Is Engel & Volkers required to provide training courses to franchisees?

[Item 22: CONTRACTS]

9. Training Courses

9.1 General: In order to ensure that Franchisee is able to operate its Residential Real Estate Brokerage in compliance with the ENGEL & VÖLKERS System, Franchisee (or if it is an entity, its Principals) agrees to attend and agrees to send certain of its staff members and Sales Advisors to attend training courses designated by Franchisor. This training will be provided by Franchisor at such locations, or in a virtual format and at times as Franchisor may determine at its sole discretion, and Franchisee shall pay such training fees as may be charged by Franchisor. The Initial Franchise Fee will entitle Franchisee to have one (1) person trained under the Franchisee System Training described in Section 9.2, without charge, but Franchisee must pay a training fee for any additional persons trained under the

System Training and for other training. In any event, any training fees that are charged must be paid by Franchisee prior to the time the trainee is trained. The training program is described below in Sections 9.2 to 9.7.

• 9.2 Franchisee System Training: Franchisee, or if Franchisee or its Principals (as hereinafter defined) will not be active in the operation of the real estate brokerage, Franchisee's brokerage manager and office managers must prior to the Payment Start Date (as defined in Section 14.2.1) attend the Franchisee System Training ("Leadership Path Training" or "LPT") provided by Franchisor at a location or in virtual format, as determined by Franchisor.

Any new brokerage manager appointed by Franchisee must successfully complete LPT within ninety (90) days of their appointment.

• 9.3 Sales Advisor System Training: All Sales Advisors of Franchisee and staff members supporting Sales Advisors must successfully complete the Engel & Völkers Sales Advisor System Training ("Engel & Völkers Engage") provided by Franchisor within ninety (90) days of affiliating with Franchisee.

• 9.4 Support Path Training.

At least one person in an administrative role that supports Franchisee's Sales Advisors must attend the Engel & Völkers Support Path Training ("SPT") provided by Franchisor prior to the Opening Date.

Franchisee must at all times have at least one person working at the franchised Business who have attended SPT.

• 9.5 Further Training Courses and Changes to Training Programs: Franchisee and its staff members and Sales Advisors must also attend additional training courses in accordance with the ENGEL & VÖLKERS training program applying at any given time.

Franchisor may also develop training programs that only apply to certain Franchisees and such Franchisees' Sales Advisors or staff members.

Franchisor and Franchisee acknowledge that the ENGEL & VÖLKERS System will change over time and that both training requirements and mandatory and optional training offerings may change.

Neither Franchisor, nor any affiliate of Franchisor, is required to maintain any of the training programs described in this Agreement and may develop new mandatory and optional programs.

• 9.6 Costs: All costs for all persons to attend the training courses, including travel, accommodation, food and out-of-pocket expenses, including salaries or other compensation of staff membersor Sales Advisors, will be borne by Franchisee.

• 9.7 On-Site Training: If Franchisee requests that training be conducted at Franchisee's Approved Location, and Franchisor agrees to provide training at such location, Franchisee must pay the trainers' expenses for travel, accommodation, food and other out-of-pocket expenses.

6. General Obligations of Franchisee

• 6.2 Personnel: Franchisee hereby agrees to employ only qualified personnel with background, experience and credentials customary under best practices and standards in the real estate brokerage industry. Franchisee and, if an entity, at least one of its officers, partners and/or managers, must be licensed as a real estate broker, and every employee, contractor, or Sales Advisor who is involved in real estate activities for Franchisee shall have a real estate broker, salesperson or other appropriate license, if and as required by applicable law, rules or regulations. These employees, contractors, and Sales Advisors must have attended an appropriate training course conducted by Franchisor and have passed related tests.

• 5.1 Services: Franchisor will provide the following services to Franchisee under this Agreement:

• 5.1.2 Training courses for Franchisee in accordance with Section 9;

Source: Item 22 — CONTRACTS (FDD page 88)