What right does Fly To Fit Franchise have when the agreement expires or is terminated?

est to, or is convicted of a felony; or

• (xiv) Franchisee or any Owner is accused by any governmental authority or third party of any act, or if Franchisee or any Owner commits any act or series of acts, that in Fly To Fit Franchise's opinion is reasonably likely to materially and unfavorably affect the Fly To Fit brand.
• 14.3 Effect of Termination. Upon termination or expiration of this Agreement, all obligations that by their terms or by reasonable implication survive termination, including those pertaining to non-competition, confidentiality, indemnity, and dispute resolution, will remain in effect, and Franchisee must immediately:
  • (i) pay all amounts owed to Fly To Fit Franchise based on the operation of the Business through the effective date of termination or expiration;
  • (ii) return to Fly To Fit Franchise all copies of the Manual, Confidential Information and any and all other materials provided by Fly To Fit Franchise to Franchisee or created by a third party for Franchisee relating to the operation of the Business, and all items containing any Marks, copyrights, and other proprietary items; and delete all Confidential Information and proprietary materials from electronic devices;
  • (iii) notify the telephone, internet, email, electronic network, directory, and listing entities of the termination or expiration of Franchisee's right to use any numbers, addresses, domain names, locators, directories and listings associated with any of the Marks, and authorize their transfer to Fly To Fit Franchise or any new franchisee as may be directed by Fly To Fit Franchise, and Franchisee hereby irrevocably

• appoints Fly To Fit Franchise, with full power of substitution, as its true and lawful attorney-in-fact, which appointment is coupled with an interest; to execute such directions and authorizations as may be necessary or appropriate to accomplish the foregoing; and
• (iv) cease doing business under any of the Marks.
• 14.4 Remove Identification. Within 30 days after termination or expiration, Franchisee shall at its own expense "de-identify" the Location so that it no longer contains the Marks, signage, or any trade dress of a Fly To Fit business, to the reasonable satisfaction of Fly To Fit Franchise. Franchisee shall comply with any reasonable instructions and procedures of Fly To Fit Franchise for de-identification. If Franchisee fails to do so within 30 days after this Agreement expires or is terminated, Fly To Fit Franchise may enter the Location to remove the Marks and de-identify the Location. In this event, Fly To Fit Franchise will not be charged with trespass nor be accountable or required to pay for any assets removed or altered, or for any damage caused by Fly To Fit Franchise.
• 14.5 Liquidated Damages. If Fly To Fit Franchise terminates this Agreement based upon Franchisee's default (or if Franchisee purports to terminate this Agreement except as permitted under Section 14.1), then within 10 days thereafter Franchisee shall pay to Fly To Fit Franchise a lump sum (as liquidated damages and not as a penalty) calculated as follows: (x) the average Royalty Fees and Marketing Fund Contributions that Franchisee owed to Fly To Fit Franchise under this Agreement for the 12-month period preceding the date on which Franchisee ceased operating the Business; multiplied by (y) the lesser of (1) 24 or (2) the number of months remaining in the then-current term of this Agreement. If Franchisee had not operated the Business for at least 12 months, then (x) will equal the average Royalty Fees and Marketing Fund Contributions that Franchisee owed to Fly To Fit Franchise during the period that Franchisee operated the Business. The "average Royalty Fees and Marketing Fund Contributions that Franchisee owed to Fly To Fit Franchise" shall not be discounted or adjusted due to any deferred or reduced Royalty Fees and Marketing Fund Contributions set forth in an addendum to this Agreement, unless this Section 14.5 is specifically amended in such addendum. Franchisee acknowledges that a precise calculation of the full extent of Fly To Fit Franchise's damages under these circumstances is difficult to determine and the method of calculation of such damages as set forth in this Section is reasonable. Franchisee's payment to Fly To Fit Franchise under this Section will be in lieu of any direct monetary damages that Fly To Fit Franchise may incur as a result of Fly To Fit Franchise's loss of Royalty Fees and Marketing Fund Contributions that would have been owed to Fly To Fit Franchise after the date of termination; however, such payment shall be in addition to all damages and other amounts arising under Section 14.3 and Section 14.4, Fly To Fit Franchise's right to injunctive relief for enforcement of Article 13, and any attorneys' fees and other costs and expenses to which Fly To Fit Franchise is entitled under this Agreement. Except as provided in this Section, Franchisee's payment of this lump sum shall be in addition to any other right or remedy that Fly To Fit Franchise may have under this Agreement or otherwise.
• 14.6 Purchase Option. When this Agreement expires or is terminated, Fly To Fit Franchise will have the right (but not the obligation) to purchase any or all of the assets related to the Business, and/or to require Franchisee to assign its lease or sublease to Fly To Fit Franchise. To exercise this option, Fly To Fit Franchise must notify Franchisee no later than 30 days after this Agreement

expires or is terminated. The purchase price for all assets that Fly To Fit Franchise elects to purchase will be the lower of (i) the book value of such assets as declared on Franchisee's last filed tax returns or (ii) the fair market value of the assets. If the parties cannot agree on fair market value within 30 days after the exercise notice, the fair market value will be determined by an independent appraiser reasonably acceptable to both parties. The parties will equally share the cost of the appraisal. Fly To Fit Franchise's purchase will be of assets only (free and clear of all liens), and the purchase will not include any liabilities of Franchisee. The purchase price for assets will not include any factor or increment for any trademark or other commercial symbol used in the business, the value of any intangible assets, or any goodwill or "going concern" value for the Business. Fly To Fit Franchise may withdraw its exercise of the purchase option at any time before it pays for the assets. Franchisee will sign a bill of sale for the purchased assets and any other transfer documents reasonably requested by Fly To Fit Franchise. If Fly To Fit Franchise exercises the purchase option, Fly To Fit Franchise may deduct from the purchase price: (a) all amounts due from Franchisee; (b) Franchisee's portion of the cost of any appraisal conducted hereunder; and (c) amounts paid or to be paid by Fly To Fit Franchise to cure defaults under Franchisee's lease and/or amounts owed by Franchisee to third parties. If any of the assets are subject to a lien, Fly To Fit Franchise may pay a portion of the purchase price directly to the lienholder to pay off such lien. Fly To Fit Franchise may withhold 25% of the purchase price for 90 days to ensure that all of Franchisee's taxes and other liabilities are paid. Fly To Fit Franchise may assign this purchase option to another party.

ARTICLE 15. TRANSFERS

• 15.1 By Fly To Fit Franchise. Fly To Fit Franchise may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and Fly To Fit Franchise may undergo a change in ownership and/or control, without the consent of Franchisee.
• 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that Fly To Fit Franchise entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing Fly To Fit Franchise at least 60 days prior notice of the proposed Transfer, and without obtaining Fly To Fit Franchise's consent. In granting any such consent, Fly To Fit Franchise may impose conditions, including, without limitation, the following:
  • (i) Fly To Fit Franchise receives a transfer fee equal to $10,000 plus any broker fees and other out-of-pocket costs incurred by Fly To Fit Franchise;
  • (ii) the proposed assignee and its owners have completed Fly To Fit Franchise's franchise application processes, meet Fly To Fit Franchise's then-applicable standards for new franchisees, and have been approved by Fly To Fit Franchise as franchisees;
  • (iii) the proposed assignee is not a Competitor;
  • (iv) the proposed assignee executes Fly To Fit Franchise's then-current form of franchise agreement and any related documents, which form may contain

• materially different provisions than this Agreement (provided, however, that the proposed assignee will not be required to pay an initial franchise fee);

Source: Item 22 — CONTRACTS (FDD page 44)