It is not surprising that Cosco, in spite of its international stature and highly reputable operations, is faced with mounting competition from US-based retailers such as HEB, TARGET and SAMS. These firms have already contracted with wireless communications distributors such as Sprint, Cingular Direct, and Verizon.

Under these conditions, particularly because Cosco could be negatively impacted if its outlets do not offer readily accessible wireless communications devices to customers, Cosco Group can and should maintain competitive advantage through formal affiliation with Lion Wireless Incorporated. This In-store Cosco Affiliation Proposal would result in offering Cosco customers a full line of hand-held communications devices with multiple carrier options.

• Nature and Scope of Lion Wireless Operations in Texas

Lion Wireless currently serves the San Marcos and San Antonio markets with outlets in prominent and highly visible locations in both cities. Lion Wireless has earned a reputation for excellence in service, commitment to quality, and customer satisfaction.

Each outlet activates wireless devices at the rate of over 100 activations per month per store. We also have dozens of dealer outlets located strategically throughout these two growing urban regions. This qualifies Lion Wireless to enjoy the prestigious status of Level 5 with Voice Stream, for example, and to qualify for similar status with the other well-known carriers whom we represent, namely Sprint, AT&T and Verizon.

Further, Lion Wireless employs an experienced sales force of more than 20 persons, all specialized in properly representing and demonstrating the full range of wireless merchandise we feature.

Not insignificantly, Cosco Group and Wireless Mission Statements are fully compatible, providing another valid reason to enter into a mutually profitable affiliation.

Upon entering into this Affiliation, Cosco will be mentioned, free of charge, in all Lion Wireless Advertising throughout the Greater San Antonio area.

Cosco will enter the ranks of other major distributors now featuring wireless in-store outlets for the convenience of customers.

Cosco will be paid a monthly rental amount to be negotiated for floor-space within its stores.

• Lion Wireless has already entered into a similar Contractual Affiliation with several Universities in Greater San Antonio and in San Marcos, among which are:

• Lion Wireless is willing and able to commit to a long-term lease arrangement.

Because of financial stability and solidly anchored operations, Lion Wireless is in a position to enter into a long-term relationship with Cosco.

• Cosco Group would incur no liability whatsoever for any of Lion Wireless?in-store business activity.

Naturally, all transactions and activations conducted within Cosco facilities by Lion Wireless would remain the full responsibility of Lion Wireless, and Cosco would be shielded for any and all liability arising therefrom.

Thanking you for the serious consideration I feel confident you will grant this proposed affiliation, I remain,

Yours most cordially,

---------------, President-Founder

Lion Wireless Incorporated

San Antonio, Texas

August 15, 2001