Exhibit 10.1

CONTRIBUTION AGREEMENT

BY AND AMONG

THE NATIONAL LABOR COLLEGE,

THE PRINCETON REVIEW, INC.

AND

NLC-TPR SERVICES, LLC

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CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (this “Agreement”), dated as of April 20, 2010 (the
“Effective Date”), is made and entered into by and among The National Labor
College, a Delaware not-for profit corporation (“NLC”), The Princeton Review,
Inc., a Delaware corporation (“TPR”), and NLC-TPR Services, LLC, a Delaware
limited liability company (“Services LLC”).

W I T N E S S E T H :

WHEREAS, NLC owns and operates The National Labor College, a regionally
accredited institution of higher learning (“The National Labor College”) that
was founded in 1969 by the AFL-CIO, with the special mission of serving the
educational needs of persons engaged in the activities of organized labor,
including working men and women, union members and representatives, and labor
leaders;

WHEREAS, for the purpose of furthering its traditional Section 501(c)(3)
educational mission, NLC desires to organize and expand certain of The National
Labor College’s undergraduate programs that are focused broadly on serving
rank-and-file union members and their households into an academic division to be
known as the “Undergraduate School for Working Families” (the “Working Families
School”), and to organize The National Labor College’s degree and specialized
academic programs that are primarily focused on labor studies and on the
training union leaders into another academic division to be known as the “School
for Labor Leadership” (the “Labor Leadership School”); and

WHEREAS, subject to the terms and conditions set forth herein, NLC and TPR
desire to form Services LLC as a limited liability company under the laws of the
State of Delaware in order to implement a strategic partnership between NLC and
TPR, pursuant to which Services LLC will be responsible for providing (or
arranging for the provision of) a broad range of services to The National Labor
College in connection with the business and operations of NLC’s Working Families
School, as described in that certain Limited Liability Company Agreement of
Services LLC, dated as of even date herewith, by and between NLC and TPR and in
the form attached hereto as Exhibit A (the “LLC Agreement”); and

WHEREAS, in connection with the formation of Services LLC and the contribution
of assets and cash to Services LLC, NLC and TPR desire to set forth their mutual
agreements with respect to certain contributions to be made to Services LLC by
each of NLC and TPR and certain other related matters;

NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein made, the parties hereby agree as follows:

 

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Article I

Definitions

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings ascribed to such terms in the LLC Agreement. The following
terms shall have the meanings ascribed to them below:

“Accrediting Body” means any Person, whether private or quasi-private, whether
foreign or domestic, which engages in the granting or withholding of
accreditation of postsecondary institutions or their educational programs in
accordance with standards and requirements relating to the performance,
operations, financial condition and/or academic standards of such institutions,
including MSA.

“Affiliate,” with respect to any Person, shall mean any other Person directly or
indirectly controlling, controlled by or under common control with, such Person.
For purposes of this Agreement, “control” (including with correlative meanings,
the terms “controlling”, “controlled by” or “under common control with”) as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or by contract
or otherwise.

“AFL-CIO” means The American Federation of Labor and Congress of Industrial
Organizations.

“AFL-CIO License Agreement” means the license agreement pursuant to which the
AFL-CIO will license certain Intellectual Property to NLC on the terms and
conditions set forth therein, in the form attached hereto as Exhibit G.

“Agreement” has the meaning given to such term in the Preamble.

“Compliance Date” means April 2, 2009.

“Educational Agency” means any Person, Accrediting Body, entity or organization,
whether governmental, government chartered, private, or quasi-private, that
engages in granting or withholding Educational Approvals for, or otherwise
regulates, postsecondary institutions, their agents or employees in accordance
with standards relating to performance, operation, financial condition or
academic standards of such institutions, and the provision of Financial
Assistance to such institutions or students attending such institutions,
including without limitation the U.S. DOE, MSA, MHEC, and the U.S. Department of
Veterans Affairs and state approving agencies for veterans education benefits.

“Educational Approval” means any license, permit, consent, franchise, approval,
authorization, certification or accreditation issued by any Educational Agency
in connection with the operations of postsecondary institutions or participation
of such institutions in any Financial Assistance programs including the Title IV
Programs.

“Educational Law” means any federal, state, municipal, foreign or other law,
regulation, order, Accrediting Body standard or other binding requirement
applicable thereto, including but not limited to Title IV and the regulations
implemented under Title IV, issued or administered by any Education Agency and
applicable to private postsecondary educational institutions.

 

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“Effective Date” has the meaning given to such term in the Preamble.

“Enforceability Exceptions” means (a) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and (b) general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or equity).

“Financial Assistance” means any form of student financial assistance, grants or
loans, including without limitation the Title IV Programs, provided under any
program authorized or administered by any Governmental Authority or Educational
Agency.

“Governmental Authority” means any governmental agency, authority, department,
commission, board, bureau, court or instrumentality of the United States, any
domestic state, or any foreign country, and any political subdivision or agency
thereof, and includes any authority having governmental or quasi-governmental
powers, including any administrative agency or commission, but expressly
excludes any Educational Agency.

“Growth Restrictions” means restrictions or limitations that, with respect to
the twelve-month period commencing on the date of measurement, (i) would have
the effect of reducing forecast aggregate revenues for Services LLC by
twenty-five percent (25%) or greater during the twelve (12) month period
commencing on the date of measurement, as measured in accordance with the then
applicable business model for Services LLC from which the relevant Initial
Budget or Operating Budget was derived, or (ii) would otherwise have a material
adverse effect on Services LLC’s ability to realize the assumptions or outputs
in such business model. For the avoidance of doubt, Growth Restrictions are not
intended to include notice and approval requirements of any Educational Agency
that are generally applicable to, and routinely required for, postsecondary
education institutions, including postsecondary education institutions that are
provisionally certified by U.S. DOE.

“Higher Education Act” means the Higher Education Act of 1965, as amended, and
its implementing regulations.

“Initial Advance Contributions Tranche” shall mean an aggregate amount of TPR
Advance Contributions to Services LLC that is equal to Ten Million Seven Hundred
Fifty Thousand Dollars ($10,750,000).

“Initial Budget” shall mean the initial operating and capital budget for
Services LLC that is attached as Exhibit B to this Agreement.

“Initial Funding Regulatory Condition” shall mean the occurrence of the
following events:

(i) MSA.

 

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(a) NLC shall have provided to MSA a written substantive change request with
respect to the arrangements contemplated under this Agreement and the Related
Agreements and all information and documentation requested by MSA regarding such
arrangements. NLC shall have received from MSA a written response to the
substantive change request that provides assurance that NLC can begin to promote
and advertise, and enroll students in, the Initial Programs as contemplated
under the Initial Budget.

(b) NLC shall have received an action letter from MSA with regard to the
reaffirmation of NLC’s accreditation, and such action letter shall maintain the
accreditation of NLC and shall not place NLC on “show cause” or “probation”
status.

(c) MSA shall not have imposed any Growth Restrictions. The elements of the
Initial Regulatory Funding Condition set forth in subparagraphs (i)(a), (i)(b)
and this subparagraph (i)(c) with respect to MSA will be deemed to have been
satisfied notwithstanding the imposition of any ongoing reporting obligations on
NLC and/or Services LLC or imposition of other limitations or requirements on
NLC and/or Services LLC that do not constitute Growth Restrictions (including,
without limitation, requirements to obtain further consents from MSA for the
introduction of new programs or other future substantive changes, in each case
that are generally applicable to, and routinely required for, postsecondary
education institutions).

(ii) MHEC. NLC shall provide to TPR written documentation from MHEC that
provides assurance that NLC can begin to promote and advertise, and enroll
students in, the Initial Programs as contemplated under the Initial Budget. In
addition, NLC shall not have received written notice from MHEC to the effect
that MHEC has determined to revoke or terminate any material authorizations
issued to NLC, and MHEC shall not otherwise have imposed any Growth
Restrictions. The elements of the Initial Regulatory Funding Condition set forth
in this subparagraph (ii) with respect to MHEC will be deemed to have been
satisfied notwithstanding any ongoing reporting obligations imposed by MHEC on
NLC and/or Services LLC or imposition of other limitations or requirements on
NLC and/or Services LLC that do not constitute Growth Restrictions (including,
without limitation, requirements to obtain further consents from MHEC for the
introduction of new programs or other future substantive changes, in each case
that are generally applicable to, and routinely required for, postsecondary
education institutions).

(iii) U.S. DOE.

(a) Application for Approval to Participate in the Federal Student Financial Aid
Programs. NLC shall have submitted to U.S. DOE by March 31, 2010 a materially
complete renewal application for continued certification as an eligible
institution of higher education entitled to participate in Title IV Programs in
accordance with the provisions of 34 CFR § 668.13(b)(2). U.S. DOE shall have
provided to NLC written or electronic notice that NLC has been approved to
continue to participate in the Title IV Programs, and NLC shall have received
from the U.S. DOE a fully executed Program Participation Agreement, where
neither such approval nor such Program Participation Agreement impose Growth
Restrictions. In addition, U.S. DOE shall not otherwise have imposed any Growth
Restrictions or imposed a limitation on the amount of Title IV Program funds
that NLC may disburse, without any

 

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reference to any allowance for future increases, such that NLC would be unable
to disburse the maximum amount of Title IV program funds that would otherwise be
disbursed if the Working Families School achieved the projected enrollment for
the highest number of students contemplated to be enrolled in the Initial
Programs during the first twelve (12) months of educational program offerings,
as set forth in the Initial Budget.

(b) Letter of Credit. NLC shall be in compliance with the terms of any written
notice from the U.S. DOE respecting letters of credit and have made sufficient
arrangements for such letter of credit to be in full force and effect during the
term for such letter of credit specified in such written notice; and, to the
extent that any required letters of credit are guaranteed by a Person other than
NLC, such Person shall not be TPR.

For purposes of determining whether the Initial Funding Regulatory Condition has
been satisfied, if any of MSA, MHEC or U.S. DOE, as appropriate, provides any
written notice of a negative determination with respect to any of the foregoing
elements of the Initial Funding Regulatory Condition, such corresponding element
of the Initial Funding Regulatory Condition shall be deemed satisfied once MSA,
MHEC or U.S. DOE, as applicable, provides subsequent written notice to NLC
confirming (as the case may be) that any such material objection, Growth
Restriction or other negative determination has been resolved and that such
accreditation, authorization, approval, or Title IV certification has been
obtained in form and substance sufficient to fulfill the provisions of
paragraphs (i), (ii) and (iii) of this definition.

“Initial Programs” means the educational programs that are proposed to be the
initial educational programs offered by the Working Families School during its
first twelve (12) months of educational program offerings, as set forth in the
Initial Budget.

“Intellectual Property” means any or all of the following: (a) works of
authorship, including without limitation computer programs, source code and
executable code, whether embodied in software, firmware or otherwise,
documentation, designs, files, records, data and mask works; (b) copyrights and
patents (and applications therefor), inventions (whether or not patentable),
improvements and technology; (c) proprietary and confidential information, trade
secrets and know how; (d) databases, lists of students, prospects, customers or
suppliers, data compilations and collections and technical data; (e) logos,
trade names, trade dress, trademarks and service marks (and applications
therefor); (f) domain names, website addresses and sites; and (g) tools, methods
and processes, including object libraries.

“Labor Leadership School” has the meaning given to such term in the second
Recital.

“LIBOR” means in respect of any day, the offered rate for United States dollars
quoted by Barclays London or such other banks as the Parties shall from time to
time agree, to prime banks in the London Interbank Market at 11:00 hours (London
time) for a deposit of a principal sum equivalent to the sum in question for a
period commencing on such day and ending thirty (30) days later provided that if
the said rate is not quoted on any day the rate last quoted shall be used.

“LLC Agreement” has the meaning given to such term in the third Recital.

“MHEC” means the Maryland Higher Education Commission.

 

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“MSA” means the Commission on Higher Education of the Middle States Association
of Colleges and Schools.

“NLC” has the meaning given to such term in the Preamble.

“NLC License Agreement” means the license agreement pursuant to which NLC will
license certain Intellectual Property to Services LLC on the terms and
conditions set forth therein, in the form attached hereto as Exhibit C.

“NLC Payments Agreement” means the payment agreement with respect to certain
functions to be performed by NLC for the benefit and support of the Working
Families School and facilitating the purposes of Services LLC on the terms and
conditions set forth therein, in the form attached hereto as Exhibit D.

“NLC Regulatory Suspension Event” means (i) initiation of a proceeding by U.S.
DOE, pursuant to 34 C.F.R. part 668, Subpart G, (ii) initiation of a proceeding
by the U.S. DOE to revoke NLC’s participation in the Title IV Programs pursuant
to NLC’s Program Participation Agreement, (iii) receipt by NLC of a U.S. DOE
program review report or audit report proposing initiation of a proceeding
pursuant to 34 C.F.R. part 668, Subpart G, or imposing a liability on NLC that
will have a material adverse effect on NLC, (iv) receipt by NLC of written
notice from MSA of a decision by MSA to initiate a “show cause” action or to
place NLC on “probation,” (v) receipt by NLC of written notice from MHEC of an
intent to withdraw or terminate an Educational Approval necessary to operate NLC
as it is then operating, (vi) the imposition by an Educational Agency of Growth
Restrictions, (vii) the occurrence of an NLC Regulatory Termination Event, or
(viii) NLC has failed to deliver to Services LLC agreements with Unions (as
defined in the NLC License Agreement) affiliated with the AFL-CIO in accordance
with its obligations under the first sentence of Section 8.1 of the NLC License
Agreement; provided, however that with respect to each of the foregoing clauses
(i) through (viii), an NLC Regulatory Suspension Event will not include any such
event that arises primarily as a result of actions or omissions on the part of
either TPR or Penn Foster, other than to the extent such actions or omissions
were undertaken in accordance with NLC’s instructions, procedures or written
policies.

“Organizational Documents” means the articles or certificate of incorporation,
by-laws, certificate of limited partnership, partnership agreement, certificate
of formation, limited liability company operating agreement, trust agreement and
all other similar organizational documents of any Person other than an
individual.

“Penn Foster” means Penn Foster Education Group, Inc., a Delaware corporation,
or one of its wholly-owned subsidiaries, as appropriate.

“Penn Foster Services Agreement” means the services agreement for certain
services to be provided by TPR or Penn Foster, Inc. to Services LLC on the terms
and conditions set forth therein, in the form attached hereto as Exhibit F.

 

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“Person” means an individual, corporation, partnership, association, trust,
unincorporated organization, limited liability company, other business entity,
or other legal entity.

“Related Agreements” means, collectively, the LLC Agreement, the NLC Payments
Agreement, the NLC License Agreement, the AFL-CIO License Agreement, the Penn
Foster Services Agreement, the Services LLC Services Agreement and all other
documents executed in connection herewith, including the conveyance documents,
as any or all of the foregoing may be renewed, amended, extended, modified,
supplemented, replaced or rearranged from time to time.

“Services LLC” has the meaning given to such term in the Preamble.

“Services LLC Services Agreement” means the services agreement for certain
services to be provided by Services LLC to NLC on the terms and conditions set
forth therein, in the form attached hereto as Exhibit E.

“Subsidiary” as it relates to any Person, means with respect to such Person, any
other Person of which the specified Person, either directly or through or
together with any other of its Subsidiaries, owns more than fifty percent
(50%) of the voting power in the election of directors or their equivalents,
other than as affected by events of default; provided, that Services LLC shall
not be considered a Subsidiary of either of NLC or TPR for purposes of this
Agreement.

“The National Labor College” has the meaning given to such term in the first
Recital.

“Title IV” means Title IV of the Higher Education Act.

“Title IV Programs” means the programs of federal student financial assistance
administered pursuant to Title IV.

“TPR” has the meaning given to such term in the Preamble.

“TPR Additional Working Capital Contribution” has the meaning given to such term
in Section 2.2(c).

“TPR Advance Contributions” means cash payments equal in the aggregate to Twenty
Million Seven Hundred Fifty Thousand Dollars ($20,750,000) to be made as Capital
Contributions by TPR to Services LLC at the times and in the amounts specified
in Section 2.2 hereof.

“TPR Advance Contribution Date” means the dates on which TPR is obligated to
make a TPR Advance Contribution to Services LLC in accordance with Section 2.2.

“TPR Working Capital Contribution Loan” has the meaning given to such term in
Section 2.2(c).

“TPR Working Capital Contributions” means cash payments (other than the TPR
Advance Contributions) to be made as Capital Contributions by TPR to Services
LLC for working capital purposes at the times and in the amounts specified in
Section 2.2 hereof, including TPR Additional Working Capital Contributions.

 

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“Union Privilege Marketing Agreement” means the marketing services agreement
between Union Privilege and Services LLC pursuant to which Union Privilege will
provide certain services to Services LLC on the terms and conditions set forth
therein, in the form attached hereto as Exhibit H

“U.S. DOE” means the United States Department of Education.

“Working Capital Cap” has the meaning given to such term in Section 2.2(c).

“Working Capital Cut-Off Date” means December 31, 2013.

“Working Families School” has the meaning given to such term in the second
Recital.

Article II

Contributions

Section 2.1 NLC Contributions. Concurrently with the execution of this
Agreement, in connection with the formation of Services LLC, NLC shall enter
into the LLC Agreement, the NLC License Agreement, the NLC Payments Agreement
and the Services LLC Services Agreement with Services LLC, and NLC shall enter
into the AFL-CIO License Agreement with the AFL-CIO. In consideration of the
foregoing and of the other covenants made hereunder and under the Related
Agreements by NLC, Services LLC will issue to NLC concurrently with the
execution of this Agreement a number of Units equal to fifty-one percent
(51%) of the Membership Interests of Services LLC, having such management rights
and rights to distributions as described in the LLC Agreement.

Section 2.2 TPR Contributions.

(a) Subject to Section 2.2(e), TPR shall transfer in installments to Services
LLC, as Capital Contributions, the TPR Advance Contributions, with each such
installment of the TPR Advance Contributions to be made by TPR in cash by wire
transfer of immediately available funds to an account designated in writing by
Services LLC, as follows:

(i) On the Effective Date and on each of April 30, 2010, May 30, 2010 and
June 30, 2010, TPR shall transfer to Services LLC a TPR Advance Contribution of
One Million Dollars ($1,000,000), subject to the provisions of
Section 2.2(a)(iii);

(ii) If the Initial Funding Regulatory Condition shall have been satisfied by
June 30, 2010, TPR shall transfer to Services LLC on June 30, 2010, a TPR
Advance Contribution of Two Million Seven Hundred Fifty Thousand Dollars
($2,750,000), subject to the provisions of Section 2.2(a)(iii);

(iii) On the first date from and including July 1, 2010 as of which the Initial
Funding Regulatory Condition shall have been satisfied, TPR shall transfer to
Services LLC an additional installment of the TPR Advance Contribution in an
amount that,

 

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when added to the aggregate amount of TPR Advance Contributions previously made
by TPR to Services LLC under Sections 2.2(a)(i)-(ii), will equal the full amount
of the Initial Advance Contributions Tranche, and following which transfer no
subsequent TPR Advance Contributions shall be payable under Sections
2.2(a)(i)-(ii);

(iv) On July 1, 2011, TPR shall transfer to Services LLC an additional TPR
Advance Contribution of Five Million Dollars ($5,000,000); and

(v) On July 1, 2012, TPR shall transfer to Services LLC an additional TPR
Advance Contribution of Five Million Dollars ($5,000,000).

(b) Notwithstanding the foregoing, if the Initial Regulatory Funding Condition
has not been satisfied by July 1, 2010, then NLC shall have the right to seek to
obtain on or prior to October 31, 2010 such approvals, consents or other actions
from MSA, MHEC and/or U.S. DOE, as the case may be, as would be necessary to
satisfy the Initial Regulatory Funding Condition. In addition, during such
period, the parties shall negotiate in good faith, based on the then-current
status of the written communications with each of MSA, MHEC and U.S. DOE, to
determine an appropriate extension or other modification to the Capital
Contributions to be made by TPR pursuant to Section 2.2(a) for the unpaid
balance of the Initial Advance Contributions Tranche and the distributions of
Distributable Cash to the Members pursuant to Article 7 of the LLC Agreement;
provided, however, that if the Initial Funding Regulatory Condition is satisfied
at any time after July 1, 2010 and prior to termination of this Agreement, then
TPR shall transfer to Services LLC an additional installment of the TPR Advance
Contributions in an amount that, when added to the aggregate amount of TPR
Advance Contributions previously made by TPR to Services LLC under Sections
2.2(a)(i)-(ii), will equal the full amount of the Initial Advance Contributions
Tranche. If the Initial Regulatory Funding Condition shall not have been
satisfied by October 31, 2010, then TPR may either (i) terminate this Agreement
by providing NLC five (5) days prior notice to NLC and exercise its rights to
dissolve Services LLC in accordance with Section 11.1.10 of the LLC Agreement or
(ii) require that parties negotiate in good faith an appropriate extension or
other modification to the Capital Contributions to be made by TPR pursuant to
Section 2.2(a) and the distributions of Distributable Cash to the Members
pursuant to Article 7 of the LLC Agreement; provided, that if the parties have
not agreed to an appropriate extension or modification to the Capital
Contributions to be made by TPR pursuant to this Agreement and the distributions
of Distributable Cash to the Members pursuant to Article 7 of the LLC Agreement
within fifteen (15) days, then TPR may terminate this Agreement in accordance
with clause (i), above.

(c) Subject to Section 2.2(e), until the Working Capital Cut-Off Date, TPR shall
transfer to Services LLC, as Capital Contributions in addition to the TPR
Advance Contributions, the TPR Working Capital Contributions (i) in accordance
with the schedule set forth in the Initial Budget up to an aggregate amount not
to exceed Twelve Million Two Hundred Fifty Thousand Dollars ($12,250,000) (the
“Working Capital Cap”); provided, however, upon the request of Services LLC, TPR
shall advance TPR Working Capital Contributions in excess of the amount
scheduled in the Initial Budget, provided such excess TPR Working Capital
Contributions shall not exceed, at any time, the amount scheduled to be advanced
by TPR in the Initial Budget at such time by more than five hundred thousand
dollars ($500,000) and TPR’s obligation to advance TPR Working Capital
Contributions shall never exceed the Working

 

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Capital Cap, and (ii) for any TPR Working Capital Contributions in excess of the
Working Capital Cap, at such times as shall be determined by Supermajority Vote
of the Board of Managers in accordance with the LLC Agreement, but not to exceed
Two Million Dollars ($2,000,000) in the aggregate (each such Contribution
described in the foregoing clause (ii), a “TPR Additional Working Capital
Contribution”). Each TPR Additional Working Capital Contribution shall be made
as a loan to Services LLC in the principal amount of the TPR Additional Working
Capital Contribution (each a “TPR Working Capital Contribution Loan”). Each TPR
Working Capital Contribution Loan shall bear interest, compounded annually, at a
rate equal to LIBOR plus four hundred (400) basis points per annum. TPR Working
Capital Contribution Loans shall be payable by Services LLC upon demand by TPR
at any time after the date the TPR Working Capital Contribution Loan is made.
Each Contribution Loan (A) shall be recourse solely to Services LLC (and shall
be non-recourse to all other parties), (B) shall be unsecured, (C) shall be due
and payable in full upon dissolution, winding up and liquidation of Services
LLC, (D) may be voluntarily prepaid by Services LLC at any time and (E) shall be
prepaid on a first priority basis out of any subsequent distributions of
Distributable Cash to the Members in accordance with the LLC Agreement. All TPR
Working Capital Contributions made by TPR shall be made in cash or by wire
transfer of immediately available funds to an account designated in writing by
Services LLC.

(d) Notwithstanding anything contained herein to the contrary, upon the
occurrence of a NLC Regulatory Suspension Event at any time after the
satisfaction of the Initial Regulatory Funding Condition, then NLC shall have
the right to seek to cure, for a period of sixty (60) days from the occurrence
of such NLC Regulatory Suspension Event, the matter or matters giving rise to
such NLC Regulatory Suspension Event. If the NLC Regulatory Suspension Event
shall not have been cured by the conclusion of such sixty (60) day cure period,
then TPR may either (i) terminate this Agreement by providing NLC five (5) days
prior notice to NLC and exercise its rights to dissolve Services LLC in
accordance with Section 11.1.10 of the LLC Agreement or (ii) require that
parties negotiate in good faith an appropriate extension or other modification
to the Capital Contributions to be made by TPR pursuant to Section 2.2(a) and
(c) and the distributions of Distributable Cash to the Members pursuant to
Article 7 of the LLC Agreement; provided, that if the parties have not agreed to
an appropriate extension or modification to the Capital Contributions to be made
by TPR pursuant to this Agreement and the distributions of Distributable Cash to
the Members pursuant to Article 7 of the LLC Agreement within fifteen (15) days,
then TPR may terminate this Agreement in accordance with clause (i), above.

(e) Notwithstanding anything contained herein to the contrary, the obligation of
TPR to make each installment of the TPR Advance Contributions and each TPR
Working Capital Contribution in the amounts and on the dates set forth in this
Section 2.2 shall be suspended during (i) the period between July 1, 2010 and
October 31, 2010 when NLC has not satisfied the Initial Regulatory Funding
Condition and (ii) any period in which there shall have occurred an NLC
Regulatory Suspension Event. The obligation of TPR to make any further
installment of the TPR Advance Contributions or TPR Working Capital Contribution
shall not become effective again and resume until fifteen (15) days after such
time as (A) in the case of clause (i), above, NLC has satisfied the Initial
Regulatory Funding Condition or (B) in the case of clause (ii), above, the
events resulting in the NLC Regulatory Suspension Event has been cured or
otherwise ceased to exist.

 

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(f) Concurrently with the execution of this Agreement, in connection with the
formation of Services LLC, TPR shall enter into the LLC Agreement and shall
cause Penn Foster, Inc. to enter into the Penn Foster Services Agreement with
Services LLC.

(g) In consideration of the foregoing and of the other covenants made hereunder
and under the Related Agreements by TPR and Penn Foster, Inc., Services LLC will
issue to TPR concurrently with the execution of this Agreement a number of Units
equal to forty-nine percent (49%) of the Membership Interests of Services LLC,
having such management rights and rights to distributions as described in the
LLC Agreement.

Article III

Representations and Warranties of NLC

NLC represents and warrants to TPR and Services LLC as follows:

Section 3.1 Organization and Good Standing. NLC is a not-for-profit corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with all requisite corporate power and authority to carry on
the business in which it is engaged, to own the properties it owns and to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. NLC is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which the nature of
its business or the ownership of its assets makes such qualification necessary
and where the failure to be so qualified would have a material adverse effect on
NLC.

Section 3.2 Authorization and Validity. The execution, delivery and performance
by NLC of this Agreement and the Related Agreements to which it is a party, and
the consummation of the transactions contemplated hereby and thereby, have been
approved and duly authorized by the Board of Trustees of NLC and no other
corporate approvals are necessary to properly authorize such transactions. This
Agreement has been, and each of the Related Agreements to be executed by NLC
will be, duly executed and delivered by NLC and, assuming the due authorization,
execution and delivery thereof by TPR and Services LLC, as applicable,
constitutes (or will constitute) valid and binding obligations of NLC,
enforceable against NLC in accordance with their respective terms, subject to
the Enforceability Exceptions.

Section 3.3 Consents. Except as set forth on Schedule 3.3, no authorization,
consent, approval, permit or license of, or filing with, any Governmental
Authority or any other Person, excluding for purposes of this provision
Educational Agencies, is required to authorize, or is required in connection
with, the execution, delivery and performance of this Agreement, the Related
Agreements to which it is a party or any other agreements contemplated hereby or
thereby on the part of NLC.

Section 3.4 No Violation. Assuming receipt of the consents and approvals set
forth on Schedule 3.3, neither the execution and performance of this Agreement
and the Related Agreements to which NLC is a party, nor the consummation of the
transactions contemplated hereby or thereby will directly or indirectly (with or
without notice or lapse of time): (a) contravene, conflict with, or result in a
violation of (i) any provision of the Organizational Documents of NLC, or
(ii) any resolution adopted by the Board of Trustees of NLC; or (b)

 

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contravene, conflict with, or result in a violation or breach of any provision
of, or give any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate
or modify, any material contract to which NLC is a party. NLC is not in
violation of or in conflict with, in any material respect, any judgment, decree,
order, statute, rule, regulation, standard or policy of any Governmental
Authority having jurisdiction over NLC.

Section 3.5 Claims and Proceedings. No inquiry, action or proceeding has been
asserted, instituted, or, to the knowledge of NLC, threatened to restrain or
prohibit the carrying out of the transactions contemplated hereby or by any of
the Related Agreements or to challenge the validity of such transactions or any
part thereof or seeking damages on account thereof.

Section 3.6 Education Consents. (a) Except as set forth in Schedule 3.6(a), no
approval, consent, exemption, authorization, permit, order or other action by,
notice to, or registration, declaration, application or filing with, any
Educational Agency in respect of any Educational Law, and no lapse of waiting
period under any Educational Law, is necessary or required in connection with
the execution, delivery or performance by NLC, or enforcement against NLC, of
this Agreement or any of the Related Agreements, including, without limitation,
any Educational Approval necessary to maintain The National Labor College’s
eligibility to receive Title IV Program funds.

(b) There exists no fact, circumstance, act or omission with respect to the past
or present business, operation or financial condition of NLC or The National
Labor College that would reasonably be expected to have a material adverse
effect on: (a) the ability of NLC or The National Labor College to obtain any
authorization, consent or similar approval from any Educational Agency whose
authorization, consent, or similar approval is required for the consummation of
this Agreement or the Related Agreements or the operation of The National Labor
College; or (b) the terms of any such authorization, consent or similar
approval.

Section 3.7 Maintenance of Required Educational Approvals. NLC and The National
Labor College have received and maintained in full force and effect without
interruption since the Compliance Date all Educational Approvals necessary and
material to its operations, including but not limited to the recruitment of
students, the offering of each of The National Labor College’s educational
programs, and participation in all Financial Assistance programs. Without
limiting the foregoing, since the Compliance Date, NLC and The National Labor
College, as applicable: (i) has been accredited by MSA; (ii) has been duly
licensed or approved to the full extent required by any Educational Agency,
including but not limited to MHEC; and (iii) has been eligible for participation
in the Title IV Programs and has been approved by the U.S. DOE for that purpose.
NLC has posted each bond required for education licensure in each state where
required, and such bond remains in full force and effect.

Section 3.8 Restrictions or Conditions on Educational Approvals. Except as set
forth on Schedule 3.8, no Educational Approval for The National Labor College is
subject to any restriction or condition that limits or would reasonably be
expected to limit in any material way the full operation of The National Labor
College as presently operated, including without limitation any restriction on
the addition of locations or programs or size or growth of enrollment, except
for requirements for notice to or approval by an Educational Agency that are

 

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generally applicable to and routinely required for all postsecondary education
institutions. Except as set forth on Schedule 3.8, no Educational Approval for
The National Labor College is subject to any pending or threatened proceeding to
limit, condition, suspend, revoke, terminate, or cancel such Educational
Approval or to declare such Educational Approval invalid (including any
proceeding by an Educational Agency to place The National Labor College on
probation or require The National Labor College to “show cause” why an
Educational Approval should not be withdrawn). Except as set forth on Schedule
3.8, there exists no fact, circumstance, act or omission with respect to the
present or prospective business, operations or financial condition of NLC or The
National Labor College that could serve as a basis to revoke, deny, withdraw,
terminate, suspend, condition or limit any Educational Approval for The National
Labor College.

Section 3.9 Renewals of Educational Approvals. Since the Compliance Date, The
National Labor College has timely filed with the relevant Educational Agency
each application required for the renewal of any Educational Approval as to
which the renewal deadline has occurred. Neither NLC, any of its Subsidiaries,
nor the National Labor College has received notice that any such Educational
Approval will not be renewed, or that any Educational Approval will be renewed
with material limitations, and to the knowledge of NLC, there is no basis for
non-renewal of any Education Approval. The National Labor College has duly given
each notice or made each filing required to have been given or made to each
Educational Agency with respect to any Educational Approval, and no request for
approval of any change in any Educational Approval is pending other than
requests for approvals pending at the time of signing.

Section 3.10 Compliance with Educational Approvals and Laws. NLC and The
National Labor College are, and since the Compliance Date have been, in material
compliance with all Educational Approvals and all applicable Educational Laws,
including but not limited to Title IV, the regulations implementing Title IV,
and any Educational Laws administered by any Educational Agency, including all
Educational Laws necessary to The National Labor College’s students’ access to
Financial Assistance.

Section 3.11 Education Claims. Neither NLC nor The National Labor College has,
since the Compliance Date, received any notice or other communication (in
writing or otherwise) from an Educational Agency or any other Person regarding
any actual, alleged, possible or potential violation of or failure to comply
with (a) any term or requirement of any Educational Approval, including but not
limited any program participation agreement relating to Financial Assistance to
which The National Labor College is or was a party, or (b) any Educational Law,
including but not limited to Title IV. There does not exist any threatened or
pending investigation, audit, review, site visit, or survey by any Educational
Agency with respect to any Educational Approval or NLC’s or The National Labor
College’s compliance with any Educational Law other than such investigations,
audits, reviews, site visits, or surveys related to applications for new
Educational Approvals or maintenance of existing Educational Approvals.

Section 3.12 Title IV Institutional Certification. The National Labor College
is, and since the Compliance Date has been, fully or provisionally certified by
the U.S. DOE as an eligible “institution of higher education” under 34 C.F.R.
§ 600.4, under the Title IV Programs. The National Labor College is, and since
the Compliance Date has been, a party to, and in compliance with, a valid
program participation agreement with the U.S. DOE respecting its

 

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participation in the Title IV Programs. Since the Compliance Date, The National
Labor College’s program participation agreement with the U.S. DOE respecting its
participation in the Title IV Programs has contained no conditions or
limitations other than those set forth in the program participation agreement
attached as Schedule 3.12, that was effective April 2, 2009. The National Labor
College currently holds a valid Eligibility and Certification Approval Report
attesting to its Title IV Program eligibility.

Section 3.13 Program Eligibility. Since the Compliance Date, each education
program offered by The National Labor College for which it has provided Title IV
Program funding has been an “eligible program” as described by 34 C.F.R. §
668.8.

Section 3.14 Location Approvals. Since the Compliance Date, The National Labor
College has possessed the U.S. DOE approvals necessary for each location at
which The National Labor College has offered all or part of an educational
program and at which students in such an educational program have received funds
under the Title IV Programs pursuant to The National Labor College’s Program
Participation Agreement.

Section 3.15 Control Matters. No Person who exercises substantial control over
The National Labor College (as the term “substantial control” is defined at 34
C.F.R. § 668.174(c)(3)) owes a liability for a violation of any requirements of
the Title IV Programs or exercises, or since the Compliance Date has exercised,
substantial control over another postsecondary educational institution other
than The National Labor College (whether or not participating in the Title IV
Programs) or any third-party servicer (as that term is defined at 34 C.F.R. §
668.2) that owes a liability for a violation of any requirements of the Title IV
Programs. Neither NLC, The National Labor College nor any Person who exercises,
or since the Compliance Date has exercised, substantial control over The
National Labor College (as the term “substantial control” is defined at 34
C.F.R. § 668.174(c)(3)) has pled guilty to, has pled nolo contendere to, or has
been found guilty of, a crime involving the acquisition, use or expenditure of
funds under the Title IV Programs or has been judicially determined to have
committed fraud involving funds under the Title IV Programs.

Section 3.16 Employees/Contractors. Since the Compliance Date, the National
Labor College has not knowingly employed in a capacity that involves the
administration of Title IV Programs or the receipt of funds under those
programs, any individual who has been convicted of, or has pled nolo contendere
or guilty to, a crime involving the acquisition, use or expenditure of federal,
state, or local government funds, or has been administratively or judicially
determined to have committed fraud or any other material violation of law
involving federal, state, or local government funds. Since the Compliance Date,
The National Labor College has not knowingly contracted with an institution or
third-party servicer (as such term is defined in 34 C.F.R. § 668.2) that has
been terminated under the Title IV Programs for a reason involving the
acquisition, use, or expenditure of federal, state or local government funds, or
that has been administratively or judicially determined to have committed fraud
or any other material violation of law involving federal, state or local
government funds. Since the Compliance Date, The National Labor College has not
knowingly contracted with or employed any individual, agency, or organization
that has been, or whose officers or employees have been, convicted of, or pled
nolo contendere or guilty to, a crime involving the acquisition, use, or
expenditure of federal, state or local government funds or that has been
administratively or judicially determined to have committed fraud or any other
material violation of law involving federal, state, or local government funds.

 

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Section 3.17 Officers and Directors. Since the Compliance Date, neither NLC, nor
The National Labor College, nor The National Labor College’s chief executive
officer, nor, to the knowledge of NLC, any of NLC’s officers or directors has
pled nolo contendere to, or has been found guilty of, a crime involving the
acquisition, use, or expenditure of funds under the Title IV Programs or has
been judicially determined to have committed fraud involving funds under the
Title IV Programs.

Section 3.18 Bankruptcy. Since the Compliance Date, neither NLC, the National
Labor College, nor their Subsidiaries, or to the knowledge of NLC, any Affiliate
of NLC, any Subsidiary, or The National Labor College that has the power, by
contract or by ownership interest or otherwise, to direct or cause the direction
of management policies of NLC or The National Labor College, has filed for
relief in bankruptcy or had entered against it an order for relief in
bankruptcy.

Section 3.19 Common Administration of Postsecondary Institution or Third-Party
Servicer. No postsecondary institution (whether or not participating in the
Title IV Programs) or any third-party servicer (as such term is defined in 34
C.F.R. § 668.2) is, or, since the Compliance Date has been, administered
commonly, jointly or in conjunction with The National Labor College. Other than
pursuant to the National Labor College’s articulation agreements, academic
partner agreements, and affiliate partner agreements, no other institution or
organization of any sort provides, or, since the Compliance Date has provided,
any educational instruction on behalf of the National Labor College. Other than
pursuant to the National Labor College’s articulation agreements, academic
partner agreements, and affiliate partner agreements, the National Labor College
does not provide, or since the Compliance Date, has not provided, any
educational instruction on behalf of any other institution or organization of
any sort.

Section 3.20 Debarred or Suspended Principals or Affiliates. Since the
Compliance Date, the National Labor College has not been or had any principal or
affiliate (as those terms are defined in 34 C.F.R. part 85) that is, debarred or
suspended under Executive Order (E.O.) 12549 (3 C.F.R., 1986 Comp., p. 189) or
the Federal Acquisition Regulations (FAR), 48 C.F.R. part 9, subpart 9.4, or
engaging in any activity that is cause under 34 C.F.R. § 85.305 or § 85.405 for
debarment or suspension under E.O. 12549 (3 C.F.R., Comp., p. 189) or the FAR,
48 C.F.R. part 9, subpart 9.4.

Section 3.21 Financial Responsibility. Since the Compliance Date, The National
Labor College has satisfied the standards of financial responsibility set forth
in 34 C.F.R. § 668.15 and 34 C.F.R. 668, Subpart L, as applicable, and similar
standards of each Educational Agency that licenses, accredits, or otherwise
regulates the National Labor College. The National Labor College’s composite
score, as calculated by the U.S. DOE pursuant to 34 C.F.R. § 668.172 and 34
C.F.R. Part 668, Subpart L, Appendix A for the fiscal year ending June 30, 2008,
was 1.0 (“FY2008 Composite Score”). Except as set forth in Schedule 3.22, since
the Compliance Date, neither NLC nor the National Labor College (a) has received
notice from the U.S. DOE or any other Educational Agency that NLC or the
National Labor College lacked financial responsibility

 

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or administrative capability for any period under the Educational Laws or
standards in effect in such period, (b) been required to post a letter of credit
or other form of surety for any reason, including any request for a letter of
credit based on late refunds pursuant to 34 C.F.R. § 668.173, 34 C.F.R. §
668.15, or any predecessor regulation, or (c) been placed by the U.S. DOE on
either the cash monitoring or the reimbursement payment method with respect to
its receipt of Title IV Program funds.

Section 3.22 Refunds. NLC and each of its Subsidiaries and The National Labor
College have been, since the Compliance Date, in compliance in all material
respects with U.S. DOE regulations relating to (a) the implementation of a fair
and equitable refund policy and (b) implementation of the U.S. DOE’s “return of
Title IV funds” requirements. Since the Compliance Date, the National Labor
College has calculated and paid refunds or returns in accordance in all material
respects as required under 34 C.F.R. 668.22 or otherwise required by any
Educational Law.

Section 3.23 Incentive Payments for Recruiting/Admissions: Since the Compliance
Date, the National Labor College has complied with the Title IV Program
requirements set forth at 20 U.S.C. § 1094(a)(20), and the U.S. DOE’s
implementing regulations set forth at 34 C.F.R. § 668.14(b)(22), concerning the
payment of commissions, bonuses or other incentive payments to admissions
representatives, agents, or other Persons engaged in any student recruiting,
admissions, or other enrollment-related activities, or in the making of
decisions regarding the awarding of Title IV Program funds for or on behalf of
the National Labor College.

Section 3.24 Third-Party Servicers. To the knowledge of NLC, each third-party
servicer with which NLC has contracted to assist with administration of any
Financial Assistance program has administered such Financial Assistance program
in accordance, in all material respects, with its terms. There is no pending or,
to the knowledge of NLC, threatened claim by any Educational Agency or other
Person that administers any Financial Assistance program that any third-party
servicer has failed to comply with any requirement of any Financial Assistance
program.

Section 3.25 Required Filings. Since the Compliance Date, The National Labor
College has timely filed all compliance audits and audited financial statements
required by 34 C.F.R. § 668.23. NLC, each of its Subsidiaries, and The National
Labor College have submitted all material notices, reports, financial
statements, compliance or other audits, and other information, whether periodic
in nature or pursuant to specific requests, for NLC, any of its Subsidiaries,
and The National Labor College to all Education Agencies with which such filings
are required relating to its compliance with applicable Educational Laws.

Section 3.26 Government Investigations. NLC has received no notification that
either NLC, The National Labor College, or any officers or senior administrator
of The National Labor College is subject to a criminal investigation related to
the operations of The National Labor College, including but not limited to any
criminal investigation initiated by the U.S. DOE Office of the Inspector
General, the U.S. Department of Justice, a grand jury, or any state agency.

 

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Article IV

Representations of TPR

TPR represents and warrants to NLC and Services LLC as follows:

Section 4.1 Organization and Good Standing. TPR is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with all requisite corporate power and authority to carry on the business in
which it is engaged, to own the properties it owns and to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
TPR is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of its business or the
ownership of its assets makes such qualification necessary and where the failure
to be so qualified would have a material adverse effect on TPR.

Section 4.2 Authorization and Validity. The execution, delivery and performance
by TPR of this Agreement and the Related Agreements to which it is a party and
the consummation of the transactions contemplated hereby and thereby, have been
duly authorized by the Board of Directors of TPR and no other corporate
approvals are necessary to properly authorize such transactions. This Agreement
has been, and each of the Related Agreements to be executed by TPR will be, duly
executed and delivered by TPR and, assuming the due authorization, execution and
delivery thereof by NLC and Services LLC, as applicable, constitutes (or will
constitute) valid and binding obligations of TPR enforceable against TPR in
accordance with their respective terms, subject to the Enforceability
Exceptions.

Section 4.3 Consents. Except as set forth on Schedule 4.3, no authorization,
consent, approval, permit or license of, or filing with, any Governmental
Authority, Educational Agency or any other Person is required to authorize, or
is required in connection with, the execution, delivery and performance of this
Agreement, the Related Agreements to which it is a party or any other agreements
contemplated hereby or thereby on the part of TPR.

Section 4.4 No Violation. Assuming receipt of the consents and approvals set
forth on Schedule 4.3, neither the execution and performance of this Agreement
and the Related Agreements to which TPR is a party, nor the consummation of the
transactions contemplated hereby and thereby, will directly or indirectly (with
or without notice or lapse of time) (a) contravene, conflict with, or result in
a violation of (i) any provision of the Organizational Documents of TPR, or
(ii) any resolution adopted by the Board of Directors of TPR; or (b) contravene,
conflict with, or result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate or modify,
any material contract to which TPR is a party. Neither TPR nor Penn Foster is in
violation of or in conflict with, in any material respect, any judgment, decree,
order, statute, rule, regulation, standard or policy of any Governmental
Authority or Educational Agency having jurisdiction over TPR or Penn Foster.

Section 4.5 Claims and Proceedings. No inquiry, action or proceeding has been
asserted, instituted, or, to the knowledge of TPR, threatened to restrain or
prohibit the carrying out of the transactions contemplated hereby or by any of
the Related Agreements or to challenge the validity of such transactions or any
part thereof or seeking damages on account thereof.

 

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Section 4.6 Contractor Status. Neither TPR nor Penn Foster has been terminated
under the Title IV Programs for a reason involving the acquisition, use, or
expenditure of federal, state or local government funds, or has been
administratively or judicially determined to have committed fraud or any other
material violation of law involving federal, state or local government funds.
Since the Compliance Date, neither TPR nor Penn Foster has knowingly contracted
with or employed any individual, agency, or organization that has been, or whose
officers or employees have been, convicted of, or pled nolo contendere or guilty
to, a crime involving the acquisition, use, or expenditure of federal, state or
local government funds or that has been administratively or judicially
determined to have committed fraud or any other material violation of law
involving federal, state, or local government funds.

Section 4.7 Debarred or Suspended Principals or Affiliates. Since the Compliance
Date, neither TPR nor Penn Foster has been or had any principal or affiliate (as
those terms are defined in 34 C.F.R. part 85) that is, debarred or suspended
under Executive Order (E.O.) 12549 (3 C.F.R., 1986 Comp., p. 189) or the Federal
Acquisition Regulations (FAR), 48 C.F.R. part 9, subpart 9.4, or engaging in any
activity that is cause under 34 C.F.R. § 85.305 or § 85.405 for debarment or
suspension under E.O. 12549 (3 C.F.R., Comp., p. 189) or the FAR, 48 C.F.R. part
9, subpart 9.4.

Section 4.8 Title IV Debts. None of Penn Foster, TPR or any Affiliate, or any
officer or director of Penn Foster or TPR (i) owe a liability for a violation of
a Title IV Program requirement, or (ii) exercise or have exercised substantial
control over another educational institution or third-party servicer that owes a
liability for a violation of a Title IV Program requirement.

Article V

Deliveries by NLC and Services LLC

Section 5.1 Deliveries by NLC. Concurrently with the execution of this Agreement
NLC shall deliver the following documents to TPR or Services LLC, as set forth
below, each in form and substance reasonably satisfactory to TPR:

(A) Consents. NLC will deliver all third party consents set forth on Schedule
3.3 to TPR and Services LLC;

(B) NLC Payments Agreement. NLC will deliver to TPR and Services LLC a
counterpart signature page to the NLC Payments Agreement duly executed by an
authorized officer of NLC;

(C) Services LLC Services Agreement. NLC will deliver to TPR and Services LLC a
counterpart signature page to the Services LLC Services Agreement duly executed
by an authorized officer of NLC;

 

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(D) NLC License Agreement. NLC will deliver to TPR and Services LLC a
counterpart signature page to the NLC License Agreement duly executed by an
authorized officer of NLC;

(E) AFL-CIO License Agreement. NLC will deliver to TPR and Services LLC
counterpart signature pages to the AFL-CIO License Agreement duly executed by an
authorized officer of each of NLC and the AFL-CIO;

(F) LLC Agreement. NLC will deliver to TPR and Services LLC a counterpart
signature page to the LLC Agreement duly executed by an authorized officer of
NLC;

(G) Other Documents. NLC will deliver to Services LLC and TPR such other
documents and instruments as TPR or Services LLC may reasonably require in order
to effectuate the transactions that are the subject of this Agreement and the
Related Agreements.

Section 5.2 Deliveries by Services LLC. Concurrently with the execution of this
Agreement, Services LLC shall deliver the following to NLC and TPR:

(A) NLC Payments Agreement. A counterpart signature page to the NLC Payments
Agreement duly executed by an authorized officer of Services LLC;

(B) Services LLC Services Agreement. A counterpart signature page to the
Services LLC Services Agreement duly executed by an authorized officer of
Services LLC;

(C) NLC License Agreement. A counterpart signature page to the NLC License
Agreement duly executed by an authorized officer of Services LLC;

(D) Penn Foster Services Agreement. A counterpart signature page to the Penn
Foster Services Agreement duly executed by an authorized officer of Services
LLC; and

(E) Certificate of Formation. A copy of the Certificate of Formation of Services
LLC certified by the Delaware Secretary of State.

(F) LLC Agreement. A counterpart signature page to the LLC Agreement duly
executed by an authorized officer of Services LLC;

(G) Union Privilege Marketing Agreement. Services LLC will deliver to NLC and
TPR counterpart signature pages to the Union Privilege Marketing Agreement duly
executed by an authorized officer of each of Union Privilege and Services LLC;
and

(H) Other Documents. Such other documents and instruments as TPR may reasonably
require in order to effectuate the transactions that are the subject of this
Agreement.

 

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Article VI

Deliveries by TPR

Section 6.1 Deliveries by TPR. Concurrently with the execution of this
Agreement, TPR shall deliver the following to NLC or Services LLC, as
applicable, each in form and substance reasonably satisfactory to NLC:

(A) Capital Contributions. TPR will deliver the first installment payment of the
TPR Advance Contribution due to Services LLC on the date hereof in accordance
with Section 2.2(a), and the amount of the TPR Working Capital Contributions due
on the date hereof in accordance with Section 2.2(c);

(B) Consents. TPR will deliver all third party consents set forth on Schedule
4.3 to NLC and Services LLC;

(C) Penn Foster Services Agreement. TPR will cause Penn Foster, Inc. to deliver
to NLC and Services LLC a counterpart signature page to the Penn Foster Services
Agreement duly executed by an authorized officer of Penn Foster, Inc.;

(D) LLC Agreement. TPR will deliver to NLC a counterpart signature page to the
LLC Agreement duly executed by an authorized officer of TPR; and

(E) Other Documents. TPR will deliver to NLC and Services LLC such other
documents and instruments as NLC may reasonably require in order to effectuate
the transactions that are the subject of this Agreement.

Article VII

Additional Covenants

Section 7.1 Further Assurances.

(a) NLC hereby covenants and agrees that NLC shall execute and deliver to TPR
and Services LLC all such consents, approvals, agreements and contracts and any
other documents, and NLC shall reasonably cooperate with TPR and Services LLC
and do all such other things, as may be reasonably necessary to carry out any of
the provisions of this Agreement or the Related Agreements, in each case as
reasonably requested by TPR or Services LLC.

(b) TPR hereby covenants and agrees that TPR shall execute and deliver to NLC
and Services LLC all such consents, approvals, agreements and contracts and any
other documents, and TPR shall reasonably cooperate with NLC and Services LLC
and do all such other things, as may be reasonably necessary to carry out any of
the provisions of this Agreement or the Related Agreements, in each case as
reasonably requested by NLC or Services LLC.

Article VIII

Indemnification

Section 8.1 NLC’s Indemnification Obligation. NLC shall indemnify and hold each
of TPR and Services LLC, and each of their respective directors, members,
managers, trustees, officers, employees, agents and Affiliates, harmless against
and from all losses, claims, damages, expenses or liabilities sustained,
suffered or incurred by each and all of them, as a result of or arising out of
any breach of any representation or warranty made by NLC in this Agreement.

 

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Section 8.2 TPR’s Indemnification Obligation. TPR shall indemnify and hold each
of NLC and Services LLC, and each of their respective directors, members,
managers, trustees, officers, employees, agents and Affiliates, harmless against
and from all losses, claims, damages, expenses or liabilities sustained,
suffered or incurred by each and all of them, as a result of any breach of any
representation or warranty made by TPR in this Agreement.

Section 8.3 Consequential Damages Limitation. NOTWITHSTANDING THE FOREGOING
INDEMNITY, NEITHER TPR NOR NLC SHALL BE LIABLE FOR ANY LOST OR PROSPECTIVE
PROFITS AND IN NO EVENT SHALL EITHER TPR OR NLC BE LIABLE FOR ANY OTHER SPECIAL,
PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES (IN
TORT, CONTRACT OR OTHERWISE) UNDER OR IN RESPECT TO THIS AGREEMENT OR FOR ANY
FAILURE OF PERFORMANCE RELATED HERETO, HOWSOEVER CAUSED.

Article IX

Miscellaneous

Section 9.1 Dispute Resolution. In the event of any controversy or claim,
whether based on contract, tort, statute, or other legal or equitable theory
(including any claim of fraud, misrepresentation, or fraudulent inducement),
arising out of or related to this Agreement, such dispute shall be subject to
the dispute resolution procedures set forth in Section 13.1 of the LLC
Agreement.

Section 9.2 Amendment and Waiver. No provision of this Agreement may be amended,
modified, supplemented or waived except by an instrument in writing executed by
all of the parties hereto or, in the case of an asserted waiver, executed by the
party against which enforcement of the waiver is sought.

Section 9.3 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly signed or made
as of the date delivered if delivered personally or by overnight courier, when
confirmed by telephone if delivered by facsimile, when confirmed by telephone or
by response e-mail if delivered by electronic transmission or three (3) Business
Days after being mailed by registered or certified mail (postage prepaid, return
receipt requested), to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice, except that notices of
changes of address shall be effective upon receipt):

if to NLC:

 

The National Labor College

10000 New Hampshire Avenue

Silver Spring, Maryland 20903

Telephone:    (301) 431-5454 Facsimile:    (301) 628-0162 Email:   
jgentile@nlc.edu Attention:    Jim Gentile, General Counsel

 

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if to TPR:

 

The Princeton Review, Inc. 111 Speen Street, Suite 550
Framingham, Massachusetts 01701 Telephone:    (508) 663-5081 Facsimile:    (508)
663-5115 Email:    nwinneg@review.com Attention:    Neal Winneg, General Counsel

if to Services LLC:

 

NLC-TPR Services, LLC 10000 New Hampshire Avenue Silver Spring, Maryland 20903
Attention:    Chief Technology Offer/Chief Operating Officer

 

With copy to: The Princeton Review, Inc. 111 Speen Street, Suite 550 Framingham,
Massachusetts 01701 Telephone:    (508) 663-5081 Facsimile:    (508) 663-5115
Email:    nwinneg@review.com Attention:    Neal Winneg, General Counsel and:   
The National Labor College 10000 New Hampshire Avenue Silver Spring, Maryland
20903 Telephone:    (301) 431-5454 Facsimile:    (301) 628-0162 Email:   
jgentile@nlc.edu Attention:    Jim Gentile, General Counsel

Section 9.4 Entire Agreement. This Agreement and the Related Agreements
represent the entire understanding of the parties with reference to the matters
set forth herein and therein. This Agreement and the Related Agreements
supersede all prior negotiations, discussions, correspondence, communications
and prior agreements among the parties relating to the subject matter herein and
therein.

 

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Section 9.5 Use of Language. For purposes of this Agreement (including any
related schedules or exhibits), except as otherwise expressly provided: (a) the
terms defined in this Agreement include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) references in this Agreement to “Sections,” “subsections,” “paragraphs” and
other subdivisions without reference to a document are to designated Sections,
subsections, paragraphs and other subdivisions of this Agreement; (c) the words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not, unless specifically provided, to any particular
provision; and (d) the words “e.g.,” “include,” “includes,” “including” and
other words of similar import are deemed to be followed by “without limitation”
or “but not limited to” whether or not they are in fact followed by such words
or words of like import.

Section 9.6 Governing Law. THIS AGREEMENT IS GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND THE DELAWARE
LIMITED LIABILITY COMPANY ACT, DELAWARE CODE, TITLE 6, SECTIONS 18-101, ET SEQ.
AS IN EFFECT FROM TIME TO TIME, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF DELAWARE.

Section 9.7 Amendment. This Agreement may be amended, and any provisions hereof
may be waived, only by the prior written consent of each party.

Section 9.8 No Third Party Beneficiaries. Except for the provisions of Article
VIII, this Agreement is not intended to, and shall not be construed to, create
any right enforceable by any Person not a party hereto, including any creditor
of any party hereto.

Section 9.9 Headings. The headings in this Agreement are for convenience only
and are in no way intended to describe, interpret, define or limit the scope,
extent or intent of this Agreement or any of its provisions.

Section 9.10 Waivers. The failure of any party to seek redress for violation of
or to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, that would have originally
constituted a violation, from having the effect of an original violation.

Section 9.11 Rights and Remedies Cumulative. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive the right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.

Section 9.12 Severability. If any provision of this Agreement or portion
thereof, or the application of such provision or portion thereof to any person
or circumstance, shall be held invalid, the remainder of this Agreement, or the
application of such provision or portion thereof to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.

 

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Section 9.13 Successors and Assigns. Each and all of the covenants, terms,
provisions, and agreements contained in this Agreement shall be binding upon and
inure to the benefit of the parties hereto and, to the extent permitted by this
Agreement, their respective successors and assigns. No party may assign this
Agreement (by operation of law or otherwise) to any Person.

Section 9.14 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission or by means of portable document format
(pdf) transmission) in two or more counterparts, and by the different parties
hereto in separate counterparts, each of which shall be deemed to be an original
but all of which together shall be deemed to be one and the same instrument.

Section 9.15 Termination. This Agreement shall terminate, and neither NLC nor
TPR shall have any further obligation hereunder, upon the occurrence of:

(a) the termination of the LLC Agreement or the dissolution of Services LLC
pursuant to the LLC Agreement;

(b) the consummation of the sale of TPR’s Membership Interests pursuant to
Section 10.3.6 of the LLC Agreement; or

(c) the issuance of the Put Notice by TPR pursuant to Section 10.8.3 of the LLC
Agreement.

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement as of the date first above written.

 

THE NATIONAL LABOR COLLEGE

By:

 

/s/ Paula E. Peinovich

 

Name:

  Paula E. Peinovich  

Title:

  Interim President

THE PRINCETON REVIEW, INC.

By:

 

/s/ Stephen C. Richards

 

Name:

  Stephen C. Richards  

Title:

  Chief Operating Officer and Chief Financial Officer

NLC-TPR SERVICES, LLC

By:

 

/s/ Stuart J. Udell

 

Name:

  Stuart J. Udell  

Title:

  President