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Advantage Learning Systems, Inc.

Exhibit 10.2 - Tax Indemnification Agreement dated as of August 29, 1997
               between Terrance Paul, Judith Paul, Mark J. Bradley as Trustee
               of the Terrance and Judith Paul Descendants' Trust, and The
               Institute for Academic Excellence, Inc.


                        TAX INDEMNIFICATION AGREEMENT
                                      
                                      

     THIS TAX INDEMNIFICATION AGREEMENT, dated as of this 29th day of August,
1997, is entered into by Institute for Academic Excellence, Inc., a Wisconsin
corporation (the "Company"), and Judith A. Paul, Terrance D. Paul and Mark J.
Bradley, as Trustee of the Terrance and Judith Paul Descendants' Trust
(individually, a "Stockholder" and collectively, the "Stockholders");

                                  RECITALS:

     WHEREAS, the Stockholders held all of the outstanding shares of the
Company's Common Stock, par value $.01 per share (the "Common Stock") prior to
January 2,1997.

     WHEREAS, the Company has elected to be taxed as an S corporation under the
Code.

     WHEREAS, the Company's parent, Advantage Learning Systems, Inc., is now
contemplating offering and selling shares of its Common Stock to the public
(the "Public Offering").

     WHEREAS, the Company plans, just prior to the completion of the Public
Offering, to terminate its S corporation election.

     WHEREAS, after the termination of the Company's S corporation election,
the Stockholders individually will continue to be liable for federal, state,
and local income taxes on the Company's Tax Items that pass through to the
Stockholders under the provisions of Subchapter S of the Code and any similar
provisions of state and local law for all periods prior to the time the Company
ceases to be an S corporation.

     NOW, THEREFORE, for good and valuable consideration, the receipt and legal
sufficiency of which hereby are acknowledged, the parties agree as follows:

                                  Article I

                                   PURPOSE

     The purpose of this Agreement is to set forth the agreement of the Company
and its Stockholders with respect to certain adjustments to the federal, state
and local personal income tax liability of the Stockholders attributable to the
Tax Items of the Company that pass through to the Stockholders under the
provisions of Subchapter S of the Code and any similar provisions of state and
local law for periods during which the Company is an S Corporation, which
adjustments arise after the termination of the Company's S election.

                                  Article II

                                 DEFINITIONS

     Section 2.1   For purposes of this Agreement, the following definitions
shall apply:

     (a)  "Adjustment" shall mean any proposed or final change in any S
Corporation Tax Liability initiated by the IRS, state or local taxing authority
or any other relevant taxing authority or as a result of the filing of an
amended return for the Company.




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     (b)  "Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect for the taxable period in question.

     (c)  "Final Determination" shall mean the final resolution of any Income
Tax liability (including all related interest and penalties) for a taxable
period.  A Final Determination shall result from the first to occur of:

          (i) the expiration of thirty (30) days after IRS acceptance of a      
     Waiver, unless, within such period, the taxpayer gives notice to the other
     party of the taxpayer's intention to attempt to recover all or part of any
     amount paid pursuant to the Waiver by the filing of a timely claim for
     refund;

          (ii) a decision, judgment, decree or other order by a court of        
     competent jurisdiction that is not subject to further judicial review (by
     appeal or otherwise) and has become final;

          (iii) the execution of a closing agreement under Section 7121 of the
     Code or the acceptance by the IRS or its counsel of an offer in compromise
     under Section 7122 of the Code or comparable agreements under the laws of
     other jurisdictions;

          (iv) the expiration of the time for filing a claim for refund or for
     instituting suit in respect of a claim for refund disallowed in whole or
     part by the IRS or other relevant taxing authority;

          (v)  any other final disposition of the Income Tax liability for such
     period by reason of the expiration of the applicable statute of
     limitations; or

          (vi) any other event that the parties agree is a determination of the
     liability at issue, including the filing of an amended return.

     (d)  "Income Tax" shall mean federal income taxes and state and local taxes
imposed upon, or measured by, income.  Income Tax includes interest, penalties,
additions to tax and additional amounts and any related reasonable professional
fees and costs or other expenses.

     (e)  "IRS" shall mean the United States Internal Revenue Service or any
successor, including, but not limited to, its agents, representatives and
attorneys.

     (f)  "Pro Rata Share" shall mean each Stockholder's proportionate share of
Common Stock owned on the relevant date or held during the relevant period,
which proportionate share shall be a fraction, the numerator of which is the
number of shares of Common Stock held by the Stockholder on the relevant date
or during the relevant period and the denominator of which is the number of
shares of Common Stock held by all Stockholders as of the relevant date or
during the relevant period.

     (g)  "S Corporation" shall mean an S Corporation within the meaning of
Section 1361 of the Code.

     (h)  "S Corporation Tax Liability" shall mean the personal Income Tax
liability of a Stockholder for Income Taxes attributable to (a) the Company's
Tax Items that pass through to the Stockholder under the provisions of
Subchapter S of the Code and any similar provisions of state and local law. or
(b) a Stockholder's receipt of indemnity payments hereunder.

     (i)  "Tax Benefit" shall mean a reduction in the personal Income Tax
liability of a Stockholder (as a result of Tax Items of the Company and all
other Tax Items reflected on the Stockholder's tax return) for any taxable
period and any interest paid in connection therewith by the relevant taxing
authority.  The Stockholder shall be deemed to have realized or received a Tax
Benefit from a Tax Item in a taxable period only if and to the extent that the
Stockholder's personal Income Tax liability for such period is less than it
would have been if such liability were determined without regard to such Tax
Item.  The Stockholder shall be deemed to have realized or received a Tax
Benefit with respect to a carryover only if, when and to the extent the
carryover is used to produce a Tax Benefit.

     (j)  "Tax Item" shall mean any item of income, gain, loss, deduction,
credit, recapture of credit, or any other item which increases or decreases
Income Taxes paid or payable by the Stockholder (when the Company is an S
Corporation) or by the Company.



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     (k)  "Waiver" shall mean a Waiver of Restrictions on Assessment and
Collection of Deficiency in Tax and Acceptance of Overassessment on Federal
Revenue Form 870 or 870-AD (or any successor comparable form or the expiration
of a comparable period with respect to any comparable agreement or form under
the laws of other jurisdictions).

                                      
                                 Article III
                                      
                      INDEMNIFICATION FOR CERTAIN TAXES

     Section 3.1   Each Stockholder severally, but not jointly, shall pay to the
Company an amount equal to any Tax Benefit realized or received by such
Stockholder arising from an Adjustment with respect to a Tax Item of the
Company for any taxable period in which the Company was taxable as an S
Corporation to the extent such Adjustment would reduce the Accumulated
Adjustments Account (the "AAA") below the amount determined as of the last day
of the short S year ending in 1997 for purposes of distributing cash to the
Shareholders in connection with the Public Offering (ignoring any
post-termination distributions to Stockholders).

     Section 3.2   The Company shall pay and indemnify the Stockholders for
any S Corporation Tax Liability arising from an Adjustment with respect to a
Tax Item of the Company to the extent such Adjustment would increase the AAA
above the amount determined as of the last day of the short S year ending in
1997 for purposes of distributing cash to the Shareholders in connection with
the Public Offering (ignoring any post-termination distributions to
Stockholders).

     Section 3.3   Any payment required under this Article II shall be made by
the earlier of (i) thirty (30) days after a Stockholder receives a refund or
credit, (ii) thirty (30) days after a Final Determination with respect to such
tax, (iii) with respect to a carry over, thirty (30) days after a Stockholder
files a tax return on which the carryover produces a Tax Benefit, or (iv)
thirty (30) days after the determination by the parties or pursuant to Article
IV that such payment is due.


                                  Article IV

                   COOPERATION AND EXCHANGE OF INFORMATION

     Section 4.1   Whenever any Stockholder or the Company becomes aware of an
issue which it believes gives rise to payment or indemnification from the other
party under Article III, the Stockholder or the Company (as the case may be)
shall promptly give notice of the issue to the other party.  The Company shall
provide copies of any such notice it gives or receives under this Section 4.1
to each of the Stockholders within ten (10) days after giving or receiving such
notice.  The indemnitor and its representatives, at the indemnitor's expense,
shall be entitled to participate in all conferences, meetings or proceedings
with the IRS or other taxing authority with respect to the issue.  If the
indemnitor is more than one Stockholder, the Stockholders liable to provide
such indemnification shall agree among themselves upon one representative to
participate in such conferences, meetings and proceedings with the Company, the
IRS or the applicable taxing authority.

     Section 4.2   The parties agree to consult and cooperate with each other in
the negotiation and settlement or litigation of any Adjustment that may give
rise to any payment or an indemnification obligation under this Agreement.  All
decisions with respect to such negotiation and settlement or litigation shall
be made by the parties after full, good faith consultation or pursuant to the
dispute resolution provisions set forth in Article V hereof.  No such
representative of the Stockholders shall be permitted to settle any litigation
or agree to any Adjustment or indemnification payment without the prior consent
of the Stockholders whose combined Pro Rata Shares exceed fifty percent (50%)
of the outstanding number of shares of Common Stock held by all Stockholders as
of the relevant or the period in controversy.


                                  Article V

                                   DISPUTES

     Section 5.1. If the parties are, after negotiation in good faith, unable
to agree upon the appropriate application of this Agreement, the controversy
shall be settled by the accounting firm remaining on the list of firms



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set forth on Schedule A hereto after the Company and the representative of the
Stockholders, commencing with the Company, shall have objected seriatim to the
other firms on the list (the "Accounting Firm").  The decision of the
Accounting Firm shall be final, and each of the Company and the Stockholders
agree immediately to pay to the other any amount due under this Agreement
pursuant to such decision.  The expenses of the Accounting Firm shall be borne
one-half by the company and one-half by the Stockholders, on a Pro Rata Share
basis, unless the Accounting Firm specifies otherwise.

                                      
                                  Article VI
                                      
                                MISCELLANEOUS

     Section 6.1.  Term of Agreement.  This Agreement shall become effective as
of the date of its execution and shall continue in full force and effect until
terminated by mutual written agreement of all of the parties hereto.

     Section 6.2.  Severability.  If any term of this Agreement is held by a
court of competent jurisdiction to be unenforceable, the remainder of the terms
set forth herein shall remain in full force and effect and shall in no way be
impaired.  The parties stipulate that they would have executed the remaining
terms without including any which may hereafter be declared unenforceable.  In
the event that any term is held to be unenforceable, the parties shall use
their best efforts to find an alternative means to achieve the same or
substantially the same result as that contemplated by such term.

     Section 6.3.  Assignment.  Except by operation of law or in connection with
the sale of all or substantially all the assets of a party, this Agreement
shall not be assignable,  in whole or in part, directly or indirectly, by any
Stockholder without the written consent of the Company or by the Company
without the written consent of the Stockholders whose combined Pro Rata Shares
exceed fifty percent (50%) of the outstanding number of shares of Common Stock
held by all Stockholders at the time such consent is requested.  Any attempt to
assign any right or obligations arising under this Agreement without such
consent shall be void.  However, the provisions of this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.

     Section 6.4.  Further Assurances.  Subject to the provisions of this
Agreement, the parties shall acknowledge such other instruments and documents,
and take all other actions, as may be reasonably required in order to
effectuate the purposes of this Agreement.

     Section 6.5.  Parties in Interest.  Except as herein otherwise specifically
provided, nothing in this Agreement expressed or implied is intended to confer
any right or benefit upon any person, firm or corporation other than the
parties and their respective successors and permitted assigns.

     Section 6.6.  Waivers, Etc.  No failure or delay on the part of any party
in exercising any power or right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power,
or any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  No modification or waiver of any provision of this Agreement
nor consent to any departure by any party therefrom shall in any event be
effective unless it shall be in writing, and then such waiver or consent shall
be effective only in the specific instance and for the purpose which given.

     Section 6.7.  Set-off.  All payments to be made by any party under this
Agreement shall be made without set-off, counterclaim or withholding, all of
which are expressly waived.

     Section 6.8.  Change of Law.  If, due to any change in applicable law or
regulation or the interpretation thereof by any court or other governing body
having jurisdiction subsequent to the date of this Agreement, performance of
any provision of this Agreement shall be impracticable or impossible, the
parties shall use their best efforts to find alternative means to achieve the
same or substantially the same results as are contemplated by such provision.

     Section 6.9.  Headings.  Descriptive headings are for convenience only and
shall not control or affect the meaning of any provision of this Agreement.



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     Section 6.10. Counterparts.  For the convenience of the parties, any
number of counterparts of this Agreement may be executed by the parties and
each executed counterpart shall be an original instrument.

     Section 6.11. Notices.  All notices provided of in this Agreement shall be
validly given if in writing and (i) delivered personally or (ii) sent by
certified mail, postage prepaid, return receipt requested to the address set
forth below:

     If to the Company:

          455 Science Drive
          Suite 200
          Madison, Wisconsin  53711

     If to a Stockholder:
      
          At the address set forth in Schedule B hereto

or to such other address as any party may, from time to time, designate in a
written notice given in a like manner to each other party hereto.  Notice given
in person shall be deemed delivered when received (or when delivery is first
refused) and notice given by mail shall be deemed delivered five (5) calendar
days after the date mailed.

     Section 6.12. Governing Law.  This Agreement shall be governed by the
laws of the State of Wisconsin.

     IN WITNESS WHEREOF, the undersigned have caused this Tax Indemnification
Agreement to be duly executed as of the day and year first written above.


                               INSTITUTE FOR ACADEMIC EXCELLENCE, INC. 
                                                                       
                                                                       
                               By: /s/ Michael H. Baum                 
                                   -------------------                 
                                                                       
                               Title: /s/ Chief Executive Officer      
                                     ----------------------------      
                                                                       
                               /s/ Judith A. Paul                      
                               ------------------                      
                               JUDITH A. PAUL                          
                                                                       
                               /s/ Terrance D. Paul                    
                               --------------------                    
                               TERRANCE D. PAUL                        
                                                                       
                                                                       
                               TERRANCE AND JUDITH PAUL DESCENDANTS'   
                                    TRUST                              
                                                                       
                               By: /s/ Mark J. Bradley                 
                                  ------------------------             
                                  Mark J. Bradley, Trustee             



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                                  SCHEDULE A
                                      
                               Accounting Firms
                                      

Arthur Andersen, LLP
KPMG Peat Marwick LLP
Coopers & Lybrand LLP
Deloitte & Touche
Price Waterhouse LLP
Ernst & Young LLP





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                                ACKNOWLEDGMENT
                                      
                                       
     The undersigned beneficiary of a subtrust created under the Terrance and
Judith Paul Descendants' Trust (the "Trust") hereby (a) acknowledges receipt of
a copy of the Tax Indemnification Agreement dated August 29, 1997 between
Institute for Academic Excellence, Inc. (the "Company") and Judith A. Paul,
Terrance D. Paul and Mark J. Bradley, as Trustee of the Trust (the "Agreement")
and (b) agrees that if she receives a Tax Benefit arising from an Adjustment
with respect to a Tax Item of the Company in the circumstances set forth in
Section 3.2 of the Agreement, that she will, on behalf of the Trust, repay same
to the Company.  All words used herein which are not otherwise defined shall
have the meanings set forth in the Agreement.

     Dated as of the 29th day of August, 1997.



                                       /s/ Mia T. Paul
                                       ---------------
                                       Mia T. Paul



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                                ACKNOWLEDGMENT
                                      

     The undersigned beneficiary of a subtrust created under the Terrance and
Judith Paul Descendants' Trust (the "Trust") hereby (a) acknowledges receipt of
a copy of the Tax Indemnification Agreement dated August 29, 1997 between
Institute for Academic Excellence, Inc. (the "Company") and Judith A. Paul,
Terrance D. Paul and Mark J. Bradley, as Trustee of the Trust (the "Agreement")
and (b) agrees that if she receives a Tax Benefit arising from an Adjustment
with respect to a Tax Item of the Company in the circumstances set forth in
Section 3.2 of the Agreement, that she will, on behalf of the Trust, repay same
to the Company.  All words used herein which are not otherwise defined shall
have the meanings set forth in the Agreement.

     Dated as of the 29th day of August, 1997.



                                       /s/ Bliss Paul Cohen
                                       --------------------
                                       Bliss Paul Cohen




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                                ACKNOWLEDGMENT
                                      

     The undersigned beneficiary of a subtrust created under the Terrance and
Judith Paul Descendants' Trust (the "Trust") hereby (a) acknowledges receipt of
a copy of the Tax Indemnification Agreement dated August 29, 1997 between
Institute for Academic Excellence, Inc. (the "Company") and Judith A. Paul,
Terrance D. Paul and Mark J. Bradley, as Trustee of the Trust (the "Agreement")
and (b) agrees that if she receives a Tax Benefit arising from an Adjustment
with respect to a Tax Item of the Company in the circumstances set forth in
Section 3.2 of the Agreement, that she will, on behalf of the Trust, repay same
to the Company.  All words used herein which are not otherwise defined shall
have the meanings set forth in the Agreement.

     Dated as of the 29th day of August, 1997.



                                       /s/ Alyssa M. Paul
                                       ------------------
                                       Alyssa M. Paul



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                                ACKNOWLEDGMENT
                                      

     The undersigned beneficiary of a subtrust created under the Terrance and
Judith Paul Descendants' Trust (the "Trust") hereby (a) acknowledges receipt of
a copy of the Tax Indemnification Agreement dated August 29, 1997 between
Institute for Academic Excellence, Inc. (the "Company") and Judith A. Paul,
Terrance D. Paul and Mark J. Bradley, as Trustee of the Trust (the "Agreement")
and (b) agrees that if he receives a Tax Benefit arising from an Adjustment
with respect to a Tax Item of the Company in the circumstances set forth in
Section 3.2 of the Agreement, that he will, on behalf of the Trust, repay same
to the Company.  All words used herein which are not otherwise defined shall
have the meanings set forth in the Agreement.

     Dated as of the 29th day of August, 1997.



                                       /s/ Alexander F. Paul
                                       ---------------------
                                       Alexander F. Paul