What does the Hyper Kidz franchisee represent regarding pending or threatened actions, suits, proceedings, or investigations that could affect their assets, properties, rights, or business?

or (ii) engage in any conduct which is injurious or prejudicial to the goodwill associated with the Marks or the System or which adversely affects the reputation of us or any Hyper Kidz Business;

• 18.2.5 You or your Principals make any unauthorized use or disclosure of or duplicate any copy of any Confidential Information, make any unauthorized use of the Marks or Copyrighted Works, or use, duplicate or disclose any portion of the Operations Manual, or challenge or seek to challenge the validity of the Marks or Copyrighted Works;
• 18.2.6 You lose the right to possession of the Site and do not relocate the Hyper Kidz Business to another site in accordance with this Agreement;
• 18.2.7 You or any of your partners, if you are a partnership, or any of your officers, directors, shareholders, or members, if you are a corporation or limited liability company, shall become insolvent or make a general assignment for the benefit of creditors; if a petition in bankruptcy is filed by you or such a petition is filed against and not opposed by you; if you are adjudicated a bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver or other custodian for your business or assets is filed and consented to by you; if a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; if proceedings

for a composition with creditors under any state or federal law should be instituted by or against you; if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless a supersedeas bond is filed); if you are dissolved; if execution is levied against your business or property; if suit to foreclose any lien or mortgage against the premises or equipment is instituted against you and not dismissed within thirty (30) days; or if the real or personal property of the Hyper Kidz Business shall be sold after levy thereupon by any sheriff, marshal, or constable;

• 18.2.8 You, your Principals, or members of their immediate families violate the restrictions of Article 9 of this Agreement (Exclusive Relationship) or of any Confidentiality and Non-Competition Agreement;
• 18.2.9 You fail to report accurately the Gross Sales of the Hyper Kidz Business or fail to make payments of any amounts due us or our Affiliates for Royalty Fees, Brand Development Fees, purchases from us or our Affiliates or any other amounts due to us or our Affiliates, and do not correct such failure within ten (10) days after written notice thereof;
• 18.2.10 You knowingly maintain false books or records, or knowingly submit any substantially false report to us;
• 18.2.11 You cause or permit to exist a default under the lease or sublease for the Site and fail to cure such default within the applicable cure period set forth in the lease or sublease;
• 18.2.12 You or any of your Principals fail on three (3) or more separate occasions within any period of twelve (12) consecutive months to comply with this Agreement or any mandatory specification, standard or procedure we prescribe, whether or not such failures to comply are corrected and whether or not notice of such default is given (including insufficient funds fees);

Source: Item 22 — CONTRACTS (FDD page 52)