EXHIBIT 10.13
AMENDMENT
TO
TECHNOLOGY LICENSE AGREEMENT AND SUPPLY AGREEMENT
This amendment to Technology License Agreement and Supply Agreement
("Agreement"), is entered into as of the 31 day of March, 1994, by and between
Ramtron International Corporation, a Delaware corporation, having its principal
offices at 0000 Xxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 ("Ramtron") and
Racom Systems, Inc., a Delaware corporation, having its principal offices at
0000 Xxxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Racom").
RECITALS
A. Ramtron and Racom have entered into that certain Supply Agreement dated
October 23, 1991 ("Supply Agreement") and that certain Technology
License Agreement dated October 23, 1991 ("License Agreement") whereby
Ramtron has agreed to license certain of its ferroelectric technology to
Racom and to supply Racom with certain products incorporating such
technology.
B. Ramtron and Racom desire to amend the Supply Agreement and License
Agreement and desire to set forth certain terms and conditions under
which the parties shall operate all as set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, and for other good and valuable
consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
ARTICLE ONE
AMENDMENTS TO LICENSE AGREEMENT
1.1 Section 1.5 of the License Agreement shall be modified in its entirety as
set forth below:
"Improvements" means all improvements, enhancements and
developments to the Ferroelectric Technology, of any kind,
whatsoever, including all 1 Transistor, 1 Capacitor
Cell, sub 1.2 micron devices and technology, processes and
materials for use therein, made by Ramtron or its Affiliates,
or to which Ramtron or its Affiliates may be entitled or may
become entitled. "Improvements" shall not include any such
improvements, enhancements, and developments if Ramtron or
any of its Affiliates, as the case may be, are prohibited from
making the same available to Licensee pursuant to a contract
with a third party or pursuant to any judicial order or
proceeding.
Notwithstanding the foregoing, Licensee will not have the
right to require Ramtron or its Affiliates to utilize any
Improvements which have not been reduced to commercial
practice by Ramtron or its Affiliates. Licensee's rights
to the Ferroelectric Technology and to any and all Improvements,
shall not be diminished in any way whatsoever if Ramtron
or its Affiliates do not reduce to commercial practice,
for any reason whatsoever, any or all such Improvements.
Ramtron agrees to inform Licensee of any Improvements on
a timely basis. All requests for information regarding
Improvements from Licensee must be such as to not unreasonably
interfere with Ramtron's normal course of business. Ramtron
further agrees to provide complete details of any Improvements
to Licensee at the earlier of (a) the time they are included
in any issued patents, (b) the time they are included in
Ramtron's internal register of trade secrets, or (c) the
time they are formally documented for internal use. Ramtron
will not be required, but may, in its sole discretion, inform
Licensee of any developments or Improvements which do not yet
meet the requirements set forth above without incurring any
further obligation to Licensee.
1.2 Section 2.1(c) of the License Agreement shall be modified in its entirety
as set forth below:
(c) In the event that Ramtron does not restrict such licenses
as described above and such licensee or any of its Affiliates
commercially sells Ferroelectric RF/ID Products on or before
December 31, 1996, then subject to Subsection (f) below,
Licensee shall be entitled to give written notification to
Ramtron requiring that
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Ramtron transfer to Licensee for no payment or additional
consideration whatsoever One Million Three Hundred Thirty-Three
Thousand Three Hundred Thirty-Three (1,333,333) shares of
Licensee's common stock currently held by Ramtron. Ramtron
represents and warrants to Licensee that all shares
transferred by Ramtron to Licensee pursuant to this clause
shall be fully paid up in the name of Ramtron and absolutely
free from any mortgage, charge, pledge, lien, encumbrance,
security interest, preferential right, trust arrangement,
contractual right of set off or any other security agreement
or arrangement in favor of any other person. Ramtron and
Licensee hereby acknowledge that the entitlement to receive
a transfer of shares of Licensee's common stock described
above shall constitute Licensee's sole and exclusive right
in such event and such amount represents a genuine pre-estimate
of the liquidated damages likely to be suffered by Licensee
as a result of commercial sales of Ferroelectric RF/ID Products
by such other licensee or its Affiliates.
1.3 Section 2.1(d) of the License Agreement shall be modified in its entirety
as set forth below:
(d) Ramtron acknowledges that there is no restriction imposed
upon Seiko Epson Corporation or Deutsche ITT Industries GMBH
("ITT") pursuant to the licenses granted by Ramtron to such
parties to exploit the Ferroelectric Technology under License
Agreements dated 2 March, 1989, and 1 June, 1988, respectively.
In the event that either Seiko Epson Corporation or ITT or any
of their respective Affiliates commercially sells
Ferroelectric RF/ID Products on or before June 30, 1996, then,
subject to subsection (f) below Licensee shall be entitled to
give written notification to Ramtron requiring that Ramtron,
at Ramtron's sole option, either (i) pay to Licensee the sum
of One Million Dollars ($1,000,000), or (ii) transfer to
Licensee for no payment or additional consideration whatsoever
Six Hundred Sixty-Six Thousand Six Hundred Sixty-Seven (666,667)
shares of Licensee's common stock currently held by Ramtron.
Ramtron represents and warrants to Licensee that all shares
transferred by Ramtron to Licensee pursuant to this clause
shall be fully paid up in the name of Ramtron and absolutely
free from any mortgage, charge, pledge, lien, encumbrance,
security interest, preferential
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right, trust arrangement, contractual right of set off or
any other security agreement or arrangement in favor of any
other person. Ramtron and Licensee hereby acknowledge that
the payment described under subparagraph (i) or entitlement
to receive a transfer of shares of Licensee's common stock
described under subparagraph (ii) above shall constitute
Licensee's sole and exclusive right in such event and such
amount or transfer represents a genuine pre-estimate of the
liquidated damages likely to be suffered by Licensee as a
result of commercial sales of Ferroelectric RF/ID Products
by such other licensee or its Affiliates.
1.4 Section 2.1(e) of the License Agreement shall be modified by adding the
following paragraph at the end of such section:
Notwithstanding the above, Ramtron may sell Ferroelectric
RF/ID Products to any party without restriction after
December 31, 1998, unless Ramtron and Licensee agree to
extend this date.
1.5 Section 2.1(f)(i) of the License Agreement shall be modified in its
entirety as set forth below:
(i) Licensee shall be entitled to the remedy set forth in
Subsection (c) above only once, that is, only with respect
to the first such additional licensee who commercially sells
Ferroelectric RF/ID Products on or before December 31, 1996,
and Licensee shall not be entitled to receive the transfer
of shares of Licensee's common stock described in
Subsection (c) with respect to additional licensees,
regardless of number.
1.6 Section 2.1(f)(iii) of the License agreement shall be modified in its
entirety as set forth below:
(iii) The number of shares issued as the Additional License
Fee which Licensee may be entitled to receive transfer of
under Subsection (c) above shall be reduced (but not below
zero) by (1) the number of shares which Licensee receives
transfer of under Subsection (d)(ii) above, (2) the number
of shares which could be purchased with the cash payment
received by Licensee under Subsection (d)(i) above, at the
current market value of such shares at the time such payment
is made, and (3) the number of shares which
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could be purchased with the cash payment received by Licensee
under Section 2.1 (i) below, at the current market value of
such shares at the time such payment is made, and vice versa,
such that the total maximum number of shares that Licensee is
or may be entitled to under Subsections (c) and (d) above
shall not exceed the equivalent of One Million Three Hundred
Thirty-Three Thousand Three Hundred Thirty-Three (1,333,333)
shares.
1.7 A new Section 2.1(g) is hereby added to the License Agreement as set forth
below:
(g) Notwithstanding the provisions of Section 2.1 (e) above,
in the event that Licensee does not purchase from Ramtron at
least fifty percent (50%) of the annual quantities of units
set forth below for any given year and fails to do so within
one hundred twenty (120) days after being notified by Ramtron
of such deficiency, then, effective on the expiration of such
one hundred twenty (120) day period, the provisions of
Section 2.1(e) hereof and any other restriction or prohibition
on the sale of Ferroelectric RF/ID Products by Ramtron to any
third party, shall be null and void and from such date forward
Ramtron shall not be subject to any restriction, penalty or
prohibition against or arising from the sale of such products
by Ramtron to any third party.
ANNUAL PURCHASE MILESTONES (000'S)
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
System Products Units 43 960 3940 12,615 12,615
Component Products Units -- 240 5720 26,820 26,820
----- ----- ------ ------
1,200 9,660 39,435 39,435
For purposes of this Section 2.1 (g) and Section 2.3 below,
"System Products" shall mean evaluation systems including,
without limitation the DSS 1000, finished controllers
including, without limitation the RFC 1000 and finished
transponders including, without limitation, the RFM 256CC,
and "Component Products" shall mean chips, COB transponder
assemblies, and board/module level controllers.
1.8 A new Section 2.1(h) is hereby added to the License Agreement as set forth
below:
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(h) In the event of any reconstruction of the shares of
Licensee's common stock through any means including, without
limitation, any stock-split, reverse stock-split or stock
dividend ("Reconstruction"), then the number of shares of
Licensee's common stock, to be transferred by Ramtron to
Licensee pursuant to Subsection (c) or (d) above shall also
be adjusted and reconstructed in the same proportions and
in a manner consistent with the Reconstruction.
1.9 A new Section 2.1(i) is hereby added to the License Agreement as set forth
below:
(i) In the event that Ramtron must transfer certain shares
of Licensee's common stock to Licensee pursuant to
Subsections (c) or (d) above and Ramtron does not own
sufficient shares to satisfy such obligations, then Ramtron
shall make a cash payment to Licensee, the amount of which
shall be calculated as follows:
P = (N - T)M
Where: P equals the cash payment to be made by Ramtron to
Licensee; N equals the number of shares of Licensee's common
stock required to be transferred by Ramtron to Licensee
pursuant to Subsection (c) or (d), as appropriate; T equals
the number of shares of Licensee's common stock actually
transferred by Ramtron to Licensee pursuant to Subsections (c)
or (d), as appropriate; and M equals the market value of
each share of Licensee's common stock as of the date any such
transfer is required to be made pursuant to Subsections (c)
or (d). The market value of such shares shall be determined
by the mutual agreement of the parties. Any dispute between
the parties concerning the number of shares to be transferred
or the market value of such shares shall be settled by
arbitration in the manner provided in Section 12.10 below.
1.10 Section 2.2.1(b) of the License Agreement shall be modified in its entirety
as set forth below:
(b) ADDITIONAL LICENSE FEE. The term "Additional License Fee"
shall mean the issuance by Licensee of one million three hundred
thirty-three thousand three hundred thirty-
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three (1,333,333) new shares of Licensee's common stock of
$0.01 par value, at a stated value of $1.50 per share to
Ramtron on or before March , 1994.
---
1.11 Section 2.3 of the License Agreement shall be modified by adding the
following new paragraph at the end of such section:
Additionally, during the term of this Agreement, Licensee
hereby agrees to pay to Ramtron a royalty of two percent (2%)
on the sale, or other transfer for value, by or on behalf
of Licensee of all System Products and Component Products
manufactured by or on behalf of Licensee which incorporate
chips manufactured by or on behalf of Ramtron.
1.12 Section 2.4 of the License Agreement shall be modified in its entirety
as set forth below:
2.4 CERTIFICATION OF ROYALTIES. Licensee shall, on or
before April 30, July 31, October 31 and January 31
in each year during which royalties are payable under
this Agreement , furnish to Ramtron a statement,
certified by a financial officer of Licensee,
concerning the Net Sales by or on behalf of Licensee
of Ferroelectric RF/ID Products manufactured by or on
behalf of Licensee and the sale by or on behalf of
Licensee of all system hardware and component hardware
products manufactured by or on behalf of Licensee which
incorporate chips manufactured by or on behalf of Ramtron,
during the preceding Royalty Period in sufficient detail
to permit the computation of the royalties due for such
Royalty Period, and shall accompany such statement by
payment, in immediately available United States dollar
funds, of the royalties due according to that statement.
On or before the last day of the first three month
period following the end of each Royalty Year, Licensee
shall furnish to Ramtron a comparable statement,
certified by an internationally recognized firm of
independent certified public accountants, certifying
the Net Sales made by or on behalf of Licensee of
Ferroelectric RF/ID Products manufactured by or on
behalf of Licensee and the sale by or on behalf of
Licensee of all system hardware and component hardware
products manufactured by or on behalf of
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Licensee which incorporate chips manufactured by or on
behalf Ramtron, during the preceding Royalty Year.
Licensee shall accompany such statement by payment in
immediately available United States dollar funds of any
amounts due to Ramtron for such preceding Royalty Year.
1.13 Section 8.3(a) of the License Agreement shall be modified in its entirety
as set forth below:
(a) Licensee fails or refuses to: (i) pay to Ramtron on the
date due any payment provided to be made to Ramtron in
accordance with Section 2.2.1(a) or issue shares to Ramtron
in accordance with Section 2.2.1(b); or (ii) issue shares to
Ramtron in accordance with Section 2.2.2; or (iii) pay to
Ramtron within thirty (30) days of written demand after the
due date thereof for any royalties due hereunder provided,
however, nothing in this subparagraph shall be construed to
relieve Licensee of its liability to pay to Ramtron the Initial
License Fee or issue shares to Ramtron as the Additional
License Fee if such are due and payable or issuable, as
appropriate, and royalties on all Ferroelectric RF/ID Products
manufactured by or on behalf of Licensee and all system
hardware and component hardware products which are
manufactured by or on behalf of Licensee which incorporate
chips manufactured by or on behalf of Ramtron, and sold,
leased or otherwise transferred by Licensee prior to or after
the date of such termination in accordance with this Agreement.
1.14 All other provisions of the License Agreement shall remain in full force
and effect.
ARTICLE TWO
AMENDMENTS TO SUPPLY AGREEMENT
2.1 The first paragraph of Section 2.1 of the Supply Agreement shall be
modified in its entirety as set forth below:
2.1 Products. Subject to the terms and conditions hereof,
at Racom's request, Ramtron shall sell to Racom and
make timely delivery of, and Racom shall
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purchase from Ramtron and take delivery of, Products
in an amount sufficient to satisfy up to: (i) one
hundred percent (100%) of Racom's requirements
therefor for calendar years 1994 and 1995 and
(ii) fifty percent (50%) of Racom's requirements
therefor for calendar years 1996, 1997, and 1998;
provided, however, that in no event shall Ramtron
be required to supply to Racom more than twenty
million (20,000,000) units (assuming maximum
possible die of 3000 per 6 inch wafer) of the
Products in any given year, unless Ramtron agrees
to do so in its sole and absolute discretion.
2.2 The second sentence of the second paragraph of Section 2.1 of the Supply
Agreement shall be amended as follows:
Racom shall compensate Ramtron for the design of these
additional products at rates to be negotiated between
Ramtron and Racom; provided that the non-recurring
engineering ("NRE") charges for development of such
products shall be as set forth below.
2.3 A new paragraph shall be added to the end of Section 2.1 of the Supply
Agreement setting forth the following:
Ramtron hereby agrees to provide Racom with engineering
research and development services, on an ongoing basis.
Ramtron hereby agrees to provide these services at its
approximate cost. The fees charged to Racom for these
services will be the direct expenses incurred by Ramtron
to provide these services. These expenses will be limited
to Compensation, Materials and Overhead as defined below.
(i) Compensation means, for the purposes of calculating fees,
1.20 x Direct Labor (see table below) where Direct Labor is
calculated, according to the rate table below, for the actual
time spent by the various classes of professionals, as
defined in the table, working on Racom projects. It is
agreed that this rate table will be in effect through
December 31, 1994 and will be increased by 5% annually
thereafter for the term of this Agreement. It is agreed
by both parties that this formula will be sufficient to
pay for all direct and indirect labor costs. A detailed
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summary of the individuals and expenses included in this
calculation will be provided to Racom with each billing.
DIRECT LABOR RATES (PER MONTH)
------------------------------
Senior Design $5,475
Junior Design $3,425
Senior Layout $4,750
Junior Layout $3,950
(ii) Materials means, for purposes of calculating fees,
all items directly consumed in providing the services to
Racom. This includes but is not limited to supplies, parts,
packaging and similar items. Included under this definition
are only those items which will have no value after being
utilized in providing the services to Racom. Any items
having a life or value beyond providing the services to
Racom and any items which would normally be capitalized
under generally accepted accounting principles are hereby
excluded from this calculation. A detailed list of these
items will be provided to Racom with each billing.
(iii) Overhead is defined and provided for by calculating
a fixed charge of 50% of Compensation for each billing period.
It is agreed by both parties that this formula will be
sufficient to pay for all other expenses, direct, indirect
or otherwise, not included and provided for under
Compensation and Materials.
2.4 Section 3.1 of the Supply Agreement shall be modified in its entirety as
follows:
3.1 PURCHASE PRICE. Ramtron's prices to Racom for the
Products shall be as set forth below in the second paragraph
of this Section 3.1; provided, however, that Ramtron
represents and warrants to Racom that the prices available
to Racom for the Products shall be no less favorable than
the prices offered to or established by any third party for
the same or similar goods and quantities not exceeding the
quantities anticipated to be purchased by Racom under the
terms of this Agreement. Prices shall be stated and payments
shall be made in United States dollars.
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Ramtron hereby agrees to charge Racom for each Tested Wafer
Out ("TWO") provided under this Agreement according to the
following schedule:
(i) For the period January 1, 1994 to December 31, 1994 the
price per TWO will be $3,000 for up to 250 TWO's and $2,500
for additional purchases above 250 during this period.
(ii) Commencing January 1, 1995 and continuing thereafter,
Ramtron will charge Racom for each TWO according to the
formula: 1.55 x DWMC where DWMC = VWMC + FWMC as further
defined below:
a. VWMC = DVC + W where:
- DVC = Ramtron's total direct variable manufacturing
costs incurred on a monthly basis. Expenses
in this category will be those variable costs
generally identified as such by semiconductor
industry standards and practices.
- W is the physical quantity of all finished wafers
actually produced in each monthly period.
b. FWMC = DFC + (WCM x .80) where:
- DFC = Direct fixed manufacturing costs generally
recognized by Ramtron for financial reporting
purposes on a monthly basis. Expenses in this
category will be those fixed manufacturing
costs generally identified as such by
semiconductor industry standards and practices.
- WCM = Wafer capacity per month at Ramtron's
manufacturing plant assuming a three shift,
24 hour per day, five day per week manufacturing
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schedule. Ramtron has indicated that its
current rated capacity is 1,500 wafers per
month based on this formula.
c. The parties agree that pricing under the above formula
will be determined on an annual basis as of the first
day of each calendar year and adjusted quarterly for
fluctuations in raw material prices or changes in
manufacturing overhead.
2.5 Section 9.1 of the Supply Agreement shall be modified in its entirety as
set forth below:
9.1 Term. This Agreement shall become effective on the date
signed by both parties and shall continue in effect until
December 31, 1998 unless sooner terminated in accordance
with the terms of this Agreement.
2.6 All other provisions of the Supply agreement shall remain in full force and
effect.
ARTICLE THREE
OTHER AGREEMENTS
3.1 As partial consideration for extension of the Supply Agreement and the
other terms and conditions specified herein, Racom shall issue, on the
effective date of this Agreement, 666,667 shares of Racom common stock to
Ramtron at a stated value of $1.50 per share.
3.2 Ramtron hereby agrees to support continuing discussions between Intag
International Limited ("Intag") and Racom concerning opportunities
presented to Racom by the Magellan Technology, including review and
discussion of the Frost and Xxxxxxxx Marketing Report for purposes of
reaching an early decision regarding Intag's current license negotiations
with Racom.
3.3 Ramtron confirms its support to AWA Microelectronics ("AWAM") as originally
agreed once the AWAM license is activated.
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3.4 Intag hereby agrees, in its sole discretion, to fund Racom's current
operations, on a short-term basis, by way of convertible notes ("Notes").
Such Notes shall accrue interest at a rate of the ten percent (10%) per
annum and shall be, at Intag's option, either convertible, at a rate of
$1.50 per share, into Racom's common stock at the time of Racom's initial
public offering, or shall be redeemable at any time after April 30, 1994.
Notwithstanding the above, at the time of conversion of such Notes by
Intag, Ramtron shall have the right to purchase from Intag up to fifty
percent (50%) of the outstanding Notes at a purchase price equal to $1.50
per share multiplied by the number of shares each purchased Note converts
into so as to afford Ramtron the opportunity to maintain an ownership
position in Racom equal to that of Intag.
3.5 Ramtron and Racom agree to form a marketing council to discuss
opportunities to achieve revenues from direct RF/ID chip sales, while at
the same time, preserving or enhancing Racom's system level opportunities.
In the event such opportunities arise, Racom will approve such direct sales
by Ramtron to noncompetitive entities on a case-by-case basis. Racom and
Ramtron shall negotiate the payment of any royalties in connection with
such sales.
3.6 This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
RACOM SYSTEMS, INC.
[ILLEGIBLE]
----------------------------------------
RAMTRON INTERNATIONAL CORPORATION
[ILLEGIBLE]
----------------------------------------
FOR THE LIMITED PURPOSE SET FORTH IN
SECTION 3.4 HEREOF
INTAG INTERNATIONAL LIMITED
By: [ILLEGIBLE]
-------------------------------------
Its: MANAGING DIRECTOR
------------------------------------
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