10.02 System Marketing Fund.

• (a) In addition to all other amounts required to be paid hereunder, during the Term, Franchisor has established a System Marketing Fund (the "Marketing Fund"), and Franchisee must pay to Franchisor, or such other entity designated by Franchisor, three percent (3%) of Gross Sales per month (the "Marketing Contribution"), which amount shall be used by the Marketing Fund.

Payment of the Marketing Contribution shall be made no later than the 5th day of the month for Gross Sales from the prior month during the term of this Agreement, or on such schedule as Franchisor may establish in its discretion.

• (b) The Marketing Contribution will be expended for the benefit of Franchisor, Franchisee and all other franchisees, licensees or users of the System for brand development initiatives and programs intended to maximize general public recognition, acceptance, and use of the System as Franchisor deems necessary or appropriate, in its sole discretion, on a national, regional or local basis.

The expenditure of such funds for advertising is to be under the control of, and in the discretion of, Franchisor, at all times, or such other entities designated by Franchisor.

Franchisee understands and acknowledges that the Marketing Fund is intended to maximize and support general public recognition, brand identity, sales and patronage of Face Foundrié Facial Bars for the benefit of all Face Foundrié Facial Bars, and Franchisor undertakes no obligation to ensure that the Marketing Fund benefits each Face Foundrié Facial Bar in proportion to its respective Marketing Contributions.

Franchisor agrees that all Marketing Contributions may be used to meet any and all costs (including, without limitation, reasonable salaries and overhead incurred by Franchisor) of maintaining, administering, directing and preparing national, regional or local advertising materials, programs and public relations activities including, without limitation, the costs of preparing and conducting media marketing campaigns and System advertising, marketing and sales programs and campaigns; consumer research and marketing surveys designed to assist in maintaining high quality standards; public relations activities; trade show participation (including travel and expenses for Franchisor's staff); the development and operation of a national and regional accounts program; on-line directory listings; developing and maintaining Franchisor's Website and other internet marketing, as well as social media and other digital applications (and other successor technology platforms); sponsorship of organizations and events; purchasing promotional items and advertising materials; out-of-pocket expenses (including printing, postage, shipping, telephone and photocopying); Franchisor's allocable overhead and administrative costs (including compensation and expenses of employees relating to the Marketing Fund); and providing promotional and other marketing materials and services to the Face Foundrié Facial Bars operated under the System, and employing advertising agencies to assist therewith and providing promotional brochures, decals and other marketing materials.

• (c) The Marketing Fund shall be accounted for separately from Franchisor's other funds and shall not be used to defray any of Franchisor's general operating expenses, except for such reasonable salaries, administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration or direction of the Marketing Fund and its advertising programs.

The Marketing Fund will not be Franchisor's asset.

A financial statement of the operations of the Marketing Fund shall be prepared annually and shall be made available to Franchisee upon request.

Franchisor may spend in any fiscal year more or less than the aggregate contribution of all Face Foundrié Facial Bars to the Marketing Fund in that year, and the Marketing Fund may borrow from Franchisor or others to cover deficits or invest any surplus for future use.

Any lender loaning money to the Marketing Fund shall receive interest at a reasonable rate.

All interest earned on monies contributed to the Marketing Fund will be used to pay advertising costs before other assets of the Marketing Fund are expended.

Source: Item 22 — CONTRACTS (FDD pages 73–74)