Nautilus 2009 Annual Report Download - page 163

assignments in the forms attached hereto as Exhibit B and (ii) such other instruments of sale, transfer, conveyance, and assignment as Buyer and
its counsel may reasonably request; (d) Buyer will execute, acknowledge (if appropriate), and deliver to Nautilus (i) an assumption in the form
attached hereto as Exhibit C and (ii) such other instruments of assumption as Nautilus and its counsel may reasonably request; (e) Buyer will
deliver to Nautilus the consideration specified in Section 2.3 above, including the Promissory Note and the Security Agreement described in
Schedule 2.3; and (f) Nautilus and Buyer shall enter into the Lease Agreement and the License Agreement.
2.6 Allocation . The Parties agree to allocate the Purchase Price (and all other capitalizable costs) among the Acquired Assets for all
purposes (including financial accounting and tax purposes) in accordance with the allocation schedule attached hereto as Exhibit D .
2.7 Accounts Payable Reconciliation . As soon as reasonably practicable after completion of the Physical Inventory Report, as defined in
Schedule 2.3, but in any even no later than fifteen (15) days after the Closing Date, Nautilus and Buyer shall reconcile in good faith any accounts
payable related to the Business under the following guidelines:
(i) Any accounts payable related to inventory included in the Physical Inventory Report shall be the responsibility of Nautilus, shall
be a retained liability of Nautilus, and Nautilus shall indemnify and hold Buyer harmless from and against any and all such accounts
payable.
(ii) Any accounts payable related to inventory not included in the Physical Inventory Report and to be delivered after completion of
the Physical Inventory Report shall be assumed by Buyer as an Assumed Liability, and Buyer shall indemnify and hold Nautilus harmless
from and against any and all such accounts payable.
2.8 Finished Goods Inventory . The Commercial Fitness Equipment finished goods inventory is not included in the Acquired Assets and
ownership of such inventory shall be retained by Nautilus. Buyer agrees to warehouse, free of charge, the Commercial Fitness Equipment
finished goods inventory on behalf Nautilus. Buyer further agrees to use commercially reasonable efforts to market and sell such inventory to
Buyer’s customers. Nautilus agrees to sell such inventory at the pricing set forth in Schedule 2.8, to Buyer for resale to Buyer’
s customers. Buyer
shall pay Nautilus within 60 days from date of each individual shipment to Buyer’s customers. Any Technology Goods listed on Schedule 2.8
that are not sold by Buyer as of September 29, 2010 shall be retained by Nautilus and removed from Buyer’s warehouse at the expense of
Nautilus no later than October 15, 2010. Any Finished Goods Inventory, other than Technology Goods, listed on Schedule 2.8 that are not sold
by Buyer as of September 29, 2010 shall be sold to Buyer as of that date at the pricing set forth in Schedule 2.8, with payment being due on or
before December 29, 2010.
ARTICLE 3 - NAUTILUS’ REPRESENTATIONS AND WARRANTIES
Nautilus represents and warrants to Buyer that the statements contained in this Article 3 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the
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