Franchise Agreement

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Sample Franchise Agreement

CASH PLUS, INC. FRANCHISE AGREEMENT

THIS FRANCHISE AGREEMENT (the "Agreement") is made and entered into by and between

CASH PLUS, INC., a California corporation ("Franchisor"), and,_______________________________

______________ ("Franchisee"), as of the date signed by Franchisor and set forth below Franchisor's

signature at the final page of this Agreement. This Agreement is made with reference to the following recitals:

RECITALS

A. Franchisor, as the result of the expenditure of time, skill, effort and money has developed and owns a unique and distinctive system ("System") for the establishment and operation of CASH PLUS Stores, or CASH STOR Stores in Canada, (collectively referred to herein as "CASH PLUS Stores"), which provide check cashing, payday advances and other related services.

B. The distinguishing characteristics of the System include, without limitation, unique and specialized training, uniform plans, processes, trade secrets, and styles for the layout and operation of CASH PLUS Stores, including equipment layouts, advertising, sales techniques and materials, signs, interior and exterior decoration and decor, personnel management and control system, bookkeeping and accounting methods and specialized equipment and accessories, and in general, a style, system and method of business operation and procedure developed through and by reason of Franchisor's business experience (the "CASH PLUS System"), all of which may be changed, improved, and further developed by Franchisor from time to time.

C. Franchisor identifies the System by means of certain trade names, service marks, trademarks, logos, emblems, and indicia of origin ("Proprietary Marks"), including but not limited to the name and mark "CASH PLUS", "CASH STOR" in Canada and such other names, marks and indicia as may now or hereafter be designated by Franchisor in writing for use in connection with the System.

D. Franchisor continues to develop, use, and control the use of the Proprietary Marks in order to identify for the public the source of services and products marketed thereunder and to represent the high standards of quality associated therewith.

E. Franchisee desires to establish and operate a CASH PLUS business ("Franchised Business") in accordance with the System and for that purpose wishes to obtain a franchise from Franchisor. Franchisee understands and acknowledges the importance of Franchisor's high standards of quality and service and the necessity of operating the business franchised hereunder in conformity with Franchisor's standards and specifications.

NOW, THEREFORE, in consideration of the premises and the mutual undertakings and commitments set forth herein, Franchisor and Franchisee hereby agree as follows:

ARTICLE L REPRESENTATIONS OF FRANCHISEE

Section 1.1. Franchisee acknowledges and represents to Franchisor, to induce Franchisor to enter into this Agreement, the following:

(a) Franchisee has read this Agreement and Franchisor's Uniform Franchise Offering

Circular and understands and accepts the terms, conditions, and covenants contained in this Agreement as being reasonably necessary to maintain Franchisor's standards of quality and service and the uniformity of those standards in order to protect and preserve the CASH PLUS System and the goodwill of the Proprietary Marks;

(b) Franchisee has conducted an independent investigation of the business contemplated by this Agreement. Franchisee recognizes that the specific methods of operation conducted at its CASH PLUS Store may, pursuant to Franchisor's directions in accordance with this Agreement, be required to change over time; that an investment in the Franchise which is the subject of this Agreement involves business risks; and that the success of the venture depends primarily upon Franchisee's business ability and efforts;

(c) Franchisee has not received or relied upon any guarantee, express or implied, about the revenues, profits or success of the business venture contemplated by this Agreement;

(d) No representations, either written or oral, have been made by Franchisor or by its officers, directors, employees or agents, that are contrary to the statements made in the Uniform Franchise Offering Circular previously received by Franchisee or to the terms contained in this Agreement;

(e) In all the dealings with Franchisee, the officers, directors, employees and agents of Franchisor have acted, and continue to act, only in a representative capacity, not in an individual capacity, and this Agreement and all business dealings between Franchisee and such individuals as a result of this Agreement are solely between Franchisee and Franchisor; and

(f) The application made by Franchisee to Franchisor to acquire the Franchise is true and correct. Franchisee has made no incorrect statement on the application or failed to make any statement, which is necessary in order to make the statements in the application not misleading.

ARTICLE IL GRANT OF FRANCHISE

Section 2.1. Grant

(a) Franchisor grants to Franchisee during the term of this Agreement a non-exclusive and personal license to use the CASH PLUS System and the Proprietary Marks described in this Agreement (hereinafter collectively referred to as the "Franchise") only in connection with the operation of a CASH PLUS Store ("Franchise Business"). Franchisee accepts this grant, and the right to use the CASH PLUS System and Proprietary Marks in connection with the operation of the CASH PLUS Store operated by Franchisee pursuant hereto, upon the terms and subject to the provisions of this Agreement and all documents ancillary hereto. Franchisee agrees at all times to faithfully, honestly and diligently perform its obligations hereunder and to continuously exert its best efforts to promote and enhance, to its fullest potential, the business of the Franchise Store and the goodwill associated with the Proprietary marks and the CASH PLUS System.

(b) The Franchise granted by this agreement applies to the Store Site specified in Section 3.2 below, and to no other site. Franchisee shall use the CASH PLUS System and the Proprietary Marks solely in connection with, and exclusively for the promotion and conduct of, the CASH PLUS Store in accordance with the terms and conditions of this Agreement, the Manuals and with all instructions, rules and procedures which may be prescribed by Franchisor from time to time with respect to this Agreement. The Proprietary Marks shall be used solely in connection with the sale of, and only to identify, services and products designated by Franchisor. Nothing contained herein shall be construed to authorize or permit the use by Franchisee of the CASH PLUS System or the Proprietary Marks at any other location or for any other purpose.

Section 2.2. Franchisor's Reservations.

(a) Franchisor reserves the right to improve and change the CASH PLUS System from time

to time in its sole discretion. In the event of any change to the CASH PLUS System, Franchisee shall, at its own cost and expense, promptly adopt and use only those parts of the CASH PLUS System specified by Franchisor and shall promptly discontinue the use of those parts of the CASH PLUS System which Franchisor directs are to be discontinued.

(b) Franchisee acknowledges and agrees that Franchisor, in its sole discretion, may modify or vary aspects of the System with respect to any Franchisee or group of Franchisees based on conditions or circumstances that Franchisor determines appropriate including local site conditions, state or local Laws, property use restrictions, sales potential, demographics, local economic conditions, competition and local business practices. Franchisee acknowledges that Franchisor has no obligation to disclose or offer the same or similar modifications or variances to Franchisee.

(c) Franchisor reserves the right, in its sole discretion, to manufacture, produce, distribute or license through any channel of distribution, retail, wholesale or otherwise, any goods or services, regardless of whether or not such goods or services are now, or at any time hereafter, authorized for use at CASH PLUS Stores under the Proprietary Marks or incorporated as part of the CASH PLUS System. Franchisor furthermore is free to determine whether or not to distribute any such goods or services, or to allow them to be distributed and sold under the Proprietary Marks or under a different name or mark. The Franchisor does not grant to Franchisee any right to participate, directly or indirectly, in the activities, which Franchisor has reserved to itself pursuant to this Section 2.2. (c).

ARTICLE m. FRANCHISE LOCATION AND EXCLUSIVE TERRITORY

Section 3.1. Franchise Area. The CASH PLUS Store shall be located within the geographical area (the "Franchise Area") which is described in the document attached hereto as Exhibit "A" and incorporated herein by reference.

Section 3.2. Franchise Location.

(a) Franchisee shall conduct the Franchised Business solely at the following address:

(*the "Store Site" to be determined)

(b) If no Store Site has been inserted in Section 3.2 (a) at the time of execution of this Agreement, Franchisee shall acquire through purchase or lease within ninety (90) days following the execution hereof a Store Site meeting Franchisor's then-current standards and specifications, as determined by Franchisor's sole discretion exercised in good faith. At the time the exact Store Site has been selected by Franchisee, then the address shall be provided to Franchisor immediately, and such Store Site shall be subject to Franchisor's prior approval.

In the event that Franchisee fails to lease or purchase an approved Store Site within the aforesaid ninety (90) day period, Franchisor shall have the right to rescind this Agreement in accordance with the procedure established in Article V, Section 5.2 (b) below; provided, further however, that Franchisor may agree upon an extension of said ninety (90) day period, not to exceed thirty (30) days, in the event that in Franchisor's subjective judgment Franchisee's failure to locate an approved Store Site within the prescribed time period did not result from Franchisee's failure to exercise due diligence or use its best efforts.

Section 3.3. Exclusive Territory. Except as otherwise provided herein, Franchisor shall not operate a CASH PLUS Store, or franchise others to operate a CASH PLUS Store, within the Franchise Area, during the term hereof.

Section 3.4. Relocation of the Cash Plus Store. In the event Franchisee loses the right to occupy the premises of the CASH PLUS Store, without fault of Franchisee, at any time during the term hereof, then Franchisee shall relocate the CASH PLUS Store, upon the terms and conditions set forth herein. Franchisee shall, no later than sixty (60) days after closing the CASH PLUS Store, procure a new site in the Franchise Area and commence the construction and equipping of a new CASH PLUS Store. Such site shall be subject to the terms of this Article III and the approval by Franchisor, which approval shall not be unreasonably withheld. Franchisee shall complete the construction and equipping of, and shall open, the CASH PLUS Store within ninety (90) days after the date upon which the Franchisor approves the site.

ARTICLE IV. TERM AND RENEWAL OF FRANCHISE

Section 4.1. Initial Term. Unless sooner terminated in accordance with the provisions of this Agreement, the term of this Agreement shall commence on the date of approval by Franchisor and shall continue for a period often (10) years commencing on the date set forth opposite Franchisor's signature (which date is referred to as the "Date of Approval"), unless sooner terminated by Franchisor as provided for in this Agreement.

Section 4.2. Renewal Options. In the event that this Agreement has not been terminated prior to its expiration, Franchisee may, at its option, renew this Agreement for two (2) additional terms of five (5) years, subject to the terms and conditions of new or renewing franchises then being granted by Franchisor in the state or states where the Exclusive Area is located on the date each renewal option is exercised, except as otherwise specified in this Section 4.2. The exercise of each renewal option by Franchisee is subject to the following conditions:

(a) Franchisee shall have fully performed all Franchisee's obligations under this Agreement, any amendment thereof, or any other agreement between Franchisee and Franchisor, or its subsidiaries and affiliates, and shall have received no more than two (2) notices of default during any twelve (12) month period during the Initial Term, whether or not defaults in excess of the two were cured;

(b) At the time of renewal, Franchisee shall have satisfied all monetary obligations owed by Franchisee to Franchisor and its subsidiaries and affiliates;

(c) Franchisee shall present evidence satisfactory to Franchisor that Franchisee has the right to remain in possession of the Store Site for the duration of the renewal term or, in the alternative, shall obtain Franchisor's acceptance of a new location for the Franchised Business;

(d) Franchisee shall make or commit to provide for, in a manner satisfactory to Franchisor, such renovation and modernization of the Store premises as Franchisor may reasonably require, to reflect the then-current standards and image of the System;

(e) Franchisee shall comply with Franchisor's then-current qualification and training requirements for Franchisee and its employees;

(f) Franchisee shall execute a general release, in a form prescribed by Franchisor, of any and all claims against Franchisor and its subsidiaries, affiliates, and their respective officers, directors, shareholders, employees, and agents;

(g) Franchisee shall execute Franchisor's then-current form of renewal franchise agreement, which agreement shall supersede this Agreement (except Section 4.2) in all respects, and the terms of which may differ from the terms of this Agreement; provided, however, that Franchisee shall not be required to pay royalty fees more than two (2) percentage points higher than the royalty fees provided under the expiring franchise agreement; and provided that in lieu of an initial fee Franchisee shall pay a renewal fee of Five Thousand and No/100 Dollars ($5,000).

Section 4.3. Form and Manner of Exercising Right to Enter into Renewal Agreement Franchisee shall exercise its right to enter into a Renewal Agreement in the following manner:

(a) Franchisee shall give Franchisor written notice of Franchisee's election to renew not less than ninety (90) nor more than one hundred eighty (180) days prior to the expiration of the current term.

(b) Franchisee shall pay Franchisor a renewal fee of Five Thousand and No/100 Dollars ($5,000) and execute Franchisor's then-current form of Renewal Agreement.

(c) If Franchisee fails to perform any of the acts, or to deliver any of the notices required pursuant to the provisions of this Section 4.3, in a timely manner, such failure shall be deemed an election by Franchisee not to exercise its right to enter into a Renewal Agreement, and such failure shall cause Franchisee's said right to lapse and expire.

(d) Provided that Franchisee has exercised its right to enter into a Renewal Agreement in the form and manner described above, and if on the date of the expiration of the current term, Franchisee has complied with all of the conditions contained in Section 4.2, Franchisor shall execute Renewal Agreement and, promptly after expiration of the current term, shall deliver one fully executed copy thereof to Franchisee.

ARTICLE V. FEES AND PAYMENTS TO FRANCHISOR

Section 5.1. Initial Franchise Fee. Upon execution of this Agreement for the granting of a Franchise for the operation of a CASH PLUS Store, Franchisee shall forward to Franchisor a cashier's check in the amount of Thirty Five Thousand and No/100 Dollars ($35,000) as an Initial Franchise Fee if a new location must be established by the Franchisee or Seventeen Thousand Five Hundred and No/100 Dollars ($17,500) if the Franchisee currently owns an established independent check cashing Store which is being converted to a CASH PLUS Store.

In addition to the Initial Franchise Fee, upon execution of this Agreement, Franchisee shall pay a Grand Opening Marketing Program Fee of Five Thousand Dollars ($5,000.00) for the purpose and pursuant to the terms and conditions described in Section 14.5 of this Agreement.

If the Franchisee owns all or part of other independent check cashing stores and is granted a CASH PLUS Store Franchise, then as a condition of granting that Franchise, Franchisee shall execute a Franchise Agreement for each such store and pay the Initial Franchise Fee for converting each store to the CASH PLUS System as specified in this Section 5.1. The Franchisee shall bring the converted stores up to current CASH PLUS operating and graphics standards levels that are acceptable to the Franchisor.

If the Franchisee is granted additional Franchise Areas for CASH PLUS Stores, the Initial Franchise Fee shall be Seventeen Thousand Five Hundred and No/100 Dollars ($17,500) for each additional Area.

For each additional franchise for an Area, the Franchisee shall pay the required Initial Franchise Fee to the Franchisor upon execution of the then-current Franchise Agreement.

Franchisee understands and acknowledges that Franchisor may, in its sole discretion, choose not to offer to grant Franchisee additional Areas.

Section 5.2. Refunds.

(a) Except as otherwise expressly provided herein, the amounts paid pursuant to Section 5.1

shall be deemed fully earned by Franchisor upon the execution of this Agreement and shall not be refundable in whole or in part under any circumstances. Franchisor has no internal financing arrangements for payment of the Initial Fee.

(b) If Franchisee fails to obtain Franchisor's approval for a Store Site and for the Lease of the

approved Store Site, as required by Sections 3.2(b) and 12.1, within ninety (90) days from the Date of Execution, Franchisor has the right, in its sole discretion, to terminate this Agreement. In the event of termination under this provision, Franchisor will refund seventy five percent (75%) of the Initial Franchise Fee paid, less any out of pocket expenses and sales commissions incurred and paid by Franchisor in regard to this transaction.

Section 5.3. Continuing Royalty Fee. If Franchisee operates a CASH PLUS Store, then as a continuing royalty fee (the "Royalty"), Franchisee shall pay to Franchisor a sum equal to six percent (6%) of the monthly Gross Sales of the Franchised Business (as defined in Section 5.5) during each calendar month (or portion thereof) of the term hereof with a minimum monthly payment of Five Hundred and No/100 Dollars ($500.00) commencing from the first day the store is open to the public.

Section 5.4. Advertising Fee. In addition to the sums required to be paid pursuant to Section 5.3 above, Franchisee shall pay to Franchisor a sum equal to three percent (3%) of the first $16,667 of the_monthly Gross Sales of the Franchised Business (as defined in Section 5.5), but in any event, not less than a minimum of Three Hundred and NO/100 Dollars ($300). Thereafter, 1% of Gross Sales up to $66,667 during each calendar month or portion thereof, commencing from the first day the store is open to the public as an advertising fee (the "Advertising Fee"). At any time and from time to time, Franchisor may direct Franchisee to pay all or any part of such advertising fee to one or more advertising funds organized under the System or may otherwise place conditions upon the use or payment of such fees.

Section 5.5. Gross Sales. As used herein, the term "Gross Sales" shall mean the amount of all fees for services rendered and of sales of all products sold in, on, about or from the CASH PLUS Store, whether for cash or on a charge, barter, credit or time basis, without reserve or deduction for inability or failure to collect, and including income of every kind and nature related to the Franchised Business during the term of this Agreement. Gross sales shall not include the amount of any excise or sales tax levied on retail sales and payable over to the appropriate governmental authority.

Section 5.6. Manner and Time of Payment

(a) All payments provided for in this Agreement shall be made in US currency in the manner specified by Franchisor at Franchisor's principal place of business.

The method of payment specified by Franchisor may include Automated Clearing House (ACH) direct electronic bank debit system, certified check, bank or other financial-institution check or any other method as Franchisor may designate from time to time.

(b) The full amount of the Royalty and Advertising Fee due to Franchisor for each month shall be due payable by Franchisee on the 15th day of the following month. Franchisor, at Franchisor's sole option, may elect to collect Royalty and Advertising Fee payments from Franchisee on a weekly basis for the prior week's Gross Sales either electronically or by check. All payments shall be accompanied by such reports or statements as are required under Article XIII hereof and submitted to Franchisor's principal place of business, or such other place as Franchisor may designate in writing. Any payment or report not actually received by Franchisor or its designee by the due date shall be deemed overdue.

(c) If Franchisee orders through Franchisor any materials or supplies, Franchisee shall pay Franchisor the amount charged for such items when due. Further, all amounts, if any, advanced by Franchisor or which Franchisor has paid, or for which Franchisor has become obligated on behalf of Franchisee, whether or not paid at Franchisee's request, including without limitations, taxes, any payments made on trade accounts to suppliers to maintain the reputation and goodwill of the CASH PLUS System, and payments for required insurance, shall be repaid by Franchisee to Franchisor in full upon demand.

(d) If Franchisee is delinquent in the payment of any obligation to Franchisor under this

Agreement, or under any other agreement with Franchisor, Franchisor shall have the right, but not the obligation, to apply all payments from Franchisee to the oldest obligation due, whether under this Agreement or otherwise, notwithstanding any contrary designation by franchisee as to application.

Section 5.7. Late Payment Fee, Interest and Returned Check Fee.

(a) Amounts not paid when due hereunder, in addition to causing a breach of this Agreement, shall accrue interest beginning on the first day following the due date at the rate of interest of two percent (2%) per month or the highest possible legal rate of interest for matters of this sort, whichever is higher, until such amount is paid in full. In addition, Franchisor reserves the right to impose a late charge on any payment which is not paid in full on or before the date due of up to One Hundred and No/100 Dollars

($ 100) for each delinquent payment.

(b) Not withstanding the foregoing, if the amount of the payment fee is greater than the amount permitted by applicable law, then such fee shall be reduced to an amount equal to the maximum lawful fee, it being the intention of the parties that such late payment fee shall in no event be greater than that permitted by law.

(c) Franchisor reserves the right to impose a Twenty Five Dollar ($25.00) fee on any returned check received from Franchisee's bank.

ARTICLE VI. SERVICES BY FRANCHISOR

Section 6.1. General Services. Franchisor agrees to make available to Franchisee, or assist Franchisee in obtaining, the following:

(a) Such standard construction plans, specifications and layouts for the structures, equipment, furnishings, decor and signs identified with CASH PLUS Stores as Franchisor makes available to all franchisees from time to time. Franchisee, in all respects, shall comply with all such specifications and criteria. Franchisor shall have the right to approve site plans, working drawings, architectural plans, signs plans, equipment plans and interior and exterior designs for the CASH PLUS Store, which approval shall not be unreasonably withheld.

(b) Guidance in the selection of an acceptable site for the location of the Store.

(c) Initial training in the System, including standards, methods, procedures and techniques, at such time and place as Franchisor may designate for its training program, in its discretion, and subject to the other terms of Article XI.

(d) Such assistance as Franchisor determines is appropriate in connection with the opening of the Store by Franchisee.

(e) The use of the CASH PLUS Confidential Operations Manual, other manuals and training aids, as revised by Franchisor from time to time when, in Franchisor's discretion, modifications are necessary.

(f) Such merchandising, marketing and other data and advice as may from time to time be developed by Franchisor and deemed by Franchisor to be helpful in the operation of the Franchised Business.

(g) Such periodic individual or group advice, consultation and assistance, rendered by personal visit or telephone, or by newsletter or bulletins in either paper copy or electronic transmission form

made available from time to time to all CASH PLUS franchisees, as Franchisor may deem necessary or appropriate.

(h) Such bulletins, brochures, manuals and reports as may from time to time be published by

or on behalf of Franchisor, regarding its plans, policies, research, development and activities.

(i) Such other resources and assistance as may hereafter be developed and offered by

Franchisor to CASH PLUS franchisees.

Section 6.2. Equipment, Inventory and Supplies. Franchisee is required to purchase a check cashing software program specifically customized for Cash Plus. Franchisor will arrange to have franchisee purchase this program from a supplier approved by Franchisor.

Franchisor will provide a list of suggested sources of equipment, inventory and supplies, which are necessary to operate the Franchised Business. Franchisor may make some equipment, inventory, marketing and promotional materials, and supply items available for purchase or lease by Franchisee, which may include a markup or profit to Franchisor. Franchisee may purchase inventory, equipment, and supply items from any responsible source, provided, however, that Franchisor shall have prior approval of such suppliers. Franchisee shall notify Franchisor in writing and submit such samples, information, demonstration units, and or specifications as Franchisor so requests. Franchisor shall have thirty (30) days from the date of delivery of such submission and samples to test such equipment and samples or review such information. Franchisor may charge a reasonable testing fee for the testing of the performance and reliability of any equipment or software. Franchisor shall then notify Franchisee of its approval or disapproval. If Franchisee does not receive notice of disapproval within such thirty (30) day period, approval shall be deemed given. Independent suppliers will be approved provided that their products meet the reasonable quality standards established by Franchisor.

Section 6.3. Subscriptions and Memberships. Franchisee is required to subscribe to and use the IFX Intranet System provided by IFX International, Inc., in accordance with the terms and conditions set forth in their subscription agreement and approved by Franchisor. Subscription fees are the sole responsibility of Franchisee and shall be paid directly to IFX International, Inc. or as designated by Franchisor.

Franchisor reserves the exclusive right to the form and content of the Intranet System. Franchisee agrees to use the Intranet System as prescribed by Franchisor in the Operations Manual, other manuals and bulletins, as revised by Franchisor from time to time when, in Franchisor's discretion, modifications are necessary. Franchisee shall not use the Intranet System to engage or cooperate in any conduct that reflects unfavorably on the reputation of Franchisee, Franchisor, or the Cash Plus System.

At its sole discretion, Franchisor may terminate the use of the Intranet System or change the supplier.

ARTICLE VIL FRANCHISEE'S FORM OF ORGANIZATION

Section 7.1. Legal Entity. If Franchisee is or becomes a corporation, limited liability company or similar legal entity ("Legal Entity") the Legal Entity shall comply with the following requirements:

(a) The Legal Entity shall confine its activities to the establishment and operation of the Franchised Business.

(b) The Legal Entity's organizational documents filed with the state of organization and its Bylaws, Operating Agreement or comparable governing documents shall at all times provide that its activities are confined exclusively to operation of the Franchised Business and that the issuance and transfer of voting stock, or other ownership interest therein, is restricted by the terms of this Agreement.

(c) Franchisee shall furnish Franchisor prior to formation of the Legal Entity copies of its organizational and governing documents and any other documents Franchisor may reasonably request, and any amendments thereto.

(d) Franchisee shall maintain stop-transfer instructions against the transfer on its records of any ownership interests except in accordance with the provisions of Article XIX (transfer). All stock or other evidence of ownership issued by Franchisee's Legal Entity shall bear the following legend, which shall be printed legibly and conspicuously on each stock certificate or other evidence of ownership interest:

"The transfer of these ownership interests is subject to the terms and conditions of a Franchise Agreement with Cash Plus, Inc. Reference is made to said Agreement and to the restrictive provisions of the organizational and other governing documents of this company."

Section 7.2, Partnership. If Franchisee is or becomes a general partnership, Franchisee shall furnish Franchisor promptly upon request a copy of its partnership agreement and any other documents Franchisor may reasonably request, and any amendments thereto.

Section 7.3. Records. Franchisee shall maintain a current list of all general and limited partners and all owners of record and all beneficial owners of any class of voting stock of Franchisee and shall furnish the list to Franchisor promptly upon request.

Section 7.4. Continuing Guaranty. Each individual who holds a five percent (5%) or greater ownership interest in Franchisee (including each individual holding a 50% or greater interest in any partnership or corporation having a controlling interest in Franchisee) shall enter into a continuing guaranty agreement under seal, in a form satisfactory to Franchisor, assuming and agreeing to discharge all of the obligations of Franchisee under this Agreement

ARTICLE VIII. CONFIDENTIALITY

Section 8.1. Confidential Relationship. Franchisee expressly understands and agrees that a confidential relationship is established between Franchisor and Franchisee under this Agreement and that, as a result thereof, Franchisor will be disclosing and transmitting to Franchisee certain confidential and proprietary information in connection with the System and Franchisee's operation of the Franchised Business. Franchisee hereby agrees that:

(a) Franchisee shall treat and maintain such information as confidential during the term of this Agreement and thereafter.

(b) Franchisee shall use such information only for its operations under this Agreement.

(d) Franchisee shall advise its employees and agents of the confidential nature of such information and the obligation not to disclose it.

(e) At Franchisor's request, Franchisee shall obtain and deliver to Franchisor signed confidentiality agreements from any or all of Franchisee's employees or agents who may have access to confidential information. Such agreements shall be in a form satisfactory to Franchisor and shall identify Franchisor as a third-party beneficiary with the independent right to enforce them.

Section 8.2 Prior Knowledge. Any and all information, knowledge, techniques, and know-how, including any and all records and copies thereof in any form, which Franchisor designates as confidential shall be deemed confidential for purposes of this Agreement, except information which Franchisee can demonstrate

came to its attention prior to disclosure thereof by Franchisor; or which, at the time of disclosure by Franchisor to Franchisee, was a part of the public domain; or which, after the time of disclosure by Franchisor to Franchisee, becomes a part of the public domain through publication or communication by persons other than Franchisee, its employees or agents.

Section 8.3 Franchisor Remedy. Franchisee acknowledges that any failure to comply with the requirements of this Article VIII will cause Franchisor irreparable injury, and Franchisee agrees to pay all court costs and reasonable legal fees incurred by Franchisor in obtaining specific performance of, or an injunction against violation of the requirements of this Article VIII.

ARTICLE LX. CONFIDENTIAL OPERATIONS MANUALS

Section 9.1. Operations Manuals. To protect the reputation and goodwill of Franchisor and to maintain high standards of operation under the Proprietary Marks, Franchisee shall conduct its business strictly in accordance with the standards and procedures set forth in Franchisor's Confidential Operations Manuals. Franchisor shall loan to Franchisee, concurrently with the commencement of Franchisee's training program, one (1) copy Franchisor's current Operations Manuals. The Operations Manuals, any amendments or additions thereto, and all supplemental manuals, bulletins, notices, and memoranda which prescribe standard methods or techniques of operation and which Franchisor may from time to time deliver to Franchisee, shall be deemed collectively to constitute the "Operations Manuals."

Section 9.2. Modification of the Operations Manuals. Franchisor retains the right to modify the Operations Manuals. Any revisions to the contents of the Manuals shall be deemed effective upon receipt, unless otherwise specified by Franchisor. The provisions and requirements set forth in the Operations Manuals, and any additions, deletions or revisions thereto, may not in any event alter Franchisee's fundamental rights and obligations under this Agreement. Franchisee shall at all times insure that its copy of the Manuals are kept current and up to date. In the event of any dispute as to the contents of the Manuals, the terms of the master copy of the Manuals maintained by the Franchisor at its headquarters shall be controlling.

Section 9.3. Confidentiality. Franchisee agrees to maintain the confidentiality of the contents of the Operations Manuals. The Operations Manuals are the property of the Franchisor, and may not be duplicated or copied in whole or in part in any manner. Upon the termination of this Agreement, Franchisee shall return to Franchisor all copies of the Operations Manuals in its possession.

ARTICLE X, PROPRIETARY MARKS

Section 10.1. Non-Ownership of Proprietary Marks. Franchisor is the owner of all right, title, and interest in and to the Proprietary Marks. Franchisee has no right, title or interest in or to any of the Proprietary Marks, except for franchisee's privilege and license during the term hereof to display and use the Proprietary Marks. Franchisee acknowledges that Franchisee now asserts no claim and later shall assert no claim to any goodwill, reputation or ownership of the Proprietary Marks by virtue of Franchisee's use of them, or otherwise.

Section 10.2. Acts in Derogation of the Proprietary Marks. Franchisee agrees that Franchisee shall not do or permit any act or thing to be done in derogation of any of the rights of Franchisor in connection with the Proprietary Marks, either during the term of this Agreement or after, and that Franchisee shall use the Proprietary Marks only for the uses and in the manner licensed under, and as provided in, this Agreement.

Section 10.3. Prohibition Against Disputing Franchisor's Rights. During or after the term of this Agreement, Franchisee shall not in any way dispute or impugn the validity of the Proprietary Marks. The

right and license of the Proprietary Marks granted under this Agreement is non-exclusive, and Franchisor thus may:

(a) Grant other licenses and franchises for the Proprietary Marks, in addition to those licenses already granted;

(b) Use the Proprietary Marks in connection with marketing and selling products and services;

(c) Reserve the right to substitute different proprietary Marks for use in identifying the System and the business operating thereunder;

(d) Develop and establish other systems for the same or similar Proprietary Marks, or any other Proprietary marks, and grant licenses or franchises thereto without providing any rights therein to Franchisee.

Section 10.4. Use of Proprietary Marks.

(a) Franchisee shall use only the mark "CASH PLUS" (or "CASH STOR" in Canada) and such other Proprietary Marks as are designated in writing by Franchisor for Franchisee's use, provided that Franchisee shall identify itself as the independent owner of the CASH PLUS Store in the manner prescribed by Franchisor, and shall use them only in the manner authorized and permitted by Franchisor. Any unauthorized use of the Proprietary Marks shall constitute an infringement of Franchisor's rights and a violation of this Agreement.

(b) Franchisee shall affix to the CASH PLUS Store, at such places within or without the CASH PLUS Store as shall be designated by Franchisor in its Operations Manual and as may permissibly be affixed in accordance with Franchisee's lease (if Franchisee is leasing the premises at which the CASH PLUS Store is located), signs containing Franchisor's Proprietary Marks. Except as expressly permitted in the Operations Manual, Franchisee shall not erect or display any other signs, or display any other servicemarks, logo-types, symbols or trademarks in, upon, or in connection with the CASH PLUS Store without Franchisor's prior written approval.

(c) Upon the termination of this Agreement for any reason, Franchisee forthwith shall deliver and surrender to Franchisor each and all of the Proprietary Marks, and any physical objects bearing or containing any of the Proprietary Marks. Alternatively, at Franchisee's election, Franchisee shall obliterate or destroy any Proprietary Marks in Franchisee's possession.

Section 10.5. Non-Use of Proprietary Marks. If Franchisee is a corporation, it shall not use Franchisor's Proprietary Marks, or any words or symbols that are confusingly similar to them, in whole or in part, in Franchisee's corporate name.

Section 10.6. Proprietary Marks Changes. Franchisor reserves the right to substitute different proprietary marks for use in identifying the System and the business operating thereunder. Franchisee shall accept, use and display, as may be applicable, such modified Proprietary Marks in accordance with the procedures, policies, rules and regulations contained in the Operations Manual or otherwise in writing, as though such modifications were specifically set forth in this Agreement. Franchisor shall not be obligated to compensate Franchisee for any costs incurred by Franchisee in connection with any such modification.

Section 10.7. Defense of Mark By Franchisor. Franchisor shall have the sole right to handle disputes with third parties concerning use of the CASH PLUS System, or any part of the CASH PLUS System, including, without limitation, the Proprietary Marks. If Franchisee receives notice, or is informed, of: (i) any claim, suit or demand against it on account of any alleged infringement, unfair competition or similar

matter by reason of its use of the CASH PLUS System in accordance with this Agreement, including, without limitation, its use of the Proprietary Marks, or (ii) any claim by any person of any rights in all or any part of the CASH PLUS System or in any Proprietary Mark, Franchisee shall promptly notify Franchisor in writing of such claim, suit or demand. Franchisee has no right to settle or compromise any such claim, suit or demand. Franchisor shall have sole discretion to take such action as it deems appropriate and the right to exclusively control any litigation, Patent and Trademark Office or other proceeding arising out of any such infringement, challenge or claim or otherwise relating to the CASH PLUS System or any Proprietary Mark. Franchisor shall have the right to defend, compromise or settle any such claim at Franchisee's sole cost and expense, using attorneys of its own choosing. Franchisee shall cooperate fully with Franchisor and execute such documents and perform such actions as may, in the judgment of the Franchisor, be necessary, appropriate or advisable in the defense of such claims, suits or demands and to protect and maintain the interests of the Franchisor in the CASH PLUS System and/or in the Proprietary Marks which are the subject of challenge. Franchisor will indemnify Franchisee for all actual damages (other than those of income) and out-of-pocket expenses incurred by Franchisee in connection with any claim made by any third party for infringement, unfair competition or similar matter arising out of Franchisee's use of The Proprietary Marks or the CASH PLUS System; provided, however, the foregoing obligation of Franchisor to reimburse Franchisee exists only if Franchisee has used the name or mark which is the subject of the controversy in strict accordance with the provisions of this Agreement, the Manuals and any other written procedures, requirements or instructions of Franchisor, has notified Franchisor of the challenge as set forth above, and has otherwise fully cooperated with Franchisor in the defense of any such action.

Franchisee irrevocably grants authority and power of attorney to Franchisor to defend or settle all such claims, demands or suits. Franchisee may participate at Franchisee's own expense in such defense or settlement, but Franchisor's decision with regards to defense or settlement shall be final.

Section 10.8. Prosecution of Infringers. If Franchisee receives notice or is informed or learns that any third party, which Franchisee believes to be unauthorized to use the Proprietary Marks, is using the Proprietary Marks or any variant of them, Franchisee promptly shall notify Franchisor of the facts relating to such alleged infringing use. Thereupon, Franchisor, in its sole discretion, shall determine whether or not it wishes to take any action against such third person on account of such alleged infringement of Franchisor's Proprietary Marks or to prosecute any claim of any kind or nature whatsoever against such alleged infringer of Franchisor's Proprietary Marks for or on account of such infringement.

Section 10.9. Abandonment. Upon expiration or termination of this Agreement, Franchisor may, if Franchisee does not do so, execute in Franchisee's name an abandonment of the use of all Proprietary Marks which have been registered as assumed or fictitious names by Franchisee.

Section 10.10. Assignment of Rights. Franchisee acknowledges and agrees that any patents, trademarks, copyrights, inventions, processes and/or proprietary information developed by Franchisee, its agents, representatives or employees, during the course of its ownership of the Franchise having application to the operation of a CASH PLUS Store shall be the exclusive property of the Franchisor. Franchisee shall immediately notify Franchisor of the discovery or creation of such information and take all steps required by Franchisor to protect and develop such rights and information and to ensure Franchisor's ownership of same, including, but not limited to, execution of any and all required documentation.

ARTICLE XL MANAGEMENT AND TRAINING

Section 11.1. Management of the Franchised Business. Except as Franchisor may otherwise expressly permit in writing, Franchisee (or, if Franchisee is a corporation, a general partnership or a limited liability company, ("Legal Entity") a principal of Franchisee) shall devote foil time, energy, and best efforts to the supervision and management of the Franchised Business (and, if applicable, to other CASH PLUS franchised businesses owned and operated by Franchisee). Franchisee shall ensure that the Franchised Business is at all times under the management and supervision of a trained person acceptable to Franchisor.

Section 11.2. Initial Training. Promptly following the execution of this Agreement, and prior to Franchisee's commencement of operation of the Franchised Business, Franchisee (or, if Franchisee is a corporation, a general partnership or other Legal Entity, a principal of Franchisee) and Franchisee's designated Manager shall attend and complete, to Franchisor's satisfaction, the initial franchise management training program offered by Franchisor. Such training shall be given at the time and date scheduled by Franchisor at a CASH PLUS Store or training center designated by Franchisor, over a period of time, which Franchisor deems appropriate in its discretion. Franchisee shall be paid no compensation for any services performed by Franchisee during such training period.

Franchisor may require any other principal or employee of Franchisee who is, or subsequently becomes, actively involved in the management of the Franchised Business, to attend and satisfactorily complete such training program as Franchisor may require. If Franchisee or any such person fails to attend and satisfactorily complete a required program, Franchisee may designate a substitute trainee acceptable to Franchisor.

Section 11.3. Additional Training. Franchisor shall have the right from time to time to require Franchisee and/or its personnel to attend and complete additional training courses or programs which Franchisor deems to be of major importance to the operation of the Franchised Business by its Franchisee. Such supplementary training may relate to, by way of illustration and not limitation, marketing, bookkeeping, accounting and general operating procedures and the establishment, development and improvement of computer systems and programs. The time and place of such training shall be determined by Franchisor in its sole discretion.

Section 11.4. Expenses. Franchisee or its employees shall be responsible for all personal expenses incurred by them in connection with training programs, including, without limitation, costs and expenses of transportation, lodging, meals, and wages and employee benefits. Franchisor reserves the right to charge reasonable fees for materials and/or participation in any training courses or seminars offered by or on behalf of Franchisor, except that no fee shall be charged for the attendance by up to two (2) persons representing Franchisee at the initial franchise management training program.

ARTICLE XIL OPERATIONS

Section 12.1. Location and Lease of Store Site.

(a) Timing. Franchisee, at its sole cost and expense, shall acquire through purchase or lease the approved Location for the CASH PLUS Store no later than ninety (90) days after the effective date of this Agreement

(b) Location of Store Site. If the location of the Store Site is not described in Section 3.2. Franchise Location, on the date of execution of this Agreement, Franchisee shall, no later than ninety (90) days following the effective date of this Agreement, select a location acceptable to Franchisor which meets Franchisor's then-current guidelines for site selection. Franchisee acknowledges that it is solely responsible for site selection. Franchisee shall submit to Franchisor in writing the street address of each proposed site. Franchisor shall notify Franchisee within ten (10) days following receipt thereof of its approval or disapproval of each proposed site. Franchisor's approval of a proposed site shall not be unreasonably withheld. Franchisor's failure to notify Franchisee within said ten (10) day period of its approval of the proposed site shall constitute its disapproval. Upon Franchisor's written approval of the location, the parties shall complete Section 3.2. to set forth the street address of the Store Site.

(c) Lease of Store Site. Upon Franchisor's approval of the Store Site, Franchisee shall diligently pursue and complete negotiation of the Lease, which Lease shall be subject to Franchisor's prior written approval before Franchisee may execute it. Franchisee shall submit a copy of the proposed Lease to Franchisor, and Franchisor shall have ten (10) days from the date the proposed Lease is submitted to it in which to approve or disapprove the proposed Lease. Franchisor's approval of the proposed Lease shall not

be unreasonably withheld. Franchisor's failure to notify Franchisee within said ten (10) day period of its approval of the proposed Lease shall constitute its disapproval. Following Franchisor's approval, the Lease shall be duly executed by Franchisee and the landlord on all of the material terms and conditions as submitted to Franchisor. Franchisor shall issue its approval of the proposed Lease if all of the following terms and conditions, and those as may be otherwise in writing and provided to Franchisee by Franchisor, are included in the Lease:

(i) A provision stating that the landlord shall consent to Franchisee's assignment of

the Lease to any person or entity to whom Franchisee is permitted to assign its rights under this Agreement, provided the proposed assignee agrees in writing to assume all of the terms, covenants and conditions to be performed by Franchisee under the Lease and provides the Landlord with adequate assurance of its ability to perform such obligation for the balance of the Lease term.

(ii) A provision providing for a Lease term, together with one or more renewal options, which in the aggregate permits possession of the Store Site for a period equal to or exceeding the Term of this Agreement, unless Franchisor approves, in writing, a shorter Lease term.

(iii) A provision acknowledging that the Lease does not impose any obligations on Franchisor.

(iv) A provision which declares that upon Franchisor's notice to Franchisee and to the landlord that this Agreement has been terminated or has expired, regardless of whether termination is by Franchisor, by mutual agreement or for any other reason, Franchisor or its nominee shall have the right, at its sole discretion, to receive an assignment of the leasehold interest without the further consent of the landlord being required. Accordingly, the Lease shall contain the following automatic assignment provision:

"This Lease is immediately assignable by (name of Franchisee) to Cash Plus, Inc. or to its nominee, upon Cash Plus Inc.'s written request in the event the Franchise Agreement is terminated or expires. Landlord's consent to the assignment is hereby deemed granted."

(v) A provision requiring the landlord to give Franchisee: (i) written notice of any

breach or claim or breach of the Lease by Franchisee, and (ii) a reasonable opportunity to cure the breach. The Lease shall obligate the landlord to deliver a copy of said written notice concurrently to Franchisor. The notice shall specify the existence and nature of the breach and the length of time permitted under the Lease for Franchisee to cure the default. In the event Franchisee fails to timely cure said default, the Lease shall require the landlord to give Franchisor the right, but not the obligation, for a reasonable period of time, to cure said breach and, upon such completion, to succeed to Franchisee's leasehold interest.

(vi) A provision stating that no amendment, modification or waiver of any provision of the Lease by the landlord or Franchisee shall conflict with the conditions set forth in this Section 12.1.

(vii) A provision whereby Franchisee shall irrevocably appoint Franchisor as Franchisee's attorney-in-fact to execute in Franchisee's name and on Franchisee's behalf all documents appropriate or necessary to assign its rights in and to the Lease to Franchisor pursuant to the terms and conditions contained in this Agreement and in such Lease and, further, to carry out the other obligations set forth in the Lease described herein.

(viii) A provision whereby the landlord agrees not to lease premises in the immediate vicinity of the CASH PLUS Store to competing retail establishments that sell check cashing services, payday advances and related services without Franchisor's prior written consent.

Section 12.2. No Representation. Neither Franchisor's approval of a site selected by Franchisee as the Store Site, nor Franchisor's approval of the Lease, constitutes a warranty or guarantee by Franchisor of the location's potential for success.

Section 12.3. Construction of the CASH PLUS Store.

(a) Following Franchisor's approval of the Lease, Franchisee promptly shall construct the CASH PLUS Store at the approved location in strict conformity with the specifications delivered by Franchisor to Franchisee and in strict accordance with the final plans, drawings and specifications provided by Franchisee and approved by Franchisor in writing, which approval shall not be unreasonably withheld.

(b) Within ninety (90) days after construction begins, Franchisee shall complete construction and installation of all fixtures, signs, furnishings, machinery, and equipment, and shall obtain all business and other permits, acquire necessary inventory, employ all personnel, and do all other acts necessary to make the CASH PLUS Store ready to commence business. Franchisee shall not open the CASH PLUS Store until it has been inspected, and approved in writing, by Franchisor, and that Franchisee is approved and authorized to offer a minimum of services that will be determined, from time to time, by Franchisor. ■

(c) Franchisee shall be excused from timely performance of Franchisee's obligations set forth in Subsection (a) and (b) above only because of causes beyond the reasonable control of Franchisee, such as strikes, material shortages, fires and other acts of God, which Franchisee, by exercise of due diligence, could not have avoided.

Section 12.4. Inspection. Franchisee shall permit Franchisor or its agents to enter and inspect the Store premises at any reasonable time. Franchisee shall cooperate fully with Franchisor and its agents in such inspections and render such assistance as they may reasonably request. Immediately upon notice of any deficiencies detected in such inspections by Franchisor or its agents, Franchisee shall take such steps as may be necessary to correct such deficiencies, including the temporary closing of the Store if so directed by Franchisor. Without limiting Franchisor's other rights and remedies, Franchisor shall have the right, if Franchisee fails or refuses to act promptly, to make or cause to be made such corrections as may be required and to collect the costs and expenses of correction from Franchisee.

Section 12.5. Destruction of Premises. If the CASH PLUS Store is damaged or destroyed by fire, earthquake, flood, or other such occurrences, Franchisee shall, to the extent permitted by Franchisee's lease repair and restore the CASH PLUS Store in accordance with the then-existing plans and specifications of Franchisor as soon as possible. Franchisee shall commence such reconstruction within thirty (30) days after such occurrence, and shall complete said reconstruction within ninety (90) days after its commencement, excluding delays of a non-financial nature beyond Franchisee's reasonable control.

Section 12.6. Operating Standards. Franchisee understands and acknowledges that every detail of the System and the Franchised Business is important to Franchisee, Franchisor, and other CASH PLUS franchisees to maintain high and uniform operating standards, to increase the demand for the services and products sold by all franchisees, and to protect the reputation and goodwill associated with the Proprietary Marks. Franchisee further covenants and agrees that:

(a) Franchisee shall use the Store solely for the operation of the Franchised Business, shall keep the Store open and in normal operation for such minimum hours and days as Franchisor may from time to time specify or approve in writing, and shall refrain from using or permitting the use of the Store premises for any other purpose or activity at any time without the express prior written consent of Franchisor.

(b) Franchisee shall install and use in and about the Store only such equipment, fixtures, furnishings, interior and exterior signs, inventory and supplies, and other items (collectively the "CASH PLUS Materials") including, but not limited to, computer station(s), digital photo system and the Answers, etc. operating software program, as strictly conform to the standards and specifications for CASH PLUS Stores as set forth in the Manuals or otherwise in writing and revised by Franchisor from time to time.

(c) Franchisor shall have the right, at any time during the term hereof, to require Franchisee to acquire new equipment or fixtures for the CASH PLUS Store, in addition to or in replacement of the equipment and fixtures acquired pursuant to this Agreement, if Franchisor determines, in its business judgment reasonably exercised, that due to changes in technology or in its products or services, or for other business reasons, it is appropriate or necessary that Franchisee acquire such new equipment or fixtures. Franchisor shall exercise its said right in good faith, and shall require the same acquisitions of all CASH PLUS Stores similarly situated. Franchisor shall deliver to Franchisee a notice in writing specifying such new equipment or fixtures, the standards and specifications therefore, and the terms of any financing or leasing plans Franchisor may make available to its franchisees for their acquisition. Franchisee shall acquire all such new equipment or fixtures at such time as Franchisor shall specify.

(d) Franchisee shall, commencing six (6) months prior to the expiration of the fifth year of the initial term of this Agreement, refurbish and remodel the Franchised Location in the same manner and under the same terms and conditions as is required and as is described in the immediately preceding paragraph, provided that renovation pursuant to this paragraph may include, but not be limited to, repair or replacement of the equipment, fixtures, furnishings, interior and exterior signs, inventory and supplies and may include major structural changes in the Franchise Location and building design so as to conform as closely as possible to the Franchisor's plans and specifications.

(e) Franchisee shall maintain the Store premises and all adjacent areas in good, clean, attractive and safe condition at all times. Franchisee shall, at its expense, undertake all maintenance and make all repairs, replacements, alterations, and additions as may be required for that purpose, including, without limitation, periodic cleaning, repainting and repairs.

(f) Franchisee shall offer and sell from the Store all services and products authorized by Franchisor and shall not offer or sell any other services or products of any kind or character without the express prior written consent of Franchisor. Franchisee shall discontinue offering any services or products (whether or not previously authorized by Franchisor) promptly upon notice from Franchisor.

(g) Franchisee shall use and display sales, marketing, and promotional materials provided by Franchisor from time to time, in the manner and for the time periods designated by Franchisor. Franchisee shall ensure that all forms, stationery, signs and other printed materials used in connection with the Franchised Business bear the Proprietary Marks in the form, colors, location and manner prescribed by Franchisor and otherwise comply with the standards and specifications prescribed by Franchisor from time to time in the Manuals or otherwise in writing.

Section 12.7. Conduct. Franchisee shall not engage or cooperate in any conduct that reflects unfavorably on the reputation of Franchisee, Franchisor, or the System or impairs the goodwill associated with the Proprietary Marks, including conduct which jeopardizes Franchisee's good relations with the owners of Host Sites or the customers and creditors of the Franchised Business, or which constitutes a deceptive or unfair trade practice or otherwise violates applicable law or regulations.

Section 12.8. Insurance. Franchisee shall purchase, and at all times during the term hereof maintain, policies of insurance with such minimum standards, coverage, and limit (or such additional limits of types of coverage) as Franchisor may from time to time prescribe in the Operations Manual or otherwise in writing. As proof of such insurance, a certificate of insurance shall be submitted by Franchisee for Franchisor's approval prior to Franchisee's commencement of operations under this Agreement and upon each renewal or change of Franchisee's insurance policy. Upon request, Franchisee shall deliver to Franchisor or its agent a complete copy of Franchisee's then-prevailing policy of insurance at any time during or after the term of this Agreement.

Section 12.9. Suggested Prices. Franchisor shall endeavor to ascertain those prices and/or fees, which Franchisor believes will maximize the profits of Franchisee, and Franchisor shall advise Franchisee, from time to time, as to the various suggested prices and/or fees in this regard. Franchisor and Franchisee hereby

agree that any such list or schedule of prices and/or fees furnished to Franchisee by Franchisor is by way of recommendation only, and is not to be construed as binding or mandatory upon Franchisee. Nothing contained herein, however, shall be deemed a representation by Franchisor that Franchisee's use of Franchisor's suggested prices and/or fees will in fact maximize profits.

Section 12.10 Empiovee Hiring. During the term of this Agreement and for a period of two (2) years after its termination or expiration, Franchisee covenants that Franchisee shall not, either directly or indirectly, employ or seek to employ any person who is at that time (or was within the previous six (6) months) employed by Franchisor or any other CASH PLUS franchisee, or franchise developer without the prior express permission of such employer, or otherwise directly or indirectly induce any such employee to leave his or her employment. The parties agree that in the event of a breach of this covenant, actual damages would be extremely difficult to compute, and accordingly, in the event of such a breach, the breaching party agrees to pay the employer of such person liquidated damages equal to the greater of (a) such person's prior annual salary or (b) the annual salary and any bonus and other benefits paid or to be paid by the breaching party to such person during the first year of employment.

Section 12.11 Crisis Situations.

(a) If an unusual event ("Crisis Situation") occurs in regard to Franchisee's Store that has caused or may reasonably cause harm or injury to its customers, guests or employees or may materially damage the System, the Marks or our reputation (such as robbery, shooting, hostage, threats of or acts causing death or serious bodily injury, sabotage, natural disaster or other newsworthy situation), You agree to (1) contact the appropriate emergency, police or other governmental agencies immediately to assist you in responding to any harm or injury; and then (2) inform us immediately by telephone and/or telefax of the Crisis Situation. You agree that neither you nor any of your employees or representatives will make any internal or external announcement, comment or other communication to the news media regarding the Crisis Situation unless specifically authorized by us or by an authorized public official and will instruct your employees.

(b) You agree that if we deem it necessary or appropriate, we may in our sole and absolute discretion control the manner of handling the Crisis Situation, including, without limitation, conducting all communications with the news media, offering care, benefits and/or immediate compensation for any injured persons and, if reasonably deemed necessary, closing your business temporarily. You acknowledge that in the management of any Crisis Situation, we may engage the services of attorneys, doctors, testing laboratories, experts, public relations agencies and other firms and individuals as we deem appropriate. You agree that you, your employees and all other representatives acting on your behalf will cooperate fully with us in our efforts and activities to respond to any Crisis Situation, will provide access to all information available to you regarding the Crisis Situation and will follow all then existing Crisis Situation procedures developed by us.

ARTICLE Xffl. ACCOUNTING AND RECORDKEEPING

Section 13.1. Daily Reports. Franchisee shall prepare a Revenue and Royalty Calculation report or other such report or form which shall be prescribed by Franchisor pursuant to the Operations Manual, setting forth Gross Sales, and such other data as Franchisor may reasonably request, for each month's business operations at the CASH PLUS Store. With respect to each month during the term hereof, Franchisee shall deliver the Revenue and Royalty Calculation form or other such report or form, assembled for each such month, to Franchisor no later than the 15th day of the following month.

Section 13.2. Financial Statements. Within twenty-five (25) days after the expiration of each calendar month, Franchisee shall furnish Franchisor with a profit and loss statement, the form of which shall be described by Franchisor, of the Franchised Business for such previous calendar month. No later than thirty (30) days after the expiration of each calendar year, Franchisee shall, at its expense, furnish to Franchisor, in such form as may be required by Franchisor pursuant to the Operations Manual or otherwise in writing, a statement of profit and loss and balance sheet of the Franchised Business for the calendar year. All such financial statements shall be prepared in accordance with the format established by Franchisor, in

accordance with generally accepted accounting principles and certified to be true and correct by Franchisee. Franchisor reserves the right to require submission of audited or review financial statements prepared, at Franchisee's expense, by an independent certified public accountant acceptable to Franchisor.

Section 13.3. Accounting Records. Franchisee shall maintain during the term of this Agreement, and shall preserve for at least three (3) years after the dates of their preparation, complete and accurate books and records for all business activities conducted at the Cash Plus Store, prepared in accordance with generally accepted accounting principles, and in accordance with such other requirements as may be set forth in the Operations Manuals or otherwise in writing from time to time.

Section 13.4. Examination of Records. Franchisor or its designated agents shall have the right at all reasonable times to examine and copy, at Franchisor's expense, the books, records, and tax returns of Franchisee and the Franchised Business. Franchisor shall also have the right, at any time, to have an independent audit made of the books of the Franchised Business. If an examination or audit should reveal that any Gross Sales have been understated in any report to Franchisor, then Franchisee shall pay Franchisor the continuing royalty and advertising fees due on such understated Gross Sales immediately upon demand, together with interest at the rate provided in Section 5.7 above. In addition, if an examination or audit reveals that Gross Sales of Franchisee were understated by two percent (2%) or more during the period audited, Franchisee shall reimburse Franchisor for all costs and expenses in connection with the audit. The foregoing remedies shall be in addition to any other remedies available to Franchisor.

Section 13.5. Other Reports. From time to time, Franchisor shall have the right to require Franchisee to produce and provide such other reports as applies to, but not limited to, list of customers, demographic customer profiles, advertising/marketing/public relation data, and any and all business information data that, in Franchisor's sole determination, will contribute to evaluating the performance of the Cash Plus System in general and that of individual Franchisees. Franchisor shall have the right to access Franchisee's computer database system and information to secure such information.

ARTICLE XTV. ADVERTISING, PROMOTION, AND MARKETING

Section 14.1. Contribution. Franchisee shall contribute for advertising, promotion, and marketing purposes an amount equal to three percent (3%) of its monthly gross sales, allocated as follows:

(a) If a System fund ("System Fund") is established at any time or from time to time under the System, Franchisee shall contribute an amount designated by Franchisor, but not to exceed three percent (3%) of gross sales, to the System Fund.

(b) If both a System Fund and a regional advertising fund ("Regional Fund") for the region in which the Franchised Business is located are established, Franchisee shall contribute such amounts as Franchisor may designate from time to time to each fund, but not to exceed a total of three percent (3%) for both.

Section 14.2 Establishment and Direction of the Funds. Franchisee agrees that Franchisor shall have the right, in its sole discretion to establish a System Fund and any number of Regional Funds (collectively, the "Funds"), to be maintained and administered by Franchisor and/or its designees as follows:

(a) Franchisor shall direct all advertising, promotional and marketing programs with sole

discretion over the concepts, materials, and media used in such programs and the placement and allocation thereof. Franchisee agrees and acknowledges that the Funds are intended to maximize general public recognition and acceptance of the Proprietary Marks for the benefit of all CASH PLUS franchisees, and that Franchisor and its designees are not obligated in administering the Funds to make expenditures for Franchisee benefits directly or pro rata from expenditures by the Funds.

(b) The Funds, all contributions thereto, and any earnings thereon shall be used exclusively to meet any and all costs of maintaining, administering, researching, directing, and preparing advertising, promotional and marketing activities (including, among other things, the cost of creating, producing, placing, and conducting television, radio, and print advertising campaigns; creating, producing and distributing promotional materials for use on and off the Store premises, including signs and posters, direct mail, promotional brochures, and outdoor billboard advertising; marketing surveys and research; public relations activities; and employing advertising agencies and consultants to assist therein).

(c) Franchisee shall contribute to the System Fund and any Regional Fund for Franchisee's region by separate checks made payable to each Fund. All sums paid into the Funds shall be kept in accounts separate from the other monies of Franchisor and shall not be used to defray any of Franchisor's general expenses, except for such reasonable administrative costs and overhead as Franchisor may incur in activities reasonably related to the administration and direction of the Funds and advertising programs for Franchisees and the System. The Funds and their earnings shall not otherwise inure to the benefit of Franchisor. Franchisor or its designees shall maintain separate bookkeeping accounts for the Funds.

(d) Franchisor is not obligated to spend all of the contributions to the Funds in any calendar year. If advertising, promotional and marketing costs exceed or fall short of the aggregate advertising ilinds collected for such calendar year, the excess or shortfall shall be carried over to the succeeding calendar year.

(e) Upon the written request of the Franchisee, Franchisor shall provide Franchisee with a written statement indicating on a calendar year basis (or fiscal year basis at Franchisor's sole option) the total amount of the contributions collected and the total costs incurred by Franchisor related to advertising and promotions. If such accounting is made by an independent accounting firm, the expenses thereof shall be paid from the Fund.

(f) Although each Fund is intended to be of perpetual duration, Franchisor maintains the right to terminate any Fund. No Fund shall be terminated, however, until all monies in the Fund have been expensed for the purposes described above or returned to contributors on a prorated basis of their contributions.

(g) Franchisee acknowledges that nothing in this Agreement creates any duty by Franchisor to account to Franchisee for the collection or disposition of the Funds or creates any trust or beneficial interest in the Fund on the part of the Franchisee.

Section 14.3. Approval. All advertising, promotional, and marketing activities conducted by Franchisee in its local market area shall be subject to the prior approval of Franchisor. Franchisee shall submit to Franchisor (by personal delivery or certified mail, return receipt requested) for its prior approval (except with respect to prices to be charged) all local advertising, promotional and marketing plans and samples of all local advertising materials not prepared or previously approved by Franchisor or its designated agents. If written disapproval thereof is not received by Franchisee within ten (10) business days after the date of receipt by Franchisor, such plans and materials shall be deemed approved. If any plans or materials previously approved by Franchisor are later disapproved, Franchisee shall discontinue their use promptly upon notice from Franchisor.

Section 14.4. World Wide Web. Franchisee is strictly prohibited from developing and establishing a World Wide Web site or engaging in any form of World Wide Web advertising, listing, promotion or participation, of any kind, for the purpose of promoting the Cash Plus business, without the express written consent of Franchisor. In the event Franchisee breaches this Section, notwithstanding all other remedies available to Franchisor under this Agreement, Franchisee grants Franchisor the Power of Attorney to take any and all actions deemed necessary by Franchisor to cure the breach.

Franchisee Initials

Section 14.5. Grand Opening Marketing Program. Upon execution of this Agreement, Franchisee shall pay a Grand Opening Marketing Program Fee of Five Thousand Dollars ($5,000.00). This fee will be credited to expenses incurred by Franchisee in the performance of the Grand Opening Marketing Program outlined in the Operations Manual or other written directives by Franchisor. Upon completion of the Grand Opening Marketing Program, which Franchisee agrees to complete no later than sixty (60) days from the date of the Store opening, Franchisee shall provide Franchisor with written evidence of expenditures in the conduct of the Grand Opening Marketing Program and Franchisor shall reimburse Franchisee up to the maximum Grand Opening Marketing Program fee paid by Franchisee. Any balance due Franchisee shall be paid within thirty (30) days following completion of Franchisee's Grand Opening Marketing Program activities, and submission to Franchisor of a final accounting statement prepared by Franchisee. Notwithstanding any other remedies provided for in this Agreement, in the event Franchisee fails to complete the Grand Opening Marketing Program within the prescribed time, Franchisor shall have the right to control and direct the reasonable use of the Grand Opening fee on behalf of Franchisee, without time limitation, for marketing, sales and promotion activities deemed, in Franchisor's sole discretion, to be in the best interests of Franchisee.

ARTICLE XV. COVENANTS NOT TO COMPETE

Section 15.1. Franchisee specifically acknowledges that, pursuant to this Agreement, Franchisee will receive valuable specialized training and confidential information, including, without limitation, information concerning the operational, sales, promotional and marketing methods and techniques of Franchisor and the System. Franchisee covenants as follows:

(a) During the term of this Agreement, except as otherwise approved in writing by Franchisor, Franchisee shall not, either directly or indirectly, or for itself, or through, on behalf of, or in conjunction with any person, persons, or legal entity, own, maintain, operate, engage in, be employed by, or have any interest in any business similar to the Franchised Business (except pursuant to other franchise agreements between Franchisee and Franchisor). Franchisee also shall cause its shareholders, directors, officers, and employees to refrain from such activities. This prohibition applies not only to direct competition, but also all forms of indirect competition, such as consultation of competitive businesses, or any assistance or transmission of information of any kind or nature whatsoever that would be of any material assistance to a competitor. Notwithstanding the foregoing, nothing in this Agreement shall prevent Franchisee or its shareholders, directors, officers or employees from owning for investment purposes, up to an aggregate of five percent (5%) of the outstanding capital stock of any such competitive business provided such business, is a publicly held corporation whose stock is listed and trades on a national or regional stock exchange.

(b) For a period of two (2) years immediately following the termination of this Agreement, Franchisee shall not, either directly or indirectly, have any interest in any business similar to the business franchised hereunder, or engage in any business which offers any services which are competitive with CASH PLUS, either as a proprietor, a partner, shareholder, director, officer, employee, principal, agent, advisor or consultant, at a location within the Franchise Area designated hereunder, or within twenty-five (25) miles of any CASH PLUS Store in existence or planned as of the time of termination or expiration of this Agreement. Franchisee also shall cause its shareholders, directors, officers, and employees to refrain from such activities. This prohibition applies not only to direct competition, but also to all forms of indirect competition, such as consultation for competitive businesses, or any assistance or transmission of information of any kind of nature whatsoever that would be of material assistance to a competitor. Notwithstanding the foregoing, nothing in this Agreement shall prevent Franchisee or its shareholders, directors, officers or employees from owning for investment purposes, up to an aggregate of five percent (5%) of the outstanding capital stock of any such competitive business, provided such business is a publicly held corporation whose stock is listed and traded on a national or regional stock exchange.

Section 15.2. The parties agree that each of the foregoing covenants shall be construed as independent of every other covenant or provision of this Agreement. If all or any portion of a covenant in this Article XV is held unreasonable or unenforceable by a court or agency having valid jurisdiction in an unappealed final decision to which Franchisor is a party, Franchisee expressly agrees to be bound by any lesser covenant subsumed within the terms of such covenant that imposes the maximum duty permitted by law, as if the resulting covenant were separately stated in and made part of this Article XV.

Section 15.3. Franchisee expressly agrees that the existence of any claims it may have against Franchisor, whether or not arising from this Agreement, shall not constitute a defense to the enforcement by Franchisor of the covenants in this Article XV. Franchisee shall pay all costs and expenses (including, without limitation, reasonable legal and accounting fees) incurred by Franchisor in connection with the enforcement of this Article XV.

Section 15.4. Franchisee acknowledges that Franchisee's violation of the terms of this Article XV would result in irreparable injury to Franchisor for which no adequate remedy at law may be available, and Franchisee accordingly consents to the issuance of an injunction prohibiting any conduct by Franchisee in violation of the terms of this Article XV.

Section 15.5. At Franchisor's request, Franchisee shall obtain and deliver executed covenants similar to those set forth in this Article XV from any and all persons who have or may have an ownership interest in Franchisee or in the Franchised Business or who receive or have access to training and other information under the System. Such covenants shall be in a form satisfactory to Franchisor, including, without limitation, specific identification of Franchisor as a third party beneficiary of such covenants with the independent right to enforce them.

ARTICLE XVI. TAXES, PERMITS, INDEBTEDNESS

Section 16.1. Tax Filings and Payments. Franchisee shall prepare and file all necessary tax returns, and shall pay any and all city, county, state and federal sales and use taxes imposed or incurred, or levied or assessed by any governmental body, in connection with any part of this Agreement or any of the services furnished by Franchisee in connection with the Franchised Business, promptly, in full, and when due.

Section 16.2. Disputes. In the event of any bona fide dispute as to Franchisee's liability for taxes assessed or other indebtedness, Franchisee may contest the validity or the amount of the tax or indebtedness in accordance with procedures of the taxing authority or applicable law; however, in no event shall Franchisee permit a tax sale or seizure by levy or execution or similar writ or warrant, or attachment by a creditor, to occur against the premises of the Franchised Business or any improvements thereon.

Section 163. Compliance with Laws, Rules and Regulations. Franchisee shall comply with all federal, state, and local laws, rules, and regulations, and shall timely obtain any and all permits, certificates, or licenses to do business, fictitious name registration, sales tax permits, and other permits, certificates, and licenses that may be required.

Section 16.4. Notification of Proceedings. Franchisee shall notify Franchisor in writing within five (5) 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 instrumentality, that may adversely affect the operation or financial condition of the Franchised Business.

Download PDF: Cash Plus Inc Franchise Agreement 1

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