What is the Apricot Lane franchisee's responsibility regarding the active promotion and operation of the e-commerce platform?

suant to a franchise agreement dated, (as amended, the | | "Franchise Agreement"). | | The Parties desire to amend the Franchise Agreement to authorize the Franchised Business | | to offer and sell fashion apparel, accessories and other authorized merchandise through the Internet | | in accordance with the terms and conditions of this Amendment. | | Any defined terms not otherwise defined herein shall have the meanings given them in the | | Franchise Agreement. | | Amendment to Franchise Agreement. | | New Section 11 L shall be added to the Franchise Agreement, as follows: |

"L. E-Commerce Platform.

Subject to the terms and conditions of this Subsection L, Franchisee has the right, using the Designated Mark (and other Marks authorized by Franchisor from time to time), to offer and sell through one or more third-party Internet websites or other electronic media authorized by Franchisor from time to time ("E-Commerce Platform") the merchandise to be sold at the Franchised Business in accordance with the terms of this Agreement. The E-Commerce Platform shall be deemed part of the Franchised Business and subject to all of the relevant terms and conditions under this Agreement. Franchisee acknowledges and agrees that e-commerce is rapidly evolving, with constant changes, and that Franchisor has the right from time to time to change the E-Commerce Platform (including substituting providers and using different technology) to maintain the competitiveness of Specialty Stores. Franchisor will give reasonable prior notice to Franchisee of any such changes, which in no event need to be more than 90 days. Franchisee agrees to discontinue use of any E-Commerce Platform that Franchisor no longer authorizes and will only use the then-current authorized E-Commerce Platform, notwithstanding that changes may result in costs and expenses to Franchisee. Franchisee shall execute and perform such agreements ("Provider's Contracts") with the provider of the

E-Commerce Platform ("Provider") as Franchisor requires from time to time (including requirements authorizing independent access to the E-Commerce Platform and Usage Data by Franchisor). Currently, Franchisor has designated "Shopify" as the sole and exclusive E-Commerce Platform, but, as noted above, Franchisor reserves the right to change the E-Commerce Platform in the future.

All revenue and income of any nature earned or derived in connection with the E-Commerce Platform shall be part of Gross Revenues under Section 12C and subject to all of the provisions under this Agreement (including royalty fees and advertising contributions), provided however, the Royalty and advertising contributions under Sections 12A and 11B, respectively, relating to Gross Revenues derived from the E-Commerce Platform shall be five and one-half percent (5.5%) and one percent (1%), respectively, notwithstanding anything to the contrary by which Franchisee is entitled to pay lesser percentage amounts due to operating multiple Apricot Lane stores or otherwise.

Franchisee agrees that Franchisor, for and on behalf of Franchisee, may at its option (but shall not be required to) enter into the Provider's Contracts for Franchisee's E-Commerce Platform and to be the administrator thereof and have complete and unrestricted access thereto. In connection with such Franchisor-arranged E-Commerce Platform: (i) Franchisee shall remit to Franchisor (or, at Franchisor's direction, remit directly to the Provider) all fees, costs, expenses and reimbursements required to be paid to the Provider; and (ii) Franchisee shall comply with all terms and conditions of the Provider's Contracts and all mandatory policies issued by Franchisor or Provider in connection therewith.

Franchisee shall procure and maintain in accordance with Section 10 such insurance policies in connection with the E-Commerce Platform as Franchisor may require from time to time and shall indemnify Franchisor, in accordance with Section 21C, for any liabilities, obligations and expenses incurred by Franchisor in connection with the E-Commerce Platform, including any liability, obligation or expense arising under the Provider Contracts.

Franchisee may use only such suppliers (which may include Franchisor or any of its Affiliates) as Franchisor may designate or approve from time to time for initial and ongoing design, management and maintenance services of the E-Commerce Platform.

Franchisee shall adhere to such development, design, marketing, sales and operations standards (including policies regarding quality, image and representative lines of merchandise, digital media advertising, minimal standards for terms and conditions, photography, reporting, packaging, merchandise returns and gift cards) as set forth in the Confidential Operations Manual from time to time.

Source: Item 23 — RECEIPTS (FDD pages 51–222)