What is required of individuals to be granted a Degree Wellness franchise?

roducts and services may change from time to time. We identify the System by the use of certain trademarks, service marks and other commercial symbols, including the marks "Degree Wellness," and certain associated designs, artwork and logos, which we may change or add to from time to time (the "Marks").

• b. From time to time we grant to persons who meet our qualifications, franchises to own and operate a Degree Wellness Studio in accordance with the System in a specified geographic territory. This

Agreement is being presented to you because of the desire you have expressed to obtain the right to develop, own, and be franchised to operate a Degree Wellness Studio (we refer to your Degree Wellness franchise hereinafter as the "Franchise" or the "Franchised Business").

c. In certain cases, where permitted by law, we may offer franchises to persons or legal entities that meet our qualifications but are not licensed to practice or provide health related care, and are willing to undertake the investment and effort to own and operate a business that will manage a Studio under the System; we refer to these businesses as "Studio Management Businesses." For example, certain states do not permit non-licensed persons to own and/or health care practices, but some states do. In states that do not permit non-licensed persons to own or operate businesses performing health care related services, a Studio Management Business may be offered. In states that do permit non-licensed persons to own and operate health care businesses, a Studio Management Business Franchise is not necessary, but may be offered by us under certain circumstances.

As further described below, to operate a Studio Management Business, you must enter into a Franchise Agreement with us and a Management Agreement with a "PC" that will own and operate the Studio. A "PC" will be one or more licensed individuals, or a professional corporation or similar entity, such as a professional limited liability company, that is duly authorized to provide health care services under local and state laws. In such an arrangement:

• i) You, as franchisee, will construct or build-out the Studio for use by the PC.

• ii) The Studio business will be operated by the PC using the Degree Wellness name and Marks.

• iii) In addition to signing the Franchise Agreement with us, before you begin operating the Studio Management Business, you must enter into a management agreement ("Management Agreement") with the PC. If permitted by state and local law, the PC may be the same entity as your franchisee entity or have the same owners. Under the Management Agreement, you will provide the PC with management and administrative services and support consistent with the System to support the PC's health care business and its delivery of health care services and related services and products to patients at a Studio, consistent with all applicable laws and regulations. Our Franchise Disclosure Document contains a general form of Management Agreement as an exhibit that can serve as a starting point for satisfying this requirement, but the actual Management Agreement to be used must be approved by us, in our discretion, and must satisfy all requirements and limitations of applicable laws, rules and regulations of the state in which the Studio will be located.

• iv) You must obtain our written approval of the final Management Agreement prior to signing it with the PC. We may provide you with assistance in preparing the Management Agreement, but you are responsible for determining whether such agreement is in

• compliance with all applicable laws, rules and regulations of the state in which the Studio is located. You must have a Management Agreement in effect with a PC at all times during the operation of the Franchised Business and the Initial Term of this Agreement.

• v) We must approve the PC and its owners, but you are responsible for ensuring that the PC is in compliance with all applicable laws, rules and regulations of the state in which the Studio is located.

• vi) The PC will employ and control the personnel who will provide the health related services required to be delivered at and through the Studio. You may not provide any actual health care or any other professional services that require licensing or certification, nor will you supervise, direct, control or try to influence the exercise of professional and/or medical judgment, treatment protocols, employee decisions, advice, training, or relationships with patients, by the PC or any of its employees or agents.

• vii) The Continuing Franchise Fee described in Section 6.2 may be different, and if different, will be reflected in a negotiated addendum to be signed at the same time this Agreement is signed.

• 1.3 Due Diligence; No Other Representations. You acknowledge that you have received a complete copy of Franchisor's Franchise Disclosure Document at least 14 calendar days before you signed this Agreement or paid any consideration to Franchisor for your franchise rights.

• 1.4 Limit on Scope of System. Notwithstanding the development or implementation of the System, or any training, advice or instruction we may provide from time to time, we do not supervise, direct, control or try to influence any Franchise's: (a) exercise of professional and/or medical judgment, treatment protocols, employee decisions, advice, training, relationships with patients, or (b) relationships with its employees. Section 19 of this Agreement describes in more detail your responsibility to exercise your own professional judgment as to such matters.

• 1.5 Non-Uniform Agreements. You acknowledge and agree that we have previously entered into franchise agreements with other franchisees, that we may in the future enter into franchise agreements with other franchisees, and that some or all of those franchise agreements may have terms substantially different from those in this Agreement. You also acknowledge and agree that we may, in our sole discretion and business judgment, waive or modify comparable provisions of any of those franchise agreements in a non-uniform manner, so long as we do so on a reasonably non-discriminatory basis.

2. GRANT OF FRANCHISE.

1. 1 Term; Reference to Exhibit 1. You have applied for a franchise to own and operate a Degree Wellness Studio, and we have approved your application in reliance on all of the representations you made in that application. As a result, and subject to the provisions of this Agreement, we grant to you

• a Franchise to operate a Studio offering all products, services, and proprietary programs of ours in accordance with all elements of the System, that we may require for Degree Wellness Studios. You must operate the Franchise at a mutually agreeable site (the "Premises") to be identified after the signing of this Agreement, and to use the System and the Marks in the operation of that Franchise, for an "Initial Term" of 10 years. The Initial Term will begin on the Agreement Date, unless you are assuming the Franchise pursuant to a Transfer, in which case the length of the Initial Term shall be determined by the applicable Transfer Agreement. To avoid uncertainty, the expiration date of the Initial Term is listed on Exhibit 1. Termination or expiration of this Agreement will constitute a termination or expiration of your Franchise and the rights you received in connection with the Franchise, including your rights to use the Marks or any portion of the Confidential Information (defined below). All references to the "Term of this Agreement" refer to the period from the Agreement Date to the date on which this Agreement actually terminates or expires.
• 2.2 Full Term Performance. You specifically agree to be obligated to operate the Franchise, perform the obligations of this Agreement, and continuously exert your best efforts to promote and enhance the business of the Franchise for the entire Initial Term, and any subsequent renewal or extension of the Term of this Agreement.
• 2.3 Protected Territory; Reference to Exhibit 1; Reservation of Rights. You acknowledge that the Franchise granted by this Agreement gives you the right to operate your Franchise only at the Premises. Provided you are in full compliance with this Agreement, neither we nor our affiliates will operate or grant a franchise for the operation of another Studio franchise physically located within the territory described in Exhibit 1 (the "Protected Territory"). You and we will mutually designate your Protected Territory upon or after the signing of this Agreement and Exhibit 1 shall be deemed to be automatically updated and revised to reflect such designation or any mutually agreed upon changes to your Protected Territory. Except as otherwise provided in this Paragraph 2.3, we retain all rights with respect to Studio franchises, the Marks and the System, including (by way of example only and not as a limitation): (a) the right to operate or grant others the right to operate Studio franchises physically located outside the Protected Territory on terms and conditions we deem appropriate; (b) the right to operate or offer other healthcare-related companies or franchises or enter into other lines of business offering similar or dissimilar products or services under trademarks or service marks other than the Marks, both within or outside of the Protected Territory and to use other channels of distribution (for example, the internet, email, social media, telemarketing, or other direct marketing) in connection with such system(s) and/or location(s); (c) the right to sell or distribute, at retail or wholesale, directly or indirectly, or via the internet or any other means, or license others to sell or distribute, via any means (including the internet and other channels of distribution) any products that bear any proprietary marks, including the Marks, whether within or outside your Protected

Territory;

Source: Item 23 — Receipts (FDD pages 66–257)