Nautilus 2003 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2003 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 93

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93

4.3
Reports and Records.
4.3.1 Licensee shall keep complete and accurate records of its operations under this Agreement and shall furnish Licensor with a statement not
more than thirty (30) days after the end of each calendar quarter during the term of this Agreement, setting forth the “net sales” and the
method used to determine net sales during the quarter to which the statement pertains, and the royalty then due. Each such statement shall
be accompanied by payment to Licensor of all amounts then due. The first such report and payment shall be due not more than thirty (30)
days after the quarter in which product sales have commenced.
4.3.2 Licensor shall have the right to audit the records and accounts of Licensee relating to the sales under this Agreement, provided that such
audits shall be made at reasonable times during normal business hours by a certified public accountant selected by Licensor solely at
Licensor
’
s expense.
4.3.3
If an audit shall reveal that in any calendar quarter, Licensee has made an error in its favor in any payment due to Licensor, Licensee shall
be obligated to pay the reconciled unpaid amount and, in addition, pay the audit fee in respect of such audits if such error equals or is
greater than five percent (5%).
4.3.4
In calculating and determining the royalties payable hereunder, Licensee shall consistently apply the conventions, rules and procedures of
Generally Accepted Accounting Principles (GAAP) as defined by the American Institute of Certified Public Accountants (AICPA).
5.
TERM, TERMINATION AND REVISION
5.1 Term. Unless sooner terminated as provided herein, this Agreement shall remain in effect for the term of the licensed patents, or for so
long as Licensee continues to manufacture, market, promote or sell the Licensed Product, whichever is longer.
5.2
Termination.
A. Licensee shall have the right to terminate this Agreement upon ninety (90) days written notice to Licensor. Expiration or
termination of this Agreement or of any license rights under this Agreement shall not relieve the parties of any obligation accruing
prior to or at the time of such expiration or termination, and any provisions relating to enforcement of the license rights hereunder
or indemnification of one party by the other shall survive the expiration or termination of this Agreement.
B. In the event of a breach of any of the terms or provisions of this Agreement by either party, the party not in default shall have the
right to terminate the Agreement by giving thirty (30) days written notice to such effect to the defaulting party, such notice to set
forth the nature of the breach or default relied upon to effect termination. In the event that the breach or default is cured by the
defaulting party within the period of the notice, then the notice shall be null and void and of no further effect.
C. If Licensee becomes insolvent or files for liquidation under any provision of the bankruptcy law, all rights of the Licensee will be
automatically deemed to have expired as of a date seven (7) days prior to that event.
5.3 Rights After Termination. Upon termination of this Agreement, Licensee shall have the right to complete any Licensed products then in
the process of manufacture and to dispose of those Licensed Goods, as well as its existing inventory of all Licensed Goods, subject to the
payment of royalties to Licensor as provided in Article 3.1. Any inventory not disposed of one hundred eighty (180) days from the date of
termination will be offered to Licensor at cost. Licensor shall have no obligation to purchase said existing inventory.