Exhibit 10.2

MANAGEMENT AGREEMENT

Dated as of August 1, 2018

among

Planet Fitness Master Issuer LLC,

Planet Fitness SPV Guarantor LLC,

certain Subsidiaries of Planet Fitness Master Issuer LLC

party hereto,

Planet Fitness Holdings, LLC,

as Manager,

and

Citibank, N.A.,

as Trustee

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TABLE OF CONTENTS

 

     Page  

ARTICLE 1 DEFINITIONS

     2  

SECTION 1.1 Certain Definitions

     2  

SECTION 1.2 Other Defined Terms

     15  

SECTION 1.3 Other Terms

     15  

SECTION 1.4 Computation of Time Periods

     15  

ARTICLE 2 ADMINISTRATION AND SERVICING OF SECURITIZED ASSETS

     15  

SECTION 2.1 Planet Fitness Holdings, LLC to Act as the Manager

     15  

SECTION 2.2 Advances

     18  

SECTION 2.3 Deposit Accounts

     18  

SECTION 2.4 Records

     18  

SECTION 2.5 Administrative Duties of Manager

     19  

SECTION 2.6 No Offset

     20  

SECTION 2.7 Compensation

     20  

SECTION 2.8 Indemnification

     20  

SECTION 2.9 Nonpetition Covenant

     22  

SECTION 2.10 Advertising Funds

     22  

SECTION 2.11 Franchisor Consent

     23  

SECTION 2.12 Appointment of Sub-Managers

     23  

SECTION 2.13 Letter of Credit Reimbursement Agreement

     24  

ARTICLE 3 STATEMENTS AND REPORTS

     24  

SECTION 3.1 Reporting by the Manager

     24  

SECTION 3.2 Appointment of Independent Auditors

     25  

SECTION 3.3 Annual Accountants’ Reports

     25  

SECTION 3.4 Available Information

     26  

ARTICLE 4 THE MANAGER

     26  

SECTION 4.1 Representations and Warranties Concerning the Manager

     26  

SECTION 4.2 Existence; Status as Manager

     29  

SECTION 4.3 Performance of Obligations

     29  

SECTION 4.4 Merger; Resignation and Assignment

     32  

SECTION 4.5 Taxes

     33  

SECTION 4.6 Notice of Certain Events

     33  

SECTION 4.7 Capitalization

     34  

 

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SECTION 4.8 Franchise Law Determination

    34  

SECTION 4.9 Maintenance of Separateness

    34  

SECTION 4.10 Non-Securitization Debt Cap

    35  

SECTION 4.11 Special Provisions as to Securitization IP

    35  

SECTION 4.12 Restrictions on Dispositions and Liens

    36  

SECTION 4.13 No Competition

    36  

ARTICLE 5 REPRESENTATIONS, WARRANTIES AND COVENANTS AS TO NEW ASSETS

    37  

SECTION 5.1 Representations and Warranties Made in Respect of New Assets

    37  

SECTION 5.2 Covenants in Respect of New Collateral

    43  

SECTION 5.3 Securitization IP

    44  

ARTICLE 6 [RESERVED]

    44  

ARTICLE 7 DEFAULT

    44  

SECTION 7.1 Manager Termination Events

    44  

SECTION 7.2 Disentanglement

    47  

SECTION 7.3 Intellectual Property

    48  

SECTION 7.4 No Effect on Other Parties

    48  

SECTION 7.5 Rights Cumulative

    49  

ARTICLE 8 CONFIDENTIALITY

    49  

SECTION 8.1 Confidentiality

    49  

ARTICLE 9 MISCELLANEOUS PROVISIONS

    50  

SECTION 9.1 Termination of Agreement

    50  

SECTION 9.2 Amendment

    50  

SECTION 9.3 Amendments to Other Agreements

    51  

SECTION 9.4 Acknowledgement

    51  

SECTION 9.5 Governing Law; Waiver of Jury Trial; Jurisdiction

    52  

SECTION 9.6 Notices

    52  

SECTION 9.7 Severability of Provisions

    53  

SECTION 9.8 Delivery Dates

    53  

SECTION 9.9 Limited Recourse

    53  

SECTION 9.10 Binding Effect; Limited Rights of Others

    53  

SECTION 9.11 Article and Section Headings

    53  

SECTION 9.12 Counterparts

    53  

SECTION 9.13 Entire Agreement

    54  

SECTION 9.14 Concerning the Trustee

    54  

SECTION 9.15 Joinder of Additional Securitization Entities

    54  

 

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EXHIBIT A – JOINDER AGREEMENT

EXHIBIT B-1 – POWER OF ATTORNEY (FRANCHISOR)

EXHIBIT B-2 – POWER OF ATTORNEY (SECURITIZATION ENTITY)

 

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MANAGEMENT AGREEMENT

This MANAGEMENT AGREEMENT, dated as of August 1, 2018 (this “Agreement”), is
entered into by and among Planet Fitness Master Issuer LLC, a Delaware limited
liability company (the “Master Issuer”), Planet Fitness Franchising LLC, a
Delaware limited liability company (the “Franchisor”), Planet Fitness
Distribution LLC, a Delaware limited liability company (the “Equipment
Distributor”), Planet Fitness Assetco LLC, a Delaware limited liability company
(“Planet Fitness Assetco”), Planet Fitness SPV Guarantor LLC, a Delaware limited
liability company (the “Master Issuer Parent”), Planet Fitness Holdings, LLC, a
New Hampshire limited liability company (“Planet Fitness Holdings”), as Manager
(in such capacity, together with its successors and assigns, the “Manager”), and
Citibank, N.A., not in its individual capacity but solely as trustee (the
“Trustee”), together with any other Securitization Entity that becomes party to
this Agreement by execution of a joinder substantially in the form attached
hereto as Exhibit A. For all purposes of this Agreement, capitalized terms used
herein but not otherwise defined herein shall have the meanings ascribed thereto
in Annex A to the Base Indenture (as defined below).

RECITALS

WHEREAS, the Master Issuer has entered into a Base Indenture (as amended,
restated, supplemented or otherwise modified from time to time, exclusive of any
Series Supplements, the “Base Indenture” and, together with all Series
Supplements, the “Indenture”), dated as of the date of this Agreement, with the
Trustee, pursuant to which the Master Issuer shall issue Series of Notes from
time to time, on the terms described therein;

WHEREAS, pursuant to the Guarantee and Collateral Agreement, the Securitization
Entities other than the Master Issuer will be guaranteeing the obligations of
the Master Issuer under the Notes;

WHEREAS, pursuant to the Base Indenture and the Guarantee and Collateral
Agreement, as security for the indebtedness represented by the Notes, the Master
Issuer and the other Securitization Entities are and will be granting to the
Trustee, on behalf of the Secured Parties, a security interest in the
Collateral;

WHEREAS, pursuant to the NAF Servicing Agreement dated as of the date hereof, by
and between the Manager and NAF (the “NAF Servicing Agreement”), the Manager has
agreed to manage the Advertising Fees received by NAF in accordance with the
advertising provisions of the Franchise Agreements or otherwise;

WHEREAS, each of the Master Issuer and the other Securitization Entities desires
to have the Manager enforce its rights and powers and perform its duties and
obligations under the Managed Documents to which it is party in accordance with
the Managing Standard;

WHEREAS, each of the Securitization Entities desires to have the Manager enter
into certain agreements and acquire certain assets from time to time on its
behalf, in each case in accordance with the Managing Standard;

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WHEREAS, the Franchisor desires to appoint the Manager as its agent for
providing intellectual property development, enforcement, management, licensing,
contract administration Services, and any other duties or Services in connection
with the maintenance of the Securitization IP in accordance with the Managing
Standard;

WHEREAS, the Franchisor desires to appoint the Manager as its agent to enforce
its rights and powers and perform its duties and obligations under (i) the
Franchise Agreements and the Area Development Agreements to which the Franchisor
is a party and (ii) the Securitized Authorized Vendor Contracts;

WHEREAS, the Equipment Distributor desires to appoint the Manager as its agent
to perform the Equipment Distribution Services;

WHEREAS, Planet Fitness Assetco desires to appoint the Manager as its agent to
perform (i) the Securitized Lease Services and (ii) the Securitized
Corporate-Owned Store Services;

WHEREAS, the Manager desires to enforce such rights and powers and perform such
obligations and duties, all in accordance with the Managing Standard; and

WHEREAS, each of the Master Issuer and the other Securitization Entities desires
to enter into this Agreement to provide for, among other things, the managing of
the respective rights, powers, duties and obligations of the Master Issuer and
the other Securitization Entities, as applicable, under or in connection with
the Securitized Assets by the Manager, all in accordance with the Managing
Standard.

NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.1 Certain Definitions. Capitalized terms used herein but not otherwise
defined herein or in Annex A to the Base Indenture shall have the following
meanings:

“Ad Fund Manager Advances” has the meaning set forth in SECTION 2.10 hereof.

“Advertising Fees” has the meaning set forth in SECTION 2.10 hereof.

“Advertising Fund Account” has the meaning set forth in SECTION 2.10 hereof.

“Agreement” has the meaning set forth in the preamble hereto.

“Base Indenture” has the meaning set forth in the recitals hereto.

“Change in Management” means more than 50% of the Leadership Team is terminated
and/or resigns within twelve (12) months after the date of the occurrence of a
Change of Control;

 

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provided, in each case, that termination and/or resignation of such officer will
not include (i) a change in such officer’s status in the ordinary course of
succession so long as such officer remains affiliated with Planet Fitness Inc.,
a Delaware corporation (“Holdco”) or its Subsidiaries as an officer or director,
or in a similar capacity, (ii) retirement of any officer or (iii) death or
incapacitation of any officer.

“Change of Control” means an event or series of events by which:

(a)    individuals who on the Closing Date constituted the Board of Directors of
Holdco, together with any new directors whose election by the Board of Directors
or whose nomination for election by the equity holders of Holdco was approved by
a majority of the directors then still in office who were either directors or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority of the Board of Directors of Holdco then in
office; or

(b)    any “person” or “group” (as such terms are used for purposes of Sections
13(d) and 14(d) of the 1934 Act) is or becomes the “beneficial owner” (as such
term is used in Rule 13d-3 under the 1934 Act), directly or indirectly, of more
than 50% of the total voting power of the Voting Stock of Holdco.

For purposes of this definition, a Person will not be deemed to have beneficial
ownership of voting power of Voting Stock subject to a stock purchase agreement,
merger agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.

“Current Practice” means, in respect of any action or inaction, the practices,
standards and procedures of the Non-Securitization Entities as performed on or
that would have been performed immediately prior to the Closing Date.

“Confidential Information” means information (including Know-How) that is
confidential and proprietary to its owner, or that is personal information, and
that is disclosed to any party to this Agreement whether in writing or disclosed
orally, and whether or not designated as confidential.

“Discloser” has the meaning set forth in Section 8.1(a) hereof.

“Disentanglement” has the meaning set forth in Section 7.2(a) hereof.

“Disentanglement Services” has the meaning set forth in Section 7.2(a) hereof.

“Disentanglement Period” has the meaning set forth in Section 7.2(c) hereof.

“Equipment Distribution Services” means performing all of the duties and
obligations of the Equipment Distributor in connection with the Securitized
Equipment Supply Agreements and the placement, resale and distribution of
fitness equipment to Franchisees, Planet Fitness Assetco and Non-Securitization
Entities for use in the Retained Corporate-Owned Stores, including, among other
things:

(a)    collecting the Equipment Revenue Payments;

 

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(b)    negotiating supply agreements with third-party equipment manufacturers to
purchase fitness equipment;

(c)     sub-licensing the applicable Securitization IP to third-party equipment
manufacturers;

(d)    setting operational standards for fitness equipment and any other
activities necessary or desirable to cause the acquisition of fitness equipment;

(e)    causing all Equipment Revenue Payments to be deposited into the
applicable Equipment Distributor Operating Account in accordance with the terms
of the Indenture; and

(f)    withdrawing available amounts on deposit in the applicable Equipment
Distributor Operating Account to pay the Equipment Distribution Operating
Expenses that are incurred or committed to be paid by the Equipment Distributor
relating to the performance of the Equipment Distributor’s obligations under the
Securitized Equipment Supply Agreements and the placement, resale and
distribution of fitness equipment to Franchisees, Planet Fitness Assetco and
Non-Securitization Entities for use in the Retained Corporate-Owned Stores, such
as cost of goods sold (including all payments for the purchase and delivery of
equipment under Equipment Supply Agreements or otherwise), placement, repairs
and maintenance expenses to the extent not capitalized, insurance (including
self-insurance), any advertising expenses, equipment placement expenses, rebates
payable in connection with purchases of fitness equipment, litigation and
settlement costs relating to the Securitized Assets and other operating costs
included in cost of sales.

“ERISA Event” means (a) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Plan (other
than those events as to which the thirty day notice period is waived); (b) the
failure to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA with respect to any Single-Employer Plan (whether or not
waived in accordance with Section 412(c) of the Code) or the failure to make by
its due date a required installment under Section 430 of the Code and
Section 302(e) of ERISA with respect to any Single-Employer Plan; (c) the
provision by the administrator of any Single-Employer Plan pursuant to
Section 4041(a)(2) of ERISA of a written notice of intent to terminate such
Single-Employer Plan in a standard termination described in Section 4041(b) of
ERISA or a distress termination described in Section 4041(c) of ERISA; (d) the
complete or partial withdrawal by the Manager, or any company in the Controlled
Group of the Manager, from any Plan with two or more contributing sponsors or
the termination of any such Plan, in each case, which results in liability
pursuant to Section 4063 or 4064 of ERISA; (e) formal written notice from the
PBGC of its intent to commence proceedings to terminate any Plan; (f) the
imposition of liability on the Manager, or any company in the Controlled Group
of the Manager, pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (g) the filing of a material claim
(other than routine claims for benefits) against any Plan or the assets thereof,
or against the Manager or any company in the Controlled Group of the Manager, in
connection with any Plan; (h) receipt from the Internal Revenue Service of
notice of the failure of any Plan to qualify under Section 401(a) of the Code or
the failure of any trust forming part of any Plan to qualify for exemption from
taxation under Section 501(a) of the Code; (i) the imposition of a lien in favor
of the PBGC or a Plan pursuant

 

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to Section 430(k) of the Code or pursuant to Section 302(f) of ERISA with
respect to any Plan or (j) the complete or partial withdrawal by the Manager or
any member of its Controlled Group from any Multiemployer Plan that has resulted
or could reasonably be expected to result in a material liability to the Manager
under ERISA.

“Franchisee Insurance Policy” means any insurance policy or policies maintained
by a Franchisee in accordance with the requirements of a Franchise Agreement
held by the Franchisor.

“Indemnification Amounts Threshold Amount” means, for any date of determination,
(i) if the Threshold DSCR is greater than or equal to 2.75x, $1,000,000 and
(ii) otherwise, $500,000.

“Indemnitee” has the meaning set forth in Section 2.8 hereof.

“Independent Auditors” has the meaning set forth in Section 3.2 hereof.

“IP Services” means performing the Franchisor’s obligations and exercising the
Franchisor’s rights under the IP License Agreements (and under any other
agreements pursuant to which the Franchisor licenses the use of any
Securitization IP, such as Franchise Agreements) and acquiring, developing,
managing, maintaining, protecting, enforcing, defending, licensing, sublicensing
and undertaking such other duties and services as may be necessary in connection
with the Securitization IP, on behalf of the Franchisor, in each case in
accordance with and subject to the standards imposed by the IP License
Agreements, this Agreement (including the Managing Standard, unless the
Franchisor determines, in its sole discretion, that additional action is
necessary or desirable in furtherance of the protection of the Securitization
IP, in which case the Manager will perform such IP Services and additional
related services as are reasonably requested by the Franchisor), the Indenture,
the other Related Documents and the Managed Documents. The IP Services may
include among other things:

(a)    conceiving, developing, creating and/or acquiring After-Acquired
Securitization IP on behalf of Franchisor and ensuring all future After-Acquired
Securitization IP otherwise created, developed or acquired is assigned to and
inures to the benefit of the Franchisor;

(b)    maintaining, enforcing and defending the Franchisor’s rights in and to
the Securitization IP, including filing, prosecuting and maintaining
applications therefor;

(c)    monitoring third party use and registration of Securitization IP (or
other Intellectual Property which may infringe, misappropriate or dilute the
Securitization IP);

(d)    confirming and enforcing the Franchisor’s legal title in and to the
Securitization IP, and exercising the Franchisor’s rights and performing its
obligations under each IP License Agreement;

(e)    applying for the registration of Copyrights;

 

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(f)    prosecuting applications for, and maintaining registrations and issuances
of, any Intellectual Property included in the Securitization IP, or abandoning
such application or registrations;

(g)    taking actions necessary to protect, police and enforce the
Securitization IP from potential imitation, infringement, dilution,
misappropriation and/or unauthorized use of the Securitization IP;

(h)    performing such functions and duties, and preparing and filing such
documents, as are required under the Indenture or the Guarantee and Collateral
Agreement to be performed, prepared and/or filed by the Franchisor (including
with respect to the Franchisor’s rights and obligations under the IP License
Agreements and any Related Documents, monitoring the licensee’s use of each
licensed Trademark and the goods and services offered in connection with such
Trademarks, rendering any approvals (or disapprovals) that are required under
the applicable license agreement(s), and employing reasonable means to ensure
that any use of any such Trademarks by any such licensee satisfies the standards
and usage provisions of the applicable license agreement);

(i)    taking such actions on behalf of the Franchisor as the Franchisor may
reasonably request, or a licensee under an IP License Agreement may request,
that are expressly required by the IP License Agreements;

(j)    paying or arranging for payment or discharge of taxes and Liens levied on
or threatened against the Securitization IP;

(k)    entering, or causing the Franchisor to enter, into license or sublicense
agreements with any Securitization Entity or Non-Securitization Entity, and
granting such Securitization Entity the right to use or sublicense the
Securitization IP, which agreements will also include that all After-Acquired
Securitization IP created thereby will be assigned and inure to the benefit of
the Franchisor, and, where applicable, the Franchisor will be listed as a
third-party beneficiary (without any duties, obligations or liabilities) under
such license or sublicense agreements;

(l)    obtaining licenses of third-party Intellectual Property for use and
sublicense in connection with the Franchise business, or the Corporate-Owned
Store business and the other assets of the Securitization Entities;

(m)    sublicensing the Securitization IP to suppliers, manufacturers,
advertisers and other service providers in connection with the provision of
products and services for use in the Franchise business and the Corporate-Owned
Store business;

(n)    with respect to Trade Secrets and other confidential information of the
Franchisor, taking reasonable measures to maintain confidentiality and to
prevent non-confidential or unauthorized disclosures; and

(o)    preparing for execution by the Franchisor or any other appropriate Person
all documents, certificates and other filings as the Franchisor is required to
prepare and/or file under the terms of the IP License Agreements or the
Indenture (including (i) confirming the

 

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Franchisor’s legal title in and to any or all of the Securitization IP,
including obtaining written assignments of Securitization IP to the Franchisor
and recording transfers of title in the appropriate intellectual property
registry in the Perfected Countries and any Additional Perfected Country,
following such time that it becomes an Additional Perfected Country, and, in the
Manager’s discretion, elsewhere in accordance with the Managing Standard and
(ii) preparing, executing and delivering grants of security interests or any
similar instruments as the Securitization Entities or the Control Party may,
from time to time, reasonably request (consistent with the obligations of the
Franchisor to perfect the Trustee’s Lien on the Securitization IP in the United
States and only to those issuances and registrations of Trademarks, Patents, and
Copyrights included in the Securitization IP in Canada and, to the extent that
the Franchisor owns any Securitization IP registered under the laws of any
country other than the United States and Canada, any Additional Perfected
Country, following such time that it becomes an Additional Perfected Country)
that are intended to evidence such security interests in the Securitization IP
and recording such grants or other instruments with the relevant Governmental
Authority).

“Leadership Team” means the “executive officers” (as defined in Rule 3b-7 of the
1934 Act) of Holdco immediately prior to the date of the occurrence of a Change
of Control.

“Management Fee” means with respect to each Interim Allocation Date, the amount
determined by dividing (i) an amount equal to the sum of (A) a $15,000,000 base
fee, plus (B) (1) $20,000 for each Franchise Store and Retained Corporate-Owned
Store, in each case, located in the United States, (2) $20,000 for each
International Franchise Store with respect to which the Franchise Agreement is
held by the Franchisor or another Securitization Entity and (3) $40,000 for each
Corporate-Owned Store held by Planet Fitness Assetco or another Securitization
Entity; by 24; provided that the Management Fee will be adjusted on each Interim
Allocation Date to reflect any change to the number of Franchise Stores, and
Corporate-Owned Stores held by Planet Fitness Assetco, as set forth in the
related Interim Manager’s Certificate (which change will be effective with
respect to the Management Fee payable on the Interim Allocation Date immediately
succeeding the delivery of such Interim Manager’s Certificate, it being agreed
that the Manager will update the number of Franchise Stores, and Corporate-Owned
Stores as often as reasonably practicable but at least once in each fiscal
quarter); provided, further, that (X) each of the amounts set forth in clauses
(i)(A) and (i)(B) will be subject to successive 2.0% annual increases on the
first day of the Quarterly Collection Period that commences immediately
following each anniversary of the Closing Date and that the incremental
increased portion of such fees will be payable only to the extent that the sum
of the amounts set forth in clauses (i)(A) and (i)(B) as so increased will not
exceed 35% of the aggregate Retained Collections over the preceding four
(4) Quarterly Collection Periods or (Y) a new formula may be designated by the
Master Issuer in writing to the Trustee, so long as (a) the Master Issuer
certifies in writing to the Trustee that (i) the formula was determined in
consultation with the Back-Up Manager, and (ii) the Master Issuer discloses the
formula in each Quarterly Noteholders’ Report and (b) the Trustee has received
written confirmation from the Master Issuer that the Rating Agency Condition
with respect to each Series of Notes Outstanding has been satisfied with respect
to such new formula.

“Manager” has the meaning set forth in the preamble hereto.

 

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“Manager Advances” means any advance of funds made by the Manager to, or on
behalf of, a Securitization Entity in connection with the operation of the
Franchise Store Business, Securitized Corporate-Owned Store Business and other
Securitized Assets.

“Manager Advance Reimbursement Amount” means, as of any date, the amount of any
unreimbursed Manager Advances and any accrued interest thereon.

“Managing Standard” means standards that (a) are consistent with Current
Practice or, to the extent of changed circumstances, practices, technologies,
strategies or implementation methods, consistent with the standards as the
Manager would implement or observe if the Securitized Assets were owned by the
Manager at such time; (b) are consistent with Ongoing Practice; (c) will enable
the Manager to comply in all material respects with all of the duties and
obligations of the Securitization Entities under the Related Documents, the
Managed Documents; (d) are in material compliance with all applicable
Requirements of Law; and (e) with respect to the use and maintenance of the
Securitization Entities’ rights in and to the Securitization IP, are consistent
with the standards imposed by the IP License Agreements for the Franchisor.

“Master Issuer” has the meaning set forth in the preamble hereto.

“Master Issuer Parent” has the meaning set forth in the preamble hereto.

“NAF Servicing Agreement” has the meaning set forth in the recitals hereto.

“New Asset Addition Date” means, with respect to any New Asset, the earliest of
(i) the date on which such New Asset is acquired by the applicable
Securitization Entity, (ii) the later of (a) the date upon which the closing
occurs under the applicable contract giving rise to such New Asset and (b) the
date upon which all of the diligence contingencies, if any, in the contract for
purchase of the applicable New Asset expire and the Securitization Entity
acquiring such New Asset no longer has the right to cancel such contract and
(iii) if such New Asset is a New Franchise Agreement, New Area Development
Agreement or Franchisee Note, the date on which the related Securitization
Entity begins receiving payments from the applicable Franchisee in respect of
such New Asset.

“Notes” has the meaning set forth in the recitals hereto.

“Offering Memorandum” means the final private placement memorandum, dated as of
July 19, 2018, relating to the Notes.

“Ongoing Practice” means, in respect of any action or inaction, practices,
standards and procedures that are at least as favorable or beneficial to the
Securitization Entities as the practices, standards and procedures of any
Non-Securitization Entities as performed with respect to any new or changed
circumstances arising after the Closing Date, such as any additional store
concept or any other new asset, including Intellectual Property assets, similar
to those owned by a Securitization Entity that is owned or operated by such
Non-Securitization Entity.

“Other Assets” has the meaning set forth in Section 5.1(a)(i) hereof.

 

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“Post-Opening Services” means the services required to be performed under the
applicable Franchise Documents by the applicable Securitization Entities after
the opening of a Franchise Store, in each case in accordance with and subject to
the terms of this Agreement (including, for the avoidance of doubt, the Managing
Standard), the Indenture, the other Related Documents and the Managed Documents,
including, as may be required under the applicable Franchise Document,
(a) providing the applicable Franchisee with the standards established or
approved by the Franchisor for use by Franchisees; (b) maintaining a system-wide
advertising program and administering the development of all national
advertising and promotional programs for the Planet Fitness Brand and the
Stores; (c) inspecting such Franchise Store; (d) providing such Franchisee with
the Manager’s ongoing operating standards and materials designed for use in the
Franchise Stores; and (e) such other post-opening services as are required to be
or may be performed under applicable Franchise Documents.

“Power of Attorney” means the authority granted by the Franchisor or
Securitization Entity (other than the Franchisor), respectively, to the Manager
pursuant to a Power of Attorney in substantially the forms set forth hereto as
Exhibit B-1 and Exhibit B-2, respectively.

“Pre-Opening Services” means the services required to be performed under the
applicable Franchise Documents by the applicable Securitization Entities prior
to the opening of a Franchise Store, in each case in accordance with and subject
to the terms of this Agreement (including, for the avoidance of doubt, the
Managing Standard), the Indenture, the other Related Documents and the Managed
Documents, including, as required under the applicable Franchise Document,
(a) providing the applicable Franchisee with standards for the dimensions,
design, image, interior layout, decor, fixtures, equipment, signs, furnishings
and color scheme and other requirements or suggestions for such Franchise Store
and the approval of locations meeting such standards; (b) providing such
Franchisee with the Manager’s lists of the start-up inventory, furniture,
fixtures, software, equipment and supplies for use in the Franchise Stores; and
(c) providing such Franchisee with such other assistance in the pre-opening,
opening and initial operation of such Franchise Store, as is required to be
provided under applicable Franchise Documents.

“Recipient” has the meaning set forth in Section 8.1(a) hereof.

“Securitized Corporate-Owned Store Services” means performing all of the duties
and obligations of Planet Fitness Assetco necessary or desirable in connection
with the operations and ownership of the Contributed Securitized Corporate-Owned
Stores and New Securitized Corporate-Owned Stores, including, among other
things:

(a)    collecting revenues generated by the Contributed Securitized
Corporate-Owned Stores and New Securitized Corporate-Owned Stores;

(b)     maintaining appropriate levels of property and casualty insurance and
performing any other activities necessary or desirable for the operation of the
Contributed Securitized Corporate-Owned Stores and New Securitized
Corporate-Owned Stores;

(c)    developing, acquiring and disposing of New Securitized Corporate-Owned
Stores and Contributed Securitized Corporate-Owned Stores, in each case as
permitted or required under the Related Documents;

 

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(d)    causing all revenue generated from the operation of the Contributed
Securitized Corporate-Owned Stores and New Securitized Corporate-Owned Stores to
be deposited into the applicable Securitized Corporate-Owned Store Account in
accordance with the terms of the Indenture;

(e)    withdrawing available amounts on deposit in the applicable Securitized
Corporate-Owned Store Account to pay the Store Operating Expenses that are
incurred or committed to be paid by Planet Fitness Assetco relating to the
operation of the Contributed Securitized Corporate-Owned Stores and New
Securitized Corporate-Owned Stores, such as the cost of merchandise sold, food,
supplies, utilities, point of sale fees, payments in respect of labor costs
(including wages, incentive compensation, workers’ compensation-related expenses
and other labor-related expenses for employees of Securitized Corporate-Owned
Stores), repair and maintenance expenses to the extent not capitalized,
insurance (including self-insurance), local advertising expenses, amounts in
respect of sale Taxes and personal property Taxes, litigation and settlement
costs relating to the Securitized Assets, other store operating costs,
Securitized Corporate-Owned Store IP License Fees, payments pursuant to
Securitized Franchisee Leases and Pass-Through Amounts;

(f)    hiring, training and managing employees (or supervising the hiring,
training and managing of employees);

(g)    negotiating with vendors, suppliers, distributors and other third parties
on behalf of Planet Fitness Assetco in connection with the operation of
Contributed Securitized Corporate-Owned Stores and New Securitized
Corporate-Owned Stores;

(h)    selecting and acquiring certain Contributed Corporate-Owned Store Assets
such as furnishings and fitness equipment in accordance with the terms of this
Agreement and the other Related Documents;

(i)    disposing of certain Contributed Corporate-Owned Store Assets in
accordance with the terms of this Agreement and the other Related Documents;

(j)    implementing Renovation projects at Contributed Securitized
Corporate-Owned Stores and New Securitized Corporate-Owned Stores on behalf of
Planet Fitness Assetco; and

(k)    performing the duties and obligations and enforcing the rights of Planet
Fitness Assetco pursuant to the terms of the Managed Documents to which it is a
party.

“Securitized Lease Services” means acquiring, developing, managing, maintaining,
protecting, enforcing, defending, leasing and undertaking, or causing to be
undertaken, such duties and services as may be necessary in connection with the
Securitized Leases, on behalf of Planet Fitness Assetco, in each case in
accordance with and subject to the terms of this Agreement (including, for the
avoidance of doubt, the Managing Standard), the Indenture, the other Related
Documents and the Managed Documents, as agent for Planet Fitness Assetco,
including, without limitation, the following activities:

(a)    the negotiation, execution and recording (as appropriate) of leases,
subleases, deeds and other contracts and agreements relating to the Securitized
Leases;

 

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(b)     the management of the Securitized Leases on behalf of Planet Fitness
Assetco, including (i) the enforcement and exercise of Planet Fitness Assetco’s
rights under each lease included in the Securitized Leases, (ii) the payment,
extension, renewal, modification, adjustment, prosecution, defense, compromise
or submission to arbitration or mediation of any obligation, suit, liability,
cause of action or claim, including taxes, relating to any Securitized Leases
and (iii) the collection of any amounts payable to Planet Fitness Assetco and
the payment of amounts payable by Planet Fitness Assetco under the Securitized
Leases, including rent;

(c)    causing Planet Fitness Assetco to (i) acquire and enter into agreements
to acquire Securitized Leases and (ii) sell, assign, transfer, encumber or
otherwise dispose of all or any portion of the Securitized Leases in accordance
with the Management Agreement and the Indenture;

(d)    the performance of environmental evaluation and remediation activities on
any Securitized Lease owned or leased by Planet Fitness Assetco as deemed
appropriate by the Manager or as otherwise required under applicable
Requirements of Law;

(e)    making or causing to be made all repairs and replacements to the existing
improvements and the construction of new improvements on the Securitized Leases;

(f)    the employment of agents, managers, brokers or other Persons necessary or
appropriate to acquire, dispose of, maintain, own, lease, manage and operate the
Securitized Leases;

(g)    paying or causing to be paid any and all taxes, charges and assessments
that may be levied, assessed or imposed upon any of the Securitized Leases or
contesting the same in good faith to the extent required by the Securitized
Leases;

(h)    administering tenant improvement allowances and similar amounts (if any)
received from landlords with respect to the Contributed Corporate-Owned Store
Leases; and

(i)    all other actions or decisions relating to the acquisition, disposition,
amendment, termination, maintenance, ownership, leasing, sub-leasing, management
and operation of the Securitized Leases.

“Services” means the servicing and administration by the Manager of the
Securitized Assets, in each case in accordance with and subject to the terms of
this Agreement (including the Management Standard), the Indenture, the other
Related Documents and the Managed Documents, for the applicable Securitization
Entity, including, without limitation:

(a)    calculating and compiling information required in connection with any
report or certificate to be delivered pursuant to the Related Documents;

(b)    preparing and filing all tax returns and tax reports required to be
prepared by any Securitization Entity;

 

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(c)    paying or causing to be paid or discharged, in each case from funds of
the Securitization Entities, any and all taxes, charges and assessments
attributable to and required to be paid under applicable Requirements of Law by
any Securitization Entity;

(d)    performing the duties and obligations of, and exercising and enforcing
the rights of, the Securitization Entities under the Related Documents,
including performing the duties and obligations of each applicable
Securitization Entity under the IP License Agreements;

(e)    taking those actions that are required under the Related Documents and
Requirements of Law to maintain continuous perfection (where applicable) and
priority (subject to Permitted Liens and the exclusions from perfection
requirements under the Indenture, the Guarantee and Collateral Agreement and the
Related Documents) of any Securitization Entity’s and the Trustee’s respective
interests in the Collateral;

(f)    making or causing the collection of amounts owing under the terms and
provisions of each Managed Document and the Related Documents, including
managing (i) the applicable Securitization Entities’ rights and obligations
under the Franchise Agreements, the Contributed Area Development Agreements, any
Franchisee Notes, the Contributed Securitized Equipment Supply Agreements and
the Contributed Securitized Authorized Vendor Contracts (including performing
Pre-Opening Services and Post-Opening Services) and (ii) the right to approve
amendments, waivers, modifications and terminations of (including extensions,
modifications, write-downs and write-offs of obligations owing under) Franchise
Documents and other Managed Documents (which amendments to any Contributed
Franchise Agreements may be effected by replacing such Contributed Franchise
Agreement with a New Franchise Agreement on the then-current form of the
applicable Contributed Franchise Agreement (which New Franchise Agreement may be
executed by a different Securitization Entity than is party to such existing
Contributed Franchise Agreement)) and to exercise all rights of the applicable
Securitization Entities under such Franchise Documents and other Managed
Documents;

(g)    performing due diligence with respect to, selecting and approving new
Franchisees, performing due diligence with respect to and approving extensions
of credit to Franchisees pursuant to Franchisee Notes and providing personnel to
manage the due diligence, selection and approval process;

(h)    preparing New Franchise Agreements, New Area Development Agreements,
Franchisee Notes, New Securitized Equipment Supply Agreements and New
Securitized Authorized Vendor Contracts, including, among other things, adopting
variations to the forms of agreements used in documenting such agreements and
preparing and executing documentation of assignments, transfers, terminations,
renewals, site relocations and ownership changes, in all cases, subject to and
in accordance with the terms of the Related Documents;

(i)    evaluating and approving assignments of Franchise Agreements, Contributed
Area Development Agreements and any Franchisee Notes (and related documents) to
third-party franchisee candidates or existing Franchisees and, in accordance
with the Managing Standard, arranging for the assignment of Reacquired Stores to
a Non-Securitization Entity until such time as the applicable store is
re-franchised to a third-party Franchisee;

 

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(j)    preparing and filing franchise disclosure documents with respect to New
Area Development Agreements and New Franchise Agreements to comply, in all
material respects, with applicable Requirements of Law;

(k)    complying with franchise industry-specific government regulation and
applicable Requirements of Law;

(l)    making Manager Advances in its sole discretion;

(m)     administering the Advertising Fund Account and the Management Accounts;

(n)    performing the duties and obligations and enforcing the rights of the
Securitization Entities under the Managed Documents, including entering into new
Managed Documents from time to time;

(o)    arranging for legal services with respect to the Securitized Assets,
including with respect to the enforcement of the Managed Documents;

(p)    arranging for or providing accounting and financial reporting services;

(q)    ensuring that suppliers and vendors to the Planet Fitness System meet
Franchisor’s standards;

(r)    performing the Equipment Distribution Services, including acquiring
fitness equipment for resale to Franchisees and Non-Securitization Entities in
respect of the Retained Corporate-Owned Stores, and for delivery to Planet
Fitness Assetco in respect of the Securitized Corporate-Owned Stores, enforcing
and performing the rights and obligations of the Securitization Entities under
the Contributed Securitized Equipment Supply Agreements;

(s)    opening and/or and acquiring New Securitized Corporate-Owned Stores,
including evaluating new opportunities to open and/or acquire New Securitized
Corporate-Owned Stores;

(t)    establishing and/or providing standards for equipment, suppliers and
distributors in connection with the Securitized Corporate-Owned Store Business
and the Franchise Store Business and monitoring compliance with such standards;

(u)    developing new products and services (or modifying any existing products
and services) to be offered in connection with the Securitized Corporate-Owned
Store Business and the Franchise Store Business and the other assets of the
Securitization Entities;

(v)    in connection with the Securitized Corporate-Owned Store Business and the
Franchise Store Business, developing, modifying, amending and disseminating
specifications and design for store operations;

(w)    performing the Securitized Corporate-Owned Store Services;

(x)    performing the Securitized Lease Services;

 

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(y)    performing the IP Services;

(z)    monitoring industry conditions and adapting accordingly to meet changing
consumer needs;

(aa)    formulating and implementing growth and business strategies and causing
any applicable Securitization Entity to enter into New Franchise Agreements, New
Securitized Equipment Supply Agreements, New Securitized Authorized Vendor
Contracts and/or new joint venture, strategic partnership and licensing
arrangements;

(bb)    developing and administering advertising, marketing and promotional
programs relating to the Planet Fitness Brand and Stores; and

(cc)    performing such other services as may be necessary or appropriate from
time to time and consistent with the Managing Standard and the Related Documents
in connection with the Securitized Assets.

“Specified Non-Securitization Debt” has the meaning set forth in SECTION 4.10
hereof.

“Specified Non-Securitization Debt Cap” has the meaning set forth in SECTION
4.10 hereof.

“Sub-Management Arrangement” means an arrangement whereby the Manager engages
any other Person to perform certain of its duties under this Agreement; provided
that any agreement between the Manager and third-party vendors pursuant to which
the Manager purchases a specific product or service shall not be considered to
be a Sub-Management Arrangement.

“Sub-Manager” means any person engaged to act as a sub-manager pursuant to a
Sub-Management Arrangement.

“Successor Manager” means any successor to the Manager selected by the Control
Party upon the resignation or removal of the Manager pursuant to the terms of
this Agreement.

“Termination Notice” has the meaning set forth in Section 7.1(b) hereof.

“Threshold DSCR” means, with respect to any Indemnification Amount, the DSCR as
of the Quarterly Payment Date occurring in the month of December immediately
preceding the date that the Manager would be required to pay such
Indemnification Amount to the applicable Securitization Entity but for the
potential application of the materiality thresholds set forth in the definition
of “Indemnification Amounts Threshold Amount;” provided that for the period
commencing on the Closing Date and ending on the first Quarterly Payment Date
occurring in the month of December thereafter, the Threshold DSCR shall be
deemed to be greater than 2.75x.

“Trustee” has the meaning set forth in the preamble hereto.

“Trustee Indemnitee” has the meaning set forth in Section 2.8 hereof.

 

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SECTION 1.2 Other Defined Terms.

(a)    Each term defined in the singular form in Section 1.1 or elsewhere in
this Agreement shall mean the plural thereof when the plural form of such term
is used in this Agreement and each term defined in the plural form in Section
1.1 or elsewhere in this Agreement shall mean the singular thereof when the
singular form of such term is used herein.

(b)    The words “hereof”, “herein”, “hereunder” and similar terms when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, subsection,
schedule and exhibit references herein are references to articles, sections,
subsections, schedules and exhibits to this Agreement unless otherwise
specified.

(c)    Unless as otherwise provided herein, the word “including” as used in this
Agreement shall mean “including without limitation”.

SECTION 1.3 Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.

SECTION 1.4 Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding”.

ARTICLE 2

ADMINISTRATION AND SERVICING OF SECURITIZED ASSETS

SECTION 2.1 Planet Fitness Holdings, LLC to Act as the Manager.

(a)    Engagement of the Manager. The Securitization Entities hereby engage and
authorize the Manager and the Manager hereby accepts such engagement to perform
the Services in accordance with the terms of this Agreement and, except as
otherwise provided herein, the Managing Standard. With respect to the IP
Services, the Manager shall perform such IP Services in accordance with the
Managing Standard and the IP License Agreements, unless the Franchisor
determines, in its sole discretion, that additional action is necessary or
desirable in furtherance of the protection of the Securitization IP, in which
case the Manager shall perform such IP Services and additional related services
as are reasonably requested by the Franchisor. The Manager, on behalf of the
Securitization Entities, shall have full power and authority, acting alone and
subject only to the specific requirements and prohibitions of this Agreement
(and in accordance with the Managing Standard), the Indenture and the other
Related Documents, to do and take any and all actions, or to refrain from taking
any such actions, and to do any and all things in connection with performing the
Services which the Manager may deem necessary or desirable. Without limiting the
generality of the foregoing, but subject to the provisions of this Agreement,
the Indenture and the other Related Documents, including, without limitation,
Section 2.9, the Manager, in connection with performing the Services, is hereby
authorized and empowered to execute and deliver, in the Manager’s own name (in
its capacity as Manager) or in the name of

 

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any Securitization Entity (pursuant to the applicable Power of Attorney), on
behalf of any Securitization Entity, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Securitized Assets, including,
without limitation, consents to sales, transfers or encumbrances of a franchise
by any Franchisee or consents to assignments and assumptions of the Franchise
Agreements by any Franchisee in accordance with the terms thereof. For the
avoidance of doubt, the parties hereto acknowledge and agree that (i) the
Manager is providing Services directly to each Securitization Entity party
hereto and (ii) the Master Issuer is not providing, and is under no obligation
to provide, any Services to its Subsidiaries party hereto. Nothing in this
Agreement shall preclude the Securitization Entities from performing the
Services or any other act on their own behalf at any time and from time to time.

(b)    Actions to Perfect Security Interests. Subject to the terms of the Base
Indenture, any applicable Series Supplement and the Related Documents, the
Manager shall take those actions that are required to be performed by the
Manager under the Related Documents and Requirements of Law with respect to the
perfection and maintenance of security interests. Without limiting the
foregoing, the Manager shall file or cause to be filed the financing statements
on Form UCC-1 and assignments and/or amendments of financing statements on Form
UCC-3 and other filings required to be filed in connection with the Base
Indenture, the other Related Documents and the transactions contemplated
thereby.

(c)    Ownership of After-Acquired Securitization IP. All After-Acquired
Securitization IP shall be owned exclusively by the Franchisor. The Manager
agrees to assign and transfer, and hereby does irrevocably assign and transfer,
to the Franchisor all right, title and interest to any After-Acquired
Securitization IP that the Manager may acquire and will take all measures
necessary or appropriate to record any such assignments at the Manager’s sole
cost and expense. The Franchisor and Manager expressly agree that, to the
fullest extent allowed by law, any copyrightable material contained in the
After-Acquired Securitization IP shall be considered a “work made for hire,” as
that term is defined in Section 101 of the United States Copyright Act, as
amended. All use of the Securitization IP hereunder, and any goodwill related
thereto or that otherwise may arise from the provision of the Services by the
Manager, shall inure solely to the benefit of the Franchisor.

(d)    Grant of Power of Attorney. In order to provide the Manager with the
authority to perform and execute its duties and obligations as set forth herein,
each Securitization Entity hereby agrees to execute, upon request of the
Manager, a Power of Attorney in substantially the form set forth as Exhibit B-1
(with respect to the Franchisor) and Exhibit B-2 (with respect to each
Securitization Entity other than the Franchisor) hereto, which Powers of
Attorney shall terminate in the event that the Manager’s rights under this
Agreement are terminated as provided herein.

(e)    Franchisee Insurance. Subject to Section 5.11(j) of the Base Indenture,
the Manager acknowledges that, to the extent that it is named as a “loss payee”
or “additional insured” under any Franchisee Insurance Policies, except for
business interruption Franchisee Insurance Policies, it will use commercially
reasonable efforts to cause it to be so named in its capacity as the Manager,
and the Manager shall promptly remit to the Trustee for deposit in the Insurance
Proceeds Account any Insurance/Condemnation Proceeds received by it or by the

 

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Master Issuer or the Franchisor under the Franchisee Insurance Policies, to the
extent such Insurance/Condemnation Proceeds relate to any Franchise Agreements
held by the Franchisor. The Manager shall take or cause to be taken all actions
in respect of the Franchisee insurance required by the Base Indenture, the other
Related Documents and the transactions contemplated thereby.

(f)    Manager Insurance. The Manager agrees to maintain adequate insurance in
accordance with industry standards and consistent with the type and amount
maintained by the Manager on the Closing Date. Such insurance will cover each of
the Securitization Entities, as an additional insured, to the extent that such
Securitization Entity has an insurable interest therein. Within a reasonable
period of time following the Closing Date, the Manager shall deliver to the
Trustee a schedule listing the policy numbers of its existing insurance
policies.

(g)    Maintenance of Accounts; Investment of Funds. The Manager shall maintain
and manage the Management Accounts (and certain other accounts from time to
time) in the name of, and for the benefit of, the Securitization Entities. The
Manager shall have the right to invest and reinvest funds deposited in any
Management Account in Eligible Investments in accordance with SECTION 5.2(b) of
the Base Indenture.

(h)    Collection of Payments; Remittances. The Manager shall (i) cause the
collection of all amounts owing under the terms and provisions of each Managed
Document in accordance with the Managing Standard and (ii) make all deposits to
and withdrawals from the Management Accounts in accordance with this Agreement
(including the Managing Standard), the Indenture and the applicable Managed
Documents.

(i)    Collections. The Manager shall use commercially reasonable efforts to
cause all Collections due and to become due to any Securitization Entity to be
deposited into the applicable Management Account(s) in accordance with
Section 5.11 of the Base Indenture.

(j)    [Reserved].

(k)    Deposit of Misdirected Funds; No Commingling; Misdirected Payments. The
Manager shall promptly deposit into an applicable Management Account or an
Advertising Fund Account, as applicable, as determined by the Manager, within
three (3) Business Days (unless such deposit requires an international funds
transfer, in which case such funds must be deposited to the applicable account
within five (5) Business Days of receipt) following Actual Knowledge of the
receipt thereof by the Manager or any of its Affiliates and in the form received
or in cash, all payments received by the Manager or any of its Affiliates in
respect of the Securitized Assets incorrectly sent to the Manager or any of its
Affiliates. In the event that any funds not constituting Collections are
incorrectly deposited in any Management Account or any Advertising Fund Account,
the Manager shall promptly withdraw such amounts after obtaining Actual
Knowledge thereof and shall pay such amounts to the Person legally entitled to
such funds. The Manager shall not commingle with its own assets and shall keep
separate, segregated and appropriately marked and identified all Securitized
Assets and any other property comprising any part of the Collateral, and for
such time, if any, as such Securitized Assets or such other property are in the
possession or control of the Manager to the extent such Securitized Assets or
such other property is Collateral, the Manager shall hold the same in trust for
the benefit of the

 

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Trustee and the Secured Parties (or, following termination of the Indenture, the
applicable Securitization Entity). Additionally, the Manager shall notify the
Trustee in the Interim Manager’s Certificate of any amounts incorrectly
deposited into the any Indenture Trust Account and arrange for the prompt
remittance by the Trustee of such funds from the applicable Indenture Trust
Account to the Manager. The Trustee shall have no obligation to verify any
information provided to it by the Manager hereunder or contained in any Interim
Manager’s Certificate and shall remit such funds to the Manager based solely on
such Interim Manager’s Certificate.

(l)    Other Amounts Received from Franchisees. The Manager shall cause all
amounts received, other than Collections, to be deposited directly into an
account maintained by the Manager or its Affiliates (other than the
Securitization Entities) and not subject to the Lien of the Trustee pursuant to
the Related Documents.

SECTION 2.2 Advances.

(a)    Manager Advances. The Manager may, if in its sole discretion it deems
such advance recoverable, but shall not be obligated to, make Manager Advances
to, or on behalf of, any Securitization Entity in connection with the operation
of the Securitized Assets. Manager Advances will accrue interest at the Advance
Interest Rate and shall be reimbursable on each Interim Allocation Date in
accordance with the Priority of Payments.

(b)    Repayment of Manager Advances. The Master Issuer shall pay Manager
Advance Reimbursement Amounts to the Manager in accordance with Section 5.12 of
the Base Indenture.

SECTION 2.3 Deposit Accounts. The Manager shall maintain the Management Accounts
in accordance with the Indenture.

SECTION 2.4 Records. The Manager shall retain all material data (including,
without limitation, computerized records) relating directly to, or maintained in
connection with, the servicing of the Securitized Assets at its address
indicated in SECTION 9.6 (or at an off-site storage facility reasonably
acceptable to the Master Issuer and the Control Party) or, upon thirty
(30) days’ notice to the Master Issuer, the Franchisor, the Servicer, the
Back-Up Manager, the Rating Agencies and the Trustee, at such other place where
the servicing office of the Manager is located, and it shall give the Trustee,
the Back-Up Manager and the Servicer access to all such data in accordance with
the terms and conditions set forth in Section 8.6 of the Base Indenture;
provided, however, that the Trustee shall not be obligated to verify,
recalculate or review any such data. If the rights of the Manager shall have
been terminated in accordance with Section 7.1 or if this Agreement shall have
been terminated pursuant to Section 9.1, the Manager shall, upon demand of the
Trustee (based upon the written direction of the Control Party), in the case of
a termination pursuant to Section 7.1, or upon the demand of the Master Issuer,
in the case of a termination pursuant to Section 9.1, deliver to the demanding
party or its designee, or destroy at the request of the demanding party or its
designee, all data in its possession or under its control (including, without
limitation, computerized records) necessary for the servicing of the Securitized
Assets; provided, however, that the Manager may retain a single set of copies of
any books and records that the Manager reasonably believes will be required by
it for the purpose of performing any of the Manager’s accounting, public
reporting or other administrative functions

 

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that are performed in the ordinary course of the Manager’s business; and
provided, further, that the Manager shall have access, during normal business
hours and upon reasonable notice, to all books and records that the Manager
reasonably believes would be necessary or desirable for the Manager in
connection with the preparation of any tax or other governmental reports and
filings and other uses; and provided, further, that if the Master Issuer shall
desire to dispose of any of such books and records at any time within five
(5) years of the Manager’s termination, the Master Issuer shall, prior to such
disposition, give the Manager a reasonable opportunity, at the Manager’s
expense, to segregate and remove such books and records as the Manager may
select. The provisions of this Section 2.4 shall not require the Manager to
transfer any proprietary material or computer programs unrelated to the
servicing of the Securitized Assets.

SECTION 2.5 Administrative Duties of Manager.

(a)    Duties with Respect to the Related Documents. The Manager, in accordance
with the Managing Standard, shall perform the duties of the applicable
Securitization Entity under the Related Documents except for those duties that
are required to be performed by the equity holders or the managers of a limited
liability company or the stockholders or directors of a corporation pursuant to
applicable law. In furtherance of the foregoing, the Manager shall consult the
managers or the directors, as the case may be, of the Securitization Entities as
the Manager deems appropriate regarding the duties of the Securitization
Entities under the Related Documents. The Manager shall monitor the performance
of the Securitization Entities and, promptly upon obtaining Actual Knowledge
thereof, shall advise the applicable Securitization Entity when action is
necessary to comply with such Securitization Entity’s duties under the Related
Documents. The Manager shall prepare for execution by the Securitization
Entities or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates, notices and opinions as
it shall be the duty of the Securitization Entities to prepare, file or deliver
pursuant to the Related Documents.

(b)    Duties with Respect to the Securitization Entities. In addition to the
duties of the Manager set forth in this Agreement or any of the Related
Documents, the Manager, in accordance with the Managing Standard, shall perform
such calculations and shall prepare for execution by the Securitization Entities
or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates, notices and opinions as
it shall be the duty of the Securitization Entities to prepare, file or deliver
pursuant to securities laws and franchise laws. Pursuant to the directions of
the Securitization Entities and in accordance with the Managing Standard, the
Manager shall administer, perform or supervise the performance of such other
activities in connection with the Securitization Entities as are not covered by
any of the foregoing provisions and as are expressly requested by any
Securitization Entity and are reasonably within the capability of the Manager.

(c)    Records. The Manager shall maintain appropriate books of account and
records relating to the Services performed under this Agreement, which books of
account and records shall be accessible for inspection by the Master Issuer, the
Trustee, the Back-Up Manager, the Servicer and the Controlling
Class Representative during normal business hours and upon reasonable notice.

 

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(d)    Election of the Controlling Class Representative. Pursuant to
Section 11.1(d) of the Base Indenture, if two CCR Candidates both receive votes
from Controlling Class Members holding beneficial interests in exactly 50% of
the Aggregate Outstanding Principal Amount of Notes of the Controlling
Class with respect to which votes were submitted, the Manager (on behalf of the
Master Issuer) shall have the right to direct the Trustee to appoint one of such
CCR Candidates as the Controlling Class Representative.

SECTION 2.6 No Offset. The payment obligations of the Manager under this
Agreement shall not be subject to, and the Manager hereby waives, any defense,
counterclaim or right of offset which the Manager has or may have against the
Trustee or the Securitization Entities, whether in respect of this Agreement,
any Related Document, any document governing any Securitized Asset or otherwise.

SECTION 2.7 Compensation. As compensation for the performance of its obligations
under this Agreement, the Manager shall be entitled to receive (i) the
Management Fee, which shall be an arm’s length fee, and (ii) if applicable, the
Supplemental Management Fee, in each case, on each Interim Allocation Date out
of amounts available therefor under the Indenture on such Interim Allocation
Date in accordance with the Priority of Payments. The Manager is required to pay
from its own funds all expenses it may incur in performing its obligations
hereunder.

SECTION 2.8 Indemnification.

(a)    The Manager agrees to indemnify and hold each of the Master Issuer, each
other Securitization Entity, the Trustee, the Back-Up Manager and the Servicer
(both in its capacity as Servicer and as Control Party) and their respective
members, officers, directors, managers, employees and agents (each an
“Indemnitee”) harmless against all claims, losses, penalties, fines,
forfeitures, liabilities, obligations, damages, actions, suits, legal fees and
related costs and judgments and other costs, fees and reasonable expenses,
including reasonable and documented fees, out-of-pocket charges and
disbursements of counsel (other than the allocated costs of in-house counsel),
that any of them may incur as a result of (i) the failure of the Manager to
perform or observe its obligations under this Agreement or any other Related
Document to which it is a party in its capacity as Manager, (ii) the breach by
the Manager of any representation, warranty or covenant under this Agreement or
any other Related Document to which it is a party in its capacity as Manager, or
(iii) the Manager’s bad faith, negligence or willful misconduct in the
performance of its duties under this Agreement and under the other Related
Documents; provided, however, that there shall be no indemnification under this
Section 2.8(a) in respect of losses in the value of any Securitized Assets for a
breach of any representation, warranty or covenant relating to any New Asset
provided in Article 5 hereof; and provided, further, that the Manager will have
no obligation of indemnity to an Indemnitee to the extent any such claims,
losses, penalties, fines, forfeitures, liabilities, obligations, damages,
actions, suits and related costs and judgments and other costs, fees and
reasonable expenses are caused by the bad faith, gross negligence, willful
misconduct, or breach of this Agreement by the related Indemnitee (unless caused
by the Manager with respect to a Securitization Entity). In the event the
Manager is required to make an indemnification payment pursuant to this Section
2.8(a), the Manager shall promptly pay such indemnification payment directly to
the applicable Indemnitee (or, if due to a Securitization Entity, shall deposit
such indemnification payment directly to the Collection Account).

 

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(b)    In the event of a breach of any representation, warranty or covenant
provided in Article 5 hereof relating to any New Franchise Agreement, New Area
Development Agreement, New Securitized Equipment Supply Agreement, New
Securitized Authorized Vendor Contract, New Contributed Corporate-Owned Store
Asset, Franchisee Note or New Contributed Corporate-Owned Store Lease or
Securitized Franchise Lease or After-Acquired Securitization IP, the Manager
shall (x) either (i) repurchase such New Franchise Agreement, New Area
Development Agreement, New Securitized Equipment Supply Agreement, New
Securitized Authorized Vendor Contract, New Contributed Corporate-Owned Store
Asset, Franchisee Note or New Contributed Corporate-Owned Store Lease or
Securitized Franchise Lease for an amount equal to the related Indemnification
Amount or (ii) pay the Indemnification Amount to the applicable Securitization
Entity and (y) reimburse the applicable Securitization Entity for the expenses
related to defending or enforcing its rights in such After-Acquired
Securitization IP; provided, that if the applicable breach affects only a
portion of such New Franchise Agreement, New Area Development Agreement, New
Securitized Equipment Supply Agreement, New Securitized Authorized Vendor
Contract, New Contributed Corporate-Owned Store Asset, Franchisee Note or New
Contributed Corporate-Owned Store Lease or Securitized Franchise Lease or
After-Acquired Securitization IP without a Material Adverse Effect on the cash
flow generated by the unaffected portion, the Manager will only be required to
repurchase or pay the Indemnification Amount with respect to the affected
portion of such New Franchise Agreement, New Area Development Agreement, New
Securitized Equipment Supply Agreement, New Securitized Authorized Vendor
Contract, New Contributed Corporate-Owned Store Asset, Franchisee Note or New
Contributed Corporate-Owned Store Lease or Securitized Franchise Lease or
After-Acquired Securitization IP; provided, further, that the Manager shall not
be obligated to pay the Indemnification Amount (I) with respect to any assets
that were contributed to any Securitization Entity at the option of the Manager
or (II) if the aggregate of all Indemnification Amounts (excluding any
Indemnification Amounts that would be required to be paid by the Manager but for
the application of clause (I) above) during the fiscal year in which such
Indemnification Amounts would be payable is less than the Indemnification
Amounts Threshold Amount. Following the payment by the Manager of the related
Indemnification Amount and all other applicable amounts under this Agreement,
the applicable Securitization Entity will assign the applicable repurchased
assets to, or at the direction of the Manager. Any assignment by a
Securitization Entity in such manner will be made without recourse to, or
representation or warranty by, the applicable Securitization Entity, except that
the ownership of the reacquired asset must be conveyed free and clear of any
Liens created under the Related Documents. Any assignment by a Securitization
Entity of a reacquired asset shall include a master franchise or license
agreement permitting the Manager and its Affiliates the right to sub-franchise
such reacquired Asset. The Manager will be required to pay all costs and
expenses associated with the assignment of the reacquired asset in such manner.
The Manager, acting in its sole discretion, may subsequently contribute the
reacquired asset to the Securitization Entities, if such reacquired asset
subsequently satisfies the eligibility criteria applicable to such reacquired
asset under this Agreement.

(c)    In addition to the rights provided in Section 2.8(b) above, the Manager
agrees to indemnify and hold each Indemnitee harmless if any action or
proceeding (including any

 

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governmental investigation and/or the assessment of any fines or similar items)
shall be brought or asserted against such Indemnitee in respect of a material
breach of any representation, warranty or covenant relating to any New Asset
provided in ARTICLE 5 hereof to the extent provided in Section 2.8(a).

(d)    Any Indemnitee that proposes to assert the right to be indemnified under
Section 2.8 will promptly, after receipt of notice of the commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against the Manager under such sections, notify the Manager of the
commencement of such action, suit or proceeding, enclosing a copy of all papers
served. In the event that any action, suit or proceeding shall be brought
against any Indemnitee (other than the Trustee and its officers, directors,
employees and agents), such Indemnitee shall notify the Manager of the
commencement thereof and the Manager shall be entitled to participate in, and to
the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnitee (which, in the case of a
Securitization Entity, shall be reasonably satisfactory to the Control Party, as
well), and after notice from the Manager to such Indemnitee of its election to
assume the defense thereof, the Manager shall not be liable to such Indemnitee
for any legal expenses subsequently incurred by such Indemnitee in connection
with the defense thereof; provided that the Manager shall not enter into any
settlement with respect to any claim or proceeding unless such settlement
includes an unconditional release of such Indemnitee from all liability on
claims that are the subject matter of such settlement; and provided, further,
that the Indemnitee shall have the right to employ its own counsel in any such
action the defense of which is assumed by the Manager in accordance with this
Section 2.8, but the fees and expenses of such counsel shall be at the expense
of such Indemnitee unless the employment of counsel by such Indemnitee has been
specifically authorized by the Manager, or unless the Manager is advised in
writing by counsel that joint representation would give rise to a conflict
between the Indemnitee’s position and the position of the Manager and its
Affiliates in respect of the defense of the claim. In the event that any action,
suit or proceeding shall be brought against any Trustee or any of its officers,
directors, employees or agents (each, a “Trustee Indemnitee”), it shall notify
the Manager of the commencement thereof and the Trustee Indemnitee shall have
the right to employ its own counsel in any such action at the expense of the
Manager. No Indemnitee shall settle or compromise any claim covered pursuant to
this Section 2.8 without the prior written consent of the Manager, which shall
not be unreasonably withheld or delayed. The provisions of this Section 2.8
shall survive the termination of this Agreement or the earlier resignation or
removal of any party hereto.

SECTION 2.9 Nonpetition Covenant. The Manager shall not, prior to the date that
is (a) one year, or if longer, (b) the applicable preference period then in
effect, and in either case of (a) or (b) plus one day, after the payment in full
of the Outstanding Principal Amount of the Notes of each Series, petition or
otherwise invoke the process of any court or governmental authority for the
purpose of commencing or sustaining a case against any Securitization Entity
under any insolvency law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of such
Securitization Entity or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of such Securitization Entity.

SECTION 2.10 Advertising Funds. The Manager will maintain one or more accounts
designated as an “Advertising Fund Account” in the name of NAF (or a Subsidiary
thereof) for

 

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fees payable in respect of Franchise Stores, Securitized Corporate-Owned Stores
and Retained Corporate-Owned Stores to fund the national marketing and
advertising activities with respect to the Planet Fitness Brand (the
“Advertising Fees”). To the extent not paid directly to NAF by a third-party
payment processor, Advertising Fees will be transferred by the Manager from the
Securitized Corporate-Owned Store Accounts to an Advertising Fund Account. The
Manager shall not make or permit or cause any other Person to make or permit any
borrowings to be made or Liens to be levied against the Advertising Fund Account
or the funds therein. The Manager shall apply the amount on deposit in each
Advertising Fund Account solely to cover (a) the costs and expenses (including
costs and expenses incurred prior to the Closing Date) associated with the
administration of such account, (b) costs and expenses related to the national
marketing and advertising programs with respect to the Planet Fitness Brand and
(c) reimbursements to the Manager for Ad Fund Manager Advances. The Manager may
make advances to fund deficits in the Advertising Fund Account (“Ad Fund Manager
Advances”) from time to time to the extent that it reasonably expects to be
reimbursed for such advances from the proceeds of future Advertising Fees, it
being agreed that any such advances will not constitute Manager Advances. The
Manager, acting on behalf of the Securitization Entities, may pursuant to the
terms of this Agreement, increase or reduce the Advertising Fees required to be
paid by the Franchisees, Securitized Corporate-Owned Stores and Retained
Corporate-Owned Stores pursuant to the terms of this Agreement and in accordance
with the Managing Standard. The Manager may appoint any Sub-Manager to maintain
and administer an Advertising Fund Account.

SECTION 2.11 Franchisor Consent. Subject to the Managing Standard and the terms
of the Indenture, the Manager shall have the authority, on behalf of the
Franchisor, to grant or withhold consents of the “franchisor” required under the
Franchise Agreements and Area Development Agreements held by the Franchisor.

SECTION 2.12 Appointment of Sub-Managers. The Manager may enter into
Sub-Management Arrangements; provided that the Manager will be required to
remain primarily and directly liable for the performance of its obligations
under this Agreement notwithstanding any such Sub-Management Arrangement;
provided, further, that other than with respect to a Sub-Management Arrangement
with an Affiliate of the Manager, no Sub-Management Arrangement shall be
effective unless and until: (i) the Manager receives the consent of the Control
Party; (ii) such Sub-Manager executes and delivers an agreement in form and
substance reasonably satisfactory to the Control Party to perform and observe,
or in the case of an assignment, an assumption by such successor entity of the
due and punctual performance and observance of, the applicable covenants and
conditions to be performed or observed by the Manager under this Agreement;
provided that such Sub-Management Arrangement shall be terminable by the Control
Party upon a Manager Termination Event and shall contain disentanglement
provisions substantially similar to those provided in Section 7.2 herein;
(iii) written notice has been provided to the Trustee, the Back-Up Manager and
the Control Party; and (iv) the Rating Agencies have confirmed that such
Sub-Management Arrangement, or assignment and assumption by such Sub-Manager,
meets the Rating Agency Condition. Subject to the right of the Control Party to
elect to continue the Sub-Management Arrangement, all Sub-Management
Arrangements with an Affiliate of the Manager shall automatically terminate upon
the termination of the Manager pursuant to Section 7.1(b).

 

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SECTION 2.13 Letter of Credit Reimbursement Agreement. In the event that Holdco
has deposited cash collateral as security for its obligations under the Letter
of Credit Reimbursement Agreement into a bank account maintained in the name of
the Master Issuer, (i) if Holdco fails to make any payment to the Master Issuer
when due under the Letter of Credit Reimbursement Agreement, the Manager shall
withdraw the amount of such delinquent payment from such bank account within one
Business Day of the due date of such payment under the Letter of Credit
Reimbursement Agreement and deposit such amount into the Collection Account, and
(ii) if the amount on deposit in such account exceeds an amount equal to 105% of
the sum of (x) the aggregate exposure under all outstanding letters of credit
under the Letter of Credit Reimbursement Agreement plus (y) the aggregate amount
then due to the Issuer under Section 4 or Section 5 of the Letter of Credit
Reimbursement Agreement, the Manager shall withdraw the amount of such excess
from such account and pay such excess to Holdco.

ARTICLE 3

STATEMENTS AND REPORTS

SECTION 3.1 Reporting by the Manager.

(a)    Reports Required Pursuant to the Indenture. The Manager, on behalf of the
Master Issuer, will furnish, or cause to be furnished, to the Trustee and the
Control Party all reports, instructions and notices required to be delivered by
any Securitization Entity pursuant to SECTION 4.1 of the Indenture.

(b)    Reports Required Pursuant to the NAF Servicing Agreement. The Manager, on
behalf of NAF, will furnish, or cause to be furnished, to the Master Issuer,
with a copy to the Control Party, all reports required to be delivered pursuant
to Section 2.3 of the NAF Servicing Agreement.

(c)    Instructions as to Withdrawals and Payments. The Manager, on behalf of
the Master Issuer, will furnish, or cause to be furnished, to the Trustee or the
Paying Agent, as applicable, written instructions to make withdrawals and
payments from the Collection Account and any other Base Indenture Accounts or
any Series Account, as contemplated herein, in the Base Indenture and in any
Series Supplement. The Trustee and the Paying Agent shall follow any such
written instructions in accordance with the terms and conditions of the Base
Indenture and any applicable Series Supplement.

(d)    Additional Information; Access to Books and Records. The Manager shall
furnish from time to time such additional information regarding the Managed
Assets or compliance with the covenants and other agreements of the Manager and
any Securitization Entity under the Transaction Documents as the Trustee, the
Back-Up Manager or the Servicer may reasonably request, subject at all times to
compliance with the 1934 Act, the 1933 Act and any other applicable law. The
Manager shall, and shall cause each Securitization Entity to, permit, at
reasonable times upon reasonable notice, the Servicer, the Controlling
Class Representative, the Back-Up Manager and the Trustee or any Person
appointed by any of them

 

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as its agent to visit and inspect any of its properties, examine its books and
records and discuss its affairs with its officers, directors, managers,
employees and independent certified public accountants, and up to one such visit
and inspection by each of the Servicer, the Controlling Class Representative and
the Trustee, or any Person appointed by them shall be reimbursable as a
Securitization Operating Expense per calendar year, with any additional visit or
inspection by any such Person being at such Person’s sole cost and expense;
provided, however that during the continuance of a Warm Back-Up Management
Trigger Event, a Rapid Amortization Event, an A-1 Notes Amortization Event, a
Default, or an Event of Default, or to the extent expressly required without the
instruction of any other party under the terms of any Transaction Documents, any
such Person may visit and conduct such activities at any time and all such
visits and activities will constitute a Securitization Operating Expense.
Notwithstanding the foregoing, the Manager shall not be required to disclose or
make available communications protected by the attorney- client privilege.

(e)    Leadership Team Changes. The Manager shall promptly notify the Trustee,
the Back-Up Manager, the Servicer and each Rating Agency of any termination or
resignation of any persons included in the Leadership Team that occurs within 12
months following a Change of Control.

SECTION 3.2 Appointment of Independent Auditors. On or before the Closing Date,
the Master Issuer shall appoint a firm of independent public accountants of
recognized national reputation that is reasonably acceptable to the Control
Party to serve as the independent auditors (the “Independent Auditors”) for
purposes of preparing and delivering the reports required by Section 3.3. It is
hereby acknowledged that the accounting firm of KPMG LLP is acceptable for
purposes of serving as the Independent Auditors. The Master Issuer may not
remove the Independent Auditors without first giving thirty (30) days’ prior
written notice to the Independent Auditors, with a copy of such notice given
concurrently to the Trustee, the Rating Agencies, the Control Party, the Back-Up
Manager and the Manager. Upon any resignation by such firm or removal of such
firm, the Master Issuer shall promptly appoint a successor thereto that shall
also be a firm of independent public accountants of recognized national
reputation to serve as the Independent Auditors hereunder. If the Master Issuer
shall fail to appoint a successor firm of Independent Auditors within thirty
(30) days after the effective date of such resignation or removal, the Control
Party shall promptly appoint a successor firm of independent public accountants
of recognized national reputation that is reasonably satisfactory to the Manager
to serve as the Independent Auditors hereunder. The fees of any Independent
Auditors shall be payable by the Master Issuer.

SECTION 3.3 Annual Accountants’ Reports. On or before 120 days after the end of
each fiscal year of the Manager, the Manager shall deliver to the Master Issuer,
the Trustee, the Servicer, the Back-Up Manager and the Rating Agencies (i) a
report of the Independent Auditors (who may also render other services to the
Manager) or the Back-Up Manager summarizing the findings of a set of agreed-upon
procedures performed by the Independent Auditors or the Back-Up Manager with
respect to compliance with the Quarterly Noteholders’ Reports for such fiscal
year (or, in the case of the fiscal year ending on or around December 31, 2018,
other period) with the standards set forth in this Agreement and (ii) a report
of the Independent Auditors or the Back-Up Manager to the effect that: (A) such
firm has examined the assertion of the Manager’s management as to its compliance
with its management requirements for such fiscal year (or other

 

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period); (B) in the case of the Independent Auditors, such examination was made
in accordance with the standards established by the American Institute of
Certified Public Accountants; and (C) except as described in the report,
management’s assertion is fairly stated in all material respects. If such report
is prepared by the Independent Auditors, the report will also indicate that the
firm is independent of the Manager within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
In the event such Independent Auditors require the Trustee to agree to the
procedures to be performed by such firm in any of the reports required to be
prepared pursuant to this Section 3.3, the Manager shall direct the Trustee in
writing to so agree as to the procedures described therein; it being understood
and agreed that the Trustee shall deliver such letter of agreement (which shall
be in a form satisfactory to the Trustee) in conclusive reliance upon the
direction of the Manager, and the Trustee has not made any independent inquiry
or investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.

SECTION 3.4 Available Information. The Manager, on behalf of the Master Issuer,
shall make available to Noteholders, Note Owners or prospective purchasers, on a
confidential basis, the information provided to the Control Party pursuant to
Section 4.3 of the Base Indenture. Notwithstanding the foregoing, the Manager
shall not make available any information referred to in this SECTION 3.4 to
Persons who are Competitors.

ARTICLE 4

THE MANAGER

SECTION 4.1 Representations and Warranties Concerning the Manager. The Manager
represents and warrants to the Master Issuer, the other Securitization Entities
party hereto and the Trustee, as of the Closing Date, as follows:

(a)    Organization and Good Standing. The Manager (i) is a limited liability
company, duly formed and organized, validly existing and in good standing under
the laws of the State of New Hampshire, (ii) is duly qualified to do business as
a foreign corporation and in good standing under the laws of each jurisdiction
where the character of its property, the nature of its business or the
performance of its obligations under the Related Documents make such
qualification necessary and (iii) has the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is currently conducted and to perform its obligations under
this Agreement, except in each case referred to in clause (ii) or (iii) to the
extent that the failure to do so is not reasonably likely to result in a
Material Adverse Effect on the Manager.

(b)    Power and Authority; No Conflicts. The execution and delivery by the
Manager of this Agreement and its performance of, and compliance with, the terms
hereof are within the power of the Manager and have been duly authorized by all
necessary limited liability company action on the part of the Manager. Neither
the execution and delivery of this Agreement, nor the consummation of the
transactions herein contemplated to be consummated by the Manager, nor
compliance with the provisions hereof, will conflict with or result in a breach
of, or constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, any of the provisions of any law,
governmental rule, regulation,

 

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judgment, decree or order binding on the Manager or its properties, except to
the extent that such conflict, breach or default would not have a Material
Adverse Effect, or any of the provisions of any material indenture, mortgage,
lease, contract or other instrument to which the Manager is a party or by which
it or its property is bound or result in the creation or imposition of any lien,
charge or encumbrance upon any of its property pursuant to the terms of any such
indenture, mortgage, leases, contract or other instrument except to the extent
such creation or imposition would not have a Material Adverse Effect.

(c)    Consents. Except for registrations as a franchise broker or franchise
sales agent as may be required under state franchise statutes and regulations,
the Manager is not required to obtain the consent of any other party or the
consent, license, approval or authorization of, or registration or declaration
with, any Governmental Authority in connection with the execution, delivery or
performance by the Manager of this Agreement, or the validity or enforceability
of this Agreement against the Manager, except to the extent that a state or
foreign franchise law requires filing and other compliance actions by virtue of
considering the Manager as a “subfranchisor”.

(d)    Due Execution and Delivery. This Agreement has been duly executed and
delivered by the Manager and constitutes a legal, valid and binding instrument
enforceable against the Manager in accordance with its terms (except as may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors’ rights generally or by
general equitable principles, whether considered in a proceeding at law or in
equity and by an implied covenant of good faith and fair dealing).

(e)    No Litigation. There are no actions, suits, investigations or proceedings
pending or, to the Actual Knowledge of the Manager, threatened in writing
against or affecting the Manager, before or by any Governmental Authority having
jurisdiction over the Manager or any of its properties or with respect to any of
the transactions contemplated by this Agreement (i) asserting the illegality,
invalidity or unenforceability, or seeking any determination or ruling that
would affect the legality, binding effect, validity or enforceability of this
Agreement, or (ii) which would reasonably be expected to have a Material Adverse
Effect. The Manager is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

(f)    Due Qualification. Except for registrations as a franchise broker or
franchise sales agent as may be required under state or foreign franchise
statutes and regulations and except to the extent that a state or foreign
franchise law requires filing and other compliance actions by virtue of
considering the Manager as an “subfranchisor”, the Manager has obtained or made
all material licenses, registrations, consents, approvals, waivers and
notifications of creditors, lessors and other Persons, in each case, in
connection with the execution and delivery of this Agreement by the Manager, and
the consummation by the Manager of all the transactions herein contemplated to
be consummated by the Manager and the performance of its obligations hereunder
except to the extent that the failure to do so would not reasonably be expected
to have a Material Adverse Effect.

(g)    No Default. The Manager is not in default under any agreement, contract,
instrument or indenture to which the Manager is a party or by which it or its
properties is or are

 

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bound, or with respect to any order of any Governmental Authority, which would
have a Material Adverse Effect; and no event has occurred which with notice or
lapse of time or both would constitute such a default with respect to any such
agreement, contract, instrument or indenture, or with respect to any such order
of any Governmental Authority, which would have a Material Adverse Effect.

(h)    Taxes. The Manager has filed or caused to be filed all federal tax
returns and all material state and other tax returns which, to the Actual
Knowledge of the Manager, are required to be filed by it, except where the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect. The Manager has paid or made adequate provisions for the payment
of all taxes shown as due on such returns, and all assessments made against it
or any of its property (other than any amount of tax the validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP have been provided on the
books of the Manager).

(i)    Accuracy of Information. As of the date thereof, the information
contained in the Offering Memorandum regarding (i) the Manager, (ii) the
servicing of the Securitized Assets by the Manager and (iii) the description of
this Agreement therein does not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein not materially misleading in each case when taken as a whole and in the
light of the circumstances under which they were made; and with respect to its
projected financial information, the Manager represents only that such
information was prepared in good faith based on assumptions believed to be
reasonable at the time.

(j)    Financial Statements. As of the Closing Date, the audited consolidated
balance sheets of Holdco as of December 31, 2017 and the related consolidated
statements of operations, changes in equity, comprehensive income, and cash
flows for the years ended December 31, 2017, December 31, 2016 and December 31,
2015 incorporated by reference in the Offering Memorandum, reported on and
accompanied by an unqualified report from KPMG LLP, present fairly the financial
condition of Holdco as at such date, and the results of operations, changes in
equity, comprehensive income, and cash flows for the respective periods then
ended. The unaudited consolidated balance sheets of Holdco as of March 31, 2018,
the related unaudited consolidated statements of operations, changes in equity,
comprehensive income and cash flows for the three months ended March 31, 2018
incorporated by reference in the Offering Memorandum, present fairly, in all
material respects, the financial condition of Holdco as of such date, and the
results of operations, changes in equity, comprehensive income and cash flows
for the period then ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP (except as otherwise stated therein)
applied consistently through the periods involved, subject, in the case of such
quarterly financial statements, to the absence of all required footnotes and to
normal year-end audit adjustments.

(k)    No Material Adverse Effect. Since December 31, 2017, there has been no
development or event that has had or would reasonably be expected to have a
Material Adverse Effect.

 

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(l)    Pension and Welfare Plans. During the five-year period prior to the date
on which this representation is made or deemed made with respect to any Plan, no
ERISA Event has occurred which would reasonably be expected to have a Material
Adverse Effect. Except as would not reasonably be expected to have a Material
Adverse Effect, neither the Manager nor any of its Subsidiaries has any
contingent liability with respect to any post-retirement medical benefits under
a Welfare Plan, other than liability for continuation coverage described in Part
6 of Subtitle B of Title I of ERISA or other applicable similar continuation of
coverage laws. Except as would not reasonably be expected to have a Material
Adverse Effect, (i) no Multiemployer Plan is in reorganization (as defined in
Section 4241 of ERISA) or is insolvent (as defined in Section 4245 of ERISA) and
(ii) no non-exempt prohibited transaction (as defined in Section 406 of ERISA or
Section 4975 of the Code) has occurred involving any Plan.

(m)     Environmental Matters. There are no material costs or liabilities
associated with any and all applicable foreign, federal, state and local laws
and regulations, and directives of any Governmental Authority relating to the
protection of human health and safety, natural resources, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”) (including, without limitation, any capital operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties), except
for costs or liabilities which would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect.

(n)    No Manager Termination Event. No Manager Termination Event has occurred
or is continuing, and, to the Actual Knowledge of the Manager, there is no event
which, with notice or lapse of time, or both, would constitute a Manager
Termination Event.

(o)    Location of Records. The offices at which the Manager keeps its records
concerning the Securitized Assets are located at the Manager’s address set forth
in the Indenture.

SECTION 4.2 Existence; Status as Manager. The Manager shall keep in full effect
its existence under the laws of the state of its incorporation, and maintain its
rights and privileges necessary or desirable in the normal conduct of its
business and the performance of its obligations hereunder, and will obtain and
preserve its qualification to do business in each jurisdiction in which the
failure to so qualify either individually or in the aggregate would be
reasonably likely to have a Material Adverse Effect.

SECTION 4.3 Performance of Obligations.

(a)    Punctual Performance. The Manager shall punctually perform and observe
all of its obligations and agreements contained in this Agreement in accordance
with the terms hereof and as contemplated by the Managing Standard.

(b)    Limitations of Responsibility of the Manager. The Manager will have no
responsibility under this Agreement other than to render the Services called for
hereunder in good faith and consistent with the Managing Standard.

(c)    Right to Receive Instructions. In the event that the Manager is unable to
decide between alternative courses of action, or is unsure as to the application
of any provision

 

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of this Agreement or any Related Document, or any such provision is, in the good
faith judgment of the Manager, ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or in the event
that this Agreement or any Related Document permits any determination by the
Manager or is silent or is incomplete as to the course of action which the
Manager is required to take with respect to a particular set of facts, the
Manager may give notice (in such form as shall be appropriate under the
circumstances) to the Control Party requesting instructions in accordance with
the Base Indenture and, to the extent that the Manager shall have acted or
refrained from acting in good faith in accordance with any such instructions
received from the Control Party, the Manager shall not be liable on account of
such action or inaction to any Person. Subject to the Managing Standard, if the
Manager shall not have received appropriate instructions from the Control Party
within ten (10) days of such notice (or within such shorter period of time as
may be specified in such notice) the Manager may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Related Documents, as the Manager shall deem to be in the best interests of
the Noteholders and the Securitization Entities. The Manager shall have no
liability to any Person for such action or inaction taken in reliance on the
preceding sentence except for the Manager’s own bad faith, negligence or willful
misconduct.

(d)    No Duties Except as Specified in this Agreement or in Instructions. The
Manager shall not have any duty or obligation to manage, make any payment in
respect of, register, record, sell, reinvest, dispose of, create, perfect or
maintain title to, or any security interest in, or otherwise deal with the
Collateral, to prepare or file any report or other document or to otherwise take
or refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Manager is a party, except as expressly
provided by the terms of this Agreement or the other Related Documents and
consistent with the Managing Standard, and no implied duties or obligations
shall be read into this Agreement against the Manager. The Manager nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens (other than Permitted Liens) on any part
of the Securitized Assets which result from valid claims against the Manager
personally whether or not related to the ownership or administration of the
Securitized Assets or the transactions contemplated by the Related Documents.

(e)    No Action Except Under Specified Documents or Instructions. The Manager
shall not manage, control, use, sell, reinvest, dispose of or otherwise deal
with any part of the Collateral except in accordance with the powers granted to,
and the authority conferred upon, the Manager pursuant to this Agreement or the
Related Documents.

(f)    Limitations on the Manager’s Liability. Subject to SECTION 2.8, and
except for any loss, liability, expense, damage, action, suit or injury arising
out of, or resulting from: (i) any breach or default by the Manager in the
observance or performance of any of its agreements contained in this Agreement
or the other Related Document to which it is a party in its capacity as Manager;
(ii) the breach by the Manager of any representation, warranty or covenant made
by it in this Agreement or any other Related Document to which it is a party in
its capacity as Manager or (iii) acts or omissions constituting the Manager’s
own bad faith, negligence or willful misconduct in the performance of its duties
hereunder or under any other Related Document to which it is a party in its
capacity as Manager, neither the Manager nor any of its Affiliates (other than
any Securitization Entity), managers, officers, members or employees

 

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will be liable to any Securitization Entity, the Holders or any other Person
under any circumstances, including, without limitation:

(i)    for any action taken or omitted to be taken by the Manager in good faith
in accordance with the instructions of the Trustee or the Control Party;

(ii)    for any representation, warranty, covenant, agreement or Indebtedness of
any Securitization Entity under the Notes, any other Related Document or the
Managed Documents, or for any other liability or obligation of any
Securitization Entity;

(iii)    for or in respect of the validity or sufficiency of this Agreement or
for the due execution hereof by any party hereto other than the Manager, or for
the form, character, genuineness, sufficiency, value or validity of any part of
the Securitized Assets including, without limitation, the creditworthiness of
any Franchisee, lessee or other obligor thereunder, or for or in respect of the
validity or sufficiency of the Related Documents;

(iv)    for any action or inaction of the Trustee, the Back-Up Manager or the
Servicer, or for the performance of, or the supervision of the performance of,
any obligation under this Agreement or any other Related Document that is
required to be performed by the Trustee, the Back-Up Manager or the Servicer;
and

(v)    for any error of judgment made in good faith that does not violate the
Managing Standard.

(g)    No Financial Liability. No provision of this Agreement (other than
(i) the last sentence of paragraph (d) above and (ii) SECTION 2.8) shall require
the Manager to expend or risk its funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder, if the
Manager has reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not compensated by the
payment of the Management Fees and is otherwise not reasonably assured or
provided to the Manager. Further, the Manager will not be obligated to perform
any services not enumerated or otherwise contemplated hereunder, unless the
Manager determines that it is more likely than not that it will be reimbursed
for all of its expenses incurred in connection with such performance. The
Manager shall not be liable under the Notes and shall not be responsible for any
amounts required to be paid by the Securitization Entities under or pursuant to
the Indenture.

(h)    Reliance. The Manager may, reasonably and in good faith, conclusively
rely on, and shall be protected in acting or refraining from acting when doing
so, in each case in accordance with any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper reasonably believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Manager may accept a certified
copy of a resolution of the board of directors or other governing body of any
entity as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
manner or ascertainment of which is not specifically prescribed herein, the
Manager may in good faith for all purposes hereof reasonably rely on a
certificate, signed by any Authorized Officer of the relevant party, as to such
fact or matter, and such certificate reasonably relied upon in good faith shall
constitute full protection to the Manager for any action taken or omitted to be
taken by it in good faith in reliance thereon.

 

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(i)    Consultations with Third Parties; Advice of Counsel. In the exercise and
performance of its duties and obligations hereunder or under any of the Related
Documents, the Manager (i) may act directly or through agents (in compliance
with Section 8.1(a)) or attorneys pursuant to agreements entered into with any
of them; provided that the Manager shall remain primarily liable hereunder for
the acts or omissions of such agents or attorneys and (ii) may, at the expense
of the Manager, consult with counsel, accountants and other professionals or
experts selected and monitored by the Manager in good faith and in the absence
of negligence, and the Manager shall not be liable for anything done, suffered
or omitted in good faith by it in accordance with the advice or opinion of any
such counsel, accountants or other professionals or experts.

(j)    Independent Contractor. In performing its obligations as manager
hereunder the Manager acts solely as an independent contractor of each
Securitization Entity, except to the extent the Manager is deemed to be an agent
of a Securitization Entity by virtue of engaging in franchise sales activities,
as a broker, or receiving payments on behalf of the Securitization Entities, as
applicable. Nothing in this Agreement shall, or shall be deemed to, create or
constitute any joint venture, partnership, employment, or any other relationship
between any Securitization Entity and the Manager other than the independent
contractor contractual relationship established hereby. Nothing herein shall be
deemed to vest in the Manager title or any other right or interest in or to the
Securitization IP. The Manager shall not be, nor shall be deemed to be, liable
for any acts or obligations of the Securitization Entities, the Control Party,
the Back-Up Manager, the Servicer or the Trustee (except as set forth in Section
4.3(f) hereof) and, without limiting the foregoing, the Manager shall not be
liable under or in connection with the Notes. The Manager shall not be
responsible for any amounts required to be paid by the Master Issuer under or
pursuant to the Indenture.

SECTION 4.4 Merger; Resignation and Assignment.

(a)    Preservation of Existence. The Manager shall not merge into any other
Person or convey, transfer or lease substantially all of its assets; provided,
however, that nothing contained in this Agreement shall be deemed to prevent
(i) the merger into the Manager of another Person, (ii) the consolidation of the
Manager and another Person, (iii) the merger of the Manager into another Person
or (iv) the sale of substantially all the property or assets of the Manager to
another Person, so long as (A) the surviving Person of the merger or the
purchaser of the assets of the Manager shall continue to be engaged in the same
line of business as the Manager and shall have the capacity to perform its
obligations hereunder with at least the same degree of care, skill and diligence
as measured by customary practices with which the Manager is required to perform
such obligations hereunder, (B) in the case of a merger or sale, the surviving
Person of the merger or the purchaser of the assets of the Manager shall
expressly assume the obligations of the Manager under this Agreement and
expressly agree to be bound by all other provisions applicable to the Manager
under this Agreement in a supplement to this Agreement in form and substance
reasonably satisfactory to the Control Party and the Trustee and (C) with
respect to such event, in and of itself, the Rating Agency Condition has been
met. Notwithstanding anything to the contrary contained in this Section 4.4(a),
the Manager shall be permitted to reorganize into a New Hampshire corporation
without having to satisfy any of the requirements of the preceding sentence.

 

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(b)    Resignation. The Manager shall not resign from the rights, powers,
obligations and duties hereby imposed on it except (i) upon determination that
(A) the performance of its duties hereunder is no longer permissible under
applicable law and (B) there is no reasonable action which the Manager could
take to make the performance of its duties hereunder permissible under
applicable law or (ii) if the Manager is terminated as the Manager pursuant to
Section 7.1(b). As to clause (i)(A) above, any such determination permitting the
resignation of the Manager shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee, the Back-Up Manager and the Control Party. No
such resignation shall become effective until a successor shall have assumed the
responsibilities and obligations of the Manager in accordance with Section
7.1(b). The Trustee, the Securitization Entities, the Back-Up Manager, the
Servicer and the Rating Agencies shall be notified of such resignation in
writing by the Manager. From and after such effectiveness, the Successor Manager
shall be, to the extent of the assignment, the “Manager” hereunder. Except as
provided above in this Section 4.4(b), the Manager may not assign this Agreement
or any of its rights, powers, duties or obligations hereunder.

(c)    Term of Agreement. Except as provided in Section 4.4(a) and Section
4.4(b), the duties and obligations of the Manager under this Agreement shall
continue until this Agreement shall have been terminated as provided in Section
9.1, and shall survive the exercise by the Master Issuer, the Trustee or the
Control Party of any right or remedy under this Agreement, or the enforcement by
the Master Issuer, the Trustee or any Noteholder of any provision of the
Indenture, the other Related Documents, the Notes or this Agreement.

SECTION 4.5 Taxes. The Manager shall file or cause to be filed all federal tax
returns and all material state and other tax returns which, to the Actual
Knowledge of the Manager, are required to be filed by the Manager, except where
the failure to do so would not reasonably be expected to result in a Material
Adverse Effect. The Manager shall pay or make adequate provisions for the
payment of all taxes shown as due on such returns, and all assessments made
against it or any of its property (other than any amount of tax the validity of
which is being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP have been provided on the
books of the Manager).

SECTION 4.6 Notice of Certain Events. Upon the occurrence of any of the
following events: (a) an ERISA Event, (b) notice of the institution of
proceedings or the taking of any other action by the PBGC or the Manager or any
member of its Controlled Group that is intended to result in the withdrawal
from, or the termination or insolvency of, any Single-Employer Plan or
Multiemployer Plan, (c) any action, suit, investigation or proceeding pending
or, to the Actual Knowledge of the Manager, threatened in writing against or
affecting the Manager, before or by any court, administrative agency, arbitrator
or governmental body having jurisdiction over the Manager or any of its
properties either asserting the illegality, invalidity or unenforceability of
any of the Related Documents, seeking any determination or ruling that would
affect the legality, binding effect, validity or enforceability of any of the
Related Documents or which could reasonably be expected to have a Material
Adverse Effect or (d) any material breach of violation of the provisions of
Section 4.9 hereof, the Manager shall provide written notice to the Trustee, the
Servicer, the Back-Up Manager and the Rating Agencies of the same promptly and
in any event within five (5) Business Days of obtaining Actual Knowledge of the
same.

 

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SECTION 4.7 Capitalization. The Manager shall have sufficient capital to perform
all of its obligations under this Agreement at all times from the Closing Date
and until the Indenture has been terminated in accordance with the terms
thereof.

SECTION 4.8 Franchise Law Determination. Upon final determination by any state
franchising authority that the Manager is required under state franchise
statutes or regulations to register as a franchise broker or franchise sales
agent in such state, the Manager within sixty (60) days of such determination
shall arrange for the filing of such documents on behalf of the Franchisor as
are necessary to register the Manager as a franchise broker or franchise sales
agent as required by such state franchising authority. Upon final determination
by any state franchising authority that the Manager is considered by such state
franchising authority to be a “subfranchisor”, the Manager within one-hundred
twenty (120) days of such determination shall file such documents and take such
other compliance actions as are required by such state franchising authority or
under such state’s franchise laws.

SECTION 4.9 Maintenance of Separateness. The Manager covenants that, except as
contemplated by the Related Documents:

(a)    the books and records of each Securitization Entity will be maintained
separately from those of the Manager and each of its Affiliates that is not a
Securitization Entity;

(b)    all financial statements of the Manager that are consolidated to include
any Securitization Entity and that are distributed to any party will contain
detailed notes clearly stating that (i) all of such Securitization Entity’s
assets are owned by such Securitization Entity, and (ii) such Securitization
Entity is a separate entity and, as may be applicable, has creditors who have
received interests in the Securitization Entity’s assets;

(c)    the Manager will observe (and will cause each of its Affiliates that is
not a Securitization Entity to observe) corporate or limited liability company
formalities in its dealing with any Securitization Entity;

(d)    except as contemplated under this Agreement, the Manager shall not (and
shall not permit any of its Affiliates that is not a Securitization Entity to)
commingle its funds with any funds of any Securitization Entity; provided that
the foregoing shall not prohibit the Manager or any successor to or assignee of
the Manager from holding funds of the Securitization Entity in its capacity as
manager for such entity in a segregated account identified for such purpose;

(e)    the Manager will (and shall cause each of its Affiliates that is not a
Securitization Entity to) maintain arm’s length relationships with each
Securitization Entity and each of the Manager and its Affiliates that are not
Securitization Entities will be compensated at market rates for any Services it
renders or otherwise furnishes to such Securitization Entity, it being
understood that the Management Fee, the Supplemental Management Fee and the
amounts paid pursuant the Collateral Transaction Documents (other than any
Charter Document) are representative of such arm’s length relationship between
any Securitization Entity, on the one hand, and any Non-Securitization Entity,
on the other hand;

 

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(f)    the Manager will not be, and will not hold itself out to be, responsible
for the debts of any Securitization Entity or the decisions or actions in
respect of the daily business and affairs of any Securitization Entity and the
Manager will not knowingly permit any Securitization Entity to hold the Manager
out to be responsible for the debts of such Securitization Entity or the
decisions or actions in respect of the daily business and affairs of such
Securitization Entity; and

(g)    upon an officer of the Manager obtaining Actual Knowledge that any of the
foregoing provisions in this Section 4.9 hereof has been breached or violated in
any material respect, the Manager will take such actions as may be reasonable
and appropriate under the circumstances to correct and remedy such breach or
violation as soon as reasonably practicable under such circumstances.

SECTION 4.10 Non-Securitization Debt Cap. Following the Closing Date, the
Manager shall not and shall not permit the other Non-Securitization Entities to
incur any additional Indebtedness for borrowed money (“Specified
Non-Securitization Debt”) if, after giving effect to such incurrence (and any
repayment of Specified Non-Securitization Debt on such date), such incurrence
would cause the aggregate outstanding principal amount of the Specified
Non-Securitization Debt of the Non-Securitization Entities as of such date to
exceed $50,000,000 (the “Specified Non-Securitization Debt Cap”); provided that
the Specified Non-Securitization Debt Cap shall not be applicable to Specified
Non-Securitization Debt that is (i) issued or incurred to refinance the Notes in
whole, (ii) in excess of the Specified Non-Securitization Debt Cap if (a) the
creditors (excluding (x) any creditor with respect to an aggregate amount of
outstanding Indebtedness less than $100,000 and (y) any Indebtedness incurred by
any Person prior to such Person becoming an Affiliate of a Non-Securitization
Entity) under and with respect to such Indebtedness execute a non-disturbance
agreement with the Trustee, as directed by the Manager and in a form reasonably
satisfactory to the Servicer and the Trustee, that acknowledges the terms of the
securitization transaction including the bankruptcy remote status of the
Securitization Entities and their assets and (b) after giving pro forma effect
to the incurrence of such Indebtedness (and any repayment of existing
Indebtedness and any related acquisition or other transaction occurring prior to
or substantially concurrently with the incurrence of such Indebtedness), the
Holdco Leverage Ratio (as calculated without regard to any Indebtedness that is
subject to the Specified Non-Securitization Debt Cap) is less than or equal to
7.0x, (iii) considered Indebtedness due solely to a change in accounting rules
that takes effect subsequent to the Closing Date but that was not (or, if such
obligations were not outstanding at the time of such change in accounting rules,
would not have been) considered Indebtedness prior to such date, (iv) in respect
of any obligation of any Non-Securitization Entity to reimburse the Master
Issuer for any draws under any one or more letters of credit or (v) with respect
to any Cash Collateralized Letters of Credit.

SECTION 4.11 Special Provisions as to Securitization IP.

(a)     The Manager acknowledges and agrees that the Franchisor has the right
and duty to control the goods and services offered under such Franchisor’s
Trademarks included in

 

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the Securitization IP and the manner in which such Trademarks are used in order
to maintain the validity and enforceability of and its ownership of the
Trademarks included in the Securitization IP. The Manager shall not take any
action contrary to the express written instruction of the Franchisor with
respect to: (A) the promulgation of standards with respect to the operation of
the Stores, including with respect to fitness equipment and facilities,
cleanliness, atmosphere, level of service, and appearance (or the making of
material changes to the existing standards), (B) the promulgation of standards
with respect to new businesses, products and services which the Franchisor
approves for inclusion in the license granted under any IP License Agreement (or
other license agreement or sublicense agreement for which the Manager is
performing IP Services), (C) the nature and implementation of means of
monitoring and controlling adherence to the standards, (D) the terms of any
Franchise Agreements and Area Development Agreements to which the Franchisor is
a party or of other sublicense agreements relating to the standards which
licensees must follow with respect to businesses, products, and services offered
under the Trademarks included in the Securitization IP and the usage of such
Trademarks, (E) the commencement and prosecution of enforcement actions with
respect to the Trademarks included in the Securitization IP and the terms of any
settlements thereof, (F) the adoption of any variations on the Planet Fitness
Brand which are not in use on the date hereof, or other new Trademarks to be
included in the Securitization IP, (G) the abandonment of any Securitization IP
and (H) any uses of the Securitization IP that are not consistent with the
Managing Standard. The Franchisor shall have the right to monitor the Manager’s
compliance with the foregoing and its performance of the IP Services and, in
furtherance thereof, Manager shall provide the Franchisor, at the Franchisor’s
written request from time to time, with copies of Franchise Documents,
Third-Party License Agreements and other sublicenses, samples of products and
materials bearing the Trademarks included in the Securitization IP used by
Franchisees, any manufacturer or distributor of proprietary products and other
licensees and sublicensees. Nothing in this Agreement shall limit the
Franchisor’s rights or the licensees’ obligations under the IP License
Agreements or any other agreement with respect to which the Manager is
performing IP Services.

SECTION 4.12 Restrictions on Dispositions and Liens. The Manager shall not sell,
transfer, assign, pledge, hypothecate or otherwise dispose, in whole or in part,
of any Equity Interest in the Master Issuer Parent. In addition, the Manager
shall not, and shall not permit any of its Subsidiaries to, create, incur,
assume, permit or suffer to exist any Lien (other than Liens in favor of the
Trustee for the benefit of the Secured Parties and any Permitted Lien set forth
in clauses (a), (h), (k) or (n) of the definition thereof) upon the Equity
Interests of any Securitization Entity.

SECTION 4.13 No Competition. The Manager shall not, and shall not permit the
other Non-Securitization Entities to, purchase Stores or other assets similar to
the Contributed Assets with the intention of competing with the Securitization
Entities; provided that the foregoing shall not limit the Manager or any other
Non-Securitization Entities from operating (i) the Retained Corporate-Owned
Stores, (ii) Reacquired Stores, (iii) any other asset that is intended at the
time of acquisition of such asset to be contributed the Securitization Entities
or (iv) any asset that the Manager is not required to contribute to the
Securitization Entities pursuant to SECTION 5.2(a)(i); provided, further, that
the foregoing shall not limit the Manager or any other Non-Securitization Entity
from operating any brand prior to such brand becoming a Future Brand.

 

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ARTICLE 5

REPRESENTATIONS, WARRANTIES AND COVENANTS AS TO NEW ASSETS

SECTION 5.1 Representations and Warranties Made in Respect of New Assets. The
Manager represents and warrants to the Master Issuer, the other Securitization
Entities, the Trustee and the Servicer, as of the dates set forth below (except
if otherwise expressly noted) as follows:

(a)    New U.S. Franchise Agreements. As of the applicable New Asset Addition
Date with respect to any New U.S. Franchise Agreement acquired or entered into
on such New Asset Addition Date:

(i)    Such New U.S. Franchise Agreement does not contain terms and conditions
that are reasonably expected to result in (A) a material decrease in the amount
of Collections or Retained Collections, taken as a whole, (B) a material adverse
change in nature, quality or timing of Collections, taken as a whole, (C) a
material adverse change in the types of underlying assets generating
Collections, taken as a whole, in each case when compared to the amount, nature
or quality of, or types of assets generating Collections that would have been
reasonably expected to result had such New U.S. Franchise Agreement been entered
into in accordance with the then-current Franchise Documents or (D) any
requirement to license Intellectual Property unless one of the Securitization
Entities possesses the full rights to license such Intellectual Property;

(ii)    Such New U.S. Franchise Agreement is genuine, and is the legal, valid
and binding obligation of the parties thereto and is enforceable against the
parties thereto in accordance with its terms (except as such enforceability may
be limited by bankruptcy or insolvency laws and by general principles of equity,
regardless of whether such enforceability shall be considered in a proceeding in
equity or at law);

(iii)    Such New U.S. Franchise Agreement complies in all material respects
with all applicable Requirements of Law;

(iv)    The Franchisee related to such New U.S. Franchise Agreement is not, to
the Actual Knowledge of the Manager, the subject of a bankruptcy proceeding;

(v)    Royalty Payments payable pursuant to such New U.S. Franchise Agreement
are payable by the related Franchisee at least monthly;

(vi)    Except as required by applicable Requirements of Law, such New U.S.
Franchise Agreement contains no contractual rights of set-off; and

(vii)     Except as required by applicable Requirements of Law, such New
Franchise Agreement is freely assignable by the applicable Securitization
Entities.

 

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(b)    New U.S. Area Development Agreements. As of the applicable New Asset
Addition Date with respect to any New U.S. Area Development Agreement acquired
on such New Asset Addition Date:

(i)    Such New U.S. Area Development Agreement does not contain terms and
conditions that are reasonably expected to result in (A) a material decrease in
the amount of Collections or Retained Collections, taken as a whole, (B) a
material adverse change in the nature, quality or timing of Collections, taken
as a whole, or (C) a material adverse change in the types of underlying assets
generating Collections, taken as a whole, in each case when compared to the
amount, nature or quality of, or types of assets generating Collections that
would have been reasonably expected to result had such New U.S. Area Development
Agreement been entered into in accordance with the then-current Franchise
Documents;

(ii)    Such New U.S. Area Development Agreement is genuine, and is the legal,
valid and binding obligation of the parties thereto and is enforceable against
the parties thereto in accordance with its terms (except as such enforceability
may be limited by bankruptcy or insolvency laws and by general principles of
equity, regardless of whether such enforceability shall be considered in a
proceeding in equity or at law);

(iii)    Such New U.S. Area Development Agreement complies in all material
respects with all applicable Requirements of Law;

(iv)    The Franchisee related to such New U.S. Area Development Agreement is
not, to the Actual Knowledge of the Manager, the subject of a bankruptcy
proceeding;

(v)    Except as required by applicable Requirements of Law, such New U.S. Area
Development Agreement contains no contractual rights of set-off; and

(vi)    Except as required by applicable Requirements of Law, such New U.S. Area
Development agreement is freely assignable by the applicable Securitization
Entities.

(c)    New Securitized Equipment Supply Agreements. As of the applicable New
Asset Addition Date with respect to any New Securitized Equipment Supply
Agreements, acquired or entered into on such New Asset Addition Date:

(i)    Such New Securitized Equipment Supply Agreement is the legal, valid and
binding obligation of the parties thereto, has been fully and properly executed
by the Securitization Entities party thereto and is enforceable in accordance
with its terms (except as such enforceability may be limited by bankruptcy or
insolvency laws and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law);

(ii)    The execution of such New Securitized Equipment Supply Agreement could
not be reasonably expected to have a Material Adverse Effect;

(iii)    No party to such New Securitized Equipment Supply Agreement is, to the
Actual Knowledge of the Manager, the subject of a bankruptcy proceeding;

(iv)    Such New Securitized Equipment Supply Agreement complies in all material
respects with all applicable Requirements of Law; and

 

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(v)    Except as required by applicable Requirements of Law, such agreement is
freely assignable by the applicable Securitization Entities.

(d)    New Securitized Authorized Vendor Contracts. As of the applicable New
Asset Addition Date with respect to any New Securitized Authorized Vendor
Contracts, acquired or entered into on such New Asset Addition Date:

(i)    Such New Securitized Authorized Vendor Contract is the legal, valid and
binding obligation of the parties thereto, has been fully and properly executed
by the Securitization Entities party thereto and is enforceable in accordance
with its terms (except as such enforceability may be limited by bankruptcy or
insolvency laws and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law);

(ii)    The execution of such New Securitized Authorized Vendor Contract could
not be reasonably expected to have a Material Adverse Effect;

(iii)    No party to such New Securitized Authorized Vendor Contract is, to the
Actual Knowledge of the Manager, the subject of a bankruptcy proceeding;

(iv)    Such New Securitized Authorized Vendor Contract complies in all material
respects with all applicable Requirements of Law; and

(v)    Except as required by applicable Requirements of Law, such agreement is
freely assignable by the applicable Securitization Entities.

(e)    New Contributed Corporate-Owned Store Assets. As of the applicable New
Asset Addition Date with respect to any New Contributed Corporate-Owned Store
Asset, acquired or entered into on such New Asset Addition Date:

(i)    The applicable Securitization Entity owns full legal and equitable title
to each such New Contributed Corporate-Owned Store Asset, free and clear of any
Lien (other than Permitted Liens); and

(ii)    The addition of such New Contributed Corporate-Owned Store Asset could
not be reasonably expected to have a Material Adverse Effect.

(f)    Franchisee Notes. As of the applicable New Asset Addition Date with
respect to a Franchisee Note, acquired or entered into on such New Asset
Addition Date:

(i)    Such agreement is genuine, and is the legal, valid and binding obligation
of the parties thereto and is enforceable against the parties thereto in
accordance with its terms (except as such enforceability may be limited by
bankruptcy or insolvency laws and by general principles of equity, regardless of
whether such enforceability shall be considered in a proceeding in equity or at
law);

(ii)    Such agreement complies in all material respects with all applicable
Requirements of Law;

 

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(iii)    The Franchisee related to such agreement is not the subject of a
bankruptcy proceeding; and

(iv)    Except as required by applicable Requirements of Law, such agreement is
freely assignable by the applicable Securitization Entities.

(g)    New Contributed Corporate-Owned Store Leases and Securitized Franchisee
Leases. As of the applicable New Asset Addition Date with respect to any New
Contributed Corporate-Owned Store Leases or Securitized Franchisee Leases, as
applicable, acquired or entered into on such New Asset Addition Date:

(i)    No material default by Planet Fitness Assetco, or to the Actual Knowledge
of the Manager, by any other party, exists under any provision of such lease,
and no condition or event exists, that, after notice or lapse of time or both,
would constitute a material default thereunder by Planet Fitness Assetco or, to
the Actual Knowledge of the Manager, by any other party, except where such
default would not be reasonably expected to have a Material Adverse Effect;

(ii)    To Manager’s Actual Knowledge, such New Contributed Corporate-Owned
Store Leases or Securitized Franchisee Leases, as the case may be, and the use
thereof, comply in all material respects with all applicable legal requirements,
including local building and zoning ordinances and codes and the certificate of
occupancy issued for such property, except where such failure to comply would
not be reasonably expected to have a Material Adverse Effect;

(iii)    Neither Planet Fitness Assetco, nor, to the Actual Knowledge of the
Manager, the related sub-lessee (if any) has committed any act or omission
affording any Governmental Authority the right of forfeiture against such
property;

(iv)    No condemnation or similar proceeding has been commenced nor, to the
Actual Knowledge of the Manager, is threatened in writing with respect to all or
any material portion of such New Contributed Corporate-Owned Store Leases or
Securitized Franchisee Leases, as the case may be, that was not considered in
the leasing of such New Contributed Corporate-Owned Store Leases or Securitized
Franchisee Leases;

(v)    All policies of insurance (a) required to be maintained by Planet Fitness
Assetco under such lease and (b) with respect to any Securitized Franchise
Leases, to the Actual Knowledge of the Manager, required to be maintained by the
Franchisee under the related sublease, are valid and in full force and effect,
except where a failure to maintain such insurance would not be reasonably
expected to have a Material Adverse Effect. Notwithstanding anything to the
contrary herein, the representation set forth in this Section 5.1(b)(vi)(v) with
respect to the policies to be maintained by Planet Fitness Assetco pursuant to
such Securitized Franchisee Lease shall be deemed accurate if Planet Fitness
Assetco has contractually obligated the Franchisee party to such related
Securitized Franchisee Leases to maintain insurance with respect to such
Securitized Franchisee Lease in a manner that is customary for business
operations of this type; and

 

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(vi)    All material certifications, permits, licenses and approvals, including
certificates of completion and occupancy permits required for the legal use,
occupancy and operation of the Store on any applicable New Contributed
Corporate-Owned Store Leases or Securitized Franchisee Lease, if such property
is open for business, have been obtained and are in full force and effect.

The Manager shall not enter into any lease included in the New Contributed
Corporate-Owned Store Leases or the Securitized Franchisee Leases after the
Closing Date which (i) requires Holdco or its Affiliates (other than the
Securitization Entities) to provide a guaranty of any obligation of any
Securitization Entity or (ii) includes any event of default under such lease on
the part of any Securitization Entity due to a bankruptcy of Holdco or its
Affiliates (other than the Securitization Entities).

(h)    New Foreign Area Development Agreements. As of the applicable New Asset
Addition Date with respect to any New Foreign Area Development Agreement
acquired or entered into on such New Asset Addition Date:

(i)    Such New Foreign Area Development Agreement does not contain terms and
conditions that are reasonably expected to result in (A) a material decrease in
the amount of Collections or Retained Collections, taken as a whole, (B) a
material adverse change in the nature, quality or timing of Collections, taken
as a whole, or (C) a material adverse change in the types of underlying assets
generating Collections, taken as a whole, in each case when compared to the
amount, nature or quality of, or types of assets generating Collections that
would have been reasonably expected to result had such New Foreign Area
Development Agreement been entered into in accordance with the then-current
Franchise Documents;

(ii)    Such New Foreign Area Development Agreement is the legal, valid and
binding obligation of the parties thereto, has been fully and properly executed
by the Securitization Entities party thereto and is enforceable in accordance
with its terms (except as such enforceability may be limited by bankruptcy or
insolvency laws and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law),

(iii)    Such New Foreign Area Development Agreement complies in all material
respects with all applicable Requirements of Law and, in the case of a New
Foreign Area Development Agreement governing (A) the operation of the first
Franchise Store opened in a New Foreign Country or (B) the operation of a
Franchise Store under a different business relationship than previously existed
between a Securitization Entity and any Franchisee in such Foreign Country, the
Manager has obtained a legal opinion or other evidence reasonably acceptable to
the Control Party to the effect that such New Foreign Area Development Agreement
complies in all material respects with all applicable Requirements of Law in
such Foreign Country;

(iv)    Except as required by applicable Requirements of Law, such New Foreign
Area Development agreement contains no contractual rights of set-off; and

 

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(v)    No Franchisee party to such New Foreign Area Development Agreement is, to
the Actual Knowledge of the Manager, the subject of a bankruptcy proceeding.

(i)    After-Acquired Securitization IP. With respect to any After-Acquired
Securitization IP contributed by the Manager (indirectly, through the Holding
Company Guarantor and the Master Issuer) to the Franchisor on the applicable New
Asset Addition Date, as of such New Asset Addition Date the Manager has all
necessary rights, title and interest in such After-Acquired Securitization IP to
make such contribution.

(j)    New Foreign Franchise Agreements. As of the applicable New Asset Addition
Date with respect to any New Foreign Franchise Agreement acquired or entered
into on such New Asset Addition Date:

(i)    Such New Foreign Franchise Agreement does not contain terms and
conditions that are reasonably expected to result in (A) a material decrease in
the amount of Collections or Retained Collections, taken as a whole, (B) a
material adverse change in the nature, quality or timing of Collections, taken
as a whole, or (C) a material adverse change in the types of underlying assets
generating Collections constituting, taken as a whole, in each case when
compared to the amount, nature or quality of, or types of assets generating
Collections that would have been reasonably expected to result had such New
Foreign Franchise Agreement been entered into in accordance with the
then-current Franchise Documents; or (D) any requirement to license Intellectual
Property unless one of the Securitization Entities possesses the full rights to
license such Intellectual Property;

(ii)    Such New Foreign Franchise Agreement is the legal, valid and binding
obligation of the parties thereto, has been fully and properly executed by the
Securitization Entities party thereto and is enforceable in accordance with its
terms (except as such enforceability may be limited by bankruptcy or insolvency
laws and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law);

(iii)    Such New Foreign Franchise Agreement complies in all material respects
with all applicable Requirements of Law and, in the case of a New Foreign
Franchise Agreement governing (A) the operation of the first Franchise Store
opened in a New Foreign Country or (B) the operation of a Franchise Store under
a different business relationship than previously existed between a
Securitization Entity and any Franchisee in such Foreign Country, the Manager
has obtained a legal opinion or other evidence reasonably acceptable to the
Control Party to the effect that such New Foreign Franchise Agreement complies
in all material respects with all applicable Requirements of Law in such Foreign
Country;

(iv)    Except as required by applicable Requirements of Law, such New Foreign
Franchise Agreement contains no contractual rights of set-off; and

(v)    No Franchisee party to such New Foreign Franchise Agreement is, to the
Actual Knowledge of the Manager, the subject of a bankruptcy proceeding.

 

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SECTION 5.2 Covenants in Respect of New Collateral.

(a)    New Assets.

(i)    The Manager shall cause the applicable Securitization Entity to enter
into or acquire each of the following, to the extent entered into or acquired
after the Closing Date: (a) all New Franchise Agreements, New Area Development
Agreements and Franchisee Notes, (b) all After-Acquired Securitization IP,
(c) all New Securitized Corporate-Owned Stores and the related New Contributed
Corporate-Owned Store Assets and New Contributed Corporate-Owned Store Leases,
(d) all New Securitized Equipment Supply Agreements and (e) all Securitized
Franchisee Leases; provided, that the Manager shall not be required to cause any
Securitization Entity to enter into any agreements or acquire any other assets
relating to the Franchise Store Business, the Securitized Corporate-Owned Store
Business or the equipment distribution business in any country other than the
United States and, solely with respect to the acquisition of After-Acquired
Securitization IP, Canada. The Manager may, but will not be obligated to,
contribute to the Master Issuer or its applicable Subsidiary, or otherwise cause
the Master Issuer or its applicable Subsidiary to enter into, develop or acquire
other assets and liabilities of a type and nature similar to the Securitized
Assets held by the Securitization Entities on the Closing Date (“Other Assets”).

(ii)     (A) Unless otherwise agreed to in writing by the Control Party, any
contribution to, or development or acquisition by, the Master Issuer or any
other Securitization Entity of any New Franchise Agreements, New Area
Development Agreements, Franchisee Notes, New Securitized Equipment Supply
Agreements, New Securitized Authorized Vendor Contracts, New Securitized
Corporate-Owned Stores, New Contributed Corporate-Owned Store Assets, New
Contributed Corporate-Owned Store Leases and new Securitized Franchisee Leases
shall be subject to all applicable provisions of the Indenture, this Agreement
(including the applicable representations and covenants in Article 2 and Article
5 of this Agreement), the IP License Agreements and any other relevant Related
Documents.

(B)    Unless otherwise agreed to in writing by the Control Party, any
contribution to, or development or acquisition by, the Master Issuer of Other
Assets shall be subject to applicable provisions of the Indenture, this
Agreement and the IP License Agreements. The Control Party shall have the right
to approve the Securitization Entity that shall hold any such Other Assets
(including the right to direct that such Other Assets be held by one or more
newly formed Additional Securitization Entities if the Control Party reasonably
believes such Other Assets could impair the Collateral).

(iii)    The Manager shall have the right to form an Additional Securitization
Entity for the purpose of holding Other Assets until such time as the Control
Party shall direct the Manager as to which Securitization Entity should hold
such Other Asset.

(iv)    Without the consent of the Control Party, the Manager or its Affiliates
shall not have the right to contribute any assets (other than cash or Notes) or
assign any liabilities to the Master Issuer, or cause the Master Issuer or its
Subsidiaries to enter into any arrangements, except as provided in this Section
5.2(a) or as otherwise permitted under the Related Documents.

 

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SECTION 5.3 Securitization IP. All Securitization IP shall be owned solely by
the Franchisor and shall not be assigned, transferred or licensed out by the
Franchisor to any other entity other than as permitted or provided under the
Related Documents.

ARTICLE 6

[RESERVED]

ARTICLE 7

DEFAULT

SECTION 7.1 Manager Termination Events.

(a)    Manager Termination Events. Any of the following acts or occurrences
shall constitute a Manager Termination Event under this Agreement, the assertion
as to the occurrence of which may be made, and notice of which may be given, by
the Master Issuer, the Control Party, the Back-Up Manager or the Trustee (acting
at the direction of the Control Party):

(i)    any failure by the Manager to remit a payment required to be deposited
from a Concentration Account to the Collection Account or any other Indenture
Trust Account, within three (3) Business Days (unless such payment requires an
international funds transfer, in which case such funds must be deposited to the
applicable account within five (5) Business Days of receipt) of the later of
(a) its Actual Knowledge of its receipt thereof and (b) the date such deposit is
required to be made pursuant to the Related Documents; provided that any
inadvertent failure to remit such a payment shall not be a breach of this clause
(i) if in an amount less than $5,000,000 and cured within three (3) Business
Days of a Manager Termination Event under this clause (i) (unless such payment
requires an international funds transfer, in which case such breach may be cured
within five (5) Business Days of a Manager Termination Event under this clause
(i)) after the Manager obtains Actual Knowledge thereof (it being understood
that the Manager shall not be responsible for the failure of the Trustee to
remit funds that were received by the Trustee from or on behalf of the Manager
in accordance with the applicable Related Documents);

(ii)    the Interest-Only DSCR as calculated as of any Quarterly Calculation
Date is less than 1.20x;

(iii)    any failure by the Manager to provide any required certificate or
report set forth in SECTIONS 4.1(a), (b), (c), (d), (e), (f) or (g) of the Base
Indenture within three (3) Business Days of its due date;

(iv)    a material default by the Manager in the due performance and observance
of any provisions of this Agreement or any other Related Document to which it is
a party (other than as described above) and the continuation of such default for
a period of thirty (30) days after the Manager has been notified thereof in
writing by any Securitization Entity or the Control Party; provided, that if any
such default is capable of being remedied within thirty (30) days after the
Manager has obtained Actual Knowledge of such breach or the Manager’s receipt of
written notice thereof, then a Manager Termination Event shall only occur under
this clause (iv) as a

 

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result of such breach if it is not cured in all material respects by the end of
such 30-day period; provided, further, that no Manager Termination Event shall
occur pursuant to this clause (iv) due to the breach of any covenant relating to
any New Asset set forth in Article 5 so long as the Manager has complied with
Section 2.8(b) and Section 2.8(c) if such damages are required to be paid with
respect to such breach;

(v)    any material breach by the Manager of any representation, warranty or
statement of the Manager made in this Agreement or any other Related Document or
in any certificate, report or other writing delivered pursuant thereto that is
not qualified by materiality or the definition of “Material Adverse Effect” as
of the time when the same was made or deemed to have been made or as of any
other date specified in such document or agreement; provided that if any such
breach is capable of being remedied within thirty (30) days after the Manager
has obtained Actual Knowledge of such breach or the Manager’s receipt of written
notice thereof, then a Manager Termination Event shall only occur under this
clause (v) as a result of such breach if it is not cured in all material
respects by the end of such 30-day period; provided, further, that no Manager
Termination Event shall occur pursuant to this clause (v) due to the breach of
any representation, warranty or statement relating to any New Asset set forth in
Article 5 so long as the Manager has complied with Section 2.8(b) and Section
2.8(c) if such damages are required to be paid with respect to such breach;

(vi)    any breach by the Manager of any representation, warranty or statement
of the Manager made in this Agreement or any other Related Document or in any
certificate, report or other writing delivered pursuant thereto that is
qualified by materiality or the definition of “Material Adverse Effect” as of
the time when the same was made or deemed to have been made or as of any other
date specified in such document or agreement; provided that if any such breach
is capable of being remedied within thirty (30) days after the Manager has
obtained Actual Knowledge of such breach or the Manager’s receipt of written
notice thereof, then a Manager Termination Event shall only occur under this
clause (vi) as a result of such breach if it is not cured in all material
respects by the end of such 30-day period; provided, further, that no Manager
Termination Event shall occur under this clause (vi) due to the breach of a
representation or warranty relating to any New Asset set forth in Article 5 so
long as the Manager has complied with Section 2.8(b) and Section 2.8(c) with
respect to such breach by taking any action required to be taken;

(vii)    an Event of Bankruptcy with respect to the Manager shall have occurred;

(viii)    any final, non-appealable order, judgment or decree is entered in any
proceedings against the Manager by a court of competent jurisdiction decreeing
the dissolution of the Manager and such order, judgment or decree remains
unstayed and in effect for more than ten (10) days;

(ix)    a final non-appealable judgment for an amount in excess of $50,000,000
(exclusive of any portion thereof which is insured) is rendered against the
Manager by a court of competent jurisdiction and is not paid, discharged or
stayed within sixty (60) days of the date when due;

 

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(x)    an acceleration of more than $50,000,000 of the Indebtedness of the
Manager which Indebtedness has not been discharged or which acceleration has not
been rescinded and annulled;

(xi)    this Agreement or a material portion thereof ceases to be in full force
and effect or enforceable in accordance with its terms (other than in accordance
with the express termination provisions hereof) or the Manager asserts as much
in writing;

(xii)     a failure by any Non-Securitization Entity to comply with the
Specified Non-Securitization Debt Cap, and such failure has continued for a
period of forty-five (45) days after the Manager has been notified in writing by
any Securitization Entity, the Control Party, the Back-Up Manager or the
Trustee, or otherwise has obtained Actual Knowledge of such non-compliance; and

(xiii)    the occurrence of a Change in Management with respect to the Manager
following the occurrence of a Change of Control.

(b)    Remedies. If a Manager Termination Event has occurred and is continuing,
the Control Party (acting at the direction of the Controlling
Class Representative) may (i) waive such Manager Termination Event (except for a
Manager Termination Event described in clauses (vii) or (viii) of Section
7.1(a)) or (ii) direct the Trustee in writing to terminate the Manager in its
capacity as such by the delivery of a termination notice (the “Termination
Notice”) to the Manager (with a copy to each of the Securitization Entities, the
Trustee, the Back-Up Manager and the Rating Agencies); provided that the
delivery of a Termination Notice shall not be required in respect of any Manager
Termination Event described in clauses (vii) or (viii) of Section 7.1(a). If the
Trustee, acting at the direction of the Control Party (acting at the direction
of the Controlling Class Representative), delivers a Termination Notice to the
Manager pursuant to this Agreement (or automatically upon the occurrence of any
Manager Termination Event relating to any Manager Termination Event described in
clauses (vii) or (viii) of Section 7.1(a)) all rights, powers, duties,
obligations and responsibilities of the Manager under this Agreement and the
other Related Documents (other than with respect to the payment of
Indemnification Amounts or its obligations with respect to Disentanglement),
including with respect to the Accounts or otherwise, will vest in and be assumed
by the Successor Manager appointed by the Control Party (acting at the direction
of the Controlling Class Representative). If no Successor Manager has been
appointed by the Control Party (acting at the direction of the Controlling
Class Representative), the Back-Up Manager will serve as the Successor Manager
and will work with the Servicer to implement the Transition Plan (as defined in
the Back-Up Management Agreement) until a Successor Manager (other than the
Back-Up Manager) has been appointed by the Control Party (acting at the
direction of the Controlling Class Representative).

(c)    From and during the continuation of a Manager Termination Event where the
rights and powers of the Manager have been terminated, each Securitization
Entity and the Trustee (acting at the direction of the Control Party) are hereby
irrevocably authorized and empowered to execute and deliver, on behalf of the
Manager, as attorney in fact or otherwise, all documents and other instruments
(including any notices to Franchisees deemed necessary or advisable by the
applicable Securitization Entity or the Control Party), and to do or accomplish
all other acts or things necessary or appropriate, to effect such vesting and
assumption.

 

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(d)    Notice of Manager Termination Event. Promptly after the occurrence of any
Manager Termination Event pursuant to Section 7.1(a), the Manager shall transmit
notice of such Manager Termination Event to the Control Party and the Trustee,
with a copy to each Rating Agency and the Back-Up Manager.

SECTION 7.2 Disentanglement.

(a)    Obligations. Upon termination of the Manager pursuant to a Termination
Notice following a Manager Termination Event, the Manager will cooperate fully
with the Back-Up Manager and the Control Party in connection with the
implementation of the Transition Plan (as defined in the Back-Up Management
Agreement) and the complete transition to a Successor Manager, without
interruption or adverse impact on the provision of Services (the
“Disentanglement”). The Manager will cooperate fully with the Successor Manager
and otherwise promptly take all actions required to assist in effecting a
complete Disentanglement and shall follow any directions that may be provided by
the Control Party or the Back-Up Manager. The Manager will provide all
information and assistance regarding the terminated Services required for
Disentanglement, including data conversion and migration, interface
specifications, and related professional services. The Manager will provide for
the prompt and orderly conclusion of all work, as the Control Party may direct,
including completion or partial completion of projects, documentation of all
work in progress, and other measures to assure an orderly transition to the
Successor Manager. All services relating to Disentanglement (“Disentanglement
Services”), including all reasonable training for personnel of the Back-Up
Manager, the Successor Manager or the Successor Manager’s designated alternate
service provider in the performance of the Services, will be deemed a part of
the Services to be performed by the Manager. The Manager will use commercially
reasonable efforts to utilize existing resources to perform the Disentanglement
Services.

(b)    Charges for Disentanglement Services. So long as the Manager continues to
provide the Services (whether or not the Manager has been terminated as Manager)
during the Disentanglement Period, the Manager shall continue to be paid the
Management Fee. Upon the Successor Manager’s assumption of the obligation to
perform the Services, the Manager shall be entitled to reimbursement of its
actual costs for the provision of any Disentanglement Services.

(c)    Duration of Disentanglement Obligations. The Manager’s obligation to
provide Disentanglement Services will not cease until the earlier of (a) the
date a Disentanglement reasonably satisfactory to the Control Party has been
completed and (b) the date the Disentanglement Period expires. The
“Disentanglement Period” means the period of time designated by the Control
Party, continuing for up to eighteen (18) months after the date of the Manager’s
termination due to a Manager Termination Event. The Disentanglement Period will
commence on the date that the Manager is terminated.

 

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(d)    Sub-Management Arrangements; Authorizations.

(i)    With respect to any Sub-Management Arrangement, unless the Control Party
elects to terminate such Sub-Management Arrangement in accordance with Section
2.12 hereof, the Manager will:

(A)    assign to the Successor Manager or its designated alternate service
provider all of the Manager’s rights under such Sub-Management Arrangement to
which it is party used by the Manager in performance of the transitioned
Services; and

(B)    procure any third party authorizations necessary to grant the Successor
Manager or its designated alternate service provider the use and benefit of such
Sub-Management Arrangement to which it is party used by the Manager in
performing the transitioned Services, pending their assignment to the Successor
Manager under this Agreement.

(ii)    If the Control Party elects to terminate such Sub-Management Arrangement
in accordance with Section 2.12 hereof, the Manager will take all reasonable
actions necessary or reasonably requested by the Control Party to accomplish a
complete transition of the Services performed by such Sub-Manager to the
Successor Manager, or to any alternate service provider designated by the
Control Party, without interruption or adverse impact on the provision of
Services.

(e)    Confidential Information. The Manager will comply with the terms of
Article 8 relating to the return and destruction of Confidential Information.

(f)    Third Party Intellectual Property. The Manager will assist the Successor
Manager or its designated alternate service provider in obtaining any necessary
licenses or consents to any third-party Intellectual Property then being used by
the Manager or any Sub-Manager. The Manager will assign any such license or
sublicense directly to the Successor Manager or its designated alternate service
provider to the extent the Manager has the necessary rights to assign such
agreements to the Successor Manager without incurring any additional cost.

SECTION 7.3 Intellectual Property. Within ninety (90) days of termination of
this Agreement for any reason, the Manager shall deliver and surrender up to the
Securitization Entities (with a copy to the Successor Manager and the Servicer)
any and all products, materials, or other physical objects bearing, containing,
or embodying any Securitization IP or Confidential Information of the
Securitization Entities, including any materials bearing Trademarks included in
the Securitization IP and any copies of copyrighted works included in the
Securitization IP in the Manager’s possession or control, and shall terminate
all use of all Securitization IP, including Trade Secrets; provided that (for
the avoidance of doubt) any rights granted to Planet Fitness Holdings and the
other Non-Securitization Entities as licensees pursuant to the IP License
Agreements shall continue pursuant to the terms thereof notwithstanding the
termination of this Agreement and/or Planet Fitness Holdings’ role as Manager;
and provided further that (for the avoidance of doubt), Manager shall continue
to maintain the confidentiality and secrecy of all Trade Secrets and other
Confidential Information included in the Securitization IP in perpetuity.

SECTION 7.4 No Effect on Other Parties. Upon any termination of the rights and
powers of the Manager from time to time pursuant to Section 7.1 or upon any
appointment of a Successor Manager, all the rights, powers, duties, obligations
and responsibilities of the Securitization Entities or the Trustee under this
Agreement, the Indenture and the other Related Documents shall remain unaffected
by such termination or appointment and shall remain in full force and effect
thereafter, except as otherwise expressly provided in this Agreement or in the
Indenture.

 

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SECTION 7.5 Rights Cumulative. All rights and remedies from time to time
conferred upon or reserved to the Securitization Entities, the Trustee, the
Servicer, the Control Party, the Back-Up Manager or the Noteholders or to any or
all of the foregoing are cumulative, and none is intended to be exclusive of
another or any other right or remedy which they may have at law or in equity.
Except as otherwise expressly provided herein, no delay or omission in insisting
upon the strict observance or performance of any provision of this Agreement, or
in exercising any right or remedy, shall be construed as a course of dealing,
waiver or relinquishment of such provision, nor shall it impair such right or
remedy. Every right and remedy may be exercised from time to time and as often
as deemed expedient.

ARTICLE 8

CONFIDENTIALITY

SECTION 8.1 Confidentiality.

(a)    Each of the parties hereto acknowledges that during the term of this
Agreement each party (the “Recipient”) may receive Confidential Information from
the other party (the “Discloser”). Each party agrees to maintain the
Confidential Information in the strictest of confidence and will not, at any
time, use, disseminate or disclose any Confidential Information to any person or
entity other than those of (i) its officers, directors, managers, employees,
agents, advisors or representatives (including legal counsel or accountants) or
(ii) in the case of the Manager and the Securitization Entities, Franchisees and
prospective Franchisees, suppliers or other service providers under written
confidentiality agreements that contain provisions at least as protective as
those set forth in this Agreement. Recipient shall be liable for any breach of
this Article 8 by any of its officers, directors, managers, employees, agents,
advisors, representatives, Franchisees and prospective Franchisees, suppliers or
other service providers and shall immediately notify Discloser in the event of
any loss or disclosure of any Confidential Information of Discloser and shall
reasonably assist and cooperate, at the expense of the Master Issuer, with
Discloser with respect to any investigation, disclosures to affected parties,
and other remedial measures as requested by Discloser. Each party agrees to
protect the confidentiality, integrity and availability of Confidential
Information it receives, and shall not use any less than the same degree of care
that it uses to protect its own Confidential Information.. Upon termination of
this Agreement, Recipient will return to Discloser, or at Discloser’s request,
destroy all documents and records in its possession containing the Confidential
Information of Discloser. Confidential Information shall not include information
that: (i) is already known to Recipient without restriction on use or disclosure
prior to receipt of such information from Discloser; (ii) is or becomes part of
the public domain other than by breach of this Agreement by, or other wrongful
act of, Recipient; (iii) is developed by Recipient independently of and without
reference to any Confidential Information; (iv) is received by Recipient from a
third party who is not under any obligation to Discloser to maintain the
confidentiality of such information; or (v) is required to be disclosed by the
Indenture, the Related Documents, applicable law, statute, rule, regulation,
subpoena, court order or legal process; provided that the Recipient shall
promptly inform the Discloser of any such requirement and cooperate with any
attempt by the Discloser to obtain a protective order or other similar
treatment. It shall be the obligation of Recipient to prove that such an
exception to the definition of Confidential Information exists.

 

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(b)    Notwithstanding anything to the contrary contained in Section 8.1(a), the
Securitization Entities, the Trustee, the Servicer, the Back-Up Manager or the
Noteholders may use, disseminate or disclose any Confidential Information to any
person or entity in connection with the enforcement of rights of the
Securitization Entities, the Trustee, the Servicer, the Back-Up Manager or the
Noteholders under the Indenture or the Related Documents; provided, however,
that prior to disclosing any such Confidential Information:

(i)    to any such person or entity other than in connection with any judicial
or regulatory proceeding, such person or entity shall agree in writing to
maintain such Confidential Information in a manner at least as protective of the
Confidential Information as the terms of Section 8.1(a); or

(ii)    to any such person or entity in connection with any judicial or
regulatory proceeding, the Recipient will (x) promptly notify Discloser of each
such requirement and identify the documents so required thereby, so that
Discloser may seek an appropriate protective order or similar treatment and/or
waive compliance with the provisions of this Agreement; (y) use reasonable
efforts to assist Discloser in obtaining such protective order or other similar
treatment protecting such Confidential Information prior to any such disclosure;
and (z) consult with Discloser on the advisability of taking legally available
steps to resist or narrow the scope of such requirement. If, in the absence of
such a protective order or similar treatment, the Recipient is nonetheless
required by Requirements of Law to disclose any part of Discloser’s Confidential
Information which is disclosed to it under this Agreement, the Recipient may
disclose such Confidential Information without liability under this Agreement,
except that the Recipient will furnish only that portion of the Confidential
Information which is legally required.

ARTICLE 9

MISCELLANEOUS PROVISIONS

SECTION 9.1 Termination of Agreement. The respective duties and obligations of
the Manager and the Securitization Entities created by this Agreement shall
terminate upon the earlier to occur of (x) the final payment or other
liquidation of the last Securitized Asset and (y) the satisfaction and discharge
of the Indenture pursuant to ARTICLE Twelve of the Base Indenture. Upon
termination of this Agreement pursuant to this Section 9.1, the Manager shall
pay over to the applicable Securitization Entity or any other Person entitled
thereto all proceeds of the Securitized Assets held by the Manager. The
provisions of Sections 2.1(c), 2.8 and 2.9 shall survive termination of this
Agreement.

SECTION 9.2 Amendment.

(a)    This Agreement may only be amended, from time to time, in writing, upon
the written consent of the Trustee (acting at the direction of the Control
Party) the Securitization Entities, and the Manager; provided that any amendment
that would materially adversely affect the interests of the Noteholders shall
require the consent of the Control Party, which consent shall not be
unreasonably withheld or delayed; provided, further that no consent of the
Trustee or the Control Party shall be required in connection with any amendment
to accomplish any of the following:

(i)    to correct or amplify the description of any required activities of the
Manager;

 

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(ii)    to add to the duties or covenants of the Manager for the benefit of any
Noteholders or any other Secured Parties, or to add provisions to this Agreement
so long as such action does not modify the Managing Standard, materially
adversely affect the enforceability of the Securitization IP or materially
adversely affect the interests of the Noteholders;

(iii)    to correct any manifest error or to cure any ambiguity, defect or
provision that may be inconsistent with the terms of the Base Indenture or any
other Related Document, or to correct or supplement any provision herein that
may be inconsistent with the terms of the Base Indenture or each offering
memorandum for the Notes;

(iv)    to evidence the succession of another Person to any party to this
Agreement;

(v)    to comply with Requirements of Law;

(vi)    to take any action necessary and appropriate to facilitate the
origination of Managed Documents, the acquisition and management of Securitized
Franchisee Leases, or the management and preservation of the Managed Documents,
in each case, in accordance with the Managing Standard; or

(vii)    to provide for additional Services to be provided by the Manager.

(b)    Promptly after the execution of any amendment, the Manager shall send to
the Trustee, the Servicer, the Back-Up Manager and each Rating Agency a copy of
such amendment, but the failure to do so will not impair or affect its validity.

(c)    Any amendment or modification effected contrary to the provisions of this
Section 9.2 shall be null and void.

SECTION 9.3 Amendments to Other Agreements. The Master Issuer and the Trustee
each agree not to amend the Indenture or the Related Documents to which it is a
party without the Manager’s consent if such amendment would materially increase
the Manager’s obligations or liabilities, or materially decrease the Manager’s
rights or remedies under this Agreement, the Indenture or any other Related
Document.

SECTION 9.4 Acknowledgement. Without limiting the foregoing, the Manager hereby
acknowledges that, on the date hereof, certain of the Securitization Entities
will pledge to the Trustee under the Indenture and the Guarantee and Collateral
Agreement, all of such Securitization Entities’ right and title to, and interest
in, this Agreement and the Collateral; and such pledge includes all of such
Securitization Entities’ rights, remedies, powers and privileges, and all claims
of such Securitization Entities’ against the Manager, under or with respect to
this Agreement (whether arising pursuant to the terms of this Agreement or
otherwise available at law or in equity), including (i) the rights of such
Securitization Entities and the obligations of the Manager hereunder and
(ii) the right, at any time, to give or withhold consents, requests, notices,
directions, approvals, demands, extensions or waivers under or with respect to
this Agreement or

 

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the obligations in respect of the Manager hereunder to the same extent as such
Securitization Entities may do. The Manager hereby consents to such pledges
described above, acknowledges and agrees that the Control Party shall be
third-party beneficiaries of the rights of such Securitization Entities arising
hereunder and agrees that the Trustee or the Control Party may, to the extent
provided in the Indenture and the Guarantee and Collateral Agreement, enforce
the provisions of this Agreement, exercise the rights of such Securitization
Entities and enforce the obligations of the Manager hereunder without the
consent of the such Securitization Entities.

SECTION 9.5 Governing Law; Waiver of Jury Trial; Jurisdiction.

(a)    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

(b)    THE PARTIES HERETO EACH HEREBY IRREVOCABLY WAIVE TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

(c)    The parties hereto each hereby irrevocably and unconditionally

(i)    submits for itself and its property in any legal action or proceeding
relating to this Agreement and the Related Documents to which it is a party, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York
sitting in New York County, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;

(ii)    consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

(iii)    agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the applicable party at
its address set forth in Section 14.1 of the Base Indenture or at such other
address of which the other parties hereto shall have been notified pursuant to
SECTION 9.6;

(iv)    agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(v)    waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
SECTION 9.4 any special, exemplary, punitive or consequential damages.

SECTION 9.6 Notices. All notices, requests or other communications desired or
required to be given under this Agreement shall be in writing and shall be sent
by (a) certified or registered mail, return receipt requested, postage prepaid,
(b) national prepaid overnight delivery service, (c) telecopy or other facsimile
or electronic mail transmission of a .pdf or similar file, (d)

 

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personal delivery with receipt acknowledged in writing, to the address set forth
in the Indenture or (e) email (which email may contain a link to a
password-protected website containing such notice for which the recipient has
been granted access). If the Indenture or this Agreement permits reports to be
posted to a password-protected website, such reports shall be deemed delivered
when posted on such website. Any party hereto may change its address for notices
hereunder by giving notice of such change to the other parties hereto, with a
copy to the Control Party. The Manager shall notify the other parties hereto of
any change of the identity or address of the Controlling Class Representative.
All notices and demands to any Person hereunder shall be deemed to have been
given either at the time of the delivery thereof at the address of such Person
for notices hereunder, or on the third day after the mailing thereof to such
address, as the case may be.

SECTION 9.7 Severability of Provisions. If one or more of the provisions of this
Agreement shall be for any reason whatever held invalid or unenforceable, such
provisions shall be deemed severable from the remaining covenants, agreements
and provisions of this Agreement and such invalidity or unenforceability shall
in no way affect the validity or enforceability of such remaining provisions, or
the rights of any parties hereto. To the extent permitted by law, the parties
hereto waive any provision of law which renders any provision of this Agreement
invalid or unenforceable in any respect.

SECTION 9.8 Delivery Dates. If the due date of any notice, certificate or report
required to be delivered by the Manager hereunder falls on a day that is not a
Business Day, the due date for such notice, certificate or report shall be
automatically extended to the next succeeding day that is a Business Day.

SECTION 9.9 Limited Recourse. The obligations of the Securitization Entities
under this Agreement are solely the limited liability company obligations of the
Securitization Entities. The Manager agrees that the Securitization Entities
shall be liable for any claims that it may have against the Securitization
Entities only to the extent that funds or assets are available to pay such
claims pursuant to the Indenture and that, to the extent that any such claims
remain unpaid after the application of such funds and assets in accordance with
the Indenture, such claims shall be extinguished.

SECTION 9.10 Binding Effect; Limited Rights of Others. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto. Except as provided in the
preceding sentence, nothing in this Agreement expressed or implied, shall be
construed to give any Person other than the parties hereto any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
covenants, agreements, representations or provisions contained herein.

SECTION 9.11 Article and Section Headings. The Article and Section headings
herein are for convenience of reference only, and shall not limit or otherwise
affect the meaning hereof.

SECTION 9.12 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.

 

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SECTION 9.13 Entire Agreement. This Agreement, together with the Indenture and
the other Related Documents and the Managed Documents constitute the entire
agreement and understanding among the parties with respect to the subject matter
hereof. Any previous agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement, the Indenture, the other Related
Documents and the Managed Documents.

SECTION 9.14 Concerning the Trustee. In acting under this Agreement, the Trustee
shall be afforded the rights, privileges, protections, immunities and
indemnities set forth in the Indenture as if fully set forth herein.

SECTION 9.15 Joinder of Additional Securitization Entities. In the event the
Master Issuer shall form an Additional Securitization Entity pursuant to
Section 8.34 of the Indenture, such Additional Securitization Entity shall
execute and deliver to the Manager and the Trustee (i) a Joinder Agreement
substantially in the form of Exhibit A and (ii) a Power of Attorney in the form
of Exhibit B-2, and such Additional Securitization Entity shall thereafter for
all purposes be a party hereto and have the same rights, benefits and
obligations as a Securitization Entity party hereto on the Closing Date.

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IN WITNESS WHEREOF, the parties hereto have caused this Management Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.

 

PLANET FITNESS HOLDINGS, LLC, as Manager

By:  

/s/ Justin Vartanian

  Name:   Justin Vartanian   Title:   General Counsel and Secretary

PLANET FITNESS SPV GUARANTOR LLC By:  

/s/ Justin Vartanian

  Name:   Justin Vartanian   Title:   General Counsel and Secretary

PLANET FITNESS MASTER ISSUER LLC By:  

/s/ Justin Vartanian

  Name:   Justin Vartanian   Title:   General Counsel and Secretary

PLANET FITNESS FRANCHISING LLC By:  

/s/ Justin Vartanian

  Name:   Justin Vartanian   Title:   General Counsel and Secretary

PLANET FITNESS DISTRIBUTION LLC By:  

/s/ Justin Vartanian

  Name:   Justin Vartanian   Title:   General Counsel and Secretary

 

[Management Agreement]

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PLANET FITNESS ASSETCO LLC By:  

/s/ Justin Vartanian

  Name:   Justin Vartanian   Title:   General Counsel and Secretary

 

[Management Agreement]

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CITIBANK, N.A. as Trustee By:  

/s/ Anthony Bausa

  Name:   Anthony Bausa   Title:   Senior Trust Officer

 

[Management Agreement]

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EXHIBIT A

JOINDER AGREEMENT

This Joinder Agreement (this “Agreement”), dated as of [insert date], is between
[insert name] (the “Additional Securitization Entity”), Planet Fitness Holdings,
LLC, a New Hampshire limited liability company (the “Manager”), and Citibank,
N.A., as trustee (the “Trustee”).

Section 1. Reference to Management Agreement; Definitions. Reference is made to
the Management Agreement dated as of [●], as now in effect (as amended, modified
or supplemented from time to time, the “Management Agreement”), among Planet
Fitness Master Issuer LLC, a Delaware limited liability company (the “Master
Issuer”), certain of its subsidiaries party thereto, the Manager and the
Trustee. For all purposes of this Agreement, capitalized terms used herein but
not otherwise defined herein shall have the meanings ascribed thereto in Annex A
to the Base Indenture dated as of August 1, 2018, as now in effect (the “Base
Indenture”), between the Master Issuer and the Trustee.

Section 2. Joinder. Effective as of the date on which all the conditions in
Section 3 below are satisfied (the “Joinder Date”), the Additional
Securitization Entity joins in and becomes party (as fully as if the Additional
Securitization Entity had been an original signatory thereto) to the Management
Agreement as a party thereunder for all purposes thereof.

Section 3. Conditions. The effectiveness of the joinder in Section 2 above shall
be subject to the satisfaction of the following conditions on or prior to the
Joinder Date:

(a)    Proper Proceedings. This Agreement shall have been authorized by all
necessary corporate or other proceedings. All necessary consents, approvals and
authorizations of any governmental or administrative agency or any other Person
of any of the transactions contemplated hereby shall have been obtained and
shall be in full force and effect.

(b)    General. All legal and corporate proceedings in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in
form and substance to the Control Party and the Control Party shall have
received copies of all documents, including certified copies of the formation
documents of the Additional Securitization Entity, records of limited liability
company proceedings, certificates as to signatures and incumbency of officers
and opinions of counsel, which the Control Party may have reasonably requested
in connection therewith, such documents where appropriate to be certified by
proper corporate or governmental authorities.

Section 4. Further Assurances. The Additional Securitization Entity will, upon
the request of the Control Party from time to time, execute, acknowledge and
deliver, and file and record, all such instruments, and take all such action, as
the Control Party may reasonably request to carry out the intent and purpose of
this Agreement and any other Related Document.

Section 5. Notices. Any notice or other communication to the Additional
Securitization Entity in connection with this Agreement or any other Related
Document may be given as

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provided in Section 9.6 of the Management Agreement and shall be deemed to be
delivered if in writing and addressed to:

[Insert Address]

Section 6. General. This Agreement, the Management Agreement and the other
Related Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior and
current understandings and agreements, whether written or oral. Except to the
extent specifically supplemented hereby, the provisions of the Related Documents
shall remain unmodified. The Management Agreement and the Related Documents,
each as supplemented hereby, are each confirmed as being in full force and
effect. This Agreement shall constitute a Related Document. This Agreement may
be executed in any number of counterparts, which together shall constitute one
instrument, and shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns, including as such successors and
assigns all holders of any obligations evidenced by the Notes. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York.

[The remainder of this page is intentionally left blank.]

 

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Each of the parties has executed this Agreement under seal by a duly authorized
officer as of the date first written above.

 

[NAME OF ADDITIONAL SECURITIZATION ENTITY]

By:  

                                                      

Name:   Title:   PLANET FITNESS HOLDINGS, LLC, as Manager By:  

                                          

Name:   Title:   CITIBANK, N.A. as Trustee

By:  

                                                              

Name:   Title:  

 

3

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EXHIBIT B-1

POWER OF ATTORNEY

KNOWN ALL PERSONS BY THESE PRESENTS, that Planet Fitness Franchising LLC, a
Delaware limited liability company (the “Franchisor”), hereby appoints Planet
Fitness Holdings, LLC, a New Hampshire limited liability company, and any and
all officers thereof as its true and lawful attorney-in-fact, with full power of
substitution, in connection with the Services ascribed below with respect to the
Securitization IP (as such term is defined in the Management Agreement, dated as
of the date hereof, among the Franchisor, certain of its affiliates and
Citibank, N.A. (as amended, modified or supplemented from time to time, the
“Management Agreement”)), with full irrevocable power and authority in the place
of the Franchisor and in the name of the Franchisor or in its own name as
nominee for the Franchisor, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the foregoing, subject to the Management Agreement,
including, without limitation, the full power to:

(i)    sign its name upon all filings and to do all things necessary to
maintain, register and renew Trademarks included in the Securitization IP with
the PTO, any state trademark registry, any applicable foreign intellectual
property office and/or any applicable domain registry;

(ii)    sign its name upon all filings and to do all things necessary to
maintain and prosecute Patents included in the Securitization IP with the PTO
and with any applicable foreign intellectual property office;

(iii)    sign its name upon all filings and to do all things necessary to
maintain, register and renew Copyrights among the Securitization IP with the
United States Copyright Office and with any applicable foreign intellectual
property office;

(iv)    perform such functions and duties, and prepare and file such documents,
as are required under the Base Indenture (as defined in the Management
Agreement) to be performed, prepared and/or filed by the Franchisor, including:
(i) executing and recording such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other instruments as
the Trustee and the Master Issuer may from time to time reasonably request in
order to perfect and maintain the security interests in the Securitization IP
granted by the Franchisor to the Trustee (as defined in the Management
Agreement) under the Related Documents (as defined in the Management Agreement)
in accordance with the UCC (as defined in the Management Agreement); and
(ii) executing grants of security interests or any similar instruments required
under the Related Documents to evidence such security interests in the
Securitization IP and recording such grants or other instruments with the
relevant authority including the PTO, the United States Copyright Office or any
applicable foreign intellectual property office;

(v)    take such actions on behalf of the Franchisor as the Master Issuer or the
Manager may reasonably request that are expressly required by the terms,
provisions and purposes of the IP License Agreements; or cause the preparation
by other appropriate persons, of all documents, certificates and other filings
as the Franchisor shall be required to prepare and/or file under the terms of
the IP License Agreements; and

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(vi)    pay or arrange for payment or discharge taxes and liens levied or placed
on or threatened against the Securitization IP.

This Power of Attorney is coupled with an interest. Capitalized terms used
herein, and not defined herein shall have the meanings applicable to such terms
in the Management Agreement.

This Power of Attorney is governed by the laws of the State of New York
applicable to powers of attorney made and to be exercised wholly within such
State.

Dated: This [            ], 20[    ]

 

PLANET FITNESS FRANCHISING LLC

By:  

                     

Name:   Title:  

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STATE OF NEW YORK   )      :    ss. COUNTY OF NEW YORK   )   

On the [    ] day of [        ], 20[    ], before me the undersigned, personally
appeared                     , personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.

 

 

Notary Public

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EXHIBIT B-2

POWER OF ATTORNEY

KNOWN ALL PERSONS BY THESE PRESENTS, that [                    ], a Delaware
limited liability company (the “Securitization Entity”), hereby appoints Planet
Fitness Holdings, LLC, a New Hampshire limited liability company, and any and
all officers thereof as its true and lawful attorney-in-fact, with full power of
substitution, in connection with the Services (as such term is defined in the
Management Agreement, dated as of the date hereof, among the Securitization
Entity, certain of its affiliates and Citibank, N.A. (as amended, modified or
supplemented from time to time, the “Management Agreement”)), with full
irrevocable power and authority in the place of the Securitization Entity and in
the name of the Securitization Entity or in its own name as nominee for the
Securitization Entity, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the foregoing, subject to the Management Agreement, including,
without limitation, the full power to:

(i)    perform such functions and duties, and prepare and file such documents,
as are required under the Base Indenture (as defined in the Management
Agreement) to be performed, prepared and/or filed by the Securitization Entity,
including: (i) executing and recording such financing statements (including
continuation statements) or amendments thereof or supplements thereto or other
instruments as the Trustee and the Master Issuer may from time to time
reasonably request in order to perfect and maintain the Lien in the Collateral
granted by the Securitization Entity to the Trustee (as defined in the
Management Agreement) under the Related Documents (as defined in the Management
Agreement) in accordance with the UCC (as defined in the Management Agreement);
and (ii) executing grants of security interests or any similar instruments
required under the Related Documents to evidence such Lien in the Collateral;
and

(ii)    take such actions on behalf of the Securitization Entity as the Master
Issuer or the Manager may reasonably request that are expressly required by the
terms, provisions and purposes of the Management Agreement; or cause the
preparation by other appropriate persons, of all documents, certificates and
other filings as the Securitization Entity shall be required to prepare and/or
file under the terms of the Management Agreement.

This Power of Attorney is coupled with an interest. Capitalized terms used
herein, and not defined herein shall have the meanings applicable to such terms
in the Management Agreement.

This Power of Attorney is governed by the laws of the State of New York
applicable to powers of attorney made and to be exercised wholly within such
State.

Dated: This [            ], 20[    ]

 

[                    ] By:  

                                          

Name:   Title:  

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STATE OF NEW YORK   )      :    ss. COUNTY OF NEW YORK   )   

On the [    ] day of [        ], 20[    ], before me the undersigned, personally
appeared                     , personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.

 

 

Notary Public