How should I identify and advertise my Basecamp Fitness studio?

business standing associated with the Marks or the System, you will immediately, upon written notice from us, modify your use of the Marks and the System in the

manner prescribed by us in writing. You will not during or after the term of this Agreement do anything directly or indirectly which would disparage, infringe upon, harm, or contest our rights in, the Marks or System.

• D. Promotion. You will operate your Basecamp Studio so that it is clearly identified and advertised as a Basecamp Fitness studio. The style, form and use of the words "Basecamp Fitness" in any advertising, written materials, products or supplies, including but not limited to any Technology Platform (defined below), must, however, have our prior written approval and comply with our specifications as we may prescribe in writing and as set forth in the Manual, or otherwise. You will use the Marks that now or hereafter may form a part of the System, on all signs, paper supplies, business cards, uniforms, advertising materials, Technology Platforms, and other items in the identical combination and manner as we may prescribe in writing and you will supply to us samples or photographs of the same upon our request. You will comply with all trademark, trade name, service mark and copyright notice marking requirements and you will supply to us samples or photographs of the same upon our request. You will not use the words "Basecamp" or "Basecamp Fitness" in your corporate, partnership, limited liability company or other entity name. You may not market or advertise in violation of federal laws regulating advertising, such as the CAN-SPAM Act and the TCPA, and state advertising laws applicable to your Basecamp Studio.
• E. Substitutions of, or Adverse Claims to, Marks. We have the right to protect and maintain all rights to the Marks against encroachment, misuse or unauthorized use and against all challenges to any rights of its use, as we deem appropriate. If it becomes advisable at any time, in our sole discretion, to modify or discontinue use of any Mark, or to discontinue using any Mark, or if there is an adjudication by a court of competent jurisdiction that any party's rights to any of the Marks are superior to ours, then upon written notice from us, you will, at your sole expense, immediately adopt and use the changes and amendments to the Marks that are specified by us in writing, and if the Mark that is changed is the name "Basecamp Fitness" then all references in this Agreement to the name "Basecamp Fitness" will be deemed references to such substitute Mark. If we modify or discontinue use of any Mark, you will immediately cease using the Marks specified by us, and will, as soon as reasonably possible, commence using the new trademarks, trade names, service marks, logos, designs and commercial symbols designated by us in connection with all advertising, marketing and promotion of your Basecamp Studio. We will have no liability or obligation whatsoever with respect to your modification or discontinuance of any Mark. You will not make any changes or amendments in or to the use of the Marks or System unless directed by us in writing.
• F. Litigation. You will have no obligation to and will not, without our prior written consent, defend or enforce any of the Marks in any court or other proceedings for or against imitation, infringement, any claim of prior use, or for any other allegation. You will, however, immediately notify us of any claims or complaints made against you with respect to the Marks and will, at your reasonable expense, cooperate in all respects with us in any court or other proceedings involving the Marks. We will pay the cost and expense of all litigation incurred by us, including attorneys' fees, specifically relating to the Marks. We will have the right to control and conduct any litigation relating to the Marks and be entitled to all recovery related to claims with respect to the Marks. While we are not required to defend you against a claim based on your use of the Marks, we will reimburse you for your liability arising from your authorized use of the Marks. You will also be required to reimburse us for liability arising out of your unauthorized use of any of the Marks.
• G. Copyrighted Materials. You acknowledge and agree that we may authorize you to use certain copyrighted or copyrightable works (the "Copyrighted Materials"), including the Manual (as defined below). The Copyrighted Materials are our valuable property. Your rights to use the Copyrighted Materials are granted to you solely on the condition that you comply with the terms of this Agreement.

Your use of the Copyrighted Materials does not vest you with any interest other than the temporary, nonexclusive license to use the Copyrighted Materials granted in this Agreement. All rights that inure as a result of the use of the Copyrighted Materials belong solely to us.

H. Protection. You will sign any documents that we or our counsel deem necessary for the protection of the Copyrighted Materials or the Marks or to maintain their validity or enforceability, or to aid us, at our expense, in acquiring rights in or in registering any of the Marks or any trademarks, trade names, service marks, slogans, logos or emblems that we subsequently adopt.

4. INITIAL FRANCHISE FEE

• A. Initial Franchise Fee. Upon execution of this Agreement you will pay us a nonrefundable initial franchise fee (the "Initial Franchise Fee") as set forth in the Rider.
• B. No Refunds. The Initial Franchise Fee has been fully earned upon our signing of this Agreement and is nonrefundable in consideration of the expenses incurred by us in granting this franchise and for the lost or deferred opportunity to franchise others.

5. CONTINUING FEES

• A. Monthly Royalty Fee. On or about the 10th day of the month for the prior month, you will pay to us a non-refundable monthly royalty payment (the "Royalty Fee") equal to eight percent (8%) of the Gross Revenues generated in the preceding month by your Basecamp Studio.
• 1. Your obligation to pay us the Royalty Fee under the terms of this Agreement will begin on the date you open your Basecamp Studio. Your obligation to pay the Royalty Fee will remain in full force and effect throughout the term of this Agreement.
• 1. "Gross Revenues," shall mean the total amount of revenues generated from all business activities taking place by, through or at the Basecamp Studio, in the form of cash or credit, plus the fair market value of products delivered and services rendered to you, or to your designee, in consideration for products and services provided in, from, or in conjunction with your Basecamp Studio. There will be excluded from "Gross Revenues" bona fide refunds, credits given or allowed to members and other customers for the return of merchandise and amounts collected from members and other customers and remitted by you to any governmental taxing authority in satisfaction of sales taxes, however, chargebacks are not deducted from the calculation of Gross Revenues.
• B. Monthly Advertising and Marketing Fund Contribution. On or about the 10th day of each month, you will pay to us a non-refundable monthly "General Advertising and Marketing Fund Contribution" equal to two percent (2%) of the previous calendar month's Gross Revenues (the "General Advertising and Marketing Fund Contributions"). We may periodically increase the percentage amount General Advertising and Marketing Fund Contribution upon notice to you;

Source: Item 22 — CONTRACTS (FDD pages 61–62)