What are the limitations on the Kidokinetics territory granted (Item 12) and how do these limitations relate to the franchisee's obligations to operate within a designated area (Item 11)?

[Item 12: TERRITORY]

ITEM 12. TERRITORY

You and we will agree on your territory before you sign the Franchise Agreement. You will not receive an exclusive territory ("Territory"). You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. Except as described below, we will not establish or franchise others to establish another Kidokinetics Business within your designated Territory during the term of the Franchise Agreement. Your Territory for each Kidokinetics Business will contain a minimum population of approximately 250,000 persons. You may offer the Kidokinetics® sports fitness programs to all schools, parks, community centers, summer camps, hotels, gyms, health centers and similar establishments located within your Territory.

The Kidokinetics Business is a mobile business that provides sports fitness programs to children at schools, parks, community centers, summer camps, hotels, gyms, health centers and similar establishments within a designated territory. You may choose to have a home-based office for your Kidokinetics Business, located within your Territory. If you wish to rent commercial office space, such space must also be located within your Territory, and you must request our acceptance. In our experience and that of

our franchisees, the majority of these establishments do not charge any fee for the right to provide Kidokinetics services on their premises. However, an establishment may require you to pay an access or rental fee to provide services on its premises. An establishment could charge a flat fee per month in which you hold an event on its premises. Alternatively, an establishment may require you to pay a percentage of your event revenue. We estimate an approximate average of 5% of your annual revenue. These estimates take into consideration that establishments may charge or negotiate varying amounts at their discretion, and others will not impose any fee or revenue share. Because these establishments are independent third parties, you and they will arrange for these and other terms, and we do not have any control over or involvement with potential charges set by any establishment.

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

need not provide other assistance or services to you during the term of your Franchise Agreement except for the Enhanced Business Coaching and Training Services for your first Kidokinetic Business (and any additional Kidokinetics Business if you purchase additional, optional Enhanced Business Coaching and Training Services.)

Advertising and Promotion

Initial Marketing

To market your first Kidokinetics Business in your territory, you will pay us $5,000 for an Initial Marketing Package. The Initial Marketing Package for your first territory includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. For each additional Franchise you open, you will pay $1,000 for an Initial Marketing Package that includes direct mail marketing to institutional clients within the additional territory for your Kidokinetics Business.

Local Marketing Requirement

After you open your Kidokinetics Business, you are required to spend the greater of $500 or 2% of Gross Sales per month on a rolling 12-month average on local advertising and marketing to promote your Kidokinetics Business ("Local Marketing Requirement"). The Local Marketing Requirement applies once for a single franchisee operating up to four Kidokinetics Businesses so long as they are operated by the same legal entity and have adjacent territories.

You must order sales and marketing material from us or our designated suppliers. It is a material breach of

[Item 22: CONTRACTS]

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, commitments and understandings contained herein, the parties hereby agree as follows:

AGREEMENT

1. GRANT OF FRANCHISE. Franchisor hereby grants to Franchisee and Franchisee accepts, upon the terms and conditions herein contained, the license to operate a Kidokinetics franchise (the "Kidokinetics Business" or the "Franchised Business"), using only the Marks licensed hereunder, in strict conformity with the System, which may be changed, improved and further developed by Franchisor from time to time. This grant applies only to the territory which will be selected by Franchisee and approved by Franchisor, which is more particularly described in Section 2 herein and in Attachment "B" (the "Territory"). Franchisee understands and acknowledges that present or future franchisees of Franchisor may operate under different forms of franchise agreements and consequently that Franchisor's obligations and rights with respect to its various franchisees may differ materially in certain circumstances.

KidokineTics

2. TERRITORY

• 2.1. Territory.

This Agreement grants Franchisee the right to operate the Kidokinetics Business from a single location within a Territory ("Kidokinetics Business Location") described and/or mapped in Attachment "B" to this Agreement and incorporated into this Agreement.

Except as otherwise provided for in this Agreement, as long as Franchisee is in compliance with the terms and conditions hereof, Franchisor agrees it will not operate, nor permit any other franchisee to operate, a Kidokinetics Business within the Territory using the same Marks.

Franchisee acknowledges that other franchisees may operate their Kidokinetics Businesses from home offices located within the Territory, however, such Franchisee shall not be granted the right to operate within the Territory.

Franchisee may not operate outside the Territory without express written authorization from Franchisor.

• 2.2.

Reservation of Rights.

[Item 22: CONTRACTS]

Franchisee may not operate outside the Territory without express written authorization from Franchisor.

• 2.2.

Reservation of Rights.

Franchisee acknowledges and agrees that Franchisor and any parties Franchisor designates will have the right to: (i) establish and operate, and license third parties the right to establish and operate, other franchised businesses using the Marks and System at any location outside of the Territory; (ii) acquire, merge with, engage in joint ventures with, or otherwise affiliate with, and thereafter own and operate and franchise others the right to own and operate, any business of any kind, including businesses that offer products that are similar to those provided by a Franchised Business, within or outside the Territory; (iii) open and operate, or license third parties the right to open or operate, businesses that offer products and services similar to the Franchised Business under marks other than the Marks at any location; (iv) sell and distribute, directly or indirectly, or license others to sell and distribute, directly or indirectly, any products, services or merchandise, from any location or to any purchaser, through any channel or method of distribution (including, but not limited to, virtual classes, sales made by or through telemarketing, and/or on the Internet); (v) provide the services or sell products authorized for Kidokinetics Businesses to customers whose principal residence (or principal business office, if the customer is a business entity) is within Franchisee's Territory if contact with the customer is initiated by the customer and not Franchisor; (vi) to use and license the use of technology to non-franchisee locations inside and outside the Territory; and (vii) engage in any other activities not expressly prohibited under this Agreement.

Franchisee acknowledges and agrees that this Agreement does not grant it any right to (a) offer any product or service via e-commerce without prior approval by Franchisor, (b) establish an independent website or to establish a URL incorporating the Marks or any variation thereof, or (c) distribute, market, or implement Franchisor's products and services in any channel of distribution not specifically identified in this Agreement.

Franchisee may not sell products through other channels of distribution such as wholesale, Internet or mail order sales.

Franchisor is not required to pay Franchisor if Franchisor exercises any of its rights within the Territory.