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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
/x/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended: December31, 2000
OR
// TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 000-25867
DIRECT FOCUS, INC.
(Exact name of registrant as specified in its charter)
Washington
(State or other jurisdiction of incorporation
or organization)
94-3002667
(I.R.S. Employer Identification No.)
1400 NE 136 th Avenue, Vancouver, WA
(Address of principal executive offices)
98684
(Zip Code)
Registrant's telephone number, including area code: 360-694-7722
Securities registered pursuant to Section12(b) of the Act: None
Securities registered pursuant to Section12(g) of the Act: Common Stock, without par value
Indicate by check mark whether the Registrant (1)has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12months (or for such shorter period that the Registrant was required to file such reports), and (2)has been subject
to such filing requirements for the past 90days:Yes/x/No//
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in PartIII of this
Form10-K, or any amendment to this Form10-K.//
The aggregate market value of the voting stock held by non-affiliates of the Registrant is $543,460,314 as of February28, 2001 based upon the
last sales price as reported by the Nasdaq National Market System.
The number of shares outstanding of the Registrant's Common Stock as of February28, 2001 was 23,744,414 shares.
The Index to Exhibits appears on page 45 of this document. This document consists of 89 pages.
Documents Incorporated by Reference
The Registrant has incorporated by reference into PartIII of this Form10-K portions of its Proxy Statement for its 2001 Annual Meeting of
Stockholders.
2002. EDGAR Online, Inc.

Table of contents

  • Page 1
    ... File Number: 000-25867 DIRECT FOCUS, INC. (Exact name of registrant as specified in its charter) Washington (State or other jurisdiction of incorporation or organization) 1400 NE 136 thAvenue, Vancouver, WA (Address of principal executive offices) 94-3002667 (I.R.S. Employer Identification...

  • Page 2
    DIRECT FOCUS,INC. 2000 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS Page PART I Item 1. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 10. Item 11. Item 12. Item 13. Item 14. Signatures Business Properties Legal Proceedings Submission of Matters to a Vote of Security ...

  • Page 3
    ...on a limited product line; • Market acceptance of our existing and future products; • Growth management challenges; • Our limited experience in marketing Nautilus Sleep Systems; • A decline in consumer spending due to unfavorable economic conditions; • Government regulatory action; • Our...

  • Page 4
    ..., print media, response mailings and the Internet. Our principal and most successful direct-marketed product to date has been our Bowflex line of home fitness equipment. We also offer a line of premium quality air sleep systems under the name "Nautilus Sleep Systems," which we began direct marketing...

  • Page 5
    ...home gyms and a new line of Nautilus free weight home gym equipment which we introduced in the summer of 2000, as well as any other Nautilus-branded home exercise products we may introduce in 2001. We market and sell our Nautilus commercial fitness equipment domestically through a direct sales force...

  • Page 6
    ... site development and management personnel. Our immediate Internet-related goals include improving the capabilities at our Bowflex and Nautilus Sleep System web sites. In 1999, we used our web sites to generate interest in our products, but limited the information we provided to potential customers...

  • Page 7
    ... and Order Processing. We operate our own customer service call center in Vancouver, Washington, which operates 16-17hours per day and receives and processes all infomercial-generated and customer service-related inquiries regarding our Bowflex products and Nautilus Sleep Systems. We have developed...

  • Page 8
    ... our Nautilus retail products business. Each member of the management team has significant industry experience and a history of sales and marketing success. Our retail product line is marketed through specialty fitness, sporting good and other retailers domestically through a direct sales force and...

  • Page 9
    ... club owners better serve their customers. The product line offers a sleeker look, tougher components and increased versatility. This new free weight gear can be coupled with the Nautilus selectorized equipment circuit to give facility managers a complete strength gym to serve all strength fitness...

  • Page 10
    ... mattresses. We currently offer four models of our Nautilus Sleep System: • The Ultimate Premier Series is our top-of-the-line Nautilus Sleep System. It features dual patent pending interlocking variable support chambers that permit users to maintain separate firmness settings on each side of the...

  • Page 11
    ...human body throughout an exercise. Our key objective is to produce products that minimize the stress on users' skeletal systems and connective tissues and maximize the safety and efficiency of each workout. In late 2000, the Nautilus Nitro line was introduced after extensive research and development...

  • Page 12
    ... Retail Fitness Products and Accessories We have developed a line of Nautilus retail strength training fitness equipment and hand-held fitness accessories. Current products include free weight home gym equipment, selectorized weight stack home gyms and a variety of hand held fitness accessories...

  • Page 13
    ... of our business are price, quality, brand name recognition, product innovation and customer service. We compete directly with a large number of companies that manufacture, market and distribute home fitness equipment, and with the many health clubs that offer exercise and recreational facilities...

  • Page 14
    ... equipment, the Nautilus NITRO was developed especially to meet the needs of commercial customers such as hotels and fitness centers with limited floor space. In addition to being compact, Nautilus NITRO has competitive price points and a universal design that looks good in a variety of settings...

  • Page 15
    ... hold four patents relating to our Bowflex home fitness equipment; • We have applied for one patent relating to our Nautilus Sleep Systems; • We have obtained United States trademark protection for various names associated with our products, including "Bowflex," "Nautilus," "Power Rod," "Bowflex...

  • Page 16
    ... Bowflex equipment, Nautilus Sleep Systems and Nautilus retail fitness products and accessories from this 93,332 square foot facility. This lease expires November30, 2002. The aggregate base rent is approximately $27,066 per month, and is subject to an annual cost of living increase of 3.5%. In 2000...

  • Page 17
    ... purchase a building in Washington. We also used approximately $4.3million of the net proceeds for working capital purposes, including increased direct marketing expenditures and increases in inventory and accounts receivable balances due to the growth of our business. Item 6. Selected Consolidated...

  • Page 18
    ... (except per share amounts) 1996 1997 1998 1999 2000 Statement of Operations Data Net Sales+ Cost of sales+ Gross profit Operating expenses: Selling and marketing General and administrative Royalties Litigation settlement Total operating expenses Operating income Other income (expense) Interest...

  • Page 19
    ...net sales in 2000. Net sales within our commercial and retail product segment increased by 28.6% over prior year levels and accounted for $25.8million, or 11.5% of our net sales. Sales growth in 2000 primarily resulted from expanded direct marketing of our Bowflex and Nautilus Sleep Systems products...

  • Page 20
    ...of net sales, as we: • Continue to expand our Bowflex direct marketing campaign; • Expand the direct marketing campaign for our Nautilus Sleep Systems; • Integrate the marketing and distribution infrastructure for our Nautilus line of commercial fitness equipment; and 19 2002. EDGAR Online...

  • Page 21
    • Expand marketing for our home fitness equipment products and fitness accessories under the Nautilus brand name. General and Administrative General and administrative expenses grew to $8.8million in 2000 from $4.2million in 1999, an increase of 107.8%. As a percentage of net sales, general and ...

  • Page 22
    ...business accounted for $1.3million of the increase in general and administrative expenses, due primarily to increased staffing levels in our accounting and information systems departments necessitated by our continued growth and the implementation of our new information system. Commercial and retail...

  • Page 23
    ...2000. The information for each of these quarters is unaudited and has been prepared on the same basis as the audited financial statements appearing elsewhere in this Annual Report on Form10-K. In the opinion of management...38 .37 + Net sales reflects the adoption of EITF Consensus 00-... settlement ...

  • Page 24
    ...land and a building in Vancouver, Washington. These activities resulted in a $41.5million, or 116% increase in our cash and cash equivalents during 2000. We anticipate our working capital requirements will increase as a result of growing our Nautilus commercial and retail fitness operations. We also...

  • Page 25
    ... and Supplementary Financial Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Pag e Direct Focus, Inc. Consolidated Financial Statements Independent Auditors' Report Consolidated Balance Sheets as of December 31, 1999 and 2000 Consolidated Statements of Income for the three years ended December 31...

  • Page 26
    ... financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as...

  • Page 27
    ... Trade receivables (less allowance for doubtful accounts of: 1999, $304,727 and 2000, $352,279) Inventories Prepaid expenses and other current assets Current deferred tax asset Total current assets PROPERTY, PLANT AND EQUIPMENT, NET OTHER ASSETS TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY...

  • Page 28
    DIRECT FOCUS,INC. CONSOLIDATED STATEMENTS OF INCOME Three years ended December31, 2000 1998 1999 2000 NET SALES COST OF SALES Gross profit EXPENSES: Selling and marketing General and administrative Royalties Litigation settlement Total...consolidated financial statements. 27 2002. EDGAR Online, Inc.

  • Page 29
    DIRECT FOCUS,INC. CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY For the three years ended December31, 2000 Common Stock Retained Earnings Shares Amount Total BALANCES, JANUARY 1, 1998 Options exercised Tax benefit of exercise...notes to consolidated financial statements 28 2002. EDGAR Online, Inc.

  • Page 30
    ... ACTIVITIES: Additions to property, plant and equipment Proceeds from sale of property, plant and equip. Additions to other assets Acquisition cost of Nautilus Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments under capital lease obligations Proceeds from...

  • Page 31
    ...the Internet. The Company's principal direct segment products are the Bowflex line of home fitness equipment and a line of premium quality sleep systems (Nautilus Sleep Systems). As a result of the acquisition in January1999 of Nautilus International,Inc., the Company added a second business segment...

  • Page 32
    ...upholstery and padded items, and a one-year warranty on all other parts. Revenue Recognition Revenue from product sales is generally recognized at the time of shipment. Revenue is recognized upon installation for the Nautilus commercial equipment, if the Company's truck fleet is used for delivery of...

  • Page 33
    ...through a variety of direct marketing channels. The Bowflex line of fitness equipment and the Nautilus Sleep Systems are the principal products in the Company's direct products segment. The other operating segment is the commercial and retail products line which includes products and operations that...

  • Page 34
    ... the net assets of Nautilus International,Inc. ("Nautilus"). Nautilus was a manufacturer and distributor of commercial fitness equipment and, to a limited extent, retail fitness equipment and accessories. The acquisition was accounted for under the purchase method of accounting and, accordingly, the...

  • Page 35
    ... 2000 Finished goods Work in process Parts and components $ $ 4,682,659 $ 1,141,803 3,343,092 9,167,554 $ 8,093,919 1,160,647 3,398,551 12,653,117 6.PROPERTY, PLANT AND EQUIPMENT Details of property, plant and equipment are summarized as follows at December31: Estimated Useful Life (in years...

  • Page 36
    Property, plant and equipment, net $ 10,644,838 $ 16,668,884 34 2002. EDGAR Online, Inc.

  • Page 37
    ... leases its Vancouver, Washington call center facility under an operating lease which expires April30, 2002. The lease commitment is subject to an annual rent adjustment based upon changes in the consumer price index, limited to a 6.0% annual change. The agreement provides for an annual cancellation...

  • Page 38
    ... summarizes information about stock options outstanding as of December31, 2000: Options Outstanding Range of Exercise Prices Number Outstanding Average Remaining Contractual Life (Years) Weighted Average Exercise Price Options Exercisable Number of Shares Exercisable Weighted Average Exercise Price...

  • Page 39
    ... of these tax benefits is credited to common stock. The provision for (benefit from) income taxes consists of the following for the three years ended December31, 2000: 1998 1999 2000 Current: Federal State Total Current Deferred: Federal State Total Deferred Total Provision $ 6,608,100 $ - 6,608...

  • Page 40
    ...,243 12.STOCK REPURCHASE PROGRAM Four times during fiscal 2000, the Board of Directors authorized the expenditure of up to $8million to purchase shares of Direct Focus,Inc. common stock in open market transactions. During the year ended December31, 2000, the Company repurchased a total of 278,353...

  • Page 41
    This settlement did not affect the ongoing direct marketing campaign for the Company's Bowflex home fitness equipment. Additionally, in the normal course of business, the Company is a party to various other legal claims, actions and complaints. Although it is not possible to predict with certainty ...

  • Page 42
    PART III Item 10. Directors and Executive Officers of the Registrant The Information required by this item is included under the captions "Election of Directors," "Executive Officers" and "Section16(a) Beneficial Ownership Reporting Compliance," respectively, in the Company's Proxy Statement for its...

  • Page 43
    ... Accounts Three years ended December 31, 2000 (in thousands) Description Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period Allowance for doubtful accounts: 1998 1999 2000 Sales returns and allowances: 1998 1999 2000 Warranty reserves 1998 1999 2000...

  • Page 44
    ... Agreement dated February23, 2000 between Direct Focus,Inc. and Household Bank(SB),N.A. 10.13 Lease Agreement, dated July19, 1999, between Direct Focus,Inc. and Las Vegas Motor Speedway,LLC.-Incorporated by reference to Exhibit10.12 of the Company's Annual Report on Form10-K for the fiscal year...

  • Page 45
    24.3 Power of Attorney for Paul F. Little 24.4 Power of Attorney for Roger J. Sharp 24.5 Power of Attorney for Roland E. "Sandy" Wheeler (b)Reports on Form8-K No reports on Form8-K were filed during the quarter ended December31, 2000. 43 2002. EDGAR Online, Inc.

  • Page 46
    ... be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 28, 2001 DIRECTFOCUS,INC. By: /s/ BRIAN R. COOK, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant...

  • Page 47
    ... of Certain Beneficial Owners and Management Item 13. Certain Relationships and Related Transactions PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K DIRECT FOCUS, INC. Schedule II Valuation and Qualifying Accounts Three years ended December 31, 2000 (in thousands...

  • Page 48
    2002. EDGAR Online, Inc.

  • Page 49
    ... Agreement dated December10, 1999 ("Borrowing Agreement"), in the maximum principal amount of $5,000,000.00, executed by DIRECT FOCUS CORPORATION ("Borrower") in favor of Bank of America, N.A. ("Bank"). Terms used in this Modification and defined in the Borrowing Agreement shall have the meaning...

  • Page 50
    Bank: BANK OF AMERICA, N.A. By: /s/ DANIEL J. RILER Title: Vice President Borrower: DIRECT FOCUS CORPORATION By: /s/ ROD W. RICE Title: Chief Financial Officer 46 2002. EDGAR Online, Inc.

  • Page 51
    ... applicable law, rule, regulation or judicial, governmental or administrative order, decree, ruling, opinion or interpretation. d." Application " means an application for an Account under the Program. e." Authorization " means permission from Household to make a Card Sale. f." Authorization Center...

  • Page 52
    ... services sold by Merchant in the ordinary course of Merchant's business to consumers for individual, family, personal or household use. p." Internet Application " means any Application for a Card which is received by Household on-line via the Household web site. q." Mailed-In Application " means...

  • Page 53
    ...that Household is the owner of the Cardholder list and that Household and its Affiliates may use such list to solicit Cardholders for credit card products offered by Household and/or any of its Affiliates or other types of accounts or financial products or insurance services offered by Household and...

  • Page 54
    .... In no event shall Household be liable for incidental or consequential damages. e. Funding. Funding of Sales Slips by Household to Merchant shall be made to Merchant's account at a bank designated by Merchant. Household will use its best efforts to make such payments on the first Business Day after...

  • Page 55
    ... (5)Business Days after receipt by Merchant and approval by Household of the Telephone or Mail Order Application; and (vi)Merchant represents and warrants that in connection with telephone solicitations, it has adopted such policies and procedures to ensure compliance with all applicable federal and...

  • Page 56
    ...vii)Send a copy of the approved Telephone or Mailed-In Application to Household within five (5)Business Days after the date the Goods are shipped to the Cardholder or the Sales Slip funded by Household. h.With respect to Internet Applications, Merchant shall: (i)Include a link on its web site to the...

  • Page 57
    ...)Enter the Card Sale into the Terminal and, if applicable, Household's approval code; and (ix)Deliver a true and completed copy of the Sales Slip to the Cardholder at the time of delivery of the Goods. j Credit Slips. If Goods are returned, any Card Sale or services are terminated or canceled, or...

  • Page 58
    ... of the Effective Date and throughout the term of this Agreement the following: a.That each Card Sale will arise out of a bona fide sale of Goods by Merchant and will not involve the use of the Card for any other purpose. b.That each Card Sale will be to a consumer for personal, family, or household...

  • Page 59
    ...Account; or (2)the Sales Slip, Application/Cardholder Agreement or Card Sale is fraudulent or is subject to any claim of illegality, cancellation, rescission, avoidance or offset for any reason whatsoever, including, without limitation, negligence, fraud, misrepresentation, or dishonesty on the part...

  • Page 60
    ... such time and in such manner as Household or any law or regulation may require, but in no event less than two (2)years after the date Merchant presents each transaction data to Household, and Merchant shall make and retain for at least seven (7)years legible copies of such actual paper Sales Slips...

  • Page 61
    ... services in connection with each Card Sale pursuant to standard customs and trade practices and any applicable manufacturer's warranties, and to provide such repairs, service and replacements and take such other corrective action as may be required by law. Section11.Cardholder Account Information...

  • Page 62
    ..., or its employees or agents with respect to the Card, a Card Sale, an Account or any other matters relating to the Program; (iv)any claim, dispute, complaint or setoff by a consumer made in good faith resulting from a violation by Household, with respect to the Application/Agreement, of the...

  • Page 63
    ... Card Sales, Sales Slips, credits and other data made through the date of termination. Household is not liable to Merchant for any direct damages that Merchant may suffer as a result of Household's termination of this Agreement as provided in this Agreement. In the event this Agreement is terminated...

  • Page 64
    ..., unavailability of energy resources, system or communication failure, delay in transportation, fires, strikes, riots or war. In the event of any force majeure occurrence, the disabled party shall use its best efforts to meet its obligations as set forth in this Agreement. Section18.Limited License...

  • Page 65
    ...its rights or obligations hereunder to any Affiliate of Household at any time. In the event of such assignment, the assignee shall have the same rights and remedies as Household under this Agreement. Section24.Nonwaiver and Extensions. Household shall not by any act, delay, omission, or otherwise be...

  • Page 66
    ... this Agreement as of the date set forth above. BANK: HOUSEHOLD BANK (SB), N.A. By: Print Name: Title: ATTESTED OR WITNESSED By: Print Name: Title: MERCHANT: DIRECT FOCUS,INC. By: Print Name: Title: ATTESTED OR WITNESSED By: Print Name: Title: Merchant's Federal Tax ID #'s: 62 2002. EDGAR Online...

  • Page 67
    ...INC., a Texas corporation ("Seller") DIRECT FOCUS,INC., a Washington corporation ("Purchaser") Property Address: 1400 N.E. 136th Avenue Vancouver, Washington 63 TABLE OF CONTENTS Page ARTICLE 1. PURCHASE AND SALE 1.1 Purchase and Sale 1.2 Excluded Items ARTICLE 2. PURCHASE PRICE 2.1 Purchase Price...

  • Page 68
    ...of Income and Expenses 7.6 Post-Closing Adjustments ARTICLE 8. CONDITIONS 8.1 Purchaser's Conditions 8.2 Seller's Conditions ARTICLE 9. AGENCY DISCLOSURE 9.1 Brokerage Commissions ARTICLE 10. TERMINATION AND REMEDIES 10.1 Purchaser's Defaults 10.2 Seller's Defaults ARTICLE 11. MISCELLANEOUS 11.1 IRC...

  • Page 69
    ... Effect Attorneys' Fees Separability Further Action Right to Possession Agreement Date Applicable Law Waiver of Jury Trial Construction of Agreement Escrow Instructions Termination of Offer 1 8 1 8 1 9 1 9 1 9 1 9 1 9 1 9 1 9 1 9 2 0 2 0 2 0 2 1 2 1 2 1 2 1 2 1 2 1 65 2002. EDGAR Online, Inc.

  • Page 70
    ...("Seller") and Direct Focus,Inc., a Washington corporation. ARTICLE 1. PURCHASE AND SALE 1.1 Purchase and Sale. Subject to the terms and conditions of this Agreement, Seller hereby agrees to sell and convey to Purchaser, and Purchaser hereby agrees to buy and pay for through an escrow to close on or...

  • Page 71
    66 2002. EDGAR Online, Inc.

  • Page 72
    ... into an interest-bearing account maintained by the Title Company (using a state or federal FDIC insured bank) to be invested at the direction of Purchaser and the amount in that account, including interest thereon, shall be credited against the Purchase Price if and when Closing occurs or shall be...

  • Page 73
    ...the Closing. In the event Purchaser terminates this Agreement pursuant to this section3.3.1, any cancellation fee or other costs of the Title Company shall be borne by Purchaser. In the event Purchaser does not provide Seller written notice of its objections, if any, on or prior to the expiration of...

  • Page 74
    ... to Closing. Purchaser shall have no right to terminate this Agreement on the basis of this Feasibility Contingency if Seller timely provides Purchaser notice of its intent to cure or remedy all of the items set forth in any Conditional Waiver Notice. In the event Purchaser fails to timely provide...

  • Page 75
    ... Seller to perform its own independent test. In the event Purchaser elects to proceed with a Phase II, and subject to extension as set forth in Section7.1 of this Agreement, Purchaser shall complete the Phase II within twenty (20)days of the Phase II Notice, and shall provide Seller a copy of the...

  • Page 76
    ... Purchaser in writing at least 30days prior to closing, Seller shall terminate or cause to e terminated, as of the Closing Date, any and all agreements affecting the Property including without limitation any maintenance, management, security, service, supply, snow removal and other similar contracts...

  • Page 77
    ... do business and is in good standing in the jurisdiction where the Property is located unless Seller has been advised by legal counsel that such qualification is not required by applicable state law; (b) Seller has full power, authority and legal right to execute, deliver and perform this Agreement...

  • Page 78
    72 2002. EDGAR Online, Inc.

  • Page 79
    ... of applicable zoning, land use, building, construction, subdivision or other local, state and federal laws, ordinances and regulations, (ii)any breach of any existing covenant, condition, restriction or easement affecting the Property, and (iii)any encroachment on the Property; (m) To the best of...

  • Page 80
    ... prior to Closing be, duly qualified or licensed to do business and is in good standing in the jurisdiction where the Property is located unless Purchaser has been advised by legal counsel that such qualification is not required by applicable state law; (b) Purchaser has full power, authority and...

  • Page 81
    OTHERWISE HEREIN, AND SELLER SHALL NOT BE IN 74 2002. EDGAR Online, Inc.

  • Page 82
    ...ten (10)business days from the date Purchaser received the completed Phase II Environment Audit report. The date and hour of Closing are referred to as the "Closing Date." Each party hereto agrees to undertake all actions and procedures reasonably necessary as when and required by this Agreement and...

  • Page 83
    ... the premium for the standard owner's Title Policy required by Section6.1, (ii) the cost of providing to Purchaser all information to be reviewed and approved by Purchaser pursuant to the terms hereof, (iii) one-half of the escrow fees or similar charges of the Title Company, 2002. EDGAR Online, Inc...

  • Page 84
    (iv) any transfer taxes, deed or documentary stamps, document taxes, mortgage taxes, intangible taxes and similar taxes and charges with respect to the transaction, (v) the cost of obtaining any other item to be delivered to Purchaser at Closing, and 76 2002. EDGAR Online, Inc.

  • Page 85
    ... elects to purchase such an extended policy of title insurance, (iii) one-half of the escrow fees or similar charges of the Title Company, and (iv) all other costs and expenses that may be allocated to Purchaser pursuant to the terms of this Agreement. (c) All other expenses incurred by Seller...

  • Page 86
    ... Seller will receive the benefit of all income and will pay all expenses of the Property prior to the Closing Date and Purchaser will receive all income and will pay all expenses of the property after the Closing Date to the extent required by Section7.5. If Purchaser receives any bill or invoice...

  • Page 87
    ... in default hereunder in the event Purchaser fails, for a reason other than Seller's default hereunder, to timely meet, comply with, or perform any covenant, agreement or obligation on its part required within the time limits and in the manner required in this Agreement, or there shall have occurred...

  • Page 88
    ... deemed to be in default hereunder by virtue of the occurrence of one or more of the events specified in 10.1(a), Seller may elect in its discretion to: (i) pursue any remedy available at law or equity for such Purchaser default including without limitation specific performance; or 78 2002. EDGAR...

  • Page 89
    ...timely meet, comply with, or perform any covenant, agreement or obligation on its part required within the time limits and in the manner required in this Agreement, or there shall have occurred a material breach of any representation or warranty made by Seller. (b) Purchaser's Remedies. In the event...

  • Page 90
    ... the event of loss or damage to the Property which occurs on or prior to the Closing Date, which will cost $10,000 or more to repair or cure, of if any material part of the Property has been permanently taken by condemnation or eminent domain proceedings (or deed in lieu thereof), or if any means of...

  • Page 91
    ... portion of the Property following Closing as provided above, Seller agrees to defend, indemnify and hold Purchaser harmless from any loss, damage, injury, claims, actions, costs, and expenses, including attorneys' fees, arising from or relating to the activities of Seller, its employees agents and...

  • Page 92
    ... Seller's Address for Notice: One Tyco Park Exeter, NH 09833 PURCHASE DIRECT FOCUS,INC. R a Washington corporation By: /s/ Brian R. Cook Its: President Purchaser's Address for Notice: 2200 N.E. 65th Avenue Vancouver, WA 98661 SELLER Date: 06/07/2000 Date: 06/02/2000 82 2002. EDGAR Online, Inc...

  • Page 93
    ... Fitness Products,Inc., a Washington corporation Nautilus Human Performance Systems,Inc., a Virginia corporation Nautilus,Inc., a Washington corporation Direct Focus Sales Corporation, a Washington corporation Direct Focus FSC,Ltd., a Barbados corporation DFI Properties, LLC, a Virginia limited...

  • Page 94
    ...true and lawful attorney-in-fact and agent, for him and his name, place and stead, in any and all capacities, to sign the Form10-K of Direct Focus,Inc., a Washington corporation, for the fiscal year ended December31, 2000, and any amendments or supplements thereto, and to file this Power of Attorney...

  • Page 95
    ...true and lawful attorney-in-fact and agent, for him and his name, place and stead, in any and all capacities, to sign the Form10-K of Direct Focus,Inc., a Washington corporation, for the fiscal year ended December31, 2000, and any amendments or supplements thereto, and to file this Power of Attorney...

  • Page 96
    ...true and lawful attorney-in-fact and agent, for him and his name, place and stead, in any and all capacities, to sign the Form10-K of Direct Focus,Inc., a Washington corporation, for the fiscal year ended December31, 2000, and any amendments or supplements thereto, and to file this Power of Attorney...

  • Page 97
    ...true and lawful attorney-in-fact and agent, for him and his name, place and stead, in any and all capacities, to sign the Form10-K of Direct Focus,Inc., a Washington corporation, for the fiscal year ended December31, 2000, and any amendments or supplements thereto, and to file this Power of Attorney...

  • Page 98
    ...true and lawful attorney-in-fact and agent, for him and his name, place and stead, in any and all capacities, to sign the Form10-K of Direct Focus,Inc., a Washington corporation, for the fiscal year ended December31, 2000, and any amendments or supplements thereto, and to file this Power of Attorney...

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    QuickLinks POWER OF ATTORNEY ROLAND E. "SANDY" WHEELER 2002. EDGAR Online, Inc.

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    End of Filing 2002. EDGAR Online, Inc.