Is the success of the Craters & Freighters franchised business dependent on the franchisee's ability as an independent business person?

[Item 22: CONTRACTS]

• 1.3 Operation of Franchised Business Limited to Territory.

Franchisee agrees to devote its best efforts to identifying, attracting, and serving customers who reside or operate within the Territory.

Therefore, except as otherwise permitted herein or as approved in advance and in writing by Franchisor, Franchisee will solicit business only in the Territory for the purpose of obtaining customers who reside or operate within the Territory, and Franchisee will not knowingly solicit business outside of the Territory.

However, Franchisee is not required to verify that customers to the Franchised Business reside or conduct business within the Territory.

Franchisee acknowledges and agrees that Franchisor, an Affiliate of Franchisor, or designee of Franchisor, as part of Franchisor's business strategy, may advertise or market on behalf of the System in the Territory.

Franchisee agrees to abide by Franchisor's then current policies on marketing outside the Territory, if any, and on cooperating with neighboring Craters & Freighters franchisees, as the same may be set forth from time to time in the Operations Manuals.

Franchisee acknowledges and agrees that customers residing or operating within the Territory are entitled the freedom to choose any Craters & Freighters outlet which they believe will best serve them and their needs, and that they may seek service of the type provided by Franchisee from others, including another Craters & Freighters outlet located outside of Franchisee's Territory.

Franchisee further acknowledges and agrees that advertising promotions conducted by third parties upon request by Franchisor may inadvertently refer customers residing or operating within the Territory to a Craters & Freighters outlet outside of the Territory.

• 1.4 Servicing in Unsold Adjacent Territories.

Franchisor may grant Franchisee the right, in Franchisor's sole determination, to promote and advertise the Franchised Business to customers, or to service customers, in an unsold territory adjacent to the Territory ("Adjacent Territory").

Franchisee acknowledges and agrees that it is obligated to pay Royalty Fees to Franchisor, in accordance with Section 3.2 of this Agreement, on all Adjusted Gross Sales (as hereafter defined) from customers residing or operating within the Territory and any Adjacent Territory.

• 1.5 Non-Exclusivity; Franchisor's Reservation of Rights.

Franchisee acknowledges that the franchise granted hereunder is non-exclusive and that Franchisor and its Affiliates retain the exclusive right, among others to:

• 1.5.1 Own, franchise, or operate Craters & Freighters outlets at any location outside of the Territory, regardless of the proximity to the boundaries of the Territory; provided, however, Franchisor will not establish within the Territory another franchisee or company-owned outlet which may also use the Marks;

• 1.5.2 Use the Marks and System to sell any products or services similar to those which Franchisee will sell, through any alternate channels of distribution within or outside of the Territory, including to National Accounts (as defined below).

Franchisee and Franchisee's owner(s) further acknowledge that these covenants and agreements relating to non-competition and non-solicitation are material inducements for Franchisor to enter into this Agreement, and that it is essential that Franchisee and Franchisee's owner(s) comply with the terms set forth herein.

• 15.2 In-Term Restrictive Covenants.

During the term of this Agreement, Franchisee and Franchisee's owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:

• 15.2.1 Perform any services for, consult for, engage in, acquire, lend money to, extend credit to, have any interest in, or be employed as an officer, director, executive, or principal of any business that offers shipping, packaging, crating, receiving and delivery, storage, transportation, moving, logistics, blanket wrap, or freight forwarding services, or products or services similar to the Franchised Business ("Competitive Business") without the prior written consent of Franchisor.

Notwithstanding the foregoing, Franchisee will not be prohibited from owning securities in a Competitive Business if such securities are listed on a stock exchange or traded on the over-the-counter market and represent five percent (5%) or less of that class of securities.

• 15.2.2 Divert, attempt to divert, or solicit business or customers of the Franchised Business, any Craters & Freighters Franchised Business, or any Craters & Freighters company-owned or Affiliate-owned business, to any Competitive Business by direct or indirect inducement or otherwise.

• 15.3 Post-Term Restrictive Covenants.

For a period of two (2) years after the expiration, transfer, or termination of this Agreement, Franchisee and its owner(s) may not, directly or indirectly, for themselves or through, on behalf of, or in conjunction with any other person, partnership, or corporation:

7. CONFIDENTIAL INFORMATION AND TRADE SECRETS.

• 7.1 Confidential Information and Trade Secrets.

In connection with the operation of the Franchised Business, Franchisee will from time to time become acquainted with, work with, and even generate certain information, procedures, techniques, data, and materials that are and, by this Agreement, will become proprietary to Franchisor. "Confidential Information" means certain confidential information relating to the operation of a Craters & Freighters Franchised Business which includes, but is not limited to, all knowledge, know-how, standards, methods and procedures related to the establishment and operation of the System and includes all records pertaining to customers, approved suppliers, and other service providers of, and/or related in any way to, Franchisee's Franchised Business including, without limitation, all databases (whether in print, electronic or other form), all names, addresses, phone numbers, e-mail addresses, customer purchase records, manuals, promotional and marketing materials, marketing strategies and any other data which Franchisor designates as confidential. "Trade Secret(s)" means information, including any formula, pattern, compilation, program, device, method, training technique or process related to the System that both derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

• 7.2 Confidentiality Obligations.

Franchisee and Franchisee's owner(s) agree they: (i) will keep confidential any of Franchisor's Confidential Information or Trade Secrets, (ii) will not use such for its or their own purpose or supply or divulge same to any person, firm, association, or corporation except as reasonably necessary to operate the Franchised Business, (iii) will adopt and implement all reasonable procedures, including those that Franchisor prescribes to prevent unauthorized use or disclosure of any Confidential Information or Trade Secrets.

The confidentiality obligations set forth in this section will remain in full force and effect during the term of this Agreement and in perpetuity after its termination or expiration and non-renewal.

Source: Item 22 — CONTRACTS (FDD pages 49–50)