EXECUTION COPY
SHARE EXCHANGE AND REORGANIZATION AGREEMENT, dated as of December 30,
2005 (the "AGREEMENT"), between REDOX TECHNOLOGY CORPORATION, a Delaware
corporation ("REDOX"); and MIDNIGHT AUTO HOLDINGS, INC., a Michigan corporation
("MIDNIGHT"), and THE BENEFICIAL STOCKHOLDERS OF MIDNIGHT IDENTIFIED IN SCHEDULE
A HERETO (the "MIDNIGHT SHAREHOLDERS").
INTRODUCTION
REDOX desires to acquire (i) all of the issued and outstanding shares
of common stock of Midnight which represents all of the issued and outstanding
shares of Midnight capital stock (the "MIDNIGHT CAPITAL STOCK") in exchange for
an aggregate of 374,144,130 shares of authorized, but theretofore unissued,
shares of common stock, par value $0.00005 per share, of REDOX (the "REDOX
COMMON STOCK") representing 80% of the issued and outstanding REDOX Common Stock
giving effect to such issuance and (ii) all of the issued and outstanding
warrants to purchase Midnight Capital Stock ("MIDNIGHT WARRANTS") in exchange
for warrants to purchase an aggregate of 350,000 shares of REDOX Common Stock
("REDOX WARRANTS"). The parties hereto acknowledge that REDOX does not presently
have sufficient authorized but unissued shares of REDOX Common Stock to issue
all of the 374,144,130 shares of REDOX Common Stock to the Midnight
Shareholders. At the present time REDOX has sufficient authorized but unissued
shares of REDOX Common Stock to issue in the aggregate 256,444,130 shares of
REDOX Common Stock to the Midnight Shareholders. REDOX will covenant to increase
its authorized but unissued shares of REDOX Common Stock promptly after the
Closing in order that the Midnight Shareholders will be issued in the aggregate
117,700,000 additional shares of REDOX Common Stock so that the Midnight
Shareholders will beneficially own an aggregate of 80% of the issued and
outstanding REDOX Common Stock after the Closing. The Midnight Shareholders
desire to exchange their beneficially owned shares of Midnight Capital Stock
solely for shares of REDOX Common Stock at a ratio of 1: 165,551 as more fully
set forth on SCHEDULE A hereto.
Prior to the date hereof, the respective boards of directors or
analogous governing body of each of REDOX and Midnight have, and the Midnight
Shareholders have, approved and adopted this Agreement and it is the intent of
the parties hereto that the transactions contemplated hereby be structured so as
to qualify as a tax-free exchange under Subchapter C of the Internal Revenue
Code of 1986, as amended (the "CODE"), and the provisions of this Agreement will
be interpreted in a manner consistent with this intent.
After (i) giving effect to the acquisition of the Midnight Capital
Stock in exchange for the shares of REDOX Common Stock, (ii) the issuance of
8,962,500 shares pursuant to Section 3.01(q) and (iii) the increase in the
number of authorized shares of REDOX Common Stock there shall be outstanding
467,700,000 shares of common stock of REDOX issued and outstanding as set forth
on the capitalization table on SCHEDULE B hereto.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
ARTICLE I
ACQUISITION AND EXCHANGE OF SHARES
SECTION 1.01 THE AGREEMENT. The parties hereto hereby agree that REDOX
at the Closing shall acquire all of the issued and outstanding shares of
Midnight Capital Stock solely in exchange for an aggregate of (i) 256,444,130
shares of authorized, but theretofore unissued, shares of REDOX Common Stock and
(ii) 117,700,000 shares of REDOX Common Stock when authorized. The parties
hereto agree that at the closing of the transactions contemplated by this
Agreement (the "CLOSING"): (i) Midnight will become a wholly-owned subsidiary of
REDOX subject to the conditions and provisions of Section 1.03 hereof; and (ii)
REDOX will issue 256,444,130 shares of REDOX Common Stock to the Midnight
Shareholders. As soon after Closing, as practicable, REDOX will amend its
certificate of incorporation and other related charter and authorization
documents with the relevant state authorities so as to cause the corporate name
thereof to be Midnight Auto Holdings, Inc. and to increase the number of
authorized shares of REDOX Common Stock to 1,000,000,000 shares.
SECTION 1.02 EXCHANGE OF SHARES.
(a) At the Closing, REDOX will cause to be issued and held for delivery
to the Midnight Shareholders or their designees, as applicable, stock
certificates representing an aggregate of 256,144,130 shares of REDOX Common
Stock, representing 73.27% of the issued and outstanding REDOX Common Stock
giving effect to such issuance and the issuance of 8,962,500 shares of REDOX
Common Stock issued pursuant to Section 3.01(q), in exchange for all of the
issued and outstanding shares of Midnight Capital Stock to the Midnight
Shareholders, as set forth on SCHEDULE B hereof. At the Closing, Midnight and
the Midnight Shareholders will cause to be delivered to REDOX, stock
certificates or other evidence, as applicable, representing Midnight Capital
Stock. The shares of REDOX Common Stock to be issued will be authorized, but
theretofore unissued shares of REDOX Common Stock, and will be issued to the
respective Midnight Shareholders at the Closing. REDOX hereby agrees to issue an
additional 117,700,000 shares of REDOX Common Stock, representing 6.73% of the
issued and outstanding REDOX Common Stock giving effect to such issuance. Such
additional shares shall be issued as soon as practicable after the Closing, upon
due authorization by the shareholders of REDOX to increase the number of
authorized shares of REDOX Common Stock, and the acceptance by the Secretary of
State of Delaware of an amendment to the certificate of incorporation of REDOX
to increase the number of authorized shares of REDOX Common Stock.
(b) At the Closing, REDOX will cause to be issued and held for delivery
to the holders of the Midnight Warrants warrant agreements representing the
REDOX Warrants in exchange for all of the Midnight Warrants, which will be
delivered to Midnight at the Closing. At the Closing, Midnight and the holders
of the Midnight Warrants will cause to be delivered to REDOX, warrant agreements
or other evidence, as applicable, representing the Midnight Warrants. The REDOX
Warrants to be issued will be authorized, but theretofore unissued REDOX
Warrants, and will be issued to the holders of the Midnight Warrants, as
applicable, as set forth on SCHEDULE C hereof.
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(c) All shares of REDOX Common Stock to be issued hereunder shall be
deemed "RESTRICTED SECURITIES" as defined in paragraph (a) of Rule 144 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the Midnight
Shareholders will represent in writing that they are acquiring said shares for
investment purposes only and without the intent to make a further distribution
of such shares. All shares of REDOX Common Stock to be issued under the terms of
this Agreement shall be issued pursuant to an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act and
the rules and regulations promulgated thereunder. Certificates representing the
shares of REDOX Common Stock to be issued hereunder shall bear a restrictive
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE OFFERED FOR SALE, SOLD, OR
OTHERWISE DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN
EXEMPTION FROM SUCH REGISTRATION PROVISIONS, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
SECTION 1.03 CLOSING. The Closing will take place at a date and time
(the "CLOSING DATE") and place to be mutually agreed upon by the parties hereto,
and will be subject to the provisions of Article IV of this Agreement. At the
Closing:
(a) Midnight will deliver to REDOX stock certificates, options,
warrants or other evidences representing all of the issued and outstanding
shares of Midnight Capital Stock and Midnight Warrants, duly endorsed, or
accompanied by a properly executed stock power, so as to make REDOX the holder
thereof, free and clear of all liens, claims and other encumbrances or an
affidavit of lost certificate or other evidence satisfactory to REDOX that such
securities and/or agreements were lost or destroyed;
(b) REDOX will deliver to, or at the direction of, the Midnight
Shareholders and the holders of the Midnight Warrants, as applicable, in
accordance with Section 1.02 hereof, stock certificates representing an
aggregate of 256,144,130 shares of REDOX Common Stock, and warrant certificates
representing the REDOX Warrants, as applicable, which certificates will bear a
standard restrictive legend in the form customarily used with restricted
securities and as set forth in Section 1.02(b) above and which shares shall
represent approximately 73.27% of the outstanding REDOX Common Stock giving
effect to the issuance thereof and the issuance of 8,962,500 shares of REDOX
Common Stock issued pursuant to Section 3.01(q);
(c) REDOX will deliver an Officer's Certificate as described in
Sections 4.02(a) and 4.02(b) hereof, dated as of the Closing Date, certifying
that all representations, warranties, covenants, and conditions set forth herein
by REDOX are true and correct as of, or have been fully performed and complied
with by, the Closing Date;
(d) Midnight will deliver an Officer's Certificate as described in
Sections 4.01(a) and 4.01(b) hereof, dated as of the Closing Date, certifying
that all representations, warranties,
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covenants and conditions set forth herein by Midnight are true and correct as
of, or have been fully performed and complied with by, the Closing Date;
SECTION 1.04 APPROVAL BY BOARD OF DIRECTORS. In anticipation of this
Agreement, REDOX has taken all necessary and requisite corporate and other
action, including without limitation, actions of the Board of Directors in order
to approve this Agreement and all transactions contemplated hereby and in
connection herewith.
SECTION 1.05 CONSUMMATION OF TRANSACTION. If at the Closing, no
condition exists which would permit any of the parties to terminate this
Agreement, or a condition then exists and the party entitled to terminate
because of that condition elects not to do so, then the transactions herein
contemplated shall be consummated upon such date, and then and thereupon, REDOX
will file any additional necessary documents that may be required by the State
of Delaware, the United States of America, or otherwise.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 REPRESENTATIONS AND WARRANTIES OF REDOX. REDOX hereby
represents and warrants to, and agrees with, Midnight and the Midnight
Shareholders that the statements set forth in this Section 2.01 are true,
correct, and complete as of the date of this Agreement, except as otherwise set
forth in the corresponding numbered section of the disclosure letter, of even
date herewith, from REDOX to Midnight and the Midnight Shareholders (the "REDOX
DISCLOSURE LETTER"):
(a) ORGANIZATION AND QUALIFICATION. Other than as set forth in REDOX
Disclosure Letter, REDOX has no subsidiaries or affiliated corporation or owns
any interest in any other enterprise (whether or not such enterprise is a
corporation). REDOX is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, with all requisite power
and authority, and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and declarations and filings
with, all federal, state, local, and other governmental authorities and all
courts and other tribunals, to own, lease, license, and use its properties and
assets and to carry on the businesses in which it is now engaged and the
businesses in which it contemplates engaging. Other than as set forth in the
REDOX Disclosure Letter, REDOX is duly qualified to transact the businesses in
which it is engaged and is in good standing as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets or the conduct of its businesses makes such qualification necessary.
(b) CAPITALIZATION. The authorized capital stock of REDOX consists of
350,000,000 shares of REDOX Common Stock, par value $0.00005, of which
84,593,370 shares are outstanding, and 10,000,000 shares of convertible
preferred stock, par value $0.001 per share, none of which are outstanding. Each
of such outstanding shares of REDOX Common Stock is validly authorized, validly
issued, fully paid, and nonassessable, has not been issued and is not owned or
held in violation of any preemptive or similar right of stockholders. There is
no commitment, plan, or arrangement to issue, and no outstanding option,
warrant, or other right calling for the issuance
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of, any share of capital stock of REDOX or any security or other instrument
convertible into, exercisable for, or exchangeable for capital stock of REDOX,
other than as set forth in the REDOX Disclosure Letter. There is outstanding no
security or other instrument convertible into, or exchangeable or exercisable
for, capital stock of REDOX, other than as set forth in the REDOX Disclosure
Letter.
(c) FINANCIAL CONDITION. Other than as set forth on the REDOX
Disclosure Letter, REDOX has filed with the United States Securities and
Exchange (the "SEC") true and correct copies of the following: audited balance
sheets of REDOX as of December 31, 2002 and 2003; unaudited balance sheets of
REDOX as of March 31, 2003 and 2004, June 30, 2003 and 2004, and September 30,
2003 and 2004; audited statements of income, statements of stockholders' equity,
and statements of cash flows of REDOX for the years ended December 31, 2002 and
2003; and the unaudited statements of income, statements of stockholders'
equity, and statements of cash flows of REDOX for the three months ended March
31, 2003 and 2004 the six months ended June 30, 2003 and 2004 and the nine
months ended September 30, 2003 and 2004. Each such balance sheet shall present
fairly the financial condition, assets, liabilities, and stockholders' equity of
REDOX as of its respective date; each such statement of income and statement of
stockholders' equity shall present fairly the results of operations of REDOX for
the period indicated; and each such statement of cash flows shall present fairly
the information purported to be shown therein. The financial statements referred
to in this Section 2.01(c) will have been prepared in accordance with generally
accepted accounting principles in the United States consistently applied
throughout the periods involved and shall be in accordance with the books and
records of REDOX. The financial statements referred to in this Section 2.01(c)
contain all certifications and statements required the SEC's Order, dated June
27, 2002, pursuant to Section 21(a)(1) of the Exchange Act (File No. 4-460),
Rule 13a-14 or 15d-14 under the Exchange Act, or 18 U.S.C. Section 1350
(Sections 302 and 906 of the Sarbanes-Oxley Act of 2002) with respect to the
report relating thereto. Since December 31, 2003, except as set forth in the
REDOX Disclosure Letter:
(i) There has at no time been a material adverse
change in the financial condition, results of operations,
businesses, properties, assets, liabilities, or future
prospects of REDOX.
(ii) REDOX has not authorized, declared, paid, or
effected any dividend or liquidating or other distribution in
respect of its capital stock or any direct or indirect
redemption, purchase, or other acquisition of any stock of
REDOX.
(iii) The operations and businesses of REDOX have
been conducted in all respects only in the ordinary course,
except as described in the filings made and to be made by
REDOX with the SEC.
There is no fact known to REDOX which materially adversely affects or in the
future (as far as REDOX can reasonably foresee) may materially adversely affect
the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of REDOX; provided, however, that REDOX
expresses no opinion as to political or economic matters of general
applicability. Prior to September 30, 2004, REDOX has made known, or caused to
be made known, to the accountants or auditors who have prepared, reviewed, or
audited the aforementioned
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consolidated financial statements all material facts and circumstances which
could affect the preparation, presentation, accuracy, or completeness thereof.
(d) TAX AND OTHER LIABILITIES. REDOX does not have any material
liability of any nature, accrued or contingent, including, without limitation,
liabilities for federal, state, local, or foreign taxes and penalties, interest,
and additions to tax ("TAXES"), and liabilities to customers or suppliers, other
than the following:
(i) Liabilities as set forth on REDOX Disclosure
Letter; and
(ii) Other liabilities, other than as disclosed on
the REDOX Disclosure Letter, incurred prior to Closing in the
ordinary course of business (which shall not include
liabilities to customers on account of defective products or
services) which are not inconsistent with the representations
and warranties of REDOX or any other provision of this
Agreement.
The execution, delivery, and performance of this Agreement by REDOX will not
cause any Taxes to be payable (other than those that may possibly be payable by
the Midnight Shareholders as a result of the contribution of their shares of
Midnight Capital Stock to REDOX) or cause any lien, charge, or encumbrance to
secure any Taxes to be created either immediately or upon the nonpayment of any
Taxes other than on the properties or assets of the Midnight Shareholders. The
Internal Revenue Service has audited and settled or the statute of limitations
has run upon all federal income tax returns of REDOX for all taxable years up to
and including the taxable year ended December 31, 1997. REDOX has filed all
federal, state, local, and foreign tax returns required to be filed by it or has
no taxes due thereunder for reports not filed; has delivered to the Midnight
Shareholders a true and correct copy of each such return which was filed in the
past six years; has paid all Taxes, assessments, and other governmental charges
payable or remittable by it or levied upon it or its properties, assets, income,
or franchises which are due and payable; and has delivered to the Midnight
Shareholders a true and correct copy of any report as to adjustments received by
it from any taxing authority during the past six years and a statement as to any
litigation, governmental or other proceeding (formal or informal), or
investigation pending, threatened, or in prospect with respect to any such
report or the subject matter of such report.
(e) LITIGATION AND CLAIMS. Except as described in the REDOX Disclosure
Letter, there is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending or, to the best of
REDOX's knowledge, threatened, or in prospect (or any basis therefor known to
REDOX) with respect to REDOX or any of its businesses, properties, or assets.
REDOX is not affected by any present or threatened strike or other labor
disturbance nor to the knowledge of REDOX, is any union attempting to represent
any employee of REDOX as collective bargaining agent. REDOX is not in violation
of, or in default with respect to, any law, rule, regulation, order, judgment,
or decree which violation or default would have a material adverse effect on
REDOX; nor is REDOX required to take any action in order to avoid such violation
or default.
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(f) PROPERTIES.
(i) REDOX owns no real property. REDOX has good title to all
personal properties and assets material to REDOX and used in its businesses or
owned by it (except real and other properties and assets material to REDOX as
are held pursuant to leases or licenses described in the REDOX Disclosure
Letter), free and clear of all liens, mortgages, security interests, pledges,
charges, and encumbrances (except such as are listed in the REDOX Disclosure
Letter).
(ii) Set forth in the REDOX Disclosure Letter is a true and
complete list of all tangible properties and assets owned by REDOX or leased or
licensed by REDOX from or to a third party (including inventory but not
including Intangibles (as hereinafter defined)), and with respect to such
properties and assets leased or licensed by REDOX from or to a third party, a
description of such lease or license. All such properties and assets (including
Intangibles) owned by REDOX are set forth on the REDOX Disclosure Letter (except
for acquisitions which are approved in writing by Midnight). All tangible
properties and assets owned by REDOX or leased or licensed by REDOX from or to a
third party are in good and usable condition (reasonable wear and tear which is
not such as to affect adversely the operation of the businesses of REDOX
excepted).
(iii) To the best of REDOX's knowledge, no real property
leased or licensed by REDOX from or to a third party lies in an area which is,
or will be, subject to zoning, use, or building code restrictions which would
prohibit, and, to the best of REDOX's knowledge, no state of facts relating to
the actions or inaction of another person or entity or his or its ownership,
leasing, or licensing of any real or personal property exists or will exist
which would prevent, the continued effective ownership, leasing, or licensing of
such real property in the businesses in which REDOX is now engaged or the
businesses in which it contemplates engaging.
(iv) The properties and assets (including Intangibles (as
hereinafter defined)) owned by REDOX (other than those leased or licensed by
REDOX to a third party) or leased or licensed by REDOX from a third party
constitute all such properties and assets which are necessary to the businesses
of REDOX as presently conducted.
(v) REDOX has not caused or permitted its businesses
properties, or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose of, transfer, produce, or process any Hazardous
Substance (as such term is defined in this Section 2.01(f)(v)) except in
compliance with all applicable laws, rules, regulations, orders, judgments, and
decrees, and has not caused or permitted the Release (as such term is defined in
this Section 2.01(f)(v)) of any Hazardous Substance on or off the site of any
property of REDOX. The term "HAZARDOUS SUBSTANCE" shall mean any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substance, as defined
by 42 U.S.C. ss.9601(14), any pollutant or contaminant, as defined by 42 U.S.C.
ss.9601(33), and all toxic substances, hazardous materials, or other chemical
substances regulated by any other law, rule, or regulation. The term "RELEASE"
shall have the meaning set forth in 42 U.S.C. ss.9601(22).
(g) CONTRACTS AND OTHER INSTRUMENTS. The REDOX Disclosure Letter
contains a true and correct statement of the information required to be
contained therein regarding material
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contracts, agreements, instruments, leases, licenses, arrangements, or
understandings with respect to REDOX. REDOX has furnished to the Midnight
Shareholders (i) the certificate of incorporation (or other charter document)
and by-laws of REDOX and all amendments thereto, as presently in effect, and
(ii) the following: (A) true and correct copies of all material contracts,
agreements, and instruments referred to in the REDOX Disclosure Letter; (B) true
and correct copies of all material leases and licenses referred to in the REDOX
Disclosure Letter hereto; and (C) true and correct written descriptions of all
material supply, distribution, agency, financing, or other arrangements or
understandings referred to in the REDOX Disclosure Letter. To the best of
REDOX's knowledge, neither REDOX nor (to the knowledge of REDOX) any other party
to any such material contract, agreement, instrument, lease, or license is now
or expects in the future to be in violation or breach of, or in default with
respect to complying with, any term thereof, and each such material contract,
agreement, instrument, lease, or license is in full force and is (to the best of
REDOX's knowledge in the case of third parties) the legal, valid, and binding
obligation of the parties thereto and (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors' rights
generally) is enforceable as to them in accordance with its respective terms.
Each such material supply, distribution, agency, financing, or other arrangement
or understanding is a valid and continuing arrangement or understanding; neither
REDOX nor any other party to any such arrangement or understanding has given
notice of termination or taken any action inconsistent with the continuance of
such arrangement or understanding; and the execution, delivery, and performance
of this Agreement will not prejudice any such arrangement or understanding in
any way. REDOX enjoys peaceful and undisturbed possession under all material
leases and licenses under which it is operating. REDOX is not party to, or bound
by, any contract, agreement, instrument, lease, license, arrangement, or
understanding, or subject to any charter or other restriction, which has had or
(to the knowledge of REDOX) may in the future have a material adverse effect on
the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of REDOX. REDOX has not engaged within the last
five years in, is not engaging in, and does not intend to engage in any
transaction with, and has not had within the last five years, does not now have,
and does not intend to have any material contract, agreement, instrument, lease,
license, arrangement, or understanding with, any stockholder of REDOX, any
director, officer, or employee of REDOX (except for employment agreements listed
in the REDOX Disclosure Letter and employment and compensation arrangements
described in the REDOX Disclosure Letter), any relative or affiliate of any
stockholder of REDOX or of any such director, officer, or employee, or any other
corporation or enterprise in which any stockholder of REDOX, any such director,
officer, or employee, or any such relative or affiliate then had or now has a 5%
or greater equity or voting or other substantial interest, other than those
listed and so specified in the REDOX Disclosure Letter. The minute book records
of REDOX and all proceedings of the stockholders and the Board of Directors and
committees thereof of REDOX since their respective incorporations made available
to counsel to Midnight and the Midnight Shareholders are the original minute
book records of REDOX or exact copies thereof. REDOX is not in violation or
breach of, or in default with respect to, any term of its certificate of
incorporation (or other charter document) or by-laws.
(h) EMPLOYEES.
(i) REDOX does not have, or contribute to, any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of the
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Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or has
any obligation to or customary arrangement with employees for bonuses, incentive
compensation, vacations, severance pay, sick pay, sick leave, insurance, service
award, relocation, disability, tuition refund, or other benefits, whether oral
or written, except as set forth in the REDOX Disclosure Letter. REDOX has
furnished to Midnight and the Midnight Shareholders: (A) true and correct copies
of all documents evidencing plans, obligations, or arrangements referred to in
the REDOX Disclosure Letter (or true and correct written summaries, so
initialed, of such plans, obligations, or arrangements to the extent not
evidenced by documents) and true and correct copies, so initialed, of all
documents evidencing trusts, summary plan descriptions, and any other summaries
or descriptions relating to any such plans; (B) the two most recent annual
reports (Form 5500's), if any, including all schedules thereto and the most
recent annual and periodic accounting of related plan assets with respect to
each Employee Benefit Plan; (C) the two most recent actuarial valuations with
respect to each Pension Plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA; and (D) the most recent determination letter issued by the
Internal Revenue Service with respect to each Pension Plan.
(ii) If any Employee Benefit Plan of REDOX were to be
terminated on the day prior to Closing Date, (A) no liability under Title IV of
ERISA would be incurred by REDOX or Midnight and (B) all Accrued Benefits (as
defined in this Section 2.01(h)(ii)) to such day prior to the Closing Date
(whether or not vested) would be fully funded in accordance with the assumptions
contained in the regulations of the Pension Benefit Guaranty Corporation
governing the funding of terminated defined benefit plans. For purposes hereof,
"ACCRUED BENEFITS" shall include the value of disability, pre-retirement, death
benefits, and all supplements, subsidized, ancillary, and optional forms of
benefits. All Accrued Liabilities (for contributions or otherwise) (as defined
in this Section 2.01(h)(ii)) of REDOX as of the Closing Date to each Employee
Benefit Plan and with respect to each obligation to, or customary arrangement
with, employees for bonuses, incentive compensation, vacations, severance pay,
sick pay, sick leave, insurance, service award, relocation, disability, tuition
refund, or other benefits, whether oral or written, have been paid or accrued
for all periods ending prior to the Closing Date and no payment to any Employee
Benefit Plan or with respect to any such obligation or arrangement since
September 30, 2004, has been disproportionately large compared to prior
payments. For purposes hereof, "ACCRUED LIABILITIES" shall include a pro rata
contribution to each Employee Benefit Plan or with respect to each such
obligation or arrangement for that portion of a plan year or other applicable
period which commences prior to, and ends after, the Closing Date, and Accrued
Liabilities for any portion of a plan year or other applicable period shall be
determined by multiplying the liability for the entire such year or period by a
fraction, the numerator of which is the number of days preceding the Closing
Date in such year or period and the denominator of which is the number of days
in such year or period, as the case may be.
(iii) There has been no violation of the reporting and
disclosure requirements imposed either under ERISA or the Code for which a
penalty has been or may be imposed with respect to any Employee Benefit Plan of
REDOX. There has been no breach of fiduciary duty or responsibility with respect
to any Employee Benefit Plan of REDOX. No Employee Benefit Plan of REDOX or
related trust has any liability of any nature, accrued or contingent, including
without limitation liabilities for Taxes, other than for routine payments to be
made in due course to participants and beneficiaries, except as set forth in the
REDOX Disclosure Letter. REDOX does
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not have any formal plan or commitment, whether or not legally binding, to
create any additional or modify any existing Employee Benefit Plan or benefit
obligation or arrangement described in Section 2.01(h)(i)). Each Employee
Benefit Plan of REDOX which is a group health plan within the meaning of Section
5000(b)(1) of the Code is and has been maintained in full compliance with the
applicable requirements of Section 4980B of the Code. Other than the health care
continuation requirements of Section 4980B of the Code, REDOX does not have any
obligation to provide post-retirement medical benefits or life insurance
coverage or any deferred compensation benefits to any present or former
employees. There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or (to
the best of REDOX's knowledge) in prospect (or any basis therefor known to
REDOX) with respect to any Employee Benefit Plan of REDOX or related trust or
with respect to any fiduciary, administrator, or sponsor (in its capacity as
such) of any Employee Benefit Plan. No Employee Benefit Plan of REDOX or related
trust and no such obligation or arrangement is in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, which violation or
default would have a material adverse effect thereon or decree nor is REDOX, any
Employee Benefit Plan of REDOX, or any related trust required to take any action
in order to avoid any such violation or default. No event has occurred, or is
(to the best of REDOX's knowledge) threatened or about to occur, which would
constitute a prohibited transaction under Section 406 of ERISA.
(iv) Each Pension Plan maintained for the employees of REDOX
has been qualified, from its inception, under Section 401(a) of the Code and any
related trust has been an exempt trust for such period under Section 501 of the
Code. Each Pension Plan has been operated in accordance with its terms. No
Pension Plan which is subject to Title IV of ERISA has an accumulated or waived
funding deficiency within the meaning of Section 412 of the Code. No
investigation or review by the Internal Revenue Service is currently pending or
(to the knowledge of REDOX) is contemplated in which the Internal Revenue
Service has asserted or may assert that any Pension Plan is not qualified under
Section 401(a) of the Code or that any related trust is not exempt under Section
501 of the Code. Neither REDOX, nor any organization to which REDOX is a
successor or parent corporation, within the meaning of Section 4069(b) of ERISA,
has divested itself of any entity maintaining or with an obligation to
contribute to any Pension Plan which had an "AMOUNT OF UNFUNDED BENEFIT
LIABILITIES," as defined in Section 4001(a)(18) of ERISA, at the time of such
divestiture. No assessment of any federal taxes with respect to any Employee
Benefit Plan of REDOX has been made or (to the knowledge of REDOX) is
contemplated against REDOX, or any related trust of any Pension Plan of REDOX,
and nothing has occurred which would result in the assessment of unrelated
business taxable income under the Code with respect to any Employee Benefit Plan
of REDOX. Form 5500's have been timely filed with respect to all Pension Plans
of REDOX. No event has occurred or (to the knowledge of REDOX) is threatened or
about to occur which would constitute a reportable event within the meaning of
Section 4043(b) of ERISA. No notice of termination has been filed by the plan
administrator pursuant to Section 4041 of ERISA or issued by the Pension Benefit
Guaranty Corporation pursuant to Section 4042 of ERISA with respect to any
Pension Plan of REDOX.
(v) REDOX does not currently contribute to, and since
September 16, 1980 has not effectuated either a complete or partial withdrawal
from, any multiemployer Pension Plan within the meaning of Section 3(37) of
ERISA.
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(vi) The REDOX Disclosure Letter contains a true and correct
statement of the names, relationship with REDOX, present rates of compensation
(whether in the form of salary, bonuses, commissions, or other supplemental
compensation now or hereafter payable), and aggregate compensation for the
fiscal year ended December 31, 2004 of (A) each director, officer, or other
employee of REDOX whose aggregate compensation for the fiscal year ended
December 31, 2004 exceeded US$25,000 or whose aggregate compensation presently
exceeds the rate of US$25,000 per annum and (B) all sales agents, dealers, or
distributors of REDOX. Since December 31, 2004, REDOX has not changed the rate
of compensation of any of its directors, officers, employees, agents, dealers,
or distributors, nor has any Employee Benefit Plan or program of REDOX been
instituted or amended to increase benefits thereunder. There is no contract,
agreement, plan, arrangement, or understanding covering any person that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible by REDOX by reason of Section 280G of the Code.
(vii) REDOX has not, since at least December 31, 2004,
extended or maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for any director or
executive officer (or equivalent thereof) thereof.
(i) PATENTS, TRADEMARKS, ET CETERA. REDOX does not own or have pending,
and is not licensed or otherwise permitted to use, any material patent, patent
application, trademark, trademark application, service mark, copyright,
copyright application, franchise, trade secret, computer program (in object or
source code or otherwise), or other intangible property or asset (collectively,
"INTANGIBLES"), other than as described in the REDOX Disclosure Letter. Each
Intangible is validly issued and is currently in force and uncontested in all
jurisdictions in which it is used or in which such use is contemplated. The
REDOX Disclosure Letter contains a true and correct listing of: (i) all
Intangibles which are owned (either in whole or in part), used by, or licensed
to REDOX or which otherwise relate to the businesses of REDOX, and a description
of each such Intangible which identifies its owner, registrant, or applicant;
(ii) all contracts, agreements, instruments, leases, and licenses and
identification of all parties thereto under which REDOX owns or uses any
Intangible (whether or not under license from third parties), together with the
identification of the owner, registrant, or applicant of each such Intangible;
(iii) all contracts, agreements, instruments, leases, and licenses and
identification of all parties thereto under which REDOX grants the right to use
any Intangible; (iv) all validity, infringement, right-to-use, or other opinions
of counsel (whether in-house or outside) which concern the validity,
infringement, or enforceability of any Intangible owned or controlled by a party
other than REDOX which relates to the businesses, properties, or assets of
REDOX. Except as specified in the REDOX Disclosure Letter, to the knowledge of
REDOX: (v) REDOX is the sole and exclusive owner or licensee of, and (other than
those exclusively licensed by REDOX to a third party) has the right to use, all
Intangibles; (vi) no Intangible is subject to any order, judgment, decree,
contract, agreement, instrument, lease, or license restricting the scope of the
use thereof; (vii) during the last five years, REDOX has not been charged with,
and has not charged others with, unfair competition, infringement of any
Intangible, or wrongful use of confidential information, trade secrets, or
secret processes; and (viii) REDOX is not using any patentable invention,
confidential information, trade secret, or secret process of others. There is no
right under any Intangible necessary to the businesses of REDOX as presently
conducted or as it contemplates conducting, except such as are so designated in
the REDOX Disclosure Letter. Except as described in the
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REDOX Disclosure Letter, REDOX has not infringed, is not infringing, and has not
received notice of infringement in respect of the Intangibles or asserted
Intangibles of others, nor has REDOX been advised by counsel or others that it
is infringing or may infringe the Intangibles or asserted Intangibles of others
if any currently contemplated business activity is effectuated. To the knowledge
of REDOX, there is no infringement by others of Intangibles of REDOX. As far as
REDOX can reasonably foresee, there is no Intangible or asserted Intangible of
others that may materially adversely affect the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
REDOX. All material contracts, agreements, instruments, leases, and licenses
pertaining to Intangibles to which REDOX is a party, or to which any of its
businesses, properties, or assets are subject, are in compliance in all material
respects with all laws, rules, regulations, orders, judgments, and decrees
binding on REDOX or to which any of its businesses, properties, or assets are
subject. REDOX did not register any trademark, tradename or service mark,
design, or name used by REDOX to identify its products, businesses, or services.
Neither any stockholder of REDOX, any director, officer, or employee of REDOX,
any relative or affiliate of any stockholder of REDOX, any such director,
officer, or employee, nor any other corporation or enterprise in which any
stockholder of REDOX, any such director, officer, or employee, or any such
relative or affiliate had or now has a 5% or greater equity or voting or other
substantial interest, possesses any Intangible which relates to the businesses
of REDOX.
(j) QUESTIONABLE PAYMENTS. Neither REDOX, nor any director, officer,
agent, employee, or other person associated with, or acting on behalf of, REDOX,
nor any stockholder of REDOX has, directly or indirectly: used any corporate
funds for unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment, kickback, or other unlawful payment.
(k) AUTHORITY. REDOX has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of
REDOX have been duly taken to authorize the execution, delivery, and performance
of this Agreement thereby. This Agreement has been duly authorized, executed,
and delivered by REDOX, constitutes the legal, valid, and binding obligation of
REDOX, and is enforceable as to REDOX in accordance with its terms. Except as
otherwise set forth in this Agreement, no consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by REDOX for the execution, delivery, or performance
of this Agreement by REDOX. No consent of any party to any material contract,
agreement, instrument, lease, license, arrangement, or understanding to which
REDOX is a party, or to which it or any of its businesses, properties, or assets
are subject, is required for the execution, delivery, or performance of this
Agreement (except such consents referred to in the REDOX Disclosure Letter); and
the execution, delivery, and performance of this Agreement will not (if the
consents referred to in the REDOX Disclosure Letter are obtained prior to the
Closing) violate, result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any party to terminate
or call a default under, entitle any party to receive rights or privileges that
such party was not entitled to receive before this Agreement was executed under,
or create any obligation on the part of REDOX to which it was not subject
immediately
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before this Agreement was executed under, any term of any such material
contract, agreement, instrument, lease, license, arrangement, or understanding,
or violate or result in a breach of any term of the certificate of incorporation
(or other charter document) or by-laws of REDOX, or (if the provisions of this
Agreement are satisfied) violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on REDOX or to which
any of its businesses, properties, or assets are subject, which violation or
breach would have a material adverse effect on REDOX. Neither REDOX, nor any of
its officers, directors, employees, or agents has employed any broker or finder
or incurred any liability for any fee, commission, or other compensation payable
by any person on account of alleged employment as a broker or finder, or alleged
performance of services as a broker or finder, in connection with or as a result
of this Agreement or the transactions contemplated hereby and in connection
herewith.
(l) STATUS OF SHARES OF REDOX COMMON STOCK TO BE ISSUED. Assuming
without investigation that the shares of Midnight Capital Stock outstanding on
the Closing Date are validly authorized, validly issued, fully paid, and
nonassessable, the shares of REDOX Common Stock to be issued pursuant to Section
1.02(a) hereof, and, in any case, the shares of REDOX Common Stock issuable
pursuant to Section 3.01(q) hereof, are validly authorized and, when the such
shares of REDOX Common Stock have been duly delivered pursuant to the terms of
this Agreement, such shares of REDOX Common Stock will be validly issued, fully
paid, and nonassessable and will not have been issued, owned or held in
violation of any preemptive or similar right of stockholder.
(m) INSURANCE. All policies of fire and other insurance against
casualty and other losses and public liability insurance carried by REDOX are
described in the REDOX Disclosure Letter (including the risks covered and limits
of such policies) and are in full force and effect. All premiums in respect of
such policies for which premium notices have been received have been paid in
full as the same become due and payable. REDOX has not failed to give any notice
or present any claim under any insurance policy in due and timely fashion. There
are no actual claims or claims threatened in writing against REDOX which could
come within the scope of such coverage nor are any such policies currently
threatened with cancellation. There are no outstanding requirements or
recommendations by any insurance company that issued a policy with respect to
any of the respective assets, the businesses, or operations of REDOX or by any
Board of Fire Underwriters or other body exercising similar functions or by any
governmental authority requiring or recommending any repairs or other work to be
done on, or with respect to, any of the assets of REDOX or requiring or
recommending any equipment or facilities to be installed on any premises from
which the businesses of REDOX is conducted or in connection with any of the
respective assets thereof. REDOX does not have any knowledge of any material
proposed increase in applicable insurance rates or of any conditions or
circumstances applicable to the businesses thereof that might result in such
increases. No such policy is terminable by virtue of the transactions
contemplated by this Agreement.
(n) TRADING MATTERS. At the date hereof and at the Closing Date:
(i) the REDOX Common Stock is traded and quoted in the over-the-counter
market known as the "pink sheet market" (the "OTC");
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(ii) REDOX has not, and shall not have taken any action that would
preclude, or otherwise jeopardize, the inclusion of the REDOX Common Stock for
quotation on the OTC.
(o) REORGANIZATION.
(i) REDOX has not taken and has not agreed to take any action (other
than actions contemplated by this Agreement) that could reasonably be expected
to prevent the transactions contemplated by this Agreement from constituting a
"reorganization" under section 368(b) of the Code or as an acquisition of in
excess of 80% of the stock of a corporation in exchange for property under
Section 351 of the Code. REDOX is not aware of any agreement, plan or other
circumstance that could reasonably be expected to prevent the transactions
contemplated by this Agreement from so qualifying.
(ii) REDOX has no plan or intention to reacquire, and, to REDOX's
knowledge, no person related to REDOX within the meaning of Treasury Regulations
Section 1.368-1 has a plan or intention to acquire, any of the REDOX Common
Stock pursuant to Section 1.02(a) hereof.
(p) COMPLETENESS OF DISCLOSURE. No representation or warranty by REDOX
in this Agreement contains or, and at the Closing Date will contain, an untrue
statement of material fact or omits or, at the Closing Date, will omit to state
a material fact required to be stated therein or necessary to make the
statements made not misleading.
(q) PERIODIC REPORTING.
(i) The REDOX Common Stock has not been registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"); provided, however that REDOX is subject to the periodic reporting
requirements of Section 13 of the Exchange Act. REDOX has heretofore provided to
Midnight and the Midnight Shareholders true, complete, and correct copies of all
forms, reports, schedules, statements, and other documents required to be filed
by it under the Exchange Act from January 1, 2002 through and including
September 30, 2004 as such documents have been amended since the time of the
filing thereof (the "REDOX SEC DOCUMENTS"). The REDOX SEC Documents, including,
without limitation, any financial statements and schedules included therein, at
the time filed or, if subsequently amended, as so amended, (i) did not contain
any untrue statement of a material fact required to be stated therein or
necessary in order to make the statements therein not misleading and (ii)
complied in all respects with the applicable requirements of the Exchange Act
and the applicable rules and regulations thereunder. The financial statements
included in the REDOX SEC Documents complied when filed as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles in the United States,
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited financial
statements, as permitted by the rules and regulations of the Commission) and
fairly present, subject in the case of the unaudited financial statements, to
customary year end audit adjustments, the financial position of REDOX as at the
dates thereof and the results of its operations and cash flows.
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(ii) REDOX has delivered to Midnight copies of, all written
descriptions of, and all policies, manuals and other documents promulgating,
such disclosure controls and procedures. Except as set forth on the REDOX
Disclosure Letter, to REDOX's knowledge, each director and executive officer
thereof has filed with the SEC on a timely basis all statements required by
Section 16(a) of the Exchange Act and the rules and regulations thereunder since
January 1, 2002. As used in this Section 2.01(q), the term "file" shall be
broadly construed to include any manner in which a document or information is
furnished, supplied or otherwise made available to the SEC.
(iii) The Chief Executive Officer and the Chief Financial
Officer of REDOX have signed, and the Company has furnished to the SEC, all
certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of
2002 for the REDOX SEC Documents; such certifications contain no qualifications
or exceptions to the matters certified therein and have not been modified or
withdrawn; and neither REDOX nor any of its officers has received notice from
any governmental entity questioning or challenging the accuracy, completeness,
form or manner of filing or submission of such certifications.
(iv) REDOX has heretofore provided Midnight complete and
correct copies of all certifications filed with the SEC pursuant to Sections 302
and 906 of Sarbanes-Oxley Act of 2002 and hereby reaffirms, represents and
warrants to Midnight the matters and statements made in such certificates.
(r) COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS. REDOX is in
compliance with, and is not in violation of, applicable federal, state, local or
foreign statutes, laws and regulations (including without limitation, any
applicable building, zoning or other law, ordinance or regulation) affecting its
properties or the operation of its business, other than its failure to file tax
returns or SEC filings since September 30, 2004. REDOX is not subject to any
order, decree, judgment or other sanction of any court, administrative agency or
other tribunal.
(s) LEGAL PROCEEDINGS AND HISTORY. REDOX hereby represents that,
unless otherwise disclosed herein or in the REDOX Disclosure Letter, no officer,
director or affiliate of REDOX, has been, within the five years ending on the
Closing Date, a party to any bankruptcy petition against such person or against
any business of which such person was affiliated; convicted in a criminal
proceeding or subject to a pending criminal proceeding (excluding traffic
violations and other minor offenses); subject to any order, judgment or decree,
not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting their involvement in any type of business, securities or
banking activities; or found by a court of competent jurisdiction in a civil
action, by the SEC or the Commodity Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
SECTION 2.02 REPRESENTATIONS AND WARRANTIES OF MIDNIGHT. Midnight
hereby represents and warrants to, and agrees with, REDOX that the statements
set forth in this Section 2.02 are true, correct, and complete as of the date of
this Agreement except as otherwise set forth in the corresponding numbered
section of the letter, dated as of even date herewith, from Midnight to REDOX
(the "MIDNIGHT DISCLOSURE LETTER"):
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(a) ORGANIZATION AND QUALIFICATION. Midnight owns two
subsidiary corporations, Midnight Auto Franchise Corp and All Night Auto(R)
Stores, Inc. (collectively, the "MIDNIGHT SUBSIDIARIES"). The Midnight
Disclosure Letter sets forth any interest Midnight owns in any other enterprise
(whether or not such enterprise is a corporation). The Midnight Disclosure
Letter correctly sets forth as to Midnight and each Midnight Subsidiary its
respective place of incorporation, principal place of business, jurisdictions in
which it is qualified to do business, and the businesses which it presently
conducts and which it contemplates conducting. Midnight and each Midnight
Subsidiary is a corporation duly organized, validly existing, and in good
standing under the laws of its respective jurisdiction of incorporation, with
all requisite power and authority, and all necessary consents, authorizations,
approvals, orders, licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and other governmental
authorities and all courts and other tribunals, to own, lease, license, and use
its respective properties and assets and to carry on the respective businesses
in which it is now engaged and the businesses in which it contemplates engaging.
Midnight and each Midnight Subsidiary is duly qualified to transact the
businesses in which it is engaged and is in good standing as a foreign
corporation in every jurisdiction in which its respective ownership, leasing,
licensing, or use of property or assets or the conduct of its respective
businesses makes such qualification necessary.
(b) CAPITALIZATION. The authorized capital stock of Midnight
consists of 60,000 shares of common stock, no par value (the "MIDNIGHT COMMON
STOCK"), of which 2,260 shares are issued and outstanding. Each share of capital
stock of each Midnight Subsidiary ("MIDNIGHT SUBSIDIARY CAPITAL STOCK") is owned
beneficially and of record by Midnight. Each of the outstanding shares of
Midnight Common Stock and Midnight Subsidiary Capital Stock is validly
authorized, validly issued, fully paid, and nonassessable, has not been issued
and is not owned or held in violation of any preemptive right of stockholders
and by the owners set forth in the Midnight Disclosure Letter, in each case free
and clear of all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements, and voting trusts. There is no commitment, plan, or
arrangement to issue, and no outstanding option, warrant, or other right calling
for the issuance of, any share of capital stock of Midnight ("MIDNIGHT CAPITAL
STOCK") or Midnight Subsidiary Capital Stock or any security or other instrument
convertible into, exercisable for, or exchangeable for Midnight Capital Stock or
Midnight Subsidiary Capital Stock, except as set forth in the Midnight
Disclosure Letter. There is outstanding no security or other instrument
convertible into or exercisable or exchangeable for Midnight Capital Stock or
Midnight Capital Stock.
(c) FINANCIAL CONDITION. Midnight has made available to REDOX
true and correct copies of the following: audited, consolidated financial
statements of Midnight as of December 31, 2004, and combined, audited financial
statements as of December 31, 2003; and statements of stockholders' equity, and
statements of cash flows of Midnight for the years ended 2004 and 2003. Each
such balance sheet presents fairly the consolidated financial condition, assets,
liabilities, and stockholders' equity of Midnight as of its date; each such
statement of income and consolidated statement of stockholders' equity presents
fairly the consolidated results of operations of Midnight for the period
indicated; and each such statement of cash flows presents fairly the information
purported to be shown therein. The financial statements referred to in this
Section 2.02(c) have been prepared in accordance with generally accepted
accounting principles in the United States consistently applied throughout the
periods involved and are in accordance with the books and records of Midnight
and the Midnight Subsidiaries. Since December 31, 2004, other than as set forth
on the Midnight Disclosure Schedule:
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(i) There has at no time been a material adverse
change in the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of Midnight or any
Midnight Subsidiary.
(ii) Midnight has not authorized, declared, paid, or
effected any dividend or liquidating or other distribution in respect
of its capital stock or any direct or indirect redemption, purchase, or
other acquisition of any stock of Midnight or any Midnight Subsidiary.
(iii) The operations and businesses of Midnight and
the Midnight Subsidiaries have been conducted in all respects only in
the ordinary course, except for the transactions contemplated hereby
and in connection herewith.
(iv) There has been no accepted purchase order or
quotation, arrangement, or understanding for future sale of the
products or services of Midnight or any Midnight Subsidiary that
Midnight expects will not be profitable.
(v) Neither Midnight nor any Midnight Subsidiary has
suffered an extraordinary loss (whether or not covered by insurance) or
waived any right of substantial value.
There is no fact known to Midnight which materially adversely affects or in the
future (as far as Midnight can reasonably foresee) may materially adversely
affect the financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of Midnight and the Midnight
Subsidiaries taken as a whole; provided, however, that Midnight expresses no
opinion as to political or economic matters of general applicability. Midnight
has made known, or caused to be made known, to the accountants or auditors who
have prepared, reviewed, or audited the aforementioned consolidated financial
statements all material facts and circumstances which could affect the
preparation, presentation, accuracy or completeness thereof. The consolidated
statement of operations of Midnight for the year ending December 31, 2004 shall
be audited in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved, and shall
contain all certifications and statements required the SEC's Order, dated June
27, 2002, pursuant to Section 21(a)(1) of the Exchange Act (File No. 4-460),
Rule 13a-14 or 15d-14 under the Exchange Act, or 18 U.S.C. Section 1350
(Sections 302 and 906 of the Sarbanes-Oxley Act of 2002) with respect to the
report relating thereto.
(d) TAX AND OTHER LIABILITIES. Neither Midnight nor any
Midnight Subsidiary has any material liability of any nature, accrued or
contingent, including, without limitation, liabilities for Taxes, and
liabilities to customers or suppliers, other than the following:
(i) Liabilities for which full provision has been
made on the balance sheet and the notes thereto (the "LAST MIDNIGHT
BALANCE SHEET") as of December 31, 2004 (the "LAST MIDNIGHT BALANCE
SHEET DATE") referred to in Section 2.02(c); and
-17-
(ii) Other liabilities arising since the Last
Midnight Balance Sheet Date and prior to the Closing Date in the
ordinary course of business (which shall not include liabilities to
customers on account of defective products or services) or in
connection with the transactions contemplated hereby or in connection
herewith which are not inconsistent with the representations and
warranties of Midnight or any other provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Midnight Balance Sheet are sufficient for all
accrued and unpaid Taxes of Midnight and the Midnight Subsidiaries, whether or
not due and payable and whether or not disputed, under tax laws, as in effect on
the Last Midnight Balance Sheet Date or now in effect, for the period ended on
such date and for all fiscal periods prior thereto. The execution, delivery, and
performance of this Agreement by Midnight will not cause any Taxes to be payable
other than by the stockholders of Midnight or cause any lien, charge, or
encumbrance to secure any Taxes to be created either immediately or upon the
nonpayment of any Taxes other than on the properties or assets of the
stockholders of Midnight. Neither Midnight nor any Midnight Subsidiary has been
required to file any tax returns by any overseas tax authorities or required to
pay any taxes, assessments, and other governmental charges payable or remittable
by it or levied upon it or its properties, assets, income, or franchises which
are due and payable. Neither Midnight nor any Midnight Subsidiary is subject to
any litigation, governmental or other proceeding (formal or informal), or
investigation pending, threatened, or in prospect with respect to any such
report or the subject matter of such report.
(e) LITIGATION AND CLAIMS. Except as described in the Midnight
Disclosure Letter, there is no litigation, arbitration, claim, governmental or
other proceeding (formal or informal), or investigation pending, threatened, or,
to the best of Midnight's knowledge, in prospect (or any basis therefor known to
Midnight), with respect to Midnight, any Midnight Subsidiary, or any of their
respective businesses, properties, or assets. Neither Midnight nor any Midnight
Subsidiary is affected by any present or threatened strike or other labor
disturbance nor to the knowledge of Midnight is any union attempting to
represent any employee of Midnight or any Midnight Subsidiary as collective
bargaining agent. Neither Midnight nor any Midnight Subsidiary is in violation
of, or in default with respect to, any law, rule, regulation, order, judgment,
or decree which violation or default would have a material adverse effect upon
Midnight or such Midnight Subsidiary; nor is Midnight or any Midnight Subsidiary
required to take any action in order to avoid such violation or default.
(f) PROPERTIES.
(i) Except as described in the Midnight Disclosure
Letter, neither Midnight nor any Midnight Subsidiary owns any legal or
equitable interest in any real property. Midnight and each Midnight
Subsidiary has good title to all other properties and assets material
thereto, used in its respective business or owned by it (except real
and other properties and assets as are held pursuant to leases or
licenses described in the Midnight Disclosure Letter), free and clear
of all liens, mortgages, security interests, pledges, charges, and
encumbrances (except such as are listed in the Midnight Disclosure
Letter).
(ii) All accounts and notes receivable reflected on
the Last Midnight Balance Sheet, or arising since the Last Midnight
Balance Sheet Date, have been collected,
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or are and will be good and collectible, in each case at the aggregate
recorded amounts thereof without right of recourse, defense, deduction,
return of goods, counterclaim, offset, or set off on the part of the
obligor, and, if not collected, can reasonably be anticipated to be
paid within 180 days of the date incurred.
(iii) All production in progress of Midnight and the
Midnight Subsidiaries is usable, in current production and marketable,
on a normal basis in the business of Midnight.
(iv) Set forth in the Midnight Disclosure Letter is a
true and complete list of the classes of all tangible properties and
assets owned by Midnight and the Midnight Subsidiaries or leased or
licensed by Midnight or the Midnight Subsidiaries from or to a third
party (including inventory but not including Intangibles, as defined in
Section 2.01(i)), and with respect to such properties and assets leased
or licensed by Midnight or any Midnight Subsidiary from or to a third
party, a description of such lease or license. All such properties and
assets (including Intangibles) owned by Midnight or any Midnight
Subsidiary are reflected on the Last Midnight Balance Sheet (except for
acquisitions subsequent to the Last Midnight Balance Sheet Date and
prior to the Closing Date which are either noted in the Midnight
Disclosure Letter or are approved in writing by REDOX). All real and
other tangible properties and assets owned by Midnight or any Midnight
Subsidiary or leased or licensed by Midnight or any Midnight Subsidiary
from or to a third party are in good and usable condition (reasonable
wear and tear which is not such as to affect adversely the operation of
the business of Midnight and the Midnight Subsidiaries taken as a whole
excepted).
(v) To the best of Midnight's knowledge, no real
property owned by Midnight or any Midnight Subsidiary or leased or
licensed by Midnight or any Midnight Subsidiary from or to a third
party lies in an area which is, or will be, subject to zoning, use, or
building code restrictions which would prohibit, and, to the best of
Midnight's knowledge, no state of facts relating to the actions or
inaction of another person or entity or his or its ownership, leasing,
or licensing of any real or personal property exists or will exist
which would prevent, the continued effective ownership, leasing, or
licensing of such real property in the businesses in which Midnight or
such Midnight Subsidiary is now engaged or the businesses in which it
contemplates engaging.
(vi) The properties and assets (including
Intangibles) owned by Midnight or the Midnight Subsidiaries (other than
those leased or licensed by Midnight or any Midnight Subsidiary to a
third party) or leased or licensed by Midnight or any Midnight
Subsidiary from a third party constitute all such properties and assets
which are necessary to the business of Midnight and the Midnight
Subsidiaries taken as a whole as presently conducted or as they
contemplate conducting.
(vii) Neither Midnight, nor any Midnight Subsidiary,
has (A) engaged in or permitted any operations or activities upon, or
any use or occupancy of, any real property currently or historically
used by either Midnight or any Midnight Subsidiary in the businesses
conducted by Midnight and the Midnight Subsidiaries (collectively, the
-19-
"MIDNIGHT PROPERTY") resulting in the emission, release, discharge,
dumping, treatment, storage, generation or disposal of any Hazardous
Materials (as hereinafter defined) on, under, in or about the Midnight
Property, (B) disposed of any Hazardous Materials off the Midnight
Property or allowed any Hazardous Materials to migrate from the
Midnight Property to, upon, about or beneath other properties or (C)
allowed any Hazardous Materials to migrate or threaten to migrate from
other properties to, upon, about or beneath the Midnight Property.
Midnight further represents that (i) neither it nor any of the Midnight
Subsidiaries has constructed, placed, deposited, stored, disposed of or
located on the Midnight Property any asbestos in any form which has
become friable, (ii) no underground improvements, including but not
limited to treatment or storage tanks, sumps, or water, gas or oil
wells, have been located on the Midnight Property by either Midnight or
any of the Midnight Subsidiaries, (iii) there are no polychlorinated
biphenyls (PCBs) or transformers, capacitors, ballasts or other
equipment containing PCBs constructed, deposited, stored, disposed of
or located by either Midnight or any of the Midnight Subsidiaries on
the Midnight Property, (iv) the operation of the business by Midnight
and the Midnight Subsidiaries and the existing uses and activities of
Midnight or Midnight Subsidiaries and, to the best of Midnight's
knowledge, its prior uses and activities, comply and have at all times
complied in all material respects with all Environmental Requirements
(as hereinafter defined), and Midnight and the Midnight Subsidiaries
have obtained all Permits (as hereinafter defined) necessary under
applicable Environmental Requirements. Neither Midnight nor any
Midnight Subsidiary know, nor, to the best of Midnight's knowledge, any
prior owner or occupant of the Midnight Property, has received any
notice or other communication concerning any alleged violation of
Environmental Requirements, whether or not corrected to the
satisfaction of the appropriate authority, nor any notice or other
communication concerning alleged liability for Environmental Damages in
connection with the Midnight Property, and there exists no judgment,
decree, order, writ or injunction outstanding, nor any litigation,
action, suit, claim (including citation or directive) or proceeding
pending or, to the best of Midnight's knowledge, threatened, arising
from the alleged violation of Environmental Requirements by any Person
(as hereinafter defined) or from the suspected presence of quantities
of Hazardous Material in connection with the Midnight Property, nor are
there, to the best of Midnight's knowledge, any existing facts or
conditions which could give rise to any such violation or liabilities.
For purposes of Section, the following terms shall have the following
meanings:
"HAZARDOUS MATERIAL" means any substance (i) the presence of
which requires investigation or remediation under any applicable
statute law, rule, regulation, order, judgment, ordinance, code and
decree of a Governmental Authority ("LAW"), (ii) which is or has been
identified as a potential "hazardous waste," "hazardous substance,"
pollutant or contaminant under any Environmental Requirement or (iii)
which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, reactive or otherwise hazardous
and has been identified as regulated by any Governmental Authority.
"ENVIRONMENTAL REQUIREMENTS" means all applicable Laws,
Permits and similar requirements of all Governmental Authorities
relating to the protection of human health or
-20-
the environment, including, without limitation, (i) all requirements
pertaining to reporting, licensing, permitting, investigation and
remediation of emissions, discharges, releases or threatened releases
of Hazardous Materials and (ii) all requirements pertaining to the
protection of the health and safety of employees or the public.
"ENVIRONMENTAL DAMAGES" means any and all claims, actions,
suits, demands, assessments, judgments, losses, liabilities, damages,
costs and expenses (including, without limitation, interest, penalties,
reasonable attorneys' fees, reasonable accounting fees and reasonable
investigation costs) (collectively, "Liabilities") which are incurred
at any time as a result of the presence, generation, release or
disposal (including off-site disposal) prior to Closing of Hazardous
Material upon, about, from or beneath the Midnight Property or
migrating or threatening to migrate to or from the Midnight Property or
the existence of a violation of Environmental Requirements pertaining
to the Midnight Property, including without limitation (i) damages for
personal injury or injury to Midnight Property or natural resources
occurring upon or off of the Midnight Property, (ii) fees incurred for
the services of attorneys, consultants, contractors, experts,
laboratories and all other costs incurred in connection with the
investigation or remediation of such Hazardous Materials or violation
of Environmental Requirements, (iii) Liabilities to any Person to
indemnify such Person for costs expended in connection with the items
referenced in this Section 2.2(g) and (iv) diminution of the value of
the Midnight Property and damages for the loss of business and
restriction on the use of or adverse impact on the marketing of
rentable or usable space or of any amenity of the REDOX Property.
"PERSON" means any individual, partnership, corporation,
association, trust, joint venture, company, entity or Governmental
Authority.
"PERMITS" mean all licenses, permits, approvals, variances,
waivers or consents.
"GOVERNMENTAL AUTHORITY" means any foreign, United States,
state or local governmental entity or municipality or subdivision
thereof or any authority, department, commission, board, bureau,
agency, court or instrumentality.
(g) CONTRACTS AND OTHER INSTRUMENTS. The Midnight Disclosure
Letter contains a true and correct list of material contracts, agreements,
instruments, leases, licenses, arrangements, or understandings with respect to
Midnight and the Midnight Subsidiaries taken as a whole. Midnight has made
available to REDOX: (i) the certificate of incorporation and by-laws of Midnight
and each Midnight Subsidiary (or, in each case, the comparable charter
documents, if any, under applicable law) and all amendments thereto, as
presently in effect, certified by the Secretary thereof or an authorized
signatory thereof and (ii) the following: (A) true and correct copies of all
material contracts, agreements, and instruments referred to in the Midnight
Disclosure Letter; (B) true and correct copies of all material leases and
licenses referred to in the Midnight Disclosure Letter; and (C) true and correct
written descriptions of all material supply, distribution, agency, financing, or
other arrangements or understandings referred to in the Midnight Disclosure
Letter. Except as set forth in the Midnight Disclosure Letter, neither Midnight
nor any Midnight Subsidiary is party to any employment agreement with any
employee thereof. To the best of Midnight's knowledge, none of Midnight, any
Midnight Subsidiary, or any other party to any such
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contract, agreement, instrument, lease, or license is now or expects in the
future to be in violation or breach of, or in default with respect to complying
with, any term thereof, and each such material contract, agreement, instrument,
lease, or license is in full force and is (to the best of Midnight's knowledge
in the case of third parties) the legal, valid, and binding obligation of the
parties thereto and (subject to applicable bankruptcy, insolvency, and other
laws affecting the enforceability of creditors' rights generally) is enforceable
as to them in accordance with its terms. Each such material supply,
distribution, agency, financing, or other arrangement or understanding is a
valid and continuing arrangement or understanding; none of Midnight, any
Midnight Subsidiary, or any other party to any such arrangement or understanding
has given notice of termination or taken any action inconsistent with the
continuance of such arrangement or understanding; and the execution, delivery,
and performance of this Agreement will not prejudice any such arrangement or
understanding in any way. Midnight and each Midnight Subsidiary enjoys peaceful
and undisturbed possession under all leases and licenses under which it is
operating. Neither Midnight nor any Midnight Subsidiary is party to, or bound
by, any contract, agreement, instrument, lease, license, arrangement, or
understanding, or subject to any charter or other restriction, which has had or,
to the best of Midnight's knowledge, may in the future have a material adverse
effect on the financial condition, results of operations, businesses,
properties, assets, liabilities, or future prospects of Midnight and the
Midnight Subsidiaries taken as whole, and, following the consummation of the
transactions contemplated hereby, REDOX. Other than as listed and so specified
in the Midnight Disclosure Letter, neither Midnight nor any Midnight Subsidiary
has engaged within the last five years in, is engaging in, or intends to engage
in any transaction with, or has had within the last five years, now has, or
intends to have any contract, agreement, instrument, lease, license,
arrangement, or understanding with, any stockholder of Midnight, any director,
officer, or employee of Midnight or any Midnight Subsidiary (except for
employment agreements listed in the Midnight Disclosure Letter and employment
and compensation arrangements described in the Midnight Disclosure Letter), any
relative or affiliate of any stockholder of Midnight, any such director,
officer, or employee, or any other corporation or enterprise in which any
stockholder of Midnight, any such director, officer, or employee, or any such
relative or affiliate then had or now has a 5% or greater equity or voting or
other substantial interest. The stock ledgers and stock transfer books and the
minute book records of Midnight and each Midnight Subsidiary relating to all
issuances and transfers of stock by Midnight and the Midnight Subsidiaries and
all proceedings of the stockholders and the Board of Directors and committees
thereof of Midnight and each Midnight Subsidiary since its respective
incorporation made available to REDOX are the original stock ledgers and stock
transfer books and minute book records thereof or exact copies thereof. Neither
Midnight nor any Midnight Subsidiary is in violation or breach of, or in default
with respect to, any term of its respective certificate of incorporation or
by-laws (or the comparable charter document, if any, under applicable law).
(h) EMPLOYEES.
(i) Neither Midnight nor any Midnight Subsidiary has,
or contributes to, any pension, profit-sharing, option, other incentive
plan, or any other type of Employee Benefit Plan or has any obligation
to or customary arrangement with employees for bonuses, incentive
compensation, vacations, severance pay, sick pay, sick leave,
insurance, service award, relocation, disability, tuition refund, or
other benefits, whether oral or written, except as set forth in the
Midnight Disclosure Letter. Midnight has made available
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to REDOX true and correct copies, of all documents evidencing plans,
obligations, or arrangements referred to in the Midnight Disclosure
Letter (or true and correct written summaries of such plans,
obligations, or arrangements to the extent not evidenced by documents)
and true and correct copies, so initialed, of all documents evidencing
trusts, summary plan descriptions, and any other summaries or
descriptions relating to any such plans.
(ii) The Midnight Disclosure Letter contains a true
and correct statement of the names, relationship with Midnight or the
relevant Midnight Subsidiary, present rates of compensation (whether in
the form of salary, bonuses, commissions, or other supplemental
compensation now or hereafter payable), and aggregate compensation for
the fiscal year ended December 31, 2004 of (A) each director, officer,
or other employee thereof whose aggregate compensation for the fiscal
year ended December 31, 2004 exceeded US$100,000 or whose aggregate
compensation presently exceeds the rate of US$100,000 per annum and (B)
all sales agents, dealers, or distributors of Midnight or any Midnight
Subsidiary. Except as set forth on the Midnight Disclosure Letter,
since December 31, 2004, Midnight has not changed the rate of
compensation of any of its directors, officers, employees, agents,
dealers, or distributors, nor has any Employee Benefit Plan or program
of Midnight or any Midnight Subsidiary been instituted or amended to
increase benefits thereunder.
(iii) There are no material controversies, including
strikes, disputes, slowdowns or work stoppages, pending, or to the best
of Midnight's knowledge, threatened which involve any employees
employed in connection with the business of Midnight or the Midnight
Subsidiaries. Each of Midnight and the Midnight Subsidiaries has
complied and is complying in all material respects with all Laws
relating to the employment of labor, including, without limitation, any
provision thereof relating to wages, hours, collective bargaining,
employee health, safety and welfare, and the payment of social security
and similar taxes. Neither of Midnight nor any Midnight Subsidiary is a
party to any collective bargaining or union contract, and to the best
of Midnight's knowledge, there exists no current union organizational
effort with respect to any employee of Midnight or any Midnight
Subsidiary. Neither Midnight nor any Midnight Subsidiary has
experienced any material labor difficulties, including, without
limitation, strikes, slowdowns, or work stoppages, within the five-year
period preceding the date hereof.
(i) PATENTS, TRADEMARKS, ET CETERA. Neither Midnight nor any
Midnight Subsidiary owns or has pending, or is licensed or otherwise permitted
to use, any material Intangible, other than as described in the Midnight
Disclosure Letter. Each Intangible is validly issued and is currently in force
and uncontested in all jurisdictions in which it is used or in which such use is
contemplated. The Midnight Disclosure Letter contains a true and correct listing
of: (i) all Intangibles which are owned (either in whole or in part), used by,
or licensed to Midnight or any Midnight Subsidiary or which otherwise relate to
the businesses of Midnight or any Midnight Subsidiary, and a description of each
such Intangible which identifies its owner, registrant, or applicant; (ii) all
contracts, agreements, instruments, leases, and licenses and identification of
all parties thereto under which Midnight or any Midnight Subsidiary owns or uses
any Intangible (whether or not under license from third parties), together with
the identification of the owner,
-23-
registrant, or applicant of each such Intangible; (iii) all contracts,
agreements, instruments, leases, and licenses and identification of all parties
thereto under which Midnight or any Midnight Subsidiary grants the right to use
any Intangible; and (iv) all validity, infringement, right-to-use, or other
opinions of counsel (whether in-house or outside) which concern the validity,
infringement, or enforceability of any Intangible owned or controlled by a party
other than Midnight or any Midnight Subsidiary which relates to the businesses,
properties, or assets of Midnight or any Midnight Subsidiary. Except as
specified in the Midnight Disclosure Letter: (v) Midnight or a Midnight
Subsidiary is the sole and exclusive owner or licensee of, and (other than those
licensed by Midnight to any Midnight Subsidiary to a third party) has the right
to use, all Intangibles; (vi) no Intangible is subject to any order, judgment,
decree, contract, agreement, instrument, lease, or license restricting the scope
of the use thereof; (vii) during the last five years, neither Midnight nor any
Midnight Subsidiary has been charged with, or has charged others with, unfair
competition, infringement of any Intangible, or wrongful use of confidential
information, trade secrets, or secret processes; and (viii) neither Midnight nor
any Midnight Subsidiary is using any patentable invention, confidential
information, trade secret, or secret process of others. There is no right under
any Intangible necessary to the businesses of Midnight or any Midnight
Subsidiary as presently conducted or as it contemplates conducting, except such
as are so designated in the Midnight Disclosure Letter. Neither Midnight nor any
Midnight Subsidiary has infringed, is not infringing, and has not received
notice of infringement in respect of the Intangibles or asserted Intangibles of
others, nor has Midnight or any Midnight Subsidiary been advised by counsel or
others that it is infringing or may infringe the Intangibles or asserted
Intangibles of others if any currently contemplated business activity is
effectuated. To the knowledge of Midnight, there is no infringement by others of
Intangibles of Midnight or any Midnight Subsidiary. As far as Midnight can
foresee, there is no Intangible or asserted Intangible of others that may
materially adversely affect the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Midnight and
the Midnight Subsidiaries taken as a whole. All contracts, agreements,
instruments, leases, and licenses pertaining to Intangibles to which Midnight or
any Midnight Subsidiary is a party, or to which any of its respective
businesses, properties, or assets are subject, are in compliance with all laws,
rules, regulations, orders, judgments, and decrees binding on Midnight or any
Midnight Subsidiary or to which any of its respective businesses, properties, or
assets are subject. The trademarks, tradenames, and service marks used by
Midnight and the Midnight Subsidiaries to identify, respectively, their
products, businesses, and services are as follows: All Night Auto, "moon-man"
logo, All Night Lube Express, ANA Preferred Business Management System, ANA
Vehicle Diagnostic System, ANA Preferred Customer Network, ANA Preferred Parts
Network, ANA Preferred Financial Network, ANA Preferred Marketing Network, ANA
Facility Management System, ANA Preferred Equipment Network, ANA Local Area
Network and ANA Preferred Supplier Network. Neither the Midnight Shareholders,
any director, officer, or employee of Midnight or any Midnight Subsidiary, any
relative or affiliate of the Midnight Shareholders or any such director,
officer, or employee, nor any other corporation or enterprise in which the
Midnight Shareholders, any such director, officer, or employee, or any such
relative or affiliate had or now has a 5% or greater equity or voting or other
substantial interest, possesses any Intangible which relates to the businesses
of Midnight or any Midnight Subsidiary.
(j) QUESTIONABLE PAYMENTS. Neither Midnight or any Midnight
Subsidiary, nor any director, officer, agent, employee, or other person
associated with, or acting on behalf of,
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Midnight or any Midnight Subsidiary, nor the Midnight Shareholders, has,
directly or indirectly: used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses relating to political activity;
made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
(k) AUTHORITY. Midnight has all requisite power and authority
to execute, deliver, and perform this Agreement. All necessary corporate
proceedings of Midnight have been duly taken to authorize the execution,
delivery, and performance of this Agreement by Midnight. This Agreement has been
duly authorized, executed, and delivered by Midnight, constitutes the legal,
valid, and binding obligation of Midnight, and is enforceable as to Midnight in
accordance with its terms. Except as otherwise set forth in this Agreement, no
consent, authorization, approval, order, license, certificate, or permit of or
from, or declaration or filing with, any federal, state, local, or other
governmental authority or any court or other tribunal is required by Midnight
for the execution, delivery, or performance of this Agreement by Midnight. No
consent of any party to any material contract, agreement, instrument, lease,
license, arrangement, or understanding to which Midnight or any Midnight
Subsidiary is a party, or to which its or any of its respective businesses,
properties, or assets are subject, is required for the execution, delivery, or
performance of this Agreement (except such consents referred to in the Midnight
Disclosure Letter); and the execution, delivery, and performance of this
Agreement will not violate, result in a breach of, conflict with, or (with or
without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under, entitle any party to receive rights or
privileges that such party was not entitled to receive immediately before this
Agreement was executed under, or create any obligation on the part of Midnight,
any Midnight Subsidiary, or REDOX to which it was not subject immediately before
this Agreement was executed under, any term of any such material contract,
agreement, instrument, lease, license, arrangement, or understanding, or violate
or result in a breach of any term of the certificate of incorporation or by-laws
of Midnight or any Midnight Subsidiary (or the comparable charter documents, if
any, under applicable law), or (if the provisions of this Agreement are
satisfied) violate, result in a breach of, or conflict with any law, rule,
regulation, order, judgment, or decree binding on Midnight or any Midnight
Subsidiary or to which any of its respective businesses, properties, or assets
are subject. Except as set forth in the Midnight Disclosure Letter, neither
Midnight or any Midnight Subsidiary nor any of its officers, directors,
employees, or agents has employed any broker or finder or incurred any liability
for any fee, commission, or other compensation payable by any person on account
of alleged employment as a broker or finder, or alleged performance of services
as a broker or finder, in connection with or as a result of this Agreement or
the other transactions contemplated hereby and in connection herewith.
(l) INSURANCE. All policies of fire and other insurance
against casualty and other losses and public liability insurance carried by
Midnight and the Midnight Subsidiaries are in full force and effect. A full and
complete copy of each such insurance policy has been made available to REDOX,
and such policies are summarized in the Midnight Disclosure Letter. All premiums
in respect of such policies for which premium notices have been received have
been paid in full as the same become due and payable. Neither Midnight nor any
Midnight Subsidiary has failed to give any notice or present any claim under any
insurance policy in due and timely
-25-
fashion. There are no actual claims or claims threatened in writing against
Midnight or any Midnight Subsidiary which could come within the scope of such
coverage nor are any such policies currently threatened with cancellation. There
are no outstanding requirements or recommendations by any insurance company that
issued a policy with respect to any of the respective assets, the businesses, or
operations of Midnight or any Midnight Subsidiary or by any Board of Fire
Underwriters or other body exercising similar functions or by any governmental
authority requiring or recommending any repairs or other work to be done on, or
with respect to, any of the respective assets of Midnight or any Midnight
Subsidiary or requiring or recommending any equipment or facilities to be
installed on any premises from which the respective businesses of Midnight or
any Midnight Subsidiary is conducted or in connection with any of the respective
assets thereof. Neither Midnight nor any Midnight Subsidiary has any knowledge
of any material proposed increase in applicable insurance rates or of any
conditions or circumstances applicable to the respective businesses thereof that
might result in such increases. No such policy is terminable by virtue of the
transactions contemplated by this Agreement.
(m) BUSINESS CONDUCTED IN NO OTHER NAME. Subject to the next
sentence, all business of Midnight and the Midnight Subsidiaries has been
conducted in its respective and for their respective benefit and there are no
parties related or affiliated with Midnight or any Midnight Subsiairy, either
directly or indirectly, which are competing for the business thereof. Midnight
and the Midnight Subsidiaries conduct their respective business in the following
name: "All Night Auto(R) Stores, Inc." and "Midnight Auto Franchise Corp.".
(n) CUSTOMERS AND SUPPLIERS. There has been no termination or
cancellation of any relationship between Midnight or by Midnight Subsidiary and
any material supplier, or any customer or group of customers which, individually
or in the aggregate, represented more than five (5%) percent of the gross
revenues of Midnight taken as a whole during the year ended December 31, 2004,
nor is there any reason to believe that any such terminations or cancellations
of such magnitudes are pending or threatened.
(o) COMPLETENESS OF DISCLOSURE. No representation or warranty
by Midnight in this Agreement contains, or at the Closing Date will contain, an
untrue statement of material fact or omits or at the Closing Date will omit to
state a material fact required to be stated therein or necessary to make the
statements made not misleading.
(p) COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS. Midnight
and each Midnight Subsidiary is in compliance in all material respects with, and
is not in violation of, applicable local or foreign statutes, laws and
regulations (including without limitation, any applicable building, zoning or
other law, ordinance or regulation) affecting its properties or the operation of
its business. Neither Midnight nor any Midnight Subsidiary is subject to any
order, decree, judgment or other sanction of any court, administrative agency or
other tribunal.
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE MIDNIGHT
SHAREHOLDERS. The Midnight Shareholders hereby represents and warrants to, and
agrees with, REDOX as follows:
(a) REPRESENTATIONS AND WARRANTIES OF MIDNIGHT. To the knowledge of the
Midnight Shareholders, the representations and warranties of Midnight set forth
in Section 2.02 hereof are
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true and correct in all material respects. Nothing has come to the attention of
the Midnight Shareholders that would lead the Midnight Shareholders to believe
that any representation or warranty of Midnight set forth on Section 2.02 hereof
is untrue or incorrect in any material respect.
(b) AUTHORITY. Midnight and the Midnight Shareholders have each
approved this Agreement and duly authorized the execution and delivery hereof.
The Midnight Shareholders are individuals residing in the United States with
full power and authority under the laws thereof to execute, deliver, and perform
this Agreement and the transactions contemplated hereby and in connection
herewith. The Midnight Shareholders have reached the age of majority under
applicable law.
(c) OWNERSHIP OF SHARES. The Midnight Shareholders own beneficially all
of the shares of Midnight Capital Stock. The Midnight Shareholders have full
power and authority to transfer such shares of Midnight Capital Stock to REDOX
under, pursuant to, and in accordance with, this Agreement, and such shares are
free and clear of any liens, charges, mortgages, pledges or encumbrances and
such shares are not subject to any claims as to the ownership thereof, or any
rights, powers or interest therein, by any third party and are not subject to
any preemptive or similar rights of stockholders.
(d) INVESTMENT REPRESENTATIONS AND COVENANTS.
(i) The Midnight Shareholders represent that they are
acquiring the shares of REDOX Common Stock to be issued pursuant to Section
1.02(a) hereof for their own accounts and for investment only and not with a
view to distribution or resale thereof within the meaning of such phrase as
defined under the Securities Act. The Midnight Shareholders shall not dispose of
any part or all of such shares of REDOX Common Stock in violation of the
provisions of the Securities Act and the rules and regulations promulgated under
the Securities Act by the SEC and all applicable provisions of state securities
laws and regulations.
(ii) The certificate or certificates representing the shares
of REDOX Common Stock shall bear a legend in substantially the form set forth in
Section 1.02(b) hereof.
(iii) The Midnight Shareholders acknowledge being informed
that the shares of REDOX Common Stock to be issued pursuant to Section 1.02(a)
hereof shall be unregistered, shall be "RESTRICTED SECURITIES" as defined in
paragraph (a) of Rule 144 under the Securities Act, and must be held
indefinitely unless (a) they are subsequently registered under the Securities
Act, or (b) an exemption from such registration is available. The Midnight
Shareholders further acknowledge that REDOX does not have an obligation to
currently register such securities for the account of Midnight Shareholders.
(iv) The Midnight Shareholders acknowledge that they have been
afforded access to all material information which they have requested relevant
to their decision to acquire the shares of REDOX Common Stock and to ask
questions of REDOX's management and that, except as set forth herein, neither
REDOX nor anyone acting on behalf of REDOX has made any representations or
warranties to the Midnight Shareholders which have induced, persuaded, or
stimulated the Midnight Shareholders to acquire such shares of REDOX Common
Stock.
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(v) Either alone, or together with their investment
advisor(s), the Midnight Shareholders have the knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of the prospective investment in the shares of REDOX Common Stock, and the
Midnight Shareholders are and will be able to bear the economic risk of the
investment in such shares of REDOX Common Stock.
ARTICLE III
COVENANTS
SECTION 3.01 COVENANTS OF REDOX. REDOX covenants and agrees that, after
the date hereof and through the earlier of the Closing or the date of the
termination of this Agreement pursuant to Article IV hereof (the earlier of such
times, the "RELEASE Time"), unless Midnight will otherwise approve in writing,
which approval will not be unreasonably withheld:
(a) (i) Until the Release Time, no dividend or liquidating or
other distribution or stock split shall be authorized, declared, paid, or
effected by REDOX in respect of the outstanding shares of REDOX Common Stock.
(ii) Until the Release Time, no share of capital stock of
REDOX or warrant for any such share, right to subscribe to or purchase any such
share, or security convertible into, or exchangeable or exercisable for, any
such share, shall be issued or sold by REDOX.
(b) Until the Release Time, REDOX will afford the officers,
directors, employees, counsel, agents, investment bankers, accountants, and
other representatives of Midnight and the Midnight Shareholders free and full
access to the plants, properties, books, and records of REDOX. REDOX will permit
them to make extracts from and copies of such books and records, and will from
time to time furnish Midnight and the Midnight Shareholders with such additional
financial and operating data and other information as to the financial
condition, results of operations, businesses, properties, assets, liabilities,
or future prospects of REDOX as Midnight or the Midnight Shareholders from time
to time may request. Until the Release Time, REDOX will cause the independent
certified public accountants of REDOX to make available to Midnight, its
independent certified public accountants, and the Midnight Shareholders, the
work papers relating to the audits of REDOX referred to in Section 2.01(c) of
this Agreement.
(c) Until the Release Time, REDOX will conduct its affairs, so
that on the Closing Date, no representation or warranty of REDOX will be
inaccurate, no covenant or agreement of REDOX will be breached, and no condition
in this Agreement will remain unfulfilled by reason of the actions or omissions
of REDOX. Except as otherwise consented to by Midnight in writing, until the
Release Time, REDOX will conduct its affairs in all respects only in the
ordinary course.
(d) Until the Release Time, REDOX will immediately advise
Midnight in a detailed written notice of any material fact or occurrence or any
pending or threatened material occurrence of which it obtains knowledge and
which (if existing and known at the date of the execution of this Agreement)
would have been required to be set forth or disclosed in or pursuant
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to this Agreement or in the REDOX Disclosure Letter, which (if existing and
known at any time prior to or at the Closing) would make the performance by any
party of a covenant contained in this Agreement impossible or make such
performance materially more difficult than in the absence of such fact or
occurrence, or which (if existing and known at the time of the Closing) would
cause a condition to any party's obligations under this Agreement not to be
fully satisfied.
(e) REDOX shall use its commercially reasonable efforts to
insure that all confidential information which REDOX or any of its officers,
directors, employees, counsel, agents, investment bankers, or accountants may
now possess or may hereafter create or obtain relating to the financial
condition, results of operations, businesses, properties, assets, liabilities,
or future prospects of Midnight, any affiliate of Midnight, or any customer or
supplier of Midnight or any such affiliate shall not be published, disclosed, or
made accessible by any of them to any other person or entity without the prior
written consent of Midnight, which written consent shall not be unreasonably
withheld; provided, however, that the restrictions of this sentence shall not
apply (i) as may otherwise be required by law, (ii) as may be necessary or
appropriate in connection with the enforcement of this Agreement, or (iii) to
the extent the information shall have otherwise become publicly available. REDOX
shall, and shall cause all other such persons and entities to, deliver to
Midnight all tangible evidence of the confidential information relating to
Midnight, any affiliate of Midnight, or (insofar as such confidential
information was provided by, or on behalf of, Midnight, or any such affiliate of
Midnight) any customer or supplier of any of them or any such affiliate to which
the restrictions of the foregoing sentence apply immediately after the
termination of this Agreement pursuant to Article IV or V hereof.
(f) Before REDOX releases any information concerning this
Agreement or any of the other transactions contemplated hereby or in connection
herewith which is intended for or may result in public dissemination thereof,
REDOX shall cooperate with Midnight, shall furnish drafts of all documents or
proposed oral statements to Midnight for comment, and shall not release any such
information without the written consent of Midnight. Nothing contained herein
shall prevent REDOX from releasing any information if required to do so by law.
(g) REDOX shall not make any agreement or reach any
understanding not approved in writing by Midnight as a condition for obtaining
any consent, authorization, approval, order, license, certificate, or permit
required for the consummation of the transactions contemplated by this
Agreement.
(h) REDOX shall promptly prepare all required or, in the
reasonable opinion of the parties hereto, appropriate Periodic Reports (as
hereinafter defined) and other regulatory filings relating to this Agreement and
the transactions contemplated hereby and in connection herewith. REDOX shall
furnish or cause to be furnished, for inclusion in the Periodic Reports, such
information about REDOX, and REDOX's security holders as may be required or as
may be reasonably requested by Midnight, and shall continue to furnish or cause
to be furnished such information as is necessary to keep such information
correct and complete in all material respect until the Release Time. REDOX
represents and warrants that the information that it has furnished to date,
taken as a whole, does not now, and will not at any time prior to the Release
Time, (i) contain an untrue statement of a material fact or (ii) omit to state a
material fact required to be stated therein or necessary to make the statements
therein not false or misleading. REDOX shall
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take any action required to be taken by it under state "blue-sky," securities,
or take-over laws in connection with the issuance of REDOX Common Stock pursuant
to the transactions contemplated hereby and in connection herewith. The filings
made by REDOX within the past six years with the SEC were, if filed under the
Exchange Act, prepared in accordance with the then existing requirements of the
Exchange Act and the rules and regulations thereunder and, if filed under the
Securities Act, prepared in accordance with the then existing requirements of
the Securities Act and the rules and regulations thereunder. Such filings when
filed, and the press releases and other public statements REDOX has made
subsequent to the last such filing when considered together with such filings,
did not at the time of filing or issuance of the press releases or other public
statements, as the case may be, and (with respect to the press releases and
other public statements, when considered together with such filings) do not now
(i) contain an untrue statement of a material fact or (ii) omit to state a
material fact required to be stated therein or necessary to make the statements
therein not false or misleading.
(i) If, prior to the Release Time, REDOX Common Stock shall be
recapitalized or reclassified or REDOX shall effect any stock dividend, stock
split, or reverse stock split of REDOX Common Stock, then the shares of REDOX
Common Stock to be delivered under this Agreement or upon exercise, conversion,
or exchange of any security to be delivered under this Agreement or assumed by
REDOX as contemplated by this Agreement shall be appropriately and equitably
adjusted to the kind and amount of shares of stock and other securities and
property to which the holders of such shares of REDOX Common Stock or such other
security would have been entitled to receive had such stock or such other
security been issued and outstanding as of the record date for determining
stockholders entitled to participate in such corporate event.
(j) REDOX shall timely prepare and file any declaration or
filing necessary to comply with any transfer tax statutes that require any such
filing before the Closing.
(k) Until the Release Time, REDOX shall not, and shall not
authorize or permit any officer, director, employee, counsel, agent, investment
banker, accountant, or other representative of REDOX, directly or indirectly, to
contemplate or enter into any transaction the effect of which may be to
prohibit, restrict, or delay the consummation of the transactions contemplated
by this Agreement or impair the contemplated benefits to REDOX's stockholders of
the transactions contemplated by this Agreement.
(l) (i) Following the consummation of the transactions
contemplated hereby and in connection herewith, REDOX will cause Midnight to
continue its historic business or to use a significant portion of Midnight's
historic business assets in a business, in each case within the meaning of
section 1.368-1(d) of the Treasury Regulations, assuming that the assets of, and
the business conducted by, Midnight at the Closing Date constitute Midnight's
historic business assets and historic business, respectively.
(ii) Following the consummation of the transactions
contemplated hereby and in connection herewith, REDOX will not permit Midnight
to issue additional shares that would result in REDOX losing control of Midnight
within the meaning of section 368(c) of the Code.
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(m) REDOX shall use best efforts to file with the National
Association of Securities Dealers, Inc., or its affiliates, all information
required by Rule 15c2-11 under the Exchange Act, if required.
(n) As soon as practicable following the Closing, REDOX shall
cause its certificate of incorporation to be amended as follows: (i) to cause
the corporate name thereof to be changed to reflect the nature and character of
Midnight; (ii) to increase the number of shares of REDOX Common Stock authorized
thereunder to 1,000,000,000 shares.
(o) Effective at the Closing, each member of the Board of
Directors, and each officer of REDOX shall tender his or her respective
resignation therefrom and shall appoint the following individuals as the sole
officers and directors of REDOX:
Nicholas A. Cocco, President, Chief Executive Officer and
Director;
Arthur G. Veenstra, Executive Vice President of Finance and
Chief Financial Officer;
Richard J. Kohl, Executive Vice President of Operations and
Chief Operating Officer;
Dennis Spencer, Jr. Executive Vice President of Area
Development; and
Richard D. Pulford, Independent Director.
(p) On or prior to the Closing Date, REDOX shall deliver to
Midnight and the Midnight Shareholders the completed REDOX Disclosure Letter,
which letter shall be correct and complete in all material respects.
(q) In addition to the shares of REDOX Common Stock to be
delivered pursuant to Sections 1.02(a) hereof, 8,962,500 new shares of REDOX
Common Stock shall be issued and delivered in certificated form to the former
directors of REDOX as follows: James Schuler 3,750,000 shares; Clifton Douglas
2,812,500 shares; Victor W. Nee 600,000 shares; Harold W. Price 600,000 shares;
Michael F. Bianco 600,000 shares; and James M. Dowaliby 600,000 shares.
SECTION 3.02 COVENANTS OF MIDNIGHT. Midnight covenants and agrees that,
after the date hereof and through the Release Time, unless REDOX will otherwise
approve in writing, which approval will not be unreasonably withheld:
(a) Until the Release Time, no amendment will be made in the
certificate of incorporation or by-laws (or, in each case, the comparable
charter documents, if any, under applicable law) of Midnight.
(b) Until the Release Time, no share of Midnight Capital
Stock, option or warrant for any such share, right to subscribe to or purchase
any such share, or security convertible into, or exchangeable or exercisable
for, any such share, shall be issued or sold by Midnight, otherwise than as
contemplated by, or in connection with, this Agreement.
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(c) Until the Release Time, no dividend or liquidating or
other distribution or stock split shall be authorized, declared, paid, or
effected by Midnight in respect of the outstanding shares of Midnight Capital
Stock. Until the Release Time, no direct or indirect redemption, purchase, or
other acquisition shall be made by Midnight of shares of Midnight Capital Stock.
(d) Until the Release Time, except in the ordinary course of
its business, Midnight shall not borrow money, guarantee the borrowing of money,
engage in any transaction, or enter into any material agreement other than in
connection with the transactions contemplated hereby or in connection herewith
or otherwise pursuant to any currently outstanding credit line of Midnight. For
purposes of this Agreement, references to "MATERIAL", as well as correlative
terms (E.G., MATERIALLY, MATERIALITY, etc.), shall be deemed to refer to amounts
of US$50,000 or more or effects or consequences of US$50,000 or more.
(e) Until the Release Time, Midnight will afford the officers,
directors, employees, counsel, agents, investment bankers, accountants, and
other representatives of REDOX and lenders, investors, and prospective lenders
and investors free and full access to the plants, properties, books, and records
of Midnight, will permit them to make extracts from and copies of such books and
records, and will from time to time furnish REDOX with such additional financial
and operating data and other information as to the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects
of Midnight as REDOX from time to time may request. Until the Release Time,
Midnight will cause the independent certified public accountants of Midnight to
make available to REDOX and its independent certified public accountants the
work papers relating to the audits of Midnight referred to in Section 2.02(c) of
this Agreement.
(f) Until the Release Time, Midnight will conduct its affairs
so that at the Closing, no representation or warranty of Midnight will be
inaccurate in any material respect, no covenant or agreement of Midnight will be
breached, and no condition in this Agreement will remain unfulfilled by reason
of the actions or omissions of Midnight. Except as otherwise consented to by
REDOX in writing, until the Release Time, Midnight will use its best efforts to
preserve the business operations of Midnight intact, to keep available the
services of its present personnel, to preserve in full force and effect the
contracts, agreements, instruments, leases, licenses, arrangements, and
understandings of Midnight, and to preserve the good will of its suppliers,
customers, and others having business relations with any of them. Until the
Release Time, Midnight will conduct its affairs in all respects only in the
ordinary course, other than in connection with the matters referenced herein.
(g) Until the Release Time, Midnight will immediately advise
REDOX in a detailed written notice of any material fact or occurrence or any
pending or threatened material occurrence of which it obtains knowledge and
which (if existing and known at the date of the execution of this Agreement)
would have been required to be set forth or disclosed in or pursuant to this
Agreement or the Midnight Disclosure Letter, which (if existing and known at any
time prior to or at the Closing) would make the performance by any party of a
covenant contained in this Agreement impossible or make such performance
materially more difficult than in the absence of such fact or occurrence, or
which (if existing and known at the time of the Closing) would cause a condition
to any party's obligations under this Agreement not to be fully satisfied.
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(h) Midnight shall use its commercially reasonable efforts to
insure that all confidential information which Midnight or any of its respective
officers, directors, employees, counsel, agents, investment bankers, or
accountants may now possess or may hereafter create or obtain relating to the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of REDOX, any affiliate thereof, or any
customer or supplier thereof or of any such affiliate shall not be published,
disclosed, or made accessible by any of them to any other person or entity at
any time or used by any of them except in the ordinary course of business and
for the benefit of Midnight; provided, however, that the restrictions of this
sentence shall not apply (A) after this Agreement is terminated pursuant to
Article IV or V hereof or otherwise, (B) as may otherwise be required by law,
(C) as may be necessary or appropriate in connection with the enforcement of
this Agreement, or (D) to the extent the information shall have otherwise become
publicly available.
(i) Before Midnight releases any information concerning this
Agreement or any of the transactions contemplated by this Agreement which is
intended for, or may result in, public dissemination thereof, Midnight shall
cooperate with REDOX, shall furnish drafts of all documents or proposed oral
statements to REDOX for comment, and shall not release any such information
without the written consent of REDOX, which consent shall not be unreasonably
withheld. Nothing contained herein shall prevent Midnight from releasing any
information if required to do so by law.
(j) Midnight shall not make any agreement or reach any
understanding not approved in writing by REDOX as a condition for obtaining any
consent, authorization, approval, order, license, certificate, or permit
required for the consummation of the transactions contemplated by this
Agreement.
(k) Midnight shall furnish, or cause to be furnished, for
inclusion in the periodic and other reports of REDOX on Forms 8-K, 10-QSB,
10-KSB, 14C, 14F-1, or otherwise (such periodic and other reports, together with
all financial statements, exhibits, amendments, and supplements thereto, in the
form filed by REDOX with the SEC being hereinafter referred to as the "PERIODIC
REPORTS"), to be filed pursuant to the Exchange Act in connection with the
transactions contemplated by this Agreement, or for inclusion in REDOX's filings
under state "blue-sky," securities, or take-over laws, such information about
Midnight or the Midnight Shareholders as may be required or as may be reasonably
requested by REDOX, and shall continue to furnish or cause to be furnished such
information as is necessary to keep such information correct and complete in all
material respect until the Release Time. Midnight represents and warrants that
the information that it has furnished to date, taken as a whole, does not now,
and will not at any time prior to the Release Time, (i) contain an untrue
statement of a material fact or (ii) omit to state a material fact required to
be stated therein or necessary to make the statements therein not false or
misleading.
(l) Midnight shall timely prepare and file any declaration or
filing necessary to comply with any transfer tax statutes that require any such
filing before the Closing.
(m) On or prior to the Closing Date, Midnight and the Midnight
Shareholders shall deliver to REDOX the completed Midnight Disclosure Letter,
which letter shall be correct and complete in all material respects.
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SECTION 3.03 COVENANTS OF THE MIDNIGHT SHAREHOLDERS. The Midnight
Shareholders covenant and agree that, after the date hereof and through the
Release Time, unless REDOX will otherwise approve in writing, which approval
will not be unreasonably withheld, as follows:
(a) The Midnight Shareholders will use best efforts to cause
Midnight to perform each covenant thereof set forth herein on a timely basis.
(b) Until the earlier of the Release Time, the Midnight
Shareholders shall take no action the result of which shall be to cause Midnight
to make any amendment in the certificate of incorporation or by-laws (or, in
each case, the comparable charter documents, if any, under applicable law)
thereof.
(c) Before the Midnight Shareholders release any information
concerning this Agreement or any of the transactions contemplated by this
Agreement which is intended for, or may result in, public dissemination thereof,
the Midnight Shareholders shall cooperate with REDOX, shall furnish drafts of
all documents or proposed oral statements to REDOX for comment, and shall not
release any such information without the written consent of REDOX, which consent
shall not be unreasonably withheld. Nothing contained herein shall prevent the
Midnight Shareholders from releasing any information if required to do so by
law.
(d) The Midnight Shareholders shall furnish, or cause to be
furnished, for inclusion in the Periodic Reports to be filed pursuant to the
Exchange Act in connection with the transactions contemplated by this Agreement,
or for inclusion in REDOX's filings under state "blue-sky," securities, or
take-over laws, such information about Midnight or the Midnight Shareholders as
may be required or as may be reasonably requested by REDOX, and shall continue
to furnish or cause to be furnished such information as is necessary to keep
such information correct and complete in all material respect until the Release
Time. The Midnight Shareholders represent and warrant that the information in
writing that they have furnished to date regarding themselves, taken as a whole,
do not now, and will not at any time prior to the Release Time, (i) contain an
untrue statement of a material fact or (ii) omit to state a material fact
required to be stated therein or necessary to make the statements therein not
false or misleading.
ARTICLE IV
CONDITIONS; ABANDONMENT AND TERMINATION
SECTION 4.01 RIGHT OF REDOX TO ABANDON. REDOX's Board of Directors
shall have the right to abandon or terminate this Agreement if any of the
following conditions shall not be true or shall not have occurred, as the case
may be, as of the specified date or dates:
(a) All representations and warranties of Midnight and the
Midnight Shareholders contained in this Agreement shall be accurate when made
and, in addition, shall be accurate as of the Closing Date as though such
representations and warranties were then made in exactly the same language by
Midnight or the Midnight Shareholders, as applicable, and regardless of
knowledge or lack thereof on the part of Midnight or the Midnight Shareholders
(as applicable)
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or changes beyond its control; as of the Closing Date, Midnight and the Midnight
Shareholders shall have performed and complied with all covenants and agreements
and satisfied all conditions required to be performed and complied with by it at
or before the Closing Date, respectively, by this Agreement; and REDOX shall
have received a certificate executed by the chief executive officer and the
chief financial officer of Midnight and the Midnight Shareholders, dated as of
the Closing Date, to that effect.
(b) REDOX shall have received at the Closing Date certificates
executed by the chief executive officer and the chief financial officer of
Midnight and by the Midnight Shareholders as of such dates, to the effect that
they have carefully examined the Periodic Reports, and any amendment or
supplement thereto, and, to the best of their knowledge, (i) neither the
Periodic Reports, nor any amendment or supplement thereto (A) contains an untrue
statement of a material fact or (B) omits to state a material fact required to
be stated therein or necessary to make the statements therein not false or
misleading, provided in each case that such untrue statement or omission relates
to information furnished by or on behalf of, or pertaining to, Midnight or the
Midnight security holder, (ii) since the date hereof, no event with respect to
Midnight or the Midnight security holder has occurred which should have been set
forth in an amendment to any Periodic Report, or a supplement to any Periodic
Report which has not been set forth in such an amendment or supplement, and
(iii) any contract, agreement, instrument, lease, or license regarding Midnight
required to be filed as an exhibit to any Periodic Report has been filed with
the SEC as an exhibit to or has been incorporated as an exhibit by reference
into such Periodic Report.
(c) Midnight and the Midnight Shareholders shall have
delivered to REDOX at or prior to the Closing Date such other documents
(including certificates of officers of Midnight) as REDOX may reasonably request
in order to enable REDOX to determine whether the conditions to their
obligations under this Agreement have been met and otherwise to carry out the
provisions of this Agreement.
(d) All actions, proceedings, instruments, and documents
required by Midnight and the Midnight Shareholders to carry out this Agreement
or incidental thereto and all other related legal matters shall be subject to
the reasonable approval of counsel to REDOX, and Midnight and the Midnight
Shareholders shall have furnished such counsel such documents as such counsel
may have reasonably requested for the purpose of enabling them to pass upon such
matters.
(e) At the Closing, there shall not be pending any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(f) There shall not have been any action taken, or any law,
rule, regulation, order, judgment, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of REDOX, (i) makes this Agreement
or any of the transactions contemplated by this Agreement illegal, (ii) results
in a delay in the ability of Midnight or REDOX to consummate the transactions
contemplated by this Agreement beyond
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December 31, 2005, (iii) requires the divestiture by REDOX of a material portion
of the business of either REDOX or of Midnight, (iv) imposes material
limitations on the ability of REDOX effectively to exercise full rights of
ownership of shares of Midnight including the right to vote such shares on all
matters properly presented to the Midnight Shareholders, or (v) otherwise
prohibits, restricts, or delays consummation of the transactions contemplated by
this Agreement or impairs the contemplated benefits to REDOX of this Agreement
or any of the other transactions contemplated by this Agreement.
(g) The parties to this Agreement shall have obtained at or
prior to the Closing Date all unconditional written approval to this Agreement
and to the execution, delivery, and performance of this Agreement by each of
them of relevant governmental authorities having jurisdiction over REDOX or
Midnight or the subject matter of this Agreement.
(h) The parties to this Agreement shall have obtained at or
prior to the Closing Date all consents required for the consummation of the
transactions contemplated by this Agreement from any unrelated third party to
any contract, agreement, instrument, lease, license, arrangement, or
understanding to which any of them is a party, or to which any of them or any of
their respective businesses, properties, or assets are subject.
(i) There shall not have been any material adverse change in
the condition (financial or otherwise), operations, business, assets,
liabilities, earnings or prospects of Midnight since the date hereof.
(j) REDOX shall conduct a due diligence review of Midnight and
the Midnight Shareholders, including, without limitation, a review of the
Midnight Disclosure Letter and the documents referenced therein delivered prior
to the Closing Date, and shall be reasonably satisfied with the result of such
review.
SECTION 4.02 RIGHT OF MIDNIGHT AND THE MIDNIGHT SHAREHOLDERS TO
ABANDON. By the election of the Midnight Shareholders, the Midnight Shareholders
or, otherwise, Midnight's Board of Directors shall have the right to abandon or
terminate this Agreement if any of the following conditions shall not be true or
shall not have occurred, as the case may be, as of the specified date or dates:
(a) All representations and warranties of REDOX contained in
this Agreement shall be accurate when made and, in addition, shall be accurate
as of the Closing Date as though such representations and warranties were then
made in exactly the same language by REDOX and regardless of knowledge or lack
thereof on the part of REDOX or changes beyond its control; as of the Closing
Date, REDOX shall have performed and complied with all covenants and agreements
and satisfied all conditions required to be performed and complied with by them
at or before the Closing Date by this Agreement; and Midnight shall have
received certificates executed by the chief executive officer and the chief
financial officer of REDOX, dated the Closing Date, to that effect.
(b) Midnight shall have received at the Closing, certificates
executed by the chief executive officer and the chief financial officer of
REDOX, dated as of such dates, to the
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effect that they have carefully examined the Periodic Reports, and any amendment
or supplement thereto, and, to the best of their knowledge, (i) neither any
Periodic Report, nor any amendment or supplement thereto (A) contains an untrue
statement of a material fact or (B) omits to state a material fact required to
be stated therein or necessary to make the statements therein not false or
misleading, provided in each case that such untrue statement or omission relates
to information furnished by or on behalf of, or pertaining to, REDOX or any
REDOX security holder, (ii) since the date of the filing of any Periodic Report,
no event with respect to REDOX or any REDOX security holder has occurred which
should have been set forth in an amendment or a supplement to such Periodic
Report which has not been set forth in such an amendment or supplement, (iii)
any contract, agreement, instrument, lease, or license regarding REDOX required
to be filed as an exhibit to any Periodic Report has been filed as an exhibit to
or has been incorporated as an exhibit by reference into such Periodic Report,
and (iv) to the effect of clause (k) of this Section 4.02.
(c) REDOX shall have delivered to Midnight and the Midnight
Shareholders at or prior to the Closing such other documents (including
certificates of officers of REDOX) as Midnight and the Midnight Shareholders may
reasonably request in order to enable Midnight and the Midnight Shareholders to
determine whether the conditions to REDOX's obligations under this Agreement
have been met and otherwise to carry out the provisions of this Agreement.
(d) All actions, proceedings, instruments, and documents
required by REDOX to carry out this Agreement or incidental thereto and all
other related legal matters shall be subject to the reasonable approval of
counsel to Midnight and the Midnight Shareholders, and REDOX shall have
furnished such counsel such documents as such counsel may have reasonably
requested for the purpose of enabling them to pass upon such matters.
(e) At the Closing Date, there shall not be pending any legal
proceeding relating to, or seeking to prohibit or otherwise challenge the
consummation of, the transactions contemplated by this Agreement, or to obtain
substantial damages with respect thereto.
(f) There shall not have been any action taken, or any law,
rule, regulation, order, judgment, or decree proposed, promulgated, enacted,
entered, enforced, or deemed applicable to the transactions contemplated by this
Agreement by any federal, state, local, or other governmental authority or by
any court or other tribunal, including the entry of a preliminary or permanent
injunction, which, in the reasonable judgment of Midnight or the Midnight
Shareholders, (i) makes this Agreement or any of the transactions contemplated
by this Agreement illegal, (ii) results in a delay in the ability of REDOX or
Midnight to consummate any of the transactions contemplated by this Agreement
beyond December 31, 2005, or (iii) otherwise prohibits, restricts, or delays
consummation of the other transactions contemplated by this Agreement or impairs
the contemplated benefits to the Midnight Shareholders of this Agreement or any
of the transactions contemplated by this Agreement.
(g) The parties to this Agreement shall have obtained at or
prior to the Closing Date all unconditional written approval to this Agreement
and to the execution, delivery, and performance of this Agreement by each of
them of relevant governmental authorities having jurisdiction over REDOX or
Midnight or the subject matter of this Agreement.
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(h) At or prior to the Closing Date, REDOX shall have made all
filings, and taken all actions, necessary to comply with all reporting
requirements under federal and state securities laws (including without
limitation, applicable "blue-sky" laws with regard to the issuance of REDOX
Common Stock as contemplated by this Agreement) other than the filing of Form D
up to 15 days following the Closing. Without limiting the generality of the
foregoing, any prescribed periods within which a "blue sky" or securities law
administrator may disallow REDOX's notice of reliance on an exemption from such
state's requirements, shall have elapsed at or prior to the Closing Date.
(i) The parties to this Agreement shall have obtained at or
prior to the Closing Date all consents required for the consummation of the
transactions contemplated by this Agreement from any unrelated third party to
any contract, agreement, instrument, lease, license, arrangement, or
understanding to which any of them is a party, or to which any of them or any of
their respective businesses, properties, or assets are subject.
(j) Midnight and the Midnight Shareholders shall conduct a due
diligence review of REDOX, including, without limitation, a review of the REDOX
Disclosure Letter and the documents referenced therein delivered prior to the
Closing Date, and same shall be satisfactory in the reasonable opinion of
Midnight and the Midnight Shareholders.
(k) At the Closing Date, except as set forth on the REDOX
Disclosure Letter, REDOX shall have no assets and no liabilities, determined in
accordance with generally accepted accounting principles in effect in the United
States applied on a basis consistent with that of the financial statements of
REDOX hereinabove referenced.
SECTION 4.03 OPTIONAL ABANDONMENT. In addition to the provisions of
Section 4.01 and Section 4.02 above, the transactions contemplated by this
Agreement may be abandoned or terminated at or before the Closing
notwithstanding adoption and approval of this Agreement and the transactions
contemplated hereby by the stockholders of the parties hereto:
(a) by mutual agreement of the Boards of Directors of REDOX
and Midnight;
(b) at the option of REDOX's Board of Directors or Midnight's
Board of Directors, if the Closing Date shall not have occurred on or before
December 31, 2005;
(c) at the option of REDOX's Board of Directors, if facts
exist which render impossible compliance with one or more of the conditions set
forth in Section 4.01 and such are not waived by REDOX; and
(d) at the option of Midnight's Board of Directors or by the
election of the Midnight Shareholders if facts exist which render impossible
compliance with one or more of the conditions set forth in Section 4.02 and such
are not waived by Midnight.
SECTION 4.04 EFFECT OF ABANDONMENT. If the transactions contemplated by
this Agreement are abandoned or terminated as provided for in this Article IV,
except for Sections 3.01(e), 3.02(h), 4.01, 4.02 and 4.03, this Agreement shall
forthwith become wholly void and of no further force or effect without liability
on the part of either party to this Agreement or on the part
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of any officer, director, controlling person (if any), employee, counsel, agent,
or stockholder thereof; provided, however, that nothing in this Section 4.04
shall release REDOX or Midnight or any officer, director, controlling person (if
any), employee, counsel, agent, or stockholder thereof from liability for a
willful failure to carry out its respective obligations under this Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby, will be paid by
the party incurring such expense or as otherwise agreed to herein.
SECTION 5.02 BROKERS AND FINDERS. Each of the parties hereto
represents, as to itself, that no agent, broker, investment banker or firm or
person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except as may be otherwise set forth herein or
by separate document.
SECTION 5.03 NECESSARY ACTIONS. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper executive
officers and/or directors of REDOX or Midnight, as the case may be, or the
relevant Midnight Shareholders or Midnight Shareholders will take all such
necessary action.
SECTION 5.04 EXTENSION OF TIME; WAIVERS. At any time prior to the
Closing Date:
(a) REDOX may (i) extend the time for the performance of any of the
obligations or other acts of Midnight or any Midnight Shareholders or Midnight
Shareholders, (ii) waive any inaccuracies in the representations and warranties
of Midnight or any Midnight Shareholders or Midnight Shareholders, or contained
herein or in any document delivered pursuant hereto by Midnight or any Midnight
Shareholders or Midnight Shareholders, and (iii) waive compliance with any of
the agreements or conditions contained herein to be performed by Midnight or any
Midnight Shareholders or Midnight Shareholders. Any agreement on the part of
REDOX to any such extension or waiver will be valid only if set forth in an
instrument, in writing, signed on behalf of REDOX.
(b) Midnight and the Midnight Shareholders (by action of the Midnight
Shareholders), may (i) extend the time for the performance of any of the
obligations or other acts of REDOX, (ii) waive any inaccuracies in the
representations and warranties of REDOX contained herein or in any
-39-
document delivered pursuant hereto by REDOX and (iii) waive compliance with any
of the agreements or conditions contained herein to be performed by REDOX. Any
agreement on the part of Midnight and to any such extension or waiver will be
valid only if set forth in an instrument, in writing, signed on behalf of
Midnight.
SECTION 5.05 NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested or by the most nearly comparable method
if mailed from or to a location outside of the United States or by Federal
Express, Express Mail, or similar overnight delivery or courier service or
delivered (in person or by telecopy, telex, or similar telecommunications
equipment) against receipt to the party to which it is to be given at the
address of such party set forth in the introductory paragraph to this Agreement
(or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 5.05. Any notice to REDOX or to
Midnight shall be addressed to the attention of the Corporate Secretary. A copy
of any and all notices to Midnight or any Midnight Shareholder shall be
delivered in accordance with this section to Reitler Brown & Rosenblatt LLC, 800
Third Avenue, 21st Floor, New York, New York 10022, Attention: Robert Steven
Brown, Esq. A copy of any and all notices to REDOX shall be delivered in
accordance with this section to Sichenzia Ross Friedman Ference LLP, 1065 Avenue
of the Americas, New York, New York 10018, Attention: Gregory Sichenzia, Esq.
Any notice or other communication given by certified mail (or by such comparable
method) shall be deemed given at the time of certification thereof (or
comparable act), except for a notice changing a party's address which will be
deemed given at the time of receipt thereof. Any notice given by other means
permitted by this Section 5.05 shall be deemed given at the time of receipt
thereof.
SECTION 5.06 PARTIES IN INTEREST. This Agreement will inure to the
benefit of and be binding upon the parties hereto and the respective successors
and assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 5.07 COUNTERPART. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all together will
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement will be deemed to be an original and will have the full force and
effect of an original executed copy.
SECTION 5.08 SEVERABILITY. The provisions of this Agreement will be
deemed severable and the invalidity or unenforceability of any provision hereof
will not affect the validity or enforceability of any of the other provisions
hereof. If any provisions of this Agreement, or the application thereof to any
person or any circumstance, is illegal, invalid or unenforceable, (a) a suitable
and equitable provision will be substituted therefor in order to carry out, so
far as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision, and (b) the remainder of this Agreement and the
application of such provision to other persons or circumstances will not be
affected by such invalidity or unenforceability, nor will such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
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SECTION 5.09 HEADINGS. The Article and Section headings are provided
herein for convenience of reference only and do not constitute a part of this
Agreement and will not be deemed to limit or otherwise affect any of the
provisions hereof.
SECTION 5.10 GOVERNING LAW.
(a) This Agreement will be deemed to be made in and in all respects
will be interpreted, construed and governed by and in accordance with the law of
the State of New York, without regard to the conflict of law principles thereof.
(b) EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS
TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE
FEDERAL COURTS SITTING IN THE STATE OF NEW YORK IN ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE PARTIES AGREES THAT
ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE
LITIGATED EXCLUSIVELY IN ANY SUCH STATE OR, TO THE EXTENT PERMITTED BY LAW,
FEDERAL COURT THAT SITS IN THE COUNTY OF NEW YORK, AND ACCORDINGLY, EACH PARTY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. EACH
PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 5.05. NOTHING IN THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.
(c) EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH OF THE PARTIES (1) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.10(c).
SECTION 5.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All terms,
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, will
survive the Closing and the delivery of the shares of REDOX Common Stock to be
issued hereunder at the Closing for a period of one year after Closing,
regardless of any investigation made by or on behalf of any of the parties
hereto.
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SECTION 5.12 ASSIGNABILITY. This Agreement will not be assignable by
operation of law or otherwise and any attempted assignment of this Agreement in
violation of this subsection will be void ab initio.
SECTION 5.13 AMENDMENT. This Agreement may be amended with the approval
of the Midnight Shareholders and the boards of directors of each of REDOX and
Midnight at any time. This Agreement may not be amended except by an instrument,
in writing, signed on behalf of each of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
REDOX TECHNOLOGY CORPORATION
BY: /s/ IRA MILLER
-------------------------------------
NAME: IRA MILLER
TITLE: CHIEF EXECUTIVE OFFICER
MIDNIGHT AUTO HOLDINGS, INC.
BY: /s/ NICHOLAS COCCO
-------------------------------------
NAME: NICHOLAS COCCO
TITLE: CHIEF EXECUTIVE OFFICER
[SIGNATURE PAGE 1 OF 2]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in a manner legally binding upon them as of the date first above
written.
MIDNIGHT SHAREHOLDERS:
/s/ RICHARD KOHL
-----------------------------------------
RICHARD KOHL
/s/ DENNIS SPENCER, JR.
-----------------------------------------
DENNIS SPENCER, JR.
/s/ NORMA J. KOHL
-----------------------------------------
NORMA J. KOHL
/s/ TOM OPALEWSKI
-----------------------------------------
TOM OPALEWSKI
/s/ BOB STANGLEWICZ
-----------------------------------------
BOB STANGLEWICZ
RIVER STAR LLC
BY: /s/ TERRY L. COCCO
-------------------------------------
NAME: TERRY L. COCCO
TITLE: MANAGER/ MEMBER
/s/ CHRISTIAN COTTAM
-----------------------------------------
CHRISTIAN COTTAM
/s/ TIMOTHY ANDERSON
-----------------------------------------
TIMOTHY ANDERSON
/s/ ARTHUR VEENSTRA
-----------------------------------------
ARTHUR VEENSTRA
/s/ NICHOLAS COCCO
-----------------------------------------
NICHOLAS A. COCCO
/s/ RONALD EDWARDS
-----------------------------------------
RONALD EDWARDS
[SIGNATURE PAGE 2 OF 2]
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SCHEDULE A
- ---------------------- ---------------------------- -------------------------------------
Name Number of Shares of Common Number of shares of Common Stock of
Stock of Midnight Auto Redox to be issued to Midnight
Holdings, Inc. Pre-Closing Shareholders
- ---------------------- ---------------------------- -------------------------------------
Richard Kohl 540 89,397,270
- ---------------------- ---------------------------- -------------------------------------
Dennis Spencer 540 89,397,270
- ---------------------- ---------------------------- -------------------------------------
Norma J. Kohl 393 65,061,347
- ---------------------- ---------------------------- -------------------------------------
Tom Opalewski 16 2,648,808
- ---------------------- ---------------------------- -------------------------------------
Bob Stanglewicz 91 15,065,096
- ---------------------- ---------------------------- -------------------------------------
River Star, LLC 500 82,775,250
- ---------------------- ---------------------------- -------------------------------------
Christian Cottam 60 9,933,030
- ---------------------- ---------------------------- -------------------------------------
Timothy Anderson 20 3,311,010
- ---------------------- ---------------------------- -------------------------------------
Arthur Veenstra 20 3,311,010
- ---------------------- ---------------------------- -------------------------------------
Nicholas A. Cocco 40 6,622,020
- ---------------------- ---------------------------- -------------------------------------
Ronald Edwards 40 6,622,020
- ---------------------- ---------------------------- -------------------------------------
TOTAL: 2,260 374,144,130
- ---------------------- ---------------------------- -------------------------------------
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SCHEDULE B
ISSUED AND OUTSTANDING CAPITALIZATION TABLE POST-CLOSING
- ------------------------------------- --------------------------------- -----------------------------------------
Name Number of Shares of Common Number of Shares of Common Stock After
Stock Immediately after Closing Increase in Number of Shares Authorized
- ------------------------------------- --------------------------------- -----------------------------------------
Shareholders of REDOX prior to 84,593,370 84,593,370
Closing
- ------------------------------------- --------------------------------- -----------------------------------------
Issuance of Common Stock to former 8,962,500 8,962,500
Directors
- ------------------------------------- --------------------------------- -----------------------------------------
Richard Kohl 61,274,261 89,397,270
- ------------------------------------- --------------------------------- -----------------------------------------
Dennis Spencer 61,274,261 89,397,270
- ------------------------------------- --------------------------------- -----------------------------------------
Norma J. Kohl 44,594,046 65,061,347
- ------------------------------------- --------------------------------- -----------------------------------------
Tom Opalewski 1,815,534 2,648,808
- ------------------------------------- --------------------------------- -----------------------------------------
Bob Stanglewicz 10,325,848 15,065,096
- ------------------------------------- --------------------------------- -----------------------------------------
River Star, LLC 56,735,427 82,775,250
- ------------------------------------- --------------------------------- -----------------------------------------
Christian Cottam 6,808,251 9,933,030
- ------------------------------------- --------------------------------- -----------------------------------------
Timothy Anderson 2,269,417 3,311,010
- ------------------------------------- --------------------------------- -----------------------------------------
Arthur Veenstra 2,269,417 3,311,010
- ------------------------------------- --------------------------------- -----------------------------------------
Nicholas A. Cocco 4,538,834 6,622,020
- ------------------------------------- --------------------------------- -----------------------------------------
Ronald Edwards 4,538,834 6,622,020
- ------------------------------------- --------------------------------- -----------------------------------------
Total: 350,000,000 467,700,000
- ------------------------------------- --------------------------------- -----------------------------------------
SCHEDULE C
- --------------------------------------------------- ---------------------------------------------------------
NAME NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
OF WARRANT
- --------------------------------------------------- ---------------------------------------------------------
The Scott Group 125,000
- --------------------------------------------------- ---------------------------------------------------------
Ocean Avenue Advisors 125,000
- --------------------------------------------------- ---------------------------------------------------------
Riverstar, LLC 100,000
- --------------------------------------------------- ---------------------------------------------------------
Total: 350,000
- --------------------------------------------------- ---------------------------------------------------------
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