What mandatory elements constitute the RE/MAX System that a franchisee must adhere to?

Standards Manual. The costs of such actions will vary depending on the circumstances. Moreover, if you open any Team Office(s) subsequent to renewal, then the items listed in the above chart will apply for each Team Office (see footnote 12 above).

Item 8

RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

You will be required to operate the Office according to the mandatory elements of the RE/MAX System. The RE/MAX System contains mandatory elements and recommended practices that exist as a resource for franchisees to control the manner and means of their independently owned and operated franchise businesses. In addition to compliance with all of the mandatory terms of the franchise agreement, you will be required to strictly adhere to the other mandatory elements of the RE/MAX System, as set forth in the most current edition of the RE/MAX Brand Identity: Trademark and Graphic Standards or its successor and any supplemental brand standards that may be provided to you by REMAX, LLC, which are designed to protect the RE/MAX Marks, the goodwill they reflect, and the reputation of the RE/MAX network and which may be amended from time to time (collectively, the "Brand Standards Manual").

To protect the RE/MAX Marks and to facilitate your compliance with certain communication and reporting requirements, mandatory elements of the System regulate, among other things, the use of the RE/MAX Marks in signs, letterhead, business cards and other promotional materials and the use of specific computer hardware and software. (Franchise Agreement, Section 3.) REMAX, LLC has the right to change these mandatory elements periodically to protect or enhance the RE/MAX Marks and associated goodwill, or the reputation of the RE/MAX network. These changes will be communicated to you in the Office Materials (see Franchise Agreement - Subsection 8.B.), the Brand Standards Manual, or in other written or electronic communications.

As of the Issuance Date of this disclosure document, there are no goods, services, supplies, fixtures, equipment, inventory, computer hardware and software or real estate relating to the Office's establishment or operation that you will be required to purchase, lease or license from REMAX, LLC, RE/MAX Regional, or a designated supplier, although RE/MAX Regional reserves the right to require that certain goods, services, supplies, fixtures, equipment, inventory, and computer hardware and software relating to the Office's establishment or operation be purchased exclusively from RE/MAX Regional, or to designate exclusive, specific suppliers for such products and services in the future. If items such as exterior real estate office signs, yard signs, stationery and business cards meet the minimum standards and specifications set forth in the Brand Standards Manual, they need not be purchased or leased from approved suppliers. REMAX, LLC does, however, maintain a list of approved suppliers from which these items may be

procured. REMAX, LLC does not assume any liability for the acts or omissions, or guarantee the performance, of any supplier, whether approved or not.

Approved Supplier Program

REMAX, LLC evaluates suppliers based on a number of criteria including length of time in business, financial resources, business credentials and their ability to provide services or products in accordance with minimum standards for delivery, performance, appearance and quality. Suppliers who wish to be included on REMAX, LLC's approved supplier list must submit an application package; however, as of the Issuance Date of this disclosure document, REMAX, LLC does not charge an application fee. REMAX, LLC will not unreasonably withhold its approval of a supplier and will typically grant or deny approval within approximately 6 months of REMAX, LLC's receipt of a fully completed application packet. Approved supplier status can be revoked at any time if the approved supplier breaches its agreement with REMAX, LLC. REMAX, LLC may limit the number of approved suppliers offering similar products or services.

REMAX, LLC and/or its affiliates may receive a flat fee, access fee, percentage or other consideration from approved suppliers as a result of their sale of products, services or supplies to franchisees and Sales Associates. Typically, approved suppliers pay REMAX, LLC a minimum of $20,000 (either via a flat annual access fee, a percentage of net annual sales (typically 3% to 10%), or a combination of both), although occasionally approved suppliers may pay a substantially higher flat fee or percentage fee.

REMAX, LLC has the right to receive these payments from approved suppliers on account of their dealings with you and other franchisees and to use the amounts it receives without restriction, for any purpose. REMAX, LLC has the right to modify these fees, rebates, percentages or other consideration in the future. Prices for products and services from approved suppliers are generally competitive due to REMAX, LLC's buying power.

David L. Liniger and Gail A. Liniger each own an interest in EDR Travel, Inc., an approved supplier of travel agency services. To the best of our knowledge, none of our other officers own a material interest in any other approved supplier (not counting minimal interests possibly owned through mutual funds).

Insurance

You will be required to obtain and maintain, at your expense, such insurance coverage that RE/MAX Regional requires from time to time and to meet the other insurance related obligations in the Franchise Agreement. This insurance must include, at a minimum, the following types of coverage:

• 1. Comprehensive general liability insurance insuring against claims for bodily and personal injury, and death and property damage, caused by or occurring in conjunction with the operation of the Office or otherwise in conjunction with the conduct of business, in the face amount of not less than $2,000,000 per occurrence or claim and annual aggregate. Coverage must also include broad form contractual liability, broad form property damage, personal and advertising injury, premises liability and products liability. You will also be required to secure endorsements covering each of your Sales Associates under such comprehensive general liability insurance policy or, in the alternative, you will be required to ensure that each Sales Associate secures comprehensive general liability insurance on his or her own behalf in the face amount of not less than $2,000,000 per occurrence and annual aggregate.
• 1. Real estate errors and omissions professional liability insurance in the face amount of not less than $1,000,000 per occurrence or claim and annual aggregate, with a retroactive date that pre-dates

the commencement of professional services. You will also be required to secure endorsements covering each of your Sales Associates under such errors and omissions policy or, in the alternative, you will be required to ensure that each Sales Associate secures real estate errors and omissions professional liability insurance in the face amount of not less than $2,000,000 per claim and annual aggregate.

1. Automobile liability insurance covering each vehicle titled or leased in your name or the name of the Franchise or any of its Owners and used at any time for the business of the Franchise.

Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 47–53)