ANYTIME FITNESS FRANCHISE DISCLOSURE DOCUMENT

provided, however, that you will not be required to pay any initial franchise fee under any of those
agreements. You understand and agree that any and all Franchise Agreements will be construed
and exist independently of this Agreement. The continued existence of each Franchise
Agreement will be determined by the terms and conditions of such Franchise Agreement. Except
as specifically set forth in this Agreement, the establishment and operation of each Anytime
Fitness Center must be in accordance with the terms of the applicable Franchise Agreement.
4. Term. Unless sooner terminated in accordance with Section 5 ofthis Agreement, the
term of this Agreement and all rights granted to you will expire on the date that you sign the Franchise
Agreement for the last Anytime Fitness Center that is scheduled to be opened under the Development
Schedule.
5. Default and Termination. You will be deemed in default under this Agreement if you
breach any of the terms of this Agreement or if you or any "affiliate" of yours breaches any of the terms
of any Franchise Agreement or any other agreement that you or your affiliates have with us or our
affiliates. For purposes of this Agreement, an "affiliate" of any person will be any person or entity that
controls that person, is under the control of that person, or is under common control with that person.
A. All rights granted in this Agreement immediately terminate upon written notice without
opportunity to cure if: (i) you become insolvent, commit any affirmative action of insolvency or file any
action or petition of insolvency, (ii) a receiver (permanent or temporary) of your property is appointed by
a court of competent authority, (iii) you make a general assignment or other similar arrangement for the
benefit of your creditors, (iv) a final judgment against you remains unsatisfied of record for thirty (30)
days or longer, (v) execution is levied against your business or property, or the business or property of
any of your affiliates that have entered into Franchise Agreements with us, (vi) suit to foreclose any lien
or mortgage against premises or equipment is instituted against you and not dismissed within thirty (30)
days, or is not in the process of being dismissed, (vii) you fail to meet your development obligations set
forth in the Development Schedule, (viii) you or any of your affiliates open any Anytime Fitness Center
before that person or entity has signed a Franchise Agreement with us for that center in the form we
provide, (ix) you fail to comply with any other provision ofthis Agreement, or your or any of your
affiliates fail to comply with any other agreement you or they have with us or our affiliates and do not
correct the failure within thirty (30) days after written notice of that failure is delivered to the breaching
party (except that if the failure to comply is the third failure to comply with any provision of any
agreement that you or any of your affiliates have with us or an affiliate of ours within twelve (12)
consecutive months, then we need not provide any opportunity to cure the default), or (x) we have
delivered to you or any of your affiliates a notice of termination of a Franchise Agreement in accordance
with its terms and conditions.
6. Rights and Duties of Parties Upon Termination or Expiration. Upon termination or
expiration of this Agreement, all rights granted to you will automatically terminate, and:
A. All remaining rights granted to you to develop Anytime Fitness Centers under this
Agreement will automatically be revoked and will be null and void. You will not be entitled to any
refund of any fees.
B. You must within five (5) business days of the termination or expiration pay all sums
owing to us and our affiliates. In addition, you agree to pay as fair and reasonable liquidated damages
(but not as a penalty) an amount equal to Ten Thousand Dollars ($10,000) for each undeveloped Anytime
Fitness Center. You agree that this amount is in addition to the Development Fees paid under this
Agreement, and is for lost revenues from Monthly Fees (as defined in the Franchise Agreement) and other
amounts payable to us, including the fact that you were holding the development rights for those Anytime
Fitness Centers and precluding the development of certain Anytime Fitness Centers in the Development
Territory, and that it would be difficult to calculate with certainty the amount of damage we wiII incur.
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