UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 24, 2014
PATRIOT SCIENTIFIC CORPORATION
(Exact name of registrant as specified in its
charter)
Delaware |
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000-22182 |
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84-1070278 |
(State of other jurisdiction
of incorporation) |
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(Commission File Number) |
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(IRS Employer
Identification No.) |
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701 Palomar Airport Road, Suite 170, Carlsbad, California 92011 |
(Address of Principal Executive Offices) |
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Registrant’s telephone number, including area code: (760) 547-2700 |
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Not Applicable |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2 below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
o
Soliciting material pursuant to Rule 14A-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material
Definitive Agreement.
On July 24, 2014, the joint
venture of Patriot Scientific Corporation (the “Company”) and Technology Properties Limited LLC (“TPL”),
known as Phoenix Digital Solutions, LLC, a Delaware limited liability company (“PDS”), entered into the Amended Alliacense
Services and Novation Agreement (the “Agreement”) with Alliacense Limited LLC, a Delaware limited liability company
(“Alliacense”).
Pursuant to the Agreement,
PDS and Alliacense modified the terms of the Alliacense Services Agreement, dated as of July 7, 2012 (the “Services Agreement”)
by which Alliacense commercializes the Moore Microprocessor Patent portfolio (the “MMP Portfolio”) through licensing
and litigation on behalf of PDS, TPL, and the Company. The Agreement amends Alliacense’s obligations and compensation, and
settles certain outstanding disputes between PDS and Alliacense. In addition, the Agreement provides for the addition of a second
licensing company, to be determined by the Company, to commercialize the MMP Portfolio.
The foregoing description
of the Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Agreement, a
copy of which is attached hereto as Exhibit 10.10.
On July 28, 2014, the Company
issued a press release announcing the Agreement, which is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following
materials are filed as exhibits to this current report on Form 8-K:
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Exhibit Number |
Description |
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10.10 |
Agreement effective July 24, 2014 between Phoenix Digital Solutions, LLC and Alliacense Limited LLC.* |
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99.1 |
Press Release, dated July 28, 2014, entitled “Patriot Scientific Corporation Announces Key New Agreement.” |
*The Company has requested confidential treatment
of portions of the exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. The confidential portions of this
exhibit have been omitted and are marked accordingly. The confidential portions have been filed separately with the Securities
and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PATRIOT SCIENTIFIC CORPORATION |
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Date: July 30, 2014 |
By: /s/ CLIFFORD L. FLOWERS |
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Clifford L. Flowers |
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Chief Executive Officer |
Exhibit 10.10
Confidential information has been
omitted from portions of this document, indicated by [*], and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to this omitted information.
AMENDED ALLIACENSE SERVICES AND
NOVATION AGREEMENT
The parties to this Agreement dated July
23, 2014 (the “Agreement”), are Alliacense LLC, a Delaware Limited Liability Company (“Alliacense”) and
Phoenix Digital Solutions, LLC, a Delaware limited liability company (“PDS”). PDS has two Members, Patriot Scientific
Corporation (“PTSC”) and Technology Properties LLC (“TPL”). TPL and Alliacense are owned by Daniel E. Leckrone
(“Dan Leckrone”). Alliacense is managed by Daniel M. Leckrone (“Mac Leckrone”). PDS is presently managed
by two Managers, Swamy Venkidu (“Venkidu”) and Carlton Johnson, Jr. (“Johnson”). TPL and Patriot are affected
by the provisions related to a second licensing company in section 3(f), below, and so the two of them acknowledge the provisions
of that section.
This Agreement is made with reference
to the following facts
a. Beginning in 2005, PDS and Technology
Properties LLC entered and operated under a certain Master Agreement dated June 7, 2005, and at the same time a Commercialization
Agreement, providing for commercialization of the Moore Microprocessor Patent portfolio (“MMP”) through licensing and
litigation (“TPL ComAg”). Alliacense began carrying on many of those responsibilities for TPL.
b. In 2010, disagreements existed
between Patriot on the one hand and TPL and Alliacense on the other resulting in litigation captioned Patriot Scientific Corporation
v. Technology Properties, Ltd, et. al., Santa Clara Superior Court case No. 110-cv-169836. That litigation settled in 2010
under a settlement agreement between TPL and Patriot. That settlement is not affected by this Agreement (“Patriot/ TPL settlement”).
c. TPL sought Chapter 11 bankruptcy
protection in the Northern District of California, Case no. 13-51589, on March 20, 2013. Patriot is an unsecured creditor in that
bankruptcy related to the Patriot/TPL Settlement. This Agreement does not affect Patriot's claim or that of any other creditor
in that bankruptcy.
d. On or about July 7, 2012, PDS,
TPL, Patriot and Alliacense entered into new agreements under which Alliacense took on a direct contractual relationship with PDS
to pursue commercialization of the MMP and to provide litigation support to Agility IP law (“Agility”), hired to conduct
MMP patent infringement litigation. The agreements executed at that time include the Alliacense Services Agreement dated July 7,
2012 ("Services Agreement"). Except as the Services Agreement is affected herein, those agreements are not changed by
this Agreement.
e. Under the Services Agreement, the
parties have had a number of disagreements about past payments allegedly due Alliacense, what quarterly advances should have been
made and whether they are continuing, Alliacense’s role in pending and prospective litigation, and whether the MMP licensing
program is proceeding effectively. Alliacense has presented monetary claims to PDS presently totaling $2,214,189 based on claims
for past services and advances, and has claimed harm from the delay in such payment. This Agreement resolves all of those claims
in dispute between the parties.
f. On or about June 13, 2014, Alliacense,
PDS and Patriot agreed to terms to resolve disagreements between them and to define Alliacense’ role in MMP licensing and
litigation going forward. A term sheet in that regard is attached hereto as Exhibit “A”. This Agreement is intended
to memorialize, clarify and effect the term sheet and communications referenced therein.
g. On or about June 19, 2014, Agility
entered into a new fee agreement with PDS providing for ongoing MMP litigation with HTC Corporation, for pending litigation in
the Northern District of California with various infringers, for a share of future MMP licensing proceeds on specified terms, and
for potential future MMP patent infringement litigation (“Agility Agreement”). This Agreement is intended to reflect
consideration of the terms of this new agreement with Agility.
For good and valuable consideration,
the receipt of which is hereby acknowledged, the parties agree as follows:
a. HTC
Alliacense has attempted to negotiate
an MMP license with HTC without success. It provided litigation support in connection with the HTC trial in Fall 2013. The parties
are presently in a negotiation to settle the HTC lawsuit and potentially issue an MMP license, or license with respect to some
MMP patents, to HTC. Based on this, [*] The parties do not contemplate any significant future litigation support from Alliacense
as to HTC; if needed, Alliacense will be paid at the hourly rates discussed in paragraph 3(b)(i) below.
Notwithstanding the foregoing, Alliacense
shall not be obligated to provide any litigation support services. However, if Alliacense is requested in writing by PDS within
no less than ten days advance notice of relevant deadlines, but declines to provide such litigation support services, its total
fee, if any, as to HTC, shall be calculated [*].
b. Present Defendants
Alliacense has provided litigation support
to Agility in connection with the unsuccessful ITC proceeding that also benefits Agility’s effort in the parallel North District
of California actions against Barnes & Noble and others. Alliacense hereby agrees to permit Agility to utilize Alliacense intellectual
property to pursue the Northern District of California cases currently pending. No fee of any kind is due Alliacense for that past
service. If any work is required from Alliacense in support of those cases, it will be compensated in accordance with subparagraph
3(b)(i) only.
With respect to present Defendants, if
they do not take on MMP licenses in connection with any settlement, no fee will be earned by Alliacense. If they do take on MMP
licenses in connection with a settlement, Alliacense’s fee will be calculated as [*]. For further clarification, the gross
settlement with a present defendant is considered in the milestones of subparagraphs 3(d)(i), and (d)(ii).
Notwithstanding the foregoing, Alliacense
shall not be obligated to provide any litigation support services. However, if Alliacense is requested in writing by PDS within
no less than ten days advance notice of relevant deadlines, but declines to provide such litigation support services, its total
fee, if any, shall be calculated on the [*].
(i) Alliacense litigation support
Alliacense will be compensated on an
hourly basis on its Standard Rates previously set forth in Alliacense's May 18, 2011 memorandum (TPL 11-003780) attached as Exhibit
C. Such support will provided only as requested by Agility, and further, the fees will be estimated in advance by Alliacense and
approved by PDS before they are incurred. Under Agility’s fee arrangement with PDS, Alliacense’s fees are not costs
of the Program, but the parties anticipate that if another litigation firm is retained for MMP patent infringement litigations,
then Alliacense’s fee will be a cost borne by that law firm and not by PDS, meaning that Alliacense’s compensation
from that law firm for litigation support will be decided as between Alliacense and that law firm. In no event will Alliacense
charge for more than [*] litigation support personnel (this sentence replacing the Headcount provision of Ex. B, part IV(B) of
the Services Agreement). The detail and support for such billing will be subject to the same industry custom and practice as in
the legal industry.
(ii) Negotiations
Agility will lead the negotiations with
the present Defendants working in conjunction with [*] and take its instructions from PDS, but Agility and [*] will consult and
coordinate with each other in the best interests of the MMP Program. Agility may decide that it is more appropriate in certain
circumstances for [*] to lead or conduct a negotiation. PDS will execute all MMP licenses.
c. Future Defendants
Alliacense’s compensation and role
with respect to future litigation defendants shall be determined [*] provided that Alliacense continues to participate in licensing
negotiations and activities as to such Defendants in cooperation with Agility (or other counsel). [*] Alliacense will make available
its claim charts and license negotiation files to outside counsel as needed (subject to preservation of confidentiality).
d. Future MMP licensing (Non-Defendants)
The
"Licensing Services Fee" of the Services Agreement at 3.1.1 (“Licensing Services Fee”) [*]
For
illustrative purposes see additional examples set forth in Exhibit B.
Any
[*] are excluded from the milestone calculations of this paragraph 3(d). As for installment payments, no future installment
will be deemed received and the Alliacense Licensing Services Fee will be determined when future installments are received as though
a new license had been written.
The
provision of advances set forth in the Services Agreement at paragraph 3.2 is terminated. No such advances will be provided.
The licenses
written by another licensing company under paragraph 3(f) will not be credited toward Alliacense's Licensing Services Fee or affect
the milestones.
(i) Dry period
A period of [*] days or more without
receipt by PDS of $[*] or more in MMP license proceeds from Alliacense's licensing activities will restart the [*]% Licensing Services
Fee, and licenses paid before the restart date will not be counted towards the cumulative amounts and Licensing Services Fee [*].
Beginning [*], the $[*] figure of the preceding sentence will be $[*].
(ii) One year milestone
This Agreement is subject to termination
on written notice from PDS, if during any [*] period beginning on or after the date of this Agreement, PDS fails to receive at
least $[*] from litigation and non-litigation MMP licensing by Alliacense. The exception to the foregoing is that [*].
(iii) Mixed licenses
Alliacense will not negotiate MMP and
non-MMP licenses at the same time or in conjunction with each other, and neither at the expense of each other. No MMP license will
be written without PDS’s consent, and no such mixed license will be written without its advance written consent. Alliacense
will keep PDS apprised on a weekly basis of all MMP negotiations as well as negotiations of non-MMP prospective licenses (subject
to preservation of confidentiality) with any potential licensee who has been approached during the previous year for an MMP license.
If asked by prospective licensees to bundle licenses or negotiate IP portfolios together, Alliacense will indicate to such prospective
licensees that it has a responsibility to its client(s) not to do so. A violation of this provision will be grounds for termination
by PDS.
(iv) Alliacense Contact
[*] will be the point of contact with
PDS and Agility and will be in charge of MMP licensing. If [*] leaves Alliacense's employ, the [*] replacement by Alliacense must
a) possess skills and experience acceptable to PDS, b) be unaffiliated with the current ownership of either TPL or Alliacense,
and c) be promptly identified and retained by Alliacense so as to avoid any potential interruption to the licensing program. Each
of these conditions must be met in order for the continuation of the Services Agreement. (This replaces paragraph 2.3 of the Services
Agreement.)
(v) Licensing Activities
For sake of clarity, Alliacense licensing
duties and responsibilities under the Alliacense Services Agreement include, but are not limited to the following:
| 1) | Define and develop worldwide licensing strategies; |
| 2) | Study patent coverage for specific products; |
| 3) | Develop claim charts to support Licensing Activities, but not litigation activities,
provided however that PDS shall be responsible for the cost of acquiring the products of prospective licensees for the purpose
of analyzing such products to create claim charts, but only to the extent PDS has provided written authorization for such acquisitions; |
| 4) | Coordinate and manage licensing duties with outside legal counsel; |
| 5) | Coordinate with legal counsel licensing data needs in patent litigation; |
| 6) | Review and assess potential licensee candidates; |
| 7) | Evaluate marketability of patents; |
| 8) | Maintain and manage database of licensees relating to all MMP patent procedures and processes; |
| 9) | Assist PDS with compliance of local, state and federal reporting relating to patent issues; |
| 10) | Review patent issues in mergers and acquisitions; and |
| 11) | Perform other duties, as reasonably requested by Patent owner and agreed to by Alliacense. |
Notwithstanding the foregoing, Alliacense
shall not be obligated to provide any litigation support services. However, if Alliacense is requested in writing by PDS within
no less than ten days advance notice of relevant deadlines, but declines to provide such litigation support services, its total
fee, if any, shall be calculated [*].
e. Past Alliacense claims
With respect to the past sums in dispute
totaling $2,214,189, that will be resolved by payment to Alliacense of $623,000. Of that amount, $300,000 was paid in November
2013 and another $161,500 was paid on June 20, 2014. The remaining balance, $161,500, will be paid by PDS within 2 business days
of the parties' execution of this Agreement, including the acknowledgements of paragraph 3(f).
f. Patriot Licensing Company
To reinvigorate the MMP Program, the
parties agree that Alliacense will be the exclusive licensor as to approximately half of the universe of prospective licensees,
and one or more other licensing companies as to the balance. The licensing companies will not be in competition and it is in their
interests and that of the MMP Program for all licensing to achieve its maximum potential. [*]. The licensing companies will coordinate
their efforts in the best interests of the MMP Program.
(i) Dividing the universe of MMP
licensees
Alliacense shall, once Patriot identifies
as a second licensing company on terms approved by Patriot, [*] This group shall be the “Group 1 Designees”. The other
list, [*], shall be called “Group 2 Designees”. Alliacense represents and warrants that all companies or entities known
to Alliacense as infringing, or potentially infringing, on any of the MMP patents, or which are otherwise candidates or potential
candidates for licensing some or all of the patents within the MMP Portfolio, are included in either the Group 1 or Group 2 Designee
listings.
(ii) Patriot will arrange for PDS to
enter into a Commercialization Agreement with another licensing company (“Patriot Licensing Company”) on terms determined
by Patriot.
(iii) [*]. In exchange for providing
this information, PDS shall compensate Alliacense [*] from any Group 1 Designee so long as a) all or a significant portion of the
aforementioned items constituting Work had been provided, and b) [*]. This [*] fee will no longer be due and payable on any amounts
received after two years from the date of this Agreement.
(iv) In addition to the present Defendants
which are excluded from the preparation of the two listings described in section 3.f.(i) above, Alliacense may also exclude up
to three (3) entities for which substantive, on-going, current and demonstrable bona fide negotiations have been in process up
through, and as of, the date of this Agreement. Alliacense shall disclose to Patriot the names of these three entities immediately
upon notification by Patriot that a second licensing company has been identified. Alliacense shall retain the right to market the
MMP Portfolio to these entities for licensure for a period of 150 days after the execution of this Agreement. After the 150 day
period, the right to market to these three entities (or any of the three that remain unlicensed) shall be allocated between Alliacense
and the Patriot Licensing Company, with the Patriot Licensing Company allowed the first selection, Alliacense the second selection,
and Patriot the third selection.
g. Other Changes to July 2012 Alliacense
Services Agreement
(i) [*]. Alliacense is not due a Licensing
Services Fee [*]. It will be entitled to a [*] Licensing Services Fee [*] when and if paid. The percentage does not change based
on other licensing activities.
(ii) No quarterly advances. The
parties have discontinued the practice of quarterly advances provided in the Alliacense Service Agreement.
(iii) Compensation Provision.
The compensation provisions of paragraph 3 of the Services Agreement are superseded by this Agreement.
(iv) Litigation Support Projects.
These projects have ended.
a. Payments to Alliacense shall be
due and payable (i) within ten business days of receipt of Recovery by PDS, for payments based on Recovery, and (ii) within thirty
business days of PDS’ receipt of an Alliacense invoice for payments based on hourly billing. The gross amount of all payments
due Alliacense hereunder shall be paid in US dollars on or before the due date in “same day” funds by wire transfer
pursuant to the table below (or to such other account as Alliacense may designate at any time):
Account Name |
[*] |
Account # |
[*] |
Bank Name |
[*] |
ABA / Routing # |
[*] |
SWIFT Code |
[*] |
Interest is due on all late payments (greater than 30 days) except amounts disputed in good faith, and will be calculated on the
unpaid balance at 2% above the then valid 3-month London Interbank Offered Rate until paid.
b. Dispute Resolution
(i) The parties shall attempt in good
faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between executives who have authority
to settle the controversy. Any party may give the other party written notice of any dispute not resolved in the normal course of
business. Within 15 days after delivery of the notice, the receiving party shall submit to the other a written response. The notice
and response shall include with reasonable particularity (a) a statement of each party’s position and a summary of arguments
supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who
will accompany the executive. Within 30 days after delivery of the notice, the executives of both parties shall meet at a mutually
acceptable time and place.
(ii) Unless otherwise agreed in writing
by the negotiating parties, the above-described negotiation shall end at the close of the first meeting of executives described
above (“First Meeting”). Such closure shall not preclude continuing or later negotiations, if desired.
(iii) All offers, promises, conduct
and statements, whether oral or written, made in the course of the negotiation by any of the parties, their agents, employees,
experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in arbitration or other
proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible
or non-discoverable as a result of its use in the negotiation.
(iv) At no time prior to the First Meeting
shall either side initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is
authorized by law or by the Judicial Arbitration and Mediation ("JAMS") Rules or by agreement of the parties. However,
this limitation is inapplicable to a party if the other party refuses to comply with the requirements of Paragraph 1 above.
(v) All applicable statutes of limitation
and defenses based upon the passage of time shall be tolled while the procedures specified in Paragraphs 1 and 2 above are pending
and for 45 calendar days thereafter. The parties will take such action, if any, required to effectuate such tolling.
(vi) Either party may then commence
mediation by providing to JAMS and the other party a written request for mediation, setting forth the subject of the dispute and
the relief requested.
(vii) The parties will cooperate with
JAMS and with one another in selecting a mediator from the JAMS panel of neutrals and in scheduling the mediation proceedings.
The parties agree that they will participate in the mediation in good faith and that they will share equally in its costs.
(viii) All offers, promises, conduct
and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts
and attorneys, and by the mediator or any JAMS employees, are confidential, privileged and inadmissible for any purpose, including
impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible
or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.
(ix) If the matter is not resolved by
negotiation pursuant to paragraphs (i)-(viii) above, the parties agree that any and all disputes, claims or controversies arising
out of or relating to this Agreement shall be submitted to JAMS, or its successor, for final and binding arbitration pursuant to
the clause set forth in subparagraphs (x)-(xiii) below.
(x) Either party may initiate arbitration
with respect to the matters submitted to mediation by filing a written demand for arbitration at any time following the initial
mediation session or at any time following 45 days from the date of filing the written request for mediation, whichever occurs
first. The mediation may continue after the commencement of arbitration if the parties so desire.
(xi) The arbitration is to be conducted
by a sole arbitrator. The arbitrator shall be a retired judge affiliated with JAMS or its successor.
(xii) The arbitration shall be administered
by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. Judgment on the Award may be entered in California. This
clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.
(xiii) The arbitration shall take place
in San Jose, California.
(xiv) This section supersedes the Dispute
Resolution provision of the Services Agreement.
c. Mutual Release. Effective
as of the Effective Date, Alliacense, LLC and its agents, attorneys, employees, spouse, predecessors, successors, heirs and assigns
of each of the foregoing (collectively, the "Alliacense Parties"), on the one hand, and Phoenix Digital Solutions (“PDS”),
and Patriot Scientific Corporation (“Patriot”), on the other hand, hereby release and forever discharge each other,
and each of the their respective past and present agents, managers, members, affiliates, attorneys, directors, officers, employees,
insurers, predecessors, successors, heirs and assigns from any and all claims, demands, controversies, actions, causes of action,
suits, proceedings, obligations, liabilities, fines, penalties, costs, expenses, attorneys’ fees, and damages arising out
of their past dealings with each other including but not limited to under the Alliacense Services Agreement dated July 7, 2012.
It is the Parties’ intention that
the foregoing release shall be effective as a bar to all matters released herein. In furtherance, and not in limitation of such
intention, the release described herein shall remain in effect as a full and complete release, notwithstanding the discovery or
existence of any additional information or different facts or claims. To further effectuate this intention, the Parties hereby
waive their rights under California Civil Code section 1542, and any statute, rule, or legal doctrine similar to California Civil
Code section 1542. Section 1542 provides as follows:
A GENERAL RELEASE DOES EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT 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.
In waiving the provisions of California
Civil Code section 1542, the Parties acknowledge that they may hereafter discover facts in addition to or different from those
which they now believe to be true with respect to the matters released herein, but agree that they have taken that possibility
into account in reaching this Agreement, and that the release given here shall remain in effect as a full and complete release
notwithstanding the discovery or existence of such additional or different facts, as to which the Parties expressly assume the
risk.
d. Consideration Acknowledged.
The Parties acknowledge that the provisions and faithful performance of this Agreement provide mutually sufficient consideration
for any and all rights, duties, or obligations created herein.
e. Notices. Any notice or other
communication required or permitted to be given under this Agreement shall be in writing and may be served by both facsimile and
a nationally recognized overnight courier service or by hand delivery and shall be deemed to have been given: (a) if delivered
in person, when delivered or (b) if delivered by facsimile and overnight courier service, on the date of transmission, upon confirmation
of such facsimile, if transmitted on a business day before 5:00 p.m., Pacific Time, or if not, on the next succeeding business
day. Notices shall be addressed to the Parties at the following addresses:
Notice to Alliacense:
Alliacense Limited LLC
c/o Mac Leckrone, President
20883 Stevens Creek Boulevard
Suite 100
Cupertino, CA 95014
Notice to Patriot:
Patriot Scientific Corp.
c/o Clifford Flowers
701 Palomar Airport Road, Suite 170
Carlsbad, CA 92011
Notice to PDS:
Carlton Johnson, Jr., Manager
c/o Patriot Scientific Corp.
701 Palomar Airport Road, Suite 170
Carlsbad, CA 92011
Arocklyaswamy Venkidu, Manager
c/o Patriot Scientific Corp.
701 Palomar Airport Road, Suite 170
Carlsbad, CA 92011
Notice to Counsel for Patriot:
Charles T. Hoge, Esq.
Kirby Noonan Lance & Hoge, LLP
350 Tenth Avenue, Suite 1300
San Diego, CA 92101-8700
f. Warranties. All Parties
warrant and represent that they have not assigned the claims being released herein to third parties.
g. Entire Agreement. This Agreement
embodies the final, entire agreement between the Parties hereto and except as otherwise provided herein, supersedes any and all
prior commitments, agreements, representations, and understandings, whether written or oral, relating to the subject matter hereof
and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the
Parties hereto. The provisions of this Agreement may be amended or waived only by an instrument in writing signed by the Parties.
h. Successors and Assigns.
This Agreement shall be for the benefit of and binding upon the Parties and their respective representatives, successors and assigns.
i. Representations. Each Party
acknowledges that the terms of this Agreement have been completely read and are fully understood and voluntarily accepted by each
Party, after having a reasonable opportunity to retain and confer with counsel. The Parties enter into this Agreement after a full
investigation, and the parties are not relying upon any statements or representations not embodied in this Agreement.
j. Capacity and Authority.
The Parties each represent and warrant that they have the power, authority, and capacity to enter into this Agreement and that
this Agreement is valid, binding, and enforceable upon them.
k. Severability. Should any
portion or clause of this Agreement be found to be invalid, illegal, void, voidable or unenforceable for any reason whatsoever,
this Agreement shall be read as if it did not contain said portion or clause. The Parties intend for any such invalid portion or
clause to be severable from the remainder. Any such clause or portion and its severance shall not affect the validity or effect
of the remaining provisions of the Agreement.
l. Section Headings. The captions,
subject, section and paragraph headings in this Agreement are included for convenience and reference only. They do not form a part
hereof, and do not in any way modify, interpret or reflect the intent of the Parties. Said headings shall not be used to construe
or interpret any provision of this Agreement.
m. Modifications. No change
in, addition to or erasure of a printed portion of this Agreement shall be valid or binding and no verbal Agreement of any nature
relating to the subject matter of this Agreement or to any relationship between the parties will be considered valid or enforceable.
This Agreement may not be superseded, modified or amended orally and no modification, waiver or amendment shall be valid unless
in writing and signed by the party against whom the same is sought to be enforced.
n. No Presumption Against Drafting
Party. This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party because
said party drafted or caused the Party's legal representative to draft any of these provisions. This Agreement shall be construed
without reference to the identity of the Party or Parties preparing the same, it being expressly understood and agreed that the
Parties participated equally or had equal opportunity in the drafting thereof. The parties understand that the Agreement has been
drafted for convenience by counsel for Patriot because PDS is not represented and because Alliacense is owned and managed by counsel.
o. Parties in Interest. Except
as provided in the general release provisions of this Agreement, nothing in this Agreement, whether express or implied, is intended
to confer any rights or remedies under or arising by reason of this Agreement on any persons other than the Parties and their respective
successors and permitted assignees. Other than as described in the general release above, nothing in this Agreement is intended
to relieve or discharge the obligation or liability of any third person to any Party to this Agreement, nor shall any provision
give any third person any right of subrogation or action over or against any Party.
p. California Law. This Agreement
shall be construed and enforced in accordance with California law.
q. Execution Via Facsimile and
in Counterparts. This Agreement can be executed in counterparts and signatures sent via facsimile will be treated as original
signatures.
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Phoenix Digital Solutions, LLC |
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By: |
/s/ Arocklyaswamy Venkudi 7/24/14 |
By: |
Arocklyaswamy Venkidu, Manager
/s/ Carlton Johnson, Jr. 7/24/14 |
|
|
Carlton Johnson, Jr., Manager |
|
|
|
|
Alliacense, LLC |
|
|
|
By: |
/s/ Mac Leckrone 7/23/14 |
|
Mac Leckrone, President |
Agreed to as to the Other Licensing Company provisions of section
3(f):
Exhibit A- Term Sheet
[*]
Exhibit B- Illustrative Example
Assume
License Proceeds
Received on: |
License Amount |
Cumulative |
|
Compare to Term Sheet |
[*]
|
Initials: |
|
Venkidu __________ |
|
Johnson __________ |
|
Mac Leckrone __________ |
Exhibit C- Alliacense Standard Rates
TPL-CONFIDENTIAL
OCC-TPL NDA DTD [*]
USBC CH 11 NO. 13-51589
Rate Schedule: as of [*]
Position |
Pay Grade |
Market Rate |
Standard Rate |
Admin |
Admin |
[*] |
[*] |
Business Analysis |
Business Analysis 1
Business Analysis 2 |
[*] |
[*] |
Executive |
Executive |
[*] |
[*] |
IP Analysis |
IP Analysis |
[*] |
[*] |
IP Legal |
Admin
Executive
IP Legal 1
IP Legal 2
IP Legal 3 |
[*] |
[*] |
Reverse Engineering |
IP Analysis
Reverse Engineering |
[*] |
[*] |
Sales |
Sales |
[*] |
[*] |
Systems |
Systems |
[*] |
[*] |
Technical Experts |
IP Legal 2
Technical Experts |
[*] |
[*] |
Exhibit 99.1
Patriot Scientific Corporation
Announces Key New Agreement 07/28/14
July 28, 2014
CARLSBAD, Calif., July 28, 2014 -- (PR
Newswire) - Patriot Scientific Corporation (OTCBB: PTSC) today announced that Phoenix Digital Solutions (PDS), Patriot’s
joint venture that aggregates the ownership interests in the Moore Microprocessor Patent (MMP) PortfolioTM, has entered into an
agreement with Alliacense, LLC. The agreement settles all outstanding disputes between PDS and Alliacense and provides for the
addition of a second company to complement Alliacense in securing licenses to the MMP Portfolio.
“We are extremely satisfied with the terms of the agreement which establishes important performance goals and incentives
for Alliacense, while increasing our reach and opportunities for success by providing for the retention of a second licensing agent,”
stated Carlton Johnson, Patriot Board member and its appointee to the PDS Management Committee.
In June Patriot announced that PDS reaffirmed representation by Agility IP Law, LLP in pursuit of MMP Portfolio infringers. “We
believe the developments from today’s announcement are well suited to augment and further leverage the services of Agility.
With the recent addition of Arocklyaswamy (Swamy) Venkidu as my new counterpart on the PDS Management Committee, I’m looking
forward to a renewed and productive working relationship at PDS,” added Mr. Johnson.
About Patriot Scientific Corporation
Headquartered in Carlsbad, California, Patriot Scientific Corporation is the co-owner of the Moore Microprocessor Patent Portfolio™.
For more information on PTSC, visit www.ptsc.com.
About the MMP Portfolio™
The MMP Portfolio includes US patents as well as their European and Japanese counterparts, which cover techniques that enable higher
performance and lower cost designs essential to consumer and commercial digital systems ranging from PCs, cell phones and portable
music players to communications infrastructure, medical equipment and automobiles.
About Agility IP Law, LLP
Based in Menlo Park, California, Agility’s attorneys specialize in intellectual property litigation, and have tried patent
infringement and other IP enforcement actions in a broad range of industries, including semiconductors, software, consumer electronics,
medical devices, telecommunications, nutritional supplements and footwear, to name a few. Agility represents IP owners, as well
as those accused of infringement. Agility’s expertise facilitates efficient and effective case management from pre-filing
analysis through trial and appeal. Agility’s trial attorneys are experts at distilling complex technical concepts for judges
and juries. In addition to Agility’s substantial trial experience in U.S. district courts and the U.S. International Trade
Commission, the Agility team is well-versed in the many forms of alternative dispute resolution, including the mediation and arbitration
of intellectual property disputes. For more information, visit Agility’s website at www.agilityiplaw.com.
Safe Harbor Statement: Statements herein which are not purely historical, including statements regarding Patriot Scientific Corporation's
intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks
and uncertainties including, but not limited to, the risk that the recently filed actions and litigation strategy may not be successful
and the risks and uncertainties relating to the future of our MMP joint-venture. It is important to note that the company's actual
results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, risks and uncertainties associated with the effect of changing economic conditions,
trends in the products markets, variations in the company's cash flow, market acceptance risks, patent litigation, technical development
risks, and seasonality. Our business could be affected by a number of other factors, including the risk factors listed from time
to time in the company's SEC reports including, but not limited to, the annual report on Form 10-K for the year ended May 31, 2013
and the quarterly report on Form 10-Q for the period ended February 28, 2014. The company cautions investors not to place undue
reliance on the forward-looking statements contained herein. Patriot Scientific Corporation disclaims any obligation, and does
not undertake to update or revise any forward-looking statements made herein.
Contact:
Patriot Investor Relations
ir@ptsc.com
760-547-2700 x-102