1
EXHIBIT 10.41
ADDENDUM
THIS ADDENDUM to the Franchise Agreement ("Franchise Agreement")
described on the Franchisee Joinder attached hereto is made and entered into
between The Princeton Review Management Corp. (the "Franchisor") and the person
identified on the Franchisee Joinder attached hereto (the "Franchisee")
effective as of May 31, 1995. This Addendum is intended by the parties to add
to, modify and interpret the said Franchise Agreement, and to replace and take
precedence over any term, provision or condition thereof which may be contrary
to, or inconsistent with any provision of this Addendum. Capitalized terms used
herein which are not defined herein shall have the meaning given by the
provisions of the Franchise Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Zee Votes. When a "Zee Vote" is required under this Addendum in order
to approve a Franchisor-proposed action, Franchisor shall conduct a
vote of the Domestic Franchisee Group (as such term is defined in
Paragraph 1.4 below) in accordance with the provisions hereof. When
franchisees in the Domestic Franchisee Group, which together pay no
less than the requisite percentage of the total domestic royalties
received in the prior twelve (12) months by Franchisor from all of the
franchisees in the Domestic Franchisee Group, vote in favor of the
proposed action ("Zee Vote"), approval shall be deemed given by the
entire Domestic Franchisee Group. As used in the immediately preceding
sentence, the term "domestic royalties" shall refer to the royalties
payable to Franchisor in respect of franchisee operations in the United
States only.
1.1 Votes of the Domestic Franchisee Group shall be cast by
written ballot manually signed by a duly authorized
representative of each franchisee in the Domestic Franchisee
Group. Franchisor shall be responsible for preparing and
distributing ballots to all franchisees in the Domestic
Franchisee Group which shall set forth the proposed action in
reasonable detail, the percentage of the vote represented by
each franchisee in the Domestic Franchisee Group (assuming
voting participation by all franchisees in the Domestic
Franchisee Group), any explanatory or policy statements
appropriate in the judgment of Franchisor, and the place to,
and the date by which, ballots must be returned.
2
1.2 Unless otherwise stated in the ballot, any franchisee ballot
not voted, signed and returned by the time specified ("end
date"), which unless waived by Franchisee shall not be less
than fourteen (14) days from the date delivered to Franchisee,
shall be counted as an abstention, and any abstention shall
not be factored into the requisite percentage calculation.
1.3 Within 15 days following the end date of a Zee Vote,
Franchisor shall notify Franchisee of the percentage vote (as
defined in paragraph 1, above) cast in favor of the proposal.
Upon the written request of Franchisee, Franchisor shall
disclose to Franchisee the vote and percentage of each
franchisee in the Domestic Franchisee Group with respect to
any Zee Vote. Franchisee hereby authorizes Franchisor to
provide such information concerning its vote to any other
franchisee in the Domestic Franchisee Group.
1.4 As used herein, the term "Domestic Franchisee Group" shall
mean and include all of The Princeton Review test preparation
franchisees having a "Territory" (which as used herein means,
with respect to any franchisee, the geographical area
specified in Section I.A.1. of the Franchise Agreement
previously entered into by and between Franchisor and such
franchisee) located in the United States, whether or not such
franchisee is an Affiliate of Franchisor, who are in operation
as of the distribution date of the ballots applicable to the
Zee Vote at issue and who have executed an Addendum to their
respective Franchise Agreement identical in all material terms
to this Addendum (including any subsequent amendments hereto).
Those members of the Domestic Franchisee Group which are not
Affiliates of Franchisor shall be referred to as "Independent
Franchisees".
1.5 As used herein, the term "Affiliate" shall mean, with respect
to any person, any other person that, directly or indirectly,
through one or more intermediaries, controls, is controlled
by, or is under common control with, the person specified. The
term "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with"), when
used with respect to any specified person, means the power to
direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise.
2
3
2. National Accounts. Franchisor shall have the right in Franchisee's
Territory to market TPR Services (as such term is defined in Paragraph
2.1 below) to national accounts, at a price to be determined by
Franchisor, subject to the terms of this paragraph.
2.1 A "national account" is an organization having facilities,
personnel, customers, or members located within the Territory
of three or more Franchise Families and which has entered into
an agreement with Franchisor to promote, endorse, sponsor,
recommend, permit or cooperate with the marketing of The
Princeton Review services in their facilities or to their
personnel, customers, or members. "TPR Services" shall mean,
at any time, those business activities then engaged in by The
Princeton Review franchisees in the Domestic Franchisee Group
and which are regularly offered to the public for a fee. As
used herein, the term "Franchise Family" shall mean one or
more franchisees which are Affiliates of one another. When
used in relation to a Franchise Family, the term "Territory"
shall mean the geographical areas encompassed by all of the
Territories of all the franchisees in such Franchise Family.
2.2 Franchisee agrees to provide TPR Services to a national
account at the request of Franchisor, provided that the
following limiting provisions shall apply:
(a) The Franchisee shall not be required to provide any
TPR Services to a national account pursuant to these
provisions which require a price discount of more
than the lesser of $50.00 or 15% ("Maximum Discount
Amount") from the Franchisee's standard retail
prices. The reference to $50.00 in the immediately
preceding sentence shall be annually adjusted for
increases occurring after the first anniversary of
this Addendum in the Consumer Price Index for All
Urban Consumers ("CPI") as published by the Bureau of
Labor Statistics. The Maximum Discount Amount may be
changed by a 75% Zee Vote.
(b) Any and all revenues that may be received by the
Franchisor from national accounts for the sale of any
TPR Services in the Franchisee's Territory shall be
forwarded to the Franchisee within fourteen (14) days
following receipt thereof by the Franchisor. All such
revenues shall constitute Franchisee Gross Receipts
under the Franchise Agreement.
(c) The Franchisee shall not be required to provide any
TPR Services to a national account pursuant to these
provisions at a location which is more
3
4
than 50 miles from any permanent office of the
Franchisee if the Franchisee can demonstrate that the
amount of direct costs which will be incurred in
performing such TPR Services will exceed the amount
of revenues to be derived (net of all sales taxes and
royalty and advertising fees to Franchisor) from such
TPR Services.
2.3 If more than 50% of the personnel, customers, or members of a
national account are located in the Territory of a Franchise
Family (as defined in Section 2.1) which includes Franchisee,
then any agreement made by Franchisor with such national
account pursuant to any part of paragraph 2 is subject to
Franchisee's approval, such approval not to be unreasonably
withheld. Franchisor shall give Franchisee notice in writing
or by fax or electronic mail of a proposed marketing
agreement. If Franchisee does not expressly in writing or by
electronic mail disapprove of the proposal giving its reasons
therefor within ten (10) days following receipt of notice,
approval shall be deemed to have been given.
3. Interactive Technology Products. Notwithstanding any provision to the
contrary contained in the Franchise Agreement, but subject to the terms
and conditions contained in this Section 3, Franchisor shall have the
right to market and sell in Franchisee's Territory instruction
delivered through real time (i.e. contemporaneous, and not pre-recorded
or delayed transmissions) interactive technology which simulates a
classroom or tutoring experience ("Interactive Product").
3.1 Franchisor may not market or sell any Interactive Product in
Franchisee's Territory unless the franchisees which are
Affiliates of Franchisor generally market and sell that same
Interactive Product at substantially similar prices.
3.2 All revenues that are received by the Franchisor from the sale
of any Interactive Product in the Franchisee's Territory
("Interactive Product Revenues") shall be forwarded to the
Franchisee within fourteen (14) days following the end of the
month in which they were received by the Franchisor. All such
revenues shall constitute Franchisee Gross Receipts under the
Franchise Agreement.
3.3 In connection with the marketing and sale of an Interactive
Product in Franchisee's Territory, Franchisee shall provide
such reasonable and necessary services in support of such
Interactive Product as may be requested by Franchisor unless
the Franchisee can demonstrate that the amount of direct costs
which will
4
5
be incurred in performing such services will exceed the amount
of revenues to be derived by Franchisee (net of all sales
taxes and royalty and advertising fees to Franchisor) from the
sale of such Interactive Product. Notwithstanding the
foregoing, the Franchisee shall not be required to provide any
services pursuant to this Section 3.3 which are not similar to
the types of services ordinarily provided by the Franchisee in
the conduct of its business under the Franchise Agreement.
3.4 Franchisor may deduct and retain from Interactive Product
Revenues the amount of direct costs actually paid by
Franchisor which are properly allocable to the sale or
marketing of an Interactive Product in Franchisee's Territory.
Franchisee Gross Receipts subject to royalty-service and
advertising fee payments under the Franchise Agreement and
attributable to an Interactive Product shall be reduced by
twice the Interactive Excess, as hereafter defined, of such
product. If any direct costs are payable to Franchisor or any
Affiliate of Franchisor, the amount thereof shall not exceed
the amount which would be paid for the same or comparable
product or service sold or provided by a third party in an
arms-length transaction. As used above, the term "Interactive
Excess" shall mean, with respect to any Interactive Product,
the amount, if any, by which the sum of (i) the direct costs
deducted hereunder by Franchisor with respect to such
Interactive Product, plus (ii) reasonable direct costs
incurred by the Franchisee in fulfilling the requirements
imposed on the Franchisee by the Franchisor pursuant to
Section 3.3 hereof with respect to the Interactive Product,
exceeds fifty percent (50%) of Interactive Product Revenues
attributable to such Interactive Product.
4. Relocated TPR Students. Franchisee shall provide test preparation
services to students who have enrolled with other franchises in
accordance with the Statement of Inter-Franchise Transfer Policy
appended hereto as Attachment 1 and herein incorporated by reference.
This transfer policy may be changed by a 75% Zee Vote.
5. Advertising Promotion And Public Relations By Franchisor. Franchisor
may at its option and discretion, for so long as the Franchise
Agreement remains in effect, fulfill its obligation to develop and
produce advertising and promotional materials, place advertising, and
conduct advertising, promotional and public relations programs and
campaigns by using its own employees. Franchisor shall be entitled to
receive reimbursement from the Advertising Fund established pursuant to
the Franchise
5
6
Agreement for its direct expenses to the extent they are reasonable and
used for the purposes specified in Section V of the Franchise
Agreement. Franchisor shall provide to Franchisee, every six months, an
accounting of reimbursements claimed pursuant to this Paragraph 5.
6. Expansion of the TPR Method. The definition of the "TPR Method"
expressly includes without limitation instruction for academic
subjects, computer usage, languages, negotiation, financial aid, test
preparation and admissions advice for actual or prospective grade
school, high school, college, graduate and professional school
students, and adults, and includes the name and xxxx STUDENT ACCESS and
any name confusingly similar thereto. Except as expressly contemplated
herein, Franchisor and Franchisee each agree and covenant with the
other that neither of them, nor any of their Affiliates, shall become
engaged or involved in any business or activity at any time during the
term of the Franchise Agreement which relates to, involves or is
competitive with the TPR Method other than (i) any such business or
activity conducted by Franchisee under the name "The Princeton Review"
pursuant to, and in accordance with, the terms of the Franchise
Agreement, (ii) the publishing business to be conducted by The
Princeton Review Publishing Company, L.L.C. ("PUB"), an Affiliate of
the Franchisor, and (iii) any such business or activity conducted by
Franchisor, or an Affiliate of Franchisor, under the name "The
Princeton Review" in a defined geographical area outside of
Franchisee's Territory in accordance with the TPR Method and with the
obligation to pay to the Franchisor royalty-service and advertising
fees to the same extent and manner as Franchisee. Nothing contained in
this Paragraph 6 shall be construed to affect or otherwise alter the
post-termination obligations of Franchisee contained in Section XIV of
the Franchise Agreement. If Franchisee should ever sell, assign or
otherwise transfer all of the franchise rights granted under the
Franchise Agreement in accordance with the provisions thereof, then the
Franchise Agreement, in accordance with Section XI.B. thereof, shall be
deemed to have been terminated by mutual consent and the term thereof
shall be deemed to have expired upon completion of such sale,
assignment or other transfer, and all obligations of Franchisee under
Section XIV. thereof shall become effective.
6.1 In Section VI.B.1.a of the Franchise Agreement, the word "and"
appearing after the phrase "circulated generally to all other
franchisees" and before the phrase "except as otherwise
hereunder" is hereby replaced with the word "or".
6
7
7. TPR Publishing.
7.1 Franchisor represents to Franchisee, and Franchisee
acknowledges, that pursuant to the provisions of Section 4 of
the License Agreement between Franchisor and THE PRINCETON
REVIEW PUBLISHING COMPANY, L.L.C. ("PUB"), PUB agreed that
"Any product, technique or xxxx developed or acquired by PUB
(a "PUB Product") shall be offered to [Franchisor] for (i)
[Franchisor's] own use in the operation of the Course
Business, and (ii) use by [Franchisor's] franchisees in
accordance with, and subject to, the terms contained in the
franchise agreements between [Franchisor] and each of its
franchisees." In that connection, the parties agree that
Franchisee's use of PUB's products shall be allowed only in
accordance with the following provisions:
(a) Franchisee shall have the right and license to (i) use PUB's
products in The Princeton Review courses offered pursuant to
the Franchise Agreement and (ii) purchase from Franchisor or
any designee or affiliate of Franchisor or any of PUB's
products for such purpose at PUB's incremental cost of
production plus 10%, subject to the following limitations and
conditions:
(1) None of PUB's products purchased by Franchisee from
Franchisor pursuant to this Section 7.1(a) may be
resold to any person at any price. Such products may
only be distributed to students enrolled in The
Princeton Review courses, offered pursuant to the
Franchise Agreement, at no additional cost or charge.
(2) The use of any PUB product in any The Princeton
Review course must be approved in advance by
Franchisor, such approval not to be unreasonably
withheld.
(3) The sum of the suggested retail prices of all of the
PUB products distributed in any single The Princeton
Review course pursuant to the right contained in this
Section 7.1(a) shall not exceed 40% of the total cost
of such course.
(b) In addition to, and without limiting, the rights created in
Section 7.1(a) hereof, and subject to the availability of
products, Franchisee shall have the right to purchase from
Franchisor any of PUB's products at the Applicable Wholesale
Price (as herein defined) and resell such products, either
alone or together with Franchisor-approved services provided
by Franchisee in
7
8
Franchisee's Territory. Franchisor's approval is not to be
unreasonably withheld.
(1) For purposes of the Franchise Agreement, the revenues
attributable to the sale by the Franchisee of any PUB
product purchased from the Franchisor shall not be
subject to the royalty fee or advertising fee
provisions of the Franchise Agreement except to the
extent that the price charged for a PUB product
exceeds its suggested retail price. All revenues
attributable to services sold with any PUB product
shall be subject to such royalty and advertising fee
payments.
(2) As used herein, the term "Applicable Wholesale Price"
shall mean, with respect to any PUB product, the
lowest wholesale price charged contemporaneously by
PUB for such product to any one of its three largest
wholesale customers.
(c) As used herein, references to "PUB's
products" or a "PUB product" shall mean and
refer to (i) for purposes of section 7.1(b)
hereof, any and all materials, supplies and
products of PUB sold at retail which are not
subject to an exclusive distribution
agreement and (ii) for all other purposes of
this Addendum, any and all materials,
supplies and products of PUB which are
offered to the public at retail through any
means.
7.2 Franchisee shall be provided with all mailing list information
maintained by one or both of PUB and Franchisor to the extent
that such mailing list contains information about persons
within the Franchisee's Territory, and shall have the right to
use such information only for the promotion of Franchisee's
The Princeton Review business. Franchisee shall not permit the
use of such information by any party without the prior,
express written consent of Franchisor.
7.3 Franchisee shall provide PUB and Franchisor with mailing list
information it maintains, and PUB and Franchisor shall have
the right to sell or rent such information for any business
purpose, including any which may not have been permitted under
the Franchise Agreement prior to this Addendum, provided that
such prior unpermitted purpose is approved by a 75% Zee Vote.
7.4 If Franchisor has not developed a The Princeton Review course
utilizing a PUB product, then Franchisee, following notice to
Franchisor, may at its own expense develop such a course ("PUB
Course"), and offer it within Franchisee's Territory,
8
9
subject to the terms of Subsection 7.1 above in regard to the
use of PUB's products in such PUB Course. Any PUB Course shall
be subject to Franchisor's approval based on (i) quality
standards equivalent to other products available under the TPR
Method, (ii) lack of any legal restriction and (iii)
suitability of the nature of such PUB Course for inclusion and
identification with other courses offered under the TPR Method
(considering the expertise and objectives of the Franchisor
and the preferences of the consumer market it serves), and
subject also to the reimbursement of direct costs to
Franchisor, if any. All PUB Courses offered shall be deemed
components of the TPR Method subject to all applicable
provisions of the Franchise Agreement. As used in this
Subsection 7.4, the term "course" means a defined and
standardized process of live instruction.
(a) The right created in Section 7.4 hereof to develop
and offer a PUB Course in the Franchisee's Territory
shall specifically include the right and license to
use any trade name, trademark or service xxxx used in
conjunction with the PUB product upon which such PUB
Course is based, subject to the advance consent and
approvals of the Franchisor and other limitations
based on reasonable and prudent trademark usage
practices.
(b) Franchisor shall have the right in its sole
discretion to incorporate any PUB Course into the TPR
Method, as defined in the Franchise Agreement and
this Addendum thereto, and offer the course generally
to all TPR franchisees without payment of
compensation to Franchisee. Upon request, Franchisee
shall provide Franchisor with the information and
cooperation reasonably necessary to achieve this
objective.
8. Computer Support and Access to Data. The parties agree that the
computer systems are critical to the efficient and effective operation
of their respective The Princeton Review business and to proper
oversight.
8.1 In the event that an error in The Princeton Review software or
data makes it impossible for the Franchisee to manage his
course operations, Franchisor shall make its best efforts to
provide computer support within 48 hours of receipt of written
or electronic mail notice. Understanding that running a TPR
franchise often requires heavy computer use on weekends,
Franchisor shall attempt to provide computer support on
Saturday afternoons (12:00 pm-5:00 pm New York time) during
heavy use times.
9
10
8.2 Within four (4) days of the first and fifteenth of every
month, Franchisee shall send to Franchisor on computer tape a
copy of data regarding Franchisee's business activities
compiled and entered in accordance with the specifications,
instructions and computer program provided by Franchisor,
which may be reasonably revised from time to time. Such tapes
shall be sent by such means as they will usually be received
by Franchisor within five (5) days. Franchisor hereby releases
Franchisee from claims prior to the date of this Addendum
arising from the failure to provide such tapes.
8.3 The parties acknowledge that it is in the best interest of The
Princeton Review for each franchised office to run an
up-to-date and compatible software system, including network,
word processing, spreadsheet, page layout, electronic mail,
and other software deemed both reasonable and necessary by
Franchisor to run the franchised business efficiently and
effectively. Therefore, Franchisee agrees that any software he
uses in the operation of the business shall have been legally
acquired by Franchisee, and that Franchisor may require
software purchases of up to $200 per full time office employee
per year, such amount to be annually adjusted for increases in
the Consumer Price Index for all Urban Consumers. Franchisor
shall not charge Franchisee for the cost of software supplied
by Franchisor that is specific to the administration of the
business.
8.4 If and when Franchisee is connected to the Franchisor's Wide
Area Network, Franchisor will provide Franchisee support for
all legally-owned, Franchisor-approved network software in a
manner similar to the support Franchisor provides for the
franchisee operations which Franchisor owns or controls.
Franchisor may recover from Franchisee its reasonable
proportionate costs for maintaining the connection with
Franchisee.
9. Affiliated Suppliers. If KIN, Inc. or any other Affiliate of Franchisor
sells materials to any of the other The Princeton Review franchises,
Franchisor will exercise its authority over such Affiliate to have it
sell such materials to Franchisee, provided, and on condition that,
Franchisee is not in default of any obligation to Franchisor or any
Affiliate under the Franchise or other agreement. A default under any
obligation which the Franchisee incurs in connection with the purchase
of materials pursuant to this Section 9 from KIN, Inc. or any other
Affiliate of Franchisor shall constitute a default under the Franchise
Agreement.
10
11
10. Extension of Term of Franchise Agreement. If the remaining portion of
the initial term of Franchisee's Franchise Agreement with Franchisor is
a period of ten years or less, it is mutually agreed that, as of the
expiration of that Agreement, the initial term will be extended until
December 31, 2005, provided that Franchisee has paid Franchisor a
renewal fee of $2,500. If the Franchise Agreement does not require
payment of a renewal fee upon any extension of the term thereof, then
the $2,500 renewal fee referred to in the immediately preceding
sentence shall not be payable by Franchisee to Franchisor. The
provisions of this Paragraph 10 shall not alter, modify or in any other
way affect any provisions contained in the Franchise Agreement
concerning other extension or renewal rights in favor of the
Franchisee.
11. Favored Nation Clause. Notwithstanding any prior agreement between
Franchisor and Franchisee, and without incurring any liability or other
obligation arising therefrom, Franchisor shall have the unlimited right
to negotiate and enter into Franchise Agreements with any Franchisee
located outside of the United States which may include any term,
condition, provision or covenant different from those provided in the
Franchise Agreement or Agreements with Franchisee.
12. New Programs. The terms under which Franchisor shall offer a new course
("New Course"), other than one designed to prepare students for a
college or graduate school admission test, shall be governed by the
following provisions in lieu of the provisions contained in Section
VI.B.1.c. of the Franchise Agreement.
12.1 Franchisor shall only offer a New Course to Franchisee (the
"New Course Offer") if the New Course has been tested, as that
term is defined in the Franchise Agreement, for at least one
year. Notwithstanding the preceding sentence, if Franchisor is
wholly, or in some material portion, developing the New Course
through the making of a purchase of a course that has been
operated for at least one year by an unrelated and
unaffiliated party ("Development Purchase"), then it will make
the New Course Offer as soon as reasonably possible after
Franchisor determines that it intends to make such purchase.
12.2 When it makes a New Course Offer, Franchisor shall provide to
Franchisee:
(a) All material information then known by Franchisor
relating to (i) such New Course (including historical
financial information) and (ii) the terms of any
11
12
proposed Development Purchase, including copies or
summaries of any legal documents or current drafts of
legal documents relating to such purchase. Franchisor
may condition the right to receive such information
upon the execution of a reasonable non-disclosure
agreement. Franchisor shall update such information
from time to time as necessary to advise Franchisee
of any material changes.
(b) A written proposal ("Franchisor's Allocation
Formula") setting forth a specific method or formula
for allocating the cost of developing and/or
acquiring the New Course.
(c) Franchisee shall have the right to request additional
information for a period of fifteen (15) days
following receipt of the foregoing information and
proposal, and Franchisor shall respond to all such
reasonable requests within ten (10) days following
receipt thereof.
12.3 No earlier than 15 days after the close of the period within
which Franchisee may request additional information pursuant
to Section 12.2 hereof, Franchisor shall conduct a Zee Vote to
determine if the Franchisor's Allocation Formula is acceptable
to the franchisees in the Domestic Franchisee Group.
12.4 If Franchisor's Allocation Formula is approved by a 75% Zee
Vote, then it shall be, for all purposes hereof, the Adopted
Allocation Formula binding on all franchises in the Domestic
Franchisee Group. If (i) Franchisor's Allocation Formula is
not approved by a 75% Zee Vote and (ii) Franchisor wishes to
continue to pursue the New Course Offer, then Franchisor may
provide written notice ("Arbitration Notice") to all
franchisees in the Domestic Franchisee Group that the
selection of an Adopted Allocation Formula is being submitted
for resolution by arbitration. Concurrently, Franchisor shall
file a Demand for Arbitration with the appropriate office of
the American Arbitration Association. The arbitration shall be
conducted in accordance with the following provisions:
(a) A single arbitrator shall be chosen by mutual
agreement between the Franchisor and the Independent
Franchisees. If no such mutual agreement is reached
within five days, then the arbitrator shall be
selected in accordance with the commercial expedited
arbitration rules of the American Arbitration
Association ("AAA"). For purposes of these
provisions, any decision or selection made by any
group of Independent Franchisees who, in the
12
13
aggregate, pay more than 50% of the total royalties
received by Franchisor from Independent Franchisees
in the most recently completed calendar year, shall
be binding on all of the Independent Franchisees. The
arbitration proceedings shall be conducted in
Atlanta, GA.
(b) Franchisor shall submit to the arbitrator a copy of
Franchisor's Allocation Formula, and any written
memorandum in support thereof, within 21 days after
giving the Arbitration Notice to Franchisees.
(c) Any franchisee, excluding those which are Affiliates
of Franchisor, may submit to the arbitrator an
alternative allocation formula that is materially
different from Franchisor's Allocation Formula
("Alternative Formula") within 20 days after receipt
of the Arbitration Notice. If Franchisor has
submitted original data that it did not supply to
Franchisee under Section 12.2, then Franchisee may
submit its Alternative Formula within 5 days after
receipt of Franchisor's memorandum submitted pursuant
to clause b.
(d) All formulas submitted pursuant to Subsections
13.3(b) and (c) may be accompanied by a written
memorandum and exhibits, copies of which shall be
provided to all other participating parties.
(e) Within 14 days after the last date by which
Franchisee may submit an Alternative Formula pursuant
to clause (c), Franchisor and those franchisees which
have submitted Alternative Formulas shall meet with
the arbitrator to present oral arguments in favor of
their respective proposals. The arbitrator shall
select one allocation formula, from among the
Franchisor's Allocation Formula and the Alternative
Formulas, without modification, based upon principles
of fairness, equity and sound business practices. The
formula so selected by the arbitrator shall be, for
all purposes hereof, the Adopted Allocation Formula
binding on Franchisor and all Franchisees in the
Domestic Franchisee Group. The arbitrator's decision
shall be final. In any event, Franchisor may elect to
postpone or cancel any Development Purchase.
(f) The fees and costs of filing such arbitration and the
fees of the arbitrator shall be split between the
parties to the arbitration as follows: (i) Franchisor
shall pay 40% of such fees; and (ii) all parties
(including Franchisor) who submit allocation formulas
to the arbitrator pursuant to this Section but whose
formulas are not selected shall pay the remainder on
a per-capita
13
14
basis. All other expenses and costs related to such
proceeding shall be borne by the party incurring
them.
12.5 Following the final determination of the Adopted Allocation
Formula, Franchisor shall give Franchisee a notice ("Offer
Notice") extending to Franchisee the exclusive option to
market and sell the New Course in the Franchisee's Territory
pursuant to the Franchise Agreement and on condition of
compliance with Franchisee's obligations under the terms of
the Adopted Allocation Formula. If Franchisee does not notify
Franchisor of its decision to exercise such option within 20
days after receipt of the Offer Notice, Franchisor may grant
the right to market and sell the New Course in Franchisee's
Territory to any other party or parties, but only under a name
or xxxx other than THE PRINCETON REVIEW, any other proprietary
name or xxxx currently or formerly licensed to Franchisee by
Franchisor, or any other name or xxxx that is confusingly
similar to the foregoing.
12.6 The formulas presented under Subsections 12.4(b) and (c)
should be prepared in accordance with prudent business
practices and devote attention and discussion to, among
others, the following considerations:
(a) Only the portion of the Franchisor's total cost of
development attributable to courses that may be run
by franchisees (the "Course Price") shall be
allocated for reimbursement by the franchisees.
Franchisor's total cost of development may include
acquisition costs, imputed or actual interest, and,
in the event that the form of the reimbursement is in
a different form than Franchisor's payment of costs,
a factor that accounts for such differential.
(b) The Course Price should be divided into the amount
fairly paid to acquire revenues currently realized
from existing sales of the course ("Existing Sales")
and any amount fairly paid in anticipation of
potential future revenues reasonably projected
("Future Sales").
(c) The Existing Sales portion of the Course Price should
be allocated among franchisees according to the
proportion of such sales currently made in their
respective Territories. Some part of the Existing
Sales portion of the Course Price also may be
allocable to the Franchisor to the extent that
imputed royalties from such sales exceed the fair
value or cost of services to be provided by
Franchisor.
14
15
(d) The Future Sales portion of the Course Price should
be allocated among the then-existing franchisees
according to the proportion of a reasonable measure
of the potential sales anticipated in their
respective Territories.
13. Grouping and Subdividing. Notwithstanding anything to the contrary
contained in the Franchise Agreement, if (i) Franchisee or an Affiliate
of that Franchisee should now or hereafter be a licensed The Princeton
Review franchisee under one or more other Franchise Agreements ("Other
Franchise Agreements") with Franchisor covering other Territories, and
(ii) Franchisee and its Affiliates propose to sell, assign, or transfer
all or any portion of their rights under the Franchise Agreement and
the Other Franchise Agreement in a single transaction that has a single
purchase price and does not include any non franchise-related assets,
then the following provisions shall apply:
13.1 The provision of Section XI.B of the Franchise Agreement
relating to the Franchisor's first right and option to acquire
such right or interest shall apply to the entire transaction
only.
13.2 Franchisor shall have no right to require that the portion of
such transaction which relate to Franchisee's rights or
interests under the Franchise Agreement be separated out of
the transaction with a separate purchase price allocated
thereto for purposes of Section XI.B. of the Franchise
Agreement.
13.3 Nothing contained in this Section 13 shall be deemed to be a
waiver or relinquishment of Franchisor's right to enforce and
receive separate transfer fee payments due under each
individual Franchise Agreement applicable to each separate
franchise being sold or transferred.
IN WITNESS WHEREOF, the parties have executed this Addendum along with
two Attachment intended thereby to be legally bound. THE PRINCETON REVIEW
MANAGEMENT CORP.
By: /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx Xxxxxxx
---------------------------------
Title: President
--------------------------------
WITNESS/ATTEST
____________________________
15
16
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: July 15, 1987.
Name of Franchisee(s): Xxxxxxx X. Xxxxxx & Xxxxxxx X. Xxxxxx, Xx., Jointly.
----------------------------------------------------
Geographical Area of Franchise Agreement: Western Mass.
--------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxx/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxx & Xxxxxxx X. Xxxxxx, Xx.
------------------------------------------
Address for Notice:
X.X. Xxx 000
------------
Xxxxxxxx, XX 00000
------------------
------------------
16
17
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: September 1985.
Name of Franchisee(s): The Princeton Review of Orange County, Inc.
-------------------------------------------
Geographical Area of Franchise Agreement: Orange County, CA.
-----------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxx Xxxxxxx
----------------
Printed Name of Officer (if applicable):
Xxxx Xxxxxxx
------------
Address for Notice:
0000 Xxxxxxxxx Xx. # 000
------------------------
Xxxxxx, XX 00000
----------------
----------------
17
18
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: June 1986.
Name of Franchisee(s): Princeton Review of Boston, Inc.
--------------------------------
Geographical Area of Franchise Agreement: 10 eastern counties of Mass.
----------------------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx Xxxxxxxxx
---------------------
Printed Name of Officer (if applicable):
Xxxxxxx Xxxxxxxxx
------------------
Address for Notice:
00 Xxxxx Xxxxxx, # 0
---------------------
Xxxxxx, XX 00000
----------------
----------------
18
19
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 5/31/95.
--------
Name of Franchisee(s): Xxxxxxxx Xxxxx.
---------------
Geographical Area of Franchise Agreement: Wake, Orange, Durham, Guildford and
Xxxxxxxx counties - NC.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxxx Xxxxx
------------------
Printed Name of Officer (if applicable):
Xxxxxxxx Xxxxx
---------------
Address for Notice:
0000 X. Xxxxxxxx Xx., # 000
---------------------------
Xxxxxx Xxxx, XX 00000
---------------------
---------------------
19
20
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 5/31/95.
-------
Name of Franchisee(s): Xxxx X. Xxxxx.
-------------
Geographical Area of Franchise Agreement: Mecklenburg County, NC.
-----------------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxx X. Xxxxx
-----------------
Printed Name of Officer (if applicable):
Xxxx X. Xxxxx
--------------
Address for Notice:
0000 Xxxxxxxxxx Xxxx
--------------------
Xxxxxxxxx, XX 00000
-------------------
-------------------
20
21
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: February 1990.
Name of Franchisee(s): Test Services, Inc., Cleveland.
------------------------------
Geographical Area of Franchise Agreement: Ashland, Cuyahoga, Xxxx and
Medina counties in the State of Ohio.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxxxxx
--------------------
Address for Notice:
0000 Xxxxx Xxxxxxxx
-------------------
Xxxxxx, XX 00000
----------------
----------------
21
22
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: February 1998.
Name of Franchisee(s): Test Services, Inc. - Denver.
----------------------------
Geographical Area of Franchise Agreement: Xxxxx, Arapahoe, Boulder, Denver,
Xxxxxxx, El Paso, Jefferson and Larimer counties in the State of Colorado.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxxxxx
--------------------
Address for Notice:
0000 Xxxxx Xxxxxxxx
-------------------
Xxxxxx, XX 00000
----------------
----------------
22
23
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: February 1989.
Name of Franchisee(s): Test Services, Inc. - Detroit.
------------------------------
Geographical Area of Franchise Agreement: Oakland, Washtenaw, Xxxxx, and Xxxxxx
counties in State of Michigan.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxxxxx
--------------------
Address for Notice:
0000 Xxxxx Xxxxxxxx
-------------------
Xxxxxx, XX 00000
----------------
----------------
23
24
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: May 1986.
Name of Franchisee(s): Test Servces, Inc. - Connecticut.
--------------------------------
Geographical Area of Franchise Agreement: Fairfield, Litchfield, New haven, New
London counties in the Connecticut.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxxxxx
---------------------
Address for Notice:
0000 Xxxxx Xxxxxxxx
-------------------
Xxxxxx, XX 00000
----------------
----------------
24
25
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: May 1990.
Name of Franchisee(s): Test Services, Inc. - North Florida.
-----------------------------------
Geographical Area of Franchise Agreement: Orange, Seminole, Lake, Osceola,
Volusia, Leon, Gadsen, Liberty, Wakulla, Jefferson, Duval, Nassau, Baker,
Bradford, Clay, St. Xxxxx, Alachua counties in the State of
Florida.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxxxxx
--------------------
Address for Notice:
0000 Xxxxx Xxxxxxxx
-------------------
Xxxxxx, XX 00000
----------------
----------------
25
26
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 5/11/95.
-------
Name of Franchisee(s): Lecomp Co, Inc./LEC.
Geographical Area of Franchise Agreement: Sourthern California.
--------------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxx Xxxx Xxxxxx
---------------------
Printed Name of Officer (if applicable):
Xxxxx Xxxx Xxxxxx
-----------------
Address for Notice:
0000 Xxxxxxx Xxxxxx (#310)
--------------------------
Xxx Xxxxxxx, XX 00000
---------------------
---------------------
26
27
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: May 1986.
--------
Name of Franchisee(s): Test Services, Inc. - South Florida.
-------------------------------------
Geographical Area of Franchise Agreement: Broward, Dade, De Soto, Hardee,
Hillsborough, Manatee, Palm Beach, Pasco, Pinellas, Polk, Sarasota counties in
the State of Florida.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------
Printed Name of Officer (if applicable):
Xxxxxxx A, Xxxxxxxxx
--------------------
Address for Notice:
0000 X. Xxxxxxxx
----------------
Xxxxxx, XX 00000
----------------
----------------
27
28
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement:
--------------------------------------------------
Name of Franchisee(s): The Princeton Review of NH and Maine.
Geographical Area of Franchise Agreement: States of New Hampshire and Maine.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx Xxxxxxxxx
---------------------
Printed Name of Officer (if applicable):
Xxxxxxx Xxxxxxxxx
-----------------
Address for Notice:
00 Xxxxx Xxxxxx, # 0
--------------------
Xxxxxx, XX 00000
----------------
----------------
28
29
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: June 1986.
Name of Franchisee(s): The Princeton Review of New Jersey, Inc.
----------------------------------------
Geographical Area of Franchise Agreement: Certain counties in the State of New
Jersey (north of Xxxxxx County).
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxx Xxxxx
----------------
Printed Name of Officer (if applicable):
Xxxxxx Xxxxx
------------
Address for Notice:
000 Xxxxxx Xx.
--------------
Xxxxxxxxx, XX 00000
-------------------
-------------------
29
30
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 7/1/88.
------
Name of Franchisee(s): T.S. T.S., Inc.
---------------
Geographical Area of Franchise Agreement: Originally Jefferson and Orleans
county, New Orleans, Louisiana, amended to the entire State of Louisiana and
Xxxx Xxx county in the State of New Mexico.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Rob Case/ Xxxxx Xxxxxxxx
----------------------------
Printed Name of Officer (if applicable):
Rob Case/ Xxxxx Xxxxxxxx
------------------------
Address for Notice:
000 X. Xxxx Xxx Xx., # 0
------------------------
Xxxxxxx, XX 00000
-----------------
-----------------
30
31
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 12/1/94
-------
Name of Franchisee(s): T.S. T.S., Inc.
---------------
Geographical Area of Franchise Agreement: State of Oklahoma.
-----------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Rob Case/ Xxxxx Xxxxxxxx
----------------------------
Printed Name of Officer (if applicable):
Rob Case/ Xxxxx Xxxxxxxx
------------------------
Address for Notice:
000 X. Xxx Xxxx Xx., # 0
------------------------
Xxxxxxx, XX 00000
-----------------
-----------------
31
32
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 7/1/87.
------
Name of Franchisee(s): T.S.T.S., Inc.
--------------
Geographical Area of Franchise Agreement: State of Arizona.
----------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Rob Case/ Xxxxx Xxxxxxxx
----------------------------
Printed Name of Officer (if applicable):
Rob Case/ Xxxxx Xxxxxxxx
------------------------
Address for Notice:
000 X. Xxx Xxxx Xx., # 0
------------------------
Xxxxxxx, XX 00000
-----------------
-----------------
32
33
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: June 1986.
Name of Franchisee(s): The Princeton Review of Pittsburgh, Inc.
----------------------------------------
Geographical Area of Franchise Agreement: Western PA.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxx Xxxxx
----------------
Printed Name of Officer (if applicable):
Xxxxxx Xxxxx
------------
Address for Notice:
X.X.Xxx 81123
-------------
Xxxxxxxxxx, XX 00000
--------------------
--------------------
33
34
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: June 6, 1995.
Name of Franchisee(s): TPR Puerto Rico/ Xxxxx Xxxxxx.
-----------------------------
Geographical Area of Franchise Agreement: Puerto Rico.
-----------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxx Xxxxxx
----------------
Printed Name of Officer (if applicable):
Xxxxx Xxxxxx
------------
Address for Notice:
00 Xxxxxxx Xx.
--------------
Santuree, P.R. 00911
--------------------
--------------------
34
35
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 1/87.
----
Name of Franchisee(s): The Princeton Review of RI, Inc.
Geographical Area of Franchise Agreement: Rhode Island.
------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxx X. Xxxxxxx
-------------------
Printed Name of Officer (if applicable):
Xxxx X. Xxxxxxx
---------------
Address for Notice:
000 Xxxxxx Xx.
--------------
Xxxxxxxxxx, XX 00000
--------------------
--------------------
35
36
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: June 1, 1986.
Name of Franchisee(s): The Princeton Review of St. Louis, Inc.
---------------------------------------
Geographical Area of Franchise Agreement: Missouri County and City of St. Louis.
-------------------------------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx Xxxxxxxx
--------------------
Printed Name of Officer (if applicable):
Xxxxxxx Xxxxxxxx
----------------
Address for Notice:
0000 Xxxxx Xxxxxxxxx, Xxxxx 000
-------------------------------
Xx. Xxxxx, Xxxxxxxx 00000-0000
------------------------------
------------------------------
36
37
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: June 1989.
Name of Franchisee(s): Test Services, Inc. - San Diego.
-------------------------------
Geographical Area of Franchise Agreement: San Diego county in the State of
California.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxxxxx
--------------------
Address for Notice:
0000 X. Xxxxxxxx
----------------
Xxxxxx, XX 00000
----------------
----------------
37
38
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: September 1985.
Name of Franchisee(s): The Princeton Review - Peninsula, Inc.
--------------------------------------
Geographical Area of Franchise Agreement: San Mateo and Santa Xxxxx counties
(California).
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxx X. Xxxxxx
--------------------
Printed Name of Officer (if applicable):
Xxxxxx X. Xxxxxx
----------------
Address for Notice:
0000 Xxxxxx Xxx., # 000
-----------------------
Xxx Xxxx, XX 00000
------------------
------------------
38
39
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: May 21, 1995.
Name of Franchisee(s): The Kafiristan Blokes.
---------------------
Geographical Area of Franchise Agreement: Tennessee
---------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ F. Xxxx XxXxxxxx/Xxxxxxx X. Xxxxx
-------------------------------------
Printed Name of Officer (if applicable):
F. Xxxx XxXxxxxx/Xxxxxxx X. Xxxxx
---------------------------------
Address for Notice:
The Princeton Review
--------------------
0000 Xxxxxxx Xxxx.
------------------
Xxxxxxxxx, XX 00000
-------------------
39
40
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: Sept. 15, 1986.
--------------
Name of Franchisee(s): T.S.T.S., Inc.
--------------
Geographical Area of Franchise Agreement: All counties in Texas.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Rob Case/ Xxxxx Xxxxxxxx
----------------------------
Printed Name of Officer (if applicable):
Rob Case/ Xxxxx Xxxxxxxx
------------------------
Address for Notice:
000 X. Xxx Xxxx Xx., # 0
------------------------
Xxxxxxx, XX 00000
-----------------
-----------------
40
41
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: 5/31/95.
-------
Name of Franchisee(s): Xxxxxx Xxxxxx (Utah).
--------------------
Geographical Area of Franchise Agreement: State of Utah .
--------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxx Xxxxxx
-----------------
Printed Name of Officer (if applicable):
Xxxxxx Xxxxxx
-------------
Address for Notice:
The Princeton Review
--------------------
0 X. Xxxxxxxx, Xxxxx 000
------------------------
Xxxx Xxxx Xxxx, XX 00000
------------------------
41
42
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: September 1986.
Name of Franchisee(s): Test Services, Inc. - Westchester.
---------------------------------
Geographical Area of Franchise Agreement: Dutchess, Putnam, Rockland, Ulster,
Westchester counties in New York.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx X. Xxxxxxxxx
------------------------
Printed Name of Officer (if applicable):
Xxxxxxx X. Xxxxxxxxx
---------------------
Address for Notice:
0000 X. Xxxxxxxx
----------------
Xxxxxx, XX 00000
----------------
----------------
42
43
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: October 1986.
Name of Franchisee(s): The Princeton Review of Northern California, Inc.
-------------------------------------------------
Geographical Area of Franchise Agreement: California: counties of San Francisco,
Marin, Alaveda, Contra and Costa.
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxx Xxxxxxx
----------------
Printed Name of Officer (if applicable):
Xxxx Xxxxxxx
------------
Address for Notice:
0000 Xxxxxxxx
-------------
New York
--------
43
44
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: December 30, 1994.
Name of Franchisee(s): The Princeton Review of Vermont, Inc.
-------------------------------------
Geographical Area of Franchise Agreement: certain counties in Vermont.
---------------------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx Xxxxxxxxx
---------------------
Printed Name of Officer (if applicable):
Xxxxxxx Xxxxxxxxx
-----------------
Address for Notice:
00 Xxxxx Xx., # 0
-----------------
Xxxxxx, XX 00000
-----------------
44
45
FRANCHISEE JOINDER
TO ADDENDUM
By executing in the space provided below, the Person identified below
acknowledges having received and read, and agrees to become a party to, and be
bound by, the Addendum to Franchise Agreement dated effective as of May 31, 1995
which amends and modifies the Franchise Agreement with The Princeton Review
Management Corp. described below.
DESCRIPTION OF FRANCHISE AGREEMENT:
Date of Franchise Agreement: March 1, 1995.
Name of Franchisee(s): The Princeton Review of Hawaii, Inc.
------------------------------------
Geographical Area of Franchise Agreement: State of Hawaii.
---------------
Signature of Franchisee(s) or Authorized
Officer of Franchisee(s):
/s/ Xxxxxxx Xxxxxxxxx
---------------------
Printed Name of Officer (if applicable):
Xxxxxxx Xxxxxxxxx
-----------------
Address for Notice:
00 Xxxxx Xx., # 0
-----------------
Xxxxxx, XX 00000
----------------
----------------
45
46
ATTACHMENT 1: STATEMENT OF INTER-
FRANCHISE TRANSFER POLICY
This Policy is designed to standardize the terns for transferring students
between TPR franchises. In all cases, "Originator" refers to the franchise that
enrolled the student first. "Receiver" refers to the franchise to which the
student wishes to transfer. In cases it is not clear who enrolled the student
first, the franchise that collected money first is the Originator.
In all cases the Originator is responsible for collections from the student. It
may prevent a student from transferring to another franchise (by notifying that
franchise) if it has not received payment, but once a student has transferred,
the Originator must pay the Receiver regardless of whether the student has paid
the Originator.
For the purpose of calculating royalty-service fees payable under the Franchise
Agreement, payments made to a Receiver shall be deducted from the gross receipts
of the Originator, and payments received from the Originator shall be included
the gross receipts of the Receiver.
The Receiver is required to accept transfer students at such times as it is
accepting full paying students or students residing within its Territory. Should
all of its course locations be filled, it must notify the Franchisor before
refusing the student.
Any transfer will require communication among the directors involved. The
Originator and the student are responsible for giving the Receiver at least 1
weeks' notice. It is recommended that all arrangements be made in further in
advance if possible.
The purpose of this transfer agreement is to make our internal arrangements as
invisible as possible to the customer. Offices should make the transfer policy
as smooth as possible for the customer and should refrain from discussing
internal financial arrangements with them.
For the purposes of any calculation required hereunder, all money needed to be
paid shall be rounded to the dollar.
1. Fall Refreshers for Summer courses:
1.1 Description of Transfer: Many students take TPR courses during the
Summer. However, the actual exam is not given during the Summer.
Therefore, TPR offers a brief refresher program before the Fall exams
for students that took a TPR course during the Summer and wish to
brush up on their skills prior to the actual exam. Problems arise
when students wish to take this short brush-up session at another
course location.
1.2 Policy: Should a Summer student refresh in the Fall at another
franchise, the Originator shall pay the Receiver a brush-up fee of
$50 regardless of the service provided to the transfer student by the
Receiver. If the cost of the original program is under $195, the
brush-up fee shall be reduced by the ratio of the cost of the
47
program to $195. If the cost of the program is more than $795, the
brush-up fee shall be increased by the ratio of the cost of the
program to $795.
The Receiver is obligated to provide the transfer student with the same
refresher it is providing its own Summer students. In the absence of a Summer
refresher, the Receiver may provide the student with some part of the regular
Fall course.
1.3 If a student takes a Summer refresher at another site, the Originator
is responsible for any future refresher work done by that student.
1.4 Key Points: (a) Receiver should have no obligation to collect any
money directly from the student. (b) Receiver shall provide student
with all materials necessary to complete refresher program at no
additional charge to Originator. (c) Each franchisee will distribute
to students attending its Summer course a listing of franchises
conducting Summer refreshers. This list will be made available by
Franchisor. (d) The list of franchises will include a form, to be
filled in by the student, to ease the billing process for the
Receiver. (e) Should a student wish to take a refresher at another
franchise, the student must contact the Receiver one week prior to
the start of the refresher program or Receiver is not obligated to
accept the student.
2. In-Course Transfers:
2.1 Description of Transfer: These transfers occur when a student enrolls
in a course with a given franchise and desires to take part of the
course with another franchise. This often happens with college
students who start the course where they go to college and finish the
course where their parents live.
2.2 Policy: If a student transfers to another franchise before the first
scheduled instructional session of a course at the Originator, and
does not plan to return, the Originator will keep a Marketing Fee of
$50 and forward the balance of the course fee collected to the
Receiver. The student will then receive the entire course from the
Receiver. In this event only, the Receiver may be responsible for
collecting the remainder of any course fee not paid. If this is the
case, the Originator must make this fact clear to the Receiver. If
the cost of the program is under $195, the Marketing Fee shall be
reduced by the ratio of the cost of the program to $195. If the cost
of the program is more than $795, the Marketing Fee shall be
increased by the ratio of the cost of the program to $795.
2.3 If a student transfers after the first scheduled instructional
session of the Originator's course, The Originator will retain a
Materials Fee of $150.00 and pay the Receiver a pro-rated portion of
the remaining balance. This portion will be computed using the number
of instructional sessions (diagnostic exams are excluded) that the
student will attend at the Receiver divided by the total number of
instructional sessions in the Receiver's course. If the cost of the
program is under $495, the Materials Fee shall be reduced by the
ratio of the cost of the program to $495. If the cost of the
-2-
48
program is more than $795, the Materials Fee shall be increased by
the ratio of the cost of the program to $795.
2.4 If a student is required to take the first instruction session at the
Receiver's location, and will complete the course at the Originator's
location, the Originator shall pay the Receiving site a Day-One Fee
of $100.00 plus a pro-rated portion of the Originator's course fee
minus both the Day-One Fee and a Marketing Fee of $50. This portion
will be computed using the number of instructional sessions
(diagnostic exams are excluded) that the student will attend at the
Receiver divided by the total number of instructional sessions in the
Receiver's course. In this situation, the Receiver is responsible for
providing all course materials (excluding diagnostics and misc.
letters) that are necessary to complete the program. If the cost of
the program is under $495, the Day-One fee shall be reduced by the
ratio of the cost of the program to $495. If the cost of the program
is more than $795, the Day-One Fee shall be increased by the ratio of
the cost of the program to $795. Depending on the price of the
program, the Marketing Fee referred to in this paragraph may be
increased or decreased as described in 2.2.
2.5 Key Points: The Receiver shall be responsible for providing the
student with the materials needed to complete the course provided at
their location. The student will not be charged any additional fees.
Should a student complete more than 50% of the instructional sessions
at the Receiver's site, the Receiver shall be obligated to provide
refresher sessions at their location to the student at no additional
charge to the Originator. Should the student want to take a refresher
program at another location, the Originating site shall be obligated
to pay for the refresher program as per section 3, unless the student
completed more than 75% of the instructional sessions at the
Receiver's site and in that event the Receiver shall pay for the
refresher. Also, the Receiver may collect for only one of the above
paragraphs.
3. Guarantee Fulfillment
3.1 Description of Transfer: Each TPR franchise makes some guarantees in
its promotional literature about continuing to work with students
should their scores not improve to their satisfaction. The guarantee
is contingent upon the student having completed their TPR course and
taken the actual exam. The term of the guarantee is one year from
enrollment. This policy governs the case where a student seeks
guarantee fulfillment at a franchise other than the one he/she
originally took the TPR course.
3.2 Policy: A student will receive a guarantee fulfillment at another
franchise under one of three circumstances. (a) If the student takes
a refresher course that consists of fewer than 10 instructional ours,
the Originator will pay the Receiver $50. (b) If the student takes a
refresher course that consists of 10 or more instructional hours, the
Originator will pay the Receiver $150.00. (c) If the student takes
the entire course, the Originator will pay the Receiver $250.00. If
the cost of the original program the
-3-
49
student took is under $195, the fee referred to in (a) shall be
reduced by the ratio of the cost of the original program to $195. If
the cost of the original program the student took is under $495, the
fee referred to in (b) and (c) shall be reduced by the ratio of the
cost of the original program to $495. If the cost of the original
program is more than $795, the fee referred to in (a), (b), and (c)
shall be increased by the ratio of the cost of the original program
to $795.
3.3 Key Points: In each case, course materials will be provided by
Receiver. Every effort should be taken to minimize the cost of the
refresher program to the Originator. However, the Originator will be
obligated to pay for whatever refresher option mentioned above the
Receiver is offering to its own guarantee fulfillment students.
Should the Receiver not offer a refresher program, the Originator
shall be required to pay for option (c). The Receiver must check with
the Originating site to confirm that the student is in fact eligible
for a guarantee fulfillment program.
4. Package Pricing
4.1 Description of Transfer: In the course of transfers/guarantee
fulfillments referred to in paragraphs 1, 2, and 3, the purchase
price of various courses may not be clear because they are purchased
as part of a package. If a student purchases two or more programs
from a site and receives a discount on any of the programs, the
programs will as a group be treated as a package for the purposes of
paragraph 4.2 and 4.3 below.
4.2 Policy: If a student signs up for a package program, the "reduced"
purchase price for each separate program shall be the full list price
of that program reduced by the ratio of the total (discounted)
package fee to the full price had each part of the package been
purchased separately. If a student signs up for a package with the
Originator and then takes an entire part of the package with the
Receiver, the Originator shall pay the Receiver the entire "reduced"
price of the course taken with the Receiver.
4.3 Policy: If the student takes one entire part of a package with the
Originator and then part of the other with a Receiver, then the
Originator shall use the "reduced" price to compute the amount due to
be paid under 2.3 or 2.4, except that the Originator shall keep no
additional Marketing Fee unless the total amount kept by the
Originator for the first course is less than the entire Marketing Fee
under 2.3 or 2.4. For purposes of 2.3 the Marketing Fee shall be 1/3
of the Materials Fee.
5. Local Promotional Discounts
5.1 Description of Transfer: Franchises sometimes offer local promotional
discounts to prospects or students in their areas. This policy
governs the redemption of promotional discounts at a franchise other
than the franchise issuing the promotion.
-4-
50
5.2 Policy: All franchises shall accept the promotional discount offers
extended by other franchises unless the discount specifically limits
the discount with regard to time or geography in a way that
invalidates it at the time or place it is being used. Receiving
franchises shall accept these promotional discounts and xxxx the
Originating franchise for 50% of the first $100 of the discount plus
100% of the amount exceeding $100.
6. Tutoring
6.1 Description of Transfer: Each TPR office offers private tutoring in
either a hourly format, package format, or both. A student may start
tutoring in one place and finish in another, or actually receive
tutoring through two franchises at the same time.
6.2 Policy: All TPR franchisees work tutoring differently and a cohesive
policy that anticipates even most eventualities is impossible. In
general, if their is an up front payment, it should be apportioned
1/2 to the office that provides materials, 1/6 to the office that
first enrolled the student as a Marketing Fee, and 1/6 to each office
as a tutoring Set-up fee. Hourly payments should in general be
divided based on the number of hours of tutoring that are done in
each location. However, because prices and plans differ wildly,
arrangements should be made in advance, and offices have the right to
charge different amounts to the same student (e.g. a student splits
tutoring between Westchester and NY and is charged $55/hour for
tutoring done in Westchester, and $75/hour for tutoring done in NY.)
-5-
