Nautilus, Inc. entered into a demand unsecured master promissory note establishing a short-term line of credit with KeyBank National Association. The master promissory note allows for either Base Rate Advances or Eurodollar Advances up to an aggregate principal amount of $40,000,000. The principal amount is due on October 17, 2005 or earlier based on demand. Interest is due and payable with respect to Base Rate Advances on the first day of each calendar month, commencing September 1, 2005 and on the maturity date, with respect to Eurodollar Advances, on the last day of the interest period applicable to such advance. Base Rate Advances may be prepaid at any time. Eurodollar advances may not be prepaid prior to the last day of the applicable interest period.
The demand master promissory note was entered into to meet the companys permitted acquisitions and working capital requirements while the company establishes a long-term unsecured credit facility through a syndicate of banks to be headed by KeyBank. The purpose of this long-term credit facility is for general corporate purposes, including permitted acquisitions and working capital requirements. The company and KeyBank have entered into a commitment letter describing the proposed terms of such a facility. Establishment of the credit facility is subject to several conditions, including syndication of a group of participating lenders, completion of lender due diligence, and negotiation and execution of loan documentation. The company expects that process to be completed not later than October 17, 2005.
