What is the reason given for signing this addendum to the Buff City Soap Area Development Agreement?

Effective Date.

BUFF CITY SOAP FRANCHISING, LLC []## ADDENDUM TO THE BUFF CITY SOAP FRANCHISING, LLC AREA DEVELOPMENT AGREEMENT FOR USE IN WASHINGTON

• 1. Any capitalized terms that are not defined in this Addendum shall have the meaning given them in the Area Development Agreement.
• 1. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.
• 1. RCW 19.100.180 may supersede the Area Development Agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise. There may also be court decisions which may supersede the Area Development Agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.
• 1. The Summary Page of the Area Development Agreement is hereby amended by deleting the "Offering Fee: $10,000 per Makery Included in Offering" and replacing it with "Offering Fee: Franchisor's actual costs and fees (including counsel and accounting fees) incurred in connection with review of the offering."
• 1. Section 6(a) of the Area Development Agreement is amended to add the following: "The State of Washington has imposed a financial condition. With respect to each business the franchisee opens under the Area Development Agreement, Franchisor will prorate all development fees, such that the franchisee will pay the Franchisor all development fees proportionally after Franchisor has satisfied its preopening obligations outlined in the Franchise Agreement with respect to each unit franchise. The Initial Franchise Fee for the first outlet will not be due in full after Franchisor has satisfied its preopening obligations outlined in the Franchise Agreement with respect to its first outlet."
• 1. Nothing contained in Section 9(a) of the Area Development Agreement obviates the duty of Franchisor to deal with the franchisee in good faith under RCW 19.100.180(1) or limits the rights of Developer under the Franchise Investment Protection Act, Chapter 19.100 RCW.
• 1. Section 15(j) of the Area Development Agreement is amended to state that the franchisor must be substantially the prevailing party to be due attorney's fees.
• 1. Section 11(a) of the Area Development Agreement is hereby amended by deleting the last sentence and replacing it with the following: "Franchisor may take or perform any such actions without liability or obligation to Developer and, only to the extent allowed under applicable law, Developer expressly waives any claims, demands or damages arising from or related to any or all of the above actions or variations thereof."
• 1. Section 21(a) of the Area Development Agreement is hereby deleted in its entirety and replaced with the following: "(a) Payment of Amounts Owed. Developer will pay to Franchisor within 15 days after the effective date of expiration or termination of this Agreement, or on such later date that the amounts due are determined, such fees, interest due on any of the foregoing and all other amounts owed to Franchisor or its Affiliates under this Agreement which are then unpaid. If this Agreement is terminated by Franchisor following the occurrence of an Event of Default and Developer's failure to cure within any applicable cure period, or if Developer delivers Notice of termination of this Agreement to Franchisor other than as a result of a material default by Franchisor (notwithstanding the absence of any right of termination hereunder otherwise), Developer will within 30 days following the effective date of such termination pay Franchisor in a single lump sum payment, as liquidated damages and not as a penalty, an amount equal to the balance of the Initial Franchise Fee for each then remaining undeveloped Shop under this Agreement. Developer's payment of such liquidated damages will be Franchisor's sole remedy for money damages under this Agreement for Developer's failure to satisfy the Development Schedule. Only to the extent allowed under applicable law, Developer acknowledges and agrees that the liquidated damages provided for in this Section 13(a) are a fair and reasonable approximation of the amount of damages sustained by Franchisor. Except in connection with Developer's failure to satisfy the Development Schedule, payment to Franchisor of such liquidated damages will not excuse performance of Developer's post-termination obligations hereunder or preclude Franchisor from pursuing other remedies available to Franchisor for other Events of Default under this Agreement, at law or in equity, or from recovering its attorneys' fees and costs in accordance with Section 15(h) hereof."
• 1. Section 18 of the Area Development Agreement is hereby deleted in its entirety and replaced as follows: "No public communication, press release or announcement regarding this Agreement, the transactions contemplated hereby, any Franchise Agreement or Crisis Management Event will be made by Developer without Notice to Franchisor and Franchisor's prior approval of such communication, press release or announcement. Developer will not disclose the substance of this Agreement to any third party except Developer's employees, consultants, attorneys and accountants and except as necessary to obtain a lease or renewal or obtain any permit, license or other approvals, or to the extent required by the lawful order of any court of competent jurisdiction having jurisdiction over Developer or for any public disclosure otherwise required by Applicable Law. This Section does not apply to communication with any state or federal regulatory or law enforcement agencies(with the parties agreeing and acknowledging that Franchisee shall not be required to provide Franchisor prior notice of any said communication or to obtain Franchisor's prior consent for any said communication) and does not prevent franchisees from filing suit against the Franchisor."

Source: Item 6 — , Securities Offering Fee, in the amount column is revised to state the following: (FDD pages 216–303)