What is the Engel & Volkers agreement's definition of 'Principal'?

all costs associated with providing reporting information requested in connection with the security.

22.8 No Waiver of Franchisor's Rights:

Franchisor's consent to any assignment shall not constitute a waiver of any claims Franchisor may have against Franchisee, the franchised Business, Residential Real Estate Brokerages operated by Franchisee or its affiliates, any of Franchisee's owners and/or any

Guarantor. Nor shall such consent be deemed a waiver of Franchisor's right to require exact compliance with any of the terms of this Agreement by any assignee.

23. Multiple Owner and Business Entity Franchisee

• 23.1 Guarantee: If Franchisee is a business entity, e.g., corporation, partnership or limited liability company, Franchisee's principal owners must be named in Appendix 5 (hereinafter called the "Principals"). A Principal is an "owner" that owns ten percent (10%) or more of Franchisee. The Principals will each sign the Principal's Guarantee and Assumption of Obligations attached as Appendix 4 to this Agreement. If the Principal is in a community property state or for other reasons determined by Franchisor, the Principal's spouse may also be required to sign the Guarantee form. If any Principals change, Franchisee must notify and provide an updated list of all Principals to Franchisor immediately.
• 23.2 Ownership in Franchisee: Franchisee shall ensure that the named Principals hereby undertake for the duration of this Agreement:
  • 23.2.1 to retain, collectively, an ownership interest of not less than fifty-one percent (51%) of Franchisee's voting capital or, in cases where Franchisee is a subsidiary company, not less than the equivalent percentage of the holding company's voting capital;
  • 23.2.2 not to make any disposition of the ownership interests in the aforementioned companies without the prior written consent of Franchisor, which consent shall not be unreasonably withheld;
  • 23.2.3 not to make any amendments to the organizational documents of Franchisee without first informing Franchisor in writing, which consent shall not be unreasonably withheld;
  • 23.2.4 to retain its position of control over the management and operation of Franchisee; and
  • 23.2.5 not to enter into competition during the Term with the ENGEL & VÖLKERS System, either directly or indirectly, in an employed or a self-employed capacity, for its own account or for the account of a third party for the duration of this Agreement, provided always that the Principal is entitled to acquire shares in stock exchange-listed companies during the course of normal investment activity up to an amount of not more than twenty-five percent (25%) of the share capital of such companies.

The Principals are allowed, with the prior written consent of Franchisor, to sell their ownership interests to potential investors provided that the investor possesses the necessary creditworthiness, sound business standing, specialist knowledge and experience.

Source: Item 22 — CONTRACTS (FDD page 88)