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Exhibit 10.2
THE PRINCETON REVIEW, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Series A Preferred Stock Purchase Agreement (the "Agreement") is
entered into as of the 18th day of April 2000, by and among The Princeton
Review, Inc., a Delaware corporation (the "Company"), and the persons and
entities listed on Exhibit A hereto (hereinafter referred to as the
"Purchasers").
WHEREAS, the Company has undergone a reorganization whereby all the
shareholders of the previous entity known as The Princeton Review, Inc. ("Old
Review") and all the members of its majority owned subsidiaries contributed all
their common stock or membership interests, as the case may be, to the Company
in exchange for an agreed upon proportionate number of shares of common stock of
the Company (the "Reorganization");
WHEREAS, the Company desires to enter into this Agreement with the
Purchasers to raise additional capital through the sale and issuance of shares
of its preferred stock to the Purchasers; and
WHEREAS, the Purchasers desire to enter into this Agreement to acquire
shares of preferred stock of the Company on the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties to this Agreement mutually agree as follows:
1. Authorization and Sale of Series A Preferred Stock.
1.1 Authorization. The Company has authorized the issuance and
sale of up to an aggregate of 3,713,540 shares of its Series A Preferred Stock,
$.01 par value (the "Series A Shares"), having the rights, preferences,
privileges and restrictions set forth in the Company's Restated Articles of
Incorporation, as amended, a copy of which is attached hereto as Exhibit B (the
"Articles").
1.2 Sale. (A) Subject to the terms and conditions of this
Agreement, the Purchasers severally, and not jointly or jointly and severally,
agree to purchase from the Company and the Company agrees to sell and issue to
the Purchasers the number of Series A Shares (collectively, the "Shares")
specified opposite such Purchaser's name under the column "Number of Shares" on
Exhibit A at the purchase price of $7.2707 per share. The Company shall not be
obligated to sell and issue to the Purchasers any Shares pursuant to this
Section unless the Company receives at least $20,000,000 in gross proceeds at
the Closing (as defined in Section 2.1).
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2. Closing, Delivery
2.1 Closing. The purchase and sale of the Series A Preferred
Stock shall take place at such time and place as the Company and the Purchasers
may agree (such closing being called the "Closing" and such date and time being
called the "Closing Date").
2.2 Delivery. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchasers certificates, in
such denominations and registered in such name or names as the Purchasers may
designate by notice to the Company, representing the Series A Shares to be
purchased by the Purchasers from the Company, dated the Closing Date, against
payment of the purchase price therefor by wire transfer or by check or checks
made payable to the order of the Company in immediately available funds or by
such other means as shall be mutually agreeable to the Purchasers and the
Company.
3. Representations and Warranties of the Company. Subject to and except
as disclosed by the Company in the Schedule of Exceptions attached hereto as
Exhibit C and incorporated herein by reference (the "Schedule of Exceptions"),
the Company makes the following representations and warranties to the Purchasers
as of the date hereof and as of the Closing Date. As used in this Section 3, the
term "Company" shall mean and include the Company itself and its majority owned
subsidiaries taken as a whole. The following representations and warranties
shall only be modified by Exhibit C to the extent such Exhibit specifically
references the representation or warranty to be modified.
3.1 Organization and Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, has all requisite corporate power and authority to own and
operate its properties and assets and to carry on its business as now conducted
and as currently proposed to be conducted. The Company is duly qualified and
authorized to do business and is in good standing as a foreign corporation, in
each jurisdiction where the nature of its activities and of its properties (both
owned and leased) makes such qualification necessary except where the failure to
be so qualified would not have a Material Adverse Effect (as defined in Section
3.6). The Company has delivered to the Purchasers or their representatives, or
given such parties access to, true and correct copies of the (i) Articles of
Incorporation and the Bylaws or Operating Agreements, as the case may be, as in
effect as of the date hereof and the Closing Date, and (ii) the ledgers and
minute books, in each case, of the Company and each of its subsidiaries.
3.2 Capitalization. The authorized capital of the Company,
immediately prior to the Closing Date, will consist of:
(a) Preferred Stock: 5,000,000 shares of Preferred
Stock, $.01 par value, all of which have been designated Series A Preferred
Stock, none of which are issued and outstanding.
(b) Common Stock: 25,000,000 shares of Class A Voting
Common Stock, $.01 par value ("Class A Common Stock"), of which 14,848,681
shares are issued and outstanding and 10,000,000 shares of Class B Non-Voting
Common Stock, $.01 par value, ("Class
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B Common Stock" and together with the Class A Common Stock the "Common Stock"),
of which 3,229,223 shares are issued and outstanding.
All of the outstanding shares of capital stock have been duly
authorized and validly issued, are fully paid and nonassessable and were issued
in compliance with all applicable federal and state securities laws. As of the
Closing Date, the Company will have duly and validly reserved (i) 3,713,540
shares of Series A Preferred Stock for issuance hereunder, (ii) 3,713,540 shares
of Class A Common Stock for issuance upon conversion of the Series A Preferred
Stock, and (iii) 3,000,000 shares of Class B Common Stock for issuance under the
Company's Stock Incentive Plan, pursuant to which 1,077,906 shares of Class B
Common Stock are issued and outstanding, options to purchase 1,646,832 shares
are outstanding, and 275,262 shares remain available for future grant. Except
for the rights described in the preceding sentence as to the Company's Stock
Incentive Plan, the conversion rights associated with the Preferred Stock, the
rights created under this Agreement, the Investor Rights Agreement attached
hereto as Exhibit D and incorporated herein by reference (the "Rights
Agreement") and the Shareholder Agreement attached hereto as Exhibit E and
incorporated herein by reference (the "Shareholder Agreement"), there are no
outstanding rights of first refusal, preemptive rights or other rights, options,
warrants, conversion rights or other agreements, either directly or indirectly,
for the purchase or acquisition from the Company of any shares of its capital
stock. Except as provided in the Articles, there are no outstanding options,
rights, other securities agreements or other commitments, arrangements or
undertakings pursuant to which the Company is or may become obligated to redeem,
repurchase or otherwise acquire or retire any shares of capital stock that are
presently outstanding or may be issued in the future. Attached as Schedule 3.2
hereto is a complete and accurate list of all the Company's outstanding shares,
warrants, convertible or exchangeable securities, and options as of the time
immediately after the Closing Date, and such schedule reflects any dilution and
exercise of preemptive rights triggered by the transactions contemplated hereby.
The Series A Preferred Stock has the rights, preferences and privileges
provided for in the Articles. The Company is not a party or subject to any
agreement or understanding, and, to the Company's knowledge, except as set forth
in the Shareholder Agreement, there is no agreement or understanding between any
persons and/or entities with respect to any of the Company's capital stock,
except as otherwise set forth in any of the Schedule of Exceptions. The shares
of Class A Common Stock issuable upon conversion of the Shares will represent,
in the aggregate, approximately 15.66% of the outstanding shares of Common Stock
at the Closing Date, and the voting power of such issued shares will represent,
in the aggregate, approximately 20.00% of the total number of votes able to be
cast in any matter by all voting securities of the Company at the Closing Date,
treating for purposes of these calculations all securities convertible into,
exchangeable and exercisable for shares of Common Stock outstanding on the date
hereof, including all shares of Common Stock reserved for issuance under the
Company's Stock Incentive Plan, as having been converted, exchanged or
exercised, and assuming the closings of the sale of all Shares reserved for
issuance hereunder.
3.3 Subsidiaries. Except for Old Review, Princeton Review
Management, L.L.C., Princeton Review Publishing, L.L.C. (including its wholly
owned Subsidiary, Apply Technology, L.L.C.), Princeton Review Products, L.L.C.
and Princeton Review Operations, L.L.C. the Company does not currently own, have
any investment in, or control, directly or indirectly, any
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other corporation, association, or other business entity. The Company is not,
directly or indirectly, a participant in any joint venture or partnership. Each
subsidiary is duly qualified and authorized to do business, and is in good
standing as a foreign corporation, in each jurisdiction where the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary. The outstanding shares of capital stock of each such
subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company free and clear of any adverse claim,
and no options, warrants or other rights to acquire shares of capital stock or
other ownership interests in such subsidiary are outstanding. The Company owns
one hundred percent (100%) of the outstanding capital stock of Old Review,
Princeton Review Management, L.L.C., Princeton Review Products, L.L.C.,
Princeton Review Operations, L.L.C. and Princeton Review Publishing, L.L.C.
3.4 Authorization. All corporate action on the part of the
Company and its officers, directors and shareholders necessary (i) for the
authorization, execution and delivery of this Agreement, the Shareholder
Agreement and the Rights Agreement (collectively, the "Agreements"), (ii) the
performance of all the Company's obligations hereunder and thereunder and (iii)
the authorization, issuance, reservation, sale and delivery of the Shares and
the Class A Common Stock issuable upon conversion thereof (the "Underlying
Common Stock") has been taken or will be taken prior to the Closing. This
Agreement has been duly executed and delivered by the Company and constitutes,
and the other Agreements, when duly executed and delivered by the Company will
constitute, valid and legally binding obligations of the Company enforceable in
accordance with their terms.
3.5 Validity of the Shares. The sale of the Shares and the
subsequent conversion of the Shares into the Underlying Common Stock will not be
subject to any preemptive rights, rights of first refusal or other preferential
rights that have not been waived and will not result in the anti-dilution
provisions of any security becoming applicable, and the Shares when issued, sold
and delivered in accordance with the terms of this Agreement and the Underlying
Common Stock when issued upon conversion of the Shares in accordance with the
Articles will be validly issued (including, without limitation, issued in
compliance with applicable federal and state securities laws), fully paid and
nonassessable and will be free of any liens or encumbrances; provided, however,
that the Shares and the Underlying Common Stock may be subject to restrictions
on transfer as set forth herein or in the Rights Agreement or in the Shareholder
Agreement.
3.6 Financial Statements, Changes
(a) The Company has delivered to the Purchasers (i)
copies of the Old Review's financial statements as of and for each of the years
ended December 31, 1996, 1997, 1998 and 1999, accompanied by the reports
thereon, of the Old Review's independent public accountants, and (ii) copies of
the pro forma financial statements, as of and for the year ended December 31,
1999, giving pro forma effect to the Reorganization (the "Financial
Statements"). The Financial Statements fairly present, in all material respects,
the financial position of the Old Review as of the respective dates thereof and
the results of operations of the Old Review for the fiscal years then ended and
have been prepared (including the notes thereto) in conformity with United
States generally accepted accounting principles ("GAAP") applied in a consistent
basis, except as otherwise noted therein. The Company maintains and will
continue to maintain a standard
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system of accounting established and administered in accordance with generally
accepted accounting principles.
(b) Since December 31, 1999, there has not been:
(i) any event, violation or other matter
that could, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the assets, properties, financial
condition, operating results, prospects or business of the Old Review
and its subsidiaries taken as a whole or, since the Reorganization, of
the Company and its subsidiaries taken as a whole ("Material Adverse
Effect");
(ii) any obligation or liability (whether
absolute, accrued, contingent or otherwise, and whether due or to
become due) incurred by the Old Review or its subsidiaries or, since
the Reorganization, by the Company or its subsidiaries, in excess of
$100,000 in the singular or the aggregate, other than obligations under
customer contracts, current obligations and liabilities incurred in the
ordinary course of business and consistent with past practice;
(iii) any payment, discharge, satisfaction
or settlement of any material claim or obligation of the Old Review or,
since the Reorganization, of the Company, except in the ordinary course
of business and consistent with past practice;
(iv) any declaration, setting aside or
payment of any dividend or other distribution with respect to any
shares of capital stock of the Old Review or, since the Reorganization,
of the Company or any direct or indirect redemption, purchase or other
acquisition of any such shares;
(v) except for (i) this Agreement, (ii) the
issuance and sale of securities pursuant to the Reorganization, or
(iii) any options granted or stock sold pursuant to the Stock Incentive
Plan, any issuance or sale, or any contract entered into for the
issuance or sale, of any shares of capital stock or securities
convertible into or exercisable for shares of capital stock of the Old
Review or, since the Reorganization, of the Company.
(vi) any sale, assignment, pledge,
encumbrance, transfer or other disposition of any material tangible
asset of the Old Review or, since the Reorganization, of the Company
(other than sales or licensing of its products to customers in the
ordinary course of business consistent with past practice), or any
sale, assignment, transfer or other disposition of any Intellectual
Property (as defined in Section 3.14(e)), other than licensing of
products of the Old Review or, since the Reorganization, of the Company
in the ordinary course of business and on a nonexclusive basis;
(vii) any creation of any lien on any
property of the Old Review or, since the Reorganization, of the Company
other than liens arising in the ordinary course of business by
operation of law, none of which individually or in the aggregate cause
a Material Adverse Effect;
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(viii) any write-down of the value of any
asset of the Old Review or, since the Reorganization, of the Company or
any write-off as uncollectible of any accounts or notes receivable or
any portion thereof except in the ordinary course of business and in a
magnitude consistent with historical practice;
(ix) any cancellation of any debts or claims
or any material amendment, termination or waiver of any rights of the
Old Review or its subsidiaries or, since the Reorganization, of the
Company or its subsidiaries except for those in the ordinary course of
business that would not have a Material Adverse Effect.
(x) any expenditure or commitment or
addition to property, plant or equipment of the Old Review or, since
the Reorganization, of the Company except in amounts less than $100,000
in the singular or the aggregate;
(xi) except for stock or options issued
pursuant to the Stock Incentive Plan, any general increase in the
compensation of employees of the Old Review or, since the
Reorganization, of the Company (including any increase pursuant to any
written bonus, pension, profit-sharing or other benefit or compensation
plan, policy or arrangement or commitment), or any increase in any such
compensation or bonus payable to any officer, stockholder, director,
consultant or agent of the Old Review or, since the Reorganization, of
the Company having an annual salary or remuneration in excess of
$100,000;
(xii) any damage, destruction or loss
(whether or not covered by insurance) affecting any asset or property
of the Old Review or, since the Reorganization, of the Company
resulting in liability or loss in excess of $100,000;
(xiii) any change in the independent public
accountants of the Old Review or, since the Reorganization, of the
Company or any material change in the accounting methods or accounting
practices followed by the Old Review or, since the Reorganization, of
the Company or any material change in depreciation or amortization
policies or rates;
(xiv) any resignation or termination of
employment of any officer or key employee of the Old Review or, since
the Reorganization, of the Company, and the Company does not know of
any impending resignation or termination of employment of any such
officer or key employee;
(xv) any receipt of notice that there has
been a loss of, or material order cancellation by, a major customer,
advertiser or sponsor of the Old Review or, since the Reorganization,
of the Company;
(xvi) any loans or guarantees made by the
Old Review or, since the Reorganization, by the Company to or for the
benefit of its employees, officers or directors, or any members of
their immediate families, other than advances made in the ordinary
course of business;
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(xvii) any agreement, whether in writing or
otherwise, to take any of the actions specified in the foregoing items
(i) through (xvi); or
(xviii) any payment to Xxxx Xxxxxxxx in
settlement of his claims or by judgment against the Company in an
amount (i) exceeding $2,000,000, without issuing, at no additional cost
to the Purchasers, an additional amount of fully paid and nonassessable
shares of Series A Preferred Stock sufficient to provide the Purchasers
the number of Shares at the Closing Date as if the $150,000,000
pre-investment valuation of the Company had been reduced
dollar-for-dollar by the amount of such payment in excess of
$2,000,000, or (ii) exceeding $3,000,000, without the approval of at
least seventy-five percent (75%) of holders of the Series A Shares. For
purposes of calculating the amount of any payment to Xxxx Xxxxxxxx,
Section 7.2(b) shall govern.
(xix) to the best of the Company's
knowledge, any other event or condition of any character that may have
a Material Adverse Effect.
3.7 Material Agreements. The Schedule of Exceptions contains a
complete list of all of the following material agreements to which the Company
or any of its subsidiaries is a party: (a) all contracts, agreements and
instruments that involve a commitment or obligation (contingent or otherwise) by
the Company in excess of $100,000; (b) all loan, lease or debt agreements in
excess of $100,000; (c) all agreements or letters of intent relating to the
acquisition of other businesses in which the fair market value of the business
acquired, or to be acquired, exceeds $100,000; (d) relating to the sale or other
disposition of any assets, properties or rights (other than in the ordinary
course of business); (e) relating to the distribution of the Company's or its
subsidiaries' products or services that require the payment of money in excess
of $100,000; (f) that restricts the Company's or its subsidiaries' ability to do
business in any geographic area or grants to any person exclusive or similar
rights in any line of business or in any geographic area; (g) that restricts the
Company's ability to solicit employees of another person or restricts another
person's ability to solicit the Company's employees; (h) all material licenses
of any patent, trade secret or other proprietary right to or from the Company;
(i) all contracts with Random House, Inc. and The XxXxxx-Xxxx Companies, Inc.
that contributed to 1999 revenues; and (j) all publishing agreements in excess
of $100,000 that contributed to 1999 revenues (collectively, the "Material
Agreements"). All the Material Agreements are valid and binding obligations of
the Company, in full force and effect in all material respects. The Company is
not in default and not aware of any default by another party, either pending or
threatened, with respect to the Material Agreements. The Company is not a party
to and is not bound by any contract, agreement or instrument, including, without
limitation, any noncompetition agreements, or subject to any restriction under
its Articles of Incorporation or Bylaws, that could reasonably be expected to
have a Material Adverse Effect under the Company's present circumstances. The
Company is not presently engaged in and has no present intention of engaging in
any negotiation or discussion that would, in any transaction or series of
transactions, effect (i) the consolidation or merger of the Company into or with
any other corporation or corporations, (ii) the sale, conveyance or disposition
of all or substantially all of the assets of the Company, (iii) transfer of more
than fifty percent (50%) of the voting power of the Company to any entity or
entities not controlled by the Company, (iv) any similar form of acquisition or
any liquidation, dissolution or winding up of the Company or other transaction
that results in the discontinuance of the Company's business.
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3.8 Title to Properties and Assets.
(a) Except as disclosed on the Schedule of Exceptions
with respect to this Section 3.8, the Company has good and marketable title to,
or a valid leasehold interest in, as applicable, all tangible assets reflected
on the balance sheet contained in the Financial Statements or acquired after the
date thereof, free and clear of all liens except statutory liens for the payment
of current taxes that are not yet delinquent and security interests which arise
in the ordinary course of business and which do not affect the properties or
assets of the Company in any material respect and except as to such
imperfections in title as would not have a Material Adverse Effect. With respect
to the property and assets it leases, the Company is in material compliance with
such leases. The tangible assets owned by the Company are in all material
respects in good operating condition and repair, ordinary wear and tear
excepted, and all tangible assets leased by the Company are in all material
respects in the condition required by the terms of the lease applicable thereto
during the terms of such lease and upon the expiration thereof. Such assets,
together with the real property and intellectual property assets, constitute all
the material properties, interests, assets and rights held for use or used in
connection with the business and operations of the Company and constitute all
those necessary to continue to operate the business of the Company in all
material respects consistent with current and historical practice and as
presently contemplated to be conducted. Except as indicated in the preceding
sentence, this Section 3.8(a) does not relate to (i) real property or interests
in real property, or (ii) intellectual property of the Company; such items are
covered under Section 3.8(b) and Section 3.14, respectively.
(b) The Company does not own fee title to any real
property. The Schedule of Exceptions discloses with respect to this Section
3.8(b) a complete list of all real property and interests in real property
leased by the Company identifying properties as either single-tenant buildings
or multi-tenant buildings. The Company or a subsidiary is the sole lessee
thereof and has a good and valid leasehold interest in all real property and
interests in real property shown on Schedule 3.8 to be leased by it free and
clear of all liens. There exists no material default, or any event which upon
notice or the passage of time, or both, would give rise to any material default,
in the performance of the Company or, to the knowledge of the Company, by any
lessor under any such lease, nor, to the knowledge of the Company, is the
landlord of any such lease in default.
3.9 Undisclosed Liabilities. The Company does not have and, as
a result of the transactions contemplated in this Agreement or in the other
Agreements, will not have, any material liabilities or obligations of any nature
(whether accrued, absolute, contingent, unasserted or otherwise and whether due
or to become due) which are required under generally accepted accounting
principles to be disclosed on the Financial Statements and are not so disclosed
or otherwise disclosed in the Schedule of Exceptions with respect to this
Section 3.9, except for liabilities and obligations incurred in the ordinary
course of business consistent with past practice and which individually do not
exceed $100,000. The reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonably based upon facts and circumstances known
by the Company on the date hereof and there are no loss contingencies that are
required to be accrued by Statement of Financial Accounting Standard No. 5 of
the Financial Accounting Standards Board that are not provided for on the
balance sheets contained in the Financial Statements as of the respective dates
thereof.
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3.10 Obligations to Related Parties. Except as set forth on
the Schedule of Exceptions, no officer, director, shareholder or employee of the
Company, including any member of their immediate families, is (i) a party to any
transaction with the Company (including any contract, agreement or other
arrangement providing for the furnishing of services by, or rental of real or
personal property from, or otherwise requiring payments to, any such officer,
director, shareholder, employee or relative, but excluding wages and benefits),
or (ii) the direct or indirect owner of an interest in any business or person
that is a competitor, supplier or customer of the Company (except for a passive
investment in less than five percent (5%) of the common stock of any publicly
traded company), nor does any such person receive income from any source other
than the Company that relates to the Company's business or should properly
accrue to the Company.
3.11 Employee Matters, ERISA. The Schedule of Exceptions
contains a complete list of all employment agreements, deferred compensation,
pension or retirement agreements or arrangements, bonus, incentive or
profit-sharing plans or arrangements, or labor or collective bargaining
agreements, written or oral, of the Company that provide any employee of the
Company compensation or benefits in excess of $5,000, and the Company does not
have in effect any consulting agreement, written or oral, that provides any
consultant to the Company compensation in excess of $10,000. The Company has no
knowledge that any officer of the Company presently intends to terminate his
employment. The Company is in compliance in all material respects with all
applicable laws and regulations relating to labor, employment, fair employment
practices, terms and conditions of employment, and wages and hours, except where
the failure to so comply would not be reasonably expected to result in a
Material Adverse Effect. The Company is not a party to any collective bargaining
agreement or other labor union contract and, to the Company's knowledge, there
are no activities or proceeding of any labor union to organize any employees of
the Company. The Company is in material compliance with the terms of all plans,
programs and agreements listed on the Schedule of Exceptions with respect to
this Section 3.11, and each such plan, program or agreement is in compliance in
all material respects with all of the applicable requirements and provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
the Internal Revenue Code of 1986, as amended (the "Code"). Each plan intended
to qualify under Code Section 401(a) and any related trust intended to qualify
for exemption from federal income tax under Code Section 501(a) has received a
favorable determination letter from the IRS or is an adoption of a prototype
plan in respect of which the IRS has issued a favorable opinion letter, and
nothing has occurred since the date of such determination letter that would
materially adversely affect such qualification or tax-exempt status. No
nonexempt prohibited transaction (as defined in Code Section 4975) exists with
respect to any plan listed on the Schedule of Exceptions with respect to this
Section 3.11 which would result in a tax or penalty to be imposed on the Company
that would be reasonably expected to have a Material Adverse Effect. No Plan has
currently an "accumulated funding deficiency" (as defined in Section 302 of
ERISA), and no reportable event (as defined in Section 4043(d) of ERISA) has
occurred with respect to any such Plan for which the Pension Benefit Guaranty
Corporation notice filing requirements have not been waived. The Company is not
now contributing, nor has it ever contributed, to a "defined benefit pension
plan" (as defined in ERISA Section 3(35)) nor a "multi employer plan" (as
defined in ERISA Section 3(37)). The Company has complied in all material
respects with the continued health plan coverage requirements under part 6 of
Title I of ERISA. With respect to each plan listed on the Schedule of Exceptions
for this Section 3.11, an "employee pension benefit plan" under Section 3(2) of
ERISA, all required filings,
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including all filings required to be made with the United States Department of
Labor and Internal Revenue Service, have been timely filed, except where the
failure to file would not have a Material Adverse Effect.
3.12 Compliance with Other Instruments. The Company is not in
violation of any provisions of the Articles of Incorporation or its Bylaws as
amended and in effect on and as of the Closing Date, or of any provisions of any
judgment, decree or order by which it is bound. The execution and delivery by
the Company of the Agreement do not, and the consummation of the transactions
contemplated hereby and thereby and compliance with the terms thereof, and the
issuance and sale of the Shares and the Underlying Common Stock pursuant
thereto, will not breach, conflict with, or result in any violation of or
default (with or without notice or lapse of time or both) under, or give rise to
a right of termination, cancellation or acceleration of any obligation or to the
loss of any benefit under, or result in the creation or imposition of any lien
of any nature whatsoever upon any of the properties or assets of the Company
under, (a) any loan or credit agreement, note, bond, mortgage, indenture, deed
of trust, license, franchise, lease, contract, commitment, permit, agreement,
understanding, instrument or obligation or other arrangement to which the
Company is a party or by which the Company or any of its properties or assets
may be bound or affected, (b) any provision of the Articles, Bylaws or other
constitutive documents of the Company, (c) any judgment, order, writ, injunction
or any decree, or any statute, law, ordinance, rule or regulation applicable to
the Company or any of its properties or assets except, in the case of
subsections (a) and (c) as would not result in a Material Adverse Effect.
3.13 Litigation. Except as set forth on the Schedule of
Exceptions with respect to this Section 3.13, there are no suits, actions,
claims, arbitration or other legal, administrative or regulatory proceedings or,
to the knowledge of the Company, investigations, whether at law or in equity, or
before or by any federal, foreign, state or municipal or other governmental
department, commission, board, bureau, agency or instrumentality (a) pending or,
to the knowledge of the Company, threatened by or against or affecting the
Company or any of its properties or assets or (b) to the knowledge of the
Company, pending or threatened by or against any of the officers or employees of
the Company that relate to or involve the termination by such person of his
employment with any of such person's former employers. To the knowledge of the
Company, there is no basis for any such lawsuit, claim, arbitration or other
proceeding or investigation which, if commenced, would reasonably be expected to
result in a Material Adverse Effect. There is no outstanding judgment, order or
decree of any governmental authority or arbitrator applicable to the Company or
any of its properties, assets or business. There is no action, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate.
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3.14 Intellectual Property.
(a) Set forth with respect to this Section 3.14 on
the Schedule of Exceptions is a true and complete list of Intellectual Property
(as defined below) owned or filed by, or licensed to, the Company or used in the
conduct of the Company's business as presently conducted. With respect to
registered trademarks, the Schedule of Exceptions sets forth a list of all
jurisdictions in which such trademarks are registered or applied for and all
registration and application numbers. The Company believes, after due inquiry,
that it has (having received no notice or threatened notice to the contrary) all
rights to Intellectual Property as are used or are necessary in connection with
the business of the Company as presently conducted. Except as set forth on the
Schedule of Exceptions, the Company owns, or has the right to use, execute,
reproduce, display, perform, modify, enhance, distribute, prepare derivative
works of and sublicense, without payment to any other Person, all such
Intellectual Property as currently used in the business, free and clear of all
liens whatsoever. The consummation of the transactions contemplated hereby will
not conflict with, alter or impair any such right. The Company has not entered
into any agreement to indemnify any other Person against any charge of
infringement of any third-party Intellectual Property, except infringement
indemnities agreed to in the ordinary course and included as part of the
Company's contracts for the license or sale of its products or services. The
Company has not entered into any agreement granting any third-party the right to
bring infringement actions or otherwise to enforce rights with respect to the
Company's Intellectual Property.
(b) Except in the ordinary course of business through
its licensing agreements, the Company has not granted any options, exclusive
licenses, assignments or agreements of any kind relating to (i) ownership of
rights in Intellectual Property, or (ii) the marketing or distribution of
Intellectual Property. The conduct of the business of the Company as presently
conducted does not violate, conflict with or infringe the Intellectual Property
of any other person. No claims are pending, or to the knowledge of the Company,
threatened, against the Company by any person with respect to the ownership,
validity, enforceability, effectiveness or use of any Intellectual Property and,
since its inception, the Company has not received any communications alleging
that the Company has violated any rights relating to Intellectual Property of
any person. To the best of the Company's knowledge, the material Intellectual
Property owned or used in the conduct of the Company's business as presently
conducted, is valid and enforceable.
(c) Without limiting the foregoing, the Company has
licensed or otherwise possesses the right to use all software, databases and
system or user documentation in use on or in connection with any computer owned
or leased by the Company or server hosted for the Company ("Internal Use
Software") for such Internal Use Software as is used in connection with the
business of the Company as presently conducted either (i) by means of lawfully
and validly acquired licenses that authorize the use of such Internal Use
Software together with all other copies of such software used by the Company, or
(ii) by means of ownership of all Intellectual Property rights in software
through development by employees or assignment by third parties.
(d) The Company has used all commercially reasonable
efforts to (i) protect and enforce all copyright, trademark and patent rights of
the Company except for those copyright, trademark and patent rights that,
individually or in the aggregate, are not material to the Company individually
or in the aggregate, (ii) protect through nondisclosure agreements and
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otherwise all trade secrets and confidential information of the Company, and
(iii) otherwise to secure and protect for Company's benefit all Intellectual
Property of the Company. The Company uses reasonable efforts, consistent with
industry practices of comparable companies, to identify any use of its
Intellectual Property by third parties that has infringed or infringes the
Intellectual Property of the Company, and the Schedule of Exceptions discloses
with respect to this Section 3.14 all material instances known to the Company of
any such infringing uses, all steps that the Company has taken or is taking to
end such infringement, and how any such instances of infringement have been
resolved.
(e) "Intellectual Property" means rights in (i) any
patent, copyright (including without limitation works of authorship in any media
including computer programs, software (including both source code and object
code form), databases and related items), trademark, service marks, trade dress,
trade name, licenses, franchises or domain name (regardless of whether such
rights have been registered), (ii) registrations and applications for
registration of any of the rights listed in clause (i) of this definition, (iii)
trade secrets, confidential information, know-how, goodwill and any other
intangible assets of the Company, and (iv) other similar intellectual property
rights of any kind, in each case which is material to the Company and its
subsidiaries taken as a whole.
3.15 Proprietary Information.
(a) To the best of the Company's knowledge, it has
done nothing to compromise the secrecy, confidentiality or value of any of its
trade secrets, know-how, inventions, prototypes, designs, processes or technical
data required to conduct its business as now conducted or as proposed to be
conducted. The Company has taken in the past and will take in the future
reasonable security measures to protect the secrecy, confidentiality and value
of all of its trade secrets, know-how, inventions, prototypes, designs,
processes, and technical data important to the conduct of its business.
(b) All employees and independent contractors of the
Company involved in the design, review, evaluation or development of products or
Intellectual Property have executed or are subject to nondisclosure and
assignment of inventions agreements sufficient to protect the confidentiality of
the Company's trade secrets and other confidential information and to vest in
the Company exclusive ownership of such Intellectual Property. The Company,
after reasonable investigation, is not aware that any of its employees, officers
or independent contractors is in violation thereof of any item that would have a
materially adverse effect on the Company, and the Company will use its best
efforts to prevent any such violation.
3.16 Year 2000.
(a) All software programs or applications (in both
source and object code form) currently being manufactured, published or marketed
by the Company or currently under development for possible future manufacturing,
publication, marketing or other use by the Company are "Year 2000 Compliant"
which shall mean that they (i) correctly accomplish date data century
recognition and calculations that accommodate same century and multi-century
formulas and date values, including leap years, and (ii) shall not end
abnormally or provide invalid or incorrect results
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of date data, specifically including date data that represents or references
different centuries or more than one century; provided, however, that the
Company makes no representation regarding the functionality of its products when
combined with third-party software, hardware or peripheral items in the event
that such third-party software, hardware or peripheral items are not Year 2000
Compliant.
(b) For purposes of this Section, "Internal MIS
Systems" means any computer software and systems (including hardware, firmware,
operating system software, utilities, and applications software) used in the
ordinary course of business by or on behalf of the Company, including the
Company's payroll, accounting, billing/receivables, inventory, asset tracking,
customer service, human resources. and email systems. All the Internal MIS
Systems and, to the knowledge of the Company, its facilities are Year 2000
Compliant.
3.17 Taxes.
(a) Except as set forth on Schedule 3.17, The Company
and Old Review and its subsidiaries (which for purposes of this Section 3.17
includes any limited liability company interests) prepared and timely filed all
Returns required to be filed by it and has paid all Taxes required to be paid by
it (whether or not shown to be due on such Returns). All such Returns were
complete and correct in all material respects. All amounts required to be
collected or withheld by the Company and Old Review and its subsidiaries have
been collected or withheld and any such amounts that are required to be remitted
to any taxing authority have been duly remitted, and the Company and Old Review
have made complete and adequate reserves on the Financial Statements for the
payment of Taxes that are payable during the current fiscal period or
attributable to a Pre-Closing Tax Period for which Tax returns are not yet
required to be filed. The Company and Old Review have made complete and adequate
reserves for deferred tax liabilities in its Financial Statements. There are no
actions, audits, assessments, reassessments, suits, proceedings, investigations
or claims ongoing or pending, or to the knowledge of the Company threatened,
against the Company, Old Review or any of its subsidiaries in respect of Taxes
or any matters under discussion between the Company, Old Review or any of its
subsidiaries and any governmental authority relating to Taxes or governmental
charges asserted by any such authority. Neither the Company nor Old Review nor
any of its subsidiaries has any obligation to reimburse the former shareholders
of Old Review for Taxes imposed on them on account of Old Review taxable income
and gain for the year ended December 31, 1999 and prior years; the obligation of
Old Review to reimburse its former shareholders for Taxes imposed on account of
Old Review taxable income and gain for the first quarter of 2000 will not exceed
$200,000 (it being understood that the Company and Old Review shall not be
required to reimburse the former shareholders for Taxes imposed on them in
connection with the distribution of Student Advantage stock to them).
(b) The disclosure made on the Schedule of Exceptions
with respect to this Section 3.17 contains a list of states, territories and
jurisdictions (whether foreign or domestic) in which the Company, Old Review or
any of its subsidiaries currently files an income, franchise, sales or use
Return. No Tax authority in a jurisdiction where the Company, Old Review or any
of its subsidiaries does not file Tax Returns has made a claim, assertion or, to
the Company's or Old Review's knowledge, threat that the Company, Old Review or
any of its subsidiaries is or may be subject to Tax in such jurisdiction. No
waivers or extensions of statutes of limitations with respect
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to Taxes have been given or requested with respect to the Company, Old Review or
any of its subsidiaries. There are no Tax rulings, requests for rulings, or
closing agreements involving the Company, Old Review or any of its subsidiaries
that could affect the liability for Taxes of the Company for any period (or
portion of a period) after the Closing Date. No excess loss account (as
described in Treas. Reg. 1.1502-19) exists with respect to any of the Company's
or Old Review subsidiaries. Neither the Company nor Old Review has any deferred
gain (i) arising from intercompany transactions (as described in Treas. Reg. 1.
1502-13) or (ii) with respect to stock or obligations of the Company or Old
Review which could affect the liability for Taxes of the Company for any period
(or portion of any period) after December 31, 1999. The Company, Old Review or
any of its subsidiaries has not agreed to, nor is required to, make any material
adjustment under Section 481 (a) of the Code by reason of a change in accounting
method or otherwise. There are no Tax liens on any assets of the Company, Old
Review or any of its subsidiaries, except for Taxes not yet due and payable. The
Company or Old Review has not been a member of a consolidated, combined or
unitary group for federal or state income tax purposes. The Company, Old Review
or any of its subsidiaries is not and has not been a party to any Tax sharing
agreement. The Company or Old Review has not filed a consent pursuant to Section
341(f) of the Internal Revenue Code of 1986, as amended (the "Code"), relating
to collapsible corporations. Complete copies of all income Tax Returns filed by
the Company, Old Review or any of its subsidiaries for taxable periods
commencing on or after January 1, 1995, have been provided to, or made available
to, the Purchasers.
(c) Old Review and any entities merged into Old
Review have made valid elections under Section 1362 of the Code to be treated as
S Corporations and have made similar elections under all state and local laws
that permit such elections and each of the entities merged into Old Review had
never terminated or revoked their S election prior to such merger and Old Review
has never terminated or revoked its election prior to April 1, 2000.
(d) As used in this Agreement:
(i) The term "Tax" (including, with
correlative meanings, the term "Taxes") includes all federal, state,
local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, communications, services,
severance, stamp, payroll, sales, employment, unemployment, disability,
use, property, withholding, excise, production, value added, occupancy
and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with
respect to such amounts and any interest in respect to such penalties
and additions, and includes any liability for Taxes of another person
by contract, as a transferee or successor, under Treas. Reg. 1. 1502-6
or analogous state, local. or foreign law provision, or otherwise.
(ii) The term "Return" includes all returns
and reports (including elections, declarations, disclosures, schedules,
estimates and information returns) required to be supplied to a Tax
authority relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
(iii) The term "Pre-Closing Tax Period"
means all taxable periods (or portions thereof) ending on or before the
Closing Date. For these purposes, any taxable year beginning before the
Closing Date and ending after the Closing Date will be deemed
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to end on the Closing Date by a closing of the Company's and Old Review's books
as of the Closing Date.
3.18 Insurance Coverage. The Schedule of Exceptions contains
an accurate summary of the insurance policies currently maintained by the
Company. Except as described on the Schedule of Exceptions, there are currently
no claims pending by the Company under any insurance policies currently in
effect and covering the property, business or employees of the Company, and all
premiums due and payable with respect to the policies maintained by the Company
have been paid to date. All insurance policies are in the name of the Company,
outstanding and in full force and effect and all premiums due with respect to
such policies are currently paid. Such insurance policies are customary for
companies engaged in the type of business engaged by the Company. The Company
has not received notice of cancellation or termination of any such policy, nor
has it been denied or had revoked or rescinded any policy of insurance, nor
borrowed against any such policies. Except as set forth with respect to this
Section 3.18 on the Schedule of Exceptions, to the knowledge of the Company,
there are no claims in the last five years for which an insurance carrier has
denied or threatened to deny coverage. The Company carries, or is covered by,
insurance with companies that are financially sound and reputable in such
amounts with such deductibles and against such risks and losses as are
reasonable for the business and assets of the Company.
3.19 Registration Rights. Except as provided in the Rights
Agreement or the Shareholder Agreement, the Company is not under any obligation
to register (as defined in the Rights Agreement) any of its presently
outstanding securities or any of its securities that may hereafter be issued.
3.20 Voting Agreements. Except as set forth in the Shareholder
Agreement, the Company has no agreement, obligation or commitment with respect
to the election of any individual or individuals to the Board of Directors and,
to the best of the Company's knowledge, there is no voting agreement or other
arrangement among its shareholders with respect to the election of any
individual or individuals to the Board of Directors or for any other purpose.
3.21 Consents. No consent, approval, order, license, permit or
authorization of, or notification, registration, declaration or filing with, any
governmental authority or any other person is required to be obtained or made by
or with respect to the Company or any of its affiliates in connection with the
execution, delivery and performance by the Company of any of the Agreements, the
issuance and sale of the Shares and the Underlying Common Stock, or the
consummation of the transactions contemplated thereby.
3.22 Offering. Assuming the accuracy of the representations
and warranties of the Purchasers contained in Section 4 hereof, the offer,
issuance and sale of the Shares are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws.
3.23 Environmental Matters.
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(a) The Company has duly complied with, and, to the
best of the knowledge of the Company, all the real estate leased by it either
currently or in the past (hereinafter referred to collectively as the
"Premises") are in compliance in all material respects with, the provisions of
all federal, state and local environmental, health and safety laws, codes and
ordinances and all rules and regulations promulgated thereunder.
(b) The Company has been issued, and will maintain,
all federal, state and local permits, licenses, certificates and approvals known
to the Company to be required for the operation by the Company of its business
and the ownership of its assets relating to (i) air emissions, (ii) discharges
to surface water or ground water, (iii) noise emissions, (iv) solid or liquid
waste disposal, (v) the use, generation, storage, transportation or disposal of
toxic or hazardous substances or wastes (intended hereby and hereafter to
include any and all such materials listed in any federal, state or local law,
code or ordinance and all rules and regulations promulgated thereunder, as
hazardous or potentially hazardous), or (vi) other environmental, health and
safety matters.
(c) The Company has not received notice of any, nor
does the Company know of any facts that might constitute material violations of,
any federal, state or local environmental, health or safety laws, codes or
ordinances, and any rules or regulations promulgated thereunder, that relate to
the use, ownership or occupancy of any of the Premises, and the Company is not
in violation of any covenants, conditions, easements, rights-of-way or
restrictions affecting any of the Premises or any rights appurtenant thereto.
(d) Except in accordance with a valid governmental
permit, license, certificate or approval, or as permitted by law, the Company
has not caused any emission, spill, release or discharge into or upon (i) the
air, (ii) soils or any improvements located thereon, (iii) surface water or
ground water, or (iv) the sewer, septic system or waste treatment, storage or
disposal system servicing any of the Premises, of any toxic or hazardous
substances or wastes at or from any of the Premises that would have a Material
Adverse Effect.
(e) The Company has not received any complaint,
order, directive (other than directives applicable to the general public),
claim, citation or notice by any governmental authority or any other person or
entity with respect to (i) air emissions, (ii) spills, releases or discharges to
soils or any improvements located thereon, surface water, ground water or the
sewer, septic system or waste treatment, storage or disposal systems servicing
any of the Premises, (iii) noise emissions, (iv) solid or liquid waste disposal,
(v) the use, generation, storage, transportation or disposal of toxic or
hazardous substances or wastes or (vi) other environmental, health or safety
matters affecting the Company, any of the Premises or any improvements located
thereon, or the businesses thereon conducted that would have a Material Adverse
Effect.
3.24 Finders' Fees. Except for the fees paid to Galileo
Professional Services, LLC, in an amount not to exceed $900,000.00 (Nine Hundred
Thousand Dollars), in connection with the transactions contemplated by this
Agreement, the Company (i) represents and warrants that it has retained no
finder or broker in connection with the transactions contemplated by this
Agreement and will have no liability to any such person in connection with the
transactions contemplated hereby, and (ii) hereby agrees to indemnify and to
hold the Purchasers harmless of and from any
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liability for any commission or compensation in the nature of a finder's fee to
any broker or other person or firm (and the costs and expenses of defending
against such liability or asserted liability) for which the Company or any of
its employees or representatives is responsible.
3.25 Compliance with Applicable Laws. The Company and its
properties, assets, operations and business has been and are in compliance in
all material respects with all applicable statutes, laws, ordinances, rules and
regulations of any governmental authority and any filing requirements relating
thereto. The Company has obtained and has in effect all material permits,
licenses and other authorizations that are required with respect to the
operation of its business and the ownership of its assets (excluding
Intellectual Property to the extent addressed in Section 3.14). The Company is
in full compliance in all material respects with all terms and conditions of
such permits, licenses and authorizations, no proceeding is pending or, to the
knowledge of the Company, threatened, to revoke or limit any thereof, and the
Company does not know of any basis for any such proceeding, and the consummation
of the transactions contemplated in this Agreement will not result in the
nonrenewal, revocation or termination of any such license or permit.
3.26 Disclosure. The statements by the Company contained in
this Agreement and the exhibits and schedules attached hereto and in all
certificates and schedules furnished or to be furnished by or on behalf of the
Company to the Purchasers or any of their representatives as a condition to the
Closing, taken as a whole, do not contain any untrue statement of a material
fact or omit to a state a material fact necessary, in light of the circumstances
under which they were or will be made, in order to make the statements contained
herein or therein not misleading or necessary in order to fully and fairly
provide the information required to be provided in any such document,
certificate or schedule.
3.27 Foreign Corrupt Practices Act. The Company and, to the
knowledge of the Company after due inquiry, its employees are in compliance in
all material respects with the U.S. Foreign Corrupt Practices Act, as amended,
including without limitation the books and records provisions thereof.
3.28 Investment Company. Neither the Company nor any person
controlling the Company is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
3.29 Small Business Matters. The Company, together with its
"affiliates" (as the term is defined in Title 13, Code of Federal Regulations,
121.103), have provided the SBIC Purchaser with financial statements sufficient
to enable the SBIC Purchaser to determine that the Company, together with its
affiliates, is a "small business concern" within the meaning of the Small
Business Investment Act of 1958, as amended ("SBIA"), and the regulations
thereunder, including Title 13, Code of Federal Regulations, 121.301(c). The
Company does not presently engage in, nor shall hereafter engage in, any
activities, nor shall the Company use the proceeds provided by the transaction
contemplated hereby directly or indirectly for any purpose, for which an SBIC is
prohibited from providing funds by 13 CFR 107.720.
3.30 Conversion of Phantom Stock Plan and Stock Appreciation
Rights Plan. The conversion of the Old Review Phantom Stock Plan and the Old
Review Stock Appreciation
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Rights Plan (together, the "Plans") shall result in a compensation deduction to
the Company for Federal income tax purposes and, further, the Company's
withholding obligation for purposes of Federal income and other taxes otherwise
imposed upon amounts received by participants in the Plans pursuant to the
Conversion shall in no event exceed $5,000,000.
3.31 Obligations of Management. Each officer of the Company is
currently devoting his or her full business time to the conduct of the business
of the Company. The Company is not aware of an officer or key employee of the
Company planning to work less than full time at the Company in the future. No
officer or director of the Company is an officer, director or affiliate of any
entity that competes with the Company.
40 Representations and Warranties of the Purchasers. Each Purchaser
hereby represents and warrants to the Company as to itself as follows.
4.1 Power and Authority. It has the requisite power and
authority to enter into this Agreement, to purchase the Shares subject to all of
the terms of the Articles hereunder, and to carry out and perform its
obligations under the terms of this Agreement.
4.2 Due Execution. This Agreement has been duly authorized,
executed and delivered by it, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding agreement of it.
4.3 Investment Representations.
(a) This Agreement is made with the Purchasers in
reliance upon each Purchaser's representation to the Company, which by its
acceptance hereof the Purchasers hereby confirm, that the Shares to be received
by each Purchaser will be acquired for investment for its own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and that each Purchaser has no present intention of selling, granting
participation in, or otherwise distributing the same.
(b) Each Purchaser represents that it is an
"accredited investor" as that term is defined in Section 501(a) of the Rules
promulgated under the 1933 Act, is experienced in evaluating companies such as
the Company, is able to fend for itself in the transactions contemplated by this
Agreement, has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its investment, and has
the ability to bear the economic risks of its investment. Each Purchaser further
represents that it has had access, during the course of the transactions and
prior to its purchase of Shares, to all such information as it deemed necessary
or appropriate (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) and that it has had, during
the course of the transactions and prior to its purchase of Shares, the
opportunity to ask questions of, and receive answers from, the Company
concerning the terms and conditions of the offering and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to it or to which it had access.
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(c) Each Purchaser understands that the Shares and
the Underlying Common Stock may not be sold, transferred or otherwise disposed
of without registration under the 1933 Act or an exemption therefrom, and that
in the absence of an effective registration statement covering the Shares (or
the Underlying Common Stock) or an available exemption from registration under
the 1933 Act, the Shares (and the Underlying Common Stock) must be held
indefinitely.
(d) Each Purchaser understands that each certificate
representing the Shares and the Underlying Common Stock will be endorsed with a
legend substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE
SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY
OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE
SECURITIES ACT OF 1933), AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS. COPIES OF THE STOCK PURCHASE AGREEMENT,
SHAREHOLDER AGREEMENT, INVESTOR RIGHTS AGREEMENT AND BYLAWS,
AS AMENDED, PROVIDING FOR RESTRICTIONS ON TRANSFER OF THESE
SECURITIES MAY BE OBTAINED UPON WRITTEN REQUEST BY THE HOLDER
OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
4.4 No Public Market. Each Purchaser understands that no
public market now exists for any of the securities issued by the Company and
that there is no assurance that a public market will ever exist for the Shares
(or the Underlying Common Stock).
4.5 Government Consents. No consent, approval or authorization
of or designation, declaration or filing with any state, federal, or foreign
governmental authority on the part of the Purchasers because of any special
characteristic of such Purchasers is required in connection with the valid
execution and delivery of this Agreement or the Rights Agreement by the
Purchasers, and the consummation by the Purchasers of the transactions
contemplated hereby and thereby; provided, however, that the Purchasers make no
representations as to compliance with applicable state securities laws.
4.6 Finders' Fees. Each Purchaser (i) represents and warrants
that it has retained no finder or broker in connection with the transactions
contemplated by this Agreement, and (ii) hereby agrees to indemnify and to hold
the Company and the other Purchasers harmless of and from
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any liability for any commission or compensation in the nature of a finder's fee
to any broker or other person or firm (and the costs and expenses of defending
against such liability or asserted liability) for which any such Purchaser or
any of its employees or representatives are responsible.
5.0 Conditions to the Purchasers' Obligations. The obligations of each
Purchaser to purchase the Shares at the Closing Date are subject to the
fulfillment on or before the Closing Date of each of the following conditions.
5.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 3 shall be true on and as of the
Closing Date with the same force and effect as if they had been made on and as
of such date.
5.2 Performance. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by it on or before the Closing Date.
5.3 Qualifications; Consents. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state or other person that are required prior to and in
connection with the lawful issuance and sale of the Shares pursuant to this
Agreement, or the execution, delivery and compliance with the Agreements, shall
have been duly obtained and shall be effective on and as of the Closing Date.
5.4 Articles. The Company shall have duly filed with the
Secretary of State of the State of Delaware the Articles, which shall be in full
force and effect at the Closing Date and shall not have been further amended in
any respect.
5.5 Legal Investment. At the time of the Closing Date, the
purchase of the Shares by the Purchasers hereunder shall be legally permitted by
all laws and regulations to which they or the Company are subject.
5.6 Opinion of the Company's Counsel. The Purchasers shall
have received from counsel to the Company an opinion letter substantially in the
form attached hereto as Exhibit F, addressed to them, dated the date of the
Closing Date.
5.7 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing Date
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers and their
counsel, and the Purchasers and their counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
5.8 Investor Rights Agreement. The Company shall have executed
and delivered a Rights Agreement substantially in the form attached hereto as
Exhibit D.
5.9 Shareholder Agreement. Certain founding shareholders,
senior management of the Company and the Purchasers shall have entered into a
Shareholder Agreement substantially in the form attached hereto as Exhibit E.
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5.10 Compliance Certificate. There shall have been delivered
to the Purchasers a certificate, dated as of the Closing Date, signed by the
Company's President certifying that the conditions specified in Sections 5.1,
5.2, 5.3, 5.4, 5.9, 5.15, 5.16, 5.17, 5.18, 5.19 and 5.20 have been fulfilled.
5.11 Secretary's Certificate. There shall have been delivered
to the Purchasers a certificate, dated as of the Closing Date, signed by the
Company's Secretary or an Assistant Secretary and in form and substance
satisfactory to the Purchasers, that shall certify (i) the names of its officers
authorized to sign this Agreement, the certificates for purchased Shares and the
other documents, instruments or certificates to be delivered pursuant to this
Agreement by the Company or any of its officers, together with true signatures
of such officers; (ii) that the copy of the Articles attached thereto is true,
correct and complete; (iii) that the copy of the Bylaws attached thereto is
true, correct and complete; (iv) that the copy of Board of Directors'
resolutions attached thereto evidencing the approval of this Agreement, the
issuance of the purchased Shares and the other matters contemplated hereby was
duly adopted and is in full force and effect; and (v) that the copy of
shareholders' resolutions evidencing approval of the amendment and restatement
of the Articles were duly adopted and are in full force and effect.
5.12 Certificate of Good Standing. There shall have been
delivered to the Purchasers a Certificate of Good Standing for the Company from
the Secretary of State of the State of Delaware, dated within thirty (30) days
of the Closing Date.
5.13 Injunctions, etc. No injunction or order of any
governmental authority shall be in effect as of the Closing Date, and no
lawsuit, claim, proceeding or investigation shall be pending or threatened by or
before any governmental authority as of the Closing Date, that would restrain or
prohibit the issuance and sale of the Shares or the consummation of any of the
other transactions contemplated by the Agreements or invalidate or suspend any
provision of the Agreements or the Articles.
5.14 Employment Agreements. The Company shall have entered
into an employment agreement with Xxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxx
Xxxxxxx, Xxxxx Task, Xxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxxxxx and Xxxxxxx
Xxxxxxxx.
5.15 Reorganization Complete. All of the transactions
contemplated by the Reorganization shall have been completed on terms reasonably
satisfactory to the Purchasers on or before the Closing Date.
5.16 Student Advantage. The Old Review shall have distributed,
as contemplated by the Reorganization, up to fifty percent (50%) of its direct
or indirect holdings in Student Advantage while it was treated as an S
Corporation under the Code.
5.17 Conversion of Phantom Stock Plan and Stock Appreciation
Rights Plan. On or before the Closing Date, the Company shall take all necessary
actions to terminate the Plans, in both instances in accordance with the terms
of the applicable Plan, and the Company and Old Review have and will have taken
all necessary actions to obtain from each participant in the Plans
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a waiver of all existing rights held by them under such Plans, in exchange for
the conversion of such rights into the right to receive cash and/or shares of
common stock of the Company and the right to purchase additional shares of
common stock of the Company pursuant to the Company's Stock Incentive Plan.
5.18 Small Business Matters. The Purchasers shall have
received from the Company a SBIC Representation Letter substantially in the form
attached hereto as Exhibit G.
5.19 Right of First Offer Letter. The Company shall have
executed and delivered a side letter agreement among the Company, Random House
TPR, Inc., SG Capital Partners L.L.C. and Olympus, in substantially the form
attached hereto as Exhibit H.
5.20 Election of SG Capital Partners, L.L.C. Board Designee.
The Board designee of SG Capital Partners, L.L.C. shall be elected to the Board
of Directors of the Company on or before the Closing Date.
5.21 Expenses. The Company shall reimburse all reasonable
costs and out-of-pocket expenses of the Purchasers up to a maximum of $220,000,
as more fully provided in Section 8.12 herein, on or before the Closing Date.
60 Conditions to the Company's Obligations. The obligations of the
Company to issue and sell the Shares at the Closing Date are subject to the
fulfillment on or before the Closing Date of each of the following conditions.
6.1 Representations and Warranties. The representations and
warranties made by the Purchasers in Section 4 shall be true on and as of the
Closing Date with the same force and effect as if they had been made on and as
of such date.
6.2 Performance. The Purchasers shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by them on or before the Closing Date.
6.3 Qualifications, Consents. All authorizations, approvals or
permits, if any, to be obtained from any governmental authority or regulatory
body of the United States or of any state or other person that are required
prior to and in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement, or the execution, delivery and compliance with the
Agreements, shall have been duly obtained and shall be effective on and as of
the Closing Date.
6.4 Legal Investment. At the time of the Closing Date, the
purchase of the Shares by the Purchasers hereunder shall be legally permitted by
all laws and regulations to which they or the Company are subject.
6.5 Certificate. The Secretary of State of the State of
Delaware shall have accepted the Articles for filing, and they shall be in full
force and effect at the Closing Date.
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6.6 Investor Rights Agreement. The Purchasers shall execute
and deliver a Rights Agreement in substantially the form attached hereto as
Exhibit D.
7.0 Survival; Indemnification.
7.1 Survival. The representations and warranties contained in
Section 3 hereof shall survive the Closing Date and shall continue in full force
and effect for a period of two (2) years from the date of this Agreement, except
that the representations and warranties contained in Section 3.17 shall survive
until thirty (30) days after the end of the applicable statute of limitations
(taking into account any extensions or waivers thereof) and the representations
and warranties contained in Section 3.5 shall survive indefinitely. At the end
of such survival periods the indemnification obligations of the Company in
Section 7.2 with respect thereto shall expire, except to the extent notice of a
claim pursuant to Section 7.2 has been provided prior to such expiration. Any
claims with respect to the foregoing sentence pursuant to this Section 7 must be
asserted in writing with reasonable particularity by the party making such
claims.
7.2 Indemnification by the Company.
(a) The Company will defend and indemnify each of the
Purchasers and their officers, directors, managers, members, partners,
stockholders, attorneys, representatives, agents, and employees (each, an
"Indemnified Party") against, and hold each Indemnified Party harmless from, all
losses (including any diminution in value of the Shares of Underlying Common
Stock or other securities of the Company hereafter acquired by the Purchasers
under this Agreement or the Agreements), demands, actions, causes of action,
assessments, damages, liabilities, costs or expenses, including without
limitation, interest, penalties, fines, fees, deficiencies, claims of damage,
reasonable attorneys' and other professional fees and expenses incurred in the
investigation, prosecution, defense or settlement thereof (collectively, the
"Losses") arising out of or based on any breach of any warranty, representation
or covenant set forth in this Agreement or the Agreements, other than any Losses
resulting from any breach of any warranty or representation of the Purchasers
set forth in Section 4 above or any action on the part of such Indemnified Party
that is finally determined in such proceeding to be primarily and directly a
result of such party's gross negligence or willful misconduct. Notwithstanding
the foregoing, no Losses hereunder shall be entitled to indemnification
hereunder unless the total of all such Losses exceed $270,000 (the "Basket"), in
which case all such Losses up to $27,000,000, including the first $270,000,
shall be entitled to indemnification hereunder, provided that any Losses with
respect to breaches of Section 3.2 and 3.17 shall not be subject to such Basket,
in which case all such Losses up to $27,000,000, shall be entitled to
indemnification hereunder. The Purchasers agree to reimburse the Company for any
payments made by the Company to the Purchasers pursuant to this paragraph for
Losses that are finally determined in such proceeding to result primarily and
directly from the breach of any warranty of representation of the Purchasers set
forth in Section 4 above or the gross negligence or willful misconduct of the
Purchasers.
(b) In the event the Company pays an amount exceeding
$2,000,000 to Xxxx Xxxxxxxx in settlement of his claims or by judgment against
the Company, the Company shall issue to the Purchasers, at no cost to the
Purchasers, an additional amount of fully paid and
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nonassessable shares of Series A Preferred Stock sufficient to provide the
Purchasers the number of Shares they would have received at the Closing Date had
the $150,000,000 pre-investment valuation of the Company been reduced
dollar-for-dollar by the amount of such payment in excess of $2,000,000. For
purposes of determining the amount of any payment to Xxxx Xxxxxxxx the following
shall be excluded: (i) the amount of any royalty obligation acknowledged by the
Company as of the Closing Date and (ii) any warrant granted with a strike price
per share equal to or greater than the fair market value per share of the Common
Stock underlying the warrant at the time of grant. The fair market value per
share of the Common Stock underlying the warrant shall be determined by mutual
agreement of the Company and seventy-five percent (75%) of holders of the Series
A Shares. In the event the Company and such percentage of holders of the Series
A Shares fail to agree to a fair market value, the fair market value per share
of the Common Stock underlying the warrant shall be determined as follows:
(i) if the Common Stock is not then traded
on a national securities exchange, the average of the closing prices
quoted on the National Association of Securities Dealers, Inc.
Automated Quotation National Market System, if applicable, or the
average of the last bid and asked prices of the Common Stock quoted in
the over-the-counter-market for the twenty (20) trading days (or such
other reasonable number of days consistent with the methodology agreed
to in the warrant) immediately preceding the time of grant or, if such
date is not a business day on which shares are traded, the next
immediately preceding trading day; or
(ii) if the Common Stock is then traded on a
national securities exchange, the average of the high and low prices of
the Common Stock listed on the principal national securities exchange
on which the Common Stock is so traded for the twenty (20) trading days
(or such other reasonable number of days consistent with the
methodology agreed to in the warrant) immediately preceding the time of
grant or, if such date is not a business day on which shares are
traded, the next immediately preceding trading day; or
(iii) if the Common Stock is not then
publicly traded, as evidenced by a written opinion from an independent
investment banking firm of nationally recognized standing mutually
agreeable to the Company and seventy-five percent (75%) of holders of
the Series A Shares..
(c) Nothing contained in this Section 7 shall limit
in any manner any remedy at law or in equity to which an Indemnified Party shall
be entitled against the Company as a result of fraud or intentional
misrepresentation by the Company or any of its representatives or agents. In
addition to all other indemnities in this Agreement, in the event of any breach
of the representation and warranty set forth in the last sentence of Section 3.2
herein, the Company shall issue to the Purchasers, at no cost to the Purchasers,
an additional amount of fully paid and nonassessable shares of Series A
Preferred Stock such that, if such issuance were made at the Closing Date, such
representation and warranty would be true and accurate in all respects when
made.
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(d) Any indemnification payment made by the Company
to a Purchaser pursuant to this Section 7.2, including the issuance of any
additional Shares, shall be treated for federal, state, local and foreign tax
purposes as an adjustment to the price paid by such Purchaser for the Shares.
If an indemnification payment is not treated as an adjustment
to the purchase price of the Shares, the Company agrees to increase the
indemnification payment to account for any Tax Cost (including the Tax Cost
related to such increase) realized by the ultimate corporate or individual owner
of the Purchasers (looking through all non-taxable entities for federal income
tax purposes, including partnerships and LLCs). "Tax Cost" to a Purchaser is the
amount by which the tax liability of Purchaser (or affiliated group in which a
Purchaser is a member) is increased (including any decrease in an amount
refunded).
7.3 Notification by Indemnified Party. In the event of a claim
by a third party for which a party hereto is entitled to indemnification, the
Indemnified Party shall give written notice to the Company promptly after such
Indemnified Party has knowledge of any claim, action, proceeding or
investigation as to which indemnity may be sought. The Company shall be entitled
to assume the defense of any such claim, action, proceeding or investigation,
including the employment of counsel and the payment of all fees and expenses.
The Indemnified Party shall have the right to employ separate counsel in
connection with any such claim, action, proceeding or investigation and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by the Indemnified Party. However, if the Company declines or
fails to assume the defense of any such claim, action, proceeding or
investigation and the Indemnified Party then employs counsel to assume defense
thereof, the Company shall pay all reasonable fees and expenses of such counsel
employed by the Indemnified Party. The Company shall be liable only for
settlement of any claim against an Indemnified Party made with the Company's
written consent, not to be unreasonably withheld.
8.0 Miscellaneous.
8.1 Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
third party any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.
8.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York.
8.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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8.4 Jurisdiction. Each party hereto hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of the state and federal
courts located in the State of New York for any actions, suits, or proceedings
arising out of or relating to this agreement and the transactions contemplated
hereby. Each party hereto agrees not to commence any action, suit or proceeding
relating thereto except in such courts. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this agreement or the transactions
contemplated hereby, in such state or federal courts as aforesaid and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
8.5 Waiver of Jury Trial. The parties hereby waive trial by
jury in any judicial proceeding to which they are parties involving, directly or
indirectly, any matter in any way arising out of, related to or connected with
this Agreement.
8.6 Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
8.7 Notices. Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery or upon deposit with the United States Post Office, by
registered or certified mail. postage prepaid, or sent by confirmed telecopy,
addressed (a) if to the Company, at:
The Princeton Review, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: President
With a copy to:
Patterson, Belknap, Xxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
or at such other address as the Company shall have furnished to the Purchaser in
writing, and (b) if to a Purchaser, at such Purchaser's address as is set forth
on Exhibit A, or at such other address as such Purchaser shall have furnished to
the Company in writing.
8.8 Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall to the extent practicable,
be modified so as to make it valid, legal and enforceable and to retain as
nearly as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8.9 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Company or any Purchaser or any
subsequent holder of any Shares upon any
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breach, default or noncompliance of any Purchaser, any subsequent holder of any
Shares or the Company under this Agreement or under the Articles, shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
the part of the Company or the Purchasers of any breach, default or
noncompliance under this Agreement or under the Articles or any waiver on the
Company's or the Purchasers' part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing and that all remedies, either under this
Agreement or the Articles, by law, or otherwise afforded to the Company and the
Purchasers, shall be cumulative and not alternative.
8.10 Information Confidential.
(a) Each Purchaser acknowledges that this Agreement
and all attachments hereto are confidential and for such Purchaser's use only,
and it will refrain from using such information or reproducing, disclosing or
disseminating such information to any other person (other than its employees,
affiliates, agents or partners having a need to know the contents of such
information and its attorneys), except in connection with the enforcement of
rights under this Agreement, unless the Company has made such information
available to the public generally or it is required by a governmental body to
disclose such information.
(b) The Company shall not issue any press release or
make any disclosure or public announcement relating primarily to the subject
matter of this Agreement or any other Investment Agreement without the prior
written approval of the Purchasers.
8.11 Amendments and Waivers. Except as otherwise expressly
provided herein, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely) with the written consent of the Company and the
Purchasers (or their transferees) holding at least a seventy-five percent (75%)
of the outstanding Shares, voting together as a single group (treated as if
converted at the conversion rate then in effect and including, for such
purposes, shares of Underlying Common Stock into which any Shares shall have
been converted); provided, however, that no such amendment or waiver shall
reduce the aforesaid percentage of Shares and Underlying Common Stock, the
holders of which are required to consent to any waiver or supplemental
agreement, without the consent of the holders of all of such Shares and
Underlying Common Stock. Any amendment or waiver effected in accordance with
this Section 8.11 shall be binding upon each Purchaser and each transferee of
the Shares and Underlying Common Stock. Upon the effectuation of each such
amendment or waiver, the Company shall promptly give written notice thereof to
the Purchasers (or their transferees) who have not previously consented thereto
in writing.
8.12 Expenses and Certain Taxes.
(a) The Company agrees to reimburse all reasonable
costs and out-of-pocket expenses of the Purchasers, such costs to include due
diligence investigation, travel and
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attorneys' fees and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and other related documentation up to a
maximum of $220,000.
(b) The Company shall pay and indemnify and hold
harmless the Purchasers from and against any sales, transfer, documentary, stamp
or other similar Taxes incurred in connection with the transactions contemplated
by this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties as of the date first above written.
THE COMPANY: THE PRINCETON REVIEW, INC.
By: /s/ Xxxx Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
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PURCHASERS: SGC PARTNERS II, LLC
By: SG MERCHANT BANKING FUND L.P.,
its managing member
By: SG CAPITAL PARTNERS L.L.C.,
its general partner
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Managing Director
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PURCHASERS: OLYMPUS GROWTH FUND III, L.P.
By: OGP III, LLC, its general partner
By: /s/ Xxxxx X. Xxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxx
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.
By: OEF, L.P., its general partner
By: LJM, L.L.C., a general partner
By: By: /s/ Xxxxx X. Xxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxx
Title: Member
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PURCHASERS:
________________________________________
(Printed or Typed Name)
By:_____________________________________
Name: __________________________________
Title: _________________________________
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EXHIBIT A
PURCHASERS
NUMBER OF SERIES A PRICE
NAME ADDRESS SHARES PER SHARE TOTAL COMMITMENT
---- ------- ------------------ ----- ----------------
SG CAPITAL 0000 XXXXXX XX XXX XXXXXXXX 2,475,693 7.2707 $18,000,021.10
PARTNERS L.L.C. XXX XXXX, XX 00000
OLYMPUS GROWTH METRO CENTER 1,225,469 7.2707 $8,910,017.46
FUND III, L.P. XXX XXXXXXX XXXXX
XXXXXXXX, XX 00000
OLYMPUS EXECUTIVE METRO CENTER 12,378 7.2707 $89,996.72
FUND, L.P. XXX XXXXXXX XXXXX
XXXXXXXX, XX 00000
A-1
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Page
EXHIBITS:
A PURCHASERS
B RESTATED ARTICLES OF INCORPORATION
C SCHEDULE OF EXCEPTIONS
Schedule 3.2 Capitalization
Schedule 3.3 Subsidiaries
Schedule 3.6(b) Financial Statements, Changes
Schedule 3.7 Material Agreements
Schedule 3.8 Title to Properties and Assets
Schedule 3.9 Undisclosed Liabilities
Schedule 3.10 Obligations to Related Parties
Schedule 3.11 Employee Matters, ERISA
Schedule 3.13 Litigation
Schedule 3.14 Intellectual Property
Schedule 3.17 Taxes
Schedule 3.18 Insurance Coverage
Schedule 3.19 Registration Rights
D INVESTOR RIGHTS AGREEMENT
E SHAREHOLDER AGREEMENT
F FORM OF OPINION OF COUNSEL FOR THE COMPANY
G FORM OF SBIC REPRESENTATION LETTER
H FORM OF RIGHT OF FIRST OFFER LETTER
A-ii
