What conditions must a Southern Steer franchisee meet to be eligible for a Successor Term?

nce with this Agreement. The Initial Term may be extended under certain circumstances to coincide with the term of the lease for Franchisee's Southern Steer Business. This Agreement will not be enforceable until it has been signed by both the Franchisee and the Franchisor.

• 2.2. Successor Term. Provided that, at the end of the Initial Term of this Agreement or any Successor Term, as the case may be, (a) the Franchisee has timely complied with all terms and conditions of this Agreement, including the timely payment of all Royalty Fees, Brand Fund Contribution Fees, Local Advertising Cooperative Fees, and other Fees due to the Franchisor; (b) the Franchisee is not in default of the lease for the Franchised Location, if any; (c) the Franchisee has paid or satisfied all monetary obligations owed by the Franchisee to the Franchisor, Franchisor's Affiliates, Approved Suppliers, and Designated Suppliers; (d) the Franchisee is not in default under this Agreement at the time Franchisee provides written notice; and (e) the Franchisee has not been in default under this Agreement more than two times in any 12 month period or more than six times during the Initial Term (or the immediately preceding Successor Term, as the case may be) regardless of whether or not such default has been cured, the Franchisee may, at its option, have the right to operate the Southern Steer Business at the Franchised Location for an additional Successor Term commencing on the end of the Initial Term (or immediately preceding Successor Term, as the case may be). The Franchisee must exercise its option for a Successor Term by giving the Franchisor written notice of Franchisee's election to do so at least 180 days and no more than one year prior to the expiration of the Initial Term (or immediately preceding Successor Term, as the case may be). As a condition for any Successor Term, the Franchisee must cause all of the following to occur:

• i. The Franchisee must provide written evidence to the Franchisor that the Franchisee either owns or has the right to lease the Franchised Location for at least five additional years after the end of the Initial Term or preceding Successor Term, as the case may be;

• ii. The Franchisee must sign Franchisor's then-current form of franchise agreement ("Successor Franchise Agreement"), which may include terms and conditions materially different from those in this Agreement, such as different performance standards, fee structures and/or increased fees, and an option to operate the Southern Steer Business for any additional terms;

• iii. In lieu of paying the Initial Franchise Fee specified in the Successor Franchise Agreement, the Franchisee must pay to Franchisor the Successor Franchise Fee set out in Section 3.2(j) at least 90 days before renewing Franchisee's right to operate the Southern Steer Business;

• iv. The Franchisee must execute a general release in a form satisfactory to Franchisor of any and all claims against Franchisor, its parent, subsidiaries or Affiliates (if applicable) and their officers, directors, attorneys, Owners and employees;

• v. The Franchisee (or its Operating Principal) and its Designated Manager must complete any new training requirements designated by the Franchisor;

• vi. The Franchisee must agree in writing to make, within six months after the effective date of the Successor Franchise Agreement, all capital expenditures necessary to remodel the Franchised Location, as determined by the Franchisor, to comply with the then-current Southern Steer Businessimage, décor, and specifications established by the Franchisor, and provide evidence to the Franchisor's reasonable satisfaction that the Franchisee has received a written loan commitment from a commercial lender for the amount of the estimated cost of the remodeling or has the financial capability of making such expenditures;

• vii. The Franchisee, Owners, Guarantor(s) and Designated Manager must be in compliance with Franchisor's then current qualifications and standards; and

• viii. Franchisee must have all licenses, insurance, registrations and approvals required by Franchisor or applicable governing authority to operate the Southern Steer Business in the Protected Area.

• 2.3. Interim Period.

Source: Item 22 — ITEM. 22 CONTRACTS (FDD pages 61–168)