Document:

EXHIBIT
        10.40

       

      

       

      

       

      

      MASTER
        AGREEMENT

       

      

       

      by
        and among

       

      

       

      PATRIOT
        SCIENTIFIC CORPORATION

       

      and

       

      TECHNOLOGY
        PROPERTIES LIMITED INC.

       

      and

       

      CHARLES
        H. MOORE

       

      

       

      

       

      Dated
        as of June 7, 2005

       

      

       

      

       

      

       

      

       

      
        	
                ***

              	
                Indicates
                  material omitted pursuant to an application for confidential treatment
                  and
                  that material has been filed separately with the
                  Commission.

              

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      Page

       

      
        
          	
                  ARTICLE
                    I

                	
                  DEFINITIONS

                	
                  3

                
	
                  1.1

                	
                  Definitions

                	
                  3

                
	
                  1.2

                	
                  Index
                    of Other Defined Terms

                	
                  5

                
	 	 	 
	
                  ARTICLE
                    II

                	
                  THE
                    TRANSACTIONS

                	
                  5

                
	
                  2.1

                	
                  Execution
                    of Ancillary Agreements

                	
                  5

                
	
                  2.2

                	
                  Formation
                    of Delaware Limited Liability Companies

                	
                  6

                
	
                  2.3

                	
                  Patriot
                    License to Intel

                	
                  6

                
	
                  2.4

                	
                  Stipulated
                    Final Judgment

                	
                  6

                
	
                  2.5

                	
                  Delivery
                    of Intel Proceeds

                	
                  6

                
	
                  2.6

                	
                  Closing

                	
                  6

                
	
                  2.7

                	
                  Actions
                    at Closing

                	
                  6

                
	 	 	 
	
                  ARTICLE
                    III

                	
                  REPRESENTATIONS
                    AND WARRANTIES OF PATRIOT

                	
                  7

                
	
                  3.1

                	
                  Corporate
                    Existence and Power

                	
                  7

                
	
                  3.2

                	
                  Authorization

                	
                  7

                
	
                  3.3

                	
                  Governmental
                    Authorization

                	
                  7

                
	
                  3.4

                	
                  Non-Contravention

                	
                  7

                
	
                  3.5

                	
                  Absence
                    of Certain Changes or Events.

                	
                  8

                
	
                  3.6

                	
                  Intellectual
                    Property.

                	
                  8

                
	
                  3.7

                	
                  Litigation

                	
                  8

                
	
                  3.8

                	
                  Advisory
                    Fees

                	
                  9

                
	
                  3.9

                	
                  Bulk
                    Sales

                	
                  9

                
	 	 	 
	
                  ARTICLE
                    IV

                	
                  REPRESENTATIONS
                    AND WARRANTIES OF TPL

                	
                  9

                
	
                  4.1

                	
                  Organization
                    and Existence

                	
                  9

                
	
                  4.2

                	
                  Corporate
                    Authorization

                	
                  9

                
	
                  4.3

                	
                  Governmental
                    Authorization

                	
                  9

                
	
                  4.4

                	
                  Non-Contravention

                	
                  9

                
	
                  4.5

                	
                  Absence
                    of Certain Changes or Events.

                	
                  10

                
	
                  4.6

                	
                  Intellectual
                    Property.

                	
                  10

                
	
                  4.7

                	
                  Litigation

                	
                  10

                
	
                  4.8

                	
                  Advisory
                    Fees

                	
                  11

                
	
                  4.9

                	
                  Bulk
                    Sales

                	
                  11

                
	 	 	 
	
                  ARTICLE
                    V 

                	
                  REPRESENTATIONS
                    AND WARRANTIES OF MOORE

                	
                  11

                
	
                  5.1

                	
                  Authorization

                	
                  11

                
	
                  5.2

                	
                  Governmental
                    Authorization

                	
                  11

                
	
                  5.3

                	
                  Non-Contravention

                	
                  11

                
	
                  5.4

                	
                  Absence
                    of Certain Changes or Events.

                	
                  11

                
	
                  5.5

                	
                  Intellectual
                    Property.

                	
                  11

                
	
                  5.6

                	
                  Litigation

                	
                  12

                
	
                  5.7

                	
                  Advisory
                    Fees

                	
                  12

                

        

         

         

        
          
            
            

          

          
            -i-

            
              

            

          

          
            
            

          

        

         

        
          	
                  ARTICLE
                    VI 

                	
                  COVENANTS
                    OF PATRIOT

                	
                  12

                
	
                  6.1

                	
                  Court
                    Approval of Stipulated Final Judgment

                	
                  12

                
	
                  6.2

                	
                  Retention
                    of Rights; No Action With Respect to the MSD Patents

                	
                  12

                
	 	 	 
	
                  ARTICLE
                    VII 

                	
                  COVENANTS
                    OF ALL PARTIES

                	
                  13

                
	
                  7.1

                	
                  Protection
                    and Maintenance of the MSD Patents

                	
                  13

                
	
                  7.2

                	
                  Commercialization
                    Program.

                	
                  13

                
	
                  7.3

                	
                  Further
                    Assurances

                	
                  13

                
	
                  7.4

                	
                  Certain
                    Filings

                	
                  14

                
	
                  7.5

                	
                  Notification

                	
                  14

                
	
                  7.6

                	
                  Public
                    Announcements

                	
                  14

                
	
                  7.7

                	
                  No
                    Interference

                	
                  14

                
	
                  7.8

                	
                  No
                    Transfer

                	
                  15

                
	
                  7.9

                	
                  Litigation
                    Cooperation

                	
                  15

                
	 	 	 
	
                  ARTICLE
                    VIII 

                	
                  CONDITIONS
                    TO CLOSING

                	
                  15

                
	
                  8.1

                	
                  Conditions
                    to Obligations of Each Party

                	
                  15

                
	
                  8.2

                	
                  Conditions
                    to Obligations of TPL

                	
                  16

                
	
                  8.3

                	
                  Conditions
                    to Obligations of Patriot

                	
                  16

                
	 	 	 
	
                  ARTICLE
                    IX 

                	
                  INDEMNIFICATION

                	
                  17

                
	
                  9.1

                	
                  Patriot
                    Agreement to Indemnify

                	
                  17

                
	
                  9.2

                	
                  TPL
                    Agreement to Indemnify

                	
                  17

                
	
                  9.3

                	
                  Moore
                    Agreement to Indemnify

                	
                  18

                
	
                  9.4

                	
                  Survival
                    of Representations, Warranties and Covenants

                	
                  18

                
	
                  9.5

                	
                  Claims
                    for Indemnification

                	
                  18

                
	
                  9.6

                	
                  Defense
                    of Claims

                	
                  18

                
	 	 	 
	
                  ARTICLE
                    X 

                	
                  TERMINATION

                	
                  19

                
	
                  10.1

                	
                  Grounds
                    for Termination

                	
                  19

                
	
                  10.2

                	
                  Effect
                    of Termination.

                	
                  21

                
	 	 	 
	
                  ARTICLE
                    XI 

                	
                  MISCELLANEOUS

                	
                  21

                
	
                  11.1

                	
                  Notices

                	
                  21

                
	
                  11.2

                	
                  Amendments;
                    No Waivers.

                	
                  23

                
	
                  11.3

                	
                  Expenses

                	
                  23

                
	
                  11.4

                	
                  Successors
                    and Assigns

                	
                  23

                
	
                  11.5

                	
                  Governing
                    Law

                	
                  23

                
	
                  11.6

                	
                  Counterparts;
                    Effectiveness

                	
                  23

                
	
                  11.7

                	
                  Entire
                    Agreement

                	
                  23

                
	
                  11.8

                	
                  Captions

                	
                  24

                
	
                  11.9

                	
                  Severability

                	
                  24

                
	
                  11.10

                	
                  Construction

                	
                  24

                
	
                  11.11

                	
                  Cumulative
                    Remedies

                	
                  24

                
	
                  11.12

                	
                  Specific
                    Performance

                	
                  24

                
	
                  11.13

                	
                  Third-Party
                    Beneficiaries

                	
                  24

                
	
                  11.14

                	
                  No
                    Liability of Intel

                	
                  24

                
	
                  11.15

                	
                  No
                    Punitive, Exemplary, or Consequential Damages

                	
                  25

                

        

      

       

       

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      EXHIBITS

       

      EXHIBIT
        A Stipulated
        Final Judgment

      EXHIBIT
        B Operating
        Agreement (Exhibit 10.42) 

      EXHIBIT
        C Newco
        License

      EXHIBIT
        D Commercialization
        Agreement (Exhibit 10.41) ***

      EXHIBIT
        E Escrow
        Agreement ***

      EXHIBIT
        F-1 Consent
        and Release Agreement

      EXHIBIT
        F-2 Consent
        and Release Agreement

      EXHIBIT
        G Form
        of
        Merger Agreement

      EXHIBIT
        H Patriot
        License to Intel ***

      EXHIBIT
        I Form
        of
        Warrant

      EXHIBIT
        J Form
        of
        Registration Rights Agreement

       

      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

       

      AGREEMENT

       

      This
        AGREEMENT (this “Agreement“),
        dated
        as of June 7, 2005, is by and among PATRIOT SCIENTIFIC CORPORATION, a
        Delaware corporation having its principal offices located at 10989 Via Frontera,
        San Diego, CA 92127 (“Patriot”),
        TECHNOLOGY PROPERTIES LIMITED INC., a California corporation having its
        principal offices located at 21730 Stevens Creek Blvd., Suite 201, Cupertino,
        CA
        95014 (“TPL”), and Charles H. Moore, an individual whose principal residence is
        in Sierra County, California (“Moore”).

       

      R
        E C I T A L S

       

      WHEREAS,
        Patriot is engaged in the business of developing, marketing, and selling
        microprocessors and microprocessor technology, as well as other complementary
        products;

       

      WHEREAS,
        TPL is engaged in the business of developing, managing, and commercializing
        intellectual property assets and proprietary product technology;

       

      WHEREAS,
        Patriot, TPL and Moore are involved in the Inventorship Litigation (as defined
        below) with respect to the ownership of rights and interests in certain
        microprocessor science and design patents identified on Schedule 1 attached
        hereto (the “MSD
        Patents”);

       

      WHEREAS,
        Patriot has initiated the Infringement Litigation (as defined below), which
        has
        been stayed pending the outcome of the Inventorship Litigation;

       

      WHEREAS,
        the Patriot security holders identified on Schedule 2 attached hereto (the
        “Patriot
        Rights Holders”)
        have
        certain rights with respect to the transactions contemplated by this
        Agreement;

       

      WHEREAS,
        to resolve the Inventorship Litigation and disagreements among the parties,
        provide funds to Patriot to finance its operations, and provide for the
        effective commercialization of the MSD Patents, the parties have agreed
        that:

       

      A. Patriot,
        TPL and Moore will enter into this Agreement; Patriot and TPL will enter
        into
        the Operating Agreement attached hereto as Exhibit B
        (the
“Operating
        Agreement”);
        Patriot, TPL, and P-Newco will enter into the Commercialization Agreement
        attached hereto as Exhibit D
        (the
“Commercialization
        Agreement”);
        Patriot and TPL will enter into the Warrant substantially in the form attached
        hereto as Exhibit I
        (the
“Warrant”),
        as
        well as the Registration Rights Agreement substantially in the form attached
        hereto as Exhibit J
        (the
“Registration
        Rights Agreement”)
        ; and
        Patriot and TPL will open an escrow account (the “Escrow
        Account”)
        and
        enter into an escrow agreement substantially in the form attached hereto
        as
Exhibit E
        (the
“Escrow
        Agreement”)
        to
        facilitate the transactions contemplated by this Agreement;

       

      B. Patriot
        has entered into a license in respect of the MSD Patents with Intel Corporation
        (“Intel“), attached hereto as Exhibit H
        (the
“Patriot
        License to Intel”);

       

      C. As
        soon
        as possible after the date hereof, Patriot, TPL and Moore will settle all
        litigation among them pursuant to the Stipulated Final Judgment substantially
        in
        the form attached hereto as Exhibit A
        (the
“Stipulated
        Final Judgment”),
        and
        will take any and all action necessary to cause the trade secrets litigation
        currently pending between Patriot and TPL in Santa Clara Superior Court (the
        “Trade
        Secrets Litigation”)
        to be
        dismissed without prejudice, and the Infringement Litigation involving Intel
        and
        Patriot shall be dismissed with prejudice;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      D. As
        soon
        as possible after the date hereof, TPL will request that Intel deliver all
        of
        the unpaid Milestone Payments (as defined in the Intel Patent License Agreement)
        pursuant to Section 3.2
        of the
        Intel Patent License Agreement to the account set forth on Exhibit A
        to the
        Escrow Agreement, and the rights of Patriot and TPL with regard to the Milestone
        Payments shall thereafter be as set forth in the Escrow Agreement;

       

      E. Patriot
        will form a wholly owned subsidiary (“P-Newco”),
        and
        Patriot and P-Newco will enter into a license with respect to certain of
        Patriot’s rights in the MSD Patents, substantially in the form attached hereto
        as Exhibit C;

       

      F. TPL
        will
        form a wholly owned subsidiary (“T-Newco”),
        and
        TPL and T-Newco will enter into a license with respect to certain of TPL’s
        rights in the MSD Patents, substantially in the form attached hereto as
Exhibit C
        (collectively with the license entered into between Patriot and P-Newco
        identified in Recital E
        above,
        the “Newco
        Licenses”
        );

       

      G. Patriot,
        TPL, T-Newco and P-Newco will enter into an agreement and plan of merger
        substantially in the form attached hereto as Exhibit G
        (the
“Merger
        Agreement”)
        pursuant to which T-Newco will merge with and into P-Newco, with P-Newco
        continuing as the surviving entity;

       

      H. Upon
        the
        earlier of (a) the mutual agreement of Patriot, TPL, and P-Newco, or (b)
        three
        months from the date hereof, P-Newco will grant to TPL its rights in the
        MSD
        Patents (the “Grant”)
        in
        furtherance of the commercialization program contemplated by the
        Commercialization Agreement, in the form attached as Exhibit 1
        to the
        Commercialization Agreement;

       

      I. TPL
        will
        cause the Patriot Cash Consideration (as defined below) to be paid to Patriot
        at
        Closing from the funds in the Escrow Account pursuant to the terms of the
        Escrow
        Agreement;

       

      J. TPL
        will
        cause One Million Dollars ($1,000,000) of TPL’s funds in the Escrow Account, and
        Patriot will cause at least One Million Dollars ($1,000,000) of Patriot’s funds
        in the Escrow Account, to be paid in cash at Closing, to the Patriot Rights
        Holders in exchange for the Patriot Rights Holders entering into a consent
        and
        release agreement substantially in one of the alternate forms attached as
        Exhibits F-1
        or
F-2
        hereto
        (the “Consent
        and Release Agreement”);

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      K. TPL
        will
        cause Two Million Dollars ($2,000,000) of TPL’s funds in the Escrow Account to
        be contributed in cash at Closing to P-Newco as TPL’s first installment of the
        Working Capital Contribution;

       

      L. Patriot
        will cause Two Million Dollars ($2,000,000) of Patriot’s funds in the Escrow
        Account to be contributed in cash at Closing to P-Newco as Patriot’s first
        installment of the Working Capital Contribution; and

       

      M. P-Newco
        will allocate the proceeds generated from the commercialization program to
        Patriot and TPL pursuant to the terms of the Commercialization Agreement
        and the
        Operating Agreement.

       

      A
        G R E E M E N T

       

      NOW,
        THEREFORE, in consideration of the foregoing premises, and their respective
        representations, warranties, covenants and agreements hereinafter set forth,
        the
        parties hereto agree as follows.

       

      ARTICLE
        I

      DEFINITIONS

       

      1.1 Definitions.
        The
        following terms, as used herein, have the following meanings:

       

      “Applicable
        Law”
        means
        any domestic or foreign, federal, state or local statute, law, common law,
        ordinance, rule, administrative interpretation, regulation, order, writ,
        injunction, directive, judgment, decree, permit or other requirement of any
        Governmental Authority.

       

      “Business
        Day”
        means a
        day other than a Saturday, Sunday or other day on which commercial banks
        in San
        Diego, California are authorized or required by law to close.

       

      “Damages”
        means
        all demands, claims, actions or causes of action, assessments, losses (including
        reasonably foreseeable lost profits), damages, costs, expenses, liabilities,
        judgments, awards, fines, sanctions, penalties, charges and amounts paid
        in
        settlement (net of insurance proceeds and proceeds from related third party
        indemnification, contribution or similar claims actually received), including
        (a) interest at a rate equal to 200 basis points above the prime rate, as
        in effect from time to time, of Citibank, N.A., on cash disbursements in
        respect
        of any of the foregoing, compounded quarterly, from the date each such cash
        disbursement is made until the Person incurring the same shall have been
        indemnified in respect thereof, (b) reasonable costs, fees and expenses of
        such Person’s Representatives and (c) any reasonable costs, fees and expenses
        incurred in connection with investigating, defending against, or settling
        any
        such claims.

       

      “Exchange
        Act”
        means
        the Securities Exchange Act of 1934, as amended.

       

      “Governmental
        Authority”
        means
        any foreign, domestic, federal, territorial, state or local governmental
        authority, quasi-governmental authority, instrumentality, court, government
        or
        self-regulatory organization, commission, tribunal or organization or any
        regulatory, administrative or other agency, or any political or other
        subdivision, department or branch of any of the foregoing.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Gross
        Cash Proceeds”
        means
        all cash proceeds received pursuant to licenses, judgments, settlements and
        other payments with respect to the right to make, use, sell and offer to
        sell
        products subject to the MSD Patents.

       

      “Indemnifying
        Party”
        means:
        (a) with respect to any TPL Indemnitee asserting a claim under Section 9.1,
        Patriot; (b) with respect to any Patriot Indemnitee asserting a claim under
Section 9.2,
        TPL;
        and (c) with respect to any Patriot/TPL Indemnitee asserting a claim under
Section 9.3,
        Moore.

       

      “Indemnitee”
        means:
        (a) the TPL Indemnitees with respect to any claim for which Patriot is an
        Indemnifying Party under Section 9.1;
        (b) the
        Patriot Indemnitees with respect to claims for which TPL is an Indemnifying
        Party under Section 9.2;
        and (c)
        the Patriot/TPL Indemnitees with respect to any claim for which Moore is
        an
        Indemnifying Party under Section 9.3.

       

      “Infringement
        Litigation”
        means
        the lawsuits filed by Patriot against five electronics companies alleging
        infringement of certain U.S. Patents and assigned the following case numbers:
        (a) Southern District of New York, 03CV10142; (b) Northern District of
        California, C035787; (c) Southern District of New York, 03CV10180; (d) Eastern
        District of New York, CV036432; and (e) District of New Jersey, 03CV06210,
        including the related claims of Intel against Patriot.

       

      “Intel
        Patent License Agreement”
        means
        that certain license agreement by and among TPL Micro Ltd., TPL, Moore and
        Intel, dated June 28, 2004, as may be amended from time to time.

       

      “Inventorship
        Litigation”
        means
        the lawsuit filed by Patriot on February 13, 2004 in the United States District
        Court, Northern District of California against TPL, Daniel E. Leckrone and
        Charles H. Moore, alleging claims for declaratory judgment for determination
        and
        correction of inventorship and assigned case number C040618JF(HRL).

       

      “knowledge”
        means
        the actual knowledge of a Person and its Representatives, after a reasonable
        investigation of the surrounding circumstances.

       

      “Liability”
        means,
        with respect to any Person, any liability or obligation of such Person of
        any
        kind, character or description, whether known or unknown, absolute or
        contingent, accrued or unaccrued, liquidated or unliquidated, secured or
        unsecured, joint or several, due or to become due, vested or unvested,
        executory, determined, determinable or otherwise and whether or not the same
        is
        required to be accrued on the financial statements of such Person or is
        disclosed on any schedule to this Agreement.

       

      “Lien”
        means,
        with respect to any asset, any mortgage, title defect or objection, lien,
        pledge, charge, security interest, hypothecation, restriction, encumbrance
        or
        charge of any kind in respect of such asset.

       

      “Material
        Adverse Effect”
        means
        any circumstance, development, event, condition, effect or change that,
        individually or when taken together with all other circumstances, developments,
        events, conditions, effects and changes that have occurred, had or has or,
        with
        the passage of time, would be reasonably likely to have, a material adverse
        effect on, or a material adverse change in, (a) the MSD Patents, (b) the
        anticipated benefits of the transactions contemplated

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      by
        this
        Agreement or (c) the ability of the parties hereto to consummate the
        transactions contemplated hereby.

       

      “Net
        Cash Proceeds”
        has the
        meaning set forth in Section 6.1(a)(v)
        of the
        Operating Agreement.

       

      “Patriot
        Cash Consideration”
        means
        Ten Million Dollars ($10,000,000) minus Two Million Dollars ($2,000,000)
        (which
        amount constitutes Patriot’s first installment of the Working Capital
        Contribution pursuant to Section 5.3(a)
        of the
        Operating Agreement) minus Patriot’s share of the Consent and Release
        Consideration, which represents an allocation and sharing of proceeds to
        be
        received from Intel pursuant to Section 3.2(c)
        of the
        Intel Patent License Agreement.

       

      “Patriot
        Common Stock”
        means
        the common stock, par value $0.00001 per share, of Patriot.

       

      “Person”
        means an
        individual, corporation, partnership, limited liability company, joint venture,
        association, trust, estate or other entity or organization, including a
        Governmental Authority.

       

      “Representatives”
        means
        the officers, directors, employees, attorneys, accountants, advisors,
        representatives and agents of a Person.

       

      “SEC”
        means
        the Securities and Exchange Commission.

       

      “Securities
        Act”
        means
        the Securities Act of 1933, as amended.

       

      “Working
        Capital Contribution”
        shall
        have the meaning given to it in the Operating Agreement.

       

      1.2 Index
        of Other Defined Terms.
        In
        addition to those terms defined above, the following terms shall have the
        respective meanings given thereto in the sections indicated below:

      
         

        
          	Defined
                  Term Section	
                  Page

                
	
                  ”Agreement”
                    Preamble,

                	
                  3

                
	
                  ”Closing
                    Date” 2.6, 

                	
                  9

                
	
                  ”Closing”
                    2.6, 

                	
                  8

                
	
                  ”Commercialization
                    Agreement” Recitals,

                	
                  3

                
	
                  ”Consent
                    and Release Agreement” Recitals 

                	
                  4

                
	
                  ”Consent
                    and Release Consideration” 2.7(f)

                	
                  9

                
	
                  ”Escrow
                    Account” Recitals, 

                	
                  3

                
	
                  ”Escrow
                    Agreement” Recitals, 

                	
                  3

                
	
                  ”Grant”
                    Recitals, 

                	
                  4

                
	
                  ”Intel
                    Parties” 11.13, 

                	
                  27

                
	
                  ”Intel”
                    Recitals, 

                	
                  4

                
	
                  ”Merger
                    Agreement” Recitals, 

                	
                  4

                
	
                  ”Moore”
                    Preamble, 

                	
                  3

                
	
                  ”MSD
                    Patents” Recitals, 

                	
                  3

                
	
                  ”Newco
                    Licenses” Recitals, 

                	
                  4

                
	
                  ”Operating
                    Agreement” Recitals, 

                	
                  3

                
	
                  ”Patriot
                    Indemnitees” 9.2, 

                	
                  20

                
	
                  ”Patriot
                    License to Intel” Recitals, 

                	
                  4

                
	
                  ”Patriot
                    Rights Holders” Recitals, 

                	
                  3

                
	
                  ”Patriot/TPL
                    Indemnitees” 9.3, 

                	
                  20

                
	
                  ”Patriot”
                    Preamble, 

                	
                  3

                
	
                  ”P-Newco”
                    Recitals, 

                	
                  4

                
	
                  ”Proceedings”
                    3.7, 

                	
                  11

                
	
                  ”Registration
                    Rights Agreement” Recitals, 

                	
                  3

                
	
                  ”Stipulated
                    Final Judgment” Recitals, 

                	
                  4

                
	
                  ”Termination
                    Date” 10.1, 

                	
                  22

                
	
                  ”T-Newco”
                    Recitals, 

                	
                  4

                
	
                  ”TPL
                    Indemnitees” 9.1, 

                	
                  19

                
	
                  ”TPL”
                    Preamble, 

                	
                  3

                
	
                  ”Trade
                    Secrets Litigation” Recitals, 

                	
                  4

                
	
                  ”Warrant”
                    Recitals, 3

                	 

        

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ARTICLE
        II

      THE
        TRANSACTIONS

       

      2.1 Execution
        of Ancillary Agreements.
        As soon
        as possible after the date hereof, and in any event not later than the Closing
        Date, Patriot, TPL, Moore and P-Newco shall enter into the following agreements,
        as the case may be:

       

      (a) Patriot
        and TPL shall enter into the Operating Agreement;

       

      (b) Patriot,
        TPL and P-Newco shall enter into the Commercialization Agreement;

       

      (c) Patriot
        and TPL shall enter into the Warrant and the Registration Rights
        Agreement;

       

      (d) Patriot,
        TPL and Premier Trust, Inc. as the Escrow Agent shall enter into the Escrow
        Agreement to facilitate the transactions contemplated hereby.

       

      2.2 Formation
        of Delaware Limited Liability Companies.
        As soon
        as possible, and to effect the transactions contemplated hereby:

       

      (a) Patriot
        will form P-Newco, a wholly owned Delaware limited liability company,
        and

       

      (b) TPL
        will
        form T-Newco, a wholly owned Delaware limited liability company.

       

      2.3 Patriot
        License to Intel.
        Patriot
        has entered into the Patriot License to Intel.

       

      2.4 Stipulated
        Final Judgment.
        As soon
        as possible after the date hereof, Patriot, TPL and Moore shall enter into
        the
        Stipulated Final Judgment and file it promptly thereafter with the
        court.

       

      2.5 Delivery
        of Intel Proceeds.
        As soon
        as possible after the date hereof, TPL shall request that Intel deliver all
        of
        the unpaid Milestone Payments (as defined in the Intel Patent License Agreement)
        pursuant to Section
        3.2
        of the
        Intel Patent License Agreement to the account set forth on Exhibit A to the
        Escrow Agreement, and the rights of Patriot and TPL with regard to the Milestone
        Payments shall thereafter be as set forth in the Escrow Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      2.6 Closing.
        The
        closing (the “Closing”)
        of the
        transactions contemplated by this Agreement shall take place at the offices
        of
        Gibson, Dunn & Crutcher LLP, 333 South Grand Avenue, Los Angeles,
        California 90071, on June 14, 2005 or, if the conditions to Closing set
        forth in Article VIII
        (other
        than conditions that by their terms can only be satisfied on the Closing
        Date)
        have not been satisfied or waived by such date, then on the second Business
        Day
        after the last of the conditions to Closing set forth in Article VIII
        (other
        than conditions that by their terms can only be satisfied on the Closing
        Date)
        have been satisfied or waived by the party entitled to waive the same or
        on any
        such other date as to which TPL and Patriot may mutually agree in writing
        (the
“Closing
        Date”).

       

      2.7 Actions
        at Closing.
        At
        Closing:

       

      (a) Each
        of
        Patriot and TPL shall deliver to the other party executed copies of this
        Agreement, the Escrow Agreement, the Operating Agreement, the Commercialization
        Agreement, the Newco Licenses, the Merger Agreement, and the Grant attached
        as
Exhibit 1
        to the
        Commercialization Agreement;

       

      (b) The
        Certificate of Merger shall be filed with the Secretary of State of the State
        of
        Delaware;

       

      (c) The
        officer’s certificates contemplated by Sections 8.2(a)(iii)
        and
8.3(a)(iii)
        shall be
        delivered by Patriot and TPL, respectively;

       

      (d) Patriot
        shall deliver to TPL the Consent and Release Agreements executed by all of
        the
        Patriot Rights Holders;

       

      (e) TPL
        will
        cause One Million Dollars ($1,000,000) of TPL’s funds in the Escrow Account, and
        Patriot will cause at least One Million Dollars ($1,000,000) of Patriot’s funds
        in the Escrow Account, to be paid in cash at Closing to the Patriot Rights
        Holders set forth on Schedule 2 pursuant to the terms of the Escrow
        Agreement (the “Consent and Release Consideration”);

       

      (f) TPL
        will
        cause Two Million Dollars ($2,000,000) of TPL’s funds in the Escrow Account to
        be contributed in cash at Closing to P-Newco as TPL’s first installment of the
        Working Capital Contribution;

       

      (g) Patriot
        will cause Two Million Dollars ($2,000,000) of Patriot’s funds in the Escrow
        Account to be contributed in cash at Closing to P-Newco as Patriot’s first
        installment of the Working Capital Contribution; and

       

      (h) TPL
        shall
        cause all Net Cash Proceeds generated pursuant to Section 7.2(b),
        if any,
        to be paid to P-Newco.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        III

      REPRESENTATIONS
        AND WARRANTIES OF PATRIOT

       

      As
        an
        inducement to TPL to enter into this Agreement and to consummate the
        transactions contemplated herein, Patriot hereby represents and warrants
        to TPL
        that:

       

      3.1 Corporate
        Existence and Power.
        Patriot
        is a corporation duly organized, validly existing and in good standing under
        the
        laws of the State of Delaware and has all corporate power to enter into this
        Agreement and consummate the transactions contemplated hereby.

       

      3.2 Authorization.
        The
        execution, delivery and performance by Patriot of this Agreement and the
        consummation by Patriot of the transactions contemplated hereby are within
        the
        corporate powers of Patriot and have been duly authorized by all necessary
        corporate action on the part of Patriot. This Agreement has been duly and
        validly executed by Patriot and constitutes the legal, valid and binding
        agreement of Patriot, enforceable against Patriot in accordance with its
        terms,
        except as may be limited by applicable bankruptcy, insolvency, reorganization,
        moratorium or similar laws affecting creditors’ rights generally and subject to
        general principles of equity.

       

      3.3 Governmental
        Authorization.
        The
        execution, delivery and performance by Patriot of this Agreement require
        no
        action by, consent or approval of, or filing with, any Governmental Authority
        other than any actions, consents, approvals or filings otherwise expressly
        referred to in this Agreement.

       

      3.4 Non-Contravention.
        The
        execution, delivery and performance by Patriot of this Agreement does not
        (a) contravene or conflict with the certificate of incorporation or bylaws
        of Patriot, a true and correct copy of each of which has been delivered to
        TPL;
        (b) contravene or constitute a default or breach under any material
        agreement to which Patriot is a party; (c) contravene or conflict with or
        constitute a violation of any provision of any Applicable Law binding upon
        or
        applicable to Patriot; or (d) result in the creation or imposition of any
        Lien on the MSD Patents.

       

      3.5 Absence
        of Certain Changes or Events.

       

      (a) Except
        as
        set forth on Schedule 3.5(a),
        as of
        the date hereof there has not been any change, circumstance, event or
        proceedings against Patriot that could reasonably be expected to result in
        a
        Material Adverse Effect.

       

      (b) Except
        as
        set forth on Schedule 3.5(b),
        and
        except as otherwise contemplated by or disclosed in this Agreement, Patriot
        has
        not entered into any contract or agreement in respect of the MSD
        Patents.

       

      3.6 Intellectual
        Property.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (a) Except
        as
        set forth on Schedule 3.6(a),
        Patriot
        owns exclusively all right, title and interest in and to the MSD Patents,
        free
        and clear of any and all Liens, encumbrances or other adverse ownership claims,
        and Patriot has not received any notice or claim challenging Patriot’s ownership
        of the MSD Patents or suggesting that any Person, other than TPL and Moore,
        has
        any claim of legal or beneficial ownership with respect thereto, nor, to
        Patriot’s knowledge, is there a reasonable basis for any claim that Patriot does
        not have such good and valid title to the MSD Patents.

       

      (b) To
        the
        knowledge of Patriot, the MSD Patents are valid, enforceable and subsisting.
        Except as disclosed in Schedule 3.6(b),
        Patriot
        has not received any notice or claim challenging or questioning the validity
        or
        enforceability of the MSD Patents or indicating an intention on the part
        of any
        Person to bring a claim that the MSD Patents are invalid or unenforceable
        or
        have been misused, and to Patriot’s knowledge no reasonable basis exists for any
        such claim.

       

      (c) To
        the
        knowledge of Patriot (i) Patriot has not taken any action or failed to take
        any
        action (including the manner in which it has conducted its business, or used
        or
        enforced, or failed to use or enforce, the MSD Patents) that would result
        in the
        abandonment, cancellation, forfeiture, relinquishment, invalidation or
        unenforceability of the MSD Patents and (ii) subsequent to the acquisition
        of
        its interest therein, Patriot has timely paid all filing, examination, issuance,
        post registration and maintenance fees, annuities and the like associated
        with
        or required with respect to the MSD Patents.

       

      (d) To
        the
        knowledge of Patriot, none of the activities or operations of Patriot with
        respect to the MSD Patents infringes upon, misappropriates, violates, dilutes
        or
        constitutes the unauthorized use of any rights, interests, or property of
        any
        third party. Patriot has not received any notice or claim asserting or
        suggesting that any such infringement, misappropriation, violation, dilution
        or
        unauthorized use is or may be occurring or has or may have occurred, nor,
        to
        Patriot’s knowledge, is there any reasonable basis therefor. The MSD Patents are
        not subject to any outstanding order, judgment, decree or stipulation
        restricting the use, sale, transfer, assignment or licensing thereof by Patriot
        to any Person.

       

      3.7 Litigation.
        Except
        as disclosed in Schedule 3.7
        (i) there
        are no actions, suits, claims, hearings, arbitrations, proceedings (public
        or
        private) or governmental investigations that have been brought by or against
        any
        Governmental Authority or any other Person (collectively, “Proceedings”)
        pending or, to the knowledge of Patriot, threatened, against or by Patriot
        or
        the MSD Patents or which seek to enjoin or rescind the transactions contemplated
        by this Agreement, nor, to the knowledge of Patriot, is there any valid basis
        for any such Proceedings; and (ii) there are no existing orders, judgments
        or decrees of any Governmental Authority naming Patriot as an affected party
        or
        otherwise affecting the MSD Patents or the performance by Patriot of the
        transactions contemplated by this Agreement, nor, to the knowledge of Patriot,
        is there any valid basis for any such order, judgment or decree.

       

      3.8 Advisory
        Fees.
        Except
        as set forth in Schedule 3.8,
        there
        is no investment banker, broker, finder or other intermediary or advisor
        that
        has been retained by or is authorized to act on behalf of Patriot who is
        entitled to any fee, commission or reimbursement of expenses from Patriot,
        TPL
        or any of their respective Representatives upon consummation of the transactions
        contemplated by this Agreement or otherwise.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.9 Bulk
        Sales.
        There
        are no bulk sales statutes or laws applicable to Patriot or the MSD Patents
        in
        connection with the consummation of the transactions contemplated by this
        Agreement.

       

      ARTICLE
        IV

      REPRESENTATIONS
        AND WARRANTIES OF TPL

       

      As
        an
        inducement to Patriot to enter into this Agreement and to consummate the
        transactions contemplated herein, TPL hereby represents and warrants to Patriot
        that:

       

      4.1 Organization
        and Existence.
        TPL is
        a corporation duly incorporated, validly existing and in good standing under
        the
        laws of the State of California and has all corporate power to enter into
        this
        Agreement and consummate the transactions contemplated hereby.

       

      4.2 Corporate
        Authorization.
        The
        execution, delivery and performance by TPL of this Agreement and the
        consummation by TPL of the transactions contemplated hereby are within the
        corporate powers of TPL and have been duly authorized by all necessary corporate
        action on the part of TPL. This Agreement has been duly and validly executed
        by
        TPL and constitutes the legal, valid and binding agreement of TPL, enforceable
        in accordance with its terms, except as may be limited by applicable bankruptcy,
        insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally and subject to general principles of equity.

       

      4.3 Governmental
        Authorization.
        The
        execution, delivery and performance by TPL of this Agreement require no action
        by, consent or approval of, or filing with, any Governmental Authority other
        than any actions, consents, approvals or filings otherwise expressly referred
        to
        in this Agreement.

       

      4.4 Non-Contravention.
        The
        execution, delivery and performance by TPL of this Agreement does not
        (a) contravene or conflict with the certificate of incorporation or bylaws
        of TPL, a true and correct copy of each of which has been delivered to Patriot;
        (b) contravene or constitute a default or breach under any material
        agreement to which TPL is a party; (c) contravene or conflict with or
        constitute a violation of any provision of any Applicable Law binding upon
        or
        applicable to TPL; or (d) result in the creation or imposition of any Lien
        on the MSD Patents.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.5 Absence
        of Certain Changes or Events.

       

      (a) Except
        as
        set forth on Schedule 4.5(a),
        as of
        the date hereof there has not been any change, circumstance, event or
        proceedings against TPL that could reasonably be expected to result in a
        Material Adverse Effect.

       

      (b) Except
        as
        set forth on Schedule 4.5(b),
        and
        except as otherwise contemplated by or disclosed in this Agreement, TPL has
        not
        entered into any contract or agreement in respect of the MSD
        Patents.

       

      4.6 Intellectual
        Property.

       

      (a) TPL
        has a
        valid and subsisting license to the MSD Patents from Moore. Except as disclosed
        on Schedule 4.6(a),
        TPL has
        not received any notice or claim challenging TPL’s rights with respect to the
        MSD Patents or suggesting that any Person, other than Patriot and Moore,
        has any
        claim of legal or beneficial ownership with respect thereto, nor, to TPL’s
        knowledge, is there a reasonable basis for any such claim.

       

      (b) To
        the
        knowledge of TPL, the MSD Patents are valid, enforceable and subsisting.
        Except
        as disclosed on Schedule 4.6(b),
        TPL has
        not received any notice or claim challenging or questioning the validity
        or
        enforceability of the MSD Patents or indicating an intention on the part
        of any
        Person to bring a claim that the MSD Patents are invalid or unenforceable
        or
        have been misused, and to TPL’s knowledge no reasonable basis exists for any
        such claim.

       

      (c) To
        the
        knowledge of TPL, TPL has not taken any action or failed to take any action
        (including the manner in which it has conducted its business, or used or
        enforced, or failed to use or enforce, the MSD Patents) that would result
        in the
        abandonment, cancellation, forfeiture, relinquishment, invalidation or
        unenforceability of the MSD Patents.

       

      (d) To
        the
        knowledge of TPL, none of the activities or operations of TPL with respect
        to
        the MSD Patents infringes upon, misappropriates, violates, dilutes or
        constitutes the unauthorized use of any rights, interests, or property of
        any
        third party. TPL has not received any notice or claim asserting or suggesting
        that any such infringement, misappropriation, violation, dilution or
        unauthorized use is or may be occurring or has or may have occurred, nor,
        to
        TPL’s knowledge, is there any reasonable basis therefor. To the knowledge of
        TPL, the MSD Patents are not subject to any outstanding order, judgment,
        decree
        or stipulation restricting the use, sale, transfer, assignment or licensing
        thereof by TPL to any Person.

       

      4.7 Litigation.
        Except
        as disclosed on Schedule 4.7
        (i) there
        are no Proceedings pending or, to the knowledge of TPL, threatened, against
        or
        by TPL or the MSD Patents or which seek to enjoin or rescind the transactions
        contemplated by this Agreement, nor, to the knowledge of TPL, is there any
        valid
        basis for any such Proceedings; and (ii) there are no existing orders,
        judgments or decrees of any Governmental Authority naming TPL as an affected
        party or otherwise affecting the MSD Patents or the performance by TPL of
        the
        transactions contemplated by this Agreement, nor, to the knowledge of TPL,
        is
        there any valid basis for any such order, judgment or decree.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.8 Advisory
        Fees.
        Except
        as set forth on Schedule 4.8,
        there
        is no investment banker, broker, finder or other intermediary or advisor
        that
        has been retained by or is authorized to act on behalf of TPL who is entitled
        to
        any fee, commission or reimbursement of expenses from TPL, Patriot or any
        of
        their respective Representatives upon consummation of the transactions
        contemplated by this Agreement or otherwise.

       

      4.9 Bulk
        Sales.
        There
        are no bulk sales statutes or laws applicable to TPL or the MSD Patents in
        connection with the consummation of the transactions contemplated by this
        Agreement.

       

      ARTICLE
        V

      REPRESENTATIONS
        AND WARRANTIES OF MOORE

       

      5.1 Authorization.
        This
        Agreement has been duly and validly executed by Moore and constitutes the
        legal,
        valid and binding agreement of Moore, enforceable against Moore in accordance
        with its terms, except as may be limited by applicable bankruptcy, insolvency,
        reorganization, moratorium or similar laws affecting creditors’ rights generally
        and subject to general principles of equity.

       

      5.2 Governmental
        Authorization.
        The
        execution, delivery and performance by Moore of this Agreement require no
        action
        by, consent or approval of, or filing with, any Governmental Authority other
        than any actions, consents, approvals or filings otherwise expressly referred
        to
        in this Agreement.

       

      5.3 Non-Contravention.
        The
        execution, delivery and performance by Moore of this Agreement does not:
        (a) contravene or constitute a default or breach under any material
        agreement to which Moore is a party; (b) contravene or conflict with or
        constitute a violation of any provision of any Applicable Law binding upon
        or
        applicable to Moore; or (c) result in the creation or imposition of any
        Lien on the MSD Patents.

       

      5.4 Absence
        of Certain Changes or Events.

       

      (a) Except
        as
        set forth on Schedule 5.4(a),
        as of
        the date hereof there has not been any change, circumstance, event or
        proceedings against Moore that could reasonably be expected to result in
        a
        Material Adverse Effect.

       

      (b) Except
        as
        set forth on Schedule 5.4(b),
        and
        except as otherwise contemplated by or disclosed in this Agreement, Moore
        has
        not entered into any contract or agreement in respect of the MSD
        Patents.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.5 Intellectual
        Property.

       

      (a) Except
        as
        set forth on Schedule 5.5(a),
        Moore
        owns exclusively all right, title and interest in and to the MSD Patents,
        free
        and clear of any and all Liens, encumbrances or other adverse ownership claims,
        and Moore has not received any notice or claim challenging Moore’s ownership of
        the MSD Patents or suggesting that any Person, other than TPL and Moore,
        has any
        claim of legal or beneficial ownership with respect thereto, nor, to Moore’s
        knowledge, is there a reasonable basis for any claim that Moore does not
        have
        such good and valid title to the MSD Patents.

       

      (b) To
        the
        knowledge of Moore, the MSD Patents are valid, enforceable and subsisting.
        Except as disclosed on Schedule 5.5(b),
        Moore
        has not received any notice or claim challenging or questioning the validity
        or
        enforceability of the MSD Patents or indicating an intention on the part
        of any
        Person to bring a claim that the MSD Patents are invalid or unenforceable
        or
        have been misused, and to Moore’s knowledge no reasonable basis exists for any
        such claim.

       

      (c) To
        the
        knowledge of Moore (i) Moore has not taken any action or failed to take any
        action (including the manner in which it has conducted his business, or used
        or
        enforced, or failed to use or enforce, the MSD Patents) that would result
        in the
        abandonment, cancellation, forfeiture, relinquishment, invalidation or
        unenforceability of the MSD Patents and (ii) Moore has timely paid all filing,
        examination, issuance, post registration and maintenance fees, annuities
        and the
        like associated with or required with respect to the MSD Patents.

       

      (d) To
        the
        knowledge of Moore, none of the activities or operations of Moore with respect
        to the MSD Patents infringes upon, misappropriates, violates, dilutes or
        constitutes the unauthorized use of any rights, interests, or property of
        any
        third party. Moore has not received any notice or claim asserting or suggesting
        that any such infringement, misappropriation, violation, dilution or
        unauthorized use is or may be occurring or has or may have occurred, nor,
        to
        Moore’s knowledge, is there any reasonable basis therefor. The MSD Patents are
        not subject to any outstanding order, judgment, decree or stipulation
        restricting the use, sale, transfer, assignment or licensing thereof by Moore
        to
        any Person.

       

      5.6 Litigation.
        Except
        as disclosed on Schedule 5.6
        (i) there
        are no Proceedings pending or, to the knowledge of Moore, threatened, against
        or
        by Moore or the MSD Patents or which seek to enjoin or rescind the transactions
        contemplated by this Agreement, nor, to the knowledge of Moore, is there
        any
        valid basis for any such Proceedings; and (ii) there are no existing
        orders, judgments or decrees of any Governmental Authority naming Moore as
        an
        affected party or otherwise affecting the MSD Patents or the performance
        by
        Moore of the transactions contemplated by this Agreement, nor, to the knowledge
        of Moore, is there any valid basis for any such order, judgment or
        decree.

       

      5.7 Advisory
        Fees.
        Except
        as set forth on Schedule 5.7,
        there
        is no investment banker, broker, finder or other intermediary or advisor
        that
        has been retained by or is authorized to act on behalf of Moore who is entitled
        to any fee, commission or reimbursement of expenses from Patriot, TPL or
        any of
        their

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      respective
        Representatives upon consummation of the transactions contemplated by this
        Agreement or otherwise.

       

      ARTICLE
        VI

      COVENANTS
        OF PATRIOT

       

      6.1 Court
        Approval of Stipulated Final Judgment.
        Patriot
        shall use its reasonable best efforts to obtain court approval of the Stipulated
        Final Judgment as soon as possible after the date hereof.

       

      6.2 Retention
        of Rights; No Action With Respect to the MSD Patents.
        Patriot
        and TPL shall retain all of their respective rights with respect to the MSD
        Patents, except those rights to the MSD Patents transferred by Patriot and
        TPL
        to P-Newco pursuant to the Newco Licenses and the Merger Agreement. From
        the
        date hereof until the termination of the Commercialization Agreement, neither
        Patriot nor any of its Representatives shall take any action with respect
        to
        those matters concerning which TPL is authorized to act on behalf of the
        parties
        pursuant to the Commercialization Agreement and the Grant referred to therein,
        including, but not limited to, contacting, pursuing litigation against, or
        entering into discussions or negotiations with potential infringers, entering
        into license agreements, settlement agreements, or other similar agreements
        with
        respect to the MSD Patents, or selling or otherwise transferring any interest
        in
        the MSD Patents. Notwithstanding the foregoing, subject to Section
        7.7,
        Patriot
        shall be entitled to take all actions contemplated by Section 7.1
        of this
        Agreement. From the termination of the Commercialization Agreement until
        one
        year from the date thereof, Patriot shall not contact or enter into discussions
        or negotiations with, or enter into license agreements, settlement agreements,
        or other similar agreements with respect to the MSD Patents, or pursue any
        litigation or other dispute resolution involving claims related to the MSD
        Patents with regard to any potential licensee with whom TPL is engaged in
        active
        negotiations at the time of the termination of the Commercialization Agreement
        and identified in writing by TPL within five (5) days after such
        termination.

       

      ARTICLE
        VII

      COVENANTS
        OF ALL PARTIES

       

      7.1 Protection
        and Maintenance of the MSD Patents.
        Subject
        to Section
        7.7,
        Patriot, TPL and Moore, as well as each of Patriot’s and TPL’s appointees to
        P-Newco’s Management Committee, shall use their respective best efforts to
        protect and maintain the MSD Patents, including taking all actions necessary
        to
        maintain the effectiveness of the MSD Patents.

       

      7.2 Commercialization
        Program.

       

      (a) From
        the
        date hereof, TPL shall use its commercially reasonable best efforts to pursue
        the commercialization program on behalf of P-Newco, substantially in the
        manner
        contemplated by the Commercialization Agreement, with all proceeds therefrom
        to
        be allocated among the parties consistent with the terms of the
        Commercialization Agreement and the Operating Agreement, and Patriot and
        Moore
        shall provide all reasonable assistance and cooperation with respect
        thereto.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Upon
        receipt of any proceeds in connection with TPL’s commercialization efforts
        pursuant to Section 7.2(a)
        between
        the date hereof and the earlier of (i) the Termination Date and (ii) the
        Closing, TPL shall cause all Net Cash Proceeds generated as a result thereof
        to
        be paid to P-Newco at the Closing to be retained and/or distributed by P-Newco
        pursuant to the terms of the Operating Agreement.

       

      (c) From
        the
        date hereof until the earlier of (i) the Termination Date and (ii) the Closing,
        TPL agrees to provide Patriot prompt notice upon (A) execution of any agreements
        relating to the MSD Patents, and (B) receipt by P-Newco of any funds
        therefrom.

       

      7.3 Further
        Assurances.
        TPL,
        Patriot and Moore agree to execute and deliver such other documents,
        certificates, agreements and other writings and to take such other actions
        as
        may be reasonably necessary or desirable in order to consummate or implement
        expeditiously the transactions contemplated by this Agreement.

       

      7.4 Certain
        Filings.
        TPL and
        Patriot shall cooperate with one another in determining whether any action
        by or
        in respect of, or filing with, any Governmental Authority is required or
        reasonably appropriate, or any action, consent, approval or waiver from any
        party to any contract is required or reasonably appropriate, in connection
        with
        the consummation of the transactions contemplated by this Agreement. Subject
        to
        the terms and conditions of this Agreement, in taking such actions or making
        any
        such filings, the parties hereto shall furnish information required in
        connection therewith and seek timely to obtain any such actions, consents,
        approvals or waivers.

       

      7.5 Notification.
        Patriot, TPL and Moore will promptly:

       

      (a) notify
        the other parties in writing if it or he becomes aware of any action, event,
        condition or circumstance, or group of actions, events, conditions or
        circumstances, that results in, or could reasonably be expected to result
        in, a
        Material Adverse Effect;

       

      (b) notify
        the other parties in writing of the commencement of any Proceeding by or
        against
        it or him, or of becoming aware of any claim, action, suit, inquiry, proceeding,
        notice of violation, demand letter, subpoena, government audit or disallowance
        that could be expected to result in a Proceeding by or against it or him;
        and

       

      (c) notify
        the other parties in writing of the occurrence of any breach by it or him
        of any
        representation or warranty, or any covenant or agreement, contained in this
        Agreement.

       

      7.6 Public
        Announcements.
        From
        the date hereof until the earlier of the Termination Date or the termination
        of
        the Commercialization Agreement, TPL and Patriot agree to consult with each
        other before (a) issuing any press release, (b) making any public statement
        with
        respect to this Agreement or the transactions contemplated hereby (including,
        without limitation, with respect to the consideration to be paid

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      pursuant
        to this Agreement or any license agreement pursuant to the Commercialization
        Agreement), or (c) making any SEC filing, and, except as may be required
        by
        Applicable Law, will not issue any such press release or public statement
        without the prior consent of the other party hereto. In the event a party
        determines that a public statement is required by Applicable Law, prior to
        making such statement or filing it shall provide to the other party a copy
        of
        such proposed statement or filing at least two Business Days prior to making
        such statement or filing and shall make such changes as may be reasonably
        requested by the other party. With respect to any SEC filing pursuant to
        Patriot’s obligations under the Exchange Act or otherwise, Patriot shall give
        TPL at least five Business Days advance notice of such filing (except to
        the
        extent compliance with applicable law shall require a shorter period of advance
        notice), and shall provide TPL a copy of the proposed filing for TPL’s review
        and comment, including all exhibits thereto, for purposes of determining
        whether
        to make a confidential treatment request with respect to any exhibit related
        to
        the transactions contemplated by this Agreement. Patriot agrees to make all
        requests for confidential treatment reasonably requested by TPL and consult
        with
        TPL regarding the requirement to make such a filing. Notwithstanding the
        foregoing, the parties may, on a confidential basis, advise and release
        information regarding the existence and content of this Agreement or the
        transactions contemplated hereby to their Representatives in connection with
        or
        related to the transactions contemplated by this Agreement.

       

      7.7 No
        Interference.
        From
        the date hereof through the earlier of the Termination Date or the termination
        of the Commercialization Agreement, Patriot, Moore and P-Newco shall each
        avoid
        and refrain from any and all activity of any kind or nature which may impede,
        impair, frustrate or otherwise interfere with the activities of TPL in the
        execution of the commercialization program contemplated by the Commercialization
        Agreement, and shall:

       

      (a) Exert
        their respective reasonable best efforts to impose the covenants of this
        Agreement, the Commercialization Agreement, and the transactions contemplated
        hereby and thereby on their respective affiliates or Representatives;
        and

       

      (b) Be
        responsible hereunder for each and every failure in the good and faithful
        performance of this Agreement and the Commercialization Agreement by themselves
        and/or their respective affiliates or Representatives (other than
        TPL).

       

      7.8 No
        Transfer.
        From
        the date hereof until one year after the termination of the Commercialization
        Agreement, with the exception of the agreements and transactions entered
        into
        pursuant to the commercialization program contemplated by the Commercialization
        Agreement, Patriot, P-Newco, TPL and Moore shall not transfer, assign, license,
        or otherwise convey any interest in, or grant any security interest with
        respect
        to, any portion of their interest in the MSD Patents without the written
        consent
        of all parties hereto, other than to entities which (a) are owned and controlled
        by the transferring Person and (b) agree to be bound by this Section
        7.8,
        or (c)
        in the case of Moore, pursuant to a living trust, will or other estate planning
        device, or via intestate succession, provided however that any transferee
        of
        Moore’s interest in the MSD Patents under this Section 7.8(c)
        shall
        agree to be bound by this Section 7.8.
        Any
        transfer pursuant to this Section 7.8
        shall be
        subject to existing licenses in respect of the MSD Patents.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      7.9 Litigation
        Cooperation.
        Patriot, P-Newco and Moore agree to cooperate in any litigation with respect
        to
        the MSD Patents, including providing any reasonable assistance in connection
        with such litigation or joining as a party thereto, as requested by
        TPL.

       

      ARTICLE
        VIII

      CONDITIONS
        TO CLOSING

       

      8.1 Conditions
        to Obligations of Each Party.
        The
        obligations of each of TPL and Patriot to consummate the Closing are subject
        to
        the satisfaction of each of the following conditions:

       

      (a) The
        transactions contemplated by this Agreement and the consummation of the Closing
        shall not violate any Applicable Law. No temporary restraining order,
        preliminary or permanent injunction, cease and desist order or other order
        issued by any court of competent jurisdiction or any competent Governmental
        Authority or any other legal restraint or prohibition preventing the
        transactions contemplated by this Agreement, or imposing Damages in respect
        thereto, shall be in effect, and there shall be no pending or threatened
        actions
        or proceedings by any Governmental Authority (or determinations by any
        Governmental Authority).

       

      (b) Patriot,
        TPL and Moore shall have agreed on and selected the Independent Manager (as
        defined in the Operating Agreement) for P-Newco, and the first Annual Business
        Plan for P-Newco shall have been approved.

       

      (c) Intel
        shall have disbursed to the Escrow Account all unpaid Milestone Payments
        (as
        defined in the Intel Patent License Agreement) set forth in Section 3.2
        of the
        Intel Patent License Agreement.

       

      8.2 Conditions
        to Obligations of TPL.
        The
        obligations of TPL to consummate the Closing are subject to the satisfaction
        of
        each of the following conditions:

       

      (a) (i)
        Patriot shall have complied with, performed and satisfied each of its agreements
        and covenants contained herein and required to be performed and satisfied
        by it
        on or prior to the Closing, (ii) each of the representations and warranties
        of
        Patriot contained in this Agreement, or in any certificate or document delivered
        to TPL pursuant hereto, shall have been true and correct in all material
        respects when made and shall contain no misstatement or omission that would
        make
        any such representation or warranty materially misleading when made and shall
        be
        true and correct in all material respects on, and contain no misstatement
        or
        omissions that would make any such representation or warranty materially
        misleading at and as of the Closing with the same force and effect as if
        made as
        of the Closing except for those representations and warranties which address
        matters only as of a particular date (which shall remain true and correct
        as of
        such particular date), and (iii) TPL shall have received certificates
        signed by a duly authorized executive officer of Patriot to the foregoing
        effect
        and to the effect that the conditions specified within this Section 8.2
        have
        been satisfied.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) This
        Agreement, the Escrow Agreement, the Merger Agreement, the Operating Agreement,
        the Commercialization Agreement, the Warrant, the Registration Rights Agreement,
        and the Stipulated Final Judgment shall have been executed and delivered
        by
        Patriot, Moore and P-Newco, as applicable.

       

      (c) The
        Stipulated Final Judgment shall have been executed by Patriot and delivered
        to
        TPL, with such changes as may be requested by the court.

       

      (d) The
        Trade
        Secrets Litigation shall have been dismissed without prejudice.

       

      8.3 Conditions
        to Obligations of Patriot.
        The
        obligations of Patriot to consummate the Closing are subject to the satisfaction
        of each of the following conditions:

       

      (a) (i)
        TPL
        shall have complied with, performed and satisfied each of its agreements
        and
        covenants contained herein and required to be performed and satisfied by
        it on
        or prior to the Closing, (ii) each of the representations and warranties
        of TPL
        contained in this Agreement, or in any certificate or document delivered
        to
        Patriot pursuant hereto, shall have been true and correct in all material
        respects when made and shall contain no misstatement or omission that would
        make
        any such representation or warranty materially misleading when made and shall
        be
        true and correct in all material respects on, and contain no misstatement
        or
        omissions that would make any such representation or warranty materially
        misleading at and as of the Closing with the same force and effect as if
        made as
        of the Closing except for those representations and warranties which address
        matters only as of a particular date (which shall remain true and correct
        as of
        such particular date), and (iii) Patriot shall have received certificates
        signed by a duly authorized executive officer of TPL to the foregoing effect
        and
        to the effect that the conditions specified within this Section 8.3
        have
        been satisfied.

       

      (b) This
        Agreement, the Escrow Agreement, the Merger Agreement, the Operating Agreement,
        the Commercialization Agreement, and the Stipulated Final Judgment shall
        have
        been executed and delivered by TPL, Moore and P-Newco, as
        applicable.

       

      (c) The
        Infringement Litigation involving Intel and Patriot shall have been dismissed
        with prejudice.

       

      ARTICLE
        IX

      INDEMNIFICATION

       

      9.1 Patriot
        Agreement to Indemnify.
        Patriot
        shall indemnify and hold harmless TPL and Moore and their respective affiliates
        and Representatives (collectively, the “TPL
        Indemnitees”)
        in
        respect of any and all Damages which any of the TPL Indemnitees may incur
        or
        sustain, or to which any of the TPL Indemnitees may be subjected, as a result
        of:

       

      (a) any
        inaccuracy or misrepresentation in or breach of any representation or warranty
        contained in this Agreement;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) any
        breach by Patriot of any covenant or agreement to be performed by
        Patriot;

       

      (c) any
        Proceeding brought by any Person, based upon or arising from actions of Patriot
        prior or subsequent to the date hereof, including without limitation: (i)
        any
        public disclosure made by Patriot, or any omission by Patriot to disclose,
        in
        any filing with the SEC, press release, prospectus or any oral or written
        communication; (ii) any alleged breach by Patriot or any of Patriot’s officers,
        directors, employees or agents of any duty to holders of Patriot Common Stock
        or
        any other Patriot securities, or right or agreement to purchase Patriot Common
        Stock or any other Patriot securities; or (iii) any actions of Patriot or
        any
        predecessor in interest to Patriot with respect to the MSD Patents (or any
        actual or alleged agreement pertaining thereto); provided, however, that
        this
Section 9.1(c)
        shall
        not apply to Proceedings related to actions taken by Patriot in good faith
        pursuant to this Agreement and the agreements contemplated hereby;

       

      (d) any
        Proceeding brought by any current or former affiliate, Representative,
        stockholder, creditor or stakeholder of Patriot based upon or arising from
        the
        negotiation or consummation of the transactions contemplated by this Agreement,
        including without limitation any action brought by Russell Fish, the law
        firm of
        Beatie & Osborn LLP or any of its partners, members, associates, or
        employees, Russell H. Beatie, Daniel A. Osborn, John E. Lynch or Willis E.
        Higgins; or

       

      (e) any
        Taxes
        of Patriot.

       

      9.2 TPL
        Agreement to Indemnify.
        TPL
        shall indemnify and hold harmless Patriot and its Representatives (collectively,
        the “Patriot Indemnitees“) in respect of any and all Damages which any of the
        Patriot Indemnitees may incur or sustain, or to which any of the Patriot
        Indemnitees may be subjected, as a result of:

       

      (a) any
        inaccuracy or misrepresentation in or breach of any representation or warranty
        contained in this Agreement;

       

      (b) any
        breach by TPL of any covenant or agreement to be performed by TPL;

       

      (c) any
        Damages in connection with any Proceeding brought by any Person, other than
        Patriot’s current or former Representatives, based upon or arising from actions
        of TPL prior or subsequent to the date hereof, including without limitation,
        any
        actions of TPL or any predecessor in interest to TPL with respect to the
        MSD
        Patents (or any actual or alleged agreement pertaining thereto); provided,
        however, that this Section 9.2(c)
        shall
        not apply to Proceedings related to actions taken by TPL in good faith pursuant
        to this Agreement and the agreements contemplated hereby; or

       

      (d) any
        Taxes
        of TPL.

       

      9.3 Moore
        Agreement to Indemnify.
        Moore
        shall indemnify and hold harmless Patriot and TPL and their respective
        affiliates or Representatives (collectively, the “Patriot/TPL
        Indemnitees”)
        in
        respect of any and all Damages which any of the Patriot/TPL Indemnitees may
        incur or sustain, or to which any of the Patriot/TPL Indemnitees may be
        subjected, as a result of:

       

      (a) any
        inaccuracy or misrepresentation in or breach of any representation or warranty
        contained in Article V of this Agreement; or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) any
        breach by Moore of any covenant or agreement to be performed by
        Moore.

       

      9.4 Survival
        of Representations, Warranties and Covenants.
        All
        representations, warranties, covenants, agreements and obligations of each
        Indemnifying Party contained in this Agreement and all claims of any TPL
        Indemnitee or Patriot Indemnitee in respect of any breach of any representation,
        warranty, covenant, agreement or obligation of any Indemnifying Party contained
        in this Agreement, shall survive the Closing and all due diligence performed
        by
        the respective parties.

       

      9.5 Claims
        for Indemnification.
        If any
        Indemnitee shall believe that such Indemnitee is entitled to indemnification
        pursuant to this Article IX
        in
        respect of any Damages, such Indemnitee shall give the appropriate Indemnifying
        Party prompt written notice thereof. Any such notice shall set forth in
        reasonable detail and to the extent then known the basis for such claim for
        indemnification. The failure of such Indemnitee to give notice of any claim
        for
        indemnification promptly shall not adversely affect such Indemnitee’s right to
        indemnity hereunder except to the extent that such failure adversely affects
        the
        right of the Indemnifying Party to assert all reasonable defenses to such
        claim.
        Each such claim for indemnity shall expressly state that the Indemnifying
        Party
        shall have only the thirty (30) calendar day period referred to in the next
        sentence to dispute or deny such claim. The Indemnifying Party shall have
        thirty
        (30) calendar days following its receipt of such notice either (a) to
        acquiesce in such claim and the responsibility to indemnify the Indemnitee
        in
        respect thereof in accordance with the terms of this Article IX
        by
        giving such Indemnitee written notice of such acquiescence or (b) to object
        to the claim by giving such Indemnitee written notice of the objection. If
        the
        Indemnifying Party does not object thereto within such thirty (30) calendar
        day
        period, the Indemnifying Party shall be deemed to have acquiesced in such
        claim
        and the responsibility to indemnify the Indemnitee in respect thereof in
        accordance with the terms of this Article IX.

       

      9.6 Defense
        of Claims.
        In
        connection with any claim which may give rise to indemnity under this
Article IX
        resulting from or arising out of any claim or Proceeding against an Indemnitee
        by a Person that is not a party hereto, the Indemnifying Party may (unless
        such
        Indemnitee elects not to seek indemnity hereunder for such claim), upon written
        notice sent at any time to the relevant Indemnitee, assume the defense of
        any
        such claim or Proceeding if the Indemnifying Party with respect to such claim
        or
        Proceeding acknowledges to the Indemnitee the Indemnitee’s right to indemnity
        pursuant hereto in respect of the entirety of such claim (as such claim may
        have
        been modified through written agreement of the parties or arbitration hereunder)
        and provide assurances, reasonably satisfactory to such Indemnitee, that
        the
        Indemnifying Party will be financially able to satisfy such claim in full
        if
        such claim or Proceeding is decided adversely. The Indemnifying Party shall
        select counsel reasonably acceptable to such Indemnitee to conduct the defense
        of such claim or Proceeding, shall take all steps

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      reasonably
        necessary in the defense or settlement thereof and shall at all times diligently
        and promptly pursue the resolution thereof. If the Indemnifying Party shall
        have
        assumed the defense of any claim or Proceeding in accordance with this
Section 9.6,
        the
        Indemnifying Party shall not (without the written consent of each Indemnitee)
        consent to a settlement of, or the entry of any judgment arising from, any
        such
        claim or Proceeding, unless such settlement or order shall provide for the
        unconditional release of all Indemnitees. If the Indemnifying Party has so
        elected to assume the defense, each Indemnitee shall be entitled to participate
        in (but not control) the defense of any such action, with its own counsel
        and at
        its own expense. Each Indemnitee shall, and shall cause each of its
        Representatives to, cooperate fully with the Indemnifying Party in the defense
        of any claim or Proceeding being defended by the Indemnifying Party pursuant
        to
        this Section 9.6.
        If the
        Indemnifying Party does not assume the defense of any claim or Proceeding
        resulting therefrom in accordance with the terms of this Section 9.6,
        such
        Indemnitee may defend against such claim or Proceeding in such manner as
        it may
        deem appropriate, provided that the Indemnitee may not settle such claim
        or
        Proceeding without the written consent of the Indemnifying Party (which consent
        shall not be unreasonably withheld or delayed), and provided further that
        the
        Indemnifying Party shall be obligated to pay Indemnitee’s attorneys’ fees and
        costs promptly as they are incurred in the defense of such claim or
        Proceeding.

       

      ARTICLE
        X

      TERMINATION

       

      10.1 Grounds
        for Termination.
        This
        Agreement may be terminated (except as set forth in Section 10.2)
        and the
        transactions contemplated hereby abandoned at any time prior to the Closing
        (the
“Termination
        Date”):

       

      (a) by
        mutual
        written agreement of TPL and Patriot;

       

      (b) by
        TPL
        upon written notice to Patriot of any one or more inaccuracies or
        misrepresentations in or breaches of the representations or warranties made
        by
        Patriot contained herein which have had or, if not cured prior to the Closing
        Date could be reasonably expected to have, a Material Adverse Effect when
        taken
        into account with all other uncured inaccuracies or misrepresentations in
        or
        breaches of such representations or warranties; provided, however, that a
        termination pursuant to this clause (b) shall become effective upon the
        earlier to occur of (i) fifteen (15) days after such notice with respect to
        such a misrepresentation or breach that is not capable of being cured on
        or
        prior to the Closing Date, or (ii) immediately prior to the Closing with
        respect to such a misrepresentation or breach that is capable of being cured,
        but is not cured, on or prior to the Closing Date;

       

      (c) by
        TPL at
        any time upon written notice to Patriot of the failure by Patriot to perform
        and
        satisfy in all material respects any of its obligations under this Agreement
        required to be performed and satisfied on or prior to the Closing Date;
        provided, however, that a termination pursuant to this clause (c) shall
        become effective upon the earlier to occur of (i) three (3) days after such
        notice with respect to such a failure that is not capable of being cured
        on or
        prior to the Closing Date, (ii) fifteen (15) days after such notice with
        respect to such a failure that is capable of being cured on or prior to the
        Closing Date, but is not cured, on or prior to such fifteenth (15th) day,
        or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (iii) immediately
        prior to the Closing with respect to such a failure that is capable of being
        cured, but is not cured, on or prior to the Closing Date;

       

      (d) by
        Patriot at any time upon written notice to TPL of any one or more inaccuracies
        or misrepresentations in or breaches of the representations or warranties
        made
        by TPL or Moore contained herein which have had or, if not cured prior to
        the
        Closing Date could be reasonably expected to have, a Material Adverse Effect
        when taken into account with all other uncured inaccuracies or
        misrepresentations in or breaches of such representations or warranties;
        provided, however, that a termination pursuant to this clause (d) shall
        become effective upon the earlier to occur of (i) fifteen (15) days after
        such notice with respect to such a misrepresentation or breach that is not
        capable of being cured on or prior to the Closing Date, or (ii) immediately
        prior to the Closing with respect to such a misrepresentation or breach that
        is
        capable of being cured, but is not cured, on or prior to the Closing
        Date;

       

      (e) by
        Patriot at any time upon written notice to TPL of TPL’s failure to perform and
        satisfy in all material respects any of its obligations under this Agreement
        required to be performed and satisfied on or prior to the Closing Date;
        provided, however, that a termination pursuant to this clause (e) shall
        become effective upon the earlier to occur of (i) three (3) days after such
        notice with respect to such a failure that is not capable of being cured
        on or
        prior to the Closing Date, (ii) fifteen (15) days after such notice with
        respect to such a failure that is capable of being cured on or prior to the
        Closing Date, but is not cured, on or prior to such fifteenth (15th) day,
        or
        (iii) immediately prior to the Closing with respect to such a failure that
        is capable of being cured, but is not cured, on or prior to the Closing
        Date;

       

      (f) by
        Patriot or TPL if the Closing shall not have been consummated by November
        30,
        2005; provided, however, that Patriot or TPL may not terminate this Agreement
        pursuant to this clause (f) if the Closing shall not have been consummated
        within such time period by reason of the failure of that party or any of
        its
        Representatives to perform in all material respects any of its or their
        respective covenants or agreements contained in this Agreement;

       

      (g) by
        Patriot if TPL has caused a Material Adverse Effect other than any Material
        Adverse Effect caused by any proceeding brought by any current or former
        affiliate, Representative, stockholder, creditor or stakeholder of Patriot
        relating to any effect of the public announcement of this Agreement, the
        transactions contemplated hereby or the consummation of such
        transactions;

       

      (h) by
        TPL if
        Patriot has caused a Material Adverse Effect; and

       

      (i) by
        any
        party hereto if any federal, state or foreign law or regulation thereunder
        shall
        hereafter be enacted or become applicable that makes the transactions
        contemplated hereby or the consummation of the Closing illegal or otherwise
        prohibited, or if any judgment, injunction, order or decree enjoining either
        party hereto from consummating the transactions contemplated hereby is entered,
        and such judgment, injunction, order or decree shall become final and
        nonappealable.

       

      The
        party
        desiring to terminate this Agreement pursuant to clauses (b) through (i)
        shall
        give written notice of such termination to the other party pursuant to
Section
        11.1.

       

      10.2 Effect
        of Termination.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (a) If
        this
        Agreement is terminated as permitted by Section 10.1,
        such
        termination shall be without liability of any party to any other party to
        this
        Agreement except as hereinafter expressly provided in this Section 10.2.

       

      (b) If
        such
        termination shall result from the willful failure of Patriot to fulfill a
        condition to the performance of the obligations of TPL, the willful failure
        of
        Patriot to perform a covenant contained in this Agreement or a willful breach
        by
        Patriot of its representations and warranties contained in this Agreement,
        Patriot shall be fully responsible for all Damages incurred by TPL as a result
        of such failure or breach by Patriot.

       

      (c) If
        such
        termination shall result from the willful failure of TPL to fulfill a condition
        to the performance of the obligations of Patriot, the willful failure of
        TPL to
        perform a covenant contained in this Agreement or a willful breach by TPL
        of its
        representations and warranties contained in this Agreement, TPL shall be
        fully
        responsible for all Damages incurred by Patriot as a result of such failure
        or
        breach by TPL.

       

      (d) If
        such
        termination shall result for any reason other than (i) the willful failure
        of
        Patriot to fulfill a condition to the performance of the obligations of TPL;
        (ii) the willful failure of Patriot to perform a covenant contained in this
        Agreement; or (iii) the willful breach by Patriot of its representations
        and
        warranties contained in this Agreement, Patriot shall be entitled to one-half
        of
        the Net Cash Proceeds generated by TPL from the period beginning from the
        date
        hereof and ending on the date this Agreement is terminated. It is expressly
        agreed and understood that Patriot shall not be entitled to any of the Milestone
        Payments (as such term is defined in the Intel Patent License Agreement),
        which
        shall only be distributed pursuant to the terms of the Escrow Agreement.
        TPL
        shall pay Patriot, by wire transfer in immediately available funds, to the
        account set forth on Exhibit E of the Escrow Agreement, such funds within
        the later of (A) five (5) days after the termination of this Agreement and
        (B)
        sixty (60) days of receipt thereof by TPL.

       

      (e) The
        provisions of Article IX, as well as Sections 7.6,
        11.1, 11.5, 11.9, 11.13
        and
11.14
        and this
Section 10.2
        shall
        survive any termination of this Agreement pursuant to this Article X,
        and
        each party hereto shall be fully responsible for any breach of any such
        provision, whether or not such breach occurs prior to the termination of
        this
        Agreement. In addition, the parties expressly agree that the Stipulated Final
        Judgment is severable and has significance independent of this Agreement
        and any
        other agreements and transactions contemplated hereby and thereby, and as
        such
        shall not be affected or disturbed by the Termination of this
        Agreement.

       

      ARTICLE
        XI

      MISCELLANEOUS

       

      11.1 Notices.
        All
        notices, requests, demands, claims and other communications hereunder shall
        be
        in writing. Any notice, request, demand, claim, or other communication hereunder
        shall be deemed duly given (a) if personally delivered, when so delivered,
        (b) if mailed, two Business Days after having been sent by registered or
        certified mail, return receipt requested, postage prepaid and addressed to
        the
        intended recipient as set forth below, (c) if given by fax, once such
        notice or other communication is transmitted to the fax number specified
        below
        and the appropriate answer back or telephonic confirmation is received, provided
        that a copy of such notice or other communication is promptly

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      thereafter
        mailed in accordance with the provisions of clause (b) above or (d) of
        this Section 11.1,
        or
        (d) if sent through an overnight delivery service in circumstances to which
        such service guarantees next day delivery, the day following being so
        sent:

       

      If
        to
        Patriot:

      

      Patriot
        Scientific Corporation

      10989
        Via
        Frontera

      San
        Diego, CA 92127

      Attn:
        President

      Fax:
        (858) 674-5004

      

      with
        a
        copy to:

      

      Luce,
        Forward, Hamilton & Scripps LLP

      600
        West
        Broadway, Suite 2600

      San
        Diego, CA 92101

      Attn:
        Otto E. Sorensen, Esq.

      Fax:
        (619) 232-8311

      

      If
        to
        TPL:

      

      Technology
        Properties Limited Inc.

      P.O.
        Box
        20250

      San
        Jose,
        CA 95160

      Attn:
        Daniel E. Leckrone, Chairman

      Fax:
        (408) 296-6637

      

      with
        a
        copy to:

      

      Gibson,
        Dunn & Crutcher LLP

      333
        S.
        Grand Avenue

      Los
        Angeles, California 90071

      Attn:
        Andrew E. Bogen, Esq.

      Fax:
        (213) 229-6159

      

      If
        to
        Moore:

      

      Charles
        H. Moore

      40
        Cedar
        Lane

      P.O.
        Box
        127

      Sierra
        City, CA 96125

      Fax:
        (413) 714-5590

      

      Any
        party
        may give any notice, request, demand, claim or other communication hereunder
        using any other means (including ordinary mail or electronic mail), but no
        such
        notice, request, demand, claim or other communication shall be deemed to
        have
        been duly given unless and until it actually is received by the individual
        for
        whom it is intended. Any party may change the address to which

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      notices,
        requests, demands, claims and other communications hereunder are to be delivered
        by giving the other parties notice in the manner herein set forth.

       

      11.2 Amendments;
        No Waivers.

       

      (a) Any
        provision of this Agreement may be amended or waived if, and only if, such
        amendment or waiver is in writing and signed, in the case of an amendment,
        by
        all parties hereto, or in the case of a waiver, by the party against whom
        the
        waiver is to be effective; provided, however, that any amendment or waiver
        to
Section 11.9,
        Section 11.13,
        Section 11.14
        or this
Section 11.12(a)
        or any
        other amendment or waiver with respect to this Agreement of the agreements
        referenced herein that adversely affects Intel shall be effective only if
        such
        written amendment or waiver also has been executed and delivered by
        Intel.

       

      (b) No
        waiver
        by a party of any default, misrepresentation or breach of warranty or covenant
        hereunder, whether intentional or not, shall be deemed to extend to any prior
        or
        subsequent default, misrepresentation or breach of warranty or covenant
        hereunder or affect in any way any rights arising by virtue of any prior
        or
        subsequent occurrence. No failure or delay by a party in exercising any right,
        power or privilege hereunder shall operate as a waiver thereof nor shall
        any
        single or partial exercise thereof preclude any other or further exercise
        thereof or the exercise of any other right, power or privilege. The rights
        and
        remedies herein provided shall be cumulative and not exclusive of any rights
        or
        remedies provided by law.

       

      11.3 Expenses.
        All
        costs and expenses incurred in connection with this Agreement and in closing
        and
        carrying out the transactions contemplated hereby shall be paid by the party
        incurring such cost or expense.

       

      11.4 Successors
        and Assigns.
        This
        Agreement shall be binding upon and inure to the benefit of the parties hereto
        and their respective successors and permitted assigns. No party hereto may
        assign either this Agreement or any of its rights, interests or obligations
        hereunder without the prior written approval of the other party.

       

      11.5 Governing
        Law.
        This
        Agreement shall be construed in accordance with and governed by the internal
        laws (without reference to choice or conflict of laws) of the State of
        California.

       

      11.6 Counterparts;
        Effectiveness.
        This
        Agreement may be signed in any number of counterparts and the signatures
        delivered by fax or other similar means, each of which shall be an original,
        with the same effect as if the signatures thereto and hereto were upon the
        same
        instrument. This Agreement shall become effective when each party hereto
        shall
        have received a counterpart hereof signed by the other parties
        hereto.

       

      11.7 Entire
        Agreement.
        This
        Agreement (including the Schedules and Exhibits referred to herein which
        are
        hereby incorporated by reference and the other agreements executed
        simultaneously herewith) constitutes the entire agreement between the parties
        with respect to the subject matter hereof and supersedes all prior agreements,
        understandings and negotiations, both written and oral, between the parties
        with
        respect to the subject matter of this Agreement.

       

      11.8 Captions.
        The
        captions herein are included for convenience of reference only and shall
        be
        ignored in the construction or interpretation hereof. All references to an
        Article or Section include all subparts thereof.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      11.9 Severability.
        The
        failure of any provision of this Agreement by virtue of its being construed
        as
        invalid or otherwise unenforceable shall render the entire Agreement cancelable
        at the option of the party asserting the enforceability of the said provision.
        Notwithstanding the foregoing, the parties expressly agree that the Stipulated
        Final Judgment, Section 11.2(a),
        Section 11.13
        and
Section
        11.14
        are
        severable and have significance independent of this Agreement and any other
        agreements and transactions contemplated hereby and thereby, and as such
        shall
        not be affected or disturbed by the invalidity, illegality or unenforceability
        of any such provision or provisions or of the entirety of any such
        agreements.

       

      11.10 Construction.
        The
        parties hereto intend that each representation, warranty and covenant contained
        herein shall have independent significance. If any party has beached any
        representation, warranty or covenant contained herein in any respect, the
        fact
        that there exists another representation, warranty or covenant relating to
        the
        same subject matter (regardless of the relative levels of specificity) that
        the
        party has not breached shall not detract from or mitigate the fact that the
        party is in breach of the first representation, warranty or
        covenant.

       

      11.11 Cumulative
        Remedies.
        The
        rights, remedies, powers and privileges herein provided are cumulative and
        not
        exclusive of any rights, remedies, powers and privileges provided by
        law.

       

      11.12 Specific
        Performance.
        The
        parties hereby acknowledge and agree that the failure of any party to perform
        its agreements and covenants hereunder, including its failure to take all
        actions as are necessary on its part to consummate the agreements contemplated
        hereby, will cause irreparable injury to the other party, for which damages,
        even if available, will not be an adequate remedy. Accordingly, each party
        hereby consents to the issuance of injunctive relief without bond by any
        court
        of competent jurisdiction to compel performance of such party’s obligations and
        to the granting by any court of the remedy of specific performance of its
        obligations hereunder.

       

      11.13 Third-Party
        Beneficiaries.
        Except
        as specifically provided in (a) Article IX
        with
        respect to indemnification provided to the Indemnitees identified therein,
        and
        (b) Section 11.14,
        no
        provision of this Agreement shall create any third-party beneficiary rights
        in
        any Person, including any employee or former employee of Patriot or any
        Representative thereof (including any beneficiary or dependent thereof).
        Each of
        Intel and its present, former and future direct and indirect distributors
        of
        Intel Licensed Products (collectively, the “Intel
        Parties”)
        shall
        be an express, intended third-party beneficiary of Section 11.2(a),
        Section 11.9
        and
Section 11.14.

       

      11.14 No
        Liability of Intel.
        Upon
        payment by Intel of all of the unpaid Milestone Payments provided for at
        Section
        3.2
        of the
        Intel Patent License Agreement to the account designated at Exhibit A
        to the
        Escrow Agreement attached hereto as Exhibit E,
        each of
        Intel and the Intel Parties shall be forthwith and without further or other
        action of any kind by anyone, released from all potential liability with
        respect
        to Intel Licensed Products and based upon the rights of Patriot in and to
        the
        Core Patents (as described in the Intel Patent License Agreement). It is
        the
        intention of the parties to this Agreement in executing this Agreement that
        the
        same shall be effective as a bar to each and every claim, demand and cause
        of
        action hereinabove specified in this Section 11.14.
        In
        furtherance of this intention, each of the parties to this Agreement hereby
        expressly waives any and all rights and benefits conferred upon him by the
        provisions of Section 1542 of the California Civil Code (or any similar
        provision of any other applicable law) and expressly consents that this
        Agreement shall be given full force and effect according to each and all
        of its
        express terms and provisions, including those related to unknown and unsuspected
        claims, demands and causes of action, if any, as well as those related to
        any
        other claims, demands and causes of action hereinabove specified. Section
        1542
        of the California Civil Code provides:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “A
        GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
        OR
        SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
        WHICH
        IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
        WITH
        THE DEBTOR.”

       

      Each
        of
        the parties to this Agreement acknowledges that it or he may hereafter discover
        claims or facts in addition to or different from those which it or he now
        knows
        or believes to exist with respect to the subject matter of this Agreement
        and
        which, if known or suspected at the time of executing this Agreement, may
        have
        materially affected this release. Nevertheless, each of the parties to this
        Agreement hereby waives any right, claim, or cause of action that might arise
        as
        a result of such different or additional claims or facts. Each of the parties
        to
        this Agreement acknowledges that it or he understands the significance and
        consequence of the release set forth in this Section 11.14
        and such
        specific waiver of Section 1542 (and any other similar provisions of any
        other
        applicable laws).

       

      For
        the
        avoidance of doubt, the releases provided for in this Section 11.14
        shall
        extend solely to the use and practice of the Core Patents with respect to
        Intel
        Licensed Products.

       

      11.15 No
        Punitive, Exemplary, or Consequential Damages.
        Except
        as expressly set forth herein, the parties hereto understand and agree that
        under no circumstances shall punitive, exemplary or consequential damages
        be
        available to any party for breach of this Agreement.

       

      [signature
        page follows]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
        executed by their respective authorized officers as of the day and year first
        above written.

       

      PATRIOT
        SCIENTIFIC CORPORATION, a 
Delaware corporation

      

      By:_____________________________________________

      Name:___________________________________________

      Title:____________________________________________

      

      

      TECHNOLOGY
        PROPERTIES LIMITED INC., a 
California corporation

      

      By:_____________________________________________

      Name:___________________________________________

      Title:____________________________________________

      

      

      CHARLES
        H. MOORE, an individual

      

      ___________________________________________

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        EXHIBIT
          A

         

        TOWNSEND
          AND TOWNSEND AND CREW LLP

        ROGER
          L.
          COOK (State Bar No. 55208)

        ERIC
          P.
          JACOBS (State Bar No. 88413)

        IRIS
          SOCKEL MITRAKOS (State Bar No. 190162)

        Two
          Embarcadero Center, Eighth Floor

        San
          Francisco, California 94111

        Telephone:
          (415) 576-0200

        Facsimile:
          (415) 576-0300

         

        Attorneys
          for Defendants Technology Properties, Ltd. 

         

         

        and
          Daniel E. Leckrone

         

        HENNEMAN
          & SAUNDERS 

        F.
          ERIC
          SAUNDERS (State Bar No. 87686)

        3081
          Ponderosa Road

        P.O.Box
          2215

        Arnold,
          CA 95223

        Telephone:
          (209) 795-6650

        Facsimile:
          (209) 795-6659

         

        Attorney
          for Defendant Charles H. Moore

         

        UNITED
          STATES DISTRICT COURT

        FOR
          THE
          NORTHERN DISTRICT OF CALIFORNIA

        SAN
          JOSE
          DIVISION

        

        
          	
                  PATRIOT
                    SCIENTIFIC CORPORATION,

                   

                  Plaintiff,

                   

                  v.

                   

                  CHARLES
                    H. MOORE, TECHNOLOGY PROPERTIES LTD., and DANIEL E. LECKRONE,

                  Defendants.

                	 	
                  Case
                    No. C
                    04 0618 JF (HRL)

                  E-FILING
                    CASE

                   

                  STIPULATED
                    FINAL JUDGMENT

                   

                

        

         

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        IT
          IS
          HEREBY ORDERED, ADJUDGED, and DECREED as follows:

         

        Plaintiff
          Patriot Scientific Corporation ("Patriot"), on one hand, and Defendants
          Charles
          H. Moore ("Moore"), Technology Properties, Ltd. ("TPL") and Daniel E. Leckrone
          ("Leckrone"), on the other hand, hereby stipulate and agree as
          follows:

         

        1. Patriot,
          Moore, and TPL, among others, have entered into a series of negotiated
          agreements, pursuant to which Patriot, Moore, and TPL have agreed to settle
          all
          litigation among them on the terms and conditions contained in that certain
          Master Agreement by and among Patriot, TPL and Moore, dated as of June 1,
          2005.

         

        2. Pursuant
          to the terms of the Master Agreement referred to above, the settlement
          of the
          litigation among Patriot, Moore, and TPL, as well as the transactions
          contemplated by the Master Agreement, will not become effective unless
          and until
          this Stipulated Final Judgment is executed by all of the parties hereto
          and
          filed with the Court.

         

        3. Patriot,
          Moore, and TPL desire to settle all litigation among them through this
          Stipulated Final Judgment and the negotiated agreements, and have all right,
          power, and authority to do so, as well as to enter into the Master Agreement
          and
          related documents and effectuate the transactions contemplated thereby
          in
          furtherance of the terms of this Stipulated Final Judgment and the negotiated
          agreements.

         

        4. In
          connection therewith, Patriot's Third Amended Complaint seeking a declaration
          as
          to inventorship and ownership of United States Patent Number 5,809,336
          (the
          "'336 Patent") shall be and hereby is dismissed with prejudice.

         

        5. Final
          judgment shall be and hereby is entered in favor of Defendants Moore, TPL
          and
          Leckrone on Defendants' Counterclaims for a declaration that Moore is at
          least a
          co-inventor and TPL is at least a co-owner of the '336 Patent and U.S.
          Patent
          Nos. 6,598,148 ("'148 Patent"), 5,440,749 ("749 Patent"), 5,530,890 ("'890
          Patent"), 5,604,915 ("'915 Patent"), 5,659,703 ("'703 Patent") and 5,784,584
          ("'584 Patent").

         

        6. Patriot
          waives any and all right to appeal from this Stipulated Final
          Judgment.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        7. Each
          party shall bear its own attorneys' fees and costs in connection with this
          action.

         

        8. This
          Court shall retain jurisdiction over this action for the purposes of enforcing,
          construing, clarifying, and modifying this Stipulated Final
          Judgment.

         

        9. The
          Clerk
          of the Court is directed to give notice of entry of this Stipulated Final
          Judgment pursuant to Rule 77(d) of the Federal Rules of Civil
          Procedure.

         

        

        [remainder
          of page intentionally blank]

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        DATED:
          June __,
          2005

        TOWNSEND
          and TOWNSEND and CREW LLP

         

        

        By:__________________________________________

        Roger
          L.
          Cook

        Attorneys
          for Defendants

        Technology
          Properties Ltd. and Daniel E. Leckrone

        DATED:
          June __,
          2005

        HENNEMANN
          & SAUNDERS

         

         

        By:__________________________________________

        F.
          Eric
          Saunders

        Attorney
          for Defendant Charles H. Moore

         

        DATED:
          June __, 2005

         

        By:__________________________________________

        Carlton
          Johnson

        Attorney
          for Plaintiff

        Patriot
          Scientific Corporation

        

        

        IT
          IS SO
          ORDERED

        

        DATED:
          June __, 2005          

        __________________________________________

        UNITED
          STATES DISTRICT COURT JUDGE

        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        EXHIBIT
          B

         

        

         

        

         

        

        LIMITED
          LIABILITY COMPANY

         

        OPERATING
          AGREEMENT

         

        OF

         

        [P-NEWCO],

         

        A
          DELAWARE LIMITED LIABILITY COMPANY

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        TABLE
          OF CONTENTS

         

        Page

        
          	 	 	 
	
                  ARTICLE
                    1

                	
                  DEFINITIONS

                	
                  1

                
	 	 	 
	
                  ARTICLE
                    2

                	
                  FORMATION
                    OF LIMITED LIABILITY COMPANY

                	
                  7

                
	
                  2.1

                	
                  Formation

                	
                  7

                
	
                  2.2

                	
                  Name;
                    Principal Place of Business

                	
                  7

                
	
                  2.3

                	
                  Registered
                    Office and Registered Agent

                	
                  7

                
	
                  2.4

                	
                  Agreement;
                    Effect of Inconsistencies With the Act or the Code

                	
                  7

                
	
                  2.5

                	
                  Business

                	
                  8

                
	
                  2.6

                	
                  Term

                	
                  8

                
	
                  2.7

                	
                  Qualification

                	
                  8

                
	 	 	 
	
                  ARTICLE
                    3

                	
                  MEMBERSHIP

                	
                  8

                
	
                  3.1

                	
                  Members

                	
                  8

                
	
                  3.2

                	
                  Representations
                    and Warranties

                	
                  9

                
	
                  3.3

                	
                  Incorporation
                    of Representations and Warranties

                	
                  9

                
	
                  3.4

                	
                  Resignation
                    or Withdrawal of a Member.

                	
                  10

                
	
                  3.5

                	
                  Effect
                    of Certain Events on Membership.

                	
                  10

                
	
                  3.6

                	
                  Restrictions
                    on Transfers of Interests

                	
                  10

                
	
                  3.7

                	
                  No
                    Authority as Agent

                	
                  11

                
	 	 	 
	
                  ARTICLE
                    4

                	
                  MANAGEMENT

                	
                  11

                
	
                  4.1

                	
                  Management
                    of the Company by Management Committee

                	
                  11

                
	
                  4.2

                	
                  Appointment
                    of Management Committee.

                	
                  11

                
	
                  4.3

                	
                  Responsibilities
                    of the Management Committee

                	
                  13

                
	
                  4.4

                	
                  Officers

                	
                  13

                
	
                  4.5

                	
                  Liability
                    of Committee Members and Officers

                	
                  14

                
	
                  4.6

                	
                  Records,
                    Audits and Reports

                	
                  14

                
	
                   

                	 	 
	
                  ARTICLE
                    5

                	
                  CAPITAL
                    CONTRIBUTIONS

                	
                  15

                
	
                  5.1

                	
                  Initial
                    Capital Contributions

                	
                  15

                
	
                  5.2

                	
                  Percentage
                    Interests

                	
                  15

                
	
                  5.3

                	
                  Working
                    Capital Contributions.

                	
                  15

                
	
                  5.4

                	
                  Failure
                    to Make Contributions

                	
                  15

                
	
                  5.5

                	
                  Capital
                    Accounts

                	
                  16

                
	
                   

                	 	 
	
                  ARTICLE
                    6

                	
                  DISTRIBUTIONS,
                    ALLOCATIONS AND TAX MATTERS

                	
                  17

                
	
                  6.1

                	
                  Application
                    of Gross Cash Proceeds.

                	
                  17

                
	
                  6.2

                	
                  Allocation
                    of Net Profits

                	
                  18

                
	
                  6.3

                	
                  Allocation
                    of Net Losses

                	
                  18

                
	
                  6.4

                	
                  General
                    Rules for Allocations

                	
                  18

                
	
                  6.5

                	
                  Special
                    Allocations to Capital Accounts.

                	
                  18

                
	
                  6.6

                	
                  Tax
                    Allocations; Section 704(c) of the Code.

                	
                  19

                
	
                  6.7

                	
                  Tax
                    Matters Member.

                	
                  20

                
	
                  6.8

                	
                  Section
                    754 Election

                	
                  20

                
	
                  6.9

                	
                  Returns
                    and Other Elections

                	
                  20

                
	
                  6.10

                	
                  Partnership
                    Tax Treatment

                	
                  21

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   

                	 	 
	
                  ARTICLE
                    7

                	
                  INDEMNIFICATION
                    AND LIMITATION OF LIABILITY

                	
                  21

                
	
                  7.1

                	
                  Indemnification.

                	
                  21

                
	
                  7.2

                	
                  Limitation
                    of Liability

                	
                  22

                
	
                  7.3

                	
                  Savings
                    Clause

                	
                  22

                
	
                   

                	 	 
	
                  ARTICLE
                    8

                	
                  DISSOLUTION
                    AND WINDING UP

                	
                  23

                
	
                  8.1

                	
                  Dissolution

                	
                  23

                
	
                  8.2

                	
                  Winding
                    Up

                	
                  23

                
	
                  8.3

                	
                  Reversion
                    of Rights

                	
                  23

                
	
                  8.4

                	
                  Order
                    of Payment Upon Liquidation

                	
                  23

                
	
                  8.5

                	
                  Antecedent
                    Activities.

                	
                  23

                
	
                  8.6

                	
                  Limitations
                    on Payments Made in Dissolution

                	
                  24

                
	
                  8.7

                	
                  Certificate
                    of Cancellation

                	
                  24

                
	
                  8.8

                	
                  Effect
                    of Filing Certificate of Cancellation

                	
                  24

                
	
                   

                	 	 
	
                  ARTICLE
                    9

                	
                  MISCELLANEOUS

                	
                  24

                
	
                  9.1

                	
                  Amendment

                	
                  24

                
	
                  9.2

                	
                  Governing
                    Law and Severability

                	
                  25

                
	
                  9.3

                	
                  Counterparts

                	
                  25

                
	
                  9.4

                	
                  Titles
                    and Subtitles

                	
                  25

                
	
                  9.5

                	
                  Notices

                	
                  25

                
	
                  9.6

                	
                  Entire
                    Agreement

                	
                  25

                
	
                  9.7

                	
                  Power
                    of Attorney

                	
                  26

                
	
                  9.8

                	
                  Related
                    Party Transactions

                	
                  26

                
	
                  9.9

                	
                  Dispute
                    Resolution

                	
                  26

                
	
                  9.10

                	
                  No
                    Partition

                	
                  26

                
	
                  9.11

                	
                  Bankruptcy

                	
                  26

                

        

        

        SCHEDULE
          1 - INITIAL CAPITAL CONTRIBUTIONS

         

        SCHEDULE
          2 - PERCENTAGE INTERESTS

         

        EXHIBIT
          A
          - CONSENT
          OF CHARLES H. MOORE TO LIMITED LIABILITY OPERATING AGREEMENT OF P-NEWCO,
          A
          DELAWARE LIMITED LIABILITY COMPANY

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        LIMITED
          LIABILITY COMPANY

        OPERATING
          AGREEMENT FOR

        [P-NEWCO],

        A
          DELAWARE LIMITED LIABILITY COMPANY

         

        This
          Limited Liability Company Operating Agreement (this “Operating
          Agreement”)
          of
          [P-Newco], a Delaware limited liability company (the “Company”), is made as of
          June 7, 2005, by and between PATRIOT SCIENTIFIC CORPORATION, a Delaware
          corporation (“Patriot”),
          and
          TECHNOLOGY PROPERTIES LIMITED INC., a California corporation (“TPL”)
          (collectively, the “Members”).

         

        RECITALS

         

        WHEREAS,
          Patriot has formed the Company as a limited liability company under the
          Delaware
          Limited Liability Company Act, 6 Del.
          C.
          § 18-101, et
          seq.,
          as
          amended (the “Act”),
          for
          the purposes of effecting the transactions contemplated by the Master Agreement
          (as defined below);

         

        WHEREAS,
          prior to the capital contributions and the issuance of the Percentage Interests
          described in Article 5
          hereof,
          Patriot has been the sole member of the Company;

         

        WHEREAS,
          the Members wish to enter into this Operating Agreement to provide for
          the
          structure, governance and operation of the Company.

         

        AGREEMENT

         

        NOW
          THEREFORE, in consideration of the respective covenants and promises contained
          herein and for other good and valuable consideration, the receipt and adequacy
          of which is hereby acknowledged, the parties hereto agree as
          follows:

         

        ARTICLE
          1

        DEFINITIONS

         

        The
          following terms shall have the meanings set forth below for purposes of
          this
          Operating Agreement:

         

        “Act”
means
          the Delaware Limited Liability Company Act.

         

        “Active
          Potential Licensees”
has
          the
          meaning set forth in Section 6.2 of the Master Agreement.

         

        “Adjusted
          Capital Account Deficit”
means,
          with respect to any Member for any taxable year or other period, the deficit
          balance, if any, in such Member’s Capital Account as of the end of such year or
          other period, after giving effect to the following adjustments: (a) credit
          to
          such Capital Account any amounts that such Member is obligated to restore
          or is
          deemed obligated to restore as described in the penultimate sentence of
          Treasury
          Regulation Section 1.704-2(g)(1) and in Treasury Regulation
          Section 1.704-2(i); and (b) debit to such Capital Account the items
          described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and
          (6).

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        “Adjusted
          Gross Cash Proceeds”
means
          Gross Cash Proceeds minus
          TPL
          Direct Reimbursable Expenses.

         

        “Affiliate”,
          with
          respect to any Person, means any other Person directly or indirectly
          controlling, controlled by or under common control with, such Person. For
          purposes of this Operating Agreement, “control”
          (including with correlative meanings, the terms “controlling”,
          “controlled
          by”
or
          “under
          common control with”)
          as
          used with respect to any Person, shall mean the possession, directly or
          indirectly, of the power to direct or cause the direction of the management
          and
          policies of such Person, whether through the ownership of voting securities
          or
          by contract or otherwise.

         

        “Annual
          Business Plan”
means,
          for any Fiscal Year, the Company’s annual financial and operating plan and
          budget for such Fiscal Year as formally approved by the Management Committee,
          as
          such financial and operating plan and budget may be amended from time to
          time by
          the Management Committee.

         

        “Antecedent
          Activities”
means
          active negotiations with parties identified as Active Potential Licensees
          pursuant to Section 6.2 of the Master Agreement..

         

        “Applicable
          Law”
means
          any domestic or foreign, federal, state or local statute, law, common law,
          ordinance, rule, administrative interpretation, regulation, order, writ,
          injunction, directive, judgment, decree, permit or other requirement of
          any
          Governmental Authority.

         

        “Book
          Value”
means,
          with respect to any asset, the asset’s adjusted basis for federal income tax
          purposes, except as follows:

         

        (a)The
          initial Book Value of any asset contributed by a Member to the Company
          shall be
          the gross fair market value of such asset (not reduced by any associated
          liabilities), as agreed to by the contributing Member and the Management
          Committee;

         

        (b)The
          Book
          Value of the property of the Company shall be adjusted to equal its gross
          fair
          market value, as determined by the Management Committee, as of the following
          times: (i) the acquisition of an additional Interest by any new or existing
          Member in exchange for more than a de
          minimis
          Capital
          Contribution; (ii) the distribution by the Company to a Member of more than
          a de
          minimis
          amount
          of property as consideration for an Interest; (iii) the liquidation of the
          Company within the meaning of Treasury Regulations Section 1.704-1
          (b)(2)(ii)(g); and (iv) any other instance in which such adjustment is
          permitted
          under Treasury Regulation Section 1.704-1(b)(2)(iv); provided,
          however,
          that
          adjustments pursuant to clauses (i), (ii), and (iv) above shall be made
          only if the Management Committee reasonably determines that such adjustments
          are
          necessary or appropriate to reflect the relative economic interests of
          the
          Members in the Company; and

         

        (c)The
          Book
          Value of any property distributed to a Member shall be adjusted to equal
          the
          gross fair market value of such asset on the date of distribution as determined
          by the Management Committee.

         

        The
          Book
          Value of any property which has been established or adjusted to reflect
          gross
          fair market value hereunder shall thereafter be adjusted by depreciation
          as
          provided in Treasury Regulation

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Section
          1.704-1(b)(2)(iv)(g) and any other adjustment to the value of such property
          other than depreciation or amortization.

         

        “Capital
          Account”
means,
          with respect to any Member, the capital account maintained by the Company
          for
          such Member in accordance with Section 5.5.

         

        “Change
          of Control”
means
          (a) the merger or consolidation of Patriot with or into another corporation
          in
          which Patriot is not the surviving entity, or a reverse triangular merger,
          or
          similar transaction, in which Patriot is the surviving entity but the shares
          of
          Patriot’s capital stock outstanding immediately prior to the merger are
          converted into other property, whether in the form of securities, cash,
          or
          otherwise, and as a result of which the outstanding capital stock of Patriot
          prior to such transaction represents less than a majority of the outstanding
          capital stock of Patriot or the acquirer or successor following such
          transaction, (b) any sale or transfer of all or substantially all of Patriot’s
          assets to any other Person, or (c) the sale or transfer of shares of Patriot’s
          capital stock, warrants, options or instruments convertible into capital
          stock
          of Patriot and as a result of which the outstanding capital stock of Patriot
          on
          a fully diluted basis assuming conversion of all outstanding instruments
          convertible into shares of Patriot’s capital stock prior to such transaction
          represents less than a majority of the outstanding capital stock of Patriot
          or
          the acquirer or successor following such transaction.

         

        “Certificate
          of Formation”
means
          the Certificate of Formation of the Company as filed with the Secretary
          of State
          of the State of Delaware on June [__], 2005, as the same may be amended or
          restated from time to time.

         

        “Code”
means
          the Internal Revenue Code of 1986, as amended from time to time, or any
          successor federal tax statute enacted after the date of this Operating
          Agreement.

         

        “Commercialization
          Agreement”
means
          that certain Commercialization Agreement, dated as of the date hereof,
          by and
          among Patriot, TPL and the Company.

         

        “Company”
has
          the
          meaning set forth in the Preamble.

         

        “Company
          Expenses”
means
          any direct operating expenses of the Company as may be approved by the
          Management Committee, including any fees or other compensation payable
          to the
          Managers or for expenses related to the preparation of Company financial
          statements, tax reporting and the maintenance of a bank account in the
          name of
          the Company, and other similar administrative expenses.

         

        “Company
          Minimum Gain”
means
          “partnership minimum gain” as defined in Treasury Regulation
          Section 1.704-2(d).

         

        “Damages”
means
          all demands, claims, actions or causes of action, assessments, losses (including
          reasonably foreseeable lost profits), damages, costs, expenses, liabilities,
          judgments, awards, fines, sanctions, penalties, charges and amounts paid
          in
          settlement (net of insurance proceeds and proceeds from related third party
          indemnification, contribution or similar claims actually received), including
          (a) interest at a rate equal to 200 basis points above the prime rate, as
          in effect from time to time, of Citibank, N.A., on cash disbursements in
          respect
          of any of the foregoing, compounded quarterly, from the date each such
          cash
          disbursement is made until the Person incurring the same shall have been
          indemnified in respect thereof, (b) reasonable costs, fees and expenses
          of

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        such
          Person’s Representatives and (c) any reasonable costs, fees and expenses
          incurred in connection with investigating, defending against, or settling
          any
          such claims.

         

        “Exchange
          Act”
means
          the Securities Exchange Act of 1934, as amended.

         

        “Fair
          Market Value”
shall
          mean, with respect to the Initial Capital Contributions, the fair market
          value
          of such asset as determined by the Members.

         

        “Fiscal
          Year”
means
          (i) any twelve (12) month period commencing on June 1 and ending on
          May 31, or (ii) any portion of the period described in clause (i)
          of this sentence for which the Company is required to allocate Net Profits,
          Net
          Losses and other items of Company income, gain, loss or deduction pursuant
          to
Article VI,
          as the
          case may be.

         

        “Governmental
          Approval”
means
          an authorization, consent, approval, permit or license issued by, or a
          registration or filing with, any Governmental Authority.

         

        “Governmental
          Authority”
means
          any foreign, domestic, federal, territorial, state or local governmental
          authority, quasi-governmental authority, instrumentality, court, government
          or
          self-regulatory organization, commission, tribunal or organization or any
          regulatory, administrative or other agency, or any political or other
          subdivision, department or branch of any of the foregoing.

         

        “Gross
          Cash Proceeds”
means
          all cash proceeds received pursuant to licenses, judgments, settlements
          and
          other payments with respect to the right to make, have made, use, sell,
          and
          import products utilizing the MSD Patents.

         

        “Indemnitees”
means
          the Members, Managers, officers and employees of the Company, as well as
          their
          respective Representatives, entitled to indemnification by the Company
          pursuant
          to Article VII.

         

        “Independent
          Manager”
has
          the
          meaning set forth in Section 4.2(c).

         

        “Initial
          Capital Contributions”
has
          the
          meaning set forth in Section 5.1.

         

        “Initial
          Working Capital Contribution”
means
          the Two Million Dollars ($2,000,000) payable by each of Patriot and TPL,
          in the
          aggregate amount of Four Million Dollars ($4,000,000), due upon the execution
          of
          this Operating Agreement.

         

        “JAMS”
has
          the
          meaning set forth in Section 4.2(c).

         

        “Liabilities”
means,
          with respect to any Person, any liability or obligation of such Person
          of any
          kind, character or description, whether known or unknown, absolute or
          contingent, accrued or unaccrued, liquidated or unliquidated, secured or
          unsecured, joint or several, due or to become due, vested or unvested,
          executory, determined, determinable or otherwise and whether or not the
          same is
          required to be accrued on the financial statements of such Person or is
          disclosed on any schedule to the Master Agreement or this Operating
          Agreement.

         

        “Lien”
means,
          with respect to any asset, any mortgage, title defect or objection, lien,
          pledge, charge, security interest, hypothecation, restriction, encumbrance
          or
          charge of any kind in respect of such asset.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        “Liquidator”
has
          the
          meaning set forth in Section 8.2.

         

        “Management
          Committee”
has
          the
          meaning set forth in Section 4.1.

         

        “Manager”
means
          a
          member of the Management Committee.

         

        “Master
          Agreement”
means
          that certain agreement, dated as of May [27], 2005, by and between Patriot
          and TPL.

         

        “Member
          Minimum Gain”
means
          the Company’s “partner nonrecourse debt minimum gain” as defined in Treasury
          Regulation Section 1.704-2(i)(2).

         

        “Member
          Nonrecourse Debt”
means
          “partner nonrecourse debt” as defined in Treasury Regulation
          Section 1.704-2(b)(4).

         

        “Member
          Nonrecourse Deductions”
means
          “partner nonrecourse deductions” as defined in Treasury Regulation
          Section 1.704-2(i)(2).

         

        “Members”
has
          the
          meaning set forth in the Preamble.

         

        “MSD
          Patents”
means
          those microprocessor science and design patents identified on Schedule 1 to
          the Master Agreement.

         

        “Net
          Cash Proceeds”
has
          the
          meaning set forth in Section 6.1(a)(v).

         

        “Net
          Profit”
or
          “Net
          Loss”
means,
          for any Accounting Period, the amount, computed as of the last day thereof,
          of
          the net income or loss of the Company determined in accordance with federal
          income tax principles (but without requiring any items to be stated separately
          pursuant to Code Section 703), with the following adjustments:

         

        (a)
          Any
          income of the Company that is exempt from federal income tax shall be included
          in the computation of Net Profit or Net Loss;

         

        (b)
          Any
          expenditures of the Company described in Code Section 705(a)(2)(B) or
          treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
          Regulations Section 1.704-l(b)(2)(iv)(i) shall be included in the
          computation of Net Profit or Net Loss;

         

        (c)
          Any
          adjustment in the Book Value of property in accordance with this Agreement
          and
          pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) or (g) shall
          be
          taken into account as gain or loss from the disposition of such asset for
          purposes of computing Net Profit or Net Loss (to the extent such adjustment
          is
          not already reflected in the Capital Accounts of the Members);

         

        (d)
          In
          any
          situation in which an item of income, gain, loss or deduction is affected
          by the
          adjusted tax basis of property, the Book Value of the property shall be
          used in
          lieu of adjusted basis (notwithstanding that the adjusted tax basis of
          such
          property may differ from its Book Value), and in lieu of depreciation,
          amortization and other cost recovery deductions taken into account in computing
          taxable income or loss, there will be taken into account

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        depreciation
          for the taxable year or other period as determined in accordance with Treasury
          Regulation Section 1.704-1(b)(2)(iv)(g); and

         

        (e)
          Any
          items
          of income, gain, deduction and loss specially allocated pursuant to Section
          6.6
          of this Agreement shall not be considered in determining Net Profit or
          Net
          Loss.

         

        “Newco
          Licenses”
means
          the P-Newco License and the T-Newco License.

         

        “Nonrecourse
          Deductions”
has
          the
          meaning set forth in Treasury Regulation
          Section 1.704-2(b)(1).

         

        “Operating
          Agreement”
has
          the
          meaning set forth in the Preamble.

         

        “Patriot”
has
          the
          meaning set forth in the Preamble.

         

        “Patriot
          Appointee”
has
          the
          meaning set forth in Section 4.2(a).

         

        “Percentage
          Interest”
means
          a
          Member’s percentage interest in the Company, as such Percentage Interest may be
          adjusted from time to time pursuant to the terms of this Operating
          Agreement.

         

        “Person”
means
          an individual, corporation, partnership, limited liability company, joint
          venture, association, trust, estate or other entity or organization, including
          a
          Governmental Authority.

         

        “P-Newco
          License”
means
          that certain license agreement entered into between Patriot and the
          Company.

         

        “Proceedings”
means
          any actions, suits, claims, hearings, arbitrations, proceedings (public
          or
          private) or governmental investigations that have been brought by or against
          any
          Governmental Authority or any other Person.

         

        “Recovery
          Event”
means
          the moment at which payment is actually received by Patriot, TPL, or the
          Company
          as a result of or in connection with any Antecedent Activities.

         

        “Regulatory
          Allocations”
are
          those allocations contained in Section 6.5.

         

        “Representatives”
means
          the officers, directors, employees, attorneys, accountants, advisors,
          representatives and agents of a Person.

         

        “Securities
          Act”
means
          the Securities Act of 1933, as amended.

         

        “Tax
          Matters Member”
means
          that Member appointed by the Management Committee with the power to manage
          and
          control, on behalf of the Company, any administrative proceeding at the
          Company
          level with the Internal Revenue Service relating to the determination of
          any
          item of Company income, gain, loss, deduction or credit for federal income
          tax
          purposes.

         

        “T-Newco”
means
          a
          newly formed Delaware limited liability company, wholly owned by
          TPL.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        “T-Newco
          License”
means
          that certain license agreement entered into between TPL and
          T-Newco.

         

        “TPL”
has
          the
          meaning set forth in the Preamble.

         

        “TPL
          Appointee”
has
          the
          meaning set forth in Section 4.2(b).

         

        “TPL
          Direct Reimbursable Expenses”
has
          the
          meaning set forth in Section 4.2 of the Commercialization
          Agreement.

         

        “Transfer”
has
          the
          meaning set forth in Section 3.6.

         

        “Treasury
          Regulations”
means
          the proposed, temporary and final regulations promulgated under the Code
          in
          effect as of the date of filing the Certificate of Formation and the
          corresponding sections of any regulations subsequently issued that amend
          or
          supersede those regulations.

         

        “Working
          Capital Contribution”
means
          the amount payable to the Company each Fiscal Year by each of the Members
          for
          the Company’s working capital requirements pursuant to Section 5.3.

         

        “Working
          Capital Fund”
means
          the fund containing the Company’s working capital to be maintained pursuant to
Section 5.3(b).

         

        ARTICLE
          2

        FORMATION
          OF LIMITED LIABILITY COMPANY

         

        2.1 Formation.
          Patriot
          caused the Certificate of Formation of the Company to be filed with the
          Delaware
          Secretary of State on June [__], 2005.

         

        2.2 Name;
          Principal Place of Business.
          Unless
          and until amended in accordance with this Operating Agreement and the Act,
          the
          name of the Company is “[__________]”. The principal place of business of the
          Company shall be such place or places as the Management Committee from
          time to
          time determines.

         

        2.3 Registered
          Office and Registered Agent.
          The
          Company’s initial registered office shall be at the office of its registered
          agent at 160 Greentree Drive, Suite 101, Dover, Delaware 19904, and the
          name of
          its initial registered agent at such address shall be National Registered
          Agents, Inc. The registered agent may be changed from time to time by filing
          the
          address of the new registered office and/or the name of the new registered
          agent
          with the Secretary of State of the State of Delaware pursuant to the
          Act.

         

        2.4 Agreement;
          Effect of Inconsistencies With the Act or the Code.
          It is
          the express intention of the Members that this Operating Agreement, together
          with the Exhibits and Schedules, shall be the sole source of agreement
          of the
          parties with respect to the structure, governance and the operation of
          the
          Company and, except to the extent a provision of this Operating Agreement
          expressly incorporates federal income tax rules by reference to sections
          of
          the

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Code
          or
          Treasury Regulations or is expressly prohibited or ineffective under the
          Act,
          this Operating Agreement shall govern the structure and operation of the
          Company, even when inconsistent with, or different than, the provisions
          of the
          Act or any other law or rule. To the extent that any provision of this
          Operating
          Agreement is prohibited or ineffective under the Act, this Operating Agreement
          shall be deemed to be amended to the smallest degree possible in order
          to make
          this Operating Agreement effective under the Act in accordance with the
          intent
          of the parties. In the event the Act is subsequently amended or interpreted
          in
          such a way to make any provision of this Operating Agreement that was formerly
          invalid valid, such provision shall be considered to be valid from the
          effective
          date of such interpretation or amendment. Each of the Members shall be
          entitled
          to rely on the provisions of this Operating Agreement, and none of the
          Members
          shall be liable to the Company or to any of the other Members for any action
          or
          refusal to act taken in good faith reliance on the terms of this Operating
          Agreement. The Members hereby agree that the duties and obligations imposed
          on
          the Members as such shall be those set forth in this Operating Agreement,
          which
          is intended to govern the relationship among and between the Company and
          the
          Members, notwithstanding any provision of the Act or common law to the
          contrary.

         

        2.5 Business.
          The
          purpose of the Company is to engage in any activity for which a limited
          liability company may be organized under the Act.

         

        2.6 Term.
          The
          term of the Company commenced upon the filing of the Certificate of Formation
          with the Delaware Secretary of State on June [__], 2005 and shall continue
          until the Company’s dissolution in accordance with Article VIII of this
          Operating Agreement.

         

        2.7 Qualification.
          The
          Management Committee shall cause the Company to be qualified or registered,
          if
          and to the extent required, under the applicable laws of any jurisdiction
          in
          which such registration may be required, and shall be authorized to execute,
          deliver and file any certificates and documents necessary to effect such
          qualification or registration.

         

        ARTICLE
          3

        MEMBERSHIP

         

        3.1 Members.
          The
          names and addresses of the Members are as follows:

         

        
          	
                  Patriot
                    Scientific Corporation

                	
                  10989
                    Via Frontera

                  San
                    Diego, California 92127

                
	
                  Technology
                    Properties Limited Inc.

                	
                  21730
                    Stevens Creek Boulevard, Suite 201

                  Cupertino,
                    California 95014

                

        

         

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        3.2 Representations
          and Warranties.
          Each
          Member hereby represents and warrants to the Company and the other Member
          as
          follows:

         

        (a) Such
          Member is either an individual or a corporation duly organized, validly
          existing
          and in good standing under the laws of its state of incorporation with
          all
          requisite corporate power and authority to own, lease and operate its properties
          and assets and to carry on its business as now conducted;

         

        (b) Such
          Member has all requisite power and authority to execute and deliver this
          Operating Agreement and to perform its obligations hereunder. The execution
          and
          delivery by such corporate Member of this Operating Agreement and the
          consummation of the transactions contemplated hereby have been duly authorized
          by all necessary corporate action on its part. This Operating Agreement
          has been
          duly executed and delivered by such Member and constitutes the legal, valid
          and
          binding obligations of such Member, enforceable against it in accordance
          with
          its terms, except as enforcement may be limited by equitable principles
          and by
          bankruptcy, insolvency, reorganization, moratorium or similar laws relating
          to
          creditors’ rights generally;

         

        (c) The
          execution, delivery and performance by such Member of this Operating Agreement
          and the consummation of the transactions contemplated hereby do not and
          will not
          (i) violate the certificate of incorporation or bylaws of such Member, in
          each case as amended through the date hereof, (ii) conflict with, result in
          a breach of or constitute (or, with the giving of notice or lapse of time,
          or
          both, constitute) a default under, or require the approval or consent of
          any
          Person pursuant to, any material agreement, instrument or other document
          to
          which such Member is a party or by which it or its properties or assets
          is
          bound, or (iii) violate any material provision of any statute, rule or
          regulation applicable to such Member or binding on it or any of its assets,
          or
          (iv) except as set forth in the Newco Licenses, result in the creation or
          imposition of any Lien on the MSD Patents.

         

        (d) Such
          Member is acquiring its Percentage Interest for investment purposes and
          not with
          a view to the resale or distribution thereof;

         

        (e) Such
          Member understands and acknowledges that such Member’s Percentage Interest has
          not been registered under the Securities Act or any state securities or
          blue sky
          laws and may not be sold unless registered under the Securities Act and
          qualified under applicable state securities or blue sky laws or such sale
          is
          made pursuant to an exemption from such registration and qualification
          requirements;

         

        (f) The
          limitations on Transfer contained in Section 3.6 create an economic risk
          that such Member is capable of bearing; and

         

        (g) Such
          Member is a “United States person” within the meaning of Section 7701(a)(30) of
          the Code.

         

        3.3 Incorporation
          of Representations and Warranties.
          Each of
          Patriot and TPL hereby reaffirms the representations and warranties made
          by such
          Member in the Master Agreement as if such representations and warranties
          were
          set forth fully herein.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        3.4 Resignation
          or Withdrawal of a Member.

         

        (a) No
          Member
          shall resign from membership in the Company or withdraw their interest
          in the
          capital of the Company, except (i) in connection with the dissolution of
          the Company pursuant to the provisions of Article VIII,
          or
          (ii) with the prior written consent of all of the other
          Members.

         

        (b) The
          resignation of a Member shall not (i) relieve such Member of any of its
          covenants, agreements, duties, obligations or liabilities under this Operating
          Agreement whether arising prior to, on, or after the date of such resignation
          (including, without limitation, any contingent obligations based on acts
          or
          omissions occurring, or liabilities or obligations incurred, prior to,
          on or
          after the date of such resignation), or (ii) directly or indirectly result
          in the termination of, or relieve such Member (or any Affiliate thereof)
          of, or
          otherwise affect, any of the covenants, agreements, duties, obligations
          or
          liabilities of such Member (or any Affiliate thereof) under any other agreement
          to which such Member is a party.

         

        3.5 Effect
          of Certain Events on Membership.

         

        (a) Bankruptcy,
          Foreclosure, or Other Similar Event.
          In the
          event of a Member’s bankruptcy, or the foreclosure upon or other similar
          proceeding with respect to that Member’s interest in the MSD Patents or that
          Member’s Percentage Interest:

         

        
          	 	
                  (i)

                	
                  any
                    and all rights that Member may have under Section 4.2
                    of
                    this Operating Agreement shall automatically terminate;
                    and

                

        

         

        
          	 	
                  (ii)

                	
                  any
                    and all rights that Member may have under Sections 2.2.1
                    and 2.2.2
                    of
                    the P-Newco License or T-Newco License, as the case may be, shall
                    automatically and without further action by any of the parties
                    thereto be
                    irrevocably transferred to the
                    Company.

                

        

         

        (b) Change
          of Control.
          In the
          event of a Change of Control of Patriot or TPL:

         

        
          	 	
                  (i)

                	
                  any
                    and all rights Patriot or TPL may have under Section 4.2
                    of
                    this Operating Agreement, as the case may be, shall automatically
                    terminate; and

                

        

         

        
          	 	
                  (ii)

                	
                  Patriot
                    or TPL’s rights under Sections 2.2.1
                    and 2.2.2
                    of
                    the P-Newco License or T-Newco License, as the case may be, shall
                    automatically and without further action by any of the parties
                    thereto be
                    irrevocably transferred to the
                    Company.

                

        

         

        3.6 Restrictions
          on Transfers of Interests.
          Except
          as provided in Section 5.4, no Member shall sell, assign, pledge, mortgage
          or otherwise dispose of or transfer (a “Transfer”)
          its
          Percentage Interest in the Company, whether in whole or in part, without
          the
          consent of the Management Committee, which consent may be withheld for
          any or
          for no reason.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        3.7 No
          Authority as Agent.
          Except
          as may be authorized by the Management Committee, or as set forth in the
          Commercialization Agreement, no Member shall have the authority in its
          or his
          capacity as a Member to enter into any transaction on behalf of the Company
          or
          to otherwise bind the Company.

         

        ARTICLE
          4

        MANAGEMENT

         

        4.1 Management
          of the Company by Management Committee.
          The
          business and affairs of the Company shall be managed by a management committee
          (the “Management
          Committee”)
          consisting of three (3) Managers, which number may not be changed without
          the
          written consent of the Members holding at least seventy-five percent (75%)
          of
          the Percentage Interests.

         

        4.2 Appointment
          of Management Committee.

         

        (a) Patriot
          Appointment.
          Patriot
          shall have the right to appoint one (1) Manager to the Management Committee
          (the
“Patriot
          Appointee”).

         

        (b) TPL
          Appointment.
          TPL
          shall have the right to appoint one (1) Manager to the Management Committee
          (the
“TPL
          Appointee”).

         

        (c) Independent
          Manager.
          The
          Patriot Appointee and the TPL Appointee shall work together in good faith
          to
          appoint a mutually acceptable third Manager (the “Independent
          Manager”).
          In
          the event that the Patriot Appointee and the TPL Appointee are unable to
          appoint
          a mutually acceptable Manager within 10 days of the resignation or removal
          of
          the Independent Manager, either party may apply to the Judicial Arbitration
          and
          Mediation Service (“JAMS”)
          in
          Santa Clara County, or the nearest county thereto, if necessary, for the
          appointment of the Independent Manager, and JAMS shall select the Independent
          Manager from a list of no more than three persons submitted by each party.
          All
          costs associated with the selection of the Independent Manager by JAMS
          pursuant
          to this Section 4.2(c)
          shall be
          paid by the Company.

         

        (d) Term
          of Service.
          Each
          Manager (other than the Independent Manager) will serve until his or her
          death
          or resignation from the Management Committee, or until his or her removal
          from
          the Management Committee by the Member who appointed him or her. The Independent
          Manager shall serve a five (5) year term (subject to earlier removal as
          provided
          below).

         

        (e) Initial
          Managers. 
          The
          initial Managers are as follows:

         

        
          	
                  Patriot
                    Appointee

                	
                  David
                    H. Pohl

                
	
                  TPL
                    Appointee

                	
                  Daniel
                    E. Leckrone

                
	
                  Independent
                    Manager

                	
                  Robert
                    K. Neilson

                

        

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        (f) Meetings;
          Place of Meetings; Telephonic Participation.
          Meetings of the Management Committee may be held at such times and places
          within
          or without the State of Delaware as the Management Committee may from time
          to
          time designate or as shall be designated by the Manager or Managers calling
          the
          meeting in the notice or waiver of notice of any such meeting. Regular
          meetings
          of the Management Committee shall be held not less than once during every
          calendar quarter. Special meetings of the Management Committee shall be
          held
          whenever called by one or more Managers. Notice of the time, place and
          purpose
          of each such special meeting shall be sent by facsimile transmission or
          electronic mail or be delivered personally or mailed to and received by
          each
          Manager not less than seventy-two (72) hours before the time at which the
          meeting is to be held. Notice of any meeting of the Management Committee
          shall
          not be required to be given to any Manager who waives such notice in writing
          or
          who is present at such meeting, except a Manager who shall attend such
          meeting
          for the express purpose of objecting, at the beginning of the meeting,
          to the
          transaction of any business because the meeting is not lawfully called
          or
          convened. At the request of any Manager, any or all Managers may participate
          telephonically in any meeting of the Management Committee so long as all
          persons
          participating in the meeting can hear each other, and such participation
          shall
          constitute presence in person at such meeting. Any action required or permitted
          to be taken at any meeting of the Management Committee may be taken without
          a
          meeting, without prior notice and without a vote, if a consent in writing
          (including by electronic transmission as permitted by Section 18-302 of the
          Act), setting forth the action so taken, shall be signed or delivered by
          all
          Managers. Such written (or electronically transmitted) consent shall be
          filed
          with the minutes of proceedings of the Management Committee.

         

        (g) Quorum.
          Two (2)
          Managers must be present at a meeting of the Management Committee to establish
          a
          quorum for the transaction of business.

         

        (h) Majority
          Vote.
          All
          actions to be taken by the Management Committee shall require the affirmative
          vote of at least two (2) of the three (3) Managers.

         

        (i) Resignation;
          Removal; Vacancies; Compensation.

         

        
          	 	
                  (i)

                	
                  Resignation.
                    A
                    Manager may resign at any time by giving written notice to the
                    Members.
                    The resignation of a Manager shall take effect upon receipt of
                    such notice
                    or at such later time as shall be specified in the notice. Unless
                    otherwise specified in the notice, the acceptance of the resignation
                    shall
                    not be necessary to make it
                    effective.

                

        

         

        
          	 	
                  (ii)

                	
                  Removal.
                    The Patriot Appointee to the Management Committee may be removed
                    only by
                    Patriot, with or without cause. The TPL Appointee to the Management
                    Committee may be removed only by TPL, with or without cause.
                    The
                    Independent Manager may be removed at any time, with or without
                    cause, by
                    written consent of the Members holding at least seventy-five
                    percent (75%)
                    of the Percentage Interests.

                

        

         

        
          	 	
                  (iii)

                	
                  Vacancies.
                    Vacancies on the Management Committee shall be filled by the
                    Member who
                    originally appointed the vacating Manager, or, in the case of
                    the
                    Independent Manager, pursuant to Section 4.2(c)
                    of
                    this Operating Agreement.

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
          	 	
                  (iv)

                	
                  Compensation.
                    No Manager other than the Independent Manager (in the Members’ discretion)
                    shall be eligible to receive separate compensation from the Company
                    for
                    his or her services on the Management Committee; provided,
                    however,
                    that the Managers shall be reimbursed by the Company for the
                    reasonable
                    and actual costs incurred in attending and participating in any
                    meetings
                    of the Management Committee and other costs and expenses reasonably
                    related to fulfilling the duties and obligations of a Manager
                    hereunder.

                

        

         

        4.3 Responsibilities
          of the Management Committee.
          The
          Management Committee shall have the responsibility, on behalf of the
          Company:

         

        (a) To
          approve the Annual Business Plan, as well as any modifications
          thereto.

         

        (b) To
          make
          any distributions to Members pursuant to Article VI.

         

        (c) To
          make
          any filings with any Governmental Authority on behalf of the
          Company.

         

        (d) To
          purchase liability and other insurance to protect the Company’s properties and
          business and to purchase liability insurance to indemnify or otherwise
          protect
          the Members, Managers, officers and employees of the Company.

         

        (e) To
          make
          certain decisions regarding tax matters pursuant to the terms of this Operating
          Agreement.

         

        (f) To
          approve the execution by TPL pursuant to the Commercialization Agreement
          of any
          license agreement, infringement claim settlement or other agreement with
          respect
          to the MSD Patents, the proposed terms of which do not fall within the
          guidelines for allowable license agreements and infringement claim settlements
          set forth in Exhibit C to the Commercialization Agreement.

         

        (g) To
          approve any modifications, amendments or waivers of the Commercialization
          Agreement, and any of the license or other agreements referred to therein
          to
          which the Company is a party.

         

        (h) To
          take
          or authorize such other actions on behalf of the Company as are consistent
          with
          Applicable Law and the fiduciary duties of the Managers and the
          Members.

         

        4.4 Officers.
          The
          Company shall have a President and Treasurer and such other officers as
          the
          Management Committee may determine. Any officer except the President and
          the
          Treasurer may hold more than one office concurrently. Except as set forth
          herein, the officers shall serve at the pleasure of the Management Committee.
          The Management Committee may determine a reasonable compensation to be
          paid to
          each officer so appointed. The officers shall exercise such powers as shall
          be
          determined or delegated from time to time by the Management
          Committee.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (a) President.
          The
          Company shall have a President with primary responsibility for and active
          charge
          of the management and supervision of the Company’s business and affairs. The
          President may execute in the name of the Company license agreements, settlement
          agreements, checks and other similar documents and instruments to the extent
          that such execution is consistent with and in furtherance of the Annual
          Business
          Plan, as well as such other documents and instruments otherwise authorized
          for
          execution by the Management Committee. For as long as the Commercialization
          Agreement is in effect, Robert K. Neilson shall be President of the
          Company.

         

        (b) Treasurer.
          The
          Company shall have a Treasurer as the principal financial officer and principal
          accounting officer of the Company who shall keep full and accurate accounts
          of
          receipts and disbursements in books belonging to the Company. The initial
          treasurer shall be [__________].

         

        4.5 Liability
          of Committee Members and Officers.
          The
          Managers and the officers shall not be liable to the Company or to any
          Member
          for any Damages suffered or sustained by the Company or any Member, as
          the case
          may be, unless the Damage results from the fraud, deceit, gross negligence,
          willful misconduct, breach of fiduciary duty, a knowing violation of law
          by a
          specific Manager or officer or a material breach of such Manager’s or officer’s
          obligations under this Operating Agreement, in which event only the Manager
          or
          officer who engaged in such conduct or behavior (and no other Manager or
          officer) shall be liable for the full extent of Damages suffered or sustained
          to
          the full extent permitted pursuant to this Agreement or provided by Applicable
          Law.

         

        4.6 Records,
          Audits and Reports.
          At the
          expense of the Company, proper and complete records and books of account
          shall
          be kept or shall be caused to be kept by the Management Committee (or a
          designee
          thereof) in which shall be entered fully and accurately all transactions
          and
          other matters relating to the Company’s business in the detail and completeness
          customary and usual for businesses of the type engaged in by the Company.
          The
          books and records shall at all times be maintained at the principal executive
          offices of the Company and shall be open to the inspection and examination
          of
          the Members or their duly authorized agents during business hours. At a
          minimum,
          the Company shall keep at its principal place of business:

         

        (a) A
          current
          list of the full name and last known business, residence or mailing address
          of
          each Member and Manager;

         

        (b) A
          copy of
          the Certificate of Formation and all amendments thereto, together with
          executed
          copies of any powers of attorney pursuant to which any amendment has been
          executed;

         

        (c) Copies
          of
          the Company’s federal, state and local income tax returns and reports, if any,
          for the four most recent years;

         

        (d) A
          copy of
          this Operating Agreement, as amended to date, any correspondence relating
          to any
          Member’s obligation to contribute cash, property or services, and copies of any
          financial statements of the Company for the three most recent years;
          and

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (e) Minutes
          of every meeting of the Management Committee, or any written consents of
          the
          Managers obtained in lieu of a meeting.

         

        The
          Management Committee shall maintain and preserve, during the term of the
          Company
          and for a period of five years thereafter, all accounts, books and other
          relevant Company documents.

         

        ARTICLE
          5

        CAPITAL
          CONTRIBUTIONS

         

        5.1 Initial
          Capital Contributions.
          Concurrently with the execution hereof, Patriot and TPL shall enter into
          the
          P-Newco License, TPL and T-Newco shall enter into the T-Newco License,
          T-Newco
          shall merge with and into the Company and each of the Members shall make
          the
          capital contributions set forth on Schedule 1
          hereto
          (collectively, the “Initial
          Capital Contributions”).
          The
          Initial Capital Contributions to the Company of each Member shall be deemed
          to
          have a Fair Market Value as set forth opposite such Member’s name on
Schedule 1
          hereto.

         

        5.2 Percentage
          Interests.
          Upon
          making its Initial Capital Contribution, and as a result of the merger
          contemplated by the Merger Agreement (as defined in the Master Agreement),
          TPL
          shall be issued Percentage Interests in the Company such that Patriot will
          no
          longer be the sole Member of the Company and the Members shall have the
          Percentage Interests set forth on Schedule 2
          hereto.
          Percentage Interests shall for all purposes be personal property. A Member
          has
          no interest in specific property of the Company.

         

        5.3 Working
          Capital Contributions.

         

        (a) Initial
          Working Capital Contribution.
          On the
          date hereof, Patriot and TPL shall each make an Initial Working Capital
          Contribution to the Company of Two Million Dollars ($2,000,000), for an
          aggregate Initial Working Capital Contribution of Four Million Dollars
          ($4,000,000).

         

        (b) Future
          Working Capital Contributions.
          At any
          time during the Fiscal Year at the discretion of the Management Committee,
          Patriot and TPL shall be obligated to make Working Capital Contributions
          in
          equal amounts in order to maintain a Working Capital Fund of not more than
          Eight
          Million Dollars ($8,000,000), and then only to the extent necessary to
          bring the
          balance of the Working Capital Fund to Eight Million Dollars ($8,000,000),
          provided,
          however,
          that
          neither TPL nor Patriot shall be required to contribute more than Two Million
          Dollars ($2,000,000) in any Fiscal Year.

         

        Except
          as
          provided in this Section 5.3,
          no
          Member shall be obligated to make any contribution of capital to the
          Company.

         

        5.4 Failure
          to Make Contributions.
          The
          failure of Patriot or TPL to make Working Capital Contributions when due
          pursuant to Section 5.3
          shall
          result in the following adjustments to that Member’s Percentage
          Interest:

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (a) For
          each
          One Dollar ($1) that is not contributed by Patriot or TPL when due pursuant
          to
Section 5.3,
          one
          hundred thousandth of a percent (0.00001%) of the outstanding Percentage
          Interests of the Company shall be deducted from that Member’s Percentage
          Interest and transferred to the other Member. As an example, if a Member
          failed
          to contribute One Million Dollars ($1,000,000) when due pursuant to Section 5.3,
          ten
          percent (10%) of the outstanding Percentage Interests of the Company would
          be
          deducted from that Member’s Percentage Interest and transferred to the other
          Member.

         

        (b) In
          the
          event that Patriot’s Percentage Interest falls below twenty-five percent (25%),
          Patriot shall lose the right to appoint the Patriot Appointee pursuant
          to
Section 4.2(a),
          and TPL
          shall have the right to appoint the Patriot Appointee, such that TPL shall
          have
          the right to appoint two (2) of the three (3) Managers. In the event that
          TPL’s
          Percentage Interest falls below twenty-five percent (25%), TPL shall lose
          the
          right to appoint the TPL Appointee pursuant to Section 4.2(b),
          and
          Patriot shall have the right to appoint the TPL Appointee, such that Patriot
          shall have the right to appoint two (2) of the three (3) Managers.

         

        5.5 Capital
          Accounts.
          A
          separate Capital Account shall be established and maintained for each
          Member.

         

        (a) Each
          Member’s Capital Account will be increased by:

         

        
          	 	
                  (i)

                	
                  The
                    Initial Capital Contribution by the Member to the Company pursuant
                    to
                    Section 5.1;

                

        

         

        
          	 	
                  (ii)

                	
                  The
                    Working Capital Contributions by the Member to the Company pursuant
                    to
                    Section 5.3;
                    and

                

        

         

        
          	 	
                  (iii)

                	
                  Each
                    Member’s pro
                    rata
                    allocation of the Company’s and each Member’s contributions to the Working
                    Capital Fund.

                

        

         

        (b) Each
          Member’s Capital Account will be decreased by:

         

        
          	 	
                  (i)

                	
                  The
                    amount of Net Cash Proceeds distributed to the Member by the
                    Company;

                

        

         

        
          	 	
                  (ii)

                	
                  The
                    Fair Market Value of property distributed to the Member by the
                    Company;
                    and

                

        

         

        
          	 	
                  (iii)

                	
                  Allocations
                    to the Member of Net Losses.

                

        

         

        (c) The
          manner in which Capital Accounts are to be maintained pursuant to this
          Section 5.5
          is
          intended to comply with the requirements of Section 704(b) of the Code and
          the Treasury Regulations promulgated thereunder. If, in the opinion of
          the
          Management Committee after consultation with the Company’s accountants, the
          manner in which Capital Accounts are to be maintained pursuant to the preceding
          provisions of this Section 5.5
          should
          be modified to comply with Section 704(b) of the Code and the Treasury
          Regulations thereunder, then, notwithstanding anything to the contrary
          contained
          in the preceding provisions of this Section 5.5,
          the
          method in which Capital Accounts are maintained shall be

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        so
          modified without any approval of the Management Committee; provided,
          however,
          that
          any change in the manner of maintaining Capital Accounts shall not materially
          alter the economic agreement between the Members.

         

        (d) No
          Member
          shall have any liability to restore all or any portion of a deficit balance
          in
          the Member’s Capital Account.

         

        ARTICLE 
          6

        DISTRIBUTIONS,
          ALLOCATIONS AND TAX MATTERS

         

        6.1 Application
          of Gross Cash Proceeds.

         

        (a) Application
          of Gross Cash Proceeds.
          Within
          sixty (60) days after the close of each of the Company’s fiscal quarters, the
          Company shall apply and distribute Gross Cash Proceeds in accordance with
          the
          following schedule of priorities:

         

        
          	 	
                  (i)

                	
                  First,
                    for the payment to TPL (or, in the case of any payment to satisfy
                    the
                    obligations of the Company under Section 4.2
                    of
                    the Commercialization Agreement, directly to the Person identified
                    by TPL)
                    in satisfaction of the Company’s payment obligations under Sections 4.2
                    and 4.3
                    of
                    the Commercialization Agreement;

                

        

         

        
          	 	
                  (ii)

                	
                  Next,
                    to the payment of any Company
                    Expenses;

                

        

         

        
          	 	
                  (iii)

                	
                  Next,
                    for the Working Capital Fund until the Working Capital Fund equals
                    Eight
                    Million Dollars ($8,000,000);

                

        

         

        
          	 	
                  (iv)

                	
                  Next,

                

        

         

        
          	 	
                  (1)

                	
                  for
                    payment to Patriot of an amount equal to ten percent (10%) of
                    the Gross
                    Cash Proceeds until Patriot shall have received Twenty Million
                    Dollars
                    ($20,000,000); and

                

        

         

        
          	 	
                  (2)

                	
                  for
                    payment to TPL of an amount equal to fifteen percent (15%) of
                    the Adjusted
                    Gross Cash Proceeds minus
                    any amounts previously advanced to TPL (and not previously credited
                    against payments to TPL hereunder) pursuant to Section 4.3
                    of
                    the Commercialization Agreement;
                    and

                

        

         

        
          	 	
                  (v)

                	
                  Finally,
                    the remaining Gross Cash Proceeds (such remaining amount, the
                    “Net
                    Cash Proceeds”)
                    to the Members according to their respective Percentage
                    Interests.

                

        

         

        In
          the
          event that funds sufficient to satisfy the payments required to be made
          pursuant
          to subsections (iv)(a) and (iv)(b) above are unavailable, such payment
          obligations shall be pari
          passu,
          and any
          unpaid amounts thereof shall be paid from Gross Cash Proceeds subsequently
          received by the Company.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (b) Distribution
          of Company Property.
          Company
          property shall be distributed only pursuant to Article
          VIII.

         

        (c) Withholdings.
          All
          amounts withheld pursuant to the Code or any provisions of state or local
          tax
          law with respect to any payment or distribution to the Members from the
          Company
          shall be treated as amounts distributed to the relevant Members pursuant
          to this
Section 6.1.

         

        6.2 Allocation
          of Net Profits.
          Subject
          to the provisions of Sections
          6.4 and 6.5,
          Net
          Profits for any Fiscal Year or other period shall be allocated to the Members
          according to their Percentage Interests.

         

        6.3 Allocation
          of Net Losses.
          Subject
          to the provisions of Sections 6.4
          and 6.5,
          Net
          Losses for any Fiscal Year or other period shall be allocated to the Members
          according to their Percentage Interests.

         

        6.4 General
          Rules for Allocations.
          The
          rules of this Section 6.4
          shall
          govern all allocations under this Article:

         

        (a) Except
          as
          otherwise provided in this Operating Agreement, an allocation of Net Profits
          or
          Net Losses shall be treated as an allocation between the Members of the
          same
          share of each item of income, gain, loss and deduction that is taken into
          account in computing such Net Profits or Net Losses, as the case may
          be.

         

        (b) If
          any
          Member is deemed to have received imputed income with respect to any property
          licensed or otherwise made available to the Company pursuant to this Operating
          Agreement, the corresponding imputed expenses to the Company arising out
          of such
          arrangement shall be specially allocated to such Member.

         

        (c) For
          purposes of determining the Net Profits or Net Losses allocable to any
          period,
          the Net Profits and Net Losses shall be determined on a daily, monthly
          or other
          basis, as determined by the Management Committee using any permissible
          method
          under Section 706 of the Code and the Treasury Regulations promulgated
          thereunder.

         

        6.5 Special
          Allocations to Capital Accounts.

         

        (a) Notwithstanding
          anything to the contrary contained in this Article 6, if there is a net
          decrease
          in Company Minimum Gain or in any Member Minimum Gain during any taxable
          year or
          other period, prior to any other allocation pursuant hereto, such Member
          shall
          be specially allocated items of income and gain for such year (and, if
          necessary, subsequent years) in an amount and manner required by Treasury
          Regulation Sections 1.704-2(f) or 1.704-2(i)(4). The items to be so
          allocated shall be determined in accordance with Treasury Regulation
          Section 1.704-2.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        (b) Nonrecourse
          Deductions for any taxable year or other period shall be allocated (as
          nearly as
          possible) under Treasury Regulation Section 1.704-2 to the Members, pro
          rata in proportion to their respective Percentage Interests.

         

        (c) Any
          Member Nonrecourse Deductions for any taxable year or other period shall
          be
          allocated to the Member that made, or guaranteed or is otherwise liable
          with
          respect to the loan to which such Member Nonrecourse Deductions are attributable
          in accordance with principles under Treasury Regulation
          Section 1.704-2(i).

         

        (d) Any
          Member who unexpectedly receives an adjustment, allocation or distribution
          described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or
          (6) which causes or increases a negative balance in his or its Capital
          Account
          shall be allocated items of income and gain sufficient to eliminate such
          increase or negative balance caused thereby, as quickly as possible, to
          the
          extent required by such Treasury Regulation.

         

        (e) No
          allocation or loss or deduction shall be made to any Member if, as a result
          of
          such allocation, such Member would have an Adjusted Capital Account Deficit.
          Any
          such disallowed allocation shall be made to the Members entitled to receive
          such
          allocation under Treasury Regulation Section 1.704 in proportion to their
          respective Percentage Interests. If losses or deductions are reallocated
          under
          this subsection 6.5(e), subsequent allocations of income and losses (and
          items
          thereof) shall be made so that, to the extent possible, the net amount
          allocated
          under this subsection 6.5(e) equals the amount that would have been allocated
          to
          each Member if no reallocation had occurred under this subsection
          6.5(e).

         

        (f) For
          purposes of Section 752 of the Code and the Treasury Regulations thereunder,
          excess nonrecourse liabilities (within the meaning of Treasury Regulations
          Section 1.752-3(a)(3)) shall be allocated to the Members pro rata in proportion
          to their respective Percentage Interests.

         

        (g) The
          allocations contained in Sections 6.5(a), 6.5(c), 6.5(d) and 6.5(e) (the
“Regulatory Allocations”) are intended to comply with certain requirements of
          Treasury Regulation Sections 1.704-1 and 1.704-2. The Regulatory
          Allocations shall be taken into account in allocating Net Profit and Net
          Loss
          and other items of income, gain, loss and deduction among the Members so
          that to
          the extent possible, the allocations contained in this Agreement other
          than the
          Regulatory Allocations and the Regulatory Allocations made to each Member
          shall
          equal the net amount that would have been allocated to each Member had
          the
          Regulatory Allocations not occurred. The Management Committee shall take
          account
          of the fact that certain of the Regulatory Allocations will occur at a
          period in
          the future for purposes of applying this Section 6.5(g).

         

        6.6 Tax
          Allocations; Section 704(c) of the Code.

         

        (a) Except
          as
          otherwise provided in this Section 6.6,
          for
          income tax purposes, each item of income, gain, loss, and deduction of
          the
          Company shall be allocated among the Members in accordance with the manner
          in
          which the equivalent items of Net Profits and Net Losses were allocated
          under
          the preceding sections of this Article VI.

         

        (b) In
          the
          event the Book Value of a Company asset differs from its adjusted federal
          income
          tax basis, then all allocations of income, gain, loss and deduction with
          respect

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        to
          such
          asset shall take into account any variation between the adjusted tax basis
          of
          such asset and its Book Value. Such allocations shall be made under the
          principles of Sections 704(b) and 704(c) of the Code and the Treasury
          Regulations thereunder and are intended to eliminate, to the extent possible,
          disparities that otherwise exist between the balances of the Members’ Capital
          Accounts, as maintained by the Company, and such balances had the Capital
          Accounts been maintained in accordance with tax accounting principles.
          It is
          intended, for example, that any taxable gain recognized by the Company
          upon the
          disposition of property contributed by a Member to the Company shall be
          allocated to the contributing Member to the extent that the property’s initial
          Book Value exceeded its adjusted income tax basis on the date of the
          contribution, with any excess taxable gain being allocated to the Members
          (including the contributing Member) in a manner that coincides with the
          corresponding allocation of “book” gain. Any elections, accounting conventions
          or other decisions relating to such allocations shall be made by the Management
          Committee in a manner that (i) reasonably reflects the purposes and
          intention of this Operating Agreement, and (ii) complies with
          Sections 704(b) and 704(c) of the Code and the Treasury Regulations
          thereunder. The Management Committee shall determine the method set forth
          in
          Treasury Regulation Section 1.704-3c to be used for allocating such
          terms.

         

        6.7 Tax
          Matters Member.

         

        (a) At
          such
          time as it deems necessary, the Management Committee shall elect the “Tax
          Matters Member” of the Company for purposes of Section 6231(a)(7) of the
          Code. The Tax Matters Member shall have the power to manage and control,
          on
          behalf of the Company, any administrative proceeding at the Company level
          with
          the Internal Revenue Service relating to the determination of any item
          of
          Company income, gain, loss, deduction or credit for federal income tax
          purposes.

         

        (b) The
          Tax
          Matters Member shall, within ten (10) days of the receipt of any notice
          from the Internal Revenue Service in any administrative proceeding at the
          Company level relating to the determination of any Company item of income,
          gain,
          loss, deduction or credit, mail a copy of such notice to the other
          Members.

         

        6.8 Section 754
          Election.
          The Tax
          Matters Member may, in its discretion, make, on behalf of the Company,
          an
          election in accordance with Section 754 of the Code so as to adjust the
          basis of Company property in the case of a distribution of property within
          the
          meaning of Section 734 of the Code, and in the case of a transfer of a
          Member’s Percentage Interest within the meaning of Section 743 of the Code.
          Each Member shall, upon the request of the Tax Matters Member, furnish
          such
          information as the Tax Matters Member shall deem necessary or appropriate
          to
          give effect to such election.

         

        6.9 Returns
          and Other Elections.
          The
          Chief Financial Officer shall cause the preparation and timely filing all
          tax
          returns required to be filed by the Company pursuant to the Code and all
          other
          tax returns deemed necessary and required in each jurisdiction in which
          the
          Company does business. Copies of those returns, or pertinent information
          from
          the returns, shall be furnished to the Members within a reasonable time
          after
          the end of the Company’s fiscal year. All elections permitted to be made by the
          Company

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        under
          federal or state laws shall be made by the Chief Financial Officer, provided
          that the
          Management Committee may direct the Chief Financial Officer to make or
          refrain
          from making any tax election.

         

        6.10 Partnership
          Tax Treatment.
          The
          Members expect and intend that the Company shall be treated as a partnership
          for
          all federal and state income tax purposes, and the Members agree that they
          will
          not: (a) take a position on any federal, state, local or other tax return,
          or otherwise assert a position, inconsistent with such expectation and
          intent;
          or (b) elect for the Company to be treated as an association for tax
          purposes or do any other act or thing which could cause the Company to
          be
          treated as other than a partnership for federal income tax
          purposes.

         

        ARTICLE
          7

        INDEMNIFICATION
          AND LIMITATION OF LIABILITY

         

        7.1 Indemnification.

         

        (a) To
          the
          fullest extent permitted by the Act and by law, the Members, Managers,
          officers
          and employees of the Company, as well as their respective Representatives
          (collectively, “Indemnitees”)
          shall,
          in accordance with this Section 7.1,
          be
          indemnified, protected, held harmless and defended by the Company from
          and
          against any and all Damages and Liabilities by reason of their management
          of, or
          involvement in, the affairs of the Company, or rendering of advice or
          consultation with respect thereto, or which relate to the Company, its
          properties, business or affairs, if such Indemnitee acted in good faith
          and in a
          manner such Indemnitee reasonably believed to be in, or not opposed to,
          the best
          interests of the Company.

         

        (b) If
          any
          Indemnitee shall believe that such Indemnitee is entitled to indemnification
          pursuant to this Article 7
          in
          respect of any Damages or Liabilities, such Indemnitee shall give the Company
          prompt written notice thereof. Any such notice shall set forth in reasonable
          detail and to the extent then known the basis for such claim for
          indemnification. The failure of such Indemnitee to give notice of any claim
          for
          indemnification promptly shall not adversely affect such Indemnitee’s right to
          indemnity hereunder except to the extent that such failure adversely affects
          the
          right of the Company to assert all reasonable defenses to such claim. Each
          such
          claim for indemnity shall expressly state that the Company shall have only
          the
          thirty (30) calendar day period referred to in the next sentence to dispute
          or
          deny such claim. The Company shall have thirty (30) calendar days following
          its
          receipt of such notice either (y) to acquiesce in such claim and the
          responsibility to indemnify the Indemnitee in respect thereof in accordance
          with
          the terms of this Article 7
          by
          giving such Indemnitee written notice of such acquiescence or (z) to object
          to the claim by giving such Indemnitee written notice of the objection.
          If the
          Company does not object thereto within such thirty (30) calendar day period,
          the
          Company shall be deemed to have acquiesced in such claim and the responsibility
          to indemnify the Indemnitee in respect thereof in accordance with the terms
          of
          this Article 7.

         

        (c) In
          connection with any claim which may give rise to indemnity under this
Article 7
          resulting from or arising out of any claim or Proceeding against an Indemnitee
          by a

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Person
          that is not a party hereto, the Company may (unless such Indemnitee elects
          not
          to seek indemnity hereunder for such claim), upon written notice sent at
          any
          time to the relevant Indemnitee, assume the defense of any such claim or
          Proceeding if the Company with respect to such claim or Proceeding acknowledges
          to the Indemnitee the Indemnitee’s right to indemnity pursuant hereto in respect
          of the entirety of such claim (as such claim may have been modified through
          written agreement of the parties or arbitration hereunder) and provide
          assurances, reasonably satisfactory to such Indemnitee, that the Company
          will be
          financially able to satisfy such claim in full if such claim or Proceeding
          is
          decided adversely. The Company shall select counsel reasonably acceptable
          to
          such Indemnitee to conduct the defense of such claim or Proceeding, shall
          take
          all steps reasonably necessary in the defense or settlement thereof and
          shall at
          all times diligently and promptly pursue the resolution thereof. If the
          Company
          shall have assumed the defense of any claim or Proceeding in accordance
          with
          this Section 7,
          the
          Company shall not (without the written consent of each Indemnitee) consent
          to a
          settlement of, or the entry of any judgment arising from, any such claim
          or
          Proceeding, unless such settlement or order shall provide for the unconditional
          release of all Indemnitees. If the Company has so elected to assume the
          defense,
          each Indemnitee shall be entitled to participate in (but not control) the
          defense of any such action, with its own counsel and at its own expense.
          Each
          Indemnitee shall, and shall cause each of its Representatives to, cooperate
          fully with the Company in the defense of any claim or Proceeding being
          defended
          by the Company pursuant to this Section 7.
          If the
          Company does not assume the defense of any claim or Proceeding resulting
          therefrom in accordance with the terms of this Section 7,
          such
          Indemnitee may defend against such claim or Proceeding in such manner as
          it may
          deem appropriate, provided
          that the
          Indemnitee may not settle such claim or Proceeding without the written
          consent
          of the Company (which consent shall not be unreasonably withheld or delayed),
          and provided
          further
          that the
          Company shall be obligated to pay Indemnitee’s attorneys’ fees and costs
          promptly as they are incurred in the defense of such claim or
          Proceeding.

         

        (d) The
          indemnification provided by this Section 7.1
          shall
          not be deemed to be exclusive of any other rights to which any Person may
          be
          entitled under any agreement, or as a matter of law, or otherwise, both
          as to
          action in a Person’s official capacity and to action in another
          capacity.

         

        (e) The
          Management Committee shall have power to purchase and maintain insurance
          on
          behalf of the Company, the Managers, the Members, officers, employees or
          agents
          of the Company and any other Indemnitees at the expense of the Company,
          against
          any liability asserted against or incurred by them in any such capacity
          whether
          or not the Company would have the power to indemnify such Persons against
          such
          liability under the provisions of this Operating Agreement.

         

        7.2 Limitation
          of Liability.
          The
          debts, obligations and liabilities of the Company shall be solely the debts,
          obligations and liabilities of the Company; and, except as provided under
          the
          Act, no Manager or Member shall be obligated personally for any such debt,
          obligation or liability of the Company solely by reason of being a Manager
          or
          Member of the Company.

         

        7.3 Savings
          Clause.
          If this
Article 7
          or any
          portion hereof shall be invalidated on any ground by any court of competent
          jurisdiction, the Company shall nevertheless indemnify and hold harmless
          each
          Indemnitee or any other person indemnified pursuant to this Article 7
          as to
          costs, charges and expenses (including, without limitation, reasonable
          attorneys’ fees), judgments, fines and amounts paid in settlement with respect
          to any action, suit or proceeding, whether civil, criminal, administrative
          or
          investigative, to the full extent permitted by any applicable portion of
          this
Article 7
          that
          shall not have been invalidated and to the fullest extent permitted by
          applicable law.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        ARTICLE
          8

        DISSOLUTION
          AND WINDING UP

         

        8.1 Dissolution.
          The
          Company shall be dissolved, its assets shall be disposed of, and its affairs
          wound up on the first to occur of the following:

         

        (a) The
          written agreement of Members holding at least seventy-five percent (75%)
          of the
          Percentage Interests to dissolve the Company; or

         

        (b) The
          entry
          of a decree of judicial dissolution under Section 18-802 of the
          Act.

         

        Except
          for the foregoing, the Company shall not dissolve on the occurrence of
          any other
          event.

         

        8.2 Winding
          Up.
          Upon
          the occurrence of any event specified in Section 8.1,
          the
          Management Committee promptly shall notify each of the Members, and the
          Company
          shall continue solely for the purpose of, and immediately begin the process
          of,
          winding up its affairs in an orderly manner, liquidating its assets, and
          satisfying the claims of its creditors. The Management Committee shall
          promptly
          appoint a Person to act as the liquidator of the Company (the “Liquidator”)
          who
          shall be responsible for overseeing the winding up and liquidation of the
          Company pursuant to the terms of this Operating Agreement. The Liquidator
          shall
          give written notice of the commencement of winding up by mail to all known
          creditors and claimants whose addresses appear on the records of the
          Company.

         

        8.3 Reversion
          of Rights.
          Upon
          the occurrence of any event specified in Section 8.1, or upon the valid
          termination of the Commercialization Agreement by the Company, all of the
          rights
          granted by each of Patriot and TPL to the Company pursuant to the P-Newco
          License and T-Newco License, respectively, shall immediately and without
          further
          action by any of the parties thereto revert in their entirety to each of
          Patriot
          and TPL, respectively.

         

        8.4 Order
          of Payment Upon Liquidation.
          Immediately after the reversion of rights contemplated by Section 8.3
          above,
          payment shall be made in the manner contemplated by Section 6.1.

         

        8.5 Antecedent
          Activities.

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        (a) The
          occurrence of any Recovery Event within twelve (12) months of a Termination
          Event, as defined in Section 6.2 of the Commercialization Agreement, shall
          entitle each of the Members to payment of the proceeds of such Recovery
          Event in
          accordance with Section 6.1.

         

        (b) The
          entitlements set forth in Section 8.5(a)
          shall
          vest in the Members without further action. All proceeds and incidents
          of any
          such Recovery Event shall be transferred by the Member receiving such proceeds
          within three (3) Business Days (as defined in the Master Agreement) after
          receipt of such proceeds directly into an independent escrow account approved
          by
          Patriot and TPL for distribution pursuant to the terms of this Operating
          Agreement and the joint instructions of Patriot and TPL.

         

        8.6 Limitations
          on Payments Made in Dissolution.
          Each
          Member shall only be entitled to look to the assets of the Company for
          the
          return of its Initial Capital Contribution, Working Capital Contribution
          and
          positive Capital Account balance and shall have no recourse for its Initial
          Capital Contribution, Working Capital Contribution, positive Capital Account
          balance and/or share of Gross Cash Proceeds (upon dissolution or otherwise)
          against the Management Committee or any other Member in the event the assets
          of
          the Company remaining after payment of or due provision for all debts,
          liabilities and obligations of the Company are insufficient to return such
          Member’s Initial Capital Contribution and positive Capital Account
          balance.

         

        8.7 Certificate
          of Cancellation.
          When
          all debts, liabilities and obligations have been paid and discharged or
          adequate
          provisions have been made therefor and all of the remaining property and
          assets
          have been distributed to the Members, a certificate of cancellation shall
          be
          executed in duplicate and verified by all three (3) Managers, which
          certificate shall set forth the information required by the Act. Duplicate
          originals of the certificate of cancellation shall be delivered to the
          Secretary
          of State of the State of Delaware.

         

        8.8 Effect
          of Filing Certificate of Cancellation.
          Upon
          the issuance of the certificate of cancellation, the existence of the Company
          shall cease. The Management Committee shall have the authority to distribute
          any
          Company property discovered after dissolution and take such other action
          as may
          be necessary on behalf of and in the name of the Company.

         

        ARTICLE
          9

        MISCELLANEOUS

         

        9.1 Amendment.
          The
          Management Committee shall have the duty and authority to amend the Certificate
          of Formation as and to the extent necessary to reflect any and all changes
          or
          corrections necessary or appropriate as a result of any action taken by
          the
          Members in accordance with the terms of this Operating Agreement. Members
          holding at least seventy-five percent (75%) of the Percentage Interests
          shall
          have the authority to amend this Operating Agreement. Notwithstanding anything
          to the contrary set forth herein, neither the Management Committee nor
          the
          Members may amend the Certificate of Formation or this Operating Agreement
          to
          decrease the Percentage Interest of a

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Member,
          increase the Working Capital Contributions of a Member or the liability
          of a
          Member with respect to the Company without the consent of each Member affected
          thereby.

         

        9.2 Governing
          Law and Severability.
          This
          Operating Agreement shall, in all respects, be construed in accordance
          with and
          governed by the laws of the State of Delaware as applied to agreements
          among
          Delaware residents entered into and to be performed entirely within Delaware.
          If
          any provision of this Operating Agreement becomes or is deemed invalid,
          illegal
          or unenforceable in any jurisdiction by reason of the scope, extent or
          duration
          of its coverage, then such provision shall be deemed amended to the extent
          necessary to conform to applicable law so as to be valid and enforceable
          or, if
          such provision cannot be so amended without materially altering the intention
          of
          the parties, then such provision shall be stricken and the remainder of
          this
          Operating Agreement shall continue in full force and effect. Should there
          ever
          occur any conflict between any provision contained in this Operating Agreement
          and any present or future statute, law, ordinance or regulation contrary
          to
          which the parties have no legal right to contract, the latter shall prevail,
          but
          the provision of this Operating Agreement affected thereby shall be curtailed
          and limited only to the extent necessary to bring it into compliance with
          the
          law. All the other terms and provisions of this Operating Agreement shall
          continue in full force and effect without impairment or limitation.

         

        9.3 Counterparts.
          This
          Operating Agreement may be executed simultaneously in multiple counterparts
          and
          by facsimile, each of which shall be deemed an original, but all of which
          taken
          together shall constitute one and the same instrument.

         

        9.4 Titles
          and Subtitles.
          The
          headings of this Operating Agreement are inserted for convenience only
          and shall
          not constitute a part of this Operating Agreement in construing or interpreting
          any provision hereof.

         

        9.5 Notices.
          All
          notices and other communications required or permitted under this Operating
          Agreement shall be delivered to the parties at the address appearing on
          the
          books of Company, or at such other address that they designate by notice
          to all
          other parties in accordance with this section. All notices and communications
          shall be deemed to have been received unless otherwise set forth herein:
          (a) in the case of personal delivery, on the date of such delivery;
          (b) in the case of facsimile transmission, on the date on which the sender
          receives confirmation by facsimile transmission that such notice was received
          by
          the addressee, provided
          that a
          copy of such transmission is additionally sent by mail as set forth in
          (d) below; (c) in the case of overnight air courier, on the second
          business day following the day sent, with receipt confirmed by the courier;
          and
          (d) in the case of mailing by first class certified or registered mail,
          postage prepaid, return receipt requested, on the fifth business day following
          such mailing.

         

        9.6 Entire
          Agreement.
          This
          Operating Agreement, as well as the Stipulated Final Judgment, Master Agreement,
          Commercialization Agreement and Newco Licenses, constitutes the entire
          agreement
          and

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        understanding
          of the parties with respect to the terms and conditions of the transactions
          referred to herein and therein and supersede all prior and contemporaneous
          agreements and understandings, oral or written, between the parties relating
          to
          such subject matter, other than as provided herein and therein.

         

        9.7 Power
          of Attorney.
          By
          signing this Operating Agreement, each Member designates and appoints the
          Management Committee as their true and lawful attorney, in his name, place
          and
          stead, to make, execute, sign and file such instruments, documents or
          certificates which may from time to time be required by the laws of the
          United
          States of America and the State of Delaware and any political subdivision
          thereof or any other state or political subdivision in which the Company
          shall
          do business to carry out the purposes of this Operating Agreement, except
          where
          such action requires the express approval of a Member hereunder. The Management
          Committee shall provide to the Members copies of all documents executed
          pursuant
          to the power of attorney contained in this Section 9.7.

         

        9.8 Related
          Party Transactions.
          The
          Company shall not, without the approval of the Management Committee, engage
          in
          any loans, leases, contracts or other transactions with any Manager, officer
          or
          key employee of the Company, any member of any such person’s immediate family,
          including the parents, spouse, children and other relatives of any such
          person,
          or any Person controlled by such person, with the exception of the payments
          to
          be made to TPL pursuant to Article IV
          of the
          Commercialization Agreement.

         

        9.9 Dispute
          Resolution.
          All
          rights and obligations under this Operating Agreement shall be resolved
          as if
          all persons and all transactions related to this Operating Agreement had
          their
          legal residence, situs, and employment in Santa Clara County, California.
          Within
          fifteen (15) days after written notice of the dispute, members of the most
          senior management of the parties shall meet and exercise their best efforts
          to
          resolve any dispute under this Operating Agreement. If the dispute is not
          resolved to the mutual satisfaction of the parties within thirty (30) days
          after
          such notice, the Company, Patriot and TPL shall submit such dispute to
          expedited
          binding arbitration before a single arbitrator. The arbitration shall be
          administered by JAMS pursuant to its Comprehensive Arbitration Rules and
          Procedures. Judgment on the award, including without limitation injunctive
          relief, may be entered in any court having jurisdiction. All costs related
          to
          such arbitration shall be paid in advance by the Company, including the
          cost of
          translating into English all discoverable materials, and of providing
          contemporaneous translation of all live testimony. All performances due
          hereunder by the Company, Patriot and TPL shall continue unabated throughout
          the
          entire process and a final adjudication in accordance with the terms hereof
          has
          been made from which no appeal or review can be undertaken. This clause
          shall
          not preclude the parties from seeking provisional remedies in aid of
          arbitration, including without limitation a temporary or preliminary injunctive
          relief, from a court of appropriate jurisdiction. The arbitrator may, in
          the
          award, allocate all or part of the costs of the arbitration, including
          the fees
          of the arbitrator and the reasonable attorneys’ fees of the prevailing
          party.

         

        9.10 No
          Partition.
          No
          Member nor any legal successor of a Member shall have the right to partition
          the
          property of the Company or any part thereof or interest therein, or to
          file a
          complaint or institute any proceeding at law or in equity to partition
          the
          property of the Company or any part thereof or interest therein. Each Member,
          for such Member and such Member’s legal successor, hereby waives any such
          rights. The Members intend that, during the term of this Operating Agreement,
          the rights of the Members and their successors in interest, as among themselves,
          shall be governed solely by the terms of this Operating Agreement and by
          the
          Act.

         

        9.11 Bankruptcy.
          Neither
          the Management Committee, nor any Manager or Member of the Company, shall
          be
          permitted to file a bankruptcy petition on behalf of the Company unless
          the
          filing of the bankruptcy petition shall first have been approved in writing
          by
          Members holding at least seventy-five percent (75%) of the Percentage Interests
          of the Company.

         

        [signature
          page follows]

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        IN
          WITNESS WHEREOF, the parties hereto have executed this Operating Agreement
          as of
          the day and year first above written.

         

        
          	
                  PATRIOT
                    SCIENTIFIC CORPORATION,
a
                    Delaware corporation

                   

                  By:________________________________________

                  Its:________________________________________

                
	 
	 
	
                  TECHNOLOGY
                    PROPERTIES LIMITED INC.,
a California corporation

                   

                  By:________________________________________

                  Daniel
                    E. Leckron

                  Its: 
                    Chairman

                

        

         

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        SCHEDULE
          1

         

        INITIAL
          CAPITAL CONTRIBUTIONS

         

         

        
          	
                  MEMBER

                	 	
                  CONTRIBUTIONS

                	 	
                  AGGREGATE
                    FAIR MARKET VALUE OF CONTRIBUTIONS

                
	
                  Patriot
                    Scientific Corporation

                	 	
                  · P-Newco
                    License

                  · $2,000,000

                	 	 
	
                  Technology
                    Properties Limited Inc.

                	 	
                  · T-Newco
                    License

                  · $2,000,000

                	 	 

        

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          2

         

        PERCENTAGE
          INTERESTS

         

        

         

        
          	
                  MEMBER

                	 	
                  PERCENTAGE
                    INTEREST

                
	
                  Patriot
                    Scientific Corporation

                	 	
                  50%

                
	
                  Technology
                    Properties Limited Inc.

                	 	
                  50%

                

        

         

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        EXHIBIT
          A

         

         

        CONSENT
          OF CHARLES H. MOORE

        TO

        LIMITED
          LIABILITY OPERATING AGREEMENT

        OF

        P-NEWCO

        A
          DELAWARE LIMITED LIABILITY COMPANY

        

         

        Charles
          H. Moore (“Moore”) does hereby affirm and acknowledge that:

         

        (a) Moore
          has
          read and reviewed the accompanying Limited Liability Company Operating
          Agreement
          (the “P-Newco Operating Agreement”) for P-Newco, a Delaware Limited Liability
          Company (“P-Newco”) and is familiar with the contents thereof;

         

        (b) Technology
          Properties Limited Inc., a California Corporation, has full power and authority
          to enter into the P-Newco Operating Agreement insofar as it affects the
          interests of Moore in the microprocessor science and design patents set
          forth on
          Schedule 1 to the Master Agreement, to which Moore is a party;
          and

         

        (c) Moore
          consents to the P-Newco Operating Agreement.

         

        IN
          WITNESS WHEREOF, Moore has executed this Consent as of the [__] day of
          [__________], 2005.

         

        CHARLES
          H. MOORE

         

        ________________________________________

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        EXHIBIT
          C

         

        
          
            NEWCO
              LICENSE

            

            This
              License ("License") is entered into by and between ______________ (“___”) as the
              Licensor on the one hand, and NewCo as the Licensee ("NewCo") on the
              other hand,
              as a part of that certain _________ ("__Ag”) entered into between the parties
              contemporaneously herewith.

            

            NOW
              THEREFORE, for and in consideration of the mutual cove-nants herein
              contained as
              well as of other good and valuable consideration the receipt and sufficiency
              of
              which is hereby acknowledged, it is covenanted and agreed by and between
              the
              parties hereto that:

            

            1. Subject
              Matter.

            

            1.1. The
              patents described in the Schedule of Patents at Attachment I hereof,
              sometimes
              collectively referred to as the “Licensed Patents”. 

            

            2. Grant
              of License.

            

            2.1.
              ____
              hereby grants unto NewCo an exclusive, personal, and non-transferable,
              worldwide
              right and license:

            

            2.1.1.
              To
              grant sublicenses to make, have made, use, sell, and import products
              utilizing
              the Licensed Patents; and,

            

            2.1.2.
              To
              sue either in its own name or jointly with Licensor if required by
              law, and to
              pursue for the use and benefit of NewCo: (i) all remedies of whatsoever
              kind or
              nature with respect to the protection, use, and enforcement of the
              Licensed
              Patents; (ii) the collection of all claims for damages, profits, and
              awards
              relating to the past, present, or future use or ownership of the Licensed
              Patents; and (iii) all equitable relief available in connection therewith.
              

            

            2.2.
              Provided, however, that ___ shall for all purposes be deemed to have
              retained a
              non-exclusive, worldwide, irrevocable right and license:

            

            2.2.1
              To
              utilize the Licensed Patents on a royalty-free basis to make, have
              made, use,
              sell and/or import products that are designed, manufactured, and sold
              by ___
              under brand names currently owned or subsequently originated and owned
              by ___;
              and,

            

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

            2.2.2.
              To
              utilize the Licensed Patents on a royalty-bearing basis to make, have
              made, use,
              sell and/or import products that are not designed, manufactured, and
              sold by
              ___under brand names currently owned or subsequently originated and
              owned by
              ___.

            

            3. Royalty.
              

            

            3.1.
              ___
              shall be entitled to receive as a royalty under this License that certain
              portion of the Net Recovery realized from the commercialization of
              the Licensed
              Patents which is provided for and payable under the terms of the __
              Ag entered
              into contemporaneously herewith.

            

            3.2.
              _____ shall pay to NewCo a royalty for all products described in section
              2.2.2.
              which is fair, reasonable, non-discriminatory, and within the terms
              of NewCo's
              standard licensing programs then in effect.

            

            4.
              Dispute
              Resolution

            

            4.1.
              All
              rights and obligations under this Agreement shall be resolved as if
              all persons
              and all transactions related to this Agreement had their legal residence,
              situs,
              and employment in Santa Clara County, California. Within 15 days after
              written
              notice of the dispute, members of the most senior management of the
              parties
              shall meet and exercise their best efforts to resolve any dispute under
              the
              Agreement. If the dispute is not resolved to the mutual satisfaction
              of the
              parties within 30 days after such notice, NewCo shall as requested
              by ____,
              either:

            

            4.1.1.
              Submit such dispute to expedited binding arbitration under the rules
              of the
              American Arbitration Association with discovery in general accordance
              with the
              Federal Rules of Civil Procedure. All costs related to such Arbitration
              shall be
              paid in advance by NewCo, including the cost of translating into English
              all
              discoverable materials, and of providing contemporaneous translation
              of all live
              testimony; or,

            

            4.1.2.
              Submit such dispute to the Superior Court of Santa Clara
              County, California, for resolution by Summary Judgment and/or trial
              by jury as
              directed by the said Court. 

            

            4.2.
              At
              ______'s option, NewCo shall submit any issue of validity to the issuing
              patent
              office in a Petition for Reexamination or comparable proceeding. The
              outcome
              shall be binding on the parties unless appealed by _______.

            

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

            4.3.
              In
              either case, all performances due hereunder by NewCo shall continue
              unabated
              throughout the entire process and a final adjudication in accordance
              with the
              terms hereof has been made from which no appeal or review can be
              undertaken.

            

            5.
              General.

            

            5.1. In
              no
              event shall any right, duty, or privilege arising hereunder be assigned
              by
              either party to an entity which it does not own and control, without
              the prior
              written consent of the other party. Any attempted or purported assignment
              without such consent shall be voidable at the option of the non-consenting
              party.

            

            5.2. Any
              covenant requiring a party to perform or provide an act or service
              shall be
              construed to impose upon such party the burden of the cost thereof
              unless
              otherwise provided for herein.

            

            5.3. Section
              titles are intended only to aid and assist the reader as an index device
              and are
              not intended to be descriptive of the contents of the section or to
              be used for
              construction or interpretation.

            

            5.4. The
              failure of any provision of this Agreement by virtue of its being construed
              as
              invalid or otherwise unenforceable shall render the entire Agreement
              cancelable
              at the option of the party asserting the enforceability of the said
              provision.

            

            5.5. All
              notices shall be in writing and effective upon delivery or upon posting
              by
              certified mail, return receipt requested, addressed as follows (or
              such other
              address as may be hereafter designated):

            

              
                	
                        If
                          to ______:

                      	
                        If
                          to NewCo:

                      
	
                        ______________________

                      	
                        ______________________
                          

                      
	
                        (address)

                      	
                        (address)

                      

              

            

            

            5.5. This
              Agreement together with its exhibits and attachments contains the entire
              agreement between the parties and supersedes any and all other agreements
              between them relating to the subject matter hereof.

            

            6. Attachments.
              

            

            
              
                6.1.
                  Attachment
                  I: Schedule of Patents

              

            

            

            
              
                
                

              

              
                
                

                
                  

                

              

              
                
                

              

            

            

            IN
              WITNESS WHEREOF, the parties have hereunto set their hands and seals
              as of the
              date of the execution hereof by the last signatory hereto. 

             

            
              
                	
                        ____________________________

                      	
                        NEWCO

                      
	 	 
	 	 
	
                        by
                          ____________________________

                      	
                        by
                          ____________________________

                      
	
                         
                          ___________________________

                      	
                         
                          __________________________

                      
	 	 
	 	 
	 	 
	
                        date:
                          _________________________

                      	
                        date:
                          _______________________

                      

              

               

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

                

                  ATTACHMENT
                    I (For ___Ag)

                  SCHEDULE
                    OF PATENTS

                

              

            

          

        

      

      
         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        EXHIBIT
          D

      

       

      

       

      COMMERCIALIZATION
        AGREEMENT

       

      by
        and among

       

      P-NEWCO

       

      and

       

      TECHNOLOGY
        PROPERTIES LIMITED

       

      and

       

      PATRIOT
        SCIENTIFIC CORPORATION

       

      

       

      

       

      

       

      

       

      
        	
                ***

              	
                Indicates
                  material omitted pursuant to an application for confidential treatment
                  and
                  that material has been filed separately with the
                  Commission.

              

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      Page

      
        
          	 	 
	
                  ARTICLE
                    1 GRANT

                	
                  1

                
	
                  ARTICLE
                    2 COMMERCIALIZATION

                	
                  2

                
	
                  ARTICLE
                    3 COVENANTS

                	
                  3

                
	
                  ARTICLE
                    4 PAYMENT ***

                	
                  4

                
	
                  ARTICLE
                    5 TERM

                	
                  5

                
	
                  ARTICLE
                    6 TERMINATION

                	
                  5

                
	
                  ARTICLE
                    7 REPRESENTATIONS AND WARRANTIES

                	
                  6

                
	
                  ARTICLE
                    8 GENERAL

                	
                  7

                

        

         

      

      
        
          	
                  EXHIBIT
                    A

                	
                  GRANT
                    & SCHEDULE OF PATENTS

                
	
                  SCHEDULE
                    1

                	
                  SCHEDULE
                    OF PATENTS

                
	
                  SCHEDULE
                    2

                	
                  PROJECT
                    DESCRIPTION ***

                
	
                  SCHEDULE
                    3

                	
                  SCHEDULE
                    OF OUTSTANDING
                    ACTIVITIES/RIGHTS/CLAIMS

                

        

      

      
         

        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      COMMERCIALIZATION
        AGREEMENT

      

      This
        Commercialization Agreement (“Commercialization
        Agreement”)
        is
        entered into by and among [P-Newco], a Delaware limited liability corporation
        (“P-Newco”),
        Patriot Scientific Corporation, a Delaware corporation (“Patriot”),
        having its principal place of business at 10989 Via Frontera, San Diego,
        California 92127, and Technology Properties Limited Inc., a California
        Corporation (“TPL”),
        having its principal place of business at 21730 Stevens Creek Boulevard,
        Ste.
        201, Cupertino, California 95014. Capitalized terms used but not defined
        herein
        shall have the meanings given to such terms in that certain agreement dated
        as
        of June 7, 2005 (the “Master Agreement”).

       

      WHEREAS,
        Patriot, TPL and Charles H. Moore (“Moore”)
        collectively hold all rights with respect to certain microprocessor
        implementation and architecture patents set forth on Schedule
        1
        (the
“MSD
        Patents”);

       

      WHEREAS,
        Moore has transferred complete authority for the management of Moore’s rights to
        the MSD Patents to TPL;

       

      WHEREAS,
        Patriot, TPL and Moore have entered into the Master Agreement, pursuant to
        which
        Patriot and TPL are entering into licenses with P-Newco and T-Newco,
        respectively, with respect to certain of their rights in the MSD Patents
        (collectively, the “Newco
        Licenses”);

       

      WHEREAS,
        Patriot, TPL, P-Newco and T-Newco have entered into a Merger Agreement, pursuant
        to which T-Newco merged with and into P-Newco, with P-Newco continuing as the
        surviving entity and holding all of the rights with respect to the MSD Patents
        formerly held by P-Newco and T-Newco;

       

      WHEREAS,
        pursuant to the Master Agreement, P-Newco, Patriot and TPL are entering into
        this Commercialization Agreement providing for the commercialization of
        P-Newco’s interests in the MSD Patents by TPL in return for the commitment of
        TPL to diligently pursue the commercialization; and

       

      WHEREAS,
        concurrently herewith Patriot and TPL are entering into that certain Limited
        Liability Company Operating Agreement of P-Newco (the “Operating
        Agreement”),
        governing the rights and obligations of Patriot and TPL with respect to their
        membership interests in P-Newco and the distribution of the proceeds received
        from the commercialization program contemplated by this Commercialization
        Agreement.

       

      NOW
        THEREFORE, for and in consideration of the mutual covenants herein contained
        as
        well as other good and valuable consideration the receipt and sufficiency
        of
        which is hereby acknowledged, the parties hereto covenant and agree
        that:

       

      ARTICLE
        I

      GRANT

       

      1.1 Pursuant
        to the Master Agreement, P-Newco and TPL shall enter into the grant attached
        hereto as Exhibit A (the “Grant”).

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        II

      COMMERCIALIZATION

       

      2.1 TPL
        shall
        exert reasonable best efforts to implement the activities (the
“Commercialization”) described at Schedule 2 and to conduct the project
        described therein (“Project”) in accordance with the project description (the
“Project Description”) including the Business Plan then in effect.

       

      (a) The
        first
        Business Plan is made a part of the Project Description as Attachment I to
        Schedule 2, and shall remain in full force and effect until replaced by
        agreement of P-Newco and TPL.

       

      (b) TPL
        shall
        have no obligation to pursue or fund any effort to prosecute, maintain, enforce
        or defend any element of the MSD Patents other than as specifically provided
        for
        in Schedule 2.

       

      2.2 By
        these
        presents, P-Newco appoints, authorizes, and directs TPL to take any and all
        action for the term of this Commercialization Agreement, with respect to
        all
        matters that are related to P-Newco’s rights to the MSD Patents, including
        without limitation:

       

      (a) entering
        into settlement and/or license agreements related to the MSD Patents which
        meet
        the Commercialization guidelines set forth in Section II of
        Schedule 2;

       

      (b) with
        the
        prior written consent of the P-Newco Management Committee, entering into
        any
        settlement and license agreements related to the MSD Patents which do not
        meet
        the guidelines set forth in Section II of Schedule 2;

       

      (c) to
        sue in
        the name of TPL, Moore, Patriot and/or P-Newco and to pursue for the use
        and
        benefit of the parties hereto as their respective interests appear: (i) all
        remedies of whatsoever kind or nature with respect to the protection, use,
        and
        enforcement of the MSD Patents; (ii) the collection of all claims for damages,
        profits, and awards relating to the past, present, or future use or ownership
        of
        the MSD Patents; and (iii) all equitable relief available in connection
        therewith; and

       

      (d) to
        otherwise manage and control by license, sublicense, or other agreement the
        practice and/or use of the MSD Patents by third parties.

       

      2.3. TPL
        may
        utilize the services of its various licensing personnel who may be lawyers
        to
        implement the Commercialization of the MSD Patents. Such services shall for
        no
        purpose be deemed to be legal services or to give rise to a lawyer-client
        relationship between TPL and/or TPL affiliates or Representatives on the
        one
        hand, and P-Newco and/or Patriot or any of their respective affiliates or
        Representatives on the other hand. Without limiting the foregoing, neither
        TPL
        nor any TPL Representative shall for any purpose be deemed to have:

       

      
        	 	
                (i)

              	
                Provided
                  legal services or advice to;

              

      

       

      
        	 	
                (ii)

              	
                Undertaken
                  the representation of; or

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                (iii)

              	
                Entered
                  into a lawyer-client relationship
                  with,

              

      

       

      P-Newco,
        Patriot or any of P-Newco’s or Patriot’s respective affiliates or
        Representatives.

       

      ARTICLE
        III

      COVENANTS

       

      3.1 Within
        sixty (60) days after the close of each calendar quarter TPL shall deliver
        to
        P-Newco: (i) an operating statement reflecting the Project’s financial
        activity over the past quarter; (ii) a calculation of the Gross Cash
        Proceeds (as defined in the Operating Agreement) resulting from the Project;
        and
        (iii) an itemization of all TPL Direct Reimbursable Expenses (as defined
        below).

       

      (a) Within
        thirty (30) days after P-Newco’s receipt thereof, Patriot shall deliver to TPL
        written notice detailing all objections to such materials and calculations
        on an
        individual item-by-item basis. Any objection not so noticed shall be deemed
        to
        be waived.

       

      (b) Costs
        related to verifying reported time and expense charges and/or auditing reports
        or activities shall be paid in advance by the entity (either Patriot or TPL)
        supporting such request for verification or audit.

       

      3.2 As
        requested by TPL, Patriot and P-Newco shall have a continuing obligation
        to
        exert their respective reasonable best efforts to support the Project, cooperate
        with TPL in the execution of its obligations, and to provide such support
        in the
        manner described herein and in the Master Agreement.

       

      3.3 Upon
        reasonable request, P-Newco and Patriot shall promptly execute and deliver
        all
        documents, instruments, and things necessary or useful in the conduct of
        TPL’s
        activities hereunder, and Patriot and P-Newco agree to cooperate in any
        litigation with respect to the MSD Patents, including providing any reasonable
        assistance in connection with such litigation or joining as a party thereto,
        as
        requested by TPL, provided that neither Patriot nor P-Newco shall be required
        to
        provide financial support except as otherwise provided in the Commercialization
        Agreement.

       

      3.4 Patriot
        and P-Newco shall each avoid and refrain from any and all activity of any
        kind
        or nature which may impede, impair, frustrate or otherwise interfere with
        the
        activities of TPL in the execution the Project, and shall:

       

      (a) Exert
        their respective reasonable best efforts to impose the covenants of this
        Commercialization Agreement, the Master Agreement and the transactions
        contemplated hereby and thereby on their respective directors, officers,
        employees, consultants, attorneys, agents and other affiliates or
        Representatives; and

       

      (b) Be
        responsible hereunder for each and every failure in the good and faithful
        performance of this Commercialization Agreement and transaction by themselves
        and/or their respective directors, officers, employees, consultants, attorneys,
        agents and other affiliates or Representatives (other than TPL).

       

      3.5 With
        the
        exception of the agreements and transactions entered into pursuant to the
        Project, P-Newco, Patriot and TPL shall not transfer, assign, license, or
        otherwise convey any

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      interest
        in, or grant any security interest with respect to, any portion of their
        interest in the MSD Patents during the term of this Commercialization Agreement
        without the written consent of all parties hereto, other than to entities
        which
        are owned and controlled by the transferring Person and who assume and agree
        to
        pay and perform all of the transferor’s obligations hereunder.

       

      3.6 Upon
        the
        termination of this Commercialization Agreement, Patriot shall be entitled
        to
        receive a copy of third party “DeCaps” (as such term is commonly understood to
        mean in the industry) related to the Commercialization and third party expert
        analyses thereof; and TPL does hereby consent to the deliveries thereof by
        such
        third party experts. In the event any of the foregoing are not provided by
        such
        third parties, TPL will provide Patriot with copies of such documents in
        its
        possession. In addition, a Patriot Representative shall be entitled to view
        such
“DeCaps” on a quarterly basis, but shall not be entitled to make copies thereof.
        With the exception of TPL’s obligations pursuant to Section 3.1 and this
        Section 3.6, TPL shall not be obligated to share any other materials
        related to the Commercialization, including without limitation any attorney
        work
        product generated during the term of this Commercialization Agreement or
        thereafter, which for all intents and purposes shall be deemed to be privileged,
        proprietary and exclusive to TPL.

       

      3.7. P-Newco
        and Patriot shall on a continuing basis provide TPL all leads, information,
        and
        materials which Patriot encounters or discovers which may relate to the rights
        to the MSD Patents transferred by Patriot and TPL to P-Newco pursuant to
        the
        Newco Licenses, shall exert their respective reasonable best efforts to support
        the Commercialization activities of TPL hereunder, and shall refrain from
        all
        contact with third parties regarding the MSD Patents except as is specifically
        approved and/or requested in writing by TPL. The foregoing shall not affect
        the
        exercise of the retained rights of Patriot or TPL under the Newco
        Licenses.

       

      ARTICLE
        IV

      PAYMENT

       

      4.1 TPL
        shall
        cause all Gross Cash Proceeds generated from the Commercialization efforts
        to be
        paid directly to P-Newco.

       

      4.2 Upon
        the
        submission of customary and appropriate invoices and other supporting
        documentation, P-Newco shall reimburse TPL for the payment of all legal and
        third-party expert fees and other related third-party costs and expenses,
        including without limitation those incurred in connection with patent
        maintenance and prosecution and third party “DeCaps” and third party expert
        analysis relating thereto (the “TPL
        Direct Reimbursable Expenses”)
        incurred by TPL in connection with the Project and in conformity with the
        applicable Business Plan, as well as all TPL Direct Reimbursable Expenses
        not in
        conformity with the applicable Business Plan, to the extent approved by the
        P-Newco Management Committee. All such reimbursement shall be made prior
        to the
        due date indicated on the invoice.

       

      4.3 P-Newco
        shall make payment to TPL of $500,000 no later than three (3) days prior
        to the
        start of each fiscal quarter from the Working Capital Fund to cover indirect
        and
        other expenses related to the Project which do not constitute TPL Direct
        Reimbursable Expenses (“TPL
        Other Project Expenses”).
        Advances to TPL made pursuant to this Section 4.3
        shall be
        nonaccountable and nonrecoupable, but shall offset the amounts owed TPL pursuant
        to Section 6.1(a)(iv)(b) of the Operating Agreement in the manner
        contemplated by such Section 6.1(a)(iv)(b). At such time as
        the

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Working
        Capital Fund exceeds [***] after the first [***] has been generated pursuant
        to
        the Commercialization, such quarterly payment shall be increased (but not
        decreased) to one-eighth of the amount of the Working Capital Fund.

       

      4.4 To
        the
        extent that P-Newco does not have sufficient funds from the Working Capital
        Fund
        at the time any payment is due pursuant to this Article IV,
        TPL
        shall refrain from enforcing any collection rights against P-Newco for such
        payments until the earlier of (a) such time as funds become available in
        the
        Working Capital Fund, or (b) termination of this Commercialization
        Agreement.

       

      ARTICLE
        V

      TERM

       

      5.1 This
        Commercialization Agreement shall continue for the useful life of the MSD
        Patents, which shall be deemed to be the greater of the period of time during
        which any of the MSD Patents is either (i) susceptible to legal protection,
        or (ii) reasonably perceived to have commercial value.

       

      5.2 In
        the
        event that facts or events are discovered or occur which materially reduce
        TPL’s
        evaluation of the useful life or commercial value of the MSD Patents, or
        the
        viability of the Project, TPL may reduce the term of this Commercialization
        Agreement accordingly by providing P-Newco with ninety (90) days written
        notice,
        provided that TPL shall not reduce the term of this Commercialization Agreement
        to less than six (6) months.

       

      5.3 After
        the
        expiration of the term provided for above, neither party shall have any further
        obligation hereunder other than the administration of all outstanding
        transactions as under Article VI
        below,
        and the obligations of confidentiality undertaken by the parties.

       

      ARTICLE
        VI

      TERMINATION

       

      6.1 TPL
        may
        terminate this Commercialization Agreement upon the failure of Patriot or
        P-Newco to substantially perform any of their material obligations to be
        performed hereunder, including without limitation the payment obligations
        pursuant to Article IV
        of this
        Commercialization Agreement.

       

      6.2 P-Newco
        may terminate this Commercialization Agreement if:

       

      (a) TPL
        has
        failed to close transactions in accordance with the Performance Milestones
        set
        forth in Section IV of Schedule 2,
        and

       

      
        	 	
                (i)

              	
                there
                  has been no material breach by Patriot or P-Newco of this
                  Commercialization Agreement, the Master Agreement, the Newco Licenses
                  or
                  the Operating Agreement; and

              

      

       

      
        	 	
                (ii)

              	
                there
                  has been no event or occurrence which negatively and materially
                  impacts
                  the viability or value of the MSD Patents;
                  and

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	 	
                (iii)

              	
                the
                  failure of TPL is not reasonably attributable to the conduct of
                  P-Newco,
                  Patriot and/or their respective affiliates or Representatives (other
                  than
                  TPL); or

              

      

       

      (b) TPL
        enters into a liquidation under Chapter 7 of the United States Bankruptcy
        Code;
        or

       

      (c) TPL
        enters into a reorganization under Chapter 11 of the United States Bankruptcy
        Code, and TPL ceases to be a debtor in possession during the pendency of
        such
        bankruptcy proceeding.

       

      Each
        of
        the events referred to in Sections 6.1
        and
6.2
        shall be
        referred to as a “Termination
        Event.”
In
        no
        event shall the conduct of Moore be deemed to constitute a Termination
        Event.

       

      6.3 Upon
        termination pursuant to this Article VI:

       

      (a) All
        rights to the MSD Patents arising under the Grant or this Commercialization
        Agreement shall be transferred to P-Newco subject to all outstanding rights
        under licenses, agreements, or awards theretofore made and entered into by
        or
        with TPL prior to such expiration or termination which, for all purposes,
        shall
        continue and be administered by TPL under TPL’s then current reasonable hourly
        fee schedule as if this Commercialization Agreement were still in full force
        and
        effect.

       

      (b) All
        amounts due to TPL with respect to TPL Direct Project Expenses and TPL Other
        Project Expenses shall be paid from Gross Cash Proceeds as such funds are
        received.

       

      (c) At
        the
        option of Patriot, TPL, or P-Newco, all of the rights and privileges of
        whatsoever kind or nature granted by it shall immediately and without further
        action whatsoever revert in their entirety to each of Patriot, TPL, or P-Newco,
        as the case may be, and all licenses granting such rights and privileges
        shall
        be deemed to be for all purposes cancelled.

       

      (d) In
        the
        event of a termination by P-Newco or Patriot, all claims for loss and/or
        damages
        shall be deemed to be liquidated and discharged with respect to each party
        upon
        its completion of the dissolution, distributions and the documentation and
        transfers contemplated by Article 8 of the Operating Agreement, provided,
        however, that claims based on conduct which is intentional, willful, or grossly
        negligent shall survive.

       

      ARTICLE
        VII

      REPRESENTATIONS
        AND WARRANTIES

       

      7.1 P-Newco
        and Patriot acknowledge, represent, and warrant to TPL that:

       

      (a) TPL
        and
        its Representatives have prepared this Commercialization Agreement at the
        request of P-Newco and Patriot and such preparation by TPL shall not be used
        as
        basis for construing the terms hereof against TPL or otherwise;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (b) Neither
        TPL nor its Representatives have for any purpose undertaken the representation
        of or entered into a lawyer/client relationship with Patriot or P-Newco or
        any
        of their Representatives;

       

      (c) P-Newco
        and Patriot release, acquit, and agree to hold TPL and its Representatives
        harmless with respect to all claims of whatsoever kind or nature by or on
        behalf
        of P-Newco and Patriot and related to the preparation, execution, and delivery
        of this Commercialization Agreement; and,

       

      (d) P-Newco
        and Patriot have sought and received the advice of independent counsel and
        are
        in no way relying on any advice or representations of TPL or its
        Representatives.

       

      7.2 Patriot
        and TPL each represent and warrant to one another that:

       

      (a) It
        is the
        sole owner of all right, title and interest in and to its portion of the
        MSD
        Patents, excepting only the rights reflected at the Schedule of Outstanding
        Activities/Rights/Claims attached as Schedule 3;
        and

       

      (b) There
        are
        no outstanding agreements, rights or interests which are inconsistent with
        the
        provisions of this Commercialization Agreement or which could give rise to
        such
        rights or interests.

       

      7.3 P-Newco
        represents and warrants to TPL that:

       

      (a) It
        is the
        sole owner, and for the term of this Commercialization Agreement will remain
        the
        sole owner, of all right, title, and interest in and to those certain rights
        to
        the MSD Patents transferred by Patriot and TPL to P-Newco pursuant to the
        P-Newco License and T-Newco License; and

       

      (b) There
        are
        no outstanding agreements, rights or interests which are inconsistent with
        the
        provisions of this Commercialization Agreement or which could give rise to
        such
        rights or interests.

       

      ARTICLE
        VIII

      GENERAL

       

      8.1 In
        no
        event shall any right, duty or privilege arising hereunder be assigned by
        either
        party to an entity which it does not own and control without the prior written
        consent of the other parties. Any attempted or purported assignment without
        such
        consent shall be voidable at the option of the non-consenting
        party.

       

      8.2 Any
        covenant requiring a party to perform or provide an act or service shall
        be
        construed to impose upon such party the burden of the cost thereof unless
        otherwise provided for herein.

       

      8.3 Section
        titles are intended only to aid and assist the reader and are not intended
        to be
        descriptive of the contents of the section or to be used for construction
        or
        interpretation.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      8.4 The
        failure of any provision of this Commercialization Agreement by virtue of
        its
        being construed as invalid or otherwise unenforceable shall render the entire
        Commercialization Agreement cancelable at the option of the party asserting
        the
        enforceability of the said provision.

       

      8.5 All
        notices shall be in writing and effective upon delivery or upon posting by
        certified mail, return receipt requested, addressed as follows (or such other
        address as may be hereafter designated):

       

      If
        to Patriot:

      

      Patriot
        Scientific Corporation

      10989
        Via
        Frontera

      San
        Diego, CA 92127

      Attn:
        President

      Fax:
        (858) 674-5005

      

      with
        a copy to:

      

      Luce,
        Forward, Hamilton & Scripps LLP

      600
        West
        Broadway, Suite 2600

      San
        Diego, CA 92101

      Attn:
        Otto E. Sorensen, Esq.

      Fax:
        (619) 232-8311

      

      If
        to TPL:

      

      Technology
        Properties Limited

      21730
        Stevens Creek Blvd., Suite 201A

      Cupertino,
        CA 95014

      Attn:
        Daniel E. Leckrone, Chairman

      Fax:
        (408) 296-6637

      

      with
        a copy to:

      

      Gibson,
        Dunn & Crutcher LLP

      333
        S.
        Grand Avenue

      Los
        Angeles, California 90071

      Attn:
        Andrew E. Bogen, Esq.

      Fax:
        (213) 229-6159

      

      If
        to P-Newco:

       

      8.6 This
        Commercialization Agreement together with its exhibits and attachments, the
        Stipulated Final Judgment, the Master Agreement, the Newco Licenses, the
        Operating Agreement

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      and
        the
        Escrow Agreement contains the entire agreement between the parties and
        supersedes any and all other agreements between them relating to the subject
        matter hereof.

       

      8.7 With
        the
        exception of the Grant attached hereto as Exhibit A and the obligation to
        share certain materials pursuant to Section 3.6, this Commercialization
        Agreement shall create no rights or licenses to any intellectual property
        between or among the parties, nor shall it create any obligation to share
        technology, trade secrets, know-how, show-how and other proprietary developments
        and discoveries conceived or reduced to practice during the course of the
        Project.

       

      8.8 Any
        provision of this Commercialization Agreement may be amended or waived if,
        and
        only if, such amendment or waiver is in writing and signed, in the case of
        an
        amendment, by all parties hereto, or in the case of a waiver, by the party
        against whom the waiver is to be effective.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties have hereunto set their hands and seal as of
        the
        date of the execution hereof by the last signatory hereto.

       

      PATRIOT
        SCIENTIFIC CORPORATION, a 
Delaware corporation

      

      __________________________________________

      By:

      Its:

      

      

      TECHNOLOGY
        PROPERTIES LIMITED, a California corporation

      

       

      __________________________________________

      By: Daniel
        E.
        Leckrone

      Its: Chairman

      

      

      P-NEWCO,
        a Delaware limited liability company

      

       

      __________________________________________

      By:

      Its: Patriot
        Member

      

       

      __________________________________________

      By:

      Its: TPL
        Member

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
        A

      GRANT

      (NEWCO
        TO TPL)

      

      

      This
        Grant (“Grant”) is entered into by and between Newco (sometimes “Newco”) on the
        one hand, and Technology Properties Limited (“TPL”), on the other hand, and is
        made and entered into for the purpose of implementing that certain
        Commercialization Agreement (“ComAg”) entered into between the parties
        contemporaneously herewith.

       

      NOW
        THEREFORE, for and in consideration of the mutual cove-nants herein contained
        as
        well as of other good and valuable consideration the receipt and sufficiency
        of
        which is hereby acknowledged, it is covenanted and agreed by and between
        the
        parties hereto that:

       

      1. Subject
        Matter.

       

      1.1 The
        patents described in the Schedule of Patents at Attachment I hereof, sometimes
        collectively referred to as the “Project Patents.”

       

      2. Grant.

       

      2.1 Pursuant
        to the provisions of section 2.1 of the Licenses made a part hereof as
        Attachment I (PTSC to Newco) and Attachment II (TPL to Newco), Newco hereby
        grants unto Technology Properties Limited the exclusive, personal and
        non-transferable, worldwide right to:

       

      2.1.1 To
        grant
        licenses and sub-licenses to make, have made, use, sell, and import products
        and/or services utilizing the Project Patents, for all fields of use and
        for all
        applications;

       

      2.1.2 To
        sue in
        the name of Technology Properties Limited or jointly with Patriot Scientific
        Corporation, Charles H. Moore and/or Newco if required by law, and to pursue
        for
        the use and benefit of Technology Properties Limited: (i) all remedies of
        whatsoever kind or nature with respect to the protection, use, and enforcement
        of the Project Patents; (ii) the collection of all claims for damages, profits,
        and awards relating to the past, present, or future use or ownership of the
        Project Patents; and (iii) all equitable relief available in connection
        therewith; and,

       

      2.1.3 To
        otherwise manage and control by license, sublicense, or other agreement the
        practice and/or use of the Project Patents by third parties.

       

      Accordingly,
        Newco divests itself of all rights with respect to the activities and/or
        rights
        described at 2.1.1., 2.1.2., and 2.1.3. above, and Newco retains no such
        right.

       

      2.2 The
        grant
        at Section 2.1 above shall be subject to (a) the terms and conditions of
        the Patent License Agreement between Patriot and Intel Corporation, dated
        as of
        June 1, 2005, and (b) the rights retained by PTSC and TPL under the
        provisions of section 2.2 of the said Attachments I and II,
        respectively.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3. General.

       

      3.1 In
        no
        event shall any right, duty, or privilege arising hereunder be assigned by
        either party to an entity which it does not own and control, without the
        prior
        written consent of the other party. Any attempted or purported assignment
        without such consent shall be voidable at the option of the non-consenting
        party.

       

      3.2 Any
        covenant requiring a party to perform or provide an act or service shall
        be
        construed to impose upon such party the burden of the cost thereof unless
        otherwise provided for herein or in the ComAg.

       

      3.3 Section
        titles are intended only to aid and assist the reader and are not intended
        to be
        descriptive of the contents of the section or to be used for construction
        or
        interpretation.

       

      3.4 The
        failure of any provision of this Agreement by virtue of its being construed
        as
        invalid or otherwise unenforceable shall render the entire Agreement cancelable
        at the option of the party asserting the enforceability of the said
        provision.

       

      3.5 All
        notices shall be in writing and effective upon delivery or upon posting by
        certified mail, return receipt requested, addressed as follows (or such other
        address as may be hereafter designated):

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      If
        to
        TPL:

      

      Daniel
        E
        Leckrone, Chm

      21730
        Stevens Creek Blvd

      Cupertino,
        CA 95014

      Telephone:
        408-446-4222

      Facsimile:
        408-446-5444

      

      If
        to
        Newco:

      

      Daniel
        E
        Leckrone, Chm

      21730
        Stevens Creek Blvd

      Cupertino,
        CA 95014

      Telephone:
        408-446-4222

      Facsimile:
        408-446-5444

      

      AND

      

      Patriot
        Scientific Corporation

      10989
        Via
        Frontera

      San
        Diego, CA 92127

      Attn:
        President

      Fax:
        (858) 674-5005

      

      AND

      

      Robert
        K.
        Neilson

      Relational
        Advisors LLC

      11975
        El
        Camino Real, Suite 300

      San
        Diego, California 92130

      Fax:
        (858) 704-3341

      

      3.6 This
        Agreement together with its exhibits and attachments contains the entire
        agreement between the parties and supersedes any and all other agreements
        between them relating to the subject matter hereof.

       

      3.7 This
        Agreement shall be construed in accordance with and governed by the internal
        laws (without reference to choice or conflict of laws) of the State of
        California.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
        the
        date of the execution hereof by the last signatory hereto.

       

      
        	
                NEWCO

                 

                 

                By:__________________________________________

                Robert
                  K. Neilson

                 

                Date:__________________________________________

              	
                TECHNOLOGY
                  PROPERTIES LTD.

                 

                 

                By:__________________________________________

                Daniel
                  E. Leckrone, Chairman

                 

                Date:__________________________________________

              

      

      

       

      Attachment
        I - Schedule of Patents

       

      (See
        next
        page)

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A

      SCHEDULE
        OF PATENTS

      

      
        A. PROJECT
          PATENTS - US

        
          	 	 	 	 	 	 	 	 	 	 
	
                  NUMBER

                	
                	 	
                  NAME

                	 	
                  FILED

                	 	
                  ISSUED

                	 	
                  EXPIRY

                
	
                  US

                	
                  5,440,749

                	 	
                  Hi
                    Perf, Lo cost Micro Arch 

                	 	
                  3
                    AUG 89

                	 	
                  8
                    AUG 95

                	 	
                  8
                    AUG 12

                
	
                  US

                	
                  5,530,890

                	 	
                  Hi
                    Perf, Lo cost Micro Arch

                	 	
                  7
                    JUN 95

                	 	
                  25
                    JUN 96

                	 	
                  25
                    JUN 13

                
	
                  US

                	
                  5,659,703

                	 	
                  Micro
                    Sys with Hierarchical stack

                	 	
                  7
                    JUN 95

                	 	
                  19
                    AUG 97

                	 	
                  19
                    AUG 14

                
	
                  US

                	
                  5,784,584

                	 	
                  Multiple
                    Instructions within Groups

                	 	
                  7
                    JUN 95

                	 	
                  21
                    JUL 98

                	 	
                  21
                    JUL 15

                
	
                  US

                	
                  5,809,336

                	 	
                  Hi
                    Perf Variable Speed Sys Clock

                	 	
                  7
                    JUN 95

                	 	
                  15
                    SEP 98

                	 	
                  15
                    SEP 15

                
	
                  US

                	
                  5,604,915

                	 	
                  Load
                    Dependent Bus Timing

                	 	
                  7
                    JUN 95

                	 	
                  18
                    FEB 97

                	 	
                  18
                    FEB 14

                
	
                  US

                	
                  6,598,148

                	 	
                  Hi
                    Perf Microprocessor 

                	 	
                  29
                    JUL 98

                	 	
                  22
                    JUL 03

                	 	
                  3
                    AUG 09

                
	 	 	 	
                  Having
                    Variable Speed Sys Clock

                	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

B. PROJECT
          PATENT APPLICATIONS PENDING - US

        
          	 	 	 	 	 	 	 	 	 	 
	SN
                  09/051,263	 	 	RISC
                  Microprocessor Architecture	 	8
                  AUG 98	 	_
                  _
                  _ _ 	 	3
                  AUG 09

        

         

         C. PROJECT
          PATENTS - NON US (Preliminary)

         

        
          	
                  DE

                	
                  69033568.7

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  14
                    JUN 00

                	 	
                  2
                    AUG 10

                
	
                  DE
                    

                	
                  69033568T2

                	 	
                  Preisguenstiger
                    Hochleistungsmikro

                	 	
                  2
                    AUG 90

                	 	
                  1
                    MAR 01

                	 	
                  -
                    -
                    - -

                
	
                  DE

                	
                  69033568C0

                	 	
                  Preisguenstiger
                    Hochleistungsmikro

                	 	
                  2
                    AUG 90

                	 	
                  20
                    JUL 00

                	 	
                  -
                    -
                    - -

                
	
                  EP

                	
                  0786730

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  14
                    JUN 00

                	 	
                  2
                    AUG 10

                
	
                  EP

                	
                  786730A1

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  30
                    JUL 97

                	 	
                  -
                    -
                    - -

                
	
                  EP

                	
                  497772A4

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  4
                    AUG 93

                	 	
                  -
                    -
                    - -

                
	
                  EP

                	
                  497772A1

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  12
                    AUG 92

                	 	
                  -
                    -
                    - -

                
	
                  EP
                    

                	
                  0870226

                	 	
                  RISC
                    Microprocessor Architecture

                	 	
                  _
                    _
                    _ _ 

                	 	
                  _
                    _
                    _ _

                	 	
                  -
                    -
                    - -

                
	
                  FR

                	
                  0786730

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  14
                    JUL 00

                	 	
                  -
                    -
                    - -

                
	
                  WO
                    

                	
                  9715001

                	 	
                  RISC
                    Microprocessor Arch

                	 	
                  _
                    _
                    _ _

                	 	
                  _
                    _
                    _ _

                	 	
                  -
                    -
                    - -

                
	
                  WO
                    

                	
                  9102311A3

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  21
                    MAR 91

                	 	
                  -
                    -
                    - -

                
	
                  WO

                	
                  9102311A1

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  1
                    FEB 91

                	 	
                  -
                    -
                    - -

                
	
                  JP
                    

                	
                  5502125T2

                	 	
                  _
                    _
                    _ _ _ _

                	 	
                  2
                    AUG 90

                	 	
                  15
                    APR 93

                	 	
                  -
                    -
                    - -

                
	
                  JP
                    

                	
                  2966085B2

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  13
                    AUG 99

                	 	
                  2
                    AUG 10

                
	
                  AU

                	
                  6067290A1

                	 	
                  Hi
                    Perf, Lo Cost Micro

                	 	
                  2
                    AUG 90

                	 	
                  11
                    MAR 91

                	 	
                  -
                    -
                    - -

                

        

        
The
          schedule of Patents shall include the items listed above, as well as all
          progenitors and progeny thereof, and all additions, changes, amendments,
          modifications, actions, counterparts, continuations, continuations-in-part,
          extensions, reissues, divisionals and/or renewals of such items, progenitors,
          and/or progeny.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        1

      SCHEDULE
        OF PATENTS

      

      A. MSD
        PATENTS - US

       

      
        	Number	 	 	Name	 	Filed	 	Issued	 	Expiry
	
                US

              	
                5,440,749

              	 	
                Hi
                  Perf, Lo cost Micro Arch

              	 	
                3
                  AUG 89

              	 	
                8
                  AUG 95

              	 	
                8
                  AUG 12

              
	
                US

              	
                5,530,890

              	 	
                Hi
                  Perf, Lo cost Micro Arch

              	 	
                7
                  JUN 95

              	 	
                25
                  JUN 96

              	 	
                25
                  JUN 13

              
	
                US

              	
                5,659,703

              	 	
                Micro
                  Sys with Hierarchical stack

              	 	
                7
                  JUN 95

              	 	
                19
                  AUG 97

              	 	
                19
                  AUG 14

              
	
                US

              	
                5,784,584

              	 	
                Multiple
                  Instructions within Groups

              	 	
                7
                  JUN 95

              	 	
                21
                  JUL 98

              	 	
                21
                  JUL 15

              
	
                US

              	
                5,809,336

              	 	
                Hi
                  Perf Variable Speed Sys Clock

              	 	
                7
                  JUN 95

              	 	
                15
                  SEP 98

              	 	
                15
                  SEP 15

              
	
                US

              	
                5,604,915

              	 	
                Load
                  Dependent Bus Timing

              	 	
                7
                  JUN 95

              	 	
                18
                  FEB 97

              	 	
                18
                  FEB 14

              
	
                US

              	
                6,598,148

              	 	
                Hi
                  Perf Microprocessor 

                Having
                  Variable Speed Sys Clock

              	 	
                29
                  JUL 98

              	 	
                22
                  JUL 03

              	 	
                3
                  AUG 09

              

      

      

      B. PROJECT
        PATENT APPLICATIONS PENDING - US

       

      
        	
                Number

              	
                Name

              	
                Filed

              	
                Issued

              	
                Expiry

              
	
                SN

              	
                09/051,263

              	
                RISC
                  Microprocessor Architecture

              	
                8
                  AUG 98

              	
                -
                  -
                  - -

              	
                3
                  AUG 09

              

      

      

      C. MSD
        PATENTS - NON US (Preliminary)

       

      
        	Number	 	Name	Filed	Issued	Expiry
	
                DE

              	
                69033568.7

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                14
                  JUN 00

              	
                2
                  AUG 10

              
	
                DE

              	
                69033568T2

              	
                Preisguenstiger
                  Hochleistungsmikro

              	
                2
                  AUG 90

              	
                1
                  MAR 01

              	
                -
                  -
                  - -

              
	
                DE

              	
                69033568C0

              	
                Preisguenstiger
                  Hochleistungsmikro

              	
                2
                  AUG 90

              	
                20
                  JUL 00

              	
                -
                  -
                  - -

              
	
                EP

              	
                0786730

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                14
                  JUN 00

              	
                2
                  AUG 10

              
	
                EP

              	
                786730A1

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                30
                  JUL 97

              	
                -
                  -
                  - -

              
	
                EP

              	
                497772A4

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                4
                  AUG 93

              	
                -
                  -
                  - -

              
	
                EP

              	
                497772A1

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                12
                  AUG 92

              	
                -
                  -
                  - -

              
	
                EP

              	
                0870226

              	
                RISC
                  Microprocessor Architecture

              	
                -
                  -
                  - -

              	
                -
                  -
                  - -

              	
                -
                  -
                  - -

              
	
                FR

              	
                0786730

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                14
                  JUL 00

              	
                -
                  -
                  - -

              
	
                WO

              	
                9715001

              	
                RISC
                  Microprocessor Arch

              	
                -
                  -
                  - -

              	
                -
                  -
                  - -

              	
                -
                  -
                  - -

              
	
                WO

              	
                9102311A3

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                21
                  MAR 91

              	
                -
                  -
                  - -

              
	
                WO

              	
                9102311A1

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                1
                  FEB 91

              	
                -
                  -
                  - -

              
	
                JP

              	
                5502125T2

              	
                _
                  _
                  _ _ _ _

              	
                2
                  AUG 90

              	
                15
                  APR 93

              	
                -
                  -
                  - -

              
	
                JP

              	
                2966085B2

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                13
                  AUG 99

              	
                2
                  AUG 10

              
	
                AU

              	
                6067290A1

              	
                Hi
                  Perf, Lo Cost Micro

              	
                2
                  AUG 90

              	
                11
                  MAR 91

              	
                -
                  -
                  - -

              

      

      

      The
        schedule of Patents shall include the items listed above, as well as all
        progenitors and progeny thereof, and all additions, changes, amendments,
        modifications, actions, counterparts, continuations, continuations-in-part,
        extensions, reissues, divisionals and/or renewals of such items, progenitors,
        and/or progeny.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        2

      PROJECT
        DESCRIPTION

      

      I. OBJECTIVES
        & ACTIVITIES

       

      
        	 	
                A.)

              	
                Develop
                  and execute a commercialization program for the rights to the MSD
                  Patents
                  transferred by Patriot and TPL to P-Newco pursuant to the Newco
                  Licenses
                  which:

              

      

       

      
        	 	
                i.)

              	
                Establishes
                  the MSD Patents as an income-producing, commercially valuable asset;
                  and

              

      

       

      
        	 	
                ii.)

              	
                Builds
                  long-term Project value; and

              

      

       

      
        	 	
                iii.)

              	
                Minimizes
                  risks to Project assets.

              

      

       

      
        	 	
                B.)

              	
                Promote
                  the commercialization program by encouraging the implementation
                  and use of
                  the MSD Patents through licenses, and various
                  relationships.

              

      

       

      
        	 	
                C.)

              	
                Transform
                  selected unauthorized use of the MSD Patents into strategically
                  and
                  commercially valuable authorized
                  use.

              

      

       

      
        	 	
                D.)

              	
                Pursue
                  licensing discussions with multiple simultaneous identified
                  prospects.

              

      

       

      
        	 	
                E.)

              	
                Pursue
                  parallel litigation on a selective strategic
                  basis.

              

      

       

      
        	 	
                F.)

              	
                Negotiate
                  and document agreements relating to the Project and the MSD
                  Patents.

              

      

       

      
        	 	
                G.)

              	
                ***

              

      

       

      
        	 	
                H.)

              	
                ***

              

      

       

      
        	 	
                I.)

              	
                ***

              

      

       

      II. COMMERCIALIZATION
        GUIDELINES

       

      
        	 	
                A.)

              	
                ***

              

      

       

       

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      III. ADDITIONAL
        ACTIONS

       

      
        	 	
                A.)

              	
                ***

              

      

       

      
        	 	
                B.)

              	
                ***

              

      

       

      
        	 	
                C.)

              	
                ***

              

      

       

      IV. ***

       

      ***

       

      V. BUSINESS
        PLAN

       

      
        	 	
                A.)

              	
                A
                  Business Plan detailing the implementation of the Project is attached
                  hereto as Attachment I and will remain in full force and effect
                  until duly
                  amended or replaced.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      ATTACHMENT
        1 TO SCHEDULE 2

      

      BUSINESS
        PLAN

      

       

      I. ***

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        3

      SCHEDULE
        OF OUTSTANDING ACTIVITIES/RIGHTS/CLAIMS

       

      

        
          	
                  AGREEMENT

                	
                  DATE

                
	
                  TPL

                	 
	
                  1.
                    Moore - TPL Commercialization Agreement

                	
                  22
                    OCT 02

                
	
                  2.
                    P-Newco - TPL - PTSC Commercialization Agreement

                	
                  25
                    MAY 05

                
	
                  3.
                    TPL - Intel License Agree ment

                	
                  28
                    JUN 04

                
	 	 
	
                  PTSC

                	 
	
                  1.
                    PTSC - AMD License Agreement

                	
                  _________

                
	
                  2.
                    P-Newco - TPL - PTSC Commercialization Agreement

                	
                  25
                    MAY 05

                
	
                  3.
                    ________________________

                	 

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        E

      

        
          	
                  ***

                	
                  Indicates
                    material omitted pursuant to an application for confidential
                    treatment and
                    that material has been filed separately with the
                    Commission.

                

        

        

        ESCROW
          AGREEMENT

        

        This
          Escrow Agreement (this “Agreement”), dated as of June 7, 2005, is by and among
          Patriot Scientific Corporation, a Delaware corporation (“Patriot”), Technology
          Properties Limited Inc., a California corporation (“TPL”),
          and
          Premier Trust, Inc., a Nevada corporation (the “Escrow
          Agent”).

        

        RECITALS

        

        WHEREAS,
          concurrently herewith Patriot, TPL and Charles H Moore have executed delivered
          that certain agreement dated as of June 7, 2005 (the “Master
          Agreement”);

        

        WHEREAS,
          the parties hereto desire to enter into this Agreement to facilitate the
          transaction contemplated by the Master Agreement; and

         

        WHEREAS,
          the Escrow Agent is willing to act as escrow agent pursuant to the terms
          and
          conditions of this Agreement.

        

        AGREEMENT

        

        NOW,
          THEREFORE, in consideration of the premises and intending to be legally
          bound
          hereby, the parties agree as follows:

         

        1. Delivery
          of Escrowed Cash.
          As soon
          as practicable, Patriot and TPL shall direct Intel Corporation to deliver
          by
          wire transfer in immediately available funds to the account set forth on
          Exhibit
          A hereto all of the unpaid Milestone payments (as defined in the Intel
          Patent
          License Agreement) pursuant to Section 3.2 of the Intel Patent License
          Agreement
          (the “Escrowed Cash”). The Escrow Agent agrees to hold and safeguard the
          Escrowed Cash during the Escrow Period in accordance with this Agreement,
          separate and apart from the Escrow Agent’s assets.

         

        2. Investment
          of Escrowed Cash.
          During
          the Escrow Period, the Escrow Agent will hold and maintain the Escrowed
          Cash in
          an interest bearing deposit account at Torrey Pines Bank. Upon any distribution
          to Patriot or TPL pursuant to Section
          4
          below,
          Patriot or TPL, as the case may be, shall be entitled to receive interest
          earned
          on such amount to the date of disbursement. All other interest earned by
          the
          investment of the Escrowed Cash shall be the joint property of TPL and
          Patriot
          in equal parts, payable by the Escrow Agent to TPL and Patriot in equal
          parts
          upon the expiration of the Escrow Period (as defined below).

         

        3. Escrow
          Period.
          The
          period of Escrow (the “Escrow Period”) shall begin on the date hereof and end at
          the earliest of (a) the Closing; or (b) the Termination Date.

         

        4. Escrow
          Disbursements.
          The
          Escrow Agent shall deliver the Escrowed Cash as follows:

        

        
          
             

          

          
            1

            
              

            

          

          
             

          

        

         

        (a) Immediately
          upon receipt of the Escrowed Cash, $***
          to TPL
          in immediately available funds to the account set forth on Exhibit
          B
          hereto.

         

        (b) Immediately
          after the disbursement pursuant to subsection (a) above, $***
          to
          Relational Advisors in immediately available funds to the account set forth
          on
Exhibit
          C
          hereto.

         

        (c) Immediately
          after the disbursement pursuant to subsection (a) above, $***
          to
          Gibson, Dunn & Crutcher LLP in immediately available funds to the account
          set forth on exhibit D hereto.

         

        (d) Upon
          the
          execution and delivery by Patriot of the Stipulated Final Judgment,
          $***
          to
          Patriot by wire transfer in immediately available funds, to the account
          set
          forth on Exhibit
          E
          hereto.

         

        (e) At
          the
          Closing, $***
          to the
          Patriot Rights Holders set forth on Exhibit
          F
          hereto,
          by wire or check, as indicated, in the amounts and to the addresses or
          accounts
          appearing next to their names.

         

        (f) At
          the
          Closing, $4,000,000 to P-Newco in immediately available funds to the account
          set
          forth on Exhibit
          G
          hereto,
          or, in the event that the advance to TPL pursuant to Section
          4(g)
          has been
          disbursed, then $2,000,000 to P-Newco in immediately available funds to
          the
          account set forth on Exhibit
          E
          hereto.

         

        (g) If
          the
          Closing has not already occurred, then sixty (60) days after the execution
          hereof, $2,000,000 to TPL by wire transfer in immediately available funds
          to the
          account set forth on Exhibit
          B
          hereto,
          as an advance of the working capital amounts contemplated by Section 4.3
          of the
          Commercialization Agreement.

         

        (h) Upon
          the
          Termination Date:

         

        (1) $***,
          plus
          all interest earned on such amount to date, to TPL immediately available
          funds
          to the account set forth on Exhibit
          B
          hereto;

         

        (2) $***,
          plus
          all interest earned on such amount to date, to Patriot in immediately available
          funds to the account set forth on Exhibit
          E
          hereto;

         

        (3) $2,000,000,
          plus all interest earned on such amount to date, to TPL in immediately
          available
          funds to the account set forth on Exhibit
          B
          hereto
          or, in the event that advance to TPL pursuant to Section
          4(g)
          has been
          disbursed, then $***,
          plus
          all interest earned on such amount to date, to TPL in immediately available
          funds to the account set forth on Exhibit
          B
          hereto;

         

        (4) $2,000,000,
          plus all interest earned on such amount to date, to Patriot in immediately
          available funds to the account set forth on Exhibit
          E
          hereto
          or, in the event that the advance to TPL pursuant to Section
          4(g)
          has been
          disbursed, then $***,
          plus
          all interest earned on such amount to date, to Patriot in immediately available
          funds to the account set forth on Exhibit
          E
          hereto.

         

        5. Fees
          and Expenses of Escrow Agent.
          The
          Escrow Agent’s fee shall be $***,
          plus
          $25 per disbursement pursuant to Section 5, plus actual costs incurred
          by the
          Escrow Agent in the performance of its obligations hereunder, including
          without
          limitation the costs associated wiring the funds and other administrative
          costs
          (the “Escrow Fee”). Each of Patriot and TPL agree to pay the Escrow Agent
          one-half of the Escrow Fee.

        

        
          
             

          

          
            2

            
              

            

          

          
             

          

        

         

        6. Liabilities
          and Duties of Escrow Agent.

        

        (a) The
          duties and obligations of the Escrow Agent shall be determined solely by
          the
          express provisions of this Agreement and the Escrow Agent shall have no
          implied
          duties and shall not be liable except for the performance of such duties
          and
          obligations as are specifically set forth in this Agreement.

         

        (b) Patriot
          and TPL will indemnify the Escrow Agent for, arid hold it harmless against,
          any
          loss, liability or expense, including but not limited to, reasonable attorneys’
fees, occurred without gross negligence, bad faith, or willful misconduct
          on the
          part of the Escrow Agent arising out of or in connection with its acceptance
          of,
          or the performance of its duties and obligations under, this
          Agreement.

         

        (c) The
          Escrow Agent shall be fully protected in acting and relying upon any written
          notice, direction, request, waiver, consent, receipt or other paper or
          document
          which the Escrow Agent in good faith believes to be genuine and duly authorized
          and to have been signed or presented by the proper party.

         

        (d) The
          Escrow Agent is hereby expressly authorized to disregard any and all warnings
          given by any of the parties hereto or by any other person, excepting only
          orders
          or process of a court of law of competent jurisdiction. In the event the
          Escrow
          Agent obeys or complies with any such order, judgment, or decree of any
          court,
          the Escrow Agent shall not be liable to any of the parties hereto or to
          any
          other person by reason of such compliance, notwithstanding any such order,
          judgment, or decree being subsequently reversed, modified, annulled, set
          aside,
          aside, vacated, or found to have been entered without jurisdiction or proper
          authority.

         

        (e) The
          Escrow Agent shall not be liable for the expiration of any rights under
          the
          statute of limitations with respect to this Agreement.

         

        (f) If
          any
          dispute or controversy arises between the parties to this Agreement the
          matters
          set forth in this Agreement, the Escrow Agent shall not be required to
          determine
          or decide the dispute or controversy or to take any action regarding the
          same.
          The Escrow Agent may in such event hold the Escrowed Cash in the Escrow
          Account
          and may wait for the settlement of any such dispute or controversy through
          appropriate final legal proceedings. Furthermore, the Escrow Agent may,
          in its
          good faith discretion after seeking advice of counsel, file an action of
          interpleader requiring the parties to answer and litigate any claims or
          rights
          among themselves. In connection with the interpleader proceeding, the Escrow
          Agent is authorized to deposit with the clerk or other authorized agent
          of the
          court the Escrowed Cash. Upon initiating the interpleader proceeding, the
          Escrow
          Agent shall be fully released and discharged from any obligations with
          respect
          to the documents, cash or other matters subject or relating to the dispute
          or
          controversy.

         

        (g) The
          Escrow Agent may resign at any time upon at least 30 days written of notice
          to
          each Patriot and TPL; provided,
          however,
          that no
          such resignation shall become effective until a successor escrow agent
          has been
          appointed by the Escrow Agent, subject to the approval of each of Patriot
          and
          TPL, which approval shall not be unreasonably withheld. The escrow agent
          shall
          execute and deliver an instrument accepting such appointment and it shall
          thereupon be deemed the Escrow Agent hereunder and without further acts
          shall be
          vested with all the Escrowed Cash, as well as all the rights, powers, and
          duties
          of the predecessor Escrow Agent as if originally named as Escrow Agent.
          Thereafter (and upon the delivery of all of the Escrow Cash to the successor
          escrow agent), the predecessor Escrow Agent shall be discharged any further
          duties and liabilities under this Agreement.

        

        
          
             

          

          
            3

            
              

            

          

          
             

          

        

         

        7. Notices.
          All
          notices and other communications hereunder shall be in writing. Any notice
          or
          other communication hereunder shall be deemed duly given (i) if personally
          delivered, when so delivered, (ii) if mailed, two Business Days after having
          been sent by registered or certified mail, return receipt requested, postage
          prepaid and addressed to the intended recipient as set forth below, (iii)
          if
          given by fax, once such notice or other communication is transmitted to
          the fax
          number specified below and the appropriate answer back or telephonic
          confirmation is received, provided that a copy of such notice or other
          Communication is promptly thereafter mailed in accordance with the provisions
          of
          clause (ii) above or (iv) of this Section 7, or (iv) if sent through an
          overnight delivery service in circumstances to which such service guarantees
          next day delivery, the day following being so sent:

         

        If
          to Patriot:

        

        Patriot
          Scientific Corporation

        10989
          Via
          Frontera

        San
          Diego, CA 92127

        Attn: President

        Fax: (858)
          674-5004

        

        with
          a copy to:

        

        Otto
          E.
          Sorensen, Esq.

        Luce,
          Forward, Hamilton & Scripps LLP

        600
          West
          Broadway, Suite 2600

        San
          Diego, CA 92101

        Attn: Otto
          E.
          Sorensen, Esq.

        Fax: (619)
          232-8311

        

        If
          to TPL:

        

        Technology
          Properties Limited Inc.

        P.O.
          Box
          20250

        San
          Jose,
          CA 95160

        Atm: Daniel
          E.
          Leckrone, Chairman

        Fax: (408)
          296-6637

        

        with
          a copy to:

        

        Gibson,
          Dunn & Crutcher LLP

        333
          S.
          Grand Avenue

        Los
          Angeles, California 90071

        Attn: Andrew
          E.
          Bogen, Esq.

        Fax: (213)
          229-6159

        

        
          
             

          

          
            4

            
              

            

          

          
             

          

        

         

        Any
          party
          may give any notice, request, demand, claim or other communication hereunder
          using any other means (including ordinary mail or electronic mail), but
          no such
          notice, request, demand, claim or other communication shall be deemed to
          have
          been duly given unless and until it actually is received by the individual
          for
          whom it is intended.

         

        8. Amendments;
          No Waivers.

         

        (a) Any
          provision of this Agreement may be amended or waived if, and only if such
          amendment or waiver is in writing and signed, in the case of an amendment,
          by
          all parties hereto, or in the case of a waiver, by the party against whom
          the
          waiver is to be effective.

         

        (b) No
          waiver
          by a party of any default, misrepresentation or breach of warranty or covenant
          hereunder, whether intentional or not, shall be deemed to extend to any
          prior or
          subsequent default, misrepresentation or breach of warranty or covenant
          hereunder or affect in any way any rights arising by virtue of any prior
          or
          subsequent occurrence. No failure or delay by a party in exercising any
          right,
          power or privilege hereunder shall operate as a waiver thereof nor shall
          any
          single or partial exercise thereof preclude any other or further exercise
          thereof or the exercise of any other right, power or privilege. The rights
          and
          remedies herein provided shall be cumulative and not exclusive of any rights
          or
          remedies provided by law.

         

        9. Expense.
          Except
          as provided herein, all costs and expenses incurred in connection with
          this
          Agreement shall be paid by the party incurring such cost or
          expense.

         

        10. Successors
          and Assign.
          This
          Agreement shall be binding upon and inure to the benefit of the parties
          hereto
          and their respective successors and permitted assigns. No party hereto
          may
          assign either this Agreement or any of its rights, interests or obligations
          hereunder lout the prior written approval of each other party.

         

        11. Governing
          Law.
          This
          Agreement shall be construed in accordance with and governed by the internal
          laws (without reference to choice or conflict of laws) of the State of
          Delaware.

         

        12. Counterparts;
          Effectiveness.
          This
          Agreement may be signed in any number of counterparts and the signatures
          delivered by fax, each of which shall be an original, with the effect as
          if the
          signatures thereto and hereto were upon the same instrument. This Agreement
          shall become effective when each party hereto shall have received a counterpart
          hereof signed by the other parties hereto.

         

        13. Entire
          Agreement.
          This
          Agreement (including the other agreements executed simultaneously herewith
          arid
          all Schedules and Exhibits thereto and hereto) constitutes the entire agreement
          between the parties with respect to the subject matter hereof and supersedes
          all
          prior agreements, understandings and negotiations, both written and oral,
          between the parties with respect to the subject matter of this Agreement.
          Neither this Agreement nor any provision hereof is intended to confer upon
          any
          Person other than the parties hereto any rights or remedies
          hereunder.

         

        14. Captions
          The
          captions herein are included for convenience of reference only and shall
          be
          ignored in the construction or interpretation hereof. All references to
          a
          Section include all subparts thereof.

        

        
          
             

          

          
            5

            
              

            

          

          
             

          

        

         

        15. Third-Party
          Beneficiaries.
          No
          provision of this Agreement shall create any third-party beneficiary rights
          in
          any Person (as defined in the Master Agreement).

         

        16. No
          Punitive, Exemplary, or Consequential Damages.
          The
          parties hereto expressly understand and agree that under no circumstances
          shall
          punitive, exemplary, or consequential damages be available to any party
          for
          breach of this Agreement.

        

         

        [signature
          page follows]

        

        
          
             

          

          
            6

            
              

            

          

          
             

          

        

        IN
          WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
          executed by their respective authorized officers as of the day and year
          first
          above written.

         

         

        
          	 	
                  PATRIOT
                    SCIENTIFIC CORPORATION,

                  a
                    Delaware corporation

                  

                  

                  By:
                    _______________________________

                  Name:
                    _____________________________

                  Title:
                    ______________________________

                  

                  

                  TECHNOLOGY
                    PROPERTIES LIMITED INC.,

                  a
                    California corporation

                  

                  

                  
                    By:
                      _______________________________

                    Name:
                      _____________________________

                    Title:
                      ______________________________

                  

                  

                  

                  

                  PREMIER
                    TRUST, INC.,

                  a
                    Nevada corporation

                  

                  
                    By:
                      _______________________________

                    Name:
                      _____________________________

                    Title:
                      ______________________________

                  

                

        

        
 

        
          
             

          

          
            7

            
              

            

          

          
             

          

        

         

        Exhibit
          A

         

        Escrow
          Agent’s Wire Transfer Information

        

        Torrey
          Pines Bank

        12220
          El
          Camino Real

        San
          Diego, CA 92130

        ABA/Routing
          Number: 122243635

        Beneficiary
          Account Name: ***

        Beneficiary
          Account Number: ***

        

        
          
             

          

          
            8

            
              

            

          

          
             

          

        

        Exhibit
          B

         

        TPL’s
          Wire Transfer Information

        

        Acct
          Name: ***

        Acct
          No:
          ***

        Bank
          Name:           San
          Jose
          National Bank

        1
          North
          Market Street

        San
          Jose,
          CA 95113

        ABA
          No:
          121139216

        Contact:
          Lisa Valles, Manager

        Wire
          Transfer Dept

        408-496-4880

        

        
          
             

          

          
            9

            
              

            

          

          
             

          

        

         

        Exhibit
          C

         

        Relational
          Advisors’ Wire Transfer Information

        

        Wells
          Fargo Bank for the benefit of:

        ***

        Account
          #
          ***

        ABA
          #:
          121-000-248

        Attn:
          Michael Morgan

        

        
          
             

          

          
            10

            
              

            

          

          
             

          

        

         

        Exhibit
          D

         

        Gibson,
          Dunn & Crutcher’s Wire Transfer Information

        

        Wells
          Fargo Bank

        333
          South
          Grand Avenue

        Los
          Angeles, CA. 90071-1515

        Name
          of
          account: ***

        Account
          No: ***

        ABA
          No:
          121000248

        Attn:
          Julie Saavedra

        Telephone:
          (213) 253-6146

        Fax:
          (213)628-1415

        

        
          
             

          

          
            11

            
              

            

          

          
             

          

        

         

        Exhibit
          E

         

        Patriot’s
          Wire Transfer Information

        

        Silicon
          Valley Bank, San Jose

        Routing
          #: 121140399

        For
          credit of: ***

        Credit
          Account #: ***

        

        
          
             

          

          
            12

            
              

            

          

          
             

          

        

         

        Exhibit
          F

         

        Patriot
          Rights Holders

        

        
          	
                  ***

                	
                  Chase
                    Manhattan Bank NYC

                
	
                  ***

                	
                  ABA
                    021 000 021

                
	 	
                  FBO:
                    Salomon Smith Barney

                
	 	
                  a/c:
                    ***

                
	
                  ***

                	 
	
                  ***

                	 
	 	 
	
                  ***

                	
                  Chase
                    Manhattan Bank NYC

                
	
                  ***

                	
                  ABA
                    021 000 021

                
	 	
                  FBO:
                    Salomon Smith Barney

                
	 	
                  a/c:
                    ***

                
	
                  ***

                	 
	
                  ***

                	 
	 	 
	
                  ***

                	
                  ***

                
	
                  ***

                	
                  ***

                
	
                  ***

                	 
	 	 
	
                  ***

                	
                  ***

                
	
                  ***

                	
                  ***

                
	
                  ***

                	 
	 	 
	
                  ***

                	
                  ***

                
	
                  ***

                	
                  ***

                
	
                  ***

                	 
	 	 
	
                  ***

                	
                  ***

                
	
                  ***

                	
                  ***

                
	
                  ***

                	 
	 	 
	
                  ***

                	
                  ***

                
	
                  ***

                	
                  ***

                
	
                  ***

                	 
	 	 
	
                  ***

                	
                  ***

                
	
                  ***

                	
                  ***

                
	
                  ***

                	 

        

        

        
          
             

          

          
            13

            
              

            

          

          
             

          

        

         

        Exhibit
          G

         

        P-Newco’s
          Wire Transfer Information

         

      

    

    
      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        F-1

      
         

        WAIVER,
          CONSENT AND RELEASE AGREEMENT

         

        This
          WAIVER, CONSENT AND RELEASE AGREEMENT (this “Agreement”) is made and entered
          into as of ______________, 2006, by and between PATRIOT SCIENTIFIC CORPORATION,
          a Delaware corporation (the “COMPANY”), and ____________________, an _______
          limited liability company (the “Rights Holder”).

         

        RECITALS

         

        A. WHEREAS,
          the Rights Holder holds warrants to purchase shares of the common stock,
          $_________ par value per share, of the COMPANY (the “Warrants”), as well as a
          debenture convertible into shares of the common stock of the COMPANY (the
          “Debenture”) purchased pursuant to certain Securities Purchase Agreements, by
          and between the COMPANY and the RIGHTS HOLDER (collectively, the “Securities
          Purchase Agreements”).

         

        B. WHEREAS,
          the COMPANY desires to enter into the transactions contemplated by that
          certain
          Master Agreement dated as of the date hereof, by and among the COMPANY,
          ______________, a California corporation (“_____”) and ______________ (such
          transactions referred to herein as the “Proposed Transactions”).

         

        C. WHEREAS,
          the Proposed Transactions will result in the creation of an entity (“________”)
          which will hold and manage the subject intellectual property of the COMPANY.
          As
          a part of the Proposed Transactions, the COMPANY will receive stock of
          ______
          (the “_________ Stock”) and will be entitled to receive an income stream from
          _________ (the “_________ Income”) as specified in the Master
          Agreement.

         

        D. WHEREAS,
          the Securities Purchase Agreements, the Warrants and the Debenture include
          provisions which may be implicated by the Proposed Transactions, and which
          may
          give the Rights Holder certain rights with respect to the Proposed
          Transactions.

         

        E. WHEREAS,
          the Proposed Transactions and any and all actions taken before, as of,
          or after
          the date hereof by the COMPANY (and any person acting for or on behalf
          of the
          COMPANY) or _________ that are specifically authorized by the Master Agreement
          shall be referred to herein as the “Approved Actions.”

         

        F. WHEREAS,
          the COMPANY and the Rights Holder desire to facilitate the Proposed Transactions
          by entering into this Agreement.

         

        NOW,
          THEREFORE, in consideration of the respective promises, representations,
          warranties, covenants and conditions contained in this Agreement, the parties
          hereby agree as follows:

         

        1. Consent.
          Effective upon the receipt by the Rights Holder of the consideration described
          in Section
          2
          of this
          Agreement, the Rights Holder hereby consents to, approves and ratifies
          the
          Proposed Transactions and the Approved Actions, each subject to Section
          9
          below.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        2. Conveyance
          of Warrants.
          Effective upon the receipt by the Rights Holder of the consideration described
          in Section
          7
          of this
          Agreement, the Rights Holder hereby sells, transfers and conveys to the
          COMPANY,
          free and clear of any and all liens or other adverse claims thereto, __________
          (____________) Warrants described on Exhibit
          A
          hereto.
          The Rights Holder agrees to execute any documents and take any other action
          that
          may be required to effect and memorialize such transfer of the Warrants
          to the
          COMPANY pursuant to this Section
          2.

         

        3. Warrant
          Price Reset.
          Effective upon receipt by the Rights Holder of the consideration pursuant
          to
Section
          7
          of this
          Agreement, the exercise price of the ____________ (____________) Warrants
          described on Exhibit
          B
          herein
          will be reset to ____________ dollars per share.

         

        4. Waiver
          of Right of First Refusal, Limitation of Sale or Disposition of Intellectual
          Property and Redemption Upon Major Transaction.
          Effective upon the receipt by the Rights Holder of the consideration described
          in Section
          7
          of this
          Agreement, the Rights Holder hereby waives any right of first refusal or
          any
          right to limit the sale or disposition of the COMPANY’s intellectual property,
          including but not limited to those rights set forth in Sections 4(l) and
          4(m) of
          the Securities Purchase Agreements, and waives its right to redemption
          upon a
          Major Transaction as set forth in Section 4(o) of the Securities Purchase
          Agreements, in each case to the extent necessary to allow the Proposed
          Transactions and the Approved Actions to occur, or any future transaction
          in
          which the Company may engage, all subject to Section
          9
          below.

         

        5. Waiver
          of Redemption Right.
          Effective upon the receipt by the Rights Holder of the consideration pursuant
          to
Section
          7
          of this
          Agreement, the Rights Holder waives any right to require any warrant redemption
          as a consequence of the Proposed Transactions or any future transaction
          in which
          the Company may engage, subject to Section
          9
          below.

         

        6. Release
          of Lien.
          Effective upon the receipt by the Rights Holder of the consideration pursuant
          to
Section
          7
          of this
          Agreement, the Rights Holder barely releases its liens with regard to the
          COMPANY’s intellectual property portfolio, including without limitation
          ________, and agrees to take any and all action necessary to cause all
          UCC
          financing statements, USPTO filings and other filings or documents evidencing
          such lien to be terminated, provided that the debts underlying such liens
          shall
          remain intact.

         

        7. Payment
          to Rights Holder.
          In
          consideration of the covenants, promises, and agreements set forth in this
          Agreement, the Rights Holder shall be paid $____________ pursuant to the
          Escrow
          Agreement upon the closing of the Proposed Transactions. The Rights Holder
          hereby acknowledges that such consideration constitutes good, valid and
          sufficient consideration in exchange for the covenants, promises, and agreements
          of the Rights Holder set forth in this Agreement.

         

        8. Amendment
          of Securities Purchase Agreements.
          Effective as of the receipt of consideration pursuant to Section
          7
          of this
          Agreement, the Securities Purchase Agreements shall be amended to remove
          Sections 4(l), 4(m) and 4(o) in their entirety, and such sections shall
          be of no
          further force or affect, all subject to Section
          9
          below.
          The COMPANY and the Rights Holder hereby acknowledge and agree that this
          Agreement meets all of the requirements for amendment of the Securities
          Purchase
          Agreements provided in Section 8(e) thereof.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        9. Redemption.
          Notwithstanding anything to the contrary herein, in the event that any
          one or
          more of the following occur (each, a “Redemption Trigger”), the Rights Holder,
          at its option, may require the COMPANY to effect a Warrant Redemption (as
          defined below) of any or all (at the Rights Holders’ option) of the Rights
          Holders’ Warrants (as defined below):

         

        A. The
          COMPANY merges into or is bought out by another company, or becomes a private
          company that does not have publicly traded common stock, or sells all or
          substantially all of the COMPANY’s assets, or

        B. Common
          stock of the COMPANY is tendered, purchased or exchanged pursuant to a
          tender
          offer, purchase offer or exchange offer, or

        C. There
          is
          a Change of Control (as defined below) of the COMPANY’s boards of directors, and
          one or more of the following occurs:

        (1) COMPANY
          sells, conveys, disposes of, spins off or assigns any or all of the NEWCO
          Stock,
          or any or all of its rights to receive the ____________ Income, to any
          third
          party, in each case without the Rights Holder’s written consent.

        (2) The
          COMPANY issues or sells, or agrees to issue or sell Variable Equity Securities
          (as defined below), for cash in private capital raising transactions or
          any
          securities of the Company pursuant to an equity line structure or format
          without
          obtaining the prior written approval of the Rights Holder, with the exception
          of
          any such agreements, transactions or equity lines existing as of the date
          hereof. For purposes hereof, the following shall be collectively referred
          to
          herein as, the “Variable Equity Securities”; any debt or equity securities (or
          securities pursuant to an equity line structure or similar structure) which
          are
          convertible into, exercisable or exchangeable for, or carry the right to
          receive
          additional shares of Common Stock either (i) at any conversion, exercise
          or
          exchange rate or other price that is based upon and/or varies with the
          trading
          prices of or quotations for Common Stock at any time after the initial
          issuance
          of such debt or equity security, or (ii) with a fixed conversion, exercise
          or
          exchange price that greater than a ____ (__%) discount to the then prevailing
          market or is subject to being reset at some future date at any time after
          the
          initial issuance of such debt or equity security due to a change in the
          market
          price of the Company’s Common Stock since date of initial issuance.

        

        If
          a
          Redemption Trigger has occurred and the Rights Holder elects a redemption,
          then
          any of the Rights Holders’ Warrants selected by the Rights Holder for such
          redemption shall be redeemed (“Warrant Redemption”) by the Company as of the
          record date for such Redemption Trigger at a price per share (that is,
          per share
          of common stock represented by the warrants) for each Rights Holder Warrant
          equal to the “Redemption Price,” which shall be defined as the greater of (A)
          $0.__ per share, less the Exercise Price per share in effect for that Rights
          Holder Warrant on the trading day immediately preceding the record date
          of the
          Redemption Trigger (each subject to adjustment to account for any forward
          or
          reverse stock splits), or (B) the applicable Warrant Redemption market
          Value (as
          defined below). For purposes hereof, the “Warrant Redemption Market Value” shall
          equal the aggregate of the highest Warrant Market Values (as defined below)
          for
          all of the Right Holders’ Warrants being so redeemed calculated

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        on
          any
          date during the thirty (30) business day period ending on the record date
          for
          the Redemption Trigger.

         

        For
          purposes hereof,

         

        “Change
          in Control” shall mean any change in the makeup of the COMPANY’s board of
          directors such that the remaining board members from the following group
          do not
          constitute a majority of the board: ____________, ____________, ____________,
          and ____________.

         

        “Rights
          Holders’ Warrants” shall mean all warrants to purchase common stock that have
          been issued from the Company to the Rights Holder for any reason at any
          time in
          the past up through the date hereof.

         

        “Warrant
          Market Value” shall equal the number of shares that would be issuable in a
“cashless exercise” on the date in question, under the terms of the warrant
          (without regard to any contractual, legal, or regulatory restrictions on
          such
          exercise and issuance, if any, and without regard to whether or not a sufficient
          number of shares are authorized and reserved to effect any such exercise
          and
          issuance), multiplied by the Closing Price of the Company’s common stock for the
          preceding trading day.

         

        “Closing
          Price” shall mean the closing price on the O.T.C. Bulletin Board, Nasdaq Small
          Cap Market, the National Market System (“NMS”), the New York Stock Exchange, or
          if no longer traded on the Nasdaq Small Cap Market, the National Market
          System
          (“NMS”), the New York Stock Exchange, or the O.T.C. Bulletin Board, the “Closing
          Bid Price” shall equal the closing price on the principal national securities
          exchange or the over-the-counter system on which the Common Stock is so
          traded
          and, if not available, the mean of the high and low prices on the principal
          national securities exchange or other market on which the Common Stock
          is so
          traded.

         

        10. Representations
          and Warrants of Rights Holder.
          In
          order to induce the COMPANY to enter into this Agreement, the Rights Holder
          represents and warrants to the COMPANY as follows:

         

        10.1 Full
          Knowledge.
          The
          Rights Holder acknowledges and agrees that it is fully aware of all of
          the terms
          and conditions of the Proposed Transactions, and that its representatives
          have
          had an opportunity to discuss such terms and conditions with COMPANY
          representatives, and to ask any questions the Rights Holder has deemed
          necessary.

        

        10.2 Compliance
          with Law.
          The
          execution, delivery and performance by the Rights Holder of this Agreement
          and
          the consummation of the transactions contemplated hereby, will not cause
          the
          Rights Holder to violate or contravene (i) any provision of law, (ii) any
          rule
          or regulation of any agency or government, or (iii) any order, writ, judgment,
          injunction, decree, determination or award, to which he is
          subject.

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        10.3 Authorization.
          When
          executed and delivered by the Rights Holder, this Agreement will constitute
          a
          valid and legally binding obligation of the Rights Holder enforceable in
          accordance with its terms, except as may be limited by (i) judicial principles
          respecting election of remedies or limiting the availability of specific
          performance, injunctive relief and other equitable remedies, (ii) judicial
          principles with respect to provisions contrary to public safety, and (iii)
          bankruptcy, insolvency, reorganization, moratorium or other similar laws,
          now or
          hereafter in effect, generally relating to creditors’ rights.

        

        11. Representations
          and Warranties of COMPANY.
          In
          order to induce the Rights Holder to enter into this Agreement, COMPANY
          represents and warrants to the Rights Holder as follows:

        

        11.1 Compliance
          with Law.
          The
          execution, delivery and performance by COMPANY of this Agreement and the
          consummation of the transactions contemplated hereby, will not cause COMPANY
          to
          violate or contravene (i) any provision of law, (ii) any rule or regulation
          of
          any agency or government, or (iii) any order, writ, judgment, injunction,
          decree, determination or award, to which it is subject.

        

        11.2 Authorization.
          When
          executed and delivered by COMPANY, this Agreement will constitute a valid
          and
          legally binding obligation of COMPANY enforceable in accordance with its
          terms,
          except as may be limited by (i) judicial principles respecting election
          of
          remedies or limiting the availability of specific performance, injunctive
          relief
          and other equitable remedies, (ii) judicial principles with respect to
          provisions contrary to public policy, and (iii) bankruptcy, insolvency,
          reorganization, moratorium or other similar laws, now or hereafter in effect,
          generally relating to creditors’ rights.

        

        12. Taxes.
          Each
          party shall be responsible for all taxes incurred by it as a result of
          any
          transaction contemplated by this Agreement.

        

        13. Cooperation.
          COMPANY
          and Rights Holder acknowledge that it may be necessary to execute documents
          other than those specifically referred to herein in order to consummate
          the
          transactions contemplated herein. COMPANY and Rights Holder agree to cooperate
          with each other by executing such other documents and taking such other
          action
          as may be reasonably necessary to complete the transactions in accordance
          with
          the intent of the parties as evidenced in this Agreement.

        

        
          	
                  14.

                	
                  General
                    Provisions.

                

        

        

        14.1 Survival
          of Representations and Warranties.
          All
          representations and warranties of the parties made in, pursuant to or in
          connection with this Agreement shall survive the execution and delivery
          of this
          Agreement.

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        14.2 Entire
          Agreement.
          With
          reference to the subject matter hereof, this Agreement is the complete
          and
          exclusive statement of all terms of the agreement between the parties and
          supersedes and cancels all prior and contemporaneous negotiations, agreements
          and representations, and constitutes the entire agreement between the parties.
          There are no representations, inducements, promises or agreements, oral
          or
          otherwise, with reference to the subject matter hereof, other than as expressly
          set forth herein. No modification, alteration, amendment or waiver of any
          provision hereof shall be effective unless in writing and signed by both
          parties.

        

        14.3 Successors
          Bound; Limited Assignment.
          This
          Agreement shall be binding upon and inure to the benefit of the parties
          hereto
          and their respective successors and permissible assigns, except that neither
          party shall, without prior written consent of the other, delegate, assign,
          transfer, encumber or otherwise dispose of any of its rights, duties or
          interests under this Agreement or any part thereof.

        

        14.4 Headings.
          The
          headings of the sections and paragraphs of this Agreement have been inserted
          for
          convenience of reference only and do not constitute a part of this
          Agreement.

        

        14.5 Governing
          Law.
          It is
          the intention of the parties that the laws of California, including such
          jurisdiction’s principles of conflict of law, shall govern the validity of this
          Agreement, the construction of its terms and the interpretation of the
          rights
          and duties of the parties, as such laws are applied to agreements between
          California residents entered into and to be performed entirely within
          California.

        

        14.6 Forum;
          Expenses.
          In the
          event that any cause of action, lawsuit or other proceeding is brought
          by any
          party of this Agreement because of an alleged dispute, breach or
          misrepresentation in connection with or arising under this Agreement, any
          court
          of competent jurisdiction in San Diego County shall be the sole and exclusive
          forum for such cause of action, lawsuit or proceeding, and the prevailing
          party
          in any such action, lawsuit or proceeding shall be entitled to recover,
          in
          addition to any remedy at law or equity available to any prevailing party,
          all
          reasonable costs and expenses incurred or sustained by such prevailing
          party in
          connection with such action, lawsuit or proceeding, including, without
          limitation, attorneys’ fees and court costs.

        

        14.7 Counterparts.
          This
          Agreement may be executed in two or more counterparts and by the different
          parties hereto in separate counterparts with the same effect as if all
          parties
          had signed the same document. All

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        such
          counterparts shall be deemed an original, shall be construed together and
          shall
          constitute one and the same instrument.

        

        IN
          WITNESS WHEREOF, the parties have caused this Agreement to be executed
          on the
          day and year first written above.

         

        
          
            	PATRIOT SCIENTIFIC CORPORATION	 	 
	 	 	 
	By: /s/
                    David H. Pohl 	 	By: /s/___________________________
	David H. Pohl	 	_____________________________(Name),
                    
	
                    President
                      & CEO

                  	 	_____________________________(Title)

          

        

         

        

          
            
              
              

              
              

            

            
              
              

              
                

              

            

            
              
              

              
              

            

          

        

         

        
          	
                  EXHIBIT
                    A

                  Warrants
                    Proposed to be Conveyed to Patriot Scientific

                  Corporation
                    by _______________

                

        

        

        
          	
                  Warrants
                    Held in

                  Name
                    of

                	
                  Warrant
                    Description

                	
                  Issue
                    Date

                	
                  Warrants
                    Held

                	
                  Number
                    of Warrants to be conveyed back to PTSC

                	
                  Current
                    Exercise Price as of ______

                
	
                  _____

                	
                  ____________

                	
                  ______

                	
                  ______

                	
                  ______

                	
                  $______

                
	 	 	 	
                  TOTAL:

                	
                  ______

                	 

        

        

        

        Initials
          of _________________: ____________

         

        Initials
          of Patriot Scientific Corporation: ______

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  EXHIBIT
                    B

                  Warrants
                    of ______________

                  Proposed
                    to Be Reset to $______

                

        

        

        
          	
                  Warrant
                    Description

                	
                  Issue
                    Date

                	
                  Number
                    of Warrants Held

                	
                  Number
                    of Warrants being Reset to $0.___

                	
                  Current
                    Exercise Price as of _______

                
	
                  Debenture
                    Warrant #

                	 	 	 	
                  $______

                
	
                  Debenture
                    Warrant #

                	 	 	 	
                  $______

                
	
                  Debenture
                    Warrant #

                	 	 	 	
                  $______

                
	
                  Debenture
                    Warrant #

                	 	 	 	
                  $______

                
	
                  Debenture
                    Warrant #

                	 	 	 	
                  $______

                
	
                  Debenture
                    Warrant #

                	 	 	 	
                  $______

                

        

        

        

        Initials
          of ________________: ____________

         

        Initials
          of Patriot Scientific Corporation: ______

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      
         

        EXHIBIT
          F-2

         

        WAIVER,
          CONSENT AND RELEASE AGREEMENT

         

        This
          WAIVER, CONSENT AND RELEASE AGREEMENT (this “Agreement”) is made and entered
          into as of __________, 2006, by and between PATRIOT SCIENTIFIC CORPORATION,
          a
          Delaware corporation, (the “COMPANY”), and __________, an individual residing in
          __________ County, State of __________ (the “Rights Holder”).

         

        RECITALS

         

        A. WHEREAS,
          the Rights Holder holds warrants to purchase shares of the common stock,
          $__________ par value per share, of the COMPANY (the “Warrants”), purchased
          pursuant to that certain Securities Purchase Agreement, dated as of __________,
          200__, by and among the COMPANY and the RIGHTS HOLDER (the “Securities Purchase
          Agreement”).

         

        B. WHEREAS,
          the COMPANY desires to enter into the transactions contemplated by that
          certain
          Master Agreement dated as of the date hereof, by and among the COMPANY,
          __________, a __________ corporation (“__________”) and __________ (such
          transactions referred to herein as the “Proposed Transactions”).

         

        C. WHEREAS,
          the Securities Purchase Agreement and the Warrants include provisions which
          may
          be implicated by the Proposed Transactions, and which may give the Rights
          Holder
          certain rights with respect to the Proposed Transactions.

         

        D. WHEREAS,
          the COMPANY and the Rights Holder desire to facilitate the Proposed Transactions
          by entering into this Agreement.

         

        NOW,
          THEREFORE, in consideration of the respective promises, representations,
          warranties, covenants and conditions contained in this Agreement, the parties
          hereby agree as follows:

         

        1.  Consent.
          Effective upon the receipt by the Rights Holder of the consideration pursuant
          to
Section
          2
          of this
          Agreement, the Rights Holder hereby consents to, approves and ratifies
          the
          Proposed Transactions and any and all actions taken before, as of, or after
          the
          date hereof by the COMPANY (and any person acting for or on behalf of the
          COMPANY) in connection with the Proposed Transactions.

         

        2.  Payment
          to Rights Holder.
          In
          consideration of his covenants, promises, and agreements set forth in this
          Agreement, the Rights Holder shall be paid $__________ by check to the
          address
          below upon the closing of the Proposed Transactions. The Rights Holder
          hereby
          acknowledges that such consideration constitutes good, valid and sufficient
          consideration in exchange for the covenants, promises, and agreements of
          the
          Rights Holder set forth in this Agreement.

         

        3.  Amendment
          of Securities Purchase Agreement.
          Effective as of the receipt of consideration pursuant to Section
          2
          of this
          Agreement, the Securities Purchase Agreement shall be amended to remove
          Section
          4(1) in its entirety, and such section shall be of no further force
          or

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        4.  effect.
          The COMPANY and the Rights Holder hereby acknowledge and agree that this
          Agreement meets all of the requirements for amendment of the Securities
          Purchase
          Agreement provided in Section 8(e) thereof.

         

        5.  Representations
          and Warranties of Rights Holder.
          In
          order to induce the COMPANY to enter into this Agreement, the Rights Holder
          represents and warrants to the COMPANY as follows:

         

        5.1.  Full
          Knowledge.
          The
          Rights Holder acknowledges and agrees that he is fully aware of all of
          the terms
          and conditions of the Proposed Transactions, and that he has had an opportunity
          to discuss such terms and conditions with COMPANY representatives, and
          to ask
          any questions he has deemed necessary.

         

        5.2.  Compliance
          with Law.
          The
          execution, delivery and performance by the Rights Holder of this Agreement
          and
          the consummation of the transactions contemplated hereby, will not cause
          the
          Rights Holder to violate or contravene (i) any provision of law, (ii) any
          rule
          or regulation of any agency or government, or (iii) any order, writ, judgment,
          injunction, decree, determination or award, to which he is subject.

         

        5.3.  Authorization.
          When
          executed and delivered by the Rights Holder, this Agreement will constitute
          a
          valid and legally binding obligation of the Rights Holder enforceable in
          accordance with its terms, except as may be limited by (i) judicial principles
          respecting election of remedies or limiting the availability of specific
          performance, injunctive relief and other equitable remedies, (ii) judicial
          principles with respect to provisions contrary to public policy, and (iii)
          bankruptcy, insolvency, reorganization, moratorium or other similar laws,
          now or
          hereafter in effect, generally relating to creditors’ rights.

         

        6.  Representations
          and Warranties of COMPANY.
          In
          order to induce the Rights Holder to enter into this Agreement, COMPANY
          represents and warrants to the Rights Holder as follows:

         

        6.1.  Compliance
          with Law.
          The
          execution, delivery and performance by COMPANY of this Agreement and the
          consummation of the transactions contemplated hereby, will not cause COMPANY
          to
          violate or contravene (i) any provision of law, (ii) any rule or regulation
          of
          any agency or government, or (iii) any order, writ, judgment, injunction,
          decree, determination or award, to which it is subject.

         

        6.2.  Authorization.
          When
          executed and delivered by COMPANY, this Agreement will constitute a valid
          and
          legally binding obligation of COMPANY enforceable in accordance with its
          terms,
          except as may be limited by (i) judicial principles respecting election
          of
          remedies or limiting the availability of specific performance, injunctive
          relief
          and other equitable remedies, (ii) judicial principles with respect to
          provisions contrary to public policy, and (iii) bankruptcy, insolvency,
          reorganization, moratorium or other similar laws, now or hereafter in effect,
          generally relating to creditors’ rights.

         

        7.  Taxes.
          Each
          party shall be responsible for all taxes incurred by it as a result of
          any
          transaction contemplated by this Agreement.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        8.  Cooperation.
          COMPANY
          and Rights Holder acknowledge that it may be necessary to execute documents
          other than those specifically referred to herein in order to consummate
          the
          transactions contemplated herein. COMPANY and Rights Holder agree to cooperate
          with each other by executing such other documents and taking such other
          action
          as may be reasonably necessary to complete the transactions in accordance
          with
          the intent of the parties as evidenced in this Agreement.

         

        9.  General
          Provisions.

         

        9.1.  Survival
          of Representations and Warranties.
          All
          representations and warranties of the parties made in, pursuant to or in
          connection with this Agreement shall survive the execution and delivery
          of this
          Agreement.

         

        9.2.  Severability.
          Should
          any one or more of the provisions of this Agreement or of any agreement
          entered
          into pursuant to this Agreement be determined to be illegal or unenforceable,
          then such illegal or unenforceable provision shall be modified by the proper
          court only to the extent necessary and possible to make such provision
          enforceable, and such modified provision and all other provisions of this
          Agreement and of each other agreement entered into pursuant to this Agreement
          shall be given effect separately from the provision or portion thereof
          determined to be illegal or unenforceable and shall not be affected
          thereby.

         

        9.3.  Entire
          Agreement.
          With
          reference to the subject matter hereof, this Agreement is the complete
          and
          exclusive statement of all terms of the agreement between the parties and
          supersedes and cancels all prior and contemporaneous negotiations, agreements
          and representations, and constitutes the entire agreement between the parties.
          There are no representations, inducements, promises or agreements, oral
          or
          otherwise, with reference to the subject matter hereof, other than as expressly
          set forth herein. No modification, alteration, amendment or waiver of any
          provision hereof shall be effective unless in writing and signed by both
          parties.

         

        9.4.  Successors
          Bound; Limited Assignment.
          This
          Agreement shall be binding upon and inure to the benefit of the parties
          hereto
          and their respective successors and permissible assigns, except that neither
          party shall, without prior written consent of the other, delegate, assign,
          transfer, encumber or otherwise dispose of any of its rights, duties or
          interests under this Agreement or any part thereof.

         

        9.5.  Headings.
          The
          headings of the sections and paragraphs of this Agreement have been inserted
          for
          convenience of reference only and do not constitute a part of this
          Agreement.

         

        9.6.  Governing
          Law.
          It is
          the intention of the parties that the laws of California, including such
          jurisdiction’s principles of conflict of law, shall govern the validity of this
          Agreement, the construction of its terms and the interpretation of the
          rights
          and duties of the parties, as such laws are applied to agreements between
          California residents entered into and to be performed entirely within
          California.

         

        9.7.  Forum;
          Expenses.
          In the
          event that any cause of action, lawsuit or other proceeding is brought
          by any
          party of this Agreement because of an alleged dispute, breach or

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        9.8.  misrepresentation
          in connection with or arising under this Agreement, any court of competent
          jurisdiction in San Diego County shall be the sole and exclusive forum
          for such
          cause of action, lawsuit or proceeding, and the prevailing party in any
          such
          action, lawsuit or proceeding shall be entitled to recover, in addition
          to any
          remedy at law or equity available to any prevailing party, all reasonable
          costs
          and expenses incurred or sustained by such prevailing party in connection
          with
          such action, lawsuit or proceeding, including, without limitation, attorneys’
fees and court costs.

         

        9.9.  Counterparts.
          This
          Agreement may be executed in two or more counterparts and by the different
          parties hereto in separate counterparts with the same effect as if all
          parties
          had signed the same document. All such counterparts shall be deemed an
          original,
          shall be construed together and shall constitute one and the same
          instrument.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        IN
          WITNESS WHEREOF, the parties have caused this Agreement to be executed
          on the
          day and year first written above.

         

        
          
            
              	PATRIOT SCIENTIFIC CORPORATION	 	RIGHTS HOLDER
	 	 	 
	By: /s/
                      David H. Pohl 	 	By: /s/___________________________
	David H. Pohl	 	_____________________________(Name)
	
                      President
                        & CEO

                    	 	
                    

            

          

           

           

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        G

      
         

        AGREEMENT
          AND PLAN OF MERGER

        BY
          AND AMONG

        PATRIOT
          SCIENTIFIC CORPORATION,

        P-NEWCO
          LLC

        TECHNOLOGY
          PROPERTIES LIMITED INC.

        AND

        TPL
          NEWCO, LLC

         

         

        This
          Agreement and Plan of Merger (this “Merger
          Agreement”)
          is
          made as of June 15, 2005, by and among PATRIOT SCIENTIFIC CORPORATION, a
          Delaware corporation (“Patriot”),
          P-NEWCO LLC, a Delaware limited liability company wholly owned by Patriot
          (“P-Newco"),
          TECHNOLOGY PROPERTIES LIMITED INC., a California corporation (“TPL”),
          and
          TPL NEWCO, LLC, a Delaware limited liability company wholly owned by TPL
          (“T-Newco”).
          Capitalized terms used but not defined herein shall have the meanings given
          to
          such terms in that certain agreement dated as of June 7, 2005 by and among
          Patriot, TPL and Charles H. Moore (“Moore”)
          (the
“Master
          Agreement”).

         

        WHEREAS,
          Patriot, TPL and Moore have entered into the Master Agreement which provides
          for, among other things, the creation by Patriot and TPL of P-Newco and
          T-Newco,
          respectively, the respective licensing to P-Newco and T-Newco of certain
          of
          Patriot and TPL’s rights with respect to the MSD Patents, and the merger of
          T-Newco with and into P-Newco, with P-Newco continuing as the surviving
          entity
          (the “Surviving
          Entity”),
          in
          furtherance of the transactions contemplated by the Master
          Agreement;

         

        WHEREAS,
          pursuant to the Delaware Limited Liability Company Act, the board of directors
          of Patriot and TPL, the sole members of P-Newco and T-Newco, respectively,
          have
          adopted and recommended this Merger Agreement and determined that it is
          advisable and in the best interests of P-Newco and T-Newco that T-Newco
          merge
          with and into P-Newco upon the terms and conditions provided herein (the
          “Merger”).

         

        NOW,
          THEREFORE, in consideration of the foregoing recitals and the mutual agreements
          herein contained and of the mutual benefits provided hereby, the parties
          hereto
          agree as follows:

         

        1. Merger.
          The
          effective date of the Merger shall be June 15, 2005 (the “Effective
          Date”).
          On
          the Effective Date, T-Newco shall be merged with and into P-Newco and the
          separate existence of T-Newco shall thereupon cease. P-Newco shall continue
          its
          existence in the State of Delaware as the Surviving Entity.

         

        2. Certificate
          of Formation.
          The
          Certificate of Formation of P-Newco, as in effect immediately prior to
          the
          Effective Date, shall continue to be the Certificate of Formation of the
          Surviving Entity until duly amended in accordance with the provisions of
          the
          laws of the State of Delaware.

         

        3. Conversion
          of Membership Interests.
          Upon
          the Effective Date, by virtue of the Merger and without any action on the
          part
          of TPL, TPL's membership interests in T-Newco

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        outstanding
          immediately prior to the Merger shall automatically be cancelled, and a
          fifty
          percent membership interests in the Surviving Entity shall be issued to
          TPL in
          exchange therefor. 

         

        4. Subsequent
          Action.
          If at
          any time after the Effective Date it shall be necessary or desirable to
          take any
          action or execute, deliver or file any instrument or document in order
          to vest,
          perfect or confirm of record in the Surviving Entity the title to any property
          or any rights of T-Newco, or otherwise to carry out the provisions of this
          Merger Agreement, the managers of the Surviving Entity are hereby authorized
          and
          empowered on behalf of T-Newco and in its name to take such action and
          execute,
          deliver and file such instruments and documents.

         

        5. Rights
          and Duties of Surviving Entity.
          On the
          Effective Date, the Surviving Entity shall thereupon and thereafter possess
          all
          rights, privileges, immunities, licenses, and permits (whether of a public
          or
          private nature) of T-Newco; and all property (real, personal and mixed),
          all
          debts due on whatever account, all choses in action, and all and every
          other
          interest of or belonging to or due to T-Newco shall continue and be taken
          and
          deemed to be transferred to and vested in the Surviving Entity, without
          further
          act or deed, and the Surviving Entity shall thenceforth be responsible
          and
          liable for all the liabilities and obligations of T-Newco.

         

        6. Representations
          and Warranties.

         

        (a) Incorporation
          of Representations and Warranties.
          Patriot
          and TPL hereby reaffirm the representations and warranties made in the
          Master
          Agreement as if such representations and warranties were set forth fully
          herein.

         

        (b) Existence
          and Power.
          Each of
          Patriot and TPL represents and warrants that P-Newco and T-Newco, respectively,
          is a Delaware limited liability company, duly formed and validly existing
          under
          the laws of the State of Delaware, and has all power and authority necessary
          to
          enter into this Merger Agreement and consummate the Merger.

         

        (c) Authorization.
          Each of
          Patriot and TPL represents and warrants that the execution, delivery and
          performance by P-Newco and T-Newco, respectively, of this Merger Agreement
          and
          the Merger contemplated hereby has been duly and validly authorized by
          each of
          Patriot and P-Newco, on the one hand, and each of TPL and T-Newco, on the
          other
          hand, under Applicable Law, and no other corporate proceedings on the part
          of
          Patriot and P-Newco, on the one hand, and TPL and T-Newco, on the other
          hand,
          are necessary to authorize or consummate this Merger Agreement or the Merger
          contemplated hereby (other than the filing and recordation of the appropriate
          documents with respect to the Merger in accordance with the laws of the
          State of
          Delaware).

         

        (d) Capitalization.
          Each of
          Patriot and TPL represents and warrants that it is the sole shareholder
          of
          P-Newco and T-Newco, respectively.

         

        (e) Valid
          and Existing License; Sole Asset.
          Patriot
          and P-Newco, on the one hand, and TPL and T-Newco, on the other hand, represent
          and warrant that the Newco Licenses, the form of which is attached as
          Exhibit C to the Master Agreement, have been validly executed and delivered
          pursuant to the terms of the Master Agreement, and that each of P-Newco
          and
          T-Newco has good and valid title to all rights with respect to the MSD
          Patents
          granted by Patriot and TPL to P-Newco and T-Newco, respectively, pursuant
          to the
          Newco Licenses. Patriot and

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        P-Newco,
          on the one hand, and TPL and T-Newco, on the other hand, further represent
          and
          warrant that the Newco Licenses are the sole assets of P-Newco and
          T-Newco.

         

        (f) Purpose;
          Absence of Changes.
          Each of
          Patriot and TPL represents and warrants that P-Newco and T-Newco, respectively,
          were formed and have been utilized from the date of formation until the
          date
          hereof solely to effect the transactions contemplated by this Merger Agreement
          and the Master Agreement, and that P-Newco and T-Newco have not engaged
          in any
          other activity whatsoever except entering into the Newco Licenses referred
          to in
          subsection (e) above, and taking any action necessary to facilitate the
          Merger
          in a manner consistent with the terms of this Merger Agreement and the
          Master
          Agreement.

         

        (g) No
          Liabilities.
          Patriot
          and P-Newco, on the one hand, and TPL and T-Newco, on the other hand, represent
          and warrant that P-Newco and T-Newco do not now have, not have they ever
          had,
          any liabilities whatsoever, including but not limited to any tax liabilities
          or
          current or prospective litigation.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        IN
          WITNESS WHEREOF, the parties hereto have caused this Merger Agreement to
          be duly
          executed by their respective authorized officers as of the day and year
          first
          above written. 

        
          	 	 
	 	
                  PATRIOT
                    SCIENTIFIC CORPORATION, 
a
                    Delaware corporation

                   

                  By:______________________________________

                  Name:____________________________________

                  Title:_____________________________________

                
	 	 
	 	
                  P-NEWCO
                    LLC, a
                    Delaware limited liability company

                   

                  By:______________________________________

                  Name:____________________________________

                  Title:_____________________________________

                
	 	 
	 	
                  TECHNOLOGY
                    PROPERTIES LIMITED INC., 
a
                    California corporation

                   

                  By:______________________________________

                  Name:____________________________________

                  Title:_____________________________________

                
	 	 
	 	
                  TPL
                    NEWCO, LLC, a
                    Delaware limited liability company

                   

                  By:______________________________________

                  Name:____________________________________

                  Title:_____________________________________

                
	 	 

        

        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        EXHIBIT
          H

         

        
          	
                  ***

                	
                  Indicates
                    material omitted pursuant to an application for confidential
                    treatment and
                    that material has been filed separately with the
                    Commission.

                

        

         

        

        PATENT
          LICENSE AGREEMENT

        

        

        This
          PATENT LICENSE AGREEMENT (“Agreement”) is entered into by and between PATRIOT
          SCIENTIFIC CORPORATION, a Delaware corporation (“Licensor”) having its principal
          place of business at 10989 Via Frontera, San Diego, California 92127, and
          INTEL CORPORATION, a Delaware corporation, located at 2200 Mission College
          Blvd., Santa Clara, CA 95052 (“Intel”).

         

        RECITALS

        

        WHEREAS,
          ***

         

        ***

         

        ***

         

        ***

         

        NOW,
          THEREFORE, in consideration of the promises and the mutual promises and
          covenants contained herein and for other good and valuable consideration,
          the
          receipt and sufficiency of which are hereby acknowledged, the parties hereto
          agree as follows:

         

        DEFINITIONS

        

        Capitalized
          terms used in this Agreement that are not otherwise defined herein shall
          have
          the meaning assigned to them in the Intel PLA. For the avoidance of doubt,
          the
          term “License” in this Agreement shall refer to Patriot Scientific
          Corporation.

         

        Article
          1. License
          Grant

         

        1.1 Subject
          to the terms and conditions of this Agreement, Licensor hereby grants to
          Licensee ***

         

        1.2 Right
          to
          License. In the event Licensor does not have the right to grant a license
          under
          any particular patent right of the scope set forth herein, then the license
          granted herein under such patent right shall be of the broadest scope which
          Licensor has the right to grant. If Licensor

         

        (a) owns
          any
          rights in any Patent; or

        (b) has
          the
          right to enforce or control the enforcement of any rights in any Patent;
          or

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        (c) can
          exercise any significant influence over the enforcement of any rights in
          any
          Patent but Licenser does not have the right to license those rights as
          broadly
          as set forth in Section 1.1 to Licensee hereunder (“Restricted Patent
          Rights”), then, if and to the extent that such Restricted Patent Rights would
          have been licensed to the Licensee if Licensor had the right to license
          such
          Patents;

        (d) Licenser
          grants to the Licensee for Intel Licensed Products an immunity from suit
          for
          infringement of such Restricted Patent Rights of a scope identical to the
          rights
          that would have been granted hereunder if Licensor has the right to license
          such
          Restricted Patent Rights;

        (e) Licensor
          shall not give their assent irrespective of whether that assent is required
          to
          allow a third party entity to assert the Restricted Patent Rights against
          the
          Licensed Products of the Licensee; and

        (f) Licensor
          agrees to indemnify arid hold harmless Licensee against any monetary
          compensation, including those for damages and/or royalties, paid or to
          be paid
          by Licensee as a result of actual or threatened assertion of rights by
          the
          holder of the Restricted Patent Rights against Intel Licensed Products
          to the
          extent attributable to such Restricted Patent Rights, but only to the extent
          that such damage and/or royalty, directly or indirectly, benefits
          Licenser.

        

        1.3 Further
          Assurances. To the extent Licenser does not have the right to grant any
          or all
          of the license rights granted in Section 1 of this Agreement or to the
          extent this Agreement does not grant such license rights, Licenser hereby
          grants
          such licenses to the fullest extent of their rights under the Patents and
          to the
          fullest extent possible under the law, and shall execute whatever documents
          are
          necessary to effectuate such license grant.

         

        1.4 “Patents”
          shall mean all of the patents and patent applications listed on Appendix
          1, and
          any patent, patent application or patent right throughout the Territory
          including, without limitation, any provisional, divisional, continuation,
          continuation-in-part, substitute, renewal, reissue, extension, confirmation,
          reexamination or registration thereof and any patent issuing therefrom
          including
          any substitute, renewal, reissue, extension, confirmation, reexamination
          or
          registration thereof

         

        Article
          2. Effective
          Date of License Grants.

         

        2.1. The
          effective date of the license grant to each individual Patent licensed
          to Intel
          hereunder shall be the filing date of such Patent.

         

        Article
          3. Consideration.

         

        3.1 As
          full
          consideration for the rights granted by Licensor to Licensee in Article I
          hereunder, and notwithstanding any rights Intel may have ***
          shall
          become immediately due and payable upon the execution of this Agreement
          by both
          parties. Licensor hereby acknowledges the adequacy of this consideration
          paid by
          Licensee to Licensor in consideration for the rights granted by Licensor
          in
          Article 1 hereunder, including without limitation ***.

         

        3.2 The
          payment of the ***
          receives
          Notice of the triggering event by wire transfer to:

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        Torrey
          Pines Bank

         

        12220
          El
          Camino Real

        San Diego,
          CA 92130

        ABA/Routing
          Number: 122243635

        Beneficiary
          Account Name: ***

        Beneficiary
          Account Number: ***

        

        Article
          4. Other
          Intel PLA Provisions

         

        4.1 All
          provisions of Articles 4 through Article 9 are hereby incorporated
          herein by this reference, provided only that

         

        (a) Patriot
          Scientific Corporation shall be substituted, mutatis
          mutandis for
          the
          terms “***”
and
          “Licensor” found throughout each of those provisions of the Intel
          PLA;

         

        (b) Notices
          to Licensor shall be delivered to the following address or facsimile:

         

        Patriot
          Scientific Corporation

        10989
          Via
          Frontera

        San Diego,
          CA 92127

        Attn: President

        Fax: 858-674-5005

        

        (c) Section 4.3
          shall be deleted in its entirety and replaced with the following:

         

        ***

         

        ;
          and

         

        (d) Section 9.18
          shall be deleted in its entirety and replaced with the following:

         

        ***

         

        Article
          5. ***

         

        ***

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        IN
          WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
          as of the date first above written.

         

        INTEL
          CORPORATION

         

        

        

        By:__________________________________

        Name:

        Title:

        Date:
          May 27, 2005

        

        

        PATRIOT
          SCIENTIFIC CORPORATION

        

        

        By:__________________________________

        Name:

        Title:

        Date:
          May 27, 2005

        

        

        ***

        

        ***

        

        

        By:__________________________________

        Name:
          ***

        Title:
          ***

        Date:
          May
          25, 2005

        

        

        ***

        

        

        By:__________________________________

        Name:
          ***

        Title:
          ***

        Date:
          May
          25, 2005

        

        CHARLES
          H. MOORE

        

        

        By:__________________________________

        Name:
          Charles H. Moore

        Date:
          May
          25, 2005

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        
           

          EXHIBIT
            I

          

          THIS
            WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
            OR ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
            PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXERCISED UNLESS (i)
            A
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE
            SECURITIES
            LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (ii) AN EXEMPTION
            FROM
            REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
            LAWS IS
            AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.

          

          AN
            INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS
            MUST RELY
            ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS
            INVOLVED.

          

          
            	
                    Warrant
                      to Purchase

                  	
                    Warrant
                      Number _____

                  
	
                    _______________
                      shares

                  	 

          

          

          Warrant
            Agreement

          and

          Warrant
            to Purchase Common Stock

          of

          PATRIOT
            SCIENTIFIC CORP.

           

          THIS
            WARRANT AGREEMENT AND WARRANT TO PURCHASE COMMON STOCK (this “Warrant” or this
“Agreement”) CERTIFIES that _____________ or any subsequent holder hereof
            (“Holder”) has the right to purchase from Patriot Scientific Corp., a Delaware
            corporation (the “Company”), up to ___________ fully paid and non-assessable
            shares, of the Company's common stock, $___________ par value per share
            (“Common
            Stock”), subject to adjustment as provided herein, at a price equal to the
            Exercise Price as defined in Section 3 below, and in the amounts provided
            in
            Section 2 below, at any time beginning on the Date of Issuance (defined
            below)
            and ending at 5:00 p.m., New York, New York time, on the date that is
            seven (7)
            years after the Date of Issuance (the “Exercise Period”).

           

          Holder
            agrees with the Company that this Warrant is issued and all rights hereunder
            shall be held subject to all of the conditions, limitations and provisions
            set
            forth herein.

           

          1. Date
            of Issuance and Term.

           

          This
            Warrant shall be deemed to be issued on ___________, 200_ (“Date of Issuance”).
            The term of this Warrant is seven (7) years from the Date of
            Issuance.

           

          2. Exercise.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          (a) Amount
            of Exercise.
            The
            Holder hereof shall be entitled to exercise this Warrant at any time
            and from
            time to time in accordance with the following schedule:

           

          (1) Upon
            the
            Closing (as defined herein), the Holder shall be entitled to exercise
            this
            Warrant to purchase ___________ shares of Common Stock.

           

          (2) Upon
            the
            Trigger Price (as defined herein) reaching $_________, the Holder shall
            be
            entitled to exercise this Warrant to purchase an additional ___________
            shares
            of Common Stock.

           

          (3) Upon
            the
            Trigger Price reaching $_________, the Holder shall be entitled to exercise
            this
            Warrant to purchase an additional ___________ shares of Common
            Stock.

           

          (4) Upon
            the
            Trigger Price reaching $________, the Holder shall be entitled to exercise
            this
            Warrant to purchase an additional ___________ shares of Common
            Stock.

           

          “Closing”
            shall have the meaning given that term in the Master Agreement by and
            among
            Patriot, ___________, and ___________, dated as of ___________, 200_
            (the
“Master Agreement”).

           

          “Trading
            Day” shall mean any day on which the Common Stock of the Company is traded
            for
            any period on the OTC-BB (as defined below), or on the principal securities
            exchange or other securities market on which the Common Stock is then
            being
            traded.

           

          “Trigger
            Price” shall mean the closing price of the Company’s Common Stock on any Trading
            Day as reported by, or based upon data reported by, Bloomberg Financial
            Markets
            or an equivalent reliable reporting service.

           

          (b) Manner
            of Exercise.
            During
            the Exercise Period, this Warrant may be exercised as to all or any lesser
            number of full shares of Common Stock covered hereby in accordance with
            the
            provisions of this Section 2 (the “Warrant Shares”) upon surrender of this
            Warrant, with the Exercise Form attached hereto as Exhibit A (the “Exercise
            Form”) duly completed and executed, together with the full Exercise Price
            (as
            defined below) for each share of Common Stock as to which this Warrant
            is
            exercised, at the office of the Company, Patriot Scientific Corporation,
            Attn:
            David H. Pohl, CEO; 10989 Via Frontera, San Diego, CA 92127; Telephone:
            (858)
            674-5000, Facsimile: (858) 674-5005 or at such other office or agency
            as the
            Company may designate in writing, by overnight mail, with an advance
            copy of the
            Exercise Form sent to the Company and its Transfer Agent by facsimile
            (such
            surrender and payment of the Exercise Price hereinafter called the “Exercise of
            this Warrant”).

           

          (c) Date
            of Exercise.
            The
“Date of Exercise” of the Warrant shall be defined as the date that the advance
            copy of the completed and executed Exercise Form is sent by facsimile
            to the
            Company, provided that the original Warrant and Exercise Form are received
            by
            the Company as soon as practicable thereafter. Alternatively, the Date
            of
            Exercise shall be defined as the date the original Exercise Form is received
            by
            the Company, if Holder has not sent

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          advance
            notice by facsimile. The Company shall not be required to deliver the
            shares of
            Common Stock to the Holder until the requirements of Section 2(b) above
            are
            satisfied.

           

          (d) Cancellation
            of Warrant.
            This
            Warrant shall be canceled upon the Exercise in full of this Warrant,
            and, as
            soon as practical after the Date of Exercise, Holder shall be entitled
            to
            receive Common Stock for the number of shares purchased upon such Exercise
            of
            this Warrant, and if this Warrant is not exercised in full, Holder shall
            be
            entitled to receive a new Warrant (containing terms identical to this
            Warrant)
            representing any unexercised portion of this Warrant in addition to such
            Common
            Stock.

           

          (e) Holder
            of Record.
            Each
            person in whose name any Warrant for shares of Common Stock is issued
            shall, for
            all purposes, be deemed to be the Holder of record of such shares on
            the Date of
            Exercise of this Warrant, irrespective of the date of delivery of the
            Common
            Stock purchased upon the Exercise of this Warrant. Nothing in this Warrant
            shall
            be construed as conferring upon Holder any rights as a stockholder of
            the
            Company.

           

          3. Payment
            of Warrant Exercise Price.

           

          The
            Exercise Price (“Exercise Price”) shall equal $___________ per
            share.

           

          Payment
            of the Exercise Price may be made by either of the following, or a combination
            thereof, at the election of Holder:

           

          (i) Cash
            Exercise:
            cash,
            bank or cashiers check or wire transfer; or

           

          
            	 	
                    (ii)

                  	
                    Cashless
                      Exercise:
                      surrender of this Warrant at the principal office of the Company
                      together
                      with notice of cashless election, in which event the Company
                      shall issue
                      Holder a number of shares of Common Stock computed using the
                      following
                      formula:

                  

          

           

          X=Y
            (A-B)/A

           

          where:
            X
            = the number of shares of Common Stock to be issued to Holder.

           

          Y
            = the
            number of shares of Common Stock for which this Warrant is being
            exercised.

           

          A
            = the
            Market Price of one (1) share of Common Stock (for purposes of this Section
            3
            (ii), where “MARKET PRICE,” as of any date, means the Volume Weighted Average
            Price (as defined herein) of the Company's Common Stock during the ten
            (10)
            consecutive trading day period immediately preceding the date in
            question.

           

          As
            used
            herein, the “VOLUME WEIGHTED AVERAGE PRICE” for any security as of any date
            means the volume weighted average sale price on the Over the Counter
            Electronic
            Bulletin Board (the

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          “OTC-BB”)
            as reported by, or based upon data reported by, Bloomberg Financial Markets
            or'
            an equivalent, reliable reporting service mutually acceptable to and
            hereafter
            designated by holders of a majority in interest of the Warrants and the
            Company
            (“BLOOMBERG”) or, if the OTC-BB is not the principal trading market for such
            security, the volume weighted average sale price of such security on
            the
            principal securities exchange or trading market where such security is
            listed or
            traded as reported by Bloomberg, or, if no volume weighted average sale
            price is
            reported for such security, then the last closing trade price of such
            security
            as reported by Bloomberg, or, if no last closing trade price is reported
            for
            such security by Bloomberg, the average of the bid prices of any market
            makers
            for such security that are listed in the “pink sheets” by the National Quotation
            Bureau, Inc. If the Volume Weighted Average Price cannot be calculated
            for such
            security on such date in the manner provided above, the volume weighted
            average
            price shall be the fair market value as mutually determined by the Company
            and
            the holders of a majority in interest of the Warrants being exercised
            for which
            the calculation of the volume weighted average price is required in order
            to
            determine the Exercise Price of such Warrants. “TRADING DAY” shall mean any day
            on which the Common Sock is traded for any period on the OTC-BB, or on
            the
            principal securities exchange or other securities market on which the
            Common
            Stock is then being traded.

           

          B
            = the
            Exercise Price.

           

          For
            purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended,
            understood and acknowledged that the Common Stock issuable upon exercise
            of this
            Warrant in a cashless exercise transaction shall be deemed to have been
            acquired
            at the time this Warrant was issued. Moreover, it is intended, understood
            and
            acknowledged that the holding period for the Common Stock issuable upon
            exercise
            of this Warrant in a cashless exercise transaction shall be deemed to
            have
            commenced on the date this Warrant was issued.

           

          4. Holder’s
            Representations and Warranties.

           

          Holder
            represents and warrants to the Company that:

           

          (a) Incorporation
            of Representations and Warranties. The
            representations and warranties of the Holder contained in the Master
            Agreement
            are hereby incorporated by reference as if fully set forth herein.

           

          (b) Investment
            Purpose.
            As of
            the date hereof, Holder is purchasing the Warrants and the Warrant Shares
            (collectively, the “Securities”) for its own account and not with a present view
            towards the public sale or distribution thereof, except pursuant to sales
            registered or exempted from registration under the 1933 Act; PROVIDED,
            HOWEVER,
            that by making the

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          representations
            herein, Holder does not agree to hold the Securities for any minimum
            or other
            specific term and reserves the right to dispose of the Securities at
            any time in
            accordance with or pursuant to a registration statement or an exemption
            under
            the 1933 Act and applicable state securities laws.

           

          (c) Reliance
            On Exemptions.
            Holder
            understands that the Securities are being offered and sold to it in reliance
            upon specific exemptions from the registration requirements of United
            States
            federal and state securities laws and that the Company is relying upon
            the truth
            and accuracy of, and Holder's compliance with, the representations, warranties,
            agreements, acknowledgments and understandings of Holder set forth herein
            in
            order to determine the availability of such exemptions and the eligibility
            of
            Holder to acquire the Securities.

           

          (d) Governmental
            Review.
            Holder
            understands that no United States federal or state agency or any other
            government or governmental agency has passed upon or made any recommendation
            or
            endorsement of the Securities.

           

          (e) Transfer
            or Re-sale.
            Holder
            understands that (i) except as provided in the Registration Rights Agreement,
            the sale or re-sale of the Securities has not been and is not being registered
            under the 1933 Act or any applicable state securities laws, and the Securities
            may not be transferred or resold unless (a) the Securities are sold pursuant
            to
            an effective registration statement under the 1933 Act, (b) Holder shall
            have
            delivered to the Company an opinion of counsel (which opinion shall be
            in form,
            substance and scope reasonably satisfactory to counsel to the Company)
            to the
            effect that the Securities to be sold or transferred may be sold or transferred
            pursuant to an exemption from such registration, (c) the Securities are
            sold or
            transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933
            Act (or a successor rule) (“RULE 144”) of the Holder who agrees to sell or
            otherwise transfer the Securities only in accordance with this Section
            2(f) and
            who is an Accredited Investor, or (d) the Securities are sold pursuant
            to Rule
            144; and (ii) any sale of such Securities made in reliance on Rule 144
            may be
            made only in accordance with the terms of said Rule and further, if said
            Rule is
            not applicable, any re-sale of such Securities under circumstances in
            which the
            seller (or the person through whom the sale is made) may be deemed to
            be an
            underwriter (as that term is defined in the 1933 Act) may require compliance
            with some other exemption under the 1933 Act or the rules and regulations
            of the
            SEC thereunder. Notwithstanding the foregoing or anything else contained
            herein
            to the contrary, the Securities may be pledged as collateral in connection
            with
            a bona
            fide
            margin
            account or other lending arrangement.

           

          (f) Legends.
            Holder
            understands that the Warrants and, until such time as the Warrant Shares
            have
            been registered under the 1933 Act as contemplated by the Registration
            Rights
            Agreement or otherwise may be sold pursuant to Rule 144 without any restriction
            as to the number of securities as of a particular date that can then
            be
            immediately sold, the Warrant Shares, may bear a restrictive legend in
            substantially the following form (and a stop-transfer order may be placed
            against transfer of the certificates for such Securities):

           

          The
            securities represented by this certificate have not been registered under
            the
            Securities Act of 1933, as amended, or applicable state securities laws.
            The
            securities may not be sold, transferred or assigned in the absence of
            an
            effective registration

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          statement
            for the securities under said Act, or an opinion of counsel, in form,
            substance
            and scope reasonably satisfactory to counsel to the Company, that registration
            is not required under said Act or unless sold pursuant to Rule 144 under
            said
            Act.

           

          Upon
            the
            request of any holder and the surrender of certificates, the legend set
            forth
            above shall be removed and the Company shall issue a certificate without
            such
            legend to the holder of any Security upon which it is stamped, if (a)
            such
            Security is registered for sale under an effective registration statement
            filed
            under the 1933 Act or otherwise may be sold pursuant to Rule 144 without
            any
            restriction as to the number of securities as of a particular date that
            can then
            be immediately sold, or (b) such holder provides the Company with an
            opinion of
            counsel, in form, substance and scope reasonably satisfactory to counsel
            to the
            Company, to the effect that a public sale or transfer of such Security
            may be
            made without registration under the 1933 Act and such sale or transfer
            is
            effected or (c) such holder provides the Company with reasonable assurances
            that
            such Security can be sold pursuant to Rule 144. Holder agrees to sell
            all
            Securities, including those represented by a certificate(s) from which
            the
            legend has been removed, in compliance with applicable prospectus delivery
            requirements, if any.

           

          (g) Knowledge
            and Experience. Holder
            has such knowledge and experience in financial and business matters that
            it is
            capable of evaluating the merits and risks of the investment in the
            Securities.

           

          5. Company’s
            Representations and Warranties.

           

           

          The
            Company represents and warrants to Holder that, except as set forth on
            the
            Company's disclosure schedules to the Master Agreement:

           

          (a) Incorporation
            of Representations and Warranties.
            The
            representations and warranties of the Company contained in the Master
            Agreement
            are hereby incorporated by reference as if fully set forth herein.

           

          (b) Issuance
            of Shares.
            Upon
            issuance upon exercise of the Warrants in accordance with their terms,
            the
            Warrant Shares will be validly issued, fully paid and non-assessable,
            and free
            from all taxes, liens, claims and encumbrances and shall not be subject
            to
            preemptive rights or other similar rights of stockholders of the Company
            and
            will not impose personal liability upon the holder thereof.

           

          (c) No
            Integrated Offering.
            Neither
            the Company, nor any of its affiliates, nor any person acting on its
            or their
            behalf, has directly or indirectly made any offers or sales of any security
            or
            solicited any offers to buy any security under circumstances that would
            require
            registration under the 1933 Act of the issuance of the Securities to
            Holder. The
            issuance of the Securities to Holder will not be integrated with any
            other
            issuance of the Company's securities (past, current or future) for purposes
            of
            any stockholder approval provisions applicable to the Company or its
            securities.

           

          (d) Insurance.
            The
            Company and each of its subsidiaries are insured by insurers of recognized
            financial responsibility against such losses and risks and in such
            amounts

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          as
            management of the Company believes to be prudent and customary in the
            businesses
            in which the Company and its subsidiaries are engaged. Neither the Company
            nor
            any such subsidiary has any reason to believe that it will not be able
            to renew
            its existing insurance coverage as and when such coverage expires or
            to obtain
            similar coverage from similar insurers as may be necessary to continue
            its
            business at a cost that would not have a Material Adverse Effect (as
            defined in
            the Master Agreement).

           

          (e) Solvency.
            The
            Company (both before and after giving effect to the transactions contemplated
            by
            this Agreement) is solvent (i.e., its assets have a fair market value
            in excess
            of the amount required to pay its probable liabilities on its existing
            debts as
            they become absolute and matured) and currently the Company has no information
            that would lead it to reasonably conclude that the Company would not
            have the
            ability to, nor does it intend to take any action that would impair its
            ability
            to, pay its debts from time to time incurred in connection therewith
            as such
            debts mature. The Company did not receive a qualified opinion from its
            auditors
            with respect to its most recent fiscal year end and does not anticipate
            or know
            of any basis upon which its auditors might issue a qualified opinion
            in respect
            of its current fiscal year.

           

          (f) No
            Investment Company.
            The
            Company is not, and upon the issuance and sale of the Securities as contemplated
            by this Agreement will not be an "investment company" required to be
            registered
            under the Investment Company Act of 1940 (an “INVESTMENT COMPANY”). The Company
            is not controlled by an Investment Company.

           

          6. Covenants.

           

          (a) Form
            D; Blue Sky Laws.
            The
            Company agrees to file a Form D with respect to the Securities as required
            under
            Regulation D and to provide a copy thereof to Holder promptly after such
            filing.
            The Company shall, on or before the Closing Date, take such action as
            the
            Company shall reasonably determine is necessary to qualify the Securities
            for
            sale to Holder at the Closing pursuant to this Agreement under applicable
            securities or "blue sky" laws of the states of the United States (or
            to obtain
            an exemption from such qualification), and shall provide evidence of
            any such
            action so taken to Holder on or prior to the Closing Date.

           

          (b) Reservation
            of Shares.
            The
            Company represents that it has at least 500,000,000 authorized shares
            and
            covenants that it will initially reserve (the “INITIAL SHARE RESERVATION”) from
            its authorized and unissued Common Stock a number of shares of Common
            Stock
            equal to at least 100% of the Warrant Shares, to provide for the issuance
            of
            Common Stock upon the exercise of the Warrants. The Company further covenants
            that, beginning on the date hereof, and continuing throughout the period
            the
            conversion right exists, the Company shall at all times have authorized,
            and
            reserved (the “ONGOING SHARE RESERVATION REQUIREMENT”) for the purpose of
            issuance, a sufficient number of shares of Common Stock to provide for
            the full
            exercise of the Warrants and issuance of the Warrant Shares in connection
            therewith. The Company shall not reduce the number of shares of Common
            Stock
            reserved for issuance upon exercise of or otherwise pursuant to the Warrants
            without the consent of Holder. The Company shall use its best efforts
            at all
            times to maintain the number of shares of Common Stock so reserved for
            issuance
            at no less than 100% of the number that is then actually issuable upon
            full
            exercise of the Warrants. If at any time the number of shares of Common
            Stock
            authorized and reserved for issuance is below the number of Warrant

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          Shares
            issued or issuable upon exercise of or otherwise pursuant to the Warrants,
            the
            Company will promptly take all corporate action necessary to authorize
            and
            reserve a sufficient number of shares, including, without limitation,
            calling a
            special meeting of stockholders to authorize additional shares to meet
            the
            Company's obligations under this Section 6(b), in the case of an insufficient
            number of authorized shares, and using its best efforts to obtain stockholder
            approval of an increase in such authorized number of shares.

           

          (c) Listing.
            The
            Company shall use its best efforts to promptly secure the listing of
            the Warrant
            Shares upon each national securities exchange or automated quotation
            system, if
            any, upon which shares of Common Stock are then listed (subject to official
            notice of issuance) and, so long as Holder owns any of the Securities,
            shall
            maintain, so long as any other shares of Common Stock shall be so listed,
            such
            listing of all Warrant Shares from time to time issuable upon exercise
            of or
            otherwise pursuant to the Warrants. The Company will use its best efforts
            to
            obtain and, so long as Holder owns any of the Securities, maintain the
            listing
            and trading of its Common Stock on the OTC-BB, the Nasdaq National Market
            (the
“NNM”), the Nasdaq SmallCap Market (the “NASDAQ SMALLCAP”), the New York Stock
            Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in
            all respects with the Company's reporting, filing and other obligations
            under
            the bylaws or rules of the National Association of Securities Dealers
            (“NASD”)
            and such exchanges, as applicable. The Company shall promptly provide
            to Holder
            copies of any notices it receives from the OTC-BB and any other exchanges
            or
            quotation systems on which the Common Stock is then listed regarding
            the
            continued eligibility of the Common Stock for listing on such exchanges
            and
            quotation systems.

           

          (d) Corporate
            Existence. So
            long
            as Holder beneficially owns any Warrants, the Company shall maintain
            its
            corporate existence and shall not merge, consolidate or sell all or
            substantially all of the Company's assets, except in the event of a merger
            or
            consolidation or sale of all or substantially all of the Company's assets,
            where
            the successor or acquiring entity assumes the Company's obligations under
            this
            Agreement.

           

          (e) No
            Integration.
            The
            Company shall not make any offers or sales of any security (other than
            the
            Securities) under circumstances that would require registration of the
            Securities being offered or sold hereunder under the 1933 Act or cause
            the
            offering of the Securities to be integrated with any other offering of
            securities by the Company for the purpose of any stockholder approval
            provision
            applicable to the Company or its securities.

           

          (f) Irrevocable
            Transfer Agent Instructions.
            Within
            ten (10) business days after the Closing Date, the Company agrees to
            deliver to
            Holder the Irrevocable Transfer Agent Instructions (as defined below),
            in form
            and substance satisfactory to Holder, which instructions shall be acknowledged
            in writing by the Company's Transfer Agent.

           

          (g) Confidentiality.
            The
            Company agrees to keep all information disclosed to the Company by Holder
            or its
            representatives pursuant to or in connection with this Agreement, the
            Registration Rights Agreement entered into as of the date hereof, or
            the
            transactions contemplated hereby and thereby, confidential, and shall
            not
            disclose any such information without first obtaining the written consent
            of
            Holder, except as required by applicable law.

           

          7. Transfer
            Agent Instructions.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          The
            Company shall issue irrevocable instructions to its transfer agent to
            issue
            certificates, registered in the name of Holder or its nominee for the
            Warrant
            Shares in such amounts as specified from time to time by Holder to the
            Company
            upon exercise of the Warrants in accordance with their terms (the “IRREVOCABLE
            TRANSFER AGENT INSTRUCTIONS”). Prior to registration of the Warrant Shares under
            the 1933 Act or the date on which the Warrant Shares may be sold pursuant
            to
            Rule 144 without any restriction as to the number of securities as of
            a
            particular date that can then be immediately sold, all such certificates
            shall
            bear the restrictive legend specified in Section 4(h) of this Agreement.
            The
            Company warrants that no instruction other than the Irrevocable Transfer
            Agent
            Instructions referred to in this Section 7, and stop transfer instructions
            to
            give effect to Section 2(g) hereof (in the case of the Warrant Shares,
            prior to
            registration of the Warrant Shares under the 1933 Act or the date on
            which the
            Warrant Shares may be sold pursuant to Rule 144 without any restriction
            as to
            the number of securities as of a particular date that can then be immediately
            sold), will be given by the Company to its transfer agent and that the
            Securities shall otherwise be freely transferable on the books and records
            of
            the Company as and to the extent provided in this Agreement and the Registration
            Rights Agreement. Nothing in this Section shall affect in any way the
            Holder's
            obligations and agreement set forth in Section 2(g) hereof to comply
            with all
            applicable prospectus delivery requirements, if any, upon re-sale of
            the
            Securities. If Holder provides the Company with (i) an opinion of counsel
            in
            form, substance and scope customary for opinions in comparable transactions,
            to
            the effect that a public sale or transfer of such Securities may be made
            without
            registration under the 1933 Act and such sale or transfer is effected
            or (ii)
            Holder provides reasonable assurances that the Securities can be sold
            pursuant
            to Rule 144, the Company shall permit the transfer, and, in the case
            of the
            Warrant Shares, promptly instruct its transfer agent to issue one or
            more
            certificates, free from any restrictive legend, in such name and in such
            denominations as specified by Holder.

           

          8. Transfer
            and Registration.

           

          (a) Transfer
            Rights.
            Subject
            to the provisions of Section 12 of this Warrant, this Warrant may be
            transferred
            on the books of the Company, in whole or in part, in person or by attorney,
            upon
            surrender of this Warrant properly completed and endorsed. This Warrant
            shall be
            canceled upon such surrender and, as soon as practicable thereafter,
            the person
            to whom such transfer is made shall be entitled to receive a new Warrant
            or
            Warrants as to the portion of this Warrant transferred, and Holder shall
            be
            entitled to receive a new Warrant as to the portion hereof
            retained.

           

          (b) Registrable
            Securities.
            The
            Common Stock issuable upon the exercise of this Warrant has registration
            rights
            pursuant to that certain Registration Rights Agreements between the Company
            and
            Technology Properties Limited Inc. dated of even date herewith.

           

          9. Anti-Dilution
            Adjustments.

           

          (a) Stock
            Dividend.
            If the
            Company shall at any time declare a dividend payable in shares of Common
            Stock,
            then Holder, upon Exercise of this Warrant after the record date for
            the
            determination of holders of Common Stock entitled to receive such dividend,
            shall be entitled to receive upon Exercise of this Warrant, in addition
            to the
            number of shares of Common Stock as to which this Warrant is exercised,
            such
            additional shares of Common Stock

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          as
            such
            Holder would have received had this Warrant been exercised immediately
            prior to
            such record date and the Exercise Price will be proportionately
            adjusted.

           

          (b) Distribution.
            If
            at any
            time after the Issue Date hereof, the Company shall declare or make any
            distribution of its assets (or rights to acquire its assets) or shares
            of its
            capital stock (other than Common Stock) to Holders of Common Stock of
            the
            Company as a partial liquidating dividend, by way of return of capital
            or
            otherwise (including any dividend or distribution to the Company's shareholders
            in cash or shares or rights to acquire shares of capital stock of any
            other
            public or private company, including but not limited to a subsidiary
            or spin-off
            of the Company (a “Distribution”)), then the Holders of this Warrant shall be
            entitled, to immediately receive the amount of such distribution (in
            kind) which
            would have been payable to the Holder with respect to the shares of Common
            Stock
            issuable upon a full exercise of this Warrant (without regard to any
            contractual, legal or regulatory limitations on the amount of such conversion),
            had such Holder been the holder of such shares of Common Stock on the
            record
            date for determination of shareholders entitled to such
            Distribution.

           

          (c) Recapitalization
            or Reclassification.
            If the
            Company shall at any time effect a recapitalization, reclassification
            or other
            similar transaction of such character that the shares of Common Stock
            shall be
            changed into or become exchangeable for a larger or smaller number of
            shares,
            then upon the effective date thereof, the number of shares of Common
            Stock which
            Holder shall be entitled to purchase upon Exercise of this Warrant shall
            be
            increased or decreased, as the case may be, in direct proportion to the
            increase
            or decrease in the number of shares of Common Stock by reason of such
            recapitalization, reclassification or similar transaction, and the Exercise
            Price shall be, in the case of an increase in the number of shares,
            proportionally decreased and, in the case of decrease in the number of
            shares,
            proportionally increased. The Company shall give Holder the same notice
            it
            provides to holders of Common Stock of any transaction described in this
            Section
            9(c).

           

          (d) Intentionally
            Left Blank.

           

          (e) Notice
            of Consolidation or Merger.
            In the
            event of a merger, consolidation, exchange of shares, recapitalization,
            reorganization, or other similar event, as a result of which shares of
            Common
            Stock shall be changed into the same or a different number of shares
            of the same
            or another class or classes of stock or securities or other assets of
            the
            Company or another entity or there is a sale of all or substantially
            all the
            Company's assets (a “Corporate Change”), then this Warrant shall be exerciseable
            into such class and type of securities or other assets as Holder would
            have
            received had Holder exercised this Warrant immediately prior to such
            Corporate
            Change; provided, however, that Company may not affect any Corporate
            Change
            unless it first shall have given thirty (30) business days notice to
            Holder
            hereof of any Corporate Change.

           

          (f) Exercise
            Price Adjusted.
            As used
            in this Warrant, the term “Exercise Price” shall mean the purchase price per
            share specified in Section 3 of this Warrant, until the occurrence of
            an event
            stated in subsection (a), (b), (c) or (d) of this Section 9, and thereafter
            shall mean said price as adjusted from time to time in accordance with
            the
            provisions of said subsection. No such adjustment under this Section
            9 shall be
            made unless such adjustment would

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          change
            the Exercise Price at the time by $.01 or more; provided, however, that
            all
            adjustments not so made shall be deferred and made when the aggregate
            thereof
            would change the Exercise Price at the time by $.__ or more. No adjustment
            made
            pursuant to any provision of this Section 9 shall have the net effect
            of
            increasing the Exercise Price in relation to the split adjusted and distribution
            adjusted price of the Common Stock. The number of shares of Common Stock
            subject
            hereto shall increase proportionately with each decrease in the Exercise
            Price.

           

          (g) Adjustments:
            Additional Shares, Securities or Assets.
            In the
            event that at any time, as a result of an adjustment made pursuant to
            this
            Section 9, Holder shall, upon Exercise of this Warrant, become entitled
            to
            receive shares and/or other securities or assets (other than Common Stock)
            then,
            wherever appropriate, all references herein to shares of Common Stock
            shall be
            deemed to refer to and include such shares and/or other securities or
            assets;
            and thereafter the number of such shares and/or other securities or assets
            shall
            be subject to adjustment from time to time in a manner and upon terms
            as nearly
            equivalent as practicable to the provisions of this Section 9.

           

          10. Fractional
            Interests.

           

          No
            fractional shares or scrip representing fractional shares shall be issuable
            upon
            the Exercise of this Warrant, but on Exercise of this Warrant, Holder
            may
            purchase only a whole number of shares of Common Stock. If, on Exercise
            of this
            Warrant, Holder would be entitled to a fractional share of Common Stock
            or a
            right to acquire a fractional share of Common Stock, such fractional
            share shall
            be disregarded and the number of shares of Common Stock issuable upon
            exercise
            shall be the next higher number of shares.

           

          11. Reservation
            of Shares.

           

          From
            and
            after the date hereof, the Company shall at all times reserve for issuance
            such
            number of authorized and unissued shares of Common Stock (or other securities
            substituted therefor as herein above provided) as shall be sufficient
            for the
            Exercise of this Warrant and payment of the Exercise Price. If at any
            time the
            number of shares of Common Stock authorized and reserved for issuance
            is below
            the number of shares sufficient for the Exercise of this Warrant and
            payment of
            the Exercise Price (based on the Exercise Price in effect from time to
            time),
            the Company will promptly take all corporate action necessary to authorize
            and
            reserve a sufficient number of shares, including, without limitation,
            calling a
            special meeting of stockholders to authorize additional shares to meet
            the
            Company's obligations under this Section 11, in the case of an insufficient
            number of authorized shares, and using its best efforts to obtain stockholder
            approval of an increase in such authorized number of shares. The Company
            covenants and agrees that upon the Exercise of this Warrant, all shares
            of
            Common Stock issuable upon such exercise shall be duly and validly issued,
            fully
            paid, nonassessable and not subject to preemptive rights, rights of first
            refusal or similar rights of any person or entity.

           

          12. Restrictions
            on Transfer.

           

          (a) Registration
            or Exemption Required.
            This
            Warrant has been issued in a transaction exempt from the registration
            requirements of the Act by virtue of Regulation D and

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          exempt
            from state registration under applicable state laws. The Warrant and
            the Common
            Stock issuable upon the Exercise of this Warrant may not be pledged,
            transferred, sold or assigned except pursuant to an effective registration
            statement or an exemption to the registration requirements of the Act
            and
            applicable state laws.

           

          (b) Assignment.
            If
            Holder can provide the Company with reasonably satisfactory evidence
            that the
            conditions of (a) above regarding registration or exemption have been
            satisfied,
            Holder may sell, transfer, assign, pledge or otherwise dispose of this
            Warrant,
            in whole or in part. Holder shall deliver a written notice to Company,
            substantially in the form of the Assignment attached hereto as Exhibit
            B,
            indicating the person or persons to whom the Warrant shall be assigned
            and the
            respective number of warrants to be assigned to each assignee. The Company
            shall
            effect the assignment within ten (10) days, and shall deliver to the
            assignee(s)
            designated by Holder a Warrant or Warrants of like tenor and terms for
            the
            appropriate number of shares.

           

          13. Benefits
            of this Warrant.

           

          Nothing
            in this Warrant shall be construed to confer upon any person other than
            the
            Company and Holder any legal or equitable right, remedy or claim under
            this
            Warrant and this Warrant shall be for the sole and exclusive benefit
            of the
            Company and Holder.

           

          14. Arbitration:
            Governing Law.

           

          This
            Agreement shall be governed by and construed in accordance with the laws
            of the
            State of New York 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
            this Agreement or the breach thereof, shall be settled by binding arbitration
            in
            New York, New York 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
            Lender 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 _____ dollars ($__), 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 New York, New York or
            to the
            United States District Court sitting in New York 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. With
            respect
            to any arbitration proceeding in accordance with this section, the prevailing
            party's reasonable attorney's fees and expenses shall be borne by the
            non-prevailing party.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          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 New
            York, New York. 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 New York court. New York law shall govern the proceeding
            as
            well as the interpretation and construction of this Agreement and the
            transaction as a whole.

           

          15. Loss
            of Warrant.

           

          Upon
            receipt by the Company of evidence of the loss, theft, destruction or
            mutilation
            of this Warrant, and (in the case of loss, theft or destruction) of indemnity
            or
            security reasonably 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.

           

          16. Notice
            or Demands.

           

          Notices
            or demands pursuant to this Warrant to be given or made by Holder to
            or on the
            Company shall be sufficiently given or made if sent by certified or registered
            mail, return receipt requested, postage prepaid, and addressed, until
            another
            address is designated in writing by the Company, to the address set forth
            in
            Section 2(b) above. Notices or demands pursuant to this Warrant to be
            given or
            made by the Company to or on Holder shall be sufficiently given or made
            if sent
            by certified or registered mail, return receipt requested, postage prepaid,
            and
            addressed, to the address of Holder set forth in the Company's records,
            until
            another address is designated in writing by Holder.

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

           

          IN
            WITNESS WHEREOF, the undersigned have executed this Warrant as of the
            __th day
            of __, 2005.

           

          
            	 	
                    PATRIOT
                      SCIENTIFIC CORPORATION, 

                    a
                      Delaware corporation

                     

                    By:__________________________________

                    Name:________________________________

                    Title:_________________________________

                  
	 	 
	 	
                    ____________________________________,
                      

                    a
                      _______________ corporation

                     

                     

                    By:__________________________________

                    Name:________________________________ 

                    Title:_________________________________ 

                  

          

          

          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          

          EXHIBIT
            A

           

          EXERCISE
            FORM FOR WARRANT

           

          TO:
            PATRIOT SCIENTIFIC CORP.

           

          The
            undersigned hereby irrevocably exercises the right to purchase ________________
            of the shares of Common Stock (the “Common Stock”) of Patriot Scientific Corp.,
            a Delaware corporation (the “Company”), evidenced by the attached warrant (the
“Warrant”), and herewith makes payment of the exercise price with respect to
            such shares in full, all in accordance with the conditions and provisions
            of
            said Warrant.

           

          1. The
            undersigned agrees not to offer, sell, transfer or otherwise dispose
            of any of
            the Common Stock obtained on exercise of the Warrant, except in accordance
            with
            the provisions of Section 8(a) of the Warrant.

           

          2. The
            undersigned requests that stock certificates for such shares be issued
            free of
            any restrictive legend, if appropriate, and a warrant representing any
            unexercised portion hereof be issued, pursuant to the Warrant in the
            name of the
            undersigned and delivered to the undersigned at the address set forth
            below:

           

          

          Dated:_________________

          

          
            
              

            

          

          Signature

          

          
            
              

            

          

          Print
            Name

          

          
            
              

            

          

          Address

          

          NOTICE

           

          The
            signature to the foregoing Exercise Form must correspond to the name
            as written
            upon the face of the attached Warrant in every particular, without alteration
            or
            enlargement or any change whatsoever.

           

          
            
              

            

          

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          EXHIBIT
            B

           

          ASSIGNMENT

           

          (To
            be
            executed by the registered holder

           

          desiring
            to transfer the Warrant)

           

          FOR
            VALUE
            RECEIVED, the undersigned holder of the attached warrant (the “Warrant”) hereby
            sells, assigns and transfers unto the person or persons below named the
            right to
            purchase ________ shares of the Common Stock of Patriot Scientific Corp.,
            evidenced by the attached Warrant and does hereby irrevocably constitute
            and
            appoint ______________________ attorney to transfer the said Warrant
            on the
            books of the Company, with full power of substitution in the
            premises.

           

          Dated:_____________    __________________________

          

          Signature

          

          Fill
            in
            for new registration of Warrant:

          

          _____________________________________

          Name

          

          _____________________________________

          Address

          

          _____________________________________

          Please
            print name and address of assignee 

          (including
            zip code number)

          

          ________________________________________________________________________

          

          NOTICE

           

          The
            signature to the foregoing Assignment must correspond to the name as
            written
            upon the face of the attached Warrant in every particular, without alteration
            or
            enlargement or any change whatsoever.

           

          

          ________________________________________________________________________

           

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

    
       

      EXHIBIT
        J

    

    

      REGISTRATION
        RIGHTS AGREEMENT

      

      REGISTRATION
        RIGHTS AGREEMENT (this “Agreement”), dated as of ________, 200__, by and between
        PATRIOT SCIENTIFIC CORPORATION, a Delaware corporation (The “Company”), and
        _______, a _________ corporation (the “Buyer” or “____”).

      

      WHEREAS:

      

      A. In
        connection with the transactions contemplated by the Master Agreement by
        and
        among the Company, ___, and _______, dated as of ________, 200__ (the “Master
        Agreement”), the company has agreed, upon the terms and subject to the
        conditions contained in the Master Agreement and the Warrant Agreement between
        the Company and ___, dated as of the date hereof (the “Warrant Agreement”), to
        issue to ___ warrants (the “Warrants”) to purchase ________ shares of common
        stock of the Company, par value of $_____ (the “Common Stock”); and

      

      B. To
        induce
        _____ to execute and deliver the Master Agreement and the Warrant Agreement,
        the
        Company has agreed to provide certain registration rights under the Securities
        Act of 1933, as amended, and the rules and regulations thereunder, or any
        similar successor statute (collectively, the “1933 Act”), and applicable state
        securities laws;

      

      NOW,
        THEREFORE, in consideration of the premises and the mutual covenants contained
        herein, and other good and valuable consideration, the receipt and sufficiency
        of which are hereby acknowledged, the Company and _________ hereby agree
        as
        follows:

      

      1. DEFINITIONS.

      

      a. As
        used
        in this Agreement, the following terms shall have the following
        meanings:

      

      (i) “BUSINESS
        DAY” shall have the meaning set forth in the Master Agreement.

      

      (ii) “BUYER”
        shall mean ____ or any transferee pursuant to Section 9 herein.

      

      (iii) “REGISTER,”
        “REGISTERED,” and “REGISTRATION” refer to a registration effected by preparing
        and filing a Registration Statement or Statements in compliance with the
        1933
        Act and pursuant to Rule 3415 under the 1933 Act or any successor rule providing
        for offering securities on a continuous as basis (“RULE 415”), and the
        declaration or ordering of effectiveness of such Registration statement by
        the
        United States Securities and Exchange Commission (the “SEC”).

      

      (iv) “REGISTRATION
        SECURITIES” means (a) any shares of Common Stock (the “Warrant Shares”) issued
        or issuable upon exercise of or otherwise pursuant to the Warrants and (b)
        any
        shares of capital stock or issuable as a dividend on or in exchange for or
        otherwise with respect to the foregoing.

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (v) “REGISTRATION
        STATEMENT(S)” means a registration statement(s) of the Company under the 1933
        Act.

      

      2. REGISTRATION.

      

      a. MANDATORY
        REGISTRATION.
        The
        Company shall prepare and, on or prior to ________, 200__ (the “FILING DATE”)
        file with the SEC a Registration Statement on Form S-3 (or, if Form S-3 is
        not
        then available, on such form of Registration Statement as is then available
        to
        effect a registration of the Registrable Securities, subject to the consent
        of
        the Buyer, which consent will not be unreasonably withheld) covering the
        resale
        of the Registrable Securities, which Registration Statement, to the extent
        allowable under the 1933 Act and the rules and regulations promulgated
        thereunder (including Rule 415), shall state that such Registration Statement
        also covers such indeterminate number of additional shares of Common Stock
        as
        may become issuable upon exercise of or otherwise pursuant to the Warrants
        to
        prevent dilution resulting from stock splits, stock dividends or similar
        transactions. The number of shares of Common Stock initially included in
        such
        Registration Statement shall be no less than 100% of the aggregate number
        of
        Warrant Shares that are then issuable upon exercise of or otherwise pursuant
        to
        the Warrants, without regard to any limitation on the Buyer’s ability to
        exercise the Warrants. The Company acknowledges that the number of shares
        initially included in the Registration Statement represents a good faith
        estimate of the maximum number of shares issuable upon exercise of or otherwise
        pursuant to the Warrants. Registration Statement (and each amendment or
        supplement thereto, and each request for acceleration of effectiveness thereof)
        shall be provided to (and subject to the approval of) the Buyer and its counsel
        prior to its filing or other submission.

      

      b. [INTENTIONALLY
        OMITTED].

      

      c. PAYMENTS
        BY THE COMPANY.
        The
        Company shall use its best efforts to obtain effectiveness of the Registration
        Statement or as soon as practicable, but in any event not later than __________,
        200__ (the “REGISTRATION DEADLINE”). If (i) the Registration Statement covering
        the Registrable Securities required to be filed by the Company pursuant to
        Section 2(a) hereof is not declared effective by the SEC by the Registration
        Deadline, or (ii) after the Registration Statement has been declared effective
        by the SEC, sales of all of the Registrable Securities cannot be made pursuant
        to the Registration Statement, or (iii) the Common Stock is not listed or
        included for quotation on the Over the Counter Electronic Bulletin Board
        (the
“OTC-BB”), the Nasdaq National Market (“NNM”), the Nasdaq Small Cap Market
        (“NASDQ SMALL CAP”), the New York Stock Exchange (the “NYSE”) or the American
        Stock Exchange (the “AMEX”), then the Company will make payments to the Buyer in
        such amounts and at such times as shall be determined pursuant to this Section
        2(c) as partial relief for the damages to the Buyer by reason of any such
        delay
        in or reduction of its ability to sell the Registrable Securities (which
        remedy
        shall not be exclusive of any other remedies available at law or in equity).
        The
        Company shall pay to the holder of the Warrants an amount equal to the
        aggregate, exercise price paid for such Registrable Securities upon exercise
        of
        the Warrants (“OUTSTANDING AMOUNT”) multiplied by the Applicable Percentage (as
        defined below) times the number of months (prorated for partial months) after
        the Registration Deadline and prior to the date the Registration Statement
        is
        declared effective by the SEC.

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      The
        term
“APPLICABLE PERCENTAGE” means ________ (___). (For example, if the Registration
        Statement becomes effective one (1) month after the Registration Deadline,
        the
        Company would pay $________ for each $________ of Outstanding Amount. If
        thereafter, sales of all of the Registrable Securities could not be made
        pursuant to the Registration Statement for an additional period of one (1)
        month, the Company would pay an additional $________ for each $________
        Outstanding Amount. Such amounts shall be paid in cash within five (5) days
        after the end of each period that gives rise to such obligations, PROVIDED
        that,
        if any such period extends for more than thirty (30) days, interim payments
        shall be made for each such thirty (30) day period.

      

      d. PIGGY-BACK
        REGISTRATIONS.
        If at
        any time prior to the expiration of the Registration Period (as hereinafter
        defined) the Company shall determine to file with the SEC a Registration
        Statement relating to an offering for its own account or the account of others
        under the 1933 Act of any of its equity securities (other than on Form S-4
        or
        Form S-8 or their then equivalents relating to equity securities to be issued
        solely in connection with any acquisition of any entity or business or equity
        securities issuable in connection with stock option or other employee benefit
        plans), the Company shall send the Buyer written notice of such determination
        and, if within fifteen (15) days after the effective date of such notice,
        the
        Buyer shall so request in writing, the company shall include in such
        Registration Statement all or any part of the Registrable Securities the
        Buyer
        requests to be registered, except that if, in connection with any underwritten
        public offering for the account of the Company, the managing underwriter(s)’
thereof shall impose a limitation on the number of shares of Common Stock
        which
        may be included in the Registration Statement because, in such underwriter(s)’
judgment, marketing or other factors dictate such limitation is necessary
        to
        facilitate public distribution, then the Company shall be obligated to include
        in such Registration Statement only such limited portion of the Registrable
        Securities with respect to which the Buyer has requested inclusion hereunder
        as
        the underwriter shall permit;

      

      PROVIDED,
        HOWEVER, that the Company shall not exclude any Registrable Securities unless
        the Company has first excluded all outstanding securities, the holders of
        which
        are not entitled by contract to inclusion of such securities in such
        Registration Statement or are not entitled to pro rata inclusion with the
        Registrable Securities; and

      

      PROVIDED,
        FURTHER, HOWEVER, that, after giving effect to the immediately preceding
        proviso, any exclusion of Registrable Securities shall be made pro rata with
        holders of other securities having the contractual right to include such
        securities in the Registration Statement other than holders of securities
        entitled to inclusion of their securities in such Registration Statement
        by
        reason of demand registration rights. No right to registration of Registrable
        Securities under this Section 2(d) shall be construed to limit any registration
        required under Section 2(a) hereof. If an offering in connection with which
        the
        Buyer is entitled to registration under this Section 2(d) is an underwritten
        offering, then the Buyer shall, unless otherwise agreed by the Company, offer
        and sell such Registrable Securities in an underwritten offering using the
        same
        underwriter or underwriters and, subject to the provisions of this Agreement,
        on
        the same terms and conditions as other shares of Common Stock include in
        such
        underwritten offering. Notwithstanding anything to the contrary set forth
        herein, the registration rights of the Buyer pursuant to this Section 2(d)
        shall
        only be available in the event the Company fails to timely file, obtain
        effectiveness or maintain effectiveness of any Registration Statement to
        be
        filed pursuant to Section 2(a) in accordance with the terms of this
        Agreement.

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      e. ELIGIBILITY
        FOR FORM SB-2.
        The
        Company represents and warrants that it meets the registrant eligibility
        and
        transaction requirements for the use of Form SB-2 for registration of the
        sale
        by the Buyer of the Registrable Securities and the Company shall file all
        reports required to be filed by the Company with the SEC in a timely manner
        so
        as to maintain such eligibility for the use of Form SB-2.

      

      3. OBLIGATION
        OF THE COMPANY.

      

      In
        connection with the registration of the Registrable Securities, the Company
        shall have the following obligations:

      

      a. The
        Company shall prepare promptly, and file with the SEC as soon as practicable
        after the date of the Closing under the Master Agreement (the “CLOSING DATE”)
        (but no later than the Filing Date), a Registration Statement with respect
        to
        the number of Registrable Securities provided in Section 2(a), and thereafter
        use its best efforts to cause such Registration Statement relating to
        Registrable Securities to become effective as soon as possible after such
        filing
        (but in no event later than the Registration Deadline), and keep the
        Registration Statement effective pursuant to Rule 415 at all times until
        such
        date as is the earlier of (i) the date on which all of the Registrable
        Securities have been sold and (ii) the date on which the Registrable Securities
        (in the opinion of counsel to the Buyer) may be immediately sold to the public
        without registration or restriction (including without limitation as to volume
        by each holder thereof) under the 1933 Act (the “REGISTRATION PERIOD”), which
        Registration Statement (including any amendments or supplements thereto and
        prospectuses contained therein) shall not contain any untrue statement of
        a
        material fact or omit to state a material fact required to be stated therein,
        or
        necessary to make the statements therein not misleading.

      

      b. The
        Company shall prepare and file with the SEC such amendments (including
        post-effective amendments) and supplements to the Registration Statements
        and
        the prospectus used in connection with the Registration Statements as may
        be
        necessary to keep the Registration Statements effective at all times during
        the
        Registration Period, and, during such period, comply with the provisions
        of the
        1933 Act with respect to the disposition of all Registrable Securities of
        the
        Company covered by the Registration Statements until such time as all of
        such
        Registrable Securities have been disposed of in accordance with the intended
        methods of disposition by the seller or sellers thereof as set forth in the
        Registration Statements. In the event that on any Business Day (the
“REGISTRATION TRIGGER DATE”) the number of shares available under a Registration
        Statement filed pursuant to this Agreement is insufficient to cover all of
        the
        Registrable Securities issued or issuable upon exercise of or otherwise pursuant
        to the Warrants, without giving effect to any limitations on the Buyer’ ability
        to exercise the Warrants, the Company shall amend the Registration Statement,
        or
        file a new Registration Statement (on the short form available therefore,
        if
        applicable), or both, so as to cover ________ (_____ %) of all of the
        Registrable Securities so issued or issuable (without giving effect to any
        limitations on exercise contained in the Warrants) as of the Registration
        Trigger Date, in each case, as soon as practicable, but in any event within
        twenty (20) Business Days after the necessity therefore arises (based on
        the
        market price of the Common Stock and other relevant factors on which the
        Company
        reasonably elects to rely), provided, however that the Company shall have
        a
        sufficient number of authorized and unissued shares. In the event the Company
        does not have a sufficient number of authorized and unissued shares, the
        Company
        shall use its best efforts to obtain all necessary shareholder approvals
        and to
        make all necessary filings to increase its authorized shares as promptly
        as
        practicable and, within twenty (20) Business Days after the necessary increase
        in its authorized shares shall become effective, amend the Registration
        Statement or file a new Registration Statement as set forth above. The Company
        shall use its best efforts to cause such amendments and/or new Registration
        Statement to become effective as soon as practicable following the filing
        thereof, but in any event within sixty (60) days of the Registration Trigger
        Date or as promptly as practicable in the even the Company is required to
        increase its authorized shares. The provisions of Section 2(c) above shall
        be
        applicable with respect to the Company’s obligations under this Section
        3(b).

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      c. The
        Company shall furnish to the Buyer and its legal counsel (i) promptly after
        the
        same is prepared and publicly distributed, filed with the SEC, or received
        by
        the Company, one copy of each Registration Statement and any amendment thereto,
        each preliminary prospectus and prospectus and each amendment or supplement
        thereto, and, in the case of the Registration Statement referred to in Section
        2(a), each letter written by or on behalf of the Company to the SEC or the
        staff
        of the SEC, and each item of correspondence from the SEC or the staff of
        the
        SEC, in each case relating to such Registration Statement (other than any
        portion of any thereof which contains information for which the Company has
        sought confidential treatment), and (ii) such number of copies of a prospectus,
        including a preliminary prospectus, and all amendments and supplements thereto
        and such other documents as the Buyer may reasonably request in order to
        facilitate the disposition of the Registrable Securities owned by the Buyer.
        The
        Company will immediately notify the Buyer by facsimile of the effectiveness
        of
        each Registration Statement or any post-effective amendment. The Company
        will
        promptly respond to any and all comments received from the SEC, with a view
        towards causing each Registration Statement or any amendment thereto to be
        declared effective by the SEC as soon as practicable and shall file an
        acceleration request as soon as practicable, but no later than three (3)
        business days (the “ACCELERATION REQUEST DEADLINE”), following the resolution or
        clearance of all SEC comments or, if applicable, following notification by
        the
        SEC that any such Registration Statement or any amendment thereto will not
        be
        subject to review.

      

      d. The
        Company shall use reasonable efforts to (i) register and qualify the Registrable
        Securities covered by the Registration Statements under such other securities
        or
“blue sky” laws of such jurisdictions in the United States to which the Buyer is
        subject, (ii) prepare and file in those jurisdictions such amendments (including
        post-effective amendments) and supplements to such registrations and
        qualifications as may be necessary to maintain the effectiveness thereof
        during
        the Registration Period, (iii) take such other actions as may be necessary
        to
        maintain such registrations and qualifications in effect at all times during
        the
        Registration Period, and (iv) take all other actions reasonably necessary
        or
        advisable to qualify the Registrable Securities for sale in such
        jurisdictions;

      

      e. [INTENTIONALLY
        OMITTED].

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      f. As
        promptly as practicable after becoming aware of such event, the Company shall
        notify the Buyer of the happening of any event, of which the Company has
        knowledge, as a result of which the prospectus included in any 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 not misleading, and use its best efforts promptly
        to
        prepare a supplement or amendment to any Registration Statement to correct
        such
        untrue statement or omission, and deliver such number of copies of such
        supplement or amendment to the Buyer as the Buyer may reasonably request;
        provided that, for not more than twenty (20) consecutive days (or a total
        of not
        more than sixty (60) days in any twelve (12) month period), the Company may
        delay the disclosure of material non-public information concerning the Company
        (as well as prospectus or Registration Statement updating) the disclosure
        of
        which at the time is not, in the good faith opinion of the Company, in the
        best
        interests of the Company (an “ALLOWED DELAY”); provided, further, that the
        Company shall promptly (i) notify the Buyer in writing of the existence of
        (but
        in no event, without the prior written consent of the Buyer, shall the Company
        disclose to the Buyer any of the facts or circumstances regarding) material
        non-public information giving rise to an Allowed Delay and (ii) advise the
        Buyer
        in writing to cease all sales under such Registration Statement until the
        end of
        the Allowed Delay, provided the above actions are consistent with the
        requirements of the 1933 Act and/or the Securities Exchange Act of 1934,
        as
        amended (the “1934 Act”) or other applicable law. Upon expiration of the Allowed
        Delay, the Company shall again be bound by the first sentence of this Section
        3(f) with respect to the information giving rise thereto.

      

      g. The
        Company shall use its least efforts to prevent the issuance of any stop order
        or
        other suspension of effectiveness of any Registration Statement, and, if
        such an
        order is issued, to obtain the withdrawal of such order at the earliest possible
        moment and to notify the Buyer who holds Registrable Securities being sold
        (or,
        in the event of an underwritten offering, the managing underwriters) of the
        issuance of such order and the resolution thereof.

      

      h. The
        Company shall permit a single firm of counsel designated by the Buyer to
        review
        such Registration Statement and all amendments and supplements thereto (as
        well
        as all requests for acceleration of effectiveness thereof) a reasonable period
        of time prior to their filing with the SEC (not less than three (3) Business
        Days but not more then five (5) Business Days) and not file any document
        in a
        form to which such counsel reasonably objects and will not request acceleration
        of such Registration Statement without prior notice to such
        counsel.

      

      i. The
        Company shall make generally available to its security holders as soon as
        practicable, but not later than ninety (90) days after the close of the period
        covered thereby, an earnings statement (in form complying with the provisions
        of
        Rule 158 under the 1933 Act) covering a twelve-month period beginning not
        later
        than the first day of the Company’s fiscal quarter next following the effective
        date of the Registration Statement.

      

      j. At
        the
        request of the Buyer participating in an underwritten offering pursuant to
        Section 2(d), the Company shall furnish, on the date that Registrable Securities
        are delivered to an underwriter for sale in connection with any Registration
        Statement pursuant to Section 2(d), (i) an opinion, dated as of such date,
        from
        counsel representing the Company for purposes of such Registration Statement,
        in
        form, scope and substance as is customarily given in an underwritten public
        offering, addressed to the underwriters, if any, and the Buyer and (ii) a
        letter, dated such date, from the Company’s independent certified public
        accountants in form and substance as is customarily given by independent
        certified public accountants to underwriters in an underwritten public offering,
        addressed to the underwriters, if any, and the Buyer.

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      k. The
        Company shall make available for inspection by (i) the Buyer, and (ii) one
        firm
        of attorneys and one firm of accountants or other agents retained by the
        Buyer
        (collectively, the “INSPECTORS”) all pertinent financial and other records, and
        pertinent corporate documents and properties of the Company (collectively,
        the
“RECORDS”), as shall be reasonably deemed necessary by each Inspector to enable
        each Inspector to exercise its due diligence responsibility, and cause the
        Company’s officers, directors and employees to supply all information which any
        Inspector may reasonably request for purposes of such due
        diligence;

      

      PROVIDED,
        HOWEVER,
        that
        each Inspector shall hold in confidence and shall not make any disclosure
        (except to the Buyer) of any Record or other information which the Company
        determines in good faith to be confidential, and of which determination the
        Inspectors are so notified, unless (a) the disclosure of such Records is
        necessary to avoid or correct a misstatement or omission in any Registration
        Statement, (b) the release of such Records is ordered pursuant to a subpoena
        or
        other order from a court or government body of competent jurisdiction, or
        (c)
        the information in such Records has been made generally available to the
        public
        other than by disclosure in violation of this or any other agreement. The
        Company shall not be required to disclose any confidential information in
        such
        Records to any Inspector until and unless such Inspector shall have entered
        into
        confidentiality agreements (in form and substance satisfactory to the Company)
        with the Company with respect thereto, substantially in the form of this
        Section
        3(k). The Buyer agrees that it shall, upon learning that disclosure of such
        Records is sought in or by a court or governmental body of competent
        jurisdiction or through other means, give prompt notice to the Company and
        allow
        the Company, at its expense, to undertake appropriate action to prevent
        disclosure of, or to obtain a protective order for, the Records deemed
        confidential. Nothing herein (or in any other confidentiality agreement between
        the Company and the Buyer) shall be deemed to limit the Buyer’s ability to sell
        Registrable Securities in a manner which is otherwise consistent with applicable
        laws and regulations.

      

      l. The
        Company shall hold in confidence and not make any disclosure of information
        concerning the Buyer provided to the Company unless (i) disclosure of such
        information is necessary to comply with federal or state securities laws,
        (ii)
        the disclosure of such information is necessary to avoid or correct a
        misstatement or omission in any Registration Statement, (iii) the release
        of
        such information is ordered pursuant to a subpoena or other order from a
        court
        or governmental body of competent jurisdiction, or (iv) such information
        has
        been made generally available to the public other than by disclosure in
        violation of this or any other agreement. The Company agrees that it shall,
        upon
        learning that disclosure of such information concerning the Buyer is sought
        in
        or by a court or governmental body of competent jurisdiction or through other
        means, give prompt notice to the Buyer prior to making such disclosure, and
        allow the Buyer, at its expense, to undertake appropriate action to prevent
        disclosure of, or to obtain a protective order for, such
        information.

      

      m. The
        Company shall use its best efforts to (i) cause all the Registrable Securities
        covered by the Registration Statement to be listed on each national securities
        exchange on which securities of the same class or series issued by the Company
        are then listed, if any, if the listing of such Registrable Securities is
        then
        permitted under the rules of such exchange, or (ii) to the extent the securities
        of the same class or series are not then listed on a national securities
        exchange, secure the designation and quotation, of all the Registrable
        Securities covered by the Registration Statement on the NNM or, if not eligible
        for the NNM on the Nasdaq Small Cap or, if not eligible for the Nasdaq Small
        Cap, on the Over the Counter electronic bulletin board and, without limiting
        the
        generality of the foregoing, to arrange for at least two market makers to
        register with the National Association of Securities Dealers, Inc. (“NASD”) as
        such with respect to such Registrable Securities.

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      n. The
        Company shall provide a transfer agent and registrar, which may be a single
        entity, for the Registrable Securities not later than the effective date
        of the
        Registration Statement.

      

      o. The
        Company shall cooperate with the Buyer who holds Registrable Securities being
        offered and the managing underwriter or underwriters, if any, to facilitate
        the
        timely preparation and delivery of certificates (not bearing any restrictive
        legends) representing Registrable Securities to be offered pursuant to such
        Registration Statement and enable such certificates to be in such denominations
        or amounts, as the case may be, as the managing underwriter or underwriters,
        if
        any, or the Buyer may reasonably request and registered in such names as
        the
        managing underwriter or underwriters, if any, or the Buyer may request, and,
        within three (3) business days after a Registration Statement which includes
        Registrable Securities is ordered effective by the SEC, the Company shall
        deliver, and shall cause legal counsel selected by the Company to deliver,
        to
        the transfer agent for the Registrable Securities (with copies to the Buyer)
        an
        appropriate instruction and an opinion of such counsel in the form required
        by
        the transfer agent in order to issue the Registrable Securities free of
        restrictive legends.

      

      p. At
        the
        request of the holders of a majority-in-interest of the Registrable Securities,
        the Company shall prepare and file with the SEC such amendments (including
        post-effective amendments) and supplements to a Registration Statement and
        any
        prospectus used in connection with the Registration Statement as may be
        necessary in order to change the plan of distribution set forth in such
        Registration Statement.

      

      q. The
        Company shall not, and shall not agree to, allow the holders of any securities
        of the Company to include any of their securities in any Registration Statement
        under Section 2(a) hereof or any amendment or supplement thereto under Section
        3(b) hereof without the consent of the holders of a majority-in-interest
        of the
        Registrable Securities. In addition, the Company shall not offer any securities
        for its own account or the account of others in any Registration Statement
        under
        Section 2(a) hereof or any amendment or supplement thereto under Section
        3(b)
        hereof without the consent of the holders of a majority-in-interest of the
        Registrable Securities.

      

      r. The
        Company shall take all other reasonable actions necessary to expedite and
        facilitate disposition by the Buyer of Registrable Securities pursuant to
        a
        Registration Statement.

      

      s. The
        Company shall comply with all applicable laws related to a Registration
        Statement and offering and sale of securities and all applicable rules and
        regulations of governmental authorities in connection therewith (including
        without limitation the 1933 Act and the 1934 Act and the rules and regulations
        promulgated by the SEC).

      

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      4. OBLIGATIONS
        OF THE BUYER.

      

      In
        connection with the registration of the Registrable Securities, the Buyer
        shall
        have the following obligations:

      

      a. It
        shall
        be a condition precedent to the obligations of the Company to complete the
        registration pursuant to this Agreement with respect to the Registrable
        Securities of the Buyer that the Buyer shall furnish to the Company such
        information regarding itself, the Registrable Securities held by it and the
        intended method of disposition of the Registrable Securities held by it as
        shall
        be reasonably required to effect the registration of such Registrable Securities
        and shall execute such documents in connection with such registration as
        the
        Company may reasonably request. At least three (3) business days prior to
        the
        first anticipated filing date of the Registration Statement, the Company
        shall
        notify the Buyer of the information the Company requires from each the
        Buyer.

      

      b. The
        Buyer, by the Buyer’s acceptance of the Registrable Securities, agrees to
        cooperate with the Company as reasonably requested by the Company in connection
        with the preparation and filing of the Registration Statements hereunder,
        unless
        the Buyer has notified the Company in writing of the Buyer’s election to exclude
        all of the Buyer’s Registrable Securities from the Registration
        Statements.

      

      c. In
        the
        event of an underwritten offering pursuant to Section 2(d) in which any
        Registrable Securities are to be included, the Buyer agrees to enter into
        and
        perform the Buyer’s obligations under an underwriting agreement, in usual and
        customary form, including, without limitation, customary indemnification
        and
        contribution obligations, with the managing underwriter of such offering
        and
        take such other actions as are reasonably required in order to expedite or
        facilitate the disposition of the Registrable Securities, unless the Buyer
        has
        notified the Company in writing of the Buyer’s election to exclude all of the
        Buyer’s Registrable Securities from such Registration Statement.

      

      d. The
        Buyer
        agrees that, upon receipt of any notice from the Company of the happening
        of any
        event of the kind described in Section 3(f) or 3(g), the Buyer will immediately
        discontinue disposition of Registrable Securities pursuant to the Registration
        Statement covering such Registrable Securities until the Buyer’s receipt of the
        copies of the supplemented or amended prospectus contemplated by Section
        3(f) or
        3(g) and, if so directed by the Company, the Buyer shall deliver to the Company
        (at the expense of the Company) or destroy (and deliver to the Company a
        certificate of destruction) all copies in the Buyer’s possession, of the
        prospectus covering such Registrable Securities current at the time of receipt
        of such notice.

      

      e. No
        Buyer
        may participate in any underwritten registration hereunder unless the Buyer
        (i)
        agrees to sell the Buyer’s Registrable Securities on the basis provided in any
        underwriting arrangements in usual and customary form entered into by the
        Company, (ii) completes and executes all questionnaires, powers of attorney,
        indemnities, underwriting agreements and other documents reasonably required
        under the terms of such underwriting arrangements, and (iii) agrees to pay
        its
        pro rata share of all underwriting discounts and commissions and any expenses
        in
        excess of those payable by the Company pursuant to Section 5 below.

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      5. EXPENSES
        OF REGISTRATION.

      

      All
        reasonable expenses, other than underwriting discounts and commissions, incurred
        in connection with registrations, filings or qualifications pursuant to Sections
        2 and 3, including, without limitation, all registration, listing and
        qualification fees, printers and accounting fees, the fees and disbursements
        of
        counsel for the Company, and the reasonable fees and disbursements of one
        counsel selected by the Buyer pursuant to Sections 2(b) and 3(h) hereof shall
        be
        borne by the Company.

      

      6. 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, hold harmless and defend
        (i) the Buyer, (ii) the directors, officers, partners, managers, members,
        employees, agents and each person who controls any Buyer within the meaning
        of
        the 1933 Act or the Securities Exchange Act of 1934, as amended (the “1934
        ACT”), if any, (iii) any underwriter (as defined in the 1933 Act) for the Buyer
        in connection with an underwritten offering pursuant to Section 2(d) hereof,
        and
        (iv) the directors, officers, partners, employees and each person who controls
        any such underwriter within the meaning of the 1933 Act or the 1934 Act,
        if any
        (each, an “INDEMNIFIED PERSON”), against any joint or several losses, claims,
        damages, liabilities or expenses (collectively, together with actions,
        proceedings or inquiries by any regulatory or self-regulatory organization,
        whether commenced or threatened, in respect thereof, “CLAIMS”) to which any of
        them may become subject insofar as such Claims arise out of or are based
        upon:
        (i) any untrue statement or alleged untrue statement of a material fact in
        a
        Registration Statement or the omission or alleged omission to state therein
        a
        material fact required to be stated 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 the Company 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 light of the circumstances under which the statements therein
        were
        made, not misleading; or (iii) any violation or alleged violation by the
        Company
        of the 1933 Act, the 1934 Act, any other law, including, without limitation,
        any
        state securities law, or any rule or regulation thereunder relating to the
        offer
        or sale of the Registrable Securities (the matters in the foregoing clauses
        (i)
        through (iii) being, collectively, “VIOLATIONS”). Subject to the restrictions
        set forth in Section 6(c) with respect to the number of legal counsel, the
        Company shall reimburse the Indemnified Person, promptly as such expenses
        are
        incurred and are due and payable, for any reasonable 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 6(a): (i)
        shall
        not apply to a Claim arising out of or based upon a Violation which occurs
        in
        reliance upon and in conformity with information furnished in writing to
        the
        Company by any Indemnified Person or underwriter for such Indemnified Person
        expressly for use in connection with the preparation of such Registration
        Statement or any such amendment thereof or supplement thereto; (ii) shall
        not
        apply to amounts paid in settlement of any Claim if such settlement is effected
        without the prior written consent of the Company, which consent shall not
        be
        unreasonably withheld; and (iii) with respect to any preliminary prospectus,
        shall not inure to the benefit of any Indemnified Person if the untrue statement
        or omission of material fact contained in the preliminary prospectus was
        corrected on a timely basis in the prospectus, as then amended or supplemented,
        such corrected prospectus was timely made available by the Company pursuant
        to
        Section 3(c) hereof, and the Indemnified Person was promptly advised in writing
        not to use the incorrect prospectus prior to the use giving rise to a Violation
        and such Indemnified Person, notwithstanding such advice, used it. Such
        indemnity shall remain in full force and effect regardless of any investigation
        made by or on behalf of the Indemnified Person and shall survive the transfer
        of
        the Registrable Securities by the Buyer pursuant to Section 9.

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      b. [Intentionally
        Omitted].

      

      c. Promptly
        after receipt by an Indemnified Person under this Section 6 of notice of
        the
        commencement of any action (including any governmental action), such Indemnified
        Person shall, if Claim in respect thereof is to be made against any the Company
        under this Section 6, deliver to the Company a written notice of the
        commencement thereof, and the Company shall have the right to participate
        in,
        and, to the extent the Company so desires, to assume control of the defense
        thereof with counsel mutually satisfactory to the Company and the Indemnified
        Person, as the case may be.

      

      PROVIDED,
        HOWEVER,
        that an
        Indemnified Person shall have the right to retain its own counsel with the
        fees
        and expenses to be paid by the Company, if, in the reasonable opinion of
        counsel
        retained by the Company, the representation by such counsel of the Indemnified
        Person and the Company would be inappropriate due to actual or potential
        differing interests between such Indemnified Person and any other party
        represented by such counsel in such proceeding. The Company shall pay for
        only
        one separate legal counsel for the Indemnified Persons, and such legal counsel
        shall be selected by Buyer, if the Buyer is entitled to indemnification
        hereunder. The failure to deliver written notice to the Company within a
        reasonable time of the commencement of any such action shall not relieve
        the
        Company of any liability to the Indemnified Person under this Section 6,
        except
        to the extent that the Company is actually prejudiced in its ability to defend
        such action. The indemnification required by this Section 6 shall be made
        by
        periodic payments of the amount thereof during the course of the investigation
        or defense, as such expense, loss, damage or liability is incurred and is
        due
        and payable.

      

      7. CONTRIBUTION.

      

      To
        the
        extent any indemnification by the Company is prohibited or limited by law,
        the
        Company agrees to make the maximum contribution with respect to any amounts
        for
        which it would otherwise be liable under Section 6 to the fullest extent
        permitted by law.

      

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      8. REPORTS
        UNDER THE 1934 ACT.

      

      With
        a
        view to making available to the Buyer 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 Buyer to sell securities of the Company to the public without
        registration (“RULE 144”), the Company agrees to:

      

      a. make
        and
        keep public information available, as those terms are understood and defined
        in
        Rule 144;

      

      b. file
        with
        the SEC in a timely manner all reports and other documents required of the
        Company under the 1933 Act and the 1934 Act so long as the Company remains
        subject to such requirements (it being understood that nothing herein shall
        limit the Company’s obligations under Section 4(c) of the Securities Purchase
        Agreement) and the filing of such reports and other documents is required for
        the applicable provisions of Rule 144; and

      

      c. furnish
        to the Buyer so long as the Buyer owns Registrable Securities, promptly upon
        request, (i) a written statement by the Company that it has complied with
        the
        reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a
        copy
        of the most recent annual or quarterly report of the Company and such other
        reports and documents so filed by the Company, and (iii) such other information
        as may be reasonably requested to permit the Buyers to sell such securities
        pursuant to Rule 144 without registration.

      

      9. ASSIGNMENT
        OF REGISTRATION RIGHTS.

      

      The
        rights under this Agreement shall be automatically assignable by the Buyers
        to
        any transferee of all or any portion of Registrable Securities if: (i) the
        Buyer
        agrees in writing with the transferee or assignee to assign such rights,
        and a
        copy of such agreement is furnished to the Company within a reasonable time
        after such assignment, (ii) the Company is, within a reasonable time after
        such
        transfer or assignment, furnished with written notice of (a) the name and
        address of such transferee or assignee, and (b) the securities with respect
        to
        which such registration rights are being transferred or assigned, (iii)
        following such transfer or assignment, the further disposition of such
        securities by the transferee or assignee is restricted under the 1933 Act
        and
        applicable state securities laws, (iv) at or before the time the Company
        receives the written notice contemplated by clause (ii) of this sentence,
        the
        transferee or assignee agrees in writing with the Company to be bound by
        all of
        the provisions contained herein, and (v) such transfer shall have been made
        in
        accordance with the applicable requirements of the Securities Purchase
        Agreement.

      

      10. AMENDMENT
        OF REGISTRATION RIGHTS.

      

      Provisions
        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 written consent of the Company, the Buyer (to the
        extent such Buyer still owns Registrable Securities) and Buyers who hold
        a
        majority interest of the Registrable Securities. Any amendment or waiver
        effected in accordance with this Section 10 shall be binding upon the Buyer
        and
        the Company.

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      11. MISCELLANEOUS.

      

      a. A
        person
        or entity is deemed to be a holder of Registrable Securities whenever such
        person or entity owns of record such Registrable Securities. If the Company
        receives conflicting instructions, notices or elections from two or more
        persons
        or entities with respect to the same Registrable Securities, the Company
        shall
        act upon the basis of instructions, notice or election received from the
        registered owner of such Registrable Securities.

      

      b. Any
        notices required or permitted to be given under the terms hereof shall be
        sent
        by certified or registered mail (return receipt requested) or delivered
        personally or by courier (including a recognized overnight delivery service)
        or
        by facsimile and shall be effective five days after being placed in the mail,
        if
        mailed by regular United States mail, or upon receipt, if delivered personally
        or by courier (including a recognized overnight delivery service) or by
        facsimile, in each case addressed to a party. The addresses for such
        communications shall be:

      

      If
        to the
        Company: To the address set forth immediately below such Company’s name on the
        signature pages hereto.

      

      With
        copy
        to:

      

      Otto
        Sorensen, Esq.

      Luce,
        Forward, Hamilton and Scripps, LLP

      600
        West
        Broadway, Suite 2600

      San
        Diego, CA 92191

      Tel
        (619)
        699-2534

      Fax
        (619)
        232-8311

      

      If
        to a
        Buyer: To the address set forth immediately below such Buyer’s name on the
        signature pages hereto.

      

      Each
        party shall provide notice to the other party of any change in
        address.

      

      c. Failure
        of any party to exercise any right or remedy under this Agreement or otherwise,
        or delay by a party in exercising such right or remedy, shall not operate
        as a
        waiver thereof.

      

      d. This
        Agreement shall be governed by and construed in accordance with the internal
        laws of the State of New York. Any controversy or claim arising out of or
        related to this Debenture or the breach thereof, shall be settled by binding
        arbitration in New York, NY 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 the Buyer 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 ________
        ($________), 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 New York, NY or to the United
        States
        District Court sitting in New York 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. With respect to any
        arbitration proceeding in accordance with this section, the prevailing party’s
        reasonable attorney’s fees and expenses shall be borne by the non-prevailing
        party.

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      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 New
        York, NY. 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 New York court. New York law shall govern both the proceeding as
        well as
        the interpretation and construction of the Debenture and the transaction
        as a
        whole.

      

      e. This
        Agreement and the Securities Purchase Agreement (including all schedules
        and
        exhibits thereto) constitute the entire agreement among the parties hereto
        with
        respect to the subject matter hereof and thereof. There are no restrictions,
        promises, warranties or undertakings, other than those set forth or referred
        to
        herein and therein. This Agreement and the Securities Purchase Agreement
        supersede all prior agreements and understandings among the parties hereto
        with
        respect to the subject matter hereof and thereof.

      

      f. Subject
        to the requirements of Section 9 hereof, this Agreement shall inure to the
        benefit of and be binding upon the successors and assigns of each of the
        parties
        hereto.

      

      g. The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.

      

      h. This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original but all of which shall constitute one and the same agreement.
        This Agreement, once executed by a party, may be delivered to the other party
        hereto by facsimile transmission of a copy of this Agreement bearing the
        signature of the party so delivering this Agreement.

      

      i. Each
        party shall do and perform, or cause to be done and performed, all such further
        acts and things, and shall execute and deliver all such other agreements,
        certificates, instruments and documents, as the other party may reasonably
        request in order to carry out the intent and accomplish the purposes of this
        Agreement and the consummation of the transactions contemplated
        hereby.

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      j. Except
        as
        otherwise provided herein, all consents and other determinations to be made
        by
        the Buyer pursuant to this Agreement shall be made by Buyers holding a majority
        of the Registrable Securities, determined as if the all of the Debentures
        then
        outstanding have been converted into for Registrable Securities.

      

      k. The
        Company acknowledges that a breach by it of its obligations hereunder will
        cause
        irreparable harm to the Buyer by vitiating the intent and purpose of the
        transactions contemplated hereby. Accordingly, the Company acknowledges that
        the
        remedy at law for breach of its obligations hereunder will be inadequate
        and
        agrees, in the event of a breach or threatened breach by the Company of any
        of
        the provisions hereunder, that the Buyer shall be entitled, in addition to
        all
        other available remedies in law or in equity, to an injunction or injunctions
        to
        prevent or cure breaches of the provisions of this Agreement and to enforce
        specifically the terms and provisions hereof, without the necessity of showing
        economic loss and without any bond or other security being
        required.

      

      l. The
        language used in this Agreement will be deemed to be the language chosen
        by the
        parties to express their mutual intent, and no rules of strict construction
        will
        be applied against any party.

      

      m. In
        the
        event that any provision of this Agreement is invalid or unenforceable under
        any
        applicable statute or rule of law, then such provision shall be deemed
        inoperative to the extent that it may conflict therewith and shall be deemed
        modified to conform with such statute or rule of law. Any provision hereof
        which
        may prove invalid or unenforceable under any law shall not affect the validity
        or enforceability of any other provision hereof.

      

      n. The
        initial number of Registrable Securities included in any Registration Statement
        and each increase to the number of Registrable Securities included therein
        shall
        be allocated pro rata among the Buyers based on the number of Registrable
        Securities held by the Buyer at the time of such establishment or increase,
        as
        the case may be. In the event an Buyer shall sell or otherwise transfer any
        of
        such holder’s Registrable Securities, each transferee shall be allocated a pro
        rata portion of the number of Registrable Securities included in a Registration
        Statement for such transferor. Any shares of Common Stock included on a
        Registration Statement and which remain allocated to any person or entity
        which
        does not hold any Registrable Securities shall be allocated to the remaining
        Buyers, pro rata based on the number of shares of Registrable Securities
        then
        held by the Buyers. For the avoidance of doubt, the number of Registrable
        Securities held by a Buyer shall be determined as if all the Debentures and
        Warrants then outstanding and held by a Buyer were converted into or exercised
        for Registrable Securities.

      

      o. There
        shall be no oral modifications or amendments to this Agreement. This Agreement
        may be modified or amended only in writing.

      

      [INTENTIONALLY
        LEFT BLANK]

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
        Agreement to be duly executed as of the ____ day of ________,
        200__.

      

      
        	
                PATRIOT
                  SCIENTIFIC CORPORATION

              	
                ________________________________

              
	 	 
	 	 
	
                By:
                  _____________________________

              	
                By:
                  _____________________________

              
	
                  
                  (Name & Title)

              	
                  
                  (Name & Title)

              

      

      

      ADDRESS:

      

      
        	
                PATRIOT
                  SCIENTIFIC CORPORATION

              	 _____________________________
	
                10989
                  Via Frontera

              	 _____________________________
	
                San
                  Diego, California 92127

              	 _____________________________
	
                Telephone
                  No. (858) 674-5000

              	 _____________________________
	
                Facsimile
                  No. (858) 674-5005

              	 _____________________________

      

    

     

     

    
      
        
        

      

      
        16EXHIBIT
      10.41

     

    

     

    COMMERCIALIZATION
      AGREEMENT

     

    by
      and among

     

    P-NEWCO

     

    and

     

    TECHNOLOGY
      PROPERTIES LIMITED

     

    and

     

    PATRIOT
      SCIENTIFIC CORPORATION

     

    

     

    

     

    

     

    

     

    
      	
              ***

            	
              Indicates
                material omitted pursuant to an application for confidential treatment
                and
                that material has been filed separately with the
                Commission.

            

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    Page

    
      
        	 	 
	
                ARTICLE
                  1 GRANT

              	
                1

              
	
                ARTICLE
                  2 COMMERCIALIZATION

              	
                2

              
	
                ARTICLE
                  3 COVENANTS

              	
                3

              
	
                ARTICLE
                  4 PAYMENT ***

              	
                4

              
	
                ARTICLE
                  5 TERM

              	
                5

              
	
                ARTICLE
                  6 TERMINATION

              	
                5

              
	
                ARTICLE
                  7 REPRESENTATIONS AND WARRANTIES

              	
                6

              
	
                ARTICLE
                  8 GENERAL

              	
                7

              

      

       

    

    
      
        	
                EXHIBIT
                  A

              	
                GRANT
                  & SCHEDULE OF PATENTS

              
	
                SCHEDULE
                  1

              	
                SCHEDULE
                  OF PATENTS

              
	
                SCHEDULE
                  2

              	
                PROJECT
                  DESCRIPTION ***

              
	
                SCHEDULE
                  3

              	
                SCHEDULE
                  OF OUTSTANDING
                  ACTIVITIES/RIGHTS/CLAIMS

              

      

    

    
       

      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    COMMERCIALIZATION
      AGREEMENT

    

    This
      Commercialization Agreement (“Commercialization
      Agreement”)
      is
      entered into by and among [P-Newco], a Delaware limited liability corporation
      (“P-Newco”),
      Patriot Scientific Corporation, a Delaware corporation (“Patriot”),
      having its principal place of business at 10989 Via Frontera, San Diego,
      California 92127, and Technology Properties Limited Inc., a California
      Corporation (“TPL”),
      having its principal place of business at 21730 Stevens Creek Boulevard, Ste.
      201, Cupertino, California 95014. Capitalized terms used but not defined herein
      shall have the meanings given to such terms in that certain agreement dated
      as
      of June 7, 2005 (the “Master Agreement”).

     

    WHEREAS,
      Patriot, TPL and Charles H. Moore (“Moore”)
      collectively hold all rights with respect to certain microprocessor
      implementation and architecture patents set forth on Schedule
      1
      (the
“MSD
      Patents”);

     

    WHEREAS,
      Moore has transferred complete authority for the management of Moore’s rights to
      the MSD Patents to TPL;

     

    WHEREAS,
      Patriot, TPL and Moore have entered into the Master Agreement, pursuant to
      which
      Patriot and TPL are entering into licenses with P-Newco and T-Newco,
      respectively, with respect to certain of their rights in the MSD Patents
      (collectively, the “Newco
      Licenses”);

     

    WHEREAS,
      Patriot, TPL, P-Newco and T-Newco have entered into a Merger Agreement, pursuant
      to which T-Newco merged with and into P-Newco, with P-Newco continuing as the
      surviving entity and holding all of the rights with respect to the MSD Patents
      formerly held by P-Newco and T-Newco;

     

    WHEREAS,
      pursuant to the Master Agreement, P-Newco, Patriot and TPL are entering into
      this Commercialization Agreement providing for the commercialization of
      P-Newco’s interests in the MSD Patents by TPL in return for the commitment of
      TPL to diligently pursue the commercialization; and

     

    WHEREAS,
      concurrently herewith Patriot and TPL are entering into that certain Limited
      Liability Company Operating Agreement of P-Newco (the “Operating
      Agreement”),
      governing the rights and obligations of Patriot and TPL with respect to their
      membership interests in P-Newco and the distribution of the proceeds received
      from the commercialization program contemplated by this Commercialization
      Agreement.

     

    NOW
      THEREFORE, for and in consideration of the mutual covenants herein contained
      as
      well as other good and valuable consideration the receipt and sufficiency of
      which is hereby acknowledged, the parties hereto covenant and agree
      that:

     

    ARTICLE
      I

    GRANT

     

    1.1 Pursuant
      to the Master Agreement, P-Newco and TPL shall enter into the grant attached
      hereto as Exhibit A (the “Grant”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

    COMMERCIALIZATION

     

    2.1 TPL
      shall
      exert reasonable best efforts to implement the activities (the
“Commercialization”) described at Schedule 2 and to conduct the project
      described therein (“Project”) in accordance with the project description (the
“Project Description”) including the Business Plan then in effect.

     

    (a) The
      first
      Business Plan is made a part of the Project Description as Attachment I to
      Schedule 2, and shall remain in full force and effect until replaced by
      agreement of P-Newco and TPL.

     

    (b) TPL
      shall
      have no obligation to pursue or fund any effort to prosecute, maintain, enforce
      or defend any element of the MSD Patents other than as specifically provided
      for
      in Schedule 2.

     

    2.2 By
      these
      presents, P-Newco appoints, authorizes, and directs TPL to take any and all
      action for the term of this Commercialization Agreement, with respect to all
      matters that are related to P-Newco’s rights to the MSD Patents, including
      without limitation:

     

    (a) entering
      into settlement and/or license agreements related to the MSD Patents which
      meet
      the Commercialization guidelines set forth in Section II of
      Schedule 2;

     

    (b) with
      the
      prior written consent of the P-Newco Management Committee, entering into any
      settlement and license agreements related to the MSD Patents which do not meet
      the guidelines set forth in Section II of Schedule 2;

     

    (c) to
      sue in
      the name of TPL, Moore, Patriot and/or P-Newco and to pursue for the use and
      benefit of the parties hereto as their respective interests appear: (i) all
      remedies of whatsoever kind or nature with respect to the protection, use,
      and
      enforcement of the MSD Patents; (ii) the collection of all claims for damages,
      profits, and awards relating to the past, present, or future use or ownership
      of
      the MSD Patents; and (iii) all equitable relief available in connection
      therewith; and

     

    (d) to
      otherwise manage and control by license, sublicense, or other agreement the
      practice and/or use of the MSD Patents by third parties.

     

    2.3. TPL
      may
      utilize the services of its various licensing personnel who may be lawyers
      to
      implement the Commercialization of the MSD Patents. Such services shall for
      no
      purpose be deemed to be legal services or to give rise to a lawyer-client
      relationship between TPL and/or TPL affiliates or Representatives on the one
      hand, and P-Newco and/or Patriot or any of their respective affiliates or
      Representatives on the other hand. Without limiting the foregoing, neither
      TPL
      nor any TPL Representative shall for any purpose be deemed to have:

     

    
      	 	
              (i)

            	
              Provided
                legal services or advice to;

            

    

     

    
      	 	
              (ii)

            	
              Undertaken
                the representation of; or

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (iii)

            	
              Entered
                into a lawyer-client relationship
                with,

            

    

     

    P-Newco,
      Patriot or any of P-Newco’s or Patriot’s respective affiliates or
      Representatives.

     

    ARTICLE
      III

    COVENANTS

     

    3.1 Within
      sixty (60) days after the close of each calendar quarter TPL shall deliver
      to
      P-Newco: (i) an operating statement reflecting the Project’s financial
      activity over the past quarter; (ii) a calculation of the Gross Cash
      Proceeds (as defined in the Operating Agreement) resulting from the Project;
      and
      (iii) an itemization of all TPL Direct Reimbursable Expenses (as defined
      below).

     

    (a) Within
      thirty (30) days after P-Newco’s receipt thereof, Patriot shall deliver to TPL
      written notice detailing all objections to such materials and calculations
      on an
      individual item-by-item basis. Any objection not so noticed shall be deemed
      to
      be waived.

     

    (b) Costs
      related to verifying reported time and expense charges and/or auditing reports
      or activities shall be paid in advance by the entity (either Patriot or TPL)
      supporting such request for verification or audit.

     

    3.2 As
      requested by TPL, Patriot and P-Newco shall have a continuing obligation to
      exert their respective reasonable best efforts to support the Project, cooperate
      with TPL in the execution of its obligations, and to provide such support in
      the
      manner described herein and in the Master Agreement.

     

    3.3 Upon
      reasonable request, P-Newco and Patriot shall promptly execute and deliver
      all
      documents, instruments, and things necessary or useful in the conduct of TPL’s
      activities hereunder, and Patriot and P-Newco agree to cooperate in any
      litigation with respect to the MSD Patents, including providing any reasonable
      assistance in connection with such litigation or joining as a party thereto,
      as
      requested by TPL, provided that neither Patriot nor P-Newco shall be required
      to
      provide financial support except as otherwise provided in the Commercialization
      Agreement.

     

    3.4 Patriot
      and P-Newco shall each avoid and refrain from any and all activity of any kind
      or nature which may impede, impair, frustrate or otherwise interfere with the
      activities of TPL in the execution the Project, and shall:

     

    (a) Exert
      their respective reasonable best efforts to impose the covenants of this
      Commercialization Agreement, the Master Agreement and the transactions
      contemplated hereby and thereby on their respective directors, officers,
      employees, consultants, attorneys, agents and other affiliates or
      Representatives; and

     

    (b) Be
      responsible hereunder for each and every failure in the good and faithful
      performance of this Commercialization Agreement and transaction by themselves
      and/or their respective directors, officers, employees, consultants, attorneys,
      agents and other affiliates or Representatives (other than TPL).

     

    3.5 With
      the
      exception of the agreements and transactions entered into pursuant to the
      Project, P-Newco, Patriot and TPL shall not transfer, assign, license, or
      otherwise convey any

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    interest
      in, or grant any security interest with respect to, any portion of their
      interest in the MSD Patents during the term of this Commercialization Agreement
      without the written consent of all parties hereto, other than to entities which
      are owned and controlled by the transferring Person and who assume and agree
      to
      pay and perform all of the transferor’s obligations hereunder.

     

    3.6 Upon
      the
      termination of this Commercialization Agreement, Patriot shall be entitled
      to
      receive a copy of third party “DeCaps” (as such term is commonly understood to
      mean in the industry) related to the Commercialization and third party expert
      analyses thereof; and TPL does hereby consent to the deliveries thereof by
      such
      third party experts. In the event any of the foregoing are not provided by
      such
      third parties, TPL will provide Patriot with copies of such documents in its
      possession. In addition, a Patriot Representative shall be entitled to view
      such
“DeCaps” on a quarterly basis, but shall not be entitled to make copies thereof.
      With the exception of TPL’s obligations pursuant to Section 3.1 and this
      Section 3.6, TPL shall not be obligated to share any other materials
      related to the Commercialization, including without limitation any attorney
      work
      product generated during the term of this Commercialization Agreement or
      thereafter, which for all intents and purposes shall be deemed to be privileged,
      proprietary and exclusive to TPL.

     

    3.7. P-Newco
      and Patriot shall on a continuing basis provide TPL all leads, information,
      and
      materials which Patriot encounters or discovers which may relate to the rights
      to the MSD Patents transferred by Patriot and TPL to P-Newco pursuant to the
      Newco Licenses, shall exert their respective reasonable best efforts to support
      the Commercialization activities of TPL hereunder, and shall refrain from all
      contact with third parties regarding the MSD Patents except as is specifically
      approved and/or requested in writing by TPL. The foregoing shall not affect
      the
      exercise of the retained rights of Patriot or TPL under the Newco
      Licenses.

     

    ARTICLE
      IV

    PAYMENT

     

    4.1 TPL
      shall
      cause all Gross Cash Proceeds generated from the Commercialization efforts
      to be
      paid directly to P-Newco.

     

    4.2 Upon
      the
      submission of customary and appropriate invoices and other supporting
      documentation, P-Newco shall reimburse TPL for the payment of all legal and
      third-party expert fees and other related third-party costs and expenses,
      including without limitation those incurred in connection with patent
      maintenance and prosecution and third party “DeCaps” and third party expert
      analysis relating thereto (the “TPL
      Direct Reimbursable Expenses”)
      incurred by TPL in connection with the Project and in conformity with the
      applicable Business Plan, as well as all TPL Direct Reimbursable Expenses not
      in
      conformity with the applicable Business Plan, to the extent approved by the
      P-Newco Management Committee. All such reimbursement shall be made prior to
      the
      due date indicated on the invoice.

     

    4.3 P-Newco
      shall make payment to TPL of $500,000 no later than three (3) days prior to
      the
      start of each fiscal quarter from the Working Capital Fund to cover indirect
      and
      other expenses related to the Project which do not constitute TPL Direct
      Reimbursable Expenses (“TPL
      Other Project Expenses”).
      Advances to TPL made pursuant to this Section 4.3
      shall be
      nonaccountable and nonrecoupable, but shall offset the amounts owed TPL pursuant
      to Section 6.1(a)(iv)(b) of the Operating Agreement in the manner
      contemplated by such Section 6.1(a)(iv)(b). At such time as
      the

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Working
      Capital Fund exceeds [***] after the first [***] has been generated pursuant
      to
      the Commercialization, such quarterly payment shall be increased (but not
      decreased) to one-eighth of the amount of the Working Capital Fund.

     

    4.4 To
      the
      extent that P-Newco does not have sufficient funds from the Working Capital
      Fund
      at the time any payment is due pursuant to this Article IV,
      TPL
      shall refrain from enforcing any collection rights against P-Newco for such
      payments until the earlier of (a) such time as funds become available in the
      Working Capital Fund, or (b) termination of this Commercialization
      Agreement.

     

    ARTICLE
      V

    TERM

     

    5.1 This
      Commercialization Agreement shall continue for the useful life of the MSD
      Patents, which shall be deemed to be the greater of the period of time during
      which any of the MSD Patents is either (i) susceptible to legal protection,
      or (ii) reasonably perceived to have commercial value.

     

    5.2 In
      the
      event that facts or events are discovered or occur which materially reduce
      TPL’s
      evaluation of the useful life or commercial value of the MSD Patents, or the
      viability of the Project, TPL may reduce the term of this Commercialization
      Agreement accordingly by providing P-Newco with ninety (90) days written notice,
      provided that TPL shall not reduce the term of this Commercialization Agreement
      to less than six (6) months.

     

    5.3 After
      the
      expiration of the term provided for above, neither party shall have any further
      obligation hereunder other than the administration of all outstanding
      transactions as under Article VI
      below,
      and the obligations of confidentiality undertaken by the parties.

     

    ARTICLE
      VI

    TERMINATION

     

    6.1 TPL
      may
      terminate this Commercialization Agreement upon the failure of Patriot or
      P-Newco to substantially perform any of their material obligations to be
      performed hereunder, including without limitation the payment obligations
      pursuant to Article IV
      of this
      Commercialization Agreement.

     

    6.2 P-Newco
      may terminate this Commercialization Agreement if:

     

    (a) TPL
      has
      failed to close transactions in accordance with the Performance Milestones
      set
      forth in Section IV of Schedule 2,
      and

     

    
      	 	
              (i)

            	
              there
                has been no material breach by Patriot or P-Newco of this
                Commercialization Agreement, the Master Agreement, the Newco Licenses
                or
                the Operating Agreement; and

            

    

     

    
      	 	
              (ii)

            	
              there
                has been no event or occurrence which negatively and materially impacts
                the viability or value of the MSD Patents;
                and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (iii)

            	
              the
                failure of TPL is not reasonably attributable to the conduct of P-Newco,
                Patriot and/or their respective affiliates or Representatives (other
                than
                TPL); or

            

    

     

    (b) TPL
      enters into a liquidation under Chapter 7 of the United States Bankruptcy Code;
      or

     

    (c) TPL
      enters into a reorganization under Chapter 11 of the United States Bankruptcy
      Code, and TPL ceases to be a debtor in possession during the pendency of such
      bankruptcy proceeding.

     

    Each
      of
      the events referred to in Sections 6.1
      and
6.2
      shall be
      referred to as a “Termination
      Event.”
In
      no
      event shall the conduct of Moore be deemed to constitute a Termination
      Event.

     

    6.3 Upon
      termination pursuant to this Article VI:

     

    (a) All
      rights to the MSD Patents arising under the Grant or this Commercialization
      Agreement shall be transferred to P-Newco subject to all outstanding rights
      under licenses, agreements, or awards theretofore made and entered into by
      or
      with TPL prior to such expiration or termination which, for all purposes, shall
      continue and be administered by TPL under TPL’s then current reasonable hourly
      fee schedule as if this Commercialization Agreement were still in full force
      and
      effect.

     

    (b) All
      amounts due to TPL with respect to TPL Direct Project Expenses and TPL Other
      Project Expenses shall be paid from Gross Cash Proceeds as such funds are
      received.

     

    (c) At
      the
      option of Patriot, TPL, or P-Newco, all of the rights and privileges of
      whatsoever kind or nature granted by it shall immediately and without further
      action whatsoever revert in their entirety to each of Patriot, TPL, or P-Newco,
      as the case may be, and all licenses granting such rights and privileges shall
      be deemed to be for all purposes cancelled.

     

    (d) In
      the
      event of a termination by P-Newco or Patriot, all claims for loss and/or damages
      shall be deemed to be liquidated and discharged with respect to each party
      upon
      its completion of the dissolution, distributions and the documentation and
      transfers contemplated by Article 8 of the Operating Agreement, provided,
      however, that claims based on conduct which is intentional, willful, or grossly
      negligent shall survive.

     

    ARTICLE
      VII

    REPRESENTATIONS
      AND WARRANTIES

     

    7.1 P-Newco
      and Patriot acknowledge, represent, and warrant to TPL that:

     

    (a) TPL
      and
      its Representatives have prepared this Commercialization Agreement at the
      request of P-Newco and Patriot and such preparation by TPL shall not be used
      as
      basis for construing the terms hereof against TPL or otherwise;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) Neither
      TPL nor its Representatives have for any purpose undertaken the representation
      of or entered into a lawyer/client relationship with Patriot or P-Newco or
      any
      of their Representatives;

     

    (c) P-Newco
      and Patriot release, acquit, and agree to hold TPL and its Representatives
      harmless with respect to all claims of whatsoever kind or nature by or on behalf
      of P-Newco and Patriot and related to the preparation, execution, and delivery
      of this Commercialization Agreement; and,

     

    (d) P-Newco
      and Patriot have sought and received the advice of independent counsel and
      are
      in no way relying on any advice or representations of TPL or its
      Representatives.

     

    7.2 Patriot
      and TPL each represent and warrant to one another that:

     

    (a) It
      is the
      sole owner of all right, title and interest in and to its portion of the MSD
      Patents, excepting only the rights reflected at the Schedule of Outstanding
      Activities/Rights/Claims attached as Schedule 3;
      and

     

    (b) There
      are
      no outstanding agreements, rights or interests which are inconsistent with
      the
      provisions of this Commercialization Agreement or which could give rise to
      such
      rights or interests.

     

    7.3 P-Newco
      represents and warrants to TPL that:

     

    (a) It
      is the
      sole owner, and for the term of this Commercialization Agreement will remain
      the
      sole owner, of all right, title, and interest in and to those certain rights
      to
      the MSD Patents transferred by Patriot and TPL to P-Newco pursuant to the
      P-Newco License and T-Newco License; and

     

    (b) There
      are
      no outstanding agreements, rights or interests which are inconsistent with
      the
      provisions of this Commercialization Agreement or which could give rise to
      such
      rights or interests.

     

    ARTICLE
      VIII

    GENERAL

     

    8.1 In
      no
      event shall any right, duty or privilege arising hereunder be assigned by either
      party to an entity which it does not own and control without the prior written
      consent of the other parties. Any attempted or purported assignment without
      such
      consent shall be voidable at the option of the non-consenting
      party.

     

    8.2 Any
      covenant requiring a party to perform or provide an act or service shall be
      construed to impose upon such party the burden of the cost thereof unless
      otherwise provided for herein.

     

    8.3 Section
      titles are intended only to aid and assist the reader and are not intended
      to be
      descriptive of the contents of the section or to be used for construction or
      interpretation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.4 The
      failure of any provision of this Commercialization Agreement by virtue of its
      being construed as invalid or otherwise unenforceable shall render the entire
      Commercialization Agreement cancelable at the option of the party asserting
      the
      enforceability of the said provision.

     

    8.5 All
      notices shall be in writing and effective upon delivery or upon posting by
      certified mail, return receipt requested, addressed as follows (or such other
      address as may be hereafter designated):

     

    If
      to Patriot:

    

    Patriot
      Scientific Corporation

    10989
      Via
      Frontera

    San
      Diego, CA 92127

    Attn:
      President

    Fax:
      (858) 674-5005

    

    with
      a copy to:

    

    Luce,
      Forward, Hamilton & Scripps LLP

    600
      West
      Broadway, Suite 2600

    San
      Diego, CA 92101

    Attn:
      Otto E. Sorensen, Esq.

    Fax:
      (619) 232-8311

    

    If
      to TPL:

    

    Technology
      Properties Limited

    21730
      Stevens Creek Blvd., Suite 201A

    Cupertino,
      CA 95014

    Attn:
      Daniel E. Leckrone, Chairman

    Fax:
      (408) 296-6637

    

    with
      a copy to:

    

    Gibson,
      Dunn & Crutcher LLP

    333
      S.
      Grand Avenue

    Los
      Angeles, California 90071

    Attn:
      Andrew E. Bogen, Esq.

    Fax:
      (213) 229-6159

    

    If
      to P-Newco:

     

    8.6 This
      Commercialization Agreement together with its exhibits and attachments, the
      Stipulated Final Judgment, the Master Agreement, the Newco Licenses, the
      Operating Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    and
      the
      Escrow Agreement contains the entire agreement between the parties and
      supersedes any and all other agreements between them relating to the subject
      matter hereof.

     

    8.7 With
      the
      exception of the Grant attached hereto as Exhibit A and the obligation to
      share certain materials pursuant to Section 3.6, this Commercialization
      Agreement shall create no rights or licenses to any intellectual property
      between or among the parties, nor shall it create any obligation to share
      technology, trade secrets, know-how, show-how and other proprietary developments
      and discoveries conceived or reduced to practice during the course of the
      Project.

     

    8.8 Any
      provision of this Commercialization Agreement may be amended or waived if,
      and
      only if, such amendment or waiver is in writing and signed, in the case of
      an
      amendment, by all parties hereto, or in the case of a waiver, by the party
      against whom the waiver is to be effective.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have hereunto set their hands and seal as of the
      date of the execution hereof by the last signatory hereto.

     

    PATRIOT
      SCIENTIFIC CORPORATION, a 
Delaware corporation

    

    __________________________________________

    By:

    Its:

    

    

    TECHNOLOGY
      PROPERTIES LIMITED, a California corporation

    

     

    __________________________________________

    By: Daniel
      E.
      Leckrone

    Its: Chairman

    

    

    P-NEWCO,
      a Delaware limited liability company

    

     

    __________________________________________

    By:

    Its: Patriot
      Member

    

     

    __________________________________________

    By:

    Its: TPL
      Member

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    GRANT

    (NEWCO
      TO TPL)

    

    

    This
      Grant (“Grant”) is entered into by and between Newco (sometimes “Newco”) on the
      one hand, and Technology Properties Limited (“TPL”), on the other hand, and is
      made and entered into for the purpose of implementing that certain
      Commercialization Agreement (“ComAg”) entered into between the parties
      contemporaneously herewith.

     

    NOW
      THEREFORE, for and in consideration of the mutual cove-nants herein contained
      as
      well as of other good and valuable consideration the receipt and sufficiency
      of
      which is hereby acknowledged, it is covenanted and agreed by and between the
      parties hereto that:

     

    1. Subject
      Matter.

     

    1.1 The
      patents described in the Schedule of Patents at Attachment I hereof, sometimes
      collectively referred to as the “Project Patents.”

     

    2. Grant.

     

    2.1 Pursuant
      to the provisions of section 2.1 of the Licenses made a part hereof as
      Attachment I (PTSC to Newco) and Attachment II (TPL to Newco), Newco hereby
      grants unto Technology Properties Limited the exclusive, personal and
      non-transferable, worldwide right to:

     

    2.1.1 To
      grant
      licenses and sub-licenses to make, have made, use, sell, and import products
      and/or services utilizing the Project Patents, for all fields of use and for
      all
      applications;

     

    2.1.2 To
      sue in
      the name of Technology Properties Limited or jointly with Patriot Scientific
      Corporation, Charles H. Moore and/or Newco if required by law, and to pursue
      for
      the use and benefit of Technology Properties Limited: (i) all remedies of
      whatsoever kind or nature with respect to the protection, use, and enforcement
      of the Project Patents; (ii) the collection of all claims for damages, profits,
      and awards relating to the past, present, or future use or ownership of the
      Project Patents; and (iii) all equitable relief available in connection
      therewith; and,

     

    2.1.3 To
      otherwise manage and control by license, sublicense, or other agreement the
      practice and/or use of the Project Patents by third parties.

     

    Accordingly,
      Newco divests itself of all rights with respect to the activities and/or rights
      described at 2.1.1., 2.1.2., and 2.1.3. above, and Newco retains no such
      right.

     

    2.2 The
      grant
      at Section 2.1 above shall be subject to (a) the terms and conditions of
      the Patent License Agreement between Patriot and Intel Corporation, dated as
      of
      June 1, 2005, and (b) the rights retained by PTSC and TPL under the
      provisions of section 2.2 of the said Attachments I and II,
      respectively.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. General.

     

    3.1 In
      no
      event shall any right, duty, or privilege arising hereunder be assigned by
      either party to an entity which it does not own and control, without the prior
      written consent of the other party. Any attempted or purported assignment
      without such consent shall be voidable at the option of the non-consenting
      party.

     

    3.2 Any
      covenant requiring a party to perform or provide an act or service shall be
      construed to impose upon such party the burden of the cost thereof unless
      otherwise provided for herein or in the ComAg.

     

    3.3 Section
      titles are intended only to aid and assist the reader and are not intended
      to be
      descriptive of the contents of the section or to be used for construction or
      interpretation.

     

    3.4 The
      failure of any provision of this Agreement by virtue of its being construed
      as
      invalid or otherwise unenforceable shall render the entire Agreement cancelable
      at the option of the party asserting the enforceability of the said
      provision.

     

    3.5 All
      notices shall be in writing and effective upon delivery or upon posting by
      certified mail, return receipt requested, addressed as follows (or such other
      address as may be hereafter designated):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If
      to
      TPL:

    

    Daniel
      E
      Leckrone, Chm

    21730
      Stevens Creek Blvd

    Cupertino,
      CA 95014

    Telephone:
      408-446-4222

    Facsimile:
      408-446-5444

    

    If
      to
      Newco:

    

    Daniel
      E
      Leckrone, Chm

    21730
      Stevens Creek Blvd

    Cupertino,
      CA 95014

    Telephone:
      408-446-4222

    Facsimile:
      408-446-5444

    

    AND

    

    Patriot
      Scientific Corporation

    10989
      Via
      Frontera

    San
      Diego, CA 92127

    Attn:
      President

    Fax:
      (858) 674-5005

    

    AND

    

    Robert
      K.
      Neilson

    Relational
      Advisors LLC

    11975
      El
      Camino Real, Suite 300

    San
      Diego, California 92130

    Fax:
      (858) 704-3341

    

    3.6 This
      Agreement together with its exhibits and attachments contains the entire
      agreement between the parties and supersedes any and all other agreements
      between them relating to the subject matter hereof.

     

    3.7 This
      Agreement shall be construed in accordance with and governed by the internal
      laws (without reference to choice or conflict of laws) of the State of
      California.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have hereunto set their hands and seals as of
      the
      date of the execution hereof by the last signatory hereto.

     

    
      	
              NEWCO

               

               

              By:__________________________________________

              Robert
                K. Neilson

               

              Date:__________________________________________

            	
              TECHNOLOGY
                PROPERTIES LTD.

               

               

              By:__________________________________________

              Daniel
                E. Leckrone, Chairman

               

              Date:__________________________________________

            

    

    

     

    Attachment
      I - Schedule of Patents

     

    (See
      next
      page)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    SCHEDULE
      OF PATENTS

    

    
      A. PROJECT
        PATENTS - US

      
        	 	 	 	 	 	 	 	 	 	 
	
                NUMBER

              	
              	 	
                NAME

              	 	
                FILED

              	 	
                ISSUED

              	 	
                EXPIRY

              
	
                US

              	
                5,440,749

              	 	
                Hi
                  Perf, Lo cost Micro Arch 

              	 	
                3
                  AUG 89

              	 	
                8
                  AUG 95

              	 	
                8
                  AUG 12

              
	
                US

              	
                5,530,890

              	 	
                Hi
                  Perf, Lo cost Micro Arch

              	 	
                7
                  JUN 95

              	 	
                25
                  JUN 96

              	 	
                25
                  JUN 13

              
	
                US

              	
                5,659,703

              	 	
                Micro
                  Sys with Hierarchical stack

              	 	
                7
                  JUN 95

              	 	
                19
                  AUG 97

              	 	
                19
                  AUG 14

              
	
                US

              	
                5,784,584

              	 	
                Multiple
                  Instructions within Groups

              	 	
                7
                  JUN 95

              	 	
                21
                  JUL 98

              	 	
                21
                  JUL 15

              
	
                US

              	
                5,809,336

              	 	
                Hi
                  Perf Variable Speed Sys Clock

              	 	
                7
                  JUN 95

              	 	
                15
                  SEP 98

              	 	
                15
                  SEP 15

              
	
                US

              	
                5,604,915

              	 	
                Load
                  Dependent Bus Timing

              	 	
                7
                  JUN 95

              	 	
                18
                  FEB 97

              	 	
                18
                  FEB 14

              
	
                US

              	
                6,598,148

              	 	
                Hi
                  Perf Microprocessor 

              	 	
                29
                  JUL 98

              	 	
                22
                  JUL 03

              	 	
                3
                  AUG 09

              
	 	 	 	
                Having
                  Variable Speed Sys Clock

              	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 

B. PROJECT
        PATENT APPLICATIONS PENDING - US

      
        	 	 	 	 	 	 	 	 	 	 
	SN
                09/051,263	 	 	RISC
                Microprocessor Architecture	 	8
                AUG 98	 	_
                _
                _ _ 	 	3
                AUG 09

      

       

       C. PROJECT
        PATENTS - NON US (Preliminary)

       

      
        	
                DE

              	
                69033568.7

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                14
                  JUN 00

              	 	
                2
                  AUG 10

              
	
                DE
                  

              	
                69033568T2

              	 	
                Preisguenstiger
                  Hochleistungsmikro

              	 	
                2
                  AUG 90

              	 	
                1
                  MAR 01

              	 	
                -
                  -
                  - -

              
	
                DE

              	
                69033568C0

              	 	
                Preisguenstiger
                  Hochleistungsmikro

              	 	
                2
                  AUG 90

              	 	
                20
                  JUL 00

              	 	
                -
                  -
                  - -

              
	
                EP

              	
                0786730

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                14
                  JUN 00

              	 	
                2
                  AUG 10

              
	
                EP

              	
                786730A1

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                30
                  JUL 97

              	 	
                -
                  -
                  - -

              
	
                EP

              	
                497772A4

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                4
                  AUG 93

              	 	
                -
                  -
                  - -

              
	
                EP

              	
                497772A1

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                12
                  AUG 92

              	 	
                -
                  -
                  - -

              
	
                EP
                  

              	
                0870226

              	 	
                RISC
                  Microprocessor Architecture

              	 	
                _
                  _
                  _ _ 

              	 	
                _
                  _
                  _ _

              	 	
                -
                  -
                  - -

              
	
                FR

              	
                0786730

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                14
                  JUL 00

              	 	
                -
                  -
                  - -

              
	
                WO
                  

              	
                9715001

              	 	
                RISC
                  Microprocessor Arch

              	 	
                _
                  _
                  _ _

              	 	
                _
                  _
                  _ _

              	 	
                -
                  -
                  - -

              
	
                WO
                  

              	
                9102311A3

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                21
                  MAR 91

              	 	
                -
                  -
                  - -

              
	
                WO

              	
                9102311A1

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                1
                  FEB 91

              	 	
                -
                  -
                  - -

              
	
                JP
                  

              	
                5502125T2

              	 	
                _
                  _
                  _ _ _ _

              	 	
                2
                  AUG 90

              	 	
                15
                  APR 93

              	 	
                -
                  -
                  - -

              
	
                JP
                  

              	
                2966085B2

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                13
                  AUG 99

              	 	
                2
                  AUG 10

              
	
                AU

              	
                6067290A1

              	 	
                Hi
                  Perf, Lo Cost Micro

              	 	
                2
                  AUG 90

              	 	
                11
                  MAR 91

              	 	
                -
                  -
                  - -

              

      

      
The
        schedule of Patents shall include the items listed above, as well as all
        progenitors and progeny thereof, and all additions, changes, amendments,
        modifications, actions, counterparts, continuations, continuations-in-part,
        extensions, reissues, divisionals and/or renewals of such items, progenitors,
        and/or progeny.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      1

    SCHEDULE
      OF PATENTS

    

    A. MSD
      PATENTS - US

     

    
      	Number	 	 	Name	 	Filed	 	Issued	 	Expiry
	
              US

            	
              5,440,749

            	 	
              Hi
                Perf, Lo cost Micro Arch

            	 	
              3
                AUG 89

            	 	
              8
                AUG 95

            	 	
              8
                AUG 12

            
	
              US

            	
              5,530,890

            	 	
              Hi
                Perf, Lo cost Micro Arch

            	 	
              7
                JUN 95

            	 	
              25
                JUN 96

            	 	
              25
                JUN 13

            
	
              US

            	
              5,659,703

            	 	
              Micro
                Sys with Hierarchical stack

            	 	
              7
                JUN 95

            	 	
              19
                AUG 97

            	 	
              19
                AUG 14

            
	
              US

            	
              5,784,584

            	 	
              Multiple
                Instructions within Groups

            	 	
              7
                JUN 95

            	 	
              21
                JUL 98

            	 	
              21
                JUL 15

            
	
              US

            	
              5,809,336

            	 	
              Hi
                Perf Variable Speed Sys Clock

            	 	
              7
                JUN 95

            	 	
              15
                SEP 98

            	 	
              15
                SEP 15

            
	
              US

            	
              5,604,915

            	 	
              Load
                Dependent Bus Timing

            	 	
              7
                JUN 95

            	 	
              18
                FEB 97

            	 	
              18
                FEB 14

            
	
              US

            	
              6,598,148

            	 	
              Hi
                Perf Microprocessor 

              Having
                Variable Speed Sys Clock

            	 	
              29
                JUL 98

            	 	
              22
                JUL 03

            	 	
              3
                AUG 09

            

    

    

    B. PROJECT
      PATENT APPLICATIONS PENDING - US

     

    
      	
              Number

            	
              Name

            	
              Filed

            	
              Issued

            	
              Expiry

            
	
              SN

            	
              09/051,263

            	
              RISC
                Microprocessor Architecture

            	
              8
                AUG 98

            	
              -
                -
                - -

            	
              3
                AUG 09

            

    

    

    C. MSD
      PATENTS - NON US (Preliminary)

     

    
      	Number	 	Name	Filed	Issued	Expiry
	
              DE

            	
              69033568.7

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              14
                JUN 00

            	
              2
                AUG 10

            
	
              DE

            	
              69033568T2

            	
              Preisguenstiger
                Hochleistungsmikro

            	
              2
                AUG 90

            	
              1
                MAR 01

            	
              -
                -
                - -

            
	
              DE

            	
              69033568C0

            	
              Preisguenstiger
                Hochleistungsmikro

            	
              2
                AUG 90

            	
              20
                JUL 00

            	
              -
                -
                - -

            
	
              EP

            	
              0786730

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              14
                JUN 00

            	
              2
                AUG 10

            
	
              EP

            	
              786730A1

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              30
                JUL 97

            	
              -
                -
                - -

            
	
              EP

            	
              497772A4

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              4
                AUG 93

            	
              -
                -
                - -

            
	
              EP

            	
              497772A1

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              12
                AUG 92

            	
              -
                -
                - -

            
	
              EP

            	
              0870226

            	
              RISC
                Microprocessor Architecture

            	
              -
                -
                - -

            	
              -
                -
                - -

            	
              -
                -
                - -

            
	
              FR

            	
              0786730

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              14
                JUL 00

            	
              -
                -
                - -

            
	
              WO

            	
              9715001

            	
              RISC
                Microprocessor Arch

            	
              -
                -
                - -

            	
              -
                -
                - -

            	
              -
                -
                - -

            
	
              WO

            	
              9102311A3

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              21
                MAR 91

            	
              -
                -
                - -

            
	
              WO

            	
              9102311A1

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              1
                FEB 91

            	
              -
                -
                - -

            
	
              JP

            	
              5502125T2

            	
              _
                _
                _ _ _ _

            	
              2
                AUG 90

            	
              15
                APR 93

            	
              -
                -
                - -

            
	
              JP

            	
              2966085B2

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              13
                AUG 99

            	
              2
                AUG 10

            
	
              AU

            	
              6067290A1

            	
              Hi
                Perf, Lo Cost Micro

            	
              2
                AUG 90

            	
              11
                MAR 91

            	
              -
                -
                - -

            

    

    

    The
      schedule of Patents shall include the items listed above, as well as all
      progenitors and progeny thereof, and all additions, changes, amendments,
      modifications, actions, counterparts, continuations, continuations-in-part,
      extensions, reissues, divisionals and/or renewals of such items, progenitors,
      and/or progeny.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      2

    PROJECT
      DESCRIPTION

    

    I. OBJECTIVES
      & ACTIVITIES

     

    
      	 	
              A.)

            	
              Develop
                and execute a commercialization program for the rights to the MSD
                Patents
                transferred by Patriot and TPL to P-Newco pursuant to the Newco Licenses
                which:

            

    

     

    
      	 	
              i.)

            	
              Establishes
                the MSD Patents as an income-producing, commercially valuable asset;
                and

            

    

     

    
      	 	
              ii.)

            	
              Builds
                long-term Project value; and

            

    

     

    
      	 	
              iii.)

            	
              Minimizes
                risks to Project assets.

            

    

     

    
      	 	
              B.)

            	
              Promote
                the commercialization program by encouraging the implementation and
                use of
                the MSD Patents through licenses, and various
                relationships.

            

    

     

    
      	 	
              C.)

            	
              Transform
                selected unauthorized use of the MSD Patents into strategically and
                commercially valuable authorized
                use.

            

    

     

    
      	 	
              D.)

            	
              Pursue
                licensing discussions with multiple simultaneous identified
                prospects.

            

    

     

    
      	 	
              E.)

            	
              Pursue
                parallel litigation on a selective strategic
                basis.

            

    

     

    
      	 	
              F.)

            	
              Negotiate
                and document agreements relating to the Project and the MSD
                Patents.

            

    

     

    
      	 	
              G.)

            	
              ***

            

    

     

    
      	 	
              H.)

            	
              ***

            

    

     

    
      	 	
              I.)

            	
              ***

            

    

     

    II. COMMERCIALIZATION
      GUIDELINES

     

    
      	 	
              A.)

            	
              ***

            

    

     

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      III. ADDITIONAL
        ACTIONS

       

      
        	 	
                A.)

              	
                ***

              

      

       

      
        	 	
                B.)

              	
                ***

              

      

       

      
        	 	
                C.)

              	
                ***

              

      

       

      IV. ***

       

      ***

       

      V. BUSINESS
        PLAN

       

      
        	 	
                A.)

              	
                A
                  Business Plan detailing the implementation of the Project is attached
                  hereto as Attachment I and will remain in full force and effect
                  until duly
                  amended or replaced.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      ATTACHMENT
        1 TO SCHEDULE 2

      

      BUSINESS
        PLAN

      

       

      I. ***

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        3

      SCHEDULE
        OF OUTSTANDING ACTIVITIES/RIGHTS/CLAIMS

       

      

        
          	
                  AGREEMENT

                	
                  DATE

                
	
                  TPL

                	 
	
                  1.
                    Moore - TPL Commercialization Agreement

                	
                  22
                    OCT 02

                
	
                  2.
                    P-Newco - TPL - PTSC Commercialization Agreement

                	
                  25
                    MAY 05

                
	
                  3.
                    TPL - Intel License Agree ment

                	
                  28
                    JUN 04

                
	 	 
	
                  PTSC

                	 
	
                  1.
                    PTSC - AMD License Agreement

                	
                  _________

                
	
                  2.
                    P-Newco - TPL - PTSC Commercialization Agreement

                	
                  25
                    MAY 05

                
	
                  3.
                    ________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]