What are the limitations on a Big Apple Bagels developer's use of the Proprietary Information?

or provided it to Developer directly or indirectly; which, at the time Franchisor disclosed it to Developer, already had lawfully become generally known in the industry through publication or communication by others (without violating an obligation to Franchisor); or which, after Franchisor disclosed it to Developer, lawfully becomes generally known in the industry through publication or communication by others (without violating an obligation to Franchisor). However, if Franchisor includes any matter in Proprietary Information, anyone who claims that it is not Proprietary Information must prove that one of the exclusions provided in this paragraph is fulfilled.

B. Limitations on Developer's Use. Developer acknowledges and agrees that he will not acquire any interest in the Proprietary Information, other than the right to utilize it in the

development and operation of Stores pursuant to this Agreement, and that the use or duplication of the Proprietary Information in any other business would constitute an unfair method of competition. Developer acknowledges and agrees that the Proprietary Information is confidential and a trade secret of Franchisor and is disclosed to Developer solely on the condition that Developer agrees, and Developer does hereby agree, that he: (1) will not use the Proprietary Information in any other business or capacity; (2) will maintain the absolute confidentiality of the Proprietary Information during and after the term of this Agreement; (3) will not make unauthorized copies of any portion of the Proprietary Information disclosed in written, visual, or electronic form; and (4) will adopt and implement all reasonable procedures prescribed from time to time by Franchisor to prevent unauthorized use or disclosure of the Proprietary Information, including without limitation, restrictions on disclosure thereof to employees of BAGELS Stores and the use of nondisclosure and noncompetition clauses in employment agreements with employees and agents in the form prescribed by Franchisor, including naming Franchisor as an intended third party beneficiary.

• C. Developer acknowledges and agrees that Franchisor would be unable to protect its trade secrets against unauthorized use of disclosure and would be unable to encourage a free exchange of ideas and information among BAGELS Stores if owners of BAGELS Stores were permitted to hold interests in any other bagel or coffee store business. Developer acknowledges that Franchisor has granted the development rights to Developer herein set forth in part in consideration of, and in reliance upon, Developer's agreement to deal exclusively with Franchisor. Therefore, during the term of this Agreement, neither Developer, any shareholder, partner, or member (in the event Developer is a corporation, partnership, or limited liability company), nor any member of his or their immediate families shall have any interest as an owner, investor, partner, director, officer, employee, consultant representative, agent, lender, lessor or in any other capacity, in any business engaged in the bagel or coffee industry except for BAGELS Stores or My Favorite Muffin Stores operated under Franchise Agreements granted by Franchisor and the ownership of securities listed on a stock exchange or traded on the over-the-counter market that represent three percent (3%) or less of that class of securities.
• D. Innovations. All ideas, concepts, techniques, and marketing, advertising or other materials relating to a bagel, muffin, and/or coffee store, whether or not protectable intellectual property and whether created by or for Developer or Developer's owners or employees, must be promptly disclosed to Franchisor and will be deemed to be Franchisor's sole and exclusive property, part of Franchisor's System, and works made-for-hire for Franchisor. To the extent that any item does not qualify as a "work made-for-hire" for Franchisor, by this paragraph Developer assign ownership of that item, and all related rights to that item, to Franchisor and agree to take whatever action (including signing assignment or other documents) Franchisor requests to evidence Franchisor's ownership or to help Franchisor.

Source: Item 23 — RECEIPTS (FDD pages 87–319)