What are the specific obligations of a Buff City Soap franchisee regarding compliance with standards and specifications (Item 8) and where are these obligations detailed in the Franchise Agreement (Item 9)?

• (a) Standards.

Franchisee understands the importance of maintaining uniformity among all of the Buff City Soap makeries and the importance of complying with the Standards relating to the development and operation of the for the protection of the Brand and Franchisor's interest in the System and Marks.

Franchisee acknowledges and agrees that the purpose of establishing and enforcing such Standards is not so that Franchisor may exercise any control over the day-to-day operations of the Makery that are reserved to Franchisee.

In addition, Franchisee may not engage in any co-branding in or with the Makery or use of the Premises for any purpose other than the operation of the Makery unless Franchisor has previously approved such co-branding in writing.

• (b) Maintenance.

Franchisee must at all times maintain the interior and exterior of the Makery Premises and the surrounding area in good condition and repair and comply with the Standards for cleanliness, organization and sanitation of the Makery.

Franchisee is solely responsible for maintenance, repair and replacement where necessary to maintain the Makery in accordance with the Standards and for any liabilities arising from Franchisee's failure to comply with the terms and conditions of this Section 7(b).

• (c) Improvements; System Changes.

Franchisee must, at its sole cost and expense, fully comply with any changes made to the System by Franchisor within a reasonable time.

Franchisee may be required to attend meetings, at its own cost and expense, to discuss any System changes.

Franchisee will make such capital improvement or modifications necessary to modernize, redecorate and upgrade the Makery, including without limitation the Operating Assets in accordance with Franchisor's then-current Standards, provided that (1) the aggregate amount of capital improvements, modifications and upgrades to the Makery (including those upgrades required in Sections 8(b) and 8(c) of this Agreement) required by Franchisor will not exceed $500,000 during the Initial Term; and (2) Franchisee will not be required to make such capital improvements or modifications more frequently than every 5 years.

Franchisee acknowledges that subsection (2) shall not apply to its obligations under Section 7(b).

We will provide to you the specifications, detailed descriptions, formulas, and personal care product "recipes" to you and provide you with the list of any ingredients, supplies, apparel, equipment, and any other merchandise or property that you must use or sell to operate the Franchised Business in accordance with the System which either (i) display the Marks or (ii) are specially configured, manufactured or produced by, or for, us in accordance with our specifications (collectively "Proprietary Products") that you must purchase, use, offer, sell and promote, and maintain in stock at Franchised Business in quantities needed to meet reasonably anticipated consumer demand, certain proprietary products, ingredients, equipment, furniture, signage and other merchandise constituting Proprietary Products. We may designate certain of these disclosures as confidential. You must purchase all Proprietary Products and ingredients for Proprietary Products from suppliers selected in our sole discretion of which we give you written notice. BCS Supply is the only approved supplier for certain oils, micas, lye, scents, packaging, facial products, colorings, charcoals, clays, exfoliants and additives. We may, in our discretion, as frequently as we deem necessary, change the identity, specifications, formulas, recipes, inventory requirements and designations, and add new products and delete existing products, from the items that we designate as Proprietary Products. You must conform to all changes immediately upon written notice from us unless our written notice specifies a later implementation date. The Proprietary Products are the essence of what differentiates the Buff City Soap brand from competitors, and we retain absolute discretion regarding the ingredients and formulations of these Proprietary Products, and whether we or BCS Supply are the sole suppliers of these items. Some of these Proprietary Products may be formulated by or for us or BCS Supply and sold to you in packaged or ready to package form, and some may be blended, formulated and packaged at the BCS Makery according to our instructions. Obtaining and using substitutes for Proprietary Products and those that you must obtain from approved suppliers is a material breach of your Franchise Agreement.

This Agreement grants Franchisor the right, and Franchisee acknowledges and agrees that Franchisor maintains such right, to operate and change the System and Franchisor's business in any manner that is not expressly and specifically prohibited by this Agreement or Applicable Law. Whenever Franchisor has reserved in this Agreement a right and/or discretion to take or withhold an action, or to grant or decline to grant Franchisee a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement or prohibited by Applicable Law, Franchisor may make its decision or exercise its right and/or discretion on the basis of its judgment of what is in its best interests, including its judgment of what is in the best interests of the Buff City Soap franchise network, at the time Franchisor's decision is made, without regard to: (1) whether other reasonable or even arguably preferable alternative decisions or actions could have been made by Franchisor; (2) whether Franchisor's decision or the action it takes promotes its financial or other individual interest; (3) whether Franchisor's decision or the action it takes applies differently to Franchisee and one or more other franchisees; or (4) whether Franchisor's decision or the exercise of its rights is adverse to Franchisee's individual interest or the individual interests of any other particular franchisees. Franchisor will have no liability to Franchisee for any such decision or exercise of its rights.

• (l) "Standards" means the standards, requirements, specifications, techniques, methods, policies and procedures of the System and Brand and for the development and operation of Buff City Soap makeries, as set forth in the Manuals or otherwise specified by Franchisor in writing and as may be amended by Franchisor from time to time.

• (m) "System" means the business system for establishing and operating the Makeries, the distinguishing characteristics of which include, without limitation, distinctive exterior and interior design, decor, color scheme, furnishings and equipment; special ingredients, formulations and Product offerings; the Standards; quality and uniformity of products and services offered; procedures for product sourcing, inventory, management, logistics, negotiated pricing; training and assistance; and marketing, advertising and promotional programs; all of which may be changed, improved and further developed by Franchisor from time to time.