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PATRIOT SCIENTIFIC CORPORATION
EXHIBIT 10.11.1
Two Year Stock Purchase Warrant dated March 19, 1996 Granted to
Evolve Software, Inc. Providing for the Purchase of
up to 50,000 Common Shares at $2.85
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THIS WARRANT AND THE SHARES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT
OF 1933 ("ACT"), AND THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 OF SUCH ACT.
STOCK PURCHASE WARRANT
RIGHT TO PURCHASE UP TO 50,000 SHARES OF COMMON STOCK
THIS CERTIFIES THAT EVOLVE SOFTWARE, INC. ("Holder") is entitled to purchase, on
or before March 18, 1998 up to fifty thousand (50,000) shares of the common
stock ("Common Stock") of PATRIOT SCIENTIFIC CORPORATION (the "Corporation" or
"Company") upon exercise of this Warrant along with presentation of the full
purchase price, subject to the vesting rules described herein. The purchase
price of the common stock upon exercise of this Warrant ("Warrant Shares") is
equal to the Two Dollars Eighty Five Cents ($2.85) per share (the "Exercise
Price"). This Warrant is granted to Holder for valuable consideration received.
1. Vesting of Warrant. A total of 20,000 warrants shall vest and become
exercisable upon the first order of chips (other than development boards and
prototypes) resulting from Evolve Software, Inc.'s efforts pursuant to the Sales
Contractual Agreement dated March 19, 1996. An additional 10,000 warrants shall
vest and become exercisable for each $333,333 of cumulative product orders
pursuant to the agreement, up to the total of 50,000 warrants. Any warrants not
vested pursuant to these terms shall expire and remain unexercisable through the
term of this agreement.
2. Exercise of Warrant. This Warrant, subject to meeting the vesting in Section
1, may be exercised in whole or in part on any business day on or before the
expiration date listed above by presentation and surrender hereof to the Company
at its principal office of an exercise request and the Exercise Price in lawful
money of the United States of America in the form of a wire transfer or check,
subject to collection, for the number of Warrant Shares specified in the
exercise request. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the balance of the
Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant and an exercise request and representations, together with proper
payment of the Exercise Price, at such office, the Holder shall be deemed to be
the holder of record of the Warrant Shares, notwithstanding that the stock
transfer books of the Company shall then be closed or that certificates
representing such Warrant Shares shall not then be actually delivered to the
Holder. The Company shall pay any and all transfer agent fees, documentary stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of the Warrant Shares.
3. Adjustment of Exercise Price and Number of Shares Deliverable Upon Exercise
of Warrant. The Exercise Price and the number of Shares purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this paragraph.
(a) In case the Corporation shall at any time after the date of this Warrant:
(i) Pay a dividend of its shares of its Common Stock or make a
distribution in shares of its Common Stock with respect to its
outstanding Common Stock;
(ii) Subdivide its outstanding shares of Common Stock;
(iii) Combine its outstanding shares of Common Stock; or
(iv) Issue any other shares of capital stock by reclassification of
its shares of Common Stock;
the Exercise Price in effect at the time of the record date of such dividend,
subdivision, combination, or reclassification shall be proportionately adjusted
so that Holder shall be entitled to receive the aggregate number and kind of
shares which, if this Warrant had been exercised prior to such event, Holder
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination, or reclassification. Such adjustment
shall be made successively whenever any event listed above shall occur.
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(b) In case of any reorganization of the Corporation, or in case of any
reclassification or change of outstanding Common Stock issuable upon exercise of
this Warrant (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
split-up or combination of the Common Stock), or in case of any consolidation or
merger of the Company with or into another entity (other than a consolidation or
merger with a subsidiary or a continuing corporation), or in case of any sale or
conveyance to another entity of all or substantially all of the property of the
Corporation, then, as a condition of such reorganization, reclassification,
change, consolidation, merger, sale, or conveyance, the Corporation or such
successor or purchasing entity, as the case may be, shall forthwith provide to
Holder a supplemental warrant (the "Supplemental Warrant") which will make
lawful and adequate provision whereby Holder shall have the right thereafter to
receive, upon exercise of such Supplemental Warrant, the kind and amount of
shares and other securities and property which would have been received upon
such reorganization, reclassification, change, consolidation, merger, sale, or
conveyance by a holder of a number of shares of Common Stock equal to the number
of Shares issuable upon exercise of this Warrant immediately prior to such
reorganization, reclassification, change, consolidation, merger, sale, or
conveyance. Such Supplemental Warrant shall include provisions for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this paragraph. The above provisions of this paragraph shall
similarly apply to successive reorganizations, reclassifications, and changes of
Common Stock and to successive consolidations, mergers, sales, or conveyances.
4. Representations
Holder has been advised and understands that the Warrants and the Shares
purchasable thereby are characterized as "restricted securities" under the
federal securities laws because they are being acquired from Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Act only in certain limited circumstances.Holder further understands that
the certificates evidencing the Shares will bear the following legend: "These
securities have not been registered under the Securities Act of 1933. They may
not be sold, offered for sale, pledged or hypothecated in the absence of a
registration statement in effect with respect to the securities under such Act
or an opinion of counsel satisfactory to the Company that such registration is
not required or unless sold pursuant to Rule 144 of such Act."
The Holder understands that the Company may place, and may instruct any transfer
agent or depository for the Shares to place, a stop transfer notation in the
securities records in respect of the Shares.
5. Assignment or Loss of Warrant.
(a) The Holder of this Warrant, without obtaining the prior written consent of
the Company, shall not transfer or assign its interest in this Warrant, or any
of the Warrant Shares prior to exercise, in whole or in part to any transferee.
(b) Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft or
destruction) of indemnification satisfactory to the Company, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.
6. Reservation of Shares. The Company hereby agrees that at all times there
shall be reserved for issuance and delivery upon exercise or exchange of this
Warrant all shares of its Common Stock or other shares of capital stock of the
Company from time to time issuable upon exercise or exchange of this Warrant.
All such shares shall be duly authorized and, when issued upon the exercise or
exchange of the Warrant in accordance with the terms hereof, shall be validly
issued, fully paid and nonassessable, free and clear of all liens, security
interests, charges and other encumbrances or restrictions on sale (other than as
provided in the Company's articles of incorporation and any restrictions on sale
set forth herein or pursuant to applicable federal and state securities laws)
and free and clear of all preemptive rights.
7. Arbitration. In the event that a dispute arises between the Corporation and
the holder of this Warrant as to any matter relating to this Warrant, the matter
shall be settled by arbitration in San Diego, California in accordance with the
Rules of the American Arbitration Association and the award rendered by such
arbitrator(s) shall not be subject to appeal and may be entered in any federal
or state court located in Oklahoma having jurisdiction thereof, and actions or
proceedings shall be brought in no other forum or venue.
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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by
its duly authorized officers effective on this 19th day of March 1996.
PATRIOT SCIENTIFIC CORPORATION
BY /s/ ELWOOD G. NORRIS
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Its President
BY /s/ ROBERT PUTNAM
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Its Secretary