What specific security procedures must a Learningrx franchisee adhere to for maintaining the confidentiality of proprietary information?

y signage and décor bearing the Marks and identifying the Premises as a Center, and signage indicating that the Business is independently owned and operated as a franchised Business. Franchisor has the right to approve all signage and décor at the Center. All signage and décor must remain current with the System's standards as Franchisor may modify periodically.

7. OPERATIONS MANUAL AND CONFIDENTIAL INFORMATION

• 7.1 Confidential Information. The System, the Operations Manual, and other Confidential Information are proprietary, involve trade secrets of Franchisor, and are disclosed to Franchisee solely on the express condition that Franchisee agrees, and Franchisee does hereby agree to:
• (a) fully and strictly adhere to all security procedures prescribed by Franchisor, in its sole discretion, for maintaining the proprietary information as confidential;
• (b) disclose such information to its employees only to the extent necessary to market products and services and for the operation of the Business in accordance with this Agreement;
• (c) not use any such information in any other business or in any manner not specifically authorized or approved in writing by Franchisor; and
• (d) exercise the highest degree of diligence and make every effort to maintain the absolute confidentiality of all such information during and after the term of this Agreement, and follow Franchisor's security procedures, which include the execution of approved nondisclosure agreements, and intranet, extranet and Internet usage agreements when developed by Franchisor, by Franchisee and any employee or agent who is allowed access.
• 7.2 Standards and Authorized Use. Franchisee must maintain strict compliance with the minimal standards set forth in the Operations Manual and as subsequently amended and revised in Franchisor's sole discretion, including completing a background check for each of its employees, as more fully set forth in the Operations Manual. Franchisee's failure to satisfy Franchisor's minimal standards at any time shall entitle Franchisor to require Franchisee and Franchisee's employees to attend and complete, at Franchisee's sole cost and expense, such additional training as Franchisor deems necessary, in Franchisor's sole discretion, in order to enable Franchisee to once again satisfy Franchisor's minimal

standards. Franchisee's failure or refusal to attend and complete such additional training and/or required conferences shall be deemed a default of this Agreement and shall entitle Franchisor to exercise one or more of the remedies set forth in Section 13 of this Agreement, including imposing fines or other penalties as more fully set forth in the Operations Manual.

• 7.3 Unauthorized Use. Franchisee must not copy or otherwise reproduce any Confidential Information and must establish procedures to prevent unauthorized use by any other person. Unauthorized use of the Operations Manual or the System will constitute a breach of this Agreement and an infringement of our proprietary rights, including trade secrets and copyrights. You must promptly report any unauthorized use of the Operations Manual or other Confidential Information.
• 7.4 Operations Manual. Franchisor will grant access to Franchisee during the term of the franchise the Franchisor's confidential Electronic Operating Operations Manual via an access codeprotected company intranet or extranet, or through other media. Franchisor reserves the right to require Franchisee to use the Operations Manual in only an electronic format. The Operations Manual will at all times remain the property of Franchisor, and Franchisee's access will be immediately terminated upon expiration, termination, or Transfer of this Agreement. Franchisee may be required to pay any costs incurred the Franchisor in terminating Franchisee's access at that time. Franchisor may periodically update and revise the Operations Manual. Franchisee acknowledges that its entire knowledge of the operation of the Business (other than information which is not Confidential Information) is and shall be derived from information disclosed to Franchisee by Franchisor and that certain of such information is proprietary, confidential and a Trade Secret of Franchisor. Franchisee shall maintain the absolute confidentiality of all such Trade Secrets during and after the term of this Agreement and shall not use any such information in any other business or in any manner not specifically authorized or approved in writing by Franchisor. Franchisee is bound by the standards for maintaining the privacy of the Operations Manual in the same manner as all other Confidential Information set forth above.

7.5 Confidentiality and Covenant Not to Compete Agreements.

• (a) If the Franchisee is an entity, then the following individuals must sign Franchisor's standard Confidentiality & Covenant Not to Compete Agreement (Attachment IX) before performing any work at the Business or otherwise having access to Franchisor's Confidential Information: each Member, shareholder, officer, director and partner of the entity, each spouse of such Member, shareholder, officer, director and partner, every manager of the Franchisee or Area Developer, each Guarantor of the Franchisee, the spouse of each Guarantor, and each employee having access to the Franchisor's confidential information.
• (b) If the Franchisee is not an entity, then the following individuals must sign Franchisor's standard Confidentiality & Covenant Not to Compete Agreement (Attachment IX) before performing any work at the Business or otherwise having access to Franchisor's Confidential Information: the spouse of the Franchisee, every manager of the Franchisee, each Guarantor of the Franchisee, the spouse of each Guarantor, and each employee having access to the Franchisor's confidential information. A copy of all such signed agreements shall be delivered to Franchisor within 1 week of their execution.
• 7.6 Ownership of Business Records.

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