What laws, rules, and regulations must an Engel & Volkers franchisee strictly comply with?

of the Residential Real Estate Brokerage. As between the parties hereto, it will be Franchisee's responsibility to promptly investigate the need for, seek and obtain all government and quasi-governmental approvals, consents and licenses required to commence operations of the Residential Real Estate Brokerage. Franchisor makes no representation or warranty that Franchisee will be able to do so.

• 26.11.2 Without limiting the generality of the requirements of this Section, Franchisee agrees to strictly comply with all applicable laws, rules or regulations of any

nation, state, or other political/governmental subdivision governing the franchised Business.

• 26.11.3 Franchisee undertakes to operate its franchised Business in strict compliance with all applicable laws, rules and regulations of all governmental authorities; comply with all applicable wage, hour and other laws and regulations; prepare and file all necessary tax returns; pay all taxes imposed on Franchisee related to the Residential Real Estate Brokerage; obtain and keep in good standing all necessary licenses, permits and other required forms of governmental approval required for Franchisee to offer and sell the services and products which now or in the future are part of the ENGEL & VÖLKERS System; pay or cause to be paid prior to delinquency all taxes, fines, fees and/or assessments arising out of or in connection with the operation of its franchised Business; and, otherwise be responsible for compliance, at Franchisee's sole expense, with all governmental or quasigovernmental requirements, restrictions, duties and responsibilities.
• 26.11.4 Franchisee shall notify Franchisor in writing within five (5) days of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, which may adversely affect the operation or financial condition of Franchisee.
• 26.11.5 Franchisee and its Principals understand the requirements of, and will abide by, all United States government economic sanctions requirements throughout the Term. Franchisee and its Principals represent and warrant that neither Franchisee nor any of its direct or indirect Principals, shareholders, owners, directors, managers, affiliates, employees or agents, nor any funding source Franchisee utilizes, is or will be identified on the list of the U.S. Treasury's Office of Foreign Assets Control (OFAC) or is or will be a person subject to trade restrictions under United States law, including (without limitation) the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., or any Executive Orders or regulations promulgated thereunder (including Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, and the Specially Designated Nationals and Blocked Persons List), the Patriot Act, or any other law, rule or regulation pertaining to immigration or terrorism ("Anti-Terrorism Laws"); is directly or indirectly owned or controlled by the government of any country that is subject to an embargo imposed by the United States government or by any individual that is subject to an embargo imposed by the United States government; is acting on behalf of any country or individual that is subject to such an embargo; or, is involved in business arrangements or other transactions with any country or individual that is subject to an embargo. Franchisee agrees to immediately notify Franchisor in writing upon the occurrence of any event which would render the foregoing representations and warranties incorrect. Notwithstanding anything to the contrary in this Agreement, Franchisee may not allow, effect or sustain any transfer, assignment or other disposition of this Agreement to a "Specially Designated National or Blocked Person" (as defined below) or to an entity in which a Specially Designated National or Blocked Person has an interest. For the purposes of this Agreement, "Specially Designated National or Blocked Person" means: (i) a person or entity designated by OFAC (or any successor officer agency of the U.S. government) from time to

time as a "specially designated national or blocked person" or similar status; (ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; or, (iii) a person or entity otherwise identified by any government or legal authority as a person with whom Franchisee (or any of its owners or affiliates) or Franchisor' (or any of their respective owners or affiliates) are prohibited from transacting business. Franchisee further agrees that Franchisee will not hire, retain, employ or otherwise engage the services of any individual or entity in contravention of Anti-Terrorism Laws or any other legally prohibited individual or entity. Neither Franchisee nor its Principals shall engage in any activity that would expose Franchisor to a risk of criminal or civil penalties under applicable United States law. Any violation of the Anti-Terrorism Laws by Franchisee or its Principals, or any blocking of Franchisee's or its Principals' assets under the Anti-Terrorism Laws, shall constitute good cause for immediate termination of this Agreement and any other agreement Franchisee has entered into with Franchisor or any of its affiliates.

Source: Item 22 — CONTRACTS (FDD page 88)