What is the Aira Fitness developer required to be bound by according to the development agreement?

• A. Supervision. You must insure that the Aira Fitness Business is operated in accordance with the terms and conditions of this Agreement. Your Principal or a general manager must devote full time and best efforts to the onpremises management of the Aira Fitness Business. If you employ a general manager to manage the Aira Fitness Business, he or she must attend and successfully complete all required training, as listed in Sections 7.B and C.
• B. Training. You must, at your expense, comply with all of the training requirements we prescribe for the Aira

Fitness Business to be developed under this Agreement. If you employ a general manager, he or she also must comply with all training requirements. Specifically, prior to opening, you must attend our initial training program and complete the training to our satisfaction. In the event you are given notice of default as described in Sections 14.A and B and the default relates, in whole or in part, to your failure to meet any operational standards, we have the right to require as a condition of curing the default that you, at your expense, comply with the additional training requirements we prescribe. Any new general manager must comply with our training requirements within a reasonable time as we specify. Under no circumstances may you permit management of the Aira Fitness Business' operations on a regular basis by a person who has not successfully completed to our reasonable satisfaction all applicable training we require.

You therefore agree to the following non-competition covenants:

You agree that you will receive training and Confidential Information that you otherwise would not receive or have access to but for the rights licensed to you under this Agreement.

Persons Bound.

Unless otherwise specified, the term "Covered Person" as used in this Section 10.D includes, collectively and individually, your Owners and all guarantors, officers, directors, members, managers, partners, as the case may be, and holders of any ownership interest in you.

We may require you to obtain from your individuals identified in the preceding sentence a signed non-compete agreement in a form satisfactory to us that contains the non-compete provisions of this Section 11.D.

During Term.

During the term of this Agreement, Covered Persons must not directly or indirectly, for themselves or through, on behalf of or in conjunction with any individual or business entity: (i) divert any Aira Fitness Business member, potential Aira Fitness Business member or former Aira Fitness Business member to any exercise facility except another Aira Fitness Business; or (ii) own, operate, lease, franchise, engage in, be connected with, have any interest in, or assist any person or entity engaged in any other exercise facility (including, but not limited to a 24/7 fitness center, studio or exercise facility; a fitness center, studio or exercise facility featuring keycard access or a structured fitness/training program or complete body overhaul program for individuals) in the United States, except another Aira Fitness Business pursuant to a valid franchise agreement with us.

After Termination.

• 9.1 Unless otherwise specified, the term "Developer" as used in this Section 9 shall include each and every Owner of Developer.
• 9.2 Developer specifically acknowledges that, pursuant to this Agreement, Developer will have access to the Confidential Information. Accordingly, Developer covenants that Developer and its Owners shall not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of termination, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, or entity:
• (a) own, maintain, operate, engage in, consult with or have any interest in (as disclosed or beneficial owner) any Competitive Business or any entity which is franchises, licenses or develops Competitive Businesses within the Development Area, or within a ten (10) mile radius of any existing Aira Fitness Center, except under a validly existing Franchise Agreement with Franchisor. You acknowledge and agree that, after the date of this Agreement, other Aira Fitness Centers may open, thereby expanding the geographical area in which you will not be able to compete with us. For purposes of this Section 9, a "Competitive Business" is defined as any fitness center, studio or exercise facility;

If there is a conflict between our standards and policies and actual applicable law, you must comply with the requirements of applicable law, immediately give us notice of said conflict and promptly and fully cooperate with us and our counsel in determining the most effective way, if any, to meet our standards and policies within the bounds of applicable law.

You must secure and maintain in force all required licenses, permits and certificates relating to your Aira Fitness Business.

You must, at your expense, participate in our AIRA FITNESS web site, any intranet or extranet system we may develop or other online communications as we may require.

Upon opening for business, you shall begin paying our then-current monthly website fee ("Website Fee"), which shall not exceed Four Hundred Dollars ($400.00) per month.

You must use Membership Agreements that are based on our then-current standard form of Membership Agreement, with the exception, however, that there may be state and local laws that may require you to alter the Membership Agreement in the jurisdictions under which your Aira Fitness Business operates – you must abide by those laws.

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