What is the significance of the Rider in the Basecamp Fitness Development Agreement regarding the Development Territory?

ION | 5 | | 6. | RIGHTS AND DUTIES OF PARTIES UPON TERMINATION OR EXPIRATION | 6 | | 7. | TRANSFER | 6 | | 8. | ACKNOWLEDGMENTS | 8 | | 9. | MISCELLANEOUS | 9 | | RI | DER | 10 |

BASECAMP FITNESS AREA DEVELOPMENT AGREEMENT

This Area Development Agreement is made as of the Effective Date set forth in the Rider attached to this Agreement (the "Rider") between BASECAMP FITNESS FRANCHISOR LLC, a Delaware limited liability company ("we" or "us"), and the Developer named in the Rider ("you").

RECITALS:

• A. We and our predecessors have developed certain policies, procedures and techniques for the operation of boutique interval training fitness studios under the "Basecamp" and "Basecamp Fitness" service marks and related trademarks and service marks, that offer short, high intensity guided workouts combining strength, cardio and core training in a fast-paced, high-energy environment. In addition to the "Basecamp" and "Basecamp Fitness" marks, we may in the future adopt, use and license additional or substitute trademarks, service marks, logos and commercial symbols in connection with the operation of Basecamp Fitness studios (collectively, the "Marks"). We grant franchises to qualified candidates for the operation of Basecamp Fitness studios. These studios use our policies, methods, procedures, standards, specifications and the Marks, all of which we may improve, further develop or otherwise modify from time to time (all of which are collectively referred to as the "System").
• B. You acknowledge that the Basecamp Fitness concept is a relatively new concept that continues to evolve. As such, the methods of operation for a Basecamp Fitness studio continue to be created and refined. These businesses and the System will evolve over time, and such evolution will likely result in changes to the System, some of which may require additional investment by you.
• C. You acknowledge that you have had an adequate opportunity to be thoroughly advised of the provisions of this Agreement and the form of Franchise Agreement we currently use to grant rights to operate studios, have had sufficient time and opportunity to evaluate and investigate the System and the procedures and financial requirements associated with the System, as well as the competitive market in which it operates, and have sufficient knowledge and experience in the type of business offered hereunder and are capable of evaluating the merits and risks of the franchise investment.
• D. You are entering into this Agreement because you want to develop and operate multiple Basecamp Fitness studios that use the Marks and the System. You recognize that while you will have certain limited rights to transfer your interest in this Agreement, and in the studios you develop, we are entering into this Agreement with you based on your representation that you intend to personally develop all of the studios described in this Agreement, and not with a view to reselling your right to open these studios.

In consideration of the foregoing and the mutual covenants and consideration below, you and we agree as follows:

• 1. Grant of Development Rights. The following provisions control with respect to the rights granted hereunder:
• A. We grant to you, under the terms and conditions of this Agreement, the right to develop and operate the number of fitness studios identified in the Rider (the "Basecamp Studios"), using the Marks, operating within the nonexclusive area described in the Rider (the "Development Territory").
• B. You agree to be bound by the "Development Schedule" in the Rider. Time is of the essence for the development and operation of each Basecamp Studio in accordance with the Development Schedule.

Each Basecamp Studio must be developed and operated by you pursuant to a separate Franchise Agreement that you enter into with us.

• C.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 51–55)