What is the 'System' that Aira Fitness franchisees use to operate their business?

Membership Contract Assignment Agreement | | Attachment H - Security Agreement

AIRA FITNESS FRANCHISE AGREEMENT

This Franchise Agreement is made between Aira Fitness Franchising LLC, an Illinois limited liability company, with its principal business located at 600 Route 59, Ingleside, Illinois 60041 ("we" or "us"), and the Franchisee identified in the Summary Pages ("you"), to be effective on the Effective Date identified in the Summary Pages.

RECITALS

• A. We and our affiliate have developed a proprietary business format and system ("System") for operating an exercise facility ("Aira Fitness Business")
• B. Aira Fitness Businesses that operate from traditional fitness center in a commercial space ("Fitness Center") offer personal training and bootcamps.
• C. Fitness Centers and Aira Fitness Businesses that operate from pre-fabricated modular buildings ("Pods") provide 24-hour personal keycard access for members (excepted as restricted by law);
• D. The System includes automated member billing and collection procedures and services; and use of our proprietary and confidential information; a distinct interior layout, design, décor, color scheme, graphics, fixtures and furnishings, operating and customer service standards and procedures, advertising and marketing specifications and requirements, and other standards, specifications, techniques and procedures that we designate.
• E. Aira Fitness Businesses operating under the System are identified by the trade name and service mark "AIRA FITNESS" and other trademarks, service marks and trade identifiers that we designate to identify businesses operating under the System (the "Marks").
• F. You have applied for the right to operate an Aira Fitness Business using the System and Marks, and we have approved your application in reliance on the representations contained therein, including those concerning your financial resources, your business experience and interests, and the manner in which the Aira Fitness Business will be owned and operated.

In consideration of the foregoing and the mutual covenants and consideration below, you and we agree as follows:

DEFINITIONS

• 1. For purposes of this Agreement:
• A. "Owner" means any person who directly or indirectly owns an interest in the franchisee.
• B. All capitalized terms not defined in this Section or the Recitals have the meaning given in the text of this Agreement.

2. GRANT OF LICENSE

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"). If the Authorized Location is not known at the time this Agreement is signed, you must acquire an acceptable site for the Aira Fitness Business premises no later than ninety (90) days from the Effective Date of this Agreement, at which time you authorize us to insert the Authorized Location on the Summary Page. You must identify a site for the Aira Fitness Business that meets our site selection criteria and that is located within the Preliminary Designated Area identified in the Summary Page (see Section 5.A). You may not use the Aira Fitness Business premises or Authorized Location for any purpose other than the operation of an Aira Fitness Business during the term of this Agreement.
• C. Designated Area. The Preliminary Designated Area identified on the Summary Page, if any, is the general location where you intend to secure a site for the Aira Fitness Business. If a Preliminary Designated Area isspecified on the Summary Page, we will not grant anyone else the right to develop or operate an Aira Fitness Business in the Preliminary Designated Area for ninety (90) days from the Effective Date of this Agreement. Once the Authorized Location has been identified, you hereby authorize us to define in Attachment A a "Designated Area" around the Authorized Location; provided that such Designated Area will be substantially the same as the Preliminary Designated Area in terms of size, shape and/or demographics.

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