Document:

Exhibit 10.2

 

CALL
AGREEMENT

 

THIS
CALL AGREEMENT (this “Agreement”) is made as of  September 8, 2009 (the “Effective Date”), by
and among MDI, Inc., a Delaware corporation (the “Company”) and the
undersigned (each a “Holder”),
collectively the holders of 9,500,000 shares of the Company’s Common Stock (the
“Shares,” 7,000,000 shares of which
are held in escrow pursuant to that certain Escrow Agreement of even date
herewith between the Company, Holders and the escrow agent thereto).

 

RECITALS:

 

WHEREAS, the Company and Almana Networks
International, Inc., of which the Holders are all the stockholders, have
entered into that certain Stock Purchase Agreement of even date herewith (the “Purchase Agreement”),
pursuant to which the Holders acquired the Shares; and

 

WHEREAS, in order to induce the Company to enter
into the Purchase Agreement, the Holders and the Company desire to enter into
this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the
mutual promises contained herein, and other consideration, the receipt and
sufficiency of which hereby is acknowledged, the parties agree as follows:

 

1.             Call Right.

 

(a)           If and only if the
difference between the amount of sales less costs of goods sold (the “Gross
Margin”) under the contracts,
licenses and other agreements listed on Exhibit A and any other contracts, licenses or agreements entered
into by or through ANI, (collectively, the ANI Contracts”) is less than $1,000,000 for the twelve-month period
commencing on the Effective Date and ending on the one year anniversary
thereof, the Company shall have the right (the “Call Right”) to repurchase that number of Shares (the “Call Option Shares”) determined by multiplying (x) the fraction
obtained by subtracting the Gross Margin from $1,000,000 and dividing such sum
by $1,000,000, by (y) 2,500,000, for a purchase price per share equal to
the fair market value of a share of Common Stock on the Effective Date (the “Call Price”).  The number of
Call Option Shares purchasable from each Holder shall be determined by dividing
the number of shares of Common Stock received by each Holder pursuant to the
Purchase Agreement by 9,500,000, multiplied by the total number of Call Option
Shares. Within five (5) business days after
delivery of a Call Notice to Holder, the Holder shall tender to the Company the
certificate or certificates representing the number of Call Option Shares
determined pursuant to the above formula and specified in the Call Notice.  In the event that the Call Notice is
delivered to the Holder and the Holder has not tendered the certificates
representing such shares within five (5) business days after receipt by
the Holder of the Call Notice, the Company is authorized to cancel the shares
on its books and to place the Call Price in a separate bank account in escrow
for the benefit of the Holder, to be released upon the tender of such
certificate or certificates to the Company.

 

 

2.             Miscellaneous.

 

2.1           Amendments; Waivers.  Any term hereof may be amended or waived only
by the written consent of the Company and the Holders.

 

2.2           Notices.  All notices, requests, consents and other
communications required or permitted hereunder shall be given in accordance
with the Purchase Agreement.

 

2.3           Severability.  If one or more provisions of or obligations
under this Agreement are held to be invalid, illegal, or unenforceable under
applicable law, then such provision or obligation shall be excluded from this
Agreement, and the remaining provisions of and obligations under this Agreement
shall be enforceable in full in accordance with their terms.

 

2.4           Governing Law.  This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Texas, without giving effect to principles of conflicts of law.

 

2.5           Counterparts.  This Agreement may be executed by facsimile
and in two or more counterparts, each of which shall be deemed an original and
all of which taken together shall constitute one agreement.

 

2.6           Successors and Assigns.  The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties.  Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

 

2.7           Per Share Prices.  All per share prices set forth in this
Agreement are subject to adjustment to reflect stock splits, dividends,
recapitalizations and the like.

 

2.8           Legend.  The certificates representing the Shares
shall bear the following legend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE PROVISIONS OF A CALL AGREEMENT DATED SEPTEMBER 8, 2009, BY
AND BETWEEN THE HOLDER AND THE CORPORATION A COPY WHICH IS ON FILE AT THE
OFFICES OF THE CORPORATION.”

 

[SIGNATURE
PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the Company and the
undersigned Holder have entered into this Call Agreement as of the Effective
Date.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  MDI,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  J. Collier Sparks

  
	
   

  	
  Name:

  	
  J.
  Collier Sparks

  
	
   

  	
  Title:

  	
  CEO
  & President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  	
  ALMANA
  NETWORKS INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Swaraj Bontula

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALMANA
  NETWORKS SOLUTIONS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Swaraj Bontula

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LINTON
  INVESTMENTS, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John Linton

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

S-1

 

	
   

  	
  HOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Swaraj Bontula

  
	
   

  	
   

  	
  Swaraj
  Bontula

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  John Linton

  
	
   

  	
   

  	
  John
  Linton

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Robert Schorr

  
	
   

  	
   

  	
  Robert
  Schorr

  

 

 

EXHIBIT A

 

	
  1.

  	
  Revised
  Purchase Order dated April 4, 2009, by and between Arabian Airconditioning
  Contracting and Almana Network Solutions

  
	
   

  	
   

  
	
  2.

  	
  Purchase
  Order dated April 5, 2009, by and between Arabian Airconditioning
  Contracting and Almana Networks Solutions

  
	
   

  	
   

  
	
  3.

  	
  Letter
  of Intent dated April 15, 2009, by and between Al Jaber
  Trading & Contracting and Almana Networks

  
	
   

  	
   

  
	
  4.

  	
  Contract
  Agreement dated April 27, 2009, by and between Diplomat Group W.L.L. and
  Almana Networks Solutions

  
	
   

  	
   

  
	
  5.

  	
  Contract
  for supply, delivery, installation, testing, commissioning and maintenance of
  extra low voltage system dated April 2009, by and between Power Line
  Engineering — Qatar W.L.L. and Almana Networks Solutions

  
	
   

  	
   

  
	
  6.

  	
  Contract
  Agreement dated May 17, 2009, by and between Diplomat Group W.L.L. and
  Almana Networks Solutions

  
	
   

  	
   

  
	
  7.

  	
  Confirmation
  for the preparation of prequalification and material submittal dated
  May 31, 2009, by and between Powermech Engineering W.L.L. and Almana
  Networks SolutionsExhibit
10.3

 

SECURITIES
Purchase Agreement

 

Among

 

214 INVESTMENTS, INC., and

 

(“Buyer”),

 

MDI, INC.

 

(“Seller”),

 

Dated as of September 8,
2009

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I. PURCHASE AND SALE OF THE SECURITIES

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Purchase and Sale of
  the Securities

  	
  1

  
	
  1.2.

  	
  Consideration

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II. CLOSING

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Closing

  	
  1

  
	
  2.2.

  	
  Deliveries at Closing

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III. REPRESENTATIONS AND WARRANTIES OF SELLER

  	
  2

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Organization, Good
  Standing and Qualification

  	
  2

  
	
  3.2.

  	
  Authorization

  	
  2

  
	
  3.3.

  	
  Capitalization of
  Monitor

  	
  3

  
	
  3.4.

  	
  Title to Assets

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV. REPRESENTATIONS AND WARRANTIES OF BUYER

  	
  3

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Organization, Good
  Standing and Qualification

  	
  3

  
	
  4.2.

  	
  Authorization

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V. COVENANTS

  	
  3

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Tax Matters

  	
  3

  
	
  5.2.

  	
  Inter-company Accounts

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI. CONDITIONS TO CLOSING

  	
  4

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Conditions to
  Obligations of Seller

  	
  4

  
	
  6.2.

  	
  Conditions to
  Obligations of Buyer

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII. TERMINATION

  	
  5

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Termination

  	
  5

  
	
  7.2.

  	
  In the Event of
  Termination

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII. MISCELLANEOUS

  	
  6

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Defined Terms

  	
  6

  
	
  8.2.

  	
  Notices

  	
  7

  
	
  8.3.

  	
  Non Survival of
  Representations and Warranties

  	
  8

  
	
  8.4.

  	
  Rules of
  Construction

  	
  8

  
	
  8.5.

  	
  Titles

  	
  8

  
	
  8.6.

  	
  Entire Agreement

  	
  8

  
	
  8.7.

  	
  Assignment

  	
  8

  
	
  8.8.

  	
  Amendment or
  Modification

  	
  9

  
	
  8.9.

  	
  Waiver

  	
  9

  

 

i

 

 

	
  8.10.

  	
  Severability

  	
  9

  
	
  8.11.

  	
  Burden and Benefit

  	
  9

  
	
  8.12.

  	
  Governing Law

  	
  9

  
	
  8.13.

  	
  Consent to Jurisdiction

  	
  9

  
	
  8.14.

  	
  Waiver of Trial by Jury

  	
  10

  
	
  8.15.

  	
  Legal Fees

  	
  10

  
	
  8.16.

  	
  Specific Performance

  	
  10

  
	
  8.17.

  	
  Cumulative Remedies

  	
  10

  
	
  8.18.

  	
  Expenses

  	
  11

  
	
  8.19.

  	
  Representation by
  Counsel

  	
  11

  
	
  8.20.

  	
  Execution and
  Counterparts

  	
  11

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Convertible Promissory Note

  	
   

  

 

ii

 

SECURITIES PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (the “Agreement”)
is made as of the 8th day of September, 2009 by and among 214 Investments, Inc.,
a Texas corporation (the “Buyer”),
and MDI, Inc., a Delaware corporation, (“Seller”).

 

RECITALS

 

A.            Seller owns all of the issued and outstanding shares of
capital stock of Monitor Dynamics, Inc., a Texas corporation and
a wholly owned subsidiary of the Seller (“Monitor”).

 

B.            Buyer desires to purchase from Seller, and Seller desires
to sell to Buyer all of the shares of Monitor (the “Securities”), all upon the terms and subject to the
conditions hereinafter set forth (the “Acquisition”).

 

C.            Buyer, Seller and Monitor desire to make certain
representations, warranties, covenants and agreements in connection with the
Acquisition and to prescribe various conditions to the Acquisition.

 

AGREEMENT

 

In consideration of the mutual covenants and promises
contained in this Agreement and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties to this
Agreement agree as follows:

 

ARTICLE I.

 

PURCHASE AND SALE OF THE
SECURITIES

 

1.1.          Purchase and Sale of the Securities.  Upon the terms and subject to the conditions
contained herein, on the Closing Date, Seller hereby agrees to sell, convey,
transfer, assign and deliver to Buyer, and Buyer hereby agrees to purchase,
acquire and accept from Seller the Securities, constituting all of the issued
and outstanding shares of the common stock of Monitor, no par value (the “Monitor Shares”).

 

1.2.          Consideration.  Upon the terms and subject to the conditions
contained herein, in consideration for the transfer of the Securities pursuant
to Section 1.1 hereof, Buyer shall issue to Seller a convertible
promissory note in the form attached hereto as Exhibit A (the “Note” or the “Consideration.”)

 

ARTICLE II.

 

CLOSING

 

2.1.          Closing.  The closing of the transactions contemplated
herein (the “Closing”) may occur simultaneously at 10:00 a.m. local
time at the offices of Andrews Kurth LLP, 111 Congress Avenue, Suite 1700,
Austin, Texas 78701 or the offices of Seller at 12500 

 

 

Network Blvd., San
Antonio, Texas upon the meeting or waiver of all conditions to closing
contained herein or at such other time, date and location as the parties hereto
agree in writing (the “Closing Date”).

 

2.2.          Deliveries at Closing.

 

(a)           Deliveries by Buyer.  Upon the terms and subject to the conditions
set forth in this Agreement, in reliance on the representations, warranties and
agreements of Seller contained herein, in consideration of the sale,
conveyance, transfer, assignment and delivery of the Securities, Buyer agrees
to deliver to Seller at the Closing on the Closing Date the following:

 

(i)            the
Note; and

 

(ii)           a
certificate executed by the Chief Executive Officer of Buyer certifying as of
the Closing Date all of the matters set forth in Section 6.1(a) hereof.

 

(b)           Deliveries by Seller.  Upon the terms and subject to the conditions
set forth in this Agreement, in reliance upon the representations, warranties
and agreements of Buyer contained herein and the issuance and delivery of the
Note, Seller agrees to deliver (or cause to be delivered) to Buyer the
following:

 

(i)            share
certificates representing the Monitor Shares, duly endorsed or accompanied by
duly executed instruments of transfer; and

 

(ii)           a
certificate executed by the Chief Executive Officer of Seller certifying as of
the Closing Date all of the matters set forth in Section 6.2(a) hereof.

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES OF
SELLER

 

Seller hereby represents
and warrants to Buyer as follows, except as otherwise set forth on the Seller
Disclosure Schedules, which representations and warranties are, as of the date
hereof, and will be, as of the Closing Date, true and correct:

 

3.1.          Organization, Good Standing and
Qualification.  The Seller is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to enter into the Transaction Documents. Monitor is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas.

 

3.2.          Authorization.  All corporate action on the part of Seller
necessary for the authorization, execution and delivery of the Transaction
Documents, the performance of all obligations of Seller hereunder and
thereunder and the transfer of the Securities to Buyer has been taken or will
be taken prior to the Closing, and the Transaction Documents, when executed and
delivered by the Seller, shall constitute valid and legally binding obligations
of Seller, enforceable against Seller in accordance with their respective terms
except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other 

 

2

 

laws of general
application relating to or affecting the enforcement of creditors’ rights
generally, or (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.

 

3.3.          Capitalization of Monitor. The
Monitor Shares have been validly issued, are fully paid and non-assessable, and
constitute all of the issued and outstanding shares of Monitor. MDI owns the
Monitor Shares free and clear of all liens, charges, security interests,
encumbrances, restrictions and claims, and upon the Closing, MDI will transfer
the Monitor Shares free and clear of all liens, charges, security interests,
encumbrances, restrictions and claims.

 

3.4.          Title to Assets. Monitor will,
on the Closing Date, have good and marketable title to all of its assets, free
and clear of all liabilities, liens, claims and encumbrances (except liens for
taxes not yet due).

 

ARTICLE IV.

 

REPRESENTATIONS
AND WARRANTIES OF BUYER

 

Buyer
hereby represents and warrants to the Seller as follows, except as is set forth
on the Buyer Disclosure Schedules, which representations and warranties are, as
of the date hereof, and will be, as of the Closing Date, true and correct:

 

4.1.          Organization, Good Standing and
Qualification.  The Buyer is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Texas and has all requisite corporate power and authority
to carry on its business as presently conducted and as currently proposed to be
conducted.

 

4.2.          Authorization.  All corporate action on the part of the Buyer
necessary for the authorization, execution and delivery of the Transaction
Documents, the performance of all obligations of the Buyer hereunder and
thereunder and the authorization, issuance and delivery of the Note has been
taken or will be taken prior to the Closing, and the Transaction Documents,
when executed and delivered by the Buyer, shall constitute valid and legally
binding obligations of the Buyer, enforceable against the Buyer in accordance
with their respective terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or
other laws of general application relating to or affecting the enforcement of
creditors’ rights generally, or (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies.

 

ARTICLE V.

COVENANTS

 

Each of Seller and Buyer covenant and agree with the
other as follows:

 

5.1.          Tax Matters.

 

3

 

(a)           Tax Records.  The Buyer and the Seller agree (i) to
retain all books and records with respect to Tax matters pertinent to Monitor,
its assets or business relating to any Taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by the Buyer, any extensions thereof) of the respective Taxable
periods, and to abide by all record retention agreements entered into with any
Taxing Authority, and (ii) to give the Buyer reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the Buyer so requests, the Seller shall allow the Buyer to take possession
of such books and records at the Buyer’s expense.

 

(b)           Transfer Taxes.  All sales and transfer taxes, deed taxes,
conveyance fees, recording charges and similar taxes imposed as a result of the
transactions contemplated by this Agreement, together with any interest,
penalties or additions to such transfer taxes, shall be borne by the Buyer.

 

5.2.          Inter-company Accounts. At the Closing, all inter-company
accounts other than the Note, between Monitor and MDI, will be cleared at no
expense to any of the entities.

 

ARTICLE VI.

 

CONDITIONS
TO CLOSING

 

6.1.          Conditions to Obligations of Seller.  The obligations of Seller to consummate the
transactions provided for hereby are subject, in the discretion of Seller, to
the satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by Seller:

 

(a)           Representations, Warranties and
Covenants.  All representations and
warranties of the Buyer contained in this Agreement shall be true and correct
in all material respects at and as of the date of this Agreement and at and as
of the Closing Date and the Buyer shall have performed and satisfied in all
material respects all agreements and covenants required hereby to be performed
by it prior to or on the Closing Date.

 

(b)           No Actions or Court Orders.  No suit, action, investigation, inquiry or
other proceeding by any governmental body or other Person or legal or
administrative proceeding shall have been instituted or threatened which seeks
to restrain, enjoin, prevent the consummation of or otherwise affect the transactions
contemplated by the Transaction Documents or which questions the validity or
legality of the transactions contemplated hereby or thereby or the ability of
Seller to transfer the Securities free and clear of any Encumbrances.

 

(c)           Authorization.  The Acquisition and the Transaction Documents
shall have been ratified by the Board of Directors of Seller in office
subsequent to the Closing of the transactions contemplated by that certain
Stock Purchase Agreement, by and between MDI Investments, LLC, dated as of August 28,
2009.

 

(d)           Other Deliveries.  Buyer shall have delivered to the Seller each
of the items set forth in Section 2.2(a) hereof.

 

4

 

6.2.          Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the
transactions provided for hereby are subject, in the discretion of Buyer, to
the satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by Buyer:

 

(a)           Representations, Warranties and
Covenants.  All representations and
warranties of the Seller contained in this Agreement shall be true and correct
in all material respects at and as of the date of this Agreement and at and as
of the Closing Date and the Seller shall have performed and satisfied in all
material respects all agreements and covenants required hereby to be performed
by them prior to or on the Closing Date.

 

(b)           No Actions or Court Orders.  No suit, action, investigation, inquiry or
other proceeding by any governmental body or other Person or legal or
administrative proceeding shall have been instituted or threatened which seeks
to restrain, enjoin, prevent the consummation of or otherwise affect the
transactions contemplated by the Transaction Documents or which questions the
validity or legality of the transactions contemplated hereby.

 

(c)           Other Deliveries.  Buyer shall have received from the Seller, or
such other parties, as applicable, each of the items set forth in Section 2.2(b) hereof.

 

ARTICLE VII.

 

TERMINATION

 

7.1.          Termination.

 

This
Agreement may be terminated at any time prior to Closing:

 

(a)           By mutual written consent of Buyer
and Seller;

 

(b)           By Buyer if there is a material
breach of any representation or warranty set forth in Article III
hereof or any covenant or agreement to be complied with or performed by the
Seller pursuant to the terms of this Agreement or the failure of a condition
set forth in Section 6.2 to be satisfied (and such condition is not
waived in writing by Buyer) on or prior to the Closing Date, or the occurrence
of any event which results or would result in the failure of a condition set
forth in Section 6.2 hereof to be satisfied on or prior to the
Closing Date, provided that Buyer may not terminate this Agreement prior
to the Closing if Seller has not had an adequate opportunity to cure such
failure; or

 

(c)           By Seller if there is a material
breach of any representation or warranty set forth in Article IV
hereof or of any covenant or agreement to be complied with or performed by Buyer
pursuant to the terms of this Agreement or the failure of a condition set forth
in Section 6.1 hereof to be satisfied (and such condition is not
waived in writing by Seller) on or prior to the Closing Date, or the occurrence
of any event which results or would result in the failure of a condition set
forth in Section 6.1 hereof to be satisfied on or prior to the
Closing Date; provided that Seller may not terminate this Agreement
prior to the Closing if Buyer has not had an adequate opportunity to cure such
failure.

 

5

 

7.2.          In the Event of Termination.  In the event of termination of this
Agreement:

 

(a)           Each party will destroy or redeliver
all documents, work papers and other material of any other party relating to
the transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same;

 

(b)           No party hereto shall have any
Liability to any other party to this Agreement, except as stated in subsections
(a), (b) and (c) of this Section 7.2 and except for any
breach of this Agreement occurring prior to the proper termination of this
Agreement.

 

The foregoing provisions
shall not limit or restrict the availability of specific performance or other
injunctive relief to the extent that specific performance or such other relief
would otherwise be available to a party hereunder.

 

ARTICLE VIII.

 

MISCELLANEOUS

 

8.1.          Defined Terms.  As used herein, the terms below shall have
the following meanings.  Any such term,
unless the context otherwise requires, may be used in the singular or plural,
depending upon the reference.

 

“Affiliate”
shall have the meaning set forth in the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

 

“Business
Day” shall mean a day other than Saturday, Sunday or any day on which banks
located in the State of Texas are authorized or obligated to close.

 

“Encumbrance”
shall mean any claim, lien, pledge, option, charge, community property
interest, equitable interest, right of first refusal or restriction of any
kind, easement, security interest, deed of trust, mortgage, pledge,
hypothecation, right-of-way, encroachment, building or use restriction,
conditional sales agreement, encumbrance or other right of third parties,
whether voluntarily incurred or arising by operation of law, and includes,
without limitation, any agreement to give any of the foregoing in the future,
and any contingent sale or other title retention agreement or lease in the
nature thereof.

 

“Governmental Entity”
shall mean any government or any court of competent jurisdiction, regulatory or
administrative agency or commission or other governmental entity or
instrumentality, whether federal, state, local, domestic or foreign.

 

“Organizational
Documents” shall mean (a) the articles or certificate of
incorporation, all certificates of determination and designation, and the
bylaws of a corporation; (b) the partnership agreement and any statement
of partnership of a general partnership; (c) the limited partnership
agreement and the certificate or articles of limited partnership of a limited
partnership; (d) the operating agreement, limited liability company
agreement and the certificate or articles of organization or formation of a
limited liability company; (e) any charter or similar 

 

6

 

document
adopted or filed in connection with the creation, formation or organization of
any other Person; and (f) any amendment to any of the foregoing.

 

“Person”
shall mean any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union, or other entity or
governmental body.

 

“Representative”
shall mean any officer, director, principal, attorney, agent, employee or other
representative.

 

“Tax”
shall mean any and all Taxes, including, without limitation, any net income,
alternative or add-on minimum, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license, registration,
recording, documentary, conveyancing, gains, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental or
windfall profit, custom duty or other Tax, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest,
penalty, addition to Tax or additional amount imposed by any governmental
authority responsible for the imposition of any such Tax (United States
(federal, state or local) or foreign), whether disputed or not. “Tax Return”
shall mean any return, report, information
return or other document (including schedules thereto, other attachments
thereto, amendments thereof, or any related or supporting information) filed or
required to be filed with any Taxing Authority in connection with the
determination, assessment or collection of any Tax or the administration of any
laws, regulations or administrative requirements relating to any Tax.

 

“Taxing
Authority” shall mean, with respect to any Tax, the Governmental Entity or
political subdivision thereof that imposes such Tax, and the agent (if any)
charged with the collection of such Tax for such Governmental Entity or
subdivision.

 

“Transaction Documents”
shall mean the Agreement and Note.

 

8.2.          Notices.  All notices, requests, demands, Claims and
other communications which are required or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given when received
if personally delivered; when transmitted if transmitted by electronic mail or
confirmed facsimile with a copy sent by another means specified herein; the
Business Day after it is sent if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g. Federal Express); and
five Business Days after the date mailed by certified or registered mail,
postage prepaid, if sent by certified or registered mail, return receipt
requested.  In each case notice shall be
sent to:

 

If to Seller, addressed
to:

 

MDI, Inc.

c/o Carmelo
Gordian

Andrews &
Kurth LLP

111 Congress
Avenue

Suite 1700

 

7

 

Austin, Texas
78701

Telephone:                (512) 320-9290

Fax:                           (512) 320-9292

 

If to
Buyer, addressed to:

 

214 Investments, Inc.

12500 Network Blvd., Suite 306

San Antonio, Texas
78249

Attn:                           President

Telephone:                (210) 477-5400

Fax:                           (210)
477-5401

 

or to such other place and with such other copies as
either party may designate as to itself by written notice to the others.

 

8.3.          Non Survival of Representations and
Warranties. The representations and warranties in this Agreement and in any
instrument delivered pursuant hereto shall terminate at the Closing Date;
provided, however, that this Section 8.3 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Closing.

 

8.4.          Rules of Construction.  The parties agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in any agreement or other document will
be construed against the party drafting such agreement or document.

 

8.5.          Titles.  The titles, captions or headings of the
Articles and Sections herein are inserted for convenience of reference only and
are not intended to be a part of or to affect the meaning or interpretation of
this Agreement.

 

8.6.          Entire Agreement.  This Agreement, including the Exhibits hereto
constitute the entire agreement and understanding and supersede all other prior
covenants, agreements, undertakings, obligations, promises, arrangements,
communications, representations and warranties, whether oral or written, by any
party hereto or by any director, officer, employee, agent, Affiliate or
Representative of any party hereto. 
There are no covenants, agreements, undertakings or obligations with
respect to the subject matter of this Agreement other than those expressly set
forth or referred to herein, and no representations or warranties of any kind
or nature whatsoever, express or implied, including any implied warranties of
merchantability or fitness for a particular purpose, are made or shall be
deemed to be made herein by the parties hereto except those expressly made
herein.

 

8.7.          Assignment.  Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by Seller without the prior written
consent of Buyer, or assigned by Buyer without the prior written consent of
Seller.

 

8

 

8.8.          Amendment or Modification.  This Agreement may not be amended except in
an instrument in writing signed on behalf of each of the parties hereto.  No amendment, supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby.

 

8.9.          Waiver.  Except where a specific period for action or
inaction is provided herein, neither the failure nor any delay on the part of
any party in exercising any right, power or privilege under this Agreement or
the documents referred to in this Agreement shall operate as a waiver thereof,
nor shall any waiver on the part of any party of any such right, power or
privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any other or further exercise thereof or the exercise of
any other such right, power or privilege. 
The failure of a party to exercise any right conferred herein within the
time required shall cause such right to terminate with respect to the
transaction or circumstances giving rise to such right, but not to any such
right arising as a result of any other transactions or circumstances.

 

8.10.        Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced as a result of any
rule of law or public policy, all other terms and other provisions of this
Agreement shall nevertheless remain in full force and effect 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.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated by this Agreement are
fulfilled to the greatest extent possible.

 

8.11.        Burden and Benefit.  This Agreement shall be binding upon and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns.  This Agreement and
all of its conditions and provisions are for the sole and exclusive benefit of
the parties hereto and their respective successors and permitted assigns, and
nothing in this Agreement, express or implied, is intended to confer upon any
Person other than the parties hereto any rights or remedies of any nature
whatsoever under or by reason of this Agreement or any provision hereof.

 

8.12.        Governing Law.  This Agreement (and any claim or controversy
arising out of or relating to this Agreement) shall be governed by the law of
the State of Texas without regard to conflict of law principles that would
result in the application of any law other than the law of the State of Texas.

 

8.13.        Consent to Jurisdiction.  Each party to this Agreement hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of the courts of the State of Texas, or Federal court of
the United States of America, sitting in Bexar County, Texas, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or the agreements delivered in connection herewith or the
transactions contemplated hereby or thereby or for recognition or enforcement
of any judgment relating thereto, and each of the parties hereby irrevocably
and unconditionally (a) agrees not to commence any such action or
proceeding except in such courts, (b) agrees that any claim in respect of
any such action or proceeding may be heard and determined in such 

 

9

 

Texas State court
or, to the extent permitted by law, in such Federal court, (c) waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such action or
proceeding in any such Texas State or Federal court, and (d) waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such Texas State or Federal
court.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Each party to
this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 8.2.  Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by law.

 

8.14.        Waiver of Trial by Jury.  EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY
TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY,
AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.14.

 

8.15.        Legal Fees.  If any party to this Agreement brings an
action to enforce its rights under this Agreement, the prevailing party shall
be entitled to recover its costs and expenses, including without limitation
reasonable legal fees, incurred in connection with such action, including any
appeal of such action.

 

8.16.        Specific Performance.  Each of the parties hereto acknowledges and
agrees that the other parties would be damaged irreparably, and in a manner for
which monetary damages would not be an adequate remedy, in the event any of the
provisions of this Agreement are not performed in accordance with its specific
terms or otherwise are breached.  Accordingly,
each of the parties hereto agrees that the other parties shall be entitled to
an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action instituted in any court of the United States or
any state thereof having jurisdiction over the parties and the matter, in
addition to any other remedy to which they may be entitled, at law or in
equity.

 

8.17.        Cumulative Remedies.  All rights and remedies of either party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.

 

10

 

8.18.        Expenses.  Except as otherwise expressly provided
herein, whether or not the transactions contemplated herein are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated herein shall be paid by the party incurring such
expenses.

 

8.19.        Representation by Counsel.  Each party hereto represents and agrees with
each other that it has been represented by or had the opportunity to be
represented by, independent counsel of its own choosing, and that it has had
the full right and opportunity to consult with its respective attorney(s), that
to the extent, if any, that it desired, it availed itself of this right and
opportunity, that it or its authorized officers (as the case may be) have
carefully read and fully understand this Agreement in its entirety and have had
it fully explained to them by such party’s respective counsel, that each is
fully aware of the contents thereof and its meaning, intent and legal effect,
and that it or its authorized officer (as the case may be) is competent to
execute this Agreement and has executed this Agreement free from coercion,
duress or undue influence.

 

8.20.        Execution and Counterparts.  This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed an original and all
of which together shall constitute one and the same instrument.  The parties agree that this Agreement shall
be legally binding upon the electronic transmission, including by facsimile or
email, by each party of a signed signature page to this Agreement to the
other party.

 

[Signature Page Follows]

 

11

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed on their
respective behalf, by their respective officers thereunto duly authorized, all
as of the day and year first set forth above.

 

	
   

  	
  214 INVESTMENTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Collier Sparks

  
	
   

  	
   

  	
  Name: J. Collier Sparks

  
	
   

  	
   

  	
  Title: President

  

 

Signature Page to
Securities Purchase Agreement

 

 

	
   

  	
  MDI, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Linton

  
	
   

  	
   

  	
  Name: John Linton

  
	
   

  	
   

  	
  Title: Officer

  

 

Signature Page to
Securities Purchase Agreement

 

 

EXHIBIT A

 

CONVERTIBLE
PROMISSORY NOTE

 

 

CONVERTIBLE
PROMISSORY NOTE

For the Purchase
of Monitor Dynamics, Inc.

 

	
  FACE AMOUNT U.S.
  $750,000.00

  	
   

  	
  September 8,
  2009

  

 

FOR VALUE RECEIVED, 214
Investments, Inc., a Texas corporation (the “Company”), hereby promises to
pay MD1, Inc., a Delaware corporation, (the “Holder”) the Face Amount in
such amounts, at such times and on such terms and conditions as are specified
herein (this “Note”).

 

Article 1.   Maturity.

 

The Face Amount of
this Note, as reduced by payments of principal as provided below, together with
accrued and unpaid interest thereon, is payable by September 8, 2014,
unless extended in writing by both the Company and the Holder (the “Maturity
Date”).

 

Notwithstanding any
provision to the contrary in this Note, the Company may pay in full to the
Holder the Face Amount, or any balance remaining thereof, in common stock, as
set forth in Article 2, or readily available funds at any time and from
time to time without penalty. Any balance remaining outstanding on the Maturity
Date shall automatically be converted into common stock in accordance with Article 2.

 

Article 2.   Payment.

 

2.1.
Payment in Cash. The outstanding balance of this Note, together with accrued
and unpaid interest thereon, is payable in cash or in shares of the Company’s
common stock, at the Company’s option.

 

2.2.
Payment in Stock.

 

(a)    Conversion. If the Company elects to convert
any portion of the outstanding balance of this Note into shares of the
Company’s common stock, it may do so at any time in accordance with Article 1,
at its sole option. The number of shares of common stock issuable upon the
conversion of this Note shall be determined pursuant to Sections 2.2(c) and
2.2(d).

 

(b)    Common Stock to be Issued. Upon the
conversion of any portion of this Note, the Company shall issue stock
certificates representing the number of shares of common stock issuable upon
such conversion, as applicable. The Company shall act as registrar and shall
maintain an appropriate ledger containing the necessary information with
respect to the balance of the Note. The Company warrants that the common stock
shall be freely resold, except as may be set forth herein or subject to
applicable law.

 

(c)    Conversion Price. The “Conversion Price”
applicable to the conversion of the principal amount and interest accrued shall
be determined by dividing (i) three (3) times the annualized revenue
of the Company (as determined by the Board of Directors of the Company in good
faith) by (ii) the number of shares of the Company’s Common Stock
outstanding at the Conversion Date.

 

(d)    Conversion Rate. The number of shares of the
Company’s common stock issuable upon a conversion hereunder shall be determined
by the quotient obtained by dividing (x) the aggregate amount of principal
and interest to be so converted for any particular date by (y) the
Conversion Price. No fractional shares or scrip representing fractions of
shares will be issued on conversion, but the number of shares issuable shall be
rounded up or down, as the case may be, to the nearest whole share.

 

 

Article 3.   Interest. Interest shall accrue from the
date hereof on the unpaid principal amount at a rate equal to 4 percent per
annum, simple interest. Interest shall be computed for the actual number of
days elapsed on the basis of a year of 360 days.

 

Article 4.   Certain Adjustments.

 

(a)    Stock Splits, If the Company, at any time
while this Note is outstanding, (i) subdivides outstanding shares of its
common stock into a larger number of shares, or (ii) combines (including
by way of a reverse stock split) outstanding shares of common stock into a
smaller number of shares, and absent a merger or acquisition transaction, the
Conversion Price will remain as set forth in Article 2.

 

(b)    Adjustment for Reclassification, Exchange
and Substitution. If at any time or from time to time after the common stock
issuable upon the conversion of this Note is changed into the same or a
different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a transaction
provided for elsewhere in this Article 4), in any such event, the Company
shall convert any portion of the outstanding balance of this Note into the kind
and amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change by holders of the maximum
number of shares of common stock into which the outstanding balance of this
Note could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided
herein or with respect to such other securities or property by the terms
thereof.

 

(c)    Reorganizations, Mergers, Consolidations or
Sales of Assets. If at any time or from time to time after the date of issuance
of this Note, there is a capital reorganization of the common stock (other than
a transaction provided for elsewhere in this Article 4), as a part of such
capital reorganization, provision shall be made so that the Holder of this Note
shall thereafter be entitled to receive upon conversion of this Note, the
number of shares of stock or other securities or property of the Company to
which a holder of the number of shares of common stock deliverable upon
conversion would have been entitled on such capital reorganization, subject to
adjustment in respect of such stock or securities by the terms thereof.

 

Article 5.   Mergers.

 

The Company shall
not consolidate or merge into, or transfer all or substantially all of its
assets to, any person, unless such person assumes in writing the obligations of
the Company under this Note. Any reference herein to the Company shall refer to
such surviving or transferee corporation and the obligations of the Company
shall terminate upon such written assumption.

 

Article 6.   Notices.

 

Any notices, consents,
waivers or other communications required or to be given under the terms of this
Note must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally, (ii) upon receipt, when sent by
facsimile (provided a confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party), or (iii) one
(1) day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same.

 

Article 7.   No Assignment.

 

This Note shall
not be assigned except in accordance with Article 5.

 

Article 8.   Governing Law.

 

The validity, terms,
performance and enforcement of this Note shall be governed and construed by the
provisions hereof and in accordance with the laws of the State of Texas.

 

 

Article 9.   Miscellaneous.

 

(a)    In this Note, unless the context otherwise
requires, words in the singular number include the plural, and in the plural
include the singular, and words of the masculine gender include the feminine
and the neuter, and when the tense so indicates, words of the neuter gender may
refer to any gender.

 

(b)    The numbers and titles of sections contained
in this Note are inserted for convenience of reference only, and they neither
form a part of this Note nor are they to be used in the construction or
interpretation hereof.

 

(c)    Neither this Note nor any provision hereof
shall be waived, modified, changed, discharged, terminated, revoked or
canceled, except by an instrument in writing signed by the party effecting the
same against whom any waiver, modification, change, discharge, termination,
revocation or cancelation is sought.

 

(d)    This Note may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
Execution and delivery of this Note by exchange of facsimile copies bearing the
facsimile signature of a party shall constitute a valid and binding execution
and delivery of this Note by such party. Such facsimile copies shall constitute
enforceable original documents.

 

(e)    This Note
represents the FINAL AGREEMENT between the Company and the Holder and may not
be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties.

 

IN WITNESS
WHEREOF, the Company has duly executed this Note as of September 8, 2009.

 

 

	
  214 Investments, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ J. Collier Sparks

  	
   

  
	
  By: J. Collier Sparks

  	
   

  
	
  Its: CEO &
  President

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