Is the Management Recruiters franchisee's interest in the agreement considered personal to the franchisee and its principals?

n, and diligently utilize all reasonable procedures prescribed from time to time by Franchisor to prevent unauthorized use and disclosure of the Trade Secrets, including, without limitation, restrictions on disclosure to employees and use of nondisclosure and non-competition provisions as Franchisor prescribes in employment agreements with employees who may have

access to the Trade Secrets. Promptly upon Franchisor's request, Franchisee shall deliver executed copies of such agreements to Franchisor.

17. NON-COMPETITION, NON-SOLICITATION, CONFIDENTIALITY

• 17.1. Franchisee's Covenant Not to Compete During Term of Agreement; Exclusivity. Franchisee recognizes that Franchisor's Trade Secrets are the underpinning of Franchisor's business, protection of the Trade Secrets is a matter of critical importance to Franchisor, and Franchisee acknowledges Franchisor's need to protect the Trade Secrets against unauthorized use or disclosure as well as Franchisor's simultaneous need to encourage free exchange of ideas and information among Franchisor's franchisees. Franchisee agrees that neither Franchisee, nor, as applicable, any shareholder who owns more than three percent (3%) of the outstanding capital stock of Franchisee, nor any general partner, director, officer, manager, nor other key employee of Franchisee, nor a Family Member of any such person, shall directly or indirectly, as an owner, manager, employee, operator, consultant, agent, principal, partner, stockholder, corporate officer, director or in any other capacity or in any other manner whatsoever, engage in or perform services for or hold an ownership interest in any competing business, or any entity that grants franchises or licenses to others to conduct or operate any competing businesses, during the Term of this Agreement, except under a franchise agreement with Franchisor or its Affiliates. Franchisee and its shareholders, officers, directors, and partners agree to devote their best efforts exclusively to the best interests of Franchisor and Franchisee's promise to deal exclusively with Franchisor is a significant element of the consideration for which Franchisor grants the rights in this Agreement and Franchisor has entered into this Agreement in reliance upon such promise. For purposes of this Agreement, the term "competing business" shall mean a business engaged in the search, recruiting and/or placement of permanent or temporary employees, temporary staffing of skilled and/or unskilled personnel (including, without limitation, clerical, computer, technical, accounting, driving/transportation, and medical), employee leasing, or a related enterprise.
• 17.2. Solicitation of Customers. Franchisee shall not, without the prior written consent of Franchisor, either directly or indirectly, on its own behalf or in the service or on behalf of others, solicit, divert, or appropriate to any competing business, any person or entity which is, or was at any time during the preceding two (2) year period, a customer of the Franchise Business.

• 17.3. Employees' Covenants Not to Compete, Non-Solicitation, Confidential Information. Where allowed by Law, Franchisee shall obtain from each of its employees within five (5) days after the date of this Agreement, or the date of employment of each employee, whichever is later, covenants and agreements not to compete, not to solicit customers or employees to a competing business, and not to divulge confidential information to a competing business all in form and substance satisfactory to Franchisor. Such covenants and agreements shall be for the benefit of and enforceable by Franchisor against the employee. In the event that Franchisee becomes aware of any actual or threatened violation of any such covenants and agreements by any of its employees, Franchisee shall within ten (10) days of becoming aware of such actual or threatened violation fully advise Franchisor in writing of all related facts known to Franchisee regarding same. Franchisee may take action to prevent or stop any such violation as it deems appropriate, at its own expense, except that, it may not waive its rights or give any release without the express written consent of Franchisor. Franchisor may request that Franchisee take action or may take action itself to prevent or stop any such actual or threatened violation. Franchisee will cooperate with Franchisor in all ways reasonably requested by Franchisor to prevent or stop any such violation, including, without limitation, instituting or permitting to be instituted in the name of Franchisee any demand, suit, or action which Franchisor determines to be necessary or appropriate. If Franchisor makes any such demand, the suit or action will be maintained and prosecuted at the expense of Franchisor unless otherwise agreed.
• **17.4.

Source: Item 23 — RECEIPTS (FDD pages 67–327)