Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 1 of 36 Page ID
` #:1035
`
`Exhibit C
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 2 of 36 Page ID
` #:1036
`EX-10.30 4 exl0-30.htm
`
`Exhibit 10.30
`
`Portions of this exhibit marked [*] are requested to be treated confidentially.
`
`PROCEEDS INVESTMENT AGREEMENT
`
`Dated as of November 14, 2016
`
`by and between
`
`DOCUMENT SECURITY SYSTEMS, INC.
`
`and
`
`BRICKELL KEY INVESTMENTS LP
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493 l 5217002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002866
`
`Exhibit C, Page 46
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 3 of 36 Page ID
` #:1037
`
`This PROCEEDS INVESTMENT AGREEMENT, dated as of November 14, 2016 (this "Agreement"), between:
`
`7 DocUMENT SECURITY SYSTEMS, INc., a New York corporation with its principal place of business at 200 Canal View Blvd., Suite 300,
`Rochester, New York 14623 ("DSS"); and
`
`7
`
`BRICKELL KEY INVESTMENTS LP, a Delaware limited partnership, with its principal place of business at 11 New Street, St. Peter Port, Guernsey
`GYl 2PF ("INVESTOR")
`
`(each of DSS and INVESTOR is referred to herein individually, as a "Party" and, collectively, as the "Parties"). References made herein to
`"DSS" shall be limited to and interpreted to mean the parent company only, unless specifically stated otherwise.
`
`Preamble
`
`A DSS is seeking $13,500,000.00 (the "Commitment") to acquire the patent assets defined hereunder and set forth in Schedule A (the "Patent
`Assets"), to fund predetermined assertion programs originating from certain of those Patent Assets, and for Working Capital;
`
`B. INVESTOR invests directly and indirectly in claims, disputes, and litigation and arbitration claims;
`
`C. INVESTOR is prepared to make the Investment (as hereinafter defined) and, in consideration therefore, DSS is prepared to assign to INVESTOR
`the Patent Assets Proceeds (as hereinafter defined) subject to the terms and conditions set forth herein.
`
`D. The Parties do not intend to waive any attorney-client privilege or any immunities from discoverability of attorney work product or other
`privileged materials or communications. The Parties believe they have common interests in the pursuit of the Claims.
`
`NOW THEREFORE, for good and valuable consideration, it is agreed as follows:
`
`1. DEFINITIONS AND INTERPRETATION
`
`1.1 Definitions. In this Agreement the following terms shall have the meanings given below:
`
`"Additional Return" has the meaning set forth in Section 3.3(a)(ii).
`
`"Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with
`such Person.
`
`"Applicable Period" means the period starting on the date hereof and ending on November 30, 2031.
`
`"Assigned Rights" has the meaning set forth in Section 3.1.
`
`"Attorney Engagement Agreement" means the Engagement Agreement between an Attorney and DSS related to the Claims.
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493152 l 7002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002867
`
`Exhibit C, Page 47
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 4 of 36 Page ID
` #:1038
`
`"Attorneys" means Russ August & Kabat, located in Los Angeles, CA
`
`"Authorization" means an authorization, consent, approval, resolution, license, exemption, filing, notarization or registration.
`
`"Authorized" means authorized by any and all action or Authorization required to make the action contemplated thereby legally binding
`on a Party.
`
`"Business Day" means any day, excluding Saturday, Sunday, any day which is a legal holiday in New York, New York or a day on which
`banking institutions in such jurisdiction is authorized or required by law or other governmental action to close.
`
`"Claims Costs and Expenses" as used in this Agreement means costs, expenses and disbursements directly related to the Claims,
`including (without limitation) costs or expenses incurred in the negotiation and drafting of this Agreement, that are (i) validly incurred by DSS or
`paid or due and payable to third parties including Attorneys; (ii) documented by receipts and invoices paid by DSS or submitted to DSS in
`connection with the Claims; or (iii) incurred by an Attorney on behalf of DSS pursuant to an Attorney Engagement Agreement. Claims Costs and
`Expenses shall not include any internal costs or expenses of DSS, including but not limited to overhead or operating costs or expenses of it or its
`employees, but shall include only costs and expenses incurred by DSS and/or third parties (including travel and lodging expenses of DSS
`employees) in connection with prosecuting, enforcing or defending the Claims, such as (A) the fees and expenses of consultants, damages experts,
`other experts or technical advisors, and fact witnesses, or such fees and expenses paid directly by DSS, (B) travel and lodging expenses of third
`parties involved in the Claims, such as witnesses and experts, for purposes of holding Claims meetings, the preparation of witness statements and
`expert reports, attending legal proceedings relating to the Claims, and the like, and (C) duplicating, secretarial, stenographer, courier, translation,
`outsourced legal research, and similar services provided by Persons other than DSS.
`
`"Claims" means the cases and claims originating from predetermined assertion programs involving certain of the Patent Assets referenced
`in Schedule A to be asserted by DSS, or any of its Affiliates or by special purpose vehicle(s) against alleged infringers including, but not limited to,
`any and all related, remanded, appellate or future claims, cases, arbitrations or proceedings arising from or seeking similar recoveries or remedies.
`
`"Claims Proceeds Account" means the attorney escrow account in the name of DSS under the control of Russ August & Kabat
`designated for the purposes of receiving and holding the Patent Assets Proceeds pursuant to Section 3.2 and to be operated in accordance with such
`section.
`
`"Closing" means the closing of the transactions contemplated hereby pursuant to Section 5.2.
`
`2
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493 l 5217002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002868
`
`Exhibit C, Page 48
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 5 of 36 Page ID
` #:1039
`
`"Closing Date" means the date on which each of the conditions set forth in Sections 5.1 and 5.2 of this Agreement is satisfied or waived
`by the applicable Party.
`
`"Commitment" has the meaning set forth in Preamble A
`
`"Corrupt Practices Policies and Procedures" has the meaning set forth in Section 6. l(i).
`
`"Default" means any event or circumstance specified in Section 8 (Events of Default) that would (with the expiration of a grace period or
`the giving of notice) become an Event of Default. A Default is "continuing" if it has not been remedied or waived.
`
`"Defendant" means any of the defendants that is the subject of the Claims.
`
`"Disputes" has the meaning set forth in Section 9.3.
`
`"Dollar" or "$" means United States Dollars.
`
`"Funding Documents" means, collectively, this Agreement, the Perfection Documents, and any other document contemplated by this
`Agreement.
`
`"INVESTOR" mean Brickell Key Investments LP, as set forth in the Preamble.
`
`"INVESTOR's Return" has the meaning set forth in Section 3.3.
`
`"Investment" has the meaning set forth in Section 2.1.
`
`"IRR Return" means an amount that provides INVESTOR with a [*] percent ([*]%) internal rate of return on the Commitment.
`
`"Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the financial condition, operations,
`assets, business or properties of the Party in question or any of its Affiliates, taken as a whole, (b) a material impairment of the ability of the Party in
`question to perform any of its obligations under any material provision of any Funding Document, or (c) a material adverse effect upon the legality,
`validity, binding effect or enforceability against the Party in question of any material provision of any Funding Document.
`
`"Minimum Return" has the meaning set forth in Section 3.3(a)(i).
`
`"Multiple" means [*] times ([*]x) the Commitment.
`
`"Party" and "Parties" have the respective meanings set forth in the third introductory paragraph of this Agreement.
`
`"Patent Assets" means those patents and Pending Patent Applications set forth in Schedule A
`
`[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.
`
`3
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493 l 5217002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002869
`
`Exhibit C, Page 49
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 6 of 36 Page ID
` #:1040
`
`"Patent Assets Proceeds" means any and all monetary recoveries (whether through damages, recoveries, royalties, monies, lump-sum
`payments, upfront payments, settlement amounts, distribution of property, cash value of equities, license fees or other revenues or other assets or
`amounts) paid by a defendant or defendants or a third-party to DSS or any of its Affiliates, or to an Attorney on behalf of DSS, or recovered,
`received or receivable by DSS or any of its Affiliates, or to an Attorney on behalf of DSS, as a results of or in connection with the Patent Assets,
`whether by settlement, judgement, order, or any resolutions relating to or arising from such Patent Assets, plus any interest in connection therewith
`agreed to in a settlement or awarded in a judgment.
`
`"Pending Patent Applications" means any patent application, U.S. or foreign, that has been filed but not yet issued as a patent, including
`but not limited to, any provisional or nonprovisional (utility) application, including any continuations, continuations-in-part, divisionals, reissues,
`refilings, PCTs, or equivalent applications.
`
`"Perfection Documents" means those documents required to perfect the security interests provided for in Section 4 of this Agreement
`under the laws of New York and all other jurisdictions in which DSS has property or assets including, but not limited, those Perfection Documents
`listed in Annex E.
`
`"Person" means any individual, firm, company, corporation, partnership, limited liability company, government, state or agency of a state
`or any association, trust, joint venture or consortium (whether or not having separate legal personality).
`
`"Realization Date" means a date on which Patent Assets Proceeds are received by DSS in whole or in part.
`
`"Rights" means, with respect to any Person, such Person's rights, titles, claims, options, powers, privileges and interests.
`
`"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any Person or any other agreement
`or arrangement having a similar effect.
`
`"Security Interest" has the meaning set forth in Section 4.1.
`
`"Taxes" means any foreign, federal, state, local, municipal or other governmental taxes, duties, levies, fees, excises or tariffs, arising as a
`result of or in connection with any amounts or property received or paid under this Agreement, including, without limitation: (i) any state or local
`sales or use taxes; (ii) any import, value-added or consumption tax; (iii) any business transfer tax; (iv) any taxes imposed or based on or with respect
`to or measured by any net or gross income or receipts of any of the Parties; (v) any withholding or franchise taxes, taxes on doing business, gross
`receipts taxes or capital stock or property taxes; or (vi) any other tax now or hereafter imposed by any governmental or taxing authority on any
`aspect of this Agreement, the Patent Assets Proceeds, the Investment or the Assigned Rights, and "pre-Tax" shall mean before the deduction of any
`of the foregoing. Taxes shall also include any interest or penalties imposed on or with respect to the foregoing.
`
`4
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493 l 5217002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002870
`
`Exhibit C, Page 50
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 7 of 36 Page ID
` #:1041
`
`"Term" shall mean that period of time from the date of this Agreement through the date that all of DSS' obligations hereunder have been
`satisfied, not to exceed fifteen (15) years; provided however, that notwithstanding the expiration of the Term, DSS' obligation to pay INVESTOR
`its share of the Patent Assets Proceeds from Claims instituted during the Term shall survive the Term until such payment obligation is fully
`satisfied.
`
`"Warrants" mean those warrants to be issued in conjunction with the Investment substantially in the form attached hereto as Annex F.
`
`"Working Capital" as used herein shall mean moneys received by DSS under this Agreement which may be used by DSS in its discretion
`for any and all usual and customary business purposes relating to the parent company (DSS) or any of its Affiliates; provided that no amounts of the
`Investment shall be used to pay dividends, extraordinary compensation of DSS' and / or DSS' Affiliates' management, or other profit-sharing
`arrangements.
`
`1.2 Construction. Unless a contrary indication appears, the following shall apply in this Agreement:
`
`(a) A reference to this "Agreement" or to any other agreement or document refers to this Agreement or such other agreement or document,
`together with all annexes, exhibits and schedules hereto or thereto and all documents expressly incorporated herein or therein by reference, and such
`shall be a reference to this Agreement or such other agreement or document as amended, extended, modified, novated, restated or supplemented
`from time to time;
`
`(b) A term used in any other agreement or document referred to herein or in any notice given under or in connection with this Agreement
`or any other agreement or document has the same meaning in such other agreement, document or notice as defined in this Agreement;
`
`( c) Article, Section and Exhibit headings are for ease of reference only;
`
`( d) A provision of law is a reference to that provision as amended or re-enacted
`
`(e) A "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any
`governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organization;
`
`(f) A document expressed to be "on the approved terms" means a document, the terms, conditions and form of which have been agreed by
`the Parties and a copy of which has been identified as such and initialled by or on behalf of each of the Parties; and
`
`(g) A reference to Patent Assets Proceeds being "received" by DSS or any of its Affiliates or special purpose vehicles or the "receipt" by
`DSS or any of its Affiliates or special purpose vehicles of Patent Asset Proceeds, includes in each case the relevant amount being paid to or to the
`order of DSS or any of its Affiliates or special purpose vehicles, or being set off against or otherwise reducing any obligation of DSS or any of its
`Affiliates or special purpose vehicles.
`
`5
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493 l 5217002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002871
`
`Exhibit C, Page 51
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 8 of 36 Page ID
` #:1042
`
`2. THE INVESTMENT
`
`2.1 Investment. INVESTOR agrees, subject to the terms and conditions of this Agreement, to provide at the Closing the Commitment, which shall
`be considered an investment in the Patent Assets Proceeds of the Claims for the Applicable Period (the "Investment"), in its funding percentage set
`forth in Annex B. The Investment shall be funded in the amounts and on the dates to the accounts set forth in Annex C hereto. Any or all of the
`Investment shall be used solely for the uses set forth in Annex D.
`
`2.2 Acknowled~ements Re~ardin~ the Scope and Nature of the Investment. The Parties recognize and acknowledge that (i) INVESTOR is, through
`the Investment, purchasing the Assigned Rights from DSS and (ii) DSS is selling, assigning and transferring to INVESTOR an ownership interest in
`the Patent Assets Proceeds equal to the Assigned Rights. INVESTOR is not acquiring, and does not wish to acquire, ownership of the Claims or
`Patents. Nothing in this Agreement or in the course or manner of dealings between the Parties shall be construed to cause any of them to be
`considered to be a partnership, have formed a partnership, or be partners, members, agents or co-venturers of any kind pursuant to any applicable
`tax or non-tax laws or doctrines. Subject to the "INVESTOR's Return" and "Payment Priority of Proceeds" provisions of Sections 3.3 and 3.4 of
`this Agreement, if any provision of this Agreement is held unenforceable under applicable commercial law, the Investment shall be deemed to be a
`limited recourse debt obligation of DSS (secured only by the Claims, Patent Assets and Patents Assets Proceeds) under Article 9 of the Uniform
`Commercial Code and for such commercial law purposes and shall accrue interest at a [*] percent ([*]%) interest rate (or the maximum rate
`permitted by applicable law, if lower) compounded annually until paid in full solely from realized Patent Assets Proceeds in accordance with the
`mandates of Sections 3.3 and 3.4.
`
`2.3 Matter Monitorin~ / Privile~es and Immunities Preserved.
`
`(a) DSS agrees to provide to INVESTOR, and DSS agrees to direct Attorneys to provide to INVESTOR, information and documentation
`sufficient to monitor developments in the Claims, including without limitation, regular quarterly updates and information about material matters in
`the Claims, as outlined in Annex A attached hereto. INVESTOR may, but is not bound to, monitor or verify the application of any amount
`disbursed by or on behalf of DSS in respect of Claims Costs and Expenses pursuant to this Agreement, and any such monitoring shall at all times be
`in INVESTOR's discretion. In connection with such monitoring, DSS understands that INVESTOR may wish to review certain non-privileged
`information in connection with the Claims, and DSS consents to the providing of such information by the Attorneys; provided, however, that
`notwithstanding anything to the contrary contained herein, or in any other related agreement or document, in no event shall DSS be obligated to
`disclose any privileged information or information subject to a judicially determined protective order at any time or for any purpose.
`
`(b) The parties agree that they have a common interest in the subject matter and the outcome of the Claims. All information provided to
`INVESTOR hereunder is and shall at all times remain to the fullest extent under applicable law subject to all applicable privileges and immunities,
`including the attorney-client privilege, the common interest exception to privilege waiver doctrines, and the work-product immunity doctrine. No
`waiver of any such privilege or immunity shall be implied by the INVESTOR, its Affiliates or their respective representatives receiving, reviewing
`or examining information provided INVESTOR hereunder, it being the express intent of the parties to preserve intact to the fullest extent applicable,
`and not to waive in whole or in part, any and all privileges and immunities to which such information is, may be or may become subject to in the
`future.
`
`[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.
`
`6
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493 l 5217002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002872
`
`Exhibit C, Page 52
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 9 of 36 Page ID
` #:1043
`
`2.4 Future Needs. DSS shall not seek alternative or additional funding for the Claims until the entire amount of the Investment has been used. DSS
`agrees that INVESTOR shall have the first option, but no obligation, to provide further funding for the Claims on terms substantially similar to
`those set forth herein. If INVESTOR does not indicate its intent to make a further investment in the Claims within thirty (30) days following notice
`of such request by DSS, then DSS may seek additional funding from other third parties, provided, however, that any third party providing funding
`to DSS or any of its Affiliates and Subsidiaries shall not have any payment priority, interest or security interest or lien on the Patent Assets Proceeds
`that is prior in rights to those of INVESTOR hereunder. In addition, DSS hereby grants INVESTOR a thirty (30) day first refusal right to provide
`additional financing for the acquisition and / or assertion of additional claims and / or patent assets relating to LED technology including, but not
`limited to, foreign assertion programs on terms no less favorable for INVESTOR than those set forth herein.
`
`3. PROCEEDS
`
`3.1 Assi~nment of an Interest in the Patent Assets Proceeds. In consideration for the Investment and subject to the terms of this Agreement, DSS
`irrevocably assigns to INVESTOR on each Realization Date its Rights in and to the Patent Assets Proceeds realized by DSS or any of its Affiliates
`with respect to Claims completed or initiated during the Applicable Period, in an amount equal to the Minimum Return and the Additional Return as
`hereinafter defined (the "Assigned Rights").
`
`3.2 Proceeds Payments to Claims Proceeds Accounts.
`
`(a) Each of DSS, its Affiliates, special purpose vehicles, Attorneys and agents shall deposit directly into a Claims Proceeds Account all
`Patent Assets Proceeds until INVESTOR has received its Minimum Return. Thereafter, DSS shall make payments of Patent Assets Proceeds in
`accordance with the allocations set forth in Section 3.4. Payments by DSS shall be made via wire transfer to the bank account(s) designated by the
`recipients.
`
`(b) DSS, for itself and on behalf of its Attorneys, shall promptly notify INVESTOR of the receipt of Patent Assets Proceeds, and shall
`immediately thereafter make prompt payment of all amounts payable to INVESTOR under the terms of this Agreement, which in any case shall be
`paid no later than five (5) Business Days after deposit of same into the Claims Proceeds Account. The Parties hereto and their respective assignees
`and successors in interest agree that no payments of such Patent Assets Proceeds may be made except in conformance with this Agreement. DSS
`hereby (i) irrevocably instructs and will instruct Attorneys to pay Patent Assets Proceeds in accordance with the terms of this Agreement and (ii)
`covenants that it will not direct Attorneys to taken any action which conflicts with such irrevocable instructions.
`
`7
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493 l 5217002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002873
`
`Exhibit C, Page 53
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 10 of 36 Page ID
` #:1044
`
`3.3 INVESTOR'S Return. (a) Subject to Section 3.4 below, DSS shall pay INVESTOR, solely from realized Patent Assets Proceeds, a return (the
`"INVESTOR's Return") equal to sum of:
`
`i. either (A) the Multiple or (B) the IRR Return, whichever is greater (the "Minimum Return"); and
`
`ii. [*] percent ([*]%) of Patent Assets Proceeds net of the Minimum Return (the "Additional Return");
`
`(b) In addition, and as additional consideration for the Investment, DSS shall issue INVESTOR a warrant to purchase up to 750,000 shares
`of DSS common stock in accordance with the terms of a Warrant agreement to be executed by DSS on the date hereof.
`
`3.4 Payment Priority of Proceeds. INVESTOR shall have priority of payment regarding Patent Assets Proceeds as follows:
`
`Until payment in full of the Commitment amount
`Thereafter, until payment in full of the Minimum Return
`Thereafter, as Additional Return
`
`4. SECURITY INTEREST
`
`From Patent Assets Proceeds
`
`[*]%
`[*]%
`[*]%
`
`4.1 Security Interest. DSS grants and assigns to INVESTOR a senior security interest in the Claims, the Patent Assets and the Patent Assets
`Proceeds (whether now existing or hereafter from time to time arising or acquired pursuant to Section 2.4) in order to secure payment to
`INVESTOR of INVESTOR's Return, and DSS shall execute and deliver to INVESTOR at the Closing, and INVESTOR may file with necessary
`filing offices, the Perfection Documents for the purpose of perfecting INVESTOR's Rights in and to the Claims, Patent Assets and Patent Assets
`Proceeds as set forth above, and as notice to third parties that DSS has conveyed any interest it may have in or to such Claims, Patent Assets and
`Patent Assets Proceeds (the "Security Interest").
`
`5. CLOSING
`
`5.1 Conditions Precedent to the Investment. INVESTOR shall only be obligated to make the Investment if on the Closing Date:
`
`(a) The representations and warranties of DSS contained in Section 6.1 of this Agreement shall be true and accurate in all material respects;
`
`and
`
`(b) No Default shall have occurred and be continuing or would result from the transactions to be consummated at such time.
`
`[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.
`
`8
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493152 l 7002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 0000287 4
`
`Exhibit C, Page 54
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 11 of 36 Page ID
` #:1045
`
`5.2 Closin~. The obligations of the Parties hereunder shall become effective when and only when each of the following conditions is satisfied ( or
`waived in writing by the appropriate Party):
`
`(a) DSS shall have authorized in writing the contents and filing of the Perfection Documents; and
`
`(b) DSS shall have demonstrated to INVESTOR that it has contingent arrangements and a budget in place, acceptable to INVESTOR, to
`assure that Claims Costs and Expenses for asserting the Claims can be met by DSS either through the Investment, arrangements with Attorneys or
`otherwise.
`
`5.3 Delivery of Investment. Subject to the satisfaction of the conditions to Closing set forth in Sections 5.1 and 5.2, INVESTOR shall deliver the
`Investment to DSS as set forth in Annex C.
`
`6. REPRESENTATIONS, WARRANTIES AND INVESTMENT-RELATED DISCLOSURES
`
`6.1 DSS's Representations Warranties and Investment-Related Disclosures. DSS makes the representations and warranties set out in this Section
`6.1 to INVESTOR as of (i) the date of this Agreement and (ii) the Closing Date:
`
`(a) Or~anization and Good Standin~. DSS is a corporation organized, validly existing and in good standing under the laws of New York,
`and is Authorized to conduct business in New York and all other jurisdictions in which it conducts business or operations.
`
`(b) Authorization and Enforceability. DSS has the requisite power and authority to execute and deliver this Agreement and the other
`Funding Documents, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The
`execution, delivery and performance by DSS of this Agreement and the other Funding Documents and the consummation of the transactions
`contemplated hereby and thereby have been duly Authorized by all required action on the part of DSS.
`
`(c) Due Execution. This Agreement and the other Funding Documents have been duly executed and delivered by DSS, and, assuming the
`due authorization, execution and delivery hereof and thereof by INVESTOR, they constitute the valid and legally binding obligations of DSS
`enforceable in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
`other similar laws relating to creditors' rights generally and by general principles of equity.
`
`( d) Liti~ation. There is no claim, action, suit, proceeding, arbitration, investigation or inquiry pending before any governmental entity, or
`to the knowledge of DSS, threatened against DSS or any of its assets, that would have a Material Adverse Effect on DSS, except as set forth in
`Schedule 6. l(d) hereto. There is not in existence at present and, except in connection with the Claims, DSS is not aware of the potential for any
`order, judgment or decree of any court or other tribunal or any agency enjoining or requiring DSS to take any action of any kind or to which DSS or
`its assets are subject or bound, other than as set forth in Schedule 6.1 ( d) hereto.
`
`9
`
`https://www.sec.gov/Archives/edgar/data/771999/0001493152 l 7002906/exl 0-30.htm[6/l 9/2017 12:41 :09 PM]
`
`ss 02 00002875
`
`Exhibit C, Page 55
`
`

`

`Case 8:17-cv-00981-JVS-JCG Document 57-4 Filed 02/26/18 Page 12 of 36 Page ID
` #:1046
`
`(e) Title to Property· Absence of Liens and Encumbrances. As of the date of this Agreement and the Closing Date, DSS is solvent, and
`owns or will own and has or will have good and marketable title to the Patent Assets Proceeds, Claims, and Patent Assets free and clear of all liens
`and encumbrances or Security in favor of any Person, except for the preexisting third-party licenses to certain of the Patent Assets set forth in
`Schedule 6(e) and liens of the INVESTOR or Attorneys pursuant to Attorney Engagement Agreements.
`
`(f) No Conflicts. The execution, delivery and performance by DSS of this Agreement and the other Funding Documents in accordance
`with their respective terms do not and will not, after the giving of notice, or the lapse of time or both, or otherwise (i) conflict with, result in a
`breach of, or constitute a default under the charter or corporate documents of DSS or any law, statute, ordinance, rule or regulation, or any court or
`administrative order or process or any contract, agreement, arrangement, commitment or plan to which DSS is a party or by which DSS or its assets
`are bound, (ii) require the consent, waiver, approval, permit, license, clearance or authorization of, or any declaration or filing with, any court or
`public agency or other public authority, or (iii) require the consent of any Person under any material agreement, arrangement, or commitment of any
`nature.
`
`(g) Investment-related disclosures. DSS acknowledges that it has and will have superior knowledge regarding the Patent Assets and
`Claims, due at least in part to its involvement and familiarity with the facts underlying the Patent Assets and its eventual assertion of Claims relating
`thereto. Moreover, DSS acknowledges that it has and will have access to information regarding the Patent Assets and Claims that will not be
`available to INVESTOR. In connection with entering into this Agreement, DSS has provided (or has caused its Attorneys to provide) certain
`information to INVESTOR, including material factual information pertaining to the Patent Assets and potential Claims; provided, however, that
`DSS declares that DSS could not and has not provided any disclosure of information or documents protected by the attorney-client or work product
`privileges, and that the materials and disclosures that have been provided in the course of INVESTOR's due diligence (or that will be provided in
`the future in accordance with the terms of this Agreement) shall be bound by and in compliance with any applicable confidentiality agreements or
`protective orders relating to the enforcement of future Claims. All such information has been provided by DSS in consultation with its Attorneys
`and other counsel, and DSS hereby warrants that all such information was / is true, complete and accurate in all material respects as of the date it
`was provided and as of the Closing Date. DSS acknowledges that INVESTOR has relied on the accuracy and completeness of this information in
`agreeing to make the Investment. DSS confirms that it has disclosed all facts in its own possession that DSS reasonably believes could affect
`INVESTOR's decision to make the Investment. If DSS is or becomes aware of information that it reasonably believes could affect INVESTOR's
`decision to make the Investment and DSS is prohibited from disclosing such information because it is privileged or subject to a judicially
`determined protective order, then DSS shall disclose to INVESTOR the fact that such information exists along with DSS's assessment (after
`consultation with counsel) of such information and its effect, if any, on the claims and defenses, even if it cannot disclose the exact substance of that
`information.
`
`(h) Attorney En~a~ement A~reements.