Exhibit 10.7
OPTION AGREEMENT
THIS AGREEMENT is made and entered
into this 8th day of September, 2009, by and between
MDI, Inc., a Delaware corporation (hereinafter referred to as
the “Grantor”) and 214 Investments, Inc., a Texas
corporation, (hereinafter referred to as
“Grantee”).
In consideration of the mutual
promises and covenants contained herein, the parties agree as
follows:
1.
GRANT OF OPINION . For and in consideration of the sum
of $1.00.00 and other good and valuable consideration paid by
Grantee, receipt and sufficiency of which are hereby acknowledged
by Grantor, the Grantor herein grants to Grantee the exclusive
right, privilege, and option to purchase all of the issued and
outstanding membership interests of Structure REDS, LLC, a Texas
limited liability company and a wholly owned subsidiary of Grantor
(“Structure”).
2.
EXERCISE . This option shall first be exercisable by
Grantee thirty (30) days after execution hereof and may be
exercised by Grantee any time thereafter on or before the first
anniversary of the Agreement (“Expiration Date”) by
written notice to Grantor, which notice shall be effective upon the
mailing or delivery of said notice to the Grantor.
3.
SECURITIES PURCHASE AGREEMENT. In the event that
Grantee exercises this option, the closing and the terms of said
transaction shall take place pursuant to a Securities Purchase
Agreement substantially in the form attached as Exhibit A and
the purchase price shall be payable by means of Grantee’s
issuance to Grantor of the convertible promissory note
substantially in the form attached as Exhibit B hereto. The
Securities Purchase Agreement and the Convertible Promissory Note
shall be signed and delivered by the parties within two
(2) days of such exercise.
4.
ASSIGNMENT. This option and all rights and
obligations hereunder shall be assignable by Grantee to one or more
nominees of its sole choosing. Grantor may not assign this
Agreement or any rights under it.
5.
CONFIDENTIALITY. Grantor and Grantee agree that this
transaction is confidential to the parties hereto and their
respective successors and assigns and neither party, except as
required by law, will discuss or reveal any portion of the contents
of, or the existence of, this Option.
6.
BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and assigns, except as otherwise provided
aforesaid.
7.
LAW OF THE FORUM. This Agreement is governed by and
will be construed and enforced in accordance with the laws of the
State of Texas regardless of the jurisdiction in which litigation
relating to the subject matter hereof is initiated or
continued. In the event any action is brought based on this
Agreement the venue for any such action will be any court of
competent jurisdiction of the State of Texas located in Bexar,
County, Texas.
IN WITNESS WHEREOF, the parties
hereto have caused this Option Agreement to be duly
executed.
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GRANTOR
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MDI, INC.
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/s/ John Linton
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By: John Linton
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Its: Officer
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GRANTEE
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214 INVESTMENTS, INC.
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/s/ J. Collier Sparks
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By: J. Collier Sparks
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Its: President
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Exhibit A
Securities Purchase
Agreement
Exhibit B
Convertible Promissory
Note
Exhibit A
SECURITIES PURCHASE
AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT
(“Agreement”) is entered into as of this
day of
,
2009, by and between 214 Investments, Inc., a Texas
corporation (“Buyer”) and MDI, Inc., a Delaware
corporation (“Seller”).
RECITAL:
A.
Seller owns a one hundred percent
(100%) membership, capital and profits interest (the
“Interest”) in Structure REDS, LLC., a Texas limited
liability Company (the “Company”).
B.
Seller desires to sell the Interest
to Buyer and Buyer desires to buy from Seller the Interest pursuant
to the terms and subject to the conditions set forth in this
Agreement.
AGREEMENTS:
In consideration of the foregoing
and the mutual promises contained herein, the parties agree as
follows:
1.
Purchase and Sale of Interest. At
the Closing (as hereinafter defined in Section 7.1), Seller
shall, on the terms and subject to the conditions set forth herein,
sell and transfer to Buyer the Interest, free and clear of all
liens, charges, security interests, encumbrances, restrictions and
claims, and Buyer agrees to purchase the Interest in the amounts
and for the consideration set forth below.
2.
Purchase Price. The Purchase Price
(herein so called) shall be payable at Closing by means of
Buyer’s issuance to the Seller of the attached $250,000.00
Convertible Promissory Note (“Note”).
At Closing, all intercompany
accounts between the Company and the Seller, and/or any
subsidiaries of the Seller, will be cleared at no expense to either
the Buyer or the Company.
3. Representations and
Warranties of Seller. Seller represents and warrants to
Buyer that:
3.1. The Company is and on the
Closing Date will be a limited liability corporation duly
organized, validly existing and in good standing under the laws of
the State of Texas.
3.2. Seller has full legal power to
enter into and perform this Agreement. This Agreement will, when
executed, be binding against Seller, in accordance with its
terms.
3.3. Since September 9, 2009,
Seller had taken no action which would encumber the Company’s
assets and, to the Seller’s knowledge, such assets are free
and clear of all liabilities, liens, claims and encumbrances
(except liens for taxes not yet due and liabilities incurred in the
ordinary course of business).
3.4. The Seller is the sole legal
and beneficial owner of the Interest, and such Interest is free and
clear of all liens, claims, charges, security interests,
encumbrances and restrictions.
4. Representations and
Warranties of Buyer. Buyer represents and warrants to Seller
that:
4.1. Buyer is and on the Closing
Date will be a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas.
4.2. Buyer has full legal power to
enter into and perform this Agreement. This Agreement will, when
executed, be binding against Buyer, in accordance with its
terms.
Article 3. Interest. Interest
shall accrue from the date hereof on the unpaid principal amount at
a rate equal to 4 percent per annum, simple interest. Interest
shall be computed for the actual number of days elapsed on the
basis of a year of 360 days.
Article 4. Certain
Adjustments.
(a) Stock Splits. If the
Company, at any time while this Note is outstanding,
(i) subdivides outstanding shares of its common stock into a
larger number of shares, or (ii) combines (including by way of
a reverse stock split) outstanding shares of common stock into a
smaller number of shares, and absent a merger or acquisition
transaction, the Conversion Price will remain as set forth in
Article 2.
(b) Adjustment for
Reclassification, Exchange and Substitution. If at any time or from
time to time after the common stock issuable upon the conversion of
this Note is changed into the same or a different number of shares
of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than a transaction provided
for elsewhere in this Article 4), in any such event, the
Company shall convert any portion of the outstanding balance of
this Note into the kind and amount of stock and other securities
and property receivable upon such recapitalization,
reclassification or other change by holders of the maximum number
of shares of common stock into which the outstanding balance of
this Note could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to
further adjustment as provided herein or with respect to such other
securities or property by the terms thereof.
(c) Reorganizations,
Mergers
