Common use of Transfer by Developer Clause in Contracts

Transfer by Developer. 1. Area Developer understands and acknowledges that the rights and duties set forth in this Agreement are personal to Area Developer, and are granted in reliance on Area Developer’s business skill, financial capacity, and personal character. Accordingly, neither Area Developer nor any immediate or remote successor to any part of Area Developer’s interest in this Agreement nor any individual, partnership, corporation, or other legal entity, which directly or indirectly controls Area Developer shall sell, assign, transfer, convey or give away, any direct or indirect interest in Area Developer or in the development rights granted by this Agreement without the prior written consent of Franchisor. No partial assignments of this Agreement and/or the Development Area can be made by Area Developer. Any purported assignment or transfer, by operation of law or otherwise, not having the written consent of Franchisor shall be null and void and shall constitute a material breach of this Agreement, for which Franchisor may then terminate without opportunity to cure pursuant to Section VI.B. of this Agreement. The transfer restrictions described in this Section VII.B. shall apply to any sale, assignment, transfer, conveyance, or donation of any ownership interest in Area Developer (except for an Area Developer which is a corporation registered under the Securities and Exchange Act of 1934) by any holder of such interest to any party. 2. Franchisor shall not unreasonably withhold its consent to any such transfer; provided, however, that if a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in Area Developer or in the development rights granted herein, Franchisor may, in its sole discretion, require as a condition of its approval that: a. All of Area Developer’s accrued monetary obligations to Franchisor and all other outstanding obligations related to the terms and conditions under this Agreement shall have been satisfied; b. Area Developer is not in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between Area Developer and Franchisor, or its subsidiaries and affiliates; c. The transferor shall have executed a general release under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances; d. The transferee (and, if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Franchisor may request) shall enter into a written assignment, under seal and in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Area Developer’s obligations under this Agreement; e. The transferee (and, if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Franchisor may request) shall demonstrate to Franchisor’s satisfaction that transferee meets Franchisor’s educational, managerial, and business standards; possesses a good moral character, business reputation, and credit rating; has the minimum net worth and liquidity which meets Franchisor’s then current requirements to become an area developer of the number and type of restaurants described in this Agreement; has the aptitude and ability to conduct the business franchised herein (as may be evidenced by prior related business experience equivalent to not less than three (3) years experience in the operation of the number and type of restaurants to be developed under this Agreement, the franchise application, or otherwise); has adequate financial resources and capital to comply with the development schedule; and has no conflicting or competing business interest, and satisfies such other criteria and conditions that Franchisor shall reasonably impose; f. At Franchisor’s option, the transferee (and, if the transferee is other than an individual, such owners of a legal or beneficial interest in the transferee as Franchisor may request) shall execute (and/or, upon Franchisor’s request, shall cause all interested parties to execute), for a term ending on the expiration date of this Agreement, Franchisor’s standard form of Development Agreement, which agreement shall supersede this Agreement in all respects and the terms of which agreement may differ from the terms of this Agreement; g. Area Developer shall remain primarily liable for all obligations of the Area Developer’s business, and all covenants to be kept or performed by Area Developer, and shall execute any and all instruments reasonably requested by Franchisor to evidence such liability; h. Each restaurant has already opened and been approved for operation by Franchisor in compliance with all the conditions listed herein; i. Except in the case of a transfer to a corporation formed for the convenience of ownership, a transfer fee in an amount equal to five percent (5%) of the development fee shall be paid by Developer to Franchisor under this Agreement, or such greater amount as is necessary to reimburse Franchisor for its reasonable costs and expenses associated with reviewing the application to transfer, including, without limitation, legal and accounting fees. j. Area Developer agrees that if, in the opinion of Franchisor, the price to be paid for any transfer appears to be excessive or is likely to result in there being an unsatisfactory return on investment, or there being an insufficient cash flow to meet obligations, Franchisor may, without liability to Area Developer, review such opinions with any such prospective transferee/purchaser. k. The transferee must at the time of the proposed transfer have an Operating Partner that has been approved by Franchisor and meets Franchisor’s requirements for such position, which may include significant prior multi-unit restaurant operating experience, successful completion of Franchisor’s training program for managers and ownership by such Operating Partner of a significant equity interest in the transferee. 3. Franchisor shall not unreasonably withhold its consent to a proposed public offering of securities interests in Area Developer; provided, however, that Franchisor may, in its sole discretion, require as a condition of its approval that Franchisor or a company controlling Franchisor has previously made a public offering of Franchisor’s or such company’s securities. (For the purposes of this Section VII, a “public offering” shall mean any offering requiring registration under any state or federal securities laws, and any offering exempt from registration but requiring disclosure under any federal law or regulation.) 4. Area Developer shall grant no security interest in the franchised business or in any of its assets unless the secured party agrees that in the event of any default by Area Developer under any documents related to the security interest, Franchisor shall have the right and option to purchase the rights of the secured party upon payment of all sums then due to such secured party, except such amounts which may have become due as a result of any acceleration of the payment dates based upon the Area Developer’s default. 5. Area Developer acknowledges and agrees that each condition which must be met by the transferee franchisee is necessary to assure such transferee’s full performance of the obligations hereunder.

Transfer by Developer. 1. Area Developer understands and acknowledges that the rights and duties set forth in this Agreement are personal to Area Developer, and are granted in reliance on Area Developer’s 's business skill, financial capacity, and personal character. Accordingly, neither Area Developer nor any immediate or remote successor to any part of Area Developer’s 's interest in this Agreement nor any individual, partnership, corporation, or other legal entity, which directly or indirectly controls Area Developer shall sell, assign, transfer, convey or give away, any direct or indirect interest in Area Developer or in the development rights granted by this Agreement without the prior written consent of Franchisor. No partial assignments of this Agreement and/or the Development Area can be made by Area Developer. Any purported assignment or transfer, by operation of law or otherwise, not having the written consent of Franchisor shall be null and void and shall constitute a material breach of this Agreement, for which Franchisor may then terminate without opportunity to cure pursuant to Section VI.B. of this Agreement. The transfer restrictions described in this Section VII.B. shall apply to any sale, assignment, transfer, conveyance, or donation of any ownership interest in Area Developer (except for an Area Developer which is a corporation registered under the Securities and Exchange Act of 1934) by any holder of such interest to any party. 2. Franchisor shall not unreasonably withhold its consent to any such transfer; provided, however, that if a transfer, alone or together with other previous, simultaneous, or proposed transfers, would have the effect of transferring a controlling interest in Area Developer or in the development rights granted herein, Franchisor may, in its sole discretion, require as a condition of its approval that: a. All of Area Developer’s 's accrued monetary obligations to Franchisor and all other outstanding obligations related to the terms and conditions under this Agreement shall have been satisfied; b. Area Developer is not in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between Area Developer and Franchisor, or its subsidiaries and affiliates; c. The transferor shall have executed a general release under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor and its officers, directors, shareholders, and employees, in their corporate and individual capacities, including, without limitation, claims arising under federal, state, and local laws, rules, and ordinances; d. The transferee (and, if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Franchisor may request) shall enter into a written assignment, under seal and in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Area Developer’s obligations under this Agreement; e. The transferee (and, if the transferee is other than an individual, such owners of a beneficial interest in the transferee as Franchisor may request) shall demonstrate to Franchisor’s satisfaction that transferee meets Franchisor’s educational, managerial, and business standards; possesses a good moral character, business reputation, and credit rating; has the minimum net worth and liquidity which meets Franchisor’s then current requirements to become an area developer of the number and type of restaurants described in this Agreement; has the aptitude and ability to conduct the business franchised herein (as may be evidenced by prior related business experience equivalent to not less than three (3) years experience in the operation of the number and type of restaurants to be developed under this Agreement, the franchise application, or otherwise); has adequate financial resources and capital to comply with the development schedule; and has no conflicting or competing business interest, and satisfies such other criteria and conditions that Franchisor shall reasonably impose; f. At Franchisor’s option, the transferee (and, if the transferee is other than an individual, such owners of a legal or beneficial interest in the transferee as Franchisor may request) shall execute (and/or, upon Franchisor’s request, shall cause all interested parties to execute), for a term ending on the expiration date of this Agreement, Franchisor’s standard form of Development Agreement, which agreement shall supersede this Agreement in all respects and the terms of which agreement may differ from the terms of this Agreement; g. Area Developer shall remain primarily liable for all obligations of the Area Developer’s business, and all covenants to be kept or performed by Area Developer, and shall execute any and all instruments reasonably requested by Franchisor to evidence such liability; h. Each restaurant has already opened and been approved for operation by Franchisor in compliance with all the conditions listed herein; i. Except in the case of a transfer to a corporation formed for the convenience of ownership, a transfer fee in an amount equal to five percent (5%) of the development fee shall be paid by Developer to Franchisor under this Agreement, or such greater amount as is necessary to reimburse Franchisor for its reasonable costs and expenses associated with reviewing the application to transfer, including, without limitation, legal and accounting fees. j. Area Developer agrees that if, in the opinion of Franchisor, the price to be paid for any transfer appears to be excessive or is likely to result in there being an unsatisfactory return on investment, or there being an insufficient cash flow to meet obligations, Franchisor may, without liability to Area Developer, review such opinions with any such prospective transferee/purchaser. k. The transferee must at the time of the proposed transfer have an Operating Partner that has been approved by Franchisor and meets Franchisor’s requirements for such position, which may include significant prior multi-unit restaurant operating experience, successful completion of Franchisor’s training program for managers and ownership by such Operating Partner of a significant equity interest in the transferee. 3. Franchisor shall not unreasonably withhold its consent to a proposed public offering of securities interests in Area Developer; provided, however, that Franchisor may, in its sole discretion, require as a condition of its approval that Franchisor or a company controlling Franchisor has previously made a public offering of Franchisor’s or such company’s securities. (For the purposes of this Section VII, a “public offering” shall mean any offering requiring registration under any state or federal securities laws, and any offering exempt from registration but requiring disclosure under any federal law or regulation.) 4. Area Developer shall grant no security interest in the franchised business or in any of its assets unless the secured party agrees that in the event of any default by Area Developer under any documents related to the security interest, Franchisor shall have the right and option to purchase the rights of the secured party upon payment of all sums then due to such secured party, except such amounts which may have become due as a result of any acceleration of the payment dates based upon the Area Developer’s default. 5. Area Developer acknowledges and agrees that each condition which must be met by the transferee franchisee is necessary to assure such transferee’s full performance of the obligations hereunder.