What is the source of income for a Christies International Real Estate franchisee?

territorial policies that we establish or modify from time to time. You may not establish or operate any CHRISTIE'S INTERNATIONAL REAL ESTATE office outside the Protected Territory, unless we permit you to do so under a separate broker Affiliate license agreement. You may not subfranchise or sublicense any of your rights under this Agreement.

• 1.2.1 Subject to Section 1.2.2 below, we and our affiliates, and our and their respective licensees, franchisees, and Affiliates, as well as our agents and the agents of any of these parties, have the right (without compensation to you) to offer and sell real estate brokerage services under the Marks to clients located within the Protected Territory and for real estate located within the Protected Territory, as long as the real estate brokerage services are offered and sold from offices of CHRISTIE'S INTERNATIONAL REAL ESTATE businesses outside of the Protected Territory. In turn, and also subject to Section 1.2.2 below, you and your agents have the right to offer and sell real estate brokerage services under the Marks to clients located outside the Protected Territory and for real estate located outside the Protected Territory but only inside the United States (including Puerto Rico, the U.S. Virgin Islands, and other U.S. territories), as its borders exist on the Effective Date, so long as the real estate brokerage services are offered and sold from the Main Office and any authorized Additional Office. However, you acknowledge and agree: (1) that your rights outside your Protected Territory may be limited based on territorial grants or protections that we or our affiliates have granted to other Affiliates or other third parties, and (2) that the scope of your rights outside of your Protected Territory may be modified by us from time to time, and are subject to the territorial policies that we establish or modify from time to time in the Operations Manual.

• 1.2.2. If you and your agents are licensed, as prescribed by law, to provide real estate brokerage services in an area where another licensee, franchisee or Affiliate has been granted a protected territory by us ("Other Area") but their grant does not prevent others from offering real estate brokerage services under the Marks in the Other Area, so long as you do not exceed 5% of your inventory (as measured by the number of properties) at any given time, you may list properties for sale using the Marks in the Other Area so long as they are listed from your Main Office or Additional Office. If your properties listed in the Other Area exceeds 5% of your inventory and, upon notice from us, you do not cease such listings promptly, you will be in default, and we can terminate the Agreement. Conversely, to the extent another licensee, franchisee, Affiliate, or its agents, are licensed as prescribed by law, to provide real estate brokerage services in your Protected Territory, we will use commercially reasonable efforts to limit such party from listing more than 5% of its inventory of properties using the Marks in your Protected Territory, assuming such party has not been granted unlimited rights by us. However, we have no obligation to enforce this provision against such other parties.

• 1.2.3 Except for the limitations described in this Section, you acknowledge and agree that you do not have any right to exclude, control or impose conditions on our development of future licensed, franchised, company or affiliate-owned CHRISTIE'S INTERNATIONAL REAL ESTATE businesses, or other company owned businesses at any time or at any location.

• 1.3. Rights Reserved to Us. We reserve (for ourselves and our affiliates) reserve all rights to engage in all activities associated with CHRISTIES INTERNATIONAL REAL ESTATE Marks, and all rights to engage in any business, licensing, franchising, or other activities associated with other brands, marks, and real estate brokerage systems, anywhere in the world, not specifically granted to you under this Agreement or expressly prohibited under this Agreement, or expressly prohibited from us engaging in under this Agreement. Without limiting the preceding sentence, we (for ourselves and our affiliates) specifically reserve the right, from any location at any time, without any compensation to you or any other Affiliate and regardless of whether it competes with the Business, the following rights:

• (a) To own and operate, and grant licenses or franchises to others to own and operate, CHRISTIE'S INTERNATIONAL REAL ESTATE offices outside of the Protected Territory;

• (b) To own and operate, and grant licenses or franchises to others to own and operate, any business of any kind (other than an office located within your Protected Territory selling the same services as a CHRISTIE'S INTERNATIONAL REAL ESTATE businesses) under the Marks at any locations within or outside of your Protected Territory, including by electronic means such as the Internet, applications, by websites we may establish, catalog sales, telemarketing, or other direct marketing sales;

• (c) To own and operate, and grant licenses or franchises to others to own and operate, any business of any kind, including a real estate business selling the same or similar services as CHRISTIE'S INTERNATIONAL REAL ESTATE businesses, under any names, trademarks, service marks, logos and other commercial symbols other than the Marks, regardless of where such businesses are located, including within the Protected Territory;

• (d) To merge with, acquire, be acquired by, or become associated with any businesses that are the same or similar to a CHRISTIE'S INTERNATIONAL REAL ESTATE businesses and operate or license others to operate such businesses regardless of where the businesses are located, including within the Protected Territory, and to be acquired by any third party that operates businesses that are the same or similar to CHRISTIE'S INTERNATIONAL REAL ESTATE businesses regardless of where such businesses are located, including within the Protected Territory;

• (e) to promote, sell, and distribute products, items, and other materials under the Marks or other trademarks through dissimilar channels of distribution (i.e., other than the operation of a CHRISTIE'S INTERNATIONAL REAL ESTATE office within the Protected Territory), including by electronic means such as the Internet, applications, by websites we may establish, catalog sales, telemarketing, or other direct marketing sales;

Source: Item 23 — RECEIPT (FDD pages 54–177)