[Item 22: CONTRACTS]

3. TERM.

• 3.1 Term. The initial term of this Agreement begins on the Effective Date of this Agreement and ends five years from the Effective Date.
• 3.2 Successor Franchise. If you apply in writing between 60 and 180 days before expiration of the initial term and are not in breach of this Agreement (or any related agreement) at the expiration of the initial term, you may acquire a single successor franchise for five years, using the form of Counselor Franchise Agreement we are then using (which may differ from this Agreement), but without further renewal. Your Franchise Agreement for the successor term, if any, will include a new minimum Office sales agent requirement schedule negotiated by you and Counselor. Upon renewal of your franchise and during the successor term, if any, (i) your Territory may be altered if the population in your Territory has increased to exceed the maximum population then allowed by Counselor for a single franchise territory or if you failed to maintain the minimum number of agents during the prior term, and (ii) you must pay all fees in the amount then being charged by Counselor for new franchises. You also must first complete reasonable upgrading and refurbishment of your Office (including any Additional Offices and Extension Offices, if applicable) to then-current System standards.

12. TERMINATION CONSEQUENCES.

Upon termination or expiration of this Agreement, all rights licensed herein, and your interest herein, revert to Counselor automatically, and you must immediately:

• (a) stop using the Marks and System, any materials containing or depicting the Marks or System, and any other name or mark confusingly similar to the Marks, including domain names;
  • (b) pay all sums due to Counselor or its affiliates or which we have guaranteed;
• (c) return the Franchise Policy Guidelines and all other confidential or trade secret information to us, and stop using distinctive, proprietary or confidential items, methods or other techniques, systems or know-how we disclosed to you. Counselor or its affiliate may access and remove any confidential or proprietary information and materials, either at the Office (including any Additional Office and Extension Office) or remotely by electronic means ; and
• (d) remove all distinctive inventory, trade dress, and leasehold improvements to eliminate any similarity in design, structure, signage, trade dress, decor, color or layout to the distinctive appearance of other Counselor businesses.

1.2 Site Selection. You must select a site for your Office within 180 days after you sign this Agreement. After you notify us of a proposed site for your Office, we will have 30 days to review the site and to notify you whether or not we consent to your operation of the Business at that site. If we reject the site you propose, you will have an additional 60 days to locate a site that is acceptable to us. If you fail to do so, this Agreement will automatically terminate and we will refund your Initial Franchise Fee, less our expenses associated with reviewing the proposed site(s). After we consent to an Office site you propose (if at all), you must open your Business at that site within six months. If you fail to do so, this Agreement will automatically terminate and your Initial Franchise Fee will not be refunded. We may, in our sole discretion, grant extensions of the deadlines described above. Our consent to a site is not a guarantee or assurance as to the availability, suitability or prospects of an Office or Business.

1.3 Territory.

• (a) While this Agreement is in effect, as long as you satisfy and maintain the minimum Office sales agent requirements set forth in Exhibit A to this Franchise Agreement, we will not ourselves establish or operate a "Counselor" office, or license another to establish or operate a "Counselor" office within the Territory.

However, both we and other "Counselor" licensees may enter into, and provide residential and commercial real estate brokerage services within, the Territory; we do not grant you any exclusive right to operate a "Counselor" business in the Territory.

If you fail to satisfy and maintain the minimum required number of agents in the Office on an ongoing basis, you may lose the exclusive right to operate a "Counselor" office in the Territory, your territory may be altered (as determined by Counselor in its sole discretion), or Counselor may terminate the Franchise Agreement.

Source: Item 22 — CONTRACTS (FDD page 32)