Can Engel & Volkers reduce or eliminate the Protected Area if the franchisee is in default?

If Franchisee should not find or operate such additional locations as agreed upon, Franchisor may reduce Franchisee's Protected Area to reflect the lower than intended number of physical locations that are operational and Franchisor also may reduce the Protected Area pursuant to Section 20.5 (Optional Remedy). "Exclusivity" means only that no other Engel & Völkers Residential Real Estate Brokerage will be placed in Franchisee's Protected Area by Franchisor so long as Franchisee is not in default under the terms of this Agreement.

• 20.3 Termination by Franchisor Without Opportunity to Cure: Franchisee shall be deemed to be in default under this Agreement, and Franchisor may, at its option, terminate this Agreement and all rights granted herein effective immediately or reduce or eliminate the Protected Area by written notice to Franchisee, without giving Franchisee an opportunity to cure the default, if Franchisee either:

• 20.3.1 fails to timely find and secure Franchisor approval of its Approved Location in accordance with the provisions of Section 3.1;

• 20.3.2 fails to start operating its Engel & Völkers Residential Real Estate Brokerage by the Opening Date;

• 20.5 Optional Remedy**:** If Franchisee fails to timely pay any amounts due to Franchisor or one of its affiliates, or if Franchisee is in material breach of any obligation under this Agreement, Franchisor may, in addition to or in lieu of its remedy under Section 20.4 or otherwise provided in this Agreement: (i) withhold Franchisee's access to the Integrated Product Suite described in Section 7 and any other services or goods, such as the GG Magazine, that Franchisor or its affiliates are obligated to provide hereunder until such time as Franchisee's payments are current; and/or (ii) rescind any terms to this Agreement that were negotiated between the parties, including reducing Franchisee's Protected Area.

Source: Item 22 — CONTRACTS (FDD page 88)