Exhibit,Appendix: GERALD D MITCHELL vs SWIFT TRANSPORTATION CORP

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                                SURDYK, DOWD & TURNER
CO, LRA.
(ONE PRESTIGE PLACE
SUITE 700
MIAMISBURG, OHIO «5342
‘TEL: 997/222-2503
FAX: 997/222-1970

Redacted by Clerk of Court

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maa pSqnen ass coun on onrcow fHnaE

* COUMCH PLEAS CIVIL DIVISION
TM ULIS P B12

  
 

STATE Fl (TUAL-AUTOMOBILE : CONSOLIDATED
INSURANEE'GO CASE NOS.: 2008-CV-02228
nett i : 2008-CV-02768
Plaintiffs, 2008-CV-07627

vs. : 2008-CV-10779
2009-CV-00873
MICHAEL L. WALLACE, et al. '
JUDGE MARY WISEMAN
Defendants.

 

DEFENDANTS’ NOTICE OF SUPPLEMENTAL EXHIBIT IN SUPPORT OF
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

 

 

 

Now come Defendants, Stanley Steemer International, Inc., Sevitts Enterprises, Inc., and
Kyle Colbert, by and through counsel, and hereby give notice to the Court of supplemental
Exhibit A to be filed in support of Defendant Stanley Steemer International, Inc.’s Motion
for Summary Judgment; Motion for Partial Summary Judgment of Defendants Sevitts
Enterprises, Inc. and Kyle Colbert. Exhibit A, attached to the Affidavit of D. Ryan
Jankowski (Exhibit B of Defendants’ Motion for Summary Judgment) is necessary to the
Court’s consideration of the pending Motion for Summary Judgment filed by Defendants on
July 7, 2009. A copy of Exhibit A is attached hereto.

Respectfully submitted,

   

SURDYK, DOWD

CA f

URNER, CO., L.P.A.

      

Edward J. Dow #0018681
Kevin A. Lantz #0063822
1 Prestige Place

Suite 700

Miamisburg, Ohio 45342

(937) 222-2333

FAX — (937) 222-1970
edowd@sdtlawyers.com
klantz@sdtlawyers.com

Attorneys for Defendants Kyle Colbert,
Sevitts Enterprises, and Stanley Steemer
International, Inc.SURDYK, DOWD ée TURNER
CO, LBA.
ONE PRESTIGE PLACE
‘SUITE700
MIAMISBURG, OW10 65342
‘TeL: 957/222-2935
FAX: 937/222-1970

 

 

CERTIFICATE OF SERVICE

The undersigned hereby certifies that a copy of the foregoing was served via
ordinary U.S. Mail this Le) day of July, 2009, upon the following:

J. Pierre Tismo, Esq.

DYER, GAROFALO, MANN & SCHULTZ
131 North Ludlow Street

Talbott Tower, Suite #1400

Dayton, OH 45402

Attorney for Plaintiffs Curtis McNichols

and Jessi Mae Travis

Frank Leonetti, HI, Esq.

REMINGER CO., L.P.A.

1400 Midland Building

101 Prospect Avenue, West

Cleveland, OH 44115-1093

Attorney for Defendants Swift Transportation
Corp. and Michael Wallace

Joseph J. Golian, Esq.

Shannon K. Benton, Esq.
GOLIAN McCAFFREY, LLC
2109 Stella Court

Columbus, OH 43215

Attorney for Defendants Werner
Enterprises, Inc. and Jean M. Don

Sanford A. Meizlish, Esq.

360 South Grant Avenue

P.O. Box 1989

Columbus, OH 43216

Attorney for Plaintiff Gerald Mitchell

Edward J. DoWd, Esq.
Kevin A. Lantz, Esq.

Steven J. Zeehandelar, Esq.
ZEEHANDELAR, SABATINO &
ASSOCIATES

471 East Broad Street, Suite #1200
Columbus, OH 43215

Attorney for Plaintiff State Farm
Mutual Automobile Ins. Co.

Lisa A. Pavlik, Esq.

ACS Recovery Services, Inc.

1301 Basswood Road

Schaumburg, IL 60173

Attorney for Defendant Connecticut
General Life Ins. Co. (CIGNA)

Todd W. Smith, Esq.

KREINER & PETERS CO., LPA
6047 Frantz Road, Suite #203
Dublin, OH 43017

Attorney for Plaintiff Allstate
Insurance Co,

 

 

(0018681)
(0063922)ORIGINAL

STANLEY STEEMER INTERNATIONAL, INC. pagar
FRANCHISE AGREEMENT i

THIS FRANCHISE AGREEMENT is made this 13% day of June, 2003, by and between STANLEY
STEEMER INTERNATIONAL, INC., an Ohio corporation with its principal place of business at 5500 Stanley
Steemer Parkway, Dublin, Ohio (hereinafter referred to as "Stanley Steemer”), and Sevitts Enterprises, Inc., an Ohio
corporation (hereinafter referred to as "Franchise Owner").

WHEREAS, Stanley Steemer owns the entire right, title and interest, together with all the goodwill
comnected therewith, in various trade secrets, trademarks and service marks, including the name and symbol of

Stanley Steemer, which are used by Stanley Steemer in identifying, advertising, promoting and marketing various
carpet and upholstery cleanmg services (hereinafter referred to as the Stanley Stecmer Trademarks); and

WHEREAS, Stanley Steemer is the owner of certain patents for the manufacture and design of the Stanley
Steemer Carpet Cleaner as well as trademarks used in connection with such machine; and .

WHEREAS, Stanley Steemer has developed a unique business format and operating system for a carpet and
upholstery cleaning business, including uniform standards, specifications and procedures of operation, management,
and quality and uniformity of products used and services offered (hereinafter referred to as the "Stanley Steemer
System"); and

WHEREAS, Stanley Steemer is engaged in the business of manvfacturing the Stanley Steemer Carpet
Cleaning Machine and granting franchises to own and operate Stanley Steemer carpet and upholstery cleaning
pusinesses, and to use the aforementioned trade secrets, trademarks, service marks, patents and the Stanley Steemer
System in such businesses; and

‘WHEREAS, Franchise Owner desires to obtain the exclusive license to operate a Stanley Steemer carpet and
upholstery cleaning business (hereinafter referred to as the “Stanley Steemer Business") in the area described in
Exhibit A to this agreement (hereinafter referred to as "Franchise Owner's Area.")

NOW, THEREFORE, IN CONSIDERATION OF THE FOLLOWING AND THE PREMISES
HEREINAFTER SET FORTH, THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE I. GRANT AND TERM

 

Stanley Steemer hereby grants to Franchise Owner the exclusive license to own and operate a Stanley
Stcemer Business for a term of ten (10) years from the date of this Agreement in Franchise Owner's Area and to use
the Stanley Steemer Trademarks, patents, Stanley Steemer System and the rights enumerated herein solely in a Stanley
Steemer Business in that area and in no other manner. Franchise Owner's Stanley Steemer Business shall have begun
within three (3) months after the date of this Agreement and shall thereafter be operated continuously in accordance
with the terms of this Agreement.

  
  
     
    
       
   

Franchise Owner acknowledges that the Stanley Steemer System is designed to operate on the basis that each.
Franchise Owner or Stanley Stecmer where appropriate is assigned a specific exclusive geographical area which each
must utilize its best efforts to develop and service in accordance with the standards established by Stanley Steemer,
and that such exclusive territories are reasonable and necessary to maximize the ability of each Stanley Steemer
Franchise Owner to effectively compete with its competitors in the carpet cleaning business. Therefore, the license
granted herein is specifically limited to the right to operate the Stanley Steemer Business within Franchise Owner's
‘Area, Franchise Owner shall not service customer locations outside of Franchise Owner's Area without the express
written consent of Stanley Steemer which may be withheld for any reason and if given may subsequently be revoked

EXHIBIT

1 A

  

      

  

 

    

pevtegnnvonrensseviteelPemnchine ADF Renee 01 29.49 866 1at any time. Franchise Owner shall refer requests to service customer locations outside of Franchise Owner's Area to
other Stanley Steemer franchise owners or to Stanley Steemer in accordance with procedures established by Stanley
Steemer from time to time.

ARTICLE I. LICENSE FEE AND ROYALTY PAYMENTS

In consideration for the license granted in Article I herein, Franchise Owner agrees to pay to Stanley Steemer
the following: .

A. License Fee. Franchise Owner shall pay Stanley Steemer upon execution of this agreement the
initial license fee set forth in Exhibit A attached hereto which shall be payable in the manner set forth in Exhibit A.

B. Royalty Pavments. In addition, Franchise Owner agrees to pay Stanley Steemer a monthly royalty

1 equal to the greater of the minimum monthly royalty payment prescribed in paragraph D of this Article or
f the Gross Sales from Franchise Owner's Stanlcy Steemer Business.

Cc. Gross Sales, For the purposes of this Agreement and the calculation of the royalty to be paid
hereunder, the term “Gross Sales” shall mean (1) the ammount of all sums charged (regardless of collection) (a) for
all products sold or services provided by Franchise Owner in connection with or related to Franchise Owner’s
Stanley Steemer Business, whether for cash or on a charge, credit or time basis, without reserve or deduction for
inability or failure to collect, (b) from all other activities of every type and description done by Franchise Owner or
any person employed by him or her, under the name Stanley Steemer, or in connection with any of its trademarks or
service marks (unless such other activities are the subject of a provision of another agreement between Franchise
Owner and Stanley Steemer including a provision obligating Franchise Owner to pay royalties), and (c) from any
carpet, upholstery or other cleaning business done by Franchise Owner or any person. employed by him or ber whether
or not the name and marks of Stanley Steemer are used, and (2) the fair market value of all goods and services
received in exchange for products or services provided by Franchise Owner in connection with or related to
Franchise Owner’s Stanley Steemer Business. (Such business shall include all incidental carpet, upholstery and
other cleaning services performed by Franchise Owner such as the application of protective coatings, (i.e. Supershield,
Scotchgard, Teflon, Masterseries), deodorizing, restoration or extraction after smoke .or water damage, including
services paid for by insurance, carpet and warranty services and third party inspections, and the sale of any item for
carpet or upholstery cleaning protection including, but not jimited to, Stanley Steemer Professional Carpet Spot
Remover, Stanley Steemer Odor Out and carpet rakes. Provided, however, Gross Gales shall not include (i) the
amount of overcharges, refunds, allowances or discounts to customers (including discounts attributable to coupon
sales); (ii) the amount of any excise or sales tax levied upon retail sales of goods and services and collected on
behalf of, and payable over to, the appropriate governmental authorities; and (iii) isolated sales of non-inventory
items or the bulk sale of the business itself,

D. Minimum Monthly Royalty. The minimum monthly royalty payments are as follows:

First Year (Through the next December 31) per month
Second Year per month
Third Year month
Each Succeeding Year er month

E. Payment Due, The monthly royalty payments shall be due and payable without invoice or other
notice from Stanley Steemer on the 15th day of the month following the month for which payment js due.

F. Late Payment. If royalty payments are not fully paid on or before the date when due, Franchise
Ovmer agrees to pay Stanley Stecmer a late charge equal fo one and one-half percent (1 1/2%) per month on all
amounts due and unpaid.

ps\vege \ONERS\Sueieta\Pranchine Mae Resiesyt07.79,62.d0r 2G Costs of Collection. In addition, Franchise Owner agrees to reimburse Stanley Steemer for all costs
of collection, including attorney's fees, of any amounts due under this Agreement.

H Best Efforts. Franchise Owner shall at all times utilize its best efforts to promote, maintain and
increase its sales within Franchise Owners Area. In this yegard, Franchise Owner shall be deemed to be in violation
of its obligations to use such best efforts if it fails to achieve gross sales equal to the Gross Sales necessary to achieve
its minimum monthly royalty payment for any period of six (6) successive months or fails to achieve the Gross Sales
necessary to achieve ‘annualized minimum monthly royalty payments for any period of two (2) successive years.

ARTICLE OL. FRANCHISE OWNER'S DUTIES

A Uniformity. Franchise Owner understands that it is essential to the success of his or her Stanley
Steemer Business and to the protection of the Stanley Steemer System, Stanley Steemer's Trademarks, and the
goodwill associated therewith that the unique qualities of Stanley Steemer’s image and services be maintained.
Franchise Owner further recognizes the substantial value of the goodwill resulting from those unique qualities.
Franchise Owner further understands that those unique qualities can only be maintained by adhering strictly to the
Stanley Steemer System, Stanley Steemer's methods of cleaning, including use of its patented machines; and by
conforming to the Stanley Steemer System and Stanley Steemer's specifications as to services provided, cleaning
supplies, vehicles, equipment and uniforms. Franchise Owner further understands that the foregoing has created
expectations on which customers of Stanley Steemer, Franchise Owner ‘and other franchise owners rely.

B. Change. Franchise Owner further umderstands that it is essential to the success of Franchise Owner's
Stanley Steemer Business and to the Stanley Steemer System that uniform changes be made from time to time in the
cleaning machines, cleaning products, cleaning methods, vehicles, signs, uniforms, services provided and all other

elements of the Stanley Steemer System in order to assure that Stanley Steemer and its franchise owners can
effectively compete with other businesses. .

c. Jn order to maintain and achieve the unique qualities of the Stanley Steemer System and to continue
its success; Franchise Owner agrees as follows:

L Stanley Steemer Carpet Cleaning Machine.

a. Purchase. Prior to beginning the Stanley Steemer Business, Franchise Owner shall purchase
at least one (1) of the most recent models of patented Stanley Steemer Carpet Cleaning Machines and

‘yan in which it is mounted for use in the Stanley Steemer Business.

b. Use, In the Stanley Steemer Business, Franchise Owner shall clean carpets and upholstery
only with patented Stanley Steemer Carpet Cleaning Machines and only in accordance with
provisions prescribed from time to time in the Stanley Steemer manual, or otherwise communicated
to Franchise Owner in writing or in training sessions.

c Repairs and Maintenance. Franchise Owner shall maintain all Stanley Steemer Carpet
Cleaning Machines in good operating con ition and such Cleaning Machines will not be altered or
modified in any manner whatsoever without the prior written consent of Stanley Stecmer.

d. Spare Parts. Franchise Owner shall install or have installed in Stanley Steemer Carpet
Cleaning Machines only spare parts which are approved by Stanley ‘Steemer as conforming to its
specifications for quality, performance, safety, durability, appearance and other characteristics
incident to maintaining the Stanley Steemer image and standard of cleanliness.

‘ps\tagal\oarena\seviece\ Franchise Age Renan) 07 28-03.805 3e. Sale or Disposal. Franchise Owner acknowledges that the Stanley Steemer Carpet Cleaning
Machine is unique equipment which if used by other persons, firms or corporations would give such
other person, firm or corporation a competitive advantage which is presently enjoyed by Stanley
Steemer and its franchise owners and could have an adverse impact upon the Stanley Steemer
System. Therefore, Franchise Owner agrees not to sell or otherwise dispose of any Stanley Steemer
Carpet Cleaning Machine and/or van in which such machine is mounted without first offering such
Stanley Steemer Carpet Cleaning Machine and/or van in which such machine is mounted to Stanley
Steemer at the fair market wholesale value of same. Franchise Owner shall deliver to Stanley
Steemer in writing notice of its intent to sell any such equipment together with a statement of its
estimated fair market wholesale value. Stanley Steemer shall thereafter have thirty (30) days after the
receipt of such notice to purchase all or any part of such equipment by payment of the purchase price
to Franchise Owner in exchange for possession of such equipment at Franchise Owner's principal
place of business; provided that Stanley Steemer may during such period inspect the equipment,
inspect Franchise Owner's books and records to verify the book value of the equipment and/or retain
at its expense an independent appraiser of its choice in the state in which Franchise Owner's principal
place of business is located to appraise the fair market wholesale value of the equipment, which
appraisal shall be controlling. Stanley Steemer may purchase either or both the machine and the van
in which it is mounted. If Stanley Steemer does not elect to purchase any such equipment within such
thirty (30) day period, Franchise Owner may thereafter sell or dispose of the same, provided that prior
to selling or disposing of any van, Franchise Owner shall remove or paint over any and all names,
marks and insignia identifying Stanley Steemer in any way so that the same are inno way visible.

2. Manuals. Franchise Owner agrees to fully observe all of the requirements set forth in any manuals
or other written communications from Stanley Steemer. Further, Franchise Owner agrees to make any
changes in methods of operation which are prescribed in any amendment by Stanley Steemer of any manual,
in written communication from Stanley Steemer or in any training sessions (All of the manuals, written
communications and training session information are hereinafter collectively referred to as "Stanley Steemer's

Manuals.”)

3. Cleaning Products. Franchise Owner shall use in the Stanley Steemer Business only such cleaning
products, including ‘detergents and other cleaning solutions, as are prescribed and changed from time to time
in Stanley Steemer’s Manuals. They shall conform to Stanley Steemer's specifications for cleanliness of
result, safety, equipment protection, quality, performance and other characteristics incident to maintaining the
Stanley Steemer image and standard of cleanliness and consumer acceptance and favor. Franchise Owner
shal] use only products and sources approved by Stanley Steemer.

4. Cleaning Methods. Franchise Owner shall clean carpets and upholstery only mm accordance with
procedures prescribed and changed from time to time in Stanley Steemer’s Manuals.

5. Vehicle. Franchise Owner shall transport Stanley Steemer Carpet Cleaning Machines, equipment
and supplies to customers only in a van-type truck which meets Stanley Steemer’s specifications as prescribed
and changed from time to time in Stanley Steemer's Manuals. They shall conform to Stanley Steemer’s
specifications for size, color, appearance and other characteristics incident to maintaining the Stanley Steemer
image and consumer acceptance ‘and favor. Franchise Owner shall submit to Stanley Steemer a written
description of each truck Franchise Owner intends to acquire for approval by Stanley Steemer, prior to
acquisition, and Stanley Steemer shall have ten (10) days in which to approve the truck, At least one truck

must be acquired prior to Franchise Owner's beginning the Stanley Steemer Business.

6. Signs. Franchise Owner shal] install, change and maintain in satisfactory condition on the vehicle
used to transport any Stanley Steemer Carpet Cleaning Machine to customers such signs and no others as
shall be prescribed and changed from time to time in Stanley Steemer Manvals. They shall conform in all

pauagnioueessceicia\Pemehins Age Reet 9 29.0-8o0 4‘essential characteristics to Stanley Steemer’s specifications for size, color, appearance, durability, trademark
and other requirements incident to maintaining the Stanley Steemer image. Franchise Owner shall replace all
signs which Stanley Steemer determines are no longer compatible with the Stanley Steemer System.

7. Uniforms. Franchise Owner shall require all persons who clean carpet and upholstery in Franchise
Owner's Stanley Steemer Business to wear only such uniforms, and no others, as are prescribed and changed
from time to time in Stanley Steemcr’s Manuals. The uniforms shall conform to Stanley Steemer's
specifications for design, color, fabric, durability, cleanliness and other characteristics incident to maintaining

the Stanley Steemer image.
8. Additional Machinery, Equipment and Supplies. Franchise Owner shall use in the Stanley

Steemer Business only such additional machinery, equipment and supplies, and no others, as are prescribed
and changed from time to time in Stanley Steemer’s Manuals. They shall conform to Stanley Steemer’s
specifications for quality, performance, safety, durability, appearance and other characteristics incident to
maintaining the Stanley Steemer image and standard of cleantiness.

9. Full Line of Services and Products, Franchise Owner shall offer customers the full line of services
and products which Stanley Steemer shall prescribe and change from time to time in Stanley Steemer's
Manuals.

10. New Services and Products. Franchise Owner shalt offer and promote the sale of ali new services
and products which Stanley Steemer shall develop for use in Stanley Steemer businesses.

1. Discontinued Services and Products, Franchise Owner shall cease, as soon as supplies and products
on hand are depleted, all services ‘and the sale of all products which Stanley Stcemer determines are no longer
to be a part of the Stanley Steemer System.

12. Suppliers. Franchise Owner shal) purchase all spare parts, cleaning products, vehicles, signs,
uniforms, machinery, equipment and supplies, and shall obtain repairs required for the operation of the
business, solely from suppliers who demonstrate, to the continuing satisfaction of Stanley Steemer, the ability
to meet Stanley Steemer's standards and specifications for such items; who possess adequate quality controls
and the capacity to supply Franchise Owner's needs promptly and reliably; and who have been approved in
writing by Stanley Steemer and not thereafter disapproved.

13. Payments to Stanley Steemer. Franchise Owner shall pay all sums due 1o Stanley Steemer for
products or services purchased or leased from Stanley Steemer in the manner required for payment of royalty
fees as set forth in Article I. E. or in the respective lease, as well as late payment fees and costs of collection
in the amounts required by Article IL. F. and G. or the respective lease.

14. Payment to Others. Franchise Owner shall pay all sums when due to any person including, but not
limited to, the purchase or leasing of a Stanley Steemer Carpet Cleaning Machine and the vehicle used to
transport the Carpet Cleaning Machine and all amounts due for the maintenance of the telephone listings and
classified advertisements required pursuant to Article VLB.4. hereof. Provided that if Franchise Owner is
contesting its obligation to pay any such sum in good faith, payment may be postponed during the period of
such contest.

45. National Accounts Program. Certain potential and existing commercial customers of Stanley
Steemer and Franchise Owner may have locations requiring carpet and upholstery cleaning services within
Franchise Owner’s Area as well as areas outside Franchise Owner’s Area within the exclusive licensed
areas of other Stanley Steemer franchise owncrs and/or an areas serviced by Stanley Steemer as Stanley
Steemer branches. Such potential and existing customers, regardless of the number of locations they

pe\negns\omuens\scvttea\rcancniae Agr Renewal 07.29-63,608 5occupy, are referred to herein as “Multi-Territory Customers.” Franchise Owner acknowledges and agrees
that in order to service such Multi-Territory Customers most effectively and to effectively compete for the
business of such Multi-Territory Customers against competing carpet cleaning services, some of which are
not franchised, it is necessary to havé a program coordinated by Stanley Steemer for providing services to
Multi-Territory Customers both within and outside Franchise Owner’s Area.

‘Therefore, Franchise Owner agrees that Stanley Steemer may implement a program for providing
carpet and upholstery services to Multi-Territory Customers upon such terms and conditions as it
determines in its discretion (referred to herein as the “National Accounts Program”), and Franchise Owner
agrees to participate in such ‘National Accounts Program in every respect in accordance with the directives
of Stanley Steemer. Such ‘National Accounts Program may include, but shall not be limited to, the
following:

a Stanley Steemer can designate certain Multi-Territory Customers as National Account
Customers.

b. Stanley Steemer may enter into contracts with National Account Customers, which
contracts may encompass any Or all of the National Account Customer’s facilities,
including without limitation those facilities located in Franchise Owner’s Area. In the
event that such contracts establish prices to ‘be charged to the National Account Customers
for the services provided, such prices are referred to herein as the “National Account
Price(s).”

c. Franchise Owner shall service all National Account Customer locations in Franchise
Owner’s Area in accordance with the Stanley Steemer System and the directives of
Stanley Steemer.

d. Franchise Owner shall not charge a National Account Customer for any product or service
an amount in excess of the National Account Price for that customer established by
Stanley Steemer, subject to such regional or territorial variations as may be agreed to by
Stanley Steemer in writing. This shall not preclude Franchise Owner from charging 2
National Account Customer a price less than the National Account Price, and Franchise
Owner shall be free in all respects to charge less than the National Account Price to any
National Account Customer.

e Franchise Owner shall cooperate and coordinate with Stanley Steemer and other Stanley
Steemer franchise owners in identifying and servicing National Account Customers.

£. Franchise Owner shall provide Stanley Steemer with such reports regarding Franchise
Owner’s provision of services to and revenues received from National Account Customers
as are requested from time to time by Stanley Steemer.

Dd. Approval required under this Article for spare parts, cleaning products, vehicles, signs, uniforms,
machinery, equipment and supplies (hereinafter collectively referred to in this paragraph as "Items”), shall be obtained
in the following manner:

lL. Franchise Owner shall submit to Stanley Steemer a written request for such approval, or shall request
the manufacturer or supplier itself to do so. Stanley Steemer shall have the right to require, as a condition of
its approval, that its representatives be permitted to inspect the manvfacturer's or supplier's facilities, and that
samples from the supplier be delivered at Stanley Steemer's option, to Stanley Steemer for testing prior to
granting approval. A charge not to exceed the reasonable cost of the inspection and the actual cost of the test
shall be paid by manufacturer or supplier. Stanley Steemer reserves the right, at its option, to reinspect the

[Pu\tagal\OiERS) Sevicea\rcanchise Agr Renewal 0729.02.06 6facilities and products of any such approved manufacturer or supplier and to revoke its approval upon the
manufacturer's or supplier's failure to continue to ameet any of the foregoing criteria.

2. Stanley Steemer shall notify Franchise Owner in writing whether such Items meet Stanley Steemer’s
specifications and are, therefore, approved.

3. Tf any Item submitted is not approved, Stanley Steemer shall, upon request, inform the person
submitting such Item of the reason the Item does not meet Stanley Steemer's specifications.

In addition, Stanley Stecmer may notify Franchise Owner from time to time in Stanley Steemer's Manuals or
otherwise in writing of Items which meet Stanley Steemer's specifications and are, therefore, approved.

E. Inspection and Conformance.

1. Products, Franchise Owner shall permit Stanley Steemer or its agents at any reasonable time to
remove from Franchise Owner's place of business samples of products, supplies, and other items used in
Franchise Owner's business, without payment therefor, in amounts reasonably necessary for testing by
Stanley Stcemer to determine whether the samples meet the then current standards and specifications of
Stanley Steemer. Franchise Owner shall bear the cost of the testing if the Franchise Owner's supplier of the
jtems has not been approved by Stanley Steemer or if the item fails to conform to Stanley Steemer's
specifications.

2. Premises. Franchise Owner shail permit Stanley Steemer to inspect Franchise Owner's place of
business and the Carpet Cleaning Machines, equipment and products used and sold therein, and the methods
of cleaning employed in the business in order to insure the maintenance of uniform quality, standards and
compliance with this agreement. In addition, at Stanley Steemer’s option, Stanley Steemer may remove,
replace, repair or remodel, at Franchise Owner's expense, any items which do not conform with the then
current standards and specifications of Stanley Steemer; provided that Stanley Steemer may take such action
only after Franchise Owner's delay or refusal upon request to take conforming action promptly. Stanley
Steemer shail bill Franchise Owner for all costs and expenses reasonably incurred in so doing and Franchise
Owner shall pay the sums due no later than the date the next royalty payments are due in accordance with
Article I. hereof.

ARTICLE IV. SALE OF MACHINES AND OTHER JTEMS BY STANLEY STEEMER

A. Franchise Owner understands that the Stanley Steemer Carpet Cleaning Machine is unique and as
such is available only from Stanley Steemer.

B. Franchise Owner further understands that Stanley Steemer does sell the Stanley Steemer Carpet
Cleaning Machine, spare parts, cleaning products, uniforms, signs and other machinery, equipment and supplies for
use in Stanley Steemer Businesses, and that it is Stanley Steemer's policy to mark up the price for all such items so as
to retum to Stanley Steemer such profit as Stanley Steemer deems reasonable.

C Additional Carpet Cleaning Machines.

1 Franchise Owner understands that it is necessary to the full development potential of the Stanley
Steerer Business in Franchise Owner's area, that he or she have available sufficient Stanley Steemer Carpet
Cleaning Machines to service promptly and adequately ali persons seeking cleaning services in Franchise
Owner's Area.

[Pi\begen\owens\Sevlsta\Peanehine Age Renewal .07.79.03.00e 72. Franchise Owner agrees that in order to service his or her area fully, he or she must acquire and be
using in the area, at least the number of Stanley Steemer Carpet Cleaning Machines within the timeframe set
forth in Exhibit A to this Agreement.

ARTICLE V. STANLEY STEEMER SYSTEM AND STANLEY STEEMER. TRADEMARKS

A. Limitation on Use. The license granted to Franchise Owner to use the Stanley Steemer System and
Stanley Steemer Trademarks applies only to their use in connection with the operation of the business operated
pursuant to this Agreement at or from the location specified in Exhibit A. This license includes only the right to use
the Stanley Steemer System and Stanley Steemer Trademarks described and represented in Exhibit B attached hereto,
and made a part of (and which may hereafter be designated by Stanley Steemer in writing as part of) the Stanley
Steemer System, and no other trademarks, service marks or trade names of Stanley Steemer now existing or to be
developed or acquired by Stanley Stesmer.

B. Stanley Steemer's Right's Exclusive. Franchise Owner expressly acknowledges Stanley Steemer's
exclusive right to use the federally registered mark “Stanley Steemer” for carpet cleaning and other related services
and other Stanley Steemer Trademarks and the Stanley Steemer System and agrees not to represent in any manner that
he or she has any ownership in the Stanley Steemer System or the Stanley Steemer ‘Trademarks. Franchise Owner
further agrees that use.of the Stanley Steemer System and Stanley Steemer Trademarks shall not create in his or her
favor any right, title or interest in, or to, the Stanley Steemer System and the Stanley Steemer Trademarks but that all
of the use shall inure to the benefit of Stanley Steemer. Franchise Owner shall have no right to franchise or
subfranchise any interest granted by this Agreement and, upon any attempt by Franchise Owner to do so, Stanley
Steemer may thereupon terminate this Agreement as provided in Article XTIL. hereof.

Cc. Infringement. Franchise Owner acknowledges that the use of the Stanley Steemer System or any of
the Stanley Steemer Trademarks outside the scope of this Agreement without Stanley Steemer's prior written consent
is an infringement of Stanley Steemer's exclusive right to use the Stanley Stecmer System and the Stanley Steemer
Trademarks, Franchise Owner expressly covenants that, during the term of this Agreement and after the expiration
hereof, Franchise Owner shall not, directly or indirectly, commit an act of infringement or contest or aid in contesting
the validity or ownership of the Stanley Steemer System or Stanley Steemer ‘Trademarks, or take any other action in
derogation thereof.

D. Notice of Infringement. Franchise Owner shall promptly notify Stanley Steemer of any claim,
demand, or cause of action based upon or arising from any attempt by any other person, firm or corporation to use the
Stanley Steemer System or the Stanley Steemer Trademarks licensed hereunder, or any colorable variation thereof, in
which Stanley Steemer has or claims 2 proprietary interest. Franchise Owner also agrees to notify Stanley Steemer
promptly of any litigation instituted by any person, firm, corporation or governmental agency against Stanley Steemer
or Franchise Owner involving the Stanley Steemer System or the Stanley Steemer Trademarks. Franchise Owner
acknowledges that Stanley Steemer has the right to control any administrative proceeding or jitigation involving the
Stanley Steemer System or Stanley Steemer Trademarks. Franchise Owner agrees to execute any and all documents
and to do such acts and things as may, in the opinion of counsel for Stanley Steemer, be necessary to carry ‘out such
defense or prosecution.

EB. Nonexclusive License. Franchise Owner understands and agrees that the license of the Stanley
Steemer System and the Stanley Steemer Trademarks is nonexclusive to the extent that Stanley Steemer has and
retains the right under this Agreement to:

1 grant other licenses for the Stanley Steemer System and the Stanley Steemer Trademarks, in addition
to those licenses already granted to existing franchise owners;

ve\tegal\Oermns\Sevteee\ Franchise Agr Ronaval 07.29.03 06 82. develop and establish other franchise systems for different products or services utilizing trademarks,
service marks and trade names not now or hereafter designated as part of the Stanley Steemer System, and to
grant licenses thereto, without providing Franchise Owner any Fight therein; and

3. develop and establish other systems for the sale at wholesale or retail, of ‘similar or different products
utilizing the same or similar Stanley Steemer ‘Trademarks without providing Franchise Owner any right
therein.

F, Goodwill, Franchise Owner acknowledges and expressly agrees that any and all goodwill associated
with the Stanley Steemer System and jdentified by the Stanley Steemer Trademarks shall inure directly and
exclusively to the benefit of Stanley Steemer and is the property of Stanley Steemer, and that upon the expiration or
termination for whatever reason of this agreement, no monetary amount shall be assigned as attributable to any
goodwill associated with any of Franchise Owner's activities in the operation of the license granted herein, or
Franchise Owner's use of the Stanley Steemer System or the Stanley Steemer Trademarks.

G. Limit _on Use of Stantey Steemer Trademarks. For the protection of the Stanley Steemer
‘Trademarks, Franchise Owner further agrees: ~

1. to operate and advertise solely under the name Stanley Steemer; provided, however, that if Franchise
Owner is or becomes a partnership, corporation or other business entity, Franchise Owner shall not utilize the
name Stanley Steemer, or any colorable variation thereof, as part of Franchise Owner's partnership, corporate
or other business entity name,

2. to adopt and use the Stanley Steemer Trademarks licensed hereunder solely in the manner prescribed by
Stanley Steemer;

3. to observe such reasonable requirements with respect to trademark registration notices as Stanley Steemer
may from time to time direct in writing;

4, to use, promote and offer for sale only those products and services designated by Stanley Steemer as being
part of the Stanley Steemer System and which meet all standards and specifications set forth by Stanley
Steemer from time to time.

HL Inspection. In order to preserve the validity and integrity of the Stanley Steerer System and the
Stanley Steemer Trademarks Jicensed herein and to assure that Franchise Owner is properly employing the system and
marks in the operation of Franchise Owner's ‘business, Stanley Steemer or its agents shal) at all times have the right to
inspect Franchise Owner's operations and premises and make periodic evaluations of the services provided and the
equipment and products used therein. Franchise Owner shall cooperate with Stanley Steemer's representatives in such
inspections and render such assistance as may be reasonably requested.

ARTICLE VI. FRANCHISE OWNER'S DUTIES - ADVERTISING

A Understanding. Franchise Owner understands that it is essential to the success of Franchise Owner's
Stanley Steemer Business ‘and to the protection of the Stanley Steemer System and the Stanley Steemer Trademarks
and the goodwill associated therewith that the advertising efforts of all franchise owners and Stanley Steemer be
coordinated and standardized. Franchise Owner further recognizes that such coordination and standardization will
result in an increase in the effectiveness of the advertising and a further increase in the already substantial goodwill
associated with the name and service of Stanley Steemer. Franchise Owner acknowledges that a failure of Franchise
Owner to participate in any cooperative or other advertising program organized by Stanley Steemer or other Stanley
Steemer franchise owners or to pay any costs Or fees when due will damage Stanley Steemer and other franchise
owners and will make Franchise Owner liable to Stanley Steemer and those franchise owners for any loss of income

paaeas Notas bevtecareancon he Rena £729,099 9resulting from that failure. Franchise Owner further recognizes that it is ‘essential to the maximization of income from
Franchise Owner's Stanley Stecmer Business that sufficient funds be spent by Franchise Owner on. advertising.

B. Requirements. In order to achieve such coordination, standardization and maximization of income,
and to avoid damaging Stanley Steemer and other franchise owners, Franchise Owner agrees as follows:

Ll Advertising Expenditures. Franchise Owner agrees to spend annually for advertising, including
cooperative and national advertising, but excluding classified advertising, a sum equal to not less than ten
percent (10%) of his or her annual gross sales.

2. Cooperative Advertising. Franchise Owner, upon receiving fifteen (15) days written notice from
Stanley Steemer, shall participate in any media area cooperative advertising program in Franchise Owner's
media area, whenever requested to do so either by Stanley Steemer or by the owners of a majority of Stanley
Steemer businesses in Franchise Owner's media area. Such businesses may include Stanley Steemer
businesses operated by Stanley Steemer or by other franchise owners. Once such a program is established,
Franchise Owner agrees to pay his or her pro rata share of the cost thereof, which for television advertising is
determined by taking the Arbitron statistics as to the number of total television households and the station's
share of county viewing in Franchise Owner's Area as a percentage of the total number of total television
households and the station's share of county viewing in the total media area for which the program has been
established. For printed media, Franchise Owner agrees to pay his or her pro rata share of the cost thereof,
which is determined by computing Franchise Owner's household circulation or distribution in Franchise
Ovmner's Area as a percentage of the total ‘household circulation or distribution in the total printed media area.
Franchise Owner agrees to abide by ali rules, regulations and by-laws, if any, adopted by the members of the
cooperative advertising program and failure to abide by those rules or by-laws shall be grounds for
termination of this agreement in the manner provided in Article XII, hereof.

3. National Advertising.

a. Fee. Franchise Owner shall pay to Stanley Steemer or to an entity designated by Stanley
Steemer that has been formed for the purpose of operating a national advertising program a monthly
national advertising fee equal to two percent (2%) of Franchise Owner's monthly gross sales.

b. When Due. The national advertising fee shall be due and payable without invoice or other
notice from Stanley Steemer on the 15th day of the month following the month for which the
‘payment is duc.

c. Late Charge. If the national advertising fee is not fully paid on or before the date when due,
Franchise Owner agrees to pay to Stanley Steemer, or to the entity referenced in Section VIB.3.a.
above, a late charge equal to one and one-half percent (1 1/2%) per month on all amounts due and
unpaid.

d. Costs of Collection. In addition, Franchise Owner agrees to reimburse Stanley Steemer for
all costs, including attorney's fees, of collection of any amounts due under this agreement.

 

4. Yellow Page Advertising. Franchise Owner shall, pursuant to the license granted hereunder, obtain
a telephone number or numbers in ‘such name as Stanley Steemer shall direct and maintain a listing and place
an advertisement of at least one-quarter (1/4) page in size for his or her Stanley Steemer Business in the
telephone directories servicing Franchise Owner's Area, which telephone number(s), listings and
advertisements shall be considered to be the sole property of Stanley Steemer. Upon termination of this
Agreement for whatever reason, Franchise Owner agrees that he or she shall immediately cease all use of
such telephone number(s) and listings and advertisements and that same shall become the sole property of

ps\begel\omemes\sevices\trinchine Jar Reneva) 07.29.02. doc 10Stanley Steemer, at its option, subject to Stanley Steemer’s obligation to pay all fees due therefor or becoming
due and payable after the date of cessation of use.

5. Advance Approval Required.

a. Prior Approval. No advertising materials of any kind whatsoever may be used by Franchise
Owner unless all such materials have been developed, or approved in advance in writing by Stanley
Steemer.

b. Reimbursement. Franchise Owner shall reimburse Stanley Steemcr for all costs, including
attorney's fees and damages, resulting from a violation of these requirements and restrictions.

6. Obsolete Materials, Franchise Owner shall cease using any advertising materials previously
developed or approved by Stanley Steerer, upon receipt of notice in writing from Stanley Steemer that such
materials are obsolete and no longer approved for use.

7. Monthly Report. Franchise Owner shall submit to Stanley Steemer monthly on forms provided by
Stanley Steemer a report of advertising expenditures for the previous month.

ARTICLE VIE. ADDITIONAL FRANCHISE OWNER DUTIES

Franchise Owner agrees as follows:

A. Telephone. Franchise Owner shall answer, or employ persons to answer, the telephone at Franchise
Owner's Stanley Steemer Business at least during the hours of 8 a.m. to 6 p.m., except weekends and holidays.

B. Training. Franchise Owner or a manager of Franchise Owner's business, if any, shall attend the
Stanley Steemer training program in Dublin, Ohio, prior to opening the business and at such intervals as Stanley
Steemer may require. Franchise Owner will pay all costs of travel and living expenses in connection with attending
such training.

on Confidentiality, Franchise Owner will not divulge to any person, other than employees, any
methods of cleaning, operations, or any other matters which could properly be considered to be part of the Stanley
Steemer System, and will require each employee at the time of employment to sign an agreement, in a form supplied
by Stanley Steemer, agreeing to maintain such secrecy as a condition of employment. Further, Franchise Owner will
not permit persons not authorized by this Agreement to inspect or study the manuals loaned to Franchise Owner by
Stanley Steemer or otherwise reveal the contents of those manuals.

D. Trademarks. Franchise Owner will not use, sell or give away anything bearing any Stanley Steemer
trademarks or service matks unless Franchise Owner obtains the prior written permission of Stanley Steemer and
observes all trademark and service mark requirements and restrictions pertaining thereto.

E. No Competition, During the term of this Agreement, Franchise Owner will not become a franchisee
of, nor engage, directly or indirectly, in the ownership or operation of another carpet, upholstery or other cleaning
business or franchise.

F. Books and Records. Franchise Owner shall maintam complete and accurate books and records of his
or her operations in accordance with generally accepted accounting principles, and shall permit Stanlcy Steemer, or its
agents, at Stanley Steemer's expense to examine or audit such books and records and Franchise Owner's tax returns at
any reasonable time; provided however, that if such examinations or audit discloses an error greater than two percent
(2%) in the computation of the Gross Sales, Franchise Owner then shall reimburse Stanley Steemer for the cost of

Fr \tagit onsets rraschine Apr Renna 0729,09-86r isuch examination or audit, and shail immediately pay any royalties due as a result of the discovery of such error, plus
late charges as required by Article II. F. hereof.

G. Monthly Report. Franchise Owner shall submit to Stanley Steemer, together with the monthly
royalty payment, a complete and accurate statement of the monthly Gross Sales and profit and Joss of Franchise
Owner's Stanley Steemer Business, Such report shall be on forms provided by Stanley Steemer and shall be prepared
in accordance with generally accepted accounting principals. Franchise Owner understands that submission of such
reports is necessary to Stanley Steemer if it is to obtain new franchise owners in other areas.

H. Annual Reports. Franchise Owner shall submit to Stanley Stecmer within sixty (60) days after the
close of Franchise Owner's fiscal year, complete and accurate financial statements of Franchise Owner's Stanley
Steemer Business, including a statement of profit and loss and a balance sheet. Such reports shall be on forms
provided by Stanley Steemer and shail be prepared in accordance with generally accepted accounting principles.

L Additional Reports. Upon notice from Stanley Steemer, Franchise Owner will supply to Stanley
Steemer reports on any information which Stanley Steemet may be required to provide about all or any of its franchise
owners to any government entity.

i Governmental Regulations. Franchise Owner will comply with all governmental statutes,
ordinances and regulations affecting the conduct of the Stanley Steemer Business.

K. Appearance of Employees. Franchise Owner will require all of his or her employees to maintain a
neat, clean appearance when providing services to customers in order to maintain the Stanley Steemer image.

ARTICLE VII. STANLEY STEEMER'S DUTIES

ARTICLE VEL. STAL_—_————

Stanley Steemer agrees as follows:

A. Advertising Materials, Stanley Steemer will provide to Franchise Owner all such advertising
materials, including newspaper copy or matrices, television film or video tapes, radio tapes and other advertising
materials as are developed from time to time by Stanley Steemer for usc in Stanley Steemer Businesses. Such
materials will be provided to Franchise Owner upon payment to Stanley Steemer of a sum equal to Franchise Owner's
pro rata share of Stanley Steemer's actual cost of such materials as determined from time to time by Stanley Steemer.

B. National Advertising. Stanley Steemer (and/or any entity designated by Stanley Steemer that has
been formed for the purpose of operating a national advertising program) sball use all funds collected for national
advertising to advertise Stanley Steemer by such means as it shal] determine will be most effective in increasing the
goodwill associated with the name and services of Stanley Steemer. If Stanley Steemer shali determine at any time
that national advertising cannot be effectively implemented with the funds available, then Stanley Steemer shall retum
to Franchise Owner his or her pro rata share of funds not yet expended.

C. Cooperative Advertising. Stanley Steemer shall participate in any media arca cooperative
advertising program now or hereafter established by the owners of Stanley Steemer Businesses in any media area in
which Stanley Steemer owns and operates a Stanley Steemer Business. Stanley Steemer shall pay into such
cooperative advertising program a sum equal to its pro rata share of the cost thereof, which for television advertising
is determined by taking the Arbitron statistics as to the total television households and the station's share of county
viewing in Stanley Steemer's area as a percentage of the total number of total television households and the station's
share of county viewing in the total media area. For printed media, Stanley Steemer agrees to pay its pro rata share of
the cost thereof, which is determined by computing Stanley Steemer's household circulation in its area as a percentage
of the total houschold circulation in the total printed media area,

\teget\oaras\sevicee\ Franchise Agr Renee). $7.29.43.60¢ 2D. Use of Trademarks. Stanle