[Logo Omitted] MDI
SECURITY SYSTEMS
December 8, 2005
Xx. Xxxx Xxxx
President
Advanced Security Link
0000 Xxxxxx Xxx.
Costa Mesa, California 92626
Xx. Xxxx Xxxx
Ecomatrix Funding, Inc.
0000 Xxxxxx Xxx.
Costa Mesa, California 92626
Dear Xxxx:
After discussions between us over several months, it has been agreed that
MDI, Inc. will purchase from Ecomatrix Funding, Inc. and Advanced Security Link
certain assets (the "Assets") of Advanced Security Link ("ASL") and take over
ASL's on-going business.
1. Assets Purchased - The Assets to be purchased will be specifically
identified on mutually agreed to schedules to be provided to MDI at the Closing.
They will include the following assets used in the ASL Business:
i. intellectual property rights;
ii. customer and supplier agreements;
iii. leases used in the ASL Business (MDI will pay 50% of the costs of
leasing and operating the ASL offices);
iv. books, records. manuals; and
v. property and equipment located at the ASL facility.
MDI is not purchasing:
i. cash or cash equivalents;
ii. accounts receivable; and
iii. inventory or raw materials.
MDI is not assuming:
i. any liabilities, including accounts payable (except for mutually
agreed on materials and supplies on order that will be delivered
after the Closing);
ii. any employment, severance or benefit obligations that exist as of
the Closing Date, unless they are for the period,lanuaiy 1, 2006
forward.
0000 Xxxxxxxxx Xx. Xxxxx 000 x Xxx Xxxxxxx, Xxxxx 00000
o Tel: 000-0000-0000 o Fax: 000-000-0000 o xxx.xxxxxxxxx.xxx
[LOGO OMITTED]
Purchase Price and Payment
The purchase price is 2,000,000 shares of the Common stock of MDI, Inc.
(the "Shares"). At Closing, the Transfer Agent of MDI will be instructed to
issue a certificate representing 2,000,000 restricted shares.
The Shares to be delivered are not registered with the Securities &
Exchange Commission ("SEC") as such, they shall be issued to you with a
"restrictive legend" noting that they are not registered and they are of freely
transferable. MDI will prepare and file with the SEC a Registration Statement on
the appropriate form within thirty (30) days following the Closing.
Employment
We shall offer employment to the employees of ASL on terms and conditions
and at compensation levels to be agreed upon. ASL will provide MDI with the
employment and medical histories of all ASL employees. MDI will not assume any
liabilities existing at the time of Closing relating to these employees.
Xxxx Xxxx Xxxxxxxxx; Arrangement
At the Closing, MDI and Xxxx Xxxx will enter into a three year consulting
agreement pursuant to which Xx. Xxxx agrees to manage the ASL operations on
behalf of MDI. Under this consulting arrangement, Xx. Xxxx also agrees that he
will be available to perform other functions for MDI when asked. Xxxx Xxxx
agrees that for three years after the Closing he will not engage or participate
in any way with any business except on behalf of MD1 and its assigns) that
competes with the business of ASL or MDI.
Investigation
MDI has executed this agreement based upon available information regarding
ASL. If at Closing, the assets or the ASL Business is materially different than
as described, MDI may elect not to Close.
Xxxx Xxxx has been provided all information about MDI that he has requested
and has had spoken with management of MDI about MDI, its business and the common
stock of MDI traded on The NASDAQ SmallCap Market.
The obligation of MDI to Close is conditioned on final approval of its
Board of Directors.
Publicity
MDI and ASL agree to issue a press release following the execution of this
Agreement.
Expenses and Commission
Each of the parties will pay its own expenses incurred in connection with
the proposed transactions.
Closing
It is expected that the Closing will take place on January 2, 2006. At the
Closing, MDI shall be given:
Bill of sale and other instruments of assignment and transfer transferring
to it (or its assigns) title to
b. Assignments of leases, contracts and other agreements covering
the leases, contracts and other agreements covered by this
Agreement; and
c. All books of account, records, (files, documents and papers
relating to the business of ASL.
The parties each agree to execute and deliver at or aver the CIosing Date such
other instruments and documents as shall be reasonably necessary for the
implementation and consummation of the transactions contemplated by this
Agreement.
Yours very truly,
MDI, INC.
By: X. Xxxxxxx Xxxxxx
---------------------
By: X. Xxxxxxx Xxxxxx
Its: CEO & President
AGREED AND ACCEPTED:
By: Xxxx Xxxx
---------------------
Xxxx Xxxx
Its: President
Date: 12-08-05
Ecomatrix Funding, Inc.
By: Xxxx Xxxx
---------------------
Its:
Date: 12-08-05
