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STOCK PURCHASE AGREEMENT

Purchase and Sale Agreement

STOCK PURCHASE AGREEMENT | Document Parties: MDI, Inc., | Almana Networks International, Inc You are currently viewing:
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MDI, Inc., | Almana Networks International, Inc

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Title: STOCK PURCHASE AGREEMENT
Governing Law: Texas     Date: 9/11/2009
Industry: Electronic Instr. and Controls     Law Firm: Andrews Kurth     Sector: Technology

STOCK PURCHASE AGREEMENT, Parties: mdi  inc.  , almana networks international  inc
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Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT (this “ Agreement ”) is made as of this 8th day of September, 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 ”), Almana Networks International, Inc., a Delaware corporation (“ ANI ”), and the undersigned Holders (each, a “ Holder ”).

 

WHEREAS, the Company desires to purchase 1,000 shares of the common stock, par value $0.01 per share, of ANI (the “ ANI Common Stock ”), which constitute all of the issued and outstanding shares of ANI, from the Holders (the “ ANI Shares ”);

 

WHEREAS, in consideration for the purchase of all the ANI Shares, the Company will issue an aggregate of 9,500,000 shares of the common stock of the Company, par value $0.01 per share (the “ MDI Common Stock ”) to the Holders as follows: (i) 2,500,000 shares of MDI Common Stock subject to a right of repurchase as set forth below (the “ Repurchase Shares ”); and (ii) 7,000,000 shares of MDI Common Stock which shall be held in escrow by the Company and released to the Holders per the terms of this Agreement (the “ Escrow Shares ”, and together with the Repurchase Shares, the “ Consideration ”).

 

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.                                          PURCHASE  OF ANI SHARES AND ISSUANCE OF CONSIDERATION

 

1.1                                  Subject to the terms and conditions hereinafter set forth, at the Closing, each Holder agrees to sell and transfer the number of shares of ANI Common Stock set forth on Schedule A hereto to the Company, accompanied by any necessary stock powers or other instruments of transfer.

 

1.2                                  Subject to the terms and conditions hereinafter set forth, and in consideration of the sale and transfer of the shares of ANI Common Stock referenced in Section 1.1 above, the Company agrees to issue to each Holder at Closing the Repurchase Shares set forth on Schedule A hereto.

 

1.3                                  At Closing, one or more certificates representing the Escrow Shares shall be issued in the name of the Holders as set forth on Schedule A hereto,  will be held in escrow by the Company and shall constitute an escrow account (the “ Escrow Account ”) to be released in installments as more fully described herein.

 

(a)                                   At the end of each calendar month after the Closing Date, one (1) share of the Escrow Shares for every $0.40 in Gross Margin produced by the ANI Contracts (as defined below) shall be released (the “ Released Shares ”) from the Escrow Account and distributed to the Holders in one or more stock certificates representing such Released Shares. The number of shares released to each Holder shall be determined by dividing such Holder’s number of shares issued pursuant to this Agreement by 9,500,000, then multiplying such number by the total number of Released Shares. As used herein “Gross Margin” shall mean the amount of sales less costs of goods sold. As used herein, “ANI Contracts” shall mean the contracts, licenses and other

 



 

agreements listed on Exhibit “A” and any other contracts, licenses or agreements entered into by or through ANI. Within five business days of the calendar end of each month, MDI shall deliver to each Holder certificates representing the number of shares to be released to such Holder and a certification of the calculations thereof, which shall be acceptable to such Holder. The parties hereto agree and acknowledge that the Company shall hold and safeguard the Escrow Account and shall treat such account as a trust account in accordance with the terms of this Agreement, and shall hold and dispose of the Escrow Account only in accordance with the terms hereof.  The timing and methodology for the release of the Escrow Shares shall be governed by the terms and subject to the conditions set forth in this Agreement.

 

(b)                                  The parties hereto agree for tax purposes to treat the Escrow Shares while retained in the Escrow Account as owned and received by the Holders and not owned or retained by MDI, and to file all tax returns on a basis consistent with such treatment.  In furtherance of the foregoing, the Holders shall have all dividend and voting rights afforded to the shares of MDI Common Stock then held in the Escrow Account pursuant to MDI’s organizational documents.

 

(c)                                   The escrow created pursuant to this Agreement shall terminate at the time that the full amount of the Escrow Shares has been disbursed in accordance herewith.

 

II.                          REPRESENTATIONS AND WARRANTIES OF HOLDERS. Each Holder represents, as to themselves, severally but not jointly, the following.

 

2.1                                  Each Holder has all power and authority necessary to execute and deliver this Agreement and to carry out and perform such Holder’s obligations under the terms hereof.  Each Holder has the sole power to dispose of his or its shares of ANI Common Stock either as his or its sole and separate property or as community property, as may be applicable to such Holder. This Agreement, when executed and delivered by or on behalf of a Holder, will constitute such Holder’s valid and binding obligation, enforceable against him or it in accordance with its terms, except to the extent that such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to creditors’ rights generally, or is subject to general principles of equity.

 

2.2                                  Each Holder is the owner of that number of shares of ANI Common Stock set forth on Schedule A.  Such shares of ANI Common Stock constitute such Holder’s entire interest in the outstanding capital stock and voting securities of ANI.  No other person or entity not a signatory to this Agreement has a beneficial interest in or a right to acquire such shares of ANI Common Stock.  Such shares of ANI Common Stock are and will be at Closing free and clear of any liens, claims, options, charges or other encumbrances other than the liens for taxes not yet due and payable.

 

III.                                  REPRESENTATIONS AND WARRANTIES OF ANI. ANI represents and warrants to the Company that:

 

3.1                                  ANI is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.  ANI has the corporate power to own its properties and to carry on its business as now being conducted and as proposed to be conducted and is duly

 



 

qualified to do business and is in good standing in each jurisdiction in which the failure to be so qualified and in good standing would have a material adverse effect on ANI.  ANI is not in violation of any of the provisions of its Articles of Incorporation or Bylaws.

 

3.2                                  All corporate action on the part of ANI necessary for the authorization, execution and delivery of this Agreement and for the performance of all of its obligations hereunder has been taken, and this Agreement constitutes a valid, legally binding and enforceable obligation of ANI.

 

3.3                                  No consent, authorization, license, permit, registration or approval of, or exemption or other action by, any governmental or public body or authority is required in connection with the ANI’s execution and delivery of this Agreement and the performance by ANI of its obligations hereunder, except for any filings required by applicable securities laws.

 

3.4                                  ANI’s execution and delivery of this Agreement, performance of its obligations hereunder, and its consummation of the transactions contemplated hereby will not (i) violate any provision of any law, statute, rule or regulation to which ANI is subject, (ii) violate any judgment, order, writ, injunction or decree of any court applicable to ANI, or (iii) result in the breach of, or be in conflict with, any term, covenant, condition or provision of, or affect the validity, enforceability and subsistence of any agreement, indenture, or other commitment to which ANI is a party that would materially and adversely affect ANI.

 

3.5                                  The authorized capital stock of ANI consists solely of 1,000 shares of ANI Common Stock.  As of September 8, 2009, 1,000 shares of ANI Common Stock were issued and outstanding.  Since such date there has been no change in the number of issued and outstanding shares of ANI Common Stock.  All of the issued and outstanding shares of ANI Common Stock are duly authorized, validly issued, fully paid and nonassessable.  There are no outstanding subscriptions, options, warrants, rights (including “phantom” stock rights), preemptive rights or other contracts, commitments, understandings or arrangements, including any right of conversion or exchange under any outstanding security, instrument or agreement (together, “ Options ”), obligating ANI to issue or sell any shares of capital stock of ANI or to grant, extend or enter into any Option with respect thereto.

 

3.6                                  There are no actions, suits, arbitrations or proceedings pending or threatened against, relating to or affecting, nor are there any governmental or regulatory authority investigations or audits pending or threatened against, relating to or affecting ANI or its assets and properties which, individually or in the aggregate, could be reasonably expected to have a material adverse effect on the ability of ANI to consummate the transactions contemplated by this Agreement, and (ii) ANI is not subject to any order of any governmental or regulatory authority which, individually or in the aggregate, could be reasonably expected to have a material adverse effect on the ability of ANI to consummate the transactions contemplated by this Agreement.

 

3.7                                  ANI holds all permits, licenses, variances, exemptions, orders and approvals of all governmental and regulatory authorities necessary for the lawful conduct of its business (the “ ANI Permits ”), except for failures to hold such permits, licenses, variances, exemptions, orders and approvals which, individually or in the aggregate, are not having and

 



 

could not reasonably be expected to have a material adverse effect on ANI.  ANI is in compliance with the terms of the ANI Permits, except failures to comply which, individually or in the aggregate are not having and could not reasonably be expected to have a material adverse effect on ANI.  ANI is not in violation of or default under any law or order of any governmental or regulatory authority.

 

3.8                                  ANI has all right, title and interest in, or a valid and binding license to use, all intellectual property used in or necessary for the conduct of the business of ANI as presently conducted.  ANI is not in default (or with the giving of notice or lapse of time or both, would be in default) under any license to use such intellectual property, such intellectual property is not being infringed by any third party, and ANI is not infringing any intellectual property of any third party.

 

IV.                                  REPRESENTATIONS BY THE COMPANY

 

The Company represents and warrants to each Holder 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 B (the “ Disclosure Schedule ”):

 

4.1                                  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 Agreement and Call Agreement (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.

 

4.2                                  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 September 8, 2009, 3,913,439 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.

 

4.3                                  Valid Issuance of Shares, Etc . The Repurchase Shares and Escrow Shares have been duly authorized, and upon issuance pursuant to the terms hereof, 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, other than the Call Agreement.

 

4.4                                  Subsidiaries and Investments . Except for the subsidiaries set forth on Schedule 4.4 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


 
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