What is the 'Sublicense Agreement' in relation to the Epcon Communities franchise?

e each desire to acknowledge that Franchisor is intended to be a third | | | | party beneficiary of this Sublicense Agreement. | | | | Agreement | | | | | | | | | | | NOW, THEREFORE, in consideration of the foregoing, of the agreements, terms and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Franchisee and Sublicensee hereby agree as follows, each intending to be legally bound hereby:

• 1. Grant of Sublicense. Franchisee hereby expressly grants to Sublicensee a limited, nontransferable and royalty free sublicense to use the Development System, Epcon Communities Works and the Marks solely in connection with the development and marketing of an Epcon Communities project pursuant to a Market Area Agreement to be executed by and between Sublicensee and Franchisor and subject to the terms and conditions set forth in the Franchise Agreement and this Sublicense Agreement. Compliance with all terms and conditions of this Sublicense Agreement, is a strict condition precedent to this sublicense. This sublicense shall not include the grant of rights to, or the imposition of obligations upon, Franchisee provided under Sections 3.4 or 4.1 of the Franchise Agreement. Article 21 of the Franchise Agreement shall not be included in the sublicense hereunder. The Franchise Agreement shall remain in full force and effect subsequent to execution of this Sublicense Agreement. Notwithstanding the foregoing, this Section 1 shall not prevent the Sublicensee from using those materials provided by Franchisor to Franchisee pursuant to Section 4.1 of the Franchise Agreement.
• 1. Acceptance of Sublicense and Assumption of the Obligations. Sublicensee hereby accepts the sublicense described in Section 1 hereof and, as of the date hereof, assumes, and agrees to be bound by, all of Franchisee's obligations under the Franchise Agreement and any related agreements as such obligations relate to the Epcon Communities project developed by Sublicensee.
• 1. Term. Except as provided in Section 5 of this Sublicense Agreement, the sublicense granted pursuant to Section 1 of this Sublicense Agreement shall remain in full force and effect until the earlier of (a) the date of the sale of the last unit of Sublicensee's Epcon Communities project (b) the date that is one year after the completion of construction (as defined by Section 11.1 of the Franchise Agreement) of the last unit of Sublicensee's Epcon Communities project or (c) the date of the termination of the Franchise Agreement (the "Term").

• 1. Ownership of Development System, Epcon Communities Works and Marks. Sublicensee acknowledges Franchisor's sole and exclusive rights in and to the Development System, Epcon Communities Works and the Marks, and Sublicensee agrees that it will do nothing inconsistent with such rights and interests and that all use of the Development System, Epcon Communities Works and the Marks by Sublicensee shall inure to the benefit of and be on behalf of Franchisor. If requested by Franchisor or Franchisee, Sublicensee agrees to assist Franchisor in recording this Sublicense Agreement with the appropriate governmental authorities. Sublicensee agrees that nothing in this Sublicense Agreement shall give Sublicensee any right, title or interest in any of the Development System, Epcon Communities Works or the Marks other than the right to use the Development System, Epcon Communities Works and the Marks in accordance with this Sublicense Agreement, and Sublicensee agrees that it will not attack the title of Franchisor to the Development System, Epcon Communities Works or the Marks or attack the validity of the Franchise Agreement or validity of the sublicense granted pursuant to this Sublicense Agreement. Sublicensee acknowledges and agrees that its strict compliance with the provisions of this Sublicense Agreement is a condition precedent to its sublicense to utilize the Epcon Communities Works, and as such any use of such works in violation of any of these provisions is unauthorized and will be acts of copyright infringement.
• 1. Termination. This Sublicense Agreement may be terminated in compliance with Article 13 of the Franchise Agreement. Upon the effective date of any termination of this Sublicense Agreement and, in any event, upon expiration of the Term, Sublicensee shall, immediately upon the effective date of such termination or the expiration of the Term, as the case may be, discontinue all use of the Development System, Epcon Communities Works and the Marks and any terms or logos confusingly similar thereto, shall cooperate with Franchisor and Franchisee or their appointed agents in applying to the appropriate governmental authorities to cancel recording of this Sublicense Agreement from all government records and shall destroy all existing inventory of materials and all advertising, promotional and other printed materials bearing the Marks.
• 1. Infringement Actions. Sublicensee shall notify Franchisee and Franchisor of any unauthorized use of the Development System, Epcon Communities Works or the Marks by third parties promptly as it comes to Sublicensee's attention. Franchisor shall have the sole and exclusive right and discretion to bring infringement or unfair competition proceedings involving the Development System, Epcon Communities Works or the Marks.
• 1. ACKNOWLEDGMENT OF EXISTENCE OF THIRD-PARTY BENEFICIARY OF THIS AGREEMENT, EPCON COMMUNITIES FRANCHISING, LLC. FRANCHISEE AND SUBLICENSEE ACKNOWLEDGE AND AGREE THAT EACH CONTEMPLATES AND INTENDS THAT: (A) THIS AGREEMENT AND ITS SPECIFIC PROVISIONS ARE INTENDED DIRECTLY AND PRIMARILY TO BENEFIT FRANCHISOR, AND FRANCHISOR IS INTENDED TO BE, AND SHALL BE, A THIRD-PARTY BENEFICIARY OF THIS AGREEMENT; (B) SUBLICENSEE, IN EXECUTING THIS AGREEMENT, SHALL ASSUME A DIRECT OBLIGATION TO FRANCHISOR, AS SUCH THIRD-PARTY BENEFICIARY, TO PERFORM CERTAIN OF FRANCHISEE'S OBLIGATIONS UNDER THE FRANCHISE AGREEMENT; AND (C) FRANCHISOR, AS SUCH THIRD-PARTY BENEFICIARY, SHALL BE CONFERRED WITH THE RIGHTS, IN ITS SOLE DISCRETION, TO ITSELF TAKE ANY ACTION OR PURSUE ANY REMEDY THAT IT DEEMS NECESSARY IN ORDER TO ENFORCE THE PROVISIONS HEREOF OR OF THE FRANCHISE AGREEMENT AND TO WHICH IT WOULD BE ENTITLED AS A PARTY ENFORCING THIS AGREEMENT. FRANCHISOR SHALL BE ENTITLED TO ANY REMEDIES AVAILABLE AT LAW, IN EQUITY, OR PROVIDED IN THE FRANCHISE AGREEMENT FOR ANY BREACH BY SUBLICENSEE OF ANY PROVISION HEREOF OR OF ANY MARKET AREA AGREEMENT.
• 1. Representations and Warranties; Covenants. Sublicensee represents and warrants that, as of the date hereof, the information set forth on Exhibit "B" attached hereto is true and accurate. Sublicensee shall join as an obligor of any obligations of Franchisee in favor of Franchisor by execution of any documents requested by Franchisor, and Sublicensee shall promptly deliver any mortgages, security agreements or other security instruments requested by Franchisor.
• 1. Indemnification. Sublicensee shall at all times (notwithstanding the termination or expiration of this Sublicense Agreement) indemnify Franchisee and Franchisor and any of their respective officers, agents, employees or representatives against any and all claims, demands, actions, liabilities, damages, costs or expenses (including reasonable attorneys' fees) arising out of Sublicensee's development and marketing of an Epcon Communities project or the sale or advertisement of condominiums under the Marks.

10. Miscellaneous.

A. Notices. All notices and other communications required or permitted to be given pursuant to this Sublicense Agreement shall be given in writing and shall be deemed to have been given if delivered by hand or by certified mail, postage prepaid, or by telecopier or telex (with a hard copy to be sent within forty-eight (48) hours

following such electronic transmissions), or by any commercially reasonable overnight courier service providing a receipt of delivery, effective upon receipt thereof at the addresses set forth in the first paragraph hereof. Any party to this Sublicense Agreement may, by notice given in accordance with this Section 10.A., designate a new address for notices and other communications to such party.

• B. Duplicate Originals. This Sublicense Agreement may be executed in one or more counterparts, each of which shall be deemed to be a duplicate original, but all of which, when taken together, shall be deemed to constitute a single instrument.
• C. Successors and Assigns. The sublicense granted to Sublicensee hereunder shall be personal to Sublicensee and may not be assigned or sublicensed by Sublicensee to any other party without the prior written consent of Franchisee and Franchisor. Notwithstanding the foregoing, this Sublicense Agreement shall inure to the benefit of and be binding upon the respective successors and assigns (including successive, as well as immediate, successors and assigns) of the parties hereto.
• D. Captions. The captions in this Sublicense Agreement are included for convenience of reference only and do not define, limit, explain or modify this Sublicense Agreement or its interpretation, construction or meaning and are in no way to be construed as a part of this Sublicense Agreement.
• E. Amendments, Changes and Modifications. This Sublicense Agreement may be amended, changed or modified only in a writing executed by each of the parties hereto.
• F. Waiver.

Source: Item 23 — RECEIPTS (FDD pages 86–280)