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Exhibit 2.8.1
CLOSING AGREEMENT
Princeton Review of Boston, Inc. and Princeton Review of New Jersey,
Inc. (together, the "Sellers"), Xxxxxx X. Xxxxx and Xxxxxxx Xxxxxxxxx (together,
the "Stockholders"), Princeton Review Operations, L.L.C. ("Buyer"), and
Princeton Review Management, L.L.C. ("Franchisor") are parties to an Asset
Purchase Agreement dated as of January 18, 2001 (the "Purchase Agreement"). As a
condition to the closing of the transactions contemplated by the Purchase
Agreement, and pursuant to Section 18 of the Purchase Agreement, the parties
wish to amend and supplement the terms of the Purchase Agreement as provided
herein.
1. COBRA Beneficiaries. The Sellers hereby supplement Schedule 8.18 of the
Purchase Agreement as follows: Sellers maintain health insurance plans. Any
obligations under COBRA as a result of such health insurance plans to
former employees of the Sellers terminated prior to the Closing Date and
not employed by the Buyer pursuant to the Purchase Agreement, and their
beneficiaries, shall remain an obligation of the Sellers regardless of any
other provisions of the Purchase Agreement.
2. 401(k) Plan. The parties acknowledge that the board of directors of each
Seller adopted a resolution prior to Closing to terminate such Seller's
401(k) Plan and Trust ("401(k) Plan") effective prior to the Closing Date.
In accordance with Section 15.1 of the Purchase Agreement, Buyer shall not
assume sponsorship or otherwise be obligated to administer, operate or
contribute to the 401(k) Plan. Upon receipt of a favorable determination
letter from the Internal Revenue Service that the termination of the 401(k)
Plan does not adversely affect its qualified status, each Seller shall
furnish a copy of the letter to Buyer, provided, however, that the Sellers
are not obligated to attempt to obtain such a letter. Buyer will have no
obligation to accept rollover distributions from the Sellers' 401(k) Plan
into Buyer's 401(k) plan if Buyer believes that accepting such
distributions would not be in the best interests of Buyer's plan.
3. Potential Tax Liability. The Sellers and the Stockholders acknowledge that
any claims against them for indemnification with respect to tax matters
related to the Franchised Business referred to in Sections 8.11, 8.19 and
15.2 of the Purchase Agreement, shall be subject to Section 13.1 of the
Purchase Agreement regardless of the Indemnified Party's actual knowledge
at the time of Closing. The Sellers and the Stockholders agree that such
indemnification claims are not subject to (a) the two-year limitation
period referred to in Section 13.3 of the Purchase Agreement; or (b) the
$10,000 "basket" for Claims under Section 13.4 of the Purchase Agreement.
Further, the Sellers and the Stockholders agree that, if any such claims
for indemnification with respect to tax matters remain unpaid as of their
respective due dates, the Indemnified Party will have the right (but no
obligation) to deduct such overdue amounts from any payments due to the
Sellers and the Stockholders, including but not limited to amounts due
under the Notes. Any set-off against the Notes pursuant to this Section 3
shall be made first against the Note with an initial principal amount of
$500,000.
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This set-off right of Buyer and its affiliates is in addition to any other
remedies they may have under the Purchase Agreement, the Notes or
applicable law.
4. Copy of Data. Within 10 days after the Closing, Buyer shall deliver to
the Sellers a computer with an accessible copy of the Sellers' data related to
the Franchised Business as of the Closing Date, as compiled by the Sellers in
the ordinary course of business.
5. Effect on Purchase Agreement. This Closing Agreement shall be deemed to
be an integral part of the Purchase Agreement. Capitalized terms used but not
defined herein shall have the meanings given to them in the Purchase Agreement.
Except as expressly modified and supplemented by this Closing Agreement, the
terms of the Purchase Agreement are hereby ratified and confirmed.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have executed this Closing Agreement by
their duly authorized representatives.
PRINCETON REVIEW OPERATIONS, L.L.C.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Chief Operating Officer
PRINCETON REVIEW MANAGEMENT, L.L.C.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Chief Operating Officer
THE PRINCETON REVIEW OF BOSTON, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President
THE PRINCETON REVIEW OF NEW JERSEY, INC.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President
XXXXXX X. XXXXX, Individually
/s/ Xxxxxx X. Xxxxx
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XXXXXXX XXXXXXXXX, Individually
/s/ Xxxxxxx Xxxxxxxxx
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