Document:

Exhibit 10.31  

EXECUTION COPY  

FIFTH AMENDMENT TO

INTERACTIVE HEALTH LLC CREDIT AGREEMENT  

        This Fifth Amendment to Credit Agreement ("Fifth Amendment") is
made as of this 18th day of August, 2004 by and among Interactive Health LLC, a Delaware limited liability company ("Company"), Interactive
Health, Inc., a Delaware corporation ("Holdings") and Comerica Bank, a Michigan banking corporation ("Bank"). 

RECITALS  

        A.    Company
and Bank entered into that certain Interactive Health LLC Credit Agreement dated as of December 30, 2003, as amended by that certain First Amendment dated
as of January 30, 2004, that certain Second Amendment dated as of February 13, 2004, that Third Amendment dated as of March 22, 2004 and that Fourth Amendment dated as of
June 30, 2004 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"). 

        B.    Company
has requested that Bank make certain amendments to the Credit Agreement in connection therewith, and Bank is willing to do so, but only on the terms and
conditions set forth in this Fifth Amendment. 

        NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good
and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Company and the Bank agree as follows: 

	1.
	The
references to "$20,000,000" in the definitions of "Acceptance Maximum Amount", "Letter of Credit Maximum Amount (Commercial)" and "Revolving Credit Aggregate Commitment" in
Section 1 of the Credit Agreement, in Section 4.1(a) of the Credit Agreement and on Schedule 5.7 to the Credit Agreement, are hereby deleted and replaced with "$30,000,000".

	2.
	The
references to "Twenty" in the definitions of "Acceptance Maximum Amount", "Letter of Credit Maximum Amount (Commercial)" and "Revolving Credit Aggregate Commitment" in
Section 1 of the Credit Agreement are hereby deleted and replaced with "Thirty".

	3.
	The
reference to $600,000 in Section 9.7 is hereby deleted and replaced with $1,000,000.

	4.
	This
Fifth Amendment shall become effective (according to the terms hereof) on the date (the "Fifth Amendment Effective Date") that the
following conditions have been fully satisfied by the Company (the "Conditions") (which shall be confirmed by the Bank by the delivery and release to
the Company of its signature page to this Fifth Amendment):

	(a)
	Bank
shall have received via facsimile (followed by the prompt delivery of original signatures) counterpart originals of this Fifth Amendment, in each case duly executed and delivered
by the Company and the Bank.

	(b)
	Bank
shall have received the Reaffirmation of Loan Documents, executed and delivered by each Loan Party in the form attached to this Fifth Amendment as Attachment 1.

	(c)
	Bank
shall have received a certification from the Company and each of the Loan Parties dated as of the Fifth Amendment Effective Date that, after giving effect to the amendments
contained herein, (a) execution and delivery of this Fifth Amendment and the other Loan Documents required to be delivered hereunder, and the performance by the Loan Parties of their respective
obligations under the Credit Agreement as amended hereby (herein, as so amended, the "Amended Credit Agreement") are within such undersigned's powers, have been duly authorized, are not in
contravention of law or the terms of its articles of incorporation or bylaws or other organic documents of the parties thereto, as applicable, and except as have 

 

been
previously obtained do not require the consent or approval, material to the amendments contemplated in this Fifth Amendment, of any governmental body, agency or authority, and the Amended Credit
Agreement and the other Loan Documents required to be delivered hereunder will constitute the valid and binding obligations of such undersigned parties enforceable in accordance with its terms, except
as enforcement thereof may be limited by applicable bankruptcy, reorganization, insolvency, moratorium, ERISA or similar laws affecting the enforcement of creditors' rights generally and by general
principles of equity (whether enforcement is sought in a proceeding in equity or at law), (b) the representations and warranties set forth in Sections 7.1 through 7.14, inclusive, of the
Amended Credit Agreement are true and correct on and as of the Fifth Amendment Effective Date (except to the extent such representations specifically relate to an earlier date), and (c) on and
as of the Fifth Amendment Effective Date, after giving effect to this Fifth Amendment and Consent, no Default or Event of Default shall have occurred and be continuing. 

	(d)
	Each
Loan Party shall have delivered revisions or updates to the Schedules of the Credit Agreement and the Security Agreement, or shall have provided a certification that no change
shall have occurred with respect to any such Schedules.

	(e)
	Company
shall have paid to Bank all interest, fees and other amounts, if any, owed to the Bank and accrued to the Fifth Amendment Effective Date.

	5.
	Except
as specifically set forth above, this Fifth Amendment shall not be deemed to amend or alter in any respect the terms and conditions of the Credit Agreement (including without
limitation all conditions and requirements for Advances and any financial covenants), any of the Revolving Credit Notes issued thereunder or any of the other Loan Documents. Nor shall this Fifth
Amendment constitute a waiver or release by the Bank of any right, remedy, Default or Event of Default under or a consent to any transaction not meeting the terms and conditions of the Credit
Agreement, any of the Revolving Credit Notes issued thereunder or any of the other Loan Documents. Furthermore, this Fifth Amendment shall not affect in any manner whatsoever any rights or remedies of
the Bank with respect to any other non-compliance by the Company with the Credit Agreement or the other Loan Documents, whether in the nature of a Default or Event of Default, and whether
now in existence or subsequently arising, and shall not apply to any other transaction.

	6.
	Company
and each other Loan Party hereby acknowledges and agrees that this Fifth Amendment and the amendments contained herein do not constitute any course of dealing or other basis
for altering any obligation of the Company, any other Loan Party or any other party or any rights, privilege or remedy of the Bank under the Credit Agreement, any other Loan Document, any other
agreement or document, or any contract or instrument.

	7.
	Except
as specifically defined to the contrary herein, capitalized terms used in this Fifth Amendment shall have the meanings set forth in the Credit Agreement.

	8.
	This
Fifth Amendment may be executed in counterpart in accordance with Section 11.11 of the Credit Agreement.

	9.
	This
Fifth Amendment shall be construed in accordance with and governed by the laws of the State of Michigan. 

[Signature Page Follows] 

2

 

        WITNESS
the due execution hereof as of the day and year first above written. 

	COMERICA BANK	 	INTERACTIVE HEALTH LLC
	

By:	
 	

/s/  [ILLEGIBLE]      
	
 	

By:	
 	

/s/  [ILLEGIBLE]      

	

Its:	
 	

Managing Director
	
 	

Its:	
 	

CFO

	

 	
 	

 	
 	
INTERACTIVE HEALTH INC.
	

 	
 	

 	
 	

By:	
 	

/s/  [ILLEGIBLE]      

	

 	
 	

 	
 	

Its:	
 	

CFO

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Exhibit 10.32  

 
 

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT    
    

        This Amendment No. 1 (this "Amendment") to the Employment Agreement, dated as of August 22, 2003 (the "Agreement") between Interactive
Health, Inc., a Delaware corporation (the "Company") and Thomas Dragotto, an individual ("Executive") is entered into this 28th day of May, 2004. Capitalized terms used in this Amendment and
not otherwise defined shall have the meanings ascribed to them in the Agreement. 

        WHEREAS,
the parties hereto desire to amend the Agreement pursuant to Section 13 thereof. 

        NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, IH and Executive hereto hereby agree as follows: 

        (1)   Section 3(a)
of the Agreement is hereby amended and restated to read in its entirety as follows: 

"(a)    Base
Salary.    In consideration of the services to be rendered under this Agreement, IH shall pay Executive One Hundred Eighty Thousand Dollars ($180,000) per year
("Base Salary"), payable bi-weekly (i.e., once every two weeks), pursuant to, the procedures regularly established, and as they may be
amended, by IH in its sole discretion, during the Period of Employment. All compensation and comparable payments to be paid to Executive under this Agreement shall be less withholdings required by
law. The Base Salary will be reviewed by and shall be subject to upward adjustment at the sole discretion of the Board each year during the term of this Agreement." 

        (2)   Section 3(e)
of the Agreement is hereby amended to add that: 

        "IH
shall grant to Executive an additional Option to purchase 67,581 shares (pre-IPO share split) of Common Stock at an Exercise Price equal to the price per share of IH
Common Stock
sold in IH's proposed initial public offering ("IPO"), upon the closing of such IPO, subject to the terms, definitions and provisions of this Agreement and the Plan." 

        (2)   Except
as modified hereby, the Agreement, as heretofore amended, shall remain in full force and effect and unmodified. 

        (3)   Telefacsimile
transmissions of any executed original document and/or retransmission of any executed telefacsimile transmission shall be deemed to be the same as the
delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm telefacsimile transmissions by executing duplicate original documents and delivering the
same to the requesting party or parties. This Amendment may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement. 

        (4)   Except
as expressly provided in Section 19 of the Agreement, as amended, this Amendment shall be governed by, construed in accordance with, and enforced under,
the law of the state of California applicable to agreements or instruments entered into and performed entirely within such state. 

[Signature Page Follows] 

 

        IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the date it is last executed below by either party. 

	INTERACTIVE HEALTH, INC.	 	 
	

/s/  CRAIG WOMACK      
	
 	

 
	By:	 	Craig Womack	 	 
	Its:	 	Chief Executive Officer	 	 
	
EXECUTIVE	
 	

 
	

/s/  THOMAS DRAGOTTO      
 Thomas Dragotto	
 	

 

B-2

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AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

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