TO: NEW UNITED COUNTRY FRANCHISEE FROM: LEGAL DEPARTMENT SUBJECT: ERRORS & OMISSIONS INSURANCE. Dear Franchisee:

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1 TO: NEW UNITED COUNTRY FRANCHISEE FROM: LEGAL DEPARTMENT SUBJECT: ERRORS & OMISSIONS INSURANCE Dear Franchisee: This letter and enclosed material are being sent to you in order to extend an opportunity which will allow you to be included in the United Country/Arch Specialty Insurance Group E&O policy. Our E&O program is with one of the top rated companies in the industry Arch Specialty Insurance Company. A copy of the policy is enclosed along with an enrollment form. In excess of twothirds of United Country's affiliates are now members of the Group. It offers limits of $2,000, per occurrence and an annual group aggregate of $6,000,000.00, with a retainer of $2, The yearly rate for coverage against an annual renewal date of February 1st is $ per licensee at each office. If enrolling after September 1, 2016, the premium is $ for coverage through the policy period ending January 31, If enrolling in January 2017, there is no premium owed for the remainder of the policy period ending January 31, Coverage for professional services include: A. Services as a real estate agent, real estate broker or real estate personal assistant; B. Services as an escrow agent, title agent, title abstractor, leasing agent, mortgage broker, real estate auctioneer and real estate appraiser; C. Property management services; D. Services as a real estate consultant or counselor or as an expert witness provided such services are limited to the areas specified in paragraphs A through C; E. Services as a notary public or member of a formal real estate accreditation standards review or similar real estate board or committee. F. Environmental hazards coverage for claims arising from the failure to advise of the existence of pollutants, asbestos, lead or radon (with sublimits of $1,000,000.00/ $1,000,000.00). G. Discrimination coverage. H. Supplementary payments for loss of earnings and licensing board complaints. I. Defense costs in addition to the limit of liability. J. Special coverages include renovation services and lockbox coverage with an aggregate of $250, K. Retiring firms on policy at time of retirement will have continuous coverage as long as United Country has a group policy through Arch Insurance. L. Auctioneering coverage for both real property and personal property. Includes fine arts that have a rare or historical value, collectibles including classic or antique automobiles, jewelry or precious stones or metals, and livestock (with sublimits of $100,000.00/ $500, ) M. Cyber coverage (with sublimits of $100,000.00/ $1,000, ) As an affiliate of United Country, you are required to enroll in the "company endorsed" program, unless your office is located in Colorado, Idaho, Kentucky, Louisiana, Mississippi, Nebraska, New Mexico, North Dakota, South Dakota or Tennessee. If you are licensed in any of these states, be

2 aware that the policy will not meet the state real estate commission requirements, although any real estate transactions made in those states would be covered under the policy. However, coverage will need to be obtained by you that meets those individual state requirements. Such coverage is readily available through the Real Estate Commissions web sites in the various states. We will continue to work on our endeavor to someday be able to provide coverage that will meet all states requirements, but we unable to obtain such a policy this year at an affordable premium. Enclosed you will find an enrollment form which includes spaces to list all licensees. Remember, there is no such thing as a part time associate. Any licensees you are holding must be covered. We suggest, and most brokers agree, that you pass the cost of E&O coverage on to each licensee. Your total office premium is based on the number of licensees in your office on the date of application. There are no refunds if associates leave your office during the year, however, there are no added premiums for associates that join your firm after the inception of your policy coverage. Also, you need to be aware that if you yourself leave the United Country system during the policy year, you will no longer be covered under the policy and there will be no prorated refunds given. Please be advised that this group E&O coverage is for your United Country business only, not for any other businesses in which you might have an ownership interest. Coverage for auxiliary services such as appraisals, property management, mortgage brokering, auctioning, etc. as described above is only provided if such activities are offered to the public as a United Country service. Again, if such activities are done under a separate business entity, they are not covered under the United Country group policy. If you desire coverage for a separate business entity, you will need to secure that on your own. We're pleased to make this coverage available and consider it a valuable benefit to your United Country affiliation. If you have any questions, please give me a call. Sincerely, /lr Enclosures Linda Richardson Legal Department

3 ARCH SPECIALITY INSURANCE COMPANY E&O POLICY Application For New United Country Affiliates Added During Policy Period 1. Affiliate s Name Name of Firm Street City State Zip Telephone ( ) FAX ( ) 2. Total Number of Licensees In Firm To Be Insured Please List Names of Each Licensee Including Yourself: 3. YOUR INCOME Real Estate Activities: Show all income, fees and commissions BEFORE split with brokers or salespeople or deduction of expenses. Past Fiscal Year Next 12 Months Ending / / (Estimated) A. Residential Real Estate Sales $ $ B. Farm and/or Ranch Sales $ $ C. Vacant Land $ $ D. Commercial, Industrial and/or Income Property Sales $ $ E. Real Estate Appraisals $ $ F. Property Management Fees (non-owner) $ $ G. Real Estate Leasing Fees $ $ H. Other (Describe) $ $ Total Gross Income $ $ Do you sell real estate at auctions? If so, what percentage of your revenue is derived from auctioning real estate? 4. PREVIOUS COVERAGE Please provide proof of prior Real Estate Agents Errors and Omissions Liability Insurance by attaching a declaration page or other proof. If no past coverage, indicate NONE here

4 5. LOSS HISTORY Have any of the licensees in your firm been involved in any claim or suit during the past 6 years? If the answer is yes, please complete the following: Name of Individual Involved in Claim Name of Person or Company Bringing Claim Date of Alleged Error Date of Claim Name of Insurer Present Status of Claim (Pending, Closed or In Suit) If Closed, Total Loss Paid $ If Pending, Amount Asked in Summons or Claimant s Demand $ Please provide description of Claim and Events and Allegations upon which Claimant brings Claim: Please copy the above form to report any additional claims. 6. PAYMENT Please include the premium payment of $ per licensee made payable to United Country Real Estate or a VISA, MasterCard, Discover or American Express charge authorization. If enrolling after September 1, 2016, the premium is $ for coverage through the policy period ending January 31, If enrolling in January 2017, there is no premium owed for the remainder of the policy period ending January 31, ( ) Check enclosed made payable to United Country Real Estate for the full premium ( ) Charge my credit card for the full premium. Credit Card Type (Visa, MasterCard, American Express, Discover) Charge Card Number Expiration Date Billing Address of Credit Card Security Code on Card (3 digits on the back of a Master Card or a VISA card, or 4 digits on the front of an American Express card. There is no security code on a Discover card) Signed Credit Card Authorization

5 7. CERTIFICATION I hereby certify that the information provided on this Application For E&O Insurance is correct to the best of my knowledge. Signature of United Country Affiliate Date