Under what circumstances will a Camp Margaritaville franchisee be required to reimburse Margaritaville, and what additional fee will be applied?

on, may provide such requested training at Franchisee's expense. Any specific training, guidance or assistance that Franchisor provides does not create an obligation (whether by course of dealing or otherwise) to continue providing that specific training, guidance or assistance, all of which Franchisor may periodically modify.

• (f) Training Fees. Franchisee must pay Franchisor's then-current fees for any onsite or offsite training that the Resort's personnel attend, including, but not limited to, the Training Program. Franchisee shall also be responsible for all costs associated with Resort personnel related to the Training Program or other training as required pursuant to this Section 3.01, including without limitation, wages, salaries, housing, travel-related expenses and per diem charges incurred by the trainees, subject to a mutually agreed budget. Except as otherwise specified herein, if the training is conducted onsite at the Resort, then Franchisee must cover the costs of lodging and living expenses for all persons conducting such training, including, but not limited to Franchisor personnel.

Section 3.02 System Standards Manual. Franchisor shall provide Franchisee access to the electronic media and/or written materials reflecting the then-current System Standards (the "Manual") during the Term. Franchisee must comply with the terms of the Manual and any Supplements to the Manual (defined below), as Franchisor periodically modifies it. The Manual and any Supplements to the Manual may include electronic media and/or written materials and Franchisee agrees to monitor and access any updates to the Manual, System Standards, or other aspects of the Camp Margaritaville System. Subject to Section 4.19, Franchisor may make additions to, deletions from, and modifications to the Manual and the System Standards ("Supplements") from time to time and in any form or fashion, including:

(a) altering the products, accounting and computer systems, forms, policies, and procedures of the Camp Margaritaville System;

• (b) adding, modifying, or substituting the equipment, signs, trade dress, and other Resort characteristics that Franchisee is required to use or display (subject to the limitations set forth in this Agreement);
• (c) implementing new programs and policies, which may require Franchisee to incur additional expenses, purchase new equipment or supplies, or pay additional reasonable fees; and
• (d) changing, improving or modifying the Camp Margaritaville Intellectual Property.

Franchisor will communicate all Supplements in writing or electronically to Franchisee, as Franchisor deems appropriate. Franchisee must, as soon as commercially reasonable, adopt and use any Supplements to the Manual, provided that Franchisor shall enforce such Supplements on a basis consistent with other Camp Margaritaville Resorts of similar size and amenities as the Resort. All Supplements to the Manual are binding on Franchisee as if they were part of the Manual previously provided to Franchisee. All references in this Agreement or otherwise to the Manual will include any and all Supplements to the Manual. Subject to Section 4.19, Franchisee acknowledges that changes in the System Standards or Manual may obligate Franchisee to invest additional capital in the Resort and/or incur higher operating costs. Franchisee agrees that Franchisor owns all proprietary rights in and to the System Standards and the Manual. The Manual will at all times remain Franchisor's property. Franchisee agrees to restrict (and ensure its Key Personnel restrict) access to the Manual in accordance with Franchisor's policies, as Franchisor periodically modifies them. If there is a dispute between the Parties over a version of the content of the Manual, Franchisor's master version of the Manual controls. Franchisee agrees that the Manual's contents and any passwords or other digital identifications necessary to access the Manual constitute Confidential Information.

Section 3.03 Other Arrangements and Delegation. Franchisor may arrange with its Affiliates or other third parties to provide development, marketing, operations, administration, technical, and support functions, facilities, services, and/or personnel related to the Camp Margaritaville System. Franchisor and its Affiliates also may use any functions, facilities, programs, services, and/or personnel used in connection with the Camp Margaritaville System in Franchisor's and its Affiliates' other business activities, even if these other business activities compete with the Resort or the Camp Margaritaville System. Franchisee agrees that Franchisor has the right, in its sole discretion, to delegate the performance of any portion or all of its obligations under this Agreement to third-party designees, whether these designees are its Affiliates, agents, or independent contractors with whom Franchisor contracts to perform these obligations. If Franchisor does so, the third-party designees will be obligated to perform the delegated functions for Franchisee in compliance with this Agreement. However, unless Franchisor notifies Franchisee in writing of its delegation of any such obligations or its transfer of this Agreement pursuant to Section 12.01, Franchisee agrees that it shall look only to Franchisor and not to any other person or entity (including an Affiliate of Franchisor) for the performance of such obligations, as only Franchisor (and not any of Franchisor's Affiliates or any other person or entity) has undertaken such obligation.

ARTICLE IV. OPERATION OF THE RESORT

Section 4.01 Operating Guide. The operating guide for the Resort shall be approved in advance by Franchisor in writing before the Opening Date. Franchisor may provide Franchisee a sample resort operating guide to provide the Franchisee with a better understanding of the System Standards. Any material updates to the operating guide shall be approved by Franchisor in writing.

Section 4.02 Meetings. Franchisee shall meet, in person or by telephone, with Franchisor: (i) prior to the Opening Date, on a monthly basis; and (ii) thereafter, on a quarterly basis, or more or less frequently as

reasonably requested by Franchisor in order to discuss the ongoing operation and management of the Resort. Such meetings shall be in addition to any audits conducted pursuant to Section 4.16 of this Agreement.

Section 4.03 Management of the Resort.

• (a) Management Company. Subject to Franchisor's approval, the Resort shall be managed directly by Franchisee or by a management company (a "Management Company"). Franchisor may refuse to approve a proposed Management Company or refuse to approve Franchisee's management of the Resort. If Franchisor refuses to approve Franchisee to manage the Resort, then Franchisee must engage a Management Company approved by Franchisor. Franchisee or the Management Company shall at all times retain and exercise direct management control over all aspects of the Resort's business and be the employer of the Resort's personnel. Franchisee shall not enter into any lease, management agreement, or other similar arrangement with a Management Company for the management or other oversight of all or a part of the Resort's operation without Franchisor's prior written approval. Franchisee shall approve an arrangement that meets Franchisor's minimum qualifications and ensures that its personnel attend and complete required brand standard training programs. Franchisor requires, as a condition of its acceptance, that each Management Company sign an agreement in favor of Franchisor acknowledging, among other things, that the Management Company does not have an ownership interest in Franchisee and that the Management Company will be bound by the restrictive covenants in this Agreement, including without limitation, covenants governing Franchisor's Confidential Information and non-competition covenants ("Management Rider"). Notwithstanding the foregoing, Franchisee acknowledges and agrees that compliance with the terms and obligations of this Agreement shall be Franchisee's responsibility even though Franchisee may retain a Management Company. If Franchisee changes the Management Company it is using to manage the Resort during the Term of this Agreement, then Franchisee shall pay a transition fee to Franchisor in connection with the engagement of such new Management Company in order to offset some of the costs Franchisor incurs in evaluating the new Management Company.. The fee is currently $5,000 but Franchisor reserves the right to increase such fee to account for an increase in Franchisor's costs of evaluating any such Management Company.
• (b) General Manager. During the Term, Franchisee (or the Management Company) shall, using commercially reasonable judgment, appoint one or more Persons to exercise primary responsibility for management of the Resort (or any component thereof, including without limitation the Food and Beverage Service) and oversee the operation and maintenance of the Resort (each, a "General Manager").

Source: Item 23 — RECEIPTS (FDD pages 72–406)