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PATRIOT SCIENTIFIC CORPORATION
EXHIBIT 10.6
LETTER STOCK AND WARRANT AGREEMENT
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January 10, 0000
Xxxxxx X. Xxxxxxxx
00 Xxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxxxxx:
This letter confirms our recent conversation whereby you expressed a desire to
purchase 200,000_shares (the "Shares") of Patriot Scientific Corporation
("Patriot") Common Stock, par value $.00001 (the "Common Stock"), for the sum
of $100,000 USD (the "Funds") or $0.50 per share. Patriot is willing to sell
the Shares to you for the consideration and upon the terms hereof, subject to
receipt of Funds by Patriot by certified check or wire transfer on or before
January 10, 1996. Please contact me if you need wiring instructions.
Upon receipt of the Funds, Patriot shall immediately take all necessary
corporate action to cause the Shares to be issued to you in the name and at the
address you specify below.
In connection with the above, you are hereby granted a non-transferable Warrant
to purchase an additional 200,000 shares at the same price of $.50 per share
for a period of 60 days, or 30 days after the date of notice of any
registration, whichever is later, but in any event not later than six months
from this date.
You acknowledge that the Shares are being offered and sold without
qualification or registration under California Corporate Securities Law of 1968
or any other State securities act or the Securities Act of 1933, as amended, in
reliance upon an exemption from the qualification and registration requirements
for private placements. In furtherance thereof, you represent and warrant to
and agree with the Company as follows:
(a) You satisfy the requirements of Section 501(a)(5) of Regulation D (i.e., a
natural person whose individual net worth, or joint net worth with that of
your spouse, at the time of purchase exceeds $1,000,000) and are therefore
an "accredited investor" as such term is defined in Regulation D of the
Securities Act of 1933.
(b) You have received and reviewed the Patriot Annual Report on Form 10-KSB for
the fiscal year ended May 31, 1995, the Quarterly Reports on Form 10-QSB
for the fiscal quarters ended August 31, 1995 and November 30, 1995 and all
other documents and information requested by you.
(c) You acknowledge that you have been provided or have had free and full
access to inspect all of the premises, properties, assets, books,
contracts, commitments, securities filings and other documents relating to
the business of Patriot. You acknowledge that you are satisfied that you
have obtained sufficient information to evaluate the merits and risks of an
investment in Patriot and you understand the business in which Patriot is
engaged.
(d) You have had the opportunity to meet with representatives of Patriot and to
have them answer any questions and provide additional information regarding
the finances, operations, business and prospects of Patriot deemed relevant
by you and all such questions have been answered and requested information
provided to your satisfaction.
(e) You have such knowledge and experience in financial and business matters so
as to enable you to evaluate the merits and risks of an investment in the
Shares and to make an informed investment decision with respect thereto.
(f) You are aware that an investment in the Shares is highly speculative and
involves a high degree of risk.
(g) You have the financial ability to bear the loss of your entire investment
in the Shares.
(h) You are acquiring the Shares solely for your own account for investment and
not with a view to resale or distribution.
(i) You understand that the Shares being purchased are characterized as
"restricted securities" under the federal securities laws because they are
being acquired from Patriot in a transaction not involving a public
offering and that under such laws and applicable regulations such
securities may be resold without registration under the Act only in certain
limited circumstances. In this connection, you represent that you are
familiar with SEC Rule 144, as presently in effect, and understand the
resale limitations imposed thereby and by the 1933 Act.
(j) You understand that the certificates evidencing the Shares will bear a and
may not be sold, offered for sale, pledged or hypothecated in the absence
of a registration statement in effect with respect to the securities.
Patriot agrees however to register the shares (including those underlying
the Warrant) in any current or future registration statement filed by
Patriot (other than registration statements filed in connection with
employee benefit plans or mergers). We also agree to use our reasonable
best efforts to effect a registration of the shares, subject to the
limitations and restrictions generally associated with demand registration
rights. However, there can be no assurance of future registration and you
may be required to hold the Shares under rule 144.
You and Patriot warrant that no broker, finder or other person is entitled to
receive from Patriot or you any commission, finder's fee or other similar
compensation in connection with this transaction and each party agrees to
defend, indemnify and hold harmless the other party against any loss liability,
damage, cost, claim or expense incurred by
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reason of any brokerage commission or finder's fee alleged to be payable
because of any act, omission or statement of the indemnifying party.
Each party shall pay its own costs and expenses incurred or to be incurred in
closing and carrying out this transaction. The terms of this investment and
agreement shall be construed, performed and enforced in accordance with the
laws of the State of California.
The terms of this letter requires the signature by you below and delivery of
the Funds to Patriot on or before January 10, 1996. If Patriot does not
receive the Funds and a copy of this letter signed by you by January 10, 1996,
the foregoing offer by Patriot to sell the Shares shall terminate.
Sincerely,
XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
CEO & President
Acknowledged and Agreed:
XXXXXX X. XXXXXXXX, XX.
Signature
XXXXXX X. XXXXXXXX, XX.
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Printed Name
00 Xxxxxxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000
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Address
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