nt of these materials and supplies will be at the expense of Your business.

SECTION 2.6 ASSISTANCE IN INITIAL SET-UP AND FIRST TIME CLEANING.

We will provide to You experienced field support and accompany You during the initial set-up and first-time cleaning of the very first Account You service pursuant to this Agreement.

SECTION 2.7 CONTINUED ASSISTANCE AND SUPPORT.

Upon the opening of Your Anago Unit Franchise, We will provide to You the following:

(a) Invoicing and Accounting Services. You have agreed to retain Us as Your agent to directly invoice the Accounts that are assigned to You or with respect to which You sign a joinder, and You will forward to Us amounts We are due from Client payments sent or given directly to You. We will invoice the Accounts monthly for the cost of services and supplies You render under the contract with the Account. We will invoice the Accounts we assign to You and maintain those revenue Records for You. You hereby authorize and direct Us to withhold, on Your behalf, any Money due You from servicing the Accounts We assign to You for Royalty Fees, Administration Fees, Advertising Contributions, C-Fees, Note Payments and all other amounts You owe to Us or Our Affiliates and out-of-pocket costs (including attorneys' fees and court costs) We incur in enforcing payment of Accounts on Your behalf. On or before the 20th day but no later than the 25th day of each month following the month in which services were rendered, We will mail to You all monies collected as recorded in the "Due Owner" column of the Owners Report (monthly statement), less monies due Us in accordance with this Agreement. If amounts billed to the Accounts We assign to You are unpaid, You will incur the loss of nonpayment except in

instances where We have guaranteed in writing payments to You. We will take action to enforce payment at Your discretion and expense. You hereby also authorize and direct Us, at Our sole discretion, to initiate action on Our own to recover unpaid amounts of Our fees that would have been collected if the Account had paid as agreed. It is an essential part of Our record keeping that all amounts due from the Client be remitted to Us so that We can maintain accurate and timely records on the amounts due You and the failure to remit any payments received by You will result in significant additional costs to Us. Consequently, failure to forward any funds You receive to the Anago office will result in a Handling Fee of $100 per payment You fail to forward to compensate for this additional expense.

We will only be responsible for the invoicing or collection of any monies due from Accounts assigned to you or to with respect to which you sign a joinder.

• (b) Supply Sources. We will continue to investigate supply sources for better pricing. Although You are not required to purchase any cleaning equipment or supplies from Us, We may be able to obtain lower prices on supplies and equipment and will direct You to that supplier without any obligation on Your part to purchase from them.
• (c) Field Visits. You understand and acknowledge that detail of the System is essential to the Anago brand and all Franchised Units in order to (i) develop and maintain quality brand standards, (ii) increase the demand for services sold by Franchised Units and (iii) protect Anago's name and goodwill. In an effort to further these interests We have the right to perform periodic quality control visits to each building You clean. All brand standards will be inspected and recommendations will be made to You. Our representative will operate from the local Anago office and will be available during normal business hours to answer questions and to assist with Unit Franchise operational questions.
• (d) Assistance with Business Development. We will, at Our discretion and subject to availability, continue to provide You with estimating expertise, custom proposals and references in order to assist development of Your Unit Franchise's business.
• (e) Assistance with Clients' Services. You understand that You are the primary contact for the customer with respect to service complaints and/or requests; however Our local office will accept service calls from Anago Accounts assigned to You and relay these service calls to You in a timely manner.
• (f) Telephone Hotline. We will maintain a telephone "hotline" for informational assistance and emergencies for You and the contact personnel of Accounts assigned to You.
• (g) Local Advertising. We will provide advice on Local Advertising. All advertising bearing Anago marks or logos must receive prior written approval from Us.
• (h) Promotional Literature. We will make available to You promotional literature of the Anago System and all pertinent new developments in the janitorial and related service industries including procedures for improved efficiency to the extent actually known by Us.
  • (i) Periodic Assistance. We may provide advisory assistance in the operation and

promotion of the Anago Unit Franchise as We deem advisable. Advisory assistance may include continuing education and assistance, communication of new developments, improvements in equipment and supplies, and new techniques in advertising, service and management relevant to the operation of Your Anago Unit Franchise through multimedia and service manuals.

• (j) Continuing Education. In order to maintain the highest standards and goodwill for the Anago System, the Proprietary Marks and Franchisees We may provide additional training programs, seminars or continuing education classes at Our principal business facility. If any continuing education is recommended for You by the Regional Office because You have received an unusually high number of complaints from Clients, We may suspend all further business offerings to You until We are satisfied that the deficiencies have been corrected.
• (k) Corrective Measures. If You receive unsatisfactory inspection reports from Us and fail to promptly remedy the deficiencies, We may require those of Your representatives that we specify to attend corrective measures classes as soon as reasonably possible. You are solely responsible for all expenses associated with these programs including the then prevailing standard Orientation fee We charge for these programs and all travel, meals and lodging costs of Your attendees. If You fail the Anago Orientation Program, You must attend corrective measures classes in the areas the Orientation Officer feels are necessary for You to successfully complete the Anago Orientation Program. If You lose or are transferred from an Initial Business Account due to nonperformance or Client dissatisfaction, at our discretion we may require You to attend corrective measures classes in the areas of deficiency (fees apply).

SECTION 2.8 LICENSE OF PROPRIETARY MARKS AND PROPRIETARY PROPERTY.

Subject to the terms of this Agreement (including, without limitation, those contained in Article 5), We grant You a license to use the "Anago" trade name and the other Proprietary Marks and Proprietary Property solely in connection with the operation of Your Unit Franchise.

SECTION 2.9 DUTIES ONLY TO YOU.

All of Our obligations under this Agreement are only to You. No other party is entitled to rely on, enforce, or obtain relief for breach of the obligations either directly or by subrogation.

SECTION 2.10 OUR RIGHT TO DELEGATE DUTIES.

You agree to Our right to delegate duties under this Agreement to a Designee approved by the Franchisor. You must perform Your duties with the Designee to the extent We request, as You must do with Us.

ARTICLE 3 - FEES AND PAYMENTS

SECTION 3.1 TYPES OF FEES.

In consideration of Our signing this Agreement, You must pay to Us the following fees, in addition to any others required under this Agreement, all payable in United States currency at Our principal office:

(a) Initial Fee. You must pay to Us an Initial Fee payable upon signing this Agreement. The Initial Fee is fully earned by Us on receipt and, except as expressly provided otherwise in this Agreement, is nonrefundable upon signing this Agreement. The Initial Fee is uniform as to all Unit Franchisees currently purchasing a Unit Franchise selecting the same Program. The amount of the Initial Fee is based on the Program You select from the 12+ Programs available. The Initial Fee ranges from $5,015 to $26,350 if paid in cash, or $5,900 to $31,000 with down payments ranging from $1,000 to $23,500 if financed. You have selected Program number _____, and have chosen to:

Initial One:

Should a part of the Initial Fee be financed, the scheduled monthly payments for the amount financed will begin 120/150/180+ days after the beginning of the Initial Offering Period or when You have been offered Initial Business totaling at least 50% of the Initial Business due You under this Agreement. All financing will be at a 14% interest rate.

• (b) Royalty Fee. You will pay a continuing monthly nonrefundable Royalty Fee during the Term of 10% of collected monthly Gross Revenues. We will retain the Royalty Fee from the payments Clients make and remit the balance to You.
• (c) Administration Fee. You will also pay a continuing monthly nonrefundable Administration Fee during the Term of 8% of collected monthly Gross Revenues, to reimburse Us for Our costs as your agent, of invoicing, receiving, and disbursement of funds from Accounts we assign to You. We will retain the Administration Fee from the payments Clients make and remit the balance to You.
• (d) Advertising Contribution. You must pay us a monthly Fund (as defined in Section 7.2) advertising contribution of 2% of monthly Gross Revenues. We reserve the right to increase the advertising contributions provided the increased monthly advertising contribution will not exceed 2% of monthly Gross Revenues. Each advertising contribution is due on the same date and calculated for the same periods as the Royalty, and will be payable in the same manner.
• (e) Insurance Program Fees. If You elect to participate in Our insurance program, if available, rather than purchase on Your own the insurance required under ARTICLE 9, You agree

to pay Us a fee for our efforts Currently 8% (5% for General Liability & 3% for Workers' Compensation) of monthly Gross Revenues, (subject to change in our discretion), plus $2.00 per invoice per Client serviced. If You do not obtain insurance through Us, You are still liable for a charge of 2% of Gross Revenues for insurance administration and policy verification.

• (f) C-Fees. For the assignment and assumption of any additional Accounts We offer to You and You accept under Subsection 2.1(b), You will pay to Us a non-refundable fee ("C-Fee"). The C-Fee is currently equal to 3.0 times the Gross Monthly Billing of additional Accounts, but we reserve the right, on 30 days' notice to You, to increase it to 5.0 times the Gross Monthly Billing of additional Accounts. The C-Fee and is payable in full at the time of the assumption of the Account or may be financed by Us at Our sole discretion under the Terms listed below in this Section 3.1(f) (Subsections (i) through (xv)).
  • (i) For any additional Account We offer to You and You accept having Gross Monthly Billing of up to and including $2,000, the C-Fee is payable: (a) 20% upon assumption of the Account; and (b) the balance payable in 11 equal monthly installments including interest at 14% per year.
  • (ii) For any additional Account We offer to You and You accept having Gross Monthly Billing from $2,001 up to and including $3,000, the C-Fee is payable: (a) 20% upon assumption of the Account; and (b) the balance payable in 11 or 17 equal monthly installments including interest at 14% per year. Should, for any reason, the Client contract not be renewed after 12 months, and the financing was for 17 months, the remaining balance is immediately due.

Source: Item 23 — RECEIPTS (FDD pages 62–298)