Nautilus 2009 Annual Report Download - page 333

connection with this Agreement (unless such taxes, assessments, governmental charges, and levies are being properly contested), (g) the Debtor
will continue to operate, its business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with
all applicable provisions of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous
materials or substances, and (h) the Debtor will not sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any
interest therein except for (i) sales of inventory in the ordinary course of business (ii) so long as no Event of Default has occurred and is
continuing, sales or other dispositions of obsolescent items of equipment consistent with past practices and (iii) as otherwise permitted in the
Credit Agreement.
10. Insurance .
10.1 Maintenance of Insurance . The Debtor will maintain with financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be in accordance with general practices of businesses engaged in
similar activities in similar geographic areas. Such insurance shall be in such minimum amounts that the Debtor will not be deemed a co-
insurer under applicable insurance laws, regulations and policies and otherwise shall be in such amounts, contain such terms, be in such
forms and be for such periods as may be reasonably satisfactory to the Secured Party. In addition, all such insurance (other than workers’
compensation and D&O insurance) shall be payable to the Secured Party as loss payee. Without limiting the foregoing, the Debtor will
(a) keep all of its physical property insured with casualty or physical hazard insurance on an “all risks” basis, (b) maintain all such
workers’ compensation or similar insurance as may be required by law, and (c) maintain, in amounts and with deductibles equal to those
generally maintained by businesses engaged in similar activities in similar geographic areas, general public liability insurance against
claims of bodily injury, death or property damage occurring, on, in or about the properties of the Debtor; business interruption insurance;
and product liability insurance.
10.2 Insurance Proceeds .
The proceeds of any casualty insurance in respect of any casualty loss of any of the Collateral shall, subject
to the rights, if any, of other parties with an interest having priority in the property covered thereby, (a) so long as no Default or Event of
Default has occurred and is continuing and to the extent that the amount of such proceeds is less than $10,000, be disbursed to the Debtor
for direct application by the Debtor solely to the repair or replacement of the Debtor’s property so damaged or destroyed, and (b) in all
other circumstances, be held by the Secured Party as cash collateral for the Obligations. The Secured Party may, at its sole option, disburse
from time to time all or any part of such proceeds so held as cash collateral, upon such terms and conditions as the Secured Party may
reasonably prescribe, for direct application by the Debtor solely to the repair or replacement of the Debtor’s property so damaged or
destroyed, or the Secured Party may apply all or any part of such proceeds to the Obligations.
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