contractors, and Sales Advisors. Franchisee understands and agrees that Franchisor is not a party to Franchisee's employment contracts (neither as sole, nor as a joint employer) with its own staff and Sales Advisors, and Franchisee shall be solely liable for fulfillment of these contracts in every respect (e.g., deduction and remittance of income taxes, social security contributions, etc.). None of Franchisee's employees, contractors or Sales Advisors will be considered to be Franchisor's employees and Franchisee acknowledges that Franchisor is not in a position to exercise control over Franchisee's employees, contractors or Sales Advisors. Neither Franchisee nor any of its employees, contractors or Sales Advisors whose compensation it pays may in any way, directly or indirectly, expressly or by implication, be construed to be Franchisor's employee for any purpose, including with respect to any mandated or other insurance coverage, tax or contributions, or requirements pertaining to withholdings, levied or fixed by any city, state or federal governmental agency. Franchisee expressly agrees, and will never contend otherwise, that Franchisor's authority under this Agreement to certify certain of Franchisee's employees, contractors or Sales Advisors for qualification to perform certain functions for Franchisee's franchised Business does not directly or indirectly vest in Franchisor the power to hire, fire or control any such employee, contractor or Sales Advisor.

• 6.3 Franchisee acknowledges and agrees, and will never contend otherwise, that Franchisee alone will exercise day-to-day control over all operations, activities and elements of its franchised Business hereunder and that under no circumstance shall Franchisor do so or be deemed to do so.

Franchisee further acknowledges and agrees, and will never contend otherwise, that the various requirements, restrictions, prohibitions, specifications and procedures of the ENGEL & VÖLKERS System which Franchisee is required to comply with under this Agreement, whether set forth in the System Documentation or otherwise, do not directly or indirectly constitute, suggest, infer or imply that Franchisor controls any aspect or element of the day-to-day operations of Franchisee's franchised Business, which Franchisee alone controls, but only constitute standards Franchisee must adhere to when exercising Franchisee's control of the day-to-day operations of its franchised Business.

17. Liability/Indemnity

17.1 Indemnity:

Franchisee will, at its sole cost, at all times defend, reimburse and hold harmless Franchisor and its affiliates, subsidiaries, successors, assigns and designees; and, the officers, directors, managers, employees, contractors, agents, attorneys, shareholders, owners, members, designees and representatives of all of the foregoing (Franchisor and all others referenced above being the "Indemnified Parties"), and indemnify and hold harmless Franchisor and the other Indemnified Parties to the fullest extent permitted by law, against all claims, losses, liabilities and costs (as denominated in the following paragraph) incurred in connection with any judicial, administrative or arbitration action or proceeding (including bankruptcy, insolvency, debtor/creditor or similar proceedings), suit, claim, demand, investigation, or formal or informal inquiry (regardless of whether any of the foregoing is reduced to judgment) or any settlement of the foregoing, which actually or allegedly, directly or indirectly, arises out of, is based upon, is a result of or is related in any way to any element of Franchisee's entry into this Agreement; actions or omissions committed by Franchisee or its affiliates, employees, contractors, or Sales Advisors in connection with the operation of the ENGEL & VÖLKERS Residential Real Estate Brokerage hereunder; the establishment, construction, ownership, opening and operation of the office of Franchisee's franchised Business hereunder, including any other business operating within or in relation to the office (which other business, if any, shall be subsumed within this paragraph's references to the office) and further including (without limitation) any personal, bodily or mental injury, death, property damage or loss, suffered by any customer, visitor, manager, operator, supplier, employee, contractor, or guest of the franchised ENGEL & VÖLKERS office; crimes committed on or near any of the premises or facilities of Franchisee's franchised Business or vehicles used by Franchisee's franchised Business; all acts, errors, neglects or omissions engaged in by Franchisee, its contractors or subcontractors, as well as any third party, arising out of or related to the design, construction, conversion, build-out, outfitting, remodeling, renovation or upgrading of its franchised ENGEL & VÖLKERS office, whether or not any of the foregoing was approved by Franchisor; defects in any ENGEL & VÖLKERS franchised office that Franchisee constructs and/or operates, whether or not discoverable by Franchisee or by Franchisor; all acts, errors, neglects or omissions of Franchisee or the franchised ENGEL & VÖLKERS Residential Real Estate Brokerage and/or the owners, officers, directors, management, employees, agents, servants, contractors, partners, proprietors, affiliates or representatives of Franchisee and/or the franchised Business and/or the location thereof (or any third party acting on Franchisee's behalf or at Franchisee's direction), whether in connection with the franchised business, the office or otherwise, including (without limitation) any property damage, injury or death suffered or caused by any vehicle serving the franchised Business; any claim, however and wherever asserted, that Franchisor or its respective affiliates are the employer, joint employer or coemployer of Franchisee and/or Franchisee's employees or contractors; claims that Franchisee, its owners, employees, contractors, brokers or Franchisee's Sales Advisors are Franchisor's employees, agents or part of a common enterprise with Franchisor, including claims regarding violation or labor or employment law regulations; third party claims against Franchisor arising from or related to Franchisee's breach of the terms, restrictions and requirements of this Agreement (including, without limitation, Franchisee's unauthorized use of the Trademarks, violation of any applicable laws, codes, rules or regulations or failure to comply with Information Privacy Laws); Franchisee's violation of Information Privacy Laws; all liabilities arising from Franchisee's offer, sale and/or delivery of programs, services and/or products as contemplated by this Agreement; Franchisee's offer, sale and/or delivery of securities, equity interests or other ownership interests in Franchisee or the franchised ENGEL & VÖLKERS office or business of Franchisee; all activities, conduct and representations which Franchisee may engage in

26.13 Acknowledgements of Franchisee:

Franchisee represents, warrants and acknowledges the following statements to be true and correct as of the date Franchisee signs this Agreement, and to be binding on Franchisee:

• 26.13.1 Franchisee has conducted an independent investigation of the business contemplated by this Agreement.

• 26.13.2 Franchisee represents that, as an inducement to Franchisor's entry into this Agreement, it has made no misrepresentations in obtaining this agreement.

• 26.13.3 Franchisee is aware of the fact that other present or future franchisees may operate under different forms of agreement(s), and consequently that Franchisor's obligations and rights with respect to its various franchisees may differ materially

• in certain circumstances. Any such variances Franchisor determines for other franchisees, do not grant Franchisee any rights or entitle Franchisee to request a similar modification under this Agreement.

• 26.13.4 No representation or statement has been made by Franchisor or its affiliates (or any of its or their officers, directors, managers, employees, agents or salespersons) regarding Franchisee's anticipated income, earnings and growth of the franchised Business or that of the ENGEL & VÖLKERS System, or the viability of the business opportunity being offered under this Agreement.

• 26.13.5 Before executing this Agreement, Franchisee has had the opportunity to contact all of Franchisor's existing franchisees.

• 26.13.6 Franchisee has received from Franchisor a copy of Franchisor's franchise disclosure document, together with a copy of all proposed agreements relating to the sale of the franchise, at least fourteen (14) calendar days before the execution of this Agreement or at least fourteen (14) calendar days before the payment by Franchisee to Franchisor any consideration in connection with the sale or proposed sale of the franchise granted by this Agreement.

• 26.13.7 Franchisee understands that the franchise relationship is an arms' length, commercial business relationship in which each party acts in its own interest.

All representations and warranties of Franchisee contained in this Agreement are complete, correct and accurate as of the date of execution of this Agreement and will survive any termination or expiration of this Agreement.

25. ENGEL & VÖLKERS Group and Parent Not a Party

• 25.1 No Relationship with ENGEL & VÖLKERS GROUP and Parent. Franchisee acknowledges and agrees that neither the Engel & Völkers Group nor the Parent are a party to this Agreement or bound to Franchisee in any way by this Agreement.

Source: Item 22 — CONTRACTS (FDD page 88)