What are some distinguishing characteristics of the Proprietary System used by Aerus franchisees?

). Franchisee represents that the ownership interests shown in Schedule 2 attached hereto are true, complete and correct. Certain capitalized terms and phrases are used in this Agreement with the meanings assigned in Addendum A, attached hereto, which is incorporated herein by reference.

R E C I T A L S

• A. Company grants franchises to qualified individuals and business entities for the right to establish and operate businesses that (i) market, distribute and sell the Company's and its Affiliates' line of air purification, water purification, water conditioning, floor care and other environmental products for homes and businesses, including accessories, attachments, parts and supplies; (ii) provide testing for environmental contaminants and market, distribute and sell products, services and treatments for the control of indoor environmental contaminants; and (iii) perform product repair, maintenance and related services for our products and certain products of our competitors (collectively, the "Proprietary Products"). The Proprietary Products bear or are identified by the trade name, trademark or service mark "Beyond", "Beyond by Aerus", "Aerus", "Lux", "Electrolux" or certain other indicia owned, licensed or otherwise contracted for by Company (the "Proprietary Marks") and are marketed, distributed and sold through (among other channels) a network of independent franchisees, operating from permitted fixed locations, and their permitted distributors, licensees and sales representatives, who each assume responsibility for their own marketing, promotion, sales and distribution of the Proprietary Products, directly or indirectly, to the end-user, consuming public.
• B. Company and its Affiliates have developed a distinctive and proprietary system (the "Proprietary System") for establishing and operating businesses that offer and sell the Proprietary Products. The distinguishing characteristics of the Proprietary System include, among other things: identification by the Proprietary Marks; distinctive exterior and interior design, décor, color scheme and furnishings, fixtures and other trade dress elements; proprietary products; standards, specifications, policies and procedures for construction, management and operations; quality, distinctiveness and uniformity of products and services; standards, specifications, procedures and automated, software driven administrative systems for customer, lead, inventory, sales and financial management and control; sales, recruiting and lead generation programs; training and assistance; and advertising and promotional programs all as are more particularly described and designated in the Manuals and all of which we may change, improve, and further develop at Company's sole option from time to time.
• C. Company grants to third parties the license and right to operate under one (1) of two (2) franchise programs, known as (i) the standard franchise program (the "Standard

Program"), and (ii) the associate franchise program (the "Associate Program"); both of which offer and sell certain of the Proprietary Products as determined from time to time by Company, are identified by certain of the Proprietary Marks as determined from time to time by Company, and use certain elements of the Proprietary System as determined from time to time by Company. The Company also grants to qualified franchisees operating under the Standard Program and Associate Program a right to sell "Beyond Products" which rights are granted solely pursuant to an addendum to their respective franchise agreement (the "Beyond Addendum"). For purposes of this Agreement, unless otherwise indicated herein, "Products" shall mean those Products determined by Company from time to time as applicable to the Standard Program "Beyond Products" shall mean those Proprietary Products determined by Company from time to time applicable to those franchisees who sign a Beyond Addendum and that are marketed, distributed and sold under the "Beyond" or "Beyond by Aerus" trademarks. "Marks" shall mean those Proprietary Marks determined by Company from time to time as applicable to the Standard Program, and "System" shall mean those elements of the Proprietary System determined by Company from time to time as applicable to the Standard Program.

• D. Company may (i) establish additional franchise programs for the offer and sale of Products, which programs utilize the Marks and the System, (ii) cease granting licenses and rights to operate under one (1) or more of the above described franchise programs, or (iii) cease granting licenses and rights to operate under any franchise programs.
• E. Company desires to grant to Franchisee, and Franchisee desires to receive and accept from Company, a license and franchise to operate an Aerus Business under the Standard Program at or from the Approved Locations in accordance with the System (the "Franchised Business"), pursuant and subject to the terms, conditions and provisions of this Agreement.

A G R E E M E N T

NOW, THEREFORE, for and in consideration of the foregoing premises and the promises set forth below and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged and confirmed, the parties agree as follows:

1. Grant of Franchise Rights.

A. Company hereby grants to Franchisee the right and license, and Franchisee hereby accepts the right and obligation, to establish and operate the Franchised Business (under the Standard Program) upon and subject to the terms, conditions and provisions of this Agreement. Franchisee agrees and acknowledges that Franchisee shall have the right to offer and sell the Products only to Approved Customers within the area identified as the Area of Responsibility in Schedule 1, attached hereto (the "Area of Responsibility"), all in accordance with the terms, conditions and provisions of this Agreement and the Manuals, including the Policies and Procedures.

Source: Item 23 — Receipts (FDD pages 74–305)