What constitutes a material breach of an agreement with Clear Pest Pros or its affiliates?

h deficiency is not cured within five (5) days, or you do not record in the Clear Pest Pros Software funds paid to you for jobs completed within 48 hours of their receipt, or you default on any loan made to you by us or our preferred lender, if applicable, in connection with your Clear Pest Pros Business;

• 1. You fail, within 15 days after notification of non-compliance by federal, state or local government authorities to comply with any law or regulation applicable to the Clear Pest Pros Business;
• 1. You fail to comply with any part or condition, warranty, or certification requirement in this Agreement, the Clear Pest Pros owners' intranet website, Operations Manual and/or other Clear Pest Pros confidential materials;
• 1. You fail to comply with modifications to System Standards on the Clear Pest Pros owners' intranet website, or in the Operations Manual within the required time period;
• 1. You fail to make payments on the vehicle resulting in repossession and you do not have a vehicle that meets our standards to operate the Business;
• 1. You fail to receive our prior written approval and use products or materials that do not meet our System Standards and/or do not promptly discontinue use after written notice from us;
• 1. You fail to timely provide us with any report, statement, or return required by this Agreement;
• 1. You fail to service all Customers in a manner consistent with our System Standards and reputation and you fail to cure such inconsistency;
• 1. You market or advertise in the Clear Pest Pros Corporate Territory without permission;
• 1. You fail to immediately endorse and deliver to us any payments due to us from any third party that is erroneously made to you;
• 1. If you fail to maintain the prescribed months, days or hours of operation at the Clear Pest Pros Business;
• 1. If you fail, in our sole discretion, to personally supervise day-to-day operation of the Clear Pest Pros Business or fail to employ a sufficient number of qualified, competent personnel as we require from time to time;
• 1. If you fail to maintain the strict quality controls reasonably required by this Agreement and/or the Operations Manual;
• 1. You conduct yourself in a manner that, although not criminal, reflects adversely on the System, the Marks, or the products offered through the System; or
• 1. You fail to procure or maintain any licenses, certifications, or permits necessary for the operation of your Clear Pest Pros Business.

We also have the right to terminate this Agreement after providing notice and a 30 day cure period if you fail to perform or comply with any one or more of the terms or conditions of this

Agreement or the Operations Manual not specifically contained in Section 12.A above; including, without limitation, any warranty, or certification of this Agreement, and any System Standard or other provision in the Clear Pest Pros owners' intranet website or the Operations Manual.

In addition to our right to terminate this Agreement, and not in lieu of such right, or any other rights we may have against you, upon a failure to cure any default within the applicable time period (if any), we have the right, but not the obligation, to: (1) charge the Non-Compliance Fee; (2) reduce the size of your Territory or permit other franchisees or Company Stores to provide the Services and Products with your Territory; and/or (3) enter upon the Clear Pest Pros Business premises and exercise complete authority with respect to the operation of the Clear Pest Pros Business until such time as we determine, in our sole discretion that the default has been cured, and you are otherwise in compliance with this Agreement. In the event we exercise the rights described in this Section, you must pay us a reasonable management fee of 10% of Gross Sales and reimburse us for all reasonable costs and overhead, if any, incurred in connection with our operation of your Clear Pest Pros Business including, without limitations, costs of personnel for supervising and staffing the Clear Pest Pros Business and their travel and lodging accommodations, plus a 20% service charge.. This fee is in addition to the payment of the Royalty and all other fees due under this Agreement during the time we exercise our rights under this Agreement. If we undertake to operate the Clear Pest Pros Business pursuant to this Section, you agree to indemnify and hold us (and our representative(s) and employees) harmless from and against any fines, claims, suits or proceedings that may arise out of our operation of the Clear Pest Pros Business.

Our delay in exercising or failing to exercise any right or remedy under this Agreement or our acceptance of any late or partial payment due hereunder will not constitute a waiver of any of our rights or remedies against you.

D. NON-COMPLIANCE FEE.

We have the right to assess then-current fine amount for conduct that violates the terms of this Agreement, including, but not limited to, advertising, marketing, soliciting or servicing in any way, any Customers or Customer Service Locations outside the Territory, without our prior written consent, or servicing residential Customers without our express written consent ("Out-of-Territory Conduct"), use of unapproved equipment in operating the Franchised Business, selling or using unapproved Products or Services through the Franchises Business, misuse of the Marks, use of unapproved marketing materials, and other violations of franchisee's duties under the Franchise Agreement. The Non-Compliance Fee is currently up to $5,000 or the cost of the job (in our discretion) per violation, or in the case of Out-of-Territory Conduct, $500 or the total invoice for the job (in our discretion), per instance. This fee may be in lieu or in connection with default and/or terminate your Franchise Agreement, and other available remedies set forth in this Agreement for your default.

13. POST TERMINATION OBLIGATIONS.

A. PAYMENT OF AMOUNTS OWED TO US.

You promise to pay to us, on the effective date of termination or expiration of this Agreement, or at any later date that the amounts due to us are determined:

• 1. all Royalties, Referral Fees, promissory note balance(s), Late Report Fees, Late Payment Fees, NSF Fees, Interest Fees, or any other fees, amounts or interest owed to us; and
• 1. upon termination for any default, the actual and consequential damages, costs, and expenses (including reasonable attorneys' and experts' fees) incurred by us as a result of your default.

The obligation to pay said sums will create a lien in favor of us against any and all of the personal property, furnishings, equipment, signs, fixtures, and inventory of the Clear Pest Pros Business and/or against any moneys we hold or otherwise come to our possession.

Any transferee (or purchaser of all or substantially all of the assets of the Clear Pest Pros Business) shall be liable for payment of these items if you do not timely pay them. Provided, however, the foregoing sentence will not release or discharge you from your obligations to pay us pursuant to this Section and/or to indemnify or reimburse the transferee or purchaser pursuant to the applicable purchase or transfer agreement.

B. MARKS.

Upon the termination or expiration of this Agreement, you promise to:

• 1. strictly comply with, observe, and abide by all of the post-termination provisions of this Agreement, including those as set forth in Sections 5, 6 and 13.D of this Agreement;
• 1. neither directly nor indirectly represent to the public that any other business you may then own or operate, is or was operated as, or was in any way connected to, the System;
• 1. not hold yourself out or advertise in any context that you are a present franchisee or were a former franchisee of ours;
• 1. immediately refrain from engaging in any business relationship with any contacts with Customers or former Customers of the Clear Pest Pros Business, whether with respect to collection of accounts receivable, providing Services, or for any other purpose whatsoever;
• 1. assign any and all accounts receivable to us for collection, unless all Royalties and other payment obligations to us are paid in full. In connection with this assignment, you appoint us as attorney-in-fact to engage in these collection activities and you specifically refrain from engaging in any of these collection activities. We promise to employ good faith efforts, including where appropriate in our sole and exclusive judgment the commencement of legal proceedings to collect the accounts receivable. We have no duty or obligation to you to accomplish the collection of such accounts receivable. We will remit to you any of these sums collected after first deducting all moneys owed to us and our costs of collection;
• 1. immediately cease operation under this Agreement and not operate or do business under any name or in any manner which might tend to give the general public the impression that you are operating a Clear Pest Pros Business, or any confusingly similar business;
• 1. take the action required to cancel all DBAs or equivalent registrations relating to your use of any Mark;
• 1. deliver to us, within seven (7) days, all electronic and hard copies of Customer Information;

Source: Item 22 — CONTRACTS (FDD pages 67–68)