to use a required supplier could be a material default.

Insurance

Unless otherwise required by law, you must obtain the following insurance coverage through our designated Insurance broker: Comprehensive Commercial General Liability Insurance in the amount of at least $1,000,000 per occurrence and $3,000,000 in the aggregate including Business Personal Property and Improvements and Betterments at the suggested minimum amounts, higher limits may be Insured as per your Center's needs; Professional Liability coverage, including, but not limited to education services ($1,000,000 per occurrence and $3,000,000 in the

aggregate, which must include coverage for contingent bodily injury and property damage in the amount of $1,000,000); Abuse & Molestation coverage ($1,000,000 per occurrence; $3,000,000 in the aggregate); Cyberliability coverage of at least $500,000, although we recommend that you consult with your insurance broker and evaluate whether you should have higher coverage; Employment Practices Liability Insurance ("EPLI") in the amount of $1,000,000 per occurrence, and Commercial automobile liability insurance covering vehicles that are owned, non-owned, or hired by the Franchised Business with a combined single limit of $1,000,000. You must also obtain workers compensation, disability, and any other insurances, in such form and in such amounts, as may be required by law in the state in which your Franchised Business operates. You may be required to obtain new certificates naming us or third parties as additional insureds for off-site events including Conventions or Trade Shows, or if your center has been approved to deliver program at a location other than the primary Brain Balance Center.

We and our parent and affiliate companies must be named as an additional insured on all lines of coverage; (except for workers compensation). Upon request BBF must be provided with Certificates of Insurance in place at your Center. You are required to obtain insurance through one of our approved insurance vendors and you are required to give us at least 30 days prior notice before you terminate, non-renew or materially alter any of the insurance coverages we require. As of the date of this FDD, we have approved two insurance vendors and we will not approve other insurance vendors this year. If you fail to procure or maintain the insurance coverage required by the Franchise Agreement, we have the right to procure such insurance for you and you shall be responsible for reimbursing us for all costs, including premiums and any applicable administrative costs. If you fail to procure or maintain the required insurance coverage or fail to reimburse us, then we may consider such failure a default of the Franchise Agreement, which will expose you to penalties associated with such default, as discussed in the Operations Manual.

The insurance coverage requirements contained in the Franchise Agreement are required minimums. You should consult with your attorney, landlord, and any other insurance professional to determine whether any additional insurance coverage should be established, or amended for your Franchised Business. If any lawsuit, action, proceeding, claim, demand, investigation, or injury resulting from or arising out of the operations of the Franchised Business is asserted against BBF, which is either not covered by insurance, in excess of policy limits, or below the deductible minimums of the policy, you will be required to indemnify us. You acknowledge that BBF may modify or increase the insurance limits of liability required for all Centers during the term of this agreement due to changes in experience, market conditions, and regulatory or legal changes that could increase exposure, and you agree to comply with the new standards.

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.

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 30–34)