Exhibit 10.2

Confidential Treatment Requested by Netlist, Inc.

 

 

 

 

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NETLIST, INC.

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INVESTMENT AGREEMENT

Dated May 3, 2017

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TR GLOBAL FUNDING V, LLC

as Investor

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TABLE OF CONTENTS

 

 

 

Page

 

 

SECTION 1.    DEFINITIONS; RULES OF CONSTRUCTION

2

 

 

 

 

1.1.

 

Definitions

2

1.2.

 

Certain Matters of Construction

10

 

 

 

 

SECTION 2.    REPRESENTATIONS AND WARRANTIES.

11

 

 

 

 

2.1.

 

Plaintiff’s Representations and Warranties

11

 

 

 

 

 

 

2.1.1

Common Interest/Confidentiality

11

 

 

2.1.2

Full Disclosure

11

 

 

2.1.3

No Impairment

11

 

 

2.1.4

Right to Bring the Litigation

11

 

 

2.1.5

Completeness and Accuracy

11

 

 

2.1.6

Liens of Investor

12

 

 

2.1.7

Taxes

12

 

 

2.1.8

Brokers

12

 

 

2.1.9

Compliance with Laws

12

 

 

2.1.10

Litigation

12

 

 

2.1.11

Patent Litigation

12

 

 

2.1.12

No Defaults

12

 

 

2.1.13

Defendant/Samsung

12

 

 

2.1.14

Litigation Counsel

12

 

 

2.1.15

IPR Counsel

12

 

 

 

 

2.2.

 

No Representation or Warranty Regarding Assets or Litigation

13

2.3.

 

Investor’s Representations

13

 

 

 

 

 

 

2.3.1

Funds

13

 

 

2.3.2

Fully Informed

13

 

 

2.3.3

No Conflicts of Interest

13

 

 

2.3.4

No Waiver of Privilege

13

 

 

2.3.5

Secondary Market Financing

13

 

 

 

 

2.4.

 

Mutual Representations

13

 

 

 

 

 

 

2.4.1

Organization and Qualification

13

 

 

2.4.2

Power and Authority

14

 

 

2.4.3

Enforceability

14

 

 

 

 

SECTION 3.    COVENANTS.

14

 

 

 

 

3.1.

 

Covenants of Plaintiff

14

 

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3.1.1

Reporting

14

 

 

3.1.2

Duty to Cooperate and Pursuit of Litigation

14

 

 

3.1.3

Pursuit of Claim

15

 

 

3.1.4

Duty to Inform

15

 

 

3.1.5

No Change in Litigation Counsel or IPR Counsel Without Investor Notice

16

 

 

3.1.6

Investor Consultation Rights Regarding Settlement

16

 

 

3.1.7

Good Faith Dealings

16

 

 

3.1.8

Compliance with the Investment Facility Documents

17

 

 

3.1.9

Required Actions

17

 

 

3.1.10

Compliance with Laws

17

 

 

3.1.11

Existence

17

 

 

3.1.12

Books and Records

17

 

 

3.1.13

Payment of Taxes

17

 

 

3.1.14

Permitted Liens

17

 

 

3.1.15

Distributions to Creditors

17

 

 

3.1.16

Fundamental Changes

17

 

 

 

 

3.2.

 

Waiver

17

3.3.

 

Covenants of Investor

17

 

 

 

 

 

 

3.3.1

No Waiver of Privilege

17

 

 

3.3.2

Good Faith Dealings

18

 

 

3.3.3

Settlement and Cooperation

18

 

 

3.3.4

No Present Interest in Patents

18

 

 

 

 

SECTION 4.    COMMON INTEREST AND CONFIDENTIAL INFORMATION.

18

 

 

 

 

4.1.

 

Common Interest

18

4.2.

 

Non-Disclosure Generally

18

4.3.

 

Potentially Enforceable Disclosure Requests

19

 

 

 

 

SECTION 5.    RETENTION OF COUNSEL.

19

 

 

 

 

5.1.

 

Retention of Litigation Counsel and IPR Counsel

19

5.2.

 

Litigation Counsel

19

5.3.

 

IPR Counsel

19

5.4.

 

Compensation of Litigation Counsel

20

5.5.

 

Compensation of IPR Counsel

20

5.6.

 

Removal of Litigation Counsel

20

5.7.

 

Removal of IPR Counsel

20

 

 

 

 

SECTION 6.    FUNDING TERMS.

20

 

 

 

 

6.1.

 

Initial Investments

20

6.2.

 

Post-Closing Investments

20

6.3.

 

Counsel Fees

21

6.4.

 

Review and Approval of Fee Arrangements

21

ii

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6.4.1

Investor Review and Approval

21

 

 

 

 

6.5.

 

Recoveries

21

 

 

 

 

 

 

6.5.1

Resolution with Defendant

21

 

 

6.5.2

Recoveries in Forms Other Than Cash

22

 

 

6.5.3

Transaction Prior to Conclusion of Claim

22

 

 

6.5.4

Conditions to Change of Control or Impairment of Claim

22

 

 

6.5.5

No Commitment for Additional Investment

23

 

 

 

 

SECTION 7.    CONDITIONS PRECEDENT.

23

 

 

 

 

7.1.

 

Conditions Precedent to Initial Investments

23

 

 

 

 

 

 

7.1.1

Due Execution

23

 

 

7.1.2

No Dispositive Ruling

23

 

 

7.1.3

Request

23

 

 

 

 

7.2.

 

Conditions Precedent to All Investments

23

 

 

 

 

 

 

7.2.1

No Default

23

 

 

7.2.2

Representations and Warranties True and Correct

23

 

 

7.2.3

No Contravention

24

 

 

7.2.4

Request

24

 

 

 

 

SECTION 8.    SECURITY.

24

 

 

 

 

8.1.

 

Security Agreement

24

8.2.

 

Condition to Investment

24

8.3.

 

Plaintiff Assistance in Perfection of Security

24

8.4.

 

Insolvency Proceeding

24

 

 

 

 

SECTION 9.    TERMINATION BY INVESTOR.

24

 

 

 

 

9.1.

 

Investor Termination Events

24

9.2.

 

Investor Termination Event Procedure

25

9.3.

 

Waivers

25

9.4.

 

Failure to Disclose Information Related to Claim

26

 

 

 

 

 

 

9.4.1

Non-Material Disclosures

26

 

 

9.4.2

Procedure to Adjudicate Disclosure

26

 

 

 

 

9.5.

 

No Control of Litigation or Funded IPR Proceedings

26

9.6.

 

Retention of Documents

26

9.7.

 

Survival

26

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SECTION 10.    TERMINATION BY PLAINTIFF.

26

 

 

 

 

10.1.

 

Plaintiff Termination Events

26

10.2.

 

Plaintiff Termination Procedure

27

 

 

 

 

SECTION 11.    MUTUAL TERMINATION EVENT.

27

 

 

 

 

11.1.

 

Mutual Termination

27

 

 

 

 

SECTION 12.    TERMINATION.

27

 

 

 

 

12.1.

 

Remedies Upon Investor Termination Event

27

12.2.

 

Remedies Upon Plaintiff Termination Event

27

12.3.

 

Payments to Investor Upon Termination Event

27

12.4.

 

Remedies Cumulative

27

12.5.

 

Non-Performance

27

 

 

 

 

SECTION 13.    PROCEEDS ACCOUNT.

28

 

 

 

 

13.1.

 

Proceeds Account

28

 

 

 

 

SECTION 14.    DISPUTE RESOLUTION.

28

 

 

 

 

14.1.

 

Procedure

28

 

 

 

 

 

 

14.1.1

Informal Settlement Meeting

28

 

 

14.1.2

Confidential

28

 

 

14.1.3

Statute of Limitations

29

 

 

 

 

14.2.

 

Arbitration

29

 

 

 

 

 

 

14.2.1

Arbitral Confidentiality

29

 

 

14.2.2

Damages

29

 

 

14.2.3

Attorneys’ Fees

29

 

 

14.2.4

Federal Arbitration Act

29

 

 

 

 

SECTION 15.    RIGHT OF FIRST REFUSAL.

29

 

 

 

 

15.1.

 

Further Litigations

29

 

 

 

 

SECTION 16.    CONFIDENTIALITY.

29

 

 

 

 

16.1.

 

Information Disclosed Prior to the Effective Date

29

16.2.

 

Information Disclosed From and After the Effective Date

30

16.3.

 

Confidentiality of Investor’s Information

30

16.4.

 

Agreement Confidentiality

30

 

 

 

 

 

 

16.4.1

Strict Confidence

30

 

 

16.4.2

Disclosure to Court

31

iv

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SECTION 17.    INDEMNIFICATION.

31

 

 

 

 

17.1.

 

Plaintiff Indemnification

31

17.2.

 

Limitation of Liability for Certain Damages

31

 

 

 

 

SECTION 18.    MISCELLANEOUS.

31

 

 

 

 

18.1.

 

Governing Law

31

18.2.

 

Jury Trial Waiver

32

18.3.

 

Entire Agreement

32

18.4.

 

Informed Consent and Knowledge

32

18.5.

 

Expenses of the Parties

32

18.6.

 

Cooperation

32

18.7.

 

Waiver and Amendment

32

18.8.

 

Construction

33

18.9.

 

Successors and Assigns

33

18.10.

 

Severability

33

18.11.

 

Relationship of the Parties

33

 

 

 

 

 

 

18.11.1

Investor

33

 

 

18.11.2

No Fiduciary Relationship

33

 

 

18.11.3

No Partnership

33

 

 

 

 

18.12.

 

No Rights of Third Parties

33

18.13.

 

Notice to Parties

33

18.14.

 

Counterparts

34

 

 

v

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INVESTMENT AGREEMENT

This Agreement (“Agreement”), effective as of May 3, 2017 (the “Effective
Date”), is entered into by and between (a) TR Global Funding V, LLC, a Delaware
limited liability company managed by TR Global Associates V, LLC (together with
its successors and assigns, “Investor”) and (b) Netlist, Inc., a Delaware
corporation (together with its successors and assigns, “Plaintiff”).

RECITALS

WHEREAS, at all times prior to and on the Effective Date, Plaintiff believes
that it has valid and substantial claims against SK hynix Inc. and its
Affiliates (collectively, the “Defendant”) arising from Defendant’s infringement
of one or more claims of U.S. Patent Nos. 8,756,364, 8,516,185, 8,001,434,
8,359,501, 8,689,064, and 8,489,837 (collectively, the “Original Patents”) and
9,535,623, and 9,606,907 (the “Continuation Patents” and, together with the
Original Patents, the “Patents”) based on Defendant’s manufacture, use, sale,
offer for sale, importation, lease or other disposal of products that make
unauthorized use of the technology described in the Patents; and

WHEREAS, the Patents are owned in their entirety by Plaintiff; and

WHEREAS, Plaintiff already has filed litigation in the International Trade
Commission (“ITC”) and the U.S. District Court for Central District of
California (“CDCA”) against Defendant alleging that Defendant’s products
infringe the Original Patents; and

WHEREAS, Plaintiff intends to add the Continuation Patents to the litigation
currently pending in the CDCA; and

WHEREAS, Defendant has commenced the Funded IPR Proceedings (as defined herein)
against Plaintiff, six of which relate to the Patents; and

WHEREAS, Plaintiff seeks funding so that it may vigorously pursue the Litigation
against Defendant and defend the Funded IPR Proceedings without having to bear
the economic burden and risks of potentially expensive and uncertain litigation;
and

WHEREAS, Plaintiff wishes to secure from Investor an investment to vigorously
pursue the Litigation against Defendant, including the defense of any Funded IPR
Proceeding or other claim or counterclaim involving the enforceability of the
Patents; and

WHEREAS, Plaintiff and Investor are committed to fully cooperating with one
another in connection with Plaintiff’s prosecution and resolution of the
Litigation with the intention of reasonably maximizing Recoveries; and

WHEREAS, Plaintiff and Investor wish to cooperate in connection with the
prosecution and resolution of the Litigation and to share the Recoveries, under
the terms and conditions set forth below, if the Litigation is successfully
resolved, whether through a litigated resolution, settlement, a corporate
transaction or otherwise; and

1

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WHEREAS, Investor is willing to provide an investment on a nonrecourse basis,
such that it will be entitled to no payment on account of the Claims if there
are no Recoveries, but provided that Investor will be secured by the Collateral
to the extent of its rights to and interests in such Recoveries.

NOW, THEREFORE, Plaintiff and Investor agree as follows:

SECTION 1.   DEFINITIONS; RULES OF CONSTRUCTION

1.1.       Definitions.  Capitalized terms have the meanings ascribed herein,
whether in the preamble, the Recitals, the Definitions or otherwise. 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with the Person specified.  For purposes of this
definition, “control” of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the Equity Interests having ordinary voting
power for the election of members of the board of directors of such Person or
(b) direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.  For the avoidance of doubt, Investor shall
not be considered an “Affiliate” of Plaintiff.

“Agreement” has the meaning ascribed to such term in the preamble.

“Applicable Law” means all laws, rules, regulations and governmental guidelines
applicable to the Person, conduct, transaction, agreement or matter in question,
including all applicable statutory law, common law and equitable principles, and
all provisions of constitutions, treaties, statutes, rules, regulations, orders
and decrees of Governmental Authorities.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, New York.

“Cash Recovery” has the meaning set forth in Section 6.5.1.

“Cause” means the removal by Plaintiff of Litigation Counsel or IPR Counsel as a
result of Litigation Counsel’s or IPR Counsel’s willful malfeasance, gross
negligence, willful neglect, breach of any duty or responsibility owed by
counsel to its client under the applicable rules of ethics or professional
conduct or bad faith in the performance of its duties to Plaintiff.

“Change of Control” means (i) the sale, lease or transfer (other than as a
Permitted Lien), in one or a series of related transactions, of all or
substantially all the assets of the Plaintiff and its Affiliates, taken as a
whole, to a Person; or (ii) the acquisition by any Person or “group” (within the
meaning of Sections 13(d)(3), 13(d)(5), or Section 14(d)(2) of the Exchange Act,
or any successor provision), including any group acting for the purpose of
acquiring, holding or disposing of securities (within the meaning of Rule
13d-5(b)(1) under the Exchange Act, or any successor provision) in a single
transaction or in a related series of transactions, by way of merger,
consolidation, amalgamation or other business combination or purchase of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act,
or any successor provision), of more than 25% or more on a fully diluted basis
of the voting and/or economic interest in the equity

2

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securities of Plaintiff or (b) shall have obtained the power (whether or not
exercised) to elect a majority of the members of the board of directors (or
similar governing body) of Plaintiff.

“Claim” means the Litigation, all settlement efforts arising from or related to
the Litigation or the Patents, and any other proceeding within the scope of the
Litigation Counsel Fee Agreement; provided,  however, that Claim shall not
include the Funded IPR Proceedings, any third party claim against Plaintiff and
any claim Defendant or any third party may assert against Plaintiff unrelated to
the Patents, such as, without limitation, a claim that Plaintiff infringes
Defendant’s patent(s) or other intellectual property.

“Collateral” means the collateral provided to secure the obligations of
Plaintiff under this Agreement, as described in the Security Agreement.

“Common Interest Material” means any Document or Communication relating to the
Claim or the Funded IPR Proceedings, including any evaluation thereof or
negotiation with respect thereto, whether written or oral, between or among any
of the Plaintiff, Litigation Counsel, IPR Counsel and Investor to the extent
that such Document or Communication was intended to be protected by
attorney-client privilege between Litigation Counsel and the Plaintiff, IPR
Counsel and the Plaintiff, the work-product doctrine or any other privilege,
immunity or protection from involuntary disclosure to another.  Notwithstanding
the foregoing, information is not Common Interest Material if it (a) was or
becomes generally available to the public other than by breach of this Agreement
or a confidentiality agreement between or among any of Plaintiff, Litigation
Counsel, IPR Counsel and Investor; or (b) is required to be disclosed by law,
regulation or legal process.

“Communication” means any oral, written or electronic transmission of
information between entities and/or persons, including meetings, discussions,
conversations, email messages (including attachments), text messages, voice mail
messages, chat messages, instant messages, telephone calls, memoranda, notes,
letters, telecopies, telexes, conferences or seminars.

“Conclusion of the Claim” means the final resolution of the Claim, whether by
settlement, the entry of a non-appealable final judgment against Plaintiff, the
mutual agreement of the Parties to abandon the Claim, the enforcement of a
final, non-appealable judgment in favor of Plaintiff or for any other means.

“Confidential Information” means:

(i)     the Common Interest Material;

(ii)    this Agreement, including any discussions and negotiations related to
this Agreement, term sheets related to the subject matter of this Agreement and
drafts of such term sheets and of this Agreement;

(iii)   to the extent not already covered as Common Interest Material, (a)
Plaintiff’s, Litigation Counsel’s, IPR Counsel’s or Investor’s strategies,
tactics, analyses or expectations regarding the Claim, the Litigation, or the
Funded IPR Proceedings; (b) any professional work product relating to the Claim,
the Litigation, or the Funded IPR Proceedings, whether prepared for Plaintiff,
Litigation Counsel, IPR Counsel or Investor; and (c) any other material prepared
by or

3

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for Plaintiff, Litigation Counsel, IPR Counsel or Investor with the expectation
that such material would be maintained as confidential from others.

(iv)   all Documents and Communications provided between or among any of
Plaintiff, Litigation Counsel, IPR Counsel and Investor pursuant to a
confidentiality agreement. 

Notwithstanding the foregoing, information is not Confidential Information if it
(a) was or becomes generally available to the public other than by breach of
this Agreement or a confidentiality agreement between or among any of Plaintiff,
Litigation Counsel, IPR Counsel and Investor; (b) was, as documented by the
written records of the receiving Party, known by the receiving Party at the time
of disclosure to it or was developed by the receiving Party or its
representatives without using Confidential Information or information derived
from Confidential Information; (c) was disclosed to the receiving Party in good
faith by a third party who has an independent right to disclose such subject
matter and information; or (d) is required to be disclosed by law, regulation or
legal process.

“Continuation Patents” has the meaning set forth in the Recitals.

“Costs” means, collectively, Litigation Costs and IPR Costs.

“Debt” means, with respect to any Person, (i) all obligations (whether secured
or unsecured) of such Person for money borrowed or with respect to deposits or
advances of any kind and all other obligations (contingent or otherwise) of such
Person with respect to surety bonds, letters of credit and bankers’ acceptances,
whether or not matured; (ii) all obligations of such Person evidenced by notes,
bonds, debentures, loan agreements, reimbursement agreements, note subscription
agreements or similar instruments (including senior, mezzanine and junior
borrowings); (iii) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property); (iv) all capital lease obligations of such Person;
(v) all obligations in respect of derivative instruments to the extent required
to be reflected as a liability on a balance sheet of such Person under GAAP;
(vi) all indebtedness referred to in clause (i), (ii), (iii) or (iv) above
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness;
and (vii) all Debt of others guaranteed by such Person or for which such Person
has otherwise assumed responsibility on, before or after the date such
indebtedness is incurred.

“Defendant” has the meaning set forth in the Recitals.

“Disclosing Party” has the meaning set forth in Section 4.3.

“Document” means any recorded information (whether printed, typed, photocopied,
handwritten, recorded, electronically stored, produced or reproduced or created
by any other process), tangible thing or any other compilation of information
that is within Plaintiff’s possession, custody or control, including any and
all:

4

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(a) accountants’ work papers, advertising, circulars, advisories, agreements,
appointment books, articles, bills, binders, books, brochures, bulletins,
cables, calendars, charts, checks, circulars, compilations, computer printouts,
confirmations, contracts, correspondence, desk pads, diaries, drafts, drawings,
exhibits, facsimiles, financial statements, ledgers, forecasts, graphs,
guidelines, invoices, instructions, letters, lists, logs, manuals, memoranda,
messages, microfiche, microfilm, minutes of meetings, notebooks, notes,
outlines, pamphlets, periodicals and clippings from periodicals, placement
slips, pleadings, policies, post-it notes, projections, prospectuses,
questionnaires, receipts, records, reports, rules, schedules, statements,
studies, subscription agreements or pages, summaries, tables, telecopies,
telefaxes, telegrams, telephone messages, telexes, translations, treaties, wire
messages and worksheets;

(b) graphic or audio records or representations of any kind, including
photographs, charts, drawings, graphs, microfiche, microfilm, videotapes,
recordings and motion pictures;

(c) electric, electronic, magnetic, mechanical and optical records or
representations of any kind, including e-mails, tapes, cassettes, computer
discs, recordings, computer memories or other electronic data compilations;

(d) final versions and all drafts; and

(e) all originals, as well as copies that vary from the original in any respect,
including variations due to handwritten notes, editing, interlineations, blind
copies and other alterations.

“Effective Date” has the meaning set forth in the preamble.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

“Existing Financing Documents” means (i) all “Loan Documents” as defined in the
Loan and Security Agreement, dated as of October 21, 2009, between Silicon
Valley Bank and Plaintiff (as the same has been amended), and (ii) all
“Transaction Documents” as defined in the Note Agreement.

“Final Order” means an order or judgment of a court of competent jurisdiction
that has been entered on the docket maintained by the clerk of such court and
has not been reversed, vacated, or stayed and as to which (i) the time to
appeal, petition for certiorari, or move for a new

 

5

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Confidential Treatment Requested.  Omitted portions are marked with [*****] and
have been filed separately with the Securities and Exchange Commission.

trial, reargument, or rehearing has expired and no appeal, petition for
certiorari, or other proceedings for a new trial, reargument, or rehearing is
then pending or, (ii) if an appeal, writ of certiorari, new trial, reargument,
or rehearing thereof has been sought, (a) such order or judgment has been
affirmed by the highest court to which such order was appealed, certiorari has
been denied, or a new trial, reargument, or rehearing has been denied or
resulted in no modification of such order and (b) the time to take any further
appeal, petition for certiorari, or move for a new trial, reargument, or
rehearing has expired; provided, however, that the possibility that a motion
under Rule 60 of the Federal Rules of Civil Procedure may be filed relating to
such order shall not prevent such order from being a Final Order, except as
provided in the Federal Rules of Appellate Procedure.

“Funded IPR Proceeding” and “Funded IPR Proceedings” means [*****]

 “Funding Date” means, individually and collectively, the Initial Funding Date
and each Subsequent Funding Date.

“Governmental Authority” means any federal, state, local, foreign or other
agency, authority, body, commission, court, instrumentality, political
subdivision, or other entity or officer exercising executive, legislative,
judicial, regulatory or administrative functions for any governmental, judicial,
investigative, regulatory or self-regulatory authority.

“Indemnitees” has the meaning set forth in Section 17.1.

“Indemnified Matters” has the meaning set forth in Section 17.1.

“Initial Funding Date” has the meaning ascribed to such term in Section 7.1.

“Insolvency Proceeding” means any case or proceeding commenced by or against a
Person under any state, federal or foreign law for, or any agreement of such
Person to, (a) the entry of an order for relief under the Bankruptcy Code, or
any other insolvency, debtor relief or debt adjustment law; (b) the appointment
of a receiver, trustee, liquidator, administrator, conservator or other
custodian for such Person or any part of its property; or (c) an assignment for
the benefit of creditors.

“Intercreditor Agreement” means, collectively, each of (i) the Intercreditor
Agreement, dated as of the Effective Date (the “SVB Intercreditor Agreement”),
among Investor, Silicon Valley Bank, and Plaintiff, in form and substance
satisfactory to Investor, a copy of which is attached hereto as Exhibit A-1, and
(ii) the Intercreditor Agreement, dated as of the Effective Date (the “SVIC
Intercreditor Agreement”), among Investor, SVIC and Plaintiff, in form and
substance satisfactory to Investor, a copy of which is attached hereto as
Exhibit A-2.

“Investment” means sums advanced by Investor to pay Costs hereunder.

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Confidential Treatment Requested.  Omitted portions are marked with [*****] and
have been filed separately with the Securities and Exchange Commission.

“Investment Facility” means the investment facility established hereunder for
Investments by Investor.

“Investment Facility Documents” means this Agreement, any Security Documents,
the Intercreditor Agreement and any other agreement, instrument, certificate,
report and other document executed and delivered pursuant hereto or thereto or
otherwise evidencing or securing any Investment or any other Obligation.

“Investment Request” means (a) a request for payment of Litigation Costs
provided by Litigation Counsel to Investor in substantially the form annexed as
Exhibit B1, which shall be accompanies by a certification from Plaintiff in
substantially the form annexed as Exhibit B2, and (b) a request for payment of
IPR Costs provided by Plaintiff to Investor, in each case to request an
Investment, in substantially the form annexed as Exhibit B3.  Each Investment
Request shall have attached to it the invoices that are to be paid by Investor
pursuant to the terms of this Agreement.

“Investor” has the meaning set forth in the preamble.

“Investor Billing Guidelines” means the Investor Litigation Management and
Billing Guidelines for Retained Counsel Effective as of January 1, 2017 (as the
same may be amended or modified from time to time).

“Investor Termination Event” has the meaning set forth in Section 9.1.

“IPR Costs” means the costs properly incurred in defending the Funded IPR
Proceedings from and after January 1, 2017 by or on behalf of Plaintiff,
including the professional fees and expenses (including travel expenses)
incurred by IPR Counsel in accordance with the IPR Counsel Fee Agreement and,
subject to the terms of this Agreement: (i) professional fees and expenses for
advisors, experts or witnesses retained by IPR Counsel, (ii) fees and expenses
for trial preparation and presentation support services, (iii) fees and expenses
for third-party document collection, storage and management fees, and (iv) fees
due to the court or other costs within the scope of the IPR Counsel Fee
Agreement, which costs shall not exceed the IPR Fee Cap.

“IPR Counsel” means, collectively, Morrison & Foerster LLP and McAndrews Held
and Malloy Ltd. and, subject to Investor’s rights pursuant to Section 3.1.5, any
successor counsel retained by Plaintiff to defend the Claim.

“IPR Counsel Fee Agreement” has the meaning set forth in Section 5.5.

“IPR Fee Cap” means [*****]; provided, that in no event shall (a) fees paid to
IPR Counsel incurred in connection with any individual Funded IPR Proceeding
exceed [*****] and (b) expenses incurred in connection with any individual
Funded IPR Proceeding exceed [*****].      

“ITC” has the meaning set forth in the Recitals. 

“Lien” means any mortgage, deed of trust, pledge, lien (common law, statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement,

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Confidential Treatment Requested.  Omitted portions are marked with [*****] and
have been filed separately with the Securities and Exchange Commission.

any capitalized lease and any assignment, deposit arrangement or financing lease
intended as, or having the effect of, security.

“Litigation” means, collectively, the investigation pending in the ITC Inv. No.
337-TA-1023 alleging that Defendant’s products infringe the Original Patents and
the lawsuit Plaintiff filed against Defendant in the U.S. District Court for
Central District of California Case No. 8-16-cv-1605, alleging that Defendant’s
products infringe the Patents.  For the avoidance of doubt, consistent with
Section I of the Litigation Counsel Fee Agreement (Scope of Engagement),
“Litigation” does not include any appeal taken from a decision or adjudication
reached or issued in either of Inv. No. 337-TA-1023 or Case No. 8-16-cv-1605, or
any other litigation or adversarial proceeding.

“Litigation Costs” means the costs properly incurred in prosecuting the Claim
from and after January 1, 2017 by or on behalf of Plaintiff, including the
professional fees and expenses (including travel expenses) incurred by
Litigation Counsel in accordance with the Litigation Counsel Fee Agreement and,
subject to the terms of this Agreement: (i) professional fees and expenses for
advisors, experts or witnesses retained by Litigation Counsel, (ii) fees and
expenses for trial preparation and presentation support services, (iii) fees and
expenses for third-party document collection, storage and management fees, and
(iv) fees due to the court, ITC or other costs within the scope of the
Litigation Counsel Fee Arrangement; provided, that, Investor shall not pay fees
in excess of the ITC Fee Cap or the District Court Fee Cap (each as defined in
the Litigation Counsel Fee Agreement).  For avoidance of doubt, Litigation Costs
does not include costs incurred in connection with any patent other than the
Patents or any matter not within the scope of the Litigation.

“Litigation Counsel” means Mintz Levin; any additional counsel Mintz Levin
reasonably determines to associate; and, subject to Investor’s rights pursuant
to Section 3.1.5, any successor counsel retained by Plaintiff to prosecute the
Claim.

“Litigation Counsel Fee Agreement” has the meaning set forth in Section 5.4.

“Material Adverse Change” means a material adverse change, as determined by the
Investor in good faith, in or on (i) the ability of the Plaintiff to perform its
obligations under this Agreement or any other Investment Document, (ii) 
Investor’s right, title and interest in the Collateral or on the material rights
and remedies of Investor under any Investment Document, (iii) the validity or
enforceability of this Agreement or any other Investment Document, or (iv) the
business, financial position, assets or properties of Plaintiff or its
Affiliates.  For the avoidance of doubt, a Material Adverse Change does not
include a material adverse change to the likelihood of the success of the
prosecution of the Claim.

“Mintz Levin” means Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

“Note Agreement” means the Senior Secured Convertible Promissory Note and
Warranty Purchase Agreement, dated as of November 18, 2015, between SVIC,
Plaintiff, and each Subsidiary party thereto, as the same has been amended,
restated, or otherwise modified.

 

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“Obligations” means (a) the obligation of Plaintiff to pay to Investor from the
Recoveries pursuant to the terms of this Agreement, (b) the obligations of
Plaintiff under Section 17.1, and (c) any other obligation of Plaintiff to pay
money to Investor under this Agreement.

“Original Patents” has the meaning set forth in the Recitals.

“Parties” means Investor and Plaintiff, each of which, alone, is a “Party.”

“Patents” has the meaning set forth in the Recitals.

“Payment Procedures” has the meaning set forth in Section 6.1.

“Permitted Liens” means (i) Liens securing the Obligations, and (ii) Liens
permitted under the Existing Financing Documents.

“Person” means an individual, partnership, limited liability company, trust,
estate, corporation, custodian, nominee or any other individual or entity acting
on its own or in any representative capacity.

“Plaintiff” has the meaning set forth in the preamble.

“Plaintiff Termination Event” has the meaning set forth in Section 10.1.

“Pre-Effective Date NDA” means the Nondisclosure Agreement, dated January 28,
2017, between the Plaintiff and Investor Capital Management, LLC.

“Proceeds Account” means an account established as described in Section 13.1.  

“Recoveries” means any and all consideration and value received by Plaintiff
(prior to any netting, offset, reduction or deduction of any fees, costs,
expenses, payment of taxes or payment of any other amounts) in partial or
complete resolution of the Claim or the Litigation, including: (a) any and all
gross, pre-tax monetary awards, damages, recoveries, judgments or other property
or value awarded to, recovered by or on behalf of (or reduced to a debt owed to)
Plaintiff or Investor on account or as a result or by virtue (directly or
indirectly) of the Claim, whether by negotiation, arbitration, mediation,
diplomatic efforts, lawsuit, settlement, or pursuant to a corporate transaction
of any nature, or otherwise, and includes all of the Plaintiff’s legal and/or
equitable rights, title and interest in and/or to any of the foregoing, whether
in the nature of ownership, lien, security interest or otherwise, plus (b) any
recovered interest, penalties, attorneys’ fees and costs in connection with any
of the foregoing (including, without limitation, post-judgment interest, costs
and fees), plus (c) any consequential, actual, punitive, exemplary or treble
damages awarded or recovered on account thereof, plus (d) any interest awarded
or later accruing on any of the foregoing (including, without limitation,
post-judgment interest), plus (e) any recoveries against attorneys, accountants,
experts or officers in connection with any of the foregoing or the pursuit of
the Claim.

“Reference Entity” means, individually and collectively, the Defendants and any
other parties listed as defendants or counterclaim defendants in the Litigation,
jointly and severally, and including their Affiliates, and any other person or
entity added or joined to the Litigation from

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time to time as a defendant or indemnitor or against whom proceedings are
asserted or threatened even if such person or entity is not named or served.

“Representatives” has the meaning set forth in Section 16.4.1.

“Security Agreement” has the meaning set forth in Section 8.1.

“Security Documents” means this Agreement and all other agreements, instruments
and other documents delivered by or on behalf of Plaintiff that create or
perfect any Lien on any property of Plaintiff.

“Special Damages” has the meaning set forth in Section 17.2.

“Subsequent Funding Date” has the meaning set forth in Section 1.1.

“SVIC” means SVIC No. 28 New Technology Business Investment L.L.P.

“Tax Returns” has the meaning set forth in Section 2.1.7.

“Termination Date” means the earlier to occur of (a) the date of termination of
this Agreement by written consent of the Parties pursuant to Sections 11 and 12
of this Agreement, (b) the date of termination of this Agreement by Plaintiff or
Investor pursuant to Sections 9,  10 and 12 of this Agreement, or (c) the date
by which (i) all of the Litigation has been resolved by Final Order or
settlement among the parties, (ii) all of the Funded IPR Proceedings have been
resolved by Final Order or settlement among the parties, (iii) Plaintiff has
remitted to Investor the Gross Recoveries, and (iv) all Obligations have been
indefeasibly paid in full.

“Termination Event” has the meaning set forth in Section 10.2.

1.2.       Certain Matters of Construction.  The terms “herein,” “hereof,”
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.  Any pronoun used
shall be deemed to cover all genders.  In the computation of periods of time
from a specified date to a later specified date, “from” means “from and
including,” and “to” and “until” each mean “to but excluding.”  The terms
“include,” “includes,” and “including” shall mean “including, without
limitation” and, for purposes of each Investment Facility Document, the parties
agree that the rule of ejusdem generis shall not be applicable to limit any
provision.  Section titles appear as a matter of convenience only and shall not
affect the interpretation of any Investment Facility Document.  All references
to (a) laws or statutes include all related rules, regulations, interpretations,
amendments and successor provisions; (b) any document, instrument or agreement
include any amendments, waivers and other modifications, extensions or renewals
(to the extent permitted by the Investment Facility Documents); (c) any section
mean, unless the context otherwise requires, a section of this Agreement; (d)
any exhibits or schedules mean, unless the context otherwise requires, exhibits
and schedules attached hereto, which are hereby incorporated by reference; (e)
any Person includes successors and permitted assigns of such Person; (f) time of
day means time of day at Investor’s notice address as specified in Section 18.3;
or (g) discretion of a Person means the sole and absolute discretion of such
Person.  The Definitions to this Agreement are a material part of this Agreement
having the same force and effect as a mutual representation, warranty and
covenant of the Parties. 

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References to agreements and other documents shall be deemed to include all
subsequent amendments and other modifications thereto.

SECTION 2.    REPRESENTATIONS AND WARRANTIES.

2.1.      Plaintiff’s Representations and Warranties.  To induce Investor to
enter into this Agreement and to make the Investments, Plaintiff represents and
warrants on the Effective Date, and each Funding Date that:

2.1.1    Common Interest/Confidentiality. Plaintiff has received advice from
legal counsel of its choosing regarding the common interest doctrine and
confidentiality in the context of and in connection with this Agreement.

2.1.2    Full Disclosure. Plaintiff has (a) taken all reasonable efforts to
provide Investor all material information related to the Claim and the Funded
IPR Proceedings, other than any information protected solely by the
attorney-client privilege, and (b) not intentionally withheld from Investor any
non-privileged material information related to the Claim and the Funded IPR
Proceedings; provided, as to both (a) and (b), that such information was
reasonably necessary for Investor to evaluate the merits and value of, and the
ability of Plaintiff to collect on, the Claim.  There is no information in the
knowledge, possession or control of Plaintiff or any of its Representatives that
is or is likely to be material to Investor’s assessment of the Claim and the
Funded IPR Proceedings that has not been disclosed to Investor, and Plaintiff
believes (and does not have, and has not been informed by any of its
Representatives of, any belief to the contrary) that the Claim and the Funded
IPR Proceedings are meritorious and Plaintiff is likely to prevail.

2.1.3    No Impairment.  

(a)     Plaintiff has not taken any action (including executing documents), or
failed to take any action, the result of which would be to (i) adversely affect
the Claim and the Funded IPR Proceedings, or (ii) except as set forth in the
Existing Financing Documents, give any Person other than Plaintiff, Litigation
Counsel, and Investor an interest in the Recoveries. 

(b)     Except for the Litigation and the proceedings listed on Schedule 2.1.11,
Plaintiff has not instituted any action, suit or arbitration concerning the
Claim and will not institute any action, suit or arbitration concerning the
Claim other than with the express written authorization of Investor until after
the Conclusion of the Claim.

2.1.4    Right to Bring the Litigation.  Plaintiff represents that it has the
full right, title and authority to bring the Litigation and that no Person other
than the Plaintiff has the right, title and authority to assert the
Claim.  Plaintiff represents that no Person other than the Plaintiff has the
right, title and authority to claim any right to or interest in the Claim or
Recoveries, other than as provided in this Agreement.  Other than financing
statements filed in favor of holders of Permitted Liens, no effective financing
statement, notice of tax lien or other instrument similar in effect under any
applicable law covering all or any part of the Collateral is on file in any
filing office with respect to a valid Lien.

2.1.5    Completeness and Accuracy.  (a) All material information Plaintiff has
provided, or caused to be provided, to Investor, Litigation Counsel and/or IPR
Counsel is to the

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best of Plaintiff’s knowledge and belief true and correct in all material
respects, and (b) all Plaintiff’s representations and warranties in this
Agreement are to the best of Plaintiff’s knowledge and belief true and correct
in all material respects.

2.1.6    Liens of Investor.  All Liens granted to Investor in the Collateral are
duly perfected (subject to the Perfection Requirements, as defined in the
Security Agreement) (a) first priority Liens with respect to the Collateral
other than the Patents, and (b) second Priority Liens with respect to the
Patents.  Plaintiff has not transferred any interest in or created any Lien upon
the Claim or Plaintiff’s right to any proceeds thereof (except Permitted Liens).

2.1.7    Taxes.  Plaintiff has filed all federal, state, local and non-U.S. tax
returns and other reports (“Tax Returns”) that it is required by Applicable Law
to file.  All such Tax Returns were correct and complete in all material
respects.  All taxes due and owing by the Plaintiff (whether or not shown on any
Tax Return) have been paid.  There are no Liens for taxes (other than taxes not
yet due and payable or taxes that are being contested in good faith to the
extent reflected on Plaintiff’s financial statements) upon any Property of
Plaintiff.

2.1.8    Brokers.  There are no brokerage commissions, finder’s fees or
investment banking fees payable in connection with any transactions contemplated
by the Investment Facility Documents.

2.1.9    Compliance with Laws.  Plaintiff has duly complied in all material
respects with all Applicable Law.  To the best of Plaintiff’s knowledge, there
have been no citations, notices or orders of material noncompliance issued to
Plaintiff under any Applicable Law.

2.1.10  Litigation.  Except for the Litigation, the Funded IPR Proceedings, and
the proceedings or investigations listed on Schedule 2.1.10, there are no
proceedings or investigations pending or threatened against Plaintiff.

2.1.11  Patent Litigation.  The Litigation, the Funded IPR Proceedings and the
proceedings listed on Schedule 2.1.11 represent all currently pending litigation
or other proceedings regarding the Patents.

2.1.12  No Defaults.  No event or circumstance has occurred or exists that
constitutes an Investor Termination Event.

2.1.13  Defendant/Samsung.  To the best of Plaintiff’s knowledge, Defendant is
not an Affiliate or otherwise related to Samsung Electronics Co., Ltd. or any of
its Affiliates.

2.1.14  Litigation Counsel.  Litigation Counsel has agreed that it will comply
with (a) the provisions that relate to Litigation Counsel herein, including the
Payment Procedures set forth on Exhibit E, and (b) the Investor Billing
Guidelines, a copy of which Plaintiff has provided to Litigation Counsel.

2.1.15  IPR Counsel.  Each IPR Counsel has agreed that it will comply with (a)
the provisions that relate to IPR Counsel herein, including the Payment
Procedures set forth on Exhibit E, and (b) the Investor Billing Guidelines, a
copy of which Plaintiff has provided to IPR Counsel.

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2.2.      No Representation or Warranty Regarding Assets or Litigation.  Nothing
in this Agreement shall be construed to be (and Plaintiff expressly disclaims
making) any representation or warranty regarding the merits or potential outcome
of the Litigation or the Funded IPR Proceedings.

2.3.      Investor’s Representations.  Investor hereby represents and warrants
on the Effective Date that:

2.3.1    Funds. Investor has and will continue to have sufficient funds
available to fulfill its financial obligations under this Agreement.

2.3.2    Fully Informed.  Investor has reviewed all the information about the
Claim and Funded IPR Proceedings provided to it.

2.3.3    No Conflicts of Interest. 

(a)     Investor has not: (a) paid a referral fee to any party, including
Litigation Counsel, in connection with the Claim, Plaintiff or this Agreement;
(b) entered any transaction with Litigation Counsel that has or would make
Litigation Counsel a part owner of Investor; (c) contracted with any other party
or potential party to the Claim; or (d) engaged in negotiations with any other
party or potential party to the Claim.

(b)     Investor will not: (a) pay a referral fee to any party, including
Litigation Counsel, in connection with the Claim, Plaintiff or this Agreement;
(b) transfer or agree to transfer any ownership in Investor to Litigation
Counsel; or (c) contract with any other party or potential party to the Claim
without full disclosure to Plaintiff.

(c)     Investor does not have a duty or contractual or other obligation to
monetize its interest in the Claim within any particular time frame.

2.3.4    No Waiver of Privilege.  Investor has not disclosed any Common Interest
Material to anyone without the prior written consent of Plaintiff.

2.3.5    Secondary Market Financing.

(a)     Investor has not sold or entered negotiations to sell any or all of its
interest in the Claim or the Recoveries to anyone.

(b)     Investor will not securitize its interest in the Claim or the
Recoveries.

2.4.      Mutual Representations.

2.4.1    Organization and Qualification.  Each Party is duly organized and
validly existing under the laws of the State of Delaware and has all the
requisite power and authority to own, lease and operate its assets, to execute,
deliver and perform the Investment Facility Documents and to carry on its
business as now conducted.

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2.4.2    Power and Authority.  Each Party represents that it has expressly
authorized its undersigned representative to execute this Agreement on the
Party’s behalf as its duly authorized agent.  Each Party is duly authorized to
perform its obligations under the Investment Facility Documents and no other
authorization, approval or other action by, or notice to, any Governmental
Authority or any other Person is required in connection with the due execution,
delivery and performance of the Investment Facility Documents.  The execution,
delivery and performance of the Investment Facility Documents do not violate or
contravene any Applicable Law or any contract or other agreement to which each
Party is a party, or any order or decree directly binding on it.

2.4.3    Enforceability.  Each Investment Facility Document is a legal, valid
and binding obligation of Plaintiff, enforceable in accordance with its
terms.  Each Party represents that the making and performance of this Agreement
will not violate any provision of the Party’s articles of incorporation,
membership agreement, charter, bylaws or other governing documents or any other
agreement or instrument to which such Party is bound.  Each Party has had the
opportunity to consult with legal counsel of its choosing with respect to the
terms and effect of the Investment Facility Documents.

SECTION 3.  COVENANTS.

3.1.      Covenants of Plaintiff.

3.1.1    Reporting.  Plaintiff covenants that all representations and warranties
as to statements of fact shall, to the best of its knowledge and belief, remain
true throughout the term of this Agreement and that it will promptly inform
Investor if it determines that any such representation and warranty is not
true.  Plaintiff further will use its best efforts to provide or cause to be
provided to Investor and Litigation Counsel all material information relating to
the merits and value of, and the ability of Plaintiff to collect on, the Claim,
other than (with respect to Investor only) any information protected solely by
the attorney-client privilege.  Notwithstanding the foregoing, nothing in this
Section 3.1.1 shall affect the obligations of Plaintiff or Litigation Counsel to
comply with the requirements of any protective order.  Plaintiff shall promptly
provide to Investor copies of any reports regarding the Litigation and the
Funded IPR Proceedings made publicly available after the Effective Date.

3.1.2    Duty to Cooperate and Pursuit of Litigation. Plaintiff covenants to
diligently and in good faith cooperate in and pursue the prosecution of the
Claim, and the defense of the Funded IPR Proceedings.  Plaintiff shall: (a)
pursue the Claim and all of the Plaintiff’s legal and equitable rights arising
in connection with such Claim; (b) use its best efforts to bring about the
reasonable monetization of the Claim; and (c) collect and enforce any
settlement, final judgment or award; provided, however, that nothing in this
Agreement shall require Plaintiff to continue to prosecute the Claim to the
extent that Plaintiff reasonably determines that the Claim no longer has
merit.  Plaintiff will promptly and fully assist Litigation Counsel and IPR
Counsel, as applicable, as reasonably necessary to efficiently conduct and
successfully conclude prosecution of the Claim and the Funded IPR
Proceedings.  Notwithstanding the foregoing, Plaintiff agrees not to discontinue
prosecution of the Claim or defense of the Funded IPR Proceedings without
providing thirty days’ written notice to Investor and without giving good faith
consideration to Investor’s response, if any; provided, further, that if
Plaintiff proceeds to discontinue prosecution of the Claim

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or defense of the Funded IPR Proceedings over Investor’s objection, Investor
shall have the right to immediately cease funding hereunder and terminate this
Agreement in accordance with Sections 9 and 12.  For the avoidance of doubt,
such cooperation includes all actions any party to litigation can usually be
expected to take, including, (a) making Documents and witnesses reasonably
available to Litigation Counsel and IPR Counsel, as applicable; (b) responding
to and participating in the discovery process to the full extent reasonably
requested by Litigation Counsel and IPR Counsel, as applicable, including the
production of all responsive Documents as directed by Litigation Counsel and IPR
Counsel, as applicable; (c) submitting to examination, whether in deposition, at
evidentiary hearings or otherwise; (d) verifying statements under oath; (e)
appearing at any proceedings; and (f) making decisions concerning litigation and
settlement strategy in a prompt and reasonable manner.  The examples in the
preceding sentence are illustrative and do not limit Plaintiff’s duty to
cooperate in any way.

3.1.3    Pursuit of Claim.  Plaintiff shall not do anything to prejudice any
benefits, rights or causes of action sought or advanced in connection with, or
the general pursuit of, the Claim.

3.1.4    Duty to Inform.  Subject to other subsections in this Section 3.1,
Plaintiff agrees and undertakes to keep Investor informed or to cause Investor
to be informed about the Claim and the Funded IPR Proceedings at all times and
to provide all information regarding the Claim and the Funded IPR Proceedings,
including at Investor’s request.  Without limiting the generality of the
foregoing, Plaintiff acknowledges and agrees as follows:

(a)     Non-Privileged Information. Pursuant to the Litigation Counsel Fee
Agreement and the IPR Counsel Fee Agreement, Plaintiff has instructed Litigation
Counsel and IPR Counsel, and if further instructions are needed, will use its
best efforts to timely instruct Litigation Counsel and IPR Counsel, to provide
Investor with all material non-privileged information relating to the Claim as
soon as practicable, regardless of the information’s source, confidentiality or
form, unless to do so would be a breach of an obligation to a third party, an
order of a court or other governmental authority, or Investor already possesses
or controls such information.

(b)     Work Product. Acknowledging that this Agreement contains provisions
requiring each Party to protect the confidentiality of any Confidential
Information disclosed to it and that some such information is protected by the
work product doctrine, Plaintiff has instructed Litigation Counsel, as set forth
in the Litigation Counsel Fee Agreement, and IPR Counsel, as set forth in the
IPR Counsel Fee Agreement, and if further instructions are needed, will use its
best efforts to timely instruct Litigation Counsel and IPR Counsel, to provide
Investor with all material work product relating to the Claim and the Funded IPR
Proceedings as soon as practicable, regardless of the information’s source,
confidentiality or form, unless to do so would be a breach of an obligation to a
third party or an order of a court or other governmental authority, or Investor
already possesses or controls such information, or unless Plaintiff in good
faith and in consultation with Litigation Counsel or IPR Counsel, as applicable,
concludes that such disclosure would create a substantial risk of waiver of the
protections of the work product doctrine; provided, however, that in the event
any Party has any concerns that the disclosure of any work product will in any
way prejudice the outcome of the Litigation, the Claim, or the Funded IPR
Proceedings, such Party shall consult in good faith with the other Party.

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(c)     Attorney–Client Privileged Information. Relying on the Parties’
recognition and agreement that they share a common legal interest and that
communicating attorney-client privileged information to Investor in the
furtherance of that interest does not waive the attorney-client privilege,
Plaintiff may undertake to share such information on a topic-by-topic basis, but
only if (i) Plaintiff has discussed with Litigation Counsel, IPR Counsel, and/or
legal counsel of Plaintiff’s choosing the information to be shared, the reason
for sharing it and the likely consequences if the sharing is ultimately held to
waive the privilege; (ii) Plaintiff has given written consent to such
information sharing; and (iii) Investor is advised of the nature of the
privileged information in sufficient detail that Investor can make its own risk
assessment in determining whether to accept receipt of such privileged
information and then accepts receipt of such information.  For avoidance of
doubt, even if Plaintiff determines to provide such information to Investor,
Investor may decline to accept receipt of such information. 

3.1.5    No Change in Litigation Counsel or IPR Counsel Without Investor Notice.
Plaintiff agrees and undertakes that it will not seek to replace Litigation
Counsel or IPR Counsel without thirty days’ prior written notice to Investor and
without giving good faith consideration to Investor’s response, if any;
provided, that, if Plaintiff proceeds to retain a replacement law firm or any
supplemental counsel over Investor’s objections, Investor shall have the right
to immediately cease funding hereunder and terminate this Agreement in
accordance with Sections 9 and 11.  In addition, Plaintiff agrees not to remove
Mintz Levin as Litigation Counsel for the purposes of avoiding making the
payments otherwise due to Mintz Levin under the Litigation Counsel Fee
Agreement.

3.1.6    Investor Consultation Rights Regarding Settlement.

(a)     Plaintiff will immediately notify Investor upon receiving a settlement
offer, informing Investor of the complete details of the offer.  Plaintiff will
consult with Investor regarding the settlement offer before responding thereto,
provided, that, Investor communicates its views within three Business Days of
receiving notice of the offer, and, provided, further, that Plaintiff shall have
no obligation to follow Investor’s advice.

(b)     Plaintiff will consult with Investor before making any settlement
offer.  Investor shall communicate its views concerning such potential
settlement offer within three Business Days of Plaintiff’s request for
consultation, but Plaintiff shall have no obligation to follow Investor’s
advice.

3.1.7    Good Faith Dealings. Plaintiff agrees it will act reasonably and in
good faith toward Investor in every action Plaintiff takes in relation to the
Claim and Plaintiff’s performance under this Agreement.  Plaintiff shall not
consent to any request by SVIC to sell, transfer, assign or hypothecate the Note
or any of its rights under the Transaction Documents (as each of those terms is
defined in the Note Agreement) to any party that is not an Affiliate of SVIC
without the prior written approval of Investor.  If the Conclusion of the Claim
has not occurred on or before April 1, 2018, then, at Investor’s request,
Plaintiff will amend the Investment Documents to provide Investor with any
additional reasonable protections proposed by Investor to protect Investor’s
ability to realize on its investment.

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3.1.8    Compliance with the Investment Facility Documents.  Until the
Termination Date, Plaintiff shall comply with the Investment Facility Documents,
including the reporting requirements and payment of the Obligations as set forth
therein.

3.1.9    Required Actions.  Until the Termination Date, promptly after
Investor’s request to do so, Plaintiff shall deliver such instruments and
agreements, and take such actions, to create, evidence or perfect Investor’s
Liens on any Collateral, or otherwise necessary to give effect to the terms of
this Agreement.

3.1.10  Compliance with Laws.  Plaintiff shall comply with all Applicable Laws.

3.1.11  Existence.  Plaintiff shall maintain and preserve its existence.

3.1.12  Books and Records.  Plaintiff shall keep and maintain books and records
currently in its possession or control and essential to the prosecution of the
Litigation and defense of the Funded IPR Proceedings.

3.1.13  Payment of Taxes.  Plaintiff shall pay and discharge all taxes due and
owing by Plaintiff on a timely basis prior to the date on which any penalties
may attach thereto.

3.1.14  Permitted Liens.  Plaintiff shall not create or suffer to exist any Lien
upon any of the Collateral, including the Recoveries, the Claim, the Litigation,
or the Proceeds Account, except Permitted Liens.

3.1.15  Distributions to Creditors.  Plaintiff shall not declare or make any
distribution (a) from the Recoveries until such time as Investor has been paid
therefrom pursuant to the terms of this Agreement, or (b) from any other asset
of Plaintiff that is subject to Liens in favor of Investor if at the time of any
such proposed distribution any Obligations under this Agreement are outstanding.

3.1.16  Fundamental Changes.  Plaintiff shall not change its name or conduct
business under any fictitious name; change its tax, charter or other
organizational identification number (except to the extent required by
Applicable Law, in which case such information shall be provided to Investor
prior to the making of such change); change its form or state of organization;
wind-up, liquidate or dissolve, or merge, combine, consolidate or amalgamate
with any Person, in each case, whether in a single transaction or in a series of
related transactions.

3.2.      Waiver.  Upon written request of Plaintiff, Investor may waive, in
writing, compliance with any covenant described in Section 3.1.

3.3.      Covenants of Investor.

3.3.1    No Waiver of Privilege. Notwithstanding any other provision of this
Agreement, Investor shall not disclose any Common Interest Material to any third
party without the prior written consent of Plaintiff.  For the avoidance of
doubt, this prohibition prevents disclosure without Plaintiff’s prior written
consent to Investor’s investors.  If consent is given, Investor shall enter into
an agreement with such secondary recipients to preserve the confidentiality of
the Common Interest Material on terms no less restrictive than those set forth
in

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this Agreement for Confidential Information.  This provision shall survive the
termination of this Agreement.

3.3.2    Good Faith Dealings. Investor agrees it will act reasonably and in good
faith toward Plaintiff in every action Investor takes in relation to the Claim
and Investor’s performance under this Agreement.  For the avoidance of doubt,
and without limiting the foregoing, pressuring Plaintiff to negotiate or accept
a settlement that Plaintiff believes is not in its best interests shall violate
this covenant.  Notwithstanding the previous sentence, Investor’s exercise of
its right to provide input to litigation and settlement strategy and its right
to terminate funding for cause pursuant to Sections 9 and 12 shall not
constitute breach of this covenant.

3.3.3    Settlement and Cooperation Investor will cooperate with Plaintiff,
Litigation Counsel and IPR Counsel to the extent reasonably requested by
Plaintiff.  Investor agrees that, upon request of Plaintiff, it will make itself
reasonably available to assist with settlement strategy related to any mediation
proceeding or otherwise, provided that Investor further agrees it will not
directly or indirectly impede or interfere with the orderly progress of any such
mediation or settlement discussions. 

3.3.4    No Present Interest in Patents.  Subject to Section 9.1(g) hereof and
the terms of the Security Agreement, nothing in this Agreement provides or is
intended to provide Investor with a right or opportunity to control or to make
binding or final decisions of any kind regarding the licensing, enforcement, or
resolution of Plaintiff’s Claim and Patents, including Plaintiff’s sole
settlement authority, and Investor hereby disclaims and waives all such rights.

SECTION 4.   COMMON INTEREST AND CONFIDENTIAL INFORMATION.

4.1.       Common Interest. The Parties agree that they share a common legal
interest and, to the degree necessary to further their common legal interest,
agree to share Common Interest Material in accordance with the provisions of
Sections 2.1.1 and 4.1.  Plaintiff and Investor agree that Plaintiff would not
share such material with Investor in the absence of their common legal interest
in the successful prosecution of the Claim.  No waiver of the attorney-client
privilege, work product doctrine or any other privilege or immunity from
compelled disclosure is or shall be implied by the exchange or disclosure of any
information or documents in connection with this Agreement.  Neither an
inadvertent disclosure nor a purposeful disclosure pursuant to this Agreement or
in connection with the transactions contemplated hereby shall constitute a
waiver of any privilege or protection of any Party.

4.2.       Non-Disclosure Generally. The recipient of Confidential Information
shall not disclose, use or make available, directly or indirectly, any
Confidential Information to anyone, except as needed to perform its obligations
under this Agreement or as the disclosing Party otherwise authorizes in
writing.  When disclosing, using or making Confidential Information available in
connection with the performance of its obligations under this Agreement or as
permitted by the other Party hereto, the disclosing Party shall cause the
recipient of such Confidential Information to enter into an agreement with the
disclosing Party to preserve the confidentiality of the Confidential Information
on terms no less restrictive than as set forth in this Agreement.  The recipient
agrees that neither the execution of this Agreement nor the provision of
Confidential Information hereto enables the recipient to use the Confidential
Information for any

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purpose or in any way other than as specified in this Agreement; provided,
however, that (a) Investor may disclose Confidential Information (including a
copy of this Agreement), other than information protected as work product or
attorney-client privileged, to Investor’s investors and (b) any Party may
disclose Confidential Information, other than information protected as work
product or attorney-client privileged, to the Party’s accountants and auditors
to the minimum extent necessary to the performance of their duties.

4.3.       Potentially Enforceable Disclosure Requests.  In the event that any
Party (the “Disclosing Party”) is requested or required by a governmental
authority or otherwise pursuant to other legal process to disclose any
Confidential Information, such Disclosing Party shall, to the extent permitted
by applicable law, give the other Party prompt written notice of such request or
requirement so that the other Party may seek an appropriate order or other
remedy protecting the Confidential Information from disclosure, and the
Disclosing Party will cooperate with the other Party to obtain such protective
order or other remedy.  If such notice to the other Party is not permitted by
applicable law, the Disclosing Party shall use good faith efforts to contest
such disclosure.  In the event that a protective order or other remedy is not
obtained or the other Party waives its right to seek such an order or other
remedy, the Disclosing Party may, without liability under this Agreement,
furnish only that portion of the Confidential Information that, in the written
opinion of the Disclosing Party’s counsel, the Disclosing Party is legally
required to disclose; provided, that, to the extent permitted under applicable
law, such Disclosing Party shall give written notice of the Confidential
Information to be disclosed as far in advance of its disclosure as practicable
and use its best efforts to obtain assurances that confidential treatment will
be accorded to such Confidential Information.

SECTION 5.   RETENTION OF COUNSEL.

5.1.       Retention of Litigation Counsel and IPR Counsel. Subject to the terms
of this Agreement, Investor and Plaintiff acknowledge and agree that Plaintiff
is free to select counsel of its choosing in the Litigation and the Funded IPR
Proceedings.  Investor acknowledges and accepts that Plaintiff has retained
Mintz Levin in connection with the Litigation, and Investor enters into this
Agreement in reliance on that selection of counsel (among other things) pursuant
to the terms set forth in the Litigation Counsel Fee Agreement.  In the event
Plaintiff seeks to replace Litigation Counsel and/or IPR Counsel, Investor shall
have the right to (a) approve in advance any new counsel retained to replace
Litigation Counsel and/or IPR Counsel and (b) participate in the negotiation of
fee arrangements with such other counsel.  Investor also shall have the right to
approve and negotiate fee arrangements with vendors and other service providers
to be retained in connection with the Litigation, the Funded IPR Proceedings and
the Claim.

5.2.       Litigation Counsel. Plaintiff has instructed Litigation Counsel to
remit all invoices in connection with the Litigation and the Claims directly to
Investor.  Litigation Counsel shall submit all of its invoices directly to
Investor by email addressed to Billing@trgpcap.com.  Notwithstanding that
Investor will be responsible for payment of Litigation Counsel’s fees and
expenses as and to the extent set forth herein, the Parties understand and agree
that Litigation Counsel’s exclusive duties shall be owed to Plaintiff and not to
Investor.

5.3.       IPR Counsel. Plaintiff has instructed IPR Counsel to remit all
invoices in connection with the Funded IPR Proceedings directly to Plaintiff and
not to Investor.  Investor

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shall pay IPR Counsel’s fees and expenses as and to the extent set forth in this
Agreement within 45 days of the date of Investor’s receipt of IPR Counsel’s
invoice from Plaintiff.  Plaintiff agrees to submit all such invoices to
Investor by email addressed to Billing@trgpcap.com.  Notwithstanding that
Investor will be responsible for payment of IPR Counsel’s fees and expenses as
and to the extent set forth herein, the Parties understand and agree that IPR
Counsel’s exclusive duties shall be owed to Plaintiff and not to Investor.

5.4.       Compensation of Litigation Counsel. Plaintiff and Mintz Levin are
party to an engagement letter, dated as of the Effective Date, regarding Mintz
Levin’s retention as Litigation Counsel (the “Litigation Counsel Fee
Agreement”), a copy of which is attached hereto as Exhibit C.  The Litigation
Counsel Fee Agreement amends a prior engagement letter entered into between
Plaintiff and Mintz Levin, dated December 8, 2016.  Investor acknowledges that
it has reviewed and understands, and further consents and agrees to, the terms
of the Litigation Counsel Fee Agreement.

5.5.       Compensation of IPR Counsel. Each IPR Counsel has agreed, as set
forth in the correspondence attached hereto as Exhibit D, that it will comply
with (a) the provisions that relate to IPR Counsel herein, including without
limitation, the provisions set forth in Exhibit E, and (b) the Investor Billing
Guidelines, a copy of which Plaintiff has provided to IPR Counsel.

5.6.       Removal of Litigation Counsel. In the event Plaintiff removes
Litigation Counsel, (a) Investor shall pay to Mintz Levin (or whomever is the
approved Litigation Counsel at that time) the amounts owed to Litigation Counsel
as of the date of such termination solely in accordance with the terms of the
Litigation Counsel Fee Agreement; and (b) Plaintiff shall pay any additional
amounts deemed to be due to Litigation Counsel under the Litigation Counsel Fee
Agreement, on the basis of quantum meruit or otherwise. 

5.7.       Removal of IPR Counsel. In the event Plaintiff removes IPR Counsel,
Investor shall pay to Morrison & Foerster LLP and McAndrews Held and Malloy Ltd.
(or whomever is the approved IPR Counsel at that time) the amounts owed to IPR
Counsel as of the date of such termination solely in accordance with the terms
of the IPR Counsel Fee Agreement and the provisions of this Agreement, including
Section 5.3. 

SECTION 6.  FUNDING TERMS.

6.1.      Initial Investments.  Subject to all terms and conditions set forth in
this Agreement, Investor agrees to pay (a) all Litigation Costs submitted by
Plaintiff or Litigation Counsel to Investor incurred between January 1, 2017 and
the Initial Funding Date and (b) all IPR Costs up to the IPR Fee Cap submitted
by Plaintiff to Investor incurred between January 1, 2017 and the Initial
Funding Date in accordance with this Agreement pursuant to the procedures set
forth on Exhibit E (the “Payment Procedures”).

6.2.      Post-Closing Investments.  Subject to all of the terms and conditions
set forth herein, Investor agrees to pay all Litigation Costs and IPR Costs up
to the IPR Fee Cap submitted by Plaintiff to Investor incurred between the
Initial Funding Date until the Termination Date in accordance with the Payment
Procedures, provided, that, Investor shall not have any obligation to make an
Investment more frequently than monthly.

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6.3.      Counsel Fees.  From and after the Effective Date, Investor, and not
Plaintiff, shall be responsible for making, on behalf of Plaintiff, all payments
due to Litigation Counsel under the Litigation Counsel Fee Agreement and all
payments due to IPR Counsel, up to the IPR Fee Cap, under the IPR Counsel Fee
Agreement, and such other Litigation Costs and IPR Costs within the scope of
this Agreement, including without limitation Sections 5.6 and 5.5.

6.4.      Review and Approval of Fee Arrangements. 

6.4.1    Investor Review and Approval.  Investor shall have the right to approve
in advance all financial arrangements, including staffing, rates and fee
discounts, for all law firms, experts, consultants, vendors and other service
providers that Plaintiff, Litigation Counsel and/or IPR Counsel seeks to retain
or employ in connection with the Claim and the Funded IPR Proceedings, which
approval shall not be unreasonably withheld or delayed.  Plaintiff or, as
applicable, Litigation Counsel or IPR Counsel, shall instruct Litigation
Counsel, IPR Counsel, vendors and other service providers to provide Investor
(directly or, as appropriate, through Litigation Counsel or IPR Counsel, as
applicable) with quarterly budgets relating to anticipated fees and expenses
(including, in the case of Litigation Counsel, the anticipated expenses for
experts and consultants); provide advance notice to Investor of expenditures to
the extent practicable; give Investor the opportunity to participate in the
selection of vendors and other service providers and to participate in the
negotiation of pricing with experts, vendors and other service providers unless
otherwise agreed; and submit all bills to Investor for review and
approval.  Plaintiff, Litigation Counsel and IPR Counsel in all events shall
endeavor to retain and use experts, consultants and vendors in the most
cost-effective means possible in view of the demands of the Claim and the Funded
IPR Proceedings.

6.5.      Recoveries.  

6.5.1    Resolution with Defendant.  Upon receipt by Plaintiff of (A) Recoveries
payable to Plaintiff in the form of cash or cash equivalents, or (B) cash or
cash equivalents from any Reference Entity that acquires a controlling interest
in Plaintiff (in either case, a “Cash Recovery”), then such Cash Recovery shall
be paid directly into the Proceeds Account and distributed as follows: 

(a)     First, upon a Cash Recovery at any time, to Investor in an amount equal
to 1.0 times its Investment; then

(b)     Second, upon a Cash Recovery at any time, to Litigation Counsel in an
amount equal to the True-Up Payment (as defined in the Litigation Counsel Fee
Agreement); then

(c)     Third, (i) upon a Cash Recovery on or before [*****], to Investor in an
amount equal to [*****] times its Investment, in which case Investor shall be
entitled to no further compensation; or (ii) upon a Cash Recovery after [*****],
an amount equal to [*****] times its Investment plus an additional [*****] times
its Investment added on the first day of the calendar quarter commencing on
[*****] and each calendar quarter thereafter (e.g., a [*****] multiple as of
[*****], a [*****] multiple as of [*****], a [*****] multiple as of [*****],
etc.); provided,  however,  

 

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Confidential Treatment Requested.  Omitted portions are marked with [*****] and
have been filed separately with the Securities and Exchange Commission.

that in no event shall Investor be entitled to an aggregate distribution equal
to more than [*****] times its Investment; then

(d)     Fourth, to Litigation Counsel in an amount equal to the Fee Premium (as
defined in the Litigation Counsel Fee Agreement); then

(e)     Fifth, as to all remaining Recoveries, to Plaintiff. 

6.5.2    Recoveries in Forms Other Than Cash.  In the event there are Recoveries
payable to Plaintiff in a form other than Cash Recoveries, and Investor has not
been indefeasibly paid in full the Obligations owed to it pursuant to Section
6.5.1, then the Parties (including any successor to Plaintiff) shall negotiate
in good faith to determine the fair market value of such Recoveries in any form,
including (a) an acquisition of the Patents by any Person, (b) a merger or other
corporate transaction between Plaintiff and any Person, (c) securities, (d) cash
payments to be made in installments or (e) payments in the form of other
property other than cash or cash equivalents, shall be determined by generally
recognized accounting and appraisal standards.  Plaintiff shall promptly provide
to Investor all documents reflecting the financial terms of (i) an acquisition
of the Patents by any Person, (ii) a merger or other corporate transaction
between Plaintiff and any Person, (iii) securities, (iv) cash payments to be
made in installments, or (v) payments in the form of other property not entirely
cash or cash equivalents.  If the Parties (including any successor to Plaintiff)
are unable to agree on the fair market value of such Recoveries, then the fair
market value shall be determined in accordance with the dispute resolution
procedures set forth in Section 14 of this Agreement.  All Recoveries in a form
other than Cash Recoveries shall be made directly to Investor, which shall hold
such Recoveries in trust for the Parties pending a determination of their fair
market value pursuant to this Section 6.5.2.  After a determination has been
made of the fair market value of such Recoveries, then such Recoveries shall be
promptly distributed pursuant to Section 6.5.1.

6.5.3    Transaction Prior to Conclusion of Claim. If, prior to the Conclusion
of the Claim, Plaintiff sells or assigns (including by way of foreclosure of the
Patents) any interest in the Patents or the Claim to any Person, or enters into
a transaction with any Person that results in a Change of Control or in any way
impairs the value of the Patents or the Claim, then Investor shall be entitled
to the maximum payment that could be due to it under Section 6.5.1(c) (i.e.,
[*****] the amount of its Investment as of the date of the closing of the Change
of Control), which payment shall be indefeasibly paid to Investor in cash within
five Business Days after such closing.  Without limiting the generality of the
foregoing, and solely by means of example, if Defendant or SVIC were to purchase
25% or more on a fully diluted basis of the voting and/or economic interests in
the equity securities of Plaintiff, thus resulting in a Change of Control, then
Investor shall be entitled to receive [*****] times its Investment, which
payment shall be indefeasibly paid to Investor in cash within five Business Days
after the effective date of such Change of Control.

6.5.4    Conditions to Change of Control or Impairment of Claim. Plaintiff shall
not enter into any transaction with any Person that would result in a Change of
Control of Plaintiff or in any way impair the value of the Patents or the
Litigation unless, as a condition of such transaction,: (a) Plaintiff’s
counterparty or Plaintiff makes the payment to Investor required under Section
6.5.3 within five Business Days after the effective date of such Change of
Control, and (b)

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Confidential Treatment Requested.  Omitted portions are marked with [*****] and
have been filed separately with the Securities and Exchange Commission.

Plaintiff’s counterparty assumes the Plaintiff’s rights and obligations under
the Investment Documents (with the prior written consent of the Investor) and
agrees to (i) continue to pursue the Claims pursuant to the terms of the
Investment Documents, and (ii) make all payments at any time required to be made
to Investor under Section 6.5.1 of this Agreement.

6.5.5    No Commitment for Additional Investment.  Plaintiff acknowledges and
agrees that Investor has not made any representation, undertaking, commitment or
agreement to provide or assist Plaintiff in obtaining any financing, investment
or other assistance, other than the Investments set forth herein.  In addition,
Plaintiff acknowledges and agrees that (a) no statements, whether written or
oral, made by Investor on or after the Effective Date shall create an
obligation, commitment or agreement to provide or assist Plaintiff in obtaining
any financing or investment; (b) Plaintiff shall not rely on any such statement
by Investor; and (c) an obligation, commitment or agreement to provide or assist
Plaintiff in obtaining any financing or investment may only be created by a
written agreement, signed by Investor and Plaintiff, setting forth the terms and
conditions of such financing or investment and stating that the Parties intend
for such writing to be a binding obligation or agreement.

SECTION 7.  CONDITIONS PRECEDENT.

7.1.      Conditions Precedent to Initial Investments. Investor shall not be
required to make the requested initial Investment to Plaintiff pursuant to
Section 6 until the date that each of the following conditions precedent has
been (a) satisfied or (b) waived by Investor in its sole discretion (the
“Initial Funding Date”):

7.1.1    Due Execution.  Each Investment Facility Document has been duly
executed and delivered to Investor by each of the signatories thereto, and
Plaintiff shall be in compliance with all terms thereof.

7.1.2    No Dispositive Ruling.  No dispositive ruling that is adverse to
Plaintiff has been entered on the merits in the Litigation or the Funded IPR
Proceedings.

7.1.3    Request.  An Investment Request has been delivered on a timely basis to
Investor in respect of the requested Initial Investment.

7.2.      Conditions Precedent to All Investments.  In addition to the
conditions set forth in Section 7.1, Investor shall not be required to fund any
Investment to Plaintiff pursuant to Section 6 until the date that each of the
additional conditions precedent are satisfied or waived by Investor (each, a
“Subsequent Funding Date”):

7.2.1    No Default.  No Event of Default or Investor Termination Event exists
at the time of, or would result from, such funding, issuance or grant.

7.2.2    Representations and Warranties True and Correct.  The representations
and warranties of Plaintiff in the Investment Facility Documents are true and
correct on and as of such date as though made on and as of the date of such
Investment Request and on and as of the date for the making of such proposed
Investment (except for representations and warranties that expressly relate to
an earlier date, in which case such representations and warranties shall be true
and correct on and as of such earlier date).

 

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7.2.3    No Contravention.  The making of the Investment shall not contravene
any law, rule, or regulation.

7.2.4    Request.  An Investment Request has been delivered on a timely basis to
Investor in respect of the requested Investments.

SECTION 8.  SECURITY.

8.1.      Security Agreement.  Plaintiff shall at all times provide Investor
with sufficient security over the Collateral, in form and substance satisfactory
to Investor, pursuant to a security agreement, dated as of the Effective Date,
between Plaintiff, as grantor, and Investor, as secured party, in substantially
the form of Exhibit F hereto (as the same may be amended, restated or modified
after the date hereof in accordance with its terms, the “Security Agreement”).

8.2.      Condition to Investment.  The provision of security to comply with
Section 8.1 is both a condition precedent and a continuing obligation on the
part of Plaintiff and a condition of Investor’s continued performance and is
accordingly a condition of this Agreement, any breach of which shall entitle
Investor to terminate this Agreement pursuant to Sections 9 and 12. 

8.3.      Plaintiff Assistance in Perfection of Security.  Plaintiff shall take
all steps, and provide such assistance as Investor may reasonably request, for
the purpose of perfecting Investor’s security interests in the Collateral,
including the making of any filings or notifications necessary or desirable in
connection therewith.

8.4.      Insolvency Proceeding.  All Obligations of Plaintiff under the
Investment Facility Documents are intended to survive an Insolvency Proceeding
of Plaintiff.

SECTION 9.  TERMINATION BY INVESTOR.

9.1.      Investor Termination Events.  Each of the following shall be an
“Investor Termination Event” if it occurs for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:

(a)     Plaintiff fails to remit the Recoveries to Investor as and when required
hereunder;

(b)     Plaintiff fails to take any steps with reasonable promptness (and in any
event within fifteen days upon actual receipt of request from Investor) that are
reasonably requested by Investor to create or perfect any security interest of
Investor on any Collateral;

(c)     any representation or warranty made by Plaintiff in this Agreement, any
other Investment Facility Document or any certificate or other writing shall
have been false in any material respect when made;

(d)     any Material Adverse Change;

(e)     Plaintiff becomes subject to an Insolvency Proceeding not dismissed
within 10 days;

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(f)     Plaintiff fails to perform or comply with any covenant or agreement
contained in Sections 2.1.2 (Full Disclosure), 2.1.3 (No Impairment), 2.1.4
(Right to Bring the Litigation), 2.1.5 (Completeness and Accuracy), 3.1.2 (Duty
to Cooperate), 3.1.4 (Duty to Inform), 3.1.5 (No Change in Litigation Counsel or
IPR Counsel Without Investor Notice), 3.1.6 (Consultation Rights Regarding
Settlement), 3.1.7 (Good Faith Dealings) and 13.1 (Proceeds Account);

(g)     Plaintiff fails to perform or comply with any covenant or agreement
contained in Sections 2 and 3 (other than those listed in Section 9.1(f) of this
Agreement) or in any other Section of this Agreement or in any other Investment
Facility Document and such failure, if capable of being remedied, shall remain
unremedied for fifteen days after the earlier of the date on which Plaintiff
obtains actual knowledge of such failure or the date written notice of such
failure is given by Investor to Plaintiff;

(h)     an Event of Default under the Security Agreement;

(i)      any material provision of any Investment Facility Document ceases at
any time and for any reason (other than pursuant to the express terms thereof)
to be valid and binding on or enforceable against Plaintiff, or the validity or
enforceability thereof is contested by Plaintiff, or a proceeding is commenced
by Plaintiff or any Governmental Authority having jurisdiction over Plaintiff,
seeking to establish the invalidity or unenforceability thereof, or Plaintiff
denies in writing that it has any liability or obligation created under any
Investment Facility Document to Investor;

(j)      any Lien or security interest granted to Investor under the Investment
Facility Documents ceases for any reason (other than as a direct result of
Investor’s termination of, or failure to continue, its UCC-1 financing
statement) to be a valid, perfected or first priority security interest;

(k)     any event or condition shall occur which results in the acceleration of
the maturity of any Debt (other than under the Investment Documents) of the
Borrower which Debt or Debts in the aggregate are at least $1,000,000; or

(l)      the occurrence of a Change of Control.

9.2.      Investor Termination Event Procedure.  Investor may terminate this
Agreement upon delivery of written notice to Plaintiff in accordance with
Section 18.14 of this Agreement at any time after the occurrence of, and during
the continuation of, any of an “Investor Termination Event”).

9.3.      Waivers.  No waiver or course of dealing shall be established by (a)
the failure or delay of Investor to require strict performance by Plaintiff with
any terms of the Investment Facility Documents, or to exercise any rights or
remedies with respect to Collateral or otherwise; (b) the making of an
Investment during a Default (as defined in the Security Agreement), Investor
Termination Event or other failure to satisfy any conditions precedent; or (c)
acceptance by Investor of any payment or performance by Plaintiff under any
Investment Facility Documents in a manner other than that specified therein.

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9.4.      Failure to Disclose Information Related to Claim. 

9.4.1    Non-Material Disclosures.  Notwithstanding Section 9.1(f), failure to
disclose material information about a Claim will not constitute a breach of
Section 3.1.4 (Duty to Inform) if such information (a) supports or strengthens
the Litigation, or (b) was not known by Plaintiff on the Effective Date, and at
the time after the Effective Date it becomes known by Plaintiff, such
information would not have effected Investor’s decision to invest in the
Litigation had such information been known and disclosed by Plaintiff to
Investor prior to the Effective Date. 

9.4.2    Procedure to Adjudicate Disclosure.  If Investor disputes any assertion
by Plaintiff made pursuant to Section 9.4.1 that a failure by Plaintiff to
disclose information required by Section 3.1.4 does not constitute a material
breach of the Agreement, then the Parties shall submit such dispute to private,
confidential arbitration pursuant to JAMS’ Streamlined Arbitration Rules and
Procedures in accordance with Section 14.

9.5.      No Control of Litigation or Funded IPR Proceedings. Notwithstanding
the occurrence of an Investor Termination Event or the enforcement of remedies
in consequence thereof, in connection with their enforcement of Liens upon the
Collateral, Investor will not be authorized to become the owner of (by strict
foreclosure or otherwise), or to sell or otherwise transfer (by public sale or
otherwise) any right, title or interest in, any civil action, contested matter
or other Litigation that is an asset of Plaintiff’s, or to control the
prosecution or settlement of any such civil action, contested matter or other
Litigation unless and until abandoned in writing by Plaintiff.

9.6.      Retention of Documents.  Notwithstanding anything to the contrary
herein, following termination, Investor shall be entitled, in order to protect
its own interest in relation to this Agreement, to keep copies of the
documentation relating to the Litigation, the Claim, and the Funded IPR
Proceedings, including Confidential Information provided to it by Plaintiff,
Litigation Counsel or by IPR Counsel pursuant to instructions given to
Litigation Counsel or IPR Counsel by Plaintiff hereunder, provided, that it
adheres to the confidentiality requirements set forth in Section 4.

9.7.      Survival. Notwithstanding the foregoing, the following Sections of
this Agreement shall survive any termination of this Agreement and shall remain
in full force and effect: Section 2.3.3(Conflicts of Interest), Section 2.3.4
(No Waiver of Privilege), Section 3.1.4 (Duty to Inform), Section 3.1.6
(Consultation Rights Regarding Settlement), Section 4 (Common Interest and
Confidential Information), and Section 14 (Dispute Resolution).

SECTION 10.     TERMINATION BY PLAINTIFF.

10.1.    Plaintiff Termination Events.  Each of the following shall be a
“Plaintiff Termination Event” if it occurs for any reason whatsoever, whether
voluntary or involuntary, by operation of law or otherwise:

(a)     any representation or warranty made by Investor in this Agreement, any
other Investment Facility Document or any certificate or other writing shall
have been false in any material respect when made; or

26

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(b)     Investor fails to fund any Cost pursuant to the terms of this Agreement
and the Payment Procedures, and such failure shall remain unremedied for
forty-five days after the earlier of the date on which Plaintiff obtains actual
knowledge of such failure or the date written notice of such failure is given by
Plaintiff to Investor.

10.2.    Plaintiff Termination Procedure.  Plaintiff may terminate this
Agreement upon delivery of written notice to Investor in accordance with Section
18.3 of this Agreement at any time after the occurrence of, and during the
continuation of, any of a “Plaintiff Termination Event” (together with the
Investor Termination Events, the “Termination Events,” and each, a “Termination
Event”).

SECTION 11.     MUTUAL TERMINATION EVENT. 

11.1.    Mutual Termination.  This Agreement may be terminated by mutual
agreement between the Parties.

SECTION 12.     TERMINATION.

12.1.    Remedies Upon Investor Termination Event.  Upon an Investor Termination
Event, Investor may, in its sole discretion, immediately cease further funding
under this Agreement; provided, however, that Investor will be responsible to
pay all Costs otherwise due under this Agreement to the extent properly incurred
as of the date of such Termination Event. 

12.2.    Remedies Upon Plaintiff Termination Event.  Upon a Plaintiff
Termination Event, Investor nevertheless shall be entitled to receive from, and
only from, Recoveries the repayment of amounts it would have been entitled to
receive pursuant to Section 6.5 had the Conclusion of the Claim occurred on such
date.

12.3.    Payments to Investor Upon Termination Event.  Upon a Termination Event,
notwithstanding that it ceased funding, Investor shall be entitled to receive
from any Recoveries an amount equal to all Recoveries that would have been due
to Investor pursuant to Section 6.5 in the absence of such Termination
Event.  In the event Investor, in its sole discretion, determines that such
amounts are insufficient to compensate it for the consequences of such
Termination Event, Investor may seek additional remedies under the provisions of
Section 14.  After a Termination Event, Cash Recoveries shall be paid directly
into the Proceeds Account, and Recoveries in a form other than cash and cash
equivalents shall be made to Investor and distributed pursuant to Section 6.5.2.

12.4.    Remedies Cumulative.  All agreements, warranties, guaranties,
indemnities and other undertakings of either Party under the Investment Facility
Documents are cumulative and not in derogation of each other.  The rights and
remedies of either Party are cumulative, may be exercised at any time and from
time to time, concurrently or in any order, and are not exclusive of any other
rights or remedies available by agreement, by law, at equity or otherwise,
including remedies that either Party has under this Agreement pursuant to
Section 14.

12.5.    Non-Performance.  In no event shall any termination of this Agreement
relieve a Party from (a) liability for its breach or non-performance of its
obligations under this Agreement prior to the date of such termination, and (b)
obligations under this Agreement which by their terms

27

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expressly survive a Termination Event; provided, however, that, notwithstanding
anything to the contrary contained in this Agreement, any Termination Event
(including any automatic termination) may be waived in accordance with Section
18.8 of this Agreement, in which case such Termination Event so waived shall be
deemed not to have occurred, this Agreement consequently shall be deemed to
continue in full force and effect, and the rights and obligations of the Parties
shall be restored, subject to any condition of such waiver.

SECTION 13.     PROCEEDS ACCOUNT.

13.1.    Proceeds Account. Investor shall establish a deposit account in its own
name to be known as the “Proceeds Account.”  Only funds expressly required by
the terms of the Investment Facility Documents to deposited into the Proceeds
Account shall be so deposited, and no other funds shall be commingled in the
Proceeds Account.  Plaintiff shall direct that all Cash Recoveries be paid
directly into the Proceeds Account.  Investor shall be entitled to make
distributions from the Proceeds Account in accordance with Section 6.5 of this
Agreement.  Pursuant to the Litigation Counsel Fee Agreement, Plaintiff has
instructed and, if further instructions are needed, shall instruct, Litigation
Counsel to transfer any Cash Recoveries to the Proceeds Account within one
Business Day of the day on which any such Recoveries are received by Litigation
Counsel.  If any Cash Recoveries are paid directly to Plaintiff, then Plaintiff
shall transfer such Cash Recoveries to the Proceeds Account within one Business
Day of Plaintiff’s receipt of such Cash Recoveries.  Plaintiff shall further
provide that all such funds shall be held by Litigation Counsel or Plaintiff, as
the case may be, in trust for Investor, segregated from other funds of said
recipient until transferred to the Proceeds Account.

SECTION 14.      DISPUTE RESOLUTION.

14.1.    Procedure.  All disputes, controversies and Claim arising out of or
relating to this Agreement shall be resolved by the Parties pursuant to this
Section 14.

14.1.1    Informal Settlement Meeting. The Parties shall attempt in good faith
to resolve any dispute arising out of or relating to this Agreement promptly by
negotiation between executives who have authority to settle the controversy and
who are at a higher level of management than the persons with direct
responsibility for administration of this Agreement. Any Party may give the
other Party written notice of a dispute not resolved in the normal course of
business.  Within 14 days after delivery of such notice, the receiving Party
shall submit a written response.  The notice and response shall include with
reasonable particularity (a) a statement of each Party’s position and a summary
of arguments supporting that position, and (b) the name and title of the
executive who will represent the relevant Party.  Within 28 days after delivery
of any such notice, the executives of the Parties shall meet, telephonically or
at a mutually acceptable time and place.

14.1.2    Confidential.  All offers, promises, conduct and statements, whether
oral or written, made in the course of the negotiation by or on behalf of any of
the Parties are confidential, privileged and inadmissible for any purpose,
including impeachment, in arbitration or other proceeding involving the Parties,
provided that evidence that is otherwise admissible or discoverable shall not be
rendered inadmissible or non-discoverable as a result of its use in the
negotiation.

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14.1.3    Statute of Limitations.  All applicable statutes of limitation and
defenses based on the passage of time shall be tolled while the procedures
specified in Section 14 are pending and for 14 days thereafter.  The Parties
will take such action, if any, required to effectuate such tolling.

14.2.    Arbitration.  At any time after the passage of 45 days after delivery
of notice of dispute, any Party may initiate arbitration proceedings.  Any
dispute, controversy or claim arising out of or relating to this Agreement,
including the formation, interpretation, breach or termination thereof,
including whether the claims asserted are arbitrable, will be referred to and
finally determined through a private, confidential arbitration in accordance
with Rule 12 of the JAMS Streamlined Arbitration Rules.  The place of
arbitration will be New York, New York, unless the Parties otherwise agree in
writing.  The language to be used in the arbitral proceedings will be English.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. 

14.2.1    Arbitral Confidentiality.  The parties shall maintain the confidential
nature of the arbitration proceeding and the award, except as may be necessary
to prepare for or conduct the arbitration hearing on the merits, or except as
may be necessary in connection with a court application for a preliminary
remedy, a judicial challenge to an award or its enforcement or unless otherwise
required by law or judicial decision.

14.2.2    Damages.  The arbitrator shall be entitled to award damages to the
prevailing party, including damages for lost profits and interest as allowed
under New York law. 

14.2.3    Attorneys’ Fees.  The arbitrator shall have discretion to award to the
prevailing party, if any, the costs and attorneys’ fees reasonably incurred by
the prevailing party in connection with the arbitration.  If the arbitrator
determines a party to be the prevailing party under circumstances where the
prevailing party won on some but not all of the issues, the arbitrator may award
the prevailing party an appropriate percentage of the costs and attorneys’ fees
reasonably incurred by the prevailing party in connection with the issue(s) on
which the party prevailed in the arbitration.

14.2.4    Federal Arbitration Act. The Parties acknowledge that this Agreement
evidences a transaction involving interstate commerce.  Notwithstanding the
provision in this Agreement with respect to applicable substantive law, any
arbitration conducted pursuant to the terms of this Agreement shall be governed
by the Federal Arbitration Act (9 U.S.C. Secs. 1-16).

SECTION 15.     RIGHT OF FIRST REFUSAL. 

15.1.    Further Litigations.  Investor shall have the right of first refusal to
provide financing for any other litigation Plaintiff or its Affiliates may bring
against any other Person for infringement relating to, arising under, or in
connection with the technology that is the subject of this Agreement.

SECTION 16.     CONFIDENTIALITY.

16.1.    Information Disclosed Prior to the Effective Date.  The Parties
understand that all information relating to the Litigation and/or the Funded IPR
Proceedings provided to Investor

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by Plaintiff prior to the Effective Date has been provided pursuant to the
Pre-Effective Date NDA.  The Parties acknowledge and agree that, on the
Effective Date, the Parties’ communications shall be subject to the
confidentiality provisions set forth hereunder, and the Pre-Effective Date NDA
shall terminate and be of no further force and effect; provided, that, the
Parties’ confidentiality obligations set forth in the Pre-Effective Date NDA
shall survive its termination.

16.2.    Information Disclosed From and After the Effective Date.  The Parties
agree that all further communications from or on behalf of Plaintiff with
Investor concerning any non-public information relating to the Litigation and/or
the Funded IPR Proceedings, including information about litigation strategy,
settlement strategy, drafts of briefs and otherwise, shall be provided to
Investor and maintained by Investor in strict confidence and shall not be used
by Investor for any purpose other than in connection with its rights and
obligations under this Agreement; provided, however, that, under conditions of
confidentiality, Investor may disclose this Agreement to its investors and each
Party may disclose the Agreement to its lawyers, accountants and auditors;
provided, further, that if the Litigation and/or any Funded IPR Proceeding is
settled, the Parties may disclose the fact of the settlement, the settlement
amount and such other terms to the extent reasonably necessary and appropriate
to implement this Agreement.

16.3.    Confidentiality of Investor’s Information. Plaintiff agrees that all
information Investor has provided to Plaintiff concerning Investor’s business,
including the financial terms Investor offered to Plaintiff at any time, are
confidential and proprietary to Investor, and that Investor would suffer
irreparable harm if any such information were disclosed without Investor’s
express, written permission. Investor shall be entitled to relief, including
injunctive and other equitable relief, in the event of a breach of Investor’s
confidentiality. 

16.4.    Agreement Confidentiality.  

16.4.1    Strict Confidence.  The Parties shall maintain in strict confidence
the existence and terms of the Investment Facility Documents, and the Parties’
discussions, negotiations, and exchanges of the terms of the Investment Facility
Documents, in accordance with the terms of this Agreement; provided, however,
that the existence and terms of the Investment Facility Documents may be
disclosed: (a) to any affiliates, investors, prospective investors (including
lenders and prospective lenders), employees, directors, officers, agents,
advisors, counsel, auditors, representatives, officers and outside advisors
(collectively, the “Representatives”) of such Party (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such information and agree in writing to keep such information
confidential in accordance with this Section 16.4.1), (b) as permitted by
Section 16.4.2 of this Agreement, (c) to the extent required or requested by any
regulatory authority purporting to have jurisdiction over such Person or its
Representatives (including any self-regulatory authority), (d) to the extent
required by applicable laws or regulations, (e) in connection with the exercise
of any remedies hereunder or under any other Investment Facility Document or any
action or proceeding relating to this Agreement or any other Investment Facility
Document or the enforcement of rights hereunder or thereunder, or (f) subject to
an agreement containing provisions substantially the same as those of this
Section 16.4.1.  Each Party will be responsible for any breach of this Agreement
by its Representatives.

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16.4.2    Disclosure to Court.  In the event either Party is required by any
court of competent jurisdiction or any competent judicial, governmental,
supervisory, or regulatory entity or by subpoena to disclose any of the
existence and terms of the Investment Facility Documents or information related
thereto, each Party may disclose that portion of the existence and terms of the
Investment Facility Documents or information that, in the opinion of such
Party’s counsel, such Party is required to disclose.  Each Party agrees to
notify the other promptly in the event of a request for such disclosure or
receipt of a subpoena requesting such disclosure (unless such notification shall
be prohibited by applicable law or legal process) and cooperate with the other
Party in any attempt it may make to obtain a protective order or other
appropriate assurance prior to such disclosure.

SECTION 17.     INDEMNIFICATION.

17.1.    Plaintiff Indemnification.  Plaintiff hereby agrees to defend, protect,
indemnify and hold harmless Investor and its officers, directors and employees
and Investor’s attorneys, consultants and agents engaged at any time in respect
of the transactions contemplated by the Investment Facility Documents
(collectively, the “Indemnitees”) from and against any and all losses, damages,
liabilities, obligations, penalties, fees, reasonable costs and expenses
(including reasonable attorneys’ fees, costs and expenses) incurred by such
Indemnitees, from and after the Effective Date as a result of any claim,
litigation, investigation or proceeding relating to the transactions
contemplated by the Investment Facility Documents, whether or not any Indemnitee
is a party thereto (collectively, the “Indemnified Matters”); provided, however,
that Plaintiff shall not have any obligation to any Indemnitee under this
Section for any Indemnified Matters (i) caused by the gross negligence or
willful misconduct of such Indemnitee, as determined by a Final Order, or (ii)
that relates to or arises out of any action, suit or other proceeding instituted
by Plaintiff against Investor to enforce any Investment Facility Documents.

17.2.    Limitation of Liability for Certain Damages.  No Party shall assert,
and each Party hereby waives, any claim against the other Party and its
officers, directors and employees and such Party’s attorneys, consultants and
agents engaged at any time in respect of the transactions contemplated by this
Agreement, for Special Damages (as defined below), as opposed to general or
direct damages (on any theory of liability and whether or not the claim therefor
is based on contract, tort or duty imposed by any applicable legal requirement),
that arises out of, in connection with, as a result of, or in any way related
to, any Investment Facility Document or any agreement or instrument contemplated
hereby or thereby or referred to herein or therein, or any act or omission or
event occurring in connection therewith, and each party hereby waives, releases
and agrees not to sue upon any such claim for such Special Damages or seek to
recover any such Special Damages, whether or not accrued and whether or not
known or suspected to exist in its favor.  As used herein, the term “Special
Damages” means any special, indirect, consequential or punitive damages.

SECTION 18.     MISCELLANEOUS.

18.1.    Governing Law. This agreement shall be governed by the law of the State
of New York, exclusive of that jurisdiction’s conflicts of law principles.

31

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18.2.    Jury Trial Waiver. To the fullest extent permitted by Applicable Law,
each of the Parties waives the right to trial by jury in any proceeding or
dispute of any kind relating in any way to any Investment Facility Documents,
Obligations or Collateral, and each Party acknowledges that the foregoing waiver
is a material inducement to the other Party to enter into this Agreement.  Each
Party has reviewed the foregoing waiver with its legal counsel and has knowingly
and voluntarily waived its jury trial right following consultation with legal
counsel.  In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.

18.3.    Entire Agreement. This Agreement sets forth the entire agreement
between and among the Parties and fully supersedes any and all prior agreements
and understandings, written or oral, between the Parties pertaining to the
subject matter hereof. Except as explicitly set forth in this Agreement or any
other agreement contemplated herein, there are no representations, warranties,
promises or inducements, whether oral, written, expressed or implied, that in
any way affect or condition the validity of this Agreement or alter or
supplement its terms. Any statements, promises or inducements, whether made by
any Party or the agent of any Party, that are not contained in this Agreement
shall not be valid or binding. This Agreement shall have perpetual existence,
except as otherwise provided herein. 

18.4.    Informed Consent and Knowledge. The Parties expressly warrant and
represent that (a) they have had the benefit of the professional advice of
attorneys of their own choosing, (b) they have fully considered in consultation
with such counsel the terms of the Investment Facility Documents, including
those related to attorney-client privilege and work product issues and (c) they
are fully satisfied with such advice and have decided to enter into the
Investment Facility Documents.  The Parties also represent and acknowledge that,
in executing the Investment Facility Documents, they do not rely and have not
relied on any representation or statement made by the other Party or any of its
agents, representatives or attorneys with regard to the subject matter, basis or
effect of the Investment Facility Documents or otherwise, other than as
specifically stated in this Agreement.

18.5.    Expenses of the Parties.  Each Party shall bear its own expenses
incurred in the negotiation and execution of this Agreement.

18.6.    Cooperation. Each Party agrees to take such steps and to execute any
documents as may be reasonably necessary or proper to effectuate the purpose and
intent of this Agreement and to preserve its validity and enforceability.  In
the event that any action or proceeding of any type whatsoever is commenced or
prosecuted by any person not a Party hereto to invalidate, interpret or prevent
the validation, enforcement or carrying out of all or any of the provisions of
this Agreement, the Parties mutually agree, represent, warrant and covenant to
cooperate in opposing such action or proceeding.

18.7.    Waiver and Amendment.  No provision of or rights under this Agreement
may be waived or modified unless in writing and signed by the Party whose rights
are thereby waived or modified.  Waiver of any one provision herein shall not be
deemed to be a waiver of any other provision herein (whether similar or not),
nor shall such waiver constitute a continuing waiver unless otherwise expressly
so provided.  This Agreement may not be amended except through an instrument in
writing signed by the Parties hereto.

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18.8.    Construction.  The Investment Facility Documents are the jointly
drafted product of good faith arms’-length negotiations between the Parties with
the benefit of advice from their own respective legal counsel and each of them
has had sufficient opportunities to propose and negotiate changes to each
Investment Facility Document prior to its execution.  As such, no Party will
claim that any ambiguity in any Investment Facility Document shall be construed
against the other Party by reason of its identity as a drafter.

18.9.    Successors and Assigns.  Except as expressly provided in this
Agreement, neither this Agreement nor any of the rights and obligations set
forth herein shall be assigned by either Party without the prior written consent
of the other Party, which consent shall not be unreasonably withheld; provided,
that Investor may assign its rights and obligations hereunder to TRGP Capital
Partners, L.P. or an Affiliate thereof without the prior consent of Plaintiff.

18.10.  Severability.  If any provision of this Agreement is held invalid,
illegal or unenforceable, the Parties shall negotiate in good faith so as to
replace each invalid, illegal or unenforceable provision with a valid, legal and
enforceable provision which will, in effect, from an economic viewpoint, most
nearly and fairly approach the effect of the invalid, illegal or unenforceable
provision and the intent of the Parties in entering into this Agreement.

18.11.  Relationship of the Parties. 

18.11.1    Investor.  The Investor and certain of its Affiliates are engaged in
a capital provision and advisory business principally focused on assets
connected to litigation, arbitration or mediation.  The Investor and its
Affiliates are not law firms and are not engaged in the practice of law with
respect to any Claim or the Plaintiff.  The Plaintiff may not, and shall not,
rely on any of the Investor or their Affiliates for legal advice.

18.11.2    No Fiduciary Relationship.  Nothing in this Agreement or any other
Investment Document shall give rise to or be construed to create a fiduciary,
lawyer-client, lender-borrower, agency or other non-contractual relationship
between the Parties.

18.11.3    No Partnership.  Neither this Agreement nor any other Investment
Document shall create or be construed to create any joint venture, partnership
or any other type of affiliation between the Parties, nor does this Agreement or
any other Investment Document create a joint interest in any Claim for any
purpose, including for U.S. federal, state and local income tax purposes.

18.12.  No Rights of Third Parties.  The provisions of this Agreement are solely
for the benefit of the Parties, Litigation Counsel and IPR Counsel.  The Parties
hereby acknowledge that each of Litigation Counsel and IPR Counsel is a
third-party beneficiary of, and may enforce directly, the provisions of (a), in
the case of Litigation Counsel, Sections 5.6, and 6.5.1-6.5.3 of this Agreement
and (b) in the case of IPR Counsel, Section 5.5 of this Agreement.  The Parties
agree that, except as set forth in the prior sentence or otherwise expressly set
forth in this Agreement, there are no intended third-party beneficiaries to this
Agreement.

18.13.  Notice to Parties.  Unless another person is designated in writing for
receipt of notices hereunder, notices to the respective Parties shall be sent to
the following persons designated below.  All notices shall be sent by both email
and either (a) overnight mail or (b) certified mail.

33

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Notice to Plaintiff:

 

Netlist, Inc.

175 Technology

Irvine, CA 92618

Attn. Gail Sasaki

Chief Financial Officer

Direct: (949) 679-0113

Cell: (714) 337-2155

Fax: (949) 435-0031

Email: gsasaki@netlist.com

 

Notice to Investor:

 

TR Global Funding V, LLC

c/o TRGP Capital Management, LLC

777 3rd Avenue, 31st Floor

New York, New York 10017

Attention: Michael K. Rozen

Work: (212) 527-9605

Cell: (917) 414-1385

Email: mrozen@trgpcap.com

 

18.14.  Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same
instrument. This Agreement may be executed and delivered by email (via .pdf
file), which shall be deemed the same as originals.

 

34

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IN WITNESS WHEREOF, and intending to be legally bound hereby, each of the
undersigned Parties has approved and executed this Agreement as of the date
first written above.

 

 

PLAINTIFF

 

 

 

NETLIST, INC.

 

 

 

 

 

/s/ Gail Sasaki

 

By:     Gail Sasaki 

 

Title:  CFO, VP, Secretary

 

 

 

 

 

INVESTOR

 

 

 

TR GLOBAL FUNDING V, LLC

 

 

 

By:     TR Global Associates V, LLC,

 

its managing member

 

 

 

 

 

/s/ Michael K. Rozen

 

By:     Michael K. Rozen

 

Title:  Managing Member

 

 

 

Investment Agreement
Signature Page

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EXHIBIT A1
TO
INVESTMENT AGREEMENT

SVB Intercreditor Agreement

(Filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended July 1, 2017)

 

--------------------------------------------------------------------------------

 

 

EXHIBIT A2
TO
INVESTMENT AGREEMENT

SVIC Intercreditor Agreement

(Filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended July 1, 2017)

 

--------------------------------------------------------------------------------

 

 

EXHIBIT B1
TO
INVESTMENT AGREEMENT

Form of Litigation Counsel Investment Request

 

--------------------------------------------------------------------------------

 

 

[MINTZ LEVIN LETTERHEAD]

[Date:]

TR Global Funding V, LLC

c/o TRGP Capital Management, LLC

777 Third Avenue, 31st Floor

New York, NY  10017

E-Mail: Billing@trgpcap.com

Re:     Investment Request – Netlist, Inc.

Gentlemen:

The undersigned, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (“Mintz
Levin”), refers to the Investment Agreement, dated [●], 2017 (as from time to
time amended, the “Investment Agreement,” the terms defined therein being used
herein as therein defined), between Netlist, Inc. and TR Global Funding V, LLC
(together with its successors and assigns, “Investor”), and hereby gives you
notice, irrevocably, pursuant to [Section ‎6.1] [FOR INITIAL INVESTMENT]
[Section 6.2] [FOR SUBSEQUENT INVESTMENT] of the Investment Agreement, that the
undersigned hereby requests an Investment under the Investment Agreement, and in
that regard sets forth below the information relating to such Funding (the
“Proposed Investment”):

(i)     The amount of the Proposed Investment is $_____________.

(ii)    The account to which proceeds of the Proposed Borrowing should be
     deposited is __________.

Copies of all invoices supporting the Proposed Investment are attached hereto.

Very truly yours,

 

 

 

 

 

cc:  Netlist, Inc. (via e-mail)

 

--------------------------------------------------------------------------------

 

 

EXHIBIT B2
TO
INVESTMENT AGREEMENT

Form of Certification for Litigation Counsel Investment Request

 

--------------------------------------------------------------------------------

 

 

[NETLIST INC. LETTERHEAD]

[Date:]

TR Global Funding V, LLC

c/o TRGP Capital Management, LLC

777 Third Avenue, 31st Floor

New York, NY  10017

E-Mail: Billing@trgpcap.com

Re:     Investment Request – Netlist, Inc.

Gentlemen:

The undersigned, Netlist, Inc. (“Plaintiff”), refers to (1) the Investment
Agreement dated [●], 2017 (as from time to time amended, the “Investment
Agreement,” the terms defined therein being used herein as therein defined),
between Plaintiff and TR Global Funding V, LLC (together with its successors and
assigns, “Investor”), and (2) the Investment Request, dated [●], by Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (the “Mintz Levin Investment
Request”).  Plaintiff has reviewed the Mintz Levin Investment Request and copies
of all invoices supporting the Proposed Investment (as defined in the Mintz
Levin Investment Request).

The undersigned hereby certifies that the following statements are true on the
date hereof and will be true on the date of the Proposed Investment:

(A)     the representations and warranties contained in Section 2 of the
Investment Agreement are true and correct on the Effective Date and on and as of
the date hereof as if made on the date hereof (except to the extent any such
representation or warranty speaks as of any earlier date, in which case they
shall be true and correct as of such earlier date), and immediately after giving
effect to the Proposed Investment and to the application of the proceeds
therefrom; and

(B)     no event has occurred and is continuing, or would result from such
Proposed Investment or from the application of the proceeds therefrom, which
constitutes an Investor Termination Event under the Investment Agreement or
Event of Default under the Security Agreement.

This Mintz Levin Investment Request is also a representation and warranty by
Borrower that all other conditions specified in [Section ‎7.1 and Section 7.2]
[Section ‎7.2] will be satisfied on and as of the date of the Proposed
Investment.

 

--------------------------------------------------------------------------------

 

 

Very truly yours,

 

 

 

 

cc: Mintz Levin (via e-mail)

 

--------------------------------------------------------------------------------

 

 

EXHIBIT B3
TO
INVESTMENT AGREEMENT

Form of Plaintiff Investment Request

 

--------------------------------------------------------------------------------

 

 

[NETLIST, INC. LETTERHEAD]

[Date:]

TR Global Funding V, LLC

c/o TRGP Capital Management, LLC

777 Third Avenue, 31st Floor

New York, NY  10017

E-Mail: Billing@trgpcap.com

Re:     Investment Request – Netlist, Inc.

Gentlemen:

The undersigned, Netlist, Inc. (“Plaintiff”), refers to the Investment Agreement
dated [●], 2017 (as from time to time amended, the “Investment Agreement,” the
terms defined therein being used herein as therein defined), between Plaintiff
and TR Global Funding V, LLC (together with its successors and assigns,
“Investor”), and hereby gives you notice, irrevocably, pursuant to [Section
‎6.1] [FOR INITIAL INVESTMENT] [Section 6.2] [FOR SUBSEQUENT INVESTMENT] of the
Investment Agreement, that the undersigned hereby requests an Investment under
the Investment Agreement, and in that regard sets forth below the information
relating to such Funding (the “Proposed Investment”):

(ii)     The amount of the Proposed Investment is $_____________.

(ii)     The account to which proceeds of the Proposed Borrowing should be
     deposited is __________.

Copies of all invoices supporting the Proposed Investment are attached hereto.

The undersigned hereby certifies that the following statements are true on the
date hereof and will be true on the date of the Proposed Investment:

(A)     the representations and warranties contained in Section 2 of the
Investment Agreement are true and correct on the Effective Date and on and as of
the date hereof as if made on the date hereof (except to the extent any such
representation or warranty speaks as of any earlier date, in which case they
shall be true and correct as of such earlier date), and immediately after giving
effect to the Proposed Investment and to the application of the proceeds
therefrom; and

 

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(B)     no event has occurred and is continuing, or would result from such
Proposed Investment or from the application of the proceeds therefrom, which
constitutes an Investor Termination Event under the Investment Agreement or
Event of Default under the Security Agreement.

This Investment Request is a representation and warranty by Borrower that all
other conditions specified in [Section ‎7.1 and Section 7.2] [Section ‎7.2] will
be satisfied on and as of the date of the Proposed Investment.

Very truly yours,

 

 

 

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EXHIBIT C
TO
INVESTMENT AGREEMENT

Litigation Counsel Fee Agreement

[See Attached]

 

 

 

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Confidential Treatment Requested.  Omitted portions are marked with [*****] and
have been filed separately with the Securities and Exchange Commission.

[*****]

 

 

 

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EXHIBIT D
TO
INVESTMENT AGREEMENT

IPR Counsel Confirmations

[See Attached]

 

 

 

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Confidential Treatment Requested.  Omitted portions are marked with [*****] and
have been filed separately with the Securities and Exchange Commission.

[*****]

 

 

 

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EXHIBIT E
TO
INVESTMENT AGREEMENT

Payment Procedures

1.     Litigation Counsel.  

a.     Litigation Counsel shall remit all Investment Requests simultaneously to
Investor (by email addressed to Billing@trgpcap.com) and to Plaintiff. 

b.     The initial Investment Request shall be accompanied by invoices for all
Litigation Costs incurred during period from January 1, 2017 through the last
day of the month preceding the date of such Investment Request. 

c.     Each subsequent Investment Request shall be accompanied by invoices for
all Litigation Costs incurred during the month preceding the date of such
Investment Request.

d.     Plaintiff shall review the Litigation Counsel invoices and submit a
certification, in the form of Exhibit B2 to Investor within 10 Business
Days.  Investor shall have no obligation to fund the Investment Request prior to
receipt of such certification from Plaintiff.

d.     Investor shall pay the Litigation Costs included in each Investment
Request within 45 days of its receipt of such Investment Request. 

2.     IPR Counsel.

a.     Each IPR Counsel shall remit invoices for all IPR Costs incurred during
month preceding the date of such remission to Plaintiff and not to Investor. 

b.     Plaintiff shall submit Investment Requests for payment of IPR Costs
directly to Investor by email addressed to Billing@trgpcap.com.

c.     The initial Investment Request for payment of IPR Costs shall be
accompanied by invoices for all IPR Costs incurred during period from January 1,
2017 through the last day of the month preceding the date of such Investment
Request. 

d.     Each subsequent Investment Request shall be accompanied by invoices for
all IPR Costs incurred during the month preceding the date of such Investment
Request.

e.      Investor shall pay the IPR Costs included in each Investment Request
within 45 days of its receipt of such Investment Request. 

3.     Fees Generally.  Plaintiff shall review all invoices submitted to it and
use its best efforts to reconcile all fees, costs and expenses that are set
forth therein.  In the event that Plaintiff determines that there is a
discrepancy in such invoice (e.g., overbilling, non-compliance with the Investor
Billing Guidelines, mathematical error, etc.), it shall promptly notify Investor
and work

 

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in good faith with Investor to rectify such discrepancy with Litigation Counsel
or IPR Counsel (or the vendor or other Person on whose behalf Litigation Counsel
or IPR Counsel submitted such invoice).

 

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EXHIBIT F
TO
INVESTMENT AGREEMENT

Security Agreement

(Filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q
for the quarterly period ended July 1, 2017)

 

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SCHEDULE 2.1.10
TO
INVESTMENT AGREEMENT

Litigation Related To The Asserted Patents

·

The ‘185, the ‘434 and the ‘501 patents were the subject of a complaint filed by
Netlist on August 23, 2013, in Netlist, Inc. v. Smart Modular Technologies,
Inc., Civil Action 4:13-cv-05889, pending in the Northern District of
California.  On February 12, 2014, Netlist’s claims against Smart Modular were
dismissed pursuant to a stipulation based on Smart Modular’s sworn statement
that “SMART Modular does not and has not manufactured, used, sold, offered to
sell, or imported the ULLtraDIMM storage product” and that “SMART Modular did
not direct, finance, or otherwise participate in the development or production
of the ULLtraDIMM line of products.”  The case was consolidated with Diablo
Technologies, Inc. v. Netlist, Inc., Civil Action 4:13-cv-03901 on April 8,
2014.  On April 9, 2015, the district court granted a motion to stay the case
pending inter partes review.  The case is stayed.

·

The ‘185, the ‘434 and the ‘501 patents were also the subject of a declaratory
judgment complaint filed by Smart Modular Technologies, Inc. on August 23, 2013,
in Smart Modular Technologies, Inc. v. Netlist, Inc., Civil Action
4:13-cv-03916, previously pending in the Northern District of California.  The
case was dismissed on February 12, 2014, based on Smart Modular’s sworn
statement that “SMART Modular does not and has not manufactured, used, sold,
offered to sell, or imported the ULLtraDIMM storage product” and that “SMART
Modular did not direct, finance, or otherwise participate in the development or
production of the ULLtraDIMM line of products.”

·

The ‘185, the ‘434 and the ‘501 patents were also the subject of a declaratory
judgment complaint filed by Diablo Technologies, Inc. on August 23, 2013, in
Diablo Technologies, Inc. v. Netlist, Inc., Civil Action 4:13-cv-03901,
previously pending in the Northern District of California.  The case was
consolidated with Netlist, Inc. v. Smart Modular Technologies, Inc., Civil
Action 4:13-cv-05889 on April 8, 2014, which is stayed.

 

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SCHEDULE 2.1.11
TO
INVESTMENT AGREEMENT

Pending Litigation

·

See Schedule 2.1.10

·

The Litigation

·

Smart Modular v. Netlist, filed 9/13/12; Civil Action 2:12-cv-02319-MCE-EFB,
pending in the EDCA. 

·

Netlist v. Google, filed 12/4/09; Civil Action 4:09-cv-05718, pending in the
NDCA (currently stayed pending completion of inter partes reexaminations)

·

Netlist v. Inphi, filed 9/22/09; Civil Action 2:09-cv-06900, pending in the CDCA
(currently stayed pending completion of inter partes reexaminations)

 

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