ransfer pursuant to Sections 10.2, 10.3, and 10.4, except for a transfer in accordance with Section 10.2(b), you will pay us a fee in the amount of $10,000 (the "Transfer Fee").

• (h) Renewal Fee. Shortly before the expiration of the Initial Term, if you decide to obtain a Renewal Franchise Agreement in accordance with Subsection 16.2(a), you must pay us a Renewal Fee equal to 50% of the then-current Initial Franchise Fee.
• (i) Our Attorneys' Fees. If after the Franchise Agreement is signed by the parties: (i) you request our written consent to any action of yours and we consult our attorney; or (ii) we have our attorney prepare a letter, a Notice of Default or a Notice of Termination to you, then you agree to reimburse us for our attorneys' fees and costs under these circumstances.
• (j) Fines for Non-Compliance. If we find you to be in violation of certain terms of this Agreement constituting a material default by you that would entitle us to terminate the Franchise Agreement, we will send you a letter setting forth the nature of the non-complying act and what steps you must take to cure the violation. We will also impose a fine of $250, provided that, if the default involves the offer or sale of unauthorized or prohibited products, the fine is $500 per day until you

cease such offer or sale. You must immediately cure the violation and pay the fine within 10 days of receipt of our notice of non-compliance. If you fail to cure and pay the fine in a timely manner, we reserve the right to exercise our rights under ARTICLE 11. These acts of non-compliance include the following:

• (i) If we see an unauthorized product for sale at your Premises;
• (ii) If you use the Stretch Zone name and logo in an inappropriate way;
• (iii) If a person providing stretching service is not certified by us, a $250 fine will be issued for every day the person continues to provide stretching services;
• (iv) If we find that your employees are not in uniform or otherwise complying with our dress code - $200 fine; or
• (v) If you receive an inspection report from us that reveals material violation or our operating standards.

The Manuals contains further information on other types of violations that are subject to fines. If there is a violation that has not been listed, the fine will be $250.

(k) Other Fees. There are other fees, and reimbursement and indemnification obligations on your part contained in this Agreement and disclosed in ITEM 6 of the FDD.

Section 3.2 PAYMENT SCHEDULE

Royalty Fees, Technology Fees, training fees, Advertising Contributions and Fines are automatically billed and paid when are due by processing through our POS system.

Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)