When is the Boulder Designs Late Fee assessed?

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| Name of Fee | Amount1 | Due Date | Remarks | |---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|---------| | Royalty Fee2,4 | The greater of: (i) The percentage of Collected Gross Revenue in accordance with the following schedule: 7% of Gross Revenue Or (ii) The minimum monthly Royalty Fee in accordance with the following schedule: Year 1 - $750/month Year 2 - $950/ month Year 3 thru remainder of term $1,500/month | First day of each month | | | National Accounts Fee3 | 20% of Gross Revenues4 | On or around the first day of each month | | | Name of Fee | Amount1 | Due Date | Remarks | |-------------------------------------------|-----------------------------------------------------------------------------------------------------------|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Technology Fee5 | Currently $65 per month, but up to $175 per month. We reserve the right to increase each calendar year by an amount not to exceed 10% of the prior year's fee. | Monthly | For the development and use of online and System technology, including but not limited to internet, website, email, intranet/extranet, and communications technologies, some of which may be implemented in the future. | | Recommended Local Advertising Spend | 10% of Annual Gross Revenues | As invoiced | We highly recommend you spend a minimum of 10% of annual gross revenues on local advertising. After you have begun operations, by the 31st of January of each year, you must furnish us an accurate accounting of your expenditures on local advertising for the preceding one-year period regardless of the amount spent. | | Marketing Fee | Currently $0 per month | Monthly | We anticipate charging an amount no greater than $200 per month once implemented. We will provide you with prior notice before any increases in the monthly Marketing Fee are imposed. Once this fee is implemented the fee cap will increase each calendar year by an amount not to exceed 10% of the prior year's cap. | | Late Fees | $100 per incident | 11th day of each month | Applies to all overdue Royalty Fees, and other amounts due to us. Also applies to any understatement in amounts due revealed by an audit. Late fees will continue to accrue each month when balances due from previous months carry over into the current month. | | Insufficient Funds Fee | $100 per incident | Upon demand | Applies to all non-approved (ACH Debit) or returned payments made by you that do not fund or clear you bank for any reason whatsoever. | | Name of Fee | Amount1 | Due Date | Remarks | |------------------------------------|-------------------------------------------------------------------------------------------|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Audit Expenses | All costs and expenses associated with audit | Upon demand | Payable only if the audit shows an understatement in amounts due of 2% or more. | | Insurance Policies | Amount of unpaid premiums plus our reasonable expenses in obtaining the policies | Upon demand | Payable only if you fail to maintain required insurance coverage and we elect to obtain coverage for you. | | Transfer Fee | $7,500 | Time of transfer | Due when informing us of a transfer, which is not refundable. | | Non-ACH payment Convenience Fee | 4% of amount charged | When incurred | If you choose not to participate in the ACH (EFT) program for payment of monthly fees, a 4% convenience fee will be charged for other forms of payment as we deem necessary, unless modified by state law. | | Re-Boot Training | Up to $2,500 | Time of Service | There is no cost for re-boot training provided there is room available in the pre scheduled class and you are in full compliance with your agreement. If you have received customer complaints or the quality of your work is not up to Boulder's standards, we will require you to attend and you must pay us a $2,500 fee for Re-Boot training as provided by us. If this fee is charged, payment of the Re Boot Training fee is due prior to attending training and is non-refundable. When required, failure to attend the Re-Boot training is a material default of your agreement with us. You are solely responsible for all other related costs you may incur for you and/or your employees to attend this training. | | Additional Initial Training | $7,250 | Time of service | Due for example, if you transfer controlling interest to a new owner, and/or you | | Name of Fee | Amount1 | Due Date | Remarks | |-------------------------------------------------------------------------|-------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | appoint a new Internal Manager. | | On-Site Training Cancellation Fee | Our then-current on-site training cancellation fee | Upon demand | May vary depending upon the type of scheduled training program and how far in advance you notify us in writing of the cancellation. | | National or Regional Meetings | $795 per year | May 1st | Covers entrance fees and concessions for up to two attendees, but does not include lodging and airfare costs. Additional attendees will be billed at $150 each. Attendance is mandatory; non-attendance incurs a non attendance fee of $795 | | Indemnification/Legal Fees | All costs including attorneys' fees. | Upon demand | You must defend lawsuits at your cost and hold us harmless against lawsuits arising from your operation of the Franchised Business. | | Renewal Fees | $5,500 | 270-90 days prior to termination; no later than upon execution of renewal agreement | | | Replacement Operations Manuals | $1,500 each | Upon request | Payable if you require a replacement copy or fail to return the manual upon termination of the Franchise Agreement. | | Liquidated Damages on Confidential Information Disclosure only | $20,000 per breach | Upon demand | This is contained in the Confidentiality Agreement attached as Exhibit C, and only applies prior to becoming a Franchisee. | | Liquidated Damages | $950 multiplied by number of months remaining in the franchise term | Upon termination | If your franchise agreement terminates during the first year, liquidated damages will be calculated at $595 per month until the first anniversary, and $795 per month until the second anniversary, and $950 thereafter. | | Name of Fee | Amount1 | Due Date | Remarks | |---------------------|---------------------------|---------------|----------------------------------| | Referral Commission | $39,500 or 15% of the | Upon | If, we introduce you to the | | for Transfer to | total sale price of the | Demand | transferee or the transferee | | Corporate Lead | franchised business, whichever is greater | | was otherwise part of our sales pipeline, then you will pay a referral commission in the amount of $39,500 or 15% of the total sale price of the franchised business, whichever is greater. | | Default Fee | $1,500 per event of | Within 3 days | Applies if you are in default | | | default, plus the cost of re-inspections and the costs of enforcing compliance | of our demand. | under this Agreement. | | Encroachment Fee | $1,000 per job performed | Upon | If you accept clients outside of | | | to us and 50% of revenue generated from such sale to the franchisee whose protected area in which the sale was made. | Demand | your Territory, and if that area is another franchisee's territory, you must pay us and the franchisee the Encroachment Fee. | Note 1. The fees are uniformly imposed and nonrefundable unless noted otherwise below or in the Remarks column. Royalty Fees, Audit Expenses, Transfer Fees, plus any other amounts you owe us will be deducted from payments that your customers submit to you under the Order Processing System, or as a separate ACH withdrawal if warranted.

Note 2. We have the right, periodically and in our discretion, to limit the size of products you may offer (e.g., boulders exceeding a certain weight), and/or may condition your right to offer certain types or sizes of products on your compliance with our then-current guidelines and/or agreement to pay additional administrative or assistance fees.

Note 3. We may market and negotiate National Account programs to serve clients across territories and often from multiple franchisees.

Source: Item 6 — OTHER FEES (FDD pages 11–16)