How does the death or legal incapacity of a shareholder affect the Amorino Area Developer Agreement?

5,000 which is reasonably required to cover Company's expenses relating to said assignment, and a training fee of $5,000; provided however that Company shall waive such training fee if the assignment is to an existing franchisee.

• (c) If Area Developer is a corporation, or a limited or general partnership, each of the following shall be deemed to be an assignment of this Agreement within the meaning of this Section, the death or legal incapacity of any shareholder owning twenty percent (20%) or more of the capital stock or voting power of Area Developer; (ii) if Area Developer is a general or limited partnership, the withdrawal, death or legal incapacity of a general partner, or a limited partner owning twenty percent (20%) or more of the voting power, property, profits or losses, of the partnership, or the admission of any additional general partner or transfer by any general partner of its interest in the property, management or profits and/or losses of the partnership; (iii) the issuance of any securities by Area Developer which itself or in combination with any other transaction(s) results in the shareholders or partners existing as of the Effective Date, as applicable, owning less than eighty percent (80%) of the outstanding shares or voting power of a corporate Area Franchise, or of the voting power or interests in the property, profits or losses of a limited partnership; (iv) the transfer of twenty percent (20%) or more in the aggregate of the capital stock or voting power of Area Developer, by operation of law or otherwise; and (v) any

merger, stock redemption, consolidation, reorganization or recapitalization involving Area Developer.

(d) Area Developer shall not in any event have the right to pledge, encumber, hypothecate or otherwise give any third party a security interest in this Agreement in any manner whatsoever without the express prior written permission of Company, which permission may be withheld for any reason whatsoever in Company's sole subjective judgment.

7.4 Right of First Refusal

Except as expressly provided in Section 7.3 to the contrary, any assignment of this Agreement, or any interest herein, shall be subject to Company's right of first refusal with respect thereto. Company's said right of first refusal shall be exercised in the following manner:

• (a) Area Developer shall deliver to Company a written notice clearly and unambiguously setting forth all of the terms and conditions of the proposed assignment and all available information concerning the proposed assignee, including but not limited to, information concerning the employment history, financial condition, credit history, skill and qualifications of the proposed assignee and, in the case of a partnership or corporate assignee, of its partners and shareholders as applicable.

Source: Item 22 — CONTRACTS (FDD pages 80–81)