Nautilus 2009 Annual Report Download - page 97

G. “Permitted Retail Channel” shall mean bona fide sales to Independent Bike Dealers and Specialty Retailers that are not Affiliates
of Buyer. Specialty Retailers shall mean retailers selling fitness equipment and fitness accessories and the sales of fitness equipment
and accessories constitutes at least 90% of the retailers total sales. By way of example only, and not of limitation, Specialty Retailers
does not include Dick’s Sporting Goods, Cabelas, Sports Authority, or other retailers having greater than 10% sales of non-fitness
equipment.
H. “Channel” shall mean the Commercial Channel and the Permitted Retail Channel.
I. “Gross Sales” shall mean the total invoice price of Indoor Cycles and Accessories, and all related charges of any type whether
separately invoiced (including, but not limited to, installation charges, shipping charges, taxes, and delivery charges) and whether the
Indoor Cycles and/or Accessories are sold, leased or otherwise distributed.
J. “Copyrighted Works” shall mean tangible works of authorship previously used by Nautilus, and/or previously created for use by
Nautilus, in connection with marketing and sales of Indoor Cycles in the Commercial Channel, such as, but not limited to, marketing
collateral, photos, brochures, artwork, decals, packaging, manuals, guides, instructions, console software, and for which Nautilus
owns or has exclusive rights to relevant copyrights, regardless of whether the copyright for any such Copyrighted Works are
registered with any copyright office.
K. “Indoor Cycle” shall mean a stationary exercise machine that simulates bicycling and is part of the larger class of Stationary
Cycles which consists of Indoor Cycles, Upright Cycles, and Recumbent Cycles. While there is overlap of these product categories,
particularly between Indoor Cycles and Upright Cycles, Indoor Cycles are distinguished from Upright Cycles by exposed frames and
flywheels, adjustable handlebar positioning, lacking motors, and lacking consoles that control the flywheel resistance. As a business
model, Indoor Cycles are generally positioned for use in group settings at fitness centers and health clubs.
pg. 2