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Re: $25,000,000 Revolving Credit Facility

Letter of Credit

Re:   $25,000,000 Revolving Credit Facility
 | Document Parties: NAUTILUS, INC. | BANK OF AMERICA, N.A. You are currently viewing:
This Letter of Credit involves

NAUTILUS, INC. | BANK OF AMERICA, N.A.

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Title: Re: $25,000,000 Revolving Credit Facility
Governing Law: Washington     Date: 11/3/2006
Industry: Retail (Catalog and Mail Order)    

Re:   $25,000,000 Revolving Credit Facility
, Parties: nautilus  inc. , bank of america  n.a.
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Exhibit 10.1

October 30, 2006

Nautilus, Inc.

16400 SE Nautilus Drive

Vancouver, Washington 98683

 

 

 

Attention:

  

William Meadowcroft

 

  

Chief Financial Officer

 

 

 

  

Re:    $25,000,000 Revolving Credit Facility

Ladies and Gentlemen:

BANK OF AMERICA, N.A. (the “ Lender ”) is pleased to make available to Nautilus, Inc., a Washington corporation (the “ Borrower ”), a revolving credit facility on the terms and subject to the conditions set forth below. Terms not defined herein have the meanings assigned to them in Exhibit A hereto, and terms not defined herein or in Exhibit A have the meanings assigned to them in the Incorporated Agreement (as defined in Exhibit A ).

 

1.

The Facility.

 

 

(a)

The Commitment. Subject to the terms and conditions set forth herein, the Lender agrees to make available to the Borrower until the Maturity Date a revolving credit facility providing for loans (“ Loans ”) in an aggregate principal amount not exceeding at any time $25,000,000 (the “ Commitment ”). Within the foregoing limit, the Borrower may borrow, repay and reborrow Loans until the Maturity Date.

 

 

(b)

Borrowings, Conversions, Continuations. The Borrower may request that Loans be (i) made as or converted to Base Rate Loans by irrevocable notice to be received by the Lender not later than 11:00 a.m. on the Business Day of the borrowing or conversion, or (ii) made or continued as, or converted to, Eurodollar Rate Loans by irrevocable notice to be received by the Lender not later than 11:00 a.m. three Business Days prior to the Business Day of the borrowing, continuation or conversion. If the Borrower fails to give a notice of conversion or continuation prior to the end of any Interest Period in respect of any Eurodollar Rate Loan, the Borrower shall be deemed to have requested that such Loan be continued as a Eurodollar Rate Loan with an Interest Period of one month on the last day of the applicable Interest Period. Notices pursuant to this Paragraph 1(b) may be given by telephone if promptly confirmed in writing. Each Loan shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof. There shall not be more than four different Interest Periods in effect at any time. Furthermore, the Borrower may not select any Interest Period that ends after the Maturity Date. Loans requested by telephone shall be disbursed to the Borrower’s account as designated by the Borrower from time to time pursuant to a notice in the form of Exhibit B .

 

 

(c)

Interest. At the option of the Borrower, Loans shall bear interest at a rate per annum equal to (i) the Eurodollar Rate plus 1.00%; or (ii) the Base Rate. Interest on Base Rate Loans when the Base Rate is determined by the Lender’s “prime rate” shall be calculated on the basis of a year of 365 or 366 days and actual days elapsed. All other interest hereunder shall be calculated on the basis of a year of 360 days and actual days elapsed.

The Borrower promises to pay interest (i) for each Eurodollar Rate Loan, (A) on the last day of the applicable Interest Period, and (B) on the date of any conversion of such Loan to a Base Rate Loan; (ii) for Base Rate Loans, on the last Business Day of each calendar month; and (iii) for all Loans, on the Maturity Date. If the time for any payment is extended by operation of law or otherwise, interest shall continue to accrue for such extended period.


Nautilus, Inc.

October 30, 2006

Page 2

 

After the date any principal amount of any Loan is due and payable (whether on the Maturity Date, upon acceleration or otherwise), or after the date five days after any other monetary obligation hereunder shall have become due and payable, the Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on such amounts at a rate per annum equal to the Base Rate plus 2%. Furthermore, while any Event of Default exists, the Borrower shall pay interest on the principal amount of the Loans at a rate per annum equal to the Base Rate plus 2%. Accrued and unpaid interest on past due amounts shall be payable on demand. In no case shall interest hereunder exceed the amount that the Lender may charge or collect under applicable law.

 

 

(d)

Evidence of Loans. The Loans and all payments thereon shall be evidenced by the Lender’s loan accounts and records. Such loan accounts and records shall be conclusive absent manifest error of the amount of the Loans and payments thereon. Any failure to record any Loan or payment thereon or any error in doing so shall not limit or otherwise affect the obligation of the Borrower to pay any amount owing with respect to the Loans.

 

 

(e)

Commitment Fee. The Borrower promises to pay a commitment fee of 0.25% per annum on the actual daily unused portion of the Commitment, payable in arrears on the Maturity Date, and calculated on the basis of a year of 360 days and actual days elapsed.

 

 

(f)

Repayment . The Borrower promises to pay all Loans then outstanding on the Maturity Date. The Borrower shall make all payments required hereunder not later than 11:00 a.m. on the date of payment in same day funds in Dollars at the Lender’s office as designated by the Lender from time to time pursuant to a notice in the form of Exhibit B . All payments by the Borrower to the Lender hereunder shall be made to the Lender in full without set-off or counterclaim and free and clear of and exempt from, and without deduction or withholding for or on account of, any present or future taxes, levies, imposts, duties or charges of whatsoever nature imposed by any government or any political subdivision or taxing authority thereof. The Borrower shall reimburse the Lender for any taxes imposed on or withheld from such payments (other than taxes imposed on the Lender’s income, and franchise taxes imposed on the Lender, by the jurisdiction under the laws of which the Lender is organized or any political subdivision thereof). The Lender is exempt from any withholding tax imposed under the laws of the United States in respect of the fees, interest or other payments to which it is entitled pursuant to this Agreement because the Lender is organized under the laws of the United States.

 

 

(g)

Prepayments. The Borrower may, upon three Business Days’ notice, in the case of Eurodollar Rate Loans, and upon one Business Day’s notice, in the case of Base Rate Loans, prepay Loans on any Business Day; provided that the Borrower pays all Breakage Costs (if any) associated with such prepayment on the date of such prepayment. Prepayments of Eurodollar Rate Loans must be accompanied by a payment of interest on the amount so prepaid. Prepayments of Eurodollar Rate Loans must be accompanied by a payment of interest on the amount so prepaid.

 

 

(h)

Commitment Reductions. The Borrower may, upon three Business Days’ notice, reduce or cancel the undrawn portion of the Commitment, provided , that the amount of such reduction is not less than $5,000,000 or a whole multiple of $1,000,000 in excess thereof.


Nautilus, Inc.

October 30, 2006

Page 3

 

2.

Conditions Precedent to Loans.

 

 

(a)

Conditions Precedent to Initial Loan. As a condition precedent to the initial Loan hereunder, the Lender must receive the following:

 

 

(i)

a duly executed copy of this Agreement and the Subsidiary Guaranty executed by DFI Leaseco, LLC, a Washington limited liability company, and Dashamerica, Inc., a Colorado corporation; and

 

 

(ii)

a borrowing resolution and a certificate of incumbency certified by a secretary or assistant secretary of the Borrower.

 

 

(b)

Conditions to Each Borrowing. As a condition precedent to each borrowing of any Loan:

 

 

(i)

the Borrower must furnish the Lender with, as appropriate, a notice of borrowing;

 

 

(ii)

each representation and warranty set forth in Paragraph 3 shall be true and correct as if made on the date of such borrowing; and

 

 

(iii)

no Default shall have occurred and be continuing on the date of such borrowing.

Each notice of borrowing shall be deemed a representation and warranty by the Borrower that the conditions referred to in clauses (ii) and (iii) above have been met.

 

3.

Representations and Warranties. The Borrower and the Lender agree that the representations and warranties set forth in Article VI (Representations and Warranties) of the Incorporated Agreement, including for purposes of this Paragraph 3 each Additional Incorporated Representation, and all exhibits, schedules and defined terms referred to therein are hereby (or, in the case of each Additional Incorporated Representation, shall, upon its effectiveness, be) incorporated by reference into this Agreement as if set forth in full herein with appropriate substitutions, including the following:

 

 

(a)

all references to “Credit Party” shall be deemed to be references to the Borrower and any Subsidiary of the Borrower that is party to the Subsidiary Guaranty;

 

 

(b)

all references to “the Lenders” shall be deemed to be references to the Lender;

 

 

(c)

all references to “Agent” shall be deemed to be references to the Lender;

 

 

(d)

all references to “Loan” or “Loans” shall be deemed to be references to the Loans;

 

 

(e)

all references to “Loan Documents” shall be deemed to be references to the Loan Documents;

 

 

(f)

all references to “Default” and “Event of Default” shall be deemed to be references to a Default and an Event of Default, respectively;

 

 

(g)

all references to “Agreement” (other than such reference appearing in the definition of “Closing Date”) shall be deemed to be references to this Agreement; and

 

 

(h)

In Section 6.14 the dates December 31, 2004 and June 30, 2006 shall be replaced with December 31, 2005 and June 30, 2006, respectively.


Nautilus, Inc.

October 30, 2006

Page 4

 

4.

Covenants.

 

 

(a)

So long as principal of and interest on any Loan or any other amount payable hereunder or under any other Loan Document remains unpaid or unsatisfied and the Commitment has not been terminated, the Borrower shall comply with all the covenants and agreements applicable to it contained in Article V (Covenants) of the Incorporated Agreement, including for purposes of this Paragraph 4 each Additional Incorporated Covenant but excluding Sections 5.20, 5.23 and 5.24 of the Incorporated Agreement. The covenants and agreements of the Borrower referred to in the preceding sentence (including all exhibits, schedules and defined terms referred to therein) are hereby (or, in the case of each Additional Incorporated Covenant, shall, upon its effectiveness, be) incorporated herein by reference as if set forth in full herein with appropriate substitutions, including the following:

 

 

(i)

all references to “Credit Party” shall be deemed to be references to the Borrower and any Subsidiary of the Borrower that is party to the Subsidiary Guaranty;

 

 

(ii)

all references to “the Lenders” and the “Required Lenders” shall be deemed to be references to the Lender;

 

 

(iii)

all references to “Agent” shall be deemed to be references to the Lender;

 

 

(iv)

all references to “Loan” or “Loans” shall be deemed to be references to the Loans;

 

 

(v)

all references to “Loan Documents” shall be deemed to be references to the Loan Documents;

 

 

(vi)

all references to “Default” and “Event of Default” shall be deemed to be references to a Default and an Event of Default, respectively; and

 

 

(vii)

all references to “Agreement” (other than such reference appearing in the definition of “Closing Date”) shall be deemed to be references to this Agreement.

All such covenants and agreements so incorporated herein by reference shall survive any termination, cancellation, discharge or replacement of the Incorporated Agreement.

Any financial statements, certificates or other documents received by the Lender under the Incorporated Agreement shall be deemed delivered hereunder.

 

 

(b)

At any time that a Subsidiary of the Borrower guarantees the obligations of the Borrower under the Incorporated Agreement, the Borrower shall cause such Subsidiary to guaranty the obligations of the Borrower under this Agreement by becoming a party to the Subsidiary Guaranty.

 

 

(c)

The Borrower shall not permit at any time the Leverage Ratio to exceed 2.00 to 1.00.

 

 

(d)

Notwithstanding Section 5.8 of the Incorporated Agreement, the Borrower shall not incur any additional Indebtedness (excluding extensions of credit under the Incorporated Agreement) with a principal amount in excess of $5,000,000 without the prior consent of the Lender.


Nautilus, Inc.

October 30, 2006

Page 5

 

5.

Events of Default. The following are “ Events of Default :”

 

 

(a)

The Borrower fails to pay any principal of any Loan as and on the date when due; or

 

 

(b)

The Borrower fails to pay any interest on any Loan, or any fee or other amount payable to the Lender under any Loan Document due hereunder, or any portion thereof, within five days after the date when due; or

 

 

(c)

The Borrower fails to comply with any covenant or agreement incorporated herein by reference pursuant to Paragraph 4 above, subject to any applicable grace period and/or notice requirement set forth in Article V or Article VII of the Incorporated Agreement (it being understood and agreed that any such notice requirement shall be met by the Lender’s giving the applicable notice to the Borrower hereunder); or

 

 

(d)

Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or deemed made; or

 

 

(e)

Any “Event of Default” specified in Article VII of the Incorporated Agreement (including for purposes of this Paragraph 5(e) each Additional Incorporated Event of Default) occurs and is continuing, without giving effect to any waiver or amendment thereof pursuant to the Incorporated Agreement, it be


 
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