Escrow Agreement, Dated September 6, 1996

EXHIBIT 10.52


ESCROW AGREEMENT


This ESCROW AGREEMENT is dated as of September 6, 1996, among (a) ICON Health & Fitness, Inc., a Delaware corporation ("ICON"), Icon of Canada Inc., a Quebec company ("ICON Canada"; ICON and ICON Canada being sometimes referred to herein collectively as the "Buyers"), (b) ALLFITNESS INC., a Canadian company (the "Seller"), and (c) Lapointe Rosenstein and Goodman Phillips & Vineberg, acting jointly as escrow agent (the "Escrow Agent").


Recitals


The Seller and the Buyers have entered into the CANCO Asset Purchase Agreement dated as of the date hereof (as from time to time in effect, the "Purchase Agreement").


The Purchase Agreement contemplates that Seller provide a $2,100,000 (Canadian) letter of credit (the "Letter of Credit") to Buyers and that, in certain circumstances described in the Letter of Credit, payment under the Letter of Credit be made to the Escrow Agent under this Escrow Agreement.


Copies of the Agreement and the Letter of Credit have been delivered to the Escrow Agent, and the Escrow Agent is willing to act as the Escrow Agent hereunder.


Agreement


Therefore, in consideration of the foregoing and of the mutual covenants and agreements set forth below, the parties hereto hereby agree as follows:


1. Establishment of Escrow Fund. Pursuant to the Letter of Credit, cash in an amount not to exceed $2,100,000 (Canadian) may be paid to the Escrow Agent by the Letter of Credit issuer prior to September 6, 1997 (or a later date in the event the Letter of Credit has been extended or renewed). Such amount, together with all interest or profit thereon, or proceeds therefrom, from time to time held by the Escrow Agent pursuant to the terms hereof are herein referred to as the "Escrow Fund." The Escrow Fund shall be held by the Escrow Agent in accordance with the terms and conditions hereinafter set forth.


2. Investment of Escrow Fund. The Escrow Agent shall invest the Escrow Fund in:


(a) marketable obligations of, or fully and directly guaranteed by,


(i) Canada or any of its provinces or


(ii) the United States,


each of which obligations have a maturity of not more than 90 days
from the date of acquisition thereof; or


(b) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clause (a) entered into
with


(i) any Canadian financial institution listed on Exhibit A
hereto or


(ii) any bank organized under the laws of the United States or
any State thereof, the commercial paper of which bank is rated A-2 or
better by Standard & Poor's Rating Group or P-2 or better by Moody's
Investors Service, Inc.; or


(c) the investments specified on Exhibit A hereto; or


(d) such other investments as the Seller and the Buyer
Representative (as herein defined) may jointly authorize the Escrow Agent
to make from time to time.


Within the above mentioned categories, the Seller shall direct in writing the investments by the Escrow Agent and, in the absence of such instructions, the Escrow Agent shall, within such categories, invest the Escrow Fund as it deems appropriate. As used herein, "Buyer Representative" means ICON as representative of both Buyers.


3. Disposition of Escrow Fund. The Escrow Agent will hold the Escrow Fund in its possession until authorized hereunder to deliver such Escrow Fund under either paragraph (a) or (b) or (c) below:


(a) upon receipt of a certificate requesting the delivery of all or
any portion of the Escrow Fund signed by the Buyer Representative and the
Seller, the Escrow Agent shall deliver the Escrow Fund or the portion(s)
thereof specified in such certificate to either or both Buyers and/or the
Seller, as directed in such certificate; or


(b) upon receipt of a final and nonappealable judgment or order of a
court of competent jurisdiction with respect to payment of all or any
portion of the Escrow


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Fund, the Escrow Agent shall deliver the amount of the Escrow Fund
specified in such judgment or order to either or both Buyers with respect
to L/C Claims only (as defined in the Purchase Agreement) only, and/or the
Seller as directed in such judgment or order; or


(c) upon receipt of a certificate signed by either Buyer or Seller,
enclosing the written determination, signed by the Arbitrator (as defined
in the Purchase Agreement), of the Estimated Net L/C Claim (as defined in
the Purchase Agreement), the Escrow Agent shall deliver to Seller the
dollar amount by which the Escrow Fund exceeds the Estimated Net L/C Claim.


Notwithstanding any provision to the contrary, each Buyer hereby confirms
its covenant provided in Section 6.7.3(b) of the Purchase Agreement that
such Buyer shall not use, or demand payment of, any part of the funds held
in or constituting part of the Escrow Fund to pay any claim either of them
may have against Seller or its Affiliates, other than L/C Claims (as
defined in the Purchase Agreement). The Escrow Agent shall have no
obligation with respect to the compliance or noncompliance by the Buyers
with the foregoing covenant.


4. Liquidation of the Escrow Fund. Whenever the Escrow Agent shall be required to make payment from the Escrow Fund, the Escrow Agent shall pay such amounts by liquidating such investments of the Escrow Fund as shall be directed in writing by the Seller; provided, however that if the Seller shall not have furnished such direction to the Escrow Agent as promptly as practicable upon written request, the Escrow Agent shall pay such amounts by liquidating such investments of the Escrow Fund as shall be determined by the Escrow Agent.


5. Escrow Agent.


(a) Unless otherwise provided herein, the Escrow Agent is not to be
concerned with the Purchase Agreement, the Letter of Credit or any other
agreement that may affect the Escrow Fund. The Escrow Agent is not a party
to, or bound by, any agreement (other than this Escrow Agreement) which may
be deposited under, evidenced by, or arise out of either the Purchase
Agreement or the Letter of Credit.


(b) The Escrow Agent shall be protected in acting upon any notice,
request, waiver, consent, receipt or other paper or document believed by
the Escrow Agent to be signed by the proper party or parties; and the
Escrow Agent shall be entitled to make any payments or other deliveries
required to be made to the Buyers or either of them under this Escrow
Agreement to the Buyer Representative.


(c) The Escrow Agent shall not be liable for any error or judgment
or for any act done or step taken or omitted by it or for any mistake of
fact or law, or for


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anything which it may do or refrain from doing in connection herewith,
except its own willful misconduct or fraud, and the Escrow Agent shall have
no duties to anyone except those set forth in this Escrow Agreement.


(d) The Escrow Agent may consult legal counsel in the event of any
dispute or question as to the construction of this Escrow Agreement, or
Escrow Agent's duties hereunder, and the Escrow Agent shall incur no
liability and shall be fully protected in acting in accordance with the
written opinion and instructions of counsel. ...