affect your use of the information that is the subject of the copyright registrations. Copyrights created on or after January 1, 1978 are not subject to renewal registration.

In the Franchise Agreement, you acknowledge that your knowledge of the Development System and all processes, services and products, formulae, technology and know-how in the development, construction and marketing of an Epcon Communities project is derived from our proprietary and confidential information and that this information is a trade secret. You must maintain as confidential all information, knowledge or know-how concerning the Development System and the methods of operations under the Development System and any other matters which could properly be considered to be a part of the Development System. You may neither divulge this information to any person, other than your employees to the extent necessary to develop your project(s), nor permit persons not authorized under the Franchise Agreement to inspect the Operations Manual, other manuals disclosed in Item 11 of this disclosure document, blueprints or other materials provided to you by us. You must ensure that your employees comply with the confidentiality obligations in the Franchise Agreement. You are only permitted to use the Development System to develop projects as approved by us under the Franchise Agreement and Market Area Agreement.

ITEM 15. OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS

You are not obligated to participate personally in the development and construction of your project, however, we recommend that you or at least one of the owners of the franchise business entity directly participate in the development and construction of your project.

If you form a business entity to own and operate your franchised business, your principals, officers, owners, directors, investors and/or partners must each sign the Personal Covenants and Agreement document attached as Exhibit E to this disclosure document. If your spouse is a principal, officer, owner, director, investor or partner in your business entity, your spouse must also sign the Personal Covenants and Agreement document. Signing this document obligates the party signing to be personally bound by the payment and other obligations of the Franchise Agreement, including those concerning confidentiality and non-disclosure, completion of project(s), and non-competition.

If you form a business entity to own and operate your franchised business, the principal owners of the business entity must personally guarantee the obligations of the business entity under the Franchise Agreement.

If requested by us, your project must at all times be under the direct supervision of a Director of Operations who must devote his or her full time and energy to the development of your project. We must approve the person you propose to serve as your Director of Operations.

There are no limitations on whom you can hire as an on-premises supervisor of your project. Your on-premises supervisor is not required to own an equity interest in the franchisee entity, if the franchisee is a business entity.

You must require your managers and employees who are provided detailed knowledge of the Development System to sign the Personal Covenants and Agreement document attached as Exhibit F to this disclosure document. Signing this document obligates the party signing to be personally bound by the obligations of the Franchise Agreement concerning confidentiality and non-disclosure and non-competition.

**ITEM 16.

Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 53–54)