Are non-competition covenants during the term of the franchise applicable to Beard Papas Multi-Unit Development Agreements?

| r. Non-competition covenants after the franchise is terminated or expires | 6, 17.E. | No involvement, ownership, or interest whatsoever for 24 months in any competing business in: your Designated Territory; a 25-mile radius of your Designated Territory; a 10-mile radius of the Designated Territory of any other Shop; and you must comply with confidentiality, non- disclosure and non-solicitation covenants. | |---|---|---| | s. Modification of the agreement | 18.L. | Requires writing signed by you and us, except for unilateral | | | | changes that we may make to the Manuals or our unilateral | | | | reduction of the scope of a restrictive covenant that we may | | | | make in our discretion. | | t. Integration/merger clauses | 18.M. | Only the terms of the Franchise Agreement and schedules to | | | | the Franchise Agreement and the respective signed exhibits | | | | to the Franchise Agreement are binding, subject to state | | | | law. Nothing in any agreement is intended to disclaim the | | | | express representations made in the Franchise Disclosure | | | | Document, its exhibits, and amendments. | | u. Dispute resolution by arbitration or mediation | 18.G. | Except for certain claims for injunctive relief, all disputes must first be submitted to non-binding mediation in Los Angeles County, California and, if mediation is unsuccessful, then to binding arbitration in Los Angeles County, California. This provision is subject to applicable state law. | | v. Choice of forum | 18.G. | All mediation, arbitration and, if applicable, litigation | | | | proceedings must be conducted in, or closest to, state court | | | | of general jurisdiction that is within or closest to Los | | | | Angeles County, California or, if appropriate, the United | | | | States District Court nearest to our corporate headquarters | | | | at the time such action is filed. This provision is subject to | | | | applicable state law. | | w. Choice of law | 18.F. | California law will govern. However, this provision is | | | | subject to state law and as otherwise disclosed in Exhibit I | | | | to this Disclosure Document. | defaults were not intentionally and knowingly in violation of the Franchise Agreement. You will have 30 days to cure a default where you fail to: timely lease a location that we approve for your Shop; timely develop and open your Shop; operate your Shop in accordance with the specifications, standards, and requirements set forth in our Manuals; develop or operate your Shop in compliance with all federal, state, and local laws, rules, and regulations, unless, such violation poses a threat to public health or safety; maintain insurance coverage that we require; comply with our standards, systems or specifications as we may designate or as otherwise designated in the operations manual; and/or fail to operate your Shop in conformity with our System or otherwise violate the Franchise Agreement, except as to events of default that are not curable. h. "Cause" defined non-curable defaults 16.A.(1), 16.A.(2) The following are defaults that cannot be cured: three or more instances where you commit a curable default, whether or not you timely cured such default in each instance; you intentionally and knowingly refuse to comply with the terms of the Franchise Agreement, and/or the standards specifications, and/or requirements set forth in the operations manual and/or as communicated to you by us from time to time; you intentionally, knowingly, or negligently operate the Franchised Business in violation of applicable laws, rules, and regulations and, in doing so, create a foreseeable, imminent, and/or immediate threat to the health and safety of others; you abandon the Franchised Business or fail to maintain the required leasehold and/or ownership interests in your Shop Locations; you or your Owners intentionally made a material statement or omission in questionnaires submitted to us; the data, information, and/or records that you record and/or submit to us are intentionally misleading or false; you transfer or attempt to transfer the Franchised Business or the ownership interests in your franchise company without our approval; you disclose or permit the disclosure of information contained in the operations manual and/or of confidential information; you or your Owners engage in intentionally dishonest or unethical conduct that impacts our System; you and/or your Owners breach and, if such breach is capable of a cure, fail to timely cure another agreement with us including the Owner and Spouse Agreement and Guaranty; you and your Owners and managers fail to complete, to our satisfaction, our initial and on-going training programs; you fail to notify us of the misuse of confidential information and you fail to protect same; you misappropriate or misuse the Licensed Marks; you are deemed insolvent, make an assignment for the benefit of creditors, admit in writing your inability to pay debts; are adjudicated bankrupt, file a voluntary bankruptcy petition or have one filed against you, and/or

| q. Non-competition covenants during the term of the franchise | Not applicable | Not applicable as to Multi-Unit Development Agreement. However, each Shop developed pursuant to Multi-Unit Development Agreement will be subject to non-competition covenants set forth in each respective Franchise Agreement. |

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–51)