Patriot Scientific
In January the Committee and TPL filed their joint disclosure statement. Pursuant to that statement:
TPL further understands that Patriot contends that the Novation is in breach owing to the failure to deliver the list.
Subsequent to that January disclosure, Patriot admits that the Novation is in breach in their recent 10Q. So if PDS is comprised of Carl, Swamy and the mystery member, just how pursuasive will they be in compelling Alliacense to do anything.
More importantly, are they ready, willing and able to terminate the Alliacense agreements?
pgs. 57-58 http://photos.imageevent.com/banos/tplbk/Disclosure%20Statement%20by%20TPL%201-8-15.pdf
Subsequent to the Petition Date, in order to resolve various disputes between
Alliacense, TPL, PDS, and Patriot, the Novation of the Alliacense Services Agreement was executed, which, among other things, divided up potential licenses between Alliacense and a second licensing agent.
The Novation also addressed some $2.2 million in past due payments claims by Alliacense, quarterly advances, Alliacense’s role in pending and prospective litigation, and conduct of the MMP licensing program. The Novation provides (1) for a fixed gross percentage fee for a license from the
NorCal litigation with HTC; (2) a sliding scale for resolutions in the NorCal litigation, litigation support for contingency counsel ; (3) a new schedule for the licensing services fee ranging from 20% to 30% gross depending upon the amount of the license, subject to reduction if settlements resulting in $5 million in license proceeds do not occur for a period of 61 days or more.
Critically, the Novation contains a one-year milestone whereunder failure by PDS to achieve a certain level of income from litigation and licensing constitutes a basis for termination of the entire Alliacense ServicesAgreement upon written notice by PDS.
With regard to prospective litigation, the parties to the Novation agreed that Patriot would identify a second licensing company with which PDS would enter into a commercialization agreement pursuant to which such company will issue licenses to customers. Once identified, Alliacense is to
identify all prospective MMP licensing entities, along with other relevant information, divide them into two substantially equal lists from which Patriot and its second licensing company will choose which they intend to pursue, within 30 days. Alliacense will provide its work product and intellectual property with respect to the list selected by the second licensing entity under a nondisclosure agreement in exchange for a 1% fee. TPL and Patriot have agreed to the employment by PDS of Dominion Harbor Group (“DHG”)
as the second licensing company, subject to certain restrictions as to which matters DHG may review and pursue. TPL understands that Alliacense is in the process of preparing the list of prospective MMP licensing entities but has not yet completed or delivered it. TPL further understands that Patriot contends that the Novation is in breach owing to the failure to deliver the list.
A condition precedent to confirmation of the Plan requires a written agreement(s) resolving all controversies existing among Alliacense, PDS and Agility IP Law (counsel prosecuting litigation of the MMP Portfolio).
The parties executed the Novation to resolve all such controversies.Patriot contends that any controversies arising out of the Novation must be resolved prior to and as a condition of Confirmation , and that controversies still exist arising out of obligations under the Novation, including Alliacenses obligation to deliver the lists of prospective licensees to be considered (and associated work product) to PDS. The Committee wishes to emphasize that it will assert failure of this condition to Confirmation if it is not satisfied that the splitting and delivery of lists has been resolved with PDS or arrangements have been made that satisfy the Committee.