EXHIBIT 10.3
JOINT VENTURE AGREEMENT
THIS AGREEMENT is made effective as of 20 OCTOBER, 1993, by and between
RACOM SYSTEMS, INC. ("RACOM"), a Delaware corporation located at 0000 Xxxxxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 and NITTETSU SHOJI CO., LTD. ("NS"),
a Japanese company located at___________________________________________________
________________________________________________________________________________
(collectively, the "Shareholders")
RECITALS
WHEREAS, the Shareholders desire to form a joint venture corporation
dedicated primarily to serve as a Japanese distributor of RACOM's radio
frequency identification products and systems.
WHEREAS, the Shareholders desire to acquire the stock of such corporation,
and the Shareholders desire to provide for certain other matters regarding the
management of such corporation.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
hereinafter set forth, the Shareholders agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall, unless the
context otherwise requires, have the meanings set forth below:
1.1 "APPROVAL BY THE BOARD OF DIRECTORS" shall mean approval in the manner set
forth in Section 23 of the Articles of Incorporation of the Joint Venture.
1.2 "BOARD OF DIRECTORS" means the board of directors of the Joint Venture,
constituted as described in Article V below.
1.3 "CLOSING" AND "CLOSING DATE" shall have the meanings set forth in Article
VI of this Agreement.
1.4 "CONTROL" means the power to direct or cause the direction of the
management and policies of an individual, corporation, partnership, firm,
or other entity, whether through ownership of its voting securities or by
contract or otherwise. Without limiting the foregoing, the ownership of
shares comprising
more than fifty percent (50%) of the voting power of a corporation shall
be deemed to constitute control.
1.5 "EXCLUSIVE DISTRIBUTOR AGREEMENT" means the Exclusive Distributor
Agreement to be entered into by and among the Joint Venture, RACOM and NS
concurrent with the execution of this Agreement.
1.6 "EXCLUSIVE IMPORT AGREEMENT" means the Exclusive Import Agreement to be
entered into by and between RACOM and NS concurrent with the execution of
this Agreement.
1.7 "JOINT VENTURE" means the corporation to be organized pursuant to Section
2.1.
1.8 "SHARES" means the shares of capital stock issued or issuable by the Joint
Venture
ARTICLE II
ESTABLISHMENT OF THE JOINT VENTURE
2.1 FORMATION OF THE JOINT VENTURE. As soon as practical after the execution
of this Agreement, NS and Racom shall cause the Joint Venture to be
organized as a corporation pursuant to the laws of Japan and the
provisions of this Agreement. The name of the Joint Venture shall be
"Racom Japan, Inc." The organizational documents of the Joint Venture
shall be in the form attached hereto as Exhibit A.
2.2 FURTHER ACTION. The Shareholders shall cause the Joint Venture to file
any and all reports and notices and shall take any and all other further
action necessary or appropriate to establish and maintain its existence in
good standing under the laws of the Japan.
ARTICLE III
PURPOSES OF THE JOINT VENTURE
3.1 GENERAL PURPOSE. The Joint Venture is formed for the purpose of
developing and increasing the market for RACOM's radio frequency
identification products ("Products"), and selling and distributing the
Products in Japan. Without limiting the generality of the foregoing, the
Joint Venture will provide technical support, engineering data and
information regarding the Products, as well as providing software
development and manufacturing support for the Products with a view toward
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promoting, coordinating and supporting sales of the Products to Japanese
customers. The Joint Venture will also provide customer service such as
claim processing and verification of quality and reliability of the
Products. The Joint Venture may also undertake such other business
opportunities as the Shareholders shall deem appropriate.
3.2 COOPERATION. The Shareholders agree to cooperate with each other in good
faith in the fulfillment of the above purposes and activities and
otherwise in the implementation of the provisions of this Agreement.
ARTICLE IV
CAPITALIZATION, SALE OF SHARES AND RESTRICTIONS ON TRANSFER
4.1 CAPITALIZATION AND CAPITAL STOCK. The Joint Venture shall have one class
of shares, designated Common Stock, having the rights, preferences and
privileges set forth in the Articles of Incorporation. The authorized
capital stock of the Joint Venture shall consist of Two Thousand Four
Hundred (2,400) shares of Common Stock.
4.2 PURCHASE AND SALE OF SHARES.
At the Closing, the Joint Venture shall issue and sell and the
Shareholders shall purchase the number of Shares of Common Stock set forth
below opposite the name of each such Shareholder at a purchase price of
50,000 Japanese Yen per share, payable in cash:
NAME NUMBER OF SHARES
NS 300
RACOM 300
Any additional capital required by the Joint Venture shall be provided, if
at all, only upon terms mutually agreeable to the Shareholders.
4.3 RESTRICTIONS ON TRANSFER. No shareholder may sell, pledge, assign or
otherwise transfer, in whole or in part, any Shares during the two (2)
year period following the Closing without the express, prior written
consent of the other Shareholder. Each stock certificate representing the
Shares shall be stamped or otherwise imprinted with a legend in
substantially the following form:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE TERMS OF THE JOINT VENTURE AGREEMENT PURSUANT TO WHICH THE COMPANY
WAS FORMED. COPIES OF THE JOINT VENTURE AGREEMENT COVERING THE
PURCHASE OF THESE SECURITIES AND RESTRICTING THEIR TRANSFER MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY."
Each Shareholder consents to the Joint Venture making a notation on its
records and giving instructions to any transfer agent of the Shares in
order to implement the restrictions on transfer described in this Section.
Each Shareholder shall cause any approved transferee of the Shares held by
such Shareholder to agree in writing to take and hold such Shares subject
to the provisions and upon the conditions specified in this Agreement.
4.4 RIGHT OF FIRST REFUSAL. At anytime after the two (2) year period
following the Closing, no Shareholder may sell, assign, pledge or
otherwise transfer, in whole or in part, any of the Shares except in
accordance with the following restrictions:
(a) If any Shareholder shall receive an offer to purchase any or all of
the Shares held by such Shareholder, such Shareholder (the "Offering
Shareholder") shall first give written notice to the other
Shareholder stating its intention to transfer, the name of the
proposed transferee, the number of offered Shares and the price,
terms and conditions of the proposed sale or transfer.
(b) The other, non-offering Shareholder shall have the right to purchase
all (but not less than all) of the Shares offered, which right shall
be exercisable by written notice specifying the number of Shares
which the non-offering Shareholder wishes to purchase, delivered or
mailed to the offering Shareholder not later than the expiration of
thirty (30) days after delivery of the written notice of intention to
sell. The price and terms of purchase by the non-offering
Shareholder shall be the price and terms stated in the notice.
(c) If the non-offering Shareholder does not exercise its right to
purchase all of the offered Shares within such thirty (30) day
period, the offering Shareholder may within sixty (60) days after
expiration of such right,
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sell or transfer the Shares specified in the notice to the transferee
named in the notice; provided that (i) such sale or transfer is not
at a lower price or on terms more favorable to the transferee than
those specified in the written notice; (ii) prior to such transfer,
such transferee agrees in writing to become bound by this Article IV;
(iii) any such transfer shall not serve to excuse or terminate any of
the obligations of the transferring Shareholder as a party to this
Agreement and such transferring Shareholder shall continue to be
bound by this Agreement as if it continued to hold the Shares so
transferred unless the transferee (who shall be reasonably acceptable
to the non-offering Shareholder) agrees in writing to assume all of
the obligations of the transferring Shareholder and to be so bound.
ARTICLE V
MANAGEMENT.
5.1 BOARD OF DIRECTORS. The number of members of the Board of Directors shall
be fixed at four (4). Each Shareholder shall have the right to select two
(2) persons to serve on the Board of Directors. Each Shareholder shall
vote its Shares to cause the election to the Board of Directors of the
persons selected by the other Shareholder. All actions of the Board of
Directors shall require approval by the Board of Directors as defined in
Section 1.2 hereof. The Board of Directors shall meet on a regular basis
as it determines from time to time, but not less than four (4) times per
year unless the Shareholders agree otherwise. The Board of Directors
shall select its Chairman by mutual agreement. The Board of Directors
will manage the affairs of the Joint Venture in accordance with the
Articles of Incorporation, those pertinent provisions of this Joint
Venture Agreement and the laws of Japan. The matters to be considered and
resolved by the Board of Directors include the following:
1) Amendment to or alteration of the Articles of Incorporation;
2) Increase or decrease of the issued capital;
3) Liquidation, winding-up or dissolution of the Joint Venture;
4) Merger or amalgamation with or into any third party;
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5) Change in the business of the Joint Venture in any material respect;
6) Commencement of a new business, or investment in a third party or new
business;
7) Acquisition or disposition of assets or property having a value
exceeding one million yen;
8) Obtaining a loan;
9) Making a guarantee or becoming otherwise liable in respect of any
loan to third parties;
10) Adopting an annual operating plan;
11) Entering into any important contract;
12) Declaration of dividends;
13) Appointment of auditors and approval of their remuneration;
14) Any other matters which are stipulated to be resolved by a meeting of
the Board of Directors under the Japanese Commercial Code; and
15) Any other important matters which are deemed necessary by the Board
of Directors.
5.2 OFFICERS. ________________________is hereby appointed President of the
Joint Venture until such time as the Board of Directors selects his
successor. The President of the Joint Venture shall be responsible for
day-to-day management of the business operations of the Joint Venture,
subject, however, to the directions of the Board of Directors, the terms
of this Agreement and the terms of the Articles of Incorporation of the
Joint Venture.
5.3 OPERATING PLAN. Within ____________ (___) days after the date hereof, the
Board of Directors shall propose an operating plan for the conduct of the
Joint Venture's business for the succeeding twelve months, ending on the
first anniversary date of this Agreement. Such operating plan shall be
subject to the approval of the Board of Directors. The Board of Directors
annually hereafter shall propose an operating plan for the conduct of the
Joint Venture's business for the succeeding twelve months, or such other
budget period as may be agreed upon by the Board of Directors. Each
subsequent operating plan shall also be subject to the approval of the
Board of Directors.
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5.4 LIMITATION OF LIABILITY; INDEMNITY. The individual liability of members
of the Board of Directors with respect to action or inaction in such
capacity shall be limited to the maximum extent permitted under applicable
law. Further, the Joint Venture shall indemnify and hold harmless the
individual members of the Board of Directors to the maximum extent
permitted under applicable law.
5.5 FAILURE TO AGREE.
(a) If the Board of Directors fails to approve a proposed operating plan
at three consecutive meetings of the Board of Directors or if any
unresolved matter prevents the Joint Venture's continued operation in
accordance with the then approved operating plan unless mutually
resolved, then, unless such proposal or matter is resolved by the
affirmative vote of all of the Board of Directors, a "failure to
agree" will be deemed to have occurred. If a failure to agree
occurs, then the Shareholders shall negotiate in good faith to
resolve the matter for sixty (60) days. If such negotiations do not
resolve the matter, then a "buy/sell right" will be deemed to have
occurred and the provisions of paragraph 5.5(b) will apply.
(b) Within thirty (30) days after a buy/sell right occurs, the
Shareholders shall submit to a major international public accounting
firm approved by them (such approval not to be unreasonably withheld)
a sealed written unconditional offer denominated in United States
Dollars to purchase all of the other party's Shares in the Joint
Venture. The offer shall be stated in an amount per Share of Common
Stock. The Shareholder's offer with the highest price per Share of
Common Stock shall be deemed to be the "Purchasing Shareholder."
The other Shareholder shall be deemed to be the "Selling
Shareholder." The Selling Shareholder shall promptly thereafter sell
all of its Shares of Common Stock to the Purchasing Shareholder for
an amount equal to the product of the Purchasing Shareholder's offer
per Share times the number of Shares of Common Stock owned by the
Selling Shareholder. The purchase price will be paid by delivery of
cash to the Selling Shareholder within sixty (60) days after
determination of the highest offer. If the offers submitted by
the Shareholders are exactly equal, the accounting firm will notify
each Shareholder and each Shareholder will submit, within fifteen
(15) days, a new sealed written unconditional offer denominated in
United States Dollars to purchase the other party's Shares of Common
Stock and the foregoing procedures shall apply.
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5.6 ACTIONS BY SHAREHOLDERS. With respect to all matters which require or are
subjected to a vote or action by written consent of the Shareholders of
the Joint Venture, NS and RACOM agree that: (a) they shall consult with
each other and (b) each party shall vote its Shares of Common Stock the
same as the other party. In the event that NS and RACOM are unable or
unwilling to vote their Shares the same, then both NS and RACOM shall be
obligated to vote their Shares against the adoption of the matter or
matters that are the subject of the shareholder vote or action by written
consent.
ARTICLE VI
CONDITIONS TO CLOSING; CLOSING AND EFFECTIVENESS OF THE AGREEMENT
6.1 CONDITIONS TO CLOSING. The obligations of each party to consummate the
transactions contemplated hereby are subject to the satisfaction of each
of the following conditions or the waiver thereof by such party
(a) JOINT VENTURE. All actions necessary for the due incorporation and
organization of the Joint Venture in accordance with the Articles of
Incorporation and this Agreement shall have been taken.
(b) GOVERNMENTAL CONSENTS. All required governmental consents to the
transactions contemplated hereby shall have been obtained, all
required notifications to governmental authorities shall have been
made and all waiting periods with respect thereto shall have expired.
(c) CONSENTS AND WAIVERS. All waivers, consents and permissions required
for the execution and performance of this Agreement and the
transactions contemplated thereby by the Shareholders shall have been
obtained.
6.2 CLOSING. Subject to the satisfaction or waiver of all conditions to
Closing, the Closing shall occur as soon thereafter as all such conditions
have been satisfied or waived (the "Closing Date"). At the Closing:
(a) INVESTMENT. NS and RACOM shall each purchase the Shares of Common
Stock identified for purchase at the Closing pursuant to Section 4.2
hereof and the Joint Venture shall deliver certificates to the
Shareholders representing such shares against payment therefor in
accordance with this Agreement.
(b) EXCLUSIVE DISTRIBUTOR AGREEMENT. NS, RACOM and the Joint Venture
shall concurrently enter into the Exclusive Distributor Agreement.
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(c) EXCLUSIVE IMPORT AGREEMENT. NS and RACOM shall concurrently enter
into the Exclusive Import Agreement.
6.3 EFFECTIVENESS OF AGREEMENT. On the Closing Date this Agreement shall be
deemed effective as of____________, 1993.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES BY THE SHAREHOLDERS. Each Shareholder
hereby represents and warrants to the other Shareholder that:
(a) It is a corporation duly organized and existing under, and by virtue
of, the laws of its jurisdiction of incorporation and is in good
standing under such laws.
(b) It has now, and will have at any time, all requisite legal and
corporate power to enter into this Agreement and to carry out and
perform it obligations under the terms of this Agreement.
(c) All corporate action on the part of such Shareholder, its officers,
directors, and shareholders necessary for the performance of its
obligations under this Agreement and the transactions contemplated
hereby have been taken as of the date hereof. This Agreement is a
valid and binding obligation of such Shareholder.
(d) Such Shareholder understands that no public market now exists for any
of the securities issued by the Joint Venture and that there is no
assurance that a public market will ever exist for the Shares.
ARTICLE VIII
CONFIDENTIALITY
8.1 OBLIGATION OF CONFIDENTIALITY. Contemporaneously with the execution
hereof, the parties to this Agreement have entered into a Confidentiality
Agreement, in the form attached hereto as Exhibit "_", relative to the
preservation of the strict confidentiality of any information given to
them by any other party and identified as being confidential, including
only disclosing it to those employees to whom it is necessary or
appropriate in order to perform its obligations consistent with the terms
of this Agreement.
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8.2 EMPLOYEES OF JOINT VENTURE. The Joint Venture shall require all of its
employees to enter into a nondisclosure and assignment of invention
agreement upon commencement of their employment pursuant to which such
employee shall agree not to disclose or use confidential information
acquired from the Joint Venture or the Shareholders and shall agree to
assign inventions to the Joint Venture.
ARTICLE IX
TERM AND TERMINATION
9.1 TERM AND TERMINATION AFTER CLOSING. After the Closing, this Agreement
shall continue in full force and effect for a period of two (2) years or
until earlier terminated as set forth herein.
9.2 TERMINATION FOR DEFAULT. If a party defaults in the performance of any
obligation under this Agreement, the other party may give written notice
to the defaulting party specifying the nature of the default and demanding
that it be cured. If, within thirty (30) days after notice of default,
the defaulting party shall not have remedied the default, then this
Agreement may, at the election (in writing) of the non-defaulting party,
be terminated.
9.3 TERMINATION FOR INSOLVENCY. This Agreement may be terminated by either
party by written notice (i) upon the institution by the other party of
insolvency, receivership, bankruptcy or similar proceedings for the relief
of indebtedness; (ii) upon the institution of such proceedings against the
other party, which are not dismissed or otherwise resolved in such party's
favor within sixty (60) days thereafter; (iii) upon the other parties
making a general assignment for the benefit of creditors; or (iv) upon the
other party's dissolution or ceasing to do business in the normal course.
9.4 ADDITIONAL RIGHTS UPON DEFAULT. In addition to the rights set forth in
Section 9.2 and 9.3 above, upon the occurrence of any of the events
described therein, the non-defaulting party (in the case of Section 9.2)
or the non-affected party (in the case of Section 9.3) shall have the
right to either (i) purchase all (but not less than all) of the other
party's Shares or (ii) require the defaulting party to purchase all (but
not less than all) of the non-defaulting party's Shares. Such right shall
be exercisable by written notice delivered or mailed to the other party
not later than the expiration of thirty (30) days after the non-defaulting
party has received notice of the occurrence of one of the above events.
The purchase price shall be the fair market value of the selling party's
Shares, based upon the fair market value of the Joint
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Venture as a going concern. The parties shall negotiate such value in
good faith. In the event the parties are unable to agree upon such value
within sixty (60) days from the date of the non-defaulting party's notice
of the exercise of its right to purchase such Shares, then such value
shall be determined by binding arbitration pursuant to the provisions of
Section 10.8. The purchase and sale transaction contemplated herein shall
then be consummated within twenty (20) days after determination of the
applicable purchase price.
9.5 DISSOLUTION OF JOINT VENTURE. This Agreement shall terminate upon the
dissolution of the Joint Venture.
9.6 EFFECT OF TERMINATION. The provisions of Article VIII shall survive the
termination of this Agreement for any reason. In the event of termination
for any reason, the parties shall take all actions necessary to dissolve
and liquidate the corporation in accordance with applicable law.
9.7 REVISION OF OPERATING PLAN. In the event that accumulated losses of the
Joint Venture are anticipated to exceed thirty million (30 million) yen,
the Shareholders shall meet to discuss in good faith whether the
operations of the Joint Venture shall be revised or, possibly,
discontinued.
ARTICLE X
GENERAL PROVISIONS
10.1 DISCLAIMER OF AGENCY. This Agreement shall not constitute any Shareholder
as the legal representative, partner or agent of any other Shareholder,
nor shall any Shareholder have the right or authority to assume, create,
or incur any liability or any obligation of any kind, express or implied,
against or in the name of or on behalf of any other Shareholder.
10.2 FORCE MAJEURE. No Shareholder shall be responsible to the other for
failure or delay in fulfillment of all or part of this Agreement, directly
or indirectly, owing to any causes or circumstances beyond the reasonable
control of such Shareholder, including but not limited to, Acts of God,
governmental order or restrictions, war, warlike conditions, hostilities,
sanctions, mobilization, blockage, embargo, detention, revolution riot,
looting, strike, stoppage of labor, lock-out or other labor trouble, fire
or accident, provided that the Shareholder whose performance is delayed
promptly resumes performance once it is reasonably possible
to do so.
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10.3 ASSIGNMENT OF AGREEMENT. No Shareholder shall have the right or power to
assign, transfer, or otherwise dispose of this Agreement in whole or in
part to any individual, firm or corporation, without the prior written
consent of the other Shareholder; provided, however, that a Shareholder
may assign its rights and obligations under this Agreement to a successor
to all or substantially all of its assets, whether by sale, merger, or
otherwise, if the successor (who shall be reasonably acceptable to the
other Shareholder) agrees in writing to be bound by this Agreement. For
purposes of this Section, any change in the Control of a party shall be
deemed to be an attempted transfer of this Agreement by that party, and
shall be subject to the terms and conditions of this Section 10.3.
10.4 AMENDMENTS. No amendments, modifications or waivers to this Agreement
shall be effective for any purpose unless in writing and signed by an
authorized officer of each Shareholder.
10.5 NOTICES. All notices required or contemplated by this Agreement from
either Shareholder shall be in writing and shall be delivered either (a)
by personal delivery; (b) by registered or certified airmail, postage
prepaid; or (c) by telecopy, confirmed by registered or certified airmail,
postage prepaid. All notices delivered by airmail or telecopy shall be
addressed as follows:
If to RACOM: Racom Systems, Inc.
0000 Xxxxxxxxx Xxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
If to NS: Nittetsu Shoji Co., Ltd.
________________________
________________________
________________________
Such addresses may be changed from time to time by notice delivered in
accordance with this Section. The effective date of any notice delivered
in accordance with this Section, as the case may be, shall be (a) the date
of personal delivery; (b) the fifth day after the date of airmail; or (c)
the first business day after transmission of telex or telecopy.
10.6 WAIVERS. No waiver, forbearance or failure by either Shareholder of its
right to enforce any provision of this Agreement shall constitute a waiver
or estoppel of such Shareholder's right to enforce such provision
thereafter or to enforce any other provision of this Agreement.
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10.7 GOVERNING LAW. This Agreement shall be governed by the laws of Japan.
10.8 ARBITRATION. Any dispute or claim arising out of or in connection with
this Agreement will be finally settled by binding arbitration in Japan, if
Racom initiates the arbitration, or in Denver, Colorado, if NS initiates
the arbitration, under the Rules of Arbitration of the International
Chamber of Commerce by one arbitrator appointed in accordance with those
rules. The arbitrator will apply Japanese law to the merits of any
dispute or claim, without reference to rules of conflicts of law. The
arbitration and all pleadings and written evidence shall be in the English
language. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing,
the parties may apply to any court of competent jurisdiction for temporary
or preliminary injunctive relief without breach of this arbitration
provision.
10.9 COMPLIANCE. Each Shareholder agrees to cause the Joint Venture to perform
all acts which may be required of the Joint Venture under the provisions
of this Agreement. A copy of this Agreement shall be filed in the records
of the Joint Venture and the Shareholders shall cause the Joint Venture to
be bound by all provisions applicable to it.
10.10 COSTS AND EXPENSES. Each party shall bear its own costs and expenses
incurred in connection with this Agreement.
10.11 SEVERABILITY. In the event that any provisions or any part of any
provisions of this Agreement shall be held invalid, illegal or
unenforceable under applicable law, such provision shall be severed from
this Agreement, the remainder of this Agreement shall remain valid and
enforceable, and the parties shall negotiate in good faith a substitute
provision to effectuate, to the extent practicable, the intent of the
severed provisions.
10.12 BINDING ON SUCCESSORS. Except as otherwise specifically provided herein,
this Agreement shall be binding upon and inure to the benefit of the
Shareholders and their respective legal representatives, heirs,
administrators, executors, successors and assigns.
10.13 CONFLICT WITH ORGANIZATIONAL DOCUMENTS. In the event of any conflict
between the terms of this Agreement and the Articles of Incorporation, the
terms of this Agreement shall prevail and the Shareholders shall forthwith
cause such necessary amendments to the Articles of Incorporation as are
required to remove such conflict.
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10.14 EXPORT CONTROLS. Each party agrees to comply with all applicable
governmental export controls with respect to products, items, technology
and information pertaining to this Agreement.
10.15 COUNTERPARTS. This Agreement may be signed in multiple counterparts, each
of which shall be deemed an original and all of which shall constitute
one and the same instrument.
10.16 LETTER OF INTENT. The parties agree that the terms and provisions of this
Agreement hereby supersede all of the terms and provisions of the Letter
of Intent dated April 23, 1993 and all other discussions, negotiations and
agreements, whether written or oral, with respect to the subject matter
of the Letter of Intent.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives effective as of the day and year first
above written.
RACOM SYSTEMS, INC. NITTETSU SHOJI CO., LTD.
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
------------------------------ ------------------------------------
Title: PRESIDENT Title: MANAGING DIRECTOR
--------------------------- --------------------------------
Date: 20 Oct. 1993 Date: 20 Oct. 1993
--------------------------- ----------------------------------
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Attachment A
9.4 Additional Rights Upon Default. In addition to the rights set forth in
Section 9.2 and 9.3 above, upon the occurrence of any of the events
described therein, the non-defaulting party (in the case of Section 9.2)
or the non-affected party (in the case of Section 9.3) shall have the
right to either (i) purchase all (but not less than all) of the other
party's Shares or (ii) require the defaulting party to purchase all (but
not less than all) of the non-defaulting party's Shares. Such rights
shall be exercisable by written notice delivered or mailed to the other
party not later than the expiration of thirty (30) days after
(i) the date of the written notice from the non-defaulting party to the
defaulting party under the terms of Section 9.2; or
(ii) the date on which the non-affected party learns of the occurrence of
the events described in Section 9.3.
The purchase price shall be the fair market value of the selling party's Shares,
based upon the fair market value of the Joint Venture as a going concern. The
parties shall negotiate such value in good faith. In the event the parties are
unable to agree upon such value within sixty (60) days from (i) the date of the
non-defaulting party's notice of the exercise of its right to purchase such
Shares, (ii) the date of the non-defaulting party's notice of the exercise of
its right to have the defaulting party purchase
such Shares, or (iii) the date of the non-affected party's notice of the
exercise of its right to purchase such Shares, then such value shall be
determined by the portion constituted by said Shares of the total amount of the
net asset value of the Joint Venture based on its assets and liabilities
according to the company account books. The purchase and sale transaction
contemplated herein shall then be consummated within twenty (20) days after
determination of the applicable purchase price.
Addendum to the Joint Venture Agreement
This Addendum, made and entered into this 19th day of October, 1993 by and
between RACOM SYSTEMS, INC. (hereinafter referred to as "RACOM") and Nittetsu
Shoji Co., Ltd. (hereinafter referred to as "NS")
WITNESSETH:
WHEREAS, RACOM and NS entered into a Joint Venture Agreement (hereinafter
referred to as the "Agreement") on October 19th, 1993 and RACOM and NS desire to
amend said Agreement.
NOW, THEREFORE, it is agreed as follows:
1. Article 1.
(1) Section 1.5 shall be amended as follows:
"Exclusive Distributor Agreement" shall refer to the Exclusive
Distributor Agreement to be entered into between the Joint Venture
and RACOM.
(2) Section 1.6 shall be amended as follows:
"Exclusive Import Agreement" shall refer to the Exclusive Import
Agreement to be entered into between RACOM and NS.
2. Article 2.
Both parties hereby confirm the establishment of Racom Japan Inc., on July
12th, 1993.
3. Article 4.
Both parties hereby confirm that, as stipulated in Section 4.2, shares
were issued by the Joint Venture and were purchased by the Shareholders.
4. Article 5.
The eighth line in Section 5.1 shall be amended from "Section 1.2" to
"Section 1.1."
5. Article 6.
(1) Section 6.2 (b) shall be amended as follows:
RACOM and the Joint Venture shall enter into the Exclusive
Distributor Agreement.
6. Article 9.
(1) Section 9.1 shall be amended as follows:
After the closing, this Agreement shall continue in full force and
effect for a period of two(2) years and at the end of this period,
NS and RACOM shall review the Joint Venture's results and make any
changes as NS and RACOM shall mutually decide.
(2) Section 9.4 shall be amended to read as indicated in attachment A.
RACOM SYSTEMS, INC. NITTETSU SHOJI CO., LTD.
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
---------------------------- ------------------------------
Title: PRESIDENT Title: MANAGING DIRECTOR
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Date: 20 Oct. 1993 Date: 20 Oct. 1993
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