Exhibit 10.3
SEVENTH AMENDMENT TO LOAN AND
SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO LOAN
AND SECURITY AGREEMENT (this “ Amendment ”),
dated as of July 31, 2009, is entered into by and among the
financial institutions signatory hereto (each a “
Lender ” and collectively the “ Lenders
”), BANK OF AMERICA, N.A. , as administrative agent
for the Lenders (in such capacity, “ Agent ”),
NAUTILUS, INC. , a Washington corporation (“
US Borrower ”), and NAUTILUS INTERNATIONAL S.A.
, a Swiss private share company (“ Swiss
Borrower ”, and together with US Borrower, collectively,
“ Borrowers ”).
RECITALS
A. Borrowers, Agent and the Lenders
have previously entered into that certain Loan and Security
Agreement dated as of January 16, 2008 (as amended,
supplemented, restated and modified from time to time, the “
Loan Agreement ”), pursuant to which the Lenders have
made certain loans and financial accommodations available to
Borrowers. Terms used herein without definition shall have the
meanings ascribed to them in the Loan Agreement.
B. Borrowers, Agent and the Lenders
now wish to amend the Loan Agreement on the terms and conditions
set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of
the foregoing and the mutual covenants herein contained, and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as
follows:
1. Amendments to Loan
Agreement .
(a) The definition of
“EBITDA” in Section 1.1 of the Loan Agreement is
hereby amended and restated in its entirety to read as
follows:
“ EBITDA : determined
on a consolidated basis for Borrowers and Subsidiaries, net income,
calculated before (in each case, to the extent included in
determining net income and to the extent incurred or attributable
during the applicable measurement period) (i) interest
expense, (ii) provision for income taxes,
(iii) depreciation and amortization expense, (iv) gains
or losses arising from the sale of capital assets, (v) gains
arising from the write-up of assets, (vi) any extraordinary
gains, (vii) non-recurring charges during the month of
December 2008 as listed on Schedule E hereto, (viii) up
to $8,000,000 in non-cash expenses incurred during the first and
second Fiscal Quarters of 2009 in connection with the write-down of
leasehold improvements for Borrowers’ headquarters in
Vancouver, Washington, and (ix) up to $4,500,000 of expenses
incurred during the first and second Fiscal Quarters of 2009 in
connection with severance costs and/or other expenses incurred in
connection with the termination of the leases covering
Borrowers’ Tulsa, Oklahoma location and Vancouver, Washington
headquarters.”
2. Effectiveness of this
Amendment . The following shall have occurred before this
Amendment is effective:
(a) Amendment . Agent shall
have received this Amendment fully executed in a sufficient number
of counterparts for distribution to all parties.
(b) Representations and
Warranties . The representations and warranties set forth
herein must be true and correct.
(c) No Default . No event has
occurred and is continuing that constitutes an Event of
Default.
(d) Other Required
Documentation. All other documents and legal matters in
connection with the transactions contemplated by this Amendment
shall have been delivered or executed or recorded and shall be in
form and substance satisfactory to Agent.
3. Representations and
Warranties . Each Borrower represents and warrants as
follows:
(a) Authority . Such Borrower
has the requisite corporate power and authority to execute and
deliver this Amendment, and to perform its obligations hereunder
and under the Loan Documents (as amended or modified hereby) to
which it is a party. The execution, delivery and performance by
such Borrower of this Amendment have been duly approved by all
necessary corporate action and no other corporate proceedings are
necessary to consummate such transactions.
(b) Enforceability . This
Amendment has been duly executed and delivered by such Borrower.
This Amendment and each Loan Document to which such Borrower is a
party (as amended or modified hereby) is the legal, valid and
binding obligation of such Borrower, enforceable against such
Borrower in accordance with its terms, and is in full force and
effect.
(c) Representations and
Warranties . Th
