I have a couple of comments, (IMO must be in there!) then a question.

Fact: DM's contract included a lien on the patents for "security, colateral, insurance, their value" and the list goes on.

Fact: in the event EDIG files BK, DM owns the patents.

Fact: in the event EDIG is bought out, DM is financially compensated and it is clearly written in the agreement what they will receive.

Fact: in the construction industry, and the lien laws vary some state by state, each contractor in the normal course of doing business is not protected unless they file a lien against the general contractor, and each month when they receive progress payments less the contractural retension clause which is typically 5%, they sign a release. The GC files his lien against the owner/lender. A performance bond is put up to the GC in the event a sub contr either fails to perform and is "fired"or the event a sub goes BK. It's a bit ore complicated than this because all of the product suppliers (that's what I was) files liens against the contr(s) they sell to. Each party to the contract has a "LIEN POSITION" in this chain.

Fact: a homeowner with a 1st mortgage lets say $300K and a home equity 2nd lets say $50K, the title to the property is the colateral, ....normally....and in the event of forclosure bank A is in 1st position and bank B in 2nd position.

The QUESTION: when law firm #2 comes in to play to handle cases where there's a DM conflict, be it a contigency or straight fee arrangement, can a 2nd position lien against the patents be filed? I'm thinking yes....what other colateral can EDIG offer? Money in the bank? I think not.

OK, what do you folks think?

Can there be a 2nd position lien or not?

One would think DM considered this at the onset...IMO.

Gil, ronran...others?