What rules and regulations must a C12 Group franchisee comply with?

C12 membership is limited to Christian business Owners, CEOs, Presidents, and General Managers (and their team members) who give assent to Franchisor's Doctrine Statement or seek to understand these values and principles as they seriously consider the claims of Christ.

Each member agrees to group confidentiality, Christian conflict resolution, and being a part of an 'iron sharpening iron' peer group process that requires both listening and speaking in mutual ministry efforts.

Franchisee must achieve a minimum level of target market penetration to maintain exclusivity within Territory.

Franchisor defines Franchisee's "Baseline Target" using publicly available data, including, without limitation, the relevant Intelligent Direct, Inc (IDI) dba GbBIS business census in the Territory and research data provided by The Barna Group on the percentage of 'practicing Christians' or 'evangelical Christians' by region to establish the market potential in regard to the number of prospective member companies within the Territory.

Franchisee must achieve the minimum performance levels set forth in Section IV.8.a. to maintain exclusivity within the Territory.

If Franchisee fails to achieve such minimum performance levels, Franchisor may reduce the size of Franchisee's Territory, authorize another franchisee to operate a C12 Group franchise within Franchisee's Territory, or operate a C12 Group business within Franchisee's Territory.

Franchisor may modify the System Standards at any time and in Franchisor's sole discretion, and Franchisee shall take all steps necessary to comply with changes to Franchisor's System Standards.

In accordance with following Franchisor's System Standards, Franchisee shall, without limitation, use the C12 agendas, facilitation standards, materials, segments, forms, logos, websites (both the general C12 website and the specific C12 site for the Territory and any website Franchisee authors for the Territory), and formats, and strictly follow the C12 Brand Standards Guide for paper and colors as directed without any deviation or substitution except as approved ahead of time in writing by Franchisor.

Franchisee shall establish fixed meeting dates and locations (e.g., third Tuesday of each month, from 9 AM to 4 PM, at Lord's Country Club) and standard C12 service delivery approaches (e.g., monthly 60-90- minute One-on-One meetings (Focus60) scheduled with C12 members between the monthly CEO Forum meetings).

Franchisee shall engage with its members, reliably and according to Franchisor's model, and Franchisee shall serve as a facilitator, and not as a teacher or preacher, in engaging Franchisee's peer group members.

Franchisee shall not reproduce the C12 trade name, logo, or copyrighted materials beyond normal, permitted uses in monthly C12 meetings, events, seminars, and marketing efforts, without Franchisor's prior written permission and compliance with the C12 Brand Standards Guide.

Franchisee shall not solicit Franchisee's C12 members for the purpose of selling them other products or services.

Franchisee shall maintain current information on Franchisor's website(s) regarding Franchisee, Franchisee's local group meeting locations and times, local C12 events and news, and provide every C12 member an opportunity to participate in any global C12 web functionality (e.g., search for other members, benchmarking, bulletin board/blog functions, etc.).

Franchisee shall adhere to and comply with Franchisor's basic business model and its various standard processes, due dates, and payments, as they may be revised from time to time in Franchisor's sole discretion.

Franchisee agrees to comply with Franchisor's rules, regulations, methods, procedures, programs, policies, and standards, as may be modified in Franchisor's sole discretion from time to time, set forth in Franchisor's Operations Manual or as otherwise communicated to Franchisee in writing and to adhere to standards of Christian conduct as established in Scripture. Franchisee shall only offer and sell those services and products that Franchisor has approved of in writing or as provided for in Franchisor's Operations Manual. Franchisor may modify the approved products or services in Franchisor's sole discretion from time to time, and Franchisee must comply with such modifications.

Franchisee must possess and use a personal computer in the day-to-day operation of the Franchised Business in order to effectively communicate with both Franchisor and Franchisee's local C12 members.

Franchisee's computer must be up to date and be able to interface with Google Workspace.

Franchisee must also have the capability to print C12 materials.

In order to deliver the required content at monthly forums with mixed media capability, Franchisee agrees to acquire necessary computer devices, projection, audio/video and recording equipment sufficient to project digital video and broadcast audio as Franchisor may require from time to time.

Franchisee must purchase and utilize all computer hardware, software, applications, and other means of technology as Franchisor may require from time to time.

Franchisee must obtain and maintain appropriate certifications, licenses, registrations, and insurance coverage as necessary to conduct business locally and based on sound business judgment.

If the next Semi-Annual Chair Training is outside the aforementioned ninety-day period, Franchisee must attend the next scheduled training.

During the first twelve (12) months of Franchisee's operation, Franchisee will also have access to a number of optional topical workshops and training classes.

• c. Franchisee shall launch a direct marketing campaign.
• d. Franchisee shall host an initial C12 introductory event and/or initial CEO Forum meeting in the Territory.
• e. Franchisee must report to Franchisor and make progress regarding the specific Business Plan Goals and Action Plan Goals that Franchisee established as part of Training Week.

If Franchisor determines that Franchisee has not complied with or is not making substantial progress toward complying with (a) through (e) above Franchisor may require Franchisee to perform a Remediation Plan that Franchisor may, in its own discretion, establish. If Franchisee is unable or unwilling to perform such Remediation Plan, Franchisor may terminate this Agreement.

Following New Chair Training, Franchisee must participate in Franchisor's monthly conference calls/webinars and Semi-Annual Chair Training.

Franchisee may only miss attending any of these meetings with Franchisor's prior written approval, which will not relieve Franchisee from its responsibility to pay the applicable attendance fee(s).

Franchisee shall conduct the Franchised Business according to the standard elements of the C12 business model and web platform/App to enable maximum mutual benefit for Area Chairs and C12 members across the franchise system.

Franchisee shall operate the Franchised Business at all times in accordance with Franchisor's System Standards as set forth in the Operations Manual and other sources as Franchisor designates.

Franchisor may modify the System Standards at any time and in Franchisor's sole discretion, and Franchisee shall take all steps necessary to comply with changes to Franchisor's System Standards.

Franchisee agrees to not own an interest or participate in any business viewed as competitive, injurious, or incompatible with Franchisor and the C12 Franchised Business. Franchisee agrees to engage in the C12 Franchised Business as Franchisee's primary vocation with no other vocational interests that may materially adversely impair Franchisee's ability to perform Franchisee's obligations hereunder.

Franchisee agrees to not purposely solicit (either directly or indirectly) any prospective C12 member who lives and works in the territory of another C12 franchisee. Such 'poaching' is deemed by C12 to be a material breach of this Agreement that strikes at the unity of the C12 franchise system and is grounds for termination upon notice to Franchisee. If one of Franchisee's C12 members desires, for any reason, to consider becoming a member of a Business Forum in another C12 franchisee's territory and personally initiates a request to transfer their membership to another group, Franchisee shall enable the member to attend a full meeting in the other group (presuming room exists for their potential membership) before they reach a final decision. This C12 policy is aimed at serving the best

interests of each member and is ultimately deemed as the best policy for C12 franchisees. In such a scenario, Franchisee agrees that there will be no compensation to either Franchisee or the other C12 franchisee as a result of a member choosing to make such a transfer.

Franchisee agrees to exercise best efforts to ensure that C12 members abide by Franchisor's code of conduct and support sound biblical doctrine.

Franchisee further agrees that, as leaders of leaders, C12 Area Chairs are required to abide by a covenant of "above reproach" conduct.

Behaviors that could be questionable or cause members/customers to stumble are to be avoided by Franchisee with a high degree of wisdom and prudence.

Specifically, Franchisee and its Area Chairs shall abstain from the use of all smoking products.

Franchisor and Franchisee agree that these are not biblical mandates or evil but rather represent areas of personal sacrifice and restraint that Franchisor expects of all franchisees out of service to C12 members and preservation of Christian witness (see Romans 14:13; 1 Corinthians 8:9, 10:31-32; 2 Corinthians 6:3).

Source: Item 22 — CONTRACTS (FDD page 46)