ESCROW AGREEMENT
Exhibit
10.1
THIS
ESCROW AGREEMENT (the “Agreement”)
is
made and entered into as of the 26th
day of
January, 2007, by and between Competitive
Technologies, Inc.,
a
Delaware corporation having an address of 000 Xxxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxxxx (“CTT”); Xxxx
Nano,
of
Stamford, Connecticut (“Nano”); and Commerce
Bank, N.A.,
a
national banking association having an address of 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000, as escrow agent (the "Escrow Agent").
RECITALS
A. Nano
and
CTT are parties to that certain civil action pending in United States District
Court, District of Connecticut (the “Court”), under title and docket number of
Nano
v. Competitive Technologies, Inc.,
Case No.
3:06-CV-00817 (CFD) (the “Litigation”).
B. On
January 24, 2007, Nano and CTT agreed, and upon their agreement the Court
(Xxxxx, Mag. J.) ordered, that by the close of business on January 26, 0000,
XXX
shall cause a bond in the amount of $2.5 million to be posted by a reputable
insurance company to serve as security in the Litigation.
C. On
January 24 and 25, 2007, CTT was advised by several insurance companies that
such a bond cannot be posted within the time provided in the order.
D. In
lieu
of a bond, CTT and Nano have agreed to execute and deliver this Agreement
whereby CTT shall deliver to the Escrow Agent cash in the amount $2.5 million
to
be held and distributed by the Escrow Agent in accordance with the terms and
conditions of this Agreement.
AGREEMENT
In
consideration of the mutual agreements, covenants and other premises set forth
herein, the mutual benefits to be gained by the performance thereof, and for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged and accepted, the parties hereby agree as
follows:
1. Appointment
and Agreement of the Escrow Agent.
Nano
and CTT hereby appoint Commerce Bank, N.A. as escrow agent and Commerce Bank,
N.A. hereby agrees to perform the duties of escrow agent under this Agreement.
The Escrow Agent acknowledges that it has been furnished with a copy of this
Agreement.
2. Deposit
of Escrowed Amount; Setoff; Interest. CTT
has
delivered to the Escrow Agent in immediately available funds an amount of TWO
MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($2,500,000.00) (such amount,
together with interest thereon, the “Escrowed Amount”) to be held by the Escrow
Agent in escrow in an interest-bearing account pursuant to the terms and
conditions of this Agreement. All interest earned in the account established
hereunder shall be payable to CTT. The Escrow Agent is hereby directed to invest
the entire deposit in the Xxxxxxx Xxxxx Institutional Liquid Asset Treasury
Obligations Money Market Fund.
3. Purpose
of the Escrow.
This
Agreement has been executed and delivered for the purpose of securing the
respective rights of Nano, on the one hand, and CTT, on the other hand,
regarding the Escrowed Amount.
4.
Distribution of the Escrowed Amount.
The Escrow Agent shall
hold the Escrowed Amount and shall not distribute it, or any portion thereof,
unless and until one of the following occurs:
(a) Receipt
of any joint written instructions delivered to the Escrow Agent
and executed
by (i) Nano, (ii) an authorized representative of CTT, and (iii) their
respective counsel of record in the Litigation; or
(b) Receipt
of any final, non-appealable order of the Court in the
Litigation.
In
no
event shall the amount distributed to Nano hereunder exceed the sum of
$2,500,000.00.
5. Concerning
the Escrow Agent.
(a) Limited
Duties.
The
Escrow Agent undertakes to perform only such duties as are expressly set forth
in this Agreement. The Escrow Agent shall incur no liability whatsoever to
any
other party hereunder, except for its own fraud, gross negligence or willful
misconduct in its capacity as escrow agent.
(b) Reliance
on Instructions and Orders.
The
Escrow Agent may reasonably rely and shall be protected in acting or refraining
from acting upon any joint written instruction or Court order furnished to
it
hereunder and reasonably believed by it to be genuine and to have been signed
or
presented by the proper party or parties.
(c) Action
in Good Faith.
The
Escrow Agent shall not be liable for any action taken by it in good faith and
believed by it to be authorized or within the rights or powers conferred upon
it
by this Agreement, and may consult with counsel of its own choice and shall
have
full and complete authorization and protection for any action taken or suffered
by it hereunder in good faith and in accordance with the opinion of such
counsel.
(d) Resignation.
The
Escrow Agent may resign and be discharged from its duties or obligations
hereunder by giving notice of such resignation to Nano and CTT specifying a
date
upon which such resignation shall take effect, whereupon a successor escrow
agent shall be appointed by Nano and CTT. The Escrow Agent shall be entitled
to
deliver the Escrowed Amount in escrow to any successor escrow agent so appointed
or to the Court.
(e) Indemnification.
Except
with respect to claims based upon the Escrow Agent’s willful misconduct, gross
negligence or fraud, CTT will indemnify and hold harmless the Escrow Agent
from
any claims made against the Escrow Agent by Nano arising out of or relating
to
this Agreement. CTT will indemnify and hold the Escrow Agent harmless from
any
claim made by any third party arising out of or relating to this Agreement,
such
indemnification to include all costs and expenses incurred by the Escrow Agent,
including reasonable attorneys’ fees.
(f) No
Consequential Damages.
In no
event shall the Escrow Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Escrow Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
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(g) Compensation. CTT
shall
pay the Escrow Agent an acceptance fee of $1,000.00 and an administrative fee
of
$3,500.00 upon the closing of this Agreement. Any
additional compensation or charges payable to the Escrow Agent for the services
to be rendered by the Escrow Agent hereunder, if any, shall be paid by
CTT.
(h) Deposit
into Court Registry.
In the
event that any third party makes any claim or commences litigation arising
out
of or relating to this Agreement or the distribution of the Escrowed Amount,
Nano and CTT promptly shall submit written instructions to the Escrow Agent
(pursuant to Section 4(a), above) to deposit the Escrowed Amount into the
Registry of the Court.
6. Term
of Agreement/Survival.The
term
of this Agreement shall be for the period beginning as of the date first above
written and ending as of the date on which all of the Escrowed Amount has been
distributed by the Escrow Agent pursuant to Section 4 hereof. The provisions
of
Section 5(e) shall survive the term and termination of this Agreement.
7. Tax
Identification Number, Allocation of Interest. Each
party hereto, except the Escrow Agent, has listed his or its Tax Identification
Number (TIN) as assigned by the Internal Revenue Service in Section 8, below.
Interest shall be allocated to and reported by CTT in accordance with the
provisions of Section 2, above.
8. Notices.All
notices, consents and other communications under this Agreement shall be in
writing and delivered personally or sent by registered or certified mail,
postage prepaid or delivered to a recognized overnight courier service (such
as
Federal Express) with shipping charges prepaid, addressed as
follows:
If
to
Nano, to:
Xxxx
Nano
00
Xxxxx
Xxxxx Xxxx
Xxxxxxxx,
XX 00000
With
a copy to:
Xxxxx
Xxxxx-Xxxxxxx, Esq.
Xxxxxxxx,
Xxxxx-Xxxxxxx, Chimes & Xxxxxxxxxx, P.C.
000
Xxxxxx Xxxxxx
Xxx
Xxxxx, XX 00000
If
to
CTT, to:
Competitive
Technologies, Inc.
000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
TIN:
00-0000000
With
a copy to:
Xxxxxxx
X. Xxxxx, Esq.
Zeldes,
Needle & Xxxxxx, P.C.
0000
Xxxxxxxxx Xxxxxxxxx
X.X.
Xxx
0000
Xxxxxxxxxx,
XX 00000-0000
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If
to
the Escrow Agent, to:
Commerce
Bank, N.A.
Corporate
Trust Services
000
Xxxxx
Xxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxxx
or
such
other persons or such other addresses as may be designated in writing by the
parties, by a notice given as aforesaid. All notices shall be deemed given
when
received or upon refusal of receipt.
9. Miscellaneous.
(a) Applicable
Law.
This
Agreement will be governed by the laws of the State of Connecticut without
regard to any conflict of laws principles and as applicable to contracts to
be
entered into and performed entirely within the State of
Connecticut.
(b) Headings.
The
headings of the several sections of this Agreement are inserted for convenience
of reference only and are not intended to affect the meaning or interpretation
of this Agreement.
(c) Entire
Agreement, Amendments.
This
Agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties with respect thereto. No amendment, modification or rescission of this
Agreement will be effective unless set forth in a writing signed by Nano, and
duly authorized officers of CTT and the Escrow Agent.
(d) Binding
Nature.
This
Agreement will be binding upon, and inure to the benefit of, the personal
representatives, executors, administrators, heirs, successors, legal guardians
and permitted assigns of the parties hereto, and any personal representatives,
executors, administrators, heirs, successors, legal guardians or permitted
assigns of such party. This Agreement may not be assigned by any party without
the written consent of the other parties hereto.
(e) Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become a binding agreement
when
one or more counterparts have been signed by each party and delivered to the
other parties. Each such original or facsimile copy of this Agreement signed
in
counterpart by any of the Parties shall be deemed to be an original for all
purposes.
[signature
page follows]
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IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as
of
the date first set forth above.
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COMPETITIVE
TECHNOLOGIES, INC.
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| |
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| BY: | /s/ Xxxxxxx X. Xxxxxxxx | |
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Xxxxxxx
X. Xxxxxxxx
Senior
Vice-President and Chief Financial Officer
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| /s/ Xxxx Nano | ||
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XXXX NANO |
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COMMERCE
BANK, N.A.
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| BY: | /s/ Xxxxxxx X. Xxxxxx | |
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Xxxxxxx
X. Xxxxxx
Vice
President
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