Nautilus 2006 Annual Report Download - page 130

Download and view the complete annual report

Please find page 130 of the 2006 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 201

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201

2
Purchaser fails to exercise the Option, the entire amount of the Option Fee shall be retained by Seller. If Purchaser exercises the Option,
the Option Fee shall be retained by Seller and credited to the payment of the Purchase Price.
TERM AND EXERCISE
.
3.1 Option Term. The term of the Option shall begin on the date of delivery of the Option Fee and expire at 6:00 p.m. Pacific Daylight
Time on June 30, 2007. In the event Purchaser fails to exercise the Option on or before such time of expiration, Purchaser shall
return to Seller or destroy all confidential and proprietary information of Seller obtained by Purchaser during the due diligence
process.
3.2 Exercise of Option. On or before expiration of the Option as provided in Section 3.1 above, and subject to the provisions of
Section 3.3 below, Purchaser may elect to exercise the Option by giving written notice to Seller in accordance with Section 9.2
below.
3.3 Purchase Agreement and Escrow Agreement . Within sixty (60) days after delivery of written notice of exercise as specified in
Section 3.2 above, but no earlier than June 30, 2007, Purchaser and Seller shall execute and deliver a definitive Asset Purchase and
Sale Agreement ("Purchase Agreement") in the form attached hereto as Exhibit A. The purchase and sale of the Assets shall be
completed on December 31, 2007 (the “Closing Date”)
in accordance with the terms of the Purchase Agreement. Seller shall deliver
draft schedules and exhibits to the Purchase Agreement, with the exception of disclosures related to Section 3.17 of the Purchase
Agreement, on or before April 30, 2007 and shall promptly provide updated schedules and exhibits to supplement or correct any
information presented in such draft schedules.
3.4 Treuriver Option Agreement. It is the intention of the parties that exercise of the Option shall occur only in conjunction with
exercise of the Treuriver Option. Therefore, exercise (or expiration, if applicable) of the Option as provided in Section 3.2 above
shall constitute exercise of the Treuriver Option, and exercise (or expiration, if applicable) of the Treuriver Option in accordance
with the terms of the Treuriver Option Agreement shall constitute exercise of the Option granted herein.
4. CONTINUATION OF BUSINESS; AUDITED FINANCIAL STATEMENTS
.
4.1 Continuation of Business. From the date of this Agreement until the expiration of the Option, or until execution of the Purchase
Agreement if the Option is exercised, (i) Seller shall continue to operate the Business in the ordinary course and will not enter into
any transaction, agreement or other action out of the ordinary course; and (ii) Seller shall not manufacture or sell, or enter into any