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:

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.

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 suble