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Interest'
COIILpulter Maintenance Fee3
Training Fees -Training
Employees'
Commission Revenue Royalty of
10% of all commission revenue
("Commission Revenue"), as defined
in our Methods of Operation (a
defined in Note 1), per Accounting
(as defmed in Note 1). In the
that you achieve 500 net
monthly cellular/wireless activations
any Accounting Period, the royalty
all Commission Revenue in that
A,counting Period will be reduced to
Monthly within 10 days following
close of Accounting Period.
Royalty is paid
Day Fee' Per day fees and charges as we As incurred
establish
.:..ns Manual Replacement $1 per page When rePlacement pages are
;
delivered to you
to exceed the greater of 5% of When the Royalty is paid
Revenue or $1,250
Advertising' As incurred
Ongoing Inventory' of Ongoing Inventory
Insurance10 of insurance and, if not obtained required and as incurred.
you, our procurement expense
Auditing Costs
I I
Cost of Audit
$10,000 of tansfer
Successor Franchise Fee13 50% of the then-current initial fee of successor
Cost of Liability As incurred
and Attorey's Feesls Costs of collection and attoreys' fees As incurred
for approval of supplier and Our actual cost of evaluations When incurred
testing of samples of itemsl'
Relocation 17 out-of-pocket expenses As incurred
Notes:
W309951.2 6
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During the term of the Ageement, you must pay a non-refndable royalty ("Royalty") for
each calendar month (the "Accounting Period") in the amount of 10% of all commission revenue
(the "Commission Revenue"), per Accounting Period. In the event you achieve 500 or more net
monthly cellular/wireless activations, as defned in our mandatory and suggested specifcations,
standards, operating procedure and rules we desigate in the Operations Manual ("Methods of
Operation"), in any Accounting Period, the Royalty on all Commission Revenue will be reduced
for such Accounting Period to 6%. In addition to the Royalty you pay to us on a Commission
Revenue, you must pay 5% of Gross Revenue per Accounting Period.
As used in this ofering circular, the term "Gross Revenue" means all revenue you derive
fom operating the @WIRELESS Store, including all amounts you receive for merchandise,
goods or services sold at or away from the approved location of the @WlRELESS Store
desigated in the Franchise Agreement ("Approved Location"), and whether fom cash, check or
credit transactions, but excluding all revenue you derive fom the sale of promotional equipment
as defined in our Operations Manual, all payments (including as security deposits and bill
payments) received for wireless communication service providers ("Communication Carrier
Companies"), all federal, state or municipal sales, use or service taxes collected fom customers
and paid to the appropriate taxing authority and excluding customer refnds, adjustments, credits
and allowances actually made by the @WIRELESS Store in compliance with our Methods of
Operation.
If the Commission Revenue we receive on your behalf in any Accounting Period is an
amount insuficient to cover the Royalty and any other amounts due to us or our afliates under
the Franchise Agreement, you will pay us immediately the Royalty and any other amounts due to
us or oUr afliates under the Franchise Ageement, by check through U.S. mail or bank-wire
transfer, as we determine, afer you receive notice from us of such outstanding amounts due to us
or our afiliates.
2
All amounts which you owe us or our affliates under the Franchise Agreement and do not
pay us or our afliates when due will bear interest afer their due date at the highest contract rate
of interest permitted by law.
You must pay us a non-refndable ongoing computer maintenance fee ("Computer
Maintenance Fee") at our then-current rate as specifed in our Methods of Operations (as defned
in Item 14 of this offering circular), for our ongoing support and maintenance of the proprietary
point of sale computer system you are required to use in operating the @WIRELESS Store.
4
For periodic refresher training courses conducted by us or our Agent, you are responsible for
reasonable fees that we may charge for these courses. You may also be responsible for fees for
training of your new employees hired afer your @WIRELESS Store opens for business, if
you so request.
We or our Agent will frish additional guidance and assistance and may charge the per diem
fees and charges we establish fom time to time. If you request, or if we require, additional or
special training for your employees, all of the expenses that we or our Agent incur in connection
with this training, including per diem charges and travel and living expenses for our personnel,
will be your responsibility.
W309951.2 7
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10
If your copy of the Operations Manual is lost, destroyed, or significantly damaged, you agee
to obtain a replacement copy at our then applicable charge.
You agee to contribute to the @WlRELESS advertising fnd (the "Advertising Fund")
amounts that we designate, not to exceed the geater of 5% of Gross Revenue or $1,250 (the "Ad
Fee"). In the event that the combined Eaed Co-Operative Advertising Funds (defined in Item
11 of this ofering circular) and the Commission Revenue is in an amount insufcient to pay
your required contribution to the Advertising Fund during any Accounting Period, you must pay
us the Ad Fee, by check through United States Mail, bank-wire transfer, or it will be debited
fom eaed commissions, as we deterine, within 7 business days afer you receive notice fom
us of such outstanding amounts due to us.
You must spend annually for advertising and promotion of the @WIRELESS Store at
least I% of Gross Revenue. If you elect to list and advertise the @WlRELESS Store in the
principal regular (white pages) and classified (yellow pages) telephone directories covering the
area in which the @WIRELESS Store is located, the costs of your telephone directory
advertising will not be credited toward this advertising and promotion obligation.
You must purchase your ongoing inventory of cellular phones, accessories, wireless cable
units, pre-merchandising materials and other equipment, products or items as we desigate in the
Operations Manual or otherwise in writing fom us or our desigee (which may be our affliate).
If you fail to pay us or our afliates for purchases required by the Franchise Ageement, we and
our afliates have the right, among other remedies, to withhold shipment to you of inventory or
any other product which we are providing to you under the Franchise Ageement. You agee to
assume all responsibility, risk of loss, and bear all costs, including insurance and tansportation,
once the equipment, products and items leave the shipping party's place of business, even though
we may make shipping and related arrangements for shipping to you.
You must obtain the types, amounts, terms and conditions of insurance coverage required to
be carried for the @WIRELESS Store and standards for underwriters of policies providing
required insurance coverage. If you fail to obtain required coverage, we have the right to obtain
insurance coverage for the @WlRELESS Store at your expense.
"
We, our Agent, and other designated agents will have the right during normal working hours
to inspect, examine and copy, at our expense, your books, records, accounts and tax returs with
respect to the @WIRELESS Store. We will also have the right, at any time, to have an
independent audit made of your books. If an inspection should disclose your underreporting on
any Gross Revenue Report or any other report or the underpayment of any Royalty fee or
advertising fee payable under the Franchise Agreement, you must immediately pay to us the
amount underreported and/or underpaid, in addition to interest fom the date this amount was due
until paid. In addition, if (a) the underreporting and/or underpayment exceeds two percent of the
total Royalty fee or advertising fee payable for any period covered under the audit, or (b)
inspection or audit is made necessary by your failure to frish reports, supporting records or
other information as required, or to fish these items on a timely basis, you agree to reimburse
us for the reasonable cost of this inspection or audit, including the charges of attoreys and
independent accountants and the travel expenses, room and board and compensation of our
employees. These remedies will be in addition to our other remedies and rights under the
Franchise Ageement and applicable law.
W309951.2 8
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