What happens if a Dermani Medspa member transfers their interest in the Area Development Agreement?

uired by another corporation; may undertake a refinancing, recapitalization, leveraged buyout or other economic or financial restructuring, without prior notice to you, and we do not need your consent or approval to do so. Further, with regard to any or all of the above sales, assignments and dispositions, you expressly and specifically waive any claims, demands or damages arising from or related to the loss of said Marks (or any variation thereof) and/or the loss of association with or identification of "dermani MEDSPA® Franchising LLC" as Franchisor. Nothing contained in this Agreement shall require us to remain in the same business or to offer the same products and services, whether or not bearing the Marks, in the event that we exercise our right to assign our rights in this Agreement.

7.2. Transfer By You.

• 7.2.1. You understand and acknowledge that the rights and duties this Agreement creates are personal to you and that we have granted you the right to develop Franchised Businesses and manage dermani MEDSPA®s in reliance upon our perceptions of your individual or collective character, skill, aptitude, attitude, business ability, and financial capacity. Accordingly, none of the following may be transferred without our prior written approval: (i) this Agreement or any interest in this Agreement; (ii) any Franchise Agreement signed by you, your Owner(s), or any of your affiliates pursuant to this Agreement; (iii) any Franchised Business or any right to receive all or a portion of any Franchised Business's or dermani MEDSPA®'s profits or losses or capital appreciation; (iv) your lease(s), mortgage(s), or other agreement where each Franchised Business or dermani MEDSPA® is or will be located; (v) substantially all of the assets of the Franchised Business and dermani MEDSPA®; (vi) any ownership interest in you (regardless of its size); or (vii) any ownership interest in any of your owners. A transfer of the Franchised Business's ownership, possession, or control, or substantially all of its assets, may be made only with a transfer of this Agreement.

• 7.2.2. In this Agreement, the term "transfer" includes a voluntary or involuntary, direct or indirect, assignment, sale, gift, or other disposition. An assignment, sale, gift, or other disposition includes the following events:

  • a) transfer of ownership of capital stock, a partnership or membership interest, or another form of ownership interest;
  • b) merger or consolidation or issuance of additional securities or other forms of ownership interest;
  • c) any sale of a security convertible to an ownership interest;
  • d) transfer of an interest in you, this Agreement, any Franchise Agreement(s), the Franchised Business(es), or substantially all of your assets, or your owners in a divorce, insolvency, or entity dissolution proceeding or otherwise by operation of law; or

• e) if you or one of your owners dies, a transfer of an interest in you, this Agreement, the Franchised Business or substantially all of your assets, or your owner by will, declaration of or transfer in trust, or under the laws of intestate succession.

• 7.3. Conditions for Approval of Transfer. You must submit a written request to us for any proposed transfer under this Agreement. If you are in full compliance with this Agreement, then we will not unreasonably withhold our consent to a transfer that meets all of the requirements in this Section 7. For any proposed transfer, all of the following conditions must be met before or concurrently with the effective date of the transfer:

  • 7.3.1. The transferor shall have executed a general release (which shall include a release from the transferor, you, and the current and former owners, Principals and guarantors of you), in a form satisfactory to us, of any and all claims against us and our affiliates, successors, and assigns, and their respective directors, officers, shareholders, partners, agents, representatives, servants, and employees in their corporate and individual capacities including, without limitation, claims arising under this Agreement, any other agreement between you and us or our affiliates, and federal, state, and local laws and rules.
  • 7.3.2. The transfer shall be accompanied by a transfer of all franchise agreements with us and rights to all Franchised Business(es) managed thereunder and owned by you to the same transferee.
  • 7.3.3. The transferee of an Owner shall be designated as an Owner and each transferee who is designated an Owner shall enter into a written agreement, in a form satisfactory to us, agreeing to be bound as an Owner under the terms of this Agreement as long as such person or entity owns any interest in you; and, if your obligations were guaranteed by the transferor, the Owner shall guarantee the performance of all such obligations in writing in a form satisfactory to us.
  • 7.3.4. Prior to, and after the transfer, your Owners shall meet our educational, managerial, and business standards; each shall possess a good moral character, business reputation, and credit rating; have the aptitude and ability to operate your business, as may be evidenced by prior related business experience or otherwise; and have adequate financial resources and capital to operate the business.
  • 7.3.5. If a proposed transfer would result in a change in control of you, at our option, the transferee or the new developer controlled by the transferee shall execute, for a term ending on the expiration date of this Agreement the form of area development agreement then being offered to new System developers, and such other ancillary agreements required by us for the business contemplated hereunder, which agreements shall supersede this Agreement and its ancillary documents in all respects, and the terms of which may differ from the terms of this Agreement.
  • 7.3.6. The transferor shall remain liable for all of the obligations to us in connection with this Agreement that arose prior to the effective date of the transfer, and any covenants that survive the termination or expiration of this Agreement, and shall execute any and all instruments reasonably requested by us to evidence such liability.
  • 7.3.7. The transferee shall have the same training obligations as set forth for you in Section 6.

Source: Item 23 — RECEIPTS (FDD pages 66–311)