Is Christian conduct a requirement for C12 Group franchisees?

Franchisee agrees to exercise best efforts to ensure that C12 members abide by Franchisor's code of conduct and support sound biblical doctrine.

Franchisee further agrees that, as leaders of leaders, C12 Area Chairs are required to abide by a covenant of "above reproach" conduct.

Behaviors that could be questionable or cause members/customers to stumble are to be avoided by Franchisee with a high degree of wisdom and prudence.

Specifically, Franchisee and its Area Chairs shall abstain from the use of all smoking products.

Franchisor and Franchisee agree that these are not biblical mandates or evil but rather represent areas of personal sacrifice and restraint that Franchisor expects of all franchisees out of service to C12 members and preservation of Christian witness (see Romans 14:13; 1 Corinthians 8:9, 10:31-32; 2 Corinthians 6:3).

Breaches of this "above reproach" conduct, including moral turpitude, legal or illegal, are material grounds for immediate termination of thisagreement.

I. Granted Territory, Trade Names, and Trademarks

• 1. Grant of Franchise and Territory. In accordance with the terms of this Agreement, Franchisor grants Franchisee the right to operate a Franchised Business within the Territory described in the map and list of zip codes attached hereto. Franchisee agrees to comply with Franchisor's rules, regulations, methods, procedures, programs, policies, and standards, as may be modified in Franchisor's sole discretion from time to time, set forth in Franchisor's Operations Manual or as otherwise communicated to Franchisee in writing and to adhere to standards of Christian conduct as established in Scripture.

WHEREAS, Franchisor and Franchisee enter into this Agreement before the Lord, for His purposes, with the expectation of this relationship modeling the attributes of a covenant which is made for mutual benefit and producing great eternal fruit. In doing so, Franchisor and Franchisee promise to fulfill this Agreement in harmony with the highest standards of Christian love and consideration as contained in the Bible and the teachings of Jesus Christ, pledging to honor one another and to work together for the glory of God. Further, Franchisor and Franchisee openly submit all interaction subsequent to the execution of this Agreement to the scrutiny of God and our brothers and sisters in Christ, promising to do all in our power to treat each other and conduct our business affairs in love and honor toward one another and the Body of Christ;

C12 membership is limited to Christian business Owners, CEOs, Presidents, and General Managers (and their team members) who give assent to Franchisor's Doctrine Statement or seek to understand these values and principles as they seriously consider the claims of Christ.

The business to be conducted by the franchisees is comprised of an executive development program to serve the needs of Christian business owners, CEOs, presidents, and their key staff, in which franchisees facilitate monthly Business Forum meetings, provide monthly one-on-one consultation, host seminars, and provide customized business and ministry-oriented materials and information to enhance the life and performance of their local members. C12 defines a Christian as a person who believes that Jesus Christ is Lord, the whole Bible is wholly true, and that God has an eternal plan for each believer's life and business, without regard to any particular religious affiliation or denomination in which such believing person participates. The market for the sale of franchises is comprised of such Christian persons.

Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 36)