Current Report — Form 8-K Filing Table of Contents
Document/ExhibitDescriptionPagesSize
1: 8-K Current Report HTML 255K
2: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, HTML 97K Liquidation or Succession
3: EX-3.2 Articles of Incorporation/Organization or By-Laws HTML 57K
4: EX-10.1 Material Contract HTML 67K
5: EX-10.2 Material Contract HTML 7K
6: EX-10.3 Material Contract HTML 14K
8: EX-21.1 Subsidiaries HTML 6K
9: EX-99.1 Miscellaneous Exhibit HTML 298K
10: EX-99.2 Miscellaneous Exhibit HTML 250K
11: EX-99.3 Miscellaneous Exhibit HTML 479K
7: EX-16 Letter re: Change in Certifying Accountant HTML 9K
EX-2.1 — Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
This Agreement and Plan of
Reorganization (the “Agreement”), dated as of the 27th day of March 2009, by and
between Sustut Exploration, Inc., Inc., a Delaware corporation (“Sustut”), and
Optex Systems, Inc., a Delaware corporation (“Optex”), and Sileas Corporation
(“Sileas”), Alpha Capital Anstalt (“Alpha”), and Arland Holdings, Ltd.
(“Arland”) (collectively, “Shareholders”) with reference to the
following:
A. Sustut is a publicly held
Delaware corporation. Sustut has
authorized capital stock of 200,000,000 shares of Common Stock, $.001 par value
per share (“Sustut Common Stock”) and 1,027 shares of Series A Preferred Stock
(“Sustut Series A Preferred Stock”). Of such shares, 44,999,991 shares of Sustut Common Stock are issued
and outstanding, of which 25,000,000 will be cancelled at closing, leaving
19,999,991 outstanding, and no shares of Sustut Series A Preferred Stock are
issued and outstanding.
B. Optex is a privately held
corporation organized under the laws of Delaware. Optex has authorized capital
stock of 300,000,000 shares of Common Stock, $.001 par value per share (“Optex
Common Stock”) and 1,027 shares of Series A Preferred Stock (“Optex Series A
Preferred Stock). Of such shares, 85,000,000shares of Optex Common Stock
are issued and outstanding, and 1,027 shares of Optex Series A Preferred Stock
are issued and outstanding.
C. The respective Boards of
Directors of Sustut and Optex have deemed it advisable and in the best interests
of Sustut and Optex and their respective shareholders that, contingent upon
approval by shareholders holding 100% of the outstanding stock of Optex, all
currently outstanding shares of Optex be acquired by Sustut, pursuant to the
terms and conditions set forth in this Agreement.
D. Certain investors in the
private placement of Optex have separately agreed to a share exchange which
shall occur on a one-for-one basis for shares of Sustut Common Stock in exchange
for their shares of Optex.
E. Sustut, Shareholders and
Optex propose to enter into this Agreement which provides, among other things,
that (i) the outstanding 85,000,000 shares of Optex Common Stock be exchanged by
Sustut for 113,333,282 shares of Sustut Common Stock, (ii) the
outstanding 1,027 shares of Optex Series A Preferred Stock be exchanged by
Sustut for 1,027 shares of Sustut Series A Preferred Stock and such additional
items as more fully described in the Agreement and (iii) the 8,131,667 shares of
Optex purchased in the private placement will be exchanged by Sustut for
8,131,667 shares of Sustut Common Stock, as acknowledged by
Sustut.
NOW, THEREFORE, the parties hereto agree
as follows:
ARTICLE 1
THE EXCHANGE
1.01 At the
Effective Time (as defined in Section 2.01), subject to the terms and
conditions herein, the 85,000,000 shares
of Optex Common Stock issued and outstanding immediately prior to the
Effective Time shall be acquired by Sustut in exchange for 113,333,282
fully paid and nonassessable shares of Sustut Common Stock and 1,027 shares of Optex
Series A Preferred Stock issued and outstanding immediately prior to the
Effective Time shall be acquired by Sustut in exchange for 1,027 shares of
Sustut Series A Preferred Stock (the exchange of all shares of Optex Common
Stock for Sustut Common Stock shall constitute the “Exchange”). The Sustut
Common Stock shall be issued to the Shareholders and/or their nominees in the
amounts set forth on a list provided by Optex to Sustut.
1.02 As of the
Effective Time, each outstanding stock certificate that immediately prior to the
Effective Time represents shares of Optex Common Stock shall be deemed for all
purposes to evidence ownership and to represent the number of shares of Sustut
Common Stock for which such shares of Optex Common Stock have been exchanged
pursuant to Section 1.01. The record holder of each outstanding
certificate representing shares of Optex Common Stock shall, after the Effective
Time, be entitled to vote the Sustut Common Stock for which such shares of Optex
Common Stock have been exchanged on any matters on which the holders of the
Sustut Common Stock are entitled to vote. After the Effective Time, the
holders of certificates evidencing outstanding shares of Optex Common Stock
immediately prior to the Effective Time shall deliver such certificates of Optex
Common Stock, duly endorsed so as to make Sustut the sole holder thereof, free
and clear of all claims, and encumbrances and Sustut shall deliver a transmittal
letter to the transfer agent of Sustut directing the issuance of the Sustut
Common Stock to the shareholders of Optex and/or their nominees. Any
shares of Sustut Common Stock issued pursuant to this Agreement will not be
transferable except (a) pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the “Act”), or (b) upon
receipt by Sustut of a written opinion of counsel for the holder reasonably
satisfactory to Sustut to the effect that the proposed transfer is exempt from
the registration requirements of the Act, and relevant state securities laws.
Restrictive legends shall be placed on all certificates representing Sustut
Common Stock issued pursuant to this Agreement, and the shares of Sustut Common
Stock into which they may be converted, as set forth in
Section 11.02.
In the event any certificate for Optex
Common Stock has been lost, stolen or destroyed, Sustut shall issue and pay in
exchange for such lost, stolen or destroyed certificate, promptly following its
receipt of an affidavit of that fact by the holder thereof, such shares of
Sustut Common Stock as may be required pursuant to this
Agreement.
1.03
Following the Effective
Time, there will be a total of 141,464,940 shares of Sustut Common Stock issued
and outstanding and 1,027 shares of Sustut Series A Preferred Stock outstanding.
1.04
Following the Effective
Time, Optex will be a wholly-owned subsidiary of Sustut.
ARTICLE 2
THE CLOSING
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2.01
Subject to the terms and
conditions herein, the consummation of the transactions contemplated by this
Agreement (the “Closing”) shall take place on or before March 30, 2009 (the
“Closing Date”) or at such other place or date and time as may be agreed to in
writing by the parties hereto at the earliest practicable time after
satisfaction or waiver of the conditions hereof (the “Effective Time” or
“Effective Date”).
2.02
The following conditions
are a part of this Agreement and must be completed on or as of the Closing Date,
or such other date specified by the parties:
(a)
At the Closing, the Board
of Directors of Sustut shall appoint the following individuals as members of the
Board of Directors: Stanley Hirschman, Merrick Okamoto and Ronald
Richards.
(b) Immediately following the appointment of
the individuals listed in Section 2.02(a) above to the Board of Directors,
the Board of Directors of Sustut shall consist of the three directors set forth
in (a).
(c)
Immediately prior to
Closing, all of the current officers of Sustut shall resign as officers of
Sustut. After the Closing Date, the newly constituted Board of Directors
of Sustut consisting of the individuals appointed pursuant to
Section 2.2(a) shall appoint such officers as it deems is
necessary and in the best interests of Sustut.
(d)
Prior to Closing, Sustut
shall have obtained board and shareholder approval to the extent necessary to
(i) consummate the share exchange contemplated by this Agreement,
(ii) create an option pool of 6,000,000 shares of Common Stock, and
(iii) complete, following Closing, in a manner which is reasonably
acceptable to Optex, the sale, spin-off or other disposition of its pre-Closing
operations, including all assets and liabilities.
(e)
Optex shall have delivered
to Sustut its financial statements for the period from October 1, 2007 –
September 30, 2008, which shall have been audited in substantial compliance with
generally accepted accounting principles in the U.S. (“U.S. GAAP”), and which shall be
capable of being audited in accordance with U.S. GAAP.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
SUSTUT
Sustut hereby represents and warrants to
Optex as follows:
3.01
Organization,
Standing and Power.
Sustut is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification
necessary.
3.02
Capital
Structure. As of the
date of execution of this Agreement, the authorized capital stock of Sustut is
as described in the recitals hereto. The Exchange Shares to be issued pursuant
to this Agreement shall be, when issued pursuant to the terms of the resolution
of the Board of Directors of Sustut approving such issuance, validly issued,
fully paid and nonassessable and not subject to preemptive rights. Except
as otherwise specified herein, as of the date of execution of this Agreement,
there are no other options, warrants, calls, agreements or other rights to
purchase or otherwise acquire from Sustut at any time, or upon the happening of
any stated event, any shares of the capital stock of Sustut whether or not
presently issued or outstanding.
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3.03Certificate
of Incorporation, Bylaws, and Minute Books. The copies of the Articles of
Incorporation and of the Bylaws of Sustut which have been delivered to Optex are
true, correct and complete copies thereof. The minute book of Sustut,
which has been made available for inspection, contains accurate minutes of all
meetings and accurate consents in lieu of meetings of the Board of Directors
(and any committee thereof) and of the shareholders of Sustut since the date of
incorporation and accurately reflects all transactions referred to in such
minutes and consents in lieu of meetings.
3.04
Authority. Sustut has all requisite power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Sustut. No other corporate or shareholder
proceedings on the part of Sustut are necessary to authorize the Exchange, or
the other transactions contemplated hereby.
3.05
Conflict
with Other Agreements; Approvals. The execution and delivery of
this Agreement does not, and the consummation of the transactions contemplated
hereby will not result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a material benefit
under, or the creation of a lien, pledge, security interest or other encumbrance
on assets (any such conflict, violation, default, right of termination,
cancellation or acceleration, loss or creation, a “violation”) pursuant to any
provision of the Articles of Incorporation or Bylaws or any organizational
document of Sustut or, result in any violation of any loan or credit agreement,
note, mortgage, indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Sustut which violation
would have a material adverse effect on Sustut taken as a whole. No
consent, approval, order or authorization of, or registration, declaration or
filing with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a “Governmental
Entity”) is required by or with respect to Sustut in connection with the
execution and delivery of this Agreement by Sustut or the consummation by Sustut
of the transactions contemplated hereby.
3.06
Books and
Records. Sustut has
made and will make available for inspection by Optex upon reasonable request all
the books of Sustut relating to the business of Sustut. Such books of Sustut
have been maintained in the ordinary course of business. All documents
furnished or caused to be furnished to Optex by Sustut are true and correct
copies, and there are no amendments or modifications thereto except as set forth
in such documents.
3.07
Compliance
with Laws. Sustut is and
has been in compliance in all material respects with all laws, regulations,
rules, orders, judgments, decrees and other requirements and policies imposed by
any Governmental Entity applicable to it, its properties or the operation of its
businesses.
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3.08
SEC
Filings. As of the date
hereof, Sustut is current in its filing obligations.
3.09
Financial
Statements. Copies of
Sustut’s audited financial statements for the fiscal year ended December 31,2008 have been delivered to Optex.
3.10
Banks. Sustut will deliver to Optex a
true and complete list (in all material respects), as of the date of this
Agreement, showing (1) the name of each bank in which Sustut has an account
or safe deposit box, and (2) the names and addresses of all
signatories.
3.11
Litigation. There is no suit, action or
proceeding pending, or, to the knowledge of Sustut, threatened against or
affecting Sustut which is reasonably likely to have a material adverse effect on
Sustut, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Sustut having, or which,
insofar as reasonably can be foreseen, in the future could have, any such
effect.
3.12
Employees. Sustut has no employees or
consultant contracts and is not in the process of acquiring any employees or
consultant contracts.
3.13
Liens,
Leases and Contracts.
Sustut has no liens, encumbrances, easements, security interests or
similar interests in or on any of its assets. Sustut has no leases
(whether of real or personal property) contracts, promissory notes, mortgages,
licenses, franchises, or other written agreement to which Sustut is a party
which involves or can reasonably be expected to involve aggregate future
payments or receipts by Sustut (whether by the terms of such lease, contract,
promissory note, license, franchise or other written agreement or as a result of
a guarantee of the payment of or indemnity against the failure to pay same)
except any of said instruments which terminate or are cancelable without
penalty.
3.14
Absence of
Undisclosed Liabilities.
Sustut has no liabilities of any nature, whether fixed, absolute, contingent or
accrued. As of the Effective Time, Sustut shall have no assets or liabilities
other than accounts payable.
3.15
Absence of
Changes. Since
January 1, 2009 there has not been any material adverse change in the condition
(financial or otherwise), assets, liabilities, earnings or business of
Sustut.
3.16
Tax
Matters. All taxes and
other assessments and levies which Sustut is required by law to withhold or to
collect have been duly withheld and collected, and have been paid over to the
proper government authorities or are held by Sustut in separate bank accounts
for such payment or are represented by depository receipts, and all such
withholdings and collections and all other payments due in connection therewith
(including, without limitation, employment taxes, both the employee’s and
employer’s share) have been paid over to the government or placed in a separate
and segregated bank account for such purpose. There are no known
deficiencies in income taxes for any periods and all returns, declarations,
reports, estimates and statements required have been filed. There are no
liens or taxes upon any assets of Sustut, except taxes not yet due.
Further, the representations and warranties as to absence of undisclosed
liabilities contained in Section 3.14 includes any and all tax liabilities
of whatsoever kind or nature (including, without limitation, all federal, state,
local and foreign income, profit, franchise, sales, use and property taxes) due
or to become due, incurred in respect of or measured by Sustut income
or business prior to the Effective Date. Copies of Sustut’s tax returns
for years ending December 31, 2006, 2007 and 2008 have been delivered to
Optex.
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3.17
Brokers and
Finders. Sustut shall
be solely responsible for payment to any broker or finder retained by Sustut for
any brokerage fees, commissions or finders’ fees in connection with the
transactions contemplated herein.
3.18
Subsidiaries. Sustut does not have any
subsidiary, or own an ownership interest in any other
corporation.
3.19
Valid
Issuance of Securities.
The Sustut Common Stock, when issued, sold and delivered in accordance
with the terms of this Agreement for the consideration expressed herein, will be
duly and validly issued, fully paid and non assessable, and will be free of
restrictions on transfer other than restrictions on transfer under this
Agreement and under applicable state and federal securities
laws.
3.20
Directors,
Officers and Controlling Shareholders. No director, officer or
controlling shareholder of Sustut has been subject to a criminal proceeding,
bankruptcy, Securities and Exchange Commission or NASD censure in the last five
years nor is any such individual under investigation for any of the
above.
3.21
Accuracy of
Information. No
representation or warranty by Sustut contained in this Agreement and no
statement contained in any certificate or other instrument delivered or to be
delivered to Optex pursuant hereto or in connection with the transactions
contemplated hereby (including without limitation all Schedules and exhibits
hereto) contains or will contain any untrue statement of material fact or omits
or will omit to state any material fact necessary in order to make the
statements contained herein or therein not misleading.
3.22
Full
Disclosure. The
representations and warranties of Sustut contained in this Agreement (and in any
schedule, exhibit, certificate or other instrument to be delivered under this
Agreement) are true and correct in all material respects, and such
representations and warranties do not omit any material fact necessary to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact of which Sustut has knowledge
that has not been disclosed to Optex pursuant to this Agreement, including the
schedules hereto, all taken together as a whole, which has had or could
reasonably be expected to have a material adverse effect on Sustut or Optex or
materially adversely affect the ability of Sustut to consummate in a timely
manner the transactions contemplated hereby.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF
OPTEX
Optex hereby represents and warrants to
Sustut as follows:
4.01 Organization, Standing and
Power. Optex is a corporation duly organized, validly existing and
in good standing under the laws of Singapore, has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification
necessary.
4.02
Capital
Structure. The
capitalization of Optex is as stated in the recitals hereto.. All
outstanding shares of Optex stock are validly issued, fully paid and
nonassessable and not subject to preemptive rights or other restrictions on
transfer. All of the issued and outstanding shares of Optex were issued in
compliance with all applicable securities laws. Except as otherwise
specified herein, there are no options, warrants, calls, agreements or other
rights to purchase or otherwise acquire from Optex at any time, or upon the
happening of any stated event, any shares of the capital stock of
Optex.
4.03
Authority. Optex has all requisite power to
enter into this Agreement and, subject to approval of the proposed transaction
by the holders of 100% of its issued and outstanding shares which are entitled
to vote to approve the proposed transaction, has the requisite power and
authority to consummate the transactions contemplated hereby. Except as
specified herein, no other corporate or shareholder proceedings on the part of
Optex are necessary to authorize the Exchange and the other transactions
contemplated hereby.
4.04
Conflict
with Agreements; Approvals.
The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation of any provision of the Certificate of Incorporation or
Bylaws of Optex or of any loan or credit agreement, note, mortgage, indenture,
lease, benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Optex or its properties or assets.
No consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to Optex in
connection with the execution and delivery of this Agreement by Optex, or the
consummation by Optex of the transactions contemplated
hereby.
4.06
Financial
Statements. Optex
will deliver to Sustut financial statements for the period from October 1, 2007
– September 30, 2008, which shall have been audited in substantial compliance
with U.S. GAAP, and which shall be capable of being audited in accordance with
U.S. GAAP.
4.07
Compliance
with Laws. Optex is
and has been in compliance in all material respects with all laws, regulations,
rules, orders, judgments, decrees and other requirements and policies imposed by
any Governmental Entity applicable to it, its properties or the operation of its
businesses.
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4.08
Broker and
Finders. Optex shall
be solely responsible for payment to any broker or finder retained by Optex for
any brokerage fees, commissions or finders’ fees in connection with the
transactions contemplated herein.
4.09 Accuracy of
Information. No
representation or warranty by Sustut contained in this Agreement and no
statement contained in any certificate or other instrument delivered or to be
delivered to Optex pursuant hereto or in connection with the transactions
contemplated hereby (including without limitation all Schedules and exhibits
hereto) contains or will contain any untrue statement of material fact or omits
or will omit to state any material fact necessary in order to make the
statements contained herein or therein not misleading.
4.10
Full
Disclosure. The
representations and warranties of Optex contained in this Agreement (and in any
schedule, exhibit, certificate or other instrument to be delivered under this
Agreement) are true and correct in all material respects, and such
representations and warranties do not omit any material fact necessary to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading. There is no fact of which Optex has knowledge that
has not been disclosed to Sustut pursuant to this Agreement, including the
schedules hereto, all taken together as a whole, which has had or could
reasonably be expected to have a material adverse effect on Sustut or Optex or
materially adversely affect the ability of Optex to consummate in a timely
manner the transactions contemplated hereby.
ARTICLE 5
CONDUCT AND TRANSACTIONS PRIOR TO
THE
EFFECTIVE TIME OF THE
ACQUISITION
5.01
Conduct and
Transactions of Sustut.
During the period from the date hereof to the Effective Date, Sustut
shall:
(a)
Conduct its operations in
the ordinary course of business, including but not limited to, paying all
obligations as they mature, complying with all applicable tax laws, filing all
tax returns required to be filed and paying all taxes due;
and
(b)
Maintain its records and
books of account in a manner that fairly and correctly reflects its income,
expenses, assets and liabilities.
Sustut shall not during such period,
except in the ordinary course of business, without the prior written consent of
Optex:
(c)
Except as otherwise
contemplated or required by this Agreement, sell, dispose of or encumber any of
its properties or assets;
(d)
Except as set forth in
paragraph 5.01(c) above, declare or pay any dividends on shares of its
capital stock or make any other distribution of assets to the holders
thereof;
(e) Except as set
forth in paragraph 5.01(d) above, issue, reissue or sell, or issue capital
stock of Sustut or options or rights to subscribe to, or enter into any contract
or commitment to issue, reissue or sell, any shares of its capital stock or
acquire or agree to acquire any shares of its capital stock;
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(f)
Except as otherwise
contemplated and required by this Agreement, amend its Certificate of
Incorporation or merge or consolidate with or into any other corporation or sell
all or substantially all of its assets or change in any manner the rights of its
capital stock or other securities;
(g)
Except as contemplated or
required by this Agreement, pay or incur any obligation or liability, direct or
contingent, of more than $1,000;
(h)
Incur any indebtedness for
borrowed money, assume, guarantee, endorse or otherwise become responsible for
obligations of any other party, or make loans or advances to any other party
other than to Optex;
(i)
Make any material change in
its insurance coverage;
(j)
Increase in any manner the
compensation, direct or indirect, of any of its officers or executive employees;
except in accordance with existing employment contracts;
(k)
Enter into any agreement or
make any commitment to any labor union or organization; or
(l)
Make any capital
expenditures.
5.02
Conduct and
Transactions of Optex.
During the period from the date hereof to Effective Date, Optex
shall:
(a)
Conduct the operations of
Optex in the ordinary course of business.
Optex shall not during such period,
except in the ordinary course of business, without the prior written consent of
Sustut:
(b)
Declare or pay any
dividends on shares of its capital stock or make any other distribution of
assets to the holders thereof;
(c)
Issue, reissue or sell, or
issue capital stock of Optex or options or rights to subscribe to, or enter into
any contract or commitment to issue, reissue or sell, any shares of its capital
stock or acquire or agree to acquire any shares of its capital stock; or other
securities; or
(d) Except as
otherwise contemplated and required by this Agreement, amend its Certificate of
Incorporation or merge or consolidate with or into any other corporation or sell
substantially all of its assets or change in any manner the rights of its
capital stock or other securities.
ARTICLE 6
RIGHTS OF INSPECTION
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6.01
Due
Diligence; Access to Information; Confidentiality.
(a)
Between the date hereof and
the Closing Date, Sustut and Optex shall afford to the other party and their
authorized representatives the opportunity to conduct and complete a due
diligence investigation of the other party as described herein. In light
of the foregoing, each party shall permit the other party full access on
reasonable notice and at reasonable hours to its properties and shall disclose
and make available (together with the right to copy) to the other party and its
officers, employees, attorneys, accountants and other representatives
(hereinafter collectively referred to as “Representatives”), all books, papers, and records
relating to the assets, stock, properties, operations, obligations and
liabilities of such party and its subsidiaries, including, without limitation,
all books of account (including, without limitation, the general ledger), tax
records, minute books of directors’ and stockholders’ meetings, organizational
documents, bylaws, contracts and agreements, filings with any regulatory
authority, accountants’ work papers, litigation files (including, without
limitation, legal research memoranda), attorney’s audit response letters,
documents relating to assets and title thereto (including, without limitation,
abstracts, title insurance policies, surveys, environmental reports, opinions of
title and other information relating to the real and personal property), plans
affecting employees, securities transfer records and stockholder lists, and any
books, papers and records (collectively referred to herein as “Evaluated
Material”) relating to
other assets or business activities in which such party may have a reasonable
interest, and otherwise provide such assistance as is reasonably requested in
order that each party may have a full opportunity to make such investigation and
evaluation as it shall reasonably desire to make of the business and affairs of
the other party; provided, however, that the foregoing rights granted to each
party shall, whether or not and regardless of the extent to which the same are
exercised, in no way affect the nature or scope of the representations,
warranties and covenants of the respective party set forth herein. In
addition, each party and its Representatives shall cooperate fully (including
providing introductions, where necessary) with such other party to enable the
party to contact third parties, including customers, prospective customers,
specified agencies or others as the party deems reasonably necessary to complete
its due diligence; provided that such party agrees not to initiate such contacts
without the prior approval of the other party, which approval will not be
unreasonably withheld.
(b)
Sustut and Optex agree that
each such party will not use the Evaluation Material for any purpose other than
in connection with the transactions contemplated hereunder. Each agrees
not to disclose or allow disclosure to others of any Evaluation Material, except
to such party’s Affiliates or Representatives, in each case, to the extent
necessary to permit such Affiliate or Representative to assist such party in
connection with the transactions contemplated hereunder. Each agrees that
it will, within ten (10) days of the other party’s request, re-deliver to such
party all copies of that party’s Evaluation Material in its possession or that
of its affiliates or Representatives if the Exchange contemplated by this
Agreement does not close as contemplated herein.
(c)
In the event any party or
anyone to whom Evaluation Material has been transmitted in accordance with the
terms herein is requested in connection with any proceeding to disclose any
Evaluation Material, such party will give the other party prompt notice of such
request so that the other party may seek an appropriate protective order or
other remedy or waive compliance with this Agreement, and such party will
cooperate with the other party to obtain such protective order. In the
event such protective order is not obtained, the other party waives compliance
with the relevant provisions of this Section, such party (or such person to whom
such request is directed) will furnish only that portion of the Evaluation
Material which is required to be disclosed.
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(d)
Notwithstanding any of the
foregoing, if prior to Closing, for any reason, the transactions contemplated by
this Agreement are not consummated, neither Sustut nor Optex nor any of their
Representatives shall disclose to third parties or otherwise use any Evaluation
Material or other confidential information received from the other party in the
course of investigating, negotiating, and performing the transactions
contemplated by this Agreement; provided, however, that nothing shall be deemed
to be confidential information which:
(i)
is or becomes generally
available to the public other than as a result of a disclosure by such party,
its affiliates or Representatives;
(ii)
was available to such party
on a non-confidential basis prior to its disclosure;
(iii)
becomes available to such
party on a non-confidential basis from a source other than the other party or
its agents, advisors or Representatives;
(iv)
developed by such party
independently of any disclosure by the other party; or
(v)
is disclosed in compliance
with Section 6.01(c).
This provision shall not prohibit the
disclosure of information required to be made under federal or state securities
laws. If any disclosure is so required, the party making such disclosure
shall consult with the other party prior to making such disclosure, and the
parties shall use all reasonable efforts, acting in good faith, to agree upon a
text for such disclosure which is satisfactory to both
parties.
6.02
Sustut and Optex each agree
that money damages would not be sufficient to remedy any breach by the other
party of this Section, and that, in addition to all other remedies, each party
against which a breach of this Section has been committed shall be entitled
to specific performance and injunctive or other equitable relief as a remedy of
such breach.
ARTICLE 7
CONDITIONS TO
CLOSING
7.01
Conditions
to Obligations of Optex.
The obligation of Optex to perform this Agreement is subject to the
satisfaction of the following conditions on or before the Closing unless waived
in writing by Optex.
(a)
Representations
and Warranties.
There shall be no information disclosed in the schedules delivered by
Sustut, which in the opinion of Optex, would materially adversely affect the proposed
transaction and intent of the parties as set forth in this Agreement. The
representations and warranties of Sustut set forth in Article 3 hereof
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing as though made on and as of the Closing, except
as otherwise permitted by this Agreement.
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(b)
Performance
of Obligations.
Sustut shall have in all material respects performed all agreements
required to be performed by it under this Agreement and shall have performed in
all material respects any actions contemplated by this Agreement prior to or on
the Closing and Sustut shall have complied in all material respects with the
course of conduct required by this Agreement.
(c)
Corporate
Action and Share Cancellation. Sustut shall have furnished
minutes, certified copies of corporate resolutions and/or other documentary
evidence satisfactory to counsel for Optex that Sustut has submitted with this
Agreement and any other documents required hereby to such parties for approval
as provided by applicable law. At closing, 25,000,000 Sustut shall
cancel 25,000,000 shares held by its former CEO.
(d)
Consents. Execution Consents necessary for
or approval of any party listed on any Schedule delivered by Sustut whose
consent or approval is required pursuant thereto shall have been
obtained.
(e)
Statutory
Requirements. All
statutory requirements for the valid consummation by Sustut of the transactions
contemplated by this Agreement shall have been fulfilled.
(f)
Governmental
Approval. All
authorizations, consents, approvals, permits and orders of all federal and state
governmental agencies required to be obtained by Sustut for consummation of the
transactions contemplated by this Agreement shall have been
obtained.
(g)
Market
Condition. Up to and
including the Closing Date, Sustut shall have maintained its listing on the OTC
Bulletin Board, without any trading and quotation halts or other notices of
deficiency received by or imposed against Sustut.
(h)
Changes in
Financial Condition of Sustut. There shall not have occurred
any material adverse change in the financial condition or in the operations of
the business of Sustut, except expenditures in furtherance of this
Agreement.
(i)
Absence of
Pending Litigation.
Sustut is not engaged in or threatened with any suit, action, or legal,
administrative or other proceedings or governmental investigations pertaining to
this Agreement or the consummation of the transactions contemplated
hereunder.
(j)
Authorization
for Issuance of Stock.
Optex shall have received in form and substance satisfactory to counsel
for Optex a letter instructing and authorizing the transfer agent for the shares
of common stock of Sustut to issue stock certificates representing ownership of
Sustut common stock to Optex shareholders in accordance with the terms of this
Agreement upon surrender by such shareholders of their share certificates
representing ownership of shares in Optex duly endorsed for transfer, and a
letter from said transfer agent acknowledging receipt of the letter of
instruction and stating to the effect that the Transfer Agent holds adequate
supplies of stock certificates necessary to comply with the letter of
instruction and the terms and conditions of this Agreement.
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(k)
Books and
Records. Sustut shall
deliver to Optex all books and records of Sustut.
7.02
Conditions
to Obligations of Sustut.
The obligation of Sustut to perform this Agreement is subject to the
satisfaction of the following conditions on or before the Closing unless waived
in writing by Sustut.
(a)
Performance
of Obligations. Optex
shall have in all material respects performed all agreements required to be
performed by it under this Agreement and shall have performed in all material
respects any actions contemplated by this Agreement prior to or on the Closing
and Optex shall have complied in all respects with the course of conduct
required by this Agreement.
(b)
Corporate
Action. Optex shall
have furnished minutes, certified copies of corporate resolutions and/or other
documentary evidence satisfactory to counsel for Sustut that Optex has submitted
with this Agreement and any other documents required hereby to such parties for
approval as provided by applicable law.
(c)
Financial
Statements. Sustut
shall have been furnished with audited financial statements of Optex including,
but not limited to, balance sheets, income statements, statements of
stockholders’ equity and statements of cash flows as at and for the year ended
September 30, 2008, each prepared in substantial compliance with U.S. GAAP,
which are capable of being audited in accordance with U.S. GAAP, and which
fairly present the financial condition and results of operations of Optex at the
dates thereof and for the periods presented.
(d)
Statutory
Requirements. All
statutory requirements for the valid consummation by Optex of the transactions
contemplated by this Agreement shall have been fulfilled.
(e)
Governmental
Approval. All
authorizations, consents, approvals, permits and orders of all federal and state
governmental agencies required to be obtained by Optex for consummation of the
transactions contemplated by this Agreement shall have been
obtained.
(f)Shareholder
Approval. All Optex
shareholders shall have provided written approval of this Agreement and Plan of
Reorganization, shall have provided representations reasonably satisfactory to
Sustut to the effect that they own their shares of Optex free and clear of
liens, claims or encumbrances of any kind, have the requisite power and
authority to transfer such shares pursuant to and in accordance with the terms
of this Agreement and Plan of Reorganization, and have delivered the share
certificates representing their ownership of shares in Optex to Sustut duly
endorsed for transfer.
ARTICLE 8
MATTERS SUBSEQUENT TO
CLOSING
8.01
Covenant of
Further Assurance.
The parties covenant and agree that they shall, from time to time, execute
and deliver or cause to be executed and delivered all such further instruments
of conveyance, transfer, assignments, receipts and other instruments, and shall
take or cause to be taken such further or other actions as the other party or
parties to this Agreement may reasonably deem necessary in order to carry out
the purposes and intent of this Agreement.
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ARTICLE 9
NATURE OF
REPRESENTATIONS
9.01 All statements
contained in any written certificate, schedule, exhibit or other written
instrument delivered by Sustut or Optex pursuant hereto, or otherwise adopted by
Sustut, by its written approval, or by Optex by its written approval, or in
connection with the transactions contemplated hereby, shall be deemed
representations and warranties by Sustut or Optex as the case may be. All
representations, warranties and agreements made by either party shall survive
for the period of the applicable statute of limitations.
ARTICLE 10
INDEMNIFICATION
10.01
Indemnity of
Optex. Sustut agrees
to defend, indemnify and hold harmless Optex from and against, and to reimburse
Optex with respect to, all liabilities, losses, costs and expenses, including,
without limitation, reasonable attorneys’ fees and disbursements, asserted
against or incurred by Optex by reason of, arising out of, or in connection with
any material breach of any representation or warranty contained in this
Agreement made by Sustut or in any document or certificate delivered by Sustut
pursuant to the provisions of this Agreement or in connection with the
transactions contemplated thereby.
10.02
Indemnity of
Sustut. Optex agrees to
defend, indemnify and hold harmless Sustut from and against, and to reimburse
Sustut with respect to, all liabilities, losses, costs and expenses, including,
without limitation, reasonable attorneys’ fees and disbursements, asserted
against or incurred by Sustut by reason of, arising out of, or in connection
with any material breach of any representation or warranty contained in this
Agreement made by Optex or in any document or certificate delivered by Optex
pursuant to the provisions of this Agreement or in connection with the
transactions contemplated thereby.
10.03
Indemnification
Procedure. A party (an
“Indemnified Party”) seeking indemnification shall give prompt notice to the
other party (the “Indemnifying Party”) of any claim for indemnification arising
under this Article 10. The Indemnifying Party shall have the right to
assume and to control the defense of any such claim with counsel reasonably
acceptable to such Indemnified Party, at the Indemnifying Party’s own cost and
expense, including the cost and expense of reasonable attorneys’ fees and
disbursements in connection with such defense, in which event the Indemnifying
Party shall not be obligated to pay the fees and disbursements of separate
counsel for such in such action. In the event, however, that such
Indemnified Party’s legal counsel shall determine that defenses may be available
to such Indemnified Party that are different from or in addition to those
available to the Indemnifying Party, in that there could reasonably be expected
to be a conflict of interest if such Indemnifying Party and the Indemnified
Party have common counsel in any such proceeding, or if the Indemnified Party
has not assumed the defense of the action or proceedings, then such Indemnifying
Party may employ separate counsel to represent or defend such Indemnified Party,
and the Indemnifying Party shall pay the reasonable fees and disbursements of
counsel for such Indemnified Party. No settlement of any such claim or payment
in connection with any such settlement shall be made without the prior consent
of the Indemnifying Party which consent shall not be unreasonably
withheld.
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ARTICLE 11
TERMINATION OF AGREEMENT
AND
ABANDONMENT OF
REORGANIZATION
11.01
Termination. Anything herein to the contrary
notwithstanding, this Agreement and any agreement executed as required hereunder
and the acquisition contemplated hereby may be terminated at any time before the
Closing as follows:
(a)
By mutual written consent
of the Boards of Directors of Sustut and Optex.
(b) By the Board of
Directors of Sustut if any of the conditions set forth in Section 7.02
shall not have been satisfied by the Closing Date.
(c)
By the Board of Directors
of Optex if any of the conditions set forth in Section 7.01 shall not have
been satisfied by the Closing Date.
(d)
By the Board of Directors
of Optex if this Agreement and Plan of Reorganization is not duly approved by
the stockholders of Optex following a vote of the stockholders of
Optex.
(e)
By either of the Boards of
Directors of Sustut or Optex if the Closing Date is not on or before March 31,2009, or such later date as Sustut and Optex may mutually agree (except that a
party seeking to terminate this Agreement pursuant to this clause may not do so
if the failure to consummate the Exchange contemplated by this Agreement by such
date shall be due to the action or failure to act of the party seeking to
terminate the Agreement in breach of such party’s obligations under this
Agreement).
11.02
Termination
of Obligations and Waiver of Conditions; Payment of Expenses. In the event this Agreement and
the acquisition are terminated and abandoned pursuant to this Article 11
hereof, this Agreement shall become void and of no force and effect and there
shall be no liability on the part of any of the parties hereto, or their
respective directors, officers, shareholders or controlling persons to each
other. For the costs and expenses incident to its negotiation and
preparation of this Agreement and any of the documents evidencing the
transactions contemplated hereby, including fees, expenses and disbursements of
counsel, Sustut shareholders shall bear the expenses incurred by Sustut, and
Optex shareholders shall bear the expenses incurred by
Optex.
ARTICLE 12
EXCHANGE OF SHARES
12.01
Exchange of
Shares. At the
Effective Time, Sustut shall issue a letter to the transfer agent of Sustut with
a copy of the resolution of the Board of Directors of Sustut authorizing and
directing the issuance of Sustut shares as set forth on a list provided by Optex
to Sustut prior to the Effective Time.
15
12.02
Restrictions
on Shares Issued to Optex.
Due to the fact that the offer and sale of the Sustut Common Stock being
issued in connection with the acquisition have not been registered under the Act
by virtue of the exemption provided in Section 4(2) of such Act, such
shares of Sustut will contain the following legend:
The offer and sale of the shares
represented by this certificate have not been registered under the Securities
Act of 1933. The shares have been acquired for investment and may not be
sold or offered for sale in the absence of an effective Registration Statement
for such offer and sale under the Securities Act of 1933 or an opinion of
counsel to the Corporation that such registration is not
required.
ARTICLE 13
MISCELLANEOUS
13.01 Expenses. All
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses.
13.02
Notices. All notices, requests, demands
or other communications hereunder shall be in writing, hand delivered or mailed
by certified mail, return receipt required, or by overnight courier, receipt
signature required or by facsimile transmission with verification of
transmission received by the sender, to each party at the address that follows
or at such other place as either party may, by written notice to the other
parties hereto, direct:
Any such notice, when sent in accordance
with the provisions hereof, shall be deemed to have been given and received
(a) on the day personally delivered or faxed (with confirmation) or
(b) on the second day after the day overnight delivered or (c) on the
fifth day following the date mailed.
13.03 Amendment and Waiver.
The parties hereby may, by mutual agreement in writing signed by or on
behalf of each party, amend this Agreement in any respect. Any term or
provision of this Agreement may be waived in writing signed by an authorized
officer at any time by the party against which such waiver is to be charged,
such waiver right shall include, but not be limited to, the right of either
party to:
(a)
Extend the time for the
performance of any of the obligations of the other;
(b)
Waive any inaccuracies in
representations by the other contained in this Agreement or in any document
delivered pursuant hereto;
(c)
Waive compliance by the
other with any of the covenants contained in this Agreement, and performance of
any obligations by the other; and
(d)
Waive the fulfillment of
any condition that is precedent to the performance by the party so waiving of
any of its obligations under this Agreement.
Any writing on the part of a party
relating to such amendment, extension or waiver as provided in this Section
13.03 shall be valid if authorized or ratified by the Board of Directors of such
party.
13.04
Remedies not
Exclusive. No remedy
conferred by any of the specific provisions of this Agreement is intended to be
exclusive of any other remedy, and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise. The election of
any one or more remedies by Sustut or Optex shall not constitute a waiver of the
right to pursue other available remedies.
13.05
Attorneys’
Fees. In the event a
dispute arises with respect to this Agreement, the party prevailing in such
dispute shall be entitled to recover all expenses, including, without
limitation, reasonable attorneys’ fees and expenses, incurred in ascertaining
such party’s rights, in preparing to enforce, or in enforcing such party’s
rights under this Agreement, whether or not it was necessary for such party to
institute suit.
13.06
Governing
Law; Venue. Any dispute in the meaning, effect or
validity of this Agreement shall be resolved in accordance with the laws of the
State of Delaware without regard to the conflict of laws
provisions thereof. The parties hereby expressly consent to the personal
jurisdiction of the state and federal courts located in Wilmington, Delaware, for any lawsuit against either party
arising from or related to this Agreement.
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13.07
Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same
instrument.
13.08
Benefit. This Agreement shall be binding
upon, and inure to the benefit of, the respective successors and assigns of
Sustut and Optex and its shareholders.
13.09 Entire Agreement.
This Agreement and the Schedules and Exhibits attached hereto, represent
the entire agreement of the undersigned regarding the subject matter hereof, and
supersedes all prior written or oral understandings or agreements between the
parties.
13.10
Captions and
Section Headings.
Captions and section headings used herein are for convenience only and
shall not control or affect the meaning or construction of any provision of this
Agreement.
