NOTE PURCHASE AND SECURITY AGREEMENT

 

                                                                    EXHIBIT 10.9

 

                      NOTE PURCHASE AND SECURITY AGREEMENT

 

      This Note Purchase and Security Agreement, dated as of December 31, 2003

(this "AGREEMENT"), is entered into by and between WIRELESS AGE COMMUNICATIONS,

INC., a Nevada corporation (the "COMPANY"), and Stacey Minichiello (the

"PURCHASER").

 

                                    RECITALS

 

WHEREAS, On December 17, 2003, Wireless Age entered into an agreement to

purchase $1,700,000 in outstanding principal amount of the 8% Convertible

Subordinated Promissory Notes (the "Special Situations Debenture") issued by

RELM WIRELESS CORPORATION (the "Issuer") for $1,870,000 (the "Purchase Price");

 

WHEREAS, The Special Situations Debenture is currently convertible into 904,255

shares of Common Stock of the Issuer (the "Conversion Shares");

 

WHEREAS, The Special Situations Debenture is one of a series issued by the

Issuer (collectively, the "Debentures");

 

WHEREAS, on December 31, 2003 the Company borrowed $1,930,000 (the "Initial

Loan") from the Purchaser, a private investor, in order to consummate the

acquisition of the Special Situations Debenture, which amount included various

fees, costs and expenses of the Purchaser incurred in excess of the Purchaser

Price with respect to the Purchaser providing for immediate liquidity of the

Initial Loan to the Company;

 

WHEREAS, the Company may from time-to-time acquire one or more other Debentures

of the Issuer in addition to the Special Situations Debenture, as to which the

Purchaser has indicated a willingness to provide further funds for such

acquisitions by the Company (collectively, "Subsequent Debenture Acquisition

Loans");

 

WHEREAS, the Company and the Purchaser desire to memorialize the terms and

conditions of the Initial Loan by the Purchaser to the Company with respect to

the acquisition of the Special Situations Debenture and the terms and conditions

which shall apply to any and all Subsequent Debenture Acquisition Loans;

 

NOW, THEREFORE, in consideration of the foregoing, and the representations,

warranties and conditions set forth below, the parties hereto, intending to be

legally bound, hereby agree as follows:

 

      1. The Note.

 

            (a) Issuance of the Note. In reliance upon the representations,

warranties and covenants of the parties set forth herein, the Company hereby

issues, sells and delivers to

 

<PAGE>

 

the Purchaser, and the Purchaser accepts delivery from the Company, of the Note

in the form attached hereto as Exhibit A, with respect to the aggregate

consideration delivered by the Purchaser to the Company in the amount set forth

upon the face of such Note.

 

            (b) Terms of the Note. The terms and conditions of the Note are set

forth in the form of Note attached as Exhibit A hereto. Capitalized terms not

otherwise defined herein shall have the meaning set forth in the Note.

 

            (c) Delivery of Initial Note. The Company shall upon execution

hereof simultaneously deliver to the Purchaser an executed version of the Note.

 

            (d) Subsequent Debenture Acquisition Loans. Upon written notice by

the Company to the Purchaser of the Company's intent to acquire one or more

Debentures in addition to the Special Situations Debenture, and upon written

notice of acceptance by the Purchaser to make such Subsequent Debenture

Acquisition Loans, the Company agrees to issue, sell and deliver to the

Purchaser one or more supplemental notes which shall be in form and substance

the same as the Note, except to the extent such Note is conformed to the

respective date and amount of each such Subsequent Debenture Acquisition Loan.

Nothing herein shall be construed as an obligation or commitment by the Company

to offer the Purchaser any security instrument in connection with the purchase

of any supplemental Debentures and any determination in such regard shall be at

the sole discretion of the Company. Nothing herein shall be construed as an

obligation or commitment by the Purchaser to make any Subsequent Debenture

Acquisition Loans to the Company and any determination in such regard shall be

at the sole discretion of the Purchaser.

 

      2. Representations and Warranties of the Company. The Company hereby

represents and warrants to the Purchaser that the statements contained in the

following paragraphs of this Section 2 are all true and correct as of the time

of issuance of the Note and shall be true and correct as of the date of each

Subsequent Debenture Acquisition Loan:

 

            (a) Organization and Standing: Articles and Bylaws. The Company is a

corporation duly organized, validly existing and in good standing under the laws

of the State of Nevada and has all requisite corporate power and authority to

carry on its business as now conducted and proposed to be conducted.

 

            (b) Corporate Power. The Company has all requisite legal and

corporate power to enter into, execute and deliver this Agreement and the Note.

This Agreement is, and upon issuance the Note will be, a valid and binding

obligation of the Company, each of the Agreement and the Note (upon its

issuance) being enforceable against the Company in accordance with its

respective terms.

 

            (c) Authorization.

 

 

                                     Page 2

<PAGE>

 

                  (i) Corporate Action. All corporate and legal action on the

part of the Company and its officers, directors and stockholders necessary for

the execution and delivery of this Agreement and the Note, the sale and issuance

of the Note and the performance of the Company's obligations hereunder and

thereunder have been taken.

 

                  (ii) Valid Issuance. The Note, when issued in compliance with

the provisions of this Agreement, will be validly issued, fully paid and

nonassessable and will be free of any liens or encumbrances; provided, however,

that the Note may be subject to restrictions on transfer under state and/or

federal securities laws as set forth herein, and as may be required by future

changes in such laws.

 

            (d) Financial Statements. The Company has no material liabilities,

contingent or otherwise, other than (i) liabilities incurred in the ordinary

course of business subsequent to September 30, 2003 or (ii) liabilities which

have been disclosed as actual or contingent liabilities in the Company's

financial statements and reports (collectively, "Commission Reports") as filed

with the U.S. Securities and Exchange Commission (the "Commission"); and (iii)

obligations under contracts or commitments incurred in the ordinary course of

business which are not material to the financial condition or operating results

of the Company.

 

            (e) No Materially Adverse Change. Since September 30, 2003, no

transaction, arrangement, event or other circumstance has occurred or existed

which (i) has had a material adverse effect on the business, assets, properties,

operations or condition (financial or otherwise) of the Company or (ii) is, as

of the date hereof, reasonably expected to result in any such effect, except to

the extent such event or transaction has been disclosed in Commission Reports.

 

            (f) Government Consent, Etc. No consent, approval, order or

authorization of, or designation, registration, declaration or filing with, any

federal, state, local or provincial or other governmental authority on the part

of the Company is required in connection with the valid execution, delivery and

performance of this Agreement or the Note, or the offer, sale or issuance of the

Note, other than, if required, filings or qualifications under applicable blue

sky laws.

 

      3. Representations and Warranties by the Purchaser. The Purchaser

represents and warrants to the Company as of the time of issuance of the Note

and as of the date of each Subsequent Debenture Acquisition Loans as follows:

 

             (a) Investment Intent: Authority. This Agreement is made with the

Purchaser in reliance upon the Purchaser's representation to the Company, as

evidenced by Purchaser's execution of this Agreement, that Purchaser is

acquiring the Note for the Purchaser's own account, not as nominee or agent, for

investment and not with a view to, or for resale in connection with, any

distribution or public offering thereof within the meaning of the Securities Act

of 1933, as amended (the "Securities Act"). The Purchaser has the full right,

power, authority and capacity to enter into and perform this Agreement, and this

Agreement will constitute a valid and binding obligation upon the Purchaser,

except as

 

 

                                     Page 3

<PAGE>

 

the same may be limited by bankruptcy, insolvency, moratorium and other laws of

general application affecting the enforcement of creditors' rights.

 

            (b) Not Registered. The Purchaser understands and acknowledges that

the offering and sale of the Note pursuant to this Agreement will not be

registered under the Securities Act on the grounds that the offering and sale of

the Note are exempt from registration under the Securities Act, and that the

Company's reliance upon such exemption is predicated upon the Purchaser's

representations set forth in this Agreement. The Purchaser acknowledges and

understands that resale of the Note may be restricted indefinitely unless the

Note is subsequently registered under the Securities Act or an exemption from

such registration is available.

 

            (c) No Transfer. Purchaser covenants that in no event will it

dispose of the Note other than in conjunction with an effective registration

statement under the Securities Act or pursuant to an exemption therefrom (e.g.,

Rule 144 promulgated under the Securities Act) or to an entity affiliated with

the Purchaser.

 

            (d) Knowledge and Experience. Purchaser (i) has such knowledge and

experience in financial and business matters as to be capable of evaluating the

merits and risks of the Purchaser's prospective investment in the Note; (ii) has

the ability to bear the economic risks of the Purchaser's prospective

investment; (iii) has had all questions which have been asked by the Purchaser

satisfactorily answered by the Company; and (iv) has not been offered the Note

by any form of advertisement, article, notice or other communication published

in any newspaper, magazine or similar media or broadcast over television or

radio, or any seminar or meeting whose attendees have been invited by any such

media.

 

      4. Security Interest.

 

            (a) Security Interest. As security for the full, prompt and complete

payment and performance of the Company's obligations hereunder, the Company

hereby grants to the Purchaser and any subsequent transferee, assignee, or other

holder of the Note (the Purchaser and each such other transferee, assignee or

holder, a "Holder"), a security interest in and to the collateral as defined

with specificity on the signature page of the Note (the "Collateral"), and as to

which this Agreement shall constitute a security agreement. The definition of

security interest in the Collateral shall include and apply to the Conversion

Shares and any and all other shares of common stock and/or other equity or debt

instrument of the Issuer into which the Collateral is converted. The security

interest granted in the Collateral shall terminate upon payment in full of the

Company's obligations under the Note. The Company undertakes not to cause or

permit the conversion of the Collateral without the express written consent of

the Holder of the Note.

 

            (b) Exclusivity of First Priority Security Interest. As inducement

to the Holder to purchase this Note from the Company, the Holder expressly

covenants and agrees that the Holder shall have a first priority security

interest in the Collateral, as such term is defined in the Note and the Company

shall not grant or permit to exist any other obligations or liens or any other

type of encumbrance which may result, directly or indirectly, contingent or

otherwise, in the existence or establishment of a security interest in the

Collateral which is senior to the Holder of the Note.

 

            (c) Further Action. Company agrees that from time to time, at its

expense, it will promptly execute and deliver all further instruments and

documents, and take all further action, that may be necessary or desirable, or

that the Holder may reasonably request, in order to perfect and protect any

 

 

                                     Page 4

<PAGE>

 

security interest granted or purported to be granted hereby or to enable the

Holder to exercise and enforce their rights and remedies hereunder with respect

to any Collateral. Without limiting the generality of the foregoing, Company

will: execute and file such financing or continuation statements, or amendments

thereto, and such other instruments or notices, as may be necessary or

desirable, or as the Holder may request, in order to perfect and preserve the

security interests granted or purported to be granted hereby.

 

            (d) Financing And Continuation Statements. The Company hereby

authorizes the Holder to file one or more financing or continuation statements,

and amendments thereto, relative to all or any part of the Collateral without

the signature of Company where permitted by law. A carbon, photographic, or

other reproduction of this Agreement or any part thereof shall be sufficient as

a financing statement where permitted by law.

 

            (e) Escrow of Collateral. The Collateral shall be held