Document:

Employment Agreement between the Registrant and Andrew Barnett

EXHIBIT 10.5

EMPLOYMENT AGREEMENT

BETWEEN DIVERSIFIED HEALTH & FITNESS, INC. 

AND ANDREW BARNETT

RESTATED AND AMENDED EMPLOYMENT AGREEMENT dated as of July 23, 2010, by and among Diversified Fitness, Inc., a Florida corporation (the "Company") and Andrew Barnett (the "Executive").

1.

Term of Employment.  Upon the terms and subject to the conditions set forth herein, the Company will employ Executive for the period beginning on the date hereof, and continuing for a period of five (5) years, subject to early termination under Section 8 hereof.  (The period during which Executive is employed hereunder is referred to herein as the “term of employment.”)

2.

Position; Duties.  

2.1

During the term of employment, Executive will:

(i)

Serve as Chief Executive Officer;

(ii)

Use his best efforts to promote the interests of the Company and devote his full business time and efforts to the Company’s business and affairs;

(iii)

Perform such duties as the Company’s CEO; and

(iv)

Comply with the Company’s reasonable standard policies and procedures applicable to its employees generally.

2.2

The Executive shall not be required to perform his duties outside of a thirty (30) mile radius of Fort Lauderdale, Florida, except for such services as may be required in connection with normal business travel, and except if the Company relocates its corporate headquarters.

3.

Base Compensation.  In consideration of the Executive’s performance of his services hereunder and the Executive’s observance of the other covenants set forth herein, the Company shall pay the Executive a base salary of $150,000  per annum, payable in accordance with the Company’s standard payroll policies.  Subsequent base salary adjustments will be subject to the review and approval of the Company’s Board of Directors; however, in such year the Company achieves EBITDA of no less than $4,000,000, Executive’s base may increase to up to $400,000 per annum. Executive has the option to receive stock instead of cash as compensation, or a combination of cash and stock, as mutually agreed to by the parties at a mutually agreed upon price per share, and subject to a bonus of not less than 50% of his base salary, at the behest of the compensation committee of the Board of Directors. Such bonus may be paid 50% in cash and 50% in stock, at the discretion of the Board.

4.

Incentive Compensation.  In addition to the foregoing base salary, the Executive shall be awarded a signing bonus in the amount of $100,000 which shall be payable upon the funding of at least $3,000,000 to the company. The Executive shall be eligible for an additional annual bonus, based on the performance of the Executive and the Company as recommended by the Compensation Committee of the Board of Directors, and approved or adjusted by the Company’s Board of Directors, in its sole discretion.  Such bonus shall be determined and paid within 90 days after the end of each anniversary of the date hereof.  Said bonus may take the form of cash, stock and/or stock options, as mutually agreed by the Executive and the Company.  In the event that the Executive’s employment with the Company is terminated for Cause (as defined herein) or is voluntarily terminated by the Executive prior to the date on which any bonus is to be paid, then such bonus shall be cancelled and the Executive shall not be entitled to any incentive compensation for such year.   In all other cases, the Executive’s bonus shall be prorated based on the number of days he was employed during the year for which the bonus is payable.

5.

Equity Awards.   

5.1

As of the date of this agreement the Executive has received options to purchase 1,500,000 Company shares. 1,200,000 of such options were cancelled in March of 2010. Executive currently has 300,000 fully vested options priced at .10 per share.

5.2

The Executive will be eligible to participate in any stock option plan or similar incentive plans that may be established by the Company from time to time, on the same terms and conditions applicable to other similarly-situated employees of the Company.

6.

Expense Reimbursement Policy.  Consistent with the Company's reasonable policies and procedures which may be in effect from time to time, the Company shall reimburse the Executive for all properly documented reasonable and necessary out-of-pocket expenses incurred by the Executive in connection with the performance of the Executive's duties hereunder. 

7.

Employment Benefits.   

7.1

Benefits.  During the term of employment, the Executive shall be entitled to participate in such employee benefits as are available from time to time to other similarly-situated employees of the Company in accordance with the then-current terms and conditions established by the Company for eligibility and employee contributions required for participation in such benefits opportunities. Such benefits shall include health insurance.  Directors and officers’ liability insurance will be provided by the Company, providing for coverage of at least $1,000,000 for so long as the Company is privately held and, at such time as the Company’s stock is publicly traded, in an amount reasonably equivalent to that provided by public companies of similar size in similar industries. Mr. Barnett may also be eligible, at the discretion of the Board, to receive a term life insurance policy of $1,000,000, the premiums of which shall be paid by the Company.

7.2

Car allowance. Executive shall be entitled to a car allowance in the amount of $500 per month. Such allowance shall be payable in accordance with the Company’s standard payroll policies.

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7.3

Laptop Computer. Executive shall be entitled to a Notebook computer paid by the company. The Notebook computer shall be the property of the Executive and all upgrades shall be provided by the company. If Executive purchases any hardware equipment all approved purchases shall be reimbursed from company.

7.3

Vacation.  Executive shall be entitled to annual paid time off in accordance with the Company’s reasonable standard policies and procedures, but not less than twenty (20) days per year, to be taken in such amounts and in such times as shall be mutually convenient for the Company and the Executive.

8.

Termination. The Executive’s employment with the Company may be terminated as follows:

8.1

Death or Permanent Disability. The Executive’s employment shall terminate automatically upon his death or a determination by a Company-appointed doctor that the Executive has suffered a permanent disability within the meaning of any disability insurance policy offered by the Company, or as otherwise reasonably determined by such doctor.

8.2

Termination without Cause.  Either party may terminate Executive’s employment upon ninety (90) days’ written notice to the other party; provided if the Company terminates the Executive pursuant to this Section 8.2, he shall be entitled to severance as set forth in Section 8.4.   

8.3

Termination for Cause.   The Company may terminate the Executive’s employment at any time, upon written notice to the Executive, for Cause.   As used herein, “Cause” means 

(a)

the material breach of any provision hereof by the Executive, which breach (if capable of being cured) remains uncured for thirty (30) days after the Executive’s receipt of written notice thereof (it being understood that a material breach of Section 9 hereof is not capable of being cured);

(b)

misappropriation by Executive of funds or property of the Company; or any fraud, dishonesty or willful misconduct in the performance of the Executive's duties and responsibilities hereunder;

(c)

Executive’s engaging or causing the Company to engage, in the course of his employment with the Company, in activities that are prohibited by federal, state or local laws, and which have a material adverse effect on the Company;

(d)

determination, by any regulatory body, that the Executive is not qualified or permitted to hold the position of vice president of corporate development of the Company; or

(e)

if the Company or the Executive shall commence a voluntary case or other proceeding, or an involuntary case or other proceeding shall be commenced, seeking 

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liquidation, reorganization or other relief with respect to the Company or the Executive under any bankruptcy, insolvency or similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or the Executive.

8.4

Severance.   

(a)

In the event that the Executive’s employment is terminated by the Company without Cause, then the Executive (or his estate or personal representative) shall be entitled to a severance payment equal to the greater of the total payments still due under this Employment Agreement or 12 months salary. [For example, if the Executive is terminated without Cause (or pursuant to his death or disability), he would  be entitled to his base salary in effect at the time of termination, times a period the number of years remaining on this contract, or the payments he would have otherwise received over the ensuing 12 months.]  The Company may elect to pay such severance in one lump-sum payment, or in equal installments over a period of twelve months following such termination.  In addition, all of the stock options granted to the Executive shall vest immediately upon termination and be deemed paid in full, and all stock to be issued pursuant to said stock options or otherwise shall immediately be issued to Executive (or his estate or personal representative) upon termination.  

(b)

In the event that the Executive’s employment is terminated (i) by the Executive voluntarily, or (ii) by the Company for Cause, then he shall not be entitled to any severance or any other payments from the Company for any period after termination.

9.

Covenants

9.1

Exclusive Employment.  While Executive is employed by the Company he shall not, without the prior written consent of the Company, engage, directly or indirectly, in any other trade, business or employment, or have any interest, direct or indirect, in any other business; provided, however, that he may continue to own or may hereafter acquire any securities of any class of any publicly-owned company not to exceed 5%.

9.2

Confidentiality.  Executive shall treat as confidential and keep secret the affairs of the Company and shall not except as may be required by law, at any time during the term of employment or thereafter, without the prior written consent of the Company, divulge, furnish or make known or accessible to, or use for the benefit of, anyone other than the Company and its subsidiaries and affiliates any information of a confidential nature relating in any way to the business of the Company or its subsidiaries or affiliates or their clients and obtained by him in the course of his employment hereunder.

9.3

Company Property.  All records, papers and documents kept or made by Executive relating to the business of the Company or its subsidiaries or affiliates or their clients shall be and remain the property of the Company.  

9.4

Inventions.  All articles invented by Executive, processes discovered by him, trademarks, designs, art work, and, in general, everything of value conceived or created by him pertaining to the business of the Company or any of its subsidiaries or affiliates during the term of 

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employment, and any and all rights of every nature relating thereto, shall immediately become the property of the Company, and Executive will assign, transfer and deliver to the Company all patents, copyrights, royalties, designs and any and all interests and rights relating thereto.

9.5

Non-Solicitation of Employees and Clients.   During the term of employment and for a period of two (2) years following the termination of Executive’s employment with the Company, Executive shall not:   (a) directly or indirectly solicit or attempt to solicit away from the Company any person who at the time of such solicitation or attempted solicitation (or at any time within 90 days prior to such solicitation or attempted solicitation) was an employee of the Company or otherwise provided services in connection with the Company, or otherwise interfere with the relationship between the Company and any of its employees or (b) directly or indirectly provide or offer to provide, any mortgage-related services for any client or prospective client of the Company, or to induce any such client to cease to engage the services of Company or to use the services of any person or entity that competes directly with the Company.  As used herein, “prospective client” means any person or entity with whom, within the one year period immediately preceding the end of the term of employment, the Company has offered any mortgage-related services.   

9.6

Non-Competition Agreement.  In addition, during the term of employment and for a period of one (1) years following the termination of Executive’s employment with the Company, Executive shall not accept any form of employment (including as an advisor, consultant or otherwise) or engagement as an independent contractor with a person or entity that is in competition with the Company in any geographic market in which the Company does business, in each case to the extent that the Company conducted or intents to conduct such business in such geographic market at the time the Executive’s  employment terminated.  Executive acknowledges that these provisions are reasonable and necessary to protect the Company’s legitimate business interests, and that these provisions do not prevent Executive from earning a living.  

9.7

If at the time of enforcement of any provision under the sections 9.5 and 9.6, a court shall hold that the duration, scope or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope or area.

9.8

Executive acknowledges that a remedy at law for any breach or attempted breach of Section 9 of this Agreement will be inadequate, and agrees that the Company shall be entitled to specific performance and injunctive and other equitable relief in the case of any such breach or attempted breach without the necessity of showing any actual damage or that money damages would not afford an adequate remedy and without the necessity of posting any bond or other security.

9.9

The terms and provisions of this Section 9 may be enforced by the successors and assigns of the Company.

10.

Indemnification.   The Company shall defend, hold harmless and indemnify Executive, to the fullest extent permitted by law, against any claims or liabilities incurred by Executive in the course of performing his duties hereunder and, subject to the terms hereof, shall be 

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solely responsible for and shall advance and indemnification any attorneys’ fees incurred by Executive relating to any such claims, to the extent that the Company’s Board of Directors determines that there is no reasonable likelihood that the Executive will be required to repay such advances and that such advance is permitted under the Sarbanes-Oxley Act of 2002.  The Company shall be entitled to control the defense of any such claim or action at the Company’s own cost, with counsel of the Company’s own choosing, the cost of which shall be paid for by the Company.  Upon notice from the Company to Executive of the Company’s election to assume the defense, the Company will not be liable to the Executive for any legal or other expenses subsequently incurred by the Executive in connection with the defense thereof.  The Executive may not compromise or settle any claim for which it has asserted or may assert its right to indemnification without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed.  The Company may not compromise or settle any claim for which the Company has elected to assume the defense without Executive’s prior written consent, unless such settlement contains an unconditional release of all claims against the Executive.  The indemnification provided for in this Section shall survive the termination of the Executive’s employment and the termination or expiration of this Agreement.  Notwithstanding the foregoing, the Executive shall not be entitled to indemnification hereunder:

(i)

with respect to remuneration paid to the Executive if it is determined by a final judgment or other final adjudication that the remuneration was in violation of law or is required by law to be returned to the Company; 

(ii)

on account of any suit in which judgment is rendered against Executive for an accounting of profits made from the purchase or sale by Executive of securities of the Company pursuant to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended or similar provisions of any federal, state or local law; 

(iii)

on account of Executive’s conduct that a final judgment or a final adjudication is determined to have been knowingly fraudulent, deliberately dishonest, willful misconduct, bad faith, in opposition to the best interests of the Company or produced an unlawful personal benefit; 

(iv)

with respect to a criminal proceeding if Executive knew or reasonably should have known that his conduct was illegal;

(v)

if a final judgment or final adjudication determines that indemnification under this Agreement is not lawful; 

(vi)

on account of any suit in which judgment is rendered against Executive for an accounting of profits made from the purchase or sale by Executive of securities of the Company pursuant to the provisions of Section 306(a) of the Sarbanes-Oxley Act of 2002.

11.

Notices.  All notices hereunder shall be in writing and delivered personally, or sent by courier service (with proof of delivery and charges prepaid) or by registered or certified mail (postage prepaid), as follows:

If to the Company: 1850 SE 17 St, #203, Ft Lauderdale, FL 33316, and

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If to the Executive: 1236 S Ocean Dr Fort Lauderdale, Florida 33316,

Or such other address as either party shall notify the other party.

12.

Counterparts.  This Agreement may be executed in counterparts (including by facsimile signature), each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

13.

Governing Law.  This Agreement shall be governed by the internal laws of the State of Florida.

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

Diversified Health & Fitness, Inc.

By:  /s/ Benjamin Gettler

Name: Benjamin Gettler

Title: President

EXECUTIVE:

/s/ Andrew Barnett

Name: Andrew Barnett

7Consulting Agreement between Registrant and Roger Wittenberns

EXHIBIT 10.6

CONSULTING AGREEMENT

BETWEEN DIVERSIFIED HEALTH & FITNESS, INC.

AND ROGER WITTENBERNS

CONSULTING AGREEMENT dated as of March 26, 2010 by and between DIVERSIFIED HEALTH & FITNESS, INC., a Florida corporation (the “Company”), and ROGER WITTENBERNS (“Consultant” or “RW”).

WHEREAS, the Consultant is a founder and former senior executive of the Company and has extensive experience in the health and fitness franchise industry; and

WHEREAS, the Consultant has decided to reduce his ownership and otherwise modify his role with the Company; and

WHEREAS, the Company wishes to engage the Consultant to provide services to the Company as a non-employee consultant, as described herein.

NOW, THEREFORE, the parties hereby agree as follows:

1.

Term of Engagement. Upon the terms and subject to the conditions set forth herein, the Company will engage Consultant as an independent contractor for the period beginning on the date hereof (the “Effective Date”) and continuing for a period of 4 years), unless terminated prior to such date pursuant to the terms of this Agreement or unless extended upon mutual consent of the parties. The period during which Consultant is engaged as an independent contractor hereunder is referred to as the “term of engagement”.

2.

Services.  During the term of engagement, the Consultant shall provide advice and consultation to the Company with respect to its day to day management of franchise support staff, franchise operations, franchise sales, lead generation, promotions, web site development, acquisition due diligence, and club marketing support consistent with his historical practices (e.g., the Consultant will be able to provide consultation via telephone and email, and via meetings at Consultant’s home office, consistent with prior practices). The Consultant will be limited to advising on subjects brought to his attention regarding day to day operations of the Company and the Company Group franchisees. Consultant shall not have a role or any responsibility with respect to any financial decisions, financial statements, investments or corporate development activities of the Company. Consultant specifically will have no involvement in the Company’s attempt to complete an initial public offering. Notwithstanding the foregoing, Consultant will make himself reasonably available to respond to questions from the Company’s shareholders, potential investors, underwriters or other advisors relating the Consultant ‘s role with the Company and his areas of knowledge or expertise, as long as the Company (Andrew Barnett, the current CFO or the current CEO) provides at least 2 business days. It is understood that a breach of this Section 2 will be considered a material breach hereof.

3.

Compensation. In consideration of the Consultant ‘s performance of his services hereunder and his observance of the other covenants set forth herein, during the term of engagement, the Company shall pay the Consultant a monthly base consulting fee equal to $10,000.00 per month, subject to adjustment as indicated in 3.1 to 3.3 below. Notwithstanding the forgoing, 

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Consultant agrees that monthly compensation for the first year from the date of this agreement shall be $4000.

3.1

In the event that in any month, the Company’s cash flow (excluding any one-time extraordinary items and any compensation paid to the CEO of the Company in excess of the compensation such individuals receive as of the date hereof) (“Cash Flow”) is less than $10,000.00, then a portion of the Consultant ‘s base consulting fee equal to such shortfall, will be deferred provided that in no event will Consultant’s consulting fee be less than $5,000.00 in any month after the first year of this agreement, and provided, further, that any deferred amounts shall be paid to the Consultant at such time as the Company has positive Cash Flow sufficient to make such payment.

3.2

In the event that in any month, the Company’s Cash Flow exceeds $10,000.00, then the Consultant shall receive the above-referenced base consulting fee of $10,000.00 plus additional consulting fees of ten percent (10%) of the Cash Flow in excess of $10,000.00. For example: if the Company’s Cash Flow is $20,000.00 in one month, Consultant’s total consulting fees will be $1 1,000 ,with respect to such month. Notwithstanding the foregoing, in no event will Consultant’s consulting fee be more than $20,000.00 in any month.

3.3

Consultant agrees that the payments in this section and all payments to shall be subordinated to the fully amortized payment of the Newbridge Loan and may be accrued in whole or in part in the event that Company is unable to meet its obligations there under when such Loan payments become due.

4.

Expense Reimbursement. Consistent with the Company’s policies and procedures, the Company/ shall reimburse Consultant for all properly documented reasonable and necessary out­ of-pocket expenses incurred by Consultant in connection with the performance of Consultant’s duties hereunder, no later than 30 days after the submission of Consultant’s request and documentation. Consultant agrees that any expense greater than $100 must be pre-approved by Company.

5.

Benefits. Consultant shall be entitled to the same or reasonably equivalent benefits that the Company provides to its senior employees, generally. Without limiting the foregoing, the Company will ensure that Consultant and his immediately family (which currently includes Patty McQuiggin and his two daughters for as long as the current health carrier considers them authorized for a family policy with RW) has health insurance, at the Company’s cost. In addition, the Consultant will be entitled to a Company email address and reasonable IT support, at the Company’s cost.

6.

Termination. Consultant may terminate the term of engagement at any time prior to the scheduled expiration thereof, upon written notice to the Company. Company may terminate the term of engagement at any time prior to the scheduled expiration thereof, upon written notice to Consultant, only upon the following events:

6.1

the material breach of any provision hereof by the Consultant, which breach remains uncured for fifteen (15) days after the Consultant’s receipt of written notice thereof.

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6.2

misappropriation by Consultant of funds or property of the Company; or any fraud, dishonesty or willful misconduct in the performance of the Consultant’s duties and responsibilities hereunder,

6.3

Consultant’s engaging or causing the Company to engage, in the course of his employment with the Company, in activities that are prohibited by federal, state or local laws,

6.4

any legal or administrative judgment, ruling or settlement that results in Consultant being unable to sell franchises, own or operate or otherwise provide services relating to health and fitness franchises, or otherwise legally prevents the Consultant from providing services to the Company or any of its affiliates,

6.5

felony conviction of the Consultant, or

6.6

if Company elects to terminate Consultant’s agreement and such termination occurs under this section 6.6, then at any time after the Company completes an initial public offering (raising net proceeds of at least $3,000,000), then the Consultant will be entitled to a severance payment equal to the total compensation that the Consultant received during the 12 months preceding such termination. The Company may elect to pay such termination payment in one lump-sum payment (within 30 days after termination), or in equal monthly installments over a period of six months following such termination. In the event that consultant elects to waive the severance package, Consultant ‘s non-compete period shall be reduced to one year.

Upon the termination of the term of engagement pursuant to this Section 6, the Consultant shall not be entitled to any further compensation hereunder other than the remaining obligations due under sections 3.1 , 3.2 and 3.3 of the Share Transfer Agreement, if any, and the terms of section 6.6 of this Agreement.

7.

Representations and Covenants of Consultant

7.1

Confidentiality. Consultant shall treat as confidential and keep secret the affairs of the Company and its affiliates and their franchises and shall not except as may be required by law, at any time during the term of engagement or thereafter, without the prior written consent of the Company, divulge, furnish or make known or accessible to, or use for the benefit of, anyone other than the Company and its affiliates and franchises any information of a confidential nature relating in any way to the business of the Company or its affiliates or their franchises. Notwithstanding the foregoing, it is understood that the Company will promptly update its web site, all other publicly available communications regarding the Company, discovery day presentation materials, and any documents which have been provided to potential investors (including any private placement memorandum currently in use by the Company), as necessary to identify that Consultant’s relationship with the Company is that of a consultant. In addition, it is understood that, Consultant shall be allowed to inform third parties or employees that he no longer owns a controlling interest in the Company to the extent legally required or as deemed necessary by counsel to the Company (but shall make no public announcement of such fact), which shall not be unreasonably withheld. 

7.2

Company Property. All records, papers and documents kept or made by Consultant relating to the business of the Company or its affiliates or their franchises shall be and remain the property of the Company, affiliates or franchises, as applicable. 

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7.3

Intellectual Property. All articles invented by Consultant, processes discovered by him, trademarks, designs, art work, and, in general, everything of value conceived or created by him pertaining to the specific business of the Company or any of its affiliates or any of their franchises during the term of engagement, and any and all rights of every nature relating thereto, shall be deemed a “work made for hire” within the meaning of the Copyright Act, 17 U.S.C. Section 101, and shall immediately become the property of the Company. In the event that any such intellectual property is not considered a “work made for hire” then Consultant will assign, transfer and deliver to the Company an patents, copyrights, royalties, designs and any and all interests and rights relating thereto.

7.4

Non-Solicitation. RW agrees that from the date hereof until three (3) years following the termination of all positions he holds with the Company (either as employee, consultant, officer and/or director), RW shall not, directly or indirectly:  (a) solicit or attempt to solicit away any person who, at the time of such solicitation or attempted solicitation (or at any time within one (1) year prior to such solicitation or attempted solicitation), was an employee of the Company, any of its subsidiaries or affiliates or any of their respective franchises (the “Company Group”) or any person who otherwise provided services in connection with the Company Group, or otherwise interfere with the relationship between any member of the Company Group and any of its employees or (b) solicit or encourage any of the franchisees, area developers, area representatives or licensees of any member of the Company Group to terminate any agreements between such person and any member of the Company Group, or (c) solicit or encourage any of the members of any of the franchises of any member of the Company Group to terminate their membership. Notwithstanding the foregoing, the three-year period referred to above shall be a /five-year period with respect to the following employees and franchisees: Felicia Sanders, Charles Cavuoto, Alex Valladares, and Robert Parrish.

7.5

Non-Competition. RW agrees that from the date hereof until 18 Months following the termination of all positions he holds with the Company (either as employee, consultant, officer and/or director), RW shall not directly or indirectly provide or offer to provide, any health and fitness-related services or franchising or work for any person or entity that competes directly with the Company in any state in which the Company Group does business. Notwithstanding the foregoing, the Company agrees that RW may own and operate an unlimited number of additional health and fitness facilities which are affiliated with members of the Company Group with full authority to use such Company Group franchise system trade names, provided that: (A) none of such facilities shall be located within 3 miles of an existing franchise affiliated with the Company Group, (B) none of such facilities shall be required to pay an initial franchise, (C) one such facility shall be entitled to use a Company Group franchise system trade name free of charge for a period of up to I 0 years with 2 five year renewal options (D) any additional facilities will be required to pay a license fee equal to one percent (1.0%) of revenue for as long as they are open and operating and for a period of up to 1 0 years with 2 five year renewal options,. and (E) in the event of a sale or transfer of any such facility (or a sale or transfer of a majority of the ownership interest in such facility), the buyer will be required to pay a transfer fee of $1 ,000.00 and, effective upon such sale, enter into a standard franchise agreement relating to the applicable franchise system, including the standard royalty terms (except such facility shall be entitled to pay a reduced royalty equal to the greater of 3.0% of revenue or $395 per month). RW may also advise one (1) club that is not a member of the Company Group and that is majority-owned by a member of his immediately family.

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7.6

Notwithstanding the foregoing, other than the rights to use Company Group trade names, the restrictive covenant set forth in the first sentence of Section 8.2 shall immediately terminate and be of no further force or effect under the following circumstances:

(i)

if the Company breaches its obligations under this Agreement (and there is no Cash Flow Shortage at the time of such breach), and such breach is not cured within 25 days after the Company receives notice thereof (describing such breach in detail and making specific reference to this Section 7.6); or

(ii)

if the Company breaches its obligations under this Agreement (and there is a Cash Flow Shortage at the time of such breach), and such breach is not cured within 120 days after the Company receives notice thereof (describing such breach in detail and making specific reference to this Section 7.6).

As used in this Section 7.6, a “Cash Flow Shortage” means the Company has accumulated cash from all affiliates of less than $150,000 for a period of one month provable by the ledger/monthly average figure on all Company and affiliate bank statements.

7.7

If at the time of enforcement of any provision under Sections 7.4 or 7.5, a court shall hold that the duration , scope or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope or area.

7.8

Consultant shall not use any of the Company’s leads, marketing materials or intellectual property in any manner, other than for the benefit of the Company. It is understood that the Company’s “intellectual property” does not include information commonly known in the health and fitness industry (except to the extent that such common knowledge results from Consultant’s breach of any confidentiality obligation to the Company).

7.9

Consultant acknowledges that a remedy at law for any breach or attempted breach of Section 7 of this Agreement MAY be inadequate, and agrees that the Company s MAY be entitled to specific performance and injunctive and other equitable relief in the case of any such breach or attempted breach without the necessity of showing any actual damage or that money damages would not afford an adequate remedy and without the necessity of posting any bond or other security.

7.10

The terms and provisions of this Section 7 may be enforced by the successors and assigns of the Company.

8.

Independent Contractor Status. It is the parties’ intention that Consultant shall not be considered an “employee” of the Company for any purpose and shall act as an independent contractor and shall discharge all obligations imposed by any federal, state or local law, ordinance, regulation or order now or hereafter in force and shall pay all assessments, taxes, contributions and other payments required of independent contractors. Consultant shall indemnify the Company against and hold it harmless from any loss or liability resulting from any failure on his part to comply with the provisions of this Section 7.

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9.

Indemnification. To the fullest extent permitted by applicable law, the Company shall indemnify, defend and hold harmless the Consultant against and from any and all expenses (including attorneys’ fees and expenses), judgments, fines and amounts paid in settlement or otherwise actually and reasonably incurred by Consultant in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, which is threatened, brought or completed by any third party or any governmental entity, which results from the fact that Consultant is or was a consultant hereunder.

9.1

Upon receipt by Consultant of notice of any claim for which the Consultant intends to seek indemnification hereunder (a “Claim”), or upon such party’s discovery of facts which might give rise to indemnification hereunder, the Consultant shall give prompt written notice to the Company, which notice shall describe in reasonable detail the anticipated payments in connection with such Claim (if ascertainable) and the specific circumstances thereof (the “Claim Notice”). The Consultant may amend the Claim Notice, without prejudice to his rights hereunder, if he becomes aware of facts indicating that the anticipated Payments have increased or decreased from those estimated in the previous Claim Notice. A failure to provide or amend the Claim Notice shall not relieve the Company from any obligations or liabilities that the Company ma y have to the Consultant hereunder, except to the extent that the Company has been materially and adversely prejudiced as a result of such failure.

9.2

The Company will assume the TIMELY defense of any Claim (with counsel having expertise in the subject matter of the Claim). Notwithstanding the foregoing, if RW reasonably concludes that the Company is neglecting the defense of the Claim or the Company’s counsel lacks expertise or is not acting in the best interests of the Company and RW then, upon RW’s written request, the Company will nominate three other attorneys (having expertise to RW’s satisfaction in the subject matter of the Claim), and RW will be permitted to select one of such attorneys to defend the Claim and, thereafter, the costs of such attorney will be borne equally by RW and the Company. 9.3 The Company shall have no obligation to indemnify Consultant under this Section 9 for any amounts paid in a settlement of any action, suit or proceeding effected without the Company’s prior written consent, which consent shall not be unreasonably withheld. The Company shall not settle any claim in any manner that would impose any obligation on Consultant without Consultant’s prior written consent, which consent shall not be unreasonably withheld.

9.3

All expenses and costs, including attorneys’ fees, incurred by Consultant in defending any Claim which is subject to indemnification hereunder shall be paid by the Company in advance of Consultant’s timely obligations to make any payment.

10.

Insurance. The Company shall at all times, at the Company’s cost, maintain directors’ and officers’ liability insurance containing commercially reasonable terms and coverages, provided that at all times such insurance shall cover Consultant’s role as consultant.

11.

Notices. All notices hereunder shall be in writing and delivered personally, or sent by courier service (with proof of delivery and charges prepaid) or by registered or certified mail (postage prepaid), as follows:

If to the Company:

Diversified Health & Fitness, Inc.

1850 SE 17th Street

Suite 203

Fort Lauderdale, Florida 33316

6

If to Consultant: 

Roger Wittenberns

10 Harborage Island

Fort Lauderdale, Florida 33316

Or such other address as either party shall notify the other party.

12.

Counterparts. This Agreement may be executed in counterparts (including by facsimile signature), each of which shall be deemed an original , but all of which taken together shall constitute one and the same instrument.

13.

Governing Law; Venue. This Agreement shall be governed by the internal laws of the State of Florida. Any suit, action or proceeding arising out of or relating to this Agreement shall be commenced and maintained in any court of competent jurisdiction in Broward County, Florida and each party waives all objections to such jurisdiction and venue.

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

DIVERSIFIED HEALTH & FITNESS, INC.

CONSULTANT

By:  /s/ Benjamin R. Gettler

/s/ Roger Wittenberns

Name: Benjamin

Roger Wittenberns

Title:  President

7

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