Nautilus 2009 Annual Report Download - page 327

Exhibit 10.31
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of March 8, 2010, is by and between NAUTILUS, INC., a Washington corporation (the
“Debtor”), and BANK OF THE WEST (“the Secured Party”).
WHEREAS, the Debtor has entered into a credit agreement dated as of the date hereof (as amended and in effect from time to time,
the “Credit Agreement”), with the Secured Party, pursuant to which the Secured Party, subject to the terms and conditions contained therein, is
to make loans or otherwise to extend credit to the Debtor; and
WHEREAS, it is a condition precedent to the Secured Party’
s making any loans or otherwise extending credit to the Debtor under the
Credit Agreement that the Debtor execute and deliver to the Secured Party a security agreement in substantially the form hereof; and
WHEREAS, the Debtor wishes to grant a security interest in favor of the Secured Party as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions . All capitalized terms used herein without definitions shall have the respective meanings provided therefor in the
Credit Agreement. The term “State,” as used herein, means the State of Washington. All terms defined in the Uniform Commercial Code of the
State and used herein shall have the same definitions herein as specified therein. However, if a term is defined in Article 9 of the Uniform
Commercial Code of the State differently than in another Article of the Uniform Commercial Code of the State, the term has the meaning
specified in Article 9.
2. Grant of Security Interest . The Debtor hereby grants to the Secured Party, to secure the payment and performance in full of all of
the Obligations, a security interest to the Secured Party in the following properties, assets and rights of the Debtor, wherever located, whether
now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same being hereinafter called the “Collateral”): all
personal and fixture property of every kind and nature including without limitation all goods (including inventory, equipment and any accessions
thereto), instruments (including promissory notes), documents, accounts (including health-care-insurance receivables), chattel paper (whether
tangible or electronic), deposit accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort
claims, securities and all other investment property, supporting obligations, any other contract rights or rights to the payment of money,
insurance claims and proceeds, and all general intangibles (including all payment intangibles). The Secured Party acknowledges that the
attachment of its security interest in any additional commercial tort claim as original collateral is subject to the Debtor’s compliance with
Section 4.6. Notwithstanding anything in this Section to the contrary, the following shall not constitute “Collateral” hereunder: (a) equipment
acquired after the Closing Date pursuant to Capital Leases in compliance with the Credit Agreement to the extent that the agreements with
respect thereto prohibit the inclusion of
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