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Exhibit 2.1
CONVERSION AND CONTRIBUTION AGREEMENT
THIS CONVERSION AND CONTRIBUTION AGREEMENT (the "Agreement") is
executed and entered into effective as of the 1st day of April 2000, by and
among (i) The Princeton Review, Inc., a Delaware corporation ("TPR"), (ii) each
of the persons and entities listed on Schedule I attached hereto (collectively,
the "Non-Voting Members"), (iii) John S. Katzman ("Katzman") and (iv) TPR
Holdings, Inc., a Delaware corporation ("Newco").
RECITALS
A. TPR, Random House TPR, Inc., a Delaware corporation ("RH") and the
Non-Voting Members are parties to a Limited Liability Company Agreement, dated
as of the 31st day of May, 1995, as amended, (as so amended, the "LLC
Agreement"), pursuant to the terms of which Princeton Review Publishing Company,
L.L.C., a Delaware limited liability company (the "Publishing LLC"), was formed
and is currently being operated.
B. In connection with the consummation of certain transactions
described below, TPR and the Non-Voting Members desire to amend the LLC
Agreement in certain respects as hereinafter set forth in this Agreement.
C. TPR and the Non-Voting Members desire to enter into this Agreement
to set forth the terms and conditions pursuant to which they have agreed to
exchange their respective membership interests in Publishing LLC for shares of
capital stock of Newco in a transaction which is described in Section 351 of the
Internal Revenue Code of 1986, as amended (the "Code").
D. Katzman, TPR and the Non-Voting Members are parties to a
Preservation of Rights Agreement, dated as of the 31st day of May 1995 (the
"Preservation of Rights Agreement") which imposes certain restrictions on, and
grants certain rights to the Non-Voting Members in respect of, Katzman's shares
of capital stock in TPR.
E. In connection with the consummation of certain transactions
described below, Katzman, TPR and the Non-Voting Members desire to terminate the
Preservation of Rights Agreement as hereinafter set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties hereto do hereby agree as follows:
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1. Defined Terms. All capitalized terms used herein which are not
specifically defined herein shall have the respective meanings assigned to such
terms pursuant to the provisions of the LLC Agreement.
2. Satisfaction and Discharge of Outstanding Related Party Overhead
Indebtedness. Publishing LLC is currently indebted to Princeton Review Products
LLC, a Delaware limited liability company ("Products"), for the allocated cost
of shared overhead expenses previously provided for the benefit of Publishing
LLC by Products in the aggregate amount of approximately Sixteen Million Seven
Hundred Thousand Dollars ($16,700,000) (the "Related Party Overhead
Indebtedness"). TPR and the Non-Voting Members hereby irrevocably agree that the
Related Party Overhead Indebtedness shall be satisfied and discharged by
Publishing LLC as follows:
(a) Products shall have the right on or before the close of
business on the date hereof (the "Conversion Deadline") to convert up to Twelve
Million Dollars ($12,000,000) of such Related Party Overhead Indebtedness into
newly-issued units of Voting Interests (the "New Voting Interests") in
Publishing LLC. The per unit purchase price for such New Voting Interests shall
be Three Thousand Nine Hundred Twenty Dollars ($3,920.00) (the "Purchase
Price"). Products shall notify Publishing LLC in writing of the aggregate amount
of Related Party Overhead Indebtedness which is to be so converted on or before
the Conversion Deadline (the "Conversion Notice"). Immediately following receipt
of the Conversion Notice, Publishing LLC shall issue to Products certificate(s)
signed by an authorized officer of Publishing LLC representing the number of
units of New Voting Interests issuable in respect of the Related Party Overhead
Indebtedness being converted which shall be determined by dividing the amount of
Related Party Overhead Indebtedness so converted by the Purchase Price. (Such
number of units of New Voting Interests is hereinafter referred to as the
"Number of New Voting Interests.") Upon the issuance to Products of the
certificate(s) for the Number of New Voting Interests the outstanding amount of
the Related Party Overhead Indebtedness shall be reduced by the amount of the
Related Party Overhead Indebtedness so converted. The Non-Voting Members hereby
acknowledge and agree that the issuance and sale of the New Voting Interests
upon the conversion of any Related Party Overhead Indebtedness as provided in
this Section 2 has been approved by the requisite number of Members for purposes
of Section 13.3(a)(4) of the LLC Agreement by the execution and delivery of this
Agreement and that the per unit purchase price for such New Voting Interests
determined pursuant to the foregoing provisions shall be conclusively deemed to
be adequate consideration for the issuance and sale of such New Voting Interests
for all purposes of the LLC Agreement.
(b) In connection with the issuance of the New Voting
Interests each of the Non-Voting Members shall have the preemptive right to
acquire all or any part of such Non-Voting Member's Proportional Number of units
of Non-Voting Interests for a cash payment equal to the per unit purchase price
for the New Voting Interests determined as provided in paragraph (a) of this
Section 2. Each of the Non-Voting Members shall notify Publishing LLC in writing
of the aggregate number of units of Non-Voting Interests such Non-Voting Member
is electing to acquire upon the exercise
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of such preemptive rights on or before the Closing Date (as defined below) (the
"Preemptive Notice"). An electing Non-Voting Holder will have up to forty (40)
days after the Closing Date to pay the full purchase price for the units of
Non-Voting Interests so purchased. TPR and the Non-Voting Members hereby
acknowledge and agree that the LLC Agreement is hereby deemed to be amended by
the execution and delivery of this Agreement to the extent necessary so that (i)
the provisions of Section 13.3(c)(2) of the LLC Agreement shall not be
applicable to the issuance and sale of the New Voting Interests and (ii) the
provisions of Section 13.3(c)(3) of the LLC Agreement shall not be applicable to
the exercise of the preemptive rights arising in connection with the issuance
and sale of the New Voting Interests pursuant to the provisions of this
paragraph (b). In addition, each of the Non-Voting Members agrees that none of
the funds used to purchase any Non-Voting Interests upon the exercise of such
preemptive rights (the "New Non-Voting Interests") will consist of funds
advanced or otherwise made available to the purchasing Non-Voting Member from
any other Non-Voting Member(s) or his, her, its or their Affiliates and that for
a period of six months following the Closing Date none of the New Non-Voting
Interests will be transferred to any other Non-Voting Member(s) or his, her, its
or their Affiliates.
(c) On or before the Conversion Deadline the balance of the
Related Party Overhead Indebtedness which remains outstanding after giving
effect to any conversion of a portion thereof into New Voting Interests shall be
satisfied and discharged in full by Publishing LLC distributing to Products a
portion of the shares of common stock of Student Advantage Inc. ("Student
Advantage") held by Publishing LLC equal to the quotient obtained by dividing
(x) the amount of the Related Party Overhead Indebtedness to be so satisfied and
discharged by (y) the arithmetic average of the closing sale prices of the
common stock of Student Advantage as reported on the Nasdaq Stock Market for the
five (5) trading days immediately preceding the date of the closing of such
satisfaction and discharge. TPR and the Non-Voting Members hereby acknowledge
and agree that the LLC Agreement is hereby deemed to be amended by the execution
and delivery of this Agreement to the extent necessary so that the provisions of
Section 13.3 of the LLC Agreement shall not be violated by the distribution of
the Student Advantage shares to Products as contemplated by this paragraph (c).
(d) Immediately following the distribution of Student
Advantage shares to Products as contemplated by paragraph (c), Publishing LLC
shall distribute shares of Student Advantage common stock held by it to its
Members in the individual amounts set forth on Schedule II annexed hereto.
3. Conversion of Non-Voting Membership Interests in Publishing LLC into
Newco Class B Common Stock. Subject to the satisfaction of the conditions set
forth below in paragraph (d) of this Section 3, each of the Non-Voting Members
hereby agrees to transfer to Newco all of its, his or her Membership Interests
in Publishing LLC solely in exchange for the issuance to such party of shares of
Non-Voting Class B Common Stock, $.01 per share par value, of Newco (the "Class
B Common Stock"), as follows:
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(a) Each unit of Non-Voting Interests in Publishing LLC,
including any New Non-Voting Interests issued pursuant to the transactions
contemplated by paragraph (b) of Section 2 of this Agreement, shall be exchanged
for shares of Class B Common Stock, to be based upon an aggregate of 10,455,000
shares of Newco to be issued to the Voting Members and the Non-Voting Members
collectively.
(b) In connection with the exchange of his, her or its
Non-Voting Interests for shares of Class B Common Stock, each Non-Voting Member
represents and warrants (solely with respect to himself, herself or itself) to
Newco as follows:
(i) Such Non-Voting Member has a pre-existing
business relationship with Publishing LLC and its Related Parties and by reason
of his, her or its business or financial experience is capable of evaluating the
merits and risks of an investment in the shares of Class B Common Stock of Newco
and of protecting his, her or its own interests in connection with such
investment.
(ii) Such Non-Voting Member has not seen, received,
been presented with or been solicited by any leaflet, public promotional
meeting, newspaper or magazine article or advertising, radio or television
advertisement or any other form of advertising or general solicitation with
respect to the proposed issuance and sale of the Class B Common Stock to such
Non-Voting Member contemplated by this Agreement.
(iii) Such Non-Voting Member is acquiring the shares
of Class B Common Stock to be issued to him, her or it at the Closing for
investment purposes for his, her or its own account only and not with a view to
or for sale in connection with any distribution of all or any part of the Class
B Common Stock. No other Person will have any direct or indirect interest in or
right to the shares of Class B Common Stock issued to such Non-Voting Member at
the Closing.
(iv) Such Non-Voting Member is financially able to
bear the economic risk of an investment in the Class B Common Stock, including a
total loss of the value of such investment.
(v) Such Non-Voting Member acknowledges that the
Class B Common Stock to be issued to him, her or it hereunder has not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or qualified under Delaware law, the New York General Business Law, as amended,
or any other applicable blue sky laws in reliance, in part, on his, her or its
representations, warranties and agreements contained in this paragraph (b).
(vi) Such Non-Voting Member understands that the
Class B Common Stock to be issued to him, her or it hereunder will be
"restricted securities" as defined in Rule 144 promulgated by the Securities and
Exchange Commission pursuant to the Securities Act because such Class B Common
Stock will be acquired from Newco in a transaction not involving a public
offering, that such Class B Common Stock may be resold by such Non-Voting Member
without registration under the Securities Act only in
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certain limited circumstances and that otherwise such Class B Common Stock must
be held indefinitely. In this connection, such Non-Voting Member understands the
resale limitations imposed by the Securities Act and is familiar with Rule 144
promulgated by the Securities and Exchange Commission, as presently in effect,
and the conditions which must be met in order for that Rule to be available for
resale of such Class B Common Stock.
(vii) Such Non-Voting Member acknowledges that the
Class B Common Stock is a speculative investment which involves a substantial
degree of risk of loss of his, her or its entire investment in Newco, that such
Non-Voting Member understands and takes full cognizance of the risk factors
related to the purchase of the Class B Common Stock and that Newco is newly
organized and has no financial or operating history.
(viii) Such Non-Voting Member has received and
reviewed all information he, she or it considers necessary or appropriate for
the purpose of deciding whether to purchase the Class B Common Stock pursuant to
the provisions of this Agreement. Such Non-Voting Member has had an opportunity
to ask questions of and receive answers from Newco and its representatives
regarding the terms and conditions of purchase of the Class B Common Stock
contemplated hereby and regarding the business, financial affairs and other
aspects of Newco and has further had the opportunity to obtain all information
which such Non-Voting Member deemed necessary to evaluate the investment in
Class B Common Stock contemplated hereby and to verify the accuracy of
information otherwise provided to him, her or it in connection with such
investment.
(ix) Such Non-Voting Member is an "accredited
investor" within the meaning of Rule 501 promulgated by the Securities and
Exchange Commission.
(x) Such Non-Voting Member has been advised by Newco
and its representatives to consult with his, her or its own attorney regarding
all legal matters related to the investment in the Class B Common Stock
contemplated hereby, has done so, to the extent he, she or it considers
necessary and is not relying on any legal advice provided by Newco or any of its
representatives in connection with the transactions contemplated hereby.
(c) In connection with the issuance of the Class B Common
Stock in exchange for the Membership Interests of the Non-Voting Members, Newco
hereby represents and warrants to each of the Non-Voting Members as follows:
(i) Newco is a newly-organized corporation which has
not heretofore conducted any business operations and does not have any assets,
obligations or liabilities of any type or kind and Newco is not a party to any
agreement or arrangement with any Person other than certain agreements entered
into by Newco in connection with the initial issuance of its shares of Class A
Common Stock and Class B Common Stock as contemplated by paragraph (d) of this
Section 3.
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(ii) The authorized capital stock of Newco consists
of 20,000,000 shares of Class A Common Stock and 10,000,000 shares of Class B
Common Stock, none of which have been issued. Except as contemplated by
paragraph (d) of this Section 3, there is no subscription, option, warrant,
call, right, agreement or other commitment to which Newco is a party or by which
Newco is bound relating to the issuance of shares of capital stock of Newco. It
is anticipated that the Certificate of Incorporation of Newco will be amended
after the Closing to create a newly-authorized class of convertible preferred
stock.
(iii) The issuance and sale of the shares of Class B
Common Stock at the Closing and the consummation of the other transactions
related thereto to which Newco is a party have been duly and validly authorized
by all necessary action on the part of Newco and no other corporate proceedings
on the part of Newco are necessary to authorize such issuance and sale and such
consummation.
(iv) Upon the issuance thereof at the Closing, each
share of Class B Common Stock issued pursuant to the provisions of this Section
3 shall be duly authorized, validly issued, fully paid and non-assessable.
(v) The Non-Voting Members have been provided with
true, correct and complete copies of each of the agreements to which Newco is a
party which will effect the transactions contemplated by clauses (ii) and (iii)
of paragraph (d) below.
(vi) Upon completion of the conversion of the Related
Party Overhead Indebtedness as contemplated by Section 2, the contributions
contemplated by this Section 3 and the other contributions referred in clauses
(ii) and (iii) of paragraph (d) below, the issued and outstanding capital stock
of Newco will be owned in the denominations and by the parties listed on
Schedule III annexed hereto.
(vii) All material third party consents that are
required in order for Newco to complete the transactions contemplated by clauses
(ii) and (iii) of paragraph (d) below have been obtained.
(d) The exchange of the Non-Voting Interests for shares of
Class B Common Stock shall take place at a closing (the "Closing") which will be
held at the offices of Newco's counsel, Patterson, Belknap, Webb & Tyler LLP,
1133 Avenue of the Americas, New York, New York 10036-6710 at 10:00 a.m. on
April 1, 2000 (the "Closing Date"), subject to the satisfaction of the following
conditions:
(i) The Certificate of Incorporation and Bylaws of
Newco in the forms attached hereto as Exhibits A and B, respectively, shall not
have been amended or modified since the dates of their respective adoption and
shall continue to be in full force and effect as of the Closing Date and each
Non-Voting Member shall have received a Certificate from the Secretary of Newco
dated the Closing Date to such effect.
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(ii) Simultaneously with the Closing, each of
Katzman and Bruce Task, Mark Chernis, Alicia Ernst, Jay Rosner, Jay Shulman,
Harold K. Lee and Steven Kursar (collectively, the "Management Stockholders")
shall have transferred to Newco all of his or her shares of common stock of TPR
solely in exchange for the issuance to each such Person of the number of shares
of Class A Common Stock or Class B Common Stock set forth opposite his or her
name on Schedule IV annexed hereto.
(iii) Simultaneously with the Closing, RH shall have
transferred to Newco all of its Membership Interest in Publishing LLC and all of
its membership interests in each of Princeton Review Management, L.L.C., a
Delaware limited liability company, Princeton Review Products, L.L.C., a
Delaware limited liability company, and Princeton Review Operations, L.L.C., a
Delaware limited liability company, solely in exchange for the issuance to RH of
the number of shares of Class A Common Stock set forth on Schedule V annexed
hereto.
(iv) The representations and warranties of each
Non-Voting Member set forth in this Agreement shall be true and correct in all
material respects as of the time immediately prior to the consummation of the
transactions contemplated by this Section 3 at the Closing and Newco shall have
received a Certificate from each Non-Voting Member dated the date of the Closing
to such effect.
(v) The representations and warranties of Newco set
forth in this Agreement shall be true and correct in all material respects as of
the time immediately prior to the consummation of the transactions contemplated
by this Section 3 at the Closing and each Non-Voting Member shall have received
a Certificate from the Secretary of Newco dated the date of the Closing to such
effect.
(vi) Simultaneously with the Closing each of the
Management Stockholders, RH and the Non-Voting Members shall have executed and
delivered a Stockholders Agreement in the form of Exhibit C attached hereto with
respect to their shares of Class A Common Stock and Class B Common Stock of
Newco.
(e) Each of the Non-Voting Members hereby acknowledges and
agrees that the LLC Agreement is hereby deemed to be amended by the execution
and delivery of this Agreement to the extent necessary so that the exchange of
their respective Membership Interests in Publishing LLC for shares of Class B
Common Stock of Newco at the Closing together with the exchange of Katzman's
shares of capital stock of TPR for shares of Class A Common Stock of Newco as
contemplated by this Section 3, (i) shall not be deemed to be a Transfer by Sale
of any Non-Voting Interests or any interests in any Non-Voting Interests which
is subject to the provisions of Section 11.1 of the LLC Agreement, (ii) shall
not be deemed to be a Transfer by Sale of any Voting Interests or any interests
in any Voting Interests to a Person which is, or upon completion of the exchange
contemplated by this Section 3 will be, an Affiliated Transferree which is
subject to the provisions of Section 11.4 of the LLC Agreement and (iii) shall
not be deemed to be a Transfer by Sale of any Voting Member's units of Voting
Interests which is subject to the provisions of Section 12.1 of the LLC
Agreement. In addition, each of
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TPR and the Non-Voting Holders hereby agrees that the transactions contemplated
by this Section 3 shall not be deemed to be a Major Company Transaction which is
subject to the provisions of Section 13.1 of the LLC Agreement.
(f) Each of the Non-Voting Members hereby acknowledges and
agrees that the exchange of Katzman's shares of TPR for shares of Class A Common
Stock of Newco at the Closing as contemplated by this Section 3 shall not be
deemed to be a Transfer by Sale of any Covered Stock which is subject to the
provisions of Sections 3, 5 or 6 of the Preservation of Rights Agreement by and
between the Founder and the Non-Voting Members.
(g) Effective upon the consummation of the transactions
contemplated by this Section 3 at the Closing, each of TPR, Katzman and the
Non-Voting Members acknowledges and agrees that the Preservation of Rights
Agreement shall be terminated and of no further force or effect.
(h) At the Closing, each Non-Voting Member shall deliver to
Newco the certificates representing the units of Non-Voting Interests to be
exchanged for the Class B Common Stock, duly endorsed for transfer and such
certificates shall be free and clear of any liens, charges or encumbrances. At
the Closing, Newco shall deliver to each Non-Voting Member a certificate
representing the shares of Class B Common Stock being issued to such Non-Voting
Member. If it is inconvenient for any Non-Voting Member to conduct a physical
closing at the Closing, the transactions contemplated by this Section 3 may be
conducted by mail or messenger service, if such a procedure is feasible, so long
as all documentation is provided in accordance with the requirements of this
paragraph (h) within five (5) business days of the Closing Date.
4. Miscellaneous.
(a) This Agreement may be amended, modified or supplemented
only by written agreement of all of the parties hereto.
(b) Any failure of any of the parties to comply with any
obligation, covenant, agreement or condition herein may be waived by the party
or parties entitled to the benefits thereof only by a written instrument signed
by the party or parties granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in this paragraph (b).
(c) The representations and warranties of the Non-Voting
Members and Newco set forth in Section 3 shall survive the Closing and will
expire on the first anniversary of the Closing. Each Non-Voting Member agrees to
indemnify, defend and hold Newco harmless from and against any losses,
liabilities, costs, expenses or other
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damages (including reasonable attorneys' fees) (collectively, the "Indemnified
Losses") arising out of any breach of any of such Non-Voting Members
representations and warranties set forth in Section 3 of this Agreement, Newco
agrees to indemnify, defend and hold each Non-Voting Member harmless from and
against any Indemnified Losses arising out of any breach of any of Newco's
representations and warranties set forth in Section 3 of this Agreement.
(d) All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at their respective addresses as reflected on the books and records of
Publishing LLC (or at such other address for a party as shall be specified by
like notice; provided that notices of a change of address shall be effective
only upon receipt thereof).
(e) This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of all of the other parties
hereto, nor is this Agreement intended to confer upon any other person except
the parties hereto any rights or remedies hereunder.
(f) This Agreement shall be governed by the laws of the State
of Delaware (regardless of the laws that might otherwise govern under applicable
Delaware principles of conflicts of law) as to all matters, including, but not
limited to, matters of validity, construction, effect, performance and remedies.
(g) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(h) The Section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
parties and shall not in any way affect the meaning or interpretation of this
Agreement. The parties have participated jointly in the negotiation and drafting
of this Agreement. If any ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumptions or burden of proof shall arise favoring or disfavoring any
party by virtue of authorship of any of the provisions of this Agreement.
(i) This Agreement, including the Schedules and Exhibits
hereto and the documents, certificates and instruments referred to herein,
embodies the entire agreement and understanding of the parties hereto in respect
of the transactions contemplated hereby. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
transactions.
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(j) Except as otherwise specifically provided in this
Agreement, whether or not the transactions contemplated hereby are consummated,
all costs and expenses incurred by any party in connection with the Agreement
and the transactions contemplated hereby will be paid by such party.
(k) Newco covenants and agrees with the Non-Voting Members
that it will amend its Certificate of Incorporation promptly after the Closing
Date to provide that with respect to any vote of the holders of the Class B
Common Stock as a separate class which is required by the provisions of the
Delaware General Corporation Law to provide that the affirmative vote of the
holders of at least seventy-five (75%) percent of the outstanding shares of
Class B Common Stock shall be required.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first above written.
TPR HOLDINGS, INC.
By: /s/ John Katzman
Name: John S. Katzman
Title: President and Chief Executive Officer
Address: 2315 Broadway, New York, NY 10024
Fax No.: (212) 874-0775
THE PRINCETON REVIEW, INC.
By: /s/ John Katzman
Name: John S. Katzman
Title: President and Chief Executive Officer
Address: 2315 Broadway, New York, NY 10024
Fax No.: (212) 874-0775
/s/ John Katzman
Name: John S. Katzman
Address: 2315 Broadway, New York, NY 10024
Fax No.: (212) 874-0775
[SIGNATURE PAGE TO CONVERSION AND CONTRIBUTION AGREEMENT]
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Charles Emmons & Charles Emmons Jr. Jointly
By: /s/ Charles F. Emmons, Jr. (7.28 units subscribed for through preemptive
rights)
Name: Charles F. Emmons, Jr.
Title: Treasurer
Address: 77 Oak Street, Florence, MA 01062
Fax No.: (413) 586-4939
By: /s/ Charles F. Emmons
Name: Charles F. Emmons
Title: President
Address: 6093 Vt. Rte 14, Brookfield, VT 05036
Fax No.: (802) 276-2153
The Princeton Review of Orange County, Inc.
By: /s/ Paul Kanarek (100% units subscribed for through preemptive rights)
Name: Paul Kanarek
Title: President
Address: 2151 Michelson #280, Irvine, CA 92612
Fax No.: (949) 553-8119
The Princeton Review of North Carolina , Inc.
By: /s/ Patricia Krebs (6.77 units subscribed for through preemptive rights)
Name: Patricia Krebs
Title: President
Address: 1525 E. Franklin Street, Chapel Hill, NC 27514
Fax No.: ((919) 967-7218
[SIGNATURE PAGE TO CONVERSION AND CONTRIBUTION AGREEMENT]
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Lecomp Company, Inc.
By: /s/ Lloyd Eric Cotsen (___ units subscribed for through preemptive rights)
Name: Lloyd Eric Cotsen
Title: Godless Clown
Address: 1880 Veteran Ave (#310), Los Angeles, CA 90025
Fax No.: (310) 479-0768
The Princeton Review of Pittsburgh, Inc.
By: /s/ James L. Weinberg (50% units subscribed for through preemptive rights)
Name: James L. Weinberg
Title: President
Address: 410 Hampton Ave., Pittsburgh, PA 15221
Fax No.: (412) 243-7218
The Princeton Review of Rhode Island, Inc.
By: /s/ Paul Stouber (5.10 units subscribed for through preemptive rights)
Name: Paul Stouber
Title: President
Address: 189 Governor Street, Suite 103, Providence, RI 02906
Fax No.: (401) 861-5096
/s/ Karen Kearns (1.04 units subscribed for through preemptive rights)
Name: Karen Kearns
Title: Director
Address: 1555 Francia St., San Juan, PR 00911
Fax No.: (787) 724-8057
[SIGNATURE PAGE TO CONVERSION AND CONTRIBUTION AGREEMENT]
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The Princeton Review of Peninsula, Inc.
By: /s/ Pamela N. Hirsch (12.985 units subscribed for through preemptive rights)
Name: Pamela N. Hirsch
Title: Owner
Address: 3543 Mandeville Canyon Road, Los Angeles, CA 90041
Fax No.: (310) 476-8156
The Princeton Review of St. Louis, Inc.
By: /s/ William Lindsley (7.70 units subscribed for through preemptive rights)
Name: William Lindsley
Title:
Address:
Fax No.:
The Kafiristan Blokes
By: /s/ F. Wade McKinney, /s/ Stephen A. Leake (0 units subscribed for through
preemptive rights)
Name: F. Wade McKinney, Stephen A. Leake
Title: Owners
Address: 110 21st Ave S. #106, Nashville, TN 37203
Fax No.: (615) 292-5919
/s/ Elyane Harney (_____ units subscribed for through preemptive rights)
Name: Elayne Harney
Title: Consultant
Address: 2310 Mason St.
Fax No.: (415) 445-9173
[SIGNATURE PAGE TO CONVERSION AND CONTRIBUTION AGREEMENT]
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The Princeton Review of Boston, Inc.
By: /s/ Rob Cohen (all available units subscribed for through preemptive rights)
Name: Robert Cohen
Title: Secretary
Address: 57 Union Street, Boston, MA
Fax No.: (617) 558-2727
The Princeton Review of New Jersey, Inc.
By: : /s/ Rob Cohen (all available units subscribed for through preemptive
rights)
Name: Robert Cohen
Title: President
Address: 252 Nassau Street, Princeton, NJ 08542
Fax No.: (609) 688-0432
TSTS, Inc.
By: /s/ Rob Case ($100,000 worth of units subscribed for through preemptive
rights)
Name: Rob Case
Title: Chief Executive Officer
Address: 701 N. Post Oak Rd. #8, Houston, TX 77024
Fax No.: (512) 474-8385, (512) 402-0416
Test Services, Inc.
By: /s/ Peter Dinneen (0 units subscribed for through preemptive rights)
Name: Peter Dinneed
Title: President
Address: 7350 N. Broadway, Denver, CO 80221
Fax No.: (303) 487-9402
[SIGNATURE PAGE TO CONVERSION AND CONTRIBUTION AGREEMENT]
14
<PAGE> 15
SCHEDULE I
List of Non-Voting Members
Charles Emmons & Charles Emmons Jr., jointly
The Princeton Review of Orange County, Inc.
The Princeton Review of North Carolina, Inc.
Lecomp Company, Inc.
The Princeton Review of Pittsburgh, Inc.
The Princeton Review of Rhode Island, Inc.
Karen Kearns
The Princeton Review of Peninsula, Inc.
The Princeton Review of St. Louis, Inc.
The Kafiristan Blokes
Elyane Harney
The Princeton Review of Boston, Inc.
The Princeton Review of New Jersey, Inc.
TSTS, Inc.
Test Services, Inc.
<PAGE> 16
SCHEDULE II
Allocations of Distributed Student Advantage Shares
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
Charles Emmons & Charles Emmons Jr., jointly 1,207 shares
The Princeton Review of Orange County, Inc. 4,807 shares
The Princeton Review of North Carolina, Inc. 1,123 shares
Lecomp Company, Inc. 8,382 shares
The Princeton Review of Pittsburgh, Inc. 919 shares
The Princeton Review of Rhode Island, Inc. 845 shares
Karen Kearns 173 shares
The Princeton Review of Peninsula, Inc. 3,018 shares
The Princeton Review of St. Louis, Inc. 1,277 shares
The Kafiristan Blokes 362 shares
Elyane Harney 171 shares
The Princeton Review of Boston, Inc. 7,435 shares
The Princeton Review of New Jersey, Inc. 14,420 shares
TSTS, Inc. 9,454 shares
Test Services, Inc. 11,816 shares
Random House TPR, Inc. 81,855 shares
The Princeton Review, Inc. 269,338 shares
Princeton Review Management, L.L.C. 222 shares
Princeton Review Products, L.L.C. 99,836 shares
--------------
TOTAL 516,661 shares
</TABLE>
<PAGE> 17
SCHEDULE III
Shares of Class A Common Stock and Class B Common Stock to be
issued on the Closing Date.
RECIPIENTS OF THE CORPORATION'S CLASS A COMMON STOCK
<TABLE>
<CAPTION>
NUMBER OF SHARES OF CLASS A
NAME OF STOCKHOLDER COMMON STOCK
<S> <C>
John S. Katzman 11,470,063
Random House TPR, Inc. 3,378,618
TOTAL 14,848,681
</TABLE>
RECIPIENTS OF THE CORPORATION'S CLASS B NON-VOTING COMMON STOCK
<TABLE>
<CAPTION>
NAME OF STOCKHOLDER NUMBER OF SHARES OF NON-VOTING
CLASS B COMMON STOCK
<S> <C>
Charles Emmons & Charles Emmons Jr. (joint) 24,431
The Princeton Review of Orange County, Inc. 97,277
The Princeton Review of North Carolina, Inc. 22,722
Lecomp Company, Inc. 169,614
The Princeton Review of Pittsburgh, Inc. 18,594
The Princeton Review of Rhode Island, Inc. 17,099
Karen Kearns 3,498
The Princeton Review of Penninsula, Inc. 61,062
The Princeton Review of St. Louis, Inc. 25,844
The Kafiristan Blokes 7,325
Elyane Harney 3,465
The Princeton Review of Boston, Inc. 150,456
The Princeton Review of New Jersey, Inc. 291,791
TSTS, Inc. 191,300
Test Services, Inc. 239,114
Bruce Task 204,928
Mark Chernis 120,756
Alicia Ernst 120,756
Jay Rosner 120,756
Jay Shulman 85,244
Harold K. Lee 77,069
Steven Kursar 98,216
Aitken, Hillary 58
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
Apter, Katherine 42
Atlas, Lesly 32
Barnett, Laurie 65
Barnett, Lisa 1,052
Bayer, William 58
Bhatia, Vibha 42
Blanco, Justo 713
Cary, Julia 30
Chalmers, Ronald 138
Chernis, Mark 385,000
Chryseliou, Anthony 4,787
Corrozi, Steven 6,400
Cronin, Erin 508
Crossman, Kevin 6,957
Daneker, Matt 208
D'Astofolo, Eric 2,720
Deutsch, Drew 13,605
Engelbert, Daryl 3,065
Freedman, Jonathan 3,464
Glasser, Suellen 3,232
Grampp, Raymond 828
Hendrix, Melissa 2,457
Hodas, Steven 53,001
Hoffman, Robert 21,089
Jacob, Edie 952
Johnson, Antoine 42
Katin, Megan 25
Katzman, Richard 25,000
Kelley, Jeffrey 6,614
Kniffin, Lesley 8,822
Leishman, David 33
Linker, David 267
Lutz, Andrew 36,000
Maniscalco, Paul 5,753
Medina, Perry 1,353
Melvin, Stephen 50,000
Michalak, Richard 34,497
Middlemark, Dana 1,095
Miller, Elizabeth 89
Navarro, Susan 171
Nessim Rubin, Linda 64,620
Odian, Mark 153
Park, John 8,442
Printz, Victoria 80
Quattrociocchi, Steve 148,000
</TABLE>
18
<PAGE> 19
<TABLE>
<S> <C>
Rahman, SyedZiaur 37
Rubenstein, Jeffrey 1,678
Sarn, Fiona 1,688
Schnittman, Evan 32,578
Shulman, Jay 9,254
Stewart, David 2,997
Street, Carleen 300
Tabachnik, Irina 10,240
Talada, Reed 1,500
Taylor, Peter 7,900
Task, Bruce 100,000
Timlin, Kathyrn 108
Trofimov, Melissa 2,323
Volkert, Jenny 112
Volpe, Christopher 2,370
Wallace, Ted 477
Weisberger, Jennifer 2,755
Wheeler, Timothy 46
Williams, Mark 46
TOTAL 3,229,223
</TABLE>
19
<PAGE> 20
SCHEDULE IV
Number of shares of Class A Common Stock and Class B
Common Stock to be issued to Katzman and the
Management Stockholders
<TABLE>
<CAPTION>
Name Number of Shares
---- ----------------
<S> <C>
John Katzman 11,470,063 shares
Harold Lee 77,069 shares
Steven Kursar 98,216 shares
Bruce Task 204,928 shares
Mark Chernis 120,756 shares
Alicia Ernst 120,756 shares
Jay Rosner 120,756 shares
Jay Shulman 85,244 shares
</TABLE>
<PAGE> 21
SCHEDULE V
Number of shares of Class A Common Stock to be issued to RH
<TABLE>
<CAPTION>
Name Number of Shares
<S> <C>
Random House TPR, Inc. 3,378,618 shares
</TABLE>
<PAGE> 22
Exhibits
Exhibit A Certificate of Incorporation of Newco
Exhibit B Bylaws of Newco
Exhibit C Newco Stockholders Agreement
