EXHIBIT 10.3
AGREEMENT
This agreement is between Merit Microwave, Inc., Xxxxx X. Xxxxxxxxx and
Radyne Inc. This agreement is for the sale of assets of Merit Microwave, Inc.
(Merit) to the Radyne Inc. (Radyne). This agreement also contains the terms
and conditions for Radyne to assume the manufacturing rights to the Merit
product line and to provide an employment contract for Xxxxx X. Xxxxxxxxx.
Warranties
Merit warrants that it is authorized to enter into this agreement and that
the intellectual properties and other assets described herein are the
property of Merit Microwave, Inc.
Radyne warrants that it is authorized to enter into this agreement and has
the capacity to meet the terms of the described sale.
The Terms of the sale are as follows:
1. Merit agrees to sell the inventory and capital equipment assets outlined
in the attachment to Radyne for $60,000 in cash payable in 4 quarterly
installments and 150,000 unrestricted shares, within legal requirements, of
Radyne common stock to be transferred to Merit Microwave, Inc. c/o Xxxxx X.
Xxxxxxxxx. Seventy five thousand (75,000) shares will be due as soon as
practical after execution of this agreement. The remaining 75,000 shares will
vest and be due in three increments, each twenty five thousand (25,000)
shares for each 6 months of employment of Xxxxx X. Xxxxxxxxx. In the event
that Radyne is unable to issue stock to Merit c/o Xxxxx Xxxxxxxxx within 6
months of this agreement, Radyne will instead pay merit $60,000 in cash. If
treasury stock in Radyne is available for issuance to Merit as described
above, then the cash settlement is not optional.
2. Xxxxx X. Xxxxxxxxx accepts the Radyne employment offer as president of the
Radyne Microwave Products Division. Xxxxx Xxxxxxxxx will have P&L
responsibility for the translator and frequency converter products at an
annual salary of $75,000. Xxxxx Xxxxxxxxx agrees to provide 1 year minimum
service and Radyne agrees to provide employment for period not less than 1
year. Completion of this first year of service are not grounds for
termination.
3. Merit shall provide a leased Tektronix 2782 33 GHz Color Spectrum Analyzer
($37,673 36 month lease/purchase though AT&T Capital, lease #397855) to
Radyne under the following sublease agreement:
Radyne shall assume the remaining 21 lease payments of $1382.23 each payable
to Merit. At the end of the lease period Merit shall offer title of this
equipment to Radyne for the buy-out sum of $15,000. Radyne has the right to
refuse the terms of the buy-out in which case Merit may then assume title to
the equipment. If the employment of Xxxxx Xxxxxxxxx terminates for whatever
reason before maturity of the lease, Merit will retain possession of the
equipment and shall resume the lease payments.
The following terms and conditions shall also apply:
4. Radyne agrees to offer full-time employment opportunity to the two
existing staff of Merit at a salary not less than currently being paid by
Merit, which is $10/Hr for an electronics assembler and $35,000 per year for
an engineer.
5. Merit shall retain all rights to existing designs and intellectual
property of Merit as outlined in the attached schedule. Merit agrees not to
compete with Radyne with these existing designs for the duration of the terms
of this agreement.
6. This agreement, and while it is in effect, grants Radyne the unlimited
rights to manufacture and market all modules, submodules, and especially the
Merit Test Translator product line as outlined in the existing designs and
intellectual property schedule of paragraph 5. Xxxxx Xxxxxxxxx, as an
employee of Radyne shall provide the existing as-is drawings, designs and
engineering assistance to manufacture and sell these products through Radyne.
Xxxxx Xxxxxxxxx has the right to make modifications and improvements to the
product line while at Radyne and this ongoing engineering shall not render
the Merit name or product line obsolete, and as such shall not alter the
provisions for royalties outlined paragraph 10.
7. Xxxxx Xxxxxxxxx agrees to freely submit all ongoing synthesizer and
frequency converter designs as outlined in the attached schedule at Merit for
use by the Radyne microwave products division. Merit shall retain rights to
this technology but shall grant unlimited shop rights of this intellectual
property to Radyne to use in new products. All new designs and products are
the property of Radyne and are not transferable to Merit upon termination of
this agreement.
8. As the sole authorized manufacturer of the Merit product line, Radyne
agrees to retain the Merit name and logo on the translator product line and
assumes all liability for warranty repair and customer support for existing
customers. The Merit name, if other than currently used (with the exception
of the Radyne below it) will require approval by Xxxxx Xxxxxxxxx.
9. Merit shall discontinue all marketing and sales of test translator
products while Xxxxx Xxxxxxxxx is employed at Radyne. Sales of Merit
products invoiced on or after execution of this agreement and after Xxxxx
Xxxxxxxxx begins active employment at Radyne become the revenues of Radyne.
Although the business activity of Merit will be sharply curtailed by the sale
of assets and the assignment of Xxxxx Xxxxxxxxx to employment status at
Radyne,
maintaining the corporate status of Merit as required shall not be deemed as
a conflict of interest.
10. For as long as Radyne manufactures Merit translator products and while
Xxxxx Xxxxxxxxx is an employee of Radyne, Radyne shall pay royalties to Merit
at the following:
XXX0000 X-xxxx or any Single LO Translator $400.00
LTT8400B DSCS Translator or any dual LO translator $500.00
XXX0000X Xx-xxxx Global Translator $600.00
LTT1468G Triband Test Translator $1200.00
These rates are determined from current equipment pricelists. The rates may
be changed in response to either an increase or decrease in the sale price of
the equipment to ensure that the royalty will not be greater than 10% or less
than 5% of the selling price.
11. The royalty terms of this agreement are contingent upon Xxxxx Xxxxxxxxx
providing one year of employment service to Radyne. The sales of assets and
capital equipment are deemed final upon execution of this agreement. If
Xxxxx Xxxxxxxxx voluntarily leaves Radyne before the end of the first year,
Radyne is permitted to manufacture and sell the Merit products for one year
after that date and is not required to pay royalties. If Xxxxx Xxxxxxxxx
voluntarily leaves Radyne after the first year, Radyne is still liable for
royalty payments and has the right to sell Merit Translator products for up
to one year after that date. At this time, Radyne may negotiate an agreement
whereby the manufacturing rights can be extended indefinitely though an
extend royalty agreement or through a mutually agreed upon cash settlement.
12. If Xxxxx Xxxxxxxxx'x employment with Radyne is involuntarily terminated
at any time without cause or is not due to a breach of any terms of this
agreement, then Radyne shall at the time of termination relinquish its rights
to those existing designs and intellectual property as outlined in the
attached schedule. At this time, Merit may negotiate a licensing agreement
for the continued manufacture and sales of these designs by Radyne.
13. If at any time Radyne has documented cause, or if they can substantiate a
breech of the terms of this agreement, and as a result terminate Xxxxx
Xxxxxxxxx'x employment with Radyne, then Merit will be ineligible for
royalties and Radyne shall be permitted to manufacture the existing designs
and intellectual property for one year after termination. After one year of
termination, Merit may negotiate a licensing agreement for the continued
manufacture and sale of these designs by Radyne. If no agreement for the
disposition of the existing designs can be met then Radyne will relinquish
its right to those existing designs and intellectual property.
14. If the Radyne shares issued to Merit through this agreement are recalled
due to a merger, then shares of equal value in the surviving entity must be
issued to Merit. Radyne, Inc. is the parent company of Radyne Corporation and
is a wholly owned subsidiary of ETS. ETS, though not a part to this
agreement, has voiced its approval of this agreement.
This Agreement is made on this 7th day of June, 1995, between Merit Microwave
Inc., Xxxxx X. Xxxxxxxxx, and Radyne Inc.
Radyne Inc.
By /s/ R.C. FITTING
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Its President
Merit Microwave, Inc.
By /s/ XXXXX X. XXXXXXXXX
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Its President
/s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx