Is Card My Yard obligated to establish a Marketing Fund?

e's governing documents. Your Cooperative contributions will not be applied to satisfy any portion of your local advertising requirement under Section IX.A.

• C. MarketingFund. We may, at our option, establish a marketing program fund (the "MarketingFund" or "Fund"). If a Marketing Fund is established, you must make weekly contributions to the Fund in an amount equal to the greater of: (a) one-half of one percent (0.5%) of your Card My Yard business' Gross Sales or (b) $25 per month in the first 12 months of this Agreement; $40 per month in months 13 through 24 of this Agreement; and $65 per month in each 12-month period thereafter. In our sole discretion, we may increase the amount you must contribute to the Fund upon not less than thirty (30) days' written notice to you; provided, however, that you shall not be required to contribute more than two percent (2%) of the Card My Yard business' Gross Sales to the Fund, subject to the monthly minimums. Your required contributions to the Fund are in addition to amounts you are required to spend for local advertising under Section IX.A. Fund contributions will be due and payable at the same time and in the same manner that royalty fee payments are due and payable. We may, in our sole discretion, change the frequency of the Marketing Fund Contributions (e.g. change to monthly payments) upon written notice to you.
• (1) We will direct all programs financed by the Fund, with sole discretion over the creative concepts, materials and endorsements, and the geographic, market and media placement and allocation thereof. You agree that the Fund may be used to pay the costs of preparing and producing video, audio and written advertising

materials; administering national, regional and multiregional advertising programs, including, without limitation, purchasing direct mail and other media advertising and employing advertising, promotion and marketing agencies; the cost of developing and maintaining an internet website; developing and maintaining gift card, membership and other customer loyalty programs; and supporting public relations, market research and other advertising, promotion and marketing activities.

• (2) The Fund will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs, travel expenses and overhead as we may incur in activities related to the administration of the Fund and its programs, including, without limitation, conducting market research; preparing advertising, promotion and marketing materials; and collecting and accounting for contributions to the Fund. We may spend, on behalf of the Fund, in any fiscal year an amount greater or less than the aggregate contribution of all Card My Yard businesses to the Fund in that year, and the Fund may borrow from us or others to cover deficits or invest any surplus for future use. All interest earned on monies contributed to the Fund will be used to pay advertising costs before other assets of the Fund are expended. We will prepare an annual unaudited statement of monies collected and costs incurred by the Fund and furnish the statement to you upon written request. We have the right to cause the Fund to be incorporated or operated through a separate entity at such time as we deem appropriate, and such successor entity will have all of the rights and duties specified herein. Card My Yard businesses owned by us and our Affiliates may, but are not required to, contribute to the Fund on the same basis as a franchisee under the terms of a standard franchise agreement for a Card My Yard business.
• (3) You acknowledge that the Fund is intended to maximize recognition of the Marks and patronage of Card My Yard businesses.

Source: Item 23 — RECEIPTS (FDD pages 84–259)