EXHIBIT 2.1
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TRADEMARK LICENSE AGREEMENT
This Trademark License Agreement (the "Agreement") is made and entered
into as of September 20, 2001 (the "Effective Date"), by and between Pacific
Direct, LLC, a Delaware limited liability company ("Licensor"), Nautilus, Inc.,
a Washington corporation ("Nautilus") and Schwinn Acquisition LLC
("Acquisition"), a Delaware limited liability company and a wholly owned
subsidiary of Pacific Cycle, LLC, a Delaware limited liability company
("Pacific").
RECITALS
A. Nautilus is an Affiliate (as defined below) of Direct Focus, Inc., a
Washington corporation ("Direct Focus") and is in the business of designing,
manufacturing, marketing, selling and distributing exercise equipment and other
fitness and related products for personal and commercial use;
B. Pacific is in the business of designing, manufacturing, marketing,
selling and distributing bicycles, bicycling equipment and other cycling and
related products for personal use;
C. Pursuant to the Bid Letter and Asset Purchase Agreements, Direct
Focus and Acquisition have purchased the tangible and intangible assets of
Schwinn/GT Corporation and certain affiliated companies listed in the Asset
Purchase Agreements (collectively, "Schwinn"), including, among other things,
trademarks and associated goodwill;
D. The SCHWINN name and trademark has been in substantial and
continuous use by Schwinn and its related entities for over one hundred years
and has become a famous mark entitled to protection in connection with a wide
range of consumer products including cycling products, health and fitness
products, clothing and footwear and a variety of other equipment and products
relating to sports and recreation;
E. As part of the Asset Purchase Agreements, Direct Focus has acquired
certain assets of Schwinn including valuable patents, trademarks and domain
names related to Schwinn's fitness business as more fully described in the Asset
Purchase Agreements ("Fitness Assets"), Acquisition has acquired certain assets
of Schwinn including valuable patents, trademarks and domain names related to
Schwinn's cycling business as more fully described in the Asset Purchase
Agreements ("Bicycle Assets"), and the parties jointly assigned their rights to
acquire to Licensor, subject to the licenses granted in this Agreement, valuable
trademarks associated with both Schwinn's cycling business and its fitness
business, including the Marks (including the SCHWINN(R) mark, related composite
marks, and related logos) and the Domain Names (including those encompassing
part of the SCHWINN mark), including those set forth in Schedules A and B to
this Agreement;
F. In order to both maximize the commercial exploitation of the Marks
and to protect against infringement, dilution and other diminution in value of
the Marks, Nautilus and Acquisition have created Licensor which will own, manage
and license such Marks, including licensing the Marks to Nautilus and
Acquisition, in accordance with this Agreement and the LLC Agreement; and
G. The Parties to this Agreement desire to set forth the terms and
conditions under which Nautilus and Acquisition shall be entitled to use the
Marks. Licensor is willing to grant to Nautilus and
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Acquisition, and Nautilus and Acquisition are willing to accept, a license to
use the Marks on the terms and conditions set forth herein.
Therefore, in consideration of the mutual covenants and promises
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Licensor, Nautilus and
Acquisition agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following capitalized terms shall
have the respective meanings indicated:
1.1 "Affiliate" means "affiliate" as defined in Rule 405 promulgated
under the Securities Act of 1933, as amended.
1.2 "Asset Purchase Agreements" means the Asset Purchase Agreements
submitted by Pacific and Direct Focus, as amended, in connection with the Bid
Letter and approved by the United States Bankruptcy Court by for the District of
Colorado on September 12, 2001.
1.3 "Bid Letter" means the Bid Letter dated September 5, 2001 whereby
Direct Focus and Acquisition submitted a joint bid for acquisition of the assets
of Schwinn to the United States Bankruptcy Court for the District of Colorado.
1.4 "Combination Marks" shall mean those Marks that contain "Schwinn"
and any additional designation, e.g. "Schwinn Cycles" or "Schwinn Fitness", and
are listed as "Combination Marks" in Schedule A.
1.5 "Cycling Business" shall mean the business of engaging in the
design, manufacture, promotion, distribution and sale of Cycling Products and
services related thereto, and other products, services, parts, tires and
accessories related thereto, and which products, services, parts, and
accessories may include in the future such as would generally be considered
cycling products and services by members of the cycling industry and products,
services, parts and accessories related thereto. Clothing, footwear, apparel and
packs, bags or similar carrying items shall be included in the Cycling Business
to the extent such items are associated with being worn or used in connection
with the use, operation, maintenance or repair of a Cycling Product.
1.6 "Cycling Products" shall mean wheeled products (powered and
non-powered, motorized and non-motorized, mechanized and non-mechanized) used
for transportation or recreational purposes (excluding motorcycles, automobiles,
go-carts, all terrain vehicles and similar motorized vehicles), and related
products and services. Consistent with this definition, Cycling Products shall
include, without limitation, bicycles, tricycles, scooters, skateboards,
all-terrain boards, personal ride-on toys, in-line skates, wheelchairs and any
electric, motorized or mechanized versions of any of the foregoing, and other
similar wheeled products, but shall not include exercise or stationary products
that use or incorporate wheels, such as stationary bicycles. Cycling Products
shall also include, without limitation, miniature and toy versions of Cycling
Products, including finger bicycles and novelty items incorporating
representations or depictions or Cycling Products.
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1.7 "Defending Party" shall mean, with respect to any action under
Section 6.3, any Party other than a Non-Defending Party.
1.8 "Domain Names" shall mean the domain names and/or URLs listed on
Schedule B that incorporate the Marks.
1.9 "Fitness Business" shall mean the business of engaging in the
design, manufacture, promotion, distribution and sale of Fitness Products and
services related thereto (including fitness clubs and educational programs) and
other products, services, parts and accessories related thereto, and which
products, services, parts and accessories may include in the future such as
would generally be considered health and fitness products and services by
members of the health and fitness industry and products, services, parts and
accessories related thereto. Clothing, footwear, apparel and packs, bags or
similar carrying items shall be included in the Fitness Business to the extent
such items are associated with being worn or used in connection with the use,
operation, maintenance or repair of a Fitness Product.
1.10 "Fitness Products" shall mean products that are primarily intended
for physical exercise, physical training, health or relaxation in a health and
fitness setting and similar uses and related services, including, but not
limited to, health, fitness, nutrition (e.g. vitamins, health foods and other
sports, nutrition, body-building and weight loss food products and supplements),
diet and fitness related wellness products and services. Consistent with this
definition, Fitness Products may be used indoors or outdoors but do not consist
of Cycling Products.
1.11 "Future Marks" shall mean any trademarks or service marks created
or adopted by either of the Parties during the term of this Agreement that
constitute any variation of the Marks, incorporate in whole or in part any of
the Marks, or are a use of a Mark for a class of goods or services not
previously registered with the United States Patent and Trademark Office.
1.12 "Licensee" shall mean Nautilus or Acquisition, as the context
requires; "Licensees" shall mean Nautilus and Acquisition.
1.13 "LLC Agreement" means the Limited Liability Company Agreement for
Pacific Direct, LLC, by and between Nautilus and Acquisition dated September 20,
2001.
1.14 "Marks" shall mean the unregistered or registered service marks
and trademarks, and service marks and trademarks that are the subject of pending
applications, as set forth on Schedule A to this Agreement.
1.15 "Non-Defending Party" shall mean the Party obligated to defend an
action pursuant to Sections 6.3.1, 6.3.2, or 6.3.3.
1.16 "Non-Prosecuting Party" shall mean the Party with the primary
right to bring an action pursuant to Sections 6.2.1, 6.2.2, or 6.2.3.
1.17 "Party" or "Parties" shall mean any or all of Acquisition,
Nautilus, Licensor and their respective successors and assigns.
1.18 "Prosecuting Party" shall mean, with respect to any action under
Section 6.2, any Party other than a Non-Prosecuting Party.
1.19 "Third Party" or "Third Parties" shall mean any entity other than
a Party.
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1.20 "Unrelated Business" shall mean the business of engaging in the
design, manufacture, promotion, distribution and sale of consumer products which
are not related to either the Cycling Business or Fitness Business. Examples of
Unrelated Business include, without limitation, casual clothing and footwear,
hats, coolers, snowboards, wakeboards, water toys and other products which are
associated neither with the Cycling Business nor the Fitness Business.
ARTICLE 2
LICENSE TO USE TRADEMARKS
2.1 LICENSE OF MARKS. Subject to the terms and conditions of this
Agreement, Licensor hereby grants the following licenses to use the Marks:
2.1.1 Acquisition shall have, on a worldwide basis, an
exclusive, perpetual, royalty-free right and license to use and commercialize
the Marks (including any Combination Mark designated in Schedule A as a "Cycle
Mark") only in connection with the Cycling Business; provided, however, that
Acquisition shall not use any Combination Mark designated in Schedule A as a
"Fitness Mark". Acquisition hereby accepts such license and acknowledges and
admits that, notwithstanding its joint ownership of the Marks through ownership
of an interest in Licensor, it is expressly prohibited from using the Marks in
any way related to the Fitness Business.
2.1.2 Nautilus shall have, on a worldwide basis, an exclusive,
perpetual, royalty-free right and license to use and commercialize the Marks
(including any Combination Mark designated in Schedule A as a "Fitness Mark")
only in connection with the Fitness Business; provided, however, that Nautilus
shall not use any Combination Mark designated in Schedule A as a "Cycle Mark".
Nautilus hereby accepts such license and acknowledges and admits that,
notwithstanding its joint ownership of the Marks through ownership of an
interest in Licensor, it is expressly prohibited from using the Marks in any way
related to the Cycling Business.
2.1.3 Neither Nautilus nor Acquisition shall have any license
or other right to use the Marks in connection with an Unrelated Business, unless
such a license is hereafter specifically granted by Licensor under a separate
agreement.
2.1.4 The licenses of the Parties set forth in this Section
2.1 shall include the right to grant sub-licenses to any Third Party (including
an Affiliate) who agrees to be bound by the terms of Articles 2 and 3 hereof.
Notwithstanding any other provision of this Agreement, each of the Parties
hereby agrees to take no action that is inconsistent in any material respect
with the respective rights of the Parties granted in this Section 2.1 or that
would cause material dilution of the Marks in violation of this Agreement.
2.2 FUTURE ACTIONS.
2.2.1 The Parties shall not use any Future Marks without the
prior written consent of Licensor (which consent shall not be unreasonably
withheld, conditioned or delayed). Upon request of a Licensee to use any Future
Mark, Licensor shall determine whether such Future Mark would likely cause
confusion with, or dilution of, any Mark or infringement of an exclusive license
granted in this Agreement. If Licensor determines such use of a Future Mark is
not likely to cause confusion or dilution
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or infringement of an exclusive license granted in this Agreement, Licensor
shall create and own such Future Mark and shall apply for registration of such
Future Mark in such jurisdictions as are requested by the requesting Licensee,
and the Future Mark shall be added as a Mark under this Agreement and licensed
accordingly. The requesting Licensee shall perform all functions and execute all
documents necessary to effectuate this Paragraph.
2.2.2 To the extent permitted by law, Licensor shall file in
its name any application necessary to maintain registration of the Marks, the
Future Marks and Domain Names in the United States ("Required Filings") and may
file in its name any application necessary to maintain registration of the
Marks, the Future Marks and Domain Names in any other jurisdiction ("Permitted
Filings"). If Licensor does not make a Required Filing within the earlier of
thirty (30) days of written notice of such failure or within ten (10) days
before any filing deadline established by or binding upon the body with which
the filing is made, Licensor hereby grants Licensees an irrevocable power of
attorney to make such Required Filing in the name of Licensor on Licensor's
behalf for Marks which they are licensed to use under this Agreement. If
Licensor does not make a Permitted Filing that has been requested by a Licensee
within the earlier of thirty (30) days of written request by such Licensee or
within ten (10) days before any filing deadline established by or binding upon
the body with which the filing is made, Licensor hereby grants Licensees an
irrevocable power of attorney to make such filing in the name of Licensor on
Licensor's behalf for Marks which they are licensed to use under this Agreement.
All reasonable expenses for all Required Filings (and all Permitted Filings made
by Licensor) shall be born by Licensor. All reasonable expenses for all
Permitted Filings made by a Licensee shall be born by such Licensee.
2.2.3 At an exclusive Licensee's request, and as permitted by
law and the body with which a filing for a Mark covered by an exclusive license
is made, such Licensee shall be added as a party to receive the same notices as
Licensor receives from such filing body in respect of such filings.
2.3 Trademark Notices and Attribution. Acquisition and Nautilus shall
use reasonable efforts to ensure that the products bearing the Marks and any
services with respect to which the Marks are used and any other materials
displaying or incorporating the Marks (E.G., advertising and promotional
materials) shall include symbols and notices that are legally sufficient to give
public notice of each Party's right, title and interest thereto and to preserve
and protect the Marks. Each use of the Marks shall be followed by either the
"(TM)" or "SM" symbol (as applicable), if such use occurs before the Mark is
federally registered, or the "(R)" symbol, if such use occurs after a federal
registration (or such similar registrations as used in other jurisdictions)
issues in any jurisdiction. This Section 2.3 only requires use of such symbols
as required to give such notice, and would not, for example, require use of the
symbol every time the Mark was used in a document if the symbol was used at
least once in a manner as to provide such notice.
2.4 DOMAIN NAMES.
2.4.1 The Parties acknowledge that the existing world wide web
sites represented by the Domain Names (the "Existing Sites") currently host
content or are intended to host content related to both the Cycling Business and
Fitness Business. The Parties shall cooperate with each other to provide for the
orderly transition of the content related to the Cycling Business that is
contained on the Existing Sites to a web site or sites controlled by Acquisition
and the content related to the Fitness Business that is contained on the
Existing Sites to a web site or sites controlled by Nautilus. Each Party
consents to the other Party's use of the trade dress and other protectable look
and feel that is associated with the Existing Sites. To the extent any of the
Domain Names includes a Combination Mark, the Parties agree that right to use
such Domain Names shall be allocated between the Parties in the same manner as
the Combination
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Marks. By way of example and not of limitation, the Domain Name
"Schwinnfitness.com" is a Combination Mark and may only be used by Nautilus,
while the Domain Name "Schwinn" which is both a Mark and an Existing Site, will
be operated by the Licensor and contain links to websites maintained by Nautilus
and Acquisition relating to the Cycling Business and Fitness business,
respectively.
2.4.2 Unless otherwise agreed by the Parties, the Existing
Sites shall continue to be owned and maintained by Licensor and serve as a link
to the web sites on which the content referenced in Paragraph 2.4.1 is
transferred or any other web site related to the Cycling Business for
Acquisition and the Fitness Business for Nautilus, as reasonably requested by
the Licensees. Such links may, at the option of the Parties, be transparent to
users.
2.5 RIGHT TO SUBMIT FOR APPROVAL. Each Licensee shall have the right,
but no obligation, to submit any plan of operations, or product or service to
the Licensor and request the Licensor's response as to whether the proposed use
by such Licensee of any or all of the Marks in connection with such plan of
operations, product, or service would be permitted under this Agreement
(including the quality standards and scope of the license granted under this
Agreement). Licensor shall have twenty (20) days to notify the requesting
Licensee of Licensor's approval or disapproval, and in the case of disapproval,
the specific reasons for such disapproval in sufficient detail as to allow the
requesting Licensee to respond to such disapproval and, if it chooses to, modify
the proposed use of the Marks so that it meets the reasons for such disapproval.
If the requesting Licensee disagrees with a disapproval, its exclusive remedy is
to have the matter resolved pursuant to the dispute resolution provisions of the
LLC Agreement.
ARTICLE 3
QUALITY STANDARDS
3.1 PRESERVATION OF MARK VALUES; DISTRIBUTION OF PRODUCTS. The Parties
recognize that the value of the Marks is in part dependent on the quality of
products sold under the Marks and the lines of retail distribution of their
respective products and the manner in which lines of distribution are addressed.
Accordingly, the Parties agree as follows:
3.2 ACQUISITION QUALITY STANDARDS. All of the products and services
sold by Acquisition in connection with the Cycling Business that bear or are
designated by the Marks shall at all times comply in all material respects with
(i) all applicable laws and regulations pertaining to the marketing, rendering
and sale of the products and services connected to the Cycling Business, and
(ii) at least the minimum quality control standards, safety regulations, and
specifications established in the bicycle industry for the particular goods sold
and the particular distribution channels (e.g., higher quality standards for
specialty bicycle shop goods), where the failure to so comply with (ii) would
result in a material loss of value in the Marks. In order to prolong an
association of the Marks with high-end, specialty merchandise, Acquisition
agrees not to deliver Cycling Products that bear or are designated by the Marks
to Wal-Mart, K-Mart, Target, Toys `R Us, Sears or similar retailers, or to Sam's
Club, Costco, Warehouse Club, or other smaller warehouse-type outlets
(collectively "Restricted Stores") prior to August 1, 2002. From and after
August 1, 2002, there shall be no restriction on Acquisition's ability to
deliver Cycling products to the Restricted Stores.
3.3 NAUTILUS QUALITY STANDARDS. All of the products and services sold
by Nautilus in connection with the Fitness Business that bear or are designated
by the Marks shall at all times comply in
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all material respects with (i) all applicable laws and regulations pertaining to
the marketing, rendering and sale of the products and services connected to the
Fitness Business, and (ii) at least the minimum quality control standards,
safety regulations, and specifications established in the fitness industry for
the particular goods sold and the particular distribution channels (e.g., higher
quality standards for specialty exercise shop goods), where the failure to so
comply with (ii) would result in a material loss of value in the Marks.
3.4 LICENSOR ACTION. Upon Licensor certifying to a Licensee that
Licensor has reasonable grounds to believe (including the basis for the belief)
that such Licensee is not in compliance with this Article, Licensor shall have
the right, at its expense, to audit such Licensee's quality control standards
and procedures for compliance with this Article upon reasonable prior notice to
such Licensee, but not more than once every twelve (12) months. Upon Licensor's
reasonable written request made not more than once every twelve (12) months,
such Licensee shall provide Licensor with general information as to the types
and extent (but not dollar amount or volume of unit sales of products or
services) of Licensee's uses of the Marks. Licensee will use reasonable efforts
to include in agreements with outside suppliers, contract manufacturers and
sub-licensees a requirement that each comply in all material respects with all
applicable laws. All persons participating in the audit or with access to the
information described in this Section 3.4 shall execute and deliver a
confidentiality agreement containing the terms of Section 8.14 for the benefit
of Licensee. In the event that, in the reasonable opinion of the Licensor,
Licensee's products and services that bear or are designated by the Marks fail
to comply with the quality standards of this Article, Licensor shall give
Licensee written notice setting forth in reasonable detail such failure, and
Licensee shall, at its expense and within thirty (30) days thereafter, begin to
take such corrective action as is necessary to comply with such standards.
Failure to take such corrective action within one hundred and eighty (180) days
or such longer period as is allowed under applicable law shall constitute a
breach of this Agreement. If the Licensee disagrees with Licensor's
determination under this Section 3.4, its exclusive remedy is to have the matter
resolved pursuant to the dispute resolution provisions of the LLC Agreement.
ARTICLE 4
EXCHANGE OF INFORMATION
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 NAUTILUS. Nautilus represents and warrants as follows:
5.1.1 Nautilus has full right, power and authority to execute,
deliver and perform under this Agreement.
5.1.2 The execution, delivery and performance of this
Agreement by Nautilus do not contravene any contractual restriction binding upon
Nautilus or affecting any of its properties, or its Certificate of
Incorporation, By-Laws or comparable organizational documents.
5.1.3 This Agreement has been duly executed and delivered by
Nautilus and is a legal, valid and binding obligation of Nautilus enforceable
against Nautilus in accordance with its terms.
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5.2 ACQUISITION. Acquisition represents and warrants as follows:
5.2.1 Acquisition has full right, power and authority to
execute, deliver and perform under this Agreement.
5.2.2 The execution, delivery and performance of this
Agreement by Acquisition do not contravene any contractual restriction binding
upon Acquisition or affecting any of its properties, or its Certificate of
Formation or the LLC Agreement.
5.2.3 This Agreement has been duly executed and delivered by
Acquisition and is a legal, valid and binding obligation of Acquisition
enforceable against Acquisition in accordance with its terms.
5.3 LICENSOR. Licensor represents and warrants as follows:
5.3.1 Licensor has full right, power and authority to execute,
deliver and perform under this Agreement.
5.3.2 The execution, delivery and performance of this
Agreement by Licensor does not contravene any contractual restriction binding
upon Licensor or affect any of its properties, or its Certificate of Formation
or LLC Agreement.
5.3.3 This Agreement has been duly executed and delivered by
Licensor and is a legal, valid and binding obligation of Licensor enforceable
against Licensor in accordance with its terms.
5.4 OWNERSHIP RIGHTS. No Party warrants to the other that it owns any
right, title, or interest in the Marks or Domain Names or any other right
granted by this agreement nor that the Marks do not infringe or otherwise
violate the rights of any Third Party.
ARTICLE 6
OWNERSHIP AND INFRINGEMENT
6.1 OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY. Acquisition and
Nautilus acknowledge that their respective interests in the Marks and Domain
Names is through their joint ownership of Licensor and through the licenses
granted hereunder. No Party shall at any time do or cause to be done, or fail to
do or cause to be done, any act or thing, directly or indirectly, contesting or
in any way impairing the Licensor's ownership rights, title and interest in the
Marks or Domain Names or the licenses granted under this Agreement. The
provisions of other portions of this Agreement govern the rights and obligations
of the Parties to bring or defend infringement and other actions, and this
Section 6.1 does not obligate a Party to bring or defend any legal proceeding.
6.2 PROSECUTING INFRINGEMENT.
6.2.1 Acquisition shall have the right, at its expense, to
bring any action on account of any infringements, imitations or unauthorized use
of the Marks affecting or in competition with the Cycling Products or the
Cycling Business, and Licensor shall cooperate with Acquisition, as Acquisition
may reasonably request (including being named in such action as a plaintiff) and
at Acquisition's expense, in connection with any such action brought by
Acquisition. Nautilus shall also cooperate with respect to such action as may be
reasonably requested by Acquisition and at Acquisition's
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expense (including reimbursement of reasonable attorney's fees and
indemnification for any loss, liability, claim, damage or expense suffered by
Nautilus which directly results from any action taken at the request of
Acquisition and any judgment or award entered against Nautilus in connection
with such action). Acquisition shall be entitled to receive and retain any and
all damages, settlement, or compensation paid or recovered in connection with
any such action brought and prosecuted by Acquisition.
6.2.2 Nautilus shall have the right, at its expense, to bring
any action on account of any infringements, imitations or unauthorized use of
the Marks affecting or in competition with the Fitness Products or the Fitness
Business, and Licensor shall cooperate with Nautilus (including being named in
such action as a plaintiff), as Nautilus may reasonably request and at the
expense of Nautilus, in connection with any such action brought by Nautilus.
Acquisition shall also cooperate with respect to such action as may be
reasonably requested by Nautilus and at Nautilus's expense (including
reimbursement of reasonable attorney's fees and indemnification for any loss,
liability, claim, damage or expense suffered by Acquisition which directly
results from any action taken at the request of Nautilus and any judgment or
award entered against Acquisition in connection with such action). Nautilus
shall be entitled to receive and retain any and all damages, settlement, or
compensation paid or recovered in connection with any such action brought and
prosecuted by Nautilus.
6.2.3 Licensor shall have the right, at its expense, to bring
any action on account of any infringements, imitations or unauthorized use of
the Marks affecting or in competition with the Unrelated Business, and Licensees
shall cooperate with Licensor, as Licensor may reasonably request and at
Licensor's expense, in connection with any such action brought by Licensor.
Licensor shall be entitled to receive and retain any and all damages,
settlement, or compensation paid or received in connection with any such action
brought and prosecuted by Licensor.
6.2.4 If within the earlier of ninety (90) days after actual
knowledge of an alleged infringement, imitation, or unauthorized use, or twenty
(20) days before the time when an action must be filed to preserve a claim, the
Non-Prosecuting Party does not notify the other Parties of the Non-Prosecuting
Party`s intent to challenge, by formal or informal means (as required in the
circumstances), such infringement, imitation, or unauthorized use, a Prosecuting
Party may challenge the same, at its expense, provided that no settlement shall
be made which would adversely affect any other Party's rights in the Marks, or
which would cause a material violation by the Prosecuting Party of this
Agreement, without the prior written consent of Licensor (which shall not be
unreasonably withheld, conditioned or delayed), and, upon reasonable written
request of a Party, the Prosecuting Party shall advise such Party of the status
of the action and promptly of any material developments. The Prosecuting Party
shall retain any and all damages, settlement, or compensation paid in connection
with any such action brought and prosecuted solely by such Prosecuting Party.
6.3 DEFENDING AGAINST INFRINGEMENT.
6.3.1 Acquisition shall, at its expense, diligently defend and
shall have the right to settle any action that may be commenced against Licensor
or Licensees alleging that use of any of the Marks in the Cycling Business
infringes any right of a Third Party, provided that no settlement shall be made
which would adversely affect any other Party's rights in the Marks, or which
would cause a material violation by Acquisition of this Agreement, without the
prior written consent of the other Parties (which shall not be unreasonably
withheld, conditioned or delayed). Acquisition shall retain any and all damages,
settlement, or compensation paid in connection with any such action defended by
Acquisition. Nautilus shall have the right, at is own expense and through its
own counsel, to participate with Acquisition in any action in which Nautilus is
a named party.
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6.3.2 Nautilus shall, at its expense, diligently defend and
shall have the right to settle any action that may be commenced against Licensor
or Licensees alleging that use of any of the Marks in the Fitness Business
infringes any right of a Third Party, provided that no settlement shall be made
which would adversely affect any other Party's rights in the Marks, or which
would cause a material violation by Nautilus of this Agreement, without the
prior written consent of the other Parties (which shall not be unreasonably
withheld, conditioned or delayed). Nautilus shall retain any and all damages,
settlement or compensation paid in connection with any such action defended by
Nautilus . Acquisition shall have the right, at its own expense and through its
own counsel, to participate with Nautilus in any action in which Acquisition is
a named party.
6.3.3 Licensor shall, at its expense, diligently defend and
shall have the right to settle any action that may be commenced against Licensor
or Licensees alleging that use of any of the Marks in an Unrelated Business
infringes any right of a Third Party, provided that no settlement shall be made
which would adversely affect any other Party's rights in the Marks, or which
would cause a material violation by Licensor of this Agreement, without the
prior written consent of the other Parties (which shall not be unreasonably
withheld, conditioned or delayed). Licensor shall retain any and all damages,
settlement or compensation paid in connection with any such action defended by
Licensor. Acquisition and Nautilus shall have the right, at their own expense
and through their own counsel, to participate with Licensor in any action in
which Acquisition or Nautilus is a named party.
6.3.4 If within the earlier of thirty (30) days after service
of process in an action described in Sections 6.3.1, 6.3.2 or 6.3.3 (a "Defense
Action") on the Non-Defending Party or the date a Party gives notice to the
Non-Defending Party of service of process on it, or twenty (20) days before the
time when an answer and/or counterclaims must be filed to preserve a defense or
claim (including counterclaims or cross claims) in such Defense Action, the
Non-Defending Party does not notify the other Parties of the Non-Defending
Party's intent to file such defenses and claims, the Defending Party may file
such answer and claims and defend such action at its expense, provided that no
settlement shall be made which would adversely affect any other Party's rights
in the Marks, or which would cause a material violation by the Defending Party
of this Agreement, without the prior written consent of the other Parties (which
shall not be unreasonably withheld, conditioned or delayed), and, upon
reasonable written request of a Party, the Defending Party shall advise such
other Party of the status of the action and promptly of any material
developments. The Defending Party shall retain any and all damages, settlement
or compensation paid in connection with any such action brought and prosecuted
solely by such Defending Party.
6.3.5 If at any time a Party shall conclude that the
Non-Defending Party is not discharging its duty to diligently defend pursuant to
Paragraphs 6.3.1, 6.3.2 or 6.3.3 hereof (other than as described in Paragraph
6.3.4), such Party shall notify the Non-Defending Party of the basis for its
concern. In the event that the Non-Defending Party does not rectify the problem
in response to the notice, such Party may name itself as an additional defendant
in the matter and, at its expense, retain counsel for the defense of the same.
6.3.6 Any Party's election to participate in an action under
Paragraphs 6.3.1, 6.3.2, 6.3.3 or 6.3.5 or a Party's election to defend under
Paragraph 6.3.4 shall not waive such Party's right to indemnification under
Section 8.13.
6.4 EXCHANGE OF INFORMATION. Each Licensee shall notify Licensor and
the other Licensee of any conflicting uses of, or any actual or threatened acts
of, infringement, imitation, unauthorized use or
10
unfair competition involving use of any of the Marks or Domain Names by
unauthorized Third Parties of which Licensee becomes aware.
ARTICLE 7
TERMINATION/REMEDIES
7.1 TERMINATION.
7.1.1 Except as specifically set forth in this Agreement or in the LLC
Agreement, the licenses granted in this Agreement shall not terminate and shall
continue in perpetuity regardless of any dissolution, transfer, or change in
membership of the Limited Liability Company.
7.1.2 Licensor shall have the right to terminate a license granted
hereunder at any time with respect to a Licensee if a court or arbitrator
determines that such Licensee breached in any material respect any material
covenant or representation and warranty of this Agreement and such breach is not
cured within ninety (90) days after written decision from the court or
arbitrator.
7.2 RIGHTS AND DUTIES UPON TERMINATION. Upon termination of a license
granted hereunder:
7.2.1 The terminated Licensee shall immediately discontinue all use of
the Marks and Domain Names and shall have no further license to use the Marks,
provided that terminated Licensee's right to use the Marks shall continue with
respect to products in existence, for work in process (which may be completed at
the election of the Licensee), and for production sufficient to fulfill held
orders or obligations to customers which are to be delivered within one hundred
eighty (180) days after termination, each as of the date of such termination,
for a period of twenty-four (24) months after the date of termination; provided,
however, that, notwithstanding the foregoing, the terminated Licensee shall have
no further right to use the Marks in a way that would violate the quality
standards set forth herein;
7.2.2 All other rights under this Agreement with respect to
the terminated Licensee shall immediately terminate, and terminated Licensee
agrees to execute all such documents as are reasonably required by Licensor to
evidence Licensor's ownership of all Marks and Domain Names, including Future
Marks;
7.2.3 Termination of a license granted under this Agreement
shall not deprive a Party of its ownership interest in the Licensor except as
otherwise provided in the LLC Agreement; and
7.2.4 Termination of one license granted hereunder shall have
no effect on the license granted to the other Licensee under this Agreement.
7.3 LIMITATIONS ON REMEDIES; CURE PERIODS. Notwithstanding the
provisions of Section 7.2:
7.3.1 If a particular breach of this Agreement applies to
activities in only certain countries, the remedies (other than damages) of this
Agreement shall apply only to those countries and the rights in other countries
shall be unaffected.
7.3.2 If the breach is the result of activities of a
sub-licensee the cure periods set forth herein shall be extended by thirty (30)
days.
11
7.3.3 If the breach is a result of a governmental action
(other than a decision of a court or administrative law judge), the breaching
Party shall have additional reasonable time to pursue a reversal or stay of the
governmental action, but in any event not more than an additional sixty (60)
days.
7.3.4 If the breach relates only to a particular Mark, the
remedies (other than damages) shall apply only to that Mark and the rights as to
other Marks shall remain in force.
7.3.5 If the breach relates only to a particular class of
products or services, the right to remedies (other than damages) shall only
apply to use of the Marks with that class of products or services.
7.3.6 Remedies of this Agreement shall have no effect on
Bicycle Assets and the use thereof by Acquisition, or Fitness Assets and use
thereof by Nautilus .
7.4 Nothing in this Article 7 shall limit a Party's ability to seek and
obtain injunctive relief for infringement of the Marks by another Party or for
exceeding the scope of the licenses granted in Section 2.1.
ARTICLE 8
MISCELLANEOUS
8.1 ENTIRE AGREEMENT. This Agreement, the LLC Agreement and the Bid
Letter shall constitute the entire agreement between the Parties hereto relating
to the subject matter hereof, and supersedes and cancels all previous
negotiations, understandings and agreements between the parties regarding the
subject matter hereof. No conditions, use of trade, course of dealing,
understanding or agreement purporting to vary, explain or supplement the terms
of this Agreement shall be binding unless hereafter made in writing and signed
by all Parties.
8.2 EFFECT ON OTHER AGREEMENTS. Nothing contained herein shall create
any legal liability or obligation on the part of any Party to this Agreement
with respect to any Third Party contracts or any agreements, obligations or
liabilities of the other Party, unless a Party to this Agreement expressly
assumes such liability or obligation in a signed writing.
8.3 NATURE OF RELATIONSHIP. Though Licensor is a joint venture of the
Licensees, all work or obligations performed by the Parties hereunder shall be
performed as an independent contractors and not as an agents of the other
Parties, and the Parties acknowledge that none has authority to obligate or bind
the others in any way. No provision of this Agreement shall be construed to
create an agency, partnership or joint venture between the parties hereto.
8.4 APPLICABLE LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws principles thereof.
8.5 WAIVER. No waiver of any of the terms or conditions of this
Agreement shall be effective or binding unless such waiver is in writing and is
signed by the Party granting such waiver, nor shall this Agreement be changed,
modified, discharged or terminated other than in accordance with its terms
except by a writing signed by all Parties. Waiver by any Party of any term,
provision or condition of this
12
Agreement shall not be construed to be a waiver of any other term, provision or
condition nor shall such waiver be deemed a subsequent waiver of the same term,
provision or condition.
8.6 SEVERABILITY. In the event any provision in this Agreement shall be
deemed invalid, illegal or unenforceable, generally or in any particular
jurisdiction or circumstance, the validity, legality and enforceability of the
remaining provisions hereof and of such provisions in other jurisdictions and
circumstances, shall not in any way be affected or impaired thereby and the
Parties shall replace such invalid, illegal or unenforceable provision with a
valid, legal and enforceable provision which has as nearly as possible the same
intent and effect as the invalid, illegal or unenforceable provision.
8.7 NOTICES. Any notice required or which may be given hereunder shall
be in writing and shall be deemed to have been given (i) when delivered to the
addressee in person, (ii) when telexed or faxed by means confirming receipt,
and, if notice is telexed or faxed, a copy shall be mailed by registered or
certified mail, return receipt requested and postage prepaid, (iii) when sent by
registered or certified mail, return receipt requested and postage prepaid, four
(4) days after the date of mailing or (iv) when sent by express mail or courier
service, postage or charges prepaid, on the date of scheduled delivery,
addressed to the parties as set forth below, with proof of delivery recorded by
the service. Such notices and other communications will be sent to the Parties
at the addresses indicated below, or to such other addresses as any Party may
notify the other:
If to Nautilus :
---------------
Nautilus Inc.
1400 N.E. 136th Avenue
Vancouver, WA 98684
With a copy (which shall not constitute notice) to:
Bruce Robertson
Garvey, Schubert & Barer
1191 Second Ave, 18th Floor
Seattle, WA 98101
If to Acquisition:
-----------------
c/o Pacific Cycle, LLC
4902 Hammersley Road
Madison, Wisconsin 53711
Telephone: (608) 268-2468
Facsimile No.: (608) 268-2466
Attn: Chief Executive Officer
With a copy (which shall not constitute notice) to:
Pacific Cycle, LLC
100 Fairview Drive
Suite 100
Vernon Hills, IL 60061
Telephone: (847) 573-0686
Facsimile No.: (847) 573-0679
Attn: General Counsel
13
If to Licensor:
--------------
c/o Pacific Cycle, LLC
100 Fairview Drive
Suite 100
Vernon Hills, IL 60061
Telephone: (847) 573-0686
Facsimile No.: (847) 573-0679
Attn: General Counsel
With a copy (which shall not constitute notice) to both
Nautilus and Acquisition as set forth above.
8.8 FORCE MAJEURE. If the performance of any part of this Agreement by
any Party, or of any obligation under this Agreement, is prevented, restricted,
interfered with or delayed by reason of any cause beyond the reasonable control
of the Party liable to perform, unless conclusive evidence to the contrary is
provided by another Party, the Party so affected shall, on giving written notice
to the other Parties, be excused from such performance to the extent of and for
the period of such prevention, restriction, interference or delay, provided that
the affected Party shall use commercially reasonable efforts to avoid or remove
the causes of such prevention, restriction, interference and/or delay and shall
continue performance with the utmost dispatch whenever such causes are removed.
8.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors and
assigns (including by way of merger, consolidation or sale of all or
substantially all of the equity or assets of such Party); provided however, that
Nautilus may only assign this Agreement to a party that also acquires the part
of the Fitness Business that uses the Marks, and Acquisition may only assign
this Agreement to a person or persons that also acquires the part of the Cycling
Business that uses the Marks. Notwithstanding anything to the contrary set forth
in this Agreement, (a) either Licensee may assign some or all of its rights
hereunder to an Affiliate, provided such Affiliate agrees to be bound by the
terms hereof; and (b) either Licensee may collaterally assign as security any or
all of its rights hereunder (including, without limitation, such Licensee's
rights hereunder to sublicense the Marks and the right to assign this Agreement
pursuant to this Section 8.9) to its lenders, or its parent company's lenders,
or agent of any such lenders in connection with an existing or prospective
financing transaction so long as, in the case of such an assignment, such
Licensee also grants a security interest in or assigns the relevant Bicycle or
Fitness Assets as security for such financing transaction, and such lenders or
agent, as applicable, may assign or otherwise transfer such rights under and to
this Agreement, together with the relevant Bicycle Assets or Fitness Assets, as
applicable, to one or more persons in the exercise of their respective rights
and remedies with respect to such collateral assignment .
8.10 FURTHER ASSURANCES. Each Party hereby covenants and agrees that,
at any time from and after the Effective Date, it shall execute and deliver such
other documents as may be reasonably required to implement any of the provisions
of this Agreement.
8.11 CONSTRUCTION. Titles or captions of articles and sections
contained in this Agreement are inserted only as a matter of convenience and for
reference, and in no way define, limit, extend, or describe the scope of this
Agreement or the intent of any provision hereof. Whenever required by the
14
context, the singular number shall include the plural, the plural number shall
include the singular, and the gender of any pronoun shall include all genders.
8.12 COUNTERPARTS. This Agreement may be executed in multiple copies,
each of which shall be deemed an original and together which shall constitute
one and the same instrument.
8.13. INDEMNITY.
8.13.1 Acquisition shall indemnify Nautilus and Licensor and
defend and hold them harmless against any and all actual damages and
professional and other expenses, including, but not limited to reasonable
attorney and expert fees (collectively, "Damages") incurred or suffered by
Nautilus or Licensor arising out of any contractual, tortious or other claims or
proceedings brought against Nautilus or Licensor by a third party claiming
relief against Nautilus or Licensor by reason of the conduct of the Cycling
Business by Acquisition, except insofar as any such claims may arise from any
breach of this Agreement or the LLC Agreement by Nautilus or Licensor.
8.13.2 Nautilus shall indemnify Acquisition and Licensor and
defend and hold them harmless against any and all Damages incurred or suffered
by Acquisition or Licensor arising out of any contractual, tortious or other
claims or proceedings brought against Acquisition or Licensor by a third party
claiming relief against Acquisition or Licensor by reason of the conduct of the
Fitness Business by Nautilus , except insofar as any such claims may arise from
any breach of this Agreement or the LLC Agreement by Acquisition or Licensor.
8.13.3 The Licensees shall obtain and maintain at their
respective expense general liability insurance, including broad form coverage
for contractual liability, product liability and personal injury liability
(including bodily injury and death), consistent with that maintained by Third
Parties similarly situated. Upon request a Licensee shall provide proof of such
insurance to the other Parties.
8.14 CONFIDENTIALITY. The Parties have entered into an agreement to
maintain each other's confidential information pursuant to the LLC Agreement.
The terms of that agreement shall govern the rights and responsibilities with
respect to use and disclosure of any confidential information disclosed under
this Agreement, including the Audit provisions of Section 3.4. In addition, the
Parties acknowledge that, as a result of the purchase of the Schwinn assets,
each party may have access to information relating to the Schwinn assets that is
deemed confidential by the other Party because of its relationship to that
party's business. The Parties therefore agree that, notwithstanding any other
provision to the contrary in this Agreement or in the LLC Agreement, all
information relating to the Schwinn assets shall be treated as and subject to
the restrictions governing Confidential Information in the LLC Agreement, except
that (a) Nautilus may use and disclose any such information relating to the
Fitness Business without limitation and (b) Acquisition may use and disclose any
such information relating to the Cycling Business without limitation.
8.15 DISPUTE RESOLUTION. Article 6 notwithstanding, any dispute between
or among the Parties relating to this Agreement shall be resolved exclusively
through the dispute resolution provisions of the LLC Agreement.
[The remainder of this page is intentionally left blank.]
15
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by its duly authorized officers as of date first above written.
LICENSOR: NAUTILUS, INC.:
By:_________________________ By:______________________________
Name:_______________________ Name:____________________________
Title:______________________ Title:___________________________
SCHWINN ACQUISITION LLC:
By:______________________________
Name:____________________________
Title:___________________________
16
SCHEDULE A
MARKS
A. UNITED STATES MARKS
- -------------------------------------------------------------------------------------------------------------------
MARK GOODS/SERVICES REG. NO. REG. DATE INT'L ACTIVE/ SERIAL NO. USE
CLASS INACTIVE
- -------------------------------------------------------------------------------------------------------------------
S Bicycles 1191632 03/09/82 12 A Joint
- -------------------------------------------------------------------------------------------------------------------
S Bicycle parts and 831732 07/11/67 12 A Joint
accessories - namely
saddles and reflectors
- -------------------------------------------------------------------------------------------------------------------
GENUINE AUTHENTIC SCHWINN Bicycles and structural 2067721 06/03/97 12 A Joint
parts therefor
- -------------------------------------------------------------------------------------------------------------------
SCHWINN BICYCLES 428626 03/25/47 12 A Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycle helmets and 1909799 08/08/95 09 A Joint
computers for use by
bicyclists
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles and parts 1909911 08/08/95 12 A Joint
therefor . . .
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Cycling apparel; namely 1902797 07/04/95 25 A Joint
hats, caps, t-shirts,
shorts, sweatshirts and
gloves
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles 1665772 11/26/91 12 A Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles Puerto A Joint
Rico
7372
- -------------------------------------------------------------------------------------------------------------------
SCHWINN AMERICAN Bicycles 626119 05/01/56 12 A Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN APPROVED Bicycle parts and 952451 01/30/73 A A Joint
accessories and products
- -------------------------------------------------------------------------------------------------------------------
SCHWINN BICYCLES SALES & Bicycle repair and 1216108 11/09/82 39 A Cycles
SERVICE maintenance services
- -------------------------------------------------------------------------------------------------------------------
SCHWINN CRUISER Bicycles 1171128 09/29/81 12 A Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN CYCLE TRUCK Bicycles 371422 09/26/39 12 A Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN GIRAFFE Bicycles 1186614 01/19/82 12 A Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN QUALITY CHICAGO Bicycles 407574 06/13/44 12 A Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN SCRAMBLER Vehicle tires, more 802716 01/25/66 12 A Cycles
particularly bicycle
tires
- -------------------------------------------------------------------------------------------------------------------
SCHWINN SIDEWINDER Bicycles 1248275 08/16/83 12 A Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN SKIPPER Bicycles 616120 11/15/55 12 A Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN TWINN Tandem bicycles 772714 07/07/64 12 A Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN-QUALITY Bicycles 1532929 04/04/89 12 A Joint
- -------------------------------------------------------------------------------------------------------------------
S Bicycles 1360429 I Joint
- -------------------------------------------------------------------------------------------------------------------
AUTO CYCLE ARNOLD SCHWINN Bicycles which are 541699 I Joint
CO. CHICAGO propelled only by the
rider thereof
- -------------------------------------------------------------------------------------------------------------------
AUTO CYCLE ARNOLD SCHWINN Bicycles 1741171 I Joint
CO. CHICAGO
- -------------------------------------------------------------------------------------------------------------------
PIONEER SCHWINN Bicycle sales, service, --- I 73-374021 Joint
and advertising of same
- -------------------------------------------------------------------------------------------------------------------
17
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles and parts 915615 I Joint
therefor
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycle exerciser Illinois A Joint
60359
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles, water bottles 1130803 I Joint
and mounting cages
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Unicycles 1093196 I Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Cycling apparel - 988465 I Joint
namely, hats, caps,
t-shirts, one and
two-piece rainsuits,
shoes and gloves
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles 526131 I Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles and Parts MA I Joint
32144
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles NJ I Joint
N/A
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Bicycles 1361744 I Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN - FOR THE YOUNG IN Bicycles and parts 944513 I Joint
HEART therefor
- -------------------------------------------------------------------------------------------------------------------
SCHWINN APPROVED Bicycle parts and 760175 I Joint
accessories and products
- -------------------------------------------------------------------------------------------------------------------
SCHWINN CYCLING AND Repair and maintenance 1655037 I Joint
FITNESS SCHWINN QUALITY of bicycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN FACTORY TRAINED Conducting classroom 1114253 I Joint
SERVICE instruction in the
servicing and repairing
of bicycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN JET Bicycles 543982 I Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN MIRADA Bicycles 1339120 I Cycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN THREADS Cycling apparel; namely, ITU I 74-207989 Joint
athletic shorts,
t-shirts, caps,
sweatshirts, jackets,
sweaters and polo shirts
- -------------------------------------------------------------------------------------------------------------------
SCHWINN WESTWIND Vehicle tires, more 659349 I Cycles
particularly bicycle
tires
- -------------------------------------------------------------------------------------------------------------------
SCHWINN. . . THE BICYCLE Bicycle parts and 1063715 I Cycles
PEOPLE accessories . . .
- -------------------------------------------------------------------------------------------------------------------
SCHWINN'S CYCLING & Magazine dealing with 1673864 I Joint
FITNESS THE LEADING bicycle riding and
AUTHORITY physical fitness
- -------------------------------------------------------------------------------------------------------------------
SCHWINN-BILT Bicycles NJ I Joint
N/A
- -------------------------------------------------------------------------------------------------------------------
TEAM SCHWINN Bicycles 1127856 I Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN Exercise equipment; 1910207 08/08/95 28 A Joint
namely, stationary
bicycles, treadmills,
stair-climbing machines
and cross country ski
machines
- -------------------------------------------------------------------------------------------------------------------
YOU JUST FEEL BETTER ON A Repair and maintenance ITU I 74-300420 Joint
SCHWINN of bicycles
- -------------------------------------------------------------------------------------------------------------------
SCHWINN HOME TRAINER Exercise apparatus; 1721147 I Fitness
namely electronically
operated treadmill device
- -------------------------------------------------------------------------------------------------------------------
18
- -------------------------------------------------------------------------------------------------------------------
MASTER SCHWINN Common Law Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN FITNESS Common law Fitness
- -------------------------------------------------------------------------------------------------------------------
STING-RAY Speedometers 0855541 8/27/68 09 A 72/282.398 Joint
- -------------------------------------------------------------------------------------------------------------------
SCHWINN FITNESS Common law Fitness
INTERNATIONAL
- -------------------------------------------------------------------------------------------------------------------
ITALICS: SUPPLEMENTAL REGISTER
B. INTERNATIONAL REGISTERED TRADEMARKS (ALL JOINT USE)
- -------------------------------------------------------------------------------------------------------------
COUNTRY NAME MARK REG. NO. REG. INT'L GOODS SERIAL #
DATE CLASS
- -------------------------------------------------------------------------------------------------------------
Argentina SCHWINN QUALITY & 1597419 7/1/85 12 Bicycles 258242
Design
- -------------------------------------------------------------------------------------------------------------
Aruba SCHWINN 12877 1/1/86 12 Bicycles 070757
- -------------------------------------------------------------------------------------------------------------
Australia SCHWINN B488249 6/1/88 28 Stationary bicycle 488249
exercisers
- -------------------------------------------------------------------------------------------------------------
Australia SCHWINN B488248 6/1/88 12 Bicycles and parts thereof 488248
- -------------------------------------------------------------------------------------------------------------
Australia SCHWINN QUALITY & A550848 2/21/91 12 Bicycles 550848
Design
- -------------------------------------------------------------------------------------------------------------
Austria SCHWINN 136153 6/17/91 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Austria SCHWINN QUALITY & 136559 7/17/91 12 Bicycles and parts thereof; AM55991
Design bicycle frames and bicycle
tires
- -------------------------------------------------------------------------------------------------------------
Benelux SCHWINN 491597 2/12/91 12 Bicycles 759608
- -------------------------------------------------------------------------------------------------------------
Benelux SCHWINN 472221 1/22/90 1, 2, Bicycles and parts thereof
3, 4,
9,
12,
14,
25, 28
- -------------------------------------------------------------------------------------------------------------
Benelux SCHWINN QUALITY 494929 2/12/91 12 Bicycles 759598
- -------------------------------------------------------------------------------------------------------------
Bolivia SCHWINN & Design 6086C 8/2/44 12 Bicycles and parts thereof 11015A
- -------------------------------------------------------------------------------------------------------------
Brazil SCHWINN 816090777 10/29/96 12 Bicycles and parts thereof; 816090777
bicycle frames and bicycle
tires
- -------------------------------------------------------------------------------------------------------------
Brazil SCHWINN 819991465 9/28/99 28 Stationary bicycle 819991465
exercisers
- -------------------------------------------------------------------------------------------------------------
Brazil SCHWINN QUALITY & 816090718 10/29/96 12 Bicycles 816090718
Design
- -------------------------------------------------------------------------------------------------------------
Canada SCHWINN 31926 11/1/48 12 Bicycles, bicycle 201046
stationary exercisers
- -------------------------------------------------------------------------------------------------------------
Chile SCHWINN 392807 5/27/82 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Chile SCHWINN 509687 4/8/98 28
- -------------------------------------------------------------------------------------------------------------
China SCHWINN 502701 10/30/89 28 Dyestuffs, paints, 8844075
pigments, coating
materials, printing ink
(sporting articles)
- -------------------------------------------------------------------------------------------------------------
China SCHWINN 204611 2/14/84 12, 28 Bicycles and parts thereof 204611
- -------------------------------------------------------------------------------------------------------------
China SCHWINN & Design 650943 8/1/94 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Columbia SCHWINN 231028 8/24/00 28
- -------------------------------------------------------------------------------------------------------------
Costa Rica SCHWINN 11439/8673 3/8/89 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Costa Rico SCHWINN 123322 12/11/00 28 Bicycles
- -------------------------------------------------------------------------------------------------------------
Denmark SCHWINN 836591 11/22/91 12 Bicycles and parts thereof; VA112391
bicycle frames/tires
- -------------------------------------------------------------------------------------------------------------
19
- -------------------------------------------------------------------------------------------------------------
Denmark SCHWINN QUALITY & 836691 11/22/91 12 Bicycles and parts thereof; VA112491
Design bicycle frames, tires
- -------------------------------------------------------------------------------------------------------------
Ecuador SCHWINN 461495 11/9/90 12 Bicycles 1888790
- -------------------------------------------------------------------------------------------------------------
El Salvador SCHWINN 017124 10/19/69 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Finland SCHWINN 119754 6/5/92 12 Bicycles 61591
- -------------------------------------------------------------------------------------------------------------
Finland SCHWINN QUALITY & 140408 10/20/95 12 Bicycles and parts thereof, 61691
Design bicycle frames and tires
- -------------------------------------------------------------------------------------------------------------
France SCHWINN 1722439 2/19/91 12 Bicycles 268524
- -------------------------------------------------------------------------------------------------------------
France SCHWINN 1197321 3/4/82 09, Apparatus and instruments 622764
20, 28 for measuring and control
- -------------------------------------------------------------------------------------------------------------
France SCHWINN QUALITY & 1722438 2/19/91 12 Bicycles and parts thereof 268523
Design
- -------------------------------------------------------------------------------------------------------------
Germany SCHWINN 1047388 4/19/83 9, Bicycles SCH3702712W
10,
14,
20, 28
- -------------------------------------------------------------------------------------------------------------
Germany SCHWINN 2014951 2/18/91 12 Bicycles SCH3702712W
- -------------------------------------------------------------------------------------------------------------
Germany SCHWINN QUALITY & 2034846 2/18/91 12 Bicycles and parts thereof; SCH3702812
Design bicycle frames and bicycle
tires
- -------------------------------------------------------------------------------------------------------------
Guatemala SCHWINN 007050 8/20/94 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Guatemala SCHWINN 107912 11/30/00 28
- -------------------------------------------------------------------------------------------------------------
Honduras SCHWINN 005457 5/14/49 12 Bicycles 5457
- -------------------------------------------------------------------------------------------------------------
Hong Kong SCHWINN B29631990 11/19/88 12 Bicycles and parts thereof 742488
- -------------------------------------------------------------------------------------------------------------
Hungary SCHWINN 127401 8/11/88 12, Bicycles and parts and 247887
25, 28 fittings; clothing,
footwear, and headgear;
gymnastic and sporting
articles; machines and
appliances
- -------------------------------------------------------------------------------------------------------------
India SCHWINN 283709 10/26/72 12 Bicycles 283709
- -------------------------------------------------------------------------------------------------------------
India SCHWINN & Design 283655 10/24/72 12 Bicycles 283655
- -------------------------------------------------------------------------------------------------------------
Indonesia SCHWINN 359842 5/30/96 28 16688
- -------------------------------------------------------------------------------------------------------------
Italy SCHWINN 402249 2/25/82 28 Bicycles 17663
- -------------------------------------------------------------------------------------------------------------
Italy SCHWINN 611765 12/16/93 12 Bicycles 91810
- -------------------------------------------------------------------------------------------------------------
Italy SCHWINN QUALITY & 611770 12/16/93 12 Bicycles 91815
Design
- -------------------------------------------------------------------------------------------------------------
Japan SCHWINN 1913188 11/27/86 28 Mechanical implements for 2060384
training human body, and
other articles
- -------------------------------------------------------------------------------------------------------------
Japan SCHWINN QUALITY & 2723478 11/7/97 12 Bicycles 20381
Design
- -------------------------------------------------------------------------------------------------------------
Korea SCHWINN 253722 11/6/92 12 Bicycles 317191
- -------------------------------------------------------------------------------------------------------------
Korea SCHWINN QUALITY & 253723 11/6/92 12 Bicycles 317291
Design
- -------------------------------------------------------------------------------------------------------------
Mexico SCHWINN 368900 10/26/88 12 Bicycles and parts thereof 051209
- -------------------------------------------------------------------------------------------------------------
Mexico SCHWINN 620994 5/26/97 28 Bicycle type exercisers 296119
- -------------------------------------------------------------------------------------------------------------
Mexico SCHWINN QUALITY & 416794 3/4/91 12 Bicycles 107800
Design
- -------------------------------------------------------------------------------------------------------------
Netherlands SCHWINN 002292 4/25/89 12 Bicycles
Antilles
- -------------------------------------------------------------------------------------------------------------
New Zealand SCHWINN 606132 1/5/00 28 Bicycle type exercisers 606132
- -------------------------------------------------------------------------------------------------------------
20
- -------------------------------------------------------------------------------------------------------------
New Zealand SCHWINN 136319 3/11/81 12 Bicycles and accessories 136319
- -------------------------------------------------------------------------------------------------------------
Nicaragua SCHWINN 005920 3/7/49 12 Bicycles 5920
- -------------------------------------------------------------------------------------------------------------
Panama SCHWINN 002714 7/23/59 12 Bicycles 2714
- -------------------------------------------------------------------------------------------------------------
Paraguay SCHWINN 113117 11/19/84 12 Bicycles 001625
- -------------------------------------------------------------------------------------------------------------
Peru SCHWINN 63777 5/29/00 28
- -------------------------------------------------------------------------------------------------------------
Peru SCHWINN 086270 7/24/90 12 Bicycles 167312
- -------------------------------------------------------------------------------------------------------------
Puerto Rico SCHWINN 007372 5/11/49 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Singapore SCHWINN 85583 2/18/83 28 Exercise apparatus and
equipment, and parts and
fittings therefor
- -------------------------------------------------------------------------------------------------------------
South Africa SCHWINN 821374 2/16/82 28 Bicycles and parts therefor 821374
- -------------------------------------------------------------------------------------------------------------
South Africa SCHWINN 832237 4/13/83 12 Bicycles 832237
- -------------------------------------------------------------------------------------------------------------
South Africa SCHWINN QUALITY & 910707 2/5/91 12 Bicycles 070791
Design
- -------------------------------------------------------------------------------------------------------------
Spain SCHWINN 1618901 2/20/91 12 Bicycles 1618901
- -------------------------------------------------------------------------------------------------------------
Spain SCHWINN & Design 691159 6/29/75 12 Bicycles 691159
- -------------------------------------------------------------------------------------------------------------
Surinam SCHWINN & Design 004535 5/26/44 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Sweden SCHWINN QUALITY & 242039 11/13/92 12 Bicycles and parts thereof; 911023
Design bicycle frames and bicycle
tires
- -------------------------------------------------------------------------------------------------------------
Switzerland SCHWINN 387862 2/19/91 12 Bicycles 115891
- -------------------------------------------------------------------------------------------------------------
Switzerland SCHWINN QUALITY & 387904 1/17/92 12 Bicycles 116191
Design
- -------------------------------------------------------------------------------------------------------------
Taiwan SCHWINN 733045 11/16/96 12
- -------------------------------------------------------------------------------------------------------------
Taiwan SCHWINN QUALITY & 650943 8/1/94 28 All kinds of bicycles and 82022011
Design assemblies, components, and
parts
- -------------------------------------------------------------------------------------------------------------
United Kingdom SCHWINN 1454162 11/1/91 12 Bicycles 1454162
- -------------------------------------------------------------------------------------------------------------
United Kingdom SCHWINN QUALITY & 1454161 12/20/91 12 Bicycles 1454161
Design
- -------------------------------------------------------------------------------------------------------------
Uruguay SCHWINN & Design 229884 10/31/89 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
Venezuela SCHWINN & Design 016328 11/26/45 12
- -------------------------------------------------------------------------------------------------------------
Virgin Islands SCHWINN 005498 3/25/87 12 Bicycles
- -------------------------------------------------------------------------------------------------------------
C. INTERNATIONAL PENDING TRADEMARKS (ALL JOINT USE)
- --------------------------------------------------------------------------------------------------------------------
COUNTRY NAME MARK SER. NO. INT'L GOODS
CLASS
- --------------------------------------------------------------------------------------------------------------------
Argentina SCHWINN 2084410 28 Sporting goods
- --------------------------------------------------------------------------------------------------------------------
Ecuador SCHWINN 101575 28 Exercise apparatus and equipment, and
parts and fittings therefor
- --------------------------------------------------------------------------------------------------------------------
Indonesia SCHWINN D0025118 12 Bicycles and parts
- --------------------------------------------------------------------------------------------------------------------
Paraguay SCHWINN 29385-1999 28 Exercise apparatus and equipment, and
parts and fittings therefor
- --------------------------------------------------------------------------------------------------------------------
Venezuela SCHWINN 585-189/00 28 Exercise apparatus and equipment, and
parts and fittings therefor
- --------------------------------------------------------------------------------------------------------------------
21
SCHEDULE B
DOMAIN NAMES
- ------------------------------ ------------------------------
DOMAIN NAME USE
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn.net Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnbike.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnbmx.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinncycles.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnepicenter.com Fitness
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinneurope.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnfitness.com Fitness
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn-fitness.com Fitness
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnfitnessacademy.com Fitness
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn-gt.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn-gt.net Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinngt.net Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn-gtdealernet.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn-gtdealernet.net Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinn-international.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinngtint.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinngt-int.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnonline.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnracing.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnreporter.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Schwinnripp.com Fitness
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Sportshaus.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Ignaz.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Cranktv.com Cycles
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Bikesnfitness.com Joint
- ------------------------------ ------------------------------
- ------------------------------ ------------------------------
Fitnessandbikes.com Joint
- ------------------------------ ------------------------------
22