h contractual splits and rates and in accordance with industry norms.

2.2 Acknowledgments. This Agreement is subject to the following conditions:

• (a) The Business shall offer and provide only the services, and be identified only by Marks, we authorize;

• (b) The Marks are our exclusive and valuable property. You have no right, ownership or other interest in or to any of the Marks except the qualified license to use them in strict conformity with this Agreement;

• (c) We may change the System and the Marks periodically, and when we do, you must promptly conform the Business to the revised requirements, at your cost;

• (d) You shall not directly or indirectly sublicense, delegate or transfer any of the rights licensed by this Agreement except in accordance with Article 9;

• (e) We and our affiliates may conduct various business activities, including residential and commercial real estate brokerage businesses; and

• (f) You acknowledge that the System was developed by us at considerable expense and investment and that your operation of a "Counselor" franchise is possible only with our assistance and ongoing advisory services. You agree that the disclosure or unauthorized or improper use of the System may cause Counselor or other franchisees irreparable harm, and you agree not to engage in such practices.

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.

4. TRADEMARK STANDARDS.

• 4.1 Name. You may not use the Marks as part of your corporate or business name without our consent. Your use of the Marks inures to our benefit. We own all goodwill now or hereafter associated with each of the Marks. You will not contest our ownership or registration of the Marks.
• 4.2 Usage. You must reproduce and use the Marks only in the precise manner, colors and form we prescribe, and only in association with products and services we authorize.
• 4.3 Franchisor Profits. Counselor also reserves the right to receive fees periodically for rights licensed or services provided to others.

5. FEES.

• 5.1 Initial Franchise Fee. We acknowledge receipt from you of an Initial Franchise Fee in the amount of $____________. Except as provided in Section 1.2, the Initial Franchise Fee is nonrefundable.

• 5.2 Base Monthly Fee. You must pay us a Base Monthly Fee of $371. At the beginning of each month, we will send you an invoice for the Base Monthly Fee, and you must pay us that fee on or before the 20th day of such month.

• 5.3 Continuing Agent Fees.

Source: Item 22 — CONTRACTS (FDD page 32)