Who owns the rights to the System and Confidential Information for Extreme Art Studio?

[Item 22: CONTRACTS]

6. CONFIDENTIAL INFORMATION.

• 6.1 CONFIDENTIAL INFORMATION DEFINED. We and our affiliates possess (and may continue to develop and acquire) certain confidential information, some of which constitutes trade secrets under applicable law ("Confidential Information"), relating to developing and operating Extreme Art Studio Businesses, whether or not marked confidential, including (without limitation):
  • 6.1.1 training and operations materials and manuals, including the Franchise Operations Manual;
  • 6.1.2 the System Standards, and other methods, formats, specifications, standards, systems, procedures, techniques, sales and marketing techniques, knowledge, and experience used

in developing, promoting and operating Extreme Art Studio Businesses, including the proprietary teaching techniques used by teachers of Extreme Art Studio Businesses;

• 6.1.3 market research and promotional, marketing, and advertising strategies, materials and programs for Extreme Art Studio Businesses;
  • 6.1.4 strategic plans, including expansion strategies and targeted demographics;
• 6.1.5 knowledge of, specifications for, suppliers of, and methods of ordering Operating Assets and other products and supplies;
• 6.1.6 any computer software or similar technology which is proprietary to us, our affiliates, or the System, including, without limitation, the Computer System, digital passwords and identifications, and any source code of, and data, reports, and other printed materials generated by, the software or similar technology;
  • 6.1.7 the System Website (defined in Section 9.5 below);
• 6.1.8 knowledge of the operating results and financial performance of Extreme Art Studio Businesses other than the Franchised Business;
• 6.1.9 information generated by, or used or developed in, the Franchised Business's operation, including customer information, buying habits, preferences, demographic information and related information, and any other information contained from time to time in the Computer System or otherwise in the System;
  • 6.1.10 all or part of the Marks; and
  • 6.1.11 any other information designated as confidential or proprietary by us.

[Item 22: CONTRACTS]

9.5 SYSTEM WEBSITE.

• 9.5.1 We have established a website to advertise, market and promote Extreme Art Studio Businesses; the art activities camps, parties, events, products and services that they offer and sell; and/or an Extreme Art Studio Franchise opportunity ("System Website"). We may, but are not obligated to, provide you with a webpage on the System Website that references the Franchised Business. If we provide you with a webpage on the System Website, you must: (i) provide us the information and materials we request to develop, update and modify your webpage, including information on your Studio(s); (ii) notify us whenever any information on your webpage is not accurate; and (iii) if we give you the right to modify your webpage, notify us whenever you change the content of your webpage. We reserve the right to include a charge as part of the technology fee for our maintenance of your webpage. We will own all intellectual property and other rights in the System Website, including your webpage and all information it contains (including, without limitation, the domain name or URL for your webpage, the log of "hits" by visitors, and any personal or business data that visitors supply).
• 9.5.2 We will maintain the System Website, and may use the Brand Fund's assets to develop, maintain and update the System Website. We periodically may update and modify the System Website (including your webpage). You must promptly notify us whenever any

information on your listing changes or is not accurate. You acknowledge that we have final approval rights over all information on the System Website (including your webpage). We may implement and periodically modify System Standards relating to the System Website.

• 9.5.3 Even if we provide you a webpage on our System Website, we will only maintain such webpage while you are in full compliance with this Franchise Agreement and all System Standards we implement (including, without limitation, those relating to the System Website).

If you are in default of any obligation under this Franchise Agreement or the System, then we may, in addition to our other remedies, temporarily remove your webpage from the System Website until you fully cure the default.

[Item 22: CONTRACTS]

"System" means our system for the establishment, development, operation, and management of an Extreme Art Studio Business, including Know-how, proprietary programs and products, Manual, and operating system.

• **2.

Background**.

You are a manager or officer of Franchisee.

As a result of this relationship, you may gain knowledge of our System.

You understand that protecting the Intellectual Property and our System are vital to our success and that of our franchisees and that you could seriously jeopardize our entire System if you were to unfairly compete with us.

In order to avoid such damage, you agree to comply with the terms of this Agreement.

Know-How and Intellectual Property.

You agree: (i) you will not use the Know-how in any business or capacity other than the Extreme Art business operated by Franchisee; (ii) you will maintain the confidentiality of the Know-how at all times; (iii) you will not make unauthorized copies of documents containing any Know-how; (iv) you will take such reasonable steps as we may ask of you from time to time to prevent unauthorized use or disclosure of the Know-how; and (v) you will stop using the Know-how immediately if you are no longer a manager or officer of Franchisee's Extreme Art Studio Business.

You further agree that you will not use all or part of the Intellectual Property or all or part of the System for any purpose other than the performance of your duties for Franchisee and within the scope of your employment or other engagement with Franchisee.

These restrictions on Know-how, Intellectual Property and the System shall not apply to any information which is information publicly known or becomes lawfully known in the public domain other than through a breach of this Agreement or is required or compelled by law to be disclosed, provided that you will give reasonable notice to us to allow us to seek protective or other court orders.

• **4.

Unfair Competition During Relationship**.

You agree not to unfairly compete with us at any time while you are a manager or officer of Franchisee's Extreme Art business by engaging in any Prohibited Activities.

Unfair Competition After Relationship.

Source: Item 22 — CONTRACTS (FDD page 49)