What constitutes a breach of representation or warranty that would trigger an Event of Default for an Aira Fitness franchise?

• L.

Representations of Franchisee.

As an inducement to us to grant you the franchise contemplated by this Agreement, you hereby acknowledge and represent to us the following (and agree to notify us immediately in writing upon the occurrence of any act or event that would render any representation incorrect):

Entity Ownership.

If you are a corporation, limited liability company, partnership or similar entity, you and each of your Owners represents and warrants that your ownership is completely and accurately listed on the Summary Page and that you will provide us with updated ownership information so that at all times the ownership information is current, complete and accurate.

[Item 23: **RECEIPTS]

1. Representation and Warranties of the Franchisee. Franchisee hereby represents, warrants and covenants to the AIRA Fitness that: (a) As of the effective date of the Assignment, all of Franchisee's obligations and indebtedness for telephone, telephone listing services and telephone directory advertisement services will be paid and current; (b) As of the date hereof, Franchisee has full power and legal right to enter into, execute, deliver and perform this Agreement; (c) This Agreement is a legal and binding obligation of Franchisee, enforceable in accordance with the terms hereof; (d) The execution, delivery and performance of this Assignment does not conflict with, violate, breach or constitute a default

under any contract, agreement or instrument to which Franchisee is a party or by which Franchisee is bound, and no consent of nor approval by any third party is required in connection herewith; and (e) Franchisee has the specific power to assign and transfer its right, title and interest in its telephone numbers, telephone listings and telephone directory advertisements, and Franchisee has obtained all necessary consents to this Assignment.

Immediate Termination With No Opportunity to Cure.

In the event any of the following defaults occurs, you will have no right or opportunity to cure the default and this Agreement will terminate effective immediately on our issuance of written notice of termination: (i) you have failed to identify a mutually acceptable site for the operation of the Aira Fitness Business or to open the Aira Fitness Business for business within the time period provided by this Agreement; (ii) you or any Owner has made any material misrepresentation or omission in your franchise application or any other report to us; (iii) your voluntary abandonment of this Agreement or the Authorized Location, (iv) the loss of your lease, or the failure to timely cure a default under the lease, (v) the loss of your right of possession or failure to reopen or relocate under Section 5.G.; (vi) the closing of the Aira Fitness Business by any state or local authorities for health or public safety reasons; (vii) any unauthorized use of the Confidential Information; (viii) voluntary or involuntary bankruptcy by or against you or any Owner or guarantor, insolvency, making an assignment for the benefit of creditors or any similar voluntary or involuntary arrangement for the disposition of assets for the benefit of creditors; (ix) conviction of you, any Owners, or guarantors of (or pleading no contest to) any felony or misdemeanor that brings or tends to bring any of the Marks into disrepute or impairs or tends to impair your reputation or the goodwill of the Marks or the Aira Fitness Business, (x) you, any Owner, guarantor or an affiliate of any of you are listed by the United States or United Nations as being a terrorist, financier of terrorism or otherwise restricted from doing business in or with the United States; (xi) intentionally underreport membership sales or Gross Sales, falsify financial data, or otherwise commit an act of fraud with respect to your acquisition of this franchise or your rights or obligations under this Agreement, or any understatement or 2% variance on a subsequent audit within a two- year period under Section 10.C., (xii) any unauthorized transfer or assignment in violation of Section 12; (xiii) your failure to use the approved payment processor, (xiv) you failed to meet the Minimum Membership Requirement for six (6) consecutive months, (xv) you failed to meet the Minimum Monthly Gross Sales Requirement for six (6) consecutive months, or *(xv)*any default by you that is the second same or similar default within any 12 month consecutive period or the third default of any type within any 24-month consecutive period.

Source: Item 23 — **RECEIPTS (FDD pages 59–254)