What factors does Dog Haus consider when evaluating a proposed assignment by the Area Developer?

• 9.4.2 Area Developer must be in Good Standing on the date consent is requested and until the date of closing of the Assignment.

• The sales price of the interest to be conveyed must not be so high, or the terms of the sale so onerous, that, in the judgment of Franchisor, the Proposed Buyer will be unlikely to meet the Proposed Buyer's financial and other obligations to Franchisor, third party suppliers and creditors following the closing.

Franchisor shall have no liability to either Area Developer or the Proposed Buyer if Franchisor approves the Assignment and the Proposed Buyer thereafter experiences financial difficulties.

• The Proposed Buyer must sign Franchisor's Then-Current form of Area Development Agreement, 9.4.4 the terms of which may differ materially from any and all of the terms contained in this Agreement, and which shall supersede this Agreement in all respects.

In exchange for signing the Then-Current Area Development Agreement, the Proposed Buyer shall receive the rights provided for in this Agreement, as modified by the terms of the Then-Current form of Area Development Agreement.

If Franchisor is not offering new area development franchises, is in the process of revising, amending or renewing Franchisor's form of Area Development Agreement or Disclosure Document or is not lawfully able to offer Franchisor's Then-Current form of Area Development Agreement at the time of an Assignment, Franchisor may offer to amend this Agreement, upon terms and conditions that will be established by Franchisor and the Proposed Buyer at that time, or may offer to amend the term of this Agreement on substantially the terms and conditions set forth in this Agreement on a month-to-month basis for as long as Franchisor deems necessary or appropriate so that Franchisor may subsequently offer and utilize a Then-Current form of Area Development Agreement.

• Area Developer will remain subject to all obligations stated in this Agreement that expressly, or by implication due to their nature, survive the transfer, termination or expiration of this Agreement, including, without limitation, the provisions prohibiting competition, non-interference and non-disclosure of Dog Haus Confidential Information.

• 9.4.6 Area Developer and the Proposed Buyer shall execute a General Release in a form acceptable to Franchisor.

• Area Developer shall pay Franchisor the Transfer Fee to apply against Franchisor's administrative 9.4.7 and other costs to process the Assignment.

• Area Developer must simultaneously transfer its rights all contracts for which continuation is necessary for operation of the Dog Haus Restaurants to the Proposed Buyer and satisfy any separate conditions to obtain any third party consents required for the transfer of Area Developer's rights to the Proposed Buyer.

The Proposed Buyer must execute all other documents and agreements required by Franchisor to consummate the Assignment.

All required third party consents to the Assignment must be obtained.

If the Proposed Buyer is a corporation, limited liability company or other business Entity, each person who at the time of the Assignment, or later, owns or acquires, either legally or beneficially, twenty percent (20%) or more of the equity or voting interests of the Proposed Buyer must execute a Guarantee in a form acceptable to Franchisor.

• 9.4.9 Area Developer's right to receive the sales proceeds from the Proposed Buyer in consideration of the Assignment shall be subordinate to the obligations of the Proposed Buyer owed to Franchisor and its Affiliates under, or pursuant to, this Agreement or any other agreement.

All contracts by and between Area Developer and the Proposed Buyer shall expressly include a subordination provision permitting payment of the sales proceeds to Area Developer only after any outstanding obligations owed to Franchisor and its Affiliates are fully satisfied.

• 9.4.10 Except when the transferee is an existing Area Developer or franchisee of Franchisor, the Proposed Buyer, and a supervisorial or managerial employee of the Proposed Buyer who will have general management and supervisory responsibilities for the Dog Haus Restaurants who is acceptable to Franchisor, must complete to Franchisor's sole satisfaction Franchisor's Initial Training Program prior to the effective date of the Assignment.

• 9.4.11 The Proposed Buyer must conform the Dog Haus Restaurants with Franchisor's Then-Current appearance and design standards and equipment specifications applicable to new Dog Haus Restaurants.

Source: Item 23 — RECEIPTS (FDD pages 87–328)