FORM OF STC HOLDINGS, INC. STOCK PURCHASE AGREEMENT
Exhibit
10.2
FORM OF STC HOLDINGS,
INC.
THIS AGREEMENT, dated September 1,
2007, is between Ridgemont Investment Group, LLC, a Texas limited liability
company (“Ridgemont”) and FAS Construction Management, Inc., a Texas
Corporation, ("FAS") (collectively “Sellers”), and MDI, Inc., a Delaware
Corporation ("MDI").
R E C I T
A L S
WHEREAS,
Sellers own 100% of all of the outstanding and issued shares of STC Holdings,
Inc., a Texas Corporation (“STC”), a single purpose entity, the sole purpose of
which is to own, operate and maintain the property known as 00000 Xxx Xxxxx
Xxxxxx, Xxx Xxxxxxx, Xxxxx (“Property”); and
WHEREAS,
STC is the maker of that certain non-recourse Promissory Note and Loan Agreement
each dated April 5, 2007 in the original principal amount of $5,500,000.00
(“Loan”) payable to Capmark Finance, Inc. (“Lender”) payment of which is secured
by the Property and other collateral as defined in the Loan
Agreement;
WHEREAS,
MDI desires to purchase, and Sellers desire to sell, all of the issued and
outstanding shares of STC stock, subject to the parties receiving all approvals
from the Lender that may be necessary to transfer the Loan;
WHEREAS,
MDI is a public company in the United States with certain of its common stock
registered with the United States Securities and Exchange Commission (the “SEC”) and listed on
the NASDAQ Capital Market.
NOW,
THEREFORE, in consideration of the foregoing and the terms of this Agreement,
the receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby covenant and agree as
follows:
ARTICLE I: THE
PURCHASE
1.01. The
Purchase. On the terms and subject to the conditions set forth
herein, at the Closing (as hereinafter defined) Sellers agree to sell to MDI,
and MDI agrees to purchase from Sellers, 3,000,000 shares of STC stock (the "STC
Shares"), which represents 100% of the issued and outstanding shares of STC
stock.
1.02. Purchase
Price. Consideration to be paid by MDI to Sellers for the STC
Shares shall be 3,306,122 shares of MDI common stock (the “MDI Shares”) to be
issued by MDI to the Sellers in the amounts as directed by the Sellers, said
stock having been registered with the SEC and declared effective on August 6,
2007. The STC Shares and the MDI Shares, when a certificate(s) is delivered on
the Closing Date, shall be validly issued, fully paid and
non-assessable.
1.03 Closing. The
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place on September 10, 2007, at 10:00 o'clock a.m. The day on which the
Closing occurs is herein referred to as the "Closing Date."
1.04. Further
Assurances. After the Closing, the parties shall execute and
deliver such additional documents and take such additional actions as may
reasonably be deemed to be practical and necessary or advisable in order to
consummate the transactions contemplated by this Agreement.
ARTICLE
II: REPRESENTATIONS OF SELLERS
Sellers represents and warrants
that:
2.01 Sole Owner of STC
Shares. They are the lawful owner of all of the outstanding and issued
shares of STC, free and clear of all liens, charges, claims, security interests
and encumbrances of every kind, and no other Person or party has any rights,
interests or claims in such interest; provided, however, all of the assets of
STC (including the Property) secure payment of the Loan.
2.02 Corporate Authority Relative
to This Agreement; No Violation. Except as set forth in the
following sentence, each of the Sellers has full right, power, capacity and
authority to sell to MDI any or all of its interest in the STC Shares, and to
consummate the transactions contemplated by this Agreement. Notwithstanding
anything set forth above to the contrary, MDI and Sellers agree and acknowledge
that Sellers must obtain the consent of the Lender (the “Lender Consent”) prior
to conveying any interest in the STC Shares. In the event Sellers are
unable to obtain the Lender Consent prior to the Closing Date, then at MDI’s
sole and absolute discretion, (i) MDI may agree to extend the date for
Sellers to obtain the Lender Consent, in which case, the MDI Shares shall remain
with MDI until the Lender Consent has been obtained (the “Lender Consent Date”),
at which time the STC Shares and the MDI Shares shall be released to the other
party or (ii) MDI may terminate this Agreement and neither party shall
have any rights to, or obligations against, the other party. On the Lender
Consent Date, if this Agreement has not been previously terminated, the MDI
Shares shall be delivered to Sellers as directed by Sellers and the STC Shares
shall be delivered to MDI.
2.03 Consents. Except
for the consent of Lender, no authorization, consent, approval, permit or
license of, or filing with, any governmental or public body or authority, any
lender or lessor or any other person or entity is required to authorize, or is
required in connection with, the execution, delivery, and performance of this
Agreement or the agreements contemplated hereby on the part of
Sellers.
2.04 SEC Filings. Sellers
have reviewed the SEC Filings. MDI has given each Seller the opportunity to
review any of its other filings with the SEC.
2.05 Investment Intent.
Each Seller hereby represents to MDI that it is acquiring the MDI Shares solely
for its own account for investment and not with a view to, or for offer or sale
in connection with, a “distribution” of all or any part of the MDI Shares within
the meaning of the Federal Act. Each represents that it has no
current intention to sell, convey, dispose of, or otherwise distribute any
interest in or risk related to the MDI Shares. Each acknowledges and agrees that
this transaction has not been reviewed or approved by the SEC or any other
governmental agency or department.
2.06 Sophisticated
Investor. Each Seller hereby represents to MDI that it has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of investing in the MDI Shares and that it is
able to bear the economic risk, including a total loss, of such an investment.
It understands and has fully considered for purposes of this investment the
risks of this investment.
2.07 No Receipt of Material,
Non-Public Information. Each Seller acknowledges and agrees that it is
acquiring the MDI Shares without being offered or furnished any offering
literature or prospectus other than the SEC Filings. It hereby acknowledges that
it has had access to all information, which it considers necessary or advisable
to enable it to make an informed decision concerning the acquisition of the MDI
Shares. It is acquiring the MDI Shares based solely on its review of the SEC
Filings and its investigation of, and satisfaction with, MDI’s current and
anticipated financial condition and assets and not based on any oral
representations of any individual. It confirms that it and its representatives
and advisors have been given the opportunity to ask questions of, and to receive
answers from, persons acting on behalf of MDI concerning the business and
prospects of MDI and to obtain any additional information, to the extent such
persons possess such information or can acquire it without unreasonable effort
or expense and without breach of confidentiality obligations, necessary to
verify the accuracy of the information set forth in the SEC
Filings.
2.08 Accredited Investor.
Each Seller represents to the Company that it is an “accredited investor” under
Rule 501 of Regulation D of the Federal Act.
2.09 Receipt of Financial
Projections. Each Seller acknowledges that it has received certain
financial projections for MDI. It understands that there is no guarantee or
assurance that MDI’s operations will meet the financial projections. It further
understands that the financial projections are subject to a number of factors,
most of which are outside MDI’s control. The financial projections involve risks
and uncertainties and actual results may differ materially from the financial
projections. It acknowledges that the financial projections should not be relied
upon as indicative of MDI’s future performance.
2.10 STC Organization,
Qualification, and Good Standing. STC is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Texas. STC has the power and authority to own or hold under lease its
properties and assets and to carry on its business as it is now being
conducted.
2.11 No Broker. Neither
the Sellers, STC, nor any officer or director of them, has employed any broker,
finder, or investment bank or incurred any liability for any investment banking
fees, financial advisory fees, brokerage fees, or finders' fees in connection
with the transactions contemplated hereby.
ARTICLE
III: REPRESENTATIONS OF MDI
MDI represents and warrants
that:
3.01 Organization, Qualification,
and Good Standing. MDI is a corporation duly organized, validly existing,
and in good standing under Delaware law. The Company has full corporate power
and authority to perform this Agreement.
3.02 Corporate Authority Relative
to This Agreement; No Violation. The execution, delivery, and performance
by MDI of this Agreement has been duly authorized and approved by all necessary
corporate action on the part of MDI and the consummation of the transactions
contemplated by this Agreement, will not result in a breach or violation of, or
constitute a default under (i) the Certificate of Incorporation or Bylaws of MDI
or (ii) any agreement or instrument to which MDI is a party or by which MDI is
bound. This Agreement has been duly executed and delivered by MDI, and is the
legal, valid, and binding obligation of MDI, and is enforceable against MDI in
accordance with its terms, subject to laws affecting generally the enforcement
of creditors’ rights and to general principles of equity.
3.03 Consents. No
authorization, consent, approval, permit or license of, or filing with, any
governmental or public body or authority, any lender or lessor or any other
person or entity is required to authorize, or is required in connection with,
the execution, delivery, and performance of this Agreement or the agreements
contemplated hereby on the part of MDI.
3.04 SEC Reports. MDI
furnished to Sellers (i) its annual report on Form 10-KSB for the year ended
December 31, 2005, (ii) its annual report on Form 10-KSB for the year ended
December 31, 2006, (iii) its definitive proxy statement for the June 7, 2007
annual meeting of the company’s stockholders, and (iv) its Form 10-QSB for the
quarters ended March 31, 2007 and June 30, 2007 (collectively, the “SEC Filings”). The
Company represents that all of the SEC Filings were timely filed and in
accordance with the SEC’s rules and regulations.
3.05 Review of Seller’s
Material. MDI has reviewed all materials furnished by Sellers regarding
the Property and the Loan and has relied on its own review in determining
whether to proceed with this transaction, rather than relying on any information
received from either Sellers or any third party acting on behalf of
Sellers.
3.06 Brokers and
Finders. Neither MDI nor any officer or director of MDI has
employed any broker, finder, or investment bank or incurred any liability for
any investment banking fees, financial advisory fees, brokerage fees, or
finders' fees in connection with the transactions contemplated
hereby.
ARTICLE
IV: CLOSING DELIVERIES
4.01. Deliveries by
Sellers. At the Closing, Sellers shall deliver to MDI, in form
and substance satisfactory to MDI, each of the following:
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(a)
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A
certificate(s) issued to MDI by Sellers evidencing the STC Shares to be
purchased by MDI;
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(b)
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All
resolutions, certificates and documents MDI may request relating to (i)
the organization, existence, good standing and foreign qualification of
Sellers and STC, (ii) the corporate authority for the execution and
delivery of this Agreement and the other agreements executed and delivered
in connection therewith, (iii) the stock ownership of STC, and (iv) such
other matters relevant to the foregoing as MDI shall reasonably request,
all of which shall be in form and substance satisfactory to
MDI;
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(c)
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Such
other documents, instruments and agreements as MDI shall reasonably
request.
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4.02. Deliveries by
MDI. At the Closing, MDI shall have delivered to Sellers in
form and substance satisfactory to Sellers, each of the following:
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(a)
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Evidence
that it has instructed its transfer agent, Mellon Investor Services, to
issue to each Seller a certificate evidencing the MDI Shares to be
purchased by such Seller;
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(b)
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All
resolutions, certificates and documents Sellers may request relating to
(i) the organization, existence and good standing of MDI, (ii) the
corporate authority for the execution and delivery of this Agreement and
the other agreements executed and delivered in connection therewith, and
(iii) such other matters relevant to the foregoing as Sellers shall
reasonably request, all of which shall be in form and substance
satisfactory to Sellers; and
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(c)
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Such
other documents, instruments and agreements as Sellers shall reasonably
request.
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ARTICLE
V: MISCELLANEOUS
5.01. Modification, Amendment and
Waiver. This Agreement may not be modified unless such
modification is in writing and signed by all parties hereto. No
waiver of any term of this Agreement shall be enforceable unless in writing and
signed by the party against which it is sought to be enforced. The
waiver by any party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
5.02. Expenses. Each
party hereto shall bear its own expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated
hereby.
5.03. Counterparts. This
Agreement may be executed in two or more counterparts, all of which will be
considered the same agreement and faxed copies of manually executed signature
pages to this Agreement will be fully binding and enforceable without the need
for delivery of the manually executed signature page.
5.04. Governing
Law. This Agreement shall be governed by the laws of the State
of Texas and the courts in Bexar County, Texas shall have exclusive jurisdiction
over and be the sole venue for any litigation to be brought under this
Agreement.
5.05. Notices. All
notices hereunder will be in writing and will be deemed given if delivered by
hand (or recognized courier or delivery service) or mailed by registered or
certified air mail (return receipt requested) to the parties at the following
addresses (or at such other addresses for a party as will be specified by like
notice) and will be deemed given on the date on which so hand-delivered or on
the sixth business day following the date on which so mailed to the address set
forth opposite the name and signature block for each party to this
Agreement:
5.06. Survival.
All representations, warranties and covenants made by Sellers
and MDI herein or in any agreement, certificate or other instrument delivered by
it hereunder shall be considered to have been relied upon by MDI or Sellers and
shall survive the Closing, regardless of any investigation made by or on behalf
of MDI or Sellers.
5.07. Severability. If
any provision of this Agreement is held to be illegal, invalid, or
unenforceable, such provision shall be fully severable, and this Agreement shall
be construed and enforced as if such illegal, invalid, or unenforceable
provision were never a part hereof; the remaining provisions hereof shall remain
in full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance; and in lieu of such illegal,
invalid, or unenforceable provision, there shall be added automatically as part
of this Agreement, a provision as similar in its terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and
enforceable.
5.08. Assignments; Entire
Agreement; Headings. This Agreement shall not be assignable by
operation of law or otherwise. Any attempted assignment of this
Agreement shall be void. This Agreement, and any of the Schedules
attached hereto, and any of the Exhibits attached hereto constitute the entire
agreement, and supersede all other prior agreements and understandings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof. All Schedules, Exhibits, and documents and
agreements referred to herein or attached hereto are fully and completely
incorporated herein effective as of the first reference herein. The headings
contained in this Agreement are for reference purposes and will not affect in
any way the meaning or interpretation of this Agreement. Use of
"herein," "hereof" or similar terms refer to this Agreement as a
whole. The use of any term denoting a masculine, feminine, or neuter
gender shall include all such genders.
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered as of the date
first above written.
______________
By: X.
Xxxxxxx Xxxxxx
Its: CEO
& President
FAS
CONSTRUCTION MANAGEMENT, INC.
______________
By:
Its:
RIDGEMONT
INVESTMENT GROUP, LLC
_______________
By:
Its:
