PATRIOT SCIENTIFIC CORP: 8-K, Sub-Doc 2 6/15/05

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.

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.