Nautilus 2007 Annual Report Download - page 105

Patent Security Agreement : each patent collateral assignment agreement pursuant to which an Obligor grants to Agent, for the benefit of
Secured Parties, a Lien on such Obligor’s interests in its owned patents, as security for the Obligations.
Patriot Act : the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
Payment Item : each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.
PBGC : the Pension Benefit Guaranty Corporation.
Pension Plan : any employee pension benefit plan (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
that is subject to Title IV of ERISA and is sponsored or maintained by any Obligor or ERISA Affiliate or to which the Obligor or ERISA
Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the preceding five plan years.
Permitted Acquisition : any Acquisition by any Obligor in a transaction that satisfies each of the following requirements: (a) such
Acquisition is not a hostile acquisition or contested by the company to be acquired; (b) the business acquired in connection with such
Acquisition is not primarily engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are
engaged on the Closing Date and any business activities that are substantially similar or incidental thereto; (c) both before and after giving effect
to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan
Documents is true and correct (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent Agent
and the Lenders have been notified in writing by the Obligors that any representation or warranty is not correct and the Required Lenders have
explicitly waived in writing compliance with such representation or warranty) and no Default or Event of Default exists, will exist, or would
result therefrom; (d) as soon as available, but not less than fifteen days prior to such Acquisition, the Borrowers have provided the Lenders
(i) notice of such Acquisition and (ii) a copy of all available business and financial information reasonably requested by Agent including pro
forma financial statements, statements of cash flow, and Availability projections; (e) the aggregate purchase price (whether in cash, notes or any
other form of non-equity consideration) of all Acquisitions made during the term of this Agreement shall not exceed $5,000,000; (f) if such
Acquisition is an acquisition of the Equity Interests of a Person, the Acquisition is structured so that the acquired Person shall become a wholly-
owned Subsidiary of a Borrower and, in accordance with Section 10.1.9 , an Obligor pursuant to the terms of this Agreement; (g) if such
Acquisition is an acquisition of assets, the Acquisition is structured so that an Obligor (or a newly organized Subsidiary that becomes an
Obligor) shall acquire such assets; (h) if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of
Regulation U; (i) no Obligor shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities
(whether relating to environmental, tax, litigation, or other matters) that could reasonably be expected to have a Material Adverse Effect; (j) in
connection with an Acquisition of the Equity Interests of any Person, all Liens (other than Permitted Liens which were not created in
contemplation of such Acquisition) on property of such Person shall be terminated unless Agent in its sole discretion consents otherwise, and in
connection with an Acquisition of the assets of any Person, all Liens (other than Permitted Liens which were not created in contemplation of
such Acquisition) on such assets shall be terminated; (k) there are no Term Loans outstanding on the date of consummation of any such
Acquisition; and (l) both before and after giving effect to any such Acquisition, Borrowers maintain Excess Availability not less than
$15,000,000. In no event will assets acquired pursuant to a Permitted Acquisition constitute Eligible Accounts, Eligible Inventory or Eligible
Equipment prior to completion of a field examination and other due diligence acceptable to Agent in its discretion.
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