What are the requirements for converting a Conversion Site to a Costa Vida Fresh Mexican Grill restaurant?

• (i) If during the Term, we acquire the shares or assets (which may include furniture, fixtures, equipment, leasehold improvements and/or leasehold interests) of any business operating retail outlets at one or more sites located within the Development Area which meets our specifications and standards for conversion to Costa Vida Restaurants (in each case a "Conversion Site"), and we determine in our sole discretion to convert any Conversion Sites within your Development Area to Costa Vida Restaurants, we will offer to sell such Conversion Sites to you for the price paid by us for such Conversion Sites if:

• (A) The sale will not, in our judgment, conflict with any existing legal obligation of us or the business being acquired;

• (B) The sale will not, in our judgment, preclude the completion of the acquisition on the terms agreed to by us and the seller;

• (C) The sale will not, in our judgment, interfere with any other legal agreement, arrangement or combination or affect federal or state income tax consequences arising from the acquisition in a manner adverse to any of the parties to the acquisition;

• (D) You agree, at our option, to include in your purchase (at a price determined on the same basis as for Conversion Sites) certain acquired stores which fall within the Development Area but which do not meet our criteria for conversion to Costa Vida Restaurants and which may have to be closed or sold to a third party subsequent to your acquisition; and

• (E) You agree to (i) execute, concurrently with your purchase, the appropriate Franchise Documents and pay the fees, including the initial franchise fee, that we are then charging for new Costa Vida Restaurants franchises, for each Conversion Site in the Development Area, (ii) convert each Conversion Site to a Costa Vida Restaurant as soon as practicable thereafter (but in no event later than the date reasonably specified by us) in accordance with our standards and specifications, and (iii) close or sell, within the reasonable time period specified by us, any acquired sites which are not suitable for conversion.

• (ii) The price to be paid by you for the Conversion Sites will include that portion of the direct and indirect costs and liabilities that would be incurred or assumed by us in making the acquisition and allocated to the Conversion Sites whether paid or owed to the seller of the Conversion Sites, an Affiliate or third parties and other expenses allocated or otherwise related to the Conversion Sites (including losses, whether from continuing operations or closing acquired units) plus interest at our cost of money on the balance of such amounts from time to time.

• (iii) You will have 30 days after receipt of our offer in which to accept or reject the offer by written notice to us.

If accepted, you will have 30 days from the date of acceptance within which to complete the acquisition.

• (iv) If you reject or fail to timely accept our offer to sell you the Conversion Sites within the Development Area or we are unable to extend such offer to you for any of the reasons stated above, you agree that we can acquire the Conversion Sites and operate (or franchise others to operate) those sites as Costa Vida Restaurants or other Costa Vida outlets.

• (v) Any Conversion Sites for which you execute the Franchise Documents and develop and open a Costa Vida Restaurant will count towards your Development Schedule

Source: Item 23 — RECEIPTS (FDD pages 67–282)