UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-17739
RAMTRON INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 84-0962308
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1850 Ramtron Drive, Colorado Springs, CO 80921
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (719) 481-7000
Indicate by check mark whether registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 Par Value - 37,000,121 shares as of May 13, 1997
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value amounts)
Mar. 31, Dec. 31,
1997 1996
-------- --------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,018 $ 3,182
Accounts receivable, less allowances
of $251 and $721, respectively 4,041 6,810
Inventories 6,366 7,342
Prepaid expenses and other 490 592
-------- --------
Total current assets 14,915 17,926
Property, plant and equipment, net 8,361 8,697
Intangible assets, net 5,009 5,118
Other assets 21 21
-------- --------
$28,306 $31,762
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,364 $ 1,992
Accrued liabilities 1,172 1,202
Accrued royalties 651 612
License rights 550 1,100
Deferred revenue 1,261 863
-------- --------
Total current liabilities 5,998 5,769
Long-term promissory note and
accrued interest, related party 3,249 3,171
Long-term license rights 550 550
-------- --------
Total liabilities 9,797 9,490
-------- --------
Stockholders' Equity:
Preferred stock, $0.01 par value,
10,000 shares authorized - no shares issued -- --
Common stock, $0.01 par value, 75,000 shares
authorized - 36,997 and 36,997 shares issued
and outstanding, respectively 370 370
Additional paid-in capital 151,811 151,830
Accumulated deficit (133,672) (129,928)
-------- --------
Total stockholders' equity 18,509 22,272
-------- --------
$28,306 $31,762
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(Amounts in thousands, except per share amounts)
1997 1996
-------- --------
Revenue:
Product sales $ 3,151 $ 4,433
Customer-sponsored research and development 34 30
-------- --------
3,185 4,463
-------- --------
Costs and expenses:
Cost of product sales 2,493 3,359
Research and development 2,933 3,077
Customer-sponsored research and development 30 27
Sales, general and administrative 1,937 2,153
-------- --------
7,393 8,616
-------- --------
Operating loss (4,208) (4,153)
Interest expense, related parties (78) (79)
Other income 542 77
-------- --------
Net loss $(3,744) $(4,155)
======== ========
Net loss per share $(0.10) $(0.11)
======== ========
Weighted average shares 36,997 36,398
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
(Amounts in thousands)
1997 1996
-------- --------
Cash flows from operating activities:
Net loss $(3,744) $(4,155)
Adjustments used to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 651 745
Stock based compensation -- 686
Other (485) --
Changes in assets and liabilities:
Accounts receivable 3,159 (894)
Inventories 977 (1,190)
Deposits -- 641
Accounts payable and accrued liabilities 381 961
License rights (550) --
Long-term accrued interest, related party 78 79
Deferred revenue 398 280
Other 117 (36)
-------- --------
Net cash provided by (used in) operating activities 982 (2,883)
-------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment (127) (104)
Proceeds from sale of assets -- 1
-------- --------
Net cash used in investing activities (127) (103)
-------- --------
Cash flows from financing activities:
Issuance of common stock, net of expenses (19) 26
-------- --------
Net cash provided by (used in) financing activities (19) 26
-------- --------
Net increase (decrease) in cash and cash equivalents 836 (2,960)
Cash and cash equivalents, beginning of period 3,182 6,283
-------- --------
Cash and cash equivalents, end of period $ 4,018 $ 3,323
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
- -----------------------------------------------------------------------------
NOTE 1. BASIS OF PRESENTATION AND MANAGEMENT OPINION
The accompanying consolidated financial statements at March 31, 1997 and
for the periods then ended have been prepared from the books and records of
the Company without audit. The statements reflect all normal recurring
adjustments which, in the opinion of management, are necessary for the fair
presentation of financial position, results of operations and cash flows for
the periods presented.
Certain information and disclosures normally included in financial statements
have been omitted under Securities and Exchange Commission regulations. It is
suggested that the accompanying financial statements be read in conjunction
with the annual report on Form 10-K for the year ended December 31, 1996. The
results of operations for the period ended March 31, 1997 are not necessarily
indicative of the operating results for the full year.
NOTE 2. NEW ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standard Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share". SFAS No. 128 is effective for annual and interim
periods ending after December 15, 1997 and simplifies the computation of
earnings per share by replacing the presentation of primary earnings per share
with a presentation of basic earnings per share. SFAS No. 128 requires dual
presentation of basic and diluted earnings per share by entities with complex
capital structures. Basic earnings per share includes no dilution and is
computed by dividing income available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted earnings
per share reflects the potential dilution of securities that could share in
the earnings of an entity. The Company does not believe that its loss per
share calculations will be materially affected as a result of adopting SFAS
No. 128.
NOTE 3. INVENTORIES
Inventories consist of:
Mar. 31, Dec. 31,
1997 1996
-------- --------
(in thousands)
(Unaudited)
Finished goods $3,781 $6,174
Work in process 2,426 1,055
Raw material 159 113
-------- --------
Total $6,366 $7,342
======== ========
<PAGE>
NOTE 4. PROMISSORY NOTE, RELATED PARTY
In September 1995, the Company and the National Electrical Benefit Fund (the
"Fund") entered into a Loan Agreement (the "Fund Credit Facility") pursuant
to which the Fund agreed to lend to the Company up to $12,000,000 bearing
interest at 12% and maturing in June 1998. The outstanding principal balance
and accrued interest as of March 31, 1997 under the Fund Credit Facility
were $2,600,000 and $649,000, respectively. The Fund Credit Facility is
secured by a first priority security lien on the Company's assets. The Fund
has the right to convert all or any portion of the amounts outstanding under
the Fund Credit Facility into common stock at any time or times before
maturity of the loan in June 1998 at a conversion price equal to $10.5125 for
each share of common stock.
NOTE 5. INCOME TAXES
The Company provides for income taxes pursuant to Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS 109"). The
Company has determined that under SFAS 109, any previously unrecognized tax
benefits did not satisfy the realization criteria set forth therein. A
valuation allowance has therefore been recorded against the entire net
deferred tax asset.
NOTE 6. EARNINGS PER SHARE
Net loss per share is computed by dividing the net loss by the weighted
average number of shares of common stock outstanding during each period
presented. Certain warrants and employee stock options are common stock
equivalents; however, such warrants and certain employee stock options have
not been included in net loss per share calculations for the three month
period ended March 31, 1997 and 1996 due to their antidilutive effect.
NOTE 7. CONTINGENCIES
Interference proceedings are continuing, challenging one of the Company's
issued patents which pertains to an invention that the Company believes is of
fundamental importance to its business. In 1992, a three-way "interference"
contest was declared in the United States Patent and Trademark Office (the
"Patent Office") covering a patent which is owned by the Company. This Patent
covers a basic ferroelectric memory cell design that is of fundamental
importance to the Company's business interests in the United States. An
interference is declared in the Patent Office when two or more parties each
claim to have made the same invention. The interference proceedings are
therefore conducted to determine which party is entitled to the patent rights
corresponding to the invention. In the present interference contest, the
Company is the "senior" party, which means that it is in possession of the
issued US patent. The other two parties involved in the interference are
"junior" parties, and each has the burden of proof of convincing the Patent
Office by a preponderance of the evidence that it was the first to invent the
subject matter of the invention and thus is entitled to the corresponding
patent rights. The Company and only one of the two claimant parties in the
interference proceedings filed briefs in this matter. Oral arguments were
presented before the Patent Office on March 1, 1996. A decision by the Patent
Office is expected within (18) eighteen months after the oral hearing. Such
decision would complete the administrative process. The non-prevailing party
would then have the right, upon the filing of appropriate petitions, to pursue
its case in Federal Court. The Company, if the non-prevailing party, would
remain in possession of the issued US Patent while it pursues its case in
Federal Court. The Company has vigorously defended its patent rights in this
interference contest and will continue such efforts. The Company is uncertain
as to the ultimate outcome of the above matter, as well as the associated
effect upon the Company's financial position and results of operations.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FACTORS AFFECTING FUTURE RESULTS
This quarterly report contains forward-looking statements. Except for
historical information, the matters discussed in this report are forward-
looking statements that are subject to certain risks and uncertainties that
could cause the actual results to differ materially from those projected.
Factors that could cause actual results to differ materially include the
following:(i) the timely completion of the development and qualification for
manufacturing of the Company's new EDRAM and FRAM products; (ii) broader
customer acceptance of its EDRAM products and low-density FRAM products;
(iii) acceptance of new high-density FRAM products which may be developed;
(iv) the Company's and its alliance partners' ability to manufacture
products on a cost-effective and timely basis in the Company's own facility
and through its alliance foundry operations; (v) the Company's ability to
perform under existing alliance agreements and to develop new alliance
relationships; (vi) the availability and related cost of future financing;
(vii) the retention of key personnel; (viii) the outcome of the patent
interference proceeding, and (ix) factors not directly related to the
Company, such as competitive pressures on pricing, market conditions in
general, competition, technological progressions, product obsolescence and the
changing needs of potential customers and the semiconductor industry in
general.
RESULTS OF OPERATIONS
Revenues for the first quarter of 1997 decreased by 29% to $3.2 million from
the respective period in 1996. Revenues for the quarter were comprised
primarily from product sales. No license and development fee revenues were
recorded during the quarter from new license agreements or from the
achievement of milestones pursuant to existing license agreements. EDRAM sales
revenue totaled approximately 90% of total product sales revenue compared with
88% for the same period in 1996. EDRAM unit shipments remained flat during the
quarter and average selling prices decreased by approximately 22% from the
respective period in 1996. The Company's EDRAM prices are subject to industry
demand for such products and the prices of competing products such as fast
SRAM's, SDRAM's, burst EDO-DRAM's and other specialty memories. The decrease
in product revenues for the quarter resulted primarily from a decrease in
average selling prices on EDRAM products, although revenue recognized during
the first quarter of 1996 included the fulfillment of a substantial EDRAM
product backlog which existed at the end of 1995 resulting from a limited
supply of EDRAM products at the end of 1995. FRAM product sales during the
first quarter of 1997 decreased by approximately $200,000 compared with the
respective period in 1996, due primarily to lower unit volume of products
shipped. The Company is continuing to manage its quarterly FRAM product
shipments in the $300,000 to $500,000 range until lower cost and higher volume
of product can be generated from the Company's existing FRAM alliance partners
or from other production sources.
Cost of product sales as a percentage of product revenues were 79% and 76% for
the first quarters of 1997 and 1996, respectively. The slight increase in
cost of product sales as a percentage of product revenues in the first quarter
of 1997 compared with the respective period in 1996 resulted primarily from
lower EDRAM average selling prices as discussed above. The Company has been
able to obtain lower EDRAM manufacturing costs from its suppliers and such
lower costs will be reflected in future periods as existing higher cost
inventories are sold. Cost of product sales associated with the Company's
FRAM products remains high due primarily to the introduction of new designs,
low volume of manufacturing in the Company's existing facility and the
continued development of manufacturing processes of such products.
<PAGE>
Research and development expenses decreased by $144,000 or approximately 5%
to $2.9 million in the first quarter of 1997 when compared with the
respective period in 1996. Expense decreases of approximately $430,000
occurred in the first quarter resulting from the termination of the Company's
employee incentive program which existed during the respective period in 1996.
Such decreases were partially offset by increases in costs associated with the
development of the Company's 16 megabit Enhanced Synchronous DRAM
("ESDRAM")products and from higher manufacturing costs incurred in
ferroelectric technology research and development programs utilizing the
Company's fabrication facility in Colorado Springs, Colorado.
Sales, general and administrative ("SG&A") expenses decreased by $216,000 to
$1.9 million or approximately 10% in the first quarter of 1997 when compared
with the respective period in 1996. Expense decreases of approximately
$260,000 occurred in the quarter resulting from the termination of the
Company's employee incentive program which existed during the respective
period in 1996. The Company also experienced lower commission costs associated
with the decrease in product sales revenues recorded during the quarter. Such
decreases in SG&A costs were partially offset by increased marketing costs
associated with the Company's existing EDRAM products and the announcement of
its 16 megabit Enhanced Synchronous DRAM products.
Interest expense, related parties during the first quarter of 1997 remained
flat with the respective period in 1996 as there were no additional borrowings
under the Company's line of credit with the National Electrical Benefit Fund
over the previous twelve months.
Other income during the first quarter of 1997 increased by $465,000 over the
respective period in 1996 resulting primarily from the collection of a
receivable written off in a prior period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balance as of March 31, 1997 was approximately $4 million,
representing a $.8 million increase from December 31, 1996. The Company
generated approximately $1.0 million from operations during the first quarter
of 1997 compared with the use of $2.9 million in operations for the respective
period in 1996. The generation of $1.0 million from operations during the
quarter resulted primarily from a $1.0 million decrease in inventories and
from a decrease in accounts receivable associated with the receipt of
approximately $3.0 million during January 1997 from a December 1996 license
agreement. Such sources of operations cash were partially offset by the net
loss incurred during the quarter and from changes in depreciation,
amortization and other working capital items. Approximately $150,000 was used
in investing and financing activities during the first quarter of 1997
compared with $80,000 in the respective quarter in 1996. Such increases
resulted primarily from increases in computer hardware and software purchases
used in the Company's FRAM and EDRAM research and development activities. As
of March 31, 1997, the Company had working capital of approximately
$8.9 million and total stockholders' equity of $18.5 million.
The Company intends to finance its operations and working capital requirements
during the remainder of 1997 by relying on its existing cash resources as of
March 31, 1997 of $4 million, payments from existing and future license and
development agreements and from the sale of the Company's products. The
Company's accounts receivable balance of $4.0 million as of March 31, 1996
includes a $2 million license fee from an existing licensee with payment to be
<PAGE>
received during the fourth quarter of the current year. If required, the
Company also has amounts available to it under a credit facility of $9.4
million as of March 31, 1996. Such credit facility agreement does not contain
any requirements for the Company to satisfy any performance criteria or
specific financial covenants other than those typically found in standard
commercial credit agreements in order for the Company to borrow amounts
pursuant to the credit facility.
The Company's future capital requirements include financing the growth of
working capital items such as accounts receivable and inventory, the purchase
of manufacturing equipment and the funding of research and development
efforts. The Company is continuing to pursue additional license and
development arrangements with third parties as a source of such capital. The
Company will also continue to seek reasonable sources of financing to satisfy
its future operating and working capital requirements, but has not yet
identified any specific new sources of such financing. There can be no
assurance, however, that such financing, if required, will be available or, if
available, will be on satisfactory terms to the Company.
OUTLOOK
The Company expects revenues will continue to be sporadic in the foreseeable
future until the Company's products gain wider market acceptance and can be
manufactured in increased volumes and in a more cost-effective manner. The
Company has historically depended and continues to depend on revenues from new
license arrangements and upon the achievement of milestones under the
Company's existing and new license agreements as the major contributor of
positive quarterly operating results. Such license revenue does not typically
occur on a consistent basis and is therefore expected to create substantial
fluctuations in the Company's future quarterly revenues and results of
operations.
The Company is continuing its efforts to improve existing internal
manufacturing capabilities and obtain commercial production of its FRAM
products through its alliance partners which the Company believes is essential
to its future profitability. The Company is also continuing its efforts to
reduce the cost of its FRAM products as well as to develop for
commercialization additional high-density FRAM products.
There can be no assurance that the Company's foundry and alliance partners
will be able to achieve commercial production of the products currently in
development or in the periods presented in the Company's annual report on
Form 10-K for the year ended December 31, 1996. If such commercial production
is not achieved or is not achieved in a timely manner, the Company's results
of operations could be materially adversely affected.
In April 1997, the Company signed an agreement with Racom Systems, Inc.
("Racom") and Intag International Limited ("Intag") to significantly increase
the availability of Ramtron's ferroelectric random access memory (FRAM)
technology for use in radio frequency identification (RF/ID) markets and
applications. The agreement shall terminate upon the expiration of the last
to expire of any effective rights protecting the licensed technology. The
agreement replaces all existing licensing and supply agreements and
memorandums of understanding between the parties. Under the agreement, Racom
retained its rights to use Ramtron's ferroelectric random access memory
<PAGE>
technology for use in RF/ID applications and Racom's right to sublicense such
technology for manufacturing purposes has been limited to no more than five
(5) parties pursuant to Ramtron's approval of such sublicensees. As of
May 13, 1997, Racom has sublicensed to two separate companies. Under the
agreement, Racom was also granted unlimited sublicensing rights for design,
development and selling of RF/ID products with Ramtron's approval. Ramtron
has agreed to coordinate its own licensing activities of FRAM technology,
including the unrestricted licensing of FRAM technology for use in RF/ID
applications, with Racom, until such time as Racom completes its five (5) full
sublicensing agreements. Pursuant to the agreement, the Company also granted
to Intag the right to use the Company's ferroelectric random access memory
technology for use in RF/ID applications with no right to sublicense such
technology for manufacturing purposes but with unlimited sublicensing rights
for design, development and selling of RF/ID products with Ramtron's approval.
Under the agreement, Ramtron's licensees and/or their current or future
sublicensees shall grant a license back to the Company on any improvements
developed by such licensees and/or sublicensees concerning ferroelectric
technology. The parties to the agreement have agreed to share, with certain
limitations, future licensing and royalty revenues associated with such
ferroelectric RF/ID licensing activities.
In April 1997, the Company entered into a two-phase, nonexclusive agreement
with ULVAC Japan, Ltd. ("ULVAC"), a semiconductor equipment company, for the
joint development of equipment that will optimize the integration and
the ability to manufacture advanced ferroelectrics and semiconductor
capacitors. Under Phase I of the agreement, the parties will develop a
ferroelectric capacitor using ULVAC equipment to achieve optimal performance
of the capacitor. ULVAC will supply certain ULVAC brand equipment to the
Company at a significantly reduced price for use in the development of such
ferroelectric capacitor. Under Phase II of the agreement, ULVAC shall furnish
certain additional ULVAC brand equipment (to remain owned by ULVAC unless
purchased by Ramtron at the end of the four year term of the agreement) to the
Company for use in evaluations, experiments and prototype manufacturing.
Ramtron and ULVAC will jointly own all title in any improvements, enhancements
or inventions made by either party under the agreement.
PART II - OTHER INFORMATION
ITEMS 1 - 5 None
ITEM 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.1* Joint Development Agreement between the Company
and ULVAC Japan, Ltd., dated April 9, 1997.
Exhibit 10.2* Tripartite Technology Agreement between the
Company, Racom Systems, Inc. and Intag
International Ltd., dated April 15, 1997.
Exhibit 27 Financial Data Schedule
* Confidential treatment has been granted or requested with respect to
portions of this exhibit, and such portions have been replaced with "**".
Such confidential portions have been deleted and separately filed with
the Securities and Exchange Commission pursuant to Rule 24b-2.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on January 9, 1997.
Reported was "Item 5 - Other Events."
The Company filed a report on Form 8-K on February 19, 1997.
Reported was "Item 5 - Other Events."
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAMTRON INTERNATIONAL CORPORATION
(Registrant)
May 14, 1997 /S/ Richard L. Mohr
Richard L. Mohr
Executive Vice President and
Chief Financial Officer
(Principal Accounting Officer)
* Confidential treatment has been granted or requested with respect to
portions of this exhibit, and such portions have been replaced with "**".
Such confidential portions have been deleted and separately filed with
the Securities and Exchange Commission pursuant to Rule 24b-2.
JOINT DEVELOPMENT AGREEMENT
THIS JOINT DEVELOPMENT AGREEMENT ("Agreement") is entered into and made
effective as of April 9, 1997 by and between Ramtron International
Corporation, ("Ramtron"), a Delaware corporation having its principal place
of business at 1850 Ramtron Drive, Colorado Springs, Colorado and ULVAC
Japan, Ltd., ("ULVAC"), a Japanese corporation, having its principal place
of business at 2500 Hagisono, Chigasaki, Kanagawa, 253, Japan.
WHEREAS, Ramtron is engaged in the business of designing, integrating, and
developing state-of-the-art ferroelectric semiconductor technology.
WHEREAS, ULVAC is engaged in the business of manufacturing fabrication
equipment for the semiconductor industry.
WHEREAS, Ramtron and ULVAC desire to establish a successful relationship in
the joint development of equipment that will optimize the integration and
manufacturability of advanced ferroelectrics and semiconductor capacitors.
NOW THEREFORE, in consideration of the premises hereof and the mutual
promises, the parties agree as follows:
1. DESCRIPTION OF DEVELOPMENT PROJECT
Ramtron and ULVAC hereby agree to enter into a cooperative arrangement
comprised of at least two (2) phases under which the parties shall
establish a baseline study with respect to FRAM processes for which ULVAC
has developed functional applications. Under the Development Project, the
parties shall jointly conduct materials and process solution experiments to
the FRAM fabrication process that shall result in achieving optimal FRAM
performance at the device level, pursuant to the terms and conditions as
more fully described in the Statement Of Work (SOW), labelled Attachment
"A" and attached hereto and incorporated herein by reference. It is hereby
specifically agreed that such experiments shall involve the evaluation of
certain equipment designed and manufactured by ULVAC including, but not
limited to, the SPZ-1000, Phoenix Asher, V-Series Vertical Furnaces,
Etchers and other equipment that may be mutually agreed to by the parties.
2. PROJECT LEADERS
The parties hereby agree that the Project Leader for Ramtron shall be
Mr. Tom Davenport and the Project Leader for ULVAC shall be Mr. Yoshifumi
Ota. The responsibilities of the Project Leaders shall be to coordinate the
individual work and/or shared work as set forth in the SOW with respect to
the equipment deliverables as described in Attachment "B" and the cost
sharing as described in Attachment "C", both attached hereto and
incorporated herein by reference.
<PAGE>
3. PHASE I PROJECT OBJECTIVES
The parties hereby agree that the primary goal of Phase I is to develop a
ferroelectric capacitor stack using the SPZ-1000 equipment-set to achieve
optimal physical and electrical properties. More specifically, the parties
shall endeavor to develop (i) a stable PZT capacitor deposition process
with materials now used by Ramtron and (ii) an effective strip process for
PZT and Pt-etch residues, as more fully described in the SOW. In addition,
the Project shall focus on (i) the immediate FRAM related manufacturing
requirements of Ramtron's licensees: **
; (ii) the ability to reliably demonstrate FRAM related
applications of the SPZ-1000 and Phoenix Asher equipment-sets to potential
licensees of Ramtron and (iii) a technical evaluation of the potential of
the V-Series and Etching equipment-sets to deliver optimal FRAM process
solutions.
4. PHASE I EQUIPMENT PURCHASE
During the course of Phase I, Ramtron shall purchase from ULVAC and ULVAC
shall deliver to Ramtron, F.O.B., to Ramtron's Colorado Springs, Colorado
facility, a Phoenix Asher equipment-set. The terms and conditions of such
purchase shall be set forth in a separately negotiated purchase order, the
execution of which shall be tied to the execution of this Agreement.
5. PHASE I EQUIPMENT EVALUATION
During the course of Phase I, the parties shall provide to the other party
an evaluation of the capabilities and benefits of ULVAC etching equipment-
set and V-series vertical furnaces.
6. PHASE I TERM
Phase I shall remain in force and effect for a period of nine (9) months
following the execution of this Agreement or until such date as the parties
enter into Phase II of the Development Project, whichever first occurs.
7. PHASE II PROJECT OBJECTIVES
The parties hereby agree that upon completion by Ramtron of the Phase I
evaluations to be performed by Ramtron as set-forth in the SOW, the parties
shall commence Phase II, during which the parties shall (i) use ULVAC's
SPZ-1000 equipment-set to advance materials development and processes for
an integrated FRAM stack, as defined by the Project Leaders and pursuant to
the specific Phase II objectives described in the SOW.
8. PHASE II EQUIPMENT EVALUATION
In consideration of completion of the evaluations undertaken by Ramtron
during Phase I, and the purchase of the equipment-set related thereto
(Phoenix Asher), ULVAC shall furnish to Ramtron an SPZ-1000 equipment-set.
The SPZ-1000 shall be delivered F.O.B. to Ramtron's Colorado Springs,
Colorado facility. The parties expressly agree that title in the
aforementioned equipment-set shall remain fully and exclusively with ULVAC.
Ramtron shall provide adequate care and precaution for the security of
ULVAC's property on Ramtron site. Ramtron shall use such equipment-set to
undertake the Phase II evaluations and experiments and prototype
manufacturing as defined by the Project Leaders in the SOW. Ramtron shall
not modify, reform or in whatever form make changes to SPZ-1000 without the
prior written consent of ULVAC. By the end of 4 years after signing date of
this Agreement, Ramtron shall have the option, but not the obligation, to
purchase from ULVAC, the SPZ-1000 equipment-set, as described in Attachment
"B", on terms to be mutually agreed to by the parties.
<PAGE>
9. PHASE II TERM
The parties hereby agree that Phase II shall commence upon the successful
completion of Phase I and upon the delivery by ULVAC to Ramtron of the SPZ-
1000 equipment-set set forth in Attachment "B". Phase II shall continue in
force and effect for such a period as described in Attachment A 2.2
following the delivery by ULVAC to Ramtron of the SPZ-1000 equipment-set.
10. PLANT VISITS
When visiting the other party's facilities, representatives and personnel
of each party shall be subject to all rules and regulations prevailing on
the premises of such party. None of the representatives or personnel of
either party shall be considered, for any reason, to be an employee of the
other party. Plant visits shall be coordinated through the Project
Leaders. In the event that any employee of ULVAC visits Ramtron's premises,
or any employee of Ramtron shall visit ULVAC's premises as contemplated
pursuant to this Section, then the sending party shall be responsible for
any and all liability of any type whatsoever to any other person, form or
entity arising from any direct or indirect action or inaction relating to
the carrying out of its employee's duties under the terms of this Section.
Each party shall also cause its employees to be covered by its respective
liability insurance policy or policies. Whether or not any action or
inaction of any such employee is covered by insurance, each party hereby
agrees to hold harmless and indemnify the other party against and from all
losses, claims, damages, liabilities, obligations or expenses (including
attorneys fees, court costs, and costs of investigation) incurred or to
which it may become subject as a result of any action or inaction relating
to the carrying out of its employee's duties as contemplated herein. In
addition, each party shall be solely responsible for all costs it may incur
during the terms of this Agreement related to air travel, meals and lodging
expenses, and/or other employee costs and expenses.
11. INTELLECTUAL PROPERTY
a. It is understood and agreed that Ramtron shall retain sole
ownership to all patents, patent applications, maskwork rights, copyrights,
trade secrets, know-how and other intellectual property rights in all
countries of the world relating to Ramtron's proprietary ferroelectric
technology.
b. It is understood and agreed that ULVAC shall retain sole ownership
to all patents, patent applications, maskwork rights, copyrights, trade
secrets, know-how and other intellectual property rights in all countries
of the world relating to ULVAC's proprietary equipment design and
development technology.
c. Ramtron and ULVAC shall jointly own, in equal and undivided
shares, all right, title and interest in and to any improvements,
enhancements and/or inventions made by either party during the terms of
this Agreement. From time to time when necessary during the term of this
Agreement, there shall be a meeting of a joint development technology
committee, which shall consist of the Project Leaders and one (1)
additional member appointed by each of Ramtron and ULVAC, who is
knowledgeable in the area of intellectual property matters (the "Joint
Development Technology Committee"). In the event any patentable joint
improvement is discovered under this Agreement during the preceding period,
the responsibility of the Joint Development Technology Committee shall be
to determine the following:
<PAGE>
1. whether or not a patent application will be prepared and filed
for such invention;
2. which party will apply for such joint patent right and the
sharing of costs associated with the preparation and filing of
such joint patent right; and
3. which countries such joint patent applications will be filed
for.
Ramtron and ULVAC will each render any and all reasonable assistance to the
other party including, but not limited to, the execution and delivery of
any additional documents reasonably requested by such other party, at such
other party's expense, in order for such other party to perfect, register
and/or enforce any and all intellectual property rights and such other
party's joint ownership therein in any and all countries throughout the
world as may be mutually agreed to by the Joint Development Technology
Committee. Each party hereto, may perpetually use, without payment to the
other party, joint improvements, joint patent rights or any other statutory
intellectual property resulting from joint improvements made during the
course of the development project to the extent permitted under applicable
law. The parties shall not grant to a third party a license of joint
patent rights without the other party's prior written consent, which
consent shall not unnecessarily be withheld.
12. EQUIPMENT RECOMMENDATION
Upon the successful completion of the Development Project, regarding the
integration of advanced multi-level metal processes with ferroelectric
process technology, then Ramtron shall agree to promote the use of ULVAC's
equipment to prospective third party licensees. Such promotion by Ramtron
shall be in the form of material inducements and/or incentives as shall be
determined by Ramtron, within its sole discretion after consulting with
ULVAC, and which may further be agreed to in the course of negotiation
between Ramtron and such potential third party licensees.
13. CONFIDENTIALITY
a. The term "Confidential Information" shall mean any information
disclosed by one party to the other, or jointly created by the parties
pursuant to this Agreement, which is on written, graphic, machine-readable,
or other tangible form, and is marked "Confidential" or, in some other
manner, indicates its confidential nature. Confidential Information may
also include oral information disclosed by one party to the other pursuant
to this Agreement, provided that such information is designated as
confidential at the time of disclosure and is reduced to writing by the
disclosing party within a reasonable time (not to exceed thirty (30) days)
after its oral disclosure, and such writing is marked in a manner to
indicate its confidential nature and delivered to the receiving party.
Notwithstanding the foregoing, the SPZ-1000 equipment-set, including all
parts thereof provided to Ramtron by ULVAC during Phase II, constitutes
"Confidential Information" regardless of whether its confidential nature is
expressly indicated or not.
<PAGE>
b. For a period of five (5) years from the receipt thereof, or from
the time when the information was developed or jointly created, neither
party shall knowingly publish or disseminate or disclose to any third party
any of the Confidential Information, except to the employees or
subcontractors of the receiving party who reasonably needs to know such
Confidential Information and who have secrecy obligations to the sending
party regarding such Confidential Information. Each page of each document
which contains Confidential Information shall be stamped with the
confidential legend of the party transferring the documents.
Notwithstanding this Section 13b or any other provisions of this Agreement,
the obligations set forth in this Section 13b shall not in any way restrict
or impair the right of the receiving party to disclose to any third party
any Confidential Information:
(i) Which is or becomes publicly available without breach of
this Agreement;
(ii) Which is already in the possession of the receiving party
or any of its subsidiaries, as evidenced by the written
records of the receiving party or any of its subsidiaries;
(iii) Which is rightfully received by the receiving party or any
of its subsidiaries from a third party;
(iv) Which is independently developed by the receiving party or
any of its subsidiaries, as evidenced by the written
records of the receiving or any of its subsidiaries;
(v) Which is released for disclosure to any third party by the
disclosing party with its written consent; or
(vi) Which is inherently disclosed by the use, lease, sale,
distribution, design or operation of any product or
service, including associated documentation.
c. Disclosure of Confidential Information will not be precluded if
such disclosure is:
(i) In response to a valid order of a court or government body
of the United States or Japan; provided, however, that the
receiving party shall first have given notice to the
disclosing party and made a reasonable effort to obtain a
protective order requiring that the Confidential
Information so disclosed be used only for the purpose for
which the order was issued;
(ii) Otherwise required by law; or
(iii) To the legal representative or a party hereto.
d. Nothing in this Agreement creates any obligation in any way
limiting or restricting assignment and/or reassignment of employees by the
receiving party or any of its subsidiaries, to or from or within any such
subsidiaries.
e. The parties hereby agree that the terms and conditions of the
Agreement shall be deemed Confidential Information.
<PAGE>
f. If deemed by the parties to be necessary for the purpose of this
Agreement, each party will designate one or more Document Manager(s) whose
responsibility is to receive, on behalf of the receiving party, all
Confidential Information pursuant to this Agreement, and to monitor within
their company the distribution of the received Confidential Information for
the purpose of this Agreement.
14. COMPLIANCE WITH LAWS AND REGULATIONS
a. The parties shall comply with all applicable governmental laws,
ordinances and regulations. Each will be solely responsible for its own
individual violations of any such laws, ordinances and regulations.
b. The parties understand and agree that they are subject to all
applicable laws and regulations of the United States of America ("USA") or
Japan and any other applicable jurisdiction with respect to the export and
use of services and/or technology sourced from the USA or any other
applicable jurisdiction. The parties shall comply in all respects with
such laws and regulations insofar as they may apply to their performance
under this Agreement. The parties are not to export or re-export, directly
or indirectly, (i) any technical data received from the other party under
this Agreement, or (ii) any product based on the process and/or technical
data to any country to which such export or re-export is restricted or
prohibited by USA or Japan or other relevant laws without obtaining prior
authorization from the competent government authorities as required by
those laws.
15. AMENDMENTS
No part of this Agreement may be amended, altered, or otherwise changed
unless in writing duly executed by the parties hereto.
16. REPRESENTATIONS OF THE PARTIES
Each party represents and warrants to the best of its knowledge and belief
that it has the right to perform the technical and engineering services
herein without violation of obligations to others and without violation of
any patents either party knows to exist, and that each party has the right
to disclose to the other party any and all information transmitted to the
other party in the performance of such services under this Agreement, and
each party agrees that the information submitted to the other party,
whether patentable or not, may be utilized by the other party to advance to
objectives as set forth herein.
17. TERM AND TERMINATION
a. Term.
This Agreement shall become effective on the date first above set forth,
and shall be valid for a period of four (4) years unless extended by mutual
consent of the parties.
b. Default.
If either party hereto is in default of any material obligation imposed on
it herein for more than sixty (60) days after written notice has been given
by the other party to the party in default, the other party may, in
addition to any other rights or remedies available to such other party,
terminate this Agreement by written notice to the defaulting party.
<PAGE>
c. Termination for Insolvency.
In the event of the institution of any proceedings by or against either
party in bankruptcy or insolvency or under any other provisions of the
Bankruptcy Act including proceedings under Chapter X and XI thereof, or the
appointment of a receiver or trustee or an assignment for the benefit of
creditors of the bankrupt or insolvent party, the other party, after
providing notice, may terminate this Agreement. Any termination under this
provision shall be deemed to be a termination for default in accordance
with this Section 17.
d. Survival.
Upon expiration or termination of this Agreement, all rights, privileges
and obligations hereunder shall cease; provided, however, that
notwithstanding the termination of this Agreement, the provisions of
Article 13 (CONFIDENTIALITY), 14 (COMPLIANCE WITH LAWS AND REGULATIONS),
16 (REPRESENTATIONS OF THE PARTIES), 19 (LIMITATION OF LIABILITY),
20 (ASSIGNMENT), AND 23 (ARBITRATION), shall survive and continue to be
binding on the parties.
18. INDEMNITY
Each party shall defend, indemnify and hold the other party harmless
against all claims, suits, costs, damages and judgments incurred, claims
sustained by third parties, whether for personal injury or otherwise,
because of the evaluation, experiments and all other activities of whatever
kind or nature arising under this Agreement. IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR INCIDENTAL
DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES ARISING IN ANY
WAY OUT OF THIS AGREEMENT.
19. LIMITATION OF LIABILITY
THIS ARTICLE 19 STATES EACH PARTY'S TOTAL LIABILITY AND RESPONSIBILITY, AND
EACH PARTY'S SOLE REMEDY, FOR ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY
PATENT, TRADEMARK, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT BY FRAM
TECHNOLOGY, ULVAC TECHNOLOGY, OR IMPROVEMENTS MADE THERETO, OR ANY PART
THEREOF. THIS SECTION IS IN LIEU OF AND REPLACES ANY OTHER EXPRESSED OR
IMPLIED OR STATUTORY WARRANTY AGAINST INFRINGEMENT. IN NO EVENT SHALL
EITHER PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES RESULTING FROM SUCH INFRINGEMENT.
20. ASSIGNMENT
Each party to this Agreement may not assign this Agreement or any rights
under this Agreement without the expressed written permission of the other
party.
21. NOTICES
All notices and other communications required or permitted hereunder may be
sent by fax unless either party requests more formal communication, in
which case notices and communications shall be in writing and shall be
mailed by registered or certified mail postage prepaid, or otherwise
delivered by hand, by messenger or by telecommunication, addressed to the
addresses first set forth above or at such other address furnished with a
notice in the manner set forth herein. Such notices shall be deemed to
have been served when delivered or, if delivery is not accomplished by
reason of some fault of the addressee, when tendered.
<PAGE>
22. APPLICABLE LAW
The validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties hereto shall be
governed in accordance with the substantive laws of the state of Delaware,
USA.
23. ARBITRATION
Any dispute, controversy, or claim arising out of or related to this
Agreement, or the creation, validity, interpretation, breach, or
termination of this Agreement that has not been amicably resolved between
the parties, shall be finally settled by binding arbitration under the
Rules of Conciliation and Arbitration of the International Chamber of
Commerce. The arbitration shall be conducted in Japanese and take place in
Japan if it is initiated by Ramtron or conducted in English and take place
in the United States if it is initiated by ULVAC.
The expenses of arbitration shall be borne by the party against whom the
decision is rendered, or apportioned in accordance with the decision of the
arbitrator if there is a compromise decision. Judgment upon any award may
be entered in any court of competent jurisdiction. If the arbitrator
determines that either party has proceeded in bad faith with respect to the
subject matter of the arbitration proceedings, then the arbitrator shall
require such party to reimburse the other party for the attorney fees and
out of pocket expenses incurred by the other party in connection with the
arbitration.
THIS ARTICLE 23 DOES NOT APPLY TO ANY BREACH OF OBLIGATION OF ARTICLE 13
(CONFIDENTIALITY). EACH PARTY MAY SEEK RELIEF FROM THE COURTS (INCLUDING
INJUNCTIVE AND OTHER EQUITABLE RELIEF) IN CONNECTION WITH ANY SUCH BREACH.
24. FORCE MAJEURE
Neither party shall be responsible for its failure to perform due to causes
beyond its reasonable control such as, but not limited to, acts of God,
fire, theft, war, riot, embargoes or acts of civil or military authorities.
25. ENTIRE AGREEMENT
The terms and conditions herein contained constitute the entire agreement
between the parties and supersede all previous agreements and
understandings, whether oral or written, between the parties hereto with
respect to the subject matter hereof and no agreement or understanding
varying or extending the same shall be binding upon either party hereto
unless in a written document signed by the party to be bound thereby. This
Agreement shall take precedence over any other document that may be in
conflict therewith.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their authorized representatives as of the effective date first above
written.
ULVAC Japan, Ltd. RAMTRON INTERNATIONAL CORPORATION
By:/S/ Kyuzo Nakamura By:/S/ Greg Jones
Name: Kyuzo Nakamura Name: Greg Jones
Title: President and CEO Title: President
<PAGE>
ATTACHMENT "A"
TO
JOINT DEVELOPMENT AGREEMENT
BY AND BETWEEN
RAMTRON INTERNATIONAL CORPORATION
AND
ULVAC JAPAN, LTD.
STATEMENT OF WORK
1. INTRODUCTION
1.1 Background: Schedules and milestones are included in the
Statement of Work as the framework to describe planned activities and
events. A number of equipment areas are covered independently, but should
result in a cohesive program whereby ULVAC's equipment-set can be
recommended by Ramtron due to its having performed ferroelectric processes
in superior fashion. The equipment-set is comprised of the following
pieces: sputtering, ashing, etch and furnace.
2. SPUTTERING EQUIPMENT
2.1 PHASE 1: The ULVAC SPZ-1000 will be optimized for ferroelectric
stack depositions during this phase, lasting nine months from the date of
signing this agreement. Modifications will be made to the system as
required by ULVAC. Evaluating the stack electrical performance will be
done by Ramtron. Phase 1 will be considered complete when Ramtron and
ULVAC determine through mutual consultations that the ferroelectric stack
deposition process has matured to the point where more rapid evaluation
results will be beneficial and prototype production can be run. Ramtron
will analyze the patterned ferroelectric capacitor structures for
switching, retention, fatigue, microstructure, grain structure and
composition.
2.2 PHASE 2: The SPZ-1000 machine will be transferred to Ramtron,
Colorado Springs at the beginning of Phase 2. The work undertaken will
include composition, microstructural, electrical and other optimizations.
Specific Phase 2 objectives will be defined by the parties through mutual
consultations. A minimum of 50 wafers per month will be supplied by
Ramtron for the development. Machine time for joint development work will
be shared with customer evaluations, including ULVAC's customer
evaluations, at ULVAC's cost and Ramtron prototype production. ULVAC will
provide in-house support during Phase 2 to the extent agreed to by the
parties. Phase 2 will last until such time as the specific Phase 2
objectives described above are achieved or termination of this Agreement,
whichever comes first.
2.3 Objectives and term of the subsequent phase shall be determined
through mutual consultations.
3. ASHING EQUIPMENT
3.1 Phase 1 has already commenced with an effort conducted jointly
between ULVAC and Ramtron whereby the Phoenix Asher was evaluated for
performance in regards to several ferroelectric process steps, including
yield analysis and residue removal efficiency.
<PAGE>
3.2 Phase 1 will continue after the delivery of the Phoenix to
Ramtron, Colorado Springs and will consist of Ramtron using the asher for
prototype production and evaluations of yield analysis and residue removal
efficiency thereafter. Alliance customers, both potential and current,
will be able to evaluate the performance of the Phoenix for broad
ferroelectric application as full qualification proceeds for Ramtron
product families (Local Interconnect and non-Local Interconnect families;
each of nine process steps for Local Interconnect, each of seven process
steps for non-Local Interconnect).
4. ETCHING EQUIPMENT
4.1 Necessary number of stack and/or individual layer films will be
patterned photolithographically at Ramtron for etch development work at
ULVAC.
4.2 Subsequent processing for ferroelectric device performance
evaluation will be done at Ramtron. The evaluation will be considered
complete when qualification wafers achieve adequate yields, as compared to
Ramtron's standard process. Etch degradation, selectivity, linewidth
control and cleanliness will be evaluated. If ULVAC's etching etcher is
proven to be beneficial for ferroelectric production, then this piece of
equipment will be recommended as part of the standard equipment-set to
present and potential alliance partners.
5. FURANCE EQUIPMENT
5.1 Necessary number of wafers for the development of annealing
processes for ferroelectric applications will be fabricated at Ramtron and
supplied to the appropriate ULVAC demo laboratory.
5.2 After anneal, the wafers will then be evaluated at Ramtron to
include analysis of as-annealed properties and subsequent integration steps
followed by further analysis. Microstructural and electrical performance
will be evaluated utilizing x-ray diffraction and stress measurements. If
the Series V, furnaces are proven to be beneficial for ferroelectric
production, these pieces of equipment will be recommended as part of the
standard equipment-set to present and potential alliance partners.
<PAGE>
ATTACHMENT "B"
TO
JOINT DEVELOPMENT AGREEMENT
BY AND BETWEEN
RAMTRON INTERNATIONAL CORPORATION
AND
ULVAC JAPAN, LTD.
PHASE 2 EQUIPMENT DELIVERABLES
SPZ-1000: complete machine in standard ferroelectric configuration utilized
by alliance customers.
1 RF Module
2 DC Modules
1 Etch Module
1 Heat Module
2 Cassette Modules
TARGETS:
Following targets are delivered to Ramtron by ULVAC to use for SPZ-1000 and
remain the property of ULVAC:
Platinum 2 Pieces
Titanium 1 Piece
Ferroelectric 2 Pieces (Standard composition PZT)
<PAGE>
ATTACHMENT C
COST SHARING
The both parties agree to the following cost sharing related to this
Agreement and on the basis of the conditions pursuant to this Agreement;
PHASE 1
- -----------------------------------------------------------------------------
RAMTRON ULVAC
- ---------------------------------- -----------------------------------
1. Wafers for evaluation 1. Sampling Work
2. Transportation of the wafers 2. Transportation of the samples
to ULVAC to Ramtron
3. Evaluation work of the samples 3. Modification work/materials
- -----------------------------------------------------------------------------
PHASE 2
- -----------------------------------------------------------------------------
RAMTRON ULVAC
- ---------------------------------- -----------------------------------
1. Preparation work/materials for 1. Transportation/Installation of
installing SPZ-1000 at Ramtron SPZ-1000 to/at Ramtron
2. Wafers for evaluation 2. Modification work/materials
3. Utilities for SPZ-1000 3. Maintenance work/materials
4. Evaluation work of the samples 4. Targets specified in Attachment
B (Used targets owned by ULVAC)
5. System repair work/materials 5. System repair work/materials if
if the damage is caused by the damage is caused by fault
fault of Ramtron of ULVAC
- -----------------------------------------------------------------------------
Shared at 50:50 by Ramtron and ULVAC
- -----------------------------------------------------------------------------
1. Ferroelectric targets jointly developed for SPZ-1000 (Used targets
jointly owned)
- -----------------------------------------------------------------------------
* Confidential treatment has been granted or requested with respect to
portions of this exhibit, and such portions have been replaced with "**".
Such confidential portions have been deleted and separately filed with
the Securities and Exchange Commission pursuant to Rule 24b-2.
TRIPARTITE TECHNOLOGY AGREEMENT
This TRIPARTITE TECHNOLOGY AGREEMENT (the "Agreement") is dated this 15th day
of April, 1997, by and among Ramtron International Corporation ("Ramtron"
and/or "Licensor"), a Delaware corporation having its principal office at 1850
Ramtron Drive Colorado Springs, Colorado 80921, Racom Systems Inc. ("Racom"),
a Delaware corporation having its principal office at 6080 Greenwood Plaza
Boulevard, Englewood, Colorado 80111, and Intag International Limited
("Intag"), a company incorporated in Australia, having its principal office at
Kyle House, 9th Floor, 27-31 Macquarie Place, Sydney, NSW 2000, Australia.
R E C I T A L S
A. Ramtron has developed and owns certain confidential and proprietary thin-
film ferroelectric technology pertaining to (i) the manufacture and production
of nonvolatile, random access semi-conductor memory devices that utilize
binary polarization states on the hysteresis curve of ferroelectric material,
(ii) technology pertaining to the material and process for the formation of
ferroelectric film, and (iii) unipolar high dielectric materials and
processes; including, but not limited to, the technology described in the
patents listed in Schedule 1 to this Agreement.
B. Ramtron and Racom entered into a Technology License Agreement dated
October 23, 1991 (the "License Agreement") whereunder Ramtron licensed its
Ferroelectric Technology to Racom for use in the design, manufacture, sale,
lease and distribution of Ferroelectric RF/ID Products, as such term is
defined in the License Agreement.
C. Ramtron and Racom entered into a Supply Agreement dated October 23, 1991
(the "Supply Agreement") whereunder Ramtron agreed to manufacture on behalf of
and supply to Racom, and Racom agreed to purchase from Ramtron, certain
Ferroelectric RF/ID Products.
D. Ramtron and Racom subsequently amended the License Agreement and Supply
Agreement pursuant to an amendment entitled "Amendment to Technology License
Agreement and Supply Agreement" dated March 31, 1994 ("First Amendment"), and
the parties negotiated a second amendment entitled "Second Amendment to
Technology License and Supply Agreement" dated February 17, 1995 ("Second
Amendment").
E. Ramtron, Racom and Intag entered into a binding Memorandum of
Understanding dated May 8, 1995 ("MOU") wherein Ramtron, Racom and Intag
agreed to (i) further modify the License Agreement, as amended, between
Ramtron and Racom, and (ii) enter into a License Agreement among the parties
incorporating the terms of the MOU between Ramtron and Intag.
<PAGE>
F. Subsequent to execution of the MOU, each of Ramtron, Racom and Intag now
desire to terminate the MOU and establish a new relationship that provides for
the license of Ramtron's Ferroelectric Technology for use in Ferroelectric
RF/ID Products to each of Racom and Intag on a nonexclusive basis to enable
each party to maximize the potential of commercializing Ferroelectric RF/ID
Products in the market and expand the number of royalty paying sublicensees.
Therefore, the parties have agreed to replace the MOU and License Agreement,
as amended, and further provide for termination of the Supply Agreement, as
amended and set forth new terms and conditions in one agreement.
G. As a part of this new arrangement, Ramtron undertakes that it will use its
best endeavors to ensure that all future Ferroelectric Memory Product
manufacturing licenses issued by Ramtron include the right to manufacture
Ferroelectric RF/ID Products. Similarly, Ramtron undertakes that it will not
unreasonably deny access to any party wishing to make Ferroelectric RF/ID
Products which incorporate within their structure Ferroelectric Technology, so
long as the royalty expectations for Ferroelectric RF/ID Products, as set out
in Section 2.7, are satisfied. Ramtron also undertakes that in its future
licensing of Ferroelectric Technology the terms of such licenses will not
unreasonably deny such access.
NOW THEREFORE, in consideration of the mutual promises contained herein, the
sufficiency and receipt of which is acknowledged, the Parties agree as
follows:
1. ARTICLE I - DEFINITIONS
When used in this Agreement, the following terms have the following meanings:
1.1 "Affiliate" means any enterprise, whether a corporation, unincorporated
association, joint venture, partnership or otherwise in which a person or
corporation, any holding company or subsidiary of such corporation, or any
holding company or subsidiary of such holding company, participates directly
or indirectly and in relation to such enterprise, such person, corporation or
any such holding company or subsidiary has the power to appoint the management
thereof, and control the majority of votes at a general meeting.
1.2 "Change in Control" shall mean if "person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of voting shares of Licensees and is entitled to
exercise more than 50% of the total voting power of all outstanding voting
shares of Licensees (including any voting shares that are not then outstanding
of which such person or group is deemed the beneficial owner) unless such
"person" or "group" was entitled to exercise more than 50% of such total
voting power as of the Effective Date; or any consolidation of Licensees with,
or merger of Licensees into, any other entity, any merger of another entity
into Licensees, or any sale or transfer of all or substantially all of the
assets of Licensees to another entity (other than a merger which does not
result in any reclassification conversion, exchange or cancellation of
outstanding shares of Licensees or a merger which is effected solely to change
the jurisdiction of incorporation of Licensees).
1.3 "Dollars" or "dollars" or "$" means United States currency unless
otherwise specified.
1.4 "Effective Date" means the date of this Agreement as set forth in the
introductory paragraph of this Agreement.
<PAGE>
1.5 "Existing License Agreements" mean Seiko Epson Corporation ("Seiko"),
Deutsche ITT Industries GHBE ("ITT"), Toshiba Corporation ("Toshiba"),
and Samsung Electronics ("Samsung").
1.6 "Ferroelectric Memory Product" means any semiconductor non-volatile
memory device which utilizes Ferroelectric Technology."
1.7 "Ferroelectric RF/ID Products" means any semiconductor device which has
embedded within itself Ferroelectric Technology and which also contains the
necessary circuitry for that device to communicate by contactless means with a
remote device.
1.8 "Ferroelectric Technology" means all technology, referred to in
Recital A, and Improvements (as hereafter defined) necessary for the design,
development, and manufacture of RF/ID products.
1.9 "Improvements" means all improvements, enhancements and developments to
the Ferroelectric Technology that would relate to the design, development
and/or manufacturing of Ferroelectric RF/ID Products and technology, processes
and materials for use therein, made either by Ramtron or its Affiliates, or by
either of the Licensees or one of their sublicensees, or to which any such
party may be entitled or may become entitled. "Improvements" shall not
include any such improvements, enhancements and developments, if Ramtron,
Racom or Intag, or any of their Affiliates or sublicensees, as the case may
be, are prohibited from making same available to Ramtron or Licensees, as the
case may be, pursuant to a contact, extent at the time of signing this
agreement, with a third party or an Affiliate or pursuant to any judicial
order or proceeding.
Notwithstanding the foregoing, Licensees 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. Licensees'
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 and all such
Improvements.
1.10 "Licensees" mean Racom and Intag collectively.
1.11 "Net Sales" means the total of all gross amounts either Racom, Intag,
their sublicensees, or Ramtron (as the case may be) invoices or charges
purchasers or sublicensees or otherwise receives, whether from purchasers or
sublicensees for or with regard to the sale, license or other transfer for
value of Ferroelectric RF/ID Products in integrated circuit or wafer form,
that are manufactured and sold, disposed of, or otherwise transferred by (or
manufactured on behalf of Racom and/or Intag by any sublicensee or
subcontractor) less costs of insurance incident to transportation and shipping
charges, excise taxes and customs duties allowances for actual returns and
uncollectible accounts. Should Licensees, any sublicensee, or Ramtron sell
such Ferroelectric RF/ID Products in combination with other components or
equipment, then the calculation of Net Sales shall be based on the price
normally charged by Licensees, sublicensees, or Ramtron for such Ferroelectric
RF/ID Products when separately invoiced or priced, or if no such separately
invoiced or priced sales of such Ferroelectric RF/ID Products have been made,
then the calculation of Net Sales shall be based on the price which Licensees,
sublicensees, or Ramtron, would charge for such Ferroelectric RF/ID Products
in an arm's length commercial sale transaction for cash.
<PAGE>
1.12 "Omni-license" means a license which permits a licensee to manufacture
for customers Ferroelectric Memory Products without regard to the application
for which the customer intends to use those Ferroelectric Memory Products.
1.13 "Royalty Period" means a period of three (3) months ending on the last
day of March, June, September and December of each year (or portion thereof)
this Agreement is in effect referred to in Section 2.8, following the
expiration of the immediately preceding Royalty Period.
1.14 "Royalty Year" means each period comprised of each consecutive set of
four (4) Royalty Periods.
1.15 "Technology License" has the meaning set forth in Section 2.1, 2.2
and 2.3.
2. ARTICLE II - TECHNOLOGY LICENSE AND FEES
2.1 GRANT OF LICENSE TO RACOM. Upon the terms and subject to the
of this Agreement, Ramtron hereby grants to Racom, free of charge, a
worldwide, non-exclusive, non-transferable, non-sublicensable (except as
provided in this Section 2.1), royalty-bearing right and license (the
"Technology License") to use Ferroelectric Technology, and all Improvements,
for the limited right to design, develop and/or manufacture, sell and use
Ferroelectric RF/ID Products. Racom may sublicense Ferroelectric Technology
for the limited right to design, develop, manufacture and sell Ferroelectric
RF/ID Products to no more than five (5) parties each of whom shall be
appointed by Racom and approved in writing by Ramtron, with such approval not
to be unreasonably withheld. In addition, Racom may sublicense Ferroelectric
Technology for the limited right to design, develop, and sell Ferroelectric
RF/ID Products to an unlimited number of parties each of whom shall be
appointed by Racom and approved in writing by Ramtron, with such approval not
to be unreasonably withheld. Ramtron agrees to coordinate its licensing
activities with Racom until such time as Racom completes its sublicensing of
its five full sublicensees. The parties specifically acknowledge that (i) the
sublicense created by the "Cooperative Agreement For Licensed Manufacturing of
Ferroelectric RFID Products" between Racom and Rohm Co., Ltd, dated June 21,
1995, and (ii) the **
** , shall
be deemed two (2) of the five (5) total full sublicensees under this Section
2.1.
Racom shall, in its sole discretion, and as one of its five full sublicenses,
take the lead in pursuing discussions with ** regarding licensing the
Ferroelectric Technology for use in Ferroelectric RF/ID Products. Ramtron may
pursue ** directly regarding licensing the Ferroelectric Technology for
applications other than Ferroelectric RF/ID Products, provided that any such
license must exclude use of the Ferroelectric Technology for Ferroelectric
RF/ID Products, unless otherwise consented to in writing by Racom. Similarly,
Racom shall have the right to designate other potential sublicensees, up to a
maximum of its five full sublicensees (including Rohm and ** , as
described above), with respect to which Racom shall take the lead in pursuing
discussions regarding licensing the Ferroelectric Technology for use in
Ferroelectric RF/ID Products. Ramtron may pursue such designated parties
directly regarding licensing the Ferroelectric Technology for applications
other than Ferroelectric RF/ID Products, provided that any such license must
exclude use of the Ferroelectric Technology for Ferroelectric RF/ID Products,
unless otherwise consented to in writing by Racom. Once Racom has designated
a potential sublicensee in the manner described above, Racom may only remove
such party as one of Racom's five designees with the prior written consent of
Ramtron, which consent shall not be unreasonably withheld.
<PAGE>
The Technology License granted herein may not be used by Racom, or any
sublicensee, for any purpose other than those specifically stated in this
Section 2.1.
2.2 GRANT OF LICENSE TO INTAG. Upon the terms and subject to the conditions
of this Agreement, Ramtron hereby grants to Intag, free of charge, a
worldwide, non-exclusive, non-transferable, non-sublicensable (except as
provided in this Section 2.2), royalty-bearing right and license (the
"Technology License") to use Ferroelectric Technology, and all Improvements,
for the limited right to design, develop, manufacture, have manufactured by a
licensee of Ferroelectric Technology and/or sell Ferroelectric RF/ID Products.
Intag may sublicense Ferroelectric Technology for the limited right to design,
develop, and sell Ferroelectric RF/ID Products to an unlimited number of
parties each of whom shall be appointed by Intag and approved in writing by
Ramtron, with such approval not to be unreasonably withheld.
The Technology License granted herein may not be used by Intag, or any
sublicensee, for any purpose other than those specifically stated in this
Section 2.2.
The license to manufacture granted to Intag in this Section 2.2 shall at the
election of Intag be granted directly to a nominated Affiliate of Intag.
2.3 GRANT OF LICENSE TO RAMTRON. Licensees and/or their sublicensees shall
grant to Ramtron, free of charge, a royalty-free, worldwide and perpetual
license or sublicense, as the case may be, to design, develop, manufacture,
use, sell or otherwise transfer any Improvements to the Ferroelectric
Technology licensed from Ramtron. Any sublicense agreement entered into
between Licensees and a sublicensee after the Effective Date shall provide
that any sublicensee making an Improvement in the design, development and/or
manufacturing of the Ferroelectric Technology shall be required to provide for
a royalty free sublicense in favor of Ramtron for all Improvements:
i) made solely by the sublicensee; and/or
ii) made jointly by any Licensee and the sublicensee.
2.4 TERMINATION OF LICENSE AGREEMENT, SUPPLY AGREEMENT AND MOU. Effective
on the date of execution of this Agreement by all parties herein, the License
Agreement, as amended, Supply Agreement, as amended, and the MOU shall be
deemed void and of no further effect, and this Agreement shall supersede and
replace such referenced agreements. The parties acknowledge that in respect
of such termination, each releases and discharges the other from any and all
claims which may exist against the other under the License Agreement, Supply
Agreement or the MOU. In consideration of Intag having paid US$600,000 to
Ramtron on May 19, 1995, and in consideration of Intag and Racom having agreed
to forgo the rights and privileges they would have otherwise enjoyed had the
MOU proceeded to a license, Ramtron hereby agrees to make Intag and Racom the
beneficiary of a portion of future Ferroelectric RF/ID Product royalties as
well as a portion of revenues derived from the letting of manufacturing
licenses for Ferroelectric Memory Products, as set forth in Section 2.7 of
this Agreement.
<PAGE>
2.5 MANUFACTURING CAPACITY TO RACOM AND INTAG. Ramtron hereby acknowledges
that it may have access rights to a certain percentage of manufacturing
capacity of several of its licensees for the manufacture of ferroelectric
based products. Ramtron shall provide Racom with the right to purchase up to
** and Intag with the right to purchase up to **
of the capacity made available to Ramtron that is dedicated to the manufacture
of Embedded Ferroelectric Products (hereby defined as standard, nonvolatile
ferroelectric semiconductor memory monolithically combined with other logic or
electronic functionality). Any of Racom's or Intag's rights to any percentage
of Ramtron's manufacturing capacity shall be through Ramtron (and not directly
through any of Ramtron's licensees) and under terms and conditions as shall be
mutually agreed to between Ramtron and Racom, and/or between Ramtron and
Intag, but in no event on terms more favorable than may exist or may be
negotiated between Ramtron and its licensee(s), or that create any additional
costs or obligations to Ramtron and no less favorable than the commercial
terms offered by Ramtron to any third parties. Finally, nothing contained in
this Section 2.5 shall require any of Ramtron's licensees to manufacture
directly for or on behalf of Racom and/or Intag Ferroelectric RF/ID Products
or make available to Racom and/or Intag capacity that is dedicated to the
manufacture of such products.
2.6 ACKNOWLEDGEMENT OF ITT, SEIKO, TOSHIBA AND SAMSUNG LICENSE AGREEMENTS.
The parties herein acknowledge the existence of licenses granted by Ramtron to
Deutsche ITT Industries GMbH ("ITT"), Seiko Epson Corporation ("Seiko"),
Toshiba Corporation ("Toshiba") and Samsung Electronics ("Samsung")
[collectively, "Existing License Agreements"] pursuant to licenses granted by
Ramtron under the Existing License Agreements to exploit the Ferroelectric
RF/ID Technology under License Agreements dated 2 March 1989, 1 June 1988, 31
July 1995, and 31 December 1996, respectively, as amended from time to time.
This Agreement is expressly subject to the terms and conditions of each of the
ITT license agreement, Seiko license agreement Toshiba license agreement and
Samsung license agreement. Ramtron may extend the terms of the referenced ITT
and Seiko license agreements, provided that during such extended term, Ramtron
shall require ITT and Seiko, as applicable, to comply with this Agreement
including, but not limited to, the provisions of Article 2.7(a). The exercise
of license rights by each of ITT, Seiko, Toshiba and Samsung pursuant to their
respective existing license agreements shall not be deemed to infringe on the
rights granted to Licensees hereunder.
2.7 ROYALTIES. Upon the Effective Date of this Agreement, the parties agree
as follows:
a) RAMTRON ROYALTIES. Ramtron hereby agrees to pay continuing
royalties to Racom and Intag each one-third (1/3) of ** of the Net Sales
Price of all Ferroelectric RF/ID Products sold by Ramtron and its Affiliates,
respectively. In addition, Ramtron hereby agrees to negotiate with third
parties under license agreements entered into after the Effective Date a
target royalty of ** , but not less than ** , of the Net Sales Price
of all Ferroelectric RF/ID Products sold pursuant to such license agreements,
of which Ramtron shall pay Racom and Intag each one-third (1/3) of such
royalties received.
b) RACOM ROYALTIES. Racom hereby agrees to pay continuing royalties
to Ramtron and Intag each one-third (1/3) of ** of the Net Sales Price of
all Ferroelectric RF/ID Products sold by Racom and its Affiliates,
respectively. In addition, Racom hereby agrees to negotiate with its
sublicensees as contemplated under Section 2.2 a target royalty of ** ,
but not less than ** , of the Net Sales Price of all Ferroelectric RF/ID
Products sold by such sublicensees, of which Racom shall pay Ramtron and Intag
each one-third (1/3) of such royalties received.
<PAGE>
c) INTAG ROYALTIES. Intag hereby agrees to pay continuing royalties
to Ramtron and Racom each one-third (1/3) of ** of the Net Sales Price of
all Ferroelectric RF/ID Products sold by Intag and its Affiliates,
respectively. In addition, Intag hereby agrees to negotiate with its
sublicensees as contemplated under Article 2.2 a target royalty of ** ,
but not less than ** of the Net Sales Price of all Ferroelectric RF/ID
Products sold by each sublicensee, of which Intag shall pay Ramtron and Racom
each one-third (1/3) of such royalties received.
In those cases wherein Ramtron, Racom or Intag purchase Ferroelectric RF/ID
Products from a sublicensee and the terms of that purchase exclude payment of
royalty by such sublicensee, then the party purchasing such Ferroelectric
RF/ID products will make good the royalty payment to the other two parties.
Such royalty payment to each of the other two parties shall be one-third (1/3)
of the amount purchased times the royalty rate otherwise payable by the
sublicensee.
The following table identifies several existing and potential licensees and
sublicensees of the Parties, and sets forth for each such licensee and
sublicensee the royalties payable by such parties in respect of the sale of
Ferroelectric RF/ID Products. The table also sets forth the basis upon which
the royalties and, to the extent applicable, license fees payable by such
parties are to be shared among Ramtron, Racom and Intag.
Ferroelectric RF/ID Product License Fees and Royalties
LICENSE ROYALTY SHARING OF LICENSE FEE
ROYALTY SHARING (If
Applicable)
- ---------- ------- ------------- ------------------------
All Future ** 1/3, 1/3, 1/3 Dependent on nature of
Licensees license. If pure RF/ID,
** (Ramtron/Racom/
Intag). If omni-license,
** (Ramtron/
Racom/Intag). If RF/ID
is excluded, no sharing
- ------------------------------------------------------------------------------
Rohm (Japan ** Pass-through to N/A
market only) Ramtron
- ------------------------------------------------------------------------------
Rohm (Rest ** 1/3, 1/3, 1/3 N/A
of World)
- ------------------------------------------------------------------------------
Toshiba N/A N/A N/A
- ------------------------------------------------------------------------------
** ** 1/3, 1/3, 1/3 N/A
- ------------------------------------------------------------------------------
** TBD 1/3, 1/3, 1/3 N/A
- ------------------------------------------------------------------------------
** TBD 1/3, 1/3, 1/3 N/A
- ------------------------------------------------------------------------------
Samsung ** 1/3, 1/3, 1/3 N/A
- ------------------------------------------------------------------------------
** ** ** **
- ------------------------------------------------------------------------------
<PAGE>
From time to time Intag, Ramtron, and/or Racom may agree to develop
specialized products utilizing Ferroelectric Technology that do not fall
within the definition of Ferroelectric RF/ID Products. The parties will
mutually agree separately on the purpose of such specialized products and the
basis upon which the parties will derive compensation.
2.8 CERTIFICATION AND PAYMENT OF ROYALTIES. Each party shall, on or before
April 30th, July 31st, October 31st and January 31st in each year during which
royalties are payable under this Agreement (respectively each such three month
period is referred to herein as "Royalty Period") furnish to the non-reporting
parties a statement, certified by a financial officer of the reporting party,
concerning the Net Sales by or on behalf of the reporting party of
Ferroelectric RF/ID Products sold, disposed or otherwise transferred by the
reporting party 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 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, each
reporting party shall furnish to the non-reporting parties a comparable
statement, certified by an internationally recognized firm of independent
certified public accountants, certifying the Net Sales by or on behalf of such
reporting party of Ferroelectric RF/ID Products sold, disposed, or otherwise
transferred by the reporting party during the preceding Royalty Year. Each
reporting party shall accompany such statement by payment in immediately
available dollar funds of any amounts due to the non-reporting parties for
such preceding Royalty Year.
In those instances where royalties payable by Intag or certain sublicensees
are subject to withholding tax, the royalty distribution specified in Section
2.7 will be net of such withholding. The parties will mutually agree
separately at the end of each Royalty Year as to an equitable treatment for
the various withholding amounts.
2.9 DISPUTE REGARDING ROYALTIES AND LICENSE FEES. In the event of any
dispute regarding the amount of any royalty payment or license fee payment (or
any transfer cost component thereof) allegedly due under or pursuant to this
Agreement, the parties shall agree in commercial good faith on and appoint an
internationally recognized firm of independent certified public accountants,
who shall audit the books and records of the reporting party in question and
determine the amount, if any, of the disputed royalty payment or payments or
license fee payments (or any transfer cost component thereof), which
determination shall be final and legally binding on the affected parties for
all purposes of this Agreement. If the parties are unable to agree on such a
firm of independent certified public accountants, such a firm shall be
appointed by the Chairman, President or the highest officer at such time of
the American Institute of Certified Public Accountants. Each party shall pay
an equal amount of the cost of any audit conducted pursuant to this Section.
2.10 LICENSE FEES. For those instances wherein, subsequent to the Effective
Date of this Agreement, Ramtron grants a license to Ferroelectric Technology
inclusive of Ferroelectric RF/ID Products, Ramtron shall pay to each of Intag
and Racom ** of the license fee derived
by such a license, net of any technology transfer cost. For those instances
wherein, subsequent to the Effective Date of this Agreement, Ramtron grants a
license to Ferroelectric Technology solely for Ferroelectric RF/ID Products,
Ramtron shall pay to Intag ** and to Racom **
of the license fee derived by such a license, net of any technology
transfer cost. If the Ramtron license of Ferroelectric Technology excludes
Ferroelectric RF/ID Products there shall be no division of license fees
between the parties.
<PAGE>
For the purposes of this Section, the term "technology transfer cost" shall
mean that portion of the license fee or other up-front charges that is
intended to cover the costs, in terms of engineering and management time,
wafer processing costs, assembly, packaging, test and evaluation costs and
similar costs, that Ramtron reasonably anticipates incurring in connection
with the transfer to the licensee of the licensed technology. The Licensees,
acting jointly, shall have the right, upon reasonable notice and during normal
business hours, to review and audit the books and records of Ramtron in order
to confirm that the amount of such costs is reasonable under the circumstances
and bears a reasonable relationship to the level of effort required of Ramtron
in transferring the licensed technology to the relevant licensee.
The Parties acknowledge that Ramtron has the right to grant one or more
licenses to the Ferroelectric Technology for use with Ferroelectric RF/ID
Products to alliance partners who agree to make an investment in Ramtron's fab
or to set up a manufacturing joint venture with Ramtron in lieu of payment to
Ramtron of a license fee. The Parties further acknowledge that, in one such
case, Ramtron shall be entitled to accept such a commitment in lieu of a
license fee without any obligation to compensate either Licensee for the
foregone license fee. In such case, Ramtron agrees to target a ** royalty,
to be shared equally, for all Ferroelectric RF/ID Products sold by or for such
party, whether manufactured by such party, by Ramtron or by any such joint
venture.
From time to time Ramtron may separately agree with one or both Licensees to
pay a fee for certain marketing assistance rendered in developing third party
interest in securing a license to manufacture products based on Ferroelectric
Technology. Agreement on such fees will be established in advance in writing
and be approved according to the level of marketing assistance to be rendered.
3. ARTICLE III - TECHNICAL MATERIALS OR ASSISTANCE
3.1 TECHNICAL ASSISTANCE. Ramtron is to provide reasonable technical
transfer assistance to Racom, Intag or any of their sublicensees upon request.
Where the Parties mutually agree upon the provision of technical assistance by
Ramtron, such services will be provided by Ramtron at its then-current
engineering rates and/or wafer processing and related costs.
3.2 HOLD HARMLESS/INDEMNIFICATION. In the event that any employee of
Licensees, or an employee of any sublicensee, visits Ramtron's premises, or
any employee of Ramtron shall visit Licensees', or sublicensee's, premises as
contemplated pursuant to this Section, then Licensees, and/or sublicensee,
shall be responsible for any and all liability of any type whatsoever to any
other person, firm or entity arising from any direct or indirect action or
inaction relating to the carrying out of its employee's duties under the terms
of this Section. Licensees, and/or sublicensees, shall also cause their
employees to be covered by their respective liability insurance policy or
policies. Whether or not any action or inaction of any such employee is
covered by insurance, Ramtron, Licensees and/or sublicensees, shall each hold
the other harmless and indemnify the other against and from all losses,
claims, damages, liabilities, obligations or expenses (including attorneys
fees, court costs, and costs of investigation) incurred or to which it may
become subject as a result of any action or inaction relating to the carrying
out of said employee's duties as contemplated herein.
<PAGE>
4. ARTICLE IV - NONTRANSFERABILITY OF TECHNOLOGY LICENSE
4.1 NONTRANSFERABILITY. Except as provided in Section 2.1 and Section 2.2,
the Technology License may not be assigned, sublicensed, subdivided or
transferred in any way whatsoever by Licensees without Ramtron's prior written
consent, such consent may be withheld at Ramtron's sole discretion. Pursuant
to the authority set forth in Section 2.1 and Section 2.2, each of Racom and
Intag shall notify Ramtron in writing of any proposed sublicense of rights to
design, develop or manufacture Ferroelectric RF/ID Products, and such
sublicense shall be deemed to have been consented to by Ramtron unless Ramtron
notifies either Racom or Intag, as the case may be, of its refusal to consent,
with reasons, n writing within thirty (30) calendar days of receipt of such
notice. In addition, Ramtron hereby agrees to notify each of Racom and Intag
in writing at least thirty (30) days prior to the execution by Ramtron of any
License Agreement that provides for the license of Ramtron's Ferroelectric
Technology for use in Ferroelectric RF/ID Products, so long as it is legally
permissible for Ramtron to provide such advanced notice. If it is not legally
permissible for Ramtron to provide such prior notice, Ramtron will provide
such notice as soon as it is permissible for Ramtron to do so.
4.2 CHANGE IN CONTROL. For purposes of this Agreement and each Technology
License, any of the following events shall be deemed to be an attempted
transfer of the Technology License and shall be subject to the provisions of
this Agreement:
(a) A "person" or "group" [within the meaning of Sections 13(d) and
14(d) (2) of the Securities Exchange Act of 1934] becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of
voting shares of any Licensee and is entitled to exercise more than 50% of the
total voting power of all outstanding voting shares of such Licensee
(including any voting shares that are not then outstanding of which such
person or group is deemed the beneficial owner) unless such "person" or
"group" was entitled to exercise more than 50% of such total voting power as
of the Effective Date; or
(b) Any consolidation of any Licensee with, or merger of any Licensee
into, any other entity, any merger of another entity into any Licensee, or any
sale or transfer of all or substantially all of the assets of any Licensee to
another entity (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of such Licensee, or a merger which is effected solely to change the
jurisdiction of incorporation of such Licensee).
This Section shall not apply to any shares issued by Racom in accordance with
the provisions of the October 23, 1991 Shareholders' Agreement, as amended
November 14, 1994.
4.3 TRANSFER BY CHANGE IN CONTROL. No Licensee may transfer the Technology
License by any of the events described in this Article IV without Ramtron's
prior written consent, such consent not to be unreasonably withheld.
5. ARTICLE V - DISCLAIMERS OF WARRANTY AND LIMITATIONS OF LIABILITY
5.1 RELIANCE ON DISCLAIMERS AND LIMITATIONS. The license royalties for the
Technology License, and the substance of the other rights and duties of
Licensees and Ramtron in this Agreement, have been negotiated in reliance on,
and are based upon the applicability and enforceability of, the disclaimers,
warranties and limitations of liability contained in this Article 5.
<PAGE>
5.2 DISCLAIMER OF WARRANTY. EXCEPT AS SPECIFICALLY PROVIDED IN THIS ARTICLE
V, RAMTRON MAKES NO WARRANTIES TO LICENSEES OR TO ANY OTHER PARTY BY VIRTUE OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREUNDER, AND RAMTRON
EXPRESSLY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED OR ARISING BY
USAGE OF TRADE, INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, AND LICENSEES UNCONDITIONALLY ACCEPTS SUCH
DISCLAIMER. LICENSEES SHALL NOT MAKE OR PASS ON TO ITS CUSTOMERS (WHOLESALE OR
RETAIL) OR SUBLICENSEES ANY WARRANTY OR REPRESENTATION ON BEHALF OF RAMTRON.
5.3 LIMITATION OF LIABILITY FOR TERMINATION. NOTWITHSTANDING ANYTHING
CONTAINED IN THIS AGREEMENT OR UNDER APPLICABLE LAW TO THE CONTRARY, IN NO
EVENT SHALL RAMTRON BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOSS OF BUSINESS, INCOME
OR PROFITS, RESULTING FROM RAMTRON'S TERMINATION OF THIS AGREEMENT, WHETHER OR
NOT RAMTRON HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES ARISING IN ANY
WAY OUT OF THE TERMINATION OF THIS AGREEMENT. Without limiting the generality
of the foregoing, Licensees assume all risks arising out of or relating to
their inability to meet any commitments made to and/or perform any agreements
entered into with any customer (wholesale or retail) of Licensees in the event
of any termination by Ramtron of this Agreement. Provided, however, that
nothing contained in this Section is intended to disclaim or waive any rights
that Licensees may have against Ramtron with respect to actual and direct
damages suffered by Licensees as a result of the breach of this Agreement or
the wrongful termination of this Agreement by Ramtron and provided further
that nothing contained in this Section shall prejudice or restrict Licensees'
right and entitlement to also terminate this Agreement in the event of any
material breach of this Agreement by Ramtron.
6. ARTICLE VI - PROTECTION OF FERROELECTRIC TECHNOLOGY
6.1 PATENTS, COPYRIGHTS, AND INTELLECTUAL PROPERTY. Ramtron shall at its
own cost obtain such patent, copyright or similar registration or intellectual
property protection of the Ferroelectric Technology used in the design,
development or manufacture of Ferroelectric RF/ID Products throughout the
world as is reasonable having regard to: the relative cost thereof; the
benefit of the protection obtained; and, all other relevant circumstances.
Upon request by Licensees, Ramtron shall provide Licensees an up to date list
of all issued patents pertaining to the Ferroelectric Technology used in the
design, development or manufacture of Ferroelectric RF/ID Products.
Licensees, and/or any sublicensee, shall at their own cost obtain such patent,
copyright or similar registration or intellectual property protection for
Improvements made solely by such Licensees, or Improvements made jointly by
Licensees and a sublicensee(s), which are used in the design, development or
manufacture of Ferroelectric RF/ID Products throughout the world as is
reasonable having regard to: the relative cost thereof; the benefit of the
protection obtained; and, all other relevant circumstances. Upon request by
Ramtron, Licensees, and/or any sublicensee, shall provide Ramtron an up to
date list of all issued patents pertaining to Improvements made to the
Ferroelectric Technology used in the design, development or manufacture of
Ferroelectric RF/ID Products.
6.2 MUTUAL COOPERATION - IMPROVEMENTS
The parties herein shall constitute a patent committee which shall consist of
one senior technical person from Ramtron, Racom and Intag respectively. The
patent committee shall meet quarterly or at intervals deemed necessary after
execution of this Agreement to share information concerning Improvements to
Ferroelectric Technology and to determine whether or not an Improvement shall
constitute a sole patent right of either Ramtron, Racom or Intag, or a joint
patent right between and/or among Ramtron, Racom or Intag.
<PAGE>
In relation to sole patent rights, the inventing party, Ramtron, Racom or
Intag, as the case may be, shall retain sole ownership. The inventing party
shall grant to the other party or parties, as the case may be, and/or its
sublicensees a nonexclusive, nonsublicenseable, nontransferable,
nonassignable, worldwide license, free of charge, to use the sole patent
rights pursuant to the terms of this Agreement.
Joint patent rights shall be jointly owned by the parties with each party
owning an equal undivided ownership interest. Each party may, for the life of
each joint patent right, use the joint patent rights for any purpose without
any payment to the other party, provided that a grant of license of such joint
patent rights to a third party other than each party's Affiliate and/or
sublicensees shall be subject to the prior written approval of the other
party. Such approval shall not be unreasonably withheld. Any dispute as to
any determination of the patent committee will be resolved in accordance with
Section 11.11 of this Agreement.
Ramtron shall have the responsibility for filing all United States and foreign
patent applications. Racom and/or Intag, as the case may be, shall share
equally in the legal, filing, and maintenance fees associated with filing
joint applications.
6.3 NOTICE OF INFRINGEMENT. Ramtron and Licensees (and any sublicensee
which Licensees shall cause to act hereunder) shall promptly advise the other
parties in writing of any claim, action, lawsuit, or proceeding threatened,
made, or brought against them or either of them for infringement of a patent
issued to a third party, or for violation of a third party's patent, trade
secret, or other intellectual property right based in any instance upon
Licensees' use of the Technology License, or Licensees' sale, lease, or
distribution of Ferroelectric RF/ID Products or based in any instance upon
Ramtron or any of Ramtron's licensees or Affiliates of which Ramtron knows,
use of the Ferroelectric Technology as the case may be.
6.4 INFRINGEMENT BY FERROELECTRIC TECHNOLOGY. In the event that the
Ferroelectric Technology is, or in the reasonable judgment of Ramtron, is
likely to become the subject of any legal action based in whole or in part on
a claim that the Ferroelectric Technology infringes the proprietary rights of
any person, Ramtron may reasonably demand that Licensees, or any sublicensee,
cease to use the Technology License and that Licensees, or any sublicensee,
cease to sell, lease and distribute Ferroelectric RF/ID Products utilizing the
allegedly infringing Ferroelectric Technology until and unless there is a
final judgement or other final resolution establishing Ramtron's right to
continue licensing the Ferroelectric Technology. In the event that Licensees,
or any sublicensee, fails to cease to use the Technology License or fails to
cease selling, leasing and distributing Ferroelectric RF/ID Products utilizing
the allegedly infringing Ferroelectric Technology promptly upon such demand by
Ramtron, Licensees, or any sublicensee, shall indemnify and hold Ramtron
harmless against any and all costs and expenses (including reasonable
attorneys fees) paid or payable by Ramtron as a result of Licensees', or any
sublicensee's, failure to promptly cease such activities. Notwithstanding
anything else contained herein to the contrary, the failure by Licensees, or
any sublicensee, to cease use of the Technology License and the selling,
leasing and distributing of Ferroelectric RF/ID Products shall not constitute
a breach of or default under this Agreement. However, in the event of any
such failure by Licensees, or any sublicensee, Ramtron shall be entitled to
require Licensees, or any sublicensee, to provide, and Licensees, and/or any
<PAGE>
sublicensee, shall provide to Ramtron, reasonable security for Licensees', or
any sublicensee's, indemnification obligation to Ramtron as a result of
Licensees', or any sublicensee's, continued use of the Technology License
and/or manufacture, lease or sale of the Ferroelectric RF/ID Products.
Ramtron shall have control of the defense of such claim, action, lawsuit or
proceeding, and shall pay the costs thereof (except any cost of the Licensees'
associated attorneys, if any); and Licensees, and/or any sublicensee, shall
assist Ramtron, at Ramtron's cost and expense in the defense of any such
claim, action, lawsuit, or proceeding. Licensees, or any sublicensee, shall
have the right to be represented by an attorney at its own expense in any such
controversy.
6.5 ASSISTANCE BY RAMTRON. Ramtron shall use its best efforts to provide
Licensees with (i) reasonable assistance in connection with the defense and
settlement of a claim or action, including all the necessary information
related to the infringing technology, and (ii) reasonable consultation for
Licensees' achievement of a viable alternative solution to avoid such
infringement issue. THIS SECTION 6.5 STATES RAMTRON'S TOTAL LIABILITY AND
RESPONSIBILITY, AND LICENSEES' SOLE REMEDY FOR ANY ACTUAL OR ALLEGED
INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT, OR OTHER INTELLECTUAL
PROPERTY RIGHT BY THE FERROELECTRIC TECHNOLOGY LICENSED HEREUNDER, OR ANY PART
THEREOF. THIS SECTION 6.5 IS IN LIEU OF AND REPLACES ANY OTHER EXPRESSED,
IMPLIED OR STATUTORY WARRANTY AGAINST INFRINGEMENT. IN NO EVENT SHALL RAMTRON
BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES
RESULTING FROM ANY SUCH INFRINGEMENT.
6.6 ASSISTANCE BY LICENSEES. Licensees shall use their best efforts to
provide Ramtron with (i) reasonable assistance in connection with the defense
and settlement of a claim or action, including all necessary information
related to the infringing technology, and (ii) reasonable consultation for
Ramtron's achievement of a viable alternative solution to assist in such
infringement issue. THIS SECTION 6.6 STATES LICENSEE'S TOTAL LIABILITY AND
RESPONSIBILITY, AND RAMTRON'S SOLE REMEDY (EXCEPT TO THE EXTENT SET FORTH IN
SECTION 6.4 HEREOF), FOR ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT,
TRADEMARK, COPYRIGHT, OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE
FERROELECTRIC RF/ID PRODUCTS, OR ANY PART THEREOF. THIS SECTION 6.6 IS IN
LIEU OF AND REPLACES ANY OTHER EXPRESSED, IMPLIED, OR STATUTORY WARRANTY
AGAINST INFRINGEMENT, EXCEPT AS SET FORTH IN SECTION 6.4 HEREOF. IN NO EVENT
SHALL LICENSEES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES RESULTING FROM ANY SUCH INFRINGEMENT.
6.7 INFRINGEMENT BY THIRD. Upon becoming aware of any material infringement
by a third party of any of the rights covered by this Agreement, each party
shall promptly notify the other party of such infringement. After receipt of
notice of such infringement, Ramtron shall have the right in its sole
discretion, either to (i) assert a claim, action, lawsuit or legal proceeding
on its own behalf and/or on behalf of either Licensee herein, in which case
Ramtron shall be entitled to all awards and recoveries resulting directly
from, and shall be responsible for any and all costs and expenses arising out
of, such claim, action, lawsuit or proceeding or (ii) determine not to assert
any claim, lawsuit, legal proceeding or action of any kind against the alleged
infringer. In the event that Ramtron elects not to assert any claim, lawsuit,
legal proceeding or action of any kind against the alleged infringer, then
Ramtron shall, if requested by either Licensee in writing, permit and
authorize such Licensee to assert a claim, action, lawsuit or legal proceeding
against the alleged infringer, in which case such Licensee shall be entitled
<PAGE>
to any and all awards and recoveries resulting directly from, and shall be
responsible for any and all costs and expenses arising out of, such claim,
action, lawsuit or legal proceeding; provided, however, that in such event, if
at any time after such Licensee has commenced any claim, action, lawsuit or
legal proceeding against the alleged infringer, Ramtron elects to join in such
proceeding, then such Licensee shall take all actions necessary to allow
Ramtron to formally join in such proceeding and thereafter Ramtron shall have
the right to participate in and direct and control any such action or
proceeding and Ramtron shall be responsible for any and all further costs and
expenses arising after the commencement of Ramtron's participation in any such
claim, action, lawsuit or legal proceeding; provided further that
notwithstanding any intervention by Ramtron in any such proceeding, the
Licensee shall be entitled to any and all awards and recoveries resulting
directly from such proceeding after reimbursing Ramtron for all actual out-of-
pocket costs and expenses incurred by Ramtron in connection with such
proceeding. Notwithstanding the foregoing, each Licensee shall be entitled to
commence and join in any proceedings to recover any losses or damage suffered
by such Licensee on their own account provided such Licensee shall bear all
the costs and expenses of so doing.
Notwithstanding anything in this Agreement to the contrary, any Improvement
owned by Racom, Intag and/or a sublicensee to a Ferroelectric RF/ID Product
which results in a claim, action, lawsuit or legal proceeding initiated by a
third party relating to such Improvement, shall be the sole responsibility of
the owner or owners.
7. ARTICLE VII - CONFIDENTIALITY
7.1 CONFIDENTIALITY. The parties agree with each other to keep strictly
confidential and not without the prior written consent of the other parties to
disclose to any person or entity any information, except as allowed by
Sections 7.5 and 7.6 below, which is part of or which relates to the
Ferroelectric Technology and/or the Ferroelectric RF/ID Products. Each party
further agrees to bind in a manner so as to be legally enforceable its
employees, agents, consultants, advisors and representatives to such
confidentiality including without limitation as to such disclosures as may be
necessary for the parties performance of their obligations and enjoyment of
their rights under this Agreement, and otherwise as the relevant other party
may consent to in writing.
7.2 MARKING OF DOCUMENTS AND MATERIALS. In furtherance, but not in
limitation of the provisions of Section 7.1, each party shall use its
reasonable endeavors to cause all written materials and other physical
documents and materials of all types relating to or containing information of
or about the Ferroelectric Technology, Ferroelectric RF/ID Products to be
plainly marked to indicate the secret, proprietary and confidential nature
thereof, and to prevent the use or reproduction thereof, directly or
indirectly.
7.3 INDEMNIFICATION. Without limitations of any other right, remedy or
benefit accruing to either party under this Agreement or by law, each party
shall indemnify the other party fully for all damages caused by any disclosure
or use of any information intended to be kept secret, confidential and
proprietary in accordance with this Article VIII by such party or its
representatives, employees, agents, consultants, sublicensees, etc.
7.4 SURVIVAL. This Article VII shall survive the expiration or earlier
termination of this Agreement and of either Technology License and shall
remain in effect for so long as either Licensee is manufacturing, selling or
distributing Ferroelectric RF/ID Products anywhere in the world.
<PAGE>
7.5 PUBLIC DOMAIN. The provisions of this Article VII shall not apply to
any information that the party can demonstrate by written evidence was in the
public domain through no unlawful action or omission by such party or obtained
from third parties not bound by law or confidentiality agreements to maintain
the confidentiality thereof.
7.6 OBLIGATIONS TO DISCLOSE. This Article VII shall not prohibit the
parties from disclosing under legally enforceable obligations any information
required to be disclosed to any governmental authorities and shall not
prohibit the parties from disclosing general financial and technical
information in order to obtain funding or other financial advantages from any
authority or institution or corporation, or for the relevant party to exercise
its rights and perform its obligations in respect of the Technology License or
to otherwise carry on its business in the ordinary course. Other than as set
forth in Section 2.1 and Section 2.2, as the case may be, nothing contained in
this Section shall entitle either Licensee to transfer or assign the
Ferroelectric Technology or the Technology License.
7.7 TRADEMARK. Licensees shall have the right to utilize Ramtron's FRAM
trademark in connection with Ferroelectric RF/ID Products. Ramtron makes no
representation, warranty or covenant of any type whatsoever regarding such
trademark.
8. ARTICLE VIII - TERMS AND TERMINATION
8.1 EXPIRATION. This Agreement and the Technology License shall remain in
full force and effect from the Effective Date until termination under this
Article. Unless terminated earlier, this Agreement and the Technology License
shall terminate on the date of the expiration of the last to expire of any
effective rights protecting the material part of the Ferroelectric Technology
as it relates to the design, development and/or manufacturing of Ferroelectric
RF/ID Products anywhere in the world, whether by applicable law of patents,
trade secrets, or other equivalent applicable legal protection of proprietary
business know-how and technology.
8.2 TERMINATION FOR BREACH. In the event of a material breach or default by
a party in the performance of its respective duties, obligations or
undertakings set forth in this Agreement, the other party shall have the right
to give written notice to the defaulting party, notifying such party of the
specific breach or default involved and, if within ninety (90) days after such
notice the defaulting party shall not have remedied or commenced diligently to
remedy the breach or default and thereafter prosecute such remedy to
completion within a commercially reasonable time, the aggrieved party shall
have the right in addition to any other right, remedy or benefit it may have
under this Agreement or applicable law, to terminate this Agreement and the
Technology License as to the defaulting party upon five (5) days written
notice to the defaulting party and effective upon the fifth (5th) day after
the giving of such termination notice, this Agreement and the Technology
License shall be terminated as to the defaulting party without any further act
or writing whatever.
8.3 TERMINATION. Notwithstanding any other provision of this Agreement and
in addition to any other right, remedy or benefit the Parties may have under
this Agreement or applicable law, each Party shall have the unconditional
right to terminate this Agreement and the Technology License as to any
defaulting party effective immediately, if:
<PAGE>
(a) The defaulting Party fails or refuses to: (i) pay to the other
Party on the date due any payment provided to be made to such other Party
within thirty (30) days of written demand after the due date thereof any
royalties due hereunder; provided, however, nothing in this subparagraph shall
be construed to relieve any Party of its liability to pay to any other Party
royalties on all Ferroelectric RF/ID Products manufactured by such Party and
sold, leased or otherwise transferred by such Party prior to or after the date
of such termination in accordance with this Agreement.
(b) At any time any other Party is adjudged by a court of law to be
bankrupt or insolvent, or files petition in bankruptcy or an answer admitting
the material facts recited in such petition if filed by another, or is put or
decides to go into dissolution or liquidation, or otherwise discontinues its
business, makes an assignment for the benefit of its creditors or enters into
any other general arrangement with its creditors, becomes insolvent, or has a
trustee, receiver or custodian of any kind appointed to administer any
substantial amount of its property, or is placed or enters into any comparable
situation under the laws of any other nation, or any state or province in
which its operations may be conducted, or otherwise seeks to take advantage of
any bankruptcy or insolvency statute now or hereafter in effect in any such
location. Any other Party purports to assign, sublicense or transfer in any
way whatsoever the Technology License in contravention of the provisions of
this Agreement. In addition to the foregoing, notwithstanding any other
provision of this Agreement and in addition to any other right, remedy or
benefit Ramtron may have under this Agreement or applicable law, Ramtron shall
have the unconditional right to terminate this Agreement and the Technology
License as to the defaulting party effective immediately, if Racom, Intag, or
both, uses or attempts to use without the expressed permission of Ramtron
within the terms of this agreement the Technology License in the manufacture,
sale, lease, distribution or transfer of any type whatsoever of a product or
application based on Ferroelectric Technology which does not involve or relate
to Ferroelectric RF/ID Products.
8.4 TERMINATION BY LICENSEES. Notwithstanding any other provision of this
Agreement and in addition to any other right, remedy or benefit Licensees may
have under this Agreement or applicable law, each Licensee shall have the
right and option in its sole discretion to terminate this Agreement and
Technology License with respect to such Licensee without payment of any
penalty and without incurring any obligation to pay royalties after the
effective date of such termination if, with respect of Ferroelectric RF/ID
Products, any order is made or given in any proceedings which are commenced
against such Licensee or Ramtron having the effect of restraining or impairing
the exercise of the Technology License or any of such Licensees' material
rights under this Agreement.
8.5 EFFECTS OF TERMINATION. Upon termination of this Agreement and the
Technology License for whatever reason:
(a) The rights under the Technology License and all intellectual
property and other rights granted to any Party under this Agreement shall
immediately revert to, and vest in, the owner of such rights and absolutely no
interest whatever in any of such rights, in whole or in part shall thereafter
remain in such other Party or any of its subcontractors, agents, employees or
shareholders, sublicensee, and/or any person or entity in any way affiliated
with, or related to, such other Party. Accordingly, from the date of said
termination such rights, and any of them, may not, and they shall not, be
<PAGE>
exercised in any way, in whole or in part, by the affected Party or any person
or entity with whom such Party shall have entered into any agreement or
understanding relating in any way to the Technology License or any of the
rights granted to such Party under this Agreement whether or not such
agreement or understanding shall have been approved by the other Party or
Parties unless such Party has lawfully acquired or is lawfully able to use
such rights.
(b) Except and to the extent that the affected Party has lawfully
acquired or is lawfully able to exercise such rights, such Party, and/or any
sublicensee, shall cease forthwith the manufacture, sale and distribution of
the Ferroelectric RF/ID Products under the Technology License and not use
further, except as herein provided, and return to the other Party or Parties
specifications, data sheets, drawings, designs, photographs, photostats,
negatives, undeveloped film, tape recordings and other electronic records,
writing in any language and any other documents or materials furnished to such
Party or otherwise obtained by such Party from the other Party or Parties,
including without limitation any and all notes and written or electronic
transcriptions on any part of the Ferroelectric Technology and any and all
similar materials in any way, in whole or in part, based thereof, as well as
any and all similar materials which in any way contain, reflect or relate to
any of the Ferroelectric Technology.
(c) The affected Party, and any sublicensee, shall offer in writing to
the other Party or Parties the right to purchase any or all Ferroelectric
RF/ID Products which are unsold at the time of such termination. The price
for such goods to the other Party or Parties shall not be less favorable than
the price offered to third parties. If the other Party or Parties does not
accept any such offer within seven (7) days following receipt then it shall be
deemed to have declined same.
8.6 SALE OF INVENTORY. Notwithstanding the provisions of Section 8.5, after
the termination of this Agreement and the Technology License, the affected
Party shall be entitled to sell existing inventory of Ferroelectric RF/ID
Products which are in such Party's possession on the date of such termination,
if any, but only to existing customers of such Party as of the date of
termination. Royalties shall be payable on any such sales in accordance with
Article II of this Agreement.
8.7 SURVIVAL. Article V (Disclaimers of Warranty and Limitations of
Liability), VI (Protection of Ferroelectric Technology), VII
(Confidentiality), XI (Miscellaneous) and sections 8.5, 8.6, 8.7, 11.3, 11.5,
11.10 and 11.11 of this Agreement shall permanently survive any termination or
expiration of this Agreement.
9. ARTICLE IX - GOVERNMENTAL REQUIREMENTS
9.1 COMPLIANCE WITH LAWS. In performing their respective duties hereunder
and in carrying out their activities under the Technology License, the parties
shall comply with all applicable laws, regulations, procedures, ordinances and
rulings of any governmental authority having jurisdiction over Licensees,
sublicensees, Ramtron, Licensees' or any sublicensee's use of the Technology
License, or Licensees', or any sublicensee's, design manufacture, use, sale,
lease or distribution of Ferroelectric RF/ID Products.
<PAGE>
9.2 EXPORTS. Without limitation of any other provision of this Agreement,
neither Licensee nor any sublicensee shall, without receiving the prior
authorization of the United States Office of Export Administration or other
appropriate governing body exercising controls over exports and re-exports of
United States goods and technical data, export or re-export directly or
indirectly any technical data included in Ferroelectric RF/ID Products or the
Ferroelectric Technology that is used to design, develop and/or manufacture
Ferroelectric RF/ID Products to any country or area forbidden to such exports
under United States law or regulation.
9.3 GOVERNMENTAL APPROVALS. Licensees, and/or any sublicensee, shall be
solely responsible for obtaining any necessary approval of this Agreement by
any governmental authorities having jurisdiction over Licensees', and/or any
sublicensee's, activities pursuant to this Agreement, and to obtain the
consent of any governmental authorities to the remittance of payments under
this Agreement in accordance with its terms, in the event that any such
consent should become necessary.
10. ARTICLE X - PAYMENTS AND TAXES
10.1 PAYMENTS. Any and all payments of every kind which may be payable by
Licensees, or Ramtron, as the case may be, under the terms of this Agreement
shall be paid in immediately available funds in the currency as nominated by
the beneficiary at such bank as Ramtron, Racom and/or Intag may from time to
time designate in writing.
10.2 TAXES. Any and all taxes (including withholding taxes payable in
connection with this Agreement), duties, excises and imposts payable with
respect to any sums due under this Agreement to Ramtron, Racom and/or Intag
(as the case may be), shall be borne by the beneficiary of such amounts due
and deducted from the due royalty, as appropriate; provided that the Parties
agree to cooperate to the extent reasonably possible to minimize the amount of
such taxes, duties, excises and imposts.
11. ARTICLE XI - MISCELLANEOUS
11.1 SUCCESSORS AND ASSIGNS AND BINDING EFFECT. The rights and benefits of
the parties under this Agreement shall accrue to, and run in favor of, each
party's successors and assigns. The rights and obligations of the parties
under this Agreement shall be binding upon their respective successors and
assigns.
11.2 ASSIGNMENTS. Except as provided in Article IV, and notwithstanding the
provisions of Section 12.1, no party shall make or purport to make any
assignment, transfer or conveyance, in whole or in part, of its rights and
obligations under this Agreement without the prior written consent of the
other party such consent to be within the other party's sole discretion.
11.3 GOVERNING LAW. This Agreement shall take effect under, be construed
and enforced according to, and be governed by the laws in force in the State
of Colorado, USA, without reference to conflict of laws principles, and
subject to section 12.10, the parties irrevocably submit to the personal and
exclusive jurisdiction and venue of the Colorado state courts of El Paso
County, Colorado.
<PAGE>
11.4 SEVERABILITY. The provisions of this Agreement are severable. If any
provision or part of this Agreement shall be held by any court or other
official body of competent jurisdiction to be invalid of unenforceable for any
reason, the remaining provision or parts hereof shall continue to be given
effect and shall bind the parties hereto unless the unenforceability or
illegality has the consequence of substantially altering the respective rights
and obligations of the parties hereto.
11.5 NO PARTNERSHIP OR OTHER RELATIONSHIP CREATED. The parties are not, nor
shall any party hold itself out to be, the partner, agent, joint venturer,
employee or independent contractor of the other for any purpose whatever, nor
shall any legal or fiduciary relationship between them, other than as may be
explicitly provided in this Agreement, exist by virtue of this Agreement. No
party shall be or become liable for any representation, act or omission of the
other as a consequence of this Agreement and no party is to create any such
liability on behalf of the other. This Agreement is not for the benefit of any
third party and shall not of itself be deemed to give any right or remedy to
any third party for any purpose whatever.
11.6 WAIVERS. Any waiver exercised under any provision of this Agreement
shall not be deemed a general waiver with respect to any other provision of
this Agreement, and no failure to exercise and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof, except
where specified to the contrary herein, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or of any other right, power or privilege. The rights
and remedies provided herein are, and shall be interpreted to be, cumulative
and not exclusive of any other rights provided by law or otherwise.
11.7 NOTICES. All notices permitted or required to be given to the parties
of this Agreement shall be in writing and delivered personally or sent by
certified or registered airmail (return receipt required, postage prepaid), by
air freight (return receipt requested), or by telefax or telex (with receipt
acknowledgment requested) addressed to the respective parties at its usual and
principal place of business. Such notices shall be deemed to have been
effectively given and received on the day of delivery if delivered personally,
or, if by telegram, telecopy, telex, or air freight, on the next day following
the sending of such notice by telegram, telecopy, telex, or air freight
provided that receipt shall have been acknowledged, and, if mailed, on the
seventh (7th) business day following such mailing.
11.8 ENTIRE AGREEMENT. This Agreement contains the entire and only
agreement of Licensees and Ramtron with respect to the Technology License and
supersedes entirely any and all other agreements either oral or written
between the parties with respect thereto , and each of Racom, Intag and
Ramtron acknowledge that it has no claims against the others under or arising
from any prior understanding or document. No agreement, statement or promise
relating to the subject matter of this Agreement which is not contained herein
shall be valid or binding.
11.9 CHANGES OR AMENDMENT. Any change, revision, termination or attempted
waiver of any of the provisions contained in this Agreement shall not be
binding unless in writing and signed by the party against whom the same is
sought to be enforced. This Section may only be waived in writing. This
Agreement shall be amended or supplemented only by written instrument duly
executed by or on behalf of the parties hereto, and if and when so
supplemented or amended shall include all such supplements and any amendments.
<PAGE>
11.10 DISPUTE RESOLUTION. Except as otherwise provided herein, any
controversy among the parties involving the construction, application or
conditions of this Agreement, or any claims arising out of or relating to this
Agreement or the breach thereof shall first attempt to be settled through good
faith negotiations. Senior management level representatives of each party
directly responsible for the matters underlying the controversy shall meet as
reasonably requested in writing by the complaining party to resolve the
controversy. Such senior parties shall meet at a mutually agreed time and
place within twenty (20) business days of receipt of such notice. They shall
discuss the controversy and negotiate in good faith for a period of at least
thirty (30) business days in an effort to resolve the controversy. To this
end, the parties hereby recognize that on September 24, 1996 a meeting was
held to discuss the principles, guidelines and common framework by which the
parties would address the interpretation of this Agreement, including the
protection of their respective interests and commercial expectations regarding
the development of Ferroelectric RF/ID related technology. The material
results of these discussions were memorialized in certain meeting minutes.
The parties hereby agree to abide by the spirit of such meeting minutes, with
the aim of adopting the guidelines as set forth therein, as the framework to
resolve those issues underlying the controversy. In the event of any conflict
between the terms of this Agreement and the terms of such meeting minutes,
this Agreement shall control.
11.11 ARBITRATION. Any dispute or claim arising out of or in connection
with this Agreement, which has not been settled by discussion as described in
Section 11.10 above, will be finally settled by binding arbitration in
Colorado Springs, Colorado under the Rules of Arbitration of the Chamber of
Commerce by one arbitrator appointed in accordance with those rules. The
arbitrator will apply Colorado law to the merits of any dispute or claim,
without reference to conflict of law principles. Judgment of 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.
11.12 ATTORNEYS FEES. In the event of any controversy, claim or dispute
between the parties hereto arising out of or relating to this Agreement,
including but not limited to a controversy settled by arbitration, the
prevailing party shall be entitled to recover from the losing party reasonable
expenses, including attorneys' fees and costs.
11.13 FORCE MAJEURE. If the performance by any party of any of its
obligations under this Agreement shall be in any way prevented, interrupted,
or hindered as a result of any force majeure, including, without limitation,
war, civil disturbance, strike or other labor disturbance, lockout,
legislation or restriction of any governmental or other authority, fire,
unavailability of materials or finished goods, delay of carriers or any other
similar circumstances (other than financial difficulties) beyond the
reasonable control of such party, the obligations of the party concerned shall
be wholly or partially suspended during the continuance and to the extent of
such prevention, interruption or hindrance, provided however, that local
commercial unavailability of materials or finished goods shall not alone
constitute force majeure for purposes hereof if such materials or finished
goods are otherwise (even if it is at a higher cost) available. A party
unable to perform timely its obligations under this Agreement due to any of
the foregoing reasons must take all reasonable steps to remedy its
nonperformance or delay its performance with the least possible delay and by
doing whatever may reasonably be done to mitigate the adverse affect of its
nonperformance upon the other party of this Agreement.
<PAGE>
11.14 HEADINGS. The headings of the Sections of this Agreement have been
inserted for convenience or reference only and shall in no way affect the
interpretation of any of the terms or conditions of this Agreement.
11.15 SIGNATURES. The parties represent and warrant that execution of this
Agreement has been duly by all necessary corporate action including, without
limitation, approval by the respective board's of directors of each party, and
that this Agreement constitutes a legally binding and enforceable obligation
of the respective parties herein.
IN WITNESS WHEREOF, the undersigned parties to this Agreement have executed
this document as of the date and year first above written.
"LICENSOR"
RAMTRON INTERNATIONAL CORPORATION
By: /S/ L. David Sikes
Title: Chairman and CEO
"LICENSEE" "LICENSEE"
RACOM SYSTEMS, INC. INTAG INTERNATIONAL LIMITED
By: /S/ Richard L. Horton By: /S/ Charles Fear
Title: President and CEO Title: Chairman
<PAGE>
SCHEDULE 1: LIST OF PATENT PROPERTIES WHICH ASSIST THE DESCRIPTION
OF RAMTRON'S FERROELECTRIC TECHNOLOGY AND ARE COVERED BY THIS AGREEMENT
(PAGE 30-PAGE 35)
**
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