essors and assigns. In the event of any assignment, sale, merger or change in ownership or structure of ATFC, the resulting entity shall step into the place of ATFC, without any additional consent of or notice to the FRANCHISEE, as if the term ATFC were defined in this Agreement to include such entity.

XII. DEFAULT AND TERMINATION

A. Termination By ATFC.

• 1. 30 Day Opportunity to Cure. ATFC may at its option, and without prejudice to any other rights or remedies provided for in this Agreement or at law or in equity, terminate this Agreement for "good cause". Without limitation as to other situations, good cause for termination also exists if FRANCHISEE or any guarantor of this Agreement:
  • (1) Does not substantially perform any and all of the lawful terms, conditions, and obligations of this Agreement, or the mandatory requirements under the Confidential Operations Manual; or
  • (2) Loses possession of the premises at which the Agency is located and fails to secure a suitable site for relocation which ATFC consents to within three (3) months thereafter; or defaults under the terms of its lease for the premises; or
  • (3) Misrepresents any of the billings upon which the Fees are calculated that FRANCHISEE is required to report to ATFC; or
  • (4) Loses any permit or license which is a prerequisite to the operation of the Agency for a period of five (5) days; or
  • (5) Misuses any of the Marks or confidential information, or engages in conduct which reflects unfavorably, in ATFC's opinion upon the operation, maintenance, goodwill and/or reputation of the franchise Systems; or
  • (6) Is adjudged bankrupt, becomes insolvent, or makes a general assignment for the benefit of creditors (subject to Section XII.A.3.(d) below); or
  • (7) Commits any other act which constitutes good cause under applicable state law or court decisions; or
  • (8) Fails to provide ATFC with the timely reports of sales and other statistical and business information as required under this Agreement; or
  • (9) Engages in any illegal, fraudulent, unfair or deceptive business practice, which, in ATFC's opinion, adversely affects the operation, maintenance, or goodwill of the franchise; or
  • (10) Fails to keep the Agency open for a period of seven (7) consecutive days without justifiable cause; or
• (11) Fails to pay its lawful debts and any and all taxes when same become due; or
• (12) Fails to properly service customers in accordance with ATFC's standards and within the spirit and intent of this Agreement. (By way of illustration and not limitation, a failure to properly service customers, will occur if at least three unresolved customer complaints are made regarding the services rendered by the Agency within any consecutive ninety (90) day period because of dissatisfaction with services provided by the Agency.); or
• (13) Makes any material misrepresentations in any information or documents FRANCHISEE provides ATFC in order to purchase the franchise; or
• (14) Makes an assignment or Transfer in violation of this Agreement; or
• (15) Diverts or collects any fees from customers in violation of Section VII.F, above, which provide that customer billings are to be done by ATFC; or
• (16) Defaults under the terms of the Funding Agreement and/or Processing Agreement.

Subject to applicable law and except as otherwise provided in this Agreement, ATFC will give the FRANCHISEE at least thirty (30) days' prior written notice of termination, [unless a longer period of time is required or shorter period of time is permitted by applicable state law]. The notice shall state the reason(s) for termination and shall provide that the FRANCHISEE has thirty (30) days from the date of said notice to correct any claimed deficiency. If the deficiency is corrected within thirty (30) days, the notice shall be void. If the deficiency is not corrected within said thirty (30) day period, ATFC may terminate this Agreement by giving written notice to FRANCHISEE of said termination.

• 1. 10 Day Opportunity to Cure. ATFC may also terminate this Agreement for nonpayment of sums due to ATFC or ATFC's affiliates or suppliers; failure of FRANCHISEE to open the Agency for business within four (4) months after ATFC's acceptance of this Agreement or failure of FRANCHISEE to operate both the Permanent Placement Business and Temporary Service Business within four (4) months after FRANCHISEE signed this Agreement. If termination is based on the foregoing, the FRANCHISEE shall be entitled to written notice of default, but ATFC shall [if permitted by applicable law] be required to grant FRANCHISEE only ten (10) days to remedy such default. ATFC has the right to termination this Agreement upon providing FRANCHISEE written notice of said termination.
• 1. Without Opportunity to Cure. Notwithstanding anything contained herein to the contrary, if state law permits, ATFC shall be permitted to terminate the franchise immediately and without notice when the basis or grounds for cancellation is: (a) conviction of a felony or any other criminal misconduct which, in ATFC's opinion materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (b) fraudulent activity which, in ATFC's opinion, materially and adversely affects the operation, maintenance, reputation, or goodwill of the franchise; (c) abandonment of the franchise; (d) bankruptcy or insolvency of the FRANCHISEE; (e) the termination of any other agreement between FRANCHISEE and ATFC or its affiliates; (f) repeated failure or refusal to comply with the lawful provisions of this Agreement, (i.e., three (3) or more times in any twelve (12) month period) whether or not such failures or refusals are corrected after notice; or (g) any other act or omission which permits termination without notice and/or an opportunity to cure under applicable state law.
• B. Termination By FRANCHISEE. FRANCHISEE may terminate this Agreement if ATFC shall materially default in performance of any terms and conditions in this Agreement, after giving ATFC written notice within thirty (30) days thereof, and if the default has not been corrected within thirty (30) days after such notice, or if such default is incapable of being cured within thirty (30) days, such longer period of time as is necessary to cure such default, provided that ATFC has commenced curing such default within said thirty (30) day period and diligently pursues a cure.
• C. Consequences of Termination. Upon termination or expiration of this Agreement, for any reason whatsoever, all of FRANCHISEE's rights hereunder shall terminate. FRANCHISEE shall immediately thereafter discontinue use of all Marks, signs, colors, structures, printed goods and forms of advertising indicative of ATFC's business and return any copyrighted materials which have been provided to FRANCHISEE by ATFC, and if ATFC requests, shall assign its telephone numbers to ATFC, clients, candidates, customers and the employee roster and execute any and all documents necessary to do so.

Source: Item 22 — CONTRACTS (FDD pages 33–34)