What is the Focalpoint Coaching franchisee's responsibility regarding the goodwill of the Marks?

ces and regulations, including, without limitation, government regulations relating to occupational hazards, health, worker's compensation and unemployment insurance and withholding and payment of federal and state income taxes, social security taxes and sales and service taxes.

All advertising and promotion by Franchisee must be completely factual and must conform to the highest standards of ethical advertising. The Franchised Business must in all dealings with its clients, suppliers, Franchisor and the public adhere to the highest standards of honesty, integrity, fair dealing and ethical conduct. Franchisee agrees to refrain from any business or advertising practice which may be injurious to Franchisor's business and the goodwill associated with the Marks and other FocalPoint Franchised Businesses. Franchisee must notify Franchisor in writing within five (5) days of the commencement of any action, suit or proceeding, and of the issuance of any order, writ, injunction, award or decree of any court, agency or other governmental instrumentality, which may adversely affect Franchisee's operation or financial condition or that of the Franchised Business and of any notice of violation of any law, ordinance, or regulation relating to the Franchised Business.

C. CONDUCT OF BUSINESS/ADEQUATE PERSONNEL.

Franchisee shall maintain a competent, conscientious, trained staff, including a fullytrained, full-time manager, which may be Franchisee (or Franchisee's Managing Owner) or a Business Manager who Franchisor approves, with responsibility for direct supervision of the Franchised Business. Franchisee shall take such steps as are necessary to ensure that its Associates and other employees preserve good client relations; render competent, prompt, courteous, and knowledgeable service; and meet such minimum standards as Franchisor may establish from time to time in the Operations Manual or otherwise in writing. Franchisee and its Associates and other employees shall handle all client complaints, refunds, returns, and other

adjustments in a manner that will not detract from the name and goodwill of the Marks, the Franchise System or Franchisor.

Franchisee must keep Franchisor informed at all times of the identity of any supervisory employee(s) acting as the Business Manager or other assistant manager(s) of the Franchised Business. Franchisee (or Franchisee's Managing Owner) and/or the Business Manager must devote full time and efforts to the management and supervision of the Franchised Business. If Franchisee (or Franchisee's Managing Owner) owns more than one FocalPoint Franchised Business, each FocalPoint Franchised Business must be under the direct supervision of a business manager Franchisor has approved and who has completed Franchisor's training programs. Franchisee (or Franchisee's Managing Owner) is solely responsible for all employment decisions for the Franchised Business, including hiring, firing, remuneration, personnel policies, training, benefits, and maintaining supervision and discipline, regardless of whether Franchisee received advice from Franchisor on any of these subjects.

D. INSURANCE.

Within thirty (30) days after the Effective Date and during the term of this Agreement Franchisee must maintain in force at Franchisee's sole expense comprehensive public liability, general liability, product liability and motor vehicle liability insurance against claims for bodily and personal injury, death and property damage caused by or occurring in connection with the Franchised Business' operation, all containing the minimum liability coverage Franchisor prescribes from time to time. Franchisor may periodically increase the amounts of coverage required under these insurance policies and/or require different or additional insurance coverages (including reasonable excess liability insurance and employment practices 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. Required coverage shall include insurers' waiver of subrogation against Franchisor and Franchisee shall waive rights of recovery against Franchisor.

These insurance policies must name Franchisor, any affiliates Franchisor designates and the Indemnified Parties (as identified in Subsection 16.D below) as additional named insureds for claims arising from the Franchised Business' operation and provide for thirty (30) days' prior written notice to Franchisor of a policy's material modification, cancellation or expiration. These insurance policies must be primary to and without right of contribution from any other insurance policy purchased by Franchisor or any other Indemnified Party;

Source: Item 22 — Contracts (FDD pages 56–57)