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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