utstanding Client experience (collectively the "Services").

For mutual promises expressed in this Agreement, along with other valuable consideration, the receipt of which is acknowledged, Ledgers and Franchisee (collectively "the Parties") will be bound as follows:

Scope

1.1. Franchise Relationship

A. Grant of Franchise

Ledgers grants to you the right to operate a company ("Franchise Business") using our System and our Marks to deliver Services within the geographic boundaries identified in Schedule 1 (the "Territory") during the Term by and through the Franchisee Business Entity identified on the Summary Page and signature page of this Agreement (or as a sole proprietor or partnership if there is no business entity) and in conformity with the terms and conditions of this Agreement.

B. Independent Contractors.

Your relationship with us is that of an independent contractor. This Agreement does not create a partnership, joint venture, or any other entity between the Parties. Neither Party has a fiduciary duty or other special duty respect to the other Party. You are not a third-party beneficiary to any contract between us and any other franchisee.

C. Your Employees

As a separate Franchise Business, you have sole and exclusive control over your employees. Neither you nor your employees and agents may make a claim as employees or agents of us for any purpose

including participation in an employee benefit plan, stock option program, or workers compensation law.

D. No Unauthorized Commitments.

Similarly, you will not make any promises, guarantees or warrantees to any third party, that would create a binding obligation for us without our prior written consent.

1.2. Term and Renewal

A. Term.

This Agreement will commence upon its Effective Date and will last for a term of ten (10) years (the "Term").

B. Renewal and Subsequent Renewals.

Upon the completion of the Term, or a renewal Term as the case may be, if you are in compliance with this Agreement and meet other conditions for renewal, you may enter into a new contract, on the then-current form. We will not change material Terms including your Territory in your renewals. If you wish to renew this Agreement, you must:

• 1. notify us in writing at least 90 days before the expiration of this Agreement;
• 1. execute a general release of all claims you may have against us (See Schedule 6);
• 1. pay any required renewal fee (if any);

1.3. Territory

You will receive a geographic area within which we promise not to establish either a companyowned or franchised outlet selling the same or similar goods or services under the same or similar trademarks or service Marks. A geographic area will normally include a population of 65,000 residents and at least 3,500 business as defined by our marketing programs, as determined by the U.S. Census Bureau, or other mapping data that we feel is reliable. Schedule 1 defines your "Territory" by zip codes, political, or geographic boundaries.

We offer an area representative franchise opportunity through its own franchise disclosure document. Area representatives find, solicit, and recruit prospective franchisees to operate a franchised business like yours. Area representatives may also support franchised business within their area representative territory through marketing and operating assistance. Your Territory may now, or in the future, be within an area representative's territory. We will provide you with contact information for the area representative with area representative rights in the Territory upon request (if applicable to you).

You may not provide Services to Clients outside of your Territory without our written permission. We may grant or deny permission in our sole judgment. In no event will you be permitted to offer Services to any Client within a territory owned by another unit franchisee. Should we grant permission, it will be freely revocable by us for any reason or no reason at all. Further, you must immediately stop providing Services to any Client located outside of your Territory immediately upon notice that a new franchisee has purchased such territory. Furthermore, if permission is granted, you must immediately stop providing Services to any such Client.

1.4. Facility

A. Initial Location

You must begin operations and be open for business no later than twelve (12) months from the Effective Date. You may operate your Ledgers office from your home provided that you maintain a virtual office to meet clients as required, or you can operate from a commercial office location within your Territory. If you fail to open within twelve (12) months of the Effective Date, then we can terminate without any refund to you.

B. Reserved

1.5. Additional Territories

We may grant you additional franchise territories if we feel you have the time, energy, capital, and management structure to be able to successfully open and operate more outlets. You do not have rights of first refusal, or similar rights to acquire additional territories.

Source: Item 22 — CONTRACTS (FDD page 46)