Under what circumstances is the Rider annexed to the Regulatory Documents for a Best Western membership?

connection with the franchise.

[Signatures on following page]

IN WITNESS WHEREOF, the parties have executed and delivered this Rider effective on the Effective Date stated in the Membership Agreement.

MEMBER: LICENSOR: [INSERT MEMBER ENTITY], a [INSERT Best Western International, Inc., an Arizona TYPE OF ENTITY] nonprofit corporation Executed on: Executed on:

RIDER TO THE BEST WESTERN INTERNATIONAL, INC. MEMBERSHIP AGREEMENT FOR USE IN WASHINGTON

This Rider (the "Rider") is made and entered into as of the Effective Date as stated in the Membership Agreement (defined below), by and between Best Western International, Inc., an Arizona nonprofit corporation with its principal business address at 6201 N. 24th Parkway, Phoenix, Arizona 85016 ("we," "us" "our," or "Licensor"), and ___________________________________ ("you," "your," or "Member").

• 1. Background. Licensor and Member are parties to those certain regulatory documents, including, (i) the Membership Agreement; (ii) Bylaws; and (iii) Rules and Regulations; that have been signed at the same time as the signing of this Rider (collectively, the "Regulatory Documents"). This Rider is annexed to and forms part of the Regulatory Documents. This Rider is being signed because (a) the Property that Member will operate under the Membership Agreement will be located in Washington; and/or (b) Member is a resident of Washington; and/or (c) any of the offering or sales activity relating to the Membership Agreement occurred in Washington.
• 1. Addition of Paragraphs. The following is added to the end of all the Regulatory Documents:

In recognition of the requirements by the Washington Franchise Investment Protection Act and the Rules and Regulations promulgated thereunder (the "Act"), the Regulatory Documents of Best Western International, Inc. shall be modified as follows:

In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.

RCW 19.100.180 may supersede this Agreement in Member's relationship with Best Western including the areas of termination and renewal of your license. There may also be court decisions which may supersede this Agreement in Member's relationship with Best Western including the areas of termination and renewal of Member's license.

In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the Agreement, a Member may bring an action or proceeding arising out of or in connection with the sale of licenses, or a violation of the Washington Franchise Investment Protection Act, in Washington.

A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the

Agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.

Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.

Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exceed $250,000 per year (an amount that will be adjusted annually for inflation). As a result, any provisions contained in the franchise agreement or elsewhere that conflict with these limitations are void and unenforceable in Washington.

RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.

1. No Waiver of Disclaimer of Reliance. No statement, questionnaire or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or any other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.

IN WITNESS WHEREOF, the parties have executed and delivered this Rider effective on the Effective Date stated in the Regulatory Documents.

MEMBER: LICENSOR: [INSERT MEMBER ENTITY], a [INSERT TYPE OF ENTITY] Best Western International, Inc., an Arizona nonprofit corporation Executed on: Executed on:

EXHIBIT E TO FDD

FINANCIAL STATEMENTS

Report of Independent Auditors

To the Board of Directors and Members of Best Western International, Inc.

Source: Item 23 — Receipts (FDD pages 108–413)