CEC ENTERTAINMENT, INC. DEVELOPMENT AGREEMENT

Exhibit 10.37

CEC ENTERTAINMENT, INC.

DEVELOPMENT AGREEMENT

[CITY AND STATE]

4441 West Airport Freeway

Irving, TX 75062

CEC Entertainment, Inc.

Domestic Development Agreement

TABLE OF CONTENTS

CEC ENTERTAINMENT, INC.

DEVELOPMENT AGREEMENT

This Development Agreement is executed and entered into as of this        day of                      , 20      , by and between CEC ENTERTAINMENT, INC., a Kansas corporation (as Franchisor), and                              , a                              corporation (as Developer).

RECITALS

1. Franchisor has developed and is the owner of the System;

2. Franchisor has developed and is the owner of, or licensee with rights to sublicense, certain Animated Entertainment and Proprietary Marks which are utilized in connection with and identify the System; and

3. Developer desires to obtain from Franchisor and Franchisor desires to grant to Developer certain rights to use the System, the Animated Entertainment and the Proprietary Marks to develop and establish Franchised Restaurants in the Territory.

NOW THEREFORE, Franchisor and Developer in consideration of the undertakings and commitments set forth herein, agree as follows:

As used in this Agreement and the above Recitals, the following capitalized terms shall have the meanings attributed to them in this Section:

1.1 “Action” means any cause of action, suit, proceeding, claim, demand, investigation or inquiry (whether a formal proceeding or otherwise) with respect to which Developer’s indemnity applies.

1.2 “Agreement” means this Development Agreement and all attachments.

1.3 “Animated Entertainment” means the computer hardware and software, artistic designs, scripts and musical scores, staging and lighting techniques and configurations, plans, manuals and specifications, manufacturing know-how and other intellectual property relating to video display entertainment and to three dimensional computer controlled animated characters, including present and future improvements, patents, trademarks, copyrights and other intellectual and artistic property.

1.4 “Change in Control” means a Transfer of an Equity Interest in Developer which, directly, indirectly, or combined with prior Transfers, causes a change in the number of Persons which can vote more than fifty percent (50%) of the total Equity Interest in Developer.

1.5 “Competing Business” means a business which operates a restaurant or food service outlet in combination with family entertainment, including without limitation, live entertainment and entertainment in the form of video games, video displays or computer controlled animated characters.

1.6 “Confidential Information” means the terms of the Development Agreement and Franchise Agreement and any amendments thereto, the components of the System, the Animated Entertainment, manuals, written directives and all drawings, equipment, recipes, and all other information know-how, techniques, materials and data imparted or made available by Franchisor which is (i) designated as confidential, (ii) known by Developer to be considered confidential by Franchisor or (iii) by its nature inherently or reasonably considered confidential.

1.7 “Developer” means                              .

1.8 “Developer’s Principals” means Developer’s spouse, if Developer is an individual, all officers and directors of Developer and all holders of an ownership interest in Developer and of any entity directly or indirectly controlling Developer, all as listed on Schedule 1.8 attached hereto.

1.9 “Development Schedule” means the schedule pursuant to which the Developer will establish Franchised Restaurants as set forth in Section 4.

1.10 “Equity Interest” means a direct or indirect ownership interest in the capital stock of, partnership or membership interest in, or other equity or ownership interest in Developer (including the right to vote) any type of legal entity.

1.11 “Execution Date” means the date upon which the Agreement is deemed duly executed by Developer and Franchisor, as indicated on the first page of this Agreement.

1.12 “Franchise Agreement” means the then-current form of franchise agreement approved by Franchisor and to be executed with franchisees in accordance with this Agreement, the current form of which is attached as Attachment “A.”

1.13 “Franchised Restaurant” means a Restaurant opened pursuant to the Development Schedule and operated (i) at a Site approved by Franchisor pursuant to this Agreement and (ii) pursuant to a duly executed Franchise Agreement.

1.14 “Franchisee” means any person or legal entity approved by Franchisor to enter into a Franchise Agreement and to establish a Franchised Restaurant.

1.15 “Franchisor” means CEC Entertainment, Inc. or any person or legal entity to which CEC Entertainment, Inc. assigns or otherwise transfers its rights and obligations contained in this Agreement.

1.16 “Indemnitees” means Franchisor and is subsidiaries and affiliates, and directors, officers, employees, shareholders, affiliates, successors and assigns.

1.17 “Losses and Expenses” means all losses, compensatory, exemplary or punitive damages, fines, penalties, charges, costs, expenses, the lost profits, assessments and fees (including reasonable attorneys’, experts’, accountants’ and consultants’ fees); interest, court costs, settlement or judgment amounts, compensation for damages to Franchisor’s reputation and goodwill, costs of or resulting from delays, financing costs, costs of advertising material and media time/space, and costs of changing, substituting or replacing the same, and any and all expenses of recall, refunds, compensation, public notices and other similar amounts incurred, charged against or suffered by the Indemnitees in connection with any Action.

1.18 “Minority Interest” means a direct or indirect ownership interest of less than five percent (5%) of the capital stock of, partnership interest in, or other equity interest in (including the right to vote) any type of legal entity.

1.19 “Operational” used in reference to a Franchised Restaurant, means a Franchised Restaurant that is fully constructed and finished out as approved by Franchisor and is legally permitted to render its services to the general public pursuant to a duly executed Franchise Agreement.

1.20 “Person” means an individual, corporation, limited liability company, partnership, association, joint stock company, trust or trustee thereof, estate or executor thereof, unincorporated organization or joint venture, court or governmental unit or any agency or subdivision thereof, or any other legally recognizable entity.

1.21 “Proprietary Marks” means the trademarks, trade names, service marks, logos, emblems and other indicia of origin as designated from time to time by Franchisor, which may be owned by Franchisor or licensed to Franchisor with sublicensing rights, including, but not limited to, the marks: “Chuck E. Cheese” and “Chuck E. Cheese’s.”

1.22 “Restaurant” means a family-oriented pizza restaurant operated utilizing the System, the Proprietary Marks and the Animated Entertainment, either in accordance with the terms and conditions of a franchise agreement or by Franchisor.

1.23 “Site” means the location for the construction and operation of a Franchised Restaurant which has been approved as per Section 4 of this Agreement.

1.24 “Sky Tubes” means components configured to create sequences of group/social and independent play, using tubes, windows, entries, climbs, crawls, play stations, passageways, and slides.

1.25 “System” means the distinctive system developed and owned by Franchisor for the establishment, development, and operation of family-oriented pizza restaurants, the distinguishing

characteristics of which include without limitation, Animated Entertainment, separate areas with a variety of rides, amusement games and other attractions, characteristic decorations, furnishings and materials, specially-designed equipment and equipment layouts, trade secret food products and other special recipes, menus and food and beverage designations, food and beverage preparation and service procedures and techniques, operating procedures for sanitation and maintenance, methods and techniques for inventory and cost controls, record keeping and reporting, personnel training and management, and advertising and promotional programs, cornerstones of operation, and operational policies, all of which may be changed, improved or further developed by Franchisor from time to time.

1.26 “Territory” means                                                   in which the Developer shall develop the System in accordance with the terms and conditions of this Agreement.

1.27 “Transfer” means the sale, assignment, conveyance, pledge, mortgage or other encumbrance, whether direct or indirect, in whole or in part, or in one or a series of related transactions or occurrences, of (i) this Agreement, (ii) any Franchise Agreement between Franchisor and Developer, (iii) any Equity Interests in Developer, or (iv) in the assets of Developer, beyond transfer necessary in the ordinary course of business.

2.1 Grant. Subject to the terms, and conditions and limitations of this Agreement, Franchisor hereby grants to Developer the right, and Developer undertakes the obligation to establish and operate                      (          ) Franchised Restaurants at duly approved Sites in the Territory and pursuant to duly executed Franchise Agreements. Franchisor retains all other rights.

2.2 Exclusivity. For so long as Developer is in compliance with this Agreement, Franchisor will not, without Developer’s prior written consent, establish or operate, or license anyone other than Developer to establish or operate a Restaurant, which is physically located in the Territory prior to the last date specified in the Development Schedule.

2.3 Right of First Refusal. For a period of two (2) years after the successful and timely completion of the Development Schedule, if Franchisor proposes to establish any additional Restaurants which are physically located in the Territory, Developer shall have the right to enter into a new Development Agreement and/or Franchise Agreement to establish such additional Restaurants under the terms and conditions of the then-current form of Development and/or Franchise Agreements. If the Developer and Franchisor have not executed a new Development and/or Franchise Agreement within a period of thirty (30) days after Franchisor provides written notice to Developer of Franchisor’s desire to further develop the Territory, Franchisor will have the right, to the exclusion of Developer, to further develop or establish additional Restaurants in the Territory on its own or with others.

2.4 Limitation of Rights. Franchisor retains all rights not expressly granted hereunder. Franchisor, its affiliates, and their respective franchisees and licensees may, among other things, operate other types of facilities besides Restaurants in the Territory, including facilities that are identified by some or all of the Proprietary Marks. Franchisor therefore may (or may authorize a third party to) conduct, among other things, the following activities:

(a) Advertise and promote sales of or by Restaurants, at any location, including within the Territory;

(b) Offer and sell collateral and ancillary products and services, such as pre-packaged food products, toys, games, clothing, and memorabilia, in the Territory under the Proprietary Marks, even though those products and services may be similar to items offered by the Franchised Restaurants;

(c) Offer and sell any products and services (regardless of similarity to products and services sold in the Franchised Restaurants) under any names and marks other than the Proprietary Marks; at any location, including within the Territory;

(d) Establish and operate a Restaurant anywhere outside of the Territory, regardless of proximity or financial impact to the Franchised Restaurants;

(e) Establish and operate any business other than a Restaurant (including restaurants) anywhere inside or outside of the Territory, regardless of proximity or financial impact to the Franchised Restaurants; and

(f) Operate one or more sites on the World-Wide Web portion of the Internet that advertise Restaurants, allow customers and potential customers to make reservations at Restaurants (including the Franchised Restaurants), sell any product or service including pre-packaged food products, games, toys, clothing or memorabilia, or permit other activities (whether or not similar), even though the Web site is accessible to or viewable by persons in the Territory.

This Agreement is not a Franchise Agreement, and Developer shall have no right to use, or to license to others in any manner, the Proprietary Marks, the Animated Entertainment or the System by virtue hereof.

3.1 Development Fee. Upon the execution of this Agreement, Developer shall deliver a non-refundable development fee of                              and No/100 Dollars ($              ) in consideration for the administrative and other expenses incurred by Franchisor and for the development opportunities lost or deferred as a result of Franchisor’s entering into this Agreement with Developer. This development fee is Ten Thousand and No/100 Dollars ($10,000.00) for each restaurant to be developed. In addition, Developer will pay to Franchisor upon the execution of this

Agreement a non-refundable amount equal to Twelve Thousand Five Hundred and No/100 Dollars ($12,500.00) multiplied by the number of Franchised Restaurants (excluding the first Franchised Restaurant) to be opened and operated pursuant to the Development Schedule in Section 4. This Twelve Thousand Five Hundred and No/100 Dollars ($12,500.00) will be credited toward each franchise fee (excluding the franchise fee for the first Franchise Agreement) to be paid to Franchisor pursuant the terms of this Development Agreement and the Franchise Agreements.

3.2 Franchise Fees. Upon the execution of this Agreement, Developer shall deliver a non-refundable franchise fee of Fifty Thousand and No/100 Dollars ($50,000.00) for the first Franchise Agreement to be executed pursuant to the Development Schedule. Such non-refundable fee, which shall be deemed earned by Franchisor when received, is in consideration for administrative and other expenses incurred by Franchisor and for the development opportunities lost or deferred as a result of Franchisor’s entering into this Agreement with Developer. The Developer will deliver all future franchise fees upon the execution of and in accordance with the terms (including franchise fee amounts) and conditions of the respective Franchise Agreement.

3.3 Payment and Taxes. All payments made by Developer to Franchisor pursuant to this Agreement will be in United States dollars and will be made free and clear of any tax, deduction, offset or withholding of any kind. All taxes and penalties on any payment made by Developer pursuant to this Agreement now or in the future will be fully borne by Developer. In the event of any bona fide dispute as to liability for taxes assessed or other indebtedness, Developer may contest the validity or the amount of the tax or indebtedness in accordance with procedures of the taxing authority or applicable law; however, in no event shall Developer permit a tax sale or seizure by levy of execution or similar writ or warrant, or attachment by a creditor, to occur against the premises of any Franchised Restaurant, or any improvements thereon.

4.1 Development Schedule. The Developer agrees to execute separate Franchise Agreements and establish Franchised Restaurants at Sites in the Territory in accordance with the following Development Schedule:

4.2 Ownership Interest. Franchisor and Developer agree that the Developer shall enter into a Franchise Agreement and establish and operate the Franchised Restaurants either directly or by using subsidiaries in which it has a majority Equity Interest.

4.3 Site Location and Approval. Developer agrees that prior to or within one hundred and twenty (120) days after the execution of a Franchise Agreement, it will locate or cause the franchisee under the Franchise Agreement in question to locate a Site within the Territory for the establishment and operation of the respective Franchised Restaurant. Within the same one hundred and twenty (120) day period, Developer also agrees that it will cause the franchisee under the respective Franchise Agreement to obtain the approval for such Site from the Franchisor as per the terms and conditions of the respective Franchise Agreement.

4.4 Operational Date. Developer agrees that, within a period of three hundred and seventy-two (372) days (for the conversion of existing premises) or four hundred and sixty-two (462) days (for the erection of a free-standing building) after the execution of a Franchise Agreement, it will cause the respective Franchised Restaurant to be fully Operational.

4.5 Extensions. Developer shall at all times comply with the Development Schedule. However, Franchisor, at its sole discretion and without obligation, may grant a written extension or extensions to Developer for the period of time that the Developer requests. In the event Franchisor grants an extension, Developer agrees to pay Franchisor a non-refundable extension fee of Two Thousand Five Hundred and No/100 Dollars ($2,500.00) for every thirty (30) day period of the extension.

5.1 Representations, Warranties and Covenants of Developer. If Developer is not an individual, then Developer and each of Developer’s Principals represent, warrant and covenant to Franchisor that:

5.1.1 Due Incorporation. If Developer is a corporation, limited liability company, limited or general partnership, or other form of business entity, it is duly formed and organized, validly existing and in good standing under the laws of the jurisdiction of its organization with all requisite power and authority to enter into this Agreement and perform the obligations contained herein.

5.1.2 Authorization. The execution, delivery and performance by Developer of this Agreement and all other agreements contemplated herein has been duly authorized by all requisite actions on the part of Developer and no further actions are necessary to make this Agreement or such other agreements valid and binding upon it and enforceable against it in accordance with their respective terms.

5.1.3 Exclusivity. Developer’s corporate charter, written partnership or limited liability company agreement, membership agreement or other governing documents will at all times provide that Developer’s activities are confined exclusively to the development of the Franchised Restaurants unless otherwise consented to in writing by Franchisor.

5.1.4 Execution and Performance. Neither the execution, delivery nor performance by Developer of this Agreement or any other agreements contemplated hereby will conflict with, or result in a breach of any term or provision of Developer’s charter, by-laws, articles of organization, or partnership agreement and/or other governing documents and any amendments thereto, any indenture, mortgage, deed of trust or other material contract or agreement to which Developer is a party or by which it or any of its assets are bound, or breach any order, writ, injunction or decree of any court, administrative agency or governmental body.

5.1.5 Corporate Documents. Certified copies of Developer’s charter, by-laws, articles of organization, partnership agreement, membership agreement and/or other governing documents and any amendments thereto, including board of director’s or partner’s resolutions authorizing this Agreement have been delivered to Franchisor. Any amendments or changes to such governing or charter documents subsequent to the date of this Agreement, shall not be undertaken without Franchisor’s prior written consent.

5.1.6 Ownership Interests. All Equity Interests in Developer are accurately and completely described in Schedule 1.8. Developer will maintain at all times a current list of all owners of record and all beneficial owners of Equity Interests in Developer. Developer will make such list available to Franchisor upon request.

5.1.7 Stop Transfer Instructions. If Developer is a corporation, Developer will maintain stop-transfer instructions against the transfer on Developer’s records of any of its equity securities and each stock certificate will have conspicuously endorsed upon it a statement in a form satisfactory to Franchisor’s that it is held subject to all restrictions imposed upon assignments by this Agreement; but the requirements of this Section will not apply to the transfer of equity securities of a publicly-held corporation. If Developer is a partnership or limited liability company, its written partnership or limited liability company agreement will provide that ownership of an interest in the partnership or limited liability company is held subject to all restrictions imposed upon assignments by this Agreement.

If Developer is an individual, then Developer represents, warrants and covenants that neither the execution, delivery nor performance by Developer of this Agreement or any other agreements contemplated hereby conflicts with, or results in a breach of any contract or agreement to which Developer is a party or a breach of any order, writ, injunction or decree of any court, administrative agency or governmental body.

5.2 Financial Statements. Developer and, at Franchisor’s request, each of Developer’s Principals have provided Franchisor with your and their most recent financial statements in the form and for the time periods specified by Franchisor. The financial statements (i) present fairly Developer’s financial position and the financial position of each of Developer’s Principals, as applicable, at the dates indicated therein and, with respect to Developer, the results of its operations and cash flow for

the periods then ended; (ii) are certified as true and correct by the Developer’s Chief Financial Officer or President, as applicable; and (iii) have been prepared in conformity with generally accepted accounting principles in the United States, applied on a consistent basis. No material liabilities, adverse claims, commitments or obligations of any nature, whether accrued, unliquidated, absolute, contingent or otherwise, exist as of the date of this Agreement which are not reflected as liabilities on Developer’s financial statements or those of Developer’s Principals.

5.3 Developer’s Principals. Developer will notify Franchisor within ten (10) days following the date that any person previously identified as Developer’s Principal ceases to qualify as such or that any new person succeeds to or otherwise comes to occupy a position which would qualify such person as one of Developer’s Principals. That person will immediately execute all documents and instruments (including, as applicable, this Agreement) required by Franchisor to be executed by others in a comparable position; but if there is any conflict between this provision and the transfer provisions of Section 7, the provisions of Section 7 will control.

5.4. Guaranty. As an inducement and as a condition to Franchisor’s execution and acceptance of this Agreement, Developer’s Principals will, jointly and severally, guarantee the performance of Developer’s obligations, covenants and agreements under this Agreement pursuant to the terms and conditions of the Agreement and Guaranty of Developer’s Principals in the form of Attachment B to this Agreement, and will otherwise bind themselves to the terms of this Agreement as stated herein.

5.5 Non-Competition during Term of Agreement. In consideration of, among other things, the disclosure to Developer of the System and the Confidential Information, during the term of this Agreement, Developer and Developer’s Principals shall not, directly or indirectly:

(a) Divert or attempt to divert business of any Restaurant to any competitor, or do or perform any other act injurious or prejudicial to the goodwill associated with Franchisor’s Proprietary Marks, the Animated Entertainment and the System;

(b) Employ or seek to employ any person who is employed by Franchisor or by any other franchisee or developer of Franchisor or entice such person to leave such employment; and

(c) Except as provided for herein, own, maintain, engage in, or have an Equity Interest in a Competing Business; provided that this provision shall not apply to any Minority Interest collectively held by Developer or Developer’s Principals in any publicly-held corporation listed on a national stock exchange.

5.6 Non-Competition after Termination or Non-Renewal of Agreement. In consideration of, among other things, the disclosure to Developer of the System and the Confidential Information, for a period of three (3) years after the expiration or approved Transfer by Developer and/or Developer’s Principals, Developer and Developer’s Principals (as applicable) shall not, directly or indirectly:

(a) Divert or attempt to divert business of any Restaurant to any competitor, or do or perform any other act injurious or prejudicial to the goodwill associated with Franchisor’s Proprietary Marks, the Animated Entertainment and the System;

(b) Employ or seek to employ any person who is employed by Franchisor or by any other franchisee or developer of Franchisor, or entice such person to leave such employment; and

(c) Except as provided for herein, own, maintain, engage in, or have an Equity Interest in a Competing Business which is located within the Territory or within twenty five (25) miles from the outer boundaries of the Territory; provided that this provision shall not apply to any Minority Interest collectively held by Developer or Developer’s Principals in any publicly-held corporation.

5.7 Independent Covenants. Each of the covenants in Sections 5.5 and 5.6 will be construed as independent of any other covenant or provision of this Agreement.

(i) Developer and Developer’s Principals understand and acknowledge that Franchisor will have the right, in its sole discretion, to reduce the scope of any covenant set forth in Sections 5.5 and 5.6, or any portion thereof, without their consent, effective immediately upon notice to Developer; and Developer and Developer’s Principals agree that they will comply with any covenant as so modified, which will be fully enforceable notwithstanding the provisions of Section 12.2 hereof.

(ii) Developer and Developer’s Principals expressly agree that the existence of any claims they may have against Franchisor, whether or not arising from this Agreement, will not constitute a defense to the enforcement by Franchisor of the covenants in Sections 5.5 and 5.6.

(iii) Developer and each Developer’s Principal acknowledges that the covenants not to compete contained in Sections 5.5 and 5.6 are reasonable and necessary to protect the business and goodwill of the System and to avoid misappropriation or other unauthorized use of the System and Franchisor’s other trade secrets.

(iv) Developer and each Developer’s Principal acknowledges and confirms that Developer and the Developer’s Principals possess the education, training and experience necessary to earn a reasonable livelihood apart from operating a Competing Business.

5.8 Additional Covenants. Developer shall require and obtain for the benefit of Franchisor execution of covenants similar to those set forth in this Section from any and all of its employees having access to materials or information furnished or disclosed to Developer by Franchisor, including, which limitation, all managers, assistant managers and director of operations.

6.1 Confidential Information. Except as expressly provided herein, Developer shall have no right, title or interest in the Confidential Information. The Developer and the Developer’s Principals shall only communicate, disclose or use the Confidential Information as expressly permitted herein or as required by law. Developer and Developer’s Principals shall disclose the Confidential Information only to such of Developer’s employees, agents, or independent contractors who must have access to it in connection with their employment. The covenant in this Section will survive the expiration, termination, or transfer of this Agreement or any interest in this Agreement and will be perpetually binding upon Developer and each of Developer’s Principals.

6.1.1 Confidentiality Agreements. Developer shall cause all employees having access to the Confidential Information to execute confidentiality agreements substantially in the form of Attachment C stating that they will preserve in confidence all Confidential Information. Neither Developer, Developer’s Principal’s or their respective employees may at any time, without Franchisor’s prior written consent, copy, duplicate, record or otherwise reproduce the Confidential Information, in whole or in part, nor otherwise make the same available to any unauthorized person.

6.1.2 Improvements. If Developer makes any improvements (as determined by Franchisor) to the Confidential Information or the System, Developer and the Developer’s Principals shall each execute an amendment to this Agreement reflecting such improvements and Franchisor’s exclusive ownership thereof. All such improvements, which are hereby assigned to Franchisor, shall be considered Confidential Information.

6.2 Proprietary Marks. Developer acknowledges Franchisor’s exclusive ownership of or right to sublicense the Proprietary Marks and shall neither directly or indirectly infringe, contest or otherwise impair Franchisor’s exclusive ownership of, and/or license with respect to, the Proprietary Marks either during or after termination or expiration of this Agreement.

7.1 Transfer by Franchisor. Franchisor shall have the right to transfer or assign this Agreement, its rights to the Proprietary Marks, and all or any part of its rights or obligations herein to any person or legal entity without the consent of Developer or Developer’s Principals. Upon such transfer by Franchisor, any transferee or assignee of Franchisor shall become solely responsible for all obligations of Franchisor under this Agreement from the date of transfer or assignment. Without limiting the foregoing, Developer acknowledges that Franchisor may sell its assets (including its rights in the Proprietary Marks and the System) to a third party; may offer its securities privately or publicly; may merge, acquire other legal entities or be acquired by another legal entity; and may undertake a refinancing, recapitalization, leveraged buy out or other economic or financial restructuring. With regard to any or all of the above sales, assignments and dispositions, Developer expressly and specifically waives any claims, demands, or damages against Franchisor or its affiliates arising from or related to Franchisor’s transfer of its rights in this Agreement, the Proprietary Marks or the System to any other party. Nothing contained in this Agreement will require Franchisor to remain in the business of operating or licensing the operation of the Restaurants or other businesses or to offer any services or products to Developer, whether or not bearing or not bearing the Proprietary Marks, if Franchisor transfers or assigns its rights in or obligations under this Agreement.

7.2. Transfer by Developer. Developer and Developer’s Principals understand and acknowledge that the rights and duties set forth in this Development Agreement are personal to Developer and are granted, in part, in reliance upon the skill, aptitude, business and financial capacity of Developer and Developer’s Principals and their intention of complying with its terms and conditions. Therefore, if the Developer and/or Developer’s Principals desire to Transfer any interest to any individual or entity (including a trust), they must first obtain the prior written approval of Franchisor. Any such attempted Transfer not approved by Franchisor shall be null and void from its purported inception.

Prior to authorizing such Transfer, Franchisor may require, among other things, satisfaction of any or all of the following:

(a) Developer shall be in full compliance with all of the terms and conditions of this Agreement;

(b) Developer and/or any Developer’s Principal shall remain liable for the performance of its obligations contained in this Agreement through the date of Transfer and shall execute all instruments reasonably requested by Developer to evidence such liability;

(c) The transferee shall satisfy, in Franchisor’s judgment, Franchisor’s then existing criteria for a developer including, without limitation: (i) education; (ii) business skill, experience and aptitude; (iii) character and reputation; and (iv) financial resources;

(d) The transferee and all owners of any record or beneficial interest in the capital stock (or other interest) of transferee shall execute all instruments (including a new development agreement and guaranty) reasonably requested by Franchisor to evidence acceptance and assumption of all of the terms and conditions of this Agreement. Such new development agreement may contain terms materially different from this Agreement; and

(e) Developer pays a transfer fee equal to (i) one half (  ¹ / 2 ) of the development fee contained herein, if the Developer does not have a majority Equity Interest (as reasonably determined by Franchisor) in the transferee or (ii) an amount equal to the reasonable costs incurred by Franchisor in connection with the Transfer among Developers principals, but in no event less than One Thousand and No/100 Dollars ($1,000.00). Developer and Developer’s Principals (if applicable) must have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor, its affiliates, and the officers, directors, members, shareholders, partners, agents, representatives, independent contractors, servants and employees of each of them, in their corporate and individual capacities, including, without limitation, claims arising under this Agreement and any other agreement between Developer or any of Developer’s affiliates and Franchisor’s or any of its affiliates or under federal, state or local laws, rules, regulations or orders. Franchisor’s current form of general release is attached hereto as Attachment D.

7.3. Right of First Refusal. In the event that Developer and/or any of Developer’s Principals or any holder of an Equity Interest in Developer desire to effectuate a Transfer, Franchisor shall have the right and option, exercisable within thirty (30) days after Franchisor’s receipt of all materials and information described Section 7.3(a), (b), (c) and (e) to purchase the interest proposed to be transferred in accordance with the following:

(a) Developer or the proposed transferee shall notify Franchisor in writing of any bona fide proposed Transfer and set forth a complete description of all terms and fees of the proposed Transfer in the manner prescribed by the Franchisor, including the prospective transferee’s name, address, financial qualifications and previous five years business experience;

(b) Developer shall provide Franchisor with any additional information, agreements, certifications or documents Franchisor requests for use in its evaluation of whether to exercise its first refusal right.

(c) Upon receipt of the Franchisor’s request, Developer or the proposed transferee shall promptly provide Franchisor with access to any real or personal property, documents or records relevant to the transaction and to the interest which is the subject of the Transfer. Once Franchisor has received all materials submitted by Developer or the proposed transferee and has reviewed all property, records and documents it has requested, Franchisor shall notify Developer or the proposed transferee of its decision to exercise its option to acquire the interest being transferred, and the conditions, if any, under which it will approve the proposed Transfer.

(d) If the Franchisor exercises its first refusal right, the transferor shall transfer the interest to Franchisor or to its assignee pursuant to an agreement to purchase which contains the material terms to which the transferor and the proposed transferee had agreed. If the offer or proposed purchase contract omitted any terms customarily addressed in a transfer of an interest of the type which is the subject of the transaction, Franchisor may supply those terms in the purchase agreement and related documents.

(e) If the proposed transferor wishes to make a Transfer, the transferor shall provide Franchisor with a copy of any offer or agreement to purchase, signed by the proposed transferee, together with copies of any documents referenced in the offer or agreement. If all material terms of the proposed sale are not described in the offer or agreement, Developer shall provide details of all such terms in its submission to the Franchisor, accompanied by the proposed transferee’s written agreement to the terms.

(f) In the event the consideration, terms, and/or conditions offered by the third party are such that Franchisor or its nominee may not reasonably be able to furnish the same consideration, terms, and/or conditions, then Franchisor or its nominee, as appropriate, may purchase the interest proposed to be transferred for the reasonable equivalent in