What are the consequences if a City Wide franchisee is in default of any agreement with City Wide?

• 14.2 Termination After Failure to Cure.

Franchisee will be deemed to be in default under this Agreement and CITY WIDE may elect to terminate this Agreement and all rights granted under this Agreement if within thirty (30) days after CITY WIDE sends Franchisee written notification setting out the nature of the default ("Notice to Cure"), or within any such period set forth in this Agreement or permissible by law, Franchisee does not correct the default to CITY WIDE's satisfaction:

• 15.2 At the end of the Term of this Agreement, whether because of an event of default pursuant to Section 14 above or otherwise, Franchisee will immediately do each of the following:

• 15.2.1 Cease to be a franchisee of CITY WIDE and cease to operate the former Franchised Business or any other business using any part of the System or Marks.

After that Franchisee will not, directly or indirectly, represent to the public that the former Franchised Business is or was operated in any way connected with the System or hold itself out as a present or former franchisee of CITY WIDE.

• 15.2.2 Pay all sums owing to CITY WIDE.

Upon termination of this Agreement for any default by Franchisee, such sums will include lost Royalties Fees, Marketing Fees and other fees for the remainder of the Term, and other damages, costs, and expenses incurred by CITY WIDE as a result of the default.

• 15.2.3 Cease to use and destroy all tangible copies of the Operating Manual, the Software, and all other Confidential Information together with all equipment and other property owned by CITY WIDE.

Franchisee will retain no copy or record of any of the foregoing; provided, however, that Franchisee may retain Franchisee's copy of this Agreement, a copy of any correspondence between the parties, and a copy of any other document which Franchisee needs for compliance with any applicable provision of law.

• 15.2.4 Change all phone numbers then listed under any Mark owned by CITY WIDE and assign to CITY WIDE the right to use all such phone numbers.

• 15.2.5 Provide CITY WIDE with a complete list of Franchisee's employees, subcontractors and suppliers, their respective addresses, and any outstanding amounts Franchisee may owe to any third party.

• 15.2.6 Provide CITY WIDE with a complete list of all customers for the past three years, subcontractors, contacts names, and the like, including all address and telephone information for each name listed.

Additionally, Franchisee shall provide upon CITY WIDE's request, copies of all of Franchisee's files, correspondence, billing records, bid sheets, and all other records of the Franchised Business including, but not limited to, all client agreements, all investment recaps, and all Schedule A details of service.

• 14.8 Right to Enter and Operate.

In addition to CITY WIDE's right to terminate this Agreement, and not in lieu of such right or any other rights against Franchisee, if Franchisee has not cured a default under this Agreement within the time allotted by CITY WIDE after receipt of the Notice to Cure from CITY WIDE, CITY WIDE may, at its option, enter the premises of the Franchised Business and exercise complete authority with respect to its operation until such time as CITY WIDE determines that Franchisee's default has been cured and that there is compliance with the requirements of this Agreement.

Franchisee specifically agrees that a Representative (as defined in Section 16) of CITY WIDE may take over, control, and operate the business, and that Franchisee will pay CITY WIDE a service fee of not less than Three Hundred Dollars ($300) per day plus all travel expenses, room and board and other expenses reasonably incurred by such Representative so long as it will be required by the Representative to enforce compliance.

Franchisee further agrees that if, as herein provided, CITY WIDE temporarily operates for Franchisee the business franchised herein, Franchisee will indemnify and hold harmless CITY WIDE and any Representative of CITY WIDE who may act hereunder, respecting any and all acts and omissions which CITY WIDE may perform, or fail to perform as regards the interests of Franchisee or third parties.

• 14.9 If this Agreement is terminated by the Franchisor due to an uncured breach by Franchisee, Franchisee will forfeit all rights Franchisee may have otherwise had in and to any Royalty Rebate if the Agreement were not terminated.

SECTION 15. Post-Termination Obligations of Franchisee.

• 15.1 Termination of this Agreement will not relieve Franchisee of any right, duty, covenant, or obligation relating to the use of the Marks, the Software, the confidentiality and use of the Confidential Information, the maintenance of statements and records and inspection and auditing of records, covenants relating to non-competition, and other Franchisee covenants, Franchisee's post-term obligations, indemnification, and independent contractor status, the availability of equitable relief and payment of costs and expenses, governing law and dispute resolution, severability and construction, and acknowledgments under the Franchise Agreement or any other Agreement.

• 24.3 No failure of CITY WIDE to exercise any power reserved to it by this Agreement and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver of CITY WIDE's right to demand exact compliance with any of the terms herein. No waiver or approval by CITY WIDE of any particular breach or default by Franchisee nor any delay, forbearance or omission by CITY WIDE to act or give notice of default or to exercise any power or right arising by reason of such default hereunder, nor acceptance by CITY WIDE of any payments due hereunder shall be considered a waiver or approval by CITY WIDE of any preceding or subsequent breach or default by Franchisee of any term, covenant or condition of this Agreement.
• 24.4 Whenever Franchisor reserves discretion in a particular area or where Franchisor agrees to exercise Franchisor's right reasonably or in good faith, Franchisor will satisfy Franchisor's obligations whenever Franchisor exercises reasonable business judgment ("Reasonable Business Judgment") in making Franchisor's decision or exercising Franchisor's rights. Franchisor's decisions or actions will be deemed to be the result of Reasonable Business Judgment, even if other reasonable or even arguably preferable alternatives are available, if Franchisor's decision or action is intended, in whole or significant part, to promote or benefit the System generally even if the decision or action also promotes Franchisor's financial or other individual interest. Examples of items that will promote or benefit the System, include, without limitation, enhancing the value of the Marks, improving customer service and satisfaction, improving product quality, improving uniformity, enhancing, or encouraging modernization, and improving the competitive position of the System.

• 3.12 Verification.

CITY WIDE has the right to establish reasonable procedures for verifying figures and collecting Royalty Fees, Marketing Fees, and all other recurring fees.

• 3.13 Order for Application of Fees.

CITY WIDE will apply for Franchisee's payments under this Section 3 to Franchisee's obligations to CITY WIDE in such order as CITY WIDE may designate from time to time.

Franchisee agrees that Franchisee may not designate an order for application of any fees different from that which CITY WIDE designates.

Franchisee expressly acknowledges and agrees that CITY WIDE may accept fees Franchisee pays under different instructions without any obligation to follow such instructions, even if Franchisee makes such payment conditional on CITY WIDE following such instructions.

This provision may be waived only by a written agreement signed by CITY WIDE, which written agreement must be separate and distinct from the check or other document constituting payment.

Source: Item 22 — CONTRACTS (FDD page 65)