Nautilus 2009 Annual Report Download - page 77

SCHWINN ASSET PURCHASE AGREEMENT
This Schwinn Asset Purchase Agreement (this “ Agreement ”) is entered into as of December 5, 2009 by and between Fit Dragon
International, Ltd., a British Virgin Islands corporation (“ Buyer ”), and Nautilus, Inc., a Washington corporation ( “Nautilus ”). Buyer and
Nautilus are referred to collectively herein as the
“ Parties .”
This Agreement contemplates a transaction in which Buyer will purchase certain assets (and assume certain liabilities) of Nautilus in return
for cash.
Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as follows.
ARTICLE 1 - DEFINITIONS
“ Accountants ” has the meaning set forth in Section 2.4(a) below.
“ Acquired Assets ” means all right, title, and interest in and to the following assets of Nautilus: (a) the Schwinn Commercial Indoor
Cycle inventory, consisting of Schwinn Commercial Indoor Cycle finished goods and parts, as set forth on Section 3.7 of the Disclosure
Schedules; (b) all owned production and tooling equipment used exclusively in the manufacture of Schwinn Commercial Indoor Cycle products;
and (c) all customer purchase orders for Schwinn Commercial Indoor Cycle products that are open as of the Closing Date.
“ Adverse Consequences ” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses.
“ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.
“ Assumed Contracts ” means all contracts set forth on Section 3.8 of the Disclosure Schedules, including without limitation all customer
purchase orders for Schwinn Commercial Indoor Cycle products that are open as of the Closing Date.
“ Assumed Liabilities ” means the following liabilities and obligations of Nautilus (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become
due): (a) all warranty liability for Schwinn Commercial Indoor Cycle products; (b) the liabilities and obligations set forth on Schedule 2.2 hereto;
(c) the liabilities and obligations under the Assumed Contracts; and (d) all liabilities and obligations arising or related to ownership or use of the
Acquired Assets.
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