Does the Azal Coffee franchise agreement include restrictions on competition related to the development of new confidential or proprietary information?

| Parties." | | WHEREAS, Franchisee is a party to that certain Franchise Agreement dated, 20 | | ("Franchise Agreement") by and between Franchisee and the Company; |

WHEREAS, the Company is the Franchisor of Azal Coffee Stores and has the authority to disclose and discuss all information relating to the operations of an Azal Coffee Store;

WHEREAS, Confidential Information and Trade Secrets, which are more particularly described below, will be disclosed to the Franchisee Parties in relation to Franchisee's operation of its Azal Coffee Store franchise; and

WHEREAS, the Franchisee Parties understand the necessity of not disclosing any such information to any other party or using such information to compete against the Company, any affiliate(s) or other franchisee(s) of the Company, or in any business (i) that is a Competing Business (as defined below) or (ii) in which Trade Secrets and other Confidential Information (as defined below) could be used to the disadvantage of Franchisee, or the Company, any affiliate(s) of the Company, or the Company's other franchisees.

NOW, THEREFORE, in order to induce the Company to transmit the aforesaid information to the Franchisee Parties, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows:

1) Franchise System

• a) The Company franchises a system for operation of a coffee café that specializes in Yemeni-grown coffee and that sells coffee based beverages, cold drinks, teas, coffee beans, coffee accessories, pastries, baked goods, and other related items, all of which are proprietary and are identified by the public with Azal Coffee products; prescribed exterior and interior design, decor, seating, fixtures, and furnishings; standards and specifications for products and supplies; service standards; uniform standards, specifications, and procedures for operations; training and assistance; and advertising and promotional programs (collectively "Systems"); all of which may be changed, improved, and further developed by the Company.
• b) A business operated under the Systems, the Company's trademarks, and the Company's trade dress, whether operated by the Company or its affiliates or other persons authorized by the Company, will be referred to in this Agreement as a "Store." The Store that Franchisee is licensed to operate under the Franchise Agreement will be referred to in this Agreement as the "Franchise Business."

2) Definitions.

• a) The term "Brand Standards Manual" shall mean all manuals or other written materials relating to the Systems or containing the Company's specifications.
• b) The term "Competing Business" shall mean any business that competes with a Store and/or is the same or similar to an Azal Coffee Store, including but not limited to a business that sells the same or similar coffee beverages, cold drinks, teas, baked goods, pastries, food products, coffee beans, or coffee accessories for dine-in, carry-out, catering, or delivery or other products that may be offered by Azal Coffee Stores now or in the future.
• c) The term "Confidential Information" shall include, but shall not be limited to:
  • i) Brand Standards Manuals, training methods and materials, operations methods, menus, recipes, food preparation techniques and other techniques, processes, policies, procedures, systems and data;
  • ii) Knowledge and experience relating to Stores;
  • iii) Advertising, marketing techniques and strategies, and advertising programs used in developing and operating Stores;
  • iv) All information regarding the identities and business transactions of customers and suppliers, including but not limited to customer information and product source information;
  • v) Computer software and similar technology and systems that have been or may be developed by or for the Company or its agents, which is proprietary to the Company, including digital passwords and identifications and any source code of, and data, reports, and other printed materials generated by, the software or similar technology;
  • vi) Financial information, including but not limited to knowledge of the operating results and financial performance of Stores;
  • vii) New ventures, pending projects and proposals, and product development information;
  • viii)Other aspects of the Systems now or later revealed to the Franchisee Parties and all changes and enhancements in the Systems, even if developed by any Franchisee Party; and
  • ix) Other property that the Company describes as being Confidential Information or Trade Secrets of the Systems.
• d) The term "Family Members" shall mean all individuals with any of the following relationships with a Franchisee Party or any of their respective shareholders, officers, directors, partners, members, managers, owners, investors, and affiliates: (i) spouse; (ii) children; (iii) grandchildren;

Source: Item 22 — CONTRACTS (FDD page 51)