y, mutually agree as follows:

1. RECITATIONS.

The Recitations set out above form part of this Agreement.

2. GRANT OF FRANCHISE. Franchisor hereby grants to Franchisee and Franchisee accepts, upon the terms and conditions contained in this Agreement, the license to operate a Cilantro Taco Grill franchise (the "Franchise" or "the Franchised Business"), using only the Marks licensed hereunder, in strict conformity with the System, which may be changed, improved and further developed by Franchisor from

time to time. This grant applies only to a single location within a territory that is designated in Attachment 2 attached hereto and incorporated herein (the "Territory"). Franchisee and the Principals have represented to Franchisor that they have entered into this Agreement with the intention of complying fully with the obligations to construct a Cilantro Taco Grill restaurant hereunder and not for the purpose of reselling the rights to develop the restaurant hereunder. Franchisee and the Principals understand and acknowledge that Franchisor has granted such rights in reliance on the business skill, financial capacity, personal character of, and expectations of performance hereunder, by Franchisee and the Principals and that this Agreement and the rights and obligations hereunder may not be transferred until after the Cilantro Taco Grill restaurant is open for business to the public in accordance with Section 8.3, and then only in accordance with Article 16 hereof. If the parties mutually agree to certain negotiated changes during Initial Term or Renewal Term, then Franchisee acknowledges and agrees to sign an addendum in the form attached hereto as Attachment 9 or any form we may require in the future, and that the revisions contained in this form are added terms to this Agreement and no other changes shall be made to the form of addendum itself.

3. TERRITORY.

• 3.1 Territory. This Agreement grants Franchisee the right to operate the Franchised Business at a single location and from within a Territory. Upon the determination of an Accepted Location, you will be assigned a Territory. Subject to Section 3.2 below, Franchisor agrees that during the term of this Agreement, Franchisor will not operate, and will not authorize any other franchisees to operate, a Cilantro Taco Grill outlet in the Territory using the same Marks as licensed to Franchisee in this Agreement so long as Franchisee is not in default under this Agreement or this Agreement has not been terminated. Except as otherwise specified in this Agreement, Franchisor reserves the right to open, operate or franchise Cilantro Taco Grill franchises bordering and adjacent to the Territory.

Source: Item 23 — RECEIPT (FDD pages 52–208)