Document:

EX-10.2

 Exhibit 10.2 
  

			
	

	 	Continuing Security Agreement

  

			
	Name of Debtor:	  	Nautilus, Inc.
	Debtor’s Address:	  	17750 SE 6th Way, Vancouver, WA 98683

 Dated as of December 5, 2014 

Grant of Security Interest. Nautilus, Inc. (the “Debtor”) grants to JPMorgan Chase Bank, N.A., whose address is 888 SW 5th Ave.,
Portland, OR 97204 (together with its successors and assigns, the “Bank”) a continuing security interest in, pledges and assigns to the Bank all of the “Collateral” (as hereinafter defined) owned by the Debtor, all of the
collateral in which the Debtor has rights or power to transfer rights and all Collateral in which the Debtor later acquires ownership, other rights or rights or power to transfer rights to secure the payment and performance of the Liabilities. 

Credit Agreement. Capitalized terms used but not defined herein shall have the meaning attributed to them in that certain Credit Agreement by and
between the Debtor and the Bank, dated December 5, 2014 (the “Credit Agreement”) as amended, restated or replaced from time to time. 

Liabilities. “Liabilities” means all obligations, indebtedness and liabilities of the Debtor whether individual, joint and several, absolute
or contingent, direct or indirect, liquidated or unliquidated, now or hereafter existing in favor of the Bank, including without limitation, all liabilities, all interest, costs and fees arising under or from any note, open account, overdraft,
letter of credit application, endorsement, surety agreement, guaranty, credit card, lease, Rate Management Transaction, acceptance, foreign exchange contract or depository service contract, whether payable to the Bank or to a third party and
subsequently acquired by the Bank, any monetary obligations (including interest) incurred or accrued during the pendency of any bankruptcy, insolvency, receivership or other similar proceedings, regardless of whether allowed or allowable in such
proceeding, and all renewals, extensions, modifications, consolidations, rearrangements, restatements, replacements or substitutions of any of the foregoing. “Rate Management Transaction” means any transaction (including an agreement with
respect thereto) that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option, derivative transaction or any other similar transaction (including any option with respect to
any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures. The Debtor and the Bank specifically contemplate that Liabilities
include indebtedness hereafter incurred by the Debtor to the Bank. 
 Collateral. Accounts; Chattel Paper; Deposit Accounts and other payment
obligations of a financial institution (including the Bank); Documents; Equipment; General Intangibles; Instruments; Inventory; Investment Property; Pledged Equity; and Letter of Credit Rights; provided, however, that the Collateral shall not
include the Excluded Equity. 
 Description of Collateral. As used in this agreement, the term “Collateral” means all of the Debtor’s
property whether owned individually or jointly with others of the types indicated above and defined below, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, including but not limited to any
items listed on any schedule or list attached hereto. In addition, the term “Collateral” includes all “proceeds,” “products” and “supporting obligations” (as such terms are defined in the “UCC,”
meaning the Uniform Commercial Code of Washington, as in effect from time to time) of the Collateral indicated above, including but not limited to all stock rights, subscription rights, dividends, stock dividends, stock splits, or liquidating
dividends, and all cash, accounts, chattel paper, “instruments,” “investment property,” “financial assets,” and “general intangibles” (as such terms are defined in the UCC) arising from the sale, rent, lease,
casualty loss or other disposition of the Collateral, and any Collateral returned to, repossessed by or stopped in transit by the Debtor, and all insurance claims relating to any of the Collateral (defined above). The term “Collateral”
further includes all of the Debtor’s right, title and interest in and to all books, records and data relating to the Collateral identified above, regardless of the form of media containing such information or data, and all software necessary or
desirable to use any of the Collateral identified above or to access, retrieve, or process any of such information or data. Where the Collateral is in the possession of the Bank or the Bank’s agent, the Debtor agrees to deliver to the Bank any
property that represents an increase in the Collateral or profits or proceeds of the Collateral. 
  

	1.	“Accounts” means all of the Debtor’s “accounts” as defined in Article 9 of the UCC. 

  

	2.	“Chattel Paper” means all of the Debtor’s “chattel paper” as defined in Article 9 of the UCC. 

  

	3.	“Deposit Accounts” means all of the Debtor’s “deposit accounts” as defined in Article 9 of the UCC and other payment obligations of a financial institution (including the Bank) to the Debtor.

  

	4.	“Documents” means all of the Debtor’s “documents” as defined in Article 9 of the UCC. 

	5.	“Domestic Subsidiary” means any subsidiary of the Debtor that is organized under the laws of any political subdivision of the United States. 

 

	6.	“Equipment” means all of the Debtor’s “equipment” as defined in Article 9 of the UCC. In addition, “Equipment” includes any “documents” (as defined in Article 9 of the UCC)
issued with respect to any of the Debtor’s “equipment” (as defined in Article 9 of the UCC) and certificates of title relating to the foregoing. Without limiting the security interest granted, the Debtor represents and warrants that
the Debtor’s Equipment is presently located at the address set forth in this agreement or in a separate Collateral Location Schedule delivered to the Bank. 

  

	7.	“Equity Interests” means (i) in the case of a corporation, capital stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of a trust, beneficial interests therein, (iv) in the case of a partnership, partnership interests (whether general or limited), (v) in the case of a limited
liability company, membership interests and (vi) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, and any warrants,
options or other rights entitling the holder thereof to purchase or acquire any such equity interest. 

  

	8.	“Excluded Equity” means the Equity Interests of any Foreign Subsidiary to the extent such Equity Interests do not constitute Pledged Equity. 

 

	9.	“Foreign Subsidiary” means any subsidiary of the Debtor that is not a Domestic Subsidiary. 

  

	10.	“General Intangibles” means all of the Debtor’s “general intangibles” as defined in Article 9 of the UCC. In addition, “General Intangibles” further includes any right to a refund of
taxes paid at any time to any governmental entity. 

  

	11.	“Instruments” means all of the Debtor’s “instruments” as defined in Article 9 of the UCC. 

  

	12.	“Inventory” means all of the Debtor’s “inventory” as defined in Article 9 of the UCC. In addition, “Inventory” includes any “documents” and certificates of title issued with
respect to any of the Debtor’s “inventory” (as defined in Article 9 of the UCC). Without limiting the security interest granted, the Debtor represents and warrants that the Debtor’s Inventory is presently located at the address
set forth in this agreement or in a separate Collateral Location Schedule delivered to the Bank. 

  

	13.	“Investment Property” means all of the Debtor’s “investment property” as defined in Article 9 of the UCC and all of the Debtor’s “financial assets,” as defined in Article 8 of the
UCC. 

  

	14.	“Letter of Credit Rights” means all of the Debtor’s “letter of credit rights” as defined in Article 9 of the UCC. 

 

	15.	“Pledged Equity” means (i) 100% of the issued and outstanding Equity Interests of each Domestic Subsidiary of the Debtor that is directly owned by the Debtor and (ii) 65% (or such greater percentage
that, due to a change in an applicable law after the date hereof, (A) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for United States federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary’s United States parent and (B) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning
of Treas. Reg. Section 1.956 2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956 2(c)(2)) in each Foreign Subsidiary of the Debtor that is directly owned by
the Debtor, including the Equity Interests of the subsidiaries owned by the Debtor as set forth on any schedule or list attached hereto, in each case together with the certificates (or other agreements or instruments), if any, representing such
shares, and all options and other rights, contractual or otherwise, with respect thereto. 

 Collateral Location Schedule.
“Collateral Location Schedule” means a schedule in the form attached to this agreement. The Debtor agrees to complete, execute and deliver a Collateral Location Schedule to the Bank with respect to any Collateral for which the Debtor has
identified a location in this agreement: (i) concurrently with the execution of this agreement, if the initial location of the Collateral is other than the address of the Debtor set forth above; and (ii) within ten (10) days prior to
the relocation of any Collateral to any place other than the address of the Debtor set forth above or the location identified in any previously submitted Collateral Location Schedule. 

Pledged Equity Schedule. “Pledged Equity Schedule” means a schedule in the form attached to this agreement. The Debtor agrees to complete,
execute and deliver a Pledged Equity Schedule to the Bank: (i) concurrently with the execution of this agreement; and (ii) within thirty (30) days following the acquisition of any Pledged Equity Interests. 

Representations, Warranties and Covenants. The Debtor represents and warrants to, and covenants and agrees with the Bank that each of the following is
true and will remain true until termination of this agreement and full and final payment of all Liabilities: 
  

	1.	Its principal residence or chief executive office is at the address shown above; 

  
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	2.	The Debtor’s name as it appears in this agreement is its exact name as it appears in the Debtor’s organizational documents, as amended, including any trust documents; 

 

	3.	It is or will become the owner of the Collateral free from any liens, encumbrances or security interests, except for Permitted Liens, and it will defend the Collateral against all claims and demands of all persons at
any time claiming any interest in the Collateral; 

  

	4.	It will keep the Collateral free of liens, encumbrances and other security interests, except for Permitted Liens, maintain the Collateral in good repair, not use it illegally and exhibit the Collateral to the Bank on
demand; 

  

	5.	At its own expense, the Debtor will maintain comprehensive casualty insurance on the tangible Collateral against such risks, in such amounts, with such deductibles and with such companies as may be satisfactory to the
Bank. Each insurance policy shall contain a lender’s loss payable endorsement in form and substance satisfactory to the Bank and a prohibition against cancellation or amendment of the policy or removal of the Bank as loss payee without at least
thirty (30) days’ prior written notice to the Bank. In all events, the amounts of such insurance coverages shall conform to prudent business practices and shall be in such minimum amounts that the Debtor will not be deemed a co-insurer.
The policies and certificates evidencing them, shall, if the Bank so requests, be deposited with the Bank. The Debtor authorizes the Bank to endorse on the Debtor’s behalf and to negotiate drafts reflecting proceeds of insurance of the
Collateral, provided that the Bank shall remit to the Debtor such surplus, if any, as remains after the proceeds have been applied, at the Bank’s option, to the satisfaction of all of the Liabilities (in such order of application as the Bank
may elect) or to the establishment of a cash collateral account for the Liabilities; 

  

	6.	It will not sell, lease, license or offer to sell, lease, license or otherwise transfer the Collateral or any rights in or to the Collateral, without the written consent of the Bank, except sales of inventory to buyers
in the ordinary course of Debtor’s business, sales of damaged, obsolete, surplus, or worn-out property, or as otherwise permitted herein or in the Credit Agreement; 

 

	7.	It will not change the location of the Collateral (other than goods in transit, goods that are temporarily in the possession of repairmen, product testing services, or potential buyers or vendors as samples, or goods in
temporary storage in the ordinary course of business) from Debtor’s premises, from the locations of the Collateral described in this agreement and any separate Collateral Location Schedule provided to the Bank, without providing at least ten
(10) days’ prior written notice to the Bank by means of submitting a Collateral Location Schedule, except (A) for deliveries to buyers in the ordinary course of Debtor’s business, and deliveries of damaged, obsolete, surplus or
worn-out property, and (B) Collateral which consists of mobile goods (as such term is used in the 1972 Uniform Commercial Code), in which case Debtor agrees not to remove or permit the removal of such Collateral from its state of domicile for a
period in excess of thirty (30) calendar days from Debtor’s premises except in the ordinary course of Debtor’s business; 

  

	8.	It will pay promptly when due all taxes and assessments upon the Collateral, or for the use or operation of the Collateral; 

  

	9.	No financing statement covering all or any part of the Collateral or any proceeds is on file in any public office, unless the Bank has approved that filing. From time to time at the Bank’s request, the Debtor will
execute one or more financing statements or similar record and a control agreement with respect to the proceeds in form satisfactory to the Bank and will pay the cost of filing them in all public offices where filing is deemed by the Bank to be
reasonably necessary or desirable. In addition, the Debtor shall execute and deliver, or cause to be executed and delivered, such other documents as the Bank may from time to time reasonably request to perfect or to further evidence the security
interest created in the Collateral by this agreement including, without limitation: (a) any certificate or certificates of title to the Collateral with the security interest of the Bank noted thereon or executed applications for such
certificates of title in form satisfactory to the Bank; (b) any assignments of claims under government contracts which are included as part of the Collateral, together with any notices and related documents as the Bank may from time to time
request; (c) any assignment of any specific account receivable as the Bank may from time to time request; (d) a notice of and acknowledgment of the Bank’s security interest and a control agreement with respect to any Collateral, all
in form and substance satisfactory to the Bank; (e) a notice to and acknowledgment from any person holding or in possession of any Collateral that such persons holds the Collateral as a bailee for the Bank’s benefit, all in form and
substance reasonably satisfactory to the Bank; and (f) any consent to the assignment of proceeds of any letter of credit, all in form and substance reasonably satisfactory to the Bank; 

 

	10.	It will not, without the Bank’s prior written consent, change the Debtor’s name, the Debtor’s business organization, the jurisdiction under which the Debtor’s business organization is formed or
organized, or the Debtor’s chief executive office, or of any additional places of the Debtor’s business; 

  

	11.	It will provide any information that the Bank may reasonably request and will permit the Bank or the Bank’s agents to inspect and copy its books, records, data and the Collateral at any time during normal business
hours; 

  

	12.	The Bank shall have the right now, and at any time in the future in its sole and absolute discretion, without notice to the Debtor, to (a) prepare, file and sign the Debtor’s name on any proof of claim in
bankruptcy or similar document against any owner of the Collateral and (b) prepare, file and sign the Debtor’s name on any financing statement, notice of lien, assignment or satisfaction of lien or similar document in connection with the
Collateral. The Debtor hereby authorizes the Bank to file financing statements covering Collateral or such lesser amount of assets as the Bank may determine, or the Bank may, at its option, file financing statements or similar records containing any
collateral description which reasonably describes the Collateral in which a security interest is granted under this agreement; 

  

	13.	Immediately upon the Debtor’s receipt of any Collateral evidenced by an agreement, “instrument,” “chattel paper,” certificated “security” or “document” (as such terms are
defined in the UCC) (collectively, “Special Collateral”), the Debtor shall mark the Special Collateral to show that it is subject to the Bank’s security interest and shall deliver the original to the Bank together with appropriate
endorsements and other specific evidence of assignment or transfer in form and substance satisfactory to the Bank; 

  
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	14.	The Debtor shall keep all tangible Collateral in good order and repair and shall not waste or destroy any of the Collateral, nor use any of the Collateral in violation of any applicable law or any policy of insurance
thereon; 

  

	15.	Except as may be otherwise disclosed in writing by the Debtor to the Bank, none of the Collateral is attached to real estate so as to constitute a “fixture” (as defined in the UCC) and none of the Collateral
shall at any time hereafter be attached to real estate so as to constitute a fixture. If any of the Collateral is now or at any time hereafter becomes so attached to real estate so as to constitute a fixture, the Debtor shall, at any time upon the
Bank’s request, furnish the Bank with a disclaimer of interest in the Collateral executed by each person or entity having an interest in such real estate. 

Accounts; Chattel Paper; General Intangibles and Instruments. If the Collateral includes the Debtor’s “Accounts, Chattel Paper, General
Intangibles and Instruments” and until the Bank gives notice to the Debtor to the contrary, the Debtor will, in the usual course of its business and at its own expense, on the Bank’s behalf but not as the Bank’s agent, demand and
receive and use its best efforts to collect all moneys due or to become due with respect to the Collateral. So long as no default has occurred in any provision of this agreement, the Notes or any other Related Documents and is continuing beyond the
applicable cure period set forth therein, Debtor may use the funds collected in its business. Upon the occurrence of a default in any provision of this agreement, the Notes or any other Related Documents beyond the applicable cure period set forth
therein, and notice thereof from the Bank, the Debtor agrees that (1) all sums of money it receives on account of or in payment or settlement of the Accounts, Chattel Paper, General Intangibles and Instruments shall be held by it as trustee for
the Bank without commingling with any of the Debtor’s other funds, and shall immediately be delivered to the Bank with endorsement to the Bank’s order of any check or similar instrument and (2) the Bank shall be entitled, in its own
name or in the name of the Debtor or otherwise, but at the expense and cost of the Debtor, to collect, demand, receive, sue for or compromise any and all Accounts, Chattel Paper, General Intangibles, and Instruments, and to give good and sufficient
releases, to endorse any checks, drafts or other orders for the payment of money payable to the Debtor and, in the Bank’s discretion, to file any claims or take any action or proceeding which the Bank may deem necessary or advisable. It is
expressly understood and agreed, however, that the Bank shall not be required or obligated in any manner to make any demand or to make any inquiry as to the nature or sufficiency of any payment received by it or to present or file any claim or take
any other action to collect or enforce the payment of any amounts which may have been assigned to the Bank or to which the Bank may be entitled at any time or times. All notices required in this paragraph will be immediately effective when sent.
Such notices need not be given prior to the Bank’s taking action. The Debtor appoints the Bank or the Bank’s designee as the Debtor’s attorney-in-fact, effective when an Event of Default exists, to do all things with reference to the
Collateral as provided for in this section including without limitation (1) to notify the post office authorities to change the Debtor’s mailing address to one designated by the Bank, (2) to receive, open and dispose of mail addressed
to the Debtor, (3) to sign the Debtor’s name on any invoice or bill of lading relating to any Collateral, on assignments and verifications of account and on notices to the Debtor’s customers, and (4) to do all things necessary to
carry out this agreement or to perform any of the obligations of the Debtor under this agreement. The Debtor ratifies and approves all acts of the Bank as attorney-in-fact. The Bank shall not be liable for any act or omission, nor any error of
judgment or mistake of fact or law, but only for its gross negligence or willful misconduct. This power being coupled with an interest is irrevocable until all of the Liabilities have been fully satisfied and shall survive the death or disability of
the Debtor. 
 Pledge. If the Debtor is not liable for all or any part of the Liabilities, then the Debtor agrees that: 

 

	1.	If any moneys become available from any source other than the Collateral that the Bank can apply to the Liabilities, the Bank may apply them in any manner it chooses, including but not limited to applying them against
obligations, indebtedness or liabilities which are not secured by this agreement. 

  

	2.	The Bank may take any action against the Debtor, the Collateral or any other collateral for the Liabilities, or any other person or entity liable for any of the Liabilities. 

 

	3.	The Bank may release the Debtor or anyone else from the Liabilities, either in whole or in part, or release the Collateral in whole or in part or any other collateral for the Liabilities, and need not perfect a security
interest in the Collateral or any other collateral for the Liabilities. 

  

	4.	The Bank does not have to exercise any rights that it has against the Debtor or anyone else, or make any effort to realize on the Collateral or any other collateral for the Liabilities, or exercise any right of setoff.

  

	5.	Without notice or demand and without affecting the Debtor’s obligations hereunder, from time to time, the Bank is authorized to: (a) renew, modify, compromise, rearrange, restate, consolidate, extend,
accelerate or otherwise change the time for payment of, or otherwise change the terms of the Liabilities or any part thereof, including increasing or decreasing the rate of interest thereon; (b) release, substitute or add any one or more
sureties, endorsers, or guarantors; (c) take and hold other collateral for the payment of the Liabilities, and enforce, exchange, substitute, subordinate, impair, waive or release any such collateral; (d) proceed against the Collateral or
any other collateral for the Liabilities and direct the order or manner of sale as the Bank in its discretion may determine; and (e) apply any and all payments received by the Bank in connection with the Liabilities, or recoveries from the
Collateral or any other collateral for the Liabilities, in such order or manner as the Bank in its discretion may determine. 

  

	6.	The Debtor’s obligations hereunder shall not be released, diminished or affected by (a) any act or omission of the Bank, (b) the voluntary or involuntary liquidation, sale or other disposition of all or
substantially all of the assets of the Debtor, or any receivership, insolvency, bankruptcy, reorganization, or other similar proceedings affecting the Debtor or any of its assets or any other obligor on the Liabilities or that obligor’s assets,
(c) any change in the composition or structure of the Debtor or any other obligor on the Liabilities, including a merger or consolidation with any other person or entity, or (d) any payments made upon the Liabilities. 

  
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	7.	The Debtor expressly consents to any impairment of any other collateral for the Liabilities, including, but not limited to, failure to perfect a security interest and release of any other collateral for the Liabilities
and any such impairment or release shall not affect the Debtor’s obligations hereunder. 

  

	8.	The Debtor waives and agrees not to enforce any rights of subrogation, contribution or indemnification that it may have against the Debtor, any person or entity liable on the Liabilities, or the Collateral, until the
Debtor and the Debtor have fully performed all their obligations to the Bank, even if those obligations are not covered by this agreement. 

  

	9.	The Debtor waives (a) to the extent not prohibited by applicable law, all rights and benefits under any laws or statutes regarding sureties, as may be amended, (b) any right the Debtor may have to receive
notice of the following matters before the Bank enforces any of its rights: (i) the Bank’s acceptance of this agreement, (ii) incurrence or acquisition of any Liabilities, any credit that the Bank extends to the Debtor, (iii) the
Debtor’s default, (iv) any demand, diligence, presentment, dishonor and protest, or (v) any action that the Bank takes regarding the Debtor, anyone else, any other collateral for the Liabilities, or any of the Liabilities, which it
might be entitled to by law or under any other agreement, (c) any right it may have to require the Bank to proceed against the Debtor, any guarantor or other obligor on the Liabilities, the Collateral or any other collateral for the
Liabilities, or pursue any remedy in the Bank’s power to pursue, (d) any defense based on any claim that the Debtor’s obligations exceed or are more burdensome than those of the Debtor, (e) the benefit of any statute of
limitations affecting the Debtor’s obligations hereunder or the enforcement hereof, (f) any defense arising by reason of any disability or other defense of the Debtor or by reason of the cessation from any cause whatsoever (other than
payment in full) of the obligation of the Debtor for the Liabilities, and (g) any defense based on or arising out of any defense that the Debtor may have to the payment or performance of the Liabilities or any portion thereof. The Bank may
waive or delay enforcing any of its rights without losing them. Any waiver affects only the specific terms and time period stated in the waiver. 

  

	10.	The Debtor agrees that to the extent any payment or transfer is received by the Bank in connection with the Liabilities, and all or any part of such payment or transfer is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be transferred or repaid by the Bank or paid over to a trustee, receiver or any other person or entity, whether under any bankruptcy act or otherwise (any of those payments or transfers is
hereinafter referred to as a “Preferential Payment”), then this agreement shall continue to be effective or shall be reinstated, as the case may be, even if all Liabilities have been paid in full, and whether or not the Bank is in
possession of this agreement or whether this agreement has been marked paid, cancelled, released or returned to the Debtor, and, to the extent of the payment or repayment or other transfer by the Bank, the Liabilities or part intended to be
satisfied by the Preferential Payment shall be revived and continued in full force and effect as if the Preferential Payment had not been made. If this agreement must be reinstated, the Debtor agrees to execute and deliver to the Bank any new
security agreements and financing statements, if necessary or if requested by the Bank, in form and substance acceptable to the Bank, covering the Collateral. 

  

	11.	The Debtor agrees to fully cooperate with the Bank and not to delay, impede or otherwise interfere with the efforts of the Bank to secure payment from the assets which secure the Liabilities including actions,
proceedings, motions, orders, agreements or other matters relating to relief from automatic stay, abandonment of property, use of cash collateral and sale of the Bank’s collateral free and clear of all liens. 

 

	12.	The Debtor has (a) without reliance on the Bank or any information received from the Bank and based upon the records and information the Debtor deems appropriate, made an independent investigation of the Debtor,
the Debtor’s business, assets, operations, prospects and condition, financial or otherwise, and any circumstances that may bear upon those transactions, the Debtor or the obligations, liabilities and risks undertaken pursuant to this agreement;
(b) adequate means to obtain from the Debtor on a continuing basis information concerning the Debtor and the Bank has no duty to provide any information concerning the Debtor or other obligor on the Liabilities to the Debtor; (c) full and
complete access to the Debtor and any and all records relating to any Liabilities now or in the future owing by the Debtor; (d) not relied and will not rely upon any representations or warranties of the Debtor not embodied in this agreement or
any acts taken by the Debtor prior to or after the execution or other authentication and delivery of this agreement (including but not limited to any review by the Debtor of the business, assets, operations, prospects and condition, financial or
otherwise, of the Debtor); and (e) determined that the Debtor will receive benefit, directly or indirectly, and has or will receive fair and reasonably equivalent value, for the execution and delivery of this agreement and the rights provided
to the Bank. By entering into this agreement, the Debtor does not intend: (i) to incur or believe that the Debtor will incur debts that would be beyond the Debtor’s ability to pay as those debts mature; or (ii) to hinder, delay or
defraud any creditor of the Debtor. The Debtor is neither engaged in nor about to engage in any business or transaction for which the remaining assets of the Debtor are unreasonably small in relation to the business or transaction, and any property
remaining with the Debtor after the execution or other authentication of this agreement is not unreasonably small capital. 

 Default;
Remedies. If any of the Liabilities are not paid at maturity, whether by acceleration or otherwise, or if a default by anyone occurs under the terms of any agreement related to any of the Liabilities and such default is not cured within the
applicable cure period set forth therein, then the Bank shall have the rights and remedies provided by law or this agreement, including but not limited to the right to require the Debtor to assemble the Collateral and make it available to the Bank
at a place to be designated by the Bank which is reasonably convenient to both parties, the right to take possession of the Collateral with or without demand and with or without process of law, and the right to sell and dispose of it and distribute
the proceeds according to law. Should a default occur, the Debtor will pay to the Bank all costs reasonably incurred by the Bank for the purpose of enforcing its rights hereunder, to the extent not prohibited by law, including, without limitation:
costs of foreclosure; costs of obtaining money damages; and a reasonable fee for the services of internal and outside attorneys employed or engaged by the Bank or its affiliates for any purpose related to this agreement, including, without
limitation, consultation, drafting documents, sending notices or instituting, prosecuting or defending litigation or 

  
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any proceeding. The Debtor agrees that upon taking possession of the Collateral as provided herein, the Bank may dispose of any of the Collateral in its then present condition, that the Bank has
no duty to repair or clean the Collateral prior to sale, and that the disposal of the Collateral in its present condition or without repair or clean-up shall not affect the commercial reasonableness of such sale or disposition. The Bank’s
compliance with any applicable state or federal law requirements in connection with the disposition of the Collateral will not adversely affect the commercial reasonableness of any sale of the Collateral. The Bank may disclaim warranties of title,
possession, quiet enjoyment, and the like, and the Debtor agrees that any such action shall not affect the commercial reasonableness of the sale. In connection with the right of the Bank to take possession of the Collateral, the Bank may take
possession of any other items of property in or on the Collateral at the time of taking possession, and hold them for the Debtor without liability on the part of the Bank. The Debtor expressly agrees that the Bank may enter upon the premises where
the Collateral is believed to be located without any obligation of payment to the Debtor, and that the Bank may, without cost, use any and all of the Debtor’s “equipment” (as defined in the UCC) in the manufacturing or processing of
any “inventory” (as defined in the UCC) or in growing, raising, cultivating, caring for, harvesting, loading and transporting of any of the Collateral that constitutes “farm products” (as defined in the UCC). If there is any
statutory requirement for notice, that requirement shall be met if the Bank sends notice to the Debtor at least ten (10) days prior to the date of sale, disposition or other event giving rise to the required notice, and such notice shall be
deemed commercially reasonable. The Debtor is liable for any deficiency remaining after disposition of the Collateral. 
 Miscellaneous. 

 

	1.	Where the Collateral is located at, used in or attached to a facility leased by the Debtor, the Debtor will obtain from the lessor a consent to the granting of this security interest and a release or subordination of
the lessor’s interest in any of the Collateral, in form and substance reasonably satisfactory to the Bank. 

  

	2.	At its option the Bank may, but shall be under no duty or obligation to, discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Collateral, pay for insurance on the
Collateral, and pay for the maintenance and preservation of the Collateral, and the Debtor agrees to reimburse the Bank on demand for any payment made or expense incurred by the Bank, with interest at the highest rate at which interest may accrue
under any of the instruments or documents evidencing the Liabilities. 

  

	3.	No delay on the part of the Bank in the exercise of any right or remedy waives that right or remedy, no single or partial exercise by the Bank of any right or remedy precludes any other exercise of it or the exercise of
any other right or remedy, and no waiver or indulgence by the Bank of any default is effective unless it is in writing and signed by the Bank, nor does a waiver on one occasion waive that right on any future occasion. 

 

	4.	If any provision of this agreement is invalid, it shall be ineffective only to the extent of its invalidity, and the remaining provisions shall be valid and effective. 

 

	5.	Except as provided in the Accounts; Chattel Paper; General Intangibles; and Instruments paragraph above, any notices and demands under or related to this document shall be in writing and delivered to the intended party
at its address stated herein, and if to the Bank, at its main office if no other address of the Bank is specified herein, by one of the following means: (a) by hand, (b) by a nationally recognized overnight courier service, or (c) by
certified mail, postage prepaid, with return receipt requested. Notice shall be deemed given: (a) upon receipt if delivered by hand, (b) on the Delivery Day after the day of deposit with a nationally recognized courier service, or
(c) on the third Delivery Day after the notice is deposited in the mail. “Delivery Day” means a day other than a Saturday, a Sunday, or any other day on which national banking associations are authorized to be closed. Any party may
change its address for purposes of the receipt of notices and demands by giving notice of such change in the manner provided in this provision. 

  

	6.	All rights of the Bank benefit the Bank’s successors and assigns; and all obligations of the Debtor bind the Debtor’s heirs, executors, administrators, successors and assigns. 

 

	7.	A carbon, photographic or other reproduction of this agreement is sufficient as, and can be filed as, a financing statement. The Bank is irrevocably appointed the Debtor’s attorney-in-fact to execute any financing
statement on the Debtor’s behalf covering the Collateral. The Debtor authorizes the Bank to file one or more financing statements or similar records related to the security interests created by this agreement, and further authorizes the Bank,
as secured party herein, instead of the Debtor, to sign such financing statements and other similar records. 

  

	8.	Time is of the essence under this agreement and in the performance of every term, covenant and obligation contained herein. 

Indemnification. The Debtor agrees to indemnify, defend and hold the Bank, its parent companies, subsidiaries, affiliates, their respective successors
and assigns and each of their respective shareholders, directors, officers, employees and agents (collectively the “Indemnified Persons”) harmless from and against any and all loss, liability, obligation, damage, penalty, judgment, claim,
deficiency, expense, interest, penalties, attorneys’ fees (including the fees and expenses of attorneys engaged by the Indemnified Person at the Indemnified Person’s reasonable discretion) and amounts paid in settlement
(“Claims”) to which any Indemnified Person may become subject arising out of or relating to this agreement or the Collateral, except to the limited extent that the Claims are proximately caused by the Indemnified Person’s gross
negligence or willful misconduct. The indemnification provided for in this paragraph shall survive the termination of this agreement and shall not be affected by the presence, absence or amount of or the payment or nonpayment of any claim under, any
insurance. 
 Governing Law and Venue. This agreement shall be governed by and construed in accordance with the laws of the State of Washington
(without giving effect to its laws of conflicts), and to the extent applicable, federal law, except to the extent that the laws regarding the perfection and priority of security interests of the state(s) in which either the Debtor or any property
securing the 

  
 6 

 
Liabilities is located, are applicable. The Debtor agrees that any legal action or proceeding with respect to any of its obligations under this agreement may be brought by the Bank in any state
or federal court located in the State of Washington, as the Bank in its sole discretion may elect. By the execution and delivery of this agreement, the Debtor submits to and accepts, for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of those courts. The Debtor waives any claim that the State of Washington is not a convenient forum or the proper venue for any such suit, action or proceeding. 

Additional Representations, Warranties and Covenants. The Debtor represents, warrants and covenants to the Bank that each of the following is true and
will remain true until termination of this agreement and payment in full of all Liabilities: (a) the execution and delivery of this agreement and the performance of the obligations it imposes do not violate any law, do not conflict with any
agreement by which it is bound, and do not require the consent or approval of any governmental authority or any third party; (b) this agreement is a valid and binding agreement, enforceable according to its terms; and (c) all balance
sheets, profit and loss statements, and other financial statements furnished to the Bank in connection with the Liabilities are accurate and fairly reflect the financial condition of the organizations and persons to which they apply on their
effective dates, including contingent liabilities of every type, which financial condition has not changed materially and adversely since those dates. The Debtor, other than a natural person, further represents that: (a) it is duly organized,
validly existing and in good standing under the laws of the state where it is organized and in good standing in each state where it is doing business; and (b) the execution and delivery of this agreement and the performance of the obligations
it imposes (i) are within its powers and have been duly authorized by all necessary action of its governing body; and (ii) do not contravene the terms of its articles of incorporation or organization, its by-laws, or any agreement or
document governing its affairs. 
 WAIVER OF SPECIAL DAMAGES. THE DEBTOR WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THE
UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 

JURY WAIVER. THE DEBTOR AND THE BANK (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN OR AMONG THE DEBTOR AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO
PROVIDE THE FINANCING DESCRIBED HEREIN. 
  

			
	Debtor:
	
	Nautilus, Inc.
		
	By:	 	 /s/ Sid Nayar

		 	Sid Nayar, Chief Financial Officer

 
			
	
	Date Signed: December 5, 2014

  
 7 

 Collateral Location Schedule 

 

					
	Date:
                    December 5,
2014                                    	 	Debtor: Nautilus, Inc.
	Check one:	 	x  Designation of initial location of Collateral	 	Date of Continuing Security Agreement: December 5, 2014
	 	 	 ̈  Notice of intent to relocate Collateral	 	 

							
	Instructions: This schedule should be completed by the Debtor (the owner of the Collateral) described in
the Continuing Security Agreement to which this form is attached, if the Collateral is located at or will be relocated to, any place other than the Debtor’s address set forth in the Continuing Security Agreement. The Debtor is required to
notify the Bank in writing at least ten (10) days’ prior to changing the location of any Collateral. The Debtor represents and warrants that the Collateral is located or stored at the location(s) described below and if any location(s) is
leased or used for storage and not owned by the Debtor, the name, address and the phone number of the Landlord or owner of the warehouse (“Warehouseman”) and contact name is set forth below with respect to the leased or storage
premises.	 	 

									
	Please PRINT or TYPE the following information.
	 	 	Collateral Location	 	 	 	Landlord/Warehouseman Information
	Address:	 	
        18225 NE Riverside Parkway, Bldg G
	 		 	 ̈  Check if Collateral Location is owned by the Debtor, otherwise, check applicable box and complete
information below.
	 	 		 		 	x  Landlord          ̈  Warehouseman
	City, State:	 	         Portland, Oregon
	 		 	Name:	 	    PLDAB LLC

	 	 		 		 	Address:	 	
   26277 SW 95th Avenue

	Zip Code:	 	         97230
	 		 	Suite Number:	 	    Suite 405

	 	 		 		 	City, State:	 	
   Wilsonville, Oregon

	Collateral:	 	         Inventory
	 		 	Zip Code:	 	    97070

	 	 		 		 	Contact Name:	 	  

	 	 		 		 	 Phone Number:
  
	 	
   (    )

 

	Collateral Location	 	 	 	Landlord/Warehouseman Information
	Address:	 	         5415 Centerpoint Parkway
	 		 	 ̈  Check if Collateral Location is owned by the Debtor, otherwise, check applicable box and complete
information below.
	 	 		 		 	x  Landlord          ̈  Warehouseman
	City, State:	 	         Obetz, Ohio
	 		 	Name:	 	    CP V, LLC

	 	 		 		 	Address:	 	    c/o Exxcel Project
Management, Inc.

	Zip Code:	 	         43125
	 		 	Suite Number:	 	    328 Civic Center
Drive

	 	 		 		 	City, State:	 	    Columbus, Ohio

	Collateral:	 	         Inventory
	 		 	Zip Code:	 	    43215

	 	 		 		 	Contact Name:	 	  

	 	 		 		 	 Phone Number:
  
	 	
   (    )

 

	Collateral Location	 	 	 	Landlord/Warehouseman Information
	Address:	 	  
	 		 	 ̈  Check if Collateral Location is owned by the Debtor, otherwise, check applicable box and complete
information below.
	 	 		 		 	 ̈  Landlord          ̈  Warehouseman
	City, State:	 	  
	 		 	Name:	 	  

	 	 		 		 	Address:	 	  

	Zip Code:	 	  
	 		 	Suite Number:	 	  

	 	 		 		 	City, State:	 	  

	Collateral:	 	  
	 		 	Zip Code:	 	  

	 	 		 		 	Contact Name:	 	  

	 	 		 		 	 Phone Number:
  
	 	  

 

	Collateral Location	 	 	 	Landlord/Warehouseman Information
	Address:	 	  
	 		 	 ̈  Check if Collateral Location is owned by the Debtor, otherwise, check applicable box and complete
information below.
	 	 		 		 	 ̈  Landlord          ̈  Warehouseman
	City, State:	 	  
	 		 	Name:	 	  

	 	 		 		 	Address:	 	  

	Zip Code:	 	  
	 		 	Suite Number:	 	  

	 	 		 		 	City, State:	 	  

	Collateral:	 	  
	 		 	Zip Code:	 	  

	 	 		 		 	Contact Name:	 	  

	 	 	 	 	 	 	 Phone Number:
  
	 	  

 

	DEBTOR: Nautilus, Inc.	 		 		 	 
	 				 
	By:	 	  
	 		 		 	 
	Name:	 	  
	 		 		 	 
	 Title:

 
	 	  

 
	 	 	 	 	 	 

  
 8 

 Pledged Equity Schedule 

 

															
	Date:
                    December 5, 2014                
        	 	
Debtor: Nautilus, Inc.
 Date of Continuing Security
Agreement: December 5, 2014

							
	Instructions: This schedule should be completed by the Debtor (the owner of the Pledged Equity) described in the Continuing Security
Agreement to which this form is attached. The Debtor represents and warrants that set forth on this Schedule is (i) a complete and accurate list of all subsidiaries, joint ventures and partnerships and other equity investments of the Debtor as
of the date of this Schedule, (ii) the number of shares of each class of Equity Interests in each subsidiary outstanding, (iii) the number and percentage of outstanding shares of each class of Equity Interests owned by the Debtor and
(iv) the class or nature of such Equity Interests (i.e. voting, non-voting, preferred, etc.).	  	 

															
	Please PRINT or TYPE the following information.
	Issuer	 	
Owner
	 	Total Number    
of Shares    
Outstanding    	 	Number of    
Shares Owned    
by
Debtor    	 	Certificate    
Number(s)    	 	Percentage of
Shares Owned
by Debtor	 	 	Class/Nature
(Voting, Non-
Voting, Preferred,
Etc.)
	 Nautilis Fitness Canada, Inc.
	 	Debtor	 	100	 	100	 	R3	 	 	100	% 	 	Common
	 Pacific Direct LLC
	 	Debtor	 	 	 	 	 	 	 	 	50	% 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

													
	DEBTOR: Nautilus, Inc.	  		  		  		  	 
	 					 
	By:	  	  
	  		  		  		  	 
	Name:	  	  
	  		  		  		  	 
	Title:	  	  
	  		  		  		  	 
	 					 
	    	  	 	  	 	  	 	  	 	  	 

  
 9EX-10.3

 Exhibit 10.3 
  

			
	

	 	Line of Credit Note

 $20,000,000.00 

Date: December 5, 2014 
 (NOTE: THIS
PROMISSORY NOTE MAY REQUIRE A BALLOON PAYMENT AT MATURITY). 
 Promise to Pay. On or before December 5, 2017, for value received, Nautilus,
Inc. (the “Borrower”) promises to pay to JPMorgan Chase Bank, N.A., whose address is 888 SW 5th Ave., Portland, OR 97204 (the “Bank”) or order, in lawful money of the United States of America, the sum of Twenty
Million and 00/100 Dollars ($20,000,000.00) or so much thereof as may be advanced and outstanding, plus interest on the unpaid principal balance as provided below. 

Interest Rate Definitions. As used in this Note, the following terms have the following respective meanings: 

“Adjusted LIBOR Rate” means, with respect to a LIBOR Rate Advance for the relevant Interest Period, the sum of (i) the Applicable Margin
plus (ii) the quotient of (a) the LIBOR Rate applicable to such Interest Period, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period. 

“Adjusted One Month LIBOR Rate” means, with respect to a CB Floating Rate Advance for any day, the sum of (i) 2.50% per annum
plus (ii) the quotient of (a) the interest rate determined by the Bank by reference to the Page to be the rate at approximately 11:00 a.m. London time, on such date or, if such date is not a Business Day, on the immediately
preceding Business Day for dollar deposits with a maturity equal to one (1) month, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to dollar deposits in the London interbank market with a
maturity equal to one (1) month. 
 “Advance” means a LIBOR Rate Advance or a CB Floating Rate Advance and “Advances”
means all LIBOR Rate Advances and all CB Floating Rate Advances under this Note. 
 “Applicable Margin” has the meaning specified in the
Fee Letter. 
 “Business Day” means (i) with respect to the Adjusted One Month LIBOR Rate and any borrowing, payment or rate selection
of LIBOR Rate Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Oregon and/or New York for the conduct of substantially all of their commercial lending activities and on which dealings in United States dollars
are carried on in the London interbank market and (ii) for all other purposes, a day other than a Saturday, Sunday or any other day on which national banking associations are authorized to be closed. 

“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall, on any day, not be less than the Adjusted One Month
LIBOR Rate. The CB Floating Rate is a variable rate and any change in the CB Floating Rate due to any change in the Prime Rate or the Adjusted One Month LIBOR Rate is effective from and including the effective date of such change in the Prime Rate
or the Adjusted One Month LIBOR Rate, respectively. 
 “CB Floating Rate Advance” means any borrowing under this Note when and to the
extent that its interest rate is determined by reference to the CB Floating Rate. 
 “Fee Letter” means that certain letter
agreement dated the date hereof by and between the Borrower and the Bank, as the same may be amended or otherwise modified from time to time. 

“Interest Period” means, with respect to a LIBOR Rate Advance, a period of one (1), two (2), three (3) or six (6) month(s)
commencing on a Business Day selected by the Borrower pursuant to this Note. Such Interest Period shall end on the day which corresponds numerically to such date one (1), two (2), three (3) or six (6) month(s) thereafter, as applicable,
provided, however, that if there is no such numerically corresponding day in such first, second, third or sixth succeeding month(s), as applicable, such Interest Period shall end on the last Business Day of such first, second, third or
sixth succeeding month(s), as applicable. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business
Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day. 
 “LIBOR Rate” means with
respect to any LIBOR Rate Advance for any Interest Period, the interest rate determined by the Bank by reference to Reuters Screen LIBOR01, formerly known as Page 3750 of the Moneyline Telerate Service (together with any successor or substitute, the
“Service”) or any successor or substitute page of the Service, providing rate quotations comparable to those currently 

  
 1 

 
provided on such page of the Service, as determined by the Bank from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank
market (the “Page”) to be the rate at approximately 11:00 a.m. London time, two Business Days prior to the commencement of the Interest Period for dollar deposits with a maturity equal to such Interest Period. If no LIBOR Rate is
available to the Bank, the applicable LIBOR Rate for the relevant Interest Period shall instead be the rate determined by the Bank to be the rate at which the Bank offers to place U.S. dollar deposits having a maturity equal to such Interest Period
with first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period. 

“LIBOR Rate Advance” means any borrowing under this Note when and to the extent that its interest rate is determined by reference to the
Adjusted LIBOR Rate. 
 “Prime Rate” means the rate of interest per annum announced from time to time by the Bank as its prime rate. The
Prime Rate is a variable rate and each change in the Prime Rate is effective from and including the date the change is announced as being effective. THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE THE BANK’S LOWEST RATE. 

“Principal Payment Date” is defined in the paragraph entitled “Principal Payments” below. 

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System. 

“Reserve Requirement” means the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which
is imposed under Regulation D. 
 Interest Rates. The Advance(s) evidenced by this Note may be drawn down and remain outstanding as up to five
(5) LIBOR Rate Advances and/or a CB Floating Rate Advance. The Borrower shall pay interest to the Bank on the outstanding and unpaid principal amount of each CB Floating Rate Advance at the CB Floating Rate plus the Applicable Margin and
each LIBOR Rate Advance at the Adjusted LIBOR Rate. Interest shall be calculated on the basis of the actual number of days elapsed in a year of 360 days. In no event shall the interest rate applicable to any Advance exceed the maximum rate allowed
by law. Any interest payment which would for any reason be deemed unlawful under applicable law shall be applied to principal. 
 Bank Records. The
Bank shall, in the ordinary course of business, make notations in its records of the date, amount, interest rate and Interest Period of each Advance hereunder, the amount of each payment on the Advances, and other information. Such records shall, in
the absence of manifest error, be conclusive as to the outstanding principal balance of and interest rate or rates applicable to this Note. 
 Notice and
Manner of Electing Interest Rates on Advances. The Borrower shall give the Bank written notice (effective upon receipt) of the Borrower’s intent to draw down an Advance under this Note no later than 2:00 p.m. Mountain time, on the date of
disbursement, if the full amount of the drawn Advance is to be disbursed as a CB Floating Rate Advance and no later than 11:00 a.m. Mountain time three (3) Business Days before disbursement, if any part of such Advance is to be disbursed as a
LIBOR Rate Advance. The Borrower’s notice must specify: (a) the disbursement date, (b) the amount of each Advance, (c) the type of each Advance (CB Floating Rate Advance or LIBOR Rate Advance), and (d) for each LIBOR Rate
Advance, the duration of the applicable Interest Period; provided, however, that the Borrower may not elect an Interest Period ending after the maturity date of this Note. Each LIBOR Rate Advance shall be in a minimum amount of One
Hundred Thousand and 00/100 Dollars ($100,000.00). All notices under this paragraph are irrevocable. By the Bank’s close of business on the disbursement date and upon fulfillment of the conditions set forth herein and in any other of the
Related Documents, the Bank shall disburse the requested Advances in immediately available funds by crediting the amount of such Advances to the Borrower’s account with the Bank. 

Conversion and Renewals. The Borrower may elect from time to time to convert one type of Advance into another or to renew any Advance by giving the
Bank written notice no later than 2:00 p.m. Mountain time, on the date of the conversion into or renewal of a CB Floating Rate Advance and 11:00 a.m. Mountain time three (3) Business Days before conversion into or renewal of a LIBOR Rate
Advance, specifying: (a) the renewal or conversion date, (b) the amount of the Advance to be converted or renewed, (c) in the case of conversion, the type of Advance to be converted into (CB Floating Rate Advance or LIBOR Rate
Advance), and (d) in the case of renewals of or conversion into a LIBOR Rate Advance, the applicable Interest Period, provided that (i) the minimum principal amount of each LIBOR Rate Advance outstanding after a renewal or
conversion shall be One Hundred Thousand and 00/100 Dollars ($100,000.00); (ii) a LIBOR Rate Advance can only be converted on the last day of the Interest Period for the Advance; and (iii) the Borrower may not elect an Interest Period
ending after the maturity date of this Note. All notices given under this paragraph are irrevocable. If the Borrower fails to give the Bank the notice specified above for the renewal or conversion of a LIBOR Rate Advance by 11:00 a.m. Mountain time
three (3) Business Days before the end of the Interest Period for that Advance, the Advance shall automatically be converted to a CB Floating Rate Advance on the last day of the Interest Period for the Advance. 

  
 2 

 Interest Payments. Interest on the Advances shall be paid on the last day of each month, beginning with
the first month following disbursement of the Advance, whether the Advance is a CB Floating Rate Advance or LIBOR Rate Advance. 
 Principal
Payments. All outstanding principal and interest is due and payable in full on December 5, 2017, which is defined herein as the “Principal Payment Date”. 

Default Rate of Interest. After a default has occurred under this Note, whether or not the Bank elects to accelerate the maturity of this Note because
of such default, all Advances outstanding under this Note, shall bear interest at a per annum rate equal to the interest rate being charged on each such Advance plus three percent (3.00%) from the date the Bank elects to impose such rate.
Imposition of this rate shall not affect any limitations contained in this Note on the Borrower’s right to repay principal on any LIBOR Rate Advance before the expiration of the Interest Period for each such Advance. 

Additional Costs. If any applicable domestic or foreign law, treaty, government rule or regulation now or later in effect (whether or not it now
applies to the Bank) or the interpretation or administration thereof by a governmental authority charged with such interpretation or administration, or compliance by the Bank with any guideline, request or directive of such an authority (whether or
not having the force of law), shall (a) affect the basis of taxation of payments to the Bank of any amounts payable by the Borrower under this Note or the other Related Documents (other than taxes imposed on the overall net income of the Bank
by the jurisdiction or by any political subdivision or taxing authority of the jurisdiction in which the Bank has its principal office), or (b) impose, modify or deem applicable any reserve, special deposit or similar requirement (including,
without limitation, Federal Deposit Insurance Corporation deposit insurance premiums or assessments) against assets of, deposits with or for the account of, or credit extended by the Bank, or (c) impose any other condition with respect to this
Note or the other Related Documents and the result of any of the foregoing is to increase the cost to the Bank of extending, maintaining or funding any LIBOR Rate Advance or to reduce the amount of any sum receivable by the Bank on any Advance, or
(d) affect the amount of capital or liquidity required or expected to be maintained by the Bank (or any corporation controlling the Bank) and the Bank determines that the amount of such capital or liquidity is increased by or based upon the
existence of the Bank’s obligations under this Note or the other Related Documents and the increase has the effect of reducing the rate of return on the Bank’s (or its controlling corporation’s) capital as a consequence of the
obligations under this Note or the other Related Documents to a level below that which the Bank (or its controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy)
by an amount deemed by the Bank to be material, then the Borrower shall pay to the Bank, from time to time, upon request by the Bank, additional amounts sufficient to compensate the Bank for the increased cost or reduced sum receivable. Whenever the
Bank shall learn of circumstances described in this section which are likely to result in additional costs to the Borrower, the Bank shall give prompt written notice to the Borrower of the basis for and the estimated amount of any such anticipated
additional costs. A statement as to the amount of the increased cost or reduced sum receivable, prepared in good faith and in reasonable detail by the Bank and submitted by the Bank to the Borrower, shall be conclusive and binding for all purposes
absent manifest error in computation. 
 Illegality. If any applicable domestic or foreign law, treaty, rule or regulation now or later in effect
(whether or not it now applies to the Bank) or the interpretation or administration thereof by a governmental authority charged with such interpretation or administration, or compliance by the Bank with any guideline, request or directive of such an
authority (whether or not having the force of law), shall make it unlawful or impossible for the Bank to maintain or fund the LIBOR Rate Advances, then, upon notice to the Borrower by the Bank, the outstanding principal amount of the LIBOR Rate
Advances, together with accrued interest and any other amounts payable to the Bank under this Note or the other Related Documents on account of the LIBOR Rate Advances shall be repaid (a) immediately upon the Bank’s demand if such change
or compliance with such requests, in the Bank’s judgment, requires immediate repayment, or (b) at the expiration of the last Interest Period to expire before the effective date of any such change or request provided, however,
that subject to the terms and conditions of this Note and the other Related Documents the Borrower shall be entitled to simultaneously replace the entire outstanding balance of any LIBOR Rate Advance repaid in accordance with this section with a CB
Floating Rate Advance in the same amount. 
 Inability to Determine Interest Rate. If the Bank determines that (a) quotations of interest rates
for the relevant deposits referred to in the definition of Adjusted LIBOR Rate are not being provided for purposes of determining the interest rate on a LIBOR Rate Advance as provided in this Note, or (b) the relevant interest rates referred to
in the definition of Adjusted LIBOR Rate do not accurately cover the cost to the Bank of making, funding or maintaining LIBOR Rate Advances, then the Bank shall at the Bank’s option, give notice of such circumstances to the Borrower, whereupon
(i) the obligation of the Bank to make LIBOR Rate Advances shall be suspended until the Bank notifies the Borrower that the circumstances giving rise to the suspension no longer exists, and (ii) the Borrower shall repay in full the then
outstanding principal amount of each LIBOR Rate Advance, together with accrued interest, on the last day of the then current Interest Period applicable to the LIBOR Rate Advance, provided, however, that, subject to the terms and
conditions of this Note and the other Related Documents, the Borrower shall be entitled to simultaneously replace the entire outstanding balance of any LIBOR Rate Advance repaid in accordance with this section with an Advance bearing interest at the
CB Floating Rate plus the Applicable Margin for CB Floating Rate Advances in the same amount. If the Bank determines on any day that quotations of interest rates for the relevant deposits referred to in the definition of Adjusted One Month LIBOR
Rate are not being provided for purposes of determining the interest rate on any CB Floating Rate Advance on any day, then each CB Floating Rate Advance shall bear interest at the Prime Rate plus the Applicable Margin for CB Floating Rate Advances
until the Bank determines that quotations of interest rates for the relevant deposits referred to in the definition of Adjusted One Month LIBOR Rate are being provided. 

  
 3 

 Obligations Due on Non-Business Day. Whenever any payment under this Note becomes due and payable on a day
that is not a Business Day, if no default then exists under this Note, the maturity of the payment shall be extended to the next succeeding Business Day, except, in the case of a LIBOR Rate Advance, if the result of the extension would be to extend
the payment into another calendar month, the payment must be made on the immediately preceding Business Day. 
 Matters Regarding Payment. The
Borrower will pay the Bank at the Bank’s address shown above or at such other place as the Bank may designate. Payments shall be allocated among principal, interest and fees at the discretion of the Bank unless otherwise agreed or required by
applicable law. Acceptance by the Bank of any payment which is less than the payment due at the time shall not constitute a waiver of the Bank’s right to receive payment in full at that time or any other time. 

Authorization for Direct Payments (ACH Debits). To effectuate any payment due under this Note or under any other Credit Documents, the Borrower hereby
authorizes the Bank to initiate debit entries to an ordinary checking account maintained by the Borrower with the Bank designated by the Borrower in a written notice to the Bank from time to time (the “Borrower Account”) and to
debit the same to the Borrower Account. This authorization to initiate debit entries shall remain in full force and effect until the Bank has received written notification of its termination in such time and in such manner as to afford the Bank a
reasonable opportunity to act on it. The Borrower represents that the Borrower is and will be the owner of all funds in the Borrower Account. The Borrower acknowledges: (1) that such debit entries may cause an overdraft of the Borrower Account
which may result in the Bank’s refusal to honor items drawn on such account until adequate deposits are made to the Borrower Account; (2) that the Bank is under no duty or obligation to initiate any debit entry for any purpose; and
(3) that if a debit is not made because the Borrower Account does not have a sufficient available balance, or otherwise, the payment may be late or past due. 

Late Fee. Any principal or interest which is not paid within 10 days after its due date (whether as stated, by acceleration or otherwise) shall be
subject to a late payment charge of five percent (5.00%) of the total payment due, in addition to the payment of interest, up to the maximum amount of One Thousand Five Hundred and 00/100 Dollars ($1,500.00) per late charge. The Borrower agrees
to pay and stipulates that five percent (5.00%) of the total payment due is a reasonable amount for a late payment charge. The Borrower shall pay the late payment charge upon demand by the Bank or, if billed, within the time specified. 

Purpose of Loan. The Borrower acknowledges and agrees that this Note evidences a loan for a business, commercial, agricultural or similar commercial
enterprise purpose, and that no advance shall be used for any personal, family or household purpose. The proceeds of the loan shall be used only for the Borrower’s working capital purposes. 

Credit Facility. The Bank has approved a credit facility to the Borrower in a principal amount not to exceed the face amount of this Note. The credit
facility is in the form of advances made from time to time by the Bank to the Borrower. This Note evidences the Borrower’s obligation to repay those advances. The aggregate principal amount of debt evidenced by this Note is the amount reflected
from time to time in the records of the Bank. Until the earliest to occur of maturity, any default, event of default, or any event that would constitute a default or event of default but for the giving of notice, the lapse of time or both, the
Borrower may borrow, pay down and reborrow under this Note subject to the terms of the Related Documents. 
 General Definitions. As used in this
Note, the following terms have the following respective meanings: 
  

	1.	“Affiliate” means any Person which, directly or indirectly, Controls or is Controlled by or under common Control with, another Person, and any director or officer thereof. The Bank is under no
circumstances to be deemed an Affiliate of the Borrower or any of its Subsidiaries. 

  

	2.	“Collateral” means all Property, now or in the future subject to any Lien in favor of the Bank, securing or intending to secure, any of the Liabilities. 

 

	3.	“Control” as used with respect to any Person, means the power to direct or cause the direction of, the management and policies of that Person, directly or indirectly, whether through the ownership of
Equity Interests, by contract, or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. 

  

	4.	“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a
Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest. 

  

	5.	“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America, consistently applied. 

  
 4 

	6.	“Liabilities” means all debts, obligations, and liabilities of every kind and character of the Borrower, whether individual, joint and several, contingent or otherwise, now or hereafter existing in
favor of the Bank, including without limitation, all liabilities, interest, costs and fees, arising under or from any note, open account, overdraft, credit card, lease, Rate Management Transaction, letter of credit application, endorsement, surety
agreement, guaranty, acceptance, foreign exchange contract or depository service contract, whether payable to the Bank or to a third party and subsequently acquired by the Bank, any monetary obligations (including interest) incurred or accrued
during the pendency of any bankruptcy, insolvency, receivership or other similar proceedings, regardless of whether allowed or allowable in such proceeding, and all renewals, extensions, modifications, consolidations, rearrangements, restatements,
replacements or substitutions of any of the foregoing. 

  

	7.	“Lien” means any mortgage, deed of trust, pledge, charge, encumbrance, security interest, collateral assignment or other lien or restriction of any kind. 

 

	8.	“Obligor” means any Borrower, guarantor, surety, co-signer, endorser, general partner or other Person who may now or in the future be obligated to pay any of the Liabilities. 

 

	9.	“Person” means any individual, corporation, partnership, limited liability company, joint venture, joint stock association, association, bank, business trust, trust, unincorporated organization, any
foreign governmental authority, the United States of America, any state of the United States and any political subdivision of any of the foregoing or any other form of entity. 

 

	10.	“Pledgor” means any Person providing Collateral. 

  

	11.	“Property” means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible. 

 

	12.	“Rate Management Transaction” means any transaction (including an agreement with respect thereto) that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option, derivative transaction or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures. 

  

	13.	“Related Documents” means this Note, all loan agreements, credit agreements, reimbursement agreements, security agreements, mortgages, deeds of trust, pledge agreements, assignments, guaranties, and any
other instrument or document executed in connection with this Note or in connection with any of the Liabilities. 

  

	14.	“Subsidiary” means, as to any particular Person (the “parent”), a Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of the date of determination, as well as any other Person of which fifty percent (50%) or more of the Equity Interests is at the time of determination directly or
indirectly owned, Controlled or held, by the parent or by any Person or Persons Controlled by the parent, either alone or together with the parent. 

Bank’s Right of Setoff. The Borrower grants to the Bank a security interest in the Deposits, and the Bank is authorized to setoff and apply, all
Deposits, Securities and Other Property, and Bank Debt against any and all Liabilities. This right of setoff may be exercised at any time and from time to time after the occurrence of any default, without prior notice to or demand on the Borrower
and regardless of whether any Liabilities are contingent, unmatured or unliquidated. In this paragraph: (a) the term “Deposits” means any and all accounts and deposits of the Borrower (whether general, special, time, demand,
provisional or final) at any time held by the Bank (including all Deposits held jointly with another, but excluding any IRA or Keogh Deposits, or any trust Deposits in which a security interest would be prohibited by law); (b) the term
“Securities and Other Property” means any and all securities and other personal property of the Borrower in the custody, possession or control of the Bank, JPMorgan Chase & Co. or their respective Subsidiaries and Affiliates
(other than Property held by the Bank in a fiduciary capacity); and (c) the term “Bank Debt” means all indebtedness at any time owing by the Bank, to or for the credit or account of the Borrower and any claim of the Borrower (whether
individual, joint and several or otherwise) against the Bank now or hereafter existing. 
 Representations by Borrower. The Borrower represents and
warrants that each of the following is and will remain true and correct until the later of maturity or the date on which all Liabilities evidenced by this Note are paid in full: (a) the execution and delivery of this Note and the performance of
the obligations it imposes do not violate any law, conflict with any agreement by which it is bound, or require the consent or approval of any other Person; (b) this Note is a valid and binding agreement of the Borrower, enforceable according
to its terms, except as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditor’s rights generally and by general principles of equity; (c) all balance sheets, profit and loss statements, other
financial statements and applications for credit furnished to the Bank in connection with the Liabilities are accurate and fairly reflect the financial condition of the Persons to which they apply on their effective dates, including contingent
liabilities of every type, which financial condition has not materially and adversely changed since those dates; and, if the Borrower is not a natural Person: (i) it is duly organized, validly 

  
 5 

 
existing and in good standing under the laws of the state where it is organized and in good standing in each state where it is doing business; and (ii) the execution and delivery of this
Note and the performance of the obligations it imposes (A) are within its powers and have been duly authorized by all necessary action of its governing body, and (B) do not contravene the terms of its articles of incorporation or
organization, its by-laws, regulations or any partnership, operating or other agreement governing its organization and affairs. 
 Events of
Default/Acceleration. If any of the following events occurs, this Note shall become due immediately, without notice, at the Bank’s option: 
  

	1.	Any Obligor fails to pay when due any of the Liabilities, or any amount payable with respect to any of the Liabilities, or under this Note or any other Related Document, and such failure is not cured within 10 days.

  

	2.	Any Obligor or any Pledgor: (a) makes any materially incorrect or misleading representation, warranty, or certificate to the Bank or; (b) makes any materially incorrect or misleading representation in any
financial statement or other information delivered to the Bank. 

  

	3.	The Borrower fails to observe or perform or otherwise violates any obligation, agreement or other provision contained in the following sections of the Credit Agreement: 4.1, 4.2, 4.6, 4.13 or 5.2, and such failure is
not cured within 30 days. 

  

	4.	Any Obligor fails to observe or perform or otherwise violates any other term, covenant, condition or agreement of any of the Related Documents (other than those referred to in subsections (1) through
(3) above) and such failure continues for 30 days. 

  

	5.	Any Obligor fails to observe or perform or otherwise violates any obligation, agreement or other provision contained in any agreement or instrument relating to any debt for borrowed money (other than the debt evidenced
by the Related Documents) having an aggregate principal amount of more than $500,000 and the effect of such default will allow the creditor to declare such debt due before its stated maturity. 

 

	6.	In the event (a) any Obligor terminates or revokes or purports to terminate or revoke its guaranty or any Obligor’s guaranty becomes unenforceable in whole or in part, (b) any Obligor fails to perform
promptly under its guaranty, or (c) any Obligor fails to comply with, or perform under any agreement, now or hereafter in effect, between the Obligor and the Bank, or any Affiliate of the Bank or their respective successors and assigns and such
failure is not cured within any applicable cure period. 

  

	7.	There is any loss, theft, damage, or destruction of any Collateral not covered by insurance, unless such uninsured loss, theft, damage, or destruction could not have a material adverse effect on the Borrower’s or
any of its Subsidiaries’ financial condition, properties, business, affairs, or operations. 

  

	8.	Any event occurs that would permit the Pension Benefit Guaranty Corporation to terminate any employee benefit plan of any Obligor or any Subsidiary of any Obligor. 

 

	9.	Any Obligor or any of its Subsidiaries or any Pledgor: (a) becomes insolvent or unable to pay its debts as they become due; (b) makes an assignment for the benefit of creditors; (c) consents to the
appointment of a custodian, receiver, or trustee for itself or for a substantial part of its Property; (d) commences any proceeding under any bankruptcy, reorganization, liquidation, insolvency or similar laws; (e) conceals or removes any
of its Property, with intent to hinder, delay or defraud any of its creditors; (f) makes or permits a transfer of any of its Property, which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or (g) makes a
transfer of any of its Property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid. 

  

	10.	A custodian, receiver, or trustee is appointed for any Obligor or any of its Subsidiaries or any Pledgor or for a substantial part of their respective Property and such appointment remains undismissed for thirty
(30) days after appointment. 

  

	11.	Any Obligor or any of its Subsidiaries, without the Bank’s written consent: (a) liquidates or is dissolved; (b) merges or consolidates with any other Person; (c) leases, sells or otherwise conveys a
material part of its assets or business outside the ordinary course of its business; (d) leases, purchases, or otherwise acquires a material part of the assets of any other Person, except in the ordinary course of its business; or
(e) agrees to do any of the foregoing; provided, however, that any Subsidiary of an Obligor may merge or consolidate with any other Subsidiary of that Obligor, or with the Obligor, so long as the Obligor is the survivor.

  

	12.	Proceedings are commenced under any bankruptcy, reorganization, liquidation, or similar laws against any Obligor or any of its Subsidiaries or any Pledgor and remain undismissed for thirty (30) days after
commencement; or any Obligor or any of its Subsidiaries or any Pledgor consents to the commencement of those proceedings. 

  

	13.	Any judgment is entered against any Obligor or any of its Subsidiaries, or any attachment, seizure, sequestration, levy, or garnishment is issued against any Property of any Obligor or any of its Subsidiaries or of any
Pledgor or any Collateral and with respect to each of the foregoing, the uninsured amount in dispute exceeds $1,000,000.00 and the filing, service or proceeding in question is not stayed, dismissed, vacated or released (as applicable) or security is
not posted in a manner and amount satisfactory to the applicable court for a period of thirty (30) consecutive days. 

  

	14.	Any individual Obligor or Pledgor dies, or a guardian or conservator is appointed for any individual Obligor or Pledgor or all or any portion of their respective Property, or the Collateral. 

 

	15.	Any material adverse change occurs in: (a) the financial condition, business, assets or operations of any Obligor; (b) any Obligor’s ability to perform its obligations under the Related Documents; or
(c) the Collateral. 

 Remedies. If this Note is not paid at maturity, whether by acceleration or otherwise, the Bank shall have
all of the rights and remedies provided by any law or agreement, in equity or otherwise. The Bank is authorized to cause all or any part of the Collateral to be 

  
 6 

 
transferred to or registered in its name or in the name of any other Person, with or without designating the capacity of that nominee. Without limiting any other available remedy, the Borrower is
liable for any deficiency remaining after disposition of any Collateral. The Borrower is liable to the Bank for all reasonable costs and expenses of every kind incurred (or charged by internal allocation) in connection with the negotiation,
preparation, execution, filing, recording, modification, supplementing and waiver of this Note or the other Related Documents and the making, servicing and collection of this Note or the other Related Documents and any other amounts owed under this
Note or the other Related Documents, including without limitation reasonable attorneys’ fees and court costs. These costs and expenses include without limitation any costs or expenses incurred by the Bank in any bankruptcy, reorganization,
insolvency or other similar proceeding. 
 Waivers. Each Obligor waives: (a) to the extent not prohibited by law, all rights and benefits under
any laws or statutes regarding sureties, as may be amended; (b) any right to receive notice of the following matters before the Bank enforces any of its rights: (i) the Bank’s acceptance of this Note, (ii) any credit that the
Bank extends to the Borrower, (iii) the Borrower’s default, (iv) any demand, diligence, presentment, dishonor and protest, or (v) any action that the Bank takes regarding the Borrower, anyone else, any Collateral, or any of the
Liabilities, that it might be entitled to by law, under any other agreement, in equity or otherwise; (c) any right to require the Bank to proceed against the Borrower, any other Obligor, or any Collateral, or pursue any remedy in the
Bank’s power to pursue; (d) any defense based on any claim that any endorser’s or other Obligor’s obligations exceed or are more burdensome than those of the Borrower; (e) the benefit of any statute of limitations affecting
liability of any endorser or other Obligor or the enforcement hereof; (f) any defense arising by reason of any disability or other defense of the Borrower or by reason of the cessation from any cause whatsoever (other than payment in full) of
the obligation of the Borrower for the Liabilities; and (g) any defense based on or arising out of any defense that the Borrower may have to the payment or performance of the Liabilities or any portion thereof. Each Obligor consents to any
extension or postponement of time of its payment without limit as to the number or period, to any substitution, exchange or release of all or any part of the Collateral, to the addition of any other Person, and to the release or discharge of, or
suspension of any rights and remedies against, any Obligor. The Bank may waive or delay enforcing any of its rights without losing them. Any waiver affects only the specific terms and time period stated in the waiver. No modification or waiver of
any provision of this Note is effective unless it is in writing and signed by the Person against whom it is being enforced. 
 Cooperation. The
Borrower agrees to fully cooperate with the Bank and not to delay, impede or otherwise interfere with the efforts of the Bank to secure payment from the Collateral including actions, proceedings, motions, orders, agreements or other matters relating
to relief from automatic stay, abandonment of Property, use of cash Collateral and sale of the Collateral free and clear of all Liens. 
 Rights of
Subrogation. Each Obligor waives and agrees not to enforce any rights of subrogation, contribution or indemnification that it may have against the Borrower, any other Obligor, or the Collateral, until the Borrower and such Obligor have fully
performed all their obligations to the Bank, even if those obligations are not covered by this Note. 
 Reinstatement. The Borrower agrees that to
the extent any payment or transfer is received by the Bank in connection with the Liabilities evidenced by this Note, and all or any part of the payment or transfer is subsequently invalidated, declared to be fraudulent or preferential, set aside or
required to be transferred or repaid by the Bank or transferred or paid over to a trustee, receiver or any other Person, whether under any bankruptcy act or otherwise (any of those payments or transfers is hereinafter referred to as a
“Preferential Payment”), then this Note shall continue to be effective or shall be reinstated, as the case may be, even if all those Liabilities have been paid in full and whether or not the Bank is in possession of this Note, or
whether the Note has been marked paid, released or canceled, or returned to the Borrower and, to the extent of the payment, repayment or other transfer by the Bank, the Liabilities or part intended to be satisfied by the Preferential Payment shall
be revived and continued in full force and effect as if the Preferential Payment had not been made. 
 Governing Law and Venue. This Note shall be
governed by and construed in accordance with the laws of the State of Washington (without giving effect to its laws of conflicts). The Borrower agrees that any legal action or proceeding with respect to any of its obligations under this Note may be
brought by the Bank in any state or federal court located in the State of Washington, as the Bank in its sole discretion may elect. By the execution and delivery of this Note, the Borrower submits to and accepts, for itself and in respect of its
property, generally and unconditionally, the non-exclusive jurisdiction of those courts. The Borrower waives any claim that the State of Washington is not a convenient forum or the proper venue for any such suit, action or proceeding. 

Miscellaneous. If more than one Borrower executes this Note: (i) each Borrower is liable jointly and severally for the Liabilities evidenced by
this Note; (ii) the term “Borrower” means any one or more of them; and (iii) the receipt of value by any one of them constitutes the receipt of value by the others. This Note binds the Borrower and its successors, and benefits
the Bank, its successors and assigns. Any reference to the Bank includes any holder of this Note. This Note is subject to that certain Credit Agreement by and between the Borrower and the Bank, dated December 5, 2014, and all amendments,
restatements and replacements thereof (the “Credit Agreement”) to which reference is hereby made for a more complete statement of the terms and conditions under which the loan evidenced hereby is made and is to be repaid. The terms
and provisions of the Credit Agreement are hereby incorporated and made a part hereof by this reference thereto with the same force and effect as if set forth at length herein. No reference to the Credit Agreement and no provisions of this Note or
the Credit Agreement shall alter or impair the absolute and unconditional obligation of the Borrower to pay the principal and interest on this Note as herein prescribed. Capitalized terms not otherwise defined herein shall

  
 7 

 
have the meanings assigned to such terms in the Credit Agreement. Section headings are for convenience of reference only and do not affect the interpretation of this Note. Any notices and demands
under or related to this Note shall be in writing and delivered to the intended party at its address stated herein, and if to the Bank, at its main office if no other address of the Bank is specified herein, by one of the following means:
(a) by hand; (b) by a nationally recognized overnight courier service; or (c) by certified mail, postage prepaid, with return receipt requested. Notice shall be deemed given: (a) upon receipt if delivered by hand; (b) on the
Delivery Day after the day of deposit with a nationally recognized courier service; or (c) on the third Delivery Day after the notice is deposited in the mail. “Delivery Day” means a day other than a Saturday, a Sunday, or any other
day on which national banking associations are authorized to be closed. Any party may change its address for purposes of the receipt of notices and demands by giving notice of such change in the manner provided in this provision. This Note and the
other Related Documents embody the entire agreement between the Borrower and the Bank regarding the terms of the loan evidenced by this Note and supercede all oral statements and prior writings relating to that loan. No delay on the part of the Bank
in the exercise of any right or remedy waives that right or remedy. No single or partial exercise by the Bank of any right or remedy precludes any other future exercise of it or the exercise of any other right or remedy. No waiver or indulgence by
the Bank of any default is effective unless it is in writing and signed by the Bank, nor shall a waiver on one occasion bar or waive that right on any future occasion. The rights of the Bank under this Note and the other Related Documents are in
addition to other rights (including without limitation, other rights of setoff) the Bank may have contractually, by law, in equity or otherwise, all of which are cumulative and hereby retained by the Bank. If any provision of this Note cannot be
enforced, the remaining portions of this Note shall continue in effect. The Borrower agrees that the Bank may provide any information or knowledge the Bank may have about the Borrower or about any matter relating to this Note or the Related
Documents to JPMorgan Chase & Co., or any of its Subsidiaries or Affiliates or their successors, or to any one or more purchasers or potential purchasers of this Note or the Related Documents. The Borrower agrees that the Bank may at any
time sell, assign or transfer one or more interests or participations in all or any part of its rights and obligations in this Note to one or more purchasers whether or not related to the Bank. Time is of the essence under this Note and in the
performance of every term, covenant and obligation contained herein. 
 Government Regulation. The Borrower shall not (a) be or become subject
at any time to any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits the Bank from making any advance or extension of credit to the Borrower or
from otherwise conducting business with the Borrower, or (b) fail to provide documentary and other evidence of the Borrower’s identity as may be requested by the Bank at any time to enable the Bank to verify the Borrower’s identity or
to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. 

USA PATRIOT ACT NOTIFICATION. The following notification is provided to the Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318: 
 IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person that opens an account, including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for the Borrower: When the Borrower opens an account, if the Borrower is an individual, the Bank will ask for the Borrower’s name, taxpayer identification number,
residential address, date of birth, and other information that will allow the Bank to identify the Borrower, and if the Borrower is not an individual, the Bank will ask for the Borrower’s name, taxpayer identification number, business address,
and other information that will allow the Bank to identify the Borrower. The Bank may also ask, if the Borrower is an individual, to see the Borrower’s driver’s license or other identifying documents, and if the Borrower is not an
individual, to see the Borrower’s legal organizational documents or other identifying documents. 
 WAIVER OF SPECIAL DAMAGES. THE BORROWER
WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT THE UNDERSIGNED MAY HAVE TO CLAIM OR RECOVER FROM THE BANK IN ANY LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. 

JURY WAIVER. THE BORROWER AND THE BANK (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN THE BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE OTHER RELATED DOCUMENTS. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING EVIDENCED BY THIS NOTE. 
 Prepayment/Funding Loss Indemnification. The Borrower may prepay
all or any part of any CB Floating Rate Advance at any time without premium or penalty. 

  
 8 

 The Borrower shall pay the Bank amounts sufficient (in the Bank’s reasonable opinion) to compensate the Bank
for any loss, cost, or expense incurred as a result of: 
 A. Any payment of a LIBOR Rate Advance on a date other than the last day of the Interest Period
for the Advance, including, without limitation, acceleration of the Advances by the Bank pursuant to this Note or the other Related Documents; or 
 B. Any
failure by the Borrower to borrow or renew a LIBOR Rate Advance on the date specified in the relevant notice from the Borrower to the Bank. 
  

					
	 	 	Borrower:
		
	Address: 17750 SE 6th Way	 	Nautilus, Inc.
	 Vancouver, WA 98683
	 		 	
			
		 	By:	 	 /s/ Sid Nayar

		 		 	Sid Nayar, Chief Financial Officer
		
		 	Date Signed: December 5, 2014

 Outside Counsel Prepared 

  
 9

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