Under what conditions can Chem Dry approve a Transfer of the franchise agreement?

all prevent CDI from granting a security interest in any of its assets, including the Marks and any other intellectual property. FRANCHISEE further acknowledges that such any such secured party or any agents acting on behalf of such secured party shall not have any obligations to FRANCHISEE arising from the grant of such security interest.

B. BY YOU

1. FRANCHISEE acknowledges and agrees that the rights and duties created by this Agreement are personal to FRANCHISEE (and, if FRANCHISEE is an Entity, its Owner(s)) and that CDI has granted the Franchise in reliance upon CDI's perceptions of the individual(s) or collective character, business skill, aptitude and financial capacity of FRANCHISEE (and its Owner(s)) and the ability to operate the BUSINESS in the Franchised Area. Thus, you cannot transfer this Agreement. "Transfer" shall mean any voluntary, involuntary, direct, or indirect, in whole or in part, assignment, sale, gift, encumbrance, lease, merger, bequest, change in control, or other disposition of 1) this Agreement or any rights thereunder, 2) the BUSINESS or its assets, 3) any part of your ownership interest in the assets of the BUSINESS, including but not limited to, customer lists, customer contracts and any other customer information of the BUSINESS, 4) any part of your the equity/ownership interest in the Franchisee entity, or 5) a grant of an option, warrant or right to acquire an equity or ownership interest, including but not limited to by divorce, insolvency, probate or intestate succession, trust, or other operation of law. All Transfers require our prior written approval and are subject to the conditions below. Any such Transfer without our prior written approval, will be void and will constitute a breach of this Agreement. We will not, however, unreasonably withhold our approval provided that the conditions specified below are met, which we will determine in our sole discretion.

C. CONDITIONS FOR APPROVAL OF TRANSFER

• 1. In any other proposed transfer (including a transfer of this Agreement, a transfer of a controlling ownership interest in FRANCHISEE or one of its Owners, or a transfer which is one of a series of transfers (regardless of the time period over which these transfers take place), all of the following conditions must be met as a condition for Franchisor to approve the Transfer:
  • a. you are in full compliance with this Agreement and all other agreements between you and us, our affiliates, or our designated/approved suppliers and vendors, and you have paid all accrued monetary obligations to us, our affiliates, and our designated/approved suppliers and vendor;
  • b. the proposed transferee and its direct and indirect equity owner(s) (if the transferee is an Entity) shall submit a complete CDI franchise application to CDI and meet CDI's then applicable standards and qualifications for a new BUSINESS;

• c. FRANCHISEE and its owners, and the transferee is of good character and has sufficient business experience, aptitude, and financial resources to operate the BUSINESS;

• d. the transferee has assumed or will assume in writing all of FRANCHISEE'S obligations incurred in connection with this Agreement and the conduct of the BUSINESS;

• e. FRANCHISEE has paid all amounts owed to CDI and its affiliates, suppliers, and vendors, and have submitted all required reports and statements, and if still outstanding, pays off the Business Note;

• f. the proposed transferee and its owners, affiliates, and owners' immediate family members are not engaged in a competitive business;

• g. you provide us with written authorization to release to the transferee any and all information about the operation of the BUSINESS which we have collected;

• h. the transferee pays the then current fee and satisfactorily completes CDI's then current initial training program;

• i. the transferee shall (if the transfer is of this Agreement), or FRANCHISEE shall (if the transfer is of a controlling ownership interest in FRANCHISEE or one of its Owners), sign CDI's then current form of franchise agreement, the personal guaranty and all other required exhibits, any and all of the provisions of which may differ materially from any and all of those contained in this Agreement, but which franchise agreement will not provide for payment of an initial license fee or purchase of an Initial Package;

• j. in the case of an installment sale, a transaction where FRANCHISEE provides financing to transferee, transferee pays Franchisee via a promissory note or other structured payment plan, FRANCHISEE must continue to guarantee performance and all payment obligations to Franchisor under this Agreement until the final closing of the installment sale or final payment of such structured payment arrangement;

• k. if you finance any part of the sale price of the transferred interest, then (a) you agree and will assure that all of the transferee's obligations under any promissory notes or agreements are subordinate to the transferee's obligation to pay Monthly Franchise Fees, BMF Contributions, and other amounts due to us and otherwise to comply with this Agreement, (b) you will not hold any security interest reserved in the business, and (c) you will enter into a comfort letter assuring us that the transferee will meet its obligations under the Franchise Agreement, and reaffirming your guaranty of the Franchise Agreement;

l.

Source: Item 23 — Receipts (FDD pages 68–264)