Nautilus 2009 Annual Report Download - page 304

then, and in any such event, Lender promptly shall notify Borrower thereof. Until Lender notifies Borrower that the circumstances giving
rise to such notice no longer apply, the obligation of Lender to allow selection by Borrower of LIBOR Rate Loans or Applicable Floating
Rate Loans affected by the contingencies described in this Section 4.13 shall be suspended. If, at the time Lender so notifies Borrower,
Borrower previously has given Lender a Notice of Borrowing or Conversion with respect to one or more LIBOR Rate Loans or Applicable
Floating Rate Loans but such Revolving Loans have not yet gone into effect, such notification shall be deemed to be a request for a Base
Rate Loan.
Section 4.14 Prepayment Due to Illegality . In the event of a determination of illegality pursuant to Section 4.13 of this Agreement
with respect to the outstanding affected LIBOR Rate Loans or Applicable Floating Rate Loans, Borrower shall prepay the same, together with
interest thereon and any amount due pursuant to Section 4.12, if any, of this Agreement, on such date as shall be specified in Lender’s notice to
Borrower (which shall not be earlier than the date such notice is given), unless Lender is permitted to maintain such Revolving Loans as LIBOR
Rate Loans until the end of each then-applicable Interest Period. Unless otherwise agreed by Borrower and Lender, any payment required in
accordance with the preceding sentence shall (subject to the terms and conditions of this Agreement) be made automatically with a Base Rate
Loan.
ARTICLE V
COLLATERAL FOR BORROWER’S OBLIGATIONS
Section 5.1 Execution by Borrower of the Security Agreement and the IP Security Agreements . Contemporaneously with the
execution of this Agreement, Borrower shall execute and deliver to Lender a security agreement (the “Security Agreement”) in form and content
satisfactory to Lender. The Security Agreement shall grant Lender a security interest in the Collateral to secure payment of the Obligations. In
addition, contemporaneously with the execution of this Agreement, Borrower shall execute and deliver to Lender security agreements (the
“IP Security Agreements”) in form and substance satisfactory to Lender in its Permitted Discretion. The IP Security Agreements shall grant
Lender a security interest in all existing and after-acquired intellectual property of Borrower to secure payment of the Obligations.
Section 5.2 Execution by Borrower of the Pledge Agreement . Contemporaneously with the execution of this Agreement, Borrower
shall execute and deliver to Lender a pledge agreement (the “Pledge Agreement”) in form and content satisfactory to Lender. The Pledge
Agreement shall grant Lender a security interest and lien in 65 percent of the Capital Stock of Nautilus Fitness Canada Ltd. to secure payment of
the Obligations.
Section 5.3 Right of Setoff . In addition to any rights now or hereafter granted under this Agreement, applicable law, or otherwise,
and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, Borrower hereby
authorizes Lender at any time, or from time to time, without presentment, demand, protest, or other notice of any kind to Borrower or to any
other Person, any such notice being hereby expressly waived, to set off, and grants to Lender a security interest in and a lien on, any
Indebtedness at any time held or owing by Lender to or for the credit or the account of Borrower,
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