, if any, Seller
will provide drawings or other information for Buyer's approval.
Seller will provide a written quote to Buyer setting forth any
tooling requirements and costs applicable to each additional
future Product model (for which Buyer will be responsible). Buyer
will be responsible for any taxes, duties, etc., levied regarding
the same.
3. Seller will make available for purchase by Buyer Product in
accordance with the terms and provisions of this Contract.
Nothing in the Contract will require Buyer to buy or Seller to
sell any quantities of Product, absent firm, accepted Orders.
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4. Manufacturer of the Product will be at a location determined by
Seller, in its sole discretion. The initial location will be
Laguna, The Philippines. The location may be moved by Seller in
its sole discretion. Seller will make a reasonable good faith
effort to give Buyer 120 days prior written notice of such move.
B. Price
1. The price for the initial Product models is specified in APPENDIX
A-1. Pricing for any additional Product models shall be specified
on the New Model Addendum for that model. Available accessories
and parts shall be offered to Buyer at Seller's regular prices
and terms and conditions for such accessories and parts.
2. Buyer shall provide Seller with a resale sales tax exemption
certificate and all other tax exemption certificates required by
applicable governmental authorities. Buyer is responsible to pay
the gross amount of any present or future sales, use, excise,
value-added, or other similar tax applicable to the sale of any
Product furnished by Seller to Buyer hereunder.
C. Ordering Procedure
1. Buyer shall order its desired quantities of the Product,
accessories or spare parts/units to be provided by Seller under
this Contract by means of purchase orders (herein referred to as
"ORDERS"). Orders shall be in writing and specify the Product,
accessories and/or available spare parts, as well as the
applicable price, quantity, and requested delivery schedule.
Orders will be for a minimum of 500 pieces of each item per
delivery.
2. The provisions of this Contract shall be applicable to Orders
whether or not this Contract is referenced in Orders and the
provisions of this Contract shall supersede any contrary
provisions in Orders or either party's purchase orders, order
acknowledgments, invoices or shipping documents.
3. Buyer's initial Order of each model shall be made 180 days in
advance. Thereafter, Orders of additional models shall be made
150 days in
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advance. Commencing upon execution of this Contract, Buyer shall,
at the beginning of each calendar month, submit a rolling
forecast of Product to be delivered for the next six (6) calendar
months, including the current month. The forecast shall be firm
for the nearest in time four (4) months, and Buyer will at all
times have submitted Orders to cover the same. Orders are subject
to acceptance by Seller. Seller will confirm acceptance or
rejection of each Order via facsimile within ten (10) business
days of receipt of Order. Failure to confirm an Order within such
period will be considered a rejection of the Order by Seller. The
foregoing forecast provisions shall apply to the Product set
forth in APPENDIX A-1. However, any additional Product models
will be subject to the product planning cycle mutually agreed to
by Seller and Buyer in the New Model Addendum for the given
Product.
D. Tooling Assets. Buyer agrees to make the Tooling Assets (as defined in
the Asset Purchase Agreement) available free of cost to Seller to
allow Seller to fulfill its obligations under this Contract; provided,
however, that, notwithstanding this arrangement, Buyer will be fully
responsible for all liabilities, obligations or claims related to the
Tooling Assets. As long as this Contract is in effect, Seller will
have the right to control the location and use of the Tooling Assets
at Buyer's cost and risk. If the Tooling Assets must be updated,
duplicated or replaced in order for Seller to fulfill its obligations,
without undue burden, under this Contract, Buyer will be responsible
for all update, duplication or replacement costs; provided, however,
Seller must give Buyer 30 days written notice (and obtain Buyer's
prior written consent) of an update, duplication or replacement that
will require such costs; provided, further, if such costs exceed
$250,000.00 for any one Product model, Buyer may terminate the
Agreement; provided, further, that no outstanding Orders will be
canceled as a result of such termination unless the update,
duplication or replacement is necessary for Seller to fulfill an
Order, in which case such Order will be canceled and Buyer will
reimburse Seller for all costs Seller has incurred in connection with
such Order.
-5-
<PAGE>
3. DELIVERY, TITLE AND RISK OF LOSS
A. Seller shall deliver the Product FOB to the factory. Seller shall
arrange the shipping method, shipping carrier and insurance applicable
to each shipment for delivery to Buyer in West Melbourne, Florida, at
the cost and risk of Buyer. Upon delivery at the factory, title to the
Product and all risk of loss or damage for the Product shall pass to
Buyer. Buyer is responsible for importation and all duties and taxes.
B. Seller will use its commercially reasonable efforts to provide Buyer
with an estimated delivery and shipment schedule for each Order.
C. If Buyer fails to take delivery of any quantity of the Product which
has been ordered by Buyer and tendered by Seller in compliance with
the terms and conditions of this Contract, Seller may place such
Product in storage at the place of manufacture or elsewhere. In such
event: (i) Seller shall notify Buyer of the placement of any quantity
of the Product in storage; (ii) Seller's delivery obligations shall be
deemed fulfilled and title and all risk of loss or damage shall
thereupon pass to Buyer; (iii) any amounts otherwise payable upon
delivery shall be payable upon presentation of Seller's invoices
therefor; and (iv) promptly upon submission of Seller's invoices
therefor, Buyer shall reimburse Seller for all expenses incurred by
Seller such as preparation for and placement of the Product into
storage, handling, storage, demurrage, inspection, preservation and
insurance.
D. Buyer may, within fourteen (14) days of receipt of any ordered Product
units at its ship-to destination, notify Seller in writing of
rejection of any Product units which do not comply with the
Specifications. Buyer may return such rejected units to Seller at
Seller's expense and risk, provided that Buyer: (i) obtains a Return
Material Authorization (RMA) number; and (ii) includes, along with
such returned Products, a written description, in reasonable detail,
of the nature and extent of the claimed nonconformity. Seller, at its
option, may repair or replace the defective units and ship such units
to Buyer, at Seller's expense and risk. If Seller determines that any
returned item conformed to the Specifications and was not defective,
Seller will return it to Buyer at Buyer's expense and risk.
-6-
<PAGE>
4. EXCUSABLE DELAYS
A. Buyer and Seller shall not be liable for delays in delivery or failure
to perform due directly or indirectly to: (i) causes beyond its
reasonable control; (ii) acts of God, acts (including failure to act)
of any governmental authority (de jure or de facto), wars (declared or
undeclared), riots, revolutions, strikes or other labor disputes,
fires, floods, sabotage, nuclear incidents, earthquakes, storms,
epidemics; (iii) inability to timely obtain necessary materials,
items, components, or services from suppliers who are affected by the
foregoing circumstances; or (iv) the failure of the other party to
perform its obligations hereunder in a timely manner. The foregoing
shall apply even though any of such causes exists at the time of
execution of this Contract.
B. In the event of any delay or failure excused by this Section 4, the
party whose performance is delayed shall promptly notify the other
party and shall at the same time, or at the earliest practical date
after such notice, specify the revised delivery and performance dates.
In the event of such delay, the time of delivery or of performance
shall be extended for a period equal to the time lost by the affected
party by reason of the delay; provided, however, if any such delay
shall continue beyond thirty (30) business days, either party may
cancel any or all Orders affected by such delay.
5. PAYMENT
A. Payment will be made by irrevocable documentary letter of credit
payable at sight at delivery to FOB point. The letters of credit will
be opened by Buyer for the full amount of each Order of Product a
minimum of 120 days prior to scheduled shipment from the factory,
except for the initial Order of any Product model, which will be
opened 150 days prior to scheduled shipment from the factory. The
letters of credit will contain terms and conditions acceptable to
Seller, and will be confirmed by a U.S. bank acceptable to, and on
terms acceptable to, Seller.
-7-
<PAGE>
B. Unique Materials
In the event of termination of this Contract other than by Seller
pursuant to Section 13.A, Buyer shall reimburse Seller for all unique
materials acquired by Seller for the manufacture of Product for Buyer.
Unique materials include, but are not limited to Product cabinets.
This obligation survives the termination or expiration of this
Contract.
C. Other Amounts
Any other amounts due Seller hereunder shall be payable within
forty-five (45) days after Buyer's receipt of Seller's invoice.
D. Late Payments
Any undisputed amounts which are not paid on a timely basis shall
accrue interest from the due date at the rate of one and one-half
percent (1-1/2%) per month (or such lesser rate as may be the maximum
permissible rate under applicable law). A party shall use its best
efforts to notify the other party within twenty (20) business days of
its receipt of any invoice or credit/debit documentation which it
disputes.
6. QUALITY ASSURANCE
Seller will perform such inspections and tests of each Product unit at
least comparable to the level of quality assurance that Seller implements
for its own products, and as Seller deems necessary in its reasonable
commercial judgment to ensure that such Product units comply with the
requirements of this Contract.
7. PRODUCT PROTECTION
A. No Warranty
The Product sold pursuant to this Contract is sold without warranty either
express or implied. SELLER SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY AND OR FITNESS FOR A
PARTICULAR PURPOSE AND ANY RETAIL WARRANTY, INCLUDING ANY CONSUMER OR
END-USER WARRANTY.
B. EPIDEMIC FAILURE
-8-
<PAGE>
An epidemic failure is a material failure of a Product due to a single
cause or any material, component or part therefor in an amount
exceeding ten percent (10%) of the total units shipped under this
Contract. In case of epidemic failure of a Product occurring within 18
months of date of shipment, Seller shall, at its option, repair or
replace affected units of Product at its expense. Buyer shall inform
Seller in writing of all epidemic failures and Seller shall have the
right to confirm the existence of such failures in a manner it deems
appropriate.
C. Seller Indemnity
Seller shall be responsible for and agrees to indemnify Buyer and hold
Buyer harmless from and against all third party claims, demands and
causes of action (including claims relating to compliance with all
applicable labor laws of the jurisdiction in which the Product is
manufactured) for direct damages (including reasonable legal fees and
expenses) for personal injuries or damage to tangible property (other
than Product) directly resulting from the willful misconduct or
negligent acts or omissions of Seller in the manufacturing of the
Product. Buyer agrees to notify Seller as soon as practical of any
third party claim, demand or cause of action for which Buyer will
request indemnification from Seller. Buyer will provide Seller with
the information and assistance reasonably requested by Seller to
defend such claim, demand or cause of action.
D. Buyer Indemnity
Buyer shall be responsible for and agrees to indemnify Seller and hold
Seller harmless from and against all third party claims, demands and
causes of action (including intellectual property claims and claims
related to compliance with applicable laws and governmental
regulations other than applicable labor laws of the jurisdiction in
which the Product is manufactured) for direct damages (including
reasonable legal fees and expenses) for personal injuries or damage to
tangible property directly resulting from the willful misconduct or
negligent acts or omissions of Buyer in the sale, repair (if
applicable), design, shipment, use or other handling of the Product.
Seller agrees to notify Buyer as soon as practical of any third party
claim, demand or cause of action for which Seller will request
indemnification from Buyer. Seller will provide Buyer with the
information and
-9-
<PAGE>
assistance reasonably requested by Buyer to defend such claim, demand
or cause of action.
E. THE REMEDIES SET FORTH ABOVE ARE THE BUYER'S EXCLUSIVE REMEDIES
AGAINST SELLER. SUCH REMEDIES ARE IN LIEU OF ALL OTHER REMEDIES OR
WARRANTIES WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED INCLUDING,
WITHOUT LIMITATION, THE IMPLIED WARRANTY OF MERCHANTABILITY AND THE
IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
8. INTELLECTUAL PROPERTY
A. Buyer will provide all intellectual property rights of Buyer or any
third party necessary for Seller to fulfill Seller's obligations under
this Contract.
B. This Contract does not constitute a grant, transfer, license or
assignment from Seller to Buyer of any intellectual property rights of
Seller; provided, however, that Seller is granting Buyer a limited
license in the Uniden License.
9. LIMITATION OF LIABILITY
A. Limitation of Liability
The total liability of Seller, including its subcontractors or
suppliers, for all claims of any kind for any loss or damage, whether
in contract, warranty, tort (including negligence or infringement),
strict liability or otherwise, arising out of, connected with, or
resulting from the performance or non-performance of this Contract or
from the manufacture, sale, delivery, repair, replacement, licensing
or use of any Product, software or the furnishing of any service,
shall not exceed the amount paid by Buyer pursuant to Section 5,
entitled "PAYMENT," for the particular item(s) of Product, software or
services that give rise to the claim.
B. IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT
(INCLUDING NEGLIGENCE OR INFRINGEMENT), STRICT LIABILITY OR OTHERWISE,
SHALL EITHER PARTY, OR ITS SUBCONTRACTORS OR SUPPLIERS, BE LIABLE FOR
ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES
-10-
<PAGE>
INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF USE OF THE
PRODUCT OR ANY OTHER EQUIPMENT, COST OF CAPITAL, COST OF SUBSTITUTE
GOODS, FACILITIES, SERVICES OR DOWNTIME COSTS TO THE OTHER PARTY.
C. The provisions of this Section's "LIMITATION OF LIABILITY" shall apply
notwithstanding any other provisions of the terms of this Contract or
of any other agreement and shall survive the termination or expiration
of this Contract.
10. CONFIDENTIALITY
A. The information supplied by one part to the other under this Contract
which is marked or otherwise designated in writing to be of a
proprietary or confidential nature ("Confidential Information") shall
be kept confidential by the receiving party for a period of two (2)
years following expiration of this Contract. Except as otherwise
specified authorized in writing, the receiving party shall:
1. treat and protect the terms and provisions of this Contract and
all information, documentation, and know-how received as
Confidential Information;
2. not reproduce (except in a manner and purpose consistent with the
purpose of this Contract) Confidential Information in whole or in
part; and
3. use Confidential Information only in conjunction with its
performance hereunder or its use of the Product.
B. Neither part shall forward or disclose any Confidential Information of
the other party to any third party without the prior written consent
of the other party, except that nothing herein shall preclude a party
from disclosing such information to any Affiliate of such party with a
need to know such information. Notwithstanding the foregoing, neither
party shall have any obligation with respect to any information of the
other party which:
1. was previously known by or is independently and demonstrably
developed at any time by the receiving party without any
connection with the information received;
-11-
<PAGE>
2. at any time becomes a matter of public knowledge or literature
without any act or negligence by the receiving party; or
3. is at any time lawfully received by the receiving party from a
third Person under circumstances permitting its disclosure to
others.
C. If and to the extent that a receiving party is required by any
administrative or judicial action to disclose the Confidential
Information to the other party, the receiving party shall attempt to
maintain the confidentiality of the information by asserting in such
action any applicable privileges and immediately after receiving
notice of such action, notify the disclosing party of such action to
give the disclosing party the opportunity to seek legal remedies to
maintain the confidentiality of same.
D. Each party shall take the same actions and utilize the same
precautions in preventing unauthorized disclosure of the other party's
Confidential Information as it uses with regard to its own
Confidential Information, which shall in no event be less than
reasonable care.
E. In the event of termination of this Contract for any reason, both
parties shall return or destroy and certify to the other party the
return or destruction of all Confidential Information and
reproductions thereof. Notwithstanding the foregoing, Buyer may retain
certain confidential or proprietary information for an agreed period
of time for the sole purpose of servicing the Product after which time
Buyer shall then return such information to Seller.
11. CHANGES AND CONDITIONS
A. In the event of any change in the Product as a result of the
imposition of requirements by any federal, state or local government,
the prices will be adjusted equitably as agreed to by the parties, in
writing, to reflect the added cost and expense of such change.
B. Seller reserves the right to establish or change any of the
specifications or features of the Product, at any time, provided that
no such change may, without the prior written approval of Buyer,
affect the form or function of the Product or require a change to the
cabinet design.
-12-
<PAGE>
12. COMPLIANCE WITH LAWS
Buyer is responsible for ensuring that all Product complies with all
applicable state, federal and local laws and regulations that apply to such
Product. Seller is responsible for compliance with all applicable labor
laws of the jurisdiction in which the Product is manufactured.
13. TERMINATION OF CONTRACT
A. Either party may at any time by written notice immediately terminate
this Contract without compensation to the other party effective upon a
date which is at least one year following initial delivery, and upon
one hundred fifty (150) days written notice. However, any firm
accepted Order pending at the time of termination shall continue to be
binding on the parties.
B. Either party may by written notice terminate this Contract with
immediate effect if the other party has committed a substantial and
material breach of this Contract and, after receipt of written notice
from the other party specifying the breach, the breach is not
rectified within a time period which shall be reasonable taking into
account previous technical and other relevant conditions; provided,
however, that such time period shall not be less than fifteen (15)
days for corrective actions involving the payment of money and thirty
(30) days for all other purposes.
C. The acceptance of an Order from, or the sale of any Product to, Buyer
after the termination or expiration of this Contract shall not be
construed as a renewal or extension thereof, nor as a waiver of
termination but, in the absence of a new fully executed written
agreement, all such transactions shall be governed by provisions
identical with the provisions of this Contract.
D. This Contract shall terminate eighteeen (18) months from the Effective
Date of this Contract unless renewed by the Parties before
termination. Six (6) months following the date of this Contract, the
Parties shall review with each other whether they desire to renew this
Contract before termination.
-13-
<PAGE>
14. NOTICES
Notices and other communications between the parties shall be transmitted
by facsimile or in writing to the other parties at the addresses indicated
below and shall be deemed effective upon confirmed receipt. Either party
may change its address by giving notice in writing thereof to the other
party.
SELLER: UNIDEN CORPORATION
C/O 4701 Buckingham Rd.
Fort Worth, Texas 76155
Attention: Koji Uchiyama
Phone: (817) 858-3923
Fax: (817) 858-3266
BUYER: RELM WIRELESS CORPORATION
at 7505 Technology Drive
West Melbourne, Florida 32904
Attention: Scott Henderson
Phone: (321) 953-7899
Fax: (321) 984-0434
15. PARTIAL INVALIDITY
The invalidity, in whole or part, of any section or paragraph of these
terms shall not affect the validity of the remainder of such section or
paragraph, or of these terms. Section headings are inserted for convenience
only and shall not be used in any way to define the meaning of these terms.
16. ASSIGNMENT
Either party may assign its rights or obligations under this Contract to
any Affiliate of such party. Otherwise, neither party shall transfer or
assign its rights or obligations under this Contract.
17. PARTY RELATIONSHIP
-14-
<PAGE>
This Contract does not create any agency, joint venture or partnership
between Buyer and Seller. Neither party shall impose or create any
obligation or responsibility, express or implied, or make any promises,
representations or warranties on behalf of the other party or other than as
expressly provided herein.
18. GOVERNING LAW
A. The validity, performance and all matters relating to the
interpretation and effect of these terms and the Contract and any
amendment thereto shall be governed by the laws of the State of Texas
without reference to its rules with respect to conflict of laws. The
parties agree to the exclusive venue and jurisdiction of the United
States District Court for the Northern District of Texas, Dallas
Division.
B. If any controversies or disputes arise out of or relating to this
Contract, the parties shall first make efforts to resolve and settle
the same through a good faith negotiation initiated within ten (10)
days of receipt of written request for same by either party to the
other. If no resolution of such controversy or dispute is reached
within sixty (60) days of the original request (or by such other date
as the parties may agree in writing), then either party may elect to
pursue litigation of such controversy or dispute as provided herein.
19. SUCCESSORS AND ASSIGNS
The terms and provisions of this Contract shall inure to the benefit and be
binding upon the successors and permitted assigns of either Buyer or
Seller.
20. ENTIRE AGREEMENT
This Contract constitutes the entire understanding between the Buyer and
the Seller concerning the subject matter hereof, and any representation,
promise, understanding, proposal, agreement, warranty, course of dealing or
trade usage not expressly contained or referenced herein shall not be
binding on Seller. No modifications, amendment, rescission, waiver or other
change shall be binding on either party unless accepted in writing by that
party. NEITHER BUYER NOR SELLER ASSUMES ANY
-15-
<PAGE>
OBLIGATIONS OR LIABILITIES IN CONNECTION WITH THE SALE OF THE PRODUCT OTHER THAN
THOSE EXPRESSLY STATED IN THIS CONTRACT.
[Signature page follows]
-16-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be duly
executed by their duly authorized representatives as of the dates set forth
below.
UNIDEN CORPORATION RELM WIRELESS CORPORATION
By: By:
-------------------------------- ----------------------------------
Name: Name:
------------------------------ --------------------------------
Title: Title:
----------------------------- -------------------------------
Date: Date:
------------------------------ --------------------------------
Witness: Witness:
--------------------------- -----------------------------
Witness Name: Witness Name:
---------------------- ------------------------
-17-
<PAGE>
ATTACHMENTS:
APPENDIX A-1 & A-2 - PRODUCT
-18-
<PAGE>
APPENDIX A - 1
PRODUCT
MODEL PRICE FOB FACTORY
-19-
<PAGE>
APPENDIX A - 2
NEW MODEL ADDENDUM
NEW MODEL PRICE FOB FACTORY
Specifications:
Development schedule:
Tooling Costs:
Approved:
BUYER
SELLER
Uniden Corporation RELM Wireless Corporation
By: By:
-------------------------------- --------------------------------
Date: Date:
------------------------------ ------------------------------
TRADEMARK LICENSE AGREEMENT
BETWEEN
UNIDEN AMERICA CORPORATION
AND
RELM WIRELESS CORPORATION
FOR THE MARK "ESAS"
THIS TRADEMARK LICENSE AGREEMENT (hereinafter, the "Agreement") is entered
into effective as of March 13, 2000 (hereinafter, the "Effective Date"), by and
between Uniden America Corporation, a Delaware, United States, corporation,
having a place of business at 4700 Amon Carter Blvd., Fort Worth, Texas 76155
U.S.A. (hereinafter, "Seller"), and RELM Wireless Corporation, a Nevada
corporation, having a place of business at 7505 Technology Drive, West
Melbourne, Florida 32904 U.S.A. (hereinafter, "Buyer") (hereinafter Seller and
Buyer will collectively be referred to as the "Parties"). Capitalized terms used
in this Agreement will have the meanings set forth in the Asset Purchase
Agreement (as hereinafter defined).
W I T N E S S E T H:
--------------------
WHEREAS, Buyer and Seller have entered into a certain Asset Purchase
Agreement dated March 13, 2000 (the "Asset Purchase Agreement"), and a certain
Technology License Agreement of even date herewith;
WHEREAS, in connection with these agreements, Buyer desires the certain
rights to use the mark "ESAS(R)" as shown in Exhibit A (the "Marks") and Seller
is willing to grant permission to do so, on the terms and conditions hereinafter
provided.
NOW, THEREFORE, and in consideration of the promises and the mutual
agreements, covenants and provisions contained herein, the sufficiency of which
are hereby acknowledged and confessed, the Parties agree as follows:
1. License. Seller grants to Buyer and Buyer accepts a personal,
world-wide, non-exclusive, royalty-free right to use the Marks solely in
conjunction with (i) existing units of product models of Inventory Assets (as
defined in the Asset Purchase Agreement) that include ESAS brand technology and
(ii) other authorized products designed or developed by Buyer that include ESAS
brand technology. This License shall only apply in the field of specialized
mobile radio and land mobile radio. Buyer agrees not to use the Marks in any
manner, except as defined above, including, but not limited to, as any portion
of a product name, and in or as a business name.
2. NO REPRESENTATIONS OR WARRANTIES. SELLER MAKES NO REPRESENTATIONS OR
WARRANTIES EXPRESS OR IMPLIED REGARDING THE MARKS, INCLUDING, WITHOUT
LIMITATION, REPRESENTATIONS OR WARRANTIES
<PAGE>
REGARDING THE VALIDITY OF THE MARKS OR THE INFRINGEMENT OR NON-INFRINGEMENT OF
THE MARKS OR OF THE RIGHTS OF THIRD PARTIES. THE LICENSE IS RECEIVED BY BUYER IN
"AS IS, WHERE IS" CONDITION, WITH ALL FAULTS, IF ANY. THE LICENSE IS ONLY A
LICENSE OF WHATEVER INTEREST, IF ANY, SELLER HAS IN THE MARKS.
3. Enforcement. Nothing in this Agreement shall require Seller to bring
suit or otherwise enforce any of the Marks. Buyer shall inform Seller promptly
of any possible infringements of, or unfair competition affecting, the Marks
which come to the attention of Buyer.
4. Quality of Goods. Buyer shall use the Marks in accordance with the
guidance and directions furnished to Buyer by Seller or its representatives or
agents, from time to time, but always the quality of the goods shall be
satisfactory to Seller or as specified by it and shall be at a level consistent
with the quality maintained by Seller. Seller shall be the sole judge of whether
or not Buyer has met or is meeting the standards of quality so established.
5. Use of the Marks. Upon request, Buyer shall provide Seller with samples
of all goods, literature, brochures, signs and advertising material prepared by
Buyer bearing the Marks. When using the Marks under this Agreement, Buyer
undertakes to comply substantially with all laws pertaining to trademarks in
force at any time within the United States and within foreign jurisdictions.
This provision includes compliance with marking requirements.
6. Inspection. Buyer will permit duly authorized representatives of Seller
to inspect the premises of Buyer at all reasonable times, for the purposes of
ascertaining or determining compliance of use of the Marks as provided for
herein.
7. Indemnity. Seller assumes no liability to Buyer or to any third parties
with respect to use by Buyer of the Marks, and Buyer shall indemnify and hold
harmless Seller against any losses incurred arising from any claims of any third
parties against Seller based upon Buyer's use of the Marks or upon any sale or
other use of Inventory Assets, or products, made, owned or sold by Buyer that
bear any of the Marks. This indemnity is in addition to the indemnity in the
Asset Purchase Agreement.
8. Ownership of the Marks. Buyer acknowledges Seller's right, title and
interest in and to the Marks and any registrations that have issued or may issue
thereon, and Buyer agrees that it will not at any time do or cause to be done
any act or thing contesting or in any way impairing or tending to impair any
part of such right, title and interest. In connection with the use of the Marks,
Buyer shall not in any manner represent that it has any ownership in the Marks
or registrations thereof, and the Parties hereto acknowledge that any use of the
Marks, including all goodwill associated therewith, shall inure to the benefit
of Seller. Furthermore, Buyer will not at any time, during the term of this
Agreement or afterwards, adopt or use without Seller's prior written consent,
any word, mark, symbol or slogan which is likely to be similar to or confusing
with the Marks.
2
<PAGE>
9. Partnership; Agency. The Parties specifically intend that this Agreement
not constitute any agency, partnership, joint venture or similar agreement and
no agency, partnership, joint venture or similar arrangement is intended.
10. Assignments. Either party may assign its rights or obligations under
this Agreement to any Affiliate (as defined in the Asset Purchase Agreement) of
such party; provided, however, that the assignor must guaranty the obligations
and performance of the assignee. Otherwise, neither party shall transfer or
assign its rights or obligations under this Agreement. The terms and conditions
of this Agreement are binding upon Buyer and Seller and their respective
subsidiaries, parents, successors, permitted assigns, if any, and licensees, if
applicable.
11. Third Parties. Except as set forth or referred to herein, nothing in
this Agreement is intended or shall be construed to confer upon or give to any
party other than the Parties hereto and their successors and assigns any rights
or remedies under or by reason of this Agreement.
12. Notices. Any notices required or permitted to be given under this
Agreement shall be deemed sufficiently given if hand delivered with receipt
acknowledged, or mailed by certified or registered mail postage prepaid, or
mailed by a nationally recognized overnight delivery service addressed to the
Party to be notified at its address shown above, or to such other person or at
such other address as may be furnished in writing to the other Party hereto.
13. Entire Agreement. This Agreement encompasses the entire agreement and
understanding between the Parties hereto with respect to the subject matter
hereof, and shall be governed, construed and enforced exclusively in accordance
with the laws of the State of Texas, notwithstanding any conflict of law
principles in that jurisdiction, and the Parties agree, to the exclusive venue
and jurisdiction of the United States District Court for the Northern District
of Texas, Dallas Division.
14. Severability. If any of the provisions of this Agreement are determined
to be invalid or unenforceable, such invalidity or unenforceability will not
invalidate or render unenforceable the remainder of this Agreement, but rather
the entire Agreement will be construed as if not containing the particular
invalid or unenforceable provision or provisions, and the rights and obligations
of the Parties hereto shall be construed and enforced accordingly. The Parties
hereto acknowledge that if any provision of this Agreement is determined to be
invalid or unenforceable, it is their desire and intention that such provision
be reformed and construed in such manner that it will, to the maximum extent
practicable, be deemed to be valid and enforceable.
15. Term and Termination. The term of this Agreement shall be for a period
of eighteen (18) months commencing on the Effective Date. This Agreement may be
terminated for any reason or no reason by Seller upon thirty (30) days written
notice given by Seller to Buyer. Upon termination or expiration of this
Agreement, Buyer shall immediately discontinue use of the Marks in advertising
or any other promotional manner. Any remaining inventory bearing the Marks may
be sold by Buyer for a period of no more than two (2) years after the date of
termination or expiration of this Agreement.
3
<PAGE>
SELLER:
UNIDEN AMERICA CORPORATION
By: ______________________________________________
Printed Name: _______________________________
Title: _______________________________________
State of Texas ss.
ss.
County of Dallas ss.
On this ____ day of ______________, 2000, personally appeared
__________________, to me known and known to me to be _______________ of Uniden
America Corporation and acknowledged that he/she executed the foregoing
Agreement on behalf of Uniden America Corporation and pursuant to authority duly
received.
[SEAL]
--------------------------------------------------
Notary Public
4
<PAGE>
BUYER:
RELM WIRELESS CORPORATION
By: ______________________________________________
Printed Name: _______________________________
Title: _______________________________________
ss.
ss.
ss.
On this ______ day of ______________, 2000, personally appeared
____________, to me known and known to me to be ____________________ of RELM
Wireless Corporation and acknowledged that he/she executed the foregoing
Agreement on behalf of RELM Wireless Corporation and pursuant to authority duly
received.
[SEAL]
--------------------------------------------------
Notary Public
5
<PAGE>
EXHIBIT A
TRADEMARK
ESAS
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> DEC-31-1999 DEC-31-1998
<CASH> 1 464
<SECURITIES> 1 749
<RECEIVABLES> 1,966 3,498
<ALLOWANCES> 1,672 1,565
<INVENTORY> 10,211 10,566
<CURRENT-ASSETS> 13,080 15,974
<PP&E> 8,024 8,829
<DEPRECIATION> 6,750 5,323
<TOTAL-ASSETS> 22,853 26,827
<CURRENT-LIABILITIES> 7,404 9,401
<BONDS> 0 0
0 0
0 0
<COMMON> 3,053 3,027
<OTHER-SE> 3,324 5,644
<TOTAL-LIABILITY-AND-EQUITY> 22,853 26,827
<SALES> 22,404 29,530
<TOTAL-REVENUES> 22,404 29,530
<CGS> 16,618 22,864
<TOTAL-COSTS> 24,126 33,696
<OTHER-EXPENSES> (507) (56)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,079 797
<INCOME-PRETAX> (2,294) (4,907)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (2,294) (4,907)
<DISCONTINUED> 0 (725)
<EXTRAORDINARY> 0 227
<CHANGES> 0 0
<NET-INCOME> (2,294) (5,405)
<EPS-BASIC> (.45) (1.07)
<EPS-DILUTED> (.45) (1.07)
</TABLE>
