SUCH SELLER
HAS OBLIGATED ITSELF TO THE EXPENDITURE OF MARKETING FEES, ALONG WITH A
STATEMENT OF ANY PAYMENTS MADE, AND REMAINING TO BE MADE, BY SUCH SELLER IN
ORDER TO COMPLETE ITS PERFORMANCE UNDER EACH SUCH CONTRACT.
(X)
EXCEPT AS SPECIFIED ON SCHEDULE 4.23(X), THERE IS NO ACTION, PROCEEDING, OR
INVESTIGATION PENDING OR, TO EACH SELLER'S KNOWLEDGE, THREATENED AGAINST OR
INVOLVING EITHER SELLER WITH RESPECT TO ANY OF ITS DOMESTIC OR INTERNATIONAL
FRANCHISES, AND TO EACH SELLER'S KNOWLEDGE, THERE IS NO BASIS FOR ANY SUCH
ACTION, PROCEEDING OR INVESTIGATION EXCEPT FOR ACTIONS, PROCEEDINGS OR
INVESTIGATIONS THAT COULD NOT, IN ANY INDIVIDUAL CASE OR IN THE AGGREGATE,
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON EITHER SELLER.
NEITHER SELLER IS SUBJECT TO ANY JUDGMENT, ORDER OR DECREE ENTERED IN ANY
LAWSUIT OR PROCEEDING WHICH HAS OR MAY HAVE A MATERIAL ADVERSE EFFECT ON ITS
RIGHTS AND INTERESTS IN ANY FRANCHISE AGREEMENT.
TO THE EACH SELLER'S
KNOWLEDGE, THERE ARE NOT CURRENTLY, NOR HAVE THERE EVER BEEN ANY ADMINISTRATIVE
ACTIONS, CEASE AND DESIST ORDERS OR OTHER ADMINISTRATIVE ACTIONS BY ANY FEDERAL
OR STATE AGENCY WHICH REGULATES FRANCHISES.
(Y)
SINCE JANUARY 1, 2004, EXCEPT AS SPECIFIED ON SCHEDULE 4.23(Y), NEITHER
SELLER HAS WAIVED ENFORCEMENT OF, OR FAILED TO ENFORCE, ANY NONCOMPETE OR
SIMILAR RESTRICTION UNDER A FRANCHISE AGREEMENT, AND TO EACH SELLER'S KNOWLEDGE,
NO CURRENT OR FORMER FRANCHISEE IS CURRENTLY IN VIOLATION OF ANY APPLICABLE
NONCOMPETE COVENANT.
(Z)
EXCEPT AS SET FORTH ON SCHEDULE 4.23(Z), NEITHER SELLER NOR ANY OF THEIR
AFFILIATES HAVE ENTERED INTO ANY GUARANTEES IN RESPECT OF LEASES HELD BY
FRANCHISEES OF THE BUSINESSES.
(AA)
ALL PERSONS ACTING AS FRANCHISE SALESPERSONS AND FRANCHISE SALES
BROKERS AUTHORIZED TO ACT ON BEHALF OF EACH SELLER HAS BEEN DULY AND TIMELY
REGISTERED AND QUALIFIED IN ALL JURISDICTIONS WHERE SUCH REGISTRATION OR
QUALIFICATION IS NECESSARY.
ALL INFORMATION FILED BY EITHER SELLER WITH SUCH
REGISTRATIONS ABOUT ALL SUCH PERSONS IS ACCURATE, TRUE AND COMPLETE IN ALL
RESPECTS.
ALL OF THE DOMESTIC UFOCS ACCURATELY DISCLOSE ANY RELEVANT
INFORMATION ABOUT FRANCHISE BROKERS REQUIRED IN ITEMS, 2, 3 AND 4.
(BB)
SINCE JANUARY 1, 2004, EACH SELLER HAS CONDUCTED REASONABLE TRAINING
PROGRAMS FOR ALL OFFICERS, AGENTS, EMPLOYEES, BROKERS, SALESPERSONS, CONTRACTORS
AND OTHER REPRESENTATIVES ENGAGED IN THE OFFER AND SALE OF FRANCHISES ON BEHALF
OF SUCH SELLER IN THE REQUIREMENTS OF APPLICABLE LAW BEFORE PERMITTING SUCH
PERSONS TO ENGAGE WITH PROSPECTIVE FRANCHISEES AND HAS A STANDARD PRACTICE OF
RETRAINING SUCH PERSONS AT LEAST ANNUALLY REGARDING THE REQUIREMENTS OF
APPLICABLE LAW.
(CC)
NEITHER SELLER HAS ANY PUBLISHED POLICIES GOVERNING THEIR FRANCHISE
SALES EFFORTS AND PERSONNEL THAT MANDATE CONFORMANCE WITH APPLICABLE LAW AND
THAT NOTIFY SALES
33
PERSONNEL THAT VIOLATION OF ANY LEGAL REQUIREMENTS WILL RESULT IN DISCIPLINARY
ACTION OR TERMINATION.
EACH SELLER HAS INSTITUTED AND MAINTAINED INTERNAL
CONTROLS ADEQUATE TO ASSURE THAT MATERIAL VIOLATIONS OF LEGAL REQUIREMENTS
GOVERNING FRANCHISE SALES ARE DISCOVERED AND REMEDIED AND THAT THEIR RECORDS
DEMONSTRATE COMPLIANCE WITH LEGAL REQUIREMENTS OR THAT APPROPRIATE STEPS ARE
TAKEN TO REMEDY NON-COMPLIANCE WHEN DISCOVERED.
(DD)
EACH SELLER HAS