Nautilus 2009 Annual Report Download - page 210

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12
2.23. Covenant Not To Sue: While this License is in effect Nautilus hereby covenants not to sue Buyer for infringement of any
Nautilus owned or licensed intellectual property rights not licensed herein for Buyer
’s manufacture, distribution, sale, offer to
sell, use in commerce, importation, display, reproduction, or derivative works of Fitness Products, Accessories, and
Marketing Collateral in the Commercial Channel only.
2.23.1.
Fitness Products,
and by extension this Covenant, do not include the TreadClimber Products or
intellectual property rights thereto.
2.23.2. This Covenant is personal to Buyer and is not transferable or assignable without the express written permission of
Nautilus. This Covenant shall be null and void and shall have no effect in the event that Buyer is or becomes a
competitor of Nautilus in the Retail or Direct Channels.
2.24. For the avoidance of doubt, the Parties agree that all inventions, works, trade secrets, and know-how created by Buyer after
the Effective Date shall be the property of Buyer and Nautilus shall have rights therein only as expressly stated in this
Agreement; further, Buyer shall own its rights in derivative works and inventions it creates after the Effective Date even if the
underlying work or invention is Licensed IP.
2.25.
Nautilus hereby assigns to Buyer, in connection with this sale of the commercial business, all of Nautilus
’ rights and interest
in the License Agreement dated 1 Oct. 2002 between Quinton, Inc. and Nautilus, Inc. and Buyer agrees to assume all rights
and obligations of the License Agreement and Buyer shall indemnify Nautilus for all actions of Buyer in connection
therewith.
3.
Royalty
3.1.
For the Licenses granted herein, Buyer shall pay to Nautilus a running royalty according to the following schedule. Royalty
calculations are made on a calendar year basis. Royalty payments shall be quarterly. Each quarterly payment shall be the
higher of the Minimum Royalty specified for the period or the running royalty calculated as a percent of Net Sales for the
quarter. Buyer shall submit a report with each royalty payment as specified below.