What right does Dermani Medspa grant to the franchisee regarding the Medspa?

Pursuant to the terms and conditions of this Agreement, we hereby grant to you the right, and you accept the obligation, to develop a specified number of Franchised Businesses in the Development Area, as set forth Exhibit A attached hereto.

In this regard, you further agree:

• 1.1.1. To develop the Franchised Businesses and dermani MEDSPA®s pursuant to the development schedule set forth in Paragraph 3 of Exhibit A attached hereto (the "Development Schedule").

If at any time during the term of this Agreement you fail to satisfy the Development Schedule, then we have the right, but not the obligation, to exercise our termination rights and other rights pursuant to Section 8 below;

• 1.1.2. that each dermani MEDSPA® developed under this Agreement must be established and managed by a Franchised Business pursuant to a separate dermani MEDSPA® Franchise Agreement (a "Franchise Agreement") that must be executed as provided in Section 3.1 below; and

• 1.1.3. that each Franchised Businesses and dermani MEDSPA® developed under this Agreement must be located within the area that is specified in Paragraph 2 of Exhibit A, attached hereto (the "Development Area").

• 1.2. No Protections to Development Area.

Your rights within the Development Area are nonexclusive, and we may award the same Development Area to multiple area developers.

However, we will not sell the right to develop more dermani MEDSPA®s than the total number of available territories available in the Development Area.

• 1.3. Rights we Reserve.

We retain all rights with respect to Franchised Businesses and dermani MEDSPA®s, the System, the Marks, the sale of similar or dissimilar services, and any other activities we deem appropriate whenever and wherever we desire, including, but not limited to:

• 1.3.1. the right to operate, and to grant others the right to operate, Franchised Businesses and similar medical management businesses or similar medspas or medical centers under different names or marks located anywhere within or outside the Development Area under any terms and conditions we deem appropriate and regardless of proximity to the Premises or the Development Area;

• 1.3.2. the right to establish and operate (and to grant to others the right to establish and operate) any other businesses offering products and services that are different from the products or services offered at dermani MEDSPA®s through similar or dissimilar channels of distribution (including, but not limited to: (i) sales through direct marketing, such as over the Internet or through catalogs or telemarketing; (ii) sales through retail stores that do not operate under the Marks; and (iii) sales made at wholesale), at any locations inside or outside the Development Area under trademarks or service marks other than the Marks and on any terms and conditions we deem appropriate;

• 1.3.3. the right to acquire the assets or ownership interests of one or more businesses that operate, and/or has granted franchises, licenses, or similar rights to one or more third parties to operate, businesses similar to and/or competing with dermani MEDSPA®s and Franchised Businesses related to dermani MEDSPA®s, and/or the right to be acquired by a competing medical business or medical management business, or by another business, even if such business operates, franchises and/or licenses competitive businesses in the Development Area, and that if we acquire, or are acquired by, such a competing business or chain, we may establish or grant franchises or licenses to establish new or additional

Source: Item 23 — RECEIPTS (FDD pages 66–311)