-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VpJ1Rtk41G4IkzmJ7uxXP0xNNmDlbzyrn4wVNkpvjztrSwguNJ4lgGMz2PEpeo1j G4Xl5hJOS1XJraqg7BQXEw== 0001144204-03-004969.txt : 20030820 0001144204-03-004969.hdr.sgml : 20030820 20030820173110 ACCESSION NUMBER: 0001144204-03-004969 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20030819 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Other events FILED AS OF DATE: 20030820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DTOMI INC CENTRAL INDEX KEY: 0001083721 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 980207554 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27277 FILM NUMBER: 03858714 BUSINESS ADDRESS: STREET 1: 200 9TH AVENUE, SUITE 220 CITY: SAFETY HARBOR STATE: FL ZIP: 34965 BUSINESS PHONE: (727) 723-8664 MAIL ADDRESS: STREET 1: 200 9TH AVENUE, SUITE 220 CITY: SAFETY HARBOR STATE: FL ZIP: 34965 FORMER COMPANY: FORMER CONFORMED NAME: COPPER VALLEY MINERALS LTD DATE OF NAME CHANGE: 19990823 FORMER COMPANY: FORMER CONFORMED NAME: RECON RUBBER CORP DATE OF NAME CHANGE: 19990823 8-K/A 1 dtomi8k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 August 20, 2003 .............................................................................. Date of Report (Date of earliest event reported) Dtomi, Inc. ................................................................................ (Exact name of registrant as specified in its charter) Nevada 98-0207554 ............................................................................... (State or other jurisdiction Commission (IRS Employer of incorporation) File Number) Identification No.) 200 9th Avenue, Suite 220, Safety Harbor, Florida 34965 ................................................................................ (Address of principal executive offices) (Zip Code) (727) 723-8664 .............................................................................. Registrant's telephone number, including area code ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On April 7, 2003, Dtomi, Inc. ("Dtomi" or the "Company") executed that certain Asset Purchase Agreement (the "Asset Purchase Agreement"), with John Simpson of Richland, Washington, pursuant to which the Company acquired United States Patent #6,530,580 (the "Patent") in exchange for 711,992 shares of Dtomi's common stock and the assumption by Dtomi of certain liabilities relating to costs associated with commercializing the technology underlying the Patent. A copy of the Asset Purchase Agreement is attached to this Current Report on Form 8-K (the "Report") as Exhibit 10. In connection with the Patent acquisition, Dtomi expects to enter into an employment agreement with John Simpson. On April 7, 2003, Mr. Simpson assumed the position of President of Dtomi and will oversee the implementation of Dtomi's business plan and the deployment of the Patent. Mr. Simpson has also been appointed to the board of directors for Dtomi. A copy of the press release regarding the Patent acquisition, reverse-split, hiring of John Simpson by Dtomi, appointment of John Simpson to the board of directors of Dtomi and the resignation of John "JT" Thatch is attached to this Report as Exhibit 99. The Company subsequently determined that its interests were best served by licensing the Patent from Mr. Simpson, rather than acquiring the Patent by an outright purchase. Accordingly, on August 5, 2003, Dtomi executed that certain Assignment of Patent Rights Agreement ("Assignment of Patent Rights Agreement") with Mr. Simpson, pursuant to which the Patent that Dtomi had previously acquired was assigned to Mr. Simpson. A copy of the Assignment of Patent Rights Agreement is attached to this Report as Exhibit 10.1. At the same time, Dtomi and Mr. Simpson executed that certain Mutual Release and Termination Agreement ("Mutual Release and Termination Agreement"), pursuant to which the Asset Purchase Agreement was terminated. A copy of the Mutual Release and Termination Agreement is attached to this Report as Exhibit 10.2. In connection with the Patent assignment, Mr. Simpson resigned from his position as President of Dtomi, effective August 19, 2003. On July 31, 2003, Dtomi executed that certain Exclusive Patent License Agreement ("Exclusive Patent License Agreement"), pursuant to which Mr. Simpson granted an exclusive right and license to use the Patent. The Exclusive Patent License Agreement became effective on August 5, 2003. A copy of the "Exclusive Patent License Agreement" is attached to this Report as Exhibit 10.3. At the same time, Dtomi executed that certain Consulting Services Agreement ("Consulting Services Agreement"), pursuant to which Mr. Simpson agreed to provide to Dtomi, on an as needed basis by Dtomi, forty (40) hours per month of consulting services, which include advising, consulting, and strategizing on matters relating to the commercialization of the Patent, in consideration for which Dtomi agreed to grant Mr. Simpson a sufficient quantity of common shares of Dtomi such that Mr. Simpson shall own (i) thirty percent (30%) of all issued and outstanding shares of Dtomi upon execution of the agreement; (ii) twenty four point three percent (24.3%) upon Dtomi receiving at least Six Hundred Thousand Dollars ($600,000) of either investment capital or in-kind consideration; and (iii) twenty-two percent 2 (22%) upon Dtomi receiving at least One Million Dollars ($1,000,000) of either investment capital or in-kind consideration. A copy of the Consulting Services Agreement is attached to this Report as Exhibit 10.4. A copy of the press release regarding the Patent assignment, termination of the Patent acquisition, resignation of John Simpson by Dtomi, Patent license, and Consulting Services Agreement is attached to this Report as Exhibit 99.1. ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE. REVERSE SPLIT In connection with the acquisition of the Patent, Dtomi has effected a 1-for-20 reverse-split of its issued and outstanding stock. CHANGE IN DIRECTORS AND OFFICERS Effective April 7, 2003, John "JT" Thatch resigned as President of Dtomi. Mr. Thatch will serve as the Company's Chief Executive Officer. In connection with the Patent assignment from Dtomi to Mr. Simpson, Mr. Simpson resigned from his position as President of Dtomi, effective August 19, 2003. 3
EXHIBIT NUMBER DESCRIPTION 10 Asset Purchase Agreement by and between Dtomi, Inc. and John Simpson. 10.1 Assignment of Patent Rights Agreement by and between Dtomi, Inc. and John Simpson. 10.2 Mutual Release and Termination Agreement by and between Dtomi, Inc. and John Simpson. 10.3 Exclusive Patent License Agreement by and between Dtomi, Inc. and John Simpson. 10.4 Consulting Services Agreement by and between Dtomi, Inc. and John Simpson. 99 Press Release of Dtomi, Inc., released on April 9, 2003. 99.1 Press Release of Dtomi, Inc., released on August 20, 2003.
4 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. Dtomi, Inc. (Name of Registrant) Date: August 20, 2003 By: /s/ John "JT" Thatch -------------------------------------- John "JT Thatch Chief Executive Officer and Treasurer 5 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION 10 Asset Purchase Agreement by and between Dtomi, Inc. and John Simpson. 10.1 Assignment of Patent Rights Agreement by and between Dtomi, Inc. and John Simpson. 10.2 Mutual Release and Termination Agreement by and between Dtomi, Inc. and John Simpson. 10.3 Exclusive Patent License Agreement by and between Dtomi, Inc. and John Simpson. 10.4 Consulting Services Agreement by and between Dtomi, Inc. and John Simpson. 99 Press Release of Dtomi, Inc., released on April 9, 2003. 99.1 Press Release of Dtomi, Inc., released on August 20, 2003.
6 EX-10 3 ex_10.txt EXHIBIT 10 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into this ___th day of April, 2003, by and between Dtomi, Inc., a Nevada corporation (the "Purchaser") and John Simpson, an individual (the "Seller"). WHEREAS, the Seller is the owner of the air spring powered lowerable suspension assembly patent, Patent No. 6,530,580 (the "Asset"); and WHEREAS, the Purchaser desires to purchase, and the Seller desires to sell, the Asset, for use in the Purchaser's business; and NOW, THEREFORE, for and in consideration of the premises, and the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. ASSET PURCHASED. The Seller agrees to sell to the Purchaser and the Purchaser agrees to purchase from the Seller, on the terms and conditions set forth in this Agreement, the Asset. To effect the foregoing, Seller will sell, assign, transfer and set over to Purchaser all of Seller's right, title and interest in and to the Asset, including all common law rights, all goodwill and all claims for damages by reason of any past infringement and any other right or interest Seller may have in the Asset and all other patent applications, improvements, reissues and inventions arising therefrom, for Purchaser's own use and enjoyment and the use and enjoyment of Purchaser's successors, assigns and other legal representatives. 2. LIABILITIES ASSUMED. The Purchaser agrees to assume and pay, discharge or perform, as appropriate, Three Hundred Thousand Dollars ($300,000) of liabilities of the Seller relating to and/or arising out of costs associated with commercializing the technology underlying the Asset, which existed or arose prior to the closing, including, but not limited to, costs associated with certain obligations to, and/or claims by, third parties in Australia with an alleged interest in the Asset (the "Liabilities"). Further, the Purchaser shall, no later than ten (10) days after the Closing (defined in Section 5.1 below), pay Seller Fifty Thousand Dollars ($50,000) towards satisfaction of the Liabilities. The obligations of the Purchaser under this Section are subject to whatever rights the Purchaser may have under this Agreement or otherwise for breach by Seller of any representation, warranty, covenant or agreement contained in this Agreement, including but not limited to any right of indemnification provided by this Agreement. 3. PURCHASE PRICE. In consideration of the sale, transfer and conveyance to the Purchaser of the Asset and the Assumed Liabilities, Purchaser will issue Seller common stock equaling forty percent (40%) (approximately 711,992 shares) (the "Shares") of the 1 issued and outstanding stock of Dtomi, post-split(1) (the "Purchase Price"). The number of Shares to be transferred to Seller shall be appropriately adjusted to reflect the effect of any stock split, reverse split, stock dividend, reorganization, recapitalization or other like change with respect to Seller's common stock occurring after the Closing Date, as defined in Section 5.1, and prior to the Closing, so as to provide Seller the same economic effect as contemplated by this Agreement prior to such stock split, reverse split, stock dividend, reorganization, recapitalization, or like change. 4. PAYMENT OF PURCHASE PRICE. At the Closing, the Purchaser shall issue, or direct its transfer agent to issue the Shares to the Seller, on account of the Purchase Price. 5. CLOSING. 5.1 TIME AND PLACE. The closing of the sale and purchase of the Asset (the "Closing") shall take place at The Otto Law Group, PLLC, at 5:00 p.m. on April __, 2003 ("Closing Date"), or at such other time as the parties may agree in writing. 5.2 OBLIGATIONS OF SELLER AT THE CLOSING. At the Closing, the Seller shall execute, or cause to be executed, and shall deliver to the Purchaser the following: 5.2.1 that certain Assignment of Patent Rights, attached hereto as EXHIBIT A; 5.2.2 a certificate of the Seller representing and warranting to the Purchaser that each of the representations and warranties of the Seller in this Agreement are accurate in all respects as of the date of this Agreement and are accurate in all respects as of the Closing Date as if made on the Closing Date; and 5.2.3 such other documents as the Purchaser may reasonably request for the purpose of (A) evidencing the accuracy of any of Seller's representations and warranties, (B) evidencing the performance by Seller of, or the compliance by Seller with, any covenant or obligation required to be performed or complied with by it, (C) evidencing the satisfaction of any condition referred to in this Agreement, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated in this Agreement. 5.3 OBLIGATIONS OF PURCHASER AT THE CLOSING. At the Closing, the Purchaser shall execute, or cause to be executed, and shall deliver to the Seller the following: - -------- 1 Purchaser shall effect a 1-for-20 reverse stock split of the Purchaser's issued and outstanding common stock, options, warrants, and any other securities convertible into or that may be exchanged for options, warrants or common or preferred stock of the Purchaser, bringing the total issued and outstanding stock of the Corporation to Nine Hundred Seventy Thousand Eight Hundred Ninety Nine (970,899) shares from Nineteen Million Four Hundred Seventeen Thousand Nine Hundred and Eighty One (19,417,981) shares. 2 5.3.1 a certificate or certificates for the Shares to be transferred to the Seller pursuant to this Agreement against delivery of the Asset; 5.3.2 a certificate of the Purchaser to the effect that each of the Purchaser's representations and warranties in this Agreement was accurate in all respects as of the date of this Agreement and is accurate in all respects as of the Closing Date as if made on the Closing Date; and 5.3.3 such other documents as the Seller may reasonably request for the purpose of (A) evidencing the accuracy of any representation or warranty of the Purchaser, (B) evidencing the performance by the Purchaser of, or the compliance by the Purchaser with, any covenant or obligation required to be performed or complied with by the Purchaser, (C) evidencing the satisfaction of any condition referred to in this Agreement, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated in this agreement. 5.4 POSSESSION. Simultaneously with such deliveries, Seller shall take all action necessary or appropriate to put Purchaser in actual possession and operating control of the Asset. 6. SELLER'S OBLIGATION PRIOR TO CLOSING. 6.1 SELLER'S USE OF ASSET PRIOR TO CLOSING. The Seller agrees that between the date of this Agreement and the Closing Date, the Seller will: 6.1.1 Not assign, sell, lease or otherwise transfer or dispose of the Asset. 7. CONDITIONS AND BEST EFFORTS. The Seller will use its best efforts to effectuate the transactions contemplated by this Agreement and to fulfill all the conditions of the obligations of the Seller under this Agreement, and will do all acts and things as may be required to carry out their respective obligations under this Agreement and to consummate and complete this Agreement. 8. COVENANTS OF PURCHASER PRIOR TO CLOSING. 8.1 CONDITIONS AND BEST EFFORTS. The Purchaser will use its best efforts to effectuate the transactions contemplated by this Agreement and to fulfill all the conditions of the Purchaser's obligations under this Agreement, and shall do all acts and things as may be required to carry out the Purchaser's obligations and to consummate this Agreement. 8.2 CONFIDENTIAL INFORMATION. If for any reason the sale of the Asset is not closed, the Purchaser will not disclose to third parties any confidential information received from the Seller in the course of investigating, negotiating and performing the transactions contemplated by this Agreement. 3 8.3 REVERSE-SPLIT OF PURCHASER'S STOCK. The Purchaser shall effect a 1-for-20 reverse stock split of the Purchaser's issued and outstanding common stock, options, warrants, and any other securities convertible into or that may be exchanged for options, warrants or common or preferred stock of the Purchaser, bringing the total issued and outstanding stock of the Purchaser to Nine Hundred Seventy Thousand Eight Hundred Ninety Nine (970,899) shares from Nineteen Million Four Hundred Seventeen Thousand Nine Hundred and Eighty One (19,417,981) shares. 9. SELLER'S REPRESENTATIONS AND WARRANTIES. The Seller represents and warrants to the Purchaser as follows: 9.1 SELLER'S AUTHORITY. Potential claims by certain third parties residing in Australia exist relative to whether the Seller holds good and marketable title to the Asset, whether the Asset is free and clear of restrictions on or conditions to transfer or assignment of the Asset, and whether the Asset is free and clear of liens, pledges, charges or encumbrances. With the exception of the foregoing, the Seller now has, and on the Closing Date will have, all requisite power and authority to sell and assign the Asset. 9.2 SELLER'S POWER AND AUTHORIZATION. The Seller has full authority to execute and deliver this Agreement and any other agreement to be executed and delivered by the Seller in connection herewith, and to carry out the transactions contemplated hereby. No other proceedings by the Seller will be necessary to authorize this Agreement or the carrying out of the transactions contemplated hereby. The Seller has consulted its own financial advisor, tax advisor and accountant, as necessary or desirable, as to matters concerning this Agreement. This Agreement constitutes a valid and binding Agreement of the Seller in accordance with its terms. 9.3 CONFLICT WITH OTHER AGREEMENTS, CONSENTS AND APPROVALS. With respect to (i) any applicable law, statute, rule or regulation, (ii) any contract to which the Seller is a party or may be bound, or (iii) any judgment, order, injunction, decree or ruling of any court or governmental authority to which the Seller is a party or subject, the execution and delivery by the Seller of this Agreement and any other agreement to be executed and delivered by the Seller in connection herewith and the consummation of the transactions contemplated hereby will not (a) result in any violation, conflict or default, or give to others any interest or rights, including rights of termination, cancellation or acceleration, or (b) require any authorization, consent, approval, exemption or other action by any court or administrative or governmental body which has not been obtained, or any notice to or filing with any court or administrative or governmental body which has not been given or done. 9.4 COMPLIANCE WITH LAW. Except as otherwise provided in Section 9.1 of this Agreement, the Seller's use of the Asset has been in compliance with all applicable federal, state, local or other governmental laws or ordinances, the non-compliance with which, or the violation of which, might have a material adverse affect on the Asset, the Assumed Liabilities or the financial condition, results of operations or anticipated business prospects of the Purchaser, and the Seller has received no claim or notice of violation with respect thereto. The Seller has obtained all material permits, licenses, franchises and other authorizations necessary for the use of the Asset. 4 9.5 TAX AND OTHER RETURNS AND REPORTS. (i) All federal, state, local and foreign tax returns and reports (including without limitation all income tax, social security, payroll, unemployment compensation, sales and use, excise, privilege, property, ad valorem, franchise, license and school) required to be filed by the Seller by the Closing ("Tax Returns") have been filed with the appropriate governmental agencies in all jurisdictions in which such returns and reports are required to be filed, and all such returns and reports properly reflect the taxes of the Seller for the periods covered thereby; and (ii) all federal, state and local taxes, assessments, interest, penalties, deficiencies, fees and other governmental charges or impositions, including those enumerated above with respect to the Tax Returns, which are called for by the Tax Returns, or which are claimed to be due from the Seller by notice from any taxing authority, or upon or measured by its properties, assets or income, have been properly accrued or paid by or at the Closing if then due and payable. 9.6 TITLE TO ASSET. Except as otherwise provided in Section 9.1, the Seller holds good and marketable title to the Asset, free and clear of restrictions on or conditions to transfer or assignment, and free and clear of liens, pledges, charges or encumbrances. 9.7 ASSET RIGHTS. 9.7.1 Except as otherwise provided in Section 9.1, no royalties or other amounts are payable by the Seller to other persons by reason of the Seller's ownership of the Asset. 9.7.2 Except as otherwise provided in Section 9.1, the Seller has obtained and delivered to the Purchaser all consents and approvals of third parties necessary to duly transfer to the Purchaser all of the Seller's rights, title and interest in and to the Asset. 9.8 LITIGATION. Except as otherwise provided in Section 9.1, the Seller has no knowledge of any claim, litigation, proceeding or investigation pending or threatened against the Seller that might result in any material adverse change in the condition of the Asset being conveyed under this Agreement. 9.9 ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the representations or warranties of the Seller contain or will contain any untrue statement of a material fact or will omit or misstate a material fact necessary in order to make statements in this Agreement not misleading. The Seller knows of no fact that has resulted in a material change in the Asset that has not been set forth in this Agreement or otherwise disclosed to the Purchaser. 10. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser represents and warrants as follows: 10.1 CORPORATE EXISTENCE. The Purchaser is now, and on the Closing Date will be, a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada, has all requisite corporate power and authority to enter into this Agreement and perform its obligations hereunder. 5 10.2 AUTHORIZATION. The Purchaser has full corporate authority to execute and deliver this Agreement and any other agreement to be executed and delivered by the Purchaser in connection herewith, and to carry out the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate and shareholder action. No other corporate proceedings by the Purchaser will be necessary to authorize this Agreement or the carrying out of the transactions contemplated hereby. This Agreement constitutes a valid and binding Agreement of the Purchaser, in accordance with its terms. The Purchaser has consulted its own financial advisor, tax advisor and accountant, as necessary or desirable, as to matters concerning this Agreement. 10.3 CONFLICT WITH OTHER AGREEMENTS, CONSENTS AND APPROVALS. With respect to (i) the articles of incorporation or bylaws of the Purchaser, (ii) any applicable law, statute, rule or regulation, (iii) any contract to which the Purchaser is a party or may be bound, or (iv) any judgment, order, injunction, decree or ruling of any court or governmental authority to which the Purchaser is a party or subject, the execution and delivery by the Purchaser of this Agreement and any other agreement to be executed and delivered by the Purchaser in connection herewith and the consummation of the transactions contemplated hereby will not (a) result in any violation, conflict or default, or give to others any interest or rights, including rights of termination, cancellation or acceleration, or (b) require any authorization, consent, approval, exemption or other action by any court or administrative or governmental body which has not been obtained, or any notice to or filing with any court or administrative or governmental body which has not been given or done. 10.4 ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the representations or warranties of the Purchaser contain or will contain any untrue statement of a material fact or will omit or misstate a material fact necessary in order to make the statements contained herein not misleading. 10.5 POST-CLOSING MATTERS. Immediately after the closing, the Purchaser shall: (a) enter into an employment agreement with Seller, the terms of which will be mutually agreed upon at that time. In connection with Seller's employment agreement, the Purchaser shall: 1) employ Seller as the President of the Purchaser; and 2) agree to pay Seller a mutually agreed upon salary; (b) appoint Seller to the Board of Directors of the Purchaser; and (c) commit on a "best efforts" basis, to raise capital in the amount of One Million Dollars ($1,000,000) for the future operations of the Purchaser's MPD. PROVIDED, HOWEVER, that if the Purchaser fails to raise capital in the amount of One Million Dollars ($1,000,000) for the future operations of the Purchaser's MPD on or by July 1, 2003, Seller may re-acquire the Asset from the Purchaser on terms and conditions to be mutually agreed upon(2) by the Purchaser and Seller. - --------------------- 2 In the event that the Purchaser fails to raise capital in the amount of One Million Dollars ($1,000,000) for the future operations of the Purchaser's MPD on or by July 1, 2003, and the Purchaser and Seller are unable to reach an agreement for the terms upon which the Asset may be re-acquired by Seller, the parties agree to submit the matter to arbitration in accordance with Section 15.8 of this Agreement. 6 11. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. The obligation of the Purchaser to purchase the Asset is subject to the fulfillment, prior to or at the Closing Date, of each of the following conditions, any one or portion of which may be waived in writing by the Purchaser: 11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER. The representations and warranties of the Seller contained herein and any other documents delivered by the Seller in connection with this Agreement shall be true and correct in all material respects at the Closing; and the Seller shall have performed all obligations and complied with all agreements, undertakings, covenants and conditions required by this Agreement to be performed or complied with by it or prior to the Closing. 11.2 CONDITIONS OF THE BUSINESS. There shall have been no material adverse change in the Asset prior to the Closing Date. 11.3 NO SUITS OR ACTIONS. Except as otherwise provided in Section 9.1, at the Closing Date no suit, action or other proceeding shall have been threatened or instituted to restrain, enjoin or otherwise prevent the consummation of this Agreement or the contemplated transactions. 12. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER. The obligations of the Seller to consummate the transactions contemplated by this Agreement are subject to the fulfillment, prior to or at the Closing Date, of each of the following conditions, any one or a portion of which may be waived in writing by the Seller; 12.1 REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER. All representations and warranties made in this Agreement by the Purchaser shall be true as of the Closing Date as fully as though such representations and warranties had been made on and as of the Closing Date, and the Purchaser shall not have violated or shall not have failed to perform in accordance with any covenant contained in this Agreement. 12.1.1 KNOWLEDGE OF THIRD PARTY CLAIMS. Purchaser acknowledges and understands that potential claims by third parties residing in Australia exist relative to whether the Seller holds good and marketable title to the Asset, whether the Asset is free and clear of restrictions on or conditions to transfer or assignment of the Asset, and whether the Asset is free and clear of liens, pledges, charges or encumbrances. 13. PURCHASER'S ACCEPTANCE. The Purchaser represents and acknowledges that it has entered into this Agreement on the basis of its own examination, personal knowledge and opinion of the value of the Asset. The Purchaser has not relied on any representations made by the Seller other than those specified in this Agreement. The Purchaser further acknowledges that the Purchaser takes the Asset in the condition existing on the date of this Agreement, except as otherwise provided in this Agreement. 7 14. INDEMNIFICATION AND SURVIVAL. 14.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made in this Agreement shall survive the Closing of this Agreement, except that any party to whom a representation or warranty has been made in this Agreement shall be deemed to have waived any misrepresentation or breach of representation or warranty of which such party had knowledge prior to Closing. Any party learning of a misrepresentation or breach of representation or warranty under this Agreement shall immediately give written notice thereof to all other parties to this Agreement. The representations and warranties in this Agreement shall terminate two (2) years from the Closing Date, and such representations or warranties shall thereafter be without force or effect, except any claim with respect to which notice has been given to the party to be charged prior to such expiration date. 14.2 SELLER'S INDEMNIFICATION. The Seller hereby agrees to indemnify and hold the Purchaser, its successors and assigns harmless from and against: (i) Any and all damages, losses, claims, liabilities, deficiencies and obligations of every kind and description, contingent or otherwise, arising out of or related to the operation of the Asset prior to the close of business on the day before the Closing Date, except for damages, losses, claims, liabilities, deficiencies and obligations of the Seller expressly assumed by the Purchaser under this Agreement or paid by insurance maintained by the Seller or the Purchaser, (ii) any and all damage or deficiency resulting from any material misrepresentation, breach of warranty or covenant, or nonfulfillment of any agreement on the part of the Seller under this Agreement, and (iv) any and all actions, suits, claims, proceedings, investigation, audits, demands, assessments, fines, judgments, costs and other expenses (including, without limitation, reasonable audit and attorneys fees) incident to any of the foregoing. If any claim is asserted against the Purchaser that would give rise to a claim by the Purchaser against the Seller for indemnification under the provisions of this Section, then the Purchaser shall promptly give written notice to the Seller concerning such claim and the Seller shall, at no expense to the Purchaser, defend the claim. PROVIDED, HOWEVER, that the Seller shall not be obligated to indemnify and hold the Purchaser, its successors and assigns harmless from and against damages, losses, claims, liabilities, deficiencies and obligations of any kind or description, contingent or otherwise, arising out of or related to claims against the Purchaser or the Asset as described in Section 9.1. 14.3 PURCHASER'S INDEMNIFICATION. The Purchaser agrees to defend, indemnify, and hold harmless the Seller from and against (i) any and all claims, liabilities and obligations of every kind and description arising out of or related to the Asset following Closing or arising out of the Purchaser's failure to perform obligations of the Seller assumed by the Purchaser pursuant to this Agreement; (ii) any and all damage or deficiency resulting from any material misrepresentation, breach of warranty or covenant, or nonfulfillment of any agreement on the part of the Purchaser under this Agreement, and (iii) any and all actions, suits, claims, proceedings, investigation, audits, demands, assessments, fines, judgments, costs and other expenses (including, without limitation, reasonable audit and attorneys fees) incident to any of the foregoing. 8 15. MISCELLANEOUS PROVISIONS. 15.1 NOTICES. All notices, requests, demands, claims, consents and other communications required or permitted under this Agreement shall be in writing. Any notice, request, demand, claim , communication or consent under this Agreement shall be deemed duly given if (and shall be effective two business days after) it is sent by certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below: If to Purchaser: Dtomi, Inc. 200 Ninth Avenue, Suite 220 Safety Harbor, Florida 34965 With a copy to: David M. Otto The Otto Law Group, PLLC 900 4th Ave., Suite 3140 Seattle, Washington 98164 If to Seller: Mr. John E. Simpson 2701 Salk Avenue Richland, WA 99352 or at any other address as any party may, from time to time, designate by notice given in compliance with this section. 15.2 TIME. Time is of the essence of this Agreement. 15.3 SURVIVAL. Any of the terms and covenants contained in this Agreement which require the performance of either party after the Closing shall survive the Closing and delivery of the Asset and the Shares. 15.4 WAIVER. Failure of either party at any time to require performance of any provision of this Agreement shall not limit the party's right to enforce the provision, nor shall any waiver of any breach of any provision be a waiver of any succeeding breach of any provision or a waiver of the provision itself for any other provision. 15.5 ASSIGNMENT. Except as otherwise provided within this Agreement, neither party hereto may transfer or assign this Agreement without the prior written consent of the other party. 15.6 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington, without giving effect to the conflicts of law principals thereof. 9 15.7 VENUE. This parties to this Agreement agree that any action on this Agreement shall be brought in a court of competent jurisdiction located in King County, Washington. 15.8 ARBITRATION. If at any time during the term of this Agreement any dispute, difference or disagreement shall arise upon or in respect of the Agreement, and the meaning and construction hereof, every such dispute, difference and disagreement shall be referred to a single arbiter agreed upon by the parties, or if no single arbiter can be agreed upon, an arbiter or arbiters shall be selected in accordance with the rules of the American Arbitration Association and such dispute, difference or disagreement shall be settled by arbitration in accordance with the then prevailing commercial rules of the American Arbitration Association, and judgment upon the award rendered by the arbiter may be entered in any court having jurisdiction thereof. 15.9 ATTORNEY FEES. In the event an arbitration, suit or action is brought by any party under this Agreement to enforce any of its terms, or in any appeal therefrom, it is agreed that the prevailing party shall be entitled to reasonable attorneys' fees to be fixed by the arbitrator, trial court and/or appellate court. 15.10 TITLES AND CAPTIONS. All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement. 15.11 ENTIRE AGREEMENT. This Agreement contains the entire understanding between and among the parties and supersedes any prior understandings and agreements among them respecting the subject matter of this Agreement. 15.12 CONSTRUCTION. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 15.13 PRIOR AGREEMENTS. This document is the entire, final and complete agreement of the parties pertaining to the to purchase of the Asset, and supersedes and replaces all prior or existing written and oral agreements between the parties or their representatives relating to the Asset. 15.14 MODIFICATIONS MUST BE IN WRITING. This Agreement may not be changed orally. All modifications of this Agreement must be in writing and must be signed by each party. 15.15 AGREEMENT BINDING. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto. 10 15.16 FURTHER ACTION. The parties hereto shall execute and deliver all documents, provide all information and take or forbear from all such action as may be necessary or appropriate to achieve the purposes of this Agreement. 15.17 GOOD FAITH, COOPERATION AND DUE DILIGENCE. The parties hereto covenant, warrant and represent to each other good faith, complete cooperation, due diligence and honesty in fact in the performance of all obligations of the parties pursuant to this Agreement. All promises and covenants are mutual and dependent. 15.18 COUNTERPARTS. This Agreement may be executed by facsimile and in several counterparts, and all so executed shall constitute one Agreement, binding on all the parties hereto even though all the parties are not signatories to the original or the same counterpart. 15.19 SAVINGS CLAUSE. If any provision of this Agreement, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of this Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. 11 IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above. SELLER: By: _/s/ JOHN SIMPSON_______________ Name: John Simpson PURCHASER: DTOMI, INC. By: _/s/ David M. Otto________________ Name: David M. Otto Title: Chairman of the Board of Directors 12 EXHIBIT A ASSIGNMENT OF PATENT RIGHTS This Assignment of Patent Rights (the "Assignment") is made and effective as of April ___, 2003 (the "Effective Date") by and between John Simpson, an individual ("Assignor"), and Dtomi, Inc., a Nevada corporation ("Assignee"). RECITALS WHEREAS, Assignor is the owner of that certain United States Patent attached hereto as EXHIBIT A and incorporated herein by this reference (collectively, the "Patent"); WHEREAS, Assignor and Assignee have entered into that certain Asset Purchase Agreement, attached hereto as EXHIBIT B, dated April ___, 2003, (the "APA") by which Assignor has agreed to sell, and Assignee has agreed to purchase, the Patent, and assume certain liabilities of Assignor (the "Liabilities"); and WHEREAS, pursuant to the APA, Assignor is obligated to transfer, and Assignee is entitled to receive all of Assignor's right, title, and interest in and to the Patent and all ownership interest in all patent rights associated with the Patent. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants and provisions of this Assignment, and other good and valuable considerations as further set forth in other agreements between the parties, the parties hereto agree as follows: 1. ASSIGNMENT. (a) As of the Effective Date, Assignor hereby sells, assigns, transfers and sets over to Assignee all of Assignor' right, title and interest in and to the Patent, including all common law rights, all goodwill and all claims for damages by reason of any past infringement and any other right or interest he may have in the Patent and all other patent applications, improvements, reissues and inventions arising therefrom, for Assignee's own use and enjoyment and the use and enjoyment of Assignee's successors, assigns and other legal representatives, to the end of the term for which said Patent is granted or reissued, as fully and entirely as the same would have been held and enjoyed by Assignor if this Assignment had not been entered into. Assignee hereby accepts the assignment of such rights, subject to the terms and conditions of this Assignment. (b) Upon Assignee's request, Assignor will, without charge to Assignee and at Assignor's sole cost and expense, sign all papers, take all lawful oaths and take all other actions necessary, desirable or reasonably appropriate to record such assignments and to secure and maintain the Patent in any and all countries and to vest free, clear and lien-free title in and to the Patent solely in Assignee. 13 (c) Assignor hereby agrees that a copy of this Assignment shall be deemed a full legal and formal equivalent of any assignment, consent to file or like document which may be required in any country for any purpose. 2. INDEMNITY. (a) Except as otherwise provided in the APA, Assignor agrees to indemnify and hold Assignee and his nominees, successors, assigns, affiliates, agents and employees, harmless of and from any and all liabilities, claims, causes of action, penalties, demands and expenses, of any kind or nature whatsoever to the extent arising out of, resulting from, relating to or incident to the Assignor's obligations or use of the Patent prior to and including the Effective Date and the incorrectness of any representation or warranty of Assignor contained in this Assignment, and all expenses related thereto, including, without limitation, court costs and attorneys' fees. (b) Assignee agrees to indemnify and hold Assignor and his nominees, successors, assigns, affiliates, agents and employees, harmless of and from any and all liabilities, claims, causes of action, penalties, demands and expenses, of any kind or nature whatsoever to the extent arising out of, resulting from, relating to or incident to Assignee's obligations or use of the Patent subsequent to the Effective Date and all expenses related thereto, including, without limitation, court costs and attorneys' fees. 3. REPRESENTATIONS AND WARRANTIES. Assignor represents and warrants to Assignee as follows: (a) Except as otherwise provided in the APA, the Patent is in full force and effect and entitled to all privileges and protections accorded to the Patent under applicable laws, Assignor is not in default under any terms of the Patent and the Patent has not been assigned, terminated,modified or amended; (b) Except as otherwise provided in the APA, Assignor holds free and clear title to the Patent, free from any lien, claim or defect against such title, and has the lawful right to convey all of his respective interests in the Patent to Assignee; and (c) Except as otherwise provided in the APA, Assignor's conveyance of his interest in the Patent to Assignee, the execution and delivery of this Assignment by Assignor, and the consummation of the transactions as contemplated hereby, does not and will not violate or result in a material violation of any provision of any existing law or regulation or any order, award or decree of any court, arbitrator or governmental authority, by which Assignor or the Patent are bound. 4. COUNTERPART AND FACSIMILE EXECUTION. This Assignment may be executed in one or more counterparts, each of which shall be deemed an original and together which shall constitute one and the same instrument. Executed copies of this Assignment transmitted by telecopier shall be valid and binding. 15 IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed and delivered as of the Effective Date. ASSIGNOR: -------------------------------------------- By: John Simpson STATE OF WASHINGTON ss COUNTY OF -------------------------- I certify that I know or have satisfactory evidence that JOHN SIMPSON is the person who appeared before me, and said person acknowledged that (he/she) signed this instrument, on oath stated that (he/she) was authorized to execute the instrument and acknowledged it to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. WITNESS my hand and official seal hereto affixed this _____ day of __ ________, 2003. ------------------------------------ Notary Public in and for the State of Washington, residing at: ----------------------------------. My commission expires_________. 16 IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed and delivered as of the Effective Date. ASSIGNEE: DTOMI, INC.: --------------------------------------------- By: David M. Otto Title: Chairman of the Board of Directors STATE OF WASHINGTON ss COUNTY OF -------------------------- I certify that I know or have satisfactory evidence that DAVID M. OTTO is the person who appeared before me, and said person acknowledged that (he/she) signed this instrument, on oath stated that (he/she) was authorized to execute the instrument and acknowledged it as the CHAIRMAN OF THE BOARD of DTOMI, INC. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. WITNESS my hand and official seal hereto affixed this _____ day of _________, 2003. ----------------------------------------- Notary Public in and for the State of Washington, residing at: ----------------------------------. My commission expires_________. EX-10.1 4 ex_10-1.txt EXHIBIT 10.1 ASSIGNMENT OF PATENT RIGHTS This Assignment of Patent Rights (the "Assignment") is made and effective as of July 18, 2003 (the "Effective Date") by and between Dtomi, Inc., a Nevada corporation ("Assignor"), and John Simpson, an individual ("Assignee"). RECITALS WHEREAS, Assignor is the owner of the air spring powered lowerable suspension assembly patent, Patent No. 6,530,580 (the "Patent"); and WHEREAS, Assignor had previously been assigned the Patent by Assignee by way of that certain Assignment of Patent Rights, attached hereto as EXHIBIT A, dated April 7, 2003, and that certain Asset Purchase Agreement, attached hereto as EXHIBIT B, dated April 7, 2003; and WHEREAS Assignor and Assignee have entered into that certain Mutual Release Agreement ("Mutual Release Agreement"), attached hereto as EXHIBIT C, dated July 18, 2003, terminating the rights, obligations, duties, and covenants created in that certain Asset Purchase Agreement; and WHEREAS, pursuant to the Mutual Release Agreement, Assignor is obligated to transfer, and Assignee is entitled to receive all of Assignor's right, title, and interest in and to the Patent and all ownership interest in all patent rights associated with the Patent. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants and provisions of this Assignment, and other good and valuable considerations as further set forth in other agreements between the parties, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 1. ASSIGNMENT. (a) As of the Effective Date, Assignor hereby, assigns, transfers and sets over to Assignee all of Assignor' right, title and interest in and to the Patent, including all common law rights, all goodwill and all claims for damages by reason of any past infringement and any other right or interest he may have in the Patent and all other patent applications, improvements, reissues and inventions arising therefrom, for Assignee's own use and enjoyment and the use and enjoyment of Assignee's successors, assigns and other legal representatives, to the end of the term for which said Patent is granted or reissued, as fully and entirely as the same would have been held and enjoyed by Assignor if this Assignment had not been entered into. Assignee hereby accepts the assignment of such rights, subject to the terms and conditions of this Assignment. 1 (b) Upon Assignee's request, Assignor will, without charge to Assignee and at Assignor's sole cost and expense, sign all papers, take all lawful oaths and take all other actions necessary, desirable or reasonably appropriate to record such assignments and to secure and maintain the Patent in any and all countries and to vest free, clear and lien-free title in and to the Patent solely in Assignee. (c) Assignor hereby agrees that a copy of this Assignment shall be deemed a full legal and formal equivalent of any assignment, consent to file or like document which may be required in any country for any purpose. 2. INDEMNITY. (a) Assignor agrees to indemnify and hold Assignee and his nominees, successors, assigns, affiliates, agents and employees, harmless of and from any and all liabilities, claims, causes of action, penalties, demands and expenses, of any kind or nature whatsoever to the extent arising out of, resulting from, relating to or incident to the Assignor's obligations or use of the Patent prior to and including the Effective Date and the incorrectness of any representation or warranty of Assignor contained in this Assignment, and all expenses related thereto, including, without limitation, court costs and attorneys' fees. (b) Assignee agrees to indemnify and hold Assignor and his nominees, successors, assigns, affiliates, agents and employees, harmless of and from any and all liabilities, claims, causes of action, penalties, demands and expenses, of any kind or nature whatsoever to the extent arising out of, resulting from, relating to or incident to Assignee's obligations or use of the Patent subsequent to the Effective Date and all expenses related thereto, including, without limitation, court costs and attorneys' fees. 3. REPRESENTATIONS AND WARRANTIES. Assignor represents and warrants to Assignee as follows: (a) The Patent is in full force and effect and entitled to all privileges and protections accorded to the Patent under applicable laws, Assignor is not in default under any terms of the Patent and the Patent has not been assigned, terminated, modified or amended; (b) Assignor holds free and clear title to the Patent, free from any lien, claim or defect against such title, and has the lawful right to convey all of his respective interests in the Patent to Assignee; and (c) Assignor's conveyance of its interest in the Patent to Assignee, the execution and delivery of this Assignment by Assignor, and the consummation of the transactions as contemplated hereby, does not and will not violate or result in a material violation of any provision of any existing law or regulation or any order, award or decree of any court, arbitrator or governmental authority, by which Assignor or the Patent are bound. 2 4. COUNTERPART AND FACSIMILE EXECUTION. This Assignment may be executed in one or more counterparts, each of which shall be deemed an original and together which shall constitute one and the same instrument. Executed copies of this Assignment transmitted by telecopier shall be valid and binding. IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed and delivered as of the Effective Date. ASSIGNOR: DTOMI, INC.: ------------------------------------------- By: David M. Otto Title: Chairman of the Board of Directors STATE OF WASHINGTON ss COUNTY OF -------------------------- I certify that I know or have satisfactory evidence that DAVID M. OTTO is the person who appeared before me, and said person acknowledged that (he/she) signed this instrument, on oath stated that (he/she) was authorized to execute the instrument and acknowledged it as the CHAIRMAN OF THE BOARD of DTOMI, INC. to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. WITNESS my hand and official seal hereto affixed this _____ day of __ ________, 2003. ----------------------------------------------------- Notary Public in and for the State of Washington, residing at: ----------------------------------. My commission expires_________. 3 IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed and delivered as of the Effective Date. ASSIGNEE: -------------------------------------- By: John Simpson STATE OF WASHINGTON ss COUNTY OF -------------------------- I certify that I know or have satisfactory evidence that JOHN SIMPSON is the person who appeared before me, and said person acknowledged that (he/she) signed this instrument, on oath stated that (he/she) was authorized to execute the instrument and acknowledged it to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. WITNESS my hand and official seal hereto affixed this _____ day of _________, 2003. --------------------------------------------------- Notary Public in and for the State of Washington, residing at: ----------------------------------. My commission expires_________. 4 EX-10.2 5 ex_10-2.txt EXHIBIT 10.2 MUTUAL RELEASE AND TERMINATION AGREEMENT This Mutual Release and Termination Agreement (the "Agreement") is made and effective as of July 18, 2003 (the "Effective Date") by and between Dtomi, Inc. ("Dtomi"), a Nevada corporation, and John Simpson ("Simpson"), an individual, (collectively, the "Parties"). RECITALS WHEREAS, the Parties entered into an Asset Purchase Agreement (the "APA") dated as of April 7, 2003; and WHEREAS, Dtomi is the owner of the air spring powered lowerable suspension assembly patent, Patent No. 6,530,580 (the "Patent"); and WHEREAS, the Parties have determined to terminate the APA. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 1. TERMINATION OF APA. The Parties agree that, effective immediately, the APA is terminated. 2. ASSIGNMENT OF PATENT. Dtomi agrees to assign its right, title, and interest in and to the Patent, and all ownership interest in all patent rights associated with the Patent, pursuant to that certain Assignment of Patent Rights entered into by the Parties on July 18, 2003, to Simpson. 3. ENTIRE AGREEMENT. This Agreement supercedes all prior discussions, representations, warranties and agreements, both written and oral, among the Parties with respect to the subject matter herein, and contains the sole and entire agreement among the Parties with respect to the subject matter herein. No prior drafts of this Agreement and no words or phrases from any such prior drafts shall be admissible into evidence in any action, suit or other proceeding involving this Agreement. 4. GOVERNING LAW. This Agreement shall be interpreted under the laws of the State of Washington without reference to Washington conflicts of law provisions. 5. VENUE. The parties to this Agreement agree that any action on this Agreement shall be brought in a court of competent jurisdiction located in King County, Washington. 1 6. ARBITRATION. If at any time during the term of this Agreement any dispute, difference or disagreement shall arise upon or in respect of the Agreement, and the meaning and construction hereof, every such dispute, difference and disagreement shall be referred to a single arbiter agreed upon by the parties, or if no single arbiter can be agreed upon, an arbiter or arbiters shall be selected in accordance with the rules of the American Arbitration Association and such dispute, difference or disagreement shall be settled by arbitration in accordance with the then prevailing commercial rules of the American Arbitration Association, and judgment upon the award rendered by the arbiter may be entered in any court having jurisdiction thereof. 7. ATTORNEY FEES. In the event an arbitration, suit or action is brought by any party under this Agreement to enforce any of its terms, or in any appeal therefrom, it is agreed that the prevailing party shall be entitled to reasonable attorneys' fees to be fixed by the arbitrator, trial court and/or appellate court. 8. COUNTERPARTS. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Executed copies of this Agreement transmitted by telecopier shall be valid and binding. 9. TITLES AND CAPTIONS. All article, section and paragraph titles or captions contained in this Agreement are for convenience only and shall not be deemed part of the context nor affect the interpretation of this Agreement. 10. CONSTRUCTION. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. 2 IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above. By: ________________________________ Name: John Simpson DTOMI, INC. By: ________________________________ Name: David M. Otto Title: Chairman of the Board of Directors EX-10.3 6 ex_10-3.txt EXHIBIT 10.3 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. 1 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 agreed to in writing by the parties, and such writing shall constitute a valid amendment to this Agreement. 6. LICENSEE'S DUTY TO MAINTAIN THE PATENT AND PAY PATENT EXPENSES. Licensee agrees to maintain the Patent and pay all patent fees and expenses required to so maintain the Patent. 7. REPRESENTATIONS AND WARRANTIES. 7.1 LICENSEE'S DUTY NOT TO DISCLOSE. Licensee acknowledges, represents, and warrants that the Patent is the sole, proprietary and confidential property of Licensor. Accordingly, Licensee shall not, without the prior express written consent of Licensor, disclose or reveal to any third party or utilize for its own benefit, other than pursuant to this Agreement, any such Patent information, provided that such information was not previously known to Licensee or to the general public. Licensee further agrees to take all reasonable precautions to preserve the confidentiality of the Patent and shall assume responsibility for ensuring that its employees, officers, subsidiaries, affiliates, and sub-licensees will similarly preserve this information against any disclosure to any third parties. The provisions of this clause shall survive termination of this Agreement. 2 7.2 AUTHORITY TO GRANT. Licensor represents and warrants that it has the right and power to grant the exclusive license granted herein and that there are no other agreements with any other party in conflict with such grant. 7.3 LICENSEE'S COMMERCIALIZATION EFFORTS. Licensee represents that it has or will hereafter acquire or develop the business operations that will enable it to reasonably commercialize the Licensed Products throughout the Licensed Territory, and that it shall use its best efforts to promote the distribution and sale of such Licensed Products in the Licensed Territory in good faith. Licensee further agrees that it will, in good faith and with reasonable diligence, conduct all operations, including manufacturing, marketing, distribution and sale of Licensed Products, in accordance with the highest standards of business customs of the industry and that it will endeavor to sell Licensed Products throughout the Licensed Territory, utilizing its skill and resources in such effort to the extent that high standards of business practice and judgment dictate. (a) Licensee represents that it will meet ninety percent (90%) of its quarterly gross revenue projections ("Gross Revenue Projections") as provided in EXHIBIT C herein. 8. COMPLIANCE WITH LOCAL LAWS. In the event that the Patent is to be used in foreign countries by Licensee, Licensee shall obtain all necessary permits required by the laws of that particular country. Licensee shall take all steps necessary for obtaining from the appropriate governmental authority all approvals and permits necessary to carry out the terms of this Agreement. (a) Licensor shall cooperate with Licensee relative to supplying any information and material necessary for the approvals and consents of the appropriate governmental authority. 9. TERMINATION. Licensor shall have the right to immediately terminate this Agreement and to pursue any remedies available in law or in equity in the event that Licensee shall: (a) fail to obtain or maintain product liability insurance in the amount and of the type provided for herein; (b) file a petition in bankruptcy or be adjudicated a bankrupt or insolvent, or make an assignment for the benefit of creditors or an arrangement pursuant to any bankruptcy law, or discontinue or dissolve its business, or if a receiver is appointed for Licensee or for Licensee's business and such receiver is not discharged within 30 days; (c) fail to observe or perform any of the other covenants, conditions, or obligations of this Agreement; provided, however, any such failure shall not constitute a default hereunder, unless otherwise expressly provided herein, unless and until Licensor shall have given Licensee notice thereof and a period of 10 days shall have elapsed, during which period Licensee may correct or 3 cure such failure, upon failure of which a default shall be deemed to have occurred hereunder without further notice or demand of any kind being required. (d) fail, after a full quarter has passed subsequent to the completion of the financing described by EXHIBIT D herein (the "Financing"), to meet 90% of its gross revenue projections for that following quarter. By way of illustration, if the Financing is completed in November of 2003, Licensor shall have the right to terminate this Agreement if Licensor fails to meet ninety percent (90%) of its gross revenue projections for the first quarter of 2004. 10. EFFECTS OF EXPIRATION OR TERMINATION. (a) Upon the expiration or termination of this Agreement, all rights granted to Licensee under this Agreement shall forthwith terminate and immediately revert to Licensor. (b) Upon the expiration or termination of this Agreement, Licensor may require that Licensee transmit to Licensor, at no cost, all promotional and research material relating to the Patents. 11. INDEMNIFICATION. (a) Licensee agrees to defend, indemnify and hold Licensor, and its officers, directors, agents and employees, harmless against all costs, expenses and losses (including reasonable attorneys' fees and costs) incurred through claims of third parties against Licensor based on the commercialization of the Licensed Products, including, but not limited to, actions founded on product liability or Licensee's breach of this Agreement, or negligence. (b) Licensor agrees to defend, indemnify and hold Licensee, and its officers, directors, agents and employees, harmless against all costs, expenses and losses (including reasonable attorneys' fees and costs) incurred through claims of third parties against Licensee based on a breach by Licensor of this Agreement. 12. INSURANCE. Licensee shall, throughout the term of this Agreement, obtain and maintain at its own cost and expense, from a qualified insurance company licensed to do business in Washington and having a Moody's Rating of "B+" or better, standard product liability insurance naming Licensor as additional insured. Such policy shall provide protection against all claims, demands and causes of action arising out of any defects or failure to perform, alleged or otherwise, of the Licensed Products or any material used in connection therewith or any uses thereof. The amount of coverage shall be $1,000,000. The policy shall provide for 30 days' notice to Licensor from the insurer by registered or certified mail, return receipt requested, in the event of any modification, cancellation or termination thereof. Licensee agrees to furnish Licensor a certificate of insurance evidencing same within 30 days after execution of this Agreement, if practical, and, in no event shall Licensee commercialize the Patent or Licensed Products prior to receipt by Licensor of such evidence of insurance. 4 13. NOTICES. (a) Any notice required to be given pursuant to this Agreement shall be in writing and mailed by certified or registered mail, return receipt requested to the following: If to Licensor: John Simpson 2468-3 Enterprise Road Clearwater, Florida 33763 If to Licensee: John Thatch 200 Ninth Avenue North, Suite 200, Safety Harbor, Florida 34695 with copy to: David M. Otto The Otto Law Group 999 Third Avenue, Suite 3210 Seattle, WA 98104 Telephone: (206) 262-9545 Telecopier: (206) 262-9546 (b) Either party may change the address to which notice or payment is to be sent by written notice to the other party pursuant to the provisions of this paragraph. (c) If, during the Term of this Agreement, Licensee becomes aware that one or more third parties are infringing or are threatening to infringe the Patents or Licensed Products licensed hereunder, Licensee shall immediately report such information to Licensor and shall provide in such report all details in Licensee's knowledge or possession concerning the kind and character of the infringement and any other pertinent information that Licensee may have ("Notice of Infringement"). Within 10 days of Notice of Infringement or within 10 days after Licensor became aware that one or more third parties are infringing or are threatening to infringe the Patents licensed hereunder, Licensor shall, in its sole judgment, be satisfied that there exists a reasonable likelihood of infringement, Licensor may, at its option, demand that Licensee take such steps, including notification, to place the putative infringer on notice of Licensor's claims or assist Licensor in pursuing other legal or equitable remedies. The form of the notification and the manner and nature of any communications between Licensor and the alleged infringer shall be within the sole discretion of Licensor. 5 14. DEFENSE OF THIRD-PARTY CLAIM. In the event of the institution of any suit by a third party against Licensor or Licensee for patent infringement involving the manufacture, use, sale, distribution, marketing or other utilization of the Patents or the Licensed Products, the party sued shall promptly notify the other party in writing. Licensee shall be obligated to provide Licensor the first right to defend and shall assist Licensor in the defense, settlement or payment of judgments or decrees arising from any such action. Except in the case of a conflict of interest, Licensee and Licensor shall assist one another and cooperate in any such litigation at the other's request without expense. 15. CONFIDENTIAL INFORMATION. 15.1 SCOPE. Licensor and Licensee agree that they shall safeguard Confidential Information, as defined herein, which they receive from the other party. 15.2 DEFINITION OF CONFIDENTIAL INFORMATION. For the purposes of this License Agreement, "Confidential Information" shall mean any information concerning the Patents or the Licensed Products which is furnished now or in the future, by or on behalf of Licensor in accordance with the provisions of this Agreement. Without limiting the generality of the foregoing, Confidential Information includes, but is not limited to, the following types of information and other information of a similar nature (whether or not reduced to writing or still in development, and whether or not separately marked by Licensor as confidential): designs, concepts, drawings, ideas, inventions, specifications, techniques, discoveries, models, data, source code, object code, documentation, diagrams, flow charts, research, development, processes, procedures, know-how, new product or new technology information, marketing techniques and materials, marketing plans, timetables, strategies and development plans (including prospective trade names or trademarks) and other information related to customers, pricing policies and financial information. "Confidential Information" does not include information which: (i) is or becomes generally available to the public other than as a result of a disclosure by either party, or (ii) becomes available to Licensee on a nonconfidential basis from a source other than Licensor, provided that such source is not bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation to either party with respect to such information. 16. CHOICE OF LAW. This Agreement and the performance of the parties hereunder shall be construed and governed in accordance with the laws of the State of Washington. 17. ARBITRATION. 17.1 Any controversy, dispute, or claim arising out of or relating to this Agreement, including specifically the breach thereof, shall be settled by binding arbitration in Seattle, Washington. 17.2 PROCEDURE. Any party to this Agreement can initiate arbitration pursuant to this Agreement by serving notice on the other party of intent to arbitrate. The notice shall specify with particularity the claims or issues that are to be arbitrated. Within ten days of receipt of the notice by all parties, the parties shall obtain a list of available arbitrators from the local office of the Judicial Arbitration and Mediation Service ("JAMS") and select a mutually acceptable 6 arbitrator. If the parties are unable to agree on an arbitrator within ten days, any party may petition the Presiding Judge of the Superior Court for King County to select a single arbitrator from the JAMS list. The Parties shall have the discovery rights available under Washington's Civil Rules, subject to the limitation that each side shall be limited to no more than five interrogatories and five depositions unless, upon a showing of good cause, the Party can convince the arbitrator that more interrogatories or depositions should be permitted. All discovery must be concluded within 60 days of the selection of an arbitrator. The arbitration hearing must be concluded within 30 days of the close of discovery and it will be conducted in accordance with Washington Rules of Evidence. The arbitrator's final decision shall be rendered within ten days of the final hearing day. Judgment upon the arbitrator's final award may be entered in any court having jurisdiction thereof. 17.3 COSTS AND FEES. The parties shall bear in equal shares the arbitrator's fees and costs. The prevailing party in the arbitration shall be awarded its reasonable attorneys' fees and all costs, other than the arbitrator's fees and costs. For the purposes of determining who is the prevailing party, each side will submit to the other a single written offer of settlement ten days prior to the start of the arbitration hearing and the Party whose offer most closely approximates the arbitrator's award shall be deemed the prevailing Party for the purpose of awarding attorneys' fees. 18. AGREEMENT BINDING ON SUCCESSORS. This License Agreement shall be binding on and shall inure to the benefit of the parties hereto, and their heirs, administrators, successors and assigns. Licensor shall be free to assign its rights or obligations under this Agreement at any time without the approval or consent of Licensee or any other person or party. 19. WAIVERS. No waiver by either party of any default under this Agreement shall be deemed as a waiver of any prior or subsequent default of the same or other provisions of this Agreement. 20. SEVERABILITY. If any provision hereof is held invalid or unenforceable by a court of competent jurisdiction, such invalidity shall not affect the validity or operation of any other provision and such invalid provision shall be deemed to be severed from this Agreement. 21. REPRESENTATION BY COUNSEL. This Agreement is the result of negotiation between the parties, who acknowledge that they have been represented by counsel during such negotiation; accordingly, this Agreement shall not be construed for or against either party regardless of which party drafted this Agreement or any portion thereof. 22. COMPLETE AGREEMENT. This Agreement constitutes the entire understanding of the parties, revokes and supersedes all prior agreements between the parties, and is intended as a final expression of their agreement. It shall not be modified or amended, except in writing signed by the parties hereto and specifically referring to this Agreement. This Agreement shall take precedence over any other documents that may be in conflict therewith. 23. CAPTIONS. The captions used in this Agreement are for convenience only, and are not to be used in interpreting the obligations of the parties under this Agreement. 24. COUNTERPARTS. This Agreement may be executed in counterparts. Each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument. 7 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have each caused to be affixed hereto its or his/her hand and seal as of the date hereof. LICENSOR: By ------------------------------------------- Name ------------------------------------------- Title ------------------------------------------- LICENSEE: By ------------------------------------------- Name ------------------------------------------- Title ------------------------------------------- 8 EXHIBIT A - ------------------------------------------------------------------------------ UNITED STATES PATENT 6,530,580 SIMPSON MARCH 11, 2003 - ------------------------------------------------------------------------------ Suspension assembly related application ABSTRACT A lowerable suspension assembly for the deck of a vehicle is elevated and lowered by air springs between a travel position when the deck is horizontally disposed and a loading and unloading position when the deck is inclined and one end is in contact with a supporting ground surface.
Inventors: SIMPSON; JOHN EDWARD (5 Silverwattle Ct., Tallai, Queensland 4213, AU) Appl. No.: 707282 Filed: NOVEMBER 6, 2000 CURRENT U.S. CLASS: 280/6.151; 280/43.12; 280/43.17 INTERN'L CLASS: B60P 001/18 FIELD OF SEARCH: 280/6.151,43,43.11,43.12,43.17,124.129,124.133 180/209 414/495
- ----------------------------------------------------------------------------------------- REFERENCES CITED [REFERENCED BY] - ----------------------------------------------------------------------------------------- U.S. PATENT DOCUMENTS - ----------------------------------------------------------------------------------------- 2957594 Oct., 1960 Evans 214/506. - ------- 3044646 Jul., 1962 Sperow. - ------- 3113686 Dec., 1963 Sundin. - ------- 3214185 Oct., 1965 Mason et al. 280/6. - ------- 4132432 Jan., 1979 Raidel 280/711. - ------- 4619578 Oct., 1986 Routledge 414/498. - ------- 4693486 Sep., 1987 Pierce et al. 280/80. - ------- 4749210 Jun., 1988 Sugasawa 280/707. - ------- 4934733 Jun., 1990 Smith et al. 280/711. - ------- 4966387 Oct., 1990 White, IV 280/712. - ------- 5366237 Nov., 1994 Dilling et al. 280/711. - ------- 5540322 Jul., 1996 Foster 198/750. - ------- 5560639 Oct., 1996 Nowell et al. 280/704. - -------
9
- ------------------------------------------------------------------------------------ FOREIGN PATENT DOCUMENTS - ------------------------------------------------------------------------------------ WO 9000124 Jan., 1990 DE 1/64. 0645293 Mar., 1995 EP 3/20. 2252232 Jun., 1975 FR 1/18. WO 9311953 Jun., 1993 WO 11/26.
PRIMARY EXAMINER: Dickson; Paul N. ATTORNEY, AGENT OR FIRM: Bourque & Associates, P.A. - ------------------------------------------------------------------------------ PARENT CASE TEXT - ------------------------------------------------------------------------------ RELATED APPLICATION This application is a continuation-in-part of U.S. patent application Ser. No. 09/310,290 which was filed May 12, 1999 now abandoned. - ------------------------------------------------------------------------------ CLAIMS - ------------------------------------------------------------------------------ What is claimed is: 1. A lowerable suspension system for a vehicle deck comprising; (a) a swing arm mounting a road wheel having a first end adapted for pivotal connection to the side of a vehicle deck, (b) a tower connected to the vehicle deck adjacent a central position of the swing arm, (c) a shackle arm pivotably connected to a second end of the swing arm and the deck, said shackle arm comprising two links joined by a neutral pivotal connection which are pivotably connected to the deck and to the second end of the swing arm, (d) an air spring adapted to be interposed between the tower and the central portion of the swing arm, the arrangement and construction being such that in a first position with the air spring fully inflated the vehicle deck is horizontally disposed for normal travel and in a second position with the air spring deflated the deck is in a lowered position enabling loading and unloading to and from the deck from the ground to take place. 2. A lowerable suspension system as claimed in claim 1 wherein the swing arm and the links are cranked. 3. A lowerable suspension arm as claimed in claim 2 wherein the cranks of the links are opposed. 4. A lowerable suspension system as claimed in claim 1 wherein the medial portion of the swing arm provides a seat for a lower end of the air spring. 10 5. A suspension system as claimed in claim 1 wherein first and second ends of the swing arm are inclined with respect to one another at an angle between 145 and 155 degrees. 6. A suspension arm as claimed in claim 2 wherein the first and second links of the shackle arms are substantially arcuate. 7. A suspension arm as claimed in claim 1 wherein the tower provides a contact mounting surface for the top surface of the air spring is inclined at between 5 to 12 degrees from the plane of the deck. 8. A vehicle comprising a chassis and deck, a lowerable suspension system as claimed in claim 1 and coupling means for attachment to a driver vehicle said attachment means including a pivotal connection between the driver vehicle, and means for locking and releasing the pivotal connection. - ------------------------------------------------------------------------------ DESCRIPTION - ------------------------------------------------------------------------------ This invention relates to a suspension assembly for a vehicle. The invention also extends to a suspension assembly and chassis for a vehicle and a vehicle incorporating these features. This invention relates particularly but not exclusively to a suspension assembly for a low loading truck, e.g., which permits lowering of a load platform towards the ground for loading/unloading purposes. The load platform is then raised to the appropriate level during normal ride and travel of the vehicle. It will be convenient to hereinafter describe the invention with reference to this example application, however it is to be clearly understood that it is capable of broader application. Trucks typically have a chassis mounted on four or more wheels. An operator's cabin is mounted on the chassis towards the front of the vehicle and a load platform is mounted on the rear of the chassis. Typically a fuel driven engine, e.g., a diesel engine, drives steerable front wheels to move the vehicle. Typically forklifts and other lifting devices are used for lifting loads on to the elevated load platform/tray of these trucks. This requires a large amount of work as the load platform is generally positioned a substantial height above the support surface. Further the lifting and lowering operation is a fairly hazardous operation particularly for heavy articles. Some attempts have been made to modify trucks to ease or facilitate the loading operation. For example some trucks have tilt down tail portion which can be used to load articles on to the support surface. Articles to be loaded are pushed up or down the inclined tail portion to load the goods on to the load platform. The tail portion is then raised for normal travel and use of the truck. 11 Other attempts to address this problem of which the applicant is aware provide part of the load platform as an elevator such that articles may be loaded on to the elevator adjacent ground level and subsequently elevated by the elevator to the level of the load platform. The articles may then be transferred horizontally to any desired part of the load platform. Whilst such arrangements do provide some means for raising the load to load platform they do not provide a loading tray which may be readily disposed adjacent ground level to facilitate loading or unloading which is preferred. Clearly it would be advantageous if a contrivance could be provided which enabled the load platform to be lowered for loading/unloading and then raised to its normal height for normal travel of the vehicle. According to the present invention there is provided a lowerable suspension system for a vehicle deck comprising; (a) a swing arm mounting a road wheel having a first end adapted for pivotal connection to the side of a vehicle deck, (b) a tower connected to the vehicle deck adjacent a central position of the swing arm, (c) a shackle arm pivotably connected to a second end of the swing arm and the deck, said shackle arm comprising two links joined by a neutral pivotal connection which are pivotably connected to the deck and to the second end of the swing arm, (d) an air spring adapted to be interposed between the tower and the central portion of the swing arm, the arrangement and construction being such that in a first position with the air spring fully inflated the vehicle deck is horizontally disposed for normal travel and in a second position with the air spring deflated the deck is in a lowered position enabling loading and unloading to and from the deck from the ground to take place. The swing arm and the links can be cranked. The cranks of the links can be opposed. The medial portion of the swing arm provides a seat for a lower end of the air spring. First and second ends of the swing arm can be inclined with respect to one another at an angle between 145 and 155 degrees. The first and second links of the shackle arms can be substantially arcuate. Wherein the tower which provides a contact mounting surface for the top surface of the air spring is inclined at between 5 to 12 degrees from the plane of the deck. 12 According to a further aspect of the present invention there is provided a lowerable suspension system aforesaid and coupling means for attachment to a driver vehicle said attachment means including a pivotal connection between the driver vehicle, and means for locking and releasing the pivotal connection. A chassis and suspension assembly and a vehicle in accordance with this invention may manifest itself in a variety of forms. It will be convenient to hereinafter describe in detail several preferred embodiments of the invention with reference to the accompanying drawings. The purpose of providing this detailed description is to provide an enabling disclosure. It is to be clearly understood however that the specific nature of this description does not supersede the generality of the preceding broad description in the drawings: FIG. 1 is a side view of a typical embodiment of the invention in a normal travelling position; FIG. 2 is a side view similar to FIG. 1 but with the suspension means retracted to a loading attitude; FIG. 3 is a plan view of the embodiment of the invention illustrated in FIG. 1 and shown partially cut-away; FIGS. 4 and 5 correspond to FIGS. 1 and 2 but illustrate the operation of the suspension components; FIG. 6 is a similar view to FIG. 5 but shows the load platform further lowered by pivoting about its connection with the operators cabin; FIG. 7 illustrates the pivotal connection between existing and new chassis rails; FIG. 8 is a cut-away perspective view of a suspension and wheel assembly; FIG. 9 is a side view of an alternate fixed chassis form of the invention; FIG. 10 is a top plan view is a suspension assembly and part of a chassis in accordance with another embodiment of the invention in a sprung raised position; FIG. 11 is a side view of the suspension assembly of FIG. 10; FIG. 12 is a side view of the suspension assembly of the other (inner side) of the chassis rail; FIGS. 13 and 14 are enlarged views of the suspension assembly of FIG. 10 taken from opposite sides of a chassis side rail with the road wheel removed; and FIGS. 15 and 16 are side views from opposite sides of a chassis side rail with the suspension assembly in a lowered position. In both cases the position of the road wheel is shown in broken outline. 13 The truck 10 illustrated in FIG. 1 is configured as a low loading truck according to the present invention. The truck has steerable driven front wheels 11 and a load platform 12 supported by rear chassis rails 13. These rails 13 provide trunnion mountings 14 for respective trailing suspension arms 15 pivotally suspended from the trunnion mountings 14. The arms 15 support wheel mountings 16 at their outer ends on which the rear wheels 17 are supported. The load platform 12 extends rearwardly from the operators cabin 20 of a conventional four wheel drive vehicle such as a truck or utility, both of which are referred to as a truck herein, in which the chassis 19 rearwardly of the cabin 20 along with the rear wheel drive has been removed. The removed portion of the chassis 19 is replaced by the loading platform 12 such that only the operators cabin including the front suspension 21 supporting the steerable front wheels 11 and the engine remains in another possible arrangement (not shown) the cabin can be at the rear of the loading platform. The new chassis rails 13 are interconnected at their front ends to a cross-member 22 which mounts pivotally at 25 to a corresponding cross-member 26 fixed to the rear ends of the cut-away chassis rails 19. A hydraulic ram 27 controls the pivotal movement between the cross-members 22 and 26 and a further ram 28 controls the operation of locking pins 29 which extend laterally through apertures 30, in brackets mounted on the respective cross-members 22 and 26, when the vehicle 10 is in its normal travelling attitude. In this embodiment the load platform is supported by a pair of wheels at each side of the platform 12. However it could be supported by a single wheel at each side if desired or multiple wheels. As illustrated the opposed chassis rails 13 are interconnected by transverse members 34 which extend across the load platform 12 adjacent the location of the trunnion mountings 14 from the suspension arms 15. The transverse members 34 provide lateral stiffness to the trunnion mountings. It will be seen that the arms 15 lie closely adjacent the outside face of the respective chassis rails 13 and support the wheels 17 with minimum clearance from the arm 15 so that the overall width of the load platform adjacent the wheels may be maximised while keeping the overall width across the rear wheels within legal limits. Each trailing arm 15 independently pivotable about its trunnion mounting 14 and may pivot from a normal sprung or raised driving position, as shown in FIG. 1 to a retracted or lowered position, as shown in FIG. 2, at which the load platform 12 is lowered between the wheels 17 towards the ground. Referring to FIG. 8 it will be seen that each trailing arm 15 is supported by an air spring assembly 35 supported at its upper end by a tower 36 fixed to the chassis rail 13 and on a platform 38 on the arm 15 at its lower end in front of the wheel 17. The air spring 35 is inflated to elevate the load platform 14 to its operative position and provides a resilient support during the elevated travelling position. The air spring 35 is supplied with air from a storage tank 40 having sufficient storage capacity to provide quick inflation of all air springs and elevation of the load platform 14 from an on ground position to a travelling position. As an alternative to the air spring 35 a mechanical or hydraulic receprocable device may be employed. 14 An air compressor 41 is mounted in the engine bay of the operators cabin 20 for recharging the tank 40 as is the hydraulic pump for the rams 27 and 28. A further two stage hydraulic ram may be connected between the tower 36 and the platform 38 to provide additional lift for quickly elevating the load platform and for providing a back-up support for the load platform. As an alternative to hydraulic rams or air, mechanical or other hydraulic systems may be adopted. Controls for the air supply to the air bags 35 and for the hydraulic fluid supply for the rams are located in the operators cabin 20 and if desired duplicate controls may be provided for operation externally of the cabin 20. A fuel tank 45 and the air storage tank 40 are mounted in the space immediately at the front of the load platform 12. As illustrated in FIGS. 2 and 6, the load platform 12 may be lowered to an inclined loading position by retraction of the rear suspension means 15. The load platform 12 may be lowered to a horizontal on-ground loading position by retraction of the rear suspension means 15 and operation of the hydraulic rams 27 and 28 to pivot the load platform relative to the operators cabin 20. The embodiment 50 illustrated in FIG. 9 has a fixed connection 51 between the load platform 52 and the operators cabin 53. However in this embodiment the rear chassis rails 54 are stepped downwardly from the original chassis rails 56 of the operators cabin 57 so that the retraction of the suspension means 58 will pivot the load platform 52 about the front wheels and place the platform 52 close to the ground. This embodiment may be more suited to a relative short wheel base vehicle such as a utility. The air springs 60 of this embodiment are two part single or double action air springs having a relatively short displacement low stiffness suspension portion 63 and a relatively large displacement high stiffness portion 64. Each pneumatic spring assembly 60 is connected between the respective trailing arm 61 and an upper mounting 65 supported by the chassis rails 54, such that when the large displacement portion is deflated, the platform 52 is retracted to move downwardly into engagement with the ground or into close proximity therewith. For travelling purposes, the large displacement high stiffness pneumatic spring 64 is inflated so that the platform 52 is elevated to a travelling position in which conventional springing will be provided by the small displacement low stiffness portion 63. Separate pneumatic controls are provided in the drivers cabin for the pneumatic spring assemblies so that both the stiffness of the ride and the height adjustment position may be selectively and independently varied to suit the operating conditions. Variations in air pressures will vary the ride and height From the above it will be seen that a conventional four wheel drive truck or utility may be readily converted to a low loading configuration as per the above described embodiments. Suitably the chassis rails, trunnion mountings, trailing arms and suspension units are provided as standard components, such that a variety of four wheel drive vehicles may be readily modified using standard off the shelf components which may be duplicated or used in multiples to accommodate the applied loads expected. For this purpose these components are selected to support the load platform of a four wheel drive utility and thus must be used in multiples for 15 larger vehicles. This will facilitate cost effective conversion of four wheel drive utilities or trucks to front wheel drive low loading vehicles. In the embodiment illustrated in FIGS. 1 to 8, the hydraulic rams 27 are not fully retracted in their normal travelling position such that they may be further retracted to elevate the front end of the substitute load platform 12. This may be accompanied by a further elevation of the back of the load platform by the rear suspension to make it parallel to the ground but at a greater height than the normal travelling position so that a high ground clearance position may be provided. With respect to FIGS. 10 to 16 of the drawings in a further embodiment of the present invention there is provided a lowerable suspension system for a vehicle comprising a swing arm generally indicated by arrow 70 mounting a road wheel 71 having a first end 72 connected to a chassis rail 73 on the side of a vehicle deck 74, a tower generally indicated by arrow 75 connected to the vehicle deck 74 adjacent a central position of the swing arm 70, and a shackle arm generally indicated by arrow 76 pivotably connected to a second end 77 of the swing arm 70 and the deck 74. The shackle arm 76 comprises two links 78, 79 joined by a neutral pivot connection 80 which are pivotably connected to the chassis pail 73 and the second end 77 of the swing arm. An air spring 81 is interposed between the tower 75 and a central portion 82 of the swing arm 70. In a first position with the air spring fully inflated the deck 74 is horizontally disposed for normal road travel and in a second position with the air spring deflated the deck is in a lowered position enabling ramp loading and unloading to and from the deck to take place. Both the swing arm 70 and the links 78, 79 are cranked, and the cranks of the links 78, 79 are opposed. The central portion 82 of the swing arm 70 provides a seat for the lower end of the air spring 81. The crank in the swing arm 70 is created by an inclination `P` (See FIG. 16) between sections 83 and 84 of between 145 and 155 degrees. The cranks in each of the links 78 and 79 are substantially arcuate. The contact mounting surface of the tower 75 is inclined at an angle of between 5 and 12 degrees with respect to the plane of the deck 74. In the drawings FIGS. 10 to 14 are illustrative of the suspension system supporting the deck 74 in a horizontal position for travel and FIGS. 15 and 16 show the suspension system supporting the deck 74 on an incline when the wheel 71 is above the plane of the deck 74. In the travel position the air spring is inflated and in the ramp loading position the air spring is deflated. 16 In the travel position the links 78,79 are clustered and as the air spring is deflated the links expand into a goose-neck configuration. The suspension system illustrated can be used in pairs for a two wheeled vehicle or in multiple pairs for a vehicle with multiple wheel sets. The suspension system described in relation to FIGS. 10-15 has many disadvantages in relation to the earlier known embodiments, the main advantages being; (a) The system allows a deck to be lowered completely to the ground because the assembly is mounted to the outside of chassis rails of the deck, (b) In the lowered position the swing arm assembly is not an encumbrance to lowering of the deck to ground level, (c) The shackle connection is bunched when the deck is in its travelling position and provides lateral support relative to the deck and the free end of the swing arm during travelling, (d) The crank in the spring arm enables optimum operating position to be obtained for the air springs between the deflated and inflated conditions. The suspension assembly described above provides a simple yet efficacious mechanism for facilitating lowering of the load tray and associated chassis to the road surface to permit loading/unloading of loads. There are no complex components involved and no moving parts. Further the mechanism can be easily operated by a truck driver. It will of course be realised that the above has been given only by way of illustrative example of the invention and that all such modifications and variations thereto as would be apparent to persons skilled in the art are deemed to fall within the broad scope and ambit of the invention as is defined in the appended claims. 17 EXHIBIT C AIRSPRINT INCOME STATEMENT
Q3 2003 Q4 2003 Month July Aug Sept Oct Nov Dec Price # $ # $ # $ # $ # $ # $ -------------------------------------------------------------------------- REVENUE Trailers Rental and Large Fleet Customers Box Home Depot 3300 10 33.0 Lowes 3300 5 16.5 True Value 3300 Other 1500 Tandem 5500 5 27.5 Total 0 0.0 0 0.0 0 0.0 10 33.0 5 16.5 5 27.5 Components Kits License Fees One Time Volume Based..Me100 Volume Based..Hi300 ----- ----- ------ ------ ------ ----- Grand Total Revenue 0.0 0.0 0.0 33.0 16.5 27.5 GROSS MARGIN Box Trailers Home Depot 35% 10 11.6 Lowes 35% 5 5.8 True Value 35% Other 25% Tandem 35% 5 9.6 Components Kits Licenses 100% 0.0 ----- ----- ------ ------ ------ ----- Grand Total GM 0.0 0.0 0.0 11.6 5.8 9.6 % % % % % % OPERATING EXPENSE PRODUCT DEVELOPMENT Prototypes & Models Supplies / Tools SALES / MARKETING Website Brochure, CD, Video Shows & Exhibits Letters Presentations Ads (Specialty Mags) STAFF Employees Salaries John H, John S, Justin S CFO / Acctg (part-time) Accounting Project Mgt / Cust Serv Contract Engineering Other Benefits 30% Payroll Tax 7% Travel / Entertainment Auto Expense (2) ..(incl. depcn) Office Expenses Office Rental / Utilities Phones Postage / Express Dues & Subs Supplies Insurance (Product Liability) Legal Fees Consulting Expense Transfer Agent Investor Relations / Filings Licenses Depreciation (2 trailers) TOTAL SALES & MARKETING TOTAL DEVELOPMENT TOTAL G & A
AIRSPRING INCOME STATEMENT (continued)
2003 2004 Total Q1 Q2 Q3 Q4 # $ # $ # $ # $ # $ ---------------------------------------------------- REVENUE Trailers Rental and Large Fleet Customers Box Home Depot 10 33.0 100 330.0 300 990.0 300 990.0 200 660.0 Lowes 5 16.5 50 165.0 100 330.0 100 330.0 True Value 3300 10 33.0 30 99.0 80 264.0 80 264.0 Other 1500 30 45.0 50 75.0 50 75.0 Tandem 5500 5 27.5 40 220.0 80 440.0 80 440.0 Total 20 77.0 110 363.0 4501519.0 610 2099.0 510 1769.0 Components Kits License Fees One Time 0.0 50.0 50.0 60.0 70.0 Volume Based..Me100 0.0 250 25.0 500 50.0 500 50.0 Volume Based..Hi300 0.0 0.0 250 75.0 500 150.0 ------ ------ ------- ------- ------- Grand Total Revenue 77.0 413.0 1594.0 2284.0 2039.0 ------ GROSS MARGIN Box Trailers Home Depot 11.6 115.5 346.5 346.5 231.0 Lowes 5.8 0.0 57.8 115.5 115.5 True Value 11.6 34.7 92.4 92.4 Other 0.0 11.3 18.8 18.8 Tandem 9.6 0.0 77.0 154.0 154.0 Components Kits Licenses 0.0 50.0 75.0 185.0 270.0 ------ ------ ------- ------- ------- Grand Total GM 27.0 177.1 602.2 912.2 881.7 ------ % % % % OPERATING EXPENSE PRODUCT DEVELOPMENT Prototypes & Models 10.0 15.0 15.0 Supplies / Tools 5.0 1.5 1.5 1.5 1.5 SALES / MARKETING Website 15.0 10.0 10.0 5.0 0.0 Brochure, CD, Video 5.0 5.0 5.0 Shows & Exhibits 10.0 10.0 10.0 10.0 10.0 Letters 2.0 1.5 1.5 1.0 1.0 Presentations 1.0 1.0 1.0 1.0 1.0 Ads (Specialty Mags) 10.0 10.0 STAFF Employees Salaries John H, John S, Justin S 250.0 125.0 125.0 125.0 125.0 CFO / Acctg (part-time) 15.0 10.0 10.0 10.0 10.0 Accounting Project Mgt / Cust Serv 10.0 10.0 10.0 Contract Engineering 10.0 15.0 15.0 15.0 25.0 Other Benefits 30% 75.0 37.5 40.5 40.5 40.5 Payroll Tax 7% 17.5 8.8 9.5 9.5 9.5 Travel / Entertainment 25.0 13.0 14.0 14.0 13.0 Auto Expense (2) ..(incl. depcn) 25.0 11.0 12.0 12.0 10.0 Office Expenses Office Rental / Utilities 10.0 3.5 3.5 4.0 4.0 Phones 5.0 2.0 2.0 2.0 2.0 Postage / Express 1.0 0.5 0.5 0.5 0.5 Dues & Subs 1.0 0.5 0.5 0.5 0.5 Supplies 1.0 0.7 0.7 0.8 0.8 Insurance (Product Liability) 15.0 14.9 49.6 67.0 57.1 Legal Fees 30.0 15.0 15.0 15.0 15.0 Consulting Expense 10.0 5.0 5.0 5.0 5.0 Transfer Agent Investor Relations / Filings 20.0 9.0 9.0 10.0 10.0 Licenses Depreciation (2 trailers) 4.0 1.0 1.0 1.0 1.0 TOTAL SALES & MARKETING 83.0 46.5 53.5 53.0 50.0 TOTAL DEVELOPMENT 25.0 16.5 16.5 31.5 41.5 TOTAL G & A 454.5 233.3 281.7 300.7 290.8
EXHIBIT D DTOMI, INC. MEMORANDUM OF TERMS 600 Units $1,000 Per Unit - ------------------------------------------------------------------------------- THIS MEMORANDUM SUMMARIZES THE PRINCIPAL TERMS OF A PROPOSED FINANCING OF DTOMI, INC. THIS TERM SHEET IS FOR DISCUSSION PURPOSES ONLY; THERE IS NO OBLIGATION ON THE PART OF ANY PARTY UNTIL THE APPROPRIATE AGREEMENTS ARE SIGNED BY ALL CONCERNED PARTIES. - ------------------------------------------------------------------------------- DEFINED TERMS Terms otherwise not defined herein can either be found in the form of Securities Purchase Agreement, attached hereto. ISSUER Dtomi, Inc., a Nevada corporation (the "Company"). TYPE OF SECURITIES $1,000 "UNITS" each consisting of (i) 10,526 shares of the Company's common stock, $.001 par value per share ("Common Stock") and (ii) a warrant ("Warrant") to purchase 10,526 shares of Common Stock at an exercise price of $0.18 per share. The Warrant expires on December 31, 2005. WARRANT CALL The Company may call the Warrant at any time after the closing bid price for the common stock of the PROVISION Company has been at or above $0.60 per share for five (5) consecutive trading days. The Warrant shall expire forty-five (45) days from the date the Warrant is called (the "Call Date") by the Company. The forty-five day period from the Call Date is hereinafter referred to as the "Mandatory Warrant Exercise Period". IN THE EVENT THAT THE CLOSING BID PRICE FOR THE COMMON STOCK OF THE COMPANY IS AT OR ABOVE $0.60 PER SHARE FOR FIVE (5) CONSECUTIVE TRADING DAYS, THE WARRANT MAY BE CALLED AT THE DISCRETION OF THE COMPANY REGARDLESS OF WHETHER AN SB-2 REGISTRATION STATEMENT FILED BY THE COMPANY HAS BEEN DECLARED EFFECTIVE BY THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). 19 BOARD SEAT, BOARD SEAT. The purchasers of the Units as a group (the SPECIAL "Unit Holders") will have the right to elect one member of VOTING the board of directors of Dtomi (the "Board") for the RIGHTS, AND greater of two years from the closing date of the financing RIGHT TO represented herein, or until such time as the Unit Holders PURCHASE own less than 25% of the total issued and outstanding shares ADDITIONAL of Dtomi. SHARES AT A DISCOUNT SPECIAL VOTING RIGHTS. For as long as the Unit Holders are entitled to a seat on the Board, no action by the Board to increase the issued and outstanding shares in any one calendar year, including stock, stock options, and warrants, of Dtomi, beyond 15% of the total issued and outstanding shares (after the closing date of the financing represented herein), shall be valid unless the action was agreed upon pursuant to a unanimous vote of the Board. RIGHT TO PURCHASE ADDITIONAL SHARES. In the event that the Board votes to issue additional Dtomi shares beyond 15% of the total issued and outstanding in any one calendar year (the "Issuance"), the Unit Holders shall be entitled to purchase additional restricted shares (the "Additional Shares") from Dtomi at a discount of 50% of the closing market price of Dtomi's common stock for the 5-day trading period preceding the completion of such Issuance. The number of Additional Shares made available shall be sufficient to allow each Unit Holder to maintain his/her equity ownership prior to the Issuance. Dtomi shall provide written notice ("Notice") of the Issuance to the Unit Holders. The Unit Holders shall have 10-days from the Notice date to exercise their right to purchase (the "Right to Purchase"). To the extent that any Unit Holders elect not to purchase Additional Shares, such Right to Purchase shall terminate, and the Additional Shares not purchased shall be made available pari-passu to those Unit Holders who exercised their Right to Purchase. REGISTRATION RIGHTS FORM OF REGISTRATION STATEMENT. The Company shall file a registration statement with the SEC on RIGHTS Form SB-2 covering, among other things, the offering of the shares of the Company's Common Stock underlying each Unit and the Common Stock issuable upon exercise of the Warrants (the "Registration Statement"). If the Registration Statement is not declared effective on or prior to January 31, 2004, the Company will be required to issue additional warrants to each investor as follows: LATE REGISTRATION PENALTY
- --------------------------------------------------------------------------------------------------- DATE REGISTRATION STATEMENT ADDITIONAL WARRANT TO BECOMES EFFECTIVE PURCHASE COMMON STOCK AS A % OF THE WARRANT INCLUDED IN THE UNITS - --------------------------------------------------------------------------------------------------- Between July 15, 2003 and January 31, 2004 0% Between February 1, 2004, and February 29, 2004 6% Between March 1, 2004 and March 31, 2004 9% April 1, 2004 and thereafter 12% - ---------------------------------------------------------------------------------------------------
20
REGISTRATION FILING AND EFFECTIVENESS. The Company will use its best FILING AND efforts to prepare and file the Registration Statement EFFECTIVENESS within sixty (60) days following the Closing (as defined below). The Company will use its best efforts to cause the Registration Statement to become effective as soon as practicable and to keep the Registration Statement effective until December 31, 2005, or until the shareholders have completed the distribution related thereto. PUBLIC TRADING PUBLIC After the Registration Statement becomes effective, the TRADING Company will permit the investors to publicly sell the PERIODS Common Stock underlying each Unit and the shares of Common Stock issuable upon exercise of the Warrant. LOCK UP PERIODS There is no lock-up period for the Common Stock underlying each Unit or Common Shares issuable upon exercise of the Warrant. INVESTORS Each investor in the Regulation D offering must be an "accredited investor" within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). Each investor in the Regulation S offering must be neither a U.S. Person (as defined in Regulation S) nor an affiliate of the Company (as defined in Regulation S) and must meet the requirements of Regulation S. 1.1 Securities The offering of each Unit in the United States will be made Exemption pursuant to exemptions from registration provided by Section 4(2) of the Securities Act, Rule 506 of Regulation D promulgated thereunder, and exemptions available under applicable state securities laws and regulations. The offering of each Unit outside of the United States will be made pursuant to exemptions from registration provided by Regulation S of the Securities Act. 1.2 T The Closing shall be held on each date that the Company The Closing accepts an executed Securities Purchase Agreement for the purchase of Units and the parties exchange the necessary deliverables under the Securities Purchase Agreement.
21 AMOUNT OF The Company plans to raise an aggregate amount of (i) $600,000 from the sale of the Common Stock INVESTMENT underlying the 600 Units and (ii) up to $1,136,808 in the event that all Warrant holders exercise their right to purchase the Common Stock underlying the Warrants at the price of $0.18 per share.
USE OF PROCEEDS FROM The Company will use the net proceeds from its sale of the Units as follows: UNIT SALES AND Australian Legal Fees (Patent Related) $25,000 WARRANT EXERCISES Patent Licensing Fee $50,000 SUBSEQUENT TO U.S. Legal Fees $50,000 EXECUTION OF PATENT General Working Capital Purposes $475,000 LICENSING AGREEMENT Proceeds will be allocated as follows on each Closing: 1. All proceeds to Patent Licensing Fee until paid in full 2. 1/12th of all proceeds to U.S. Legal Fees 3. 1/24th to Australian Legal Fees 4. Balance to General Working Capital EXPENSES Each Purchaser is responsible for its own expenses in connection with this offering. OFFERING COSTS A Placement Agent fee equal to 10% in cash and 10% in stock purchase Warrant at $.01 per share, plus a non-accountable expense allowance of 3% may be paid to licensed broker/dealers in connection with this offering. OFFERING MATERIALS o Attached to this Memorandum of Terms are the following documents which constitute the Offering Materials for the Offering: Securities Purchase Agreement, including the following exhibits: o Form of Warrant o Investor Representation Letter o Form 10-KSB for the fiscal year ended March 31, 2003
PRO-FORMA Current Issued and Outstanding 5,026,649 29.8% CAPITALIZATION John Simpson 4,100,000 24.3% POST-FINANCING Investors (Common Shares) Post May 1 7,727,578 45.9% TOTAL 16,854,227 100.0% Current Issued and Outstanding 5,026,649 20.8% John Simpson 5,330,000 22.1% Investors (Common Shares) 7,727,578 32.0% Investors (Warrants) 6,064,301 25.1% TOTAL 23,696,128 100.0%
22 EX-10.4 7 ex_10-4.txt EXHIBIT 10.4 CONSULTING SERVICES AGREEMENT This Consulting Services Agreement ("Agreement"), dated July 31, 2003 (the "Effective Date"), is made by and between John Simpson, an individual ("Consultant"), whose address is 2468-3 Enterprise Road, Clearwater, Florida 33763, and Dtomi, Inc., a Nevada corporation ("Dtomi"), having its principal place of business at 200 Ninth Ave., Suite 220, Safety Harbor, Florida 34695. WHEREAS, Consultant is the author and owner of the air spring powered lowerable suspension assembly patent, Patent No. 6,530,580 (the "Patent"); WHEREAS, Consultant desires to be engaged by Dtomi to provide consulting services regarding the commercialization of the Patent in his area of knowledge and expertise on the terms and subject to the conditions set forth herein (the "Services"); WHEREAS, Dtomi is a publicly held corporation with its common stock shares trading on the Over the Counter Bulletin Board under the ticker symbol "DTOI," and desires to further develop its business and customers; and WHEREAS, Dtomi desires to engage Consultant to provide the Services in his area of knowledge and expertise on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration for those services Consultant provides to Dtomi, the parties agree as follows: 1. SERVICES OF CONSULTANT. (a) Consultant shall provide to Dtomi, on an as needed basis by Dtomi, forty (40) hours per month of the Services, which shall include advising, consulting, and strategizing on matters relating to the commercialization of the Patent. (b) Consultant will make adjustments, in an equitable fashion, to any problems in the Services identified by Dtomi. 2. CONSIDERATION. 2.1 STOCK GRANT. (a) Immediately upon the Effective Date, Dtomi will grant Consultant a sufficient quantity of common shares of Dtomi such that Consultant shall own thirty percent (30%) of all issued and outstanding shares of Dtomi. The parties acknowledge that, as of the Effective Date, 1 thirty percent (30%) of all issued and outstanding shares of Dtomi is estimated to be approximately 1,500,000 common shares. (b) Consultant's common share ownership is subject to the following non-dilution covenants, which shall be in effect only for the Term, as defined herein, of this Agreement: (i) Subsequent to such time as at least Six Hundred Thousand Dollars ($600,000) of either investment capital or in-kind consideration has been received by Dtomi, Dtomi will grant Consultant, if necessary, a sufficient quantity of common shares such that Consultant shall own no less than twenty-five percent (25%) of all issued and outstanding shares of Dtomi. (ii) Subsequent to such time as at least One Million Dollars ($1,000,000) of either investment capital or in-kind consideration has been received by Dtomi, Dtomi will grant Consultant, if necessary, a sufficient quantity of common shares such that Consultant shall own no less than twenty-two percent (22%) of all issued and outstanding shares of Dtomi. (iii) The non-dilution covenants described herein shall only apply to such dilution of Consultant's ownership of his shares of Dtomi common stock that is caused by a financing. Consultant shall NOT have any of the anti-dilution protections as set forth above in the event additional shares of Dtomi stock, common or preferred, are issued by Dtomi in connection with any acquisitions or other transactions that do not involve or otherwise relate to the commercialization of the Patent. (c) Common shares issued to Consultant shall have piggyback registration rights in accordance with the terms of the attached EXHIBIT A. 2.2 OTHER CONSIDERATION. (a) Consultant shall have an option to serve on the Board of Directors of Dtomi (the "Board"), or to appoint a Board member for as long as that certain Exclusive Patent License Agreement, attached hereto as EXHIBIT B, between Consultant and Dtomi, remains in effect. Upon termination or expiration of that certain License Agreement, Consultant shall resign from the Board, or if he has appointed a Board member, such appointment shall be revoked. (b) Dtomi shall assume and be fully responsible for Consultant's estimated $300,000 debt and hold Consultant harmless from said debt as well as any consequential damages to Consultant caused by any delay in payment by Dtomi of such debt. 2.3 OUT OF POCKET EXPENSES. Dtomi will pay Consultant for any pre-approved out-of-pocket expenses incurred by Consultant. 3. CONFIDENTIALITY. Each party agrees that during the course of this Agreement, information that is confidential or of a proprietary nature may be disclosed to the other party, including, but not 2 limited to, product and business plans, software, technical processes and formulas, source codes, product designs, sales, costs and other unpublished financial information, advertising revenues, usage rates, advertising relationships, projections, and marketing data ("Confidential Information"). Confidential Information shall not include information that the receiving party can demonstrate (a) is, as of the time of its disclosure, or thereafter becomes part of the public domain through a source other than the receiving party, (b) was known to the receiving party as of the time of its disclosure, (c) is independently developed by the receiving party, or (d) is subsequently learned from a third party not under a confidentiality obligation to the providing party. 4. INDEMNIFICATION. 4.1 DTOMI. Dtomi agrees to indemnify, defend, and shall hold harmless Consultant and/or his agents, and to defend any action brought against said parties with respect to any claim, demand, cause of action, debt or liability, including reasonable attorneys' fees to the extent that such action is based upon a claim that: (a) is true, (b) would constitute a breach of any of Dtomi's representations, warranties, or agreements hereunder, or (c) arises out of the negligence or willful misconduct of Dtomi, or any Dtomi Content to be provided by Dtomi and does not violate any rights of third parties, including, without limitation, rights of publicity, privacy, patents, copyrights, trademarks, trade secrets, and/or licenses. 4.2 CONSULTANT. Consultant agrees to indemnify, defend, and shall hold harmless Dtomi, its directors, employees and agents, and defend any action brought against same with respect to any claim, demand, cause of action, debt or liability, including reasonable attorneys' fees, to the extent that such an action arises out of the gross negligence or willful misconduct of Consultant. 4.3 NOTICE. In claiming any indemnification hereunder, the indemnified party shall promptly provide the indemnifying party with written notice of any claim, which the indemnified party believes falls within the scope of the foregoing paragraphs. The indemnified party may, at its expense, assist in the defense if it so chooses, provided that the indemnifying party shall control such defense, and all negotiations relative to the settlement of any such claim. Any settlement intended to bind the indemnified party shall not be final without the indemnified party's written consent, which shall not be unreasonably withheld. 5. RELATIONSHIP OF THE PARTIES. Consultant and Dtomi are acting solely as independent contractors under this Agreement. It is expressly understood and agreed by the parties hereto that nothing in this Agreement, its provisions or transactions and relationships contemplated hereby shall constitute either party as the agent, employee, partner or legal representative of the other for any purpose whatsoever, nor shall either party hold itself out as such. Neither party to this Agreement shall have the authority to bind or commit the other party hereto in any manner or for any purpose whatsoever, except as may be expressly provided for herein, but rather each party shall at all times act and conduct itself in all respects and events as an independent contractor. This Agreement creates no relationships of joint venturers, partners, associates or principal and agent between the parties hereto. 3 6. TERM. This Agreement shall become effective on the Effective Date as defined herein and terminate five (5) years thereafter. Unless otherwise agreed upon in writing by Consultant and Dtomi, this Agreement shall not automatically be renewed beyond its Term. 7. TERMINATION. (a) Either party may terminate this Agreement on ninety (90) calendar days written notice, or if prior to such action, the other party materially breaches any of its representations, warranties or obligations under this Agreement. Except as may be otherwise provided in this Agreement, such breach by either party will result in the other party being responsible to reimburse the non-defaulting party for all costs incurred directly as a result of the breach of this Agreement, and shall be subject to such damages as may be allowed by law including all attorneys' fees and costs of enforcing this Agreement. (b) Upon any termination or expiration of this Agreement, Dtomi shall pay all unpaid and outstanding fees through the effective date of termination or expiration of this Agreement. Upon any termination or expiration of this Agreement, Consultant shall provide and deliver to Dtomi any and all outstanding services due through the effective date of this Agreement. 8. MISCELLANEOUS. 8.1 RIGHTS CUMULATIVE; WAIVERS. The rights of each of the parties under this Agreement are cumulative. The rights of each of the parties hereunder shall not be capable of being waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right. Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right. No act or course of conduct or negotiation on the part of any party shall in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right. 8.2 BENEFIT; SUCCESSORS BOUND. This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights, and benefits hereof, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their heirs, executors, administrators, representatives, successors, and permitted assigns. 8.3 ENTIRE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof. There are no promises, agreements, conditions, undertakings, understandings, warranties, covenants or representations, oral or written, express or implied, 4 between them with respect to this Agreement or the matters described in this Agreement, except as set forth in this Agreement. Any such negotiations, promises, or understandings shall not be used to interpret or constitute this Agreement. 8.4 ASSIGNMENT. Neither this Agreement nor any other benefit to accrue hereunder shall be assigned or transferred by either party, either in whole or in part, without the written consent of the other party, and any purported assignment in violation hereof shall be void. 8.5 AMENDMENT. This Agreement may be amended only by an instrument in writing executed by all the parties hereto. 8.6 SEVERABILITY. Each part of this Agreement is intended to be severable. In the event that any provision of this Agreement is found by any court or other authority of competent jurisdiction to be illegal or unenforceable, such provision shall be severed or modified to the extent necessary to render it enforceable and as so severed or modified, this Agreement shall continue in full force and effect. 8.7 SECTION HEADINGS. The Section headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 8.8 CONSTRUCTION. Unless the context otherwise requires, when used herein, the singular shall be deemed to include the plural, the plural shall be deemed to include each of the singular, and pronouns of one or no gender shall be deemed to include the equivalent pronoun of the other or no gender. 8.9 FURTHER ASSURANCES. In addition to the instruments and documents to be made, executed and delivered pursuant to this Agreement, the parties hereto agree to make, execute and deliver or cause to be made, executed and delivered, to the requesting party such other instruments and to take such other actions as the requesting party may reasonably require to carry out the terms of this Agreement and the transactions contemplated hereby. 8.10 NOTICES. Any notice which is required or desired under this Agreement shall be given in writing and may be sent by personal delivery or by mail (either a. United States mail, postage prepaid, or 5 b. Federal Express or similar generally recognized overnight carrier), addressed as follows (subject to the right to designate a different address by notice similarly given): If to Dtomi: Dtomi, Inc. 200 Ninth Avenue, Suite 220 Safety Harbor, Florida 34965 With a copy to: David M. Otto The Otto Law Group, PLLC 900 4th Avenue, Suite 3140 Seattle, Washington 98164 If to Consultant: John Simpson 2468-3 Enterprise Road, Clearwater, Florida 33763 8.11 GOVERNING LAW. This Agreement and the performance of the parties hereunder shall be construed and governed in accordance with the laws of the State of Washington. 8.12 ARBITRATION. (a) Any controversy, dispute, or claim arising out of or relating to this Agreement, including specifically the breach thereof, shall be settled by binding arbitration in Seattle, Washington. (b) Any party to this Agreement can initiate arbitration pursuant to this Agreement by serving notice on the other party of intent to arbitrate. The notice shall specify with particularity the claims or issues that are to be arbitrated. Within ten days of receipt of the notice by all parties, the parties shall obtain a list of available arbitrators from the local office of the Judicial Arbitration and Mediation Service ("JAMS") and select a mutually acceptable arbitrator. If the parties are unable to agree on an arbitrator within ten days, any party may petition the Presiding Judge of the Superior Court for King County to select a single arbitrator from the JAMS list. The Parties shall have the discovery rights available under Washington's Civil Rules, subject to the limitation that each side shall be limited to no more than five interrogatories and five depositions unless, upon a showing of good cause, the Party can convince the arbitrator that more interrogatories or depositions should be permitted. All discovery must be concluded within 60 days of the selection of an arbitrator. The arbitration hearing must be concluded within 30 days of the close of discovery and it will be conducted in accordance with Washington Rules of Evidence. The arbitrator's final decision shall be rendered within ten days of the final hearing day. Judgment upon the arbitrator's final award may be entered in any court having jurisdiction thereof. (c) The parties shall bear in equal shares the arbitrator's fees and costs. The prevailing party in the arbitration shall be awarded its reasonable attorneys' fees and all costs, other than the 6 arbitrator's fees and costs. For the purposes of determining who is the prevailing party, each side will submit to the other a single written offer of settlement ten days prior to the start of the arbitration hearing and the Party whose offer most closely approximates the arbitrator's award shall be deemed the prevailing Party for the purpose of awarding attorneys' fees. 8.13 CONSENTS. The person signing this Agreement on behalf of each party hereby represents and warrants that he has the necessary power, consent and authority to execute and deliver this Agreement on behalf of such party. 8.14 REPRESENTATION BY COUNSEL. This Agreement is the result of negotiation between the parties, who acknowledge that they have been represented by counsel during such negotiation; accordingly, this Agreement shall not be construed for or against either party regardless of which party drafted this Agreement or any portion thereof. 8.15 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and have agreed to and accepted the terms herein on the date written above. DTOMI, INC. By : _________________________ John "JT" Thatch Title: _______________________ JOHN SIMPSON ----------------------------- John Simpson 7 EX-99 8 ex_99.txt EXHIBIT 99 Dtomi, Inc. Completes Acquisition of the Air Spring Powered Lowerable Suspension Assembly Patent. SAFETY HARBOR, Fla., April 9, 2003 -- Dtomi, Inc., a Nevada corporation ("Dtomi")(OTC Bulletin Board: DTOI), announced it has completed its acquisition of the air spring powered lowerable suspension assembly patent from its owner, John Simpson, of Richland, Washington. Under the terms of the asset purchase agreement, Dtomi acquired the patent for 711,992 shares of Dtomi common stock and assumed certain liabilities relating to costs associated with commercializing the technology underlying the patent. In connection with the acquisition of the patent, Dtomi has effected a 1-for-20 reverse-split of its issued and outstanding stock. Dtomi has created a manufactured products division ("MPD") that will be responsible for the manufacture and distribution of the Airspring Axle. In addition, Dtomi has entered into an employment agreement with John Simpson, pursuant to which Mr. Simpson will assume the position of President of Dtomi and oversee the implementation of Dtomi's business plan and the deployment of the Airspring Axle(TM) technology. Mr. Simpson has also been appointed to the board of directors for Dtomi. John "JT" Thatch, the current President of Dtomi, will resign his position, effective today. In connection with commercializing the technology underlying the patent, Dtomi is seeking to raise $1.1 million. Upon the successful completion of this round of financing, Dtomi expects to have in place the necessary infrastructure to implement the Airspring Axle(TM) technology. "We believe that our goal of generating gross revenue of $12,845,000 and net income of $3,731,276 by the end of the 12 month period ending June 2004, are attainable and we look forward to introducing our product into the market," said John Simpson, President of Dtomi. Information contained in this press release, other than historical information, should be considered forward-looking in nature and is subject to various risks or uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on the operating results, performance or financial condition are risks surrounding the closing of the acquisition of the patent, the integration of the patent into Dtomi's business following the closing (including licensing and patent infringement issues) and the company's ability to achieve and manage growth. Additional factors that will impact the company's success include the company's ability to successfully implement the MPD; the company's ability to attract and retain qualified personnel; the company's ability to develop new services; and other factors discussed in Dtomi's filings with the Securities and Exchange Commission. SOURCE: Dtomi, Inc. EX-99.1 9 ex_99-1.txt EXHIBIT 99.1 Dtomi, Inc. Completes Acquisition of License for the Air Spring Powered Lowerable Suspension Assembly Patent. SAFETY HARBOR, Fla., August 19, 2003 -- Dtomi, Inc., a Nevada corporation ("Dtomi")(OTC Bulletin Board: DTOI), announced it has acquired an exclusive license to use and exploit the air spring powered lowerable suspension assembly patent from its owner, John Simpson, of Richland, Washington. Under the terms of the license agreement, Dtomi agreed to pay Simpson a one time payment of $50,000 and monthly payments of $10,000 for the term of the license. Dtomi and Mr. Simpson simultaneously entered into a consulting agreement, under which Mr. Simpson has agreed to provide his expertise in matters relating to the commercialization of the patent, in consideration for approximately 1,500,000 shares of common stock of Dtomi. Under the terms of the consulting agreement, Mr. Simpson's equity ownership in Dtomi is guaranteed to be no less than between 30% and 22%, depending on Dtomi's financing. In order to effectuate the license and consulting agreements, Dtomi and Mr. Simpson terminated the asset purchase agreement they had previously executed and the patent was re-assigned to Mr. Simpson. Mr. Simpson also resigned from his previously appointed position as President, opting instead to aid in the commercialization of the patent by providing consulting services to Dtomi. Dtomi believes that the re-structured arrangement between itself and Mr. Simpson offers it the best opportunity to capitalize on the unique product created by Mr. Simpson. Dtomi has also revised its financial projections, with a goal of generating gross revenue of $4,291,000 and net income of $658,000 by the end of the 12 month period ending June 2004. Information contained in this press release, other than historical information, should be considered forward-looking in nature and is subject to various risks or uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on the operating results, performance or financial condition are risks surrounding the licensing of Mr. Simpson's patent, the integration of the patent into Dtomi's business following the closing (including licensing and patent infringement issues) and the company's ability to achieve and manage growth. Additional factors that will impact the company's success include the company's ability to attract and retain qualified personnel; the company's ability to develop new services; and other factors discussed in Dtomi's filings with the Securities and Exchange Commission. SOURCE: Dtomi, Inc. -----END PRIVACY-ENHANCED MESSAGE-----