What are Floyds 99 franchisees and their principals required to do regarding Anti-Terrorism Laws?

ime in the Operations Manual, except as such designated business hours are superseded by mall requirements, as applicable, and shall maintain sufficient staffing of licensed employees, supplies of branded products and merchandise and employ adequate personnel at all times so as to operate the Barbershop at its maximum capacity and efficiency.

• 10.2 Anti-Terrorism Representation. Franchisee and its principal shareholders, members or owners ("principals") agree to comply with or to assist Franchisor to the fullest extent possible in Franchisor's efforts to comply with Anti-Terrorism Laws (as defined below). In connection with such compliance, Franchisee and its principals certify, represent, and warrant that none of their respective property or interests are subject to being "blocked" under any of the Anti-Terrorism Laws and that neither Franchisee nor any of its principals are otherwise in violation of any of the Anti-Terrorism Laws. For the purposes of this Section, the term "Anti-Terrorism Laws" shall mean Executive Order 13224 issued by the President of the United States ("Executive Order 13224"), the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations), the USA PATRIOT Act, and all other present and future federal, state and local laws, ordinances, regulations, policies, lists and any other requirements of any governmental authority (including, without limitation, the United States Department of Treasury Office of Foreign Assets Control, and any other government agency with jurisdiction over the parties to this Agreement or their actions) addressing or in any way relating to terrorist acts or acts of war. Franchisee and its principals certify that none of them, their respective employees, or anyone associated with any of them is listed in the Annex to Executive Order 13224 (the "Annex"), which is available at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx. Franchisee agrees not to knowingly hire any individual who is listed in the Annex (or, if he or she is already employed, retain the employment of that individual). Franchisee also agrees not to knowingly: (a) establish a new relationship with a person as an employee, principal, banker, or otherwise who is listed in the Annex (whether or not Franchisor has consented to a transfer involving such new principal); and (b) maintain a business relationship (whether with an employee, principal, banker, or otherwise) with a person who is added to the Annex. Franchisee certifies that it has no knowledge or information that, if generally known, would result in Franchisee or its principals, its employees, or anyone else associated with Franchisee to be listed in the Annex. Franchisee understands that it is solely responsible for ascertaining what actions it must take to comply with the Anti-Terrorism Laws. Any misrepresentation by Franchisee under this Section or any violation of the Anti-Terrorism Laws by Franchisee, its principals, its employees, or their respective affiliates shall constitute grounds for immediate termination of this Agreement, and any other Agreement Franchisee has entered into with Franchisor or one of Franchisor's affiliates.

11. PURCHASES OF PRODUCTS

11.1 Inventory. Prior to commencement of operation of the FLOYD'S 99 Shop, the Franchisee shall purchase and stock the Barbershop with hair care products, merchandise and related items in such mix and

quantities as the Franchisor may determine and prescribe based on the size of and demand at the Barbershop.

Source: Item 22 — CONTRACTS (FDD pages 57–58)