Nautilus 2009 Annual Report Download - page 102

non-transferable, non-assignable, non-sublicensable, worldwide, license to rights under such Licensed Rights needed by Buyer to
market and sell Indoor Cycles and Accessories in the Channel, but not otherwise. To the extent any such Licensed Rights impose
restrictions on the activities of Buyer, Buyer shall be subject to and agrees to abide by such restrictions.
Contemporaneous with this Agreement, the Parties shall execute a Sublicense Agreement by which Nautilus shall grant Buyer rights
to distribute Triple Link pedals in the USA. The Sublicense Agreement is attached as Schedule H.
During a transition period of up to six (6) months from the date of this Agreement, Buyer may acquire Triple Link pedals from
Nautilus at a cost of US$28/pair. For all Triple Link pedals imported into the USA, Buyer shall pay Nautilus the royalty specified in
the Sublicense Agreement.
A. Royalty.
For the Trademark License rights granted by this License Agreement to Buyer, Buyer shall pay Nautilus a Royalty which is equal to:
(i) For the calendar year 2009, no Royalty;
(ii) For the calendar year 2010, the Royalty rate shall be five (5) percent of Net Sales of Licensed Indoor Cycles and
Accessories;
(iii) For the calendar year 2011, the Royalty rate shall be five (5) percent of Net Sales of Licensed Indoor Cycles and
Accessories; and
(iv) For the calendar year 2012 and each year thereafter the Royalty rate shall be three (3) percent of Net Sales of Licensed
Indoor Cycles and Accessories.
Because of the difficulty of allocating royalties and the different types of intellectual property being licensed by this License, the
Parties agree that a Royalty based on Net Sales of products that bear and/or are marketed in connection with any one or more of the
Licensed Marks is an appropriate and convenient manner of establishing the Royalty.
pg. 7
G.
Sublicense Under Nautilus and Peloton License Agreement Identified in Schedule D.
3.
Payments for License