Exhibit 99.1
RETAINER AGREEMENT
THIS ATTORNEY FEE
AGREEMENT and contract of engagement (hereinafter, the “Agreement”) is made and entered into by and between e.Digital
Corporation, (hereinafter, referred to as “e.Digital”), and HANDAL & ASSOCIATES, INC. (hereinafter referred to
as “Attorney”) effective on September 1, 2016. e.Digital and Attorney are hereinafter collectively referred to as “Parties.”
Unless otherwise set forth herein, the term “Client” shall mean e.Digital.
e.Digital engages Attorney
to represent it in connection with claims for damages, losses, and other appropriate relief arising out of claims (hereinafter
referred to as “Claims”) against third parties who manufacture and/or sell products that infringe e.Digital’s
Nunchi® Patent Portfolio.
The Nunchi®
Patent Portfolio includes US Patent No’s: 8,311,522; 8,306,514; 8,311,523; 8,311,524; 8,315,618; 8,315,619; 9,002,331; or
9,178,983; along with all related continuations, continuations in part, patent applications and patents. The Parties acknowledge
that the Nunchi® Patent Portfolio may grow with the addition of newly issues patents; all of which will be deemed
to be a part of the Portfolio regardless of when they are added.
The scope of Attorney’s
work will include, analyzing validity and infringement of the patents in the Nunchi® Patent Portfolio; investigating
possible infringers; initiating and managing litigation against infringers; negotiating licenses. The scope of our engagement will
also include simultaneously representing e.Digital in the defense of counterclaims and Inter Partes Reviews filed by defendants
in cases we pursue on its behalf.
This Agreement supersedes
and replaces all previous agreements between the Parties relating to the provision of legal services by Handal & Associates
to e.Digital.
It is specifically
understood and agreed that, in addition to compensation for services as described herein, Client is responsible for reimbursing
attorney for expenditures that have been approved and advanced on behalf of Client. Attorney will select expert witnesses, consultants
and investigators that in Attorney’s judgment are necessary to aid in the preparation of Client’s Claims and will secure
Client’s consent prior to engagement, deposition, and related travel expenses.
Expenses including,
but not limited to, costs of investigation, photographic expenses, filing fees, service of process, deposition expenses, and fees
for expert witnesses, if required shall be pre-approved by Client. Pre-approved expense items that have been advanced by Attorney
shall be set forth in a monthly statement and must be reimbursed to Attorney as they are incurred.
Client acknowledges
that it has been advised of the Firm’s usual and customary hourly rates for attorney’s employed by Handal & Associates.
Notwithstanding the
foregoing, e.Digital and Handal & Associates have agreed that e.Digital will compensate the firm as follows:
| a. | e.Digital will pay Handal & Associates a monthly flat fee of $22,500 payable on the first of
every month commencing September 1, 2016 (the “Monthly Retainer”) so long as Attorney is simultaneously litigating
ten (10) or fewer cases. Once the number of cases filed by Handal & Associates exceeds ten (10) the Parties agree to meet and
discuss an increase in the amount of the Monthly Retainer to accommodate Attorney’s greater commitment to e.Digital’s
litigation matters. |
| b. | The fee described herein is non-refundable, but creditable against future Attorney fee contingency
recoveries as described below; |
| c. | In the event that Attorney is successful in recovering a license fee or settlement with a putative
licensee/defendant or in collecting on any judgment, e.Digital shall compensate Handal & Associates, as a contingency fee recovery,
an amount equal to Forty (40) percent of the Net Recovery less the balance of any remaining un-credited total Monthly
Retainer paid to the firm; |
| d. | Net Recovery means the gross amount paid by a licensee/defendant pursuant to Attorney’s
activities, less the amount of expenses paid and or advanced by e.Digital to Attorney or third parties; |
e.Digital specifically
understands that the Attorney’s Fees and any other fee arrangement are not set by law but are negotiable between Attorney
and e.Digital. Any dispute relating to payment of Attorney’s Fees will be submitted for mandatory fee arbitration before
the San Diego County Bar Association pursuant to California Business and Professional Code Section 6200 et seq., or should
that organization decline to arbitrate the dispute, before the State Bar of California pursuant to California Business and Professions
Code Section 6200 et seq.
| VI. | Responsibilities of Attorney and e.Digital |
Attorney will perform
the legal services called for under this Agreement, keep e.Digital informed of progress and developments, and respond promptly
to e.Digital’s inquiries and communications. Attorney will provide copies to e.Digital of all significant documents, letters
and other materials Attorney generates or receives. Attorney will follow the California Rules of Professional Conduct. For all
documents requiring review and/or approval by e.Digital, Attorney will endeavor to send drafts to e.Digital at least 48 hours in
advance of Court deadlines whenever possible.
Attorney is to make
no settlement without the approval of e.Digital, who will have the absolute right to accept or reject any settlement. Attorney
will notify e.Digital promptly of the terms of any settlement offer received by Attorney. In addition, e.Digital will make no settlement
with any defendant, adverse party, third person, insurance carrier or other source except in the presence of Attorney or with his
prior approval.
Attorney and client
will maintain a monthly statement of account which includes: cumulative monthly retainers received from e.Digital and not yet deducted
from contingent fees earned and contingent fees earned and unpaid. Attorney will issue monthly expense only invoices no later than
the tenth (10th) business day of each month reflecting expenses incurred. Upon request, Attorney will from time to time provide
Client an estimate of unbilled expenses.
e.Digital will be truthful
and cooperative with Attorney, keep Attorney reasonably informed of developments and of e.Digital’s address, telephone numbers
and whereabouts and timely make any payments required by this Agreement.
| VII. | Right of e.Digital to Release Attorney |
Client may discharge
Attorney at any time, even for no reason, upon written notice to Attorney. If Client discharges Attorney, Client agrees that Attorney
shall be entitled to recover any and all Attorney’s Fees and Costs incurred and advanced as set forth herein up to and including
the date of discharge and Attorney shall be entitled to the contingency recoveries in relation to the value of the services rendered
to Client as of the date of the discharge. The parties shall reach agreement as to the value of such services by mutual agreement
or submit to binding arbitration for a final determination under the auspices of a neutral arbitrator located in San Diego, California.
| VIII. | Right of Attorney to Withdraw |
Attorney may withdraw
from representation of e.Digital (a) with e.Digital’s written consent, (b) upon court approval, or (c) if no court action
is filed, for Good Cause upon reasonable notice to e.Digital. Good Cause includes, but is not limited to, e.Digital’s material
breach of this Agreement, e.Digital’s refusal to cooperate with Attorney or to follow Attorney’s advice on a material
matter, or any other fact or circumstance that would render Attorney’s continuing representation unlawful or unethical. e.Digital
also agrees that Attorney may withdraw from any matter encompassed by this Agreement if e.Digital does not cooperate in the investigation
or handling of the matter. Such non-cooperation shall include, but not be limited to, failure to meet with Attorney personnel as
is reasonably required for Attorney to handle the matter, and deliberate failure to provide Attorney all relevant information and
documents concerning the matter.
If Attorney decides
to withdraw from representing e.Digital in any matter encompassed by this Agreement, Attorney will reasonably protect e.Digital’s
interest by giving e.Digital adequate notice allowing e.Digital time to obtain other lawyers, and giving e.Digital any papers and
property in Attorney’s possession which belong to e.Digital. It is understood that the Case file belongs to e.Digital. If
Attorney withdraws without e.Digital’s written consent or under circumstances that do not involve e.Digital’s material
breach of this Agreement, including the circumstances of retirement, death, or disability of Attorney, Attorney agrees to exercise
best efforts to find other lawyers for e.Digital prior to withdrawal, but obtaining other lawyers is not a condition of such withdrawal.
In the event that Attorney
terminates this attorney-client relationship, Client agrees that Attorney shall be entitled to recover any and all Attorney’s
Fees and Costs incurred and advanced as set forth herein up to and including the date of discharge and Attorney shall be entitled
to the contingency recoveries in relation to the value of the services rendered to Client as of the date of the discharge. The
parties shall reach agreement as to the value of such services by mutual agreement or submit to binding arbitration for a final
determination under the auspices of a neutral arbitrator located in San Diego, California.
| IX. | What This Agreement Covers |
This Agreement may
be modified by subsequent agreement of the Parties only by an instrument in writing signed by both of them. This Agreement is entered
into within the State of California and is to be interpreted in accordance with the laws of the State of California. In addition,
courts located in California shall have the exclusive jurisdiction to resolve any disputes arising from or out of this Agreement.
The terms of this Agreement may be changed only by a separate written agreement signed and dated by e.Digital and Attorney. Except
as provided in other written agreements, Attorney only represents e.Digital in matters encompassed by this Agreement. Attorney
has no duty to represent e.Digital in any matters other than the matters described in this Agreement. If any other matters arise
out of the relationship between Attorney and e.Digital, e.Digital is not obligated to retain Attorney in the other matter, nor
is Attorney obligated to represent e.Digital. Further, Attorney and e.Digital may agree to different terms of representation in
any other matter Attorney may undertake for e.Digital.
e.Digital hereby grants
to Attorney limited Power of Attorney for the sole purpose of endorsing e.Digital's name to checks, drafts and documents pertaining
to this case. This limited Power of Attorney is granted in conjunction with e.Digital's expressed consent.
The provisions of this
Agreement are severable, and if any clause or provision shall be held invalid and unenforceable in whole or in part in any jurisdiction,
then such invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other jurisdiction, or any other clause or provision of this Agreement
in any jurisdiction.
Attorney advises e.Digital
that it has and maintains malpractice insurance.
| XII. | No Guarantees or Representations |
Attorney has made no
representations or guarantees as to the ultimate outcome of any litigation arising out of this Retainer Agreement.
This Agreement may
be executed in counterparts and each signature shall constitute a binding agreement as between each Client and Attorney individually
as well as jointly and severally.
| XIV. | Agreement Benefits Successors and Heirs |
This Agreement shall
be binding upon and shall inure to the benefit of the respective heirs, and/or successors and/or assigns, and/or personal representative
of Attorney and e.Digital. When Attorney’s services conclude by completing the terms of this Agreement, all unpaid charges
will immediately become due and payable to the extent owed under Sections II and III herein. After Attorney’s services conclude
and upon e.Digital’s request, Attorney will deliver e.Digital’s file and property to e.Digital whether or not e.Digital
has paid any fees and/or costs owned to Attorney. If e.Digital does not request the return of e.Digital’s file, Attorney
will retain e.Digital’s file for a period of five (5) years, after which time Attorney may have e.Digital’s file destroyed.
If e.Digital desires to have e.Digital’s file maintained beyond the five (5) years after e.Digital’s matter has concluded,
separate arrangement with Attorney must be made.
| XV. | Advice of Independent Lawyer |
CLIENT HEREBY ACKNOWLEDGES THAT ATTORNEY
HAS ADVISED THE CLIENT THAT CLIENT MUST HAVE AN INDEPENDENT LAWYER REVIEW THIS AGREEMENT AND ADVISE THE CLIENT AS TO ALL MATTERS
SET FORTH IN THIS AGREEMENT. CLIENT FURTHER ACKNOWLEDGES THAT IT HAS HAD AN INDEPENDENT LAWYER REVIEW THIS AGREEMENT WHO HAS ADVISED
CLIENT ACCORDINGLY AND OR WAIVES SUCH RIGHT.
THE PARTIES HAVE READ AND UNDERSTAND THE
FOREGOING TERMS AND AGREE TO THEM AS OF THE DATE ATTORNEY FIRST PROVIDED SERVICES. THE CLIENT SHALL RECEIVE A FULL EXECUTED DUPLICATE
OF THIS AGREEMENT.
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By: /s/ Alfred H. Falk
Client: e.Digital Corporation |
By: /s/ Anton Handal
HANDAL & ASSOCIATES, INC/Anton Handal,
Esq. |
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Date: September 8, 2016 |
Date: September 8, 2016 |
