Message: The "Agreement"...
Item 1.01 Entry into a Material Definitive Agreement.
Agreement for Legal Services
On March 23, 2007 e.Digital Corporation (the “Company”) entered into an agreement for legal services and contingent fee arrangement (“Agreement”) with Duane Morris LLP. The Agreement provides that Duane Morris will be the Company’s exclusive legal counsel in connection with the assertion of the Company’s flash memory related patents against infringers (“Patent Enforcement Matters’).
Duane Morris has agreed to handle the Company’s Patent Enforcement Matters and certain related appeals on a contingent fee basis for Duane Morris time. Duane Morris also has agreed to advance certain costs and expenses including travel expenses, court costs and expert fees. The Company has agreed to pay Duane Morris a fee equal to 40% of any license or litigation recovery related to Patent Enforcement Matters, after recovery of expenses, and 50% of recovery if appeal is necessary. The Company may seek alternate representation if Duane Morris is unable or unwilling to represent specific litigation and any related recovery is excluded from the contingent fee arrangement.
In the event the Company is acquired or sold or elects to sell the covered patents or upon certain other corporate events or in the event the Company terminates the Agreement for any reason, then Duane Morris shall be entitled to collect accrued costs and a fee equal to three times overall time and expenses accrued in connection with the Agreement and a fee of 15% of a good faith estimate of the overall value of the covered patents. The Company has agreed to provide Duane Morris a lien and a security interest in the patents to secure its obligations under the Agreement.
A copy of the Agreement is filed herewith as Exhibit 99.1 and is incorporated herein by reference. The summary of the transaction set forth above does not purport to be complete and is qualified in its entirety by reference to such exhibit.
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