Lifetime Fitness 2007 Annual Report Download - page 24

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We could be subject to claims related to health or safety risks at our centers.
Use of our centers poses potential health or safety risks to members or guests through exertion and use of our
equipment, swimming pools, rock climbing walls, waterslides and other facilities and services. We cannot assure
you that claims will not be asserted against us for injury or death suffered by someone using our facilities or
services. In addition, the child center services we offer at our centers expose us to claims related to child care.
Lastly, because we construct our own centers, we also face liability in connection with the construction of these
centers.
We are subject to extensive government regulation, and changes in these regulations could have a negative effect
on our financial condition and results of operations.
Various federal and state laws and regulations govern our operations, including:
xgeneral rules and regulations of the Federal Trade Commission, state and local consumer protection agencies
and state statutes that prescribe certain forms and provisions of membership contracts and that govern the
advertising, sale and collection of our memberships;
xstate and local health regulations;
xfederal regulation of health and nutritional products; and,
xregulation of rehabilitation service providers.
Any changes in such laws could have a material adverse effect on our financial condition and results of operations.
We could be subject to claims related to our nutritional products.
The nutritional products industry is currently the source of proposed federal laws and regulations, as well as
numerous lawsuits. We advertise and offer for sale proprietary nutritional products within our centers and through
our Web site. We cannot assure you that there will be no claims against us regarding the ingredients in, manufacture
of or results of using our nutritional products. Furthermore, we cannot assure you that any rights we have under
indemnification provisions or insurance policies will be sufficient to cover any losses that might result from such
claims.
If it becomes necessary to protect or defend our intellectual property rights or if we infringe on the intellectual
property rights of others, we may become involved in costly litigation or be required to pay royalties or fees.
We may have disputes with third parties to enforce our intellectual property rights, protect our trademarks,
determine the validity and scope of the proprietary rights of others or defend ourselves from claims of infringement,
invalidity or unenforceability. Such disputes may require us to engage in litigation. We may incur substantial costs
and a diversion of resources as a result of such disputes and litigation, even if we win. In the event that we do not
win, we may have to enter into royalty or licensing agreements, we may be prevented from using the marks within
certain markets in connection with goods and services that are material to our business or we may be unable to
prevent a third party from using our marks. We cannot assure you that we would be able to reach an agreement on
reasonable terms, if at all. In particular, although we own an incontestable federal trademark registration for use of
the LIFE TIME FITNESS® mark in the field of health and fitness centers, we are aware of entities in certain
locations around the country that use LIFE TIME FITNESS or a similar mark in connection with goods and services
related to health and fitness. The rights of these entities in such marks may predate our rights. Accordingly, if we
open any centers in the areas in which these parties operate, we may be required to pay royalties or may be
prevented from using the mark in such areas.
Item 1B. Unresolved Staff Comments.
None.