ars |

ITEM 12 TERRITORY

Your Bumper Business will be located within a designated geographic area ("the Designated Area") as described in Exhibit D of the Franchise Agreement. We determine the Designated Area by the specific geographic and market factors affecting the Designated Area and by our overall plan for development of the Designated Area. These factors may include: the number of Major Dealerships, number of local and regional dealerships and the size and demographics of the local population. You do not have the right to use alternative channels of distribution (as further described below) in connection with offering bumper repair services and related products of the Bumper Man system unless otherwise approved by us.

We will not, during the term of your Franchise Agreement, operate or grant others the right to operate a Bumper Man repair services business in the Designated Area. Subject to certain rights reserved to us (as described below), only you will be authorized to market and perform Bumper Man bumper repair services in the Designated Area. If the demographics substantially change within your Designated Area, and we determine that the Designated Area may no longer be adequately serviced in accordance with our standards for customer service by a single Bumper Man franchisee, we: (i) may reduce the size of the Designated Area, so long as your Designated Area contains a minimum of

35 Major Dealerships; or (ii) offer the opportunity for you to retain the services of a certified technician that satisfies our then-current criteria for certified technicians and is approved by us in writing within 30 days of our notice of intent to modify the Designated Area. If we offer you the opportunity to retain the services of a certified technician, then within 60 days following our approval of your certified technician, you and the certified technician will execute our then-current form of certified technician addendum and the certified technician will pay the certified technician fee and complete Initial Training. Your Franchise Agreement does not give you any options, rights of first refusal or similar rights to acquire additional franchises. You are permitted only to operate one Bumper Business according to the terms of a single Franchise Agreement, although you may request our consent to transfer your Franchise Agreement subject to satisfying the conditions for consent to transfer and acquire the right to operate a Bumper Business in a new Designated Area (subject to availability).

You will not relocate your Bumper Business. With our prior written consent, you may transfer the Bumper Business to another Person and enter into our then-current Franchise Agreement for a new Designated Area, subject to your compliance with the terms and conditions for transfer set forth in the Franchise Agreement and the Manual.

We will not, except as provided below, and as long as you are in full compliance with the Franchise Agreement, establish and operate or license or authorize any other party to establish or operate a Bumper Business within the Designated Area for the term of the Franchise Agreement.

Source: Item 12 — TERRITORY (FDD pages 27–29)