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EXHIBIT 4.21
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of September 17, 2001, by and among Patriot Scientific Corporation, a
corporation duly incorporated and existing under the laws of the State of
Delaware (the "Company"), and the investor as named on the signature page hereto
(hereinafter referred to as "Investor").
RECITALS:
WHEREAS, pursuant to the Company's offering ("Offering") of up
to Twenty-Five Million Dollars ($25,000,000) of Common Stock of the Company,
pursuant to that certain Investment Agreement of even date herewith (the
"Investment Agreement") between the Company and the Investor, the Company has
agreed to sell and the Investor has agreed to purchase, from time to time as
provided in the Investment Agreement, shares of the Company's Common Stock for a
maximum aggregate offering amount as described above;
WHEREAS, pursuant to the terms of the Investment Agreement, the
Company has agreed to issue to the Investor the Commitment Warrants to purchase
a number of shares of Common Stock, exercisable for five (5) years from their
respective dates of issuance (the "Warrants"); and
WHEREAS, pursuant to the terms of the Investment Agreement, the
Company has agreed to provide the Investor with certain registration rights with
respect to the Common Stock to be issued in the Offering and the Common Stock
issuable upon exercise of the Warrants as set forth in this Agreement.
TERMS:
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Certain Definitions. As used in this Agreement (including the
Recitals above), the following terms shall have the following meanings (such
meanings to be equally applicable to both singular and plural forms of the terms
defined):
"Additional Registration Statement" shall have the meaning set
forth in Section 3(b).
"Amended Registration Statement" shall have the meaning set
forth in Section 3(b).
"Business Day" shall have the meaning set forth in the
Investment Agreement.
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"Closing Bid Price" shall have the meaning set forth in the
Investment Agreement.
"Commitment Warrant" shall have the meaning as set forth in the
Investment Agreement.
"Common Stock" shall mean the common stock, par value $0.00001,
of the Company.
"Due Date" shall mean the date that is one hundred twenty (120)
days after the date of this Agreement.
"Effective Date" shall have the meaning set forth in Section
2.3.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, together with the rules and regulations promulgated thereunder.
"Filing Deadline" shall mean the date that is forty-five (45)
days after the date of this Agreement.
"Ineffective Period" shall mean any period of time after the
Effective Date during the term hereof that the Registration Statement or any
Supplemental Registration Statement (each as defined herein) becomes ineffective
or unavailable for use for the sale or resale, as applicable, of any or all of
the Registrable Securities (as defined herein) for any reason (or in the event
the prospectus under either of the above is not current and deliverable).
"Ineffective Period Payments" shall have the meaning set forth
in Section 4.
"Investment Agreement" shall have the meaning set forth in the
Recitals hereto.
"Investor" shall have the meaning set forth in the preamble to
this Agreement.
"Holder" shall mean Investor, and any other person or entity
owning or having the right to acquire Registrable Securities or any permitted
assignee.
"Piggyback Registration" and "Piggyback Registration Statement"
shall have the meaning set forth in Section 4.
"Put" shall have the meaning as set forth in the Investment
Agreement.
"Register," "Registered," and "Registration" shall mean and
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act and pursuant
to Rule 415 under the Securities Act or any successor rule, and the declaration
or ordering of effectiveness of such registration statement or document.
"Registrable Securities" shall have the meaning set forth in
Section 2.1.
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"Registration Statement" shall have the meaning set forth in
Section 2.2.
"Rule 144" shall mean Rule 144, as amended, promulgated under
the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.
"Supplemental Registration Statement" shall have the meaning set
forth in Section 3(b).
"Warrants" shall have the meaning set forth in the above
Recitals.
"Warrant Shares" shall mean shares of Common Stock issuable upon
exercise of any Warrant.
2. Required Registration.
2.1 Registrable Securities. "Registrable Securities" shall mean
those shares of the Common Stock of the Company together with any capital stock
issued in replacement of, in exchange for or otherwise in respect of such Common
Stock, that are: (i) issuable or issued to the Investor pursuant to the
Investment Agreement, or (ii) issuable or issued upon exercise of the Commitment
Warrants; provided, however, that notwithstanding the above, the following shall
not be considered Registrable Securities:
(a) any Common Stock which would otherwise be deemed to
be Registrable Securities, if and to the extent that those shares of Common
Stock may be resold in a public transaction without volume limitations or other
material restrictions without registration under the Securities Act, including
without limitation, pursuant to Rule 144 under the Securities Act; and
(b) any shares of Common Stock which have been sold in a
private transaction in which the transferor's rights under this Agreement are
not assigned.
2.2 Filing of Initial Registration Statement. The Company shall,
by the Filing Deadline, file a registration statement ("Registration Statement")
on Form SB-2 (or other suitable form, at the Company's discretion, but subject
to the reasonable approval of Investor), covering the resale of a number of
shares of Common Stock as Registrable Securities equal to at least Fifteen
Million (15,000,000) shares of Common Stock and shall cover, to the extent
allowed by applicable law, such indeterminate number of additional shares of
Common Stock that may be issued or become issuable as Registrable Securities by
the Company pursuant to Rule 416 of the Securities Act. In the event that the
Company has not filed the Registration Statement by the Filing Deadline, then
the Company shall pay to Investor an amount equal to $500, in cash, for each
Business Day after the Filing Deadline until such Registration Statement is
filed, payable within ten (10) Business Days following the end of each calendar
month in which such payments accrue.
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2.3 Response to SEC Comments; Registration Effective Date. The
Company shall use its best efforts to have the Registration Statement declared
effective by the SEC (the date of such effectiveness is referred to herein as
the "Effective Date") by the Due Date. In the event that the SEC has comments to
the Registration Statement, the Company shall file a written response to any
such comments within thirty (30) days of the Company's receipt of such comments
(the "Comment Response Deadline"). In the event that the Company has not filed a
written response to any such SEC comments by the applicable Comment Response
Deadline, then the Company shall pay to Investor an amount equal to $500, in
cash, for each Business Day after the Comment Response Deadline until such
responses are provided to the SEC in writing, payable within ten (10) Business
Days following the end of each calendar month in which such payments accrue.
2.4 Shelf Registration. The Registration Statement shall be
prepared as a "shelf" registration statement under Rule 415, and shall be
maintained effective until all Registrable Securities are resold pursuant to the
Registration Statement.
2.5 Supplemental Registration Statement. Anytime the
Registration Statement does not cover a sufficient number of shares of Common
Stock to cover all outstanding Registrable Securities, the Company shall
promptly prepare and file with the SEC such Supplemental Registration Statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all such Registrable Securities and shall use its best
efforts to cause such Supplemental Registration Statement to be declared
effective as soon as possible.
3. Obligations of the Company. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange Commission
("SEC") a Registration Statement with respect to such Registrable Securities and
use its best efforts to cause such Registration Statement to become effective
and to remain effective until the date that all Registrable Securities are
resold pursuant to such Registration Statement.
(b) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
with such Registration Statement ("Amended Registration Statement") or prepare
and file any additional registration statement ("Additional Registration
Statement," together with the Amended Registration Statement, "Supplemental
Registration Statements") as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
such Supplemental Registration Statements or such prior registration statement
and to cover the resale of all Registrable Securities.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus (if applicable), in conformity
with the requirements of the Securities Act, and such other documents as they
may reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
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(d) Use its best efforts to register and qualify the securities
covered by such Registration Statement under such other securities or Blue Sky
laws of the state of Georgia and of any other state for which a Holder notifies
the Company that it has executed or plans to execute a sale of Registrable
Securities, , provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
(e) [Intentionally Left Blank].
(f) As promptly as practicable after becoming aware of such
event, notify each Holder of Registrable Securities of the happening of any
event of which the Company has knowledge, as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, use its best efforts
promptly to prepare a supplement or amendment to the Registration Statement to
correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Holder as such Holder may reasonably
request.
(g) Provide Holders with notice of the date that a Registration
Statement or any Supplemental Registration Statement registering the resale of
the Registrable Securities is declared effective by the SEC, and the date or
dates when the Registration Statement is no longer effective.
(h) Provide Holders and their representatives the opportunity
and a reasonable amount of time, based upon reasonable notice delivered by the
Company, to conduct a reasonable due diligence inquiry of Company's pertinent
financial and other records and make available its officers and directors for
questions regarding such information as it relates to information contained in
the Registration Statement.
(i) Provide Holders and their representatives the opportunity to
review the Registration Statement and all amendments or supplements thereto
prior to their filing with the SEC by giving the Holder at least ten (10)
business days advance written notice prior to such filing.
(j) Provide each Holder with prompt notice of the issuance by
the SEC or any state securities commission or agency of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceeding for such purpose. The Company shall use its best efforts to
prevent the issuance of any stop order and, if any is issued, to obtain the
removal thereof at the earliest possible date.
(k) Use its best efforts to list the Registrable Securities
covered by the Registration Statement with all securities exchanges or markets
on which the Common Stock is then listed and prepare and file any required
filing with the NASD, American Stock Exchange, NYSE and any other exchange or
market on which the Common Stock is listed.
4. Ineffective Period.
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(a) Ineffective Period Payment. Within five (5) Business Days
after the last day of any Ineffective Period, the Company will pay to the
Investor in cash ("Ineffective Period Payments"), as liquidated damages for such
suspension and not as a penalty, an amount equal to the number of shares of
Common Stock issued to the Investor in any Put with a Pricing Period End Date
(as defined in the Investment Agreement) that is thirty (30) business days or
less prior to the date that the Ineffective Period commences (not to exceed the
number of shares of Common Stock actually held by the Investor when the
Ineffective Period commences), multiplied by the difference of:
(i) the highest closing price of the Company's Common
Stock for any trading day during the Ineffective Period,
minus
(ii) the lowest closing price of the Company's Common
Stock for the five (5) trading days including and immediately
following the last trading day of such Ineffective Period.
(b) Liquidated Damages. The parties hereto acknowledge and agree
that the sums payable as Ineffective Period Payments shall give rise to
liquidated damages and not penalties. The parties further acknowledge that (i)
the amount of loss or damages likely to be incurred by the Holder is incapable
or is difficult to precisely estimate, (ii) the amounts specified bear a
reasonable proportion and are not plainly or grossly disproportionate to the
probable loss likely to be incurred by the Investor, and (iii) the parties are
sophisticated business parties and have been represented by sophisticated and
able legal and financial counsel and negotiated this Agreement at arm's length.
5. Piggyback Registration. If anytime prior to the date that the
Registration Statement is declared effective or during any Ineffective Period
(as defined in the Investment Agreement) the Company proposes to register
(including for this purpose a registration effected by the Company for
shareholders other than the Holders) any of its Common Stock under the
Securities Act in connection with the public offering of such securities solely
for cash (other than a registration relating solely for the sale of securities
to participants in a Company stock plan or a registration on Form S-4
promulgated under the Securities Act or any successor or similar form
registering stock issuable upon a reclassification, upon a business combination
involving an exchange of securities or upon an exchange offer for securities of
the issuer or another entity), the Company shall, at such time, promptly give
each Holder written notice of such registration (a "Piggyback Registration
Statement"). Upon the written request of each Holder given by fax within ten
(10) days after mailing of such notice by the Company, the Company shall cause
to be included in such registration statement under the Securities Act all of
the Registrable Securities that each such Holder has requested to be registered
("Piggyback Registration") and all of the Additional Warrant Shares that are
then unregistered, in each case to the extent such inclusion does not violate
the registration rights of any other security holder of the company granted
prior to the date hereof; provided, however, that nothing herein shall prevent
the Company from withdrawing or abandoning such registration statement prior to
its effectiveness.
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6. Limitation on Obligations to Register under a Piggyback Registration.
In the case of a Piggyback Registration pursuant to an underwritten public
offering by the Company, if the managing underwriter determines and advises in
writing that the inclusion in the related Piggyback Registration Statement of
all Registrable Securities proposed to be included would interfere with the
successful marketing of the securities proposed to be registered by the Company,
then the number of such Registrable Securities to be included in such Piggyback
Registration Statement, to the extent any such Registrable Securities may be
included in such Piggyback Registration Statement, shall be allocated among all
Holders who had requested Piggyback Registration pursuant to the terms hereof,
in the proportion that the number of Registrable Securities which each such
Holder seeks to register bears to the total number of Registrable Securities
sought to be included by all Holders. If required by the managing underwriter of
such an underwritten public offering, the Holders shall enter into an agreement
limiting the number of Registrable Securities to be included in such Piggyback
Registration Statement and the terms, if any, regarding the future sale of such
Registrable Securities.
7. Dispute as to Registrable Securities. In the event the Company
believes that shares sought to be registered under Section 2 or Section 5 by
Holders do not constitute "Registrable Securities" by virtue of Section 2.1 of
this Agreement, and the status of those shares as Registrable Securities is
disputed, the Company shall provide, at its expense, an Opinion of Counsel,
reasonably acceptable to the Holders of the Securities at issue (and
satisfactory to the Company's transfer agent to permit the sale and transfer),
that those securities may be sold immediately, without volume limitation or
other material restrictions, without registration under the Securities Act, by
virtue of Rule 144 or similar provisions.
8. Furnish Information. At the Company's request, each Holder shall
furnish to the Company such information regarding Holder, the Registrable
Securities held by it, and the intended method of disposition of such securities
to the extent required to effect the registration of its Registrable Securities
or to determine that registration is not required pursuant to Rule 144 or other
applicable provision of the Securities Act. The Company shall include all
information provided by such Holder pursuant hereto in the Registration
Statement, substantially in the form supplied, except to the extent such
information is not permitted by law.
9. Expenses. All expenses, other than commissions and fees and expenses
of counsel to the selling Holders, incurred in connection with registrations,
filings or qualifications pursuant hereto, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company, shall be borne by the Company.
10. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers, directors, partners, legal counsel,
and accountants of each Holder, any underwriter (as defined in the Securities
Act, or as deemed by the Securities Exchange Commission, or as indicated in a
registration statement) for such Holder and each person, if any, who controls
such Holder or underwriter
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within the meaning of Section 15 of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements or omissions: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, and the Company will reimburse each
such Holder, officer or director, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
10(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
officer, director, underwriter or controlling person; provided however, that the
above shall not relieve the Company from any other liabilities which it might
otherwise have.
(b) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume, the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the reasonably incurred fees and
expenses of one such counsel to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflicting
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 10, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 10.
(c) To the extent that the foregoing undertaking by the Company
may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which it would be required to make if such foregoing undertaking was
enforceable which is permissible under applicable law.
(d) The obligations of the Company and Holders under this
Section 10 shall survive the resale, if any, of the Common Stock, the completion
of any offering of Registrable Securities in a
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Registration Statement under this Agreement, and otherwise.
11. Reports Under Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company agrees
to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144; and
(b) use its best efforts to file with the SEC in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act.
12. Amendments to Registration Rights. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the written consent of each Holder affected
thereby. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder, each future Holder, and the Company. The
Company will provide the Investor five (5) business days notice prior to filing
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus and shall give the Investor the opportunity to review and comment
on any such amendment or supplement. Failure of the Investor to comment within
five (5) business days shall not preclude the Company from filing such amendment
or supplement after such notice period has expired.
13. Notices. All notices required or permitted under this Agreement
shall be made in writing signed by the party making the same, shall specify the
section under this Agreement pursuant to which it is given, and shall be
addressed if to (i) the Company at: Patriot Scientific Corporation, Attn: Lowell
W. Giffhorn, CFO; 10989 Via Frontera, San Diego, CA 92127; Telephone: (858)
674-5000, Facsimile: (858) 674-5005 (or at such other location as directed by
the Company in writing) and (ii) the Holders at their respective last address as
the party as shown on the records of the Company. Any notice, except as
otherwise provided in this Agreement, shall be made by fax and shall be deemed
given at the time of transmission of the fax.
14. Termination. This Agreement shall terminate on the date all
Registrable Securities cease to exist (as that term is defined in Section 2.1
hereof); but without prejudice to (i) the parties' rights and obligations
arising from breaches of this Agreement occurring prior to such termination (ii)
other indemnification obligations under this Agreement, and provided that the
Company's obligations under Section 10 hereof shall survive such termination.
15. Assignment. No assignment, transfer or delegation, whether by
operation of law or otherwise, of any rights or obligations under this Agreement
by the Company or any Holder, respectively, shall be made without the prior
written consent of the majority in interest of the Holders or the Company,
respectively; provided that the rights of a Holder may be transferred to a
subsequent holder of the Holder's Registrable Securities (provided such
transferee shall provide to the Company, together with or prior to such
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transferee's request to have such Registrable Securities included in a
Registration, a writing executed by such transferee agreeing to be bound as a
Holder by the terms of this Agreement), and the Company hereby agrees to file an
amended registration statement including such transferee as a selling security
holder thereunder; and provided further that the Company may transfer its rights
and obligations under this Agreement to a purchaser of all or a substantial
portion of its business if the obligations of the Company under this Agreement
are assumed in connection with such transfer, either by merger or other
operation of law (which may include without limitation a transaction whereby the
Registrable Securities are converted into securities of the successor in
interest) or by specific assumption executed by the transferee.
16. Arbitration; Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia applicable to
agreements made in and wholly to be performed in that jurisdiction, except for
matters arising under the Act or the Securities Exchange Act of 1934, which
matters shall be construed and interpreted in accordance with such laws. Any
controversy or claim arising out of or related to the Transaction Documents or
the breach thereof, shall be settled by binding arbitration in Atlanta, Georgia
in accordance with the Expedited Procedures (Rules 53-57) of the Commercial
Arbitration Rules of the American Arbitration Association ("AAA"). A proceeding
shall be commenced upon written demand by Company or any Investor to the other.
The arbitrator(s) shall enter a judgment by default against any party, which
fails or refuses to appear in any properly noticed arbitration proceeding. The
proceeding shall be conducted by one (1) arbitrator, unless the amount alleged
to be in dispute exceeds two hundred fifty thousand dollars ($250,000), in which
case three (3) arbitrators shall preside. The arbitrator(s) will be chosen by
the parties from a list provided by the AAA, and if they are unable to agree
within ten (10) days, the AAA shall select the arbitrator(s). The arbitrators
must be experts in securities law and financial transactions. The arbitrators
shall assess costs and expenses of the arbitration, including all attorneys' and
experts' fees, as the arbitrators believe is appropriate in light of the merits
of the parties' respective positions in the issues in dispute. Each party
submits irrevocably to the jurisdiction of any state court sitting in Atlanta,
Georgia or to the United States District Court sitting in Georgia for purposes
of enforcement of any discovery order, judgment or award in connection with such
arbitration. The award of the arbitrator(s) shall be final and binding upon the
parties and may be enforced in any court having jurisdiction. The arbitration
shall be held in such place as set by the arbitrator(s) in accordance with Rule
55.
Although the parties, as expressed above, agree that all claims,
including claims that are equitable in nature, for example specific performance,
shall initially be prosecuted in the binding arbitration procedure outlined
above, if the arbitration panel dismisses or otherwise fails to entertain any or
all of the equitable claims asserted by reason of the fact that it lacks
jurisdiction, power and/or authority to consider such claims and/or direct the
remedy requested, then, in only that event, will the parties have the right to
initiate litigation respecting such equitable claims or remedies. The forum for
such equitable relief shall be in either a state or federal court sitting in
Atlanta, Georgia. Each party waives any right to a trial by jury, assuming such
right exists in an equitable proceeding, and irrevocably submits to the
jurisdiction of said Georgia court. Georgia law shall govern both the proceeding
as well as the interpretation and construction of this Agreement and the
transaction as a whole.
17. Execution in Counterparts Permitted. This Agreement may be executed
in any number of
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counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one (1)
instrument.
18. Specific Performance. The Holder shall be entitled to the remedy of
specific performance in the event of the Company's breach of this Agreement, the
parties agreeing that a remedy at law would be inadequate.
19. Indemnity. Each party shall indemnify each other party against any
and all claims, damages (including reasonable attorney's fees), and expenses
arising out of the first party's breach of any of the terms of this Agreement.
20. Entire Agreement; Written Amendments Required. This Agreement,
including the Exhibits attached hereto, the Investment Agreement, the Common
Stock certificates, and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and thereof, and no party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth herein or therein. Except as expressly provided
herein,
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neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 17th day of September, 2001.
PATRIOT SCIENTIFIC CORPORATION
By: /S/ LOWELL W. GIFFHORN
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Lowell W. Giffhorn, Chief Financial Officer
Address: 10989 Via Frontera
San Diego, CA 92127
Telephone: (858) 674-5000
Facsimile: (858) 674-5005
INVESTOR:
SWARTZ PRIVATE EQUITY, LLC.
By: /S/ ERIC S. SWARTZ
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Eric S. Swartz, Manager
Address: 300 Colonial Center Parkway
Suite 300
Roswell, GA 30076
Telephone: (770) 640-8130
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