EXCLUSIVE PATENT LICENSE AGREEMENT
THIS EXCLUSIVE PATENT LICENSE AGREEMENT ("Agreement") is made and entered into
as of July 31, 2003 (the "Signing Date") by and between John Simpson
("Licensor"), an individual, residing at 2468-3 Enterprise Road, Clearwater,
Florida 33763, and Dtomi, Inc. ("Licensee") a Nevada corporation, having its
principal office at 200 Ninth Avenue North, Suite 200, Safety Harbor, Florida
34695.
WITNESSETH
WHEREAS, Licensor is the sole owner and holder of the Patent and Licensed
Products (defined herein); and
WHEREAS, Licensee desires to acquire an exclusive License (defined herein) for a
definite term under such Patent and Licensed Products; and
WHEREAS, Licensor is willing to grant such License to Licensee.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, the parties hereto agree as follows:
1. DEFINITIONS.
When used in this License Agreement, the terms listed below shall have
the following meanings:
1.1 "IMPROVEMENT" or "IMPROVEMENTS" shall mean any modification of, or
alteration to, the Patents.
1.2 "LICENSED PRODUCTS" shall mean any and all products which employ or
are produced by the practices of inventions claimed in the Patent.
1.3 "LICENSED TERRITORY" shall mean the entire world.
1.4 "PATENT" shall mean collectively the United States patents
described in the attached EXHIBIT A, including any Improvements made thereto.
2. CONDITION PRECEDENT. Notwithstanding the parties' execution of this
Agreement, this Agreement shall not become effective until such time as the
following event occurs:
(a) The parties hereto execute that certain Consulting Agreement,
attached hereto as EXHIBIT B.
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3. LICENSE GRANTED.
3.1 LICENSE. Licensor hereby grants to Licensee, for the Term, an
exclusive and nonassignable right and license to use the Patent and the Licensed
Products in order to aid in the commercialization of the Patent and the Licensed
Products in the Licensed Territory.
3.2 EXCLUSIONS. Neither this License Agreement, nor the rights conveyed
or obligations assumed hereunder, nor any security interest herein may be
assigned, sold, encumbered, or sublicensed by Licensee without the written
consent of Licensor, or except as provided herein.
3.3 SUBLICENSES TO END-USERS. Licensee may grant nontransferable,
personal, nonexclusive sublicenses (without further right to sublicense) to
end-users for the sole purpose of using the Licensed Product.
4. TERM. This License Agreement shall be effective as of the Effective Date and
shall automatically terminate twenty (20) calendar years therefrom (the "Term"),
subject to the provisions of Section 9 of this Agreement. Upon the expiration of
the Term, provided there has not been a default hereunder, Licensor and Licensee
agree to negotiate in good faith to extend the term of this Agreement for a
mutually agreeable period of time in exchange for a mutually agreed upon
payment.
5. PAYMENT.
5.1 INITIAL PAYMENT. In consideration of the transactions described in
this Agreement, Licensee shall pay Licensor Fifty Thousand Dollars ($50,000),
due as of the Signing Date, as defined herein.
5.2 MONTHLY LICENSE FEE. In consideration of the transactions described
in this Agreement, Licensee shall pay Licensor a monthly license fee (the "MLF")
of Ten Thousand Dollars ($10,000) per calendar month, commencing on September 1,
2003, and continuing for the duration of the Term.
(a) Payment of the MLF shall be due to Licensor on the first day of
each month ("Payment Due Date"), although Licensee shall not be in breach of the
provisions hereunder unless such payment has not been made within thirty (30)
days of the Payment Due Date.
(b) The MLF shall be adjusted upward annually according to the annual
CPI increase for the metropolitan Miami, Florida area, such adjustment shall be