Document:

EXHIBIT 10.1
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                           REVOLVING CREDIT AGREEMENT

This Revolving Credit Agreement (the "AGREEMENT") is made and entered into by
and between the undersigned borrower (the "BORROWER") and the undersigned bank
(the "BANK") as of the date set forth on the last page of this Agreement.

1.1 REVOLVING CREDIT LOANS. From time to time prior to June 30, 2003 (the
"MATURITY DATE") or the earlier termination hereof, the Borrower may borrow from
the Bank for working capital purposes up to the aggregate principal amount
outstanding at any one time of the lesser of (i) $ 10,000,000.00 (the "LOAN
AMOUNT"), less letters of credit issued by the Bank, or (ii) if applicable, the
BORROWING BASE (defined below). All revolving loans hereunder will be evidenced
by a single promissory note of the Borrower payable to the order of the Bank in
the principal amount of the Loan Amount (the "NOTE"). Although the Note will be
expressed to be payable in the full Loan Amount, the Borrower will be obligated
to pay only the amounts actually disbursed hereunder, together with accrued
interest on the outstanding balance at the rates and on the dates specified
therein and such other charges provided for herein. In the event that the
principal amount outstanding under the Note exceeds the Borrowing Base at any
time, the Borrower will immediately, without request, prepay an amount
sufficient to eliminate such excess.

1.2 BORROWING BASE. The Borrowing Base will be an amount equal to the sum of (i)
n/a % of the face amount of Eligible Accounts, and (ii) the lesser of $ n/a or
n/a % of the Borrower's cost of Eligible Inventory, as such cost may be
diminished as a result of any event causing loss or depreciation in value of
Eligible Inventory less (iii) the current outstanding loan balance on note(s) in
the original amount(s) of $ n/a, and less (iv) undrawn amounts of outstanding
letters of credit issued by Bank or any affiliate thereof. The Borrower will
provide the Bank with information regarding the Borrowing Base in such form and
at such times as the Bank may request. The terms used in this Section 1.2 will
have the meanings set forth in a supplement entitled "Financial Definitions," a
copy of which the Borrower acknowledges having received with this Agreement and
which is incorporated herein by reference.

1.3 ADVANCES AND PAYING PROCEDURE. The Bank is authorized and directed to credit
any of the Borrower's accounts with the Bank (or to the account the Borrower
designates in writing) for all loans made hereunder, and the Bank is authorized
to debit such account or any other account of the Borrower with the Bank for the
amount of any principal or interest due under the Note or other amount due
hereunder on the due date with respect thereto. Each advance shall be in the
minimum amount of $5,000.

1.4 CLOSING FEE. The Borrower will pay the Bank a one-time closing fee of $ n/a
contemporaneously with execution of this Agreement. This fee is in addition to
all other fees, expenses and other amounts due hereunder.

1.5 LOAN FACILITY FEE.  The Borrower will pay a loan facility fee equal to:

         [ ]      $ n/a per annum, payable annually in advance; (or)

         [ ]      n/a % per annum of the Loan Amount, payable annually in
                  advance; (or)

         [X]      0.250% per annum of the difference between the Loan Amount and
                  the actual daily unpaid principal amount of the Note
                  outstanding from time to time, payable quarterly, in arrears,
                  on the last business day of each third calendar month, and at
                  maturity; (or)

         [ ]      n/a % per annum of the actual daily unpaid principal amount of
                  the Note outstanding from time to time, payable quarterly, in
                  arrears, on the last business day of each third calendar
                  month, and at maturity.

The loan facility fee is payable for the entire period that this Agreement is in
effect, regardless of whether any amounts are outstanding hereunder at any given
time.

1.6 EXPENSES AND ATTORNEYS' FEES. The Borrower will reimburse the Bank and any
Participant (defined below) for all attorneys' fees and all other costs, fees
and out-of-pocket disbursements incurred by the Bank or any Participant in
connection with the preparation, execution, delivery, administration, defense
and enforcement of this Agreement or any of the other Loan Documents (defined
below) including attorneys' fees and all other costs and fees (a) incurred
before or after commencement of litigation r at trial, on appeal or in any other
proceeding, (b) incurred in any bankruptcy proceeding and (c) related to any
waivers or amendments with respect thereto (examples of costs and fees include
but are not limited to fees and costs for: filing, perfecting or confirming the
priority of the Bank's lien, title searches or insurance, appraisals,
environmental audits and other reviews related to the Borrower, any collateral
or the loans, if requested by the Bank). The Borrower will also reimburse the
Bank and any Participant for all costs of collection, including all attorneys'
fees, before and after judgment, and the costs of preservation and/or
liquidation of any collateral.

1.7 COMPENSATING BALANCES. The Borrower will maintain on deposit with the Bank
in non-interest bearing accounts average daily collected balances, in excess of
that required to support account activity and other credit facilities extended
to the Borrower by the Bank, an amount at least equal to the sum of (i) $ n/a
and (ii) n/a % of the Loan Amount as computed on a monthly basis. If the
Borrower fails to keep and maintain such balances, it will pay a deficiency fee,
payable within five days after receipt of a statement therefore calculated on
the amount by which the Borrower's average daily balances are less than the
requirements set forth above, computed at a rate equal to the rate set forth in
the Note.
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1.8 CONDITIONS TO BORROWING. The Bank will not be obligated to make (or continue
to make) advances hereunder unless (i) the Bank has received executed originals
of the Note and all other documents or agreements applicable to the loans
described herein, including but not limited to the documents specified in
Article III (collectively with this Agreement the "LOAN DOCUMENTS"), in form and
content satisfactory to the Bank; (ii) if the loan is secured, the Bank has
received confirmation satisfactory to it that the Bank has a properly perfected
security interest, mortgage or lien, with the proper priority; (iii) the Bank
has received certified copies of the Borrower's governance documents and
certification of entity status satisfactory to the Bank and all other relevant
documents; (iv) the Bank has received a certified copy of a resolution or
authorization in form and content satisfactory to the Bank authorizing the loan
and all acts contemplated by this Agreement and all related documents, and
confirmation of proper authorization of all guaranties and other acts of third
parties contemplated hereunder; (v) if required by the Bank, the Bank has been
provided with an Opinion of the Borrower's counsel in form and content
satisfactory to the Bank confirming the matters outlined in Section 2.2 and such
other matters as the Bank requests; (vi) no default exists under this Agreement
or under any other Loan Documents, or under any other agreements by and between
the Borrower and the Bank; and (vii) all proceedings taken in connection with
the transactions contemplated by this Agreement (including any required
environmental assessments), and all instruments, authorizations and other
documents applicable thereto, are satisfactory to the Bank and its counsel.

                      ARTICLE II. WARRANTIES AND COVENANTS

While any part of the credit granted to the Borrower under this Agreement or the
other Loan Documents is available or any obligations under any of the Loan
Documents are unpaid or outstanding, the Borrower continuously warrants and
agrees as follows:

2.1 ACCURACY OF INFORMATION. All information, certificates or statements given
to the Bank pursuant to this Agreement and the other Loan Documents will be true
and complete when given.

2.2 ORGANIZATION AND AUTHORITY; LITIGATION. This Agreement and the other Loan
Documents are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their terms. The execution,
delivery and performance of this Agreement and all other Loan Documents to which
the Borrower is a party (i) are within the Borrower's power; (ii) have been duly
authorized by all appropriate entity action; (iii) do not require the approval
of any governmental agency; and (iv) will not violate any law, agreement or
restriction by which the Borrower is bound. If the Borrower is not an
individual, the Borrower is validly existing and in good standing under the laws
of its state of organization, has all requisite power and authority and
possesses all licenses necessary to conduct its business and own its properties.
There is no litigation or administrative proceeding threatened or pending
against the Borrower which would, if adversely determined, have a material
adverse effect on the Borrower's financial condition or its property.

2.3 EXISTENCE; BUSINESS ACTIVITIES; ASSETS; CHANGE OF CONTROL. The Borrower will
(i) preserve its existence, rights and franchises; (ii) not make any material
change in the nature or manner of its business activities; (iii) not liquidate,
dissolve, merge or consolidate with or into another entity or change its form of
organization; (iv) not amend its organizational documents in any manner that may
conflict with any term or condition of the Loan Documents; and (v) not sell,
lease, transfer or otherwise dispose of all or substantially all of its assets.
Other than the transfer to a trust beneficially controlled by the transferor, no
event shall occur which causes or results in a transfer of majority ownership of
the Borrower while any Obligations are outstanding or while the Bank has any
obligation to provide funding to the Borrower.

2.4 USE OF PROCEEDS; MARGIN STOCK; SPECULATION. Advances by the Bank hereunder
will be used exclusively by the Borrower for working capital and other regular
and valid purposes. The Borrower will not, without the prior written consent of
the Bank, redeem, purchase, or retire any of the capital stock or declare or pay
any dividends, or make any other payments or distributions of a similar type or
nature including withdrawal distributions. The Borrower will not use any of the
loan proceeds to purchase or carry "margin" stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System). No part of any of the
proceeds will be used for speculative investment purposes, including, without
limitation, speculating or hedging in the commodities and/or futures market.

2.5 ENVIRONMENTAL MATTERS. Except as disclosed in a written schedule attached to
this Agreement (if no schedule is attached, there are no exceptions), there
exists no uncorrected violation by the Borrower of any federal, state or local
laws (including statutes, regulations, ordinances or other governmental
restrictions and requirements) relating to the discharge of air pollutants,
water pollutants or process waste water or otherwise relating to the environment
or Hazardous Substances as hereinafter defined, whether such laws currently
exist or are enacted in the future (collectively "ENVIRONMENTAL LAWS"). The term
"HAZARDOUS SUBSTANCES" will mean any hazardous or toxic wastes, chemicals or
other substances, the generation, possession or existence of which is prohibited
or governed by any Environmental Laws. The Borrower is not subject to any
judgment, decree, order or citation, or a party to (or threatened with) any
litigation or administrative proceeding, which asserts that the Borrower (i) has
violated any Environmental Laws; (ii) is required to clean up, remove or take
remedial or other action with respect to any Hazardous Substances (collectively
"REMEDIAL ACTION"); or (iii) is required to pay all or a portion of the cost of
any Remedial Action, as a potentially responsible party.
<PAGE>
Except as disclosed on the Borrower's environmental questionnaire provided to
the Bank, there are not now, nor to the Borrower's knowledge after reasonable
investigation have there ever been, any Hazardous Substances (or tanks or other
facilities for the storage of Hazardous Substances) stored, deposited, recycled
or disposed of on, under or at any real estate owned or occupied by the Borrower
during the periods that the Borrower owned or occupied such real estate, which
if present on the real estate or in soils or ground water, could require
Remedial Action. To the Borrower's knowledge, there are no proposed or pending
changes in Environmental Laws which would adversely affect the Borrower or its
business, and there are no conditions existing currently or likely to exist
while the Loan Documents are in effect which would subject the Borrower to
Remedial Action or other liability. The Borrower currently complies with and
will continue to timely comply with all applicable Environmental Laws; and will
provide the Bank, immediately upon receipt, copies of any correspondence,
notice, complaint, order or other document from any source asserting or alleging
any circumstance or condition which requires or may require a financial
contribution by the Borrower or Remedial Action or other response by or on the
part of the Borrower under Environmental Laws, or which seeks damages or civil,
criminal or punitive penalties from the Borrower for an alleged violation of
Environmental Laws.

2.6 COMPLIANCE WITH LAWS. The Borrower has complied with all laws applicable to
its business and its properties, and has all permits, licenses and approvals
required by such laws, copies of which have been provided to the Bank.

2.7 RESTRICTION ON INDEBTEDNESS. The Borrower will not create, incur, assume or
have outstanding any indebtedness for borrowed money (including capitalized
leases) except (i) any indebtedness owing to the Bank and its affiliates, and
(ii) any other indebtedness outstanding on the date hereof, and shown on the
Borrower's financial statements delivered to the Bank prior to the date hereof,
provided that such other indebtedness will not be increased.

2.8 RESTRICTION ON LIENS. The Borrower will not create, incur, assume or permit
to exist any mortgage, pledge, encumbrance or other lien or levy upon or
security interest in any of the Borrower's property now owned or hereafter
acquired, except (i) taxes and assessments which are either not delinquent or
which are being contested in good faith with adequate reserves provided; (ii)
easements, restrictions and minor title irregularities which do not, as a
practical matter, have an adverse effect upon the ownership and use of the
affected property; (iii) liens in favor of the Bank and its affiliates; and (iv)
other liens disclosed in writing to the Bank prior to the date hereof.

2.9 RESTRICTION ON CONTINGENT LIABILITIES. The Borrower will not guarantee or
become a surety or otherwise contingently liable for any obligations of others,
except pursuant o the deposit and collection of checks and similar matters in
the ordinary course of business.

2.10 INSURANCE. The Borrower will maintain insurance to such extent, covering
such risks and with such insurers as is usual and customary for businesses
operating similar properties, and as is satisfactory to the Bank, including
insurance for fire and other risks insured against by extended coverage, public
liability insurance and workers' compensation insurance; and will designate the
Bank as loss payee with a "Lender's Loss Payable" endorsement on any casualty
policies and take such other action as the Bank may reasonably request to ensure
that the Bank will receive (subject to no other interests) the insurance
proceeds on the Bank's collateral.

2.11 TAXES AND OTHER LIABILITIES. The Borrower will pay and discharge, when due,
all of its taxes, assessments and other liabilities except when the payment
thereof is being contested in good faith by appropriate procedures which will
avoid foreclosure of liens securing such items, and with adequate reserves
provided therefore.

2.12 FINANCIAL STATEMENTS AND REPORTING. The financial statements and other
information previously provided to the Bank or provided to the Bank in the
future are or will be complete and accurate and prepared in accordance with
generally accepted accounting principles. There has been no material adverse
change in the Borrower's financial condition since such information was provided
to the Bank. The Borrower will (i) maintain accounting records in accordance
with generally recognized and accepted principles of accounting consistently
applied throughout the accounting periods involved; (ii) provide the Bank with
such information concerning its business affairs and financial condition
(including insurance coverage) as the Bank may request; and (iii) without
request, provide the Bank with management-prepared financial statements:

         [X]   quarterly within  45  days of the end of each quarter;

         [ ]   monthly within  n/a  days of the end of each month;

and annual audited financial statements prepared by an accounting firm
acceptable to the Bank within 90 days of the end of each fiscal year.

2.13 INSPECTION OF PROPERTIES AND RECORDS; FISCAL YEAR. The Borrower will permit
representatives of the Bank to visit and inspect any of the properties and
examine any of the books and records of the Borrower at any reasonable time and
as often as the Bank may reasonably desire. The Borrower will not change its
fiscal year.

2.14     FINANCIAL STATUS.  The Borrower will maintain at all times:

     (i)       Net Working Capital in the amount of at least $ n/a;
     (ii)      Tangible Net Worth in the amount of at least $ n/a;
     (iii)     Debt to Worth Ratio of not more than 1.25 to 1.00;
     (iv)      Current Ratio of at least 2.00 to 1.00;
     (v)       Capital Expenditures not to exceed $30,000,000.00 per fiscal
               year;
<PAGE>
     (vi)      Cash Flow Coverage Ratio of at least n/a; and
     (vii)     Officers, Directors, Partners, Members, and management Salaries
               and Other Compensation not to exceed $ n/a per fiscal year.

2.15 PAID-IN-FULL PERIOD. [X] If checked here, all revolving loans under this
Agreement and the Note must be paid in full for a period of at least 30
consecutive days during each fiscal year.

                     ARTICLE III. COLLATERAL AND GUARANTIES

3.1 COLLATERAL. This Agreement and the Note are secured by any and all security
interests, pledges, mortgages/deeds of trust or liens now or hereafter in
existence granted to the Bank to secure indebtedness of the Borrower to the
Bank, including without limitation as described in the following documents:

[ ]      Real Estate Mortgage(s)/Deed(s) of Trust dated ________________________
[ ]      Covering real estate located at _______________________________________
[X]      Security Agreement(s) dated  06/27/02 _________________________________
[ ]      Collateral Pledge Agreement(s) dated __________________________________
[ ]      Other _________________________________________________________________

3.2 GUARANTIES. This Agreement and the Note are guarantied by each and every
guaranty now or hereafter in existence guarantying the indebtedness of the
Borrower to the Bank (except for any guaranty expressly limited by its terms to
a specific separate obligation of Borrower to the Bank) including, without
limitation, the following: N/A

3.3 CREDIT BALANCES; SETOFF. As additional security for the payment of the
obligations described in the Loan Documents and any other obligations of the
Borrower to the Bank of any nature whatsoever (collectively the "OBLIGATIONS"),
the Borrower hereby grants to the Bank a security interest in, a lien on and an
express contractual right to set off against all depository account balances,
cash and any other property of the Borrower now or hereafter in the possession
of the Bank and the right to refuse to allow withdrawals from any account
(collectively "SETOFF"). The Bank may, at any time upon the occurrence of a
default hereunder (notwithstanding any notice requirements or grace/cure periods
under this or other agreements between the Borrower and the Bank) Setoff against
the Obligations WHETHER OR NOT THE OBLIGATIONS (INCLUDING FUTURE INSTALLMENTS)
ARE THEN DUE OR HAVE BEEN ACCELERATED, ALL WITHOUT ANY ADVANCE OR
CONTEMPORANEOUS NOTICE OR DEMAND OF ANY KIND TO THE BORROWER, SUCH NOTICE AND
DEMAND BEING EXPRESSLY WAIVED.

The information in this Article III is for information only and the omission of
any reference to an agreement will not affect the validity or enforceability
thereof. The rights and remedies of the Bank outlined in this Agreement and the
documents identified above are intended to be cumulative.

                              ARTICLE IV. DEFAULTS

4.1 DEFAULTS. NOTWITHSTANDING ANY CURE PERIODS DESCRIBED BELOW, THE BORROWER
WILL IMMEDIATELY NOTIFY THE BANK IN WRITING WHEN THE BORROWER OBTAINS KNOWLEDGE
OF THE OCCURRENCE OF ANY DEFAULT SPECIFIED BELOW. Regardless of whether the
Borrower has given the required notice, the occurrence of one or more of the
following will constitute a default:

(a)           NONPAYMENT. The Borrower shall fail to pay (i) any interest due on
              the Note or any fees, charges, costs or expenses under the Loan
              Documents by 5 days after the same becomes due; or (ii) any
              principal amount of the Note when due.
(b)           NONPERFORMANCE. The Borrower or any guarantor of Borrower's
              Obligations to the Bank ("GUARANTOR") shall fail to perform or
              observe any agreement, term, provision, condition, or covenant
              (other than a default occurring under (a), (c), (d), (e), (f) or
              (g) of this Section 4.1) required to be performed or observed by
              the Borrower or any Guarantor hereunder or under any other Loan
              Document or other agreement with or in favor of the Bank.
(c)           MISREPRESENTATION. Any financial information, statement,
              certificate, representation or warranty given to the Bank by the
              Borrower or any Guarantor (or any of their representatives) in
              connection with entering into this Agreement or the other Loan
              Documents and/or any borrowing thereunder, or required to be
              furnished under the terms thereof, shall prove untrue or
              misleading in any material respect (as determined by the Bank in
              the exercise of its judgment) as of the time when given.
(d)           DEFAULT ON OTHER OBLIGATIONS. The Borrower or any Guarantor shall
              be in default under the terms of any loan agreement, promissory
              note, lease, conditional sale contract or other agreement,
              document or instrument evidencing, governing or securing any
              indebtedness owing by the Borrower or any Guarantor to the Bank or
              any indebtedness in excess of $10,000 owing by the Borrower to any
              third party, and the period of grade, if any, to cure said default
              shall have passed.
(e)           JUDGMENTS. Any judgment shall be obtained against the Borrower or
              any Guarantor which, together with all other outstanding
              unsatisfied judgments against the Borrower (or such Guarantor),
              shall exceed the sum of $10,000 and shall remain unvacated,
              unbonded or unstayed for a period of 30 days following the date of
              entry thereof.
<PAGE>
(f)           INABILITY TO PERFORM; BANKRUPTCY/INSOLVENCY. (i) the Borrower or
              any Guarantor shall die or cease to exist; or (ii) any Guarantor
              shall attempt to revoke any guaranty of the Obligations described
              herein, or any guaranty becomes unenforceable in whole or in part
              for any reason; or (iii) any bankruptcy, insolvency or
              receivership proceedings, or an assignment for the benefit of
              creditors, shall be commenced under any Federal or state law by or
              against the Borrower or any Guarantor; or (iv) the Borrower or any
              Guarantor shall become the subject of any out-of-court settlement
              with its creditors; or (v) the Borrower or any Guarantor is unable
              or admits in writing its inability to pay its debts as they
              mature; or (vi) if the Borrower is a limited liability company,
              any member thereof shall withdraw or otherwise become
              disassociated from the Borrower.
(g)           ADVERSE CHANGE; INSECURITY. (i) There is a material adverse change
              in the business, properties, financial condition or affairs of the
              Borrower or any Guarantor, or in any collateral securing the
              Obligations; or (ii) the Bank in good faith deems itself insecure.

4.2 TERMINATION OF LOANS; ADDITIONAL BANK RIGHTS. Upon the Maturity Date or the
occurrence of any of the events identified in Section 4.1, the Bank may at any
time (notwithstanding any notice requirements or grace/cure periods under this
or other agreements between the Borrower and the Bank) (i) immediately terminate
its obligation, if any, to make additional loans to the Borrower; (ii) Setoff;
and/or (iii) take such other steps to protect or preserve the Bank's interest in
any collateral, including without limitation, notifying account debtors to make
payments directly to the Bank, advancing funds to protect any collateral and
insuring collateral at the Borrower's expense; all without demand or notice of
any kind, all of which are hereby waived.

4.3 ACCELERATION OF OBLIGATIONS. Upon the Maturity Date or the occurrence of any
of the events identified in Sections 4.1 (a) through 4.1 (e) and 4.1 (g), and
the passage of any applicable cure periods, the Bank may at any time thereafter,
by written notice to the Borrower, declare the unpaid principal balance of any
Obligations, together with the interest accrued thereon and other amounts
accrued hereunder and under the other Loan Documents, to be immediately due and
payable; and the unpaid balance will thereupon be due and payable, all without
presentation, demand, protest or further notice of any kind, all of which are
hereby waived, and notwithstanding anything to the contrary contained herein or
in any of the other Loan Documents. Upon the occurrence of any event under
Section 4.1 (f), the unpaid principal balance of any Obligations, together with
all interest accrued thereon and other amounts accrued hereunder and under the
other Loan Documents, will thereupon be immediately due and payable, all without
presentation, demand, protest or notice of any kind, all of which are hereby
waived, and notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents. NOTHING CONTAINED IN SECTION 4.1, SECTION 4.2 OR
THIS SECTION WILL LIMIT THE BANK'S RIGHT TO SETOFF AS PROVIDED IN SECTION 3.3 OR
OTHERWISE IN THIS AGREEMENT.

4.4 OTHER REMEDIES. Nothing in this Article IV is intended to restrict the
Bank's rights under any of the Loan Documents or at law, and the Bank may
exercise all such rights and remedies as and when they are available.

                             ARTICLE V. OTHER TERMS

5.1 FINANCIAL DEFINITIONS SUPPLEMENT. If a Borrowing Base or covenants regarding
financial status apply to this loan, the "FINANCIAL DEFINITIONS" Supplement
identified in Sections 1.2 and 2.14 of this Agreement is hereby incorporated
into this Agreement. The Borrower acknowledges receiving a copy of such
Supplement.

5.2 ADDITIONAL TERMS; ADDENDUM/SUPPLEMENTS. The warranties, covenants,
conditions and other terms described in this Section and/or in the Addendum
and/or other attached document(s) referenced in this Section are incorporated
into this Agreement:

SEE ATTACHED ADDENDUM
---------------------

                           ARTICLE VI. MISCELLANEOUS

6.1 DELAY; CUMULATIVE REMEDIES. No delay on the part of the Bank in exercising
any right, power or privilege hereunder or under any of the other Loan Documents
will operate as a waiver thereof, nor will any single or partial exercise of any
right, power or privilege hereunder preclude other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein specified are cumulative and are not exclusive of any rights or remedies
which the Bank would otherwise have.

6.2 RELATIONSHIP TO OTHER DOCUMENTS. The warranties, covenants and other
obligations of the Borrower (and the rights and remedies of the Bank) that are
outlined in this agreement and the other Loan Documents are intended to
supplement each other. In the event of any inconsistencies in any of the terms
in the Loan Documents, all terms will be cumulative so as to give the Bank the
most favorable rights set forth in the conflicting documents, except that if
there is a direct conflict between any preprinted terms and specifically
negotiated terms (whether included in an addendum or otherwise), the
specifically negotiated terms will control.

6.3 PARTICIPATIONS; GUARANTORS. The Bank may, at its option, sell all or any
interests in the Note and other Loan Documents to other financial institutions
(the "PARTICIPANT"), and in connection with such sales (and thereafter) disclose
any financial information the Bank may have concerning the Borrower to any such
Participant or potential Participant. From time to time, the Bank may, in its
discretion and without obligation to the Borrower, any Guarantor or any other
third party, disclose information about the Borrower
<PAGE>
and this loan to any Guarantor, surety or other accommodation party. This
provision does not obligate the Bank to supply any information or release the
Borrower from its obligation to provide such information, and the Borrower
agrees to keep all Guarantors advised of its financial condition and other
matters which may be relevant to the Guarantors' obligations to the Bank.

6.4 SUCCESSORS. The rights, options, powers and remedies granted in this
Agreement and the other Loan Documents will extend to the Bank and to its
successors and assigns, will be binding upon the Borrower and its successors and
assigns and will be applicable hereto and to all renewals and/or extensions
hereof.

6.5 INDEMNIFICATION. Except for harm arising from the Bank's willful misconduct,
the Borrower hereby indemnifies and agrees to defend and hold the Bank harmless
from any and all losses, costs, damages, claims and expenses of any kind
suffered by or asserted against the Bank relating to claims by third parties
arising out of the financing provided under the Loan Documents or related to any
collateral (including, without limitation, the Borrower's failure to perform its
obligations relating to Environmental Matters described in Section 2.5 above).
This indemnification and hold harmless provision will survive the termination of
the Loan Documents and the satisfaction of the Obligations due the Bank.

6.6 NOTICE OF CLAIMS AGAINST BANK; LIMITATION OF CERTAIN DAMAGES. In order to
allow the Bank to mitigate any damages to the Borrower from the Bank's alleged
breach of its duties under the Loan Documents or any other duty, if any, to the
Borrower, the Borrower agrees to give the Bank immediate written notice of any
claim or defense it has against the Bank, whether I tort or contract, relating
to any action or inaction by the Bank under the Loan Documents, or the
transactions related thereto, or of any defense to payment of the Obligations
for any reason. The requirement of providing timely notice to the Bank
represents the parties' agreed-to standard of performance regarding claims
against the Bank. Notwithstanding any claim that the Borrower may have against
the Bank, and regardless of any notice the Borrower may have given the Bank, THE
BANK WILL NOT BE LIABLE TO THE BORROWER FOR CONSEQUENTIAL AND/OR SPECIAL DAMAGES
ARISING THEREFROM, EXCEPT THOSE DAMAGES ARISING FROM THE BANK'S WILLFUL
MISCONDUCT.

6.7 NOTICES. Notice of any record shall be deemed delivered when the record has
been (a) deposited in the United States Mail, postage pre-paid, (b) received by
overnight delivery service, (c) received by telex, (d) received by telecopy, (e)
received through the internet, or (f) when personally delivered.

6.8 PAYMENTS. Payments due under the Note and other Loan Documents will be made
in lawful money of the United States. All payments may be applied by the Bank to
principal, interest and other amounts due under the Loan Documents in any order
which the Bank elects.

6.9 APPLICABLE LAW AND JURISDICTION; INTERPRETATION; JOINT LIABILITY;
SEVERABILITY. This Agreement and all other Loan Documents will be governed by
and interpreted in accordance with the internal laws of the State of Oregon,
except to the extent superseded by Federal law. Invalidity of any provisions of
this Agreement will not affect any other provision. THE BORROWER HEREBY CONSENTS
TO THE EXCLUSIVE JURISDITION OF ANY STATE OR FEDERAL COURT SITUATED IN THE
COUNTY OR FEDERAL JURISDICTION OF THE BANK'S BRANCH WHERE THE LOAN WAS
ORIGINATED, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD
TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE
NOTE, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING
THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing
herein will affect the Bank's rights to serve process in any manner permitted by
law, or limit the Bank's right to bring proceedings against the Borrower in the
competent courts of any other jurisdiction or jurisdictions. This Agreement, the
other Loan Documents and any amendments hereto (regardless of when executed)
will be deemed effective and accepted only upon the Bank's receipt of the
executed originals thereof. If there is more than one Borrower, the liability of
the Borrowers will be joint and several, and the reference to "Borrower" will be
deemed to refer to all Borrowers. Invalidity of any provision of this Agreement
shall not affect the validity of any other provision.

6.10 COPIES, ENTIRE AGREEMENT; MODIFICATION. The Borrower hereby acknowledges
the receipt of a copy of this Agreement and all other Loan Documents.

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND
SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT
CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS
AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL
ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT
BETWEEN BORROWER AND THE BANK. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW
IN EFFECT BETWEEN BORROWER AND THE BANK, WHICH OCCURS AFTER RECEPT BY BORROWER
OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED
MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE
RELIED UPON.
<PAGE>
6.11 WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK HEREBY JOINTLY AND
SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY FURY IN ANY ACTION OR PROCEEDING
RELATING TO AY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY COLLATERLA
SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNTECTED
THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT THIS WAIVER
IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

6.12     ATTACHMENTS. ALL DOCUMENTS ATTACHED HERETO, INCLUDING ANY APPENDICES,
         SCHEDULES, RIDERS, AND EXHIBITS TO THIS AGREEMENT, ARE HEREBY EXPRESSLY
         INCORPORATED BY REFERENCE.

IN WITNESS WHEREOF, the undersigned have executed this REVOLVING CREDIT
AGREEMENT as of June 27, 2002.

<TABLE><CAPTION>
<S>                                                          <C>
(Individual Borrower)                                         THE  NAUTILUS  GROUP,  INC.,  formerly  known as  Direct Focus, Inc.
                                                              --------------------------------------------------------------------
                                                              Borrower Name (Organization)

                                                              a WASHINGTON Corporation
-----------------------------------------                     --------------------------------------------------------------------

                                                              By  /s/ Rod W. Rice
                                                                  ----------------------------------------------------------------

Borrower Name            N/A                                  Name and Title:  Rod W. Rice, Chief Financial Officer
             ------------   -------------                                      ---------------------------------------------------

-----------------------------------------

Borrower Name            N/A                                  By
             ------------   -------------                        -----------------------------------------------------------------

                                                              Name and Title:
                                                                             -----------------------------------------------------

                                                              U.S Bank N.A.                                                 (Bank)
                                                              --------------------------------------------------------------------

                                                              By  /s/ Le Phan
                                                                  ----------------------------------------------------------------

                                                              Name and Title: Le Phan, Assistant Vice President
                                                                              ----------------------------------------------------

Borrower Address: 1400 NE 136th Avenue, Vancouver, WA 98684
                 -----------------------------------------------------------------------------------------------------------------

Borrower Telephone No.:
                       -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
                           BUSINESS SECURITY AGREEMENT

This Business Security Agreement ("AGREEMENT") is made and entered into by the
undersigned borrower, guarantor and/or other obligor/pledgor (the "DEBTOR") in
favor of U.S. BANK N.A., 555 SW OAK, PORTLAND, OR 97204 (the "BANK") as of the
date set forth on the last page of this Agreement.

                          ARTICLE 1. SECURITY INTEREST

1.1 GRANT OF SECURITY INTEREST. Debtor hereby grants a security interest in and
collaterally assigns the Collateral (defined below) to Bank to secure all of
Debtor's Obligations (defined below) to Bank. The intent of the parties hereto
is that the Collateral secures all Obligations of Debtor to Bank, whether or not
such Obligations exist under this Agreement or any other agreements, whether now
or hereafter existing, between Debtor and Bank or in favor of Bank, including,
without limitation, any note, any loan or security agreement, any lease, any
mortgage, deed of trust or other pledge of an interest in real or personal
property, any guaranty, any letter of credit or banker's acceptance, any
agreement for any other services or credit extended by Bank to Debtor even
though not specifically enumerated herein, and any other agreement with Bank
(together and individually, the "LOAN DOCUMENTS").

1.2 "COLLATERAL" means all of the following whether now owned or existing or
hereafter acquired by Debtor (or by Debtor with spouse), wherever located
(including all documents, general intangibles, additions and accessions, spare
and repair parts, special tools, replacements, returned or repossessed goods and
books and records relating to the following; and all proceeds, supporting
obligations and products of the following) [CHECK ALL THAT APPLY]:

[X]      All accounts, instruments, documents, chattel paper, general
         intangibles, contract rights, investment property (including any
         securities entitlements and/or securities accounts held by Debtor),
         securities and certificates of deposit, deposit accounts, and letter of
         credit rights;

[X]      All inventory;
[ ]      All equipment;
[ ]      All fixtures; and
[ ]      Specific Collateral (the following, whether constituting equipment,
         inventory, fixtures, or other collateral):
         -----------------------------------------------------------------------
         -----------------------------------------------------------------------

In the event the first four boxes are checked, Debtor acknowledges and agrees
that, in applying the law of any jurisdiction that at any time enacts all or
substantially all of the uniform provisions of Revised Article 9 of the Uniform
Commercial Code (1999 Official Text), the foregoing collateral description
covers all assets of Debtor. Bank may at any time and from time to time file
financing and continuation statements and amendments thereto reflecting the
same. Unless otherwise defined, the terms set forth in this Agreement shall have
the meanings set forth in the Uniform Commercial Code as adopted in the Loan
Documents and as amended from time to time. The defined terms hereunder shall be
interpreted in a manner most favorable to Bank.

1.3 "OBLIGATIONS" means all Debtor's debts (except for consumer credit if Debtor
is a natural person), liabilities obligations, covenants, warranties, and duties
to Bank (plus its affiliates including any credit card debt, but specifically
excluding any type of contingent, whether arising out of the Loan Documents or
otherwise, and all other debts and obligations due Bank under any lease,
agricultural, real estate or other financing transaction and regardless of
whether such financing is related in time or type to the financing provided at
the time of grant of this security interest, and regardless of whether such
Obligations arise out of existing or future credit granted by Bank to any
Debtor, to any Debtor and others, to other guaranteed, endorsed or otherwise
secured by any Debtor or to any debtor-in-possession or other
successor-in-interest of any Debtor, and including principal, interest, fees,
expenses and charges relating to any of the foregoing.

                      ARTICLE II. WARRANTIES AND COVENANTS

In addition to all other warranties and covenants of Debtor under the Loan
Documents which are expressly incorporated herein as part of this Agreement and
while any part of the credit granted Debtor under the Loan Documents is
available or any Obligations of Debtor to Bank are unpaid or outstanding, Debtor
continuously warrants and agrees as follows:

2.1 DEBTOR'S NAME, LOCATION; NOTICE OF LOCATION CHANGES. Except as indicated in
the Article 9 Certificate executed by Debtor and made a part hereof, Debtor's
name and organizational structure has remained the same during the past five (5)
years. Debtor will continue to use only the name set forth with Debtor's
signature unless Debtor gives Bank prior written notice of any change.
Furthermore, Debtor shall not do business under another name nor use any trade
name without giving ten (10) days prior written notice to Bank. Debtor will not
change its status or organizational structure without the prior written consent
of Bank. Debtor will not change its location or registration (if Debtor is a
registered organization) to another state without prior written notice to Bank.
The address appearing in the Article 9 Certificate is Debtor's chief executive
office (or residence if Debtor is a sole proprietor).
<PAGE>
2.2 STATUS OF COLLATERAL. All Collateral is genuine and validly existing. Except
for items of insignificant value or as otherwise reflected in writing by Debtor
to Bank under a borrowing base or otherwise, (i) Collateral constituting
inventory, equipment and fixtures is in good condition, not obsolete and is
either currently saleable or usable; and (ii) Collateral constituting accounts,
contract rights, notes, chattel paper and other third-party obligations to pay
is fully enforceable in accordance with its terms and not subject to return,
dispute, setoff, credit allowance or adjustment, except for discounts for prompt
payment. Unless Debtor provides Bank with written notice to the contrary, Debtor
has no notice or knowledge of anything that would impair the ability of any
third-party obligor to pay any debt to Debtor when due.

2.3 OWNERSHIP; MAINTENANCE OF COLLATERAL; RESTRICTIONS ON LIENS AND
DISPOSITIONS. Debtor is the sole owner of the Collateral free of all liens,
claims, other encumbrances and security interests except as permitted in writing
by Bank. Debtor shall: (i) maintain the Collateral in good condition and repair
(reasonable wear and tear excepted), and not permit its value to be impaired;
(ii) not permit waste, removal or loss of identity of the Collateral; (iii) keep
the Collateral free from all liens, executions, attachments, claims,
encumbrances and security interests (other than Bank's paramount security
interest and those permitted in writing by Bank); (iv) defend the Collateral
against all claims and legal proceedings by persons other than Bank; (v) pay and
discharge when due all taxes, levies and other charges or fees upon the
Collateral except for payment of taxes contested by Debtor in good faith by
appropriate proceedings so long as no levy or lien has been imposed upon the
Collateral; (vi) not least, sell or transfer the Collateral to any party nor
move it to any new location outside of the ordinary course of business; (vii)
not permit the Collateral, without the consent of Bank to become a fixture or an
accession to other goods; (viii) not permit the collateral to be used in
violation of any applicable law, regulation or policy of insurance; and (ix) as
to the Collateral consisting of instruments and chattel paper, preserve Bank's
rights in it against all other parties. Notwithstanding the above, Debtor may
sell, lease or transfer inventory in the ordinary course of its business
provided that no sale, lease or transfer shall include any transfer or sale in
satisfaction (partial or complete) of a debt owed by Debtor; title will not pass
to buyer until Debtor physically delivers the goods to buyer or Debtor ships the
goods F.O.B. to buyer's destination; and sales and/or leases to Debtor's
affiliates shall be for fair market value, cash on delivery, with the proceeds
remitted to Bank.

2.4 MAINTENANCE OF SECURITY INTEREST; PURCHASE MONEY SECURITY INTERESTS. Debtor
shall take any action requested by Bank to preserve the Collat4eral and to
establish the value of, the priority of, to perfect, to continue to perfection
of or to enforce Bank's interest in the Collateral and Bank's rights under this
Agreement; and shall pay all costs and expenses related thereto. Debtor shall
also cooperate with Bank in obtaining control (for purposes of perfection under
the Uniform Commercial Code) of Collateral consisting of deposit accounts,
investment property, letter of credit rights, electronic chattel paper and any
other collateral where Bank may obtain perfection through control. Debtor hereby
authorizes Bank to take any and all actions described above and in place of
Debtor with respect to the Collateral and hereby ratifies any such actions Bank
has taken prior to the date of this Agreement and hereafter, which actions may
include, without limitation, filing UCC financing statements and obtaining or
attempting to obtain control agreements from holders of the Collateral. Debtor
and Bank intend to maintain the full effect of any purchase money security
interest granted in favor of Bank notwithstanding the fact that the Collateral
so purchased is also pledged as security for other Obligations under the Loan
Documents.

2.5 COLLATERAL INSPECTIONS; MODIFICATIONS AND CHANGES IN COLLATERAL. At
reasonable times, Bank may examine the Collateral and Debtor's records
pertaining to it, wherever located, and make copies of such records at Debtor's
expense; and Debtor shall assist Bank in so doing. Without Bank's prior written
consent, Debtor shall not alter, modify, discount, extend, renew or cancel any
Collateral, except for ordinary discounts for prompt payment on accounts,
physical modifications to the inventory occurring in the manufacturing process
or alterations to equipment which do not materially affect its value. Debtor
shall promptly notify Bank in writing of any material change in the condition of
the Collateral and of any change in location of the Collateral.

2.6 COLLATERAL RECORDS, REPORTS AND STATEMENTS. Debtor shall keep accurate and
complete records respecting the Collateral in such form as Bank may approve. At
such times as Bank may require, Debtor shall furnish to Bank any
records/information Bank might require, including, without limitation, a
statement certified by Debtor and in such form and containing such information
as may be prescribed by Bank showing the current status and value of the
Collateral.

2.7 CHATTEL PAPER, INSTRUMENTS, ETC. Chattel paper, instruments, drafts, notes,
acceptances, and other documents which constitute Collateral shall be on forms
satisfactory to Bank. Debtor shall promptly mark chattel paper to indicate
conspicuously Bank's security interest therein, shall not deliver any chattel
paper or negotiable instruments to any other entity and, upon request, shall
deliver all original chattel paper, instruments, drafts, notes, acceptances and
other documents which constitute Collateral to Bank.

2.8 UNITED STATES GOVERNMENT CONTRACTS. If any accounts or contract rights arose
out of contracts with the United States or any of its departments, agencies or
instrumentalities, Debtor shall promptly notify Bank and execute any writings
required by Bank so that all money due or to become due under such contracts
shall be assigned to Bank under the Federal Assignment of Claims Act.

2.9 ENVIRONMENTAL MATTERS. Except as disclosed in a written schedule attached to
this Agreement (if no schedule is attached, there are no exceptions), there
exists no uncorrected violation by Debtor of any federal, state or local laws
(including statutes, regulations, ordinances or other governmental restrictions
and requirements) relating to the discharge of air pollutants, water pollutants
or process waste water or otherwise relating to the environment or Hazardous
Substances as hereinafter defined, whether such laws currently exist or are
enacted in the future (collectively "ENVIRONMENTAL LAWS"). The term "HAZARDOUS
SUBSTANCES" shall mean any
<PAGE>
hazardous or toxic wastes, chemicals or other substances, the generation,
possession or existence of which is prohibited or governed by any Environmental
Laws. Debtor is not subject to any judgment, decree, order or citation, or a
party to (or threatened with) any litigation or administrative proceedings,
which asserts that Debtor (i) has violated any environmental Laws; (ii) is
required to clean up, remove or take remedial or other action with respect to
any Hazardous Substances (collectively "REMEDIAL ACTION"); or (iii) is required
to pay all or a portion of the cost of any Remedial Action, as a potentially
responsible party. There are not now, nor to Debtor's knowledge after reasonable
investigation have there ever been, any Hazardous Substances (or tanks or other
facilities for the storage of Hazardous Substances) stored, deposited, recycled
or disposed of on, under or at any real estate owned or occupied by Debtor
during the periods that Debtor owned or occupied such real estate, which if
present on the real estate or in soils or ground water, could require Remedial
Action. To Debtor's knowledge, there are no proposed or pending changes in
Environmental Laws which would adversely affect Debtor or its business, and
there are no conditions existing currently or likely to exist while the Loan
Documents are in effect which would subject Debtor to Remedial Action or other
liability. Debtor currently complies with and will continue to timely comply
with all applicable Environmental Laws; and will provide Bank, immediately upon
receipt, copies of any correspondence, notice, complaint, order or other
document from any source asserting or alleging any circumstance or condition
which requires or may require a financial contribution by Debtor or Remedial
Action or other response by or on the part of Debtor under Environmental Laws,
or which seeks damages or civil, criminal or punitive penalties from Debtor for
an alleged violation of Environmental Laws.

2.10 INSURANCE. Debtor will maintain insurance to such extent, covering such
risks and with such insurers as is usual and customary for businesses operating
similar properties, and as is satisfactory to Bank, including insurance for fire
and other risks insured against by extended or comprehensive coverage, public
liability insurance and workers' compensation insurance; and will designate Bank
as loss payee with a "Lender's Loss Payable" endorsement on any casualty
policies and take such other action as Bank may reasonably request to ensure
that Bank will receive (subject to no other interests) the insurance proceeds of
the Collateral. Debtor hereby assigns all insurance proceeds to and irrevocably
directs, while any Obligations remain unpaid, any insurer to pay to Bank the
proceeds of all such insurance and any premium refund, and authorizes Bank to
endorse Debtor's name to effect the same, to make, adjust or settle, in Debtor's
name, any claim on any insurance policy relating to the Collateral; and, at the
option of Bank, to apply such proceeds and refunds to the Obligations or to
restoration of the Collateral, returning any excess to Debtor. In the event of
any failure of the Debtor to obtain or maintain any insurance required
hereunder, the Bank shall have the authority, but not the obligation, to obtain
any such insurance coverage, and the Debtor shall immediately reimburse the Bank
for the cost thereof, together with interest on such amount at the highest rate
of interest then accruing on any of the Obligations.

                            ARTICLE III. COLLECTIONS

3.1 DEPOSIT WITH BANK. At any time Bank may require that all proceeds of
Collateral received by Debtor shall be held by Debtor upon an express trust for
Bank, shall not be commingled with any other funds or property of Debtor and
shall be turned over to Bank in precisely the form received (but endorsed by
Debtor, if necessary for collection) not later than the business day following
the day of their receipt. All proceeds of Collateral received by Bank directly
or from Debtor shall be applied against the Obligations in such order and at
such times as Bank shall determine.

                      ARTICLE IV. RIGHTS AND DUTIES OF BANK

In addition to all other rights (including setoff) and duties of Bank under the
Loan Documents which are expressly incorporated herein as a part of this
agreement, the following provisions shall also apply:

4.1 AUTHORITY TO PERFORM FOR DEBTOR. Debtor presently appoints any officer of
Bank as Debtor's attorney-in-fact (coupled with an interest and irrevocable
while any Obligations remain unpaid) to do any of the following upon default by
Debtor hereunder (notwithstanding any notice requirements or grace/cure periods
under this or other agreements between Debtor and Bank): (i) to file, endorse or
place the name of Debtor on any invoice or document of title relating to
accounts, drafts against customers, notices to customers, notes, acceptances,
assignments of government contracts, instruments, financing statements, checks,
drafts, money orders, insurance claims or payments or other documents evidencing
payment or a security interest relating to the Collateral; (ii) to receive, open
and dispose of all mail addressed to Debtor and to notify the Post Office
authorities to change the address for delivery of mail addressed to Debtor to an
address designated by Bank; (iii) to do all such other acts and things necessary
to carry out Debtor's duties under this Agreement and other Loan Documents; and
(iv) to perfect, protect and/or realize upon Bank's interest in the Collateral.
If the Collateral includes funds or property in depository accounts, Debtor
authorizes each of its depository institutions to remit to Bank, without
liability to Debtor, all of Debtor's funds on deposit with such institution upon
written direction by Bank after default by Debtor hereunder. All acts by Bank
are hereby ratified and approved, and Bank shall not be liable for any acts of
commission or omission, nor for any errors of judgment or mistakes of fact or
law.

4.2 VERIFICATION AND NOTIFICATION; BANK'S RIGHTS. Bank may verify Collateral in
any manner, and Debtor shall assist Bank in so doing. Upon the occurrence of a
default hereunder, Bank may at any time and Debtor shall, upon request of Bank,
notify the account debtors to make payment directly to Bank; and Bank may
enforce collection of, sell, settle, compromise, extend or renew the
indebtedness of such account debtors; all without notice to or the consent of
Debtor. Until account debtors are so notified, Debtor, as agent of Bank, shall
make collections on the Collateral. Bank may at any time notify any bailee
possessing Collateral to turn over the Collateral to Bank.
<PAGE>
4.3 COLLATERAL PRESERVATION. Bank shall use reasonable care in the custody and
preservation of any Collateral in its physical possession but in determining
such standard of reasonable care, Debtor expressly acknowledges that Bank has no
duty to: (i) insure the Collateral against hazards; (ii) ensure that the
Collateral will not cause damage to property or injury to third parties; (iii)
protect it from seizure, theft or conversion by third parties, third parties'
claims or acts of God; (iv) give to Debtor any notices received by Bank
regarding the Collateral; (v) perfect or continue perfection of any security
interest in favor of Debtor; (vi) perform an services, complete any
work-in-process or take any other action in connection with the management or
maintenance of the Collateral; of (vii) sue or otherwise effect collection upon
any accounts even if Bank shall have made a demand for payment upon individual
account debtors. Notwithstanding any failure by Bank to use reasonable care in
preserving the Collateral, Debtor agrees that Bank shall not be liable for
consequential or special damages arising therefrom.

                        ARTICLE V. DEFAULTS AND REMEDIES

Bank may enforce its rights and remedies under this Agreement upon default. A
default shall occur if Debtor fails to comply with the terms of any Loan
Documents (including this Agreement or any guaranty by Debtor), a demand for
payment is made under a demand loan, or any other obligor fails to comply with
the terms of any Loan Documents for which Debtor has given Bank a guaranty or
pledge.

5.1 CUMULATIVE REMEDIES; NOTICE; WAIVER. In addition to the remedies for default
set forth in the Loan Documents, Bank upon default shall have all other rights
and remedies for default provided by the Uniform Commercial Code, as well as any
other applicable law and this Agreement, INCLUDING, WITHOUT LIMITATION, THE
RIGHT TO REPOSSESS, RENDER UNUSABLE AND/OR DISPOSE OF THE COLLATERAL WITHOUT
JUDICIAL PROCESS. The rights and remedies specified herein are cumulative and
are not exclusive of any rights or remedies which Bank would otherwise have.
With respect to such rights and remedies:

(a)           ASSEMBLING COLLATERAL; STORAGE; USE OF DEBTOR'S NAME/OTHER
              PROPERTY. Bank may require Debtor to assemble the Collateral and
              to make it available to Bank at any convenient place designated by
              Bank. Debtor recognizes that Bank will not have an adequate remedy
              in Law if this obligation is breached and accordingly, Debtor's
              obligation to assemble the Collateral shall be specifically
              enforceable. Bank shall have the right to take immediately
              possession of said Collateral and Debtor irrevocably authorizes
              Bank to enter any of the premises wherever said Collateral shall
              be located, and to store, repair, maintain, assemble, manufacture,
              advertise and sell, lease or dispose of (by public sale or
              otherwise) the same on said premises until sold, all without
              charge or rent to Bank. Bank is hereby granted an irrevocable
              license to use, without charge, Debtor's equipment, inventory,
              labels, patents, copyrights, franchises, names, trade secrets,
              trade names, trademarks and advertising matter and any property of
              a similar nature; and Debtor's rights under all licenses and
              franchise agreements shall inure to Bank's benefit. Further,
              Debtor releases Bank from obtaining a bond or surety with respect
              to any repossession and/or disposition of the Collateral.

(b)           NOTICE OF DISPOSITION. Written notice, when required by law, sent
              to any address of Debtor in this Agreement, at least five (5)
              calendar days (counting the day of sending) before the date of
              proposed disposition of the Collateral is reasonable notice but
              less notice may be reasonable under the circumstances.
              Notification to account debtors by Bank shall not be deemed a
              disposition of the Collateral. Notice of any record shall be
              deemed delivered when the record has been (a) deposited in the
              United States Mail, postage pre-paid, (b) received by overnight
              delivery service, (c) received by telex, (d) received by telecopy,
              (e) received through the internet, or (f) when personally
              delivered.

(c)           POSSESSION OF COLLATERAL/COMMERCIAL REASONABLENESS. Bank shall
              not, at any time, be obligated to either take or retain possession
              or control of the Collateral. With respect to Collateral in the
              possession or control of Bank, Debtor and Bank agree that as a
              standard for determining commercial reasonableness, Bank need not
              liquidate, collect, sell or otherwise dispose of any of the
              collateral if Bank believes, in good faith, that disposition of
              the Collateral would not be commercially reasonable, would subject
              Bank to third-party claims or liability, that other potential
              purchasers could be attracted or that a better price could be
              obtained if Bank held the Collateral for up to 2 years. Bank may
              sell Collateral without giving any warranties and may specifically
              disclaim any warranties of title or the like. Furthermore, Bank
              may sell the Collateral on credit (and reduce the Obligations only
              when payment is received from the buyer), at wholesale and/or with
              or without an agent or broker; and Bank need not complete,
              process, repair, clean-up or otherwise prepare the Collateral
              prior to disposition. If the purchaser fails to pay for the
              Collateral, Bank may resell the collateral and Debtor shall be
              credited with the cash proceeds of the sale. Bank may comply with
              any applicable state or federal law requirements in connection
              with a disposition of the Collateral and compliance will not be
              considered to adversely affect the commercial reasonableness of
              any sale of the Collateral.

(d)           WAIVER BY DEBTOR. Bank has no obligation and Debtor waives any
              obligation to attempt to satisfy the obligations by collecting the
              obligations from any third parties and Bank may release, modify or
              waive any collateral provided by any third party to secure any of
              the Obligations, all without affecting Bank's rights against
              Debtor. Debtor further waives any obligation on the part of Bank
              to marshal any assets in favor of Debtor or in payment of the
              Obligations. Notwithstanding any provisions in this Agreement or
              any other agreement between Debtor and Bank, Debtor does not waive
              any statutory rights except to the extent that the waiver thereof
              is permitted by law.

(e)           WAIVER BY BANK. Bank may permit Debtor to attempt to remedy any
              default without waiving its rights and remedies hereunder, and
              Bank may waive any default without waiving any other subsequent or
              prior default by Debtor.
<PAGE>
              Furthermore, delay on the part of Bank in exercising any right,
              power or privilege hereunder or at law shall not operate as a
              waiver thereof, nor shall any single or partial exercise of such
              right, power or privilege preclude other exercise thereof or the
              exercise of any other right, power or privilege. NO WAIVER OR
              SUSPENSION SHALL BE DEEMED TO HAVE OCCURRED UNLESS BANK HAS
              EXPRESSLY AGREED IN WRITING SPECIFYING SUCH WAIVER OR SUSPENSION.

                            ARTICLE VI. MISCELLANEOUS

         All other provisions in the Loan Documents are expressly incorporated
         as part of this agreement.

         ALL DOCUMENTS ATTACHED HERETO, INCLUDING ANY APPENDICES, SCHEDULES,
         RIDERS, AND EXHIBITS TO THIS AGREEMENT, ARE HEREBY EXPRESSLY
         INCORPORATED BY REFERENCE.

IN WITNESS WHEREOF, the undersigned have executed this BUSINESS SECURITY
AGREEMENT as of June 27, 2002.

<TABLE><CAPTION>
<S>                                        <C>
(Individual Debtor)                         THE NAUTILUS GROUP, INC., formerly known as Direct Focus, Inc.
                                            ---------------------------------------------------------------------------
                                            Debtor Name (Organization)

                                            a WASHINGTON Corporation
----------------------------------          ---------------------------------------------------------------------------

                                            By /s/ Rod W. Rice
                                               ------------------------------------------------------------------------
Debtor Name         N/A
           ---------   -----------

                                            Name and Title  Rod W. Rice, Chief Financial Officer
----------------------------------                          -----------------------------------------------------------

Debtor Name         N/A                     By
           ---------   -----------             ------------------------------------------------------------------------

                                            Name and Title
                                                           ------------------------------------------------------------
</TABLE>
<PAGE>
                     ADDENDUM TO REVOLVING CREDIT AGREEMENT

This Addendum is made part of the Revolving Credit Agreement (the "AGREEMENT ")
made and entered into by and between the undersigned borrower (the "BORROWER ")
and the undersigned bank (the "BANK ") as of the date identified below. The
warranties, covenants and other terms described below are hereby added to the
Agreement.

COMPLIANCE TESTED. Compliance with all covenants and ratios shall be determined
by calculating the ratios/amounts as of the end of each FISCAL QUARTER.

COMPLIANCE CERTIFICATE. Unless waived in writing by Bank, Borrower agrees to
provide Bank within 45 days of the end of each quarter with a certificate
executed by Borrower's chief financial officer, or other officer or person
acceptable to Bank, certifying that the representations and warranties set forth
in this Agreement are true and correct as of the date of the certificate and
further certifying that, as of the date of the certificate, no Event of Default
exists under this Agreement.

CAPITAL EXPENDITURES LIMIT. Make or contract to make capital expenditures,
including leasehold improvements, in any fiscal year in excess of $30,000,000.00
or incur liability for rentals of property (including both real and personal
property) in an amount which, together with capital expenditures, shall in any
fiscal year exceed such sum.

ACQUISITIONS, INVESTMENTS, AND/OR NEW DEBT LIMIT COVENANT. Borrower covenants
and agrees with Bank that acquisitions, investments, and/or loans will be
limited to an annual aggregate amount of $30,000,000.00. Any transaction taking
the total above that amount requires Bank consent.

MINIMUM ROLLING FOUR QUARTER EBITDA. Borrower shall maintain a minimum EBITDA of
$75,000,000.00, measured on a rolling 12-month basis, tested quarterly. EBITDA
is defined as Earnings before interest, taxes, depreciation and amortization.

DATED AS OF:  JUNE 27, 2002
<TABLE><CAPTION>
<S>                                                           <C>
(Individual Borrower)                                         THE NAUTILUS GROUP, INC.,
                                                              FORMERLY KNOWN AS DIRECT FOCUS, INC.
                                                              Borrower Name (Organization)
                                               (SEAL)         A Washington Corporation
-----------------------------------------------------
                                                              By /s/ Rod W. Rice
                                                                ---------------------------------------
Borrower Name
             ----------------------------------------         Name and Title: Rod W. Rice, Chief Financial Officer

                                               (SEAL)
-----------------------------------------------------

Borrower Name
             ----------------------------------------
                                                              U.S. BANK N.A.  (Bank)
                                                              By /s/ Le Phan
                                                                ---------------------------------------
                                                              Name and Title:  Le Phan, Assistant Vice President

</TABLE>EXHIBIT 10.1

                                 PROMISSORY NOTE

     THIS PROMISSORY NOTE ("Note") is made as of this April 29, 2002 by National
Scientific Corporation,  a Texas Corporation with offices at 14455 N. Hayden Rd.
Ste 202, Scottsdale, AZ. 85260, ("Maker") and executed between the Maker and Lou
L. Ross ("Lender").

WITNESSETH

     WHEREAS,  pursuant  to this Note,  Lender has agreed to loan to Maker a sum
certain; and

     WHEREAS,  Maker has agreed to repay such sum  certain  with  interest  at a
fixed time in the future;

     NOW, THEREFORE, Maker hereby covenants and agrees as follows:

ARTICLE I:  TERMS AND CONDITIONS

SECTION  1.01 -  AMOUNT:  Subject  to the  terms  of  this  Note,  Maker  hereby
unconditionally  promises to pay, for value received, to the order of Lender the
principal  sum of forty  one  thousand  one  hundred  twenty  five  ($41,125.00)
dollars.

SECTION  1.02 - ANNUAL  INTEREST  RATE:  Subject to the terms of this Note,  the
principle amount of this note shall be paid with interest thereon at the rate of
six percent  (6%) per year  (computed  on the basis of a 360-day  year of twelve
30-day months) compounded annually.

SECTION 1.03 - EFFECTIVE  DATE:  The Effective Date shall mean the date on which
the funds  subject to this Note are released to Maker,  or the date this Note is
executed, whichever is later.

SECTION 1.04 - TERM: The term of this note shall be for eighteen months from the
Effective Date, with the principle and interest being paid in full at the end of
the term.

SECTION 1.05 - REPAYMENT  SCHEDULE:  The principal and interest shall be paid in
lawful money of the United States at the address of the Lender denoted below, or
at  such  other  place  the  Lender  shall  designate  in  writing,  by  monthly
installments in the amount of three thousand six hundred forty eight dollars and
fifty  cents  ($3,648.50)  each,  due and  payable  on the  first of each  month
beginning  on the  first  day of the  seventh  month  from the date this note is
executed  or the date on which the funds  subject to this Note are  released  to
Maker, whichever is later.

SECTION 1.06 - PREPAYMENT:  Maker hereby  reserves the right to prepay this Note
in whole or in part without any premium or penalty.  All payments beyond the due
and payable  installments shall be applied first to accrued interest and then to
principle.

<PAGE>

SECTION 1.07 - DEFAULT:  If the  undersigned  Maker of this Note defaults in its
obligations  as set forth  above,  the Lender must give  written  notice of such
default  to the  Maker at the  below  address.  Upon  receiving  such  notice of
default,  if not cured by Maker within 10 calendar days, the entire note becomes
immediately due and payable.

ARTICLE II:  MISCELLANEOUS

SECTION 2.01 - ARBITRATION: Any controversy,  claim, or breach arising out of or
relating  to this  Note,  at the  discretion  of  Maker,  shall  be  settled  by
arbitration in accordance  with the  Arbitration  Rules of American  Arbitration
Association  in  Phoenix,  Arizona.  Judgment  upon the  award  rendered  by the
arbitrators may be entered in any court having jurisdiction  thereof. Each party
shall have the right of  discovery  as set forth in the  Federal  Rules of Civil
Procedure.

SECTION 2.02 - GOVERNING  LAW: This Note is governed by the laws of the State of
Arizona and venue shall be in County of Maricopa.

SECTION 2.03 - JURISDICTION:  Lender hereby submits to personal  jurisdiction in
the State of Arizona.

SECTION 2.04 - NOT USED.

SECTION  2.05 - NOTICE:  All  notices  shall be in  writing  and shall be deemed
delivered in person when delivered by courier,  overnight  delivery service,  or
mailed  postage  prepaid  by  Certified  or  Registered  Mail -- Return  Receipt
Requested -- to the person and address designated in this Note.

SECTION 2.06 - NOT USED.

SECTION 2.07 - NOT USED.

SECTION 2.08 - SEVERABILITY:  If any provision of this Note is rendered invalid,
the remaining provisions shall remain in full force and effect.

SECTION 2.09 - ASSURANCES:  Each party hereby  represents  and warrants that all
representations,  warranties,  recitals,  statements and information provided to
each other under this Note are true,  correct,  and  accurate to the best of its
knowledge.

     IN WITNESS  WHEREOF,  the Maker has executed  this Note as of this 29th day
April, 2002.

MAKER National Scientific Corporation

ADDRESS:
14455 N. Hayden Rd. Ste 202
Scottsdale, AZ.  85260

/s/ Sam H. Carr
-----------------------------------------------------
Signature/Title of Corporate Officer,     CFO
                                      ---------------

                                        2
<PAGE>

LENDER:  L. L. "Lou" Ross

ADDRESS:

-----------------------------------------------------

-----------------------------------------------------

/s/ Lou L. Ross
-----------------------------------------------------
Signature/Title of Lou L. Ross

                                        3

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