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Patent License Agreement

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Sectors: Retail
Governing Law: New York, View New York State Laws
Effective Date: December 05, 2003
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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.


2


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 mark 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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