n the expiration or termination of our General License Agreement, any existing Franchise Agreements between us and our franchisees will automatically expire.

Item 12 TERRITORY

Generally, you will receive the right to operate an Engel & Völkers Residential Real Estate Brokerage at a specific location as specified in Appendix 1 of your Franchise Agreement ("Approved Location"). You will have exclusivity with regard to your Engel & Völkers Residential Real Estate Brokerage in a specific area called the "Protected Area", which will be an area defined by US postal zip codes. By "Exclusivity" we mean that we will not open or grant to anyone else the right to open another Engel & Völkers Residential Real Estate Brokerage in your Protected Area during the term of your Franchise Agreement. "Exclusivity" does not mean that we, our affiliates, or other franchisees are prevented from soliciting clients, marketing our residential real estate brokerage services, or concluding real estate transactions in your Protected Area.

You will operate only from one Approved Location and you must receive our written consent before relocating. You may not open an Engel & Völkers Residential Real Estate Brokerage outside your Protected Area. Nothing prevents you from advertising your Residential Real Estate Brokerage services in

the U.S. (including property listings in the U.S.) for which you are registered for under applicable state law, in any national or international publications or via the internet, etc. Likewise, Franchisor and other franchisees are permitted to advertise inside of Franchisee's Protected Area. Before advertising or otherwise soliciting or providing Real Estate Brokerage services outside of the U.S. for any property listings (buyer or seller side) Franchisee must obtain Franchisor's written consent, which Franchisor may grant or withhold in its sole discretion. If you refer a customer or property to another master franchisee or franchisee, or receive a referral from another master franchisee or franchisee and the transaction closes, you will receive or will pay a referral fee when permitted by applicable law.

We may grant you the right to open and operate one or more limited purpose locations ("Limited Purpose Location(s)"), which will generally be located in your Protected Area and which will be subject to your continued complaince with the terms of your franchise agrement and certain standards as set forth in the System Documentation, as amended from time to time. Limited Purpose Locations are typically either locations for overflow administrative staff, or for sales advisors to use in connection with specific development projects. You must request our approval to operate a Limited Purpose Loction in writing in advance and provide sufficient information, as specified by us from time to time in the System Documentation, to support your request. Within 30 days after receiving such a request, we will, at our discretion, approve or deny your request. You will not receive any additional territorial rights with our aproval of a Limited Purpose Location. You may not operate a Limited Purpose Location without our aproval and unless we sign an Limited Purpose Sales Location Addendum or Limited Purpose Administrative Location Addendum with you for each Limited Purpose Location. You should not sign a lease or incur any other expenses or liabilities before an Limited Purpose Location Addendum for the proposed location is executed. A Limited Purpose Location is not and does not replace an Approved Location (as defined in the Franchise Agreement) and you will have no right of first refusal, option or similar rights to acquire additional franchises or for additional Limited Purpose Locations.

During the term of your Franchise Agreement, we will not permit another location (other than for additional franchised locations you and we agree to, or Limited Purpose Locations that we permit you to open) in your Protected Area and we will not open an Engel & Völkers Residential Real Estate Brokerage of our own dealing in residential properties using the ENGEL & VÖLKERS Trademark within your Protected Area. Generally, your rights in your Protected Area are not dependent upon achievement of a certain sales volume, market penetration or any other contingency. However, if you request and we grant you to open and operate more than one location in your Protected Area and you do not find or operate those additional locations as agreed upon in the Franchise Agreement, we reserve the right to reduce your Protected Area to reflect an appropriate Protected Area for the location or locations that are operational.

Except for our right to terminate your Franchise Agreement under certain circumstances or to reduce your Protected Area if you have multiple locations in your Protected Area as described above, there are no other circumstances under which we can modify your Protected Area.

We reserve all rights not specifically granted to you in your Franchise Agreement.

Source: Item 12 — TERRITORY (FDD pages 54–56)