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EXHIBIT 99.6
AMENDMENT TO
REGIONAL FRANCHISE LICENSE AGREEMENT
THIS AMENDMENT, made and entered into this _____ day of
_______________, 2000, by and between The Learning Express, Inc., a Delaware
corporation ("LEI") and ________________ ____________________, a
_________________ _________________ ("Regional Owner").
RECITALS
A. LEI and Regional Owner entered into a Learning Express
Regional Franchise License Agreement dated __________,
_______________ (the "License Agreement");
X. XXX has entered into a License Agreement dated as of
November 5, 1999 (the "LEI/LEC Agreement"), with
XxxxxxxxXxxxxxx.xxx, LLC, a Delaware limited liability company
("LEC"), pursuant to the terms and conditions of which LEI has
granted LEC a license (the "License") to use the System, as
defined in the LEI/LEC Agreement, in the development,
operation and promotion of an Internet based, on-line store
(the "On-Line Store");
C. As consideration for the License, LEC will pay LEI a
royalty (the "Royalty"), as defined in the LEI/LEC Agreement
with respect to "Net Sales," as defined in the LEI/LEC
Agreement, accrued by LEC via the On-Line Store;
X. XXX has entered into a Management Services Agreement, dated
as of November 5, 1999 (the "Management Agreement"), by and
among LEI, LEC and XxxxxxxxXxxxxxx.xxx Holdings LLC, a
Delaware limited liability company ("LECH"), the principal
owner of LEC, pursuant to the terms and conditions of which,
among other matters, LEI has agreed, among other matters, to
(1) support LEC's use of the System in the On-Line Store
through assistance with marketing, promotion and exchange of
information regarding sales, customers, vendors, and (2)
contract with each of LEI's regional owners on the terms and
conditions set forth in an Amendment to each regional owner's
respective Regional Franchise License Agreement; and
X. XXX and Regional Owner wish to amend the License Agreement
and reflect the amendment in writing.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. The foregoing recitals are true and correct and are incorporated herein by
this reference.
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2. (a) In consideration of Regional Owner's agreement to execute and
consummate the terms and conditions of this Amendment, LEI
shall cause LECH to issue to Regional Owner, 14,250 Common
Shares of LECH (the "Shares"), for each Regional Territory
granted by LEI to Regional Owner.
(b) Prior to issuance of the Shares, LECH may require Regional
Owner to execute an investment letter or letters to the effect
that the Shares are being acquired by Regional Owner for
Regional Owner's own account for investment purposes, that
Regional Owner has no present intention of offering,
distributing or otherwise disposing of the Shares, and that
Regional Owner shall agree not to dispose of the Shares unless
a registration statement or appropriate qualification is then
in effect under applicable state "Blue Sky" laws with respect
to the Shares or in the opinion of counsel for LECH the Shares
are exempt from the registration or qualification requirements
of such laws.
(c) Prior to issuance of the Shares, Regional Owner shall execute
and enter into the then current Operating Agreement for LECH
and be bound thereby, as a member of LECH. Such Operating
Agreement shall provide, among other matters, that, until such
time as LECH, or a successor entity, has completed an "Initial
Public Offering" (defined below), that all of the Shares shall
be forfeited to LECH immediately upon the termination of
either or both of the License Agreement or this Amendment,
provided, however, that the Shares shall not be subject to
forfeiture in the case where either or both of the License
Agreement and this Amendment are terminated in connection with
the sale or transfer of Regional Owner's rights and
obligations under the License Agreement to a new regional
owner.
(d) Regional Owner agrees that Regional Owner will not, for a
period of at least 180 days following the effective date of
any "Initial Public Offering" (defined below) by LECH (or its
successor-in-interest) or by LEC (or its
successor-in-interest), directly or indirectly, sell, offer to
sell or otherwise dispose of the Shares other than any
securities which are included in such Initial Public Offering,
provided, however, that LECH shall be under no obligation to
include the Shares or any portion thereof in any Initial
Public Offering. If the managing underwriter of any such
Initial Public Offering determines that a shorter time period
is appropriate, the aforementioned 180 day period may be
shortened consistent with the requirements of such managing
underwriter. An "Initial Public Offering" shall mean LECH's,
or a successor entity's, initial distribution of securities in
a firm commitment underwritten public offering to the general
public pursuant to a registration statement filed with the
Securities and Exchange Commission.
3. (a) In consideration of Regional Owner's performance of Regional
Owner's obligations hereunder, LEI shall pay Regional Owner
with respect to each calendar month (or portion thereof)
during the Term, commencing with the month ended January 31,
2002, unless LEC is in breach of the LEI/LEC Agreement, a fee
(the "Fee") equal to the greater of (i) 50% of the Royalty and
(ii) 1.5% of "Net Sales," as defined in the LEI/LEC Agreement,
in
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either case as accrued during such month from the sale
through the On-Line Store of products ordered by customers
whose "xxxx to" address is within the "Regional Territory", as
defined in the License Agreement.
(b) Each installment of the Fee shall be payable to the Regional
Owner within 60 days after the end of the applicable calendar
month. Each payment shall be accompanied by a statement from
LEI, providing the basis for the calculation of the Fee. For
any amount not paid by LEI when due in accordance with the
foregoing, LEI shall pay Regional Owner a late payment penalty
equal to one percent (1%) per month of such unpaid amount, or
if less, the maximum amount permissible under applicable law.
(c) LEI shall have no obligation to pay the Fee in the event LEC
ceases operating the On-Line Store, if LEC becomes insolvent
or makes a general assignment for the benefit of creditors, or
unless otherwise prohibited by law, if a petition in
bankruptcy is filed by LEC, or such a petition is filed
against and consented to by LEC or not dismissed within 30
days, or if a xxxx in equity or other proceeding for the
appointment of a receiver of LEC or other custodian for LEC's
business or assets is filed and consented to by LEC or if a
receiver or other custodian (permanent or temporary) of LEC's
assets or property, or any part thereof, is appointed.
(d) Within 120 days following the end of each fiscal year, LEI
shall make available for review by Regional Owner, a statement
prepared by LEI's chief financial officer, for all Net Sales
for such fiscal year in the Regional Territory. LEI shall
cause LEC to maintain accurate books and records pertaining to
Net Sales for a period of two (2) years following the close of
the fiscal year for which such determinations have been made
and permit Regional Owner and its representatives, upon at
least 10 days prior written notice to LEI, to make
examinations of such books and records during the usual
business hours (without interrupting LEC's normal conduct of
its business) and at the place LEC usually keeps its books and
records.
4. Except for issuance of the Shares and payment of the Fee, Regional
Owner shall have no rights under the License Agreement or otherwise
against LEI or any other party with respect to the operations and sales
of LEC and the On-Line Store regardless of the billing address,
shipping address or other location of the applicable customer or other
person to whom any product purchased through the On-Line Store is
delivered or otherwise on account of any sale of any such product.
5. Except as modified by this Amendment, the License Agreement remains in
full force and effect.
In Witness Whereof, the parties hereto have executed this Amendment the
day and date first above written.
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LEI:
THE LEARNING EXPRESS, INC.
By:
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REGIONAL OWNER:
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