What are the specific obligations of a Management Recruiters franchisee regarding complying with all applicable laws and regulations (Item 9), and how do these obligations relate to the franchisor's guidance and support (Item 11)?

rk," or such other term as Franchisor approves, in the manner and form prescribed by Franchisor within thirty (30) days of the execution of this Franchise Agreement;

• conduct all advertising programs in a dignified manner that will not detract, in Franchisor's sole discretion, from the reputation of the System or the Marks;
• cease use of any advertising programs or materials within twenty-four (24) hours of receipt of written notice from Franchisor to do so;

• offer all and only such services as may from time to time be approved and/or required by Franchisor;
• only use the Marks as they relate to the System and then only as previously approved by Franchisor; and
• Comply with the MRI Code of Conduct, as may be amended from time to time.
• 9.5. Legal Compliance. Franchisee shall comply with all federal, state, and local Laws, rules, regulations, and ordinances, and timely obtain any and all permits, certificates, or licenses necessary for the full and proper conduct of the Franchise Business. Such Laws, rules, and regulations will include, without limitation, licenses to do business, fictitious name registrations, sales and other tax permits, and any permits, certificates, or licenses required by any federal, state, or local Law, rule, or regulation, and any other requirement, rule, Law, or regulation of any federal, state, or local jurisdiction. Franchisee shall pay all taxes and other fees owed to any federal, state, or local government when due.
• 9.6. Claims. Franchisee will notify Franchisor in writing within three (3) calendar days of the commencement of any action, suit, or proceeding and of the issuance of any order, writ, injunction, award or decree of any court, agency, or other Governmental Authority, in any way relating to or affecting the operation or financial condition of the Franchisee or the Franchise Business.
• 9.7. Further Assurances. Following execution of this Agreement, Franchisee shall, and shall cause its Principals and Guarantors to, execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.
• 9.8. Continuing Obligation. Franchisee and each Principal acknowledge and agree that the representations, warranties, and covenants set forth in this Section 9 are continuing obligations of Franchisee and each Principal, as applicable, and that any failure to comply with such representations, warranties, and covenants constitutes a material event of default under this Agreement. Franchisee and each Principal will cooperate with Franchisor in any efforts made by Franchisor to verify compliance with such representations, warranties, and covenants.

10. FRANCHISEE OPERATIONS

• 10.1. Operation of Franchise Business. All persons employed or retained by Franchisee to assist with the day-to-day operations of the Franchise Business (and not the temporary or contract employees) are the employees or agents of Franchisee and not Franchisor. Franchisee shall disclose this relationship all persons employed or retained by Franchisee for such purposes and will ensure that all materials provided to applicants for such positions prominently state: This business is an independently owned and operated franchise of the MRINetwork. You are not an employee or agent of our franchisor, HQ MRI Corporation.
• 10.2. Bookkeeping and Reports. Franchisee agrees to keep and maintain complete and accurate books and records of its transactions and business operations utilizing generally accepted accounting principles in the United States ("U.S. GAAP") consistently applied. Franchisee agrees to maintain the records and accounts of the Franchise Business throughout the term of the Franchise Agreement and any renewals thereof, and for a period of three years following termination of the franchise agreement, for any reason.
  • 10.2.1. Furnished Statements. Within thirty (30) days after a request by Franchisor, Franchisee will furnish Franchisor with a full and complete set of financial statements including a balance sheet, statement of income, and statement of cash flow for the Franchise Business as of the most recently completed fiscal year and fiscal quarter all prepared in compliance with U.S. GAAP.
  • 10.2.2. Audit. Franchisor has the right at all reasonable times, and up to twelve months after the expiration or termination of this Agreement, to examine or audit, at its expense, Franchisee's books, records, financial statements, bank statements, tax returns, and other documents Franchisor determines it requires for conducting the audit. Franchisee shall provide Franchisors with copies of all materials requested in the manner requested, including by electronic means, at Franchisee's expense. If Franchisor's examination finds that any report or representation made by Franchisee to Franchisor was understated or inaccurate, Franchisee shall reimburse Franchisor for the cost of the examination, which will be at a minimum, one thousand dollars ($1,000.00). Franchisee must also make payment of any and all amounts due as a result of the understatement or misrepresentation along with interest as described in this Agreement within five (5) business days following

completion of the audit. Underreporting and misrepresentation is a material default of this Agreement. Three (3) understatements or misrepresentations of any amount during the term of this Agreement may, at the option of Franchisor, be considered an incurable default and thereby subject to termination as provided herein.

10.3. Computer Systems.

• 10.3.1. Required Hardware and Software. Franchisee, at Franchisee's expense, shall install and maintain billing and payroll software, management software, and computer hardware and software which Franchisor requires for the operation of the Franchise Business. Franchisee shall execute a Computer Services Agreement, in the form attached as Exhibit B.
• 10.3.2. Future Required Software. Franchisor may require Franchisee, at Franchisee's sole expense, to enter into software license agreements in the form and substance that Franchisor requires for software Franchisor develops or acquires for use in the System, including but not limited to, invoicing, billing, time management, timeclock, and applicant tracking software.
• 10.3.3. Internet Access and E-mail. Franchisee shall have and maintain adequate hardware and software capable of accessing and shall maintain accessto high speed Internet. Franchisee shall maintain and regularly access and check an electronic mail account. Franchisee shall read all electronic mail related to the Franchise Business on a daily basis and shall accept and acknowledge receipt of all electronic mail sent by Franchisor.
• 10.3.4. Website. Franchisee will maintain a website with information regarding the Franchise Business. All information posted on such website shall be subject to review and removal by Franchisor at Franchisor's option. Franchisee will not retain any ownership or proprietary rights in and to the website which shall be the exclusive property of Franchisor, and Franchisee will relinquish all credentials to Franchisor to access and edit the website upon termination of this Agreement.
• 10.3.5. Responsibility for Payment. Franchisee shall pay all fees and expenses for technology used in the Franchise Business, including but not limited to, the costs of computer hardware and software, Internet access, license fees, help desk fees,

licensing or user-based fees for a franchise portal or a benchmarking platform, web site design and hosting, and fees related to exposure on Franchisor's website.

• 10.4. Franchisor Job Board. Franchisor may, at its option, develop and maintain one or more job boards servicing the MRINetwork and any other franchisees of Franchisor or external third parties. In the event Franchisor elects to maintain such a job board, Franchisee shall post all job openings for the Franchised Business on said job board.