What are the conditions under which Annex Brands may transfer the franchise agreement, considering the franchisee's obligations in Item 9?

e charged). A transfer has the effect of superseding the previous franchise agreement, when a new franchise agreement is entered into with the transferee. A consequence of entering into a new franchise agreement is that a new Protected Area described in Attachment 3 will be granted to the transferee and this new Protected Area may be smaller in size than the original Protected Area. Franchisee should not represent to transferee that transferee will be granted the original Protected Area. There may be other changes, such as changed fee, payment, operational and reporting requirements.

• 1. Franchisee must pay all royalty fees, marketing fees, national convention participation deposits, technology services fees, insurance premiums, or other fees under this Agreement and all other agreements between Franchisee and Franchisor or any of its affiliates, expenses, equipment lease or rental payments and/or supplies payments, purchases from Franchisor and its affiliates, interest, late fees, or any other indebtedness to Franchisor or its affiliates. which are then due and unpaid.
• 1. To the extent such consent is required by the terms of the lease, the lessor of the Center must have consented to the assignment or sublease of the Center to the transferee.
• 1. Except as provided in this Agreement, in lieu of an initial fee, Franchisee or the transferee must pay Franchisor a transfer fee of 15% of the then-current non-discounted initial franchise fee for a standard Center. If Franchisee or transferee qualifies for the International Franchise Association's VetFran Program, a 25% discount will be applied to the transfer fee. In no event will more than one VetFran discount be applied to the transfer fee.
• 1. Except to the extent prohibited or restricted by applicable law, Franchisee and its owners must execute general releases, in forms satisfactory to Franchisor, of any and all claims against Franchisor and its affiliates and their respective officers, directors, employees, and agents. No sale, assignment, transfer, conveyance, encumbrance or gift of any interest in the Franchise or this Agreement will release Franchisee or any other party to the transfer from the obligations or covenants in this Agreement, unless there is a specific written release by Franchisor.
• 1. Franchisee (if transferring), or any transferring owner, must execute a non-competition covenant in substantially the form of the Non-Competition and Non-Solicitation Agreement (Attachment 11) in favor of Franchisor and the transferee agreeing, for not less than a continuous 2 year period after the transfer, not to have any interest, either directly or indirectly, or through an Immediate Family Member, as an employee, manager, consultant, operator, lender, investor, financier, representative, disclosed or beneficial owner, part owner, proprietor, partner, principal, officer, director, co-venturer, stockholder (except as the owner of securities listed on a stock exchange or traded on the over-the-counter market that represent 5% or less of that class of securities), member, agent, participant or in any other capacity, in a business that offers business support, mailbox rental (physical and virtual), package receiving, postal, printing and copying (including digital printing and copying), digital transfer, offset printing, large-format printing, binding, finishing, personalized mailing, direct mail, packaging, crating, pick-up and

delivery, palletizing, freight, shipping, office supply, boxes and packaging materials, notary or fingerprinting products or services, or related products or services ("competitive business"), that is located within a radius of not less than 5 miles of: a) the Center or b) any Center in operation or under construction on the effective date of the transfer.

• The transferee, or other individuals who will be the actual managers of the Center, must successfully complete initial training then in effect for franchisees before the transfer or before the transferee's assumption of operational responsibility for the Center. If Franchisor authorizes the transferee or the individuals who will be the actual managers of the Center to attend initial training after the transfer or assumption, the transferee or such individuals must attend initial training within 90 days after the transfer or assumption. The transferee must pay to Franchisor a $4,000 training and processing fee before attending initial training or before the transfer, as well as any then-current license fees associated with pre-training or post-training requirements (such as the current one-time 12-month license and administrative fee of $330 for the online financial training portal), whichever occurs first. The training and processing fee and the license fees are non-refundable.
• 1. Franchisee or the transferee must, within the time specified by Franchisor, remodel the interior of the Center, add or delete equipment, change signage and other requirements, to comply with Franchisor's then-current specifications and standards being required of all new franchisees at the time of transfer.
• 1. Franchisee and the transferee must use the services of a third-party escrow company, title company, or escrow/closing attorney ("Escrow Agent") to administer certain aspects of the transfer process including the exchange of monies, execution of transfer documents, and other related items. The fees charged by the Escrow Agent (typically $1,000 to $4,000, depending on documents required by the locality and other factors) must be paid by Franchisee and/or the transferee. Franchisee and/or transferee must notify Franchisor of the Escrow Agent's contact information, and copies of fully executed escrow instructions be on file with Franchisor before transferee attends initial training.