What rights does the Company grant to the Developer for B Bops Restaurants?

VELOPMENT RIGHTS. Company hereby grants to Developer, subject to the terms and conditions of this Agreement, the exclusive right to develop B-Bop's Restaurants in the Trade Area in compliance with the Development Schedule. Developer hereby agrees to develop, construct and open for business B-Bop's

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Restaurants within the Trade Area in accordance with the Development Schedule and with the terms and conditions of this Agreement. Developer further agrees to develop, own, operate, maintain and promote each B-Bop's Restaurant (hereinafter referred to as a "Unit") in accordance with the terms and conditions contained in the standard form of franchise agreement being utilized by Company to grant B-Bop's Restaurant franchises at the time of development of each such Unit (hereinafter referred to as a "Unit Franchise Agreement"), to be executed by Developer as specified in Section 6 hereof. Company agrees that it shall not establish, or license any third party to establish, a B-Bop's Restaurant in the Trade Area prior to the termination or expiration of this Agreement.

• 1. TERM. The term of this Agreement and of the development rights granted hereunder shall commence upon the effective date of this Agreement and shall continue until the date specified in Appendix II attached hereto, unless terminated earlier in accordance with Section 11 hereof. Termination or expiration of this Agreement shall constitute a termination or expiration of the development rights granted hereunder. This Agreement and the development rights may be renewed upon such terms and conditions as Company and Developer may mutually agree upon expiration of the term hereof.
• 1. DEVELOPMENT FEE. In consideration of the development rights granted by Company hereunder, Developer agrees to pay Company by certified or cashier's check the development fee specified in Appendix III attached hereto upon execution of this Agreement. Such fee shall be deemed fully earned upon execution of this Agreement and shall not be refundable to Developer under any circumstances. Any deposit paid by Developer prior to execution of this Agreement shall be applied toward satisfaction of the development fee. A portion of such development fee, to be specified in Appendix III attached hereto, shall be applied by Company toward the initial franchise fee payable under the Unit Franchise Agreement executed for each Unit developed by Developer pursuant to this Agreement. Company and Developer acknowledge and agree that the payment terms imposed by this Agreement with respect to the development fee and the initial franchise fee payable for Units developed pursuant hereto are in lieu of and supersede the terms of any Unit Franchise Agreement relating to the amount and time of payment of the initial franchise fee.
• 1. TIMELY PERFORMANCE. The development rights provided hereunder have been granted by Company in reliance upon Developer's representations and assurances, among others, that the conditions set forth in this Agreement will be satisfied on a timely basis. Where Developer has exhibited due diligence in complying with the terms and conditions of this Agreement and the Development Schedule, Company may, in its sole discretion, grant an extension of the time requirements imposed by the Development Schedule. No such extension shall be valid unless in writing and executed by an officer of Company. Company and Developer acknowledge and agree that the Development Schedule imposed herein is in lieu of and supersedes the terms of any Unit Franchise Agreement with respect to the allowable time period for construction and opening of any Unit established pursuant to this Agreement.
• 1. SITE SELECTION. Developer acknowledges that Developer shall be responsible to select and secure a site acceptable to Company for the location of each Unit to be developed

pursuant to this Agreement. Developer agrees to submit a written report to Company of each proposed site for a Unit in the Trade Area, containing such information or material as Company may reasonably request. Company shall review the submitted materials, conduct such other investigation of the proposed site it determines may be necessary to properly evaluate the same and, in its sole discretion, either approve or reject such site by written notice to Developer within thirty (30) days after receipt of such materials, but such approval is not to be unreasonably withheld. If the proposed site is approved, the Company will also advise you, within the same thirty (30) day period, whether or not you will be required to include indoor seating in the construction and operation of the B-Bop's Restaurant. Developer agrees that Developer will not enter into any binding agreement with respect to lease or purchase of a proposed site prior to receiving Company's written approval of such site. Developer acknowledges and agrees that approval of a proposed site by Company does not constitute a representation or warranty by Company that such site, with or without indoor seating, will prove to be a successful location for the Unit, and Developer assumes all risks associated with establishing the Unit at such location.

• 1. EXECUTION OF UNIT FRANCHISE AGREEMENT. Upon approval of a proposed site, Company shall grant Developer the right and license to own and operate a B-Bop's Restaurant at such site, provided that Developer is in compliance with the terms of this Agreement and the terms of all Unit Franchise Agreements between the parties. Subject to the foregoing, Company shall forward to Developer a Unit Franchise Agreement to be executed with respect to the approved site.

Source: Item 23 — RECEIPTS (FDD pages 53–145)