STOCK PURCHASE AGREEMENT
 
This STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of this 28th day of
August, 2009 by and between MDI, Inc., a Delaware corporation, with its
principal office at 12500 Network Blvd., Suite 306, San Antonio, Texas 78249
(the “Company”), and the undersigned Investor (the “Investor”).
 
WHEREAS, the Company desires to issue, in a private placement (the “Offering”),
$1,000,000 in aggregate purchase price of its Common Stock, $.01 par value (the
“Shares”), on the terms and conditions hereinafter set forth, and the Investor
desires to acquire 4,000,000 Shares, subject to the terms and conditions set
forth herein.
 
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
 
I.  
SUBSCRIPTION FOR SHARES AND REPRESENTATIONS BY AND COVENANTS OF INVESTOR

 
1.1 Subject to the terms and conditions hereinafter set forth, the Investor
hereby subscribes for and agrees to purchase from the Company 4,000,000 Shares
at a price of $0.25 per Share. The Company agrees to sell such Shares to the
Investor for said purchase price. The purchase price is payable by wire transfer
of funds directly by the Investor to the Company on the Closing (as defined
herein).
 
1.2 Subject to the terms and conditions hereinafter set forth, the Company
agrees to issue to Investor at the Closing a Warrant to purchase 4,000,000
Shares (the Shares issuable upon exercise of the Warrant, the “Warrant Shares”),
at an exercise price equal to $0.60 per Share, which shall be appropriately
adjusted for any recapitalizations, stock combinations, stock dividends, stock
splits and the like which occur after the Closing.
 
1.3 The Investor recognizes that the purchase of Shares involves a high degree
of risk, including but not limited to risks that (i) the Company will need
additional capital but has no assurance of additional necessary capital; (ii) an
investment in the Company is highly speculative and only investors who can
afford the loss of their entire investment should consider investing in the
Company and the Shares; (iii) an investor may not be able to liquidate his
investment; and (iv) transferability of the securities comprising the Shares is
extremely limited.
 
1.4 The Investor represents that he is an “accredited investor” as such term is
defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended (the “Act”), and that it/he is able to bear the economic risk
of an investment in the Shares.
 
1.5 The Investor acknowledges that he has prior investment experience, including
investment in non-listed and non-registered securities, or he has employed the
services of an investment advisor, attorney or accountant to read all of the
documents furnished or made available by the Company both to him and to all
other prospective investors in the Shares and to evaluate the merits and risks
of such an investment on his behalf, and that he recognizes the highly
speculative nature of this investment.  Such Investor, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the securities comprising the Shares, and
has so evaluated the merits and risks of such investment.  Such Investor is able
to bear the economic risk of an investment in the Shares and, at the present
time, is able to afford a complete loss of such investment.
 
1.6 The Investor hereby represents that he has been furnished by the Company
during the course of this transaction with all information regarding the Company
which he had requested or desired to know; that all documents which could be
reasonably provided have been made available for his inspection and review; that
he has been afforded the opportunity to ask questions of and receive answers
from duly authorized officers or other representatives of the Company concerning
the terms and conditions of the Offering, and any additional information which
he had requested.
 
1.7 The Investor acknowledges that this offering of Shares may involve tax
consequences. The Investor acknowledges that he must retain his own professional
advisors to evaluate the tax and other consequences of an investment in the
Shares.
 
1.8 The Investor acknowledges that this offering of Shares has not been reviewed
by the United States Securities and Exchange Commission (the “SEC”) because of
the Company’s representations that this is intended to be a nonpublic offering
pursuant to Sections 4(2) or 3(b) of the Act. The Investor agrees that he will
not sell or otherwise transfer such securities unless they are registered under
the Act or unless an exemption from such registration is available.
 
1.9 Such Investor understands that the Shares are “restricted securities” and
have not been registered under the Act or any applicable state securities law
and is acquiring the Shares as principal for its own account and not with a view
to or for distributing or reselling such Shares or any part thereof, has no
present intention of distributing any of such Shares and has no arrangement or
understanding with any other persons regarding the distribution of such Shares
(this representation and warranty not limiting such Investor’s right to sell the
Shares in compliance with applicable federal and state securities laws).  Such
Investor does not have any agreement or understanding, directly or indirectly,
with any person or entity to distribute any of the Shares.
 
1.10 The Investor understands that although a public market exists for the
Shares, Rule 144 (the “Rule”) promulgated under the Act requires, among other
conditions, a one year holding period prior to the resale (in limited amounts)
of securities acquired in a non-public offering without having to satisfy the
registration requirements under the Act. The Investor understands that the
Company makes no representation or warranty regarding its fulfillment in the
future of any reporting requirements under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or its dissemination to the public of any
current financial or other information concerning the Company, as is required by
Rule 144 as one of the conditions of its availability. The Investor understands
and hereby acknowledges that the Company is under no obligation to register the
securities comprising the Shares under the Act. The Investor consents that the
Company may, if it desires, permit the transfer of the securities comprising the
Shares out of his name only when his request for transfer is accompanied by an
opinion of counsel reasonably satisfactory to the Company that neither the sale
nor the proposed transfer results in a violation of the Act or any applicable
state blue sky laws (collectively “Securities Laws”). The Investor agrees to
hold the Company and its directors, officers and controlling persons and their
respective heirs, representatives, successors and assigns harmless and to
indemnify them against all liabilities, costs and expenses incurred by them as a
result of any misrepresentation made by him contained herein or any sale or
distribution by the undersigned Investor in violation of any Securities Laws.
 
1.11 The Investor acknowledges that he is (a) aware that the United States
securities laws prohibit any person who has material non-public information
about a company from purchasing or selling securities of such company, or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell such
securities and (b) familiar with the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and the rules and regulations promulgated thereunder, and
the Investor will not use, or cause any third party to use, any such material
non-public information in contravention of such act or any such rules and
regulations, including Rules 10b-5 and 14a-3.
 
1.12 The Investor consents to the placement of one or more legends on any
certificate or other document evidencing his Shares stating that they have not
been registered under the Act and setting forth or referring to the restrictions
on transferability and sale thereof.
 
1.13 The Investor hereby represents that the address of Investor furnished by
him on the signature page of this Stock Purchase Agreement is the undersigned’s
principal residence if he is an individual or its principal business address if
it is a corporation or other entity.
 
1.14 If the undersigned Investor is a partnership, corporation, trust or other
entity, such partnership, corporation, trust or other entity further represents
and warrants that: (i) it is authorized and otherwise duly qualified to purchase
and hold the Shares; and (ii) that this Stock Purchase Agreement has been duly
and validly authorized, executed and delivered and constitutes the legal,
binding and enforceable obligation of the undersigned.
 
1.15 General Solicitation.  Such Investor is not purchasing the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement.
 
1.16 Short Sales.  Such Investor has not directly or indirectly, nor has any
Person acting on behalf of or pursuant to any understanding with such Investor,
executed any Short Sales in the securities of the Company (including, without
limitation, any Short Sales involving the Company’s securities) since 4 P.M.
(New York Time) on May 28, 2009 which was the time that such Investor was first
contacted regarding an investment in the Company (“Discussion Time”).  For
purposes of this Section, “Short Sales” include, without limitation, all “short
sales” as defined in Rule 3b-3 of the Exchange Act.  Such Investor covenants
that neither it nor any affiliates acting on its behalf or pursuant to any
understanding with it will execute any Short Sales (i) during the period from
the Discussion Time until prior to the time that the transactions contemplated
by this Agreement are first publicly announced or (ii) at any time after the
transactions contemplated by this Agreement are first publicly announced.
 
II.  
REPRESENTATIONS BY THE COMPANY

 
The Company represents and warrants to the Investor that prior to the
consummation of this Offering and at the date of the closing of this offering
(the “Closing Date”), except as set forth on the Disclosure Schedule attached
hereto as Exhibit A (the “Disclosure Schedule”):
 
2.1 Organization. Each of the Company and the Subsidiaries (as hereinafter
defined) is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its state or country of
organization and has all requisite corporate or limited liability company power
and authority to own and lease its properties, to carry on its business as
currently conducted and as proposed to be conducted, to execute and deliver the
Stock Purchase Agreement and Warrant (collectively, the “Transaction Documents”)
and to carry out the transactions contemplated by the Transaction Documents as
appropriate and is duly licensed or qualified to do business as a foreign
corporation in each jurisdiction in which the conduct of its business or
ownership or leasing of its properties requires it to be so qualified.
 
2.2 Capitalization.  The authorized capital stock of the Company consists solely
of 100,000,000 shares of Common Stock, par value $0.01 per share, and 2,000,000
shares of preferred stock, par value $5.00 per share (“Preferred Stock”).  As of
August [__], 2009, 3,563,439 shares of Common Stock were issued and outstanding,
19,535 shares of Preferred Stock were issued and outstanding, no shares of
Common Stock or Preferred Stock were held in the treasury of the Company and
1,000,000 shares of Common Stock were reserved for issuance upon the exercise of
options issued pursuant to the MDI Option Plans.  The Company has not issued any
capital stock since such date other than pursuant to the exercise of employee
stock options and/or restricted shares under the Company’s stock option plans.
All issued and outstanding shares of the Company are validly issued, fully paid
and nonassessable and have not been issued in violation of the preemptive rights
of any stockholder of the Company. All prior sales by the Company of securities
of the Company were either registered under the Act and applicable state
securities laws or exempt from such registration, and no security holder has any
rescission rights with respect thereto.
 
2.3 Valid Issuance of Shares, Etc. The Shares, the Warrant and the Warrant
Shares have been duly authorized, and the Shares and the Warrant Shares, upon
issuance pursuant to the terms hereof and the terms of the Warrant,
respectively, will be validly issued, fully paid and nonassessable and not
subject to any encumbrances, preemptive rights or any other similar contractual
rights of the stockholders of the Company or any other Person. The Company has
reserved from its duly authorized capital stock the number of shares of Common
Stock issuable upon execution of this Agreement and upon exercise in full of the
Warrant.
 
2.4 Subsidiaries and Investments. Except for the subsidiaries set forth on
Schedule 2.4 of the Disclosure Schedule (the “Subsidiaries”), the Company has no
subsidiaries. The Company does not own, directly or indirectly, any capital
stock or other equity ownership or proprietary interests in any other
corporation, association, trust, partnership, joint venture or other entity. The
Company owns all of the capital stock of the Subsidiaries, and there are no
warranties, options, agreements, convertible securities, preemptive rights to
subscribe for or other commitments pursuant to which any of the Subsidiaries may
become obligated to issue any shares of its capital stock or any other
securities to any person other than the Company. No actions have been taken by
the Company or the Company’s Board of Directors with respect to the sale or
disposition of the stock, ownership interests or assets of the Subsidiaries.
 
2.5 Title.  Except as set forth on the Disclosure Schedule, each of the Company
and the Subsidiaries has good and valid title to all properties and assets,
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as are not materially significant or important in relation to the
Company’s and the Subsidiaries’ business, taken as a whole; except as set forth
on the Disclosure Schedule, all of the material leases and subleases under which
each of the Company and the Subsidiaries is the lessor or sublessor of
properties or assets or under which each of the Company and the Subsidiaries
holds properties or assets as lessee or sublessee are in full force and effect,
and neither the Company nor any Subsidiary is in default in any material respect
with respect to any of the terms or provisions of any of such leases or
subleases, and no material claim has been asserted by anyone adverse to rights
of the Company or any Subsidiary as lessor, sublessor, lessee or sublessee under
any of the leases or subleases mentioned above, or affecting or questioning the
right of the Company or any Subsidiaries to continued possession of the leased
or subleased premises or assets under any such lease or sublease. The Company
owns or leases all such properties as are necessary to its operations as now
conducted and to be conducted, as presently planned.
 
2.6 Proprietary Rights.  Each of the Company and the Subsidiaries owns or
possesses adequate and enforceable rights to use all patents, patent
applications, trademarks, service marks, copyrights, trade secrets, processes,
formulations, technology or know-how used or proposed to be used in the conduct
of its business (the “Proprietary Rights”). Other than as set forth in the
Company’s filings with the SEC or the Disclosure Schedule, neither the Company
nor any Subsidiary has received any notice of any claims, nor does it have any
knowledge of any threatened claims, and knows of no facts which would form the
basis of any claim, asserted by any person to the effect that the sale or use of
any product or process now used or offered by the Company or any Subsidiary or
proposed to be used or offered by the Company or any Subsidiary infringes on any
patents or infringes upon the use of any such Proprietary Rights of another
person and, to the best of the Company’s knowledge, no others have infringed the
Company’s or any Subsidiary’s Proprietary Rights.
 
2.7 Litigation.  Other than as set forth in the Company’s filings with the SEC
or the Disclosure Schedule, there is no material action, suit, investigation,
customer complaint, claim or proceeding at law or in equity by or before any
arbitrator, governmental instrumentality or other agency now pending or, to the
knowledge of the Company, threatened against the Company or any Subsidiary the
adverse outcome of which would materially adversely affect the Company’s or any
Subsidiary’s business or prospects. Except as set forth in the Disclosure
Schedule, neither the Company nor any Subsidiary is subject to any judgment,
order, writ, injunction or decree of any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign which would materially adversely affect the Company’s or any
Subsidiary’s business or prospects.
 
2.8 Non-Defaults; Non-Contravention.  The execution and delivery of the
Transaction Documents and consummation of the transactions contemplated herein
or therein will not result in a violation of or constitute a default in the
performance or observance of any obligation, nor result in or give to any person
any right of payment or reimbursement, termination, cancellation, modification
or acceleration of, or result in the creation or imposition of any lien upon any
of the assets or properties of the Company or any Subsidiaries (i) under its
Certificate of Incorporation, or its By-laws, or any indenture, mortgage,
contract, material purchase order or other agreement or instrument to which the
Company or any Subsidiary is a party or by which it or its property is bound or
affected or (ii) with respect to any material order, writ, injunction or decree
of any court of any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, and
there exists no condition, event or act which constitutes, nor which after
notice, the lapse of time or both, could constitute a default under any of the
foregoing, which in either case would have a material adverse effect on the
business, financial condition or prospects of the Company or any Subsidiary. To
the knowledge of the Company, neither the Company nor any Subsidiary is in
violation of or default under any of (i) or (ii) above.
 
2.9 Taxes.  Each of the Company and the Subsidiaries has filed all federal,
state, local and foreign tax returns which are required to be filed by it and
all such returns are true and correct in all material respects. Each of the
Company and the Subsidiaries has paid all taxes pursuant to such returns or
pursuant to any assessments received by it or which it is obligated to withhold
from amounts owing to any employee, creditor or third party. Each of the Company
and the Subsidiaries has properly accrued all taxes required to be accrued.
Neither the Company nor any Subsidiary has waived any statute of limitations
with respect to taxes or agreed to any extension of time with respect to any tax
assessment or deficiency.
 
2.10 Compliance With Laws; Licenses, Etc.  Other than as set forth in the
Company’s filings with the SEC and the Disclosure Schedule, neither the Company
nor any Subsidiary has received notice of any violation of or noncompliance with
any federal, state, local or foreign, laws, ordinances, regulations and orders
applicable to its business which has not been cured, the violation of, or
noncompliance with which, would have a materially adverse effect on the business
or operations of the Company or any Subsidiary. To the knowledge of the Company,
each of the Company and the Subsidiaries has all licenses and permits and other
governmental certificates, authorizations and permits and approvals
(collectively, “Licenses”) required by every federal, state and local government
or regulatory body for the operation of its business as currently conducted and
the use of its properties, except where the failure to be licensed would not
have a material adverse effect on the business of the Company or any Subsidiary.
The Licenses are in full force and effect and no violations are or have been
recorded in respect of any License and no proceeding is pending or threatened to
revoke or limit any thereof.
 
2.11 Authorization of Agreement, Etc.  The Company has the necessary corporate
power and authority to enter into the Transaction Documents and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.  The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly and validly approved
by the Board of Directors of the Company. No other corporate proceedings are
necessary to authorize the execution, delivery and performance of the
Transaction Documents by the Company, and the consummation by the Company of the
transactions contemplated hereby and thereby.  The Transaction Documents have
been duly and validly executed and delivered by the Company and constitute
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms.
 
2.12 Exemption from Registration.  Assuming the accuracy of the information
provided by the Investor in connection with this Stock Purchase Agreement, the
offer and sale of the Shares pursuant to the terms of this Stock Purchase
Agreement are exempt from the registration requirements of the Act and the rules
and regulations promulgated thereunder (the “Regulations”). To the knowledge of
the Company, the Company is not disqualified from the exemption under Regulation
D by virtue of the disqualifications contained in Rule 505(b )(2)(iii) or Rule
507 promulgated thereunder.
 
2.13 Brokers.  Neither the Company nor any of its officers, directors, employees
or stockholders has employed any broker or finder in connection with the
transactions contemplated by this Stock Purchase Agreement.
 
2.14 Title to Shares.  The Shares and Warrant Shares when issued and delivered
will be validly issued and outstanding, fully paid and nonassessable. When
certificates representing the securities comprising the Shares and Warrant
Shares shall have been duly delivered to the Investor and payment shall have
been made therefor, the Investor shall have good and valid title to the Shares
and Warrant Shares free and clear of all liens, encumbrances and claims
whatsoever (with the exception of claims arising or through the acts of the
Investor and except as arising from applicable federal and state securities
laws), and the Company shall have paid all taxes, if any, in respect of the
original issuance thereof.
 
2.15 Right of First Refusal.  No person, firm or other business entity is a
party to any agreement, contract or understanding, written or oral entitling
such party to a right of first refusal with respect to the Company.
 
2.16 Securities Exchange Act Compliance.  To the knowledge of the Company, the
Company has filed with the SEC on a timely basis all filings required of a
company whose securities have been registered under the Exchange Act. All
information contained in such filings is true, accurate and complete in all
material respects. The Company shall use its best efforts to maintain the
registration of its Common Stock under the Exchange Act and to make all filings
thereunder on a timely basis. For the purpose of this paragraph, filings
pursuant to Rule 12b-25 of the Exchange Act shall be deemed timely.
 
2.17 Sarbanes-Oxley.  To the knowledge of the Company, the Company is in
material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the Closing Date.
 
2.18 Registration Rights.  No person has any right to cause the Company to
effect the registration under the Act of any securities of the Company.
 
2.19 Warrants, Preemptive Rights, Etc.  Except as set forth in the Company’s
filings with the SEC and the Disclosure Schedule, there are not, nor will there
be immediately after the Closing (as hereinafter defined), any outstanding
warrants, options (except options issued pursuant to, or upon conversion of any
option issued pursuant to, the Company’s employee stock option plan, agreements,
convertible securities, preemptive rights to subscribe for or other commitments
pursuant to which the Company is, or may become, obligated to issue any shares
of its capital stock or other securities of the Company and this Offering will
not cause any anti-dilution adjustments to such securities or commitments.
 
2.20 Financial Statements.  The Company’s Form 10-K for the year ended December
31, 2008 contains the Company’s (i) Balance Sheets at December 31, 2008 (the
“Balance Sheet Date”), (ii) Statements of Operations for each of the last two
years ending December 31, 2007 and December 31, 2008, and (iii) Statements of
Cash Flow for each of the last two years ending December 31, 2007 and December
31, 2008 (hereinafter referred to collectively as the “Financial Statements”).
The Financial Statements have been prepared in conformity with generally
accepted accounting principles consistently applied and show all material
liabilities, absolute or contingent, of the Company required to be recorded
thereon and present fairly the financial position and results of operations of
the Company as of the dates and for the periods indicated.
 
2.21 Absence of Changes.  Other than as set forth in the Company’s filings with
the SEC and the Disclosure Schedule, since the Balance Sheet Date, neither the
Company nor any Subsidiary has incurred any liabilities or obligations, direct
or contingent, not in the ordinary course of business, or entered into any
transaction not in the ordinary course of business, which is material to the
business of the Company and the Subsidiaries, taken as a whole, and there has
not been any change in the capital stock of, or any incurrence of long-term debt
by, the Company or any Subsidiary, or any issuance of options, warrants or other
rights to purchase the capital stock of the Company or any Subsidiary, or any
adverse change or any development involving, so far as the Company can now
reasonably foresee, a prospective adverse change in the condition (financial or
otherwise), net worth, results of operations, business, key personnel or
properties which would be material to the business or financial condition of the
Company or any Subsidiary, and neither the Company nor any Subsidiary has become
a party to, and neither the business nor the property of the Company or any
Subsidiary has become the subject of, any material litigation whether or not in
the ordinary course of business.
 
III.  
CLOSING

 
3.1 Closing.  The closing of the transaction contemplated hereby (the “Closing”)
shall take place at the offices of the Company on or before September 4, 2009.
At the Closing, payment for the Shares issued and sold by the Company shall be
made against delivery of (i) certificates representing the Shares and (ii) the
Warrant.
 
3.2 Conditions to Investor’s Obligations.  The obligations of the Investor
hereunder will be subject to the accuracy of the representations and warranties
of the Company herein contained as of the date hereof and as of the Closing
Date, and to the performance by the Company of its obligations hereunder and to
the following additional conditions:
 
(a) Due Qualification or Exemption. (i) The offering contemplated by this Stock
Purchase Agreement will become qualified or be exempt from qualification under
applicable state securities laws not later than the Closing Date, and (ii) at
the Closing Date no stop order suspending the sale of the Shares shall have been
issued, and no proceeding for that purpose shall have been initiated or
threatened;
 
(b) Compliance with Agreements. The Company will have complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing; and
 
(c) Corporate Action. The Company will have taken all necessary corporate
action, including, without limitation, obtaining the approval of the Company’s
board of directors, for the execution and delivery of the Stock Purchase
Agreement and Warrant, and the performance by the Company of its obligations
hereunder and thereunder, and the offering contemplated hereby.
 
(d) Legal Opinion. The Investor shall have received from the General Counsel of
the Company an opinion addressed to Investor, in substantially the form of
Exhibit B hereto.
 
(e) Acquisition of Almana Networks International, Inc. All conditions to the
closing (other than the effectiveness of this Agreement) of that certain Stock
Purchase Agreement, dated as of August, 2009, by and among the Company and the
other signatories thereto shall have been met or waived.
 
(f) Appointment of Chief Transition Officer. The Board of Directors of the
Company shall have taken all action such that, effective at the Closing, John
Linton shall be appointed as the Company’s Chief Transition Officer, who shall
report directly to the Board of Directors, and by whom all actions taken by
officers on behalf of the Company must be approved.
 
(g) Appointment of Board Members. The Board of Directors of the Company and the
Company shall have taken all necessary action such that immediately following
the Closing, the size of the Company’s Board of Directors shall be eight, and
the Company’s Board of Directors shall consist of James Power, Carlo Loi, Peter
Knepper, Collier Sparks, and four directors nominated by the Investor (the
“Investor Directors”). The Board of Directors of the Company shall have taken
all necessary action such that immediately following the Closing, the Company’s
Nominating Committee shall consist of three members at least two of which are
Investor Directors (as defined below).
 
IV.  
TERMS OF INVESTMENT

 
4.1 Expenses of Offering.  The Company shall, at the Closing, pay the reasonable
and actual fees and expenses of Investor, including but not limited to, the
reasonable and actual out of pocket attorneys’ fees and expenses of Andrews
Kurth LLP, outside legal counsel to the Investor, incurred in connection with
the proposed Offering.
 
4.2 The Investor hereby authorizes and directs the Company to deliver the
securities to be issued to such Investor pursuant to this Stock Purchase
Agreement to the address indicated herein.
 
4.3 The Investor acknowledges that at such time, if ever, as any of the Shares
are registered, sales of such Shares will be subject to state securities laws,
including those of states which may require any securities sold therein to be
sold through a registered broker­-dealer or in reliance upon an exemption from
registration.
 
V.  
MISCELLANEOUS

 
5.1 Any notice or other communication given hereunder shall be deemed sufficient
if in writing and sent by registered or certified mail, return receipt
requested, addressed to the Company, at its registered office, 12500 Network
Blvd., Suite 306, San Antonio, Texas 78249, Attention: Chief Executive Officer,
and to the Investor at his address indicated on the signature page of this Stock
Purchase Agreement. Notices shall be deemed to have been given on the date of
mailing, except notices of change of address, which shall be deemed to have been
given when received.
 
5.2 Except to the extent required by applicable laws, rules, regulations or
stock exchange requirements, neither (i) the Company, the Subsidiaries or any of
their affiliates nor (ii) Investor or any of its affiliates shall, without the
written consent of the other, make any public announcement or issue any press
release with respect to the transactions contemplated by this Agreement. In no
event will either (i) the Company, the Subsidiaries or any of their Affiliates
or (ii) Investor or any of its Affiliates make any public announcement or issue
any press release with respect to the transactions contemplated by this
Agreement without consulting with the other party, to the extent feasible, as to
the content of such public announcement or press release.
 
5.3 The Company covenants to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company pursuant to all applicable securities laws, including the
Exchange Act. At any time if the Company is not required to file reports
pursuant to such laws, it will prepare and furnish to the Investor and make
publicly available in accordance with paragraph (c) of Rule 144 such information
as is required for the Investor to sell the Shares and the Warrant Shares under
Rule 144. The Company further covenants that it will take such further action as
Investor may reasonably request to satisfy the provisions of Rule 144 applicable
to the issuer of securities relating to transactions for the sale of securities
pursuant to Rule 144.
 
5.4 The Company agrees to reserve from its duly authorized capital stock the
total number of Shares issuable upon execution of this Agreement and upon the
exercise in full of the Warrant.
 
5.5 The Company agrees to place the funds sent by Investor to purchase the
Shares (the “Investor Funds”) in a segregated bank account. The Investor Funds
may not be spent, encumbered or otherwise removed from this segregated bank
account without the prior consent of the Company’s Board of Directors as
constituted after the Closing, including the consent of each of the Investor
Directors. The Chief Transition Officer of the Company shall have sole signatory
power over such segregated bank account.
 
5.6 The Company agrees to take all actions necessary to set an annual meeting of
the shareholders of the Company, the date of which shall be within sixty days of
the date of Closing.
 
5.7 Unless the Investor in Shares has given his approval, this Stock Purchase
Agreement shall not be changed, modified or amended and may not be discharged
except by performance in accordance with its terms.
 
5.8 This Stock Purchase Agreement shall be binding upon and inure to the benefit
of the parties hereto and to their respective heirs, legal representatives,
successors and assigns. This Stock Purchase Agreement sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.
 
5.9 Notwithstanding the place where this Stock Purchase Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of Texas.
 
5.10 This Stock Purchase Agreement may be executed in counterparts. Upon the
execution and delivery of this Stock Purchase Agreement by the Investor, this
Stock Purchase Agreement shall become a binding obligation of the Investor with
respect to the purchase of Shares as herein provided; subject, however, to the
right hereby reserved to the Company to enter into the same agreements with
other Investors and to add and/or to delete other persons as Investors.
 
5.11 The holding of any provision of this Stock Purchase Agreement to be invalid
or unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Stock Purchase Agreement, which shall remain in full force and
effect.
 
5.12 It is agreed that a waiver by either party of a breach of any provision of
this Stock Purchase Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.
 
5.13 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this Stock
Purchase Agreement.
 
5.14 Whenever the context of this Stock Purchase Agreement requires, the gender
of all words herein shall include the masculine, feminine, and neuter, and the
number of all words herein shall include the singular and plural.
 

 
(Signature(s) on following page.)
 

 

 
 

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IN WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as
of the day and year first written above.
 

Signature of Investor

Printed Name of Investor

Address of Investor

Taxpayer Identification Number

Company:
MDI, INC.

________________________
By:           J. Collier Sparks
Title:                      President and CEO
Date:                      August                      , 2009