Nautilus 2009 Annual Report Download - page 82

assumptions referred to in Article 2 above) by Nautilus, will (a) violate any constitution, statute, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Schwinn is subject or any provision of the
charter or bylaws of Nautilus or (b) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Schwinn is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien
upon any of Schwinn’s assets), except where the violation, conflict, breach, default, acceleration, termination, modification, cancellation, failure
to give notice, or Lien would not have a material adverse effect on Schwinn. Nautilus need not give notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and assumptions referred to in Article 2 above), except where the failure to give
notice, to file, or to obtain any authorization, consent, or approval would not have a material adverse effect on Schwinn. For purposes of this
Section 3.3, an adverse effect shall be considered “material” if it results in a loss or liability in excess of Three Hundred Thousand U.S. Dollars
($300,000).
3.4 Brokers’ Fees
. Nautilus has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Buyer could become liable or obligated.
3.5 Title to Assets . Nautilus has good and marketable title to, or a valid leasehold interest in, the Acquired Assets, free and clear of all
Liens or restriction on transfer.
3.6 Financial Information . Attached hereto as Exhibit E is selected historical financial information related to Schwinn (collectively the “
Financial Information ”). The Financial Information was derived from Nautilus financial statements prepared in accordance with GAAP
throughout the periods covered thereby.
3.7 Inventory . The Schwinn inventory included in the Acquired Assets consists of Commercial Indoor Cycle parts and finished goods, all
of which is merchantable and fit for the purpose for which it was procured or manufactured, as set forth on Section 3.7 of the Disclosure
Schedules, none of which is slow-moving, obsolete, damaged, or defective, subject only to the reserve for inventory writedown set forth in the
Financial Information.
3.8 Contracts . With respect to the contracts and agreements set forth on Section 3.8 of the Disclosure Schedules (the “Assumed
Contracts”), to the Knowledge of Nautilus: (i) the agreement is legal, valid, binding, enforceable, and in full force and effect in all material
respects; (ii) no party is in material breach or default, and no event has occurred that with notice or lapse of time would constitute a material
breach or default, or permit termination, modification, or acceleration, under the agreement; and (iii) no party has repudiated any material
provision of the agreement.
3.9 Terms of Sale. Substantially all of the Commercial Indoor Cycle products manufactured, sold, leased, or delivered by Schwinn are
subject to standard terms and conditions of sale or lease, copies of which have been made available to Buyer.
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