Exhibit 10.1

FIFTH AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
 
This Fifth Amendment to Loan and Security Agreement (this “Amendment”) is
entered into as of December 29, 2015, by and among Silicon Valley Bank (“Bank”),
Relm Wireless Corporation, a Nevada corporation (“Relm Wireless”), and Relm
Communications, Inc., a Florida corporation (“Relm Communications” and together
with Relm Wireless, individually and collectively, jointly and severally,
“Borrower”) whose address is 7100 Technology Drive, West Melbourne, Florida
32904.
 
Recitals
 
A.           Bank and Borrower have entered into that certain Loan and Security
Agreement dated as of October 23, 2008 (as the same has been and may from time
to time be further amended, modified, supplemented or restated, the “Loan
Agreement”).
 
B.           Bank has extended credit to Borrower for the purposes permitted in
the Loan Agreement.
 
C.           Borrower has requested that Bank amend the Loan Agreement to (i)
extend the maturity date, and (ii) make certain other revisions to the Loan
Agreement as more fully set forth herein.
 
D.           Bank has agreed to so amend certain provisions of the Loan
Agreement, but only to the extent, in accordance with the terms, subject to the
conditions and in reliance upon the representations and warranties set forth
below.
 
Agreement
 
Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
 
1. Definitions.  Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.
 
2. Amendments to Loan Agreement.
 
2.1 Section 2.1.1 (Revolving Advances).  Section 2.1.1(a) is amended by deleting
the phrase “the Availability Amount” and substituting in lieu thereof “the
Revolving Line”.
 
2.2 Section 2.2 (Overadvances).  Section 2.2 is amended by deleting the phrase
“the lesser of either the Revolving Line or the Borrowing Base” and substituting
in lieu thereof “the Revolving Line”.
 
 
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2.3 Section 2.3 (Payment of Interest on the Credit Extensions).  Section 2.3(a)
is amended in its entirety and replaced with the following:
 
(a)           Interest Rate.  Subject to Section 2.3(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a floating per
annum rate equal to the Prime Rate, which interest shall be payable monthly in
accordance with Section 2.3(f) below.  Accrued interest on amounts outstanding
under the Revolving Line shall be payable monthly.

2.4 Section 3.2 (Conditions Precedent to all Credit Extensions).  Section 3.2(c)
is amended in its entirety and replaced with the following:
 
(c)           [Intentionally Omitted]; and
 
2.5 Section 5.3 (Accounts Receivable; Inventory).  Section 5.3 is amended in its
entirety and replaced with the following:
 
5.3           [Intentionally Omitted].
 
2.6 Section 6.2 (Financial Statements, Reports, Certificates).  Sections 6.2(b),
(c) and (e) are amended in their entirety and replaced with the following:
 
(b)           Within thirty (30) days after the last day of each quarter (or
within thirty (30) days after the last day of any month during which any
Obligations are outstanding), deliver to Bank aged listings of accounts
receivable and accounts payable (by invoice date).
 
(c)           Within thirty (30) days after the last day of each quarter (or
within thirty (30) days after the last day of any month during which any
Obligations are outstanding), deliver to Bank its quarterly (or monthly, as
applicable) financial statements together with a duly completed Compliance
Certificate signed by a Responsible Officer setting forth calculations showing
compliance with the financial covenants set forth in this Agreement.
 
(e)           [Intentionally Omitted].
 
2.7 Section 6.7 (Financial Covenants).  Section 6.7 is amended in its entirety
and replaced with the following:
 
6.7           Financial Covenants.  Borrower shall maintain at all times, on a
consolidated basis with respect to Borrower and its Subsidiaries:
 
(a)           Adjusted Quick Ratio.  An Adjusted Quick Ratio, tested as of the
last day of each quarter (or as of the last day of each month with respect to
any month during which any Obligations are outstanding), of not less than 1.25
to 1.00.
 
(b)           Maximum Total Leverage.  A Total Leverage, measured on a trailing
twelve (12) month basis and tested as of the last day of each quarter, of not
more than 3.00 to 1.00.
 
 
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2.8 Section 13 (Definitions).  The definition of “Change in Control” is amended
by (a) deleting the phrase “other than the Principal or a Related Party of the
Principal” and substituting in lieu thereof “other than Fundamental Global
Investors, LLC” and (b) deleting the last sentence thereof in its entirety.
 
2.9 Section 13 (Definitions).  The following terms and their respective
definitions set forth in Section 13.1 are amended in their entirety and replaced
with the following:
 
“Revolving Line” is an Advance or Advances in an aggregate amount of up to Two
Million Dollars ($2,000,000).
 
“Revolving Line Maturity Date” is December 28, 2016.
 
2.10 Section 13 (Definitions).  The following terms and their respective
definitions are added to Section 13.1 of the Loan Agreement in the proper
alphabetical order:
 
“Adjusted EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c)
to the extent deducted in the calculation of Net Income, depreciation expense
and amortization expense, plus (d) income tax expense, plus (e) reasonable
add-backs for non-cash items including, but not limited to, stock compensation
and other one-time charges as approved by Bank in its sole discretion on a
case-by-case basis.
 
“Interest Expense” means for any fiscal period, interest expense (whether cash
or non-cash) determined in accordance with GAAP for the relevant period ending
on such date, including, in any event, interest expense with respect to any
Credit Extension and other Indebtedness of Borrower and its Subsidiaries,
including, without limitation or duplication, all commissions, discounts, or
related amortization and other fees and charges with respect to letters of
credit and bankers’ acceptance financing and the net costs associated with
interest rate swap, cap, and similar arrangements, and the interest portion of
any deferred payment obligation (including leases of all types).
 
“Total Leverage” is, for any period as at any date of determination, the ratio
of (a) Borrower’s total consolidated Indebtedness as of such date, to (b)
Borrower’s Adjusted EBITDA for such period.
 
2.11 Section 13 (Definitions).  The following terms and their respective
definitions set forth in Section 13.1 are deleted in their entirety:
 
“Availability Amount”
 
“Borrowing Base”
 
“Borrowing Base Certificate”
 
 
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“Eligible Accounts”
 
“Eligible Inventory”
 
“Tangible Net Worth”
 
2.12 Exhibit C (Borrowing Base Certificate).  Exhibit C to the Loan Agreement is
deleted in its entirety.
 
2.13 Exhibit D (Compliance Certificate).  Exhibit D to the Loan Agreement is
amended in its entirety and replaced with Exhibit D attached hereto.
 
3. Limitation of Amendments.
 
3.1 The amendments set forth in Section 2, above, are effective for the purposes
set forth herein and shall be limited precisely as written and shall not be
deemed to (a) be a consent to any amendment, waiver or modification of any other
term or condition of any Loan Document, or (b) otherwise prejudice any right or
remedy which Bank may now have or may have in the future under or in connection
with any Loan Document.
 
3.2 This Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.
 
4. Representations and Warranties.  To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:
 
4.1 Immediately after giving effect to this Amendment (a) the representations
and warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;
 
4.2 Borrower has the power and authority to execute and deliver this Amendment
and to perform its obligations under the Loan Agreement, as amended by this
Amendment;
 
4.3 The organizational documents of Borrower most recently delivered to Bank
remain true, accurate and complete and have not been amended, supplemented or
restated and are and continue to be in full force and effect;
 
4.4 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, have been duly authorized;
 
4.5 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not and will not contravene (a) any material law or regulation
binding on or affecting Borrower, (b) any material contractual restriction with
a Person binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding
on Borrower, or (d) the organizational documents of Borrower;
 
 
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4.6 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower, except as already has been obtained or made; and
 
4.7 This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’
rights.
 
5. Integration.  This Amendment and the Loan Documents represent the entire
agreement about this subject matter and supersede prior negotiations or
agreements.  All prior agreements, understandings, representations, warranties,
and negotiations between the parties about the subject matter of this Amendment
and the Loan Documents merge into this Amendment and the Loan Documents.
 
6. Counterparts.  This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
 
7. Effectiveness.  This Amendment shall be deemed effective upon (a) the due
execution and delivery to Bank of this Amendment by each party hereto,
(b) Borrower’s payment of a facility fee in an amount equal to Four Thousand
Dollars ($4,000), and (c) payment of Bank’s legal fees and expenses in
connection with the negotiation and preparation of this Amendment.
 
[Signature page follows.]
 
 
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In Witness Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.
 
BANK
BORROWER
 
Silicon Valley Bank
 
 
By:  /s/ Thomas Armstrong
Name: Thomas Armstrong
Title: Director
 
Relm Wireless Corporation
 
 
By:  /s/ William P. Kelly
Name: William P. Kelly
Title: Executive Vice President and
Chief  Financial Officer
 
 
 
Relm Communications, Inc.
 
 
By:  /s/ William P. Kelly
Name: William P. Kelly
Title:  Executive Vice President and
Chief  Financial Officer

 
 
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EXHIBIT D
 
COMPLIANCE CERTIFICATE
 
 
TO: SILICON VALLEY BANK
Date:________________

                                                                                               
FROM:  RELM WIRELESS CORPORATION and RELM COMMUNICATIONS, INC.

The undersigned authorized officer of Relm Wireless Corporation and Relm
Communications, Inc. (individually and collectively, jointly and severally,
“Borrower”) certifies that under the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”):
 
(1) Borrower is in complete compliance for the period ending _______________
with all required covenants except as noted below; (2) there are no Events of
Default; (3) all representations and warranties in the Agreement are true and
correct in all material respects on this date except as noted below; provided,
however, that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be
true, accurate and complete in all material respects as of such date;
(4) Borrower, and each of its Subsidiaries, has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state
and local taxes, assessments, deposits and contributions owed by Borrower except
as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement;
and (5) no Liens have been levied or claims made against Borrower or any of its
Subsidiaries relating to unpaid employee payroll or benefits of which Borrower
has not previously provided written notification to Bank.

Attached are the required documents supporting the certification.  The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.  The undersigned acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that compliance
is determined not just at the date this certificate is delivered.  Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Agreement.
 
Please indicate compliance status by circling Yes/No under “Complies” column.
 
Reporting Covenants
Required
Complies
     
Quarterly/monthly financial statements with
Compliance Certificate
Quarterly (or monthly if any Obligations are outstanding) within 30 days
Yes   No
Annual financial projections
FYE within 60 days (updates within 10 days of Board approval)
Yes   No
10-K and 8-K
Within 30 days after filing with SEC
Yes   No
10-Q
Quarterly within 30 days
Yes   No
A/R & A/P Agings
Quarterly (or monthly if any Obligations are outstanding) within 30 days
Yes   No
Inventory Reports
Upon request
Yes   No
 
The following Intellectual Property was registered (or a registration
application submitted) after the Effective Date (if no registrations, state
“None”)
________________________________________________________________________________________
________________________________________________________________________________________
 

[Continued on following page.]

 
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Financial Covenants
Required
Actual
Complies
       
Maintain at all times:
     
Minimum Adjusted Quick Ratio, tested quarterly (or monthly
if any Obligations are outstanding)
1.25:1.00
_____:1.00
Yes   No
Maximum Total Leverage, tested quarterly on a trailing
12-month basis
3.00:1.00
_____:1.00
Yes   No

The following financial covenant analyses and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.
________________________________________________________________________________________
________________________________________________________________________________________

Other Matters

Have there been any amendments of or other changes to the capitalization table
of Borrower and to the Operating Documents of Borrower or any of its
Subsidiaries?  If yes, provide copies of any such amendments or changes with
this Compliance Certificate.
Yes
No

The following are the exceptions with respect to the certification above:  (If
no exceptions exist, state “No exceptions to note.”)

 

Relm Wireless Corporation
 
 
By:                                                      
Name:                                                 
Title:                                                   
 
Relm Communications, Inc.
 
 
By:                                                      
Name:                                                 
Title:                                                   
 
 
BANK USE ONLY
 
Received by: _____________________
authorized signer
Date:     _________________________
 
Verified:  ________________________
authorized signer
Date:     _________________________
 
Compliance Status:                                         Yes     No

 
 
 

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Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the
terms of the Loan Agreement shall govern.

Dated: ____________________

I.           Adjusted Quick Ratio (Section 6.7(a))
 
Required:                      1.25:1.00

Actual:                                _____:1.00

  A.  
Aggregate value of the unrestricted cash and Cash Equivalents of Borrower and
its Subsidiaries
  $       B.  
Aggregate value of the net billed accounts receivable of Borrower and its
Subsidiaries
  $       C.  
Aggregate value of the Investments with maturities of fewer than 12 months
of Borrower and it Subsidiaries
 
  $       D.  
Quick Assets (the sum of lines A through C)
  $       E.  
Aggregate value of Obligations to Bank
  $       F.  
Aggregate value of liabilities that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all
Indebtedness, and not otherwise reflected in line E above that matures within
one (1) year
  $       G.  
Current Liabilities (the sum of lines E and F)
  $       H.  
Aggregate value of all amounts received or invoiced by Borrower in advance
of performance under contracts and not yet recognized as revenue
 
  $       I.  
Line G minus line H
  $       J.  
Adjusted Quick Ratio (line D divided by line I)
 
______:1.00
 

Is line J equal to or greater than 1.25:1:00?
 
_______  No, not in compliance                                           _______
Yes, in compliance

 
 

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II.           Maximum Total Leverage (Section 6.7(b))

Required:                      Not greater than 3.00:1.00

Actual:

  A.  
Aggregate value of the total consolidated Indebtedness of Borrower
  $       B.  
Net Income of Borrower for the trailing 12-month period then ended
  $       C.  
To the extent included in the determination of Net Income
             
1.           The provision for income taxes
  $          
2.           Depreciation expense
  $          
3.           Amortization expense
  $          
4.           Net Interest Expense
  $          
5.Reasonable add-backs for non-cash items including, without limitation, stock
compensation and other one-time charges approved by Bank on a case-by-case basis
  $          
6.           The sum of lines 1 through 5
  $       D.  
Adjusted EBITDA (line B plus line C.6)
  $       E.  
Total Leverage (line A divided by line D)
   
_____:1.00
 

Is line E less than or equal to 3.00:1.00?
 
_______ No, not in compliance                                                
 _______ Yes, in compliance
 

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