Common use of Churn Clause in Contracts

Churn. 4.1 The Dealer’s Churn Percentage must not exceed 14.99% during any quarter of the Term. 4.2 For the purposes of this paragraph 5, the Churn Percentage shall mean the calculated percentage of disconnections, compared to the Dealer’s average base. The Churn Percentage is calculated every month by taking the activity on the preceding quarter and arriving at a notional annualised percentage. This is done by dividing that quarter’s disconnections by the average handset base, then multiplying this by 4 to come to an annualised number and by 100 to turn this into a percentage: total disconnections for last three-month period x 4 x 100 ((opening customer base + closing customer base) / 2) The opening Customer Base is: the Dealer’s handset base at the beginning of the first month of the quarter. (i.e. 1st month of the 3 month period). The closing Customer Base is: the Dealer’s handset base at the end of the last month of the quarter.

Churn. 4.1 The Dealer’s Churn Percentage in respect of O2 Connections must not exceed 14.99% during any quarter of the Term. 4.2 For the purposes of this paragraph 5, the Churn Percentage shall mean the calculated percentage of disconnections, compared to the Dealer’s average base. The Churn Percentage is calculated every month by taking the activity on the preceding quarter and arriving at a notional annualised percentage. This is done by dividing that quarter’s disconnections by the average handset base, then multiplying this by 4 to come to an annualised number and by 100 to turn this into a percentage: total disconnections for last three-month period x 4 x 100 ((opening customer base + closing customer base) / 2) The opening Customer Base is: the Dealer’s handset base at the beginning of the first month of the quarter. (i.e. 1st month of the 3 month period). The closing Customer Base is: the Dealer’s handset base at the end of the last month of the quarter.