UFOC
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Sample UFOC
1-800-Mattress.
FRANCHISE OFFERING CIRCULAR
1-800 MATTRESS CORPORATION A Delaware Corporation 31-10 48th Avenue Queens, New York 11101 (718)472-1200
You will acquire, display, warehouse, sell and deliver bedding products, while we or our affiliates will process telephone, Internet and catalog orders for you. We offer two types of licenses: (1) a license to operate a 1-800 MATTRES® Business either independently or as an adjunct to an existing retail bedding business, and (2) a license to convert your entire retail bedding business to a 1-800 MATTRES® Business.
We will calculate your initial license fee by multiplying the total population within your territory by $0.30. The initial license fee for a minimum territory with approximately 100,000 people is $30,000. The initial license fee and all other fees and requirements under the License Agreement are negotiable.
Operating a Mobile Showroom is optional, but if you wish to obtain a Mobile Showroom before your 1-800 MATTRES® Business opens, you must lease or purchase it from us or our designee. If you lease the Mobile Showroom, the cost will be $1,500 per month for one year (for a total of $18,000), but we will transfer title to the Mobile Showroom to you at the end of the year. Or, you can purchase the Mobile Showroom from us or our designee for $15,000.
The estimated initial investment is from $273,500 to $466,000 (from $198,500 to $411,000 for a conversion licensee). These estimates are based on an initial license fee of $30,000 for a minimum territory with approximately 100,000 people and do not include real property.
We do business under the name "1-800 MATTRES®". SPECIAL RISK FACTORS:
1. THE LICENSE AGREEMENT PERMITS YOU TO SUE ONLY IN NEW YORK. OUT OF STATE LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT FOR DISPUTES. IT MAY ALSO COST MORE TO SUE IN NEW YORK THAN IN YOUR HOME STATE. YOUR STATE LAW MAY SUPERSEDE THIS PROVISION AND IT MAY NOT BE ENFORCEABLE IN YOUR STATE. SEE SPECIAL STATE DISCLOSURES IN THE STATE ADDENDA TO THE OFFERING CIRCULAR (EXHIBIT 5) AND THE STATE ADDENDA TO THE LICENSE AGREEMENT.
2. THE LICENSE AGREEMENT STATES THAT NEW YORK LAW GOVERNS THE AGREEMENT. THIS LAW MAY NOT PROVIDE THE SAME PROTECTIONS AND BENEFITS AS YOUR STATE'S LAW. YOU MAY WANT TO COMPARE THESE LAWS. YOUR STATE LAW MAY SUPERSEDE THIS PROVISION AND IT MAY NOT BE ENFORCEABLE IN YOUR STATE. SEE SPECIAL STATE DISCLOSURES IN THE STATE ADDENDA TO THE OFFERING CIRCULAR (EXHIBIT 5) AND THE STATE ADDENDA TO THE LICENSE AGREEMENT.
3. IF YOUR SALES FOR THE PRECEDING 12 MONTHS DO NOT REACH THE TARGET AMOUNT BY THE THIRD ANNIVERSARY OF THE OPENING OF YOUR BUSINESS, YOU WILL CEASE TO OWE ANY UNPAID BALANCE OF THE INITIAL LICENSE FEE AND WE WILL CANCEL THE PROMISSORY NOTE. HOWEVER, YOU WILL RECEIVE NO REFUND OF THE INITIAL
LICENSE FEE PAYMENTS YOU ALREADY MAD THE LICENSE AGREEMENT. SEE ITEMS 5 AND
4.
ALTHOUGH OUR CHIEF EXECUTIVE O
BEDDING TELEMARKETING SYSTEM IN THE 1< fO'S, OUR AFFILIATE, DIAL OPERATING, HAS OPERATED A DIAL-A-MATTRESS® BEDDING T REMARKETING BUSINESS SINCE 1983, AND ANOTHER AFFILIATE. DIAL INTERNATIONAL. HA > OPERATED A DIAL-A-MATTRESS® BEDDING
I- 1=800 MATTRESS CORPORATION - HAVE TIME (SINCE NOVEMBER. 2003) AND HAVE
TELEMARKETING BUSINESS SINCE 1991, WE BEEN IN EXISTENCE FOR A SHORT PERIOD O
. IN ADDITION, YOU OR WE CAN TERMINATE 12 FOR DETAILS.
FICER FOUNDED THE DIAL-A-MATTRESS®
NOT PREVIOUSLY OFFERED LICENSES OR FF ^NCHISES. THEREFORE, THERE IS ONLY A BRIEF OPERATING HISTORY TO ASSIST YOU irfjUDGING WHETHER OR NOT TO MAKE THIS INVESTMENT.
5. THERE MAY BE OTHER RISKS CONCERBlNG THIS LICENSE.
SPECIAL RISK FACTORS - NEW YORK:
EXIST^JCE
1. THE FRANCHISOR HAS BEEN IN
NOVEMBER, 2003. THEREFORE. THERE IS ONI < YOU IN JUDGING WHETHER OR NOT TO MAKE
2. THE FRANCHISEE WILL BE REQUIRED T > MAKE AN ESTIMATED INITIAL INVESTMENT
RANGING FROM $273,500 TO $466,000 (FROM 5198,500 TO $411,000 FOR A CONVERSION
LICENSEE). THIS AMOUNT EXCEEDS THE FRA DECEMBER 31, 2003, WHICH IS $158,905.
FOR A SHORT PERIOD OF TIME, SINCE A BRIEF OPERATING HISTORY TO ASSIST THIS INVESTMENT.
CHISOR'S STOCKHOLDER'S EQUITY AS OF
INFORMATION ABOUT COMPARISONS OF FRANCHISORS CALL THE STATE ADMINISTRATORS LISTED \h SOURCES OF INFORMATION.
REGISTRATION OF THIS LICENSE WITH THE RECOMMENDS IT OR HAS VERIFIED THE INFORMATION LEARN THAT ANYTHING IN THE OFFERING CIR TRADE COMMISSION AND THE STATE ADMINlSl
AND LICENSORS IS AVAILABLE. EXHIBIT 3 OR YOUR PUBLIC LIBRARY FOR
STATE DOES NOT MEAN THAT THE STATE IN THIS OFFERING CIRCULAR. IF YOU ULAR IS UNTRUE, CONTACT THE FEDERAL RATOR LISTED ON EXHIBIT 3.
The effective dates of this Offering Circular in th states of California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, Rhoae Island, South Dakota, Virginia, Washington and Wisconsin are set forth on these states' respective jceipts.
TABLE OF CONTENTS
ITEM PAGE
1. THE LICENSOR, ITS PREDECESSORS AND AFFILIATES.................................................. 1
2. BUSINESS EXPERIENCE......................................................................................................... 4
3. LITIGATION................................................................................................................................. 6
4. BANKRUPTCY........................................................................................................................... 7
5. INITIAL LICENSE FEE............................................................................................................... 7
6. OTHER FEES.............................................................................................................................. 9
7. INITIAL INVESTMENT.............................................................................................................. 18
8. RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES.................................... 21
9. LICENSEE'S OBLIGATIONS................................................................................................... 23
10. FINANCING............................................................................................................................... 24
11. LICENSOR'S OBLIGATIONS....................................................................................................25
12. TERRITORY.............................................................................................................................. 33
13. TRADEMARKS......................................................................................................................... 37
14. PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION....................................... 39
15. OBLIGATION TO PARTICIPATE IN THE ACTUAL
OPERATION OF THE LICENSE BUSINESS......................................................................... 40
16. RESTRICTIONS ON WHAT THE LICENSEE MAY SELL..................................................... 40
17. RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION.......................... 43
18. ARRANGEMENTS WITH PUBLIC FIGURES......................................................................... 47
19. EARNINGS CLAIMS................................................................................................................. 47
20. LIST OF LICENSE OUTLETS.................................................................................................. 47
21. FINANCIAL STATEMENTS..................................................................................................... 49
22. CONTRACTS....................................................................................................................... 49
23. RECEIPT............................................................................................................LAST PAGES
EXHIBITS
EXHIBIT 1 LICENSE AGREEMENTS AND RELATED MATERIALS
TELEMARKETING, SHOWROOM AND ELECTRONIC COMMERCE LICENSE AGREEMENT
CONVERSION LICENSE AGREEMENT
STATE ADDENDA TO LICENSE AGREEMENTS
EXHIBITS TO LICENSE AGREEMENTS:
EXHIBIT A
EXHIBIT B EXHIBIT C EXHIBIT D EXHIBIT E EXHIBIT F EXHIBIT G EXHIBIT H
EXHIBIT I
LICENSED TERRITORY; OFFICE; WAREHOUSE; POPULATIOfjjOF TERRITORY; AND, NUMBER OF showroom! OR SUPERSTORES TO BE OPENED BY LICENSEE
DEVELOPMENT SCHEDULE
confidentia|ity/non-competition AGREEMENT
GUARANTEE
GENERAL RELEASE - RENEWAL
GENERAL RELEASE - ASSIGNMENT
PROMISSORY riJTE
SAMPLE BYLAVfS OF REGIONAL ADVERTISING COOPERATIVE
SOFTWARE UCBNSB AGREEMENT MOBILE SHOWROOM LEASE/PURCHASE AGREEMENT EXHIBIT 2 FINANCIAL STATEMENTS EXHIBIT 3 STATE ADMINISTRATORS EXHIBIT 4 AGENTS FOR SERVICE OF PROCESS EXHIBIT 5 STATE ADDENDA TO OFFERING CIRCULAR EXHIBIT 6 RECEIPT
ITEM1
THE LICENSOR, ITS PREDECESSORS AND AFFILIATES
We and Our Affiliates
To simplify the language in this offering circular, "we" and "us" means 1-800 Mattress Corporation, the licensor. "You" means the individual, corporation or partnership who acquires the license. If the license will operate through a corporation or partnership, "you" also includes the licensee's owners or partners. Our agent for service of process in the states whose laws require us to name a state agency as agent for service is shown on Exhibit 4.
We are a Delaware corporation incorporated under the name "1-800-Mattress Corp." on November 3, 2003. On February 24, 2004, we changed our name to "1-800 Mattress Corporation" to correct a clerical error. We do business under the name "1-800 MATTRES®". Our principal business address is 31-10 48th Avenue, Queens, New York 11101, and our telephone number is (718) 472-1200. We have no predecessors.
We have offered licenses since February, 2004. We offer two types of licenses:
• A license to operate a 1 -800 MATTRES® Business - either independently or as an adjunct to your existing retail bedding business - under which you acquire, display, warehouse, sell and deliver bedding products, while we or our affiliates process telephone, Internet, catalog and other orders for you, or
• A license to do all of the above, plus operate your entire existing retail bedding business under the A+11-800 MATTRES®" name and mark (a conversion license). |
We have not previously conducted a business of the type described in this offering circular, but our affiliate, Dial-A-Mattress International Ltd. ("Dial International"), which was incorporated on February 26,1991, has sold bedding and related products at retail by means of telemarketing since 1991. Dial International is a Delaware corporation. Its principal business address is 31-10 48th Avenue, Queens, New York 11101, and its telephone number is (718) 472-1200. Dial International granted several franchises of the type offered by this Offering Circular between May, 1992 and March, 1993, but has not offered franchises since then. In addition, euHajnaffiliate, 1-(888) Mattress Franchise Corporation ("1-(888) Mattress"), whieh-wa^a Dejawa^ on February 10, 1999, offered
franchises of the type offered by this Offering Circular between 1999 and 2001 and granted a franchise in 1999whjch^hasL^ce^eenjerrninated. Havjngj^oJ qffeje^ F C^cJii se/Corp^A ^
fr-aoehises-s4ftee-2£04^^^ is wasp Delaware oefporation incorporated-tft February, 1000.
Hs principal business ad^fess4s-51 10 48th Avenue, QucoftSrNew-YefM1101, and our telephone rwmbefHS-(74BH^ 1200.
Another affiliate, Dial-A-Mattress Operating Corporation ("Dial Operating"), is a New York corporation incorporated on September 20,1983 under the name "Dial A Mattress Franchise Corporation" which changed its name to "Dial-A-Mattress Operating Corporation" on December 22,1990. Dial Operating owns the "DIAL-A-MATTRESS®' marks and operates the DIAL-A-MATTRESS system in the New York metropolitan area. Dial Operating's principal business address is 31-10 48th Avenue, Queens, New York 11101, and its telephone number is (718) 472-1200. Dial Operating licenses Dial to use and license the "DIAL-A-MATTRESS®" and 1 -800-MATTRES® marks.
Our affiliates operate an Internet-World Wide Web site - MATTRESS.COM - through which our licensees will receive orders as described in this Offering Circular.
We, Dial Operating, Dial International and 1-(888) Mattress (nqw.jrierg^ I
signed a cross-license agreement granting us a r International's Proprietary Marks (defined in Item business system and know-how, and the right to li<
Except as described above, neither we nor our affljates have offered licenses or franchises for any other type of business. As Item 12 describes, if you are not in default under the License Agreement and all other agreements related to it, and except as Iterf 12 otherwise describes, we, Dial Operating, Dial lnternational-and-t-(S8S)-Mattfess and Lkseftsef^s-of r,other affiliates, subsidiaries and designees will not compete with you in your Territory by fulfillinplany customer orders placed over your "1-800-MATTRESS®" Telephone Number, our computer nfflwork "web" site(s) or our catalogs (if any) that call for the delivery of bedding or related products and accessories in your Territory.
The License I
The license offered by this offering circular is for a 1-fflDO MATTRES® Business. You will either operate your 1-800 MATTRES® Business independently or, f you have an existing retail bedding business (an "existing retail bedding business") as an adjunct to four existing retail bedding business. Under the conversion license, you will also convert your enfre existing retail bedding business to a 1-800 MATTRES® Business. Unless we specify otherwise, references to the "License Agreement" in this Offering Circular refer to both the standard License Agreement and the conversion License Agreement.
In response to your and our advertising and markewng, customers will call our 1-800-MATTRES® telephone number with orders for bedding and related products and accessories (or place orders through the Internet or through catalogs) for delivery ay you within your territory (described in Item 12). Customers may also place orders for delivery by yojwithin your territory after viewing bedding and related products at your Showrooms or Galleries (deffied below) or at our or your 1 -800-MATTRES® merchandise displays. I
Our Bedding Consultonts7Sleep Consultants® will: I
• Intake, process and finalize telephone orderaand Internet orders (and any other electronic and/or catalog orders) within the parameterslfor inventory, pricing and delivery which you communicated to us; I
• Process customers' credit card information; I
• Consummate the sales transactions; and, I
• Communicate the orders to you. I
You will then fulfill the orders from your inventory, delivering the products to the customer and installing them as the customer requests and following our Guidelines. (Our Beddm§-Gef*suftants7Sleep Consultants® may be our employees or independent contractors, employees or independent contractors of our affiliates or employees of independent third parties with whom we or our affiliates contract.) I
If you are not a conversion licensee and you have an easting retail bedding business, then you may, if your wish, use our mark "1-800 MATTRES®" as a secSidary identifier for your existing retail bedding business, If you are using "1-800-MATTRES" as a secondary identifier for your existing retail bedding business in addition to your other business name(s), Sen your advertising and signs on the Stores operated by the existing retail bedding business must fellow our requirements for the use of the "1-800 MATTRES®" mark and for the size of the mark compared to that of your other business name(s). Your "Stores" are the retail bedding stores within the Territoft which your existing retail bedding business operates, currently or in the future. I
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)n-exclusive license to Dial Operating's and Dial 13), the 1-800 MATTRES® telephone numbers, ;nse these rights to others.
If you are a conversion licensee, then you will convert your existing retail bedding business and Stores to a 1-800-MATTRES® Business. As for non-conversion licensees, your "Stores" are defined as the retail bedding stores within the Territory which your existing retail bedding business operates, currently or in the future.
Whichever type of license we grant you, you must open and operate the number of Showrooms or Superstores in your Territory shown on your Development Schedule (which will be Exhibit - to your License Agreement). A "Showroom" is a public facility located within your Territory at a site other than your existing retail bedding business for the display and sale of mattresses and other bedding-related products. A "Superstore" is a retail store with at least 10,000 square feet devoted to the sale of mattresses and other bedding-related products. If it meets our criteria for a Superstore, your existing retail bedding business Store can count as one of the required Superstores. Your Showrooms or Superstores must be in the counties or other geographic areas in your Territory shown on your Development Schedule. Because neither we or our affiliates have granted any licenses under a form of License Agreement that requires any Showrooms or Superstores, we cannot estimate the "typical" number of Showrooms or Superstores our licensees must open. However, since we require you to have either one Showroom for each 100,000 persons within your Territory or one Superstore for each 1,000,000 persons within your Territory, the greater the population of the Territory we grant you, the more Showrooms or Superstores you must open and operate.
We also recommend that you operate one Mobile Showroom for each 100,000 persons within your Territory, but we do not require you to operate any Mobile Showrooms. A "Mobile Showroom" is a specially outfitted bus or truck for the display and sale of bedding and related products and accessories. You must lease or purchase any Mobile Showrooms you operate from us or our designee.
If you have an existing retail bedding business and you are not a conversion licensee, then instead of opening and operating any of the required Showrooms or Superstores, you may instead open and operate a Gallery at one of your Stores. A "Gallery" is a facility on the premises of one of your Stores for the display and sale of mattresses and other bedding-related products.
If you first obtain our written approval, you may operate one or more "Satellites" in your Territory. There is no time period within which we must approve or disapprove your proposed Satellite. A "Satellite" means a location other than your Office, Warehouse, Showroom, Superstore, Mobile Showroom or Gallery at which, with our permission, you may engage in some of the business activities contemplated by the License Agreement. We can prohibit other activities at a Satellite. If you are operating an Existing Retail Bedding Business, you may not also utilize your Satellite for the Existing Retail Bedding Business without our written approval.
You may only sell "System Products" from or at your 1-800 MATTRES® Business. The "System Products" are those bedding and related products and accessories which we designate from suppliers we designate. These suppliers place the 1 -800 MATTRES® label on certain of our designated models of mattresses, bedding products and accessories.
The Market, Competition and Applicable Laws
The market for your services is the consuming public. The market is extremely competitive. You will compete primarily with bedding retailers, which generally consist of specialty bedding stores and chains, furniture stores and department stores. You will also compete with other bedding telemarketers, Internet marketers, catalogs, warehouse clubs, infomercial vendors and direct marketers that sell bedding and related products and accessories. While the 1-800 MATTRES® System is no longer the only system selling bedding through telemarketing using "800" telephone numbers and trained Bed€img Conaultants7Sleep.Consultants®, we believe that our System was the first to do so. We also have the advantage of our easy-to-remember toll-free number, "1-800-MATTRES®".
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You must comply with any applicable laws and regulations concerning the removal and disposal of bedding and related products. In addition, the lawsixiles and regulations which apply to businesses in general will affect you. Consult your lawyer about tiem.
ITEM 2
BUSINESS EXPERIENCE
Chairman of the Board and Chief Executive Officer: Napoleon Barragan
Mr. Barragan has been our Chairman of the Board incorporation in November, 2003. Mr. Barragan has Chief Executive Officer of 1-(888) Mattress sinee-b heldand the.merger of 1 -(888) Mattress into. DiaLlntel President of 1-(888) Mattress between February, 1 has been and continues to serve as Chairman of the! Dial International and Dial Operating since their inco, respectively. Mr. Barragan also served as Presiden and October, 2002. Mr. Barragan founded the DIAL-, the 1970's.
/ Directors and Chief Executive Officer since our Iso been Chairman of the Board of Directors and een February, 1999 {^R-ef%e-he-ee^mjes~te ational as of December 31,2004) and served as 9 and October, 2002. In addition, Mr. Barragan oard of Directors and Chief Executive Officer of oration in February, 1991 and September, 1983, f those companies between their incorporation .'-MATTRESS® bedding telemarketing System in
President and Secretary: Luis Barragan
Mr. Barragan has served as our President since our| has also served as President of 1 -(888) Mattress (888) Mattress into Dial International.as of December as one of its Vice Presidents between February, 199$ serve as its Secretary since February, 1999. Mr. Operating since 1988 and Dial International since Secretary, offices he continues to hold.
Executive Vice President: Jose R. Vicens
Incorporation in November, 2003. Mr. Barragan •between November, 2002 and the merger of 1-
nd October, 2002, and served and continues to
-arragan has held various positions with Dial
ibruary, 1991, the latest being President and
Mr. Vicens has been our Executive Vice President s] Vicens has also been Executive Vice President of 1-( and the merger of 1-(888) Mattress into Dial Intern; eontifvues-te-nold. He also served as its General Man' February, 1999 and October, 2002. Mr. Vicens has hej International since February, 1991, the latest being Ej offices he continues to hold.
ice our incorporation in November, 2003. Mr. ;88) Mattress stnee-between November, 2002 Bonal as:of December 31, 2004, an offiee-fre iger and as one of its Vice Presidents between various positions with Dial Operating and Dial icutive Vice President and General Manager,
Vice President, Assistant Secretary and General Cpunsel: Michael S. Stern
Mr. Stern has been our Vice President, Assistant! incorporation in November, 2003. Mr. Stern nas-al: Secretary and General Counsel of 1-(888) Mattress sa 1-(888) Mattress into Dial.International.as of.Decembl Stern has been Dial Operating's and Dial International': he continues to hold.
[Secretary and General Counsel since our .'en-served, as Vice President, Assistant
-between February, 1999 and the merger.of r_.31,,2OO4rH3ffiC€S-ne-e0ntiRues-40-he4d. Mr.
eneral Counsel since August, 1993, an office
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t^SSmSSSM
be^eeJSfe&*e*ertl?^^, 1991 >e la
W3S&»* S,nCe , n irl No****
°^ ,^« SMJ9B ..., incoipora** JlVil and D>
American Arbitration Association, AAA File No. 13 114 00685 95 (commenced August 28,1995).
In re Atlantic & Pacific Mattress Company, Inc.: Atlantic & Pacific Mattress Co.. Inc. v. Dial-A-Mattress International Ltd., United States Bankruptcy Court for the District of Maryland, Case No. 96-5-3744JS; Adv. Pro. No. 96-5-372 (commenced July, 1996).
This group of three related actions arose from a dispute between Dial International and one of its DIAL-A-MATTRESS franchisees, Have I Got A Bed For You, Inc. {"HIGABFY"). HIGABFY subsequently assigned its interest in its franchise agreement to J&W Bedding Operating Corp., which then changed its name to Atlantic & Pacific Mattress Company, Inc. The franchisee commenced an action in Federal District Court in Maryland. This action was stayed and referred to arbitration. The franchisee then commenced an arbitration proceeding before the American Arbitration Association. While this arbitration proceeding was pending, the franchisee (as well as its assignees and principal) filed a voluntary petition for reorganization under the United States Bankruptcy Code. After that, the parties reasserted their claims in the context of adversary proceedings under the Bankruptcy Code before the United States Bankruptcy Court for the District of Maryland.
In all these related actions, the franchisee alleged breach of contract and fraud against Dial International, and Dial International counterclaimed for breach of contract and fraud against the franchisee. The parties settled these actions in a global Settlement Agreement filed with and approved by the Bankruptcy Court on September 30, 1997. Under the settlement, the franchisee paid Dial International $75,000; the franchisee continued as a DIAL-A-MATTRESS franchisee; the franchisee agreed to pay additional past due telephone charges; and, the parties agreed to make certain modifications to the their franchise agreement.
ITEM 4
BANKRUPTCY
No person identified in Item 1 or 2 of this offering circular has been involved as a debtor in proceedings under the U.S. Bankruptcy Code which must be disclosed in this Item.
ITEM 5
INITIAL LICENSE FEE
We will calculate your initial license fee by multiplying the total population within your territory by $0.30. The initial license fee for a minimum territory of approximately 100,000 people is $30,000. We will determine the total population in your Territory using the latest statistics available at the date of signing of the License Agreement from the U.S. Census Bureau or the Pinstripe Business Control Atlas (a reference work for business and marketing) published by Hagstrom, at our option.
The initial license fee will be payable as follows:
Up to 100% (but at least 10%) when you sign the License Agreement (unless you are a Maryland licensee, in which case you need not pay this first installment until the date your licensed Business commences operations), and
The balance (if any) over ten years, in 120 equal monthly installments, each due and payable on the first day of each month following your signing of the License Agreement (or, if you are a Maryland licensee, the first day of each month following the date your
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licensed Business commences operations). When you sign the License Agreement, you must sign an interest-free promissow note for the balance (see Exhibit G). See Item 10.
In 2004, we sold one franchise under special termsfcecause the purchaser was an employee of ours. The initial license fee was $300,000, payable as folfews: year 1: $1,250.00 per month;, years 2 and 3: $1,666.67 per month; year,4:.$2,083.33 per montT; year 5: $1,916.67 per month; and, succeeding years: $1,916.67 per month, until the balance has._|een paid.
The initial license fee and all other fees and requirements under the License Agreement are negotiable. We use the proceeds from Initial License Fees to defray a portion of our expenses in connection with the sale and establishment of franchises.
If, on the third anniversary of the opening ofyour Bu iness (the "Third Anniversary"), your total 1-800-MATTRES® Telemarketing Sales and 1-800-MATTF ES® Showroom/Superstore/Gallery Sales (Store/ Superstore/Showroom Sales for conversion license ;s) for the preceding 12 months are not at least equal to the product of $3.00 times the population si- iwn on Exhibit A to your License Agreement (the "Target Amount"), then you will cease to owe any u paid balance of the Initial License Fee as of the Third Anniversary and we will cancel the Promissory Note. However, you will receive no refund of the Initial License Fee payments you already made. In addition, if your Business does not achieve the Target Amount by the Third Anniversary, then either i-ou or we can terminate the License Agreement by complying with the requirements described in l^m 12. Otherwise, the License Agreement will remain in effect.
For a minimum territory with a population of 100,000l)eople, the Target Amount would be $300,000.
IMPORTANT NOTE: we-We do not represent or pretnise that your Business will achieve its Target Amount during the 12 months preceding the Third anniversary or during any period, or that your Business will achieve any other level of sales at any [me. See Item 19.
We will not refund any of the Initial License Fee exc^t as described above and under the following other circumstances:
If you or your Business Manager fails to successfully complete our Initial Training Program, the person who failed can re-enroll in our next scheduled Initial Training Program at no additional charge. We can terminate the License Agreement if the person fails to successfully complete the Initial Training Program again. If we terminate the License Agreement, then we will refund 50% of the Initial License Fee you paid, cancel the Promissory note and forgive the unpaid balance of the Initial License Fee.
If you fail to comply with the time limits and prot securing your Office and/or Warehouse, then does, we will refund 75% of the Initial License Initial Training Program to you), cancel the Prot the Initial License Fee.
idures in Article 7 of the License Agreement in /e can terminate the License Agreement. If it iee you paid (or 50% if we have furnished our lissory note and forgive the unpaid balance of
• If you do not have existing office or warehouseepace when you sign the License Agreement,
and we cannot agree on a site for your Office omWarehouse within 3 months after the date we sign the License Agreement, then we will termirrate the License Agreement and refund 85% of the Initial License Fee. you have paid, cancefthe Promissory note and forgive the unpaid balance of the Initial License Fee.
If you wish to acquire a Mobile Showroom -a specially Outfitted bus or truck for displaying and selling bedding and related products and accessories - before your Business opens, you must acquire the Mobile Showroom from us or our designee. If you leaselhe Mobile Showroom, the cost will be $1,500
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per month for one year (for a total of $18,000), but we will transfer title to the Mobile Showroom to you at the end of the year so that you will own the Mobile Showroom from then on (see Mobile Showroom Lease/Purchase Agreement in Exhibit 1). Or, you can purchase the Mobile Showroom from us or our designee for $15,000 before you begin operating your licensed Business.
You pay us no other fees or payments for services or goods before your Business opens.
ITEM 6
OTHER FEES
|
Name of Fee |
Amount |
Due Date |
Remarks |
|
1-800-MATTRES® Fee |
12.5% of 1-800-MATTRES® Telemarketing Salest, plus 5% of 1-800-MATTRES® Showroom/Superstore/ Gallery Sales (or of 1-800-MATTRES® Store/Showroom/ Superstore Sales for conversion licensees) for precedinq month |
Monthly on the 10th day of the next month |
The 1-800-MATTRES® Fee and all other fees and requirements under the License Agreement are negotiable, but as of the date of this Offering | Circular, we have not negotiated any lower fees. See definitions in Note 1. The 1-800 MATTRES® Fee percentages will not change during term of License Agreement. You must make all payments through an electronic transfer process - see Note 1. |
|
Required Minimum Expenditure for Local Advertising/System Advertising Contribution |
$2,000 per month from one month before scheduled opening to one month after opening. During first 6 month period starting with second month after opening, $0.10 times total population of Territory. Each month after that, 10% of total 1-800-MATTRES® Telemarketing Sales and Showroom/ Superstore/ Gallery Sales (Store/ S u persto re/S howroom Sales for conversion licensees) for preceding month, but not less than 1/6th amount required for first 6 month period followinq openinq. |
Contribution due monthly on the 10th day of the next month |
You must pay 50% of these amounts to us in equal monthly installments as your System Advertising Contribution (see Item 11), and you must spend the other 50% in equal monthly installments on local advertising and promotion exclusively for your 1-800-MATTRES® Business. See the first three paragraphs of Note 1 and Note 2. Formula in Note 2 will not change during term of License Agreement. |
|
Advertising Cooperative |
When cooperative formed: Minimum -1% of Gross Revenues. Maximum - 2% of Gross Revenues. |
Established by cooperative |
We may form advertising cooperatives and establish fees. See Item 11. A company owned Business will have a vote if it joins. Percentage may change | within 1%-2% range and may only be more than 2% if the Cooperative changes the maximum under its | By-Laws. |
|
Mobile Showrooms (optional) |
Mobile Showroom: if leased, $1,500 per month for one year, but title transferred to you at the end of the year; if purchased, $15,000. See Note 3. |
See Note 3. |
Mobile Showrooms are optional but you must purchase or lease any Mobile Showrooms from us or our designee. See Note 3 and Items 5, 7 and 8. I |
|
Name of Fee |
Amount |
Due Da J |
Remarks |
|
Other Proprietary Products |
See Not! 3. |
You must purchase or lease any proprietary products and services from us or our designee . See Note 3 and Items 5, 7 and 8. |
|
|
Initial Training |
Additional trainee charge: $1,000 per person. Subsequent trainee charge: no more than $2,000 per person for first year, then increased by CPI - see remarks. You pay all living and transportation expenses for all your trainees. |
Fee for Sldi-tional orl subsequent trainees £ue before beginning of training; expenses as incurr® |
We train 5 people free - see Item 11. You must pay the additional trainee charge if you want us to train additional people. All Business Managers appointed later must also pass the Initial Training Program. You must pay the subsequent trainee charge for them. The subsequent trainee charge will be no greater than $2,000 per person during the first calendar year during which your Business is in operation. This training charge will be increased on January 1 of each year by the percentage of increase in CPI durinq the precedinq 12 months. |
|
On-Going Training |
Expenses only - see remarks |
As incurraJ. |
If hold an annual conference, convention or training session, your Business Manager must attend. No training charge, but you pay all living and transportation expenses. |
|
Supplemental Training |
Your proportionate share of our costs in providing the training. Your cost may range from $500 to $10,000, depending on the nature of the training and the number of franchisees trained. |
When we Jill you. 1 |
We may provide supplemental training by telephone, the Internet or other electronic means. |
|
Expenses of Testing Suppliers You Propose |
Our actual expenses if we test a product or services you propose; these may range from $1,000 to $5,000, depending on the nature and complexity of the testing necessary for the product or service. |
When we 1 request 1 |
If you name a supplier for a product or service and you propose a different supplier, then you must follow the procedures described in Item 8 to obtain our written approval. We have the right to test, at your expense, the product or service of any supplier you propose, whether or not the supplier is then approved by us. |
|
Consulting Fee |
Up to $1,000 per day (optional). |
When we 1 request 1 |
We may offer you consultation services beyond the field support services under Section 8.4 of the | License Aqreement. |
|
Optional Materials and Services We May Offer |
Optional programs - fees not established except for media buying services. See Note 4. |
Optional 1 programs - lot established! |
If we offer you the materials or services and you agree to purchase them from us, we can charge you for them. See Note 4 for examples of these optional materials and services which we may offer. |
|
Telephone Bills |
May range from 10 to 25 cents per minute or more, depending on charges imposed by telephone company. See Note 5. |
See Note 5,1 |
You must reimburse us for all calls from your Territory to 1-800-MATTRES® and our other telephone numbers. The estimates for telephone charges may be higher than the range shown if telephone companies increase their fees See Note 5. |
|
Software Costs |
Program included in Initial License Fee. You pay for updates. The cost of updates may range from $100 to $2,500. |
You must use our proprietary software. We will initially furnish proprietary software to you at our expense. You must purchase any new, upgraded or substitute proprietary software programs from us or our designee at the price we or our designee charqes at the time. |
|
|
Late Charge |
Maximum law allows, or if no legal maximum, then 4% above prime rate. |
When we 1 request 1 |
Late charge on any past due amounts owed to us. We will not increase charge beyond formula in column 2 durinq term of License Aqreement. | |
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|
Name of Fee |
Amount |
Due Date |
Remarks |
|
Audit Expenses |
If you must pay the cost of the audit, it may range from $500 to $3,000.See Note 6. |
See Note 6. |
|
|
Insurance |
Estimated annual premium -$5,000-$10,000. |
As insurance agent requires |
Premiums set by insurance company. Your premiums depend in part on your claims experience. | Companies may raise premiums by inflation in insurance industry and any increases in their costs above inflation (due to material shortages, natural disasters, strikes, Acts of God, etc.). See Note 7. |
|
Revenue Commingling/Non-Deposit Fee (Not applicable to conversion licensees) |
$10,000 |
Immediately upon demand by us |
If you are not a conversion licensee and you commingle any revenues of the licensed Business with those of your existing retail bedding business or any other business, or fail to deposit any revenues of the licensed Business in the separate account bank account you must maintain, you must pay us $10,000. If you have done either once, and you commingle revenues or fail to deposit any revenues of the licensed Business in the bank account, then we can terminate the License Agreement See Item 17. |
|
Securities Registration Fee |
$25,000 |
At least 45 days before proposed registration |
Equity Interests (defined in Note 7) in the licensee which require registration under any federal or state securities law are assignable through a public offering if you meet requirements and pay Securities Registration Fee and our expenses. See Note 8. |
|
Extraterritorial Sale Fees |
See remarks. |
Within ten days of your receipt of funds |
See Note 9. |
|
Taxes |
Promptly when due |
You must pay us all taxes we pay on account of services or goods we furnish to you or fees you pay us. |
|
|
Advances |
When we request |
You must pay us all amounts we advance to third parties for you. For example, if you do not pay your telephone bill on time, we might conceivably pay the bill for you, but we will have no obligation to do so. If we advance any amounts for you, then you must immediately repay us. |
|
|
Transfer Fee |
5% of the Total Sales Price (as defined in the License Agreement) |
Before we approve transfer. |
See Item 17. |
|
Renewal Fee |
10% of the then-current Initial License Fee (or, if we are not actively franchising at the time of renewal, 10% of the amount of the latest Initial License Fee we charged) |
Before we sign renewal agreement. |
See Item 17. |
|
Name of Fee |
Amount |
Due Dafe |
Remarks |
|
Management Fee (on death or disability) |
The greater of (a) two times the salary paid to the individual(s) we assign to operate the Business, or (b) 10% of the Business's weekly 1-800-MATTRES® Telemarketing Sales. (See above and Note 1 for information concerning 1-800-MATTRES® Fees and System Advertising Contributions.) |
See rerrerks. |
On the death or disability of your last surviving principal, partner or shareholder, the person's rights pass to your "Estate", which may continue operating if it provides an acceptable Business Manager (see Item 17). Until Business Manager assumes full-time control, we can operate your Business (see Item 6), but we need not do so. If we do so, we will deduct our expenses for travel, lodging, meals, and all other expenses and fees from the Business's 1-800-MATTRES® Telemarketing Sales (defined in Note 1), and a management fee. This management fee will be in addition to the 1-800-MATTRES® Fees and System Advertising Contributions due us. We will remit any remaininq funds to the Estate. |
|
Indemnification |
You indemnify us from certain losses and expenses. See License Agreement. |
||
|
Attorneys' Fees |
See Note 10. |
||
|
Application of Funds |
We can apply your payments to the oldest obligation due. |
NOTI
[1] "1-800-MATTRES® Telemarketing Sales" services) which are the subject of customer oi and/or catalog marketing facilities receive, conversion licensee, "1-800-MATTRES®Sho' price of all products (and any services) which] your 1-800-MATTRES® Showrooms, Super; procured through your or our merchandise) conversion licensee, then "1-800-MATTRES® retail price of all products (and any services) w] by your1-800-MATTRES® Stores, Showrooi procured through your or our merchandise di:
ans the retail price of all products (and any ers which our telemarketing, Internet, electronic
e process and you fulfill. If you are not a oom/Superstore/Gallery Sales" means the retail
re the subject of customer orders received by [tores, Galleries and/or Mobile Showrooms or tdisplays, and which you fulfill. If you are a
tore/Showroom/Superstore Sales" means the ich are the subject of customer orders received S, Superstores and/or Mobile Showrooms or
lays, and which you fulfill.
Section 5.2 of the License Agreement definesI1-800-MATTRES® Telemarketing Sales" and "1-800-MATTRES® Showroom/Superstore/G Jlery Sales" in full. Section 5.2 of the Conversion License Agreement defines "1-800-MATTREsf Telemarketing Sales" and "1-800-MATTRES® Store/Showroom/Superstore Sales" in full.
You must make all payments to us and our ^filiates by electronic funds transfer. Until the electronic system is functional, or if the electroilc system is not functioning at any time for any reason, you must ensure that we receive payment by the date due in the form of a check, other type of electronic transfer, money order or othS form acceptable to us.
We can request the financial institutions processing customer credit or debit card transactions for your 1-800-MATTRES® Telemarketing anc&r Showroom/Superstore/Gallery Sales (or, if you are a conversion licensee, your Store/Shojvroom/Superstore Sales) to pay your 1-800-MATTRES® Fee directly to us via electronic |ansfer immediately upon clearance of each transaction.
[2] Beginning one month before the scheduled opf ning of the Business and continuing for one month after the opening, you must spend $2,00aper month on local advertising and promotion
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(defined below). After that, you must spend on local advertising and promotion and as your contribution to the 1-800-MATTRES® System Advertising Fund the following total amounts; during the first six month period following opening, a total amount equal to $0.10 multiplied by the total population of your Territory, as we determine from the Pinstripe Business Control Atlas published by Hagstrom; and each month after that, 10% of your total 1-800-MATTRES® Telemarketing Sales and Showroom/Superstore/Gallery Sales (Store/Showroom/Superstore Sales for conversion licensees) for the preceding month, but not less than an amount equal to one-sixth of the amount required for the first six month period following opening. You must pay 50% of the above amounts to us in equal monthly installments as your System Advertising Contribution (see Item 11), and you must spend the other 50% in equal monthly installments on local advertising and promotion (as defined below), exclusively for your 1-800-MATTRES® Business.
For the purposes of these requirements only, "local advertising and promotion" means the local or regional advertising and promotional activities which we specify in terms of media, format, content, signage, display of Proprietary Marks and otherwise, or which we approve in advance (see Item 11). Our specifications for advertising content will be subject to the pricing provisions described in Item 11.
You must allocate your required minimum local advertising and promotion expenditures (and any rebates of System Advertising Contribution that you receive) in all "Areas of Dominant Influence" ("ADIs") and markets served by your licensed Business on a basis reasonably acceptable to us.
The operation of one or more of our proprietary Mobile Showrooms is optional, but if you wish to operate any Mobile Showrooms, you must purchase or lease them from us or our designees because their design is proprietary.
You must purchase any proprietary bedding products and/or related products and accessories from us or our designees. Currently, we have no proprietary bedding products, related products or accessories, but we may add them in the future. (However, your 1-800 MATTRES® Business may only sell "System Products," that is, the bedding and related products and accessories which we designate, from suppliers we designate. These suppliers place the 1-800 MATTRES® label on certain of our designated models of mattresses, bedding products and accessories. (See Item 8)
We or our designee will sell or lease (as applicable) Mobile Showrooms and any other proprietary products and services to you at the same price as we or our designee sells them to licensees who are similarly situated and who buy similar quantities. We and our designee will be able to change the prices for Mobile Showrooms and any other proprietary products. However, we do not expect that the prices will increase beyond inflation in the applicable industry segment unless our or our designee's costs increase due to shortages, catastrophes, strikes, Acts of God, or other causes beyond our or its control. We or our designee will be able to require payment in full for Mobile Showrooms and other products, and estimated shipping charges when you place an order.
We and our designee will have no responsibility to ship Mobile Showrooms and other proprietary products to you. We or our designee will sell you Mobile Showrooms and any other proprietary products F.O.B. their place of manufacture or other locations that we or our designee may designate. We or our designee may, but need not, arrange shipment to you for your convenience. We and our designee will have no responsibility for the selection or actions of a carrier. You waive any claim against us or our designees related to shipment or the selection of a carrier. Your only remedy and our and our designee's only liability for claims concerning delivered Mobile Showrooms or other products, for delayed delivery or for non-
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delivery, will be the purchase price of the Mabile Showroom or other products plus any shipping costs you paid or, if we or our designee 1/ishes, the replacement of the products at your destination. Neither party will be liable ©r special, incidental, indirect or consequential damages, whether or not from the party's negligence.
We warrant that the Mobile Showrooms anc us or our designee meet our specifications! express or implied, for Mobile Showrooms) designee disclaim all implied warranties of, for Mobile Showrooms and any other prof License Agreement, we and designee will hi other products to you.
If we determine to offer to sell to you any optij affiliate), and you decide to purchase any ofj sets. We will inform you of these prices otherwise (except for media buying services,) except for media buying services are subjec1 offer you any of these materials or services them from us. For example, these optiona
ny other proprietary products you purchase from |We and our designee make no other warranties,
nd any other proprietary products. We and our ferchantability and fitness for a particular purpose ;ietary products. If you are in default under the
e no obligation to sell any Mobile Showrooms or
jnal materials and services (directly, or through an [hem, then you pay us or our affiliate the prices it the time of offer or sale, in our Standards or /here the fee is described below). All these prices [to change at any time. We have no obligation to land you have no obligation to purchase any of [aterials and services may include:
Forms for your Business.
Local advertising and promotional materials (: materials, promotions, brochures, catalogs, prizes, gifts, ad specialties, posters, billboarc
jch as advertising programs, displays, direct mail [rinted materials, contests, premiums, incentive and/or other merchandising techniques).
Media buying services - purchasing local! commercials or advertisements. If we offer tl you pay us our documented costs of placing tl to an agency we retain to perform these acti' costs or, if you directly pay the documented p] perform these activities, then you pay us 15°^
media time and/or print space and placing se services and you decide to use them, then
advertising (which may include compensation Jties), plus 15% of the documented placement
cement costs to an agency which we retain to (of the documented placement costs alone.
Direct mail marketing materials and/or the senjce of mailing these materials to the individuals, groups, entities and other addressees that yoj specify.
Camera-ready advertising for you to use for pBcement in classified telephone directories.
The services of our classified telephone directay advertising agency and/or the services of our personnel devoted to classified telephone directory advertising.
We will bill you for these calls. We can also billyou for telephone calls we place to telephone numbers with an area code and exchange withji your Territory in connection with your license. We will send you copies of statements or irwoices from our telephone service providers documenting these expenses. You must reimburse us for these telephone expenses promptly after you receive each bill from us.
If we audit your Business, and you understated the monthly statements you submitted to us b entire period, when compared with your actual you must immediately pay us the cost of the interest at the highest legal rate or, if there is n the prime rate of interest as published in The the audit (or, if The Wall Street Journal is not p' rate published by The New York Times on that
le 1-800-MATTRES® Telemarketing Sales on |2% percent or more for any month or for the J-800-MATTRES® Telemarketing Sales, then ludit and the additional amounts owing, plus (maximum legal rate, then 4% percent above Street Journal on or nearest to the date of fblished on the date of the audit, at the prime fate, and if neither is published, the prime rate
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charged by Citibank, N.A. in New York City on that date). Otherwise we must pay the cost of the audit. If you understated your 1-800-MATTRES® Telemarketing Sales by 8% or more for any month or for the entire period, We can terminate the License Agreement and you must pay the amount due, plus interest and the cost of the audit. If you understated your 1-800-MATTRES® Telemarketing Sales by less than 2% percent for any month or for the entire period, you must immediately pay us the amount due, plus interest, but we will pay the cost of the audit. The percentages described in this footnote are fixed and will not change during the term of the License Agreement.
You must maintain the following insurance for your Business:
1. Broad form comprehensive general liability coverage, broad form contractual liability, property damage and personal injury coverage (including products liability and completed operations coverage) of at least $10,000,000 aggregate. This insurance may not have a deductible or self-insured retention of more than $5,000.
2. Fire and Hazard "All Risk" Insurance on your Office, Warehouse, any Showrooms, any Superstores, any Galleries, any Satellites and your property in an amount adequate to replace them and all improvements to them in the event of an insured loss (except that if any of these facilities is leased, only your improvements need be insured).
3. Business Interruption Insurance in sufficient amounts to cover the rental of the Office and Warehouse, delivery vehicles, any Showrooms, Superstore, Galleries and Satellites, the Mobile Showrooms (if leased), your Stores (if you are a conversion licensee), previous profit margins, maintenance of competent personnel and other fixed expenses (including insurance against rental or income loss during a period of repair or restoration of at least one year).
4. Motor vehicle liability coverage, including coverage of owned, non-owned and hired vehicles, on all delivery vehicles, Mobile Showrooms or other vehicles used in the operation of the Business with coverage of at least $10,000,000 combined single limit.
5. Worker's Compensation and Employer's Liability Insurance (in statutory amounts), Unemployment Insurance and State Disability Insurance (as governing law requires), for your employees.
We can change the required insurance coverages and amounts. If you fail to purchase the required insurance, we can obtain the insurance for you, but we have no duty do so. If we obtain insurance for you, you must pay the premiums or reimburse us for them.
If you are an entity, Equity Interests (as defined below) in you which require registration under any federal or state securities law are assignable through a public offering, so long as: (a) at least 45 days before the proposed registration, you submit a request for our consent accompanied by a non-refundable Securities Registration Fee of $25,000; (b)you reimburse us for any expenses in excess of the Securities Registration Fee incurred in connection with the review of the materials concerning the proposed registration, including our attorneys' fees and travel expenses; (c) you submit to us for review the materials concerning the proposed registration at least 20 days before submission or dissemination of the materials; and, (d) we have the right to approve any description in the registration materials of the License Agreement or of your relationship with us, or any use of the Proprietary Marks.
Publicly-traded Equity Interests (defined below) may be assigned without our consent if the assignment is exempt from registration under federal securities laws and if immediately before and after the assignment, the assignor and assignee respectively each own less than 25% of
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the Equity Interests in you.
An "Equity Interest" means any direct membership or partnership interest in you; any legal entity which is a partner, membf Interest" is an Equity Interest traded on any [ electronic reporting service maintained by tr any of its successors. In case of any dispi judgment will be final.
indirect beneficial interest in you; any stock, [r, any stock, membership or partnership interest in
of stockholder of you. A "publicly-traded Equity jecurities exchange or quoted in any publication or
National Association of Securities Dealers, Inc. or :e in computing changes of Equity Interests, our
The following definitions apply to this footneje:
"Extraterritorial Sale" means any sale you fiake of bedding or bedding-related products or accessories or related services where the delivery location is outside your Territory.
"Occupied Territory" means any territory in MATTRES® Business.
"Occupied Territory Business" means any Business in an Occupied Territory.
lich there is a licensed or company-owned 1-800
;ensed or company-owned 1-800 MATTRES®
An "Extraterritorial Showroom Order" mefns any customer order you procure for an Extraterritorial Sale contemplating delivenj in another Occupied Territory as a direct consequence of a visit of the customer to voir Showroom, Mobile Showroom, Superstore or Gallery, or, if you are a conversion licensee, ffo your Store or Superstore.
An "Extraterritorial Licensee Call Center O] procured by an existing 1-800-MATTRES® of 1-800-MATTRES® orders (under authi Agreement). Note: under your License Agree] center.
"Extraterritorial Order Revenues" means the n are the subject of an Extraterritorial Order o fulfilled by a 1-800-MATTRES® Business (if deducted from Extraterritorial Order Revenue have been included): (a) the amount of all sa law, are chargeable to customers, if the tax< charged and paid on time to the appropriate ta chargebacks, credits and allowances given MATTRES® Business fulfilling the Order.
ler" is an order for delivery in your Territory
nsee that maintains a call center for the receipt
'rization granted by that licensee's License
ient, you have no authorization to maintain a call
[tail price of all products (and any services) which [an Extraterritorial Licensee Call Center Order
le Business receives payment). There will be [for this computation (but only to the extent they
;s tax receipts or similar tax receipts which, by are separately stated when the customer is
ing authority, and (b) the amount of any refunds,
m good faith to the customer by the 1-800-
If you fulfill an Extraterritorial Showroom Order Territory Business procured, you must pay Extraterritorial Order Revenues you receive. If for delivery in the Territory of an Occupied Business does not want to or cannot fulfill the Territory Business 10% of the Extraterritorial Oi which operates a call center under its license a Call Center Order for delivery in your Territory licensee who relayed the Order 5% of the Exti Item 12 for more information and definition of \\
)r delivery in your Territory which an Occupied
ie Occupied Territory Business 10% of the
>u procure an Extraterritorial Showroom Order
•rritory Business, but the Occupied Territory
jrder, and you do, you must pay the Occupied
ler Revenues you receive. If another licensee,
Jeement, procures an Extraterritorial Licensee
id you fulfill the Order, then you must pay the
territorial Order Revenues you receive. See
rms.
If we become a party to a proceeding concerning an agreement between us and you, and we win, or if we become a party to litigation or insolvency proceedings regarding your license, then you will be liable for our reasonable attorneys' fef s and court costs. If we terminate the License
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The original documents were scanned as an image. The original file can be downloaded at the link above.