Nautilus 2005 Annual Report Download - page 126

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material increase in the cost of providing benefits under the ERISA Plan (other than increases in the number of Company employees, revision
of the scope of health care plans, and deductibles, franchises, and co-pay clauses thereunder, or increases in costs imposed by plan providers or
administrators). With respect to each ERISA Plan that is intended to be qualified under Code Section 401(a), (a) the ERISA Plan and any
associated trust operationally comply with the material applicable requirements of Code Section 401(a); (b) the ERISA Plan and any associated
trust have been amended to comply with all such material requirements as currently in effect, other than those requirements for which a
retroactive amendment can be made within the “remedial amendment period”
available under Code Section 401(b) (as extended under Treasury
Regulations and other Treasury pronouncements upon which taxpayers may rely); (c) the ERISA Plan and any associated trust have received a
favorable determination letter from the Internal Revenue Service stating that the ERISA Plan qualifies under Code Section 401(a), that the
associated trust qualifies under Code Section 501(a) and, if applicable, that any cash or deferred arrangement under the ERISA Plan qualifies
under Code Section 401(k), unless the ERISA Plan was first adopted at a time for which the above-described “remedial amendment period”
has
not yet expired; (d) the ERISA Plan currently satisfies the requirements of Code Section 410(b), subject to any retroactive amendment that may
be made within the above-described “remedial amendment period”; and (e) no contribution made to the ERISA Plan is subject to an excise tax
under Code Section 4972. With respect to any Pension Plan, the “accumulated benefit obligation” of Controlled Group members with respect
to the Pension Plan (as determined in accordance with Statement of Accounting Standards No. 87, “Employers’ Accounting for Pensions”)
does not exceed the fair market value of Pension Plan assets. As used in this Section 6.11, “material” means the measure of a matter of
significance that shall be determined as being an amount equal to five percent (5%) of Consolidated Net Worth.
Section 6.12. Consents or Approvals . No consent, approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person is required to be obtained or completed by any Company in connection with the execution,
delivery or performance of any of the Loan Documents, that has not already been obtained or completed.
Section 6.13. Solvency . Borrower has received consideration that is the reasonable equivalent value of the obligations and liabilities that
Borrower has incurred to Agent and the Lenders. Borrower is not insolvent as defined in any applicable state, federal or relevant foreign
statute, nor will Borrower be rendered insolvent by the execution and delivery of the Loan Documents to Agent and the Lenders. Borrower is
not engaged or about to engage in any business or transaction for which the assets retained by it are or will be an unreasonably small amount of
capital, taking into consideration the obligations to Agent and the Lenders incurred hereunder. Borrower does not intend to, nor does it believe
that it will, incur debts beyond its ability to pay such debts as they mature.
Section 6.14. Financial Statements . The audited Consolidated financial statements of Borrower for the fiscal year ended December 31,
2004 and the unaudited Consolidated financial statements of Borrower for the fiscal quarter ended June 30, 2005, furnished to Agent and the
Lenders, are true and complete, have been prepared in accordance with GAAP, and fairly present the financial condition of the Companies as
of the dates of such financial statements and the results of their operations for the periods then ending. Since the dates of such statements, there
has been no material adverse change in any Company’s financial condition, properties or business or any change in any Company’s accounting
procedures.
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