Nautilus 2007 Annual Report Download - page 106

Permitted Asset Disposition : as long as no Default or Event of Default exists and all Net Proceeds are deposited into the Dominion
Account, an Asset Disposition that is (a) a sale of Inventory in the Ordinary Course of Business; (b) a disposition of Equipment that, in the
aggregate during any 12 month period, has a fair market or book value (whichever is more) of $3,000,000 or less; (c) a disposition of Inventory
that is obsolete, unmerchantable or otherwise unsalable in the Ordinary Course of Business; (d) termination of a lease of real or personal
Property that is not necessary for the Ordinary Course of Business, could not reasonably be expected to have a Material Adverse Effect and does
not result from an Obligor’s default; (e) the Disclosed Sale; (f) to the extent constituting an Asset Disposition, investments not prohibited under
Section 10.2
hereof; (g) licenses, sublicenses, leases or subleases granted to others not interfering in any material respect with the business of the
Borrowers and their Subsidiaries and which could not reasonably be expected to have a Material Adverse Effect, (h) sales or dispositions of cash
and Cash Equivalents in the Ordinary Course of Business; (i) abandonment of Intellectual Property of the Borrowers and their Subsidiaries that
is immaterial, unnecessary or no longer used in the Ordinary Course of Business, the abandonment of which Intellectual Property could not
reasonably be expected to have a Material Adverse Effect; (j) transfers of assets to US Borrower, or from non-Obligors to non-Obligors or to
Obligors; (k) Dispositions of Accounts not constituting Eligible Accounts in the Ordinary Course of Business in connection with the collection
or compromise thereof; (l) sale or Disposition of US Borrower’s real Property located at 12032 Highway 155N, Tyler, Texas for Net Proceeds
not less than $1,700,000 (which Net Proceeds shall reduce the Real Estate Formula Amount as set forth in the definition of such term); and
(m) approved in writing by Agent and Required Lenders.
Permitted Contingent Obligations : Contingent Obligations (a) arising from endorsements of Payment Items for collection or deposit in the
Ordinary Course of Business; (b) arising from Hedging Agreements permitted hereunder; (c) existing on the Closing Date, and any extension or
renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed; (d) incurred in the Ordinary Course
of Business with respect to surety, appeal or performance bonds, or other similar obligations; (e) arising from customary indemnification
obligations in favor of purchasers in connection with Permitted Asset Dispositions if such obligations could not reasonably be expected to have a
Material Adverse Effect; (f) arising under the Loan Documents; (g) guarantees by Obligors of another Obligor’s Debt or other obligations
incurred in the Ordinary Course of Business in each case to the extent that such Debt or other obligations are permitted hereunder and if such
guarantees could not reasonably be expected to have a Material Adverse Effect; or (h) in an aggregate amount of $5,000,000 or less at any time.
Permitted Lien : as defined in Section 10.2.2 .
Permitted Purchase Money Debt : Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured only by a Purchase
Money Lien, as long as the aggregate amount does not exceed $5,000,000 at any time and its incurrence does not violate Section 10.2.3 .
Person : any individual, corporation, limited liability company, partnership, joint venture, joint stock company, land trust, business trust,
unincorporated organization, Governmental Authority or other entity.
Plan : any employee benefit plan (as such term is defined in Section 3(3) of ERISA) established by an Obligor or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, an ERISA Affiliate.
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