which Franchisee may have made or obtained to Franchisor promptly upon request by Franchisor and, in any event, upon termination or expiration of this Agreement for any reason whatsoever. Franchisee shall not at any time copy, duplicate, record or otherwise reproduce or transcribe any of the System Documentation or any of the forms supplied by Franchisor hereunder without Franchisor's prior written consent. If the System Documentation is supplied electronically, Franchisee may print one copy for its personal use in the operation of the Residential Real Estate Brokerage.

12. Ongoing Development of the ENGEL & VÖLKERS System

12.1 Modifications:

12.1.1 The parties hereby mutually agree that it may be necessary to adapt the ENGEL & VÖLKERS System, either on a temporary or a permanent basis, due to changing market conditions. In its sole business judgment, the Franchisor may take any steps it deems necessary to adapt and modify the ENGEL & VÖLKERS System, the Integrated Product Suite, the System Documentation and the Trademarks, and the required equipment, technology, signs, trade dress and other business characteristics Franchisee will be required to adhere to (subject to the limitations set forth in this Agreement), to such events or changes in market conditions and other developments occurring at any given time; provided, however, that the cost to Franchisee for adaptations and modifications shall not be unreasonable. Franchisee acknowledges that some aspects of the ENGEL & VÖLKERS System, such as modifications relating to computer systems and technology, may need frequent upgrades and changes. Franchisor will advise Franchisee in writing or by electronic transmission of any amendments, additions to and/or deletions from or substitutions for the System Documentation. Franchisee hereby undertakes to make corresponding amendments to its versions of the System Documentation at its own expense as soon as practicable on receipt of notification of these amendments, and to comply with the requirements of the System Documentation as it may be revised from time to time. Franchisee acknowledges that Franchisor has developed, and may from time to time develop, programs and designations that are only available to franchisees who meet certain criteria and that Franchisor may make adaptations and modifications to the ENGEL & VÖLKERS System related to such programs and designations. Franchisee further acknowledges and agrees that entering into this Agreement does not require Franchisor to make adaptations and modifications to the ENGEL & VÖLKERS System related to such programs and designations available to Franchisee, or entitle Franchisee to participate in such programs or obtain such designations. Franchisee will not have the right to require Franchisor to disclose any such program, designation, or variation or to

grant the same or a similar variation to Franchisee. Furthermore, Franchisor may adapt the ENGEL & VÖLKERS System to the peculiarities of a particular market area or its circumstances, business potential, population, existing business practices, any other condition which Franchisor considers important to the successful operation of Franchisee's business, or due to other events or other nonarbitrary distinctions, and whether or not they arise to the level of a force majeure event and whether or not they are foreseeable may Franchisee understands and agrees that adaptations and modifications to the ENGEL & VÖLKERS System may obligate Franchisee to invest additional capital or incur higher operating costs.

• 12.1.2 Franchisor will inform Franchisee of any exclusive cooperation arrangements entered into by Franchisor with services companies, e.g., providing for financial services, such as banks, insurance companies or other vendors offering services tailored for use by real estate professionals. In such cases, Franchisee shall then cooperate exclusively with these services companies in accordance with the terms and conditions of the cooperation agreement between Franchisor and those companies, except in cases where Franchisee has legitimate commercial or financial reasons for refusing such cooperation. Franchisee acknowledges that provisions of these kinds of services may require Franchisee to obtain additional licenses to comply with the laws regulating those industries. Franchisor will have the right to retain any commissions or event sponsorships earned due to any such cooperation required by Franchisee. Franchisee may propose service companies or sponsoring vendors to Franchisor for use by Franchisee, subject, however, to Franchisor's prior written approval. If Franchisee makes such a proposal, it shall be in writing with sufficient information for Franchisor to make a determination whether such service company or sponsoring vendor and its services are acceptable. Such determination shall be in Franchisor's business judgment.
• 12.2 Exchange of Information: The parties hereby mutually agree to exchange ideas and suggestions for amendments and improvements to the ENGEL & VÖLKERS System. Franchisee hereby agrees to inform Franchisor of all experience gained during use of the ENGEL & VÖLKERS System and the rights under this Agreement, and to allow Franchisor and other ENGEL & VÖLKERS franchisees to use the know-how gained from its experience free of charge. Franchisee hereby assigns to Franchisor any such amendments or improvements to the ENGEL & VÖLKERS System. Franchisee shall not be entitled to any compensation for such assignment.
• 12.3 Conferences/Annual Conference Fee: Franchisor will organize conferences as a forum at which franchisees and their staff members and Sales Advisors can exchange information on their experiences among themselves and with Franchisor. Such conferences and any such forum may be in physical in-person format and/or virtual format, as determined in Franchisor's sole business judgment. Any Principal owning twenty-five percent (25%) or more in Franchisee must attend all such conferences, at Franchisee's expense. If a Principal does not attend, the Franchisee will still be responsible for paying the Franchisor the lowest applicable registration fee for either on-site or virtual attendance.

13. Reporting, Rights of Control and Data

13.1 Reports: Franchisee shall transmit to Franchisor via Franchisor's online reporting systems not later than 2:00 p.m. (EST or EDT) on the Thursday of each week the prior week's data relating to the real estate brokerage services of its Approved Location as it may be further

detailed in the System Documentation. Should Franchisor grant Franchisee the right to operate multiple Approved Locations, Franchisee shall transmit to Franchisor the data for each Approved Location separately. Franchisor may from time to time specify what reports and in what format they must be submitted. As of the Effective Date, the following reports must be submitted, starting as of the Payment Start Date:

• 13.1.1 For reporting Gross Revenues (as defined in Section 14.2.2) Franchisee shall submit a "Revenue Report" including, but not limited to: property addresses, sales price, commissions earned for the applicable period and other data as required by Franchisor.
• 13.1.2 Franchisee shall submit Franchisee's prior Gross Revenues for the preceding period of up to three (3) years ("Prior Production Report") and transactional data as required by Franchisor and in a format reasonably acceptable to Franchisor. Prior Production Reports are intended to be used for reporting and benchmarking purposes, but may also be used for other, similar purposes by Franchisor.
• 13.1.3 For reporting general transactional information, Franchisee shall submit the "Transaction Report" including but not limited to: new escrows (including name of Sales Advisors, property address, sales price and estimated closing date), new listings (including listing Sales Advisor's name, property address and listing price) and change status and other data as may be required by Franchisor.
• 13.1.4 For reporting Franchisee's Residential Real Estate Brokerage status, Franchisee shall submit the "Office Report", including, but not limited to: names of Sales Advisors, change status, production history of Sales Advisors, and compensation models for Sales Advisors and other data as may be required by Franchisor.

All reports will be provided by Franchisor for completion and submitted electronically, and by its submission, Franchisee will represent that the data submitted are accurate and complete.

Franchisee agrees to submit to Franchisor a forecast of Gross Revenues and the number of personnel it expects to use for each of its successive financial years during the Term not later than December 31 of the preceding financial year.

Franchisee shall maintain, in an organized and complete fashion, all such reports, as well as written business, accounting, tax, sales, and financial records of its business in accordance with best practices in the industry.

13.2 Inspections and Certifications: Franchisor and Franchisee agree that it is essential to preserve the standards and uniformity of the ENGEL & VÖLKERS System. Consequently, Franchisee hereby grants Franchisor or its appointed agents the right to perform audits of its office organization, accounting procedures, and other aspects of the Residential Real Estate Brokerage at reasonable times during normal business hours, with or without prior notice to Franchisee, and at the same time to allow inspection of its business documents for the purpose of verifying compliance with the standards and quality required under this Agreement and adherence to those elements of the ENGEL & VÖLKERS System that relate to Franchisee providing residential real estate services under this Agreement. Franchisor shall be entitled to appoint third parties, in particular accountants, to exercise these inspection rights. Franchisor has the right to have Franchisee's books and records

will be audited by the auditors of Franchisor (or authorized third parties acting on their behalf) in accordance with customary standards. Franchisee hereby undertakes to give Franchisor or such authorized parties any necessary assistance. Franchisee will submit to Franchisor on completion of the audit of its annual accounts, a schedule certified by the auditor listing commission payments received against invoices ("Certified Commission Statement"). If Franchisee does not have an annual audit of its accounts prepared, Franchisee must provide Franchisor with a Certified Commission Statement consisting of a schedule in the form required by Franchisor which is signed by Franchisee and its auditor/tax consultant/bookkeeping company confirming the commissions reported and paid in the last calendar year. Franchisor may from time to time specify in which form and format, including, but not limited to electronic format, the Certified Commission Statement must be submitted. The Certified Commission Statement must be submitted to Franchisor by February 15 of each year. Franchisee further grants Franchisor the right to verify payments received by Franchisee by inspecting the relevant documents at quarterly intervals. Franchisee must give Franchisor any necessary assistance. If inspections or audits are made necessary by Franchisee's failure to furnish reports, supporting records or other information as required by this Agreement or to furnish reports, supporting records or other information on a timely basis, or if an understatement of Royalty payments or other fees resulting from the failure to transmit or report for the period of any audit is determined by any such audit or inspection to be greater than two percent (2%), Franchisor may, at its option, require Franchisee to reimburse Franchisor for the cost of the inspection or audit, including the charges of Franchisor's employees or attorneys and any independent accountants, and the travel expenses, room and board and applicable per diem charges of such persons.

• 13.3 Notice of Special Occurrences: Franchisee hereby covenants and undertakes to promptly notify Franchisor immediately of any warnings or special notices received by Franchisee, any lawsuits or complaints filed against Franchisee, its Sales Advisors and/or any violations of laws, regulations or professional or ethical standards alleged against Franchisee or its Sales Advisors.

Source: Item 22 — CONTRACTS (FDD page 88)