Nautilus 2007 Annual Report Download - page 100

Intellectual Property Claim : any claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s or Subsidiary’s ownership,
use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual
Property.
Interest Period : as defined in Section 3.1.3 .
Inventory : as defined in the UCC, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw
materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping,
advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding Equipment).
Inventory Formula Amount : the lesser of
(a) $50,000,000; or
(b)(i) the lesser of (A) 70% of the Value of Eligible Inventory or (B) 85% of the NOLV Percentage of the Value of Eligible Inventory,
plus
(ii) the lesser of (A) $7,000,000 or (B) 70% of the Value of Eligible In-Transit Inventory.
Inventory Reserve
: reserves established by Agent to reflect factors that may negatively impact the Value of Inventory, including change in
salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.
Investment : any acquisition of all or substantially all assets of a Person; any acquisition of record or beneficial ownership of any Equity
Interests of a Person; or any advance or capital contribution to or other investment in a Person.
IP Limitations : as set forth in Section 7.8 .
IRS : the United States Internal Revenue Service.
Issuing Bank : Bank of America or an Affiliate of Bank of America.
Issuing Bank Indemnitees : Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.
LandAmerica Acquisition : the consummation of both the Asset Purchase Agreement by and among Nautilus, Inc., and Land America
Health & Fitness Co., Ltd., Michael C. Bruno, Yang Lin Qing dated October 17, 2007, and the Asset Purchase Agreement by and among
Nautilus, Inc,. and Treuriver Investments Limited, Michael C. Bruno, Yang Lin Qing dated October 17, 2007;
provided that the Obligors shall
not make payments to the sellers under such Asset Purchase Agreements or to any other Person in connection with the LandAmerica Acquisition
in excess of $49,500,000 in the aggregate, the timing of which payments shall be limited as follows: (a) during the period between the Closing
Date and the closing of the Disclosed Sale, such payments shall not exceed $5,000,000 (which amount shall be paid from the escrow account set
up in connection with the LandAmerica Acquisition or from the proceeds of such escrow account, provided that in the event the proceeds of the
escrow account have been commingled with other assets of Borrowers and their Subsidiaries, such payment shall only be permitted
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