EXHIBIT 10.7
PATENT LICENSE AGREEMENT
This PATENT LICENSE AGREEMENT (this "Agreement"), dated December 5,
2003, (the "Effective Date") is made and entered into by and between N.V.
Nutricia, a company organized under the laws of The Netherlands (hereinafter the
"Licensor"), and General Nutrition Investment Company, an Arizona corporation
(hereinafter the "Licensee").
WHEREAS, Licensor is the owner of technology covered by certain Patent
Rights (hereinafter defined) related to certain product compositions that may be
suitable for sale by Licensee.
WHEREAS, Licensee desires to acquire a non-exclusive right and license
from Licensor for restricted exploitation of the Patent Rights within the
Protected Business (as defined in that certain Purchase Agreement, dated as of
October 16, 2003, among Royal Numico N.V., Numico USA, Inc. and Apollo GNC
Holding, Inc., as amended (the "Purchase Agreement")) in order to develop,
manufacture, have manufactured, market, offer for sale and sell certain product
compositions bearing the "GNC" trademark to consumers (i.e. not franchisees)
through Licensee owned retail stores, franchisee owned retail stores Rite-Aid
licensed retail stores or Licensee direct-to-consumer sales channels (i.e.
internet).
WHEREAS, Licensor desires to grant such right and license to Licensee.
WHEREAS, this Agreement is made pursuant to and is subject to the terms
and conditions of the Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. DEFINITIONS
1.1 As used in this Agreement, the capitalized terms set forth herein
shall have the following meanings:
(a) "LICENSED PRODUCTS" means any product composition
that is sold only within the Protected Business to consumers (i.e. not
franchisees) through Licensee owned retail stores, franchisee owned
retail stores, Rite-Aid Licensed retail stores or Licensee direct sales
channels in a container or with a label that is marked with the "GNC"
trademark, which if made, used or sold by Licensee, in the absence of
the rights and license granted under this Agreement, would infringe one
or more claims of the Patent Rights.
(b) "PATENT RIGHTS" means (i) the patent (the "Patent")
and the patent application (the "Patent Application") set forth in
Exhibit A, attached hereto and incorporated herein, and (ii) any
counterpart patents or patent applications that are equivalents of the
Patent or Patent Application issued, granted or filed in any country
other than the original filing country (the "Counterpart Patents"),
including without limitation any continuation, continuation-in-part,
divisional, reexamination, reissue or any other such patent right of
the Patents or Patent Applications not expressly set forth herein as of
the Effective Date; but exclusive of any continuation,
continuation-in-part, divisional, reexamination, reissue or any other
such patent right of the Patents or Patent Applications that are filed
in Licensor's sole discretion after the Effective Date.
(c) "TERM" means the term of this Agreement as further
defined in Article 7 below.
1.2 Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Purchase Agreement.
2. LICENSE GRANT
2.1 Licensor hereby grants to Licensee, subject to the terms and
conditions of this Agreement, a personal, non-exclusive, royalty-free right and
license, without the right to sublicense, except as expressly provided in
Section 2.2, under the Patent Rights to make, have made, use, offer for sale and
sell Licensed Products solely within the Protected Business.
2.2 The right and license granted to Licensee is personal to
Licensee. Licensee shall not at any time: (a) sublicense such rights, or assign
or transfer such right and license granted herein to any Person, except an
Affiliate of Licensee, without the prior written consent of Licensor; nor (b)
permit any Lien upon such right and license. Notwithstanding the foregoing, this
Agreement shall be assignable as of right with any transfer of substantially all
of the assets and the entire business associated therewith by the Licensee or
its Affiliate, provided that: (i) Licensee is in full compliance with all of the
terms and conditions of this Agreement; (ii) the acquiror of such assets and
business agrees in writing to assume all obligations of Licensee or its
Affiliate under this Agreement pursuant to an instrument in form and substance
reasonably satisfactory to Licensor; and (iii) Licensee or its Affiliate gives
Licensor prior written notice of such transfer and the identity of such
acquiror. Any attempted assignment or other transfer in contravention of this
Section 2.2 shall be void and ineffective.
2.3 Licensee shall restrict its practice of the Patent Rights to
Licensed Products within the Protected Business only, and covenants not to
practice the Patent Rights for any purpose outside the Protected Business.
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2.4 Licensee covenants that the Licensed Products will not copy
any product formulation sold by Licensor or any Affiliate thereof, in any
possible form or formulation, currently or in the future. The foregoing
limitation shall not apply (a) if Licensee can show by written records prior to
the date of first sale of Licensor's product formulation that such product
formulation was introduced by Licensee prior to Licensor, and (b) to the
products currently sold by Licensee, as set forth in Exhibit B.
2.5 Notwithstanding anything to the contrary in this Agreement,
Licensee agrees to accept the right and license granted in this Article 2
subject to any licenses or other rights of third parties under agreements
executed by Licensor prior or subsequent to the date of this Agreement.
3. MARKING
3.1 Licensee agrees to lawfully xxxx all Licensed Products (or
their containers or labels) with a proper patent marking based on the Patent
Rights pursuant to the U.S. Code Title 35 or any other international marking
requirements.
4. PROSECUTION AND MAINTENANCE
4.1 Licensor may, as it determines in its sole discretion: (a)
prosecute any and all U.S. and foreign patent applications included in or
related to the Patent Rights (the "Prosecution"); and (b) pay maintenance or
annuity fees of any and all U.S. and foreign patents which result from the
Patent Rights (the "Maintenance"). Upon Licensee's written request, Licensor
will furnish copies of specifically requested Patent Rights-related documents
to Licensee.
4.2 In the event Licensor decides not to pursue Prosecution or
Maintenance of any of the Patent Rights, Licensor shall provide reasonable
notice to Licensee thereof. If Licensee desires, at its sole cost, expense and
discretion, to assume and continue the obligations of Prosecution or Maintenance
of such Patent Rights, upon request by Licensee, Licensor shall execute and
deliver such documents and perform such acts as may be reasonably necessary to
effect assignment of all right, title and interest in and to such Patent Rights
to Licensee, subject to any outstanding rights or licenses granted prior to such
assignment, without further consideration from Licensee.
4.3 In the event that letters patent are issued or granted based
on any patent application so assigned in accordance with Section 4.2, Licensee
shall restrict its practice of such letters patent to making, having made,
using, offering for sale and selling products covered by the claims of such
letters patent within the Protected Business and hereby grants to Licensor an
exclusive, royalty-free right and license, with the right to sublicense, under
such letters patent to make, have made, use, offer for sale and sell any
products covered by the claims of such letters patent outside the Protected
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Business and, except where the context otherwise requires, on such other terms
as the Patent Rights provided in this Agreement as if such Patent Rights
included such letters patent, Licensor as the Licensee hereunder with respect to
such letters patent and Licensee as the Licensor hereunder with respect to such
letters patent.
5. INFRINGEMENT BY THIRD PARTIES
5.1 Each party shall promptly give notice to the other of any
actual or potential infringement of any Patent Right by any third party that
becomes known to such first-mentioned party. Licensor shall have the first right
to take such action it determines, in its sole discretion, to be necessary to
terminate or prevent any actual or potential infringement of such Patent Right.
If Licensor has not taken any action (including an informed decision to take no
action) within one hundred twenty (120) days from such first-mentioned party's
notice, Licensee may submit to Licensor a notice that Licensee will take such
action as Licensee reasonably determines is necessary to terminate or prevent
the infringement, including filing suit to the extent provided by any applicable
law, rule or regulation, unless Licensor notifies Licensee that Licensor will
file suit or otherwise terminate such infringement within thirty (30) days after
Licensor's receipt of such notice from Licensee.
5.2 In the event Licensor files suit to stop infringement,
Licensor may enter into any settlement, consent judgment or other voluntary
final disposition of such suit at its sole discretion. In the event Licensee
elects to join Licensor in any such suit or action, Licensee shall pay it's own
attorneys' fees and costs of its participation in such suit or action.
Regardless if Licensee joins or does not join Licensor in any such suit or
action, upon request by Licensor, Licensee shall cooperate with Licensor in such
suit or action. In the event Licensor requests Licensee to join Licensor in
participation in such suit or action, Licensee shall have the right to consult
with Licensor and be represented by counsel at Licensor's sole expense. Any
recovery of damages from any suit or action brought by Licensor, where Licensee
has joined Licensor, shall be shared equally by the parties, after recovery by
Licensor of its costs and expenses in connection therewith, including attorney's
fees.
5.3 In the event Licensee solely files suit to stop infringement,
Licensee may enter into any settlement, consent judgment or other voluntary
final disposition of such subject to Licensor's approval. Any recovery of
damages from any suit or action brought solely by Licensee shall be retained by
Licensee.
6. COSTS; EXPENSES AND TAXES
6.1 Except as otherwise provided herein, each party shall bear its
own costs and expenses incurred by it in performing its obligations hereunder.
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6.2 Each party shall be responsible for payment of any applicable
sales, use and income taxes, including any privilege or excise taxes in the
nature of sales or use taxes, and other similar charges imposed upon it by any
jurisdiction arising from the performance of its obligations under this
Agreement.
7. TERM AND TERMINATION
7.1 The Term of this Agreement shall run from the Effective Date
of this Agreement and shall terminate automatically upon the expiration or
extinguishment of all of the Patent Rights set forth in Exhibit A and all
letters patent that may be issued as contemplated by Section 4.3, subject to
early termination, as set forth herein below:
(a) Either parry shall have the right to terminate this
Agreement without judicial resolution upon written notice to the other
party of a material breach of any provision of this Agreement by such
other party that is not cured within sixty (60) days after such notice.
(b) This Agreement shall be terminated immediately upon
Licensor and Licensee reaching mutual agreement to so terminate this
Agreement.
(c) Licensee may terminate this Agreement without cause
upon sixty (60) days notice to Licensor.
(d) This Agreement shall automatically terminate, without
requirement of notice, upon the occurrence of any of the following:
(i) any attempt by Licensee to assign or
otherwise transfer its interest in whole or in part, in this
Agreement voluntarily or by operation of law to any other
third party except as otherwise permitted herein; or
(ii) a cessation by Licensee of all or
substantially all of its business, or
(iii) a petition in bankruptcy or reorganization
is filed by Licensee under any applicable bankruptcy law now
or hereafter in force or shall be filed against Licensee and
not vacated or dismissed within sixty (60) days after such
filing; or Licensee shall make an assignment for the benefit
of its creditors, or a receiver, trustee, liquidator or
custodian shall be appointed for all or a substantial part of
Licensee's property, and the order of appointment is not
vacated or dismissed within sixty (60) days after it is made;
or all or any material portion of Licensee's property shall be
sequestered, and the order of sequestration is not vacated
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or dismissed within sixty (60) days after it is entered; or
Licensee shall generally fail or admit in writing its
inability to pay its debts as such debts become due and
payable.
7.2 The following provisions of this Agreement shall survive
termination: Sections 7.3, 7.4 and 7.5, and Articles 6, 8, 9 and 10.
7.3 Neither party shall be relieved of any obligation or liability
under this Agreement arising from any act or omission committed prior to the
effective date of such termination.
7.4 Upon termination of this Agreement for any reason, and for one
(1) year following the effective date of termination, Licensee may continue to
sell any inventory of Licensed Products in its possession or control which was
manufactured, for which Licensee had issued binding commitments to manufacture
or for which Licensee had purchased or ordered raw materials to manufacture (all
in the ordinary course of business) prior to the effective date of termination.
7.5 Except as specified in Section 7.4, from and after any
termination of this Agreement, Licensee shall not make or have made, use or have
used or sell or have sold any Licensed Products under any of the Patent Rights.
7.6 The rights and remedies granted herein, and any other rights
or remedies which the parties may have, either at law or in equity, are
cumulative and not exclusive of others.
8. LIMITATIONS OF WARRANTIES
8.1 PATENT RIGHTS ARE PROVIDED "AS IS" WITH NO WARRANTIES OR
REPRESENTATIONS OF ANY KIND, AND LICENSOR EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT OR
FITNESS FOR A PARTICULAR PURPOSE.
9. INDEMNIFICATION
9.1 Licensee shall indemnify, defend and hold harmless Licensor
and its Affiliates against all damages, costs, and expenses, including
reasonable attorney's fees, arising or resulting from, but not limited to,
Licensee making, having made, using, offering for sale or selling the Licensed
Products based upon the Patent Rights in whatever form, provided that Licensor
promptly notifies Licensee in writing of any claim or action, Licensee has sole
control of the defense and all related settlement negotiations, Licensor will
reasonably cooperate, at Licensee's expense, in the defense of such claim or
action and
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Licensor may fully participate to protect its own interests, at Licensee's
expense, if Licensor determines that such participation is necessary.
10. LIMITATION OF LIABILITY
10.1 Neither Licensor nor its Affiliates will be responsible for
any injury to or death of persons, or damage to or destruction of materials, or
other property, or for any other loss, damage, or injury of any kind whatsoever
resulting from Licensee making, having made, using, offering for sale or selling
of the Licensed Products based upon the Patent Rights.
11. GENERAL PROVISIONS
11.1 Under the terms of this Agreement, Licensor and Licensee are
independent contractors. Neither party is an employee, agent, partner or
representative of the other party. Nothing contained herein shall be deemed to
create a joint venture relationship between the parties. Each party
specifically acknowledges that it does not have authority to incur any
obligations or responsibilities on behalf of the other party.
11.2 All notices required or permitted to be given by one party to
the other under this Agreement shall be sufficient if sent by certified mail,
return receipt requested, by a nationally recognized courier or by hand delivery
to the parties at the respective addresses set forth below or to such other
address as the party to receive the notice has designated by notice to the other
party:
Licensor: Licensee:
N.V. Nutricia General Nutrition Investment Company
Xxxxxxxxxx 00 000 Xxxxx Xxxxxx
6704 PH Wageningen Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Netherlands Fax No.____________________________
Fax No._______________________ Attn: _____________________________
Attn: ________________________
All notices shall be effective upon receipt or refusal of delivery by
the party being notified. Either party may change its address, etc., by giving
notice of such change as provided herein, provided that such notice is effective
only on receipt.
11.3 Licensee shall not use the name of the Licensor or any of its
Affiliates in any advertising, marketing or sales without the prior written
consent of Licensor, except that Licensee may state that the Licensed Products
are licensed under the Patent Rights, Licensee may xxxx the Licensed Products
pursuant to Section 3 of this Agreement and Licensee may use Licensor's name in
various documents used by Licensee for capital raising and financing without
such prior written consent only to the extent such use is required by any U.S.
federal law or regulation. However, by entering into this
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Agreement, Licensor does not directly or indirectly endorse any Licensed
Products and Licensee shall not state or imply that this Agreement is an
endorsement by Licensor.
11.4 No waiver of the terms and conditions of this Agreement, or
the failure of either party to strictly enforce any such term or condition on
one or more occasions, shall be construed as a waiver of the same or of any
other term or condition of this Agreement on any other occasion.
11.5 This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without reference to
any principles of conflicts of laws. The parties hereby consent to the
jurisdiction and venue of the United States district courts sitting in the State
of New York and any courts of the State of New York in which any suit, action or
proceeding is brought arising under this Agreement. The parties hereby waive any
claim of forum non conveniences in any suit, action or proceeding brought in any
of the above-mentioned courts. Licensor and Licensee agree that service of
process in any such suit, action or proceeding shall be effective if in writing,
delivered in any manner permitted in Section 11.2 hereof and actually received
by the addressee.
11.6 If any provision in this Agreement may be held to be invalid
or unenforceable in any jurisdiction in which this Agreement is being performed,
the meaning of such provision shall be construed so as to render it enforceable
to the extent feasible. If no feasible interpretation would save such provision,
it shall be severed from this Agreement and the remainder shall remain in full
force and effect. However, in the event such provision is considered an
essential element of this Agreement, the parties shall promptly negotiate
alternative, reasonably equivalent, enforceable terms.
11.7 Licensee shall comply with all laws, rules and regulations
applicable to the performance of its obligations hereunder, including, without
limitation, all import/export laws, restrictions, controls and regulations
relating to the Patent Rights and/or Licensed Products.
11.8 Subject to the Purchase Agreement, the terms and conditions
contained in this Agreement, including the attached Exhibits A and B, supersede
all prior oral or written understandings between the parties with respect to the
subject matter thereof, and constitutes the entire agreement of the parties with
respect to such subject matter. All prior negotiations, representations,
agreements, and understandings are merged into, extinguished by and completely
expressed by this Agreement. Such terms and conditions shall not be modified or
amended except by a writing signed by authorized representatives of both
parties.
11.9 This Agreement may be executed in several counterparts, each
of which shall be deemed an original, but all of which together shall constitute
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one and the same Agreement. A signature page of this Agreement executed and
transmitted via facsimile or electronic mail shall be deemed an original for all
purposes.
11.10 This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective permitted assigns and
successors.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed below
by their duly authorized representatives.
N.V. Nutricia General Nutrition Investment Company
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxx
----------------------- -----------------------------------
Printed Name: Xxxx Xxxxxx Printed Name: Xxxxx X. Xxxxxx
Title: EVP Title: SVP
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EXHIBIT A
APPLICATION ISSUE
TITLE NUMBER DATE FILED PUBLICATION NUMBER DATE COUNTRY
----------------------- --------------- ---------- ------------------ ---------- --------------
Nutritional Composition US 08/691,023 08/05/1996 US 5,792,754 08/11/1998 United States
Containing Fibres
AU 19960060871 XX 000000 Xxxxxxxxx
EP 19950202142 EP 0756828 Europe
DE 19956006095 DE 69506095T Germany
ES ES 2123903T Spain
19950202142T
Composition Containing US 09/769,245 01/26/2001 US 2002/150627 United States
Creatine and Phosphorus
AU 2002228484 Australia
CA 20022434 104 CA 2434104 Canada
EP 20020710564 EP 1353568 Europe
EXHIBIT B
Current Licensee Products
NO. PRODUCT NAME
--- ------------------
1 Total Lean Oat MRP
2 Multitech
3 Femfiber
4 Mega Creatine
5 Creatine clear
