Exhibit 10.29

FORBEARANCE AGREEMENT

THIS FORBEARANCE AGREEMENT (this “Agreement”), dated as of February 15, 2008, is
entered into among Bank of America, N.A., as agent for the Lenders (“Agent”),
the Lenders party hereto, Nautilus, Inc., a Washington corporation (“US
Borrower”), and Nautilus International S.A., a , a Swiss private share company
(“Swiss Borrower”; with US Borrower, collectively, “Borrowers”).

RECITALS

A. Borrowers, Agent and the financial institutions from time to time party
thereto as lenders (“Lenders”) have previously entered into that certain Loan
and Security Agreement dated as of January 16, 2008 (the “Loan Agreement”),
pursuant to which Agent and the Lenders have made certain loans and financial
accommodations available to Borrowers. Terms used herein without definition
shall have the meanings ascribed to them in the Loan Agreement.

B. An Event of Default has occurred and is continuing under the Loan Agreement
due to Borrower’s failure to achieve EBITDA, when measured for the period
commencing October 1, 2007 and ending December 31, 2007, of at least $0, as
required under Section 10.3.1 of the Loan Agreement (the “Known Existing
Default”).

C. Borrowers have asked Agent and the Lenders to forbear from exercising its
rights and remedies under the Loan Agreement.

D. Agent and Lenders are willing, for a limited period of time and on the terms
and conditions set forth herein, to forbear from exercising its rights and
remedies under the Loan Agreement with respect to the Known Existing Default.

F. Each Borrower is entering into this Agreement with the understanding and
agreement that, except as specifically provided herein, none of Agent’s or any
Lender’s rights or remedies as set forth in the Loan Agreement is being waived
or modified by the terms of this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

1. Incorporation of Recitals. Each of the above recitals is expressly
incorporated herein and is represented by Borrowers to be true and correct.

2. Reaffirmation of Obligations. Each Borrower hereby acknowledges that the Loan
Documents and the Obligations constitute the valid and binding obligations of
such Borrower enforceable against such Borrower in accordance with their
respective terms, and each Borrower hereby reaffirms its obligations under the
Loan Documents. Agent’s and Lenders’ entry into this Agreement or any of the
documents referenced herein, Agent’s or any Lender’s negotiations with any party
with respect to any Loan Document, Agent’s or any Lender’s conduct of any
analysis or investigation of any collateral for the Obligations or any Loan
Document, Agent’s or any Lender’s acceptance from Borrower or any other party of
any payments made to Agent or such Lender prior to the date hereof, or any other
action or failure to act on the part of Agent or any Lender shall not constitute
(a) a modification of any Loan Document, or (b) a waiver of any Default or Event
of Default under the Loan Documents, including, without limitation, the Known
Existing Default, or a waiver of any term or provision of any Loan Document.

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3. Agreement to Forbear. For the Forbearance Term (as defined below), Agent and
the Lenders shall forbear and shall not take any action or commence any
proceedings with respect to the enforcement of any of its rights or remedies
under the Loan Documents as a result of the Known Existing Default. The parties
agree that neither the foregoing agreement by Agent and the Lenders nor the
acceptance by Agent or any Lender of any of the payments provided for in the
Loan Documents, nor any payment prior to the date hereof shall, however,
(a) excuse any party from any of its obligations under the Loan Documents, or
(b) toll the running of any time periods applicable to any such rights and
remedies, including, without limitation, any time periods within which Borrowers
may cure defaults under the Loan Documents or otherwise. Each Borrower agrees
that it will not assert laches, waiver or any other defense to the enforcement
of any of the Loan Documents based upon the foregoing agreement by Agent and the
Lenders to forbear or the acceptance by Agent or any Lender of any of the
payments provided for in the Loan Documents or any payment prior to the date
hereof. As used herein, “Forbearance Term” shall mean the period commencing upon
the effectiveness of this Agreement and continuing until the earliest to occur
of: (x) any Default or Event of Default under any of the Loan Documents (other
than the Known Existing Default) or (y) February 29, 2008.

4. Termination of Agreement to Forbear. Each Borrower acknowledges and agrees
that upon the termination of Agent’s and Lenders’ agreement to forbear as
provided in Section 3 hereof, Agent and the Lenders shall be entitled to
exercise any or all of their respective remedies under the Loan Documents,
including, without limitation, the appointment of a receiver, the acceleration
of the Obligations and the enforcement under the UCC of any liens in favor of
Agent or any Lender, as a result of the Known Existing Default, and at any time
Agent and the Lenders shall be entitled to exercise any or all of their
respective remedies under the Loan Documents as a result of any other Default or
Event of Default under the Loan Documents.

5. Release; Covenant Not to Sue.

(a) Each Borrower hereby absolutely and unconditionally releases and forever
discharges Agent and the Lenders, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing
(each a “Released Party”), from any and all claims, demands or causes of action
of any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which such
Borrower has had, now has or has made claim to have against any such person for
or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Agreement, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown. It is the intention of each Borrower in providing this release that the
same shall be effective as a bar to each and every claim, demand and cause of
action specified above, and in furtherance of this intention it waives and
relinquishes all rights and benefits under Section 1542 of the Civil Code of the
State of California, which provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MIGHT HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Each Borrower acknowledges that it may hereafter discover facts different from
or in addition to those now known or believed to be true with respect to such
claims, demands, or causes of action and agree that this instrument shall be and
remain effective in all respects notwithstanding any such differences or
additional facts. Each Borrower understands, acknowledges and agrees that the
release set forth above may be pleaded as a full and complete defense and may be
used as a basis for an injunction against any action, suit or other proceeding
which may be instituted, prosecuted or attempted in breach of the provisions of
such release.

 

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(b) Each Borrower, on behalf of itself and its successors, assigns, and other
legal representatives, hereby absolutely, unconditionally and irrevocably,
covenants and agrees with and in favor of each Released Party above that it will
not sue (at law, in equity, in any regulatory proceeding or otherwise) any
Released Party on the basis of any claim released, remised and discharged by
such Borrower pursuant to the release set forth in Section 5(a) above. If any
Borrower or any of its successors, assigns or other legal representations
violates the foregoing covenant, each Borrower, for itself and its successors,
assigns and legal representatives, agrees to pay, in addition to such other
damages as any Released Party may sustain as a result of such violation, all
reasonable, documented attorneys’ fees and costs incurred by such Released Party
as a result of such violation.

6. Effectiveness of this Agreement. Agent must have received the following
items, in form and content acceptable to Agent, before this Agreement is
effective:

(a) Agreement; Acknowledgement and Release. This Agreement and the attached
Acknowledgement and Release by Guarantor, each fully executed in a sufficient
number of counterparts for distribution to all parties.

(b) Representations and Warranties. Except for the existence of the Known
Existing Default, the representations and warranties (i) set forth herein must
be true and correct and (ii) set forth in the Loan Agreement must be true and
correct in all material respects.

(c) Other Required Documentation. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered or executed or recorded and shall be in form and substance reasonably
satisfactory to Agent.

7. Representations and Warranties. Each Borrower represents and warrants as
follows:

(a) Authority. Such Borrower has the requisite corporate power and authority to
execute and deliver this Agreement, and to perform its obligations hereunder and
under the Loan Documents to which it is a party. The execution, delivery and
performance by such Borrower of this Agreement have been duly approved by all
necessary corporate action and no other corporate proceedings are necessary to
consummate such transactions.

(b) Enforceability. This Agreement has been duly executed and delivered by such
Borrower. This Agreement and each Loan Document is the legal, valid and binding
obligation of such Borrower, enforceable against such Borrower in accordance
with its terms, except to the extent that then enforcement is limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors’ rights generally and by general principles of
equity, and is in full force and effect.

(c) Representations and Warranties. The representations and warranties contained
in each Loan Document (other than any such representations or warranties that,
by their terms, are specifically made as of a date other than the date hereof)
are correct in all material respects on and as of the date hereof as though made
on and as of the date hereof.

(d) Due Execution. The execution, delivery and performance of this Agreement are
within the power of such Borrower, have been duly authorized by all necessary
corporate action, have received all necessary governmental approval, if any, and
do not contravene any law or any contractual restrictions binding on such
Borrower.

(e) No Default. Other than the Known Existing Default, no event has occurred and
is continuing that constitutes an Event of Default.

 

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(f) No Duress. This Agreement has been entered into without force or duress, of
the free will of such Borrower. Such Borrower’s decision to enter into this
Agreement is a fully informed decision and such Borrower is aware of all legal
and other ramifications of such decision.

(g) Counsel. Such Borrower has read and understands this Agreement, has
consulted with and been represented by legal counsel in connection herewith, and
has been advised by its counsel of its rights and obligations hereunder and
thereunder.

8. Choice of Law. The validity of this Agreement, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of California governing contracts only to be performed in that
State.

9. Counterparts. This Agreement may be executed in any number of counterparts
and by different parties and separate counterparts, each of which when so
executed and delivered, shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Agreement.

10. Estoppel. To induce Agent and the Lenders to enter into this Agreement and
to continue to make advances to Borrowers under the Loan Agreement, each
Borrower hereby acknowledges and agrees that, after giving effect to this
Agreement, as of the date hereof, there exists no Event of Default (other than
the Known Existing Default) and no right of offset, defense, counterclaim or
objection in favor of any Borrower as against Agent or any Lender with respect
to the Obligations.

11. Integration. This Agreement, together with the other Loan Documents,
incorporates all negotiations of the parties hereto with respect to the subject
matter hereof and is the final expression and agreement of the parties hereto
with respect to the subject matter hereof.

12. Severability. In case any provision in this Agreement shall be invalid,
illegal or unenforceable, such provision shall be severable from the remainder
of this Agreement and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

13. Modification. This Agreement may not be amended, waived or modified in any
manner without the written consent of the party against whom the amendment,
waiver or modification is sought to be enforced.

14. Submission of Agreement. The submission of this Agreement to the parties or
their agents or attorneys for review or signature does not constitute a
commitment by Agent or any Lender to forbear from the exercise of its rights and
remedies under the Loan Documents, and this Agreement shall have no binding
force or effect until all of the conditions to the effectiveness of this
Agreement have been satisfied as set forth herein.

[Remainder of Page Left Intentionally Blank]

 

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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date
first above written.

 

BORROWERS: NAUTILUS, INC., a Washington corporation By:     Name:     Title:    
NAUTILUS INTERNATIONAL S.A., a Swiss private share company By:     Name:    
Title:     AGENT AND LENDERS: BANK OF AMERICA, N.A., a national banking
association, as Agent and the sole Lender By:     Name:     Title:    

 

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ACKNOWLEDGEMENT AND RELEASE BY GUARANTOR

Dated as of February 15, 2008

The undersigned, being a Guarantor (“Guarantor”) under a Guaranty and Security
Agreement, dated as of January 16, 2008, made in favor of Agent (as amended,
modified or supplemented, the “Guaranty”), hereby acknowledges and agrees to the
foregoing Forbearance Agreement (the “Agreement”) and confirms and agrees that
its Guaranty is and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects. Although Agent has informed Guarantor of
the matters set forth above, and Guarantor has acknowledged the same, Guarantor
understands and agrees that Agent has no duty under the Loan Agreement, the
Guaranty or any other agreement with Guarantor to so notify Guarantor or to seek
such an acknowledgement, and nothing contained herein is intended to or shall
create such a duty as to any advances or transaction hereafter.

Guarantor hereby absolutely and unconditionally releases and forever discharges
each Released Party (as defined in the Agreement), from any and all claims,
demands or causes of action of any kind, nature or description, whether arising
in law or equity or upon contract or tort or under any state or federal law or
otherwise, which Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date hereof,
whether such claims, demands and causes of action are matured or unmatured or
known or unknown. It is the intention of Guarantor in providing this release
that the same shall be effective as a bar to each and every claim, demand and
cause of action specified, and in furtherance of this intention it waives and
relinquishes all rights and benefits under Section 1542 of the Civil Code of the
State of California, which provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MIGHT HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Guarantor acknowledges that it may hereafter discover facts different from or in
addition to those now known or believed to be true with respect to such claims,
demands, or causes of action and agree that this instrument shall be and remain
effective in all respects notwithstanding any such differences or additional
facts. Guarantor understands, acknowledges and agrees that the release set forth
above may be pleaded as a full and complete defense and may be used as a basis
for an injunction against any action, suit or other proceeding which may be
instituted, prosecuted or attempted in breach of the provisions of such release.
Guarantor, on behalf of itself and its successors, assigns, and other legal
representatives, hereby absolutely, unconditionally and irrevocably, covenants
and agrees with and in favor of each Released Party above that it will not sue
(at law, in equity, in any regulatory proceeding or otherwise) any Released
Party on the basis of any claim released, remised and discharged by Guarantor
pursuant to the above release. If Guarantor or any of its successors, assigns or
other legal representations violates the foregoing covenant, Guarantor, for
itself and its successors, assigns and legal representatives, agrees to pay, in
addition to such other damages as any Released Party may sustain as a result of
such violation, all reasonable and documented attorneys’ fees and costs incurred
by such Released Party as a result of such violation.

 

DASH AMERICA, INC., a Colorado corporation By:     Name:     Title:    

 

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