10
EXCLUSIVE MARKETING AGREEMENT
This Agreement
(the "Agreement") is
being entered into as of this 17th
day of April, 2007, by and among the party of the first part
COMPETITIVE
TECHNOLOGIES, INC.
("CTT"), the party of the second part, AGROFUT E.U.
("AGROFRUT"), and
the party of the third
part, its sole shareholder BETTY RIOS
VALENCIA ("AGROFRUT
Shareholder"),
and sets forth the
terms and conditions of
their agreement
regarding CTT's acquisition of certain rights to
AGROFRUT's
nutraceutical Product output on an exclusive basis and certain
other rights, all
as more particularly set forth below. As
used herein, the term "Parties" shall
refer collectively
to CTT, AGROFRUT and AGROFRUT Shareholder, and the
term
"Party" shall refer to
CTT, AGROFRUT or AGROFRUT Shareholder individually. The
Parties hereby
agree as follows:
1. SCOPE
OF THE AGREEMENT: For good and valuable
consideration as stated
herein, receipt of
which is hereby acknowledged, the Parties state the scope of
their Agreement
as follows:
a. Exclusive
First Refusal Obligation. During the Output Term (as
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defined herein),
AGROFRUT shall submit to CTT, on an exclusive, "first-refusal"
basis, all AGROFRUT Products (as defined herein) with respect to
which CTT shall
have the right to exploit Marketing Rights worldwide in
accordance with the
terms and conditions hereof. Each submission shall be made by AGROFRUT in
accordance with
the requirements and procedures set forth below. The term
"AGROFRUT Product"
shall mean an original nutraceutical Product:
(i) to be
produced or
acquired for Product release by AGROFRUT; and/or (ii) to be
otherwise released
under the AGROFRUT name and/or logo and/or
any other name
and/or logo
owned, operated or controlled by, or otherwise
affiliated with,
AGROFRUT, by
itself or through a joint venture with another
entity, in each
instance for
which AGROFRUT controls the Product Rights. A nutraceutical
product shall
be deemed to be an
AGROFRUT Product on the first date upon which
AGROFRUT produces
or enters into an agreement to acquire the
rights to cause
such nutraceutical
or other Product to be produced, acquired or
otherwise
released in accordance with the definition of an AGROFRUT Product
hereunder (the
"Production Date").
For purposes hereof, "first refusal" means that an AGROFRUT
Product shall
be submitted solely and exclusively to CTT for purposes of
exploiting the
Marketing Rights in and to such AGROFRUT Product before the
same
is submitted to any other person or entity. It is the essence of this
Agreement
that AGROFRUT
will not submit any AGROFRUT Product to
a third party for sale,
marketing,
acquisition,
licensing,
exploitation or
any other use unless
and
until the AGROFRUT Product has been submitted to CTT hereunder,
and CTT has
declined to
exploit the Marketing Rights to the
AGROFRUT Product (a "Rejected
Product"). An
AGROFRUT Product for which CTT elects to exploit
the Marketing
Rights shall
be referred to as an "Included Product."
b. Grant of Rights. AGROFRUT hereby irrevocably grants, transfers,
-----------------
assigns and
licenses to CTT the Product Rights worldwide (as defined in
Paragraph 2
hereof) in and to each
AGROFRUT Product during the Output Term (as
defined herein)
subject to, and in accordance with, the terms hereof.
c. Output Term. The term "Output Term" shall mean the period
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commencing on
the date hereof and expiring 180 (one
hundred eighty) days from
the date hereof; provided, however, that the
Product Rights granted hereunder
<PAGE>
thereafter shall
remain in effect in perpetuity so long as AGROFRUT's
Shareholder and
CTT engage in the Closing of the
Exchange contemplated by the
Term Sheet
accompanying
this Agreement.
2. PRODUCT
RIGHTS: The term "Product Rights" shall mean the exclusive
Marketing Rights
(as defined herein) to
each of the AGROFRUT Products, and all
rights necessary
to distribute, to exploit, to advertise, to promote
and to
publicize such
Marketing Rights of each AGROFRUT Product for worldwide
exploitation.
"Marketing Rights"
shall mean the following: rights to sell, to
distribute, to
advertise, to supply and to control delivery of the Products
and
the Products'
name, label, packaging or trade dress; i.e., the overall
appearance and
commercial impression
of the Products, in print media, point of
sale, radio
broadcast and television advertising, and in brochures, sales
literature and
nutraceutical
promotional
activities,
including on-line
nutraceutical
promotional
activities, for
the Products.
3.
EQUITY INTEREST:
a.
AGROGRUT Common Stock. CTT shall be entitled to receive
from AGROFRUT
----------------------
five percent
(5%) of the shares of AGROFRUT's Common Stock (the "Equity
Interest"). The
shares issued shall be referred to as the "Shares." Such
Shares shall be issued
pursuant to the Stock Purchase Agreement executed at the
time of this Agreement.
4. SUBMISSION
PROCEDURES:
a. Submission.
Not later than 10 (ten) business days following
the
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Production Date
of an AGROFRUT Product, AGROFRUT shall submit
such AGROFRUT
Product to CTT, along with a written notice ("Submission Notice"),
from AGROFRUT
to CTT.
b. CTT's Response to Submission. Within 10 (ten) days following
-------------------------------
receipt by CTT of a
Submission Notice, together with samples of the Product and
any marketing
materials prepared by
AGROFRUT (the "Response Period"), CTT will
provide written
notice to AGROFRUT as to whether CTT elects to exploit
the
Marketing Rights to
such AGROFRUT Product.
CTT's failure to respond within the
Response Period
shall be deemed to
constitute CTT's rejection of such AGROFRUT
Product, and
such AGROFRUT Product
shall thereafter be deemed to be a Rejected
Product.
c. Rejected
Products. With respect to each Rejected
Product, AGROFRUT
------------------
will have the option to arrange for the Marketing Rights to such
Rejected
Product to
be acquired by third parties;
provided, however, that prior to the
time that AGROFRUT concludes any agreement to grant such rights to a
third
party, if there is a change in any of the elements of the Product,
then AGROFRUT
shall resubmit
the Rejected Product to CTT in accordance with the terms
of
Paragraph 3.a.
above (provided CTT shall have 10 (ten) days from
the date of
such resubmission to make its determination), and the Rejected
Product shall not
be submitted
to any third party unless and until CTT has again
declined to
exploit said
rights. All of CTT's right, title, and interest
in and to each
Rejected Product
that is not required
to be resubmitted to CTT pursuant to the
terms of this Paragraph 3.c. shall revert to AGROFRUT automatically.
<PAGE>
d. Submission by CTT.
In addition to
AGROFRUT's submissions hereunder,
-----------------
CTT shall have the right, but not the obligation, to order from
AGROFRUT, at any
time, nutraceutical
Products for which CTT
is willing to exploit the Marketing
Rights. None
of such Products shall be deemed an AGROFRUT
Product hereunder
unless and
until AGROFRUT enters into a binding
written agreement with CTT to
produce or to acquire the rights to cause such Products to be
produced, acquired
or otherwise
released in accordance
with the definition of an AGROFRUT Product
hereunder.
5.
PAYMENTS AND
DIVISION OF REVENUES:
a. Revenue
Division. In lieu of royalties or other
payments, AGROFRUT
-----------------
and CTT shall engage in a division of revenues
so that AGROFRUT shall receive
sixty percent
(60%) of marketing and sales proceeds of
AGROFRUT products, and
CTT shall receive forty percent (40%) of marketing and sales proceeds of
AGROFRUT products.
Any revenues payable
to AGROFRUT pursuant to this Agreement
shall be paid on a
monthly basis provided that, in each such case, each payment
hereunder shall be
accompanied by a revenue statement. The division of revenue
pursuant to
this Agreement shall be based on "Net Revenue" determined by
application of
Subparagraph (e) of this Paragraph. Revenue shall be determined
on a "cash basis" at the time of receipt by CTT. No revenues will be payable by
CTT to AGROFRUT on returns that are accepted and credited by CTT or by
an
affiliate of
CTT, or on units of the Products distributed
exclusively for
demonstration or
nutraceutical
purposes, or for
replacements. CTT
shall have
the right to retain a reasonable reserve from revenues
for returned Products
(provided that such
reserve will be reviewed and, if appropriate, liquidated in
good faith on a
quarterly basis). To
the extent that the actual returns to CTT
or affiliates of CTT
in any given quarter are greater than the expected returns
based upon which CTT
has adjusted any revenue payments, such difference will be
withheld by or payable
to CTT, as the case may be. No revenues will be payable
on sales or other
transactions between CTT and any affiliate of CTT until final
sale of the Products by the affiliate of CTT. If CTT makes a revenue payment
to
AGROFRUT where
CTT is subsequently required to refund
or to reduce all or any
part of the Net Sales collected by it, CTT
shall have the right to a refund of
overpayments of
revenues made to AGROFRUT.
b.
Books and Records Relating to Sales.
CTT will maintain
sufficient and
------------------------------------
accurate books and records relating to all transactions relevant to
sales of the
Products or
in respect of which CTT is required to provide
information in a
revenue statement.
c.
Inspection.
CTT will permit a chartered accountant reasonably
----------
acceptable to
CTT and appointed by AGROFRUT (the "AGROFRUT
Accountant") to
inspect the
books and records
maintained by CTT after 15 (fifteen) days notice
at any reasonable time during normal business hours at AGROFRUT's
expense and in
such manner
as not to interfere with the business of CTT
for the purpose of
verifying the correctness of the revenue statements and the
payments made by CTT
to AGROFRUT by way of revenue pursuant to this Paragraph.
AGROFRUT shall not
be
entitled to
make such inspections
more frequently than on one occasion in each
<PAGE>
period of 12 (twelve) calendar months unless
it can demonstrate that there are
exceptional
circumstances
requiring such additional inspections. In the event
that the AGROFRUT Accountant discovers an error of greater than 5% (five
percent) in
favor of AGROFRUT, AGROFRUT shall be
entitled to reimbursement by
CTT for the costs of such a review plus interest at 10% (ten
percent) per annum.
d.
Nondisclosure.
Neither AGROFRUT nor the AGROFRUT Accountant shall
-------------
disclose any
information
acquired as a result of any such examination or
inspection to
any person, firm or corporation other than to its
employees,
authorized
representatives and
as otherwise strictly
necessary to enforce its
rights hereunder.
e.
Net
Sales. "Net Sales" means the gross
revenue (including advances)
----------
earned and actually received by or credited to CTT, or any
affiliated or related
entity thereof,
from the sale, lease, license, distribution or other
exploitation of the
Product less the following (all of which shall collectively
be known as the "Cost of Goods"): (i) actual, direct, third-party,
out-of
pocket charges
or expenses incurred
by CTT, or any affiliate or related entity
thereof, in
connection
with transportation, handling, carriage, delivery,
insurance, taxes
(including
withholding
taxes and Value Added Tax), duties,
tariffs, assessments,
levies and other
governmental and "pass-through" charges
on or after sale of units of the Product; and (ii)
any rebates or allowances
(including allowances
credited to resellers or distributors in respect to
marketing and
nutraceutical
costs) paid by CTT in
connection with the sale or
distribution of
the Product. If CTT earns revenue from distribution of a
Product in
combination
or bundle with one or more other CTT products,
such
revenue will be allocated between that Product and such other
products on a fair
and reasonable
basis taking into consideration the current or most recent
wholesale prices
of components of such compilation or bundle.
6.
CONSULTATION AND
APPROVAL RIGHTS:
a. AGROFRUT.
AGROFRUT shall meaningfully consult with CTT in good
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faith during
the Output Term with respect to (i)
