Exhibit 10.5

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

By & between

 

Monitor Dynamics, Inc. (“Licensor”)

&

MDI, Inc. (“Licensee”)

 

This INTELLECTUAL PROPERTY LICENSE AGREEMENT (“Agreement”) is dated as of
September 8, 2009 (the “Effective Date”) between Monitor Dynamics, Inc., a Texas
corporation (“Licensor”), and MDI, Inc, a Delaware corporation (“Licensee”).
Licensor and Licensee are sometimes referred to herein individually as, “Party”
and collectively as, the “Parties.”

 

I.                  RECITALS

 

WHEREAS, prior to the execution of this Agreement, Licensee was the owner of all
of the issued and outstanding capital stock of Licensor. Licensor was a
newly-formed, wholly-owned subsidiary of Licensee which was organized to
acquire, and has so acquired, the business assets and liabilities previously
held by Licensee, as described in the Contribution Agreement between Licensor
and Licensee of even date herewith;

 

WHEREAS, prior to the execution of this Agreement, Licensee, and a newly-formed
wholly-owned subsidiary of Licensee (“Merger Sub”), entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with Almana Networks International,
a Delaware corporation (“ANI”), pursuant to which Merger Sub was merged with and
into ANI with ANI being the surviving entity (the “Merger”);

 

WHEREAS, contemporaneously with the closing of the Merger, Licensee intends to
split-off Licensor, through the sale of all of the outstanding capital stock of
Licensor upon the terms and conditions of a Stock Purchase Agreement (the “Stock
Purchase Agreement”) of even date herewith by and among Licensee and 214
Investments, Inc., a Texas corporation (“Purchaser”);

 

WHEREAS, the Stock Purchase Agreement contemplates that the Licensor will
license certain intellectual property to Licensee, namely, the Licensed IP (as
defined herein); and

 

WHEREAS, Licensee desires to obtain the right and license to use the Licensed IP
upon the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the foregoing premises, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereto hereby covenant and agree as follows:

 

I.              DEFINITIONS: Whenever used in this Agreement, the following
terms have the meanings respectively assigned to them in this Section:

 

(a)  “Affiliate” means a Person who directly or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with,
the Person specified.

 

(b)  “Control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person whether
through the ownership of voting securities, by contract, or otherwise.

 

(c)  “Person” means an individual, firm, partnership, joint venture,
corporation, bank, trust, unincorporated organization or governmental body.

 

(d)  “Licensed IP” means Safenet 6.2.16.SP3  sold, assigned and contributed to
the Licensor pursuant to the Contribution Agreement together with the media,
supporting documentation , instructions and manuals regarding the use of such
Licensed IP. As used in this Agreement, the term “Intellectual Property”
expressly excludes Trademarks.

 

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II.            LICENSE GRANT

 

2.1.              License Grant. From and after the Effective Date, Licensor
hereby grants to Licensee, and Licensee hereby accepts from Licensor, subject to
any licenses previously granted to third parties, a perpetual, irrevocable,
world-wide, fully paid-up, royalty-free license to use the Licensed IP to make,
have made, use, offer for sale, promote, distribute, sell and otherwise
commercially exploit the Licensed IP. Such license includes, without limitation,
the right to distribute, and create derivative works from any copyrighted
materials included in Licensed IP, the right to make, have made, use, offer for
sale, promote, distribute, sell and otherwise commercially exploit any such
derivative works and the right to use any trade secrets and know-how included in
Licensed IP.

 

2.2.              Copies. Licensee may make such number of copies of the
applicable Licensed IP as is reasonably necessary to accomplish the permitted
uses set forth in Section 2.1. All copies shall be subject to the terms and
conditions of this Agreement.

 

2.3.              Exclusion of All Other Rights. Except as expressly provided
herein, Licensee is granted no rights or licenses whatsoever in or to the
Licensed IP or any other Licensor products, services or other Licensor
intellectual proprietary or personal rights. Licensor hereby expressly reserves
all rights and licenses not expressly granted in this Agreement. In particular
and without limiting the foregoing, nothing in this Agreement will be deemed to
convey to Licensee the legal title to any Licensed IP.

 

2.4.              Right to Sublicense. Licensee shall be free to grant
sublicenses to any majority-owned subsidiary or Affiliate of Licensee for so
long as such Person remains a majority-owned subsidiary or an Affiliate of
Licensee. Any such sublicense shall be subordinate to and conform to the terms
and conditions of this Agreement, and shall not include the right for such
sublicensee to grant sublicenses to persons who are not also majority-owned
subsidiaries or Affiliates of Licensee. Licensee shall also be free to grant
sublicenses to persons who are not majority-owned subsidiaries or Affiliates of
Licensee to the extent necessary to exercise its “have made” rights as provided
in Section 2.1. Any such sublicense shall be subordinate to and conform to the
terms and conditions of this License; shall not include the right for such
sublicensee to grant sublicenses to other persons; and shall not include the
right for such sublicensee to make, sell or distribute products made using the
Licensed IP for such sublicensee’s own account or the account of any person
other than Licensee or a majority-owned subsidiary or Affiliate of Licensee. In
addition, Licensee shall require that any such sublicensee implement and
maintain practices and policies sufficient to preserve the confidentiality of
all Licensed IP provided to such sublicensee by Licensee, and Licensee shall be
solely responsible, as between Licensee and Licensor, for any breach of
confidentiality with respect to the Licensed IP by any such sublicensee. Except
as expressly set forth in this provision, Licensee shall not, without the prior
written approval of Licensor, which approval shall not be unreasonably withheld,
delayed, or conditioned, sublicense or transfer in any way any Licensed IP.

 

2.5.              Intellectual Property Notices and Markings. Licensee shall
accurately produce and reproduce all Licensor intellectual property notices on
all copies Licensee produces or reproduces of the Licensed IP.

 

III.               OWNERSHIP

 

3.1.          Licensed IP. Licensee acknowledges and agrees that, as between the
Parties and subject to the rights and licenses granted herein, Licensor is, and
at all times shall remain, the sole and exclusive owner of all right, title and
interest, throughout the world (including all intellectual property and other
proprietary rights), in and to all Licensed IP, and any copies of the Licensed
IP, whether made by or on behalf of Licensor or Licensee.

 

3.2           Derivative Works. Licensor acknowledges and agrees that, as
between the Parties, any derivative works of Licensed IP created by or on behalf
of Licensee are and shall remain the sole and exclusive property of Licensee.

 

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IV.               PROTECTION OF LICENSED TECHNOLOGY

 

4.1.              Protection of Intellectual Property Rights.

 

(a)  Licensor and the Licensee shall cooperate to police diligently the Licensed
IP. The Parties shall promptly notify each other in writing of any unauthorized
use, infringement, misappropriation, dilution or other violation of the Licensed
IP of which it becomes aware.

 

(b)  Licensor shall have the primary right, but not the obligation, to bring and
control any suits against any unauthorized use, infringement, misappropriation,
dilution or other violation of the Licensed IP. Licensee agrees to cooperate
with Licensor in any litigation or other enforcement action that Licensor may
undertake to enforce or protect the Licensed IP and, upon Licensor’s request, to
execute, file and deliver all documents and proof necessary for such purpose,
including being named as a Party to such litigation as required by law. Licensee
shall have the right to participate and be represented in any such action, suit
or proceeding by its own counsel and at its own cost and expense. Licensee shall
have no claim of any kind against Licensor based on or arising out of Licensor’s
handling of or decisions concerning any such action, suit, proceeding,
settlement, or compromise, and the Licensee hereby irrevocably releases Licensor
from any such claim; provided, however, that Licensor shall not settle,
compromise or voluntarily dispose of any such action, suit or proceeding in a
manner that would materially restrict the rights or benefits of Licensee
pursuant to this agreement without the prior consent of Licensee, which consent
shall not be unreasonably withheld, delayed or conditioned. In the event
Licensor elects not to exercise this right, Licensee, upon prior written
approval from Licensor, may bring such suit, and Licensor agrees to reasonably
cooperate with Licensee, including being named as a party to such suit. If
Licensee elects to bring such suit, it shall be entitled to that portion of any
award based upon the actual damage to its business directly resulting from such
unauthorized use, infringement, misappropriation, dilution or other violation of
the Licensed IP.

 

(c)  Unless the parties should otherwise agree, each Party shall bear the costs,
fees and expenses incurred by it in complying with the provisions of
Section 4.1, including those incurred in bringing or controlling any such suits.

 

V.                 REPRESENTATIONS AND WARRANTIES

 

5.1.              Each Party hereto represents and warrants that (i) it is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, (ii) it has the corporate power and authority to
enter into this Agreement, and the execution, delivery and performance of this
Agreement and the transactions and other documents contemplated hereby have been
duly authorized by all necessary corporate action on the part of Licensor, and
(iii) this Agreement has been duly executed and delivered by the authorized
officers of such Party, and constitutes a legal, valid and binding obligation of
the Party, fully enforceable against such Party in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws of general applicability relating to or affecting
creditors’ rights, and general equity principles.

 

VI.               INDEMNIFICATION

 

6.1.              No Duty to Indemnify. Licensor shall not under any
circumstances, be obligated to indemnify, defend, or hold Licensee, its
Affiliates, or their respective representatives, officers, directors,
stockholders, employees, or agents (the “Licensee Parties”), harmless from any
liability, claims, demands, causes of action, judgments, damages, or expenses
(including reasonable attorneys’ and experts’ fees and costs) which the Licensee
Parties may incur or become liable for as a result of Licensee’s and its
sublicensees’ use of the Licensed IP in accordance with this Agreement.

 

6.2.              Licensee’s Duty to Indemnify. Licensee shall indemnify,
defend, and hold Licensor, its Affiliates, and their respective representatives,
officers, directors, stockholders, employees, and agents (the “Licensor
Parties”), harmless from any and all liability, claims, demands, causes of
action, judgments, damages, and expenses (including reasonable attorneys’ and
experts’ fees and costs) which the Licensor Parties may incur or become liable
for as a result of claims by any Person to the extent arising from Licensee’s
and its sublicensees’ use of Licensed IP other than any third party claims
covered by Section 6.1; provided, however, that Licensee shall not be obligated
to defend or hold harmless any Licensor Parties in the event that such claims,
demands, causes of action, judgments, damages and, expenses arose out of willful
misconduct, gross negligence, or bad faith by any Licensor Parties.

 

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VII.              LIMITATIONS ON LIABILITY

 

7.1.              Disclaimer of Consequential and Special Damages. TO THE
MAXIMUM EXTENT PERMITTED BY LAW, NEITHER PARTY, NOR ANY RELATED ENTITY THEREOF,
SHALL BE LIABLE UNDER THIS AGREEMENT TO THE OTHER PARTY, ANY RELATED ENTITY
THEREOF, OR ANY OTHER THIRD PERSON, FOR ANY INDIRECT, INCIDENTAL,CONSEQUENTIAL,
SPECIAL, RELIANCE OR PUNITIVE DAMAGES OR LOST OR IMPUTED PROFITS, LOST DATA OR
COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, WHETHER LIABILITY IS
ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY)
INDEMNITY OR CONTRIBUTION, AND IRRESPECTIVE OF WHETHER A PARTY OR ANY RELATED
ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.

 

VIII.             MISCELLANEOUS

 

8.1.              Notices. All notices, requests and other communications to any
Party hereunder shall be in writing (including facsimile transmission) and shall
be given (i) by personal delivery to the appropriate address as set forth below
(or at such other address for the Party as shall have been previously specified
in writing to the other Party), (ii) by reliable overnight courier service (with
confirmation) to the appropriate address as set forth below (or at such other
address for the Party as shall have been previously specified in writing to the
other Party), or (iii) by facsimile transmission (with confirmation) to the
appropriate facsimile number set forth below (or at such other facsimile number
for the Party as shall have been previously specified in writing to the other
Party) with follow-up copy by reliable overnight courier service the next
Business Day:

 

if to Licensor, to:

 

Monitor Dynamics, Inc.

12500 Network Blvd., Suite 306

San Antonio, Texas 78249

Facsimile No.: 210-579-1554

Attention:  President

 

and

 

if to Licensee, to:

 

MDI, Inc.

c/o Carmelo Gordian

Andrews & Kurth LLP

111 Congress Avenue

Suite 1700

Austin, Texas 78701

Facsimile No.: (512) 320-9292

 

All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. (local
time, place of receipt) and such day is a Business Day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to have
been received until the next succeeding Business Day in the place of receipt.

 

8.2.              Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by an
authorized officer of each Party. Except as otherwise provided in this
Agreement, any failure of any of the Parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the Party entitled to
benefits thereof only by a written instrument signed by an authorized officer of
the Party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.

 

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8.3.              Headings. The article, section, paragraph and other headings
contained in this Agreement are  inserted for convenience of reference only and
shall not affect in any way the meaning or interpretation of this Agreement.

 

8.4.              Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.

 

8.5.              Entire Agreement. This Agreement, the Stock Purchase Agreement
and the other ancillary agreements constitute the entire agreement between the
Parties hereto with respect to the subject matter hereof, and supersede and
cancel all prior agreements, negotiations, correspondence, undertakings,
understandings and communications of the Parties, oral and written, with respect
to the subject matter hereof.

 

8.6.              Governing Law and Jurisdiction.  This Agreement is governed by
and will be construed and enforced in accordance with the laws of the State of
Texas regardless of the jurisdiction in which litigation relating to the subject
matter hereof is initiated or continued.  In the event any action is brought
based on this Agreement the venue for any such action will be any court of
competent jurisdiction of the State of Texas located in Bexar, County, Texas.

 

8.7.              Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

8.8.              Assignment. This Agreement may not be assigned by any Party
hereto without the written consent of the other Party; provided, however, that
each Party may assign this Agreement to a purchaser of substantially all of the
Party’s shares or assets or to that Party’s parent, controlled subsidiary or
controlled affiliate, provided that such purchaser agrees to be bound by all of
the terms and conditions of this Agreement. No assignment shall relieve either
Party of any of its rights and obligations hereunder.

 

8.9.              Fees and Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, each Party shall bear its own
fees and expenses incurred in connection with the transactions contemplated by
this Agreement.

 

8.10.            Binding Nature; Third-Party Beneficiaries. This Agreement shall
be binding upon and inure solely to the benefit of the Parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended to or shall confer upon any other Person or Persons any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.

 

8.11.            Severability. This Agreement shall be deemed severable; the
invalidity or unenforceability of any term or provision of this Agreement shall
not affect the validity or enforceability of this Agreement or of any other term
hereof, which shall remain in full force and effect, for so long as the economic
or legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any Party. If it is ever held that
any restriction hereunder is too broad to permit enforcement of such restriction
to its fullest extent, each Party agrees that such restriction may be enforced
to the maximum extent permitted by law, and each Party hereby consents and
agrees that such scope may be judicially modified accordingly in any proceeding
brought to enforce such restriction.

 

8.12.            Specific Performance. The Parties hereto agree that irreparable
damage would occur in the event that any provision of this Agreement was not
performed in accordance with the terms hereof and that the Parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.

 

8.13.            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
provisions of this Agreement.

 

8.14.            Interpretation.  Any reference to any federal, state, local or
non-U.S. statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires.

 

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8.15             Legal Fees and Costs.  In the event suit is instituted for
breach or default of any of the conditions of this Agreement, then and in that
event, the party prevailing in any action, in law or equity, will be entitled to
reasonable attorneys’ fees and court costs.

 

IN WITNESS WHEREOF , the Parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

 

 

LICENSOR

 

MONITOR DYNAMICS, INC.

 

 

/s/ J. Collier Sparks

 

By: J. Collier Sparks

 

Its: President

 

 

 

LICENSEE

 

 

 

MDI, INC.

 

 

 

 

 

/s/ John Linton

 

By: John Linton

 

Its: Officer

 

 

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