Pursuant to a partial contingent fee arrangement, the Company is paying a monthly retainer fee of $30,000 to Handal creditable against future contingency recoveries. Handal has agreed to advance related expenses excluding experts and prior art search firms. The Company has agreed to pay Handal a fee ranging from 33-40% of any license fee or settlement related to patent enforcement matters, less prior retainers and expenses. The Company may terminate the representation at any time but would be obligated to pay fees and advances.

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Handal has agreed to represent the Company in connection with claims against third parties that may infringe on e.Digital’s Nunchi Patent Portfolio, on a partial contingent fee basis. The Company will pay a monthly retainer fee of $22,500 so long as Handal is simultaneously litigating ten or fewer cases. Parties agree to meet and discuss an increase in the amount of the monthly retainer should the number of cases exceed ten. Monthly retainers paid are creditable against future contingency recoveries. The Company has agreed to reimburse Handal for pre-approved expenditures advanced on behalf of the Company and to pay Handal a fee of 40% of any net license fee or settlement, as defined in the Agreement, related to the Nunchi Patent Portfolio