What criteria must a proposed transferee meet to be approved as a Beef O Bradys franchisee?

idation or issuance of additional securities or interests representing an ownership interest in you; (iii) any issuance or sale of your stock or any security convertible to your stock; (iv) transfer of an interest in you, this Agreement or the Family Sports Pub in a divorce, insolvency or corporate or partnership dissolution proceeding or otherwise by operation of law; (v) transfer of an interest in you, this Agreement or the Family Sports Pub, in the event of your death or the death of one of your Owners, by will, declaration of or transfer in trust or under the laws of intestate succession; or (vi) pledge of this Agreement (to someone other than us) or of an ownership interest in you as security, foreclosure upon the Family Sports Pub or your transfer, surrender or loss of possession, control or management of the Family Sports Pub.

• 15.3 Conditions for Approval of Transfer. If you (and your Owners) are in full compliance with this Agreement, then subject to the other provisions of this Section 15, we will not unreasonably withhold approval of a Transfer that meets all the applicable requirements of this Section. The proposed transferee and its direct and indirect owners must be individuals of good character and otherwise meet our then applicable standards for Family Sports Pub franchisees. A Transfer of ownership, possession or control of the Family Sports Pub may only be made if the transferee enters into a new Franchise Agreement. If the Transfer is of your Family Sports Pub(s) or a controlling interest in you, or is one of a series of transfers which in the aggregate constitutes the Transfer of your Family Sports Pub(s) or a controlling interest in you, all of the following conditions must be met prior to or concurrently with the effective date of any Transfer:

• (a) Business Experience. The transferee has sufficient business experience, aptitude and financial resources to operate the Family Sports Pub and has been approved as a franchisee;
• (b) Payment of Royalties and Fees Owed. You have paid all Royalties, Marketing Contributions, amounts owed for purchases from us and all other amounts owed to us or to third-party creditors and have submitted all required reports and statements;
• (c) Completion of Initial Training. The transferee (and its Two Designated Operators) and its managerial employee (if different from your manager) have completed our training program;
• (d) New Franchise Agreement. The transferee has agreed to enter into a new Franchise Agreement;
• (e) Transfer Fee Paid. You or the transferee pay us a transfer fee equal to $20,000 (the "Transfer Fee"), ½ of which is payable prior to the transferee's Trainees beginning training. The Transfer Fee is used to defray expenses we incur in connection with the Transfer and the costs of training up to Two Designated Operators of the Transferee (one of whom must be a managerial employee responsible for the Family Sports Pub's kitchen operations). We may provide training to employees of the Transferee, in addition to the training that must be completed by the Two Designated Operators of the Transferee. If we do so, you or the transferee must pay us a fee not to exceed $1,000 per person trained by us (other than the Two Designated Operators of the Transferee described above). You or the transferee must pay all travel, wages and living expenses for the Transferee and the other trainees and employees to attend the training. This subsection will not apply if the proposed Transfer is among your Owners, but the transferee is required to reimburse us for any administrative costs we incur in connection with the Transfer;
• (f) Costs of Compliance. The transferee agrees to pay the costs required to bring the Family Sports Pub into compliance with the then current System Standards (including the purchase and installation of our then-current approved POS System);
• (g) General Release. You (and your transferring Owners**)** have executed a general release, in the form attached to the Franchise Disclosure Document, of any and all claims against us and our shareholders, officers, directors, employees and agents;
• (h) Approval of Terms and Conditions. We have approved the material terms and conditions of such Transfer and determined that the price and terms of payment will not adversely affect the transferee's operation of the Family Sports Pub;

Source: Item 23 — RECEIPTS. (FDD pages 66–330)