our expense, enter into agreements with suppliers approved by us. Currently, you are required to purchase hardware and software only from suppliers designated as required, recommended or approved by us, which may include us and our affiliates. We may change approved and required suppliers from time to time.

Except for us and our affiliates disclosed in this Disclosure Document, none of our officers own an interest in any of our approved suppliers.

We will provide you with a current list of approved suppliers (including required and recommended suppliers) through updates to the Operations Manual or other forms of communication.

Proportion of Purchases Subject to Specifications

We estimate that approximately 25% to 100% of your expenditures for leases and purchases in establishing your CINCH I.T. Franchised Business will be for goods and services that must be purchased either from us, our affiliate or a designated supplier, or in accordance with

our standards and specifications. We estimate that approximately 90% to 100% of your expenditures on an ongoing basis will be for goods and services that must be purchased from either us, our affiliate, a designated supplier or in accordance with our standards and specifications.

Approval of Alternate Suppliers

If you desire to purchase, lease or use any products, services or other items from a supplier we have not pre-approved, you must submit to us sufficient written information about the proposed new supplier to enable us to approve or reject either the supplier or the particular item(s). At our request, you must submit to us samples of the proposed product(s) for our examination so that we can determine whether they meet our quality standards. We also have the right to require that our representatives be permitted to inspect the proposed supplier's facilities, or to conduct appropriate testing of the proposed new product or service, at your expense. We do charge a fee for evaluating alternative suppliers, services and products; you must pay us the greater of $500 or the actual cost of the review and/or inspection, including the actual cost of laboratory fees, professional fees, and travel and living expenses, as well as any other fees we pay to third parties in furtherance of the evaluation. If we have not responded in writing within 30 days of our written receipt of such information or product samples from you, or the delivery of test results if testing is conducted, then the request will be deemed rejected by us. In providing such approval we may consider not just the quality standards of the products or services, but the delivery capabilities, financing terms and ability of the supplier to service our Franchise System as a whole.

We formulate and modify specifications and standards imposed upon franchisees by evaluating the market acceptance of products and the financial stability of suppliers. We do not have to issue our specifications and standards to franchisees and/or approved suppliers, nor are criteria for supplier approval made available to franchisees.

We may terminate the use of any products or services, or any supplier of such items or services, that does not meet our then-current standards by giving you written notice. If we do so, you must immediately stop purchasing from such supplier or using such products or services in your Franchised Business unless or until we notify you that such supplier or such products or services requalify to meet our quality standards. If we revoke an approved supplier, we will provide notice to that supplier and notify you in our Operations Manual or other forms of communication.

We may limit the number of approved suppliers with whom you may deal, designate sources that you must use and/or refuse any request for alternative suppliers for any reason, including that we have already designated an exclusive source (which may be us or our affiliates) for any particular item or service if we believe doing so is in the best interest of our Franchise System.

Technology, Computer Hardware and Software

You must use the computer software and hardware components and accessories as further

detailed in Items 7 and 11 ("Computer System") that we require. We have the right to designate a single supplier for the Computer System. We have the right to appoint additional suppliers or different suppliers for the Computer System. We may require you to maintain service support contracts and/or maintenance service contracts and implement and periodically make upgrades and changes to the computer hardware and software, and credit card, debit card and other noncash payment systems.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–26)