Nautilus 2009 Annual Report Download - page 80

Price ”) equal to the sum of (a) the value as of the Closing Date of the Schwinn Commercial Indoor Cycle inventory, and (b) the value as of the
Closing Date of all open purchase orders for Schwinn Commercial Indoor Cycle products. At Closing, Buyer will pay to Nautilus an amount (the
“ Estimated Purchase Price ”) equal to the sum of (a) Three Million U.S. Dollars ($3,000,000), which represents the estimated value of the
Schwinn Commercial Indoor Cycle inventory as of the Closing Date, and (b) the estimated value as of the Closing Date of all open purchase
orders for Schwinn Commercial Indoor Cycle products, as determined in good faith by Nautilus three (3) business days prior to the Closing
Date; provided , that for the purpose of determining both the Estimated Purchase Price and the final Purchase Price, the minimum value of such
open purchase orders shall be One Million Five Hundred Thousand U.S. Dollars (U.S.$1,500,000) and the maximum value of such open
purchase orders shall be Two Million Five Hundred Thousand U.S. Dollars ($2,500,000). The Purchase Price shall be finally determined as
provided in Section 2.4 below. The Estimated Purchase Price shall be paid to Nautilus at Closing in cash payable by wire transfer or delivery of
other immediately available funds.
2.4 Adjustment Procedure .
(a) Nautilus will prepare financial statements (“ Closing Financial Statements ”) of Schwinn setting forth the value as of the
Closing Date of the Schwinn Commercial Indoor Cycle inventory and the Schwinn Commercial Indoor Cycle open purchase orders, in
each case determined in accordance with GAAP and consistent with Nautilus’ past practice with regard to the preparation of its financial
statements. Nautilus will deliver the Closing Financial Statements to Buyer within sixty (60) days after the Closing Date. If within thirty
days following delivery of the Closing Financial Statements Buyer has not given Nautilus notice of its objection to the Closing Financial
Statements (such notice must contain a statement of the basis of Buyer’s objection), then the inventory and open purchase order amounts
reflected in the Closing Financial Statements will be used in computing the Purchase Price. If Buyer gives such notice of objection, then
the issues in dispute will be submitted to , certified public accountants (the “ Accountants ”), for resolution. If issues in
dispute are submitted to the Accountants for resolution, (i) each party will furnish to the Accountants such workpapers and other
documents and information relating to the disputed issues as the Accountants may request and are available to that party or its Subsidiaries
(or its independent public accountants), and will be afforded the opportunity to present to the Accountants any material relating to the
determination and to discuss the determination with the Accountants; (ii) the determination by the Accountants, as set forth in a notice
delivered to both parties by the Accountants, will be binding and conclusive on the parties; and (iii) Buyer and Nautilus will each bear 50%
of the fees of the Accountants for such determination.
(b) On the tenth business day following the final determination of the Purchase Price (based on the valuations determined in
accordance with Section 2.4(a) above), if the Purchase Price is greater than the Estimated Purchase Price, Buyer will pay the difference to
Nautilus, and if the Purchase Price is less than the Estimated Purchase Price, Nautilus will pay the difference to Buyer. No interest shall
accrue on any such payments. Payments must be made in cash by wire transfer or other immediately available funds.
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