For what purpose will Focalpoint Coaching hold all Advertising and Development Fund contributions?

sor has established an Advertising and Development Fund (the "Fund") for the advertising, marketing, and public relations programs and materials Franchisor deems appropriate. Franchisee agrees to contribute to the Fund the amounts that Franchisor requires as set forth in Subsection 3.I above.

Franchisor has the right to collect for deposit into the Fund any advertising, marketing, or similar allowances paid to Franchisor by suppliers who deal with FocalPoint Franchised Businesses and with whom Franchisor has agreed that Franchisor will so deposit these allowances. (These payments are different from those which are not designated by suppliers to be used exclusively for advertising or similar purposes and which Franchisor and Franchisor's affiliates therefore may use for any purposes Franchisor and they deem appropriate, as provided in Subsection 8.B above.)

Franchisor may designate a separate entity as Franchisor deems appropriate in its sole discretion to operate and administer the Fund. Any such entity will have all of the rights and

duties as specified in this Section. Franchisor will direct all programs that the Fund finances, with sole control over the creative concepts, materials, and endorsements used and their geographic, market, and media placement and allocation. The Fund may pay for preparing and producing video, audio, and written materials and electronic media; developing, implementing, and maintaining an electronic commerce Website and/or related strategies; administering regional and multi regional marketing and advertising programs, including, without limitation, purchasing trade journal, direct mail, and other media advertising and using advertising, promotion, and marketing agencies and other advisors to provide assistance; and supporting public relations, market research, and other advertising, promotion, and marketing activities.

The Fund periodically may give Franchisee samples of advertising, marketing, and promotional formats and materials at no cost. Franchisor will sell Franchisee multiple copies of these materials at Franchisor's direct cost of producing them, plus any related shipping, handling, and storage charges.

Franchisor will account for the Fund separately from Franchisor's other funds and not use the Fund for any of Franchisor's general operating expenses. However, Franchisor may use the Fund to pay the reasonable salaries and benefits of personnel who manage and administer the Fund, the Fund's other administrative costs, travel expenses of personnel while they are on Fund business, meeting costs, overhead relating to Fund business, and other expenses that Franchisor incurs in activities reasonably related to administering or directing the Fund and its programs, including, without limitation, conducting market research, public relations, preparing advertising, promotion, and marketing materials, and collecting and accounting for Fund contributions.

The Fund will not be Franchisor's asset. Although the Fund is not a trust, Franchisor will hold all Fund contributions for the benefit of the contributors and use contributions only for the purposes described in this Subsection 9.A. Franchisor does not owe any fiduciary obligation to Franchisee for administering the Fund or any other reason. The Fund may spend in any fiscal year more or less than the total Fund contributions in that year, borrow from Franchisor or others (paying reasonable interest) to cover deficits, pay back outstanding principal amounts borrowed in prior years from Franchisor or third parties, or invest any surplus for future use. Franchisor will use all interest earned on Fund contributions to pay costs before using the Fund's other assets.

Source: Item 22 — Contracts (FDD pages 56–57)