Item 1.01 Entry into a Material Definitive Agreement.
Agreement for Legal Services
On September 14, 2012 e.Digital Corporation (the “Company”) entered into an agreement for legal services and contingent fee arrangement (“Agreement”) with Handal and Assocates (“Handal”). The Agreement provides that Handal will be the Company’s legal counsel in connection with licensing and prosecuting claims of infringement of the Company’s flash memory patent portfolio (“Patent Enforcement Matters”).
Handal has agreed to handle the Company’s Patent Enforcement Matters on a partial contingent fee basis. The Company will pay a monthly retainer fee of $30,000 creditable against future contingency recoveries. Handal has agreed to advance related expenses excluding experts and prior art search firms. The Company has agreed to (a) pay Handal a fee equal to 33% of any license fee or settlement related to Patent Enforcement Matters, less prior retainers; and (b) reimburse Handal for advanced expenses. The fee is 40% if litigation is required and successful.
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.
On September 17, 2012, the Company issued a press release announcing the legal representation, a copy of which is attached hereto as Exhibit 99.3 and is incorporated by reference herein.
