Does the City Publications agreement exclude laws regulating the sale of franchises or governing the relationship between franchisor and franchisee?

Washington Addendum to the Franchise Agreement, Franchisee Disclosure Questionnaire, and Related Documents This Amendment to the Franchise Agreement is agreed to this ______ day of ____________, 20, between CITY PUBLICATIONS FRANCHISE GROUP, INC. and to amend and revise said Franchise Agreement as follows: In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, Chapter 19.100 RCW will prevail.

RCW 19.100.180 may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.

There may also be court decisions which may supersede the franchise agreement in your relationship with the franchisor including the areas of termination and renewal of your franchise.

In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.

In addition, if litigation is not precluded by the franchise agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.

A release or waiver of rights executed by a franchisee may not include rights under the Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel.

Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.

Transfer fees are collectable to the extent that they reflect the franchisor's reasonable estimated or actual costs in effecting a transfer.

FOR THE STATE OF MARYLAND

This Amendment to the Franchise Agreement is agreed to this day of, 20, between CITY PUBLICATIONS FRANCHISE GROUP, INC. and as follows: to amend and revise said Franchise Agreement 1. In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, Md. Code be amended as follows: Ann., Bus. Reg. §§14-201-14-233, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall ◼ Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under the Maryland Franchise Registration and Disclosure Law. ◼ Section 18B1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C. Section 101, et seq.). ◼ Section 24A of the Franchise Agreement requires that the franchise be governed by Georgia Law; however, in the event of a conflict of lawsto the extent required by the Maryland Franchise Registration and Disclosure Law, Maryland law shall prevail. ◼ Sections 24B and 24G of the Franchise Agreement require litigation or arbitration to be conducted in the State of Georgia; the requirement shall not limit any rights Franchisee may have under the Maryland Franchise Registration and Disclosure Law to bring suit in the State of Maryland. ◼ Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three (3) years after the grant of the franchise. 2. 3. Each provision of this Amendment shall be effective only to the extent that the jurisdictional requirements of the Maryland Franchise Registration and Disclosure Law applicable to the provisions are met independent of this Amendment. To the extent this addendum shall be deemed to be inconsistent with any terms or conditions of said Franchise Agreement or exhibits or attachments thereto, the terms of this addendum shall govern. Based on our financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the franchise agreement. IN WITNESS WHEREOF, each of the undersigned hereby acknowledges having read this Amendment, and understands and consents to be bound by all of its terms. CITY PUBLICATIONS FRANCHISE GROUP, INC.:

FOR THE STATE OF MINNESOTA

In recognition of the requirements of the California Franchise Investment Law, Cal.

Corp.

Code §§31000-31516 and the California Franchise Relations Act, Cal.

Bus.

And Prof.

Code §§20000-20043, the Franchise Agreement for CITY PUBLICATIONS FRANCHISE GROUP, INC. shall be amended as follows:

• The California Franchise Relations Act provides rights to the Franchise concerning termination or nonrenewal of the Franchise Agreement, which may supersede provisions in the Franchise Agreement, specifically Sections 5.B and 19.

• Sections 5B.10 and 20B.2 of the Franchise Agreement require Franchisee to sign a general release as a condition of renewal and transfer of the franchise; such release shall exclude claims arising under California Franchise Investment Law and California Franchise Relations Act.

• Section 17A of the Franchise Agreement contains a covenant not to compete which extends beyond the expiration or termination of the Franchise Agreement; this covenant may not be enforceable under California law.

• Section 18B.1.h of the Franchise Agreement which terminates the Franchise Agreement upon the bankruptcy of the Franchisee may not be enforceable under federal bankruptcy law (11 U.S.C.

Section 101, et seq.).

• The Franchise Agreement requires litigation to be conducted in a court located in the State of Georgia.

This provision might not be enforceable for any cause of action arising under California law.

• The Franchise Agreement requires application of the laws of the State of Georgia.

This provision might not be enforceable under California law.

• Section 19E of the Franchise Agreement contains a liquidated damages clause.

Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.

• Section 24G of the Franchise Agreement requires binding arbitration.

The arbitration will occur at the forum indicated in Section 24B with the costs being borne by the prevailing party.

Prospective franchisees are encouraged to consult legal counsel to determine the applicability of California and federal laws (such as Business and Professions Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of the Franchise Agreement restricting venue to a forum in the State of Georgia.

Source: Item 23 — RECEIPT (FDD pages 39–129)