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EXHIBIT 10.3
AMENDMENT
TO
LICENSE AGREEMENT
This Amendment to the License Agreement, dated January 28, 1999 by and between
Honeywell International Inc. (formerly AlliedSignal Inc), a Delaware corporation
acting through its Turbocharging Systems business unit having an address of
00000 Xxxxxxxxx xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxxxxxxx 00000 ("Honeywell")
and Turbodyne Technologies, Inc., a Delaware corporation having an address of
0000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxx 00000 and Turbodyne Systems,
Inc. a Nevada corporation its fully owned subsidiary (collectively "Turbodyne")
(the "License Agreement"), is entered into by the Parties on this ___ day of
December 1999. . Honeywell and Turbodyne shall be referred to in this Amendment
jointly as the "Parties" and individually , as appropriate, as the "Party".
RECITALS
A. On even date herewith the Parties have entered into an agreement for the
assignment of intellectual property rights and rights to manufacture,
market and sell products in the Turbopac product line (the "Turbopac
Agreement").
B. The Turbopac Agreement includes the assignment of all right and title in
and to all patents and patent applications (the "Patent Portfolio") of
Turbodyne to Honeywell. The exclusive license to Honeywell granted by
the License Agreement for patents and patent applications in existence
as of the date of the Turbopac Agreement is, therefore, merged with the
assignment of the patents and patent applications previously licensed.
C. This Amendment conforms the License Agreement to the intent of the
Parties in the Turbopac Agreement.
NOW, THEREFORE, in consideration of the covenants and promises made
herein and in the Turbopac Agreement, in further consideration of the ongoing
License Agreement and other good and valuable consideration, the sufficiency of
which is acknowledged, the Parties agree to amend the License Agreement as
follows:
1. Paragraph 1.(b) is amended to read:
1.(b) "Patent and Proprietary Rights" shall mean all proprietary rights
relating to the Technology (as hereinafter defined) and all rights under those
patents and patent applications and trademark rights identified in Exhibit A
attached hereto, and all patents and patent applications not included in Exhibit
A assigned to Honeywell by Turbodyne in the Turbopac Agreement and all patents
issuing from any such applications, all counterpart patents and patent
applications thereof now and hereafter filed and/or issuing in any country of
the world and all continuation, continuation in part and reissued patent
applications of any of the preceding and all patents issuing therefrom and all
related
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All schedules and exhibits have been omitted. Any omitted schedule or exhibit
will be furnished supplementally to the Securities and Exchange Commission on
request.
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design rights, if any, and utility models. The Parties agree that the patents
and patent applications identified are intellectual property within the
statutory definition of the Bankruptcy Code
2. Paragraph 2.(a) is amended to read:
2.(a) Turbodyne hereby grants to Honeywell the worldwide exclusive
license under Turbodyne Improvements, with the right to sublicense, to make,
have made, use and sell products incorporating the Technology. Turbodyne and
Honeywell shall report to each other on a monthly basis all Improvements made
within the preceding month which are to be employed in Licensed Products.
3. Paragraph 2.(d) is amended to identify the elimination of the retention
of rights by Turbodyne in the Turbopac products and now reads as follows:
2.(d) Honeywell shall have all rights to manufacture and sell any motor
driven compressor products currently sold in Turbodyne's Turbopac product line,
defined in Exhibit B hereto, including any developments or improvements to such
products. Turbodyne shall retain the rights and Honeywell hereby grants a
royalty free non-exclusive sublicense under the Patent and Proprietary Rights to
manufacture and sell electrical motor assistance systems for Cummins BHT
turbochargers in the independent aftermarket.
4. Paragraphs 3 (a) and 3 (b) shall be amended as follows:
3.(a) In exchange for the assignment of the Patent Portfolio and
exclusive license granted in Section 2 above Honeywell shall pay to Turbodyne an
earned royalty for each Reporting Period. in an amount equal to the Net Sales of
Products (as defined in section 7 of the Joint Development Agreement) multiplied
by three and seven tenths percent (3.7%) for each Product applicable to the
Reporting Period in question.
3 (b) Only one royalty shall be due with respect to any royalty bearing
Product regardless of whether such Product is covered by more than one claim
and/or patent and/or patent application of Licensed Patents.
5. Paragraph 7.(i) [sic] is amended to read as follows:
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7.(i) . Honeywell shall maintain active and enforceable any patents
issuing on Honeywell Improvements, Turbodyne Improvements and Joint
Improvements. If Honeywell elects not to maintain such patents and forego
payment of maintenance fees, Honeywell shall notify Turbodyne of such election
and Turbodyne shall have the right to acquire title to such patents subject to
the Grant of License herein. Allied Signal shall also maintain active and
enforceable any patents of Turbodyne's for which Turbodyne has granted an
exclusive license to Allied Signal or which Turbodyne has assigned to Allied
Signal under the terms of this amendment.
6. Paragraph 7.(b) is amended to read as follows:
7.(b) At the request of Honeywell and at Honeywell's expense for the
preparation, filing, prosecution and maintenance thereof, Turbodyne shall with
respect to patents and patent applications for Turbodyne Improvements file and
cause to be filed patent application(s) in such additional countries as
Honeywell may designate. Honeywell shall have no obligations to maintain active
and enforceable any patents and/or patent applications for which it incurred any
costs.
7. Paragraph 10(b) is amended to add "No termination under this License
Agreement shall affect, impact, annul, reverse or otherwise alter the assignment
of patents and patent applications by Turbodyne to Honeywell pursuant to the
Turbopac Agreement."
8. Paragraph 17 (c) is amended to read as follows: "Unless this Agreement
is superseded by a joint venture negotiated pursuant to paragraph 17(b), Allied
Signal will conduct development of the Products pursuant to the Joint
Development Agreement and obtain a Production Commitment or Advancd Development
Program from a Third Party customer by July 1, 2001 or the License granted
herein for the Turbodyne Improvements will become non-exclusive, at Turbodyne's
option. If Allied Signal is unable to obtain a Production Commitment by January
1, 2002, Honeywell will grant to Turbodyne a nonexclusive license under the
assigned Patent Portfolio with right to sublicense for Turbodyne's continued
development and sale of the Dynacharger and Turbopac products. If the License
granted pursuant to Paragraph 2(a) becomes non-exclusive by operation of this
paragraph 17(c), the royalty rates defined in paragraph 3(a) shall be reduced by
one-half percent (.5%). Allied Signal will conduct development of the Turbopac
products and honor existing supply and distributor agreements pursuant to the
Joint Development Agreement, pursuing after market and/or OEM customers and
obtain supply commitments by January 1, 2002. If Allied Signal is unable to
obtain supply commitments by January 1, 2003, Allied Signal will grant Turbodyne
an exclusive license to pursue sales of Turbopac products and Turbodyne's
royalty will increase to 4.7% of net profits for Dynacharger products. Turbodyne
will pay to Honeywell a royalty of 2% of net profits on sales of Turbopac
products by Turbodyne." All terms and provisions of the License Agreement not
specifically modified or amended herein shall remain in full force and effect.
The License Agreement shall be interpreted
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to be in conformance with the terms and provisions of the Turbopac Agreement,
which shall take precedence if any conflict shall arise.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
Honeywell International Inc. Turbodyne Systems Inc.
Turbocharging Systems
By: By:
Name: Name:
Title: Title:
Turbodyne Technologies Inc.
By:
Name:
Title:
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