Under what condition regarding defaults under the Franchise Agreement will a Chem Dry franchisee not be eligible for renewal?

To qualify for a renewal franchise, FRANCHISEE and its Owners must satisfy these conditions:

• a. FRANCHISEE (and each of its Owners) have not defaulted under this Agreement and failed to cure the default within the time permitted under this Agreement during its Term;
• b. Franchisee (and each of its required Owners) have successfully completed all of CDI's then current training courses;
• c. FRANCHISEE (and each of its Owners) are, on the date FRANCHISEE gives its notice of election, in compliance with this Agreement, including without limitation any requirements regarding servicing national accounts; and
• d. FRANCHISEE agrees (regardless of cost) in the notice of election to add or replace specific Operating Assets, including without limitation any proprietary equipment associated with the Franchise, the business vehicles and other equipment), and otherwise modify the BUSINESS as CDI requires to comply with the System Standards then applicable for new entry CHEM-DRY Businesses.
• 1. If FRANCHISEE and each of its Owners are not, both on the date FRANCHISEE gives CDI written notice of FRANCHISEE'S election to acquire a renewal franchise and on the date on which the Term of the franchise expires, in compliance with this Agreement, FRANCHISEE acknowledges that CDI has no obligation to grant FRANCHISEE a renewal

franchise, whether or not CDI had, or chose to exercise, the right to terminate this Agreement during its term under Section 15.

1. Notwithstanding anything to the contrary in this Agreement, at any time during the term of this Agreement, FRANCHISEE fails to be in compliance with this Agreement or any other agreement between FRANCHISEE and CDI, CDI may refuse to grant a renewal franchise by delivering a notice of CDI's refusal to grant a renewal franchise, stating the reasons for such refusal. If CDI'S notice indicates that CDI will permit FRANCHISEE to obtain a renewal franchise, CDI may condition such right upon FRANCHISEE'S continued compliance with this Agreement, including being current in financial obligations to CDI, and any other agreement between CDI and its affiliates and FRANCHISEE.

Source: Item 23 — Receipts (FDD pages 68–264)