What is the relationship between Aira Fitness and its franchisees defined as?

• A. Grant of License. We hereby grant you the right and license, and you undertake the obligation, subject to the terms and conditions of this Agreement (i) to operate a single Aira Fitness Business, (ii) to sell at retail authorized products and services at and from the Aira Fitness Business premises, (iii) to use the Marks in connection with operating and promoting the Aira Fitness Business, and (iv) the right to solicit memberships for the Aira Fitness Business. Whether your Aira Fitness Business will be operated from a Fitness Center or a Pod is identified in the Summary Pages.

The license granted by this Agreement does not include (i) any right to sell services and products identified by the Marks at any location other than the Authorized Location (as defined in Section 2.B below), or through any other channels or methods of distribution, including the internet (or any other existing or future form of electronic commerce), catalog sales, telemarketing or other direct marketing (ii) any right to sell services and products identified by the Marks to any person or entity for resale or further distribution, or (iii) except for the designated area protection described in Section 2.C., any right to exclude, control or impose conditions on our development of

future franchised, company or affiliate owned Aira Fitness Businesses at any time or at any location.

• B.

Authorized Location.

You must operate the Aira Fitness Business only at the location identified, or to be identified on the Summary Page (the "Authorized Location").

You must operate your Aira Fitness Business in strict compliance with all applicable laws and with the required standard procedures, policies, rules and regulations established by us and incorporated herein or in the Manual or in AIRA FITNESS System bulletins or other publications that are distributed to franchisees from time to time. Such required standard procedures, policies, rules and regulations established by us may be revised from time to time as circumstances warrant, and you must comply with all such required procedures as they exist from time to time as though they were specifically listed in this Agreement and when incorporated in a system bulletin or other written notice to franchisees, the same is incorporated herein by reference. These required standard procedures, policies, rules, and regulations may include operational matters, advertising or marketing matters, membership issues, relationships between you and other franchisees, accounting issues, and any other issues that we believe, in our businessjudgment, are required to generally benefit the AIRAFITNESS System and itsfranchisees.

• N. Suggested Pricing Policies. We reserve the right to establish prices for the products and services you sell, both minimum and maximum, subject to applicable law. Unless stated otherwise in writing, any list or schedule of prices we furnish you is a recommendation only and any decision you make to accept or reject the suggestion will not affect the relationship between us.
• O. National Accounts. We reserve the right to negotiate contracts with companies, affinity groups and insurance plans that will require that certain terms and/or discounts be offered to members of that corporation, affinity group or insurance plan by all franchisees at all locations ("National Accounts"). You are required to provide the special terms and/or discounts to these National Accounts.
• P. Member Administration. We or an affiliate may from time to time engage in administrative tasks related to member administration such as administering online enrollment or membership transfer and reciprocity programs. You agree that we may take those actions in accordance with our then-current policies, which may include transferring members to and from your Aira Fitness Business and providing on-line member enrollment. You agree that we may make such corrections as necessary, including that if a member is mistakenly transferred to the wrong Aira Fitness Business, we may issue credits and charges for the membership dues to the affected Aira Fitness Businesses. Any actions we take for member administration are for the benefit of the brand and uniformity in the System and not to exercise control over your business.

You acknowledge and agree that we and our affiliates have the right to develop and operate and grant others the right to develop and operate Aira Fitness Businesses outside the Designated Area, regardless of their proximity to the Designated Area or any negative impact they may have on your Aira Fitness Business.

We and our affiliates also have the right to develop and operate and grant others the right to develop and operate exercise facilities and other businesses under a different trademark within and outside the Designated Area which may be similar to or competitive with Aira Fitness Businesses.

We will not operate, franchise, or license the operation of an exercise facility offering 24/7 keycard access and substantially similar to an Aira Fitness Business in your Designated Area, except in connection with our acquisition of a multi-unit brand.

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