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Exhibit 4.2
As of April 14, 2000
Xxxxxx and Xxxxx XxXxxxxx
00 Xxxxxxx Xxx
Xxxxxx, XX 00000
Xxxxxx XxXxxxxx, President
The Learning Express, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxx, XX 00000
Xxxxxx XxXxxxxx, Manager
Xxxxx XxXxxxxx, Manager
Toy Building, LLC
00 Xxxxx Xxxxx Xxxxxx
Xxxx, XX 00000
Dear Xxxxxx and Xxx:
Reference is made to (1) that certain Guaranty (Unlimited) dated
December 29, 1999 executed by Xxxxxx XxXxxxxx (the "Xxxxxx XxXxxxxx Guarantee");
(2) that certain Guaranty (Unlimited) dated December 29, 1999 executed by Xxxxx
XxXxxxxx (the "Xxxxx XxXxxxxx Guarantee"); (3) that certain Guaranty (Unlimited)
dated December 29, 1999 executed by The Learning Express, Inc. (the "Learning
Express Guarantee"); and (4) that certain Guaranty (Unlimited) dated December
29, 1999 executed by Toy Building, LLC (the "Toy Building Guarantee") (the
Xxxxxx XxXxxxxx Guarantee, the Xxxxx XxXxxxxx Guarantee, the Learning Express
Guarantee and the Toy Building Guarantee together, the "Guarantees", and Xxxxxx
XxXxxxxx, Xxxxx XxXxxxxx, The Learning Express, Inc. and Toy Building, LLC
individually, a "Guarantor" and collectively, the "Guarantors"). Pursuant to the
Guarantees, the Guarantors have each agreed to guarantee the Obligations (as
defined in the Guarantees) of XxxxxxxxXxxxxxx.xxx LLC, a subsidiary of
XxxxxxxxXxxxxxx.xxx Holdings LLC (the "Company"), in connection with that
certain Loan Agreement dated December 29, 1999, by and between
XxxxxxxxXxxxxxx.xxx LLC and USTrust n/k/a Citizens Bank (the "Bank").
In consideration of the Guarantors' agreeing to guarantee the
Obligations of XxxxxxxxXxxxxxx.xxx LLC to the Bank, the Company agrees to the
following:
1. If Xxxxxx XxXxxxxx makes payments to the Bank in satisfaction of her
obligations under the Xxxxxx XxXxxxxx Guarantee, the Company will issue to Xx.
XxXxxxxx one Series A Convertible Preferred Share of the Company for each $1.75
she so pays to the Bank.
2. If Xxxxx XxXxxxxx makes payments to the Bank in satisfaction of his
obligations under the Xxxxx XxXxxxxx Guarantee, the Company will issue to
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Xx. XxXxxxxx one Series A Convertible Preferred Share of the Company for each
$1.75 he so pays to the Bank.
3. If The Learning Express, Inc. makes payments to the Bank in satisfaction of
its obligations under the Learning Express Guarantee, the Company will issue to
The Learning Express, Inc. one Series A Convertible Preferred Share of the
Company for each $1.75 it so pays to the Bank.
4. If Toy Building, LLC makes payments to the Bank in satisfaction of its
obligations under the Toy Building Guarantee, the Company will issue to Toy
Building, LLC one Series A Convertible Preferred Share of the Company for each
$1.75 it so pays to the Bank.
By countersigning this letter agreement below, each Guarantor agrees
that:
- prior to the issuance of any Series A Convertible Preferred
Shares (the "Shares") to a Guarantor, the Guarantor will
execute and enter into the then current Operating Agreement of
the Company and be bound thereby as a member of the Company;
- the Guarantor acquiring the Shares will be acquiring such
Shares for its own account for investment purposes, the
Guarantor has no intention of offering, distributing or
otherwise disposing of the Shares, and the Guarantor will not
dispose of any Shares unless a registration statement under
the Securities Act of 1933 is then in effect with respect to
the Shares or, in the opinion of counsel for the Company, the
Shares are exempt from the registration requirements of the
Securities Act of 1933; and
- the Guarantor will not, for a period of at least 180 days
following the effective date of any "Initial Public Offering"
by the Company (or its successor-in-interest) or by
XxxxxxxxXxxxxxx.xxx LLC (or its successor-in-interest),
directly or indirectly, sell, offer to sell or otherwise
dispose of the Shares or any shares of XxxxxxxxXxxxxxx.xxx LLC
(or its successor-in-interest) received in exchange for the
Shares, other than any securities which are included in such
Initial Public Offering; provided, however, that the Company
shall be under no obligation to include such shares or any
portion thereof in any Initial Public Offering. For purposes
of this letter agreement, an "Initial Public Offering" shall
mean the Company's (or its successor-in-interest's) or
XxxxxxxxXxxxxxx.xxx LLC's (or its successor-in-interest's)
initial distribution of securities in an underwritten public
offering to the general public pursuant to a registration
statement filed with the Securities and Exchange Commission.
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The obligations of the Company pursuant to this letter agreement will
terminate upon termination of the Guarantees.
XXXXXXXXXXXXXXX.XXX HOLDINGS LLC
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Chief Executive Officer
Accepted and agreed to:
/s/ Xxxxxx XxXxxxxx
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Xxxxxx XxXxxxxx
/s/ Xxxxx XxXxxxxx
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Xxxxx XxXxxxxx
THE LEARNING EXPRESS,
INC.
By: /s/ Xxxxxx XxXxxxxx
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Xxxxxx XxXxxxxx
President
TOY BUILDING, LLC
By: /s/ Xxxxxx XxXxxxxx
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Xxxxxx XxXxxxxx
Manager
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