What rights does Management Recruiters franchisor have if the franchisee defaults on the lease?

r") pursuant to that certain Lease Agreement dated, 20, entered into between Franchisee and Lessor ("Lease"); and WHEREAS, pursuant to Section 3.1 of the Franchise Agreement, Franchisee is required to deliver this Assignment to Franchisor.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

1. RECITALS

The foregoing recitals are true and correct in every respect and are incorporated by reference herein.

2. DEFINITION OF TERMS

Terms not otherwise defined in this Assignment shall have the meaning as defined in the Lease or the Franchise Agreement.

3. COLLATERAL ASSIGNMENT

Franchisee hereby grants to Franchisor a security interest in and to the Lease, all of the furniture, fixtures, inventory and supplies located in the Office and the franchise relating to the Franchise Business, and all of the Franchisee's rights, title and interest in and to the Lease as collateral for the payment of any obligations, liabilities or other amounts owed by Franchisee or its affiliates to the Lessor arising under the Lease and for any default or breach of any of the terms and provisions of the Lease, and for any default or breach of any of the terms and provisions of the Franchise Agreement. In the event of a breach or default by Franchisee under the terms of the Lease, or, in the event Franchisor makes any payment to the Lessor as a result of Franchisee's breach of the Lease, then such payment by Franchisor, or such breach or default by Franchisee, shall, at Franchisor's option, be deemed to be an immediate default under the Franchise Agreement, and Franchisor shall be entitled to possession of the Office and to all of the rights, title and interest of the Franchisee in and to the Lease and to all other remedies described herein or in the Franchise Agreement or at law or in equity, without prejudice to any other rights or remedies of Franchisor under any other Agreements or under other applicable laws or equities. This Assignment shall constitute a lien on the interest of Franchisee in and to the Lease until satisfaction in full of all amounts owed by Franchisee to Franchisor. In addition, the rights of the Franchisor to assume all obligations under the Lease provided in this Assignment are totally optional on the part of Franchisor, to be exercised in its sole discretion. Franchisee agrees to execute any and all Uniform Commercial Code financing statements and all other documents and instruments deemed necessary by Franchisor to perfect the interests and assignments granted herein.

4. INDEMNIFICATION OF FRANCHISOR

Franchisee agrees to indemnify and hold Franchisor and its affiliates, stockholders, directors, officers, agents and representatives (collectively, the "Indemnified Parties") harmless from and against any and all losses, liabilities, claims, proceedings, demands, damages, judgments, injuries, attorneys' fees, costs and expenses that any of the Indemnified Parties incur as a result of any claim

brought against any of the Indemnified Parties or any action which any of the Indemnified Parties are named as a party or which any of them may suffer, sustain or incur by reason of, or arising out of, Franchisee's breach of any of the terms and conditions of the Lease, including, without limitation, the Franchisee's failure to pay rent or any other amounts due under the Lease.

5. NO SUBORDINATION

Franchisee shall not permit the Lease to become subordinate to any lien (other than the lien created by this Assignment or under the Franchise Agreement, the Lessor's lien under the Lease, any liens securing bank financing for Franchisee's operation of the Franchise Business at the Office, and any liens created under the agreements and other instruments referenced herein) without first obtaining Franchisor's prior written consent. Franchisee shall not terminate, modify or amend any of the provisions or terms of the Lease without the prior written consent of the Franchisor. Any attempt by Franchisee to terminate, modify or amend any of the terms of the Lease without such prior written consent of Franchisor shall be null and void.

6. EXERCISE OF REMEDIES

In the event of any default by Franchisee under the terms of the Lease or under the Franchise Agreement, Franchisor shall be entitled to exercise any one or more of the following remedies in its sole and absolute discretion:

• (a) to take possession of the Office, or any part thereof, personally, or by its agents or attorneys;
• (b) to, in its sole and absolute discretion, without notice and with or without process of law, enter upon and take and maintain possession of all or any part of the Office, together with all furniture, fixtures, inventory, books, records, papers and accounts of the Franchisee;
  • (c) to exclude the Franchisee, its agents or employees from the Office;

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