Document:

exv10w1

 Exhibit 10.1

PLANET BEACH FRANCHISING CORPORATION

FRANCHISE AGREEMENT DATA SHEET

	 	 	 	 	 
	1.

	 	Name of Franchisee:	 	 
	 

	 	 	 	 
	 
	 

	 	Partner or Spouse:	 	 
	 

	 	 	 	 
	 
	2.

	 	Franchisee’s Address:	 	 
	 

	 	 	 	 
	 
	3.

	 	Licensing Agent:	 	 
	 

	 	 	 	 
	 
	4.

	 	Franchisee’s Territory:	 	 
	 

	 	 	 	 
	 
	5.

	 	Franchisee’s Telephone Number:	 	 
	 

	 	 	 	 
	 
	6.

	 	Franchisee’s Cell Number:	 	 
	 

	 	 	 	 
	 
	7.

	 	Franchisee’s Facsimile Number:	 	 
	 

	 	 	 	 
	 
	8.

	 	Franchisee’s E-Mail Address:	 	 
	 

	 	 	 	 
	 
	9.

	 	Initial Franchise Fee:	 	 
	 

	 	 	 	 
	 
	10.

	 	Amount Paid:	 	 
	 

	 	 	 	 
	 
	11.

	 	Amount Due:	 	 
	 

	 	 	 	 
	 
	12.

	 	Effective Date:	 	 
	 

	 	 	 	 

	 	 	 
	Agreement
	 	 
	Exceptions:
	 	 
	 

	 	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 

The information contained in this Data Sheet is incorporated by reference into the Planet Beach
Franchising Corporation Franchise Agreement.

 

 

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

TABLE OF CONTENTS

	 	 	 	 	 
	Background
	 	 	3	 
	1.  FRANCHISE GRANT
	 	 	3	 
	2.  LOCATION AND SITE CONSTRUCTION
	 	 	3	 
	3.  TERRITORY
	 	 	4	 
	4.  TERM AND RENEWAL
	 	 	5	 
	5.  CONFIDENTIAL OPERATIONS MANUAL
	 	 	6	 
	6.  CONSTRUCTION OF SPA
	 	 	6	 
	7.  TRAINING
	 	 	7	 
	8.  OPENING
	 	 	7	 
	9.  YOUR OBLIGATIONS
	 	 	8	 
	10.  INITIAL AND CONTINUING FEES
	 	 	9	 
	11.  PROPRIETARY MARKS AND COPYRIGHTS
	 	 	10	 
	12.  CONFIDENTIAL INFORMATION
	 	 	11	 
	13.  MARKETING
	 	 	11	 
	14.  INSURANCE
	 	 	12	 
	15.  BOOKS, RECORDS AND REPORTS
	 	 	13	 
	16.  ACCOUNTING
	 	 	14	 
	17.  INSPECTIONS
	 	 	14	 
	18.  COVENANTS
	 	 	14	 
	19.  INDEPENDENT CONTRACTOR; INDEMNIFICATION
	 	 	15	 
	20.  NOTICES
	 	 	15	 
	21.  SALE OR ASSIGNMENT
	 	 	15	 
	22.  CHANGES AND MODIFICATIONS
	 	 	16	 
	23.  TERMINATION
	 	 	17	 
	23.  YOUR OBLIGATIONS UPON TERMINATION
	 	 	19	 
	24.  CHOICE OF LAW; DISPUTE RESOLUTION
	 	 	20	 
	25.  CONSTRUCTION
	 	 	22	 
	26.  PERSONAL GUARANTY OF SHAREHOLDERS, PARTNERS, MEMBERS
AND MANAGERS CHOICE OF LAW; DISPUTE RESOLUTION
	 	 	23	 
	27.  REPRESENTATIONS AND ACKNOWLEDGMENTS
	 	 	23	 

Exhibits to Planet Beach Franchising Corporation’s Single Unit Franchise Agreement

Exhibit 1 — Authorized Products and Services

Exhibit 2 — Approved Location and Territory Addendum

Exhibit 3 — Guaranty Agreement and Acknowledgment by Guarantor

Exhibit 4 — Rider to Lease

Exhibit 5 — Sublicense Agreement

Exhibit 6 — Confidentiality and Non-Competition Agreement

Exhibit 7 — Conditional Assignment of Telephone Numbers

Exhibit 8 — Statement of Prospective Franchisee

 

 

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

THIS FRANCHISE AGREEMENT (the “Agreement”) is made as of the Effective Date set forth on the Data
Sheet of this Agreement between Planet Beach Franchising Corporation, a Delaware corporation with
an address at 5145 Taravella Road, Marrero, Louisiana 70072 (“Planet Beach”), and the Franchisee
identified in the Data Sheet (“you”). The information contained in the Data Sheet is incorporated
into this Agreement.

BACKGROUND

A. Through the expenditure of money, time and effort, Planet Beach has developed a distinct and
proprietary method business format for the operation of tanning spas (the “System”), the
distinguishing characteristics of which include proprietary operating procedures and standards and
specifications for products and services, as amended from time to time in Planet Beach’s sole
discretion.

B. The System is identified by proprietary trademarks, service marks, trade dress, logos and other
indicia of origin including, without limitation, the trade name and service mark “Planet Beach”
(the “Proprietary Marks”).

C. Planet Beach offers franchises to qualified individuals for the right to use the System and
Proprietary Marks at a single approved location (the “Spa”).

D. You have applied to Planet Beach for the right to operate a Spa pursuant to the terms of this
Agreement, and Planet Beach has approved your application in reliance upon all of the
representations made in your application, including those concerning your financial resources, your
business experience and interests, and the manner in which the franchise will be owned and
operated.

E. You acknowledge that you have read this Agreement and Planet Beach’s Franchise Disclosure
Document, and that you have been given an opportunity to obtain clarification of any provision that
you did not understand. You also understand and agree that the terms and conditions in this
Agreement are necessary to maintain Planet Beach’s high standards of quality and service, and the
uniformity of those standards at all Planet Beach locations.

AGREEMENT

NOW THEREFORE, in consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, mutually agree as follows:

1. FRANCHISE GRANT

Planet Beach grants to you, and you hereby accept, a nonexclusive franchise to establish and
operate one Spa pursuant to the terms of this Agreement within a geographic area mutually agreed to
by the parties. This Agreement does not give you the right to establish additional Spas.

2. LOCATION

2.1. Approved Location. You shall operate your Spa only from the Approved Location
identified in, or (if the parties have not agreed upon a location at the time this Agreement is

 

 

signed) to be identified, in the Data Sheet. If you have not yet secured a site for the Spa
at the time you sign the Franchise Agreement, you will enter into our Approved Location and
Territory Addendum, attached as Exhibit B to the Franchise Agreement, which will govern the site
selection process.

2.2. Site Selection. You must obtain a site for the Spa within 120 days from the
Effective Date set forth on the Data Sheet (“Site Selection Period”) either by (i) entering into a
lease or sublease with the owner of a site or the prime tenant having possession of a site which is
mutually acceptable to you and Planet Beach; or (ii) purchasing real estate which is mutually
acceptable to you and Planet Beach.

2.3. Lease. If you elect to lease premises for your Spa, you must submit a copy of
your proposed lease for Planet Beach’s approval prior to execution. You must deliver an executed
copy of the lease to Planet Beach within 15 days after the execution of the lease. Planet Beach’s
acceptance of the lease terms does not constitute an expression of Planet Beach’s opinion regarding
the terms of the lease or the viability of the location.

2.4. Relocation. Planet Beach will permit you to relocate your Spa to a new
approved location within the Territory, at your expense, if you lose the right to possess the
premises through no fault of your own, or if the Spa is destroyed by vandalism, fire or act of God.
Planet Beach will approve the new site if it meets Planet Beach’s site selection criteria. You
have no right to relocate the Spa without Planet Beach’s prior written consent.

3. TERRITORY

3.1. Territory. We grant a Franchise based on our expectation that you will continuously
and diligently follow all System requirements. Subject to the exclusions below, Planet Beach
grants to you the right to establish and carry on a business within a protected territory that
consists of a radius or boundary surrounding your Spa (the “Protected Territory”). Your Protected
Territory generally will be a circle, the center of which will be your location as defined by your
signed lease and verified by you. A map plotting the Protected Territory will be provided to you
upon securing a site for your location via a lease execution.

The radius of the circle will be based on where the spa site is located and will be determined as
follows:

	 	(i.)	 	 one-half of a mile (1/2 mile) if your Spa is located in a Downtown area or the
Central Core of a large city;
	 
	 	(ii.)	 	 two miles (2.0 miles) if your Spa is located in any other Area.

Your Protected Territory shall exclude: (i) any area that is across a state line, river,
navigable waterway, or other natural boundary; and (ii) regional shopping malls, train stations,
bus stations and airports. In these cases, the actual size and dimensions of your Territory may be
less than stated above and will depend upon the specific variables of your Site, including
population density, marketing and development trends, traffic flow and natural and man-made
boundaries.

3.2. Modification of Protected Territory. During the term of this Agreement, so long as
you are in substantial compliance with the terms and conditions of this Agreement, Planet Beach
will not establish or locate, or grant any third party the right to establish or locate, another
Planet Beach location using the System and Proprietary Marks within the Territory identified, or to
be identified, in the Data Sheet or Exhibit B to this Agreement except as set forth in paragraph
3.3 and 3.4 below. If you are in breach of this Agreement, or are not otherwise in Good Standing,
we may reduce, eliminate or otherwise modify your rights in the Territory, including any right of
first refusal. We do not make any representation or assurance that you can or will achieve any
performance minimums. This Agreement does not grant you

 

 

any other territorial rights.

3.3. Reservation of Rights. Planet Beach will not establish (and will not authorize any
other party to establish) a Spa within your Protected Territory subject to the following
Exclusions:

	 	a.	 	Own and operate Spas at any location(s) outside your Protected
Territory under the same or different marks, and to license others the right to
own and operate Spas at any location(s) outside your Protected Territory under
the same or different marks. In some instances, Territories may overlap;
	 
	 	b.	 	Conduct any business in a regional shopping mall, train
station, bus station or airport in which your Spa is not located;
	 
	 	c.	 	Use the Proprietary Marks in connection with offering ancillary
or dissimilar products and services at any location inside or outside your
Protected Territory;
	 
	 	d.	 	Acquire other businesses within your Protected Area that
compete with the Spa;
	 
	 	e.	 	Convert any existing tanning and/or spa establishment to a
business which uses the Planet Beach System whether that business be a
Franchised Business or owned and/or operated by Planet Beach or a Planet Beach
affiliate;
	 
	 	f.	 	Conduct and transact business with customers and/or companies
operating in your Protected Territory by means of the internet as well as other
electronic media that are known now or developed in the future, toll-free
telephone numbers, and any other manner we determine; however, we will not do
so from a Spa that is physically located in your Protected Territory subject to
the provisions set forth above;
	 
	 	g.	 	If the franchisor or the franchisee identifies the opportunity
to establish a second or further franchise within the Protected Territory then
the franchisee shall be considered prior to any third party as to the proposed
operator of the proposed franchise. The existing franchisee, subject to meeting
all new franchisee criteria, shall be offered a 21 day first right of refusal.
If the franchisee declines to accept the proposed franchise, then the
franchisor shall be free to either itself open a new store within the territory
or allow a new franchisee to open a new store within the territory; and
	 
	 	h.	 	Engage in any other activities not expressly prohibited by this
Agreement.

3.4. Additional Exclusions. Your grant of a franchise does not include (i)
exclusive marketing rights; (ii) any right to offer any product or service via e-commerce; (iii)
any right to establish an independent website or to establish a URL incorporating the Proprietary
Marks or any variation thereof; or (iv) any right to distribute, market, or implement Planet
Beach’s products and services in any channel of distribution not specifically identified in this
Agreement.

 4. TERM AND RENEWAL

4.1. Term. The initial term of this franchise shall begin on the Effective Date set forth
on the Data Sheet by Planet Beach and shall expire at midnight on the twentieth anniversary of the
Effective Date.

4.2. Renewal. You have the right to renew this Agreement for perpetual consecutive
additional 5-year terms, if you meet the following conditions:

	 	4.2.1.	 	You are in compliance with all the terms and conditions of this Agreement at the time
of renewal and have substantially complied with the terms of this Agreement and with
the operating standards and criteria established by Planet Beach throughout the initial
term and any renewal term of this Agreement;

 

 

	 	4.2.2.	 	You have satisfied all monetary obligations owed to Planet Beach and its affiliates;
	 
	 	4.2.3.	 	You are in compliance with all other agreements between you and Planet Beach and/or
its affiliates;
	 
	 	4.2.4.	 	You have provided Planet Beach with written notice of your intention to renew the
Franchise Agreement at least 90 days but not more than 180 days prior to expiration of
the then-current term;
	 
	 	4.2.5.	 	You have the right to remain in possession of the Spa premises, or you have secured
other premises acceptable to Planet Beach for the renewal term;
	 
	 	4.2.6.	 	At Planet Beach’s request, you effectuate, at your expense, any changes in services,
facility, items offered or business system so as to reflect Planet Beach’s then-current
image including interior and exterior design or offerings of Planet Beach Tanning Spas;
	 
	 	4.2.7.	 	You execute Planet Beach’s then-current form of franchise agreement, which may vary
materially from the terms of this Agreement and may include, without limitation, higher
royalty and marketing fees. The renewal franchise agreement, when executed, will
supersede this Agreement in all respects; and
	 
	 	4.2.8.	 	You sign a general release in the form prescribed by Planet Beach, in favor of Planet
Beach and its affiliates and their respective officers, directors, agents, and
employees, for all claims arising out of or related to this Agreement or any related
agreements with Planet Beach or its affiliates.

5. CONFIDENTIAL OPERATIONS MANUAL

You must operate your Spa in accordance with Planet Beach’s confidential operations manual (the
“Operations Manual”), which contains policies, procedures, standards, specifications and methods of
operating a Planet Beach Spa. Planet Beach has the right to amend and supplement the Operations
Manual from time to time in its discretion. You will make, at your sole expense, changes necessary
to conform to the Operations Manual, including, but not limited to, upgrading and remodeling the
Spa, including leasehold improvements, furniture, fixtures, equipment, signs, and software. You
acknowledge these requirements are necessary and reasonable to preserve the identity, reputation
and goodwill Planet Beach has developed and the value of the franchise. You agree to make repairs
and updates and to pay all reasonable required costs within reasonable time periods that may be
established. You will adhere to quality control standards prescribed in the Operations Manual or
elsewhere with respect to the character or quality of the products sold and services performed in
association with the Marks. The Operations Manual, as amended from time to time, is intended to
further the purposes of this Agreement and is specifically incorporated into this Agreement. The
contents of the Operations Manual are protected by the Copyright law of the United States and may
not be disclosed to any person or entity not affiliated with Planet Beach and may not be
duplicated, copied, reproduced or altered in any way.

6. CONSTRUCTION OF SPA

After you identify a site for the Spa and are approaching lease execution, you will construct and
equip your Spa to the specifications contained in the Operations Manual and open for business. You
will remain responsible for all costs of and connected with design and construction, including, but
not limited to construction drawings, architectural and/or engineering drawings, including stamps
and seals, fees associated with obtaining building permits, leasehold improvements, equipment,
furniture, fixtures and

 

 

signs, and you must bear the cost and responsibility for compliance with state or local ordinances,
rules and regulations, including those related to zoning.

7. TRAINING

7.1. Initial Training Program. Within 6-months of the Effective Date of this Agreement and
prior to 30-days of the opening of your Spa (the “initial training period”): Each franchisee and
designated Spa manager (director) shall satisfactorily complete all of Planet Beach’s required
training programs as outlined in paragraphs 7.1.1, 7.1.2, 7.1.3 and 7.1.4 below and as more
specifically defined in the Operations Manual. Each of your additional or replacement directors
are required to successfully complete all required director training programs to Planet Beach’s
satisfaction within 30 days of assuming management responsibilities. You are solely responsible for
full payment of all training-related expenses including, without limitation, travel expenses to and
from the training site, lodging accommodations, dining expenses, and salaries for your employees.

     7.1.1. Planet Beach University Online Certification Program. Each Franchisee and spa
employee must successfully complete all required courses and certifications of Planet Beach
University Online, a web-based training and certification program, according to the training
schedule provided to you at announcement of franchise agreement signing.

     7.1.2.Franchisee and Director School. Each franchisee must attend and complete
Franchisee and Director School. Each spa manager (director) must attend and complete Franchisee
and Director School within ninety (90) days of hire. Each Franchisee and spa manager (director)
must attend and complete such school annually.

     7.1.3. Operator Certification. Each franchisee, spa manager (director), and spa
employee who works with customers as an operator in any franchise location must successfully
complete a nationally recognized indoor tanning operator certification prior to working in a
location, at your expense. Planet Beach accepts those national training certification programs
that are recognized by the Food and Drug Administration or by an individually regulated state, such
as Smart Tan or the National Tanning Training Institute (“NTTI”). New or replacement Directors
and Consultants must obtain Operator’s Certification within 30 days of their employment.

     7.1.4.Onsite Grand Opening Training. You and your initial staff must successfully
attend and participate in your Spa’s Grand Opening Training Program which will be conducted by your
Grand Opening Specialist, at your Spa, within two weeks of the opening date of your first location.

7.2. Additional Training Programs and Seminars. Planet Beach has the right, but is not
obligated, to provide continuing education training programs or seminars for previously-trained
franchisees and directors, assistant directors and consultants and to require you to attend and
successfully complete these programs or seminars. You are solely responsible for tuition and all
training-related expenses including, without limitation, travel expenses, living and dining
accommodations, and employee salaries.

7.3. Attendance at Annual Conventions. You must attend all Planet Beach Annual Conventions
unless exigent circumstances exist and you receive Planet Beach’s prior approval not to attend. All
costs related to the Annual Convention, including but not limited to, travel expenses, lodging and
entertainment shall be your sole responsibility.

8. OPENING

8.1. Opening for Business. You must open the Spa for business within 275 days of execution
of this

 

 

Agreement. If you cannot open within 275 days due to vandalism, fire, act of God or other
circumstances beyond your control, you must request an extension from Planet Beach immediately,
which extension will not be unreasonably withheld. It is your sole responsibility to ensure that
your Spa opens within 275 days of execution of this Agreement. You may not open the Spa for
business until a Planet Beach Representative has approved the Spa for opening.

8.2. Opening Marketing. During the development of your Spa and through the initial opening
of your Spa you must expend at least $3,000 to $10,000 on advertising and marketing within your
Territory. You shall make such expenditure in accordance with Planet Beach’s written requirements
and specifications. Within 60 days of the Spa’s opening, you shall supply Planet Beach with
written evidence (by means of cancelled checks, paid invoices, copies of advertisements) of the
purchase and publication of such opening advertising and marketing. You have the right, but are
not required, to spend additional sums with respect to opening marketing.

9. YOUR OBLIGATIONS

9.1. Operations. You must operate your Spa in accordance with the Operations Manual which
contains policies, procedures, standards, specifications and methods of operating a Planet Beach
Spa. Policies include but are not limited to the daily hours of operation, Planet Beach’s
Membership Policy, Reciprocation Policy, etc.

9.2. Compliance with Applicable Laws. You shall operate your Spa in strict compliance with
all applicable laws, regulations and ordinances including, without limitations, laws and
regulations applicable to or affecting health and safety, registering your Spa with the appropriate
authority where and when applicable, taxation issues, membership agreements, and employee
contracts. You must obtain and maintain all permits, licenses, and registrations required for the
lawful operation of your Spa and comply with all health and safety codes. If you are a
corporation, partnership or limited liability company, then the name of your entity shall not
include any portion of any of the Proprietary Marks; provided, however, you shall register for
fictitious name usage in the jurisdiction in which the Spa is located and promptly provide Planet
Beach a copy of the registration. Planet Beach is neither responsible nor liable for researching,
knowing, acting on, and/or advising you and/or anyone on any state, city, county, parish, and/or
local laws that will apply to the Spa’s operations in that specific area. Planet Beach cannot
provide you with any advice, legal or otherwise, on local issues. You must provide Planet Beach
with copies of all permits, licenses and registrations within 30 days of opening your Spa.

9.3. Authorized Products and Services and Approved Suppliers. You shall not conduct any
business or sell any products at the Spa other than the business and products approved by Planet
Beach. Planet Beach has the right to require you to purchase products from designated or
approved suppliers as well as to enter into service agreements with approved vendors. A description
of currently authorized products and services is attached as Exhibit 1 to this Agreement (the
“Authorized Products and Services”). Planet Beach has the right to add, eliminate, modify and
substitute any of the Authorized Products and Services or the designated suppliers in its sole
discretion. If you wish to offer any product or service that Planet Beach has not authorized or to
acquire items or services from an unapproved supplier, you must request Planet Beach’s approval in
writing and provide Planet Beach all information it may reasonably need to evaluate the proposed
product, service or supplier. Planet Beach will make a good faith effort to notify you of its
approval within 15 days of receiving such information. Planet Beach’s failure to approve a
product, service or supplier within this15 day period will constitute disapproval of the proposed
product, service or supplier. If Planet Beach approves your request to offer a new product or
service or to acquire items from a new supplier, such approval will be only for the specific
product, service or supplier for which approval was granted. Notwithstanding the existence of this
approval process, Planet Beach reserves the right to be the only approved supplier of a product or
service. In that situation, you will be

 

 

required to purchase the product or service from Planet Beach and no one else. The price you will
pay for the product or service will be the price then in effect, and Planet Beach may make a profit
on the sale of the product or service.

9.4. Computer Software and Hardware. You shall purchase and use any and all computer
software programs (“Software”) which Planet Beach has developed or may develop and/or designate for
use for the System, and shall purchase such computer hardware as may be necessary for the efficient
operation of the Software within 90 days from the date you receive written notice from Planet
Beach. You must also establish a high-speed internet connection prior to the opening of your Spa.
The Software is and shall remain the sole property of Planet Beach and you agree to execute any
license or sub-license agreement required by Planet Beach. You agree to update or upgrade computer
hardware components and/or Software as Planet Beach deems necessary from time to time but not more
than 3 times per calendar year. In addition, Planet Beach has the right to require you to enter
into a separate maintenance agreement at your sole expense for such computer hardware and/or
Software in the form Planet Beach prescribes. You acknowledge and agree that Planet Beach may deny
you access to the Software if you fail to meet your obligations under this Agreement or the
Operations Manual.

9.5. Collection of Data. You shall collect and maintain such data relating to the business
as Planet Beach may require from time to time, including but not limited to, the names, addresses
and purchase history of all customers. You shall provide such data to Planet Beach in the form
Planet Beach specifies. Any such data shall be Planet Beach’s sole property and shall not be
disclosed or distributed to any person or entity for any reason; provided that you have a license
to use any such data solely for internal marketing and accounting purposes in accordance with all
applicable laws and regulations.

9.6. Debts and Obligations. You shall promptly pay all the debts and obligations relating
to the operation of the Spa and shall not fail to pay any debts to third parties that may result in
claims of liability to Planet Beach.

PLANET BEACH RESERVES THE RIGHT TO WITHHOLD FROM YOU ANY PRODUCTS, SERVICES, MAINTENANCE,
 INFORMATION, ADVICE, CONSULTATION AND TRAINING, TO DIRECT SUPPLIERS NOT TO OFFER SYSTEM DISCOUNTS,
TO DELETE YOUR SPA FROM THE PLANET BEACH WEBSITE, AND TO DENY YOU ACCESS TO PLANET BEACH’S COMPUTER
SYSTEM IF YOU ARE NOT IN COMPLIANCE WITH THE TERMS OF THIS AGREEMENT OR THE OPERATIONS MANUAL.

10. INITIAL AND CONTINUING FEES

10.1. Initial Franchise Fee. In consideration of the rights granted under this Agreement,
you have paid to Planet Beach an initial franchise fee (“Initial Franchise Fee”) in the amount
reflected on the Data Sheet. The initial franchise fee is deemed fully earned upon payment and
non-refundable.

10.2. Royalty Fee. During the term of this Agreement, you will pay to Planet Beach a
monthly Royalty Fee (“Royalty Fee”) in an amount equal to 6% of your “Gross Sales” earned during
the preceding month. If you are non-compliant and have been defaulted, you must pay a monthly
Royalty Fee in an amount equal to 9% of your “Gross Sales” earned during the preceding month until
you become compliant. Non-Compliant Franchisees are those who receive a default notice with a 30
day notice to cure letter and fail to cure the default. On the 31st day, Planet Beach
will begin drafting royalties at 9% until the default is cured. Gross Sales shall include all
revenues from sales made by you from all business conducted at or from your Spa, including but not
limited to amounts received from the sale of tanning sessions, prepaid tanning packages,
memberships and any other goods and services and tangible property of any nature whatsoever.
Planet Beach will sometimes refer to Gross Sales as the sum of Cash, NET EFT and Retail.

 

 

Gross Sales shall not include the amount of sales tax imposed by any federal, state, municipal or
other governmental authority and you agree to pay such amounts as and when they become due. Each
charge or sale upon installment or credit shall be treated as having been received in full by you
at the time you receive payment. Sales relating to items for which the full purchase price has
been refunded or the item exchanged shall be excluded from Gross Sales at the time of refund or
exchange, provided that such sales have previously been included in Gross Sales.

10.3. Brand Development Fee. During the term of this Agreement, you will pay to Planet
Beach a monthly Brand Development Fee in an amount equal to 2% of your “Gross Sales” earned during
the preceding month.

10.4. Construction Drawing Fee. You shall pay to Planet Beach $2,500 for the
completion of your site specific construction drawings.

10.5. Credit Card Processing Fee. You shall pay to Planet Beach the amount of the credit
card processing fee charged to PBFC from the credit card processor for any payments made by you to
Planet Beach and/or any purchases made by you from Planet Beach.

10.6. Payment Procedures. You must make all payments to Planet Beach through the AUTODRAFT
system. All payments are due on the 5th of every month for the preceding month. In the event that
any payments are due on a national holiday, payment will be due on the first business day following
such holiday. A late fee of $100 will be assessed for each week that payment is delinquent. An
insufficient funds fee of $100 will be assessed for any AUTODRAFT payment rejected as a result of
insufficient funds. In addition to the late fee and the overdue amount, interest will accrue on
such amount from the date it was due until paid at 18% per annum or the maximum rate permitted by
state law, whichever is less. Interest will be calculated on a daily basis and shall be in
addition to any other remedy Planet Beach may have under this Agreement or applicable law.

10.7. Refunds. All fees are fully earned when they become due and are not refundable.

11. PROPRIETARY MARKS AND COPYRIGHTS

11.1. License. During the term of this Agreement, you are granted a non-exclusive license
to use the Proprietary Marks in connection with the operation of your Spa. You shall display the
Proprietary Marks only in the manner that Planet Beach directs or permits. Your license to use the
Proprietary Marks shall automatically cease upon termination or expiration of this Agreement.

11.2. Ownership. You acknowledge that the Proprietary Marks are valid and are Planet
Beach’s sole property. You will not, either during or after the term of this Agreement, do
anything, or assist any other person to do anything, which would infringe upon, harm or contest
Planet Beach’s rights in any of the Proprietary Marks.

11.3. Goodwill. You acknowledge that all goodwill which may arise from your use of any of
the Proprietary Marks is and shall at all times remain Planet Beach’s sole and exclusive property
and shall inure to Planet Beach’s sole benefit.

11.4. Modification. You acknowledge that Planet Beach has the right to add, modify,
substitute or discontinue use of any of the Proprietary Marks in its sole discretion. You agree to
make any additions, deletions and modifications on all interior and exterior signs, packaging
materials, printed materials and advertising as Planet Beach directs at your own expense.

 

 

11.5. Internet Usage. If you maintain an internet site, you may not register or use the
words “Planet Beach” in your domain name. You shall not use the Proprietary Marks, or any part
thereof, as part of any web site domain name without Planet Beach’s prior written consent. An
individual website for your Spa may only be operated and maintained through Planet Beach’s website.

11.6. Infringement. You shall promptly notify Planet Beach of any infringement of, or
challenge to, the Proprietary Marks and Planet Beach shall, in its discretion, take such action, as
it deems appropriate. Planet Beach will indemnify and hold you harmless from any suits,
proceedings, demands, obligations, actions or claims, including costs and reasonable attorneys’
fees, for any alleged infringement under federal or state trademark law arising solely from your
use of the Proprietary Marks according to this Agreement and Planet Beach’s other written
directives if you have promptly notified Planet Beach of such claim. If Planet Beach undertakes
the defense or prosecution of any litigation pertaining to any of the Proprietary Marks, you must
execute any and all documents and do such acts and things as may, in the opinion of Planet Beach’s
counsel, are necessary to carry out such defense or prosecution.

11.7. Franchisee Developments. Planet Beach shall own and have the exclusive right to use
and incorporate in the Planet Beach Franchise System, for the benefit of other franchisees and
Planet Beach, any modifications, changes and improvements to the System, in whole or in part,
developed or discovered by you or your employees or agents in connection with the System or the
operation of your Spa, without any liability or obligation to you. This includes, but is not
limited to, discoveries or development of products, systems or techniques, management practices or
procedures, architectural designs and philosophies and names or groups of words relating to the
System or describing the services offered by Planet Beach Spas.

12. CONFIDENTIAL INFORMATION

You acknowledge and agree that the Operations Manual, training material, Planet Beach’s trade
secrets, methods and other techniques and know-how are Planet Beach’s exclusive and confidential
property which Planet Beach provides to you in confidence (“Confidential Information”). You agree
to use the Confidential Information only for the purposes and in the manner Planet Beach authorizes
in writing, which use will inure exclusively to Planet Beach’s benefit. Planet Beach’s trade
secrets consist of, without limitation, sales techniques, merchandising and display techniques, Spa
layout, advertising formats, accounting systems, operations systems, policies, procedures, systems,
compilations of information, records, specifications, manuals and other confidential information
which Planet Beach or its affiliates have developed for use in the operation of Spas. You may not
contest, directly or indirectly, Planet Beach’s ownership of its trade secrets, methods or
procedures or contest Planet Beach’s right to register, use or license others to use any such trade
secrets, methods and procedures. You (including your partners, officers, directors, shareholders,
as applicable), your employees, and their respective heirs, successors and assigns, are prohibited
from using and/or disclosing any Confidential Information in any manner other than as Planet Beach
permits and must execute a Confidentiality and Non-Competition Agreement in the form attached as
Exhibit 6.

13. MARKETING

13.1. Generally. You must participate in all marketing programs required by Planet Beach
in writing or contained in the Operations Manual. You may place or display at your Spa (interior
and exterior) only the signs, emblems, lettering, logos and displays and marketing materials as
Planet Beach approves in writing from time to time. You must submit to Planet Beach, at least 10
days prior to your use, samples of all sales promotional and marketing materials you desire to use
for approval. Planet Beach’s failure to approve or disapprove the materials within 10 days of
receipt will be deemed a disapproval. You may not use any marketing or promotional materials for
which Planet Beach has not given its prior written
approval.

 

 

13.2. Territorial Marketing Restriction. You are not permitted to solicit customers and/or
market outside your Territory, except to the extent that you have received Planet Beach’s prior
written authorization, which Planet Beach will not unreasonably withhold. Planet Beach may
condition its authorization upon your agreement to offer System franchisees who are operating Spas
in contiguous territories the opportunity to participate in, and share the expense of, such
solicitation and/or marketing. You may not market your Spa or any products or services offered by
the Spa via the Internet without Planet Beach’s prior written consent, which may be given or
withheld in Planet Beach’s sole discretion.

13.3. Marketing Fund. Planet Beach may, in its discretion, establish local marketing
cooperatives for the common benefit of Planet Beach’s franchisees.

     13.3.1. Local Cooperatives. Planet Beach has the right, in its discretion, to
designate any geographical area for purposes of establishing a regional marketing and promotional
cooperative (“Cooperative”), and to determine whether you must participate in a Cooperative. If a
Cooperative has been established applicable to the Spa at the time you begin operating under this
Agreement, you must immediately become a member of such Cooperative. If a Cooperative applicable
to the Spa is established at any later time during the term of this Agreement, you must become a
member of such Cooperative no later than 30 days after the date on which the Cooperative begins
operation. Planet Beach has the right to change, combine or dissolve cooperatives. If the Spa is
within the territory of more than one Cooperative, you are required to be a member of only one such
Cooperative. The following provisions will apply to each Cooperative:

	 	a)	 	Each Cooperative will be organized and governed
in a form and manner, and will commence operation on a date, approved
in advance by Planet Beach;
	 
	 	b)	 	Each Cooperative will be organized for the
exclusive purpose of administering regional marketing programs and
developing, subject to our approval, standardized marketing materials
for use by the members in local marketing;
	 
	 	c)	 	All activities and contributions to the
Cooperative shall be determined by a majority vote of the Spas in the
Cooperative; and
	 
	 	d)	 	No promotional or advertising plans or
materials may be used by a Cooperative or furnished to its members
without our prior written approval. All such plans and materials shall
be submitted to Planet Beach in accordance with the procedure set forth
in Paragraph 15.1 hereof.

13.4. Telephone Directory Advertising. At Planet Beach’s request, you must advertise your
Spa in the local telephone directory or directories covering the area from which the Spa is likely
to draw customers. Such advertising must be placed in accordance with size and content formulas
provided by Planet Beach. The amount of payments for such directory advertising may be included to
meet the marketing requirements set forth in paragraph 13.1, above.

14. INSURANCE

You must obtain and maintain at your sole expense at all times during the term of this Agreement
such insurance coverage, as Planet Beach from time to time shall specify, and/or any other
insurance coverage

 

 

required by law. This includes but is not limited to, comprehensive general liability insurance,
worker’s compensation insurance and unemployment insurance. Each policy shall be written by an
insurance company acceptable to Planet Beach, and shall name Planet Beach and its officers,
directors, agents, attorneys, employees and affiliates as additional insured parties. You shall
promptly deliver to Planet Beach original certificates evidencing that all insurance required by
Planet Beach is in full force and effect prior to opening the Spa for business. You shall deliver
to Planet Beach each year renewal certificates. All policies must provide that the policy may not
be cancelled, terminated, modified or reduced in terms of coverage, without 30 days prior written
notice to Planet Beach. If you fail to obtain or maintain the required insurance, Planet Beach has
the right, but is not obligated, to obtain and maintain such insurance coverage on your behalf and
to charge you for such coverage, together with a service fee which shall not exceed 25% of the
insurance premium. There is no assurance that minimum insurance requirements will be adequate to
satisfy your needs.

15. BOOKS, RECORDS AND REPORTS

15.1. Books and Records. You must maintain at the Approved Location or other approved
location such books, accounts, records and memoranda disclosing all transactions relating to or
involving the operation of the Spa. Planet Beach shall have access to examine, inspect and copy
all such books, accounts, records, memoranda, computer files and systems to review, inspect and
poll such data during regular business hours. Financial records and statements must be kept and
maintained in conformity with generally accepted accounting principles or such other accounting
method that is acceptable for tax reporting purposes. You must keep and maintain such
record-keeping or electronic reporting systems as Planet Beach may require, and make the same
available to Planet Beach as Planet Beach specifies or as a report or statement. You must use those
forms specified by Planet Beach. In addition, you must keep in the manner specified by Planet
Beach, consecutively numbered customer receipt forms for each purchase or service rendered in the
operation of the Spa. You must retain these for Planet Beach’s inspection, and upon Planet Beach’s
request, forward them to Planet Beach.

15.2. Periodic Reports. You must provide to Planet Beach periodic royalty reports and all
other documentation as Planet Beach may reasonably prescribe from time to time. Planet Beach
reserves the right to specify the accounting and/or bookkeeping procedures, formats, systems and
forms you will use in the operation of the Spa. You must deliver to Planet Beach within 20 days
of the end of each fiscal quarter a complete and accurate profit and loss statement for such
quarter, in a format acceptable to Planet Beach.

15.3. Daily Production and Monthly Spa Financial Reports. You must fax or e-mail your
cumulative monthly Daily Production Report (“DPR”) to Planet Beach, following the close of business
on the last business day of every month. Failure to submit your previous month’s DPR by the 3rd
day of each month will result in a maximum late charge of $300.00 per month, per occurrence. You
must submit your monthly Spa financial reports in a manner specified by Planet Beach, including
accurate amounts for all Spa operational expenses. Failure to submit your Spa’s financial reports
by the 3rd day of each month will result in a maximum late charge of $300.00 per month,
per occurrence. E-mail will be through Planet Beach’s web site.

15.4. Annual Financial Statement, Balance Sheet And Tax Return. Within 90 days after
the close of each fiscal year (ending December 31) you must deliver to Planet Beach annual
financial statements, including but not limited to profit and loss statements and balance sheets
for the preceding year prepared in accordance with generally accepted accounting principles or such
other accounting methods that are acceptable for tax reporting purposes. You must furnish to
Planet Beach copies of federal, state and local sales, income or other tax returns filed in
connection with the Spa by April 1 of the following year.

 

 

16. ACCOUNTING

16.1. Application of Payments. Planet Beach has the right to apply all payments as it
deems appropriate in its discretion, regardless of the purpose for which such payment is
designated; provided, however, Planet Beach shall not apply payment to any indebtedness that you
have identified in writing as a disputed charge.

16.2. Interest. You must pay all bills, fees, charges and other obligations to Planet
Beach in strict accordance with the applicable payment and credit terms. Any amount not paid when
due, will bear interest from the due date at the rate of 18% per annum, or the maximum allowed by
law, whichever rate shall be less. Interest will be compounded monthly. The payment of such
interest or other amounts due shall not be deemed to constitute a waiver of any other rights
available to Planet Beach.

16.3. Audits. Planet Beach or its designee may inspect or conduct an audit of your
accounts, business and financial books and records, local marketing records, tax returns and other
records during regular business hours. If the audit discloses an understatement of Gross Receipts
for any period or periods, you must immediately pay to Planet Beach all Royalty Fees and any other
sums due under this Agreement, plus interest on these monies at the rate set forth in this
Agreement. If any audit reveals that you have underreported any amounts by more than 2% in any
period or periods, or if you fail to timely submit complete, accurate and legible reports, then in
addition to paying all monies due, you shall reimburse Planet Beach for the cost of the audit,
including the charges of any independent certified public accountant, attorneys’ fees, other legal
costs and the travel expenses, room, board and compensation of Planet Beach’s employees.

17. INSPECTIONS

Planet Beach or its designee has the right at any time during regular business hours, and without
prior notice, to conduct a reasonable inspection of the Spa. Any such inspection will be at Planet
Beach’s expense, unless Planet Beach is required to make any additional inspections in connection
with your failure to comply with this Agreement. In such event, Planet Beach has the right to
charge you for the costs of making the additional inspections, including without limitation travel
expenses, room and board and compensation of employees. You must promptly remedy at your sole
expense any deficiency found during any inspection.

18. COVENANTS

18.1. During the Term of this Agreement. During the term of this Agreement, neither you
nor any of your principals shall, directly or indirectly, through corporations, partnerships,
limited liability companies, trusts, associations, joint ventures, or other unincorporated
businesses, perform any services for, engage in or acquire, participate or have any financial or
other interest in any other business or other entities offering tanning services or other services
or products offered by Planet Beach locations, provided, however, that this provision shall not
apply to the operation of any other Planet Beach franchised business pursuant to a valid franchise
agreement with Planet Beach.

18.2. After the Term of this Agreement. For a period of 2 years following termination or
expiration of this Agreement, or the termination of any principal’s interest in the Spa, neither
you nor any of your principals shall, directly or indirectly, through corporations, partnerships,
limited liability companies, trusts, associations, joint ventures, or other unincorporated
businesses, perform any services for, engage in or acquire, participate or have any financial or
other interest in any other business or other entities offering tanning services or other services
or products offered by Planet Beach locations: (1) at the Approved Location (or the location of
your former Planet Beach Spa); (2) within the Territory; (3) within

 

 

a 10 mile area surrounding the perimeter of the Territory; or (4) within a 10 mile radius of any
Planet Beach location in existence on the date of expiration or termination of this Agreement;
provided, however, that this provision shall not apply to the operation of any other Planet Beach
franchised business pursuant to a valid franchise agreement with Planet Beach. The aforesaid
2-year period shall be tolled during any period of noncompliance.

19. INDEPENDENT CONTRACTOR; INDEMNIFICATION

19.1. Independent Contractor. You are an independent contractor responsible for full
control over the internal management and daily operation of your Spa, and neither Planet Beach nor
you are the agent, principal, partner, employee, employer or joint venturer of the other. You must
not act or represent yourself, directly or by implication, as an agent, partner, employee or joint
venture of Planet Beach, nor may you incur any obligation on Planet Beach’s behalf or in its name.

19.2. Indemnification. You must defend, indemnify and hold Planet Beach and/or its
affiliates harmless from all fines, suits, proceedings, claims, demands, obligations or actions of
any kind (including costs and reasonable attorneys’ fees) arising in whole or in part from
training, the construction or operation of your Spa, or the performance of your obligations under
this Agreement that exist upon execution or that may arise in the future, except as otherwise
provided in this Agreement.

20. NOTICES

All notices, requests and reports to be given under this Agreement shall be in writing, and
delivered by either hand; e-mail with a confirming receipt; overnight mail; certified mail, return
receipt requested, prepaid; or by facsimile transmission (except that regular monthly and other
reports from you may be sent by regular mail), to the address or fax number set forth in the Data
Sheet (which may be changed by written notice).

21. SALE OR ASSIGNMENT

21.1. Assignment by Planet Beach. Planet Beach has the right to assign this Agreement and
to delegate its obligations under this Agreement in whole or in part in its sole discretion.
Planet Beach is not obligated to provide you with prior notice of such assignment.

21.2. Assignment by You. Your rights under this Agreement are personal, and you shall not
sell, transfer, assign or encumber your interest in the franchised business without our prior
written consent.

21.3. Conditions for Transfer. Planet Beach shall have the right to condition its consent
to a transfer of the Spa upon:

21.3.1. Planet Beach’s approval of buyer, which approval shall not be unreasonably withheld;

21.3.2. The satisfaction of all monetary and non-monetary obligations under this Agreement
and any other agreement between you and Planet Beach or its affiliates;

21.3.3. Planet Beach is provided with an executed agreement of sale between you and the
buyer;

21.3.4. Your execution (or your principals’ execution, as applicable) of a general release,
in a form prescribed by Planet Beach, of all claims against Planet Beach and its officers,
directors, agents, employees, and affiliates. Notwithstanding such release, you shall
remain obligated under those provisions of this Agreement that expressly extend beyond the
term hereof; and

 

 

21.3.5. The buyer’s execution of Planet Beach’s then-current Single Unit Franchise Agreement
and payment to Planet Beach of a transfer fee equal to 35% of the then-current Initial
Franchise Fee.

21.4. Death or Disability. In the event of your death, disability or incapacitation (or
the death, disability or incapacitation of your principals or personal guarantors if you are a
partnership, corporation or limited liability company), your legal representative (or your
principal’s or guarantor’s respective legal representative, as applicable) shall have the right to
continue the operation of the Spa under this Agreement, without payment of a transfer fee, if: (i)
within 90 days from the date of death, disability or incapacitation (the “90 day period”), such
person has obtained Planet Beach’s prior written approval; and (ii) such person successfully
completes Planet Beach’s required training programs (which Planet Beach will provide at its
then-current tuition rate). Such assignment by operation of law will not be deemed in violation of
this Agreement, provided such heirs or legatees accept the conditions imposed by this Agreement and
are acceptable to Planet Beach.

21.5. Right of First Refusal. Planet Beach shall have the irrevocable first right and
option to purchase your business on the same terms and conditions as any bona fide purchaser who
wishes to become a Planet Beach franchisee. Planet Beach may exercise this right of first refusal
by notifying you of Planet Beach’s decision to do so in writing within 30 days after receipt of any
third party offers that you provide. Any sale or attempted sale without first giving Planet Beach
the right of first refusal shall be void and of no force or effect.

21.6. Transfer to a Corporation or Limited Liability Company. You have the right to assign
your rights under this Agreement to a corporation or limited liability company provided:

	 	21.6.1.	 	The entity is newly organized and its activities are exclusively confined to
operating the Planet Beach franchise;
	 
	 	21.6.2.	 	You are, and at all times remain, the owner of 51% of the outstanding shares of the
corporation or a controlling interest in the limited liability company;
	 
	 	21.6.3.	 	The new entity delivers to Planet Beach a written assumption of your obligations
under this Agreement;
	 
	 	21.6.4.	 	All shareholders, members and/or managers of the new entity sign Planet Beach’s
Guaranty Agreement; and
	 
	 	21.6.5.	 	The entity must adhere to the requirements set forth in this Agreement relating to
management of the Spa.

22. CHANGES AND MODIFICATIONS

Franchisor reserves and shall have the sole right to make changes in the Manual, the System, and
the Proprietary Marks at any time and without prior notice to Franchisee. Franchisee understands
and agrees that due to changes in competitive circumstances, presently unforeseen changes in the
needs of customers, and/or presently unforeseen technological innovations, the System must not
remain static in order that it best serve the interest of Franchisor, franchisees, and the System.
Accordingly, Franchisee expressly understands and agrees that Franchisor may from time to time
change the components of the System, including but not limited to, altering the programs, services,
methods, standards, forms, policies and procedures of the System; adding to, deleting from or
modifying those programs, products and services

 

 

which the Franchised Business is authorized to offer; and changing, improving or modifying the
Proprietary Marks. Subject to other provisions of this Agreement, Franchisee expressly agrees to
abide by any such modifications, changes, additions, deletions and alterations at its sole expense.

23. TERMINATION

23.1. Automatic Termination. This Agreement will automatically terminate, without notice
and without an opportunity to cure, if:

     23.1.1. You make an assignment for the benefit of creditors, file a voluntary petition in
bankruptcy, are adjudicated a bankrupt or insolvent, file or acquiesce in the filing of a petition
seeking reorganization or arrangement under any federal or state bankruptcy or insolvency law, or
consent to or acquiesce in the appointment of a trustee or receiver for you or for the Spa; or

     23.1.2. You purport to sell, transfer or assign your rights under this Agreement.

23.2. Termination With Notice and Without Opportunity to Cure. Planet Beach has the right
to terminate this Agreement, which termination shall become effective upon delivery of notice of
termination, without providing you an opportunity to cure, if:

     23.2.1. Proceedings are commenced to have you adjudicated as bankrupt or to seek your
reorganization under any state or federal bankruptcy or insolvency law, and such proceedings are
not dismissed within 60 days, or a trustee or receiver is appointed for you or for the Spa without
your consent, and the appointment is not vacated within 60 days;

     23.2.2. A levy or writ of attachment or execution or any other lien is placed against you or
any of your principals, as applicable, or any of your assets or your principal’s assets which is
not released or bonded against within 30 days;

     23.2.3. In the sole and absolute discretion of Planet Beach, you fail to successfully complete
all required Planet Beach training programs at least 60 days following the opening of your Spa;

     23.2.4. You or any of your principals are insolvent.

     23.2.5. You or any of your principals are convicted of or plead no contest to a felony or
criminal misconduct relevant to the performance of your duties under this Agreement;

     23.2.6. You have misrepresented any material information to Planet Beach given in connection
with this Agreement including, but not limited to information in your franchise application, or you
falsify any material information provided to Planet Beach;

     23.2.7. You or your principals commit any fraud or engage in any illegal conduct in
connection with the Spa; or intentionally underreport or misstate any information you are required
to report to Planet Beach;

     23.2.8. You misuse any of the Proprietary Marks, Copyrights or Confidential Information and
fail to immediately cease or correct such use after receiving written or oral notification from
Planet Beach;

     23.2.9. You fail to find a site for your Spa and submit it to Planet Beach for approval within
60 days of the execution of this Agreement, and you fail to request in writing, and Planet Beach
does not elect to grant you, an extension of this Site Selection Period;

 

 

     23.2.10. You fail to open your Spa within 275 days of Planet Beach’s execution of this
Agreement;

     23.2.11. You abandon your Spa (for purposes of this provision, the term “abandon” shall mean
your failure to operate the Spa for 3 or more consecutive days);

     23.2.12. You fail to cure any default of your lease or sublease for your Spa’s location
within the relevant cure period, if any, or to remedy any default under any note,
lease, or sublease for the Spa’s location, or for the equipment or inventory therein, or lose the
right to possession of the Spa’s location, provided however, that if any such loss of possession
results through no fault of your own, and the premises are damaged or destroyed by fire, flood or
other natural disaster such that they cannot, in Planet Beach’s sole judgment, reasonably be
restored, or you are not permitted under the lease or sublease to restore, then this Agreement
shall not be terminated for that reason for a period of 60 days thereafter, provided that Planet
Beach has approved (i) a site within that time to which you will relocate for the remainder of the
term of this Agreement; and (ii) your schedule for reopening the Spa, which approval shall not be
unreasonably withheld;

     23.2.13. You purport to transfer any rights or obligations arising under this Agreement to any
third party without Planet Beach’s prior written consent, including the sale of the assets to a
non-Planet Beach franchisee;

     23.2.14. You violate the confidentiality/non-disclosure obligations of this Agreement;

     23.2.15. The provisions contained in this Agreement for transfer by you upon death,
disability or incompetence are not strictly followed;

     23.2.16. You violate the covenant not to compete;

     23.2.17. You fail to obtain Planet Beach’s approval or consent as required by this
Agreement;

     23.2.18. You violate any of the provisions of this Agreement and/or any other agreement with
Planet Beach on 2 or more occasions within any 12-month period (notwithstanding the cure of any
individual violation) and you have failed, on each occasion, to cure your violations within the
allotted cure period; or

     23.2.19. You violate the terms of the Construction Loan Agreement and/or any of its ancillary
documents. See Item 10.

23.3. Termination by Planet Beach After a Thirty (30) Day Cure Period. Planet Beach has
the right to terminate this Agreement, after providing you a 30-day cure period, if you fail to
comply with any term of this Agreement not listed in Paragraph 22.2.

23.4. Cross-Default. If you are the owner of more than 25% of another Planet Beach
franchise or corporate or limited liability company franchisee, then any breach of the franchise
agreement for such additional franchise will constitute a breach of this Agreement, and be grounds
for Planet Beach to terminate this Agreement. Moreover, a breach of this Agreement is grounds for
termination of any other agreement you have with Planet Beach or its affiliates.

 

 

24. YOUR OBLIGATIONS UPON TERMINATION

24.1. Upon termination or expiration of this Agreement, you shall:

     24.1.1. Promptly pay to Planet Beach and/or its affiliates any sums due and owing, and to
other persons or entities sums which may result in a claim of liability to Planet Beach. You must
also promptly pay Planet Beach the royalty fees otherwise due for the remaining term of this
Agreement discounted to present value using an interest rate of 8%. This paragraph shall not apply
in the event the termination is due to your bankruptcy;

     24.1.2. Immediately cease using the Proprietary Marks, Copyrights and Confidential Information
and refrain from referencing any past association with Planet Beach;

     24.1.3. Immediately discontinue all marketing under the name “Planet Beach,” or any similar
name;

     24.1.4. Promptly cancel or transfer to Planet Beach, its affiliates or Planet Beach’s designee
any and all registrations and/or telephone listings under the name “Planet Beach”, or any similar
designation and execute such instruments and take such steps as Planet Beach may require to
accomplish the transfer or cancellation of any such registration or listing. You hereby grant to
Planet Beach power of attorney to cancel any fictitious name registration under the name referenced
above, or any similar name;

     24.1.5. If directed by Planet Beach, promptly make such changes and modifications in your
business methods, Spa facility, and otherwise as Planet Beach directs so as to effectively
distinguish the franchise location from any appearance as a Planet Beach Spa;

     24.1.6. Promptly destroy or surrender to Planet Beach all signs, stationery, letterhead, forms
and other printed materials containing any of the Proprietary Marks or any other similar name or
mark;

     24.1.7. Promptly return to Planet Beach the Operations Manual and other materials provided by
Planet Beach or containing Confidential Information or Trade Secrets, or other information which
relates to the System or the operation of the Spa, including but not limited to computer files,
customer data, programs and other materials provided to you by Planet Beach;

     24.1.8. Maintain all books, records and reports Planet Beach requires for a period of not less
than 1 year, and permit Planet Beach to inspect such documents;

     24.1.9. Deliver to Planet Beach a complete list of all persons employed by you during the 3
years immediately preceding termination, together with all employment files for each person on the
list;

 

 

     24.1.10. Provide Planet Beach, within 30 days after the effective date of termination or
expiration, evidence satisfactory to Planet Beach of your compliance with the
foregoing obligations; and

     24.1.11. Comply with all provisions of this Agreement that by their nature survive the
termination or expiration of this Agreement.

24.2. Security Interest in Personal Property. Planet Beach shall have a security
interest in any equipment, supplies and other personal property on the site if Planet Beach has not
received all funds due and owing from you and if Planet Beach is entitled by law to possession and
a lien against such property.

24.3. Option to Purchase Personal Property. Planet Beach, its affiliate or its assignee
also has the option, but is not obligated, to purchase any personal property used in connection
with the operation of your Spa by providing you written notice of its election within 30 days after
termination or expiration of this Agreement and paying you the book value for such personal
property within 30 days of such notice. For purposes of this paragraph, “book value” means the
amount you actually paid for the personal property less depreciation (calculated by using the
straight-line depreciation method on a 10 year depreciation schedule irrespective of the
depreciation method or schedule you use for accounting purposes). Notwithstanding the foregoing,
to the extent that Planet Beach exercises its right to purchase any personal property that is
subject to a lease or finance agreement, the purchase price of such personal property shall equal
the amount of your remaining obligations under the lease or finance agreement, as applicable. In
the event that the amounts due are in excess of book value, then the purchase price shall be equal
to the lesser of the amount due under the lease or finance agreement or book value. Planet Beach
shall be entitled to offset the purchase price by the amount of money owed by you to Planet Beach
for any payments necessary to acquire clear title to property or for any other debt. If Planet
Beach exercises its option to purchase, pending the closing of such purchase, Planet Beach has the
right to appoint a manager to maintain operation of the Spa, or Planet Beach may require that you
close the Spa during such period without removing any assets. You are required to maintain in
force all insurance policies required under this Agreement until the date of such closing.

25. CHOICE OF LAW; DISPUTE RESOLUTION

25.1. Governing Law. This Agreement shall be deemed to have been made in the State of
Louisiana and shall be construed according to the laws of Louisiana without regard to its conflict
of laws, LCC Arts. 3515 et seq., and any amendments and/or revisions thereto.

25.2. Internal Dispute Resolution. Before commencing any legal action against Planet Beach
or its affiliates with respect to any such claim or dispute, you must submit a notice of dispute
which specifies, in detail, the precise nature and grounds of such claim or dispute to the Planet
Beach Legal Department. If you are in a territory with an Area Representative, you must first
submit the claim directly to your Area Representative prior to engaging PBFC’s Legal Department.
Resolution of your dispute may involve an external, neutral Ombudsman at Planet Beach’s discretion.
If your claim or dispute cannot be resolved you must agree to a face to face meeting between you,
your attorney if you have retained one, a corporate representative from Planet Beach and the
General Counsel prior to engaging in mediation. This meeting may occur at a neutral meeting place.
You must exhaust these internal dispute resolution procedures before proceeding to mediation.

 

 

25.3. Mediation. At Planet Beach’s option, all claims or disputes between you and Planet
Beach or its affiliates arising out of, or in any way relating to, this Agreement, or any of the
parties’ respective rights
and obligations arising out of this agreement, shall be submitted first to mediation, in Jefferson
Parish, Louisiana under the auspices of the National Franchise Mediation Program (“NFMP”), in
accordance with the NFMP’s Commercial Mediation Rules then in effect. The parties shall each bear
their own costs of mediation and shall share equally the filing fee imposed by NFMP and the
mediator’s fees. Planet Beach’s rights to mediation, as set forth herein, may be specifically
enforced by Planet Beach.

25.4. Arbitration. At Planet Beach’s option, all disputes and claims relating to this
Agreement or any other agreement entered into between the parties, the rights and obligations of
the parties, or any other claims or causes of action relating to the making, interpretation, or
performance of either party under this Agreement, shall be settled by arbitration in Jefferson
Parish, Louisiana in accordance with the Federal Arbitration Act and the Commercial Arbitration
Rules of the American Arbitration Association (“AAA”). Any arbitration proceeding, or any claim in
arbitration (including any defense and any claim of setoff or recoupment), must be brought or
asserted before the expiration of the earlier of (1) the time period for bringing an action under
any applicable state or federal statute of limitation; (2) 1 year after the date upon which a
party discovered or should have discovered, the facts giving rise to an alleged claim; or (3) 2
years after the first act or omission giving rise to an alleged claim. Claims of Planet Beach
attributable to the underreporting of sales and claims of the parties for indemnification shall be
subject only to the applicable state or federal statute of limitation.

The right and duty of the parties to this Agreement to resolve any disputes by arbitration shall be
governed by the Federal Arbitration Act, as amended. Neither party shall pursue class claims
and/or consolidate the arbitration with any other proceeding to which the franchisor is a party.
Each party must bear its own costs of arbitration including the fee for their respective
arbitrator; provided, however, that the neutral or the single arbitrator’s fee shall be shared
equally by Planet Beach and you.

The arbitrator’s award shall include all fees, costs and attorneys’ fees for the prevailing party.
The arbitrators shall have no authority to amend or modify the terms of the Agreement. To the
extent permitted by applicable law, no issue of fact or law shall be given preclusive or collateral
estoppel effect in any arbitration, except to the extent such issue may have been determined in
another proceeding between the parties. Judgment upon the award of the arbitrator shall be
submitted for confirmation to the United States District for the Eastern District of Louisiana and,
if confirmed, may be subsequently entered in any court having competent jurisdiction. This
agreement to arbitrate shall survive any termination or expiration of this Agreement.

25.5. Third Party Beneficiaries. Planet Beach’s officers, directors, shareholders, agents,
employees and/or affiliates are express third party beneficiaries of this Agreement and the
mediation and arbitration provisions contained herein, each having authority to specifically
enforce the right to mediate and arbitrate claims asserted against such person(s) by you.

25.6. Injunctive Relief. Nothing contained in this Agreement herein shall prevent the
parties from applying to or obtaining from any court having jurisdiction, without bond, a writ of
attachment, temporary injunction, preliminary injunction and/or other emergency relief available to
safeguard and protect the parties’ interest prior to the filing of any legal proceeding or pending
the trial or handing down of a decision or award pursuant to any legal proceeding conducted
hereunder.

25.7. Jurisdiction and Venue. With respect to any proceeding, the parties agree that any
action at law or in equity instituted against either party to this Agreement shall be commenced
only in the 24th Judicial District Court for the Parish of Jefferson, Louisiana or the United
States District Court for the Eastern District of Louisiana at Planet Beach’s discretion.

 

 

25.8. Jury Trial Waiver. With respect to any proceeding, the parties hereby agree to
waive trial by jury
in any action, proceeding or counterclaim, whether at law or equity, regardless of which party
brings suit. This waiver shall apply to any matter whatsoever between the parties hereto which
arises out of or is related in any way to this Agreement, the performance of either party, and/or
your purchase from Planet Beach of the franchise and/or any goods or services.

25.9. Waiver of Punitive Damages. You waive to the fullest extent permitted by law, any
right to or claim for any punitive, exemplary, incidental, indirect, special or consequential
damages (including, without limitation, lost profits) which you the parties may have against Planet
Beach, its affiliates, successors or assigns, arising out of any cause whatsoever (whether such
cause be based in contract, negligence, strict liability, other tort or otherwise) and agree that
in the event of a dispute, recovery shall be limited to actual damages. If any other term of this
Agreement is found or determined to be unconscionable or unenforceable for any reason, the
foregoing provisions shall continue in full force and effect, including, without limitation, the
waiver of any right to claim any consequential damages.

25.10. Class Action Waiver. You hereby agree to waive any class action proceeding or
counterclaim against Planet Beach, its affiliates, successors or assigns, whether at law or equity,
regardless of which party brings suit. This waiver shall apply to any matter whatsoever between
the parties hereto which arises out of or is related in any way to this Agreement, the performance
of either party, and/or your purchase from Planet Beach, its affiliates, successors or assigns of
the franchise and/or any goods or services.

25.11. Attorneys’ Fees. If either party institutes any judicial or arbitration proceeding
to enforce any obligations under or to interpret the terms of this Agreement and Planet Beach
prevails in the action or proceeding, you shall be liable to Planet Beach for all costs, including
reasonable attorneys’ fees, incurred in connection with such proceeding.

25.12. Nonwaiver. Planet Beach’s failure to insist upon strict compliance with any
provision of this Agreement shall not be a waiver of Planet Beach’s right to do so, any law,
custom, usage or rule to the contrary notwithstanding. Delay or omission by Planet Beach
respecting any breach or default shall not affect Planet Beach’s rights respecting any subsequent
breaches or defaults. All rights and remedies granted in this Agreement shall be cumulative.
Planet Beach’s election to exercise any remedy available by law or contract shall not be deemed a
waiver or preclude exercise of any other remedy.

26. CONSTRUCTION

26.1. Entire Agreement. This Agreement contains the entire agreement between the parties
concerning the franchisee’s franchise; no promises, inducements or representations not contained in
this Agreement have been made, nor shall any be of any force or effect, nor binding on the parties.
Modifications of this Agreement must be in writing and signed by both parties. Planet Beach
reserves the right to change Planet Beach’s policies, procedures, standards, specifications or
manuals at Planet Beach’s discretion. Nothing in the Agreement or in any related agreement is
intended to disclaim the representation we made in the franchise disclosure document.

26.2. Survival. Any provisions of this Agreement which may be reasonably interpreted to
impose any obligation after termination or expiration hereof shall survive such termination or
expiration and be binding upon the parties.

26.3. Severability. The parties agree that if any provisions of this Agreement may be
construed in two ways, one of which would render the provision illegal or otherwise voidable or
unenforceable and the

 

 

other which would render it valid and enforceable, such provision shall have
the meaning, which renders it valid and enforceable. The language of all provisions of this
Agreement shall be construed according to
fair meaning and not strictly construed against either party. The provisions of this Agreement are
severable, and this Agreement shall be interpreted and enforced as if all completely invalid or
unenforceable provisions were not contained herein, and partially valid and enforceable provisions
shall be enforced to the extent that they are valid and enforceable. If any material provision of
this Agreement shall be stricken or declared invalid, the parties agree to negotiate mutually
acceptable substitute provisions. In the event that the parties are unable to agree upon such
provisions, Planet Beach reserves the right to terminate this Agreement.

26.4. Construction. The terms “franchisee” and “you” shall be construed to refer to the
male or female gender in all cases where the franchisee is an individual, masculine or feminine
modifiers and pronouns notwithstanding. The term “Franchisee” and “you” include all persons or
entities identified as “franchisee” in the Data Sheet. The term “principals” shall include your
general and limited partners if you are a partnership; your officers, directors and shareholders if
you are a corporation; and your members and managers if you are a limited liability company. The
paragraph captions are inserted only for convenience and reference, and are not intended to define,
limit or describe the scope, intent or language of this Agreement or any provisions hereof.

26.5. Binding Agreement. This Agreement shall be binding upon the parties and their heirs,
executors, personal representatives, successors and assigns. All franchisee signatories to this
Agreement and all partners of a partnership franchisee, all officers, directors and shareholders of
a corporate franchisee, and all members and managers of a limited liability company franchisee,
shall be jointly and severally liable for the performance of all terms, covenants and conditions
hereof.

			
	27.	 	PERSONAL GUARANTY OF SHAREHOLDERS, PARTNERS, MEMBERS
AND MANAGERS

You acknowledge that all partners in a limited partnership, shareholders in a corporate franchisee,
or members and managers in a limited liability company franchisee are obligated to execute a
Guaranty Agreement in which each agrees to personally abide by all of the terms and conditions of
this Agreement, and guarantees to Planet Beach your performance of this Agreement and your
financial obligations. Unless all such partners, shareholders, or members and managers execute
such Guaranty Agreement concurrently herewith, this Agreement shall, at Planet Beach’s option,
become null and void and confer no rights upon you nor any partner, shareholder, member or manager.
All guarantors shall be jointly and severally liable for the performance of all of the terms,
covenants and conditions hereof. If you are an individual(s), or subsequent to execution hereof,
you assign this Agreement to an individual(s), such individual’s spouse hereby personally and
unconditionally guarantees without notice, demand or presentment the payment of all of your
monetary obligations under this Agreement as if each were an original party to this Agreement in
his or her individual capacity. All such spouses further agree to be bound by the restrictions
upon your activities upon transfer, termination or expiration of this Agreement as if each were an
original party to this Agreement in his or her individual capacity. All such spouses shall execute
the Guaranty Agreement in the form attached as Exhibit 3 to this Agreement.

			
	28.	 	REPRESENTATIONS AND ACKNOWLEDGMENTS

28.1. No Warranties. Planet Beach makes no warranties, express or implied, nor any
representation whatsoever other than as expressly set forth herein.

28.2. No Authority. NO SALESPERSON, REPRESENTATIVE OR OTHER PERSON HAS THE AUTHORITY TO
BIND OR OBLIGATE PLANET BEACH EXCEPT AN AUTHORIZED OFFICER

 

 

OF PLANET BEACH BY WRITTEN DOCUMENT.
YOU ACKNOWLEDGE THAT NO REPRESENTATIONS, PROMISES, INDUCEMENTS, GUARANTEES OR WARRANTIES OF ANY
KIND WERE MADE BY OR ON BEHALF OF PLANET BEACH, WHICH HAVE CAUSED YOU TO ENTER INTO THIS AGREEMENT.
YOU UNDERSTAND THAT WHETHER YOU SUCCEED AS A FRANCHISEE IS DEPENDENT UPON YOUR EFFORTS, BUSINESS
JUDGMENTS, THE PERFORMANCE OF YOUR EMPLOYEES, MARKET CONDITIONS AND VARIABLE FACTORS BEYOND THE
CONTROL OR INFLUENCE OF PLANET BEACH. YOU FURTHER UNDERSTAND THAT SOME FRANCHISEES ARE MORE, OR
LESS, SUCCESSFUL THAN OTHER FRANCHISEES AND THAT PLANET BEACH HAS MADE NO REPRESENTATIONS THAT YOU
WILL DO AS WELL AS ANY OTHER FRANCHISEE.

28.3. Receipt. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF PLANET BEACH’S FRANCHISE DISCLOSURE
DOCUMENT, FINANCIAL STATEMENTS AND CONTRACTS FOR THE PLANET BEACH SPA FRANCHISE AT LEAST 14
CALENDAR DAYS PRIOR TO EXECUTION OF THIS AGREEMENT OR PAYMENT OF ANY MONIES FOR THE FRANCHISE. THE
UNDERSIGNED ACKNOWLEDGES RECEIPT OF THIS AGREEMENT, WITH ALL BLANKS COMPLETED AND WITH ANY
AMENDMENTS AND EXHIBITS, AT LEAST 7 CALENDAR DAYS PRIOR TO EXECUTION OF THIS AGREEMENT.

28.4. Your Business Efforts. YOU, AS AN INDEPENDENT BUSINESS PERSON OR ENTITY, RECOGNIZE
THAT THERE ARE ECONOMIC HAZARDS IN CONNECTION WITH THE OPERATION OF ANY BUSINESS, INCLUDING THE
TYPE CONTEMPLATED BY YOU PURSUANT TO THIS AGREEMENT. YOU ACKNOWLEDGE THAT PLANET BEACH DOES NOT
GUARANTEE YOUR SUCCESS, FINANCIAL OR OTHERWISE, EVEN THOUGH YOU MAY FOLLOW OR RELY ON PLANET
BEACH’S ADVICE, RECOMMENDATIONS, PROGRAMS, POLICIES AND PROCEDURES. YOU ACKNOWLEDGE THAT YOU HAVE
MADE AN INDEPENDENT INVESTIGATION OF THE FRANCHISED BUSINESS AND THAT NO REPRESENTATION HAS BEEN
MADE BY PLANET BEACH REGARDING THE POTENTIAL OR FUTURE PROFITABILITY OF THE FRANCHISED BUSINESS,
NOR OF THE FUTURE NUMBER OF PLANET BEACH SPAS AND ANY BENEFITS FLOWING THEREFROM. YOU UNDERSTAND
THAT ANY INCOME OR PROFITS YOU MAY REALIZE WILL BE PRIMARILY THE RESULT OF YOUR EFFORTS AND LABORS,
AND NOT THOSE OF PLANET BEACH OR THIRD PARTIES. THIS FRANCHISE IS NOT A SECURITY AND YOU AGREE
NOT TO RELY ON PLANET BEACH OR ANY THIRD PARTY TO PRODUCE INCOME FOR YOU PURSUANT TO THIS
AGREEMENT.

28.5. Opportunity to Review by Your Advisors. YOU ACKNOWLEDGE THAT PLANET BEACH HAS
RECOMMENDED, AND THAT YOU HAVE HAD THE OPPORTUNITY TO OBTAIN, REVIEW OF THIS AGREEMENT AND PLANET
BEACH’S FRANCHISE DISCLOSURE DOCUMENT BY YOUR LAWYER, ACCOUNTANT OR OTHER BUSINESS ADVISOR PRIOR TO
EXECUTION HEREOF.

28.6. Execution Of Agreement. EACH OF THE UNDERSIGNED PARTIES WARRANTS THAT IT HAS THE
FULL AUTHORITY TO SIGN AND EXECUTE THIS AGREEMENT. IF YOU ARE A PARTNERSHIP, CORPORATION OR
LIMITED LIABILITY COMPANY, THE PERSON EXECUTING THIS AGREEMENT ON BEHALF OF SUCH PARTNERSHIP,
CORPORATION OR LIMITED LIABILITY COMPANY WARRANTS TO PLANET BEACH, BOTH INDIVIDUALLY AND IN HIS
CAPACITY AS PARTNER, OFFICER, MEMBER OR MANAGER, AS APPLICABLE, THAT ALL OF THE PARTNERS OF THE
PARTNERSHIP, ALL OF THE SHAREHOLDERS OF THE CORPORATION, OR ALL OF THE MEMBERS AND MANAGERS OF THE
LIMITED LIABILITY COMPANY, AS APPLICABLE, HAVE READ AND APPROVED THIS AGREEMENT, INCLUDING ANY
RESTRICTIONS WHICH THIS AGREEMENT PLACES UPON RIGHTS TO

 

 

TRANSFER THEIR INTEREST IN THE PARTNERSHIP,
CORPORATION OR LIMITED LIABILITY COMPANY.

28.7. Execution in Duplicate. THIS AGREEMENT MAY BE EXECUTED IN DUPLICATE, EACH OF WHICH
SHALL BE DEEMED AN ORIGINAL.

         The parties hereto, intending to be legally bound, have hereunto executed this Agreement the
day and year first above written.

	 	 	 	 	 
	 	PLANET BEACH FRANCHISING CORPORATION

 	 
	 	By:  	 	 

	 	 	 	 	 
	 

	 	This Agreement is not fully executed until signed by the
CEO or COO of Planet Beach Franchising Corporation:	 
	 
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 	FRANCHISEE	 
	 
	 	 	 	 
	 	 	 	 	 
	Witness
	 	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	Witness
	 	 	 	 

 

 

EXHIBIT 1

TO

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

SCHEDULE OF AUTHORIZED AND APPROVED PRODUCTS AND SERVICES

For purposes of the Franchise Agreement, the following products and services are currently
“Authorized and Approved Products and Services” as described in Section 9.3.

PBFC: for private label products and UMO related products and accessories.

Australian Gold: for Australian Gold, Swedish Beauty, Designer Skin private label and co-branded
products.

Whiter Image: for teeth whitening products.

Legacy: for private label candles.

Dream Time: for authorized retail products.

Matworks: for all Spa flooring covering needs including vinyl base, adhesives and transition
materials.

Meletio: for all Spa light fixtures.

Spa furniture vendors as approved by PBFC: for all Spa furniture including lobby and service room
furniture.

Architectural/Engineering Firms as approved by PBFC: for all Spa Mechanical, Electrical, Plumbing
(MEP) Engineering and Architectural Drawings.

General Contractors are approved by PBFC on a per store basis.

ACIGI Relaxation — Cyber Relax Massage Chair

AMI — Aqua Massage: Massage and Hydrotherapy equipment and authorized accessories.

JTL Enterprises — HydroMassage (Dry Hydrotherapy Massage)

Ergoline — UV Equipment (International only)

ETS — UV Equipment (Domestic only)

MTI — Mystic Tan Booths: UV Free/Spray Tanning equipment and authorized retail products.

Photo Medex: Lumiere` (Facial Unit) and authorized retail products.

Sybaritic, Inc. — Hydration Station and SlimCapsule equipment and authorized products.

UMO — UMO Facial & Hand Spa

 

 

Oxygen Inc. — 4-person Oxygen Station equipment and authorized retail product accessories.

Therasage — Far Infrared Massage Bed, Sauna and Chairs

Millennium — Software

Workflow One — Printed Materials

Pel Hughes — Printed Materials/Direct Mail

Professa Grafix — Printed Materials

Valpak — Marriage Mail

Spa Boom — Online Gift Certificates

Lionfish — Contempo Spa Catalog Orders

	 	 	 	 	 
	 	PLANET BEACH FRANCHISING CORPORATION

 	 
	 	By:  	 	 

	 	 	 	 	 
	 

	 	FRANCHISEE	 	 
	 
	 	 	 
	Witness
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Witness
	 	 	 	 

 

 

EXHIBIT 2

TO

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

APPROVED LOCATION AND TERRITORY ADDENDUM

The undersigned franchisee has the right to establish one Planet Beach Spa at the following
Approved Location (as defined in Section 2.1 of the Franchise Agreement):

 

 
 

 

Franchisee’s Territory (as defined in Section 3 of the Franchise Agreement) shall encompass the
following area:

The radius of the circle will be based on where the spa site is located and will be determined as
follows:

	 	 	 	(i.) one-half of a mile (1/2 mile) if your Spa is located in a Downtown area or the
Central Core of a large city;
	 
	 	 	 	(ii.) two miles (2.0 miles) if your Spa is located in any other Area.     

	 	 	 	 	 
	 	PLANET BEACH FRANCHISING CORPORATION

 	 
	 	By:  	 	 

	 	 	 	 	 
	 

	 	FRANCHISEE	 	 
	 
	 
	 	 	 	 
	 	 	 
	Witness
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Witness
	 	 	 	 

 

 

EXHIBIT 3

TO

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

GUARANTY AGREEMENT

     WHEREAS,
a Franchise Agreement dated
                                        ,                     , has been entered into between Planet Beach
Franchising Corporation and                                         
(referred to as “Franchisee”) for the operation by Franchisee of a Planet Beach location; and

     WHEREAS, the undersigned guarantor desires to guarantee the obligations of Franchisee to
Planet Beach Franchising Corporation;

     NOW, THEREFORE, the parties hereto, intending to be legally bound, do hereby agree as follows:

     The undersigned, as a person with an interest in a Planet Beach franchise, agrees to
personally and unconditionally guarantee the obligations of Franchisee to Planet Beach and shall
personally be subject to and bound by all terms, conditions, restrictions and prohibitions
contained in the Planet Beach Franchising Corporation’s Single Unit Franchise Agreement including,
without limitation, the confidentiality provisions, covenants, and indemnification provisions
contained in Sections 12, 18 and 19.2, respectively. Further, the undersigned agrees to personally
act as surety for the full and faithful performance of all of the financial obligations,
commitments and payments required of the Franchisee in any such subject Franchise Agreement. The
undersigned agrees that Planet Beach Franchising Corporation does not have to pursue any remedies
it may have against the Franchisee or any other individual guarantor; but, rather, it may proceed
directly and primarily against the undersigned with or without joining the Franchisee or other
guarantors as principals or as named parties in any such proceeding. The undersigned is jointly
and severally liable for such obligations, commitments and payments required of the Franchisee.

	 	 	 	 	 
	 	 	 
	Witness

	 	Guarantor, Individually	 	 
	 
	 	 	 	 
	 	 	 
	Witness

	 	Guarantor, Individually	 	 

 

 

ACKNOWLEDGMENT BY GUARANTOR

     WHEREAS, a Guaranty Agreement dated                                         ,
is being entered into between Planet Beach Franchising Corporation and                                                             
(“Guarantor”), whereunder Guarantor has guaranteed the obligations of a corporate,
limited partnership or limited liability company franchisee to Planet Beach Franchising
Corporation, or is the spouse of an individual franchisee of Planet Beach Franchising Corporation,
and

     WHEREAS, Planet Beach Franchising Corporation and Guarantor desire to clarify the relationship
between them.

     NOW, THEREFORE, Guarantor acknowledges that Guarantor has conducted an independent
investigation of the Planet Beach Franchising Corporation franchise program and recognizes that the
business venture contemplated by the franchisee involves business risk and success will be largely
dependent upon the ability of the franchisee, Guarantor and other persons with an interest in the
franchise as independent business persons. Planet Beach Franchising Corporation expressly
disclaims the making of, and Guarantor acknowledges not receiving, any guaranty or warranty,
express or implied, nor any representation as to the potential volume, profits or success of the
business venture contemplated by the Franchise Agreement. Guarantor further represents that
Guarantor is not a party to any agreement which might interfere with the performance required of
persons with an interest in the franchise under the Planet Beach Franchising Corporation’s Single
Unit Franchise Agreement, and that entering into such agreement shall not in any way interfere with
or constitute a breach of any prior existing contract to which Guarantor is a party.

	 	 	 	 	 
	 	 	 
	Witness

	 	Guarantor, Individually	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Witness

	 	Guarantor, Individually	 	 

 

 

EXHIBIT 4

TO

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

RIDER TO LEASE

     THIS RIDER TO LEASE made this                      day of                     20                    ,
by and between
                                                            , with principle offices at
                                (hereinafter
“Landlord”): and                                                             , with principle offices at
                                                            
(hereinafter “Tenant”); and Planet Beach Franchising Corporation, a Louisiana Corporation, with its
principal address at 5145 Taravella Road, Marrero, Louisiana 70072 (hereinafter “Franchisor”).

     This Rider supplements and forms a part of that certain lease between Landlord and Tenant,
dated                                         , 20                    , (the “Lease”) for leased premises located at
                                                             (the “Premises”). This Rider is entered into in connection with
Franchisor’s grant of a franchise to Tenant to operate a franchised business at the Premises. It
is intended to provide Franchisor the opportunity to preserve the Premises as a tanning Spa
operated under Franchisor’s brand in the event of any termination of the lease or any franchise
agreement between Franchisor and Tenant, and to assure Landlord that, if Franchisor exercises the
option to assume the Lease as provided in this Rider to Lease, any defaults of Tenant under the
Lease will be cured by Franchisor before it takes possession of the Premises. Landlord agrees that
Franchisor will have the right, but not the obligation, to assume the Lease of the Premises
attached hereto as Exhibit A, on the terms, covenants and conditions hereinafter set forth.

I. DEFAULT BY TENANT UNDER THE LEASE

1.0 Landlord will send Franchisor copies of all notices of default it gives to Tenant at the same
time it gives such notices to Tenant. If Tenant fails to cure any default within the period
specified in the Lease, Landlord will promptly give written notice to Franchisor, specifying the
default Tenant has failed to cure. Franchisor will have the right and option to assume the Lease
by giving written notice to Landlord and Tenant within thirty (30) days after the date of receipt
of Landlord’s notice that Tenant has failed to cure a default under the Lease.

1.1 Landlord will deliver possession of the Premises to Franchisor promptly after Landlord receives
Franchisor’s written notice exercising its option to assume the Lease. Franchisor, upon taking
possession of the Premises, will cure the defaults specified by Landlord and will execute and
deliver to Landlord an assumption of the Tenant’s rights and obligations under the Lease.

1.2 Franchisor will not be required to cure defaults and/or begin paying rent until Landlord
delivers possession of the Premises to Franchisor. If it becomes necessary for Landlord to pursue
legal action in order to evict Tenant and deliver possession of the Premises to Franchisor,
Franchisor will, upon written request by Landlord, pay into an escrow account with Landlord’s
attorney, such amounts as are necessary to cure Tenant’s defaults. If Landlord is unable to
deliver possession of the Premises to Franchisor within nine (9) months after the date of
Franchisor’s exercise of its option to assume the Lease, Franchisor will have the right, at any
time until Landlord delivers possession of the Premises, to rescind the option exercise, by written
notice to Landlord, whereupon all amounts in escrow shall be returned to Franchisor.

 

 

     II. TENANT’S FAILURE TO EXTEND THE LEASE TERM.

2.0 If the Lease contains the term renewal or extension right(s) and if Tenant allows the term to
expire without exercising said right(s), Landlord will give Franchisor written notice thereof, and
Franchisor will have the right and option to exercise the Tenant’s renewal or extension right(s) on
the same terms and conditions as are contained in the Lease by giving written notice to Landlord
within thirty (30) days of receipt of Landlord’s notice. If Franchisor exercises such right(s)
Landlord and Franchisor will promptly execute a lease assumption agreement that will provide for
Franchisor’s assumption of the Lease effective at the commencement of the extension or renewal
term.

     III. TERMINATION OF A FRANCHISE AGREEMENT.

3.0 Franchisor will have the right and option to assume the Lease if any franchise agreement
between Franchisor and Tenant is terminated for any reason during the term of the Lease. If any
franchise agreement between Franchisor and Tenant is terminated and Franchisor desires to assume
the Lease it may give written notice to Landlord requesting that Landlord specify any existing
defaults by Tenant under the Lease. Within fifteen (15) days after receipt of such notice,
Landlord will give Franchisor written notice specifying any existing defaults by Tenant under the
Lease.

3.1 If any franchise agreement between Franchisor and Tenant is terminated, Tenant shall, within
ten (10) days after written demand by Franchisor, assign all of its right, title and interest in
the Lease to Franchisor. If Tenant fails to do so, Tenant hereby designates Franchisor as its
agent to execute any and all documents, agreements and to take all action that may be necessary or
desirable to effectuate the assignment of the Lease and the relinquishment of any and all of
Tenant’s right there under. Landlord consents to such assignment, subject to Franchisor executing
as assumption of the Lease in form reasonably satisfactory to Landlord and curing all defaults of
Tenant under the Lease before taking possession of the Premises. Tenant further agrees to promptly
and peaceably vacate the Premises and to remove its personal property at the written request of
Franchisor. Any property not so removed by Tenant within ten (10) days following receipt of such
written request shall be deemed abandoned by Tenant.

3.2 Tenant agrees that termination of any franchise agreement for the Premises shall, at the option
of Landlord, be a default under the Lease.

     IV. ADDITIONAL PROVISIONS

4.0 Tenant shall remain liable to Landlord for all of its obligations under the Lease,
notwithstanding any assignment of the Lease to Franchisor. Franchisor shall be entitled to recover
from Tenant all amounts it pays to Landlord to cure Tenant’s defaults under the Lease, including
interest and reasonable collection costs.

4.1 Prior to taking possession of the Premises pursuant to its rights under this Rider to Lease,
Franchisor will cure the defaults specified by Landlord and execute and deliver to Landlord an
assumption of the Tenants right and obligation under the Lease. Franchisor corporation will pay,
perform and be bound by all of the duties and obligations of the Lease applicable to Tenant, except
that Franchisor may elect not to assume or be bound by the terms of any amendment to the Lease
executed by Tenant without obtaining Franchisor’s prior written approval, which shall not be
unreasonably withheld.

4.2 After Franchisor assumes Tenant’s interest in the Lease, Franchisor will not be subject to any
provision of the Lease that requires the Tenant to continuously operate a business in the Premises
during any period that the business in the Premises is closed for remolding or while the Franchisor
is seeking to obtain and train a new franchisee to operate a franchised business in the Premises.

 

 

4.3 After Franchisor assumes Tenant’s interests in the Lease, Franchisor may, without Landlord’s
consent, sublet the Premises to a franchisee of Franchisor provided the Franchisor remains
primarily liable under the Lease.

4.4 After Franchisor assumes Tenant’s interest in the Lease, Franchisor may assign this Lease so
long as Franchisor remains liable for the payment of rent and the performance of Tenant’s duties
and obligations under the Lease. Franchisor may also, with the prior written consent of Landlord,
assign without recourse its rights under the Lease. Landlord shall not unreasonably withhold its
consent to an assignment to a franchisee of Franchisor who meets Franchisor’s financial
qualification requirements. Upon receipt by Landlord of an assumption agreement in form reasonably
satisfactory to Landlord pursuant to which such franchisee agrees to assume the Lease and to
observe the terms, conditions and agreements on the part of Tenant to be performed under the Lease,
Franchisor shall be released from all liability as tenant under the Lease accruing after the date
of the effective date of the assignment.

4.5 If the Lease or Franchise Agreement for the Premises is terminated and Franchisor does not
exercise its option to assume the Lease, Tenant agrees, upon written demand by Franchisor, to
promptly remove signs, décor and other items which Franchisor reasonably requests be removed as
being distinctive and indicative of Franchisor’s trademarks and trade dress. Franchisor may enter
upon the Premises without being guilty of trespass or tort to effect such de-identification if
Tenant fails to do so within ten (10) days after receipt of written demand from Franchisor. Tenant
shall pay Franchisor for its reasonable cost and expenses in effecting de-identification.
Franchisor shall defend, indemnify and hold Landlord harmless from and against any claims arising
from Franchisor’s de-identification of the Premises.

4.6 BY EXECUTING THIS RIDER TO THE LEASE, FRANCHISOR DOES NOT HEREBY ASSUME ANY LIABILITY WITH
RESPECT TO THE PREMISES OR ANY OBLIGATION AS TENANT UNDER THE LEASE, UNLESS AND UNTIL FRANCHISOR
EXPRESSLY ASSUMES SUCH LIABILITY AND/OR OBLIGATION, AS HEREINABOVE DESCRIBED.

4.7 All notices hereunder shall be delivered by certified mail to the addresses described in the
Lease or to such other address as any party hereto may, by written notice instruct that notices be
given. In the case of Franchisor, notices should be sent to: Director of Location Development,
5145 Taravella Road, Marrero, Louisiana, 70072, until further notice.

THE NEXT PAGE IS THE SIGNATURE PAGE

 

 

     IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS LEASE OPTION RIDER TO BE EXECUTED AS
OF THE DATE FIRST ABOVE WRITTEN.

     Witness/Attest:

	 	 	 	 	 	 	 
	 	 	 	 	   
	 

	 	 	 	 	 	Landlord
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
President
	 
	 	 	 	 	 	 
	 

	 	 	 	 
 Individually
	 
	 	 	 	 	 	 
	 

	 	 	 	 
 Tenant
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
 President
	 
	 	 	 	 	 	 
	 	 	 	 	   
	 

	 	 	 	 	 	Individually

	 	 	 	 	 
	 	PLANET BEACH FRANCHISE CORPORATION

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 

 

 

EXHIBIT 5

TO 

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

Sublicense Agreement

     THIS SUBLICENSE AGREEMENT (“Sublicense” or “Agreement”) is made this                      day of                     , 200
                    ,
(the “Effective Date”) by and between Planet Beach Franchising Corporation (“Planet Beach”), a Delaware
corporation with an address at 5145 Taravella Road, Marrero, LA 70072 and                                          (“Franchisee” or “You”),
a                                          having principal offices at
                                                            .

     WHEREAS, Planet Beach has entered into a certain License Agreement for Software Distribution
and Use with Harms Software, Inc. (the “Main License”), pursuant to which it has acquired a license
to distribute and use certain software products for employee management, point-of-sale functions,
appointment booking, marketing, inventory control, and the integration and implementation of
various internal business and reporting functions, which software products (the “Licensed
Software”) are proprietary to and owned by Harms Software, Inc. (“Harms”); and

     WHEREAS, Planet Beach requires that each of its franchisees use such Licensed Software in
connection with the operation of its Planet Beach facilities; and

     WHEREAS, each of the parties hereto desires to enter into a sublicense agreement pursuant to
which Franchisee shall be permitted to use the Licensed Software in accordance with the terms and
conditions set forth and established herein.

     NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, Harms
and Franchisee hereby agree as follows:

     LICENSE. Planet Beach hereby grants to Franchisee a non-exclusive, limited, non-transferable
license (the “License” or the “Sublicense”) to use the Licensed Software distributed to You by
Planet Beach hereunder, along with associated documentation (the “Documentation”), solely in
connection with the operation by you of your Planet Beach Facility and subject to the terms and
conditions set forth in this Sublicense Agreement.

The Licensed Software shall also include any updates which Planet Beach distributes to Franchisee
during the term of this Sublicense Agreement. Franchisee’s rights to use the Licensed Software are
limited to a single approved location. Planet Beach and Harms specifically retain all right, title
and interest in and to all proprietary and intellectual property rights in and to the Licensed
Software, including without limitation, trade secrets, copyrights, trademarks, patents,
functionality and business methodology embodied therein, and the like. All rights not expressly
granted to Franchisee herein are specifically reserved to Planet Beach and Harms.

     LIMITATIONS ON USE. You may not rent, lease, sell or otherwise transfer or distribute copies
of the Licensed Software or Documentation to any other person or entity for any reason. You may
not modify or translate the Licensed Software or the Documentation for any reason. You may not
reverse assemble, reverse compile or otherwise attempt to create the source code from the Licensed
Software. You may not use the name of Harms Software or its Millennium brand or refer to Harms
Software directly or indirectly in any papers, articles, advertisements, sales presentations, news
releases or releases

 

 

to any third party without the prior written approval of Planet Beach for each such use. You may
not release the results of any performance or functional evaluation of any portion of the Licensed
Software to any third party without prior and express written approval of Planet Beach for each
such release.

     THIRD PARTY BENEFICIARY. You understand, acknowledge, and agree with Planet Beach that Harms
is an intended third party beneficiary of the terms and conditions of this Agreement.

     BACKUP AND TRANSFER. You may obtain a copy of the Licensed Software from Planet Beach for
essential backup purposes, provided the copy is retained at Franchisee’s approved location. You
may not sublicense, assign, delegate, rent, lease, time-share or otherwise transfer this license or
any of the related rights or obligations to any person or entity for any reason. Any attempt to
make any such sublicense, assignment, delegation or other transfer by you shall be void and of no
legal effect and shall automatically be deemed a material breach of this Agreement, which breach
shall trigger an automatic termination of this Agreement.

     If Planet Beach authorizes a sale of your franchise and transfer of your rights under your
Franchise Agreement to a third party (the “Transferee”) you must notify the Transferee that it will
be obligated to enter into a new Sublicense Agreement with Planet Beach, and that a “Re-License
Fee” of $250.00 will be required to be paid to Planet Beach to secure Planet Beach’s authorization
to use the Licensed Software and the Documentation and to receive technical support.

     OWNERSHIP. You own only the magnetic or other physical media on which the Licensed Software
and related Documentation are recorded or fixed. All content accessed through the Licensed
Software is the property of the applicable content owner and may be protected by applicable
copyright law. This Sublicense gives you no rights whatsoever to such content.

     TERM AND TERMINATION. The term of this Sublicense is concurrent with the term of your Planet
Beach Franchise Agreement unless earlier terminated as provided herein, provided, however, that the
term of this Sublicense shall not exceed the term of the Main License, and shall automatically
terminate upon the termination or expiration of the Main License. This Sublicense (and all of your
rights hereunder) automatically terminates if you fail to comply with its terms and conditions.
You agree that, upon such termination, in accordance with Planet Beach’s direction, you will either
destroy (or permanently erase) all copies of the Licensed Software and Documentation, or return the
original Licensed Software and Documentation to Planet Beach, together with any other material you
have received from Planet Beach or HARMS Software in connection with the Licensed Software.

     MAINTENANCE AND SUPPORT. During the term of this Sublicense, you will receive Level 1
technical support services from Planet Beach.

     You will receive Level 2 and above technical support services from Harms during Harms standard
support hours, as follows:

Monday thru Friday — 9:00 AM -8:00 PM EST

(Technical Support Phone Number — 1-973-402-8801)

Saturday — 9:00 AM-5:00 PM EST*

(Technical Support Phone Number — 1-973-402-8801)

 

			
	*	 	
Saturday support is available via dispatch to the appropriate technicians working
that day. Once you reach the technical support mailbox, leave your name, business
name,

 

 

	 	 	 	telephone number, and the nature of your call. A Harms technician will return your
call promptly.

Sunday — Emergency Support Only

After Standard Hours Emergency Support**

 

			
	**	 	 The telephone message center for the Technical Support Department will ask if this
is an emergency and then prompt the caller to use the paging option in which a Harms
technician will be dispatched to return your call. You will be required to leave
information including business name, contact, phone number, and a credit card
number. You will be charged a fee per 15 minute increment for each emergency call. 

	 
	 	(a)	 	Exclusions. Harms’ technical support does not include software
trainings, non-software related issues, provision of software upgrades, data recovery,
after hours emergency support, and data restoration. If Harms determines that you have
a problem with hardware such as a printer or computer, you may be required to contact
the appropriate manufacturer directly. Warranties for hardware are provided by the
hardware manufacturer, and not by Harms.
	 
	 	(b)	 	Data Backup. Certain locations may be susceptible to power outages
and/or fluctuations that can cause a computer to crash or shut down. You are strongly
recommended to install and maintain battery backups to keep computers from being
shutdown improperly. WARNING: Shutting down your computer while the Licensed Software
is in use may damage the databases and potentially cause a loss of data. Harms is not
responsible for any such losses of data, nor does Harms assume responsibility or
liability for any losses or damages arising, directly, or indirectly, from your
improper use or maintenance of the Software or your hardware. On occasion, data may be
damaged to the extent that intervention by a Harms programmer is necessary to recover
or fix the databases. These types of services are NOT included in this Sublicense and
the fees for such services are subject to the discretion of Harms and Planet Beach.

     LIMITED WARRANTY. Planet Beach warrants the media on which the Licensed Software is furnished
to be free from defects in materials and workmanship under normal use for 30 days from the date
that you obtain the Licensed Software. EXCEPT FOR THIS LIMITED WARRANTY, THE LICENSED SOFTWARE AND
THE DOCUMENTATION IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND EITHER EXPRESS, IMPLIED OR
STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

     REPRESENTATIONS AND WARRANTIES BY FRANCHISEE. As a condition to the grant of this License to
use the Licensed Software, Franchisee hereby represents, warrants and covenants as follows:

	 	(a)	 	That it will use the Licensed Software only in conformance with the terms and
conditions of this Sublicense Agreement;
	 
	 	(b)	 	That it will not rent, lease, sublicense, distribute, transfer or copy the
Licensed Software or any component(s) thereof except as explicitly authorized herein;

 

 

	 	(c)	 	That it will only use the Licensed Software for its own internal business use
in connection with the operation of its Planet Beach Facility and not for the benefit
of any other person or entity; and
	 
	 	(d)	 	That it will not adapt, modify or reverse engineer the Licensed Software in any
way, or use it or them to create source code or a derivative work.

     LIMITATION OF REMEDIES. Your exclusive remedy in connection with the Licensed Software and
the Documentation is that you are entitled to return any defective media containing the Licensed
Software together with the Documentation to Planet Beach. IN NO EVENT WILL Planet Beach OR HARMS
BE LIABLE FOR ANY INDIRECT DAMAGES OR OTHER RELIEF ARISING OUT OF YOUR USE OR INABILITY TO USE THE
LICENSED SOFTWARE INCLUDING, BY WAY OF ILLUSTRATION AND NOT LIMITATION, LOST PROFITS, LOST BUSINESS
OR LOST OPPORTUNITY, OR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING
LEGAL FEES, ARISING OUT OF SUCH USE OR INABILITY TO USE THE LICENSED SOFTWARE, EVEN IF Planet Beach
AND HARMS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY OTHER
PARTY.

     DISCLAIMER. EXCEPT AS MAY OTHERWISE BE EXPRESSLY PROVIDED IN THIS AGREEMENT, Planet Beach AND
HARMS DISCLAIM ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED,
ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE LICENSED SOFTWARE, OR ANY COMPONENT OF THE
FOREGOING, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY, CORRECTNESS,
COMPLETENESS, COMPREHENSIVENESS, SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF TRADE), OR ANY REPRESENTATION
THAT THE SOFTWARE WILL MEET FRANCHISEE’S REQUIREMENTS OR THAT FRANCHISEE’S USE THEREOF WILL BE
UNINTERRUPTED OR ERROR-FREE, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES.

     REMEDIES FOR THIRD PARTY INFRINGEMENT. In the event the Licensed Software or any portion
thereof is held by any court of competent jurisdiction to infringe the rights of a third party or
to violate a patent, and its use is enjoined, your sole remedy shall be to be provided with (i)
modified Licensed Software, the functionality of which has not been impaired in any material
respect and that is non-infringing or non-violative, or (ii) the right to continue to use the
infringing Licensed Software for any remaining unexpired portion of the License Term, or (iii)
equally suitable non-infringing software to replace the infringing Licensed Software.

     INDEMNIFICATION. Franchisee shall indemnify and hold Planet Beach and Harms harmless from and
against any and all losses, liabilities, obligations, damages, penalties, judgments, suits, costs,
expenses or disbursements of any kind (including, without limitation, attorneys’ fees and expenses)
against, or incurred by, Planet Beach or Harms to the extent such claims, damages, liabilities or
costs relate to, have arisen in connection with, or result directly or indirectly from the breach
by Franchisee of any term or condition of this License.

     CONFIDENTIALITY.

	 	(a)	 	Confidential Information. Franchisee acknowledges that it is the
policy of Planet Beach and Harms to maintain as confidential all information that
should reasonably be understood by Franchisee to be confidential or proprietary,
including, without limitation, information relating to the Licensed Software and the
Documentation, the business methods, marketing strategies, tools, systems, procedures,
products and services,

 

 

	 	 	 	customers, and potential customers of each of Planet Beach and Harms (the
“Confidential Information”), and Franchisee further acknowledges that such
Confidential Information is of great value to the respective party that disclosed
it. Confidential Information shall not include information that (i) is now or
subsequently becomes available to the public through no fault or breach of
Franchisee, (ii) Franchisee rightfully possessed prior to disclosure to it, (iii) is
independently developed or acquired by Franchisee without the use of any
Confidential Information of the party disclosing it, or (iv) is rightfully obtained
by Franchisee from a third party who has the right to disclose the information.
	 
	 	(b)	 	Nondisclosure of Confidential Information. Franchisee acknowledges
that it has acquired and will acquire Confidential Information as a result of and in
connection with the performance of its obligations under this Sublicense Agreement and
that it is reasonably necessary to protect the goodwill of each of Planet Beach and
Harms. Accordingly, it agrees not to directly or indirectly (except where authorized
herein), disclose or divulge any Confidential Information to any third parties, or to
use any Confidential Information for the furtherance of its own business or financial
interests or those of anyone else. Franchisee further agrees that it will not permit,
cause or authorize any third parties to divulge any Confidential Information that
Franchisee lawfully disclosed to such third party.
	 
	 	(c)	 	Compelled Disclosure. In the event any Confidential Information is
required to be disclosed by applicable law, subpoena or similar process or pursuant to
a request by a government or regulatory agency, then, to the extent legally permitted,
Franchisee shall, prior to any such disclosure, promptly notify Planet Beach and Harms,
of such request for disclosure in order to give the appropriate party the opportunity
to object to or seek to limit the scope of such disclosure. Notwithstanding any
provision herein to the contrary, Franchisee may disclose any Confidential Information
to any regulatory agency having jurisdiction over it without the prior written approval
of Planet Beach or Harms to such disclosure.
	 
	 	(d)	 	Remedies for Breach of Confidentiality Obligations. Any breach or
threatened breach by Franchisee of any confidentiality provision of this Sublicense
Agreement may, because of the unique nature of the Confidential Information, cause
irreparable harm to the party disclosing the Confidential Information and shall entitle
that party, in addition to any other legal remedies, to apply to any court of competent
jurisdiction to enjoin such breach or threatened breach.

	 	 	MISCELLANEOUS PROVISIONS

	 	(a)	 	Assignment. The rights and obligations under this Agreement may not be
assigned by either party and any attempted assignment in violation of this provision
shall be null and void and of no force or effect.
	 
	 	(b)	 	Notices. Any notice or other communication under this Agreement shall
be in writing and shall be deemed given if delivered (i) personally or mailed by
registered mail (return receipt requested) at the addresses set forth on the first page
hereof, or at such other address as shall be specified by notice given pursuant hereto,
(ii) by confirmed facsimile transmission, or (iii) by electronic mail for which a
delivery receipt has been generated.
	 
	 	(c)	 	Severability. The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the validity or enforceability of the
remaining terms or provisions hereof, which shall remain in full force and effect.

 

 

	 	(d)	 	No waiver. No failure or successive failures on the part of either
party to enforce any covenant or agreement contained herein, and no waiver or
successive waivers on its or their part of any condition of this Agreement shall
operate as a discharge of such covenant, agreement, or condition, or render the same
invalid, or impair the right of either party, its respective successors and permitted
assigns, to enforce the same in the event of any subsequent breach or breaches by the
other party, its successors or permitted assigns.
	 
	 	(e)	 	Governing Law. The parties agree that the laws of the United States
and the State of Louisiana (without giving effect to its conflicts of law principles)
govern all matters and actions arising out of or relating to this Agreement, including,
without limitation, its validity, interpretation, construction, performance, and
enforcement. The parties further agree to the personal jurisdiction by and venue in
the state and federal courts with jurisdiction in Jefferson Parish, Louisiana, and
waive any objection to such jurisdiction or venue. The prevailing party in any action
relating to this Agreement shall be entitled to payment of all costs, expenses, losses,
damages and reasonable attorneys’ fees incurred in defending or prosecuting any such
claim, suit or proceeding. The determination of the “prevailing party” for these
purposes shall be made by the court exercising jurisdiction over the matter.
	 
	 	(f)	 	Entire Agreement. This Sublicense Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof and
supersedes all previous agreements and understandings, whether oral or written, express
or implied, with respect to its subject matter. Except as may be expressly authorized
herein, this Agreement may not be altered, amended, or modified except by written
instrument signed by the duly authorized representatives of both parties.
	 
	 	(g)	 	The defined term “Franchisee” as used in this Sublicense includes Franchisee’s
officers, directors, managers, members, employees, agents, and representatives.

	 
	 	 	IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth
above.

	 	 	 	 	 	 	 	 
	FRANCHISEE(S):	 	PLANET BEACH FRANCHISING CORPORATION
	 
	 	 	 	 	 	 	 
	By: 

	 	 	 	By: 	 	 
	 

	 
	 	 	 
	 

	Name:	 	 	 	Name:	 
	 

	 	 
	 	 	 	 
	 

	Title:	 	 	 	Title:	CEO or COO of Planet Beach Franchising
	 

	 	 	 	 	 	 Corporation

 

 

EXHIBIT 6

TO

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

(for trained employees, shareholders, officers, directors,

general partners, members and managers of Franchisee)

          In consideration of my being a                                          of
                                          (the
“Franchisee”), and other good and valuable consideration, the receipt and sufficiency of which is
acknowledged, I hereby acknowledge and agree that:

     1.                                         , doing business as
                                         
 (the “Franchisee”), has acquired the right and franchise from Planet Beach Franchising Corporation (the “Company”) to
establish and operate a Planet Beach Spa (the “Spa” or “Franchised Business”) and the right to use
in the operation of such Spa, the Company’s trade names, service marks, trademarks, logos, emblems,
and indicia of origin (the “Proprietary Marks”) and the Company’s unique and distinctive format and
system relating to the establishment and operation of Planet Beach Spas (the “System’), as they may
be changed, improved and further developed from time to time in the Company’s sole discretion, only
at the following authorized and approved location (the “Approved Location”):

 

 

     2. The Company possesses certain proprietary and confidential information relating to the
operation of the System, which includes certain proprietary methods, techniques, formats,
specifications, systems, procedures, methods of business practices and management, sales and
promotional techniques and knowledge of, and experience in, the operation of the Franchised
Business (the “Confidential Information”).

     3. Any and all information, knowledge, know-how, and techniques that the Company specifically
designates as confidential shall be deemed to be Confidential Information for purposes of this
Agreement.

     4. As
                                         of the Franchisee, the Company and Franchisee will disclose the
Confidential Information to me in furnishing to me the training program and subsequent ongoing
training, the Company’s Operations Manual (the “Manual”) and other general assistance during the
term of this Agreement.

     5. I will not acquire any interest in the Confidential Information, other than the right to
utilize it in the operation of the Franchised Business during the term hereof, and the use of
duplication of the Confidential Information for any use outside the System would constitute an
unfair method of competition.

     6. The Confidential Information is proprietary, involves trade secrets of the Company, and is
disclosed to me solely on the condition that I agree that I shall hold in strict confidence all
Confidential Information and all other Information designated by the Company as confidential.
Unless the Company otherwise agrees in writing, I will disclose and/or use the Confidential
Information only in connection with my duties as
                                         of the Franchisee, and
will continue not to disclose any such information even after I cease to be in that position and
will not use any such information even after I cease to be in that position unless I can
demonstrate that such information has become generally known

 

 

or easily accessible other than by the breach of an obligation of Franchisee under the
Franchise Agreement.

     7. Except as otherwise approved in writing by the Company, I shall not, while in my position
with the Franchise and for a continuous uninterrupted period commencing upon the cessation or
termination of my position with Franchisee, regardless of the cause for termination, and continuing
for 2 years thereafter, either directly or indirectly, for myself, or through, on behalf of, or in
conjunction with any person, persons, partnership, or corporation, own, maintain, operate, engage
in, act as a consultant for, perform services for, or have any interest in any retail business
selling any product or products which are the same as, or substantially similar to, any of the
products or services offered by a Planet Beach location (except at a Planet Beach location), which
is or is intended to be, located within:

          7.1. the Franchisee’s Territory as defined in the Franchise Agreement;

          7.2. 10 miles of Franchisee’s Territory; or

          7.3. 10 miles of any Planet Beach location operating under the
System and the Proprietary Marks.

This restriction does not apply to my ownership of less than 5% beneficial interest in the
outstanding securities of any publicly-held corporation.

     8. I agree that each of the foregoing covenants shall be constructed as independent of any
other covenant or provision of this Agreement. If all or any portion of a covenant in this
Agreement is held unreasonable or unenforceable by a court or agency having valid jurisdiction in
an unappealed final decision to which the Company is a party, I expressly agree to be bound by any
lesser covenant subsumed within the terms of such covenant that imposes the maximum duty by law, as
if the resulting covenant were separately stated in and made part of this Agreement.

     9. I understand and acknowledge that the Company shall have the right, in its sole discretion
to reduce the scope of any covenant set forth in this Agreement, or any portion thereof, without my
consent, effective immediately upon receipt by me of written notice thereof; and I agree to comply
forthwith with any covenant as so modified.

     10. The Company is an intended beneficiary of this Agreement and may enforce it, solely and/or
jointly with the Franchisee. I am aware that my violation of this Agreement will cause the Company
and the Franchisee irreparable harm; therefore, I acknowledge and agree that the Franchisee and/or
the Company may apply for the issuance of an injunction preventing me from violating this
Agreement, and I agree to pay the Franchisee and the Company all the costs it/they incur(s),
including, without limitation, legal fees and expenses, if this Agreement is enforced against me.
Due to the importance of this Agreement to the Franchisee and the Company, any claim I have against
the Franchisee or the Company is a separate matter and does not entitle me to violate, or justify
any violation of this Agreement.

     11. This Agreement shall be construed under the laws of the State of Louisiana without regard
to its conflict of laws, LCC Arts. 3515 et seq., and any amendments and/or revisions thereto. The
only way this Agreement can be changed is in writing signed by both the Franchisee and me.

 

 

	 	 	 	 	 	 	 	 	 	 	 
	Signature: 
	 	 	 	 	 	Signature: 	 	 	 	 
	 

	 	 
	 	 
	 	 	 	 
	 	 
	
	Name:	 	 	 	 		Name: 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	

	Address:	 	 	 	 		Address:	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	

	Title:	 	 	 	 		Title:	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	

	Witness:	 	 	 	 		Witness:	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 

ACKNOWLEDGED BY FRANCHISEE

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	
	Name:	 	 	 
	 

	 	 

	 	 
	
	Title:	 	 	 
	 

	 	 

	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	
	Name:	 	 	 
	 

	 	 

	 	 
	
	Title:	 	 	 
	 

	 	 

	 	 

 

 

EXHIBIT 7

TO

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

CONDITIONAL ASSIGNMENT

OF FRANCHISEE’S TELEPHONE NUMBERS

1.                                         ,
 doing business at                                                                                                            
            
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
(“Assignor”), in exchange for valuable consideration provided by Planet Beach
Franchising Corporation (“Assignee”), receipt of which is hereby acknowledged, hereby conditionally
assigns to Assignee all telephone numbers and listings utilized by Assignor in the operation of its
Spa at Assignor’s above-referenced address. Those numbers are as follows:

2. The conditional agreement shall become effective automatically upon termination of Assignor’s
franchise. Upon the occurrence of that condition, Assignor shall do all things required by the
telephone company to assure the effectiveness of the assignment of telephone numbers as if the
Assignee had been originally issued such telephones, telephone numbers, telephone listings and the
usage thereof.

3. Assignor agrees to pay the telephone company on or before the effective date of assignment all
amounts owed for the use of the telephone number(s) including, without limitation, Yellow Pages
advertising. Assignor further agrees to indemnify Assignee for any sums Assignee must pay the
telephone company to effectuate this agreement, and agrees to fully cooperate with the telephone
company and Assignee in effectuating this assignment.

ASSIGNOR:

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 

	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 

	 	 

ASSIGNEE:

PLANET BEACH FRANCHISING CORPORATION

	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 

 

 

EXHIBIT 8

TO

PLANET BEACH FRANCHISING CORPORATION

SINGLE UNIT FRANCHISE AGREEMENT

STATEMENT OF PROSPECTIVE FRANCHISEE

     (Note: Dates and answers must be completed in the Prospective Franchisee’s own handwriting.)

1. The date of my first face-to-face meeting with a Planet Beach Franchise

Marketing Representative to discuss the possible purchase of a Franchise.

	 	 	 
	 

	 	                    , 20___.
	 

	 	Date
	 

	 	Franchisee’s Initials___

2. The date on which I received a Franchise Disclosure Document about

the Planet Beach Spa Franchise.

	 	 	 
	 

	 	                    , 20___.
	 

	 	Date
	 

	 	Franchisee’s Initials___

3. The date when I received a fully completed copy (other than signatures) of the

Franchise Agreement I later signed.

	 	 	 
	 

	 	                    , 20___.
	 

	 	Date
	 

	 	Franchisee’s Initials___

4. The earliest date on which I signed the Franchise Agreement or any other binding

document (not including the Receipt page).

	 	 	 
	 

	 	                    , 20___.
	 

	 	Date
	 

	 	Franchisee’s Initials___

5. The earliest date on which I delivered cash, check or other consideration to

the Franchise Marketing Representative, broker, Planet Beach Franchising

Corporation (“Franchisor”) or any other person or company.

	 	 	 
	 

	 	                    , 20___.
	 

	 	Date
	 

	 	Franchisee’s Initials___

 

 

Representations:

     No promises, agreements, contracts, commitments, understandings, “side-deals”, options,
rights-of-first-refusal or otherwise have been made to or with me with respect to any matter
(including but not limited to any representations or promises regarding advertising (television or
otherwise), marketing, site location, operational assistance or otherwise) nor have I relied in any
way on any such except as expressly set forth in the Franchise Agreement, written Option Agreement,
or written addendum signed by me and the President of Franchisor
except as follows:
_________________________________________________________________________________________________________________________________________________
_________________________________________________________________________________________________________________________

____________________.

(If none, the prospective franchisee shall write NONE in his/her own handwriting and initial same.)

Franchisee’s Initials                     

     No oral, written or visual claim or representation, promise, agreement, contract, commitment,
understanding or otherwise which contradicted, expanded upon or was inconsistent with the
Disclosure Document or the Franchise Agreement was made to me by any person or entity, except as
follows:_______________________________________________________________________________________________
_________________________________________________________________________________________________________________________________________________

____________________.

(If none, the prospective franchisee shall write NONE in his/her own handwriting and initial same.)

Franchisee’s Initials                     

     No oral, written or visual claim or representation (including but not limited to charts,
tables, spreadsheets or mathematical calculations) which stated or suggested any specific level or
range of actual or potential sales, costs, income, expenses, profits, cash flow, tax effects or
otherwise (or from which such items might be ascertained) was made to me by any person or entity,
except as follows:

_________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________

____________________.

(If none, the prospective franchisee shall write NONE in his/her own handwriting and initial same.)

Franchisee’s Initials                     

     No contingency, condition, prerequisite, prior requirement, proviso, reservation, impediment,
stipulation, provision or otherwise exists with respect to any matter (including but not limited to
obtaining financing, selection, purchase, lease or otherwise of a site, operational matters or
otherwise) and/or with respect to my fully performing all of my obligations under the Franchise
Agreement and/or any other documents to be executed by me nor have I relied in any way on any such,
except as expressly set forth in a writing signed by me and the CEO and COO of Franchisor, except
as follows:
 

 

              .

(If none, the prospective franchisee shall write NONE in his/her own handwriting and initial same.)

Franchisee’s Initials                     

			
	I hereby understand that there will be no refunds.
	 	Franchisee’s Initials                     

     Franchisor does not make or endorse nor does it allow any marketing representative, broker or
other individual to make or endorse any oral, written, visual or other claim or representation
(including

 
 

 

 

but not limited to charts, tables, spreadsheets or mathematical calculations) which stated or
suggested any specific level or range of actual or potential sales, costs, income, expenses,
profits, cash flow, tax effects or otherwise (or from which such items might be ascertained) with
respect to this or any other Franchise, whether made on behalf of or for Franchisor, any Franchisee
or other individual and expressly disclaims any such information, data or results.

     In addition, Franchisor does not permit any promises, agreements, contracts, commitments,
understandings, “side-deals”, options, rights-of-first-refusal or otherwise or variations of,
changes in or supplements to the Franchise Agreement or the existence of any contingencies or
conditions to Franchisee’s obligations except by means of a written Addendum signed by Franchisee
and Franchisor.

     If any such representations, “side-deals”, contingencies or otherwise have been made by you by
any person or otherwise exist, immediately inform the CEO of Franchisor.

     The prospective franchisee understands and agrees to all of the foregoing and certifies that
all of the above statements are true, correct and complete.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	FRANCHISEE	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

	 	 

     All of the above is true, correct and complete to the best of my knowledge, information and
belief.

     Franchise Marketing Representative

	 	 	 	 	 
	 	APPROVED:

PLANET BEACH FRANCHISING CORPORATION

 	 
	 	By:exv10w2

Exhibit 10.2

MULTI-UNIT OPTION AGREEMENT

     This Multi-Unit Option Agreement (“Agreement”) entered into this                       day of                     , 200                     , between Planet Beach Franchising Corporation, a Delaware corporation, with an
address at 5145 Taravella Road, Marrero, Louisiana 70072 (hereafter “Planet Beach”),
and                                           (hereafter “you”).

Background

A. Contemporaneous with the execution of this Agreement, you and Planet Beach have entered into a
Single Unit Franchise Agreement (the “First Franchise Agreement”) for the right to establish and
operate a single Planet Beach Spa (the “First Spa”) and paid the Initial Franchise Fee.

B. Planet Beach offers qualified franchisees the right and option to open and operate 2, 4 or 9
additional Planet Beach Spas (the “Additional Spas”) during the term of the option period (defined
below) and otherwise upon the terms and conditions of this Agreement.

C. You
wish to purchase an option to establish and operate ___ Additional Spas under the terms and
conditions set forth in this Agreement.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

Agreement

1.
Grant of Option. In consideration of your payment to Planet Beach of a $                     
 option fee (the “Option Fee”), which is due and payable upon your execution of this Agreement, Planet Beach grants
you the right and option to establish and operate ___ Additional Spas under the terms and conditions
of this Agreement. This Option Fee is deemed fully earned upon payment and is nonrefundable.

2. Eligibility. You must purchase this Option when you execute the First Franchise Agreement.

3. Option Period. You may not execute a lease for any Additional Spa prior to exercising your
option pursuant to paragraph 4 below. Your option to establish 2 additional Spas will expire three
years and one day from the date of the execution of this agreement. Your option to establish 4
additional Spas will expire four years and one day from the date of the execution of this
agreement. Your option to establish 9 additional Spas will expire five years and one day from the
date of execution of this agreement. You must have all of your Spas open and operating before the
expiration of the option period in which you purchased. If you fail to meet the option period
listed above you no longer have an option for those additional Spas for which you do not have
opened and operating, unless you request in writing an extension which will be approved at Planet
Beach’s sole discretion.

4. Exercise of Option. In order to exercise your option for each Additional Spa you must satisfy
 all of the following conditions, upon the exercise of each option:

     4.1. Execute a new franchise agreement (“Additional Franchise Agreement(s)”), in the form of
the then current Franchise Agreement, for each of your Additional Spas, each with its own Data
Sheet and Approved Location and Territory Addendum, but without the provision of a Grand Opening
Specialist, the Term of which will coincide with the balance of the remaining Term under the First
Franchise Agreement;

 

 

     4.2. You are not in default under this Agreement, or any other agreement with Planet Beach
and/or its affiliate, including any other franchise agreement or development agreement and have
fully and faithfully performed all of your material obligations under any such agreements
throughout their respective terms;

     4.3. Neither this Agreement, the First Franchise Agreement or any other agreement with you has
expired or been terminated by Planet Beach and/or its affiliate;

     4.4. You have timely paid any fees or other monies due Planet Beach as and when they become
due under the terms of the First Franchise Agreement or any other agreement with Planet Beach,
including interest or principal due under any note payable to Planet Beach;

     4.5. There has been no change in the effective control of you (by way of change in share
ownership, membership or partnership interest, or otherwise) without Planet Beach’s written
consent; and

     4.6. Your Designated Manager has successfully completed Planet Beach University On-line
certifications and has successfully completed Franchisee and Director School.

     4.7. Your Options may be applied only to opening a new Spa and may not be applied to already
existing locations.

5. Sale or Assignment. Your rights under this Agreement are personal and you may not sell,
transfer, or assign any right granted herein. Notwithstanding, if you are an individual or a
partnership, you have the right to assign your rights under this Agreement to a corporation or
limited liability company upon the same terms and conditions as provided in paragraph 21.6 of the
First Franchise Agreement. Planet Beach has the right to assign this Agreement in whole or in part
in its sole discretion.

6. Time is of the Essence. Time is of the essence with respect to any time fixed for performance
of any requirement set forth in this Agreement.

7. Acknowledgment. You acknowledge that this Agreement is not a franchise agreement and does not
confer upon you any rights to use the Planet Beach Proprietary Marks or the System.

8. Notices. All notices, requests and reports to be given under this Agreement are to be in
writing, and delivered by either hand; e-mail with a confirming receipt; overnight mail; or
certified mail, return receipt requested, prepaid, to the addresses set forth above (which may be
changed by written notice).

9. Governing Law. This Agreement shall be deemed to have been made in the State of Louisiana and
shall be construed according to the laws of Louisiana without regard to its conflict of laws, LCC
Arts. 3515 et seq., and any amendments and/or revisions thereto.

10. Mediation. At Planet Beach’s option, all claims or disputes between you and Planet Beach or
its affiliates arising out of, or in any way relating to, this Agreement, or any of the parties’
respective rights and obligations arising out of this agreement, shall be submitted first to
mediation, in the Parish of Jefferson, Louisiana, under the auspices of the National Franchise
Mediation Program (“NFMP”), in accordance with the NFMP’s Commercial Mediation Rules then in
effect. The parties shall each bear their own costs of mediation and shall share equally the
filing fee imposed by NFMP and the mediator’s fees. Planet Beach’s rights to mediation, as set
forth herein, may be specifically enforced by Planet Beach.

11. Arbitration. At Planet Beach’s option, all disputes and claims relating to this Agreement or
any

 

 

other agreement entered into between the parties, the rights and obligations of the parties, or any
other claims or causes of action relating to the making, interpretation, or performance of either
party under this Agreement, shall be settled by arbitration in Jefferson Parish, Louisiana in
accordance with the Federal Arbitration Act and the Commercial Arbitration Rules of the American
Arbitration Association (“AAA”). The right and duty of the parties to this Agreement to resolve
any disputes by arbitration shall be governed by the Federal Arbitration Act, as amended. Neither
party shall pursue class claims and/or consolidate the arbitration with any other proceeding to
which the franchisor is a party. Each party must bear its own costs of arbitration including the
fee for their respective arbitrator; provided, however, that the neutral or the single arbitrator’s
fee shall be shared equally by Planet Beach and you.

The arbitrator’s award shall include all fees, costs and attorneys’ fees for the prevailing party.
The arbitrators shall have no authority to amend or modify the terms of the Agreement. To the
extent permitted by applicable law, no issue of fact or law shall be given preclusive or collateral
estoppel effect in any arbitration, except to the extent such issue may have been determined in
another proceeding between the parties. Judgment upon the award of the arbitrator shall be
submitted for confirmation to the United States District for the Eastern District of Louisiana and,
if confirmed, may be subsequently entered in any court having competent jurisdiction. This
agreement to arbitrate shall survive any termination or expiration of this Agreement.

12. Third Party Beneficiaries. Planet Beach’s officers, directors, shareholders, agents, employees
and/or affiliates are express third party beneficiaries of this Agreement and the mediation and
arbitration provisions contained herein, each having authority to specifically enforce the right to
mediate and arbitrate claims asserted against such person(s) by you.

13. Injunctive Relief. Nothing contained in this Agreement herein shall prevent the parties from
applying to or obtaining from any court having jurisdiction, without bond, a writ of attachment,
temporary injunction, preliminary injunction and/or other emergency relief available to safeguard
and protect the parties’ interest prior to the filing of any legal proceeding or pending the trial
or handing down of a decision or award pursuant to any legal proceeding conducted hereunder.

14. Jurisdiction and Venue. With respect to any proceeding, the parties agree that any action at
law or in equity instituted against either party to this Agreement shall be commenced only in the
24th Judicial District for the Parish of Jefferson, Louisiana or the United States District Court
for the Eastern District of Louisiana at Planet Beach’s discretion.

15. Jury Trial Waiver. With respect to any proceeding, the parties hereby agree to waive trial by
jury in any action, proceeding or counterclaim, whether at law or equity, regardless of which party
brings suit. This waiver shall apply to any matter whatsoever between the parties hereto which
arises out of or is related in any way to this Agreement, the performance of either party, and/or
your purchase from Planet Beach of the franchise, option and/or any goods or services.

16. Waiver of Punitive Damages. You waive to the fullest extent permitted by law, any right to or
claim for any punitive, exemplary, incidental, indirect, special or consequential damages
(including, without limitation, lost profits) which you may have against Planet Beach, its
affiliates, successors or assigns, arising out of any cause whatsoever (whether such cause be based
in contract, negligence, strict liability, other tort or otherwise) and agree that in the event of
a dispute, recovery shall be limited to actual damages. If any other term of this Agreement is
found or determined to be unconscionable or unenforceable for any reason, the foregoing provisions
shall continue in full force and effect, including, without limitation, the waiver of any right to
claim any consequential damages.

17. Class Action Waiver. You hereby agree to waive any class action proceeding or counterclaim

 

 

against Planet Beach, its affiliates, successors or assigns, whether at law or equity, regardless
of which party brings suit. This waiver shall apply to any matter whatsoever between the parties
hereto which arises out of or is related in any way to this Agreement, the performance of either
party, and/or your purchase from Planet Beach, its affiliates, successors or assigns of the
franchise and/or any goods or services.

18. Attorneys’ Fees. If either party institutes any judicial or arbitration proceeding to enforce
any monetary or non-monetary obligation or interpret the terms of this Agreement and Planet Beach
prevails in the action or proceeding, you shall be liable to Planet Beach for all costs, including
reasonable attorneys’ fees, incurred in connection with such proceeding.

19. Nonwaiver. Planet Beach’s failure to insist upon strict compliance with any provision of this
Agreement shall not be a waiver of Planet Beach’s right to do so, any law, custom, usage or rule to
the contrary notwithstanding. Delay or omission by Planet Beach respecting any breach or default
shall not affect Planet Beach’s rights respecting any subsequent breaches or defaults. All rights
and remedies granted in this Agreement shall be cumulative. Planet Beach’s election to exercise
any remedy available by law or contract shall not be deemed a waiver or preclude exercise of any
other remedy.

20. Severability. The parties agree that if any provisions of this Agreement may be construed in
two ways, one of which would render the provision illegal or otherwise voidable or unenforceable
and the other which would render it valid and enforceable, such provision shall have the meaning,
which renders it valid and enforceable. The language of all provisions of this Agreement shall be
construed according to fair meaning and not strictly construed against either party. The
provisions of this Agreement are severable, and this Agreement shall be interpreted and enforced as
if all completely invalid or unenforceable provisions were not contained herein, and partially
valid and enforceable provisions shall be enforced to the extent that they are valid and
enforceable. If any material provision of this Agreement shall be stricken or declared invalid,
the parties agree to negotiate mutually acceptable substitute provisions. In the event that the
parties are unable to agree upon such provisions, Planet Beach reserves the right to terminate this
Agreement.

21. Construction of Language. Any term defined in the First Franchise Agreement which is not
defined in this Agreement will be ascribed the meaning given to it in the First Franchise
Agreement. The language of this Agreement will be construed according to its fair meaning, and not
strictly for or against either party. All words in this Agreement refer to whatever number or
gender the context requires. If more than one party or person is referred to as you, their
obligations and liabilities must be joint and several. Headings are for reference purposes and do
not control interpretation.

22. Successors. References to “Planet Beach” or “you” include the respective parties’ successors,
assigns or transferees, subject to the limitations of Paragraph 5 of this Agreement.

23. Additional Documentation. You must from time to time, subsequent to the date first set forth
above, at Planet Beach’s request and without further consideration, execute and deliver such other
documentation or agreement and take such other action as Planet Beach may reasonably require in
order to effectuate the transactions contemplated in this Agreement. In the event that you fail to
comply with the provisions of this Section, you hereby appoint Planet Beach as your
attorney-in-fact to execute any and all documents on your behalf, reasonably necessary to
effectuate the transactions contemplated herein.

24. No Right to Offset. You may not withhold all or any part of any payment to Planet Beach or any
of its affiliates on the grounds of the alleged nonperformance of Planet Beach or any of its
affiliates or as

 

 

an offset against any amount Planet Beach or any of its affiliates may owe or allegedly owe you
under this Agreement or any related agreements.

25. State Law Applies. If any provision of this Agreement, including but not limited to its
provisions for transfer, renewal, termination, notice of termination, or cure rights, is
inconsistent with any valid law or regulation of the state in which your Spa is located, then the
valid law or regulation of that state applicable to the franchised business will supersede any
provision of this Agreement that is less favorable to you.

26. Entire Agreement. This Agreement contains the entire agreement between the parties concerning
the purchase and operation of additional Spas; no promises, inducements or representations (other
than those in the Franchise Disclosure Document) not contained in this Agreement have been made,
nor shall any be of any force or effect, nor binding on the parties. Modifications of this
Agreement must be in writing and signed by both parties. Planet Beach reserves the right to change
Planet Beach’s policies, procedures, standards, specifications or manuals at Planet Beach’s
discretion. In the event of a conflict between this Agreement and any Additional Franchise
Agreement(s), the terms, conditions and intent of this Agreement shall control.

     IN WITNESS WHEREOF, AND INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES HERETO HAVE CAUSED
THIS AGREEMENT TO BE EXECUTED EFFECTIVE THE DATE FIRST SET FORTH ABOVE.

	 	 	 	 	 
	 	PLANET BEACH FRANCHISING CORPORATION

 	 
	 	By:  	 	 
	 	 	This Agreement is not fully executed until signed by the 	 
	 	 	CEO or COO of Planet Beach Franchising Corporation: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 

	 	FRANCHISEE:	 	 
	 
	 
	 	 	 	 
	 

Witness

	 	 

	 	 
	 
	 	 	 	 
	 

Witness

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