Nautilus 2009 Annual Report Download - page 298

such Letter of Credit determined in accordance with Section 3.3. Borrower hereby grants Lender a security interest in such cash collateral to
secure Borrower’s reimbursement obligations in respect of such Letter of Credit. Borrower agrees to execute any documents required by Lender
to evidence or perfect Lender’s security interest in such cash collateral. Such cash collateral shall be held by Lender in a bank-controlled deposit
account and Borrower shall have no right to withdraw or access such cash collateral so long as the applicable Letter of Credit is outstanding.
Lender shall have the right to debit such account upon a drawing under such Letter of Credit.
(b) Borrower shall, on the Closing Date and at all times thereafter, maintain with Lender cash collateral in an amount equal to
the Credit Exposure Reserve. Borrower hereby grants Lender a security interest in such cash collateral to secure payment and performance of all
of the Obligations. Borrower agrees to execute any documents required by Lender to evidence or perfect Lender’s security interest in such cash
collateral. Such cash collateral shall be held by Lender in a bank-controlled deposit account. Borrower shall deposit additional cash collateral
with Lender within three Business Days of receipt of written notice from Lender that the Credit Exposure Reserve has increased. Borrower shall
have no right to withdraw or access such cash collateral. This requirement is in addition to Borrower’s obligations to deposit cash collateral with
Lender pursuant to Section 3.6(a).
(c) Borrower shall be entitled to obtain Letters of Credit without complying with the requirements of Section 3.6(a) provided
that (i) no Default or Event of Default exists, (ii) Borrower is in compliance with Section 8.1, Section 8.2, Section 8.3 and Section 8.4 of this
Agreement for the period covered by the most recent Quarterly Compliance Certificate or Annual Compliance Certificate delivered to Lender (as
applicable) and (iii) Borrower provides written notice to Lender (the “Non-Cash Secured Election”) of its irrevocable election to obtain Letters
of Credit without complying with the requirements of Section 3.6(a). After receipt by Lender of the Non-Cash Secured Election, Section 8.5 of
this Agreement shall have no further force or effect and any Financial Covenant Failure shall constitute an Event of Default. Within 30 days after
receipt by Lender of the Non-Cash Secured Election, Lender shall distribute all cash pledged by Borrower pursuant to Section 3.6(a) as directed
by Borrower.
Section 3.7 Permitted Use of Funds . Borrower shall use proceeds of the Revolving Credit Facility for general corporate purposes in
the ordinary course of business.
Section 3.8 Limitation on Amount Outstanding . The maximum principal amount of credit that may be outstanding to Borrower
under the Revolving Credit Facility at any time (including any outstanding Letters of Credit) is the lesser of (a) $15,000,000, and (b) the
Borrowing Base at the time in question. If the total principal amount outstanding under the Revolving Credit Facility at any time (including any
outstanding Letters of Credit) exceeds the lesser of the amounts specified in the preceding sentence, Borrower within three Business Days of the
date Lender notifies Borrower of such situation shall pay Lender such excess amount (and Borrower’s failure to make such payment shall
constitute an Event of Default under Section 10.1(a) of this Agreement).
Section 3.9 The Revolving Credit Facility Commitment Fee . On the Closing Date, Borrower shall pay Lender a fee of $52,500 in
consideration of Lender’s commitment to extend the Revolving Credit Facility to Borrower on the basis set forth in this Agreement. Such fee
shall be fully earned when paid, non-refundable, and shall not apply as a payment toward principal or interest.
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