Nautilus 2009 Annual Report Download - page 103

B. Payment Schedule. The Royalty will accrue upon the earlier of the invoice date, or the shipping date for the goods by Buyer. The
amounts set forth in this section are payable quarterly from Buyer to Nautilus within thirty (30) days after each March 31 , June 30
, September 30 , and December 31 , beginning January 1. 2010. The quarterly royalty payments shall accompany the required
reports of Section 3.F.
C. Minimum Payment to Nautilus.
(i) Buyer shall pay Nautilus an Annual Minimum Royalty beginning in Calendar Year 2010. The royalty payments shall be
paid quarterly and each quarterly payment shall be at least one-quarter ( /
4 ) of the Annual Minimum Royalty until the
royalty payments for the calendar year at least equal the Annual Minimum Royalty.
For the Calendar Year 2009 - Minimum Annual Payment = $0;
For the Calendar Year 2010 - Minimum Annual Payment = $800,000;
For the Calendar Year 2011 - Minimum Annual Payment = $1,000,000;
For the Calendar Year 2012 and each Calendar Year thereafter – Minimum Annual Payment = $600,000.
(ii) Example:
The Annual Minimum Royalty for 2010 is $800,000, or $200,000 per quarter until the total royalty paid to Nautilus for
the calendar year is equal to or exceeds $800,000. Thus, if the net sales for Q1 yield royalties less than $200,000, Buyer shall
pay $200,000. If the net sales in Q2 yield royalties in excess of $200,000, Buyer shall pay the actual royalty and the royalty
paid in excess of one-quarter of the Annual Minimum may not be carried over or credited to Q3 unless the Annual Minimum
has been reached. Only, when the actual paid royalties for a Calendar Year exceed the Annual Minimum Royalty, may a
royalty payment for a quarter be less than one-quarter ( /
4 ) of the Annual Minimum Royalty.
D. Methods of Payments to Nautilus. All payments under this Agreement to Nautilus shall be made in U.S. Dollars and made by
electronic payment as set out in Schedule G to this License. Buyer shall not be permitted to pay money in escrow or to any entity
other than Nautilus, unless pursuant to a final court order that is not subject to appeal.
E. Reports and Records. Buyer shall keep and preserve accurate records of all of its operations within the scope of this License
Agreement. With each payment by Buyer to
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