services in your area, and technological advances, which we cannot predict at this time.

You may obtain your office computer hardware from any reputable supplier. You are not required to secure a computer maintenance contract, but you must ensure that all programs and applications running on your computer are legally licensed.

We retain the right to data ownership for everything related to the Brain Balance systems, programs, and operations.

Application License Agreement

You must license the Software/Application required for your Center by executing the Application License Agreement attached as Exhibit 1 to Exhibit A (Franchise Agreement) and as Exhibit 1 to Exhibit B (Satellite Franchise Agreement) when you execute your Franchise Agreement. The Application performs administrative functions for your Center, including collection of data relating to your customers and transmission of the data to our research facility affiliate.

The Application License Agreement requires payment to us of an initial license fee and annual maintenance fees and its term is for the term of the Franchise Agreement. The Application License Agreement entitles you to multiple users at your Center. Presently, the Software and Applications are being developed exclusively for BBF, but if we change the operating system and contract with a third-party software vendor, you may be required to pay the software vendor directly for multiple users. We will provide support and maintenance of the proprietary Software/Application only, and you will be responsible for maintenance of your own hardware and communication software. (See Items 5 and 6 for the cost of the annual Software Maintenance fees.) We will also provide necessary upgrades to the Software/Applications on an ongoing basis, and, if any upgrade is provided to you, you must implement it. The upgrades will

be provided at no additional cost to you (Application License Agreement §1(a) A). You must permit the Franchisor access to the Software/Application and its data and must perform the actions required to permit the Franchisor to communicate with the Software/Application and to access and record it and its data, including, for example, the purchase, installation, and maintenance of appropriate communication hardware and software (Franchise Agreement §15; Application License Agreement §2(a)).

To ensure secure and consistent communication, all franchisees are required to use Brain Balance's email system. Each Center will be assigned a primary email address along with two (2) additional accounts, one of which will be designated for the Center owner to receive sensitive communications.

Manuals

Before you open your Brain Balance® Center, the Franchisor will make the Operations Manual, the training manual, and form templates available to you via download. The Franchisor will provide you with any modifications, additions, and deletions to the Operations Manual as it determines in its sole discretion (Franchise Agreement 9.02(f)). BBF reserves the right to amend or modify the Operations Manual from time to time, at our sole discretion, and you agree to abide by all such revisions at your own expense. Revisions to the Operations Manual will not unreasonably affect your obligations, including economic requirements under the Franchise Agreement.

The table of contents of the Operations Manual is attached as Exhibit I. Our Operations Manual is 155 pages long.

Site Selection

You must identify a location for your Center, obtain our approval for the location and the lease, sign the lease for the Center within 120 days of the execution of your Franchise Agreement, and open the Center within nine (9) months after the date of the Franchise Agreement. Within ten (10) days after you execute any lease for the premises, you must deliver a copy of the lease to us. Other than the specific provisions we require, we do not review your lease or its business terms. We may recommend a real estate services company that can assist you with your lease negotiation and work letter, which may increase the likelihood of receiving review more quickly.

We consider traffic patterns, demographics, available parking, and other factors when deciding whether to approve a proposed Center location. Ideally, your Center should be in a safe, approved location with well-lighted parking areas, located close to a highly visible area near a major roadway. There should be enough parking to accommodate at least 15 Center related cars. You are not permitted to share your Center space with any other business entity.

If at any time during your franchise agreement you move locations, the same requirements apply for site selection and approval.

Time to Open

The typical length of time to open a Center after signing the franchise agreement is six to seven months. It will typically take you 3 to 6 months after we approve your site to open.