What must a Cicis franchisee do if they desire to engage in a Transfer of their franchise?

days), assess a reasonable data collection fee for so long as the information or report remains outstanding. Our assessment and collection of the data collection fee will be in addition to all other rights and remedies we have.

5. TRANSFER.

A. BY US.

We have the right to delegate the performance of any portion or all of our rights and obligations under this Agreement to third-party designees. You represent that you have not signed this Agreement in reliance on any particular person or entity remaining with us in any capacity. We may change our ownership or form or assign this Agreement and any other agreement to a third party without restriction.

B. BY YOU OR YOUR OWNERS.

Your rights and duties under this Agreement are personal to you (or your owners if you are a Business Entity), and we have granted you the Development Rights in reliance upon our perceptions of your (or your owners') individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, neither you nor any owners, nor any of your or their permitted successors or assigns, shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise dispose of or encumber this Agreement (or any direct or indirect interest

in this Agreement), the Development Rights, or any direct or indirect ownership interest in you (regardless of its size) (each, a "Transfer"), without our prior written consent. Any Transfer without our prior written approval is a material breach of this Agreement and has no effect. We may reject any request to consent to the use of the Development Rights or this Agreement as collateral for the repayment of any loan.

If you intend to list your Development Rights for sale with any broker or agent, you shall do so only after obtaining our written approval of the broker or agent and of the listing agreement and any advertising materials. You may not use any Mark in advertising the transfer or sale of your Development Rights or of any ownership in you without our prior written consent.

C. CONDITIONS FOR APPROVAL OF TRANSFER.

We may consider, and you will provide or assist us in compiling, any information we deem necessary or appropriate in connection with our assessment of a proposed Transfer. If we elect to approve a proposed Transfer, we may, at our discretion, condition our approval in any manner we deem necessary and appropriate to protect the Cicis brand and our interests in the System and this Agreement, including any of the following (each of which you agree is reasonable):

• 1. you and any person or entity obligated under this Agreement or Guaranty must be in compliance with your or its obligations;
• 1. you and the proposed transferee and its owners (if the transferee is a Business Entity) must provide all information and documents we request regarding the Transfer and the proposed transferee and its owners or affiliates;
• 1. you must provide us with executed versions of any relevant documents to effect the Transfer, and all other information we request about the proposed Transfer;
• 1. if you or the transferor offer the transferee financing for any part of the purchase price, all of the transferee's obligations under promissory notes, agreements, or security interests reserved in your Development Rights must be subordinate to the transferee's obligation to pay all amounts due to us, our Affiliates, and third party vendors and otherwise agree to comply with this Agreement (or any applicable Franchise Agreement with us);
• 1. you (and your owner(s)) must sign a general release, in a form satisfactory to us, of any and all claims against us, our Affiliates, and our and their related parties;
• 1. you (and your transferring owner(s)) (and your or their immediate family members) must sign a non-competition covenant in favor of us, commencing on the effective date of the Transfer and consistent with the post-term non-competition obligations contained in the most recent Franchise Agreement that you or your Affiliates have signed with us;
• 1. you must pay all amounts owed to us, our Affiliates, and third-party vendors and have submitted all required reports and statements under this Agreement and any Franchise Agreement with us;
• 1. you and your owners must not have violated any provision of this Agreement or any other agreement with us or our Affiliates during both the 60-day period before you requested our consent to the Transfer and the period between your request and the effective date of the Transfer;
• 1. each transferee and all its direct and indirect owners and their respective spouses must execute and deliver to us a copy of our then current form of Guaranty undertaking personally to be bound, jointly and severally, by all provisions of this Agreement or, at our discretion, our then-current form of Area Development Agreement and any other ancillary agreements;
• 1. you must pay or cause to be paid to us a Transfer fee in the amount of Seven Thousand Five Hundred Dollars ($7,500), plus such amount as is necessary to reimburse us for our reasonable out of pocket costs and expenses associated with the Transfer; and
• 1. the Transfer of this Agreement or of the Development Rights must not be made separate and apart from the Transfer to the same transferee of all Franchise Agreements that were signed pursuant to this Agreement.

D. EFFECT OF CONSENT TO TRANSFER.

Our consent to a Transfer is not a representation of the fairness of the terms of any contract between you and the transferee or transferee's prospects of success, or a waiver of any claims we have against you (or your owners) or of our right to demand full compliance by you and the transferee with this Agreement.

E. PUBLIC OR PRIVATE OFFERINGS.

Written information used to raise or secure funds can reflect upon us and the System. You agree to submit any written information intended to be used for that purpose to us before inclusion in any registration statement, prospectus or similar offering memorandum.

Source: Item 23 — RECEIPTS (FDD pages 65–263)