Document:

Exhibit 10.4

 

INTELLECTUAL
PROPERTY LICENSE AGREEMENT

By &
between

 

MDI, Inc (“Licensor”)

&

Monitor Dynamics, 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
(“Licensee”), and MDI, Inc, a Delaware corporation (“Licensor”). Licensor and
Licensee are sometimes referred to herein individually as, “Party” and
collectively as, the “Parties.”

 

I                                                         RECITALS

 

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 the following patent
applications and any patent issued thereon: (a) United States Patent
Application “Security Operating System for Networked Access Control with Single
Board Computer Door Controller filed May 8, 2009; (b) United States
Patent Application No. 10/843,180, titled “Integrated Security Suite Architecture
and System Software/Hardware”; (c) United States Patent Application No. 11/268,880,
titled “Integrated Security Suite Architecture and System
Software/Hardware. As used in this Agreement, the term “Intellectual Property” expressly excludes
Trademarks.

 

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.

 

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.

 

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 Licensee,
to:

 

Monitor Dynamics, Inc.

12500 Network
Blvd., Suite 306

San Antonio, Texas
78249

Facsimile No.:
210-579-1554

Attention:  President

 

and

 

if to Licensor,
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.

 

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.

 

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.

 

 

	
  LICENSEE

  	
   

  
	
   

  	
   

  
	
  MONITOR
  DYNAMICS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ J.
  Collier Sparks

  	
   

  
	
  By: J. Collier
  Sparks

  	
   

  
	
  Its: President

  	
   

  
	
   

  	
   

  
	
  LICENSOR

  	
   

  
	
   

  	
   

  
	
  MDI, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ John
  Linton

  	
   

  
	
  By: John Linton

  	
   

  
	
  Its: OfficerExhibit 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.

 

 

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.

 

 

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.

 

 

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.

 

 

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.

 

 

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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