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
).
|
|
(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
|
|
(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
|
|