What are the terms and conditions for the Developer to develop B Bops Restaurants in the Trade Area?

nsed Marks"); and

WHEREAS, Developer desires to obtain certain rights to develop B-Bop's Restaurants at locations in the geographic area described in Appendix I attached hereto (such area to be hereinafter referred to as the "Trade Area"); and

WHEREAS, Company and Developer have mutually agreed upon the time schedule set forth in Appendix II attached hereto for the development of B-Bop's Restaurants in the Trade Area (such schedule to be hereinafter referred to as the "Development Schedule"); and

WHEREAS, the terms and conditions contained in this Agreement have been negotiated in reliance upon the unique financial and management ability of Developer to establish a multiple-unit franchise system.

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. GRANT AND ACCEPTANCE OF DEVELOPMENT 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. The Unit Franchise Agreement shall be the standard form of franchise agreement being utilized by Company to grant franchises at the time of development of each Unit. Developer shall execute the Unit Franchise Agreement in accordance with Company's instructions within twenty (20) days of receipt thereof and return it, together with the initial franchise fee payable for the Unit (as specified in Appendix III), to Company. In the event Developer fails to return the Unit Franchise Agreement and the initial franchise fee to Company within such twenty (20) day period, Company's approval of the site shall be null and void and Developer shall have no rights with respect to such site. The parties hereby acknowledge and agree that the terms and conditions of the Unit Franchise Agreement executed for the Unit developed pursuant to this Agreement shall govern and control the franchise relationship for each such Unit, except to the extent that such terms and conditions conflict with the provisions of this Agreement, in which event the provisions of this Agreement shall control. The parties further acknowledge and agree that the terms and conditions of each Unit Franchise Agreement executed pursuant to this Agreement shall remain in full force and effect notwithstanding the expiration and termination of this Agreement.
• 1. PROCUREMENT OF SITE AND CONSTRUCTION OF UNIT. Upon receipt of Company's approval of a proposed site, Developer shall immediately take the necessary steps to acquire the site (by purchase, lease or sublease) and obtain the rights to construct and operate a Unit on the site. As soon as practicable after procuring the site, Developer agrees to commence construction of the Unit in accordance with the terms of the Unit Franchise Agreement executed for such Unit, provided, however, that the Development Schedule imposed herein shall be in lieu of the terms of such Unit Franchise Agreement governing the time periods for construction and opening of the Unit.

• 1. FINANCIAL INFORMATION.

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