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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): February 2, 1998
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RACOM SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State of or other jurisdiction of incorporation or organization)
000-21907
(Commission File Number)
84-1182875
(IRS Employer Identification No.)
6080 Greenwood Plaza Blvd., Greenwood Village, CO 80111
(Address, including zip code, of registrant's principal executive offices)
303-771-2077
(Registrant's telephone number, including area code)
ITEM 5 - OTHER EVENTS:
On February 2, 1998, Racom Systems, Inc. ("Racom") announced an agreement in
conjunction with Ramtron International Corporation ("Ramtron") granting
Hitachi Ltd. ("Hitachi") a worldwide, non-exclusive license to design,
manufacture and sell smart card products based on Racom's contactless,
ferroelectric smart card technology, and Ramtron's proprietary ferroelectric
random access memory ("FRAM-R-") technology. In addition to these license
rights, Racom granted Hitachi option rights, for a predetermined option fee,
to Racom's RF/ID Technology, as defined in the agreement, for a period up to
December 31, 1999. As consideration for the rights granted under the
agreement, Hitachi will pay certain license fees and royalties to Racom at a
certain rate as defined in the agreement. As additional consideration for
the rights granted under the agreement, Hitachi will provide engineering
services for development of Racom's RF/ID Products, as defined in the
contract, and Ramtron and Racom have a certain defined percentage call
(subject to a maximum quantity) on Hitachi's production capacity of RF/ID
Products. The agreement remains effective until expiration of the last of
Racom's and Ramtron's patents.
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ITEM 7 - Financial Statement and Exhibits
(c.) Exhibits:
Exhibit No. Title
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10.17 Amendment No. 3
RF/ID Products to High-Density FRAM Cooperation Agreement
between Racom Systems, Inc., Ramtron International Corporation
and Hitachi, Ltd.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RACOM SYSTEMS, INC.
By: /s/ Lillian V. Burkey
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Lillian V. Burkey
Controller
By: /s/ Richard L. Horton
------------------------------
Richard L. Horton
President and CEO
Date: February 2, 1998
<PAGE>
EXHIBIT 10.17
* "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."
AMENDMENT NO. 3
RF/ID PRODUCTS
TO
HIGH-DENSITY FRAM COOPERATION AGREEMENT
This Amendment No. 3 ("Amendment No. 3") is made and entered into as of January
15, 1998 ("Effective Date"), by and among Ramtron International Corporation
("Ramtron"), a Delaware, USA corporation having its principal office at 1850
Ramtron Drive, Colorado Springs, Colorado 80921, USA, and Ramtron's affiliate
company, Racom Systems, Inc. ("Racom"), a Delaware, USA corporation having its
principal office at 6080 Greenwood Plaza Blvd., Greenwood Village, Colorado
80111, USA and Hitachi, Ltd. ("Hitachi"), a Japanese corporation having its
principal office at 6, Kanda-Surugadai, 4-chome, Chiyoda-ku, Tokyo 101, Japan.
Unless otherwise specified, all references to Hitachi shall mean the
Semiconductor and Integrated Circuits Division of Hitachi.
RECITALS
A. Ramtron and Racom entered into a series of Technology License
Agreements and Addenda thereof ("R&R License Agreement") whereunder
Ramtron licensed its ferroelectric technology ("Ferroelectric
Technology") to Racom for use in the design, manufacture and sale of
products incorporating RF/ID Technology (as defined in Section 1.1),
and granted Racom certain exclusive rights to sublicense Ferroelectric
Technology for use in the design, manufacture and sale of products,
including RF/ID Products (as defined in Section 1.6).
B. Ramtron and Hitachi entered into the High-Density FRAM Cooperation
Agreement dated April 25, 1994 ("FRAM Agreement") whereunder Ramtron
licensed its Ferroelectric Technology to Hitachi so as to develop,
design, make, have made, use, sell and/or otherwise dispose of
High-Density FRAM Products (as defined in the FRAM Agreement).
C. Ramtron and Hitachi subsequently amended the FRAM Agreement pursuant to
an amendment entitled "Amendment To High-Density FRAM Cooperation
Agreement" dated September 21, 1995 (Amendment No. 1") and "Amendment
No. 2 To High-Density FRAM Cooperation Agreement" dated March 11, 1996
("Amendment No. 2") whereunder the license scope of FRAM Agreement was
extended to Standard Memory FRAM Products and Non-Standard Memory FRAM
Products (as defined in the Amendment No. 1).
D. Pursuant to the R&R License Agreement, Ramtron and Racom now desire to
license to Hitachi the RF/ID Technology and Patents of Ramtron and
Racom so as to develop, design, make, have made, use, sell, and/or
otherwise dispose of RF/ID Products, and also to extend the license
scope of FRAM Agreement to include RF/ID Products.
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NOW THEREFORE, in consideration of the above premises and the mutual
covenants contained hereinafter, the parties agree as follows.
1. ARTICLE 1 - DEFINITIONS
Defined terms used herein shall have the meanings ascribed to such terms in the
FRAM Agreement and Amendment No. 1, unless otherwise provided herein as
follows;
1.1. RF/ID TECHNOLOGY" means technology based on electromagnetic waves or
sound waves used to remotely power, and to communicate and alter data in
RF/ID Products (as defined in Section 1.6).
1.2. "RACOM'S RF/ID TECHNOLOGY" means any technical information, except for
Patents, relating to Racom's RF/ID Technology as described in Attachment A
and developed by Racom and/or its Subsidiaries. Racom's RF/ID Technology
shall include RF/ID circuits technology and reader/writer system
technology, including, but not limited to, BIOS, firmware and all the
necessary technology for RF/ID chip implementation, but excluding
application software. Racom's RF/ID Technology shall include Racom's
RF/ID Technology improvements, enhancements and developments relating
to Racom's RF/ID Technology which may be created during the term of this
Amendment No. 3.
1.3. "RAMTRON'S RF/ID TECHNOLOGY" means any technical information, except
for Patents, relating to Ramtron's RF/ID Technology as described in
Attachment B and developed by Ramtron and/or its Subsidiaries.
Ramtron's RF/ID Technology shall include Ramtron's RF/ID Technology
improvements, enhancements and developments relating to Ramtron's
RF/ID Technology which may be created during the term of this
Amendment No. 3. Ramtron's RF/ID Technology shall also include RF/ID
Technology which may be jointly developed by Ramtron and Racom
(including their respective Subsidiaries), if any, during the term of
this Amendment No. 3 and/or further amendments thereof, if any. As of
the Effective Date, there is no such jointly-developed Ramtron RF/ID
Technology.
1.4. "RACOM PATENTS" means the Patents which had or have a first
effective filing date in any country prior to the termination or
expiration of this Amendment No. 3 and/or further amendments thereof,
if any, and which arise out of inventions pertaining to Racom's RF/ID
Technology, as described in Attachment A, and made and/or acquired by
Racom and/or its Subsidiaries, and under which Racom and/or its
Subsidiaries or any successor thereof has, as of the Effective Date of
this Amendment No. 3 and/or during the term of this Amendment No. 3
and or further amendments thereof, if any, the right to grant licenses
of the scope granted herein without the payment of royalty or other
consideration to third persons except for its employees or
Subsidiaries.
1.5. For the purpose of this Amendment No. 3, "RAMTRON PATENTS"
means the Patents which had or have a first effective filing date in
any country prior to the termination or expiration of this Amendment
No. 3 and/or further amendments thereof, if any, and which arise out
of inventions made and/or acquired by Ramtron and/or its Subsidiaries,
and under which Ramtron and/or its Subsidiaries or any successor
thereof has, as of the Effective Date of this Amendment No. 3 and/or
during the term of this Amendment No. 3 and/or further amendments
thereof, if any, the right to grant licenses of the scope granted
herein without the payment of royalty or other consideration to third
persons except for its employees or Subsidiaries.
Unless otherwise specified herein, Ramtron Patents shall include
"RAMTRON-RACOM JOINT PATENTS" means which will have a first effective filing
date in any country prior to the termination or expiration of this Amendment
No. 3 and/or further amendments thereof, if any, and which will arise out of
inventions that may be made and/or acquired jointly by Ramtron and Racom
(including their respective Subsidiaries) during the term of this Amendment
No. 3 and/or further amendments thereof, if any, and under which
Ramtron/Racom
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(including their respective Subsidiaries) or any successor thereof will have
during the term of this Amendment No. 3 and/or further amendments thereof, if
any, the right to grant licenses of the scope granted herein without the
payment of royalty or other consideration to third persons except for its
employees or Subsidiaries. As of the Effective Date of this Amendment No. 3,
there are no such Ramtron-Racom Joint Patents.
1.6. "RF/ID PRODUCTS" means devices which are remotely powered by
electromagnetic waves or sound waves in which data can be retained in such
device and/or altered using electromagnetic waves or sound waves and which
use RAMTRON Base FRAM Technology, RAMTRON High-Density FRAM Technology,
Ramtron's RF/ID Technology, Racom's RF/ID Technology (if Hitachi exercises
the option under Article 4), Ramtron Patents and/or Racom Patents; this
includes devices commonly known as a smart card, containing a
microprocessor.
2. ARTICLE II -TRANSFER OF RAMTRON'S RF/ID TECHNOLOGY
2.1. Transfer of Ramtron's RF/ID Technology
Within sixty (60) days after the Effective Date of this Amendment No.3,
Ramtr on shall provide Hitachi with Ramtron's RF/ID Technology.
2.2. Technical Assistance
Upon the written request of Hitachi, Ramtron agrees, subject to
availability of appropriate personnel, to send its qualified
engineer(s) to Hitachi for the purpose of assisting Hitachi with
respect to the implementation of Ramtron's RF/ID Technology, subject
to the mutually agreed-upon schedule. Hitachi agrees to pay an
engineer dispatching fee of United States ** per man-working day for
the above-said technical assistance and all reasonable air travel and
lodging accommodation fees in connection with the technical assistance
under this Section 2.2. It is confirmed and agreed hereby that the
above-said technical assistance shall not include the reasonable daily
technical Q&A which shall be provided at no charge to either party.
3. ARTICLE III - GRANT OF LICENSE
3.1. Ramtron's RF/ID Technology License
Pursuant to the R&R License Agreement, Racom acknowledges that Ramtron
hereby grants to Hitachi and/or its Subsidiaries, subject to the terms
of this Amendment No. 3, a non-exclusive, non-sublicensable,
non-transferable, non-assignable, worldwide, perpetual license, under
Ramtron's Trade Secret Rights, Copyrights and/or Mask Work Rights, to
utilize Ramtron's RF/ID Technology so as to develop, design, make,
have made, use, sell and/or otherwise dispose of RF/ID Products.
3.2. Racom Patents License
Pursuant to the R&R License Agreement, Racom hereby grants to Hitachi
and/or its Subsidiaries, subject to the terms of this Amendment No. 3,
a non-exclusive, non-sublicensable, non-transferable, non-assignable,
worldwide license under Racom Patents to develop, design, make, have
made, use, sell and/or otherwise dispose of RF/ID Products for the
life of each Racom Patent.
3.3. Pursuant to the R&R License Agreement, only for the purpose of
this Amendment No. 3, Racom acknowledges that Ramtron extends the
license scope of the FRAM Agreement to include RF/ID Products, as
follows.
3.3.1. RAMTRON Base FRAM Technology License
<PAGE>
Ramtron hereby agrees, subject to the terms of this Amendment No. 3, to grant
to Hitachi and/or its Subsidiaries a non-exclusive, non-sublicensable, non-
transferable, non-assignable, worldwide, perpetual license, under its Trade
Secret Rights, Copyrights and/or Mask Work Rights, to utilize Ramtron Base FRAM
Technology so as to develop, design, make, have made, use, sell and/or
otherwise dispose of RF/ID Products.
3.3.2. RAMTRON Patents License
Ramtron hereby agrees, subject to the terms of this Amendment No. 3,
to grant to Hitachi and/or its Subsidiaries a non-exclusive,
non-sublicensable, non-transferable, non-assignable, worldwide license
under RAMTRON Patents to develop, design, make, have made, use, sell,
and/or otherwise dispose of RF/ID Products for the life of each
RAMTRON Patent.
3.3.3. RAMTRON High-Density FRAM Technology
Ramtron hereby agrees, subject to the terms of this Amendment No. 3,
to grant Hitachi and/or its Subsidiaries a non-exclusive,
non-sublicensable, non-transferable, non-assignable, worldwide,
perpetual license, under its Trade Secret Rights, Copyrights and/or
Mask Rights to utilize RAMTRON High-Density FRAM Technology so as to
develop, design, make, have made, use, sell and/or otherwise dispose
of RF/ID Products.
3.4. Customers Located Inside Japan
As of the Effective Date, pursuant to this Article 3, Hitachi may
commence the manufacture and sale of RF/ID Products for customers
located outside Japan. Hitachi may not commence the sale of RF/ID
Products for customers located inside Japan until January 1, 1999, in
order that Ramtron and Racom may honor a pre-existing agreement with
another Japanese company; Provided, however, that Ramtron and Racom
agree to make its reasonable efforts to amend the pre-existing
agreement so that Hitachi can start RF/ID business in Japan before
January 1, 1999.
4. ARTICLE IV - OPTION RIGHTS TO RECEIVE RACOM'S RF/ID TECHNOLOGY
4.1. Option Rights Exercise
For a period up to December 31, 1999, Hitachi shall have the option
right to receive Racom's RF/ID Technology. When Hitachi desires to
exercise such option right, Hitachi shall provide to Racom a written
notice of option right exercise and pay to Racom the Option Fee of
United States Dollars ** within thirty (30) days of that written notice.
Within thirty (30) days of receipt of the Option Fee, Racom shall
provide Hitachi with Racom's RF/ID Technology and upon Hitachi's
request, Racom shall also provide Hitachi with the technical assistance
as set forth below. Upon receipt of the Option Fee, Racom hereby agrees
to grant to Hitachi and/or its Subsidiaries a non-exclusive, non-
sublicensable, non-transferable, non-assignable, worldwide, perpetual
license, under its Trade Secret Rights and/or Copyrights, to utilize
Racom's RF/ID Technology so as to develop, design, make, have made, use,
sell, and/or otherwise dispose of RF/ID Products.
4.2. Technical Assistance
Upon the written request of Hitachi, Racom agrees, subject to
availability of appropriate personnel, to send its qualified engineer(s)
to Hitachi for the purpose of assisting Hitachi with respect to the
implementation of Racom's RF/ID Technology, subject to the mutually
agreed-upon schedule. Such technical assistance shall be provided by
Racom to Hitachi at no charge to Hitachi up to thirty (30) man-working
days in total. After the initial thirty (30) man-working days of
assistance are provided,
<PAGE>
Hitachi agrees to pay an engineer dispatching fee of United States
Dollars ** per man-working day for up to an additional thirty (30)
man-working days; and thereafter, Hitachi agrees to pay an engineer
dispatching fee of United States Dollars ** per man-working day. In
addition, Hitachi agrees to pay all reasonable air travel and lodging
accommodation fees in connection with the technical assistance under
this Section 4.2. It is confirmed and agreed hereby that the above
said technical assistance shall not include the reasonable daily
technical Q&A which shall be provided at no charge to either party.
5. ARTICLE V - COMPENSATION
In consideration of the rights granted under Articles 3 and 4, Hitachi
shall make payments as follows;
5.1. Fixed License Fee
Hitachi shall pay to Racom:
5.1.1. Fixed License Fee of United States Dollars ** shall be paid to
Racom by January 31, 1998.
5.1.2. Fixed License Fee of United States Dollars ** shall be paid to
Racom by April 30, 1998.
5.2. Running Royalty
5.2.1. Running royalty shall be paid to Ramtron semiannually (by June 30,
and by December 30 of each year pursuant to the payment procedures as
set forth in Article 8 of the FRAM Agreement) at the rate of ** of the
net sales (ex-factory price basis) on the RF/ID Products manufactured
hereunder by Hitachi and/or its Subsidiaries, except that Hitachi shall
not make royalty payments for RF/ID Products produced for Ramtron and/or
Racom as set forth in Article 8. The running royalty shall be payable
for ** years after the first Hitachi invoice for shipment of commercial
quantities of RF/ID Products from continuous production by Hitachi.
After ** years, the parties will discuss in good faith the terms and
conditions on licensing of Ramtron Patents and RF/ID Technology, and/or
Racom Patents and RF/ID Technology (if Hitachi exercises the option
under Article 4), if Hitachi needs; Provided, however, that in case the
parties enter into any co-development of RF/ID Products, the parties
will agree that the licenses under Ramtron's RF/ID Technology and
Racom's RF/ID Technology shall be a paid-up license, and will discuss in
good faith the terms and conditions of Ramtron Patents and Racom patents
licensing, if Hitachi needs. In no event shall the running royalty
payment, if any, be required after the expiration of Ramtron Patents and
Racom Patents.
5.2.2. If the parties discuss the licensing terms and conditions after **
years as set forth in Section 5.2.1 above, such discussions shall be
conducted as the matter between the parties only, but shall not be
restricted or affected by any agreement between each company and another
company (e.g., the most favored conditions, etc.)
5.2.3. At any time during the term of this Amendment No. 3, in case that
the parties enter into any co-development project of RF/ID Products, the
parties agree to discuss in good faith reduction of the running royalty
rate.
5.3. Withholding Tax
Payments made pursuant to this Amendment No. 3 may be subject to
deduction of the withholding tax as provided for by the applicable
U.S.-Japan tax treaty in force as of the date such payments are due.
If Hitachi is required by law to withhold tax payable by Ramtron or
Racom and to pay such tax for the account of Ramtron
<PAGE>
or Racom, Hitachi shall obtain and deliver to Ramtron or Racom a
certificate for such tax payment from the Japanese Government.
5.4. Most Favored Clause
It is acknowledged and agreed by Ramtron and Racom that the fixed
license fee and running royalty as set forth in Article 5 and the
engineering services equal to United States Dollars ** as set forth in
Article 6, shall be the most favorable terms for Hitachi among the
similar RF/ID license agreements with other companies as of the
Effective Date. If Ramtron and/or Racom enter into a certain RF/ID
license agreement hereafter with another company in which the
compensation terms for such another company are better than those set
out herein, then Ramtron and/or Racom shall advise Hitachi of such
preferential terms and make the same terms available to Hitachi, with
Hitachi's acknowledgment, as of the date of such preferential
agreement.
6. ARTICLE VI-ENGINEERING SERVICE
In addition to Article 5, in consideration of the rights granted under
Articles 3 and 4, and as a condition of this Amendment No. 3, Hitachi
shall provide to Racom the following engineering services for
development of Racom RF/ID Products, up to the total amount of
engineering services equal to United States Dollars** , under terms
and conditions to be mutually agreed upon and subject to the following
conditions.
1) Hitachi shall process and provide 6 inch pilot run wafers at US$**/wafer;
and
2) Hitachi shall provide mask sets at US$**/set; and
3) Hitachi shall provide design rules, device models, and other technical
information in order for Racom to complete the design and transfer of
designs of RF/ID products for manufacture by Hitachi.
It is acknowledged and agreed by Hitachi that the provisions as described under
Article 6, including, but not limited to subsections 1), 2) and 3) thereof,
shall be no less favorable than the terms offered by Hitachi to any external
third parties during the term of this Amendment 3.
If, within a period of five (5) years of the Effective Date of this Amendment
No. 3, subject to timely requests from Racom, Hitachi is unable to provide the
engineering services as described herein, then Hitachi shall pay to Racom
United States Dollars ** or any unspent portion thereof.
7. ARTICLE VII-COVENANT NOT TO SUE
Ramtron and Racom shall agree, subject to the terms of this Amendment No. 3,
not to assert Ramtron Patents and Racom Patents, including reader/writer
patents and IC Card patents, that pertain to RF/ID Products against the
customers (including Hitachi's in-house customers) who purchased RF/ID
Products from Hitachi for the life of the Ramtron Patents and Racom Patents.
8. ARTICLE VIII-MANUFACTURING RIGHTS
Ramtron and Racom can purchase in total up to a maximum of ** of Hitachi's
production capacity of RF/ID Products under the separate business agreement
to be discussed in good faith between the parties. Hitachi agrees to provide
Ramtron and Racom with RF/ID products at a competitive sales price not less
than fair value pursuant to Antidumping Law and DOC regulations, which is the
sum of the cost of manufacturing, the amount for general expenses not less
than **% of the cost and the amount for profit not less than **% of the sum
of such expenses and cost. If the parties cannot reach an agreement on the
sales price, then the parties will settle the matter at the executive level
meeting. If Hitachi and Ramtron and/or Racom agree that the issue cannot be
resolved at the executive level meeting, and upon the request of one party,
such unresolved issue may be
<PAGE>
submitted to a mediator. The place of mediation shall be the location
designated by the other party. The mediator shall be Hitachi's CPA or an
independent CPA mutually acceptable under confidentiality obligations if
Hitachi's cost data is to be examined. The total number of wafers for RF/ID
Products to be made available by Hitachi for purchase by Ramtron and Racom
shall not exceed ** per month.
9. ARTICLE IX-CONFIDENTIALITY
It is agreed hereby that all the Confidential Information to be disclosed
under this Amendment No. 3 shall be controlled by the confidentiality
obligations as set forth in Section 7 of FRAM Agreement. Hitachi hereby
agrees that, notwithstanding anything to the contrary contained in the FRAM
Agreement, or any Amendment thereto, Ramtron shall be entitled to provide to
Racom a copy of the FRAM Agreement and each Amendment thereto, redacted to
remove any reference to license fee amounts, royalty rates and other economic
and financial terms, which shall be attached hereto, provided that Racom
agrees not to disclose such redacted version of the FRAM Agreement to any
third party.
10. ARTICLE X-REPRESENTATION AND WARRANTY
10.1. Ramtron, Racom and Hitachi represent and warrant that (I) they have
full power and authority to enter into this Amendment No. 3; (ii) the
terms and conditions of this Amendment No. 3, and each party's
obligations hereunder, do not conflict with or violate any terms and
conditions of any other agreement or commitment to which any party is
a signatory or by which it is bound.
10.2. Ramtron represents and warrants that it has all right, title and
interest in and to Ramtron's RF/ID Technology disclosed hereunder and
Ramtron Patents licensed hereunder to Hitachi, and that it has the
right to grant to Hitachi the licenses granted herein.
10.3. Racom represents and warrants that it has all right, title and interests
in and to Racom's RF/ID Technology disclosed hereunder and Racom
Patents licensed hereunder to Hitachi, and that it has the right to
grant to Hitachi the licenses granted herein.
10.4. Each party will defend, indemnify and hold harmless the other parties
against any third party claims arising out of or related to a breach of
the above representations and warranties.
10.5. Notwithstanding the indemnification provision set forth in Section 10.4
above, Racom shall defend, indemnify and hold harmless Hitachi, its
affiliates, Subsidiaries or customers and shall pay all losses,
damages, fees, expenses and costs (including reasonable attorneys'
fees) incurred by them based upon any claim, action or proceeding
brought by Racom Japan, Inc. ("Racom Japan"), Racom's affiliated
company, having its registered office at 6F Otsuka-Shinyurigaoka
Building 1-5-3, Kamiasao Asao-ku, Kawasaki-shi, Kanagawa-ken 215,
Japan, any successor thereof or any director, officer or employee of
Racom Japan or such successor (regardless of whether such person
holds such position at the time of a claim, action or proceeding) or
any trustee, shareholder or any others acting on its or their behalf
against Hitachi, its affiliates, Subsidiaries or customers, where
such claim, action or proceeding relates to any rights or obligations
set forth in this Amendment No. 3. The foregoing sentence shall
include without limitation, any claim, action or proceeding arising
from or relating to: (i) any agreement between Racom Japan and
Racom, regardless of whether such agreement has been terminated; and
(ii) infringement or misappropriation of intellectual property rights.
Racom hereby acknowledges and agrees that if it fails to comply with its
obligations under the provisions of this Section 10.5 and Section 10.6, or in
the event of a breach of any of the representations, warranties or covenants by
Racom contained in this Article 10, then notwithstanding the provisions of
Sections 12.5 and 14.5 of the FRAM Agreement, Hitachi may seek any remedy
available at law or in equity with respect to such failure or breach.
<PAGE>
10.6. Ramtron and Racom shall provide prior written notice to Hitachi if a
substantial change of ownership of Racom Japan occurs during the term
of this Amendment No. 3, including, without limitation, a substantial
reduction in the number of Racom Japan's voting shares that Racom
holds as of the Effective Date, or an acquisition by one entity of
more than 50% of the total voting power of all of the outstanding
voting shares of Racom Japan.
10.7. Ramtron agrees to use its reasonable best efforts to encourage and cause
Racom to comply with its obligations under this Amendment No. 3 and
to ensure that Hitachi receives and enjoys the rights, benefits and
privileges intended to be provided to Hitachi pursuant to this
Amendment No. 3.
11. ARTICLE XI-TERM AND TERMINATION
11.1. This Amendment No.3 shall become effective upon the Effective
Date and continue to be effective until expiration of the last of
Ramtron Patents and Racom Patents, regardless of whether or not the
FRAM Agreement is expired or terminated earlier.
11.2. Articles 3, 4 (if Hitachi exercises the option, as described
in Article 4), 5, 6, 7, 9 ,10, 11 and 12 of this Amendment No. 3
shall survive and continue after the expiration and/or any
termination of this Amendment No. 3.
12. ARTICLE XII-GENERAL PROVISIONS
12.1. Each party represents and warrants that there is or will be no
agreement with another company which may conflict or violate any
terms and conditions of this Amendment No. 3.
12.2. Unless otherwise specified in this Amendment No. 3, all the terms and
conditions of the FRAM Agreement as amended by Amendment No. 1 and
Amendment No. 2 shall apply in an appropriate manner for this
Amendment No. 3 until the expiration of this Amendment No. 3.
12.3. Publicity
All notices to third parties and all other publicity concerning the
terms and conditions of this Amendment No. 3 shall be jointly planned
and coordinated by and between Hitachi, Ramtron and Racom. None of
Hitachi, Ramtron or Racom shall act unilaterally in this regard,
pursuant to Article 9, without the prior written approval of the
other parties. It is expected that Hitachi, Ramtron and Racom will
mutually agree upon a press release which will be issued after the
Effective Date of this Amendment No. 3.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be
executed as below by their duly authorized officers.
RACOM SYSTEMS, INC. RAMTRON INTERNATIONAL CORPORATION
/s/ Richard L. Horton /s/ Greg Jones
- ------------------------------ ------------------------------
Richard L. Horton Greg Jones
President and CEO President and COO
<PAGE>
HITACHI, LTD.
/s/ Tadashi Ishibashi
- ---------------------------------------------
Tadashi Ishibashi
Executive Managing Director
General Manager
Semiconductor & Integrated Circuits Division
<PAGE>
ATTACHMENT A: RACOM RF/ID TECHNOLOGY
TO
AMENDMENT NO. 3
OF THE
FRAM AGREEMENT
The Racom RF/ID Technology includes the information provided below:
LF TECHNOLOGY
1. DESCRIPTION
a) General
The RACOM Low Frequency, LFM Series Proximity RF Read/Write Transponder is
a single chip implementation, passive, memory transponder. It includes a
4K bit (K = 1024) nonvolatile FRAM memory. It supports an RF interface
data rate of approximately 8 kbps (See Note 1) for RF interface data read
and write operations. It is designed for use in passive, low frequency,
proximity RF read/write applications where the transponder is inductively
powered via its antenna coil from an incident, low frequency, AC magnetic
field. Such a field is generated by an associated interrogator or
reader/writer device, the LFC RF Communications Controller.
b) Operation
The LFC Communications Controller communicates via its attached coil with
transponders using low frequency magnetic induction. Using this
interface, the Controller can read and write data from/to the
Transponder's FRAM memory.
The LFC Controller powers the transponder using a 125 kHz magnetic field.
This field/frequency is modulated by the LFC Controller (125 kHz/116.3
kHz) to send data to the transponder at a data rate of approximately 8
kbps (See Note 1, page 4). The transponder sends data to the Controller
at a frequency of 62.5 kHz carrying a data rate of approximately 8 kbps
(7.8125 kbps).
The LFC Controller accommodates half-duplex RF communications.
The transponder includes an Analog Front End with a power supply and RF
interface. The transponder also includes a received FSK data detector, 4K
bit non-volatile (FRAM) memory, send data encoder/modulator, data handling
and memory addressing logic, memory write-protect logic ("lock bits"),
Command Error Checking, Customer Code checking and "Unique Addressability"
logic, and control logic (a state-machine).
2. SCHEMATICS
3. DOCUMENTATION
<PAGE>
HF TECHNOLOGY
1. DESCRIPTION
a) General
The HF RF/ID ASIC ("ASIC") is powered by and communicates via attached
coils. One coil receives power and clock ("POWER" coil) The second coil
communicates data ("COMM" coil). The ASIC is powered by magnetic
induction via the POWER coil. The powering frequency is 13.56 MHz, an
ISM frequency. A high frequency clock is derived from the powering
signal (13.56 MHz). This clock is divided by 4 (to 3.39 MHz) to clock
the H8 RF/ID FRAM Product ASIC and to provide the RF transmit data
carrier frequency. The ASIC communicates data and command messages via
its COMM coil. The ASIC communicates half duplex using a 3.39 MHz
carrier signal.
b) Powering and Clocking the ASIC
The ASIC operates when it is powered by an AC signal provided at its POWER
coil inputs. This AC signal is induced in POWER coil by a 13.56 MHz AC
magnetic field generated by the associated RF Communications Controller.
The ASIC rectifies the AC powering signal to derive DC to power its
circuits. A logic clock is derived in the ASIC from the AC powering
signal induced in the POWER coil from the powering magnetic field. The
clock frequency is, thus, the same as that of the powering field (13.56
MHz).
Lower frequency clocks are obtained by dividing down from the 13.56 MHz
clock ("CLOCK"). The clock for the ASIC is CLOCK/4 (3.39 MHz) (the period
of this clock, 295 ns., is the cycle time of the microprocessor in the RF
powered case). The RF transmit carrier frequency is also CLOCK/4 (3.39
MHz).
The ASIC has a voltage clamp circuit to hold the powering voltage out of
the rectifier from rising too high for the CMOS circuits.
The ASIC has a Power-On-Reset (POR) circuit to keep the logic reset when
DC voltage is insufficient to operate.
c) HF RF/ID FRAM Product Communications
The ASIC communicates data, receives commands, and transmit status from/to
the associated RF Communications Controller. The ASIC does this via an
attached COMM coil. Communications is half duplex at 3.39 MHz. The data
rate is 105.94 kbps for both transmit and receive.
Received Data - The ASIC receives an 3.39 MHz ASK NRZ signal which it
detects, filters, and decodes into NRZ. This resulting NRZ serial data
stream is fed into the microcomputer via an I/O port bit. The received
signal is coded NRZ. Presence of 3.39 MHz represents a "1" and absence
represents a "0".
Transmitted Data - The ASIC transmits by PSK modulating a 3.39 MHz carrier
signal with MFM coded data. The 3.39 MHz carrier is inverted
(representing a 180 degree phase shift) whenever a transition from "1" to
"0" or "0" to "1" occurs in the MFM data stream. A program executing in
the microprocessor provides the NRZ data at an I/O port bit. Hardware
encodes the NRZ data into MFM.
2. SCHEMATICS
3. DOCUMENTATION
RACOM RF/ID PATENTS (Example of existing Racom RF/ID Patents as of the
Effective Date)
1. Low Power Consumption oscillator Using Multiple Transconductance
Amplifiers - Patent No. 5,444,421, issued 8/22/97
2. Power supply and Power Enable circuit for an RF/ID Transponder - Patent
No. 5,479,172, issued 12/26/95
<PAGE>
3. Passive RF Transponder and Method - Patent No. 5,517,194, issued 5/14/95
4. Communications System Utilizing FSK/PSK Modulation Techniques - Patent No.
5,521,602, 5/28/96
5. Method and Apparatus for Detecting an FSK Encoded Carrier Signal - Patent
No. 5,533,061, issued 7/2/96
6. FSK Detector Circuit Method, Patent No. 5,553,099, issued 9/3/96
<PAGE>
ATTACHMENT B
TO
AMENDMENT NO. 3
TO
HIGH DENSITY FRAM COOPERATION AGREEMENT
RAMTRON'S RF/ID TECHNOLOGY
Concepts, ideas, techniques, procedures, know-how, show-how, trade secrets,
design information and other technical information relating generally to FRAM
technology and products including, specifically, the integration of FRAM
technology with RF/ID Technology.
Ramtron previously transferred to Hitachi a substantial amount of such
information and technology pursuant to the FRAM Agreement.
*****
