What rights does Bambu grant to the Franchisee regarding the development of shoppes?

right to establish and operate such shoppes under the terms and conditions contained in this MUD Agreement.

The parties therefore agree as follows:

1. GRANT OF DEVELOPMENT RIGHTS

• 1.1. Development Area. Bambu grants to Franchisee the right to develop and establish the number of shoppes described in the Addendum using Bambu's Marks and Bambū system in the geographic area described in the Addendum attached hereto (the "Development Area"). Except pursuant to Section 4.1 below, Bambu shall not establish, nor shall it license any other party to establish, shoppes using the Marks and Bambū system anywhere within the Development Area for so long as this MUD Agreement is in effect. Notwithstanding the foregoing, there may be existing Franchise Agreements in effect as of the date of this MUD Agreement under which Bambu has granted rights to third parties to operate Bambū shoppes in the Development Area (the "Existing Shoppes"). Franchisee agrees and acknowledges that the Franchise Agreements for such Existing Shoppes may remain in effect, and nothing in this MUD Agreement shall prevent, prohibit, or restrict the operations of such Existing Shoppes. Bambu may renew the Franchise Agreements or enter into successor Franchise Agreements for such Existing Shoppes.
• 1.2. Franchisor's Reservation of Rights. Franchisee acknowledges that the rights granted in this MUD Agreement are non-exclusive and that Bambu, for itself and its affiliates, successors and assigns, reserves the rights, among others:
  • (a) to use the Marks to identify any type of products and services, promotional and marketing efforts or related items, and to identify products and services distributed or otherwise made available through alternative channels of distribution (other than Bambū shoppes), at any

location, and on any terms and conditions as Bambu determines including, but not limited to, sales through channels such as wholesale or retail distribution, Internet marketing and distribution, social media marketing, mail order, catalog, retail store display or made-to-order or pre-packaged product sales in grocery stores, at any location;

• (b) to use and license the use of different proprietary marks or methods (for example, if Bambu acquires or is acquired by another business that provides products and services similar to or the same as a shoppe) in connection with the sale of products and services similar to or the same as those which Franchisee sells, whether in alternative channels of distribution or through owning, developing, operating or franchising stores which are the same as, or similar to, or different from Bambū shoppes, at any location, and on any terms and conditions as determined by Bambu;
• (c) To use and to license others to use the Marks and Bambū system to establish restaurants similar to Bambū shoppes that service walkup and drive-thru customers but without indoor seating (a "Drive-Thru shoppe"), at any location, including in Franchisee's Development Area; provided that if Bambu desires to open or permit someone else to open a Drive-Thru shoppe in Franchisee's Development Area, Bambu will give Franchisee a right of first refusal to participate in the Drive-Thru shoppe with either partial or whole ownership thereof;
• (d) to use and license others to use the Marks and Bambū system to establish shoppes at Institutional Facilities at any location. "Institutional Facilities" means outlets that serve primarily customers located within a captive facility, such as parks charging admission, stadiums, amusement parks, theaters, art centers, airports, transportation facilities, department stores, business and industrial complexes, museums, educational facilities, hospitals, military complexes, buyer club facilities, casinos, resorts, hotels, and convention centers. Bambu, on behalf of itself, its affiliates and designees, reserves the right to contract with Institutional Facilities to develop and operate shoppes within these facilities; and
• (e) to engage in any other activities not expressly prohibited by this MUD Agreement.
• 1.3. Franchise Agreement First Shoppe Developed. The parties acknowledge that the Bambū Franchise Agreement governing the operation of Franchisee's first Bambū shoppe to be opened hereunder is being executed concurrently with this MUD Agreement. Franchisee agrees to comply with the terms and conditions of the Franchise Agreement as a part of its obligations hereunder and acknowledges that failure to execute and comply with such Franchise Agreement is a breach of this MUD Agreement.
• 1.4. No Grant of Franchise. This MUD Agreement is not a franchise agreement and Bambu does not grant Franchisee any franchise rights or other similar rights to use the Marks or Bambū system under this MUD Agreement. Franchisee has no right to license or subfranchise others to use the Marks or Bambū system. Other than the right to enter into subsequent Franchise Agreements, as referenced in Section 3.2 below, nothing in this MUD Agreement grants to Franchisee the right to enter into any agreement with respect to the Marks or Bambū system.

2. INITIAL FRANCHISE AND DEVELOPMENT FEES

2.1. Fees.

• (a) In consideration of the development rights granted herein, concurrently with the execution of this MUD Agreement Franchisee will pay to Bambu a development fee equal to $19,000 multiplied by the number of additional shoppes, beyond the first shoppe, to be developed hereunder ("Development Fee"). This Development Fee is in addition to the initial franchise fee applicable for the first shoppe to be developed hereunder, which must be paid in accordance with the terms of the Franchise Agreement for that shoppe. The total Development Fee is set forth in the Addendum. Franchisee acknowledges that the Development Fee represents payment for the grant of the development rights and for a reserved Development Area and Bambu has fully earned the Development Fee upon receipt.
• (b) The initial franchise fee for each such additional shoppe shall be $39,000. Bambu will credit $19,000 of the Development Fee to the initial franchise fee due under the Franchise Agreement for each of the second and subsequent shoppes to be developed under this MUD Agreement. After applying the credit for the portion of the Development Fee as described above, the balance of the initial franchise fee of $20,000 shall be due upon execution of the Franchise Agreement for that shoppe, but no later than the deadline set forth in the Development Schedule (defined in Section 3.1) for signing that Franchise Agreement. Franchisee shall also be required to pay the Training Fee set forth under each Franchise Agreement in such manner and time as set forth in each Franchise Agreement.
• (c) Other than to have applied the portions of the Development Fee to a portion of the initial franchise fee for subsequent Franchise Agreements as described in Section 2.1(b), all fees hereunder are nonrefundable once paid to Bambu and under no circumstances will Franchisee be entitled to a refund, return or rebate of any portion of initial franchise fees paid hereunder.

3. DEVELOPMENT OBLIGATIONS

• 3.1. Development Schedule. Franchisee agrees to develop the following number of shoppes in the Development Area, including the shoppe to be developed under the Franchise Agreement executed concurrently with this MUD Agreement, in accordance with development schedule set forth in the Addendum (the "Development Schedule"). Franchisee agrees that time is of the essence with respect to compliance with the Development Schedule, payment of the balance of the initial franchise fees under Section 2.1(b) above and any and all other obligations to be performed by Franchisee hereunder. Further, Franchisee shall continuously maintain in operation at least the number of shoppes set forth on the Development Schedule.
• 3.2. Subsequent Franchise Agreements. The parties agree that a separate Franchise Agreement shall be executed by the parties to this MUD Agreement for each shoppe to be developed under this MUD Agreement. Franchisee will exercise its right for development of each shoppe by giving Bambu written notice of its intention to develop such shoppe at least 90 days in advance of the deadline set forth in the Development Schedule for executing each applicable Franchise Agreement. The Franchise Agreement for the second and subsequent shoppes will be executed by the deadline set forth in the Development Schedule. Franchisee's failure to execute any additional Franchise Agreements or its default in any term of such Franchise Agreements may, at the option of Bambu, be deemed a default under this MUD Agreement and shall entitle Bambu to terminate this MUD Agreement as further provided in Article 4 below. Each Franchise Agreement to be executed by Franchisee for each shoppe to

be developed hereunder shall be in the form of Franchise Agreement then generally being offered to franchisees by Bambu, which may contain terms substantially different from the terms of the initial Franchise Agreement executed hereunder. Notwithstanding the foregoing, Bambu agrees that it will not charge an initial franchise fee to Franchisee which is greater than the amounts set forth in Section 2.1(b) above. Franchisee acknowledges that Bambu has the right, however, to charge then current rates for royalty fees and all other fees, and for purchases of products and services offered to Franchisee, in accordance with Bambu's then-current franchise agreement.

• 3.3. Site Selection. Franchisee shall not, without the prior written approval of Bambu, enter into any contract for the purchase or lease of any premises for use as a Bambū shoppe. Bambu will assist Franchisee in the selection and approval of locations for its shoppes in accordance with the terms and conditions of the Franchise Agreements. Franchisee acknowledges that Bambu has no obligation to select or acquire a location on behalf of Franchisee.
• 3.4. Training Program. Franchisee acknowledges that Bambu shall have the right, at Bambu's sole discretion, to waive the initial training program, which is the same as or similar to the training provided under Section 6.1 of the Franchise Agreement executed concurrently herewith, for the second and each subsequent shoppe developed under the terms of this MUD Agreement. Franchisee may also request additional assistance from Bambu in connection with site selection, site feasibility studies, lease negotiations and other issues related to development of its Development Area. In the event that Bambu agrees to provide such assistance, in Bambu's sole discretion, Franchisee agrees to pay all fees associated with such assistance, together with all travel, lodging, living expenses, telephone charges and other identifiable expenses incurred in connection with such assistance, plus a fee based on daily or hourly time spent by any of Bambu's employees in connection with such assistance.

4. TERM AND TERMINATION

• 4.1. The term of this MUD Agreement shall commence as of the date of execution hereof and shall end on the earlier of (1) the date the last Franchise Agreement is executed to open the maximum number of shoppes set forth in the Addendum, or (2) the date of the deadline set forth in the Development Schedule for Franchisee to execute the Franchise Agreement for the last of its shoppes to be developed under this MUD Agreement.

Source: Item 23 — Receipts (FDD pages 52–209)