Exhibit 10.1
Agreement Between Competitive Technologies, Inc. and
LawFinance Group, Inc.
This Agreement is made and entered into as of April 30, 2003 by
and between: Competitive Technologies, Inc., c/o Xxxxx X. XxXxxx, Xx.,
Executive Vice President and CFO, 0000 Xxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000 (hereafter, "SELLER"); and LawFinance Group, Inc.,
a California corporation, 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxxxxxx, Xxxxxxxxxx, 00000 (hereafter, "PURCHASER").
THE PARTIES AGREE, AS FOLLOWS:
1. Definitions. The following definitions shall apply to terms
used in this Agreement:
1.1. "Adverse Party" - refers to AMERICAN CYANAMID COMPANY and
any other or later added party(ies) in the Litigation, whose
interests are or may become adverse to Plaintiffs or SELLER.
1.2. "Agreement" - refers to this agreement, all documents
described herein as Exhibits and documents referred herein as
part of this agreement.
1.3. "Appeal" - refers to the appeal of the Lawsuit currently
pending in the UNITED STATES COURT OF APPEALS FOR THE FEDERAL
CIRCUIT and any further appeals related thereto.
1.4. "Assigned Portion" - refers to the sum of One Million Two
Hundred Ninety Thousand Dollars ($1,290,000.00), (U.S.).
1.5. "Assignment" - refers to the document entitled Assignment of
Litigation Proceeds/Acknowledgement of Assignment, attached
hereto as Assignment, Exhibit 2 and incorporated herein by this
reference, and all those other or related documents evidencing
and acknowledging assignment of an interest in the Judgment to
PURCHASER executed by SELLER and SELLER'S successors and assigns.
1.6. "Attorney" - refers to Xxxxxx X. Xxxxxx, Esq., Xxxxxxx Coie,
LLP, 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, Tel. No.
(000) 000-0000; Xxxxxxx X. Xxxxxxx, Esq., Technology
Transfer/Research Compliance Attorney, University of Colorado,
System Technology Transfer Office, 0000 Xxxxxxxxx Xxxxx, Xxxxx
000, 000 XXX; Xxxxxxx, XX 00000-0000; Tel No. (000) 000-0000 /
Fax No. (000) 000-0000; and such other attorneys as may be
employed, consulted, or engaged by Plaintiffs in connection with
the Appeal and the Litigation.
1.7. "Closing Date" - refers to that date on which the PURCHASER
remits the Purchase Price to SELLER.
1.8. "Court" - refers to the UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLORADO.
1.9. "Discount" - refers to fifty three and forty nine hundredths
percent (53.49%), which is the percentage by which the Assigned
Portion has been reduced to establish the Purchase Price.
1.10. "Judgment" - refers to: (i) the judgment for the
Plaintiffs entered by the Court in the Lawsuit, a copy of which
is attached to this Agreement, as Reference Documents Exhibit,
and incorporated herein by this reference; (ii) any later
amended, modified, augmented, supplemental or other judgment and
judgment on appeal; and (iii) any and all rights of Plaintiffs
and SELLER and their successors and assigns to Proceeds, as
defined below, from the Litigation, as defined below.
1.11. "Judgment Amount Assigned" - refers to the Assigned
Portion plus the interest accruing on the Judgment, allocable to
the Assigned Portion, commencing on the Closing Date May 19,
2003. Provided, however, if the Judgment is set aside and
remanded for Further Proceedings, and if interest is ultimately
awarded as to any claim for the period on or after the Closing
Date ("Accrual Period"), the "Judgment Amount Assigned" shall be
the Assigned Portion plus the portion of the interest awarded or
later accruing that is allocable to the Assigned Portion for the
Accrual Period. In addition, should SELLER be in default or
breach of this Agreement, there shall be added to the Judgment
Amount Assigned, all expenses, costs (including reasonable
attorneys fees), and the amount of all damages sustained by
PURCHASER on account of any such default or breach.
1.12. "Judgment Collateral" - refers to: (i) the bond or
other undertaking lodged with the Court to secure payment of the
Judgment, a copy of which is attached to this Agreement as
Reference Documents Exhibit, and incorporated herein; (ii) any
other bond or other undertaking, serving as collateral for the
Judgment (including all interest, income or proceeds accruing or
paid thereon); and (iii) any additional or substitute security,
guaranty, bond, surety, segregated account or other undertaking
given on account of the Judgment.
1.13. "Judgment Debtor(s)" - refers to the Adverse Party and
any affiliate, successor, surety or guarantor, as may assume or
be bound by the Judgment or other obligations to Plaintiffs or
SELLER arising out of the Litigation.
1.14. "Lawsuit" - refers to the case of The University of
Colorado Foundation, Inc., et al. v. American Cyanamid Company,
Civil Action No. 93-K-1657, in which the Judgment was entered by
the Court and all related post-trial proceedings.
1.15. "Litigation" - refers to the (i) Lawsuit; (ii) all
appellate proceedings, proceedings on remand, enforcement,
ancillary, parallel or alternate dispute resolution proceedings
and processes arising out of or related to the Lawsuit; (iii) any
other proceedings founded on the underlying facts giving rise to
the Lawsuit, in which SELLER or SELLER'S successor in interest is
a party; and (iv) all arrangements made with SELLER by or among
any Adverse Party having the effect of resolving any of SELLER'S
claims against any Adverse Party.
1.16. "Litigation Proceeds" - refers to all Proceeds of the
Litigation.
1.17. "Plaintiffs" - refers to THE UNIVERSITY OF COLORADO
FOUNDATION, INC. (hereafter, "UCFI"), THE UNIVERSITY OF COLORADO,
THE BOARD OF REGENTS OF THE UNIVERSITY OF COLORADO, XXXXXX X.
XXXXX, XXXX X. XXXXXXXX, and any other party(ies) in the
Litigation owning rights, title, and interest in and to the
Judgment and any Proceeds of the Litigation.
1.18. "Purchase Price" - refers to the sum of Six Hundred
Thousand Dollars ($600,000.00), (U.S.).
1.19. "Proceeds" - refers to cash, negotiable instruments,
contract rights, annuities, and any other rights to payment of
cash and transfer of things of value or other property.
1.20. "Receipt" - refers to the SELLER'S Acknowledgment of
Receipt of Purchase Price, the form of which is attached hereto
as Receipt, Exhibit 3, and incorporated herein by this reference.
1.21. "SELLER'S Attorney" - refers to Xxxx X. Xxxxxxxx, Vice
President and General Counsel, Competitive Technologies, Inc.,
0000 Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000, Tel No. (203) 255-
6044/Fax No. (000) 000-0000, and such other attorneys as may be
employed, consulted, or engaged by SELLER.
1.22. "SELLER'S Litigation Proceeds" - refers to all of
SELLER'S legal and/or equitable rights, title and interest in and
to the Litigation Proceeds thereof, whether in the nature of
ownership, lien, security interest or otherwise, on account of
SELLER's claims against the Adverse Party, Attorney's fees and
costs, or any other agreement with one or more SELLER.
2. Underlying Facts. SELLER represents and acknowledges the
following underlying facts as true and correct and on which
PURCHASER has placed material reliance in entering and which form
the factual foundation for this Agreement:
2.1. Plaintiffs are parties to the Lawsuit.
2.2. Xxxxxx X. Xxxxxx is Plaintiffs' attorney of record in the
Lawsuit.
2.3. Xxxxxxx X. Xxxxxxx is Plaintiffs' in-house attorney.
2.4. Plaintiffs have obtained the Judgment against the Adverse
Party(ies), and one or more Adverse Party(ies) has filed an
appeal of the Judgment.
2.5. At the time the Lawsuit was filed, SELLER was doing business
as UNIVERSITY PATENTS, INC. (hereafter, "UPI"). SELLER formally
changed its name to Competitive Technologies, Inc., in 1994.
2.6. By Agreement, dated August 1, 1993, between UCFI and UPI, a
copy of which is attached hereto as Exhibit A and incorporated
herein, Plaintiffs assigned to SELLER eighteen and two-tenths
percent (18.2%) of Plaintiffs' rights, title, and interest in and
to the entire Judgment and any and all Proceeds of the Litigation
after deduction of Attorney's contingent fee and out of pocket
expenses.
2.7. SELLER is entitled to receive approximately Six Million
Dollars ($6,000,000.00) (U.S.) of the Judgment, plus interest, by
virtue of the Agreement referenced in Section 2.6 above and
attached hereto as Exhibit A.
2.8. The following documents in the Lawsuit, provided to
PURCHASER, (i) are complete, accurate and genuine, (ii) remain in
full force and effect as of the date hereof, and to the best of
SELLER'S knowledge after due inquiry to Attorney and Plaintiffs,
have not been and (except as to issues that may be raised on
appeal), are not currently proposed by any party to be modified
or superseded (unless copy of the modifying, superceding or
amended document(s) or written notice thereof have been provided
to PURCHASER):
2.8.1. Reference Documents Exhibit, the Judgment and Bond,
Undertaking or other Judgment collateral, if any;
2.8.2. The Appellate Briefs, Notice(s) of Appeal and other
documents filed in the Appellate Court;
2.8.3. If all briefs have not been filed; all trial briefs and
related points and authorities filed in the Lawsuit; the
verdict, all post-trial motion papers and rulings, if any;
2.8.4. All other papers and documents supplied by Attorney
with respect to the Appeal and the Lawsuit.
2.9. SELLER hereby irrevocably instructs Attorney and SELLER's
Attorney to do the following: (i) provide all documents requested
by PURCHASER relating to the Appeal, the Litigation, settlement
of the Litigation, Attorney's or other persons' interest in or
claim against the Judgment and the subject matter of this
Agreement; (ii) when requested by PURCHASER, to provide factual
information within the knowledge of Plaintiffs, Attorney, or
SELLER's Attorney; and (iii) to perform all those action(s) to be
taken by Attorney or by SELLER's Attorney, as agent of SELLER,
provided for in this Agreement. Provided, however, nothing in
this Agreement shall: a) require the dissemination of information
to PURCHASER or other persons, which is subject to attorney-
client or other evidentiary privilege, unless it is done in a
manner that does not constitute a waiver of the applicable
privilege; or b) give PURCHASER any right to direct or control
Plaintiffs, Attorney, SELLER, or SELLER's Attorney in pursuing or
settlement of the Litigation. Any information disclosed to
PURCHASER shall be treated as confidential by PURCHASER and may
be used by PURCHASER solely for purposes related to or arising
out of this Agreement.
2.10. The transaction provided for in this agreement involves
substantial economic risk to PURCHASER.
3. Purposes.
3.1. SELLER is in need of funds to provide for SELLER'S
obligations and to accomplish SELLER'S current economic
objectives. The parties have entered into this Agreement for the
underlying purpose of providing SELLER the opportunity to receive
cash now on account of the Litigation, without regard to the
decision on the pending Appeal and the outcome of the Litigation.
PURCHASER acquires partial assignments of civil money judgments
during appeal and litigation proceeds for cash. Being a
purchase, PURCHASER is at risk as to the result of the court's
decision on the appeal and the outcome of the Litigation. In
arriving at the Purchase Price, the Litigation Proceeds to be
purchased under the Agreement have been discounted, taking into
account PURCHASER'S risks in buying a portion of the Litigation
Proceeds when an appeal has been taken, among other things.
3.2. PURCHASER has offered to pay SELLER the Purchase Price in
exchange for an assignment of the Litigation Proceeds in the
amount of the Judgment Amount Assigned. SELLER has accepted
PURCHASER'S offer and the parties intend to set forth their
contract in this Agreement. The Purchase Price and Judgment
Amount Assigned have been agreed to on an arms' length basis.
4. Nature Of Transaction. The parties recognize and
acknowledge that the rights granted PURCHASER will be purchased
and an ownership interest will be sold, transferred and assigned
by SELLER to PURCHASER. This transaction is not a loan. It is
not intended as collateral for any loan. Unless otherwise stated
in this Agreement, SELLER has no personal obligation to pay any
amount to PURCHASER.
5. Agreement To Sell And Buy/Non-Assumption By Purchaser.
5.1. Under and subject to the terms and conditions of this
Agreement and in exchange for the Purchase Price, SELLER agrees
to and, upon remittance of the Purchase Price by PURCHASER,
shall, sell, transfer, assign and deliver to PURCHASER, SELLER'S
legal and equitable rights, title and interest in and to the
SELLER'S Litigation Proceeds, the Judgment Collateral and all
Proceeds and or other rights and property SELLER has the right to
recover on account of the Litigation or that arise therefrom in
and up to the amount of the Judgment Amount Assigned. PURCHASER
agrees to buy all of said rights and interests from SELLER and to
pay the Purchase Price under and subject to the terms and
conditions of this Agreement.
5.2. In making this Agreement and purchasing a portion of
SELLER'S Litigation Proceeds, PURCHASER is not otherwise
acquiring or assuming any responsibility, obligation or liability
of SELLER or arising out of any rights or interests of SELLER
being purchased including, but not limited to, any duty or
obligation to the Judgment Debtor(s), the SELLER or any
obligation or expense with regard to the Litigation, the Appeal
or any retrial of the subject matter of the Litigation or issues
related thereto (including court costs or sanctions).
5.3. It is acknowledged and agreed that, this Agreement does not,
and shall not be interpreted so as to, affect any rights of
SELLER to make such claims against Attorney, as may be otherwise
permitted by law or rule of professional conduct. SELLER having
disclosed to PURCHASER the material provisions of the fee
agreement between Plaintiffs and Attorney, and in reliance
thereon by PURCHASER, it is understood that the agreement of
SELLER to permit the sale and assignment to PURCHASER a portion
of SELLER'S Litigation Proceeds for cash hereunder shall in no
way supersede, amend, modify, or otherwise detract from or expand
SELLER'S or Plaintiffs' rights or obligations under Attorney's
existing contract with Plaintiffs for legal representation.
6. Rights In Proceeds.
6.1. That portion of the Litigation Proceeds and the rights to
the Judgment Collateral and the Litigation assigned to PURCHASER
shall be satisfied and paid to PURCHASER in full, on a priority
basis, prior to any Proceeds or other consideration paid to or
received by SELLER, or any other assignee(s) of SELLER. Neither
SELLER nor any other assignee(s) of SELLER shall be entitled to
receive any recovery or any rights or interests on account of the
Litigation, unless and until the full Judgment Amount Assigned
has been received by PURCHASER.
6.2. PURCHASER'S rights in the Litigation Proceeds and Judgment
Collateral shall be satisfied at such time as PURCHASER has
received the full Judgment Amount Assigned.
6.3. The rights of SELLER to recover and receive amounts due
under the Judgment and Judgment Collateral and the Litigation, in
excess of the Judgment Amount Assigned, are and shall remain the
property of SELLER.
6.4. Notwithstanding Section 6.1, it is understood and
acknowledged that the rights purchased by PURCHASER hereunder are
subject to: the liens, if any, identified in Rights In Judgment,
Exhibit 1.a., or approved in writing by PURCHASER in accordance
with the provisions of this Agreement; and the rights of Attorney
to costs and attorneys' fees under the presently existing fee
agreement between Plaintiffs and Attorney, as described in Rights
In Judgment, Exhibit 1.d., herein.
7. Representations. SELLER hereby represents, warrants and
agrees with PURCHASER as follows:
7.1. The documents and information provided by SELLER to
PURCHASER, including but not limited to the Funding Application
and Reference Documents Exhibits, attached hereto, are accurate
and complete and, as of the date hereof, have not been superseded
or altered as to legal effect, validity or amount by the Court,
stipulation or otherwise. As of the date of this Agreement, no
action has been taken and, as of the Closing Date, no action
shall have been taken which has the effect of settling or
deciding the Appeal or which materially alters or changes the
legal validity, effect of or amounts stated in said documents and
information or the value of SELLER'S Litigation Proceeds, the
Judgment or Judgment Collateral.
7.2. The representations and warranties of SELLER contained in
this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as
though such representations and warranties had been made on and
as of that date. Notwithstanding any other provision of this
Agreement, should the case be settled or decided in whole or in
part or all representations or warranties not be fully true and
correct at the xxxx XXXXXX receives the Purchase Price, the sale
shall not close and PURCHASER'S rights under Section 20, below,
will apply. SELLER shall not be entitled to accept the Purchase
Price without first giving written notice to PURCHASER and
obtaining PURCHASER'S written consent.
7.3. Except as set forth in Rights In Judgment, Exhibit 1.c.,
SELLER has not assigned, transferred or given, as collateral to
any party other than PURCHASER, any right or interest of SELLER
in the Litigation, the Litigation Proceeds, the Judgment, the
Judgment Collateral, or any Proceeds thereof. SELLER shall not:
make any assignment or transfer or give, as collateral, any right
or beneficial interest of SELLER in the Litigation, the
Litigation Proceeds, the Judgment, the Judgment Collateral or any
Proceeds thereof or rights therein, or take any other action that
could have the effect of impairing or delaying PURCHASER'S
receipt of the Judgment Amount Assigned. It is intended and
understood that any assignment or transfer of right or beneficial
interest in the Litigation, the Litigation Proceeds, the
Judgment, the Judgment Collateral, or any Proceeds thereof or
rights therein shall be subordinate to and shall not adversely
affect any right or interest of PURCHASER in the Litigation, the
Litigation Proceeds, the Judgment, the Judgment Collateral or any
Proceeds thereof or rights therein. Except as disclosed by
SELLER in Rights In Judgment, Exhibit 1, or otherwise agreed to
by PURCHASER in writing, all Proceeds to which SELLER is entitled
on account of Litigation, the Litigation Proceeds, the Judgment
and the Judgment Collateral shall be paid first to PURCHASER,
until the full Judgment Amount Assigned has been paid to
PURCHASER.
7.4. Except as set forth in Rights In Judgment, Exhibit 1.a.,
there are no persons who have liens against amounts to which
SELLER may be entitled on account of the Litigation. SELLER
agrees to refrain from causing or permitting any other liens to
be placed against the Judgment, without the prior written consent
of PURCHASER, which consent may not be withheld unless a proposed
lien materially impairs the rights, value, priority or
collectability of the rights assigned to PURCHASER hereunder.
7.5. Except as set forth in Rights In Judgment, Exhibit 1.c.,
SELLER is not aware of any asserted or unasserted claims, liens
or judgments against the SELLER which would materially impair the
rights, value, priority or collectability of the rights assigned
to PURCHASER hereunder.
7.6. SELLER has the power, authority, right and competence to
enter into this Agreement, and does so willingly and freely. All
approvals, actions and consents required to authorize SELLER to
enter into this Agreement have been obtained and taken and, upon
execution by SELLER, this Agreement and all documents
contemplated to be signed by SELLER herein shall be valid and
binding obligations and undertakings of SELLER. Entering into
this Agreement and carrying out the actions provided for in this
Agreement and the Exhibits will not cause SELLER to be in breach
or violation of any other agreement or legal obligation to which
SELLER is a party or subject.
7.7. SELLER shall use best efforts and exercise good faith to
pursue SELLER'S rights in the Litigation, to bring the Litigation
to good faith settlement or final judgment; and to enforce
collection of all money and other Proceeds due on account of the
Litigation, including any settlement with Judgment Debtor(s).
7.8. SELLER has not and shall not, directly or indirectly, delay,
seek to prevent, impair, or frustrate the rights granted to
PURCHASER under this Agreement, or payment of the Judgment Amount
Assigned to PURCHASER, in any way.
7.9. SELLER shall make all reasonable, good faith efforts to
cause Plaintiffs to vigorously:
7.9.1. Defend the Judgment on Appeal and fully prosecute and
enforce all rights in the Judgment in both the Appeal and any
further proceedings ordered or permitted by the Court or
applicable law.
7.9.2. Pursue Plaintiffs' and SELLER'S underlying claims in
the Litigation, unless advised by Attorney or SELLER's Attorney
that pursuit of such claims would be fruitless or not
economically feasible, in light of the likely cost and risks in
doing so.
7.9.3. Pursue collection of the Judgment and promptly exercise
collection rights against the Judgment Collateral.
7.10. SELLER shall notify PURCHASER and keep PURCHASER
advised regarding: the name(s), address(es), telephone and fax
numbers of SELLER and of all legal counsel engaged to represent
Plaintiffs or SELLER in the Litigation; and the nature and scope
of representation of all such legal counsel and any change
therein.
7.11. SELLER shall give PURCHASER prompt written notice of
any material change in any of the information contained in the
representations and warranties or Exhibits to this Agreement.
8. Litigation Documentation. Unless otherwise requested in
writing by PURCHASER and subject to Section 2.4, SELLER shall,
and SELLER hereby instructs Attorney and SELLER's Attorney, as
SELLER'S agent, to promptly provide and continue to provide
PURCHASER with:
8.1. All future Court documents, including, but not limited to,
any Notices, Orders or Briefs presented to any party to the
Litigation or filed with any court.
8.2. All future correspondence, written proposals or agreements,
and notice of any oral proposals or agreements between SELLER,
Plaintiffs and Judgment Debtor(s) relating to the Litigation, the
Judgment Collateral, settlement, alternative dispute resolution
procedures, or collection and payment of the Judgment or the
Litigation.
8.3. Any proposed assignment by SELLER of any interest in the
Judgment, Judgment Collateral or rights in the Litigation, and
written notice of any other similar proposed action on the part
of SELLER. Unless waived in writing by PURCHASER, such proposed
assignment or notice shall be provided to PURCHASER not less than
7 days prior to SELLER making the proposed assignment or taking
the proposed action.
8.4. Notice of and documents relating to payment or receipt of
any money, consideration or other Proceeds by Plaintiffs,
Attorney, SELLER or SELLER's Attorney on account of the Judgment,
the Judgment Collateral or the Litigation, settlement or payment
of the Judgment, and all accountings of the application of said
money or other things of value received.
8.5. Information requested by PURCHASER relating to the status of
the Appeal, the Litigation, settlement, alternative dispute
resolution proceedings and any efforts to enforce the Judgment.
9. Assignment Of Litigation Proceeds. It is understood and
agreed that the Assignment evidences the transfer of the Judgment
Amount Assigned and PURCHASER'S right to receive payment
hereunder and shall remain in full force and effect until the
entire Judgment Amount Assigned has been received by PURCHASER.
Upon PURCHASER'S remittance of the Purchase Price to SELLER,
PURCHASER shall be the sole and absolute owner of the first
Litigation Proceeds which SELLER is entitled to collect or
receive on account of the Judgment, the Judgment Collateral and
the Litigation, up to the full Judgment Amount Assigned, whether
by way of enforcement of the Judgment, compromise and settlement
of SELLER'S rights arising out of the Judgment and Litigation, or
otherwise. As collateral for and to secure SELLER'S
representations, warranties, undertaking and agreements made or
given under this Agreement, SELLER hereby grants PURCHASER a
security interest in all of SELLER'S Litigation Proceeds and
interests in the Judgment, the Judgment Collateral and the
Litigation not otherwise assigned and transferred to PURCHASER
under this Agreement (the "Collateral"). This shall constitute a
security agreement between SELLER and PURCHASER for that purpose.
It shall not in any way affect or impair any rights or fee lien
of Attorney in and to the Judgment, the Judgment Collateral, or
the Litigation, absent an express written agreement with Attorney
to the contrary. SELLER shall execute, and PURCHASER may file,
one or more UCC-1 Financing Statement Forms for the purpose of
perfecting PURCHASER'S security interest in the Collateral, and
as notice to third parties that SELLER has conveyed an interest
in the SELLER'S Litigation Proceeds.
10. Acknowledgment/Assignment Of Litigation Proceeds. It is
understood and agreed that the Assignment is intended to serve as
evidence and notice of the Assignment. Upon PURCHASER'S
remittance of the Purchase Price, PURCHASER is fully authorized
to and shall insert the Closing Date on the Assignment. The
Assignment may be filed by PURCHASER with the Court, on or after
the Closing Date, pursuant to the provisions of applicable laws,
court rules or local custom, and served upon such persons as may
be deemed necessary by PURCHASER to perfect and give effect to
PURCHASER'S ownership of and right to receive the Judgment Amount
Assigned.
11. Acknowledgment Of Receipt Of Purchase Price. The
Acknowledgment of Receipt of Purchase Price (hereafter the
"Receipt") is attached hereto as Receipt, Exhibit 3 and
incorporated herein by this reference. SELLER agrees to deliver
the signed and dated Receipt to PURCHASER immediately upon
SELLER'S receipt of the Purchase Price.
12. Breach. SELLER understands and acknowledges that PURCHASER
is relying on all of SELLER'S agreements, representations and
warranties in entering into this Agreement and in purchasing the
Judgment Amount Assigned. The parties agree that, if SELLER
breaches any material part of this Agreement or if any of
SELLER'S representations or warranties fail to be correct in any
respect, SELLER will be in breach of this Agreement.
12.1. If SELLER breaches any material part of this Agreement,
and SELLER fails to cure said breach within fifteen (15) days of
PURCHASER'S notice to SELLER of such breach, PURCHASER is granted
the right to immediately recover from the SELLER all amounts due
under this Agreement and the Judgment Amount Assigned. This
right of PURCHASER is in addition to any other rights to which
PURCHASER is entitled by law because of any breach by SELLER,
including PURCHASER'S rights in and to Collateral given by
SELLER. Any breach or failure of the representations and
warranties of Section 7.2, above, shall not be subject to cure
and SELLER shall have no rights to receive any payment absent the
expressed written approval of PURCHASER.
12.2. Should SELLER fail to adhere to the representations and
warranties set forth in Section 7.9, above, then PURCHASER is
fully authorized and permitted, but not obligated, on behalf of
SELLER and PURCHASER and subject always to the rights and
informed consent of SELLER to engage a new Attorney, to pursue
any of SELLER's rights with respect to the Appeal and prosecute,
enforce and resolve the rights of SELLER, and PURCHASER in
furtherance of the Appeal and the Litigation, to the fullest
extent as if done by the SELLER. SELLER hereby appoints
PURCHASER as SELLER'S attorney-in-fact, in the event of such
default or breach under this sub-section, to do all things and
take all actions in its own name and as attorney-in-fact for
SELLER to pursue such actions and to engage such legal counsel
for the account of SELLER and PURCHASER, subject always to the
rights and informed consent of the SELLER, as PURCHASER shall, in
its good faith judgment, deem to be in the best interests of the
PURCHASER, SELLER and Attorney. In such event, any amounts
recovered on account of the SELLER'S interests in the SELLER'S
Litigation Proceeds, shall be applied: (i) first, to recoup all
fees and expenses incurred in exercise of said authority
(including attorneys fees and costs); (ii) next, to PURCHASER on
account of the Judgment Amount Assigned; (iii) the balance to
SELLER, as SELLER'S interests may appear and as SELLER may
direct.
13. Indemnification.
13.1. PURCHASER agrees to indemnify, defend and hold SELLER
harmless from and against any and all losses, costs, damages,
claims and expenses (including reasonable attorneys' fees) which
SELLER may sustain at any time by reason of: (a) any debt,
liability or obligation incurred by PURCHASER, (b) any liability
or obligation of any kind for prosecution or defense thereof, or
(c) the breach of, inaccuracy of, or failure to comply with, or
the existence of any facts resulting in the inaccuracy of, any of
the warranties, representations, or covenants of PURCHASER
contained in this Agreement or in any Exhibits or documents
delivered pursuant hereto or in connection with the subject
matter of this Agreement.
13.2. SELLER agrees to indemnify, defend and hold PURCHASER
harmless from and against any and all losses, costs, damages,
claims and expenses (including reasonable attorneys' fees) which
PURCHASER may sustain at any time by reason of: (a) any debt,
liability or obligation incurred by SELLER, (b) any liability or
obligation of any kind for prosecution or defense of such debt,
liability or obligation incurred by SELLER, and (c) the breach
of, inaccuracy of, or failure to comply with, or the existence of
any facts resulting in the inaccuracy of, any of the warranties,
representations, or covenants of SELLER contained in this
Agreement or in any Exhibits or documents delivered pursuant
hereto or in connection with the subject matter of this
Agreement.
13.3. Any party who receives notice of a claim for which it
will seek indemnification ("Indemnified Party") hereunder shall
promptly notify the party from which the Indemnified Party will
seek indemnification ("Indemnifying Party") of such claim in
writing. The Indemnifying Party shall have the right to assume
the defense of such action at its cost with counsel reasonably
satisfactory to the Indemnified Party. The Indemnified Party
shall have the right to participate in such defense with its own
counsel at its cost.
14. Attorney - Client Relationship.
14.1. Nothing in this Agreement is intended to require action
that may impair the attorney-client privilege, or other
evidentiary privilege as may exist in favor of SELLER in
connection with the Litigation. This Agreement shall not be
interpreted or enforced in a manner that would have the effect of
loss of any such privilege. If redacting portions of any
writing, required to be given PURCHASER in this Agreement, would
avoid waiver or loss of any such privilege: the writing shall be
redacted by Attorney or SELLER's Attorney so as to avoid waiver
or loss of privilege and provided to PURCHASER. PURCHASER shall
be notified that the writing was redacted for that purpose and
shall be advised of the general subject matter of the redacted
material. Further, nothing in this Agreement is intended to
prevent or impair Plaintiffs', Attorney's, SELLER'S, and SELLER's
Attorney's ability to vigorously conduct the Litigation in such
manner as they deem in good faith and in their sole discretion
will benefit Plaintiffs and SELLER, without interference from
PURCHASER. Provided, however, nothing shall be interpreted as
restricting PURCHASER'S exercise of its discretion in analysis of
the results of its due diligence under Section 16, below, or
enforcement of PURCHASER'S rights under this Agreement and the
Assignment, in the event of a breach of the terms of this
Agreement.
14.2. Should a dispute arise at any time between Plaintiffs,
SELLER, and Attorney, or any of them, regarding payment or
application of any sums recovered on the Judgment, which dispute
may delay, reduce or otherwise affect payment or retention of the
Judgment Amount Assigned to PURCHASER, SELLER shall promptly
notify PURCHASER in writing and shall nevertheless immediately
pay, on a pro rata basis, any undisputed portion of the sums
recovered. The Notice shall state the facts of the dispute in
order that PURCHASER may fully assert its rights. In order to
allow PURCHASER to become fully aware of the dispute, SELLER
hereby authorizes Attorney and SELLER's Attorney to provide
PURCHASER all facts and information related to the dispute.
Notwithstanding any other provisions of this Agreement, including
Section 14.1, above, SELLER expressly waives attorney-client
privilege as to information requested by PURCHASER under these
limited circumstances and for this limited purpose. Should the
dispute delay payment of any amount otherwise due or payable to
PURCHASER, all amounts due or payable to PURCHASER shall begin to
bear interest at the rate of 18% per annum, or such lesser rate
as shall be the maximum rate permitted by applicable law, from
the date any amounts are paid or payable by the Adverse Party
until said sums due or payable to PURCHASER have been paid in
full.
15. Cooperation. SELLER will, and will so instruct Attorney and
SELLER's Attorney to, keep PURCHASER fully advised about and will
cooperate and consult with PURCHASER in connection with, any and
all matters relating to the Appeal and the Litigation including,
but not limited to, matters with regard to Plaintiffs', SELLER'S,
and Attorney's legal positions, briefs and oral arguments,
settlement negotiations, alternate dispute resolution
proceedings, and engagement of appellate or other counsel.
16. Contingencies. This Agreement is expressly conditioned upon
PURCHASER conducting and completing its due diligence with regard
to the subject matter of this Agreement and providing SELLER with
PURCHASER'S written approval of its intent to complete the
purchase. PURCHASER'S approval and intention to complete the
purchase shall be determined in PURCHASER'S sole and absolute
discretion. PURCHASER shall have fifteen (15) days from the
receipt of all documents and Exhibits, properly signed and
witnessed, or three (3) business days of PURCHASER's receipt of
the opinion letter referenced in Section 17, whichever is later,
but not later than thirty (30) days, to provide SELLER and
SELLER's Attorney with written approval of its intention to
complete the purchase.
17. Purchaser's Due Diligence/Seller's Payment of Due Diligence
Costs. SELLER understands that PURCHASER will incur costs and
expenses in connection with the completion of PURCHASER'S due
diligence referred to herein above. It is understood that upon
receipt of the signed Agreement, PURCHASER will incur expenses
for a credit and liabilities investigation and report. It is
further understood that upon receipt of the signed Agreement,
PURCHASER will engage an attorney, for the purpose of reviewing
the Lawsuit and advising PURCHASER as part of PURCHASER'S due
diligence. At the xxxx XXXXXX returns the signed Agreement to
PURCHASER, SELLER will pay PURCHASER the sum of $10,000.00 to be
applied against PURCHASER'S due diligence costs and expenses. It
is acknowledged that any analysis or opinion received by
PURCHASER from legal counsel engaged to review and evaluate the
Litigation: (i) is legal advice rendered solely for PURCHASER'S
benefit in completing its due diligence; (ii) is subject to
certain privileges in favor of PURCHASER and said attorney; (iii)
and in no way constitutes legal advice to, nor may it be relied
upon by Plaintiffs, Attorney, SELLER or SELLER's Attorney, should
information relating to said attorneys' advice be made available
to Plaintiffs, Attorney, SELLER, or SELLER's Attorney, absent
prior written consent from the individual attorney engaged by
PURCHASER.
18. Delivery By Purchaser/Closing. PURCHASER shall pay SELLER
the Purchase Price (less any amounts deductible therefrom) within
ten (10) business days after it has completed its due diligence
and approved of and expressed its intention, in writing, to
complete the purchase. Except as hereafter provided, upon
PURCHASER'S tender of the Purchase Price to SELLER: the
PURCHASER'S rights in the SELLER'S Litigation Proceeds, the
Judgment Proceeds, the Judgment Amount Assigned, and the
Litigation, and all of PURCHASER'S rights, as provided for in
this Agreement, shall be fully vested; SELLER'S assignment shall
be absolute and irrevocable by SELLER; and PURCHASER shall be
entitled to file with the Court and serve the Exhibit(s)
evidencing SELLER'S Assignment and the form UCC-1 giving effect
to the parties agreements hereunder.
19. Miscellaneous.
19.1. Entire Agreement. This Agreement, including the Exhibits
hereto, sets forth the entire agreement and understanding between
the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of
every kind and nature between them. No party hereto shall be bound
by any term, condition, warranty or representation other than as
expressly provided for in this Agreement, or as may be on a date on
or after to the date hereof duly set forth in writing signed by the
party hereto which is to be bound thereby. This Agreement shall
not be changed, modified or amended except by a writing dated and
signed by the party to be charged.
19.2. Governing Law. This Agreement and its validity,
construction and performance shall be governed in all respects by
the laws of the State of California, without giving effect to
principles of conflicts of laws.
19.3. Severability. If any provision of this Agreement or the
application of any provision hereof to any person or circumstance
is held invalid, the remainder of this Agreement and the
application of such provision to other persons or circumstances
shall not be affected unless the provision held invalid shall
substantially impair the benefits of the remaining portions of this
Agreement.
19.4. Benefits of Parties. This Agreement shall be binding upon,
and inure to the benefit of the parties hereto, individually and to
each and all their agents, attorneys, beneficiaries,
representatives and its respective successors, spouses, heirs,
legal representatives and assigns. No assignments by any party
shall relieve the assigning party from any obligation, duty,
representation, warranty or agreement absent an express written
release given by the non-assigning party.
19.5. Headings Singular/Plural. The headings in the section of
this Agreement are inserted for convenience or reference only and
shall not constitute a part hereof. Where context so permits, the
singular form of a word shall include the plural and the plural
form shall include the singular.
19.6. Notices. All notices, requests, demands and other
communications provided for by this Agreement shall be in writing
and, unless otherwise specifically provided for herein, shall be
deemed to have been given upon transmission by telecopy, with
receipt confirmed, upon hand delivery or delivery by air freight or
courier service, or three (3) days after the time when deposited
with the United States Postal Service, enclosed in a registered,
certified or other postage-paid envelope, addressed to the address
of the parties stated below or to such changed address as such
party may have fixed by notice:
IF TO SELLER: IF TO PURCHASER:
Competitive Technologies, Inc. LawFinance Group, Inc.
c/o Xxxx X. Xxxxxxxx, Esq. 0000 Xxxxxxx Xxxxxx, Xxxxx 000
Vice President & General Counsel Xxx Xxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxx Fax: (000) 000-0000/
Tel.: (000) 000-0000
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000/
Tel.: (000) 000-0000
provided, however, that any such change of address shall be
effective only upon receipt.
19.6 Attorney's Fees. In the event that any action or proceeding
is brought to enforce or interpret any provision, covenant or
condition contained in the Agreement on the part of PURCHASER or
SELLER, the prevailing party in such action or proceeding shall be
entitled to recover from the party not prevailing its expenses
therein, including reasonable attorneys' fees and allowable costs.
19.7. Disputes Between The Parties. At the request of any party,
any dispute between the parties arising out of the transaction
provided for in this Agreement, and the Exhibits to this Agreement,
shall be submitted to final and binding arbitration in San
Francisco, California, by a three (3) member panel, under the
Commercial Arbitration Rules of the American Arbitration
Association then in effect. The Association shall be requested to
provide a panel of prospective arbitrators consisting of persons
experienced in business law matters. Prior to appointment of the
arbitrator, either party may commence judicial proceedings, in
either the state or federal court having jurisdiction over the
party against whom relief is sought, to obtain preliminary relief,
including injunctive relief, for the purposes of: (i) enforcement
of this arbitration provision; (ii) obtaining appointment of
arbitrator(s); (iii) preserving the status quo; (iv) preventing the
disbursement by any person of disputed funds; and (v) preserving
and protecting the rights of either party pending the outcome of
the arbitration. Any party may have judgment entered on the
arbitration award. Section 19.7, above, shall apply to any
arbitration or court proceeding between the parties.
19.8. Further Assurances. Each party agrees to execute and file
or caused to be filed such other or further documents as may be
requested by the other party to give effect to the purposes of the
Agreement. Such further documents shall include, but not be
limited to: (i) documents intended to perfect PURCHASER'S
ownership of and power to exercise the rights herein granted by
SELLER; (ii) if the Judgment is modified, vacated and there are
further proceedings, a replacement Assignment in order to give
effect to PURCHASER'S rights in and to the Litigation Proceeds, the
Judgment Collateral, Judgment and this Agreement.
20. Resolution of Litigation Prior to Closing. In the event the
Appeal is resolved, whether by settlement, judicial decision, or
otherwise, on or before Closing Date, PURCHASER'S obligation to
purchase and SELLER'S obligation to sell under this Agreement shall
cease. In such event, SELLER shall pay PURCHASER out of any Proceeds
of the Litigation the sum of $5,000.00, on account of PURCHASER'S
administrative and due diligence activities and expenses incurred by
PURCHASER in connection with this Agreement.
21. The parties each acknowledge and agree that: (i) this Agreement
has been entered into voluntarily and freely; and (ii) the Purchase
Price has been determined at arm's length and is reasonable in light
of the risks assumed by PURCHASER.
22. SELLER ACKNOWLEDGES THAT SELLER HAS READ THIS AGREEMENT,
INCLUDING ALL OF EXHIBITS ATTACHED HERETO. SELLER IS AWARE THAT
THIS AGREEMENT AFFECTS SELLER'S LEGAL RIGHTS. PRIOR TO SIGNING
THIS AGREEMENT, SELLER HAS CONSULTED WITH SELLER'S ATTORNEY
AND/OR OTHER LEGAL COUNSEL, CONCERNING THIS TRANSACTION.
SELLER'S ATTORNEY HAS REVIEWED THE TERMS AND CONDITIONS OF THE
ENTIRE AGREEMENT. SELLER UNDERSTANDS THE MEANING AND EFFECT OF
THE TERMS AND CONDITIONS CONTAINED IN THE AGREEMENT. SELLER HAS
RECEIVED NO LEGAL ADVICE WITH RESPECT TO THIS AGREEMENT OR THE
LITIGATION FROM PURCHASER OR ANYONE ASSOCIATED WITH PURCHASER.
SELLER'S Initials: S/JBN SELLER'S ATTORNEY'S Initials: S/PAL
IN WITNESS WHEREOF, the parties have entered into this Agreement at
San Francisco, California.
Dated: May 2, 2003
S/Xxxx X. Nano
Competitive Technologies, Inc.
By: Xxxx X. Nano, President and CEO
ACKNOWLEDGMENT
STATE OF CONNECTICUT )
COUNTY OF FAIRFIELD )
On May 2, 2003 before me, Xxxxxxxx Xxxxxxxxxxx, personally
appeared Xxxx X. Nano, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose
name is/are subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
S/Xxxxxxxx Xxxxxxxxxxx
Notary's Signature
XXXXXXXX XXXXXXXXXXX
NOTARY PUBLIC
MY COMMISSION EXPIRES SEP. 30, 2003
PURCHASER:
Dated: May 19 , 2003
LAWFINANCE GROUP, INC.,
a California corporation
By: S/Xxxxxxx Xxxx
ACKNOWLEDGMENT
STATE OF California )
COUNTY OF San Francisco )
On May 19, 2003 before me, Xxxx Xxx, N.P., personally appeared
Xxxxxxx Xxxx, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that
he executed the same in his authorized capacity, and that by his
signature on the instrument the person, or the entity upon behalf
of which the person acted, executed the instrument.
WITNESS my hand and official seal.
S/Xxxx Xxx
Notary Public
XXXX XXX
COMM.# 1233818
NOTARY PUBLIC - CALIFORNIA
City & County of San Francisco
COMM. EXP. SEPT. 2, 2003
