What other fees and payments are Best In Class Education Center franchisees obligated to pay?

e. On each royalty fee due date, you agree to pay LBIS (or us, if we so instruct) a BCP-LMS Monthly Fee, which is calculated as the sum of: (i) 2% of the Gross Sales minus Enrichment Sales; (ii) 1% of Special Program Sales; and (iii) Monthly Student User Fees (calculated in accordance with §14.3(c) below).

• (c) Monthly Student User Fees. "Monthly Student User Fees" are calculated by multiplying a "base fee" (as set forth in the Manual) by the total number of subjects taken by students enrolled at your Center as of the last day of the immediately preceding month. The base fee is currently $8 per student per subject per month (Mathematics, English and STEM are each considered a separate "subject"); provided, however, that: (i) we may increase the base fee, not more than once per calendar year, upon at least 90 days' prior notice; (ii) the maximum annual increase to the base fee is $2 per student per subject per month; (iii) the maximum base fee that we may charge at any point during the Term is $15 per student per subject per month; and (iv) if you are a renewing franchisee who operates a Legacy Center (as defined below), your initial base fee will be $4 per student per subject per month but will increase by $1 each January 31st until it equals the standard base fee charged to new franchisees. Monthly Student User Fees applicable during the first and/or last month of the Term may be prorated if the first and/or last month of the Term are less than a full calendar month. If the number of subjects taken by a student changes during the course of a month, then you must pay the Monthly Student User Fee based on the total number of subjects taken by the student during the month, regardless of how many subjects are taken by the student at any given point in time during the month. For purposes of this section, a "Legacy Center" refers to a Center owned by a renewing franchisee who: (i) purchased the Center from our predecessor, Best In Class Education Center, LLC; (ii) did not sign a Remote Learning Participation Addendum with Best In Class E-Academy, LLC; and (c) elects to continue to acquire and obtain educational materials from LBIS through the BC Portal without utilization of LMS.
• 14.4. Other Fees and Payments. You agree to pay all other fees, expense reimbursements and other amounts specified in this Agreement in a timely manner as if fully set forth in this §14. You also agree to promptly pay us an amount equal to all taxes levied or assessed against us based on goods or services you sell or goods or services we furnish to you (other than income taxes we pay based on amounts you pay us under this Agreement).
• 14.5. Due Date & Late Fee. Payments are due 10 days after invoicing unless otherwise specified. If any sum due under this Agreement is not received by us when due or there are insufficient funds in your Account to cover the sum when due, then in addition to this sum you must pay us $100 plus default interest on the amount past due at a rate equal to the lesser of 15% per annum (pro-rated on a daily basis) or the highest rate permitted by applicable Law. We will not impose a late fee for any amount paid pursuant to §14.6 if, but only to the extent that, sufficient funds were available in your Account to be applied towards the payment when due; provided, however, that if we are unable to determine the amount due because you fail to record sales or submit Gross Sales reports in a timely manner, we may assess a late fee on the entire amount that was due. This §14.5 shall not constitute our agreement to accept late payments or extend credit to you. All fees and payments are nonrefundable unless otherwise noted.
• 14.6. Method of Payment. No later than 15 days after the Effective Date, you must send us a completed and fully executed ACH Agreement authorizing us to electronically debit your designated Account for all amounts owed to us and our affiliates on the applicable due date (other than fees due within 15 days after the Effective Date). You must sign all other documents required by us or your bank to enable us to debit your Account for amounts owed. You must deposit all revenues you generate into the Account and ensure sufficient funds are available for withdrawal before each payment due date. If there are insufficient funds in your Account, any excess amounts you owe will be payable upon demand, together with any late charge imposed pursuant to §14.5. We may also impose a $50 NSF fee for each instance where either: (a) there are insufficient funds in your Account to cover amounts owed when due; or (b) a check you issue to us is returned due to insufficient funds.

15. BRAND PROTECTION COVENANTS.

15.1. Reason for Covenants. The Intellectual Property, training and assistance we provide would not be acquired except through implementation of this Agreement. You agree that competition by you, the Owners or Persons associated with you or the Owners (including family members) could seriously

• jeopardize our franchise system because you and the Owners receive an advantage through knowledge of our day-to-day operations and Know-how. You and the Owners agree to comply with the covenants in §15 to protect the Intellectual Property and our franchise system.
• **15.2.

Source: Item 23 — RECEIPT (FDD pages 47–204)