For Aerus franchisees, what is the permitted use of Approved Locations?

whole.

Approved Locations and Service and Repair Centers

You must purchase or lease an Approved Location from which to operate your Franchised Business. You must obtain our approval of your proposed location before you sign a purchase or lease agreement. Under your Franchise Agreement, if you lease a location for your Franchised Business, we may require you and your landlord to sign a lease rider, through which your landlord will grant us the right to assume your rights and obligations under the lease if you breach the lease agreement or your Franchise Agreement. A sample lease rider is attached as Exhibit 1 to each Franchise Agreement.

Under the Standard Program, you must maintain a service and repair center (in accordance with the Manuals) in all Approved Locations. Satellites and Licensed Outlets are not required to maintain on-site service and repair centers so long as repair, maintenance and service obligations can be adequately and timely provided from another affiliated Approved Location.

In limited circumstances, under the Associate Program, you may be permitted to outsource repair and maintenance services to another Aerus Business, and avoid establishing a repair, maintenance, and service center in your Approved Location. We must approve your contractual arrangement with the other Aerus Business.

All Approved Locations must be maintained in an attractive, clean, orderly, and sanitary manner, and must be merchandised according to our standards and specifications. All furniture, fixtures, equipment, and displays must be maintained in good order and repair.

Insurance

You must obtain and maintain the amounts and types of insurance that we specify in the Manuals in connection with the operation of a Franchised Business. We currently require a minimum of $1,000,000 in coverage for all lines of insurance. The Manuals will be made available to you prior to signing the Franchise Agreement. We may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverage (including reasonable excess liability insurance) at any time to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. These insurance policies must name us and any affiliates we designate as

additional named insureds and provide for 30 days' prior written notice to us of a policy's material modification, cancellation or expiration.

Advertising

Under the Franchise Agreement, you must submit samples of all advertising and promotional materials to us for approval prior to use. We will notify you of our approval of any advertising materials within 15 days of receipt. No advertisement or promotional material may be placed outside the Area of Responsibility, as applicable, and you may not conduct any national or international advertising of any kind. You must advertise at all times in the manner designated by us in the Manuals or otherwise in writing, using formats approve by us in advance.

Vehicle Leases

Any vehicle used in connection with your Franchised Business, including vehicles used by sales representatives and Outlet Licensees to deliver Products to Approved Customers, must be clean and in good repair.

Item 9

FRANCHISEE'S OBLIGATIONS

This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this Disclosure Document. In the following chart, "FA" means the Franchise Agreement, and "BA" means the Beyond Addendum.

Source: Item 16 — Restrictions on What the Franchisee May Sell (FDD pages 54–56)