pment Fee payment to satisfy half of the initial franchise fee due thereunder, and you shall pay the balance of the initial franchise fee.

4. DEVELOPMENT SCHEDULE AND MANNER FOR EXERCISING DEVELOPMENT RIGHTS

• 4.1. Separate Franchise Agreements. The Franchise Agreement for the first Store to be developed under this Agreement is the form attached as Attachment F. The Franchise Agreement for the second and each additional Store to be developed is the form of Franchisor's then-current Franchise Agreement, the terms of which may be materially different from the terms of Attachment F; provided that the initial franchise fee payable thereunder will be the amount reflected in the Summary Page.
• 4.2. Development Schedule. Recognizing that time is of the essence, you agree to satisfy the Development Schedule set forth in Attachment B.

4.3. Manner for Exercising Development Rights.

• 4.3.1. Before exercising any development rights granted hereunder, you shall apply to Franchisor for a franchise to operate a Store. If Franchisor, in its sole discretion, determines that you have met each of the following operational, financial, and legal conditions, then Franchisor will grant you a franchise for each respective Store:
• (a) Operational Conditions: You are in compliance with the Development Schedule and this Agreement, and you or your Affiliates are in compliance with any other agreement between them and Franchisor or its Affiliate. You are conducting the operation of your existing Stores, if any, and are capable of conducting the operation of the proposed Store in accordance with the terms and conditions of this Agreement, the respective Franchise Agreements, and the standards, specifications, and procedures set forth and described in the Manuals (defined in the Franchise Agreement).
• (b) Financial Conditions: You and your Owners satisfy Franchisor's then-current financial criteria for developers and Owners of Stores. You and your Owners have been and are faithfully performing all terms and conditions under each of the existing Franchise Agreements and related agreements with Franchisor or its Affiliate. You are not in default, and have not been in default during the 12-month period immediately preceding your request for financial approval, of any monetary obligations owed to Franchisor or its Affiliates under any Franchise Agreement or any other agreement between you or your Affiliates and Franchisor or its Affiliates. You acknowledge and agree that it is vital to Franchisor's interest that each of its franchisees must be financially sound to avoid failure of a Store and that such failure would adversely affect the reputation and good name of the Store and the System.
• (c) Legal Conditions: You have submitted to Franchisor, in a timely manner, all information and documents requested by Franchisor as a basis for the issuance of individual franchises or pursuant to any right granted to you by this Agreement or by any Franchise Agreement.
• 4.4. Development Schedule. Acknowledging that time is of the essence, you agree to exercise your development rights according to Section 4.3. and the Development Schedule reflected Attachment B. You may, subject to the terms and conditions of this Agreement and with Franchisor's prior written consent, which may be withheld in its sole discretion, develop more than the total minimum number of Stores which you are required to develop during any Development Period. Any Store developed in excess of the minimum number of Stores required to be developed shall be applied to satisfy your development obligation during the next succeeding Development Period, if any. Notwithstanding the above, you shall not open or operate more than the cumulative total number of Stores you are obligated to develop under the Development Schedule.
• 4.4.1. If during the term of this Agreement, you cease to operate any Store developed under this Agreement for any reason, you shall develop a replacement Store. The replacement Store shall be developed within a reasonable time (not to exceed 180 days) after you cease to operate the original Store. If, during the term of this Agreement, you transfer your interest in a Store in accordance with the terms of the applicable Franchise Agreement for the Store, the transferred Store will continue to be counted in determining whether you have complied with the Development Schedule so long as it continues to be operated as the Store with the Authorized Brand. If the transferred Store ceases to be operated as a Store with the Authorized Brand during the term of this Agreement, you shall develop a replacement Store within a reasonable time (not to exceed 180 days) thereafter.
• 4.4.2.

Source: Item 22 — CONTRACTS (FDD page 68)