What right does Hyper Kidz have regarding a proposed transfer of the Hyper Kidz franchise?

essly and specifically waive any claims, demands or damages arising from or related to the loss of said Marks (or any variation thereof) and/or the loss of association with or identification of "Boomerang Franchise LLC" as Franchisor. Nothing contained in this Agreement shall require us to remain in the same business or to offer the same products and services, whether or not bearing the Marks, in the event that we exercise our right to assign our rights in this Agreement.

16.2 You May Not Transfer Without Our Approval

• 16.2.1 You understand and acknowledge that the rights and duties created by this Agreement are personal to you and your Principals and that we have granted the rights hereunder to you in reliance upon the individual or collective character, skill, aptitude, attitude, business ability and financial capacity of you and your Principals. Accordingly, neither (a) this Agreement nor (b) any interest in the ownership of you, the Franchise, the Hyper Kidz Business or some or all of the assets of the Hyper Kidz Business, other than inventory items in the ordinary course of business, may be transferred without our prior written approval. Any such transfer without such approval shall constitute a breach hereof and convey no rights to or interests in this Agreement, the Franchise, you, the Hyper Kidz Business or in the assets thereof.
• 16.2.2 As used in this Agreement, the term "transfer" shall mean and include the voluntary, involuntary, conditional, direct or indirect assignment, sale, gift or other transfer by you or any of your Principals of any interest in or grant of any security interest in (a) this Agreement; (b) the Franchise; (c) you; (d) the Hyper Kidz Business; or (e) some or all of the assets of the Hyper Kidz Business, other than inventory items in the ordinary course of business.
• 16.2.3 As used above, an assignment, sale or other transfer shall include the following events:
• (a) the transfer of ownership of shares, partnership interest, or other Ownership Interests;
• (b) merger or consolidation or issuance of additional securities representing Ownership Interests;
• (c) any sale of Ownership Interests carrying voting rights of you or any security convertible to voting Ownership Interests of you or any agreement granting the right to exercise or control the exercise of the voting rights of any holder of an Ownership Interest; or
• (d) transfer in a divorce, insolvency, corporate or partnership dissolution proceeding, or in the event of the death of you or one of your Principals, by will, declaration of or transfer in trust, or under the laws of intestate succession or otherwise by operation of law.

16.3 Conditions for Approval of Transfer

• 16.3.1 We will not unreasonably withhold our approval of a transfer of an interest in this Agreement, you, the Franchise, the Hyper Kidz Business, or any of the Hyper Kidz Business's assets that meets all the applicable requirements of this Section. All of the following conditions must be met prior to or concurrently with the effective date of the transfer:
  • (a) you and your Principals shall be in full compliance with this Agreement;
• (b) the proposed transferee and its Principals must be individuals of good moral character and otherwise meet our then-applicable standards for Hyper Kidz Business franchisees, and if the proposed transferee, its owners or Affiliates have any other franchise agreements or development agreements with us, they are in full compliance with any such agreements and comply with clause (f) of Section 16.3.2;
• (c) a transfer of ownership in the Hyper Kidz Business or the assets of the Hyper Kidz Business, other than inventory in the ordinary course of business, may only be made in

conjunction with a transfer of this Agreement. If the transfer is of an Owner's interest in you then the transferee's name and relevant information shall be added as Attachment 7 hereto and the transferee shall then be bound by all provisions applicable to Principals;

• (d) you and your Principals or the transferring Principal(s) and the transferee (if it is then a franchisee of ours) must execute a general release in form satisfactory to us of any and all claims against us, our Affiliates and our respective shareholders, officers, directors, employees and agents; and
• (e) you have complied with the provisions of Section 16.7 below relating to our right of first refusal.
• 16.3.2 In addition to the above, if the transfer is of this Agreement, a Principal's interest in you, or is one of a series of transfers which, in the aggregate, constitute the transfer of this Agreement, all of the following conditions must be met prior to or concurrently with the effective date of the transfer:
• (a) the transferee must have sufficient business experience, aptitude and financial resources to operate the Hyper Kidz Business and perform the obligations of the transferor under this Agreement, and neither the transferee nor its Principals may be engaged in or intend to engage in a Competitive Business;
• (b) you and the transferee (if it is then a franchisee of ours) must pay such Royalty Fees, Brand Development Fees, amounts owed for purchases by you (or such transferee) from us and our Affiliates, and all other amounts owed to us or our Affiliates which are then due and unpaid;
• (c) the transferee and its personnel who will have access to the Confidential Information must have signed the Confidentiality and Non-Competition Agreement and have completed our training program to our satisfaction;
• (d) the transferee and its Principals, at our option, must agree in a manner satisfactory to us to be bound by all terms and conditions of this Agreement for the remainder of its term or execute our then-current form of franchise agreement and such ancillary documents, including guarantees, as are then customarily used by us in the grant of franchises for Hyper Kidz Businesses, modified as necessary to provide for the same Royalty Fees required hereunder and a term equal to the remaining term of this Agreement;
• (e) you or the transferee must have paid us a transfer fee of Fifteen Thousand Dollars ($15,000) to cover our reasonable costs in effecting the transfer and in providing initial assistance to transferee;
• (f) we must approve the material terms and conditions of such transfer including, without limitation, that the price and terms of payment are not so burdensome as to adversely affect our rights and interests under this Agreement, and you must furnish to us a copy of the executed contract of assignment;
• (g) if you and/or your transferring Principal(s) finances any part of the sale price of the transferred interest, you and/or your transferring Principal(s) must agree in a manner satisfactory to us that all obligations of the transferee under or pursuant to any promissory notes, agreements or security interests reserved by you and/or your transferring Principal (s) in the assets of the Hyper Kidz Business shall be subordinate to the obligations of the transferee to pay Royalty Fees, Brand Development

Fees, Technology Fees, and other amounts due to us and our Affiliates, and otherwise to comply with this Agreement or the franchise agreement executed by the transferee;

• (h) if this Agreement is being transferred, you and your Principals must execute a non-competition agreement in favor of us and the transferee. If a Principal is transferring his/her interest, such Principal must execute a non-competition agreement in favor of us and the transferee.

Source: Item 22 — CONTRACTS (FDD page 52)