What are the requirements for acquiring Development Rights from Cicis?

ty and Assumption of Obligations

AREA DEVELOPMENT AGREEMENT

CICIS® RESTAURANTS

THIS AREA DEVELOPMENT AGREEMENT (this "Agreement") is made and entered into as of the Effective Date (as defined below) by and between On Smile LLC, a Delaware limited liability company having its principal business address at 13355 Noel Road, Suite 1645, Dallas, TX 75240 ("we" or "us"), and the party signing this Agreement as the "Developer" on the signature page hereto ("you"). The "Effective Date" is the date we execute this Agreement, as shown beneath our signature on the signature page hereto.

1. PREAMBLES.

A. BACKGROUND.

Pursuant to separate written agreements (each a "Franchise Agreement"), we grant franchises (each a "Franchise") for the right to develop and operate restaurants that are identified by and use "Cicis" and other designated trademarks and service marks (the "Marks"), and that offer pizza and other designated food and related items from a designated facility and using designated service methods (each a "Cicis Restaurant"). There are two types of Cicis Restaurants: (1) dine-in buffet restaurants ("Cicis Buffet Restaurants"), and (2) take-out/delivery only restaurants ("Cicis To Go Restaurants"). We also grant to persons or entities that we believe meet our qualifications, and are willing to commit, the right to acquire multiple Franchises ("Development Rights"). Based on your own investigation and diligence, you have applied to acquire Development Rights and, to support your application, you and, if applicable, your owners have provided us with certain information about your and their backgrounds, experience, skills, financial condition and resources (collectively, the "Application Materials"). In reliance on the Application Materials, among other things, we are willing to grant you the Development Rights on the terms and conditions, and subject to the limitations, described in this Agreement. Cicis Restaurants that you or your Affiliates shall develop pursuant to this Agreement are referred to as the "Restaurants."

B. BUSINESS ENTITY.

If, instead of being a natural person, you are a business organization such as a corporation, limited liability company or partnership (a "Business Entity"), you agree, represent and warrant to us that: (1) you were validly formed and will maintain, throughout the Term (defined below), your existence and good standing in any state in which you are required, by law, to do so; (2) Attachment A to this Agreement describes all of your owners and their interests in you as of the Effective Date; (3) each of your owners that we designate from time to time (and, on our request, their spouse) will sign and deliver to us our then-standard form of Guaranty and Assumption of Obligations (the "Guaranty"), the current form of which is attached hereto as Attachment B; (4) you will conduct no activities other than those described in this Agreement or in any other written agreement between us and you; and (5) at our request, you will furnish us with true and correct copies of all documents regarding your formation, existence, standing, and governance.

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C. MINIMUM LIQUIDITY.

We have entered into this Agreement based, in part, on your representations to us about, and our assessment of, your levels of liquidity as of the Effective Date. You will ensure that, throughout the Term, you will maintain sufficient liquidity to meet your obligations under this Agreement. We reserve the right to establish, from time to time, specific reasonable liquidity thresholds, taking into consideration, your obligations under this Agreement, and you agree to comply with any such requirements that we impose.

2. THE DEVELOPMENT RIGHTS.

A. GRANT.

Subject to the terms and limitations contained herein, we grant you the Development Rights. You accept and agree to exercise the Development Rights in strict accordance with the terms and conditions contained in this Agreement. You acknowledge and agree that, as described further in this Agreement:

• 1. the Development Rights may only be exercised by the execution by us and you or your Affiliate that we approve of our then-current form of Franchise Agreement which, except as expressly provided in this Agreement, may be materially different than the form of Franchise Agreement we are using to grant Franchises on the Effective Date;
• 1. the Development Rights may only be exercised with respect to Restaurants to be located in the Development Area identified on Attachment A (the "Development Area");
• 1. you or your approved Affiliate will develop and open Restaurants, in each case pursuant to the applicable Franchise Agreement but as necessary to satisfy the minimum opening requirements of each of the time periods (each a "Development Period") that comprise the overall development schedule described in Attachment A hereto (the "Development Schedule"); and

Source: Item 23 — RECEIPTS (FDD pages 65–263)