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Exhibit 2.2
RH CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") is executed and entered
into effective as of the 31st day of March 2000, by and among (i) Random House
TPR, Inc., a New York corporation ("RH Sub"), (ii) Random House, Inc., a New
York Corporation ("RH"), (iii) The Princeton Review, Inc., a Delaware
Corporation ("TPR"), (iv) Xxxx X. Xxxxxxx ("Xxxxxxx"), and (v) TPR Holdings,
Inc., a Delaware corporation ("Newco").
RECITALS
A. RH Sub and Newco desire to enter into this Agreement to set forth
the terms and conditions pursuant to which they have agreed to exchange RH's
interests in certain limited liability companies for shares of capital stock of
Newco in a transaction described in Section 351 of the Internal Revenue Code of
1986, as amended.
B. RH, RH Sub, TPR and Xxxxxxx are parties to a Members' Agreement,
dated as of the 30th day of June, 1995 (the "Members' Agreement")
C. In connection with the consummation of the transactions described
below, RH, RH Sub, TPR and Xxxxxxx desire to terminate the Members' 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 Certain Limited Liability Company Interests Held by RH
Sub into Newco Class A Common Stock. Subject to the satisfaction of the
conditions set forth below in paragraph (c) of this Xxxxxxx 0, XX Sub hereby
agrees to transfer to Newco all of its Limited Liability Company Membership
Interests (the "LLC Interests") in each of Princeton Review Publishing Company,
L.L.C., a Delaware limited liability company ("Publishing LLC"), Princeton
Review Management, L.L.C., a Delaware limited liability company, Princeton
Review Products, L.L.C. ("Products"), 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 Sub of the number of shares of Voting
Class A Common Stock, $.01 per share par value, of Newco (the "Class A Common
Stock") set forth on Schedule I hereto, as follows:
(a) In connection with the exchange of the LLC Interests for shares
of Class A Common Stock, RH Sub represents and warrants to Newco as follows:
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(i) RH Sub has a pre-existing business relationship with Newco
and its affiliates and by reason of its business or financial experience is
capable of evaluating the merits and risks of an investment in the shares of
Class A Common Stock of Newco and of protecting its own interests in connection
with such investment.
(ii) RH Sub 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 to it contemplated by this Agreement.
(iii) RH Sub is acquiring the shares of Class A Common Stock to
be issued to it at the Closing (as defined below) for investment purposes for
its own account only and not with a view to or for sale in connection with any
distribution of all or any part of the Class A Common Stock. No other Person
will have any direct or indirect interest in or right to the shares of Class A
Common Stock issued to RH Sub at the Closing.
(iv) RH Sub is financially able to bear the economic risk of an
investment in the Class A Common Stock, including a total loss of the value of
such investment.
(v) RH Sub acknowledges that the Class A Common Stock to be
issued to it hereunder has not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), or qualified under Delaware law, the New York
General Business Law, as amended, or any other applicable blue sky laws in
reliance, in part, on its representations, warranties and agreements contained
in this paragraph (a).
(vi) RH Sub understands that the Class A Common to be issued to
it hereunder will be "restricted securities" as defined in Rule 144 promulgated
by the Securities and Exchange Commission pursuant to the Securities Act because
such Class A Common Stock will be acquired from Newco in a transaction not
involving a public offering, that such Class A Common Stock may be resold by RH
Sub without registration under the Securities Act only in certain limited
circumstances and that otherwise such Class A Common Stock must be held
indefinitely. In this connection, RH Sub understands the resale limitations
imposed by the Securities Act and is familiar with Rule 144 promulgated by the
Securities and Exchange Commission, as presently in effect, and the conditions
which must be met in order for that Rule to be available for resale of such
Class A Common Stock.
(vii) RH Sub acknowledges that the Class A Common Stock to be
acquired by him or her hereunder is a speculative investment which involves a
substantial degree of risk of loss of its entire investment in Newco, that RH
Sub understands and takes full cognizance of the risk factors related to the
purchase of the Class A Common Stock to be acquired by it hereunder and that
Newco is newly organized and has no financial or operating history.
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(viii) RH Sub has received and reviewed all information it
considers necessary or appropriate for the purpose of deciding whether to
purchase the Class A Common Stock pursuant to the provisions of this Agreement.
RH Sub 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 contemplated hereby and regarding the business, financial
affairs and other aspects of Newco and has further had the opportunity to obtain
all information which it deemed necessary to evaluate the investment in Class A
Common Stock contemplated hereby and to verify the accuracy of information
otherwise provided to it in connection with such investment.
(ix) RH Sub is an "accredited investor" within the meaning of
Rule 501 promulgated by the Securities and Exchange Commission.
(x) RH Sub has been advised by Newco and its representatives to
consult with its own attorney regarding all legal matters related to the
investment in the Class A Common Stock contemplated hereby, has done so, to the
extent it considers necessary and is not relying on any legal advice provided by
Newco or any of its representatives in connection with the transactions
contemplated hereby.
(b) In connection with the issuance of the Class A Common Stock in
exchange for the LLC Interests, Newco hereby represents and warrants to RH Sub
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 (c) 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 (c) of this Section 1, there is no subscription, option, warrant,
call, right, agreement or other commitment to which Newco is a party or by which
Newco is bound relating to the issuance of shares of capital stock of Newco.
(iii) The issuance and sale of the shares of Class A 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.
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(iv) Upon the issuance thereof at the Closing, each share of
Class A Common Stock issued pursuant to the provisions of this Section 1 shall
be duly authorized, validly issued, fully paid and non-assessable.
(c) The exchange of the LLC Interests for shares of Class A 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 RH Sub shall
have received a Certificate from the Secretary of Newco dated the Closing Date
to such effect.
(ii) Simultaneously with the Closing, all of the stockholders of
TPR (the "Stockholders") shall have transferred to Newco all of their shares of
capital stock of TPR, solely in exchange for the issuance to them of the number
of shares of Class A Common Stock and Class B Non-Voting Common Stock, par value
$.01, of Newco set forth on Schedule II annexed hereto.
(iii) Simultaneously with the Closing, the Non-Voting Members of
Publishing LLC (the "Non-Voting Members") 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 RH Sub 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 RH Sub
dated the Closing Date to such effect.
(v) The representations and warranties of Newco set forth in
this Agreement shall be true and correct in all material respects as of the time
immediately prior to the consummation of the transactions contemplated by this
Section 1 at the Closing and RH Sub 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 Sub 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.
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(d) Each of RH, RH Sub, TPR and Xxxxxxx acknowledges and agrees that
the provisions of the Members' Agreement or any other existing agreement among
them that prohibit, limit or govern (i) the repayment on the date hereof of the
indebtedness owed by Publishing to Products through the transfer to Products
from Publishing of stock of Student Advantage, Inc. and the issuance to Products
of new units of membership interests in Publishing or (ii) the distribution on
the date hereof of a portion of the stock of Student Advantage, Inc. by
Publishing to its members, are hereby irrevocably waived. Effective upon the
consummation of the transactions contemplated by this Section 1 at the Closing,
each of RH, RH Sub, TPR and Xxxxxxx acknowledges and agrees that (1) the
Members' Agreement shall be terminated and of no further force or effect and (2)
all other provisions in all agreements heretofore existing among any of the
parties hereto that would preclude, limit or govern any of the transactions
contemplated by this Agreement are hereby irrevocably waived.
(e) At the Closing, RH Sub shall deliver to Newco the certificates
representing the LLC Interests to be exchanged for the Class A 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 RH Sub a
certificate representing the shares of Class A Common Stock being issued to RH
Sub. If it is inconvenient for RH Sub 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
(e).
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 RH Sub and Newco set forth
in Section 1 shall survive the Closing and will expire on the first anniversary
of the Closing. RH Sub 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 RH Sub's representations and warranties set forth in
Section 1 of this Agreement, Newco agrees to indemnify, defend and hold RH Sub
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 the following addresses (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):
If to RH Sub or RH, to:
Random House, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
If to TPR, Xxxxxxx, or TPR, Holdings, Inc. to:
The Princeton Review, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxx
(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.
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(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.
Random House, Inc.
By: /s/ Xxxxxxx Xxxxxxx
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Random House TPR, Inc.
By: /s/ Xxxxxxx Xxxxxxx
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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
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Schedule I
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 II
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 III
Number of shares of Class B Common Stock
to be issued to the Non-Voting Members of Publishing, LLC.
Name Number of Shares
---- ----------------
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
