antor (as applicable) is legally compelled to disclose, provided Developer/Guarantor must have used its best efforts and afforded Franchisor the opportunity to obtain an appropriate protective order or other assurance

satisfactory to Franchisor of confidential treatment for the information required to be disclosed; or

• (c) Is otherwise permitted under the terms of this Agreement.
• (4) If required by Franchisor, Developer must ensure that Developer's Owner managers, directors, shareholders, agents, employees and any Interested Party enter into a confidentiality agreement in a form that is acceptable to Franchisor.

7 Protection of Goodwill

7.1 Acknowledgements and Restriction

Developer Parties acknowledge that:

• (1) The System used in connection with Developer's conduct of Developer's Operation, the Marks, the Raw Materials and other Products is unique and has been developed by Franchisor at great effort and expense;
• (2) Franchisor has considerable and recognized goodwill in the conduct of its business of developing and promoting the System;
• (3) Franchisor should be entitled to protect that goodwill for its own benefit by restricting Developer's and Guarantor's ability to damage that goodwill by competing with Franchisor; and
• (4) Each of the restraints imposed upon Developer and Guarantor under clause 7.2 is fair and reasonable and is no greater than is reasonably necessary to protect this goodwill.

7.2 No Other Business Interests

Developer Parties jointly and severally agree with Franchisor that neither Developer nor any Guarantor will:

• (1) During the Initial Term or any New Term finance, invest in or have a financial interest in any business other than Developer's Operation without the prior written consent of Franchisor; or
• (2) During the Restraint Period, in the Restraint Area, directly or indirectly do any of the following things:
  • (a) be concerned or interested in any Restrained Business (directly or indirectly, or through any interposed corporate entity, trust, partnership, or entity as trustee, principal, agent, shareholder, beneficiary, or as an independent contractor, consultant, adviser or in any other capacity);
  • (b) advise, assist, consult with or for or in connection with any Restrained Business or any person associated with or in any manner whatsoever connected to or engaged by or in connection with any Restrained Business;
  • (c) hold or own (beneficially or non-beneficially) whether directly or indirectly and whether absolutely or contingently or hold options over shares or any other securities or units of any entity engaging in a Restrained Business; and
  • (d) procure, employ, seek to employ or engage, or appoint in any capacity (whether as a consultant, director or otherwise), any person who is or has been in the 12 months

prior to such action an employee, independent contractor, or prospective franchisee of the Franchisor, its affiliates, or any Chatime Store Business.

(e) These restraints shall not apply to the Developer's or its affiliates' continued operation of individual Chatime Stores being operated under valid Franchise Agreement, which have not been terminated and are not in default.

7.3 Restraint Applies to Conduct in Any Capacity

The agreement by Developer Parties in clause 7.2 applies to any of them, the Interested Parties, and those acting:

• (1) In partnership or association with another person;
• (2) As principal, agent, representative, director, officer, employee, or financier;
• (3) As member, shareholder, debenture holder, note holder, or holder of any other security;
• (4) As trustee of or as a consultant or adviser to any person; or
• (5) In any other capacity.

7.4 Separate Restraint Agreements

Clauses 7.2 and 7.3 have effect as comprising each of the separate provisions which results from each combination of a capacity referred to in clause 7.3, a category of conduct referred to in clause 7.2, a geographical area specified in Schedule 1 and a period of time specified in Schedule 1. Each of these separate provisions operates concurrently and independently. If any separate provision is unenforceable, illegal or void that provision is severed and the other separate provisions remain in force.

7.5 Directors, Manager, and Key Employees

Developer must ensure that any of its directors who are not a party to this Agreement, any Interested Party, manager and any of its key employees nominated by Franchisor enter into a confidentiality and non-competition agreement before they receive or are granted access to any of the Confidential Information. The agreements must contain a similar reasonable restraint as imposed pursuant to clause 7.

7.6 Other Interested Parties

Developer must procure that any Interested Party specified by Franchisor enters into a noncompete and confidentiality agreement with Franchisor that contains:

• (1) Similar reasonable restraints as imposed on Developer and Guarantor pursuant to clause 7.2; and
• (2) Similar confidentiality obligations to the obligations imposed pursuant to clause 6, as and when required by Franchisor.

Source: Item 23 — Receipts (FDD pages 58–262)