What is the purpose of the Spousal Affiliate signing the Learningrx agreement?

y of the Trade Secrets; and,

WHEREAS, Franchisor and Franchisee have agreed in the Franchise Agreement on the importance to Franchisor and to Franchisee and other licensed users of the System of restricting the use, access and dissemination of the Trade Secrets; and,

WHEREAS, it may be necessary for the spouses or domestic partners of the owners of Franchisee ("Spousal Affiliates") to have access to and to use some or all of the Trade Secrets in the management and operation of Franchisee's LearningRx Business using the System; and,

WHEREAS, Franchisee has agreed to obtain from those Spousal Affiliates written agreements protecting the Trade Secrets and the System against unfair competition; and,

WHEREAS, Spousal Affiliate is by definition associated with Franchisee and will become privileged as to certain Confidential Information; and,

WHEREAS, Spousal Affiliate desires and needs to receive and use the Trade Secrets in the course of his or her relationship with one or more owners of Franchise; and,

WHEREAS, Spousal Affiliate acknowledges that receipt of and the right to use the Trade Secrets constitutes independent valuable consideration for the representations, promises and covenants made by Spousal Affiliate herein;

NOW THEREFORE, in consideration of the mutual covenant and obligations contained herein, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

CONFIDENTIALITY AGREEMENT

• 1. Franchisor and/or Franchisee may disclose to Spousal Affiliate some or all of the Trade Secrets relating to the System. All information and materials, including, without limitation, Operations Manuals, drawings, marketing techniques, specifications, techniques and compilations of data that Franchisor provides to Franchisee and/or Spousal Affiliate shall be deemed confidential Trade Secrets for the purposes of this Agreement.
• 1. Spousal Affiliate shall receive the Trade Secrets in confidence and shall, at all times, maintain them in confidence, and use them only in the course of his or her employment or association with a Franchisee and then only in connection with the development and/or operation by Franchisee of a LearningRx Business for so long as Franchisee is licensed by Franchisor to use the System.
• 1. Spousal Affiliate shall not at any time make copies of any documents or compilations containing some or all of the Trade Secrets without Franchisor's express written permission.
• 1. Spousal Affiliate shall not at any time disclose or permit the disclosure of the Trade Secrets except to other employees of Franchisee and only to the limited extent necessary to train or assist other employees of Franchisee in the development or operation of a LearningRx Business.
• 1. Spousal Affiliate shall surrender any material containing some or all of the Trade Secrets to Franchisee or Franchisor, upon request, or upon termination of employment by Franchisee,

or upon conclusion of the use for which such information or material may have been furnished to Spousal Affiliate.

• 1. Spousal Affiliate shall not at any time, directly or indirectly, do any act that would or would likely be injurious or prejudicial to the goodwill associated with the Licensed Marks, the Trade Secrets or the System.
• 1. All Operations Manuals are loaned by Franchisor to Franchisee for limited purposes only and remain the property of Franchisor and may not be reproduced, in whole or in part, without Franchisor's written consent.

COVENANTS NOT TO COMPETE

• 1. In order to protect the goodwill and unique qualities of the System and the confidentiality and value of the Trade Secrets, and in consideration for the disclosure to Spousal Affiliate of the Trade Secrets, Spousal Affiliate further agrees and covenants that Spousal Affiliate will not without the prior written consent of Franchisor:
• a. Have any direct or indirect interest as a disclosed or beneficial owner in a Competitive Business, except with Franchisor's approval;
• b. Perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a Competitive Business wherever operating except with Franchisor's approval;
• c. Employ, or seek to employ, any person who is at the time or was within the preceding 180 days employed by Franchisor, any of its affiliates or any of its franchisees, or otherwise directly or indirectly induce such person to leave that person's employment; or
• d. Divert or attempt to divert, directly or indirectly, any business, business opportunity or customer of the LearningRx Business to any competitor;
• e. Make any disparaging remarks, or otherwise take any action or do anything that could reasonably be anticipated to cause loss or damage to the business or business opportunities, affairs, reputation and goodwill of, or otherwise negatively reflect upon, Franchisor, the System or the Licensed Marks; and

The term "Competitive Business" as used in this Agreement will mean any business offering or granting franchises or licenses to others to provide: (i) learning enhancement courses, programs or products; (ii) brain training or cognitive training courses, programs or products; or (iii) math and reading training courses, programs, or products.

• 1. This Covenant Not to Compete shall apply:
• a. during the term of Spousal Affiliate's relationship, association with an owner of Franchisee or employment by Franchisee anywhere within the United States; and,

• b. for the two years following the termination of Spousal Affiliate's association with or employment by Franchisee:
  • i. within Franchisee's Territory or any area serviced by Franchisee;
  • ii. within counties adjacent to Franchisee's Territory or within a Territory then operated by or under development by Franchisor or another franchisee of Franchisor;
  • iii. within a fifty mile radius from the boundary of Franchisees Territory or from any other franchised or company-owned LearningRx Training Center, or
  • iv. on the Internet or on any other Multi-Area Marketing channels used by Franchisor.

The restrictions of this Section will not be applicable to the ownership of shares of a class of securities listed on a stock exchange or traded on the over-the-counter market that represent five percent (5%) or less of the number of shares of that class of securities issued and outstanding. Spousal Affiliate, Franchisee, and its officers, directors, shareholders, managers, members and partners expressly acknowledge that they possess skills and abilities of a general nature and have other opportunities for exploiting such skills. Consequently, enforcement of the covenants made in this Section will not deprive them of their personal goodwill or ability to earn a living.

MISCELLANEOUS

• 1. Franchisee shall make all commercially reasonable efforts to ensure that Spousal Affiliate acts as required by this Agreement.
• 1. Spousal Affiliates acknowledge and agree that Spousal Affiliates are signing this Agreement as a condition for receiving access to, and the ability to use, Franchisor's confidential information in the performance of Spousal Affiliates' duties and obligations as an owner, spouse, employee or contractor of Franchisee and that the execution of this Agreement will not be deemed to create an employment relationship between Franchisor and Spousal Affiliates and Franchisor.

Source: Item 23 — RECEIPT (FDD pages 54–209)