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Exhibit 2.3
TPR CONTRIBUTION AGREEMENT
THIS TPR CONTRIBUTION AGREEMENT (the "Agreement") is executed and
entered into effective as of the 31st day of March 2000, by and among (i) The
Princeton Review, Inc., a Delaware corporation ("TPR"), (ii) each of the persons
listed on Schedule I attached hereto (collectively, the "Stockholders") and
(iii) TPR Holdings, Inc., a Delaware corporation ("Newco").
RECITALS
A. TPR, the Stockholders and Newco desire to enter into this Agreement
to set forth the terms and conditions pursuant to which they have agreed to
exchange their respective common stock ownership interests in TPR for shares of
capital stock of Newco in a transaction described in Section 351 of the Internal
Revenue Code of 1986, as amended.
B. The Stockholders and TPR are parties to an Amended and Restated
Stockholders Agreement, dated as of the 1st day of January 1996 (the
"Stockholders Agreement") in respect of their shares of capital stock in TPR.
C. In connection with the consummation of the transactions described
below, the Stockholders and TPR desire to terminate the Stockholders Agreement
as hereinafter set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties hereto do hereby agree as follows:
1. Conversion of Common Stock Ownership Interests in TPR into Newco
Class A Common Stock and Class B Common Stock. Subject to the satisfaction of
the conditions set forth below in paragraph (f) of this Section 1, each of the
Stockholders hereby agrees to transfer to Newco all of his or her shares of
common stock, $.01 per share par value, of TPR (collectively, the "TPR Stock")
solely in exchange for the issuance to such party of shares of Voting Class A
Common Stock, $.01 per share par value, of Newco (the "Class A Common Stock") or
Non-Voting Class B Common Stock, $.01 per share par value, of Newco (the "Class
B Common Stock"), as follows:
(a) All shares of TPR Stock held by Xxxx Xxxxxxx ("Xxxxxxx") shall
be exchanged for the number of shares of Class A Common Stock listed next to his
name on Schedule I attached hereto.
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(b) All shares of TPR Stock held by each of the Stockholders other
than Xxxxxxx shall be exchanged for the number of shares of Class B Common Stock
listed next to their names on Schedule I attached hereto.
(c) In connection with the exchange of his or her shares of TPR
Stock for shares of Class A Common Stock or Class B Common Stock, each
Stockholder represents and warrants (solely with respect to himself or herself )
to Newco as follows:
(i) Such Stockholder has a pre-existing business relationship
with Newco and its affiliates and by reason of his or her business or financial
experience is capable of evaluating the merits and risks of an investment in the
shares of Class A Common Stock or Class B Common Stock of Newco and of
protecting his or her own interests in connection with such investment.
(ii) Such Stockholder has not seen, received, been presented
with or been solicited by any leaflet, public promotional meeting, newspaper or
magazine article or advertising, radio or television advertisement or any other
form of advertising or general solicitation with respect to the proposed
issuance and sale of the Class A Common Stock or Class B Common Stock to such
Stockholder contemplated by this Agreement.
(iii) Such Stockholder is acquiring the shares of Class A Common
Stock or Class B Common Stock to be issued to him or her at the Closing (as
defined below) for investment purposes for his or her own account only and not
with a view to or for sale in connection with any distribution of all or any
part of the Class A Common Stock or Class B Common Stock. No other Person will
have any direct or indirect interest in or right to the shares of Class A Common
Stock or Class B Common Stock issued to such Stockholder at the Closing.
(iv) Such Stockholder is financially able to bear the economic
risk of an investment in the Class A Common Stock or Class B Common Stock,
including a total loss of the value of such investment.
(v) Such Stockholder acknowledges that the Class A Common Stock
or Class B Common Stock to be issued to him or her hereunder has not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or qualified under Delaware law, the New York General Business Law, as amended,
or any other applicable blue sky laws in reliance, in part, on his or her
representations, warranties and agreements contained in this paragraph (b).
(vi) Such Stockholder understands that the Class A Common Stock
or Class B Common Stock to be issued to him or her hereunder will be "restricted
securities" as defined in Rule 144 promulgated by the Securities and Exchange
Commission pursuant to the Securities Act because such Class A Common Stock or
Class B Common Stock will be acquired from Newco in a transaction not involving
a public offering, that such Class A Common Stock or Class B Common Stock may be
resold by such Stockholder without registration under the Securities Act only in
certain limited circumstances and that otherwise such Class A Common Stock or
Class B Common Stock must be held indefinitely. In this connection, such
Stockholder understands the resale limitations imposed by the Securities Act and
is familiar with Rule 144
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promulgated by the Securities and Exchange Commission, as presently in effect,
and the conditions which must be met in order for that Rule to be available for
resale of such Class A Common Stock or Class B Common Stock.
(vii) Such Stockholder acknowledges that the Class A Common
Stock or Class B Common to be acquired by him or her hereunder is a speculative
investment which involves a substantial degree of risk of loss of his or her
entire investment in Newco, that such Stockholder understands and takes full
cognizance of the risk factors related to the purchase of the Class A Common
Stock or Class B Common Stock to be acquired by him or her hereunder and that
Newco is newly organized and has no financial or operating history.
(viii) Such Stockholder has received and reviewed all
information he or she considers necessary or appropriate for the purpose of
deciding whether to purchase the Class A Common Stock or Class B Common Stock
pursuant to the provisions of this Agreement. Such Stockholder has had an
opportunity to ask questions of and receive answers from Newco and its
representatives regarding the terms and conditions of purchase of the Class A
Common Stock or Class B Common Stock contemplated hereby and regarding the
business, financial affairs and other aspects of Newco and has further had the
opportunity to obtain all information which such Stockholder deemed necessary to
evaluate the investment in Class A Common Stock or Class B Common Stock
contemplated hereby and to verify the accuracy of information otherwise provided
to him or her in connection with such investment.
(ix) Such Stockholder is an "accredited investor" within the
meaning of Rule 501 promulgated by the Securities and Exchange Commission.
(x) Such Stockholder has been advised by Newco and its
representatives to consult with his or her own attorney regarding all legal
matters related to the investment in the Class A Common Stock or Class B Common
Stock contemplated hereby, has done so, to the extent he or she considers
necessary and is not relying on any legal advice provided by Newco or any of its
representatives in connection with the transactions contemplated hereby.
(c) In connection with the issuance of the Class A Common Stock or
Class B Common Stock in exchange for the TPR Stock of the Stockholders, Newco
hereby represents and warrants to each of the Stockholders as follows:
(i) Newco is a newly-organized corporation which has not
heretofore conducted any business operations and does not have any assets,
obligations or liabilities of any type or kind and Newco is not a party to any
agreement or arrangement with any person other than certain agreements entered
into by Newco in connection with the initial issuance of its shares of Class A
Common Stock and Class B Common Stock as contemplated by paragraph (d) of this
Section 1.
(ii) The authorized capital stock of Newco consists of
20,000,000 shares of Class A Common Stock and 10,000,000 shares of Class B
Common Stock, none of which have been issued. Except as contemplated by
paragraph (d) of this Section 1, there is no
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subscription, option, warrant, call, right, agreement or other commitment to
which Newco is a party or by which Newco is bound relating to the issuance of
shares of capital stock of Newco.
(iii) The issuance and sale of the shares of Class A Common
Stock or Class B Common Stock at the Closing and the consummation of the other
transactions related thereto to which Newco is a party have been duly and
validly authorized by all necessary action on the part of Newco and no other
corporate proceedings on the part of Newco are necessary to authorize such
issuance and sale and such consummation.
(iv) Upon the issuance thereof at the Closing, each share of
Class A Common Stock or Class B Common Stock issued pursuant to the provisions
of this Section 1 shall be duly authorized, validly issued, fully paid and
non-assessable.
(d) The exchange of the TPR Stock for shares of Class A Common Stock
or Class B Common Stock shall take place at a closing (the "Closing") which will
be held at the offices of Newco's counsel, Patterson, Belknap, Xxxx & Xxxxx LLP,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 at 10:00 a.m. on
April 1, 2000 (the "Closing Date"), subject to the satisfaction of the following
conditions:
(i) The Certificate of Incorporation and Bylaws of Newco in the
forms attached hereto as Exhibits A and B, respectively, shall not have been
amended or modified since the dates of their respective adoption and shall
continue to be in full force and effect as of the Closing Date and each
Stockholder shall have received a Certificate from the Secretary of Newco dated
the Closing Date to such effect.
(ii) Simultaneously with the Closing, Random House TPR, Inc., a
Delaware corporation ("RH"), shall have transferred to Newco all of its
membership interest in Princeton Review Publishing Company, L.L.C., a Delaware
limited liability company ("Publishing LLC"), and all of its membership
interests in each of Princeton Review Management, L.L.C., a Delaware limited
liability company, Princeton Review Products, L.L.C., a Delaware limited
liability company, and Princeton Review Operations, L.L.C., a Delaware limited
liability company, solely in exchange for the issuance to RH of the number of
shares of Class A Common Stock set forth on Schedule II annexed hereto.
(iii) Simultaneously with the Closing, the Non-Voting Members of
Publishing LLC shall have transferred to Newco all of their Non-Voting
Membership Interests in Publishing LLC solely in exchange for the issuance to
such Non-Voting Members of the number of shares of Class B Common Stock set
forth in Schedule III annexed hereto.
(iv) The representations and warranties of each Stockholder set
forth in this Agreement shall be true and correct in all material respects as of
the time immediately prior to the consummation of the transactions contemplated
by this Section 1 at the Closing and Newco shall have received a Certificate
from each Stockholder dated the Closing Date to such effect.
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(v) The representations and warranties of Newco set forth in
this Agreement shall be true and correct in all material respects as of the time
immediately prior to the consummation of the transactions contemplated by this
Section 1 at the Closing and each Stockholder shall have received a Certificate
from the Secretary of Newco dated the Closing Date to such effect.
(vi) Simultaneously with the Closing each of the Stockholders,
RH and the Non-Voting Members shall have executed and delivered a Stockholders
Agreement in the form of Exhibit C attached hereto with respect to their shares
of Class A Common Stock and Class B Common Stock of Newco.
(e) Effective upon the consummation of the transactions contemplated
by this Section 1 at the Closing, each of TPR and the Stockholders acknowledges
and agrees that the Stockholders Agreement shall be terminated and of no further
force or effect.
(f) At the Closing, each Stockholder shall deliver to Newco the
certificates representing the shares of TPR stock to be exchanged for the Class
A Common Stock or Class B Common Stock, duly endorsed for transfer and such
certificates shall be free and clear of any liens, charges or encumbrances. At
the Closing, Newco shall deliver to each Stockholder a certificate representing
the shares of Class A Common Stock or Class B Common Stock being issued to such
Stockholder. If it is inconvenient for any Stockholder to conduct a physical
closing at the Closing, the transactions contemplated by this Section 1 may be
conducted by mail or messenger service, if such a procedure is feasible, so long
as all documentation is provided in accordance with the requirements of this
paragraph (f).
2. Miscellaneous.
(a) This Agreement may be amended, modified or supplemented only by
written agreement of all of the parties hereto.
(b) Any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party or parties
entitled to the benefits thereof only by a written instrument signed by the
party or parties granting such waiver, but such waiver or failure to insist upon
strict compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this paragraph
(b).
(c) The representations and warranties of the Stockholders and Newco
set forth in Section 1 shall survive the Closing and will expire on the first
anniversary of the Closing. Each Stockholder agrees to indemnify, defend and
hold Newco harmless from and against any losses, liabilities, costs, expenses or
other damages (including reasonable attorneys' fees) (collectively, the
"Indemnified Losses") arising out of any breach of any of such Stockholder's
representations and warranties set forth in Section 1 of this Agreement, Newco
agrees to indemnify, defend and hold each Stockholder harmless from and against
any
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Indemnified Losses arising out of any breach of any of Newco's representations
and warranties set forth in Section 1 of this Agreement.
(d) All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at their respective addresses set forth on the books and records of TPR
(or at such other address for a party as shall be specified by like notice;
provided that notices of a change of address shall be effective only upon
receipt thereof).
(e) This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of all of the other parties
hereto, nor is this Agreement intended to confer upon any other person except
the parties hereto any rights or remedies hereunder.
(f) This Agreement shall be governed by the laws of the State of
Delaware (regardless of the laws that might otherwise govern under applicable
Delaware principles of conflicts of law) as to all matters, including, but not
limited to, matters of validity, construction, effect, performance and remedies.
(g) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(h) The Section headings contained in this Agreement are solely for
the purpose of reference, are not part of the agreement of the parties and shall
not in any way affect the meaning or interpretation of this Agreement. The
parties have participated jointly in the negotiation and drafting of this
Agreement. If any ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumptions or burden of proof shall arise favoring or disfavoring any party by
virtue of authorship of any of the provisions of this Agreement.
(i) This Agreement, including the Schedules and Exhibits hereto and
the documents, certificates and instruments referred to herein, embodies the
entire agreement and understanding of the parties hereto in respect of the
transactions contemplated hereby. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
transactions.
(j) Except as otherwise specifically provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, all costs
and expenses incurred by any party in connection with the Agreement and the
transactions contemplated hereby will be paid by such party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first above written.
TPR Holdings, Inc.
By: /s/ Xxxx X. Xxxxxxx
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The Princeton Review, Inc.
By: /s/ Xxxx X. Xxxxxxx
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/s/ Xxxx X. Xxxxxxx
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Xxxx Xxxxxxx
[SIGNATURE PAGE TO TPR CONTRIBUTION]
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MANAGEMENT STOCKHOLDERS:
/s/ Xxxxx Task /s/ Xxxx Xxxxxxx
---------------------- ---------------------
Name: Xxxxx Task Name: Xxxx Xxxxxxx
Title: Title: Chief Operating Officer
Address: Address: 000 Xxxx 00xx, XX, XX
Fax No.: Fax No.:
/s/ Xxxxxx Xxxxx /s/ Xxx Xxxxxx
---------------------- ---------------------
Name: Xxxxxx Xxxxx Name: Xxx Xxxxxx
Title: Title:
Address: Address:
Fax No.: Fax No.:
/s/ Xxx Xxxxxxx /s/ Xxxxxx X. Xxx
---------------------- ---------------------
Name: Xxx Xxxxxxx Name: Xxxxxx X. Xxx
Title: Title:
Address: 0 Xxxxxxxxxxx Xx., Xxxxxxxxxx, XX 00000 Address: 0000 Xxxx Xxxxxx #0
Fax No.: (000) 000-0000 Xxxxxxx, XX 00000
Fax No.:
/s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title:
Address: 0000 Xxxxxxx Xx., Xxxxxxx, XX 00000
Fax No.: (000) 000-0000
[SIGNATURE PAGE TO TPR CONTRIBUTION]
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SCHEDULE I
Number of shares of Class A Common Stock and Class B Common Stock
to be issued to the Stockholders of The Princeton Review, Inc.
Name Number of Shares
---- ----------------
Xxxx Xxxxxxx 11,470,063 shares
Random House TPR, Inc. 3,378,618 shares
Xxxxxx Xxx 77,069 shares
Xxxxxx Xxxxxx 98,216 shares
Xxxxx Task 204,928 shares
Xxxx Xxxxxxx 120,756 shares
Xxxxxx Xxxxx 120,756 shares
Xxx Xxxxxx 120,756 shares
Xxx Xxxxxxx 85,244 shares
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SCHEDULE II
Number of shares of Class A Common Stock to be issued to RH
Name Number of Shares
---- ----------------
Random House TPR, Inc. 3,378,618 shares
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SCHEDULE III
Number of shares of Class B Common Stock to be issued to Non-Voting Members
NUMBER OF SHARES OF NON-VOTING
STOCKHOLDER CLASS B COMMON STOCK
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Xxxxxxx Xxxxxx & Xxxxxxx Xxxxxx Xx. (joint) 24,431
The Princeton Review of Orange County, Inc. 97,277
The Princeton Review of North Carolina, Inc. 22,722
Lecomp Company, Inc. 169,614
The Princeton Review of Pittsburgh, Inc. 18,594
The Princeton Review of Rhode Island, Inc. 17,099
Xxxxx Xxxxxx 3,498
The Princeton Review of Penninsula, Inc. 61,062
The Princeton Review of St. Louis, Inc. 25,844
The Kafiristan Blokes 7,325
Xxxxxx Xxxxxx 3,465
The Princeton Review of Boston, Inc. 150,456
The Princeton Review of New Jersey, Inc. 291,791
TSTS, Inc. 191,300
Test Services, Inc. 239,114
Total 1,323,592
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Exhibits
Exhibit A Certificate of Incorporation of Newco
Exhibit B Bylaws of Newco
Exhibit C Newco Stockholders Agreement
