Document:

Exhibit 10.1 
    

    

    

    
      CURAFLO®
    

    
      FRANCHISE AGREEMENT FOR THE COMMERCIAL MARKET 
    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    	
           
        	
           
        	
          Franchisee:
        	
           
        
	

        	

        	
          Territory:
        	
           
        
	

        	

        	

        	
          (See Appendix A for full description)
        
	

        	

        	
          Effective Date:
        	
           
        

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      TABLE OF CONTENTS 
    

    

    

    	
          
            SECTION
          

        	

        	
          
            PAGE
          

        
	
           
        
	
          1
        	
          RIGHTS GRANTED
        	
          2
        
	
           
        
	
          2
        	
          TERM; SUCCESSOR FRANCHISE AGREEMENTS
        	
          4
        
	
           
        
	
          3
        	
          FEES
        	
          5
        
	
           
        
	
          4
        	
          COMMENCEMENT OF OPERATION
        	
          7
        
	
           
        
	
          5
        	
          TRAINING AND COMMERCIAL MARKET CERTIFICATION
        	
          8
        
	
           
        
	
          6
        	
          OPERATIONS
        	
          10
        
	
           
        
	
          7
        	
          COMMUNICATIONS, BUSINESS RECORDS, AND REPORTING
        	
          15
        
	
           
        
	
          8
        	
          MARKETING
        	
          17
        
	
           
        
	
          9
        	
          MARKS
        	
          20
        
	
           
        
	
          10
        	
          OPERATING MANUALS
        	
          21
        
	
           
        
	
          11
        	
          YOUR ORGANIZATION
        	
          21
        
	
           
        
	
          12
        	
          TRANSFERS BY US
        	
          22
        
	
           
        
	
          13
        	
          TRANSFERS BY YOU
        	
          22
        
	
           
        
	
          14
        	
          GENERAL RELEASE
        	
          25
        
	
           
        
	
          15
        	
          COVENANTS
        	
          25
        
	
           
        
	
          16
        	
          TERMINATION
        	
          27
        
	
           
        
	
          17
        	
          OBLIGATIONS ON TERMINATION OR EXPIRATION
        	
          29
        
	
           
        
	
          18
        	
          RELATIONSHIP OF THE PARTIES
        	
          31
        
	
           
        
	
          19
        	
          INDEMNIFICATION
        	
          32
        
	
           
        
	
          20
        	
          CONSENTS AND WAIVERS
        	
          32
        
	
           
        
	
          21
        	
          NOTICES
        	
          32
        
	
           
        
	
          22
        	
          ENTIRE AGREEMENT
        	
          33
        
	
           
        
	
          23
        	
          SEVERABILITY AND CONSTRUCTION
        	
          33
        
	
           
        
	
          24
        	
          DISPUTE RESOLUTION
        	
          34
        
	
           
        
	
          25
        	
          MISCELLANEOUS
        	
          35
        
	
           
        
	
          26
        	
          ACKNOWLEDGMENTS
        	
          36
        
	
           
        
	
          APPENDIX A - FRANCHISE INFORMATION
        
	
           
        
	
          PERSONAL GUARANTEE
        

    
      
        

        

      

      
        
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      FRANCHISE AGREEMENT
    

    

    

    
      This Franchise Agreement (“Agreement”) is made as of this ___ day of
      _____________ (“Effective Date”) by and between CuraFlo Franchising Inc.
      (“CuraFlo”, “we”, “us” or “our”), a Delaware corporation with a
      principal business address at 23400 Commerce Park Road, Beachwood, Ohio
      44122 and ____________________ (“Franchisee” “you” or “your”), a(n)
      _______________________ with a principal business address at
      _______________________.
    

    
      RECITALS
    

    
      We are in the business of franchising others to operate CuraFlo®
      businesses (“CuraFlo Businesses”) which solve pipe problems such as
      pinhole leaks, slab leaks, rusty or discolored water, and poor water
      flow without removing walls or digging to replace the pipes.
    

    
      We have developed a distinctive set of specifications and operating
      procedures for CuraFlo Businesses (collectively “System”), the
      distinguishing characteristics of which include the use of the CuraFlo
      Engineered Flow Lining SystemTM consisting of proprietary equipment and
      processes to clean potable water and drain, waste and vent pipes that
      are between one half (1⁄2) inch and four (4) inches in diameter and then
      to line those pipes with our proprietary epoxy; professional image and
      rigid customer service standards; our techniques for training qualified,
      certified technicians; our techniques for marketing services; our web
      site; and the accumulated experience reflected in our training program
      and operating procedures. We may change, improve, add to, delete from,
      and further develop the elements of the System from time to time.
    

    
      We identify the businesses operating under the System by means of the
      CuraFlo name and certain other trademarks, service marks, trade names,
      signs, logos, and other indicia of origin that we have designated, or
      may in the future designate for use with the System (collectively,
      “Marks”).
    

    
      We offer franchises for CuraFlo Businesses that offer products and
      services to (a) multi-family communities comprising more
      than four units; and (b) buildings that are more than ten
      thousand (10,000) square feet in size that are owned by a commercial
      enterprise for commercial purposes and buildings that are owned by a
      governmental entity (“Commercial Market”).
    

    
      You wish to be granted the opportunity to develop and operate a
      franchised CuraFlo Business for the Commercial Market (“Franchised
      Business”).
    

    
      You understand and acknowledge the importance of our high standards of
      quality, appearance, and service and the necessity of operating your
      Franchised Business in accordance with this Agreement, our confidential
      operating manuals (“Manuals”) and our standards, specifications and
      procedures.
    

    
      Subject to the terms and conditions of this Agreement, we are willing to
      grant to you the opportunity to develop and operate a Franchised
      Business in the territory specified in Appendix A (“Territory”).
    

    
      
        

        

      

      
        
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      NOW THEREFORE, in consideration of our grant to you of the right
      to operate a Franchised Business and perform work under the System in
      the Territory during the term of this Agreement, as well as the mutual
      covenants, agreements and obligations set forth below, and other good
      and valuable consideration, the receipt and sufficiency of which are
      hereby acknowledged, the parties agree as follows:
    

    
      1        RIGHTS GRANTED
    

    
               1.1       Grant; Limited Territorial Rights 
    

    
      1.1.1 We hereby grant to you the right to use the Marks and the
      System to operate a Franchised Business in the Territory from the
      location specified in Appendix A (“Franchised Location”). During the
      Term (as defined in Section 2.1), we and our affiliates will not
      operate, or license others to operate, any other CuraFlo Business for
      the Commercial Market within the Territory provided that you are in
      compliance with this Agreement and any other agreements between you and
      us or our affiliates.
    

    
      1.1.2 Your use of the System is limited to use of the CuraFlo
      Engineered Flow Lining System for use with potable water and drain,
      waste and vent pipes that are between one half (1⁄2) inch and four (4)
      inches in diameter for the Commercial Market which includes: (1) multi-family
      communities comprising more than four units; and (2) buildings
      that are more than ten thousand (10,000) square feet in size that are
      owned by a commercial enterprise for commercial purposes and buildings
      that are owned by a governmental entity. You may not, without our prior
      written consent, use the System to perform work at Residential Market
      structures (which include structures that are single family residences,
      multi-family residences of up to four (4) units, and structures owned by
      a commercial enterprise for commercial purposes that are less than
      twenty thousand (20,000) square feet in size and that do not exceed
      three (3) stories above ground), Industrial and Municipal Market
      facilities (which include non-potable water applications, marine,
      industrial and municipal infrastructure, government infrastructure
      (including municipal water mains) and process piping) or at buildings
      for which you do not have the proper CuraFlo certification as specified
      in Section 5.3.
    

    
      1.1.3 We reserve to ourselves all rights to use and license the
      System and the Marks other than those expressly granted under this
      Agreement. This Section 1.1 does not prohibit us or our affiliates from: (1) operating
      or licensing others to operate, during the Term, CuraFlo Businesses
      other than Commercial Market CuraFlo Businesses in any area, including
      inside the Territory; (2) operating and licensing others to
      operate, during the Term, any type of CuraFlo Business outside of the
      Territory; (3) operating and licensing others to operate, after
      this Agreement terminates or expires, any type of CuraFlo Business in
      any area, including inside the Territory; (4) operating and
      licensing others to operate in any area, during or after the Term, any
      type of business other than a CuraFlo Business; and (5) performing
      work under the System, or having others perform work under the System,
      inside the Territory on buildings for which you do not have the proper
      certification, including, but not limited to the CuraFlo Spincast System.
    

    
      1.1.4 You do not receive any automatic right to expand your
      Territory, however, if you are in compliance with the terms and
      conditions of this Agreement, you may request our approval of your
      request to incorporate a contiguous geographic area into your Territory.
      We have sole discretion to approve or reject your request. If we approve
      your request, you and we will amend this Agreement and Appendix A to
      reflect the expanded nature of your Territory and you must pay an
      Expansion Fee in the amount of 6.25 cents for each person that resides
      in the additional geographic area that will be incorporated into your
      Territory. We also may require that you purchase additional equipment
      and/or hire additional crew(s) for your expanded Territory.
    

    
      
        

        

      

      
        
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               1.2       Territory Rules
    

    
      1.2.1 You have the exclusive right to advertise and market the
      services of the Franchised Business and directly solicit customers
      inside the Territory. You may not advertise or market the services of
      the Franchised Business or directly solicit customers outside of the
      Territory, unless you obtain our prior written permission. “Direct
      solicitation” includes, but is not limited to, solicitation in person,
      by telephone, by mail, by email, and by distribution of brochures,
      business cards or other materials. If any of your advertising within the
      Territory is in media that will or may reach a significant number of
      persons outside of the Territory, you must notify us in advance and
      obtain our prior written consent. We may establish rules and policies
      from time to time regarding such advertising. We may, in our sole
      discretion, grant permission to you to market to and directly solicit
      customers in an open adjacent territory where no CuraFlo Businesses are
      operated, provided that should we sell that territory to a CuraFlo
      franchisee or designate that territory as a company-operated territory,
      you agree to stop marketing and providing services in that territory and
      provide us with all customer information that you acquire relating to
      that territory. You will not have any rights of first refusal to the
      open territory.
    

    
      1.2.2 You must request and obtain our prior written consent to
      perform work under the System in an area that is not within your
      Territory (“Extraterritorial Job”). We will not unreasonably withhold
      our consent to an Extraterritorial Job provided that you are qualified
      to perform the job and you did not obtain the job in violation of
      Section 1.2.1. For example, you may request permission to accept an
      Extraterritorial Job obtained by referral from a customer for whom you
      performed a job in the Territory or by referral from us or another
      franchisee. You may not sign a contract for or accept an
      Extraterritorial Job without obtaining our prior written consent.
    

    
      1.2.3 If you receive a request to perform a job in the territory
      of another franchisee, you must notify us of the request and your
      intention to perform the job. We will then advise you whether the
      franchisee is certified to perform the job. We also will notify the
      franchisee of your intention to perform a job in their territory. If the
      franchisee is certified to perform the job, you must, within the time
      period specified in the Manuals, pay to that franchisee a Cross-over Fee
      equal to ten percent (10%) of the Gross Sales (as defined in Section
      3.4) from the job. Alternatively, you may refer a job to the franchisee
      in whose territory the job will be performed. If that franchisee accepts
      the job, the franchisee will pay you a Referral Fee equal to five
      percent (5%) of the Gross Sales from the job. If we notify you that a
      certified franchisee has referred a job to you in their territory and
      you accept that job, you must pay that franchisee, within the time
      period specified in the Manuals, a Referral Fee equal to five percent
      (5%) of the Gross Sales from the job. You will not be obligated to pay a
      Cross-over Fee or a Referral Fee to any franchisee who is not certified
      by us to perform the type of job that you will perform in their
      territory.
    

    
      1.2.4 You specifically acknowledge that: (1) other CuraFlo
      Businesses will operate under restrictions similar to those set out in
      Section 1.2 (“Territory Rules”), which means that in some instances
      other CuraFlo Businesses may perform jobs in your Territory or sponsor
      advertising which reaches persons in your Territory; and (2)
      although we will not knowingly permit violations of the Territory Rules,
      we do not represent or guarantee that other CuraFlo Businesses will
      always abide by the Territory Rules, and we will have no liability to
      you for any such violations.
    

    
      
        

        

      

      
        
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      1.3 Work Performed In Your Territory. You acknowledge that
      we, or another CuraFlo franchisee, may perform work under the System in
      your Territory and you will not receive any revenue from that job if you
      are not certified to perform the job. For example, if you have not been
      certified in our High-Level Training Program as described in Section
      5.3, then we or another CuraFlo franchisee may enter your Territory to
      do the job.
    

    
      1.4 Forms of Agreement. Over time, we have entered, and
      will continue to enter, into agreements with other franchisees that may
      contain provisions, conditions and obligations that differ from those
      contained in this Agreement. The existence of different forms of
      agreement and the fact that we and other franchisees may have different
      rights and obligations does not affect our or your duties to comply with
      the terms of this Agreement.
    

    
      2        TERM; SUCCESSOR FRANCHISE AGREEMENTS
    

    
      2.1 Term. The term of this Agreement (“Term”) begins on
      the Effective Date and expires at midnight on the day preceding the 5th
      anniversary of the Effective Date, unless this Agreement is terminated
      at an earlier date as specified in Section 16 or otherwise in this
      Agreement.
    

    
      2.2 Successor Franchise Agreements
    

    
      2.2.1 When this Agreement expires, you will have the option to
      continue the franchise relationship and obtain three (3) Successor
      Franchise Agreements, each of which will be for a term of five (5)
      years, unless: (1) we have announced a decision to stop
      franchising the CuraFlo concept; or (2) we decide to withdraw the
      CuraFlo concept from the geographic market in which your Territory is
      located. We may require you to satisfy any or all of the following as a
      condition of continuing the franchise relationship with us:
    

    
      2.2.2 You must give us written notice of your desire to exercise
      your option not more than nine (9) months and not less than six (6)
      months before the end of the expiring term.
    

    
      2.2.3 You must maintain all licenses and permits necessary to
      operate the Franchised Business.
    

    
      2.2.4 You must pay all amounts owed to us, our affiliates, and
      major suppliers; you must not be in default of this Agreement or any
      other agreement with us, our affiliates, or our suppliers; and you must
      have substantially and timely complied with all obligations throughout
      the term of each agreement.
    

    
      2.2.5 You must update your equipment, vehicles, service offering,
      products, methods, and procedures to reflect our then-current image and
      operating standards.
    

    
      2.2.6 Your Operating Principal (as defined in Section 6.9.1),
      Master Plumber (as defined in Section 6.9.3), sales person, crew foreman
      and/or certain of your employees that we designate must successfully
      complete any additional or refresher training courses that we may
      require.
    

    
      
        

        

      

      
        
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      2.2.7 You must sign the standard form of CuraFlo Franchise
      Agreement that we are then offering to new franchisees (or the standard
      form that we most recently offered to new franchisees, if we are not
      then offering to new franchisees) (“Successor Franchise Agreement”) and
      your Owners (as defined in Section 11.1 must sign a Personal Guarantee
      (as described in Section 15.4). The terms of the Successor Franchise
      Agreement for your first successor term will contain the same fees and
      material business terms as those set forth in this Agreement. The terms
      of any subsequent Successor Franchise Agreements may contain fees and
      business terms that are substantially different from the terms of this
      Agreement. We will modify the Successor Franchise Agreement to delete
      terms inapplicable to the successor term (such as initial fees and
      opening deadlines). The Successor Franchise Agreement will contain a
      general release of any and all claims against us, our affiliates, and
      our past, present and future officers, directors, shareholders and
      employees arising out of or relating to your Franchised Business that
      you must sign.
    

    
      3        FEES
    

    
      3.1 Initial Franchise Fee. At the same time that you sign
      this Agreement, you must pay to us an initial franchise fee in the
      amount specified in Appendix A. The initial franchise fee is paid in
      consideration of the rights granted in Section 1 and is fully earned at
      the time paid. You acknowledge that we have no obligation to refund the
      initial franchise fee in whole or in part for any reason. However, if we
      terminate this Agreement based on your Operating Principal’s failure to
      successfully complete our initial training program, we may, in our sole
      discretion, refund fifty percent (50%) of the initial franchise fee,
      less our expenses. As a condition of any such refund, we may require
      that you and all Owners sign a general release, in the form we
      prescribe, of any and all claims against us, our affiliates, and our
      past, present, and future officers, directors, shareholders, and
      employees.
    

    
      3.2 Royalty. In addition to all other amounts to be paid
      by you to us, you must pay to us a semi-monthly nonrefundable and
      continuing royalty fee (“Royalty”) equal to two and one quarter percent
      (2.25%) of the Gross Sales of the Franchised Business (as defined in
      Section 3.4); however, commencing as of the Opening Date (as defined in
      Section 4.4), you must pay to us a minimum semi-monthly Royalty in the
      amount of $600. You must calculate and pay the Royalty on the first and
      fifteenth day of each month based on your Gross Sales for the previous
      semi-monthly period. The Royalty is non-refundable and is paid in
      consideration of your right to use the Marks and the System in
      accordance with this Agreement, and not in exchange for any specific
      services we render.
    

    
      3.3 Marketing And Brand Fund Contributions
    

    
      3.3.1 You must make a nonrefundable semi-monthly contribution to
      the CuraFlo System Marketing and Brand Fund (“MBF”) in the amount of two
      and one half percent (2.5%) of the Gross Sales of the Franchised
      Business at the same time and in the same manner that you pay the
      Royalty (“MBF Contribution”), however, commencing as of the Opening
      Date, you must make a minimum MBF Contribution in the amount of $400.
      Other contract terms relating to the MBF are set forth in Section 8.2 of
      this Agreement.
    

    
      3.3.2 If, at the end of each anniversary of the Effective Date
      (“Anniversary Date”), you have met your local marketing expenditure
      requirement for that year (as described in Section 8.3) we will refund
      to you one half of one percent (1⁄2%) of your Gross Sales that you
      contributed to the MBF in that year.
    

    
      
        

        

      

      
        
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      3.4 Gross Sales. “Gross Sales” include all revenue from
      the sale of all services performed and products sold and all other
      income of every kind and nature related to the Franchised Business,
      whether for cash or credit (or other related or similar methods of
      payment) and regardless of collection in the case of credit, provided,
      however, that “Gross Sales” do not include any sales taxes or other
      taxes that you collect from customers and pay directly to the
      appropriate taxing authority.
    

    
      3.5 Method Of Payment
    

    
      3.5.1 You must participate in our then-current electronic funds
      transfer program, which authorizes us to use a pre-authorized bank draft
      system. You must furnish to us and your bank all authorizations
      necessary to effect payment by the methods we specify. Your semi-monthly
      Royalty and MBF Contribution, and other amounts owed under this
      Agreement, including any interest charges, must be received by us or
      credited to our account by pre-authorized bank debit before 5:00 p.m. on
      the first and the fifteenth day of each month or at other points
      specified by us (“Due Date”). We reserve the right to modify, at our
      option, the method by which you must pay the Royalty, MBF Contribution,
      and other amounts owed under this Agreement upon receipt of written
      notice from us. You may not, under any circumstances, set off, deduct or
      otherwise withhold any Royalties, MBF Contributions, interest charges or
      any other monies payable under this Agreement on grounds of our alleged
      non-performance of any obligations. No payment by you or acceptance by
      us of any monies under this Agreement for a lesser amount than due will
      be treated as anything other than a partial payment on account.
      Regardless of any designation by you, we may apply your payments to your
      outstanding obligations in any order we choose.
    

    
      3.5.2 We reserve the right to require you to use a centralized
      billing and lockbox service that we may designate. We may require you to
      establish a direct relationship with a third-party billing system vendor
      and may require you to process all transactions and Gross Sales of your
      business through them. If we do so, we will not control the processing
      of transactions or distribution of proceeds and we assume no
      responsibility for any errors by the vendor. You acknowledge and agree
      that, if we designate a centralized billing and lockbox vendor, the
      vendor will calculate and remit directly to us your Royalties, MBF
      Contributions, and any other amounts you owe to us based on transactions
      processed by the vendor.
    

    
      3.6 Delinquency. If any Royalties, MBF Contributions, or
      other amounts owed to us are not paid in full by the Due Date, we have
      the right to charge interest on the overdue amount at the rate of one
      and one half percent (1.5%) per month (or the maximum rate permitted by
      applicable law, if less than one and one half percent (1.5%)) from the
      date such amount was due until paid in full. Unpaid interest charges
      will compound annually.
    

    
      3.7 Taxes. You must report and pay when due all local,
      state, and federal taxes levied or assessed on you or the Franchised
      Business. If any taxes are imposed on us by reason of our acting as a
      franchisor or licensing the Marks under this Agreement, you must
      reimburse us the amount of those taxes within thirty (30) days after
      receipt of an invoice from us.
    

    
      3.8 Collection Costs and Expenses. You agree to pay to us
      on demand any and all costs and expenses incurred by us in enforcing the
      terms of this Agreement, including, without limitation, collecting any
      monies owed by you to us. These costs and expenses include, but are not
      limited to, costs and commissions due a collection agency, reasonable
      attorneys’ fees (including attorneys’ fees for in-house counsel employed
      by us or our affiliates and any attorneys’ fees incurred by us in
      bankruptcy proceedings), costs incurred in creating or replicating
      reports demonstrating Gross Sales of the Franchised Business, court
      costs, expert witness fees, discovery costs and reasonable attorneys’
      fees and costs on appeal, together with interest charges on all of the
      foregoing.
    

    
      
        

        

      

      
        
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      4        COMMENCEMENT OF OPERATION
    

    
      4.1 Site Approval. If we have not approved the Franchised
      Location as of the Effective Date, then you must, at your sole expense,
      select the site from within your Territory, obtain our approval of that
      site and secure a lease for or purchase the site within sixty (60) days
      after the Effective Date. We will provide you with our site
      requirements, including requirements for storing vehicles, equipment,
      and products. You may not make any binding commitments to purchase or
      lease a site until we have approved the site in writing. You must obtain
      and maintain all required building, utility, sign, sanitation, business,
      and other applicable permits and licenses.
    

    
      4.2 Start-Up and Equipment Packages. You must purchase
      from us or our designated suppliers certain signs, inventory, marketing
      materials, and supplies, as detailed in the Manuals (“Start-Up Package”)
      and certain equipment for use in performing work under the System as
      specified in the Manuals (“Equipment Package”). Items and/or quantities
      of any given item in the Start-Up Package and the Equipment Package may
      change from time to time.
    

    
      4.3 Right To Commence Operation Of The Franchised Business.
      You may not open for business or perform work under the System without
      our prior written approval, which will not be unreasonably withheld. We
      will not authorize you to commence operation of the Franchised Business
      unless you have met all of the following conditions:
    

    
      4.3.1 We have approved the Franchised Location.
    

    
      4.3.2 You are current on all obligations due to us, including all
      pre-opening expenses and all fees associated with equipment and products.
    

    
      4.3.3 You have received all required state and local government
      certifications, permits, and licenses and provided copies to us.
    

    
      4.3.4 Your Operating Principal and your Active Owner (as defined
      in Section 6.9.2), if applicable, have attended and successfully
      completed the Jump Start Program described in Section 5.1.
    

    
      4.3.5 Your Operating Principal, Master Plumber, sales person,
      crew foreman and your employees that we designate have attended and
      successfully completed our initial training program.
    

    
      4.3.6 You have purchased and received a Start-Up Package and the
      Equipment Package.
    

    
      4.3.7 You have provided us with copies of all insurance policies
      required by Section 6.14 or other evidence of insurance coverage and
      payment of premiums as we may reasonably request.
    

    
      
        

        

      

      
        
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      4.3.8 You have completed and received our approval of your
      Business Plan (as defined in Section 7.3.3).
    

    
      4.3.9 You have completed and received approval of your Market
      Introduction Plan for use during the Market Introduction Period (as
      defined in Section 8.1) and your Annual Marketing Plan (as defined in
      Section 8.3) for your first year of operation.
    

    
      4.3.10 You are not in material default under this Agreement or
      any other agreements with us; you are not in default beyond the
      applicable cure period under any real estate lease, equipment lease or
      financing instrument relating to the Franchised Business; and you are
      not in default beyond the applicable cure period with any vendor or
      supplier to the Franchised Business.
    

    
      4.4 Opening Date And Commencement Date. You must open your
      Franchised Business by completing all of the tasks outlined in Section
      4.3 within twenty (20) weeks after the Effective Date (“Opening Date”).
      You must start to work on your first CuraFlo job within twelve (12)
      weeks after the Opening Date (“Commencement Date”). Your Opening Date
      and your Commencement Date are specified in Appendix A. If you do not
      open your Franchised Business by the Opening Date or start work on your
      first CuraFlo job by the Commencement Date, and we do not extend the
      respective deadline, we will have the right to terminate this Agreement
      under Section 16.2.
    

    
      5        TRAINING AND COMMERCIAL MARKET CERTIFICATION
    

    
      5.1 Jump Start Program. Your Operating Principal and your
      Active Owner must attend our Business and Marketing Jump Start Program
      (“Jump Start Program”) at our corporate headquarters in Beachwood, Ohio.
      The Jump Start Program will consist of two (2) days of training related
      to the creation of your Business Plan (as defined in Section 7.3.3),
      Market Introduction Plan (as defined in Section 8.1) and Annual
      Marketing Plan (as defined in Section 8.3). We do not charge a fee for
      the Jump Start Program; however, you are responsible for any travel
      expenses, living expenses, wages, and other expenses incurred by your
      Operating Principal and your Active Owner while attending the Jump Start
      Program.
    

    
      5.2 Initial Training Program
    

    
      5.2.1 Before you begin operating the Franchised Business, your
      Operating Principal, Master Plumber, sales person and crew foreman must
      successfully complete our initial training program. The initial training
      program consists of certification programs for your Operating Principal,
      Master Plumber, sales person and crew foreman. Your Operating Principal
      may serve as your Master Plumber or as your sales person. Your Master
      Plumber may serve as your crew foreman if you only have one (1) crew. We
      do not charge a fee for these personnel to attend the initial training
      program, however, you are responsible for any travel expenses, living
      expenses, wages, and other expenses incurred by your trainees while
      attending our initial training program.
    

    
      5.2.2 The initial training program consists of up to fifteen (15)
      days of classroom instruction which will be held at our corporate
      headquarters in Beachwood, Ohio and up to fifteen (15) days of field
      training which may be conducted at a CuraFlo job site anywhere in North
      America. We have the right to reduce the duration or content of the
      initial training program for any trainee who has prior experience with
      our concept or in similar businesses. You may request that we conduct
      the field training portion of our initial training program at CuraFlo
      job site in your Territory. If we approve your request, you must pay our
      then current hourly training fee and the travel, living and other
      expenses incurred by our training staff.
    

    
      
        

        

      

      
        
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      5.2.3 We have the right to dismiss from the initial training
      program any person whom we believe will not perform acceptably in the
      position for which he/she has been hired, and you must provide a
      suitable replacement within thirty (30) days of dismissal. We alone have
      the right to judge whether a person has successfully completed training.
      If you or any of your employees fail to complete the initial training
      program to our satisfaction, you or they may repeat the course or you
      may send a substitute to the next available scheduled training program;
      however, we will have no obligation to extend the Opening Date or the
      Commencement Date for this purpose. We may charge you our hourly
      training fee for substitute personnel that you send to the initial
      training program and for individuals who repeat our training programs.
      If your Operating Principal fails to complete the initial training
      program to our satisfaction by the Opening Date, we may terminate this
      Agreement under Section 16.2.
    

    
      5.2.4 We may, in our sole discretion, require up to five (5) days
      of on-site training at your first job depending on the time elapsed
      between when you complete your field training and when you commence your
      first job. We reserve the right to charge you our hourly training fee
      for this on-site training and you must pay the travel, living and other
      expenses incurred by our training staff.
    

    
      5.3 Commercial Market Certification. We currently offer
      three certification levels for the Commercial Market. Pursuant to the
      initial training program, you and certain of your employees will be
      certified to perform work under the System at buildings that have less
      than four (4) stories. Before you may perform or pursue
      any work under the System at a building that has between four (4)
      and ten (10) stories, your Master Plumber and your
      sales person must attend, successfully complete and be certified in our
      Mid-Level Training Program. Before you may perform or pursue work under
      the System at a building that has more than ten (10)
      stories, your Master Plumber and your sales person(s) must attend,
      successfully complete and be certified in our High-Level Training
      Program. The Mid-Level Training Program will consist of up to one and
      one half (1.5) days of classroom instruction at our corporate
      headquarters in Beachwood, Ohio and up to four (4) days of field
      training at a CuraFlo job site in North America. The High-Level
      Training Program will consist of up to one (1) day of classroom
      instruction at our corporate headquarters in Beachwood, Ohio with no
      days of field training required. We also may, in our sole discretion,
      offer these training programs to you at a CuraFlo job site in your
      Territory. We do not charge a fee for either of these training programs,
      however, if we travel to your Territory to conduct a training program,
      you must pay our hourly training fees and the travel, living and other
      expenses incurred by our training staff.
    

    
      5.4 Ongoing Training
    

    
      5.4.1 We may require your Operating Principal, Master Plumber,
      sales person, crew foreman, training personnel, and/or other previously
      trained and experienced staff members to attend and complete
      satisfactorily various re-certification programs and training courses
      that we periodically choose to provide at the times and locations that
      we designate, as well as periodic conventions, regional meetings, and
      conferences that we specify. We may charge reasonable registration or
      similar fees for these courses.
    

    
      5.4.2 You understand and agree that any specific ongoing training
      or advice we provide does not create an obligation (whether by course of
      dealing or otherwise) to continue to provide such specific training or
      advice, all of which we may discontinue and modify from time to time.
    

    
      
        

        

      

      
        
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      5.4.3 Your Master Plumber, sales person, crew foreman and all
      personnel involved in application of the CuraFlo Engineered Flow Lining
      System must be re-certified to our satisfaction annually by
      completing the relevant training program in which they have achieved
      certification. We do not charge a fee for your personnel to attend a
      re-certification program. Re-certification may be administered, with our
      approval, under the direction of your Operating Principal and/or your
      Master Plumber who have successful completed our Train-the-Trainer
      program (as described in Section 5.7).
    

    
      5.5 Training Of Replacement Personnel. We require that
      your replacement personnel satisfactorily complete the initial training
      program within the time period required by the Manuals after being
      offered a position. Replacement personnel may: (1) attend the
      next initial training program offered by us where there is an opening;
      or (2) be trained by your certified trainers, if any. We reserve
      the right to charge you our hourly training fees for providing the
      initial training program to your replacement personnel if the number of
      replacement personnel that you send to the initial training program in
      any twelve (12) month period exceeds the national attrition rate for
      persons holding the same positions as your replacement personnel.
    

    
      5.6 De-certification Of Personnel. We have the right to
      de-certify any of your personnel who consistently fail to maintain our
      System standards. If any of your employees lose their certification, you
      must send the employee for re-certification at a location designated by
      us before they may continue performing their job function. We may charge
      a reasonable training fee to re-certify such employees.
    

    
      5.7 Training By You. If you wish to train your own
      personnel, after you have completed the initial training program, your
      designee (which may be your Operating Principal or your Master Plumber)
      may attend our Train-the-Trainer program. We do not charge a fee for the
      Train-the-Trainer program. Each person who successfully completes the
      Train-the-Trainer program will be certified as a trainer. Certified
      trainers may, using approved training materials and methods, train and
      certify your personnel. Each certified trainer must be recertified
      annually by successfully completing our Train-the-Trainer program.
    

    
      5.8 Training Materials And Methods. All training materials
      that we provide to you remain our property. Except for the initial
      training program, we have the right to provide training programs in
      person, on tape, via the Internet or company intranet, in printed or
      electronic format, or by other means, as we determine. We may
      periodically upgrade our training programs, content, and training
      materials. If we do so, you must use our revised training programs and
      materials when training your employees.
    

    
      5.9 Expenses. You are responsible for any travel expenses,
      living expenses, wages, and other expenses incurred by you and your
      trainees while attending our training programs.
    

    
      6        OPERATIONS
    

    
      6.1 Compliance With Standards. You agree to comply with
      all mandatory specifications and procedures set forth from time to time
      in the Manuals. You acknowledge that the accounting practices, record
      keeping, software, services and operation of your Franchised Business
      are important to us and our other franchisees. However, you acknowledge
      that we have the right to vary our standards and specifications, in our
      reasonable judgment, to accommodate circumstances of individual
      franchisees.
    

    
      
        

        

      

      
        
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      6.2 Products And Services You May Offer. You may offer
      customers only the products and services for which you have the proper
      certification and that we have expressly authorized to be offered by
      Franchised Businesses, as specified in the Manuals from time to time. We
      may change the authorized products and services (other than the core
      service of pipe lining) at our discretion, and we may designate specific
      products or services as optional or mandatory. You must offer all
      mandatory products and services unless prohibited by local laws or
      regulations or we approve otherwise in writing. You acknowledge that we
      may approve some services for certain franchisees and not others based
      on legitimate business reasons. You must cease selling or offering for
      sale any products or services that we disapprove or revoke approval of
      within thirty (30) days of receiving notice or immediately if the
      product or service poses a threat to health or safety.
    

    
      6.3 Sourcing of Epoxy; Minimum Purchases. You must
      purchase our proprietary epoxy (which may be CuraPoxy or another
      proprietary epoxy designated by us) from us, our affiliates or our
      designated suppliers to use in your Franchised Business. You may not
      re-sell our epoxies or use them for any purpose other than your
      application of the CuraFlo Engineered Flow Lining System. You may not
      use any other epoxy, other than the proprietary epoxies that you
      purchase from us, our affiliates or our designated suppliers in your
      Franchised Business. We and our affiliates may earn income on sales of
      epoxy to you. We will notify you at the beginning of each year of the
      average System purchases of epoxy for the prior year. Beginning with the
      third year of the Term, during any rolling ninety (90) day period, your
      purchases of epoxy must exceed eighty percent (80%) of the average
      purchases of epoxy per population/household/ equipment set by all
      franchisees in the System.
    

    
      If you fail to purchase the minimum amount of epoxy required during any
      rolling ninety (90) day period, we may place you in default of this
      Agreement and you will have sixty (60) days to cure your default. We
      have sole discretion regarding the enforcement of this provision. If you
      fail to purchase the minimum amount of epoxy required during any rolling
      ninety-day period, we may place you in default of this Agreement and you
      will have sixty days to cure your default. If your epoxy purchases
      continue to be less than the required standard for one-hundred and
      eighty (180) consecutive days, or if they fall below the standard in any
      two (2) non-consecutive ninety (90) day periods during any twelve (12)
      month time frame, you will be required to meet with us in person, at
      your expense, to review your Business Plan, Annual Marketing Plan and
      any other relevant information. Within thirty (30) days following this
      meeting, we will determine and notify you of an acceptable course of
      action to remedy the performance shortfall. If you fail to comply with
      the specified course of action in the time frame set forth in the
      notice, we may, in our sole discretion, place you in default of this
      Agreement and you will have a period of sixty (60) days in which to cure
      your default.
    

    
      6.4 Sourcing of Other Equipment and Supplies
    

    
      6.4.1 We may require that other products, supplies, equipment,
      and services that you purchase for use in your Franchised Business: (1)
      meet specifications that we establish from time to time; (2) be
      purchased only from suppliers that we have expressly approved; and/or (3)
      be purchased only from a single source (which may include us or our
      affiliates or a buying cooperative organized by us). To the extent that
      we establish specifications, require approval of suppliers, or designate
      specific suppliers for particular items, we will publish our
      requirements in the Manuals.
    

    
      
        

        

      

      
        
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      6.4.2 We and our affiliates may earn income on direct sales of
      equipment, products and services to you. We may negotiate purchasing
      arrangements under which suppliers agree to make equipment, products and
      services available to Franchised Businesses. If we or our affiliates
      receive any rebates, commissions or other payments from third-party
      suppliers based on your purchases from them, we will, in our sole
      discretion, contribute the rebates, commissions or other payments to the
      MBF or pay you your pro rata share of such rebates, commissions or other
      payments based on your purchases from those third-party suppliers.
    

    
      6.4.3 If you would like to offer products or services that we
      have not approved or purchase from a supplier that we have not approved,
      you must submit a written request for approval. We have the right to
      inspect the proposed supplier’s facilities and to test samples of the
      proposed product(s) and service(s). You agree to pay to us an amount not
      to exceed the reasonable cost of the inspection and our actual cost of
      testing the proposed product(s) or service(s) or evaluating the proposed
      supplier, including personnel and travel costs, whether or not the
      product, service or supplier is approved. We will notify you in writing
      within the time period specified in the Manuals after our receipt of
      your request as to whether we have approved the new product, service or
      supplier. You may not use a new product, service or supplier without or
      prior written approval. We have the right to grant, deny, or revoke
      approval of products, services, and suppliers based solely on our
      judgment. Approval of a supplier may be conditioned on requirements
      relating to the frequency of delivery, reporting capabilities, standards
      of service, including prompt attention to complaints, or other criteria,
      and may be temporary pending a further evaluation of the supplier by us.
    

    
      6.4.4 We reserve the right to reinspect the facilities and
      products of any approved supplier and to revoke approval upon the
      supplier’s failure to meet any of our then-current criteria. If you
      receive a notice of revocation of approval, you agree to cease
      purchasing products from the disapproved supplier and, in the case of
      revocation based on failure of products to meet our standards, you agree
      to dispose of your remaining inventory of the disapproved supplier’s
      products as we direct.
    

    
      6.5 Testing. We have the right to require you, from time
      to time, to participate in the testing of equipment, services, products,
      or application processes at your own expense. When conducting these test
      programs, you must cooperate with us and comply with our procedures as
      set forth in the Manuals, including your obligation to keep appropriate
      records and report their results to us.
    

    
      6.6 Your Development Of System Improvements. If you
      develop any new product, equipment, service, application process, or
      improvement relating to the System whether or not as part of testing
      conducted by us (“Improvement”), you must promptly notify us and provide
      us with all information regarding the Improvement, which will become our
      property and may, in our sole discretion, be incorporated into the
      System without any payment to you. You promptly must take all actions
      deemed necessary or desirable by us to vest in us ownership of such
      Improvement. You may not use any Improvement in your Franchised Business
      until it has been approved by us for use in the System.
    

    
      6.7 Image Standards. You must keep the vehicles, uniforms,
      signs, and equipment used in the Franchised Business in the highest
      degree of cleanliness, orderliness, sanitation and repair in accordance
      with our standards and specifications as set forth in the Manuals.
    

    
      
        

        

      

      
        
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      6.8 Reservations System. We reserve the right to require
      you to use an online reservations system for scheduling appointments
      (“Reservations System”). We may require you to pay us a monthly service
      fee to maintain the Reservations System, unless we waive the requirement
      for you to participate. If the Reservations System is implemented, we
      reserve the right to modify or disband it at any time. We will refer
      Leads generated from the Reservations System to you as described in
      Section 6.10.
    

    
      6.9 Management and Personnel
    

    
      6.9.1 You must appoint a single representative from your equity
      holders as your Operating Principal. The Operating Principal must have a
      ten percent (10%) or greater ownership interest in you, must complete
      our initial training program and any other training programs that we
      require, and must have the power to bind you in all dealings with us.
      The Franchised Business must at all times be under the personal
      supervision of the Operating Principal. You may not permit any other
      person to operate, manage, direct or control the Franchised Business
      without our prior written consent. We have the right to rely on any
      statement, agreement, or representation by the Operating Principal
      regardless of any conflict with your governing documents. You may not
      change the Operating Principal without our prior approval. If the
      Operating Principal no longer qualifies as such, you must designate
      another qualified person to act as the Operating Principal and enroll
      that person in our initial training program within thirty (30) days
      after the date the prior Operating Principal ceases to be qualified.
    

    
      6.9.2 If one of your Owners (who is not serving as the Operating
      Principal) will play an active day-to-day role in the business planning
      and management of the Franchised Business, then you must designate that
      Owner as an “Active Owner”. Your Active Owner must attend the Jump Start
      Program as described in Section 5.1.
    

    
      6.9.3 You must at all times employ at least one (1) plumber who
      has completed our initial training program and who is certified to the
      highest standards in the state in which your Territory is located
      (“Master Plumber”). If, at any time, you fail to employ at least one (1)
      Master Plumber, you must within 30 (thirty) days (from the date on which
      you do not have at least one (1) Master Plumber) hire and enroll a
      replacement Master Plumber in our initial training program.
    

    
      6.9.4 You must employ and operate at least the number of work
      crews that we specify in the Manuals from time to time based on the size
      of your Territory. Each crew must be supervised by your Master Plumber
      or by a crew foreman working under the supervision of your Master
      Plumber. If you fail to employ and operate the required number of crews,
      we have the right to place you in default of this Agreement and, if you
      do not hire the required number of crew members within thirty (30) days
      of your receipt of our notice of default, we may, in our sole
      discretion, reduce the size of your Territory. We require your Master
      Plumber, crew foreman and all crew members to be certified by us or a
      certified trainer for specific functions within the Franchised Business;
      if any crew members or sales personnel are de-certified, we may require
      them to complete additional training to regain certification. Each crew
      member must wear a uniform and otherwise identify themselves with the
      Marks at all times while on a job for the Franchised Business and must
      de-identify completely when performing work for others.
    

    
      6.9.5 You have sole responsibility for all employment decisions
      and functions related to your Franchised Business, including hiring,
      firing, compensation, benefits, work hours, work rules, record-keeping,
      supervision, and discipline of employees. You must take such steps as
      are necessary to ensure that your employees preserve good customer
      relations; render competent, prompt, courteous, and knowledgeable
      service; and meet any minimum standards that we may establish from time
      to time in the Manuals.
    

    
      
        

        

      

      
        
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      6.10 Lead Generation. We may solicit “Leads” by any means
      whatsoever, including but not limited to our website, direct mail or
      catalogs, media advertising, and displays at trade shows or other
      existing businesses within the Territory. “Lead” means the name, address
      and telephone number of any prospective customer for pipe lining and
      maintenance services to be performed at a location in the Territory. We
      have the right to negotiate and enter into arrangements for local,
      regional and national Lead-generation programs upon such terms and
      conditions as we deem appropriate. Unless the prospective customer
      requests referral to a specific CuraFlo Business, we will refer the Lead
      to you if the job would be performed in your Territory. We may require
      you to use a lead tracking and customer manager program in order to
      receive and/or manage your Leads. If you are unable to service the Lead
      within a reasonable time, as provided for in our Manuals, we have the
      right to refer the Lead to another CuraFlo Business.
    

    
      6.11 Warranty. You are required to offer to customers a
      warranty on all products and services rendered by your Franchised
      Business as specified in the Manuals.
    

    
      6.12 National Accounts. You acknowledge that our
      negotiation of national account arrangements (“National Accounts”),
      including rates and services to be performed, enhances the potential
      value of the System and inures to your benefit, our benefit, and the
      benefit of other CuraFlo franchisees. Accordingly, we reserve the right
      to establish and administer a National Accounts program for the System.
      If we establish a National Accounts program, you will have the
      opportunity to participate in the program and to service National
      Accounts customers in your Territory on our behalf and in accordance
      with the pricing and other terms negotiated between CuraFlo and the
      National Accounts customer. The details of any National Accounts program
      that we establish will be set forth in the Manuals and you will need to
      sign a National Accounts Agreement with us. You will have the right to
      decline to participate, or terminate your participation, in the National
      Accounts program at any time by giving us prior written notice as
      required by the National Accounts Agreement. If you decline to
      participate in the National Accounts program or if you or we terminate
      your participation in the National Accounts program, we will have the
      right to service and/or authorize others to service National Accounts
      customers in your Territory without providing any compensation to you.
      We have no obligation to readmit you into the National Accounts program
      or to transfer any National Accounts customer to you if you are
      subsequently willing and able to provide service to a National Accounts
      customer within your Territory.
    

    
      6.13 Compliance With Laws. You agree to operate the
      Franchised Business in full compliance with all applicable municipal,
      county, state and federal laws, rules, regulations and ordinances. You
      have sole responsibility for compliance despite any information or
      advice that we may provide.
    

    
      6.14 Insurance. You shall be responsible for all loss or
      damage arising from or related to your operation of the Franchised
      Business, and for all demands or claims with respect to any loss,
      liability, personal injury, death, property damage, or expense
      whatsoever in connection with the operation of the Franchised Business.
      You shall maintain in full force and effect throughout the Term that
      insurance which you determine is necessary or appropriate for
      liabilities caused by or occurring in connection with the operation of
      the Franchised Business, which shall include, at a minimum, insurance
      policies of the kinds, and in the amounts, required by the Manuals. The
      insurance policy or policies must be in effect before you commence
      operation of the Franchised Business. The insurance policy or policies
      must protect you, us, and our respective past, present and future
      officers, directors, owners, employees, servants, representatives,
      consultants, attorneys, and agents. We must be named as an additional
      insured in the policy or policies (statutory policies excepted). All
      policies shall be written by insurers acceptable to us and must provide
      primary coverage without right of contribution by any insurance carried
      by us and a waiver of subrogation in favor of us. We may require
      additional types of coverage or increase the required minimum amount of
      coverage upon reasonable notice. Your obligation to obtain coverage is
      not limited in any way by insurance that we maintain. Upon our request
      or as specified in the Manuals, you must provide us with certificates of
      insurance evidencing the required coverage. Your insurer(s) must commit
      not to cancel or amend the policy or policies without at least thirty
      (30) days’ prior written notice to us. If you fail to obtain and
      maintain insurance coverage as required by this Agreement, we have the
      right, but not the obligation, to obtain the required insurance on your
      behalf and to charge you for the cost of the insurance plus a reasonable
      fee for our services in procuring the insurance.
    

    
      
        

        

      

      
        
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      6.15 Public And Media Relations. You agree that you will
      not issue any press or other media releases or other communication
      without our prior written approval. This includes television, newspaper
      and trade publication interviews. As a franchisee of the System, you may
      only participate in internal and external communications activities that
      create goodwill, enhance our public image and build the CuraFlo brand.
    

    
      7        COMMUNICATIONS, BUSINESS RECORDS, AND REPORTING
    

    
      7.1 Computer System And Communications Links. You must
      obtain, install and use, at your expense, the hardware, software,
      on-line services and communications links that we specify from time to
      time. You agree to: (1) maintain on the computer system only the
      financial and operating data specified in the Manuals; (2) transmit
      data to us in the form and at the times required by the Manuals; (3) maintain
      the computer system in good working order at your own expense; (4) replace
      or upgrade the computer system, software, and communications links as we
      require (but not more than once a year); (5) install high speed
      Internet and/or communications connections; (6) ensure that your
      employees are adequately trained in the use of the computer system and
      our related policies and procedures; and (7) use any proprietary
      software and other proprietary materials that we provide to you in
      connection with the operation of the Franchised Business and if we so
      require, execute a licensing agreement and/or help desk services
      agreement and pay to us a reasonable fee for the use of such proprietary
      software and related help/desk services. You acknowledge that computer
      designs and functions change periodically and that we may desire to make
      substantial modifications to our computer specifications or to require
      installation of entirely different systems during the Term.
    

    
      7.2 Business Records. You must keep complete and accurate
      books, records and accounts of all business conducted under this
      Agreement, in the form and manner prescribed in the Manuals, which may
      include a prescribed chart of accounts and/or use of a designated
      accounting program or platform. You must preserve all of your books and
      records in at least electronic form for seven (7) years from the date of
      preparation.
    

    
      
        

        

      

      
        
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      7.3 Reports and Financial Statements
    

    
      7.3.1 By the fifth (5th) day of each month, you must
      submit to us, in writing, by electronic mail or such other form or
      method as we may designate, a Detailed Invoicing Report, setting forth
      the details, as specified in the Manuals, of each invoice that you
      issued in the preceding month and any other data or information as we
      may require.
    

    
      7.3.2 You must, at your expense, submit to us, in the form
      prescribed by us, a monthly profit and loss statement and balance sheet
      (both of which may be unaudited) within fifteen (15) days after the end
      of each month. We will have the right, to be exercised in our sole
      discretion, to require that you provide us profit and loss statements
      and balance sheets, or other reports and information relating to the
      Franchised Business, at other times that we request. You or your
      treasurer or chief financial officer must sign each statement and
      balance sheet, attesting that it is correct and complete and uses
      accounting principles applied on a consistent basis that accurately and
      completely reflect your financial condition. If, in our
      reasonable judgment, your monthly reports are deficient in substance or
      presentation, we may require that you submit to us year end financial
      statements prepared by an independent accountant and/or federal tax
      returns.
    

    
      7.3.3 You must, prior to the Opening Date, prepare and submit to
      us a three (3) year business plan (“Business Plan”) outlining the
      actions that you will take to ensure that your operation and management
      of the Franchised Business are in compliance with our standards. During
      the term of this Agreement, you agree to revise the Business Plan
      annually or as required by us in the Manuals and you further agree to
      implement those Business Plans as approved by us. We will provide to you
      a template to use in preparing your Business Plan (and your Annual
      Marketing Plan as described in Section 8.3) and we will offer you
      consultation an advice in preparing your Business Plan.
    

    
      7.4 Inspections. We have the right at any time: (1)
      to conduct inspections of the Franchised Business; (2) to
      interview your employees and members; and (3) to combine the
      inspection with a review of your business records or a financial
      examination or audit as provided in Section 7.5. You must cooperate with
      the inspections by giving our representatives unrestricted access and
      rendering such assistance as our representatives may reasonably request.
      If we notify you of any deficiencies after the inspection, you must
      promptly take steps to correct them. If you fail to correct any
      deficiencies within a reasonable time, we have the right to correct the
      deficiencies and to invoice you for our services.
    

    
      7.5 Examination And Audit Rights
    

    
      7.5.1 We have the right, both during and after the Term: (1)
      to inspect and copy your business records, your federal, state and local
      tax returns, and any other forms, reports, information or data that we
      may reasonably designate; and (2) to conduct a financial
      examination or audit of the Franchised Business. We or our designee may
      inspect business records at any time, however, we will provide you ten
      (10) days written notice before conducting an in-person financial
      examination or audit. We (or our designee) may conduct the examination
      or audit at our offices or those of a third-party, in which case we may
      require you to assemble your records in a central location and/or to
      send us your records.
    

    
      7.5.2 If the examination or audit reveals an understatement of
      Gross Sales, you must immediately pay to us any Royalties, MBF
      Contributions, or other amounts owing, plus interest as provided in
      Section 3.6. If Gross Sales have been understated by more than two
      percent (2%) for the period covered by the examination or audit, you
      must also: (1) reimburse us for the full reasonable cost of the
      examination or audit, including travel, lodging, meals, and wages of our
      representatives and the legal and accounting fees of any attorneys or
      independent accountants we use for the examination or audit; and (2)
      at our request, thereafter provide us with periodic audited financial
      statements. If Gross Sales are understated by more than five percent
      (5%) or more for any audited period of one (1) month or longer, we have
      the right to terminate this Agreement with no opportunity for cure. The
      foregoing remedies are in addition to any other remedies and rights
      available to us under this Agreement or applicable law.
    

    
      
        

        

      

      
        
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      7.6 Franchisee Advisory Committee. We reserve the right to
      create a franchisee advisory committee (“FAC”). You will be required to
      participate in any communication programs developed by the FAC. You must
      participate, at your sole cost, in the FAC if you are elected or
      appointed as a committee member. You may be required to pay a fee for,
      or contribute to, the FAC in an amount determined by the FAC.
    

    
      8        MARKETING
    

    
      8.1 Market Introduction Program. You must conduct initial
      marketing for the Franchised Business for a three (3) month period
      beginning up to two (2) weeks prior to and not later than the Opening
      Date (“Market Introduction Period”). We will provide to you a
      recommended market introduction plan template for use during the Market
      Introduction Period (“Market Introduction Plan”) and approved
      advertising and promotional materials for the Franchised Business
      (“Market Introduction Program”). You may modify the Market Introduction
      Program to meet your local market needs. In addition to the Marketing
      Kickoff meeting (which is included in our initial training program), we
      will provide to you an additional two (2) hours of consultation in the
      development and customization of your Market Introduction Plan. This may
      include determining the appropriate media mix and associated costs and
      appropriate messaging. If requested or required, we may also refer you
      to a preferred vendor or advertising agency to assist you with your
      local market needs. You must pay all invoices charged by the preferred
      vendor or advertising agency. We must review and approve in writing the
      Market Introduction Plan for your Franchised Business, including total
      expenditures. You will be required to spend at least $15,000, but no
      more than $35,000, under your Market Introduction Plan. In certain
      circumstances, you may nonetheless want to spend more than this amount.
      At our request, you must submit appropriate documentation to verify
      compliance with your expenditure obligation under the Market
      Introduction Plan.
    

    
      8.2 Marketing And Brand Fund
    

    
      8.2.1 You must make periodic contributions to the MBF as provided
      in Section 3.3. Although we may solicit input from franchisees, we have
      the final decision as to all operations and expenditures of the MBF. We
      may use your contributions and any earnings on the MBF for any costs
      associated with advertising (media and production), marketing, public
      relations programs and materials, booths and materials for plumbing and
      other building and construction related industries’ trade shows
      (including reasonable cost of staff attendance at trade shows), and/or
      promotional programs and materials, and any other activities we believe
      would benefit the System and/or CuraFlo Businesses generally, including
      advertising campaigns in various media; creation and maintenance of the
      web site; direct mail advertising; market research, including secret
      shoppers, customer satisfaction surveys, and branding studies; employing
      advertising and/or public relations agencies; purchasing promotional
      items; conducting and administering promotions and public relations
      events; the call center; and providing promotional and other marketing
      materials and services to our franchisees.
    

    
      
        

        

      

      
        
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      8.2.2 We have the right to direct all marketing programs, with
      the final decision over creative concepts, materials and media used in
      the programs and their placement. We will not use the MBF for anything
      whose sole purpose is the marketing of franchises, however, you
      acknowledge that the CuraFlo web site, public relations activities,
      community involvement activities and other activities supported by the
      MBF may contain information about franchising opportunities. We do not
      guarantee that you will benefit from the MBF in proportion to your MBF
      Contributions. You understand and acknowledge that your MBF
      Contributions may be used to enhance the recognition of CuraFlo products
      and services that you are not certified to offer or sell. You further
      understand and acknowledge that CuraFlo franchisees outside of the
      Commercial Market and CuraFlo dealerships may also contribute to and
      benefit from the MBF. If we or our affiliates operate any CuraFlo
      Businesses, we will contribute to the MBF a percentage of the receipts
      of those businesses, on the same basis as comparable franchisees. If we
      reduce the MBF Contribution rate for franchisees, we will reduce the
      contribution rate for company-owned CuraFlo Businesses by the same
      amount.
    

    
      8.2.3 We will separately account for payments to the MBF but we
      are not required to segregate MBF funds from our other monies. We will
      not use any contributions to the MBF to defray our general operating
      expenses, except for reasonable administrative costs and overhead we
      incur in activities reasonably related to the administration of the MBF
      or the management of MBF-supported programs (including salaries of our
      personnel who devote time to MBF activities and retainers and fees for
      outside agencies). Any sales and other materials produced with MBF
      monies will be made available to you at a reasonable cost, and the
      proceeds of such sales will also be deposited in the MBF account. We
      will prepare an unaudited statement of contributions and expenditures
      for the MBF and provide it to all CuraFlo franchisees within sixty (60)
      days after the close of our fiscal year. We will have the right at any
      time to dissolve the MBF. If we dissolve the MBF, we will either expend
      all monies in the MBF or rebate contributions on a pro-rata basis based
      on your contributions.
    

    
      8.2.4 You understand and acknowledge that the MBF is intended to
      enhance recognition of the Marks and patronage of CuraFlo Businesses. We
      will endeavor to utilize the MBF to develop advertising and marketing
      materials and programs, and to place advertising that will benefit the
      System and all CuraFlo Businesses contributing to the MBF. However, you
      agree that we are not liable to you and you forever covenant not to sue
      and hold us harmless of any liability or obligation to ensure that
      expenditures by the MBF in or affecting any geographic area are
      proportionate or equivalent to the contributions to the MBF by CuraFlo
      Businesses operating in that geographic area, or that any CuraFlo
      Business will benefit directly or in proportion to its contribution to
      the MBF from the development of advertising and marketing materials or
      the placement of advertising. Except as expressly provided in this
      Section 8.2, neither we nor our designee assumes any direct or indirect
      liability to you with respect to the maintenance, direction or
      administration of the MBF.
    

    
      8.3 Local Marketing. Following the expiration of your
      Market Introduction Period, you must spend an amount designated by us
      annually for local marketing of the Franchised Business (“Local
      Marketing Expenditure”). Your Local Marketing Expenditure will not
      exceed 3% of your annual Gross Sales, however, at a minimum, you must
      spend at least $15,000 annually. You must submit your first annual
      marketing plan and spending budget (“Annual Marketing Plan”) for our
      approval within thirty (30) days after you sign this Agreement.
      Thereafter, you must submit your Annual Marketing Plan for our approval
      at least thirty (30) days prior to the Anniversary Date and you agree to
      implement the Plan as approved by us. We will provide to you a template
      to use in preparing your Annual Marketing Plan. We may require you to
      travel to our corporate headquarters for an annual meeting to review and
      discuss your Annual Marketing Plan, which shall not exceed two (2)
      business days. If, at the end of each anniversary year, you have met
      your Local Marketing Expenditure requirement for that year, we will
      refund to you one half of one percent (1⁄2%) of your Gross Sales that you
      contributed to the MBF in that year. Your Local Marketing Expenditure
      obligation is in addition to your Market Introduction Program and MBF
      Contribution obligations. Upon our request, you must submit appropriate
      documentation to verify compliance with the minimum spending obligation.
      We have the right to designate from time to time the types of
      expenditures that will or will not count toward the minimum spending
      requirement. We have the right periodically to change your required
      Local Marketing Expenditure on reasonable notice, provided that the
      required expenditure will not exceed the then-current expenditure
      required of all Commercial Market CuraFlo franchisees.
    

    
      
        

        

      

      
        
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      8.4 Approval Of Advertising
    

    
      8.4.1 You agree to conduct all advertising in a dignified manner
      and to conform to the standards and requirements we specify from time to
      time in the Manuals or other written materials. In no event will your
      advertising or marketing materials contain any statement or material
      that, in our sole discretion, may be considered: (1) in bad taste
      or offensive to the public or to any group of persons; (2) defamatory
      of any person or an attack on any competitor; (3) to infringe
      upon the use, without permission, of any other persons’ trade name,
      trademark, service mark or identification; or (4) inconsistent
      with the public image of the System or the Marks. We may require you to
      discontinue the use of any advertising or marketing materials.
    

    
      8.4.2 We will make available for purchase from us or vendors we
      designate approved advertising and promotional materials and public
      relations programs, including signs, posters, collaterals, letterhead,
      business cards, etc. All of your advertising and promotional materials
      must bear the Marks in the form, color, location, and manner that we
      prescribe. We will have the final decision on all creative development
      of advertising and promotional messages. You must submit to us in
      writing for our prior approval all sales promotion and advertising
      materials that have not been prepared by or previously approved by us.
      If you do not receive our written approval within the time period
      specified in the Manuals, the material is deemed disapproved. We may
      require you to discontinue the use of any advertising or marketing
      materials.
    

    
      8.5 Call Center. You must promote our 1-888-4CuraFlo phone
      number (“Call Center”) by using it on your CuraFlo vehicles, stationery,
      business cards and other advertising materials as required by the
      Manuals. We will use the Call Center to receive telephone calls and
      notify you of Leads in your Territory.
    

    
      8.6 Website. We will host and maintain an independent
      website for your Franchised Business at an Internet address that we
      specify. We will provide and maintain this website using a standard
      template. You must pay our Website Setup Fee in the amount of $2,500 for
      the initial setup of your website, which includes our standard website
      template and content population using existing content or content that
      you provide. However, if you request or it becomes necessary to
      substantially modify or create customized script or content for your
      website, you must pay our then-current hourly fee to do so. Your website
      must be finalized before the Opening Date. As specified in the Manuals,
      we also provide up to twelve (12) hours per year of periodic maintenance
      to your website at no charge. Periodic maintenance includes additions,
      deletions or edits to your website content. However if you request or it
      becomes necessary to conduct additional periodic maintenance to your
      website, then you must pay our then-current hourly fee for this service.
      You agree not to promote, offer or sell any products or services, or to
      use any of the Marks, relating to the Franchised Business through any
      other Internet website or any future technological avenues without our
      prior written consent. You must submit any proposed changes to your
      website to us for our review and approval. If we have not approved your
      proposed changes within the time period specified in the Manuals, we
      will be deemed to have denied the changes.
    

    
      
        

        

      

      
        
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      9        MARKS
    

    
      9.1 Your Right To Use The Marks. Your right to use the
      Marks applies only to the operation of the Franchised Business and in
      advertising the Franchised Business. During the Term and after its
      expiration or termination, you agree to not directly or indirectly
      contest, or aid in contesting, the validity or ownership of the Marks or
      take any action detrimental to our rights in the Marks.
    

    
      9.2 Your Acknowledgments. You acknowledge that: (1)
      the Marks serve to identify the CuraFlo products and services, the
      System and CuraFlo Businesses; (2) your use of the Marks under
      this Agreement does not give you any ownership interest in them; and (3)
      all goodwill associated with and identified by the Marks inures
      exclusively to our benefit and is our property. Upon the expiration or
      termination of this Agreement, no monetary amount will be attributable
      to goodwill associated with your activities as a franchisee under this
      Agreement.
    

    
      9.3 Limitations On Use Of The Marks. You agree:
    

    
      9.3.1 To use only the Marks we designate, and only in the manner
      we authorize;
    

    
      9.3.2 To use the Marks only for the operation of the Franchised
      Business and in advertising the Franchised Business;
    

    
      9.3.3 To operate and advertise the Franchised Business only under
      the name CURAFLO without prefix or suffix;
    

    
      9.3.4 To ensure that the Marks bear the “®”,
      “TM”, or “SM”
      symbol, as we prescribe from time to time;
    

    
      9.3.5 To permit us or our representatives to inspect your
      operations to assure that you are properly using the Marks;
    

    
      9.3.6 To use the Marks to promote and to offer for sale only the
      products and services that we have approved, and not use any Marks in
      association with the products or services of others;
    

    
      9.3.7 Not to use or permit the use or display of the Marks as
      part of any Internet domain name or website without our prior written
      consent;
    

    
      9.3.8 To submit to us, for our approval, the assumed or trade
      name (the “DBA”) you intend to use in the operation of the Franchised
      Business prior to filing for it as required by local laws. We may
      approve or not approve such DBA at our discretion. All filings or
      affidavits, following your receipt from us of an approved DBA, must
      state that the filing or affidavit is made as “a franchisee of CuraFlo
      Franchising Inc.”
    

    
      
        

        

      

      
        
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      9.3.9 Not to use the Marks to incur any obligation or
      indebtedness on our behalf; and
    

    
      9.3.10 Not to use CuraFlo, Cura, Flo, or any of the Marks as part
      of your corporate or legal name, URL, domain name or phone number
      without our prior written consent.
    

    
      9.4 Changes To The Marks. We have the right, upon
      reasonable notice, to change, discontinue, or substitute for any of the
      Marks and to adopt new Marks for use with the System without any
      liability for any diminishment of the System. You agree to implement any
      such change at your own expense within the time that we reasonably
      specify.
    

    
      9.5 Third-Party Challenges. You agree to notify us
      promptly of any unauthorized use of the Marks that you suspect or of
      which you have knowledge. You also agree to inform us promptly of any
      challenge by any person or entity to the validity of our ownership of or
      our right to license others to use any of the Marks. You acknowledge and
      agree that we have the right, but not the obligation, to initiate,
      direct and control any litigation or administrative proceeding relating
      to the Marks, including, but not limited to, any settlement. You agree
      to sign all documents and, render any other assistance we may deem
      necessary to the defense or prosecution of any such proceeding.
    

    
      10       MANUALS
    

    
      We will furnish you with one copy of, or electronic access to, the
      Manuals, on loan, for as long as this Agreement or a Successor Franchise
      Agreement remains in effect. The Manuals contain detailed standards,
      specifications, instructions, forms, reports and procedures for
      management and operation of the Franchised Business. You acknowledge
      that we own the copyright in the Manuals and that your copies of the
      Manuals remain our property. You agree to treat the Manuals, training
      materials, and any other manuals or materials created or approved by us
      for use with the System as secret and confidential. You agree not to
      copy, duplicate, record or otherwise reproduce the Manuals or other
      materials provided by us, in whole or in part. In addition, you agree
      not to make any confidential information or materials supplied by us
      available to any unauthorized person. You must use the forms and reports
      contained in the Manuals for conducting business and reporting to us. We
      have the right to amend and supplement the Manuals from time to time by
      letter, electronic mail, bulletin, videotapes, audio tapes, CDs, DVDs,
      software or other forms of communication. You agree to keep your copy of
      the Manuals up-to-date and to comply with each new or changed standard
      promptly upon receipt of notice from us. If a dispute develops relating
      to the contents of the Manuals, our copy of the Manuals maintained at
      our headquarters controls. You agree to operate the Franchised Business
      at all times in strict conformity with the Manuals.
    

    
      11       YOUR ORGANIZATION
    

    
      11.1 Governing Documents. You must form a corporation or a
      limited liability company (“Business Entity”) to operate the Franchised
      Business and sign this Agreement. Your governing documents must provide
      that your activities are limited exclusively to the operation of the
      Franchised Business and other businesses operated by you that are
      franchised by us or our affiliates and that no transfer of an ownership
      interest may be made except in accordance with Section 13 of this
      Agreement. Any securities that you issue must bear a conspicuous printed
      legend to that effect. You must furnish us with a list of all direct or
      indirect holders of a legal or beneficial interest in you of five
      percent (5%) or more (“Owners”) and their percentage interests, as well
      as copies of your governing documents (and any amendments thereto) and
      any other corporate documents, books or records that we may request.
      Your Owners and their respective equity interests as of the Effective
      Date are identified in Exhibit A.
    

    
      
        

        

      

      
        
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      11.2 Execution Of Personal Guarantee By Owners. All of
      your Owners must jointly and severally personally guarantee your payment
      and performance under this Agreement and any other agreements or
      arrangements between you and us, our affiliates and our successors and
      assigns and must personally bind themselves to the terms of this
      Agreement and any other agreements or arrangements between you and us,
      our affiliates and our successors and assigns pursuant to the Personal
      Guarantee attached to this Agreement. Notwithstanding the foregoing, we
      reserve the right, in our sole discretion, to waive the requirement that
      some or all of these individuals sign the attached Personal Guarantee.
      We reserve the right to require any guarantor to provide personal
      financial statements to us from time to time.
    

    
      12       TRANSFERS BY US
    

    
      We have the unrestricted right to transfer or assign all or any part of
      our interest in this Agreement to any person or legal entity without
      your consent. You agree that we will have no liability after the
      effective date of transfer or assignment for the performance of, or for
      any failure to perform, any obligations we have transferred. We also
      have the absolute right to delegate to others the performance of any of
      our duties, obligations, or benefits under this Agreement.
    

    
      13       TRANSFERS BY YOU
    

    
      13.1 Definition Of Transfer
    

    
      In this Agreement, “Transfer” as a verb means to sell, assign, transfer,
      convey, give away, pledge, mortgage or otherwise encumber, either
      voluntarily or by operation of law (such as through divorce or
      bankruptcy proceedings), any interest in this Agreement, in the assets
      of the Franchised Business or your ownership interests. “Transfer” as a
      noun means any such sale, assignment, etc.
    

    
      13.2 No Transfer Without Our Consent
    

    
      You acknowledge that this Agreement is personal to you and we have
      selected you as a franchisee based on our reliance on your (or your
      Owners’) character, skill, aptitude and business and financial capacity.
      Neither you nor any of the Owners may make any Transfer or permit any
      Transfer to occur without obtaining our prior written consent. We have
      sole and absolute discretion to withhold our consent to a Transfer,
      except as otherwise provided in Sections 13.3 through 13.7. We have the
      right to communicate with and counsel both you and the proposed
      transferee on any aspect of a proposed Transfer. No Transfer that
      requires our consent may be completed until at least sixty (60) days
      after we receive written notice of the proposed Transfer. You agree to
      provide any information and documentation relating to the proposed
      Transfer that we reasonably require. Unless otherwise agreed, we do not
      waive any claims against the transferring party if we approve the
      Transfer.
    

    
      13.3 Transfer Of Entire Business. For a proposed Transfer
      of the Franchised Business, this Agreement or a Transfer of ownership
      interests that would result in a change of ownership control, the
      following conditions apply (unless waived by us):
    

    
      13.3.1 You must:
    

    
      
        

        

      

      
        
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      13.3.1.1 Be in compliance with all obligations to us under this
      Agreement and any other agreement you have with us, our affiliates, any
      lenders that have provided financing pursuant to an arrangement with us,
      and your major suppliers as of the date of the request for our approval
      of the Transfer, or you must make arrangements satisfactory to us to
      come into compliance by the date of the Transfer.
    

    
      13.3.1.2 Pay to us a transfer fee equal to $7,500 or such greater
      amount as is necessary to reimburse us for our reasonable costs and
      expenses incurred in reviewing and documenting the Transfer, including
      legal and accounting fees (“Transfer Fee”). However, the Transfer Fee
      will equal $2,000 if the proposed transferee: (1) has been
      an employee of CuraFlo or a CuraFlo franchisee for at least five (5)
      years; or (2) has been a CuraFlo franchisee for at least
      three (3) years and is in compliance with all obligations to us and our
      affiliates; or (3) is your spouse or adult son or daughter.
    

    
      13.3.2 The proposed transferee must:
    

    
      13.3.2.1 Demonstrate to our satisfaction that he or she meets all
      of our then-current qualifications to become a CuraFlo franchisee.
    

    
      13.3.2.2 Sign our then-current standard form of Franchise
      Agreement (or the standard form most recently offered to new
      franchisees, if we are not then offering franchises to new franchisees)
      for a new initial term. There is no limitation on the extent to which
      the terms of the new Franchise Agreement may differ from the terms of
      this Agreement.
    

    
      13.3.2.3 Successfully complete our then-current training
      requirements and pay the then-current fee for training.
    

    
      13.3.2.4 Obtain all required licenses and permits to operate the
      Franchised Business.
    

    
      13.3.2.5 Make arrangements to modernize, upgrade, and conform the
      Franchised Business, at the transferee’s expense, to our then-current
      standards and specifications for new CuraFlo Businesses.
    

    
      13.3.2.6 All owners of a beneficial interest of five percent (5%)
      or more in the transferee must execute our then-current form of personal
      guarantee.
    

    
      13.3.2.7 If the proposed transferee is an existing CuraFlo
      franchisee, the proposed transferee must not be in default under any
      agreements with us and must have a good record of customer service and
      compliance with our operating standards.
    

    
      13.3.3 You, your Owners, and the transferee must execute a
      general release, in a form satisfactory to us, of all claims against us
      and our past, present and future affiliates, officers, directors,
      shareholders, agents and employees. You and your Owners will remain
      liable to us for all obligations arising before the effective date of
      the Transfer.
    

    
      13.3.4 The price and other proposed terms of the Transfer must
      not, in our reasonable business judgment, have the effect of negatively
      impacting the future viability of the Franchised Business.
    

    
      
        

        

      

      
        
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      13.3.5 If the Transfer is a pledge of any interest in this
      Agreement, the assets of the Franchised Business, or your ownership
      interests as collateral for a loan to a lender, we may require the
      execution of inter-creditor agreements.
    

    
      13.4 Transfer Of Partial Ownership Interest. For any
      proposal to admit a new Owner, to remove an existing Owner, or to change
      the distribution of ownership shown on Appendix A, or for any other
      transaction that amounts to the Transfer of a partial interest in the
      Franchised Business, you must give us advance notice and submit a copy
      of all proposed contracts and other information concerning the Transfer
      that we may request. We will have a reasonable time (not less than
      thirty (30) days) after we have received all requested information to
      evaluate the proposed Transfer. We may withhold our consent on any
      reasonable grounds or give our consent subject to reasonable conditions,
      which may include (but are not limited to) the conditions in Sections
      13.3.1, 13.3.2.1, and 13.3.3. You acknowledge that any proposed new
      owner must submit a personal application and execute a personal
      guarantee in the same form signed by the original Owners.
    

    
      13.5 Transfer Upon Death Or Incapacity. If you or any
      Owner dies, becomes incapacitated, or enters bankruptcy proceedings,
      that person’s executor, administrator, personal representative, or
      trustee must apply to us in writing within six (6) months after the
      event (death, declaration of incapacity, or filing of a bankruptcy
      petition) for consent to Transfer the person’s interest. The Transfer
      will be subject to the provisions of Section 13, as applicable. In
      addition, if the deceased or incapacitated person is the Operating
      Principal, we will have the right (but not the obligation) to take over
      operation of the Franchised Business until the Transfer is completed and
      to charge a reasonable management fee for our services. For
      purposes of this Section, “incapacity” means any physical or mental
      infirmity that will prevent the person from performing his or her
      obligations under this Agreement (1) for a period of thirty (30)
      or more consecutive days or (2) for sixty (60) or more total days
      during a calendar year. In the case of Transfer by bequest or by
      intestate succession, if the heirs or beneficiaries are unable to meet
      the conditions of Section 13.3, the executor may transfer the decedent’s
      interest to another successor that we have approved, subject to all of
      the terms and conditions for Transfers contained in this Agreement. If
      an interest is not disposed of under this Section 13.5 within six (6)
      months after the date of death or appointment of a personal
      representative or trustee, we may terminate this Agreement under Section
      16.2.
    

    
      13.6 Non-Conforming Transfers. Any purported Transfer that
      is not in compliance with this Section 13 is null and void and
      constitutes a material breach of this Agreement, for which we may
      terminate this Agreement without opportunity to cure. Our consent to a
      Transfer does not constitute a waiver of any claims that we have against
      the transferor, nor is it a waiver of our right to demand exact
      compliance with the terms of this Agreement.
    

    
      13.7 Our Right Of First Refusal. We have the right,
      exercisable within thirty (30) days after receipt of the notice
      specified in Section 13.2, to send written notice to you that we intend
      to purchase the interest proposed to be Transferred. We may assign our
      right of first refusal to someone else either before or after we
      exercise it. However, our right of first refusal will not apply with
      regard to a Transfer to your spouse or adult son or daughter (including
      Transfers to your spouse, son, or daughter as a result of death or
      incapacity as described in Section 13.5).
    

    
      13.7.1 If the Transfer is proposed to be made pursuant to a sale,
      we or our designee may purchase the interest proposed to be Transferred
      on the same economic terms and conditions offered by the third-party.
      Closing on our purchase must occur within sixty (60) days after the date
      of our notice to the seller electing to purchase the interest. If we
      cannot reasonably be expected to furnish the same consideration as the
      third-party, then we may substitute the reasonable equivalent in cash.
      If the parties cannot agree within thirty (30) days on the reasonable
      equivalent in cash, we will designate, at our expense, an independent
      appraiser and the appraiser’s determination will be final. Any material
      change in the terms of the offer from a third-party after we have
      elected not to purchase the seller’s interest will constitute a new
      offer subject to the same right of first refusal as the third party’s
      initial offer.
    

    
      
        

        

      

      
        
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      13.7.2 If a Transfer is proposed to be made by gift, we will
      designate, at our expense, an independent appraiser to determine the
      fair market value of the interest proposed to be transferred. We may
      purchase the interest at the fair market value determined by the
      appraiser. Closing on the purchase will occur within thirty (30) days
      after our notice to the transferor of the appraiser’s determination of
      fair market value.
    

    
      13.7.3 If we elect not to exercise our rights under this Section,
      the transferor may complete the Transfer after complying with Sections
      13.2 through 13.6. Closing of the Transfer must occur within sixty (60)
      calendar days of our election (or such longer period as applicable law
      may require); otherwise, the third-party’s offer will be treated as a
      new offer subject to our right of first refusal. The Transfer is
      conditional upon our determination that the Transfer was on terms
      substantially the same as those offered to us. You must provide to us
      copies of all fully-executed agreements and any other information we
      request relating to the Transfer.
    

    
      14       GENERAL RELEASE
    

    
      You (on behalf of yourself and your parent, subsidiaries and affiliates)
      and all Owners (collectively, “Releasors”) freely and without any
      influence forever release and covenant not to sue us, our parent,
      subsidiaries and affiliates and their respective past and present
      officers, directors, shareholders, agents and employees, in their
      corporate and individual capacities, with respect to any and all claims,
      demands, liabilities and causes of action of whatever kind or nature,
      whether known or unknown, vested or contingent, suspected or unsuspected
      (collectively, “claims”), which any Releasor now owns or holds or may at
      any time have owned or held, including, without limitation, claims
      arising under federal, state and local laws, rules and ordinances and
      claims arising out of, or relating to this Agreement and all other
      agreements between any Releasor and us or our parent, subsidiaries or
      affiliates, the sale of any franchise to any Releasor, the development
      and operation of the Franchised Business and the development and
      operation of all other businesses operated by any Releasor that are
      franchised by us or our parent, subsidiaries or affiliates.
    

    
      15       COVENANTS
    

    
      15.1 Confidential Information. During and after the Term,
      you may not communicate, divulge or use for any purpose other than the
      operation of the Franchised Business any confidential information,
      knowledge, trade secrets or know-how which may be communicated to you or
      which you may learn by virtue of your relationship with us. You may
      divulge confidential information only to your professional advisers and
      to your employees who must have access to the information to operate the
      Franchised Business. All information, knowledge and know-how relating to
      us, our business plans, or the System are deemed confidential for
      purposes of this Agreement, except information that you can demonstrate
      came to your attention by lawful means prior to our disclosure; or
      which, at the time of our disclosure to you, had become a part of the
      public domain. You must require your Operating Principal, Master
      Plumber, and key employees and any other person or entity to whom you
      wish to disclose any confidential information to execute agreements that
      they will maintain the confidentiality of the disclosed information. The
      agreements must be in a form satisfactory to us and must identify us as
      a third-party beneficiary with the independent right to enforce the
      agreements.
    

    
      
        

        

      

      
        
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      15.2 Restrictions During Term. You acknowledge and agree
      that: (1) pursuant to this Agreement, you will have access to
      valuable trade secrets, specialized training and confidential
      information from us and our affiliates regarding the development,
      operation, management, purchasing, sales and marketing methods and
      techniques of the System; (2) the System and the opportunities,
      associations and experience established by us and acquired by you under
      this Agreement are of substantial and material value; (3) in
      developing the System, we and our affiliates have made and continue to
      make substantial investments of time, technical and commercial research,
      and money; (4) we would be unable to adequately protect the
      System and its trade secrets and confidential information against
      unauthorized use or disclosure and would be unable to adequately
      encourage a free exchange of ideas and information among CuraFlo
      Businesses if franchisees were permitted to hold interests in
      competitive businesses; and (5) restrictions on your right to
      hold interests in, or perform services for, competitive businesses will
      not hinder your activities. Accordingly, you agree that, during the
      Term, you will not, without our prior written consent, either directly
      or indirectly through any other person or entity:
    

    
      15.2.1 Own, manage, engage in, be employed by, advise, make loans
      to, consult for, or have any other interest in a Competitive Business.
      “Competitive Business” means any residential or commercial business
      offering any pipe installation, maintenance or lining product or service
      that has the potential to divert CuraFlo customers or prospective
      customers away from CuraFlo Businesses;
    

    
      15.2.2 Divert or attempt to divert any business or customer, or
      potential business or customer, to any Competitive Business; or
    

    
      15.2.3 Induce any person to leave his or her employment with us.
    

    
      15.2.4 During the Term, there is no geographical limitation on
      these restrictions.
    

    
      15.3 Restrictions After Termination, Expiration Or Transfer.
      For a period of two (2) years after the expiration or termination of
      this Agreement or an approved Transfer of the Franchised Business to a
      new franchisee, you may not, without our prior written consent:
    

    
      15.3.1 Own, manage, engage in, be employed by, advise, make loans
      to, consult for, or have any other interest in any Competitive Business
      within ten (10) miles of your Territory or within ten (10) miles of the
      Territory of any other CuraFlo Business;
    

    
      15.3.2 Solicit any individual or company that has been a customer
      of the Franchised Business within one (1) year prior to the expiration,
      termination, or Transfer of this Agreement for the purpose of inducing
      that person or company to become a customer of any Competitive Business;
      or
    

    
      15.3.3 Induce any person to leave his or her employment with us.
    

    
      
        

        

      

      
        
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      15.4 Owners And Employees. The Owners personally bind
      themselves to this Section 15 by signing the attached Personal
      Guarantee. With respect to the Owners, the time period in Section 15.3.
      will run from the expiration, termination, or Transfer of this Agreement
      or from the termination of the Owner’s relationship with you, whichever
      occurs first. At our request, you must also obtain from your officers,
      directors, and employees, as we may designate, and furnish to us,
      executed noncompete and confidentiality agreements in a form acceptable
      to us.
    

    
      15.5 Indirect Violations Prohibited. You may not attempt
      to circumvent the restrictions in this Section 15 by engaging in
      prohibited activity indirectly through any other person or entity.
    

    
      15.6 Enforcement. You agree that the existence of any
      claim you may have against us, whether or not arising from this
      Agreement, will not constitute a defense to our enforcement of this
      Section 15. You agree to pay all costs and expenses that we reasonably
      incur in enforcing this Section 15, including reasonable attorneys’
      fees. You acknowledge that a violation of the terms of this Section 15
      would result in irreparable injury to us for which no adequate remedy at
      law may be available. Accordingly, you consent to the issuance of an
      injunction prohibiting any conduct in violation of the terms of this
      Section 15. Such injunctive relief will be in addition to any other
      remedies that we may have.
    

    
      15.7 Survival. The terms of this Section 15 will survive
      the termination, expiration, or any Transfer of this Agreement. The
      parties agree this Section 15 will be construed as independent of any
      other provision of this Agreement.
    

    
      16       TERMINATION
    

    
      16.1 Termination By Us Without Notice. You will be in
      material default under this Agreement and, to the extent permitted by
      law, all rights granted by this Agreement will automatically terminate
      without notice to you if you become insolvent or make an assignment for
      the benefit of your creditors; if a receiver is appointed for the
      Franchised Business; if execution is levied against your business
      assets; or if suit to foreclose any lien or mortgage or bankruptcy is
      instituted against you and not dismissed within sixty (60) days.
    

    
      16.2 Termination By Us Without A Cure Period. We may
      terminate this Agreement by written notice to you, without giving you an
      opportunity to cure, in any of the following circumstances:
    

    
      16.2.1 You: (1) make any material misrepresentation in
      connection with this Agreement, your application to us for the
      franchise, or during any interview; (2) you submit to us any
      report or statement that you know or should know to be false or
      misleading; or (3) you knowingly submit false warranty claims or
      claims containing information that you know to be false.
    

    
      16.2.2 Your Operating Principal fails to complete the initial
      training program to our reasonable satisfaction or fails to receive or
      maintain required certification.
    

    
      16.2.3 You fail to open your Franchised Business by the Opening
      Date specified in Appendix A.
    

    
      16.2.4 You fail to start work on your first CuraFlo job by the
      Commencement Date specified in Appendix A.
    

    
      
        

        

      

      
        
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      16.2.5 Your Operating Principal, or any of your Owners, officers
      or directors is convicted of a felony or any such crime or offense (even
      if not a crime) that we reasonably believe is likely to harm the
      reputation of the System, the Marks, or the CuraFlo brand.
    

    
      16.2.6 Any condition exists with respect to the Franchised
      Business that, in our reasonable judgment, seriously jeopardizes the
      health or safety of consumers or employees.
    

    
      16.2.7 A government action occurs that, in our sole judgment, may
      adversely impact the System, the Marks, or the CuraFlo brand or may
      result in an obligation on us which is uneconomical, not in our best
      interest, or would cause an unintended relationship or obligation.
    

    
      16.2.8 You refuse to permit, or try to hinder, an inspection of
      the Franchised Business or of your business records or a financial
      examination or audit of your books and records or of the Franchised
      Business as provided in this Agreement.
    

    
      16.2.9 You conceal revenue, including taking for your own use
      employee taxes, FICA, insurance or benefits, or any of our
      property.
    

    
      16.2.10 You underreport Gross Sales by two percent (2%) or more
      three (3) times in any thirty-six (36) month period or by five percent
      (5%) or more for any period.
    

    
      16.2.11 You interfere with our relations with third parties or
      our ability to license the System and the Marks or any other System or
      marks to a third party.
    

    
      16.2.12 You disclose the contents of the Manuals or other trade
      secrets or confidential information contrary to Section 15.
    

    
      16.2.13 Any Transfer occurs that does not comply with Section 13,
      including a failure to transfer to a qualified successor after death or
      disability within the time allowed by Section 13.5.
    

    
      16.2.14 You fail to purchase the minimum amount of epoxy required
      in Section 6.3 during any rolling ninety (90) day period and fail to
      cure the default within sixty (60) days.
    

    
      16.2.15 You remain in default beyond the applicable cure period
      under: (1) any agreement with us or our affiliates; or (2)
      any agreement with any vendor or supplier to the Franchised Business.
    

    
      16.2.16 After curing a default under Section 16.3, you commit the
      same default within twelve (12) months, whether or not the second
      default is cured.
    

    
      16.2.17 You are in default three or more times under Section 16.3
      within any eighteen (18) month period, whether or not the defaults are
      similar and whether or not they are cured.
    

    
      16.3 Termination By Us Following Expiration Of Cure Period.
      Except for those items listed in preceding Sections 16.1 or 16.2, you
      will have thirty (30) days after written notice of default from us
      within which to remedy the default and provide evidence of that remedy
      to us. If any such default is not cured within that time, this Agreement
      shall terminate without further notice to you effective immediately upon
      expiration of that time, unless we notify you otherwise in writing.
      Notwithstanding the foregoing, if the default cannot be corrected within
      thirty (30) days, you shall have such additional time to correct the
      default as reasonably required (not to exceed ninety (90) days) provided
      that you begin taking the actions necessary to correct the default
      during the thirty (30) day cure period and diligently and in good faith
      pursue those actions to completion. You will be in default under this
      Section 16.3 for any failure to materially comply with any of the
      requirements imposed by this Agreement, the Manuals or otherwise in
      writing, or to carry out the terms of this Agreement in good faith.
    

    
      
        

        

      

      
        
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      16.4 Cross-Default. Any default by you under any other
      agreement with us will constitute a default under this Agreement,
      subject to the provisions for notice and cure, if any, as may be
      applicable to the default under the other agreement.
    

    
      16.5 Early Termination Damages. If you do not wish to
      continue to operate the Franchised Business or if you Transfer the
      Franchised Business to an existing business in which the prospective
      Transferee does not meet the qualifications for a new CuraFlo
      franchisee, you may request our consent to an early termination of this
      Agreement. If we agree to terminate this Agreement on these grounds, you
      must pay us early termination damages equal to the average monthly
      Royalty payment that you made for the past twenty-four (24) months
      multiplied by the lesser of twenty-four (24) months or the number of
      months remaining in the Term. If you have not operated the Franchised
      Business for twenty-four (24) months, your early termination damages
      will be calculated by using your average monthly Royalty payment for the
      number of months that the Franchised Business has been in operation. You
      acknowledge that a precise calculation of the full extent of the damages
      we will incur in the event of the early termination of this Agreement is
      difficult to determine and that this lump sum payment is reasonable in
      light of the damages for early termination which we will incur. This
      lump sum payment will be in addition to all amounts provided above in
      Section 17.1.4.
    

    
      17       OBLIGATIONS ON TERMINATION OR EXPIRATION 
    

    
      17.1 Your Obligations
    

    
      Upon termination or expiration of this Agreement for any reason, unless
      we direct you otherwise:
    

    
      17.1.1 All rights and licenses granted to you under this
      Agreement (including, without limitation, rights to use the System, the
      Manuals, and the Marks) shall immediately terminate and any right,
      title, and interest claimed by you to any such matters shall immediately
      revert to us without further notice or documentation.
    

    
      17.1.2 You shall immediately cease to operate the Franchised
      Business and shall not thereafter, directly or indirectly, represent to
      the public or hold yourself out as a present or former franchisee of the
      System.
    

    
      17.1.3 You shall immediately and permanently cease to use, in any
      manner whatsoever, the System, the Marks, and the Manuals.
    

    
      17.1.4 You must promptly pay all sums owing to us, our
      affiliates, any lender that has provided financing to you, and your
      suppliers under this Agreement or any other agreement with us. Such sums
      include, but are not limited to, Royalties, MBF Contributions or other
      fees, damages, expenses, and attorneys’ fees incurred as a result of
      your default.
    

    
      
        

        

      

      
        
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      17.1.5 You must cease to use in advertising or in any manner the
      confidential methods, procedures, and techniques associated with the
      System, including all proprietary processes.
    

    
      17.1.6 Unless we direct you to maintain your existing signage
      while we determine if we will exercise our option to purchase under
      Section 17.5, you must immediately cease to use, by advertising or in
      any other manner, the names “Cura,” “Flo,” and “CuraFlo,” all other
      Marks, and all other distinctive forms, slogans, signs, symbols, web
      sites, domain names, email addresses, and devices associated with the
      System. If you subsequently begin to operate another business, you must
      not use any reproduction, counterfeit, copy, or colorable imitation of
      the Marks in connection with that business that is likely to cause
      confusion, mistake or deception, or which is likely to dilute our
      exclusive rights in and to the Marks, nor any trade dress or designation
      of origin or description or representation that falsely suggests or
      represents an association or connection with us. Within fifteen (15)
      calendar days, you must promptly take such action as may be necessary to
      cancel any DBAs, assumed name registration or equivalent registration,
      and any domain name registration that contains the name “Cura”, “Flo”,
      “CuraFlo” or any other Marks.
    

    
      17.1.7 Unless we direct you to maintain the existing appearance
      of the Franchised Location and vehicles while we determine if we will
      exercise our option under Section 17.5, you must make modifications or
      alterations to the Franchised Location, vehicles, and the Franchised
      Business immediately upon termination or expiration of this Agreement as
      necessary to prevent the operation of any business in violation of this
      Section 17 and any specific additional changes we reasonably request for
      that purpose. Upon our request, you must return to us, at our cost, any
      signage that we specify. If you fail to comply with this Section within
      thirty (30) days following termination or expiration of this Agreement,
      we have the right to enter the premises, without being guilty of
      trespass or any other tort, for the purpose of removing signs and any
      other articles that display the Marks. You agree to reimburse us on
      demand for our expenses in making such changes.
    

    
      17.1.8 You must immediately deliver to us the Manuals and all
      training materials, CD ROMs, DVDs, advertising and promotional
      materials, records, files, instructions, trade secrets and confidential
      material, and correspondence in your possession or control that contain
      confidential information (as described in Section 15.1). You also must
      uninstall any software that we have provided, and return any copies,
      equipment, and other property owned by us or our affiliates.
    

    
      17.1.9 You must execute any agreements that we require for
      termination.
    

    
      17.2 Evidence Of Compliance. You shall furnish to us,
      within thirty (30) days after the effective date of termination or
      expiration, evidence (certified to be true, correct and complete, by an
      officer or Owner) satisfactory to us of your compliance with Section
      17.1.
    

    
      17.3 Other Business Operations. You shall not, except with
      respect to a CuraFlo Business franchised by us or our affiliates that is
      then open and operating pursuant to an effective Franchise Agreement: (1) operate
      or do business under any name or in any manner that might tend to give
      the public the impression that you are connected in any way with us or
      our affiliates or have any right to use the System or the Marks; (2) make,
      use or avail yourself of any of the materials or information furnished
      or disclosed by us or our affiliates under this Agreement or disclose or
      reveal any such materials or information or any portion thereof to
      anyone else; or (3) assist anyone not licensed by us or our
      affiliates to construct, equip, or operate a business substantially
      similar to a CuraFlo Business.
    

    
      
        

        

      

      
        
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      17.4 Listings. We will have the option, exercisable by
      written notice within thirty (30) days after the termination or
      expiration of this Agreement, to take an assignment of all telephone
      numbers, facsimile numbers, domain names, or other numbers, names and
      telephone directory listings (collectively, “Listings”) associated with
      any Mark or the Franchised Business, and you must notify the telephone
      company, all telephone directory publishers, and all domain name
      registries and Internet service providers of the termination or
      expiration of your right to use any Listing associated with the
      Franchised Business, and authorize and instruct their transfer to us or
      to a third party, at our direction and/or to instruct the telephone
      company, domain name registries and Internet service providers to
      forward all calls, e-mails and electronic communications made to your
      names, numbers or addresses to names, numbers or addresses we specify.
      You are not entitled to any compensation from us if we exercise this
      option.
    

    
      17.5 Our Option To Purchase. We have the right,
      exercisable at any time from sixty (60) days before to sixty (60) days
      after the effective date of the expiration or termination of this
      Agreement, to purchase any or all equipment or un-opened products used
      in the Franchised Business. We have the right to set off any payment for
      the equipment or products against all amounts due to us from you. We
      will pay you for products at your cost, less a twenty percent (20%)
      restocking fee, less our shipping costs. We will pay you for equipment
      the fair market value, less our shipping costs.
    

    
      17.6 Enforcement. You must pay all damages, costs, and
      expenses, including, but not limited to, reasonable attorneys’ fees,
      incurred by us subsequent to the expiration or termination of this
      Agreement in enforcing Section 16.5, 16.6 or this Section 17.
    

    
      17.7 Liquidated Damages On Default. If we terminate this
      Agreement based on your default, you must pay us a lump sum payment (as
      damages and not as a penalty) for breaching this Agreement in an amount
      equal to the average monthly Royalty payment, MBF Contribution and epoxy
      purchases that you made for the past twenty-four (24) months multiplied
      by the lesser of twenty-four (24) months or the number of months
      remaining in the Term. If you have not operated the Franchised Business
      for twenty-four (24) months, your liquidated damages will be calculated
      by using your average monthly Royalty, MBF Contribution and epoxy
      purchases for the length of time the Franchised Business has been in
      operation. You acknowledge that a precise calculation of the full extent
      of the damages we will incur in the event of termination of this
      Agreement as a result of your default is difficult to determine and that
      this lump sum payment is reasonable in light of the damages for
      premature termination which we will incur. This lump sum payment will be
      in lieu of any damages we may have incurred as a result of your default,
      but it shall be in addition to all amounts provided above in Section
      17.1.4 and any attorney’s fees and other costs and expenses to which we
      are entitled pursuant to Sections 3.8 or 24.8. Your payment of this lump
      sum shall not affect our right to obtain appropriate injunctive relief
      and remedies to enforce Section 15 and specific performance to enforce
      this Section 17.
    

    
      18       RELATIONSHIP OF THE PARTIES
    

    
      This Agreement does not create a fiduciary or other special relationship
      or make you or us an agent, legal representative, joint venturer,
      partner, employee or servant of each other for any purpose. You are not
      authorized to make any contract, agreement, warranty or representation
      on our behalf, or to create any obligation, express or implied, on our
      behalf.
    

    
      
        

        

      

      
        
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      During the Term, you agree to hold yourself out to the public as an
      independent contractor operating the Franchised Business under license
      from us, and you agree to disclose your status as independent contractor
      in all business dealings and exhibit a notice to that effect (the
      location and content of which we reserve the right to specify) on all
      promotional materials, invoices and stationery.
    

    
      19       INDEMNIFICATION
    

    
      You agree to hold harmless, defend, and indemnify us and our past,
      present and future affiliates, officers, directors, shareholders,
      agents, attorneys, consultants, and employees against any claims,
      losses, costs, expenses (including, but not limited to, reasonable
      attorneys’ fees, costs of investigation, settlement costs, and
      interest), liabilities and damages (collectively, “Claims”) arising
      directly or indirectly from, as a result of, or in connection with your
      activities under this Agreement. With respect to any threatened or
      actual litigation, proceeding, or dispute that could directly or
      indirectly affect us or any of the other indemnitees under this Section,
      if you do not assume the active defense of the matter within a
      reasonable time, we will have the right, but not the obligation, to: (1)
      choose counsel; (2) direct and control the handling of the
      matter; and (3) settle any claim against the indemnitees. This
      Section will survive the expiration or termination of this Agreement,
      and applies to Claims even if they exceed the limits of your insurance
      coverage.
    

    
      20       CONSENTS AND WAIVERS
    

    
      20.1 Approval or Consent. Whenever our prior written
      approval or consent is required under this Agreement, you agree to make
      a timely written request to us for such consent. Our approval or consent
      must be in writing and signed by an authorized officer to be effective.
    

    
      20.2 No Warranties. We make no warranties or guarantees
      upon which you may rely by providing any waiver, approval, consent or
      suggestion to you in connection with this Agreement and assume no
      liability or obligation to you therefor, or by reason of any neglect,
      delay, or denial of any request therefor. We will not, by virtue of any
      approvals, advice or services provided to you, assume responsibility or
      liability to you or to any third parties to which we would not otherwise
      be subject.
    

    
      20.3 Waivers. No delay or failure to exercise any right
      under this Agreement or to insist upon your strict compliance with any
      obligation or condition, and no custom or practice that differs from the
      terms of this Agreement, will constitute a waiver of our right to
      exercise the contract provision or to demand your strict compliance with
      the terms of this Agreement. Our waiver of any particular default does
      not affect or impair our rights with respect to any subsequent default
      you may commit. Our waiver of a default by another franchisee does not
      affect or impair our right to demand your strict compliance with the
      terms of this Agreement. Our acceptance of any payments due from you
      does not waive any prior defaults.
    

    
      21       NOTICES
    

    
      Notices related to this Agreement will be effective upon receipt (or
      first rejection) may be given by any of the following delivery methods: (1)
      certified or registered mail; (2) U.S. Priority Mail or national
      commercial delivery service (UPS, Federal Express, DHL); or (3)
      facsimile (if the sender receives machine confirmation of successful
      transmission). Notices to you and us must be sent to the addresses on
      the first page of this Agreement. Notices to us by facsimile should be
      sent to 216.910.1793. Either party can change its notice address by
      informing the other party.
    

    
      
        

        

      

      
        
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      22       ENTIRE AGREEMENT
    

    
      Each element of this Agreement is essential and material and that,
      except as otherwise provided in this Agreement, the parties shall deal
      with each other in good faith. This Agreement, the Manuals, the
      documents referred to in this Agreement and the attachments to this
      Agreement constitute the entire agreement between the parties with
      respect to the Franchised Business and supersede all prior negotiations,
      representations, correspondence and agreements concerning the same
      subject matter. There are no other representations, inducements,
      promises, agreements, arrangements, or undertakings, oral or written,
      between the parties relating to the matters covered by this Agreement
      other than those set forth in this Agreement and in the attachments. No
      obligations or duties that contradict or are inconsistent with the
      express terms of this Agreement may be implied into this Agreement.
      Except as expressly set forth in this Agreement, no amendment, change or
      variance from this Agreement shall be binding on either party unless
      mutually agreed to by the parties and executed in writing.
    

    
      23       SEVERABILITY AND CONSTRUCTION
    

    
      23.1 Severability. Each provision of this Agreement is
      severable from the others. If, for any reason, any provision is
      determined by a court to be invalid, the invalidity will not impair the
      operation of the remaining provisions of this Agreement. The latter will
      continue to be given full force and effect and bind us and you.
    

    
      23.2 Survival. Each provision of this Agreement that
      expressly or by reasonable implication is to be performed, in whole or
      in part, after the expiration, termination, or Transfer of this
      Agreement will survive such expiration, termination, or Transfer.
    

    
      23.3 Interpretation. Except as expressly provided, nothing
      in this Agreement is intended, or will be deemed, to confer any rights
      or remedies upon any person or legal entity other than you and us.
    

    
      23.4 Our Discretion. Whenever we have expressly reserved
      in this Agreement a right and/or discretion to take or withhold an
      action, or to grant or decline to grant you a right to take or withhold
      an action, except as otherwise expressly and specifically provided in
      this Agreement, we may make such decision or exercise our right and/or
      discretion on the basis of our judgment of what is in our best
      interests. This also applies if we are deemed to have a right and/or
      discretion. Our judgment of what is in the best interests of the System,
      at the time our decision is made or our right or discretion is
      exercised, can be made without regard to whether: (1) other
      reasonable alternative decisions or actions, or even arguably preferable
      alternative decisions or actions, could have been made by us; (2) our
      decision or the action taken promotes our financial or other individual
      interest; (3) our decision or the action taken applies
      differently to you and one or more other franchisees or our
      company-owned or affiliate-owned operations; or (4) our decision
      or the action taken is adverse to your interests. We will have no
      liability to you for any such decision or action. We and you intend that
      the exercise of our right or discretion will not be subject to
      limitation or review. If applicable law implies a covenant of good faith
      and fair dealing in this Agreement, we and you agree that such covenant
      will not imply any rights or obligations that are inconsistent with a
      fair construction of the terms of this Agreement and that this Agreement
      grants us the right to make decisions, take actions and/or refrain from
      taking actions not inconsistent with your rights and obligations under
      this Agreement.
    

    
      
        

        

      

      
        
          33
        

        
          

        

      

      
        

        

      

    

    
      24       DISPUTE RESOLUTION
    

    
      24.1 Submission To Mediation. Except as provided in
      Section 24.7, either party may submit any claim, controversy, or dispute
      arising out of this Agreement to non-binding mediation administered by
      the American Arbitration Association, according to their procedures or
      rules, or administered by another mediation service that we mutually
      agree to use. The parties will not be required to pursue mediation of
      any claim, controversy, or dispute as a prerequisite to filing a lawsuit
      or commencing other legal proceedings and the pendency of a mediation
      will not cause any legal proceedings to be stayed pending the outcome of
      the mediation. Once either party has submitted a dispute to mediation,
      the obligation to attend will be binding on both parties. Both parties
      must sign a confidentiality agreement before participating in any
      mediation proceeding. The mediation will take place in the city where
      our principal offices are located at the time the demand for mediation
      is filed.
    

    
      24.2 Choice Of Law. This Agreement and the relationship
      between the parties is governed by and will be construed in accordance
      with the laws of the State of Ohio except that Sections 15.2 and 15.3
      will be governed by the laws of the state in which the Franchised
      Business is located. In the event of any conflict-of-law question, the
      laws of the State of Ohio will prevail, without regard to the
      application of Ohio conflict-of-law rules. Nothing in this Section is
      intended, or will be deemed, to make any Ohio law regulating the offer
      or sale of franchises or the franchise relationship applicable to this
      Agreement if such law would not otherwise be applicable.
    

    
      24.3 Choice Of Forum. The parties agree that, to the
      extent any disputes cannot be resolved directly between them, you must
      file any suit against us only in the federal or state court having
      jurisdiction where our principal offices are located at the time suit is
      filed. We may file suit in the federal or state court located in the
      jurisdiction where our principal offices are located at the time suit is
      filed or in the jurisdiction where you reside or do business or where
      your Territory is located or where the claim arose. You consent to the
      personal jurisdiction of those courts over you and to venue in those
      courts.
    

    
      24.4 Mutual Waiver Of Jury Trial. Each of us irrevocably
      waives trial by jury in any litigation.
    

    
      24.5 Mutual Waiver Of Punitive Damages. Each of us waives
      any right to or claim of punitive, exemplary, multiple or consequential
      damages against the other in litigation and agrees to be limited to the
      recovery of actual damages sustained. You acknowledge that Section 16.6.
      represents a reasonable estimate of our actual damages that would result
      from termination of this Agreement based on your default.
    

    
      24.6 Remedies Not Exclusive. Except as provided in
      Sections 24.1 through 24.5, no right or remedy that the parties have
      under this Agreement is exclusive of any other right or remedy under
      this Agreement or under applicable law.
    

    
      24.7 Our Right To Injunctive Relief. Nothing in this
      Agreement bars our right to obtain injunctive or declaratory relief
      against a breach or threatened breach of this Agreement that will cause
      us loss or damage. You agree that we will not be required to prove
      actual damages or post a bond or other security in seeking or obtaining
      injunctive relief (both preliminary and permanent) and/or specific
      performance.
    

    
      
        

        

      

      
        
          34
        

        
          

        

      

      
        

        

      

    

    
      24.8 Reimbursement Of Costs And Expenses. If either party
      brings an action to enforce this Agreement in a judicial proceeding, the
      party prevailing in that proceeding will be entitled to reimbursement of
      costs and expenses, including, but not limited to, reasonable
      accountants’, attorneys’, attorneys’ assistants’ and expert witness
      fees, the cost of investigation and proof of facts, court costs, other
      litigation expenses, and travel and living expenses, whether incurred
      prior to, in preparation for, or in contemplation of the filing of, the
      proceeding. If we utilize legal counsel (including in-house counsel
      employed by us) in connection with any failure by you to comply with
      this Agreement, you must reimburse us for any of the above-listed costs
      and expenses incurred by us. In any judicial proceeding, the amount of
      these costs and expenses will be determined by the court and not by a
      jury.
    

    
      24.9 Rights Of Parties Are Cumulative. The parties’ rights
      under this Agreement are cumulative and the exercise or enforcement of
      any right or remedy under this Agreement will not preclude the exercise
      or enforcement by a party of any other right or remedy under this
      Agreement that it is entitled by law or this Agreement to exercise or
      enforce.
    

    
      25       MISCELLANEOUS
    

    
      25.1 Gender And Number. All references to gender and
      number will be construed to include such other gender and number as the
      context may require.
    

    
      25.2 Captions. All captions in this Agreement are intended
      solely for the convenience of the parties, and none will be deemed to
      affect the meaning or construction of any provision of this Agreement.
    

    
      25.3 Counterparts. This Agreement may be executed in
      counterparts, and each copy so executed and delivered will be deemed an
      original.
    

    
      25.4 Time. Time is of the essence of this Agreement for
      each provision in which time is a factor.
    

    
      25.5 Injunctive Relief. You recognize that your failure to
      comply with the terms of this Agreement, including, but not limited to,
      the failure to fully comply with all post-termination obligations, is
      likely to cause irreparable harm to us, our affiliates and the System.
      Therefore, you agree that, in the event of a breach or threatened breach
      of any of the terms of this Agreement by you, we will be entitled to
      injunctive relief (both preliminary and permanent) restraining that
      breach and/or to specific performance without showing or proving actual
      damages and without posting any bond or security. Any equitable remedies
      sought by us will be in addition to, and not in lieu of, all remedies
      and rights that we otherwise may have arising under applicable law or by
      virtue of any breach of this Agreement.
    

    
      25.6 Terrorist Acts. You acknowledge that under applicable
      U.S. law, including, without limitation, Executive Order 13224, signed
      on September 23, 2001 (“Order”), we are prohibited from engaging in any
      transaction with any person engaged in, or with a person aiding any
      person engaged in, acts of terrorism, as defined in the Order.
      Accordingly, you represent and warrant to us that, as of the date of
      this Agreement, neither you nor any person holding any ownership
      interest in you, controlled by you, or under common control with you is
      designated under the Order as a person with whom business may not be
      transacted by us, and that you: (1) do not, and hereafter
      will not, engage in any terrorist activity; (2) are not
      affiliated with and do not support any individual or entity engaged in,
      contemplating, or supporting terrorist activity; and (3) are
      not acquiring the rights granted under this Agreement with the intent to
      generate funds to channel to any individual or entity engaged in,
      contemplating, or supporting terrorist activity, or to otherwise support
      or further any terrorist activity.
    

    
      
        

        

      

      
        
          35
        

        
          

        

      

      
        

        

      

    

    
      26       ACKNOWLEDGMENTS
    

    
      26.1 Independent Investigation.
    

    
      You acknowledge that:
    

    
      26.1.1 You have conducted an independent investigation of the
      business venture contemplated by this Agreement and recognize that it
      involves business risks and that your results will be largely dependent
      upon your own efforts and ability;
    

    
      26.1.2 Any financial performance information presented in our
      franchise disclosure document is not a warranty or guaranty of the
      results that you will achieve, and your experience is likely to differ;
      and
    

    
      26.1.3 We do not, by virtue of any approvals or advice provided
      to you, assume responsibility or liability to you or any third-party to
      which we would otherwise not be subject.
    

    
      IN WITNESS WHEREOF, the parties have executed and delivered this
      Agreement on the date stated on the first page of this Agreement.
    

    	
          CURAFLO FRANCHISING INC.
        	
           
        	
          [INSERT FRANCHISEE NAME]
        
	
          By:
        	
           
        	

        	
          By:
        	
           
        
	
          Print Name:
        	
           
        	

        	
          Print Name:
        	
           
        
	
          Title:
        	
           
        	

        	
          Title:
        	
           
        

    

    

    
      36Exhibit 10.1

                   Marketing and Sales Distribution Agreement

                         NO. 2008/03 ON MARCH 6TH, 2008

Company DAQING SOLO COMPANY, LTD., hereinafter referred to as the "SELLERS",  on
the one part,  and AZURE  INTERNATIONAL,  INC.,  hereinafter  referred to as the
"BUYERS"  on the other  part,  have  concluded  the  present  Agreement  for the
following:

THE BUYER:

AZURE INTERNATIONAL, INC.
Address: 20 PERESVETA ST, SUITE 26, BRYANSK, RUSSIA, 241019
TEL. +7-905-177-4726 FAX. +1-702-974-1814

THE SELLER:

DAQING SOLO COMPANY, LTD.
Address: NO. 9 DONGFENG XICUN WENHUA STREET, DAQING CITY, HEILONGJIANG PROV,
         CHINA POST CODE: 163311
Tel: 0086-459-4688629
Fax: 0086-459-6362826

Both the above-mentioned parties agreed with the following conditions:

1. THE SUBJECT OF THE AGREEMENT

"SELLER" sells and "BUYER" buys Shower rooms and spare parts:

     -    shower room glass sides for further using in US and Canada;
     -    fastening materials:  plastic angles,  rollers,  atomizers for further
          using in US and Canada;
     -    spare parts and completing parts for further using in US and Canada;

In quantity and assortment  according to Proforma  Invoice which are made out on
each batch of the Goods  separately,  are assured by signatures  and seal of the
Parties (sides), and are an integral part of the Agreement.  The goods under the
given  Agreement  will be put to US and Canada on conditions  FOB SHANGHAI,  FOB
NINGBO, FOB Yantai, or FOB Shenzhen.

2. THE PRICE AND THE TOTAL SUM OF THE AGREEMENT

2.1. The total sum of the Agreement is: 20 000 US dollars  (twenty  thousands US
dollars ).

2.2 The  Prices for the Goods sold  under the  present  Agreement,  are fixed in
price-lists in US dollars, understood FOB SHANGHAI or FOB NINGBO, FOB YANTAI, OR
FOB  SHENZHEN,  and are  specified in Proforma  Invoice and  Commercial  invoice
accompanying each batch of the Goods.  Packing,  normal marks,  loading,  export
customs charges are included into the price of the Goods.
Currency of the Agreement is US dollars.
<PAGE>
3. DELIVERY TERMS

3.1 Delivery of the Goods is carried out by separate  batches,  according to the
Proforma Invoice. The SELLER undertakes to deliver each batch of the Goods under
the present Agreement not later than 25 days since the moment of reception of an
advance payment.

3.2. Within 24 hours after shipment of Goods the SELLER undertakes to inform the
BUYERS by fax:  +1-702-974-1814 about date of shipment. The date of delivery and
date of passing the property  right is  considered to be the date of loads goods
on board.

4. PAYMENT TERMS

Currency  of payment is US  dollars.  Payment of the Goods  delivered  under the
present  Agreement,  is carried  out by the BUYER in US  dollars,  through  bank
transaction  to the account of the SELLER,  according to Proforma  Invoice.  The
advance  payment for the goods is 20 % and is  transacted  according to Proforma
Invoice.  The rest of the  payment - 80 % for each batch of the Goods is carried
out after loading the container and sending  corresponding  documents  copies by
fax to the Buyer. Originals of documents are sent the Buyer after accepting 100%
of  payment  for  the  Goods  within  5  days  by  special   express-mail   (DHL
International), the Seller bears the charges.

5. PACKING, QUALITY OF THE GOODS AND THE GUARANTEE OF THE SELLER

5.1. The Goods should be shipped in the standard packing providing safety of the
goods. The SELLER bears the responsibility for the losses connected to damage of
a cargo as a result of his wrong packing.

5.2.  Acceptance  of the goods by amount is made by transfer of the goods of the
transport  organization  Carrying  out  delivery  of the  goods  for the  Buyer.
Acceptance  of the goods on  quality  is made  within 20 days from the moment of
reception of the goods in a warehouse of the Buyer.

5.3. In case of delivery of the poor-quality  goods within 45 days from shipping
date or at time of opening the  container  the SELLER  undertakes to replace the
poor-quality goods  qualitative,  thus the transport and other charges connected
with replacement of the poor-quality  goods are carried by the SELLER.

5.4. The SELLER  guarantees,  that the quantity of the put Goods will correspond
to the quantity  specified in the  Agreement.  The SELLER  guarantees,  that the
quality of the goods will be as the samples, which was transferred by the SELLER
to the BUYER.

6. THE PENALTY SANCTIONS

6.1. If the SELLER does not provide delivery of the Goods in time  unreasonably,
specified  in the order,  and does not notify  properly  on it the BUYER it (he)
pays the penalty at a rate of 0,1 % from the sum of the Agreement US dollars per
every day of delay.

6.2.  In case of  incomplete  delivery  of the Goods the  SELLER is  obliged  to
provide delivery the Goods in the terms coordinated by the parties (sides) or to
compensate  shortage in money's worth.

6.3. In case of infringement of term of payment for the Goods, the BUYER pays to
the  SELLER  the fine of 0,1%  from the sum of the  Agreement  per  every day of
delay.

6.4. In case of  impossibility  of delivery of the goods during 40 days from the
moment of  realization  of payment,  the SELLER  undertakes to return an advance
payment in the full size, in time,  thus having paid to the BUYER 0,1 % from the
sum of the Agreement per every day of a delay.

                                       2
<PAGE>
7. DOCUMENTS REQUIRED

     1.   Marketing and Sales Distribution Agreement (original);
     2.   Bill of lading (Sea bills)
     3.   Packing list
     4.   Commercial Invoice;

8. FORCE-MAJEUR

The  Parties  are  released   from   responsibility   for  partial  or  complete
non-fulfillment  of their  liabilities  under  the  present  Agreement,  if this
non-fulfillment was caused by the circumstances of Force-majeur,  namely:  fire,
flood,  earthquake,  provided  the  circumstances  have  directly  affected  the
execution of the present Agreement.  In this case the time of fulfillment of the
Agreement obligations is extended for the period equal to that during which such
circumstance last. The Party, for which it became impossible to meet obligations
under  the  Agreement,  is to  notify in  written  form the  other  Party of the
beginning and cessation of the above circumstances immediately,  but in any case
not later than ten days of the moment of their  beginning.  The  notification of
Force Majeure  circumstances  not made within 15 days deprives the corresponding
Party of the right to refer to such circumstances in future.

The written  evidence  issued by the  respective  Chambers of Commerce will be a
sufficient   proof  of  the  existence  and  duration  of  the  above  Indicated
circumstances.  If these  circumstances  last longer than six months,  then each
Party will be  entitled to cancel the whole  Agreement  or any part of it and in
this case  neither  Party  shall  have the right to demand any  compensation  of
eventual  losses  from the  other  Party.  The  SELLERS  undertake  in this case
immediately to return all the goods paid lately under the present Agreement.

9. ARBITRATION

9.1.All disputes and the disagreements, able to arise from the present Agreement
or in connection with it, will be whenever possible to be solved by negotiations
(peace talks) between the Parties. 9.2. In case the Parties will not come to the
agreement  business  is subject to the China  International  Economic  and Trade
Arbitration Commission (Beijing) according to the related international law. The
decision of arbitration Court is final and obligatory for both Parties.

10. OTHER CONDITIONS

The Agreement acts from the date of signing and operates for two years.

The Agreement can be changed,  terminates only under the mutual agreement of the
parties.  The Agreement can be prolonged till one year,  according to the mutual
agreement  of the sides.  Any of the parties has no right to transfer  the third
party of the right and the obligation  under the present  Agreement  without the
written  approval  of other  Party.  All  additions  and changes for the present
Agreement,  signed by the  parties  are his  integral  part.  The  Agreement  or
additions to the Agreement,  transferred on channels of facsimile communication,
have validity.

11. INSURANCE

The Buyer is responsible to cover expenses for insurance of the goods.

                                       3
<PAGE>
12. LEGAL ADDRESSES OF THE PARTIES

THE BUYER:

AZURE INTERNATIONAL, INC.
Address: 20 PERESVETA ST, SUITE 26, BRYANSK, RUSSIA, 241019
TEL. +7-905-177-4726 FAX. +1-702-974-1814

THE SELLER

DAQING SOLO COMPANY, LTD.
Address: NO. 9 DONGFENG XICUN WENHUA STREET, DAQING CITY, HEILONGJIANG PROV,
         CHINA POST CODE: 163311
Tel: 0086-459-4688629
Fax: 0086-459-6362826

SELLER:

/s/ "signed"
---------------------------------

BUYER:

/s/ "signed"
---------------------------------

                                       4

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