QUEST PATENT RESEARCH CORPORATION Item 1.01. Entry into a Material Definitive Agreement
Summary of Agreements with
On
(i) Pursuant to the Purchase Agreement, QF3 agreed to make available to
the Company a financing facility of: (a) up to $4,000,000 for
operating expenses; (b) $3,300,000 to fund the cash portion of the
purchase price of a patent portfolio Harbor is to purchase from
Tower Semiconductor Ltd. ("Tower"); and (c) up to an additional
$25,000,000 for the acquisition of mutually agreed patent rights
that the Company would intend to monetize. In return, the Company
transferred to QF3 a right to receive a portion of net proceeds
generated from the monetization of those patents, including the
patent portfolio being acquired from Tower. The terms of the
Purchase Agreement are described under "QF3 Purchase Agreement."
(ii) Pursuant to the Security Agreement, the Company's obligations under
the Purchase Agreement with QF3 are secured by: (a) the value of
anything received from the monetization of the intellectual property
rights covered by the Security Agreement; (b) the patents (as
defined in the Security Agreement); (c) all general intangibles now
or hereafter arising from or related to the foregoing (a) and (b);
and (d) proceeds (including, without limitation, cash proceeds and
insurance proceeds) and products of the foregoing (a)-(c).
(iii) Pursuant to the Patent Security Agreement, the Company and Harbor
granted QF3 a first priority continuing security interest in and
lien upon Collateral covered by the Security Agreement. The Patent
Security Agreement is the instrument that is filed with the United
States Patent and Trademark Office and other government agencies to
perfect QF3's security interest in the Collateral.
The Company intends to use
QF3 Purchase Agreement
Pursuant to the Purchase Agreement, QF3 agreed to make available to us a
financing facility of: (a) up to
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Events of Default include any breach of the Investment Documents, including
non-payment, material misrepresentation, security interest compromise, criminal
indictment or felony conviction of one or our officers or directors, our current
chief executive no longer serving as our chief executive or as a director, the
occurrence of any Event of Default under the Restructure Agreement with
Under the agreement, QF3 may terminate capital advances other than in an Event of Default by giving written notice to us in which case QF3's interest in Net Proceeds shall be an amount equal to the greater of (i) the capital advanced to us plus interest at the prime rate, on the one hand, and (ii) Net Proceeds received by QF3 prior to the date of such termination.
Grant of Security Interests
Pursuant to the Security Agreement and Patent Security Agreement, payment of our obligations under the Purchase Agreement with QF3 are secured by (a) ) the value of anything received from the monetization of the intellectual property rights covered by the Security Agreement; (b) the patents (as defined in the Security Agreement); (c) all general intangibles now or hereafter arising from or related to the foregoing (a) and (b); and (d) proceeds (including, without limitation, cash proceeds and insurance proceeds) and products of the foregoing (a)-(c).
Intercreditor Agreement
In connection with the agreements with QF3, the Company, Harbor,
Item 9.01. Financial Statements and Exhibits
Exhibits. Number Description 99.1* Purchase Agreement datedMarch 12, 2023 among the Company, HarborIsland Dynamic LLC andQPRC Finance III LLC 99.2 Ex. A to Purchase Agreement - Security Agreement datedMarch 12, 2023 among theCompany, Harbor Island Dynamic LLC andQPRC Finance III LLC 99.3 Ex. B to Purchase Agreement - Patent Security Agreement datedMarch 12, 2023 among theCompany, Harbor Island Dynamic LLC andQPRC Finance III LLC Cover Page Interactive Data File (embedded within the Inline XBRL 104 document)
* Certain confidential information has been deleted from this Exhibit.
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