sports marketing plan

Anonymous
timer Asked: May 8th, 2018
account_balance_wallet $10

Question description

You will prepare a marketing plan for a sporting event or organization. You will apply all theories, skills, and strategies presented in class in preparing the plan. I have attached an example - Planet Fitness. You cannot use this example - no exceptions!


Students will review concepts and theories of Sports Marketing.

FRANCHISE DISCLOSURE DOCUMENT Pla-Fit Franchise, LLC (a New Hampshire Limited Liability Company) 26 Fox Run Road Newington, NH 03801 (603) 750-0001 www.planetfitness.com PLANET FITNESS® businesses are fitness training facilities offering exercise machines and free weights, fitness training services, tanning services, related services and ancillary goods. We offer for sale PLANET FITNESS franchises for new locations and for existing fitness facilities that want to convert to a PLANET FITNESS. The total investment necessary to begin operation of a single PLANET FITNESS® facility ranges from $824,200 to $2,881,500, if you finance your equipment, which most franchisees do. This includes $47,300 to $271,000 that must be paid to the franchisor or its affiliate. If you choose to purchase your equipment, the total investment necessary to begin operation of a single PLANET FITNESS® facility ranges from $1,219,500 to $3,725,000. This includes $383,200 to $880,000 that must be paid to the franchisor or its affiliate. These estimated initial investment ranges also apply to the first location that you develop under the Area Development Agreement (plus the Area Development Fee you pay at the time you sign the Area Development Agreement). If you sign an Area Development Agreement, you must develop multiple PLANET FITNESS® facilities, and you will pay an Area Development Fee of $10,000 per planned location in addition to the then-current initial franchise fees due for each location at the time the Franchise Agreement for that location is executed. This Disclosure Document summarizes certain provisions of your franchise agreement and other information in plain English. Read this Disclosure Document and all accompanying agreements carefully. You must receive this Disclosure Document at least 14 calendar days before you sign a binding agreement with, or make any payment to, us or an affiliate in connection with the proposed franchise sale. Note, however, that no government agency has verified the information contained in this document. You may wish to receive your Disclosure Document in another format that is more convenient for you. To discuss the availability of disclosures in different formats, contact our Director of Franchise Admissions at 26 Fox Run Road, Newington, NH 03801 and (603) 750-0001. The terms of your contract will govern your franchise relationship. Don’t rely on the Disclosure Document alone to understand your contract. Read all of your contract carefully. Show your contract and this Disclosure Document to an advisor, like a lawyer or accountant. Buying a franchise is a complex investment. The information in this Disclosure Document can help you make up your mind. More information on franchising, such as “A Consumer’s Guide to Buying a Franchise,” which can help you understand how to use this Disclosure Document is available from the Federal Trade Commission. You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue NW, Washington, DC 20580. You can also visit the FTC’s home page at www.ftc.gov for additional information on franchising. There may also be laws on franchising in your state. Ask your state agencies about them. Issuance date: April 17, 2014 FDD – 2014 14877235.8 04/17/14 i PLANET FITNESS® STATE COVER PAGE Your state may have a franchise law that requires a franchisor to register or file with a state franchise administrator before offering or selling in your state. REGISTRATION OF A FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT. Call the state franchise administrator listed in Exhibit A for information about the franchisor, about other franchisors, or about franchising in your state. MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW. Please consider the following RISK FACTORS before you buy this franchise. 1. THE FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE DISPUTES WITH US BY MEDIATION, ARBITRATION OR LITIGATION IN THE CITY WHERE OUR CORPORATE HEADQUARTERS IS LOCATED (CURRENTLY, NEWINGTON, NEW HAMPSHIRE). OUT-OF-STATE MEDIATION, ARBITRATION OR LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST YOU MORE TO MEDIATE, ARBITRATE OR LITIGATE WITH US IN THAT LOCATION THAN IN YOUR OWN STATE. 2. THE FRANCHISE AGREEMENT REQUIRES THAT NEW HAMPSHIRE LAW GOVERNS THE AGREEMENT, AND THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS LOCAL LAW. YOU MAY WANT TO COMPARE THESE LAWS. 3. THERE MAY BE OTHER RISKS CONCERNING THIS FRANCHISE. Effective Date: See the next page for state effective dates. FDD – 2014 14877235.8 04/17/14 ii PLANET FITNESS® STATE EFFECTIVE DATES This Franchise Disclosure Document is registered, on file or exempt from registration in the following states having franchise registration and disclosure laws, with the following effective dates: California: Hawaii: Illinois: Indiana: Michigan: Minnesota: New York: North Dakota: Rhode Island: South Dakota: Virginia Washington: Wisconsin: FDD – 2014 14877235.8 04/17/14 December 23, 2013 (exempt) April 17, 2014 (exempt) April 17, 2014 (exempt) iii PLANET FITNESS® TABLE OF CONTENTS ITEM PAGE ITEM 1 THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES................................................................................................................1 ITEM 2 BUSINESS EXPERIENCE..........................................................................................4 ITEM 3 LITIGATION ...............................................................................................................7 ITEM 4 BANKRUPTCY.........................................................................................................10 ITEM 5 INITIAL FEES ...........................................................................................................11 ITEM 6 OTHER FEES ............................................................................................................12 ITEM 7 ESTIMATED INITIAL INVESTMENT ...................................................................17 ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES ....................22 ITEM 9 FRANCHISEE’S OBLIGATIONS ............................................................................27 ITEM 10 FINANCING ..............................................................................................................28 ITEM 11 FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING ....................................................................................28 ITEM 12 TERRITORY..............................................................................................................39 ITEM 13 TRADEMARKS ........................................................................................................41 ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION ....................44 ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS .................................................................................45 ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL.............................46 ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION...........................................................................................................47 ITEM 18 PUBLIC FIGURES ....................................................................................................51 ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS..........................................51 ITEM 20 OUTLETS AND FRANCHISEE INFORMATION..................................................58 ITEM 21 FINANCIAL STATEMENTS ...................................................................................66 ITEM 22 CONTRACTS ............................................................................................................67 ITEM 23 RECEIPTS..................................................................................................................67 EXHIBITS: A. B. C. D. E. F. G. H. I. J. K. List of State Agencies and Agents to Receive Service of Process Nondisclosure & Non-Use Agreement Franchise Agreement (including Addenda and Appendices) Area Development Agreement (including Addenda and Appendices) Financial Statements List of Franchise and Corporate Locations State Addenda Form of General Release Visionary License Agreement, Radiant Software Agreement, Purchase Order for Visionary Products and Software, and Merchant Agreements Table of Contents to Operations Manual Receipts FDD – 2014 14877235.8 04/17/14 iv PLANET FITNESS® ITEM 1 THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES This Disclosure Document provides certain information about Pla-Fit Franchise, LLC and the terms on which we currently offer franchises in the United States (as required by federal regulations and certain state laws). This Disclosure Document cannot and does not provide all the information a prospective franchisee should consider in making a decision on whether to enter into a Franchise Agreement. Prospective franchisees should make an independent investigation before making a decision to enter into a Franchise Agreement and should consult with their own advisors, like an attorney or an accountant. Unless the context otherwise requires, all references to “we,” “us”, or “our” refer to PlaFit Franchise, LLC and all references to “you,” or “your” refer to the person who is granted the right to operate a PLANET FITNESS® franchise under a Franchise Agreement. If you are a corporation, limited liability company, partnership or any other type of legal entity, the provisions of the Franchise Agreement also apply to your owners by virtue of the requirement that some or all your owners personally guarantee, and be personally bound by, your obligations under the Franchise Agreement. The Franchisor, Its Parents, Predecessors and Affiliates We are a limited liability company formed under New Hampshire law on January 27, 2003. We do business under our corporate name and under the PLANET FITNESS name. We began offering franchises for the operation of PLANET FITNESS businesses in February 2003. Although we do not currently operate any corporate PLANET FITNESS locations, we may do so in the future and we have affiliates who operate PLANET FITNESS locations. Throughout this disclosure document, we refer to those PLANET FITNESS locations operated by our affiliates as “company-owned” or “corporate” locations. Our principal business address currently is 26 Fox Run Road, Newington, NH 03801. Our agents to receive service of process are identified in attached Exhibit “A”. We have no predecessor. Our parent, Planet Fitness Holdings, LLC (“Holdings”), was organized in the State of New Hampshire on March 16, 2007, under the name “Pla-Fit Ridgmar, LLC.” On March 7, 2008, our parent changed its name to “Planet Fitness Holdings, LLC.” Holding’s principal business address is the same as ours. On October 23, 2012, Holdings’ owners entered into a membership interest purchase agreement (“Sale Agreement”) to sell all their ownership interests in Holdings, including a controlling interest in Pla-Fit Franchise, LLC, to TSG PF Investment, LLC. (“TSG”) Under the agreement, Holdings’ owners agreed to contribute their Holdings’ membership interests to Pla-Fit Holdings LLC (“Topco”), which was to be formed by Holdings’ owners, in exchange for the same classes and amounts of interests in Topco, and Topco agreed to contribute all its Holdings’ membership interests to Planet Intermediate LLC (“Intermediate”), which was also to be formed by Holdings’ owners and which was to be a wholly-owned subsidiary of Topco. Under the Sale Agreement TSG agreed to purchase Holdings’ owners’ membership interests in Topco, after the Intermediate contribution and satisfaction of various closing conditions. This transaction closed and became effective on November 8, 2012. We may require you to conduct business with our affiliate Planet Fitness Equipment, LLC, a New Hampshire limited liability company formed in May 2005 (“PF Equipment”) as it FDD – 2014 14877235.8 04/17/14 DD - 1 PLANET FITNESS® currently is an approved supplier of fitness equipment. See Item 8 for more information on approved suppliers. As disclosed in Item 13, our affiliate PFIP, LLC, a New Hampshire limited liability company formed in December 2000 (“PFIP”) owns the Marks and licenses them to us. PF Equipment and PFIP all have the same principal business address as we have. The Franchise A PLANET FITNESS franchise offers fitness training facilities, including exercise machines and free weights, fitness training services, tanning services, related services and ancillary related merchandise as we may authorize periodically. The PLANET FITNESS franchisee must provide these services on a 24 hour a day basis unless prohibited by law or authorized by us in writing. You must offer for sale all services, products, and merchandise we designate, unless you obtain our approval not to offer certain services, products, or merchandise. You must sign the form of Nondisclosure & Non-Use Agreement attached as Exhibit “B” before we engage in substantive discussions with you about the franchise opportunity. You will sign our then-current form of franchise agreement (the “Franchise Agreement”) for each PLANET FITNESS franchise you open regardless of whether you are opening a new facility or converting an existing facility as noted in the following paragraph. Each Franchise Agreement will grant you the right to own and operate a single PLANET FITNESS franchise at an agreedupon location. A copy of our current form of Franchise Agreement is attached to this Disclosure Document as Exhibit “C”. For an existing fitness training facility converting to a PLANET FITNESS franchise, we may negotiate with the prospective franchisee to reach mutually acceptable terms of a franchise agreement. Typically, the existing fitness training facility will have an established location and may have equipment at the location that we determine to be acceptable to our system standards. In this instance, the initial investment in an existing location may be less than for a new location as the staff may require less training, and the costs for any required leasehold improvements or equipment typically will be less due to the already existing location or existing equipment at the location. In some cases, the existing fitness training facility will require significant investment to satisfy our system standards, in which case your initial investment will increase. In some cases the location of an existing fitness training facility seeking to convert to PLANET FITNESS may never be approved based on certain factors such as parking or other limitations. Except where otherwise noted, the disclosures in this Disclosure Document apply to conversion franchises as well as initial franchises. Periodically, we may sell and franchise one or more of our company-owned PLANET FITNESS locations. In these transactions, we negotiate with the prospective franchisee to reach mutually acceptable terms of a sale agreement and any lease or sublease of the real estate. If you purchase a company-owned location, you must sign a Franchise Agreement though the terms may vary from the standards terms of our Franchise Agreement attached to this Disclosure Document. In addition, from time to time we may jointly own PLANET FITNESS locations with third parties. If you qualify, we may grant you area development rights according to the form of Area Development Agreement included in this Disclosure Document as Exhibit “D” (“Area FDD – 2014 14877235.8 04/17/14 DD-2 PLANET FITNESS® Development Agreement”). You and we may enter into an Area Development Agreement for the development of a prescribed number of PLANET FITNESS facilities in a designated geographic area called the “Development Area.” Under an Area Development Agreement, you must develop multiple PLANET FITNESS facilities in the Development Area within a given period of time, depending on population of the area, its market potential and other factors described in Item 12. You must sign a separate, then-current Franchise Agreement for each PLANET FITNESS facility you open under the Area Development Agreement and will sign the Franchise Agreement for your first PLANET FITNESS facility at the time you sign the Area Development Agreement. If (1) you or your affiliates are a party to a prior Franchise Agreement or Area Development Agreement with us and (2) you want to sign a new Franchise Agreement with us (not under an existing Area Development Agreement with us) or a new Area Development Agreement with us, we may require you to sign a general release in the form attached hereto as Exhibit “H”, releasing any claims arising from your prior agreements, as a condition of granting new franchise rights or development rights. The Market and Competition The services and ancillary merchandise offered by a PLANET FITNESS franchise are intended primarily for the general public. We have designed our services and ancillary merchandise to appeal to a health conscious consumer who appreciates a low pressure fitness environment. You will have to compete with other businesses offering similar products, including other fitness facilities, gyms, health related establishments, and sports complexes. Your competition may include other businesses that we or our affiliates may franchise or operate, as noted in Item 12. The services and ancillary merchandise our franchises sell are well recognized by consumers and widely available from other sources. The market for our franchisees’ goods and services is well developed. Typically, our services and ancillary merchandise are sold to individuals and selling is not seasonal. The fitness industry is a highly competitive and developed market, which can be affected significantly by many factors, including changes in local, regional or national economic conditions, changes in consumer spending, and increases in the number of, and particular locations of competing facilities. Various factors can adversely affect the fitness industry, including inflation, increases in labor and energy costs, the availability and cost of suitable sites, fluctuating interest and insurance rates, state and local regulations and licensing requirements and the availability of an adequate number of hourly-paid employees. In addition, other fitness chains with greater financial resources have similar concepts. License and Permits You should consider that certain aspects of the fitness industry are regulated by federal, state and local laws, rules and ordinances. Some states limit the length and terms of your membership contract, provide customers rights to terminate their contract and require you to obtain a bond to protect pre-paid membership fees you collect. In some states, you may be required to escrow or post a bond for any pre-opening membership fees you collect. In some states, you may be required to post specific notices to your members regarding activities conducted in your business, including but not limited to tanning. It is your sole responsibility to investigate these laws, and we recommend that you do so before you sign a Franchise Agreement FDD – 2014 14877235.8 04/17/14 DD-3 PLANET FITNESS® or Area Development Agreement with us. In addition, if you are constructing a new fitness facility and rely on the proceeds of the membership to build and equip the facility, the offer and sale of those memberships could be considered the sale of “securities” under those laws and require registration. You will also need to comply with laws, regulations and ordinances applicable to businesses generally, like the Americans with Disabilities Act, federal and state wage and hour laws, and the Occupation, Health and Safety Act. It is your sole responsibility to comply with all applicable laws and obtain and keep in force all necessary licenses and permits required by public authorities. ITEM 2 BUSINESS EXPERIENCE Christopher J. Rondeau, President and Chief Executive Officer Christopher Rondeau has served as our President and Chief Executive Officer since January 2013. Prior to this, Mr. Rondeau served as our Chief Operating Officer since January 2003. Dorvin Lively, Chief Financial Officer Dorvin Lively has served as our Chief Financial Officer since July 2013. Mr. Lively served as Chief Financial Officer, Chief Administrative Officer, and Executive Vice President of RadioShack Corp. from August 2011 to July 2013 in Fort Worth, Texas. He also served as Interim Chief Executive Officer of RadioShack Corp. from September 2012 to February 2013 in Fort Worth, Texas. Mr. Lively served as the Chief Financial Officer and Senior Vice President of Ace Hardware Corp. from March 2008 to July 2011 in Oak Brook, Illinois. Richard Moore, Chief Administrative Officer, Secretary, and General Counsel Richard Moore has served as Chief Administrative Officer, Secretary, and General Counsel since January 2013. He joined us in July 2012 as General Counsel. From September 2007 to July 2012 Mr. Moore was a lawyer at the law firm of Ropes & Gray LLP, in Boston, Massachusetts. Brian Belmont, Executive Vice President of Operations and Development Brian Belmont has served as our Executive Vice President of Operations and Development since April 2013. From July 2012 to March 2013, Mr. Belmont was self-employed as a consultant for various franchise companies in Denver, Colorado. From October 2009 to July 2012, he served as Chief Development Officer, Executive Vice President, and President of Restaurant Realty at Quizno’s Sub in Denver, Colorado. From May 2009 to October 2009, he served as the Chief Operating Officer of Triple Crown Investments, an affiliate of Quizno’s Sub, in Denver Colorado. From June 2008 to May 2009, he served as Chief Operating Officer of FDD – 2014 14877235.8 04/17/14 DD-4 PLANET FITNESS® Camp Bow Wow in Boulder, Colorado. Prior to that, from May 2000 to May 2008, he served in number operations and development roles at Quizno’s Sub. William Mulleady, Vice President of Franchising William Mulleady has served as our Vice President of Franchising since September 2007. From January 2006 to September 2007 he worked in franchise development for us. Kevin Fitzgerald, Director of Real Estate and Construction Kevin Fitzgerald has served as our Director of Real Estate and Construction since November 2013. From April 2012 to November 2013, he served as a Senior Project Manager with the international architectural firm of Stan-Tec in Phoenix, Arizona. Prior to Stan-Tec, he was the Director of Development for McDonalds in Vancouver, British Columbia from October 2010 to March 2012, covering western Canada. From 2005 to September 2010 he served as Vice President of Development for Quiznos in Denver, Colorado. Bonnie Monahan, Corporate Treasurer Bonnie Monahan has served as our Corporate Treasurer since April 2013. From November 2011 to November 2012 Bonnie served as Chief Financial Officer at Margaritas Mexican Restaurant Group in Portsmouth, New Hampshire. From November 2006 to November 2011 Bonnie served as the Corporate Treasurer at Dunkin’ Brands, Inc. in Canton, Massachusetts. Jamie Medeiros, Vice President of Marketing Jamie Medeiros has served as our Vice President of Marketing since January 2013. From January 2009 to May 2010 Jamie served as a Marketing Coordinator. From May 2010 to January 2013 she served as a Marketing Director. Dawn Sullivan, Director of Marketing Dawn Sullivan has served as our Director of Marketing since May 2010. From January 2009 to May 2010 Dawn served as a Marketing Coordinator. Connor Boyle, Legal Director, Franchise Support Connor Boyle has served as our Legal Director, Franchise Support since January 2013. From January 2010 to September 2011 and from September 2012 to December 2012 he was an associate at the law firm of Ropes & Gray LLP, in Boston, Massachusetts. From September 2011 to September 2012 he clerked for the Honorable Steven J. McAuliffe, Federal District Court for the District of New Hampshire. From September 2006 to May 2009 he was a law student at Northeastern University School of Law, in Boston, Massachusetts. FDD – 2014 14877235.8 04/17/14 DD-5 PLANET FITNESS® Lydia Fogarty, Manager of Franchise Finance Lydia Fogarty has been our Manager of Franchise Finance since April 2012. From June 2010 through March 2012, Ms. Fogarty was our Human Resource Manager. From August 2005 through January 2010, Ms. Fogarty worked in the finance division at Direct Capital Corporation in Portsmouth, New Hampshire. Candace Couture, Franchise Sales Manager Candace Couture has been our Franchise Sales Manager since June 2013. She joined Planet Fitness in 1999. From June 2006 to June 2013, she was our Director of Franchise Admissions. Brian Kunkel, Manager, East Brian Kunkel has served as our Manager for the East region since June 2013. He joined Planet Fitness in 2009. From May 2009 to June 2013, he served as our Director of Real Estate. From June 2008 through May 2009, Mr. Kunkel worked in Portsmouth, New Hampshire as an Advisor with the national commercial real estate services firm Grubb & Ellis. Mike Mullen, Brand Excellence Manager Mike Mullen has served as our Brand Excellence Manager since May 2010. From January 2009 to May 2010 he served as a club manager. Chris Holmes, Northeast Regional Operations Manager Chris Holmes has served as our Northeast Regional Operations Manager since June 2013. From January 2009 to July 2011 Chris served as a club manager. From July 2011 to June 2013 he served as a Regional Manager for Corporate Clubs. Lisa Cote, West Operations Manager Lisa Cote has served as our West Regional Operations Manager since June 2013. From January 2009 to May 2009 she served as a club manager. From May 2009 to June 2013 she served as a Franchise Development Manager. FDD – 2014 14877235.8 04/17/14 DD-6 PLANET FITNESS® ITEM 3 LITIGATION Pending matters: 1. World Gym, Inc. et al. v. Pla-Fit Franchise, LLC et al., Civil Action No. 1:12-cv11620-DJC, United States District Court for the District of Massachusetts. On August 30, 2012, Massachusetts-based franchisees, World Gym, Inc. and Patricko, Inc. (“Plaintiffs”) filed a civil complaint against Pla-Fit Franchise, LLC and Twin Oaks Software Development, Inc. (“Twin Oaks”), an unaffiliated software company that processes billing files for health and fitness clubs. The Plaintiffs alleged claims against Pla-Fit Franchise, LLC for intentional misrepresentation, negligent misrepresentation, breach of contract, breach of the covenant of good faith and fair dealing, conversion, and for unfair and deceptive practices under the Massachusetts’ consumer protection law (collectively, “Claims”). In July 2013, the federal court dismissed the complaint and ordered that Plaintiffs bring separate arbitrations against Pla-Fit Franchise for the claims they asserted in the lawsuit if they wished to further pursue those claims. Plaintiffs sought reconsideration of the court’s decision, and in December 2013 the federal court again ordered them to arbitrate. To date, Plaintiffs have not filed an arbitration. This matter is related to the matter that follows as no. 2 below. 2. Pla-Fit Franchise, LLC v. World Gym, Inc. et al, Civil Action No. 1:13-cv-00489-PB, United States District Court for the District of New Hampshire. In December 2013, we terminated the franchise rights of World Gym, Inc. and Patricko, Inc. which operated Planet Fitness facilities in Tewksbury and Somerville, Massachusetts. We subsequently sought an injunction to enforce the post-termination provisions of the franchise agreements and protect our trademarks. The former franchisees counterclaimed in January 2014, asserting the same claims they asserted in the litigation they instituted in 2012 in Massachusetts (see disclosure no. 1 above), and an additional claim for wrongful termination of their franchises. As of the date of this Franchise Disclosure Document, our motion to compel the former franchisees to arbitrate their counterclaim is pending before the court. 3. Conway v. Planet Fitness Holdings, LLC et al., Civil Action No. 2013-756, Superior Court, Essex County, Massachusetts. On May 10, 2013, our former CFO, Jayne Conway (“Conway”), filed a civil complaint for an unspecified sum against us and our parent, Planet Fitness Holdings, LLC (collectively, “Planet Fitness”), and certain owners and officers of Planet Fitness, including Michael Grondahl (individually, and as a trustee of the Michael A. Grondahl Revocable Trust of 2006), Marc Grondahl (individually, and as a trustee of the Marc Grondahl Revocable Trust of 2006), Christopher Rondeau (individually, and as a trustee of the Christopher J. Rondeau Revocable Trust of 2006), and Richard Moore (collectively, “Defendants”). In her Complaint, Conway alleges that Defendants withheld information, and/or made FDD – 2014 14877235.8 04/17/14 DD-7 PLANET FITNESS® misrepresentations to her, about the status and value of her ownership interests in Planet Fitness in the course of negotiating and finalizing her separation and settlement agreement with Planet Fitness. Conway seeks a declaration that she owned certain stock interests at the time of the 2012 acquisition by TSG PF Investments, LLC, and asks the court to impose a constructive trust over the unspecified sums she believes she is owed. In addition, Conway asserts claims for fraud, violation of the New Hampshire Uniform Securities Act, negligent misrepresentation, breach of fiduciary duties and unjust enrichment. Defendants have filed a motion to dismiss. As of the date of this Franchise Disclosure Document, Defendants’ motion to dismiss is pending before the court. Defendants intend to vigorously defend this matter. Concluded matters: 1. In October 2008 and March 2009, the franchisor and various affiliated parties were named respondents and defendants in the following two related litigation matters (the “Related Litigation Matters”): MAXR, LLC et al. v. Pla-Fit Franchise, LLC, et al., American Arbitration Association (Case No. 11-114-Y-02112-08, Boston, MA, filed October 31, 2008) (the “MAXR Arbitration”). On October 31, 2008, the plaintiffs and former Maryland-based franchisees of ours, MAXR, LLC, and HD Fit, Inc., and their common owners Diana Hamilton-Dutt and Hans Dutt (“Claimants”), filed a demand for arbitration (“Demand”) against Pla-Fit Franchise, LLC and PFIP, LLC, seeking $10 million in compensatory damages, rescission of the Franchise Agreements, dissolution of applicable non-competition agreements, and other unspecified damages. In the Demand, Claimants alleged claims for fraudulent misrepresentation, negligent misrepresentation, breach of contract, promissory estoppel, unjust enrichment, breach of the covenant of good faith and fair dealing, unfair competition, violation of New Hampshire consumer protection law, tortious interference with contractual relations and prospective economic advantage, defamation, civil conspiracy, violation of the Sherman Act, and violation of the Maryland and New Hampshire antitrust laws (“Claims”). We denied the Claims and vigorously defended against them. In an effort to end the arbitration and without admitting any wrongdoing, we reached a settlement with the plaintiffs in November 2009. The terms of the settlement agreement related to the MAXR Arbitration are described below under “Global Settlement Agreement.” HD Fit, Inc. et al. v. Pla-Fit Franchise, LLC et al., Civil Action No. 13-C-09-76764, Circuit Court for Howard County, Maryland (filed March 16, 2009) (the “HD Fit Litigation”). On March 16, 2009, Maryland-based franchisees, HD-Fit, Inc., MAXR, LLC, and their common owners Diana Hamilton-Dutt and Hans Dutt (“Plaintiffs”), filed a civil complaint (“Complaint”) against Pla-Fit Franchise, LLC, PFIP, LLC, Pla-Fit Health, LLC, Christopher J. Rondeau, Michael Grondahl, Ben Midgely, Joseph Freschi, and Candace Talon (“Franchisor Parties” or “we”), as well as an existing Planet Fitness® franchisee, the franchisee’s affiliated entity and the entities’ common owners (Brick Bodies, Inc., Brick Bodies Fitness Services, Inc., C. Victor Brick and Lynne G. Brick, collectively “Brick Parties”). As to the Franchisor Parties, the Plaintiffs alleged that we violated the Maryland Franchise Registration and Disclosure Law (the FDD – 2014 14877235.8 04/17/14 DD-8 PLANET FITNESS® “Maryland Act”) for (1) allegedly offering a franchise to Plaintiffs prior to registering its franchise with the Maryland Securities Commissioner, and (2) allegedly making untrue or misleading statements to Plaintiffs concerning aspects of the parties’ contractual relationship, including exclusive territories, expansion opportunities, enforcement of contractual noncompetition covenants and relocation rights (collectively “Claims”). Plaintiffs sought $10 million in compensatory damages, dissolution of the applicable non-competition agreements in the Franchise Agreements, reasonable attorneys’ fees and other unspecified damages against the Franchisor Parties. We denied the Claims and vigorously defended against them. In an effort to end the arbitration and without admitting any wrongdoing, we reached a settlement with the plaintiffs in November 2009. The terms of the settlement agreement related to the HD Fit Litigation are described below under “Global Settlement Agreement.” The Global Settlement Agreement: In November 2009, the parties to the MAXR Arbitration and HD Fit Litigation reached a global settlement of all claims involved in the Related Litigation Matters and executed a single settlement agreement (the “Global Settlement Agreement”). Pursuant to the Global Settlement Agreement, and in addition to other nonmaterial terms, Pla-Fit Franchise, LLC agreed to: (1) pay $50,000 to the MAXR Arbitration claimants (“MAXR Claimants”) and $50,000 to the HD Fit Litigation plaintiffs (“HD Plaintiffs”); (2) claim no proprietary interest in the membership lists or members of the MAXR Claimants or HD Plaintiffs; and (3) waive the right to enforce all post-termination non-compete obligations and rights to purchase the former franchised locations as set forth in the applicable franchise agreement. In exchange, the MAXR Claimants and HD Plaintiffs agreed to de-brand their former PLANET FITNESS locations by February 28, 2010 and cease all use of the PLANET FITNESS Marks and Confidential Information. The Global Settlement Agreement further provided that the MAXR Claimants’ and HD Plaintiffs’ underlying franchise agreement with Pla-Fit Franchise, LLC would be terminated immediately, with full mutual releases exchanged between the MAXR Claimants and HD Plaintiffs (on the one hand) and the Franchisor Parties on the other hand. 2. From December 2011 through August 2012, Pla-Fit Franchise, LLC, its principals Michael Grondahl, Marc Grondahl and Chris Rondeau and certain of its affiliates were involved in multiple disputes with Jeffrey Innocenti, James Innocenti and Luigi LaVerghetta (referred to as “PFNY claims”). The Grondahls and Rondeau, and the Innocentis and LaVerghetta, were members of PFNY, LLC, the owner and operator through subsidiary entities of approximately 45 Planet Fitness franchises in the greater New York metropolitan area. The PFNY claims resulted in the litigation and arbitration actions described below. In August 2012, as part of a comprehensive settlement agreement among all parties, the PFNY claims were resolved and the below-described actions ended. The specific actions were as follows: Michael Grondahl, Marc Grondahl and Chris Rondeau v. Jeffrey Innocenti, Luigi LaVerghetta and James Innocenti, United States District Court for the District of New Hampshire, Case No. 11-cv-00591-SM. In this December 2011 action, the Grondahls and Rondeau alleged that the Innocentis and LaVerghetta had breached duties owing to them as comembers of PFNY, LLC. In this action, the Innocentis and LaVerghetta filed a motion to compel arbitration against the Grondahls and Rondeau, and Pla-Fit Health, LLC and Pla-Fit FDD – 2014 14877235.8 04/17/14 DD-9 PLANET FITNESS® Holdings, LLC. This action was dismissed with prejudice as part of the parties’ comprehensive settlement agreement. Jeffrey Innocenti, James Innocenti and Luigi LaVerghetta and Michael Grondahl, Marc Grondahl and Chris Rondeau, American Arbitration Association, Case No. 11 180 00547 12. In this March 2012 action, the Innocentis and LaVerghetta asserted that the claims that the Grondahls and Rondeau had asserted in the litigation described in the preceding paragraph raised questions under the PFNY, LLC operating agreement which were subject to mandatory arbitration. This action was dismissed with prejudice as part of the parties’ comprehensive settlement agreement. Pla-Fit Franchise, LLC v. Pelham Bay Fitness Group, LLC, Superior Court, Case No. 218-20120CV-00453, Rockingham County, New Hampshire. In this April 2012 action, Pla-Fit Franchise, LLC sued each franchise operated by the PFNY, LLC to enforce its rights to audit the franchise’s operations. This action was dismissed with prejudice as part of the parties’ comprehensive settlement agreement. The Comprehensive Settlement Agreement: On August 10, 2012, as part of a comprehensive settlement agreement, the parties to these disputes, on their own behalf and on behalf of certain of their affiliates, agreed in summary that PFNY, LLC would redeem the Grondahls’ and Rondeau’s membership interests; that PFNY, LLC and the Innocentis and LaVerghetta would pay the Grondahls and Rondeau $2,250,000 over two (2) years; that certain Area Development Agreements between PFNY, LLC and Pla-Fit Franchise, LLC would be cancelled; that approximately ten (10) Planet Fitness franchises owned by PFNY, LLC would be transferred to the Grondahls and Rondeau or their designee; that franchise agreements for all other Planet Fitness franchises owned by PFNY, LLC would be amended to provide, inter alia, for higher royalty fees; and that the Innocentis and LaVerghetta would execute a new Area Development Agreement for a smaller geographic area than covered by the cancelled Area Development Agreements. Other than these 8 actions, no litigation is required to be disclosed in this Item. ITEM 4 BANKRUPTCY No bankruptcy information is required to be disclosed in this Item. FDD – 2014 14877235.8 04/17/14 DD-10 PLANET FITNESS® ITEM 5 INITIAL FEES You will pay a lump-sum nonrefundable Initial Franchise Fee in the amount of $10,000 when you sign the Franchise Agreement. The Initial Franchise Fee is uniform and nonrefundable. If you acquire rights under our Area Development Program, you will pay an Area Development Fee equal to $10,000 per location to be developed under the Area Development Agreement when you sign the Area Development Agreement. This Area Development Fee is in addition to the then-current Initial Franchise Fee due for each location at the time the Franchise Agreement for that location is executed. You must commit to opening multiple PLANET FITNESS locations as a condition of acquiring area development rights, either yourself or through one or more entities in which you own 51% or more interest. The Area Development Fee is fully earned by us on receipt and is not refundable in whole or in part. In 2013, we collected Area Development Fees that ranged from $10,000 to $390,000. We reserve the right to alter the Initial Franchise Fee and Area Development Fee periodically as business circumstances warrant. We may require you to reimburse us for our reasonable expenses, including the costs of travel, lodging and food incurred in site evaluation for each visit we make at your request. We estimate our reasonable expenses related to site selection will range from $1,000 to $3,000. If we require you to pay these expenses, the amounts are nonrefundable. We encourage you use our designated architect to prepare all architectural plans and drawings (together with project management plans, the “Construction Development Plans”) for your PLANET FITNESS location. You must submit all Construction Development Plans, including design specifications, to us for our approval before starting to develop the Location. In the event that you do not use our designated architect to prepare all architectural plans and drawings for the location, you must pay us a $1,750 Construction Development Plan review fee at the time that you submit the Construction Development Plans for our approval. You currently must lease or purchase fitness equipment from our affiliate PF Equipment prior to opening your business. We estimate the cost of a down payment to be 10 - 30% of the total amount financed; the down payment typically ranges between $37,300 and $261,000. The lease costs are non-refundable. We estimate the cost to purchase equipment prior to opening will range from $373,200 to $870,000. FDD – 2014 14877235.8 04/17/14 DD-11 PLANET FITNESS® Periodically, we may sell or franchise one of our company-owned PLANET FITNESS locations. In these transactions, we will negotiate with the prospective franchisee to reach mutually acceptable terms of a sale agreement and any lease or sublease of the real estate. Depending on the circumstances, the financial and other terms may vary from the standard terms of our Franchise Agreement. ITEM 6 OTHER FEES Type of Fee Royalty (See Note 2) Interest Internet Membership and Balance Payment Administration Fee Refresher Training Workshops FDD – 2014 14877235.8 04/17/14 Amount 5% of the total gross monthly and annual membership fees payable to you via EFT Dues Draft (as described in Note 2) Will vary under the circumstances Due Date Remarks (Note 1) Paid monthly and annually When underlying obligation is paid (See Note 3) Paid monthly 18% (annualized) or the highest contract rate of interest permitted by law, whichever is lower. Paid to us for establishing customer memberships and providing balance payment options for your franchise location through applications submitted to the PLANET FITNESS Internet web site. Set according to our Methods of Operation, presently $5 per membership application or balance payment we process for your franchise location $500 to $1,500. Will As we and you agree Payable for any refresher training vary under the courses for previously trained circumstances. employees that we may require or training for new employees as you may request. The cost of refresher training varies based on the number of people trained and the length of the training. Refresher training is held at our headquarters or a predetermined location. You are responsible for your travel, food and lodging expenses incurred in connection with any refresher training. See Item 11 for more information on Training. DD-12 PLANET FITNESS® Type of Fee Remarks (Note 1) Per Diem Fee $100 to $1,000. Will As we and you agree You must pay Per Diem Fees in vary under the connection with additional or special circumstances. training for your employees that you request. The amount of the Per Diem Fee varies based on the number of people trained, and the length and location of the training. You are also responsible for travel, food, and lodging expenses for our personnel. See Item 11 for more information on Training. Re-Equip Costs $250,000 to $ $760,000 As incurred You must maintain your fitness equipment according to our system standards. This includes replacing your cardio equipment every four years, and replacing your non-cardio equipment every six years. (See Note 4) Remodel Costs $75,000 to $550,000 As incurred You must maintain the franchise premises according to our system standards. This may include substantial remodeling of your premises as frequently as every four years. (See Note 5) Fees to Evaluate Our reasonable costs and Upon receipt of our See Item 8 for more information on and Approve expenses, which bill approved suppliers. Alternative currently are expected to Suppliers range between $1,500 and $5,000, although costs could greatly exceed those amounts depending on the product Insurance Will vary under the As incurred If you fail to obtain the required circumstances; insurance coverage for the franchise, estimated insurance we may obtain coverage for you at premiums for your first your expense. year is $10,000 to $15,000 National 2% of the total gross When the Royalty is See Item 11 for more information on Advertising monthly EFT Dues paid advertising. Fund Fee Draft. Local Advertising Greater of $5,000 per Expended monthly Paid by you to advertisers. See Item Fee month or 7% of the total according to our 11 for more information on gross monthly EFT Dues Methods of advertising. Draft Operation as per your advertising budget FDD – 2014 14877235.8 04/17/14 Amount Due Date DD-13 PLANET FITNESS® Type of Fee Amount Due Date Special Marketing Varies, maximum of 9% Upon demand Programs total gross monthly EFT Dues Draft Auditing Costs Our actual costs, which After inspection or may range from $3,000 audit to $15,000 Franchise Agreement Transfer Fee Relocation Fee $25,000. If the transfer is part of a larger transaction involving or affecting multiple franchised locations, then the greater of (a) $25,000 or (b) $10,000 per franchise. $5,000 Construction $1,750 Development Plan Review Fee Successor Franchise Fee Indemnification Our then-current initial franchise fee; provided that the fee will not exceed $20,000. Will vary under circumstances Prior to or concurrently with transfer Prior to relocation. Upon your submission of your Construction Development Plans for our approval. Concurrently with our granting a successor franchise to you As incurred Costs and Attorney’s Fees Actual costs Reimbursement of our actual costs Inspection & Compliance Reimbursement Actual costs (approximately $1,200) Upon demand FDD – 2014 14877235.8 04/17/14 DD-14 Remarks (Note 1) Paid to us or third parties. The price you pay for Special Marketing Programs may be more than cost. You must reimburse us for our auditing costs if we have to audit you because you fail timely to provide us with required reports. Paid to us in the event you want to transfer the franchise. There is no charge if a transfer does not involve a change in control. Paid to us in the event you want to move the location of your franchise. See Item 11 for additional information on relocation requirements. Paid to us in the event that you do not use our designated architect during development of your franchise. (See Note 6) Upon expiration of the term of the Franchise Agreement, we may grant you a successor franchise subject to certain conditions. You must reimburse us if we are held liable for claims arising out of your franchise operations. Payable if we prevail in any legal dispute with you. You’ll reimburse us for accounting, attorneys’, arbitrators’ and related fees and costs incurred by us. You will reimburse us for our actual costs if, after an inspection of your facility, we determine (in our business judgment) that additional follow-up inspections or assessments are required. PLANET FITNESS® Type of Fee Amount Due Date Cure Period Extension Fee (Franchise Agreement) 2% of the total gross EFT Dues Draft Paid monthly on the day designated as your Monthly Membership Billing Day, as defined in our Franchise Agreement Extension Fee (Area Development Agreement) Variable As arranged Remarks (Note 1) Payable only if you fail to cure a default within the applicable cure period and we agree to extend your cure period, which we may or may not do in our business judgment. The Extension Fee is in addition to all regular ongoing fees you must pay under the Franchise Agreement. Payable only if you fail to open your business in accordance with the applicable Franchise Agreement/Area Development Agreement and we grant your request for an extension. It is our right, but not our obligation, to grant you an extension. If we grant an extension, you must pay estimated daily Royalty and National Marketing Fund Fees from the date you were scheduled to open, according to the Franchise Agreement or Area Development Agreement. The estimated Royalty and National Marketing Fund Fees will be based on the average daily EFT Dues Draft of all franchised businesses in the system during the previous fiscal year, up to a maximum of $375 per day. Notes: Note 1 Unless otherwise noted, all fees are uniformly imposed, are payable to us and are not refundable. With the exception of the Re-Equip Costs and the Extension Fees, all of the above fees are payable by automatic electronic funds withdrawal from your designated bank account. Note 2 Your Royalty payment is currently based on the total gross monthly and annual membership fees for the PLANET FITNESS business that are due and payable to you each month and annually, as applicable, from your members through authorized EFT withdrawals (the “EFT Dues Draft”), regardless of the amount of membership fees you actually collect. The term “total gross monthly and annual membership fees” means the total amount of such fees due and payable to you from your members, exclusive of any federal, state or local tax deductions or offsets. Members generally will pay membership fees by automatic withdrawal from a bank account, credit card or debit card, or other means of payment. We reserve the right, on 60 days’ prior notice to you, to calculate the Royalty with reference FDD – 2014 14877235.8 04/17/14 DD-15 PLANET FITNESS® to the Total Net Membership Revenues of the Business. As more fully defined in the Franchise Agreement, the term “Total Net Membership Revenues” means the total receipts from all membership fees that you receive. You will pay all state and local taxes, including, without limitation, taxes denominated as income or franchise taxes, that may be imposed on us as a result of our receipt or accrual of the Initial Franchise Fee, Area Development Fee, advertising fees, Extension Fee, and other fees that are referenced in the Franchise Agreement and Area Development Agreement, whether assessed against you through withholding or other means or whether paid by us directly. In either case, you will pay to us (and to the appropriate governmental authority) such additional amounts as are necessary to provide us, after taking such taxes into account (including any additional taxes imposed on such additional amounts), with the same amounts that we would have received or accrued had such withholding or other payment, whether by you or by us, not been required. However, if the state where your PLANET FITNESS business is located imposes any such tax, we will reimburse you for the amount of the tax paid by you the first year such tax goes into effect. Note 3 Interest begins from the date any payment is due. Note 4 You must periodically re-equip your facilities pursuant to our plans and specifications as we deem necessary upon inspection. At a minimum, you must replace and update all cardio equipment every four (4) years, and all other exercise equipment every six (6) years. We estimate the costs to re-equip your facility will range from $250,000 to $760,000 every four to six years. This is only an estimate. Your actual costs may be higher or lower depending on the size of your PLANET FITNESS business, the volume and usage of your members, or changes in the market. We will advise you six months prior to requiring any substantial replacement of your cardio equipment or of your other exercise equipment. If the general state of repair, appearance or cleanliness of your franchise, or its fixtures, equipment, furniture, or signs does not meet our standards and if, after notice, you fail or refuse to initiate or maintain a program to complete the required maintenance, we have the right to enter the franchise location and do the maintenance on your behalf and at your expense. Note 5 You must periodically upgrade and/or remodel your physical premises as we deem necessary upon inspection, or otherwise require. However, with the exception of signage, we will not require substantial remodeling more often than every four (4) years during the term of the franchise agreement. We estimate the costs to upgrade and/or remodel your facility will range from $75,000 to $550,000 every four years. Your actual costs may be higher or lower depending on the size and location of your PLANET FITNESS business. We will advise you six months prior to requiring any substantial remodeling. If the general state of repair, appearance or cleanliness of your franchise, or its fixtures, equipment, furniture, or signs does not meet our standards and if, after notice, you fail or refuse to initiate or maintain a program to complete the required maintenance, we FDD – 2014 14877235.8 04/17/14 DD-16 PLANET FITNESS® have the right to enter the franchise location and do the maintenance on your behalf and at your expense. Note 6 We reserve the right to require that you use our designated architect to prepare all architectural plans and drawings (together with project management plans, “Construction Development Plans”) for the PLANET FITNESS business. You must submit all Construction Development Plans, including design specifications, to us for our approval before starting to develop the Location. All final Construction Development Plans are subject to our approval. In the event that you do not use our designated architect to prepare all architectural plans and drawings for the BUSINESS, you must pay a $1,750 Construction Development Plan review fee. ITEM 7 ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT Type of Expenditure Amount Initial Franchise Fee $10,000 (See Note 1) Method of Payment Lump sum Site Selection Costs (See Note 2) Leasehold Improvements (See Note 3) Fitness Equipment (See Note 4) Non-Fitness Equipment (See Note 4) Pre-Sale Marketing (See Note 5) $1,000 - $3,000 Lump sum $450,000 $1,825,000 Varies Exterior Signs $15,000 - $30,000 Varies 14877235.8 04/17/14 Varies $6,600-$335,000 Varies Varies $30,000 Varies As incurred DD-17 To Whom Payment is to be Made Us Us Before commencing Approved suppliers or operations per specifications $37,300-$870,000 Varies Computer System, $10,000 - $17,000 Varies Point of Sale System, and other Supplies (See Note 6) FDD – 2014 When Due When you sign the Franchise Agreement As incurred Your Lender; Approved Suppliers; Our Affiliate Your Lender; Approved Suppliers; Our Affiliate Paid to various media companies and other third parties to promote the opening of your business (See Note 5) Before commencing Approved sign supplier operations Varies Approved suppliers or per specifications PLANET FITNESS® Method of Type of Expenditure Amount Payment Insurance $10,000 -$15,000 Lump sum payment of first year premium for one location Real Estate $0- $57,000 Lump sum Lease Deposits (See Note 7) Other Deposits $700 - $11,000 Lump sum (See Note 8) When you engage the service Professional Fees $2,000 - $25,000 Varies Varies Your Out-of-Pocket Initial Training Expenses Licenses/Bonds (See Note 9) $1,500 - $6,500 Varies Varies $100 - $2,500 Lump sum on Prior to application commencing operations Varies Varies Operating Cash $250,000 (Additional Funds $488,000 Pre-Opening and first six months) (See Note 10) Total (See Note 11) When Due Prior to commencing operations To Whom Payment is to be Made Insurance companies When you sign your Landlord lease Utilities, banks/credit card companies, leased equipment vendors, alarm company, telephone company Accountants, lawyers, etc. Airfare, ground transportation, meals, lodging, etc. Government agencies and bonding companies Payroll, debt services, ongoing pre-sale marketing, and cash to cover miscellaneous day-to-day expenses $824,200$3,725,000 Except as described in Note 10 (Operating Cash/Additional Funds), the expenses in this Item 7 chart are estimates of your initial investment in one location prior to commencing operations. We cannot guarantee that you will not have additional expenses starting the business. Your costs will depend on how closely you follow the PLANET FITNESS system standards, your management skill, experience and business acumen, local economic conditions, the acceptance by local consumers of our approved services, prevailing wage rates, real estate conditions, competition, etc. The estimates for a conversion facility may vary from the estimates in the chart depending on the modifications and equipment required to meet our system standards. Unless otherwise noted, all fees payable to us or our affiliates are non-refundable. Notes: Note 1: FDD – 2014 14877235.8 04/17/14 See Item 5 for more information on the Initial Franchise Fee. If you sign an Area Development Agreement, you must commit to opening multiple PLANET FITNESS locations, and you will pay an Area Development Fee of $10,000 per planned location at the time you sign the Area Development Agreement. This Area Development Fee is in addition to the then-current Initial Franchise Fee for DD-18 PLANET FITNESS® each location that you pay at the time you sign each franchise agreement. See Item 5 for more information on the Area Development Fee. Note 2: We may require you to reimburse us for our reasonable expenses, including the costs of travel, lodging and food, incurred in site evaluation for each visit we make at your request. Note 3: Your leasehold improvement costs may be significantly less if, for example, your landlord provides you with a tenant improvement allowance. Depending on location, desirability of the landlord to rent the property, and other factors, tenant improvement allowances can range from $0 to $600,000. The estimated initial investment does not include real estate beyond the initial lease deposit. We do not require you to acquire real estate. PLANET FITNESS businesses typically are located in strip centers, malls, and free standing locations. Although we do not typically recommend building your own building in which to operate your PLANET FITNESS franchise, in certain instances franchisees that are familiar with the PLANET FITNESS model have decided to build their own building. Building your own building may increase the cost significantly. For example, in 2013 an existing franchisee chose to build his own building and the total cost was slightly over $2,000,000. The cost of purchasing or leasing and developing a site for a PLANET FITNESS franchise will vary considerably depending the location, size, local real estate market and other factors and will depend upon whether you are converting an existing fitness facility to a franchise or are opening a new location. Typically, you will need to lease a building of approximately 15,000 to 24,000 square feet and pay the cost of site work and/or leasehold improvements. Note 4: You must purchase or finance the fitness equipment and other non-fitness equipment (such as televisions, tanning beds, trusses, lockers, interior signage, flooring, fans, and the like) for your location through our approved supplier. Typically, you will finance the equipment and you are responsible for providing financing. We estimate that the cost to make down payments on financed fitness equipment for a new location generally ranges between $37,300 and $261,000. If you choose to purchase rather than finance the required equipment for your location, the cost to purchase the equipment will generally range between $373,200 and $870,000. In addition, we estimate that your cost to make down payments on non-fitness equipment generally ranges between $6,600 and $100,500 with the total estimated cost to purchase the non-fitness equipment ranging between $66,000 and $335,000. The amount of your down payment on equipment that you finance, as well as the purchase price of the equipment (should you choose not to finance), may vary depending on the size of your location and your financing terms. If you are converting an existing facility to a PLANET FITNESS franchise, the cost of the equipment may be less depending on whether the existing equipment (both fitness and non-fitness equipment) meets our standards. FDD – 2014 14877235.8 04/17/14 DD-19 PLANET FITNESS® Note 5: The stated amount is an estimate of the amount you will spend on pre-sale marketing prior to commencing operations. The pre-sale marketing period typically begins no less than 45 days immediately preceding the date that you commence regular operations at your PLANET FITNESS location, and it may be as long as 180 days thereafter (“Pre-Sale Marketing Period”). We will determine the length and start date of the Pre-Sale Marketing Period based upon the location of the BUSINESS, demographics and other factors. Presale marketing expenses will include a variety of marketing, public relations programs, media and advertising materials that we approve. You will conduct your pre-opening marketing efforts from a temporary facility located at or near the site of your future PLANET FITNESS location, as described in Operations Manual. We must grant our acceptance of the proposed physical location of your pre-opening marketing temporary facility. In addition to other standards that we specify in the Operations Manual and as we otherwise may direct in writing, the temporary facility must be clean and in good repair, provide you with good visibility to the public, and display the marks in the form and manner we specify. Possible temporary facilities include, among other things, small retail space or a trailer that is used solely for presale marketing efforts and satisfies the above criteria. Your temporary facility for pre-opening marketing cannot be your home or a residence of any kind. Note 6: You must purchase or lease your Visionary Point of Sale (“POS”) software and hardware (“Visionary Kit”) from Retail Control Systems (“RCS”), as described in Item 11and/or other third-party vendors or us as we may require as set forth in the Methods of Operations. Note 7: The cost of leasing a site for a PLANET FITNESS franchise will vary considerably depending, among other things, upon the location, size, local real estate market and other factors. As noted in Note 4 above, you will typically need to lease a building of approximately 15,000 to 24,000 square feet. The amount of your deposit is heavily dependent on your negotiations with your landlord. Note 8: This estimate is based on the deposits typically paid by our corporate locations. We do not collect this information from our franchisees. Your costs may be lower or higher depending on the size of your PLANET FITNESS location, local market conditions, your business acumen, and various other factors. Note 9: The cost of the licenses and bonds you must acquire may vary significantly depending on the laws that apply in your jurisdiction. Note 10: This estimate includes working capital prior to opening your PLANET FITNESS location and for the first 6 months after you commence regular operations and is calculated based on the operation of our corporate clubs. You will incur additional expenses after the initial period. These figures are estimates based on our and our affiliates’ experience, and your experience may vary depending on whether you finance tenant improvements, your location, and other factors. You may need additional operating capital, or you may need it for a longer period of time. We FDD – 2014 14877235.8 04/17/14 DD-20 PLANET FITNESS® cannot assure you that you will not have additional expenses in starting your franchise location. Note 11: This is an estimate of your initial investment and is based on our estimate of average costs and market conditions prevailing as of the date of this Disclosure Document and is based on our and our affiliates’ experience. We do not permit franchisees to borrow more than 80% of the initial investment for their PLANET FITNESS business. You should review this amount carefully with a business advisor before making any decision to purchase the franchise. You are cautioned to allow for inflation, discretionary expenditures, fluctuating interest rates and other costs of financing and the local market conditions, which can be highly variable and can result in substantial, rapid and unpredictable increases in costs. You must bear any deviation or escalation in costs from the estimates in this Item 7 or estimates we give you in any phase of the development process. Except as otherwise noted, none of these payments are refundable. These payments are only estimates and your costs may be higher, depending on your particular circumstances. You should review these figures carefully with a business advisor, accountant or attorney before making any decision to purchase a franchise. We do not offer any financing for your initial investment or any other items. The availability and terms of financing with third-party lenders will depend on the availability of financing generally, your credit-worthiness, policies of lending institutions concerning the type of business to be operated and other similar factors. If you purchase a company-owned PLANET FITNESS location, the financial and other terms may vary from the standard terms of our Franchise Agreement. Estimated Initial Investment for a Conversion or Company-Owned Location. If you operate an existing fitness facility converting to a PLANET FITNESS franchise, your initial investment typically will be less than the initial investment for a new location, as you may not have to make significant leasehold improvements to your location and you may already have fitness equipment that conforms to our system standards. In some cases, the existing fitness training facility will require significant investment to satisfy our system standards, in which case your initial investment will increase. In addition, if you purchase an existing company-owned PLANET FITNESS location, you may have to make a greater or smaller investment than the estimated initial investment shown above depending on the circumstances, including but not limited to the condition of the facility. The price and terms of payment for these PLANET FITNESS locations will be established by mutual agreement. Any mutual agreement will be incorporated into the Franchise Agreement or other related purchase agreements for the Location. Estimated Initial Investment Under an Area Development Agreement. If you sign an Area Development Agreement, you must commit to opening multiple PLANET FITNESS locations in a Development Area. You will pay an Area Development Fee equal to $10,000 per planned location. The Area Development Fee is in addition to the Initial Franchise Fee for each location you open under the Area Development Agreement. The balance of your initial investment requirements for your first PLANET FITNESS franchise is described FDD – 2014 14877235.8 04/17/14 DD-21 PLANET FITNESS® in the above table. You will incur additional costs and expenses during the term of the Area Development Agreement as you open the remaining number of PLANET FITNESS franchises required under the Area Development Agreement. Those additional costs of development may increase over the term of the Area Development Agreement based on inflation and other economic factors. ITEM 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES To ensure that high and uniform standards of service and quality are maintained in all PLANET FITNESS businesses, you must operate your PLANET FITNESS franchise in conformity with our methods, standards and specifications and you must purchase services, supplies, fixtures, equipment, merchandise, goods, and inventory only from suppliers we have approved. Although you are not required to purchase or lease real estate from us or our affiliates, we must approve your Location (See Item 11). If you lease the premises, the lease must contain the Franchisor Lease Provisions, a copy of which is included as Appendix F to the Franchise Agreement. You must improve and equip the Location in accordance with our thencurrent approved design, specifications and standards. In addition to meeting our design specifications, it is your responsibility to comply with the American with Disabilities Act and all other federal, state and local laws. The Franchise Agreement authorizes you to use the Marks only in the operation of your PLANET FITNESS business and only in connection with the products and services specified by us in writing. The purpose of this requirement is to ensure that all franchisees adhere to the uniformity and quality standards associated with PLANET FITNESS businesses. The fitness equipment, displays, merchandise, uniforms and other products or supplies for your facility must be purchased from us, our approved suppliers or according to our specifications. Approved suppliers and specifications are set forth in our Operations Manual (as described in Item 11) and can be accessed electronically through our franchise management system (“Franchise Management”). Approved suppliers and specifications are determined based on the current needs for operating the franchised business. We evaluate approved suppliers based on price, service, quality, whether commissions are offered and other commercially reasonable benchmarks. The identity of approved suppliers and these specifications may be updated periodically in writing by modifying the appropriate pages of the Operations Manual or otherwise communicating the modification to our franchisees in writing, email being sufficient. In addition, if you purchase or lease real estate for your facility through certain brokers and/or brokerage firms referred or recommended by us or an affiliate, we and our affiliates have the right to receive payments or other consideration based upon a percentage of the broker’s commission due as a result of your purchase or lease of the subject property. Typically, these payments to us or our affiliates will equal up to 20% of the broker’s commission. We reserve the right to limit the number of vendors and suppliers for products, goods, supplies, fixtures and equipment. We also reserve the right to designate a single source of supply for certain products and services. We or an affiliate may be that single source. As of the date of FDD – 2014 14877235.8 04/17/14 DD-22 PLANET FITNESS® this Disclosure Document, our affiliate PF Equipment is the sole supplier of the required fitness equipment (currently, either Life Fitness or Cybex) for PLANET FITNESS franchises. In addition, we, an affiliate or a third-party we designate may be the sole supplier of Special Marketing Programs in which you must participate. For all products and services purchased from us and our affiliates, you must pay the then-current price in effect which may be more than cost. Other sole suppliers include: Spectrum Monthly, LLC (marketing materials); RCS Software (computer system and software); and Fusion Group, LLC (retail merchandise). We may update our list of sole suppliers and approved suppliers as we deem necessary or appropriate. In most cases, we have sole or mandatory suppliers, but in unique circumstances, you may request approval of an alternate supplier. We will have the right to approve or disapprove any supplier, and we may approve or disapprove a supplier in our sole discretion. In evaluating any supplier you propose, we will, subject to reasonable restrictions and conditions to protect our trade secrets and confidential information, disclose to the proposed supplier applicable standards, specifications, processes, and procedures for the item in sufficient detail to enable the proposed supplier to demonstrate fully its capacity and capabilities to supply the items. We may prescribe procedures for the submission of requests for approval and impose obligations on approved suppliers, which will be incorporated in a written license agreement with the supplier. We may obtain from you and/or the approved suppliers reimbursement of our actual costs and expenses incurred in the approval process and on-going monitoring of the supplier’s compliance with our requirements. We do not act as an agent, representative or in any other intermediary or fiduciary capacity for you in our relationship with an alternative supplier you propose and we approve. We have the right to monitor the quality of services provided by approved suppliers in a manner we deem appropriate and may terminate any supplier who does not meet our quality standards and specifications, as may be in effect periodically. Although we cannot guarantee any specific arrangements, we attempt to negotiate purchase arrangements with third-party suppliers (including price terms) for the benefit of PLANET FITNESS businesses. We do not provide material benefits (for example renewal or additional franchises) to a franchisee based on his or her use of designated or approved suppliers. When your franchise is up for renewal or if you apply for an additional franchise, among the factors we consider are your compliance with your Franchise Agreement and support of our programs and policies, which would include compliance with the requirements described in this Item 8. We and our affiliates reserve the right to receive commissions or other consideration from suppliers in connection with your purchase of goods, products and services as described in this Item 8. Most of these payments are calculated as an amount based on products sold. We will retain and use such payments as we deem appropriate or as required by the vendor. We or our affiliates also will derive revenue from items we sell directly to you by charging you more than the cost. You can expect items purchased or leased in accordance with our specifications will represent approximately 98% of total purchases you will make to begin operations of the business and an estimated 19% to 33% of the ongoing costs to operate the business. We are not aware of any purchasing or distribution cooperatives in the PLANET FITNESS system at this time. FDD – 2014 14877235.8 04/17/14 DD-23 PLANET FITNESS® In the year ending December 31, 2013, our affiliate, PF Equipment, had gross revenue from health club equipment purchased or leased by franchise locations, and from marketing credit/commission income PF Equipment received based on franchisee purchases from our other approved suppliers, of approximately $107,800,000, which was approximately 98% of its total 2013 revenue of $110,300,000. In the year ending December 31, 2013, we derived approximately $10,900,000 in marketing credit/commission income based on franchisee purchases from our other approved suppliers, which was approximately 29% of our total 2013 revenue of $37,300,000. In the year ending December 31, 2013, the affiliates that operate our company-owned locations received discounts from PF Equipment with a value of approximately $490,000. For the year ending December 31, 2013, we and our affiliates derived revenue, marketing credit, commission income, or discounts from franchisee purchases from all our approved suppliers in amounts ranging from 4% to 31% of the purchase cost. This information is from our and our affiliate’s internal accounting statements. In addition, if you fail to make any payment when due to a designated supplier, or if we (in our business judgment) determine that it is the most efficient method to remit payment to any supplier, we have the right to act as a pass through by collecting payments (past due, current and future) for the specific product or service and remitting those payments to the supplier, who ultimately provides the product or the service to you. If we act in this pass through capacity, we will collect your vendor payment on the date assigned as your Monthly Membership Billing Day, as defined in the Franchise Agreement (or as we otherwise designate in writing) and remit such payment to the supplier as arranged. Products and services for which we may act as a pass through may include equipment, fixtures, goods, merchandise, inventory, marketing campaigns or materials, lending services, computer hardware and software, supplies, uniforms and other categories of products and services that you may purchase from designated suppliers. Although we do not currently do so, we and our affiliates reserve the right to receive commissions or other consideration for acting as a pass through between you and any supplier. One of our officers owns an indirect interest in PF Equipment, an approved supplier of fitness equipment. Insurance You must procure and maintain in force from an insurance company with an “A” or better rating by AM Best and a Financial Size Rating of “IX” or better: (a) commercial general liability (including completed/operations/product liability) insurance (without tanning exclusion); (b) Special Form property insurance, including fire and extended coverage, vandalism and malicious mischief insurance, for 100% of the replacement value of your PLANET FITNESS franchise and its contents; and (c) any other insurance policies, like business interruption insurance, professional liability insurance, abuse and molestation insurance, tanning insurance, employment practices liability insurance, automobile insurance, unemployment insurance, cyber liability insurance, excess umbrella insurance and worker’s compensation insurance (with a broad form all-states endorsement) as we specify. For any interruption in the operation of the PLANET FITNESS business due to a cyber event, whether or not you have sufficient insurance coverage, you shall continue to pay us, during such period of interruption, continuing royalty fees based on the average monthly royalty fees paid by you during the twelve (12) months immediately preceding the period of interruption. For any FDD – 2014 14877235.8 04/17/14 DD-24 PLANET FITNESS® interruption in the operation of the PLANET FITNESS business for any other reason, you must continue to pay us, during such period of interruption, continuing royalty fees based on the average monthly royalty fees paid by you during the twelve (12) months immediately preceding the period of interruption, if you have business interruption insurance. Your insurance must also cover identity theft and theft of personal information, including the costs of notifying members whose information has been compromised. All insurance policies must: (1) be issued on an “admitted” basis by carriers approved by us; (2) contain the types and minimum amounts of coverage, exclusions and maximum deductibles as we prescribe periodically; (3) name us and our affiliates as additional insureds; (4) provide for 30 days’ prior written notice to us of any material modification, cancellation or expiration of such policy; and (5) include such other provisions as we may require periodically. Excess and Surplus Lines insurance is not permitted for any of the types and amounts of coverages set forth below, as may be modified from time to time. You must furnish us with a Certificate of Insurance annually, upon our request. Set forth below are the types and minimum coverage amounts that we currently typically require for each franchised PLANET FITNESS business per location. If your state requires greater coverage amounts for the categories listed below, you must obtain and maintain coverage as required by your state. COMMERCIAL GENERAL LIABILITY: Each Occurrence General Aggregate Limit: Products/Completed Operations Aggregate Limit: Personal and Advertising Injury Limit: Fire Damage Legal Liability Limit – any one fire $1,000,000 $2,000,000 $2,000,000 $1,000,000 $1,000,000 PROPERTY INSURANCE Business Personal Property Value of personal property Tenant Improvements and Betterments Value of tenant improvements Business Income Coverage 50% of Annual Gross Revenue (2 or more Locations – Coverage written on a blanket basis) CYBER COVERAGE (Includes First Party Liability Coverage, Third Party Liability Coverage, and Notification Expense Coverage) 1 to 5 Locations: $1,000,000 each occurrence (minimum) $1,000,000 aggregate (minimum) 6 to 10 Locations: $2,000,000 each occurrence (minimum) $2,000,000 aggregate (minimum) 11 or more Locations: $3,000,000 each occurrence (minimum) $3,000,000 aggregate (minimum) AUTOMOBILE LIABILITY: FDD – 2014 14877235.8 04/17/14 DD-25 PLANET FITNESS® Bodily Injury and Property Damage Combined Single Limit: Hired and Non-Owned Liability Limit: WORKERS’ COMPENSATION: Workers’ Compensation: Employer’s Liability: $1,000,000 $1,000,000 STATUTORY (with All States Broad Form) $500,000 per employee, bodily injury by disease; $500,000 policy limit, bodily injury by disease; $500,000 per employee, bodily injury by accident. EMPLOYMENT PRACTICES LIABILITY 1 to 5 Locations: $1,000,000 each occurrence (minimum) $1,000,000 aggregate (minimum) 6 to 10 Locations: $2,000,000 each occurrence (minimum) $2,000,000 aggregate (minimum) 11 or more Locations: $3,000,000 each occurrence (minimum) $3,000,000 aggregate (minimum) PROFESSIONAL LIABILITY $1,000,000 each occurrence (minimum) $2,000,000 aggregate (minimum) ABUSE AND MOLESTATION $1,000,000 each occurrence (minimum) $2,000,000 aggregate (minimum) TANNING Policy either silent (no exclusionary language) -Or$1,000,000 each occurrence (minimum) $2,000,000 aggregate (minimum) UMBRELLA LIABILITY (in excess of all other insurance coverage) 1 to 2 Locations: $2,000,000 each occurrence (minimum) $2,000,000 aggregate (minimum) 3 to 10 Locations: $5,000,000 each occurrence (minimum) $5,000,000 aggregate (minimum) 11 to 24 Locations: $10,000,000 each occurrence (minimum) $10,000,000 aggregate (minimum) 25 Locations or more: $15,000,000 each occurrence (minimum) $15,000,000 aggregate (minimum) FDD – 2014 14877235.8 04/17/14 DD-26 PLANET FITNESS® ITEM 9 FRANCHISEE’S OBLIGATIONS This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other Items of this Disclosure Document. a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r. s. t. Article in Franchise Obligation Agreement Site selection and acquisition/lease 4 Pre-opening purchases / leases 4 Site development and other pre4 opening requirements Initial and ongoing training 6 Opening 4 Fees 3.1, 5.1, 5.2, 5.3, 5.4 5.5, 5.6, 5.7, 5.8, 6.2, 6.4.7, 6.6, 9.4, 9.6, 9.9, 10.1, 10.5, 10.6, 10.7, 12.3, 13.3.5, 13.6, 14.1, 16.11.6, 18.3, 19.9, 19.12 Compliance with standards and 6 and 9 policies / Operations Manual Trademarks and proprietary 1,4, 3.2,6, 7, 8, 10, 16 information Restrictions on products/services 4, 6, 7, 8, 9, 10 offered Warranty and customer service 9 and 10.9 requirements Territorial development and sales Not Applicable quotas Ongoing product/service 4,5, 9, and 10 purchases Maintenance, appearance and 3.1, 4, 9.3, 9.4 remodeling requirements Insurance 4.4, 4.8, 9.1, 9.9 Advertising 4.10 and 10 Indemnification 2.3, 7.5, 15.4, 18.4, 18.5 Owner’s participation/ 2.3, 2.4, 6, 9.1 management/staffing Records/reports 4.4, 9.1, 11, 12.3, 15.3, 19.9, 20.1 Inspections/audits 4.4, 4.6, 5.9, 11.3, 12 Transfer 13 FDD – 2014 14877235.8 04/17/14 DD-27 Article in Area Development Agreement 5 Not Applicable. 1 and 2 Disclosure Document Item 7 and 11 7 and 8 6, 7 and 11 4 2 and 7 6,7,10, 16,19.4 6 and 11 11 5 and 6 2, 10, and12 11 5 and 13.1.1 13 and 14 Not Applicable. 8 and 16 Not Applicable. 11 1, 2, and 9 12 Not Applicable. 8 Not Applicable. 6 and7 Not Applicable. Not Applicable. Not Applicable. 6, 7 and 8 6 and 11 6 Not Applicable. 11 and 15 Not Applicable. 6 Not Applicable. 15 and 16 6 and 11 17 PLANET FITNESS® Obligation u. Renewal v. Post-termination obligations w. Non-competition covenants x. Dispute resolution y. Other Article in Franchise Agreement 14.1 16 2.2, 16,5, 16.6, 16.7, 16.9, App. C 19 Not Applicable Article in Area Development Agreement Not Applicable. 10, 13.2, and 14 13 Disclosure Document Item 17 17 17 19-21, and 23 Not Applicable 17 Not Applicable ITEM 10 FINANCING We do not offer, either directly or indirectly, any financing to you. We do not permit franchisees to borrow more than 80% of the initial investment for their PLANET FITNESS business without our prior written consent. We are unable to estimate whether you will be able to obtain financing for any or all of your investment and, if so, the terms of such financing. We do not have any present practice or intent to assign to a third party any instrument executed by you. No contracts or investments contain a waiver of defenses or similar provisions. We do not guarantee your notes, leases or other obligations. We do not offer financing for the Initial Franchise Fee either directly or indirectly. We may, however, refer you to potential sources of financing for various aspects of the Business, including, but not limited to, costs related to build-out and equipment acquisition. Although we do not currently do so, we and our affiliates reserve the right to receive consideration and other payments in the future if you obtain financing from a lender to whom we referred you. ITEM 11 FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING Except as listed below, Pla-Fit Franchise, LLC is not required provide any assistance to you. If you purchase a company-owned location, we will incur similar obligations to you as described in this Item 11. Unless specified otherwise, all references are references to articles or sections of the Franchise Agreement. FDD – 2014 14877235.8 04/17/14 DD-28 PLANET FITNESS® Franchise Agreement Pre-Opening Assistance Before you open your PLANET FITNESS business, we will: 1. Instruct you in Methods of Operation (Article 9); 2. Approve your choice of a location (Article 4.1.). The factors we consider regarding your choice of a location for your PLANET FITNESS franchise include general location and neighborhood, demographics, zoning, traffic patterns, parking, street visibility, overall interior and exterior size and shape, physical characteristics of the existing or future building including neighboring or surrounding co-tenants at a property, and lease terms; 3. Review and approve certain provisions of your lease for your location (Article 4.2.); 4. Provide you with specifications and layouts for your PLANET FITNESS location (Article 4.4.); 5. Provide you with an initial training program (Article 6.1.); 6. Provide you with lists of start-up inventory, furniture, fixtures, software, equipment and supplies (Article 4.7.); 7. Provide you with a pre-sale marketing plan, pursuant to which you must expend $20,000 per 30 days for up to 180 days to promote the Business. Your pre-sale marketing period will begin at least 45 days before you commence regular operations (Article 4.10.). Ongoing Assistance: During the operation of your business, we will: 1. Provide you with refresher training (Article 6.2.); 2. Provide you with general guidance on operating issues concerning the location, system standards, marketing programs, etc. (Article 6.3.); 3. Provide you with Internet and telephone consultation (Article 6.4.); 4. Provide you with wholesaling services from time to time where we may ourselves act as an approved or designated source for products, merchandise, accessories, fixtures, furnishings, equipment, signs, etc. (Article 6.4.); FDD – 2014 14877235.8 04/17/14 DD-29 PLANET FITNESS® 5. Provide you with manufacturing services where we may manufacture, package and ship products, merchandise, accessories, fixtures, furnishings, equipment, signs, etc. to you (Article 6.4.); 6. Provide you with ongoing marketing programs (Article 6.4.); 7. Provide you with meetings, seminars or conventions where we may get together with you and other PLANET FITNESS franchisees for business or social purposes (Article 6.4.); 8. Provide you with research and development regarding Methods of Operation (Article 6.4.); 9. At your request, we may furnish additional guidance and assistance and, in such a case, may charge the per diem fees and charges we establish periodically. If you request, or if we require, additional or special training for your employees, all of the expenses that we incur in connection with this additional or special training, including per diem charges and travel and living expenses for our personnel, will be your responsibility (Article 6.4.). Area Development Agreement Pre-opening assistance (“Initial Services”). Before you begin your area development business, we will identify the geographic area where you will develop PLANET FITNESS BUSINESSES (ADA Article 1). Ongoing Assistance. We do not provide any additional ongoing assistance to you under the Area Development Agreement and have no further obligations to you under the Area Development Agreement. Any ongoing assistance will be provided to you under the Franchise Agreements you enter into for locations in your area. Franchise Site Selection You select the site for your PLANET FITNESS location. We will provide you with our standard site selection criteria or an on-site evaluation of your proposed sites, as we deem appropriate. You must verify to us that your site complies with our site selection criteria. If we do not approve a site you propose, you may propose another site. We do not select or endorse your site. Before you lease or purchase any site for a PLANET FITNESS location, you must submit a complete site information form to us. We will review each site information form and determine whether we approve or object to the site you propose. Factors we deem appropriate include the general location and neighborhood, demographic information, traffic patterns, access, visibility, location of other competing facilities, size, configuration, appearance and other physical characteristics of the site. If we approve the site, we will deliver to you a signed Site Acceptance Form which will be valid for six (6) months, in which time a lease must be executed or property purchased. We will use reasonable efforts to make a site acceptance decision within 30 days after we acknowledge receipt of a complete Site Acceptance Form and any other FDD – 2014 14877235.8 04/17/14 DD-30 PLANET FITNESS® materials we have requested. If you operate an existing fitness facility business, you will already have a site for your PLANET FITNESS franchise location, subject to our approval before you sign a Franchise Agreement with us. Neither our approval of the site nor any information communicated to you regarding our standard site selection criteria for PLANET FITNESS location will constitute a warranty or representation of any kind, express or implied, as to the suitability of the site for a PLANET FITNESS location. Our approval of the proposed site merely signifies that we are willing to grant a franchise for a PLANET FITNESS location at the site. Your PLANET FITNESS location may not be relocated unless you first obtain our written consent and pay a $5,000 relocation fee. We approve a site if it meets our then-current site selection criteria. We estimate the time from the date you sign the Franchise Agreement to the date you open your PLANET FITNESS location to be between six (6) and eleven (11) months. However, this time estimate may vary depending on numerous factors including location, construction schedules and financing. You must sign a lease for a location we approve within six months of your signing the Franchise Agreement. If you and we can’t reasonably agree on a suitable location for your franchise within 6 months of your signing the Franchise Agreement, we may terminate the Franchise Agreement. For all franchise locations, your PLANET FITNESS location must be open and operating within 330 days after you sign the Franchise Agreement or we may terminate the Franchise Agreement and retain your Initial Franchise Fee, unless we have agreed with you to extend the amount of time for you to open the franchise location. Advertising Local Advertising Funds You agree to spend the greater of $5,000 per month or 7% of the total gross monthly EFT Dues Draft of membership fees for your location per month for approved local advertising the PLANET FITNESS business. These amounts spent on local advertising will be designated as Local Advertising Funds (“LAF”). If, in our business judgment you are under-performing or not using the LAF on appropriate media placement, we may collect the LAF from you and administer it on your behalf. Additionally, if we determine, at some later date, that you have spent less than the required amount during the then most recently completed four consecutive calendar months for locally advertising and promoting your PLANET FITNESS business, we may collect LAF contributions from you directly and administer the funds on your behalf. We may collect the LAF from all franchisees and administer it on their behalf if, in our business judgment, we determine such conduct is appropriate. We will provide you with at least 30 days’ notice if we change the amount or expenditure of the LAF you must spend. If we collect LAF contributions directly from you, LAF contributions will be payable on the first business day following the immediately preceding Reporting Period together with the Royalty Fees. The funds may be electronically drafted. The LAF monies will be used to pay for the cost of implementing local marketing plans developed by you and approved by us or, if we collect LAF contributions from you, to reimburse you (up to an amount not to exceed the LAF contributions so collected) for the costs you incur in implementing local marketing plans developed by you and approved by us. For these purposes, advertising expenditures include: (a) amounts contributed to advertising cooperatives; and (b) amounts spent by you for advertising media, such as television, radio, FDD – 2014 14877235.8 04/17/14 DD-31 PLANET FITNESS® Internet, newspaper, billboards, posters, direct mail, collateral and advertising on public vehicles (transit and aerial) and, if not provided by us, cost of producing approved materials necessary to participate in these media. Advertising expenditures do not include amounts spent for items which we, in our reasonable judgment, deem inappropriate for meeting the minimum advertising requirement, including permanent on-premises signs, lighting, personnel salaries or administrative costs, transportation vehicles (even though such vehicles may display the Marks), Yellow Pages advertising, discounts, free offers and employee incentive programs. We reserve the right to modify the list of such advertising expenditures in the Operations Manual from time to time. Additional Advertising Costs In addition to your contributions to the NAF and LAF, you must conduct a pre-sale advertising and promotional program for your PLANET FITNESS business under a marketing plan developed by us or developed by you and approved by us. The pre-sale marketing period typically begins no less than 45 days immediately preceding the date that you commence regular operations at your PLANET FITNESS location, and it may be as long as 180 days thereafter (“Pre-Sale Marketing Period”). We will determine the length and start date of the Pre-Sale Marketing Period based upon the location of the BUSINESS, demographics and other factors. Specifically, you must spend on pre-sale advertising and promotions a minimum amount equal to $20,000 per every 30 days during the Pre-Sale Marketing Period. We will determine the specific length and start date of the Pre-Sale Marketing Period based upon the location of the PLANET FITNESS business, demographics and other factors. You must use the types of advertising media that we specify during your Pre-Sale Marketing Period. You must submit to us for our prior approval, samples of all advertising and promotion materials not prepared or previously approved by us and which vary from our standard advertising and promotional materials. You may not use any advertising or promotional materials that we have disapproved. You must participate in and contribute funds to special marketing programs and campaigns that we develop and administer from time to time; provided that in no event will your required contribution to the special marketing program equal more than the collective required monthly NAF and LAF payments (currently, 9%). If we require you to pay the special marketing program fee, you will not be required to pay a separate NAF or LAF for the corresponding month. National Advertising Fund You are required to pay to our National Advertising Fund (“NAF”) an Ad Fee not to exceed 2% of the total gross monthly EFT Dues Draft for your location payable monthly as described in Item 6. The NAF creates and develops marketing, advertising and related programs and materials, including electronic, print and internet media as well as the planning and purchasing of national and/or regional network advertising or other marketing programs. PLANET FITNESS businesses owned by us and our affiliates contribute to the NAF on the same basis as similarly situated franchisees. We reserve the right to raise the NAF contribution above 2% (as well as the Local Advertising Funds contributions described above) in the future by gaining an approval vote by either (i) 66% of all then existing company-owned and franchised PLANET FITNESS businesses, or (ii) 51% of all then existing franchised PLANET FDD – 2014 14877235.8 04/17/14 DD-32 PLANET FITNESS® FITNESS businesses. Voting will be accomplished through a system of one vote per eligible PLANET FITNESS business. The NAF will not spend any money on advertising that is principally a solicitation for the sale of new franchises although the NAF may generally expend funds to promote the Planet Fitness brand in such ways and media as we may decide. In our fiscal year ending December 31, 2013, NAF funds were expended as follows: 94% on production and media placement; and 6% on administrative expenses. We will administer the NAF and have the sole right to determine all aspects of programs financed by the NAF, including national or regional media, creative concepts, materials, endorsements and agency relationships. We will generate ads in-house and may solicit outside regional or national ad agencies for generating ads. Although the NAF is intended to maximize general recognition and patronage of the Marks for the benefit of all PLANET FITNESS businesses, we cannot assure you that any particular PLANET FITNESS business will benefit directly or pro-rata from the placement of advertising. The NAF may be used to pay for the cost of preparing and producing materials and programs we select, including video, audio, electronic and written advertising materials. We may furnish you with marketing, advertising and promotional materials at cost, plus any related administrative, shipping, handling and storage charges. The NAF is accounted for separately from our other funds. While our intent is to balance the NAF on an annual basis, periodically the NAF may run at either a surplus or deficit. All disbursements from the NAF are made first from income and then from contributions. We may spend in any fiscal year an amount greater or less than the aggregate contributions of all PLANET FITNESS businesses to the NAF in that year, and the NAF may borrow from us or other lenders to cover deficits in the NAF or cause the NAF to invest any surplus for future use by the NAF. Within 120 days after the close of our fiscal year, we will prepare an annual unaudited statement of monies collected and costs incurred by the NAF. We will furnish you a copy of the prior year’s statement upon your written request. Except as we otherwise expressly provide in the Franchise Agreement, we assume no direct or indirect liability or obligation with respect to the maintenance, direction or administration of the NAF. We do not act as a trustee or in any other fiduciary capacity with respect to the NAF. The NAF will not be used for advertising principally directed at the sale of franchises. We may seek the advice of owners of PLANET FITNESS businesses by formal or informal means with respect to the creative concepts and media used for programs financed by the NAF. Although we do not currently have an advertising council composed of franchisees, we have the right (but no obligation) to establish a Marketing Advisory Council (“MAC”). We will appoint members of the MAC and the MAC will serve only in an advisory capacity. We will have the final authority for all aspects of the MAC. We will have the right to change or dissolve the MAC. The NAF owns the rights to all creative concepts and marketing materials created or paid for by the NAF. The NAF has the right to retain any commissions received from suppliers of marketing materials or products. FDD – 2014 14877235.8 04/17/14 DD-33 PLANET FITNESS® Advertising Cooperatives We have the right to establish local or regional advertising cooperatives for PLANET FITNESS businesses in your local or regional area, covering the geographical areas we may designate periodically. We have the right to form, change, dissolve or merge advertising cooperatives. If we have established an advertising cooperative in your market area, you must participate in the advertising cooperative and its programs and abide by its by-laws. You must contribute the amounts to the advertising cooperative(s) as they determine periodically in accordance with their bylaws. Any PLANET FITNESS businesses we or any of our affiliates own located in the designated local or regional area(s) will contribute to the cooperative(s) on the same basis. Contributions to the local and regional advertising cooperatives are credited toward the LAF advertising expenditures required by the Franchise Agreement; however, if we provide you and your local or regional advertising cooperative 90 days’ notice of a special promotion, including but not limited to any regional promotions, you must participate in the promotion and pay us any special promotion advertising fees assessed in connection with the program, beginning on the effective date of the notice and continuing until the special promotion is concluded. Any special promotion advertising fees will be in addition to, and not credited towards, the LAF advertising expenditure required by the Franchise Agreement. The bylaws of your cooperative will be made available for you to review. We will administer the advertising cooperatives and collect your cooperative advertising contributions by automatic electronic withdrawal. The financial statements of the advertising cooperatives may be audited and the reports will be made available to you. Each PLANET FITNESS business located within the local or regional area of the advertising cooperative will be entitled to one vote. Advertising conducted by the cooperatives may be in various media including television, radio, internet, magazine, newspaper, billboards, transit and aerial advertising. Computer Hardware and Software You must record all transactions on a computer-based system that is fully compatible with our computer system and that includes an information interface capability to communicate electronically with our computer system. You must participate in our Internet Web Site and you may not register a domain name or operate a website containing the Marks. We have the right to determine the content and use of any website associated with the Marks. Your general conduct on the Internet or other electronic media, including your use of the Marks or any advertising, is subject to the terms and conditions of the Franchise Agreement or any other rules or requirements that we may identify from time to time. You must purchase or lease your computer system from our approved supplier, Retail Control Systems (“RCS”), or another system approved by us. You are required to execute the following licenses and agreements, each of which located in Exhibit I, for use of their software. 1. Visionary Software License. 2. NCR/Radiant Agreement Regarding Licensing of Radiant Software. FDD – 2014 14877235.8 04/17/14 DD-34 PLANET FITNESS® 3. RCS Purchase Order Terms and Conditions. 4. Merchant agreements with our required payment gateway and payment processors for ACH, debit card and credit card processing. The Visionary POS system allows you to enter and view all member information, collect customer membership fees, and conduct retail transactions. The system enables you to communicate all information in real-time to centralized servers in a managed data center. The cost to purchase or lease the Visionary POS system, Visionary Kit, and Visionary licenses is approximately $10,000 to $17,000. You will pay us based on the number of transactions processed per month and under the terms of the current Visionary license agreement. In our discretion, we will provide certain support and updates for no additional charge. We make monthly automatic withdrawals of the Royalty and advertising fees and may make withdrawals of training fees, consultation fees, or any other fees or monies payable by you to us under any agreement between you and us from the account you designate in accordance with the Franchise Agreement. The Visionary Kit includes at least two terminals, keyboards, mice, cash drawer, credit card reader, check reader, retail/license scanner, and other items that we may require from time to time. No item of equipment may be attached to or used by you as part of the Visionary POS system which has not been specifically approved by us. Each terminal requires a Visionary Software license that must be purchased by you. An additional Visionary license for the Owner/Manager computer can be purchased separately if desired. We also require you to purchase three line conditioners from RCS, one for each of your terminals and a third for your Sonicwall Firewall. In addition, you should order a HP LaserJet Pro M425n printer and a Logitech Webcam C270 camera, which are typically ordered from Staples. In order to run Visionary you will need to purchase either (i) reliable high speed business-class internet service, or (ii) MPLS private network services provided by Windstream through our preferred provider, Abylity. If you choose to utilize business-class internet service, you must purchase a SonicWall TZ 215 Firewall and monitoring services for the SonicWall from Cerdant. The SonicWall Firewall, including support, configuration and shipping will cost approximately $1600 and monitoring will cost $45 per month. A high speed business class internet line will cost approximately $99 to $249 per month depending on your club location. If you choose to deploy MPLS private network services, the cost will be approximately $550 per month (which includes the MPLS service, 4G wireless backup, firewall, monitoring, and 5 voice lines. These costs may vary depending on your club location. We may modify these requirements from time to time as set forth in the Methods of Operations. Neither we nor any of our affiliates is required to provide ongoing maintenance, repairs, upgrades or updates to the Visionary POS system or Visionary Kit. You must obtain, at your own expense, ongoing maintenance , support, and upgrades for the Visionary POS system under your contract with RCS and NCR. You must also, at your own expense, maintain, upgrade or replace other systems and equipment which you utilize to as part of your PLANET FITNESS business including: financial and inventory data processing, communications systems (including telecommunications voice and data services, Internet services and WiFi), club network and cabling systems, firewall systems, WiFi systems, and gym equipment systems, whenever we require it and we have no obligation to assist you in obtaining hardware, software, equipment or FDD – 2014 14877235.8 04/17/14 DD-35 PLANET FITNESS® related services. There are no contractual limits on the frequency or cost of your obligation to obtain these upgrades. We do not currently have any required or optional maintenance, repair, upgrade or update contracts for the computer system. We have the right, as often as we deem appropriate, including on a daily basis, to access all your computer systems that you are required to maintain in connection with the operation of the PLANET FITNESS franchise and to retrieve all information relating to the PLANET FITNESS franchise’s operations. Training Before opening your PLANET FITNESS business, you and/or your Responsible Owner or Approved Operator (described in Item 15), all salaried managers for your PLANET FITNESS business who have not previously completed our initial training program must successfully complete the initial training program. You and/or your Responsible Owner or Approved Operator must complete both our initial training program, which consists of both classroom and hands-on training covering all facets of our operations, including equipment operation and maintenance, cost control, inventory control and basic techniques of management. We will administer the initial training to you in two specific phases: Owner Orientation and Operations Training. You must attend, and complete to our satisfaction, both phases of initial training. Any on-premises training will be conducted at a designated PLANET FITNESS business. You must replace any individual who fails to successfully complete the appropriate training program(s) or who otherwise is not qualified to manage or perform the required functions at a PLANET FITNESS business. We will not charge any fees for attending the initial training programs for you and up to two additional individuals. However, as described in Item 6, you will be responsible for all compensation and expenses (including travel, meals and lodging) incurred in connection with any training programs. Neither you nor your employees will receive any compensation from us for services performed during training. Our current training program consists of initial training at our principal place of business and at an operating unit on the operation of a PLANET FITNESS business for you (or, if you are a corporation or partnership, your Responsible Owner) or your Approved Operator, and up to 2 additional owners or employees you elect to enroll in the training program. Typically, our training program will be conducted at least once per month, but may occur more or less frequently depending on our need to train franchisees. If you request, we will provide you with additional training and you must pay us a Per Diem Fee which may range from $100 to $1000, depending on the number of people trained, and the length and location of the training. If you are an existing franchisee opening an additional location and you have completed our initial training program, you will not attend the initial training again although any general managers who have not previously successfully completed the training program must successfully complete the initial training before your location opens. You (or your Responsible Owner), your Approved Operator, and your employees are required to complete the initial training to our satisfaction. You also are required to participate in all other activities required to operate the PLANET FITNESS franchise. If we determine that FDD – 2014 14877235.8 04/17/14 DD-36 PLANET FITNESS® you (or your Responsible Owner) are unable to complete initial training to our satisfaction, we have the right to terminate our agreement with you. We may require your owners or your employees to attend additional training courses during the term of the Franchise Agreement. We expect that the additional training we require will not exceed two people attending more than two refresher training sessions of up to five days per calendar year during the term of the Franchise Agreement but we may require you to attend more training courses or franchise meetings when we reasonably consider them necessary. We may charge you a reasonable fee for those courses or meetings and you may need to pay all travel, accommodations, meal and other expenses you and your other personnel, run while attending or completing these training courses or meetings. Typically, refresher training would be conducted at our headquarters in New Hampshire or at your franchise location. Training Program Subject Phase 1: Owner Orientation (mandatory for all first-time Franchise Owners) Philosophy and Vision Hours of Classroom Training Hours of On the Job Training Location 2 0 The Planet Fitness Story 1 0 Pre-open Site Selection and Construction Construction Legal and Regulatory Compliance Insurance Requirements Planet Fitness Requirements Getting Ready to Open Presale Presale Location Equipment and Supplies Marketing Training Hire Staff Train Staff Open 6 0 1 0 Ongoing Operations 2 FDD – 2014 14877235.8 04/17/14 DD-37 Franchisor headquarters in Newington, NH and an operating unit we select. Franchisor headquarters in Newington, NH and an operating unit we select. Franchisor headquarters and an operating unit we select. Franchisor headquarters in Newington, NH and an operating unit we select. PLANET FITNESS® Subject Q&A Hours of Classroom Training 2 Hours of On the Job Training Location 0 Franchisor headquarters in Newington, NH and an operating unit we select. 0 Total Hours for Owners Orientation 14 Phase 2: Operations Training (mandatory for all first time Franchise Owners) Day-to-Day Operation 14 20 Staffing 3 0 Q&A 3 0 Total Hours for Operations Training 20 20 16 0 8 0 8 0 76 20 Additional Workshops Managers workshops (mandatory twice per year for one representative per club) Regional Manager Workshops (mandatory once per year for franchisees with three or more clubs) PE and PF Workshops (mandatory once per year for one representative per club) TOTAL Franchisor headquarters in Newington, NH and an operating unit we select. Franchisor headquarters in Newington, NH and an operating unit we select. Franchisor headquarters in Newington, NH and an operating unit we select. Franchisor headquarters in Newington, NH and an operating unit we select. Franchisor headquarters in Newington, NH and an operating unit we select. Franchisor headquarters in Newington, NH and an operating unit we select Note 1: As noted in Item 1 and in the above chart, we currently maintain our headquarters in Newington, New Hampshire. We typically will select a corporate-owned operating unit that is located near our headquarters. It is the nature of the PLANET FITNESS business that all subjects are integrated into the training program, and that there are no clear delineations between the subjects being learned. If you are converting an existing fitness facility into a franchise, then the required initial training program may vary from the above estimate. Instructional materials include the Operations Manual. FDD – 2014 14877235.8 04/17/14 DD-38 PLANET FITNESS® Our team of training instructors includes Brian Belmont, William Mulleady, Lisa Cote, Mike Mullen, and Chris Holmes. Each instructor’s expertise is outlined in Item 2. Operations Manual We will provide you with a copy of our Operations Manual, or on-line access to a copy of our Operations Manual, which is a collection of materials that describe our Methods of Operation, pursuant to a specific timeline. As of the issuance date of this Disclosure Document, our Operations Manual contains a total of 78 pages. In addition, our Operations Manual includes alternative or supplemental means of communicating such information by other media which specifically reference that they are to be considered part of the Operations Manual, including bulletins, e-mails, videotapes, audio tapes, compact discs, computer diskettes, items posted on Franchise Management, and or other electronic media. Our Operations Manual contains proprietary information that you must keep confidential, as stated in Item 14 of this Disclosure Document. The table of contents to the collection of materials that comprises the Operations Manual is attached as Exhibit “J”. ITEM 12 TERRITORY The Franchise Agreement grants to you the right to own and operate a single PLANET FITNESS business at a specific location. You may not conduct the business of your PLANET FITNESS business at any site other than the approved premises, or relocate your PLANET FITNESS business without our prior written consent. The Franchise Agreement does not provide you with any options, rights of first refusal or similar rights to acquire additional franchises, or any protected territory You will not receive an exclusive territory unless you acquire rights under an Area Development Agreement (described below). You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. Except for rights expressly granted to you under the Franchise Agreement, we retain all of our rights with respect to the Marks, the System and PLANET FITNESS businesses anywhere in the world, including the right to, without compensation to you: 1. operate, and grant others the right to operate, PLANET FITNESS businesses and other marks, systems or businesses at locations and on terms and conditions we deem appropriate; 2. offer to sell, or sell and distribute, any products or services under any tradenames, trademarks, service marks or trade dress, including the Marks, through any distribution channels or methods, which may include retail stores, wholesale, and the Internet (or any other existing or future form of electronic commerce); 3. operate, and grant to others the right to operate, fitness facilities, gyms, health related establishments and any other business(es) whatsoever identified by FDD – 2014 14877235.8 04/17/14 DD-39 PLANET FITNESS® trademarks, service marks or trade dress, other than the Marks, under terms and conditions we deem appropriate which may include locations in close proximity to your PLANET FITNESS location; 4. develop or become associated with other concepts (including dual branding or other franchise systems), whether or not using the PLANET FITNESS System, Brand or the Marks, and award franchises under these other concepts for locations anywhere; and 5. acquire, be acquired by, merge, affiliate with or engage in any transaction with other businesses (whether competitive or not), with units located anywhere or business conducted anywhere. These transactions may include arrangements involving competing businesses or outlets and dual branding or brand conversions. These transactions are expressly permitted under the Franchise Agreement, and you must participate at your expense in any conversions as instructed by us. Because you are not granted a territory, there are no restrictions on soliciting or accepting orders outside any specific territory. You may use the Internet, telemarketing or other direct marketing to solicit new members, but only as permitted by our approved marketing methods as described in the Operations Manual and other System communications. You may not use the Internet, catalog sales or other direct marketing for the sale of PLANET FITNESS branded merchandise or any products or services other than memberships to your fitness facility. In addition, you may not use, reference or promote the PLANET FITNESS Marks or System in connection with any current or future form of social media networks or platforms, including, without limitation, Facebook, Twitter, LinkedIn and so on. If you are qualified and choose to acquire area development rights under an Area Development Agreement, we may grant you the right to develop multiple facilities in a Development Area. During the term of the Area Development Agreement, we, our parent and our affiliates will not develop, operate or franchise a PLANET FITNESS facility in the Development Area except for the circumstances noted below. Specifically, except for rights expressly granted to you under the Area Development Agreement, we retain all of our rights with respect to the Marks, the System and PLANET FITNESS businesses anywhere in the world, including the right, without compensation to you, to do the following: 1. operate, and grant to others the right to operate, PLANET FITNESS businesses at such locations and on such terms as we deem appropriate outside of the Development Area; 2. offer to sell, or sell and distribute, inside and outside the Development Area, any products or services associated with the PLANET FITNESS system (now or in the future) or identified by the PLANET FITNESS Marks, or any other tradenames, trademarks or service marks, through any distribution channels or methods, which may include retail stores, wholesale, and the Internet (or any other existing or future form of electronic commerce); FDD – 2014 14877235.8 04/17/14 DD-40 PLANET FITNESS® 3. operate, and grant to others the right to operate, fitness facilities, gyms, health related establishments, and any other business(es) whatsoever identified by tradenames, trademarks, service marks or trade dress, other than the Trademarks, both inside and outside of the Development Area and pursuant to such terms and conditions as we deem appropriate, which may include locations in close proximity to your PLANET FITNESS location(s) and your Development Area; 4. develop or become associated with other concepts (including dual branding or other franchise systems), whether or not using the PLANET FITNESS System, brand or Trademarks, and award franchises under these other concepts or locations anywhere, including into the Development Area; and 5. acquire, be acquired by, merge, affiliate with or engage in any transaction with other businesses (whether competitive or not), with units located anywhere or business conducted anywhere, including in the Development Area. These transactions may include arrangements involving competing businesses or outlets and dual branding or brand conversions. You must participate at your expense in any conversion as instructed by us. We require in our Franchise Agreement that, upon our written request, you lease or sublease to us, an affiliate or our designee, at the then-current fair market value rate in your geographic area for like-leased real estate, 10% or less of the total square footage of the franchise location for us or our affiliate or designee to use in any way we deem appropriate. We do not currently operate, or franchise the operation of any other business selling under different trademarks any products or services similar to the products and services offered by PLANET FITNESS businesses, and we presently do not have any plans to do so. As noted in Item 1, we have affiliates who operate fitness facility locations under the PLANET FITNESS trademark. ITEM 13 TRADEMARKS The Franchise Agreement licenses you to use the service mark PLANET FITNESS®, as well as other trademarks, service marks, trade names and commercial symbols owned by our affiliate, PFIP (collectively “Marks”). Listed below are the registered principal Marks that franchisees are currently licensed to use. PFIP has filed or intends to file all required affidavits and renewals for the Marks listed below. FDD – 2014 14877235.8 04/17/14 Trademark PLANET FITNESS U.S. Registration Number 2438677 Registration Date March 27, 2001 PLANET FITNESS 2698976 March 25, 2003 JUDGMENT FREE ZONE 2377662 August 15, 2000 JUDGEMENT FREE 4020552 August 30, 2011 DD-41 PLANET FITNESS® Trademark PF GYMS, NO DUMBELLS ALLOWED, plus design U.S. Registration Number 2370028 Registration Date July 25, 2000 LUNK ALARM 2693142 March 4, 2003 LUNKHEAD 3986503 June 28, 2011 NO CRITICS 2654980 November 26, 2002 PLANET FITNESS THE JUDGMENT FREE ZONE, plus design 3105988 June 20, 2006 PLANET FITNESS, plus design 3387627 February 26, 2008 PF PLANET FITNESS, plus design 3566625 January 27, 2009 PF PLANET FITNESS, plus design 3566626 January 27, 2009 PF logo 3566624 January 27, 2009 JFZ GYMS, plus design 3303904 October 2, 2007 YOU BELONG 3584434 March 3, 2009 BLACK 3389028 February 26, 2008 PF BLACK CARD 3569191 February 3, 2009 BLACK KEY CARD, plus design 4089813 January 24, 2012 LUNK 4006436 August 2, 2011 PF EXPRESS 3793766 May 25, 2012 PUPLE AND YELLOW for interior walls 3385516 February 19, 2008 PURPLE AND YELLOW for exercise equipment 3665723 August 11, 2009 Leave Egos Here 3584435 March 3, 2009 Pizza Night 3758327 March 9, 2010 Bagel Morning 3758325 March 9, 2010 PF Express 30 Minute Workout 3611493 April 28, 2009 I LIFT THINGS UP AND PUT THEM DOWN 4015427 August 23, 2011 I LIFT THINGS UP AND PUT THEM DOWN 4048177 November 1, 2011 NO GYMTIMIDATION 4358141 June 25, 2013 WE’RE NOT A GYM. WE’RE PLANET FITNESS 4492327 March 4, 2014 You must follow our operating procedures when you use the Marks. You cannot use the Mark or any other of our or PFIP’s trademarks as part of your corporate name. You may not use the Marks in the event you wish to advertise the sale of your franchise. FDD – 2014 14877235.8 04/17/14 DD-42 PLANET FITNESS® The Operation Manuals identify the Marks you are licensed to use. We have the right to change the licensed Marks periodically. Your use of the Marks and any goodwill is to our and our affiliate’s exclusive benefit and you retain no rights in the Marks. You also retain no rights in the Marks upon termination or expiration of your Franchise Agreement. You are not permitted to make any changes or substitutions to the Marks except as we direct in writing. There are no currently effective material determinations of the Patent and Trademark Office or Trademark Trial and Appeal Board. There are no pending infringements, oppositions or cancellations concerning the principal trademarks. There is no pending material litigation involving the principal trademarks. Our affiliate, PFIP, owns the principal trademarks. We have a license with PFIP to use the principal trademarks and to sublicense the principle trademarks to franchisees. We have no actual knowledge of either superior prior rights or infringing uses that could materially affect your use of the principal trademarks in the state where your PLANET FITNESS franchise may be located. Except for the Settlement Agreement described below, which could impact you if you open a location in certain parts of Florida, no agreements currently exist that significantly limit our rights to use or license the principle Marks in a manner material to the franchise. If it becomes advisable at any time for us and/or you to modify or discontinue use of any Mark and/or use one or more additional or substitute trademarks, service marks or trade dress, you must comply with our directions within a reasonable time after notice. You must bear all costs and expenses applicable to your PLANET FITNESS business should we decide to modify the Marks or adopt new marks. We will have no liability or obligation whatsoever with respect to any required modification or discontinuance of any Mark or the promotion of a substitute trademark, service mark or trade dress. You must immediately notify us of any apparent infringement of or challenge to your use of any Mark, or claim by any person of any rights to any Mark, and you must not communicate with any person other than your legal counsel, us, and our respective legal counsel in connection with any infringement, challenge or claim. We or our affiliate(s) will have the right to take any action it deems appropriate and will have the right to control exclusively any litigation or PTO or other administrative proceeding arising out of any infringement, challenge or claim or otherwise relating to any Mark. You must sign any and all instruments and documents, provide assistance and do all acts and things as, in the opinion of our legal counsel, may be necessary or advisable to protect our or our affiliate(s)’ interests in any litigation or PTO or other administrative proceeding or otherwise to protect its interests in the Marks. We will indemnify you against, and reimburse you for, all damages for which you are held liable in any proceeding arising out of your authorized use of any Mark under the Franchise Agreement and, except as provided in the Franchise Agreement, for all costs you reasonably incur in defending any claim brought against you or any proceeding in which you are named as a party, if you have timely notified us of the claim or proceeding and you and your owners are in compliance with the Franchise Agreement and all other agreements entered into with us and our affiliates. Our Affiliate(s) will be entitled to prosecute, defend or settle any proceeding arising out of your use of any Mark, and, if we or our Affiliate(s) decides to prosecute, defend or settle FDD – 2014 14877235.8 04/17/14 DD-43 PLANET FITNESS® any matter, we will have no obligation to indemnify or reimburse you for any fees or disbursements of counsel you retain. You may not use any Mark (or portion of any Mark) as part of your URL, e-mail address, personal website unrelated to our business or System, or in selling any product or service that we have not authorized (“Unauthorized Use”). Specifically, you may not use the words “Planet Fitness,” nor may you use our initials “PF.” Similarly, except for the word “Fitness,” your use of any Mark (or portion of any Mark as noted above) as part of your corporate, limited liability company or partnership name will constitute Unauthorized Use. You must properly attribute ownership of the Marks to us and our affiliate and use the notices of trademark and service mark registrations that we specify. You also may be required to obtain fictitious or assumed name registrations (also sometimes called “dba”) if required by local law. ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION There are no registered patents or copyrights or pending patent applications that are material to the franchise, although we do claim copyright ownership and protection for our PLANET FITNESS Franchise Agreement, Operations Manual and for various sales promotional and other materials published periodically and we obtain copyright registration for certain marketing materials. There are no pending patent applications that are material to the franchised business. There are no currently effective determinations of the Copyright Office (Library of Congress), United States Patent and Trademark Office, Board of Patent Appeals and Interferences, or any court, or any pending infringement, opposition or cancellation proceeding or any pending material litigation involving any patents or copyrights. Except as noted below, there are currently no agreements in effect that significantly limit our rights to use or license the use of any patents or copyrights in any manner material to the franchise. There are no infringing uses actually known to us that could materially affect your use of the patents or copyrights. We are not obligated to protect you against infringement or unfair competition claims arising out of your use of any patents or copyrights, or to participate in your defense or indemnify you. We reserve the right to control any litigation related to any patents and copyrights and we have the sole right to decide to pursue or settle any infringement actions related to the patents or copyrights. You must notify us promptly of any infringement or unauthorized use of the Marks of which you become aware. You must keep confidential during and after the term of the Franchise Agreement all proprietary information, including the Operations Manual. Upon termination of your Franchise Agreement, you must return to us all proprietary information, including but not limited to the Operations Manual and all other copyrighted material. You must notify us immediately if you learn about an unauthorized use of proprietary information. We are not obligated to take any action and we have the sole right to decide the appropriate response to any unauthorized use of proprietary information. You must comply with all changes to the Operations Manual at your cost. FDD – 2014 14877235.8 04/17/14 DD-44 PLANET FITNESS® ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in “Appendix A” to the Franchise Agreement or Exhibit C to the Area Development Agreement a “Responsible Owner,” who is an individual approved by us who: (a) has an ownership interest in you; (b) has the authority to bind you regarding all operational decisions with respect to your PLANET FITNESS business; and (c) has completed our training program to our satisfaction. You may also request approval of an operator who has completed our training program to whom you can delegate your obligation to develop and operate your business (an “Approved Operator”). You must require that any Approved Operator sign a non-disclosure agreement and non-competition agreement. All approvals are given in our sole discretion. We do not guarantee that you will be allowed to delegate your responsibility. Unless we approve an Approved Operator for your PLANET FITNESS business, you (or your Responsible Owner) agree to personally manage and operate the franchise as your primary occupation and will not, without our prior consent, delegate your (or one of your owners) authority and responsibility with respect to management and operation. You (or your Responsible Owner) agree that you will at all times faithfully, honestly and diligently perform your obligations hereunder, continuously exert your best efforts to promote and enhance the franchise and not engage in any other business or activity that conflicts with your obligations to operate the franchise in compliance with this Agreement. Specifically, you (or one of your owners): (a) must exert your best efforts to the development and operation of your PLANET FITNESS business and all other PLANET FITNESS businesses you own; and (b) absent our prior approval, may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations under the Franchise Agreement. Your PLANET FITNESS business must, at all times, be managed by you, one of your owners, an Approved Operator, or by a manager or shift supervisor who has completed our training program to our satisfaction. Your manager need not have an equity interest in the franchise. As more fully described in the Franchise Agreement, you must implement all reasonable procedures we periodically prescribe to prevent unauthorized use or disclosure of confidential information. These procedures include the use of nondisclosure agreements with your owners, Approved Operator, officers, directors, managers, and assistant managers. You, your owners, and your Approved Operator must deliver these agreements to us. At the end of the term of a Franchise Agreement, you must deliver to us all confidential information. If you or one of your affiliates have entered into an Area Development Agreement with us and are entering into a Franchise Agreement under that Area Development Agreement, and you are a business corporation, partnership, limited liability company or other legal entity, you must be at least 51% owned or controlled by a person or group of people that has at least a 51% FDD – 2014 14877235.8 04/17/14 DD-45 PLANET FITNESS® ownership interest in and voting control of the entity that signed the Area Development Agreement, except as we approved in writing in our business judgment. We have the right to approve in advance your ownership structure. If you are a partnership, corporation, limited liability company or other legal entity, any person who has a 5% or greater interest in you must undertake to be personally bound, jointly and severally, by your obligations under the Franchise Agreement and Area Development Agreement, and personally guarantee your performance. Copies of these guarantees are contained in Appendix B of the Franchise Agreement and Exhibit B of the Area Development Agreement, which are attached to this Disclosure Document. We do not currently require the spouses of owners to sign a personal guarantee. ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL Item 8 of this Disclosure Document describes our requirements for approved supplies and suppliers. You may offer only the products and services we have approved in writing. You must offer all services and products that we designate as required for franchisees. There are no limits on our right to make modifications to the approved products and services periodically as set forth in the Operations Manual. Any failure to comply with our Methods of Operation or Operations Manual may result in termination of your Franchise Agreement (See Item 17). You may use only marketing and promotional materials that we have approved. You are not limited in the type of customers to whom you may sell approved products or services. FDD – 2014 14877235.8 04/17/14 DD-46 PLANET FITNESS® ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the agreements attached to this Disclosure Document. Provision a. Length of the franchise term b. Renewal or extension of the term c. d. e. f. g. h. i. j. k. l. Article in Franchise Agreement 3.1 14 Summary We offer franchises with 10 year terms. A successor franchise may be granted if you meet our requirements. Requirements for franchisee to 14 To be granted a successor franchise you must: renew or extend (1) have substantially complied with the franchise agreement during its term, (2) cure all deficiencies we identify, (3) remodel the leasehold as we require, (4) pay a successor franchise fee equal to our then-current initial franchise fee for new franchises, provided that such fee will not exceed $20,000, and (5) sign a general release. You may be required to sign a new franchise agreement with materially different terms than your original contract. Termination by franchisee 15.1 You may terminate the agreement on any grounds available by law. Termination by franchisor without Not Applicable We will not terminate the Franchise Agreement cause without cause. Termination by franchisor with 15.2, 15.3 Material, uncured breaches of the Franchise cause Agreement. “Cause” defined – curable defaults 15.3 You may cure certain defaults in the operation of your franchise upon notice. “Cause” defined – non-curable 15.2 Certain defaults are inherently incurable and will defaults result in termination. Franchisee’s obligations on 16 Pay us what you owe us, cease using the Marks, termination/nonrenewal and follow our termination procedures Assignment of contract by 13.1 Fully transferable by us. franchisor “Transfer” by franchisee 1.4 A transfer includes the transfer of the Franchise defined Agreement, any interest in the Franchise Agreement, any ownership or other interest in you or the BUSINESS, and any arrangement where you sell accounts receivable or EFT or any other assets of the BUSINESS. Franchisor’s approval of transfer 13.2, 13.3, All transfers require our approval. by you 13.4, 13.5 FDD – 2014 14877235.8 04/17/14 DD-47 PLANET FITNESS® Provision m. Conditions for franchisor approval of transfer n. Franchisor’s right of first refusal to acquire franchisee’s business o. Franchisor’s option to purchase franchisee’s business p. Death or disability of franchisee q. Non-competition covenants during the term of the franchise r. Non-competition covenants after the franchise is terminated or expires Article in Franchise Agreement 13.3 13.8, 13.9 16.11 13.5 16.5 16.6 s. Modification of the agreement t. Integration / merger clause 19.16 19.25 u. Dispute resolution by arbitration or mediation 19.12 v. Choice of forum 19.14 FDD – 2014 14877235.8 04/17/14 DD-48 Summary Transferee must meet our character requirements, complete initial training, and sign our then-current version of franchise agreement; you must pay all amounts owed, pay a transfer fee of the greater of (a) $25,000 or (b) $10,000 per franchise being transferred, sign a general release, agree to be bound by the confidentiality and non-competition covenants, and agree to subordinate your security interest (if any) in the business to our right to receive payment under the Franchise Agreement. For all third party bona fide offers. 60 day option upon termination or expiration of the Franchise Agreement. Treated as a transfer. No direct or indirect involvement in the operation of any men’s, women’s, children’s, or co-ed fitness, exercise, athletic, or wellness facility of any kind, including a health club, gym, physical fitness club, personal training studio, weight loss, weight training or resistance training studio, or aerobics center (“Competitive Business”) other than the business authorized in the Franchise Agreement. No direct or indirect involvement in the operation of any Competitive Business for 2 years after termination, expiration, or transfer at the Location, within 15 miles of the Location, or within 15 miles of any other PLANET FITNESS business. Must be in writing signed by us and you. Oral statements not binding. Franchise Agreement is the entire agreement. Any promises not contained in the Franchise Agreement or this Disclosure Document may not be enforceable. All disputes resolved by mediation and arbitration except for actions for declaratory or equitable relief and actions in ejectment or for possession of any interest in real or personal property. City closest to our then current headquarters (currently, Newington, New Hampshire), unless superseded by State law. PLANET FITNESS® Article in Franchise Agreement 19.13 Provision w. Choice of law Summary New Hampshire (unless superseded by state law), except for arbitration which is covered by the Federal Arbitration Act. If you purchase a company-owned location, you must sign the form of Franchise Agreement contained in this Disclosure Document, which we may amend to incorporate any mutually agreed terms that may vary from those identified in the table above. AREA DEVELOPMENT AGREEMENT This table lists certain important provisions of the Area Development Agreement. You should read these provisions in the Area Development Agreement attached to this Disclosure Document. Provision a. Length of the term of the franchise Section in Agreement 3 b. Renewal or extension of the term Not Applicable c. Requirement for franchisee to renew or extend d. Termination by franchisee e. Termination by franchisor without cause f. Termination by franchisor with cause Not Applicable Not Applicable Not Applicable 9 g. “Cause” defined – curable defaults 9 h. “Cause” defined – non-curable defaults i. Franchisee obligations on termination/non-renewal j. Assignment of contract by franchisor 9 FDD – 2014 14877235.8 04/17/14 13-14 15 Summary The ADA term expires on the earlier of (a) the date the last PLANET FITNESS location must be opened under the Development Schedule, or (b) the date you open the last PLANET FITNESS location required by the Development Schedule. You do not have the right to renew or extend the ADA. You do not have the right to renew or extend the ADA. Not Applicable. We will not terminate the Area Development Agreement without cause. We can terminate the Area Development Agreement if you default or fail to comply with your obligations. Where you fail to comply with the Development Schedule for any location at any time, or where you fail to comply with the other terms of this Area Development Agreement, the Area Development Agreement will terminate, following our giving you thirty (30) days’ notice and opportunity to cure, without further recourse to you. Non-curable defaults include the termination of a Franchise Agreement All development rights revert to us. No restriction on our right to assign. DD-49 PLANET FITNESS® Provision k. “Transfer” by franchisee – defined l. Franchisor approval of transfer by you m. Conditions for franchisor’s approval of transfer n. Franchisor’s right of first refusal to acquire franchisee’s business o. Franchisor’s option to purchase franchisee’s business p. Death or disability of franchisee q. Non-competition covenants during the term of the franchise r. Non-competition covenants after the franchise is terminated or expires Section in Agreement 16 Not Applicable Summary You may only transfer your rights and interests under the Area Development Agreement if you obtain our consent and transfer all rights under all Franchise Agreements. You are also subject to same restrictions on transfer as under the Franchise Agreement. You may only transfer your rights and interests under the Area Development Agreement if you obtain our consent and transfer all rights under all Franchise Agreements. You may only transfer your rights and interests under the Area Development Agreement if you obtain our consent and transfer all rights under all Franchise Agreements; you will pay a transfer fee of the greater of (a) $25,000 or (b) $10,000 per franchise being transferred; and you comply with other transfer conditions we specify if you propose to sell for more than the Development Fee paid by you. Not Applicable. Not Applicable Not Applicable. Not Applicable 13.1 Not Applicable. No direct or indirect involvement in the operation of any Competitive Business other than the business authorized in the Area Development Agreement. No direct or indirect involvement in a Competitive Business for 2 years (i) within the Development Area, (ii) within 15 miles of any PLANET FITNESS business developed by your, or (iii) within 15 miles of any other PLANET FITNESS franchised or companyowned business. Any modification must be in writing and signed by both parties Only terms of the Area Development Agreement are binding. Any promises not contained in the Franchise Agreement or this Disclosure Document may not be enforceable. All disputes resolved by mediation and arbitration except for actions for actions for declaratory or equitable relief and actions in ejectment or for possession of any interest in real or personal property. 16 16 13.2 s. Modification of the Agreement 26 t. 25 Integration/merger clause u. Dispute resolution by arbitration or mediation FDD – 2014 14877235.8 04/17/14 19 DD-50 PLANET FITNESS® Provision v. Choice of forum w. Choice of law Section in Agreement 19, 21 20 Summary City closest to our then current headquarters (currently, Newington, New Hampshire), unless superseded by State law. New Hampshire (unless superseded by state law), except for arbitration which is covered by the Federal Arbitration Act. ITEM 18 PUBLIC FIGURES There are no public figures involved in the sale of this franchise. ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Disclosure Document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances. EFT REVENUE The following chart shows Average Annual Gross EFT revenue for our corporate and franchised clubs that have been open and operating for at least 12 months as of December 31, 2013. The clubs were segregated into three groups, or thirds, based on annual gross EFT revenue (i.e., Bottom Third, Middle Third, and Upper Third). Gross EFT revenue is revenue on recurring monthly and annual membership fees that are automatically collected from club members. This does not include any prepaid membership fees, revenue from retail sales or other sources of revenue and excludes returns. BOTTOM THIRD MIDDLE THIRD UPPER THIRD Average Annual Gross EFT Revenue* $862 $1,300 $1,978 Number of Clubs 200 200 200 CORPORATE & FRANCHISED *In Thousands; Represents electronic funds presented for draft for the 12 months of calendar year 2013 Of the 200 locations in the Bottom Third, 111 (or 56%) exceeded the total Average Annual Gross EFT Revenue of $862,000. Of the 200 locations in the Middle Third, 100 (or 50%) FDD – 2014 14877235.8 04/17/14 DD-51 PLANET FITNESS® exceeded the total Average Annual Gross EFT Revenue of $1,300,000. Of the 200 locations in the upper third, 73 (or 37%) exceeded the total Average Annual Gross EFT Revenue of $1,978,000. BOTTOM THIRD MIDDLE THIRD UPPER THIRD Average Annual Gross EFT Revenue* $856 $1,290 $1,982 Number of Clubs 185 185 186 FRANCHISED ONLY *In Thousands; Represents electronic funds presented for draft for the 12 months of calendar year 2013 Of the 185 locations in the Bottom Third, 102 (or 55%) exceeded the total Average Annual Gross EFT Revenue of $856,000. Of the 185 locations in the Middle Third, 91 (or 49%) exceeded the total Average Annual Gross EFT Revenue of $1,290,000. Of the 186 locations in the Upper Third, 66 (or 35%) exceeded the total Average Annual Gross EFT Revenue of $1,982,000. CORPORATE ONLY Average Annual Gross EFT Revenue* Number of Clubs BOTTOM THIRD MIDDLE THIRD UPPER THIRD $961 $1,415 $1,901 15 15 14 *In Thousands; Represents electronic funds presented for draft for the 12 months of calendar year 2013 Of the 15 locations in the Bottom Third, 8 (or 53%) exceeded the total Average Annual Gross EFT Revenue of $961,000. Of the 15 locations in the Middle Third, 7 (or 47%) exceeded the total Average Annual Gross EFT Revenue of $1,415,000. Of the 14 locations in the Upper Third, 6 (or 43%) exceeded the total Average Annual Gross EFT Revenue of $1,901,000. REVENUE AND OPERATIONS STATEMENT At December 31, 2013, there were 44 corporate PLANET FITNESS locations operating for at least 12 months. Each of these corporate locations is listed as a “Corporate Location” in Exhibit F to the Disclosure Document. These clubs were ranked, by annual net revenue, in order from lowest to highest, then segregated into three groups, or thirds. There are 15 clubs in the Bottom Third, 15 clubs in the Middle Third, and 14 clubs in the Upper Third. The following table provides the revenue and operations statement which represents the average results of the clubs within each third in accordance with U.S generally accepted accounting principles (“GAAP”). We have not included any franchisee expense information in the following table because we do not receive complete expense information from our franchisees. As noted in more detail below, your results may differ. FDD – 2014 14877235.8 04/17/14 DD-52 PLANET FITNESS® BOTTOM THIRD Revenue MIDDLE THIRD UPPER THIRD 1 Membership Sales – EFT $967,483 $1,424,783 $1,921,628 Other Membership Sales Net Revenue $81,084 $1,048,566 $95,107 $1,519,890 $106,685 $2,028,313 $70.53 $80.62 $106.22 $237,547 $257,748 $266,690 $100,224 $134,134 $170,738 $48,168 $70,626 $95,072 $59,164 $77,862 $102,953 $68,734 $89,146 $105,327 $89,988 $603,825 $123,020 $752,537 $154,399 $895,179 $444,741 $767,353 $1,133,135 42% 50% 56% $29.92 $40.70 $59.34 Net Revenue $/Sq.Ft. Operating Costs and Expenses 2 Payroll Related 3 Marketing Expenses 4 Royalty Expenses (for illustration only) Utilities 5 Supplies and Maintenance 6 7 Miscellaneous Total Operating Costs and Expenses, Excluding Rent 9 EBITDAR EBITDAR % of Net Revenue EBITDAR $/Sq.Ft. Rent Expense 8 Total Operating Costs and Expenses 9 EBITDA EBITDA % of Net Revenue $205,351 $314,927 $370,817 $809,176 $1,067,464 $1,265,995 $239,390 $452,426 $762,318 23% 30% 38% EBITDA $/Sq.Ft. $16.10 $24.00 $39.92 Average of Sq.Ft. 14,867 18,853 19,096 Notes to Revenue and Operations Statement: The performance results included in the above Revenue and Operations Statement are corporate locations only and do not include any franchised locations. Please also keep in mind the following as you review the above table: 1. Revenue – The principal source of revenue for a PLANET FITNESS club is membership fees. Membership monthly and annual fees are usually paid through electronic transfer of funds (EFT). Annual fees are billed to a member once per year, the time of which is dependent on their join date and membership type, as detailed in their membership agreement. A fitness facility will also earn additional revenue through enrollment fees, prepaid memberships, beverage sales, tanning goggles and lotions, Planet Fitness apparel and headphones. A $10 membership and a Black Card membership must be offered at all times. Promotional packages are offered at different times during the year and a franchisee has the ability to tailor the package to their club based on the benefits that come with the package. The Black Card membership is $19.99/month with an annual fee of $39 and must have a 12 month commitment, unless otherwise mandated by state or local law. Included with the Black Card is FDD – 2014 14877235.8 04/17/14 DD-53 PLANET FITNESS® free tanning, half priced beverages, free massage chair usage, access to any other Planet Fitness club, and ability to bring a guest for free to your home club. Your ability to sell monthly memberships will depend upon a variety of factors, including but not limited to, factors related to your market, how much time and effort you spend on sales, advertising, and your sales ability. Membership fees billed by EFT are subject to returns and declines during the electronic payment process. Your ability to collect monthly and annual membership fees by EFT will depend upon a variety of factors, including, but not limited to, the accuracy of the billing information provided by a member, the member’s credit worthiness, and the expiration or cancellation of a member’s credit card. We have experienced monthly declines and returns ranging from 3% to 14% of gross membership EFT at our corporate clubs in the past 12 months. The returns and declines are included in “Other Membership Sales” in the above table. The square footage of a club does not necessarily correlate to the revenue results. Revenue results depend upon many independently variable factors including the location and visibility of the club, local traffic patterns, the demographic composition and trends of the market area served by the club, the competitive environment, the region and market area in which the club is located, the length of time the club has been in operation, the quality of the management and service at the center, the individual skills of the franchisee and other factors. Of the 15 corporate locations in the Bottom Third: 8 (or 53%) exceeded average Net Revenue $1,048,566; Of the 15 corporate locations in the Middle Third: 8 (or 53%) exceeded average Net Revenue $1,519,890; and of the 14 corporate locations in the Upper Third: 6 (or 43%) exceeded average Net Revenue $2,028,313. 2. Costs and Expenses – The expense information included in the Operations Statement reflect the costs and expenses of the corporate locations included in the statement plus an amount equal to the royalty the location would have paid if it were a franchised club. In comparing the three columns above, some of the expenses are fixed and do not change with any fluctuation in memberships. Others are not fixed and will increase as memberships increase. You may incur other expenses. All expenses are based largely on factors within your control for which you can obtain information through your own research. You should conduct an independent investigation of the costs and expenses you will incur in operating your franchised business. Franchisees or former franchisees listed in this Disclosure Document may be one source of information. 3. Marketing – The marketing expenses listed above reflect the average of actual amounts these corporate locations spent on local advertising (LAF), contributions to National Advertising Fund (NAF), as well as promotional items (i.e. T-Shirts, pens, stickers). Franchisees must spend the greater of $5,000 per month or 7% of the monthly gross EFT membership fees per month on approved local advertising. The amount a club spends on advertising above the required minimum varies depending on the club. The advertising is performed through a preferred corporate vendor. FDD – 2014 14877235.8 04/17/14 DD-54 PLANET FITNESS® The NAF creates and develops marketing, advertising and related programs and materials, including electronic, print and internet media as well as the planning and purchasing of national and/or regional network advertising. Franchisees must contribute 2% of the monthly gross EFT membership fees to the NAF. 4. Royalty Expenses – Our current royalty rate is 5% of the total gross monthly and annual membership fees due and payable to you each month and annually, as applicable, through EFT. However, corporate clubs pay a reduced fixed royalty to us. For illustration purposes only, the expense category in the above table reflects the payment of a “Royalty” based on the 5% of the total gross monthly and annual membership fees that a franchisee would pay, rather than the actual amount paid (if any) by our corporate clubs. 5. Utilities – Your utilities can vary significantly depending on the size and location of your club. Certain markets have substantially higher utility costs than others and any prospective franchisee is urged to investigate local market utility costs prior to making any assumption about what their costs will be. 6. Supplies and Maintenance – The Supplies and Maintenance amounts listed above reflect the average of actual amounts these corporate locations spent on cleaning supplies, club supplies and repairs & maintenance. 7. Miscellaneous – Miscellaneous expense includes cost of goods sold, insurance, billing charges, bank & credit card charges, equipment rental, office expense, sales and use tax, and other miscellaneous expenses. Insurance costs vary on a club-by-club basis. The insurance costs noted in the above statement are based on bulk buy pricing for multiple clubs. Your rates may differ based on various factors. Bank and credit card charges will vary based on the banking institution used and type of club membership draft. Drafting membership fees from credit cards will result in higher fees than membership fees drafted from bank accounts. Sales and use tax will vary based on the location of the club. Every state will have different rules applying to sales and use tax. Other miscellaneous expense includes pizza, bagels, filing fees, licenses, permits, gifts, travel/meals, postage, online join expense and professional fees. Many of these costs can vary significantly depending on your location and the time you spend looking for the best possible cost on these items. 8. Rent – Your rent can vary significantly depending on the size and location of your club. Certain markets have substantially higher real estate costs than others and any prospective franchisee is urged to investigate local market real estate costs prior to making any assumption about what their costs will be. FDD – 2014 14877235.8 04/17/14 DD-55 PLANET FITNESS® 9. EBITDAR & EBITDA – EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) does not include any provision for income taxes or for non-cash expenses such as depreciation or amortization. It also does not include any expense assumption related to the capital structure of the franchisee entity or any reserve for future capital expenditures. The statement also does not factor in your initial franchise fee or other initial investment expenses including expenses for a lease/purchase of equipment. We anticipate that every franchisee will fund its initial investment differently, and we therefore cannot make any assumptions on how you would account for these items. EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization and Rent) does not include rent expense. As noted in Note 4 above, the EBIDTA and EBITDAR calculations include payment of an illustrative “Royalty” of 5% of the total gross monthly and annual membership fees. This Royalty is based on what a franchisee would pay, rather than the actual amount paid (if any) by our corporate clubs. Of the 15 corporate locations in the Bottom Third: 9 (or 60%) exceeded average EBITDAR $444,741; of the 15 corporate locations in the Middle Third: 7 (or 47%) exceeded average EBITDAR $767,353; and of the 14 corporate locations in the Upper Third: 6 (or 43%) exceeded average EBITDAR $1,133,135. Of the 15 corporate locations in the Bottom Third: 7 (or 47%) exceeded average EBITDA $239,390; of the 15 corporate locations in the Middle Third: 10 (or 67%) exceeded average EBITDA $452,426; and of the 14 corporate locations in the Upper Third: 7 (or 50%) exceeded average EBITDA $762,318. General Notes to Item 19: 1. Some outlets have earned or sold these amounts. Your individual results may differ. There is no assurance that you will earn and/or sell as much. The square footage of a club does not necessarily correlate to revenue results. Certain markets have substantially higher labor costs than others and you are urged to investigate local labor costs prior to making any assumptions about what your costs will be. Sales, expenses, and operating revenue results depend upon many independently variable factors including the location and visibility of the club, local traffic patterns, the demographic composition and trends of the market area served by the club, the competitive environment, the region and market area in which the club is located, the length of time the club has been in operation, the quality of the management and service at the center, the individual skills of the franchisee and other factors. 2. You have the sole responsibility for developing your own business plan for your proposed center or territory, including capital budgets, pro forma financial statements, sales and expense projections and other elements appropriate to the particular circumstances you anticipate for your center. In developing the business plan, you are cautioned to make necessary allowance for changes in financial results that may occur due to any of the factors listed above, for any and all ranges of general economic conditions that may exist now or in the future, or for any other circumstances that may impact the operation and performance of the business. FDD – 2014 14877235.8 04/17/14 DD-56 PLANET FITNESS® 3. Other than the preceding financial performance representation, we do not make any financial performance representations. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor’s management by contacting Candace Couture, our Franchise Sales Manager at 26 Fox Run Road, Newington, NH 03801 and (603) 750-0001, the Federal Trade Commission, and the appropriate state regulatory agencies. 4. We recommend that you make your own independent investigation to determine whether the franchise may be profitable to you. You should use the above information only as a reference in conducting your analysis and preparing your own projected revenue statements and cash flow statements. We suggest strongly that you consult your financial advisor or personal accountant concerning financial projections and federal, state and local income taxes and any other applicable taxes that you may incur in operating a PLANET FITNESS business. Written substantiation of all data presented in this Item 19 will be made available to you on reasonable request. FDD – 2014 14877235.8 04/17/14 DD-57 PLANET FITNESS® ITEM 20 OUTLETS AND FRANCHISEE INFORMATION Table No. 1 System-wide Outlet Summary For Years 2011 to 2013 Outlet Type Franchised Outlets Company-Owned (Note 1) Total Outlets Year 2011 2012 2013 2011 2012 2013 2011 2012 2013 Outlets at the Start of the Year 332 453 562 58 67 44 390 520 606 Outlets at the End of the Year 453 562 704 67 44 45 520 606 749 Net Change +121 +109 +142 +9 -23 +1 +130 +86 +143 *As of December 31, 2011, 2012 and 2013. Company-owned locations include locations operated by our affiliates and partnership locations. Note 1: In 2012, we sold our partial interest in certain company-owned locations to the franchisee who owned the remaining interest in the locations. Following the sale, these locations have been categorized as franchisee locations. Table No. 2 Transfers of Outlets From Franchisees to New Owners (Other than the Franchisor) For Years 2011 to 2013* State Connecticut Florida Maine Massachusetts New Hampshire FDD – 2014 14877235.8 04/17/14 Year 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013 DD-58 Number of Transfers 0 15 4 1 0 0 0 4 0 1 6 0 1 0 0 PLANET FITNESS® State Year 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013 New Mexico Pennsylvania South Carolina Tennessee Texas Total Number of Transfers 0 0 8 1 0 0 0 1 0 0 0 3 0 0 10 4 26 25 *As of December 31, 2011, 2012 and 2013. States not listed had no transfer activity to report. Table No. 3 Status of Franchised Outlets For Years 2011 to 2013* State Alabama Alaska Arizona Arkansas California FDD – 2014 14877235.8 04/17/14 Reacquired by Franchisor Ceased Operations Other Reasons Outlets at End of the Year 0 0 0 9 0 0 0 0 9 0 0 0 0 13 1 0 0 0 0 4 4 0 0 0 0 0 4 2013 4 0 0 0 0 0 4 2011 1 0 1 0 0 0 0 2012 0 6 0 0 0 0 6 2013 6 4 0 0 0 0 10 2011 2012 0 1 1 1 0 0 0 0 0 0 0 0 1 2 2013 2 1 0 0 0 0 3 2011 9 2 0 0 0 0 11 2012 11 3 0 0 0 0 14 2013 14 6 0 0 0 0 20 Year Outlets at Start of Year Outlets Opened 2011 8 1 0 2012 9 0 2013 9 4 2011 3 2012 NonTerminations Renewals DD-59 PLANET FITNESS® Reacquired by Franchisor Ceased Operations Other Reasons Outlets at End of the Year State Year Outlets at Start of Year Colorado 2011 1 1 0 0 0 0 2 2012 2 1 0 0 0 0 3 2013 3 1 0 0 0 0 4 2011 21 6 0 0 0 0 26 2012 26 1 0 0 0 0 27 2013 27 2 0 0 0 0 29 2011 2012 2 2 0 0 0 0 0 0 0 1 0 0 2 1 2013 1 0 0 0 0 0 1 2011 36 11 0 0 0 0 47 2012 47 2 0 0 0 0 49 2013 49 5 0 0 0 0 54 2011 3 2 0 0 0 0 5 2012 5 2 0 0 0 0 7 2013 7 5 0 0 0 0 12 2011 1 0 0 0 0 0 1 2012 1 1 0 0 0 0 2 2013 2 0 0 0 0 0 2 2011 2 9 0 0 0 0 11 2012 11 8 0 0 0 0 19 2013 11 10 0 0 0 0 29 2011 2012 2013 2011 2012 2013 2011 2 5 8 1 3 3 1 3 3 10 2 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 8 18 3 3 5 1 2012 1 2 0 0 0 0 3 2013 3 1 0 0 0 0 4 2011 2012 0 1 1 2 0 0 0 0 0 0 0 0 1 3 2013 3 2 0 0 0 0 5 Louisiana 2011 2012 2013 1 3 4 2 1 3 0 0 0 0 0 0 0 0 0 0 0 0 3 4 7 Maine 2011 11 0 0 0 0 0 11 2012 11 0 0 0 0 0 11 2013 11 0 0 0 0 1 10 Connecticut Delaware Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky FDD – 2014 14877235.8 04/17/14 Outlets Opened NonTerminations Renewals DD-60 PLANET FITNESS® Reacquired by Franchisor Ceased Operations Other Reasons Outlets at End of the Year State Year Outlets at Start of Year Maryland 2011 12 3 0 0 0 0 15 2012 15 4 0 0 0 0 19 2013 19 3 0 0 0 0 22 2011 44 2 0 0 0 0 46 2012 46 3 0 0 0 0 49 2013 49 3 4 0 0 1 47 2011 14 9 0 0 0 0 23 2012 23 6 0 0 0 0 29 2013 29 6 0 0 0 0 35 2011 2012 2 2 0 1 0 0 0 0 0 0 0 0 2 3 2013 3 1 0 0 0 0 4 2011 2012 3 3 0 1 0 0 0 0 0 0 0 0 3 4 2013 4 0 0 0 0 0 4 2011 2012 0 2 2 2 0 0 0 0 0 0 0 0 2 4 2013 4 2 0 0 0 0 6 2011 1 3 0 0 0 0 4 2012 4 0 0 0 0 0 4 2013 4 1 0 0 0 0 5 2011 0 0 0 0 0 0 0 2012 0 2 0 0 0 0 2 2013 2 1 0 0 0 0 3 2011 2 0 0 0 0 0 2 2012 2 0 0 0 0 0 2 2013 2 0 0 0 0 0 2 2011 11 4 0 0 0 0 15 2012 15 2 0 0 0 0 17 2013 17 5 0 0 0 0 22 2011 5 3 0 0 0 0 8 2012 8 0 0 0 0 0 8 2013 8 1 0 0 0 0 9 2011 30 7 0 0 0 0 37 2012 37 30 0 0 0 0 67 2013 67 11 0 0 0 0 78 Massachusetts Michigan Minnesota Mississippi Missouri Nevada Nebraska New Hampshire New Jersey New Mexico New York FDD – 2014 14877235.8 04/17/14 Outlets Opened NonTerminations Renewals DD-61 PLANET FITNESS® State North Carolina (Note 1) North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah FDD – 2014 14877235.8 04/17/14 Reacquired by Franchisor Ceased Operations Other Reasons Outlets at End of the Year 0 0 0 21 0 0 0 0 23 5 0 0 0 0 26 1 1 0 0 0 0 2 2012 2 0 0 0 0 0 2 2013 2 0 0 0 0 0 2 2011 7 6 0 0 0 0 13 2012 13 5 0 0 0 0 18 2013 18 11 0 0 0 0 29 2011 1 2 0 0 0 0 3 2012 3 2 0 0 0 0 5 2013 5 3 0 0 0 0 8 2011 0 0 0 0 0 0 0 2012 0 1 0 0 0 0 1 2013 1 2 0 0 0 0 3 2011 28 4 0 0 0 0 31 2012 31 0 0 0 1 0 30 2013 30 9 0 0 0 0 39 2011 6 0 0 0 0 0 6 2012 6 3 0 0 0 0 9 2013 9 1 0 0 0 0 10 2011 3 3 0 0 0 0 6 2012 6 1 0 0 0 0 7 2013 7 3 0 0 0 0 10 2011 2012 2013 2011 2012 1 1 1 0 2 0 0 0 2 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 2 6 2013 6 4 0 0 0 0 10 2011 22 11 0 0 0 0 32 2012 32 3 1 0 0 0 35 2013 35 11 0 0 0 0 46 2011 4 4 0 0 0 0 8 2012 8 1 0 0 0 0 9 2013 9 1 0 0 0 0 10 Year Outlets at Start of Year Outlets Opened 2011 18 3 0 2012 21 2 2013 21 2011 NonTerminations Renewals DD-62 PLANET FITNESS® State Vermont Virginia Washington W. Virginia Wisconsin Puerto Rico Total Reacquired by Franchisor Ceased Operations Other Reasons Outlets at End of the Year 0 0 0 2 0 0 0 0 2 0 0 0 0 0 2 8 3 0 0 0 0 11 2012 11 2 0 0 0 0 13 2013 13 3 0 0 0 0 16 2011 2012 0 3 3 0 0 0 0 0 0 0 0 0 3 3 2013 3 0 0 0 0 0 3 2011 2012 0 1 1 1 0 0 0 0 0 0 0 0 1 2 2013 2 1 0 0 0 0 3 2011 4 6 0 0 0 0 10 2012 10 1 0 0 0 0 11 2013 11 4 0 0 0 0 15 2011 2012 0 1 1 1 0 0 0 0 0 0 0 0 1 2 2013 2 2 0 0 0 0 4 2011 332 125 3 0 1 0 453 2012 453 111 0 0 2 0 562 2013 562 148 4 0 0 2 704 Year Outlets at Start of Year Outlets Opened 2011 2 0 0 2012 2 0 2013 2 2011 NonTerminations Renewals *As of December 31, 2011, 2012, and 2013. If multiple events occurred affecting an outlet, this table shows the event that occurred last in time. States not listed had no franchised activity to report. Note 1: Immediate family members of individuals listed in Item 2 own and operate five locations in North Carolina. See list of franchisees attached as Exhibit F. Table No. 4 Status of Company-Owned Outlets For Years 2011 to 2013* State California Colorado FDD – 2014 14877235.8 04/17/14 Year 2011 Outlets at Start of Year 0 Outlets Opened 1 Reacquired from Franchisees 0 Outlets Closed 0 Outlets Sold to Franchisees 0 Outlets at End of the Year 1 2012 1 0 0 0 0 1 2013 1 1 0 0 0 2 2011 1 0 0 0 0 1 2012 1 0 0 0 0 1 2013 1 0 0 0 0 1 DD-63 PLANET FITNESS® State Connecticut Delaware Massachusetts New Hampshire New Jersey New York Pennsylvania Rhode Island Total Year 2011 2012 2013 Outlets at Start of Year 5 0 0 Outlets Opened 0 0 0 Reacquired from Franchisees 0 0 0 Outlets Closed 0 0 0 Outlets Sold to Franchisees 5 0 0 Outlets at End of the Year 0 0 0 2011 2012 0 0 0 0 0 1 0 0 0 0 0 1 2013 1 0 0 0 0 1 2011 1 1 0 0 0 2 2012 2 0 0 0 0 2 2013 2 0 0 0 0 2 2011 14 0 0 0 0 14 2012 14 0 0 0 0 14 2013 14 0 0 0 0 14 2011 2 1 0 0 0 3 2012 3 0 0 0 0 3 2013 3 0 0 0 0 3 2011 23 9 0 0 0 32 2012 32 0 0 0 25 7 2013 7 0 0 0 0 7 2011 10 1 1 0 0 12 2012 12 1 3 0 0 15 2013 15 0 0 0 0 15 2011 2 0 0 0 0 2 2012 2 0 0 0 2 0 2013 0 0 0 0 0 0 2011 58 13 1 0 0 67 2012 67 13 4 0 27 44 2013 44 1 0 0 0 45 *As of December 31, 2011, 2012 and 2013. States not listed had no company-owned outlets to report. Our affiliates or immediate family members of individuals listed in Item 2 own and operate these units. (See the list of company-owned units attached as Exhibit F.) FDD – 2014 14877235.8 04/17/14 DD-64 PLANET FITNESS® Table No. 5 Projected Openings as of December 31, 2013 State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah FDD – 2014 14877235.8 04/17/14 Franchised Agreements Signed But Not Opened 1 0 0 0 6 1 0 0 6 3 0 1 5 0 0 1 2 0 0 1 1 0 0 0 0 1 0 2 1 6 0 0 2 0 0 5 0 2 0 0 2 0 Projected New Franchised Outlets in the Next Fiscal Year 1 0 5 1 4 3 0 0 4 1 0 3 2 0 2 2 2 0 5 0 4 2 1 4 0 0 0 4 2 5 5 0 7 2 0 5 1 2 0 6 4 3 DD-65 Projected New CompanyOwned Outlets in the Next Fiscal Year 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 PLANET FITNESS® State Virginia Washington West Virginia Wisconsin Puerto Rico Total Franchised Agreements Signed But Not Opened 1 2 0 1 0 53 Projected New Franchised Outlets in the Next Fiscal Year 3 0 1 3 0 99 Projected New CompanyOwned Outlets in the Next Fiscal Year 0 0 0 0 0 4 Attached as Exhibit “F” to this Disclosure Document is a list of the PLANET FITNESS franchisees as of December 31, 2013 and a list of franchisees who have been terminated, cancelled or otherwise voluntarily ceased doing business under the Franchise Agreement during 2013 or who have not communicated with us within 10 weeks of the date of this Disclosure Document. Also listed in Exhibit “F” are our corporate locations. If you buy this franchise, your contact information may by disclosed to other buyers when you leave the franchise system. During the last three fiscal years, some franchisees have signed confidentiality clauses with us. In some instances, current and former franchisees sign provisions restricting their ability to speak openly about their experience with us. You may want to speak with current and former franchisees, but be aware that not all such franchisees will be able to communicate with you. We have created a Franchise Advisory Council which is endorsed by us. Please contact us for more information. ITEM 21 FINANCIAL STATEMENTS Attached to this Disclosure Document as Exhibit “E” are the audited consolidated balance sheets of Planet Fitness Holdings, LLC and its subsidiaries as of December 31, 2013 and 2012 (Successor) and the related consolidated statements of operations, comprehensive income, cash flows, and changes in equity for the year ended December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor), and the year ended December 31, 2011 (Predecessor). Also attached to this Disclosure Document as Exhibit “E” is a guarantee of performance by which Planet Fitness Holdings, LLC guarantees our obligations under the Franchise Agreement. FDD – 2014 14877235.8 04/17/14 DD-66 PLANET FITNESS® ITEM 22 CONTRACTS Attached to this Disclosure Document as Exhibit “B” is our form of Nondisclosure & Non-Use Agreement. Attached to this Disclosure Document as Exhibit “C” is our Franchise Agreement with Appendices (A) Ownership Addendum, (B) Personal Guarantee, (C) Owner Personal Covenants, (D) Silent Investors, (E) Assignment of Telephone Numbers, (F) Lease Provisions, and (G) Location. Attached to this Disclosure Document as Exhibit “D”: is our Area Development Agreement with Exhibits (A) Map of Development Area, (B) Personal Guarantee, and (C) Ownership Addendum. Attached to this Disclosure Document as Exhibit “H” is our Form of Release Agreement. Attached to this Disclosure Document as Exhibit “I” are the Visionary License Agreement, Purchase Order for Visionary Products and Software, Radiant Software Agreement, and Merchant Agreements. ITEM 23 RECEIPTS The Receipts to be signed by all prospective franchisees are attached in duplicate to this Disclosure Document (identified as Exhibit “K”). You will sign and date one copy and give it to us at the time we present it to you. Your copy of the receipt is attached at the end of this Disclosure Document. This Disclosure Document summarizes certain provisions of the Franchise Agreement and other information in plain language. Read this Disclosure Document and all agreements carefully. FDD – 2014 14877235.8 04/17/14 DD-67 PLANET FITNESS® PLANET FITNESS EXHIBIT “A” TO THE DISCLOSURE DOCUMENT LIST OF STATE AGENCIES AND AGENTS FOR SERVICE OF PROCESS FDD – 2014 14877235.8 04/17/14 A-1 PLANET FITNESS® Exhibit A LIST OF STATE ADMINISTRATORS AND AGENTS FOR SERVICE OF PROCESS STATE CALIFORNIA STATE ADMINISTRATOR Department of Business Oversight 1515 K Street Suite 200 Sacramento, CA 95814 (866) 275-2677 Business Registration Division Department of Commerce and Consumer Affairs 335 Merchant Street Honolulu, HI 96813 HAWAII ILLINOIS INDIANA MARYLAND MICHIGAN MINNESOTA NEW YORK NORTH DAKOTA RHODE ISLAND FDD – 2014 14877235.8 04/17/14 Office of the Attorney General Franchise Division 500 South Second Street Springfield, IL 62706 Secretary of State Franchise Section Indiana Securities Division 302 West Washington Street, Room E-111 Indianapolis, IN 46204 Office of the Attorney General Securities Division 200 St. Paul Place Baltimore, MD 21202 Michigan Department of Attorney General Consumer Protection Division Franchise Section 525 W. Ottawa Street G. Mennen Williams Building, 1st Floor Lansing, MI 48913 Minnesota Department of Commerce 85 7th Place East, Suite 500 St. Paul, MN 55101 Bureau of Investor Protection and Securities New York State Department of Law 120 Broadway, 23rd Floor New York, NY 10271 North Dakota Securities Department 600 East Boulevard Avenue State Capitol – 5th Floor Bismarck, ND 58505-0510 Securities Division Department of Business Registration John O. Pastore Center, Building 69-1 1511 Pontiac Avenue Cranston, RI 02920 A-2 AGENT FOR SERVICE OF PROCESS Commissioner of Business Oversight Department of Business Oversight 1515 K Street Suite 200 Sacramento, CA 95814 (866) 275-2677 Commissioner of Securities Business Registration Division Department of Commerce & Consumer Affairs 335 Merchant Street Honolulu, HI 96813 Illinois Attorney General 500 South Second Street Springfield, IL 62706 Indiana Secretary of State 302 West Washington Street, Room E-111 Indianapolis, IN 46204 Maryland Securities Commissioner 200 St. Paul Place Baltimore, Maryland 21202-2020 Michigan Department of Attorney General Consumer Protection Division Franchise Section 525 W. Ottawa Street G. Mennen Williams Building, 1st Floor Lansing, MI 48913 Minnesota Commissioner of Commerce 85 7th Place East, Suite 500 St. Paul, MN 55101 Secretary of State of New York One Commerce Plaza 99 Washington Avenue Albany, NY 12231-0001 North Dakota Securities Commissioner Securities Department 600 East Boulevard Avenue State Capitol – 5th Floor Bismarck, ND 58505-0510 Director of Department of Business Regulation Department of Business Regulation John O. Pastore Center, Building 69-1 1511 Pontiac Avenue Cranston, RI 02920 PLANET FITNESS® STATE SOUTH DAKOTA VIRGINIA WASHINGTON WISCONSIN FDD – 2014 14877235.8 04/17/14 STATE ADMINISTRATOR Department of Labor and Regulation Division of Securities State of South Dakota 445 East Capitol Avenue Pierre, SD 57501-3185 State Corporation Commission Division of Securities and Retail Franchising 1300 E. Main Street, Ninth Floor Richmond, VA 23219 Department of Financial Institutions Securities Division 150 Israel Road SW Tumwater, WA 98501 Division of Securities Department of Financial Institutions 345 West Washington Ave., Suite 300 Madison, WI 53703 A-3 AGENT FOR SERVICE OF PROCESS Director of South Dakota Division of Securities Department of Labor and Regulation 445 East Capitol Avenue Pierre, SD 57501-3185 Clerk of the State Corporation Commission 1300 E. Main Street, 1st Floor Richmond, VA 23219 Director, Department of Financial Institutions Securities Division 150 Israel Road SW Tumwater, WA 98501 Administrator Division of Securities Department of Financial Institutions 345 West Washington Ave. Madison, WI 53703 PLANET FITNESS® PLANET FITNESS® EXHIBIT “B” TO THE DISCLOSURE DOCUMENT NONDISCLOSURE & NON-USE AGREEMENT FDD – 2014 14877235.8 04/17/14 B-1 PLANET FITNESS® Exhibit B Pla-Fit Franchise, LLC PFIP, LLC NONDISCLOSURE & NON-USE AGREEMENT This Nondisclosure Agreement is made and entered into as of _______________, 20__, (the “Effective Date”) by and between Pla-Fit Franchise, LLC, and PFIP, LLC, New Hampshire limited liability companies and their parent, subsidiaries and affiliates (collectively “Planet Fitness”) and the individuals identified below and acknowledged by their signature (“Potential Franchisee”). 1. Purpose. Potential Franchisee wishes to explore the possibility of franchising, opening and operating one or more Planet Fitness health clubs in which Planet Fitness will disclose to the Potential Franchisee certain technical information, methods of operations and business information which Planet Fitness desires the Potential Franchisee treat as confidential and agree not to use such information except in conjunction with its operation of a Planet Fitness health club. 2. “Confidential Information” shall mean any information disclosed by or on behalf of Planet Fitness, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, research, product plans, products, services, customers, markets, software, computer programs, know-how, ideas, inventions (whether or not patentable), processes, designs, drawings, engineering, hardware configuration information, marketing or finance documents and other technical, business, financial, customer and product development plans, forecasts, strategies and information. Information communicated orally shall also be considered Confidential Information. Confidential Information includes any analyses, compilations, studies or other documents prepared by Potential Franchisee which reflect, are based on, or contain the Confidential Information. Without limiting the foregoing, the term “Confidential Information” shall also include the fact that the Parties are in discussions or negotiations regarding a potential franchise agreement, the fact that Confidential Information has been received and the terms and conditions of any proposal in connection with any such potential business relationship. Notwithstanding the foregoing, Confidential Information shall not include any information which (i) is or becomes generally available to the public other than as a result of a breach of this Agreement by Potential Franchisee or any Potential Franchisee representative, (ii) becomes available to Potential Franchisee on a nonconfidential basis from a source (other than Fitness or one of Fitness Representatives) which has represented to Potential Franchisee that such source is entitled to disclose it without restriction or condition, or (iii) was known by Potential Franchisee on a nonconfidential basis prior to its disclosure by Fitness, provided that such knowledge is documented, or (iv) was independently developed by Potential Franchisee without use of or reference to the Confidential Information and without violation hereof. FDD – 2014 14877235.8 04/17/14 B-2 PLANET FITNESS® 3. Non-use and Non-disclosure. Potential Franchisee acknowledges that any discussions/negotiations are extremely sensitive and/or confidential and further agrees not to use any Confidential Information or any other information Planet Fitness may share related in any way to its operations or brand for any purpose except to evaluate and engage in discussions concerning a potential business relationship with Planet Fitness; Potential Franchisee specifically agrees not to use any Confidential Information or any such other information for any purpose which is competitive with or detrimental to Planet Fitness. Potential Franchisee agrees not to disclose any Confidential Information to third parties or to employees, except to those employees, advisors or partners of Potential Franchisee who are required to have the Confidential Information in order to evaluate or engage in discussions concerning the contemplated business relationship with Planet Fitness. Potential Franchisee shall be responsible for any breach of this agreement by any person to whom it discloses Confidential Information. 4. Maintenance of Confidentiality. Potential Franchisee agrees that it shall take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information. Without limiting the foregoing, Potential Franchisee shall take at least those measures that it takes to protect its own most highly confidential information and shall ensure that its employees, advisors and partners who have access to Confidential Information of Planet Fitness have executed a written non-use and nondisclosure agreement in content similar to the provisions hereof, prior to any disclosure of Confidential Information to such employees, advisors and partners. Potential Franchisee shall not make any copies of the Confidential Information unless the same are previously approved in writing by Planet Fitness. 5. Non-Solicitation. Until the earlier of (i) two (2) years from the date of this agreement or entry by the parties into a Franchise Agreement or Area Development Agreement, Potential Franchisee agrees that: (x) it will not, directly or indirectly, initiate or maintain contact (except for those contacts made in the ordinary course of business) with any officer, director, employee, customer or supplier of Planet Fitness regarding its business, operations, prospects or finances; and (y) it will not, directly or indirectly solicit or offer to hire or hire any officer, director or employee of Planet Fitness or any of its subsidiaries. 6. Return of Materials. All documents and other tangible objects containing or representing Confidential Information which have been disclosed and all copies thereof which are in the possession of Potential Franchisee or its agents shall be and remain the sole property of Planet Fitness and shall be promptly returned to Planet Fitness if Potential Franchisee does not enter into a Franchise Agreement or Area Development Agreement with Planet Fitness. 7. No License. Nothing in this Agreement is intended to grant any rights to Potential Franchisee under any patent, copyright, trade secret or other intellectual property right nor shall this Agreement grant Potential Franchisee of any rights in or to Planet Fitness’ Confidential Information. FDD – 2014 14877235.8 04/17/14 B-3 PLANET FITNESS® 8. Term. The obligations of Potential Franchisee shall survive until such time as all Confidential Information disclosed hereunder becomes publicly known and made generally available through no action or inaction of the receiving party, or until Potential Franchisee enters into a Franchise Agreement or Area Development Agreement with Planet Fitness. 9. Remedies. Potential Franchisee agrees that its obligations hereunder are necessary and reasonable in order to protect Planet Fitness and Planet Fitness’ business, and expressly agrees that monetary damages would be inadequate to compensate Planet Fitness for any breach by Potential Franchisee of any covenants and agreements set forth herein. Accordingly, Potential Franchisee agrees and acknowledges that any such violation or threatened violation will cause irreparable injury to the other party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Planet Fitness shall be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages. Potential Franchisee further agrees that it will indemnify Planet Fitness with respect to, and hold it harmless from and against, any and all losses, damages, claims, costs and expenses that may be incurred as a result of or arising from any failure by Potential Franchisee or any party to whom it discloses Confidential Information to comply with the terms of this agreement. 10. Miscellaneous. This Agreement shall bind and inure to the benefit of the parties hereto and their successors and assigns. This Agreement shall be governed by the laws of the State of New Hampshire, without reference to conflict of laws principles. This document contains the entire agreement between the parties with respect to the subject matter hereof, and neither party shall have any obligation, express or implied by law, with respect to trade secret or proprietary information of the other party except as set forth herein. Any failure to enforce any provision of this Agreement shall not constitute a waiver thereof or of any other provision. This Agreement may not be amended, nor any obligation waived, except by a writing signed by both parties hereto. ____________________________________ (Signature) ____________________________________ (Print Name) FDD – 2014 14877235.8 04/17/14 B-4 PLANET FITNESS® PLANET FITNESS® EXHIBIT “C” TO THE DISCLOSURE DOCUMENT FRANCHISE AGREEMENT FDD – 2014 14877235.8 04/17/14 C-1 PLANET FITNESS® PLANET FITNESS® FRANCHISE AGREEMENT 14877234.6 04/17/14 Table of Contents Page 1. PREAMBLES, ACKNOWLEDGMENTS AND REPRESENTATION. ...........................1 1.1 1.2 1.3 1.4 2. YOUR ORGANIZATION AND MANAGEMENT. ..........................................................6 2.1 2.2 2.3 2.4 2.5 3. 4.8 4.9 4.10 4.11 5.8 INITIAL FRANCHISE FEE ..............................................................................14 ROYALTY............................................................................................................15 DESIGNATED ACCOUNT AND AUTHORIZED EFT .................................15 INTEREST ON LATE PAYMENTS .................................................................15 APPLICATION OF PAYMENTS......................................................................16 PREFERRED VENDOR PAYMENTS .............................................................16 INTERNET MEMBERSHIP AND BALANCE PAYMENT ADMINISTRATION FEE ..................................................................................16 INSPECTION AND COMPLIANCE REIMBURSEMENT ...........................16 TRAINING, ASSISTANCE, AND METHODS OF OPERATION. ................................16 6.1 6.2 6.3 14877234.6 04/17/14 LOCATION SELECTION AND APPROVAL...................................................9 PURCHASE OR LEASE OF THE LOCATION................................................9 RESERVED AREA OF THE LOCATION.......................................................10 LOCATION DEVELOPMENT .........................................................................11 YOUR OBLIGATIONS ......................................................................................12 FIXTURES, FURNISHINGS, EQUIPMENT AND SIGNS ............................13 START-UP INVENTORY, FURNITURE, FIXTURES, SOFTWARE, EQUIPMENT AND SUPPLIES .........................................................................13 BUSINESS COMMENCEMENT.......................................................................13 COMMENCEMENT DEADLINE.....................................................................14 PRE-SALE MARKETING .................................................................................14 OPENING ASSISTANCE...................................................................................14 FEES. .................................................................................................................................14 5.1 5.2 5.3 5.4 5.5 5.6 5.7 6. GRANT OF FRANCHISE ....................................................................................8 OUR RESERVATION OF RIGHTS ...................................................................8 LOCATION SELECTION, LEASE OR PURCHASE OF LOCATION AND LOCATION DEVELOPMENT...........................................................................................9 4.1 4.2 4.3 4.4 4.5 4.6 4.7 5. ORGANIZATIONAL DOCUMENTS.................................................................6 DISCLOSURE OF OWNERSHIP INTERESTS................................................6 RESPONSIBLE OWNER/MANAGEMENT OF BUSINESS...........................7 CONTROL GROUP..............................................................................................7 FACILITY ORGANIZATION.............................................................................8 GRANT OF RIGHTS. .........................................................................................................8 3.1 3.2 4. PREAMBLES.........................................................................................................1 ACKNOWLEDGMENTS .....................................................................................1 REPRESENTATION ............................................................................................2 CERTAIN DEFINITIONS....................................................................................2 TRAINING ...........................................................................................................16 REFRESHER TRAINING..................................................................................17 GENERAL GUIDANCE .....................................................................................17 i Table of Contents Page 6.4 6.5 6.6 6.7 6.8 6.9 7. MARKS. ............................................................................................................................20 7.1 7.2 7.3 7.4 7.5 8. COMPLIANCE WITH METHODS OF OPERATION ..................................23 PROVISIONS OF THIS AGREEMENT ..........................................................25 MODIFICATION OF METHODS OF OPERATION ....................................25 CONDITION OF YOUR BUSINESS ................................................................25 UNIFORM IMAGE .............................................................................................26 PURCHASE OF OTHER PRODUCTS.............................................................26 COMPLIANCE WITH LAWS...........................................................................27 PERSONNEL .......................................................................................................27 INSURANCE........................................................................................................28 QUALITY CONTROL........................................................................................28 PRICING POLICIES ..........................................................................................29 MEMBER DUES POLICIES .............................................................................29 RECIPROCAL MEMBERSHIP........................................................................29 MEMBER TRANSFER POLICY ......................................................................29 FRANCHISE MANAGEMENT.........................................................................29 MARKETING....................................................................................................................29 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 14877234.6 04/17/14 CONFIDENTIAL INFORMATION..................................................................21 FOR BUSINESS USE ONLY .............................................................................22 IDEAS, CONCEPTS, TECHNIQUES OR MATERIALS...............................23 PLANET FITNESS METHODS OF OPERATION. ........................................................23 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 10. OWNERSHIP AND GOODWILL OF MARKS ..............................................20 LIMITATIONS ON YOUR USE OF MARKS .................................................20 NOTIFICATION OF INFRINGEMENTS AND CLAIMS.............................21 DISCONTINUANCE OF USE OF MARKS.....................................................21 INDEMNIFICATION OF FRANCHISEE .......................................................21 CONFIDENTIAL INFORMATION. ................................................................................21 8.1 8.2 8.3 9. ON-SITE CONSULTATION AND ADDITIONAL GUIDANCE ..................17 OPERATIONS MANUAL ..................................................................................18 COMPLIANCE WITH METHODS OF OPERATION ..................................19 WORKS MADE-FOR-HIRE..............................................................................19 GENERAL CONDUCT.......................................................................................19 COMPLIANCE WITH DATA SECURITY GUIDELINES ...........................19 NATIONAL ADVERTISING.............................................................................29 ACCOUNTING....................................................................................................30 NO PROPORTIONALITY.................................................................................31 DEFERRALS OR REDUCTIONS.....................................................................31 LOCAL ADVERTISING ....................................................................................31 ADVERTISING COOPERATIVES ..................................................................32 SPECIAL MARKETING PROGRAMS ...........................................................34 PARTICIPATION IN INTERNET WEB SITE OR OTHER ON-LINE COMMUNICATIONS ........................................................................................34 TRUTHFUL ADVERTISING, MARKETING AND PROMOTION ............35 ii Table of Contents Page 11. RECORDS, REPORTS AND FINANCIAL STATEMENTS. .........................................35 11.1 11.2 11.3 12. INSPECTIONS AND AUDITS.........................................................................................37 12.1 12.2 12.3 13. BY YOU ................................................................................................................44 IMMEDIATE TERMINATION.........................................................................44 TERMINATION UPON NOTICE.....................................................................45 OUR RIGHT TO OPERATE THE BUSINESS ...............................................47 ALTERNATIVES TO TERMINATION...........................................................47 OUR AND YOUR RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION OF THIS AGREEMENT..........................................................................48 16.1 16.2 16.3 16.4 16.5 16.6 16.7 16.8 14877234.6 04/17/14 ACQUISITION OF A SUCCESSOR FRANCHISE ........................................42 GRANT OF A SUCCESSOR FRANCHISE .....................................................43 NO GRANT ..........................................................................................................43 90 DAY CURE......................................................................................................43 AGREEMENTS ...................................................................................................44 RELEASES...........................................................................................................44 TERMINATION OF AGREEMENT. ...............................................................................44 15.1 15.2 15.3 15.4 15.5 16. BY US....................................................................................................................38 BY YOU ................................................................................................................38 CONDITIONS FOR APPROVAL OF TRANSFER ........................................38 TRANSFER TO A WHOLLY OWNED CORPORATION............................40 TRANSFER UPON YOUR DEATH OR DISABILITY ..................................40 OPERATION UPON YOUR DEATH OR DISABILITY ...............................41 BONA FIDE OFFERS.........................................................................................41 OUR RIGHT OF FIRST REFUSAL .................................................................42 NON-EXERCISE.................................................................................................42 EXPIRATION OF THIS AGREEMENT..........................................................................42 14.1 14.2 14.3 14.4 14.5 14.6 15. OUR RIGHT TO INSPECT THE BUSINESS .................................................37 COOPERATION .................................................................................................37 OUR RIGHT TO AUDIT....................................................................................37 TRANSFER. ......................................................................................................................38 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 14. RECORDS ............................................................................................................35 PERIODIC REPORTS........................................................................................36 VERIFICATION..................................................................................................36 PAYMENT OF AMOUNTS OWED TO US.....................................................48 MARKS.................................................................................................................48 DE-BRANDING...................................................................................................49 CONFIDENTIAL INFORMATION..................................................................50 IN-TERM COVENANT NOT TO COMPETE ................................................50 POST-TERM COVENANT NOT TO COMPETE ..........................................51 REASONABLE SCOPE OF COVENANTS .....................................................51 REDUCTION OF SCOPE OF COVENANTS .................................................52 iii Table of Contents Page 16.9 COVENANT NOT TO COMPETE UPON EXERCISE OF RIGHT OF FIRST REFUSAL ................................................................................................52 16.10 COMMENCEMENT BY ORDER.....................................................................52 16.11 OUR RIGHT TO PURCHASE BUSINESS ......................................................52 16.12 CONTINUING OBLIGATIONS........................................................................54 17. SECURITIES OFFERINGS. .............................................................................................54 17.1 18. RELATIONSHIP OF THE PARTIES AND INDEMNIFICATION. ...............................54 18.1 18.2 18.3 18.4 18.5 19. 19.16 19.17 19.18 19.19 19.20 19.21 19.22 19.23 19.24 19.25 SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS ..........57 LESSER COVENANT ENFORCEABLE.........................................................57 GREATER NOTICE ...........................................................................................58 WAIVER OF OBLIGATIONS...........................................................................58 NON-WAIVER ....................................................................................................58 FORCE MAJEURE.............................................................................................59 EXTEND PERFORMANCE ..............................................................................59 OUT-OF-STOCK AND DISCONTINUED.......................................................59 COSTS AND ATTORNEYS’ FEES...................................................................59 YOU MAY NOT WITHHOLD PAYMENTS DUE TO US.............................59 RIGHTS OF PARTIES ARE CUMULATIVE.................................................60 DISPUTE RESOLUTION...................................................................................60 GOVERNING LAW............................................................................................64 CONSENT TO JURISDICTION .......................................................................64 WAIVER OF PUNITIVE DAMAGES, JURY TRIAL AND CLASS ACTIONS .............................................................................................................64 BINDING EFFECT .............................................................................................65 LIMITATIONS OF CLAIMS ............................................................................65 CONSTRUCTION...............................................................................................65 WITHHOLD APPROVAL .................................................................................65 HEADINGS ..........................................................................................................65 JOINT AND SEVERAL OWNERS’ LIABILITY ...........................................65 ANTI-TERRORISM LAWS...............................................................................66 RIGHT TO INFORMATION.............................................................................66 MULTIPLE COPIES ..........................................................................................66 ENTIRE AGREEMENT BETWEEN THE PARTIES ....................................66 NOTICES AND PAYMENTS. .........................................................................................67 20.1 20.2 14877234.6 04/17/14 INDEPENDENT CONTRACTORS ..................................................................54 NO LIABILITY FOR ACTS OF OTHER PARTY..........................................55 TAXES ..................................................................................................................56 INDEMNIFICATION .........................................................................................56 MITIGATION NOT REQUIRED .....................................................................57 ENFORCEMENT AND MISCELLANEOUS MATTERS. .............................................57 19.1 19.2 19.3 19.4 19.5 19.6 19.7 19.8 19.9 19.10 19.11 19.12 19.13 19.14 19.15 20. SECURITIES OFFERINGS ...............................................................................54 NOTICES..............................................................................................................67 PAYMENTS .........................................................................................................67 iv APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E APPENDIX F APPENDIX G OWNERSHIP ADDENDUM OWNERS’ PERSONAL GUARANTY OF FRANCHISEE’S OBLIGATIONS OWNER PERSONAL COVENANTS REGARDING CONFIDENTIALITY AND NON-COMPETITION SILENT INVESTORS ASSIGNMENT OF TELEPHONE NUMBERS ADDENDUM TO LEASE LOCATION ACKNOWLEDGEMENT ADDENDUM 14877234.6 04/17/14 v PLANET FITNESS® FRANCHISE AGREEMENT THIS FRANCHISE AGREEMENT (the “Agreement”) is made and entered into as of the Effective Date (as defined herein) by and between Pla-Fit Franchise, LLC, a limited liability company formed under New Hampshire law, with its principal business address at 26 Fox Run Road, Newington, NH 03801 (referred to in this Agreement as “we,” “us” or “our”), and _________________________________________________________, whose principal business address is _______________________________________________________________, (referred to in this Agreement as “you,” “your” or “owner”). 1. PREAMBLES, ACKNOWLEDGMENTS AND REPRESENTATION. 1.1 PREAMBLES. This Agreement governs your ownership and operation of one (1) PLANET FITNESS business offering fitness training facility services, including exercise machines and free weights, fitness training services, tanning services, and related services and ancillary merchandise as we may authorize from time to time. These businesses operate under the PLANET FITNESS name and under business formats, methods, procedures, designs, layouts, standards and specifications, all of which we may improve, further develop or otherwise modify from time to time. We use, promote and license certain trademarks, service marks and other commercial symbols in the operation of PLANET FITNESS businesses, including the PLANET FITNESS trademarks and service marks and associated logos. We have a license to use the Marks and to sublicense the Marks to franchisees. We grant franchises to persons who meet our qualifications and are willing to undertake the investment and effort required to own and operate a PLANET FITNESS business offering the products and services we authorize and approve and utilizing our business formats, methods, procedures, signs, designs, layouts, equipment, standards and specifications and the Marks. You have indicated to us by your actions and statements that you desire a franchise to own and operate a PLANET FITNESS business. 1.2 ACKNOWLEDGMENTS. You acknowledge that you have read this Agreement and our Franchise Disclosure Document and understand and accept the terms, conditions and covenants contained in this Agreement as being reasonably necessary to maintain our high standards of quality and service and the uniformity of those standards at each PLANET FITNESS business and thereby to protect and preserve the goodwill of the Marks. You acknowledge that you have conducted an independent investigation of the business venture contemplated by this Agreement and recognize that, like any other business, the nature of the business conducted by a PLANET FITNESS business may evolve and change over time, that an investment in a PLANET FITNESS business involves business risks and that your business abilities and efforts are vital to the success of the venture. You acknowledge and agree that we and you are and will be independent contractors and that nothing in this Agreement is intended to make either you or us a general or special agent, joint venturer, partner or employee of the other for any purpose. You agree to always indicate your status as an independent contractor and franchisee on any document or information released by you in connection with the BUSINESS. Further, you will display the following notice in a prominent place at the BUSINESS: 14877234.6 04/17/14 1 “This Planet Fitness is a franchise of Pla-Fit Franchise, LLC and is independently owned and operated.” Any information you acquire from other PLANET FITNESS franchisees relating to their sales, profits or cash flows does not constitute information obtained from us, nor do we make any representation as to the accuracy of any such information. You acknowledge that, in all of their dealings with you, our officers, directors, employees and agents act only in a representative, and not in an individual, capacity. All business dealings between you and such persons as a result of this Agreement are solely between you and us. You further acknowledge that we have advised you to seek franchise counsel to review and evaluate this Agreement. 1.3 REPRESENTATION. You represent to us, as an inducement to our entry into this Agreement, that all statements you have made and all materials you have submitted to us in connection with your purchase of the franchise are accurate and complete and that you have made no misrepresentations or material omissions in obtaining the franchise. We have approved of your purchasing a franchise in reliance upon all of your representations. We reserve the right to terminate this Agreement if you made any material representation to us that was false or there were any material omissions in information provided to us in inducing us to enter into this Agreement with you. 1.4 CERTAIN DEFINITIONS. The terms listed below have the meanings which follow them and include the plural as well as the singular. Other terms are defined elsewhere in this Agreement in the context in which they arise. “Annual Membership Accounting Period” - Each yearly period for each membership sold during the term of this Agreement. “Annual Membership Billing Day” – The day or days of the year that we designate that we or our authorized designee are authorized by you to withdraw via electronic funds transfer from your designated bank account all annual Royalty fees and other amounts then due to us under the terms of this Agreement, as identified in Article 5.2. “Ad Fee” - Defined in Article 10.1. “Affiliate” - Any person or entity that directly or indirectly owns or controls the referenced party, that is directly or indirectly owned or controlled by the referenced party, or that is under common control with the referenced party. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction, of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise. “Approved Supplier” - Any supplier, including us, an Affiliate of ours or an independent third party, whom we authorize to act as an approved supplier of services or goods. “Approved Operator” – Defined in Article 2.3 “BUSINESS” - The PLANET FITNESS business operated by you at the franchise location under the terms of this Agreement. “Competitive Business” - Any men’s, women’s, children’s, or co-ed fitness, exercise, athletic, or wellness facility of any kind, including, but not limited to, a health club, gym, 14877234.6 04/17/14 2 physical fitness club, personal training studio, weight loss, weight training or resistance training studio, or aerobics center. “Confidential Information” - Defined in Article 8.1. “Construction Development Plan” – Defined in Article 4.4. “Control Group” - Defined in Article 2.4. “Corporation or Partnership” - The term “corporation or partnership” as used herein to describe your business entity shall, if applicable, include reference to your formation as a limited liability company, limited liability partnership, or any other type of limited liability entity. “EFT” – The term “EFT” means the electronic transfer of funds to us from a credit card, debit card or bank account, as well as any other current or future form of pre-authorized payment. “EFT Dues Draft” - Defined in Article 5.2. “Franchise Management” – Our online portal that provides information, resources, and support to Planet Fitness franchisees and their PLANET FITNESS businesses. “Immediate Family” - Spouse, parents (including step parents), siblings (including half siblings), and children (including step children), whether natural or adopted. “Initial Term” – Defined in Article 3.1. “Internet” - All communications between computers and between computers and television, telephone, facsimile and similar communications devices, including the World Wide Web, proprietary online services, E-mail, news groups and electronic bulletin boards, including but not limited to all forms of social media developed during the term of this Agreement “Internet Membership Administration Fee” – The fee you pay to us for establishing customer memberships and providing balance payment options for your BUSINESS through membership applications submitted to the PLANET FITNESS Internet web site. “LAF” - Local Advertising Funds, as defined in Article 10.5. “Location” - The franchise location identified in Article 3.1. “MAC” - The Marketing Advisory Council, as defined in Article 10.1. “Marks” - The current and future tradenames, trademarks, service marks and trade dress used to identify the services and/or products offered by PLANET FITNESS businesses, including the mark “PLANET FITNESS” and the distinctive building design and color scheme of PLANET FITNESS businesses. “Monthly Membership Billing Day” - The day each calendar month that we designate that we or our authorized designee are authorized by you to withdraw via electronic funds 14877234.6 04/17/14 3 transfer from your designated bank account all monthly Royalty fees and other amounts then due to us under the terms of this Agreement, as identified in Article 5.2. “Methods of Operation” - The Operations Manual we provide to you containing mandatory and suggested specifications, standards, operating procedures and rules that we prescribe from time to time for the operation of a PLANET FITNESS business and any other information we provide to you during the term of the Agreement relating to your operation of the franchise business or to any other of your obligations under this Agreement and related agreements. “Monthly Membership Accounting Period” - Each monthly period during the term of the Agreement. “NAF” - Our National Advertising Fund, as defined in Article 10.1. “Operations Manual” – The term “Operations Manual” means the confidential PLANET FITNESS Methods of Operation, which may include, without limitation, any information, documents and materials that describe our mandatory and suggested standards, specifications, marketing strategies and policies, and operating procedures relating to the development and operation of PLANET FITNESS businesses and your obligations under this Agreement, as well as all other written materials, documents or information that we designate as a Method of Operation or specifically as part of the Operations Manual. The term “Operations Manual” also includes (1) alternative or supplemental means of communicating such information by other media which specifically reference that they are to be considered part of the Operations Manual, including bulletins, e-mails, videotapes, audio tapes, compact discs, computer diskettes, items posted on Franchise Management, and CD Roms, and (2) any and all optional manuals that we may offer and you choose to purchase. We recommend, but do not require, that you purchase optional manuals to aid in the operation of your PLANET FITNESS business. If you choose to purchase any optional manual, those optional manuals will be deemed part of the Operations Manual and Methods of Operation for your PLANET FITNESS business. The Operations Manual (and each component thereof) constitutes a confidential trade secret and will remain our property. “Owner” – Each person that has any direct or indirect legal or beneficial ownership interest in you, if you are a business corporation, partnership, limited liability company or other legal entity. Each Owner that has five percent (5%) or greater interest in you, if you are a business corporation, partnership, limited liability company or other legal entity, must sign Appendix B to this Agreement (Owners’ Personal Guaranty of Franchisee’s Obligations) and Appendix C to this Agreement (Owner Personal Covenants Regarding Confidentiality and Non-Competition). However, if we are entering into this Agreement totally or partially based on the financial qualifications, experience, skills or managerial qualifications of any person or entity who directly or indirectly owns 5% or less interest in the franchisee, we have the right to designate that person as an Owner who must sign Appendix B to this Agreement. In addition, if the franchisee is a partnership entity, then each person or entity who, now or hereafter is or becomes a general partner is deemed an Owner who must sign Appendix B and Appendix C, regardless of the percentage ownership interest. If the franchisee is one or more individuals, each individual is an Owner. Each franchisee must have at least one Owner. Your Owner(s) is/are identified on Appendix A to this Agreement. Every time there is a change in the persons or entities who are your Owners, you must, within seven (7) calendar days from the date of such change, 14877234.6 04/17/14 4 notify us of the change and cooperate with us in updating Appendix A. As used in this Agreement, any reference to Owner includes all Owners. “Personnel” - All persons employed by you in connection with the development, management or operation of your BUSINESS, including persons in general and district management positions for your PLANET FITNESS BUSINESS, crew trainers, unit general and assistant managers, shift supervisors, hourly employees and all other persons who work in or for your BUSINESS. “Preferred Vendor” - Any supplier of goods or services to your BUSINESS that we designate under our Methods of Operation as a “Preferred Vendor.” “Pre-Sale Marketing Expense” - Defined in Article 4.10. “Pre-Sale Marketing Period” - Defined in Article 4.10. “Relocation” – The moving of the Location for the BUSINESS and developing a new PLANET FITNESS business in close proximity at a new location, approved by us, and transferring all members from the BUSINESS to the new PLANET FITNESS business. A Relocation may include a consolidation of two PLANET FITNESS businesses operated by you for business reasons if approved by us in our sole discretion. “Reserved Area” - Defined in Article 4.3. “Responsible Owner” - The individual you so designate in Appendix A and any replacement thereof approved by us. The Responsible Owner must be an Owner (or Approved Operator) who has the authority to, and does in fact, actively direct your business affairs related to the BUSINESS and has the authority to sign on your behalf on all contracts and commercial documents. “Royalty” - Defined in Article 5.2. “Silent Investor” - All individuals and/or entities identified in Appendix D. “System” - The business methods, designs and arrangements for developing and operating PLANET FITNESS businesses, which include the Marks, building design and layouts, equipment, training, and certain operating and business standards and policies, all of which we may improve, further develop or otherwise modify from time to time. “Total Net Membership Revenues” - The total receipts from all membership fees that are received by you. Total Net Membership Revenues does not include the fair market value of goods delivered and services rendered to you or others in consideration for activity, goods or services delivered by Franchisee (and/or any affiliated party) nor does it include sales taxes charged to customers. “Transfer” - The voluntary, involuntary, direct or indirect sale, assignment, transfer, license, sublicense, sublease, collateral assignment, grant of a security, collateral or conditional interest, Inter-vivos transfer, testamentary disposition or other disposition of this Agreement, any interest in or right under this Agreement, or any form of ownership interest in you or the assets, revenues or income of your BUSINESS including: (1) any transfer, redemption or issuance of a legal or beneficial ownership interest in the capital 14877234.6 04/17/14 5 stock of, or a partnership interest in, you or of any interest convertible to or exchangeable for capital stock of, or a partnership interest in, you; (2) any merger or consolidation between you and another entity, whether or not you are the surviving corporation; (3) any transfer in, or as a result of, a divorce, insolvency, corporate or partnership dissolution proceeding or otherwise by operation of law; (4) any transfer upon your death or the death of any of your Owners by will, declaration of or transfer in trust or under the laws of interstate succession; or (5) any foreclosure upon your BUSINESS or the transfer, surrender or loss by you of possession, control or management of your BUSINESS. 2. YOUR ORGANIZATION AND MANAGEMENT. 2.1 2.2 14877234.6 04/17/14 ORGANIZATIONAL DOCUMENTS. If you are, or at any time become a corporation, limited liability company, partnership, or other legal entity, you and each of your Owners agree and represent that: (1) you are duly organized and validly existing under the laws of the state of your organization, and, if a foreign business corporation, partnership, limited liability company or other legal entity, you are duly qualified to transact business in the state in which your BUSINESS is located; (2) you have the authority to execute and deliver this Agreement and to perform your obligations hereunder; (3) your activities are restricted to those necessary solely for the development, ownership and operation of a PLANET FITNESS business in accordance with this Agreement and in accordance with any other agreements entered into with us or any of our Affiliates; (4) the articles or certificate of incorporation, partnership agreement or other organizational documents recite that the issuance, transfer or pledge of any direct or indirect legal or beneficial ownership interest is restricted by the terms of this Agreement; and (5) all certificates representing direct or indirect legal or beneficial ownership interests in you now or hereafter issued must bear a legend in conformity with applicable law reciting or referring to such restrictions. DISCLOSURE OF OWNERSHIP INTERESTS. You and each of your Owners represents, warrants and agrees that attached Appendix A is current, complete and accurate. You agree that updated copies of Appendix A will be furnished promptly to us, so that Appendix A (as so revised and signed by you) is at all times current, complete and accurate. Each person who is or becomes an Owner must execute an agreement in the form we prescribe, undertaking to be bound jointly and severally by the terms of this Agreement, the current form of which is attached hereto as Appendix B. Each person who is or becomes an Owner must execute an agreement in the form we prescribe, undertaking to be bound by the confidentiality and non-competition covenants contained in the Agreement, the current form of which is attached hereto as Appendix C. Each 6 Owner must be an individual acting in his individual capacity. In addition, if you have one or more Silent Investors, you and each of your Owners must execute the attached Appendix D. 14877234.6 04/17/14 2.3 RESPONSIBLE OWNER/MANAGEMENT OF BUSINESS. If you are, or at any time become, a business corporation, partnership, limited liability company or other legal entity, you must designate in Appendix A as the “Responsible Owner” an individual approved by us who must be an Owner and have the authority to bind you regarding all operational decisions with respect to your PLANET FITNESS BUSINESS; and have completed our training program to our satisfaction. You (or your Responsible Owner) shall exert your best efforts to the development and operation of your BUSINESS and all other PLANET FITNESS businesses you own; and absent our prior approval may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations hereunder. You (or your Responsible Owner) may request our approval of an operator that has completed our training program to our satisfaction (an “Approved Operator”) to whom you may delegate your obligations to develop and operate your BUSINESS. Such a request must be made in writing, and you must cooperate with us to provide all information we reasonably request to approve or reject the proposed individual. Such approval shall be given in our sole discretion. If we approve an Approved Operator, you must amend Appendix A to include that individual, and require that the Approved Operator sign a confidentiality and non-compete agreement with us. We shall have no responsibility, liability or obligation to any party to any such arrangement, agreement or contract, or any amendments thereto, made under this Article on account of our approval thereof or otherwise, and you agree to indemnify and hold us harmless with respect thereto. You must notify us of any proposed change of the Responsible Owner or Approved Operator and receive our written approval prior to such change. If such change results from the death or incapacitation of the Responsible Owner, you must submit a new proposed Responsible Owner within thirty (30) days after such death or incapacitation. Neither you nor your owners will, directly or indirectly, take any actions to avoid or restrict the authority requirement for the Responsible Owner. Your BUSINESS at all times must be managed by you (or your Responsible Owner or Approved Operator) or by an on-site general or assistant manager or a shift supervisor who has completed the appropriate training programs. 2.4 CONTROL GROUP. If you or one of your Affiliates have entered into an Area Development Agreement with us and are entering into this Agreement pursuant thereto, and you are a business corporation, partnership, limited liability company or other legal entity, you acknowledge and agree that the Owner or group of Owners described in Appendix A hereof that has, directly or indirectly, 51% or more ownership interest in you and voting control over its ownership interests in you (“Control Group”), has the same ownership interest in and voting control of the entity that executed the Area Development Agreement. Furthermore, you 7 acknowledge and agree that we have the right to approve in advance your ownership structure. 2.5 3. 14877234.6 04/17/14 FACILITY ORGANIZATION. Your BUSINESS must be staffed by at least one trained general manager and appropriate numbers of assistant managers, shift supervisors, and personnel so that all shifts are staffed by at least one assistant manager or shift supervisor, unless otherwise approved by us. GRANT OF RIGHTS. 3.1 GRANT OF FRANCHISE. You desire a franchise to own and operate a PLANET FITNESS business. Subject to the terms of and upon the conditions contained in this Agreement, we hereby grant you a franchise (the “Franchise”) to operate a PLANET FITNESS business solely at the location identified on Appendix G (the “Location”), and a license to use the Marks and the System in the operation thereof, for a term commencing on the Effective Date and expiring on the tenth (10th) anniversary of that date (“Initial Term”) unless sooner terminated in accordance with Article 15 hereof and provided you comply with the requirements of Article 9.4.1 below. This Agreement grants to you a “site only” Franchise for a single PLANET FITNESS business, which means that you receive no protected, territorial or other rights beyond the physical premises of your business location. We and our affiliates have the unlimited right to compete with you and license others to compete with you. You may not operate the BUSINESS from any site other than the Location without our prior written consent. If we consent to the BUSINESS’s Relocation, we have the right to charge you a Five Thousand ($5,000) Dollar relocation fee, payable prior to the Relocation. You shall operate your BUSINESS throughout the Initial Term, except as otherwise specifically provided for herein. Notwithstanding the foregoing, if you sign an Area Development Agreement (“ADA”) with us, you will receive limited protection from competition in a specified geographic area, as outlined in the ADA. 3.2 OUR RESERVATION OF RIGHTS. Except as otherwise expressly provided in this Agreement, we and all of our Affiliates (and our and their respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all of our rights with respect to the Marks, the System and PLANET FITNESS businesses anywhere in the world, and the right to engage in any business whatsoever, including the right to: (1) operate, and grant to others the right to operate, PLANET FITNESS businesses at such locations and on such terms and conditions as we deem appropriate; (2) offer to sell, or sell and distribute, any products or services under any tradenames, trademarks, service marks or trade dress, including the Marks, through any distribution channels or methods, which may include, without 8 limitation, retail stores, wholesale, and the Internet (or any other existing or future form of electronic commerce); 4. 14877234.6 04/17/14 (3) operate, and grant to others the right to operate, fitness facilities, gyms, health related establishments, and any other business(es) whatsoever identified by tradenames, trademarks, service marks or trade dress, other than the Marks, pursuant to such terms and conditions as we deem appropriate which may include locations in close proximity to your PLANET FITNESS location; (4) develop or become associated with other concepts (including dual branding or other franchise systems), whether or not using the PLANET FITNESS System, brand or Marks, and award franchises under these other concepts for locations anywhere; and (5) acquire, be acquired by, merge, affiliate with or engage in any transaction with other businesses (whether competitive or not), with units located anywhere or business conducted anywhere. These transactions may include arrangements involving competing businesses or outlets and dual branding or brand conversions. You must participate at your expense in any conversion as instructed by us. LOCATION SELECTION, LEASE OR PURCHASE OF LOCATION AND LOCATION DEVELOPMENT. 4.1 LOCATION SELECTION AND APPROVAL. You acknowledge that, following your signing this Agreement, you (with or without our assistance) will find and submit to us for our approval a Location for your BUSINESS. You acknowledge and agree that our recommendation or approval of the Location, and any information regarding the Location communicated to you regarding our standard site selection criteria for PLANET FITNESS businesses, do not constitute a representation or warranty of any kind, express or implied, as to the suitability of the Location for a PLANET FITNESS business or for any other purpose. Our recommendation or approval of the Location indicates only that we believe that the Location falls within the acceptable criteria for locations that we have established as of the time of our recommendation or approval of the Location. You acknowledge and agree that your selection of the Location is based on your own independent investigation of the suitability of the Location. We have the right to grant or withhold approval of any proposed Location in our business judgment. 4.2 PURCHASE OR LEASE OF THE LOCATION. You must lease, sublease or purchase the Location within six (6) months after signing this Agreement. Your failure to sign a lease within this timeframe constitutes grounds for immediate termination of this Agreement under Article 15.2 and the loss of your nonrefundable Initial Franchise Fee. We have the right, but not the obligation, to review the business terms of any lease, sublease, lease renewal, or purchase 9 contract for the Location, and you agree to deliver a copy to us for our review before you sign it. You agree that any lease, sublease, lease renewal, for the Location must, in form and substance satisfactory to us, include all of the provisions set forth on Appendix F attached hereto. You may not execute a lease, sublease, lease renewal, purchase contract or any modification thereof without our approval. Our approval of the lease, sublease, lease renewal, or purchase contract does not constitute a warranty or representation of any kind, express or implied, as to its fairness or suitability or as to your ability to comply with its terms. We do not, by virtue of approving the lease, sublease, lease renewal, or purchase contract, assume any liability or responsibility to you or to any third parties. Such approval indicates only that we believe that the Location and certain terms of the lease, sublease or purchase contract fall within the acceptable criteria we have established as of the time of our approval. You further acknowledge that we have advised you to seek legal counsel to review and evaluate the lease. You must deliver a copy of the fully signed lease, sublease, lease renewal, or purchase contract to us within five (5) days after its execution. 4.3 14877234.6 04/17/14 RESERVED AREA OF THE LOCATION. You acknowledge and agree that, at any time during the term of the Agreement and upon our reasonable written request, you must lease or sublease to us, our Affiliate, or our designee, at the then-current fair market rate in your geographic area for like-leased real estate space, a portion of the total square footage of the Location that shall not exceed ten (10%) percent of the total square footage of the Location (the “Reserved Area”). You acknowledge and agree that we, our Affiliate, or our designee may use the Reserved Area in any reasonable manner we deem to be appropriate, provided however, that our, our Affiliate’s, or our designee’s use of the Reserved Area shall not materially alter your fundamental rights under this Agreement. Further, you acknowledge and agree that we or our Affiliate have the unrestricted right to sublease the Reserved Area to a third party designee. You acknowledge and agree that any lease or sublease for the Location must reference, in form and substance satisfactory to us, our right to sublease the Reserved Area. If we and you are unable reasonably to agree upon the then-current fair market rate in your geographic area for like-leased real estate space, then the fair market rate will be determined by three (3) independent appraisers who collectively will conduct one (1) appraisal. We will appoint one appraiser, you will appoint one appraiser and the two party appointed appraisers will appoint the third appraiser. You and we agree to select our respective appraisers within fifteen (15) days after the date we determine that we are unable to agree upon the fair market rate, and the two appraisers so chosen are obligated to appoint the third appraiser within fifteen (15) days after the date on which the last of the two party appointed appraisers was appointed. You and we will bear the cost of our own appraisers and share equally the reasonable fees and expenses of the third appraiser chosen by the two party appointed appraisers. You and we will take reasonable actions to cause the appraisers to complete their appraisal within thirty (30) days after the third appraiser’s appointment. You acknowledge and agree that we or our designee shall have unrestricted access to and use of the Reserved Area within thirty (30) days after the fair market rate appraisal is completed. 10 4.4 14877234.6 04/17/14 LOCATION DEVELOPMENT. You are solely responsible for developing the BUSINESS, for all expenses associated with it and for compliance with the requirements of any applicable federal, state or local law, code or regulation, including those concerning the Americans with Disabilities Act (“ADA”) or similar rules governing public accommodations for persons with disabilities. We will furnish you with mandatory specifications and layouts for a PLANET FITNESS business, including requirements for dimensions, design, image, interior layout, decor, fixtures, equipment, signs, furnishings and color scheme and other suggestions. The mandatory specifications and layouts we provide will not contain the requirements of any federal, state or local laws, codes or regulations. You are obligated to have prepared, at your expense, all required construction plans and specifications to suit the shape and dimensions of the Location and to ensure that such plans and specifications comply with all applicable federal, state or local laws, codes, regulations, ordinances, building codes and permit requirements and with lease requirements and restrictions. You acknowledge that design quality is important to us. We reserve the right to require that you use our (1) designated third party project management company to prepare all project management plans for the BUSINESS, and (2) designated architect to prepare all architectural plans and drawings (together with project management plans, “Construction Development Plans”) for the BUSINESS. You must submit all Construction Development Plans, including design specifications, to us for our prior, written approval before starting to develop the Location. All final Construction Development Plans are subject to our prior, written approval. In the event that you do not use our designated architect to prepare all architectural plans and drawings for the BUSINESS , you must pay us a Construction Development Plan review fee of One Thousand Seven Hundred and Fifty Dollars ($1,750) at the time you submit your initial set of architectural plans or drawings to us. At our request, you must submit all revised or “as built” plans and specifications. Our review and approval of your Construction Development Plans is not designed to assess compliance with federal, state or local laws and regulations, including the ADA, as compliance with such laws is your sole responsibility. All development and any signage must be in accordance with the Construction Development Plans and specifications we have approved and must comply with all applicable laws, ordinances and local rules and regulations. We will furnish such guidance to you in developing the Location as we deem appropriate. We may periodically inspect the Location during its development. We do not, by approving your Construction Development Plans or specifications or inspecting the Location, assume any liability or responsibility to you or to any third parties. Such approvals and inspections shall be solely for the purpose of assuring compliance with our standards and shall not be construed as any express or implied representation or warranty that your BUSINESS complies with any applicable laws, codes or regulations (including the ADA or any other federal, state, or local law or ordinance regulating standards for the access to, use of, or modifications of buildings for any by persons whose disabilities are protected by law) or that the construction thereof is sound or free from defects. All prototype and modified Construction Development Plans and specifications for your 11 BUSINESS remain our sole and exclusive property, and you may claim no interest therein. You must start construction of your BUSINESS within sixty (60) days after you have leased, subleased or acquired the Location. You must employ a general contractor acceptable to us. You must procure all applicable construction insurance in amounts and coverages acceptable to us. You must complete construction of your BUSINESS within ninety (90) days after the start of construction. Notwithstanding the foregoing, if you demonstrate to us that you are working in good faith toward completion of construction, we may grant you an extension beyond the applicable timeframe described above, in our sole discretion. Any extensions of time are subject to our approval, which we may withhold for any reason. You must provide us with weekly progress reports during construction in a format acceptable to us. We have the right to visit and inspect, the site during the construction phase. Such visits shall be at our expense, except for visits made upon your request, which shall be at your expense. The requirement to complete construction of your BUSINESS includes obtaining all required construction and occupancy licenses and permits, developing the Location (including all outdoor features and landscaping of the Location, if applicable), installing all required fixtures, furnishings, equipment and signs, and doing all other things as may be required pursuant to this Agreement or by practical necessity to have your Location ready to open for business. Your BUSINESS may not be opened for business until we have notified you that your BUSINESS meets our requirements for opening. Notwithstanding anything to the contrary contained in this Article 4.4., you shall not be deemed to be in breach of this Article 4.4. if your failure to start construction, finish construction or open your BUSINESS as above provided results solely from windstorms, rains, floods, earthquakes, typhoons, tornados, mudslides, fires or other natural disasters. Any delay resulting from any of such causes shall extend performance accordingly, in whole or in part, as may be reasonable, except that no such cause, alone or in combination with other causes, shall extend performance more than ninety (90) days without our prior written consent, which consent may be withheld. 4.5 YOUR OBLIGATIONS. You agree, at your own expense, to do the following with respect to developing the BUSINESS at the Location: (1) secure all financing required to develop and operate the BUSINESS; (2) obtain all permits and licenses required to construct and operate the BUSINESS; (3) construct all required improvements to the Location and decorate the BUSINESS in compliance with plans and specifications we have approved, and which comply with all governmental requirements; (4) 14877234.6 04/17/14 purchase or lease and install all required fixtures, furniture, equipment, furnishings and signs required for the BUSINESS; and 12 (5) 4.6 FIXTURES, FURNISHINGS, EQUIPMENT AND SIGNS. You agree to use in developing and operating the BUSINESS only those fixtures, furnishings, equipment (including cash registers and/or point of sale (“POS”) systems, telecopiers and computer hardware and software) and signs that we have approved for PLANET FITNESS businesses as meeting our specifications and standards for quality, design, appearance, function and performance. You agree to place or display at the Location (interior and exterior) only such signs, emblems, lettering, logos and display materials that we approve from time to time. You agree to purchase or lease approved brands, types or models of fixtures, furnishings, equipment and signs only from suppliers we have designated or approved (which may include us and/or our Affiliates). You will pay the thencurrent price in effect for all such purchases you make from us and/or our Affiliates. You agree, at your own expense, to upgrade all cash registers and/or POS systems, computer hardware and software, as necessary, in order to bring the BUSINESS into compliance with our Methods of Operation. You acknowledge and agree that from time to time, we may modify the list of approved types, brands, models and/or suppliers, and you may not, after receipt of notice of such modification, reorder any type, brand or model from any supplier, which is no longer approved. If you propose to purchase any fixtures, furniture, equipment, signs or supplies of a type, brand or model, or propose to purchase from a supplier that we have not previously approved, you must notify us and submit to us such information as we may request. We may impose reasonable inspection and supervision fees on Approved Suppliers to cover our costs. 4.7 START-UP INVENTORY, FURNITURE, FIXTURES, SOFTWARE, EQUIPMENT AND SUPPLIES. Subsequent to your execution of this Agreement and prior to your commencement of operations hereunder, we will give you lists of the start-up inventory, furniture, fixtures, software, equipment and supplies we require you otherwise to obtain prior to commencing operations hereunder. You will establish independent commercial relationships with our Approved Suppliers for specific items. You will establish independent commercial relationships with other suppliers for the goods and services for which we only provide specifications. Our list of Approved Suppliers and specifications for goods and services will be set forth in the Operations Manual or in other materials we give you from time to time. 4.8 BUSINESS COMMENCEMENT. You agree not to commence operation of the BUSINESS until: (6) 14877234.6 04/17/14 purchase an initial inventory of authorized and approved products, materials and supplies. we approve the BUSINESS as developed in accordance with our specifications and standards; 13 5. preopening training has been completed by you, your Responsible Owner, your Approved Operator, and/or your employees to our satisfaction as provided in Article 6.1; (8) you have given us a copy of your lease, sublease or purchase contract for the Location; (9) the Initial Franchise Fee and all other amounts then due to us have been paid; (10) we have been furnished with copies of all insurance policies required by this Agreement, or such other evidence of insurance coverage and payment of premiums as we request or accept; and (11) you have obtained all required permits, licenses and certifications for operating the BUSINESS, and the Location is in compliance with all laws, rules and regulations. 4.9 COMMENCEMENT DEADLINE. You agree to commence BUSINESS operations within three hundred and thirty (330) days after the execution of this Agreement and within five (5) days after we notify you that the conditions set forth in this Article have been satisfied. 4.10 PRE-SALE MARKETING. You agree to conduct pre-sale marketing for the BUSINESS. The pre-sale marketing period begins no less than 45 days immediately preceding the date that you commence regular operations at the BUSINESS, and it may be as long as 180 days thereafter (“Pre-Sale Marketing Period”). You must spend an amount equal to $20,000 per every 30 days during the Pre-Sale Marketing Period on your pre-sale marketing obligations (the “PreSale Marketing Expense”). We will determine the length and start date of the Pre-Sale Marketing Period based upon the location of the BUSINESS, demographics and other factors. Such pre-sale marketing will utilize marketing and public relations programs and media and advertising materials we have approved. 4.11 OPENING ASSISTANCE. If you (or any of your affiliates) have not previously owned or managed a PLANET FITNESS business, we may provide you with such opening operational assistance as we deem appropriate to assist you in starting your operations, including on-site opening assistance for not more than five (5) days, as scheduled by us. FEES. 5.1 14877234.6 04/17/14 (7) INITIAL FRANCHISE FEE. You agree to pay us a nonrecurring and nonrefundable initial franchise fee in the amount of Ten Thousand Dollars ($10,000), that shall be due when you execute the Agreement (“Initial Franchise Fee”). The Initial Franchise Fee is non-refundable. 14 14877234.6 04/17/14 5.2 ROYALTY. You agree to pay us a nonrefundable royalty (“Royalty”) per Monthly Membership Accounting Period and Annual Membership Accounting Period via EFT. The Royalty currently is equal to five percent (5%) of the total gross monthly and annual membership fees for the BUSINESS that are due and payable to you each month and annually, as applicable, from your members through authorized EFT withdrawals (the “EFT Dues Draft”), regardless of the amount of membership fees you actually collect. We will collect the Royalty on the Monthly Membership Billing Day and Annual Membership Billing Day, pursuant to our Methods of Operation, via the EFT initiated by us or by a third party authorized by us from the designated account identified in Article 5.3 below, or by such other means as we may authorize and approve. As used in this Agreement, the term “total gross monthly and annual membership fees” means the total amount of such fees and payments that are due and payable to you from your members exclusive of any federal, state or local tax deductions or offsets. Notwithstanding the foregoing, we reserve the right, on sixty (60) days’ prior written notice to you, to calculate the Royalty with reference to the Total Net Membership Revenues of the BUSINESS. 5.3 DESIGNATED ACCOUNT AND AUTHORIZED EFT. Prior to the opening of the PLANET FITNESS BUSINESS, and as a condition thereof, you shall establish a designated bank account from which we or our authorized designee shall be authorized to withdraw in any manner which we prescribe, which may include wire transfer, any amounts due to us, our Affiliates or any Preferred Vendor from you under this Agreement, including, without limitation, Royalty fees, LAF fees, Ad Fees, training fees, consultation fees, or any other fees or monies payable by you pursuant to this Agreement. We have the right to review your sales numbers on a daily basis. On the days designated as your Monthly Membership Billing Day and Annual Membership Billing Day, we or our authorized designee shall calculate the Royalty due for that Monthly Membership Accounting Period and Annual Membership Accounting Period and withdraw such amount, along with any other amounts then due and owing under this Agreement, including, without limitation, LAF fees, Ad Fees, training fees, consultation fees, or any other fees or monies, directly from the designated account. You hereby authorize us to make such withdrawals by EFT withdrawal or any other manner we prescribe, and shall execute such documents as we require from time to time for such purpose. All costs and expenses of establishing and maintaining such designated account, including transaction fees and wire transfer fees, shall be paid by you. You agree to maintain at all times sufficient funds in such designated bank accounts for such withdrawals. 5.4 INTEREST ON LATE PAYMENTS. All amounts which you owe us and do not pay us when due will bear interest after their due date at the lesser of: (a) the highest contract rate of interest permitted by law; or (b) eighteen (18%) percent per annum. You acknowledge that this Article does not constitute our agreement to accept any payments after they are due or our commitment to extend credit to, or otherwise finance your operation of, the BUSINESS. 15 6. 5.5 APPLICATION OF PAYMENTS. Notwithstanding any designation you might make, we have the right to apply any of your payments to any of your past due indebtedness to us. You acknowledge and agree that we have the right to set off any amounts you or your owners owe us against any amounts we might owe you or your owners. 5.6 PREFERRED VENDOR PAYMENTS. You acknowledge and agree that in order to insure quality and consistency at all PLANET FITNESS businesses, we may require that you obtain goods or services from certain designated suppliers. Pursuant to our Methods of Operation, we may identify certain suppliers, that may include us, or any affiliate, as a Preferred Vendor. You hereby acknowledge and agree that in the event we receive notice from any Preferred Vendor that you are over sixty (60) days past due on any payment to such Preferred Vendor, and you have not provided any notice to the Preferred Vendor disputing such overdue amount prior to our receipt of notice from the Preferred Vendor concerning any such past due amount, you hereby authorize us to make payment on your behalf of any such overdue amount to the Preferred Vendor. You acknowledge and agree we may pay any such overdue amount to any such Preferred Vendor from your total EFT Dues Draft or by withdrawing from your designated bank account an amount equal to the overdue amount owed to the Preferred Vendor. 5.7 INTERNET MEMBERSHIP AND BALANCE PAYMENT ADMINISTRATION FEE. You agree to pay us an Internet membership and balance payment administration fee (the “Internet Membership Administration Fee”) for each customer online membership application and for each balance payment for declined transactions that we process on your behalf that identifies your Location as the principle location for the customer membership. The Internet Membership Administration Fee shall be in an amount we shall specify to you under our Methods of Operation, and that reasonably we may amend from time to time during the term of the Agreement, in our business judgment. The Internet Membership Administration Fee shall be payable monthly in the same manner as the Royalty due hereunder and you authorize us to withdraw amounts due from your total monthly EFT Dues Draft. 5.8 INSPECTION AND COMPLIANCE REIMBURSEMENT. You agree to reimburse us for our actual costs if, after an inspection of your PLANET FITNESS business, we determine (in our business judgment) that additional follow up inspections or assessments are required. Our actual costs may include (but are not necessarily limited to) travel, meal and hourly wage expenses. TRAINING, ASSISTANCE, AND METHODS OF OPERATION. 6.1 14877234.6 04/17/14 TRAINING. Before the BUSINESS begins operating, we will furnish initial training on the operation of a PLANET FITNESS business to you (or, if you are a corporation or partnership, your Responsible Owner), and up to two (2) additional Owners or employees you elect to enroll in the training program, that we approve. Initial training consists of a minimum of two (2) working days of 16 training for you (or your Responsible Owner), and your Owners or employees to be furnished at our training location or at an operating PLANET FITNESS business. You (or your Responsible Owner), and your Owners or employees are required to complete the initial training to our satisfaction. If you are an existing franchisee and you have previously completed our initial training program, you will not be required to attend the initial training program, however, we may require that certain of your employees and that any new general manager complete the initial training program. You also are required to participate in all other activities required to operate the BUSINESS. Although we will furnish initial training to you (or your Responsible Owner), and up to two (2) additional Owners or employees at no additional fee or other charge, you will be responsible for all travel and living expenses and compensation which you (or your Responsible Owner) and your Owners or employees incur in connection with training. If we determine that you (or your Responsible Owner) are unable to complete initial training to our satisfaction, we have the right to terminate this Agreement pursuant to Article 15 hereof. 6.2 REFRESHER TRAINING. We may require you (or your Responsible Owner) and/or previously trained and experienced employees to attend periodic refresher training courses at such times and locations that we designate, and we may charge reasonable fees for such courses. We also may require you to pay us fees for training additional employees or your new employees hired after your BUSINESS commences operations. 6.3 GENERAL GUIDANCE. We may advise you from time to time regarding operating issues concerning the BUSINESS disclosed by reports you submit to us or on-site inspections we make from time to time. Such guidance may be furnished in our Operations Manual, bulletins or other written materials and/or during telephone consultations and/or consultations at our office or the BUSINESS. In addition, we may furnish guidance to you with respect to: 6.4 14877234.6 04/17/14 (1) standards, specifications and operating procedures and methods utilized by the BUSINESS; (2) purchasing required fixtures, furnishings, equipment, signs, products, materials and supplies; (3) advertising and marketing programs; (4) employee training; (5) administrative, bookkeeping and accounting procedures; and (6) use of authorized and approved computer systems. ON-SITE CONSULTATION AND ADDITIONAL GUIDANCE. During the term of this Agreement, additional guidance may be provided in any of the following ways: 17 6.5 14877234.6 04/17/14 (1) Internet and telephone consultation during such times as are outlined in the Operations Manual; (2) wholesaling services whereby we may ourselves act as an approved or designated source for products, merchandise, accessories, fixtures, furnishings, equipment, signs, etc.; (3) manufacturing services whereby we may manufacture, package and ship products, merchandise, accessories, fixtures, furnishings, equipment, signs, etc. to you; (4) ongoing marketing programs to fulfill our obligations in Article 10 of this Agreement; (5) meetings, seminars or conventions whereby we may get together with you and other PLANET FITNESS franchisees for business or social purposes; (6) research and development regarding Methods of Operation; and/or (7) at your request, we may furnish additional guidance and assistance and, in such a case, may charge the per diem fees and charges we establish from time to time. If you request, or if we require, additional or special training for your employees, all of the expenses that we incur in connection with such training, including per diem charges and travel and living expenses for our personnel, will be your responsibility. OPERATIONS MANUAL. During the term of this Agreement, we will allow you to use one (1) copy of our Operations Manual, consisting of such materials (possibly including, but not limited to, audio tapes, videotapes, magnetic media, computer software and written materials) that we furnish to franchisees from time to time for use in operating a PLANET FITNESS business. The Operations Manual contains mandatory and suggested specifications, standards, operating procedures and rules that we prescribe from time to time for the operation of a PLANET FITNESS business and information relating to your other obligations under this Agreement and related agreements (“Methods of Operation”). The Operations Manual may be modified from time to time to reflect changes in the law, marketplace or Methods of Operation. You agree to keep your copy of the Operations Manual current and in a secure location at the BUSINESS. In the event of a dispute relating to its contents, the master copy of the Operations Manual we maintain at our principal office will be controlling. You may not at any time copy, duplicate, download, record or otherwise reproduce any part of the Operations Manual. The Operations Manual and the Methods of Operation communicated to you shall be deemed to be a part of this Agreement. You acknowledge and agree that in the future, the Operations Manual and other system communications may only be available on the Internet, our intranet system or other online or computer data transfer communications. The Operations Manual 18 (and each component thereof) constitutes a confidential trade secret and will remain our property. You agree that these requirements are reasonable and necessary to preserve the identity, reputation, value and goodwill of the system. The Operations Manual, as amended, is intended to further the purposes of this Agreement and is specifically incorporated into this Agreement. 14877234.6 04/17/14 6.6 COMPLIANCE WITH METHODS OF OPERATION. You acknowledge and agree that your operation and maintenance of the BUSINESS in accordance with our Methods of Operation is essential to preserve the goodwill of the Marks and all PLANET FITNESS businesses. Therefore, at all times during the term of this Agreement, you agree to operate and maintain the BUSINESS strictly in accordance with our Methods of Operation, as we periodically modify and supplement them during the term of this Agreement. Further, if you fail to cure any default under this Agreement that relates (in whole or in part) to the Methods of Operation, then without waiving any of our rights under Article 15 herein, we may, in our business judgment, provide you with written notice that we have temporarily elected not to terminate this Agreement and allow you additional time to cure the default(s), provided that you pay to us, during the additional cure period via the EFT Dues Draft, an additional two percent (2%) of the total gross membership fees that are due and payable to you from your members. Our collection of the two percent (2%) fee and temporary extension of the applicable cure period does not waive our right to require your full compliance with this Agreement. 6.7 WORKS MADE-FOR-HIRE. All ideas, concepts, procedures, techniques or processes concerning the PLANET FITNESS BUSINESS, whether or not protectable intellectual property and whether created by or for you or your owners or employees, must be promptly disclosed to us and will be deemed to be our sole and exclusive property, part of the System, and works made-for-hire for us. To the extent any item does not qualify as a “work made-for-hire” for us, you will assign ownership of that item, and all related rights to that item, to us and must take whatever action (including signing an assignment agreement or other documents) we request to show our ownership or to help us obtain intellectual property rights in the item. 6.8 GENERAL CONDUCT. You will not, and will not allow your employees to, engage in conduct that, in our sole determination, may result in or tends to (a) degrade, offend, shock or insult the community, (b) ridicule public morals or decency, or (c) prejudice us, our affiliates, the Trademarks or the System generally. You will (and will ensure that your employees) conduct yourself with due regard to public conventions and morals. 6.9 COMPLIANCE WITH DATA SECURITY GUIDELINES. You shall use your best efforts to protect your customers against a cyber-event, identity theft or theft of personal information. You shall at all times be compliant with: (a) the Payment Card Industry Data Security Standards (“PCI DDS”),(b) the NACHA ACH Security Framework, 3) Payment Rules (as defined below), (c) state and 19 federal laws and regulations relating to data privacy, data security and security breaches and (d) our security policies and guidelines, all as may be amended from time to time (collectively, “Data Security Safeguards”). For purposes of this Article 6.9: “Payment Rules” means the operating rules and regulations of Payment Processors and any applicable Payment Network, as in effect from time to time; “Payment Processors” means all credit card, debit card and/or ACH processors whose services We may require you to utilize, as well as payment gateway service providers; and “Payment Network” means Visa, MasterCard, and any credit or debit card network issuing credit or debit cards or their duly authorized entities, agents, or affiliates, together with NACHA. You are expected to obtain advice from appropriate legal and security consultants to ensure that you operate your PLANET FITNESS business at all times in full compliance with the Data Security Safeguards. 7. 14877234.6 04/17/14 MARKS. 7.1 OWNERSHIP AND GOODWILL OF MARKS. Your right to use the Marks is derived solely from this Agreement and limited to your operation of the BUSINESS pursuant to and in compliance with this Agreement and Methods of Operation, which we prescribe from time to time during its term. Your unauthorized use of the Marks will be a breach of this Agreement and an infringement of our rights in and to the Marks. You acknowledge and agree that your usage of the Marks and any goodwill established by such use will be exclusively for our and our Affiliates’ benefit and that this Agreement does not confer any goodwill or other interests in the Marks upon you (other than the right to operate the BUSINESS in compliance with this Agreement). All provisions of this Agreement applicable to the Marks apply to any additional proprietary trademarks and service marks and commercial symbols we authorize you to use. You will not represent in any manner that you have any ownership in the Marks or the right to use the Marks except as provided in the Agreement and in the Operations Manual. 7.2 LIMITATIONS ON YOUR USE OF MARKS. You agree to use the Marks as the sole identification of the BUSINESS, except that you agree to identify yourself as the independent owner thereof in the manner we prescribe. You may not use any Marks as part of any corporate or legal business name or as part of an Internet domain name or Internet e-mail address or with any prefix, suffix or other modifying words, terms, designs or symbols (other than logos licensed to you hereunder), or in any modified form, nor may you use any Marks in connection with the performance or sale of any unauthorized services or products or in any other manner we have not expressly authorized in writing. No Marks may be used in any advertising concerning the transfer, sale or other disposition of the BUSINESS or an ownership interest in you. You agree to display the Marks in the manner we prescribe at the BUSINESS, on supplies or materials we designate and in connection with forms and advertising and marketing materials. You agree to give such notices of trademark and service marks registrations; i.e., “®”, “™”, as we specify and to obtain any fictitious or assumed name registrations required 20 under applicable law. You agree to withdraw any fictitious or assumed name registrations immediately upon termination or expiration of this Franchise Agreement. 8. 7.3 NOTIFICATION OF INFRINGEMENTS AND CLAIMS. You agree to notify us immediately of any apparent infringement or challenge to your use of any Marks, or of any claim by any person of any rights in any Marks, and agree not to communicate with any person other than us, our attorneys and your attorneys in connection with any such infringement, challenge or claim. We have the right to take such action as we deem appropriate and the right to control exclusively any litigation, United States Patent and Trademark Office (“USPTO”) proceeding or any other administrative proceeding arising out of any such infringement, challenge or claim or otherwise relating to any Marks. You agree to sign any and all instruments and documents, render such assistance and do such acts and things as, in the opinion of our attorneys, may be necessary or advisable to protect and maintain our interests in any litigation or USPTO proceeding or other proceeding or otherwise to protect and maintain our interests in the Marks. 7.4 DISCONTINUANCE OF USE OF MARKS. If it becomes advisable at any time for us and/or you to modify or discontinue the use of any Marks and/or use one or more additional or substitute trademarks or service marks, you agree to comply with our directions within a reasonable time after receiving notice thereof. We will not be obligated to reimburse you for any expenses or loss of revenue attributable to any modified or discontinued Marks or for any expenditures you make to promote a modified or substitute trademark or service mark. 7.5 INDEMNIFICATION OF FRANCHISEE. We agree to indemnify you against, and to reimburse you for, all damages for which you are held liable in any proceeding arising out of your authorized use of any Mark pursuant to and in compliance with this Agreement and, except as provided herein, for all costs you reasonably incur in defending any such claim brought against you, provided you have timely notified us of such claim and provided further that you and your owners and affiliates are in compliance with this Agreement and all other agreements entered into with us or any of our Affiliates. We are entitled to prosecute, defend and/or settle any proceeding arising out of your use of any Mark pursuant to this Agreement, and, if we undertake to prosecute, defend and/or settle any such matter, we have no obligation to indemnify or reimburse you for any fees or disbursements of any legal counsel retained by you. CONFIDENTIAL INFORMATION. 8.1 14877234.6 04/17/14 CONFIDENTIAL INFORMATION. We possess (and will continue to develop and acquire), and may disclose to you, certain confidential information (the “Confidential Information”) relating to the development and operation of PLANET FITNESS businesses, which may include (without limitation): 21 8.2 14877234.6 04/17/14 (1) location selection criteria and plans and specification for the development of PLANET FITNESS businesses; (2) methods, formats, specifications, standards, systems, procedures, the Operations Manual, any other proprietary materials, the sales and marketing techniques used, and knowledge of and experience in developing and operating PLANET FITNESS businesses; (3) sales, marketing and advertising programs and techniques for PLANET FITNESS businesses; (4) knowledge of specifications for and suppliers of certain fixtures, furnishings, equipment, products, materials and supplies; (5) knowledge of the operating results and financial performance of PLANET FITNESS businesses other than the BUSINESS. (6) methods of training and management relating to PLANET FITNESS businesses; (7) computer system and software programs used or useful in PLANET FITNESS businesses; and (8) any and all other information related to the BUSINESS or PLANET FITNESS businesses generally that is labeled proprietary or confidential. This includes, without limitation, all customer and membership lists and information for the BUSINESS and PLANET FITNESS businesses generally. FOR BUSINESS USE ONLY. We will disclose our Confidential Information to you solely for your use in the operation of your BUSINESS. The Confidential Information is proprietary and includes our trade secrets. During the Term and thereafter: (a) you and your Owners may not use the Confidential Information in any other business or capacity (you and your Owners acknowledge such use is an unfair method of competition); (b) you and your Owners must exert your best efforts to maintain the confidentiality of the Confidential Information; (c) you and your Owners may not make unauthorized copies of any portion of the Confidential Information disclosed in written, electronic or other form; and (d) you and your Owners must implement all reasonable procedures we prescribe from time to time to prevent unauthorized use or disclosure of the Confidential Information, including the use of nondisclosure agreements with your Owners, officers, directors, managers, assistant managers and shift supervisors, and you and your Owners must deliver such agreements to us. At the end of the Term, you and your Owners must deliver to us all such Confidential Information in your possession. Your restrictions on disclosure and use of Confidential Information do not apply to information or techniques which are or become generally known in the fitness industry (other than through your own disclosure), provided you obtain our prior written consent to such disclosure or use. You acknowledge and agree 22 that you will not acquire any interest in Confidential Information, other than the right to utilize Confidential Information disclosed to you in operating the BUSINESS during the term of this Agreement, and that the use or duplication of any Confidential Information in any other business will constitute an unfair method of competition and a violation of this Agreement. 8.3 9. PLANET FITNESS METHODS OF OPERATION. 9.1 14877234.6 04/17/14 IDEAS, CONCEPTS, TECHNIQUES OR MATERIALS. All processes, ideas, concepts, methods, techniques or materials relating to a PLANET FITNESS business, whether or not constituting protectable intellectual property, and whether created by or on behalf of you or your Owners in connection with the development or operation of your BUSINESS, will be promptly disclosed to us. If we adopt any of them as part of the System, they will be deemed to be our sole and exclusive property and part of the System and deemed to be works made for hire for us. You and your Owners agree to sign whatever assignment or other documents we may request from time to time to evidence our ownership or to assist us in securing intellectual property rights in such processes, ideas, concepts, methods, techniques or materials. COMPLIANCE WITH METHODS OF OPERATION. You acknowledge that each and every aspect of the interior and exterior appearance, layout, decor, services and operation of your BUSINESS is important to protect our reputation and goodwill and to maintain uniform operating standards under the Marks. Any required standards exist to protect our interest in the PLANET FITNESS system and the Marks, and are not for the purpose of establishing any control, or the duty to take control, over those matters that are clearly reserved to you. You agree to comply with all mandatory specifications, standards and operating procedures, as modified from time to time (whether contained in the Operations Manual or any other communication) relating to the appearance, function, cleanliness or operation of a PLANET FITNESS business, including: (1) design, layout, decor, appearance and lighting; periodic maintenance, cleaning, pest control and sanitation; periodic remodeling; replacement of obsolete or worn out leasehold improvements, fixtures, furnishings, equipment and signs; periodic painting; and use of interior and exterior signs, emblems, lettering and logos and the illumination thereof; (2) types, models and brands of required fixtures, furnishings, equipment, signs, materials and supplies; (3) required or authorized products and product categories; (4) designated or Approved Suppliers (which may be limited to or include us) of fixtures, furnishings, equipment, signs, products, materials, supplies, and services; 23 14877234.6 04/17/14 (5) terms and conditions of the sale and delivery of, and terms and methods of payment for products, materials, supplies and services including direct labor, that you obtain from us, our Affiliates or others; (6) sales, marketing, advertising and promotional programs and materials and media used in such programs; (7) use and display of the Marks; (8) compliance with Company philosophy and mission including, without limitation, compliance with the Judgment Free Zone™ philosophy and unlimited free group fitness instruction; (9) staffing levels for the BUSINESS and matters relating to managing the BUSINESS; communication to us of the identities of the BUSINESS’s personnel; qualifications, training, dress and appearance for both management and hourly employees; and sale procedures and customer service; (10) days and hours of operation of the BUSINESS; (11) participation in market research and testing and product and service development programs; (12) acceptance of credit cards, other payment systems and check verification services; (13) bookkeeping, accounting, data processing and record keeping systems and forms; methods, formats, content and frequency of reports to us of sales, revenue, financial performance and condition; and furnishing tax returns and other operating and financial information to us; (14) types, amounts, terms and conditions of insurance coverage required to be carried for the BUSINESS and standards for underwriters of policies providing required insurance coverage; our protection and rights under such policies as an additional named insured; required or impermissible insurance contract provisions; assignment of policy rights to us; periodic verification of insurance coverage that must be furnished to us; our right to obtain insurance coverage for the BUSINESS at your expense if you fail to obtain required coverage; our right to defend claims; and similar matters relating to insured and uninsured claims; (15) complying with applicable laws; obtaining required licenses and permits; adhering to good business practices; observing high standards of honesty, integrity, fair dealing and ethical business conduct in all dealings with customers, suppliers and us; and notifying us if any action, suit or proceeding is commenced against you or the BUSINESS; and 24 (16) 9.2 PROVISIONS OF THIS AGREEMENT. You agree that the Methods of Operation prescribed from time to time in the Operations Manual, or otherwise communicated to you in writing or other tangible form, constitute provisions of this Agreement as if fully set forth herein. All references to this Agreement include all Methods of Operation as periodically modified. 9.3 MODIFICATION OF METHODS OF OPERATION. We may periodically modify Methods of Operation, which may accommodate regional or local variations as we determine, and any such modifications may obligate you to invest additional capital in the BUSINESS (“Capital Modifications”) and/or incur higher operating costs; provided, however, that such modifications will not alter your fundamental status and rights under this Agreement. We will not obligate you to make any Capital Modifications when such investment cannot, in our reasonable judgment, be amortized during the remaining term of this Agreement, unless we agree to extend the term of this Agreement so that such additional investment, in our reasonable judgment, may be amortized, or unless such investment is necessary in order to comply with applicable laws. 9.4 CONDITION OF YOUR BUSINESS. You must maintain your BUSINESS’s condition and appearance so that it is attractive, clean and efficiently operated in accordance with the Operations Manual. You agree to maintain your BUSINESS’s condition and appearance and to make such modifications and additions to its layout, decor, operations, and general theme as we require from time to time, including replacement of worn-out or obsolete fixtures, equipment, furniture, and signs, repair of the interior and exterior and appurtenant parking areas, and periodic cleaning and redecorating. You may not make any material modification to the BUSINESS premises, including but not limited to, expansions or reductions in size, without our prior, written consent. If at any time the general state of repair, appearance or cleanliness of your BUSINESS, or its fixtures, equipment, furniture, or signs, does not meet our standards, we may notify you and specify the action you must take to correct such deficiency. If, within ten (10) days after receiving such notice, you fail or refuse to initiate and thereafter continue in good faith and with due diligence a bona fide program to complete such required maintenance, we have the right (in addition to our rights under Article 13), but not the obligation, to enter the Location and do such maintenance on your behalf and at your expense. You must promptly reimburse us for such expenses. (1) 14877234.6 04/17/14 regulation of such other aspects of the operation and maintenance of the BUSINESS, including but not limited to maximum and minimum prices charged for products and services offered through the BUSINESS, that we determine from time to time to be useful to preserve or enhance the efficient operation, image or goodwill of the Marks and PLANET FITNESS businesses. We reserve the right to require you to replace and update at your BUSINESS: (a) all cardio equipment every four (4) years during the Initial 25 Term hereof, and (b) all other exercise equipment every six (6) years during the Initial Term hereof, as specified in the Operations Manual or otherwise in writing from time to time. You must also periodically, upgrade and/or remodel your BUSINESS premises pursuant to our plans and specifications, provided, however, that, with the exception of signage, we will not require substantial remodeling more often than every four (4) years during the Initial Term. We will advise you six months prior to requiring any substantial remodeling or replacement of your cardio or of your other exercise equipment. (2) 14877234.6 04/17/14 If your BUSINESS is damaged or destroyed by fire or other casualty, you must initiate within thirty (30) days (and continue until completion) all repairs or reconstruction to restore your BUSINESS to its original condition. If, in our reasonable judgment, the damage or destruction is of such a nature that it is feasible, without incurring substantial additional costs, to repair or reconstruct your BUSINESS in accordance with the then-standard PLANET FITNESS layout and decor specifications, we may require you to repair or reconstruct your BUSINESS in accordance with those specifications. You may not make any alterations to your BUSINESS, nor any replacements, relocations or alterations of fixtures, equipment, furniture or signs, without our written approval. We have the right at your expense to rectify any replacements, relocations or alterations not previously approved by us. 9.5 UNIFORM IMAGE. You agree that your BUSINESS will offer for sale such services, products, and merchandise related to the PLANET FITNESS concept that we determine from time to time to be appropriate for your BUSINESS. You further agree that your BUSINESS will not, without our written approval, offer any services or products (including promotional items) not then authorized by us. Your BUSINESS may not be used for any purpose, other than the operation of a PLANET FITNESS business in compliance with this Agreement. You agree that your BUSINESS will offer courteous and efficient service and a pleasant ambiance, consistent with your acknowledgements in Article 1.2. hereof. You may offer personal training only if permitted by our then-current personal training policies or as we otherwise approve in writing. 9.6 PURCHASE OF OTHER PRODUCTS. You acknowledge and agree that the reputation and goodwill of PLANET FITNESS businesses are based on, and can be maintained only by, the sale of distinctive high quality services and ancillary merchandise. Therefore, you agree that your BUSINESS will use and/or offer for sale only such services, merchandise, uniforms, forms, labels and other supplies that conform to our specifications and quality standards and/or are purchased from suppliers approved by us (which may include us and/or any of our Affiliates). You acknowledge that we or our affiliate are and may be the sole supplier for fitness equipment or other products. We may modify the list of approved brands and/or suppliers from time to time. After notice of such modification, you may not re-order any brand or reorder from any supplier which 26 is no longer approved. If you propose to use any brand and/or supplier which is not then approved by us, you must first notify us and submit sufficient information, specifications and samples concerning such brand and/or supplier so that we can decide whether such brand complies with our specifications and standards and/or such supplier meets our Approved Supplier criteria. We have the right to charge reasonable fees to cover our costs. We will notify you of our decision within a reasonable period of time. We may prescribe procedures for the submission of requests for approval and impose obligations on suppliers, which we may require to be incorporated in a written agreement. We may impose limits on the number of suppliers and/or brands for any of the foregoing items including designating us or an affiliate as a sole supplier. You must maintain at all times an inventory of approved merchandise related to the PLANET FITNESS concept sufficient in quantity, quality and variety to realize your BUSINESS’s full potential. We may conduct market research to determine consumer trends and salability of new services and products. You agree to cooperate by participating in our market research programs; by test marketing new services and merchandise in your BUSINESS and providing us timely reports and other relevant information regarding such market research. You must purchase a reasonable quantity of such test products and make a reasonable effort to sell them. 14877234.6 04/17/14 9.7 COMPLIANCE WITH LAWS. You must maintain in force in your name all required license permits and certificates relating to the operation of your BUSINESS. You must operate your BUSINESS in full compliance with all applicable laws, ordinances and regulations. You must notify us in writing immediately upon the commencement of any legal or administrative action, or the issuance of an order of any court, agency or other governmental instrumentality, which may adversely affect the development, occupancy or operation of your BUSINESS or your financial condition; or the delivery of any notice of violation or alleged violation of any law, ordinance or regulation, including those relating to health or sanitation at your BUSINESS. All of your advertising and promotion must be completely factual and must conform to the highest standards of ethical advertising. In all dealings with us, as well as your customers, suppliers, lessors and the public, you must adhere to the highest standards of honesty, integrity, fair dealing and ethical conduct. You agree to refrain from any business or advertising practice which may be injurious to our business, to the business of other PLANET FITNESS businesses or to the goodwill associated with the Marks. 9.8 PERSONNEL. You are solely responsible for all employment decisions with respect to your personnel, including hiring, firing, compensation, training, supervision and discipline, and regardless whether you receive advice from us on any of these subjects. You may not recruit or hire any person who is an employee of ours or of any PLANET FITNESS business operated by us, our Affiliates or another franchisee of ours without obtaining the employer’s consent, which consent may be withheld for any reason. Likewise, we may not recruit or hire any person who is an employee of yours or your affiliates without obtaining the employer’s consent, which consent may be withheld for any reason. 27 14877234.6 04/17/14 9.9 INSURANCE. You must procure and maintain in force from an insurance company with an “A” or better rating by AM Best and a Financial Rating of “IX” or better primary insurance coverage as follows: commercial general liability insurance (including completed/operations/product liability, and coverage for any consolidated claims against us and our Affiliates); Special Form property insurance, including fire and extended coverage, vandalism and malicious mischief insurance for 100% of the replacement value of your BUSINESS and its contents; and such other insurance policies, such as business interruption insurance, professional liability insurance, abuse and molestation insurance, tanning insurance, employment practices liability insurance, automobile insurance, unemployment insurance, cyber liability insurance, excess umbrella insurance and workers’ compensation insurance (with a broad form all-states endorsement) as we specify from time to time and as required by law. For any interruption in the operation of the BUSINESS due to a security breach, whether or not you have sufficient insurance coverage, you shall continue to pay us, during such period of interruption, continuing Royalty fees based on the average monthly Royalty fees paid by you during the twelve (12) months immediately preceding the period of interruption. For any interruption in the operation of the BUSINESS for any other reason, you shall continue to pay us, during such period of interruption, continuing Royalty fees based on the average monthly Royalty fees paid by you during the twelve (12) months immediately preceding the period of interruption, if you have business interruption insurance. Your insurance must also cover identity theft and theft of personal information, including the costs of notifying members whose information has been compromised. All insurance policies must be issued on an “admitted” basis by carriers approved by us (as set forth in the Operations Manual or otherwise in writing); contain such types and minimum amounts of coverage, exclusions and maximum deductibles as we prescribe from time to time in our current Franchise Disclosure Document or otherwise in writing from time to time; name us and our Affiliates, including but not limited to Planet Fitness Equipment, LLC and PFIP, LLC, as additional insureds; provide for thirty (30) days prior written notice to us of any material modification, cancellation or expiration of such policy; and include such other provisions as we may require from time to time. At our request, you must furnish us with a Certificate of Insurance on an annual basis. Excess and Surplus Lines insurance is specifically prohibited. If you fail or refuse to maintain any required insurance coverage, or to furnish satisfactory evidence thereof, we, at our option and in addition to our other rights and remedies hereunder, may obtain such insurance coverage on your behalf. If we do so, you must fully cooperate with us in our effort to obtain such insurance policies and pay us any costs and premiums we incur. Your obligation to maintain insurance coverage is not diminished in any manner by reason of any separate insurance we may choose to maintain, nor does it relieve you of your indemnification obligations under this Agreement. 9.10 QUALITY CONTROL. We have the right to establish “quality control” programs, such as a “secret shopper” program, a customer satisfaction measurement program, and/or a “customer intercept” program, to ensure the highest quality of service and products in all PLANET FITNESS businesses. 28 You shall participate in any such quality control programs, and bear your pro-rata share, as determined by us, of the costs of any such program. 10. 9.11 PRICING POLICIES. We reserve the right to establish prices for the products and services you sell, both minimum and maximum, subject to applicable law. 9.12 MEMBER DUES POLICIES. You shall require at least ninety percent (90%) of your members to pay their membership dues on a monthly basis by EFT and shall not permit more than ten percent (10%) of your members during any month to be paid-in-full members. All Black Card memberships shall be paid on a monthly basis and may never be paid-in-full. All rates, discounts, and promotions are subject to our prior written approval. 9.13 RECIPROCAL MEMBERSHIP. You must participate fully in any reciprocal access program (currently the Black Card program, as we may modify from time to time) and/or customer loyalty program(s) we may establish (collectively, “Reciprocal Membership”), in accordance with the policies and procedures set forth in the Operations Manual, through communications from us and as modified from time to time. You agree and acknowledge that any reciprocal usage by Planet Fitness members of other franchisees and us or when a person redeems any membership benefits or other customer loyalty program benefits at your BUSINESS, you are not entitled to reimbursement for membership fees or the cost of goods or services provided to the member as a reciprocal access member or under any customer loyalty program. Currently, Black Card members of other Planet Fitness franchise locations have access to your location up to ten (10) times per month and your Black Card members will have access to other locations up to ten (10) times per month. 9.14 MEMBER TRANSFER POLICY. You agree to comply with the member transfer policy as we establish from time to time. Currently, members are allowed to transfer to another location if they have been a member of their current location for more than three (3) months and are current on their dues. You acknowledge and agree that upon a transfer, the member’s ongoing monthly dues shall be transferred to the new location unless such member is prepaid in which case you agree to service the remaining prepaid term. 9.15 FRANCHISE MANAGEMENT. You agree to actively use and monitor Franchise Management in connection with the development and operation of your BUSINESS. MARKETING. 10.1 14877234.6 04/17/14 NATIONAL ADVERTISING. Recognizing the value of advertising and marketing to the goodwill and public image of PLANET FITNESS businesses and the PLANET FITNESS brand, we have established and administer a National Advertising Fund (“NAF”) for the creation and development of marketing, advertising and related programs and materials, including electronic, 29 print and Internet media as well as the planning and purchasing of national and/or regional network advertising to promote and enhance the PLANET FITNESS brand in such manner and media as we determine. You agree to contribute to the NAF such amounts that we prescribe from time to time, not to exceed two (2%) percent of the EFT Dues Draft (the “Ad Fee”), payable monthly in the same manner as the Royalty due hereunder. We reserve the right to change the two (2%) percent maximum limit on NAF contributions (as well as the maximum limit on Local Advertising Funds contributions) in the future by gaining an approval vote by either (i) sixty six (66%) percent of all then existing company and franchised PLANET FITNESS businesses or (ii) fifty one (51%) percent of all then existing franchised PLANET FITNESS businesses. Voting will be accomplished through a system of one vote per eligible PLANET FITNESS business. We will direct all programs financed by the NAF and retain the right to determine the creative concepts materials and endorsements used therein and the geographic market and media placement and allocation thereof. You agree that the NAF may be used to pay the costs of preparing and producing video, audio and written advertising materials; website design, development and updating; electronic advertising efforts, including search engine optimization and social media networks and related platforms; administering regional and multiregional advertising programs, including, without limitation, purchasing direct mail and other media advertising; administrative and other costs associated with all NAF efforts; and employing advertising, promotion and marketing agencies to assist therewith and supporting public relations, market research and other advertising promotion and marketing activities and amounts expended pursuant to Article 10.2. below. The NAF will furnish you with samples of advertising, marketing formats, promotional formats and other materials at no additional cost to you when we deem appropriate. Multiple copies of such materials will be furnished to you at our direct cost of producing them plus any related shipping handling and storage charges. We will seek the advice of owners of PLANET FITNESS businesses by formal or informal means with respect to the creative concepts and media used for programs financed by the NAF. All marketing or other materials the NAF creates itself or has created for its use shall be owned by the NAF. We may establish a Marketing Advisory Council (“MAC”). Members of the MAC are appointed by us, and the MAC serves only in an advisory capacity. We reserve the right to establish an election process for the selection of MAC members. The final authority on all programs financed by the NAF will rest with us, and we will have sole decision making authority over all aspects of such programs, including national or regional media, creative, concepts, materials, endorsements, agencies and suppliers. We have the right to change or dissolve the MAC. 10.2 14877234.6 04/17/14 ACCOUNTING. The NAF will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs, travel expenses and overhead as we may incur in activities related to the administration of the NAF and its programs including, without limitation, conducting market research, preparing advertising promotion and marketing materials, and collecting and accounting for contributions to the NAF. The NAF will have the right to negotiate and retain any 30 commissions or marketing payments received from suppliers of any marketing or other materials or products. We may spend, on behalf of the NAF, in any fiscal year, an amount that is greater or less than the aggregate contribution of all PLANET FITNESS businesses to the NAF in that year and the NAF may borrow from us or others to cover deficits or invest any surplus for future use. All interest earned on monies contributed to the NAF will be used to pay advertising costs before other assets of the NAF are expended. We will prepare an annual statement of monies collected and costs incurred by the NAF within 120 days following the close of the fiscal year, and furnish the statement for the prior fiscal year to you upon written request. We have the right to cause the NAF to be incorporated or operated through a separate entity at such time as we deem appropriate and such successor entity will have all of the rights and duties specified herein. 14877234.6 04/17/14 10.3 NO PROPORTIONALITY. You acknowledge that the NAF is intended to maximize recognition of the Marks and patronage of PLANET FITNESS businesses. Although we will endeavor to utilize the NAF to develop advertising and marketing materials and programs and to place advertising that will benefit all PLANET FITNESS businesses, we undertake no obligation to ensure that expenditures by the NAF in or effecting any geographic area are proportionate or equivalent to the contributions to the NAF by PLANET FITNESS businesses operating in that geographic area. Nor are we under any obligation to ensure that any PLANET FITNESS business will benefit directly or in proportion to its NAF contributions paid to the NAF from the development of advertising and marketing materials or the placement of advertising. Except as expressly provided in this Article, we assume no direct or indirect liability or obligation to you with respect to collecting amounts due to, or maintaining, directing or administering the NAF. We do not act as trustee or in any other fiduciary capacity with respect to the NAF. 10.4 DEFERRALS OR REDUCTIONS. We reserve the right to defer or reduce contributions of a PLANET FITNESS business franchisee and, upon thirty (30) days’ prior written notice to you, to reduce or suspend your payment of contributions to the NAF and suspend operations of the NAF for one or more periods of any length and to terminate (and if terminated to reinstate) the NAF. If the NAF is terminated, all unspent monies on the date of termination will be distributed to our franchisees in proportion to their respective contributions to the NAF during the preceding three (3) month period, and amounts required to be paid pursuant to Article 10.1. above shall be added to amounts required to be expended pursuant to Article 10.5. below. 10.5 LOCAL ADVERTISING. In addition to the contributions you pay to the NAF and the Pre-Sale Marketing Expense, you agree to spend the greater of $5,000 per month or 7% of the total EFT Dues Draft of monthly and annual membership fees for your BUSINESS for locally advertising and promoting your BUSINESS. These amounts spent on local advertising and promotion will be designated as Local Advertising Funds (“LAF”). At our request, you shall furnish us with copies of invoices and other documentation evidencing your compliance with this 31 Article 10.5. If, in our business judgment we determine that you are underperforming or not spending the LAF on appropriate media placement, we may collect the LAF from you and administer it on your behalf. Moreover, if we determine, at some later date, that you have spent an amount less than two percent (2%) of the EFT Dues Draft during the then most recently completed four (4) consecutive fiscal months for locally advertising and promoting your BUSINESS, we may collect LAF contributions from you directly. We may collect the LAF from you and other franchisees if, in our business judgment, we determine such conduct is appropriate. We shall provide you with not less than thirty (30) days notice of any determination by us which changes the amount of the LAF you must spend or the method of its expenditure. LAF contributions will be payable on the first business day following the immediately preceding Accounting Period together with the Royalty Fees due hereunder. Said funds may be electronically drafted from the designated account referred to in Article 5.5. hereof. The LAF monies will be used to pay for the cost of implementing local marketing plans developed by you and approved by us or, if we collect LAF contributions from you, to reimburse you (up to an amount not to exceed the LAF contributions so collected) for the costs incurred by you in implementing local marketing plans developed by you and approved by us. For these purposes, advertising expenditures include: (a) amounts contributed to advertising cooperatives; and (b) amounts spent by you for advertising media, such as television, radio, Internet, newspaper, billboards, posters, direct mail, collateral and promotional items, advertising on public vehicles (transit and aerial) and, if not provided by us, cost of producing approved materials necessary to participate in these media. Advertising expenditures do not include amounts spent for items which we, in our reasonable judgment, deem inappropriate for meeting the minimum advertising requirement, including permanent on-premises signs, lighting, personnel salaries or administrative costs, transportation vehicles (even though such vehicles may display the Marks), Yellow Pages advertising, discounts, free offers and employee incentive programs. We reserve the right to modify the list of such advertising expenditures in the Operations Manual from time to time. You must submit to us for our prior approval, a marketing plan and samples of all advertising and promotional materials not prepared or previously approved by us and which vary from our standard advertising and promotional materials. You may not use any advertising or promotional materials that we have not approved. If you elect to work with an advertising agency, you must obtain our written approval of such advertising agency before you sign any contracts or share any Confidential Information with the advertising agency. 10.6 14877234.6 04/17/14 ADVERTISING COOPERATIVES. We have the right to establish or approve local and/or regional advertising cooperatives for PLANET FITNESS businesses in your local or regional areas, covering such geographical areas as we may designate from time to time. You must participate in any such cooperative and its programs and abide by its by-laws. If your BUSINESS is within the territory of an existing Cooperative at the time your BUSINESS opens for business, you agree to immediately become a member of the Cooperative. If a Cooperative applicable to your BUSINESS is established during the term of this Agreement, you agree to 32 become a member no later than thirty (30) days after the date approved by us for the Cooperative to commence operation. The following provisions shall apply to each Cooperative: 14877234.6 04/17/14 (1) Each Cooperative shall utilize a voting system of one vote per one eligible PLANET FITNESS business. (2) Each Cooperative shall be organized and governed in a form and manner, and shall commence operations on a date, approved in advance by us in writing. No changes in the by-laws or other governing documents of a Cooperative shall be made without our prior written consent. (3) Each Cooperative shall be organized for the exclusive purpose of administering advertising programs and developing, subject to our approval, promotional materials for use by the members in the Cooperative. (4) No advertising or promotional plans or materials may be used by a Cooperative or furnished to its members without prior approval by us pursuant to Article 10.6.6. below. (5) You and each other member of the Cooperative shall contribute to the Cooperative, using a collection structure selected and established by us, the amount determined in accordance with the Cooperative’s by-laws. Any PLANET FITNESS businesses owned by us or any of our Affiliates located in such designated local or regional area(s) will contribute to the Cooperative on the same basis. Contributions to such local and/or regional advertising cooperatives are credited towards the advertising expenditures required by Article 10.5; however, if we provide you and your Cooperative ninety (90) days’ notice of a special promotion, including any regional promotions, you must participate in such promotion and pay to us any special promotion advertising fees assessed in connection therewith, beginning on the effective date of such notice and continuing until such special promotion is concluded. Any such special promotion advertising fees shall be in addition to, and not credited towards, the other advertising expenditures and commitments required of you by this Article 10. (6) All advertising and promotion by you and the Cooperatives shall be in such media and of such type and format as we may approve, shall be conducted in a dignified manner, and shall conform to such standards and requirements as we may specify. You or the Cooperative shall submit written samples of all proposed advertising and promotional plans and materials to us for our approval (except with respect to prices to be charged) at least thirty (30) days before their intended use, unless such plans and materials were prepared by us or have been approved by us within the previous twelve (12) months. Proposed advertising plans or 33 materials shall be deemed to have been approved if they have not been disapproved by us within fifteen (15) days after their receipt by us. (7) At our request, you shall furnish us with copies of such information and documentation evidencing your Cooperative contributions as we may require in order to evidence your compliance with Article 10.6. 10.7 SPECIAL MARKETING PROGRAMS. You must participate in and contribute funds to special marketing programs and campaigns that we develop and administer from time to time; provided that in no event will your required contribution to the special marketing program equal more than the then-current collective required monthly NAF and LAF payments (currently, 9%). If we require you to pay the special marketing program fee, you will not be required to pay a separate LAF or NAF for the corresponding month. 10.8 PARTICIPATION IN INTERNET WEB SITE OR OTHER ON-LINE COMMUNICATIONS. You must have internet access and an e-mail address. You will use an e-mail address to send and receive e-mail and attachments on the Internet. You may be required to invest in and implement new technology initiatives at your own expense, which may include, but will not be limited to, the Black Card Program, acceptance of credit and debit cards, monitors, music, Internet TV broadcast, software management applications, surveillance system, elearning, and software applications designed to better manage business functions and control costs. We may designate the supplier you use for any goods and services associated with these initiatives. Further, you must, at your expense, participate in the PLANET FITNESS web site on the internet or other on-line communications, including an intranet system we may develop in the future unless we provide otherwise. You may not separately register any domain name or operate any web site containing any of the Marks without our written approval. We determine the content and use of the web site and have the sole right to establish the rules under which franchisees may or must participate in the web site or separately use the internet or other on-line communications. We retain all rights relating to the PLANET FITNESS web site and may alter or terminate the web site. Your general conduct on the web site or other authorized on-line communications, and specifically your use of the Marks or any advertising on the web site or other authorized on-line communications (including the domain name and any other Marks we may develop as a result of participation in the web site or other on-line communications), is subject to the provisions of this Agreement and the related standards and restrictions we specify from time to time in the Methods of Operation. You may not use, reference or otherwise promote the Marks or System in connection with any current or future form of social media networks or platforms, including, without limitation, Facebook, Twitter, LinkedIn, and so on. You shall not use or download any software on your computer unless it has been authorized by us in writing. In the event that you use or download any unauthorized software, you shall be liable for all damages and problems caused by the unauthorized software in addition to the other remedies provided under this 14877234.6 04/17/14 34 Agreement. You acknowledge that certain information obtained through your participation in the PLANET FITNESS web site may be considered Confidential Information, including access codes and identification codes. Your right to participate in the PLANET FITNESS web site or any intranet system we may develop or otherwise use the Marks or System on the internet or other on-line communicators terminates when this Agreement expires or terminates. You shall pay us such amount as we require, for any identify theft or theft of personal information of a customer due to any security breach by you, your agents, or your employees. Such fees shall be used to offset our out-of-pocket costs and expenses incurred in responding to and remedying any such security breach. 10.9 11. RECORDS, REPORTS AND FINANCIAL STATEMENTS. 11.1 14877234.6 04/17/14 TRUTHFUL ADVERTISING, MARKETING AND PROMOTION. You agree that any advertising, promotion and marketing you conduct will be completely clear and factual and not misleading and conform to the highest standards of ethical marketing and the promotion policies which we prescribe from time to time. Samples of all advertising, promotional and marketing materials which we have not prepared or previously approved must be submitted to us for approval before you use them. If you do not receive written disapproval within fifteen (15) days after our receipt of such materials, we will be deemed to have given the required approval. You may not use any advertising or promotional materials that we have disapproved. We own the copyrights to anything so submitted, whether approved by us or not. RECORDS. You agree to establish and maintain at your own expense a bookkeeping, accounting and record keeping system conforming to the requirements and formats we prescribe from time to time. You agree to prepare and to maintain for three (3) years complete and accurate books, records (including invoices and records relating to your advertising expenditures) and accounts (using our then-current standard chart of accounts) for your BUSINESS, copies of your sales tax returns and such portions of your state and federal income tax returns as relate to your BUSINESS. All such books and records shall be kept at your principal address indicated on the first page of this Agreement, unless we otherwise approve. You must record all sales on computer-based cash registers which are fully compatible with our computer system and which include an information interface capability to communicate electronically with our computer system. You agree to purchase or lease, at your expense, such computer hardware and software, required dedicated telephone and power lines, modems, printers, and other computer-related accessories and peripheral equipment as we may specify, for the purpose of, among other functions, recording financial and customer data and communicating with us. We may require you to use proprietary software and any other computer systems which we may prescribe from time to time and you agree to execute such agreements as we may require in connection therewith. You must provide such assistance as may be required to connect your 35 computer system with our computer system. We have the right, without prior notice to you, to retrieve such data and information from your computer system as we deem necessary or desirable, including the right to obtain such information from vendors (e.g., MicroSoft Dynamics), and you agree to fully cooperate with such efforts. All data pertaining to your BUSINESS, and all data you create or collect in connection with the System, or in connection with your operation of the BUSINESS (including without limitation data pertaining to or otherwise concerning your members) or otherwise provided by you (including, without limitation, data uploaded to, or downloaded from your computer system) is and will be owned exclusively by us, and we will have the right to use such data in any manner that we deem appropriate without compensation to you. We hereby license use of such data back to you for the term of this Agreement, at no additional cost, solely for your use in connection with the BUSINESS conducted under this Agreement. In view of the contemplated interconnection of computer systems and the necessity that such systems be compatible with each other, you agree that you will comply strictly with our standards and specifications for all items associated with your computer systems. To ensure full operational efficiency and optimum communication capability among computer systems, you agree, at your expense, to keep your computer systems in good maintenance and repair, and to promptly install such additions, changes, modifications, substitutions or replacements to hardware, software, telephone and power lines, and other computer-related facilities, as we direct. 11.2 11.3 14877234.6 04/17/14 PERIODIC REPORTS. You must furnish us: (1) within thirty (30) days after the end of each fiscal quarter, a quarterly balance sheet and income statement and statement of cash flow of your BUSINESS for such quarter, reflecting any adjustments and accruals; (2) within ninety (90) days after the end of each fiscal year, a year-end balance sheet and income statement and statement of cash flow of your BUSINESS for such year, reflecting all year-end adjustments and accruals; and (3) within thirty (30) days of our request, such other information as we may require from time to time, including sales data and labor cost reports and sales and income tax statements. All such reports shall use our thencurrent standard chart of accounts. VERIFICATION. You agree to verify and sign each report and financial statement in the manner we prescribe. We reserve the right to require that your annual financial statements be audited, at your expense, by an independent certified public accountant approved by us. We reserve the right to publish or disclose information that we obtain under this Article in any data compilations, collections, or aggregations that we deem appropriate so long as we do not disclose information relating to performance of your individual BUSINESS, unless such disclosure is required by law or order of a court. Moreover, we 36 reserve the right, as often as we deem appropriate, including on a daily basis, to access the computer systems that you are required to maintain in connection with the operation of the BUSINESS and to retrieve all information relating to the BUSINESS’s operations. 12. INSPECTIONS AND AUDITS. 12.1 14877234.6 04/17/14 OUR RIGHT TO INSPECT THE BUSINESS. To determine whether you and the BUSINESS are complying with this Agreement and Methods of Operation, we and our designated agents have the right at any time during your regular business hours, and without prior notice to you, to: (1) inspect the BUSINESS; (2) observe, photograph and videotape the operations of the BUSINESS for such consecutive or intermittent periods as we deem necessary; (3) remove samples of any products, materials or supplies for testing and analysis; (4) interview personnel and customers of the BUSINESS; (5) inspect and copy any books, records (whether electronic or hard copy) and documents relating to your operation of the BUSINESS, including member and membership information; and (6) retrieve such data and information from your computer system or computer systems which are licensed by you, such as the dues processing platform (currently, Visionary Software) or accounting platform (currently, Microsoft Dynamics), including obtaining such information from third parties or vendors. 12.2 COOPERATION. You agree to cooperate with us fully in connection with any such inspections, observations, photographing, videotaping, product removal and interviews. You agree to present to your customers such evaluation forms that we periodically prescribe and to participate and/or request your customers to participate in any surveys performed by us or on our behalf. 12.3 OUR RIGHT TO AUDIT. We have the right at any time during your business hours, and without prior notice to you, to inspect and audit, or cause to be inspected and audited, your (if you are a corporation or partnership) and the BUSINESS’s business, bookkeeping and accounting records, sales and income tax records and returns and other records. You agree to cooperate fully with our representatives and independent accountants we hire to conduct any such inspection or audit. In the event such inspection or audit is made necessary by your failure to furnish reports, supporting records or other information as herein required, or to furnish such items on a timely basis, you agree to reimburse us for the reasonable cost of such inspection or audit, including, without limitation, the 37 charges of attorneys and independent accountants and the travel expenses, room and board and compensation of our employees. In the event an inspection or audit reveals that any payments have been understated in any report to us, then you shall immediately pay to us the amount understated upon demand, in addition to interest from the date such amount was due until paid, at the highest contract rate of interest permitted by law. If an inspection or audit discloses an understatement in any report of two (2%) percent or more, you shall, in addition to repayment of monies owed with interest, reimburse us for any and all costs and expenses connected with the inspection or audit, including, without limitation, the charges of attorneys and independent accountants and the travel expenses, room and board and compensation of our employees. The foregoing remedies are in addition to our other remedies and rights under this Agreement and applicable law. 13. TRANSFER. 13.1 BY US. We have the right to sell or assign, in whole or in part, our interests in this Agreement, and any such sale or assignment will inure to the benefit of any assignee or other legal successor to our interests herein. 13.2 BY YOU. You understand and acknowledge that the rights and duties created by this Agreement are personal to you (or, if you are a corporation, partnership, or other entity, to your Owners) and that we have granted the Franchise to you in reliance upon our perceptions of your (or your Owners’) individual or collective character, skill, aptitude, attitude, business ability, acumen and financial capacity. Accordingly, neither this Agreement (or any interest therein) nor any ownership or other interest in you or the BUSINESS, including any arrangement whereby you sell or pledge accounts receivable, EFT, or any other assets of the BUSINESS, may be transferred without our prior written approval. Any Transfer without such approval constitutes a breach of this Agreement and is void and of no effect. 13.3 CONDITIONS FOR APPROVAL OF TRANSFER. If you (and your Owners) are in full compliance with this Agreement and the conditions of this Article 13.3 are met, we will not unreasonably withhold our consent to Transfer. The proposed transferee and its direct and indirect owners must be individuals of good moral character and otherwise meet our then applicable standards for PLANET FITNESS business franchisees. A Transfer of ownership, possession or control of the BUSINESS may be made only in conjunction with a Transfer of this Agreement. If the Transfer is of this Agreement or a controlling interest in you, or is one of a series of Transfers which in the aggregate constitute the Transfer of this Agreement or a controlling interest in you, all of the following conditions must be met prior to or concurrently with the effective date of the Transfer: (1) 14877234.6 04/17/14 the transferee has the moral character, aptitude, attitude, experience, references, acumen and financial capacity to operate the BUSINESS, and the proposed transferee may not be an entity, or be affiliated with an 38 entity, that is required to comply with reporting and information requirements of the Securities Exchange Act of 1934, as amended; 14877234.6 04/17/14 (2) you have paid all Royalties, Ad Fees, amounts owed for purchases from us and all other amounts owed to us or to third party creditors and have submitted all required reports and statements; (3) the transferee (or its Responsible Owner) and its managers, shift supervisors and personnel must have completed our initial training program or must be currently certified by us to operate and/or manage a PLANET FITNESS business to our satisfaction prior to closing; (4) the transferee has agreed to be bound by all of the terms and conditions of this Agreement for the remainder of the Initial Term or, at our option, must execute our then-current standard form of franchise agreement and related documents being offered to new franchisees in the state in which your BUSINESS is located (which may provide for different royalties, advertising contributions and expenditures, duration and other rights and obligations than those provided for in this Agreement); (5) for each proposed Transfer hereunder, including a proposed Transfer among your Owners in which there is a change of a controlling interest in you, you shall pay us a transfer fee equal to the greater of (a) Twenty Five Thousand ($25,000) Dollars or (b) the mathematical product of Ten Thousand Dollars ($10,000) multiplied by the number of PLANET FITNESS businesses or Franchise Agreements affected by the transfer (the “Transfer Fee”); provided, however, if the proposed Transfer is among your Owners, and there is no change of a controlling interest in you, the Transfer Fee will not apply, although you are required to reimburse us for any reasonable legal and administrative costs we incur in connection with the Transfer. For purposes of this Article 13.3.5, we will make the determination as to what constitutes a change in control, which may include any change in control of any entity owning a legal or beneficial interest in you, as we shall reasonably determine; (6) you (and your transferring Owners) have executed a general release, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees and agents; (7) we have approved the material terms and conditions of such Transfer and determined that the price and terms of payment will not adversely affect the transferee’s operation of the BUSINESS; (8) if you or your Owners finance any part of the sale price of the transferred interest, you and/or your Owners have agreed that all of the transferee’s obligations pursuant to any promissory notes, agreements or security interests that you or your Owners have reserved in the BUSINESS are 39 subordinate to the transferee’s obligation to pay Royalties, NAF contributions and other amounts due to us and otherwise to comply with this Agreement; and (9) 14877234.6 04/17/14 you and/or any transferring Owner(s) have executed an agreement in favor of us agreeing to remain bound by the restrictions contained in Articles 16.2, 16.3 and 16.4 hereof as if this Agreement had terminated. You agree that the restrictions referenced in the immediately preceding sentence will continue to apply regardless of whether you and/or any transferring Owner(s) actually execute an agreement confirming the survival of these restrictions. You and each of your Owners further agree that the provisions of Article 19.13 and 19.14 survive the partial or full Transfer of an Owner’s interest in you and that New Hampshire law and jurisdiction will apply to any dispute that arises out of or relates to this Agreement. This Article 13.3.9 applies equally to partial Transfers of interest by any one or more Owners. 13.4 TRANSFER TO A WHOLLY OWNED CORPORATION. Notwithstanding Article 13.3., if you are in full compliance with this Agreement, you may Transfer this Agreement to a corporation, business trust, limited liability company or similar entity, which conducts no business other than the BUSINESS and, if applicable, other PLANET FITNESS businesses, in which you maintain management control and of which you own and control one hundred (100%) percent of the equity and voting power of all issued and outstanding capital stock, and further provided that all assets of the BUSINESS are owned, and the entire business of the BUSINESS is conducted, by a single corporation. Transfers of shares in such corporation will be subject to the provisions of Article 13.3. Notwithstanding anything to the contrary herein, you agree to remain personally liable under this Agreement as if the Transfer to such corporation had not occurred. 13.5 TRANSFER UPON YOUR DEATH OR DISABILITY. Upon your death or permanent disability or, if you are a corporation or partnership, the death or permanent disability of the Owner of a controlling interest in you, your or such Owner’s executor, administrator, conservator, guardian or other personal representative must Transfer your interest in this Agreement or such Owner’s interest in you to a third party.*f Such disposition of this Agreement or the interest in you (including, without limitation, Transfer by bequest or inheritance) must be completed within a reasonable time, not to exceed six (6) months from the date of death or permanent disability, and will be subject to all of the terms and conditions applicable to Transfers contained in this Article. A failure to Transfer your interest in this Agreement or the ownership interest in you within this period of time constitutes a breach of this Agreement. For purposes hereof, the term “permanent disability” means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent you or an Owner of a controlling interest in you from managing and operating the 40 BUSINESS for a period of three (3) months from the onset of such disability, impairment or condition. 14877234.6 04/17/14 13.6 OPERATION UPON YOUR DEATH OR DISABILITY. If, upon your death or permanent disability or the death or permanent disability of the Owner of a controlling interest in you, the BUSINESS is not being managed by a Responsible Owner or Approved Operator, your or such Owner’s executor, administrator, conservator, guardian or other personal representative must within a reasonable time, not to exceed fifteen (15) days from the date of death or permanent disability, appoint an Approved Operator to operate the BUSINESS. Such manager will be required to successfully complete training at your expense within sixty (60) days of being appointed to operate the BUSINESS. Pending the appointment of an Approved Operator as provided above or if, in our judgment, the BUSINESS is not being managed properly any time after your death or permanent disability or after the death or permanent disability of the Owner of a controlling interest in you, we have the right, but not the obligation, to appoint a manager for the BUSINESS. All funds from the operation of the BUSINESS during the management by our appointed manager will be kept in a separate account, and all expenses of the BUSINESS, including compensation, other costs and travel and living expenses of our manager, will be charged to this account. We also have the right to charge a reasonable management fee (in addition to the Royalty and NAF contributions payable under this Agreement) during the period that our appointed manager manages the BUSINESS. Operation of the BUSINESS during any such period will be on your behalf, provided that we only have a duty to utilize reasonable efforts in doing so and will not be liable to you or your Owners for any debts, losses or obligations incurred by the BUSINESS or to any of your creditors for any products, materials, supplies or services the BUSINESS purchases during any period it is managed by our appointed manager. 13.7 BONA FIDE OFFERS. If you (or any of your Owners) at any time determine to sell, assign or Transfer for consideration an interest in this Agreement and the BUSINESS or an ownership interest in you, you (or such Owner) agree to obtain a bona fide, executed written offer and earnest money deposit (in the amount of five (5%) percent or more of the offering price) and a complete franchise application from a fully disclosed offeror including lists of the owners of record and beneficially of any corporate or limited liability company offeror and all general and limited partners of any partnership and immediately submit to us a true and complete copy of such offer, which includes details of the payment terms of the proposed sale. To be a valid, bona fide offer, the proposed purchase price must be denominated in a dollar amount. The offer must apply only to an interest in you or in this Agreement and the BUSINESS and may not include an offer to purchase any of your (or your Owners’) other property or rights. However, if the offeror proposes to buy any other property or rights from you (or your Owners) under a separate, contemporaneous offer, such separate, contemporaneous offer must be disclosed to us, and the price and terms of purchase offered to you (or your Owners) for the interest in you or in this Agreement and the BUSINESS must reflect the bona fide price offered therefor and not reflect any value for any 41 other property or rights. Any Transfer in violation of our right of first refusal is null and void. 13.8 13.9 14. (1) we may substitute cash for any form of payment proposed in such offer; (2) our credit will be deemed equal to the credit of any proposed purchaser; (3) we will have not less than sixty (60) days after giving notice of our election to purchase to prepare for closing; and (4) we are entitled to receive, and you and your Owners agree to make, all customary representations and warranties given by the seller of the assets of a business or the capital stock of an incorporated business, as applicable, including, without limitation, representations and warranties as to: (a) ownership and condition of and title to stock or other forms of ownership interest and/or assets; (b) liens and encumbrances relating to the stock or other ownership interest and/or assets; and (c) validity of contracts and the liabilities, contingent or otherwise, of the corporation whose stock is being purchased. NON-EXERCISE. If we do not exercise our right of first refusal, you or your Owners may complete the sale to such purchaser pursuant to and on the exact terms of such bona fide offer, subject to our approval of the Transfer as provided in Articles 13.2, 13.3 and 13.4. If the sale to such purchaser is not completed within one hundred twenty (120) days after delivery of such bona fide offer to us, or if there is a material change in the terms of the sale (which you agree promptly to communicate to us), the sale will be treated as a new sale subject to our right of first refusal as provided in Article 13.8. EXPIRATION OF THIS AGREEMENT. 14.1 14877234.6 04/17/14 OUR RIGHT OF FIRST REFUSAL. We have the right, exercisable by written notice delivered to you or your selling Owners within thirty (30) days from the date of the delivery to us of both an exact copy of such bona fide offer and all other information we request, to purchase such interest for the price and on the terms and conditions contained in such bona fide offer, provided that: ACQUISITION OF A SUCCESSOR FRANCHISE. Upon expiration of the Initial Term of this Agreement, if you (and each of your Owners) are in full compliance with this Agreement during its term, and provided that you maintain possession of and agree to remodel and/or expand the BUSINESS, add or replace improvements, equipment and signs and otherwise modify the BUSINESS as we require to bring it into compliance with specifications and standards then 42 applicable for PLANET FITNESS businesses, or if you are unable to maintain possession of the Location, or if in our judgment the BUSINESS should be relocated, you secure substitute premises we approve, develop such premises in compliance with specifications and standards then applicable for PLANET FITNESS businesses and continue to operate the BUSINESS at the Location until operations are transferred to the substitute premises, then, subject to the terms and conditions set forth in this Article 14, you will have the right to acquire a successor franchise to operate the BUSINESS as a PLANET FITNESS business on the terms and conditions of the franchise agreement we are then customarily offering in granting successor franchises for PLANET FITNESS businesses. The successor franchise fee will be equal to the initial franchise fee we are then currently customarily charging for new franchises; provided that such amount shall not exceed $20,000. 14.2 14877234.6 04/17/14 GRANT OF A SUCCESSOR FRANCHISE. You must give us written notice of your desire to acquire a successor franchise not less than six (6) months nor more than twelve (12) months prior to the expiration of this Agreement. We will give you notice (“Our Notice”), not later than sixty (60) days after receipt of your notice, of our decision, pursuant to Article 14.1: (1) to grant you one (1) successor franchise for the customary term we are then offering to new franchisees; (2) to grant you a successor franchise on the condition that deficiencies of the BUSINESS, or in your operation of the BUSINESS, are corrected; or (3) not to grant you a successor franchise based on our determination that you and your Owners have not substantially complied with this Agreement during its term. 14.3 NO GRANT. If we elect not to grant a successor franchise, Our Notice will describe the reasons for our decision. Your right to acquire a successor franchise is subject to your continued compliance with all of the terms and conditions of this Agreement through the date of its expiration, in addition to your compliance with the obligations described in Our Notice. 14.4 90 DAY CURE. If Our Notice states that you must cure certain deficiencies of the BUSINESS or its operation as a condition to the grant of a successor franchise, we will give you written notice of a decision not to grant a successor franchise, based upon your failure to cure such deficiencies, not less than ninety (90) days prior to the expiration of this Agreement, provided, however, that we will not be required to give you such notice if we decide not to grant you a successor franchise due to your breach of this Agreement during the one hundred eighty (180) day period prior to its expiration. We may extend the term of this Agreement for such period of time as is necessary in order to provide you with either reasonable time to correct deficiencies or the ninety (90) day notice of our 43 refusal to grant a successor franchise required hereunder if we fail to give you the following: 15. 14877234.6 04/17/14 (1) notice of deficiencies in the BUSINESS, or in your operation of the BUSINESS, within ninety (90) days after we receive your timely election to acquire a successor franchise; or (2) notice of our decision not to grant a successor franchise at least ninety (90) days prior to the expiration of this Agreement. 14.5 AGREEMENTS. If you satisfy all of the other conditions to the grant of a successor franchise, you and your Owners agree to execute the franchise agreement and any ancillary agreements we are then customarily offering in connection with the grant of successor franchises for PLANET FITNESS businesses. 14.6 RELEASES. You and your Owners further agree to execute general releases, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees, agents, successors and assigns. Failure by you or your Owners to sign such agreements and releases and deliver them to us for acceptance and execution within thirty (30) days after their delivery to you will be deemed an election not to acquire a successor franchise. TERMINATION OF AGREEMENT. 15.1 BY YOU. If you and your Owners are in compliance with this Agreement and we materially fail to comply with this Agreement and do not correct such failure within sixty (60) days after written notice of such material failure is delivered to us, you may terminate this Agreement effective thirty (30) days after delivery to us of written notice of termination. Your termination of this Agreement for any other reason or without such notice will be deemed null and void. 15.2 IMMEDIATE TERMINATION. You are in material breach of this Agreement, and this Agreement will automatically terminate without notice, if you: (1) become insolvent by reason of your inability to pay your debts as they mature; (2) if you are adjudicated bankrupt or insolvent; (3) if you file a petition in bankruptcy, reorganization or similar proceeding under the bankruptcy laws of the United States or have such a petition filed against you which is not discharged within thirty (30) days; (4) if a receiver or other custodian, permanent or temporary, is appointed for your business, assets or property; 44 15.3 14877234.6 04/17/14 (5) if you request the appointment of a receiver or make a general assignment for the benefit of creditors; (6) if final judgment against you in the amount of Twenty Five Thousand ($25,000) Dollars or more remains unsatisfied of record for thirty (30) days or longer; (7) if your bank accounts, property or accounts receivable are attached; (8) if execution is levied against your business or property; (9) if suit is filed to foreclose any lien or mortgage against any of your assets and such suit is not dismissed within thirty (30) days; (10) if you voluntarily dissolve or liquidate or have a petition filed for corporate or partnership dissolution and such petition is not dismissed within thirty (30) days; (11) if you fail to meet any construction deadline set forth in Article 4 hereof TERMINATION UPON NOTICE. In addition to our right to terminate pursuant to other provisions of this Agreement and under applicable law, we have the right to terminate this Agreement, effective upon delivery of notice of termination to you, if you or any of your Owners or affiliates: (1) fail to open your BUSINESS and start business, in the time period required under this Agreement; (2) abandon or fail to actively operate your BUSINESS for three (3) consecutive days, except where such failure to actively operate results solely from causes beyond your reasonable control; (3) surrender or transfer control of the operation of your BUSINESS without our prior written consent; (4) have made any material misrepresentation or omission in connection with your purchase of the Franchise; (5) suffer cancellation or termination of the lease or sublease for your BUSINESS; (6) are convicted of, or plead no contest to, a felony or other crime or offense that we reasonably believe may adversely affect the System or the goodwill associated with the Marks; (7) make an unauthorized assignment of this Agreement or of an ownership interest in you or the BUSINESS; 45 14877234.6 04/17/14 (8) make any unauthorized use or disclosure of any Confidential Information or use, duplicate or disclose any portion of the Operations Manual in violation of this Agreement; (9) fail or refuse to comply with any mandatory specification, standard, or operating procedure prescribed by us relating to the cleanliness or sanitation of your BUSINESS or violate any health, safety or sanitation law, ordinance or regulation, that we reasonably believe may pose harm to the public or to your or our reputation, and do not correct such failure, refusal or violation within twenty four (24) hours after written notice thereof is delivered to you; (10) fail to establish, maintain and/or have sufficient funds available in the designated account as required by Article 5.3. of this Agreement or fail to make payment of any amounts due us or any of our Affiliates, and do not correct such failure within ten (10) days after written notice of such failure is delivered to you; (11) fail to make a timely payment of any amount due to a supplier unaffiliated with us (other than payments which are subject to bona fide dispute), and do not correct such failure within thirty (30) days after we deliver to you notice of such failure to comply; (12) fail to comply with any other provision of this Agreement or any other agreement between you (or any of your Owners) and us or our affiliates, and do not correct such failure within thirty (30) days after notice of such failure to comply is delivered to you; (13) fail on three (3) or more separate occasions within any period of twelve (12) consecutive months to submit when due reports or other data, information or supporting records or to pay when due Royalties, NAF contributions or other payments due us, any of our Affiliates or any unaffiliated suppliers or otherwise fail to comply with this Agreement, whether or not such failure is corrected after notice is delivered to you; (14) fail to pay when due any federal or state income, service, sales, employment related or other taxes due on the operations of the BUSINESS, unless you are, in good faith, legally contesting your liability for such taxes; (15) fail to request approval of an Approved Operator and/or Responsible Owner within fifteen (15) days after your death or permanent disability or the death or permanent disability of the Owner of a controlling interest in you or such Approved Operator and/or Responsible Owner fails to complete our training within sixty (60) days after such request; (16) if you fail to lease, sublease or purchase the Location in accordance within the timeframe set forth in Article 4.2; 46 (17) violate Article 6.8 herein and do not cure within seven (7) days; (18) fail to comply with the requirements for the condition of your BUSINESS under Article 9.4 hereof and do not correct such failure within thirty (30) days; or (19) if you made any material misrepresentation to us that was false, or there was any material omission in information you provided to us, as an inducement to our entering into this Agreement. We have no obligation whatsoever to refund any portion of the franchise fee upon any termination of this Agreement. 14877234.6 04/17/14 15.4 OUR RIGHT TO OPERATE THE BUSINESS. If we issue you a notice of default and you fail to cure such default within any applicable time period, we have the right, without the obligation, and without waiving our right to terminate this Agreement as a result of such failure, to assume the operation of the BUSINESS for such length of time as we determine in our business judgment. You authorize us to operate the BUSINESS for so long as we deem necessary and practical, and without waiver of any other rights or remedies we may have under this Agreement. All monies from the operation of the BUSINESS during such period of operation by us shall be accounted for separately and the expenses of the business, including travel, food, lodging, and salaries of our representatives who operate the BUSINESS, shall be charged to such account. You shall indemnify us and our representatives from any and all claims arising from the acts and omissions of us and our representatives pursuant to this Article 15.4. 15.5 ALTERNATIVES TO TERMINATION. In addition to our rights under Article 15.4, if we issue you a notice of default and you fail to cure such default within any applicable time period, we have the right in our business judgment, without the obligation, and without waiving our right to terminate this Agreement as a result of such failure, to temporarily or permanently limit, curtail, or remove certain services or benefits provided or required to be provided to you hereunder, including, but not limited to: (1) restricting your or any of your staff’s attendance at any training, meetings, workshops, or conventions; (2) requiring you to pay, via EFT Dues Draft, an additional two percent (2%) of the total gross monthly and annual membership fees that are due and payable to you from your members; (3) replacing the Royalty in Article 5.2 of this Agreement and/or any other Royalty section contained in any franchise agreement between you (or any of your Owners) and us or our affiliates with the Royalty offered in our then current franchise agreement; (2) refusing to sell or furnish to you any advertising or promotional materials; 47 (3) refusing to provide you with ongoing advice about the operation of the BUSINESS; (4) refusing any of your requests to approve a new supplier or the use of any advertising or promotional materials; and (5) refusing to permit you to enter into a new franchise agreement for a Planet Fitness business at any other location. You shall hold us harmless with respect to any action we take pursuant to this Article 15.5; and you agree that we shall not be liable for any loss, expense, or damage you incur because of any action we take pursuant to this Article 15.5. Nothing in this Article 15.5 constitutes a waiver of any of our rights or remedies under this Agreement or any other agreement between us and you, including the right to terminate this Agreement. You agree that our exercise of our rights pursuant to this Article 15.5 shall not be deemed a constructive termination of this Agreement or of any other agreement between us and you, and shall not be deemed a breach of any provision of this Agreement. We may, in our business judgment, reinstate any services or benefits removed, curtailed, or limited pursuant to this Article 15.5, and you agree to accept immediately any such reinstatement of services or benefits so removed, curtailed, or limited. If we limit any services or benefits under this Article 15.5, you shall continue to pay timely all fees and payments required under this Agreement and any other agreement between us and you, including any fees associated with services or benefits limited by us. You shall have no right to a refund of any fees paid in advance for such services or benefits. 16. 14877234.6 04/17/14 OUR AND YOUR RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION OF THIS AGREEMENT. 16.1 PAYMENT OF AMOUNTS OWED TO US. You agree to pay us within fifteen (15) days after the effective date of termination, for any reason, or expiration of this Agreement, or on such later date that the amounts due to us are determined, such Royalties, NAF contributions, amounts owed for purchases from us, interest due on any of the foregoing and all other amounts owed to us which are then unpaid. 16.2 MARKS. Upon the termination, for any reason, or expiration of this Agreement: (1) you may not directly or indirectly at any time or in any manner (except with respect to other PLANET FITNESS businesses you own and operate) identify yourself or any business as a current or former PLANET FITNESS business, or as one of our licensees or franchisees, use any Marks, any colorable imitation thereof or other indicia of a PLANET FITNESS business in any manner or for any purpose or utilize for any purpose any trade name, trademark or service mark or other commercial symbol that indicates or suggests a connection or association with us; (2) you agree to take such action as may be required to cancel all fictitious or assumed names or equivalent registrations relating to your use of any Marks; 48 16.3 14877234.6 04/17/14 (3) if we do not exercise our option to purchase the BUSINESS pursuant to Article 16.11, you agree to deliver to us within thirty (30) days after the Notification Date the Operations Manual, all signs, sign-faces, signcabinets, marketing materials, forms, packaging and other materials containing any Marks or otherwise identifying or relating to a PLANET FITNESS business and allow us, without liability to you or third parties, to remove all such items from the BUSINESS; (4) if we do not exercise our option to purchase the BUSINESS pursuant to Article 16.11, you agree that, after the Notification Date, you will promptly and at your own expense make such alterations as we may specify to distinguish the BUSINESS clearly from its former appearance and from other PLANET FITNESS businesses so as to prevent confusion therewith by the public; (5) if we do not exercise our option to purchase the BUSINESS pursuant to Article 16.11, you agree that, after the Notification Date and in accordance with the Assignment of Telephone Numbers attached as Appendix E to this Agreement, you will notify the telephone company and all telephone directory publishers of the termination or expiration of your right to use any telephone, telecopy or other numbers and any regular, classified or other telephone directory listings associated with any Marks, authorize the transfer of such numbers and directory listings to us or at our direction and/or instruct the telephone company to forward all calls made to your telephone numbers to numbers we specify; and (6) you agree to furnish us, within thirty (30) days after the Notification Date, with evidence satisfactory to us of your compliance with the foregoing obligations. DE-BRANDING. You agree that, upon termination of this Agreement, for any reason, or expiration of this Agreement, you will immediately comply with our then-current de-branding checklist, which shall require you to, among other things: (1) Remove and destroy all interior and exterior signage, point of sale materials, business forms, and stationery received from us; (2) Delete from all computer hard drives all materials, information, communications, manuals, and marketing and promotion materials received from us; (3) Remove all decals containing the PLANET FITNESS name, slogans, or purple/yellow color scheme; (4) Repaint or remove all purple and yellow colors from all exercise equipment, walls, doors, floors, and other surfaces; 49 14877234.6 04/17/14 (5) Immediately cease selling Black Card memberships; (6) Promptly instruct all third-party internet sites and telephone directories to remove all listings identifying the location as a PLANET FITNESS; (7) Notify all existing members in a letter approved by us describing the members’ rights and options; (8) Return all uniforms, sales materials, operations manuals, and other items that contain any Confidential Information; (9) Cancel all fictitious or assumed names or equivalent registrations relating to your use of any of the Marks; (10) Change your corporate or legal business name, if necessary, so that it does not contain any of the Marks; (11) Return to us all signs, sign-faces, sign-cabinets, marketing materials, forms, packaging, and other materials that contain any of the Marks; and (12) Remove all red light therapy booths. 16.4 CONFIDENTIAL INFORMATION. You agree that, upon termination of this Agreement (including the full or partial transfer of rights by Franchisee or any Owner), for any reason, or expiration of this Agreement, you will immediately and forever cease to use any of our Confidential Information in any business or otherwise and return to us all copies of the Operations Manual and any other confidential materials, including, without limitation, computer software and any mechanisms (electronic key) used to access the software, that we have allowed you to use. 16.5 IN-TERM COVENANT NOT TO COMPETE. You specifically acknowledge that, pursuant to this Agreement, you will receive valuable, specialized training, Confidential Information (as defined in Article 8.1 hereof), and other proprietary and specialized information and knowledge that provide a valuable, competitive advantage in operating a men’s, women’s, children’s, or co-ed fitness, exercise, athletic or wellness facility of any kind. You further acknowledge that we would be unable to protect the Confidential Information against unauthorized use or disclosure or to encourage the free exchange of ideas and information among our franchisees if you were permitted to hold interests in or perform services for a Competitive Business, and we have granted you the rights hereunder in consideration of, and in reliance upon, your agreement to deal exclusively with us. You therefore covenant that during the term of this Agreement (except as otherwise approved in writing by us), you, your Owners, and you and their Immediate Families shall not, either directly, indirectly or through, on behalf of, or in conjunction with any person or legal entity: 50 16.6 (1) Divert or attempt to divert any present or prospective business or customer of any PLANET FITNESS business to any non-PLANET FITNESS competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; (2) Recruit, employ or seek to employ any person who is at that time, or has been within the past six (6) months, employed by us or one of our affiliates, or otherwise directly or indirectly induce such person to leave his or her employment; or (3) Own, maintain, operate, engage in, be employed by, act as a consultant for, perform services for, provide assistance to, or have any interest in (as owner or otherwise) any Competitive Business. POST-TERM COVENANT NOT TO COMPETE. You covenant that, except as otherwise approved in writing by us, you and your Owners shall not, for a continuous, uninterrupted period of two (2) years commencing upon the date of (a) a transfer permitted under Article 13 of this Agreement, (b) expiration of this Agreement, (c) termination or non-renewal of this Agreement (regardless of the cause for termination or non-renewal), or (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Article 16.6, either directly or indirectly, for yourself or your Immediate Family, or through, on behalf of, or in conjunction with any person or legal entity, own, maintain, operate, engage in, be employed by, act as a consultant for, perform services for, provide assistance to, or have any interest in (as owner or otherwise) any Competitive Business that is, or is intended to be, located (a) at the Location, (b) within fifteen (15) miles of the Location, or (c) fifteen (15) miles of any PLANET FITNESS business in operation or under construction as of the date that you are required to comply with this Article 16.6. You agree and acknowledge that the two (2) year period of this restriction shall be tolled during any time period in which you are in violation of this restriction. The restrictions in Articles 16.5.3 and 16.6 do not apply to: (a) interests in or operation of a PLANET FITNESS business under a written Franchise Agreement with us; or (b) the ownership of shares of a class of securities that are listed on a public stock exchange or traded on the over-the-counter market and that represent less than five percent (5%) of that class of securities. 16.7 14877234.6 04/17/14 REASONABLE SCOPE OF COVENANTS. You acknowledge that the scope of the restrictions in Articles 16.5 and 16.6 are reasonable and necessary to protect us, the Confidential Information, and the System, and that such restrictions are designed solely to prevent you from taking information, materials, training, and know-how that we provided to you and using them to compete with us. In addition, your operation of a Competitive Business in violation of Article 16.5 or 16.6 would necessarily involve your use of Confidential Information that would result in an unfair competitive advantage vis-à-vis other PLANET FITNESS franchisees. You further acknowledge that you and your Owners possess skills and abilities of a general nature and have other opportunities for exploiting these 51 skills. Consequently, our enforcement of the covenant in Article 16.6 will not deprive you or your Owners of personal goodwill or the ability to engage in a lawful trade or business and earn a living. 16.8 REDUCTION OF SCOPE OF COVENANTS. You understand and acknowledge that we shall have the right, in our business judgment, to reduce the scope of any covenant set forth in Articles 16.5 and 16.6, or any portion thereof, without your consent, effective immediately upon receipt by you of written notice thereof; and you agree that you shall comply forthwith with any covenant as so modified, which shall be fully enforceable. 16.9 COVENANT NOT TO COMPETE UPON EXERCISE OF RIGHT OF FIRST REFUSAL. If we exercise our right of first refusal pursuant to Article 13.8. above, you and your selling Owner(s) agree that, for a period of two (2) years commencing on the date of the closing, you and they will be bound by the noncompetition covenant contained in Article 16.6 hereof. 16.10 COMMENCEMENT BY ORDER. If any person restricted by this Article refuses voluntarily to comply with the foregoing obligations, the Restriction Period will commence with the entry of an order of an arbitrator, or court if necessary, enforcing this provision. You and your Owners expressly acknowledge that you possess skills and abilities of a general nature and have other opportunities for exploiting such skills. Consequently, enforcement of the covenants made in this Article will not deprive you of your personal goodwill or ability to earn a living. 16.11 OUR RIGHT TO PURCHASE BUSINESS. 14877234.6 04/17/14 (1) Exercise of Option. Upon termination or expiration of this Agreement in accordance with its terms and conditions, we have the option, exercisable by giving written notice thereof to you (by the later of (a) sixty (60) days from the date of such termination or expiration or (b) seven (7) days after determination of the purchase price), to purchase the BUSINESS from you, including the leasehold rights to the Location, free and clear of all liens, restrictions or encumbrances. (The date on which we notify you whether or not we are exercising our option is referred to in this Agreement as the “Notification Date.”) We have the unrestricted right to assign this option to purchase the BUSINESS. We will be entitled to all customary warranties and representations in connection with our asset purchase, including, without limitation, representations and warranties as to ownership and condition of and title to assets; liens and encumbrances on assets; validity of contracts and agreements; and liabilities effecting the assets, contingent or otherwise. (2) Leasehold Rights. You agree, at our election, to assign your leasehold interest in the Location to us or, to enter into a sublease for the remainder 52 of the lease term on the same terms (including renewal options) as the prime lease. 14877234.6 04/17/14 (3) Purchase Price. The purchase price for the BUSINESS will be its fair market value, determined in a manner consistent with reasonable depreciation of the BUSINESS’s equipment, signs, inventory, materials and supplies, provided that the BUSINESS will be valued as an independent business and its value will not include any value for the Franchise or any rights granted by this Agreement, the Marks, or participation in the network of PLANET FITNESS businesses. (4) Fair Market Value. The BUSINESS’s fair market value will include the reasonable goodwill you developed since your commencement of operations that exists independent of the goodwill of the Marks and the System. The length of the remaining term of the lease for the Location will also be considered in determining the BUSINESS’s fair market value. (5) Exclusions. We may exclude from the assets purchased hereunder cash or its equivalent and any equipment, signs, inventory, materials and supplies that are not reasonably necessary (in function or quality) to the BUSINESS’s operation or that we have not approved as meeting standards for PLANET FITNESS businesses, and the purchase price will reflect such exclusions. (6) Appraisal. If we and you are unable to agree on the BUSINESS’s fair market value, its fair market value will be determined by an appraiser agreeable to both parties. If we and you are unable to agree on an appraiser, then the BUSINESS’s fair market value will be determined by three (3) independent appraisers who collectively will conduct one (1) appraisal. We will appoint one appraiser, you will appoint one appraiser and the two party appointed appraisers will appoint the third appraiser. You and we agree to select our respective appraisers within fifteen (15) days after the date we determine that we are unable to agree on the BUSINESS’s fair market value, and the two appraisers so chosen are obligated to appoint the third appraiser within fifteen (15) days after the date on which the last of the two party appointed appraisers was appointed. You and we will bear the cost of our own appraisers and share equally the reasonable fees and expenses of the third appraiser chosen by the two party appointed appraisers. You and we will take reasonable actions to cause the appraisers to complete their appraisal within thirty (30) days after the third appraiser’s appointment. (7) Closing. The purchase price will be paid at the closing of the purchase, which will take place not later than ninety (90) days after determination of the purchase price. We have the right to set off against the purchase price, and thereby reduce the purchase price by, any and all amounts you or your Owners owe to us. 53 (8) Instruments. At the closing, you agree to deliver instruments transferring: (a) good and merchantable title to the assets purchased, free and clear of all liens and encumbrances (other than liens and security interests acceptable to us, if any), with all sales and other transfer taxes paid by you; and (b) all licenses and permits of the BUSINESS which may be assigned or transferred; and (c) the leasehold interest in the Location and improvements thereon. (9) Escrow. If you cannot deliver clear title to all of the purchased assets, or if there are other unresolved issues, the closing of the sale will, at our election, be accomplished through an escrow arrangement with an independent escrow agent selected by us. (10) Releases. You and your owners agree to execute general releases, in form satisfactory to us, of any and all claims against us and our shareholders, officers, directors, employees, agents, successors and assigns. 16.12 CONTINUING OBLIGATIONS. All of our and your (and your owners’ and affiliates’) obligations which expressly or by their nature survive the expiration or termination of this Agreement will continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied in full or by their nature expire. 17. SECURITIES OFFERINGS. 17.1 18. RELATIONSHIP OF THE PARTIES AND INDEMNIFICATION. 18.1 14877234.6 04/17/14 SECURITIES OFFERINGS. Neither you nor any of your owners may issue or sell, or offer to issue or sell, any of your securities or any securities of any of your affiliates, regardless of whether such sale or offer would be required to be registered pursuant to the provisions of the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction, without obtaining our prior consent and complying with all of our requirements and restrictions concerning use of information about us and our Affiliates. Neither you nor any of your Owners may issue or sell your securities or the securities of any of your affiliates if: (1) such securities would be required to be registered pursuant to the Securities Act of 1933, as amended, or such securities would be owned by more than 35 persons; or (2) after such issuance or sale, you or such affiliate would be required to comply with the reporting and information requirements of the Securities Exchange Act of 1934, as amended. Any proposed private placement of your or of your affiliate’s securities must be approved by us. INDEPENDENT CONTRACTORS. Neither this Agreement nor the dealings of the parties pursuant to this Agreement shall create any fiduciary relationship or 54 any other relationship of trust or confidence between the parties hereto. Franchisor and Franchisee, as between themselves, are and shall be independent contractors. If applicable law shall imply a covenant of good faith and fair dealing in this Agreement, the parties hereto agree that such covenant shall not imply any rights or obligations that are inconsistent with a fair construction of the terms of this Agreement. Additionally, if applicable law shall imply such covenant, we and you acknowledge and agree that (a) this Agreement (and the relationship of the parties which arises from this Agreement) grants us the right to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests; (b) we will use our judgment in exercising such rights based on our assessment of our own interests and balancing those interests against the interests of the owners of PLANET FITNESS businesses generally (including ourselves, and our Affiliates and other franchisees), and specifically without considering your individual interests or the individual interests of any other particular franchisee; (c) we will have no liability to you for the exercise of our rights in this manner so long as such rights are not exercised in bad faith toward you; and (d) in the absence of such bad faith, no trier of fact in any legal action or arbitration proceeding shall substitute its judgment for our judgment so exercised. Nothing contained in this Agreement, or arising from the conduct of the parties hereunder, is intended to make either party a general or special agent, joint venturer, partner or employee of the other for any purpose whatsoever. You must conspicuously identify yourself in all dealings with customers, lessors, contractors, suppliers, public officials, employees and others as the owner of your BUSINESS and must place such other notices of independent ownership on such forms, business cards, stationery, advertising and other materials as we may require from time to time. You may not make any express or implied agreements, warranties, guarantees or representations or incur any debt in our name or on our behalf or represent that the relationship of the parties hereto is anything other than that of independent contractors. We will not be obligated by or have any liability under any agreements made by you with any third party or for any representations made by you to any third party. We will not be obligated for any damages to any person or property arising directly or indirectly out of the operation of your business hereunder. 18.2 14877234.6 04/17/14 NO LIABILITY FOR ACTS OF OTHER PARTY. You agree not to employ any of the Marks in signing any contract or applying for any license or permit, or in a manner that may result in our liability for any of your indebtedness or obligations, and that you will not use the Marks in any way we have not expressly authorized. Neither we nor you will make any express or implied agreements, warranties, guarantees or representations or incur any debt in the name or on behalf of the other, represent that our respective relationship is other than franchisor and franchisee or be obligated by or have any liability under any agreements or representations made by the other that are not expressly authorized in writing. We will not be obligated for any damages of any nature whatsoever to any person or property directly or indirectly arising out of the BUSINESS’s operation or the business you conduct pursuant to this Agreement. 55 14877234.6 04/17/14 18.3 TAXES. We will have no liability for any sales, use, service, occupation, employment related, excise, gross receipts, income, property or other taxes, whether levied upon you or the BUSINESS, in connection with the business you conduct (except any taxes we are required by law to collect from you with respect to purchases from us); provided, however, that if the state where your BUSINESS is located imposes any such tax, we will reimburse you for for the amount of such tax paid by you the first year such tax goes into effect. Payment of all such taxes is your sole responsibility. Further, you will pay all state and local taxes, including, without limitation, sales, use, service, occupation, employment related, excise, gross receipts, income, property or other taxes, that may be imposed on us as a result of our receipt or accrual of the Initial Franchise Fee, Royalty fees, advertising fees, extension fees, and all other fees that are referenced in this Agreement or in the Methods of Operation, whether assessed against you through withholding or other means or whether paid by us directly, unless the tax is credited against income tax otherwise payable by us. In such event, you will pay to us (or to the appropriate governmental authority) such additional amounts as are necessary to provide us, after taking such taxes into account (including any additional taxes imposed on such additional amounts), with the same amounts that we would have received or accrued had such withholding or other payment, whether by you or by us, not been required. Notwithstanding anything to the contrary in this Agreement, this provision does not apply to taxes imposed on us by the state or municipality where we have our principal place of business. 18.4 INDEMNIFICATION. You, and each of the Guarantors identified in Appendix B, agree that you shall, at all times, indemnify, exculpate, defend and hold harmless, to the fullest extent permitted by law, us, our successor, assigns, and Affiliates (including but not limited to Planet Fitness Equipment, LLC and PFIP, LLC), and the respective officers, directors, shareholders, agents, representatives, independent contractors, servants, and employees of each of them (the “Indemnified Parties”) from all losses and expenses incurred in connection with any action, suit, proceeding, claim, demand, investigation, or inquiry (formal or informal), or any settlement thereof, which arises out of or is based upon any of the following: the infringement, alleged infringement or any other violation by you, your Guarantors or principals of any patent, mark, copyright, or other proprietary right owned or controlled by third parties due to your unauthorized use of all or any portion of the Marks and/or System; the violation, breach, or asserted violation or breach by you, your Guarantors or principals of any federal, state, or local law, regulation, ruling or industry standard; libel, slander, or any other form of defamation by you or your Guarantors or principals; the violation or breach by you or by your Guarantors or principals of any warranty, representation, agreement, or obligation of this Agreement or in any other agreement between you and us or our Affiliates; any cyber-event, identity theft, or theft of personal information of a customer due to any security breach by you, your agents, or your employees; acts, errors, omissions of you, any of your affiliates, any of your principals, officers, directors, shareholders, agents, representatives, independent contractors, and employees of you and your affiliates in connection with the establishment and operation of the BUSINESS, including, 56 but not limited to, any acts, errors, or omissions of any of the foregoing in the operation of any motor vehicle or in the establishment or implementation of security for the BUSINESS; and any of the foregoing that are alleged to be caused by an Indemnified Party’s negligence, unless (and then only to the extent that) the claims, obligations, and damages are determined to be caused solely by the Indemnified Party’s gross negligence or willful misconduct according to a final, unappealable ruling issued by a court or arbitrator with competent jurisdiction. For purposes of this indemnification, “claims” includes all obligations, damages (actual, consequential or otherwise) and costs incurred in the defense of any claim against any of the Indemnified Parties, including, without limitation, reasonable accountants’, arbitrators’, attorneys’ and expert witness fees, costs of investigation and proof of facts, court costs, other expenses of litigation, arbitration or alternative dispute resolution and travel and living expenses. We have the right to defend any such claim against us at your expense. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. 18.5 19. 14877234.6 04/17/14 MITIGATION NOT REQUIRED. Under no circumstances will we or any other Indemnified Party be required to seek recovery from any insurer or other third party, or otherwise to mitigate our, their or your losses and expenses, in order to maintain and recover fully a claim against you. You agree that a failure to pursue such recovery or mitigate a loss will in no way reduce or alter the amounts we or another Indemnified Party may recover from you. ENFORCEMENT AND MISCELLANEOUS MATTERS. 19.1 SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS. Except as expressly provided to the contrary herein, each provision of this Agreement, and any portion thereof, will be considered severable, and if, for any reason, any such provision is held to be invalid or contrary to or in conflict with any applicable present or future law or regulation in a final, unappealable ruling issued by any court, agency or tribunal with competent jurisdiction in a proceeding to which we are a party, that ruling will not impair the operation of, or have any other effect upon, such other portions of this Agreement as may remain otherwise intelligible, which will continue to be given full force and effect and bind the parties hereto, although any portion held to be invalid will be deemed not to be a part of this Agreement from the date the time for appeal expires, if you are a party thereto, otherwise upon your receipt from us of a notice of nonenforcement thereof. 19.2 LESSER COVENANT ENFORCEABLE. If any covenant herein which restricts competitive activity is deemed unenforceable by virtue of its scope in terms of area, business activity prohibited and/or length of time, but would be enforceable by reducing any part or all thereof, you and we agree that such covenant will be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction whose law is applicable to the validity of such covenant. 57 14877234.6 04/17/14 19.3 GREATER NOTICE. If any applicable and binding law or rule of any jurisdiction requires a greater prior notice than is required hereunder of the termination of this Agreement or of our refusal to enter into a successor franchise agreement, or the taking of some other action not required hereunder, or if, under any applicable and binding law or rule of any jurisdiction, any provision of this Agreement or any part of Methods of Operation is invalid or unenforceable the prior notice and/or other action required by such law or rule will be substituted for the comparable provisions hereof, and we will have the right to modify such invalid or unenforceable provision or unenforceable part of this Agreement or the Operations Manual or any part of Methods of Operation to the extent required to be valid and enforceable. You agree to be bound by any promise or covenant imposing the maximum duty permitted by law which is subsumed within the terms of any provision hereof as though it were separately articulated in and made a part of this Agreement, that may result from striking from any of the provisions hereof, or any part of Methods of Operation, any portion or portions which a court or arbitrator may hold to be unenforceable in a final decision to which we are a party, or from reducing the scope of any promise or covenant to the extent required to comply with such a court order or arbitration award. Such modifications to this Agreement will be effective only in such jurisdiction, unless we elect to give them greater applicability, and will be enforced as originally made and entered into in all other jurisdictions. 19.4 WAIVER OF OBLIGATIONS. We and you may by written instrument unilaterally waive or reduce any obligation of or restriction upon the other under this Agreement, effective upon delivery of written notice thereof to the other or such other effective date stated in the notice of waiver. Any waiver we grant will be without prejudice to any other rights we may have, will be subject to our continuing review and may be revoked at any time and for any reason, effective upon delivery to you of ten (10) days’ prior written notice. 19.5 NON-WAIVER. We and you will not be deemed to have waived or impaired any right, power or option reserved by this Agreement (including without limitation the right to demand exact compliance with every term, condition and covenant herein or to declare any breach thereof to be a default and to terminate this Agreement prior to the expiration of its term) by virtue of any custom or practice at variance with the terms hereof; our or your failure refusal or neglect to exercise any right under this Agreement or to insist upon exact compliance by the other with our and your obligations hereunder including without limitation Methods of Operation; our waiver, forbearance, delay, failure, or omission to exercise any right, power or option whether of the same, similar or different nature with respect to other PLANET FITNESS businesses; the existence of other franchise agreements for PLANET FITNESS businesses which contain different provisions from those contained herein; or our acceptance of any payments due from you after any breach of this Agreement. No special or restrictive legend or endorsement on any check or similar item given to us will constitute a waiver, compromise, settlement or accord and satisfaction. We are 58 authorized to remove or obliterate any legend or endorsement, and such legend or endorsement will have no effect. 19.6 FORCE MAJEURE. Neither we nor you will be liable for loss or damage or deemed to be in breach of this Agreement if our or your failure to perform our or your obligations is not our or your fault and results from: (1) transportation shortages, inadequate supply of equipment, products, merchandise, supplies, labor, material or energy or the voluntary foregoing of the right to acquire or use any of the foregoing in order to accommodate or comply with the orders, requests, regulations, recommendations or instructions of any federal, state or municipal government or any department or agency thereof; (2) acts of nature; (3) fires, strikes, embargoes, war or riot; (4) failure to obtain land use or environmental approvals from the applicable government body or agency, so long as you diligently pursue any such required approvals; or (5) any other similar event or cause. 19.7 EXTEND PERFORMANCE. Any delay resulting from any of said causes will extend performance accordingly or excuse performance, in whole or in part, as may be reasonable, except that said causes will not excuse payments of amounts owed at the time of such occurrence or payment of Royalties and Ad Fees due on any sales thereafter. 19.8 OUT-OF-STOCK AND DISCONTINUED. We are not liable to you for any loss or damage, or deemed to be in breach of this Agreement, if we cannot deliver, or cause to be delivered, or if our Affiliates or designated sources or Approved Suppliers cannot deliver, all of your orders for products, merchandise, equipment, supplies, etc., where such things are out-of-stock or discontinued. 19.9 COSTS AND ATTORNEYS’ FEES. If we incur expenses in connection with your failure to pay when due amounts owed to us or to submit when due any reports, information or supporting records or otherwise to comply with this Agreement, you agree to reimburse us for any of the costs and expenses which we incur, including, without limitation, reasonable accounting, attorneys’, arbitrators’ and related fees. 19.10 YOU MAY NOT WITHHOLD PAYMENTS DUE TO US. You agree that you will not withhold payment of any amounts owed to us on the grounds of our alleged nonperformance of any of our obligations hereunder. You agree that all such claims will, if not otherwise resolved by us, be submitted to arbitration as provided in Article 19.12. 14877234.6 04/17/14 59 19.11 RIGHTS OF PARTIES ARE CUMULATIVE. Our and your rights hereunder are cumulative, and no exercise or enforcement by us or you of any right or remedy hereunder will preclude our or your exercise or enforcement of any other right or remedy hereunder which we or you are entitled by law to enforce. 19.12 DISPUTE RESOLUTION. (1) 14877234.6 04/17/14 Mediation. Except as provided in Article 19.12.3, prior to filing any demand for arbitration, the parties agree to mediate any dispute, controversy or claim between and among the parties and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease or sublease for your Business, any loan or other finance arrangement between us or our affiliates and you, the parties’ relationship, your Business, or any System Standard in accordance with the following procedures: (a) The party seeking mediation must commence mediation by sending the other party, in accordance with Article 20, a written notice of its request for mediation headed “Notification of Dispute.” The Notification of Dispute will specify, to the fullest extent possible, the party’s version of the facts surrounding the dispute; the amount of damages and the nature of any injunctive or other relief such party claims. The party (or parties as the case may be) receiving a Notification of Dispute will respond within twenty (20) days after receipt thereof, in accordance with Article 20, stating its version of the facts and, if applicable, its position as to damages sought by the party initiating the dispute procedure; provided, however, that if the dispute has been the subject of a default notice given under Article 15 of this Agreement, the other party will respond within ten (10) business days. (b) Upon receipt of a Notification of Dispute and response under Article 19.12.1, the parties will endeavor, in good faith, to resolve the dispute outlined in the Notification of Dispute and response. If the parties have been unable to resolve a dispute outlined in a Notification of Dispute or a response thereto within twenty (20) days after receipt of the response, either party may initiate a mediation procedure with the American Arbitration Association (“AAA”), pursuant to its Commercial Mediation Procedures, and unless otherwise agreed by the parties will take place in the city of our then-current corporate headquarters. The parties must jointly select and share equally in the payment of a mediator. (c) All mediation sessions will occur in New Hampshire at a mutuallyagreeable location and must be attended by your Responsible Owner (and any other persons with authority to settle the dispute 60 on your behalf) and our representative(s) who is/are authorized to settle the dispute. The parties may be represented by counsel at the mediation. The parties agree to participate in the mediation proceedings in good faith and with the intention of resolving the dispute if at all possible within 30 days of the notice from the party seeking to initiate the mediation procedures. If the dispute is not resolved within 30 days, any party may initiate an arbitration pursuant to Article 19.12.2. In addition, if the party receiving notice of mediation has not responded within 5 days of delivery of the notice or a party fails to participate in the mediation, this Article 19.12.1 will no longer be applicable and the other party can pursue arbitration. The parties agree that the costs of the mediator will be split equally between the parties. Each party must pay its own fees and expenses incurred in connection with the mediation. The mediation proceeding and any negotiations and results thereof will be treated as a compromise settlement negotiation and the entire process is confidential. At least 5 days prior to the initial mediation session, each party must deliver a written statement of positions. (2) 14877234.6 04/17/14 Arbitration. Except as provided in Article 19.12.3, any dispute, controversy or claim between you and us and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease or sublease for your Business, any loan or other finance arrangement between us or our affiliates and you, the parties’ relationship, your Business, or any System Standard or the scope of validity of the arbitration obligation under this Article not resolved by mediation must be submitted to binding arbitration in accordance with the Federal Arbitration Act. The arbitration will be administered by the AAA pursuant to its Commercial Arbitration Rules then in effect by one arbitrator. (a) In connection with any arbitration proceeding, each party will submit or file any claim which would constitute a compulsory counterclaim (as defined by the then-current Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed in such proceeding will be barred. (b) Any arbitration must be on an individual basis only as to a single franchisee (and not as or through an association) and the parties and the arbitrator will have no authority or power to proceed with any claim on a class-wide basis or otherwise to join or consolidate any claim with any claim or any other proceeding involving third parties or any other franchisee. If a court or arbitrator determines that this limitation on joinder of or class-wide claims is 61 unenforceable, then the agreement to arbitrate the dispute will be null and void and the parties must submit all claims to the jurisdiction of the courts, in accordance with Article 19.14. 14877234.6 04/17/14 (c) The arbitration must take place in the city closest to where our headquarters is located at the time of the dispute. (d) The arbitrator must follow the law and not disregard the terms of this Agreement. The arbitrator must be a former federal or state court judge with at least five years of significant experience in commercial law. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or us. The arbitrator may not under any circumstance (a) stay the effectiveness of any pending termination of this Agreement, (b) assess punitive or exemplary damages, (c) certify a class or a consolidated action, or (d) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set. The arbitrator will have the right to make a determination as to any procedural matters as would a court of competent jurisdiction be permitted to make in the state in which our corporate headquarters is then located. The arbitrator will also decide any factual, procedural, or legal questions relating in any way to the dispute between the parties, including, but not limited to: any decision as to whether Article 19.14 is applicable and enforceable as against the parties, subject matter, timeliness, scope, remedies, unconscionability, and any alleged fraud in the inducement. (e) The arbitrator can issue summary orders disposing of all or part of a claim and provide for temporary restraining orders, preliminary injunctions, injunctions, attachments, claim and delivery proceedings, temporary protective orders, receiverships, and other equitable and/or interim/final relief. Each party consents to the enforcement of such orders, injunctions, etc., by any court having jurisdiction. (f) The arbitrator will have subpoena powers limited only by the laws of the state in which our corporate headquarters is then located. (g) The parties to the dispute will have the same discovery rights as are available in civil actions under the laws of the state in which our corporate headquarters is then located. (h) All other procedural matters will be determined by applying the statutory, common laws, and rules of procedure that control a court of competent jurisdiction in which our corporate headquarters is then located. 62 (3) (4) 14877234.6 04/17/14 (i) Other than as may be required by law, the entire arbitration proceedings (including, but not limited to, any rulings, decisions or orders of the arbitrator), will remain confidential and will not be disclosed to anyone other than the parties to this Agreement. (j) The judgment of the arbitrator on any preliminary or final arbitration award will be final and binding and may be entered in any court having jurisdiction. (k) We reserve the right, but have no obligation, to advance your share of the costs of any arbitration proceeding in order for such arbitration proceeding to take place and by doing so will not be deemed to have waived or relinquished our right to seek recovery of those costs in accordance with Article 19.9 or 19.12.4. Exceptions to Arbitration. Notwithstanding Articles 19.12.1 and 19.12.2, the parties agree that the following claims will not be subject to arbitration or mediation: (a) any action for equitable relief, including, without limitation, seeking preliminary or permanent injunctive relief, specific performance, declaratory relief, other relief in the nature of equity to enjoin any harm or threat of harm to such party’s tangible or intangible property, brought at any time, including without limitation, prior to or during the pendency of any arbitration proceedings initiated hereunder; (b) any action in ejectment or for possession of any interest in real or personal property; (c) any action which by applicable law cannot be arbitrated; or (d) our decision in the first instance to issue a notice of default and/or notice of termination, or undertake any other conduct with respect to the franchise relationship that might later result in a dispute or controversy between us; and (e) the parties further agree that any application for judicial relief pursuant to Article 19.12.3 and its subparts shall not constitute a waiver of the moving party’s right to demand arbitration of any dispute pursuant to Article 19.12.2 and its subparts. Costs and Attorneys’ Fees. The prevailing party in any action or proceeding arising under, out of, in connection with, or in relation to this Agreement will be entitled to recover its reasonable costs and expenses (including attorneys’ fees, arbitrator’s fees and expert witness fees, costs of investigation and proof of facts, court costs, and other arbitration or 63 litigation expenses) incurred in connection with the claims on which it prevailed. (5) Survival. The provisions of this Article 19.12 are intended to benefit and bind certain third party non-signatories and will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. (6) Tolling of Statute of Limitations. All applicable statutes of limitation and defenses based on the passage of time are tolled while the dispute resolution procedures in this Article 19.12 are pending. The parties will take such action, if any, required to effectuate such tolling. (7) Performance to Continue. Each party must continue to perform its obligations under this Agreement pending final resolution of any dispute pursuant to this Article 19.12, unless to do so would be impossible or impracticable under the circumstances. 19.13 GOVERNING LAW. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et. seq.). Except to the extent governed by the Federal Arbitration Act as required hereby, the UNITED STATES TRADEMARK ACT OF 1946 (LANHAM ACT, 15 U.S.C. §§ 1051 et seq.) or other federal law, this Agreement, the franchise and all claims arising from the relationship between us and you will be governed by the laws of New Hampshire, without regard to its conflict of laws principles, except that any law regulating the sale of franchises or governing the relationship of a franchisor and its franchisee will not apply unless jurisdictional requirements are met independently without reference to this Article. 19.14 CONSENT TO JURISDICTION. Subject to Article 19.12., you and your Owners agree that we may institute any action against you or your Owners in any state or federal court of general jurisdiction in New Hampshire and you (and each Owner) irrevocably submit to the jurisdiction of such courts and waive any objection you (or he or she) may have to either the jurisdiction of or venue in such courts. 19.15 WAIVER OF PUNITIVE DAMAGES, JURY TRIAL AND CLASS ACTIONS. Except with respect to your obligation to indemnify us pursuant to Article 18.4. and 18.5. and claims we bring against you for your unauthorized use of the Marks or unauthorized use or disclosure of any Confidential Information, we and you and your respective Owners waive to the fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the other and agree that, in the event of a dispute between us, the party making a claim will be limited to equitable relief and to recovery of any actual damages it sustains. We and you irrevocably waive, to the fullest extent permitted by law, trial by jury in any action, proceeding or counterclaim, whether at law or in equity, brought by either of us. This waiver is effective even if a court of competent jurisdiction 14877234.6 04/17/14 64 decides that the arbitration provision in this Article 19 is unenforceable. We each waive to the fullest extent possible under the law our respective rights to bring against the other or any affiliate or the other any claims denominated as a class action, consolidated action, or joint action, whether or not permitted under applicable court rules. Each party acknowledges that it has had a full opportunity to consult with counsel concerning this waiver, and that this waiver is informed, voluntary, intentional, and not the result of unequal bargaining power. 19.16 BINDING EFFECT. This agreement is binding upon us and you and our respective executors, administrators, heirs, beneficiaries, assigns and successors in interest and may not be modified except by written agreement signed by you and us. 19.17 LIMITATIONS OF CLAIMS. Except for claims arising from your nonpayment or underpayment of amounts you owe us pursuant to this Agreement, or claims related to your unauthorized use of the Marks, any and all claims arising out of or relating to this Agreement or our relationship with you will be barred unless a judicial proceeding is commenced within one (1) year from the date on which the party asserting such claim knew or should have known of the facts giving rise to such claims. 19.18 CONSTRUCTION. The preambles and exhibits are a part of this Agreement which, together with the Operations Manual and our other written policies, constitute our and your entire agreement except as provided below, and there are no other oral or written understandings or agreements between us and you relating to the subject matter of this Agreement, except that you acknowledge that we justifiably have relied on your representations made prior to the execution of this Agreement as set forth in Article 1 hereof. Except as contemplated by the provisions of Article 19.12., nothing in this Agreement is intended, nor is deemed, to confer any rights or remedies upon any person or legal entity not a party hereto. 19.19 WITHHOLD APPROVAL. Except where this Agreement expressly obligates us reasonably to approve or not unreasonably to withhold our approval of any of your actions or requests, we have the absolute right to refuse any request you make or to withhold our approval of any of your proposed or effected actions that require our approval. 19.20 HEADINGS. The headings of the several Articles hereof are for convenience only and do not define, limit or construe the contents of such Articles. 19.21 JOINT AND SEVERAL OWNERS’ LIABILITY. If two or more persons are at any time the owner of the BUSINESS hereunder, whether as partners or joint venturers, their obligations and liabilities to us will be joint and several. References to “owner” mean any person holding a direct or indirect, legal or beneficial ownership interest or voting rights in you (or a transferee of this Agreement and the BUSINESS or an interest in you), including, without limitation, any person who has a direct or indirect interest in you (or a transferee), 14877234.6 04/17/14 65 this Agreement, the Franchise or the BUSINESS and any person who has any other legal or equitable interest, or the power to vest in himself any legal or equitable interest, in the revenue, profits, rights or assets thereof. References to a “controlling interest” in you mean thirty three and one-third (33.33%) percent or more of your voting shares or other voting rights if you are a corporation, limited liability company or partnership owned by three (3) or more persons; otherwise, fifty (50%) percent or more of your voting shares or other voting rights will constitute a “controlling interest.” “Person” means any natural person, corporation, limited liability company, general or limited partnership, unincorporated association, cooperative or other legal or functional entity. 19.22 ANTI-TERRORISM LAWS. You acknowledge that it is our intent to comply with all anti-terrorism laws enacted by the U.S. Government, including but not limited to the USA PATRIOT ACT or Executive Order 13324. You acknowledge that you are not now, nor have you ever been, a suspected terrorist or otherwise associated directly or indirectly with terrorist activity. At any time during the term of this Agreement, if we are prohibited from doing business with you under any anti-terrorism law enacted by the U.S Government, then this Agreement may be terminated immediately. 19.23 RIGHT TO INFORMATION. You consent to us obtaining, using and disclosing to third parties (including, without limitation, financial institutions, legal and financial advisors, and prospective franchisees), for any purpose we specify or as may be required by law, all financial and other information (including, without limitation, membership data and customer lists) contained in or resulting from information, data, materials, statements and reports related, directly or indirectly, to the BUSINESS. 19.24 MULTIPLE COPIES. This Agreement may be executed in multiple copies, each of which will be deemed an original, and all of which when taken together shall constitute one and the same document. 19.25 ENTIRE AGREEMENT BETWEEN THE PARTIES. This Agreement together with any exhibits, addenda and appendices hereto constitute the sole agreement between you and us with respect to the entire subject matter of this Agreement and embody all prior agreements and negotiations with respect to your BUSINESS authorized hereunder. There are no representations or warranties of any kind, express or implied, except as contained herein or in the Franchise Disclosure Document (“FDD”) provided to you in connection with this Agreement. Except to the extent we have negotiated changes to this Agreement that differ from the FDD, nothing in this Agreement is intended to disclaim representations that were provided to you in the FDD. 14877234.6 04/17/14 66 20. NOTICES AND PAYMENTS. 20.1 20.2 NOTICES. All written notices and reports permitted or required to be delivered by the provisions of this Agreement or the Operations Manual will be deemed so delivered: (1) at the time delivered by hand; (2) one (1) business day after transmission by telecopy, facsimile or other electronic system, provided there is evidence of delivery; (3) one (1) business day after being placed in the hands of a commercial courier service for next business day delivery, provided there is evidence of delivery; or (4) five (5) business days after placement in the United States Mail by Registered or Certified Mail, Return Receipt Requested, postage prepaid; and must be addressed to the party to be notified at its most current principal business address of which the notifying party has been notified. Any required payment or report which we do not actually receive during regular business hours on the date due (or postmarked by postal authorities at least two (2) days prior thereto) will be deemed delinquent. PAYMENTS. All payments required to be delivered by the provisions of this Agreement or the Operations Manual will be deemed so delivered as provided in Article 20.1. above, and will be deemed delivered by EFT or bank-wire transfer upon telephone or electronic confirmation with the receiving bank. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the Effective Date. THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES. Pla-Fit Franchise, LLC By:__________________________________________ Title: ________________________________________ EFFECTIVE DATE: __________________________ EACH OF THE UNDERSIGNED PARTIES WARRANTS AND REPRESENTS THAT HE/SHE HAS NOT RELIED UPON ANY GUARANTEES CONCERNING REVENUE, PROFIT OR THE SUCCESS OF THIS FRANCHISE IN SO SIGNING. [OWNER CORPORATION OR PARTNERSHIP] 14877234.6 04/17/14 67 By:__________________________________________ Title: ________________________________________ Dated: _______________________________________ As Individuals: ____________________________________________ Dated: _______________________________________ ____________________________________________ Dated: _______________________________________ ____________________________________________ Dated: _______________________________________ ____________________________________________ Dated: _______________________________________ 14877234.6 04/17/14 68 APPENDIX A OWNERSHIP ADDENDUM 1. RESPONSIBLE OWNER. The name, home address and social security number of the Responsible Owner is as follows: . 2. APPROVED OPERATOR. The name, home address and social security number of the Approved Operator is as follows: 3. FORM OF ENTITY OF FRANCHISEE. (a) CORPORATION OR LIMITED LIABILITY COMPANY. Franchisee was organized on ____________________________, under the laws of the State of _____________________________________. Its Federal Identification Number is _____________________. It has not conducted business under any name other than its corporate or company name. Name of Each Director/Officer/Managing Member Position(s) Held (b) PARTNERSHIP. Franchisee is a [general] [limited] partnership formed on ________________, _____________ under the laws of the State of _______________. Its Federal Identification Number is____________________. It has not conducted business under any name other than its partnership name. Appendix A-1 14877234.6 04/17/14 Name of Each General Partner 4. OWNERS. (a) Franchisee and each of its Owners represents and warrants that the following is a complete and accurate list of all Owners of any interest whatsoever in Franchisee, including the full name, mailing address and social security number of each Owner, and fully describes the nature and extent of each Owner’s interest in Franchisee. Franchisee and each Owner as to his ownership interest, represents and warrants that each Owner is the sole and exclusive legal and beneficial owner of his ownership interest in Franchisee, free and clear of all liens, restrictions, agreements and encumbrances of any kind or nature, other than those required or permitted by this Agreement. Owner’s Name, Address and Social Security Number Percentage and Nature of Ownership Interest (b) Control Group. You represent and warrant that the following Owner or group of Owners has, directly or indirectly, 51% or more ownership interest in you and voting control over its ownership interests in you and constitutes your Control Group as described in Article 2.4 of the Franchise Agreement. Appendix A-2 14877234.6 04/17/14 Owner’s Name, Address and Social Security Number Percentage and Nature of Ownership Interest This Appendix A is deemed accepted and made a part of the Franchise Agreement as of the Franchise Agreement’s Effective Date. (Name of corporation, limited liability company or partnership) By: Print Name: Title: Date: PLA-FIT FRANCHISE, LLC A New Hampshire Limited Liability Company By: Print Name: Title: Date: Owners: (Signature) __________________________________ (Date) (Print Name) (Signature) __________________________________ (Date) (Print Name) (Signature) __________________________________ (Date) (Print Name) Appendix A-3 14877234.6 04/17/14 APPENDIX B OWNERS’ PERSONAL GUARANTY OF FRANCHISEE’S OBLIGATIONS (“Guaranty”) In consideration of, and as an inducement to, the execution of the Pla-Fit Franchise, LLC Franchise Agreement dated as of ______________________________________, (the “Agreement”) by and between the Pla-Fit Franchise, LLC (“Franchisor”), and ______________________ (“Franchisee”) each of the undersigned Owners of five percent (5%) or greater interest in Franchisee hereby personally and unconditionally: (1) guarantees to Franchisor and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that Franchisee shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement (and any amendments) and that each and every representation of Franchisee made in connection with the Agreement (and any amendments) are true, correct and complete in all respects at and as of the time given; and (2) agrees personally to be bound by, and personally liable for the breach of, each and every provision in the Agreement (and any amendments), including, without limitation, the confidentiality obligations and non-competition covenants in Articles 8 and 16 of the Agreement, respectively. Each of the undersigned waives: (a) acceptance and notice of acceptance by Franchisor of the foregoing undertakings; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right he may have to require that an action be brought against Franchisee or any other person as a condition of liability; (e) notice of any amendment to the agreement; and (f) any and all other notices and legal or equitable defenses to which he may be entitled. Each of the undersigned consents and agrees that: (i) his direct and immediate liability under this guaranty shall be joint and several; (ii) he shall render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses to do so punctually; (iii) such liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Franchisee or any other person; and (iv) such liability shall not be diminished, relieved or otherwise effected by any extension of time, credit or other indulgence which the Franchisor may from time to time grant to Franchisee or to any other person including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be continuing and irrevocable until satisfied in full. It is further understood and agreed by the undersigned that the provisions, covenants and conditions of the Guaranty will inure to the benefit of our successors and assigns. This Guaranty shall be governed by the governing law provisions set forth in Article 19.13 of the Agreement and all disputes related to it shall be resolved in accordance with the dispute resolution provisions set forth in Articles 19.12, 19.14, 19.15, and 19.17 of the Agreement. Appendix B-1 14877234.6 04/17/14 IN WITNESS WHEREOF, each of the undersigned has hereunto affixed his signature, under seal, as of the Effective Date of the Agreement. PERCENTAGE OF OWNERSHIP INTERESTS IN FRANCHISEE GUARANTOR (S) (Signature) (Print Name) (Signature) (Print Name) (Signature) (Print Name) DATE: ________________, ______________ Subscribed and sworn to before me this _______________ day of ____________, ________.. ___________________________________________ Notary Public My Commission expires: Appendix B-2 14877234.6 04/17/14 APPENDIX C OWNER PERSONAL COVENANTS REGARDING CONFIDENTIALITY AND NON-COMPETITION In conjunction with your investment in ________________(“Franchisee”) a __________________, you (“Owner” or “you”), acknowledge and agree as follows: 1. Franchisee owns and operates, or is developing, a PLANET FITNESS business located or to be located at ____________________ pursuant to a franchise agreement (“Franchise Agreement”) with Pla-Fit Franchise, LLC, which Franchise Agreement requires persons with legal or beneficial ownership interests in Franchisee under certain circumstances to be personally bound by the confidentiality and noncompetition covenants contained in the Franchise Agreement. All capitalized terms contained herein shall have the same meaning set forth in the Franchise Agreement. 2. You own or intend to own a legal or beneficial ownership interest in Franchisee and acknowledge and agree that your execution of this agreement (“Agreement”) is a condition to such ownership interest and that you have received good and valuable consideration for executing this Agreement. We may enforce this Agreement directly against you and Your Owners (as defined below). 3. If you are a corporation, partnership, limited liability company or other entity, all persons who have a legal or beneficial interest in you (“Your Owners”) must also execute this Agreement. 4. You and Your Owners, if any, may gain access to parts of our Confidential Information as a result of investing in Franchisee. The Confidential Information is proprietary and includes our trade secrets. You and Your Owners hereby agree that while you and they have a legal or beneficial ownership interest in Franchisee and thereafter you and they: (a) will not use the Confidential Information in any other business or capacity (such use being an unfair method of competition); (b) will exert best efforts to maintain the confidentiality of the Confidential Information; and (c) will not make unauthorized copies of any portion of the Confidential Information disclosed in written, electronic or other form. If you or Your Owners cease to have an interest in Franchisee, you and Your Owners, if any, must deliver to us any such Confidential Information in your or their possession. 5. You specifically acknowledge that you will receive valuable, specialized training, Confidential Information (as defined in Article 8.1 of the Franchise Agreement), and other proprietary and specialized information and knowledge that provide a valuable, competitive advantage in operating a men’s, women’s, children’s, or co-ed fitness, exercise, athletic or wellness facility of any kind. You further acknowledge that we would be unable to protect the Confidential Information against unauthorized use or disclosure or to encourage the free exchange of ideas and information among our franchisees if you were permitted to hold interests in or perform services for a Competitive Business (as defined in Article 1.4 of the Franchise Agreement), and we have granted you the Franchisee certain rights under the Franchise Agreement in consideration of, and in reliance upon, your agreement to deal exclusively with us. You therefore covenant that during the term of the Franchise Agreement (except as otherwise approved in writing by us), you, Your Owners, and you and their Immediate Families shall not, either directly, indirectly or through, on behalf of, or in conjunction with any person or legal entity: Appendix C-1 14877234.6 04/17/14 (a) Divert or attempt to divert any present or prospective business or customer of any PLANET FITNESS business to any non-PLANET FITNESS competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; (b) Recruit, employ or seek to employ any person who is at that time, or has been within the past six (6) months, employed by us or one of our affiliates, or otherwise directly or indirectly induce such person to leave his or her employment; or (c) Own, maintain, operate, engage in, be employed by, act as a consultant for, perform services for, provide assistance to, or have any interest in (as owner or otherwise) any Competitive Business. 6. You covenant that, except as otherwise approved in writing by us, you and Your Owners shall not, for a continuous, uninterrupted period of two (2) years commencing upon the date of (a) a transfer permitted under Article 13 of the Franchise Agreement, (b) expiration of the Franchise Agreement, (c) termination or non-renewal of the Franchise Agreement (regardless of the cause for termination or non-renewal), or (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Paragraph, either directly or indirectly, for yourself or your Immediate Family, or through, on behalf of, or in conjunction with any person or legal entity, own, maintain, operate, engage in, be employed by, act as a consultant for, perform services for, provide assistance to, or have any interest in (as owner or otherwise) any Competitive Business that is, or is intended to be, located (a) at the location of the PLANET FITNESS business, (b) within fifteen (15) miles of the location, or (c) fifteen (15) miles of any PLANET FITNESS business in operation or under construction as of the date that you are required to comply with this Paragraph 6. You agree and acknowledge that the two (2) year period of this restriction shall be tolled during any time period in which you are in violation of this restriction. 7. You and each of Your Owners expressly acknowledge the possession of skills and abilities of a general nature and the opportunity to exploit such skills in other ways, so that enforcement of the covenants contained in Articles 5 and 6 will not deprive any of you of your personal goodwill or ability to earn a living. If any covenant herein which restricts competitive activity is deemed unenforceable by virtue of its scope or in terms of geographical area, type of business activity prohibited and/or length of time, but could be rendered enforceable by reducing any part or all of it, you and we agree that it will be enforced to the fullest extent permissible under applicable law and public policy. We may obtain in any court of competent jurisdiction any injunctive relief, including temporary restraining orders and preliminary injunctions, against conduct or threatened conduct for which no adequate remedy at law may be available or which may cause it irreparable harm. You and each of Your Owners acknowledges that any violation of Articles 4, 5 or 6 hereof would result in irreparable injury for which no adequate remedy at law may be available. If we file a claim to enforce this Agreement and prevails in such proceeding, you agree to reimburse us for all its costs and expenses, including reasonable attorneys’ fees. IN WITNESS WHEREOF, each of the undersigned has hereunto affixed his signature, under seal, as of the Effective Date of the Franchise Agreement. Appendix C-2 14877234.6 04/17/14 OWNER If an Individual: If a corporation, partnership, limited liability company or other legal entity: (Signature) (Print Name) Limited liability company or other Legal entity) (Name of corporation, partnership, By: Print Name: Title: YOUR OWNERS: If you are a corporation, partnership, limited liability company or other legal entity. By: Print Name: By: Print Name: By: Print Name: By: Print Name: Appendix C-3 14877234.6 04/17/14 APPENDIX D SILENT INVESTORS Franchisee owns and operates, or is developing, a PLANET FITNESS business located or to be located at ____________________ (“Business”) pursuant to a franchise agreement (“Franchise Agreement”) with Pla-Fit Franchise, LLC (“Franchisor”). Capitalized terms not defined herein have the meanings set forth in the Franchise Agreement. Franchisee and its Owners each acknowledge and agree as follows: 1. Silent Investor. As used in the Franchise Agreement and herein, the term “Silent Investor” means and refers to the following individuals and/or entities: Silent Investor Name and Address Percentage Ownership Interest Silent Investor:_____________________________________ Address:__________________________________________ ___________________% As owned/controlled by: _____________________________ Address: __________________________________________ ___________________% As owned/controlled by: _____________________________ Address: __________________________________________ ___________________% Silent Investor:_____________________________________ Address:__________________________________________ ___________________% As owned/controlled by: _____________________________ Address: __________________________________________ ___________________% As owned/controlled by: _____________________________ Address: __________________________________________ ___________________% Silent Investor:_____________________________________ Address:__________________________________________ ___________________% As owned/controlled by: _____________________________ Address: __________________________________________ ___________________% As owned/controlled by: _____________________________ Address: __________________________________________ ___________________% Appendix D-1 14877234.6 04/17/14 2. Additional Silent Investors/Franchisor Approval. The addition of Silent Investors, as well as the equity interest of each such Silent Investor, is subject to the Franchisor’s prior written approval. Specifically, Franchisee Parties may not add any new Silent Investor unless such person or entity, and any other person or entity that directly or indirectly controls such person or entity, first satisfies, to Franchisor’s satisfaction, Franchisor’s then-current character and financial requirements applicable to all PLANET FITNESS franchisees at the time, including, without limitation, the completion of a satisfactory background check and credit check conducted by (or on behalf of) Franchisor. Franchisee and Responsible Owner (“Franchisee Parties”) must notify Franchisor within seven (7) calendar days of the date that any Silent Investor ceases having an ownership interest in Franchisee. 3. Silent Investor Prohibitions. Franchisee Parties each agree that no Silent Investor will: A. Undertake or exercise an active role in the management or operation of the Business; B. Have or otherwise acquire access to Confidential Information or other operating information, including information set forth in the Operations Manual (and/or any component thereof); or C. Disclose his/her/its ownership interest in the Business to any third party, except for professional advisors that need to know or as required by law. 4. Covenants of Franchisee Parties. Franchisee Parties each covenant that they will not give, provide, disseminate, create access to, or otherwise release any or all of the following to any Silent Investor: Confidential Information, operating information other than financial statements, marketing techniques or materials that are similar to those used under or in connection with the PLANET FITNESS Methods of Operations, member rate structures similar to those used under or in connection with the PLANET FITNESS Methods of Operations, any of Franchisor’s procedures or systems, and any other information that we designate as proprietary and confidential. Franchisee Parties further acknowledge, understand and agree that if a Silent Investor learns Confidential Information or other operating information at any time during or after the term of the Franchise Agreement, Franchisee Parties will be presumed to have disclosed such Confidential Information or other operating information to the Silent Investor(s). 5. Representation and Warranty. Franchisee Parties expressly represent and warrant to Franchisor that the individuals and/or entities identified in Article 1 above constitute all Silent Investors as of the Effective Date, and that no different or additional Silent Investors will acquire or otherwise obtain an interest in Franchisee absent compliance with the conditions described in Article 2 above. 6. Liability for Damages. If any or all of the Franchisee Parties violate the confidentiality or noncompetition provisions of the Franchise Agreement and/or Article 4 (above), the Franchisee Parties will be jointly and severally liable for any such breach, including, to the fullest extent possible, all damages and costs resulting from Franchisor’s enforcement or attempted Appendix D-2 14877234.6 04/17/14 enforcement against any or all Franchisee Parties of any provision of this Appendix or the Franchise Agreement. 7. Cross Default. For the avoidance of doubt, any breach or default under this Appendix D (including, without limitation, Article 4 above) will be deemed an incurable default under the Franchise Agreement. Franchisee Parties acknowledge that a violation of Articles 3 and/or 4 of this Appendix would result in irreparable injury for which no adequate remedy at law may be available. If Franchisor files a claim to enforce the terms of this Appendix and prevails in such proceeding, Franchisee Parties agree to reimburse Franchisor for all its costs and expenses, including reasonable attorneys’ fees. IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as of the Effective Date noted below. (Name of corporation, limited liability company or partnership) By: Print Name: Title: PLA-FIT FRANCHISE, LLC A New Hampshire Limited Liability Company By: Print Name: Title: EFFECTIVE DATE: Owners: (Signature) ____________________________________ (Date) (Print Name) (Signature) ____________________________________ (Date) (Print Name) (Signature) ____________________________________ (Date) (Print Name) Appendix D-3 14877234.6 04/17/14 APPENDIX E ASSIGNMENT OF TELEPHONE NUMBERS Date: _______________ This assignment is effective as of the date of termination of the Franchise Agreement entered into between Pla-Fit Franchise, LLC (“us”) and _______________ (“you”). You hereby irrevocably assign to us or our designee the telephone number or numbers and listings issued to you with respect to each and all of your PLANET FITNESS® businesses (“telephone numbers”). This assignment is for collateral purposes only and we have no liability or obligation of any kind whatsoever arising from this assignment, unless we desire to take possession and control over the telephone numbers. We hereby are authorized and empowered upon termination of the Franchise Agreement and without any further notice to you to notify the telephone company, as well as any other company that publishes telephone directories (“telephone companies”), to transfer the telephone numbers to us or such other person or entity as we designate. You hereby grant to us an irrevocable power of attorney and appoint us as your attorney-in-fact to take any necessary actions to assign the telephone numbers, including but not limited to, executing any forms that the telephone companies may require to effectuate the assignment. This assignment is also for the benefit of the telephone companies, and the telephone companies may accept this assignment and our instructions as conclusive evidence of our rights in the telephone numbers and our authority to direct the amendment, termination or transfer of the telephone numbers, as if they had originally been issued to us. In addition, Franchisee agrees to hold the telephone companies harmless from any and all claims against them arising out of any actions or instructions by Pla-Fit Franchise, LLC regarding the telephone numbers. FRANCHISEE: PLA-FIT FRANCHISE, LLC: By Its Date___________________________ By Its Date___________________________ Notary for Franchisee’s Signature Subscribed and sworn to before me this ____ day of , ____ . Notary Public My commission expires: Appendix E-1 14877234.6 04/17/14 APPENDIX F LEASE PROVISIONS 1. Landlord shall deliver to Franchisor a copy of any notice of default or termination of the Lease at the same time such notice is delivered to Franchisee. 2. Franchisee hereby assigns to Franchisor, with Landlord’s irrevocable and unconditional consent, all of Franchisee’s rights, title and interest to and under the Lease upon any termination or non-renewal of the Franchise Agreement, but no such assignment shall be effective unless: (a) the Franchise Agreement is terminated or expires without renewal; and (b) Franchisor notifies the Franchisee and Landlord in writing that Franchisor assumes Franchisee’s obligations under the Lease. 3. Franchisor shall have the right, but not the obligation, upon giving written notice of its election to Franchisee and Landlord, to cure any breach of the Lease and, if so stated in the notice, to also succeed to Franchisee’s rights, title and interests thereunder. 4. The Lease may not be modified, amended, renewed, extended or assigned by Franchisee without Franchisor’s prior written consent. 5. Franchisee and Landlord acknowledge and agree that Franchisor shall have no liability or obligation whatsoever under the Lease unless and until Franchisor assumes the Lease in writing pursuant to Article 2 or 3 above. 6. If Franchisor assumes the lease as provided for in Articles 2 or 3 above, Landlord and Franchisee agree that (i) Franchisee will remain liable for the responsibilities and obligations, including amounts owed to Landlord, prior to the date of assignment and assumption, and (ii) Franchisor will have the right to sublease the Premises to another franchisee, provided the franchisee agrees to operate the Location as a PLANET FITNESS business pursuant to a Franchise Agreement with Franchisor. Franchisor will be responsible for the lease obligations incurred after the effective date of the assignment. 7. Landlord and Franchisee hereby acknowledge that Franchisee has agreed under the Franchise Agreement that Franchisor and its employees or agents shall have the right to enter the Location for certain purposes. Landlord hereby agrees not to interfere with or prevent such entry by Franchisor, its employees or agents. Landlord and Franchisee hereby further acknowledge that in the event the Franchise Agreement expires (without renewal) or is terminated, Franchisee is obligated to take certain steps under the Franchise Agreement to de-identify the location as a PLANET FITNESS business. Landlord agrees to permit Franchisor, Appendix F-1 14877234.6 04/17/14 its employees or agents, to enter the Location and remove signs, decor and materials displaying any marks, designs or logos owned by Franchisor, provided Franchisor shall bear the expense of repairing any damage to the Location as a result thereof. 8. Landlord agrees to allow Franchisee to remodel, equip, paint and decorate the interior and exterior of the Location pursuant to the terms of the Franchise Agreement and any successor Franchise Agreement under which Franchisee may operate the Business at the Location. 9. Landlord agrees to allow Franchisee to use ultraviolet tanning devices, massage chairs and similar devices, operate twenty four (24) hours per day and seven (7) days per week, serve food and beverages to its members, and use automatic teller machines (ATM). 10. Copies of any and all notices required or permitted hereby or by the Lease shall also be sent to Franchisor at 26 Fox Run Road, Newington, New Hampshire 03801, Attn: Chief Legal Officer, or such other address as Franchisor shall specify by written notice to Landlord. 11. Under the Franchise Agreement, any lease for the location of a PLANET FITNESS business is subject to Franchisor’s approval. Accordingly, the Lease is contingent upon such approval. 12. Franchisor is a third party beneficiary under this Addendum. 13. References to the Lease and the Franchise Agreement include all amendments, addenda, extensions and renewals to such documents. 14. References to the Landlord, Franchisee and Franchisor include the successors and assigns of each of the parties. Appendix F-2 14877234.6 04/17/14 APPENDIX G LOCATION The approved location is: . If no location is approved at the time this Agreement is signed, this Appendix G will be updated when a location has been designated by you and approved by us. The location must be designated and your lease signed within 6 months of the Effective Date of this Agreement. FRANCHISEE: PLA-FIT FRANCHISE, LLC: By Its By Its Appendix G-1 14877234.6 04/17/14 ACKNOWLEDGMENT ADDENDUM TO THE PLANET FITNESS® FRANCHISE AGREEMENT As you know, you and we are entering into a Franchise Agreement for the operation of a PLANET FITNESS® franchise. The purpose of this Acknowledgment Addendum is to determine whether any statements or promises were made to you that we have not authorized or that may be untrue, inaccurate or misleading, and to be certain that you understand the limitations on claims that may be made by you by reason of the offer and sale of the franchise and operation of your business. Please review each of the following questions carefully and provide honest responses to each question. Acknowledgments and Representations*. 1. 2. 3. 4. 5. 6. 7. 8. Did you receive a copy of our Disclosure Document (and all exhibits and attachments) at least (a) 14 calendar days prior to signing the Franchise Agreement, or (b) if you are a resident of Iowa, New York, Oklahoma or Rhode Island, at the earlier or the first personal meeting or 10 business days before the execution of the franchise or other agreement or payment of any consideration, or (c) if you are a resident of Michigan, Oregon, or Wisconsin, at the earlier of 10 business days before the execution of any binding agreement or payment of any consideration? Check one:  Yes.  No. Have you studied and reviewed carefully our Disclosure Document and Franchise Agreement? Check one:  Yes.  No. Is the name, address and phone number of any broker and each of our employees or representatives who was involved in offering you this franchise listed on the Disclosure Document receipt you signed (or on any updated receipt we provided to you)? Check one:  Yes.  No. Do you understand that the Franchise Agreement contains the entire agreement between you and us concerning the franchise, meaning that any prior oral or written statements not included in the Franchise Agreement or our Disclosure Document will not be binding? Check one:  Yes.  No. Do you understand that the success or failure of your business will depend in large part on your skills and experience, your business acumen, your location, the local market for products, interest rates, the economy, inflation, the number of employees you hire and their compensation, competition and other economic and business factors? Check one:  Yes.  No. Do you understand that that, unless there exists a currently effective Area Development Agreement between you and us, the franchise granted is for the right to operate a single PLANET FITNESS® fitness facility at the authorized location only and includes no exclusive area or protected territory, and that we and our affiliates have the right to issue franchises or operate competing businesses for or at locations, as we determine, near your authorized location? Check one:  Yes.  No. Do you understand that you are bound by the non-compete covenants (both in-term and postterm) listed in Article 16.4 and that an injunction is an appropriate remedy to protect the interests of the PLANET FITNESS® system if you violate the covenant(s)? Further, do you understand that the term “you” for purposes of the non-compete covenants in defined broadly in Article 16.4, such that any actions in violation of the covenants by those holding any interest in the franchisee entity may result in an injunction, default and termination of the Franchise Agreement? Do you understand that the current economic crisis and financial situation could have a negative impact on the fitness industry, the PLANET FITNESS® franchise system and your business? Do you also understand that the economic situation may worsen? Check one:  Yes.  No. Ack. Addendum - 1 14877234.6 04/17/14 If you answered “No” to questions 1-8, please explain (attached additional sheets if necessary): 9. 10. 11. 12. Was any oral, written or visual claim or representation made to you which contradicted the disclosures in the Disclosure Document? Check one:  Yes.  No. Except as stated in Item 19 of our Disclosure Document, was any oral, written or visual claim or representation made to you which stated, suggested, predicated or projected your sales, income or profit levels? Check one:  Yes.  No. Except as stated in Item 19 of our Disclosure Document, did any employee or other person speaking on our behalf make any statement or promise regarding the costs involved in operating a franchise that is not contained in the Disclosure Document or that is contrary to or different from the information in the Disclosure Document? Check one:  Yes.  No. You further acknowledge that we have advised you to seek franchise counsel to review and evaluate this Agreement.  Yes.  No. If you answered “Yes” to questions 9-11, please explain in detail the claim, representation or statement (attached additional sheets if necessary): YOU UNDERSTAND THAT YOUR ANSWERS ARE IMPORTANT TO US AND THAT WE WILL RELY ON THEM. BY SIGNING THIS ADDENDUM, YOU ARE REPRESENTING THAT YOU HAVE CONSIDERED EACH QUESTION CAREFULLY AND RESPONDED TRUTHFULLY TO THE ABOVE QUESTIONS. IF MORE SPACE IS NEEDED FOR ANY ANSWER, CONTINUE ON A SEPARATE SHEET AND ATTACH. NOTE: IF THE RECIPIENT IS A CORPORATION, PARTNERSHIP, LIMITED LIABILITY COMPANY OR OTHER ENTITY, EACH OF ITS OWNERS MUST EXECUTE THIS ACKNOWLEDGMENT. Signed: Signed:________________________________ Print Name: Print Name:____________________________ Date: Date:__________________________________ APPROVED ON BEHALF OF PLA-FIT FRANCHISE, LLC Signed: Signed:________________________________ Print Name: Title:__________________________________ Ack. Addendum - 2 14877234.6 04/17/14 Date: Date:__________________________________ *Such representations are not intended to nor shall they act as a release, estoppel or waiver of any liability incurred under the Illinois Franchise Disclosure Act or under the Maryland Franchise Registration and Disclosure Law, to the extent applicable. In addition, except to the extent we have negotiated changes to the Franchise Agreement and/or Area Development Agreement that differ from the FDD, nothing in this Acknowledgement Addendum or in any related agreement is intended to disclaim representations made in Pla-Fit Franchise, LLC’s current FDD that was provided to you. Ack. Addendum - 3 14877234.6 04/17/14 PLANET FITNESS® EXHIBIT “D” TO THE DISCLOSURE DOCUMENT AREA DEVELOPMENT AGREEMENT FDD – 2014 14877235.8 04/17/14 D-1 PLANET FITNESS® PLANET FITNESS® AREA DEVELOPMENT AGREEMENT 14877232.4 4/17/14 Table of Contents Page 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. Development Area ...............................................................................................................1 Grant of Development Rights ..............................................................................................1 Term.....................................................................................................................................2 Initial Services and Ongoing Obligations ............................................................................2 Our Reservation of Rights ...................................................................................................2 Area Development Fee ........................................................................................................3 Execution of Franchise Agreements ....................................................................................3 Ownership in Area Developer and Franchisees; Personal Guaranty ...................................3 Default and Termination ......................................................................................................4 Franchise Agreements May Not be Affected.......................................................................5 Future Development.............................................................................................................5 Compliance with Applicable Laws ......................................................................................5 Your Non-Competition Obligations ....................................................................................5 No Rights to Area Upon Termination..................................................................................6 Assignment by Us ................................................................................................................6 Assignment by You..............................................................................................................6 Severability ..........................................................................................................................7 Waivers ................................................................................................................................7 Dispute Resolution...............................................................................................................7 Governing Law ..................................................................................................................10 Consent to Jurisdiction.......................................................................................................10 Notices ...............................................................................................................................10 Waiver of Punitive Damages, Jury Trial and Class Actions..............................................10 Multiple Copies..................................................................................................................10 Entire Agreement ...............................................................................................................11 Modification.......................................................................................................................11 Other Franchisees/Area Developers ..................................................................................11 Binding Effect....................................................................................................................11 EXHIBIT A – MAP OF DEVELOPMENT AREA EXHIBIT B – OWNERS’ PERSONAL GUARANTY OF AREA DEVELOPER’S OBLIGATIONS EXHIBIT C – OWNERS 14877232.4 4/17/14 i PLANET FITNESS® AREA DEVELOPMENT AGREEMENT Franchisor: Pla-Fit Franchise, LLC (referred to in this Area Development Agreement as “we,” “us” or “our”), a New Hampshire limited liability company located at 26 Fox Run Road, Newington, NH 03801. Area Developer: _________________________________________________________________ (referred to in this Area Development Agreement as “you” or “your”) A ________________________ corporation/limited liability company/partnership/proprietorship with a principal place of business located at _________________________ . and You have provided us with any and all financial information about your shareholders, partners, officers, directors, guarantors and other persons as we have requested; and You desire to develop, own and operate, through yourself or an affiliate in which your Control Group (as defined in Article 8 below) owns 51% or more interest, PLANET FITNESS fitness facilities (each, a “Business”) in the “Area” defined below. NOW THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby mutually agree as follows: 1. Development Area. The development area (the “Development Area”) is the geographical area described as follows and shown on the map attached hereto as Exhibit A: Political boundaries described above shall be considered fixed as of the date of this Agreement and shall not change for the purpose hereof, notwithstanding a political reorganization or change to such boundaries or regions. All street boundaries shall be deemed to end at the street center line unless otherwise specified above. In case of inconsistency between the written description above and Exhibit A, the written description of the Development Area controls. 2. Grant of Development Rights. We grant you, subject to the terms and conditions of this Agreement, the right and license to establish and operate for your own account or for an affiliated entity under the ownership and control of your Control Group (as provided in Article 8 below), a specified number of Businesses in compliance with our standards. This personal license granted to you is limited to the right to operate the Businesses at locations only within the Development Area and may not be used FDD – 2014 14877232.4 4/17/14 ADA-1 PLANET FITNESS® elsewhere or in any other manner. You have no right to sublicense any of the rights granted to you herein. During the term of this Agreement and provided that you are in compliance with the Development Schedule set forth below, we will not operate, or license or franchise third parties to operate a PLANET FITNESS Business physically located within the Development Area. You must have open and in continuous operation in the Development Area, pursuant to Franchise Agreements, that cumulative number of PLANET FITNESS Businesses set forth below as of each of the following dates (“Development Schedule”): Cumulative Number of PLANET FITNESS businesses Date Facility to be Opened You represent that you conducted your own independent investigation and analysis of the prospects for the establishment of PLANET FITNESS gyms within the area, approve the Development Schedule as being reasonable and viable, and recognize that failure to achieve the results described in the Development Schedule will constitute material breach of this Agreement. 3. Term. Unless sooner terminated in accordance with Article 9, the term of this Agreement and all rights granted hereunder will expire on the earlier of: (a) the last date specified in the Development Schedule above; or (b) the date when you have open and in operation all of the PLANET FITNESS Businesses required by the Development Schedule. 4. Initial Services and Ongoing Obligations. You acknowledge and agree that our initial service under the Area Development Agreement is solely to identify the Development Area and that we have no ongoing obligations such as training or operational assistance to you under this Agreement. All ongoing and further obligations to you in opening your locations shall be provided pursuant to the Franchise Agreement between you and us. 5. Our Reservation of Rights. Although we, our parent company and our affiliates will not develop, operate, or franchise a PLANET FITNESS Business physically located within the Development Area while this Agreement is in effect, we, our parent and our affiliates (and our and their respective successors and assigns, by purchase, merger, consolidation or otherwise) retain all rights with respect to the Trademarks, the System and PLANET FITNESS businesses anywhere in the world, and the right to engage in any business whatsoever, including the right to: 5.1 operate, and grant to others the right to operate, PLANET FITNESS businesses at such locations and on such terms as we deem appropriate outside of the Development Area; 5.2 offer to sell, sell and distribute, inside and outside the Development Area, any products or services associated with the PLANET FITNESS system (now or in the future) or identified by the PLANET FITNESS Trademarks, or any other trademarks, service marks or trade names, through any distribution channels or methods, without compensation to any franchisees or area developers. These distribution channels or methods include, without limitation, retail stores, wholesale and the Internet (or any other existing or future form of electronic commerce); FDD – 2014 14877232.4 4/17/14 ADA-2 PLANET FITNESS® 5.3 operate, and grant to others the right to operate, fitness facilities, gyms, and health related establishments identified by tradenames, trademarks, service marks or trade dress, other than the Trademarks, outside of the Development Area and pursuant to such terms and conditions as we deem appropriate, which may include locations in close proximity to your PLANET FITNESS location; 5.4 develop or become associated with other concepts (including dual branding or other franchise systems), whether or not using the PLANET FITNESS System, brand or Trademarks, and award franchises under these other concepts or locations anywhere, including into the Development Area; and 5.5 acquire, be acquired by, merge, affiliate with or engage in any transaction with other businesses (whether competitive or not), with units located anywhere or business conducted anywhere, including in the Development Area. These transactions may include arrangements involving competing businesses or outlets and dual branding or brand conversions. You must participate at your expense in any conversion as instructed by us. 6. Area Development Fee. For the rights we grant you under the terms of this Area Development Agreement, you agree to pay us an Area Development Fee of ________________________________ ($_______________) U.S. Dollars. Upon our receipt of the Area Development Fee, you will receive all of the rights to develop, and will be obligated to develop, the number of locations set forth in the Development Schedule. The Area Development Fee is fully earned on receipt and is not refundable for any reason. 7. Execution of Franchise Agreements. You (or an affiliate owned and controlled by your Control Group, as described in Article 8 below) must execute a separate Franchise Agreement in our then-current form (“Franchise Agreement”) for each Business to be established by you in the Development Area. If you fail to provide us with an executed then-current form of Franchise Agreement (as modified consistent with the preceding sentences) and pay the then-current initial franchise fee due thereunder at least 60 days prior to the date scheduled as the opening date for a particular location, your failure will be deemed a material breach of this Agreement and we will have the right to terminate this Agreement as provided herein. 8. Ownership; Control Group; Responsible Owner Personal Guaranty. Any person holding an ownership interest in you is an “Owner” for purposes of this Agreement. You acknowledge and agree that we have granted the rights in Article 1 above to you, (a) based on you, your Owner or the group of Owners described in Exhibit C hereof that has, directly or indirectly, 51% or more ownership interest in you and voting control over its ownership interests in you (“Control Group”) and (b) based on the same ownership and voting control of such Control Group, in the same percentage as hereunder, in each Franchisee that executes a Franchise Agreement hereunder. If you are a business corporation, partnership, limited liability company or other legal entity, the same Control Group must own a minimum of fifty-one percent (51%) in you and in any entity executing a Franchise Agreement as a Planet Fitness franchisee (“Franchisee”) pursuant hereto. All such ownership interests of Owners in the Control Group shall be in the same percentages in your entity under this Agreement and in any Franchisee entity executing a Franchise Agreement. Furthermore, you acknowledge and agree that we have the right to approve in advance the ownership structure of each Franchisee under a Franchise Agreement executed pursuant hereto prior to execution thereof. Each Owner that has five percent (5%) or greater interest in you, if you are a business corporation, partnership, limited liability company or other legal entity, must sign Exhibit B to this FDD – 2014 14877232.4 4/17/14 ADA-3 PLANET FITNESS® Agreement (Owners’ Personal Guaranty of Franchisee’s Obligations). However, if we are entering into this Agreement totally or partially based on the financial qualifications, experience, skills or managerial qualifications of any person or entity who directly or indirectly owns less than 5% interest in you, we have the right to designate that person as an Owner who must sign Exhibit B to this Agreement. In addition, if you are a partnership entity, then each person or entity who, now or hereafter is or becomes a general partner is deemed an Owner who must sign Exhibit B, regardless of the percentage ownership interest. You must designate one (1) individual, who shall be set forth in Exhibit C hereto, who has the authority to, and does in fact, actively direct your business affairs related to your obligations under this Agreement and has authority to sign on your behalf on all contracts and commercial documents (“Responsible Owner”). You (or your Responsible Owner) shall exert your best efforts to the development of your PLANET FITNESS Businesses; and absent our prior approval may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations hereunder. You (or your Responsible Owner) may request our approval of an operator that has completed our training program to our satisfaction (an “Approved Operator”) to whom you may delegate your obligations to develop and operate your PLANET FITNESS Businesses. Such a request must be made in writing, and you must cooperate with us to provide all information we reasonably request to approve or reject the proposed individual. Such approval shall be given in our sole discretion. If we approve an Approved Operator, you must revise Exhibit C to include that individual, and require the Approved Operator to sign a confidentiality and non-compete agreement with us which shall, at minimum, contain the non-competition restrictions in Articles 13.1 and 13.2 of this Agreement. We shall have no responsibility, liability or obligation to any party to any such arrangement, agreement or contract, or any amendments thereto, made under this Article on account of our approval thereof or otherwise, and you agree to indemnify and hold us harmless with respect thereto. You must notify us of any proposed change of the Responsible Owner or Approved Operator and receive our written approval prior to such change. If such change results from the death or incapacitation of the Responsible Owner, you must submit a new proposed Responsible Owner within thirty (30) days after such death or incapacitation. Neither you nor your Owners will, directly or indirectly, take any actions to avoid or restrict the authority requirement for the Responsible Owner. Your Responsible Owner, Approved Operator, and other Owners are identified in Exhibit C to this Agreement. You represent, warrant and agree that the attached Exhibit C is current, complete and accurate, and you agree that updated copies of Exhibit C will be furnished promptly to us, so that Exhibit C (as so revised and signed by you) is at all times current, complete and accurate. 9. Default and Termination. Where you fail to comply with the Development Schedule for any location at any time, or where you fail to comply with the other terms of this Area Development Agreement or any Franchise Agreement with us to which you or a related entity have an interest, this Area Development Agreement shall terminate, following our giving you thirty (30) day’s notice and opportunity to cure, without further recourse to you. Without waiving any rights afforded to us under this Agreement or any Franchise Agreement in which you (or your affiliates) own or hold any interest, we have the right, but no obligation, to refrain from exercising our termination right in favor of granting you a written extension on the Development Schedule. Such an extension may, in our business judgment, be conditioned on any or all of the following: (a) a reduction in the size of the Development Area; (b) a modified Development Schedule (in terms of timing and/or number of units to be opened); (c) your execution of our then-current form of general release; and/or (d) your execution of our then-current form of Area Development Agreement, which shall replace this Agreement and which may contain materially different terms and conditions. In addition, if we grant you a written extension, you must pay to us estimated daily Royalty and national advertising fund fees from the date you were scheduled to open, FDD – 2014 14877232.4 4/17/14 ADA-4 PLANET FITNESS® according to the Development Schedule. The estimated Royalty and national advertising fund fees will be based on the average daily EFT Dues Draft of all PLANET FITNESS franchised businesses in the system during the preceding fiscal year, up to a maximum of $375 per day. Nothing obligates us to grant you an initial or any subsequent extension on the Development Schedule. We reserve the right to terminate this Agreement at any time if you fail to comply with its terms, including at the end of any unfulfilled extension period. This Agreement shall automatically terminate at the earlier of (i) the termination of any Franchise Agreement signed for a location developed pursuant to this Agreement, (ii) as otherwise provided in this Agreement. 10. Franchise Agreements May Not be Affected. Upon termination of this Agreement, (i) you will continue to pay all required fees and operate the Businesses that you own in the Development Area pursuant to the terms of the applicable Franchise Agreement that we executed prior to the termination of this Agreement, and (ii) your and our rights and obligations with respect to your existing Businesses will be governed by the terms of the applicable Franchise Agreements unless there also exists a basis to terminate the applicable Franchise Agreement(s) for your Business(es). 11. Future Development. You recognize and acknowledge that this Agreement requires you to open PLANET FITNESS Businesses in the future pursuant to the Development Schedule. You further acknowledge that the estimated expenses and investment requirements set forth in Items 6 and 7 of our Franchise Disclosure Document are subject to increase over time, and that future Businesses likely will involve greater initial investment and operating capital requirements than those stated in the Franchise Disclosure Document provided to you prior to the execution of this Agreement. You must execute all the Franchise Agreements and open all the Businesses by the dates set forth on the Development Schedule, regardless of (i) the requirement of a greater investment, (ii) the financial condition or performance of your prior Businesses, or (iii) any other circumstances, financial or otherwise. The foregoing will not be interpreted as imposing any obligation upon us to execute the Franchise Agreements under this Area Development Agreement if you have not complied with each and every condition necessary to develop the Businesses, or if you do not meet our then-current requirements for franchisees at the time you are scheduled to execute a Franchise Agreement. 12. Compliance with Applicable Laws. You must, at your expense, comply with all federal, state, city, municipal and local laws, ordinances, rules and regulations in the Development Area pertaining to the operation of your PLANET FITNESS Businesses. You must, at your expense, be absolutely and exclusively responsible for determining all licenses and permits required by law for your Businesses, for qualifying for and obtaining all such licenses and permits, and maintaining all such licenses and permits in full force and effect. 13. Your Non-Competition Obligations. 13.1 During Term. You, your Approved Operator, any personal guarantors and each of your Owners will not, during the term of this Agreement, directly, indirectly or through, on behalf of, or in conjunction with any person or legal entity: 13.1.1 Divert or attempt to divert any present or prospective business or customer of any PLANET FITNESS business to any non-PLANET FITNESS competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; FDD – 2014 14877232.4 4/17/14 ADA-5 PLANET FITNESS® 13.1.2 Recruit, employ or seek to employ any person who is at that time, or has been within the past six (6) months, employed by us or one of our affiliates, or otherwise directly or indirectly induce such person to leave his or her employment; or 13.1.3 Own, maintain, operate, engage in, be employed by, act as a consultant for, perform services for, provide assistance to, or have any interest in (as owner or otherwise) any men’s, women’s, children’s, or co-ed fitness, exercise, athletic, or wellness facility of any kind, including, but not limited to, a health club, gym, physical fitness club, personal training studio, weight loss, weight training or resistance training studio, or aerobics center (“Competitive Business”). 13.2 After Term. You covenant that, except as otherwise approved in writing by us, you, your Approved Operator, and your Owners shall not, for a continuous, uninterrupted period of two (2) years commencing upon the date of (a) a transfer permitted under Article 16 of this Agreement, (b) expiration of this Agreement, (c) termination of this Agreement (regardless of the cause for termination), or (d) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to enforcement of this Article 13.2, either directly or indirectly, for yourself or your spouse, parent (including step parents), sibling (including half siblings), or child (including step children), whether natural or adopted., or through, on behalf of, or in conjunction with any person or legal entity, own, maintain, operate, engage in, be employed by, act as a consultant for, perform services for, provide assistance to, or have any interest in (as owner or otherwise) any Competitive Business that is, or is intended to be, located (a) within the Development Area, (b) fifteen (15) miles of any PLANET FITNESS Business developed hereunder, or (c) fifteen (15) miles of any PLANET FITNESS business in operation or under construction as of the date that you are required to comply with this Article 13.2. You agree and acknowledge that the two (2) year period of this restriction shall be tolled during any time period in which you are in violation of this restriction. 13.3 Exception. The restrictions in Articles 13.1.3 and 13.2 do not apply to: (a) interests in or operation of a PLANET FITNESS business under a written Franchise Agreement with us; or (b) the ownership of shares of a class of securities that are listed on a public stock exchange or traded on the over-the-counter market and that represent less than five percent (5%) of that class of securities. 13.4 Injunctive Relief. You agree that damages alone cannot adequately compensate us if there is a violation of these noncompetitive covenants and that injunctive relief is essential for our protection. You therefore agree that in case of any alleged breach or violation of this Article, we may seek injunctive relief without posting any bond or security, in addition to all other remedies that may be available to us at equity or law. 14. No Rights to Development Area Upon Termination. After the termination or expiration of this Agreement for any reason, any and all rights you had in and to the Development Area shall cease and we will have the absolute and unrestricted right to develop the Development Area or to contract with other franchisees for the future development of the Development Area. 15. Assignment by Us. We have the right to sell or assign, in whole or in part, our interests in this Agreement, and any such sale or assignment shall inure to the benefit of any assignee or other legal successor to our interest. 16. Assignment by You. You may only transfer your rights and interests under this Agreement if you obtain our prior written consent and transfer all of your rights and interests under all Franchise Agreements for the Business in the Development Area. Accordingly, the assignment terms and conditions in the Franchise Agreements apply to any transfer of your rights and interests under this Agreement or any FDD – 2014 14877232.4 4/17/14 ADA-6 PLANET FITNESS® ownership in you, except that you cannot assign your rights and interests in this Agreement for an amount of consideration greater than the Area Development Fee specified in Article 6 unless we otherwise agree and you comply with all supplemental assignment conditions we specify in our business judgment, including, without limitation, your payment of a supplemental transfer fee in the amount we specify. 17. Severability. To the extent that this Agreement is judicially determined to be unenforceable by virtue of its scope or in terms of area or length of time, but may be made enforceable by reductions of any or all thereof, the same shall be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction where enforcement is sought. 18. Waivers. Failure of either party to insist, in one or more instances, on performance by the other in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of any right granted hereunder or of the future performance of any such term or condition or of any other term or condition of this Agreement, unless such waiver is in a writing signed by or on behalf of both parties. 19. Dispute Resolution. 19.1 Mediation. Except as provided in Article 19.3, prior to filing any demand for arbitration, the parties agree to mediate any dispute, controversy or claim between and among the parties and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease or sublease for your Business, any loan or other finance arrangement between us or our affiliates and you, the parties’ relationship, your Business, or any System Standard in accordance with the following procedures: 19.1.1 The party seeking mediation must commence mediation by sending the other party, in accordance with Article 22, a written notice of its request for mediation headed “Notification of Dispute”. The Notification of Dispute will specify, to the fullest extent possible, the party’s version of the facts surrounding the dispute; the amount of damages and the nature of any injunctive or other relief such party claims. The party (or parties as the case may be) receiving a Notification of Dispute will respond within twenty (20) days after receipt thereof, in accordance with Article 22, stating its version of the facts and, if applicable, its position as to damages sought by the party initiating the dispute procedure; provided, however, that if the dispute has been the subject of a default notice given under Article 9 of this Agreement, the other party will respond within ten (10) business days. 19.1.2 Upon receipt of a Notification of Dispute and response under Article 19.1.1, the parties will endeavor, in good faith, to resolve the dispute outlined in the Notification of Dispute and response. If the parties have been unable to resolve a dispute outlined in a Notification of Dispute or a response thereto within twenty (20) days after receipt of the response, either party may initiate a mediation procedure with the American Arbitration Association (“AAA”), pursuant to its Commercial Mediation Procedures, and unless otherwise agreed by the parties will take place in the city of our thencurrent corporate headquarters. The parties must select a mediator jointly. 19.1.3 All mediation sessions will occur in New Hampshire at a mutually-agreeable location and must be attended by your Responsible Owner (and any other persons with authority to settle the dispute on your behalf) and our representative(s) who is/are authorized to settle the dispute. The parties may be represented by counsel at the mediation. The parties agree to participate in the mediation proceedings in good faith and with the intention of resolving the dispute if at all possible within 30 days of the notice from the party seeking to initiate the mediation procedures. If the dispute is not resolved within 30 days, any party may initiate an arbitration pursuant to Article 19.2. In addition, if the party receiving notice of mediation has not responded within 5 days of delivery of the notice or a party fails to FDD – 2014 14877232.4 4/17/14 ADA-7 PLANET FITNESS® participate in the mediation, this Article 19.1 will no longer be applicable and the other party can pursue arbitration. The parties agree that the costs of the mediator will be split equally between the parties. Each party must pay its owns fees and expenses incurred in connection with the mediation. The mediation proceeding and any negotiations and results thereof will be treated as a compromise settlement negotiation and the entire process is confidential. At least 5 days prior to the initial mediation session, each party must deliver a written statement of positions. 19.2 Arbitration. Except as provided in Article 19.3, any dispute, controversy or claim between you and us and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease or sublease for your Business, any loan or other finance arrangement between us or our affiliates and you, the parties’ relationship, your Business, or any System Standard or the scope of validity of the arbitration obligation under this Article not resolved by mediation must be submitted to binding arbitration in accordance with the Federal Arbitration Act. The arbitration will be administered by the AAA pursuant to its Commercial Arbitration Rules then in effect by one arbitrator. 19.2.1 In connection with any arbitration proceeding, each party will submit or file any claim which would constitute a compulsory counterclaim (as defined by the then-current Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any such claim which is not submitted or filed in such proceeding will be barred. 19.2.2 Any arbitration must be on an individual basis only as to a single development agreement (and not as or through an association) and the parties and the arbitrator will have no authority or power to proceed with any claim on a class-wide basis or otherwise to join or consolidate any claim with any claim or any other proceeding involving third parties. If a court or arbitrator determines that this limitation on joinder of or class-wide claims is unenforceable, then the agreement to arbitrate the dispute will be null and void and the parties must submit all claims to the jurisdiction of the courts, in accordance with Article 21. 19.2.3 The arbitration must take place in the city closest to where our headquarters is located at the time of the dispute. 19.2.4 The arbitrator must follow the law and not disregard the terms of this Agreement. The arbitrator must be a former federal or state court judge with at least 5 years of significant experience in commercial law. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or us. The arbitrator may not under any circumstance (a) stay the effectiveness of any termination of this Agreement, (b) assess punitive or exemplary damages, (c) certify a class or consolidated action, or (d) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set. The arbitrator will have the right to make a determination as to any procedural matters as would a court of competent jurisdiction be permitted to make in the state in which the corporate headquarters of Franchisor is then located. The arbitrator will also decide any factual, procedural, or legal questions relating in any way to the dispute between the parties, including, but not limited to: any decision as to whether Article 21 is applicable and enforceable as against the parties, subject matter, timeliness, scope, remedies, unconscionability, and any alleged fraud in the inducement. 19.2.5 The arbitrator can issue summary orders disposing of all or part of a claim and provide for temporary restraining orders, preliminary injunctions, injunctions, attachments, claim and delivery proceedings, temporary protective orders, receiverships, and other equitable and/or interim/final relief. Each party consents to the enforcement of such orders, injunctions, etc., by any court having jurisdiction. FDD – 2014 14877232.4 4/17/14 ADA-8 PLANET FITNESS® 19.2.6 The arbitrator will have subpoena powers limited only by the laws of the state in which our corporate headquarters is then located. 19.2.7 The parties to the dispute will have the same discovery rights as are available in civil actions under the laws of the state in which our corporate headquarters is then located. 19.2.8 All other procedural matters will be determined by applying the statutory, common laws, and rules of procedure that control a court of competent jurisdiction in which our corporate headquarters is then located. 19.2.9 Other than as may be required by law, the entire arbitration proceedings (including, but not limited to, any rulings, decisions or orders of the arbitrator), will remain confidential and will not be disclosed to anyone other than the parties to this Agreement. 19.2.10 The judgment of the arbitrator on any preliminary or final arbitration award will be final and binding and may be entered in any court having jurisdiction. 19.2.11 We reserve the right, but have no obligation, to advance your share of the costs of any arbitration proceeding in order for such arbitration proceeding to take place and by doing so will not be deemed to have waived or relinquished our right to seek recovery of those costs in accordance with Article 19.4. 19.3 Exceptions to Arbitration. Notwithstanding Articles 19.1 and 19.2, the parties agree that the following claims will not be subject to arbitration or mediation: 19.3.1 any action for equitable relief, including, without limitation, seeking preliminary or permanent injunctive relief, specific performance, declaratory relief, other relief in the nature of equity to enjoin any harm or threat of harm to such party’s tangible or intangible property, brought at any time, including without limitation, prior to or during the pendency of any arbitration proceedings initiated hereunder; 19.3.2 any action in ejectment or for possession of any interest in real or personal property; or 19.3.3 any action which by applicable law cannot be arbitrated; and 19.3.4 our decision in the first instance to issue a notice of default and/or notice of termination, or undertake any other conduct with respect to the franchise relationship that might later result in a dispute or controversy between us. 19.4 Costs and Attorneys’ Fees. The prevailing party in any action or proceeding arising under, out of, in connection with, or in relation to this Agreement will be entitled to recover its reasonable costs and expenses (including attorneys’ fees, arbitrator’s fees and expert witness fees, costs of investigation and proof of facts, court costs, and other arbitration or litigation expenses) incurred in connection with the claims on which it prevailed. 19.5 Survival. The provisions of this Article 19 are intended to benefit and bind certain third party non-signatories and will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. FDD – 2014 14877232.4 4/17/14 ADA-9 PLANET FITNESS® 19.6 Tolling of Statute of Limitations. All applicable statutes of limitation and defenses based on the passage of time are tolled while the dispute resolution procedures in this Article 19 are pending. The parties will take such action, if any, required to effectuate such tolling. 19.7 Performance to Continue. Each party must continue to perform its obligations under this Agreement pending final resolution of any dispute pursuant to this Article 19, unless to do so would be impossible or impracticable under the circumstances. 20. Governing Law. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et. seq.). Except to the extent governed by the Federal Arbitration Act as required hereby, the UNITED STATES TRADEMARK ACT OF 1946 (LANHAM ACT, 15 U.S.C. §§ 1051 et seq.) or other federal law, this Agreement, the franchise and all claims arising from the relationship between us and you will be governed by the laws of New Hampshire, without regard to its conflict of laws principles, except that any law regulating the sale of franchises or governing the relationship of a franchisor and its franchisee will not apply unless jurisdictional requirements are met independently without reference to this Article. 21. Consent to Jurisdiction. Subject to Article 19 hereof, you and your Owners agree that we may institute any action against you or your Owners in any state or federal court of general jurisdiction in New Hampshire and you (and each Owner) irrevocably submit to the jurisdiction of such courts and waive any objection you (or he or she) may have to either the jurisdiction of or venue in such courts. 22. Notices. All written notices and reports permitted or required to be delivered by the provisions of this Agreement will be deemed so delivered: 22.1 at the time delivered by hand; 22.2 one (1) business day after transmission by telecopy, facsimile or other electronic system, provided there is evidence of delivery; 22.3 one (1) business day after being placed in the hands of a commercial courier service for next business day delivery, provided there is evidence of delivery; or five (5) business days after placement in the United States Mail by Registered or Certified Mail, Return Receipt Requested, postage prepaid; and must be addressed to the party to be notified at its most current principal business address of which the notifying party has been notified. Any required payment or report which we do not actually receive during regular business hours on the date due (or postmarked by postal authorities at least two (2) days prior thereto) will be deemed delinquent. 23. Waiver of Punitive Damages, Jury Trial and Class Actions. Except with respect to any obligation to indemnify us and claims we bring against you for your unauthorized use of the Marks or unauthorized use or disclosure of any confidential information, we and you and your respective Owners waive to the fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the other and agree that, in the event of a dispute between us, the party making a claim will be limited to equitable relief and to recovery of any actual damages it sustains. We and you irrevocably waive, to the fullest extent permitted by law, trial by jury in any action, proceeding or counterclaim, whether at law or in equity, brought by either of us. Each party acknowledges that it has had a full opportunity to consult with counsel concerning this waiver, and that this waiver is informed, voluntary, intentional, and not the result of unequal bargaining power. 24. Multiple Copies. This Agreement may be executed in multiple copies, each of which will be deemed an original, and all of which when taken together shall constitute one and the same document. FDD – 2014 14877232.4 4/17/14 ADA-10 PLANET FITNESS® 25. Entire Agreement. This Agreement together with any exhibits, addenda and appendices hereto constitute the sole agreement between you and us with respect to the entire subject matter of this Area Development Agreement and embodies all prior agreements and negotiations with respect to your Businesses authorized hereunder. There are no representations or warranties of any kind, express or implied, except as contained herein or in the Franchise Disclosure Document provided to you in connection with this Agreement. 26. Modification. This Agreement shall not be modified or amended except by an instrument in writing signed by or on behalf of the parties hereto. 27. Other Franchisees/Area Developers. You acknowledge that other PLANET FITNESS franchisees/area developers have or will be granted franchises or area development rights at different times and in different situations, and further acknowledge that the provisions of such agreements may vary substantially from those contained in this Agreement. 28. Binding Effect. Except as otherwise provided herein to the contrary, this Agreement shall be binding upon, and shall inure to the benefit of, you and us, and our respective heirs, executors, legal representatives, successors and assigns. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the Effective Date. Franchisor: PLA-FIT FRANCHISE, LLC By:_______________________________________ Name Printed: ______________________________ Title: _____________________________________ EFFECTIVE DATE: _______________________ EACH OF THE UNDERSIGNED PARTIES WARRANTS AND REPRESENTS THAT HE/SHE HAS NOT RELIED UPON ANY GUARANTEES CONCERNING REVENUE, PROFIT OR THE SUCCESS OF THIS FRANCHISE IN SO SIGNING. Franchisee: [FRANCHISEE ENTITY] By:_______________________________________ Name Printed: ______________________________ Title: _____________________________________ Date: _____________________________________ As Individuals: __________________________________________ Name Printed: ______________________________ Date: _____________________________________ FDD – 2014 14877232.4 4/17/14 ADA-11 PLANET FITNESS® __________________________________________ Name Printed: ______________________________ Date: _____________________________________ FDD – 2014 14877232.4 4/17/14 ADA-12 PLANET FITNESS® EXHIBIT A MAP OF DEVELOPMENT AREA (attached) FDD – 2014 14877232.4 4/17/14 ADA PLANET FITNESS® EXHIBIT B OWNERS’ PERSONAL GUARANTY OF AREA DEVELOPER’S OBLIGATIONS (attached) FDD – 2014 14877232.4 4/17/14 ADA PLANET FITNESS® OWNERS’ PERSONAL GUARANTY OF AREA DEVELOPER’S OBLIGATIONS (“Guaranty”) In consideration of, and as an inducement to, the execution of the Pla-Fit Franchise, LLC Area Development Agreement dated as of ______________________________________, (the “Agreement”) by and between the Pla-Fit Franchise, LLC (“Franchisor”), and ______________________ (“Area Developer”) each of the undersigned Owners of five percent (5%) or greater interest in Area Developer hereby personally and unconditionally: (1) guarantees to Franchisor and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement, that Area Developer shall punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement (and any amendments) and that each and every representation of Area Developer made in connection with the Agreement (and any amendments) are true, correct and complete in all respects at and as of the time given; and (2) agrees personally to be bound by, and personally liable for the breach of, each and every provision in the Agreement (and any amendments), including, without limitation, the confidentiality and non-competition provisions. Each of the undersigned waives: (a) acceptance and notice of acceptance by Franchisor of the foregoing undertakings; (b) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed; (c) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed; (d) any right he may have to require that an action be brought against Area Developer or any other person as a condition of liability; (e) notice of any amendment to the agreement; and (f) any and all other notices and legal or equitable defenses to which he may be entitled. Each of the undersigned consents and agrees that: (i) his direct and immediate liability under this guaranty shall be joint and several; (ii) he shall render any payment or performance required under the Agreement upon demand if Area Developer fails or refuses to do so punctually; (iii) such liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Area Developer or any other person; and (iv) such liability shall not be diminished, relieved or otherwise effected by any extension of time, credit or other indulgence which the Franchisor may from time to time grant to Area Developer or to any other person including, without limitation, the acceptance of any partial payment or performance or the compromise or release of any claims, none of which shall in any way modify or amend this guaranty, which shall be continuing and irrevocable until satisfied in full. It is further understood and agreed by the undersigned that the provisions, covenants and conditions of the Guaranty will inure to the benefit of our successors and assigns. This Guaranty shall be governed by the governing law provisions set forth in Article 20 of the Agreement and all disputes related to it shall be resolved in accordance with the dispute resolution provisions set forth in Articles 19, 21, and 23 of the Agreement. FDD – 2014 14877232.4 4/17/14 ADA PLANET FITNESS® IN WITNESS WHEREOF, each of the undersigned has hereunto affixed his signature, under seal, as of the Effective Date of the Agreement. PERCENTAGE OF OWNERSHIP INTERESTS IN AREA DEVELOPER OWNER(S) (Signature) (Print Name) (Signature) (Print Name) (Signature) (Print Name) DATE: ________________, ______________ Subscribed and sworn to before me this _______________ day of ____________, ________.. ___________________________________________ Notary Public My Commission expires: FDD – 2014 14877232.4 4/17/14 ADA PLANET FITNESS® EXHIBIT C OWNERSHIP ADDENDUM 1. RESPONSIBLE OWNER. The name, home address and social security number of the Responsible Owner is as follows: 2. APPROVED OPERATOR. The name, home address and social security number of the Approved Operator is as follows: 3. FORM OF ENTITY OF AREA DEVELOPER. (a) CORPORATION OR LIMITED LIABILITY COMPANY. Area Developer was organized on ____________________________, under the laws of the State of _____________________________________. Its Federal Identification Number is _____________________. It has not conducted business under any name other than its corporate or company name. Name of Each Director/Officer/Managing Member FDD – 2014 14877232.4 4/17/14 ADA Position(s) Held PLANET FITNESS® (b) PARTNERSHIP. Area Developer is a [general] [limited] partnership formed on ________________, _____________ under the laws of the State of _______________. Its Federal Identification Number is____________________. It has not conducted business under any name other than its partnership name. Name of Each General Partner 4. OWNERS. (a) Area Developer and each of its Owners represents and warrants that the following is a complete and accurate list of all owners of any interest whatsoever in Area Developer, including the full name, mailing address and social security number of each Owner, and fully describes the nature and extent of each Owner’s interest in Area Developer. Area Developer and each Owner, as to his ownership interest, represents and warrants that each Owner is the sole and exclusive legal and beneficial owner of his ownership interest in Area Developer, free and clear of all liens, restrictions, agreements and encumbrances of any kind or nature, other than those required or permitted by this Agreement. Owner’s Name, Address and Social Security Number FDD – 2014 14877232.4 4/17/14 Percentage and Nature of Ownership Interest ADA PLANET FITNESS® (b) Control Group. You represent and warrant that the following Owner or group of Owners has, directly or indirectly, 51% or more ownership interest in you and voting control over its ownership interests in you and constitutes your Control Group as described in Article 8 of the Area Development Agreement. Owner’s Name, Address and Social Security Number Percentage and Nature of Ownership Interest This Exhibit C is deemed accepted and made a part of the Area Development Agreement as of the Area Development Agreement’s Effective Date. PLA-FIT FRANCHISE, LLC A New Hampshire Limited Liability Company (Name of corporation, limited liability company or partnership) By: Print Name: Title: Date: By: Print Name: Title: Date: Owners: __________________________________ (Date) (Signature) (Print Name) __________________________________ (Date) (Signature) (Print Name) FDD – 2014 14877232.4 4/17/14 ADA PLANET FITNESS® __________________________________ (Date) (Signature) (Print Name) FDD – 2014 14877232.4 4/17/14 ADA PLANET FITNESS® PLANET FITNESS® EXHIBIT “E” TO THE DISCLOSURE DOCUMENT FINANCIAL STATEMENTS FDD – 2014 14877235.8 04/17/14 E-1 PLANET FITNESS® PLANET FITNESS HOLDINGS, LLC Consolidated Financial Statements As of December 31, 2013 and 2012 (Successor) and for the year ended December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor) (With Independent AuditorsD Report Thereon) PLANET FITNESS HOLDINGS, LLC Table of Contents Page(s) Independent AuditorsD Report 1@2 Consolidated Financial Statements: Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Cash Flows 6 Consolidated Statements of Changes in Equity 7 Notes to Consolidated Financial Statements Supplemental Consolidating Financial Information 8@34 35@40 KPMG LLP Two Financial Center 60 South Street Boston, MA 02111 Independent Auditors' Report The Board of Directors Planet Fitness Holdings, LLC: We have audited the accompanying consolidated financial statements of Planet Fitness Holdings, LLC and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2013 and 2012 (Successor), and the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for the year ended December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor), and the related notes to the consolidated financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditorsD judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entityDs preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entityDs internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly in all material respects, the financial position of Planet Fitness Holdings, LLC and its subsidiaries as of December 31, 2013 and 2012 (Successor), and the results of their operations and cash flows for the year ended KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity. December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor), in accordance with U.S. generally accepted accounting principles. Other Matter Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplemental consolidating financial information is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole. Boston, Massachusetts March 10, 2014 2 PLANET FITNESS HOLDINGS, LLC Consolidated Balance Sheets December 31, 2013 and 2012 (Amounts in thousands) Assets 2013 2012 (Successor) Current assets: Cash and cash equivalents Accounts receivable, net of allowance for bad debts of $352 and $296 at December 31, 2013 and 2012, respectively Due from related parties, current Inventory Notes receivable, current Restricted assets – NAF (note 6) Other current assets $ 31,267 9,455 15,783 1,332 2,243 513 1,351 5,058 12,739 10 493 2,387 1,863 3,920 57,547 30,867 33,766 303,328 157,210 3,672 6,573 32,747 326,211 157,210 4,402 8,213 $ 562,096 559,650 $ — 9,500 30,379 1,162 2,647 1,351 11,444 264 3,525 9,606 16,923 3,291 4,450 1,863 9,514 248 56,747 49,420 Long-term debt, net of current maturities Obligations under capital leases, net of current portion Deferred rent, net of current portion Deferred revenue, net of current portion Deferred tax liabilities – non current Other liabilities 173,375 423 1,376 7,193 593 474 183,813 1,584 205 5,724 2,193 72 Total noncurrent liabilities 183,434 193,591 315,715 6,200 313,242 3,397 321,915 316,639 562,096 559,650 Total current assets Property and equipment, net Intangible assets, net Goodwill Notes receivable, net of current portion Other assets, net Total assets Liabilities and Equity Current liabilities: Line of credit Current maturities of long-term debt Accounts payable and accrued expenses Current maturities of obligations under capital leases Equipment deposits Restricted liabilities – NAF (note 6) Deferred revenue, current Other current liabilities Total current liabilities Commitments and contingencies (note 17) Equity: Members’ equity Noncontrolling interests in variable interest entities Total equity Total liabilities and equity $ See accompanying notes to consolidated financial statements. 3 PLANET FITNESS HOLDINGS, LLC Consolidated Statements of Operations (Amounts in thousands) Period from November 8, Year ended 2012 through December 31, December 31, 2013 2012 (Successor) Net revenues: Membership fees Equipment and assembly Franchise revenue $ Period from January 1, 2012 through Year ended November 7, December 31, 2012 2011 (Predecessor) 67,364 105,803 37,842 8,822 28,020 4,945 40,360 52,691 24,849 39,395 75,221 21,820 211,009 41,787 117,900 136,436 81,353 41,692 28,808 23,118 21,480 5,950 6,959 2,633 41,064 28,381 5,676 19,475 58,032 27,790 4,205 15,005 — — (1,921) (234) 174,971 37,022 92,675 104,798 36,038 4,765 25,225 31,638 496 (9,408) (694) 100 (2,530) (125) 897 (2,249) 29 611 (2,502) 288 Total other expense, net (9,606) (2,555) (1,323) (1,603) Income before taxes 26,432 2,210 23,902 30,035 633 56 656 747 25,799 2,154 23,246 29,288 361 32 1,015 2,350 25,438 2,122 22,231 26,938 Total net revenues Operating costs and expenses: Cost of revenue Club operations Depreciation and amortization Selling, general and administrative Gain on sale of subsidiaries and variable interest entities (notes 4 and 5) Total operating costs and expenses Income from operations Other income (expense), net: Interest income Interest expense Other income (expense) Provision for state income taxes Net income Less net income attributable to noncontrolling interests (note 4) Net income attributable to members of Planet Fitness Holdings, LLC $ 4 PLANET FITNESS HOLDINGS, LLC Consolidated Statements of Comprehensive Income (Amounts in thousands) Period from November 8, Year ended 2012 through December 31, December 31, 2013 2012 (Successor) Net income including noncontrolling interests Other comprehensive income, net: Unrealized gains on interest rate swaps $ Total comprehensive income including noncontrolling interests Total comprehensive income attributable to noncontrolling interests Total comprehensive income attributable to members of Planet Fitness Holdings, LLC $ See accompanying notes to consolidated financial statements. 5 Period from January 1, 2012 through Year ended November 7, December 31, 2012 2011 (Predecessor) 25,799 2,154 23,246 29,288 92 — — — 25,891 2,154 23,246 29,288 361 32 1,015 2,350 25,530 2,122 22,231 26,938 PLANET FITNESS HOLDINGS, LLC Consolidated Statements of Cash Flows (Amounts in thousands) Period from November 8, Year ended 2012 through December 31, December 31, 2013 2012 (Successor) Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Amortization of deferred financing costs Amortization of favorable leases Deferred tax provision (benefit) Provision for bad debts Loss on disposal of property and equipment Loss on uncollectable notes receivable Gain on sale of subsidiaries and variable interest entities Changes in operating assets and liabilities, excluding effects of acquisitions and dispositions: State income taxes Accounts receivable Notes receivable and due from related parties Inventory Other assets and other current assets Accounts payable and accrued expenses Other liabilities and other current liabilities Equipment deposits Deferred revenue Deferred rent $ Net cash provided by operating activities Cash flows from investing activities: Acquisition of the Company, net of cash acquired Additions to property and equipment Acquisition of franchises Cash outflow from sale of PF-CT Proceeds from sale of property and equipment Acquisition of intangibles Net cash used in investing activities Cash flows from financing activities: Successor capital contribution, net of cash acquired Proceeds from issuance of long-term debt Principal payments on capital lease obligations Repayment of long-term debt Payment of deferred financing and other debt-related costs Net (repayments) borrowings on line of credit Re-payment of interim financing Acquisition of PFPA noncontrolling interest Contributions from members Contributions from variable interest entities Distributions to variable interest entities Distributions to members Net cash (used in) provided by financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Period from January 1, 2012 through Year ended November 7, December 31, 2012 2011 (Predecessor) 25,799 2,154 23,246 29,288 28,808 1,582 246 (1,430) 57 (52) — — 6,959 75 34 (101) 24 (22) — — 5,676 283 — (25) 129 (20) — (1,921) 4,205 352 — 96 394 142 216 (234) (364) (3,101) 1,281 (1,750) (776) 13,456 421 (1,803) 3,398 1,171 — (5,399) 5,025 (493) 1,093 3,142 182 (1,885) 1,488 205 — 4,458 (1,129) 188 (4,599) (713) 104 3,350 880 670 313 (3,905) (3,511) 206 (531) 7,079 434 1,966 940 504 66,943 12,481 30,577 37,954 — (7,287) — — 150 — (215,336) (856) — — 36 — — (4,308) (12,140) — 39 (335) — (6,530) — (169) — — (7,137) (216,156) (16,744) (6,699) — — (3,291) (10,544) (19) (3,525) — — — 3,402 (960) (23,057) 215,336 190,000 (490) (40,052) (7,161) 3,525 (165,000) — — 22 — (3,739) — 8,500 (2,354) (1,203) (360) 14,500 — (4,895) 4,792 — (1,651) (23,127) — 200 (3,364) (2,305) — — — — — 25 (1,414) (27,105) (37,994) 192,441 (5,798) (33,963) 21,812 (11,234) 8,035 (2,708) 9,455 20,689 12,986 15,694 Cash and cash equivalents, end of period $ 31,267 9,455 21,021 12,986 Supplemental cash flow information: Net cash paid for income taxes Cash paid for interest $ 1,826 7,638 285 2,021 1,194 2,056 712 2,460 Noncash investing activities: Rollover equity investment by MMC Interim financing in connection with the Acquisition $ — — 78,750 165,000 — — — — $ — — — — — — 44,143 (5,396) (38,747) — — — $ — — — — — — (1,531) 483 1,500 — — — NY/NJ acquisition and consolidation of MMC Melville: Fair value of assets contributed Liabilities assumed Equity contribution of net assets Sale of subsidiary: Assets sold in sale Liabilities forgiven Issuance of note receivable See accompanying notes to consolidated financial statements. 6 PLANET FITNESS HOLDINGS, LLC Consolidated Statements of Changes in Equity (Amounts in thousands) Members’ equity (deficit) Predecessor Noncontrolling interests in variable interest entities Total equity Balance at December 31, 2010 Net income Contributions Distributions $ (6,308) 26,938 — (27,105) 7,275 2,350 25 (1,414) 967 29,288 25 (28,519) Balance at December 31, 2011 $ (6,475) 8,236 1,761 22,231 4,792 38,747 (5,287) (118) (23,127) 1,015 — 275 392 118 (1,651) 23,246 4,792 39,022 (4,895) — (24,778) $ 30,763 8,385 39,148 $ 314,250 2,122 609 — (3,739) — 32 3,343 22 — 314,250 2,154 3,952 22 (3,739) Balance at December 31, 2012 313,242 3,397 316,639 Net income Other comprehensive income Contributions Distributions 25,438 92 — (23,057) 361 — 3,402 (960) 25,799 92 3,402 (24,017) 315,715 6,200 321,915 Net income Contributions NY/NJ Transaction Acquisition of PFPA Acquisition of Colorado Distributions Balance at November 7, 2012 Successor Successor capital contribution Net income Noncontrolling interests and eliminations Contributions Distributions Balance at December 31, 2013 $ See accompanying notes to consolidated financial statements. 7 PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (1) Business Organization Planet Fitness Holdings, LLC (Holdings) is a New Hampshire limited liability company that was established on March 1, 2008 to serve as the reporting entity for three distinct lines of businesses serving its customers through the following wholly owned subsidiaries: # The PLA-FIT Franchise Group (Franchise Group) consists of PLA-FIT Franchise, LLC (PLA-FIT Franchise) and Planet Fitness Intellectual Property, LLC (PFIP). The Franchise Group was established to license and sell franchises under the Planet Fitness trade name. # Pla-Fit Health, LLC and its subsidiaries (Pla-Fit Health) are principally organized to own and operate health clubs under the Planet Fitness trade name. # Planet Fitness Equipment, LLC (Planet Fitness Equipment) sells and assembles fitness-related equipment to franchisees and clubs owned by Pla-Fit Health. The Planet Fitness brand was established in 1992 as a health and fitness club chain. Planet Fitness owned and franchised health clubs now operate across the United States of America and Puerto Rico as a value health club chain, offering various low cost memberships and benefits to attract members. Prior to November 7, 2012, Holdings was wholly owned by three individuals (Michael Grondahl, Marc Grondahl, and Christopher Rondeau, collectively known as MMC). On November 7, 2012, MMC contributed their ownership interests in Holdings to a newly formed entity, Pla-Fit Holdings LLC (Topco) and on November 8, 2012 Topco was acquired as part of a transaction between MMC and TSG PF Investment LLC (TSG), for consideration totaling $479,250 (the Acquisition) (see note 3). The Acquisition was accounted for using the purchase method of accounting which resulted in a new basis for the assets acquired and liabilities assumed. Accordingly, although the Company continues with the same core operations after the Acquisition, the accompanying consolidated financial statements reflect the CompanyDs historical accounting basis for the periods prior to the Acquisition (the Predecessor) and the new accounting basis for the period following the Acquisition (the Successor). Certain amounts as of and for the period ending December 31, 2012 have been revised to reflect the finalization of purchase accounting related to the Acquisition during 2013. See note 3 for further information. (2) Summary of Significant Accounting Policies (a) Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of Holdings and subsidiaries (the Company) and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). All significant intercompany balances and transactions have been eliminated in consolidation. The Company also consolidates entities in which it has a controlling financial interest, the usual condition of which is ownership of a majority voting interest. The Company also considers for consolidation certain interests where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity 8 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (VIE), is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE is considered to possess the power to direct the activities of the VIE that most significantly impacts its economic performance and has the obligation to absorb losses or the rights to receive benefits from the VIE that are significant to it. The principal entities in which the Company possesses a variable interest include franchise entities and certain other entities. The Company is not deemed to be the primary beneficiary for Planet Fitness franchise entities. Therefore, these entities are not consolidated. During 2012, certain changes occurred, including the Acquisition, which impacted the consolidation status of certain VIEs. As such, the results of the Successor have been consolidated with Matthew Michael Realty LLC (MMR) and PF Melville LLC (PF Melville) based on the determination that the Company is the primary beneficiary with respect to these VIEs. These entities are real estate holding companies that derive a majority of their financial support from the Company. The results of the Predecessor for all or a portion of the periods presented have been consolidated with the following VIEs in which Holdings or one of its subsidiaries has been determined to be the primary beneficiary (see note 4): # 304 Maplewood, LLC (304 Maplewood); MMC Fox Run, LLC (MMC Fox Run); MMCT Realty, LLC (MMCT); MMR, MMC Crosby Road LLC (MMC Crosby Road); and PF Melville (collectively, the Real Estate Entities). These are all real estate holding companies that previously had common ownership with the Company and derived a majority of their financial support from the Company (see note 4). # PF-CT, LLC (PF-CT), PFPA, LLC (PFPA), Fitness 41, LLC (Planet Fitness OK), and Pla-Fit Colorado, LLC (Colorado) operate Planet Fitness franchises in certain parts of Connecticut, Pennsylvania, Oklahoma, and Colorado, respectively. The aforementioned entities previously had common ownership with the Company and received financial support from the Company in the form of guarantees and advances. PF-CT was sold on December 31, 2011 (see note 4). The Company acquired the remaining ownership interest in PFPA on February 1, 2012 and Colorado on September 30, 2012 (see note 5). # Planet Development, LLC (Development) provides various construction and maintenance services to Pla-Fit Health. Development has common ownership with and derives a majority of its financial support from the Company. As of December 31, 2011, and for all subsequent periods presented, Development was dormant. With the exception of the change in basis, the accounting principles utilized are the same for the Predecessor and the Successor. (b) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on managementDs knowledge of current events and actions it may undertake in the future, they may ultimately differ 9 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) from actual results. Significant areas where estimates and judgments are relied upon by management in the preparation of the consolidated financial statements include revenue recognition, consolidation of VIEs, valuation of assets and liabilities in connection with acquisitions, valuation of share based compensation awards, and the evaluation of the recoverability of goodwill and long-lived assets, including intangible assets. (c) Concentration of Credit Risk Cash and cash equivalents are financial instruments, which potentially subject the Company to a concentration of credit risk. The Company invests its excess cash in several major financial institutions, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company maintains balances in excess of these limits, but does not believe that such deposits with its banks are subject to any unusual risk. The credit risk associated with trade receivables is mitigated due to the large number of customers and their broad dispersion over many different geographic areas. (d) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash held within the National Advertising Fund, LLC (NAF) is recorded as a restricted asset (see note 6). (e) Revenue Recognition Membership Fees The following revenues are generated from health clubs owned and operated by the Company and its consolidated VIEs. Membership Fee Revenue Customers are offered multiple membership choices varying in length and in most cases can be canceled without penalty. Membership fees are earned and recognized over the membership term. Enrollment Fee Revenue Enrollment fees are charged to new members at the commencement of their membership. The Company recognizes enrollment fees ratably over the estimated average membership life, which is generally two years. Annual Membership Fee Revenue Annual Membership fees are annual fees charged to members in addition to and in order to maintain low monthly membership fees. The Company recognizes annual membership fees ratably over the 12-month membership period. 10 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) Retail Sales The Company sells Planet Fitness branded apparel, food, beverages, and other accessories. The revenue for these items is recognized at the point of sale. Equipment and Assembly Equipment Revenue The Company sells and delivers equipment purchased from third-party equipment manufacturers to franchised health clubs. Equipment revenue is recognized upon the equipment being delivered to and assembled at each club. The Company recognizes revenue on a gross basis in these transactions as Planet Fitness Equipment bears the risk of loss of the equipment and management has determined the Company to be the principal in the transaction. Customer equipment deposits are recognized as a liability on the accompanying consolidated balance sheets until delivery, assembly, if required, and acceptance by the customer. As of December 31, 2013 and 2012, deferred equipment deposits were $2,647 and $4,450, respectively. Freight and Assembly Revenue The Company is responsible for delivery and assembly of the purchased equipment to its franchised health clubs based on an approved equipment layout plan. Planet Fitness Equipment performs a majority of the equipment assembly. Freight and assembly revenues are recognized upon completion and acceptance of the assembly services at the franchise location. The Company charges its customers for all freight costs incurred for the delivery of equipment. Freight revenue is recorded within equipment and assembly revenue and freight costs are recorded within cost of revenue. Franchise Revenue Area Development Fees Developers contractually enter into Area Development Agreements (ADAs) to secure the exclusive right to open franchises within a defined geographical area. ADAs establish the timing and number of clubs to be developed within the defined geographical area. Pursuant to an ADA, a franchisee is generally required to pay an initial nonrefundable development fee for a minimum number of clubs to be developed, as outlined in the respective ADA. ADA fees collected in advance are deferred until the Company provides substantially all required obligations pursuant to the ADA. As the efforts and total cost relating to initial services are affected significantly by the number of clubs opened in an area, the respective ADA is treated as a divisible contract. As each new site is accepted under an ADA, a franchisee signs a franchise operating agreement for the respective franchise location. As each club opened under an ADA typically has performance obligations associated with it, the Company recognizes ADA revenue as each individual franchise location is developed in proportion to the total number of clubs to be developed under the ADA. These obligations are typically completed once the club is opened or the franchisee executes the individual property lease. As of December 31, 2013 and 2012, the deferred revenue for ADAs was $7,867 and $6,629, respectively. ADAs generally have an initial term equal to the number of years over which the franchisee is required to open franchise clubs, which is typically 5 to 10 years. There is no right of return for an 11 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) executed ADA. Upon default, as defined in the agreement, the Company may reacquire the rights pursuant to an ADA, and all remaining deferred revenue is recognized at that time. Franchise Fees and Performance Fees For clubs opened without an ADA, the Company generally charges an initial upfront nonrefundable franchise fee. Nonrefundable franchise fees are typically deferred until the franchisee executes a lease and receives initial training for the location, which is the point at which the Company has determined it has provided all of its material obligations required to recognize revenue. As of December 31, 2013 and 2012, the Company has recorded deferred franchise fees of $206 and $119, respectively, relating to clubs to be opened in future years. These amounts are included in deferred revenue as of December 31, 2013 and 2012. The individual franchise agreements typically have a 10-year initial term, but provide the franchisee with an opportunity to enter into successive renewals subject to certain conditions. Franchise agreements entered into prior to 2010 may include performance fees, which are fees earned by the Company upon each franchise club reaching a predetermined amount of total monthly membership billings. Performance fees are recognized when the related performance thresholds have been met. Royalties Royalties, which represent recurring fees paid by franchisees based on the franchise clubsD monthly membership billings, are recognized on a monthly basis over the term of the franchise agreement. As specified under certain franchise agreements, the Company recognizes additional royalty fees as the franchise clubs attain contractual monthly membership billing threshold amounts. Beginning in 2010, for all new franchise agreements entered into, the Company began charging a fixed royalty percentage based upon gross membership billings. Commissions The Company recognizes commission revenue from its franchiseesD use of preferred vendor arrangements. Commissions are earned and recognized when collectibility from the vendor is reasonably assured. Commissions and rebates from equipment vendors where the Company has recognized the related equipment revenue and costs are recorded as a reduction to the cost of equipment and assembly revenues. Commission revenue from non@equipment vendors was previously classified within equipment and assembly revenues. Such amounts have been reclassified to franchise revenues in the consolidated statements of operations for all periods presented. (f) Deferred Revenue Deferred revenue represents cash received from franchisees for ADAs and franchise fees for which revenue recognition criteria has not yet been met and cash received from members for enrollment membership, and annual membership fees for the portion not yet earned based on the membership period. 12 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) ASC Topic 805, Business Combinations, required the Successor to recognize a liability related to deferred revenue previously recorded by the Predecessor at its fair value on the acquisition date rather than its historical book value. As such, the Successor did not record $8,038 of deferred revenues that had been recorded by the Predecessor as of November 7, 2012. The $8,038 reduced the value of goodwill as of November 8, 2012 and will not be recorded in future earnings. (g) Cost of Revenue Cost of revenue consists of the cost of retail merchandise sold in company owned clubs, direct costs associated with equipment and assembly sales, including freight costs, and direct costs related to the &647)5?D9 .8)5+019- *13315/ )5, 67erating system. (h) Accounts and Notes Receivable Accounts receivable is primarily comprised of amounts owed to the Company resulting from equipment and assembly revenue and commissions revenue. Notes receivable arise primarily from financing activities with franchisees. On a periodic basis, and at least annually, the Company evaluates its accounts and notes receivables and may establish an allowance for doubtful accounts based on collections and current credit conditions. Accounts are written off as uncollectible when it is determined that further collection efforts will be unsuccessful. Notes receivable are generally secured by all property, assets, and rights owned by the franchisee. Historically, the Company has not had a significant amount of write-offs. (i) Leases and Asset Retirement Obligations The Company recognizes rent expense related to leased office and operating space on a straight-line basis over the term of the lease. The difference between rent expense and rent paid, if any, is the result of escalation provisions and lease incentives, such as tenant improvements provided by lessors and are recorded as deferred rent in the CompanyDs consolidated balance sheets. In accordance with ASC Topic 410, Asset Retirement and Environmental Obligations, the Company establishes assets and liabilities for the present value of estimated future costs to return certain leased facilities to their original condition. Such assets are depreciated on a straight-line basis over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated restoration costs. 13 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (j) Property and Equipment Property and equipment is recorded at cost and depreciated using the straight-line method over its related estimated useful life. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset, whichever is shorter. Upon sale or retirement, the asset cost and related accumulated depreciation are removed from the respective accounts, and any related gain or loss is reflected in the consolidated statements of operations. Ordinary maintenance and repair costs are expensed as incurred. In connection with the Acquisition, the Company determined that the historical depreciated cost of its fixed assets approximated their fair value. The estimated useful lives of the CompanyDs fixed assets by class of asset are as follows: Years Buildings and building improvements Computers and equipment Furniture and fixtures Leasehold improvements Fitness equipment Vehicles (k) 20 @ 40 3 5 Useful life or term of lease whichever is shorter 5@7 5 Advertising Expenses The Company expenses advertising costs as incurred. Advertising expenses, net of amounts reimbursed by franchisees, were $5,731, $481, $4,708 and $4,795 during the year ended December 31, 2013 (Successor), and the period from November 8 through December 31, 2012 (Successor), the period from January 1 through November 7, 2012 (Predecessor), and the year ended December 31, 2011 (Predecessor), respectively. See note 6 for discussion of the national advertising fund established during 2011. (l) Goodwill, Long-Lived Assets, and Other Intangible Assets Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with ASC Topic 350, Intangibles ' Goodwill and Other. In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; and (2) the intangible asset is separable. Goodwill is the excess of the purchase price over the estimated fair value of identifiable net assets acquired in a business combination. Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed annually for impairment or more frequently if impairment indicators arise. Separable intangible assets that are not deemed to have an indefinite life are amortized over their estimated useful lives on either a straight-line or accelerated basis as deemed appropriate, and are reviewed for impairment when events or circumstances suggest that the assets may not be recoverable. The Company performs its annual test for impairment of goodwill and indefinite lived intangible assets on December 31 of each 14 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) year. For goodwill, the first step of the impairment test is to determine whether the carrying amount of a reporting unit exceeds the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the reporting unitDs fair value, the Company would be required to perform a second step of the impairment test as this is an indication that the reporting unitDs goodwill may be impaired. The second step compares the implied fair value of the reporting unitDs goodwill with the carrying amount of that goodwill. Any impairment loss would be recognized in an amount equal to the excess of the carrying value of the goodwill over the implied fair value of the goodwill. The Company is also permitted to make a qualitative assessment of whether it is more likely than not that a reporting unitDs fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it need not perform the two-step impairment test. For indefinite lived intangible assets, the impairment assessment consists of comparing the carrying value of the asset to its estimated fair value. To the extent that the carrying value exceeds the fair value of the asset, an impairment is recorded to reduce the carrying value to its fair value. The Company is also permitted to make a qualitative assessment of whether it is more likely than not an indefinite lived intangible assetDs fair value is less than its carrying value prior to applying the quantitative assessment. If based on the CompanyDs qualitative assessment it is not more likely than not that the carrying value of the asset is less than its fair value, then a quantitative assessment is not required. The Company determined that no impairment charges were required during any periods presented. The Company applies the provisions of ASC Topic 360, Property, Plant and Equipment, which requires that long-lived assets and certain identifiable intangible assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for impairment, then assets are required to be grouped and evaluated at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the undiscounted future net cash flows expected to be generated by the asset or asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. There were no events or changes in circumstances that required the Company to test for impairment during any of the periods presented. (m) Income Taxes Holdings and its wholly owned subsidiaries were formed as limited liability companies (LLCs) and have elected to be taxed as partnerships for both federal and state purposes (pass-through entities). For federal and certain state income tax purposes, the members of the Company include the net income or loss from the pass-through entities in their individual income tax returns. Additionally, other VIEs were formed as LLCs in their state of origin and have also elected to be taxed as pass-through entities. 15 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the expected future tax consequences attributable to temporary difference between the carrying amount of the existing tax assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be applied in the years in which temporary differences are expected to be recovered or settled. The principal items giving rise to temporary differences are the use of accelerated depreciation and certain basis differences resulting from acquisitions including the Acquisition by TSG. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company does incur state income taxes in certain states, principally New Hampshire. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs (see note 14). During 2013 the Company changed its position with respect to taxes due on interest and dividends to the state of New Hampshire that had previously been paid by the members of the Predecessor. This resulted in the Company making tax payments in 2013 totaling $4,392 for periods prior to November 7, 2012. This amount is included within other income (expense) for the year ended December 31, 2013 for the Successor and is fully offset by amounts received from the members of the Predecessor as reimbursement for the taxes paid, also recorded within other income (expense) for the year ended December 31, 2013 for the Successor. This position is not available for periods subsequent to November 7, 2012 and therefore taxes on interest and dividends due and payable in the Successor periods are paid by the members of the Successor. (n) Fair Value Measurements Certain assets and liabilities recorded at fair value are categorized based on the inputs to the valuation techniques as follows: Level 1 @ Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access at the measurement date. Level 2 @ Assets and liabilities whose values are based on quoted prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. Level 2 inputs include the following: # Quoted prices for identical or similar assets or liabilities in nonactive markets; # Inputs other than quoted prices that are observable for substantially the full term of the asset or liability; and # Inputs that are derived principally from or corroborated by observable market data for substantially the full term of the asset or liability. 16 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) Level 3 @ Assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect managementDs own assumptions about the assumptions a market participant would use in pricing the asset or liability. The CompanyDs interest rate swap is the only asset or liability in the consolidated balance sheet measured at fair value as of December 31, 2013. See note 11 for further discussion. The Company did not have any assets or liabilities measured at fair value in the consolidated balance sheet as of December 31, 2012. Assets and liabilities that are measured at fair value on a nonrecurring basis primarily include assets acquired and liabilities assumed in business combination transactions and assets and liabilities measured in the course of assessing goodwill and other long-lived assets for impairment. The fair values used in these nonrecurring measurements are generally Level 3 measurements. (o) Financial Instruments The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short-term nature of these instruments. The carrying value of debt also approximates fair value as it is variable rate debt. The Company has determined that the determination of the fair value of amounts due from related parties under long-term arrangements is impracticable given the related-party nature of these arrangements. The carrying value of notes receivable approximates fair value based on similar interest rates charged for these arrangements in recent transactions. (p) Derivative Instruments and Hedging Activities The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are either offset through earnings against the change in fair value of the hedged item attributable to the risk being hedged or recognized in accumulated other comprehensive income, to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings. The Company only enters into derivative contracts that it intends to designate as a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge). For all hedging relationships, the Company formally documents the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being hedged, how the hedging instrumentDs effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness. The Company also formally assesses, both at the inception of the hedging relationship and on an ongoing basis, whether the derivatives that are used in hedging relationships are highly effective in offsetting changes in cash flows of hedged transactions. For derivative instruments that are designated and qualify as part of a cash flow hedging relationship, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same 17 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting cash flows attributable to the hedged risk, the derivative expires or is sold, terminated, or exercised, the cash flow hedge is de-designated because a forecasted transaction is not probable of occurring, or management determines to remove the designation of the cash flow hedge. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, the Company continues to carry the derivative at its fair value on the balance sheet and recognizes any subsequent changes in its fair value in earnings. When it is probable that a forecasted transaction will not occur, the Company discontinues hedge accounting and recognizes immediately in earnings gains and losses that were accumulated in other comprehensive income related to the hedging relationship. See note 11 to the consolidated financial statements. (q) Share-Based Compensation The Company operates an equity-settled share-based compensation plan under which it receives services from employees as consideration for equity instruments of Topco. The compensation expense is determined based on the fair value of the award as of the grant date. Compensation expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are satisfied. For awards with graded vesting, the fair value of each tranche is recognized over its respective vesting period. No compensation expense has been recognized related ;6 ;0- &647)5?D9 90)8--based compensation plan as the exercisability is contingent upon a liquidity event occurring. See note 16 for further information. (r) Guarantees The Company, as a guarantor, is required to recognize, at inception of the guaranty, a liability for the fair value of the obligation undertaken in issuing the guarantee. See note 17 for discussion of such obligations guaranteed. (3) Acquisition On November 8, 2012, Topco was acquired in a transaction with TSG for $479,250. The consideration consisted of equity contributions totaling $314,250, including a rollover investment of $78,750 by MMC and $165,000 of interim notes payable from TSG to MMC. The interim notes payable were repaid in connection with the financing agreements entered into in December 2012 by the Successor (see note 10). 18 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) The following table summarizes the consideration and the fair values of the assets acquired and liabilities assumed at the acquisition date based on the final valuation and purchase price allocation: Total consideration transferred, net of cash acquired Recognized amounts of identifiable assets acquired and liabilities assumed at their fair values: Accounts receivable Property, plant and equipment Other assets Identifiable intangible assets Accounts payable, accrued expenses and other liabilities assumed Deferred revenues Deferred income taxes $ 459,086 $ 7,364 28,461 17,669 332,335 (68,265) (13,751) (1,937) Total net assets acquired 301,876 Goodwill 157,210 Total $ 459,086 During 2013 the Company finalized its valuation of the assets acquired and liabilities assumed in connection with the Acquisition. This resulted in a decrease to recorded intangible assets of $14,100, a decrease to deferred tax liabilities of $483, an increase to accrued expenses of $270 and an increase to goodwill of $13,887 as of November 8, 2012 and increases in amortization expense of $1,308, club operations of $6 and a decrease in the provision for state income taxes of $16 for the period from November 8, 2012 to December 31, 2012. These adjustments resulting from finalizing the valuation have been reflected retrospectively as of December 31, 2012 and for period from November 8, 2012 through December 31, 2012 in the accompanying consolidated financial statements. The purchase price allocation to the identifiable intangible assets acquired is as follows: Weighted average useful life (in years) Trade and brand names Customer relationships Noncompete agreements Favorable leases Order backlog Indefinite 11 5 9 A 19 Fair value $ 146,300 165,900 14,500 2,235 3,400 $ 332,335 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) These acquired intangible assets are being amortized primarily on a straight-line basis, over their estimated useful lives by the Successor. Order backlog is being amortized over the period in which the orders are being fulfilled. The estimated fair values of the intangible assets acquired were determined using the income approach based on significant inputs that are not observable. The Company considers the fair value of each of the acquired intangible assets to be Level 3 assets due to the significant estimates and assumptions used by management in establishing the estimated fair values. In connection with the Acquisition, the Predecessor incurred $6,638 of expenses that are included in the consolidated statement of operations for the period ended November 7, 2012, of which $4,792 was funded by equity contributions by MMC. (4) Variable Interest Entities The Company classifies income attributable to noncontrolling interests as part of consolidated net income and includes the accumulated amount of noncontrolling interests as a component of equity. Net income, excluding the amount allocable to noncontrolling interests, is presented as BNet income attributable to the members of Planet Fitness, LLC.C The presentation of changes in equity distinguishes between equity amounts attributable to members and amounts attributable to the noncontrolling interests. Distributions to noncontrolling interests are classified as financing cash flows. In addition, increases and decreases in the CompanyDs controlling financial interests are reported within equity as long as such changes do not result in a loss of control. If a change occurs that results in loss of control and deconsolidation, any retained ownership interests are remeasured at fair value with the gain or loss reported in net income. The carrying values of VIEs included in the consolidated financial statements as of December 31 are as follows: 2013 Assets Liabilities (Successor) PF Melville MMR Total 2012 Assets Liabilities (Successor) $ 3,446 2,754 A A 3,698 3,169 3,455 15 $ 6,200 A 6,867 3,470 In August 2012, MMC became the sole members of PF Melville and management determined that the Company was the primary beneficiary of this VIE. Therefore, Holdings began consolidating PF Melville in August 2012. During 2013 the ownership of this entity changed; however, this did not impact the determination that the Company continues to be the primary beneficiary of this VIE. During 2013, the ownership of MMR changed; however, the Company continues to be the primary beneficiary of this VIE, therefore MMR remains a consolidated VIE. 20 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) The Acquisition and certain other transactions resulted in the deconsolidation of MMCT, 304 Maplewood, MMC Fox Run, and MMC Crosby during 2012. On September 30, 2012, the Company acquired the remaining interest in Colorado from the individual members for one dollar (see note 5). This resulted in Colorado becoming a wholly owned subsidiary of Holdings rather than a consolidated VIE. On February 1, 2012, the Company purchased 100% interest in PFPA and an affiliated entity, which were formerly 51% owned by the members of the Predecessor (see note 5). This resulted in PFPA becoming a wholly owned subsidiary of Holdings rather than a consolidated VIE. On December 31, 2011, the operations of Development were discontinued. During 2012, the remaining net assets of Development were distributed to the individual members of the Predecessor, and the Company recognized a $702 gain on the dissolution. On September 30, 2012, one of the individual members of the Predecessor sold their interest in Planet Fitness OK and the Company recognized a $767 gain on the sale. As a result of this transaction, Planet Fitness OK is no longer a consolidated VIE. The Company also has variable interests in other franchisees mainly through the guarantee of certain debt and lease agreements as well as financing provided by the Company as well as by certain related parties; however, the Company has determined it is not the primary beneficiary of these franchisees based on the criteria described in note 2(a). The CompanyDs maximum obligation, as a result of its guarantees of leases and debt, is approximately $3,902 as of December 31, 2013. The amount of maximum obligation represents a loss that the Company could incur from the variability in credit exposure without consideration of possible recoveries through insurance or other means. In addition, the amount bears no relation to the ultimate settlement anticipated to be incurred from the CompanyDs involvement with these entities, which is estimated at $0. (5) Business Acquisitions, Dispositions, and Noncontrolling Interests On February 1, 2012, the Company purchased 100% interest in PFPA and an affiliated entity, which were formerly 51% owned by the members of the Predecessor. The combined purchase included 11 fitness clubs in Pennsylvania for an additional investment of approximately $5,000. The Company financed the purchase through its revolving credit facility. In accordance with ASC Topic 810, Consolidation, because PFPA was already a consolidated VIE, the Company recorded this purchase as an equity transaction, reducing membersD equity by $5,287 and increasing noncontrolling interest in VIEs by $392. On June 1, 2012, the Company sold certain assets related to two fitness clubs in Rhode Island to a third party. In exchange for the assets sold, the Company received a note receivable of $1,500. The note bears interest at 7% and calls for monthly payments of principal and interest with a lump-sum payment of $1,224 due upon maturity on July 1, 2015. The Company recorded a $452 gain on the sale. 21 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) On August 1, 2012, the Company purchased the assets of a franchise entity, including four fitness clubs in Delaware and Pennsylvania, for a cash payment of $12,140. The Company financed the purchase through its revolving credit facility and operating cash. The purchase price was allocated as follows: Fixed assets Reacquired franchise rights Reacquired area development rights Goodwill Liabilities assumed, including deferred revenues Total $ 2,022 9,629 90 956 (557) $ 12,140 On August 10, 2012, the individual members of the Predecessor liquidated their ownership in a limited liability company that was established in 2009. In conjunction with the liquidation, the Company forgave $650 of indebtedness to the franchise entity and the members received and concurrently contributed to the Company certain assets of the entity, including 10 fitness clubs in New York and New Jersey (the NY/NJ acquisition). The Company has recorded this equity contribution at the fair value of the net assets contributed, in accordance with ASC Topic 805, Business Combinations. The fair value of the contribution was allocated based on a valuation as follows: Fixed assets Reacquired franchise rights Reacquired area development rights Goodwill Other assets Unfavorable leases, net Forgiveness of note receivable Deferred tax liabilities Liabilities assumed Total $ 5,667 14,900 600 22,488 488 (26) (650) (438) (4,282) $ 38,747 In 2012 the amounts recorded with respect to this transaction were based on a provisional valuation of the assets and liabilities contributed to the Company by MMC. There were no changes to such amounts based on finalizing the valuation during 2013. On September 30, 2012, the Company acquired the remaining interest in Colorado from the individual members of the Predecessor for one dollar. In accordance with ASC Topic 810, Consolidation, because Colorado was already a consolidated VIE, the Company recorded this purchase as an equity transfer of $(118) from noncontrolling interest to membersD equity. In September 2010, the CompanyDs 51% interest in PF-CT was transferred to the individual members of the Predecessor, however PF-CT remained a consolidated variable interest entity. On December 31, 2011, 22 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) the individual members of the Predecessor sold their entire interest in PF-CT for one dollar, and the Company recognized a gain of $234 on the sale and deconsolidation of PF-CT. In all of the acquisitions above, the estimated fair values of the intangible assets acquired were determined using the income approach based on significant inputs that are not observable. The Company considers the fair value of each of the acquired intangible assets to be Level 3 assets due to the significant estimates and assumptions used by management in establishing the estimated fair values. (6) National Advertising Fund On July 26, 2011, the Company established Planet Fitness NAF, LLC (NAF) for the creation and development of marketing, advertising, and related programs and materials for all Planet Fitness health clubs. On behalf of the NAF, the Company collects 2% of gross monthly membership billings from franchisees, in accordance with the provisions of the franchise agreements. The Company also contributes 2% of monthly membership billings from clubs owned by the Company to the NAF. The use of amounts received by NAF is restricted to advertising, product development, public relations, merchandising, and administrative expenses and programs to increase sales and further enhance the public reputation of the Planet Fitness brand. The Company consolidates and reports all assets and liabilities held by NAF. Amounts received by NAF are reported as restricted assets and restricted liabilities within current assets and current liabilities on the consolidated balance sheets. The Company provides administrative services to NAF and charges NAF a fee for providing those services. These services include accounting services, information technology, data processing, product development, legal and administrative support, and other operating expenses, which amounted to $865, $92, $534 and $188 for the year ended December 31, 2013 (Successor), the period from November 8 through December 31, 2012 (Successor), the period from January 1 through November 7, 2012 (Predecessor), and the year ended December 31, 2011 (Predecessor), respectively. The fees paid to the Company by NAF are included in the consolidated statements of operations as a reduction in general and administrative expense, where the expense incurred by the Company was initially recorded. (7) Notes Receivable The Company has various notes receivable from franchisees to facilitate ongoing business. Notes receivable consist of unpaid principal and accrued interest. These notes receivable range from $326 to $2,008 as of December 31, 2013, with maturity dates ranging from October 1, 2014 to February 1, 2018. The balance consists of the following current and noncurrent portions: 2013 2012 (Successor) Current portion of notes receivable Long-term portion of notes receivable Total notes receivable 23 $ 513 3,672 2,387 4,402 $ 4,185 6,789 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (8) Property and Equipment Property and equipment as of December 31 consists of the following: 2013 2012 (Successor) Land Equipment Leasehold improvements Buildings and improvements Vehicles Other $ Accumulated depreciation Total $ 910 13,001 19,001 5,341 141 2,343 910 10,815 14,308 5,431 161 1,991 40,737 33,616 (6,971) (869) 33,766 32,747 In connection with the Acquisition, the gross value of property and equipment was adjusted to its estimated fair value and accumulated depreciation was reset to $0. The Company recorded depreciation expense of $6,171, $869, $4,142, and $4,078 for the year ended December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor), respectively. Refer to note 17 for capital lease commitments. (9) Goodwill and Intangible Assets A summary of goodwill and intangible assets at December 31 is as follows: 2013 2012 (Successor) Trade and brand names Customer relationships Noncompete agreements Favorable leases Order backlog Reacquired franchise rights $ 146,300 165,900 14,500 2,235 3,400 A 146,300 165,900 14,500 2,235 3,400 A 332,335 332,335 (29,007) (6,124) $ 303,328 326,211 $ 157,210 157,210 Less accumulated amortization Total intangible assets, net Goodwill 24 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) The changes in the carrying amount of goodwill are as follows: Balance at December 31, 2011 $ 1,396 Acquisition of the Company $ 157,210 Balance at December 31, 2012 Changes to Goodwill $ 157,210 A Balance at December 31, 2013 $ 157,210 Amortization expense related to the intangible assets totaled $22,883 for the year ended December 31, 2013 (Successor), $6,124 for the period from November 8, 2012 to December 31, 2012 (Successor), $1,499 for the period from January 1, 2012 to November 7, 2012 (Predecessor) and $158 for the year ended December 31, 2011 (Predecessor). Included within these total amortization expense amounts is $246 and $34 related to amortization of favorable leases for the year ended December 31, 2013 and the period from November 8, 2012 to December 31, 2012, respectively. Amortization of favorable leases is recorded within club operations in the consolidated statements of operations. The anticipated annual amortization expense to be recognized in future years as of December 31, 2013 is as follows: 2014 2015 2016 2017 2018 Thereafter Total 25 $ 19,916 18,176 17,116 15,975 12,626 73,219 $ 157,028 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (10) Long-Term Debt 2013 2012 (Successor) Holdings: Term loan (JP Morgan) requires quarterly installments plus interest through the term of the loan, maturing December 14, 2017. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (3.44% at December 31, 2013) Revolving credit line (JP Morgan), requires interest only payments through the term of the loan, maturing December 14, 2017. Outstanding borrowings bear interest at LIBOR or base rate (as defined) plus a margin at the election of the borrower (2.42% at December 31, 2013) $ PF Melville: Mortgage note payable to two individuals, requires monthly installments of principal and interest, bearing interest at 7%, and scheduled to mature on June 1, 2018 Note repaid on April 1, 2013 Current portion of long-term debt and line of credit Long-term debt, net of current portion $ 182,875 190,000 A 3,525 A 3,419 182,875 196,944 9,500 13,131 173,375 183,813 On December 12, 2012, Holdings entered into a five-year $230,000 credit facility with a consortium of banks led by J.P. Morgan Chase Bank (JP Morgan) to refinance existing indebtedness, as well as to provide for working capital, capital expenditures, loans to franchisees, acquisitions, and general corporate purposes. The facility consists of a $190,000 Term Loan and $40,000 Revolving Credit Facility. The Term Loan calls for quarterly principal installment payments of $2,375 in 2014, $3,563 in 2015 and 2016, and $4,750 in 2017. Capitalized debt issuance costs associated with the financing totaled $7,161 and are reflected in other long-term assets in the SuccessorDs consolidated balance sheet, net of accumulated amortization of $1,657 as of December 31, 2013. In conjunction with the Acquisition, TSG issued notes payable to MMC totaling $165,000. These notes bore interest at 10% annually and were scheduled to mature on November 7, 2013. These interim notes payable were repaid in full and terminated in connection with executing the JP Morgan Credit Facility. On September 24, 2010, Holdings entered into a three-year $40,000 senior secured credit facility with General Electric Capital Corporation (GE) to refinance existing indebtedness, as well as to provide for working capital, capital expenditures, loans to franchisees, acquisitions, and general corporate purposes. 26 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) The facility consisted of a $20,000 Term Loan and $20,000 Revolving Credit Facility. In September 2012, the GE credit facility was amended, increasing the Term Loan to $40,000 and maintaining the Revolving Credit Facility at $20,000. The amended terms called for quarterly principal payments of $1,000 and a maturity date of September 21, 2016. The GE credit facility was repaid in full and terminated upon the commencement of the JP Morgan credit facility in December 2012. The CompanyDs five-year $230,000 credit facility requires the Company to meet certain financial covenants, which the Company was in compliance with as of December 31, 2013. The facility is secured by all of the CompanyDs assets, excluding the assets attributable to the VIEs (see note 4). Future annual principal payments of long-term debt as of December 31, 2013 are as follows: 2014 2015 2016 2017 Total $ 9,500 11,875 14,250 147,250 $ 182,875 (11) Derivative Instruments and Hedging Activities During 2013 the Company entered into interest-rate-related derivative instruments to manage its exposure related to changes in interest rates on its variable-rate debt instruments. The Company does not enter into derivative instruments for any purpose other than cash flow hedging. The Company does not speculate using derivative instruments. By using derivative financial instruments to hedge exposures to changes in interest rates, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is an asset, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative contract is a liability, the Company owes the counterparty and, therefore, the Company is not exposed to the counterpartyDs credit risk in those circumstances. The Company minimizes counterparty credit risk in derivative instruments by entering into transactions with high-quality counterparties whose credit rating is higher than A1/A+ at the inception of the derivative transaction. The derivative instruments entered into by the Company do not contain credit-risk-related contingent features. Market risk is the adverse effect on the value of a derivative instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. The Company assesses interest rate risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. The Company monitors interest rate risk attributable to both the CompanyDs outstanding or forecasted debt obligations as well as the CompanyDs offsetting hedge positions. 27 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) A component of the interest due on the CompanyDs long-term debt is based on the variable London Interbank Offered Rate (LIBOR). The debt obligations expose the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, management entered into LIBOR based interest rate swap agreements to manage fluctuations in cash flows resulting from changes in the benchmark interest rate of LIBOR. These swaps change the variable-rate cash flow exposure on a portion of its debt obligations to fixed-rate cash flows. Under the terms of the interest rate swaps, the Company receives LIBOR based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed-rate debt for the notional amount of its debt hedged. As of December 31, 2013 and 2012, the total notional amount of the CompanyDs outstanding interest-rate swap agreements that were entered into to hedge outstanding or forecasted debt obligations were $90,630 and $0, respectively. Changes in the fair value of interest rate swaps designated as hedging instruments that effectively offset the variability of cash flows associated with variable-rate, long-term debt obligations are reported in accumulated other comprehensive income. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings. There were no derivative instruments in place prior to 2013. The Company has recorded deferred gains of $92 within other current assets related to its interest rate swaps with a corresponding amount included within accumulated other comprehensive income as of December 31, 2013. This amount has been measured at fair value and is considered to be a Level 2 fair value measurement. As of December 31, 2013, $92 of deferred gains on derivative instruments included in accumulated in other comprehensive income are expected to be reclassified to earnings during the next 12 months. Transactions and events expected to occur over the next twelve months that will necessitate reclassifying these derivativesD gains to earnings include the re-pricing of variable-rate debt. There were no cash flow hedges discontinued during 2013 or 2012. 28 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (12) Deferred Revenue The summary set forth below represents the balances in deferred revenue as of December 31: 2013 2012 (Successor) Prepaid membership fees Enrollment fees Annual membership fees Area development and franchise fees $ Long-term portion of deferred revenue Current portion of deferred revenue $ 4,693 1,603 4,268 8,073 4,084 243 4,163 6,748 18,637 15,238 7,193 5,724 11,444 9,514 Equipment deposits received in advance of assembly and customer acceptance as of December 31, 2013 and 2012 were $2,647 and $4,450, respectively. (13) Related-Party Transactions The members of the Predecessor had an ownership interest in a limited liability company that was established in 2009. As described in note 5, the members liquidated their investment in this limited liability company effective August 10, 2012. Activity with this entity as well as other entities related through common ownership of Topco is summarized below: %++6<5;9 8-+-1=)*3- @ 8-3);-, -5;1;1-9 %++6<5;9 8-+-1=)*3- @ 4-4*-89 $ Due from related parties, current portion Due from related parties, net of current portion $ 2013 (Successor) 2012 (Successor) 4 1,328 10 A 1,332 10 1,332 10 A A Amounts due from members as of December 31, 2013 relate to reimbursements for taxes paid by the Successor for which the members have indemnified the Successor. 29 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) Period from November 8, 2012 through December 31, December 31, 2013 2012 (Successor) Franchise revenue Equipment and assembly revenue Total net revenue from related parties Period from January 1, 2012 through November 7, December 31, 2012 2011 (Predecessor) $ 199 855 23 A 1,783 2,988 2,926 9,151 $ 1,054 23 4,771 12,077 During the year ended December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor), the Company earned interest income of $0, $0, $326, and $343, respectively, on notes receivable from related parties. All funds advanced to these entities were used to assist in financing of the respective operations. In addition, the Company guarantees certain operating leases and debt agreements of these entities (see note 17). The Successor paid management fees to TSG totaling $1,136 during the year ended December 31, 2013, and $147 during the period from November 8, 2012 to December 31, 2012. (14) Income Taxes The provision (benefit) for state income taxes consists of the following: Period from November 8, 2012 through December 31, December 31, 2013 2012 (Successor) Current Deferred Provision for state income taxes Period from January 1, 2012 through November 7, December 31, 2012 2011 (Predecessor) $ 2,063 (1,430) 157 (101) 681 (25) 651 96 $ 633 56 656 747 Net deferred tax liabilities of $406 and $1,836 as of December 31, 2013 and 2012, respectively, relate primarily to the tax effects of temporary differences for acquired intangible assets. Net deferred tax assets as of December 31, 2013 and 2012 are immaterial and included in other assets in the accompanying consolidated balance sheets. 30 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) As of December 31, 2013 and 2012, the total liability related to uncertain tax positions is $300. The Company recognizes interest accrued and penalties, if applicable, related to unrecognized tax benefits in income tax expense. Interest and penalties for the year ended December 31, 2013 and periods from November 8, 2012 to December 31, 2012 and January 1, 2012 to November 7, 2012 and the year ended December 31, 2011 were not material. The CompanyDs open years for state income tax examination purposes are 2010 through 2013. (15) Members' Equity Each of the CompanyDs limited liability companies (LLCs) operates like a partnership, and therefore, profits and losses are allocated on a basis defined in the LLC agreement. The LLCs make capital distributions of cash available on the basis defined in the LLC agreement. Thereafter, distributions are made according to each partnerDs or memberDs interests in the LLC. As of December 31, 2013, all of the priority distribution payments, per the agreement of all of the partners of the LLC, have been made. (16) Share-Based Compensation Plan In 2013, Topco adopted the 2013 Equity Incentive Plan. Under this Plan, Topco granted awards in the form of Class M Units to employees and directors of the Company. A maximum of 526.316 Class M Units may be granted under the Plan and awards are granted on a discretionary basis and are subject to the approval of (67+6D9 Board of Directors. The Class M Units receive distributions only upon a liquidity event, as defined, that exceeds a threshold approximately equivalent to the fair value of the Company at the grant date. Eighty percent of the awards vest over 5 years of continuous service while the other twenty percent only vest in the event of an initial 7<*31+ 6..-815/ 6. ;0- &647)5?D9 +64465 9;6+2 68 ;0); 6. its parent or one of its subsidiaries. All awards include a repurchase option at the election of Topco for the vested portion upon termination of service, and have a 10 year contractual term. The Class M Units provide for accelerated vesting if there is a Company sale (as defined in the Topco LLC agreement). These awards are accounted for as equity at their fair value as of the grant date, however no expense has been recorded as the exercisability is contingent upon a liquidity event. The fair value of each award was estimated on the date of grant using a Monte Carlo simulation model. The weighted average assumptions for the 2013 grants are provided in the following table. Since the &647)5?D9 90)8-9 )8- 56; 7<*31+3? ;8),-,$ ->7-+;-, =63);131;? 19 -9;14);-, *)9-, 65 ;0- )=-8)/- 019;681+)3 volatility of similar entities with publicly traded shares. The term is based on the estimated time to a liquidity event. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve at the date of grant. 2013 Valuation assumptions: Expected dividend yield Expected volatility Expected term (years) Risk-free interest rate 0.0% 39.4% 3.7 0.8% 31 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) A total of 431.577 Class M Units were granted during 2013 and are outstanding as of December 31, 2013, of which 24.421 were time vested (but not yet exercisable due to the fact that exercisability is contingent on a liquity event at December 31, 2013). The weighted average grant-date fair value of the Class M Units granted during 2013 was $10,046 per unit and $10,656 per units vested at December 31, 2013. No distributions were paid under these awards in 2013 and no awards have been forfeited. At December 31, 2013, there was $4,336 of total unrecognized compensation cost related to all awards granted under the Plan. (17) Commitments and Contingencies (a) Capital Lease Commitments The Company is obligated under a number of lease agreements for equipment. Certain of these leases have been determined to be capital leases and the assets and liabilities have been recorded at the lesser of the present value of the minimum lease payments or the fair value of the assets. Depreciation of the assets held under capital leases is included in depreciation expense. Following is the property and equipment under capital lease commitments by major class as of December 31: 2013 2012 (Successor) Property class: Equipment Leasehold improvements Less accumulated depreciation $ 4,774 1,542 (2,161) 4,774 1,542 (314) $ 4,155 6,002 Approximate future annual minimum gross lease payments due under capital leases are as follows: 2014 2015 2016 $ Total gross lease payments 1,236 391 47 1,674 Less interest included in payments (90) Net future annual lease payments due under capital leases 1,584 Less current portion 1,162 Long-term portion $ 32 422 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (b) Operating Lease Commitments The Company rents equipment, office, and warehouse space at various locations in the United States under noncancelable operating leases. Rental expense was approximately $13,830, $1,904, $7,848, and $6,354 during the year ended December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor), respectively. Approximate annual future commitments under noncancelable operating leases as of December 31, 2013 are as follows: 2014 2015 2016 2017 2018 Thereafter Total minimum lease payments (c) $ 9,743 10,082 10,324 10,093 9,395 52,302 $ 101,939 Guarantees On October 7, 2008, the Company entered into an agreement with Main Street Bank (MSB), a Texas banking association, for all franchisees seeking financing to acquire equipment and other property. This agreement provides financing to all qualified franchisees for up to $40,000 (as defined in the agreement). The maximum length for any one loan is 72 months. The Company earns a commission from MSB of up to 1.5% of the total funded leases provided to the franchisees, including origination fees. The Company has not earned any fees or commissions from MSB during any of the periods presented. At inception, the Company was obligated to MSB in an initial aggregate amount of up to $4,000 for leases subject to a subsequent default, which declines over the term of the agreement, as defined, provided that there has been no breach by the Company of its material representations, warranties, or covenants under the agreement. The CompanyDs maximum potential obligation as of December 31, 2013 was approximately $604. The Company has determined the fair value of these guarantees at inception is not material and no accrual is recorded as of December 31, 2013 or 2012. The Company has also guaranteed certain other leases and debt agreements of entities related through common ownership. These guarantees relate to leases for operating space, equipment, and other operating costs of franchises operated by the related entities. The CompanyDs maximum total commitment under these agreements is approximately $3,300 and would only require payment upon default by the primary obligor. The Company has determined the fair value of these guarantees at inception is not material, and as of December 31, 2013 and 2012, no accrual has been recorded for the CompanyDs potential obligation under its guaranty arrangement. 33 (Continued) PLANET FITNESS HOLDINGS, LLC Notes to Consolidated Financial Statements December 31, 2013 and 2012 (Amounts in thousands) (d) Legal Matters From time to time, and in the ordinary course of business, the Company may be subject to various claims, charges, and litigation. The Company is not currently aware of any legal proceedings or claims that the Company believes will have, individually or in the aggregate, a material adverse effect on the CompanyDs financial position or result of operations. (e) Advertising As of December 31, 2013, the Company had advertising purchase commitments of approximately $10,926 with its advertising agency, including commitments for the NAF. (f) Performance Incentive Plan During 2013, Topco adopted the 2013 Performance Incentive Plan, which calls for pre-determined bonus amounts totaling $461 to be paid to employees of the Company upon a future liquidation event of the Company that exceeds a pre-determined threshold. Given the uncertainty of the underlying event, no compensation expense has been recorded in 2013. (18) Retirement Plan The Company maintains a 401(k) deferred tax savings plan (the Plan) for eligible employees. The Plan provides for the Company to make an employer matching contribution currently equal to 100% of employee deferrals up to a maximum of 4% of each eligible participating employeesD wages. The employer contribution vests over six years. In order to participate in the Plan, employees must have been employed by the Company for at least one year. Total employer matching contributions expensed in the consolidated statements of operations were approximately $214, $18, $73 and $72 for the year ended December 31, 2013 (Successor), the period from November 8, 2012 to December 31, 2012 (Successor), the period from January 1, 2012 to November 7, 2012 (Predecessor) and the year ended December 31, 2011 (Predecessor), respectively. (19) Subsequent Events The Company has evaluated events that have occurred subsequent to December 31, 2013 through March 10, 2014, the date these consolidated financial statements were available to be issued. 34 PLANET FITNESS HOLDINGS, LLC Consolidating Balance Sheet December 31, 2013 (Amounts in thousands) Planet Fitness Holdings and Subsidiaries Assets Current assets: Cash and cash equivalents Accounts receivable, net Due from related parties, current Inventory Notes receivable, current Restricted funds – NAF Other current assets $ Variable interest entities Eliminations Total 31,007 15,783 1,332 2,243 513 1,351 5,058 260 — — — — — — — — — — — — — 31,267 15,783 1,332 2,243 513 1,351 5,058 57,287 260 — 57,547 29,651 303,328 157,210 3,672 6,573 5,940 — — — — (1,825) — — — — 33,766 303,328 157,210 3,672 6,573 $ 557,721 6,200 (1,825) 562,096 $ — 9,500 30,379 1,328 2,647 1,351 11,444 264 — — — — — — — — — — — (166) — — — — — 9,500 30,379 1,162 2,647 1,351 11,444 264 56,913 — (166) 56,747 Long-term debt, net of current maturities Obligations under capital leases, net of current portion Deferred rent, net of current portion Deferred revenue, net of current portion Deferred tax liabilities – non current Other liabilities 173,375 2,703 1,376 7,193 593 474 — — — — — — — (2,280) — — — — 173,375 423 1,376 7,193 593 474 Total noncurrent liabilities 185,714 — (2,280) 183,434 315,094 — — 6,200 621 — 315,715 6,200 315,094 6,200 621 321,915 557,721 6,200 (1,825) 562,096 Total current assets Property and equipment, net Intangible assets, net Goodwill Notes receivable, net of current portion Other assets, net Total assets Liabilities and Equity Current liabilities: Line of credit Current maturities of long-term debt Accounts payable and accrued expenses Current maturities of obligations under capital leases Equipment deposits Restricted liabilities – NAF Deferred revenue, current Other current liabilities Total current liabilities Equity: Members’ equity Noncontrolling interests in variable interest entities Total equity Total liabilities and equity $ See accompanying independent auditors’ report. 35 PLANET FITNESS HOLDINGS, LLC Consolidating Balance Sheet December 31, 2012 (Amounts in thousands) Planet Fitness Holdings and Subsidiaries Assets Current assets: Cash and cash equivalents Accounts receivable, net Due from related parties, current Inventory Notes receivable, current Restricted funds – NAF Other current assets $ Variable interest entities Eliminations Total 8,914 12,739 3 493 2,387 1,863 3,902 541 — 7 — — — 18 — — — — — — — 9,455 12,739 10 493 2,387 1,863 3,920 30,301 566 — 30,867 28,449 326,211 157,210 4,402 8,213 6,301 — — — — (2,003) — — — — 32,747 326,211 157,210 4,402 8,213 554,786 6,867 (2,003) 559,650 3,525 9,500 16,866 3,445 4,450 1,863 9,514 248 — 106 51 — — — — — — — 6 (154) — — — — 3,525 9,606 16,923 3,291 4,450 1,863 9,514 248 49,411 157 (148) 49,420 Long-term debt, net of current maturities Obligations under capital leases, net of current portion Deferred rent, net of current portion Deferred revenue, net of current portion Deferred tax liabilities – non current Other liabilities 180,500 4,030 205 5,724 2,193 72 3,313 — — — — — — (2,446) — — — — 183,813 1,584 205 5,724 2,193 72 Total noncurrent liabilities 192,724 3,313 (2,446) 193,591 312,651 — — 3,397 591 — 313,242 3,397 312,651 3,397 591 316,639 554,786 6,867 (2,003) 559,650 Total current assets Property and equipment, net Intangible assets, net Goodwill Notes receivable, net of current portion Other assets, net Total assets $ Liabilities and Equity Current liabilities: Line of credit Current maturities of long-term debt Accounts payable and accrued expenses Current maturities of obligations under capital leases Equipment deposits Restricted liabilities – NAF Deferred revenue, current Other current liabilities $ Total current liabilities Equity: Members’ equity Noncontrolling interests in variable interest entities Total equity Total liabilities and equity $ See accompanying independent auditors’ report. 36 PLANET FITNESS HOLDINGS, LLC Consolidating Statement of Operations Year ended December 31, 2013 (Amounts in thousands) Planet Fitness Holdings and Subsidiaries Net revenues: Membership fees Equipment and assembly Franchise revenue $ Variable interest entities Eliminations Total 67,364 105,803 37,842 — — — — — — 67,364 105,803 37,842 211,009 — — 211,009 81,353 42,187 28,719 22,757 — — 267 361 — (495) (178) — 81,353 41,692 28,808 23,118 175,016 628 (673) 174,971 35,993 (628) 673 36,038 496 (9,386) (1,062) — (22) 1,011 — — (643) 496 (9,408) (694) Total other expense, net (9,952) 989 (643) (9,606) Income before taxes 26,041 361 30 26,432 633 — — 633 25,408 361 30 25,799 — 361 — 361 25,408 — 30 25,438 Total net revenues Operating costs and expenses: Cost of revenue Club operations Depreciation and amortization Selling, general and administrative Total operating costs and expenses Income from operations Other income (expense), net: Interest income Interest expense Other income (expense) Provision for state income taxes Net income Less net income (loss) attributable to noncontrolling interests Net income attributable to members of Planet Fitness Holdings, LLC $ See accompanying independent auditors’ report. 37 PLANET FITNESS HOLDINGS, LLC Consolidating Statement of Operations Period from November 8, 2012 to December 31, 2012 (Amounts in thousands) Planet Fitness Holdings and Subsidiaries Net revenues: Membership fees Equipment and assembly Franchise revenue $ Total net revenues Operating costs and expenses: Cost of revenue Club operations Depreciation and amortization Selling, general and administrative Total operating costs and expenses Income from operations Other income (expense), net: Interest income Interest expense Other income (expense) Total other expense, net Income before taxes Provision for state income taxes Net income Less net income attributable to noncontrolling interests Net income attributable to members of Planet Fitness Holdings, LLC $ See accompanying independent auditors’ report. 38 Variable interest entities Eliminations Total 8,822 28,020 4,945 — — — — — — 8,822 28,020 4,945 41,787 — — 41,787 21,480 6,030 6,944 2,609 — — 44 24 — (80) (29) — 21,480 5,950 6,959 2,633 37,063 68 (109) 37,022 4,724 (68) 109 4,765 100 (2,496) (125) — (65) 158 — 31 (158) 100 (2,530) (125) (2,521) 93 (127) (2,555) 2,203 25 (18) 2,210 63 (7) — 2,140 32 (18) — 32 2,140 — 56 2,154 32 (18) 2,122 PLANET FITNESS HOLDINGS, LLC Consolidating Statement of Operations Period from January 1, 2012 to November 7, 2012 (Amounts in thousands) Planet Fitness Holdings and Subsidiaries Net revenues: Membership fees Equipment and assembly Franchise revenue $ Variable interest entities Eliminations Total 37,918 52,691 24,883 2,442 — — — — (34) 40,360 52,691 24,849 115,492 2,442 (34) 117,900 41,019 26,639 5,266 19,717 45 2,030 558 276 — (288) (148) (518) 41,064 28,381 5,676 19,475 (452) (615) (854) (1,921) Total operating costs and expenses 92,189 2,294 (1,808) 92,675 Income from operations 23,303 148 1,774 25,225 987 (2,293) 9 — (205) 1,072 (90) 249 (1,052) 897 (2,249) 29 Total other expense, net (1,297) 867 (893) (1,323) Income before taxes 22,006 1,015 881 23,902 656 — — 656 21,350 1,015 881 23,246 — 1,015 — 1,015 21,350 — 881 22,231 Total revenues, net Operating costs and expenses: Cost of revenue Club operations Depreciation and amortization Selling, general and administrative Gain on sale of subsidiaries and variable interest entities Other income (expense), net: Interest income Interest expense Other income (expense) Provision for state income taxes Net income Less net income attributable to noncontrolling interests Net income attributable to members of Planet Fitness Holdings, LLC $ See accompanying independent auditors’ report. 39 PLANET FITNESS HOLDINGS, LLC Consolidating Statement of Operations Year ended December 31, 2011 (Amounts in thousands) Planet Fitness Holdings and Subsidiaries Net revenues: Membership fees Equipment and assembly Franchise revenue $ Variable interest entities Eliminations Total 19,138 77,148 21,873 20,360 1,664 288 (103) (3,591) (341) 39,395 75,221 21,820 118,159 22,312 (4,035) 136,436 59,800 15,002 2,174 12,416 1,306 13,913 2,385 2,843 (3,074) (1,125) (354) (254) 58,032 27,790 4,205 15,005 — (234) Total operating costs and expenses 89,392 20,213 (4,807) 104,798 Income from operations 28,767 2,099 772 31,638 792 (2,040) 11 1 (848) 1,088 (182) 386 (811) 611 (2,502) 288 Total other expense, net (1,237) 241 (607) (1,603) Income before taxes 27,530 2,340 165 30,035 757 (10) — 747 26,773 2,350 165 29,288 — 2,350 — 2,350 26,773 — 165 26,938 Total net revenues Operating costs and expenses: Cost of revenue Club operations Depreciation and amortization Selling, general, and administrative Gain on sale of subsidiaries and variable interest entities Other income (expense), net: Interest income Interest expense Other income (expense) Provision for state income taxes Net income Less net income attributable to noncontrolling interest Net income attributable to members of Planet Fitness Holdings, LLC $ See accompanying independent auditors’ report. 40 — (234) PLANET FITNESS® EXHIBIT “F” TO THE DISCLOSURE DOCUMENT FRANCHISE AND CORPORATE LOCATIONS If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system. FDD – 2014 14877235.8 04/17/14 F-1 PLANET FITNESS® FRANCHISE LOCATIONS (as of December 31, 2013) Alabama Harry Dodich Al Pearsall 28260 Highway 98 Daphne, AL 36526 251-621-7800 Steve Goguen Harry Dodich John Harvard Lee Windham 900B Schillinger Road Mobile, AL 36695 251-776-5600 Steve Goguen John Havard Lee Windham Samuel Mitchell 1800 McFarland Blvd. Tuscaloosa, AL 35404 205-752-7878 Lee Anderson W. Lee Brumfield 3121 Ross Clark Circle #1 Dothan, AL 36303 334-792-1701 Mark Manion 809 Beltline Rd. SW, Ste. B Decatur, AL 35601 256-724-0979 Alaska Roger Bates Pete Peterson 1920 W. Diamond Blvd. Anchorage, AK 99515 907-341-5500 Steve Goguen Sam Mitchell Anita Mitchell 308 University Blvd. S. Mobile, AL 36609 251-414-2700 Gerald Kennedy 1839 Montgomery Highway Suite 40 Birmingham, AL 35244 205-444-2282 Harry Dodich Steve Goguen 5363 Highway 90 W. Mobile, AL 36619 251-660-1700 Steve Goguen John Havard Lee Windham Samuel Mitchell 151 North Memorial Drive Prattville, AL 36067 334-36509494 John Landry 9118 Parkway East Birmingham, AL 35206 205-208-0414 John Landry 168 Inverness Plaza Birmingham, AL 35242 205-408-0020 Roger Bates Michael Joseph 702 East Benson Blvd. Suite One Anchorage, AK 99503 907-444-4400 Roger Bates Michael Joseph 1255 Airport Way Fairbanks, AK 99701 (907) 374-4441 Steve Goguen 3530 Eastdale Circle Montgomery, AL 36117 334-271-1600 Mark Manion 8050 Highway 72 West Madison, AL 35758 256-724-0990 Roger Bates Michael Joseph 3101 Penland Parkway Anchorage, AK 99508 907-868-7600 FDD – 2014 14877235.8 04/17/14 F-2 PLANET FITNESS® Arizona Steven W. Thomas Las Palmillas Shopping Center 1232 Caste Dome Ave. Yuma, AZ 85365 Tom Bock Kevin Kelly John Williams 320 East Bell Rd. North Phoenix, AZ 85022 602-588-4200 Tom Bock John Williams Kevin Kelly 7333 W. Thomas Rd., Ste. 78 Phoenix, AZ 85033 623-344-0600 Steven Thomas 3003 W. Apache Trail #1 Apache Junction, AZ 85120 480-845-1021 Arkansas Brandon Sebald Buck Ortega 100 N. Dixieland Road Rogers, AR 72756 479-636-1111 California GY Maw Anaheim 02 LLC Matt Bailey Jeremy Butler Robert Marchesi Kenneth Woetzel 2280 E. Lincoln Ave. Anaheim, CA 92806 714-635-5050 PF Daly LLC Roger Bates Pete Peterson Michael Joseph 2945 Junipero Serra Blvd. Daly City, CA 94014 650-994-9080 FDD – 2014 14877235.8 04/17/14 Tom Bock Kevin Kelly John Williams 1420 S. Arizona Ave. Chandler, AZ 85286 480-963-4200 Tom Bock Kevin Kelly John Williams 2643 East Broadway Rd. Mesa, AZ 85204 480-219-8484 Tom Bock Kevin Kelly John Williams Eric Goodwin 10525 N. Oracle Road Oro Valley, AZ 85737 520-544-4200 Tom Bock Kevin Kelly John Williams 3114B South McClintock Dr. Tempe, AZ 85282 480-361-4200 Eric Goodwin Tom Bock Kevin Kelly John Williams 4848 North Old Oracle Road Tucson, AZ 85705 520-293-4200 Steven Thomas 1841 Arizona 69, Ste. 112 Prescott, AZ 86301 928-350-8832 Brandon Sebald 3300 Grove Drive Fayetteville, AR 72704 479-935-4848 Brandon Sebald 4093 West Sunset Avenue Springdale, AR 72762 479-419-5533 SS Minnow LLC Roger Bates Pete Peterson 214 B Southland Mall Dr. Hayward, CA 94545 510-264-1800 SS Minnow LLC Roger Bates Pete Peterson 6599 Commerce Blvd. Rohnert Park, CA 94928 707-585-8900 PF West LLC Roger Bates Pete Peterson Michael Joseph 39161 Farwell Drive Fremont, CA 94545 510-797-5000 Randy Stinchfield Tina Stinchfield 1131 Creston Road, Ste. 97 Paso Robles, CA 93446 804-239-4023 F-3 PLANET FITNESS® California (cont.) Robert L. McLennan 350 Sansome Street San Francisco, CA 94104 415-433-3033 Mike Peterson 1620 West Katella Ave. Anaheim, CA 920 714.638.8181 Ben Heiderscheidt 2401 E. Orangeburg Avenue Modesto, CA 95355 209-572-2921 Farrukh Zafa 2041 E. Highland Avenue San Bernardino, CA 92404 589-490-7944 Shawn M. Bishop Dexter Lanigan Joseph N. Bernatowicz 1480 N. Azusa Ave., Ste. A Covina, CA 91722 626-332-2190 Dennis Griffin Stephen Griffin Arrien Schiltkamp 4130 Oceanside Blvd. Oceanside, CA 92056 760-941-4855 Ben Heiderscheidt 2045 W. Briggsmore Ave., Ste. B-14 Modesto, CA 95350 209-341-2500 John Mack Robert Bocek Aminderjit Gakhal 570 S. Mt. Vernon Ave. San Bernardino, CA 909-885-8883 Jeffrey Majkrzak Scott Majkrzak Alex Mortensen 12625 Frederick Street Moreno Valley, CA 92553 951-697-8445 Lawrence C. Luckwaldt 1717 N. Hacienda Blvd. La Puente, CA 91744 626-917-0300 Lee J. Shamaley, Jr. 2516 Airport Road Colorado Springs, CO 80910 719-632-2500 Adam Pullman Michael Pullman Evan Podob 2255 North Main St., Ste. 18 Longmont, CO 80501 303-776-6800 Ben Heiderscheidt 1175 West March Lane Stockton, CA 95207 209-477-7800 Colorado Clark Stevens 3265 S. Wadsworth Blvd. Lakewood, CO 80227 303-984-0558 PF CalAlaska LLP Roger Bates Michael Joseph 7016 Sunrise Blvd Citrus Heights, CA 95610 916.727.3300 Shawn M Bishop Dexter Lanigan Joseph N. Bernatowicz 500 East Manchester Blvd. Inglewood, CA 90301 310-330-1190 Shawn Bishop Dexter Lanigan Joseph N. Bernatowicz 7010 Alameda Street Huntington Park, CA 90255 323-581-2600 Lee J. Shamaley, Jr. 5849 Constitution Avenue Colorado Springs, CO 80915 719-573-4300 FDD – 2014 14877235.8 04/17/14 F-4 PLANET FITNESS® Connecticut ECP-PF: CT Operations, Inc. 26 Pearl Street Norwalk, CT 06850 203-846-4588 ECP-PF: CT Operations, Inc. 400 Boston Post Road Orange, CT 06477 203-795-9848 Jerry Mastrangelo Mike Katz, Sr. 469 East Main Street Branford, CT 06010 203-488-8804 ECP-PF: CT Operations, Inc. 1186 New Haven Road Naugatuck, CT 06770 203-723-4058 Steve Rondeau John Tucker 10 East Street East Granby, CT 06026 860-844-1235 ECP-PF: CT Operations, Inc. 160 Amity Road New Haven, CT 06515 203-392-3558 Mike Katz Jerry Mastrangelo 705 Boston Post Rd. Guilford, CT 06437 203-458-8822 Mike Katz Jerry Mastrangelo 150 Universal Dr North Haven, CT 0643 203.789.1474 FDD – 2014 14877235.8 04/17/14 Craig Perkins 139 Hazard Avenue Enfield, CT 06082 860-749-6443 ECP-PF: CT Operations, Inc. 25 Lindeman Ddrive Trumbull, CT 06611 203-372-7995 Jerry Mastrangelo Mike Katz, Sr. 35 Marne Street Hamden, CT 06514 203-281-7213 Jerry Mastrangelo Mike Katz 836 Foxon Road East Haven, CT 06513 203-469-7763 ECP-PF: CT Operations, Inc. 85 Harborview Road Stamford, CT 06902 203-921-1322 ECP-PF: CT Operations, Inc. 784 River Road Shelton, CT 06484 203-944-9990 ECP-PF: CT Operations, Inc. 316 Courtland Avenue Stamford, CT 06906 203-358-9099 ECP-PF: CT Operations, Inc. 179 Boston Post Road Milford, CT 06460 203-301-0180 ECP-PF: CT Operations, Inc. 1001 Poquonnock Road Groton, CT 06340 860-449-0011 ECP-PF: CT Operations, Inc. 760 Bridgeport Ave. Shelton, CT 06484 203-225-7570 ECP-PF: CT Operations, Inc. 111 Black Rock Turnpike Fairfield, CT 06825 203-337-6055 ECP-PF: CT Operations, Inc. 454 South Broad Street Meridan, CT 06450 203.235.7300 ECP-PF: CT Operations, Inc. 3087 Berlin Turnpike Newington, CT 06111 ECP-PF: CT Operations, Inc. 99 Farmington Avenue Bristol, CT 06010 860-540-0081 860-667-1995 F-5 ECP-PF: CT Operations, Inc. Waterfall Place 40 Boston Post Road Waterford, CT 06385 860-447-2279 ECP-PF: CT Operations, Inc. 855 Lakewood Road Waterbury, CT 06704 203-757-8032 PLANET FITNESS® Connecticut (cont.) ECP-PF: CT Operations, Inc. 691 Main Street Torrington, CT 06790 860-201-0033 ECP-PF: CT Operations, Inc. 1135A Tolland Turnpike Manchester, CT 06040 860-783-5980 ECP-PF: CT Operations, Inc. 42 Town Street Norwich, CT 06360 860-859-1365 ECP-PF: CT Operations, Inc. 110 Federal Road Danbury, CT 06811 203-300-5185 Ron Pepe Joe Pepe 710 Hartford Turnpike Dayville, CT 06241 860-341-2468 Delaware Sean Knapp 143 Marrows Road Newark, DE 19713 302-392-3558 Florida Eric Dore Shane McGuiness 280 South State Rd. #434 Altamonte Springs, FL 32714 407-786-7373 Glenn Dowler 10301 Southern Blvd. Royal Palm Beach, FL 33411 561-333-3833 Eric Dore Shane McGuiness 5130 South Conway Rd. Orlando, FL 32812 407-982-3204 John Wash 204 Sausalito Blvd. Casselberry, FL 32707 407-332-4496 Ryan Rondina Mark Melancon 2650 Tamiami Trail E. Naples, FL 34112 239-417-1010 Eric Dore 19 Alafaya Woods Blvd. Oviedo, FL 32765 407-365-4927 Eric Dore 4020 13th Street Saint Cloud, FL 34769 407-957-1846 Jim Page Brian Pinga 1980 Wells Road Jacksonville, FL 32073 904-272-2224 Eric Dore 1569 W Orange Blossom Trail Apopka, FL 32712 407-410-0373 Dave Weber Gary Bianucci Kevin Gelnaw 910 South Atlantic Avenue Ormond Beach, FL 32176 386-677-4000 FDD – 2014 14877235.8 04/17/14 F-6 Eric Dore 12471 South Orange Blossom Trail Orlando, FL 32837 407-240-9177 Eric Dore 3005 W. Lake Mary Blvd. Suite 124 Lake Mary, FL 32746 407-992-9134 Steve Rondeau John Tucker Glen Dowler 9910 Alt A1A Palm Bch. Gardens, FL 33410 561-776-8930 John Wash 345-B East New York Ave. Deland, FL 32724 386-873-4911 Mike Walker and Thomas Lelievre 1802 US Route 1 Rockledge Square Rockledge, FL 32955 321-433-1331 PLANET FITNESS® Florida (cont.) Eric Dore 860 Saxon Blvd. Orange City, FL 32763 386-228-2700 Mark Melancon Ryan Rondina 15501 McGregor Blvd. Fort Myers, FL 33908 239-433-1616 Eric Dore 3203 East Colonial Drive, Unit E20 Orlando, FL 3203 407.982.3173 Eric Dore 505 S. Chicksaw Trail Orlando, FL 32825 407-473-6084 Eric Dore 6201 North US Highway 1 Cocoa, FL 32927 321-806-1626 Eric Dore 8956 Turkey Rd., Ste. 1000 Orlando, FL 32819 407-956-2546 Bryan Pappas Peter Fregeau Mike Murray 2477 US Highway 1 St. Augustine, FL 32086 904.794.0559 Dave Dorr Brian MacDonald Casey Fisher 30701 US Highway 19N Palm Harbor, FL 34684 727-786-1915 FDD – 2014 14877235.8 04/17/14 Mike Walker Thomas Lelievre 1415 South Nova Rd. Daytona Beach, FL 32114 386-253-4300 Bill Shorr 840 N. Appollo Blvd. Melbourne, FL 32935 321-242-7900 Glenn Dowler Scott Dowler 1295 US Highway 1, Ste. 3 Vero Beach, FL 32960 772-564-0234 Eric Dore 10908 West Colonial Drive Ocoee, FL 34761 407-905-3370 Glenn Dowler Scott Dowler Heather Robinson 2210 SE Federal Highway Stuart, FL 34994 772-287-8909 Eric Dore 5920 Metropolis Way Orlando, FL 32811 407-473-6086 Glenn Dowler Scott Dowler Heather Robinson 6666-2 South Federal Highway Port Saint Lucie, FL 34952 772-460-4994 Eric Dore 3831 W. Vine St Kissimmee, FL 34741 407.583.4035 Casey Fischer Brian MacDonald 4802 Gunn Highway, Ste. 140 Tampa, FL 33624 813-986-0088 John Wash 6208 US Highway 98 North Lakeland, FL 33809 863.853.3322 Eric Dore 5998 Mobile Highway Pensacola, FL 32526 850-665-2262 F-7 John Wash 3233 SE Maricamp Rd. #500 Ocala, FL 34471 352-624-7301 Bryan Pappas Peter Fregeau Mike Murray 2771 Monument Road Jacksonville, FL 32225 904-997-2071 Steve Joanis James Shovlin 6605 Manatee Avenue Bradenton, FL 34209 941.896.8833 Brandon Sebald Jonathan Norman 1630 NE 163rd Street North Miami Beach, FL 33162 305.947.4100 Glenn Dowler 3225 SW Port St. Lucie Blvd. Port St. Lucie, FL 34953 772-807-1290 PLANET FITNESS® Florida (cont.) Dave Bidwell Scott Linsky 8350 W. Hialeah Gardens Blvd. Hialeah Gardens, FL 33018 305-704-3011 Brian Pinga Jim Page 7628 103rd Street Jacksonville, FL 32210 904-900-1651 Dave Bidwell Scott Linsky 850 Ives Dairy Road Miami, FL 33179 609-276-8635 David Bidwell Scott Linsky 18620 NW 67th Avenue Miami, FL 33015 305-621-0400 Bryan Pappas Peter Fregeau Mike Murray 8661 Old Kings Road South Jacksonville, FL 32217 904-240-4032 Joe Anson 2210 NW 13th Street Gainesville, FL 32609 352-505-6685 David Bidwell Scott Linsky 15725 SW 72nd Street Miami, FL 33193 305-752-5551 Bill Merckel 7310 W. Waters Avenue Tampa, FL 33634 813-999-4980 Georgia Matt and Laura Branyan Busbee Dyer 1455 Pleasant Hill Drive Suite 701 Lawrenceville, GA 30044 770-279-2257 Stanley DeMartinis, Jr. 2460 Wesley Chapel Crossing Rd., Ste. 25C Decatur, GA 30035 781-248-8076 Eric Dore Shane McGuiness 245 Tom Hill Sr. Blvd. Macon, GA 31210 FDD – 2014 14877235.8 04/17/14 Kathleen Killeavy Eugene Killeavy 160 Malabar Road Palm Bay, FL 32907 Eric Dore 6241 North Davis Highway, Ste. B Pensacola, FL 32504 850-389-4747 Bryan Pappas Peter Fregeau Mike Murray 14444 Beach Boulevard Jacksonville, FL 32250 904-240-4032 Dave Bidwell Scott Linsky 3300 Northeast 10th Court Homestead, FL 33303 609-276-8635 Eric Sousa Robert & Jeanne Stamant 9023 Little Road, Unit 105 New Port Richey, FL 34654 727-863-5292 Bryan Pappas Peter Fregeau Mike Murray 7 Old Kings Road North Palm Coast, FL 32137 386-283-4973 Eric Dore 4526 South Orange Blossom Trail Orlando, FL 32839 407-956-2521 John Wash 3545 Peachtree Industrial Blvd Duluth, GA 30096 770-622-7797 John Wash 3161 Cobb Parkway Kennesaw, GA 30152 770-975-7179 Stanley DeMartinis, Jr. 3535 Chamblee Tucker Rd. Atlanta, GA 30341 770-452-8373 Stanley DeMartinis, Jr. 7965 Tara Boulevard Jonesboro, GA 30236 770-478-0050 Stanley DeMartinis, Jr. 5211-B Memorial Drive Stone Mountain, GA 30083 404-299-2000 Stanley DeMartinis, Jr. Guerino Ciampi 4166 Buford Highway at Plaza Fiesta Atlanta, GA 30345 404-315-7999 F-8 PLANET FITNESS® Georgia (cont.) John Craig Jane Craig Roger Amato 130 John W. Morrow Jr. Parkway Gainesville, GA 30501 678-971-5558 Idaho Keith Larsen 6843 Strawberry Glen Suite 2-150 Garden City (Boise), ID 83714 208-853-8200 Illinois Richard Pease Brian Mikol Martin Baroff Paul Alfano Michael Sweeney 1163 E. Ogden Avenue Naperville, IL 60563 630-416-7200 Anthony Rufo 7300 Dempster Street Morton Grove, IL 60053 847-983-4022 William Whitmore Steve Colucci 49-53 Ludwig Drive Fairview Heights, IL 62208 618-213-7303 Anthony Rufo 2560 North Harlem Ave. Elmwood Park, IL 60707 610-357-3863 FDD – 2014 14877235.8 04/17/14 John Wash 3315 South Cobb #1 Smyrna, GA 30080 678-305-0606 Eric Dore 816 Russell Parkway Warner Robins, GA 31088 478-225-0187 Keith Larsen 5010 W. Overland Road Boise, ID 83705 208-426-0102 Richard Pease Brian Mikol Martin Baroff Paul Alfano Michael Sweeney 1445 West Lake Street Addison, IL 60101 630-953-4961 Scott Majkrzak Alex Mortensen 3624 Avenue of the Cities Moline, IL 61265 309-764-9500 Bryan Rishforth 1961 N. Mannheim Road Melrose Park, IL 60160 708-344-6400 Bryan Rishforth 4905 W. North Avenue Chicago, IL 60639 773-384-7100 Anthony Rufo 2300 South Cicero Ave. Cicero, IL 60804 610-357-3863 Anthony Rufo 4327-4331 S. Pulaski Chicago, IL 60632 F-9 Anthony Rufo 751 West Golf Road Des Plaines, IL 60016 847-258-3466 Bryan Rishforth 9500 S. Western Avenue Evergreen Park, IL 60805 708-425-9500 PLANET FITNESS® Illinois (cont.) Bryan Rishforth 3120 N. Pulaski Road Chicago, IL 60641 773-685-4140 Timothy Lennon Mike Dobrynio 2002 Glen Park Drive Champaign, IL 61820 Anthony Rufo 2410 Main Street Evanston, IL 60202 847-328-3333 Timothy Lennon Michael Dobrynio 2420 S. Alpine Road Rockford, IL 61108 815-708-6707 Michael Dobrynio Timothy Lennon 105 N. Main Street East Peoria, IL 61611 309-699-0081 Bryan Rishforth 8331 S. Holland Road Chicago, IL 60620 773-488-8848 Anthony Rufo 9503 South Cicero Avenue Oak Lawn, IL 60453 708-529-3237 Mike Horan Brain Taggart Mark Prasalowicz 2852 Plainfield Road Joilet, IL 60435 815-577-2600 Michael Dobrynio Jill Dobrynio 1280 N. Kennedy Drive Kankakee, IL 60901 815-614-3937 Michael Dobrynio Timothy Lennon 6333B N. Second St. Loves Park, IL 61111 815-633-7202 Indiana Michael Campagnolo 8811 Hardegan Street Indianapolis, IN 46227 317.893.2775 Robert Baker 2302 W. 86th Street Indianapolis, IN 46260 317-731-5926 Michael Campagnolo 10429 E. Washington St. Indianapolis, IN 46229 317-890-9800 FDD – 2014 14877235.8 04/17/14 Anthony Rufo 3512-14 E. 118th Street Chicago, IL 60617 773-359-2300 Chris Kouros Peter Kouros Stephen Leverett Jim Lekatsos 1840 Douglas Road Montgomery, IL 60538 Bryan Rishforth 5129 W. Belmont Avenue Chicago, IL 60641 773-481-2101 Timothy Lennon Michael Dobrynio 1756 Wabash Avenue Springfield, IL 62704 217-546-4910 Anthony Rufo 2558 West Cermak Road Chicago, IL 60608 773-523-2345 Bryan Rishforth 10808 South Doty Avenue Chicago, IL 60628 773-568-1010 Luke Urban 152 S. Gary Ave., Ste. 101 Bloomingdale, IL 60108 630-582-7800 Robert Baker 2437 East Main Street, Suite 150 Plainfield, IN 46468 317.837.1629 Michael Campagnolo 5239 East Thompson Road Indianapolis, IN 46237 317-780-0100 Rick Kueber 860 South Green River Rd. Evansville, IN 47715 812-477-2199 F - 10 Rick Kueber David Kueber 516 E. Lewis & Clark Parkway Clarksville, IN 47129 812-284-4000 Ron Huling 6360 West Jefferson Blvd. Fort Wayne, IN 46804 260-267-9801 Michael Campagnolo 2121 Sagamore Parkway Lafayette, IN 47905 765-446-6600 PLANET FITNESS® Indiana (cont.) Robert Baker Alex Perchuk 5206 West 38th Street Indianapolis, IN 46254 317-328-0301 Rick Kueber 3527 Grantline Road New Albany, IN 47150 821-542-6492 Ron Huling 4530 Maplecrest Road Fort Wayne, IN 46835 260-485-7979 Michael Campagnolo 2160 East Markland Avenue Kokomo, IN 46901 765-868-5000 Rick Kueber 3477 West Third St. Bloomington, IN 47404 812-333-7699 Ron Huling 424 W. McKinley Ave. Mishawaka, IN 46545 574-255-9000 Rick and Kristine Raimondo 1010 US Highway 41 Schererville, IN 46375 219-629-9316 Robert Baker Alex Perchuk 4366 S. Scatterfield Rd. Anderson, IN 46013 765-462-4000 Chris Klebba 3253 Northview Drive Elkhart, IN 46514 574-262-8222 Iowa Scott Majkrzak Alex Mortensen 3221 SE 14th St Des Moines, IA 50320 515.528.2329 Scott Majkrzak Alex Mortensen 2080 E. Ridgeway Ave. Waterloo, IA 50702 319-232-2732 Scott Majkrzak Alex Mortensen 902 West Kimberly Drive Davenport, IA 52806 503-391-1080 Edward Alberts 1751 Madison Avenue Council Bluffs, IA 51503 712-256-7300 Scott Majkrzak Alex Mortensen 3771 86th Street Urbandale, IA 50322 515-276-2225 Chris Sutherland 6592 E. Central Avenue Wichita, KS 67206 316-719-3860 Chris Sutherland 2021 N. Amiden St., Ste. 1500 Wichita, KS 67203 316-440-4808 John Clancy 82 Carothers Road Newport, KY 41071 859-291-7500 Rick Kueber 1111 North Dixie #17 Elizabethtown, KY 42701 270-506-2102 Kansas Tammy Torres Jerome Torres 11320 W. 135th Street Overland Park, KS 66221 913-402-0999 Chris Sutherland 2350 N. Maize Road Wichita, KS 67205 316-440-5520 Kentucky Rick Kueber David Kueber 7450 Jefferson Boulevard Louisville, KY 40219 502-964-7555 FDD – 2014 14877235.8 04/17/14 F - 11 PLANET FITNESS® Kentucky (cont.) John Clancy 1650 Bryan Station Road Lexington, KY 40505 859-368-7223 Louisiana Kevin Windham Dorothy Windham 3559B Ambassador Caffery Pkwy Lafayette, LA 70503 337.412.6972 Kevin Windham Dorothy Windham Mike Beaton 1800 NE Evangeline Thruway, Ste. OJ-B Lafayette, LA 70501 337-269-5193 Brandon Robinson Jeff Babineaux Collin Bercier Brandon Hargrave 2255 South MacArthur Drive Alexandria, LA 71301 Maine Steve Collucci William Whitmore 8 Thomas Drive Westbrook, ME 04092 207-773-7774 Patrick Welch Linda Monmacy 600 Turner Street Auburn, ME 04210 207-330-3000 Steve Collucci William Whitmore 265 Civic Center Dr., Ste. 2 Augusta, ME 04330 207-623-0023 Steve Collucci William Whitmore 9 Amato Drive Windham, ME 04062 207-892-7400 Rick Kueber 3560 South Hurstbourne Parkway Louisville, KY 40299 502-499-4995 Kevin Windham Dorothy Windham Mike Beaton 9620 Florida Boulevard Baton Rouge, LA 70815 225-771-8809 Brandon Robinson Jeff Babineaux Collin Bercier Brandon Hargrave 131 Gause Blvd. West Slidell, LA 70460 985-288-5787 Brandon Robinson Connie Hargrave 4068 Ryan Street Lake Charles, LA 70605 337-564-6781 Patrick Welch 420 Alfred Road Biddeford, ME 04005 207-284-9924 Dan Pullen Carolyn Townsend 31 Gurnet Road Brunswick, ME 04011 207-725-2944 Kris Glidden 635 Broadway Bangor, ME 04401 207-262-5800 Steve Collucci William Whitmore 145 Marginal Way Portland, ME 04101 207-879-2200 Kris Glidden 60 JFK Plaza 190 Kennedy Memorial Dr. Waterville, ME 04901 207-873-0040 Gary Sinopoli Robert Siragusa Michael Hurring Westside Shopping Center North, Ste. 230 Gretna, LA 70053 504-361-7597 Kris Glidden 1364 Main Street Sanford, ME 04073 207-324-2100 Maryland FDD – 2014 14877235.8 04/17/14 F - 12 PLANET FITNESS® C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 6836 Racetrack Road Bowie, MD 20715 301-469-9119 Dharmesh Shah 597 E. Ordnance Rd. Store A Glen Burnie, MD 21060 410-766-9340 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 1080 West Patrick Street Frederick, MD 21703 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 1111 Maryland Avenue Hagerstown, MD 21740 Dharmesh Shah 1405 Merritt Blvd. Baltimore, MD 21222 410-282-4955 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 5425 Baltimore National Pike Catonsville, MD 21229 410.975.4850 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 8821 Pulaski Hwy Baltimore, MD 21237 410.800.4013 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 11989-A Reisterstown Road Reisterstown, MD 21136 410-702-4321 Dharmesh Shah 3245 Plaza Way Waldorf, MD 20603 301-932-4500 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 8509 Landover Rd Hyattsville, MD 20785 301.246.2890 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 255 Muddy Branch Rd Gaithersburg, MD 301.337.7701 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 143-153 Pulaski Highway Elkton, MD 21921 301-698-8110 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 1449 Rock Spring Drive Bel Air, MD 21014 443-360-0600 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 11130 New Hampshire Ave. Silver Spring, MD 20904 240-670-4600 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 3442 Emmorton Road Abingdon, MD 21009 410.809.2593 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 5644 Silver Hill Road District Heights, MD 20747 301.278.8004 Dharmesh Shah 2659-B Annapolis Road Fort Meade, MD 21076 410.519.9340 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 1776 E. Jefferson St., #103 Rockville, MD 20852 FDD – 2014 14877235.8 04/17/14 F - 13 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 13031 Wisteria Drive Germantown, MD 20874 240-720-7444 C. Victor Brick Lynne Brick Charles Cavolo, IV Glenn Norris 6100 Greenbelt Rd., Store 201 Greenbelt, MD 20770 240-542-9644 C. Victor Brick 9644 Fort Meade Road Laurel, MD 20707 240-459-8000 PLANET FITNESS® Maryland (cont.) C.Victor Brick 125 West College Ave. Salisbury, MD 21801 443-736-2381 Massachusetts Steve Rondeau John Tucker 90 Carando Drive Springfield, MA 01104 413-788-0448 Joe Rizzo Tom Furdon 108 Clematis Avenue Waltham, MA 02453 781-891-6002 Dave Rossborough Tommy Adams 101 Carver Road Plymouth, MA 02360 508-732-8900 Steve Rondeau John Tucker 1464 Riverdale Street West Springfield, MA 01089 413-731-7555 Bob Hathaway 41 Pleasant Street Norton, MA 02766 508-266-7400 Brian Kablik Jonathan Epstein Bill Whelan 100 Boston Turnpike Road Shrewsbury, MA 01545 508-755-4110 Brian Kablik Jonathan Epstein Bill Whelan 235 Boston Post Rd. West Marlborough, MA 01752 508-786-3000 FDD – 2014 14877235.8 04/17/14 Chad Fitton 975 Merriam Ave., Ste. 139 Leominster, MA 01453 978-537-0859 Stephen Doroff 69 Haverhill Road Amesbury, MA 01913 978-388-4636 Dave Rossborough Tommy Adams 944 Middle Street Weymouth, MA 02188 781-331-3939 John Tucker Steve Rondeau 335 Russell Street Unit A-180 Hadley, MA 01035 413-582-9900 Joe Rizzo Tom Furdon 17 Long Pond Drive South Yarmouth, MA 02664 508-760-2300 Dave Rossborough Tommy Adams 500 Neponset Avenue Dorchester, MA 02122 617-287-8885 Steve Rondeau John Tucker 1183 Memorial Drive Chicopee, MA 01020 413-593-5566 William Cassotis William Fidler 184 West Boylston Street Unit 8 West Boylston, MA 01583 508-835-2551 Steve Rondeau John Tucker 10 Turkey Hill Road Belchertown, MA 01007 413-323-1003 Brian Kablik Jonathan Epstein Bill Whelan 418 Walpole Street Norwood, MA 02062 781-762-3555 Joe Rizzo 146 South Main Street Milford, MA 01757 508-473-5522 F - 14 Chad Fitton 140 Taunton Avenue Seekonk, MA 02771 508-336-2266 Stanley DeMartinis, Sr. Stanley DeMartinis, Jr. Joseph Galante 175 McClellan Highway East Boston, MA 02128 617-569-2020 Tim Kurtz Jeannette Bowler Seth Libert 40 Ray Avenue Burlington, MA 01803 781-229-9999 PLANET FITNESS® Massachusetts (cont.) Steve Rondeau John Tucker 690 Merrill Road Pittsfield, MA 02101 413-445-5100 Richard Pease Brian Mikol Michael Sweeney Paul Alfano Martin Baroff 355 Middlesex Avenue Wilmington, MA 01187 978-658-5645 Blake Road Corporation 90 River Street Mattapan, MA 02126 617-298-0055 Brian Kablik Bill Whelan Jon Epstein 166 Grove Street Franklin, MA 02038 508-541-6880 Michael Salzarulo 68 Main Line Drive Westfield, MA 01085 413-568-0578 Tommy Adams 1778 Washington Street Stoughton, MA 02072 781-341-4111 Blake Road Corporation 10 Micro Drive Woburn, MA 01801 781-932-6200 Mike Clark Loretta Sivret 45 Storey Avenue Newburyport, MA 01950 978-462-2500 Bob Hathaway Michael Tepper Raymond Palatino 1 Washington Place Taunton, MA 02780 508-821-3260 Kris Glidden Wayne Ruesswick 710 S. Dartmouth St. Dartmouth, MA 02748 508-991-2920 Mike Clark 40 Jackson St Methuen, MA 01844 978.682.0005 Blake Road Corporation 1100 Revere Beach Parkway Chelsea, MA 02150 617.884.3030 Brian Kablik William Whelan Jonathan Epstein 215 West Central Street Natick, MA 01760 508.319.2000 Mike Clark Loretta Sivret 480 Boston Road Billerica, MA 01821 978-667-5900 FDD – 2014 14877235.8 04/17/14 F - 15 Melissa Janicke Garrett Janicke 860 N. Main Street West Bridgewater, MA 02379 508-584-4348 Blake Road Corporation 795 Eastern Avenue Malden, MA 02148 781-322-3200 Mike Clark Loretta Sivret 50 Pleasant Street Dracut, MA 01826 778-710-4074 Steve Rondeau John Tucker 80 Main Street North Adams, MA 01247 413-664-7300 Brian Kablik William Whelan Jonathan Epstein 695 Providence Highway Dedham, MA 02026 781-355-4000 David Rossborough Tommy Adams 50 Adams Street Quincy, MA 02169 617.471.3333 Kris Glidden Wayne Ruesswich 657 Quarry Street Fall River, MA 02723 774-888-0032 PLANET FITNESS® Massachusetts (cont.) David Rossborough Tommy Adams 211 Lincoln Stret Hingham, MA 02043 781-740-0404 Mike Clark Loretta Sivret 209 N. Main Street Andover, MA 01810 978-409-2363 Michigan Ron Hurling 2020 Holiday Inn Drive Jackson, MI 49202 517-784-5551 Denis Backos James L. Matthew 33890 S. Gratiot Avenue Clinton Township, MI 48035 586-792-6900 Bryan Rief 29475 W. 7 Mile Road Livonia, MI 48152 248-427-0043 Bryan Rief 27640 Middlebelt Road Farmington Hills, MI 48334 248-987-4800 Bryan Rief WB Pete Hopkins 18450 Ford Road Dearborn, MI 48228 313.982.0224 Chris Klebba 4190 E. Court Street Burton, MI 48509 810-715-1950 FDD – 2014 14877235.8 04/17/14 Jonathan Epstein Brian Kablik Bill Whelan 68 Strafford Street Worcester, MA 01603 508-793-7888 Mike Clark Loretta Sivret 275 Salem Street Reading, MA 01867 781-872-1412 Stanley DeMartinis Guerino Ciampi 270 Charger Street Revere, MA 02151 Chris Klebba 235 East Main Street Northville, MI 48167 248-449-7634 Bryan Rief 288 John Road Troy, MI 48083 248-588-0141 Chris Klebba 75142 Highland Road Waterford, MI 48328 248-599-9795 Bryan Rief 34634 Warren Rd. Westland, MI 48185 734-525-4800 Dennis Backos Jim Matthew 13750 East Eleven Mile Road Warren, MI 48089 586-774-6901 Chris Klebba 31124 Beck Rd Novi, MI 48377 248.668.1100 Ron Hurling 2748 Washtenaw Ave. Ypsilanti, MI 48197 734-390-0139 Chris Klebba 13591 Eureka Road Southgate, MI 48195 734.281.7828 Dennis Backos James L. Matthew 3150 Owen Road Fenton, MI 48430 810-714-8000 F - 16 Bryan Rief WB Pete Hopkins 40752 Ryan Road Sterling Heights, MI 48310 586.274.2310 Dennis Backos James L. Matthew 1007 E. Grand River Ave. Brighton, MI 48116 810-844-5000 Chris Klebba 4408 Stadium Drive Kalamazoo, MI 49008 269-488-8518 PLANET FITNESS® Michigan (cont.) Imad Farhat 701 Joe Mann Blvd. Midland, MI 48642 989-832-7300 Chris Klebba 6463 Canton Center Road Canton, MI 48187 734-737-0380 Bryan Rief 45501 Schoenherr Road Utica, MI 48315 586-726-4840 Bryan Rief 29816 Southfield Road Southfield, MI 48075 248-327-6131 Thomas Purther 5801 W. Saginaw Highway Lansing, MI 48917 248-538-9898 Julian Monterosso Patrick Schafer 12330 James Street Holland, MI 49424 616-396-9696 Bryan Rief 11420 Telegraph Road Taylor, MI 48180 734-947-9119 Imad Farhat 4572 State Street Saginaw, MI 48503 989-799-1300 Bryan Rief 13255 15 Mile Road Sterling Heights, MI 48312 586-825-2020 Chris Klebba 1345 Mall Drive Benton Harbor, MI 49022 269-925-1070 Imad Farhat 4350 24th Avenue, Ste. 504 Fort Gratiot, MI 48059 810-385-7400 Thomas Purther 1982 Grand River Okemos, MI 48864 517-381-8200 Julian Monterosso Patrick Schafer 2500 Henry Street Muskegon, MI 49441 631-747-6541 Bryan Rief 3681 28th Street SE Grand Rapids, MI 49512 616-464-2000 Minnesota Corie Koskie 10606 France Ave S. Bloomington, MN 55431 952.948.1000 Corie Koskie 8026 Brooklyn Blvd Brooklyn Park, MN 55445 763.424.4447 Daniel J. Hill Daniel J. O’Shaughnessy Kevin Murphy 1750 W. Highway 36 Roseville, MN 55113 651-200-3166 John G. Landry, Jr. 12273 Highway 49 Gulfport, MS 39503 228-832-3486 John G. Landry, Jr. 2200A Bienville Blvd. Ocean Springs, MS 39564 228-818-7930 Imad Farhat 4101 East Wilder Road Space B-219 Bay City, MI 48706 989-671-2100 Dennis Backos James Matthew 2350 W. Stadium Blvd. Ann Arbor, MI 48103 734-352-6900 Bryan Rief 3845 Rivertown Parkway Grandville, MI 49418 616-259-7485 Daniel J. Hill Daniel J. O’Shaughnessy Kevin Murphy 1859 Adams Street Mankato, MN 56001 507-540-0500 Mississippi John Landry, Jr. 2390 Pass Road Biloxi, MS 39535 228-388-7930 FDD – 2014 14877235.8 04/17/14 F - 17 PLANET FITNESS® Mississippi (cont.) Christopher Rains Brian Hunt 772 Lake Harbor Village, Ste.1 Ridgeland, MS 39157 601-427-5901 Missouri Tom Carski Kevin Carski 13924 Manchester Road Ballwin, MO 63011 636-527-7277 Tom Carski Kevin Carski 6155 South Grand Blvd. St. Louis, MO 63111 314-351-7600 Nebraska Edward Alberts 2502 S. 133rd Plaza Omaha, NE 68144 402-933-9229 Nevada John Macaluso 1531 W. Sunset Road Henderson, NV 89014 702-458-3900 Michael Joseph Roger Bates 630 N. McCarron Blvd. Sparks, NV 89431 775-356-1000 New Hampshire Slade Williams Carly Levinson 288 North Broadway Salem, NH 03079 603-898-5540 FDD – 2014 14877235.8 04/17/14 Greg Henson 8720 E. 63rd Street Kansas City, MO 64133 816-353-7352 Greg Henson 601 SW US 40 Highway Blue Springs, MO 64014 816-228-7327 Greg Henson 4545B South Noland Road Independence, MO 64055 816-478-7095 Jonathan Lippincott 3239 Missouri Boulevard Jefferson City, MO 65109 573-636-0470 Edward Alberts 5804 Ames Avenue Omaha, NE 68104 402-933-3575 Edward Alberts 5035 South 36th Street Omaha, NE 68107 402-932-3737 Jimmy Nafso Tom Yaldo 3300 Flamingo Road Las Vegas, NV 89121 702-547-1200 Sylvia Nafso 1570 N. Eastern Ave. Las Vegas, NV 89101 702-826-4200 Jimmy Nafso Tom Yaldo 2216 S. Nellis Blvd. Las Vegas, NV 89104 702-43-4200 Stephen Doroff 95A Plaistow Road Plaistow, NH 03865 603-382-0200 F - 18 PLANET FITNESS® New Jersey Anthony Falange 2956 Route 10 West Morris Plains, NJ 07950 973-998-0989 William Cassotis William Fidler 3105 Route 38 Mt. Laurel, NJ 08054 856-722-5950 Anthony Falange 275 Route 10 Succasunna, NJ 07876 862-244-4327 Russ Del Rosso Mike Connell Mike Castellano Mike Rodricks 180 Route 35 South Eatontown, NJ 07724 732.542.4040 Anthony Falange 1734 US Route 46 Woodland Park, NJ 07424 973-837-6139 William Cassotis William Fidler 1560 North Olden Avenue Ewing, NJ 08638 609-943-2548 William Cassotis William Fidler 700 Crescent Ave. Brooklawn, NJ 08030 856-349-7746 Craig Benson 1151 W. St. George Avenue Linden, NJ 07036 908-925-1077 FDD – 2014 14877235.8 04/17/14 Rick Raimondo 2005 Rte. 70 East Cherry Hill, NJ 08003 856-751-9111 Russ Del Rosso Mike Connell Mike Castellano Mike Rodricks 325 Brick Boulevard Brick, NJ 08723 732-477-0499 Anthony Falange 59 Wanaque Avenue Pompton Lakes, NJ 07442 973-513-9241 Anthony Falange 831 Route 10 East Whippany, NJ 07981 973.585.6703 Russ DelRosso 1 South Main St. Toms River, NJ 08757 732-244-2066 Anthony Falange Naomi Falange 600 Getty Avenue Clifton, NJ 07011 973-478-3300 Craig Benson 8101 Tonnelle Avenue North Bergen, NJ 07047 201-295-0000 F - 19 Russ Del Rosso Mike Connell Mike Castellano Mike Rodricks 931 Fischer Blvd. Unit 16 Toms River, NJ 08753 732-270-6300 William Cassotis William Fidler 1460 Blackwood Road Clementon, NJ 08021 856-435-2210 William Cassotis William Fidler Washington Center 415 Egg Harbor Road Ste. 2D Sewell, NJ 08080 856-589-0808 William Cassotis William Fidler 141-A Route 130 South Cinnaminson, NJ 08077 856-499-2695 Randy Vey 39 Reaville Avenue Flemington, NJ 08822 908-237-9911 Russ DelRosso 3499 Route 9, Ste. 1-B Freehold, NJ 07728 732-845-4555 Russell DelRosso 3070 Route 35 South Hazlet, NJ 07730 732-264-8300 PLANET FITNESS® New Mexico ECP-PF: NM Operations, Inc. 1518/1520 Eubank Blvd. Albuquerque, NM 87112 505-559-9000 ECP-PF: NM Operations, Inc. 4665 Irving Blvd NW Albuquerque, NM 87114 505.899.3707 ECP-PF: NM Operations, Inc. 3391 Southern Blvd. SE Rio Ranchero, NM 87124 505-994-2424 ECP-PF: NM Operations, Inc. 3301 Coors Blvd. Albuquerque, NM 87120 505-833-4444 ECP- PF: NM Operations, Inc. 3821 Menaul Blvd. NE #K-1 Albuquerque, NM 87110 505.872.0232 Joseph Bencomo 1300 El Paseo Boulevard Las Cruces, NM 88001 575-524-7867 ECP-PF: NM Operations, Inc. 11200 Montgomery N.E. Albuquerque, NM 87110 505-296-1300 ECP-PF: NM Operations, Inc. 4801 Almeda Blvd. NE Albuquerque, NM 87113 505-797-8767 ECP-PF: NM Operations, Inc. 6211 4th Street NW Albuquerque, NM 87107 505-341-9771 New York Dave Leon 475 Albany Shaker Road Loudenville, NY 12211 518-435-9999 Robert Morris 628 South Main Street Syracuse, NY 13212 315-299-2583 Bob Viani Sharon Lomasney 3675 Albany Post Road Poughkeepsie, NY 12601 845-473-8000 Steve Joanis Ron Emrick 3760 Dewey Avenue Rochester, NY 14616 585-865-9691 John Mahoney Nancy Kouris 250 W. Montauk Highway Hampton Bays, NY 11946 631-723-3174 Bob Morris 4700 Vestal Parkway East Vestal, NY 13850 607-644-9089 Dave Leon 1116 Altamont Avenue Rotterdam, NY 12303 518-355-0023 Dave Leon 1532 Crescent Road Clifton Park, NY 12065 518-688-3001 Alvin Batista 44 School Street Glen Cove, NY 11542 516-656-0515 Sharon Lomasney Bob Viani 1572 Route 9 Wappingers Falls, NY 12590 845-298-8100 Dave Leon 329 Glenmont Road Glenmont, NY 12077 518-439-1200 Bob Viani 810 Miron Lane Kingston, NY 12401 845-336-4500 Bob Viani Sharon Lomasney 30 Gibbs Court Middletown, NY 10940 845-343-9800 Dave Leon 300 Saratoga Road Glenville, NY 12302 518-348-7770 Dave Leon 501 Columbia Turnpike East Greenbush, NY 12144 518-477-5550 John Mahoney 116 Kriemer Avenue Riverhead, NY 11901 631-369-6200 Robert Morris 7 New Hartford Shopping Ctr. New Hartford, NY 13413 315-735-8589 Bob Morris 2318 West Genessee St. Camillus, NY 13219 315-299-2391 FDD – 2014 14877235.8 04/17/14 F - 20 Bob Viani Sharon Lomasney 39 North Plank Road Mid Valley Mall Suite B Newburgh, NY 12550 845-565-4500 Dave Leon 578 Aviation Road Queensbury, NY 12804 518.761.6869 Bob Morris 5801 Bridge Street Dewitt, NY 13057 315-399-5222 PLANET FITNESS® New York (cont.) PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 320 Yonkers Avenue Yonkers, NY 10701 Dave Leon Bob Morris 3333 West Henrietta Rd. Henrietta, NY 14623 585-272-0099 Robert Morris 40 Catherwood Road Ithaca, NY 14850 607-319-0763 John Mahoney 295 Route 25A Rocky Point, NY 11778 631.821.3400 Bob Viani Sharon Lomasney 160 Fairview Avenue Hudson, NY 12534 518-822-8200 Jane Craig John Craig 3339 Chambers Road Horseheads, NY 14845 607-846-3130 Bob Viani Sharon Lomasney 22 Taconic Center Lane Lagrange, NY 12540 845-592-4414 Dave Leon 660 Hoosick Stret Troy, NY 12180 518-390-7268 FDD – 2014 14877235.8 04/17/14 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 82 West 225th Street (West Kingsbridge Rd.) Bronx, NY 10463 Steve Joanis 2002 Glenwood Avenue Oneida, NY 13421 315-361-9100 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 33 Route 304 Nanuet, NY 10954 Steve Joanis 437 State Route 104E, St. 19 Oswego, NY 13126 315.343.9100 Dave Leon Bob Morris 1850 East Ridge Rd Irondequoit, NY 14622 585.544.9213 Dave Leon Bob Morris 78 Spencerport Rd Rochester, NY 14606 585-426-6989 Dave Leon Bob Morris 7493 State Route 96 Victor, NY 14564 585-742-3111 Robert Morris 1222 Arsenal Street Watertown, NY 13601 315-661-6366 Dave Leon Bob Morris 3525 Seneca St West Seneca, NY 14224 716.677.9310 Dave Leon 161 Washington Ave. Extension Albany, NY 12205 518-456-4980 Bob Viani Sharon Lomasney 22 US Highway 6 Port Jervis, NY 12771 845-858-9800 Dave Leon 3065 Route 50 Saratoga Springs, NY 12866 518-886-8828 Jeffrey Innocenti James Innocenti Luigi LaVerghetta 329 Wyckoff Avenue Queens, NY 11385 718-650-6560 F - 21 Bob Morris 822 Black River Blvd. Rome, NY 13340 315-338-0000 Bob Morris 217 Grant Avenue Auburn, NY 13021 315-282-7119 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 3060-70 Westchester Ave. Bronx, NY 10461 PLANET FITNESS® New York (cont.) PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 1775 South Avenue Staten Island, NY 10314 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 317 Lenox Avenue New York, NY 10027 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 33 South Broadway White Plains, NY 10601 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 177 Dyckman Street New York, NY 10040 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 309 East Fordham Road Bronx, NY 10458 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 2480 Grand Concourse Bronx, NY10458 FDD – 2014 14877235.8 04/17/14 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 2228 Church Avenue Brooklyn, NY 11226 718-439-3008 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 591-595 Forest Avenue Staten Island, NY 10310 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 329 Rt. 59 Airmont, NY 10952 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 249 Duffield St Brooklyn, NY 11201 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 2914 3rd Avenue Bronx, NY 10455 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 1780 E. Gun Hill Rd, Bronx, NY10469 F - 22 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 777 Broadway Brooklyn, NY 11206 718-650-6704 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 132-40 Metropolitan Ave. Richmond Hill, NY 11418 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 2241 Westchester Ave. Bronx, NY 10462 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 30-33 Steinway Astoria, NY 11103 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 1001 Central Park Scarsdale, NY 10583 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 856 Remsen Avenue Brooklyn, NY11236 PLANET FITNESS® New York (cont.) PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 2129-2139 White Plains Rd. Bronx, NY 10462 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 158 W. 127th Street Manhattan, NY 10001 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 208 W. 125th Street Harlem, NY 10027 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 33 Lecount Place New Rochelle, NY 10801 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 2040 Forest Avenue Staten Island, NY10310 Dave Leon Bob Morris 4090 Maple Road Amherst, NY 14266 716-253-7676 PFNY, LLC James Innocenti Jeff Innocenti Luigi LaVerghetta 423 West 55th Street Manhattan, NY 10019 212-336-0750 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 1030 Southern Blvd. Bronx, NY 10459 718-326-5839 Dave Leon 101 Towne Square Amsterdam, NY 12010 518-842-2600 Steve Joanis 1900 Empire Blvd. Webster, NY 14580 505-347-4875 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 3799 Broadway New York, NY 10032 212-336-0830 Steve Joanis 5897 South Transit Rd. Lockport, NY 14094 716-201-1753 North Carolina Martin Sinozich 265 Eastchester Drive Suite 135 High Point, NC 27262 336-885-8000 CJ Bouchard Mark Berlaert 5563 Western Blvd. Unit 2 Raleigh, NC 27606 919-852-0008 FDD – 2014 14877235.8 04/17/14 PFNY, LLC Jeffrey Innocenti James Innocenti Luigi LaVerghetta 25 Broadway New York, NY 10004 646-216-3131 John Mahoney 700-60 Patchogue Yaphank Rd. Medford, NY 11763 631-205-1100 PFNY, LLC Gerald Kennedy Nicky Kennedy 212 South New Hope Road Gastonia, NC 28054 704-868-4050 Alex Choquette Shelly Choquette 68A South Kerr Avenue Wilmington, NC 28403 910-772-1331 Gerald Kennedy Nicky Kennedy 2418 North Center Street Hickory, NC 28601 828-322-2200 Denis Rondeau 2200 Coronation Blvd. Charlotte, NC 28227 704-849-4050 F - 23 Jeffrey Innocenti James Innocenti Luigi LaVerghetta 245 Livingston St. Brooklyn, NY 11217 718-650-5901 PLANET FITNESS® North Carolina (cont.) Joe Pepe CJ Bouchard 2001 Widewaters Pkwy Knightdale, NC 27545 919-217-2999 Alex Choquette 6400 Carolina Beach Rd., #2 Wilmington, NC 27545 919-792-7746 Gerald Kennedy 81 McAdenville Road Belmont, NC 28054 704-461-8490 CJ Bouchard 1845 Aversboro Drive Garner, NC 27529 919.773.4131 Gerald Kennedy 180 Concord Commons Place SW Concord, NC 28027 704-786-4050 CJ Bouchard Joseph Pepe Forestville Commons 3121 Leland Drive Raleigh, NC 27616 919-266-0004 Gerald Kennedy 2672 Peters Creek Parkway Winston-Salem, NC 27127 336-788-5777 North Dakota Scott Majkrzak Alex Mortensen Robert Majkrzak 4325 13th Avenue Fargo, ND 58103 701-478-3300 Ohio David DiSabato 3614 Indianola Avenue Columbus, OH 43214 614-262-6004 FDD – 2014 14877235.8 04/17/14 Denis Rondeau 2401 Whitehall Park Dr. Suite 500 Charlotte, NC 28273 704-583-0555 CJ Bouchard 8201 Rowlock Way Raleigh, NC 27613 919-792-9132 Denis Rondeau 7643 Pineville Matthews Road, Suite 26 Charlotte, NC 28226 704.295.1476 Martin Sinozich 838-B South Main St. Kernersville, NC 27824 336.996.9006 Denis Rondeau 10215-B University City Blvd. Charlotte, NC 28213 704-548-2722 CJ Bouchard 4701 Atlantic Ave. Raleigh, NC 27604 919-850-9440 David Hicks 2107 West Roosevelt Blvd. Monroe, NC 28110 704-225-7000 Denis Rondeau 3301 Freedom Drive, Ste. 600 Charlotte, NC 28208 704-398-9228 Martin Sinozich 4640 West Market Street Greensboro, NC 27407 336-856-1212 CJ Bouchard 1271 Cobb Corners Dr Rocky Mount, NC 27804 252.442.5600 Gerald Kennedy 1659 East Dixon Blvd. Shelby, NC 28152 704.600.6550 Gerald Kennedy 335 West Plaza Drive Mooresville, NC 28117 704-230-0909 CJ Bouchard Joseph Pepe 412 S. Main Street Graham, NC 27253 336-350-8498 Scott Majkrzak Alex Mortensen 715 S. Washington Street Grand Forks, ND 58201 701-775-8820 David DiSabato 6550 Riverside Drive Dublin, OH 43017 614-761-2300 F - 24 Matt Glance Chad Fitton 465 Boardman Canfield Rd Youngstown, OH 44512 330.758.1000 PLANET FITNESS® Ohio (cont.) John Cooley 4317 Whipple Avenue, NW Canton, OH 44718 330.493.9855 Armando Sangermano 19332 Detroit Rd Rocky River, OH 44116 440.799.4141 Chad Fitton Matt Glance 1553 W. River Road N. Elyria, OH 44035 440-324-1324 Matt Glance Chad Fitton 6000 Youngstown Warren Rd. Niles, OH 44446 330-349-4038 Randall J. Fenton 691 Richmond Road Richmond Heights, OH 44143 440-461-6200 John Clancy 544 Patterson Drive Fairfield, OH 45014 513.889.4004 Armando Sangermano 5755 Smith Road Brook Park, OH 44142 216-400-7248 Sean Knapp 4892 Airway Road Dayton, OH 45431 937-938-9430 John Clancy 4394 Eastgate Square Drive Cincinnati, OH 45245 513.842.7553 John Clancy 8501 Winton Road Cincinnati, OH 45231 513-407-8134 Bryan Rief 6758 W. Sylvania Ave. Sylvania, OH 43560 419-517-9800 John Cooley 835 Graham Road Stow, OH 44224 David DiSabato 5415 Roberts Road Hilliard, OH 43026 614-771-8900 David DiSabato 1175 Hill Road North Pickerington, OH 43147 614-863-9100 Bryan Rief 3426 Glendale Avenue Toledo, OH 43614 419-380-9000 Thomas Purther David Rubin 12604 Rockside Road Garfield Heights, OH 44125 216-475-7500 Chad Fitton Matt Glance 1503 N. Bechtle Avenue Springfield, OH 45504 937-324-2314 Armando Sangermano III 8443 Day Drive Parma, OH 44129 440-882-3000 Matt Glance Chad Fitton 2155 Village Mall Drive Mansfield, OH 44906 419-709-8194 Sean Knapp 705 Lyons Road Centerville, OH 45459 937-640-3116 Mark Christie Nick Mourgenos 1950 Tiffin Avenue Findlay, OH 45840 419-422-3000 John Clancy 11755 Princeton Pike Cincinnati, OH 45246 513-407-7135 Bryan Rief WB Pete Hopkins 2630 W. Laskey Rd. Toledo, OH 43613 419-472-0200 FDD – 2014 14877235.8 04/17/14 David DiSabato 104 Dillmont Drive Columbus, OH 43235 614-844-6100 John Cooley Brad Wentzel 505 South Avenue Tallmadge, OH 44278 330-630-2666 John Clancy 1075 State Route 28 Milford, OH 45150 513-340-4451 F - 25 PLANET FITNESS® Oklahoma Christina & Jorge Roldan Lee Fisher & Anthony Fisher 5050 South Memorial Tulsa, OK 74145 918-621-1122 Jorge Roldan Anthony Fisher 8401 East 91 Street South Tulsa, OK 74133 918-505-5737 Jeff Majkrzak Scott Majkrzak Alex Mortensen 1101 Garth Brooks Blvd. Yukon, OK 73099 405-350-3100 Oregon Ben Heiderscheidt Octavio Lubrano Kalpana Lubrano 2330 SE 182nd Avenue Portland, OR 97233 503-912-3572 Pennsylvania Bob Kindler Frank Kindler Stephen Kindler 4850 Carlisle Pike Mechanicsburg, PA 17050 717-761-1202 Randy & Bonnie Vey 1405 East Lincoln Highway Levittown, PA 19056 215-959-2900 John Clancy Antone Katbe Anthony Oglesby 4646 Broadway Street Allentown, PA 18104 610-366-1020 Anthony Rufo 825 Bethlehem Pike Flourtown, PA 19031 215-948-3946 FDD – 2014 14877235.8 04/17/14 Christina & Jorge Roldan Lee Fisher &Anthony Fisher 1808 North Elm St. Broken Arrow, OK 74012 918.806.6688 Jeff Majkrzak Scott Majkrzak Alex Mortensen 9118 S. Western Ave., Ste. A Oklahoma City, OK 73139 405-237-3709 Christina & Jorge Roldan Lee Fisher & Anthony Fisher 6925 E. Admiral Place Tulsa, OK 74145 918-933-5390 Trey Canard Kari Canard Kyle Tosh 4202 Northwest Expressway Oklahoma City, OK 73116 405-242-4141 Brian Hooker John Hooker 3801 NW Cache Road Lawton, OK 73505 508-699-7600 Tanner Halton 14755 SW Teal Blvd. Beaverton, OR 97007 503-430-8586 Tanner Halton 2787 Lancaster Dr. NE Salem, OR 97305 503-990-8114 Frank Kindler Bob Kindler 3460 Paxton Street Harrisburg, PA 17111 717-558-9821 Steve Saunders 1319 Millersville Pike Lancaster, PA 17603 717-397-8623 Frank Kindler Bob Kindler 121 Gettysburg Pike Mechanicsburg, PA 17055 717-591-2332 Frank Kindler Bob Kindler 6041 Allentown Blvd. Harrisburg, PA 17112 717-526-6932 Arthur Thomas 3240 Pleasant Valley Blvd. Altoona, PA 16602 814-283-8899 Arthur Thomas 379 North Reading Road Ephrata, PA 17522 717-733-5555 Toni Rufo 9950 E. Roosevelt Blvd. Philadelphia, PA 19115 215-969-1190 F - 26 John Cooley 3050 North Fifth St. Highway Reading, PA 19605 610-929-8000 PLANET FITNESS® Pennsylvania (cont.) Toni Rufo Pete Ruggieri Joe Rufo 23rd and Oregon Avenue Philadelphia, PA 19145 215-551-9000 Frank Kindler Bob Kindler Julie Morrison 1020 Commerce Park Dr. Suite 2A Williamsport, PA 17701 570-567-7579 Steve Saunders 366 Carerra Drive Lancaster, PA 17601 717-560-6560 Toni Rufo 1575 N. 52nd St Philadelphia, PA 19131 215.878.4410 Toni Rufo Richard Petrone Keith Maguire 2641-63 E. York Street Philadelphia, PA 19125 267.639.4851 Anthony Rufo 2920 Springfield Road Broomall, PA 19008 484-420-4676 Anthony Rufo 830 North Lansdowne Avenue Drexel Hill, PA 19026 484-461-1229 Anthony Rufo 6410 Frankford Avenue Philadelphia, PA 19135 267-388-5647 FDD – 2014 14877235.8 04/17/14 Toni Rufo Joseph Rufo Pete Ruggieri County Line Plaza Rte. 113 & County Line Rd. Souderton, PA 18964 215-799-1999 Daniel P. Horan John P. Ringwald 271 Lancaster Avenue Malvern, PA 19335 484-568-5100 Toni Rufo Pete Ruggieri Joe Rufo 1866 Brownsville Rd. Trevose, PA 19053 215-322-4490 Frank Kindler Robert P. Kindler Stephen Kindler Julie Morrison 1186 Walnut Bottom Road Carlisle, PA 17015 717-701-8581 Toni Rufo 501 Adams Avenue Philadelphia, PA 19120 215.342.4411 Frank Kindler 28 Shippensburg Shopping Center Shippensburg, PA 17257 717-530-1435 Toni Rufo 5210 West Baltimore Pike Clifton Heights, PA 19018 610-626-1770 Anthony Rufo 1619 The Fairway Jenkintown, PA 19046 215-277-1265 Chad Fitton Matt Glance 2982 East State Street Hermitage, PA 16148 724-308-6563 Frank Kindler 1695 Lincoln Way East Chambersburg, PA 17201 717-261-9980 Anthony Rufo 5753 Wayne Avenue Philadelphia, PA 19144 267-335-5331 Arthur Thomas 1786A Columbia Ave. Columbia, PA 17512 717-342-2049 F - 27 Pete Ruggieri Toni Rufo Joe Rufo Aston, PA 19014 610-485-0800 Toni Rufo 50 Greenfiled Ave Ardmore, PA 19003 484.416.3017 Frank Kindler 30 Baldwin Blvd. Shamokin Dam, PA 17876 570-884-3430 Bob Viani Sharon Lomasney 609 Pittsburgh Road Uniontown, PA 15401 724-439-3200 PLANET FITNESS® Pennsylvania (cont.) Anthony Rufo 751 Horsham Road Lansdale, PA 19446 267-421-5443 Anthony Rufo 6219 Ridge Avenue Philadelphia, PA 19128 267-428-5700 Chad Fitton Matthew Glance 283 Beaver Valley Mall Monaca, PA 15061 724-728-1100 Rhode Island Tommy Adams Dave Rossborough 1800 Mendon Road Cumberland, RI 02864 401-334-5400 Steve Eddleston 105 Pace Boulevard Warwick, RI 028286 401-828-9820 Chad Fitton Matt Glance 295 Armistice Blvd. Pawtucket, RI 02861 401-725-0055 Steve Eddleston 387 West Fountain Street Providence, RI 02903 401-865-6300 June Siravo Bob Siravo 1222 Warwick Avenue Warwick, RI 02888 401-769-4600 Steve Eddleston 40 Frenchtown Road North Kingstown, RI 02852 401-884-9500 Steve Eddleston 1493 Hartford Avenue Johnston, RI 02919 401-351-5050 Steve Eddleston 445 Putnam Pike Smithfield, RI 02917 401-231-2777 Ann Marie Lukin Steve Lukin 2000 Diamond Hill Rd. Woonsocket, RI 02888 401-432-7408 Bob Hathaway 7531B Garners Ferry Rd Columbia, SC 29209 803.776.5820 David Hicks 2600-D David H. McLeod Blvd. Florence, SC 29501 Bob Hathaway 421 Bush River Road Columbia, SC 29210 803-750-7515 Robert Siravo 101 Verdae Boulevard Greenville, SC 29607 864-627-4008 David Hicks 1200 E. Main Street Spartanburg, SC 29307 864-308-8181 Gerald Kennedy 825 Cross Road Plaza Fort Mill, SC 29708 803-548-4545 Ann Marie Lukin Steve Lukin 780 Washington Street Coventry, RI 02816 401-828-4200 South Carolina Alexander B. Choquette Shelley A. Choquette 2070 Sam Rittenberg Boulevard #776 Charleston, SC 29407 Alexander B. Choquette Shelley A. Choquette 2150 Northwoods Blvd. North Charleston, SC 29406 843-553-2991 Alexander B. Choquette Shelley A. Choquette 1145 Seaboard Street Myrtle Beach, SC 29577 834-444-4335 Alexander B. Choquette Shelley A. Choquette 2300 Church Street Conway, SC 29526 843-365-5550 FDD – 2014 14877235.8 04/17/14 F - 28 PLANET FITNESS® South Dakota Scott Majkrzak Alex Mortenston 1509 West 41st St Sioux Falls, SD 57105 605.330.9990 Tennessee Pat Augustine 6231 Perimeter Dr., Ste. 217 Chattanooga, TN 37421 423-553-8900 Pat Augustine 5425 Highway 153, Bay #10 Hixon, TN 37343 423-870-6077 Victor Brick Shadybrook Plaza 1910 Shady Brook Street Columbia, TN 38401 931-398-5555 Taymax Group Acquisition, LLC 5708 Charlotte Pike Nashville, TN 37209 615-200-7100 Texas Joseph Bencomo 11160 Rojas Drive El Paso, TX 79935 915-590-7867 Robert Baker 7114 Winchester Road Memphis, TN 38125 901-757-3300 Taymax Group Acquisition, LLC 4880 Nolensville Pike Road Nashville, TN 37211 615-333-2888 Victor Brick 57 Carriage House Dr., Ste. 10 Jackson, TN 38305 731-256-3000 Joseph Bencomo 5700 North Mesa El Paso, TX 79912 915-585-7867 Joseph Bencomo 1505 N. Zaragoza El Paso, TX 79936 915-856-7867 Scott Sanders Jon Evans 13140 Louetta Road Houston, TX 77429 281-888-1318 Greg Attwood 1100 W. Anderson Lane Austin, TX 78757 512-206-0022 Greg Attwood 1807 Slaughter Lane Austin, TX 78248 512-282-0003 FDD – 2014 14877235.8 04/17/14 F - 29 John Vicari Keith Masden 9341 Kingston Pike Knoxville, TN 37922 865-690-0123 Robert Baker Alex Perchuk 5740 Stage Road Bartlett, TN 38134 901-249-8674 Taymax Group Acquisition, LLC 1140 Gallatin Pike South Madison, TN 37115 615-612-4478 Mike Turner Dean McMichael Milton Millman 4400 Fredericksburg Rd. San Antonio, TX 78201 210-736-3536 Tim Kurtz Jason Wong Eric Spitz Seth Libert 5301 Alpha Road Dallas, TX 75240 972-392-7700 Jon Evans Scott Sanders 10701 Jones Road Houston, TX 77065 281-890-2727 PLANET FITNESS® Texas (cont.) Kyle Nagel 25 NE Loop 410 San Antonio, TX 78216 210-451-9236 Taymax Group Acquisition, LLC 6700 Huebner Road San Antonio, TX 78238 210-888-5545 Taymax Group Acquisition, LLC 1739 SW Loop 410, Ste. 814 San Antonio, TX 78227 210-592-8727 Greg Attwood 200 W. Palm Valley Blvd Austin, TX 78664 512.671.8884 Tim Kurtz Joe Rizzo Thomas Furdon 6545 Duck Creek Drive Garland, TX 75043 972.240.7686 Taymax Group Acquisition, LLC 207 N. General McMullen San Antonio, TX 78237 210.447.7047 Joseph Bencomo 3000 Joe Battle Blvd El Paso, TX 79938 915.855.7867 Scott Sanders John Evans 14485 Bellaire Blvd Houston, TX 77083 281.988.7600 Scott Sanders Jon Evans 11187 Fondren Road Houston, TX 77096 855-655-8657 Trey Owen 4900 Twin City Highway Groves, TX 77619 409-960-6000 Taymax Group Acquisition, LLC 5858 S. Padre Island Drive Corpus Christi, TX 78412 361-993-4444 Tim Kurtz Joe Rizzo Thomas Furdon 1402 West Walnut St. Dallas, TX 75042 972-487-5930 Trey Owen 3249 50th Street Lubbock, TX 79413 806-791-2000 Greg Attwood 7100 W. US Highway 290, Suite A Austin, TX 78736 512.282.0003 Taymax Group Acquisition, LLC 1671 1H-35 South, Suite 401 New Braunfels, TX 78130 830.609.9241 Greg Attwood Scott Attwood Mike Turner 4109 E. Lancaster Avenue Fort Worth, TX 76103 888-237-9005 Taymax Group Acquisition, LLC 13932 Nacogdoches Road San Antonio, TX 78217 210-251-3346 Joseph Bencomo 725 North Resler El Paso, TX 79912 915-833-7867 Taymax Group Acquisition, LLC 11227 Potranco Road San Antonio, TX 78214 210-255-1120 FDD – 2014 14877235.8 04/17/14 Jon Evans Scott Sanders 10116 Hammerly Blvd. Houston, TX 77080 713-893-0865 John Hooker Brian Hooker 3915 Kell Blvd. Wichita Falls, TX 76308 940-244-4000 F - 30 Taymax Group Acquisition, LLC 1131 SE Military Drive San Antonio, TX 78214 210.255.1120 Trey Owen 3801 Olsen Blvd. #1 Amarillo, TX 79109 806.358.8000 Trey Owen 2540 Barrow Street Abilene, TX 79605 325-692-2000 PLANET FITNESS® Texas (cont.) Greg Attwood 1819 Pleasant Valley Rd. Austin, TX 78741 512-282-0003 Greg Attwood 3200 Falls Drive Dallas, TX 75211 888-237-9005 Greg Attwood Mike Turner 1950 Ephriham Ave., Ste. 230 Fort Worth, TX 76164 888-237-9005 Scott Sanders Jon Evans 310 Cypress Creek Parkway Houston, TX 77090 855-665-8657 Joseph Bencomo 10861 Gateway South El Paso, TX 79934 915-822-1002 Trey Owen 1000 N. Midkiff Rd., Ste. 13 Midland, TX 79701 432-689-4600 Brian Hooker John Hooker 1165 South Stemmons Freeway Lewisville, TX 75067 469-645-8261 Greg Attwood 300 N. Valley Mills Drive Waco, TX 76710 888-237-9005 Greg Attwood 2700 W. Pecan Pflugerville, TX 78660 512-282-0003 Utah Keith Larsen 640 S. 80 E. Suite 120 Logan, UT 84321 435-753-7501 Keith Larsen 113 N. Harrisville Road Ogden, UT 84404 801.334.0500 Keith Larsen 3175 E. 3300 South Salt Lake City, UT 84109 801-467-6711 Taymax Group Acquisition, LLC 1705 Pat Booker Road, Ste. 216 Universal City, TX 78148 210-566-0400 Tim Kurtz Joe Rizzo Thomas Furdon 3200 Camp Wisdom Road Dallas, TX 972-296-0802 Taymax Group Acquisition, LLC 14610 Huebner Road San Antonio, TX 78230 210-492-2024 Greg Attwood 2740 Valwood Parkway, Ste. 147 Farmers Branch, TX 75234 888-237-9005 Keith Larsen 2334 E. Fort Union Blvd. Salt Lake City, UT 84121 801-943-5111 Keith Larsen 324 S. State Street Salt Lake City, UT 84111 801-431-9400 Keith Larsen 157 N. State Street Orem, UT 84057 801-225-4222 Paul Zane Pilzer Lisa Dang Pilzer 1836 W. 5400 South Salt Lake City, UT 84118 801-963-8787 Keith Larsen 1946 W. 5600 S Roy, UT 84067 801-773-3944 John Moran Mark Henderson 42 South River Road St. George, UT 84790 435-673-3788 Keith Larsen 155 West 500 South #3 Bountiful, UT 84010 801-298-1999 FDD – 2014 14877235.8 04/17/14 F - 31 PLANET FITNESS® Vermont Jim Dricker Jessie Dricker 30 Community Dr., Unit #7 Burlington, VT 05403 802-863-8910 Jim Dricker Jessie Dricker 57 River Rd. Essex Junction, VT 05452 802-879-5100 Virginia Dave Weber Gary Bianucci 6763-R Wilson Blvd. Falls Church, VA 22044 703-241-2255 Ken Ryder 3877 Holland Rd. Virginia Beach, VA 23452 757-275-8315 Kevin Fagan 7680 Stream Walk Lane Manassas, VA 20109 703-530-0123 Ken Ryder 301B Oyster Point Road Newport News, VA 23602 757-269-0401 Ken Ryder 5815 West Norfolk Road Portsmouth, VA 23703 757.759.0924 Kevin Fagan 4620 Kenmore Ave. Alexandria, VA 22304 703-212-0123 Kevin Fagan 14431 Jefferson Davis Highway Woodbridge, VA 22191 703-491-0123 Ken Ryder 4245 E. Little Creek Rd. Norfolk, VA 23518 757-644-6926 Ken Ryder 1060 West Mercury Blvd. Hampton, VA 23666 757-825-8040 William Asbell, III William Asbell, Jr. 1257 Jefferson Davis Highway Fredericksburg, VA 22401 540-322-5652 William Asbell, III Julian Malcolm William Asbell, Jr. Towers Shopping Center 672Brandon Ave. SW Roanoke, VA 24015 540-904-6288 William Asbell, III Julian Malcolm William Asbell, Jr. 10040 Robious Rd Richmond, VA 23235 804.323.4348 William Asbell, III Julian Malcolm William Asbell, Jr. 3405 Candlers Mountain Rd. Lynchburg, VA 24502 434-237-0287 William Asbell, III Julian Malcolm William Asbell, Jr. 1790-74 E. Market St. Harrisonburg, VA 22801 540-246-0309 Geoff Starr Riverside Centre 3360 Riverside Drive Danville, VA 24541 434-792-1723 Ken Ryder 415 North Military Highway, Ste. 23 Norfolk, VA 23502 757-995-7914 Washington Kalpana Lubrano 8024 East Mill Plain Blvd. Vancouver, WA 98664 360-448-2277 FDD – 2014 14877235.8 04/17/14 Roger Bates Michael Joseph 17171 Bothell Wayne Lake Forest Park, WA 98155 206-467-1366 F - 32 Milton Odum 4613 NE Sunset Blvd. Renton, WA 98056 425-255-5522 PLANET FITNESS® West Virginia Bob Viani Sharon Lomasney 104 Gihon Village Parkersburg, WV 26101 304-893-9800 Bob Viani Sharon Lomasney 2399 Meadowbrook Mall Rd. Bridgeport, WV 26330 304-842-8456 Dharmesh Shah 1220 North Queen Street Martinsburg, WV 25404 304-260-0005 Wisconsin Mike Dobrynio Tim Lennon 3375 West College Ave. Appleton, WI 54914 920-733-3554 Mike Dobrynio Tim Lennon 2641 West Mason Street Green Bay, WI 54303 920.544.8190 Mike Dobrynio Tim Lennon 101 W. Wisconsin Ave. Milwaukee, WI 53203 414-223-3380 Mike Dobrynio Tim Lennon 549 S. Taylor Drive Sheboygan, WI 53081 920-803-8888 Timothy Lennon Mike Dobrynio 1083 East Johnson Street Fond du Lac, WI 54935 920-922-0833 Mike Dobrynio Tim Lennon 1850 Jackson Street Oshkosh, WI 54901 920-231-5336 Mike Dobrynio Tim Lennon 1831 Main Street Green Bay, WI 920-544-8191 Mike Dobrynio Tim Lennon 3333 S. 27th Milwaukee, WI 53215 414-382-1900 Tim Lennon Mike Dobrynio 2305 West Broadway Monona, WI 53713 608-223-9075 Timothy Lennon Mike Dobrynio 7475 Mineral Point Road Madison, WI 53717 920-213-3897 Mike Dobrynio Tim Lennon 3415 Custer Street Manitowoc, WI 54220 920.652.9800 Mike Dobrynio Tim Lennon 6529 S 27th Street Franklin, WI 53132 414-988-9269 Mike Dobrynio Tim Lennon 230 N. 18th Avenue West Bend, WI 53095 262-365-0850 Mike Dobrynio Tim Lennon 1800 Milton Ave., Ste. 150 Janesville, WI 53545 608-756-3294 Mike Dobrynio Tim Lennon N89 W16899 Appleton Ave. Menomonee Falls, WI 53051 262-251-8000 Rick Sciacca Kim Sciacca 1511 Ponce De Leon, Ste. 1 San Juan, PR 00909 787-919-0220 Rick Sciacca Kim Sciacca Carr #2, McKleeney St. Manati, PR 00674 787-921-7001 Puerto Rico Rick Sciacca Kim Sciacca 5725 Boulevard Media Luna Carolina, PR 00987 787-710-7373 Rick Sciacca Kim Sciacca Carr #2 km 14.7 Hato Tejas Bayamon, PR 00959 787-315-8888 FDD – 2014 14877235.8 04/17/14 F - 33 PLANET FITNESS® AREA DEVELOPERS (as of December 31, 2013) Alabama John Landry 426 LeBlanc Cove Biloxi, MS 39531 228-257-9051 Arizona Thomas Bock Kevin Kelly John Williams Eric Goodwin 1725 Wrightstown Road Newton, PA 18940 215-565-6574 Arkansas Rafael Ortega, Jr. Brandon Sebald 8188 W. Miller Road Springdale, AR 72762 305-720-6785 California Steven W. Thomas 85 Sunset Circle Sedona, AZ 86336 928-274-8116 Michael Rivera Ryan Turner 7663 N. Charles Avenue Fresno, CA 93711 559-435-1709 Colorado Michael Pullman 20 West 64th St., Apt. #26A New York, NY 10023 248-514-4599 Mark Manion 9600 Milestone Way, Apt. 3014 College Park, MD 20740 757-615-1422 Thomas Bock Kevin Kelly John Williams 1725 Wrightstown Road Newton, PA 18940 215-565-6574 Steven W. Thomas 85 Sunset Circle Sedona, AZ 86336 928-274-8116 Richard Kueber 222 E. Witherspoon, Unit 1005 Louisville, KY 40202 270-505-1921 Stephen Griffin Dennis Griffin Arrien Schiltkamp 6531 Banner Lake Circle Apt. 16306 Orlando, FL 32821 603-748-0543 Josiah & Kathy Garlan 7725 Golden Peak Ct. Las Vegas, NV 89113 Ben Heiderscheidt 21 Caverno Drive Lee, NH 03824 603-988-8128 Lee J. Shamaley, Jr. 4921 Meadow Lark Drive El Paso, TX 79922 915-276-5194 Jason Jost Richard Jost Jonathan Jost 3191 West Clyde Place Denver, CO 80211 315-391-9678 William Fidler 39 Overton Road Windham, NH 03087 603-327-7303 Brett McGlothin 5675 Amber Ridge Drive Castle Pines, CO 81018 FDD – 2014 14877235.8 04/17/14 F - 34 PLANET FITNESS® Connecticut ECP-PF: CT Operations, Inc. 35 Old Tavern Road Suite 101 Orange, CT 06477 Florida Eric Dore 1507 Park Center Dr., Unit 1H Orlando, FL 32835 407-290-8883 James Page 668 Dutchess Turnpike Poughkeepsie, NY 12603 518-225-3823 Georgia John Wash 204 Sausalito Blvd. Casselberry, FL 32707 407-332-4496 David Bidwell Scott Linsky 718 Old Shore Road Forked River, NJ 08731 609-276-8635 Bryan Pappas Peter Fregeau Mike Murray 69 Haverhill Road Amesbury, MA 01913 978-388-4636 Bonita Mancia 2200 Lakeside Drive Harveys Lake, PA 18618 Stanley DeMartinis Guerino Ciampi 175 McClellan Highway East Boston, MA 02128 781-248-8076 Jane & John Craig Debra & Roger Amato 5 Great Works Drive South Berwick, ME 03908 603-534-7494 Mike Horan Mark Prasalowicz Brian Taggart 1243 Marlborough Street Philadelphia, PA 19124 609-352-9938 Timothy Lennon Michael Dobrynio 415 S. Olde Oneida St. Appleton, WI 54911 646-515-4756 Luke Urban 242 S. 13th Street, Unit G Philadelphia, PA 19107 Chris Kouros 465 Hillside Avenue Glen Ellyn, IL 60137 630-205-1775 Jamie Mason 4914 Kingston Pike Knoxville, TN 37934 Idaho Keith Larsen 1655 North 20 East N. Logan, UT 84341 435-753-7501 Illinois Bryan Rishforth Anthony Rufo 1100 Ashbridge Road Bryn Mawr, PA 19010 610-357-3863 Scott Majkrzak 3521 Polk Street South Fargo, ND 58014 701-261-4251 FDD – 2014 14877235.8 04/17/14 215-603-0885 F - 35 PLANET FITNESS® Indiana Robert Baker 5 Old Stable Way Colts Neck, NY 07722 732-740-5674 Richard Kueber 222 E. Witherspoon, Unit 1005 Louisville, KY 40202 270-505-1921 Chris Klebba 5457 River Ridge Drive Brighton, MI 48116 248-808-4365 Iowa Edward Alberts 1428 Riverbend Drive Baldwinsville, NY 13027 315-592-8900 Kansas Christopher L. Sutherland, Jr. Matthew S. Sutherland Spencer D. Sutherland Andrew K. Sutherland 3008 West Main Street Jenks, OK 74037 918-640-6404 Ronald Huling 4527 Kibby Road Jackson, MI 517-750-4607 Kristine & Rick Raimondo 8 Lassen Park Drive Medford, NJ 08055 609-760-3434 Scott Majkrzak Alex Mortensen Jeffrey Majkrzak 3521 Polk Street South Fargo, ND 58014 701-261-4251 Greg Henson 2513 SW Still Meadows Lane Blue Springs, MO 64015 816-289-8608 Kentucky Richard Kueber 222 E. Witherspoon, Unit 1005 Louisville, KY 40202 270.505.1921 John Clancy Robert Slingsby 161 Barrett Hill Road Mahopac, NY 10541 914-329-9809 Louisiana Kevin Windham Dorothy Windham Michael Beaton P.O. Box 249 Centreville, MS 39631 601-645-5034 Gary J. Sinopoli, Jr. Robert J. Siragusa Michael D. Hurring 769 McLane Lane Biloxi, MS 39532 228-424-8972 FDD – 2014 14877235.8 04/17/14 Michael Campagnolo 1326 Central Avenue Indianapolis, IN 46202 617-905-9005 Chad Fitton Matthew Glance 50 Nashua Rd., Suite 203 Londonderry, NH 03053 603-432-6055 F - 36 Christopher L. Sutherland, Jr. Matthew S. Sutherland Spencer D. Sutherland Andrew K. Sutherland 3008 West Main Street Jenks, OK 74037 918-640-6404 PLANET FITNESS® Louisiana (cont.) Brandon Robinson 1130 S. Fieldspan Rd. Duson, LA 70529 337.356.6465 Maryland Victor Brick 201 Old Padonia Rd. Cockeysville, MD 21030 410-252-8058 Daniel P. Horan 401 Germantown Pike Lafayette Hill, PA 19444 484-342-0469 Massachusetts Brian Kablik 15 Jacob Drive Mansfield, MA 02048 508-579-8267 Michael Clark 45 Storey Avenue Newburyport, MA 01950 978-462-2500 Michigan Bryan Rief WB Pete Hopkins 29475 West 7 Mile Road Livonia, MI 48152 248-427-0043 Ronald Huling 4527 Kibby Road Jackson, MI 517-750-4607 Dennis W. Backos James L. Matthew 11 Mile Road Warren, MI 48089 586-792-6900 Julian Monterosso Lisa Monterosso Patrick Schafer 935 Scott Court Northville, MI 48167 248-277-8543 Imad Farhat 48687 Stoneridge Drive Northville, MI 48168 313-333-0307 Minnesota Kevin P. Murphy Daniel J. O’Shaughnessy Daniel J. Hill 602 Andover Road Newton Square, PA 19073 610-420-7648 Mississippi John Landry 426 LeBlanc Cove Biloxi, MS 39531 228-257-9051 FDD – 2014 14877235.8 04/17/14 Richard Kueber 222 E. Witherspoon, Unit 1005 Louisville, KY 40202 270-505-1921 F - 37 PLANET FITNESS® Missouri Brandon Sebald Jonathan Norman Gerald Norman Eric Kuhn 1241 Strassner Dr., Unit 1508 Brentwood, MO 63144 914-384-1998 Rafael Ortega, Jr. Brandon Sebald 8188 W. Miller Road Springdale, AR 72762 305-720-6785 Greg Henson Brad Henson Deborah Brenner 4251 NE Port Drive Lee’s Summit, MO 64064 816-289-8608 Richard Kueber 222 E. Witherspoon, Unit 1005 Louisville, KY 40202 270-505-1921 John P. Clancy Sampson Glassman 129 Viera Drive Palm Beach Gardens, FL 33418 914-329-9809 Nebraska Edward Alberts 1428 Riverbend Drive Baldwinsville, NY 13027 315-592-8900 New Jersey William Cassotis 184 West Boylston Street Unit 8 West Boylston, MA 01583 508-835-2551 Anthony Falange Naomi Falange 2956 Route 10 West Morris Plains, NJ 07950 973-998-0989 Russell Del Rosso Michael Connell Michael Castellano Michael Rodricks 931 Fisher Blvd. Toms River, NJ 08753 732-270-6300 Craig Benson 1662 Elm Street, Ste. 2 Manchester, NH 03101 603-669-6194 New Mexico ECP-PF: NM Operations, Inc. 35 Old Tavern Road Suite 101 Orange, CT 06477 Joseph Bencomo 11160 Rojas Drive El Paso, TX 79935 915-590-7867 New York Bob Viani 3675 Albany Post Road Poughkeepsie, NY 12601 845-473-8000 Jeff Innocenti 1720 Hutchinson River Pkwy. Bronx, NY 10461 718-828-9404 Dave Leon Bob Morris 7 New Hartford Shopping Ctr. New Hartford, NY 13413 315-735-8589 Robert Morris 7 New Hartford Shopping Ctr. New Hartford, NY 13413 315-735-8589 FDD – 2014 14877235.8 04/17/14 F - 38 PLANET FITNESS® Nevada Jimmy Nafso Sylvia Nafso 21165 Bridle Run Northville, MI 48167 248-514-6006 North Carolina C. J. Bouchard Joe Pepe 4701 Atlantic Avenue Raleigh, NC 27604 919-850-9440 Jamie Mason 4914 Kingston Pike Knoxville, TN 37934 Ohio David A. DiSabato 7507 Bridlespur Lane Delaware, OH 43015 614-262-6004 John Clancy Robert Slingsby 161 Barrett Hill Road Mahopac, NY 10541 914-329-9809 Thomas E. Purther Randall J. Fenton David Rubin 3001 W. Big Beaver, Ste. 324 Troy, MI 48084 248-538-9898 Oklahoma Anthony Fisher 5627 South Madison Place Tulsa, OK 74105 918-621-1122 FDD – 2014 14877235.8 04/17/14 Alexander B. Choquette Shelley A. Choquette 68A South Kerr Avenue Wilmington, NC 28403 910-772-1331 Gerald Kennedy Trampus Kennedy 908 Carole Summey Drive Dallas, NC 28034 704-718-8700 Denis Rondeau 114 Exeter Road Hampton Falls, NH 03844 603-772-1415 Bryan Rief WB Pete Hopkins 29475 West 7 Mile Road Livonia, MI 48152 248-427-0043 John Cooley 426 Windy Hill Road Gilbertsville, PA 19525 610-639-2400 Armando T. Sangermano, III Earl B. Hawkes 15 Rolling Meadow Lane Haverhill, MA 01832 Mark Christie 2114 Normandy Findlay, OH 45840 603-512-1400 D. Michael Hicks 418 Ewing Drive Belmont, NC 28012 704-825-1381 Chad Fitton Matthew Glance 50 Nashua Rd., Suite 203 Londonderry, NH 03053 603-432-6055 Robert Baker 5 Old Stable Way Colts Neck, NY 07722 Jeffrey Majkrzak Scott Majkrzak Alex Mortensen 3521 Polk Street South Fargo, ND 58104 701-261-4251 F - 39 PLANET FITNESS® Oregon Tanner Halton 420 NW 11th Ave. Unit 714 Portland, OR 97209 508-709-1122 Pennsylvania Frank Kindler Robert Kindler 107 Saint Johns Church Rd. Camphill, PA 17011 717-763-8904 James Wade Michael Wade 624 Bellflower Blvd. Warrington, PA 18976 215-430-1252 Milan Dalsania 6608 Carmel Drive Macungie, PA 18062 Toni Rufo Peter Ruggieri Anthony Rufo 4952 Pennell Road Aston, PA 19014 610-485-0800 Mark S. Rhodes 420 St David’s Road Wayne, PA 19087 610-687-3233 Chad Fitton Matthew Glance 50 Nashua Rd., Suite 203 Londonderry, NH 03053 603-432-6055 Jane & John Craig 5 Great Works Drive South Berwick, ME 03908 603-534-7494 D. Michael Hicks 418 Ewing Drive Belmont, NC 28012 704-825-1381 Jamie Mason 4914 Kingston Pike Knoxville, TN 37934 Pat Augustine 6000 Fairview Rd. Suite 1212 Charlotte, NC 28210 704.552.4008 Robert Viani Sharon Lomasney 4 Jefferson Plaza, Ste. 501 Poughkeepsie, NY 12601 845-473-1190 Rhode Island Steven R. Eddleston 387 West Fountain Street Providence, RI 02903 401-865-6300 South Carolina Alexander B. Choquette Shelley A. Choquette 68A South Kerr Avenue Wilmington, NC 28403 910-772-1331 Gerald Kennedy Trampus Kennedy 908 Carole Summey Drive Dallas, NC 28034 704-718-8700 Tennessee Victor Brick 201 Old Padonia Rd. Cockeysville, MD 21030 410-252-8058 FDD – 2014 14877235.8 04/17/14 F - 40 PLANET FITNESS® Tennessee (cont.) Richard Kueber 222 E. Witherspoon, Unit 1005 Louisville, KY 40202 270-505-1921 Texas Joseph Bencomo 11160 Rojas Drive El Paso, TX 79935 915-590-7867 Ray Owen, III 9108 Zyle Road Austin, TX 78737 512-694-0799 Brian Hooker John Hooker 4410 Nassau Drive Wichita Falls, TX 76308 940-781-7175 Utah Keith Larsen 1655 North 20 East N. Logan, UT 84341 435-753-7501 Virginia Kevin Fagan 7680 Stream Walk Lane Manassas, VA 07901 908-377-7097 PF Taymax HQ, LLC 100 Bayview Circle Suite 5000 Newport Beach, CA 92660 Scott Sanders Jon Evans 2620D South Shepard Dr.#558 Houston, TX 77098 713-521-1431 Timothy Kurtz Jason Wong Joseph Rizzo Tom Furdon 40 Ray Avenue Burlington, MA 01803 781-229-9999 Robert Segler 2204 Louisiana St., 2nd Floor Houston, TX 77002 Greg Attwood 1100 W. Anderson Lane Austin, TX 78757 512-205-0022 PF Taymax HQ, LLC 100 Bayview Circle Suite 5000 Newport Beach, CA 92660 Paul Zane Pilzer Lisa Dang Pilzer 1371 Aerie Drive Park City, UT 84060 435-640-8118 Ken W. Ryder Sharree Ryder 4324 Holland Road Virginia Beach, VA 23452 703-447-9972 William Asbell, Jr. William Asbell, III Julian B. Malcolm 1906 Cambridge Ave., SW Roanoke, VA 24015 603-781-7082 Jamie Mason 4914 Kingston Pike Knoxville, TN 37934 FDD – 2014 14877235.8 04/17/14 F - 41 PLANET FITNESS® Washington Milton Odum Christopher Odum 2003 Split Branch Court Houston, TX 77077 281-558-5458 West Virginia Bob Viani Sharon Lomasney 3675 Albany Post Road Poughkeepsie, NY 12601 845-473-8000 Wisconsin Timothy Lennon Michael Dobrynio Anthony Jentil Eric Najork 415 S. Olde Oneida St. Appleton, WI 54911 646-515-4756 Chad Fitton Matthew Glance 50 Nashua Rd., Suite 203 Londonderry, NH 03053 603-432-6055 Mike Murray Michael Dobrynio 17 Thaxter Rd. Portsmouth, NH 03801 603-475-1479 Puerto Rico Richard J. Sciacca, Jr. Kimberly A. Sciacca 555 Monserrate St. San Juan, PR 00907 617-750-9560 FDD – 2014 14877235.8 04/17/14 F - 42 PLANET FITNESS® Corporate Locations (as of December 31, 2013) California PF Vallejo, LLC PFCA, LLC 3505 Sonoma Blvd. Vallejo, CA 94590 4925 MacDonald Ave. Richmond, CA 94805 Colorado Pla-Fit Colorado, LLC 9120 Wadsworth Parkway Westminster, CO 80021 Delaware PFPA, LLC 900 S. Justison St Wilmington, DE 1901 302.691.7844 Massachusetts JFZ, LLC Pla-Fit Health LLC 20 Arch Meadow Drive Danvers, MA 01923 29 Traders Way Salem, MA 01970 New Hampshire Pla-Fit Health, LLC JFZ, LLC PF Derry, LLC 898 Central Avenue Dover, NH 03820 736 Huse Street Manchester, NH 03103 55 Crystal Avenue. Ste. 403 Derry, NH 03038 775 Lafayette Road Portsmouth, NH 03801 99 Eddy Road Manchester, NH 03102 89 Fort Eddy Road Concord, NH 03301 15-17 Freetown Road Raymond, NH 03077 306 N. Main Street Rochester, NH 03867 96 Daniel Webster Highway Belmont, NH 038220 FDD – 2014 14877235.8 04/17/14 F - 43 PLANET FITNESS® 20 Portsmouth Avenue Stratham, NH 03885 54 Calef Highway Lee, NH 03861 18 Northwest Blvd. Nashua, NH 03063 150 Coliseum Ave Nashua, NH 03063 553 S. Mast Road Suite B-113 Goffstown, NH 03045 New Jersey Pla-Fit Health NJNY, LLC Pla-Fit Health NJNY, LLC Pla-Fit Health NJNY, LLC 561 Rte. 1 Edison, NJ 08817 175 Avenue A Bayonne, NJ 07002 601 Washington Street Hoboken, NJ 07030 New York Pla-Fit Health NJNY, LLC Pla-Fit Health NJNY, LLC Pla-Fit Health NJNY, LLC 81 Middle Country Road Centereach, NY 11720 Pla-Fit Health NJNY, LLC 894A Sunrise Highway Bayshore, NY 11706 Pla-Fit Health NJNY, LLC 179 Westbury Avenue Carle Place, NY 11514 Pla-Fit Health NJNY, LLC 25 Ruland Road Melville, NY 11747 Pla-Fit Health NJNY, LLC 1040 South Broadway Hicksville, NY 11801 ` 1839 E. Main Street Peekskill, NY 10566 PFPA, LLC PFPA, LLC Gateway Shopping Ctr. South Wyoming Ave. Unit 21B Edwardsville, PA 18704 1540 Main Street Peckville, PA 18452 3025 Hempstead Tpke Levittown, NY 11756 Pennsylvania PFPA, LLC 150 East Pennsylvania Ave. Suite 100 Downingtown, PA 19335 FDD – 2014 14877235.8 04/17/14 F - 44 PLANET FITNESS® PFPA, LLC PFPA, LLC PFPA, LLC 1400 North Charlotte Street Pottstown, PA 19464 PFPA, LLC 1600-1624 Nay Aug Ave. Scranton, PA 18509 PFPA, LLC 1302 Hanover Ave. Allentown, PA 18109 PFPA, LLC 860 West Street Road Warminster, PA 18974 PFPA, LLC 1850 South Township Blvd Pittston, PA 16840 PFPA, LLC 3505 Mountain View Drive West Mifflin, PA 15122 PFPA, LLC 1635 S. Braddock Ave Pittsburgh, PA 15218 5280 Route 30 Greensburg, PA 15601 1950 Rotunda Drive Erie, PA 16509 PFPA, LLC PFPA, LLC PFPA, LLC 1248 Greensprings Drive York, PA 17402 717-751-2370 2130 White Street York, PA 17404 717-747-1481 801 Baltimore Street Hanover, PA 17331 717-633-1001 FDD – 2014 14877235.8 04/17/14 F - 45 PLANET FITNESS® Immediate Family* Denis Rondeau Michael Forcillo 2401 Whitehall Park Dr. Suite 500 Charlotte, NC 28273 Denis Rondeau 10215-B University City Blvd. Charlotte, NC 28213 Denis Rondeau 2200 Coronation Blvd. Charlotte, NC 28227 Denis Rondeau Michael Forcillo 7643 Pineville Matthews Road, Suite 26 Charlotte, NC 28226 Denis Rondeau 3301 Freedom Drive, Ste. 600 Charlotte, NC 28208 * These locations are owned by an immediate family member of a person listed in Item 2. FDD – 2014 14877235.8 04/17/14 F - 46 PLANET FITNESS® LIST OF FRANCHISEES THAT LEFT THE SYSTEM (as of December 31, 2013) During the fiscal year, four (4) Planet Fitness franchisees left the system. Two (2) Planet Fitness franchise owners voluntarily ceased to conduct business:  Bruce Erickson, Boston, MA; Current business telephone number: (617) 248-8611  Todd Michalik, Boston, MA; Current business telephone number: (617) 248-8611 Two (2) Planet Fitness franchise owners had their franchise agreements terminated and thereby ceased to conduct business:  Patrick Catino, Saugus, MA; Current business telephone number (617) 628-4272  Kevin LaVelle, Winchester, MA; Current business telephone number (978) 863-8990 If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system. FDD – 2014 14877235.8 04/17/14 F - 47 PLANET FITNESS® LIST OF AREA DEVELOPMENT AGREEMENTS TERMINATED (as of December 31, 2013) New Jersey Arthur Thomas 379 North Reading Ephrata, PA 17522 717-733-5555 Nevada John Macaluso 1240 5th Street Manhattan Beach, CA 90266 310-908-2621 North Carolina Marc R. Gowdy James T. Ball 321 Little River Road Berwick, ME 03901 603-534-9567 Pennsylvania Arthur Thomas 379 North Reading Ephrata, PA 17522 717-733-5555 FDD – 2014 14877235.8 04/17/14 F - 48 PLANET FITNESS® PLANET FITNESS® EXHIBIT “G” TO THE DISCLOSURE DOCUMENT STATE ADDENDA FDD – 2014 14877235.8 04/17/14 G-1 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF CALIFORNIA The following information applies to franchises and franchisees subject to the California Franchise Investment Act. Item numbers correspond to those in the main body: THE CALIFORNIA INVESTMENT LAW REQUIRES THAT A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT. OUR WEBSITE HAS NOT BEEN REVIEWED OR APPROVED BY THE CALIFORNIA DEPARTMENT OF CORPORATIONS. ANY COMPLAINTS CONCERNING THE CONTENT OF THIS WEBSITE MAY BE DIRECTED TO THE CALIFORNIA DEPARTMENT OF CORPORATIONS AT www.corp.ca.gov. SECTION 31125 OF THE CALIFORNIA INVESTMENT LAW REQUIRES US TO GIVE YOU A DISCLOSURE DOCUMENT APPROVED BY THE COMMISSIONER OF CORPORATIONS BEFORE WE ASK YOU TO CONSIDER A MATERIAL MODIFICATION OF YOUR FRANCHISE AGREEMENT. Item 3. Item 3 is amended to provide that neither we nor any other person identified in Item 2 is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities Exchange Act of 1934, 15 U.S.C.A. 78a et seq., suspending or expelling such persons from membership in such association. Item 17. 1. California Business & Professions Code Sections 20000 through 20043 provide rights to you concerning termination or nonrenewal of a franchise. If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control. 2. Termination of the Franchise Agreement by us because of your insolvency or bankruptcy may not be enforceable under applicable federal law (11 U.S.C.A. 101 et seq.). 3. The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law. 4. You must sign a general release if you are granted a successor franchise or transfer your franchise. These provisions may be unenforceable under California law. California Corporations Code 31512 voids a waiver of your rights under the Franchise Investment Law (California Corporations Code 31000 through 31516). Business and Professions FDD – 2014 14877235.8 04/17/14 G-2 PLANET FITNESS® Code 20010 voids a waiver of your rights under the Franchise Relations Act (Business and Professions Code 20000 through 20043). 5. The Franchise Agreement requires the application of the laws of New Hampshire. This provision may not be enforceable under California law. 6. The Franchise Agreement requires binding arbitration. The arbitration will occur in the office of JAMS that is nearest to our principal business address (that JAMS office is currently Boston, Massachusetts) with the costs being borne as determined by the arbitrator. Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a franchise agreement restricting venue to a forum outside the State of California. FDD – 2014 14877235.8 04/17/14 G-3 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® FRANCHISE AGREEMENT FOR THE STATE OF CALIFORNIA This Amendment pertains to franchises sold in the State of California and is for the purpose of complying with California statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following: 1. Articles 16.4. and 16.5. of the Franchise Agreement contain a covenant not to compete which extends beyond the term of the franchise. This provision may not be enforceable under California law. 2. Article 19.13. of the Franchise Agreement requires the application of the laws of New Hampshire. This provision may not be enforceable under California law. 3. In all other respects, the Franchise Agreement will be construed and enforced according to its terms. Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G-4 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® AREA DEVELOPMENT AGREEMENT FOR THE STATE OF CALIFORNIA This Amendment pertains to franchises sold in the State of California and is for the purpose of complying with California statutes and regulations. Notwithstanding anything which may be contained in the body of the Area Development Agreement to the contrary, the Agreement is amended to include the following: 1. Article 13 of the Area Development Agreement contains a covenant not to compete which may extend beyond the term of the franchise. This provision may not be enforceable under California law. 2. Article 20 of the Area Development Agreement requires the application of the laws of New Hampshire. This provision may not be enforceable under California law 3. In all other respects, the Area Development Agreement will be construed and enforced according to its terms. Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G-5 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® FRANCHISE AGREEMENT FOR THE STATE OF HAWAII This Amendment pertains to franchises sold in the State of Hawaii and is for the purpose of complying with Hawaii statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following: 1. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently without reference to this Amendment. 2. Except as amended herein, the Franchise Agreement will be construed and enforced in accordance with its terms. Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its TO BE SIGNED IN DUPLICATE FDD – 2014 14877235.8 04/17/14 G-6 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® AREA DEVELOPMENT AGREEMENT FOR THE STATE OF HAWAII This Amendment pertains to franchises sold in the State of Hawaii and is for the purpose of complying with Hawaii statutes and regulations. Notwithstanding anything which may be contained in the body of the Area Development Agreement to the contrary, the Agreement is amended to include the following: 1. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently without reference to this Amendment. 2. Except as amended herein, the Area Development Agreement will be construed and enforced in accordance with its terms. Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its TO BE SIGNED IN DUPLICATE FDD – 2014 14877235.8 04/17/14 G-7 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF MICHIGAN NOTICE REQUIRED BY STATE OF MICHIGAN THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU. Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise: (a) A prohibition on the right of a franchisee to join an association of franchisees. (b) A requirement that a franchisee assent to a release, assignment, novation, waiver, or estoppel which deprives a franchisee of rights and protections provided in this act. This shall not preclude a franchisee, after entering into a franchise agreement, from settling any and all claims. (c) A provision that permits a franchisor to terminate a franchise prior to the expiration of its term except for good cause. Good cause shall include the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure. (d) A provision that permits a franchisor to refuse to renew a franchise without fairly compensating the franchisee by repurchase or other means for the fair market value at the time of expiration of the franchisee’s inventory, supplies, equipment, fixtures, and furnishings. Personalized materials which have no value to the franchisor and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business are not subject to compensation. This subsection applies only if: (i) the term of the franchise is less than 5 years and (ii) the franchisee is prohibited by the franchise or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the franchise or the franchisee does not receive at least 6 months advance notice of franchisor’s intent not to renew the franchise. (e) A provision that permits the franchisor to refuse to renew a franchise on terms generally available to other franchisees of the same class or type under similar circumstances. This section does not require a renewal provision. FDD – 2014 14877235.8 04/17/14 G-8 PLANET FITNESS® (f) A provision requiring that arbitration or litigation be conducted outside this state. This shall not preclude the franchisee from entering into an agreement, at the time of arbitration, to conduct arbitration at a location outside this state. (g) A provision which permits a franchisor to refuse to permit a transfer of ownership of a franchise, except for good cause. This subdivision does not prevent a franchisor from exercising a right of first refusal to purchase the franchise. Good cause shall include, but is not limited to: (i) The failure of the proposed transferee to meet the franchisor’s then-current reasonable qualifications or standards. (ii) The fact that the proposed transferee is a competitor of the franchisor or subfranchisor. (iii) The unwillingness of the proposed transferee to agree in writing to comply with all lawful obligations. (iv) The failure of the franchisee or proposed transferee to pay any sums owing to the franchisor or to cure any default in the franchise agreement existing at the time of the proposed transfer. (h) A provision that requires the franchisee to resell to the franchisor items that are not uniquely identified with the franchisor. This subdivision does not prohibit a provision that grants to a franchisor a right of first refusal to purchase the assets of a franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants the franchisor the right to acquire the assets of a franchise for the market or appraised value of such assets if the franchisee has breached the lawful provisions of the franchise agreement and has failed to cure the breach in the manner provided in subdivision (c). (i) A provision which permits the franchisor to directly or indirectly convey, assign, or otherwise transfer its obligations to fulfill contractual obligations to the franchisee unless provision has been made for providing the required contractual services. The fact that there is a notice of this offering on file with the attorney general does not constitute approval, recommendation, or endorsement by the attorney general. Any questions regarding this notice should be directed to the Department of Attorney General, State of Michigan, 670 Williams Building, Lansing, Michigan 48913, telephone (517) 373-7117. THE MICHIGAN NOTICE APPLIES ONLY TO FRANCHISEES WHO ARE RESIDENTS OF MICHIGAN OR LOCATE THEIR FRANCHISES IN MICHIGAN. FDD – 2014 14877235.8 04/17/14 G-9 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF MINNESOTA The following applies to franchises and franchisees subject to Minnesota statutes and regulations. Item numbers correspond to those in the main body. Item 13. We will undertake the defense of any third party claim of infringement involving the PLANET FITNESS® mark. You must cooperate with the defense in any reasonable manner we prescribe with any direct cost of such cooperation to be borne by us. Item 17. 1. Minnesota law provides you with certain termination and nonrenewal rights. As of the date of this Disclosure Document, Minn. Stat. Sec. 80C.14, Subd. 3, 4 and 5 require, except in certain specified cases, that you be given 90 days’ notice of termination (with 60 days to cure) and 180 days’ notice for nonrenewal of the Franchise Agreement. 2. Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Disclosure Document or Franchise Agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. 3. In the event you breach or threaten to breach any of the terms of this Agreement, we will be entitled to seek an injunction restraining such breach and/or to a decree of specific performance, without showing or proving any actual damage, together with recovery of reasonable attorneys’ fees and other costs incurred in obtaining said equitable relief, until such time as the arbitrators make a final and binding determination. 4. Pursuant to Minnesota Rule 2860-4400D, the general release required as a condition to renewal or transfer will not apply to liability under the Minnesota Franchise Act; provided this part shall not ban the voluntary settlement of disputes. FDD – 2014 14877235.8 04/17/14 G - 10 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® FRANCHISE AGREEMENT FOR THE STATE OF MINNESOTA This Amendment pertains to franchises sold in the State of Minnesota and is for the purpose of complying with Minnesota statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended as follows: 1. We will undertake the defense of any claim of infringement by third parties involving the PLANET FITNESS® mark, and you will cooperate with the defense in any reasonable manner prescribed by us with any direct cost of such cooperation to be borne by us. 2. Article 15 (Termination of Agreement) of the Franchise Agreement is revised to include the following language: Franchisor will comply with Minn. Stat. Sec. 80C.14 which requires, except in certain specified cases, that Franchisor gives you 90 days’ notice of termination with 60 days to cure. 3. Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. In addition, nothing in the Disclosure Document or Franchise Agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. 4. entirety. Article 19.17 (Waiver of Punitive Damages and Jury Trial) is hereby deleted in its 5. No Article providing for a general release as a condition to renewal or transfer will act as a release or waiver of any liability incurred under the Minnesota Franchise Act; provided that this part shall not ban the voluntary settlement of disputes. 6. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of Minnesota Statutes Sections 80C.01 to 80C.22 are met independently without reference to this Amendment. 7. Except as amended herein, the Franchise Agreement will be construed and enforced in accordance with its terms. FDD – 2014 14877235.8 04/17/14 G - 11 PLANET FITNESS® Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G - 12 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® AREA DEVELOPMENT AGREEMENT FOR THE STATE OF MINNESOTA This Amendment pertains to franchises sold in the State of Minnesota and is for the purpose of complying with Minnesota statutes and regulations. Notwithstanding anything which may be contained in the body of the Area Development Agreement to the contrary, the Agreement is amended as follows: 1. Article 9 (Default and Termination) of the Area Development Agreement is revised to include the following language: Franchisor will comply with Minn. Stat. Sec. 80C.14 which requires, except in certain specified cases, that Franchisor gives you 90 days’ notice of termination with 60 days to cure. 2. No release language set forth in the Area Development Agreement will relieve Franchisor or any other person, directly or indirectly from liability imposed by the laws concerning franchising of the State of Minnesota, provided that this paragraph will not be for the voluntary settlement of disputes. 3. Minn. Stat. § 80C.21 and Minn. Rule 2860.4400J prohibit us from requiring litigation to be conducted outside Minnesota, requiring waiver of a jury trial, or requiring the franchisee to consent to liquidated damages, termination penalties or judgment notes. Accordingly, Article 20.16 (Consent to Jurisdiction) is deleted from the Area Development Agreement. In addition, nothing in the Disclosure Document or Area Development Agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of the jurisdiction. 4. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of Minnesota Statutes Sections 80C.01 to 80C.22 are met independently without reference to this Amendment. 5. Except as amended herein, the Area Development Agreement will be construed and enforced according to its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G - 13 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF NEW YORK The following information applies to franchises and franchisees subject to New York statutes and regulations. Item numbers correspond to those in the main body. Item 3. Neither we, our affiliates nor any person identified in Item 2 of this Disclosure Document: A. Has an administrative, criminal or civil action pending against that person alleging: a felony; a violation of a franchise, antitrust or securities law; fraud, embezzlement, fraudulent conversion, misappropriation of property; unfair or deceptive practices or comparable civil or misdemeanor allegations, including pending actions, other than routine litigation incidental to the business, which are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations. B. Has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the ten-year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or has been the subject of a civil action alleging: violation of a franchise, antifraud or securities law; fraud, embezzlement, fraudulent conversion or misappropriation of property, or unfair or deceptive practices or comparable allegations. C. Is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a federal, State or Canadian franchise, securities, antitrust, trade regulation or trade practice law, resulting from a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency or department, including, without limitation, actions affecting a license as a real estate broker or sales agent. Item 4. Neither we nor any of our predecessors, officers or general partners has during the 10 year period immediately preceding the date of the Disclosure Document been adjudged bankrupt or reorganized due to insolvency or was a principal officers of any company or a general partner in any partnership that was adjudged bankrupt or reorganized due to insolvency during or within 1 year after the period that such officer or general partner of us held such position in such FDD – 2014 14877235.8 04/17/14 G - 14 PLANET FITNESS® company or partnership, or whether any such bankruptcy or reorganization proceeding has been commenced. Item 17(j) The Franchise Agreement is fully assignable by us, however, no assignment will be made except to an assignee who in the good faith judgment of the franchisor is willing and able to assume the franchisor’s obligations. Item 17(w). The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or franchisee by the General Business law of the State of New York, Article 33. FDD – 2014 14877235.8 04/17/14 G - 15 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF NORTH DAKOTA The following applies to franchises and franchisees subject to North Dakota statutes and regulations. Item numbers correspond to those in the main body: Item 17. 1. Covenants not to compete such as those mentioned in Item 17 may be subject to Section 9-08-06 of the North Dakota Century Code and unenforceable in the State of North Dakota if contrary to Section 9-08-06. 2. Notwithstanding anything contained in Section 20 of the Franchise Agreement and Section 17 of the Area Development Agreement, any arbitration proceeding will take place in the city nearest to your BUSINESS in which JAMS maintains an office and facility for arbitration, or at such other location as may be mutually agreed upon by the parties. 3. Any claims under the North Dakota Franchise Investment Law may be brought in the State of North Dakota. 4. The North Dakota Securities Commissioner has held that requiring franchisees to consent to the jurisdiction of courts outside of North Dakota or requiring the franchisee to consent to a limitation of claims are unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. 5. The North Dakota Securities Commissioner has held that franchise agreements, which specify that they are to be governed by the laws of a state other than North Dakota, are unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Therefore, the Franchise Agreement and Area Development Agreement will be governed by North Dakota law. 6. You will not be required to sign a general release if you renew your franchise since such requirement is unenforceable under Section 51-19-09 of the North Dakota Franchise Investment Law. 7. The North Dakota Securities Commissioner has held that a waiver of trial by jury is unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Therefore, any such waiver in the Franchise Agreement and Area Development Agreement is unenforceable. FDD – 2014 14877235.8 04/17/14 G - 16 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® FRANCHISE AGREEMENT FOR THE STATE OF NORTH DAKOTA This Amendment pertains to franchises sold in the State of North Dakota and is for the purpose of complying with North Dakota statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following: 1. Pursuant to Section 51-19-09 of the North Dakota Franchise Investment Law, a franchisee may not be required to sign a general release as a condition of renewal under Article 4.B(vii) of the Franchise Agreement. Accordingly, Article 14.5 of the Franchise Agreement is amended and restated in its entirety as follows 14.5 AGREEMENTS. If you satisfy all of the other conditions to the grant of a successor franchise, you and your Owners agree to execute the form of franchise agreement and any ancillary agreements we are then customarily using in connection with the grant of successor franchises for PLANET FITNESS businesses. Failure by you or your Owners to sign such agreements and deliver them to us for acceptance and execution within thirty (30) days after their delivery to you will be deemed an election not to acquire a successor franchise. 2. Notwithstanding anything contained in Article 19.12 of the Franchise Agreement, any arbitration proceeding must take place in the city nearest to the your BUSINESS in which JAMS maintains an office and facility for arbitration, or at such other location as may be mutually agreed upon by the parties. 3. Article 19.13 of the Franchise Agreement is revised by replacing “New Hampshire” with “North Dakota.” 4. Covenants not to compete such as those mentioned in Article 16 of the Franchise Agreement may be subject to Section 9-08-06 of the North Dakota Century Code and unenforceable in the State of North Dakota if contrary to Section 9-08-06. 5. The North Dakota Securities Commissioner has held that requiring franchisees to consent to the jurisdiction of courts outside of North Dakota is unfair, unjust and inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Accordingly, Article 19.14 of the Franchise Agreement is amended and restated in its entirety as follows: 19.14 CONSENT TO JURISDICTION. Subject to Article 19.12. hereof, you and your Owners agree that we may institute any action against you or your Owners in any state or federal court of general jurisdiction in North Dakota and you (and each Owner) irrevocably submit to the jurisdiction of such courts and waive any objection you (or he or she) may have to either the jurisdiction of or venue in such courts. FDD – 2014 14877235.8 04/17/14 G - 17 PLANET FITNESS® 6. Article 19.15 (Waiver of Punitive Damages, Jury Trial and Class Actions) is hereby deleted from the Franchise Agreement. 7. Agreement. Article 19.17 (Limitations of Claims) is hereby deleted from the Franchise 8. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of the North Dakota Franchise Investment Law are met independently without reference to this Amendment. 9. Except as amended herein, the Franchise Agreement will be construed and enforced in accordance with its terms. Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G - 18 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® AREA DEVELOPMENT AGREEMENT FOR THE STATE OF NORTH DAKOTA This Amendment pertains to franchises sold in the State of North Dakota and is for the purpose of complying with North Dakota statutes and regulations. Notwithstanding anything which may be contained in the body of the Area Development Agreement to the contrary, the Agreement is amended to include the following: 1. Covenants not to compete such as those mentioned in Article 13 of the Area Development Agreement may be subject to Section 9-08-06 of the North Dakota Century Code and unenforceable in the State of North Dakota if contrary to Section 9-08-06. 2. Notwithstanding anything contained in Article 19 of the Area Development Agreement, any arbitration proceeding must take place in the city nearest to the your BUSINESS in which JAMS maintains an office and facility for arbitration, or at such other location as may be mutually agreed upon by the parties. 3. Article 20 of the Area Development Agreement is revised by replacing “New Hampshire” with “North Dakota.” 4. The North Dakota Securities Commissioner has held that requiring franchisees to consent to the jurisdiction of courts outside of North Dakota is unfair, unjust or inequitable within the intent of Section 51-19-09 of the North Dakota Franchise Investment Law. Accordingly, Article 21 of the Area Development is amended and restated in its entirety as follows: 21. Consent to Jurisdiction. Subject to Article 19 hereof, you and your Owners agree that we may institute any action against you or your Owners in any state or federal court of general jurisdiction in North Dakota and you (and each Owner) irrevocably submit to the jurisdiction of such courts and waive any objection you (or he or she) may have to either the jurisdiction of or venue in such courts. 5. Article 23 (Waiver of Punitive Damages, Jury Trial and Class Actions) is hereby deleted from the Area Development Agreement. 6. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of the North Dakota Franchise Investment Law are met independently without reference to this Amendment. 7. Except as amended herein, the Area Development Agreement will be construed and enforced in accordance with its terms. FDD – 2014 14877235.8 04/17/14 G - 19 PLANET FITNESS® Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G - 20 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF RHODE ISLAND The following applies to franchises and franchisees subject to Rhode Island statutes and regulations. Item numbers correspond to those in the main body of the Disclosure Document: Item 17. Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that “A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this State or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act.” FDD – 2014 14877235.8 04/17/14 G - 21 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® FRANCHISE AGREEMENT FOR THE STATE OF RHODE ISLAND This Amendment pertains to franchises sold in the State of Rhode Island and is for the purpose of complying with Rhode Island statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following: 1. Section 19-28.1-14 of the Rhode Island Franchise Investment Act provides that “A provision in a franchise agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under this Act.” 2. Except as amended herein, the Franchise Agreement will be construed and enforced in accordance with its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its _________________________ _____________________ FDD – 2014 14877235.8 04/17/14 G - 22 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF VIRGINIA Item 17. In recognition of the restrictions contained in Section 13.1-564 of the Virginia Retail Franchising Act, the Franchise Disclosure Document for Pla-Fit Franchise, LLC for use in the Commonwealth of Virginia shall be amended as follows: “Pursuant to Section 13.1-564 of the Virginia Retail Franchising Act, it is unlawful for a franchisor to cancel a franchise without reasonable cause. If any ground for default or termination stated in the franchise agreement does not constitute “reasonable cause,” as that term may be defined in the Virginia Retail Franchising Act or the laws of Virginia, that provision may not be enforceable.” “The cross default provisions in Section 16 of the Franchise Agreement entitled “Breach of Other Agreements,” Section 8 of the Area Development Agreement entitled “Default and Termination,” and their corresponding disclosures in Item 17 of the Disclosure Document are hereby deleted in their entirety.” FDD – 2014 14877235.8 04/17/14 G - 23 PLANET FITNESS® ADDENDUM TO PLANET FITNESS® DISCLOSURE DOCUMENT FOR THE STATE OF WASHINGTON 1. Item 17 of the Franchise Disclosure Document is hereby amended by the addition of the following language: Washington law RCW 19.100.180(2)(i) and (j) provides certain rights and remedies to franchisees in connection with termination or renewal of a franchise. More specifically, Washington law provides that it is unlawful for a franchisor to: (i) Refuse to renew a franchise without fairly compensating the franchisee for the fair market value, at the time of expiration of the franchise, of the franchisee’s inventory, supplies, equipment, and furnishings purchased from the franchisor, and goodwill, exclusive of personalized materials which have no value to the franchisor, and inventory, supplies, equipment and furnishings not reasonably required in the conduct of the franchised business; provided, that compensation need not be made to the franchisee for goodwill if (i) the franchisee has been given one year’s notice of nonrenewal, and (ii) the franchisor agreed in writing not to enforce any covenant which restrains the franchisee from competing with the franchisor; provided further, that the franchisor may offset against amounts owed to the franchisee under this subsection any amounts owed by the franchisee to the franchisor. (j) Terminate the franchise prior to the expiration of its term except for good cause. Good cause shall include, without limitation, the failure of the franchisee to comply with lawful and material provisions of the franchise or other agreement between the franchisor and the franchisee, and to cure such default after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days to cure such default, or if such default cannot reasonably be cured within 30 days, the failure of the franchisee to initiate within 30 days substantial and continuing action to cure such default; provided, that after three willful and material breaches of the same term of the franchise occurring within a 12-month period, for which the franchisee has been given notice and an opportunity to cure as provided in this subsection, the franchisor may terminate the agreement upon any subsequent willful and material breach of the same term within the 12-month period without providing notice or opportunity to cure; provided further, that the franchisor may terminate the franchise without giving prior notice or opportunity to cure a default if the franchisee: (i) is adjudicated bankrupt or insolvent; (ii) makes an assignment for the benefit of creditors; (iii) voluntarily abandons the franchise business; (iv) or is convicted of or pleads guilty or no contest to a charge of violating any law relating to the franchise business. Upon termination for good cause, the franchisor shall purchase from the franchisee at a fair market value at the time of termination, the franchisee’s inventory and supplies, exclusive of (i) personalized materials which have no value to the franchisor; (ii) inventory and supplies not reasonably required in the conduct of the franchise business; and (iii) if the franchisee is to retain control of the premises of the franchise business, any inventory and supplies not purchased from the franchisor or on his express requirement; provided, that the franchisor may offset against amounts owed to the franchisee under this subsection any amounts owed by the franchisee to the franchisor. FDD – 2014 14877235.8 04/17/14 G - 24 PLANET FITNESS® 2. Washington law RCW 19.100.180(2)(g) provides that it is unlawful to require the franchisee to assent to a release, assignment, violation or waiver which would relieve the franchisor from any liability imposed by the Washington Franchise Investment Protection Act. FDD – 2014 14877235.8 04/17/14 G - 25 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® FRANCHISE AGREEMENT FOR THE STATE OF WASHINGTON This Amendment pertains to franchises sold in the State of Washington and is for the purpose of complying with Washington statutes and regulations. Notwithstanding anything which may be contained in the body of the Franchise Agreement to the contrary, the Agreement is amended to include the following: 1. Article 19.13. of the Franchise Agreement is amended by the addition of the following language: If any of the provisions in the Franchise Disclosure Document or Franchise Agreement are inconsistent with the relationship provisions of R.C.W. 19.100.180 or other requirements of the Washington Franchise Investment Protection Act, the provisions of the Act will prevail over the inconsistent provisions of the Franchise Disclosure Document and Franchise Agreement with regard to any franchise sold in Washington. 2. Article 19.16. of the Franchise Agreement is amended by the addition of the following language: A release or waiver of rights executed by you will not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may not be enforceable. 3. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Washington Franchise Investment Protection Act are met independently without reference to this Amendment. 4. Except as amended herein, the Franchise Agreement will be construed and enforced in accordance with its terms. FDD – 2014 14877235.8 04/17/14 G - 26 PLANET FITNESS® Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G - 27 PLANET FITNESS® AMENDMENT TO PLANET FITNESS® AREA DEVELOPMENT AGREEMENT FOR THE STATE OF WASHINGTON This Amendment pertains to franchises sold in the State of Washington and is for the purpose of complying with Washington statutes and regulations. Notwithstanding anything which may be contained in the body of the Area Development Agreement to the contrary, the Agreement is amended to include the following: 1. Article 20 of the Area Development Agreement is amended by the addition of the following language: If any of the provisions in the Franchise Disclosure Document or Franchise Agreement are inconsistent with the relationship provisions of R.C.W. 19.100.180 or other requirements of the Washington Franchise Investment Protection Act, the provisions of the Act will prevail over the inconsistent provisions of the Franchise Disclosure Document and Franchise Agreement with regard to any franchise sold in Washington. 2. Each provision of this Amendment is effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Washington Franchise Investment Protection Act are met independently without reference to this Amendment. 3. Except as amended herein, the Area Development Agreement will be construed and enforced in accordance with its terms. Each of the undersigned hereby acknowledges having read and understood this Amendment and consents to be bound by all of its terms. YOU: WE: PLA-FIT FRANCHISE, LLC By Its By Its FDD – 2014 14877235.8 04/17/14 G - 28 PLANET FITNESS® PLANET FITNESS® EXHIBIT “H” TO THE DISCLOSURE DOCUMENT GENERAL RELEASE FDD – 2014 14877235.8 04/17/14 H-1 PLANET FITNESS® FORM OF RELEASE AGREEMENT (Subject to Change by Pla-Fit Franchise, LLC) GENERAL RELEASE – NEW BUSINESS This General Release (“Release”) is made and entered into on this day of , 20 by and between PLA-FIT FRANCHISE LLC, a New Hampshire limited liability company with its principal place of business at 26 Fox Run Road, Newington, NH 03801 (“Franchisor”) on the one hand, and the following franchisees, developers, and principal owners, on the other: Franchisees: __________________________________________ __________________________________________ __________________________________________ __________________________________________ Developers: __________________________________________ __________________________________________ Principal Owners: __________________________________________ __________________________________________ __________________________________________ WITNESSETH: WHEREAS, Franchisor and Franchisees are parties to one or more existing Planet Fitness Franchise Agreements (the “Franchise Agreements”), each granting one of the Franchisees the right to operate a PLANET FITNESS business under Franchisor’s proprietary marks and system at a certain location; and WHEREAS, Franchisor and Developers (if any) are parties to one or more existing Planet Fitness Area Development Agreements (the “Development Agreements”, or together with the Franchise Agreements the “Prior Agreements”), each granting one of the Developers the right to develop a specified number of PLANET FITNESS businesses in a designated development area; and WHEREAS, Franchisees, Developers, or one of their affiliates wishes to obtain the grant from Franchisor of additional franchises or development rights (the “New Rights”); and WHEREAS, Franchisor requires this general release from Franchisees, Developers, and the Principal Owners, described above, as a condition for granting such rights. NOW THEREFORE, in consideration of the mutual covenants and conditions contained in this Release, and other good and valuable consideration, receipt of which is hereby acknowledged by each of the parties hereto, the parties hereto agree as follows: FDD – 2014 14877235.8 04/17/14 H-2 PLANET FITNESS® 1. Release. Franchisees, Developers, and the Principal Owners, for themselves and their successors, predecessors, assigns, beneficiaries, executors, trustees, agents, representatives, employees, officers, directors, shareholders, partners, members, subsidiaries and affiliates (jointly and severally, the “Releasors”), irrevocably and absolutely release and forever discharge Franchisor and its successors, predecessors, assigns, beneficiaries, executors, trustees, agents, representatives, employees, officers, directors, shareholders, partners, members, subsidiaries and affiliates (jointly and severally, the “Releasees”), of and from all claims, obligations, actions or causes of action (however denominated), whether in law or in equity, and whether known or unknown, present or contingent, for any injury, damage, or loss whatsoever arising from any acts or occurrences occurring as of or prior to the date of this Release relating to the Prior Agreements, the businesses operated under the Prior Agreements, and/or any other previously existing agreement between any of the Releasees and any of the Releasors, including but not limited to, any alleged violations of any deceptive or unfair trade practices laws, franchise laws, or other local, municipal, state, federal, or other laws, statutes, rules or regulations, and any alleged violations of the Franchise Agreement or any other related agreement. The Releasors, and each of them, also covenant not to sue or otherwise bring a claim against any of the Releasees regarding any of the claims being released under this Release. This Release does not apply to the New Rights or any offer, grant or sale of franchise or development rights to Franchisees or Principal Owners from this day forward. 2. Representations and Warranties. The Releasors hereby represent, warrant and covenant to the Franchisor that: a. As of the date of this Release, the Franchisees and Developers listed herein constitute each and every entity (i) in which any of the Releasors have an interest related to any agreement with Franchisor and (ii) that is party to an agreement with any of the Releasees. In the event that there is a breach of this representation and warranty by any of the Releasors, such entity shall be bound by the terms and conditions of Section 1 of this Release as if such entity were a party hereto and the Principals Owners and such entity shall immediately execute a release in the same form as contained in Section 1 hereof on behalf of all such entities. b. Each party whose signature is affixed hereto in a representative capacity represents and warrants that he or she is authorized to execute this Agreement on behalf of and to bind the entity on whose behalf his or her signature is affixed. In the event that there is a breach of any representation or warranty of authority to execute this Release, the Releasors shall indemnify and hold harmless the Releasees from any and all loss or damage, including reasonable attorneys’ fees, incurred as result of the breach of such representation and warranty. FDD – 2014 14877235.8 04/17/14 H-3 PLANET FITNESS® 3. Acknowledgement of Release of Unknown Claims. The Releasors hereby acknowledge that the release of claims set forth in Section 1 is intended to be a full and unconditional general release, as that phrase is used and commonly interpreted, extending to all claims of any nature, whether or not known, expected or anticipated to exist in favor of the Releasors against the Releasees. In making this voluntary express waiver, the Releasors acknowledge that claims or facts in addition to or different from those which are now known to exist may later be discovered and that it is the Releasors’ intention to hereby fully and forever settle and release any and all matters, regardless of the possibility of later discovered claims or facts. Each of the Releasors expressly acknowledge that they are familiar with the provisions of Section 1542 of the California Civil Code which provides as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing a release, which if known by him or her must have materially affected his or her settlement with the debtor. Each of the Releasors hereby specifically and expressly waive all rights that they may have under Section 1542 of the California Civil Code or any similar provision of law in any other jurisdiction. This Release is and shall be and remain a full, complete and unconditional general release. The Releasors further acknowledge and agree that no violation of this Release shall void the releases set forth in this Release. 4. Voluntary Nature of Agreement. Releasors acknowledge and agree that they have entered into this Release voluntarily and without any coercion. Releasors further represent that they have had the opportunity to consult with an attorney of their own choice, that they have read the terms of this Release, and they fully understand and voluntarily accept the terms. 5. Governing Law and Jurisdiction. This Release will be construed and enforced in accordance with the law of the state of New Hampshire. IN WITNESS WHEREOF, the parties hereto have executed this Release as of the date first above written. PLA-FIT FRANCHISE, LLC FRANCHISEE Franchisee Name: By: By: Name: Name: Title: Title: FDD – 2014 14877235.8 04/17/14 H-4 PLANET FITNESS® FRANCHISEE Franchisee Name: By: Name: Title: FRANCHISEE Franchisee Name: By: Name: Title: FRANCHISEE Franchisee Name: By: Name: Title: DEVELOPER Developer Name: By: Name: Title: FDD – 2014 14877235.8 04/17/14 H-5 PLANET FITNESS® DEVELOPER Developer Name: By: Name: Title: PRINCIPAL OWNER Name: Signature: PRINCIPAL OWNER Name: Signature: PRINCIPAL OWNER Name: Signature: FDD – 2014 14877235.8 04/17/14 H-6 PLANET FITNESS® PLANET FITNESS® EXHIBIT “I” TO THE DISCLOSURE DOCUMENT VISIONARY LICENSE AGREEMENT RADIANT SOFTWARE AGREEMENT PURCHASE ORDER FOR VISIONARY PRODUCTS AND SOFTWARE MERCHANT AGREEMENTS FDD – 2014 14877235.8 04/17/14 I-1 PLANET FITNESS® VISIONARY LICENSE AGREEMENT TERMS AND CONDITIONS FOR LICENSE AND USE OF VISIONARYTM SOFTWARE These Terms and Conditions for License and Use of VisionaryTM Software (the “Agreement”) are entered into by PFIP, LLC (“Licensor”) and each of the entities listed in Attachment 1 to this Agreement (each such entity is a “Licensee” and they are, collectively, the “Licensees”). Each Licensee acknowledges that the Licensees are affiliates by virtue of the fact that they control, are controlled by, or are under common control with the other entities included on such list. The individual signing this Agreement on behalf of the Licensees represents and warrants that he/she has the power and authority to execute this Agreement on behalf of each Licensee. This Agreement is effective on the date on which the individual signing this agreement on behalf of the Licensees executes this Agreement (“Effective Date”). Each of Licensor and the Licensees is a “Party” and they are, collectively, the “Parties”. 1. Definitions. “Confidential Information” shall mean all written or oral information, disclosed by Licensor to Licensee, related to the operations of Licensor, or a third party, that has been identified as confidential or that by the nature of the information or the circumstances surrounding disclosure ought reasonably to be understood to be proprietary and/or confidential. Without limiting the generality of the foregoing, the VisionaryTM Software, the Visionary Data and the Documentation shall be considered Confidential Information of Licensor and, where appropriate, its third-party licensor. “Conversion” shall mean conversion from one Licensor approved dues processing and membership information software and system to a replacement dues processing and membership information software and system and to an alternate payment processor(s). “Data Security Safeguards” shall mean (i) the Payment Rules, together with all other standards, guidelines, practices or procedures required by the Payment Networks and by Licensor's Payment Processor(s), as such may be amended from time to time, including, but not limited to the standards incorporated in the Payment Card Industry Data Security Standards ("PCI-DSS"); (ii) all rules and operating guidelines concerning the disclosure, use and protection of personal and financial information adopted by the National Automated Clearing House Association (“NACHA”) to the extent applicable to Licensee’s payment processing activities; and (iii) Licensor’s security guidelines, all as may be modified from time to time. “Documentation” shall mean the user guides, manual, on-line help, software release notes, instructions, performance descriptions, design documents, test materials, operation guides, training materials and other materials provided by the Licensor in written or electronic form referring to or relating to the use of the VisionaryTM Software. “FDD” shall mean the Franchise Disclosure Document embodying the franchise agreement between PLA-Fit Franchise LLC and Licensee. “Governmental Authority” means any applicable federation, nation, state, sovereign or government, any federal, supranational, regional, state, local or municipal political subdivision, any governmental or administrative body, instrumentality, department or agency, or any court, administrative hearing body, arbitrator, commission or other similar dispute resolving panel or body, and any other entity exercising executive, legislative, judicial, regulatory, taxing or administrative functions of a government with jurisdiction over the applicable matter. “Intellectual Property Rights” shall mean all intellectual property rights worldwide arising under statutory or common law or arising by contract whether or not perfected, now existing or hereafter filed, issued or acquired, including, without limitation, all patent rights, trade secret rights, copyrights, trademark rights, mask rights, moral rights, or any other similar rights and privileges relating to intangible property. 1 “Laws” means any laws, statutes, ordinances, codes, rules, regulations, published standards, permits, judgments, decrees, writs, injunctions, rulings, orders, administrative guidance and/or other requirements of any Governmental Authority. “Member” means a member of Licensee’s fitness club(s). “Payment Networks” shall mean Visa, MasterCard, American Express and any credit or debit card network issuing credit or debit cards or their duly authorized entities, agents, or affiliates, together with the National Automated Clearing House Association. “Payment Processor” shall mean RBS Citizens, N.A., WorldPay US, Inc., Jack Henry & Associates, Inc. or such other credit card, debit card and/or ACH processors whose services Licensor may require Licensee to utilize, as well as payment gateway service providers (including Maas Global Solutions Corporation). “Payment Rules” shall mean the operating rules and regulations of the Payment Processors and any applicable Payment Network, as in effect from time to time. “Personal Information” shall mean: (a) information, data and materials relating to identified or identifiable individuals, including enrollment records, billing and payment records, and other personal information, data and materials relating to Members and financial transactions with Payment Networks and Payment Processors, including “Cardholder Data” (as such term is defined in the Data Security Guidelines (as defined above)); and (b) other financial or personal information in relation to Members. “Radiant Terminal” shall mean the Radiant hardware purchased by Licensee from Retail Control Systems, Inc. (“RCS”) for use with the VisionaryTM Software. “Support” shall mean error fixes and technical support that Licensor or its designee generally makes available to licensees of the VisionaryTM Software. “TOSD” shall mean Twin Oaks Software Development, Inc. “TOSD Agreements” shall mean the Software License and Dues Processing Agreements, the Franchisee Authorization and Agreement, and Terms and Conditions for License and Use of Software all as entered into between Licensee and TOSD. “TOSD Data Retrieval Software” shall mean proprietary software owned and developed by TOSD and licensed to Licensee under the TOSD Agreements. “Visionary Ancillary Agreements” shall mean the various agreements in place between Licensee and RCS (or other supplier of the Radiant Terminals and other components of the Visionary System), Radiant Systems (“Radiant”), payment gateway providers such as Maas Global Solutions Corporation, Payment Processors and Payment Networks. “VisionaryTM Data” shall mean all data and information created by, captured by or uploaded to the VisionaryTM System (or part thereof) or otherwise derived from the use by Licensee of the VisionaryTM System or any part of it. “VisionaryTM Software” shall mean the software supplied or made available by Licensor pursuant to this Agreement. “VisionaryTM System” shall mean Licensor’s proprietary branded VisionaryTM hardware, including the Radiant Terminals, the VisionaryTM Software, and other third-party software licensed to and services provided to Licensee for use with the VisionaryTM Software and the Radiant Terminals. 2 2. Grant of License. 2.1 Licensor grants to Licensee a non-exclusive, nonassignable, non-transferable, nonsublicensable, terminable, limited license during the Term to access and use the VisionaryTM Software only as embedded in or to be used on Radiant Terminals purchased by Licensee, and not on any other hardware, and solely for Licensee’s ordinary business purposes as a franchisee of PLA-Fit Franchise, LLC. Licensor also grants to Licensee a non-exclusive, nonassignable, non-transferable, non-sublicensable, terminable, limited license during the Term to use the Documentation in order to access and use the VisionaryTM Software as permitted under this Agreement. 2.2 Although Licensee has the right to transfer the Radiant Terminals, Licensee has no right to transfer the VisionaryTM Software or the Documentation for use with the Radiant Terminals to any third party. Accordingly, Licensee must notify Licensor in writing prior to the transfer of any of the Radiant Terminals and permit Licensor to remotely disable the VisionaryTM Software at the time of transfer. Licensee must also return the Documentation to Licensor at the time of transfer. 2.3 Licensee agrees not to use the VisionaryTM Software, the VisionaryTM System or the VisionaryTM Data for any purpose that would be in violation of the Data Security Safeguards or Laws. A breach of this Section 2.3 entitles Licensor to immediately terminate the limited licenses granted in Section 2.1 and 2.7. 2.4 Licensee acknowledges and agrees that all Intellectual Property Rights in and to the VisionaryTM Software and Documentation are owned exclusively by Licensor and its third-party licensors, are not being sold, assigned, or transferred to Licensee, are being licensed to Licensee subject to all terms, conditions, limitations, and provisions hereof, and may only be used for the purposes expressly set forth herein, and for no other purposes. Licensee shall not have the right, and no rights are granted, to disassemble, duplicate or copy (in whole or in part), assign, sell, transfer, license, sublicense, or create derivative works from the VisionaryTM Software and Documentation or any portion of the VisionaryTM Software and Documentation. Upon termination of the license for the Visionary Software, Licensee shall immediately cease any use of the VisionaryTM Software, shall delete or return all copies of such VisionaryTM Software and the Documentation, shall certify in writing to Licensor that it has ceased any such use and that it has deleted or returned all copies, and shall permit the Licensor to remotely disable the VisionaryTM Software if Licensor so chooses. 2.5 The VisionaryTM Software and VisionaryTM Documentation comprise proprietary Confidential Information of Licensor and/or its third-party licensors, shall be held in confidence by Licensee and shall not be disclosed by Licensee to third parties, unless disclosure is required by law or legal process. In response to such legal requirements, Licensee shall promptly notify Licensor in advance of such disclosure and reasonably cooperate in attempts to maintain the confidentiality of the VisionaryTM Software and VisionaryTM Documentation. 2.6 Licensee agrees to use the VisionaryTM Software in accordance with Licensor’s guidelines, as amended from time to time, and in accordance with the guidelines for the use of the Radiant Terminal that have been provided by RCS, Radiant and/or Licensor. 2.7 Licensee acknowledges and agrees that the VisionaryTM Data comprises proprietary Confidential Information of Licensor. Licensor grants to Licensee a non-exclusive, nonassignable, non-transferable, non-sublicensable, terminable, limited license during the Term to access and use the VisionaryTM Data solely for Licensee’s ordinary business purposes as a franchisee in good standing of PLA-Fit Franchise, LLC. Licensee acknowledges and agrees that all Intellectual Property Rights in and to the VisionaryTM Data are owned exclusively by Licensor, are not being sold, assigned, or transferred to Licensee, are being licensed to Licensee subject to all terms, conditions, limitations, and provisions hereof, and may only be used for the purposes expressly set forth herein, and for no other purposes. Licensee shall not have the right, and no rights are 3 granted, to disassemble, duplicate or copy (in whole or in part), assign, sell, transfer, license, sublicense, or create derivative works from the VisionaryTM Data or any portion of the VisionaryTM Data. Licensee acknowledges and agrees that Licensor shall have the right, without prior notice to Licensee, to retrieve VisionaryTM Data from Licensee’s computer systems as Licensor deems necessary or desirable, including the right to obtain such information from vendors of Licensor and Licensee (eg TOSD, RCS or Payment Processors) and Licensee agrees to fully cooperate with such efforts. On termination of the limited license granted hereunder for any reason whatsoever, Licensee shall immediately cease any use of the VisionaryTM Data, shall delete or return all copies of such VisionaryTM Data, and shall certify in writing to Licensor that it has ceased any such use and that it has deleted or returned all copies. 2.8 Licensee understands and acknowledges that upon termination of the limited licenses granted hereunder, for any reason whatsoever, Licensor may remotely disable the VisionaryTM Software. 3. Fees. For the rights granted in this Agreement, Licensee shall pay to Licensor the fees set forth in Attachment 2 to this Agreement, if any, in accordance with the payment terms set forth therein. 4. Support. Licensor or its designee shall provide to Licensee Support that Licensor generally provides to other licensees of the VisionaryTM Software. Licensee acknowledges that Licensor may, at any time and in its sole discretion, update or modify the VisionaryTM Software or discontinue updating and/or supporting the VisionaryTM Software. In the case of an update or modification, Licensee agrees (i) to allow Licensor or its designee to automatically install the update or modification on the Radiant Terminal on which the VisionaryTM Software is used or, (ii) at Licensor’s request, to itself promptly install the update or modification locally with media provided by Licensor. Any update or modification to the VisionaryTM Software shall become part of the VisionaryTM Software and shall be subject to this Agreement. 5. DISCLAIMER OF WARRANTIES. THE VISIONARYTM SOFTWARE IS PROVIDED “AS IS” WITHOUT WARRANTY, AND LICENSOR, ITS LICENSORS AND THEIR AFFILIATES DISCLAIM ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE WITH REGARD TO THE VISIONARYTM SOFTWARE, THE VISIONARYTM DOCUMENTATION, THE VISIONARYTM SYSTEM AND THE VISIONARYTM DATA, AND FURTHER DISCLAIM ANY WARRANTIES THAT THE VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR THE TOSD DATA RETRIEVAL SOFTWARE WILL OPERATE, WILL OPERATE WITHOUT INTERRUPTION, OR WILL ACCURATELY OR COMPLETELY RETRIEVE OR PROVIDE DATA (IN WHOLE OR IN PART) WHEN USED IN LICENSEE’S ENVIRONMENT. LICENSOR, ITS LICENSORS AND THEIR AFFILIATES SHALL NOT BE HELD RESPONSIBLE FOR MISUSE OR INCORRECT OPERATION OF THE VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR THE TOSD DATA RETRIEVAL SOFTWARE, USE OF THE VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR TOSD DATA RETRIEVAL SOFTWARE BY UNTRAINED PERSONNEL, IMPROPER ENTRY OF DATA IN CONNECTION WITH THE VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR THE TOSD DATA RETRIEVAL SOFTWARE, OR MODIFICATION OF SETTINGS OR OTHER BEHAVIOR AFFECTING DATA SECURITY. LICENSOR, ITS LICENSORS AND THEIR AFFILIATES SHALL NOT BE HELD LIABLE OR RESPONSIBLE FOR CONDITIONS BEYOND THEIR CONTROL THAT MAY AFFECT THE PERFORMANCE OR ACCESSIBILITY OF THE VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR THE TOSD DATA RETRIEVAL SOFTWARE OR THE DATA CAPTURED BY OR CONTAINED THEREIN, INCLUDING, BUT NOT LIMITED TO, LOSS OR INTERUPTION OF POWER, OPERATING ENVIRONMENT FACTORS, PROGRAM VIRUSES AND MALWARE, INTERNET SERVICE DISRUPTIONS, ENVIRONMENTAL CONDITIONS AND OTHER NATURAL EVENTS, AND UNAUTHORIZED ACCESS OR DATA SECURITY BREACHES. 4 6. Compliance with Laws, Data Security, the TOSD Agreements and VisionaryTM Ancillary Agreements. Licensee shall comply with the Data Security Safeguards, Laws, the TOSD Agreements and the VisionaryTM Ancillary Agreements. Licensee agrees to provide full indemnity to Licensor, its successors and assigns, officers, directors, shareholders, agents, affiliates (“Indemnified Parties”) for all claims, losses, fines, fees, assessments, suits, damages, liability, loss (including without limitation losses associated with loss of PCI-DSS compliant status, penalties or fines, fees, assessment, attorneys fees, consulting and internal costs, or other expenses (including any audit, investigation or compliance-related expenses or customer notification costs) that may be threatened, result from, arise from, or are a consequence of, in whole or in part: (i) Licensee’s breach of this Section 6; (ii) any use by Licensee of the TOSD Data Retrieval Software, the VisionaryTM Software,, the VisionaryTM System or VisionaryTM Data; or (iii) any assistance rendered by Licensor to Licensee during a Conversion. In consideration of Licensor’s provision of the VisionaryTM Software and the licenses granted hereunder, the Licensee hereby remises, releases and forever discharges the Indemnified Parties, of and from all manner of action and actions, cause and cause of actions, suits, debts, sums of money, bonds, liens, bills, controversies, damages, judgments, claims, liabilities, and demands whatsoever, in law and in equity, which against the Indemnified Parties, the Licensee ever had, now has or which Licensee hereinafter can, shall or may have, arising out of or relating to the license of the VisionaryTM Software and VisionaryTM Data hereunder, the use of the VisionaryTM System, and any assistance rendered by the Indemnified Parties to Licensee during any Conversion. 7. Limitation of Liability. LICENSOR’S, ITS LICENSORS’ AND THEIR AFFILIATES’ LIABILITY FOR ALL CLAIMS OF ANY KIND, WHETHER BASED ON CONTRACT, INDEMNITY, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, FAILURE OF A REMEDY TO ACCOMPLISH ITS ESSENTIAL PURPOSE, OR OTHERWISE, FOR ALL LOSSES OR DAMAGES ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM THIS AGREEMENT, OR FROM THE PERFORMANCE OR BREACH THEREOF, OR FROM THE VISIONARYTM SOFTWARE OR ANY PART THEREOF, FROM THE VISIONARYTM DOCUMENTATION, FROM THE VISIONARYTM DATA OR FROM ANY SERVICE FURNISHED HEREUNDER, OR FROM THE OPERATION OF THE VISIONARYTM SYSTEM SHALL, IN THE AGGREGATE, IN NO CASE EXCEED THE FEES PAID BY LICENSEE TO LICENSOR HEREUNDER. LICENSOR, ITS LICENSORS AND THEIR AFFILIATES SHALL NOT BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES WHICH MAY BE SUSTAINED BY LICENSEE OR ANY OTHER PERSON OR ENTITY AS A RESULT OF ANY USE OF THE VISIONARYTM SOFTWARE OR THE VISIONARYTM SYSTEM OR THE VISIONARYTM DATA, WHETHER SOUGHT BASED UPON CONTRACT, TORT (INCLUDING NEGLIGENCE, STRICT LIABILITY, OR OTHER TORT THEORY), OR UNDER ANY OTHER THEORY OF LAW, EQUITY, OR OTHERWISE. 8. Term and Termination. 8.1 Licensee may terminate the licenses granted hereunder at any time by removing and destroying any VisionaryTM Software installed by Licensee, together with all copies thereof, and notifying Licensor in writing that all use of the VisionaryTM Software and VisionaryTM Data has ceased and that the copies have been destroyed. 8.2 The licenses granted hereunder shall automatically terminate if Licensee’s FDD expires and is not renewed by Licensor or the FDD is terminated. The license granted under Section 2.1 shall automatically terminate if Licensee transfers the Radiant Terminal on which the VisionaryTM Software is used. 8.3 Licensor may terminate the licenses granted hereunder on notice to Licensee in any of the following situations: (a) Licensee is in breach of any of the VisionaryTM Ancillary Agreements or TOSD Agreements and such breach would permit the other party to terminate the agreement; (b) Licensee breaches Section 2.3; (c) as permitted in Section 9; (d) Licensee breaches any other provision of this Agreement and fails to cure the breach within fourteen (14) days of receiving notice from Licensor; or (e) in the event that the Licensee becomes insolvent or enters bankruptcy prior to payment of all amounts due under Section 3 hereof. 5 8.4 On termination of the licenses granted hereunder for any reason whatsoever, Licensee shall immediately take all steps necessary to allow Licensor to disable, delete and remove the VisionaryTM Software, the VisionaryTM Documentation and the VisionaryTM Data from Licensee’s computer systems, including but not limited to the Radiant Terminal. 8.5 The provisions of Sections 1, 2.4, 2.5, 2.7 and 5 through 13 shall survive any termination of this Agreement. 9. Data Security Breach. If: (a) Licensee becomes aware of a breach of the security of the VisionaryTM System related to Licensee’s operations, (b) any Confidential Information of Licensor or Personal Information of Licensee’s Members is disclosed by Licensee in violation of Laws or the Data Security Safeguards, or (c) Licensee becomes aware that an unauthorized access, disclosure or use of such Confidential Information or Personal Information has occurred or is likely to occur as a result of an act or omission of Licensee (each such event, an “Information Security Breach”), Licensee shall immediately notify Licensor’s General Counsel of such Information Security Breach, and at Licensor’s discretion shall promptly: (a) investigate, remediate, and mitigate the effects of the Information Security Breach in accordance with information technology industry best practices and (b) provide Licensor with assurances satisfactory to Licensor that such Information Security Breach shall not recur. Additionally, if any Information Security Breach occurs and applicable Laws, the Data Security Safeguards or Licensor’s policies require notification of public authorities or of individuals whose data were so affected or require other remedial actions, or Licensor determines that notices (whether in Licensor’s or Licensee’s name) or other remedial measures are warranted, including Licensee responding to reasonable requests from Licensor regarding, and cooperating with Licensor or Payment Networks or Payment Processors in connection with, any investigation, incident management, media relations or law enforcement activities, and providing consumer remedies such as credit monitoring or ID theft insurance (the foregoing, collectively, the “Remedial Actions”), Licensee shall, at Licensor’s request undertake such Remedial Actions and shall cooperate with Licensor in undertaking Remedial Actions in accordance with information technology industry best practices. Licensee agrees to provide full indemnity to the Indemnified Parties for all claims, losses, fines, fees, assessments, suits, damages, liability, loss (including without limitation losses associated with loss of PCI-DSS compliant status, penalties or fines, fees, assessment, attorneys fees, consulting and internal costs, or other expenses (including any audit, investigation or compliance-related expenses or customer notification costs) that may result from, arise from, that may be threatened or that are a consequence of, in whole or in part, an Information Security Breach. In the event that Licensor determines in its reasonable discretion that Licensee is unable or unwilling to provide adequate Remedial Actions or that Licensee is not reasonably capable of complying with the Data Security Guidelines, or of deploying technology industry best practices to avoid future Security Breaches, Licensor may terminate the licenses and this Agreement on notice to Licensee. 10. Audit. Upon Licensor's written request, to confirm Licensee’s compliance with this Agreement, as well as any applicable laws, regulations and industry standards, Licensee grants Licensor or, upon Licensor’s election, a third party on Licensor's behalf, permission to perform an assessment, audit, examination or review of all controls in Licensee’s physical and/or technical environment in relation to all VisionaryTM Software, Confidential Information or Personal Information being handled pursuant to this Agreement. Licensee shall fully cooperate with such assessment by providing access to knowledgeable personnel, physical premises, documentation, and infrastructure. In addition, upon Licensor's written request, Licensee shall provide Licensor with the results of any audit by or on behalf of Licensee performed that assesses the effectiveness of Licensee’s information security program as relevant to the security and confidentiality of Confidential Information shared and Personal Information collected during the course of this Agreement. Licensor’s assessment, audit, examination or review shall not be more frequent than annually unless Licensor has a reasonable basis to believe that a Security Breach has occurred or that a material noncompliance with Section 2 exists, or unless the audit is required by Law or the Data Security Safeguards. 11. Indemnity. Licensee shall indemnify, defend and hold harmless the Indemnified Parties from all claims, losses, fines, fees, assessments, suits, damages, liability, loss (including without limitation losses associated with loss of PCI-DSS compliant status, penalties or fines, fees, assessment, attorneys 6 fees, consulting and internal costs, or other expenses (including any audit, investigation or compliancerelated expenses or customer notification costs) that may result from, arise from, that may be threatened or that are a consequence of, in whole or in part, a breach by Licensee of the terms of this Agreement. 12. Notices. Notices required or permitted to be given under this Agreement (such as any notice of breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested), to the respective Party at the following address set forth below or at such other address as such Party may hereafter notify the other Party in accordance with this Section. Each such notice shall be effective when actually received at the respective addresses specified below: Licensee: At the address set forth on the execution page below Licensor: PFIP, LLC 46 Fox Run Road Newington, NH 03801 Attention: General Counsel 13. Miscellaneous. 13.1 This Agreement shall be governed by the laws of the State of New Hampshire, without regard to its conflict of law provisions. The provisions of the United Nations Convention on the International Sale of Goods shall not apply to this Agreement. 13.2 Licensee may not assign this Agreement, or any of its rights and obligations hereunder, without the prior written consent of Licensor, which consent may be withheld for any reason. Licensor may freely assign this Agreement. 13.3 Licensor may modify this Agreement at any time on notice to Licensee, and, upon receipt of such notice, Licensee will be required to accept the terms of the modified agreement in order to continue using the VisionaryTM Software. In all other circumstances, this Agreement may only be modified with the written consent of the Parties. 13.4 If any provision of this Agreement is invalid or unenforceable for any reason in any jurisdiction, such provision shall be construed to have been adjusted to the minimum extent necessary to cure such invalidity or unenforceability. The invalidity or unenforceability of one or more of the provisions contained in this Agreement shall not have the effect of rendering any such provision invalid or unenforceable in any other case, circumstance or jurisdiction, or of rendering any other provisions of this Agreement invalid or unenforceable whatsoever. 13.5 No waiver under this Agreement shall be valid or binding unless set forth in writing and duly executed by an authorized representative of the Party against whom enforcement of such waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific matter described therein and shall in no way impair the rights of the Party granting such waiver in any other respect or at any other time. Any delay or forbearance by either Party in exercising any right hereunder shall not be deemed a waiver of that right. 13.6 This Agreement is the complete and exclusive statement of the agreement between Licensor and Licensee and supersedes any proposal or prior agreement, oral or written, and any other communications between Licensor and Licensee relating to the subject matter of the Agreement. 7 [signatures contained on following page] 8 By: __________________________________________________ Name: __________________________________________________ Title: __________________________________________________ Date: __________________________________________________ Address for Notice: _________________________________________ 9 ATTACHMENT 1 TM TO TERMS AND CONDITIONS FOR LICENSE AND USE OF VISIONARY SOFTWARE NAME AND ADDRESS OF LICENSEE ENTITIES 1 0 ATTACHMENT 2 TO TERMS AND CONDITIONS OF LICENSE AND USE OF VISIONARYTM SOFTWARE PRICING [NOT USED] 1 1 RADIANT SOFTWARE AGREEMENT EXHIBIT A Customer Affiliates Version 2010-11-30 Radiant Systems, Inc. CounterPoint SQL Software License Agreement EXHIBIT B CounterPoint SQL End User License Agreement and Limited Product Warranty [See Attached] Version 2010-11-30 Radiant Systems, Inc. CounterPoint SQL Software License Agreement END USER LICENSE AGREEMENT AND LIMITED PRODUCT WARRANTY 1. LICENSE GRANT. For purposes of this CounterPoint SQL End User License Agreement (the “Agreement”), “you” and “your” refers to the Company/Licensee identified on the first page of the Agreement and on Exhibit A, if applicable. In consideration of the license fees paid by you, Radiant Systems, Inc. (“Radiant”) and its licensors hereby grant to you, upon your acceptance of these terms and conditions, the following non-exclusive, nontransferable and limited revocable license to use the CounterPoint SQL software (the “Radiant Software”), including any third-party software licensed by Radiant on the CounterPoint CD or other media upon which the Radiant Software is provided, and accompanying user documentation and any upgrades to any of the foregoing provided by Radiant and/or its authorized resellers (collectively, the “Software”) only as authorized under this Agreement. The Software is licensed to you solely for your internal use to run your business only on a single standalone computer system or on the networked computer system (Wide Area Network or Local Area Network) located at one site for each license purchased (“Licensed Site”). You may relocate the Software to another site, such new site will replace the old Licensed Site and will become the new Licensed Site. All of the Software, and all copies thereof, located at the old Licensed Site must be moved to the new Licensed Site. Radiant and its authorized resellers will have no support or maintenance obligations with respect to the new Licensed Site until you have provided Radiant with written notice of the Licensed Site. You may make a reasonable number of backup copies of the Software for safekeeping at the Licensed Site in accordance with your normal backup procedures, and you may make one copy of the Software for testing purposes only, provided that you reproduce all copyright notices and other proprietary notices on each copy made for such purposes. 2. RESTRICTIONS. WITHOUT THE PRIOR WRITTEN CONSENT OF RADIANT, YOU MAY NOT: (i) ASSIGN, SUBLICENSE, TRANSFER, PLEDGE (OTHER THAN ROUTINE PLEDGES IN FAVOR OF YOUR LENDERS), LEASE, RENT OR SHARE YOUR RIGHTS TO USE THE SOFTWARE UNDER THIS AGREEMENT OR USE, COPY OR MODIFY THE SOFTWARE, IN WHOLE OR IN PART, EXCEPT AS EXPRESSLY PERMITTED UNDER THIS AGREEMENT; (ii) DECOMPILE, REVERSE ASSEMBLE OR OTHERWISE REVERSE ENGINEER THE SOTWARE, EXCEPT TO THE EXTENT YOU ARE EXPRESSLY AUTHORIZED TO DO SO UNDER APPLICABLE LAW; (iii) REPRODUCE, DISTRIBUTE OR REVISE THE SOFTWARE OR DOCUMENTATION, EXCEPT AS EXPRESSLY PERMITTED HEREIN; (iv) USE THE SOFTWARE TO PROVIDE FACILITY MANAGEMENT, SERVICE BUREAU OR OTHER ACCESS AND USE OF THE SOFTWARE TO THIRD PARTIES; (v) DISCLOSE TO ANY THIRD PARTY (OTHER THAN A RADIANT RESELLER OR PAYMENT GATEWAY PROVIDER AS NEEDED TO SUPPORT YOUR USE OF THE SOFTWARE AND SUBJECT TO APPROPRIATE CONFIDENTIALITY OBLIGATIONS) THE PROPRIETARY DOCUMENTATION AND OTHER INFORMATION OF RADIANT OR ITS LICENSORS RELATING TO THE SOFTWARE; (vi) USE THE SOFTWARE IN A MANNER OR AN ENVIRONMENT THAT DOES NOT COMPLY WITH THE APPLICABLE PROVISIONS OF THE PAYMENT CARD INDUSTRY DATA SECURITY STANDARD (“PCI-DSS”); OR (vii) USE ANY REMOTE ACCESS APPLICATION TO ACCESS THE SOFTWARE, EXCEPT THOSE THAT MEET PCI DSS SECURITY STANDARDS. IF YOU FAIL TO COMPLY WITH ANY OF THE TERMS OF THIS AGREEMENT, YOUR LICENSE AND RIGHT TO USE THE SOFTWARE WILL BE AUTOMATICALLY TERMINATED. SUCH TERMINATION SHALL BE IN ADDITION TO AND NOT IN LIEU OF ANY CRIMINAL, CIVIL OR OTHER REMEDIES AVAILABLE TO RADIANT. 3. PROPRIETARY RIGHTS. You acknowledge and agree that the Software (including its code, appearance, structure and organization) and the accompanying documentation are proprietary products of Radiant or its licensors and is protected under copyright and other laws, and that all right, title, and interest in and to the Software and any modifications or derivative works thereto shall remain with Radiant or its licensors. This Agreement does not convey to you an interest in or to the Software, but only a limited right to use the Software revocable in accordance with the terms of this Agreement. Radiant will, at its expense, defend you against any IP Claim. Radiant will also pay the damages, costs, and attorneys’ fees that are awarded against you in a final, non-appealable court judgment for the IP Claim, or required to be paid by you or on your behalf in a settlement of the IP Claim that Radiant has agreed to in writing. As used in this Section 3, an “IP Claim” means a suit brought against you by a third party to the extent the suit alleges that your use of the Software infringes a patent or copyright of the third party. Radiant’s obligations set forth in this Section 3 are subject to your (a) providing Radiant prompt written notice that the IP Claim has been threatened or brought, whichever is sooner (the “Claim Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the IP Claim; (c) cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or settlement; and (e) complying with all court orders. If your delay in providing the Claim Notice causes detriment to Radiant with respect to the defense or resolution of the IP Claim, Radiant’s obligations set forth in this Section 3 will not apply to the IP Claim. Notwithstanding any other provision of this Agreement, Radiant is not responsible for any fees (including attorneys’ fees), expenses, costs, judgments, or awards that are incurred prior to Radiant’s receipt of the Claim Notice from you. Radiant will have the sole right to select counsel. You may, at your sole expense, engage additional counsel of your choosing for purposes of conferring with Radiant’s counsel. The obligations set forth in this Section 3 will not apply to an IP Claim if the alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with your design, specification, or instruction; (b) modification of the Software other than by Radiant; (c) any product or service not provided by Radiant to you; or (d) combination or use of the Software with any product or service not provided by Radiant to you. If an intellectual property infringement allegation is brought or threatened against the Software, or Radiant believes that such an allegation may be brought or threatened, Radiant may (a) obtain a license for the Software; (b) modify the Software; or (c) replace the Software with a product having substantially the same functionality. If Radiant in its discretion determines that none of the foregoing is available on a reasonable basis, upon Radiant’s written request to you, you will promptly return the Software to Radiant, and Radiant will refund you the price you paid Radiant for the Software, less depreciation on a five-year straight-line basis. THIS SECTION 3 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND YOUR EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM. 4. TERM. This Agreement is effective from the date of your acceptance of these terms and conditions until terminated as provided hereunder. You may terminate this Agreement at any time by returning the Software and all copies thereof and extracts therefrom, to Radiant or the authorized Radiant reseller from whom you made your purchase. Radiant may terminate this Agreement, without further obligation to you, upon your breach of any term hereof if such breach is not rectified within thirty (30) days from notice by Radiant to you, including your failure to pay any undisputed amounts owed to Radiant or its authorized resellers in respect of the Software or services provided by Radiant or such resellers. Upon such termination by Radiant, you agree to return to Radiant the Software and all copies thereof and extracts therefrom. Upon any termination of this Agreement, the provisions of the following sections of this Agreement shall remain in effect: Sections 2, 3, 4, 6, 7, 8, 9, 10, 11, 13 through 19. 5. ACCESS TO YOUR COMPUTER SYSTEM. You agree to allow Radiant and Retail Control Systems reasonable access to your computer system and the Software in order to provide any applicable maintenance and support services, to verify license status, and to change settings and/or install or remove applications to address data security risks. Any such access will be performed in a professional manner, in accordance with applicable industry standards. Radiant agrees to indemnify, defend and hold harmless you (collectively, the “PF Indemnified Parties”) from all claims, actions, losses and expenses, including reasonable attorney’s fees and legal costs, incurred by any of the PF Indemnified Parties and fines, and/or penalties imposed on any of the PF Indemnified Parties as a result of the negligent performance by Radiant of any of the activities set forth in the first sentence of this Section 5. Version 2010-11-30 Radiant Systems, Inc. CounterPoint SQL Software License Agreement You further agree to purchase, install and maintain appropriate high-speed Internet access in order to provide Radiant remote access to your computer system. You acknowledge and agree that Radiant may use its proprietary software applications or other third party software applications in order to access your system, and you agree that Radiant may load such product(s) and keep them updated on your system solely as needed to provide applicable maintenance and support services. Radiant may gather statistical information about your Licensed Site including, without limitation, hardware information, software versions and feature usage, and use such information for valid business purposes such as product analysis and billing information. Additionally, Radiant and/or its authorized resellers may access configuration and operational data in connection with providing support services. Radiant may use and disclose transactional and system information in the form of anonymous, aggregate usage statistics that Radiant derives from the Licensed Site via your use of the Software, but only in forms that do not reveal your identity or your confidential information and only in sample sizes that are large enough to ensure that the aggregate data is truly anonymous, except as required by law or as needed in connection with any legal proceedings. 6. LIMITED WARRANTY. Radiant warrants to you only, for a period of 30 days from the date of delivery of the Radiant Software to you (referred to as the “Warranty Period”), that the Radiant Software shall operate substantially in accordance with the functional specifications in the accompanying documentation. Radiant does not warrant that the functions contained in the Software will meet your requirements or that the operation of the Software will be entirely error free or appear precisely as described in the accompanying documentation. Radiant hereby assigns to you all assignable end user warranties received from the licensors of any third-party software distributed by Radiant to you under this Agreement. EXCEPT FOR THE WARRANTIES SET FORTH ABOVE, THE SOFTWARE IS LICENSED ON AN “AS IS” BASIS, WITHOUT WARRANTY OF ANY KIND AND RADIANT DISCLAIMS ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF ANY THIRD PARTY RIGHTS. RADIANT SHALL NOT BE BOUND BY OR LIABLE FOR ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER WRITTEN OR ORAL, WITH RESPECT TO THE SOFTWARE MADE BY ANY THIRD PARTY, INCLUDING AN AUTHORIZED RESELLER OR ITS AGENTS, EMPLOYEES OR REPRESENTATIVES, NOR SHALL YOU BE DEEMED A THIRD PARTY BENEFICIARY OF ANY OBLIGATIONS OF RADIANT TO AN AUTHORIZED RESELLER. 7. LIMITATION OF LIABILITY. To the maximum extent permitted by applicable law, the remedies described below are accepted by you as your only remedies, and shall represent Radiant’s entire liability to you, hereunder: (i) If the Radiant Software fails to operate substantially in accordance with the functional specifications set out in the accompanying documentation during the Warranty Period, you shall, prior the expiration of the Warranty Period, report such defect to Radiant or your authorized Radiant reseller in writing. In the event of a timely made report of a defect, Radiant and its authorized resellers’ only responsibility will be to use reasonable efforts, consistent with then prevailing industry standards, to cure the defect. (ii) RADIANT’S AND ITS LICENSORS’ TOTAL LIABILITY TO YOU OR ANY OTHER PARTY FOR ANY LOSS OR DAMAGES RESULTING FROM ANY CLAIMS, DEMANDS OR ACTIONS RELATING TO THIS AGREEMENT SHALL NOT EXCEED THE FEES PAID BY YOU DURING THE IMMEDIATELY PRIOR TWELVE-MONTH PERIOD FOR THE APPLICABLE PRODUCT OR SERVICE GIVING RISE TO SUCH DAMAGES (THE “CAP”), PROVIDED HOWEVER, THAT WITH RESPECT TO RADIANT’S INDEMNIFICATION OBLIGATIONS HEREUNDER, THE CAP SHALL BE (i) A CUMULATIVE TOTAL OF $10 MILLION FOR ALL INDEMNIFICATION OBLIGATIONS TO PLA-FIT HEALTH, LLC AND ITS AFFILIATES AND FRANCHISEES ARISING FROM A DATA SECURITY BREACH CAUSED BY RADIANT’S NEGLIGENCE OR WILFUL MISCONDUCT, AND (ii) FOR ALL OTHER INDEMNIFICATION OBLIGATIONS, 1.5 TIMES THE FEES PAID BY YOU DURING THE IMMEDIATELY PRIOR TWELVE-MONTH PERIOD FOR THE APPLICABLE PRODUCT OR SERVICE GIVING RISE TO SUCH DAMAGES. IN NO EVENT SHALL RADIANT OR ITS LICENSORS BE Version 2010-11-30 LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES, LOST SAVINGS OR LOST PROFITS EVEN IF RADIANT OR ITS LICENSORS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 8. PAYMENT CARD INDUSTRY. Radiant participates in the Payment Card Industry (“PCI”) Payment Application Data Security Standard (the “PA-DSS”) program. The parties acknowledge that the PA-DSS is subject to revision and clarification regarding security standards for payment applications, and that validation against the PA-DSS is an annual activity. Radiant represents that the Software is validated under PA-DSS as of the commencement of the term of this Agreement. Radiant agrees to gain annual validation against the PADSS, and will promptly notify you if it fails to do so or if it loses PA-DSS validation. You agree to promptly implement software enhancements, including installation of new versions, made by Radiant to achieve and maintain validation against the PA-DSS. You acknowledge that you must remain current on software maintenance (also referred to as “CSS” or “CounterPoint Subscription Service”) to receive new versions and updates to the Radiant Software, that you must use and configure the Radiant Software in a manner and in an environment that complies with the PCI Data Security Standard (“PCI-DSS”), and that you are responsible for your own PCI-DSS compliance. You acknowledge that use of a PA-DSS validated payment application does not satisfy all of your responsibilities to secure and protect your network and information under the PCI-DSS. You are strongly advised to engage the services of a Qualified Security Assessor to: (i) ensure that no credit card track data is present on your systems or network; (ii) determine your level of PCIDSS compliance, and (iii) assist you with your PCI-DSS compliance obligations and to mitigate any issues that may arise from your non-compliance. With respect to the standards set forth in this Section 8, the parties acknowledge and agree that such standards are subject to change and/or discontinuance from time to time. To the extent that a standard set forth in this Section 8 is discontinued or is no longer applicable, the parties agree to work together in good faith to use the applicable successor standard or the most appropriate alternate standard to fulfill the requirements of this Section 8. Each party agrees to indemnify, defend and hold harmless the other party from all claims, actions, losses and expenses, including reasonable attorney’s fees and legal costs, incurred by the other party as a result of a breach by the other party of its obligations under this Section 8. 9. DATA SECURITY AND CYBERCRIME PREVENTION. It is your responsibility to have and maintain in place malware protection software and security for all of your systems and data, which security includes properly configured firewalls, unique, strong passwords per user, physical security, and access control policies. You acknowledge that the security and protection of your network and the data and applications on that network, including protections against unauthorized access, is solely and entirely your responsibility. A properly configured firewall is required for each site using a persistent connection to the public Internet or any private network where there is a potential for unauthorized access. You acknowledge that, to be effective, malware protection software, hardware firewalls, system passwords and other security software and hardware components require periodic and routine updates, which you must obtain or perform as applicable. Radiant, its authorized resellers and licensors disclaim any warranty, express or implied, that the Software or your data will remain malware-free. You acknowledge that your failure to discharge your obligations to keep your systems secure may result in investigation fees, fines, penalties, charge backs and credit card fraud costs, and other losses as levied by credit card processors and others, remediation costs (which may include system component updates or replacements) and lost profits and lost reputability of your business, which costs may be so large that they may threaten the survival of your business. You waive any claims hereunder against Radiant, its authorized resellers and licensors for any such costs or losses to the extent arising from your failure to have or maintain a secure system, or to the extent arising as a result of a failure or breach of your security for your systems or data, or as a result of any unauthorized access to your systems, unless any of these events was due to a breach by Radiant of Section 8 of this Agreement. In the event of a security breach of your systems, you agree to promptly (i) notify Radiant of such breach, (ii) provide Radiant with copies of any forensic reports related to such breach, and (iii) authorize any investigating entities to disclose all relevant information regarding their investigations, including investigations in progress, of such breach to Radiant. Radiant Systems, Inc. CounterPo 10. CONDITIONS BEYOND RADIANT’S CONTROL. Radiant, its authorized resellers and licensors shall not be held responsible for misuse or incorrect operation of the Software, use of the Software by untrained personnel, improper entry of data in connection with the Software, or modification of settings or other behavior affecting data security. You understand that the use of any equipment outside the manufacturer’s recommended specifications may seriously affect the performance of the Software. RADIANT, ITS AUTHORIZED RESELLERS AND LICENSORS SHALL NOT BE HELD LIABLE OR RESPONSIBLE FOR CONDITIONS BEYOND THEIR CONTROL THAT MAY AFFECT THE PERFORMANCE OR ACCESSIBILITY OF THE SOFTWARE OR THE DATA CONTAINED THEREIN, INCLUDING, BUT NOT LIMITED TO, LOSS OR INTERUPTION OF POWER, YOUR OPERATING ENVIRONMENT FACTORS, PROGRAM VIRUSES AND MALWARE, INTERNET SERVICE DISRUPTIONS, ENVIRONMENTAL CONDITIONS AND OTHER NATURAL EVENTS, AND UNAUTHORIZED ACCESS OR DATA SECURITY BREACHES (UNLESS SUCH UNAUTHORIZED ACCESS OR DATA SECURITY BREACHES WERE DUE TO RADIANT’S NEGLIGENCE OR RADIANT’S BREACH OF THIS AGREEMENT). 11. YOUR ADDITIONAL RESPONSIBILITIES. Unless otherwise specified in this Agreement or in a separate writing signed by you and Radiant, you shall also be solely responsible for the following: (a) selection of the Software to achieve your intended results; (b) evaluation of Radiant’s products related to your specific business requirements and technical environment; (c) the results obtained from use and operation of the Software; (d) providing and maintaining the appropriate operating environment for the Software in accordance with Radiant’s specifications provided to you in writing, including related security and access controls, and maintaining back-up and disaster recovery procedures, facilities, and equipment (if applicable); (e) adherence to any applicable electronic payment processing standards or requirements related to your operations; (f) all data entry and loading; (g) installing upgrades provided by Radiant and securely deleting previously stored information or data; (h) the content of all of your information or data, the selection and implementation of controls on the access and use of such information or data, and the protection and back-up of the stored information or data; (i) the configuration of all required data parameters associated with the use of the Software and its operating environment, including security-related parameters; (j) compliance will all applicable laws, rules or regulations affecting or governing your information or data configuration parameters in the Software; and (k) providing adequate training on the use and operation of the Software to your employees and maintaining adequate supervision of such employees. 12. NON-PAYMENT. Failure by you to timely pay applicable fees due Radiant shall entitle Radiant (provided that you have not cured such non-payment within 10 days of written notice) to suspend, disable and/or discontinue (by remote means or such other means then available to Radiant), without necessity of notice to you, your licenses to use any Software. Any such suspension, disablement or discontinuation shall remain in effect until such time as the applicable unpaid fees are paid in full and Radiant notifies you that such suspension, disablement or discontinuation has been lifted, which Radiant may lift or not in its sole discretion. 13. DISPUTE RESOLUTION. The parties shall make diligent efforts through good faith negotiations to settle any disputes arising out of or related to this Agreement, including escalating the issues to their respective upper management levels. Notwithstanding anything to the contrary in this Section 13, (i) actions seeking to validate Radiant's rights to its proprietary information, (ii) actions to enjoin your unauthorized use of the Software in violation of this Agreement or Radiant's other intellectual property rights, or (iii) actions to collect any sums owed to Radiant or its authorized resellers under this Agreement, may, at Radiant's discretion, be the subject matter of litigation instituted by Radiant. 14. GOVERNING LAW. This Agreement shall be construed and governed in accordance with the laws of the State of New York without regard to its conflicts of laws rule. The parties agree to the following venue provisions: if litigation is instituted by Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted by You, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to the jurisdiction and venue of such courts hereby waive and covenant not to assert Version 2010-11-30 any claim that they are not subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial doctrine of forum non conveniens).. 15. COSTS OF LITIGATION. If any action is brought by either party to this Agreement against the other party regarding the subject matter hereof, the prevailing party shall be entitled to recover, in addition to any other relief granted, reasonable attorneys fees and expenses of litigation or arbitration, as applicable. 16. SEVERABILITY. Should any term of this Agreement be declared void or unenforceable by any court of competent jurisdiction, such declaration shall have no effect on the remaining terms hereof. 17. NO WAIVER. The failure of either party to enforce any rights granted hereunder or to take any action against the other party in the event of any breach hereunder shall not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event of future breaches. 18. ADDITIONAL RULES FOR GOVERNMENTAL USERS. (a) The Software is provided with “Restricted Rights”. Use, duplication, disclosure by the U.S. Government is subject to the restrictions set forth in 48 CFR 52.227-10(c)(1) and (2) or DFARS 252.227-7013(c)(1)(ii) or applicable successor provisions. The manufacturer is Radiant or its licensors. You are required to observe the relevant U.S. Export Administration Regulations and may not re-export the Software in violation of these or other applicable export laws and regulations. (b) If Licensee is a governmental organization that is expressly prohibited by applicable law, rule or regulation to being bound by any specific term of this Agreement (a “Restricted Term”), please so notify Radiant as part of your registration process for the Software and also provide a copy of the applicable law, rule or regulation imposing such restriction. Radiant will thereafter advise you whether your not being bound by such Restricted Term is acceptable to Radiant, in which case the relevant term shall be deemed to be severed from this Agreement and the remaining terms of this Agreement shall be in effect. If the severability of a Restricted Term is not acceptable to Radiant, then Radiant shall so notify you, will not issue you a Permanent Activation Key and your rights to use the Software shall be terminated without need for further action by Radiant (and you shall comply with Section 4 concerning such termination). 19. AMENDMENTS. Any amendments to this Agreement must be in writing and signed by an authorized officer of you and of Radiant. 20. NOTICES. Notices required or permitted to be given under this Agreement (such as any notice of breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested), to the respective Party at the address set forth on the first page of the Agreement, or at such other address as such party may hereafter notify the other party in accordance with this Section. Each such notice shall be effective when actually received. 21. Section 365(n). All rights and licenses granted under or pursuant to this Agreement by Radiant to you are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”), licenses to rights to “intellectual property” as defined under the Bankruptcy Code. 22. Assignment. Except as provided herein, you may not assign this Agreement (whether by operation of law or otherwise) without the prior written consent of Radiant. Notwithstanding any other provision of this Agreement, you may assign this Agreement without the approval of Radiant to an entity acquiring, directly or indirectly, Control of you, an entity into which you are merged, or an entity acquiring all or substantially all of your assets. The acquirer or surviving entity shall agree in writing to be bound by the terms and conditions of this Agreement. You may also assign this Agreement, upon prior written notice to Radiant, to any Affiliate and such assignment shall not require the prior written consent of Radiant. Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the successors and permitted assigns of the parties. “Control” and its derivatives means, with respect to an entity, possessing, directly or indirectly, the power to direct or cause the direction of the management, policies, and operations of the entity, whether through ownership of voting securities, by contract, or otherwise. Radiant may freely assign this Agreement. Radiant Systems, Inc. CounterPo 23. ENTIRE AGREEMENT. This Agreement represents the complete and exclusive statement of the agreement between you and Radiant, superseding all proposals or prior agreements, oral or written, and all other communications between you and Radiant relating to the subject matter of this Agreement, provided, however, that if you and Radiant have signed by hand a separate written agreement concerning the Software, the terms and conditions of the signed by hand separate written agreement shall govern such matter to the extent of any inconsistent terms. Version 2010-11-30 Radiant Systems, Inc. CounterPo EXHIBIT C CPOnline Merchant Agreement [See Attached] Version 2010-11-30 Radiant Systems, Inc. CounterPo CPONLINE MERCHANT AGREEMENT The following terms and conditions (the “Agreement”) shall govern the use of the CPOnline (CounterPoint Online) service (as described below) provided by Radiant Systems, Inc. (“Radiant”). 1. CPOnline description CPOnline (CounterPoint Online) is a service provided by Radiant that allows the CPOnline Merchant (“Merchant”) to set up a web site for online stores, to establish the online stores’ appearance and policies, and to administer the online stores. Merchant’s web sites and business records will reside on servers (computers) owned and operated by Radiant and Radiant agents. Merchant may use CounterPoint to maintain product (item) information and publish (transmit) that information to Merchant’s online stores. Third-party shoppers may use web browsers to visit Merchant’s online stores and view Merchant’s products, and may place orders in Merchant’s online stores. Shopper information and orders may be retrieved by Merchant and imported into Merchant’s CounterPoint system. More complete statements of CPOnline and CounterPoint capabilities are described in other materials published by Radiant and on Radiant’s web site at www.CounterPointPOS.com. 2. Fees and charges Fees and charges for CPOnline will be paid on Merchant’s behalf by Pla-Fit Health, LLC. Merchant agrees to use a unique domain (or subdomain) name for each store address and to purchase an SSL certificate for each store (according to the current price schedule as published on Radiant's web site at www.CounterPointPOS.com). The following provision shall apply to the purchase of VeriSign SSL Certificates: By entering into this Agreement you hereby agree to the terms and conditions applicable to the SSL Certificate as specified by VeriSign and published at VeriSign’s web site, currently located at http:///www.verisign.com/repository/agreements/serverClass3Org.html (the “SSL Agreement”). Merchant agrees to periodically review VeriSign’s web site, including the current version of the SSL Agreement that is posted on such web site. By continuing to use the VeriSign Certificate after any revision to the SSL Agreement Merchant agrees to abide by and be bound by any such revisions. Merchant acknowledges that VeriSign is third party beneficiary to the terms of the SSL Agreement, including but not limited to Merchant’s obligation to indemnify, defend and hold harmless VeriSign, and its subsidiaries, directors, shareholders officers, agents, employees, successors and assigns, as set forth in the indemnification provision set forth in Section 15 of the SSL Agreement. Merchant hereby consents to the disclosure of Merchant’s name, address and other Merchant information as may be necessary for enrollment purposes. The above fees do not include any a la carte optional services, such as consulting, web site design, custom template design, custom development, implementation services or marketing services. After the initial three-year term, rates are subject to change with 30 days notice. Any contracted rates separately agreed to by Radiant and Merchant take precedence over fees shown in this Agreement. 3. Data privacy and Security CPOnline collects certain transactional information for Merchant’s online stores, including but not limited to product information, customer information, orders and invoices, and as set forth herein Radiant will retain such information on Radiant’s servers. Radiant agrees not to disclose or otherwise make use of Merchant’s business or transactional information, except to provide services or in response to a subpoena, warrant, court order, levy, attachment, order of a court-appointed receiver or other comparable legal process. Notwithstanding the foregoing, Radiant may use and disclose data associated with Merchant’s usage of CPOnline, in the form of anonymous, aggregate usage statistics that Radiant derives through Merchant’s use of CPOnline, but only in forms that do not reveal the identity of Merchant or Merchant’s customers, or any of their respective confidential or personal information, and only in sample sizes that are large enough to ensure that the aggregate data is truly anonymous. Merchant acknowledges and agrees that Radiant’s use and disclosure of anonymous, aggregate usage statistics along with associated zip Version 2010-11-30 Radiant Systems, Inc. CounterPo code information for marketing research purposes will be permitted. Radiant participates in the Payment Card Industry ("PCI") Data Security Standard ("DSS") program for CPOnline by undergoing annual assessments based on the PCI DSS in order to be included on Visa's List of PCI DSS Compliant Service Providers. The parties acknowledge that the PCI DSS is subject to revision and clarification, and that validation against the PCI DSS is an annual activity. Radiant agrees to gain annual revalidation against the PCI DSS. The data center used by Radiant to host CPOnline has received SSAE 16 certification pursuant to a SOC 1, Type 2 Report and Radiant agrees to ensure that any data center used by Radiant to host CPOnline in future obtains annual SSAE 16 certification pursuant to a SOC 1, Type 2 Report. In addition to PCI DSS, Radiant acknowledges that certain Rules, standards, guidelines, practices or procedures recommended or required by the applicable Payment Networks with respect to data security or protection of cardholder data, as such may be amended from time to time (together with PCI-DSS, collectively “Data Security Guidelines”) may be applicable to CPOnline. For purposes of this Agreement, “Payment Network” or “Payment Networks” shall mean Visa, MasterCard, and any credit or debit card network issuing a Visa or MasterCard credit or debit card, travel and entertainment card, or other credit or debit card. Rules” shall mean the operating rules and regulations of Visa, MasterCard, and any other applicable Payment Network, as in effect from time to time. With respect to the standards set forth in this Section 3, the parties acknowledge and agree that such standards are subject to change and/or discontinuance from time to time. To the extent that a standard set forth in this Section 3 is discontinued or is no longer applicable, the parties agree to work together in good faith to use the applicable successor standard or the most appropriate alternate standard to fulfill the requirements of this Section 3. 4. Access to systems Merchant agrees to allow Radiant and Retail Control Systems reasonable access to Merchant’s CPOnline service in order to provide Merchant with support services and to monitor Merchant’s compliance with the terms of this Agreement. Any such access will be performed in a professional manner, in accordance with applicable industry standards. Radiant agrees to indemnify, defend and hold harmless Merchant (collectively, the “PF Indemnified Parties”) from all claims, actions, losses and expenses, including reasonable attorney’s fees and legal costs, incurred by any of the PF Indemnified Parties and fines, and/or penalties imposed on any of the PF Indemnified Parties as a result of the negligent performance by Radiant of any of the activities set forth in the first sentence of this Section 4. Radiant may gather statistical information about Merchant’s locations including, without limitation, hardware information, software versions and feature usage, and use such information for valid business purposes such as product analysis and billing information. Additionally, Radiant and/or Radiant subcontractors providing support services to Merchant may access configuration and operational data in connection with providing such support services. 5. Merchant responsibility Merchant understands and agrees that Merchant is entirely responsible for the content of Merchant’s online stores, including the products and services offered for sale therein. Merchant agrees that Merchant will not use Merchant’s online stores to engage in any illegal, unlawful, immoral, or unethical activities. Merchant agrees to be entirely and solely responsible for Merchant’s online stores and that under no circumstances will Radiant be liable for any content or use thereof. Merchant acknowledges and agrees that Radiant does not endorse the content of Merchant’s online stores or any products or services offered for sale therein and Radiant specifically disclaims any responsibility for any threatening, libelous, obscene, harassing, or offensive material contained therein. Merchant’s obligations under this paragraph 5 shall survive termination of this Agreement. 6. Limitations of warranty and liability, and indemnification The warranties expressed in this Agreement are the only warranties made by Radiant with respect to CPOnline and are in lieu of all other warranties, expressed or implied, including but not limited to implied warranties of merchantability and/or fitness for a particular purpose. Neither Merchant nor Radiant will be liable for any consequential, indirect or special damages, or any claims for lost profits, lost savings or lost data by or of the other party. In no event will either party’s aggregate liability for any damages to the other party or to any other person or entity ever exceed the amount of fees and charges paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or services giving rise to such damages (the “Cap”), regardless of the form of action, whether based on contract, tort, negligence, strict Version 2010-11-30 Radiant Systems, Inc. CounterPo liability, products liability or otherwise, provided however, that with respect to a party’s indemnification obligations, the Cap shall be (i) a cumulative total of $10 million for all indemnification obligations to Pla-Fit Health, LLC and its affiliates and franchisees arising from a data security breach caused by Radiant’s negligence or willful misconduct, and (ii) for all other indemnification obligations, 1.5 times the amount of fees and charges paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or services giving rise to such damages. Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses, including reasonable attorneys’ fees incurred by Radiant arising out of or from (i) Merchant’s breach of this Agreement, (ii) claims or demands by third parties against Radiant relating to this Agreement or the content of Merchant’s online stores, including the products and services offered for sale therein, or (iii) Merchant’s violation of any applicable international, federal, state or local law, regulation or ordinance in connection with Merchant’s use of CPOnline, provided that Merchant is promptly notified by Radiant of receipt of notice of such claim, is given control of the defense or settlement of such claim, and is given reasonable assistance requested by Merchant, at Merchant’s cost, with regard to such claim. Radiant agrees to indemnify and hold Merchant harmless for any claims, losses, liabilities, cost and expenses, including reasonable attorney’s fees incurred by Merchant arising out of or from (i) claims or demands by third parties against Merchant arising out of Radiant's breach of this Agreement, or (ii) Radiant’s violation of any applicable international, federal, state or local law, regulation or ordinance in connection with CPOnline, or (iii) Radiant’s non-compliance with applicable Data Security Guidelines, provided that Radiant is promptly notified by Merchant of receipt of notice of such claim, is given control of the defense or settlement of such claim, and is given reasonable assistance requested by Radiant, at Radiant’s cost, with regard to such claim. Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs, and attorneys’ fees that are awarded against Merchant in a final, non-appealable court judgment for the IP Claim, or required to be paid by Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant has agreed to in writing. As used in this Section 6, an “IP Claim” means a suit brought against Merchant by a third party to the extent the suit alleges that Merchant’s use of CPOnline infringes a patent or copyright of the third party. Radiant’s obligations set forth in this Section 6 are subject to Merchant’s (a) providing Radiant prompt written notice that the IP Claim has been threatened or brought, whichever is sooner (the “Claim Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the IP Claim; (c) cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or settlement; and (e) complying with all court orders. If Merchant’s delay in providing the Claim Notice causes detriment to Radiant with respect to the defense or resolution of the IP Claim, Radiant’s obligations set forth in this Section 6 will not apply to the IP Claim. Notwithstanding any other provision of this Agreement, Radiant is not responsible for any fees (including attorneys’ fees), expenses, costs, judgments, or awards that are incurred prior to Radiant’s receipt of the Claim Notice from Merchant. Radiant will have the sole right to select counsel. Merchant may, at Merchant’s sole expense, engage additional counsel of Merchant’s choosing for purposes of conferring with Radiant’s counsel. The obligations set forth in this Section 6 will not apply to an IP Claim if the alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with Merchant’s design, specification, or instruction; (b) modification of CPOnline other than by Radiant; (c) any product or service not provided by Radiant to Merchant; or (d) combination or use of CPOnline with any product or service not provided by Radiant to Merchant. If an intellectual property infringement allegation is brought or threatened against CPOnline, or Radiant believes that such an allegation may be brought or threatened, Radiant may (a) obtain a license for CPOnline; (b) modify CPOnline; or (c) replace CPOnline with a product having substantially the same functionality. THIS SECTION 6 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND MERCHANT’S EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM. The parties’ obligations under this paragraph 6 shall survive termination of this Agreement. 7. Term and termination This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month basis until terminated by one of the parties as described herein. Merchant may terminate this Agreement at any time by submitting written notice to Radiant; however, Radiant is under no obligation to refund Merchant any fees previously paid. Merchant agrees to pay all fees through the date of Radiant’s receipt of Merchant’s written termination request. Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or Version 2010-11-30 Radiant Systems, Inc. CounterPo condition of this Agreement and fails to remedy the non-compliance within thirty (30) days’ notice by Radiant to Merchant. Additionally, Radiant reserves the right to decline initial service, disable or suspend Merchant’s access to CPOnline or otherwise terminate this Agreement without notice (i) if Merchant uses CPOnline for any purpose other than as expressly permitted in this Agreement, (ii) if Merchant’s products and/or presentation can be considered, in Radiant’s sole discretion, to be threatening, libelous, obscene, harassing, or offensive (iii) if Merchant violates any applicable international, federal, state or local law, regulation or ordinance in connection with its use of CPOnline, or (iv) if Merchant’s use of CPOnline adversely affects the use such service by other Radiant clients. Regardless of the method of termination, Merchant agrees to pay all fees and charges due under this Agreement through the applicable date of termination. 8. Governing Law and Venue This Agreement shall be construed and governed in accordance with the laws of the State of New York without regard to its conflicts of laws rule. The parties agree to the following venue provisions: if litigation is instituted by Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted by Merchant, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to the jurisdiction and venue of such courts and hereby waive and covenant not to assert any claim that they are not subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial doctrine of forum non conveniens). 9. General This Agreement constitutes the complete and exclusive agreement between Merchant and Radiant with respect to CPOnline, superseding any prior agreements or understandings, oral or written, with respect to such subject matter, and can only be amended by signed written agreement of the parties. Should any term of this Agreement be declared void or unenforceable by any court of competent jurisdiction, such declaration shall have no effect on the remaining terms hereof. The failure of either party to enforce any rights granted hereunder or to take any action against the other party in the event of any breach hereunder shall not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event of future breaches. Notices required or permitted to be given under this Agreement (such as any notice of breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested), to the respective party at the following address set forth below or at such other address as such party may hereafter notify the other party in accordance with this Section. Each such notice shall be effective when actually received at the respective addresses specified below. Merchant: Pla-Fit Health LLC 26 Fox Run Road Newington, NH 03801 Attn: Head of Information Technology With copy to: Pla-Fit Health LLC 26 Fox Run Road Newington, NH 03801 Attn: General Counsel Radiant: TERMS AND CONDITIONS FOR SEARCH ENGINE MARKETING SERVICES Version 2010-11-30 Radiant Systems, Inc. CounterPo Merchant acknowledges and agrees that these Terms and Conditions for Search Engine Marketing Services (also known as Search Engine Optimization Services) and the terms of a separate statement of work between Merchant and Radiant, which includes a scope of work, change order process, fees, payment terms and other applicable terms, shall apply to Radiant’s provision of search engine marketing services, if such services are being provided by Radiant (the “SEM Services”). Radiant cannot control every aspect of the search engine marketing process. Merchant acknowledges and agrees that factors inherent in Merchant’s web site, or with each search engine or directory where the web site may be registered, will affect the ranking results of the web site. Radiant’s objective is to obtain a certain number of top rankings in the most-used search engines and directories for Merchant’s web site. Although the goal of high rankings is usually to generate web site traffic and sales or other actions taken on Merchant’s web site, Radiant cannot control the number of actual click-throughs or any actions taken by any visitor on your web site. Regarding search engine reputation management, with billions of pages on the Internet, there is no guarantee that Radiant will find every mention of Merchant. Rankings for search engines are controlled by hundreds of different factors directly and indirectly related to Merchant’s web site. Although Radiant follows accepted search engine optimization practices, Radiant is not liable for any loss of rankings or penalties you may incur from any search engine due to spamming, "black hat", artificial back links or any other search engine techniques. Accordingly, Radiant makes no representation, warranty or guarantee with respect to any SEM Services it may provide to Merchant. Version 2010-11-30 Radiant Systems, Inc. CounterPo EXHIBIT D CPGateway Merchant Agreement [See Attached] Version 2010-11-30 Radiant Systems, Inc. CounterPo CPGATEWAY MERCHANT AGREEMENT The following terms and conditions (the “Agreement”) shall govern the use of the CPGateway service (as described below) provided by Radiant Systems, Inc. (“Radiant”). 1. CPGateway CPGateway is a service provided by Radiant that allows a licensed user of Radiant’s CounterPoint point-of-sale software (“Merchant”) to use Radiant’s electronic payment software to authorize and settle transactions through the Internet for goods and services sold using major credit cards and checks, provided that Merchant has an existing, signed merchant agreement and valid merchant ID in place to accept these payment types. Merchant's electronic payment transactions will pass through servers (computers) owned and operated by Radiant and Radiant agents. Radiant and Radiant agents will not retain copies of Merchant's transactions or credit card numbers on Radiant servers. All transactions will be encrypted using secure technology. Radiant agrees to be responsible for the acts and omissions of the Radiant agents in relation to handling of Merchant’s electronic payment transactions. CPGateway allows Merchant to perform electronic credit card authorizations for purchases and the settlement or deposit of purchase transaction funds into Merchant's bank account. More complete statements regarding CPGateway and its capabilities are described in other materials published by Radiant and on Radiant’s web site at www.CounterPointPOS.com. Radiant agrees to provide disaster recovery and business continuity protection for the CPGateway data center from which the CPGateway services are provided, in accordance with the corporate business continuity program deployed by Radiant with respect its customers generally. Upon request by Merchant, Radiant will provide a summary of its current corporate business continuity program, the contents of which shall be deemed to be Radiant Confidential Information. 2. Fees and charges CPGateway fees and charges will be paid on Merchant’s behalf by Pla-Fit Health, LLC. After the initial three-year term, rates are subject to change with 30 days notice. Any contracted rates separately agreed to by Radiant and Merchant take precedence over fees shown in this Agreement. 3. Data privacy and Security Radiant agrees not to disclose to any third party or otherwise make use of any transactional information Merchant provides to Radiant, except to provide services to Merchant or in response to a subpoena, warrant, court order, levy, attachment, order of a court-appointed receiver or other comparable legal process. Notwithstanding the foregoing, Radiant may use and disclose data associated with Merchant’s usage of CPGateway, in the form of anonymous, aggregate usage statistics that Radiant derives through Merchant’s use of CPGateway, but only in forms that do not reveal the identity of Merchant or Merchant’s customers, or any of their respective confidential or personal information, and only in sample sizes that are large enough to ensure that the aggregate data is truly anonymous. Merchant acknowledges and agrees that Radiant’s use and disclosure of anonymous, aggregate usage statistics along with associated zip code information for marketing research purposes will be permitted. Radiant participates in the Payment Card Industry ("PCI") Data Security Standard ("DSS") program for CPGateway by undergoing annual assessments based on the PCI DSS in order to be included on Visa's List of PCI DSS Compliant Service Providers. The parties acknowledge that the PCI DSS is subject to revision and clarification, and that validation against the PCI DSS is an annual activity. Radiant agrees to gain annual re-validation against the PCI DSS. The data center used by Radiant to host CPGateway has received SSAE 16 certification pursuant to a SOC 1, Type 2 Report and Radiant agrees to ensure that any data center used by Radiant to host CPGateway in future obtains annual SSAE 16 certification pursuant to a SOC 1, Type 2 Report. In addition to PCI DSS, Radiant acknowledges that certain Rules, standards, guidelines, practices or procedures recommended or required by the applicable Payment Networks with respect to data security or protection of cardholder data, as such may be amended from time to time (together with PCI-DSS, collectively “Data Security Guidelines”) may be Version 2010-11-30 Radiant Systems, Inc. CounterPo applicable to CPGateway. For purposes of this Agreement, “Payment Network” or “Payment Networks” shall mean Visa, MasterCard, and any credit or debit card network issuing a Visa or MasterCard credit or debit card, travel and entertainment card, or other credit or debit card. Rules” shall mean the operating rules and regulations of Visa, MasterCard, and any other applicable Payment Network, as in effect from time to time. With respect to the standards set forth in this Section 3, the parties acknowledge and agree that such standards are subject to change and/or discontinuance from time to time. To the extent that a standard set forth in this Section 3 is discontinued or is no longer applicable, the parties agree to work together in good faith to use the applicable successor standard or the most appropriate alternate standard to fulfill the requirements of this Section 3. 4. Limitations of warranty and liability, and indemnification Radiant warrants to Merchant that the CPGateway Services will be performed in a professional and timely manner in accordance with: (i) applicable industry standards; (ii) applicable Data Security Guidelines; (iii) applicable laws and regulations; and (iv) the service level standards set forth in Exhibit A to this Agreement. The warranties expressed in this Agreement are the only warranties made by Radiant with respect to CPGateway and are in lieu of all other warranties, expressed or implied, including but not limited to implied warranties of merchantability and/or fitness for a particular purpose. Neither Merchant nor Radiant will be liable for any consequential, indirect or special damages, or any claims for lost profits, lost savings or lost data by or of the other party. In no event will either party’s aggregate liability for any damages to the other party or to any other person or entity ever exceed the amount of fees and charges paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or services giving rise to such damages (the “Cap”), regardless of the form of action, whether based on contract, tort, negligence, strict liability, products liability or otherwise, provided however, that with respect to a party’s indemnification obligations, the Cap shall be (i) a cumulative total of $10 million for all indemnification obligations to Pla-Fit Health, LLC and its affiliates and franchisees arising from a data security breach caused by Radiant’s negligence or willful misconduct, and (ii) for all other indemnification obligations, 1.5 times the amount of fees and charges paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or services giving rise to such damages. Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses, including reasonable attorney’s fees incurred by Radiant arising out of or from (i) claims or demands by third parties against Radiant arising out of Merchant's breach of this Agreement, or (ii) Merchant’s violation of any applicable international, federal, state or local law, regulation or ordinance in connection with Merchant’s use of CPGateway, provided that Merchant is promptly notified by Radiant of receipt of notice of such claim, is given control of the defense or settlement of such claim, and is given reasonable assistance requested by Merchant, at Merchant’s cost, with regard to such claim Radiant agrees to indemnify and hold Merchant harmless for any claims, losses, liabilities, cost and expenses, including reasonable attorney’s fees incurred by Merchant arising out of or from (i) claims or demands by third parties against Merchant arising out of Radiant's breach of this Agreement, or (ii) Radiant’s violation of any applicable international, federal, state or local law, regulation or ordinance in connection with CPGateway, or (iii) Radiant’s non-compliance with applicable Data Security Guidelines, provided that Radiant is promptly notified by Merchant of receipt of notice of such claim, is given control of the defense or settlement of such claim, and is given reasonable assistance requested by Radiant, at Radiant’s cost, with regard to such claim. Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs, and attorneys’ fees that are awarded against Merchant in a final, non-appealable court judgment for the IP Claim, or required to be paid by Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant has agreed to in writing. As used in this Section 4, an “IP Claim” means a suit brought against Merchant by a third party to the extent the suit alleges that Merchant’s use of CPGateway infringes a patent or copyright of the third party. Radiant’s obligations set forth in this Section 4 are subject to Merchant’s (a) providing Radiant prompt written notice that the IP Claim has been threatened or brought, whichever is sooner (the “Claim Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the IP Claim; (c) cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or settlement; and (e) complying with all court orders. If Merchant’s delay in providing the Claim Notice causes detriment to Radiant with respect to the defense or resolution of the IP Claim, Radiant’s obligations set forth in this Section 4 will not apply to the IP Claim. Notwithstanding any other provision of this Agreement, Radiant is not responsible for any fees (including attorneys’ fees), expenses, costs, judgments, or awards that are incurred prior to Radiant’s receipt of the Claim Notice from Merchant. Version 2010-11-30 Radiant Systems, Inc. CounterPo Radiant will have the sole right to select counsel. Merchant may, at Merchant’s sole expense, engage additional counsel of Merchant’s choosing for purposes of conferring with Radiant’s counsel. The obligations set forth in this Section 4 will not apply to an IP Claim if the alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with Merchant’s design, specification, or instruction; (b) modification of CPGateway other than by Radiant; (c) any product or service not provided by Radiant to Merchant; or (d) combination or use of CPGateway with any product or service not provided by Radiant to Merchant. If an intellectual property infringement allegation is brought or threatened against CPGateway, or Radiant believes that such an allegation may be brought or threatened, Radiant may (a) obtain a license for CPGateway; (b) modify CPGateway; or (c) replace CPGateway with a product having substantially the same functionality. THIS SECTION 4 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND MERCHANT’S EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM. The parties obligations under this paragraph 4 shall survive termination of this Agreement. 5. Term and termination This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month basis until terminated by one of the parties as described herein. Merchant may terminate this Agreement with 30 days written notice to Radiant; however, Radiant is under no obligation to refund Merchant any fees previously paid. Subject to Exhibit A, Merchant agrees to pay all fees through the date of Radiant’s receipt of Merchant’s written termination request. Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or condition of this Agreement and fails to remedy the non-compliance within thirty (30) days’ notice by Radiant to Merchant. Additionally, Radiant reserves the right to decline initial service, disable or suspend Merchant’s access to CPGateway or otherwise terminate this Agreement without notice (i) if Merchant uses CPGateway for any purpose other than as expressly permitted in this Agreement, (ii) if Merchant violates any applicable international, federal, state or local law, regulation or ordinance in connection with its use of CPGateway, or (iii) if Merchant’s use of CPGateway adversely affects the use of such service by other Radiant clients. Regardless of the method of termination, but subject to Exhibit A, Merchant agrees to pay all fees and charges due under this Agreement through the applicable date of termination. 6. Governing Law and Venue This Agreement shall be construed and governed in accordance with the laws of the State of New York without regard to its conflicts of laws rule. The parties agree to the following venue provisions: if litigation is instituted by Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted by Merchant, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to the jurisdiction and venue of such courts hereby waive and covenant not to assert any claim that they are not subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial doctrine of forum non conveniens). 7. Force Majeure If performance by a party, or any of its respective affiliates, or a Payment Network, of any services or obligation under this Agreement is prevented, restricted, delayed or interfered with by reason of acts or events beyond their reasonable control (each, a “Force Majeure Event”), including acts of God, war, acts of terrorism, riot, embargoes, acts of civil or military authorities, fire, floods, hurricanes, earthquakes, or lightning, disputes and strikes (excluding strikes or labor actions by a party’s employees), then provided that: (i) such failure to perform could not have been prevented by reasonable precautions by the non-performing party (including with respect to Radiant by Radiant meeting its obligations for performing disaster recovery and redundancy services as described in this Agreement), and (ii) the non-performing party gives prompt written notice of the Force Majeure Event and its inability to perform to the other party, the time for the non-performing party’s performance shall be extended for a period equal to the duration of the Force Majeure Event. For avoidance of doubt, no Force Majeure Event shall excuse, limit or otherwise affect Radiant’s obligation to perform disaster recovery and redundancy services. The parties agree that the following shall not be Force Majeure Events: failure in performance of an affiliate, vendor, agent or sub-contractor of a party asserting the Force Majeure Event unless such failure is due to causes beyond the reasonable control of such affiliate, vendor, contractor or agent and could not have been avoided by commercially Version 2010-11-30 Radiant Systems, Inc. CounterPo reasonable measures. 8. General This Agreement constitutes the complete and exclusive agreement between Merchant and Radiant with respect to CPGateway, superseding any prior agreements or understandings, oral or written, with respect to such subject matter, and can only be amended by signed written agreement of the parties. Should any term of this Agreement be declared void or unenforceable by any court of competent jurisdiction, such declaration shall have no effect on the remaining terms hereof. The failure of either party to enforce any rights granted hereunder or to take any action against the other party in the event of any breach hereunder shall not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event of future breaches. Notices required or permitted to be given under this Agreement (such as any notice of breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested), to the respective party at the address set forth on the first page of the Agreement or at such other address as such party may hereafter notify the other party in accordance with this Section. Each such notice shall be effective when actually received. Version 2010-11-30 Radiant Systems, Inc. CounterPo EXHIBIT A SERVICE LEVEL STANDARDS 1. TRANSACTION PROCESSING SUBMISSION STANDARD Radiant agrees that the CPGateway will be available for submission of Transaction Card files received from Merchant and will properly submit such Transaction Card files for processing and settlement by the Payment Networks 99.0% of time (excluding planned maintenance windows), measured on a monthly basis. This standard will not apply to a Transaction Card file: (a) that is subject to a Force Majeure Event pursuant to Section 7 of this Agreement; (b) that is submitted in a file format to Radiant that does not comply with written specifications which are provided by Radiant to Merchant or with applicable Payment Network Rules; (c) that includes fraudulent or erroneous information due to no fault of Radiant or a Radiant agent; or (d) that excludes information required for processing by Radiant in accordance with this Agreement. If Radiant fails to meet the above standard, Radiant will credit to Merchant for each month in which Radiant failed to meet the standard an amount equal to twenty percent (20%) of the monthly fees received by Radiant for the provision of the CPGateway services and applicable to the month in which Radiant failed to meet the standard, except for a failure caused by any of the reasons stated in clauses (a) through (d) above or that is otherwise due to acts or omissions of a party other than Radiant. In the event that Radiant breaches the above standard more than four times in any six (6) month period, Customer may terminate this Agreement without penalty by providing Radiant written notice of its intent to so terminate within 30 days of any such fourth breach. “Transaction Card” or “Transaction Cards” shall mean a Visa or MasterCard credit or debit card, travel and entertainment card, or other credit or debit card shown as a qualified card on lists furnished to Merchant by its payment processor(s) from time to time. Version 2010-11-30 Radiant Systems, Inc. CounterPo EXHIBIT E Customer Connect Merchant Agreement [See Attached] Version 2010-11-30 Radiant Systems, Inc. CounterPo CUSTOMERCONNECT MERCHANT AGREEMENT The following terms and conditions (the “Agreement”) shall govern the use of the CustomerConnect service and the Radiant Utility (as described below) provided by Radiant Systems, Inc. (“Radiant”). 1. CustomerConnect description CustomerConnect is a service provided by Radiant that allows a licensed user of Radiant’s CounterPoint point of sale software ("Merchant") to manage customer and contact information, and communicate with such customers and contacts via e-mails or other electronic messages. In order to provide the CustomerConnect service to Merchant, Radiant’s servers will access Merchant's CounterPoint database via a Radiant software utility (the “Radiant Utility”). Depending upon the version of Radiant’s CounterPoint point of sale software Merchant is currently using, Merchant may be required to download via the Internet and install the Radiant Utility at the Merchant location where Merchant’s CounterPoint database resides. When applicable, if remote installation cannot be performed by Merchant for any reason Merchant must work with an authorized CounterPoint reseller for installation of the Radiant Utility, and in such situation, Merchant acknowledges that the authorized reseller may charge Merchant for such installation at the reseller’s then-current rates. During the term of this Agreement, Radiant grants to Merchant the limited right to make use of the Radiant Utility solely in connection with Merchant’s use of the CustomerConnect service in its business subject to the terms contained in this Agreement and the additional terms in the separate CounterPoint software license agreement between Radiant and Merchant. Other than the express limited rights granted above to Merchant to make use of the Radiant Utility in connection with a valid subscription to the CustomerConnect service, no other rights are granted to Merchant in and in respect of the Radiant Utility and Radiant reserves all other rights therein and thereto. More complete statements of CustomerConnect and CounterPoint capabilities are described in other materials published by Radiant and on Radiant's web site at www.CounterPointPOS.com. 2. Fees and charges Fees and charges for CustomerConnect will be paid on Merchant’s behalf by Pla-Fit Health, LLC. After the initial three-year term, rates are subject to change with 30 days notice. Any contracted rates separately agreed to by Radiant and Merchant in writing take precedence over fees shown in this Agreement. 3. Data privacy CustomerConnect collects customer data and certain transactional information from Merchant's CounterPoint database, including, but not limited to, product information, customer information, orders and invoices. Radiant agrees not to disclose or otherwise make use of Merchant's business or transactional information, except to provide services or in response to a subpoena, warrant, court order, levy, attachment, order of a courtappointed receiver or other legal process. Notwithstanding the foregoing, Radiant may use and disclose data associated with Merchant’s usage of CustomerConnect, in the form of anonymous, aggregate usage statistics that Radiant derives through Merchant’s use of CustomerConnect, but only in forms that do not reveal the identity of Merchant or Merchant’s customers, or any of their respective confidential or personal information, and only in sample sizes that are large enough to ensure that the aggregate data is truly anonymous. Merchant acknowledges and agrees that Radiant’s use and disclosure of anonymous, aggregate usage statistics along with associated zip code information for marketing research purposes will be permitted. 4. Access to systems Merchant agrees to allow Radiant and Retail Control Systems reasonable access to Merchant’s CustomerConnect service in order to provide Merchant with support services and to monitor Merchant’s compliance with the terms of this Agreement. Any such access will be performed in a professional manner, in Version 2010-11-30 Radiant Systems, Inc. CounterPo accordance with applicable industry standards. Radiant agrees to indemnify, defend and hold harmless Merchant (collectively, the “PF Indemnified Parties”) from all claims, actions, losses and expenses, including reasonable attorney’s fees and legal costs, incurred by any of the PF Indemnified Parties and fines and/or penalties imposed on any of the PF Indemnified Parties as a result of the negligent performance by Radiant of any of the activities set forth in the first sentence of this Section 4. Radiant may gather statistical information about Merchant’s locations including, without limitation, hardware information, software versions and feature usage, and use such information for valid business purposes such as product analysis and billing information. Additionally, Radiant and/or Radiant subcontractors providing support services to Merchant may access configuration and operational data in connection with providing such support services. 5. Merchant responsibility Merchant understands and agrees that Merchant is entirely responsible for Merchant’s use of the CustomerConnect service, including but not limited to, proper account set up, configuration settings, obtaining consents or opt-ins from patrons / end-users to participate in use of the service, maintenance of valid phone numbers, e-mail addresses or other communications identifiers as are appropriate for the particular type of communications being sent by use of the CustomerConnect service, the content of the communications being sent, including the products and services offered for sale therein, and compliance with laws and regulations applicable to Merchant’s sending of electronic communications in various forms. By enrolling in the CustomerConnect service Merchant acknowledges and agrees that Radiant will be making available to Merchant a software application that will allow Merchant to send communications of various kinds to Merchant’s patrons and that these communications may take the form of e-mails or other electronic messages (collectively, “Communications”). Communications may be routed through one or more wireless or other mobile carrier service, an Internet service provider or other communications services provider. Merchant acknowledges and agrees that Communications may not be encrypted and may include confidential information, so Merchant should use appropriate care when determining the content of, and with the sending of, any Communications. Delivery and receipt of Communications may be delayed or impacted by one or more factors pertaining to technical or other issues with wireless and other mobile carrier(s), Internet service providers, other communication services provider(s) or other third parties, or due to other reasons outside of Radiant’s control. Radiant will not be liable for any losses or damages arising from any disclosure of any Communications to any third party or any non-delivery, delayed delivery, misdirected delivery or mishandling of, or inaccurate content in, any Communications sent via the CustomerConnect service. Merchant may only use images provided as part of the CustomerConnect service for the sole purpose of composing Communications in connection with Merchant’s use of the Customer Connect service and for no other purpose. Further, Merchant’s use of any third party or purchased e-mail list(s) is strictly prohibited in connection with Merchant’s use of the CustomerConnect service. Merchant agrees that Merchant will not use the CustomerConnect service to engage in any illegal, unlawful, immoral, or unethical activities. Merchant acknowledges and agrees that Radiant does not endorse the content of the Communications or any products or services offered for sale therein and Radiant specifically disclaims any responsibility for any threatening, libelous, obscene, harassing, or offensive material contained therein. Merchant acknowledges and agrees that certain aspects of the CustomerConnect service utilize a service known as CertifiedEmail and Tokens which is provided by a third party, Goodmail Systems Inc. (“Goodmail”). By entering into this Agreement Merchant agrees to the policies specified by Goodmail as published at Goodmail’s web site, including the CertifiedEmail Acceptable Use and Security Policy, the Privacy Policy and the Terms of Service, the current version of which is available at http://www.goodmailsystems.com/docs/Goodmail_aup.pdf (the “AUP”). Goodmail reserves the right to modify the AUP at any time and if Goodmail so notifies Radiant, Radiant will provide Merchant with prompt notice of such modifications by any of the notification means set forth in paragraph 10 below. If any such modification is not acceptable to Merchant, Merchant’s only recourse is to cease use of the CerfitiedEmail and Tokens portion of the CustomerConnect service by providing notice to Radiant that it prefers to cease such use. By continuing to use the CustomerConnect service following receipt of a notice regarding a modification to the AUP, Merchant accepts and agrees to be bound by such new terms. Additionally, Merchant acknowledges that Radiant may be required to suspend or terminate Merchant’s access Version 2010-11-30 Radiant Systems, Inc. CounterPo to the CertifiedEmail and Tokens portion of the CustomerConnect service if Merchant exceeds the maximum allowable reputation score set forth in the AUP or for violating the terms and conditions of the AUP as determined by Goodmail in its sole discretion. Merchant hereby consents to the disclosure of Merchant’s name, address and other Merchant information as may be necessary in connection with Goodmail’s accreditation process for the use of CertifiedEmail and Tokens. Merchant’s obligations under this paragraph 5 shall survive termination of this Agreement. 6. Communication Footers For each Communication sent, Merchant acknowledges and agrees that Radiant may add an identifying footer stating “Email Marketing by Radiant”, “Powered by Radiant” or a similar message. 7. Limitations of warranty and liability, and indemnification The warranties expressed in this Agreement are the only warranties made by Radiant with respect to the CustomerConnect service and the Radiant Utility and are in lieu of all other warranties, expressed or implied, including but not limited to implied warranties of merchantability and/or fitness for a particular purpose. Neither Merchant nor Radiant will be liable for any consequential, indirect, or special damages, or any claims for lost profits, lost savings or lost data by or of the other party. In no event will either party's aggregate liability for any damages to the other party or to any other person or entity ever exceed the amount of fees and charges paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or services giving rise to such damages, regardless of the form of action, whether based on contract, tort, negligence, strict liability, products liability or otherwise. Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses, including reasonable attorneys' fees incurred by Radiant arising out of or from (i) Merchant's breach of this Agreement, (ii) claims or demands by third parties against Radiant relating to this Agreement, (iii) Merchant’s use of the CustomerConnect service, or (iv) Merchant’s violation of any applicable international, federal, state or local law, regulation or ordinance (including without limitation, the Federal Trade Commission Act, and the CANSPAM Act), in connection with Merchant’s use of the CustomerConnect service. Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs, and attorneys’ fees that are awarded against Merchant in a final, non-appealable court judgment for the IP Claim, or required to be paid by Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant has agreed to in writing. As used in this Section 7, an “IP Claim” means a suit brought against Merchant by a third party to the extent the suit alleges that Merchant’s use of CustomerConnect infringes a patent or copyright of the third party. Radiant’s obligations set forth in this Section 7 are subject to Merchant’s (a) providing Radiant prompt written notice that the IP Claim has been threatened or brought, whichever is sooner (the “Claim Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the IP Claim; (c) cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or settlement; and (e) complying with all court orders. If Merchant’s delay in providing the Claim Notice causes detriment to Radiant with respect to the defense or resolution of the IP Claim, Radiant’s obligations set forth in this Section 7 will not apply to the IP Claim. Notwithstanding any other provision of this Agreement, Radiant is not responsible for any fees (including attorneys’ fees), expenses, costs, judgments, or awards that are incurred prior to Radiant’s receipt of the Claim Notice from Merchant. Radiant will have the sole right to select counsel. Merchant may, at Merchant’s sole expense, engage additional counsel of Merchant’s choosing for purposes of conferring with Radiant’s counsel. The obligations set forth in this Section 7 will not apply to an IP Claim if the alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with Merchant’s design, specification, or instruction; (b) modification of CustomerConnect other than by Radiant; (c) any product or service not provided by Radiant to Merchant; or (d) combination or use of CustomerConnect with any product or service not provided by Radiant to Merchant. If an intellectual property infringement allegation is brought or threatened against CustomerConnect, or Radiant believes that such an allegation may be brought or threatened, Radiant may (a) obtain a license for CustomerConnect; (b) modify CustomerConnect; or (c) replace CustomerConnect with a product having substantially the same functionality. THIS SECTION 7 SETS FORTH Version 2010-11-30 Radiant Systems, Inc. CounterPo RADIANT’S ENTIRE OBLIGATIONS, AND MERCHANT’S EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM. The parties’ obligations under this paragraph 7 shall survive termination of this Agreement. 8. Term and termination This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month basis until terminated by one of the parties as described herein. Merchant may terminate this Agreement at any time by submitting written notice to Radiant; however, Radiant is under no obligation to refund Merchant any fees previously paid. Merchant agrees to pay all fees through the date of Radiant's receipt of Merchant's written termination request. Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or condition of this Agreement and fail to remedy any non-compliance within thirty (30) days’ notice by Radiant to Merchant. Additionally, Radiant may disable or suspend Merchant’s access to the CustomerConnect service or otherwise terminate this Agreement without notice (i) if Merchant uses CustomerConnect for any purpose other than as expressly permitted in this Agreement, (ii) if Merchant uses any third party or purchased e-mail list(s) in connection with Merchant’s use of the CustomerConnect service, (iii) if Merchant violates any applicable international, federal, state or local law, regulation or ordinance (including without limitation, the Federal Trade Commission Act, and the CAN-SPAM Act) in connection with its use of the CustomerConnect service, or (iv) if Merchant’s use of the CustomerConnect service adversely affects the use such service by other Radiant clients. Regardless of the method of termination, Merchant agrees to pay all fees and charges due under this Agreement through the applicable date of termination. 9. Governing Law and Venue This Agreement shall be construed and governed in accordance with the laws of the State of New York without regard to its conflict of laws rule. The parties agree to the following venue provisions: if litigation is instituted by Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted by Merchant, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to the jurisdiction and venue of such courts and hereby waive and covenant not to assert any claim that they are not subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial doctrine of forum non conveniens). 10. General This Agreement and the separate CounterPoint software license agreement between Radiant and Merchant collectively constitutes the complete and exclusive agreement between Merchant and Radiant with respect to CustomerConnect and the Radiant Utility, superseding any prior agreements or understandings, oral or written, with respect to such subject matter, and can only be amended by signed written agreement of the parties. Should any term of this Agreement be declared void or unenforceable by any court of competent jurisdiction, such declaration shall have no effect on the remaining terms hereof. The failure of either party to enforce any rights granted hereunder or to take any action against the other party in the event of any breach hereunder shall not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event of future breaches. Notices required or permitted to be given under this Agreement (such as any notice of breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested), to the respective party at the address set forth on the first page of the Agreement or at such other address as such party may hereafter notify the other party in accordance with this Section. Each such notice shall be effective when actually received. Version 2010-11-30 Radiant Systems, Inc. CounterPo EXHIBIT F SmartAlerts Merchant Agreement [See Attached] Version 2010-11-30 Radiant Systems, Inc. CounterPo SMARTALERTS MERCHANT AGREEMENT The following terms and conditions (the “Agreement”) shall govern the use of the SmartAlerts service and the Radiant Utility (as described below) provided by Radiant Systems, Inc. (“Radiant”). 1. SmartAlerts description SmartAlerts is a service provided by Radiant that allows a licensed user of Radiant’s CounterPoint point of sale software ("Merchant") to receive notification of events occurring in Merchant’s CounterPoint database through one or more mobile communications devices designated by Merchant based upon the specific configuration parameters within CounterPoint and SmartAlerts that have been initiated and specified by Merchant or Merchant’s authorized representative. Merchant represents and warrants that Merchant and the holders and users of such mobile communications devices that are designated by Merchant to receive Smart Alerts messages in the form specified by Merchant have agreed to receive Smart Alerts messages on such devices. Radiant’s servers will access Merchant's CounterPoint database via a Radiant software utility (the “Radiant Utility”) that Merchant will be required to download via the Internet and install at the Merchant location where Merchant’s CounterPoint database resides. If remote installation cannot be performed by Merchant for any reason Merchant must work with Merchant’s authorized CounterPoint reseller for installation of the Radiant software utility (Merchant’s authorized reseller reserves the right to charge Merchant for such installation at the reseller’s then-current rates). During the term of this Agreement, Radiant grants to Merchant the limited right to make use of the Radiant Utility solely in connection with Merchant’s use of the SmartAlerts service in its business subject to the terms contained in this Agreement and the additional terms in the separate CounterPoint software license agreement between Radiant and Merchant. Other than the express limited rights granted above to Merchant to make use of the Radiant Utility in connection with a valid subscription to the Smart Alerts service, no other rights are granted to Merchant in and in respect of the Radiant Utility and Radiant reserves all other rights therein and thereto. More complete statements of SmartAlerts and CounterPoint capabilities are described in other materials published by Radiant and on Radiant's web site at www.CounterPointPOS.com. 2. Fees and charges Fees and charges for SmartAlerts will be paid on Merchant’s behalf by Pla-Fit Health, LLC. After the initial three-year period, rates are subject to change with 30 days notice. Any contracted rates separately agreed to by Radiant and Merchant in writing take precedence over fees shown in this Agreement. Merchant is responsible for any and all charges including, but not limited to, fees associated with text or email messaging imposed by Merchant’s mobile carrier or communication services provider. Message and data rates may apply. Such charges include those from Merchant’s mobile carrier or communication services provider. 3. Data privacy SmartAlerts collects certain transactional information from Merchant's CounterPoint database, including, but not limited to, product information, customer information, orders and invoices. Radiant agrees not to disclose or otherwise make use of Merchant's business or transactional information, except to provide services or in response to a subpoena, warrant, court order, levy, attachment, order of a court-appointed receiver or other comparable legal process. Notwithstanding the foregoing, Radiant may use and disclose data associated with Merchant’s usage of SmartAlerts, in the form of anonymous, aggregate usage statistics that Radiant derives through Merchant’s use of SmartAlerts, but only in forms that do not reveal the identity of Merchant or Merchant’s customers, or any of their respective confidential or personal information, and only in sample sizes that are large enough to ensure that the aggregate data is truly anonymous. Merchant acknowledges and agrees that Radiant’s use and disclosure of anonymous, aggregate usage statistics along with associated zip code information for marketing research purposes will be permitted. Version 2010-11-30 Radiant Systems, Inc. CounterPo 4. Access to systems Merchant agrees to allow Radiant and Retail Control Systems reasonable access to Merchant’s SmartAlerts service in order to provide Merchant with support services and to monitor Merchant’s compliance with the terms of this Agreement. Any such access will be performed in a professional manner, in accordance with applicable industry standards. Radiant agrees to indemnify, defend and hold harmless Merchant (collectively, the “PF Indemnified Parties”) from all claims, actions, losses and expenses, including reasonable attorney’s fees and legal costs, incurred by any of the PF Indemnified Parties and fines, and/or penalties imposed on any of the PF Indemnified Parties as a result of the negligent performance by Radiant of any of the activities set forth in the first sentence of this Section 4. Radiant may gather statistical information about Merchant’s locations including, without limitation, hardware information, software versions and feature usage, and use such information for valid business purposes such as product analysis and billing information. Additionally, Radiant and/or Radiant subcontractors providing support services to Merchant may access configuration and operational data in connection with providing such support services. 5. Merchant responsibility Merchant understands and agrees that Merchant is entirely responsible for the configuration of Merchant's SmartAlerts service, including but not limited to, proper account set up. By enrolling in the SmartAlerts service Merchant acknowledges and agrees that Radiant will be sending Merchant notification of events occurring in Merchant’s CounterPoint database through Merchant’s mobile carrier or other communication services provider ("Alerts") and that Merchant’s mobile carrier or communication services provider is acting as Merchant’s agent in this capacity. Merchant agrees to provide and maintain a valid phone number, e-mail address or other delivery location to Radiant that is functionally compatible with Radiant’s then-current delivery mechanism for receipt of Alerts as documented on Radiant’s web sites for SmartAlerts. Additionally, Merchant agrees to indemnify, defend and hold Radiant harmless from and against any and all claims, losses, liability, cost and expenses, including reasonable attorneys' fees, arising from (i) Merchant’s provision of a phone number, e-mail address, mobile device, or other delivery location that is erroneous or otherwise not Merchant’s (or one for which Merchant does not have permission for SmartAlerts to be sent), (ii) Merchant’s violation of any applicable international, federal, state or local law, regulation or ordinance, and (iii) any use by Merchant of the SmartAlerts service. Merchant acknowledges and agrees that Alerts may not be encrypted and may include confidential information about Merchant, including transactional information. Delivery and receipt of Alerts may be delayed or impacted by one or more factors pertaining to Merchant’s Internet service provider(s), mobile carrier(s), communication services provider(s) or other third parties, or due to other reasons outside of Radiant’s control. Radiant will not be liable for any losses or damages arising from any disclosure of any Alerts to any third party or any non-delivery, delayed delivery, misdirected delivery or mishandling of, or inaccurate content in, any Alert sent via the SmartAlerts service. Merchant acknowledges and agrees that information available directly through Merchant’s CounterPoint database without the use of a mobile device may not be available via the SmartAlerts service or may be more current than the information available via the SmartAlerts services. Additionally, Merchant acknowledges and agrees that Radiant will not be liable for any errors or delays in the content of any Alert, or for any actions taken in reliance thereon. Merchant agrees to be entirely and solely responsible for any actions taken as a result of a notification from the SmartAlerts service and that under no circumstances will Radiant be liable for any use thereof. Merchant’s obligations under this paragraph 5 shall survive termination of this Agreement. 6. Limitations of warranty and liability, and indemnification The warranties expressed in this Agreement are the only warranties made by Radiant with respect to the SmartAlerts service and the Radiant Utility and are in lieu of all other warranties, expressed or implied, including but not limited to implied warranties of merchantability and/or fitness for a particular purpose. Neither Merchant nor Radiant will be liable for any consequential, indirect, or special damages, or any claims for lost profits, lost savings or lost data by or of the other party. In no event will either party’s aggregate liability for any damages to the other party or to any other person or entity ever exceed the amount of fees and charges Version 2010-11-30 Radiant Systems, Inc. CounterPo paid by Merchant hereunder during the immediately prior 12 month period for the applicable software or services giving rise to such damages, regardless of the form of action, whether based on contract, tort, negligence, strict liability, products liability or otherwise. Merchant agrees to indemnify and hold Radiant harmless for any claims, losses, liabilities, cost and expenses, including reasonable attorneys’ fees incurred by Radiant arising out of or from (i) Merchant's breach of this Agreement, (ii) claims or demands by third parties against Radiant relating to this Agreement; (iii) Merchant’s use of the SmartAlerts service, or (iv) Merchant’s violation of any applicable international, federal, state or local law, regulation or ordinance in connection with Merchant’s use of the SmartAlerts service. Radiant will, at its expense, defend Merchant against any IP Claim. Radiant will also pay the damages, costs, and attorneys’ fees that are awarded against Merchant in a final, non-appealable court judgment for the IP Claim, or required to be paid by Merchant or on Merchant’s behalf in a settlement of the IP Claim that Radiant has agreed to in writing. As used in this Section 6, an “IP Claim” means a suit brought against Merchant by a third party to the extent the suit alleges that Merchant’s use of SmartAlerts infringes a patent or copyright of the third party. Radiant’s obligations set forth in this Section 6 are subject to Merchant’s (a) providing Radiant prompt written notice that the IP Claim has been threatened or brought, whichever is sooner (the “Claim Notice”); (b) providing Radiant sole control of the defense, appeal, and/or settlement of the IP Claim; (c) cooperating with Radiant with respect to the defense, appeal, and/or settlement of the IP Claim; (d) providing Radiant with requested documentation and information relevant to the IP Claim or its defense, appeal, and/or settlement; and (e) complying with all court orders. If Merchant’s delay in providing the Claim Notice causes detriment to Radiant with respect to the defense or resolution of the IP Claim, Radiant’s obligations set forth in this Section 6 will not apply to the IP Claim. Notwithstanding any other provision of this Agreement, Radiant is not responsible for any fees (including attorneys’ fees), expenses, costs, judgments, or awards that are incurred prior to Radiant’s receipt of the Claim Notice from Merchant. Radiant will have the sole right to select counsel. Merchant may, at Merchant’s sole expense, engage additional counsel of Merchant’s choosing for purposes of conferring with Radiant’s counsel. The obligations set forth in this Section 6 will not apply to an IP Claim if the alleged infringement is based on, caused by, or results from (a) Radiant’s compliance with Merchant’s design, specification, or instruction; (b) modification of SmartAlerts other than by Radiant; (c) any product or service not provided by Radiant to Merchant; or (d) combination or use of SmartAlerts with any product or service not provided by Radiant to Merchant. If an intellectual property infringement allegation is brought or threatened against SmartAlerts, or Radiant believes that such an allegation may be brought or threatened, Radiant may (a) obtain a license for SmartAlerts; (b) modify SmartAlerts; or (c) replace SmartAlerts with a product having substantially the same functionality. THIS SECTION 6 SETS FORTH RADIANT’S ENTIRE OBLIGATIONS, AND MERCHANT’S EXCLUSIVE REMEDIES, WITH RESPECT TO INTELLECTUAL PROPERTY INFRINGEMENT, INCLUDING ANY IP CLAIM. The parties’ obligations under this paragraph 6 shall survive termination of this Agreement. 7. Term and termination This Agreement shall continue for an initial term of three years, after which it will renew on a month-to-month basis until terminated by one of the parties as described herein. Merchant may terminate this Agreement at any time by submitting written notice to Radiant; however, Radiant is under no obligation to refund Merchant any fees previously paid. Merchant agrees to pay all fees through the date of Radiant's receipt of Merchant's written termination request. Radiant may terminate this Agreement without notice should Merchant fail to comply with any material term or condition of this Agreement and fail to remedy any non-compliance within thirty (30) days’ notice by Radiant to Merchant. Additionally, Radiant may disable or suspend Merchant’s access to the SmartAlerts service or otherwise terminate this Agreement without notice (i) if Merchant uses SmartAlerts for any purpose other than as expressly permitted in this Agreement or (ii) if Merchant violates any applicable international, federal, state or local law, regulation or ordinance in connection with its use of the SmartAlerts service. Regardless of the method of termination, Merchant agrees to pay all fees and charges due under this Agreement through the applicable date of termination. Version 2010-11-30 Radiant Systems, Inc. CounterPo 8. Governing Law and Venue This Agreement shall be construed and governed in accordance with the laws of the State of New York without regard to its conflicts of laws rule. The parties agree to the following venue provisions: if litigation is instituted by Radiant, the matter shall be subject to the exclusive jurisdiction of the New Hampshire state courts or, if there is federal jurisdiction, the United States District Court for the District of New Hampshire. If litigation is instituted by Merchant, the matter shall be subject to the exclusive jurisdiction of Georgia state courts or, if there is federal jurisdiction, the United States District Court for the Northern District of Georgia. The parties agree to submit to the jurisdiction and venue of such courts and hereby waive and covenant not to assert any claim that they are not subject to personal jurisdiction in those courts or that venue in those courts is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial doctrine of forum non conveniens). 9. General This Agreement and the separate CounterPoint software license agreement between Radiant and Merchant collectively constitutes the complete and exclusive agreement between Merchant and Radiant with respect to SmartAlerts and the Radiant Utility, superseding any prior agreements or understandings, oral or written, with respect to such subject matter, and can only be amended by signed written agreement of the parties. Should any term of this Agreement be declared void or unenforceable by any court of competent jurisdiction, such declaration shall have no effect on the remaining terms hereof. The failure of either party to enforce any rights granted hereunder or to take any action against the other party in the event of any breach hereunder shall not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event of future breaches. Notices required or permitted to be given under this Agreement (such as any notice of breach or termination, and any demand for indemnification) shall be in writing and shall be given or made by delivery in person, by nationally recognized courier service, or by certified mail (postage prepaid, return receipt requested), to the respective party at the address set forth on the first page of the Agreement or at such other address as such party may hereafter notify the other party in accordance with this Section. Each such notice shall be effective when actually received. Version 2010-11-30 Radiant Systems, Inc. CounterPo PURCHASE ORDER FOR VISIONARY PRODUCTS AND SOFTWARE PURCHASE ORDER Page 1 of 27 CONFIDENTIAL PURCHASE ORDER FOR VISIONARY® PRODUCTS AND SOFTWARE RETAIL CONTROL SYSTEMS, INC. 86 Chosen Vale Ln., Suite 206 Enfield, NH 03748 NOTICE TO USERS: YOU MUST AGREE TO ALL TERMS BELOW BEFORE YOU PURCHASE THE PRODUCTS OR SOFTWARE. IF YOU DO NOT AGREE TO ALL TERMS, DO NOT USE THE PRODUCTS OR SOFTWARE. BY USING THE PRODUCTS OR SOFTWARE YOU ACCEPT ALL THE TERMS BELOW IN THIS PURCHASE ORDER (“AGREEMENT”). PURCHASE ORDER Page 1 of 27 CONFIDENTIAL PURCHASE ORDER Page 2 of 27 CONFIDENTIAL TABLE OF CONTENTS I. Definitions. ....................................................................................................................... 3 II. Contract. ........................................................................................................................... 5 III. Payment Terms. ................................................................................................................ 5 IV. Right to Suspend, Terminate or Refuse to Accept Orders. .................................................. 6 V. Invoices. ........................................................................................................................... 7 VI. Shipping Charges; Title; Risk of Loss. .................................................................................. 7 VIII. Proprietary Rights. ............................................................................................................ 8 IX. Restrictions. ...................................................................................................................... 8 X. Customer & System Data................................................................................................... 9 XI. Important Additional Information.................................................................................... 10 A. Limited Warranty. ....................................................................................................................... 10 B. Equipment Warranty. ................................................................................................................. 11 C. Equipment Warranty Administration. ........................................................................................ 12 D. Limitation of Liability................................................................................................................... 12 E. Independent Contractor Relationship; Assignment; Subcontracting. ........................................ 13 F. Force Majeure. ............................................................................................................................ 14 G. Export Compliance. ..................................................................................................................... 14 H. Excluded Data. ............................................................................................................................ 15 I. Regulatory Requirements. .......................................................................................................... 16 J. Entire Agreement; Severability. .................................................................................................. 16 K. Governing Law. ........................................................................................................................... 18 L. Venue. ......................................................................................................................................... 18 M. Dispute Resolution. ..................................................................................................................... 18 N. Notices. ....................................................................................................................................... 19 O. Access to Your Computer System. .............................................................................................. 19 P. Data Security and Cybercrime Prevention. ................................................................................. 20 Q. Credit/Debit Card and Banking Information Security. ................................................................ 21 R. Conditions Beyond RCSs’ Control. .............................................................................................. 21 S. Confidential Information............................................................................................................. 22 T. Confidentiality Obligations. ........................................................................................................ 23 PURCHASE ORDER Page 2 of 27 CONFIDENTIAL PURCHASE ORDER CONFIDENTIAL Page 3 of 27 This agreement (“Agreement”), made this , 2013, (“Effective Date”) is by and between Retail Control Systems, Inc. (RCS), a New Hampshire based company having its principal place of business at 86 Chosen Vale Lane, Suite 206, Enfield, NH 03748 and (CUSTOMER) a business located at . Customer is executing this Agreement on behalf of itself and the entities, if any, listed in Attachment 1 to this Agreement (“Customer Group”). Customer acknowledges that the members of the Customer Group are Affiliates by virtue of the fact that they control, are controlled by, or are under common control with Customer and with the other entities included on such list. The individual signing this Agreement on behalf of Customer and the Customer Group represents and warrants that he/she has the power and authority to execute this Agreement on behalf of Customer and each such Customer Group. References to “Customer” in this Agreement include each member of the Customer Group. The Customer agrees to purchase from RCS and RCS agrees to sell to the Customer such Products, Software and Services as agreed pursuant to the following terms and conditions. I. Definitions. A. “Affiliate” means any entity Controlling, Controlled by, or under common Control with a Party. In addition, Affiliates of Customer shall include all of the entities participating in the Customer Group, regardless of whether such entities meet the requirements set forth in the previous sentence. B. “Control” and its derivatives means, with respect to an entity, possessing, directly or indirectly, the power to direct or cause the direction of the management, policies, PURCHASE ORDER Page 3 of 27 CONFIDENTIAL PURCHASE ORDER CONFIDENTIAL Page 4 of 27 and operations of the entity, whether through ownership of voting securities, by contract, or otherwise. C. “Customer” or “You” means the person(s) or entity(ies) placing this Purchase Order with Retail Control Systems, Inc. (hereinafter “RCS”). D. “Franchisor” means Pla‐Fit Franchise LLC. E. "Materials" means all manuals, documents, content and other items included with or as part of the Products or Software, such as text, graphics, logos, button icons, images, audio clips, information, data, photographs, graphs, videos, typefaces, music, and sounds. F. “Payment Networks” shall mean Visa, MasterCard, and any credit or debit card network issuing credit or debit cards or their duly authorized entities, agents, or affiliates, together with the National Automated Clearing House Association. G. “Payment Processor” shall mean RBS Citizens, N.A., WorldPay US, Inc., Jack Henry & Associates, Inc. or such other credit card, debit card and/or ACH processors whose services Franchisor may require Customer to utilize. H. “Payment Rules” shall mean the operating rules and regulations of the Payment Processors and any applicable Payment Network, as in effect from time to time. I. "Products" means computer hardware and peripheral products provided hereunder. J. "Software" means any software, license, library, utility, tool, or other computer or program code, in object (binary) or source‐code form, as well as the related documentation, provided by RCS to you. PURCHASE ORDER Page 4 of 27 “Software” includes software locally CONFIDENTIAL PURCHASE ORDER Page 5 of 27 CONFIDENTIAL installed on your systems and software accessed by you through the Internet or other remote means (such as websites, portals, and "cloud‐based" solutions). K. “Services” means any work performed by RCS for You covered under this agreement. L. “Visionary Ancillary Agreements” shall mean the various agreements in place between Customer and Franchisor related to the VisionaryTM System, Radiant Systems (“Radiant”), payment gateway providers such as Maas Global Solutions Corporation, Payment Processors and Payment Networks. M. “VisionaryTM Software” shall mean the software supplied or made available by Franchisor to Customer for use with the VisionaryTM System. “VisionaryTM System” shall mean Franchisor’s proprietary branded VisionaryTM hardware, including the Radiant Terminals, the VisionaryTM Software, and other third‐party software licensed to and services provided to Customer for use with the VisionaryTM Software and the Radiant Terminals. II. Contract. This Purchase Order forms a legally binding contract between you and RCS in relation to your purchase and use of Products, Software and Materials. III. Payment Terms. Payment in full must be received by RCS prior to RCS's acceptance of an order or shipment of any Products, Software or Material. Each accepted order will be interpreted as a single Agreement, independent of any other orders. Payment for Products, Software, and Services must be made by credit card or check. It is the responsibility of Customer to ensure PURCHASE ORDER Page 5 of 27 CONFIDENTIAL PURCHASE ORDER Page 6 of 27 CONFIDENTIAL payments are authorized and approved on time to ensure receipt of payment. In no event shall RCS ship any Products or Software to you prior to payment in full of all amounts due under this Purchase Order. IV. Right to Suspend, Terminate or Refuse to Accept Orders. In the event Customer cancels payment, or Customer’s tender of payment is refused or returned for insufficient funds, Customer shall immediately return all Products in original packaging and condition and Software subject to such payment to RCS, and RCS shall have the right in its sole direction to suspend or refuse to accept additional orders from Customer. RCS further reserves the right to charge a restocking fee and/or seek collection of all amounts due (including by referral to third party collectors), plus all reasonable legal fees (including reasonable attorneys’ fees) and costs associated with efforts to obtain payment and/or return of the Products and Software. RCS reserves the right to remove Customer from the VisionaryTM System in the event Customer (or Franchisor on Customer’s behalf) fails to remit payment. All Software licenses granted pursuant to this Agreement and all Services to be performed under this Agreement shall automatically terminate if any of the following events occur: (1) Customer’s Franchise Disclosure Document with Franchisor expires and is not renewed by Franchisor or is terminated; (2) Customer transfers the Radiant Terminal on which the Software and VisionaryTM Software is used; (3) Customer is in breach of any of the VisionaryTM Ancillary Agreements and such breach would permit the other party to terminate such agreement; (4) Customer is in breach of this Agreement and fails to cure such breach within thirty (30) days from notice by RCS. Customer shall place all orders in the country where the Products and PURCHASE ORDER Page 6 of 27 CONFIDENTIAL PURCHASE ORDER Page 7 of 27 CONFIDENTIAL Software are to be shipped, and payment of the corresponding price and costs shall be made in U.S. currency. V. Invoices. Customer agrees that all invoices shall be deemed accurate unless Customer advises RCS in writing of a bona fide, material error within fourteen (14) days of the date of such invoice. In the event that Customer advises RCS of a material error, payment of any amounts corrected or modified by RCS in writing shall be due within fourteen (14) days of such correction. VI. Shipping Charges; Title; Risk of Loss. Taxes, shipping and handling charges are not included in Product prices unless expressly indicated at the time of sale. Title to Products (except title to Software remains with the applicable licensors) and risk passes from RCS to Customer upon delivery to Customer at the location specified by Customer. RCS is responsible for shipping and handling of Products to RCS’s facilities from RCS’s suppliers. Customer is responsible for shipping and handling costs of Products from RCS’s facilities to that Customer’s determined locations. Shipping and delivery dates are provided as estimates only. You must notify RCS within three (3) days of the date of your receipt of Product or Software if you believe any part of your order is missing, inaccurate, or damaged. VII. Taxes. RCS shall supply Customer an estimate of the taxes due on purchased Products and Software. Customer shall be solely responsible for verifying and remitting taxes required to the relevant tax authority. To the maximum extent permitted by law, Customer shall indemnify, hold harmless, and defend, including the payment of reasonable attorneys’ fees and costs, RCS, PURCHASE ORDER Page 7 of 27 CONFIDENTIAL PURCHASE ORDER Page 8 of 27 CONFIDENTIAL Franchisor and Pla‐Fit Health, LLC against any claim arising from taxes due or claimed to be due on account of Customer’s purchase of Products and/or Software from RCS. VIII. Proprietary Rights. All right, title, and interest in the intellectual property (including all copyrights, patents, trademarks, trade secrets, and trade dress) embodied in the Software, Products and Materials, shall belong solely and exclusively to RCS, PFIP LLC, Franchisor, Pla‐Fit Health, LLC, or the applicable suppliers or licensors, and you shall have no rights whatsoever in any of the above, except as expressly granted in this Agreement or in any agreement between you, Franchisor or Pla‐Fit Health, LLC or any of their Affiliates. The Software, Products and Materials are protected pursuant to copyright laws and international copyright treaties, as well as other intellectual property laws and treaties. You may not modify, remove, delete, augment, add to, publish, transmit, adapt, translate, participate in the transfer or sale of, create derivative works from, or in any way exploit any of the Software, or Materials, in whole or in part. You may use the Software and Materials only in connection with your use of the Products and the VisionaryTM System. IX. Restrictions. Customer may not copy, modify, or create a derivative work, collective work, or compilation of the Software, and may not reverse engineer, decompile or otherwise attempt to extract the code of the Software or any part thereof. Customer may not license, sell, assign, sublicense, or otherwise transfer or encumber the Software; and may not use the Software in excess of the authorized number of licensed seats for concurrent users, sites, or other criteria PURCHASE ORDER Page 8 of 27 CONFIDENTIAL PURCHASE ORDER Page 9 of 27 CONFIDENTIAL specified in the applicable licensing agreements. Customer is further prohibited from (1) attempting to use or gain unauthorized access to RCS networks or to any third party's networks or equipment; (2) permitting other individuals or entities to use the Software or copy the Software; (3) attempting to probe, scan, or test the vulnerability of Software or a system, account, or network of RCS or any of its customers or suppliers; (4) interfering or attempting to interfere with service to any user, host, or network; (5) engaging in fraudulent activity of any nature; (6) transmitting unsolicited bulk or commercial messages; (7) restricting, inhibiting, or otherwise interfering with the ability of any other person, regardless of intent, purpose, or knowledge, to use or enjoy the Software (except for tools with safety and security functions); or (8) restricting, inhibiting, interfering with, or otherwise disrupting or causing a performance degradation to any RCS (or RCS Service supplier) facilities used to deliver the Services or used for the VisionaryTM System. The bar code scanning Products provided under this Agreement may be used only in accordance with Attachment 2 to this Agreement. X. Customer & System Data. In connection with your use of the Products or Software, it may be necessary for RCS to obtain, receive, or collect data or information, including system‐specific data (collectively, the "Data"). In such cases, you grant RCS a non‐exclusive, worldwide, royalty‐free, perpetual, non‐ revocable license to use, compile, distribute, display, store, process, reproduce, or create derivative works of the Data solely for those purposes. You also grant RCS the right to copy and maintain such material and content on RCS's servers (or the servers of its suppliers). You represent and warrant that you have obtained all rights, permissions, and consents necessary to use and transfer the Data within and outside of the country in which you are located in PURCHASE ORDER Page 9 of 27 CONFIDENTIAL PURCHASE ORDER Page 10 of 27 CONFIDENTIAL conjunction with RCS's performance of the Services or your use of the Software (including providing adequate disclosures and obtaining legally sufficient consent from your employees, agents, and contractors). XI. Important Additional Information. NOTHING IN THIS SECTION SHALL EXCLUDE OR LIMIT RCS'S WARRANTY OR LIABILITY FOR LOSSES THAT MAY NOT BE LAWFULLY EXCLUDED OR LIMITED BY APPLICABLE LAW. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF CERTAIN WARRANTIES OR CONDITIONS OR THE LIMITATION OR EXCLUSION OF LIABILITY FOR LOSS OR DAMAGE CAUSED BY NEGLIGENCE, BREACH OF CONTRACT, BREACH OF IMPLIED TERMS, OR INCIDENTAL OR CONSEQUENTIAL DAMAGES. SOME JURISDICTIONS DO NOT ALWAYS ENFORCE CLASS ACTION OR JURY WAIVERS, AND MAY LIMIT FORUM SELECTION CLAUSES AND STATUTE OF LIMITATIONS PROVISIONS, AS SUCH, ONLY THE LIMITATIONS THAT ARE LAWFULLY APPLIED TO YOU IN YOUR JURISDICTION WILL APPLY TO YOU, AND RCS'S LIABILITY WILL BE LIMITED TO THE MAXIMUM EXTENT PERMITTED BY LAW. A. Limited Warranty. (1) RCS HAS THE RIGHT TO GRANT THE LICENSES TO THE RCS PROPRIETARY SOFTWARE LICENSED IN SECTION VIII ABOVE, AND SUCH SOFTWARE WILL SUBSTANTIALLY CONFORM TO THE FUNCTIONAL SPECIFICATIONS. EXCEPT AS EXPRESSLY STATED IN THE PRECEDING SENTENCES OF THIS PARAGRAPH, RCS, (INCLUDING ITS AFFILIATES, CONTRACTORS, AND AGENTS, AND EACH OF THEIR RESPECTIVE EMPLOYEES, DIRECTORS, AND OFFICERS), ON PURCHASE ORDER Page 10 of 27 CONFIDENTIAL PURCHASE ORDER Page 11 of 27 CONFIDENTIAL BEHALF OF ITSELF AND ITS SUPPLIERS AND FRANCHISOR AND PLA‐FIT HEALTH LLC (COLLECTIVELY, THE "RCS PARTIES") MAKES NO EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO ANY OF THE PRODUCTS, SOFTWARE, OR SERVICES, INCLUDING BUT NOT LIMITED TO ANY WARRANTY (1) OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, PERFORMANCE, SUITABILITY, OR NON‐INFRINGEMENT; (2) RELATING TO THIRD‐PARTY PRODUCTS, SOFTWARE, OR SERVICES; (3) RELATING TO THE PERFORMANCE OF ANY HARDWARE OR SOFTWARE, OR RCS'S PERFORMANCE OF THE SERVICES; OR (4) REGARDING THE RESULTS TO BE OBTAINED FROM THE PRODUCTS, SOFTWARE, SERVICES, OR THE RESULTS OF ANY RECOMMENDATION BY RCS. (2) WARRANTIES DO NOT COVER DAMAGE DUE TO EXTERNAL CAUSES, SUCH AS ACCIDENT, ABUSE, MISUSE, PROBLEMS WITH ELECTRICAL POWER, SERVICE NOT PERFORMED OR AUTHORIZED BY RCS (INCLUDING INSTALLATION OR DE‐INSTALLATION), USAGE NOT IN ACCORDANCE WITH PRODUCT OR SOFTWARE INSTRUCTIONS, NORMAL WEAR AND TEAR, OR USE OF PARTS AND COMPONENTS NOT SUPPLIED OR INTENDED FOR USE WITH THE PRODUCTS, SOFTWARE, OR SERVICES. THESE WARRANTIES DO NOT APPLY TO THIRD‐PARTY PRODUCTS. B. Equipment Warranty. Subject to payment by Customer of the purchase price and Radiant Warranty 1515 fee, RCS warrants that the Products will be free of malfunctions and defects. For purposes of this Agreement, a “malfunction” or “defect” shall not include reasons relating solely to physical appearance, aesthetic quality, or other cosmetic factors, battery life, printer consumables, or broken cables or connectors. The warranty does not apply to malfunctions, defects, or damage PURCHASE ORDER Page 11 of 27 CONFIDENTIAL PURCHASE ORDER Page 12 of 27 CONFIDENTIAL arising from (i) failure to operate the Products and VisionaryTM System continually in a suitable operating environment; (ii) use of the Products other than for operating the VisionaryTM System; (iii) neglect or abuse of the Products; (iv) accident or disaster (including, but not limited to, flood, fire, or lightning); (v) alteration or modification of the Products without RCS’s express written consent; (vi) faulty electrical power; or (vii) problems caused by software other than Software provided by RCS. C. Equipment Warranty Administration. Customer shall promptly notify RCS of any malfunctions or defects in the Products. Within one (1) business day from receipt of the notification, RCS will either correct the malfunction or defect or will notify Customer that replacement of the Product is required. If a replacement Product is required, RCS will deliver the replacement Product within one (1) business day from submission to the hardware manufacturer before 4:00 pm EST and RCS’s representative will issue a returned merchandise authorization (“RMA”) number to Customer. Customer shall return the defective Product to a location specified by RCS. Customer is responsible for the cost of returning the defective Product. RCS reserves the right to (a) charge Customer for the cost of replacement Product(s), and/or (b) remove Customer from the Visionary system, if Customer fails to return the defective or malfunctioning Product to the location specified by RCS within two (2) business days of receiving replacement Product. D. Limitation of Liability (a) RCS, FRANCHISOR AND PLA‐FIT HEALTH LLC WILL NOT BE LIABLE FOR ANY INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE PRODUCTS OR SOFTWARE PROVIDED HEREUNDER. EXCEPT AS PURCHASE ORDER Page 12 of 27 CONFIDENTIAL PURCHASE ORDER Page 13 of 27 CONFIDENTIAL OTHERWISE SPECIFIED IN THIS PURCHASE ORDER, NEITHER PARTY SHALL HAVE LIABILITY FOR THE FOLLOWING: (1) LOSS OF REVENUE, INCOME, PROFIT, OR SAVINGS; (2) LOST OR CORRUPTED DATA OR SOFTWARE, LOSS OF USE OF A SYSTEM OR NETWORK OR THE RECOVERY OF SUCH; (3) LOSS OF BUSINESS OPPORTUNITY; (4) BUSINESS INTERRUPTION OR DOWNTIME; OR (5) SOFTWARE OR PRODUCTS NOT BEING AVAILABLE FOR USE. (b) THE TOTAL LIABILITY OF RCS, FRANCHISOR AND PLA‐FIT HEALTH FOR ANY AND ALL CLAIMS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (INCLUDING ANY PRODUCTS, SOFTWARE, OR SERVICES PROVIDED HEREUNDER) SHALL NOT EXCEED THE TOTAL AMOUNT PAID BY CUSTOMER FOR THE SPECIFIC PRODUCT, SOFTWARE, OR SERVICE GIVING RISE TO SUCH CLAIM(S). (c) THESE LIMITATIONS, EXCLUSIONS, AND DISCLAIMERS SHALL APPLY TO ALL CLAIMS FOR DAMAGES, WHETHER BASED IN CONTRACT, WARRANTY, STRICT LIABILITY, NEGLIGENCE, TORT, OR OTHERWISE. THE PARTIES AGREE THAT THESE LIMITATION OF LIABILITY ARE AGREED ALLOCATIONS OF RISK CONSTITUTING IN PART THE CONSIDERATION FOR RCS'S SALE OF PRODUCTS, SOFTWARE, OR SERVICES TO CUSTOMER, AND SUCH LIMITATIONS WILL APPLY NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY AND EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITIES. E. Independent Contractor Relationship; Assignment; Subcontracting. The parties are independent contractors. No provision of this Agreement will or shall be deemed to create an association, trust, partnership, joint venture or other entity or similar legal relationship between RCS and Customer, or impose a trust, partnership or fiduciary duty, PURCHASE ORDER Page 13 of 27 CONFIDENTIAL PURCHASE ORDER Page 14 of 27 CONFIDENTIAL obligation, or liability on or with respect to such entities. Neither party will have any rights, power, or authority to act or create an obligation, express or implied, on behalf of another party except as specified in this Agreement. Neither party may assign this Agreement without the permission of the other. In the case of an assignment by RCS, the assignment will also require the consent of Pla‐Fit Health LLC. Any attempt to assign this Agreement in breach of this paragraph is void and of no effect. F. Force Majeure. Neither party shall be liable to the other for any failure to perform any of its obligations (except payment obligations) under this Agreement during any period in which such performance is delayed by circumstances beyond its reasonable control, such as fire, flood, war, embargo, strike, riot, or the intervention of any governmental authority (a "Force Majeure"). In such event, however, the delayed party must promptly provide the other party with written notice of the Force Majeure. The delayed party's time for performance will be excused for the duration of the Force Majeure, but if the Force Majeure event lasts longer than 30 days, then the other party may immediately terminate, in whole or in part, this Agreement or the applicable Service Agreement by giving written notice to the delayed party. G. Export Compliance. You acknowledge that the Products, Software, and Services provided under this Agreement, which may include technology and encryption, are subject to the customs and export control laws and regulations of the United States ("U.S."), may be rendered or performed either in the U.S., in countries outside the U.S., or outside of the borders of the country in which you or your system is located, and may also be subject to the customs and PURCHASE ORDER Page 14 of 27 CONFIDENTIAL PURCHASE ORDER Page 15 of 27 CONFIDENTIAL export laws and regulations of the country in which the Products, Software, or Services are rendered or received. You agree to abide by those laws and regulations. You further represent that any software provided by you and used as part of the Products, Software, or Services contains no encryption or, to the extent that it contains encryption, such software is approved for export without a license. If you cannot make the preceding representation, you agree to provide RCS with all of the information needed for RCS to obtain export licenses from the U.S. Government or any other applicable national government and to provide RCS with such additional assistance as may be necessary to obtain such licenses. Notwithstanding the foregoing, you are solely responsible for obtaining any necessary licenses relating to the export of software. RCS also may require export certifications from you for software. RCS's acceptance of any order for Products, Software, or Services is contingent upon the issuance of any applicable export license required by the U.S. Government or any other applicable national government; RCS is not liable for delays or failure to deliver Products, Software, or Services resulting from your failure to obtain such license or to provide such certification. Each Party agrees to indemnify, defend and hold the other harmless from any third‐party claims, demands, or causes of action against the other due to the indemnifying party's violation or alleged violation of the applicable export laws, regulations or orders. H. Excluded Data. Customer acknowledges that Software and Services provided under this Agreement are not designed with security and access management for the processing and/or storage of the following categories of data: (1) data that is classified and or used on the U.S. Munitions list, including software and technical data; (2) articles, services and related technical data PURCHASE ORDER Page 15 of 27 CONFIDENTIAL PURCHASE ORDER Page 16 of 27 CONFIDENTIAL designated as defense articles and defense services; (3) ITAR (International Traffic in Arms Regulations) related data; and (4) other personally identifiable information that is subject to heightened security requirements as a result of Customer's internal policies or practices or by law (collectively referred to as "Excluded Data"). Customer hereby agrees that Customer is solely responsible for reviewing its data that will be provided to RCS (or to which RCS will have access) to ensure that it does not contain Excluded Data. I. Regulatory Requirements. RCS is not responsible for determining whether any third‐party Product to be used in the Products, Software, or performance of the Services, satisfies the local regulatory requirements of the country to which such Products, Software, or Services are to be delivered, and RCS shall not be obligated to provide any Product or Software or perform any Services where the resulting Products, Software, or Services do not satisfy the local regulatory requirements. J. Entire Agreement; Severability. This Agreement is the entire agreement between you and RCS with respect to its subject matter and supersedes all prior oral and written understandings, communications, or agreements between you and RCS. Any preprinted terms on your purchase order shall be given no force or effect and no terms of a purchase order that conflict with this Agreement shall be binding on RCS. No amendment to or modification of this Agreement, in whole or in part, will be valid or binding unless it is in writing and executed by authorized representatives of both parties. If any provision of this Agreement should be found to be void or unenforceable, such PURCHASE ORDER Page 16 of 27 CONFIDENTIAL PURCHASE ORDER Page 17 of 27 CONFIDENTIAL provision will be stricken or modified, but only to the extent necessary to comply with the law, and the remainder of this Agreement will remain in full force and will not be terminated. PURCHASE ORDER Page 17 of 27 CONFIDENTIAL PURCHASE ORDER K. Page 18 of 27 CONFIDENTIAL Governing Law. This Agreement, any related Service Agreement, and ANY CLAIM, DISPUTE, OR CONTROVERSY (WHETHER IN CONTRACT, TORT, OR OTHERWISE, INCLUDING STATUTORY, CONSUMER PROTECTION, COMMON LAW, INTENTIONAL TORT AND EQUITABLE CLAIMS) BETWEEN CUSTOMER AND RCS, including their affiliates, contractors, and agents, and each of their respective employees, directors, and officers arising from or relating to this Agreement, its interpretation, or the breach, termination or validity thereof, the relationships which result from this Agreement (including, to the full extent permitted by applicable law, relationships with third parties who are not signatories to this Agreement), RCS's advertising, or any related purchase (a "Dispute") shall be governed by the laws of the State of New Hampshire, without regard to conflicts of law. The parties agree that the UN Convention for the International Sale of Goods will have no force or effect on this Agreement. L. Venue. The parties agree that any Dispute relating to this Agreement, or the Products, Software or Services, shall be brought exclusively in the state or federal courts located in New Hampshire. Customer and RCS agree to submit to the personal jurisdiction of the state and federal courts located within New Hampshire, and agree to waive any and all objections to the exercise of jurisdiction over the parties by such courts and to venue in such courts. M. Dispute Resolution. PURCHASE ORDER Page 18 of 27 CONFIDENTIAL PURCHASE ORDER Page 19 of 27 CONFIDENTIAL Customer and RCS will attempt to resolve any Dispute relating to this Agreement, or the Products, Software or Services, through direct negotiation between or among persons fully authorized to resolve the Dispute or through mediation utilizing a mediator agreed to by the parties, rather than through litigation. The existence or results of any negotiation or mediation will be treated as confidential. Notwithstanding the foregoing, either party will have the right to obtain from a state or federal court in New Hampshire a temporary restraining order, preliminary injunction, or other equitable relief to preserve the status quo, prevent irreparable harm, avoid the expiration of any applicable limitations period, or preserve a superior position with respect to other creditors, although the merits of the underlying Dispute will be resolved in accordance with this paragraph. In the event the parties are unable to resolve the Dispute within 30 days of notice of the Dispute to the other party, the parties shall be free to pursue all remedies available at law or in equity. N. Notices. Notice to the parties under this Agreement must be in writing and sent by certified mail (postage prepaid, return receipt requested) or receipted courier service to the addresses set forth below or to such other address (including facsimile or e‐mail) as specified in writing and notified in accordance with this paragraph, and will be effective upon receipt. O. Access to Your Computer System. You agree to allow RCS and its authorized sub‐contractors reasonable access to your computer system and the Products or Software to provide any applicable maintenance and support services, verify license status, change settings, and/or install or remove applications to address data security risks. You further agree to purchase, install and maintain appropriate PURCHASE ORDER Page 19 of 27 CONFIDENTIAL PURCHASE ORDER Page 20 of 27 CONFIDENTIAL high‐speed Internet access in order to provide RCS remote access to your computer system. You acknowledge and agree that RCS may use its proprietary software applications or other third party software applications in order to access your system, and you agree that RCS may load such product(s) and keep them updated on your system as needed. RCS may gather statistical information about your Licensed Site including, without limitation, hardware information, software versions and feature usage, and use such information for valid business purposes such as product analysis and billing information. Additionally, RCS and/or its authorized Sub‐contractors may access configuration and operational data in connection with providing support services. RCS may use and disclose transactional and system information in the form of anonymous, aggregate usage statistics that RCS derives from the Licensed Site via your use of the Software, but only in forms that do not reveal your identity or your confidential information, except as required by law or as needed in connection with any legal proceedings. P. Data Security and Cybercrime Prevention. It is your responsibility to have and maintain in place malware protection software and security for all of your systems and data, which security includes properly configured firewalls, unique, strong passwords per user, physical security, and access control policies. You acknowledge that the security and protection of your network and the data and applications on that network, including protections against unauthorized access, is solely and entirely your responsibility. A properly configured firewall is required for each site using a persistent connection to the public Internet or any private network where there is a potential for unauthorized access. You acknowledge that, to be effective, malware protection software, hardware firewalls, system passwords and other security software and hardware components PURCHASE ORDER Page 20 of 27 CONFIDENTIAL PURCHASE ORDER Page 21 of 27 CONFIDENTIAL require periodic and routine updates, which you must obtain or perform as applicable. RCS, its authorized sub‐contractors, Franchisor and Pla‐Fit Health, LLC disclaim any warranty, express or implied, that the Software or your data will remain malware‐free. You acknowledge that your failure to discharge your obligations to keep your systems secure may result in investigation fees, fines, penalties, charge backs and credit card fraud costs, and other losses as levied by credit card processors and others, remediation costs (which may include system component updates or replacements) and lost profits and lost reputability of your business, which costs may be so large that they may threaten the survival of your business. You waive any claims hereunder against RCS, its authorized sub‐contractors, Franchisor and Pla‐Fit Health, LLC for any such costs or losses to the extent arising from your failure to have or maintain a secure system, or to the extent arising as a result of a failure or breach of your security for your systems or data, or as a result of any unauthorized access to your systems. In the event of a security breach of your systems, you agree to promptly (i) notify RCS and Pla‐Fit Health, LLC of such breach, (ii) provide RCS and Pla‐Fit Health, LLC with copies of any forensic reports related to such breach, and (iii) authorize any investigating entities to disclose all relevant information regarding their investigations, including investigations in progress, of such breach to RCS and Pla‐Fit Health, LLC. Q. Credit/Debit Card and Banking Information Security. Customer agrees to maintain full compliance with current PCIDSS, Payment Rules and standards and proofs as related and applicable to each Customer site, Customer’s use of the VisionaryTM System, services, Products and Software provided. R. Conditions Beyond RCSs’ Control. PURCHASE ORDER Page 21 of 27 CONFIDENTIAL PURCHASE ORDER Page 22 of 27 CONFIDENTIAL RCS, its authorized sub‐contractors, Franchisor and Pla‐Fit Health, LLC shall not be held responsible for misuse or incorrect operation of the Software and Hardware, use of the Software and Hardware by untrained personnel, improper entry of data in connection with the Software, or modification of settings or other behavior affecting data security. You understand that the use of any equipment outside the manufacturer’s recommended specifications may seriously affect the performance of the Software. RCS, ITS AUTHORIZED SUB‐CONTRACTORS, FRANCHISOR AND PLA‐FIT HEALTH, LLC SHALL NOT BE HELD LIABLE OR RESPONSIBLE FOR CONDITIONS BEYOND THEIR CONTROL THAT MAY AFFECT THE PERFORMANCE OR ACCESSIBILITY OF THE SOFTWARE OR THE DATA CONTAINED THEREIN, INCLUDING, BUT NOT LIMITED TO, LOSS OR INTERUPTION OF POWER, YOUR OPERATING ENVIRONMENT FACTORS, PROGRAM VIRUSES AND MALWARE, INTERNET SERVICE DISRUPTIONS, ENVIRONMENTAL CONDITIONS AND OTHER NATURAL EVENTS, AND UNAUTHORIZED ACCESS OR DATA SECURITY BREACHES. S. Confidential Information. RCS and Customer (each, a “Receiving Party”) acknowledges that it may receive or otherwise have access to information, data and materials of the other Party, its Affiliates and agents (each, a “Disclosing Party”) which the Disclosing Party considers to be confidential, proprietary, a trade secret, or otherwise restricted. As used in this Agreement, “Confidential Information” means all information of Disclosing Party, in any form, that is disclosed or otherwise made available directly or indirectly to Receiving Party, or that Receiving Party otherwise acquires in the course of performing under this Agreement, that is marked confidential, restricted, proprietary, or which a reasonably prudent business person would PURCHASE ORDER Page 22 of 27 CONFIDENTIAL PURCHASE ORDER Page 23 of 27 CONFIDENTIAL deem to be confidential information in light of the nature of the information and the circumstances of its disclosure. T. Confidentiality Obligations. (1) Receiving Party shall hold Disclosing Party’s Confidential Information in strictest confidence and exercise at least the same standard of care to prevent the disclosure of such Confidential Information as it exercises to prevent the disclosure of its own Confidential Information and in no event less than reasonable care. (2) Except as otherwise provided herein, Receiving Party shall limit dissemination of Confidential Information of Disclosing Party to those persons within its organization, including contractors, or representatives who have a need to know such information to fulfill the purposes of this Agreement. Receiving Party shall use the Confidential Information of Disclosing Party only to perform its obligations and exercise its rights under this Agreement. Receiving Party shall take appropriate action by instruction or agreement with each of its employees, contractors, consultants, agents and representatives to protect the Disclosing Party’s Confidential Information. Disclosing Party shall retain ownership of, and reserves all rights with respect to, it’s Confidential Information except where provided for under this agreement. (3) Exclusions. The nonuse and nondisclosure restrictions set forth in this Section shall not apply to any Confidential Information of Disclosing Party to the extent that such Confidential Information: (a) is or becomes generally available to the public without any wrongful act or breach of this Agreement by the Receiving Party; (b) was PURCHASE ORDER Page 23 of 27 CONFIDENTIAL PURCHASE ORDER Page 25 of 27 CONFIDENTIAL ATTACHMENT 1 LIST OF MEMBERS OF CUSTOMER GROUP PURCHASE ORDER Page 25 of 27 CONFIDENTIAL PURCHASE ORDER Page 26 of 27 CONFIDENTIAL ATTACHMENT 2 SPECIAL TERMS FOR USE OF BAR CODE SCANNING PRODUCTS 1. Customer may not use Bar Code Scanning Products provide under this Agreement (“Scanners”) for the purpose of scanning driver’s licenses or state issued IDs unless and until: a) Customer has obtained written legal advice from a lawyer(s) admitted to practice in the states in which Customer’s clubs are located that the use of the Scanners to scan driver’s licenses and/or state issued IDs in those states is legal and the advice discloses any state law limitation on the use of the Scanners; b) a copy of the legal advice provided pursuant to (a) has been provided to Franchisor’s General Counsel. Thereafter Customer may only use the Scanners in accordance with the legal advice. 2. Customer may not use the Scanners for the purpose of scanning driver’s licenses or state issued IDs where Franchisor directs Customer not to use the Scanners for such purpose. 3. Customer is responsible for monitoring Laws applicable to the states in which Customer’s clubs are located to ensure that Scanners are not used in breach of such Laws. 4. Customer may not re‐configure the Scanners or use the Scanners independently from the Radiant Terminal or other than in the course of day to day transactions contemplated by the VisionaryTM System. PURCHASE ORDER Page 26 of 27 CONFIDENTIAL PURCHASE ORDER Page 27 of 27 CONFIDENTIAL 5. Breach of any of paragraphs (1) through (4) above entitles RCS to cease its Services and also entitles RCS to terminate all Software licenses provisioned under this Agreement. Customer shall indemnify, defend and hold harmless RCS, Franchisor, Pla‐Fit Health LLC and their employees, agents, Affiliates from and against any and all claims, losses, damages, costs (including customer notification costs), fines or expenses resulting from a breach by Customer of the terms of this Attachment 2. PURCHASE ORDER Page 27 of 27 CONFIDENTIAL MERCHANT AGREEMENTS ! EPS MERCHANT PROCESSING SERVICES AGREEMENT TEMPLATE ! ! (Insert Pla-Fit’s corporate logo here) ! ! ! ! ! ENTERPRISE PAYMENT SOLUTIONS MERCHANT PROCESSING SERVICES AGREEMENT ! ! ! ! This Enterprise Payment Solutions Processing Services Agreement (“Agreement”) is made by and between Jack Henry & Associates, Inc., acting through its ProfitStars Division, with its principal place of business located at 663 West Highway 60, Monett, Missouri 65708 (“JHA”), and the undersigned merchant (“Merchant”) as of the date this Agreement is signed by JHA below (the “Effective Date”). Merchant is executing this Agreement on behalf of itself and the entities, if any, listed in Attachment 1 to this Schedule C (“Merchant Affiliates”). Merchant acknowledges that the Merchant Affiliates are affiliates by virtue of the fact that they control, are controlled by, or are under common control with Merchant and with the other entities included on such list. The individual signing this Agreement on behalf of Merchant and the Merchant Affiliates represents and warrants that he/she has the power and authority to execute this Agreement on behalf of Merchant and each such Merchant Affiliate. JHA provides enterprise payment solutions relating to electronic transaction processing services for organizations who receive payments from customers by paper checks or electronic ACH transactions. With respect to ACH transactions, JHA is the ACH processor through which debit and credit transactions are submitted to the ACH Network in conjunction with ACH check processing origination and st settlement services. With respect to transactions involving substitute check images permitted under the Check for the 21 Century (Check 21) Act, JHA provides capture services which facilitates the processing of the substitute check images with financial institutions in the Federal Reserve System. Merchant is lawfully engaged in the business of selling goods and/or services to third parties from whom it will receive paper checks and/or ACH transactions and with whom it will initiate and process ACH and Check 21 transactions in the U.S. Federal Reserve Bank System, using JHA’s enterprise payment solutions. The parties agree as follows: ! ! ! ! ! 1. JHA agrees to provide to Merchant the enterprise payment solutions described in this Agreement and any then-current merchant processing services price list provided by JHA or a JHA enterprise payment solution reseller partner (as the case may be), on the Standard Terms and Conditions appended to and incorporated as a part of this Agreement. Merchant agrees to use the JHA enterprise payment solutions in accordance with these Standard Terms and Conditions. 2. This Agreement shall become effective once it has been signed by an authorized representative of both JHA and Merchant, as of the Effective Date referenced above. This Agreement may be terminated by either party as provided in the Termination section of the Standard Terms and Conditions. In witness of this Agreement, authorized representatives of the parties have signed this Agreement document where provided below. JHA: ! Merchant: Jack Henry & Associates, Inc. ProfitStars Division ! By: By: Printed Name: Printed Name: Title: Title: Date: Date: JHA’s Federal Tax ID No.: Merchant’s Federal Tax ID No.: ! ! ber ! ! ! ! ! Merchant’s Address: ! ! (Street Address) ! (City, State, Zip Code) Standard Terms and Conditions ! 1. ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! DEFINITIONS: The following terms used in this Agreement shall have the meaning specified below: (a) (b) (c) “ACH Transaction”: An electronic payment transaction originated by Merchant and processed through the ACH Network in the Federal Reserve System. “Administrator”: The Merchant’s employee who has been designated as Merchant’s primary contact with JHA for the Services and has been appointed by Merchant to manage the administration of Services access, including passwords, and communicate authorizations to JHA. “Bank of First Deposit”: In a Check 21 Transaction, the financial institution which receives the Entry from JHA and transmits the Entry through the Federal Reserve Bank system for transmittal to the Customer’s financial Institution for debit or credit to the Customer’s account. ! ! ! ! st (d) “Check 21”: The Check for the 21 Century (Check 21) Act and all regulations pertaining to the Check 21 Act. (e) “Check 21 Transaction”: An electronic payment transaction utilizing a Substitute Check image permitted by Check 21. (f) “Confidential Information”: The Software programs and documentation used by JHA to provide the Services to Merchant and passwords and other information or materials of a confidential and proprietary nature that JHA provides to Merchant under this Agreement. (g) “Courseware”: The end user training courseware and materials relating to the use and operation of the Services and JHA’s processing system that JHA or a Reseller may provide through classroom training, online training or e-Learning delivery to Merchant. (h) “Customer”: Merchant’s customer who submits a payment to Merchant by means of a paper check or ACH transfer. (i) “Customer Financial Data”: Information, including but not limited to such things as credit and financial data, bank account information, concerning Customers and Customers’ paper check and/or ACH transfers. (j) ! “Data Security Guidelines”: Written data security guidelines published by a regulatory agency or industry group that apply on a mandatory basis to Customer Financial Data and the Services provided by JHA to Merchant under this Agreement, which may include tthe Payment Card Industry Data Security Standards (“PCI-DSS), Statement on Standards for Attestation Engagements (SSAE) No. 16, and Service Organization Control Report Type 2 (SOC-2). (k) “Entry”: A transaction submitted by Merchant to JHA for processing by the Services and further defined in the NACHA Rules. (l) “Franchisor”: PLA-Fit Franchise, LLC. (m) “Franchisor Fees”: Defined in Section 2.9 below. (n) “Franchisor Settlement Account”: A commercial demand deposit bank account which Franchisor has established for JHA’s access and use to settle payment of Franchisor Fees from transactions processed by JHA under this Agreement. (o) “Image”: The image that results from an electronic scan of a paper check by Merchant. (p) “NACHA Rules”: The then-current rules, regulations and procedural guidelines published by the National Automated Clearing House Association (“NACHA”) and/or all regional payment alliances associated with NACHA. (q) “Originating Depository Financial Institution” or “ODFI”: In an ACH Transaction, the financial institution which receives the Entry from JHA and transmits the Entry to its ACH Operator for transmittal to a Receiving Depository Financial Institution for debit or credit to the Customer’s account, as these terms are further defined in the NACHA Rules. (r) “Reseller”: A third party reseller, such as an ISO reseller or Value Added Reseller, appointed and authorized by JHA to resell and/or deliver the Services and Courseware to Merchant. ! “Services”: The ACH processing services and/or the Check 21 processing services provided by JHA to Merchant under this Agreement. (t) “Settlement Account”: A commercial demand deposit bank account which Merchant has established for JHA’s access and use to settle financial payment transactions processed by JHA under this Agreement. (u) “Software”: Software programs and associated documentation and materials that JHA provides to Merchant for use with the Services. (v) “Substitute Check”: The electronic Image of a paper check, as defined in Check 21. 2. SET-UP AND DELIVERY OF SERVICES: 2.1 In conjunction with this Agreement, Merchant has completed and submitted to JHA or a Reseller (as applicable) an initial written application and supporting documentation about Merchant’s business and financial status, for JHA’s consideration in the account set-up and provision of the Services to Merchant. Merchant acknowledges that JHA shall be entitled to rely upon the validity, accuracy and completeness of the information provided by Merchant in its application and supporting documentation to JHA, for JHA’s use in performing its due diligence review of Merchant’s status and financial standing for determining (a) if JHA will enter into this Agreement with Merchant; (b) if JHA will provide all or any of the Services to Merchant under this Agreement; and (c) the credit and account processing standards and limits that JHA will apply to the processing of Merchant’s Entries. Subsequent to the initial acceptance and set-up of Merchant for JHA’s provision of the Services, JHA may from time to time request that Merchant provide updated information and supporting documentation to JHA to confirm Merchant’s then-current business and credit status, which Merchant shall apply best efforts to deliver to JHA within three (3) business days following receipt of JHA’s written request. Any failure by Merchant to provide the information and supporting documentation requested by JHA via the application or by other means within a timely manner shall be deemed to be a material breach of this Agreement by Merchant. 2.2 When Merchant’s application has been accepted and approved by JHA, JHA, either directly or through a Reseller who has contracted for the delivery of Services with Customer, shall provide the Services selected by Merchant in its application. Merchant shall utilize and access the Services in accordance with the terms of this Agreement and the practices and procedures established by JHA for the Services which have been communicated in writing to Merchant. As part of the Merchant set-up and boarding process: ! ! (s) JHA will provide Merchant with an administrative and gateway user name and password (“Password”) to access the Services which are hosted on JHA’s processing system. Merchant will designate an Administrator who shall be the sole individual vested with the authority to determine who will be authorized to use the Services; establish separate passwords for each user; and establish limits on each user’s authority to access information and conduct transactions. Merchant is responsible for the actions of its Administrator, the authority the Administrator gives others to act on Merchant’s behalf, and the actions of the persons designated by the Administrator to use the Services. Merchant shall take reasonable security procedures and practices to safeguard the confidentiality of the passwords; limit access to its passwords solely to persons who have a need to know such information; closely and regularly monitor the activities of employees who access the Services; and prohibit its employees and agents from initiating entries in the Services without proper authorization and supervision and adequate security controls. 2.3 JHA will provide to Merchant processing Services for the Entry types indicated in the Merchant set-up and boarding documentation and/or its contract with Reseller (if applicable) which Merchant wishes to utilize. JHA reserves the right to withdraw the processing Services provided generally to its customers including Merchant for individual Entry types from general market availability and coverage under this Agreement upon ninety (90) days prior written notice to Merchant. To the extent reasonably possible, JHA will first attempt to process an Entry in the Services as an ACH Transaction, unless the Entry has clearly been designated to be processed as a Check 21 Transaction, provided that the Entry fully qualifies to be processed as an ACH Transaction according to applicable NACHA Rules and JHA has received all of the required information from the Image or paper check necessary to process the transaction as an ACH Transaction. If the Entry cannot be processed as an ACH Transaction for any reason, then JHA will process the Entry in the Services as a Check 21 Transaction. 2.4 ! ! ! ! ! ! ! ! 2.5 ! ! Merchant acknowledges that JHA has specific processing deadlines imposed by its ODFI and the ACH Operator for ACH Transactions and by the Bank of First Deposit for Check 21 Transactions. Files received by the deadline will be transmitted that day to the Federal Reserve Bank for settlement on the effective entry day. Files received after the deadline will be processed the next Banking Day as defined in the NACHA Rules. 2.6 For Check 21 Transactions, JHA will not be responsible for printing any Substitute Checks which may be required by a financial institution in order to receive and process the Entry. 2.7 In the event of any conflicts in the instructions received by JHA regarding Merchant or any Entries relating to them, JHA may at its option and with or without notice, hold or interplead, comply with the legal process or other order, or otherwise limit access by Merchant or by JHA to the funds, Entries or proceeds thereof. 2.8 JHA or a Reseller may make available to Merchant end-user training and/or Courseware to assist Merchant in understanding and using the Services and the JHA processing system. The Courseware is a proprietary product of JHA and its licensors and is provided to Merchant for its sole internal use. JHA and its licensors reserve all ownership rights in and to the Courseware materials. For training classes performed by JHA or the Reseller at Merchant’s site, Merchant shall pay the applicable onsite training class fee quoted by JHA or the Reseller and the reimbursable outof-pocket travel expenses of the JHA or Reseller trainer who travels to and from Merchant’s location to deliver the training session. For on-line classes and e-Learning modules provided by JHA or the Reseller, Merchant shall pay the training class fee specified in the online class registration site. If JHA or the Reseller offers a Courseware license which permits the Merchant to perform its own internal training classes for the personnel of Merchant and its Customers, Merchant shall pay the annual Courseware license fee quoted by JHA or the Reseller for use of the Courseware modules licensed by Merchant for this purpose. 2.9 Merchant hereby authorizes JHA to debit the Settlement Account on behalf of Franchisor and pursuant to instructions of the Franchisor for any fees, charges or penalties as set forth in Merchant’s Franchise Agreement including, but not limited to monthly royalties, advertising funds, late payment to vendors, and penalties for non-compliance (“Franchisor Fees”). Merchant authorizes JHA to rely on information and instruction provided to JHA by Franchisor without further consent from Merchant. JHA shall be fully protected in acting on any such information and instruction from Franchisor without making inquiry whatsoever as to Franchisor’s right or authority to give such instruction or as to the application of any payments made pursuant to such instruction. 3. RECOUPMENT AND SET-OFF: 3.1 Merchant shall immediately reimburse JHA for any returns or shortfalls that occur in Merchant’s Settlement Account unless those returns or shortfalls are due to (i) a security breach or fraudulent activity involving JHA’s systems or computer networks which was caused by JHA or (ii) a Services processing error on the part of JHA. JHA reserves the right to delay the availability of funds for deposit without prior written notices to Merchant if, in its sole discretion, JHA deems itself at financial or relative risk for any and all Services performed under this Agreement. 3.2 ! ! Prior to submitting an Entry to JHA for processing, Merchant shall secure all authorizations and approvals from its Customer and deliver any notifications pertaining to that Entry which are required by the NACHA Rules and/or applicable laws and regulations. Merchant shall be responsible for the accuracy and propriety of all Entries submitted to JHA for processing. If Merchant utilizes a scanner to create Images which are delivered to JHA for processing, Merchant shall be solely responsible to ensure the accuracy and completeness of the Image transmitted to JHA for processing. ! ! ! ! ! (a) any amounts JHA would otherwise be obligated to deposit into Merchant’s account, and (b) any other amounts JHA may owe Merchant under this Agreement. ! ! ! This Section 3.2 shall not apply in the event of a good faith dispute between the parties as to whether or not amounts are owed by Merchant to JHA. 4. USE OF REMOTE DEPOSIT CAPTURE SERVICES: If Merchant utilizes JHA’s Remote Deposit Capture Services, the following supplemental terms shall apply to those Services: (a) All checks deposited electronically by Merchant through use of the Remote Deposit Capture Services shall be subject to the following requirements: EPS Merchant PSA—Reseller--US (rev 0811) ! c. Merchant shall review and validate the accuracy and completeness of the check data being captured including but not limited to the amount of the check and the legibility of the check Image generated from use of the Remote Deposit Capture Services; Merchant shall be solely liable and responsible for all damages, losses, expenses and claims arising from any of the following: ! Merchant hereby acknowledges and agrees that JHA shall have a right of setoff against: All checks will conform to the requirements of Merchant’s deposit agreement with its financial institution; and (c) ! ! b. Merchant shall be solely responsible for the selection, use and operation of the scanner equipment used to capture the Image using the Remote Deposit Capture Services, including the quality of the Image results generated from the scanner. Any scanner used by Merchant with the Remote Deposit Capture Services must meet the technical specifications for scanners published by JHA in order to be deemed compatible with the Remote Deposit Capture Services. JHA offers scanners which it has certified are compatible for use with the Remote Deposit Capture Services for purchase or lease to customers of its Remote Deposit Capture Services. Any purchase or lease of scanners by Customer from JHA or a Reseller for its use shall be transacted between Merchant and JHA or a Reseller in a separate equipment purchase/lease agreement. ! ! The original paper check will not be deposited through the Remote Deposit Capture Services more than once; (b) ! ! a. (1) Duplication of Images transmitted by Merchant to JHA through the Remote Deposit Capture Services; (2) Alteration of scanned Images not caused by JHA’s Services or Software; (3) Deposit of checks on accounts with insufficient funds, counterfeit checks, fraudulent checks, or checks bearing unauthorized or forged endorsements; (4) Acts of fraud, negligence or willful misconduct committed by employees of Merchant in depositing checks using the Remote Deposit Capture Services; (5) Hardware failure not caused by JHA’s Services or Software; or (6) Merchant’s failure to properly store original checks once the scanned Image has been captured. 5. PRICING AND PAYMENT: 5.1 Merchant shall pay JHA or Reseller the fees for the Services or Courseware shown in Attachment 2 of this Agreement. All amounts are stated and due and payable in U.S. dollars, and are exclusive of any taxes or other charges which may be imposed by a government entity on the Services or Courseware, except for taxes due on JHA’s or the Reseller’s income. For Services or Courseware fees invoiced by JHA directly to Merchant, JHA reserves the right to require Merchant’s payment of these fees due under this Agreement via an ACH debit made by JHA against Merchant’s Settlement Account or other banking account. 5.2 After the initial term of this Agreement has been completed, if Merchant has contracted directly with JHA for JHA’s provision of the Services to Merchant, JHA reserves the right to increase the Services or Courseware fee rates once each twelve (12) month period during the term of this Agreement by no more than ten percent (10%) from the previous Services or Courseware fee rates by giving Merchant at least sixty (60) days prior written notice of such increase. If Merchant has contracted with a Reseller for JHA’s provision of the Services to Merchant, then any price increases in the Services or Courseware fee rates will be determined and applied in accordance with the written agreement between Reseller and Merchant. The foregoing restrictions on JHA’s imposition of a Services or Courseware fee rate increase during and after the initial three (3) year term period of this Agreement will not apply to: (a) third party fees, taxes, surcharges or other amounts imposed on the processing of Services transactions by a government entity or other body which exercises authority over the processing of ACH Transactions or Check 21 Transactions through payment networks; or (b) Services fee increases due to changes in laws, regulations or industry rules (e.g. NACHA Rules) or Data Security Guidelines that affect JHA’s cost structure for processing ACH Transactions or Check 21 Transactions. 17 6. ! ! ! ! ! ! ! ! ! NACHA RULES AND JHA GUIDELINES: Each party shall comply with the then-current NACHA Rules which apply to ACH Transactions processed under this Agreement. In addition, JHA may publish to Merchant and other merchants its own standard operating and implementation guidelines for the Services with respect to specific NACHA Rules which will govern and apply to this Agreement as if set forth herein. 7. CONFIDENTIAL INFORMATION AND SECURITY PROCEDURES: 7.1 The parties acknowledge that each of their respective businesses is highly competitive and that their Confidential Information is valuable, special and unique assets of the parties that they use in their respective business to obtain a competitive advantage over their competitors. The parties further acknowledge that the protection of each other's Confidential Information against unauthorized disclosure and use is of critical importance to each in maintaining their respective competitive position. Accordingly, the parties hereby agree that neither they, nor any of their respective employees or agents, shall make any unauthorized disclosure of any Confidential Information, or make any use thereof, except for the benefit of, and on behalf of, that party for purposes of performing this Agreement. The following information shall not be subject to protection under this Section 7.1: information that (a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving party, generally known or available to the public; (b) was known by the receiving party before receiving such information from the disclosing party; (c) is hereafter rightfully obtained by the receiving party from a third party, without breach of any obligation to the disclosing party; or (d) is independently developed by the receiving party without use of or reference to the Protected Information. Each party may disclose the other party’s Confidential Information if and to the extent that such disclosure is required or requested by applicable law or any regulatory or governmental authority. Additionally, Merchant hereby authorizes JHA to disclose Confidential Information to Franchisor or its affiliates. 7.2 Merchant and JHA shall each comply with the security procedures described in this Agreement and in any JHA Guidelines. Merchant acknowledges that the purpose of these security procedures is for verification of authenticity of an Entry and not to detect an error in the transmission or content of an Entry. No security procedure for the detection of any such error has been agreed upon between JHA and Merchant. Merchant is strictly responsible to establish and maintain the procedures to safeguard against unauthorized transmissions occurring within Merchant’s systems. 7.3 7.4 Merchant understands that the password and Services access and use instructions provided by JHA are confidential and agrees to assume all risks of accidental disclosure or inadvertent or wrongful use by any party whatsoever except for JHA or any JHA employee, agent or sub-contractor. or any third party that, without the fault of Merchant, gains access to passwords and/or Services access and use instructions by accessing JHA’s system, whether such disclosure of use are on account of Merchant’s negligence or are deliberate acts. Merchant acknowledges that no person from JHA will ever ask for any password and that JHA employees do not need and should not ask for Merchant’s password. Merchant shall change its password periodically and whenever anyone who has had access to a password is no longer employed or authorized by Merchant to use the Services. JHA may require Merchant to change its password at any time. JHA may deny access to the Services without prior notice if it is unable to confirm to its satisfaction any person’s authority to access the Services or if JHA believes such action is necessary for security reasons. 7.5 Merchant acknowledges that the Services and Software provided by JHA under this Agreement incorporates trade secrets of JHA and its licensors, and as such is protected by civil and criminal law. Merchant shall notify JHA immediately of the unauthorized possession, use or knowledge of any item supplied under this Agreement by any person or organization not authorized by this Agreement to have such possession, use or knowledge. 7.6 The provisions of this Section 7 shall be effective during the term of this Agreement and shall survive for a period of two years thereafter, provided with respect to Confidential Information that constitutes a trade secret under applicable law, the provisions of this Section 7 shall be effective during the term of this Agreement and shall survive for the longer of (i) two years after the termination of this Agreement, or (ii) for so long as such information continues to qualify as a trade secret under applicable law, excluding failure to so qualify as a result of breach of this Agreement. Notwithstanding anything contained to the contrary herein, the parties further agree that all Customer Financial Data shall be protected in accordance with applicable law and the NACHA Rules. 7.7 The parties acknowledge that the unauthorized use or disclosure of Confidential Information may cause the disclosing party irreparable harm that could not be compensated by monetary damages. Accordingly, the receiving party agrees that disclosing party shall be entitled to seek, from any court of competent jurisdiction, injunctive and preliminary relief to prevent or remedy any actual or threatened unauthorized use or disclosure EPS Merchant PSA—Reseller--US (rev 0811) ! ! ! ! ! ! ! ! ! of the Confidential Information of disclosing party, without being required to show harm. 7.8 Notwithstanding anything contained to the contrary herein, the parties further agree that each party shall protect all Customer Financial Data in accordance with (i) applicable law, (ii) protections that are at least as stringent as the then-current Data Security Guidelines and (iii) the NACHA Rules. Customer Financial Data is the Confidential Information of Merchant; provided, that Merchant consents to the release by JHA of any or all Customer Financial Data to Franchisor on Franchisor’s request. 8 DATA PRIVACY AND SECURITY BY JHA: 8.1 In accordance with data privacy laws and regulations applicable to this Agreement, which may include but not be limited to the GrammLeach- Bliley Act (“GLBA”) and the Health Insurance Portability and Accountability Act ("HIPAA"), JHA shall not disclose or permit access to or use of the non- public personal information of Merchant or its Customers made available by Merchant to JHA for any purposes other than those specifically required to fulfill JHA's contractual obligations with Merchant. JHA shall not sell the information regarding Merchant or its Customers for any reason. In connection with providing services to Merchant, JHA shall comply with Section 7.8 and take all commercially reasonable steps to ensure the privacy and security of the information of Merchant and its Customers in JHA’s possession and protect against anticipated threats and hazards to the security of such information. JHA shall take all commercially reasonable steps to prevent unauthorized access to or use of such information that could result in substantial harm or inconvenience to Merchant or its Customers. In the event any court or regulatory agency seeks to compel disclosure of the information, JHA shall, if legally permissible, promptly notify Merchant of the disclosure requirement and will cooperate so that Merchant may at its expense seek to legally prevent this disclosure of the information. 8.2 JHA has separately published its data privacy and security compliance commitment to its customers, which corresponds at a minimum to the provisions of this Section 8 as of the effective date of this Agreement. To the extent that additional commitments by JHA are reflected in future published versions of this policy, these additional commitments shall be incorporated as part of this Agreement without further actions by the parties. In no event shall a future published data privacy and security compliance statement issued by JHA lessen or eliminate any of the commitments by JHA stated in this Section 8. 8.3 If a breach of security results in an unauthorized intrusion into JHA’s systems which directly and materially affects Merchant or its Customers, JHA will take appropriate measures to stop the intrusion; report on the intrusion to Merchant within a reasonable time after discovery of the intrusion; subsequently report the corrective action taken by JHA in response to the intrusion; and provide reasonable assistance to Merchant to support any mandatory disclosures about the intrusion by Merchant to its Customers required by law. If JHA has notified law enforcement agencies about the intrusion, JHA may delay its notification of the intrusion to Merchant until authorized to do so by the law enforcement agencies. 9 WARRANTIES: 9.1 JHA warrants to Merchant that its Services will be performed in a professional and timely manner consistent with ACH and Check 21 transaction processing industry standards and in accordance with the NACHA Rules and applicable laws and regulations and any written JHA policies and procedures communicated by JHA to Merchant. In the event that Merchant discovers an error in the Services or Software which has been caused by JHA, if Merchant has contracted directly with JHA for the Services, Merchant shall immediately notify JHA of the existence and details of the error; if Merchant has contracted with a Reseller for the Services, then Merchant shall provide this notification to Reseller. JHA shall apply commercially reasonable efforts to correct the error within a reasonable time after JHA’s receipt of notification of the error. EXCEPT FOR THE FOREGOING WARRANTY, JHA MAKES NO OTHER WARRANTIES FOR THE SERVICES PROVIDED BY JHA AND JHA DISCLAIMS ANY AND ALL PROMISES, REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE SERVICES, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. JHA does not guarantee the completeness or accuracy of the information provided from a third-party database. JHA shall have no liability to Merchant for any invalid Customer information provided by Merchant or Entries returned unpaid to Merchant. 9.2 Merchant warrants that: 18 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! (a) all Entries submitted to JHA for processing will comply with applicable laws and regulations and the NACHA Rules pertaining to the Entries; (b) Merchant will comply with all laws, regulations and the NACHA Rules applicable to Merchant’s activities covered by this Agreement; (c) all information provided by Merchant initially in its application and supporting documentation and subsequently in all updates to its application and supporting documentation provided to JHA pursuant to Section 2.1 above is valid, complete, accurate and up-to-date; and (d) 9.3 10 the individual signing and submitting this Agreement, the application for purchase of the Services from JHA, and all future updates to the application and supporting documentation has the legal authority to make and bind Merchant to the agreements, warranties and commitments stated in this Agreement and the submitted application on Merchant’s behalf. With regard to Check 21 Transactions, the party who prints a Substitute Check shall be wholly liable for all Check 21 warranties and applicable indemnifications associated with the printed Substitute Check. JHA shall not be liable for the duplicative presentment warranty or any Substitute Check indemnity as they may arise under Check 21. JHA shall only be responsible for the legal equivalence warranty under this Agreement if JHA is the party who does the initial conversion of Merchant’s Entries to a Substitute Check, and in no event shall JHA be liable for any subsequent degradation to the Substitute Check which may occur due to the handling of the Substitute Check by any third party. ! ! expenses, including reasonable attorney's fees and legal costs, incurred by JHA, the ODFI and/or the Bank of First Deposit arising out of (a) Merchant’s breach of this Agreement, the NACHA Rules or applicable laws and regulations; (b) return of an Entry due to incorrect or incomplete data or information provided by Merchant in the submission of the Entry to JHA, a closed Customer account, or insufficient funds in the Customer account, and/or (c) fraudulent activity, wrongful or unauthorized use of the Services, or submission of fraudulent or illegal Entries by Merchant or a third party who has gained access to the Services through the use of Merchant’s password. 11 LIMITATIONS OF LIABILITY: (a) Incidental and Consequentlal Damages. IN NO EVENT SHALL JHA, THE ODFI OR THE BANK OF FIRST DEPOSIT BE LIABLE TO MERCHANT OR ANY OTHER PARTY FOR ANY LOSS OF PROFITS OR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES, EVEN IF THE POSSIBILITY OF THE OCCURRENCE OF SUCH DAMAGES WAS FORESEEABLE. ! (b) INDEMNIFICATION: 10.1 JHA shall indemnify, defend and hold Merchant harmless from and against all claims, actions, losses and expenses, including reasonable attorney’s fees and legal costs, incurred by any of these indemnified parties arising out of a claim that: (a) the Services or Software owned and provided by JHA under this Agreement infringe the valid intellectual property rights of a third party; (b) JHA has violated any laws, regulations or NACHA Rules applicable to this Agreement or the Services or Software owned and provided by JHA under this Agreement; (c) JHA has wrongfully disclosed the Customer Financial Data of Merchant to third parties through the fault or negligence of JHA or its employees, agents or contractors; (d) JHA has failed to comply with the provisions of Sections 7.8 or 8 above; (e) JHA has failed to maintain equipment and software used in the provision of the Services to Merchant that complies with the Data Security Guidelines applicable to use of such equipment and software; (f) JHA has committed processing errors in its provision of the Services to Merchant and Franchisee Businesses through the fault or negligence of JHA or its employees, agents or contractors; or (g) JHA has failed to comply with its notification obligation to Merchant under Section 8.3 above regarding the occurrence of a security breach incident involving JHA’s systems upon which the Services are provided by JHA to Merchant. ! ! ! ! ! . 10.2 Merchant shall indemnify, defend and hold JHA, the ODFI and the Bank of First Deposit harmless from and against all claims, actions, losses and EPS Merchant PSA—Reseller--US (rev 0811) 12 TERM AND TERMINATION: 12.1 Term: This Agreement shall have an initial term of three (3) years from and after the Effective Date. Upon expiration of the initial term, this Agreement shall automatically renew for additional consecutive twelve (12) month terms unless either party gives written notice of its election not to renew this Agreement to the other party no later than sixty (60) calendar days prior to the end of the then-current term. 12.2 Termination For Cause: (a) ! JHA shall be promptly notified by Merchant of its receipt of notice of such claim, given control of the defense or settlement of such claim, and is given reasonable assistance requested by JHA at JHA’s cost with regard to such claim. 10.2 The parties acknowledge that JHA is providing separate indemnification to Franchisor and its affiliates against certain claims and losses as specified in the separate Merchant Processing Services Agreement executed between Franchisor or its affiliate and JHA. To the extent that the basis for a claim for indemnification presented by Merchant to JHA under its Merchant Processing Services Agreement is the same as any of the bases of claims which are identified in Section 10.1 above, then JHA’s satisfaction of the claim presented by the Franchisor or its affiliate to JHA shall be deemed to be satisfaction of the same claim presented by Merchant to JHA with respect to Franchisor or its affiliate. The foregoing limitation on the amount of recoverable indemnification liability and other actual direct damages shall not apply to (i) such damages arising as a result of the gross negligence or willful misconduct of JHA; or (ii) Merchant’s payment obligations for Services delivered by JHA to Merchant. ! ! ! ! Indemnification Liability and Other Actual Direct Damages. JHA’s aggregate, cumulative liability to the Merchant for all claims of indemnification under Section 10 (Indemnification) above and other actual direct damages relating to the Services, this Agreement, or the relationship between JHA and Merchant, including any cause of action in contract, negligence, tort, strict liability or otherwise, shall not exceed an amount equal to the total amount of all fees paid by the Merchant to JHA or a Reseller (as the case may be) for Services delivered under this Agreement during the twelve (12) month period preceding the origination of the claim giving rise to liability. Termination Due to Material Breach: This Agreement may be terminated by either party for cause upon giving the other party written notice of the breach of this Agreement committed by the other party and giving the other party a reasonable time to cure the breach. For the purpose of this Agreement, a reasonable time to cure the breach specified in the written notice shall be deemed to be: (1) For any breach of Sections 2.1, 2.2, 3.1, 3.2, 5.1, 7 or 9.2 above: Five (5) business days from receipt of written notice. (2) For all other types of breach of this Agreement, except as provided below: Thirty (30) calendar days from receipt of written notice of the breach. Notwithstanding the foregoing, in the event either party materially breaches any provision of this Agreement by fraud, act of intent to defraud, failure to notify the other party of a material change in party’s financial structure or a material change in the information originally provided to induce the other party to enter into the Agreement, the nonbreaching party may immediately terminate this Agreement in writing without giving the breaching party an opportunity to cure the breach with prior written notice. (b) Termination Due to Changed Circumstances: JHA reserves the right to terminate this Agreement in whole or in part at any time due to the occurrence of any of the following changed circumstances: (1) Merchant becomes insolvent, enters into suspension of payments, moratorium, reorganization or bankruptcy, makes a general assignment for the benefit of creditors, admits in writing its inability to pay debts as they mature, suffers or permits the appointment of a receiver for its business or assets, or avails itself of or becomes subject to any other judicial or administrative proceeding that relates to insolvency or protection of creditors' rights, any of which in JHA’s reasonable judgment impairs the ability of Merchant 19 to perform its responsibilities under this Agreement; ! (2) ! (3) In JHA’s sole judgment, there is a deterioration or other materially negative change in Merchant’s financial status or structure which increases the financial risk being assumed by JHA in processing Merchant’s Entries; There is a change in the laws, regulations or NACHA Rules that are applicable to this Agreement and JHA’s provision of any of the Services which restricts or prohibits JHA from providing the affected Services to Merchant or significantly increases JHA’s costs in providing the affected Services to its customers generally; ! ! ! ! ! ! ! ! ! ! ! Merchant’s business and/or assets are acquired by a competitor of JHA; or (5) Merchant’s Franchise Agreement with PLA-Fit Franchise LLC terminates for any reason, ! ! In these instances, JHA will provide written notice of the termination on this basis to Merchant, which shall become effective upon receipt by Merchant. 12.3 Notification to Franchisor. JHA shall promptly notify Franchisor in writing in the event that JHA determines that Merchant is in breach of this Agreement or in the event that JHA has elected to terminate this Agreement pursuant to Sections 12.2 (b)(1) through (4). 12.4 Post-Termination Wind-down: (a) ! ! (4) ! (b) 12.5 13 Upon termination or expiration of this Agreement, the parties shall reasonably cooperate to wind-down the activities contemplated by this Agreement. Within thirty (30) days following the end of the period referred to in Section 12.4(b) below, each party shall return all copies of the other party’s Confidential Information and purge from its computer systems, storage media and other files all copies of the Confidential Information in its possession. As an exception to the foregoing, JHA shall be entitled to retain and use the Customer information provided by Merchant only as reasonably necessary to continue to provide the Services to Merchant and Franchisee Businesses following the termination or expiration of this Agreement. In the event of termination or expiration of this Agreement other than pursuant to Section 12.2(b)(5), JHA guarantees that it will continue to provide the Services to Merchant, on the terms and conditions of this Agreement for up to six (6) months beyond the effective termination or expiration date of this Agreement to facilitate Merchant’s transition of its Customers to a different enterprise payments processing services provider. Merchant shall notify JHA in writing within ten (10) business days following the effective termination or expiration date of this Agreement whether it wishes JHA to continue to provide the Processing Services as stated above. In this instance, the terms of this Agreement shall continue to apply to these Services delivered by JHA to Merchant’s affected Customers. The foregoing obligation by JHA is expressly contingent upon JHA receiving a legally binding assurance reasonably acceptable to JHA of receiving full and timely payment of all Services fees due for the delivery of the Services during this post-termination period. Survival of Obligations: The provisions of Sections 7, 8, 9, 10, 11, 12 and 13 of this Agreement and any other provisions of the other Sections of this Agreement which by their nature should reasonably be expected to continue to apply after termination of this Agreement shall survive the termination of this Agreement. ! ! ! ! ! termination of this Agreement sent to JHA shall be directed to the same address, attention Legal Department. Notice to Franchisor shall be directed to: PLA-Fit Franchise, LLC 26 Fox Run Road, Newington, NH 03801, Attention: General Counsel. 13.3 Assignment: This Agreement shall not be assigned or delegated in whole or in part by Merchant to any other party without the prior written consent of JHA, which shall not be unreasonably withheld. 13.4 Legal Fees: In the event of any dispute arising out of or related to the terms of this Agreement, the prevailing party shall be entitled to recover its reasonable attorney's fees, court costs and collection expenses in addition to any other recovery. 13.5 Force Majeure: If performance by a party, the ODFI, the Bank of First Deposit, or any of their respective affiliates, of any Services or obligation under this Agreement is prevented, restricted, delayed or interfered with by reason of acts or events beyond their reasonable control (each, a “Force Majeure Event”), including acts of God, war, acts of terrorism, riot, embargoes, acts of civil or military authorities, fire, floods, hurricanes, earthquakes, or lightning, disputes and strikes (excluding, for JHA, strikes or labor actions by JHA employees), then provided that: (i) such failure to perform could not have been prevented by reasonable precautions by the non-performing party (including with respect to JHA by JHA meeting its obligations for performing disaster recovery and redundancy services as described in this Agreement), and (ii) the non-performing party gives prompt written notice of the Force Majeure Event and its inability to perform to the other party, the time for the non-performing party’s performance shall be extended for a period equal to the duration of the Force Majeure Event. For avoidance of doubt, no Force Majeure Event shall excuse, limit or otherwise affect JHA’s obligation to perform disaster recovery and redundancy services. The parties agree that the following shall not be Force Majeure Events: failure in performance of an affiliate, vendor, agent or sub-contractor of a party asserting the Force Majeure Event unless such failure is due to causes beyond the reasonable control of such affiliate, vendor, contractor or agent and could not have been avoided by commercially reasonable measures. 13.6 Amendment: This Agreement may be amended only by a written document signed by authorized representatives of both parties. 13.7 Entire Agreement: This Agreement contains the entire agreement between Merchant and JHA relating to the subject matter addressed herein, and supersedes any prior or contemporaneous understandings or agreements, whether oral or written, between the parties regarding the subject matter of this Agreement. 13.8 Form and Delivery of Signed Agreement: This Agreement may be executed by the parties by applying manual or electronic signatures of its authorized representatives to original documents or facsimile, scanned or other electronic copies of original documents and transmitted by physical or electronic means for this purpose. For legal evidentiary purposes, a facsimile, scanned or other electronic copy of this Agreement bearing the signatures of the authorized representatives of both parties shall be accepted as an equivalent to a signed original copy of this Agreement. 13.9 Independent Contractors: The parties are and shall remain independent contractors and shall have no legal right or authority to make any binding commitments on behalf of the other party. < End of Standard Terms and Conditions > GENERAL PROVISIONS: 13.1 Governing Law: This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles. 13.2 Notice: Any notice required or permitted hereunder shall be in writing and shall be sent by certified mail, return receipt requested, or by overnight express mail, with proof of delivery retained, and addressed to the respective parties at the address set forth below. Notice of breach or EPS Merchant PSA—Reseller--US (rev 0811) 20 ATTACHMENT 1 TO EPS MERCHANT PROCESSING SERVICES AGREEMENT TEMPLATE LIST OF MERCHANT AFFILIATES! ! ! EPS Merchant PSA—Reseller--US (rev 0811) 21 ATTACHMENT 2 TO EPS MERCHANT PROCESSING SERVICES AGREEMENT TEMPLATE FEE SCHEDULE ! ! ! 1. Standard Fee Pricing for Processing Services Applicable to Merchant: For the Processing Services processed by JHA for Merchant under this Agreement, the Merchant shall pay the following fees, which are subject to adjustment as provided in Section 3 below: Transaction Type ACH Origination: All SEC Codes ACH Return: All SEC Codes Fee per Transaction These fees exclude any separate bank fee charges (other than ODFI fees) which may be payable by JHA on these processing transactions. These fees will apply for as long as a Merchant maintains its relationship in good standing with Franchisor. If the relationship between Merchant and Franchisor is suspended or terminated, JHA reserves the right to re-price the Services fees payable by the Merchant thereafter in any amount deemed appropriate by JHA. 2. Distribution of Processing Services Collections; Billing and Payment of Fees: JHA will collect the fees referenced in paragraph (1) above and will pay the settlement proceeds from ACH transactions processed by JHA in accordance with an agreement between JHA and Franchisor. 3. Changes in Fee Prices: (a) During the initial three (3) year term period of this Agreement, the fee pricing shown in Section 1 above shall remain fixed except as provided in clause (b) below. Following this initial term period, JHA may increase the then-current standard fee prices in accordance with Section 5.2 of the terms and conditions of this Agreement and 3(b) below. (b) JHA shall have the right to increase the standard fee prices shown in Section 1 or Section 2 at any time, in the event that a change in laws, regulations or NACHA Rules applicable to the activities described in this Agreement or the transactions processed under this Agreement (i) increases JHA’s costs or decreases JHA’s profit margin with regard to performing its responsibilities or complying with these changes under this Agreement, or (ii) increases JHA’s liability for performing its responsibilities under this Agreement. The increase shall become effective thirty (30) days following JHA’s delivery of the written notice of the fee price change to Merchant. The notice shall identify to Merchant the specific change in the applicable laws, regulations or NACHA Rules which has caused JHA to increase the fee prices on this basis. 4. Relationship of this Attachment to the Agreement: In the event of any conflict between the provisions of this Attachment and the Standard Terms and Conditions of this Agreement, the provisions of this Attachment shall govern and control. ! EPS Merchant PSA—Reseller--US (rev 0811) 22 FRANCHISEE FORM - Customer: , LLC CUSTOMER PROCESSING AGREEMENT This   Customer   Processing   Agreement   (the   “Agreement”)   is   made   by   and   among   RBS   Citizens,   N.A.,   a   federally   chartered   financial   institution, having its principal  office  at  1  Citizens  Plaza,  Providence,  Rhode  Island  02903  (the  “Bank”)  and  WorldPay US, Inc., a Georgia corporation,   with   offices   at   600   Morgan   Falls   Road,   Atlanta,   Georgia   30350   (“WorldPay”)   and ,est, a _________________________, with offices at ____________. Each  of  Customer,  WorldPay  and  Bank  is  a  “party”  and  they  are,  collectively,  the  “parties”. RECITALS WHEREAS, Customer sells goods and services to consumers or businesses and desires to accept certain credit and debit cards as a form of payment for such goods and services; and WHEREAS, Customer desires for WorldPay to provide Customer with processing, and the Bank to provide Customer with settlement of certain debit and credit card transactions. NOW, THEREFORE, in consideration of the above Recitals and the promises and payments as set forth herein, and subject to the Terms and Conditions below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Bank, WorldPay and Customer agree as follows: TERMS AND CONDITIONS SECTION 1. DEFINITIONS. The following terms shall have the meanings set forth below when used in this Agreement: “ACH”  means  the  electronic  network  for  financial  transactions  in  the  United  States  known  as  the  Automated  Clearing  House. “Affiliate” means Pla-Fit   Health,   LLC’s   parent company, a subsidiary company of Pla-Fit Health, LLC in which Pla-Fit Health, LLC holds controlling ownership interest; or a subsidiary of Pla-Fit   Health,   LLC’s   parent company in which the parent company holds controlling ownership interest. “Authorized Card Transaction”  shall  mean  a  sales  transaction  involving  a  Transaction  Card,  provided the transaction has been authorized by the Transaction Card issuer as contemplated by this Agreement. “Chargeback”  shall  have  the  meaning  set  forth  in  Section  6.2  below. “Corporate Processing Agreement”  shall  mean  that  certain  Customer  Processing  Agreement previously entered into by Pla-Fit Health, LLC (“Pla-Fit Health”),  Bank  and  WorldPay,  as  the  same  may  be  amended  by  the  parties  from  time-to-time. “Deposit/Chargeback Account”  shall  mean  a  U.S.  banking  account  established  and  owned  by  Customer  to be utilized by the Bank in settling transactions involving Transaction Cards as contemplated by this Agreement. The Deposit/Chargeback Account shall be maintained by Customer in accordance with Section 4.4. “Franchise Agreement”  shall  mean  a  franchise  agreement between Customer and Franchisor. “Franchisee” shall mean entities that enter into a Franchisee Agreement with Franchisor pursuant to which such entity is licensed and franchised to independently own and operate health and fitness centers under the name Planet Fitness in the United States. “Franchisor”  shall  mean  Pla-Fit Franchise, LLC, a New Hampshire limited liability company. “MasterCard”  shall  mean  MasterCard  International,  Inc. “Non Visa/MasterCard Card”  means  Transaction  Cards  issued  by  credit or debit card networks other than Visa or MasterCard. “Payment  Network”  or  “Payment  Networks” shall mean Visa, MasterCard, and any credit or debit card network issuing Transaction Cards. “Processing Charges”   shall mean the authorization, processing, settlement, and other fees or amounts charged by WorldPay and the Bank or passed through (from the Payment Networks or other third parties) to Customer by WorldPay and the Bank as set forth in this Agreement or any amendment, addenda or schedule hereto.“Rules”  shall  mean  the  operating  rules  and  regulations  of    Visa,  MasterCard,  and  any  other   applicable Payment Network, as in effect from time to time. “Reserve Fund”  shall  mean  a  non-segregated and non-interest bearing account established by the Bank or WorldPay in its own name to ensure payment of Chargebacks, fines and penalties assessed by the Payment Networks, Processing Charges, and other amounts due from Customer to WorldPay or the Bank under this Agreement. “Transaction Card”   or   “Transaction Cards” shall mean a Visa or MasterCard credit or debit card, travel and entertainment card, or other credit or debit card shown as a qualified card on lists furnished to Customer by the Bank or WorldPay from time to time. “Visa”  shall  mean  Visa  USA,  Inc.  or  VISA International, Inc. 31623v3 LL “Visa/MasterCard”  shall  mean  Visa  and  MasterCard  collectively. SECTION 2. RULES AND REGULATIONS, LAWS. Customer agrees to abide by the Rules of the Payment Networks and to comply with all federal, state, local or other laws, rules and regulations applicable to Customer. Customer shall not require cardholders to provide personal information such as home or business telephone   number,   home   or   business   address,   or   any   form   of   identification   (such   as   a   driver’s   license)   as a condition for accepting a Transaction Card, unless required by the Rules. In the event Customer fails to comply with this Section 2, Customer will be liable for all fees and fines imposed by the Payment Networks as a consequence of such failure, and Customer will indemnify and hold harmless the Bank and WorldPay from and against any and all damages suffered by the Bank and WorldPay as a result of such failure. SECTION 3. SERVICES. 3.1 Services Provided by WorldPay. WorldPay agrees to provide authorization, electronic draft capture, submission of transactions to Payment Networks, and additional related services for Transaction Card sales originated by Customer as set forth in this Agreement. 3.2 Services Provided by the Bank. The Bank shall settle all Visa/MasterCard (and certain other credit and debit cards) transactions processed by WorldPay hereunder for Customer in accordance with this Agreement and the Rules. 3.3 Service Level Agreement. WorldPay will provide the Services in accordance with the service level standards set forth in Schedule B to this Agreement and the terms and conditions of this Agreement. WorldPay will also provide disaster recovery and business continuity protection, in accordance with commercially reasonable industry standards for business continuity programs. Upon request by Customer, but no more frequently than once in any consecutive 12 month period, WorldPay will provide a summary of its current corporate business continuity programs, the contents of which shall be deemed to be WorldPay’s Confidential Information. SECTION 4. PROCESSING AND PAYMENTS. 4.1 Submission of Transactions. Customer will transmit information to WorldPay, which information represents Customer sales to be authorized and settled (paid) by Transaction Cards. Customer shall transmit transactions to WorldPay at the time of each sale or as soon thereafter as practicable. It is understood that the time of receipt by WorldPay will affect the timing of settlement and payment to Customer. If Customer fails to submit transactions on a timely basis as provided herein and as provided in the Rules, transactions may be subject to increased interchange fees, and Customer agrees to pay such fees. 4.2 Payment of Visa/MasterCard. Customer hereby designates the Bank and WorldPay as its agents to receive all payments pertaining to Customer's Visa/MasterCard transactions. All payments required to be made to Customer under this Agreement for Visa/MasterCard transactions will be made by the Bank to the Deposit/Chargeback Account, via electronic funds transfer by ACH (or other electronic  means)  or  by  wire  transfer  as  soon  as  practicable  after  the  Bank’s  receipt  of  such  funds  from  the  Transaction  Card issuer. 4.3 Payment of Non Visa/MasterCard Cards. Customer hereby designates the Bank and WorldPay as its agents to receive all payments pertaining to Customer's Non Visa/MasterCard Card transactions, except when WorldPay’s  role  is  to  provide  authorization  only   services. All payments required to be made to Customer under this Agreement for Non Visa/MasterCard Cards will be made by WorldPay to the Deposit/Chargeback Account, via electronic funds transfer by ACH (or other electronic means) or by wire transfer as soon as practicable after the Bank and WorldPay’s  receipt  of  such  funds  from  the  relevant Transaction Card issuer. 4.4 Customer Deposit/Chargeback Account. Customer hereby certifies that the Deposit/Chargeback Account number provided by Customer to WorldPay is correct and warrants that this account number may be relied upon for debit and/or credit transactions as they occur in relation to this Agreement and are presented to the bank at which the Deposit/Chargeback Account is maintained. Customer agrees  that  it  shall  not  close  or  restrict  the  Bank’s  or  WorldPay’s  access  to  the  Deposit/Chargeback Account. 4.5 Customer Transactions. Customer may not present for processing, directly or indirectly, any transaction which was not originated as a result of an act between the cardholder and Customer or which is not an Authorized Card Transaction. If authorization for a transaction is denied, Customer shall not complete the transaction. Customer may contact the authorization center by magnetic stripe reading terminal, telephone or any other means acceptable to the Bank and WorldPay. For all transactions, Customer shall provide the cardholder  with  a  transaction  receipt,  which  shall  evidence  purchases  made  by  a  cardholder  or  credits  to  a  cardholder’s  account, as the case may be, in accordance with the Rules. Calculation, collection and remittance of sales tax are the sole responsibility of the Customer. 4.6 Telephone, Internet and Mail Orders. If Customer is authorized by WorldPay and the Bank to accept telephone, Internet or mail orders, Customer shall comply with all requirements of this Section 4.6. Authorization for each such transaction, regardless of the face amount, must be obtained. Customer shall obtain the expiration date of the Transaction Card as part of the authorization inquiry and utilize address verification where possible. Customer assumes all responsibility for identification of the cardholder and the validity of the Transaction Card information. For transactions where merchandise is to be shipped or delivered to the cardholder, the shipping date shall not be more than seven calendar days after the authorization is obtained, and any shipping costs not included in the authorization amount must not exceed 15% of the amount authorized. An installment payment option may be offered if all items are clearly disclosed, each installment is authorized, the first installment is not submitted for settlement until the merchandise is shipped, and subsequent installments are submitted no more frequently than monthly. Under no circumstances may Customer require that a cardholder complete a postcard or other  document,  which  displays  the  cardholder’s  account  data  in  plain  view  when  mailed.     4.7 Payment Card Industry Data Security. Customer acknowledges that it is bound to abide by all standards, guidelines, practices or procedures recommended or required by the applicable Payment Networks with respect to data security or protection of cardholder data, as  such  may  be  amended  from  time  to  time  (collectively  “Data Security Guidelines”),  including,  without  limitation,  Payment  Card  Industry   31623v3 Data Security   Standards   (“PCI”),   PIN   Entry   Device   Standards   (“PED”),   and   Payment   Application- Data   Security   Standards   (“PA-DSS”).   Currently, the PCI guidelines require Customer (a) to observe, among other things, standards of due care with regard to the protection of sensitive cardholder information; and (b) to insure that the point of sale equipment and applicable software used by Customer comply with PCI guidelines. Currently, the PCI guidelines are based on a list of twelve basic security requirements with which all payment system constituents need to comply. The requirements are: (1) Install and maintain a firewall configuration to protect cardholder data; (2) Do not use vendor-supplied defaults for system passwords and other security parameters; (3) Protect stored cardholder data; (4) Encrypt transmission of cardholder data across open, public networks; (5) Use and regularly update anti-virus software; (6) Develop and maintain secure systems and applications; (7) Restrict access to cardholder data by business need-to-know; (8) Assign a unique ID to each person with computer access; (9) Restrict physical access to cardholder data; (10) Track and monitor all access to network resources and cardholder data; (11) Regularly test security systems and processes; and (12) Maintain a policy that addresses information security. Customer must also notify WorldPay of all third parties who have access to cardholder data on behalf of Customer (i.e., store, process or otherwise transmit cardholder data). If Customer knows or suspects a security breach, Customer shall notify WorldPay immediately. Customer shall then go through its security program to identify and remediate the source of the suspected compromise. If a Payment Network requires Customer to submit to an audit in connection with a breach or suspected compromise of cardholder data or any other breach of Data Security Guidelines. Customer shall cooperate with such audit and shall be responsible for the cost of the audit. Customer acknowledges that if a Payment Network determines that Customer was responsible for a disclosure of cardholder transaction information or other breach of Data Security Guidelines, WorldPay, the Bank, and Customer may be subject to fines and penalties imposed by the Payment Network. Further, if Customer is responsible for a disclosure of cardholder transaction information or other breach of Data Security Guidelines, WorldPay, the Bank, and Customer may be subject to potential third party claims. Customer’s  obligations  under  this   Section 4.7 shall survive termination of this Agreement. If  a  breach  of  security  results  in  an  unauthorized  intrusion  into  WorldPay’s  systems,   which directly and materially affects Customer, WorldPay shall, where practical and allowable by law, use commercially reasonable efforts to promptly notify Customer of such breach. 4.8 Customer Web Site Requirements. If Customer is authorized by WorldPay and the Bank to accept Internet orders over an Internet Web site, Customer is required to comply with all Rules regarding electronic  commerce  conducted  through  web  sites.    Specifically,  Customer’s   web  site  must  include  the  address  of  Customer’s  permanent  establishment  along  with  its  country  of  domicile  either:  (i)  on  the same screen view as the check out screen used to present the total purchase amount; or (ii) within the sequence of web pages that the cardholder accesses during the check out process. The Customer acknowledges and agrees that the Customer is required by the Payment Networks and this Agreement to have certain information,  including  the  Customer’s  name,  address,  customer  service  telephone  number,  e-mail address, URL, what goods and services are being offered for sale, the price, the action that must be taken to make a purchase, the point at which a sale is completed,   Customer’s   shipping,   returned   merchandise   and   refund   policies,   transaction   currency,   export   or   legal   descriptions,   and   delivery policy displayed on its web site or other point of sale. The Customer must also post its consumer data privacy policy, if required by law, and its method(s)  of  transaction  security  on  the  Customer’s  web  site. 4.9 Retention of Documents. The Bank and WorldPay may examine and verify at reasonable times all records of Customer pertaining to card transactions processed by WorldPay hereunder, and Customer agrees to preserve such records, including transaction receipts, credit vouchers, and all other written evidence of such transactions, where   applicable   and   if   collected   in   the   ordinary   course   of   Customer’s   business, for a period of at least three years from the date of the processing of the transaction. Customer shall bear all risk of loss with respect to transaction documents that Customer fails to preserve for up to three years. 4.10 Changes in Rules. If there is a change in the  Rules  (excluding  a  change  in  the  Bank’s  or  WorldPay’s  Rules)  or  the  regulations  of  a   pertinent governmental agency, which change would make a provision of this Agreement in conflict with such Rule or regulation, the Bank or WorldPay may unilaterally amend this Agreement, upon written notice to Customer and the other party, to conform and/or be compatible with such changed Rules or regulations. 4.11 Authorization to Draft Bank Account. Customer hereby authorizes Bank and World Pay to debit the Deposit/Chargeback Account on behalf of Franchisor and pursuant to instructions of the Franchisor for any fees, charges or penalties as set forth  in  Customer’s   Franchise Agreement including, but not limited to monthly royalties, advertising funds, late payment to vendors, and penalties for noncompliance. Customer authorizes Bank and World Pay to rely on information and instruction provided to Bank and WorldPay by Franchisor without further consent from Customer. Bank and WorldPay shall be fully protected in acting on any such information and instruction from Franchisor   without  making   inquiry   whatsoever   as   to   Franchisor’s   right   or  authority   to  give   such   instruction   or   as   to   the  application of any payments made pursuant to such instruction. Notwithstanding anything in this paragraph to the contrary, all remittances from WorldPay or Bank to Customer are first subject to the rights of WorldPay or Bank under this Agreement. SECTION 5. PRICING. 5.1 Pricing. As consideration for the services set forth in Section 3 hereof, Customer shall pay the Bank, or WorldPay on behalf of the Bank, Processing Charges in the manner and pursuant to Schedule A attached hereto. The Processing Charges set forth on Schedule A are the only charges to which WorldPay and Bank are entitled for the services set forth in Section 3 hereof, provided Customer acknowledges that the Payment Network Fees are subject to change by the Payment Networks and any such change will be passed through to Customer without mark-up. 31623v3 5.2 Deduction of Processing Charges. Processing Charges shall be deducted from amounts due to Customer under this Agreement or such amounts shall be deducted from Customer's Deposit/Chargeback Account. Customer hereby authorizes the Bank or WorldPay to debit Customer's Deposit/Chargeback Account by ACH (or other electronic means) or by wire transfer for amounts due hereunder. 5.3 Estimated Averages. The Processing Charges for services contemplated in this Agreement are based upon assumptions associated with the aggregate anticipated volume and average transaction size of Customer, Affiliates and Franchisees (as shown on Schedule A), Franchisee’s   status   as   a   Franchisee,   as   well   as   Customer’s   method   of   doing   business.   If   the   average   transaction   size   is   materially different from the anticipated amount set forth on Schedule A, or if Customer significantly alters its method of doing business (i.e., the nature and type of business conducted by Customer), WorldPay or  the  Bank  may  adjust  Customer’s  Processing  Charges  without  prior   notice. Any such adjustments shall be in addition to, and not in lieu of, any other remedies available to WorldPay or the Bank hereunder. In the event WorldPay or  Bank  elect  to  adjust  Customer’s  Processing  Charges  as  permitted  by  this  Section  5.3,  Customer  shall  have the right to terminate this Agreement upon 30 days prior written notice, provided (i) such notice is given within 60 days following the adjustment of the Processing Charges, and (ii) Customer is not then in breach of this Agreement and has fulfilled any reserve requirements required pursuant to this Agreement. 5.4 Additional Expenses. To the extent Customer requests that WorldPay provide services to Customer in connection with Chargebacks, Payment Network requests or communications, data security or PCI issues (other than data security or PCI issues arising as a  result  of  a  security  breach  related  to  WorldPay  or  Bank’s  computer  networks  or  failure  by  WorldPay  or  Bank  to  comply  with  Data Security Guidelines), or similar services, such services shall be provided at WorldPay’s  then  current  standard  hourly  rate. 5.5 Equipment. Customer shall be responsible for obtaining all point of sale or similar equipment required in order to transmit transactions to WorldPay, including related communication or utility costs. SECTION 6. CHARGEBACKS. 6.1 Retrieval Requests. Either the Bank or WorldPay may, from time to time, request an original or copy of a transaction receipt or credit  voucher  (a  “Retrieval Request”).    Customer will be responsible for responding to Retrieval Requests in accordance with the Rules and shall provide WorldPay and the Bank with originals or copies of such transaction receipts or credit vouchers within ten business days of the Retrieval Request. 6.2 Chargebacks. Customer agrees to pay the Bank (as set forth in Section 6.5 below) the face amount of any card transaction processed by WorldPay pursuant to this Agreement whenever any card transaction is reversed in accordance with the Rules or any applicable consumer protection statute other than (i)  as  a  result  of  a  security  breach  involving  WorldPay’s  computer  networks  or  (ii)  as  a   result of a processing error of WorldPay or Bank (a  “Chargeback”),  including  by  way  of  example,  but  not  limited  to,  the  following: (a) Goods are returned, whether or not a credit voucher is delivered to the Bank; (b) The sale transaction was not specifically authorized as set forth in Section 4 above; (c) Any card transaction is alleged by the cardholder to have been executed improperly or without authority; (d) The documentation prepared by Customer evidencing the draft is illegible or incomplete; (e) The cardholder disputes the sale, quality or delivery of goods or the performance or quality of services covered by the draft; (f) Cardholder asserts against the Bank any claim, dispute, defense, offset, or counterclaim which cardholder may have as a buyer against Customer, in which case the Bank or WorldPay shall not have any obligation to inquire into or determine the validity of any such claim, dispute, defense, offset, or counterclaim; (g) The extension of credit for goods sold or services performed was in violation of law, rules or regulations of any government agency, federal, state, local, or otherwise, or in violation of this Agreement; (h) The draft lacks a Transaction Card imprint (if required) and cardholder's signature; (i) Cardholder claims the dollar amount was altered after the draft was completed; (j) Two or more drafts were prepared by Customer for the same card transaction (except as otherwise permitted in Section 7.3); (k) The Transaction Card had expired before the transaction date or the sales transaction arises from the use of a counterfeit or otherwise ineffective Transaction Card; (l) The embossed name on the Transaction Card differs from or is dissimilar to the name signed on the signature panel of the Transaction Card of the draft; or the signature on the signature panel of the Transaction Card differs from or is dissimilar to the signature on the draft; (m) The information contained in the draft was received by WorldPay more than 30 business days after the transaction date showing thereon; (n) The draft is a duplicate of one previously processed or includes a charge previously paid by the cardholder; (o) The draft is fraudulent or the sales transaction was not a bona fide transaction in Customer's ordinary course of business; (p) The Transaction Card issuer has information that fraud occurred at the time of the transaction, whether or not such transaction was properly authorized by the Transaction Card issuer, and the cardholder neither participated in nor authorized the transaction; (q) In any other situation where a draft was executed or depository credit given in circumstances constituting a breach of any duty, term, condition, representation, or warranty by Customer hereunder, or where any action or lack of action by Customer in violation of the Rules has resulted in the draft being charged back to the Bank by an issuing member of Visa/MasterCard pursuant to the Rules or the draft is charged back to the Bank for any other reason; and (r) Merchant is listed on the Questionable Merchant Report of MasterCard. Additions and deletions to this list may occur as the Rules change. 6.3 Reserve Fund. WorldPay and the Bank generally institute a Reserve Fund based on the potential risk of loss associated with the Customer’s  account,  which  risk  level  may  change  if,  for  example,  there  is  a  change  in  the  Customer’s  method  of  doing  business, it has an adverse change in its financial condition, it has an adverse change in its Chargeback experience, it experiences a data compromise event or other security breach, it becomes a target for illegal or fraudulent use, or similar events. If required by the Bank or WorldPay at the time this Agreement is executed, Customer shall establish with the Bank a Reserve Fund. Further, at any time during the term of this 31623v3 Agreement, the Bank and WorldPay may determine in their commercially reasonable discretion that it is necessary to create or additionally fund a Reserve Fund. In which case, the Bank or WorldPay shall have the right, after five days written notice to Customer, to establish, replenish  or  increase  a  Reserve  Fund  by  debiting  Customer’s  daily  collected  transactions.  If  such  collections  are  inadequate   in  the  Bank’s   and WorldPay’s  commercially  reasonable  discretion  to  adequately  establish,  replenish  or  increase  the  Reserve  Fund  in  a  timely  manner,   the Bank or WorldPay may   deduct   (by   ACH   debit   or   other   electronic   means)   from   Customer’s   Deposit/Chargeback   Account   additional   sums as necessary, in their commercially reasonable discretion, to establish an adequate Reserve Fund. Upon termination of this Agreement, the funds held in the Reserve Fund shall be used to fund the account described in Section 10.4, up to the estimated aggregate dollar  amount  of  Customer’s  Chargebacks  and  other  obligations  and  liabilities  that  the  Bank  and   WorldPay anticipate in their reasonable discretion may become due under this Agreement subsequent to termination as set forth in Section 10.4, and any excess shall be refunded to Customer. Customer acknowledges and agrees that the Bank and WorldPay shall have a perfected first priority security interest in the Reserve Fund. 6.4 Temporary Holdback. In addition to any of the other rights granted to the Bank and WorldPay in this Section 6, in the event that the Bank and WorldPay, at any time during the term of this Agreement, determine in their commercially reasonable discretion that it may be prudent or necessary to do so as a result of any unusual or suspicious  activity  involving  Customer’s  account,  a  cardholder’s  account,  or   otherwise, including, without limitation, money laundering, invalid sales transactions, counterfeit transactions, altered or duplicate transactions, activity related to a suspected compromise of cardholder data or other breach of Data Security Guidelines by Customer, or Customer is identified by a Payment Network as experiencing excessive Chargebacks, the Bank, or WorldPay on behalf of the Bank, may hold funds otherwise due Customer in   the   Bank’s   name   and   in   a   non-segregated and non-interest bearing account for a commercially reasonable period, not to exceed 10 days, as the Bank or WorldPay, in its commercially reasonable discretion deems necessary, to reimburse the Bank and WorldPay for Chargebacks and credits issued by Customer in respect of such activity, plus other costs or liabilities reasonably anticipated to be due from Customer to WorldPay or the Bank under the terms of this Agreement as a result of such activity. WorldPay and the Bank shall communicate the findings of the related investigation to Customer, as well as their determination regarding the disposition of such funds, as soon as possible. To the extent (i) the investigation conducted by WorldPay and the Bank with respect to the unusual or suspicious activity determines that such activity is reasonably likely to result in amounts being due from Customer to WorldPay or the Bank, and (ii) WorldPay or the Bank requires the establishment of a Reserve Fund in connection therewith, then the funds held pursuant to this Section 6.4 may be used to fund such Reserve Fund. 6.5 Chargeback Reimbursements. Customer agrees to reimburse the Bank for the amount of the transaction in the event of a Chargeback and pay a handling fee for each Chargeback in the amount set forth on Schedule A, as updated or amended from time to time. Customer hereby authorizes the Bank or WorldPay to  debit  without  notice  Chargebacks  and  Chargeback  handling  fees  from  Customer’s   daily collected transactions and if  such  collections  are  inadequate  to  reimburse  the  Bank,  at  the  Bank’s  election,  deduct  such  amounts  by   ACH   debit   or  other  means   from   Customer’s   Deposit/Chargeback   Account   or   Reserve   Fund.     Customer  acknowledges   that   the   Payment Networks impose fines in the event Customer experiences excessive Chargebacks as described in the Rules. Customer agrees to reimburse and indemnify WorldPay and the Bank for any fines imposed by the Payment Networks as   a   result   of   Customer’s   excessive   Chargebacks. 6.6 Maximum Period. Customer will be subject to Chargebacks on Transaction Card sales for the period specified by the Rules. 6.7 Notices of Chargebacks. The Bank and WorldPay agree to deliver all Chargeback documentation to Customer promptly as directed by Customer as to media and location. Customer is responsible for verifying its deposits and statements for Chargebacks and Chargeback handling fees. Customer understands that it must respond to all Chargebacks within ten calendar days after notice of the Chargeback. Customer understands that the failure to respond within each ten day period shall constitute a waiver by Customer of its ability to question or reverse a Chargeback and Customer shall be solely responsible if it fails to timely provide information with respect to a Chargeback. 6.8 Successor Responsibility. Customer and any successor of Customer shall remain jointly and severally obligated to pay for all Chargebacks resulting from Transaction Card sales originated under this Agreement until the Bank has been paid in full. This obligation shall survive the termination of this Agreement, regardless of whether termination was voluntary or involuntary as to Customer. SECTION 7. ADDITIONAL CUSTOMER RESPONSIBILITIES. 7.1 Honoring Cards. Customer shall honor any valid Transaction Card that Customer has elected to accept hereunder, which is properly presented for use. Customer shall not discriminate against cardholders seeking to make purchases with a Transaction Card. Customer shall not require a minimum transaction amount below which Customer will refuse to honor an otherwise valid Transaction Card. Customer shall adequately display promotional materials to inform the public that Transaction Cards will be honored by Customer as required by the Rules. 7.2 (a) (b) (c) (d) (e) (f) (g) (h) 31623v3 Sales Transactions. Except for transactions originated by telephone, mail order or through the Internet, Customer agrees to: include on a single sales draft all goods and services purchased in the same transaction and enter a description of the goods or services sold and the price thereof (including any applicable taxes) in detail sufficient to identify the transaction; enter on the sales draft the date of the transaction; obtain the signature of the cardholder on the sales draft, if required by processing category; compare the signature on the sales draft with the signature on the Transaction Card presented to ascertain that they appear to be the same; check the effective date, if any, and expiration date on the Transaction Card; examine any security features on the Transaction Card; imprint on the sales draft the embossed data from the Transaction Card and from the Customer plate on the imprinter, if required by processing category; deliver to the cardholder at the time of delivery of goods or performance of service a true and complete copy of the sales draft or credit voucher; and (i) ensure that each cardholder receipt contains the following information: (i) the transaction payment type, e.g. Visa, MasterCard, etc.; (ii) Customer’s  name,  location  and  location  code;; (iii) the account number of the Transaction Card, disguised or suppressed as required by the Rules; (iv) transaction amount; (v) transaction date; (vi) a legend identifying the party to whom it will be delivered, e.g. member copy, merchant copy, cardholder copy, except as permitted by the Rules; and (vii) authorization code, if applicable. The cardholder receipt must also disguise or suppress the expiration date of the Transaction Card as required by the Rules. 7.3 Recurring Transactions; Multiple Sales Drafts. (a) If Customer agrees to accept a recurring transaction from a cardholder for the purchase of goods or services which are delivered or performed periodically, the cardholder shall complete the appropriate authorization with Customer as required by the Rules. The authorization must at a minimum specify the transaction amount(s) charged to the cardholder’s  account,  the  recurring  charges,  and  the  duration  of  time  for  which  such  cardholder’s  permission  is  granted.    In the event that a recurring transaction is renewed, the cardholder shall complete and deliver to Customer a subsequent authorization for continuation of such goods or services to be charged to the cardholder’s  account.    A  recurring  transaction may include the payment of recurring charges such as subscriptions, membership fees, tuition or utility charges. Except as allowed herein, a recurring transaction may not include partial payments made to Customer for goods or services purchased in a single transaction, nor may it be used for periodic payment of goods or services on which Customer assesses additional finance charges. The cardholder’s  authorization  must  be  retained  for  the  duration  of  the   recurring charges and provided upon request. Customer must not complete an initial or subsequent recurring transaction after receiving a cancellation notice from the cardholder or a response that the Transaction Card is not to be honored. (b) Customer shall include on any single transaction receipt the entire amount due for each transaction unless: (a) the balance of the amount is paid by the cardholder at the time of sale in cash, by check, by additional Transaction Cards, or by other means; or (b) all or a portion of the goods or services are to be delivered or performed at a later date, and the cardholder enters two or more transactions, one of which represents a deposit and the others of which represent payment of the balance and the transaction receipt for the balance is completed only upon delivery of the goods or performance of the services. In the case of delayed payment of the balance due on a transaction, Customer shall (i)  note  on  the  transaction  receipt  the  words  “balance”  and  (ii)  not  present  the  “balance”  transaction  receipt  until  all  of  the goods are delivered or the services performed. 7.4 Returns. Customer agrees to maintain a fair policy for the exchange and return of merchandise and for adjustment of services rendered and to give proper credit in such circumstances in accordance with the Rules. In such circumstances, Customer shall prepare and deliver to the Bank, WorldPay, and the cardholder a properly completed credit voucher. Customer may limit its acceptance of returned merchandise, provided proper disclosure is made and purchased goods or services are delivered to the cardholder at the time of the transaction. Proper disclosure by Customer shall be determined to have been given by printing an appropriate notice (such as “NO   REFUND”  or  “EXCHANGE  ONLY”)  on  all  copies  of  the  sales  draft  prior  to obtaining the cardholder's signature thereon. Customer shall not make cash refunds to cardholders for transactions utilizing a Transaction Card. 7.5 Obligation to Report Statement Discrepancies. Customer shall be solely responsible for reviewing its statements from WorldPay (including statements provided online) and for reporting to WorldPay in   writing,   within   60   days   of   Customer’s   receipt   (including   electronic   receipt) of any statement from WorldPay, any underpayments, overpayments or other discrepancies between the volume and/or value of transactions that Customer actually processed during the period indicated on the face of such statement. Customer acknowledges and agrees that WorldPay and the Bank shall not be liable or otherwise responsible to Customer, and shall have no obligation to reimburse Customer, for any underpayment to Customer that is not reported to WorldPay in   writing   within   60   days   of   Customer’s   receipt   of   the   applicable statement. Customer acknowledges and warrants that it shall reimburse WorldPay and/or the Bank upon demand for any misdirected deposits, duplicate deposits or inadvertent over payments into any of its bank accounts hereunder. 7.6 Charges to Cardholders. Customer shall not require any cardholder to pay any part of the Processing Charges, or to pay any contemporaneous finance charge in connection with a transaction in which a Transaction Card is used, unless permitted by the Rules. 7.7 Fraud. Customer shall be solely responsible for losses and expenses incurred by the Bank or WorldPay as a result of or arising out of the fraud, gross negligence or willful misconduct of Customer's employees, contractors or agents. 7.8 Change of Address. Customer shall notify the Bank and WorldPay in writing at least 48 hours in advance of any change of address. The Bank and WorldPay shall be absolutely entitled to rely on Customer's address shown in this Agreement unless such address is updated in accordance herewith. 7.9 Cardholders. Customer shall not sell, purchase, provide or exchange account number information obtained by reason of an Authorized Card Transaction to any third party other than Customer's agents, the Bank, WorldPay, or Payment Networks, except as specifically required by law. Customer shall not make a cash disbursement to any cardholder (including Customer when acting as a cardholder) nor receive monies from a cardholder and subsequently prepare a credit to cardholder's account. 7.10 Evidence of Authority. Within 30 days after request by the Bank or WorldPay, Customer shall submit to the Bank or WorldPay a duly executed corporate or partnership resolution reflecting the authority of Customer to enter into this Agreement and the authority of the individual executing this Agreement on behalf of Customer to do so. 7.11 Financial Information. Customer shall provide such financial information as may be requested by WorldPay or the Bank from time to time during the Term of this Agreement as reasonably required in order for WorldPay or the Bank to comply with the Rules of any Payment Network or to otherwise enable WorldPay and  the  Bank  to  assess  Customer’s  financial  condition  and  the  related  risk  associated   31623v3 with   Customer’s   business.     Such   financial   information   may   include   copies   of   quarterly   and   annual   audited (if produced, otherwise unaudited) financial statements. SECTION 8. CUSTOMER REPRESENTATIONS. Customer hereby represents and warrants to WorldPay and the Bank that: (a) It has full legal power and authority to enter into and perform its obligations under this Agreement and that such actions have been duly authorized by Customer; (b) Its facsimile signature hereon constitutes a valid and binding Agreement; (c) This Agreement constitutes the legal, valid and binding obligations of Customer, enforceable against Customer in accordance with its terms; (d) The transactions transmitted to WorldPay for processing and to the Bank for settlement will represent the indebtedness of the cardholder in the amount set forth therein for goods sold or services rendered and shall not involve any element of credit for any other purpose; (e) Customer shall not transmit Transaction Card information representing sales made by any individual or entity other than Customer; (f) Customer represents that all of the disclosures in its application or other information submitted to the Bank are true, accurate and complete and do not omit any information necessary to make such disclosures not misleading to the Bank and WorldPay; and (g) As to each transaction receipt delivered to the Bank, and as to the transaction evidenced thereby, the transaction receipt represents a bona fide sale or lease of goods or services or both, originated by Customer in compliance with this Agreement and the Rules; all transaction receipts are free from any alteration not authorized by the cardholder; the transaction is in compliance with all applicable laws, rules, and regulations; except   as   may   be   pledged   by   Customer   to   Customer’s   senior   lender,   the indebtedness represented by the transaction receipt has not been pledged as collateral for payment of any indebtedness or obligation of Customer or any other person; and Customer has no knowledge or notice of information that would lead it to believe that the enforceability or collectability of the subject transaction receipt is in any manner impaired. SECTION 9. INDEMNIFICATION, DISCLAIMER, LIMITED LIABILITY. 9.1 Indemnification. a. General. Each   party   (an   “Indemnitor”)   agrees   to   indemnify   and   hold   the   other   parties   (an   “Indemnitee”)   harmless from and against any direct losses, damages, costs, liability or expenses incurred by the Indemnitee, including, without limitation, court  costs  and  attorneys’  fees,  in  connection  with  any  claim  or  demand  made  by  a  third  party  (i) resulting from any breach by Indemnitor of the terms of this Agreement, or (ii) arising from any act or omission by the Indemnitor which violates any applicable federal, state or local laws, rules or regulation, or which violates any of the Rules. b. Payment Card Industry Data Security. (i) Customer hereby agrees to indemnify and hold WorldPay and the Bank harmless from and against any and all claims, demands, damages, fines, and/or penalties imposed upon the Bank and WorldPay as a result of Customer's noncompliance with the Data Security Guidelines, Customer’s   failure   to   maintain   equipment   and   software   that   complies   with   Data   Security   Guidelines, or any other data compromise for which a Payment Network or a court with competent jurisdiction determines that Customer is responsible, including, without limitation, Chargebacks resulting from breach of the Data Security Guidelines or any compromise of cardholder data. (ii) Bank and WorldPay hereby agree to indemnify and hold Customer harmless from and against any and all third party claims, demands, damages, fines,   and/or   penalties   imposed   upon   Customer   as   a   result   of   Bank’s   or   WorldPay’s,   respectively,   noncompliance  with  the  Data  Security  Guidelines,  Bank’s  or  WorldPay’s,  respectively,  failure  to  maintain  equipment  and  software  that  complies   with Data Security Guidelines, or any other data compromise for which a Payment Network or a court with competent jurisdiction determines that Bank or WorldPay, respectively, is responsible. The parties obligations under this Section 9.1(b) shall survive termination of this Agreement. c. Procedures. The Indemnitee shall provide the Indemnitor prompt written notice of any claim or demand subject to indemnification hereunder. The Indemnitor shall have the right, by prompt written notice to the Indemnitee, to assume the defense of any such claim or demand, provided (i) Indemnitor shall bear the cost of such defense and (ii) the Indemnitor does not have a conflict of interest in connection with such defense. If the Indemnitor assumes such defense, the Indemnitee may participate therein through counsel of its choice, but at the sole cost of Indemnitee. The party not assuming the defense of any such claim shall render all reasonable assistance to the party assuming such defense, and all reasonable out-of-pocket costs of such assistance shall be reimbursed by the Indemnitor. No such claim shall be settled other than by the party defending the same, and then only with the consent of the other party, which shall not be unreasonably withheld or delayed. Each party agrees to use reasonable efforts to mitigate the losses it suffers as a result of any indemnification claim made under this Agreement. 9.2 Disclaimer of Warranties. WorldPay and the Bank hereby disclaim all warranties, with respect to the services and products provided hereunder, whether expressed, implied, statutory or otherwise, including without limitation, any warranty of merchantability or fitness for a particular purpose. 9.3 Limitation of Liability. With the exception of (i) their respective settlement obligations to Customer hereunder, (ii) a breach of the confidentiality obligations under Section 11.7, and (iii) their respective indemnification obligations under Section 9.1(a)(ii) and Section 9.1(b)(ii), under no circumstances shall the financial responsibility of WorldPay or the Bank for any failure of performance by WorldPay or the Bank under this Agreement exceed the fees or charges paid to such party for the transaction or activity that is or was the subject of the alleged failure of performance. Except for breaches of Section 11.7, in no event shall a party to this Agreement, its agents, officers, directors, employees or affiliates, be liable for any special, incidental, consequential or exemplary damages or claims by another party to this Agreement or any third party relative to the transactions or activities hereunder, whether or not such damages were foreseeable, provided the parties acknowledge and agree that any amounts required to be paid in connection with a third party claim subject to indemnification under this Section 9 or amounts payable with respect to any wrongful early termination of this Agreement shall be considered direct damages. 31623v3 SECTION 10. TERM, TERMINATION. 10.1 Term. This Agreement shall be binding upon Customer upon execution of this Agreement by Customer. This Agreement shall be binding upon WorldPay and the Bank upon WorldPay’s  and  the  Bank’s  acceptance  hereof  (as  evidenced  by  an  authorized  signature  hereon   with respect to such party). The term of this Agreement shall be co-terminous with the Corporate Processing Agreement. 10.2 Termination Without Notice. WorldPay or the Bank may terminate this Agreement without notice, at any time as a result of any of the following events: (a) any material noncompliance by Customer with the Rules; (b) any voluntary or involuntary bankruptcy or insolvency proceedings involving Customer, its parent or an affiliated entity or individual; (c) WorldPay or the Bank, in its commercially reasonable discretion, deems Customer to be financially insecure such that WorldPay or the Bank is at a material risk of loss; (d) Customer or any other person owning or controlling Customer's business is or becomes listed in the Combined Terminated Customer File (or its equivalent) maintained by the Payment Networks; (e) Customer materially alters the nature and type of business conducted, (f) WorldPay or the Bank is prohibited by applicable law from conducting business with Customer or its principals; (g) WorldPay or the Bank receive written notice from Pla-Fit Health that Customer is no longer a Franchisee; or (h) termination of the Corporate Processing Agreement. 10.3 Termination With Notice. In the event any party breaches any of the provisions hereof (excluding breaches described in Section 10.2), and fails to cure such breach within 60 days of receipt of written notice from the other of such breach, the non-breaching party may terminate this Agreement immediately at the expiration of the 60 day cure period. Should Customer terminate this Agreement (or breach the exclusivity provision hereof) without cause on or prior to the first anniversary of the Start Date (as defined in the Corporate Processing Agreement), Customer shall pay to WorldPay, as an early termination fee, a sum which equals (a) the average of the last three months processing and statement fees in which Customer utilized (or should have utilized) WorldPay’s  processing  services  or  anticipated  monthly  processing  and  statement  fees  based  on  forecasted  Transaction  Card  volume  shown on Schedule A attached hereto, at the option of the Bank, multiplied by (b) the lesser of 12 or the remaining months left in the then current term. Such termination fee shall be applicable on a location by location basis. After the first anniversary of the Start Date (as defined in the Corporate Processing Agreement), Customer may terminate this Agreement for convenience without payment of any early termination fees, provided Customer provides WorldPay with at least 60 days prior written notice of such termination. Any termination fee payable under this Section 10.3 shall  be  deducted  from  Customer’s  account  by  electronic debit by the Bank and shall be in addition to, and not in lieu of, any other remedies available to WorldPay or the Bank hereunder. Customer’s   obligation   to pay such termination fee shall survive any termination or expiration of this Agreement. 10.4 Additional Rights. Upon notice of any termination of this Agreement, the Bank shall determine and the Bank, or WorldPay on behalf of the Bank, may notify Customer of the estimated aggregate dollar amount of Customer's Chargebacks, refunds, and other obligations and liabilities that the Bank and WorldPay reasonably anticipate may become due subsequent to termination, and Customer shall immediately deposit such amount with the Bank or the Bank may withhold such amounts from credits due to Customer or may utilize the funds in the Reserve Fund, if applicable. The Bank is authorized to hold such funds for a reasonable period not to exceed the latter of the ten months after termination of this Agreement or the length of time applicable laws, rules or regulations or Payment Networks impose actual or potential liability upon any party to this Agreement. Customer shall have no rights to such funds until all of its obligations under this Agreement are satisfied, and WorldPay and the Bank may receive out of such funds those amounts that are or become due to WorldPay and the Bank pursuant to this Agreement. The Bank shall periodically release funds held pursuant to this Section 10.4 as the risk of loss to the Bank and WorldPay reduces (as determined by Bank and WorldPay in their commercially reasonable discretion). 10.5 Survival. The obligations of all parties hereto incurred prior to the effective date of termination or arising from transactions processed prior to the termination shall survive the termination of this Agreement. Without limiting the generality of the foregoing, Customer shall be liable both before and after termination for all Chargebacks relating to card transactions prior to such termination. Each party shall be liable for all obligations, warranties and liabilities of such party pertaining to the period during which WorldPay and the Bank processed or settled transactions for Customer under this Agreement, including all indemnification obligations under Sections 2, 4.7, and 9.1, regardless of whether Customer has paid an early termination fee under Section 10.3. In addition to the foregoing and in addition to those sections of this Agreement which by their terms survive, Sections 4.9, 7.5, 7.7, 9.1, 9.2, 9.3, 10.4, 10.5 and 11.2 through 11.11 shall survive any termination or expiration of this Agreement. SECTION 11. GENERAL PROVISIONS 11.1 Exclusivity. Subject to Schedule B hereof, Customer agrees that prior to the first anniversary of the Start Date (as defined in the Corporate Processing Agreement), it will not use the services of any bank, corporation, entity or person other than WorldPay and the Bank to provide services similar to those contemplated in this Agreement. The parties agree that after the first anniversary of the Start Date, this exclusivity provision shall not apply to Customer. 11.2 Assignment, Binding, No Third Party Beneficiaries. Customer may not assign this Agreement, directly or indirectly, including by operation of law, without the prior written consent of the other parties. Any sale or transfer of the equity interests of Customer such that the holders of the equity interests as of the date hereof do not own more than 50% of the equity interests of Customer immediately after such transfer  shall  be  deemed  an  assignment  of  this  Agreement.    The  Bank  may  assign  this  Agreement  without  Customer’s  consent.   WorldPay may assign its rights and obligations under this agreement to another transaction processor approved by the Bank. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors or permitted assigns. This Agreement will not confer any rights or remedies upon any person or entity other than the Bank, WorldPay, and Customer. 31623v3 11.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. 11.4 Attorneys' Fees. In the event any party hereto shall employ legal counsel or bring an action at law or other proceeding against another party to enforce any of the terms, covenants, or conditions hereof, the prevailing party shall be entitled to its reasonable attorneys' fees and costs so incurred. 11.5 Maintenance of Records by Electronic Means. Customer understands and acknowledges that WorldPay, in the ordinary course of its regularly conducted business activities, may keep or maintain certain of its business records and documentation by scanning such records and documents so as to create a photographic or other image or representation of same that may be stored by electronic means and, if necessary, subsequently reproduced in paper form. Customer hereby waives any objection to WorldPay’s   maintenance   and/or   reproduction of such records and documents in this manner, and Customer further agrees that it shall not challenge or contest the authenticity or admissibility of same on such grounds in any legal action or proceeding, provided, however, that nothing in this sentence shall preclude Customer from challenging the accuracy and completeness of such records and documents. 11.6 Notices. Except as otherwise provided in this Agreement, written notices required under the terms of this Agreement shall be sent by (a) Priority U.S. mail, return receipt requested, (b) personal delivery including Federal Express, DHL, UPS, or other reputable express courier services, or (c) facsimile, provided written confirmation of receipt is received, return receipt requested and a copy is sent by either the method described in (a) or (b). Notices shall be addressed to the Bank at RBS Citizens, N.A., 1 Citizens Plaza, Providence, Rhode Island 02903, Attention: Merchant Services; to WorldPay at WorldPay US, Inc., 600 Morgan Falls Road, Atlanta, Georgia, 30350, Attention: Legal Department, Fax 678-587-2244; and to Customer at its address shown in this Agreement; or such other address as shall be provided by the Bank, WorldPay or Customer in writing, to the other. Notices shall be effective upon actual receipt or upon refusal of delivery. 11.7 Confidentiality. The parties acknowledge that each of their respective businesses is highly competitive and that their respective books, records and documents, technical information concerning their respective products, equipment, services and processes, procurement procedures and pricing information, financial information and the names or other information (such as credit and financial data) concerning cardholders, all comprise confidential business information and trade secrets of each and are valuable, special and unique assets of the parties that they use in their business to obtain a competitive advantage over their competitors, which do not know or use  this  information  or  have  access  to  it  (collectively,  “Protected Information”).    The  parties  further acknowledge that the protection of each other's Protected Information against unauthorized disclosure and use is of critical importance to each in maintaining their respective competitive position. Accordingly, the parties hereby agree that neither they, nor any of their respective employees or agents, shall make any unauthorized disclosure of any Protected Information, or make any use thereof, except for the benefit of, and on behalf of, that party for purposes of performing this Agreement. The following information shall not be subject to protection under this Section 11.7: information that (a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving party, generally known or available to the public; (b) was known by the receiving party before receiving such information from the disclosing party; (c) is hereafter rightfully obtained by the receiving party from a third party, without breach of any obligation to the disclosing party; or (d) is independently developed by the receiving  party  without  use  of  or  reference  to  the  Protected  Information.    Each  party  may  disclose  the  other  party’s  Protected Information if and to the extent that such disclosure is required or requested by applicable law or any regulatory or governmental authority. Additionally, Customer hereby authorizes WorldPay or Bank to disclose Protected Information to Affiliates and Franchisor. The provisions of this Section 11.7 shall be effective during the term of this Agreement and shall survive for a period of two years thereafter, provided with respect to Protected Information that constitutes a trade secret under applicable law, the provisions of this Section 11.7 shall be effective during the term of this Agreement and shall survive for the longer of (i) two years after the termination of this Agreement, or (ii) for so long as such information continues to qualify as a trade secret under applicable law, excluding failure to so qualify as a result of breach of this Agreement. Notwithstanding anything contained to the contrary herein, the parties further agree that all cardholder data shall be protected in accordance with applicable law and the Rules. 11.8 Force Majeure. No party shall be liable for delays in processing, settlement, or other non-performance caused by such events as fires, telecommunications or utility or power failures, equipment failures, labor strife, riots, war, non-performance of such   party’s   telecommunication vendors or suppliers, acts of God, or other causes over which such party has no reasonable control. Nothing in this Section 11.8 shall relieve WorldPay of its obligations to provide redundancy and disaster recovery as set forth in Section 3.4 above. 11.9 Entire Agreement; Modification, Waiver. This Agreement and any accompanying schedules constitutes the entire understanding of WorldPay, the Bank and Customer with respect to the subject matter hereof and supersedes all prior agreements, understandings or negotiations, whether oral or written between them with respect to the subject matter hereof. Except as otherwise set forth herein, this Agreement and accompanying schedules may not be amended or modified, except by an instrument in writing executed by all parties. No waiver by any party of any provision of this Agreement will be valid unless the same will be in writing and signed by the party making such waiver. No waiver of a provision of this Agreement shall constitute a waiver of any other provision or of the same provision on another occasion. 11.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 11.11 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. 11.12 U.S. Patriot Act Customer Identification Notice, Regulatory Requirements, Credit Reports. In order to assist the U.S. government in its efforts to fight terrorism and money laundering activities, federal law requires WorldPay and the Bank to obtain, verify, and record information that identifies persons and entities establishing a business relationship with WorldPay or the Bank through the purchase of products or services. The information required varies based on whether Customer is a publicly or privately owned business. When 31623v3 establishing a business relationship, WorldPay and the Bank shall ask for identification and verification information, which may include, without limitation, the legal name of the entity, identification of the primary principal contact of the business (if required by law), physical address of the entity or principal, date of formation (for business entities), date of birth (for individuals), and other information that allows WorldPay and the Bank to identify Customer and its principals. Customer agrees to provide all information requested by WorldPay and the Bank that is required in order for WorldPay and the Bank to comply with applicable law. In addition and in connection with such regulatory requirements, Customer shall provide prior written notice to the Bank and WorldPay of any change in the ownership or composition of Customer if as a result of such change, an individual or entity who does not own 20% or more of the beneficial equitable ownership of Customer as of the date hereof becomes the owner of 20% or more of the beneficial equitable interest of Customer hereafter. Customer acknowledges that WorldPay and the Bank may require that a consumer report of certain officers, partners, or owners of Customer be provided from a consumer and/or credit reporting agency at the inception of this Agreement and from time to time thereafter. _ By: Print: Title: Date: WorldPay US, Inc./ RBS Citizens, N.A. (As to WorldPay & the Bank) By: Name: Title: Date: 31623v3 Schedule A To Customer Processing Agreement Transaction Pricing for /Customer 1. Processing assumptions:  Aggregate Annual credit card volume of Customer, Pla-Fit Health, LLC and Franchisees: $  Average ticket – $  Number of active locations  Communication type - IP Customer shall give WorldPay at least 30 days prior written notice in the event it switches its communication type. 2. Payment Network Fees: Published fees of the Payment Networks for credit or debit card transactions or other electronic payment transactions processed pursuant to this Agreement, including interchange, assessment, authorization, risk, transmission and all other   fees   shall   be   passed   through   to   Customer.     It   is   the   Customer’s   sole   responsibility   to   notify   WorldPay   in   writing   if   it qualifies for discounts with the Payment Networks based on the volume of the Customer. Following receipt of such notice, WorldPay shall take appropriate  action  to  seek  implementation  of  such  discounted  pricing  with  the  Payment  Networks.    Discounts  based  on  Customer’s volume shall be passed through to Customer once implemented by the Payment Networks. 3. WorldPay Fees: Based on the above processing assumptions and the specific "communication type" listed below, WorldPay fees shall be as follows: PER TRANSACTION FEES Authorization/Settle* FOR ALL TRANSACTIONS OTHER THAN RECURRING TRANSACTIONS Dial Visa/MasterCard Credit Card Transactions Non Visa/MasterCard Credit Card Transactions 1 Debit Card Transactions Authorize.net Transactions Gift Card Transactions High Speed** $ $ $ $ $ $ $ $ 2 3 * Represents the per transaction fee charged by WorldPay and the Bank for settlement of transactions (in the case of Visa/MasterCard Credit Card Transactions) and for authorization of transactions (in the case of Non Visa/MasterCard Credit Card Transactions). In addition, one half of one percent (“Basis Points”)  will be charged based on the value of the settled transaction (sales & credits). ** High speed is if the communication type is frame relay, ISDN, DSL or internet. Authorization/Settle* FOR RECURRING TRANSACTIONS*** Dial Visa/MasterCard Credit Card Transactions Non Visa/MasterCard Credit Card Transactions Debit Card Transactions Authorize.net Transactions Gift Card Transactions 3 1 High Speed** $ $ $ $ $ $ $ $ 2 * Represents the per transaction fee charged by WorldPay and the Bank for settlement of transactions (in the case of Visa/MasterCard Credit Card Transactions) and for authorization of transactions (in the case of Non Visa/MasterCard Credit Card Transactions). In addition, Basis Points will be charged based on the value of the settled transaction (sales & credits). ** High speed is if the communication type is frame relay, ISDN, DSL or internet. ***Except for the Basis Points applicable to the transaction, the per transaction fees for Recurring Transactions will not be billed by or collected by WorldPay. The  per  transaction  fees  for  Recurring  Transactions  will  be  collected  by  Maas  Global  Solutions  Corporation  (“Maas”)  on  behalf of Franchisor. 1 Examples of Non Visa/MasterCard Cards include, but are not limited to, American Express, Discover/Novus, Diners Club, Carte Blanche and JCB. Settlement (payment) for certain Non Visa/MasterCard Card transactions is the responsibility of the issuing organization and additional fees apply as specified in their respective separate agreements. 2 Separate agreement between Customer and Authorize.net is required and Customer is responsible for all fees specified therein. 3 Billable transactions include activations, redemptions, balance inquiries and dormancy fees. Separate agreement with WorldPay is required. 31623v3 Schedule A To Customer Processing Agreement Transaction Pricing for Minimum Processing Fee - $ /Customer per month. Administration Statement Fee - $ 4 Chargeback Handling Fee - $ per month/per location. per Chargeback. ACH Reject, NSF or Returned Check Fee - $ 5 Voice Authorization Fee - $ per occurrence. per call. Equipment Replacement and Supplies Program - The Equipment Replacement and Supplies Program must be accepted at the Customer level. If accepted, all terminals at all locations must be included. Check if elected: Equipment Only - $ Supplies Only - $ per month/per terminal per month Equipment and Supplies - $ per month/per terminal 4. Frequency of Billing: Fees due under Section 2 shall be payable on a monthly basis. Fees due under Section 3 shall be payable on a monthly basis. WorldPay has the right to accelerate the frequency of billing without notice in the event WorldPay or the Bank, in its commercially reasonable discretion, believes that Customer’s  credit  profile  has  changed  in  such  a  manner  that  WorldPay  is  at   a risk of material loss by billing on other than a daily basis or either party has given notice of termination of this Agreement. ___ C By: Print: Title: Date: WorldPay US, Inc./ RBS Citizens, N.A. (As to WorldPay & the Bank) By: Name: Title: Date: 4 $ 5 Debit adjustment fee is $ if adjustment date is greater than 10 calendar days after transaction (pass-through fee charged by debit networks). Debit chargeback fee is (pass-through fee charged by debit networks). Voice Authorization Referral Fee is $ per call; Voice AVS Request Fee is $ per call. 31623v3 Schedule B To Customer Processing Agreement Service Level Agreements WorldPay agrees to provide the following service level commitments to Customer:  WorldPay’s  authorization  system  will  be  available  99.99% of time, measured on a weekly (seven consecutive day) basis. In the event WorldPay breaches this guaranteed availability commitment more than twice in any consecutive 12 month period during the term of this Agreement, Customer’s  exclusivity  obligation  set  forth  in  Section  11.1  shall  terminate  and  Customer may terminate this Agreement without penalty by providing WorldPay written notice of its intent to so terminate within 30 days of any such third breach, provided such notice must specify a date, which date must be within 90 days from the date of such notice of termination, upon which the termination shall become effective. Any down time not attributable to WorldPay's authorization system (i.e., network outages, communication outages or other third party difficulties) shall not apply to this availability. The ability to terminate this Agreement as set forth in the foregoing   sentence   shall   be   Customer’s   sole   and   exclusive   remedy   for   any   failure   by   WorldPay to meet these service level commitments.  In the event a chargeback is received by WorldPay for an authorization-related reason code on a transaction authorized when the system was not available, Customer will not be held liable for such chargeback.  WorldPay will assign an Account Management Team for resolution of day to day questions/issues that might arise.  The corporate office will be given a direct extension for their Account Management Team and Relationship Manager to handle high level issues such as additional locations, billing questions, interchange qualification, etc. This team is available from 8:30AM EST – 5:30PM EST, M-F. All follow up calls will be returned within two hours from the time the call is received.  Updates of outstanding research items will be provided within 24 hours, excluding weekends and holidays.  WorldPay will supply escalation procedures and contacts for any issues that may arise. 31623v3 STANDARD MASTER AGREEMENT FOR FRANCHISEES MGS GATEWAY AGREEMENT MGS offers payment gateway services (the “PaymentSite Services”) to its customers that are party to a merchant processing agreement with MGS and/or its processors and acquiring banks (collectively, “CUSTOMERS” and individually, “CUSTOMER”). In order for a CUSTOMER to obtain or continue using PaymentSite Services, CUSTOMER must agree to and accept the terms and conditions of this Agreement. The Agreement sets out the terms and conditions under which CUSTOMER may utilize the PaymentSite Services. Please read this Agreement carefully. By signing below, or by using the PaymentSite Services, CUSTOMER acknowledges and agrees that CUSTOMER has reviewed and understands the Agreement and agrees to be legally bound by all its terms and conditions. NOW THEREFORE, the parties agree as follows: 1. CUSTOMER Capacity and Related Matters. By accepting the terms and conditions of this Agreement, CUSTOMER represents and warrants that (a) to the best of CUSTOMER’s knowledge and belief all information CUSTOMER has provided to MGS related to Customer’s payment processing activities is true and correct in all respects, and (b) CUSTOMER will update MGS by e-mail with any changes to information CUSTOMER has previously supplied. CUSTOMER further represents and warrants that CUSTOMER’s signatory has the