Document:

exhibit10-2.htm

    
      Exhibit
10.2

      

      

      FORM OF STC HOLDINGS,
INC.

      STOCK PURCHASE
AGREEMENT

      

      

      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 10226 San Pedro
Avenue, San Antonio, Texas (“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:

      

      
        	
                (a)

              	
                A
      certificate(s) issued to MDI by Sellers evidencing the STC Shares to be
      purchased by MDI;

              

      

      

      
        	
                (b)

              	
                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;

              

      

      

      
        	
                (c)

              	
                Such
      other documents, instruments and agreements as MDI shall reasonably
      request.

              

      

      

      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:

      

      
        	
                (a)

              	
                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;

              

      

      

      
        	
                (b)

              	
                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

              

      

      

      
        	
                (c)

              	
                Such
      other documents, instruments and agreements as Sellers shall reasonably
      request.

              

      

      

      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.

      

      

      MDI,
INC.

      

      

      ______________

      By: J.
Collier Sparks

      Its: CEO
& President

      

      

      FAS
CONSTRUCTION MANAGEMENT, INC.

      

      

      ______________

      By:

      Its:

      

      RIDGEMONT
INVESTMENT GROUP, LLC

      

      

      _______________

      By:

      Its:exhibit10-3.htm

    Exhibit
10.3

    

    FORM OF FAS CONSTRUCTION
MANAGEMENT, INC.

    STOCK PURCHASE
AGREEMENT

    

    

    This Stock Purchase Agreement is
entered into as of October 2, 2007, by and among FAS Construction Management,
Inc., a Texas corporation ("FAS"), MDI, Inc., a Delaware corporation ("MDI"),
and Ridgemont Investment Group, LLC, William M. Wurzbach, FAS Interests, LLC and
Little Roses Trust of 2006 (individually "Seller" and collectively referred to
as the "Sellers").

    

    RECITALS

    

    WHEREAS,
Sellers own, in the aggregate, 8,140,000 shares of FAS which is 100% of all of
the outstanding and issued shares of FAS (“FAS Shares”).

    

    WHEREAS,
MDI desires to purchase from the Sellers, and Sellers desire to sell to MDI, all
of the FAS Shares in return for the delivery by MDI to the Sellers of an
aggregate of 5,000,000 shares of the common stock of MDI (the “MDI
Shares”).

     

    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, the FAS Shares.

    

    1.02.                      Purchase
Price.  Consideration to be paid by MDI to Sellers for the FAS
Shares shall be the MDI Shares to be allocated among the Sellers as the Sellers
determine at or immediately following the Closing.

    

    The MDI Shares to be delivered are not
registered with the SEC. As such, they shall be issued with a “restrictive
legend” noting that they are not registered and they are not freely
transferable. The FAS Shares when a certificate(s) is delivered on the Closing
Date, shall be validly issued, fully paid and non-assessable.

    

    1.03                      Registration.  MDI
hereby agrees with the holders of the MDI Shares or their transferees
(collectively, the “Holders”) to use its
best efforts to include the MDI Shares in the next registration statement filed
by MDI on Form S-3 (the “Registrable
Securities”), but in no event later than 30 days following the Closing
Date. MDI will use all reasonable efforts to cause such registration statement
to become effective as soon as practicable hereafter.

    

    1.04                      Closing.  The
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place on or before October 15, 2007, at 10:00 o'clock a.m. at the offices
of MDI. The day on which the Closing occurs is herein referred to as the
"Closing Date."

    

    1.05.                      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 AND WARRANTIES OF FAS AND SELLERS

    

    FAS and the Sellers jointly and
severally represent and warrant to MDI (which representations and warranties
shall survive for a period of two years after the Closing, regardless of what
investigations, if any, MDI shall have made thereof prior thereto) as
follows:

     

    2.01                      Sole Owner of FAS
Shares. Sellers are the lawful owner of all of the outstanding and issued
shares of FAS, 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. All such issued and outstanding shares
have been duly authorized and validly issued are fully paid and nonassessable
and were issued in compliance with all applicable laws concerning the issuance
of securities. The Sellers possess full authority and legal right to sell,
transfer and assign the entire legal and beneficial ownership of the FAS Shares.
Upon transfer of the FAS Shares to MDI hereunder at the Closing, MDI will own
the entire legal and beneficial interest in the FAS Shares, free and clear of
all of the liens, claims and encumbrances of any kind as noted above, and
subject to no legal or equitable restrictions of any kind.

     

    2.02              Corporate Authority Relative
to This Agreement; No Violation.  Each of the Sellers has full
right, power, capacity and authority to sell to MDI any or all of its interest
in the FAS Shares, and to consummate the transactions contemplated by this
Agreement.

     

    2.03              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 Sellers.

    

    2.04              SEC Filings. Sellers
have reviewed the SEC Filings described in Section 3.04. 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              FAS Organization,
Qualification, and Good Standing.  FAS is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Texas. FAS 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              Options, Warrants, and
Rights.  Other than as shown on the Financial Statements, FAS
has no outstanding rights, options, warrants, pre-emptive rights, conversion
rights or other rights or agreements for the purchase or acquisition from FAS of
any shares of its capital stock or any other securities. As a condition to
Closing, any options, warrants and rights will be terminated on or before
Closing.

    

    2.12              Financial Statements.
The Sellers have also provided to MDI the unaudited financial statements of FAS
as at August 31, 2007 and December 31, 2006 (collectively the "Financial
Statements"). The Financial Statements are complete and correct in all material
respects, have been prepared on a basis consistent with that of prior periods,
and present fairly the financial condition and results of operations of FAS as
of and for the periods indicated. As of the date of this Agreement, FAS had no
liabilities other than as indicated in the Financial Statements. To the best
knowledge of the Sellers, all accounts receivable on the books of FAS at the
Closing will be collectible as of the Closing at the face amount thereof, less
the accounts receivable deemed to be uncollectible as set forth in the Financial
Statements.

    

    2.13              Absence of Undisclosed or
Contingent Liabilities.

    

    (a)           Except
as reflected in the Financial Statements, FAS is not a party to or bound by any
financial commitment, loan, security agreement, lease, license or other material
outstanding contractual undertakings not in the ordinary course of
business.

    

    (b)           FAS
is not in arrears or default under any of the foregoing obligations, and to the
best knowledge of FAS there exist no material defaults by any party to a
contractual agreement or arrangement with FAS.

    

    2.14                      Absence of Certain
Events.  Since the date of the Financial
Statements:

    

    (a)  FAS has not entered into
any material transaction that was not in the ordinary course of its
business.

    

    (b)  There have been no
events or conditions that, either individually or in the aggregate, might
constitute a Material Adverse Event. "Material Adverse Event" shall mean an
occurrence or occurrences having a consequence that, individually or in the
aggregate, either (i) is materially adverse to the business of FAS or (ii) has a
reasonable likelihood of occurring, and, if it occurred, would be materially
adverse to the long range future business of FAS.

    

    (c)  No changes have occurred
in the assets or liabilities of FAS from that reflected in the Financial
Statements, except changes in the ordinary course of business. Such changes,
individually or in the aggregate, do not constitute a Material Adverse
Event.

    

    (d)           FAS
has not declared or paid any dividend or made any distribution on its capital
stock, or redeemed, purchased or otherwise acquired any of its capital
stock.

    

    (e)           There
has been no increase in the compensation of any of FAS's employees, officers or
directors.

    

    (f)           There
have not been any loans made by FAS to its employees, officers or directors
other than advances of expenses made in the ordinary course of
business.

    

    (g)           To
FAS's knowledge, there has not been any labor organization
activity.

    

    (h)           There
has not been any waiver by FAS of a valuable right or of a material debt owed to
it.

    

    (i)           There
has been no agreement or commitment by FAS to do or perform any of the acts
described in this Section.

    

    2.15              Litigation.  There
is no action, suit, proceeding, investigation or labor dispute (collectively,
"Actions") pending or currently threatened against FAS or the Sellers which
questions the validity of this Agreement or the right of FAS or Sellers to enter
into this Agreement or to consummate the transactions contemplated hereby, or
which might result, either individually or in the aggregate, in a Material
Adverse Event or any change in the current equity ownership of FAS, nor is FAS
or the Sellers aware of any reasonable basis for the foregoing. FAS is not a
party or subject to, and none of its assets are bound by, the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality.  At the date hereof, there is no material legal
action which FAS intends to initiate.

    

    2.16              Compliance with
Agreements.                                                                           The
execution, delivery and performance of this Agreement will not result in any
violation, be in conflict with or constitute, with or without the passage of
time or giving of notice, a default under, or require any consent or waiver
(which has not been obtained) under, any agreement to which FAS or Sellers is a
party. The execution, delivery and performance of this Agreement and the
issuance and sale of the Shares will not result in the creation of any mortgage,
pledge, lien, encumbrance or charge upon any of the properties or assets of
FAS.

    

    2.17              Title to Property and
Assets.  FAS has good and marketable title to its properties
and assets, both real and personal, and to all its leasehold interests, in each
case free and clear of all mortgages, liens, security interests and
encumbrances, except (i) as stated in the Financial Statements or in the notes
thereto, (ii) for liens for current taxes not yet delinquent, (iii) for liens
imposed by law and incurred in the ordinary course of business for obligations
not yet due to carriers, warehousemen, laborers, materialmen and the like, (iv)
for liens in respect of pledges or deposits under workers' compensation laws or
similar legislation and (v) for minor defects in title, none of which, either
individually or in the aggregate, materially interferes with the use of such
property.  The properties and assets of FAS are in good condition and
repair in all material respects.

    

    2.18                      Franchises, Permits,
Etc.  FAS has all franchises, permits, licenses, orders and
approvals of any governmental or regulatory body (collectively, the "Permits")
that are material to or necessary in the conduct of its business.  All
Permits are in full force and effect no violations have been recorded in respect
of any such Permits, and no proceedings are pending or threatened to revoke or
limit any such Permits.

    

    2.19                      Governmental
Consents.  No consent, approval, order or authorization of or
registration, qualification, designation, declaration or filing with, any
governmental authority on the part of FAS or Sellers is required in connection
with the valid execution, delivery and performance of this
Agreement.

    

    2.20                      Compliance With Laws,
Etc.  FAS is in material compliance with all governmental
statutes, laws, ordinances, rules and regulations including, without limitation,
government contract and procurement regulations, export regulations, regulations
requiring the reporting of equity ownership of FAS and changes therein,
regulations concerning hazardous or toxic wastes, material or substance,
pollutants or contaminants, tax statutes and regulations. The execution,
delivery and performance of this Agreement and the issuance and sale of the
Shares will not result in any violation of any governmental statute, rule or
regulation applicable to FAS or the Sellers.

    

    2.21                      Patents, Copyrights and
Trademarks. FAS has sufficient title to and ownership of, all patents,
patent applications, licenses, trademarks, service marks, trade names,
copyrights, trade secrets, inventions, franchises, computer software programs or
other proprietary rights (collectively, "Proprietary Rights") necessary for its
business as now conducted and FAS either now possesses or will be able to obtain
possession of all such rights as it will require to conduct its business as it
is proposed or contemplated to be conducted, and as proposed to be conducted,
without any conflict with or infringement of the rights of others. FAS's
business as presently conducted does not violate any Proprietary Right of any
other person, and FAS has not received any communication alleging such a
violation.  FAS is not aware of any third party which is infringing or
violating any of its Proprietary Rights.

    

    2.22                      Tax Returns and
Payments.  FAS has duly prepared and timely filed all
governmental tax returns required to be filed by it and has paid or established
adequate reserves in the Financial Statements for the payment of all tax
assessments, fees and charges shown on such returns or on assessments received
by FAS.  No deficiency assessment or proposed adjustment of FAS's
income taxes is pending.

    

    2.23                      Authorization.  All
corporate action on the part of the Sellers and its officers, directors and
shareholders which is necessary for the authorization, execution and delivery of
this Agreement for the performance of the Sellers's and FAS's obligations
hereunder and for the issuance and delivery of the Shares has been taken or will
be taken prior to the Closing. This Agreement, when executed and delivered shall
constitute a legal, valid and binding obligation of FAS and the
Sellers.

    

    2.24                      Employee Compensation
Plans.  FAS is not a party to or bound by any currently
effective employment contract, deferred compensation agreement, bonus plan,
incentive plan or arrangement, profit sharing plan, retirement agreement or
other employee compensation agreement.

    

    2.25                      Employee
Relations.  No employees of FAS are represented by any labor
union or covered by any collective bargaining agreement nor, to FAS's knowledge,
is any organizational campaign to establish such representation in
progress.  FAS's relations with its employees are
satisfactory.

    

    2.26                      Transaction with
Affiliates.  None of the officers, employees or directors of
FAS, or any member of their immediate families, or other affiliates of FAS or,
to FAS's knowledge, of any such persons, are a party to any material
arrangement, transaction or business relationship with FAS. There have been no
assumptions or guarantees by FAS of any obligations of such persons or
affiliates nor is FAS indebted to any such persons or affiliates.

    

    2.27                      No
Defaults.  FAS is not in violation of its Articles of
Incorporation, By-Laws or other charter documents or in material default under
any of its material contracts. To FAS's knowledge, no other party to any of its
material contracts is in material default thereunder.

    

    2.28                      Minute
Books.  The minute books of FAS made available to MDIs
contained a complete summary of all meetings of directors and shareholders since
the time of incorporation of FAS and reflect all transactions referred to in
such minutes accurately in all material respects.

    

    2.29                      Insurance.  FAS
has fire, casualty and liability insurance policies, with extended coverage,
sufficient in amount to allow it to replace any of its properties which might be
damaged or destroyed, with policy limits normal for companies of similar size
and engaged in a similar business.

    

    2.30                      Brokers or
Finders.  FAS has not incurred and will not incur, directly or
indirectly, any liability for brokers' or finders' fees, agents', commissions or
other similar charges in connection with this Agreement or any of the
transactions contemplated hereby.

    

    2.31                      No Omissions,
Etc.  No representation, warranty or statement by FAS or the
Sellers in this Agreement or in any other written statement or certificate
furnished or to be furnished to MDI pursuant to this Agreement contains or will
contain any untrue statement of a material fact or, when taken together, omits
or will omit to state a material fact necessary to make the statement made
herein or therein, in light of the circumstances under which they were made, not
misleading.

    

    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:

    

    
      	
              (a)

            	
              A
      certificate(s) issued to MDI by Sellers evidencing the FAS Shares to be
      purchased by MDI;

            

    

    

    
      	
              (b)

            	
              All
      resolutions, certificates and documents MDI may request relating to (i)
      the organization, existence, good standing and foreign qualification of
      Sellers and FAS, (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 FAS, 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;
      and

            

    

    

    
      	
              (c)

            	
              Such
      other documents, instruments and agreements as MDI shall reasonably
      request.

            

    

    

    4.02                      Conditions Precedent to
Obligations of FAS and Sellers.  The obligation of FAS and the
Sellers to sell to MDI the FAS Shares at the Closing is subject to each of the
following conditions having been fulfilled on or prior to the Closing Date or
waived by FAS and the Sellers in accordance with the provisions
hereof:

    

    (a)           Representations, Warranties
and Performance of Obligations.  The representations and
warranties made by MDI in Article III hereof shall be true and correct when
made, and shall be true and correct on the Closing Date with the same force and
effect as if they had been made on and as of said date and MDI shall have
performed all covenants, obligations and conditions herein required to be
performed or observed by it on or prior to the Closing Date.

    

    (b)           Consents and
Waivers.  MDI shall have obtained any and all consents, permits
and waivers and made all filings necessary or appropriate for consummation of
the transactions contemplated by this Agreement.

    

    4.03.                      Deliveries by
MDI.  At the Closing, MDI shall have delivered to Sellers in
form and substance satisfactory to Sellers, each of the following:

    

    
      	
              (a)

            	
              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;

            

    

    

    
      	
              (b)

            	
              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

            

    

    

    (c)           Such
other documents, instruments and agreements as Sellers shall reasonably
request.

    

    4.04                      Conditions Precedent to
Obligations of MDI.  The obligations of MDI under this
Agreement are, at the option of MDI, subject to the fulfillment at or prior to
the Closing Date of each of the following conditions:

    

    (a)           Representations, Warranties
and Performance of Obligations.  The representations and
warranties made by FAS and the Sellers in Article II hereof shall be true and
correct when made, and shall be true and correct on the Closing Date with the
same force and effect as if they had been made on and as of said
date.  No Material Adverse Event shall have occurred prior to the
Closing Date, and FAS and Sellers shall each have performed all covenants,
obligations and conditions herein required to be performed or observed by them
on or prior to the Closing Date.

    

    (b)           Consents and
Waivers.  FAS and Sellers shall have obtained any and all
consents, permits and waivers and made all filings necessary or appropriate for
consummation of the transactions contemplated by this Agreement.

    

    (c)           Due
Diligence.                                           The
due diligence review of FAS and its business shall have been completed by MDI,
and the results thereof shall be satisfactory to MDI in its sole and absolute
discretion.

    

    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.

    

    MDI,
Inc.

    

    

    ____________

    By: J.
Collier Sparks

    Its: CEO
& President

    

    

    FAS
Construction Management, Inc.

    

    

    ______________

    By:
William Wurzbach

    Its:
President

    

    

    Ridgemont
Investment Group, LLC

    

    

    __________________

    By:
Robert A. Rosenthal

    Its:
Manager/Member

    

    

    __________________

    William
M. Wurzbach

    

    

    ______________

    FAS
Interests, LLC

    By: Harry
A. Nass, III

    Its:
Manager

    

    

    ______________

    Little
Roses Trust of 2006

    By:
Robert A. Rosenthal

    Its:
Trustee

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