Nautilus 2007 Annual Report Download - page 92

Dominion Account : a special account established by Borrowers at Bank of America or another bank acceptable to Agent, over which
Agent has exclusive control for withdrawal purposes during each Trigger Period and into which proceeds of Accounts shall be deposited.
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, and (vi) any extraordinary gains, (vii) fees incurred by Borrowers in connection with entering into this
Agreement and the Loan Documents in an aggregate amount not to exceed $563,000, (viii) legal fees and expenses incurred by US Borrower
during the fourth Fiscal Quarter of 2007 or the first Fiscal Quarter of 2008 in connection with the proxy dispute between US Borrower, its
directors and Sherborne Investors, L.P. in an aggregate amount not to exceed $2,975,000 (no more than $500,000 of which amount shall be
incurred in the first Fiscal Quarter of 2008), (ix) a write-down of Intellectual Property and associated goodwill taken on or before the last day of
the first Fiscal Quarter of 2008 in connection with the Disclosed Sale in an amount not to exceed $10,000,000, (x) a non-cash inventory write-
down taken on or before the last day of the fourth Fiscal Quarter of 2007 in an amount not to exceed $400,000, (xi) up to $600,000 in expenses
(no more than $150,000 of which expenses shall be cash expenses) incurred during the first Fiscal Quarter of 2008 in connection with closure of
Borrowers’ Australia direct operations, (xii) up to $1,000,000 in expenses incurred during the first Fiscal Quarter of 2008 in connection with
closure of Borrowers’ Italy operations, (xiii) up to $1,000,000 in expenses (no more than $400,000 of which expenses shall be cash expenses)
incurred during the first and second Fiscal Quarters of 2008 in connection with closure of Borrowers’ Bolingbrook, Illinois distribution center,
(xiv) a non-cash write-off of up to $1,100,000 taken during the fourth Fiscal Quarter of 2007 in connection with the abandonment of the License
with Lance Armstrong, (xv) a non-cash charge of up to $1,500,000 taken during the fourth Fiscal Quarter of 2007 in connection with the
elimination of Borrowers’ EV9.16 product line, (xvi) a non-cash charge of up to $500,000 taken during the fourth Fiscal Quarter of 2007 in
connection with the elimination of Borrowers’ fitness advisor product, (xvii) up to $1,000,000 in expenses actually incurred during the first and
second Fiscal Quarters of 2008 in connection with Borrowers’ future employee reductions, (xviii) a non-cash charge of up to $1,290,000 taken
during the fourth Fiscal Quarter of 2007 in connection with the elimination of Borrowers’ TC9.16 product line, (xix) a non-
cash warranty accrual
taken during the fourth Fiscal Quarter of 2007 relating to discontinued items in an amount up to $1,000,000, (xx) a non-cash write-off of up to
$2,500,000 taken during the fourth Fiscal Quarter of 2007 in connection with the abandonment or non-use of certain ICON patents; and (xxi) an
accrual taken in the first Fiscal Quarter of 2008 in connection with future warranty costs resulting from outsourcing of warranty processing in an
amount up to $3,000,000.
Eligible Account : an Account owing to a Borrower or DashAmerica that arises in the Ordinary Course of Business from the sale of goods
,
is payable in Dollars (or, with respect to Accounts of Swiss Borrower, an Equivalent Amount of Euros or Swiss francs) and is deemed by Agent,
in its discretion, to be an Eligible Account. Without limiting the foregoing, no Account shall be an Eligible Account if (a) it is unpaid for more
than 60 days after the original due date, or more than 90 days after the original invoice date ( provided that (i) in the case of Accounts arising
from direct sales to consumers, such Accounts shall not be Eligible Accounts if they are outstanding more than 13 days after the original invoice
date, and (ii) in the case of Accounts with stated invoice terms of 31 days or greater, such Accounts shall not be ineligible as a result of this
clause (a) if they are no more than 120 days after the original invoice date and no more than 30 days after their original due date ( provided
further that Eligible Accounts that fall within this clause (ii) shall not at any time provide Availability in an aggregate amount greater than
$3,000,000)); (b) 50% or more of the Accounts owing by the Account Debtor are not Eligible Accounts under the foregoing clause; (c) when
aggregated with other Accounts owing by the Account Debtor, it exceeds (i) in the case of Dick’s Sporting Goods or The Sports Authority, so
long as such Account
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