Under what conditions can an Epcon Communities franchisee's lender complete a project, and what obligations must they fulfill?

NOW, THEREFORE, in consideration of the foregoing, of the agreements, terms and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee do hereby agree as follows:

• 1. Assignment of Franchise Agreement and Market Area Agreement. Assignor hereby expressly grants, bargains, sells, conveys, transfers and assigns to Assignee such of Assignor's right, title and interest in and to the Franchise Agreement and the Market Area Agreement (copies of which are attached hereto, made a part hereof and marked as Exhibit "A"), and the license granted thereunder, which may be necessary to permit Assignee to complete any Project which is the subject thereof upon the default or occurrence of an event of default by Assignor under any of the Loan Agreements (hereinafter, the "Assignment"). The Assignment shall not include the rights of the franchisee provided under Sections 3.4 of the Franchise Agreement.
• 1. Acceptance of Assignment and Assumption of the Obligations. Assignee hereby accepts the Assignment and, if, upon the default by Assignor under the Loan Agreements, Assignee decides to use the Development System to complete any unfinished Project(s), assumes, and agrees to be bound by all of Assignor's obligations under the Franchise Agreement as such obligations relate to the Epcon Communities project developed by Assignor and such of Assignor's obligations under the Franchise Agreement and the Market Area Agreement as are corresponding with the right, title, and interest transferred to Assignee in Section 1 hereof (hereinafter, the "Obligations"). Assignee shall promptly communicate in writing to Epcon Communities its decision respecting assumption of the Obligations as franchisee under the Franchise Agreement and the Market Area Agreement. If Assignee, in full compliance with the terms of the Franchise Agreement and the Market Area Agreement uses the Development System to complete a Project or Projects, Assignee shall have no obligation to Epcon Communities to cause Assignee's stock certificates or other certificates evidencing ownership to be inscribed with a legend referencing the Franchise Assignment Agreement, the Lender Agreement, or the Market Area Agreement.
• 1. Assignor's Continuing Liability for the Obligations. Notwithstanding the Assignment, Assignor hereby acknowledges and agrees that it shall remain liable to Epcon Communities for all of the Obligations.
• 1. Epcon Communities' duties and obligations pursuant to the terms of the Franchise Agreement and Market Area Agreement or Small Market Area Agreement, as applicable, are not altered or otherwise increased.
• 1. Epcon Communities shall be paid any and all payments specified in the Franchise Agreement no later than the applicable payment due dates.
• 1. Assignor fully complies with the terms of the Franchise Agreement, Market Area Agreement or Small Market Area Agreement, as applicable, and any and all other agreements between Epcon Communities and Assignor. Notwithstanding the foregoing, if Assignor is not in full compliance with the terms of each such agreement(s) but either of the following occur Epcon Communities shall consent to the assignment: (i) if Assignor's noncompliance is due to nonpayment of amounts due to Epcon Communities related to the subject Project, Assignee shall pay any fees related to such Project that are past due and payable to Epcon Communities and shall agree to pay any fees related to such Project that become due and payable to Epcon Communities in the future, or (ii) if Assignor's non-compliance is due to a material default in Assignor's use of the Development System in the construction of the Project, Assignee agrees to correct such material defaults and use the entire Development System without modification or deviation.
• 1. Assignee fully complies with the terms of the Franchise Agreement and Market Area Agreement or Small Market Area Agreement, as applicable, including without limitation, upon its decision to use the Development System to complete a Project or Projects, providing to Epcon Communities copies of the documents attached as Exhibit "2" and/or Exhibit "2A" to the Franchise Agreement executed by those individuals who will be acting on behalf of Assignee in completing any Project(s) and will be provided more detailed information regarding the Development System than has been provided to the general public.
• 1. In the event that Epcon Communities must hold initial training sessions for the benefit of Assignee, or Assignee's agents and employees, Assignee agrees to pay to Epcon Communities a reasonable tuition fee for each attendee attending such training.

Source: Item 23 — RECEIPTS (FDD pages 86–280)