AGREEMENT AND PLAN OF MERGER AMONG PATRIOT SCIENTIFIC CORPORATION, PTSC ACQUISITION 1 CORP., A WHOLLY OWNED DIRECT SUBSIDIARY OF PATRIOT SCIENTIFIC CORPORATION, CROSSFLO SYSTEMS, INC., AND THE CROSSFLO PRINCIPAL OFFICERS August 4, 2008
Exhibit 99.1
AMONG
PATRIOT
SCIENTIFIC CORPORATION,
PTSC
ACQUISITION 1 CORP.,
A
WHOLLY OWNED DIRECT SUBSIDIARY OF PATRIOT SCIENTIFIC CORPORATION,
CROSSFLO
SYSTEMS, INC.,
AND
THE CROSSFLO PRINCIPAL OFFICERS
August
4, 2008
TABLE
OF CONTENTS
TABLE
OF CONTENTS
TABLE
OF CONTENTS
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Page
No.
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| Assignment |
51
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| Expenses |
51
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| Severability |
51
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| Letter of Intent |
51
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| Amendment |
51
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EXHIBITS
|
Form
of Exchange Agent Instructions
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Exhibit A
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|
Form
of Letter of Transmittal
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Exhibit B
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Form
of Escrow Agreement
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Exhibit C
|
|
Form
of Investment Representation Certificate
|
Exhibit D
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SCHEDULES
|
Merger
Consideration Allocation per Crossflo Stockholder
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Schedule 1
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|
Calculation
and Allocation of Closing Merger Consideration
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Schedule
1A
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Calculation
of Escrow Merger Consideration
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Schedule
1B
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|
Required
Consents
|
Schedule
6.3(e)
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This
Agreement and Plan of Merger (this “Agreement”) is made and entered into as of
August 4, 2008, by and among Patriot Scientific Corporation, a Delaware
corporation (“Patriot” or “Buyer”), PTSC ACQUISITION 1 CORP., a California
corporation and a wholly-owned subsidiary of Patriot (“Subcorp”), Crossflo
Systems, Inc., a California corporation (“Crossflo”), Xxxxxx Xxxx, an individual
resident in the State of California, Xxxxx Xxxxxx, an individual resident in the
State of California, and Xxxxxxx Xxxxxxxxxxx, M.D., an individual resident in
the State of California, (collectively, the “Crossflo Principal
Officers”).
PRELIMINARY
STATEMENTS
WHEREAS,
the respective Boards of Directors of Patriot, Subcorp and Crossflo have
determined the merger of Subcorp with and into Crossflo, in the manner
contemplated herein (the “Merger”), to be desirable and in the best interests of
their respective stockholders and, by resolutions duly adopted, have approved
and adopted this Agreement; and
WHEREAS,
Patriot, Subcorp, Crossflo and the Crossflo Principal Officers desire to make
certain representations, warranties, covenants and agreements in connection with
such merger and also to prescribe various conditions to the merger.
NOW,
THEREFORE, in consideration of these premises and the mutual and dependent
promises hereinafter set forth, the parties hereto agree as
follows:
ARTICLE
I
THE
MERGER
1.1 The
Merger. Upon
the terms and subject to the conditions set forth in this Agreement, and in
accordance with the Delaware General Corporation Law (the “DGCL”) and the
California General Corporation Law (the “CGCL”), Subcorp shall be merged with
and into Crossflo at the Effective Time. As a result of the Merger, the separate
corporate existence of Subcorp shall cease and Crossflo shall continue its
existence under the laws of the State of California as a wholly-owned subsidiary
of Patriot. Crossflo, in its capacity as the corporation surviving the Merger,
is hereinafter sometimes referred to as the “Surviving
Corporation.”
1.2 Effective
Time. As
promptly as possible on the Closing Date, the parties shall cause the Merger to
be consummated by filing with the Secretary of State of the State of California
(the “California Secretary of State”) this Agreement or a form of Agreement
summarizing this Agreement and an officer’s certificate from Patriot and
Crossflo (collectively, the “California Merger Documents”) in such form as is
required by and executed in accordance with the CGCL. The Merger
shall become effective (the “Effective Time”) when the California Merger
Documents have been filed with the California Secretary of State or at such
later time as shall be agreed upon by Patriot and Crossflo and specified in the
California Merger Documents. Prior to the filings referred to in this
Section 1.2, a closing (the “Closing”) shall be held at the offices of
Patriot’s counsel, Xxxx, Forward, Xxxxxxxx & Scripps LLP (“Xxxx
Xxxxxxx”), 000 Xxxx Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx
00000, or such other place as the parties may agree on, as soon as practicable
(but in any event within ten business days) following the date upon which all
conditions set forth in Article VI that are capable of being satisfied
prior to the Closing have been satisfied or waived, or at such other date as
Patriot and Crossflo may agree; provided that the conditions set forth in
Article VI have been satisfied or waived at or prior to such
date. The date on which the Closing takes place is referred to herein
as the “Closing Date.” For all purposes, the Closing shall be
effective as of 12:01 a.m. on the Closing Date.
1
1.3 Effects of the
Merger. At
and after the Effective Time, the separate existence of Subcorp will cease, and
Crossflo as the Surviving Corporation and successor shall succeed to all the
rights and property of Subcorp and Crossflo, and shall be subject to all the
debts and liabilities of Subcorp and Crossflo except as otherwise expressly
provided in Section 9.10 of this Agreement.
1.4 Articles of Incorporation
and Bylaws. The
(a) Articles of Incorporation of Subcorp, as in effect immediately prior to
the Effective Time, shall be the Articles of Incorporation of the Surviving
Corporation in the Merger and (b) Bylaws of Subcorp in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation; in
each case, until amended in accordance with the CGCL.
1.5 Directors and Officers of
the Surviving Corporation. From
and after the Effective Time, the officers of Subcorp shall be the officers of
the Surviving Corporation and the directors of Subcorp shall be the directors of
the Surviving Corporation, in each case, until their respective successors are
duly elected and qualified. On the Closing Date, Crossflo shall
deliver to Patriot evidence satisfactory to Patriot of the resignations of the
directors of Crossflo and any Subsidiary, with such resignations to be effective
as of the Effective Time.
1.6 Tax Consequences of the
Merger. The
parties hereto acknowledge and agree that the Merger will be treated as a
taxable transaction for federal and state tax purposes, and agree not to take
any action or file any reports that would be inconsistent with treating the
Merger as a taxable transaction for federal and state tax purposes.
2
ARTICLE
II
CONVERSION
OF SECURITIES
2.1 Merger Consideration;
Conversion of Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Patriot, Subcorp, or Crossflo or
their respective stockholders, each share of Crossflo Capital Stock issued and
outstanding immediately prior to the Effective Time (exclusive of Dissenting
Shares) shall be converted into, and shall represent the right to receive, that
portion of the Merger Consideration (as that term is defined below) to which
such share is entitled. The Merger Consideration shall consist of the
sum of the Initial Cash Consideration (as defined below) and the Initial Stock
Consideration (as defined below) less (i) payments made by Buyer to holders of
Crossflo’s Secured Convertible Debt (including Buyer) at or before Closing, (ii)
the amount of any payment made by Crossflo or by Buyer on behalf of Crossflo to
any broker, finder, underwriter, or investment banker related to the transaction
described in this Agreement, and (iii) the Estimated Transaction Expenses as
described in Section 9.10. The Initial Cash Consideration shall
consist of $2,600,000. The initial Stock Consideration shall consist of
$7,400,000 in Patriot Common Stock, the value of which shall be based on the
average closing price of Patriot Common Stock on The Electronic Bulletin Board
as reported by NASDAQ over the ten trading days immediately preceding the
Closing.
2.2 Allocation and Disbursement
of Merger Consideration. The
Merger Consideration shall be allocated and distributed as set forth on
Schedule 1, with the amounts set forth on such Schedule 1 calculated as
follows, as more specifically set forth on Schedules 1A and
1B:
(a) Deposit to
Escrow. At the Closing, ten percent (10%) of
the Merger Consideration consisting of shares of Patriot Common Stock
(valued as provided in Section 2.1 above) (the “Escrow Merger Consideration”)
shall be paid by Patriot to the Escrow Agent, for deposit into the Escrow
Account, as set forth in Section 2.5.
(b) Merger Consideration Payable
at Closing. At the Closing, the Merger Consideration other
than the Escrow Merger Consideration (the “Closing Merger Consideration”) shall
be allocated and distributed to the holders of each Series of Preferred Stock of
Crossflo. Such Closing Merger Consideration shall be calculated and
allocated among the holders of such Series of Preferred Stock as set forth on
Schedule 1A and shall be paid by delivery of cash and certificates
representing that number of Patriot Common Shares to which each such holder is
entitled. Such delivery shall be made to the Exchange Agent for
disbursement as set forth in Section 2.4.
(c) Conversion of Subcorp
Stock. Each share of capital stock of Subcorp outstanding at
the Effective Time shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock of the Surviving
Corporation.
2.3 Fractional Shares;
Adjustments.
(a) No
certificates for fractional Patriot Common Shares shall be issued as a result of
the conversion provided for in Section 2.1, and such fractional share
interests will not entitle the owner thereof to vote or have any rights of a
holder of Patriot Common Shares.
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(b) In lieu
of any such fractional Patriot Common Shares, the holder of a certificate or
certificates (the “Certificates”) that immediately prior to the Effective Time
represented outstanding shares of Crossflo Capital Stock (each, a “Crossflo
Stockholder”) whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 2.1, upon presentation of such fractional
interest represented by an appropriate Certificate for Crossflo Capital Stock to
the Exchange Agent pursuant to this Section 2.3, shall be entitled to
receive a cash payment therefor in an amount equal to the value of such
fractional interest. Such payment with respect to fractional shares
is intended to avoid the expense and inconvenience of issuing fractional shares
and to provide a mechanical rounding off of, and is not a separately bargained
for, consideration. If more than one Certificate shall be surrendered
for the account of the same holder, the number of shares of Crossflo Capital
Stock for which Certificates have been surrendered shall be appropriately
adjusted to provide to the Crossflo Stockholders the same economic effect as
contemplated by this Agreement. The fractional share interests of
each Crossflo Stockholder will be aggregated, and no Crossflo Stockholder will
receive cash in an amount greater than the value of one full Patriot Common
Share for such fractional share interest.
2.4 Exchange of
Certificates.
(a) Exchange at
Closing. At the Closing, each Crossflo Principal Officer and
any other Crossflo Stockholder who participates in the Closing shall deliver the
Certificate or Certificates representing such Crossflo Stockholder’s shares of
Crossflo Capital Stock (or affidavits of lost certificates in lieu thereof),
duly endorsed in blank or accompanied by stock powers duly executed in blank,
and in exchange for such delivery shall receive the Closing Merger Consideration
(as determined pursuant to Section 2.2) to which such Crossflo Stockholder
is entitled, payable by delivery of a stock certificate naming such Crossflo
Stockholder as the holder thereof, subject to (b) below.
(b) Exchange
Agent. As of the Effective Time, Patriot shall deposit with a
bank, trust company or such other exchange agent as may be designated by Patriot
as of the date of this Agreement (the “Exchange Agent”) for the benefit of
Crossflo Stockholders other than the Crossflo Stockholders who participate in
the Closing, for exchange in accordance with this Section 2.4, the Merger
Consideration not paid to the Crossflo Stockholders at the Closing and not
deposited into the Escrow Account pursuant to Section 2.5 (together with
any dividends or distributions with respect thereto, the “Exchange Fund”)
together with any additional cash needed to fulfill the requirements of
Section 2.3 for fractional shares. The parties shall deliver
instructions to the Exchange Agent substantially in the form attached as
Exhibit A (the “Exchange Agent Instructions”).
(c) Exchange
Procedures. As soon as practicable after the Effective Time,
the Exchange Agent shall mail to each holder of record of a Certificate, a
letter of transmittal and instructions for effecting the surrender of the
Certificates in exchange for certificates representing such number of Patriot
Common Shares as such Crossflo Stockholder is entitled, substantially in the
form attached as Exhibit B (the “Letter of Transmittal”). Upon
surrender of a Certificate for cancellation to the Exchange Agent, together with
a duly executed Letter of Transmittal, the holder of such Certificate shall be
entitled to receive in exchange therefor (i) a certificate or certificates
representing that whole number of Patriot Common Shares which such holder has
the right to receive pursuant to Section 2.1 in such denominations and
registered in such names as such holder may request, and (ii) payment by
check in U.S. dollars representing the amount of cash in lieu of fractional
shares, if any, and unpaid dividends and distributions, if any, which
such holder has the right
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to
receive pursuant to the provisions of this Article II, after giving effect
to any required withholding tax. The shares represented by a
Certificate so surrendered shall forthwith be cancelled. No interest
will be paid or accrued on the cash in lieu of fractional shares, if any, and
unpaid dividends and distributions, if any, payable to holders of shares of
Crossflo Capital Stock. In the event of a transfer of ownership of
shares of Crossflo Capital Stock that is not registered on the transfer records
of Crossflo, a certificate representing the proper number of Patriot Common
Shares, together with a check for the cash to be paid in lieu of fractional
shares, if any, and unpaid dividends and distributions, if any, may be issued to
such transferee if the Certificate representing such shares of Crossflo Capital
Stock held by such transferee is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and to evidence that
any applicable stock transfer taxes have been paid. Until surrendered
as contemplated by this Section 2.4, each Certificate shall be deemed at
any time after the Effective Time to represent only the right to receive upon
surrender a certificate representing Patriot Common Shares, and cash in lieu of
fractional shares, if any, and unpaid dividends and distributions, if any, as
provided in this Article II. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by Patriot, the posting by such person of a bond in such reasonable
amount as Patriot may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will deliver in
exchange for such lost, stolen or destroyed Certificate, a certificate
representing the proper number of Patriot Common Shares, together with a check
for the cash to be paid in lieu of fractional shares, if any, with respect to
the shares of Crossflo Capital Stock formerly represented thereby, and unpaid
dividends and distributions on Patriot Common Shares, if any, as provided in
this Article II.
(d) Distributions with Respect
to Unexchanged Shares. Notwithstanding any other provisions of
this Agreement, no dividends or other distributions declared or made after the
Effective Time with respect to Patriot Common Shares having a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate,
and no cash payment in lieu of fractional shares shall be paid to any such
holder, until the holder shall surrender such Certificate as provided in this
Section 2.4. Subject to the effect of all applicable
constitutions, laws, statutes, treaties, orders, rules, regulations, ordinances,
notices, approvals, policies or guidelines promulgated, or judgments, decisions,
decrees, or orders of any Governmental Authority (collectively, “Applicable
Laws”), following surrender of any such Certificate, there shall be paid to the
holder of the certificates representing whole Patriot Common Shares issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole Patriot Common
Shares and not paid, less the amount of any withholding taxes that may be
required thereon, and (ii) at the appropriate payment date subsequent to
surrender, the amount of dividends or other distributions with a record date
after the Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole Patriot Common Shares, less the
amount of any withholding taxes which may be required thereon.
(e) No Further Ownership Rights
in Crossflo Capital Stock. All Merger Consideration issued
and/or paid upon surrender of Certificates in accordance with the terms hereof
(including any cash paid pursuant to this Article II) shall be deemed to
have been issued and/or paid in full satisfaction of all rights pertaining to
such shares of Crossflo Capital Stock represented thereby, and, as of the
Effective Time, the stock transfer books of Crossflo shall be closed and there
shall be no further registration of transfers on the stock transfer books of
Crossflo of shares of Crossflo Capital Stock outstanding immediately prior to
the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for any reason, they shall be cancelled
and exchanged as provided in this Section 2.4.
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(f) Termination of Exchange
Fund. Any portion of the Exchange Fund that remains
undistributed to Crossflo Stockholders six months after the date of the mailing
required by Section 2.4(c) shall be delivered to Patriot, and holders of
Certificates who have not theretofore complied with this Section 2.4 shall
thereafter look only to Patriot for payment of any claim to Patriot Common
Shares, or cash in lieu of fractional shares thereof, or dividends or
distributions, if any, in respect thereof.
(g) No
Liability. None of Patriot, the Surviving Corporation or the
Exchange Agent shall be liable to any person in respect of any shares of
Crossflo Capital Stock (or dividends or distributions with respect thereto) or
cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any
Certificates shall not have been surrendered prior to seven years after the
Effective Time or immediately prior to such earlier date on which any cash in
lieu of fractional shares or any dividends or distributions with respect to
whole shares of Crossflo Capital Stock in respect of such Certificate would
otherwise escheat to or become the property of any Governmental Authority, any
such cash, dividends or distributions in respect of such Certificate shall, to
the extent permitted by Applicable Law, become the property of Patriot, free and
clear of all claims or interest of any person previously entitled
thereto. For purposes of this Agreement, “Governmental Authority”
means any (A) nation, region, state, county, city, town, village, district
or other jurisdiction, (B) federal, state, local, municipal, foreign or
other government, (C) federal, state, local municipal, foreign or
multi-national court, arbitral tribunal, administrative agency or commission,
(D) other governmental, quasi-governmental, public, or regulatory body,
agency, instrumentality or authority of any nature, (E) multi-national
organization, (F) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, policy, regulatory or taxing
authority or power of any nature or (G) official of any of the
foregoing.
(h) Investment of Exchange
Fund. The Exchange Agent shall invest any cash included in the
Exchange Fund as directed by Patriot, on a daily basis. Any interest
and other income resulting from such investments shall be paid to Patriot upon
termination of the Exchange Fund pursuant to Section 2.4(f); provided that
Patriot will bear all risk of loss as a result of such investments.
(i) Withholding
Rights. Each of the Surviving Corporation and Patriot shall be
entitled to deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder of shares of Crossflo Capital Stock,
such amounts as it is required to deduct and withhold with respect to the making
of such payment under the United States Internal Revenue Code of 1986, as
amended (the “Code”) or any provision of state, local or foreign Tax
law. To the extent that amounts are so withheld by the Surviving
Corporation or Patriot, as the case may be, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Crossflo Capital Stock in respect of which such deduction and
withholding was made by the Surviving Corporation or Patriot, as the case may
be. Any Tax withheld by Patriot or the Surviving Corporation shall be
paid by Patriot or the Surviving Corporation to the appropriate Governmental
Authority when due in accordance with Applicable Law and Patriot or the
Surviving Corporation shall within 30 days of the payment of such Tax deliver to
the holder of the shares of Crossflo Capital Stock evidence reasonably
satisfactory to such holder that payment was duly remitted to the appropriate
Governmental Authority.
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(j) Restrictive
Legend. Each certificate evidencing Patriot Common Shares
shall bear the following legend in conspicuous type:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE
SECURITIES LAW. THE SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION WITHOUT AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION OR QUALIFICATION
IS NOT REQUIRED.
2.5 Escrow
Account.
(a) Escrow
Agreement. On or prior to the Closing Date, Patriot and
Crossflo shall establish an escrow at Union Bank of California (the “Escrow
Account”), by the execution and delivery of an Escrow Agreement substantially in
the form attached as Exhibit C hereto (the “Escrow
Agreement”). The escrow shall be subject to a $50,000
basket.
(b) Deposit of Escrow Merger
Consideration. On the Closing Date, Patriot shall pay to the
Escrow Agent, for immediate deposit into the Escrow Account, the Escrow Merger
Consideration, by delivery of one or more certificates, duly endorsed in blank,
representing that number of Patriot Common Shares comprising the Escrow Merger
Consideration, calculated as set forth on Schedule 1B.
(c) Disbursement of Escrow
Merger Xxxxxxxxxxxxx.Xxx year following the Closing Date, the shares of
Patriot Common Stock held as the Escrow Merger Consideration shall be disbursed
in the following manner:
(i) First,
shares of Patriot Common Stock equal in value (based on the average closing
price of Patriot Common Stock over the ten trading days immediately prior to the
first anniversary of the Closing Date) to (a) transaction expenses incurred by
Crossflo prior to the Closing Date in excess of Estimated Transaction Expenses
plus (b) damages incurred by Patriot as a consequence of one or more breaches of
Crossflo’s representations, warranties, and covenants set forth herein and
recoverable by Patriot in accordance with the Escrow Agreement (the “Patriot
Escrow Amount”) shall be disbursed to Patriot.
(ii) Next,
shares of Patriot Common Stock equal in value (based on the average closing
price of Patriot Common Stock over the ten trading days immediately prior to the
first anniversary of the Closing Date) to (A) the value of the shares of Patriot
Common Stock initially held as Escrow Merger Consideration (based on the average
closing price of Patriot Common Stock on The Electronic Bulletin Board as
reported by NASDAQ over the ten trading days immediately preceding the Closing)
minus (B) the shares issued in the Patriot Escrow Amount (based on the average
closing price of Patriot Common Stock over the ten trading days immediately
prior to the first anniversary of the Closing Date), shall be distributed to the
Crossflo Stockholders in accordance with the terms of the Escrow
Agreement. If an adequate number of shares to make such a
disbursement do not remain in the Escrow Account, then the entire amount
remaining in the Escrow Account shall be disbursed to Crossflo, and Patriot make
up the difference in cash and shall distribute this amount to the Crossflo
Stockholders.
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(iii) Lastly,
any shares remaining in the Escrow Account shall be returned to
Patriot.
2.6 Dissenting
Shares. Notwithstanding
anything in this Agreement to the contrary, shares of Crossflo Capital Stock
outstanding immediately prior to the Effective Time and held by a Crossflo
Stockholder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such shares in accordance with
Sections 1300-1312 of the CGCL, if such Sections 1300-1312 provide for
appraisal rights for such shares in the Merger (“Dissenting Shares”), shall not
be converted into the right to receive the Merger Consideration as provided in
Section 2.1(a) and shall instead be converted into the right to receive
payment of the appraised value of such Dissenting Shares in exchange for the
Dissenting Shares in accordance with the provisions of Sections 1300-1312
unless and until such holder fails to perfect or withdraws or otherwise loses
such holder’s right to appraisal and payment under the CGCL. If,
after the Effective Time, any such holder fails to perfect or withdraws or loses
such holder’s right to appraisal, such Dissenting Shares shall thereupon be
treated as if they had been converted as of the Effective Time into the right to
receive the Merger Consideration, if any, to which such holder is entitled,
without interest or dividends thereon, upon the surrender in the manner provided
in Section 2.4 of the Certificate(s) which formerly represented shares
of Crossflo Capital Stock. Crossflo shall give Patriot prompt notice
of any demands received by Crossflo for appraisal of shares of Crossflo Capital
Stock and, prior to the Effective Time, Patriot shall have the right to
reasonably participate with Crossflo in the handling of all negotiations and
proceedings with respect to such demands. Prior to the Effective
Time, Crossflo shall not, except with the prior written consent of Patriot, not
to be unreasonably withheld, make any payment with respect to, or settle or
offer to settle, any such demands.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PATRIOT AND SUBCORP
In order
to induce Crossflo and the Crossflo Principal Officers to enter into this
Agreement, Patriot and Subcorp, jointly and severally, hereby represent and
warrant to Crossflo and the Crossflo Principal Officers that the statements
contained in this Article III are true, correct and complete, except as
otherwise expressly set forth in this Article III or in the disclosure
schedule to be delivered by Patriot to Crossflo and incorporated herein by
reference (as dated the date hereof, and as may be amended and supplemented as
of the Closing Date, the “Patriot Disclosure Schedule”), as of the date hereof
and as of the Closing Date unless another date is expressly stated below or in
the Patriot Disclosure Schedule.
3.1 Organization and
Standing. Each
of Patriot, Subcorp and each other subsidiary of Patriot is a corporation duly
organized, validly existing and in good standing under the laws
of their respective states of incorporation with full corporate power
and authority to own, lease, use and operate their respective properties and to
conduct their respective businesses as and where now owned, leased, used,
operated and conducted. Each of Patriot, Subcorp and each other
subsidiary of Patriot is duly qualified to do business and in good standing in
each jurisdiction in which the nature of the business conducted by it or the
property it owns, leases or operates, requires it to so qualify, except where
the failure to be so qualified or in good standing in such jurisdiction would
not have a Material Adverse Effect on Patriot and its subsidiaries taken as a
whole. Patriot is not in default in the performance, observance or
fulfillment of any provision of the Patriot Certificate of Incorporation, as
amended (the “Patriot Certificate”), or the Patriot Amended and Restated Bylaws,
as amended, as in effect on the date hereof (the “Patriot Bylaws”), and Subcorp
and each other subsidiary of Patriot is not in default in the performance,
observance or fulfillment of any provisions of their respective Certificate of
Incorporation or Bylaws. Patriot has heretofore furnished to Crossflo
complete and correct copies of the Patriot Certificate and the Patriot
Bylaws and the Articles of Incorporation and Bylaws of Subcorp and the governing
documents of each other subsidiary of Patriot.
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3.2 Corporate Power and
Authority. Each
of Patriot and Subcorp has all requisite corporate power and authority to enter
into and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Patriot and Subcorp have been duly
authorized by all necessary corporate action on the part of each of Patriot and
Subcorp. This Agreement has been duly executed and delivered by each
of Patriot and Subcorp, and constitutes the legal, valid and binding obligation
of each of Patriot and Subcorp enforceable against each of them in accordance
with its terms, except to the extent that such enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors’ rights generally or by general equitable
principles.
3.3 Conflicts; Consents and
Approvals. Except
as set forth in Section 3.3 in the Patriot Disclosure Schedule, neither the
execution and delivery of this Agreement by Patriot or Subcorp nor the
consummation of the transactions contemplated hereby or thereby
will:
(a) conflict
with, or result in a breach of any provision of, the Patriot Certificate or
the Patriot Bylaws, the Subcorp Articles of Incorporation or Bylaws or the
governing documents of any other subsidiary of Patriot;
(b) materially
violate, or conflict with, or result in a material breach of any provision of,
or constitute a material default (or an event that, with the giving of notice,
the passage of time or otherwise, would constitute a default) under, or entitle
any party (with the giving of notice, the passage of time or otherwise) to
terminate, accelerate, modify or call a material default under, or result in the
creation of any material Encumbrance upon any of the properties or assets of
Patriot or any of its subsidiaries under, any of the terms, conditions or
provisions of any material note, bond, mortgage, indenture, deed of trust,
license, contract, undertaking, agreement, lease or other instrument or
obligation to which Patriot or any of its subsidiaries is a party (for purposes
of this Agreement, “Encumbrance” means any charge, claim, mortgage, servitude,
easement, right of way, equitable interest, lease or other possessory interest,
conditional sale or other title retention arrangement, lien, pledge, security
interest, preference, priority, right of first refusal or similar
restriction);
(c) materially
violate any (i) order, writ, injunction, decree, statute, ruling,
assessment, or arbitration or award of any Governmental Authority; or
(ii) Applicable Laws relating to Patriot or any of its subsidiaries or
their respective properties or assets; or
(d) require
any action or consent or approval of, or review by, or registration or filing by
Patriot or any of its affiliates with, any third party or any Governmental
Authority, other than registrations or other actions required under federal and
state securities laws as are contemplated by this Agreement.
9
3.4 Subcorp. Subcorp
was formed solely for the purpose of engaging in the transactions contemplated
by this Agreement. Subcorp has not, and at the Effective Time will not have,
engaged in any activities or incurred any obligations or liabilities, except the
activities relating to the transactions contemplated by this Agreement and
obligations and liabilities incurred in connection with those activities and
with the transactions contemplated by this Agreement.
3.5 Actions. There
is no Action against Patriot and Subcorp which questions the validity of this
Agreement or the Merger or any action taken or to be taken pursuant hereto or
pursuant to the Merger. For purposes of this Agreement, “Action”
means any action, arbitration, audit, examination, suit, proceeding, hearing or
litigation, whether formal or informal, and whether public or private,
commenced, brought, conducted or heard by or before, pending or threatened, or
otherwise. Section 3.5 in the Patriot Disclosure
Schedule sets forth each instance in which Patriot or a subsidiary of
Patriot is subject to any Action pending or, to the Knowledge of Patriot,
threatened against Patriot. Since January 1, 2008, neither
Patriot nor any of its subsidiaries has been subject to any order, writ,
injunction or decree relating to its method of doing business or its
relationship with past, existing or future users or purchasers of any goods or
services.
3.6 Financial
Ability. Patriot
and Subcorp at the Effective Time will have a sufficient number of Patriot
Common Shares and sufficient cash funds to pay the Merger Consideration, and to
pay all related fees and expenses.
3.7 Capitalization of Patriot
and Subcorp.
(a) The
authorized capital stock of Patriot consists of 500,000,000 common shares (the
“Patriot Common Stock”) and 100,000,000 preferred shares (the “Patriot Preferred
Stock”). At the date of this Agreement, (i) 387,488,755 shares
of Patriot Common Stock are issued and outstanding, (ii) 8,710,000 shares
of Patriot Common Stock are reserved for issuance upon the exercise or
conversion of options, warrants or convertible securities granted or issuable by
Patriot, and (iii) no shares of Preferred Stock are issued and
outstanding. The Patriot Common Stock and the Patriot Preferred Stock
are referred to herein collectively as the “Patriot Capital
Stock.” Each outstanding share of Patriot Capital Stock is duly
authorized and validly issued, fully paid and nonassessable, and has not been
issued in violation of any preemptive or similar rights. The issuance
and sale of all of the shares of Patriot Capital Stock described in this
Section 3.7(a) have been in compliance in all material respects with
applicable federal and state securities laws.
(b) As of the
date hereof, other than as set forth in clause (a)(ii) above or in Section
3.7(b) in the Patriot Disclosure Schedule, there are no outstanding
subscriptions, options, warrants, puts, calls, agreements, understandings,
claims or other commitments or rights of any type relating to the issuance,
sale, repurchase or transfer by Patriot of any securities of Patriot, nor are
there outstanding any securities which are convertible into or exchangeable for
any shares of Patriot Capital Stock, and Patriot has no obligation of any kind
to issue any additional securities or to pay for or repurchase any securities of
Patriot or any other predecessor.
(c) Except as
set forth in Section 3.7(c) in the Patriot Disclosure Schedule, Patriot has not
agreed to register any securities of Patriot under the Securities Act or under
any applicable state securities law or granted registration rights to any person
or entity (other than agreements with respect to registration rights that are no
longer in effect as of the date of this Agreement); complete and correct copies
of such agreements have previously provided to Crossflo.
10
(d) Subcorp’s
authorized capital stock consists solely of 1,000 shares of Subcorp Common
Stock, of which, as of the date hereof, 100 were issued and outstanding and none
were reserved for issuance. As of the date hereof, all of the outstanding shares
of Subcorp Common Stock are owned free and clear of any Encumbrances by
Patriot.
3.8 Subsidiaries.
(a) Patriot
does not own, directly or indirectly, any equity or other ownership interest in
any corporation, partnership, joint venture or other entity or enterprise,
except for the subsidiaries set forth in Section 3.8(a) in the Patriot
Disclosure Schedule. Except as set forth in Section 3.8(a) in the
Patriot Disclosure Schedule, Patriot is not subject to any obligation or
requirement to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any subsidiary or any other
person. Except as set forth in Section 3.8(a) in the
Patriot Disclosure Schedule, Patriot owns, directly or indirectly, 100% of the
capital stock (or other ownership interests having by their terms ordinary
voting power to elect a majority of directors or others performing similar
functions) of each of its subsidiaries. Each of the outstanding
shares of capital stock or other equity interests of the subsidiaries of Patriot
is (in so far as is applicable) duly authorized, validly issued, fully paid and
nonassessable, and is owned, directly or indirectly, by Patriot free and clear
of all Encumbrances.
(b) The
following information for each subsidiary of Patriot is set forth in
Section 3.8(b) in the Patriot Disclosure Schedule, as applicable:
(i) its name and jurisdiction of incorporation or organization;
(ii) its authorized capital stock or capital; and (iii) the number of
issued and outstanding shares of capital stock or capital and the record (legal)
or beneficial owner(s) thereof. Other than as set forth in
Schedule 3.8(b) in the Patriot Disclosure Schedule, the ledgers, articles
of association, stock records, or share certificates for each subsidiary are
complete and up to date and reflect the persons listed in Schedule 3.8(b)
in the Patriot Disclosure Schedule as the record (legal) or beneficial owner(s)
of the outstanding shares of capital stock or capital of the relevant Patriot
Subsidiaries. Other than as set forth in Section 3.8(b) in the
Patriot Disclosure Schedule, there are no outstanding subscriptions, options,
warrants, puts, calls, agreements, understandings, claims or other commitments
or rights of any type relating to the issuance, sale or transfer of any
securities of any subsidiary, nor are there outstanding any securities that are
convertible into or exchangeable for any shares of capital stock of any
subsidiary, and neither Patriot nor any subsidiary has any obligation of any
kind to issue any additional securities of any subsidiary or to pay for or
repurchase any securities of any subsidiary or any predecessor
thereof.
3.9 Brokerage and Finders’
Fees. Neither
Patriot nor any stockholder, director, officer or employee thereof, has incurred
or will incur on behalf of Patriot or any of its affiliates, any brokerage,
finders’ or similar fee in connection with the transactions contemplated by this
Agreement.
3.10 Board Recommendation;
Required Vote. The
board of directors of Patriot, at a meeting duly called and held, has by
majority vote of those directors present and constituting a quorum of the
directors then in office determined that this Agreement and the transactions
contemplated hereby, including the Merger, are fair to and in the best interests
of the Patriot Stockholders. No vote of any holder of Patriot Capital
Stock is required under the Patriot Certificate, Patriot Bylaws or Applicable
Law with respect to this Agreement or the transactions contemplated
hereby. The board of directors of Subcorp, at a meeting duly called
and held, has by majority vote of those directors present and constituting a
quorum of the directors then in office determined that this Agreement and the
transactions contemplated hereby, including the Merger, are fair to and in the
best interests of the sole stockholder of Subcorp.
11
3.11 Patriot SEC
Documents. Patriot
has timely filed with the U.S. Securities and Exchange Commission (the
“Commission”) all forms, reports, schedules, statements and other documents
(including exhibits and other information incorporated therein) required to be
filed by it since January 1, 2007 under the Securities Act of 1933, as
amended (the “Securities Act”), or the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (such documents, as supplemented and amended since
the time of filing, collectively, the “Patriot SEC Documents”). No
subsidiary of Patriot is required to file any form, report, registration
statement, prospectus or other document with the Commission. The
Patriot SEC Documents, including, without limitation, any financial statements
or schedules included in the Patriot SEC Documents, at the time filed (and, in
the case of registration statements and proxy statements, on the dates of
effectiveness and the dates of mailing, respectively and, in the case of any
Patriot SEC Document amended or superseded by a filing prior to the date of this
Agreement, then on the date of such amending or superseding filing):
(a) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be. The financial statements of Patriot (including the related
notes) included in the Patriot SEC Documents at the time filed (and, in the case
of registration statements and proxy statements, on the dates of effectiveness
and the dates of mailing, respectively, and, in the case of any Patriot SEC
Document amended or superseded by a filing prior to the date of this Agreement,
then on the date of such amending or superseding filing) complied in all
material respects with applicable accounting requirements and with the published
rules and regulations of the Commission with respect thereto, were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-Q
of the Commission), and fairly present (subject, in the case of unaudited
statements, to normal, recurring audit adjustments not material in amount) in
all material respects the consolidated financial position of Patriot and its
consolidated subsidiaries as at the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended. Except
as set forth in Section 3.11 in the Patriot Disclosure Schedule, from the
date of incorporation Patriot has maintained its books of account in accordance
in all material respects with Applicable Law and all books and records are
complete and correct in all material respects, fairly and accurately reflect the
income, expenses, assets and liabilities of Patriot and its subsidiaries in all
material respects, including the nature thereof and the transactions giving rise
thereto, and provide a fair and accurate basis for the preparation of the
financial statements of Patriot included in the Patriot SEC
Documents.
3.12 Books and
Records. Except
as set forth in Section 3.12 in the Patriot Disclosure Schedule, since
January 1, 2003, Patriot and its subsidiaries have, in all material
respects, maintained their minute books, stock books, and stock ledgers, in
accordance and with Applicable Law, sound business practices, and the
requirements of Section 13(b)(2) of the Exchange Act, including the
maintenance of an adequate system of internal controls. The
signatures appearing on all documents contained in such books of account are the
true signatures of the persons purporting to have signed the same.
12
3.13 No Undisclosed
Liabilities. Except
(a) as and to the extent disclosed or reserved against on the balance sheet
of Patriot as of February 29, 2008, (b) as incurred after the date thereof
in the ordinary course of business consistent with past practice or (c) as
set forth in Section 3.13 in the Patriot Disclosure Schedule, Patriot and
its subsidiaries do not have any liabilities or obligations of any nature,
whether known or unknown, absolute, accrued, contingent, xxxxxx, inchoate or
otherwise and whether due or to become due, that, individually or in the
aggregate, have or would reasonably be expected to have a Material Adverse
Effect on Patriot and its subsidiaries taken as a whole.
3.14 No Material Adverse
Change. Except
as set forth in Section 3.14 in the Patriot Disclosure Schedule, since
February 29, 2008, there has been no material adverse change in the assets,
liabilities, results of operations, business prospects, or financial condition
of Patriot or any event, occurrence or development that would reasonably be
expected to have a Material Adverse Effect on Patriot and its subsidiaries taken
as a whole which has not been disclosed in the Patriot SEC
Documents.
3.15 Disclosure. The
representations and warranties contained in this Article III, taken as a
whole, do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make such representations and
warranties, in light of the circumstances under which they were made, not
misleading.
3.16 Compliance with
Law. Except as set forth in Section 3.16 in the Patriot
Disclosure Schedule and except with respect to Applicable Laws discussed
elsewhere in this Article III, to the Knowledge of Patriot, Patriot is in
compliance, in all material respects, and at all times since January 1, 2007 has
been in compliance, in all material respects, with all Applicable Laws relating
to Patriot or its businesses or properties, except where the failure to be in
compliance with such Applicable Laws (individually or aggregate) would not
reasonably be expected to have a Material Adverse Effect on Patriot, or where
such noncompliance has been cured and is reasonably expected to have no material
impact on the future business or operations of Patriot. Patriot has
received no written notice of any pending investigation or review by any
Governmental Authority with respect to Patriot, nor has any Governmental
Authority indicated in writing an intention to conduct the same.
3.17 Actions. Section 3.17
of the Patriot Disclosure Schedule sets forth each instance in which the Patriot
has received written notice of an Action pending or threatened against
Patriot. Since January 1, 2007, Patriot has not received written
notice of, or a written threat regarding, Patriot being subject to
any order, writ, injunction or decree relating to its method of doing business
or its relationship with past, existing and future users or purchasers of any
goods or services.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF CROSSFLO
In order
to induce Subcorp and Patriot to enter into this Agreement, Crossflo and each of
the Principal Officers jointly and severally hereby represents and warrants to
Patriot and Subcorp that the statements contained in this Article IV are
true, correct and complete, except as otherwise expressly set forth in this
Article IV or in the disclosure schedule to be delivered by Crossflo to
Patriot and incorporated herein by reference (as dated the date hereof, and as
may be amended and supplemented as of the Closing Date, the “Crossflo Disclosure
Schedule”), as of the date hereof and as of the Closing Date unless another date
is expressly stated below or in the Crossflo Disclosure
Schedule. With respect to the representations and warranties of the
Principal Officers, each time a representation or warranty is limited to the
Knowledge of Crossflo, it is also limited to the Knowledge of the Crossflo
Principal Officers. Additionally, the representations and warranties
made by the Crossflo Principal Officers in Sections 4.11, 4.14, 4.19, 4.20,
4.21, 4.24, 4.25, 4.26, regardless of whether such representations and
warranties contain the term Knowledge, are limited to the Knowledge of the
Crossflo Principal Officers.
13
4.1 Organization and
Standing. Crossflo
is a corporation duly organized and validly existing under the laws of the State
of California with full corporate power and authority to own, lease, use and
operate its properties and to conduct its business as and where now owned,
leased, used, operated and conducted. Crossflo is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the nature of
the business conducted by it or the property it owns, leases, uses, or operates
requires it to so qualify, be licensed or be in good standing, except where the
failure to be so qualified or in good standing in such jurisdiction would not
have a Material Adverse Effect on Crossflo. Crossflo is not in
default in the performance, observance or fulfillment of any provision of its
Amended and Restated Articles of Incorporation (the “Crossflo Articles”) or its
Bylaws (the “Crossflo Bylaws”), as in effect on the date
hereof. Crossflo has previously furnished to Patriot complete and
correct copies of the Crossflo Articles and the Crossflo Bylaws, each as in
effect on the date hereof. Listed in Section 4.1 in the Crossflo
Disclosure Schedule is each jurisdiction in which Crossflo is qualified or
licensed to do business and whether Crossflo is in good standing in each
applicable jurisdiction as of the date of the Agreement.
4.2 Subsidiaries. Except
as set forth in Section 4.2(a) in the Crossflo Disclosure Schedule,
Crossflo does not own, directly or indirectly, any equity or other ownership
interest in any corporation, partnership, joint venture or other entity or
enterprise. Except as set forth in Section 4.2(a) in the
Crossflo Disclosure Schedule, Crossflo is not subject to any obligation or
requirement to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any person.
4.3 Corporate Power and
Authority. Crossflo
has all requisite corporate power and authority to enter into and deliver this
Agreement, to perform its obligations hereunder and, subject to approval of the
Merger and the transactions contemplated hereby by Crossflo Stockholders, to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Crossflo have been duly authorized by all
necessary corporate action on the part of Crossflo, subject to approval of the
Merger and the transactions contemplated hereby by Crossflo’s board of directors
and the requisite Crossflo Stockholders. This Agreement has been duly
executed and delivered by Crossflo and constitutes the legal, valid and binding
obligation of Crossflo, enforceable against Crossflo in accordance with its
terms, except to the extent that such enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors’ rights generally or by general equitable
principles.
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4.4 Capitalization of
Crossflo.
(a) The
authorized capital stock of Crossflo consists of 35,000,000 common shares (the
“Crossflo Common Stock”) and 25,000,000 preferred shares (the “Crossflo
Preferred Stock”). At the date of this Agreement, (i) 3,485,800 shares of
Crossflo Common Stock, no par value, are issued and outstanding,
(ii) 6,353,429 shares of Crossflo Common Stock are reserved for issuance
upon the exercise or conversion of options, warrants or convertible securities
granted or issuable by Crossflo, and (iii) 3,059,700 shares of Crossflo
Preferred Stock designated Series A Preferred Stock, are issued and outstanding,
2,266,297 shares of Crossflo Preferred Stock designated Series B Preferred
Stock are issued and outstanding, 7,664,571 shares of Crossflo Preferred Stock
designated Series C Preferred Stock are issued and outstanding, 1,532,914
shares of Crossflo Preferred Stock designated Series C Preferred Stock are
reserved for issuance upon exercise of outstanding warrants granted by Crossflo,
4,170,000 shares of Crossflo Preferred Stock designated Series D Preferred
Stock are issued and outstanding, and 3,725,676 shares of Crossflo Preferred
Stock designated Series E Preferred Stock are issued and
outstanding. The Crossflo Common Stock and the Crossflo Preferred
Stock are referred to herein collectively as the “Crossflo Capital
Stock.” Each outstanding share of Crossflo Capital Stock is duly
authorized and validly issued, fully paid and nonassessable, and has not been
issued in material violation of any preemptive or similar rights.
(b) As of the
date hereof, other than as set forth in clause (a)(ii) above or in
Section 4.4(b) in the Crossflo Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale, repurchase or transfer by Crossflo of any securities of
Crossflo, nor are there outstanding any securities which are convertible into or
exchangeable for any shares of Crossflo Capital Stock, and Crossflo has no
obligation of any kind to issue any additional securities or to pay for or
repurchase any securities of Crossflo or any predecessor. Set forth
in Section 4.4(b) in the Crossflo Disclosure Schedule is an accurate
and complete list of the names of all holders of Crossflo Capital Stock, and the
number and class of shares held by each such Crossflo
Stockholder. Set forth in Section 4.4(b) in the Crossflo
Disclosure Schedule is an accurate and complete list of the names of all holders
of options, warrants or convertible instruments to purchase Crossflo Capital
Stock, the number of shares issuable to each such holder upon exercise of such
option or warrant, and the exercise price and vesting schedule with respect
thereto.
(c) Except as
set forth in Section 4.4(c) in the Crossflo Disclosure Schedule, Crossflo
has not agreed to register any securities of Crossflo under the Securities Act
or under any applicable securities law or granted registration rights to any
person or entity (other than agreements with respect to registration rights that
are no longer in effect as of the date of this Agreement); complete and correct
copies of all such agreements have previously been provided to
Patriot.
4.5 Conflicts; Consents and
Approvals. Except
as set forth in Section 4.5 in the Crossflo Disclosure Schedule, neither
the execution and delivery of this Agreement by Crossflo, nor the consummation
of the transactions contemplated hereby will:
(a) conflict
with, or result in a breach of any provision of, the Crossflo Articles or the
Crossflo Bylaws;
15
(b) materially
violate or conflict with, or result in a material breach of any provision of, or
constitute a material default (or an event that, with the giving of notice, the
passage of time or otherwise, would constitute a default) under, or entitle any
party (with the giving of notice, the passage of time or otherwise) to
terminate, accelerate, modify or call a material default under, or result in the
creation of any material Encumbrance upon any of the properties or assets of
Crossflo under, any of the terms, conditions or provisions of any material note,
bond, mortgage, indenture, deed of trust, license, contract, undertaking,
agreement, lease or other instrument or obligation to which Crossflo is a party,
including without limitation, any Contract;
(c) materially
violate any (i) order, writ, injunction, decree, ruling, assessment,
arbitration, or award of any Governmental Authority or arbitrator or
(ii) Applicable Laws relating to Crossflo or any of its properties or
assets; or
(d) require
any action or consent or approval of, or review by, or registration or filing by
Crossflo or any of its affiliates with, any third party or any Governmental
Authority, other than (i) approval of the Merger and the transactions
contemplated hereby by Crossflo Stockholders, (ii) registrations or other
actions required under federal and state securities laws as are contemplated by
this Agreement, and (iii) the filing of the California Merger Documents
with the California Secretary of State.
4.6 Brokerage and Finders’
Fees. Except
for finders’ fees to be paid to LBE Capital, and as set forth in
Section 4.6 in the Crossflo Disclosure Schedule, neither Crossflo nor any
stockholder, director, officer or employee thereof, has incurred or will incur
on behalf of Crossflo, any brokerage, finders’ or similar fee in connection with
the transactions contemplated by this Agreement. Any brokerage
commissions, finders’ fees financial advisory fees or similar payments paid or
to be paid to LBE Capital will be netted against the total Merger
Consideration.
4.7 Books and Records; Financial
Statements.
(a) Except as
set forth in Section 4.7(a) in the Crossflo Disclosure Schedule, from its
date of incorporation, the minute books, stock books and stock ledgers of
Crossflo (the “Books of Account”) have been maintained, in all material
respects, in accordance with Applicable Law, sound business practices, including
the maintenance of a system of internal controls adequate for its stage of
development. The signatures of Crossflo personnel appearing on all
documents contained in such Books of Account are the true signatures of the
persons purporting to have signed the same, and complete and correct copies of
such Books of Account have been provided to Patriot.
(b) Attached
to Section 4.7(b) in the Crossflo Disclosure Schedule, as previously
delivered to Patriot, are complete and correct copies of the audited balance
sheet of Crossflo as of December 31, 2007 and the related statements of income,
stockholders’ equity, and cash flow for the twelve month period then
ended, as well as the unaudited, balance sheet of Crossflo as of June 30, 2008
and the related statements of income, stockholders’ equity, and cash flow for
the six month period then ended (the “Crossflo Financial
Statements”). The Crossflo Financial Statements were prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present, in all material respects, the financial condition
and results of operations, changes in stockholders’ equity and cash flow of
Crossflo as at the respective dates of and for the periods referred to in such
financial statements, subject, in the case of interim financial statements to
(i) the omission of footnotes customarily contained in audited financial
statements and (ii) normal recurring year-end adjustments (the effect of which
will not, individually or in the aggregate, be materially adverse to
Crossflo).
16
4.8 Compliance with
Law. Except
as set forth in Section 4.8 in the Crossflo Disclosure Schedule and except
with respect to Applicable Laws discussed elsewhere in this Article IV
including without limitation those relating to Taxes (as set forth in
Section 4.11), employee benefit plans (as set forth in Section 4.14),
labor matters (as set forth in Section 4.16), Permits (as set forth in
Section 4.19), Environmental Laws (as set forth in Section 4.21),
product warranties (as set forth in Section 4.25), Data Protection Laws (as
set forth in Section 4.26) and the Foreign Corrupt Practices Act (as set
forth in Section 4.27), to the Knowledge of Crossflo, Crossflo is in
compliance, in all material respects, and at all times since January 1, 2007 has
been in compliance, in all material respects, with all Applicable Laws relating
to Crossflo or its businesses or properties, except where the failure to be in
compliance with such Applicable Laws (individually or in the aggregate) would
not reasonably be expected to have a Material Adverse Effect on Crossflo, or
where such noncompliance has been cured and is reasonably expected to have no
material impact on the future business or operations of
Crossflo. Crossflo has received no written notice of any pending
investigation or review by any Governmental Authority with respect to Crossflo
and, to the Knowledge of Crossflo, no such investigation or review is
threatened, nor has any Governmental Authority indicated in writing an intention
to conduct the same.
4.9 Actions. Section 4.9
in the Crossflo Disclosure Schedule sets forth each instance in which
Crossflo has received written notice of an Action pending and each instance in
which, to the Knowledge of Crossflo, any Action is threatened against
Crossflo. Since February 29, 2008, Crossflo has not received written
notice of, or a written threat regarding, Crossflo being subject to any order,
writ, injunction or decree relating to its method of doing business or its
relationship with past, existing or future users or purchasers of any goods or
services.
4.10 No Material Adverse
Change. Except
as set forth in Section 4.10 in the Crossflo Disclosure Schedule, since
February 29, 2008, there has been no material adverse change in the assets,
liabilities, results of operations, business prospects, or financial condition
of Crossflo or any event, occurrence or development that would reasonably be
expected to have a Material Adverse Effect on Crossflo.
4.11 Taxes.
(a) Except as
set forth in Section 4.11(a) in the Crossflo Disclosure
Schedule:
(i) Crossflo
has filed all material Tax Returns (including, but not limited to, those filed
on a consolidated, combined or unitary basis) required to have been filed by
Crossflo prior to the date hereof;
(ii) All such
Tax Returns referred to in clause (a)(i) above were true and correct
(except for such inaccuracies which are individually, and in the aggregate, not
material) and Crossflo has paid or, prior to the Effective Time, will pay within
the time and manner prescribed by Applicable Law, all Taxes, interest and
penalties required to be paid in respect of the periods covered by such Tax
Returns due to any federal, state, foreign, local or other Tax
authority;
17
(iii) Crossflo
has no liability for Taxes that is materially in excess of the amount reserved
on the Crossflo Financial Statements;
(iv) Crossflo
has not requested or filed any document having the effect of causing any
extension of time within which to file any returns in respect of any fiscal year
which have not since been filed;
(v) Crossflo
has not received written notice of any currently due and payable deficiency for
any material Tax from any Tax authority;
(vi) Crossflo
has not received written notice that it is the subject of any currently ongoing
Tax audit;
(vii) As of the
date of this Agreement, Crossflo has not received written notice from any Tax
authority of any pending requests for waivers of the time to assess any material
Tax, other than those made in the ordinary course and for which payment has been
made;
(viii) Crossflo
has not waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency;
(ix) There are
no recorded Encumbrances with respect to Taxes upon any of the properties or
assets, real or personal, tangible or intangible of Crossflo (other than liens
for Taxes not yet due and/or delinquent); and
(x) No
written claim has ever been received by Crossflo from a Governmental Authority
in a jurisdiction where Crossflo does not file Tax Returns that Crossflo is or
may be subject to taxation by that jurisdiction.
(b) Crossflo
is not obligated by any Contract, agreement or other arrangement to indemnify
any other person with respect to material Taxes. Crossflo is not now
or has ever been a party to or bound by any agreement or arrangement (whether or
not written and including, without limitation, any arrangement required or
permitted by law) binding Crossflo that (i) requires Crossflo to make any
Tax payment to or for the account of any other person, (ii) affords any
other person the benefit of any net operating loss, net capital loss, investment
Tax credit, foreign Tax credit, charitable deduction or any other credit or Tax
attribute which could reduce Taxes (including, without limitation, deductions
and credits related to alternative minimum Taxes) of Crossflo, or
(iii) requires or permits the transfer or assignment of income, revenues,
receipts or gains to Crossflo, from any other person.
(c) Except as
set forth in Section 4.11(c) in the Crossflo Disclosure Schedule, Crossflo
has withheld and paid over all Taxes required to have been withheld and paid
over in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party.
(d) Crossflo
has neither agreed to make, nor has it received any written notice from the
Internal Revenue Service proposing that Crossflo make, any adjustments pursuant
to Sections 263A or 481(a) of the Code or any similar provision of state,
local or foreign law by reason of a change in accounting method initiated by
Crossflo, and Crossflo has no application pending with any Governmental
Authority requesting permission for any changes in accounting methods that
relate to the business or operations of Crossflo.
18
(e) Crossflo
has not requested any private letter ruling of the Internal Revenue Service or
comparable ruling of other Governmental Authorities.
(f) Complete
and correct copies of the Tax Returns of Crossflo for the years ended 2007, 2006
and 2005, have been provided or made available to Buyer.
(g) Except
for the group for which Crossflo is presently a member, if any, Crossflo has
never been a member of an affiliated group of corporations, within the meaning
of Section 1504 of the Code, other than as a common parent corporation,
within the meaning of Section 1504 of the Code (or any similar provision of
state or local law), except where Crossflo was the common parent corporation of
such affiliated group.
(h) Crossflo
has no liability for the Taxes of any person other than any of Crossflo under
Regulation Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or
otherwise.
(i) Crossflo
is not and has not been, a United States real property holding corporation (as
defined in Section 897(c)(2) of the Code).
(j) Crossflo
is not or has not been a party to any joint venture, partnership, or other
agreement that would be treated as a partnership for U.S. federal income tax
purposes.
(k) Crossflo
has not participated in an international boycott as defined in Section 999
of the Code (or any similar provision of state, local or foreign
law).
(l) Crossflo
is not a party to any agreement, contract, arrangement or plan that has resulted
or would result, separately or in the aggregate, in the payment of any “excess
parachute payment” within the meaning of Internal Revenue Code Section 280G
(or any corresponding provision of state, local or foreign law).
(m) Crossflo
is not a party to or bound by any tax allocation or sharing
agreement.
(n) Crossflo
will not be required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion thereof)
ending after the Closing Date as a result of any:
(i) “Closing
Agreement” as described in Internal Revenue Code Section 7121 (or any
corresponding or similar provision of state, local or foreign law) executed on
or prior to the Closing Date;
(ii) Intercompany
transactions or any excess loss account described in Treasury Regulations under
Internal Revenue Code Section 1502 (or any corresponding or similar
provision of state, local or foreign law);
(iii) Installment
sale or open transaction disposition made on or prior to the Closing Date;
or
(iv) Prepaid
amount received on or prior to the Closing Date.
(o) Crossflo
has not distributed stock of another corporation, or has had its stock
distributed by another corporation, in a transaction that was purported or
intended to be governed in whole or in part by Internal Revenue Code
Section 355.
(p) As used
in this Agreement, “Tax Returns” means all federal, state, local and foreign Tax
returns, declarations, schedules, information returns, reports and forms, and
any amendments to any of the foregoing relating to Taxes, required to be filed
with any Governmental Authority responsible for the imposition or collection of
Taxes.
19
(q) As used
in this Agreement, “Tax” or “Taxes” means (i) any federal, state, county,
local or foreign taxes, charges, fees, levies or other assessments, including
all net income, gross income, premium, sales and use, ad valorem, transfer,
gains, profit, windfall profits, excise, franchise, real and personal property,
gross receipts, capital stock, production, business and occupation, employment,
disability, payroll, license, estimated, customs duties, severance or
withholding taxes, other taxes or similar charges of any kind imposed by a
Governmental Authority and includes any interest and penalties (civil or
criminal) on or additions to any such taxes or in respect of a failure to comply
with any requirement relating to any Tax Return and any expenses incurred in
connection with the determination, settlement or litigation of any tax
liability.
4.12 Intellectual
Property.
(a) Set forth
in Section 4.12(a) in the Crossflo Disclosure Schedule is an accurate and
complete list of (i) all material foreign and domestic patents, patent
applications, invention disclosures, trademarks, service marks, trade names,
internet domain names (and any registrations or applications for registration
for any of the foregoing trademarks, service marks, trade names and internet
domain names) and all material copyright applications and registrations and all
other material Intellectual Property rights owned or used by Crossflo, and
(ii) other than as set forth in Section 4.15 in the Crossflo
Disclosure Schedule, all material agreements to which Crossflo is a party which
concern any of its material Intellectual Property.
(b) Except as
set forth in Section 4.12(b) in the Crossflo Disclosure
Schedule:
(i) Crossflo
owns, free and clear of any material Encumbrances, or has sufficient rights to,
the Intellectual Property necessary to conduct its business as it is currently
being conducted and as contemplated to be conducted as set forth in its
Executive Summary dated February 2008;
(ii) No
written claim of invalidity or ownership with respect to the Intellectual
Property has been received by Crossflo from any third party and, to the
Knowledge of Crossflo, no Intellectual Property is the subject of any pending or
threatened Action;
(iii) No person
or entity has asserted in a writing received by Crossflo that, with respect to
any Intellectual Property, Crossflo or any licensee of Crossflo is infringing or
has infringed any domestic or foreign patent, trademark, service xxxx, trade
name, or copyright or design right, or has misappropriated or improperly used or
disclosed any trade secret, confidential information or know-how;
(iv) All
material fees, annuities, royalties, honoraria and other payments which are due
from Crossflo on or before the date of this Agreement for any of the
Intellectual Property or under any agreement related to the Intellectual
Property have been paid;
(v) Except as
limited by the terms of any license relating thereto, the making, using,
selling, manufacturing, marketing, licensing, reproduction, distribution,
disposal, modification, display, transmission or publishing of any process,
machine, manufacture, composition of matter, or material related to any part of
the Intellectual Property, does not and will not infringe in any material
respect any domestic or foreign patent, trademark, service xxxx, trade name,
copyright, moral right or other intellectual property right of any third party,
and does not and will not involve the misappropriation or improper use or
disclosure of any trade secrets, confidential information or know-how of any
third party;
20
(vi) To the
Knowledge of Crossflo, no unexpired foreign or domestic patents or patent
applications exist that are materially adverse to the conduct of its business as
it is currently being conducted and as contemplated to be conducted as set forth
in its Executive Summary dated February 2008;
(vii) To the
Knowledge of Crossflo, there exists no (A) prior act of Crossflo or any
third party that would void or invalidate any of the Intellectual Property or
(B) conduct or use by Crossflo or any third party that would void or
invalidate any of the Intellectual Property; and
(viii) The
execution, delivery and performance of this Agreement by Crossflo, and the
consummation of the transactions contemplated hereby, will not materially
breach, violate or conflict with any instrument or agreement relating to the
Intellectual Property to which Crossflo is a party, will not cause the
forfeiture or termination or give rise to a right of forfeiture or termination
of any of the Intellectual Property or in any way impair the right of Crossflo,
subject to Section 4.12(b)(v), to make, use, sell, license or dispose of,
distribute, modify, display or transmit or to bring any action for the
infringement of, any Intellectual Property.
(c) Crossflo
has taken commercially reasonable steps to safeguard and maintain the secrecy
and confidentiality of (i) all of its Intellectual Property, including
without limitation material trade secrets and (ii) to the extent required
by Applicable Law, all of its material patent applications and their related
inventions prior to the issuance of a patent registration contained in the
Intellectual Property.
(d) As used
in this Agreement, “Intellectual Property” means all material domestic or
foreign patents, patent applications, inventions (whether or not patentable),
processes, products, technologies, discoveries, copyrightable and copyrighted
works, apparatus, trade secrets, trademarks, logos, know-how, internet domain
names, copyrights, trademark registrations and applications, service marks,
service xxxx registrations and applications, trade names, trade dress, copyright
registrations, customer lists, marketing and customer information, licenses,
technical information (whether confidential or otherwise), software, and all
documentation thereof, in each case that is owned by, and not licensed to
Crossflo (other than third-party “click wrap or “shrink wrap” software licenses,
as to which Crossflo makes no representations or warranties) on the date
hereof.
(e) To the
extent that any Intellectual Property used or desirable for the business is held
by a person other than Crossflo, a satisfactory assignment to Crossflo will be a
condition of closing.
4.13 Title to Assets and
Properties. Except
as set forth in Section 4.13 in the Crossflo Disclosure Schedule, Crossflo
has good, absolute, marketable title to, or a valid leasehold interest in, and
unrestricted possession (other than under the terms of relevant leases) of, the
assets and properties used by Crossflo, located on its premises or shown on the
Crossflo Financial Statements, free and clear of all Encumbrances, except for
assets and properties disposed of in the ordinary course of business since
January 1, 2008.
21
4.14 Employee Benefit
Plans.
(a) Except as
set forth in Section 4.14(a) in the Crossflo Disclosure Schedule, with
respect to each Crossflo Plan, Crossflo has made available to Patriot a
substantially correct and complete copy of the following (where
applicable): (i) each writing constituting a part of such
Crossflo Plan, including without limitation all plan documents, benefit
schedules, trust agreements, and insurance contracts and other funding vehicles;
(ii) the three most recently filed Annual Reports (Form 5500 Series)
and accompanying schedules, if any; (iii) the current summary plan
description, if any; (iv) the most recent annual financial report, if any;
and (v) the most recent determination letter from the Internal Revenue
Service, if any.
(b) The
Internal Revenue Service has issued a favorable determination letter with
respect to each Crossflo Plan that is intended to be a Qualified Plan and, to
the Knowledge of Crossflo, there are no existing circumstances or any events
that have occurred that could adversely affect the qualified status of any
Crossflo Plan that is a Qualified Plan or the related trust.
(c) All
contributions required to be made by Crossflo to any Crossflo Plan by Applicable
Laws or by any Crossflo Plan document or other contractual undertaking, and all
premiums due or payable with respect to insurance policies funding any Crossflo
Plan, for any period through the date hereof, have been made or paid in
full.
(d) Except as
set forth in Section 4.14(d) in the Crossflo Disclosure Schedule, to the
Knowledge of Crossflo, each Crossflo Plan has been maintained and administered
in compliance with its terms and Applicable Law, including ERISA and the Code,
except where such failure would not have a Material Adverse Effect on
Crossflo. Except as set forth in Section 4.14(d) in the Crossflo
Disclosure Schedule, to the Knowledge of Crossflo there is not now, and there
are no existing circumstances that could reasonably be expected to give rise to,
any requirement for the posting of security with respect to a Crossflo Plan or
the imposition of any Encumbrance on the assets of Crossflo under ERISA or the
Code with respect to a Crossflo Plan.
(e) Crossflo
has not, at any time within six years before the date hereof, maintained,
contributed to or been obligated to contribute to any Multiemployer Plan or
Multiple Employer Plan or any plan covered by Section 412 of the Code or
Title IV of ERISA.
(f) To the
Knowledge of Crossflo, there does not now exist, and there are no existing
circumstances that could reasonably be expected to result in, any Controlled
Group Liability that would be a liability of Crossflo following the
Closing. Without limiting the generality of the foregoing, Crossflo
has not engaged in any transaction described in Section 4069 or
Section 4204 of ERISA.
(g) Except
for health continuation coverage as required by Section 4980B of the Code
or Part 6 of Title I of ERISA (or other Applicable Law pertaining to COBRA
or Cal-COBRA) and except as set forth in Section 4.14(g) in the Crossflo
Disclosure Schedule, to the Knowledge of Crossflo, Crossflo has no liability for
life, health, medical or other welfare benefits to former employees or
beneficiaries or dependents thereof and there has been no communication to
employees of Crossflo that promises or guarantees such employees retiree health
or life insurance benefits or other retiree death benefits.
22
(h) Except as
set forth in Section 4.14(h) in the Crossflo Disclosure Schedule, to the
Knowledge of Crossflo, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will result in, cause
the accelerated vesting or delivery of, or increase the amount or value of, any
payment or benefit to any employee, officer, director or consultant of
Crossflo. Without limiting the generality of the foregoing, no amount
paid or payable by Crossflo in connection with the transactions contemplated
hereby, either solely as a result thereof or as a result of such transactions in
conjunction with any other events, will be an “excess parachute payment” within
the meaning of Section 280G of the Code.
(i) Except as
disclosed in Section 4.14(i) in the Crossflo Disclosure Schedule, Crossflo
has not received written notice of any pending, and to the Knowledge of Crossflo
there are no threatened, claims (other than claims for benefits in the ordinary
course), lawsuits or arbitrations that have been asserted or instituted against
the Crossflo Plans, any fiduciaries thereof with respect to their duties to the
Crossflo Plans, or the assets of any of the trusts under any of the Crossflo
Plans that would reasonably be expected to result in any liability of Crossflo
to the Pension Benefit Guaranty Corporation, the US Department of Treasury, the
US Department of Labor or any Multiemployer Plan.
(j) Section 4.14(j)
in the Crossflo Disclosure Schedule sets forth the names of all directors
and officers of Crossflo, the names of each employee of Crossflo, and the total
current salary, bonus eligibility, and fringe benefits and perquisites that each
such director, officer and employee is expected to receive in the fiscal year
ending December 31, 2008 based on current compensation
arrangements. Section 4.14(j) in the Crossflo Disclosure
Schedule also sets forth the liability of Crossflo for deferred compensation
under any deferred compensation plan, excess plan or similar arrangement (other
than pursuant to Qualified Plans) to each such director, officer and employee,
together with the value, as of the date specified thereon, of the assets (if
any) set aside in any grantor trust(s) to fund such
liabilities. Except as disclosed in Section 4.14(j) in the
Crossflo Disclosure Schedule, there are no other forms of compensation paid to
any such director, officer or employee of Crossflo. Except as set
forth in Section 4.14(j) in the Crossflo Disclosure Schedule, no officer,
director, or employee of Crossflo, or any immediate family member of any of the
foregoing, provides or causes to be provided to Crossflo any assets, services or
facilities and Crossflo does not provide or cause to be provided to any such
officer, director, or employee, or any immediate family member of any of the
foregoing, any assets, services or facilities.
(k) As used
in this Agreement, the following terms have the meanings given
below:
(i) “Benefit
Obligation” means Crossflo’s aggregate financial liability to provide all
current, projected and contingent benefits to an employee, or such employee’s
beneficiaries or dependents, as the case may be, under the terms of any of the
Crossflo Plans, regardless of whether an amount less than such aggregate
financial liability is reflected on Crossflo’s financial statements under
applicable accounting rules.
(ii) “Controlled
Group Liability” means any and all liabilities (i) under Title IV of
ERISA, (ii) under Section 302 of ERISA, (iii) under
Sections 412 and 4971 of the Code, (iv) resulting from a violation of
the continuation coverage requirements of Section 601 et seq. of ERISA and
Section 4980B of the Code or the group health plan requirements of
Section 701 et seq. of ERISA, and (v) under corresponding or similar
provisions of foreign laws or regulations, in each case other than pursuant to
the Crossflo Plans.
23
(iii) “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
(iv) “ERISA
Affiliate” means, with respect to any entity, trade or business, any other
entity, trade or business that is a member of a group described in
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of
ERISA that includes the first entity, trade or business, or that is a member of
the same “controlled group” as the first entity, trade or business pursuant to
Section 4001(a)(14) of ERISA. As of the date hereof, Crossflo
has no ERISA Affiliates.
(v) “Crossflo
Employee” means a person who is, as of the Effective Time, an active or inactive
employee of Crossflo.
(vi) “Crossflo
Plans” means all employee benefit plans, programs and other arrangements
providing benefits to any current or former employee, officer, director or
consultant (or any beneficiary or dependent thereof) in respect of services
provided to Crossflo, and whether covering one person or more than one person,
sponsored or maintained by Crossflo or to which Crossflo contributes (or is
obligated to contribute) or has any liability. Without limiting the
generality of the foregoing, the term “Crossflo Plans” includes each “employee
pension benefit plan” as defined in Section 3(2) of ERISA, each “employee
welfare benefit plan” as defined in Section 3(1) of ERISA, and each
agreement, plan, program, fund, policy, contract or arrangement (whether written
or unwritten) providing compensation, benefits, pension, retirement,
superannuation, profit sharing, stock bonus, stock option, stock purchase,
phantom or stock equivalent, bonus, thirteenth month, incentive, deferred
compensation, hospitalization, medical, dental, vision, vacation, life
insurance, death benefit, sick pay, disability, severance, termination,
indemnity, redundancy pay, educational assistance, holiday pay, housing
assistance, moving expense reimbursement, fringe benefit or similar employee
benefits covering any employee, former employee, or the beneficiaries and
dependents of any employee or former employee, regardless of whether it is
mandated under local law, voluntary, private, funded, unfunded, financed by the
purchase of insurance, contributory or non-contributory.
(vii) “Multiemployer
Plan” means a “multiemployer plan” within the meaning of Section 4001(a)(3)
of ERISA. As of the date hereof, Crossflo has no Multiemployer
Plans.
(viii) “Multiple
Employer Plan” means a plan that has two or more contributing sponsors at least
two of whom are not under “common control” within the meaning of
Section 4063 of ERISA. As of the date hereof, Crossflo has no
Multiple Employer Plans.
(ix) “Qualified
Plan” means a “qualified plan” within the meaning of Section 401(a) of
the Code.
4.15 Contracts.
(a) Section 4.15(a)
in the Crossflo Disclosure Schedule lists substantially each, and Crossflo
has provided Patriot with materially correct and complete copies or summaries of
substantially each, material Contract (“Contract” means all written or oral
contracts, agreements, guarantees, licenses and executory commitments, other
than Crossflo Plans and real property leases) to which Crossflo is a party as of
the date hereof and which falls within any one or more of the following
categories:
24
(i) Contracts
not entered into in the ordinary course of Crossflo’s business and that involve
expenditures or receipts by Crossflo of US$10,000 per month;
(ii) joint
venture, partnership, strategic alliances and other Contracts (however named)
involving a sharing of profits, losses, costs or liabilities;
(iii) leases
for equipment or other personal property assets;
(iv) Contracts
with respect to which Crossflo received gross revenue of at least US$10,000 from
January 1, 2005 through June 30, 2008, and which are either service
contracts (including without limitation outsourcing agreements, application
service provider agreements, hosting agreements and data center management
agreements) and/or software license agreements;
(v) Contracts
containing covenants purporting to limit the freedom of Crossflo to compete in
any line of business or in any geographic area or to hire any individual or
group of individuals (including without limitation any software license
agreements that authorize or permit Crossflo to use the applicable software only
in particular business lines, languages or geographic areas);
(vi) Contracts
providing for the settlement of disputed claims (including disputed dollar
amounts) with third parties;
(vii) powers of
attorney that are currently outstanding;
(viii) Contracts
entered into other than in the ordinary course of business that contain or
provide for an express undertaking to be responsible for consequential
damages;
(ix) Contracts
which contain minimum purchase conditions in excess of US$10,000 or requirements
or other terms that restrict or limit the purchasing relationships of
Crossflo;
(x) Contracts
relating to any outstanding commitment for capital expenditures in excess of
US$25,000;
(xi) Contracts
with any labor organization, union, employee representative or group of
employees;
(xii) indentures,
mortgages, promissory notes, loan agreements, guarantees of borrowed money,
letters of credit or other agreements, instruments or commitments for the
borrowing or the lending of money;
(xiii) Contracts
providing for the creation of any Encumbrance upon any of the assets of
Crossflo;
(xiv) Contracts
involving annual revenues to the business of Crossflo in excess of 2.5% of
Crossflo’s annual revenues during any of their respective past two fiscal
years;
(xv) Contracts
providing for “earn-outs,” “savings guarantees,” “performance guarantees,” or
other contingent payments involving more than US$10,000 per year or US$50,000
over the term of the Contract;
25
(xvi) Contracts
with or for the benefit of (A) any corporate affiliate of Crossflo or
(B) any immediate family member of any shareholder, director or officer of
Crossflo;
(xvii) Contracts
involving payments by Crossflo of more than US$5,000 in any one month during the
past 6 months;
(xviii) any
Contracts that purport to limit the ability of the directors, officers, agents
or employees of Crossflo to engage in or continue any conduct, activity or
practice relating to the business of Crossflo, or assign to Crossflo any rights
to any invention, improvement or discovery;
(xix) any
cost-sharing, tax-sharing or transfer pricing agreements between Crossflo and
any related or unrelated party; and
(xx) each
amendment, supplement and modification with respect to any of the
foregoing.
(b) Except as
set forth in Section 4.15(b) in the Crossflo Disclosure Schedule, all such
Contracts are valid and binding obligations of Crossflo and each other party
thereto.
(c) Except as
set forth in Section 4.15(c) in the Crossflo Disclosure Schedule, neither
Crossflo nor, to the Knowledge of Crossflo, any other party thereto, is in
material violation of or in material default in respect of, nor to the Knowledge
of Crossflo has there occurred an event or condition which with the passage of
time or giving of notice (or both) would constitute a material default under or
permit the termination of, any such Contract.
(d) As of the
date hereof, except as set forth in Section 4.15(d) in the Crossflo
Disclosure Schedule, Crossflo is not engaged in any renegotiation of and, to the
Knowledge of Crossflo, neither Crossflo nor any third party thereto has any
outstanding rights to renegotiate, any material amounts paid or payable under
such Contracts.
4.16 Labor
Matters.
(a) Crossflo
is not a party to any collective bargaining agreement or labor union contract
and is not required to consult or negotiate with any local works council, union,
labor board or any Governmental Authority concerning the transactions
contemplated by the Agreement.
(b) Set forth
in Section 4.16(b) in the Crossflo Disclosure Schedule is a list of each
agreement to which Crossflo is a party pursuant to which any individual employed
by Crossflo or otherwise performing services primarily for Crossflo receives
compensation in excess of $20,000 per annum, and Crossflo has furnished or made
available to Patriot substantially complete and correct copies of any such
agreements in writing. Except as set forth in Section 4.16(b) in
the Crossflo Disclosure Schedule, Crossflo has not materially breached or
otherwise materially failed to comply with any provisions of any agreement set
forth therein and, to the Knowledge of Crossflo, there are no grievances
outstanding thereunder. There is no labor strike, dispute or stoppage
pending or, to the Knowledge of Crossflo, threatened against
Crossflo. To the Knowledge of Crossflo, no campaign or other attempt
for recognition is pending by any labor organization or employee with respect to
employees of Crossflo.
(c) Except as
set forth in Section 4.16(c) in the Crossflo Disclosure Schedule, to the
Knowledge of Crossflo, Crossflo is in material compliance with Applicable Laws
and their own policies respecting employment and employment practices, terms and
conditions of employment, wages and hours, equal opportunity, equal pay, civil
rights, labor relations, immigration, occupational health and safety, and
payroll and wage taxes, except for such failure as would not have a Material
Adverse Effect on Crossflo.
26
(d) As of the
date of this Agreement and except as set forth in Section 4.16(d) in the
Crossflo Disclosure Schedule or as required by Applicable Law,
(i) Crossflo is not a party to any outstanding employment agreements or
contracts with officers, managers and directors (or foreign equivalents) or
Crossflo Employees that are not terminable at will, or that provide for the
payment of any bonus or commission; and (ii) Crossflo is not a party to any
agreement, policy or practice that requires it to pay termination or severance
pay to salaried, non-exempt or hourly Crossflo Employees.
4.17 Undisclosed
Liabilities. Crossflo
has no liabilities or obligations of any nature, whether absolute, accrued,
contingent, xxxxxx, inchoate or otherwise and whether due or to become due,
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Crossflo, other than (a) liabilities disclosed
to Patriot in the Crossflo Financial Statements, (b) liabilities set forth
in the Crossflo Disclosure Schedule, and (c) liabilities incurred or
accrued after the date hereof in the ordinary course of business consistent with
past practice and not prohibited by this Agreement.
4.18 Operation of Crossflo’s
Business; Relationships.
(a) Except as
set forth in Section 4.18(a) in the Crossflo Disclosure Schedule, since
February 29, 2008, Crossflo has not, except in the ordinary course of business
consistent with past practice, engaged in any transaction which, if done after
execution of this Agreement, would violate in any material respects
Section 5.3(b).
(b) Except as
set forth in Section 4.18(b) in the Crossflo Disclosure Schedule, since
January 1, 2008, no material customer of Crossflo has indicated to Crossflo that
such customer will stop or materially decrease purchasing materials, products or
services from Crossflo and no material supplier of Crossflo has indicated to
Crossflo that such supplier will stop or materially decrease the supply of
materials, products or services to Crossflo.
4.19 Permits. To
the Knowledge of Crossflo, Crossflo is in possession of all material licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and
orders legally required in each jurisdiction to own, lease and operate its
properties and to carry on its business as currently conducted, including under
any applicable Environmental Laws (collectively, the
“Permits”). Crossflo has not received written notice of any Action
pending, and to the Knowledge of Crossflo no Action is threatened, regarding any
of the Permits which, if successful, would reasonably be expected to have a
Material Adverse Effect on Crossflo. Crossflo is not in conflict
with, or in default or violation of, any of the Permits, except for any such
conflicts, defaults or violations which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on
Crossflo.
4.20 Real
Property.
(a) Crossflo
does not own any real property.
(b) Section 4.20(b)
in the Crossflo Disclosure Schedule lists the only lease for real property
to which Crossflo is a party (the “Lease”). Crossflo does not
sublease any real property. Crossflo has delivered to Patriot a
substantially correct and complete copy of the Lease. With respect to
the Lease:
27
(i) the Lease
is legal, valid, binding, enforceable, and in full force and effect with respect
to Crossflo, and, to the Knowledge of Crossflo, with respect to the other party
thereto, the Lease is legal, binding, enforceable, and in full force and
effect;
(ii) to the
Knowledge of Crossflo, no party to the Lease is in breach or default thereunder,
and no event has occurred which, with notice or lapse of time, would constitute
a breach or default or permit termination, modification, or acceleration
thereunder;
(iii) Crossflo
has not, and to the Knowledge of Crossflo no other party thereto has, repudiated
any provision thereof;
(iv) Crossflo
has not received written notice of any disputes with respect thereto, and
Crossflo is not party to any oral agreements or forbearance programs in effect
as to the Lease;
(v) Crossflo
has not assigned, transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold; and
(vi) to the
Knowledge of Crossflo, the facility leased under the Lease has received all
approvals of Governmental Authorities (including Permits) required to be
received by Crossflo in connection with the operation thereof and have been
operated and maintained by Crossflo in accordance with Applicable Laws, except
where failure to so comply as would not have a Material Adverse Effect on
Crossflo.
4.21 Environmental
Matters. Except
for matters disclosed in Section 4.21 in the Crossflo Disclosure
Schedule:
(a) The
properties, operations and activities of Crossflo are in compliance in all
material respects with all applicable Environmental Laws and all past
noncompliance of Crossflo with any applicable Environmental Laws has been
resolved without any pending, ongoing or future obligation, cost or
liability;
(b) Crossflo
has not received any written notice of any pending Action by or before any court
or Governmental Authority under any Environmental Law, and to the Knowledge of
Crossflo no such Action is pending or threatened and there is no basis for any
present or future Action against it that may reasonably be likely to lead to any
liability;
(c) there has
been no release, discharge or emission of any Hazardous Material into the
environment in material violation of applicable Environmental Laws by Crossflo
in connection with its currently leased or formerly leased properties or
operations that would be reasonably likely to have a Material Adverse Effect on
Crossflo; and
(d) there has
been no material exposure in violation of applicable Environmental Laws of any
person or property to any Hazardous Material in connection with the properties,
operations and activities of Crossflo that would be reasonably likely to have a
Material Adverse Effect on Crossflo.
(e) For
purposes of this Agreement, the term “Environmental Laws” means all federal,
state, local or foreign laws relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
Hazardous Materials into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices, orders, permits, plans or regulations issued, entered, promulgated or
approved thereunder.
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(f) For
purposes of this Agreement, the term “Hazardous Materials” means chemicals,
pollutants, contaminants, or industrial, toxic or hazardous substances or wastes
as those terms are defined or identified in any Environmental Law or regulated
by any Permit required by applicable Environmental Law, including but not
limited to petroleum products or by-products, asbestos, and polychlorinated
materials.
4.22 Board
Recommendation. The
board of directors of Crossflo, at a meeting duly called and held, has by
majority vote of those directors present, whether in
person, telephonically or by proxy, and constituting a quorum of the
directors then in office, (i) determined that this Agreement and the
transactions contemplated hereby, including the Merger, are fair to and in the
best interests of the Crossflo Stockholders, and (ii) resolved to recommend
to the holders of the shares of Crossflo Capital Stock that such holders approve
this Agreement and the transactions contemplated herein, including the Merger
(the “Crossflo Board Recommendation”).
4.23 Accounts
Receivable. Except
as set forth in Section 4.23 in the Crossflo Disclosure Schedule, the
accounts and notes receivable reflected in the Crossflo Financial Statements
(i) arose from bona fide sales transactions in the ordinary course of
business and are payable on ordinary trade terms, (ii) to the Knowledge of
Crossflo are legal, valid and binding obligations of the respective debtors
enforceable in accordance with their terms, (iii) are not subject to valid
set-off or counterclaim, and (iv) are collectible in the ordinary course of
business consistent with past practice in the aggregate recorded amounts
thereof.
4.24 Insurance. Section 4.24
in the Crossflo Disclosure Schedule lists all insurance policies pursuant
to which Crossflo is presently insured and during each of the past three
calendar years has been insured (each, an “Insurance Policy” and, collectively,
the “Insurance Policies”). To the Knowledge of Crossflo, each
Insurance Policy is, in all material respects, in full force and effect in
accordance with its terms and all premiums reflected on invoices received by
Crossflo to date have been paid in full. Except as set forth in
Section 4.24 in the Crossflo Disclosure Schedule, no written notice of
cancellation with respect to any Insurance Policy has been received by Crossflo
with respect and, to the Knowledge of Crossflo, there is no existing default or
event which, with the giving of notice or lapse of time or both, would
constitute a default thereunder. Crossflo is a “named insured” or an
“insured” under each Insurance Policy. Except as set forth in Section 4.24
in the Crossflo Disclosure Schedule, Crossflo has not been refused any
insurance, nor has the coverage of Crossflo been limited, by any insurance
carrier to which it has applied for insurance or with which it has carried
insurance during the past three years. To the Knowledge of Crossflo,
the Insurance Policies are of the type and in the amounts that would reasonably
be expected to be maintained in the ordinary course of business for similarly
situated companies in the same or a similar industry. Set forth in
Section 4.24 in the Crossflo Disclosure Schedule is (a) with
respect to each Policy under which the annual premium amount is fixed, the
current amount of such premium, and (b) with respect to each Policy under
which the periodic or annual premium amount is variable, the amount of the most
recent periodic payment made and the calculation formula with respect to such
premium.
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4.25 Product
Warranty. To
the Knowledge of Crossflo, within the three years prior to the date
hereof: (a) each product sold or delivered by Crossflo has been
in material conformity with any applicable express and implied warranties,
(b) Crossflo has no current liability for damages in connection with any
such warranty (and there is no basis for any present or future Action against it
that may reasonably be likely to lead to any liability) and (c) no product
sold or delivered by Crossflo is subject to any guaranty, warranty, or other
indemnity beyond the applicable standard terms and conditions of sale given by
Crossflo, if any, or as required by Applicable Law.
4.26 Data Protection
Matters.
(a) Crossflo
has not received written notice of any existing or pending, and to the Knowledge
of Crossflo there is no threatened, Action against Crossflo by or before any
court or Governmental Authority under any Data Protection
Law. Crossflo has never instituted a policy with respect to, or taken
steps to comply with or protect Personal Data as required under, any Data
Protection Law.
(b) As used
in this Agreement, the term “Data Protection Laws” means all federal, state,
local or foreign laws, statutes, orders, rules, regulations, policies or
guidelines, or judgments, decisions or orders entered by any Governmental
Authority, relating to Personal Data.
(c) As used
in this Agreement, the term “Personal Data” means any and all information that
Crossflo maintains or otherwise processes that relates to an identified or
identifiable natural person, including employees, stockholders, customers,
customers of customers, vendors, contractors, and other business partners of
Crossflo, and any employees of or contractors to any of the
foregoing.
4.27 Foreign Corrupt Practices
Act.
(a) Crossflo
has not, to secure any improper advantage in order to obtain or retain business,
directly or to the Knowledge of Crossflo indirectly offered, paid, given, or
promised to pay, or authorized the payment of, any money, offer, gift, or other
thing of value, to:
(i) an
officer or employee of any Governmental Authority, or any person acting in an
official capacity for or on behalf of any Governmental Authority;
(ii) any
political party or official thereof;
(iii) any
candidate for political or political party office; or
(iv) any other
individual or entity;
while
knowing or having reason to believe that all or any portion of such money or
thing of value would be offered, given, or promised, directly or to the
Knowledge of Crossflo indirectly, to any person or entity listed in clauses
(i) - (iii) above.
(b) Crossflo
maintains a system of internal accounting controls adequate to insure that it
maintains no off-the-books accounts and that its assets are used only in
accordance with its management’s directives.
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(c) No
product sold or service provided by Crossflo has been directly, or to the
Knowledge of Crossflo indirectly, sold to or performed on behalf of Cuba, Iraq,
Iran, Libya, North Korea, or Sudan.
4.28 Disclosure. The
representations and warranties contained in this Article IV, taken as a
whole, do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make such representations and
warranties, in light of the circumstances under which they were made, not
misleading.
ARTICLE V
COVENANTS OF THE
PARTIES
5.1 Mutual
Covenants.
(a) Reasonable
Efforts.
(i) Each of
the parties agrees to use all commercially reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including (A) the obtaining of all other necessary actions or
nonactions, waivers, consents, licenses, permits, authorizations, orders and
approvals from Governmental Authorities and the making of all other necessary
registrations and filings (including other filings with Governmental
Authorities, if any), (B) the obtaining of all consents, approvals or
waivers from third parties set forth in Schedule 6.3(e) attached hereto,
and (C) the execution and delivery of any additional instruments necessary
to consummate the transaction contemplated by this Agreement.
(ii) Notwithstanding
anything to the contrary in this Agreement, (A) neither Patriot nor any of
its subsidiaries shall be required to hold separate (including by trust or
otherwise) or to divest any of their respective businesses or assets, or to take
or agree to take any action or agree to any limitation that could reasonably be
expected to have a Material Adverse Effect on Patriot combined with the
Surviving Corporation after the Effective Time, (B) prior to the Effective
Time, Crossflo shall not be required to hold separate (including by trust or
otherwise) or to divest any of their respective businesses or assets, or to take
or agree to take any other action or agree to any limitation that could
reasonably be expected to have a Material Adverse Effect on Crossflo, and
(C) neither party shall be required to waive any of the conditions to the
Merger set forth in Article VI as they apply to such party.
(b) Public
Announcements. The initial press release concerning the Merger
and the transactions contemplated hereby shall be a joint press release and
shall be issued, upon the mutual agreement of the parties, on or after the date
of this Agreement. Patriot and Crossflo shall consult with each other
before issuing, and give each other the opportunity to review and comment upon,
any other press release or public statements with respect to the transactions
contemplated by this Agreement, including the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by Applicable Law, court process or by obligations
pursuant to any listing agreement of Patriot with any national securities
exchange or national securities quotation system. In addition to the
foregoing, neither Patriot nor Crossflo shall issue any press release or
otherwise make any public statement or disclosure concerning non-public
information relating to the other party’s business, financial condition or
results of operations without the consent of the other party, which consent
shall not be unreasonably withheld, conditioned or delayed, or except as
required by Applicable Law.
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(c) Notices of Certain
Events. Each party hereto shall promptly notify the other
parties in writing of:
(i) the
receipt by such party or any of such party’s subsidiaries of any notice or other
communication from any person alleging that the consent of such person is or may
be required in connection with the transactions contemplated by this
Agreement;
(ii) subject
to any applicable legal restrictions, the receipt by such party or any of such
party’s subsidiaries of any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this
Agreement;
(iii) such
party’s obtaining Knowledge of any Actions commenced or threatened against,
relating to or involving or otherwise affecting any of the other parties hereto,
as the case may be, or, with respect to Patriot or Crossflo, any of their
respective subsidiaries, which relate to the consummation of the transactions
contemplated by this Agreement; and
(iv) such
party’s obtaining Knowledge of the occurrence, or failure to occur, of any event
which occurrence or failure to occur will be likely to cause the conditions set
forth in Article VI not to be satisfied; provided, however, that no
such notification shall affect the representations, warranties or obligations of
the parties or the conditions to the obligations of the parties hereunder, or
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
(d) Notification. Between
the date of this Agreement and the Closing Date, each party hereto shall
promptly notify the other parties hereto in writing if such party becomes aware
of any fact or condition that causes or constitutes a breach in any of its
representations and warranties as of the date of this Agreement or any other
date applicable to a representation or warranty as set forth herein.
Should any such fact or condition require any change in the Crossflo Disclosure
Schedule, Crossflo shall promptly deliver to Patriot a supplement to the
Crossflo Disclosure Schedule specifying such change. Such delivery
will not affect any rights of any party under any other provision of this
Agreement. During the same period, each party shall promptly notify the other
parties in writing if such party becomes aware of the occurrence of any breach
of any covenant of such party in this Agreement or the occurrence of any event
that will make the satisfaction of the conditions in Article 6 impossible
or unlikely.
(e) For six
(6) years following the Closing, Patriot shall, or shall cause Crossflo or other
subsidiary of Patriot to, fulfill and honor the indemnification obligations of
Crossflo pursuant to any indemnification agreements between Crossflo and its
officers and directors existing prior to the date of this Agreement and any
indemnification provisions contained in the Crossflo Articles and Crossflo
Bylaws as of the date of this Agreement. Prior to the Closing,
Crossflo shall obtain “tail” insurance coverage for a period of six (6) years
from the Closing with respect to directors’ and officers’ liability insurance
coverage Crossflo’s directors and officers acts or omissions occurring prior to
the Closing, which insurance shall, prior to the Closing, be in effect and
prepaid for such six-year period; provided that Crossflo shall consult with
Patriot regarding the terms of such insurance and such terms shall be reasonably
satisfactory to Patriot. Crossflo shall provide such assistance as is
reasonably requested by Patriot in connection with the foregoing. The
provisions of this Section 5.1(e) shall survive the Closing and are intended to
be for the benefit of, and will be enforceable by, each indemnified party, his
or her heirs and his or her representatives.
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5.2 Covenants of
Patriot.
(a) Subcorp. Prior
to the Effective Time, Subcorp shall not conduct any business or make any
investments other than as specifically contemplated by this Agreement and will
not have any assets (other than a de minimis amount of cash paid to Subcorp for
the issuance of its stock to Patriot) or any material liabilities.
(b) Employees and Employee
Benefits. From and after the Effective Time, all continuing
Crossflo employees will receive the same benefits as Patriot’s employees in
similar job classifications subject to customary vesting and term of service
requirements. From and after the Effective Time, Patriot shall treat
all service by Crossflo Employees with Crossflo (or any predecessor thereto)
prior to the Effective Time for all purposes as service with Patriot (except for
purposes of benefit accrual under defined benefit pension plans or to the extent
such treatment would result in duplicative accrual on or after the Closing Date
of benefits for the same period of service), and, with respect to any medical or
dental benefit plan in which Crossflo Employees participate after the Effective
Time, Patriot shall waive or cause to be waived any pre-existing condition
exclusions and actively-at-work requirements (provided, however, that no
such waiver shall apply to a pre-existing condition of any Crossflo Employee who
was, as of the Effective Time, excluded from participation in a Crossflo Plan by
virtue of such pre-existing condition), and shall provide that any covered
expenses incurred on or before the Effective Time during the plan year of the
applicable Crossflo Plan in which the Effective Time occurs by a Crossflo
Employee or a Crossflo Employee’s covered dependent shall be taken into account
for purposes of satisfying applicable deductible, coinsurance and maximum
out-of-pocket provisions after the Effective Time to the same extent as such
expenses are taken into account for the benefit of similarly situated employees
of Patriot and subsidiaries of Patriot.
(c) Registration.
(i) Patriot
shall use its best efforts to prepare and, not later than twelve (12) months
after the Closing Date, file with the SEC a Registration Statement covering the
resale of all the Patriot shares issued or issuable pursuant hereto as part of
the Merger Consideration (the “Registrable Securities”); provided, however, that
Patriot shall not be required to include in any such Registration Statement
Registrable Securities that are salable pursuant to SEC Rule 144 without
restriction if Patriot delivers the necessary information (including an opinion
of counsel) to and instructs its transfer agent that any restrictive legends may
be removed from such shares upon sale in accordance with SEC Rule144; provided,
further, that if during any time within twenty four (24) months of the Closing
Patriot fails to comply with its obligations under Section 5.2 (c)(viii) and the
Registrable Securities held by Crossflo Stockholder are not salable pursuant to
SEC Rule 144, Patriot shall add such Registrable Securities to an existing or
file a new Registration Statement for such Registrable
Securities. Patriot shall use its commercially reasonable efforts to
have the Registration Statement declared effective by the SEC as soon as
practicable. Patriot shall submit to the SEC, within three (3)
business days after Patriot learns that no review of such Registration Statement
will be made by the staff of the SEC or that the staff of the SEC has no further
comments
33
on such
Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
three (3) business days after the submission of such request. Patriot
shall keep such Registration Statement effective pursuant to Rule 415 at
all times until the earlier of (i) the date as of which the Crossflo
Stockholders may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144 (or
successor thereto) promulgated under the 1933 Act or (ii) the date on which
the Crossflo Stockholders have sold all the Registrable Securities covered by
such Registration Statement. To the extent that the registration
statement or the prospectus which is a part thereof requires amendment or
supplement under the Securities Act of 1933 and the rules adopted thereunder,
Patriot shall exercise best efforts to expeditiously amend or supplement such
registration statement, including the prospectus which is a part
thereof.
(ii) At any
time that (i) Patriot determines to register any of its Patriot Common
Shares, or to amend any filed registration which is not yet effective, either
for its own account or for the account of a holder of Patriot Common Shares or
as a result of a holder of Patriot Common Shares exercising demand registration
rights, other than a registration (A) relating solely to Patriot Common
Shares registered on Form S-4 or Form S-8 (or any successor forms), or
(B) with respect to which the Patriot Common Shares held by the Crossflo
Stockholders would not be legally permitted to be included, and
(ii) Patriot Common Shares issued pursuant to this Agreement and held by
one or more Crossflo Shareholders are not then the subject of a filed
registration statement or salable under Rule 144 of the SEC without
restriction, then Patriot shall:
(A) at least
15 days prior to the filing of a registration statement, other than as set forth
in (ii)(A) or (B) above, promptly give each Crossflo Stockholder holding such
Patriot Common Stock (each, an “Eligible Stockholder”) written notice thereof by
registered or certified mail, courier or personal delivery; provided that no
such notice shall be required in a non-underwritten registration, and all of
such stock shall be registered thereon; and
(B) use its
best efforts to include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all of the Registrable Securities held by such Eligible Stockholder
specified in a written request or requests, made within ten (10) days after
receipt of such written notice from Patriot by any Eligible Stockholder but only
to the extent that such inclusion does not diminish the number of securities
included by a holder of Patriot Common Shares who has demanded such
registration.
(iii) If the
registration of which Patriot gives notice is for a registered public offering
involving an underwriting, Patriot will so advise the Eligible Stockholders as
part of the written notice given pursuant to subsection
(ii)(A) above. In such event the right of any Eligible
Stockholder to registration pursuant to subsection (ii) above shall be
conditioned upon such Eligible Stockholder’s participation in such underwriting
and the inclusion of such Eligible Stockholder’s Registrable Securities in the
underwriting to the extent provided herein. The Eligible Stockholders
proposing to distribute their Registrable Securities through such underwriting
shall (together with Patriot and the other holders of Patriot Common Shares
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by
34
Patriot
(or by the holders of Patriot Common Shares who have demanded such
registration). Notwithstanding any other provision of this
Section 5.2(c), if the managing underwriter determines that marketing
factors require a limitation of the number of Patriot Common Shares to be
underwritten, the managing underwriter may limit the number of Patriot Common
Shares to be included in such registration. Patriot will so advise
the Eligible Stockholders and any other holder of Patriot Common Shares
distributing their Patriot Common Shares through the underwriting pursuant to
registration rights, and the number of Patriot Common Shares to be registered
and other securities that may be included in the registration and underwriting
shall be allocated among all stockholders in proportion, as nearly as
practicable, to the respective amounts of registrable securities held by such
stockholders and other securities held by other holders at the time of filing
the registration statement. If any Eligible Stockholder disapproves
of the terms of any such underwriting, he or she may elect to withdraw therefrom
by written notice to Patriot and the managing underwriter. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from registration, and shall not be transferred in a public
distribution prior to ninety (90) days after the effective date of the
registration statement relating to the underwritten offering.
(iv) Patriot
shall provide to each Eligible Stockholder a suitable number of prospectuses,
and supplements thereto, as soon as possible following the effectiveness of the
registration or the filing of the supplement, as the case may be.
(v) Patriot
shall have the right to terminate or withdraw any registration initiated by it
under Section 5.2(c)(iii) prior to the effectiveness of such registration,
but without prejudice to its obligation pursuant to this
Section 5.2(c).
(vi) Patriot
shall bear the expenses associated with the registration of Registrable
Securities pursuant to this Section 5.2(c) exclusive of underwriters’ and
brokers’ discounts and commissions and expenses of the Crossflo Stockholders’
legal counsel.
(vii) Patriot
will, and hereby does, indemnify, hold harmless and defend each of the Crossflo
Stockholders (each an “Indemnified Person”), against any losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable
attorneys’ fees, amount paid in settlement or expenses, joint or several
(collectively, “Claims”), incurred investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is nor may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue
statement or a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other “blue sky” laws of any jurisdiction
in which Registrable Securities are offered (“Blue Sky Filing”), or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
Patriot files any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light
35
of the
circumstances under which the statements therein were made, not misleading, or
(iii) any violation or alleged violation by Patriot of the 1933 Act, the
1934 Act, or any other law, including, without limitation, any state securities
law, or any rule or regulation therein relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the matters in the
foregoing clauses (i) through (iii) being, collectively,
“Violations”). Patriot shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in
this Section 5.2(c)(vii): (i) shall not apply to a Claim by
an Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to Patriot
by such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto; and (ii) shall not be available to the extent such claim is based
upon a failure of the Crossflo Stockholder to deliver or to cause to be
delivered the prospectus made available by Patriot.
(viii) With a
view to making available to the Crossflo Stockholders the benefits of
Rule 144 promulgated under the 1933 Act or any other similar rule or
regulation of the SEC that may at any time permit the Crossflo Stockholder to
sell securities of Patriot to the public without registration (“Rule 144”),
Patriot agrees to use reasonable commercial efforts to:
(a) make and
keep public information available, as those terms are understood and defined in
Rule 144; and
(b) file with
the SEC in a timely manner all reports and other documents required of Patriot
under the 1933 Act and the 1934 Act so long as Patriot remains subject to such
requirements and the filing of such reports and other documents is required for
the applicable provisions of Rule 144.
(c) Furnish
to any Crossflo Stockholder, so as long as the Crossflo Stockholder owns any
Registrable Securities, forthwith upon request (i) a written statement by
Patriot that it has complied with the reporting requirements of SEC Rule 144,
(ii) a copy of the most recent annual or quarterly report of Patriot and such
other reports and documents as may be so filed by Patriot, and (iii) such other
information as may be reasonably requested in availing any Crossflo Stockholder
of any rule or regulation of the SEC which permits the selling of any
Registrable Securities without registration.
5.3 Covenants of
Crossflo.
(a) Crossflo Stockholders
Vote. Subject to Section 5.3(d), Crossflo shall take all
actions required by the CGCL, the Crossflo Articles and the Crossflo Bylaws
either (i) to obtain the written consent of a majority of each outstanding class
of Crossflo Capital Stock or (ii) to duly call, give notice of, convene and hold
a special meeting of Crossflo Stockholders (the “Crossflo Stockholders Meeting”)
on the earliest practicable date, determined in reasonable consultation with
Patriot, in either case to approve the Merger, this Agreement, and the
other transactions contemplated hereby to the extent the approval of such other
transactions by the Crossflo Stockholders is required thereby.
36
(b) Conduct of Crossflo’s
Operations. During the period from the date of this Agreement
to the Effective Time, or the date, if any, on which this Agreement is earlier
terminated pursuant to Section 7.1, and except as may otherwise be agreed
in writing by the parties, Crossflo shall conduct its operations in the ordinary
course of business consistent with past practice, except as expressly
contemplated by this Agreement, and shall use its commercially reasonable
efforts to maintain and preserve its business organization and its material
rights and franchises and to retain the services of its officers and key
employees and maintain relationships with material customers, suppliers,
lessees, licensees and other third parties, and to maintain all of its material
operating assets in their current condition (normal wear and tear
excepted). Without limiting the generality of the foregoing, during
the period from the date of this Agreement to the Effective Time, or the date,
if any, on which this Agreement is earlier terminated pursuant to
Section 7.1, Crossflo shall not, except as otherwise expressly contemplated
by this Agreement or the transactions contemplated hereby or as set forth in
Section 5.3(d) of the Crossflo Disclosure Schedule or with the prior
written consent of Patriot:
(i) do or
effect any of the following actions with respect to its securities:
(A) adjust, split, combine or reclassify its capital stock, (B) make,
declare or pay any dividend or distribution on, or directly or indirectly
redeem, purchase or otherwise acquire, any shares of its capital stock or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock, (C) grant any person any right or option to acquire any
shares of its capital stock, (D) issue, deliver or sell or agree to issue,
deliver or sell any additional shares of its capital stock or any securities or
obligations convertible into or exchangeable or exercisable for any shares of
its capital stock or such securities (except pursuant to the exercise of
Crossflo options, warrants and securities convertible or exercisable for its
capital stock that are outstanding as of the date hereof), (E) enter into
any agreement, understanding or arrangement with respect to the sale, voting,
registration or repurchase of its capital stock, provided, however, that
Crossflo is hereby expressly permitted to take all lawful actions necessary in
order to (w) issue additional debt to Patriot (x) cause all
outstanding options to be exercised or cancelled, (y) cause all outstanding
warrants to be exercised or cancelled and (z) cause any outstanding
convertible debt instruments to become non-convertible; provided, however, the
foregoing shall not restrict Crossflo’s Board of Directors from approving option
grants to new hires in accordance with the Crossflo’s past
practices;
(ii) directly
or indirectly sell, transfer, lease, pledge, mortgage, encumber or otherwise
dispose of any of its material property or material assets other than in the
ordinary course of business consistent with past practice;
(iii) adopt or
propose any changes in the Crossflo Articles or the Crossflo
Bylaws;
(iv) merge or
consolidate with any other person;
(v) acquire a
material amount of assets or capital stock of any other person outside of the
ordinary course of business consistent with past practice;
(vi) make any
borrowings, incur, create, assume or otherwise become liable for any
indebtedness for borrowed money or assume, guarantee, endorse or otherwise as an
accommodation become responsible or liable for the obligations of any other
individual, corporation or other entity, other than in the ordinary course of
business, consistent with past practice (provided this restriction shall not
apply to any debt issued to Patriot);
(vii) create
any subsidiaries;
37
(viii) enter
into or modify any employment, severance, termination or similar agreements or
arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, any officer, director, consultant or employee other than
pursuant to Applicable Law or contractual commitments existing as of the date
hereof in the ordinary course of business consistent with past practice
(provided past practices shall not be deemed to include actions taken in
connection with the Merger) or grant any increase in the compensation or
benefits of directors, officers, employees, consultants or agents of Crossflo or
grant, re-price, or accelerate the exercise or payment of any Crossflo options
or warrants or other equity-based awards other than increases in the ordinary
course of business consistent with past practice;
(ix) enter
into, adopt or amend any Crossflo Plan, except as may be required by Applicable
Law;
(x) take any
action that could give rise to severance benefits payable to any officer or
director of Crossflo as a result of consummation of the transactions
contemplated by this Agreement;
(xi) change
any method or principle of accounting in a manner that is inconsistent with past
practice except to the extent required by generally accepted accounting
principles as advised by Crossflo’s regular independent
accountants;
(xii) settle
any Actions, whether now pending or hereafter made or brought involving,
individually or in the aggregate, an amount in excess of US$50,000 other than
settlement in the ordinary course of business or in accordance with their terms,
of liabilities disclosed, reflected or reserved against in the most recent
Crossflo financial statements (or the notes thereto) or incurred since the date
of such financial statements in the ordinary course of business;
(xiii) modify,
extend, amend in any material respect or terminate, or waive, release or assign
any rights or claims with respect to, any Contract set forth in
Section 4.16 in the Crossflo Disclosure, unless such action would not have
a Material Adverse Effect on Crossflo;
(xiv) enter
into any non-disclosure or confidentiality agreements or arrangements other than
in the ordinary course of business consistent with past practice (other than as
permitted, in each case, by Section 5.3(d));
(xv) write up,
write down or write off the book value of any assets, individually or in the
aggregate, in excess of $20,000 except for depreciation and amortization in
accordance with generally accepted accounting principles consistently
applied;
(xvi) incur or
commit to any capital expenditures in excess of US$25,000, other than those
incurred in the ordinary course of business;
(xvii) make any
payments in respect of policies of directors’ and officers’ liability insurance
(premiums or otherwise) other than premiums paid in respect of its current or
renewed or replacement policies;
(xviii) take any
action that would result in the representations and warranties set forth in
Article IV becoming false or inaccurate in any material
respect;
(xix) enter
into or carry out any other transaction other than in the ordinary and usual
course of business, including but not limited to signing any non-disclosure
agreements or teaming agreements, submitting any proposals for new procurements,
or closing any contracts with delivery schedules for the post closing
period;
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(xx) permit or
cause any Subsidiary to do any of the foregoing or agree or commit to do any of
the foregoing;
(xxi) make or
revoke any Tax election, file any material amended Tax Return, or settle any
material audit or other proceeding with any material Tax authority, except as
required by Applicable Law;
(xxii) enter
into any agreement to purchase, or to lease for a term in excess of one year,
any real property, provided that Crossflo (A) may, as a tenant, or a
landlord, renew any existing lease for a term not to exceed eighteen months and
(B) nothing herein shall prevent Crossflo, in its capacity as landlord,
from renewing any lease pursuant to an option granted prior to the date hereof;
or
(xxiii) agree in
writing to take any of the foregoing actions.
(c) Access to Information;
Confidentiality. Upon reasonable notice, Crossflo shall afford
to the officers, employees, accountants, counsel, financial advisors and other
representatives of Patriot reasonable access during normal business hours,
during the period prior to the Effective Time, to such of its properties, books,
contracts, commitments, records, all other information and data, officers and
employees as Patriot may reasonably request (provided Crossflo has such
information available or may prepare such information with commercially
reasonable efforts) and, during such period, Crossflo shall furnish promptly to
Patriot (a) a copy of each report, schedule, and other document filed,
published, announced or received by it during such period pursuant to the
requirements of Applicable Laws (other than documents which such party is not
permitted to disclose under Applicable Laws), and (b) consistent with its
legal obligations, all other information concerning it and its business,
properties and personnel as Patriot may reasonably request; provided, however, that
Crossflo may restrict the foregoing access to the extent that it reasonably
concludes, after consultation with outside legal counsel, that (i) any
Applicable Law requires Crossflo to restrict access to any properties or
information, (ii) providing such access would result in the loss of the
attorney-client privilege, (iii) such documents discuss the pricing or
dollar value of the transactions contemplated by this Agreement, (iv) such
documents contain competitively sensitive information, the sharing of which
could constitute a violation of any applicable Antitrust Laws or (v) such
disclosure is reasonably likely to result in a breach of or default under any
contract or agreement to which Crossflo is a party. The parties shall
hold any such information in confidence to the extent required by, and in
accordance with, the provisions of the letter of intent dated as of May 23,
2008, between Patriot and Crossflo (the “Letter of Intent”). Each
party shall make all commercially reasonable efforts to minimize disruption to
the business of the other party and its subsidiaries which may result from the
requests for data and information hereunder. All requests for access
and information shall be coordinated through senior executives of the parties to
be designated.
(d) No
Solicitation.
(i) Crossflo
will not, and will not permit or cause any Subsidiary or any of the directors or
officers of Crossflo or any Subsidiary, and will direct Crossflo’s employees,
agents and representatives not to, directly or indirectly, solicit, initiate,
encourage, or furnish or disclose non-public information in furtherance of, or
otherwise facilitate any inquiries that may be reasonably expected to lead to,
the making of any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, or similar transaction involving, or any purchase
of 10% or more of the assets or any equity of, Crossflo or any Subsidiary or any
other business combination other than the transactions contemplated by this
Agreement (any such proposal or offer, an “Acquisition Proposal”).
39
(ii) Crossflo
will not, and will not permit or cause any Subsidiary or any of the officers or
directors of it or any Subsidiary to, and shall direct its and such Subsidiary’s
employees, agents and representatives not to, directly or indirectly, engage in
any negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person relating to an Acquisition Proposal,
after the date of this Agreement, or otherwise facilitate any effort or attempt
to make or implement an Acquisition Proposal; provided, however, nothing in this
Agreement shall prevent Crossflo or its board of directors from, at any time
prior to the Effective Time, (A) providing information in response to a
request therefor by a person who has made an unsolicited bona fide written
Acquisition Proposal if the board of directors of Crossflo receives from such
person so requesting such information an executed confidentiality agreement or
non-disclosure agreement on customary terms; (B) engaging in any
negotiations or discussions with any person who has made an unsolicited bona
fide written Acquisition Proposal; or (C) recommending such Acquisition
Proposal to the Crossflo Stockholders, if and only to the extent that
(x) in each such case referred to in clause (A), (B) or
(C) above, Crossflo has not violated any of the restrictions set forth in
this Section 5.3(d) and the board of directors of Crossflo determines in
good faith after consultation with outside legal counsel that such action is
reasonably likely to be necessary in order for its directors to comply with
their respective fiduciary duties under Applicable Law and (y) in the case
referred to in clause (C) above, the board of directors of Crossflo
determines in good faith (after consultation with its financial advisor) that
such Acquisition Proposal, if accepted, is reasonably likely to be consummated,
taking into account all legal, financial, and regulatory aspects of the proposal
and the person making the proposal and would, if consummated, result in a more
favorable transaction than the transaction contemplated by this Agreement,
taking into account the long-term prospects and interests of Crossflo and the
Crossflo Stockholders; and provided, further, that prior
to furnishing any information to such person, Crossflo furnishes such
confidential information or data to Patriot (to the extent such information has
not been previously furnished by Crossflo to Patriot).
(iii) Crossflo
will immediately cease all existing activities, discussions and negotiations
with any parties conducted heretofore with respect to any Acquisition Proposal
and request the return or the destruction of all confidential information
regarding such party provided to any such parties prior to the date hereof
pursuant to the terms of any confidentiality agreements or otherwise. Crossflo
will notify Patriot immediately if any such inquiries, proposals, or offers are
received by, any such information is requested from, or any such discussions or
negotiations are sought to be initiated or continued with, any of its
representatives indicating, in connection with such notice, the name of such
person and the material terms and conditions of any proposals or offers and
thereafter shall keep Patriot informed, on a reasonably current basis, on the
status and terms of any such proposals or offers and the status of any such
negotiations or discussions.
40
(iv) Crossflo’s
non-solicitation covenant, as set forth in this Section 5.3(d), shall
continue through August 29, 2008 (the “Standstill Period”). In
the event that a transaction has not been consummated by August 29, 2008
and both parties remain in active discussions, the Standstill period shall
automatically be extended through September 30, 2008. Any
further extension of the Standstill Period would require agreement of both
Patriot and Crossflo.
(e) Investment Representations
by Crossflo Stockholders. Crossflo shall use commercially
reasonable efforts to cause each Crossflo Stockholder who notifies Crossflo or
Patriot of such stockholder’s intention to exchange his or her Certificates for
certificates evidencing Patriot Common Shares to deliver to Crossflo, on or
prior to the Closing Date, a signed certificate, substantially in the form
attached as Exhibit D (the “Investment Representation Certificate”), and
Crossflo shall deliver to Patriot, at the Closing, all such Investment
Representation Certificates received by Crossflo; provided, however, that
Crossflo’s failure to receive any such Investment Representation Certificate
despite commercially reasonable efforts in such regard shall not constitute a
breach of this Agreement.
ARTICLE VI
CONDITIONS
6.1 Conditions to the
Obligations of Each Party. The
obligations of Patriot, Subcorp and the Crossflo Principal Officers to
consummate the Merger shall be subject to the satisfaction or waiver of the
following conditions:
(a) This
Agreement, the Merger, and the transactions contemplated hereby shall have been
approved and adopted by the respective boards of directors of Crossflo and
Patriot and stockholders of Crossflo in the manner required by any Applicable
Law.
(b) No
provision of any Applicable Law or regulation and no judgment, injunction,
order, decree, ruling, assessment or arbitration award of any Governmental
Authority or arbitrator and any Contract with any Governmental Authority
pertaining to compliance with Applicable Law shall prohibit or enjoin the
consummation of the Merger or the transactions contemplated by this Agreement or
limit the ownership or operation by Patriot, Crossflo or any of their respective
subsidiaries of any material portion of the businesses or assets of Patriot or
Crossflo.
(c) There
shall not be pending any Action (i) challenging or seeking to restrain or
prohibit the consummation of the Merger or any of the other transactions
contemplated by this Agreement, (ii) except to the extent consistent with
the obligations of the parties under Section 5.1(a), seeking to prohibit or
limit the ownership or operation by Patriot, Crossflo or any of their respective
subsidiaries of, or to compel Patriot, Crossflo or any of their respective
subsidiaries to dispose of or hold separate, any material portion of the
business or assets of Patriot, Crossflo or any of their respective subsidiaries,
as a result of the Merger or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on the ability of Patriot to
acquire or hold, or exercise full rights of ownership of, any shares of capital
stock of the Surviving Corporation, including the right to vote such capital
stock on all matters properly presented to the stockholders of the Surviving
Corporation or (iv) seeking to prohibit Patriot or the Subsidiary of
Patriot from effectively controlling in any material respect the business or
operations of Patriot or the subsidiaries of Patriot.
41
6.2 Conditions to Obligations of
Crossflo and the Crossflo Principal Officers. The
obligations of Crossflo and the Crossflo Principal Officers to consummate the
Merger and the transactions contemplated hereby shall be subject to the
fulfillment of the following conditions unless waived by Crossflo:
(a) Each of
the representations and warranties of each of Patriot and Subcorp contained in
this Agreement shall be true and correct in all material respects (but without
regard to any materiality qualifications or references to Material Adverse
Effect contained in any specific representation or warranty), in each case on
the date of this Agreement and on and as of the Closing Date as though made on
and as of the Closing Date (except for representations and warranties made as of
some other specified date, in which case as of such specified date), except
where any such failure of the representations and warranties to be true and
correct, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on Crossflo.
(b) Each of
Patriot and Subcorp (i) shall have performed or complied with all
agreements and covenants required to be performed by it under this Agreement at
or prior to the Effective Time that are qualified as to Material Adverse Effect
and (ii) shall have performed or complied in all material respects with all
agreements and covenants required to be performed by it under this Agreement at
or prior to the Effective Time that are not qualified as to Material Adverse
Effect except where such non-performance or non-compliance individually or in
the aggregate would not reasonably be expected to have a Material Adverse Effect
on Patriot.
(c) Each of
Patriot and Subcorp shall have furnished Crossflo and the Crossflo Principal
Officers with a certificate dated the Closing Date signed on behalf of it by the
Chairman, President or any Vice President to the effect that the conditions set
forth in Sections 6.2(a) and (b) have been satisfied.
6.3 Conditions to Obligations of
Patriot and Subcorp. The
obligations of Patriot and Subcorp to consummate the Merger and the other
transactions contemplated hereby shall be subject to the fulfillment of the
following conditions unless waived by Patriot:
(a) Each of
the representations and warranties of Crossflo and the Crossflo Principal
Officers contained in this Agreement shall be true and correct in all material
respects (but without regard to any materiality qualifications or references to
Material Adverse Effect contained in any specific representation or warranty),
in each case, on the date of this Agreement and on and as of the Closing Date as
though made on and as of the Closing Date (except for representations and
warranties made as of some other specified date, in which case, as of such
specified date), except where any such failure of the representations and
warranties to be true and correct would not reasonably be expected to have a
Material Adverse Effect on Crossflo, Patriot or the transactions contemplated by
this Agreement.
(b) Crossflo
and the Crossflo Principal Officers (i) shall have performed or complied
with all agreements and covenants required to be performed by it under this
Agreement at or prior to the Effective Time that are qualified as to Material
Adverse Effect and (ii) shall have performed or complied in all material
respects with all agreements and covenants required to be performed by it or
them under this Agreement at or prior to the Effective Time that are not
qualified as to Material Adverse Effect except where such non-performance or
non-compliance would not reasonably be expected to have a Material Adverse
Effect on Crossflo.
42
(c) Crossflo
shall have furnished Patriot with an officer’s certificate dated the Closing
Date to the effect that the conditions set forth in Sections 6.3(a) and (b)
have been satisfied.
(d) Since the
date of this Agreement, except as set forth in Section 4.10 of the Crossflo
Disclosure Schedule delivered as of such date, there shall not have been any
change in the assets, liabilities, business prospects, results of operations or
financial condition of Crossflo that would constitute a Material Adverse Effect
on Crossflo as of the Closing Date.
(e) All
consents set forth on Schedule 6.3(e) attached hereto shall have been
obtained by Crossflo or waived by Patriot.
(f) Each of
Xxxxxx Xxxx and Xxxxx Xxxxxx shall have executed an employment agreement with
Crossflo in a form reasonably acceptable to Patriot and Messrs. Xxxx and Xxxxxx,
as applicable (each, a “Crossflo Executive Employment Agreement”).
(g) Intentionally
Left Blank.
(h) As a
minimum, twelve (12) of the fourteen (14) current Crossflo employees must accept
job offers from Patriot, evidencing their support for the proposed transaction
and their desire to continue working for Patriot.
(i) Each
outstanding option or warrant to acquire, and each issued note convertible into,
Crossflo Capital Stock, all of which are set forth in Schedules 4.4(a) and
4.4(b) in the Crossflo Disclosure Schedule, whether or not exercisable, vested
or converted, shall have been exercised, cancelled, or otherwise disposed of so
that, as of the Effective Time, no person shall have any options, warrants, or
other rights to buy, or convert into, any securities of the Surviving
Corporation.
(j) To the
extent that any Intellectual Property used or required for the business is held
by a person other than Crossflo, Crossflo must receive a satisfactory assignment
of such Intellectual Property.
(k) The
Xxxxxx Group shall have completed its preparation of an auditable balance sheet
of Crossflo as of June 1, 2006 and auditable financial statements of Crossflo
for the twelve month periods ended May 31, 2008 and May 31,
2007. Such financial statements shall not contain adverse changes
from the financial statements previously disclosed by Crossflo to Patriot that
would be expected to have a Material Adverse Effect on Crossflo.
(l) Not more
than 1% of Crossflo’s preferred shares, and not more than 10% of its common
shares, shall be “dissenting shares,” as that term is defined in
Section 1300(b) of the CGCL.
ARTICLE VII
TERMINATION AND
AMENDMENT
7.1 Termination. This
Agreement may be terminated and the Merger may be abandoned prior to the
Effective Time (notwithstanding any approval of this Agreement by Crossflo
Stockholders):
(a) by mutual
written consent of Patriot, Crossflo and the Crossflo Principal
Officers;
43
(b) by
Patriot or Crossflo:
(i) if there
shall be any law or regulation that makes consummation of the Merger illegal or
otherwise prohibited, or if any judgment, injunction, order or decree of a court
or other competent Governmental Authority enjoining Patriot or Crossflo from
consummating the Merger shall have been entered and such judgment, injunction,
order or decree shall have become final and nonappealable; provided, that the
party seeking to terminate this Agreement pursuant to this
Section 7.1(b)(i) shall have used commercially reasonable efforts to
prevent the entry of or remove such impediment to the Merger;
(ii) if the
Merger shall not have been consummated before September 30, 2008; provided,
however, that the right to terminate this Agreement under this
Section 7.1(b)(ii) shall not be available to any party whose failure to
perform any material covenant or obligation under this Agreement has been the
cause of or resulted in the failure of the Merger to occur on or before such
date; or
(iii) if the
requisite vote of the Crossflo Stockholders to approve the Merger and the
transactions contemplated hereby shall not have been obtained.
(c) by
Patriot, if Crossflo has breached in any material respect any of its
representations and warranties in Article IV of this Agreement, which
breach (i) would give rise to failure of the condition set forth in
Section 6.3(a) and (ii) has not been or is incapable of being cured by
Crossflo within 15 days after its receipt of written notice thereof from
Patriot;
(d) by
Crossflo, if Patriot or Subcorp has breached in any material
respect any of their respective representations and warranties in
Article III of this Agreement, which breach (i) would give rise to failure
of the condition set forth in Section 6.2(a) and (ii) has not
been or is incapable of being cured by Patriot or Subcorp within 15 days after
their receipt of written notice thereof from Crossflo.
7.2 Effect of
Termination. In
the event of the termination of this Agreement pursuant to Section 7.1,
this Agreement, except for Section 7.3 and Section 5.1(b), shall
become void and have no effect, without any liability on the part of any party
or such party’s directors, officers or stockholders. Notwithstanding the
foregoing, nothing in this Section 7.2 or in Section 7.3 shall relieve any
party to this Agreement of liability for a material breach of any provision of
this Agreement.
7.3 Termination
Fee. A
termination fee equal to the sum of verifiable fees incurred by the injured
party plus an administrative overhead charge (calculated as 15% of the total
verifiable fees) (“Termination Fee”) for a total Termination Fee not to exceed
$500,000 will be paid by:
(a) Crossflo
to Patriot in the event of the termination of this Agreement by Crossflo for any
reason other than pursuant to Section 7.1(d);
(b) Patriot
to Crossflo in the event of the termination of this Agreement by Patriot for any
reason other than pursuant to Section 7.1 (c).
7.4 Payment of Termination
Fee. Any
fee due under this Section 7.3 shall be paid by wire transfer of same-day
funds concurrently with the termination of this Agreement.
44
ARTICLE VIII
GENERAL SURVIVAL;
INDEMNIFICATION
8.1 Survival of Representations
and Warranties.
(a) The
representations, warranties, covenants and agreements made herein by Crossflo
shall survive, irrespective of any different survival period under any
applicable statute of limitation, until the first anniversary of the Closing
Date (the “Cut-Off Date”).
(b) Irrespective
of any different survival period under any applicable statute of limitations,
the representations, warranties, covenants and agreements made herein by Patriot
shall survive until the Cut-Off Date.
(c) This
Section 8.1 shall not limit any covenant or agreement of the parties
hereto, which by its terms contemplates performance after the Effective Time or
after the termination of this Agreement.
8.2 Indemnification.
(a) The
Crossflo Stockholders (solely to the extent of the Escrow Merger Consideration)
and the Crossflo Principal Officers (solely to the extent of the Indemnity
Limit), jointly and severally (collectively, the “Crossflo Indemnifying
Parties”), shall indemnify and hold Patriot, Subcorp and the Surviving
Corporation (collectively, the “Patriot Indemnified Parties”) harmless from and
against any and all liability, loss, cost and expense whatsoever, including
reasonable fees of legal counsel and related disbursements (collectively,
“Damages”), incurred by the Patriot Indemnified Parties as a result of or
related to any breach of any representation, warranty, covenant or agreement
made as of the Closing Date by Crossflo in Article IV or Article V of
this Agreement or in any certificate or schedule delivered pursuant thereto,
subject to the following:
(i) In no
circumstance shall the Crossflo Stockholders be obligated to pay Damages, in
aggregate, in excess of the Escrow Merger Consideration.
(ii) In no
circumstance shall a Crossflo Principal Officer be obligated to pay Damages, in
aggregate, in excess of the amount of Merger Consideration actually received by
such Crossflo Principal Officer (the aggregate Merger Consideration actually
received by all Crossflo Principal Officers (including any entity where any such
Crossflo Principal Officer has a beneficial interest) as a group being the
“Indemnity Limit”). For purposes of clarity, the amount of Merger
Consideration actually received by a Crossflo Principal Officer for purposes of
calculating the Indemnity Limit shall be reduced by any Damages paid by such
Crossflo Principal Officer out of the Escrow Merger Consideration as a result of
such Crossflo Principal Officer being a Crossflo Stockholder.
(iii) No such
Damages shall be required to be paid by the Crossflo Principal Officers until
and unless the Escrow Amount has been fully applied to Damages and thereafter
the aggregate amount of Damages exceeds $50,000, but if such aggregate amount of
Damages exceeds $50,000 then the full amount of such Damages up to the Indemnity
Limit shall be required to be paid by the Crossflo Principal
Officers. For purposes of clarity, the $50,000 Damages threshold in
this section is in addition to the Basket set forth in Section 2.5(a)
above.
45
(iv) To the
extent any Crossflo Stockholder is required to pay pro rata Damages after
receiving disbursements from the Escrow Account, such disbursements may be
required to be used to pay such pro rata
Damages.
(b) Patriot,
Subcorp and the Surviving Corporation, jointly and not severally (collectively,
the “Patriot Indemnifying Parties”), shall indemnify and hold the Crossflo
Stockholders (collectively, the “Crossflo Indemnified Parties”) harmless from
and against any and all Damages incurred by the Crossflo Indemnified Parties as
a result of or related to any breach of any representation, warranty, covenant
or agreement made by Patriot in this Agreement. In no event shall the
aggregate liability of Patriot, Subcorp and the Surviving Corporation exceed an
amount equal to the Merger Consideration, less the sum of (i) any payments
made pursuant to Section 2.6.
(c) If any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against the
Crossflo Indemnifying Parties or the Patriot Indemnifying Parties with respect
to which indemnity may be sought pursuant to this Article VIII, the
following procedures shall apply:
(i) The
applicable Patriot Indemnified Parties or Crossflo Indemnified Parties (either,
the “Indemnified Parties”) shall promptly give written notice thereof to the
applicable Indemnifying Parties. The notice shall state the
information then available regarding the amount of the claim or Damages and
shall specify the provision or provisions of this Agreement under which the
right to indemnification is being asserted.
(ii) If within
thirty days after receiving such notice, the Indemnifying Parties give written
notice to the Indemnified Parties stating they intend to defend against such
claim or Damages at their own cost and expense, the defense (including the right
to settle or compromise such action) of such matter, including selection of
counsel (subject to the consent of the Indemnified Parties, which consent shall
not be unreasonably withheld) and the sole power to direct and control such
defense, shall be by the Indemnifying Parties and the Indemnifying Parties shall
make no payment in respect of such claim or Damages to any third party as long
as the Indemnifying Parties are conducting a good faith and diligent
defense. In any such defense, the Indemnifying Parties will consult
with the Indemnified Parties in connection with the Indemnifying Parties’
defense.
(iii) In any
such proceeding, each of the Indemnified Parties shall have the right to retain
its own counsel, at its own cost and expense unless: (A) the
Indemnifying Parties and the Indemnified Parties shall have mutually agreed to
the contrary; (B) the Indemnifying Parties have failed within a reasonable
time to retain counsel, in which event the Indemnified Parties shall have the
right to retain counsel at the expense of the Indemnifying Parties; or
(C) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnified Parties and the Indemnifying Parties and
representation of both parties by the same counsel would be in the reasonable
opinion of counsel to the Indemnified Party, inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Parties shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for fees and expenses of more
than one separate firm (in addition to any local counsel) for the Indemnified
Parties, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm sought to be indemnified by the
Indemnifying Parties with respect to which the Indemnified Parties seeks to be
indemnified by the Indemnifying Parties shall be designated in writing by the
Indemnifying Parties. The Indemnifying Parties shall not be liable
for any settlement of any proceeding affected without such consent or if there
be a final judgment for the plaintiff, the Indemnifying Parties agree to
indemnify the Indemnified Parties from and against any loss or liability by
reason of such settlement or judgment.
46
(iv) Notwithstanding
the foregoing, if at any time the Indemnified Parties shall have requested the
Indemnifying Parties to reimburse the Indemnified Parties for fees and expenses
of counsel as contemplated herein, the Indemnifying Parties agree that they
shall be liable for any settlement of any proceeding effected without their
written consent herein if (x) such settlement is entered into more than 30
days after receipt by the Indemnifying Parties of the aforesaid request; and
(y) the Indemnifying Parties shall not have reimbursed the Indemnified
Parties in accordance with such request (other than due to a reasonable dispute
as to the validity of such request) prior to the date of
settlement. If no such notice of intent to dispute and defend is
given by the Indemnifying Parties, or if such diligent good faith defense is not
being or ceases to be conducted, the Indemnified Parties shall, at the expense
of the Indemnifying Parties, undertake the defense of such claim or Damages with
counsel selected by the Indemnified Parties, and shall have the right to
compromise or settle the same exercising reasonable business
judgment. The Indemnified Parties shall make available all
information and assistance that the Indemnifying Parties may reasonably request
and shall cooperate with the Indemnifying Parties in such defense.
(v) Notwithstanding
anything herein to the contrary, the Indemnifying Parties shall have the right
to settle all claims of third parties for which indemnification is payable
hereunder without the consent of the Indemnified Parties so long as such
settlement releases the Indemnified Parties from all liability for or in
connection with such action.
(d) Notwithstanding
anything herein to the contrary, no claim by the Indemnified Parties against the
Indemnifying Parties may be made unless written notice of such breach is given
in accordance with this Article VIII prior to the expiration of the thirty
day period immediately following the Cut-Off Date.
(e) Except in
the case of fraud and for any nonmonetary, equitable relief to which any
Indemnified Party may be entitled, the rights and remedies set forth in
Section 8.2 shall constitute the sole and exclusive rights and remedies of
the parties hereto under or with respect to the subject matter of this
Agreement.
8.3 Insurance
Recoveries. The
Indemnified Party will use its commercially reasonable efforts to first recover,
under any insurance policy maintained by the Indemnified Party, any Damages
covered by such insurance before seeking indemnification under
Section 8.2. If, notwithstanding such efforts, the Indemnifying
Party is obligated to provide indemnification under Section 8.2 for Damages
covered by the insurance in question then, to the extent permissible under
Applicable Law and the applicable insurance policy, the Indemnified Party shall
assign to the Indemnifying Party all of its contractual and tort rights against
the insurer in connection with the insurer’s failure to perform under such
insurance, and shall cooperate with the Indemnifying Party, as reasonably
requested, in the prosecution of such rights.
47
ARTICLE IX
MISCELLANEOUS
9.1 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally, sent by facsimile (with written
confirmation of successful delivery) or dispatched by a nationally recognized
overnight courier service to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice from such party
to the other parties hereto):
(a) if to
Patriot or Subcorp:
Patriot
Scientific Corporation
0000
Xxxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxxxx 00000
with a
copy to:
The Law
Office of Xxxx X. Xxxxxxxx
000 Xxxx
Xxxxxxxx, Xxxxx 0000
Xxx
Xxxxx, Xxxxxxxxxx 00000
(b) if to
Crossflo:
Crossflo
Systems, Inc.
00000 Xx
Xxxxxx Xxxx
Xxxxx
000
Xxx
Xxxxx, Xxxxxxxxxx 00000
Attn:
Chief Executive Officer
with a
copy to:
DLA Piper
US LLP
0000
Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx
Xxxxx, Xxxxxxxxxx 00000
Attn:
Xxxx Xxxxxx, Esq.
9.2 Interpretation.
(a) When a
reference is made in this Agreement to an Article or Section, such reference
shall be to an Article or Section of this Agreement unless otherwise
indicated. The headings, the table of contents and the index of
defined terms contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes,” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”
(b) For the
purposes of any provision of this Agreement, a “Material Adverse Effect” with
respect to any party shall be deemed to occur if any event, change or effect has
occurred which has a material adverse effect on the business, assets (including
intangible assets), liabilities (contingent or otherwise), results of
operations, business prospects, or financial condition of such party taken as a
whole, or a material adverse effect on the ability of such party to timely
perform its obligations under this Agreement and the other transaction documents
contemplated hereby; provided, however, none of the
following shall be deemed in themselves, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been, a Material Adverse Effect:
48
(i) with
respect to any party, any change in or effect upon the assets (including
intangible assets), liabilities (contingent or otherwise), financial condition,
business prospects, or results of operations of such party directly or
indirectly arising out of or attributable to any decrease in the market price of
Patriot Common Shares (but not any change or effect underlying such decrease to
the extent such change or effect would otherwise constitute a Material Adverse
Effect on Patriot);
(ii) with
respect to any party, any change in or effect upon the assets (including
intangible assets), liabilities (contingent or otherwise), financial condition,
business prospects, or results of operations of such party directly or
indirectly arising out of or attributable to (A) conditions, events, or
circumstances generally affecting the economy of the United States, (B) the
general state of industries and market sectors in which such party operates or
(C) any act or threat of terrorism or war anywhere in the world, any armed
hostilities or terrorist activities anywhere in the world, any threat or
escalation of armed hostilities or terrorist activities anywhere in the world or
any governmental or other response or reaction to any of the
foregoing;
(iii) with
respect to Crossflo, any change in or effect upon the business, assets
(including intangible assets), liabilities (contingent or otherwise), financial
condition, or results of operations of Crossflo directly or indirectly arising
out of or attributable to the loss by Crossflo of any of its business prospects
or customers (including business of such business prospects or customers),
suppliers or employees (including, without limitation, any financial consequence
of such loss of customers (including business of such customers), suppliers or
employees) due primarily to the transactions contemplated hereby or the public
announcement of this Agreement, in each case arising after the date of this
Agreement;
(iv) with
respect to Crossflo, any change in or effect upon the assets (including
intangible assets), liabilities (contingent or otherwise), financial condition,
business prospects, or results of operations of such party directly or
indirectly arising out of or attributable to any action taken by Crossflo that
is required by this Agreement, the failure by Crossflo to take any action that
is prohibited by this Agreement, or any action that is taken, or the failure to
take action, by Crossflo in any case to which Patriot has approved, consented to
or requested in writing; and
(v) Crossflo’s
failure to meet any internal or published projections, forecast or other
predictions (it being understood that the underlying cause or causes of any such
failure may be deemed to constitute Material Adverse Effect and may be taken
into consideration when determining whether a Material Adverse Effect has
occurred).
(c) For
purposes of this Agreement, a “Subsidiary” when used with respect to any party
means any individual partnership, firm, corporation, association, trust,
unincorporated organization (including any representative office or branch) or
other entity under the laws of any jurisdiction, (i) of which such party or
another subsidiary of such party is a general partner (excluding partnerships,
the general partnership interests of which held by such party or the Subsidiary
of such party do not have 50% or more of the voting interests in such
partnership) or (ii) 50% or more of the securities or other interests of
which having by their terms ordinary voting power to elect at least 50% of the
board of directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such party or one or more of its subsidiaries (or if there are no such voting
securities or interests, 50% or more of the equity interests of which is
directly or indirectly owned or controlled by such party or one or more of its
subsidiaries).
49
(d) For
purposes of this Agreement, “Affiliate” means a person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with another person or beneficially owns or has the power
to vote or direct the vote of 10% or more of the voting stock (or of any other
form of general partnership, limited partnership or voting equity interest in
the case of a person that is not a corporation) of such other
person. For purposes of this definition, “control,” including the
terms “controlling and “controlled” means through the ownership of voting
securities, by contract or credit arrangement, as trustee, partner or executor
or otherwise.
(e) For
purposes of this Agreement, “Knowledge” means with respect to any party the
actual knowledge after reasonable inquiry of the following individuals:
(i) with respect to Crossflo, Xxxxxxx Xxxxxxxxxxx, Xxxxxx Xxxx and Xxxxx
Xxxxxx; and (ii) with respect to Patriot or Subcorp, Xxxx Xxxxxxx and Xxxxx
Xxxxxxx. With respect each of the Principal Officers, “Knowledge” for
purposes of this Agreement means the actual knowledge of such individual and
such knowledge the individual should possess in the reasonable exercise of his
duties as an officer of Crossflo.
9.3 Counterparts. This
Agreement may be executed in counterparts, which together shall constitute one
and the same Agreement. The parties may execute more than one copy of
the Agreement, each of which shall constitute an original.
9.4 Entire
Agreement. This
Agreement (including the documents and the instruments referred to herein)
constitute the entire agreement among the parties and supersede all prior
agreements and understandings, agreements or representations by or among the
parties, written and oral, with respect to the subject matter hereof and
thereof.
9.5 Third-Party
Beneficiaries. Nothing
in this Agreement, express or implied, is intended or shall be construed to
create any third-party beneficiaries, except to the extent provided herein with
respect to Crossflo Stockholders not party to this Agreement.
9.6 Governing Law;
Venue.
(a) Except to
the extent that the laws of the jurisdiction of organization of any party
hereto, or any other jurisdiction, are mandatorily applicable to the Merger or
to matters arising under or in connection with this Agreement, this Agreement
shall be governed by the laws of the State of California without regard to its
conflict of laws rules. Each of the parties hereto agrees that a
final judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) Each of
the parties hereto irrevocably consents to the service of any summons and
complaint and any other process in any other action or proceeding relating to
the Merger, on behalf of itself or its property, by the personal delivery of
copies of such process to such party. Nothing in this
Section 9.6 shall affect the right of any party hereto to serve legal
process in any other manner permitted by law.
50
9.7 Arbitration. The
parties to this Agreement shall submit to binding arbitration before a single,
neutral arbitrator of any dispute, controversy or claim arising out of, or
relating to, the transactions contemplated by this Agreement or any breach
hereof, provided, however, that the
parties retain their right to, and shall not be prohibited, limited or in any
other way restricted from, seeking or obtaining equitable relief from a court
having jurisdiction over the parties. Such arbitration shall be
governed by and conducted through the American Arbitration Association in
accordance with the Commercial Dispute Resolution Procedures. The
arbitration hearing shall be held in San Diego, California at a place to be
designated by the parties or, in the absence of their agreement, by the
arbitrator.
9.8 Specific
Performance. The
transactions contemplated by this Agreement are unique. Accordingly,
each of the parties acknowledges and agrees that, in addition to all other
remedies to which it may be entitled, each of the parties hereto is entitled to
a decree of specific performance, provided such party is not in material default
hereunder. The party prevailing in any proceeding seeking such a
decree shall be entitled to payment of all reasonable legal fees and expenses by
the non-prevailing party.
9.9 Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
9.10 Expenses. All
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses, provided that Patriot shall be responsible for fees and
costs charged by the Xxxxxx Group and Xxxxxx & Co, in connection with the
preparation and audit, respectively, of Crossflo financial
statements. On or before closing, Crossflo shall provide Patriot with
a good faith estimate of the legal and accounting fees it will incur in
connection with this Agreement and the transactions contemplated hereby (the
“Estimated Transaction Expenses”).
9.11 Severability. The
invalidity or unenforceability in whole or in part of any covenant, promise or
undertaking, or any section, subsection, sentence, clause, phrase, word, or any
of the provisions of this Agreement will not affect the validity or
enforceability of the remaining portions of this Agreement. If for any reason,
any provision is determined to be invalid or in conflict with any existing, or
future law or regulation by a court or agency having valid jurisdiction, such
will not impair the operation or have any other effect upon such other
provisions of this Agreement as may remain otherwise valid, and the latter will
continue to be given full force and effect and bind the parties
hereto.
9.12 Letter of
Intent. Patriot
and Crossflo acknowledge and agree that the execution and delivery of this
Agreement by the parties hereto terminates the Letter of Intent and that their
respective obligations thereunder are hereby null and void.
9.13 Amendment. This
Agreement may be amended only by agreement in writing executed by all of the
parties hereto; provided, however, that Patriot
and Crossflo shall be entitled to amend, and to deliver at closing as so
amended, the Patriot Disclosure Schedule and the Crossflo Disclosure Schedule,
respectively, without the written consent of the other parties hereto; provided further,
that no amendment to Section 3.14 in the Patriot Disclosure Schedule or to
Section 4.10 in the Crossflo Disclosure Schedule shall restrict or prohibit
the right of the parties to terminate this Agreement pursuant to
Section 7.1.
51
IN WITNESS WHEREOF, Patriot,
Subcorp, Crossflo and the Crossflo Principal Officers have signed this Agreement
and Plan of Merger as of the date first written above.
|
PATRIOT SCIENTIFIC
CORPORATION
By:
___________________________________
Name: _____________________
Title: ______________________
SUBCORP
By: ___________________________________
Name: _____________________
Title: ______________________
|
|
|
CROSSFLO SYSTEMS,
INC.
By: ___________________________________
Name: _____________________
Title: ______________________
|
|
|
CROSSFLO PRINCIPAL
OFFICERS
_________________________________________
Xxxxxx
Xxxx
_________________________________________
Xxxxx
Xxxxxx
_________________________________________
Xxxxxxx
Xxxxxxxxxxx
|
52
EXHIBIT A
Exchange
Agent Instructions
EXHIBIT B
Letter of
Transmittal
EXHIBIT C
Escrow
Agreement
EXHIBIT D
Investment
Representation Certificate
SCHEDULE 1
Merger
Consideration Allocation per Crossflo Stockholder
(See
attached spreadsheet)
SCHEDULE 1A
Calculation and Allocation
of
Closing Stock
Consideration
SCHEDULE 1B
Calculation of Escrow Stock
Consideration
SCHEDULE
6.3(e)
Required Consents
Crossflo
shall have obtained consent from Hewlett Packard to the assignment of the
agreement between Crossflo and Hewlett Packard as a result of the
Merger.
Crossflo
shall have obtained consent from EC-One to the assignment of the agreement
between Crossflo and EC-One as a result of the Merger.
[________ __],
2008
EXCHANGE
AGENT INSTRUCTIONS
[Exchange
Agent]
Ladies
and Gentlemen:
Pursuant
to that certain Agreement and Plan of Merger (the “Merger Agreement”),
dated as of [__________
___], 2008, by and among Patriot Scientific Corporation, a Delaware
corporation (“Patriot” or “Buyer”), PTSC
ACQUISITION 1 CORP., a California corporation and a wholly-owned subsidiary of
Patriot (“Subcorp”), Crossflo
Systems, Inc., a California corporation (“Crossflo”), Xxxxx
Xxxx, an individual resident in the State of California, Xxxxx Xxxxxx, an
individual resident in the State of California, and X. X. Xxxxxxxxxxx, M.D., an
individual resident in the State of California, (collectively, the “Crossflo Principal
Officers”), Subcorp will be merged with and into Crossflo (the “Merger”). The
Merger Agreement provides, among other things, for the conversion of each share
of Crossflo’s issued and outstanding capital stock (collectively, “Crossflo Stock”, but
exclusive of Dissenting Shares) into the right to receive (i) cash and (ii) a
number of shares of Patriot common stock (“Patriot
Stock”). Except as otherwise defined herein, capitalized terms
used herein have the meanings specified in the Merger Agreement.
Patriot
and Crossflo request, and you have agreed, that you will act as exchange agent
(the “Exchange
Agent”) in connection with the Merger, on the terms and conditions set
forth in these Exchange Agent Instructions (this “Agreement”). In
contemplation of your acting as Exchange Agent, the following documents have
been delivered to you by Patriot:
|
A.
|
A
copy of the Merger Agreement;
|
|
B.
|
A
certified copy of the list of shareholders who are holders of record of
Crossflo Stock at the Effective Time (the “Crossflo
Shareholders”), including a list of all stop transfers on such
stock as of the same time;
|
|
C.
|
A
letter from [_____________],
President and CEO of Crossflo, addressed to Crossflo Shareholders
announcing the effectiveness of the Merger (the “Crossflo
Letter”); and
|
|
D.
|
A
copy of the letter of transmittal to accompany certificates for Crossflo
Stock when surrendered for exchange and related guidelines for
certification of taxpayer identification number on Substitute Form W-9
(the “Letter of
Transmittal”).
|
For
carrying out the duties of Exchange Agent hereunder, you will be entitled to the
compensation set forth on Exhibit A hereto.
A-1
Exhibit A
to Merger Agreement
In
carrying out the duties of the Exchange Agent, you will receive certificates
representing Crossflo Stock surrendered for exchange with Patriot
Stock. You are authorized, and you agree, to accept such
certificates, to exchange them for Patriot Stock, and to pay to the surrendering
Crossflo Shareholder, cash for fractional shares in accordance with the
provisions of the Merger Agreement and this Agreement.
You agree
to act in accordance with the following instructions:
|
1.
|
You
will mail to Crossflo Shareholders of record at the Effective Time, as
soon as possible after the Effective Date but no later than five business
days thereafter, the Crossflo Letter and the Letter of
Transmittal.
|
|
2.
|
You
will time and date stamp, upon receipt, each Crossflo Stock certificate,
Letter of Transmittal and other document received in relation to your
duties hereunder.
|
|
3.
|
As
soon as practicable after the Effective Date, but in no event later than
five business days thereafter, Patriot shall promptly deliver to you, as
agent for each of the Crossflo Shareholders, the requisite number of
shares of Patriot Stock required to be delivered to the Exchange Agent
pursuant to the Merger Agreement. You are hereby authorized to
issue such shares of Patriot Stock for the purposes and in the manner
contemplated by this Agreement and the Merger
Agreement.
|
|
4.
|
Upon
receipt, you will examine each Crossflo Stock certificate, each Letter of
Transmittal accompanying such certificate and each other document
delivered to you therewith and will ascertain whether (i) such Letter of
Transmittal is properly completed and duly executed in accordance with the
instructions set forth thereon, (ii) such certificates have otherwise been
properly submitted for exchange, and (iii) any other document required to
be delivered to you appears on its face to be in proper form and duly
executed. In the event any Letter of Transmittal or other
document has been improperly completed or executed or any Crossflo Stock
certificate is not in proper form for surrender and exchange, you will
take such action as may be necessary to correct, or cause to be corrected,
such irregularity. In instances where any such irregularity is
neither corrected nor waived by you, you will mail to the surrendering
Crossflo Shareholder, as soon as practicable and no later than five
business days after receipt, by overnight or registered mail under
coverage of your blanket insurance policy, the relevant certificates
together with Letters of Transmittal and any other documents relating
thereto, along with a notice from you explaining the reasons for the
return and setting forth the procedure by which such certificates may be
resubmitted for exchange.
|
|
5.
|
If
any certificates representing shares of Patriot Stock are to be issued in
a name other than that in which the certificate for Crossflo Stock
surrendered in exchange therefore is registered, it shall be a condition
of the issuance or payment thereof that the certificate so surrendered
shall be properly endorsed and otherwise in proper form for transfer and
that the person requesting such exchange shall pay to you any transfer or
other taxes required, or shall establish to your satisfaction that such
tax has been paid or is not
payable.
|
A-2
Exhibit A
to Merger Agreement
|
6.
|
If
any holder of shares of Crossflo Stock advises you that such holder’s
failure to surrender a certificate representing part or all of such
holder’s shares is due to such certificate having been lost or destroyed,
Patriot hereby authorizes you (after you have verified by examining the
Crossflo stock transfer records delivered to you that no stop transfer
order has been issued against such lost or destroyed certificate) to
deliver to such holder the certificate for Patriot Stock to which such
holder would otherwise be entitled, but only upon receipt by you from such
holder of a satisfactory affidavit of loss and a bond of indemnity or
other indemnity agreement on your standard form. Upon receipt
of such affidavit of loss and indemnity bond or agreement, you will effect
issuance of Patriot Stock to the surrendering Crossflo Shareholder as
though such holder had surrendered
certificates.
|
|
7.
|
To
the extent a person is entitled to receive Patriot Stock in exchange for
Crossflo Stock and surrenders certificates formerly representing shares of
Crossflo Stock together with a properly completed and duly
executed Letter of Transmittal and other required documents, you shall
countersign and register certificates representing the number of shares of
Patriot Stock to which such person is properly entitled and you shall mail
such certificates, by registered or overnight mail, under coverage of your
blanket insurance policy.
|
|
8.
|
You
shall immediately cancel all certificates representing shares of Crossflo
Stock properly surrendered to you for exchange and you shall deliver such
cancelled certificates to Patriot as soon as practicable after
cancellation.
|
|
9.
|
In
the event a permit is not granted approving the issuance of Patriot Stock
to be issued to Crossflo Shareholders pursuant to the Merger Agreement,
then each certificate evidencing such Patriot Stock shall bear the
following legend in conspicuous
type:
|
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION WITHOUT AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION OR QUALIFICATION
IS NOT REQUIRED.
A-3
Exhibit A
to Merger Agreement
|
10.
|
Patriot
covenants and agrees to pay you such reasonable fee for your services
hereunder as the parties hereto may agree upon and to reimburse,
indemnify, and hold you harmless against any costs, expenses (including
reasonable expenses of your legal counsel and any amounts owing to you
with respect to this transaction), losses, or damages, which are not a
result of your negligence, misconduct, bad faith, or willful failure to
perform your obligations hereunder, and which may be paid, incurred, or
suffered by you or to which you may become subject by reason of or as a
result of the administration of your duties hereunder or by reason of or
as a result of your compliance with the instructions set forth herein or
with any written or oral instructions delivered to you pursuant hereto, or
as a result of defending yourself against any claim or liability resulting
from your actions as the Exchange Agent pursuant hereto, including any
claim against you by any Crossflo Shareholder submitting a Letter of
Transmittal.
|
|
11.
|
Approximately
three months after the Effective Time, Patriot will request that you mail
follow-up letters to any Crossflo Shareholders who have not surrendered
their certificates for exchange. This follow-up letter will be
mailed with the Letter of Transmittal, Substitute Form W-9 guidelines and
a return envelope.
|
|
12.
|
The
duration of this Agreement is unlimited and shall remain in effect until
five days after Patriot gives you written notice of termination; provided, however, that
such termination may occur no earlier than six months after the mailing of
documents to Crossflo Shareholders pursuant to Section 1 above unless you
have failed to comply with this Agreement and provide the services
discussed herein in a timely manner. Promptly following such
termination, you will deliver to Patriot, or to such other persons as
Patriot may direct, all records of exchanges provided for
herein.
|
|
13.
|
This
Agreement shall be construed and enforced in accordance with the laws of
the State of California, without regard to its conflicts of laws
provisions, and shall inure to the benefit of, and the obligations created
hereby shall be binding upon, the successors and assigns of the parties
hereto.
|
|
14.
|
In
the event any question or dispute arises with respect to the proper
interpretation of the Merger Agreement or your duties hereunder, or the
rights of Patriot or of any Crossflo Shareholders surrendering
certificates for Patriot Stock pursuant to the Merger Agreement, you shall
not be required to act and shall not be held liable for refusal to act
until the question or dispute has been judicially settled (and, if
appropriate, you may file a suit in interpleader for such purpose) by
final judgment rendered by a court of competent jurisdiction, binding on
all parties interested in the matter, or settled by a written document in
form and substance satisfactory to you and executed by Patriot and each
such Crossflo Shareholder.
|
A-4
Exhibit A
to Merger Agreement
Please
acknowledge receipt of this Agreement and the documents referred to above and
confirm the arrangements herein provided by signing and returning the enclosed
additional copy of this Agreement.
|
Very
truly yours,
|
|
|
PATRIOT
SCIENTIFIC CORPORATION
|
|
|
By:
_____________________________________
|
|
|
Name:
___________________________________
|
|
|
Title:
____________________________________
|
|
|
CROSSFLO
SYSTEMS, INC.
|
|
|
By:
_____________________________________
|
|
|
Name:
___________________________________
|
|
|
Title:
____________________________________
|
|
|
Accepted
as of [________
__], 2008
|
|
| [Exchange Agent] | |
| By: _____________________________________ | |
|
Name:
___________________________________
|
|
| Title: ____________________________________ | |
A-5
Exhibit A
to Merger Agreement
Exhibit
A
Compensation
A-6
Exhibit B
to Merger Agreement
LETTER
OF TRANSMITTAL
To Tender
Shares of Common Stock of
CROSSFLO
SYSTEMS, INC.
In
Exchange for Shares of Common Stock of
PATRIOT
SCIENTIFIC CORPORATION
Name and
Address of Registered Owner of Shares and
Number of
Shares Owned of Record by such Registered Owner:
|
[label with address and
number of shares]
|
PLEASE
READ THE ATTACHED INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS LETTER OF
TRANSMITTAL
|
Please
note that this letter of transmittal (“Letter of
Transmittal”) applies only to the certificated shares of Crossflo
Systems, Inc., common stock (“Crossflo Stock”)
owned in your name as the registered owner. According to Crossflo’s
records, the total number of certificated shares of Crossflo Stock of which you
are the registered owner is printed on the above label. If you own
shares of Crossflo Stock other than those included in the above total which are
held in another name or in another capacity (for example, as trustee) you must
submit a separate Letter of Transmittal for such other shares.
Please
mail or hand deliver this Letter of Transmittal and your stock certificates to
[_______________], the
exchange agent (the “Exchange Agent”), at
the following address:
|
by
mail:
[_______________]
[_______________]
[_______________]
|
by
hand or overnight courier:
[_______________]
[_______________]
[_______________]
|
The
merger of PTSC ACQUISITION 1 CORP. (“Subcorp”), a
California corporation and wholly owned subsidiary of Patriot Scientific
Corporation (“Patriot”), into
Crossflo Systems, Inc. (“Crossflo”), was
completed on [_________ __], 2008,
in accordance with the terms of the Agreement and Plan of Merger dated [_________ __], 2008,
between Crossflo, Patriot, Subcorp and certain Crossflo officers (the “Merger”). In
order to receive the consideration to be paid for shares of Crossflo Stock in
the Merger, you now need to surrender to the Exchange Agent the certificates
representing such shares, which you should list below. For each share
of Crossflo Stock listed below, you will receive [____] shares of the
common stock of Patriot (“Patriot
Stock”).
B-1
Exhibit B
to Merger Agreement
The
following certificates are attached to this Letter of Transmittal (if additional
space is required, attach signed rider):
|
Certificate
Number
|
Number
of Shares
|
|
TOTAL
SHARES SURRENDERED:
|
All
Patriot stock certificates will be issued in the name of the holder appearing on
the label affixed to the first page of this Letter of Transmittal unless you
indicate otherwise under “Special Issuance Instructions”
below. Similarly, all Patriot stock certificates will be sent to the
address that appears on the label affixed to the first page of this Letter of
Transmittal unless you indicate otherwise under “Special Delivery Instructions”
below. If you would like your Patriot certificates to be issued to a
name different from the name that appears on the label above (which is the name
represented by such certificates on the stock transfer books of Crossflo), then
you will be responsible for any stock transfer tax payable relating to the
transfer of such shares.
Any
dividends or other distributions that may become payable to you on any Patriot
Stock to be issued to you in exchange for your Crossflo Stock will not be paid
to you until your Crossflo stock certificates have been surrendered for
exchange. You may be asked to execute and deliver additional documents deemed by
the Exchange Agent or Patriot to be necessary or desirable to complete the
exchange of Crossflo Stock surrendered with this Letter of
Transmittal.
B-2
Exhibit B
to Merger Agreement
SIGNATURE
Please
sign below as your name appears on your stock certificates or, if you are
signing this form on behalf of the registered owner of such stock certificates,
please attach the power of attorney or other document that evidences your
authority to sign this Letter of Transmittal. If you are signing this
Letter of Transmittal in a fiduciary or representative capacity, please indicate
your full title. (See Instruction 2.)
|
Signature
of Owner
|
Signature
of Joint Owner
|
Date:
_________________________________________
Name:
Please
Print
Capacity/Title
(if applicable):
Address:
Zip
Code
Area Code
and Telephone Number: (____)
____________________________________
Tax
Identification or Social Security Number
MEDALLION
SIGNATURE GUARANTEE
(If
required by Instruction 2 or 4)
Authorized
Signature:
Name of
Firm:
Please
Print
Dated: _________________________
B-3
Exhibit B
to Merger Agreement
SUBSTITUTE
FORM W-9
[To be completed by all surrendering
shareholders]
(See
Instruction 7)
Internal
Revenue Service, Department of the Treasury
Payer’s
request for taxpayer identification number
PART 1 -
Please provide your correct taxpayer identification number below and certify by
signing and dating below:
_______________________________________
Social
Security Number or Employer ID Number
PART 2 -
Certification - Under penalties of perjury, I certify that:
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(1)
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the
number shown on this form is my taxpayer identification number (or I am
waiting for a number to be issued to me)
and
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(2)
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I
am not subject to backup withholding because: (a) I am exempt
from backup withholding, or (b) I have not been notified by the Internal
Revenue Service that I am subject to backup withholding as a result of
failure to report all income or dividends, or (c) the IRS has notified me
that I am no longer subject to backup
withholding.
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Certification
Instructions: You must cross out item (2) above if you have been
notified by the IRS that you are currently subject to backup withholding for any
unreported interest or dividends on your tax return. However if,
after being notified by the IRS that you were subject to backup withholding, you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out such item (2).
SIGNATURE: __________________________________ DATE:
___________________
PRINT
NAME:
PART 3 -
Awaiting taxpayer identification number
Certificate
of Awaiting Taxpayer Identification Number
I certify
under penalties of perjury that a taxpayer identification number has not been
issued to me, and either (a) I have mailed or delivered an application to
receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office, or (b) I intend to mail
or deliver an application in the near future. I understand that if I
do not provide a taxpayer identification number by the time of payment, 28% of
all reportable payments made to me thereafter will be withheld, but that such
amounts will be refunded to me if I then provide a taxpayer identification
number within 60 days.
SIGNATURE: __________________________________ DATE:
___________________
PRINT
NAME:
B-4
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NOTE:
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FAILURE
TO COMPLETE AND RETURN THIS FORM WILL RESULT IN BACKUP WITHHOLDING OF 28%
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
EXCHANGE.
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SPECIAL
ISSUANCE INSTRUCTIONS
(see
Instructions 2 and 4)
To be
completed ONLY if certificates for Patriot Stock and the check representing cash
in lieu of any fraction share are to be issued in the name of and delivered to
someone other than the registered owner.
Issue
certificates to:
Name:
Please
Print
Address:
Zip
Code
_________________________________
Tax
Identification or Social Security No.
SPECIAL
DELIVERY INSTRUCTIONS
To be
completed ONLY if certificates for Patriot Stock issued in the name of the
registered owner and the check representing cash in lieu of any fraction share
are to be delivered to someone other than the registered owner or to the
registered owner at an address other than the address shown above.
Mail
certificates to:
Name:
Please
Print
Address:
B-5
Exhibit B
to Merger Agreement
INSTRUCTIONS
This
Letter of Transmittal will instruct Patriot on how you want Patriot to exchange
your Crossflo Stock in connection with the Merger.
1. Execution and Delivery.
All Crossflo stock certificates must be accompanied by
a completed and signed Letter of Transmittal. You may choose any
method you like to deliver these documents to the Exchange Agent; however, you
assume all risks of non-delivery. Delivery shall be effected, and
risk of loss and title to the certificates transmitted shall pass, only upon
receipt of the certificates by the Exchange Agent. Accordingly, it is
recommended that you send your certificates by registered mail and have them
properly insured.
2. Signatures.
You must sign the form exactly the way your name
appears on the face of the certificates. If the shares are owned by
two or more persons, each must sign exactly as his or her name appears on the
face of the certificate. If the Crossflo Stock described on the
Letter of Transmittal has been assigned by the registered owner, the form should
be signed in exactly the same way as the name of the last transferee indicated
on the certificates or transfer documents.
If the
form is signed by anyone who does not appear as the registered owner of the
certificates listed, the certificates must be endorsed or accompanied by
appropriate stock powers which are, in either case, signed by the registered
owner as the name that appear on the certificates and that signature must be
guaranteed by a member of the Medallion signature guarantee
program.
If the
form is signed by a trustee, executor, administrator, guardian, officer of a
corporation, attorney-in-fact, or by any others acting in a representative or
fiduciary capacity, the person signing, unless such person is the registered
owner, must give such person’s full title in such capacity and appropriate
evidence of authority to act in such capacity must be forwarded to the Exchange
Agent with the Letter of Transmittal.
3.
Stock Certificates in Same
Name. If you are requesting that Patriot issue stock
certificates in exactly the name that appears on the Crossflo stock
certificates, you do not need to endorse the certificates submitted with this
Letter of Transmittal.
4. Stock Certificates in Different
Name. If you are requesting that Patriot issue stock
certificates in a name other than exactly the name that appears on your Crossflo
certificates, you must endorse your Crossflo certificates or send with them
appropriately signed stock powers, and the signature on the form, as well as the
signature on your certificates or on the stock powers, must be guaranteed by a
member of the Medallion signature guarantee program.
5. Lost Certificates.
If any of your Crossflo certificates have been lost,
stolen, or destroyed, you must submit an affidavit of lost certificate
satisfactory to the Exchange Agent, along with a bond of indemnity or other
indemnity agreement on the Exchange Agent’s standard form. Prior to
sending such documents, please notify the Exchange Agent at the address shown on
the first page of this Letter of Transmittal for further
instructions.
6. Miscellaneous.
A single Patriot stock certificate will be issued to
you in exchange for all the shares of Crossflo Stock covered by this Letter of
Transmittal. Patriot will not issue any fractional shares of Patriot
Stock in connection with the Merger. If you would otherwise be
entitled to receive a fraction of a Patriot share, you will instead receive a
check in an amount equal to $[__.__] multiplied by
such fraction. The check for cash in lieu of a fractional share will
be issued and delivered in accordance with the special instructions specified on
the form for the issuance and delivery of Patriot stock certificates contained
in the Letter of Transmittal.
B-6
7. Substitute Form W-9.
You are required to provide the Exchange Agent with a
correct taxpayer identification number on the Substitute Form W-9 which is
included as part of this Letter of Transmittal. If you fail to
provide the information on the form, you will be subject to 28% Federal income
tax withholding.
8. Questions and Requests for
Information or Assistance. If you have any questions or
need assistance relating to the Letter of Transmittal please contact the
Exchange Agent (telephone: [___-___-____]). You
may obtain additional copies of the form from the Exchange Agent at the address
indicated on the first page of the Letter of Transmittal or from Patriot at 0000
Xxxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000 (telephone: (000)
000-0000).
IMPORTANT:
YOU ARE URGED TO COMPLETE AND RETURN THIS LETTER OF TRANSMITTAL, TOGETHER WITH
YOUR CROSSFLO STOCK CERTIFICATE(S) AND ALL OTHER REQUIRED DOCUMENTS,
PROMPTLY. NO INTEREST OR CONSIDERATION WILL BE PAID IRRESPECTIVE OF
WHEN YOUR CERTIFICATES ARE SURRENDERED TO THE EXCHANGE AGENT.
In no
event will Patriot, the Exchange Agent or Crossflo be liable to you for any
Patriot Stock, any related dividends, or any cash delivered by them in good
faith to a public official under any applicable abandoned property, escheat, or
similar law. In no event will you be entitled to receive any interest
on any cash to be distributed to you for fractional shares in connection with
the Merger.
B-7
Exhibit C
to Merger Agreement
ESCROW
AGREEMENT
This
Escrow Agreement (the “Escrow Agreement”) is
made and entered into as of [_________ ___], 2008,
by and among Patriot Scientific Corporation, a Delaware corporation (“Patriot”), Crossflo
Systems, Inc., a California corporation (“Crossflo”), and Union
Bank of California, N.A. (the “Escrow
Agent”).
PRELIMINARY
STATEMENTS
WHEREAS,
pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”),
made and entered into as of August 4, 2008, by and among Patriot, PTSC
Acquisition 1 Corp., a California corporation and a wholly-owned subsidiary of
Patriot (“Subcorp”), Crossflo,
Xxxxxxx Xxxxxxxxxxx, M.D., Xxxxxx Xxxx and Xxxxx Xxxxxx, Patriot intends to
acquire all of the issued and outstanding shares of the capital stock of
Crossflo, such that Crossflo becomes a wholly-owned subsidiary of Patriot, as
more fully set forth in the Merger Agreement; and
WHEREAS,
it is a condition to the consummation of the merger contemplated by the Merger
Agreement that this Escrow Agreement be entered into by and among Patriot,
Crossflo and Escrow Agent. Capitalized terms used in this Escrow
Agreement without definition shall have the meanings given to them in the Merger
Agreement.
NOW,
THEREFORE, in consideration of these premises and the mutual and dependent
promises hereinafter set forth, the parties hereto agree as
follows:
1. Deposit in
Escrow. At the Effective Time (as defined in the Merger
Agreement), Patriot shall deposit with the Escrow Agent [____________] shares
of Patriot common stock. The foregoing shares (together with any cash
proceeds of any liquidation of any such shares), are referred to herein as the
“Escrow Stock
Amount” or the “Escrow
Amount”). The delivery of the Escrow Amount shall be effected
via physical delivery of a certificate representing such shares issued in the
name of Union Bank of California, N.A. as Escrow Agent. The Escrow
Agent shall vote the Escrow Stock Amount in accordance with written instructions
to be received from Patriot.
2. Escrow
Account. The Escrow Amount shall be deposited by the Escrow
Agent, immediately upon receipt, in an account (the “Escrow Account”) for
the benefit of Patriot and the shareholders of Crossflo prior to the
consummation of the merger pursuant to the Merger Agreement (“Crossflo
Shareholders”).
3. Investment of Escrow
Amount. Except as otherwise instructed in writing by all of
the parties hereto, any cash that may comprise the Escrow Amount shall be
deposited by the Escrow Agent, until depletion, uninvested in an escrow
account. The Escrow Agent is authorized to disburse, in accordance
with its customary procedures, cash comprising all or part of the Escrow Amount
to provide for any payments required to be made pursuant to this Escrow
Agreement.
C-1
Exhibit C to Merger Agreement
4. Disbursements. Except
with respect to any Disputed Amounts as to which claims are pending or have been
paid pursuant to Section 5 below, one year following the Closing Date (as
defined in the Merger Agreement), the Escrow Agent shall disburse the Escrow
Amount in accordance with Section 2.5(c) of the Merger Agreement, which is
incorporated by reference herein.
5. Claims. In
the event that Patriot has a claim to the Escrow Amount as described in
Section 2.5(c)(i) of the Merger Agreement, then Patriot shall deliver a
Notice (as defined below) to each shareholder of Crossflo and to the Escrow
Agent (a “Claim
Notice”), specifying in reasonable detail the amount and nature of the
claim and requesting that the Escrow Agent make a disbursement to Patriot in the
amount specified therein.
(a) Crossflo
Shareholders having a beneficial interest in a majority of the shares
constituting the Escrow Amount (“Crossflo Majority
Shareholders”) shall have ten calendar days following receipt of a Claim
Notice (the “Objection
Period”) to deliver a Notice to the Escrow Agent and Patriot (an “Objection Notice”)
objecting to all or any portion of the amount specified in the Claim
Notice.
(b) If the
Escrow Agent does not receive a timely Objection Notice, then the Escrow Agent
shall pay the amount of the disbursement set forth in the Claim Notice from the
Stock Escrow Amount.
(c) If the
Escrow Agent does receive a timely Objection Notice, the Escrow Agent shall
(i) disburse to Patriot, from the Escrow Amount, a number of shares equal
in value to the portion, if any, of the amount specified in the Claim Notice to
which the Crossflo Majority Shareholders do not object and (ii) segregate
and hold, separate from the Stock Escrow Amount, a number of shares equal in
value to the amount specified in the Claim Notice to which the Crossflo Majority
Shareholders object (the portion of the Escrow Amount to be so segregated, a
“Disputed
Amount”).
(d) The
Escrow Agent shall retain any Disputed Amount until the earlier of the receipt
by the Escrow Agent of (i) a joint Notice from Patriot and the Crossflo
Majority Shareholders indicating that the objection has been resolved and
instructing the Escrow Agent to disburse or credit the Disputed Amount, or any
applicable portion thereof, to Patriot and/or the shareholders of Crossflo, or
(ii) a true and correct copy of a final, non-appealable decision of a court
or arbitrator relating to such claim, ordering the Escrow Agent to disburse the
Disputed Amount, at which time the Escrow Agent shall promptly disburse the
Disputed Amount in accordance therewith.
(e) In the
event of a disbursement to Patriot, if the resale of the shares of Patriot stock
subject to the escrow is then registered under the Securities Act of 1933, as
amended, Patriot may direct the Escrow Agent to sell an adequate number of
shares such that the disbursement to Patriot may be made in cash. If
the resale of such shares is not then so registered, the disbursement to Patriot
shall be made in shares valued in the manner described in the Merger
Agreement.
C-2
6. Term and
Termination. This Escrow Agreement shall expire, and the
Escrow Account shall be closed, on the date upon which all of the Escrow Amount
has been disbursed pursuant to this Agreement.
7. Concerning the Escrow
Agent.
(a) The
duties and responsibilities of Escrow Agent shall be limited to those expressly
set forth in this Escrow Agreement and the Acceptance of Escrow, the form of
which is attached hereto as Exhibit A (the “Acceptance of
Escrow”). With the exception of this Agreement and the
Acceptance of Escrow, the Escrow Agent is not responsible for, or chargeable
with knowledge of, any terms or provisions contained in any underlying agreement
referred to in this Agreement or any other separate agreements and
understandings between the parties except as specifically incorporated by
reference or used herein. The Escrow Agent shall not be liable for
the accuracy of any calculations or the sufficiency of funds for any
purpose.
(b) The
Escrow Agent shall not be liable to anyone whatsoever by reason of any error or
judgment or for any act done or step taken or omitted by it in good faith or for
any mistake of fact or law or for anything which it may do or refrain from doing
in connection herewith unless caused by or arising out of its own gross
negligence or willful misconduct. Patriot and the shareholders of
Crossflo shall, jointly and severally, indemnify and hold the Escrow Agent
harmless from any and all liabilities and expenses (including, without
limitation, its attorneys’ fees and expenses of litigation) which may arise out
of or result from this Escrow Agreement or any action taken or omitted to be
taken by it as Escrow Agent in accordance with this Escrow Agreement, as the
same may be amended, modified or supplemented, except with respect to any such
liability and expense as may result from the gross negligence or willful
misconduct of the Escrow Agent.
(c) The
Escrow Agent shall be entitled to rely and shall be protected in acting in
reliance upon any instructions or directions furnished to it in writing jointly
by Patriot and the Crossflo Majority Shareholders or pursuant to any provision
of this Escrow Agreement and shall be entitled to treat as genuine, and as the
document it purports to be, any letter, paper or other document furnished to it
by Patriot or Crossflo Majority Shareholders and reasonably believed by it to be
genuine and to have been signed and presented by the proper party or
parties.
(d) The
Escrow Agent, or any successor to it hereafter appointed, may at any time resign
by giving a Notice to Patriot and the shareholders of Crossflo and shall be
discharged from its duties hereunder upon the appointment of a successor Escrow
Agent as hereinafter provided or upon the expiration of thirty (30) days after
such Notice is given. In the event of any such resignation, a
successor Escrow Agent, which shall be a bank or trust company organized under
the laws of the State of California and having a combined capital and surplus of
not less than $10,000,000, shall be jointly appointed by Patriot and Crossflo
Majority Shareholders. Any such successor Escrow Agent shall deliver
to Patriot and the shareholders of Crossflo a written instrument accepting such
appointment hereunder, and thereupon it shall succeed to all the rights and
duties of the Escrow Agent hereunder and shall be entitled to receive the Escrow
Amount held by the predecessor Escrow Agent hereunder.
C-3
(e) The
Escrow Agent may consult with counsel to be selected and employed by it and
shall be fully protected with respect to any action under this Escrow Agreement
taken or suffered in good faith by the Escrow Agent in accordance with the
opinion of such counsel.
(f) The
Escrow Agent shall receive compensation for its services at its customary rates
as in effect from time to time. Such compensation, along with any
other fees or expenses and related disbursements incurred by the Escrow Agent in
carrying out its obligations hereunder prior to such date, shall be paid by
Patriot.
8. Notices. All
notices and other communications hereunder (each, a “Notice”) shall be in
writing and shall be deemed given if delivered personally, sent by facsimile
(with written confirmation of successful delivery) or dispatched by a nationally
recognized overnight courier service to the parties at the following addresses
(or at such other address for a party as shall be specified by like Notice from
such party to the other parties hereto).
(a) if to
Patriot:
Patriot
Scientific Corporation
0000
Xxxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxxxx 00000
with a
copy to:
The Law
Office of Xxxx X. Xxxxxxxx
000 Xxxx
Xxxxxxxx, Xxxxx 0000
Xxx
Xxxxx, Xxxxxxxxxx 00000
(b) if to
shareholders of Crossflo :
Crossflo
Systems, Inc.
00000 Xx
Xxxxxx Xxxx
Xxxxx
000
Xxx
Xxxxx, Xxxxxxxxxx 00000
Attn:
Chief Executive Officer
with a
copy to:
DLA Piper
US LLP
0000
Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx
Xxxxx, Xxxxxxxxxx 00000
Attn:
Xxxx Xxxxxx, Esq.
C-4
(c) if to the
Escrow Agent:
Union
Bank of California, N.A.
000 Xxxxx
Xxx Xxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attention:
Corporate Trust Department
Facsimile: (000)
000-0000
9. Miscellaneous.
(a) This
Escrow Agreement, together with its schedules and exhibits, and the Merger
Agreement constitute the entire agreement among the parties and supersede all
prior agreements and understandings, agreements or representations by or among
the parties, written and oral, with respect to the subject matter hereof and
thereof.
(b) This
Escrow Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, executors, administrators, heirs, and/or
assigns; provided, however, that none of the parties hereto except the Escrow
Agent may make any assignment of this Escrow Agreement or any interest therein
without the prior written consent of the other parties.
(c) Nothing
in this Escrow Agreement, express or implied, is intended or shall be construed
to create any third-party beneficiaries.
(d) This
Escrow Agreement may be amended only by an instrument in writing duly executed
by each of the parties hereto.
(e) When a
reference is made in this Escrow Agreement to Section, such reference shall be
to a Section of this Escrow Agreement unless otherwise
indicated. The headings contained in this Escrow Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.
(f) This
Escrow Agreement shall be governed by the laws of the State of California
without regard to its conflict of laws rules. Each of the parties hereto agrees
that a final judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(g) This
Escrow Agreement may be executed in counterparts, which together shall
constitute one and the same Escrow Agreement. The parties may execute
more than one copy of the Escrow Agreement, each of which shall constitute an
original. Signatures by facsimile or other electronic means shall be
valid and enforceable.
(h) As
between Patriot and Crossflo, anything in the Merger Agreement to the contrary
notwithstanding, the rights and duties of Patriot and Crossflo to the Escrow
Amount shall be governed by this Escrow Agreement.
C-5
Exhibit C to Merger Agreement
IN WITNESS WHEREOF, Patriot,
Crossflo and the Escrow Agent have signed this Escrow Agreement as of the date
first written above.
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Patriot
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By:
____________________________________
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Name:
____________________________________
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Title:
____________________________________
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Crossflo
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By:
____________________________________
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Name:
____________________________________
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Title:
____________________________________
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ESCROW
AGENT:
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UNION
BANK OF CALIFORNIA, N.A.
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By:
____________________________________
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Name:
____________________________________
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Title:
____________________________________
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C-6
Exhibit C to Merger
Agreement
EXHIBIT A
ACCEPTANCE
OF ESCROW
Union
Bank of California, N.A. (hereinafter the “Escrow Agent”) hereby
acknowledges receipt of a copy of an Escrow Agreement dated as of [_________ ___], 2008,
entered into by Patriot, Crossflo, and the Escrow Agent, and in connection
therewith Union Bank of California, N.A. agrees to act as Escrow Agent subject
to the Conditions of Acceptance hereinafter set forth and made a part
hereof.
Union
Bank of California, N.A.
Dated: [_________ ___],
2008 By: ________________________________
Name: _____________________________
Its:
________________________________
CONDITIONS
OF ACCEPTANCE
IN
CONSIDERATION OF THE ACCEPTANCE OF THIS ESCROW BY UNION BANK OF CALIFORNIA,
N.A., all of the parties agree that said acceptance is predicated upon the
following conditions and stipulations and that any modification of escrow
instructions shall also be subject to the following provisions:
1. In
the event of any conflict between the Escrow Agreement (hereinafter called the
“Escrow
Agreement”) and these Conditions of Acceptance, the latter shall
prevail.
2. The
duties of the Escrow Agent are only such as are specifically provided herein and
in the Escrow Agreement, being purely ministerial in nature, and the Escrow
Agent shall incur no liability whatsoever, except for willful misconduct or
gross negligence, so long as it has acted in good faith.
3. The
Escrow Agent shall be under no responsibility in respect of any of the items
deposited with it other than to faithfully follow the instructions contained
herein and in the Escrow Agreement. The Escrow Agent may advise with
counsel and shall be fully protected in any action taken in good faith in
accordance with such advice. The Escrow Agent shall not be required
to defend any legal proceedings which may be instituted against it in respect of
the subject matter of the Escrow unless requested to do so by the parties to the
Escrow and indemnified as provided in the Escrow Agreement. The
Escrow Agent shall not be required to institute legal proceedings of any
kind.
4. The
Escrow Agent shall have no responsibility for the genuineness or validity of any
document or other item deposited with it nor for the identity or legal capacity
of any party involved nor for the sufficiency of any agency nor for the
genuineness of signatures to any papers or documents nor for the negotiability
or marketability of any item deposited with it nor for any delay of the escrow
contemplated hereunder (the “Escrow”) due to any
cause beyond its control, and it shall be fully protected in acting in
accordance with any written instructions given to it hereunder or under the
Escrow Agreement and believed by it to have been signed by the proper
parties.
C-7
Exhibit C to Merger Agreement
5. The
Escrow Agent shall be liable for only such funds and instruments as are actually
deposited and received by it for the purpose of this Escrow and shall have a
lien on all funds and instruments deposited with it for the purpose of securing
any fees, costs or other charges incurred by it hereunder.
6. The
Escrow Agent shall not be liable for the payment of any funds in the event it
shall be prevented from making payment by operation of law or
otherwise.
7. Provided
the terms of the Escrow can be complied with, the Escrow Agent will not withhold
completion and settlement thereof, unless restrained by order of court or served
with some other similar legal proceeding, and in so doing, the Escrow Agent will
not become liable to the undersigned, or to any other person, for its failure or
refusal to comply with conflicting or adverse claims or demands.
8. In
the event of a dispute between the parties, an ambiguity in the provisions
governing the Escrow or uncertainty on the part of the Escrow Agent as to how to
proceed with the Escrow, such that the Escrow Agent, in its sole and absolute
judgment, deems it necessary for its protection so to do, the Escrow Agent may
(a) refrain from taking any action other than to safely keep the items
deposited hereunder until it shall have received joint written instructions from
the parties to the Escrow, or (b) deposit the escrowed items into a court
of competent jurisdiction and thereupon have no further duties or
responsibilities in connection therewith.
9. The
Escrow Agent may resign at any time by delivering Notice at least thirty (30)
days before the date upon which such resignation is to become effective to the
parties to the Escrow who hereby agree to designate, by a written acceptance of
such successor on or before such effective date, a successor Escrow
Agent. After the effective date of such resignation, the Escrow Agent
shall be under no further obligation to perform any of the duties of Escrow
Agent under the Escrow Agreement other than to deliver the entire assets of the
Escrow to a properly designated successor Escrow Agent or to deal with such
assets as provided in the preceding
paragraph (8) hereof. Any successor Escrow Agent shall have
all of the duties, powers, rights and immunities conferred upon the Escrow Agent
hereby or by the Escrow Agreement. Any successor Escrow Agent may
accept as complete and correct and may rely upon any accounting made by any
prior Escrow Agent and shall not be subject to any liability or responsibility
with respect to the prior administration by any prior Escrow Agent.
10. The
Escrow Agent shall be entitled to reasonable compensation for its services
rendered hereunder and under the Escrow Agreement, as shown on the fee schedule
attached hereto and marked as Schedule A, and Patriot agrees to pay the
same in accordance with Section 7(f) of the Escrow Agreement upon receipt of the
Escrow Agent’s statement therefor, and to make reimbursements to the Escrow
Agent for out-of-pocket amounts expended and out-of-pocket expenses incurred,
including fees for services and expenses of counsel, agents and attorneys in
fact employed by the Escrow Agent; provided, such fees and expenses shall be
paid from the Escrow but only from assets in Escrow which would otherwise be
distributed to Patriot.
C-8
11. As
to the Escrow Agent, the terms and provisions of the Escrow Agreement and this
Acceptance shall bind the executors, administrators, heirs, devisees, successors
and assigns of the undersigned.
12. The
parties represent and warrant and further agree as
follows: (i) that they will supply, or cause to be supplied to
the Escrow Agent the full name, address and tax payer identification number for
each person entitled to receive interest or dividend income pursuant to the
Escrow Agreement as well as additional information as the Escrow Agent may
reasonably request in connection with its duties hereunder and will supply to
the Escrow Agent any changes to the foregoing; and (ii) if any check
deposited into the escrow account maintained by the Escrow Agent is returned to
the Escrow Agent for any reason after the proceeds of such escrow account have
been disbursed, the party for whose benefit such check was written shall
immediately reimburse the Escrow Agent for the amount of such returned check and
shall reimburse the Escrow Agent for all fees and expenses which it may incur as
a result thereof.
C-9
Exhibit C to Merger Agreement
SCHEDULE
A
UNION
BANK OF CALIFORNIA, N.A.
CORPORATE
TRUST SERVICES
Schedule
of Fees
for
Escrow
Agent Services
Escrow
Agreement
among
Patriot,
Crossflo,
and
Union
Bank of California, N.A.
________________________________________________
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Acceptance
and Set-up Fee:
(Due
and payable on the closing date.)
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WAIVED
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Annual
Escrow Administration Fee:
(First
year’s fee is due and payable in advance on the closing date)
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$
3,000.00
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Legal
Counsel Fee:
(use
of Union Bank in-house legal counsel)
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No
Charge
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Transactional
Charges:
Disbursements / wires
(each):
Investments (per
sale/purchase/transfer):
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$ 35.00
$ 60.00
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Out-of-Pocket
Expenses:
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As
Invoiced
|
Fees
subject to acceptance and review by Union Bank of California, N.A.. of all
documents pertaining to this transaction.
C-10
INVESTMENT
REPRESENTATION CERTIFICATE
Patriot
Scientific Corporation
0000
Xxxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxxxx 00000
Attention:
Chief Financial Officer
Each of
the undersigned executes and delivers this Investment Representation Certificate
pursuant to that certain Agreement and Plan of Merger (the “Merger Agreement”),
dated as of August 4, 2008, by and among Patriot Scientific Corporation, a
Delaware corporation (“Patriot” or “Buyer”), PTSC
Acquisition 1 Corp., a California corporation and a wholly-owned subsidiary of
Patriot (“Subcorp”), Crossflo
Systems, Inc., a California corporation (“Crossflo”), Xxxxxxx
Xxxxxxxxxxx, M.D., Xxxxxx Xxxx and Xxxxx Xxxxxx (collectively, the “Crossflo Principal
Officers”), pursuant to which Subcorp will be merged with and into
Crossflo (the “Merger”). The
Merger Agreement provides, among other things, for the conversion of each share
of Crossflo’s issued and outstanding capital stock (collectively, “Crossflo Stock”) into
the right to receive (i) cash and (ii) a number of shares of Patriot
common stock (“Patriot
Stock”). In connection with the Merger, each of the
undersigned, as a stockholder of Crossflo, desires to exchange the undersigned’s
shares of Crossflo Stock for shares of Patriot Stock and cash as set forth in
the Merger Agreement.
Each of
the undersigned represents, warrants and certifies to Patriot that:
|
|
1.
|
The
undersigned is aware of the kind of information regarding Patriot that
would be available in a registration statement filed under the provisions
of the Securities Act of 1933, as amended (the “Securities
Act”), and that the undersigned has had access to the same kind of
information about Patriot that would be available in such a registration
statement and such additional information necessary to verify the accuracy
of such information;
|
|
|
2.
|
The
undersigned has been referred to the Securities and Exchange Commission’s
website at xxx.xxx.xxx,
where copies of the following public filings of Patriot can be found:
(i) Annual Report on Form 10-K, for the fiscal year ended
May 31, 2007, filed with Securities and Exchange Commission on August
14, 2007; (ii) Proxy Statement for the 2007 Annual Meeting of
Stockholders, filed with the Securities and Exchange Commission on
September 27, 2007; (iii) Quarterly Report on Form 10-Q, for the
quarter ended August 31, 2007, filed with the Securities and Exchange
Commission on October 10, 2007; (iv) Quarterly Report on Form 10-Q,
for the quarter ended November 30, 2007, filed with the Securities
and Exchange Commission on January 9, 2008; (v) Quarterly Report on
Form 10-Q, for the quarter ended February 29, 2008, filed with the
Securities and Exchange Commission on April 9, 2008; (vi) Current Report
on Form 8-K filed with the Securities and Exchange Commission on August
21, 2007; (vii) Current Report on Form 8-K filed with the Securities and
Exchange Commission on September 19, 2007; (viii) Current Report on Form
8-K filed with the Securities and Exchange Commission on December 27,
2007; (ix) Current Report on Form 8-K filed with the Securities and
Exchange Commission on February 8, 2008; (x) Current Report on Form 8-K
filed with the Securities and Exchange Commission on March 3, 2008; (xi)
Current Report on Form 8-K filed with the Securities and Exchange
Commission on March 17, 2008; (xii) Current Report on Form 8-K filed with
the Securities and Exchange Commission on April 11, 2008; (xiii) Current
Report on Form 8-K filed with the Securities and Exchange Commission on
April 16, 2008; (xiv) Current Report on Form 8-K filed with the Securities
and Exchange Commission on April 23, 2008; (xv) Current Report on Form 8-K
filed with the Securities and Exchange Commission on May 14, 2008; (xvi)
Current Report on Form 8-K filed with the Securities and Exchange
Commission on May 20, 2008; (xvii) Current Report on Form 8-K filed with
the Securities and Exchange Commission on June 19, 2008; (xviii) Current
Report on Form 8-K filed with the Securities and Exchange Commission on
June 19, 2008; (xiv) Current Report on Form 8-K filed with the Securities
and Exchange Commission on June 27, 2008; and (xv) Current Report on Form
8-K filed with the Securities and Exchange Commission on July 23,
2008;
|
D-1
Exhibit D to Merger Agreement
|
|
3.
|
The
undersigned has been furnished with a brief description of (i) Patriot
Stock, (ii) the use of the Patriot Stock in connection with the Merger,
and (iii) any material changes in Patriot’s affairs that are not disclosed
in the documents referred to in Section 2
above.
|
|
|
4.
|
The
undersigned acknowledges that the undersigned has been afforded the
opportunity to examine and copy all documents, books and records relating
to Patriot that the undersigned has reasonably requested to examine (with
any such requests directed to the Chief Financial Officer of Patriot by
phone to (000) 000-0000) and that no requested information, oral or
written, has been withheld from the undersigned unless such request was
deemed unreasonable by Patriot;
|
|
|
5.
|
The
undersigned is aware that there are economic variables and risks that
could adversely affect an investment in Patriot Stock, and the undersigned
has relied primarily on the undersigned’s own independent analysis and the
analysis of the undersigned’s personal advisers to make an investment
decision with respect to the Patriot Stock, has adequate means of
providing for his or her current needs and personal contingencies, has no
need for current income or liquidity in his or her investment in Patriot
Stock, is able to bear the economic risks of this investment in Patriot
Stock and can afford a complete loss of such
investment;
|
|
|
6.
|
The
undersigned is acquiring the Patriot Stock for such undersigned’s own
account, for investment only, and not with a view to or for the sale,
distribution or fractionalization thereof and will not take, or cause to
be taken, any action which would cause the undersigned to be deemed an
underwriter with respect to the Patriot Stock;
and
|
|
|
7.
|
The
undersigned has such knowledge and experience in financial and business
matters that the undersigned is capable of evaluating the merits and risks
of this transaction and of an investment in Patriot
Stock.
|
|
|
8.
|
The
offer and issuance of Patriot Stock to the undersigned has not been
accompanied by any general solicitation or general
advertising.
|
|
|
9.
|
The
undersigned understands and acknowledges that the Patriot Stock has not
been registered for sale under the Securities Act and, therefore, cannot
be resold unless registered under the Securities Act or an exemption from
registration is available. The certificate evidencing the
Patriot Stock will be stamped or otherwise imprinted with a conspicuous
legend in the form set forth in Section 2.4(j) of the Merger
Agreement.
|
D-2
IN
WITNESS WHEREOF, each of the undersigned has signed this Investment
Representation Certificate on the date set forth below.
Dated as
of August [__],
2008 ____________________________________
Name:
______________________________
Address:
___________________________________
___________________________________
X-0
Xxxxxxxx
0
|
Xxxxxxxxxxx
(xxxxxxxx
name)
|
Legal Name of Trust/Entity
|
Company
Name
|
Series A
Preferred
|
Series B
Preferred
|
Series C
Preferred
|
Series D
Preferred
|
Series E
Preferred
|
Common
|
Cash
invested or
Note
amount
|
Exchange
Ratio
|
Cash
consideration
|
Stock
consideration
|
|
|
|
$.09/sh
|
$.35/sh
|
$.50/sh
|
$.50/sh
|
$1.00/sh
|
||||||||
|
Xxx
|
Xxxx
|
883,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxxxxxxx
|
353,400
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxxx
|
353,400
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxxx
|
50,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxxx
B.
|
Saugatuck
Energy
|
50,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxx
|
Xxxxxxx
|
7,500
|
$0.00
|
0
|
|||||||||
|
Xxxxx
|
Xxxxx
|
5,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxx
|
40,000
|
$0.00
|
0
|
|||||||||
|
Xxxxx
|
Xxxxxxx
|
10,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxx
|
10,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxxx
|
Xxxxxx
|
10,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxxx
|
Xxxx
|
10,000
|
$0.00
|
0
|
|||||||||
|
Arvantakis
|
Xxxxx
|
10,000
|
$0.00
|
0
|
|||||||||
|
Xxxx
|
Xxxxx
|
Xxxxx
X. Xxxx, Trustee, Xxxxx X. Xxxx Trust dated June 17, 2002
|
250,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxxxxx
|
Xxxx
|
37,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
|
10,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
|
15,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
B.
|
150,000
|
$0.00
|
0
|
|||||||||
|
Redoglia
|
Xxxxxxx
|
Xxxxxxxx-Xxxxxx
Family Trust
|
150,500
|
$0.00
|
0
|
||||||||
|
Kasino
|
Xxxxxxx
|
10,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
25,000
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxxxx
|
37,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxxxxxx
|
Xxxxx
P. and Xxxxxx
|
Xxxxx
X. Xxxxxxxxxx and Xxxxxx Xxxxxxxxxx
|
10,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxx
|
Xxx
and Xxxxx
|
Xxx
Xxxxxxx and Xxxxx Xxxxxxx
|
10,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxx
|
Xxxxx
|
7,500
|
$0.00
|
0
|
|||||||||
|
Xxxx
|
Xxxx
and Xxxxxx
|
Xxxx
Xxxx and Xxxxxx Xxxx
|
5,000
|
$0.00
|
0
|
||||||||
|
Trigger
|
Xxxx
and Xxxxxxx
|
Xxxx
Trigger and Xxxxxxx Trigger
|
5,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxx
|
Xxxx
|
5,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxx
and Xxxxx
|
Xxxxx
Xxxxxxx and Xxxxx Xxxxxxx
|
5,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxxx
|
Xxxxx
and Xxxxx
|
Xxxxx
Xxxxxxxx and Xxxxx Xxxxxxxx
|
5,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxxx
|
Xxxx
and Xxxx
|
Xxxx
Xxxxxxxx and Xxxx Xxxxxxxx
|
5,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxxx
|
Xxxxxxx
and Xxxxx
|
Xxxxxxx
Xxxxxxxx and Xxxxx Xxxxxxxx
|
5,000
|
$0.00
|
0
|
||||||||
|
Xxxx
|
Xxxxxxx
and Xxxxxxxx
|
Xxxxxxx
Xxxx and Xxxxxxxx Xxxx
|
5,000
|
$0.00
|
0
|
||||||||
|
Xxxxx
|
Xxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxxxx
|
Xxxxx
and Xxx
|
Xxxxx
Xxxxxxxx and Xxx Xxxxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxxxx
|
Xxxxxxxxx
and Xxxxx
|
Xxxxxxxxx
Giritsky and Xxxxx Xxxxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxxx
|
Xxxxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxx
and Xxxx
|
Xxxx
Xxxxxx and Xxxx Xxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Lamp
|
Xxxx
and Xxxxxxx
|
Xxxx
Xxxx and Xxxxxxx Lamp
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxx
|
Xxxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxxx
and Avra
|
Xxxxx
Xxxxxx and Xxxx Xxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxxxx
|
Xxxx
and Xxxxx
|
Xxxx
Xxxxxxxx and Xxxxx Xxxxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxx
|
Xxxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxx
and Xxxxxxx
|
Xxxxx
Xxxxxxx and Xxxxxxx Xxxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxx
|
Xxxxxxx
and Xxxxx
|
Xxxxxxx
Xxxxx and Xxxxx Xxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxxxxx
|
Xxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Said
|
Anesthesia
Service Medical Group
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxx
and Xxx
|
Xxxx
Xxxxxx and Xxx Xxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxx
|
Xxxxx
T. and Dani
|
Xxxxx
X. Xxxxx and Xxxx Xxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxxxxx
|
Xxxxxxx
and Xxxxxx
|
Xxxxxxx
Xxxxxxxxx and Xxxxxx Xxxxxxxxx
|
2,500
|
$0.00
|
0
|
||||||||
|
Xxxxxxxx
|
Xxxxxxxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Xxxxxxxxxxx
|
Xxxxxxx
|
The
Mohlenbrock Family Trust dated 2/19/1985
|
130,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxxxx
|
Xxxxx
|
2,500
|
$0.00
|
0
|
|||||||||
|
Xxxx
|
Xxxx
|
5,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxx
|
50,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxxxxxx
J.
|
5,625
|
$0.00
|
0
|
|||||||||
|
Xxxxxx
|
Xxxxxxxx
J.
|
4,375
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
|
15,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
|
20,000
|
$0.00
|
0
|
|||||||||
|
Xxxx
|
Xxxxxxx
|
60,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxx
|
60,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
25,000
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxxxxxx
|
5,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxx,
Sr.
|
Xxxxxx
X.
|
Wachovia
Securities
|
20,000
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxxxx
|
NAIC
|
20,000
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxxxx
|
80,000
|
$0.00
|
0
|
|||||||||
|
Xxxxxxxxxx
|
Xxx
and Xxxx
|
Living
Trust of Xxx & Xxxx Xxxxxxxxxx, UTD 11/6/89
|
5,000
|
$0.00
|
0
|
||||||||
|
Redoglia
|
Xxxxxxx
|
Xxxxxxxx-Xxxxxx
Family Trust
|
50,000
|
$0.00
|
0
|
||||||||
|
Redoglia
|
Xxxxxxx
|
Xxxxxxxx-Xxxxxx
Family Trust
|
20,000
|
$0.00
|
0
|
||||||||
|
Redoglia
|
Xxxxxxx
|
Xxxxxxxx-Xxxxxx
Family Trust
|
50,000
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxxx
|
1995
Xxxxxx Family Trust
|
50,000
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxxx
|
1995
Xxxxxx Family Trust
|
20,000
|
$0.00
|
0
|
||||||||
|
Xxxx
|
Xxxxxx
|
Xxxx
Investments
|
c/o
Venable LLP
|
20,000
|
$0.00
|
0
|
|||||||
|
Xxxxxx
|
Xxxxxxx
|
The
Xxxxxx Family Trust
|
25,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxx
|
Xxxxxx
|
Xxxxxxx
Suites Hotel
|
50,000
|
$0.00
|
0
|
||||||||
|
Xxxxxxx
|
Xxxxxx
|
Xxxxxxx
Suites Hotel
|
50,000
|
$0.00
|
0
|
||||||||
|
Xxxxxx
|
Xxxx
|
50,000
|
$0.00
|
0
|
|||||||||
|
Xxxx
|
Xxxxx
|
Xxxxx
X. Xxxx, Trustee, Xxxxx X. Xxxx Trust Dated June 17, 2002
|
1,116,000
|
$100,440.00
|
|||||||||
|
Xxxxx
|
Xxxxxxx
|
5,000
|
$450.00
|
||||||||||
|
Hong
|
Marcus
|
2,500
|
$225.00
|
||||||||||
|
Xxxxx
|
Xxxxx
|
2,500
|
$225.00
|
||||||||||
|
Mohlenbrock
|
Xxxxxxx
|
Xxxxxxxxxxx
Family Trust Dated Feb. 19, 1985
|
1,933,700
|
$82,263.58
|
|||||||||
|
Mohlenbrock
|
Xxxxxxx
|
Xxxxxxxxxxx
Family Trust Dated Feb. 19, 1985
|
102,041
|
$25,000.00
|
|||||||||
|
Xxxx
|
Xxxxx
|
Xxxxx
X. Xxxx, Trustee, Xxxxx X. Xxxx Trust Dated June 17, 2002
|
102,041
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxx
|
102,041
|
$35,714.35
|
||||||||||
|
Xxxxxx
|
Xxxxx
|
The
1995 Xxxxxx Family Trust
|
124,490
|
$43,571.50
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
142,857
|
$49,999.95
|
|||||||||
|
Xxxxxx
|
Xxxxxxx
J.
|
The
Xxxxxx Family Trust U/D/T 8/23/93
|
142,857
|
$49,999.95
|
|||||||||
|
Xxxxxxx
|
Xxxx
Xxxxxx and Xxxxxxx Xxx
|
Xxxx
Xxxxxx and Xxxxxxx Xxx Xxxxxxx Trust dated 3/1/93
|
71,429
|
$25,000.15
|
|||||||||
|
Xxxxxxx
|
Xxxx
and Xxxxx
|
Xxxx
and Xxxxx Xxxxxxx Family Trust dated 3/26/96
|
142,857
|
$49,999.95
|
|||||||||
|
Xxxx
|
Xxxxxxxx
Xxx
|
Xxxxxxxx
Xxx Xxxx Living Trust dated 8/19/1998
|
71,429
|
$25,000.15
|
|||||||||
|
Wenhe
|
Xxxx
X.
|
100,000
|
$35,000.00
|
||||||||||
|
Xxxxxx
|
Xxxx
Xxxxxxx and Xxxxxxx X.
|
Xxxx
Xxxxxxx Xxxxxx and Xxxxxxx X. Xxxxxx
|
71,429
|
$25,000.15
|
|||||||||
|
Xxxxxxxx
|
Xxxxx
|
Xxxxxxxx
Family Trust dated 5/7/92
|
71,500
|
$25,025.00
|
|||||||||
|
Xxxxxxxx
|
Xxxx
L.
|
100,000
|
$35,000.00
|
||||||||||
|
Xxxxxx,
Sr.
|
Xxxxxx
X.
|
Wachovia
Securities
|
30,000
|
$10,500.00
|
|||||||||
|
Xxxxxxx
|
Xxx
R.
|
51,020
|
$17,857.00
|
||||||||||
|
Xxxxxxx
|
Xxxxxxx
|
51,021
|
$17,857.35
|
||||||||||
|
Redoglia
|
Xxxxxxx
|
Xxxxxxxx-Xxxxxx
Family Trust
|
428,571
|
$149,999.85
|
|||||||||
|
Equity
Trust Co., Cust. FBO Xxxx X. Xxxxx XXX #35462
|
75000
|
$26,250.00
|
|||||||||||
|
Xxxxxx
|
Xxxxx
M.
|
285,714
|
$99,999.90
|
||||||||||
|
Xxxxxxx
|
Xxxxxx
X.
|
Xxxxxxx
Suite Hotels
|
400,000
|
$200,000.00
|
|||||||||
|
Redoglia
|
Xxxxxxx
|
Xxxxxxxx-Xxxxxx
Family Trust
|
250,000
|
$125,000.00
|
|||||||||
|
Xxxxxx
|
Xxxx
Xxxxxxx and Xxxxxxx X.
|
Xxxx
Xxxxxxx Xxxxxx and Xxxxxxx X. Xxxxxx
|
28,571
|
$14,285.50
|
|||||||||
|
Xxxxxx
|
Xxxxx
|
1995
Xxxxxx Family Trust
|
56,000
|
$28,000.00
|
|||||||||
|
Xxxx
|
Xxxxx
|
40,000
|
$20,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxxxx
|
10,000
|
$5,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxx
X.
|
Xxxxxxx
Construction Company, Inc.
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxx
|
Xxxxx
|
Xxxxx
X. Xxxx, Trustee, Xxxxx X. Xxxx Trust Dated June 17, 2002
|
20,000
|
$10,000.00
|
|||||||||
|
Xxxx
|
Xxxxxx
|
Xxxx
Investments, LLC
|
c/o
Venable, LLP
|
100,000
|
$50,000.00
|
||||||||
|
Xxxxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
50,000
|
$25,000.00
|
|||||||||
|
Mohlenbrock
|
Xxxxxxx
X. and Xxxxx X.
|
Xxxxxxxxxxx
Family Trust Dated Feb. 19, 1985
|
20,000
|
$10,000.00
|
|||||||||
|
Xxx
|
Xxxxxx
|
Spectrum
Electrical Services, Inc.
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxx
|
Xxxxxxxx
Xxx
|
Xxxxxxxx
Xxx Xxxx Living Trust dated 8/19/1998
|
40,000
|
$20,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxxxx
|
Xxxxxxxx
Family Trust dated August 12, 1993
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxxxx
|
80,000
|
$40,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxxx
A.
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxx
|
Xxxxxx
Family Trust dated 4/30/82
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
D.
|
40,000
|
$20,000.00
|
||||||||||
|
Xxxxxxxx
|
Xxxxxx
and Xxxxxxx X. Xxxxxxxxx
|
Xxxxxxx
X. Xxxxxxxxx and Xxxxxx Xxxxxxxx
|
60,000
|
$30,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxx
B.
|
Saugatuck
Energy
|
500,000
|
$250,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxxx
Family Living Trust
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxxxxx
|
Xxxxxx
Living Trust dated November 22, 1988
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxxx
L.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxx
V. and Xxxxxxxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxx
C.
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxxxx
|
Xxxxxxx
J.
|
60,000
|
$30,000.00
|
||||||||||
|
Benelli
|
Xxxx
X. and X. Xxxxx
|
Xxxx
X. Benelli and X. Xxxxx Benelli
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxx
|
Xxxx
|
Xxxxxx
Family Trust of 2001
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxxx
|
Xxxx
J.
|
40,000
|
$20,000.00
|
||||||||||
|
Xxxxxx
|
Xxxx
M.
|
200,000
|
$100,000.00
|
||||||||||
|
Xxxxxxxxxx
|
Xxxxxxx
W.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxx
|
Xxxxxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxx
|
Xxxxxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxx
|
100,000
|
$50,000.00
|
||||||||||
|
Equity
Trust Co., Cust. FBO Xxxx X. Xxxxx XXX #35462
|
50,000
|
$25,000.00
|
|||||||||||
|
Xxxxx
|
Xxxxxx
S.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxxxx
|
Xxxxxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Kilkenny
|
Xxxx
X.
|
25,000
|
$12,500.00
|
||||||||||
|
Kilkenny
|
Xxxxxxx
X.
|
25,000
|
$12,500.00
|
||||||||||
|
Slovenski
|
Xxxxxxx
|
c/o
BHP Billiton Marketing Asia Pacific
|
60,000
|
$30,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxxxxxxx
P.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxx
|
Xxxxxx
T.
|
Xxxxxx
X. Xxxx Defined Benefit Pension Plan
|
80,000
|
$40,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxx
D.
|
50,000
|
$25,000.00
|
||||||||||
|
Vanderweghe,
Jr.
|
Xxxxxx
Xxxxxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxx
K.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxxx
|
X.
Xxxxxx
|
220,000
|
$110,000.00
|
||||||||||
|
Kilkenny
|
Xxxx
X.
|
10,000
|
$5,000.00
|
||||||||||
|
Kilkenny
|
Xxxxxxx
X.
|
10,000
|
$5,000.00
|
||||||||||
|
Wenhe
|
Xxxx
X.
|
50,000
|
$25,000.00
|
||||||||||
|
XxXxxxx
|
Xxxxxx
|
The
XxXxxxx Trust
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxx
|
150,000
|
$75,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxxxx
G.
|
60,000
|
$30,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxx
B.
|
Xxxxx
X. Xxxxxx Trust UA dated 5/22/97
|
10,000
|
$5,000.00
|
|||||||||
|
Xxxxx
|
Xxxxx
D.
|
50,000
|
$25,000.00
|
||||||||||
|
XxXxxxx
|
Xxxxxx
|
The
XxXxxxx Trust
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxx
D.
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxxxxxxxx
|
Xxxxx
R.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxx
III
|
Tyler
and Xxxx
|
Xxxx
Xxxxxx and Xxxxx Xxxxxx III
|
10,000
|
$5,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxx
Xxxxxxx
|
20,000
|
$10,000.00
|
||||||||||
|
Xxxxxxxxx
|
Xxx
and Xxxxx
|
Xxxxx
Xxxxxxxxx and Xxx Xxxxxxxxx
|
10,000
|
$5,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxx
and Xxxxxx
|
Xxxxxx
Xxxxxx and Xxxxxx Xxxxxx
|
10,000
|
$5,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx
|
Xxxxxxx
X. Xxxxxxxx Xxxxxxx, Trustee, Xxxxxxxx Family Trust
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
H.
|
Xxxxxx
X. Xxxxxxx, Trustee, Xxxxxx Revocable Trust UA 08-29-78
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxxxx
|
Xxxxxx
Family Living Trust
|
100,000
|
$50,000.00
|
|||||||||
|
MLPFS
Cust. FBO Xxxxxxx Xxxxxxxx
|
100,000
|
$50,000.00
|
|||||||||||
|
Xxxxxx
|
Xxxxx
V. and Xxxxxxxxx
|
Xxxxx
X. Xxxxxx and Xxxxxxxxx Xxxxxx
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxx
|
Xxxxxxxx
Xxx
|
Xxxxxxxx
Xxx Xxxx Living Trust dated 8/19/1998
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
D.
|
30,000
|
$15,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxx
Xxxxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxx
|
Xxxxxxx
E.
|
200,000
|
$100,000.00
|
||||||||||
|
XxXxxxx
|
Xxxxxx
|
The
XxXxxxx Trust
|
150,000
|
$75,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxx
|
20,000
|
$10,000.00
|
||||||||||
|
Arvantakis
|
Xxxxx
|
30,000
|
$15,000.00
|
||||||||||
|
Xxxxxxxx
|
Xxxxxxx
|
40,000
|
$20,000.00
|
||||||||||
|
Xxxxx
|
Xxxxxxx
|
Xxxxxxx
Xxxxx, TTE US Dtd. 05-19-1995
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
|
J.
Xxxxxx Xxxxxxx, Jr.
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxxxx
W.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxx
J.
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxxx
|
X.
Xxxxxx
|
230,000
|
$115,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxx
P.
|
First
Regional Bank, FBO Rand P. Xxxxxxx XXX #005888
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxxx
D.
|
Estate
of Xxxxxxx X. Xxxxxxx
|
200,000
|
$100,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxx
G.
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxx
|
Xxxxx
and Xxx
|
Xxxxx
Xxxxx and Xxx Xxxxx
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxx
|
X.X.
Xxxxxxx, Successor Trustee Survivor's Trust, Xxxxxxx Family Trust U/A Dtd.
2/9/1989
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
|
Xxxxx
|
American
Express Trust Company as Custodian for Xxxxx X. Xxxxxxx XXX SPS A/C
#5227-8496-6-02
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxx
C.
|
c/o
Xxxxxx Xxxxx Plumbing & Heating
|
20,000
|
$10,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxxxx
P. and Xxxxxxxx X.
|
Xxxxxxx
X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx
|
20,000
|
$10,000.00
|
|||||||||
|
Xxxxxxxxx
|
Xxxxxx
L.
|
10,000
|
$5,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxx
B.
|
Saugatuck
Energy
|
450,000
|
$225,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxxx
D. and Xxxx X.
|
20,000
|
$10,000.00
|
||||||||||
|
Xxxxx
|
Xxxxxx
M.
|
Xxxxxx
X. Xxxxx and Xxxxxxx X. Xxxxx
|
30,000
|
$15,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxxxx
|
The
Xxxxxx Family Trust
|
60,000
|
$30,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxxx
|
USB
Financial Services CDN FBO Xxxxxxx Xxxxx
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxx
|
Xxxx
and Xxxx
|
Xxxx
Xxxxxx Xxxxx and Dran May Xxxxx, Trustees of The Xxxxx Family Trust dtd.
10/23/2006
|
60,000
|
$30,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxx
|
Xxxxxx
X. Xxxxx and Xxxxxxx X. Xxxxx
|
150,000
|
$75,000.00
|
|||||||||
|
XxXxxx
|
Xxxxxx
G.
|
10,000
|
$5,000.00
|
||||||||||
|
Redoglia
|
Xxxxxxx
|
Xxxxxxxx-Xxxxxx
Family Trust
|
190,000
|
$95,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxxx
|
200,000
|
$100,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxx
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxx
A.
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxx
|
Xxxx
B.
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxx
|
Xxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxx
|
100,000
|
$50,000.00
|
||||||||||
|
Wenhe
|
Xxxx
X.
|
Xxxx
X. Wenhe and Xxxx X. Xxxxxxxx
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxxx
|
200,000
|
$100,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxx
D. and Xxxx X.
|
Xxxxxx
X. Xxxxxx and Xxxx X. Xxxxxx
|
10,000
|
$5,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxx
J.
|
10,000
|
$5,000.00
|
||||||||||
|
Xxxxx
|
Xxxxx
M.
|
10,000
|
$5,000.00
|
||||||||||
|
XxXxxxxxx
|
Xxxx
L.
|
10,000
|
$5,000.00
|
||||||||||
|
Xxxxx
|
Xxxxxx
M.
|
10,000
|
$5,000.00
|
||||||||||
|
Xxxxx
|
Xxxxxx
P.
|
10,000
|
$5,000.00
|
||||||||||
|
Xxxxx
|
Xxxx
E.
|
10,000
|
$5,000.00
|
||||||||||
|
Xxxx
|
Xxxxxx
T.
|
Xxxxxx
X. Xxxx Defined Benefit Pension Plan
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxx
|
Winchester
Partners Pension Plan UA Dtd. 5/21/01 FBO X. Xxxxxxxx
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxxxx
II
|
Xxxx
X.
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxxxx
|
Xxxxx
|
Winchester
Partners
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxxx
|
Xxxxx
M. and Xxxxx X.
|
Xxxxx
X. Xxxxxx and Xxxxx X. Xxxxxx XX WROS
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxx
|
Xxxx
|
100,000
|
$50,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxxx
G. and Xxxxxxx X.
|
Xxxxxx
X. and Xxxxxxx X. Xxxxxxx, Trustees of The Xxxxxxx Family Trust dtd.
2/4/86
|
100,000
|
$50,000.00
|
|||||||||
|
Xxxxxxx
|
E.
Xxxxxx
|
Xxxxxxx
Family Trust, E. Xxxxxx Xxxxxxx, Trustee, Xxxxxx Xxxxxxx
|
2,140,000
|
$1,070,000.00
|
|||||||||
|
Xxxxxx
|
Xxxx
|
50,000
|
$25,000.00
|
||||||||||
|
Xxxx
|
Xxxxxx
and Xxxxx
|
Xxxxxx
Xxxx and Xxxxx Xxxx
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxxxxx
|
Xxxxxx
X.
|
Xxxxxx
Xxxxxxx & Co., as Custodian FBO Xxxxxx X. Xxxxxxxxxx
XXX
|
260,000
|
$130,000.00
|
|||||||||
|
DeClare
|
Xxxxx
Xxxxxx
|
DeClare
Investments Corp.
|
50,000
|
$25,000.00
|
|||||||||
|
Xxxxxxx
II
|
Xxxx
X.
|
25,000
|
$25,000.00
|
||||||||||
|
Xxxxxxxxx
|
Xxxxx
A.
|
50,000
|
$50,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxxxx
X.
|
Xxxxxxx
Family Investments, LLC
|
50,000
|
$50,000.00
|
|||||||||
|
Xxxxxxxxx
|
Xxxxxx
Xxxxxxx
|
150,000
|
$150,000.00
|
||||||||||
|
Xxxxxxxxxxxx
|
Xxxxx
R.
|
10,000
|
$10,000.00
|
||||||||||
|
Xxxxx
|
Xxxxxxx
J.
|
750,000
|
$750,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxx
|
250,000
|
$250,000.00
|
||||||||||
|
Xxxxx-Xxxxx
|
Xxxxx
|
100,000
|
$100,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxx
|
Saugatuck
Energy
|
100,000
|
$100,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxx
|
D
Xxxxxx, X.X., a Virginia Limited Liability Company
|
750,000
|
$750,000.00
|
|||||||||
|
Saishu
|
Eihiro
|
EC-One,
Inc.
|
848,176
|
$848,176.00
|
|||||||||
|
Xxxxxxxxxx
|
Xxx
and Xxxx
|
Living
Trust of Xxx Xxxxxxxx Waterhouse and Xxxx Xxxxxxx Xxxxxxxxxx, UTD
11/6/89
|
25,000
|
$25,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxxx
E.
|
50,000
|
$50,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxx
|
Xxxxxx
Xxxxxxx XX Inc., Custodian FBO Xxxxxx Xxxxxx IA 8/14/92
|
200,000
|
$200,000.00
|
|||||||||
|
Slovenski
|
Xxxxxxx
|
c/o
BHP Billiton Marketing Asia Pacific
|
50,000
|
$50,000.00
|
|||||||||
|
Xxxxxxxx
|
Xxxx
A.
|
25,000
|
$25,000.00
|
||||||||||
|
Xxxxxx
|
Xxxxxx
|
35,000
|
$35,000.00
|
||||||||||
|
Perry
|
Xxxxxx
|
Xxxxx
Family Ltd. Partnership, LLP
|
100,000
|
$100,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxx & Xxxxxxx X. Xxxxx Trust Dtd. 9-1-93
|
25,000
|
$25,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxx & Xxxxxxx X. Xxxxx Trust Dtd. 9-1-93
|
25,000
|
$25,000.00
|
|||||||||
|
Xxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxx Family Trust
|
25,000
|
$25,000.00
|
|||||||||
|
Xxxxx
|
Xxx
|
TRISTAFF
SEARCH
|
7,500
|
$7,500.00
|
|||||||||
|
XxXxxxx
|
Xxxxx
F.
|
Xxxxx
X. XxXxxxx XX Living Trust
|
75,000
|
$75,000.00
|
|||||||||
|
3,059,700
|
2,266,297
|
7,664,571
|
4,170,000
|
3,725,676
|
3,485,800
|
$10,598,340.33
|
|||||||
|
24,372,044
|
|||||||||||||
|
X.
Xxxxxx L.C.
|
D.
Xxxxxx X.X.
|
c/o
Century Stair Company
|
$1,000,000.00
|
||||||||||
|
Xxxxxxx
|
Xxxxxxx
|
Xxxxxxx
X. Xxxxxxx Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
$20,000.00
|
||||||||||
|
Xxxx
|
Xxxxxx
|
Xxxxx
X. Xxxx, Trustee, Xxxxx X. Xxxx Trust Dated June 17, 2002
|
$11,000.00
|
||||||||||
|
Xxxxxx
|
Xxxx
|
$25,000.00
|
|||||||||||
|
Xxxxxxxx
|
Xxxxxxx
|
$25,000.00
|
|||||||||||
|
Slovenski
|
Xxxxxxx
|
c/o
BHP Billiton Marketing Asia Pacific
|
$20,000.00
|
||||||||||
|
Equity
Trust Co., Cust. FBO Xxxx X. Xxxxx XXX #35462
|
$40,000.00
|
||||||||||||
|
Xxxxxxx
|
Xxxxxx
|
$50,000.00
|
|||||||||||
|
XxXxxxx
|
Xxxxx
|
$25,000.00
|
|||||||||||
|
Xxxx
|
Xxxx
|
$25,000.00
|
|||||||||||
|
Xxxxxxx
|
H.A.
|
H.A.
Xxxxxxx, Successor Trustee, Survivor[s Trust, Xxxxxxx Family Trust UA
dated 2/8/89
|
$6,250.00
|
||||||||||
|
Xxxxxxx
|
Xxxxxx
|
$30,000.00
|
|||||||||||
|
Xxxxxxx
|
Xxxx
A.
|
$30,000.00
|
|||||||||||
|
Xxxx
|
Xxxxxx
|
Xxxx
Investments, LLC
|
$10,000.00
|
||||||||||
|
Xxxxxxx
X. Xxxxx & Xxxxxxx X. Xxxxx Trust dtd. 9/1/93
|
$25,000.00
|
||||||||||||
|
Xxxxxxxx
|
Xxxx
A.
|
$15,000.00
|
|||||||||||
|
XxXxxx
|
Xxxxxxx
S.
|
Arcturus
Advertising Company, Inc. Defined Benefit Pension Plan FBO Xxxxxxx X.
XxXxxx
|
$25,000.00
|
||||||||||
|
Perry
|
Dr
& Xxx. Xxxxxx
|
Xxxxx
Family Limited Partnership LLP UTD 3/13/1977
|
$300,000.00
|
||||||||||
|
Patriot
|
Patriot
Scientific Corporation
|
$400,000.00
|
|||||||||||
|
Patriot
|
Patriot
Scientific Corporation
|
$417,750.00
|
|||||||||||
|
$2,500,000.00
|
|||||||||||||
Schedule
1A
|
Merger
Consideration Allocation to Crossflo Shareholders at
Closing
|
|||||||||||
|
To Allocate and Distribute to All Crossflo
Stockholders at Closing:
|
Ratio
Calculation for Closing Allocation
|
||||||||||
|
Stock
Consideration
|
$4,285,185
|
68.31%
|
Total
Invested in Preferrred Stock
|
$10,598,340
|
100.00%
|
||||||
|
Cash
Consideration
|
$1,987,815
|
31.69%
|
Merger
Consideration at close
|
$6,273,000
|
59.19%
|
||||||
|
$6,273,000
|
100.00%
|
||||||||||
|
Stockholder
|
Series A Preferred
|
Series B Preferred
|
Series C Preferred
|
Series D Preferred
|
Series E Preferred
|
Common
|
Investment
|
Exchange
|
Stock
Consideration at closing
|
Cash
Consideration at closing
|
|
|
Price
|
$.09/sh
|
$.35/sh
|
$.50/sh
|
$.50/sh
|
$1.00/sh
|
N/A
|
Ratio
|
||||
|
Xxx
|
Xxxx
|
883,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxx
|
Xxxxxxxxx
|
353,400
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxx
|
Xxxxx
|
353,400
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxx
|
Xxxxx
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxx
|
Xxxxx
B.
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxx
|
Xxxxxxx
|
7,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxx
|
Xxxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxx
|
Xxxx
|
40,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxx
|
Xxxxxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxx
|
Xxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxxx
|
Xxxxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxxx
|
Xxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Arvantakis
|
Xxxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxx
X. Xxxx, Trustee, Xxxxx X. Xxxx Trust dated June 17, 2002
|
250,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxxxxxx
|
Xxxx
|
37,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxx
|
Xxxxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxx
|
Xxxxxx
|
15,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxx
|
Xxxxxx
B.
|
150,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxxx-Xxxxxx
Family Trust
|
150,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Kasino
|
Xxxxxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxxxx
X. Xxxxxxx Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
25,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxx
|
Xxxxxx
|
37,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxx
X. Xxxxxxxxxx and Xxxxxx Xxxxxxxxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Don
and Xxxxx
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxxx
|
Xxxxx
|
7,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxx
Xxxx and Xxxxxx Xxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxx
Trigger and Xxxxxxx Trigger
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxxx
|
Xxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxx
Xxxxxxx and Xxxxx Xxxxxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxxxx
|
Xxxxx
and Xxxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxx
Xxxxxxxx and Xxxx Xxxxxxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxxx
Xxxxxxxx and Xxxxx Xxxxxxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxxx
Xxxx and Xxxxxxxx Xxxx
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxx
|
Xxxx
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxxx
Xxxxxxxx and Xxx Xxxxxxxx
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Alexander
and Xxxxx
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxxx
|
Xxxxxx
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Xxxx
Xxxxxx and Xxxx Xxxxxx
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Xxxxxx
|
Xxxxx
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Jeff
Lamp and Carolyn Lamp
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Oury
|
James
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Barry
Kassar and Avra Kassar
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
John
Moreland and Susie Moreland
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Oury
|
Peggy
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Glenn
Plummer and Deborah Plummer
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Richard
Brown and Ellen Brown
|
Richard
and Ellen
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Robertson
|
Fred
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hashemi
|
Said
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Bill
Sandke and Sue Sandke
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Shaun
T. Alger and Dani Alger
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Stephen
Shoemaker and Denise Shoemaker
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Spiegler
|
Frederick
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
The
Mohlenbrock Family Trust dated 2/19/1985
|
130,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Lakdawala
|
Nancy
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Fenn
|
Jeff
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Stiska
|
John
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Wagner
|
Winfield
J.
|
5,625
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Wagner
|
Winfield
J.
|
4,375
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hartley
|
Angela
|
15,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hartley
|
Angela
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Ryan
|
Michael
|
60,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Ullrich
|
Randy
|
60,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
25,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Walton
|
Jonathan
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Lanier,
Sr.
|
Willie
E.
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Greene
|
Robert
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Graham
|
Philip
|
80,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Living
Trust of Tom & Mary Waterhouse, UTD 11/6/89
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Redoglia-Ashton
Family Trust
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Redoglia-Ashton
Family Trust
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Redoglia-Ashton
Family Trust
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
1995
Keller Family Trust
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
1995
Keller Family Trust
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Ryan
Investments
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
The
Martin Family Trust
|
25,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Hardage
|
Samuel
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hardage
|
Samuel
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Stiska
|
John
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Susan
E. Senn, Trustee, Susan E. Senn Trust Dated June 17, 2002
|
1,116,000
|
$100,440.00
|
59.19%
|
$40,610.51
|
$18,838.43
|
||||||
|
Breen
|
Timothy
|
5,000
|
$450.00
|
59.19%
|
$181.95
|
$84.40
|
|||||
|
Hong
|
Marcus
|
2,500
|
$225.00
|
59.19%
|
$90.97
|
$42.20
|
|||||
|
Ortiz
|
Terri
|
2,500
|
$225.00
|
59.19%
|
$90.97
|
$42.20
|
|||||
|
Mohlenbrock
Family Trust Dated Feb. 19, 1985
|
1,933,700
|
$82,263.58
|
59.19%
|
$33,261.31
|
$15,429.28
|
||||||
|
Mohlenbrock
Family Trust Dated Feb. 19, 1985
|
102,041
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Susan
E. Senn, Trustee, Susan E. Senn Trust Dated June 17, 2002
|
102,041
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Collins
|
Gary
|
102,041
|
$35,714.35
|
59.19%
|
$14,440.24
|
$6,698.55
|
|||||
|
The
1995 Keller Family Trust
|
124,490
|
$43,571.50
|
59.19%
|
$17,617.09
|
$8,172.23
|
||||||
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
142,857
|
$49,999.95
|
59.19%
|
$20,216.28
|
$9,377.94
|
||||||
|
The
Harris Family Trust U/D/T 8/23/93
|
142,857
|
$49,999.95
|
59.19%
|
$20,216.28
|
$9,377.94
|
||||||
|
John
Joseph and Eleanor Lee Godfrey Trust dated 3/1/93
|
71,429
|
$25,000.15
|
59.19%
|
$10,108.21
|
$4,689.01
|
||||||
|
Lori
and Keith Edwards Family Trust dated 3/26/96
|
142,857
|
$49,999.95
|
59.19%
|
$20,216.28
|
$9,377.94
|
||||||
|
Patricia
Ann Elam Living Trust dated 8/19/1998
|
71,429
|
$25,000.15
|
59.19%
|
$10,108.21
|
$4,689.01
|
||||||
|
Wenhe
|
Paul
A.
|
100,000
|
$35,000.00
|
59.19%
|
$14,151.41
|
$6,564.57
|
|||||
|
John
Michael Vaught and Shannon J. Vaught
|
71,429
|
$25,000.15
|
59.19%
|
$10,108.21
|
$4,689.01
|
||||||
|
Engelman
Family Trust dated 5/7/92
|
71,500
|
$25,025.00
|
59.19%
|
$10,118.26
|
$4,693.67
|
||||||
|
Marquand
|
Jean
L.
|
100,000
|
$35,000.00
|
59.19%
|
$14,151.41
|
$6,564.57
|
|||||
|
Lanier,
Sr.
|
Willie
E.
|
30,000
|
$10,500.00
|
59.19%
|
$4,245.42
|
$1,969.37
|
|||||
|
Sweeney
|
Kim
R.
|
51,020
|
$17,857.00
|
59.19%
|
$7,220.05
|
$3,349.24
|
|||||
|
Sweeney
|
Patrick
|
51,021
|
$17,857.35
|
59.19%
|
$7,220.19
|
$3,349.31
|
|||||
|
Redoglia-Ashton
Family Trust
|
428,571
|
$149,999.85
|
59.19%
|
$60,648.85
|
$28,133.83
|
||||||
|
Equity
Trust Co., Cust. FBO Joan G. Brown IRA #35462
|
75000
|
$26,250.00
|
59.19%
|
$10,613.56
|
$4,923.43
|
||||||
|
Martin
|
Barry
M.
|
285,714
|
$99,999.90
|
59.19%
|
$40,432.56
|
$18,755.89
|
|||||
|
Hardage
|
Samuel
A.
|
400,000
|
$200,000.00
|
59.19%
|
$80,865.21
|
$37,511.82
|
|||||
|
Redoglia-Ashton
Family Trust
|
250,000
|
$125,000.00
|
59.19%
|
$50,540.76
|
$23,444.89
|
||||||
|
John
Michael Vaught and Shannon J. Vaught
|
28,571
|
$14,285.50
|
59.19%
|
$5,776.00
|
$2,679.38
|
||||||
|
1995
Keller Family Trust
|
56,000
|
$28,000.00
|
59.19%
|
$11,321.13
|
$5,251.65
|
||||||
|
Chen
|
Marie
|
40,000
|
$20,000.00
|
59.19%
|
$8,086.52
|
$3,751.18
|
|||||
|
Sweeney
|
Patrick
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Metcalf
|
Terry
K.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Susan
E. Senn, Trustee, Susan E. Senn Trust Dated June 17, 2002
|
20,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
||||||
|
Ryan
Investments, LLC
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Mohlenbrock
Family Trust Dated Feb. 19, 1985
|
20,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
||||||
|
Spectrum
Electrical Services, Inc.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Patricia
Ann Elam Living Trust dated 8/19/1998
|
40,000
|
$20,000.00
|
59.19%
|
$8,086.52
|
$3,751.18
|
||||||
|
Tribolet
Family Trust dated August 12, 1993
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Redoglia
|
Douglas
|
80,000
|
$40,000.00
|
59.19%
|
$16,173.04
|
$7,502.36
|
|||||
|
Goodin
|
William
A.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Miller
Family Trust dated 4/30/82
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Collini
|
Kenneth
D.
|
40,000
|
$20,000.00
|
59.19%
|
$8,086.52
|
$3,751.18
|
|||||
|
Richard
S. Brklacich and Andrea Alderson
|
60,000
|
$30,000.00
|
59.19%
|
$12,129.78
|
$5,626.77
|
||||||
|
Murphy
|
David
B.
|
500,000
|
$250,000.00
|
59.19%
|
$101,081.51
|
$46,889.77
|
|||||
|
Allred
Family Living Trust
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Kelley
Living Trust dated November 22, 1988
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Whitlock
|
Sandra
L.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Piazza
|
David
V. and Rosemarie
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Fricke
|
James
C.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Sullivan
|
Timothy
J.
|
60,000
|
$30,000.00
|
59.19%
|
$12,129.78
|
$5,626.77
|
|||||
|
John
D. Benelli and S. Tracy Benelli
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Jensen
Family Trust of 2001
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Curran
|
John
J.
|
40,000
|
$20,000.00
|
59.19%
|
$8,086.52
|
$3,751.18
|
|||||
|
Curran
|
John
M.
|
200,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
|||||
|
Funderburk
|
William
W.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Walsh
|
Michael
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Foley
|
William
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Silvay
|
Robert
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Equity
Trust Co., Cust. FBO Joan G. Brown IRA #35462
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Jonke
|
Robert
S.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Cardelfe
|
Michael
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Kilkenny
|
Rita
M.
|
25,000
|
$12,500.00
|
59.19%
|
$5,054.08
|
$2,344.49
|
|||||
|
Kilkenny
|
Michael
T.
|
25,000
|
$12,500.00
|
59.19%
|
$5,054.08
|
$2,344.49
|
|||||
|
Slovenski
|
Richard
|
60,000
|
$30,000.00
|
59.19%
|
$12,129.78
|
$5,626.77
|
|||||
|
Smith
|
Christopher
P.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Gerald
T. Mohr Defined Benefit Pension Plan
|
80,000
|
$40,000.00
|
59.19%
|
$16,173.04
|
$7,502.36
|
||||||
|
Whitmore
|
David
D.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Vanderweghe,
Jr.
|
George
William
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Metcalf
|
Terry
K.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Enstice
|
E.
Thomas
|
220,000
|
$110,000.00
|
59.19%
|
$44,475.86
|
$20,631.50
|
|||||
|
Kilkenny
|
Rita
M.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Kilkenny
|
Michael
T.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Wenhe
|
Paul
A.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
DiCello
|
The
DiCello Trust
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Orlando
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Jacobs
|
Peter
|
150,000
|
$75,000.00
|
59.19%
|
$30,324.45
|
$14,066.93
|
|||||
|
Goodwin
|
Douglas
G.
|
60,000
|
$30,000.00
|
59.19%
|
$12,129.78
|
$5,626.77
|
|||||
|
David
B. Duffie Trust UA dated 5/22/97
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
||||||
|
Miera
|
James
D.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
The
DiCello Trust
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Graham
|
James
D.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Breckinridge
|
James
R.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Mary
Miller and Tyler Miller III
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
||||||
|
Miller
|
Grant
Matthew
|
20,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
|||||
|
Arlin
Yrastorza and Tim Yrastorza
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
||||||
|
Davied
Benson and Lauren Benson
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
||||||
|
Louanna
E. Reithner Robeson, Trustee, Reithner Family Trust
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Robert
H. Robeson, Trustee, Robert Revocable Trust UA 08-29-78
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Allred
Family Living Trust
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
MLPFS
Cust. FBO Richard Redoglia
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
David
V. Piazza and Rosemarie Piazza
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Patricia
Ann Elam Living Trust dated 8/19/1998
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Collini
|
Kenneth
D.
|
30,000
|
$15,000.00
|
59.19%
|
$6,064.89
|
$2,813.39
|
|||||
|
Jenkins
|
Mark
Philip
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Kane
|
Richard
E.
|
200,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
|||||
|
The
DiCello Trust
|
150,000
|
$75,000.00
|
59.19%
|
$30,324.45
|
$14,066.93
|
||||||
|
Wechsler
|
Mark
|
20,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
|||||
|
Arvantakis
|
James
|
30,000
|
$15,000.00
|
59.19%
|
$6,064.89
|
$2,813.39
|
|||||
|
Redoglia
|
Douglas
|
40,000
|
$20,000.00
|
59.19%
|
$8,086.52
|
$3,751.18
|
|||||
|
Jeffrey
Baird, TTE US Dtd. 05-19-1995
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
J.
Robert Collins, Jr.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Davanon
|
Jeffrey
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Graham
|
Theodore
W.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Ascher
|
Robert
J.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Enstice
|
E.
Thomas
|
230,000
|
$115,000.00
|
59.19%
|
$46,497.49
|
$21,569.29
|
|||||
|
First
Regional Bank, FBO Rand P. Mulford IRA #005888
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Estate
of Richard C. Schmitz
|
200,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
||||||
|
Schmitz
|
Janet
G.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Brett
Clare and Amy Clare
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
H.A.
Zoehrer, Successor Trustee Survivor's Trust, Zoehrer Family Trust U/A Dtd.
2/9/1989
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
American
Express Trust Company as Custodian for Keith C. Edwards IRA SPS A/C
#5227-8496-6-02
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Smith
|
Robert
C.
|
20,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
|||||
|
Anthony
P. Chianese and Margaret A. Chianese
|
20,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
||||||
|
Blanchard
|
Robert
L.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Murphy
|
David
B.
|
450,000
|
$225,000.00
|
59.19%
|
$90,973.36
|
$42,200.79
|
|||||
|
Travis
D. and Lisa M.
|
20,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
||||||
|
Joseph
M. Dugan and Jeanene A. Dugan
|
30,000
|
$15,000.00
|
59.19%
|
$6,064.89
|
$2,813.39
|
||||||
|
The
Martin Family Trust
|
60,000
|
$30,000.00
|
59.19%
|
$12,129.78
|
$5,626.77
|
||||||
|
USB
Financial Services CDN FBO Michael Malsh
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Dean
Howard Reese and Dran May Reese, Trustees of The Reese Family Trust dtd.
10/23/2006
|
60,000
|
$30,000.00
|
59.19%
|
$12,129.78
|
$5,626.77
|
||||||
|
Joseph
M. Dugan and Jeanene A. Dugan
|
150,000
|
$75,000.00
|
59.19%
|
$30,324.45
|
$14,066.93
|
||||||
|
McHugh
|
Martin
G.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Redoglia-Ashton
Family Trust
|
190,000
|
$95,000.00
|
59.19%
|
$38,410.97
|
$17,818.11
|
||||||
|
Kirshner
|
Howard
|
200,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
|||||
|
Aurilia
|
Ralph
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Perkins
|
David
A.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Smith
|
Kyle
B.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Delay
|
Tim
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Aurilia
|
Jerry
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Paul
A. Wenhe and Jean L. Marquand
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Thompson
|
Robert
|
200,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
|||||
|
Travis
D. Arends and Lisa M. Arends
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
||||||
|
Dugan
|
Joseph
J.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Dugan
|
James
M.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
LoPiccolo
|
Anne
L.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Dugan
|
Thomas
M.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Dugan
|
Daniel
P.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Dugan
|
Mary
E.
|
10,000
|
$5,000.00
|
59.19%
|
$2,021.63
|
$937.80
|
|||||
|
Gerald
T. Mohr Defined Benefit Pension Plan
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Winchester
Partners Pension Plan UA Dtd. 5/21/01 FBO K. Monaghan
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Tidwell
II
|
John
W.
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Winchester
Partners
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Jerry
M. Harris and Susan G. Harris JT WROS
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Aden
|
Gary
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Ronald
G. and Coralyn L. Summers, Trustees of The Summers Family Trust dtd.
2/4/86
|
100,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Enstice
Family Trust, E. Thomas Enstice, Trustee, Morgan Stanley
|
2,140,000
|
$1,070,000.00
|
59.19%
|
$432,628.87
|
$200,688.22
|
||||||
|
Stiska
|
John
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Ernest
Hite and Terry Hite
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Morgan
Stanley & Co., as Custodian FBO Thomas H. Cifaloglio
IRA
|
260,000
|
$130,000.00
|
59.19%
|
$52,562.39
|
$24,382.68
|
||||||
|
DeClare
Investments Corp.
|
50,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Tidwell
II
|
John
W.
|
25,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Stanziale
|
Bruno
A.
|
50,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Knittig
Family Investments, LLC
|
50,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
||||||
|
Adipietro
|
Joseph
Jeffrey
|
150,000
|
$150,000.00
|
59.19%
|
$60,648.91
|
$28,133.86
|
|||||
|
Breckinridge
|
James
R.
|
10,000
|
$10,000.00
|
59.19%
|
$4,043.26
|
$1,875.59
|
|||||
|
Viola
|
Vincent
J.
|
750,000
|
$750,000.00
|
59.19%
|
$303,244.53
|
$140,669.31
|
|||||
|
Salomon
|
David
|
250,000
|
$250,000.00
|
59.19%
|
$101,081.51
|
$46,889.77
|
|||||
|
Crane-Baker
|
James
|
100,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
|||||
|
Murphy
|
David
|
100,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
|||||
|
D
Graham, L.C., a Virginia Limited Liability Company
|
750,000
|
$750,000.00
|
59.19%
|
$303,244.53
|
$140,669.31
|
||||||
|
EC-One,
Inc.
|
848,176
|
$848,176.00
|
59.19%
|
$342,939.65
|
$159,083.11
|
||||||
|
Living
Trust of Tom Williams Waterhouse and Mary Maurine Waterhouse, UTD
11/6/89
|
25,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Orlikoff
|
James
E.
|
50,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Morgan
Stanley DW Inc., Custodian FBO George Miller IA 8/14/92
|
200,000
|
$200,000.00
|
59.19%
|
$80,865.21
|
$37,511.82
|
||||||
|
Slovenski
|
Richard
|
50,000
|
$50,000.00
|
59.19%
|
$20,216.30
|
$9,377.95
|
|||||
|
Harrison
|
Eric
A.
|
25,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
|||||
|
Nonaka
|
Makoto
|
35,000
|
$35,000.00
|
59.19%
|
$14,151.41
|
$6,564.57
|
|||||
|
Perry
Family Ltd. Partnership, LLP
|
100,000
|
$100,000.00
|
59.19%
|
$40,432.60
|
$18,755.91
|
||||||
|
Richard
A. Lewis & Roberta D. Lewis Trust Dtd. 9-1-93
|
25,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Richard
A. Lewis & Roberta D. Lewis Trust Dtd. 9-1-93
|
25,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
Charles
L. Baker Family Trust
|
25,000
|
$25,000.00
|
59.19%
|
$10,108.15
|
$4,688.98
|
||||||
|
TRISTAFF
SEARCH
|
7,500
|
$7,500.00
|
59.19%
|
$3,032.45
|
$1,406.69
|
||||||
|
James
F. McGuirk II Living Trust
|
75,000
|
$75,000.00
|
59.19%
|
$30,324.45
|
$14,066.93
|
||||||
|
3,059,700
|
2,266,297
|
7,664,571
|
4,170,000
|
3,725,676
|
3,485,800
|
$10,598,340.33
|
|||||
|
$4,285,185.00
|
$1,987,815.00
|
||||||||||
|
Total
|
24,372,044
|
||||||||||
|
Cross
Check
|
$4,285,185.00
|
$1,987,815.00
|
|||||||||
Schedule
1B
|
Merger
Consideration Allocation to Crossflo Shareholders at
Closing
|
|||||||||
|
To Allocate and Distribute to All Crossflo
Stockholders at Escrow Release:
|
Ratio
Calculation for Escrow Allocation
|
||||||||
|
Stock
Consideration
|
$697,000
|
100.00%
|
Total
Invested in Preferrred Stock
|
$10,598,340
|
100.00%
|
||||
|
Cash
Consideration
|
0
|
0.00%
|
Merger
Consideration at close
|
$697,000
|
6.58%
|
||||
|
$697,000
|
100.00%
|
||||||||
|
Stockholder
|
Series A Preferred
|
Series B Preferred
|
Series C Preferred
|
Series D Preferred
|
Series E Preferred
|
Common
|
Investment
|
Exchange
Ratio
|
Stock
Consideration at Escrow Release
|
Cash
Consideration at Escrow release
|
|
|
Price
|
$.09/sh
|
$.35/sh
|
$.50/sh
|
$.50/sh
|
$1.00/sh
|
N/A
|
|
||||
|
Cao
|
Minh
|
883,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Graham
|
Katherine
|
353,400
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Mooney
|
Brian
|
353,400
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Mooney
|
Brian
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Murphy
|
David
B.
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Sweeney
|
Patrick
|
7,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Miera
|
James
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Collins
|
Gary
|
40,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Boone
|
Maxwell
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Gordan
|
Jay
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Redoglia
|
Donald
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Wechsler
|
Mark
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Arvantakis
|
James
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Susan
E. Senn, Trustee, Susan E. Senn Trust dated June 17, 2002
|
250,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Armentrout
|
John
|
37,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hartley
|
Angela
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hartley
|
Angela
|
15,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Ramirez
|
Joseph
B.
|
150,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Redoglia-Ashton
Family Trust
|
150,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Kasino
|
Michael
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
25,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Miller
|
Jeanne
|
37,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
James
P. Blasingame and Laurie Blasingame
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Don
and Janie
|
10,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Johnson
|
Lanny
|
7,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Paul
Hyde and Denise Hyde
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Jeff
Trigger and Carolyn Trigger
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Henning
|
Joan
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Louis
Katzman and Sarah Katzman
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Orlikoff
|
Jamie
and Anita
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Paul
Williams and Mary Williams
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Raymond
Linovitz and Carol Linovitz
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Michael
Turk and Patricia Turk
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Bloom
|
Alan
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
James
Chandler and Sue Chandler
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Alexander
and Susie
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Skelley
|
Glenna
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Jack
Shubin and Mary Shubin
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Stiska
|
Janet
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Jeff
Lamp and Carolyn Lamp
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Oury
|
James
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Barry
Kassar and Avra Kassar
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
John
Moreland and Susie Moreland
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Oury
|
Peggy
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Glenn
Plummer and Deborah Plummer
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Richard
Brown and Ellen Brown
|
Richard
and Ellen
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Robertson
|
Fred
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hashemi
|
Said
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Bill
Sandke and Sue Sandke
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Shaun
T. Alger and Dani Alger
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Stephen
Shoemaker and Denise Shoemaker
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Spiegler
|
Frederick
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
The
Mohlenbrock Family Trust dated 2/19/1985
|
130,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Lakdawala
|
Nancy
|
2,500
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Fenn
|
Jeff
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Stiska
|
John
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Wagner
|
Winfield
J.
|
5,625
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Wagner
|
Winfield
J.
|
4,375
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hartley
|
Angela
|
15,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hartley
|
Angela
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Ryan
|
Michael
|
60,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Ullrich
|
Randy
|
60,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
25,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Walton
|
Jonathan
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Lanier,
Sr.
|
Willie
E.
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Greene
|
Robert
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Graham
|
Philip
|
80,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Living
Trust of Tom & Mary Waterhouse, UTD 11/6/89
|
5,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Redoglia-Ashton
Family Trust
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Redoglia-Ashton
Family Trust
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Redoglia-Ashton
Family Trust
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
1995
Keller Family Trust
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
1995
Keller Family Trust
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Ryan
Investments
|
20,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
The
Martin Family Trust
|
25,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
||||||
|
Hardage
|
Samuel
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Hardage
|
Samuel
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Stiska
|
John
|
50,000
|
N/A
|
0.00%
|
$0.00
|
$0.00
|
|||||
|
Susan
E. Senn, Trustee, Susan E. Senn Trust Dated June 17, 2002
|
1,116,000
|
$100,440.00
|
6.58%
|
$6,605.44
|
$0.00
|
||||||
|
Breen
|
Timothy
|
5,000
|
$450.00
|
6.58%
|
$29.59
|
$0.00
|
|||||
|
Hong
|
Marcus
|
2,500
|
$225.00
|
6.58%
|
$14.80
|
$0.00
|
|||||
|
Ortiz
|
Terri
|
2,500
|
$225.00
|
6.58%
|
$14.80
|
$0.00
|
|||||
|
Mohlenbrock
Family Trust Dated Feb. 19, 1985
|
1,933,700
|
$82,263.58
|
6.58%
|
$5,410.07
|
$0.00
|
||||||
|
Mohlenbrock
Family Trust Dated Feb. 19, 1985
|
102,041
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Susan
E. Senn, Trustee, Susan E. Senn Trust Dated June 17, 2002
|
102,041
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Collins
|
Gary
|
102,041
|
$35,714.35
|
6.58%
|
$2,348.75
|
$0.00
|
|||||
|
The
1995 Keller Family Trust
|
124,490
|
$43,571.50
|
6.58%
|
$2,865.48
|
$0.00
|
||||||
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
142,857
|
$49,999.95
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
The
Harris Family Trust U/D/T 8/23/93
|
142,857
|
$49,999.95
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
John
Joseph and Eleanor Lee Godfrey Trust dated 3/1/93
|
71,429
|
$25,000.15
|
6.58%
|
$1,644.14
|
$0.00
|
||||||
|
Lori
and Keith Edwards Family Trust dated 3/26/96
|
142,857
|
$49,999.95
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Patricia
Ann Elam Living Trust dated 8/19/1998
|
71,429
|
$25,000.15
|
6.58%
|
$1,644.14
|
$0.00
|
||||||
|
Wenhe
|
Paul
A.
|
100,000
|
$35,000.00
|
6.58%
|
$2,301.78
|
$0.00
|
|||||
|
John
Michael Vaught and Shannon J. Vaught
|
71,429
|
$25,000.15
|
6.58%
|
$1,644.14
|
$0.00
|
||||||
|
Engelman
Family Trust dated 5/7/92
|
71,500
|
$25,025.00
|
6.58%
|
$1,645.77
|
$0.00
|
||||||
|
Marquand
|
Jean
L.
|
100,000
|
$35,000.00
|
6.58%
|
$2,301.78
|
$0.00
|
|||||
|
Lanier,
Sr.
|
Willie
E.
|
30,000
|
$10,500.00
|
6.58%
|
$690.53
|
$0.00
|
|||||
|
Sweeney
|
Kim
R.
|
51,020
|
$17,857.00
|
6.58%
|
$1,174.37
|
$0.00
|
|||||
|
Sweeney
|
Patrick
|
51,021
|
$17,857.35
|
6.58%
|
$1,174.39
|
$0.00
|
|||||
|
Redoglia-Ashton
Family Trust
|
428,571
|
$149,999.85
|
6.58%
|
$9,864.74
|
$0.00
|
||||||
|
Equity
Trust Co., Cust. FBO Joan G. Brown IRA #35462
|
75000
|
$26,250.00
|
6.58%
|
$1,726.33
|
$0.00
|
||||||
|
Martin
|
Barry
M.
|
285,714
|
$99,999.90
|
6.58%
|
$6,576.49
|
$0.00
|
|||||
|
Hardage
|
Samuel
A.
|
400,000
|
$200,000.00
|
6.58%
|
$13,153.00
|
$0.00
|
|||||
|
Redoglia-Ashton
Family Trust
|
250,000
|
$125,000.00
|
6.58%
|
$8,220.63
|
$0.00
|
||||||
|
John
Michael Vaught and Shannon J. Vaught
|
28,571
|
$14,285.50
|
6.58%
|
$939.49
|
$0.00
|
||||||
|
1995
Keller Family Trust
|
56,000
|
$28,000.00
|
6.58%
|
$1,841.42
|
$0.00
|
||||||
|
Chen
|
Marie
|
40,000
|
$20,000.00
|
6.58%
|
$1,315.30
|
$0.00
|
|||||
|
Sweeney
|
Patrick
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Metcalf
|
Terry
K.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Susan
E. Senn, Trustee, Susan E. Senn Trust Dated June 17, 2002
|
20,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
||||||
|
Ryan
Investments, LLC
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Mohlenbrock
Family Trust Dated Feb. 19, 1985
|
20,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
||||||
|
Spectrum
Electrical Services, Inc.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Patricia
Ann Elam Living Trust dated 8/19/1998
|
40,000
|
$20,000.00
|
6.58%
|
$1,315.30
|
$0.00
|
||||||
|
Tribolet
Family Trust dated August 12, 1993
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Redoglia
|
Douglas
|
80,000
|
$40,000.00
|
6.58%
|
$2,630.60
|
$0.00
|
|||||
|
Goodin
|
William
A.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Miller
Family Trust dated 4/30/82
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Collini
|
Kenneth
D.
|
40,000
|
$20,000.00
|
6.58%
|
$1,315.30
|
$0.00
|
|||||
|
Richard
S. Brklacich and Andrea Alderson
|
60,000
|
$30,000.00
|
6.58%
|
$1,972.95
|
$0.00
|
||||||
|
Murphy
|
David
B.
|
500,000
|
$250,000.00
|
6.58%
|
$16,441.25
|
$0.00
|
|||||
|
Allred
Family Living Trust
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Kelley
Living Trust dated November 22, 1988
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Whitlock
|
Sandra
L.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Piazza
|
David
V. and Rosemarie
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Fricke
|
James
C.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Sullivan
|
Timothy
J.
|
60,000
|
$30,000.00
|
6.58%
|
$1,972.95
|
$0.00
|
|||||
|
John
D. Benelli and S. Tracy Benelli
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Jensen
Family Trust of 2001
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Curran
|
John
J.
|
40,000
|
$20,000.00
|
6.58%
|
$1,315.30
|
$0.00
|
|||||
|
Curran
|
John
M.
|
200,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
|||||
|
Funderburk
|
William
W.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Walsh
|
Michael
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Foley
|
William
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Silvay
|
Robert
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Equity
Trust Co., Cust. FBO Joan G. Brown IRA #35462
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Jonke
|
Robert
S.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Cardelfe
|
Michael
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Kilkenny
|
Rita
M.
|
25,000
|
$12,500.00
|
6.58%
|
$822.06
|
$0.00
|
|||||
|
Kilkenny
|
Michael
T.
|
25,000
|
$12,500.00
|
6.58%
|
$822.06
|
$0.00
|
|||||
|
Slovenski
|
Richard
|
60,000
|
$30,000.00
|
6.58%
|
$1,972.95
|
$0.00
|
|||||
|
Smith
|
Christopher
P.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Gerald
T. Mohr Defined Benefit Pension Plan
|
80,000
|
$40,000.00
|
6.58%
|
$2,630.60
|
$0.00
|
||||||
|
Whitmore
|
David
D.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Vanderweghe,
Jr.
|
George
William
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Metcalf
|
Terry
K.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Enstice
|
E.
Thomas
|
220,000
|
$110,000.00
|
6.58%
|
$7,234.15
|
$0.00
|
|||||
|
Kilkenny
|
Rita
M.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Kilkenny
|
Michael
T.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Wenhe
|
Paul
A.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
DiCello
|
The
DiCello Trust
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Orlando
|
Michael
P. Orlando Family Trust of 1995 dated 12/14/1995 as Amended and Restated
12/8/1999
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Jacobs
|
Peter
|
150,000
|
$75,000.00
|
6.58%
|
$4,932.38
|
$0.00
|
|||||
|
Goodwin
|
Douglas
G.
|
60,000
|
$30,000.00
|
6.58%
|
$1,972.95
|
$0.00
|
|||||
|
David
B. Duffie Trust UA dated 5/22/97
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
||||||
|
Miera
|
James
D.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
The
DiCello Trust
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Graham
|
James
D.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Breckinridge
|
James
R.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Mary
Miller and Tyler Miller III
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
||||||
|
Miller
|
Grant
Matthew
|
20,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
|||||
|
Arlin
Yrastorza and Tim Yrastorza
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
||||||
|
Davied
Benson and Lauren Benson
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
||||||
|
Louanna
E. Reithner Robeson, Trustee, Reithner Family Trust
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Robert
H. Robeson, Trustee, Robert Revocable Trust UA 08-29-78
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Allred
Family Living Trust
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
MLPFS
Cust. FBO Richard Redoglia
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
David
V. Piazza and Rosemarie Piazza
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Patricia
Ann Elam Living Trust dated 8/19/1998
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Collini
|
Kenneth
D.
|
30,000
|
$15,000.00
|
6.58%
|
$986.48
|
$0.00
|
|||||
|
Jenkins
|
Mark
Philip
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Kane
|
Richard
E.
|
200,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
|||||
|
The
DiCello Trust
|
150,000
|
$75,000.00
|
6.58%
|
$4,932.38
|
$0.00
|
||||||
|
Wechsler
|
Mark
|
20,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
|||||
|
Arvantakis
|
James
|
30,000
|
$15,000.00
|
6.58%
|
$986.48
|
$0.00
|
|||||
|
Redoglia
|
Douglas
|
40,000
|
$20,000.00
|
6.58%
|
$1,315.30
|
$0.00
|
|||||
|
Jeffrey
Baird, TTE US Dtd. 05-19-1995
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
J.
Robert Collins, Jr.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Davanon
|
Jeffrey
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Graham
|
Theodore
W.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Ascher
|
Robert
J.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Enstice
|
E.
Thomas
|
230,000
|
$115,000.00
|
6.58%
|
$7,562.98
|
$0.00
|
|||||
|
First
Regional Bank, FBO Rand P. Mulford IRA #005888
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Estate
of Richard C. Schmitz
|
200,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
||||||
|
Schmitz
|
Janet
G.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Brett
Clare and Amy Clare
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
H.A.
Zoehrer, Successor Trustee Survivor's Trust, Zoehrer Family Trust U/A Dtd.
2/9/1989
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
American
Express Trust Company as Custodian for Keith C. Edwards IRA SPS A/C
#5227-8496-6-02
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Smith
|
Robert
C.
|
20,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
|||||
|
Anthony
P. Chianese and Margaret A. Chianese
|
20,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
||||||
|
Blanchard
|
Robert
L.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Murphy
|
David
B.
|
450,000
|
$225,000.00
|
6.58%
|
$14,797.13
|
$0.00
|
|||||
|
Travis
D. and Lisa M.
|
20,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
||||||
|
Joseph
M. Dugan and Jeanene A. Dugan
|
30,000
|
$15,000.00
|
6.58%
|
$986.48
|
$0.00
|
||||||
|
The
Martin Family Trust
|
60,000
|
$30,000.00
|
6.58%
|
$1,972.95
|
$0.00
|
||||||
|
USB
Financial Services CDN FBO Michael Malsh
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Dean
Howard Reese and Dran May Reese, Trustees of The Reese Family Trust dtd.
10/23/2006
|
60,000
|
$30,000.00
|
6.58%
|
$1,972.95
|
$0.00
|
||||||
|
Joseph
M. Dugan and Jeanene A. Dugan
|
150,000
|
$75,000.00
|
6.58%
|
$4,932.38
|
$0.00
|
||||||
|
McHugh
|
Martin
G.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Redoglia-Ashton
Family Trust
|
190,000
|
$95,000.00
|
6.58%
|
$6,247.68
|
$0.00
|
||||||
|
Kirshner
|
Howard
|
200,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
|||||
|
Aurilia
|
Ralph
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Perkins
|
David
A.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Smith
|
Kyle
B.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Delay
|
Tim
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Aurilia
|
Jerry
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Paul
A. Wenhe and Jean L. Marquand
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Thompson
|
Robert
|
200,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
|||||
|
Travis
D. Arends and Lisa M. Arends
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
||||||
|
Dugan
|
Joseph
J.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Dugan
|
James
M.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
LoPiccolo
|
Anne
L.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Dugan
|
Thomas
M.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Dugan
|
Daniel
P.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Dugan
|
Mary
E.
|
10,000
|
$5,000.00
|
6.58%
|
$328.83
|
$0.00
|
|||||
|
Gerald
T. Mohr Defined Benefit Pension Plan
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Winchester
Partners Pension Plan UA Dtd. 5/21/01 FBO K. Monaghan
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Tidwell
II
|
John
W.
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Winchester
Partners
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Jerry
M. Harris and Susan G. Harris JT WROS
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Aden
|
Gary
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Ronald
G. and Coralyn L. Summers, Trustees of The Summers Family Trust dtd.
2/4/86
|
100,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Enstice
Family Trust, E. Thomas Enstice, Trustee, Morgan Stanley
|
2,140,000
|
$1,070,000.00
|
6.58%
|
$70,368.56
|
$0.00
|
||||||
|
Stiska
|
John
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Ernest
Hite and Terry Hite
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Morgan
Stanley & Co., as Custodian FBO Thomas H. Cifaloglio
IRA
|
260,000
|
$130,000.00
|
6.58%
|
$8,549.45
|
$0.00
|
||||||
|
DeClare
Investments Corp.
|
50,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Tidwell
II
|
John
W.
|
25,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Stanziale
|
Bruno
A.
|
50,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Knittig
Family Investments, LLC
|
50,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
||||||
|
Adipietro
|
Joseph
Jeffrey
|
150,000
|
$150,000.00
|
6.58%
|
$9,864.75
|
$0.00
|
|||||
|
Breckinridge
|
James
R.
|
10,000
|
$10,000.00
|
6.58%
|
$657.65
|
$0.00
|
|||||
|
Viola
|
Vincent
J.
|
750,000
|
$750,000.00
|
6.58%
|
$49,323.76
|
$0.00
|
|||||
|
Salomon
|
David
|
250,000
|
$250,000.00
|
6.58%
|
$16,441.25
|
$0.00
|
|||||
|
Crane-Baker
|
James
|
100,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
|||||
|
Murphy
|
David
|
100,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
|||||
|
D
Graham, L.C., a Virginia Limited Liability Company
|
750,000
|
$750,000.00
|
6.58%
|
$49,323.76
|
$0.00
|
||||||
|
EC-One,
Inc.
|
848,176
|
$848,176.00
|
6.58%
|
$55,780.31
|
$0.00
|
||||||
|
Living
Trust of Tom Williams Waterhouse and Mary Maurine Waterhouse, UTD
11/6/89
|
25,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Orlikoff
|
James
E.
|
50,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Morgan
Stanley DW Inc., Custodian FBO George Miller IA 8/14/92
|
200,000
|
$200,000.00
|
6.58%
|
$13,153.00
|
$0.00
|
||||||
|
Slovenski
|
Richard
|
50,000
|
$50,000.00
|
6.58%
|
$3,288.25
|
$0.00
|
|||||
|
Harrison
|
Eric
A.
|
25,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
|||||
|
Nonaka
|
Makoto
|
35,000
|
$35,000.00
|
6.58%
|
$2,301.78
|
$0.00
|
|||||
|
Perry
Family Ltd. Partnership, LLP
|
100,000
|
$100,000.00
|
6.58%
|
$6,576.50
|
$0.00
|
||||||
|
Richard
A. Lewis & Roberta D. Lewis Trust Dtd. 9-1-93
|
25,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Richard
A. Lewis & Roberta D. Lewis Trust Dtd. 9-1-93
|
25,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
Charles
L. Baker Family Trust
|
25,000
|
$25,000.00
|
6.58%
|
$1,644.13
|
$0.00
|
||||||
|
TRISTAFF
SEARCH
|
7,500
|
$7,500.00
|
6.58%
|
$493.24
|
$0.00
|
||||||
|
James
F. McGuirk II Living Trust
|
75,000
|
$75,000.00
|
6.58%
|
$4,932.38
|
$0.00
|
||||||
|
3,059,700
|
2,266,297
|
7,664,571
|
4,170,000
|
3,725,676
|
3,485,800
|
10,598,340.33
|
|||||
|
$697,000.00
|
$0.00
|
||||||||||
|
Total
|
24,372,044
|
||||||||||
|
Cross
Check
|
$697,000.00
|
$0.00
|
|||||||||
EXHIBIT
A
[
], 2008
EXCHANGE
AGENT INSTRUCTIONS
[Exchange
Agent]
Ladies
and Gentlemen:
Pursuant
to that certain Agreement and Plan of Merger (the "Merger Agreement"), dated as of
[____________], 2008, by and among Patriot Scientific Corporation,
a Delaware corporation ("Patriot" or "Buyer"), PTSC ACQUISITION I
CORP., a California corporation and a wholly-owned subsidiary of Patriot
("Subcorp"), Crossflo Systems, Inc., a California corporation ("Crossflo"), Renny
Senn, an individual resident in the State of California, Brian Mooney, an
individual resident in the State of California, and W. C. Mohlenbrock, M.D., an
individual resident in the State of California, (collectively, the "Crossflo Principal"),
Subcorp will be merged with and into Crossflo (the "Merger"). The Merger
Agreement provides, among other things, for the conversion of each share of
Crossflo's issued and outstanding capital stock (collectively, "Crossflo Stock", but
exclusive of Dissenting Shares) into the right to receive (i) cash and (ii) a
number of shares of Patriot common stock ("Patriot Stock").
Except as otherwise defined herein, capitalized terms used herein have the
meanings specified in the Merger Agreement.
Patriot
and Crossflo request, and you have agreed, that you will act as exchange agent
(the "Exchange
Agent") in connection with the Merger, on the terms and conditions set
forth in these Exchange Agent Instructions (this "Agreement"). In
contemplation of your acting as Exchange Agent, the following documents have
been delivered to you by Patriot:
|
A.
|
A
copy of the Merger Agreement;
|
|
B.
|
A
certified copy of the list of shareholders who are holders of record of
Crossflo Stock at the Effective Time (the "Crossflo
Shareholders") including a list of all stop transfers on such stock
as of the same time;
|
|
C.
|
A
letter from [_______________], President and CEO of Crossflo, addressed to
Crossflo Shareholders announcing the effectiveness of the Merger (the
"Crossflo
Letter"); and
|
|
D.
|
A
copy of the letter of transmittal to accompany certificates for Crossflo
Stock when surrendered for exchange and related guidelines for
certification of taxpayer identification number on Substitute Form W-9
(the "Letter of
Transmittal").
|
For
carrying out the duties of Exchange Agent hereunder, you will be entitled to the
compensation set forth on Exhibit A hereto.
A-1
