10. COMMITMENTS AND CONTINGENCIES Legal Matters Intellectual Property Litigation In October 2012 the Company commenced new rounds of enforcement action with respect to its patent portfolio and to date has active a total of fourteen complaints in the U.S. District Court for the Southern District of California, asserting that products made and sold by the defendant companies infringe the Company?s U.S. patents covering the use of Flash-R portfolio. Commitment Related to Intellectual Property Legal Services In September 2012 the Company terminated the legal representation of Duane Morris LLP related to Flash-R? patent enforcement activities. The Company remains obligated to pay contingency fees on certain future royalty payments from previous matters. In September 2012 the Company engaged Handal and Associates (?Handal?) to provide IP legal services in connection with licensing and prosecuting claims of infringement of the Company?s flash memory patent portfolio (?Patent Enforcement Matters?). 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 equal to 33% of any license fee or settlement related to Patent Enforcement Matters, less prior retainers and expenses, and 40% if litigation is required and successful. The Company may terminate the representation at any time but would be obligated to pay fees and advances. Facility Lease In January 2012, the Company entered into a sixty-two month facility lease for its corporate office location, commencing May 1, 2012, for approximately 3,253 square feet at 16870 West Bernardo Drive, Suite 120, San Diego, California. The aggregate monthly payment is $5,693 excluding utilities and costs. The aggregate payments adjust annually with maximum payments totaling $7,157 in the forty-ninth through sixty-second months. Future lease commitm