Common use of Transfer by Developer Clause in Contracts

Transfer by Developer. (1) Developer understands and acknowledges that the rights and duties set forth in this Agreement are personal to Developer, and that Franchisor has granted such rights in reliance on the business skill, financial capacity, and personal character of Developer and any guarantor of Developer. Accordingly, neither Developer nor any initial or subsequent successor or assign to any part of Developer's interest in this Agreement, nor any individual, partnership, corporation, or other entity which directly or indirectly has or owns any interest in this Agreement or in Developer shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise encumber any direct or indirect interest in this Agreement or in any entity which owns this Agreement without the prior written consent of Franchisor; provided, however, that Franchisor's prior written consent shall not be required for a transfer of less than a one per cent (1%) interest in a publicly-held corporation, and further, Franchisor's prior written consent for a Minority Interest Transfer (as hereinafter defined) shall be exclusively based upon the requirements enumerated in Section VIII.B.(3) hereof. A publicly-held corporation is a corporation having its securities registered pursuant to Section 12 under the Securities Exchange Act of 1934, as amended, or a corporation subject to the reporting requirements of Section 15(d) under the Securities Exchange Act of 1934, as amended. Any purported assignment or transfer, by operation of law or otherwise, not having the written consent of Franchisor required by this Section VIII.B.(1) shall be null and void and shall constitute a material breach of this Agreement. (2) Franchisor shall not unreasonably withhold its consent to a transfer of any interest in Developer or in this Agreement. Franchisor may, in its sole discretion, require any or all of the following as conditions of its approval: (a) All of Developer's accrued monetary obligations and all other outstanding obligations to Franchisor, its subsidiaries, and its affiliates shall have been satisfied; (b) Developer is not in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between Developer and Franchisor, or its subsidiaries and affiliates; (c) The transferor shall have executed a general release, 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 this Agreement and federal, state, and local laws, rules, and ordinances; (d) If the transferee is the Operating Principal or the Operating Designee, then the requirements of Section VI.B. (3) shall be satisfied by such transferee; (e) If the transferee is a Developer's Principal, then the requirements of Section VI.B. (2) (h) shall be satisfied by such transferee; (f) The transferee shall enter into a written agreement, in a form satisfactory to Franchisor, assuming full, unconditional, joint and several liability for and agreeing to perform from the date of the transfer, all obligations, covenants and agreements contained in this Agreement which the transferor was obligated to perform. If, however, the transferee is to become an Operating Principal, Operating Designee, or Developer's Principal, such transferee shall be required to enter into a written agreement, in a form reasonably satisfactory to Franchisor, assuming full, unconditional, joint and several liability for and agreeing to perform from the date of the transfer, all obligations, covenants, and agreements contained in this Agreement; (g) The transferee shall demonstrate to Franchisor's satisfaction that transferee meets the criteria considered by Franchisor when reviewing a prospective developer's application for development rights, including but not limited to Franchisor's educational, managerial and business standards; transferee's good moral character, business reputation and credit rating; transferee's aptitude and ability to conduct the business contemplated hereunder (as may be evidenced by prior related business experience or otherwise); that transferee has adequate financial resources and capital to meet the development schedule set forth in Section III.B. hereof; and the geographic proximity of other Chili's Grill & Bar restaurants owned or operated by transferee and the territories or areas with respect to which transferee is obligated to develop Chili's Grill & Bar restaurants pursuant to any development agreement between Franchisor and Franchisee, in relation to development of the Restaurants. (h) The transferee shall execute (and/or, upon Franchisor's request, shall cause all interested parties to execute), the standard form development agreement then being offered to new System developers or form of this Agreement, as Franchisor determines, and such other ancillary agreements as Franchisor may require, which agreements shall supersede this Agreement and its ancillary documents in all respects and the terms of which agreements may differ from the terms of this Agreement; (i) At the transferee's expense, the transferee, the transferee's manager, the transferee's Operating Principal, and the transferee's Operating Designee, if applicable, shall complete any training programs then in effect for System developers upon such terms and conditions as Franchisor may reasonably require; (j) Developer shall pay a transfer fee in an amount sufficient to reimburse Franchisor for its reasonable costs and expenses associated with reviewing the application to transfer, including, without limitation, legal and accounting fees; and (k) If transferee is a corporation or a partnership, transferee shall make and will be bound by any or all of the representations, warranties and covenants set forth at Section VI.B.(2) as Franchisor requests. Transferee shall provide to Franchisor evidence satisfactory to Franchisor that the terms of Section VI.B.(2) have been satisfied and are true and correct on the date of transfer. (3) Franchisor will apply the transfer requirements set forth in Section VIII.B.

Transfer by Developer. Developer understands, acknowledges and agrees (1and hereby represents and warrants to Franchisor that its Owners understand and agree) Developer understands and acknowledges that the rights and duties set forth in created by this Agreement are personal to Developer and its Owners and that a material cause for Franchisor's willingness to enter into this Agreement is its reliance upon the individual or collective character, skill, aptitude, business ability and financial capacity of Developer, its Owners and Persons that Franchisor has granted such directly or indirectly have a Controlling Interest in Developer. Therefore, Developer agrees that: (1) no Ownership Interest in Developer or in any Person that directly or indirectly holds a Controlling Interest in Developer; (2) no obligations, rights in reliance on the business skill, financial capacity, and personal character or interest of Developer and in (a) this Agreement, (b) any guarantor Ownership Interest in any Controlled Affiliate, or (c) all or substantially all of the assets of Developer. Accordingly, neither Developer nor any initial ; and (3) no right to receive all or subsequent successor or assign to any part a portion of Developer's interest in this Agreement, nor or any individual, partnership, corporation, Developer Outlet's profits or other entity which directly losses or indirectly has any capital appreciation relating to Developer or owns any interest in this Agreement or in Developer shall sell, assign, transfer, convey, give away, pledge, mortgage, or otherwise encumber any direct or indirect interest in this Agreement or in any entity which owns this Agreement Outlet may be transferred without the prior written consent of Franchisor; provided, however, that . A transfer of this Agreement may be made (subject to Franchisor's prior written consent shall not be required for rights below) only with a transfer of less than a one per cent (1%) interest all of Developer's rights and obligations under all Franchise Agreements signed by Developer and all Ownership Interests in a publicly-all Controlled Affiliates held corporation, and further, Franchisor's prior written consent for a Minority Interest Transfer (as hereinafter defined) shall be exclusively based upon the requirements enumerated in Section VIII.B.(3) hereof. A publicly-held corporation is a corporation having its securities registered pursuant to Section 12 under the Securities Exchange Act by Developer or any Owner of 1934, as amended, or a corporation subject to the reporting requirements of Section 15(d) under the Securities Exchange Act of 1934, as amendedDeveloper. Any purported assignment or transfer, by operation transfer in violation of law or otherwise, not having the written consent of Franchisor required by this Section VIII.B.(1) shall be null and void and shall constitute a material breach of this Agreement and shall convey to the transferee no rights or interests in the foregoing. As used in this Agreement. , the term "transfer" shall include the following, whether voluntary or involuntary, conditional, direct or indirect: (1) assignment, sale, gift or pledge; (2) Franchisor shall not unreasonably withhold its consent the grant of a mortgage, charge, lien or security interest, including the grant of a collateral assignment; (3) a merger, consolidation, exchange of shares or other Ownership Interests, issuance of additional Ownership Interests or securities representing or potentially representing Ownership Interests, or redemption of Ownership Interests; (4) a sale or exchange of voting interests or securities convertible to a transfer voting interests, or an agreement granting the right to exercise or control the exercise of the voting rights of any interest in holder of Ownership Interests or to control the operations or affairs of Developer; and (5) except where specifically approved by Franchisor, a management agreement whereby Developer delegates (i) any of its obligations under this Agreement or in this Agreement. Franchisor may, in its sole discretion, require (ii) any or all of the following management functions with respect to the business to be conducted by Developer pursuant to this Agreement. In addition to the foregoing, a transfer (as conditions defined above) will include any transfer by virtue of its approval: (a) All of Developer's accrued monetary obligations and all other outstanding obligations to Franchisor, its subsidiaries, and its affiliates shall have been satisfied; divorce; (b) Developer is not in default of any provision of this Agreement, any amendment hereof or successor hereto, or any other agreement between Developer and Franchisor, or its subsidiaries and affiliates; insolvency; (c) The transferor shall have executed dissolution of a general releasecorporation, in a form satisfactory to Franchisorlimited liability company, 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 this Agreement and federal, state, and local laws, rules, and ordinances; partnership or other business entity; (d) If the transferee is the Operating Principal or the Operating Designee, then the requirements of Section VI.B. (3) shall be satisfied by such transferee; will; (e) If the transferee is a Developer's Principal, then the requirements of Section VI.B. (2) (h) shall be satisfied by such transferee; intestate succession; (f) The transferee shall enter into a written agreement, declaration of or transfer in a form satisfactory to Franchisor, assuming full, unconditional, joint and several liability for and agreeing to perform from the date of the transfer, all obligations, covenants and agreements contained in this Agreement which the transferor was obligated to perform. If, however, the transferee is to become an Operating Principal, Operating Designee, trust; or Developer's Principal, such transferee shall be required to enter into a written agreement, in a form reasonably satisfactory to Franchisor, assuming full, unconditional, joint and several liability for and agreeing to perform from the date of the transfer, all obligations, covenants, and agreements contained in this Agreement; (g) The transferee shall demonstrate to Franchisor's satisfaction that transferee meets the criteria considered foreclosure, attachment, seizure or otherwise by Franchisor when reviewing a prospective developer's application for development rights, including but not limited to Franchisor's educational, managerial and business standards; transferee's good moral character, business reputation and credit rating; transferee's aptitude and ability to conduct the business contemplated hereunder (as may be evidenced by prior related business experience or otherwise); that transferee has adequate financial resources and capital to meet the development schedule set forth in Section III.B. hereof; and the geographic proximity operation of other Chili's Grill & Bar restaurants owned or operated by transferee and the territories or areas with respect to which transferee is obligated to develop Chili's Grill & Bar restaurants pursuant to any development agreement between Franchisor and Franchisee, in relation to development of the Restaurantslaw. (h) The transferee shall execute (and/or, upon Franchisor's request, shall cause all interested parties to execute), the standard form development agreement then being offered to new System developers or form of this Agreement, as Franchisor determines, and such other ancillary agreements as Franchisor may require, which agreements shall supersede this Agreement and its ancillary documents in all respects and the terms of which agreements may differ from the terms of this Agreement; (i) At the transferee's expense, the transferee, the transferee's manager, the transferee's Operating Principal, and the transferee's Operating Designee, if applicable, shall complete any training programs then in effect for System developers upon such terms and conditions as Franchisor may reasonably require; (j) Developer shall pay a transfer fee in an amount sufficient to reimburse Franchisor for its reasonable costs and expenses associated with reviewing the application to transfer, including, without limitation, legal and accounting fees; and (k) If transferee is a corporation or a partnership, transferee shall make and will be bound by any or all of the representations, warranties and covenants set forth at Section VI.B.(2) as Franchisor requests. Transferee shall provide to Franchisor evidence satisfactory to Franchisor that the terms of Section VI.B.(2) have been satisfied and are true and correct on the date of transfer. (3) Franchisor will apply the transfer requirements set forth in Section VIII.B.