Exhibit 10.1

Reverse Merger Agreement

 

Dated as of September 28, 2011

 

This letter confirms the agreement of Tennessee Materials, Inc., whose address
is 1455 Bud Cleary Road, Stantonville, TN 38379, or any of its successors,
assigns, subsidiaries or affiliates (collectively referred to herein as the
“Company”) to effect a reverse merger (the “Merger”) with Stalar 2, Inc., a
Delaware corporation (the “Reporting Company”), an entity controlled by Dr.
Steven Fox, whose address is 317 Madison Avenue, Suite 1520, New York, NY 10017.
The Merger shall be structured so that immediately following consummation of the
Merger and any planned financing entered into in connection therewith, the
previous shareholders of the Reporting Company, or their designees, shall
continue to own shares of the Reporting Company equal to a total of five percent
(5%) of the fully-diluted capital stock of the Reporting Company (calculated
post-money, e.g. after any planned equity financing transaction involving the
Reporting Company contemplated to occur prior to, simultaneously with, or
immediately subsequent to, the Merger). Such shares shall be entitled to
piggy-back registration rights, subject to standard cutbacks by underwriters.

 

This letter is a binding agreement (the “Agreement”) that evidences the parties’
agreement to consummate the Merger consistent with the terms and conditions
outlined herein. Both parties acknowledge and agree that they shall negotiate in
good faith and execute and deliver the definitive agreements to consummate the
Merger. Additionally, the Company represents to the Reporting Company that its
entry into this Agreement does not violate or breach any other agreements that
the Company is currently a party to with any other third parties.

 

1.     Exclusive Dealing.

 

(a) The Company, the Company’s shareholders and the Company’s directors,
officers, employees and agents: will not directly or indirectly, through any
representative or otherwise, solicit or entertain offers from, negotiate with or
in any manner encourage, discuss, accept, or consider any proposal of any other
person relating to an acquisition or merger of the Company into an entity that
is a reporting company under the Exchange Act of 1934, as amended, for a period
of twelve months from the date hereof.

 

(b) The Company will immediately notify the Reporting Company regarding any
contact between the Company, and any other person or entity regarding any such
offer or proposal or any related inquiry.

 

2.     Costs; Escrow. The Company will be responsible for and bear all of the
costs and expenses (including broker's or finder’s fees, investment banking
fees, reasonable attorneys’ fees, accountants' fees and travel expenses approved
by the Company) incurred, at any time in connection with pursuing or
consummating the Merger and the transactions contemplated herein and the Company
further agrees to reimburse and indemnify the Reporting Company and its officers
and directors for all reasonable out of pocket expenses incurred in connection
with the Merger, whether or not such transaction is actually consummated, up to
a maximum of $12,500 (the “Fee Amount”). In consideration of the Reporting
Company entering into this agreement, the Company has agreed to place the Fee
Amount into the escrow account of the Reporting Company’s counsel. Upon the
presentation of invoices and/or receipts by the Reporting Company’s accountants
and attorneys relating to such costs and expenses, the Reporting Company’s
counsel, as escrow agent, shall release such amounts from the escrowed funds. If
the Company does not effect the Merger for any reason, other than the fault of
the Reporting Company, the escrowed funds, less any funds previously disbursed,
shall be paid to the Reporting Company as liquidated damages.

 

3.     No Fiduciary Relationship. It is understood and agreed that neither the
Reporting Company, nor its officers or directors are acting as agent or
fiduciary of, and have no liabilities to, the equity holders of the Company or
any other third party in connection with this Agreement or the Merger, all of
which liabilities are expressly waived.

 

4.     Initial Due Diligence. The Reporting Company, on the one hand, and the
Company, on the other hand, shall have the right to perform initial due
diligence (“Initial Due Diligence”) of the other party as it deems necessary and
appropriate so that it can determine, in its sole and absolute discretion,
whether the other party is a suitable candidate for the Merger. Reporting
Company’s Initial Due Diligence may include without limitation consultation with
the Company’s accountants and PCAOB-registered independent auditing firm
regarding whether the Company’s financial statements can be audited in
accordance with US GAAP and the requirements of the SEC. Either party shall have
the right to terminate this Agreement upon giving notice to the other party, if
it determines, in its sole and absolute discretion, that it is not satisfied
with a material item discovered during the due diligence process (a “Due
Diligence Exception”).

 

 

 

5.     Confidential Information.

 

(a) For the purposes of this Agreement, the “Confidential Information” of one
Party (the “Disclosing Party”) shall mean any and all documents, information,
trade secrets or other data (whether recorded or otherwise), concerning such
Party or any of its subsidiaries or other affiliates, their respective
businesses, customers, potential customers, suppliers, partners, service
providers, brokers, marketing plans, advertising, contracts, potential
contracts, strategies, forecasts, pricing methods, practices, techniques,
business plans, financial plans, research, development, purchasing, accounting,
know-how, technical data, processes and product development. 

(b) Each Party that receives Confidential Information (a “Receiving Party”) of a
Disclosing Party hereby agrees that it shall (i) hold in confidence all
Confidential Information of the Disclosing Party and will not, either directly
or indirectly, use, sell, lend, lease, distribute, license, give, transfer,
assign, show, disclose, disseminate, reproduce, copy, appropriate or otherwise
communicate any such Confidential Information, without the prior written consent
of the Disclosing Party, and (ii) upon the request of the Disclosing Party, the
Receiving Party shall deliver to the Disclosing Party all memoranda, notes,
records, manuals and other documents, including all copies of such materials and
all documentation prepared or produced in connection therewith, containing the
Disclosing Party’s Confidential Information, whether made or compiled by the
Receiving Party or furnished to the Receiving Party from another source. 

(c) Notwithstanding the provisions of Section (b), either Party (a “Revealing
Party”) shall have the authority to disclose Confidential Information about the
Disclosing Party, to the extent that such disclosure is: (i) required by law;
(ii) required by the rules and regulations of any governmental agency (including
without limitation the U.S. Securities and Exchange Commission) or
self-regulatory organization (“SROs”), including without limitation FINRA, the
Over-the-Counter Bulletin Board, the Nasdaq Stock Market, the American Stock
Exchange and the New York Stock Exchange; (iii) required by order of any
arbitrator, mediator or court having jurisdiction over the Revealing Party; or
(iv) information that has already become public through no action of the
Revealing Party; and provided further that in the case of a disclosure under
Sections 5(c)(i), (ii) or (iii), the Revealing Party shall give prompt written
notice to the Disclosing Party so that the Disclosing Party may, in its sole and
absolute discretion, but without affecting the right and obligations of the
Revealing Party to make the disclosures required of it, seek to take action to
limit the disclosures required of the Revealing Party. 

 

6.      Indemnification. To the fullest extent permitted by law, the Company, on
the one hand, and the Reporting Company, on the other hand, will, and hereby
does, indemnify, hold harmless and defend the other party and such party’s
directors, officers, employees, counsel, agents, representatives of, and each
person, if any, who controls within the meaning of the Securities Act or the
Exchange Act, the other party (each, an “Indemnified Person”), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, attorneys’ fees, amounts paid in settlement or expenses, joint or several
(collectively, a “Claim”) incurred in investigation, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency or body, whether pending or threatened, whether or not an
Indemnified Person is or may be a party thereto, to which any of them may become
subject, insofar as such Claims arise out of or are based upon any breach of any
of the respective representations, warranties, covenants and agreements
contained in this Agreement. The indemnifying party shall reimburse the
Indemnified Person, promptly as such expenses are incurred and are due and
payable. This section shall survive termination of this Agreement.

 

7.     Independent Contractor. In the performance of the services provided under
this Agreement and any other services one party may provide to the other, the
parties shall act in the capacity of independent contractor and not as officer,
employee, joint venture or partner of the other party.

 

8.     Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto, and supersedes all prior oral or written agreements,
understandings, representations and warranties, and courses of conduct and
dealing between the parties on the subject matter hereof. Except as otherwise
provided herein, this Agreement may be amended or modified only in writing,
executed by all of the parties hereto.

 

9.     Governing Law; Dispute Resolution. This Agreement will be governed by and
construed under the laws of the State of New York but without regard to
conflicts of laws principles. The Reporting Company, in its sole discretion, may
commence a legal action or claim for specific performance against the Company in
the State of New York. The Company hereby submits to the exclusive personal and
subject matter jurisdiction of the federal or state courts located in the State
of New York.

 

10.     Counterparts. This Agreement may be executed in one or more counterparts
by delivery of an original or electronic copy of a signed counterpart, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.

 

 

 

11.     Term and Termination. This Agreement shall be in effect for a period of
12 months from the date hereof; provided, however, in the event that one of the
parties determines that there is a Due Diligence Exception, then such party
shall have the right to immediately terminate this Agreement without any
liability to the other party. Additionally, in the event that the Reporting
Company terminates this Agreement in accordance with this Section, the Company
shall be responsible to promptly reimburse the Reporting Company for all of its
reasonable expenses incurred in connection with performing its duties pursuant
to the terms of this Agreement, up to a maximum amount equal to the Fee Amount
(less any amounts already paid out of the escrow account). Notwithstanding
anything to the contrary contained in this Agreement, Section 5
(confidentiality) and Section 6 (indemnification) shall survive the termination
of this Agreement for periods of seven years and three years from the date of
this Agreement, respectively.

 

12.     Notices. All notices and other communications given or made pursuant to
this Agreement shall be in writing and shall be deemed effectively given: (i)
upon personal delivery to the party to be notified; (ii) when sent, if sent by
electronic mail (with electronic receipt requested) or facsimile during normal
business hours of the recipient, and if not sent during normal business hours,
then on the recipient’s next business day; (iii) three (3) calendar days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iv) one (1) business day after deposit with a nationally
recognized overnight courier, freight prepaid, specifying next business day
delivery, with written verification of receipt. All communications shall be sent
to the respective parties at their address as set forth on the first page of
this Agreement, or to such e-mail address, facsimile number or address as
subsequently modified by written notice given in accordance with this Section
12.

 

13. Severability. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.

 

14. Successors and Assigns. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the Parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

15. Amendment. Any amendments to this Agreement shall be in writing, signed by
both Parties.

 

VERY TRULY YOURS,

 

Stalar 2, Inc.

 

By: ___________________________

Dr. Steven R. Fox, President

ACKNOWLEDGED AND AGREED TO BY:

 

COMPANY:

 

TENNESSEE MATERIALS, INC.

 

By: ___________________________