1
EXHIBIT 10.42
FORMATION AGREEMENT
by and among
THE PRINCETON REVIEW
PUBLISHING COMPANY, L.L.C.
and
THE PRINCETON REVIEW
PUBLISHING CO., INC.
and
THE PRINCETON REVIEW
MANAGEMENT CORP.
and
THE INDEPENDENT PRINCETON
REVIEW FRANCHISEES
2
LIST OF SCHEDULES TO AGREEMENT
Schedule 1.1(b) - Contracts
Schedule 1.1(t) - Governmental Approvals
Schedule 1.1(w) - Student Access Contracts
Schedule 4.1(c) - Approvals and Notices Required by TPRM and Old PUB;
Conflicts with Instruments
Schedule 4.1(d) - Title Exceptions
Schedule 4.1(e) - Legal Proceedings
Schedule 4.1(f) - Defects in Contracts
Schedule 4.1(g)(i) - Trademark, Trade Name or Copyright Registrations
Schedule 4.1(g)(ii) - Applicable Marks Filing
Schedule 4.1(i) - Defects in Governmental Approvals
Schedule 4.1(j) - Conduct of Business and Compliance with Regulatory and
Contractual Requirements
Schedule 4.1(n) - Rights Reservations
Schedule 4.1(p) - Labor Matters
Schedule 4.1(r) - Material Assets
Schedule 4.1(s) - Financial Information
Schedule 4.1(v) - Affiliate Transactions
2
3
LIST OF EXHIBITS TO AGREEMENT
Exhibit A - Franchisees
Exhibit B - Certificate of Formation
3
4
FORMATION AGREEMENT
FORMATION AGREEMENT, dated effective as of May 31, 1995 ("Effective
Date"), by and among (i) THE PRINCETON REVIEW PUBLISHING COMPANY, L.L.C., a
Delaware limited liability company (the "Company"), (ii) THE PRINCETON REVIEW
PUBLISHING CO., INC., a New York corporation ("Old PUB"), (iii) THE PRINCETON
REVIEW MANAGEMENT CORP., a Delaware corporation ("TPRM"), and (iv) the persons
identified as "Franchisees" on Exhibit "A" attached hereto (the "Franchisees").
RECITALS
A. TPRM owns all right, title and interest in and to the use of the trade
names, trademarks and service marks THE PRINCETON REVIEW, STUDENT
ACCESS and REVIEWARE (such trade names, trademarks and service marks,
together with any and all trade names, trademarks and service marks
which are now or hereafter owned or used by TPRM, being herein
collectively called the "Applicable Marks").
B. In connection with the exploitation of the Applicable Marks, TPRM is
engaged in developing, marketing and servicing test preparation
businesses through franchised outlets pursuant to written franchise
agreements ("Franchise Agreements") with independent franchisees and
franchisees affiliated with TPRM. The collection of business activities
engaged in and offered through TPRM's franchisee network pursuant to
the terms of the Franchise Agreements is hereinafter referred to as the
"Test Preparation Business".
C. TPRM has also entered into a License Agreement of even date herewith
with Old Pub (herein called the "TPRM License Agreement"), pursuant to
which it has granted Old Pub the exclusive rights to use and exploit
the Applicable Marks in the conduct of the Publishing Business. As used
herein, the term "Publishing Business" shall mean and refer to (A) the
businesses previously or currently engaged in by Old PUB and (B) any
and all other businesses (except for the Test Preparation Business),
whether now or hereafter conducted, which (i) relate to, involve or are
competitive with the TPR Method or (ii) use the Applicable Marks in any
part of the conducting thereof. The "Publishing Business" shall
include, without limitation, the business of creating, publishing and
marketing books, videotapes, audiotapes, computer software and other
products or services. As used herein, the term "TPR Method" shall mean
instruction for academic
4
5
subjects, computer usage, languages, negotiation, financial aid, test
preparation or admissions advice for actual or prospective grade
school, high school, college, graduate or professional school students
or adults.
D. Pursuant to its Franchise Agreement with TPRM, each Franchisee
currently has certain territorial protection rights that may preclude
TPRM and Old PUB from conducting a portion of the Publishing Business
in such Franchisee's franchise territory.
E. The parties desire to enter into this Formation Agreement to provide
for the formation of the Company and to have the Company conduct the
Publishing Business. In connection with such formation, (i) Old PUB
shall contribute the Publishing Business to the Company, in exchange
for the issuance to Old PUB of 8,238.12 units of voting membership
interests (herein collectively the "Old PUB Units") and (ii) each
Franchisee shall contribute the Territorial Right to the Company in
exchange for the number of units of non-voting membership interests set
forth opposite each such Franchisee's name on Exhibit "A"
(collectively, the "Franchisees Units"). As used herein, the term
"Territorial Right" shall mean, with respect to each Franchisee, its
agreement hereby made by such Franchisee for the benefit of the Company
that the Company may, notwithstanding the provisions of such
Franchisee's Franchise or any other Agreement, pursue the Publishing
Business in such Franchisee's franchised territory (subject to the
limitations described herein).
5
6
AGREEMENT
In consideration of the premises and of the respective representations,
warranties, covenants, agreements and conditions of the parties contained
herein, it is hereby agreed as follows:
1. Contribution by Old PUB; Assumption of Certain Liabilities.
1.1. Transfer of Assets. On the terms and subject to the conditions
set forth in this Agreement, effective as of the Effective
Date, Old PUB shall convey, assign, grant, transfer and
deliver to the Company, as a capital contribution in exchange
for the Old PUB Units, all of the OLD PUB assets, rights and
properties however owned as of the Effective Date and used
directly or indirectly in the conduct of the Publishing
Business or otherwise associated with or related thereto (the
"Assets"), including without limitation:
(a) All computer programs, in object and source code
form, flow charts, layouts, user's manuals,
operator's manuals and other documentation in human
readable or machine readable form developed by or for
Old PUB in connection with the conduct of the
Publishing Business, and all copyrights, trade
secrets or know-how related thereto (the "Software");
(b) All right, title and interest of Old PUB in, to and
under all contracts, license agreements, leases and
other arrangements which are related to the conduct
of the Publishing Business, including but not limited
to the TPRM License Agreement, publishing contracts,
manuscript and editorial/consulting agreements,
advertising agreements and advertising sales
representative agreements, distribution agreements,
development and marketing agreements, endorsement
contracts, and those agreements listed on Schedule
1.1(b) hereto (collectively, the "Contracts");
(c) All circulation records relating to any Published
Product (as defined in Section 2.3 hereof) including,
but not limited to specific names of all buyers,
addressees, zip codes and prices paid;
(d) All promotional materials relating to any Published
Product, including any and all plates and
camera-ready copy, new promotion letters, flyers,
reply cards and any other printed matter in Old PUB's
possession or control relating to the promotion of
any Published Product;
6
7
(e) All promotion and marketing records relating to any
Published Product or the Publishing Business,
including any and all records of mailing lists used,
packages used, dates mailed, rates of return, sample
mailing pieces, space advertising and the like;
(f) All records of inquiries and prospects of the
Publishing Business, including, without limitation,
any and all correspondence, directories, attendance
lists or labels;
(g) All subscriber correspondence files, including,
without limitation, any and all correspondence
regarding subscriptions, refunds, and editorial
matters relating to any Published Product;
(h) All back issues or other inventories of any Published
Product which Old PUB may now possess;
(i) All existing records in the possession or control of
Old PUB relating to advertising sales for any
Published Product or the Publishing Business,
including, but not limited to (i) copies of all past,
present and pending advertising sales contracts and
all advertising sales representative agreements; (ii)
all lists of past, present or prospective
advertisers; (iii) any and all material which may
provide guidance to the advertising sales
representatives concerning the sale of advertising
for the Publishing Business; and (iv) for each
advertising sales account, a listing of the company
name, address, phone number, contact history and
sales history;
(j) All of Old PUB's rights to use any and all editorial
and promotional copy previously written or developed
by or for Old PUB for the Publishing Business,
including any and all rights to promotional copy,
direct mail packages, renewal packages and media
kits;
(k) All rights of Old PUB to use (whether as owner,
licensee or otherwise) all mechanicals, photos, logos
and other art work which may be utilized in or
developed for or in connection with the Publishing
Business, whether or not in Old PUB's physical
possession;
(l) All right, title and interest of Old PUB in, to and
under any oral or written bid, quotation or proposal
relating to the sale or licensing of any Published
Product;
(m) All trade secrets, technical knowledge and other
intellectual property (including all copyright
registrations and all other copyrights or
7
8
copyrightable work owned by Old PUB) used by Old PUB
in connection with the conduct of the Publishing
Business other than TPRM's interest in the Applicable
Marks (the "Intellectual Property");
(n) All rights, claims or choses in action of Old PUB
against any person relating to any other Asset;
(o) All rights of Old PUB in tangible personal property
associated with the Publishing Business and all
warranties and guarantees, if any, express or
implied, existing for the benefit of Old PUB in
connection with such tangible property to the extent
assignable;
(p) The accounts receivable of Old PUB as of the
Effective Date (the "Accounts Receivable");
(q) All personnel files and other materials relating to
any employees of Old PUB who are to be offered
employment by the Company;
(r) All records of compliance and noncompliance with the
laws, regulations, ordinances and orders applicable
to the Publishing Business;
(s) All deposits, prepayments and prepaid expenses
relating to the operations of the Publishing Business
by Old PUB;
(t) The rights of Old PUB under all licenses, permits,
franchises issued by any federal, state, provincial
or municipal authority relating to conduct of the
Publishing Business ("Governmental Approvals"),
including without limitation, those listed on
Schedule 1.1(t) hereto, to the extent that such
Governmental Approvals are transferable;
(u) All goodwill of Old PUB relating to the Assets and
the Publishing Business as a going concern other than
goodwill attributable to the Applicable Marks which
shall inure solely to the benefit of TPRM;
(v) All cash and cash equivalent or similar types of
investments, such as certificates of deposit,
treasury bills, and other marketable securities,
including any cash contributed to Old PUB pursuant to
Section 5.3(e);
(w) All contracts and membership lists and other
properties owned by Student Access, Ltd., a Delaware
corporation ("Student Access"), including those
agreements listed on Schedule 1.1(w) hereto;
(x) To the extent not otherwise covered, the originals of
all information, files, records, data and contracts
related to any of the other Assets;
(y) Claims for refunds of taxes and other governmental
charges; and
8
9
(z) The financial records, tax records and corporate
policies and procedures manuals of Old PUB.
1.2. Instruments of Conveyance and Transfer. Effective as of the
Effective Date, Old PUB shall deliver or cause to be delivered
to the Company the following:
(a) Assignments and bills of sale transferring to the
Company good and valid title to the Assets, free and
clear of all liens, claims and encumbrances except as
shown on Schedule 4.1(d) hereto or as otherwise
specifically permitted pursuant to the terms of this
Agreement, and all in a form reasonably satisfactory
to the Company and the Franchisees;
(b) To the extent available, originals of all of the
contracts, agreements, commitments, books, records,
files and other data that are included in the Assets;
and
(c) Such other instruments of transfer and assignment in
respect of the Assets as the Company and the
Franchisees shall reasonably require pursuant to
written notice given no less than twenty (20) days
prior to the Effective Date and as shall be
consistent with the terms and provisions of this
Agreement.
Prior to the Closing, Old PUB will take such steps as may be requisite or
appropriate so that no later than the close of business on the Effective Date,
the Company to the extent reasonably practicable will be placed in actual
possession and control of all of the Assets. Without limiting the generality of
the foregoing, Old PUB agrees it shall use its reasonable best efforts to obtain
all material consents and approvals of third parties required for the transfer
of the Assets contemplated herein.
1.3. Further Assurances. From time to time after the Closing, Old
PUB will execute and deliver, or cause to be executed and
delivered, without further consideration, such other
instruments of conveyance, assignment, transfer and delivery
and will take such other actions as the Company and the
Franchisees may reasonably request in order to more
effectively consummate the transactions contemplated by this
Agreement and to transfer, convey, assign and deliver to the
Company, and to place the Company in possession and control of
any of the Assets, or to enable the Company to exercise and
enjoy all rights and benefits of Old PUB with respect thereto.
1.4. Assumed Liabilities. The Company will (i) assume and pay,
perform, fulfill and discharge all asserted and unasserted
obligations of Old PUB as of the Effective
9
10
Date, and (ii) pay, perform, fulfill and discharge all
obligations of Student Access which are due and payable (or
performable) subsequent to the Effective Date under the
contracts of Student Access listed on Schedule 1.1(w) (the
"Assumed Liabilities"). The obligations of the Company with
respect to the Assumed Liabilities are subject to whatever
rights the Company may have under this Agreement or otherwise
for a breach by Old PUB or TPRM of any representation,
warranty, covenant or agreement contained in this Agreement.
1.5. Special TPRM Covenant and Agreement. TPRM hereby acknowledges
and agrees that it and Old PUB are both controlled by ▇▇▇▇ ▇.
▇▇▇▇▇▇▇. TPRM further acknowledges and agrees that without the
obligations undertaken by TPRM under the terms of this
Agreement, the Franchisees would not be willing to enter into
this Agreement. TPRM further covenants and agrees that it will
cause Old PUB to timely and properly perform and comply with
all of Old PUB's obligations hereunder to the Company and/or
Franchisees, and TPRM hereby unconditionally guarantees all
such obligations.
2. Contribution by Princeton Review Franchisees. On the terms and subject
to the conditions set forth in this Agreement, effective as of the
Effective Date, each of the Franchisees does hereby convey, assign,
grant, transfer and deliver to the Company, as a contribution to the
capital of the Company and in exchange for the number of Franchisees
Units set forth opposite such Franchisee's name on Exhibit "A" attached
hereto, the Territorial Right by agreeing with the Company, for the
Company's sole and exclusive benefit, as follows:
2.1. Subject to the provisions of Section 2.4 hereof, the Company
shall have the right, notwithstanding anything to the contrary
contained in such Franchisee's Franchise Agreement with TPRM
or any other agreement or understanding made prior to the
Closing Date, to market in Franchisee's franchised territory
any Published Product (herein defined) using the Applicable
Marks or any other names and marks, whether created prior or
subsequent to the Effective Date.
2.2. As used herein the term "Published Product" shall mean any
product which is sold, leased or otherwise provided to
customers and which does not include, as any part thereof, (i)
face-to-face instruction of a customer or (ii) instruction
delivered through real time (i.e. not pre-recorded or delayed
transmissions) interactive technology that simulates a
classroom or tutoring experience.
10
11
2.3. As used herein the term "Test Preparation Product" shall mean
any kind of Published Product which is sold, leased or
otherwise provided to customers and which primarily addresses
a college or graduate school admissions test.
(a) If two or more Test Preparation Products are marketed
as a single item, that item will itself be considered
a Test Preparation Product, whose suggested retail
price, if it does not have its own, shall be the sum
of the suggested retail prices of its components. Two
or more Test Preparation Products shall be considered
to be "marketed as a single item" for purposes
hereof, if such Test Preparation Products are
physically packaged together, offered for sale with a
single price or with a discount for buying all of
them; or advertised or marketed as component parts of
a complete set.
(b) Any two or more Test Preparation Products (after
application of clause (a) above) which (i) primarily
address the same admissions test, (ii) are in the
same media (examples of types of "media" for these
purposes include Macintosh compatible disks, MS/DOS
compatible disks, printed materials and videotapes);
and (iii) are not themselves components of other Test
Preparation Products in the same media, shall be
deemed to be one Test Preparation Product with one
suggested retail price equal to the sum of the
suggested retail prices of all the separate Test
Preparation Products. For purposes of clause (ii) in
the immediately preceding sentence, a Test
Preparation Product which is composed of separate
items in different media shall be deemed to be in the
media of the most expensive component item of such
Test Preparation Product.
2.4. Notwithstanding the provisions of Section 2.1 hereof, the
following provisions shall apply:
(a) The Company shall not have the right to market in
Franchisee's franchised territory any Test
Preparation Product which has a suggested retail
price in excess of the then Maximum Allowable Price,
unless the marketing of such Test Preparation Product
is approved by an 85% Zee Vote (as that term is
defined and used in the various Addenda entered into
between TPRM and each of the Franchisees of even date
herewith). With respect to any structured curriculum
taught on-line (e.g. through a computer or video
network) which is sold at an hourly rate, the hourly
selling price
11
12
of such curriculum shall be deemed to equal, for
purposes of this Section 2.4(a), the greater of (i)
18.75% of the then Maximum Allowable Price; or (ii)
the actual retail hourly selling price thereof.
(b) The Company shall not (i) encourage any school,
organization or other person to use any Test
Preparation Product for the conducting of a class or
other course for any group of students; or (ii)
intentionally create confusion that any Test
Preparation Product is the same product as any course
taught by the Franchisees pursuant to their
respective Franchise Agreements with TPRM.
(c) The Territorial Right is not assignable or
transferable to any person or entity other than a
person or entity that is simultaneously acquiring all
of the Company's rights under the TPRM License
Agreement.
2.5. As used herein, the term "Maximum Allowable Price" shall mean,
until December 31, 1995, $80.00. In order to reflect
subsequent changes in the average cost of products similar to
Test Preparation Products, the parties agree that the Maximum
Allowable Price shall be adjusted on December 31, 1995 and
each December 31 thereafter, by a percentage amount equal to
the average percentage change in the Applicable Indices
(herein defined) from the December of the previous year. As
used herein, the term "Applicable Indices" shall mean and
refer to the following:
(a) The "Information Processing Equipment" Index
published monthly by the Bureau of Labor Statistics
as one of the expenditure categories of the Consumer
Price Index for all Urban Consumers ("CPI");
(b) The "School Books and Supplies" Index published
monthly by the Bureau of Labor Statistics as one of
the expenditure categories of the CPI; and
(c) The "Tuition and Other School Fees" Index published
monthly by the Bureau of Labor Statistics as one of
the expenditure categories of the CPI.
2.6. The Franchisees hereby withhold any permission granted above
for the Company or its Affiliates to exploit electronically
the following titles until there is an agreement between TPRM,
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇, and the Company in
a form satisfactory to ▇▇▇▇ ▇▇▇▇▇▇▇, modifying the terms of
all prior agreements between the parties with respect to the
exploitation of such titles: "Cracking the SAT", "Cracking the
GMAT", "Cracking the GRE" and "Cracking the LSAT".
12
13
3. Closing. The closing with respect to the transactions provided for in
this Agreement (the "Closing") is taking place effective as of the
Effective Date.
4. Representations and Warranties.
4.1. Representations and Warranties of TPRM and Old PUB. TPRM and
Old PUB represent and warrant, jointly and severally, to the
Company and the Franchisees, the following:
(a) Due Organization; Good Standing and Power. Each of
TPRM and Old PUB is a corporation duly organized,
validly existing and in good standing under the laws
of the State of New York. Old PUB has all corporate
power and authority to own the Assets and to conduct
the Publishing Business as now conducted. Each of Old
PUB and TPRM has all requisite power and authority to
enter into this Agreement and each other agreement,
conveyance and assignment provided for or
contemplated herein (the "Other Agreements") and to
perform their respective obligations hereunder and
thereunder.
(b) Authorization and Validity of Agreement. The
execution, delivery and performance of this Agreement
and the Other Agreements by each of Old PUB and TPRM
and the consummation by each such party of the
transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate
action on the part of each such party. No other
corporate or shareholder action is necessary for the
authorization, execution, delivery and performance by
Old PUB or TPRM of this Agreement or any Other
Agreement and the consummation by them of the
transactions contemplated hereby and thereby. This
Agreement and the Other Agreements have been duly
executed and delivered by Old PUB and TPRM and
constitute the legal, valid and binding obligations
of Old PUB and TPRM, enforceable against such parties
in accordance with their terms.
(c) No Approvals or Notices Required; No Conflict with
Instruments. Except as described in Schedule 4.1(c)
hereto, the execution, delivery and performance of
this Agreement or any Other Agreement by Old PUB and
TPRM and the consummation by it of the transactions
contemplated hereby and thereby (i) will not violate
in any material respect (with or
13
14
without the giving of notice or the lapse of time or
both) or require any consent, approval, filing or
notice under, any provision of any law, rule or
regulation, court order, judgment or decree
applicable to Old PUB or TPRM and (ii) will not in
any material respect conflict with, or result in the
breach or termination of any material provision of,
or constitute a material default under, or require
any consent or approval, or result in the
acceleration of the performance of the obligations of
Old PUB or TPRM under, or result in the creation of a
lien, charge or encumbrance upon a portion of the
Assets pursuant to, the Articles of Incorporation or
Bylaws of Old PUB or TPRM, or any indenture,
mortgage, deed of trust, lease, licensing agreement,
or material contract, instrument or Other Agreement
to which either such entity is a party or by which it
or any of the Assets are bound or affected.
(d) Title to Properties; Absence of Liens and
Encumbrances. Old PUB owns and will transfer to the
Company as of the Effective Date, good and valid
title to all of the Assets, free and clear of all
claims, liens, security interests, charges, leases,
encumbrances, licenses or sublicenses and other
restrictions of any kind and nature, except as
specified on Schedule 4.1(d) hereto or the
encumbrances and restrictions set forth in the
contracts disclosed pursuant to this Agreement, or
which would not otherwise materially interfere with
the use and enjoyment of such Assets by the Company.
(e) Legal Proceedings. Except as described in Schedule
4.1(e) hereto, (i) there is no litigation,
proceeding, claim or governmental investigation
pending or, to the knowledge of Old PUB and TPRM,
threatened seeking relief or damages which, if
granted, would materially and adversely affect Old
PUB, or the ownership, use or operation of any of the
Assets or the results of operations of the Publishing
Business and (ii) Old PUB has not been charged with
any violation of or, to the knowledge of Old PUB and
TPRM, threatened with a charge or violation of, nor
are Old PUB or TPRM aware of any facts or
circumstances that, if discovered by third parties,
could give rise to a charge or a violation of, any
provision of law or regulation which charge or
violation, if determined adversely to Old PUB, would
materially and adversely affect the ownership, use or
14
15
operation of any of the Assets or the results of
operations of the Publishing Business.
(f) Contracts and Commitments. Old PUB and Student Access
are not parties to any material Contract relating to
the Publishing Business other than as listed or
described on Schedule 1.1(b) or Schedule 1.1(w).
Except as may be disclosed on Schedule 4.1(f) hereto,
each material Contract is valid and enforceable in
accordance with its terms, and Old PUB (or Student
Access) is not in breach in the performance,
observance or fulfillment of any obligation, covenant
or condition contained therein, and no event has
occurred which (with or without the giving of notice
or lapse of time, or both) would have a material
adverse effect on the ownership, use, or operation of
any of the Assets or the results of operations of the
Publishing Business, and to the knowledge of Old PUB
and TPRM, no party is in breach, default or
noncompliance with the terms thereunder. Old PUB has
not received any notice or claim that it is in breach
of any provision of any material Contract. Old PUB
has delivered to the Company true and complete copies
of all the written Contracts listed on Schedule
1.1(b) and Schedule 1.1(w), as amended.
(g) Intellectual Property and Applicable Marks.
(i) Excluding the Applicable Marks, the
Intellectual Property (including any
licensing of intellectual property)
constitutes all intellectual property used
or needed by Old PUB to conduct the
Publishing Business in the ordinary course,
and Old PUB has the unrestricted ownership
right to convey to the Company all such
Intellectual Property. To the knowledge of
Old PUB and TPRM, there is no basis for
assertion by any person of any claim against
Old PUB or the Company with respect to the
use by Old PUB or the Company of any of the
Intellectual Property. Old PUB is not
infringing or violating, and to the
knowledge of Old PUB and TPRM, Old PUB has
not infringed or violated, any rights of any
person with respect to any of the
Intellectual Property, and the Intellectual
Property is not subject to any order,
injunction or agreement respecting its use.
To the knowledge of Old PUB and TPRM, no
others have infringed or are infringing upon
15
16
the Intellectual Property. As of the date
hereof, Old PUB has filed no trademark or
trade name or copyright registrations with
respect to the Publishing Business, except
those set forth on Schedule 4.1(g)(i)
hereto.
(ii) TPRM owns all the Applicable Marks, free and
clear of any right, title and interest,
claim or encumbrance of any third party.
TPRM has the unrestricted ownership right to
license the Applicable Marks to Old PUB
pursuant to the terms of the TPRM License
Agreement. There is no claim or demand known
to either TPRM or Old PUB of any person
pertaining to, or any proceedings which are
pending or, to the best knowledge of Old PUB
and TPRM, threatened, which challenges the
right of TPRM or Old PUB in respect of any
Applicable ▇▇▇▇. No Applicable ▇▇▇▇ is
subject to any outstanding order, ruling,
decree, judgment or stipulation by or with
any court, arbitrator or administrative
agency, or, to the knowledge of Old PUB and
TPRM, infringes or is being infringed by
others. Schedule 4.1(g)(ii) lists all
pending or existing federal or state
trademark applications or registrations
filed by or granted to TPRM with respect to
the Applicable Marks. Old PUB has the right
to transfer the TPRM License Agreement to
the Company pursuant to the terms hereof.
(h) Software. Old PUB has rights to the Software, the
nature of which varies among the total collection
pursuant to applicable agreements, but which rights
taken together are sufficient to allow Old PUB to
conduct the Publishing Business in the manner
presently conducted. The rights, title and interest
in and to the Software contributed herein by Old PUB
consist of all those under which Old PUB has
conducted the Publishing Business as of the Closing,
and Old PUB has exercised reasonable care and prudent
business practices to protect its rights in such
Software.
(i) Governmental Approvals. Except as described on
Schedule 4.1(i) hereto, Old PUB has and is fully
authorized to assign to the Company, all Governmental
Approvals, and such Governmental Approvals are in
full force and effect and constitute the only
licenses, permits, consents, approvals,
authorizations, qualifications and orders of
governmental
16
17
authorities required for the ownership, use or
operation of the Assets or the conduct of the
Publishing Business, the failure of which to obtain
or maintain would individually or in the aggregate
materially and adversely affect the ownership, use or
operation of any of the Assets or the results of
operations of the Publishing Business.
(j) Conduct of Business in Compliance with Regulatory and
Contractual Requirements. Except as described on
Schedule 4.1(j) hereto, Old PUB has conducted the
Business so as to comply with all applicable laws,
ordinances, codes, regulations, rights of concession,
licenses, know-how or other proprietary rights of
others, the failure to comply with which would
individually or in the aggregate materially and
adversely affect the ownership, use or operation of
any of the Assets or the results of operations of the
Publishing Business.
(k) Certain Fees. Old PUB and TPRM and their officers,
representatives and employees have not employed any
broker or finder or incurred any other liability for
any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby.
(l) Books and Records. All of the books and records
relating to the Assets and the conduct of the
Publishing Business (including all of the books and
records of the type referred to in Section 1.1
hereof) have in all material respects been prepared
and maintained in accordance with good business
practices and, where applicable, in conformity with
generally accepted accounting principles and in
compliance with all applicable laws, regulations and
other requirements.
(m) Taxes. Old PUB has caused to be timely filed with
appropriate federal, state, local and other
governmental authorities all tax returns, information
returns or statements and reports required to be
filed with respect to the Assets or the conduct of
the Publishing Business and have paid or caused to be
paid all taxes shown to be due on such returns or
reports, except for any non-filing which would not
have a material and adverse effect on the Assets or
the results of operations of the Publishing Business.
Old PUB has not received and neither it nor TPRM has
any knowledge of any notice of deficiency or
assessment or proposed deficiency or assessment with
respect to any of the Assets or the conduct of the
Publishing Business
17
18
from any taxing authority, and there are no
outstanding agreements or waivers that extend any
statutory period of limitations applicable to any
federal, state or local income or franchise tax
returns that include or reflect the use and operation
of the Assets or the conduct of the Publishing
Business.
(n) Rights of Third Parties. The Assets are transferable
and assignable to the Company as contemplated by this
Agreement without the waiver of any right of first
refusal or the consent of any other party being
obtained, and there exists no preferential right of
purchase in favor of any person with respect to any
of the Assets, Old PUB or the Publishing Business,
subject to the reservations of rights contained in
the agreements listed on Schedule 4.1(n) hereto.
(o) Disclosure. No representation or warranty in this
Section 4.1 or in any Schedule or Exhibit to this
Agreement, or in any written statement, certificate
or other document furnished to the Company or the
Franchisees contains or will contain any untrue
statement of a material fact or omits or will omit a
material fact necessary to make the statements
therein not misleading.
(p) Labor Matters. To the knowledge of Old PUB and TPRM,
there are no controversies pending or threatened
between Old PUB and any of its employees or former
employees, which controversies have or could
reasonably be expected to have a material adverse
effect on the Assets or the results of operations of
the Publishing Business. Except as set forth on
Schedule 4.1(p) hereto, Old PUB has no collective
bargaining agreements, employment contracts, employee
benefit plans or any other binding agreements
relating to the employment of any of its employees.
To the knowledge of Old PUB and TPRM, Old PUB is in
substantial compliance with all federal and state
laws respecting employment and employment practices,
terms and conditions of employment, and wages and
hours, except for where the failure to so comply
would not materially and adversely affect the Assets
or the results of operations of the Publishing
Business, and Old PUB is not engaged in any unfair
discriminatory labor practice; no unfair labor
practice complaint against Old PUB is pending before
the National Labor Relations Board; there is no labor
strike,
18
19
dispute, slow down or stoppage actually pending or,
to the knowledge of Old PUB, threatened against or
involving Old PUB or the Publishing Business; to the
knowledge of Old PUB and TPRM, no representation
question exists with respect to the employees of Old
PUB; no collective bargaining agreement is currently
being negotiated by Old PUB; Old PUB has not
experienced any work stoppage or other similar labor
difficulty since formation of Old PUB; and to the
knowledge of Old PUB and TPRM, there are no claims
against Old PUB pending before the Equal Employment
Opportunity Commission.
(q) Benefit Plans. No action or failure to take action by
Old PUB or TPRM prior to the Closing (including the
consummation of the transactions contemplated hereby)
has created or will create any lien in favor of the
Pension and Benefit Guaranty Corporation or any
beneficiary under any Plan or in favor of any other
person or entity pursuant to ERISA or any other
similar law, rule or regulation.
(r) Material Assets. The Assets constitute all the assets
necessary to conduct the Publishing Business in the
manner now presently conducted by Old PUB, except as
otherwise disclosed on Schedule 4.1(r) attached
hereto. Upon the consummation of the transaction
provided for herein, Old PUB will not have assets, in
the aggregate, of material value.
(s) Financial Information and Absence of Certain Changes.
Attached hereto as Schedule 4.1(s) are (i) the
unaudited balance sheet of Old PUB as at December 31,
1994 and the related statement of operation and
schedule of selling, general and administrative
expenses for the fiscal year then ended; and (ii) an
unaudited balance sheet of Old PUB as at March 31,
1995 and the related statement of operation and
schedule of selling, general and administrative
expenses for the three months then ended, including
in each case, notes thereto, if any. Such financial
statements are true, complete and correct in all
material respects and prepared in accordance with
generally accepted accounting principles applied on a
consistent basis. The balance sheets represent fairly
the financial position of Old PUB as of the
respective dates thereof, and the statement of
operation and schedule of expenses included in such
financial statements present fairly the results of
operation and expenses of Old PUB for each of the
periods covered
19
20
thereby. As of December 31, 1994 and March 31, 1995,
except as disclosed on Schedule 4.1(s) Old PUB did
not have any material liabilities (including any
relating to the Publishing Business), whether
absolute, accrued or contingent, whether due or to
become due, which were not reserved against in, or
reflected on, the respective balance sheets as of
such dates in accordance with and to the extent
required by generally accepted accounting principles.
Since December 31, 1994, except as otherwise
disclosed on Schedule 4.1(s), there has not been (A)
any material adverse change in the financial
condition, assets, liabilities, earnings, business
prospects or customer supply relationships of the
Publishing Business, (B) any material damage,
destruction or loss adversely affecting the
Publishing Business or any of the Assets, (C) any
sale, assignment, transfer, lease or other
disposition of any material asset of Old PUB other
than sales of inventory in the ordinary course of the
Publishing Business, (D) any change by Old PUB in
accounting methods or principles or the application
thereof or any change in Old PUB's policies or
practices with respect to reserves for bad debts,
inventory obsolescence or other items affecting
working capital, (E) any waiver by Old PUB of any
rights that, singly or in the aggregate are material
to the Publishing Business, the Assets or the
financial condition or the results of operations of
the Publishing Business, (F) any mortgage or pledge
of or grant of a lien or security interest in any of
the Assets, or (G) any contract or commitment to do
or cause to be done any of the foregoing. Without
limiting the generality of the foregoing, since the
December 31, 1994 balance sheet, Old PUB has not
incurred or become subject to or agreed to incur or
become subject to, any obligation or liability,
absolute or contingent, except current liabilities
incurred in the ordinary course of business.
(t) Employee Information. Old PUB has delivered or made
available to the Company and the Franchisees an
accurate list and summary description of the
following:
(i) the names and titles of and current annual
base salaries or hourly rates for all key
employees involved in the conduct of the
Publishing Business, together with a
statement of the full amount
20
21
and nature of any other remuneration,
whether in cash or kind, paid to each such
person during the current fiscal year; and
(ii) with respect to each consultant or other
third party who provides personal service in
connection with the Publishing Business, the
same information as described above, but
only if the yearly compensation to such
consultant or other third party exceeds
$10,000.
The foregoing information shall not be understood to be a
representation as to the personnel needs and costs of the
Company.
(u) Accounts Receivable. All of the Accounts Receivable
are valid and enforceable claims and are not subject
to any valid defenses or offsets, and, to the
knowledge of Old PUB and TPRM, may be collected by
use of efforts customary in the industry.
(v) Transaction with Affiliates. Schedule 4.1(v) hereto
lists all written contracts or agreements Old PUB has
with any of its affiliates (including TPRM). There
are no such material unwritten contracts between the
Company and any affiliates.
(w) Special PUB Representations. Attached as Exhibit "B"
is a true and accurate copy of the Certificate of
Formation of the Company, and such Certificate has
not been amended as of the Effective Date. As of the
date hereof, no units of voting or non-voting
membership interests of the Company have been issued
or sold and the Company has no obligation to issue
any such units pursuant to outstanding options,
warrants, or otherwise, except as specifically
contemplated by the terms of this Agreement or as
described on Schedule 4.1(w) attached hereto. Except
for the filing of the Certificate of Formation, prior
to the Effective Date, the Company has taken no
corporate or other action.
(x) Business Plan. Old PUB has provided to the
Franchisees all current written information in its
possession that relates to the proposed business
plans for the Publishing Business, including all
financial projections and other financial information
relating thereto, and is not information provided to
OLD PUB by a third party which is subject to a
confidentiality obligation in favor of such third
party. It is understood that Old PUB makes no
representation or warranty whatsoever with respect to
the
21
22
accuracy or completeness of any such document or
projection, or with respect to the underlying
assumptions or achievability thereof.
4.2. Representations and Warranties of Franchisees. Each of the
Franchisees, severally, but not jointly, represents and
warrants to the Company, TPRM, and Old PUB as follows:
(a) Due Organization; Good Standing and Power. Each
corporate Franchisee is a corporation duly organized,
validly existing and in good standing under the laws
of its respective jurisdiction of incorporation, and
is duly qualified to do business and is in good
standing in all jurisdictions in which it is required
to be so qualified, except for where the failure to
so qualify would not be material. Each corporate
Franchisee has full power and authority to enter into
and carry out this Agreement and the Other
Agreements, and to perform its respective obligations
hereunder and thereunder. Each individual Franchisee
is under no limitation or restriction to enter into
and carry out this Agreement and the Other Agreements
and to perform his or her obligations under them.
(b) Validity of Agreement. The execution, delivery and
performance of this Agreement and the Other
Agreements by each corporate Franchisee and the
consummation by such Franchisees of the transactions
contemplated hereby has been duly authorized by all
requisite corporate action. No other corporate action
is necessary for the authorization, execution,
delivery and performance by such Franchisees of this
Agreement or any Other Agreements and the
consummation by such Franchisees of the transactions
contemplated hereby and thereby. This Agreement and
the Other Agreements have been duly executed and
delivered by each Franchisee and constitute the
legal, valid and binding obligations of such
Franchisee, enforceable against such Franchisee in
accordance with their terms.
(c) No Approvals or Notices Required; No Conflict with
Instruments. The execution, delivery and performance
of this Agreement and the Other Agreements by each
Franchisee and the consummation by it of the
transactions contemplated hereby (i) will not violate
(with or without the giving of notice or the lapse of
time or both), or require any consent, approval,
filing or notice under any provision of any law, rule
or
22
23
regulation, court order, judgment or decree
applicable to such Franchisee, and (ii) will not
conflict with, or result in the breach or termination
of any provision of, or constitute a default under,
or result in the acceleration of the performance of
the obligations of such Franchisee, under, the
articles of incorporation or bylaws of such
Franchisee or any indenture, mortgage, deed of trust,
lease, licensing agreement, contract, instrument or
Other Agreement to which such Franchisee is a party
or by which such Franchisee or any of its assets or
properties is bound.
(d) Acquisition for Own Account. Each Franchisee is
acquiring its Franchisee's Units for its own account
for investment and not with a view to the sale or
distribution thereof or with the present intention of
distributing or selling the same, or dividing any
such securities with any other person, except as may
be contemplated or permitted by that certain Limited
Liability Company Agreement of even date herewith by
and among the Franchisees and Old PUB. It is
specifically understood that (i) one or more of the
Franchisees may transfer and assign their respective
Franchisee's Units to other Franchisees soon after
the execution hereof and (ii) any such transfer and
assignment shall not be a violation of the
representation contained in the immediately preceding
sentence provided that the transferee Franchisees
reconfirm and affirm such representation with respect
to the Franchisee's Units so transferred to the
transferee Franchisees.
4.3. Survival of Representations and Warranties. The respective
representations and warranties of the parties contained herein
shall survive the execution and delivery of this Agreement and
the other Agreements at the Closing for a period of one (1)
year following the Effective Date (the "Survival Period").
Notwithstanding the right of the Franchisees to investigate
the Assets and the Publishing Business, the Franchisees shall
have the right to rely fully upon the representations,
warranties, covenants and agreements of TPRM and Old PUB
contained in this Agreement and pursue all rights and remedies
in connection therewith; unless as of the date hereof such
Franchisee has actual knowledge that any representations and
warranties of Old PUB and TPRM contained in this Agreement are
false or misleading in any material respect, in which
circumstance such Franchisee shall have no rights of reliance
or pursuance of remedies related to such representations
23
24
and warranties. Subject to Article 7, a claim for a breach of
a representation or warranty must be asserted by the
Indemnified Party (as hereinafter defined) prior to the
expiration of the Survival Period by providing the written
notice required by Section 7.4(a) below. In such event, the
Indemnifying Party's (as hereinafter defined) obligation under
the Agreement shall continue with respect to such claim until
resolution thereof.
5. Deliveries at Closing.
5.1. Deliveries by Old PUB and TPRM. In addition to the instruments
and other items to be delivered by Old PUB to the Company at
the Closing pursuant to Section 1.3 above, concurrently with
the execution and delivery of this Agreement, Old PUB and TPRM
shall also execute (where appropriate) and deliver to the
Company and the Franchisees the following:
(a) Authority and Proceedings. In a form reasonably
acceptable to the Franchisees, certified copies of
resolutions duly adopted by the Board of Directors
and shareholders of Old PUB and TPRM (which
resolutions shall be in full force and effect at the
time of delivery) authorizing the execution and
delivery and performance of this Agreement and the
Other Agreements and all transactions contemplated by
or incidental thereto, and such other instruments,
certificates and documents as the Franchisees shall
reasonably request.
(b) Third Party Consents. All third party consents or
approvals, except for those the failure of which to
obtain would not have a material and adverse effect
on the Company.
5.2. Deliveries by the Franchisees. Concurrently with the execution
and delivery of this Agreement, the Franchisees shall execute
(where appropriate) and deliver to Old PUB, TPRM and the
Company the following:
(a) Authority and Proceedings. For each corporate
Franchisee, in a form reasonably acceptable to Old
PUB, certified copies of resolutions duly adopted by
the Board of Directors of such Franchisee (which
resolutions shall be in full force and effect at the
time of delivery) authorizing the execution and
delivery and performance of this Agreement and the
Other Agreements and all transactions contemplated by
or incidental thereto, and
24
25
such other instruments, certificates and documents as
Old PUB shall reasonably request.
(b) Franchise Addendum. Each Franchisee shall execute and
deliver to TPRM, an Addendum to its Franchise
Agreement with TPRM.
5.3. Additional Closing Documents and Actions. The following
additional actions shall take place concurrently with or prior
to the Closing:
(a) Limited Liability Company Agreement. Old PUB and the
Franchisees shall adopt and execute and deliver to
each other the Limited Liability Company Agreement.
(b) Issuance of Certificates. The Company shall issue to
Old PUB certificates representing the Old PUB Units
and shall issue to each Franchisee certificate(s)
representing the number of Franchisees Units set
forth opposite such Franchisee's name in Exhibit "A".
(c) Contribution to Old PUB. Old PUB shall have received
an equity contribution of $200,000 either in the form
of a cash contribution from its current shareholders
or in the form of forgiveness of $200,000 of the
related party indebtedness identified on the March
31, 1995 unaudited balance sheet of Old PUB.
6. Covenants; Action Subsequent to Closing.
6.1. Mail. Old PUB authorizes and empowers the Company on and after
the Effective Date to receive and open all mail received by
the Company relating to the Publishing Business or the Assets
and to deal with the contents of such communications in any
proper manner. Old PUB shall promptly deliver to the Company
any mail or other communication received by it after the
Effective Date pertaining to the Publishing Business or the
Assets and any cash, checks or other instruments of payment to
which the Company is entitled.
6.2. Third Party Consents. To the extent that Old PUB's rights
under any Contract or other Asset may not be transferred
without the consent or approval of another person which has
not been obtained at the Closing despite the exercise by Old
PUB of its reasonable best efforts, this Agreement shall not
constitute an agreement to transfer the same if an attempted
transfer would constitute a breach thereof or be unlawful, and
Old PUB at the Company's expense, shall use its reasonable
best efforts to obtain any such required consent or approval
as
25
26
promptly as possible. If any such consent or approval shall
not be obtained or if any attempted transfer would be
ineffective or impair the Company's right to the Assets in
question so that the Company would not in effect acquire the
benefit of all such rights, Old PUB, to the maximum extent
permitted by law, shall act after the Closing as the Company's
agent in order to obtain for the Company the benefits
thereunder, and shall cooperate, to the maximum extent
permitted by law, with the Company in any other reasonable
arrangements designed to provide such benefits to the Company.
Nothing contained in this Section 6.2 shall relieve Old PUB of
its obligations under any other provisions of this Agreement.
7. Indemnification.
7.1. Indemnification by Old PUB and TPRM. Subject to the provisions
of this Section 7, Old PUB and TPRM shall, jointly and
severally, defend, indemnify and hold harmless the Company,
each Franchisee, each officer, director and agent of the
Company or a Franchisee and each person who controls the
Company or a Franchisee in respect of any material losses,
claims, damages, liabilities, deficiencies, delinquencies,
defaults, assessments, fees, penalties or related costs or
expenses, including, but not limited to, court costs and
attorneys', and accountants' fees and disbursements
(collectively referred to throughout this Agreement as
"Damages") to which the Company, each Franchisee, or any such
person may become subject if, and to the extent, such Damages
arise out of or are based upon: (i) the breach of any of the
representations, warranties, covenants or agreements made by
Old PUB or TPRM in this Agreement or any Other Agreement or
any certificate, document, schedule, instrument or Other
Agreement delivered in connection herewith or therewith and
(ii) any liability or other debts, obligations or contracts of
Old PUB or any of its affiliates, other than the Assumed
Liabilities.
7.2. Indemnification by the Company. Subject to the provisions of
this Section 7, the Company shall defend, shall indemnify and
hold harmless Old PUB and TPRM, each officer, director and
agent of Old PUB and each person who controls Old PUB or TPRM
in respect of any material Damages to which Old PUB, TPRM, or
any such person may become subject if, and to the extent, such
Damages arise out of or are based upon the Company's
obligation for the Assumed Liabilities.
26
27
7.3. Indemnification by the Franchisees. Each of the Franchisees,
severally, but not jointly, shall indemnify and hold harmless,
Old PUB, TPRM, the Company, each officer, director and agent
of Old PUB, the Company and TPRM, and each person who controls
Old PUB, the Company and TPRM in respect of any material
Damages to which Old PUB, the Company, TPRM, or any such
person may become subject if, and to the extent, such Damages
arise out of or are based upon the breach of any
representations and warranties, covenants or agreements made
by such Franchisees in this Agreement or any Other Agreement
or any certificate, document, schedule, instrument or Other
Agreement executed in connection herewith or therewith.
7.4. Indemnification Procedures. The obligations and liabilities of
each indemnifying party hereunder with respect to claims
resulting from the assertion of liability by the other party
or third parties shall be subject to the following terms and
conditions:
(a) If any person shall notify an indemnified party (the
"Indemnified Party") with respect to any matter (a
"Claim") which may give rise to a claim for
indemnification against Old PUB (or TPRM), the
Company or one or more of the Franchisees (the
"Indemnifying Party") under this Section 7, then the
Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided,
however, that no delay on the part of the Indemnified
Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend
the Indemnified Party against the Claim with counsel
of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying
Party notifies the Indemnified Party in writing
within 15 days after the Indemnified Party has given
notice of the Claim that the Indemnifying Party will
indemnify the Indemnified Party from and against the
entirety (subject to any limitations contained in
Section 7) of any Damages the Indemnified Party may
suffer resulting from, arising out of, relating to,
in the nature of or caused by the Claim, (B) the
Indemnifying Party provides the Indemnified Party
with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will
have the financial resources to defend against
27
28
the Claim and fulfill its indemnification obligations
hereunder, (C) the Claim involves only money damages
and does not seek an injunction or other equitable
relief, (D) settlement of, or an adverse judgment
with respect to, the Claim is not, in the good faith
judgment of the Indemnifying Party, likely to
establish a precedential custom or practice
materially adverse to the continuing business
interests of the Indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Claim
actively and diligently.
(c) So long as the Indemnifying Party is conducting the
defense of the Claim in accordance with Section
7.4(b) above, (A) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and
participate in the defense of the Claim, (B) the
Indemnified Party will not consent to the entry of
any judgment or enter into any settlement with
respect to the Claim without the prior written
consent of the Indemnifying Party (not to be withheld
unreasonably), and (C) the Indemnifying Party will
not consent to the entry of any judgment or enter
into any settlement with respect to the Claim without
the prior written consent of the Indemnified Party
(not to be withheld unreasonably).
(d) In the event any of the conditions in Section 7.4(b)
above is or becomes unsatisfied, however, (A) the
Indemnified Party may defend against, and, upon
notice to the Indemnifying Party, consent to the
entry of any judgment or enter into any settlement
with respect to, the Claim in any manner it
reasonably may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent
from, any Indemnifying Party in connection
therewith), (B) the Indemnifying Party will remain
responsible for any damages the Indemnified Party may
suffer resulting from, arising out of, relating to,
in the nature of, or caused by the Claim to the
fullest extent provided in this Section 7.
8. Miscellaneous.
8.1. Public Announcements. Prior to the Effective Date, no news
release or other public announcement pertaining in any way to
the transactions contemplated by this Agreement will be made
by any party hereto except in accordance with the terms of
this Agreement.
28
29
8.2. Expenses. Except as otherwise specifically provided for herein
or in that certain letter agreement dated March 17, 1995 and
signed by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and TPRM, each of the parties
hereto shall pay the fees and expenses incurred by it in
connection with the negotiation, preparation, execution and
performance of this Agreement and the Other Agreements,
including, without limitation, attorneys' fees and
accountants' fees.
8.3. Notices. All notices, offers, approvals, elections, consents,
acceptances, waivers, reports, requests and other
communications required or permitted to be given hereunder
(all of the foregoing hereinafter collectively referred to as
"Communications") shall be in writing and shall be deemed to
have been duly given if delivered personally with receipt
acknowledged or sent by registered or certified mail or
equivalent, if available, return receipt requested, or by
facsimile (with an appropriate answer back code), telex or
cablegram (which shall be confirmed by a writing sent by
registered or certified mail or equivalent on the same day
that such facsimile, telex or cablegram is sent), or by
recognized overnight courier for next day delivery, addressed
or sent to the parties at the following addresses and
facsimile numbers or to such other or additional address or
facsimile numbers or to such other or additional address or
facsimile number as any party shall hereafter specify by
Communication to the other parties:
TPRM: The Princeton Review Management Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
WITH A COPY TO: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Patterson, Belknap, ▇▇▇▇ & Tyler LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
OLD PUB: The Princeton Review Publishing Co., Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
29
30
WITH A COPY TO: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Patterson, Belknap, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
THE COMPANY: The Princeton Review Publishing Company,
L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
WITH A COPY TO: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ A Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
(OR SUCH OTHER PARTY AS MAY BE
DESIGNATED BY THE FRANCHISEES)
WITH A COPY TO: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Patterson, Belknap, ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
FRANCHISEES: See addresses for Each Franchisee on such
Franchisee's separate signature page
WITH A COPY TO: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ A Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
(OR SUCH OTHER PARTY AS MAY BE
DESIGNATED BY THE FRANCHISEES)
Notice of change of address shall be deemed given when actually
received or upon refusal to accept delivery thereof; all other
Communications shall be deemed to have been given, received and dated
on the earlier of: (i) when actually received or upon refusal to accept
delivery thereof; or (ii) on the date when delivered personally, one
(1) day after being sent by facsimile, cable, telex or overnight
courier and four (4) business days after mailing, as aforesaid.
30
31
8.4. New York Law to Apply. This Agreement shall be construed under
and in accordance with the laws of the State of New York
without giving effect to the choice of law provisions thereof.
8.5. Section Headings; Index. The section headings contained in
this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.
8.6. Legal Construction. In case any one or more of the provisions
contained in this Agreement shall be invalid or unenforceable
in any respect, the validity and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid and unenforceable
provision in light of the tenor of this Agreement and, upon so
agreeing, shall incorporate such substitute provision in this
Agreement.
8.7. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all
purposes be deemed to be an original. Each of the Franchisees
shall execute a separate signature page in the form attached
hereto. By executing a separate signature page in the form
attached hereto, each Franchisee hereby authorizes and agrees
that such separately executed signature page may be appended
to the original counterparts of this Agreement to become a
part thereof.
8.8. Gender. Wherever the context shall so require, all words
herein in the male gender shall be deemed to include the
female or neuter gender, all singular words shall include the
plural, and all plural words shall include the singular.
8.9. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective permitted successors and assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective
permitted successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this
Agreement.
8.10. Assignability. Neither TPRM or any Franchisee shall be
entitled to assign this Agreement except to a transferee which
has acquired all of such party's shares in the Company in a
manner permitted by the Limited Liability Company
31
32
Agreement, and no such assignment shall release the
transferring party from any of its obligations or duties under
this Agreement.
8.11. Arbitration.
(a) Requirement. All claims, controversies disputes and
other matters in question arising out of, or relating
to this Agreement, the breach hereof or the rights,
privileges, responsibilities or duties between or
among any one or more of the parties bound by this
Agreement, shall be decided by arbitration in
Atlanta, Georgia in accordance with the Commercial
Arbitration Rules of the AAA then existing unless all
of the parties to such claim, controversy or dispute
or other matter in question unanimously agree to the
contrary. The provisions contained in this Section
8.11 shall be specifically enforceable under the
prevailing arbitration law.
(b) Timeliness. The demand for arbitration shall be made
within a reasonable time after the claim, dispute or
other matter in question has arisen, and in no event
shall it be made when institution of legal or
equitable proceedings based on such claim, dispute or
other matter in question would be barred by the
applicable statute of limitations.
(c) Procedure. The arbitrator or arbitrators for any
proceeding conducted hereunder shall be selected in
accordance with the commercial arbitration rules of
the AAA. The award rendered by the arbitrator or
arbitrators shall be final, and judgment may entered
upon it in accordance with applicable law and any
court having jurisdiction thereover, the parties
hereto consenting to the jurisdiction of such courts
for this purpose.
(d) Costs. Except as provided to the contrary herein, the
fees and expenses related to the services provided by
the arbitrators and the AAA in connection with any
arbitration proceeding hereunder shall be paid
one-half by each party to such arbitration
proceeding. Notwithstanding the foregoing, the
prevailing party in any arbitration proceeding
conducted hereunder shall be promptly reimbursed by
the other party for all attorneys' fees reasonably
incurred by the prevailing party in such arbitration
proceeding and all fees and expenses paid by such
prevailing party for the services rendered by the
arbitrators and the AAA.
32
33
8.12. Entire Agreement, Modification, Consents and Waivers. This
Agreement (including the Schedules and Exhibits hereto and the
certificates to be delivered in connection herewith) and all
of the other documents, instruments, letters and agreements
executed effective of even date herewith contains the entire
agreement of the parties with respect to the subject matter
thereof. No interpretation, change, termination or waiver of
or extension of time for the performance under any provision
of this Agreement shall be binding upon any party unless in
writing and signed by the party intended to be bound thereby.
Receipt by any party of money or other consideration due under
this Agreement, or the Closing of the transactions
contemplated hereby, with or without knowledge of breach,
shall not constitute a waiver of such breach or any provision
of this Agreement. Except as otherwise provided in this
Agreement, no waiver of or other failure to exercise any right
under, or default or extension of time for performance under,
any provision of this Agreement shall affect the right of any
party to exercise any subsequent right under or otherwise
enforce said provision or any other provision hereof or to
exercise any right or remedy in the event of any other
default, whether or not similar.
9. Special Provisions.
9.1. Rights upon Reconstitution of Publishing Business. If the TPRM
License should ever terminate or expire, for whatever reason,
and TPRM (or any person that controls, is controlled by or is
under common control with TPRM) should thereafter elect to
continue the Publishing Business, then TPRM and the
Franchisees shall each have the following rights and
obligations:
(a) TPRM (i) must conduct the Publishing Business, or
cause the Publishing Business to be conducted,
through a new corporation or limited liability
company ("new publishing company") pursuant to a
license agreement similar to the License Agreement,
(ii) shall cause each of the Franchisees (or the
assignee of such Franchisee's rights under this
Section 9.1(a)) to receive the same percentage
ownership interest in the new publishing company,
simultaneously with the initial issuance of the new
publishing company's stock, which such Franchisee
owned on the formation of the Company and (iii) shall
cause the owner or owners of all other ownership
33
34
interests of the new publishing company to enter into
an agreement, simultaneously with the initial
issuance of the new publishing company's ownership
interests, in a form and content substantially
similar to the Limited Liability Company Agreement
being entered into of even date herewith in regard to
the ownership interests of the Company.
(b) The Franchisees shall (i) make the agreement
contained in Section 2 hereof at such time for the
benefit of the new publishing company, (ii) execute
such other documents as may be necessary to reflect
that the new publishing company will enjoy all other
privileges and benefits conferred upon the Company
pursuant to this Agreement and (iii) execute and
enter into, or, if applicable, cause the assignee of
Franchisee's rights under this Section 9.1 to execute
and enter into, the agreement referred to clause
(iii) of Section 9.1(a) hereof.
At the option of each Franchisee, the rights contained in this Section
9.1 may be sold, transferred or assigned only together with such
Franchisee's units of membership interests in the Company.
9.2. Intentionally Omitted.
9.3. Transfer by Certain Franchisees to Affiliates. Immediately
upon completion of the transactions contemplated hereby,
certain of the Franchisees shall, and hereby do, transfer,
assign and convey (i) such Franchisee's units of non-voting
membership interests in the Company issued pursuant to this
Agreement and (ii) all of the rights of such Franchisee under
Section 9.1 hereof to the person designated next to such
Franchisee's name on Exhibit "A" attached hereto as such
Franchisee's "Immediate Transferee." All Immediate
Transferee's of a Franchisee shall be an affiliate of such
Franchisee. If there is no Immediate Transferee designated
next to any Franchisee's name on Exhibit "A" attached hereto,
then such Franchisee is not transferring its units of
non-voting membership interests in the Company issued pursuant
to this Agreement to any person pursuant to the provisions of
this Section 9.3. To avoid unnecessary issuance and
cancellation of certificates, the initial certificates
evidencing those units of non-voting membership interests in
the Company being issued to the Franchisees who are
transferring those shares to an Immediate Transferee, may be
initially issued to the Immediate Transferee.
34
35
9.4. Intentionally omitted
9.5. Franchisees' Legal Fees. Reference is made to the fact that
some of the Franchisees ("Fronting Franchisees") have incurred
and paid certain legal fees ("Franchisee Legal Fees") in
connection with the negotiation and preparation of this
Agreement and certain other documents and agreements being
executed of even date herewith. As a condition precedent to
each Franchisee's right to receive the number of units of
non-voting membership interests indicated on Exhibit "A"
attached hereto, such Franchisee shall remit to the Company on
behalf of the Fronting Franchisees, an amount equal to $28.00
multiplied by the number of units of non-voting membership
interests to be issued to such Franchisee. Each of the
Fronting Franchisees shall be entitled to a credit against
such amount payable pursuant to this Section 9.5 in the amount
which such Fronting Franchisee has actually paid through the
Closing toward the Franchisee Legal Fees. All amounts
collected by the Company pursuant to this Section 9.5 shall be
paid to the Fronting Franchisees in reimbursement of the
Franchisee Legal Fees paid by each of them or for which they
are obligated. If the total amount collected pursuant to this
Section 9.5 exceeds the total amount of Franchisee Legal Fees,
then the excess shall be refunded to the Franchisees by the
Company in proportion to the number of units of non-voting
membership interests owned by each of them. Company agrees and
covenants, for the benefit of the Fronting Franchisees, that
it will not issue the certificate representing Franchisee's
units of non-voting membership interests until it has received
payment of the amount required pursuant to the provisions
hereof from such Franchisee.
9.6. Legend Requirement. The Certificates representing the Old PUB
Units and the Franchisees Units shall bear the following
legend:
THE UNITS REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR EXEMPTION
THEREFROM UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS.
The Franchisees and Old Pub further agree and covenant that they shall
not make any transfer or assignment of any units of membership
interests in the Company issued to
35
36
them if such transfer or assignment would be in violation of any
federal or state securities or other law or that would cause the
Company to be in such violation.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement effective as of the Effective Date.
THE PRINCETON REVIEW MANAGEMENT CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: President
--------------------------------------
TPRM
THE PRINCETON REVIEW PUBLISHING
COMPANY, L.L.C..
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: President
--------------------------------------
THE COMPANY
THE PRINCETON REVIEW PUBLISHING CO., INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: President
--------------------------------------
OLD
PUB
36
37
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee:
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee:
-------------------------------------------------------------------
Printed Name of Officer
(if applicable):
--------------------------------------------------------------
Address for Notice:
-------------------------------------------------------------
37
38
EXHIBIT "A"
Immediate Number of Units
Name of Transferee of Non-Voting
Franchisee (if any) Membership
---------- -------- ----------
Amherst 29.74
Anaheim 118.4
Boston 160.73
Chapel Hill 27.66
Charlotte 6.82
Cleveland 25.68
Denver 41.44
Detroit 48.06
Fairfield 56.99
Gainsville 13.94
Los Angeles 205.45
Miami 58.59
New Hampshire 22.4
New Jersey 355.16
New Orleans 6.29
Oklahoma 3.12
Phoenix 24.19
Pittsburgh 25.1
Puerto Rico 4.26
Rhode Island 20.81
St. Louis 25.17
San Diego 38.31
San ▇▇▇▇ 79.54
Tennessee 11.1
Texas 230.76
Utah 5.25
Westchester 79.31
San Francisco 36.62
38
39
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Jointly
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Jointly
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------------------------------------
Address for Notice: ▇.▇.▇▇▇ ▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
40
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: Princeton Review of Boston, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, # ▇
-------------------------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
41
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: Princeton Review of Orange County, Inc..
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: The Princeton Review
-------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
42
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
43
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
44
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: The Princeton Review - Peninsula, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., # ▇▇▇
-------------------------------------------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
45
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: Test Services, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
46
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: Lecamp Co. Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (#310)
-------------------------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
47
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee:The Princeton Review of New Hampshire and Maine, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇
-------------------------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
48
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: The Princeton Review of New Jersey, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
49
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: The Princeton Review of Pittsburgh, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇.▇. ▇▇▇ ▇▇▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
50
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: The Princeton Review of RI, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
51
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: The Princeton Review of St. Louis, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
-------------------------------------------------------------
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
-------------------------------------------------------------
52
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: The Kafiristan Blokes
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ F. ▇▇▇▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): The Princeton Review
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
-------------------------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
53
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: TS. TS, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ Rob Case/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): Rob Case ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇ ▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇, #▇
-------------------------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
54
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: ▇▇▇▇▇▇ ▇▇▇▇▇▇ (Utah)
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): The Princeton Review
--------------------------------------------------------------
Address for Notice: ▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
-------------------------------------------------------------
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------------------------
55
FRANCHISEE JOINDER TO
FORMATION AGREEMENT
By executing in the space provided below, the Franchisee identified
below acknowledges having received and read, and agrees to become a party to,
and be bound by, the Formation Agreement dated effective May 31, 1995 by and
among The Princeton Review Publishing Company, L.L.C., The Princeton Review
Publishing Co., Inc., The Princeton Review Management Corporation and the other
independent The Princeton Review franchisees identified on exhibit "A" attached
thereto
Printed Name of Franchisee: The Princeton Review of Northern California, Inc.
-----------------------------------------------------
Signature of Franchisee or
Authorized Officer of
Franchisee: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------------------------------
Printed Name of Officer
(if applicable): ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------
Address for Notice: ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------------------
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------------------