EXHIBIT 10.5
AGREEMENT
This License Agreement ("Agreement"), effective this 1st day of October
2001 by and between Enterprises Solutions, Inc., a Nevada company with its
principle place of business at 000 Xxxx Xxxx - Xxxxx 000 Xxxxxxxxx, XX 00000
("ESI"), and Delta Mutual, Inc., ("DLTM") with its principal place of business
at 0000 Xxxxx Xxxxxx Xxx., X.X., Xxxxxxxxxx, X.X., 00000, Suite 812.
RECITALS
WHEREAS, ESI has developed technology consisting of hardware and
software intellectual property and products that provide secure network
appliances and security solutions encompassing both server and client; and
WHEREAS, DLTM and ESI have been in negotiations toward a merger,
whereby DLTM will purchase all of the assets of ESI, including all of ESI's
intellectual property, which merger is in the process of being finalized and
approval sought by the U.S. Securities and Exchange Commission; and
WHEREAS, ESI and DLTM agree that it is in the best interests of both
companies to enter into an agreement whereby DLTM receives an exclusive license
to make, use, and sell the technology and products owned by ESI; and
WHEREAS, the parties hereby acknowledge and agree that the
consideration for this license, in addition to the royalties to be paid as
described more fully below, includes the following: DLTM has provided loans and
funds to permit ESI to continue its operations until the completion of the
merger; DLTM has undertaken the time and expense to further develop products
related to the business of ESI in the interests of and in furtherance of the
merger; and there has been a precipitous decline in the market value of ESI's
common stock;
NOW, THEREFORE, for the consideration stated herein, the sufficiency of
which is hereby acknowledged, the parties mutually agree as follows:
1. DEFINITIONS:
a. "ESI Product" shall mean ESI's High Assurance Networking Systems
product solutions. A description of the functionality of this product
is attached hereto as Exhibit 1(b), and is incorporated herein by
reference.
2. LICENSE:
a. WORLD-WIDE EXCLUSIVE LICENSE TO DLTM:
AGREEMENT
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i. TECHNOLOGY: ESI hereby grants DLTM a worldwide, exclusive
fully paid-up license to use, copy, decompile, disassemble, decompress,
reverse engineer, and otherwise modify for its own use at its sole
discretion, including incorporation into other hardware, source code or
object code and software products, the following: all source code for
all evaluated and current versions of ESI's Products; all tools,
utilities, fixtures, and evaluation evidence previously or currently
used by ESI or DLTM to maintain, support, evaluate or have evaluated
the Products; all hardware associated with the Products; and all
detailed documentation in conjunction with the source code, object
code, tools, utilities, fixtures, and evaluation evidence. For the sake
of clarity, it is the parties' intention that DLTM, through use of the
license granted herein, will be able to reproduce working evaluated
products, including evaluation evidence, and have the ability to
reproduce and perform the evaluation conformance tests. DLTM shall have
the rights to use the source code and all support documentation as an
Original Equipment Manufacturer ("OEM") to the extent necessary for
DLTM to develop derivative software that will operate as specific DLTM
client products and server appliances as part of the ESI high assurance
network architecture.
3. ADDITIONAL CONSIDERATION:
In consideration of the exclusive license granted herein by ESI to
DLTM, DLTM agrees to pay ESI royalties as follows:
DLTM shall pay ESI a royalty equal to 7% of its gross sales
revenue generated by its sale of ESI software products;
DLTM shall pay ESI a royalty equal to 3% of its gross revenue
generated from its sale of ESI hardware products.
Upon completion of the merger between ESI and DLTM, DLTM shall become
the owner of the licenses technology and hardware and software
products, and shall have no continuing obligation to make any further
royalty payments to ESI.
4. TERM AND TERMINATION:
a. EFFECTIVE DATE. This Agreement and the license granted hereunder
shall take effect upon the date set forth above and shall continue for
a period of three years. At DLTM's option, DLTM may continue this
license for an additional two year period by providing written notice
to ESI not later than sixty days prior to the expiration date of this
license.
b. TERMINATION. Absent a material breach of this agreement, neither
party may terminate this agreement except by the mutual written consent
of both parties. DLTM may, at its option, terminate this Agreement in
the event ESI (A) terminates or suspends its business, (B) becomes
subject to any bankruptcy or insolvency proceeding under Federal or
state statute, (C) becomes insolvent or subject to direct control by a
trustee, receiver or similar authority, or (D) has wound up or
liquidated, voluntarily or otherwise.
AGREEMENT
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5. OWNERSHIP
a. TITLE. The Parties agree that pending completion of the asset
purchase agreement between ESI and DLTM, ESI, as licensor, shall own
all proprietary rights to its hardware and software products, including
all patent, copyright, trade secret, trademark and other proprietary
rights in and to its respective products. Any corrections, bug fixes,
enhancements, updates or other modifications, including custom
modifications to the Software, made and/or paid for by the DLTM as
licensee, shall be owned by DLTM. DLTM shall retain ownership to any
and all derivative products developed at its expense.
6. INDEMNIFICATION
Each party shall indemnify and hold harmless the other party from and
against any claims, including reasonable legal fees and expenses, based
upon infringement of any United States copyright or patent by the
respective party's products. The respective licensee agrees to notify
the respective licensor of any such claim promptly in writing and to
allow that licensor to control the proceedings. The respective licensee
agrees to cooperate fully with the licensor during such proceedings.
Licensor shall defend and settle at its sole expense all proceedings
arising out of the foregoing. In the event of such infringement,
Licensor may replace, in whole or in part, the infringing product or
products with a substantially compatible and functionally equivalent
computer program or modify the product to avoid the infringement.
7. FORCE MAJEURE
Neither party shall be in default or otherwise liable for any delay in
or failure of its performance under this Agreement if such delay or
failure arises by any reason beyond its reasonable control, including
any act of God, any acts of the common enemy, the elements,
earthquakes, floods, fires, epidemics, riots, failures or delay in
transportation or communications, or any act or failure to act by the
other party or such other party's employees, agents or contractors;
provided, however, that lack of funds shall not be deemed to be a
reason beyond a party's reasonable control. The parties will promptly
inform and consult with each other as to any of the above causes, which
in their judgment may or could be the cause of a delay in the
performance of this Agreement.
8. PRESS RELEASES
Either party to this agreement may issue general press releases to the
public concerning this agreement without the consent of the other
party. All press releases will be in conformity with the conditions as
specified in paragraph 6 above.
9. NOTICES
All notices under this Agreement are to be delivered by (i) depositing
the notice in the mail, using registered mail, return receipt
requested, addressed to the address below or to any other address as
the party may designate by providing notice, (ii) telecopying the
AGREEMENT
PAGE 3
notice by using the telephone number set forth below or any other
telephone number as the party may designate by providing notice, (iii)
overnight delivery service addressed to the address below or to any
other address as the party may designate by providing notice, or (iv)
hand delivery to the individual designated below or to any other
individual as the party may designate by providing notice. The notice
shall be deemed delivered (i) if by registered mail, four (4) days
after the notice's deposit in the mail, (ii) if by telecopy, on the
date the notice is delivered, (iii) if by overnight delivery service,
on the day of delivery, and (iv) if by hand delivery, on the date of
hand delivery.
ESI: Attention: Xxxxxx Xxxxx
Enterprises Solutions, Inc.
000 Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Xx Xxxxx
Telecopy No.: 000-000-0000
DLTM: Attention: Xxxxxxx X. Xxxxxx
Delta Mutual, Inc.
Xxxxx 000
0000 Xxxxx Xxxxxx Xxx., X.X.
Xxxxxxxxxx, X.X. 00000
Telecopy No.: 000-000-0000
10. GENERAL PROVISIONS
a. COMPLETE AGREEMENT. The parties agree that this Agreement is the
complete and exclusive statement of the agreement between the parties,
which supersedes and merges all prior proposals, understandings and all
other agreements, oral or written, between the parties relating to this
Agreement.
b. AMENDMENT. This Agreement may not be modified, altered or amended
except by written instrument duly executed by both parties.
c. WAIVER. The waiver or failure of either party to exercise in any
respect any right provided for in this Agreement shall not be deemed a
waiver of any further right under this Agreement.
d. SEVERABILITY. If any provision of this Agreement is invalid, illegal
or unenforceable under any applicable statute or rule of law, it is to
that extent to be deemed omitted. The remainder of the Agreement shall
be valid and enforceable to the maximum extent possible.
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e. GOVERNING LAW. This Agreement and performance hereunder shall be
governed by the laws of the Commonwealth of Massachusetts.
f. READ AND UNDERSTOOD. Each party acknowledges that it has read and
understands this Agreement and agrees to be bound by its terms.
AGREED:
ENTERPRISES SOLUTIONS, INC.:
----------------------------
Xx Xxxxx
000 Xxxx Xxxx
Xxxxxxxxx, XX 00000
----------------------------
Date
Delta Mutual
----------------------------
Xxxxxxx X. Xxxxxx
President Delta Mutual, Inc.
----------------------------
Date
AGREEMENT
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EXHIBIT 1(a)
[TO BE PROVIDED]
AGREEMENT
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EXHIBIT 1(b)
TO BE PROVIDED
AGREEMENT
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