Document:

<PAGE>   1
                                                                   Exhibit 10.49
                               SECURITY AGREEMENT

         In consideration of financial accommodations (arising from any
guarantee, loan, advance, letter of credit, acceptance and/or other credit
transactions) given or to be given or to be continued to the undersigned (the
"Debtor") or to any other party(ies) at the request, or for the benefit, or upon
the undertaking, of the Debtor by EXCEL BANK, N.A., its successors or assigns
(together with its affiliates and subsidiaries, herein called the "Bank"), the
Debtor hereby agrees with the Bank as follows:

      1. As collateral security for the due and punctual payment of any and all
of the present and future Obligations (as defined in Section 2 below) of the
Debtor to the Bank, the Debtor hereby assigns, mortgages, pledges, hypothecates,
transfers, sets over and grants to the Bank a first lien on and security
interest in all of the Collateral (as defined in Section 2 below), whether now
or hereafter existing or acquired.

     2.  Definitions.  For the purpose hereof, the following terms shall have
the meanings indicated:

              Agreement.  This Security Agreement dated even date herewith, made
     by the Debtor in favor of the Bank, and in any amendments, supplements, or
     modifications thereto.

              Collateral. (a) All of the personal property and fixtures of the
     Debtor wherever located and whether now owned or in existence or hereafter
     acquired or created, of every kind and description, tangible or intangible,
     including without limitation all inventory, goods, equipment, farm
     products, instruments, documents, chattel paper, accounts, contract rights
     and general intangibles, such terms having the meaning ascribed by the
     Uniform Commercial Code.

              (b) (i) The Membership Interest in each Limited Liability Company,
     (ii) any security issued to the Debtor by any Limited Liability Company in
     lieu of the uncertificated Membership Interest, if any, and (iii) all
     income and proceeds of the foregoing.

              (c) Any and all deposits or other sums at anytime credited by or
     due from the Bank to the Debtor; and any and all monies, securities and
     other property of the Debtor, and the proceeds thereof now or hereafter
     held or received by or in transit to the Bank from or for the Debtor,
     whether for safekeeping, custody, pledge, transmission, collection or
     otherwise, shall at all times constitute security for any and all
     Obligations.

              (d) all replacements, substitutions and renewals for or of the
     foregoing and all proceeds and products of the foregoing, including
     proceeds of insurance thereon.

              Event of Default.  Any event specified in Section 9 hereof.

              Indebtedness.  All sums now or hereafter owed by Debtor to Bank
     under Promissory Note.

                                        1
<PAGE>   2
              Letter Agreement. That certain Letter Agreement (the Commitment
     Letter) dated as of September 20, 2000 between the Debtor and Bank with
     respect to the Indebtedness and in any amendments, supplements, or
     modifications thereto.

              Limited Liability Company. Each of (i) Princeton Review
     Management, LLC, (ii) Princeton Review Publishing, LLC, (iii) Princeton
     Review Products, LLC and (iv) Princeton Review Operations, LLC., each a
     Delaware Limited Liability Company, and each having its chief executive
     office located at 2315 Broadway, New York, NY 10024.

              Loan Documents. All agreements and undertakings made by Debtor or
     the Bank in connection with the Indebtedness, including the Letter
     Agreement, Promissory Note , the Agreement, any guarantee and all other
     documents and instruments now or hereafter furnished to Bank to evidence or
     secure payment of the Indebtedness or performance of the Obligations, and
     all amendments thereto and modifications thereof.

              Membership Interest. All right, title and interest of the Debtor
     in a Limited Liability Company, however defined and however evidenced.

              Obligations. All indebtedness, liabilities or obligations,
     absolute or contingent, joint, several or independent, of the Debtor to the
     Bank now or hereafter existing, due or to become due to, or held or to be
     held by the Bank for its own account or as agent for another or others,
     whether created directly or acquired by Agreement or otherwise and
     howsoever evidenced including but not limited to the Indebtedness and any
     and all covenants, promises, indebtedness or other obligations of Debtor to
     the Bank under the Letter Agreement, this Agreement, and/or under any other
     Loan Documents made and/or delivered in connection herewith or therewith.

              Operating Agreement.  The Operating Agreement of a Limited
     Liability Company dated as of June 15, 2000 and any and all modifications
     and amendments thereto.

              Promissory Note. The Promissory Note dated even date herewith in
     the principal amount of $4,500,000.00, made by the Debtor to Bank, and in
     any and all extensions, renewal, substitutions or replacements thereof.

      3. The Debtor hereby grants to the Bank, a lien, security interest and
right of setoff as security for all liabilities and obligations to the Bank,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property of the Debtor, now or hereafter in the
possession, custody, safekeeping or control of the Bank or any entity under the
control of the Bank, or in transit to any of them. At any time, Bank may set off
the same or any part thereof and apply the same to any liability or obligation
of the Debtor regardless of the adequacy of any other collateral securing the
Obligations. ANY AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE DEBTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED BY THE DEBTOR.

                                        2
<PAGE>   3
     4. The Debtor represents and warrants covenants and agrees that, while any
Obligations or Indebtedness remain outstanding or unpaid:

                       (a) Except as permitted under the Letter Agreement, the
     Debtor is the sole owner of the Accounts (such terms having the meaning
     ascribed by the Uniform Commercial Code) and no one has or claims to have
     an interest of any kind therein or thereto; each of the debtors named in
     every Account is indebted to the Debtor in the amount and on the terms
     indicated in the invoice and schedule of Accounts; each Account is bona
     fide and arises out of the performance of labor or services or the sale and
     delivery or lease of merchandise or both.

                       (b) The Debtor will maintain accurate and complete
     records of the Accounts and will make the same available to the Bank at any
     time upon two days' notice. The Bank is entitled, at any time after an
     Event of Default or after an event which with the giving of notice or lapse
     of time or both would constitute an Event of Default, to notify the account
     debtors of the Debtor to make payment upon the Accounts directly to the
     Bank.

                       (c) Except as permitted under the Letter Agreement, the
     Debtor has not sold, leased, transferred, created a security interest in or
     otherwise pledged, encumbered or disposed of the Collateral or any part
     thereof;

                       (d) The Operating Agreement is in full force and effect,
     Debtor has fulfilled all its material obligations as a Member of the
     Limited Liability Company; and

                       (e) This Agreement does not violate any terms of the
     Operating Agreement nor is the consent of any party, necessary to
     effectuate this Agreement.

The Debtor further represents, warrants, covenants and agrees that as of the
date hereof:

                       (f) Debtor shall promptly perform all of the terms,
     conditions and obligations required to be performed by Debtor pursuant to
     the Operating Agreement;

                       (g) Debtor shall promptly notify the Bank of any default
     (of which Debtor has actual knowledge) by the Debtor in the performance of
     any of the terms, conditions or obligations required to be performed by the
     Debtor pursuant to the Operating Agreement;

                       (h) Debtor shall give prompt written notice to the Bank
     of any material alteration, modification, surrender, termination or other
     change to the Operating Agreement or any material term or provision thereof
     to which Debtor was or is not authorized to approve pursuant to the
     Operating Agreement;

                       (i) Debtor shall promptly notify the Bank in writing of
     the initiation of any court, administrative or similar proceedings by or
     against Debtor or the Limited Liability Company to enforce the terms of the
     Operating Agreement;

                       (j) Except as permitted under the Letter Agreement, the
     Debtor shall not transfer, sell, assign or otherwise convey Debtor's
     economic or other interest in the Limited Liability Company;

                                        3
<PAGE>   4
                       (k) Debtor shall provide the Bank with a true copy of all
     financial information with respect to the Limited Liability Company which
     Debtor shall receive pursuant to the Operating Agreement, immediately after
     receipt by Debtor of that information and shall immediately deliver such
     reports with respect to Debtor as the Bank shall request from time to time;

                       (l) Debtor shall notify the Bank of any substantial
     distribution to be made by the Limited Liability Company to the Bank
     thereof immediately upon notice to Debtor of the distribution, other than
     specific cash flow distributions which have been scheduled and required on
     stated dates under the terms of the Operating Agreement;

                       (m) The security interest created hereby shall continue
     in full force and effect until any and all Obligations and Indebtedness
     have been paid and satisfied in full, and Debtor will execute any and all
     financing statements to evidence, perfect and continue the prior security
     interest of the Bank as the Bank shall request;

                       (n) Except as otherwise permitted pursuant to the Loan
     Documents, the Debtor shall keep the Collateral free of all liens and
     encumbrances, except the security interest granted hereunder, and shall not
     sell, lease, transfer, or create a security interest in or otherwise
     dispose of or encumber the Collateral or any part thereof, and shall
     immediately notify the Bank of any material adverse change in the
     Collateral or any occurrence which could materially and adversely affect
     the interests of the Bank, and of any adverse claim or other encumbrance
     arising out of or with respect to the Collateral; and

                       (o) The Debtor shall make and continue to make all
     payments with respect to the Indebtedness, to the extent not made by
     Debtor, when due and fulfill all of its Obligations immediately upon
     maturity thereof.

      5. The Bank shall have no duty or obligation and shall have no right to
demand, sue or make collection of any sum or benefit at any time owing or
existing for the benefit of Debtor unless and until an Event of Default
(hereinafter defined) occurs. This Agreement shall not constitute Bank a Member
of the Limited Liability Company prior to reduction of the Membership Interest
to ownership by Bank, or render Bank liable in any way to any of the Members, or
creditors of the Limited Liability Company or of the Limited Liability Company
for any reason whatsoever. Bank shall not be liable to Debtor or any person
claiming under or through Debtor by reason of any good faith act or omission of
Bank.

      6. The Debtor assumes all liability and responsibility in connection with
all Collateral acquired by Debtor; and the obligation of the Debtor to pay all
Obligations shall in no way be affected or diminished by reason of the fact that
any such Collateral may be lost, destroyed or stolen.

      7. As long as this Agreement shall remain in effect, the Debtor further
agrees:

                       (a) that after an Event of Default, if the Bank so
     demands in writing at any time (i) all proceeds of the Collateral shall be
     delivered to the Bank promptly upon their receipt in a form satisfactory to
     the Bank, and (ii) all chattel paper, instruments and

                                        4
<PAGE>   5
     documents pertaining to the Collateral shall be delivered to the Bank at
     the time and place and in the manner in which specified in the Bank's
     demand;

                       (b) in order to enable the Bank to comply with the law of
     any jurisdiction, including state, federal and foreign, applicable to any
     security interest granted hereby or to the Collateral, to execute and
     deliver upon request, in form acceptable to the Bank, any Financing
     Statement, notice, statement, instrument, document, agreement or other
     paper and/or to perform any act requested by the Bank which may be
     necessary to create, perfect, preserve, validate or otherwise protect such
     security interest or to enable the Bank to exercise and enforce the Bank's
     rights hereunder or with respect to such security interest;

                       (c) promptly to pay any filing fees or other costs in
     connection with (i) the filing or recording of such Financing Statements or
     any other papers described above and (ii) such searches of the public
     records as the Bank in its sole discretion shall require;

                       (d) that the Bank is authorized to file or record any
     such Financing Statements or other papers without the signature of the
     Debtor if permitted by applicable law;

                       (e) the Bank may file a photographic or other
     reproduction of this Agreement in lieu of a Financing Statement in any
     filing office where it is permissible to do so;

                       (f) except for the security interest granted hereby or
     otherwise existing on the date hereof or permitted under that certain
     letter agreement dated as of September 20, 2000 between The Princeton
     Review, Inc, and the Bank, or otherwise agreed to by the Bank in writing,
     the Debtor shall keep the Collateral and proceeds and products thereof free
     and clear of any security interest, liens or encumbrances of any kind, the
     Debtor shall promptly pay, when due, all taxes and transportation, storage
     and warehousing charges and fees affecting or arising out of the Collateral
     and shall defend the Collateral against all claims and demands of all
     persons at any time claiming the same or any interest therein adverse to
     the Bank;

                       (g) at all times to keep all insurable Collateral insured
     at the expense of the Debtor of the kind and in the amounts that it is
     common practice to insure such collateral against loss by fire, theft and
     any other risk to which the Collateral may be subject; and if the Bank
     requests, all policies shall be endorsed in favor of the Bank and shall be
     deposited with the Bank; and in any event, such policies will provide that
     each insurer will give the Bank not less than 30 days notice in writing
     prior to the exercise of any right of cancellation; in the event the Debtor
     fails to maintain any insurance, the Bank may (but shall not be obligated
     to) place such insurance and pay the premium therefor, in which event the
     Debtor will pay the Bank such premium with interest; the Bank may apply any
     proceeds of such insurance which may be received by it toward payment of
     the Obligations, whether or not due, in such order of application as the
     Bank may determine;

                       (h) that the Bank's duty with respect to the Collateral
     shall be solely to use reasonable care in the custody and preservation of
     collateral in its possession; the Bank shall not be obligated to take any
     steps necessary to preserve any rights in any of the Collateral

                                        5
<PAGE>   6
     against prior parties, and the Debtor hereby agrees to take such steps; the
     Debtor shall pay to the Bank all costs and expenses, including filing and
     reasonable attorney's fees, incurred by the Bank in connection with the
     custody, care, preservation or collection of the Collateral; the Bank may,
     but is not obligated to, exercise any and all rights of conversion or
     exchange or similar rights, privileges and options relating to the
     Collateral; the Bank shall have no obligation to sell or otherwise realize
     upon any of the Collateral as herein authorized and shall not be
     responsible for any failure to do so or for any delay in so doing;

                       (i) to provide the Bank with such information as the Bank
     may from time to time request with respect to the location of the
     Collateral and any of its places of business;

                       (j) that the Bank will be notified promptly in writing of
     any change in any office as set forth below;

                       (k) that the Debtor will permit the Bank, by its officers
     and agents, to have access to and examine at all reasonable times, upon
     reasonable notice, the properties, minute books and other corporate
     records, and books of account and financial records of the Debtor;

                       (l) that the Debtor will promptly notify the Bank upon
     the occurrence of any default, as provided in this Agreement, of which the
     Debtor has knowledge.

                       (m) that the Debtor will not sell, transfer, lease or
     otherwise dispose of any of the Collateral or any interest therein, or
     offer to do so or permit anything to be done to impair the value of the
     Collateral or the security interest granted to the Bank, except in the
     ordinary course of business or with the written consent of the Bank.

                       (n) In the event of the sale or disposition of any
     material asset of the Limited Liability Company (or liquidation thereof by
     any means, including the recovery of casualty insurance proceeds not
     applied to restoration), or any refinancing, recasting or other disposition
     of mortgages creating a lien on any material asset of the Limited Liability
     Company which results in a distribution of capital to the Debtor, the
     Debtor will contemporaneously therewith, pay the net portion thereof to the
     Bank for application upon the Indebtedness unless Debtor shall provide
     substitute collateral of value at least equal to the present Collateral and
     which substitution is subject to the prior written consent of Bank, which
     consent shall not be unreasonably withheld;

                       (o) HEREBY WITH THE BANK TO MUTUALLY KNOWINGLY,
     VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT
     OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
     SECURITY AGREEMENT ANY OBLIGATION SECURED HEREBY OR ANY OTHER AGREEMENT IN
     CONNECTION HEREWITH, OR ANY OTHER DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
     CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
     STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER
     CONSTITUTES A MATERIAL INDUCEMENT FOR THE BANK TO MAKE LOANS FROM TIME TO
     TIME.

                                        6
<PAGE>   7
      8.       (a) Upon the occurrence of an Event of Default as defined in
Section 8 hereof, the Debtor agrees as follows: (i) the Debtor will not, without
first obtaining the written consent of the Bank, renew or extend the time of
payment of any Account; (ii) the Debtor will promptly notify the Bank in writing
of any compromise, settlement or adjustment with respect to an Account and will
forthwith account therefor to the Bank in cash for the amount thereof without
demand or notice; (iii) the Debtor will stamp, in form and manner satisfactory
to the Bank, its accounts receivable ledger and other books and records
pertaining to the Accounts, with an appropriate reference to the security
interest of the Bank in the Accounts; (iv) upon request, the Debtor will furnish
the Bank original or other papers relating to the performance of services which
created any Account; (v) the Debtor may collect the Accounts, subject to the
discretion and control of the Bank, but the Bank may, without cause or notice,
curtail or terminate such authority at any time; (vi) the proceeds of the
Accounts, when collected by the Debtor, whether consisting of cash, checks,
notes, drafts, money orders, commercial paper of any kind whatsoever, or other
documents, received in payment of the Accounts shall be promptly remitted by the
Debtor to the Bank, in precisely the form received, except for endorsement by
the Debtor when required; (vii) such proceeds until remitted to the Bank, as
aforesaid, shall be held in trust by the Debtor for, and as the property of, the
Bank and shall not be commingled with other funds, money or property; (viii)
proceeds of the Accounts will be received by the Bank subject to final
collection and receipt of proceeds in cash or by unconditional credit to and
acceptance by the Bank; (ix) the Bank shall apply in its absolute discretion all
collections received by it on the Accounts, toward the payment of any of the
Obligations whether due or not due; (x) the Debtor will promptly notify the Bank
in writing of the return or rejection of any merchandise represented by the
Accounts and the Debtor shall forthwith account therefor to the Bank in cash
without demand or notice and until such payment has been received by the Bank,
the Debtor will receive and hold all such merchandise separate and apart, in
trust for and subject to the security interest in favor of the Bank; and (xi)
the Bank is authorized to sell, for the Debtor's account and sole risk, all or
any part of such merchandise in the manner and under the terms and conditions
hereinafter set forth.

      9. Upon the occurrence of an event of default under the Obligations, or a
breach of any covenants or agreements contained in any promissory note,
guarantee or agreement relating thereto (an "Event of Default"), (a) all
Obligations shall become at once due and payable, without notice, presentment,
demand for payment or protest, which are hereby expressly waived; (b) the Bank
is authorized to take possession of the Collateral and, for that purpose may
enter, with the aid and assistance of any person or persons, any premises where
the Collateral, or any part thereof is, or may be, placed and remove same; (c)
the Bank may proceed to apply to the Obligations, any and all deposits or other
sums described in Section 4 hereof; (d) the Bank may require the Debtor to
assemble the Collateral and to make it available to the Bank at a place
designated by the Bank which is reasonably convenient to the Bank and the
Debtor; (e) the Bank shall have the right from time to time to sell, resell,
assign, transfer and deliver all or any part of the Collateral, at any broker's
board or exchange, or at public or private sale or otherwise, at the option of
the Bank, for cash or on credit for future delivery, in such parcel or parcels
and at such time or times and at such place or places, and upon such terms and
conditions as the Bank may deem proper, and in connection therewith may grant
options and may impose reasonable conditions such as requiring any purchaser to
represent that any stock constituting part of the Collateral is being purchased
for investment purposes only, all without (except as shall be required by
applicable statute and cannot be waived) advertisement or demand upon the Debtor
or right of redemption to the Debtor, which are hereby expressly waived: unless
the Collateral is perishable or threatens to decline speedily in

                                        7
<PAGE>   8
value or is of a type customarily sold on a recognized market, the Bank will
give the Debtor reasonable notice of the time and place of any such public sale
or of the time after which any private sale or any other intended disposition
thereof is to be made and Debtor agrees that five (5) days prior written notice
shall be deemed reasonable notice; (f) upon each such sale, the Bank may, unless
prohibited by applicable statute which cannot be waived, purchase all or any
part of the Collateral being sold, free from and discharged of all trusts,
claims, rights of redemption and equities of the Debtor, which are hereby waived
and released; (g) the Bank shall, upon mailing notice to the Debtor that it so
elects, have from the date of such mailing the right from time to time to vote
any shares of stock securing any of the Obligations; provided, however, the Bank
at any time, before or after the occurrence of any Event of Default, may, but
shall not be obligated to, transfer into or out of its own name or that of its
nominee all or any of the Collateral which is instruments, stocks, bonds, and
other securities, and the Bank or its nominee may demand, sue for, collect,
receive and hold as like Collateral any or all interest, dividends and income
thereon and if any securities are held in the name of the Bank or its nominee,
the Bank may, after the occurrence of any such events, exercise all voting and
other rights pertaining thereto as if the Bank were the absolute owner thereof;
but the Bank shall not be obligated to demand payment of, protest, or take any
steps necessary to preserve any rights in any such Collateral against prior
parties, or take any action whatsoever in regard to any such Collateral, all of
which the Debtor assumes and agrees to do. Without limiting the generality of
the foregoing, the Bank shall not be obligated to take any action in connection
with any conversion, call, redemption, retirement or any other event relating to
any of such Collateral, unless the Debtor gives written notice to the Bank that
such action shall be taken not more than thirty (30) days prior to the time such
action may first be taken and not less than ten (10) days prior to the
expiration of the time during which such action may be taken; (h) the Bank's
obligations, if any, to give additional (or to continue) financial
accommodations of any kind to the Debtor shall immediately terminate; and (i) in
addition to the rights and remedies given to the Bank hereunder or otherwise,
the Bank shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code of the State of New York.

     10. In the case of each such sale or of any proceedings to collect any of
the Obligations, the Debtor shall pay all costs and expenses of every kind for
collection, sale or delivery, including reasonable attorneys fees, and after
deducting such costs and expenses from the proceeds of sale or collection, the
Bank may apply any residue to pay any of the Obligations and the Debtor will
continue to be liable to the Bank for any deficiency with interest.

     11. The Bank may, but is not obligated to, (a) demand, sue for, collect or
receive any money or property at any time due, payable or receivable on account
of or in exchange for any obligations securing any of the Obligations; (b)
compromise and settle with any person liable on such obligation, and/or (c)
extend the time of payment of or otherwise change the terms thereof, as to any
party liable thereon; all without incurring responsibility to the undersigned or
affecting any of the Obligations.

     12. In order to effectuate the terms and provisions hereof, the Debtor
hereof designates and appoints the Bank and its designees or agents, after an
Event of Default, as attorney-in-fact of the Debtor, irrevocably and with power
of substitution, with authority to receive, open and dispose of all mail
addressed to the Debtor, to notify the Post Office authorities to change the
address for delivery of mail addressed to the Debtor to such address as the Bank
may designate;

                                        8
<PAGE>   9
to endorse the name of the Debtor on any notes, acceptances, checks, drafts,
money orders, instruments or other evidence of payment or proceeds of the
Collateral that may come into the Bank's possession to sign the name of the
Debtor on any invoices, documents, drafts against and notices (which also may
direct among other things that payment be made directly to the Bank) to Account
debtors or obligors of the Debtor, Agreements and requests for verification of
Accounts; to execute proofs of claim and loss; to execute any endorsements,
Agreements, or other instruments of conveyance or transfer, to adjust and
compromise any claims under insurance policies; to execute releases; and to do
all other acts and things necessary and advisable in the sole discretion of the
Bank to carry out and enforce this Agreement. All acts of said attorney or
designee are hereby ratified and approved and said attorney or designee shall
not be liable for any acts of commission of omission, nor or any error of
judgment or mistake of fact or law. This power of attorney being coupled with an
interest is irrevocable while any of the Obligations shall remain unpaid.

     13. All options, powers and rights granted to the Bank hereunder or under
any promissory note, instrument, document or other writing delivered to the Bank
shall be cumulative and shall be in addition to any other options, powers or
rights which the Bank may now or hereafter have as a secured party under the
Uniform Commercial Code of the State of New York or under any other applicable
law or otherwise.

     14. No delay on the part of the Bank in exercising any of its options,
powers, or rights, or partial or single exercise thereof, shall constitute a
waiver thereof. Neither this Agreement nor any provision hereof may be modified,
changed, waived, discharged or terminated orally, but only by an instrument in
writing, signed by the party against whom enforcement of the modification,
change, waiver, discharge or termination is sought.

     15. Notice of acceptance of this Agreement by the Bank is hereby waived.
This Agreement shall be immediately binding upon the Debtor and its successors
and assigns, whether or not the Bank signs this Agreement.

     16. It is the intention of the parties (a) that this Agreement shall
constitute a continuing agreement applying to any and all future, as well as
existing transactions between the Debtor and the Bank; and (b) that the security
interest provided for herein shall attach to after-acquired as well as existing
Collateral, and the Obligations covered by this Agreement shall include future
advances and other value, as well as existing advances and other value, whether
or not similar to prior or existing advances or other value, and whether or not
the advances or value are or shall be given pursuant to commitment, all to the
maximum extent permitted by the Uniform Commercial Code of the State of New
York.

     17. Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code of the State of New York shall have the
meanings therein stated.

     18. If this Agreement is signed by two or more parties as Debtors, they
shall be jointly and severally liable hereunder and the term "Debtor" wherever
used in this Agreement shall mean the parties who have signed this Agreement and
each of them.

                                        9
<PAGE>   10
     19. Mailing Address of Debtor. For the purpose of Section 9.402(1) of the
Uniform Commercial Code, the address of the Debtor specified below under the
caption "Chief Executive Office" (or "Major Executive Office" address whenever
the Chief Executive Office is located outside of the United States) may be
designated as the Debtor's mailing address.

     20. This Agreement shall be construed in accordance with and be governed by
the law of the State of New York.

     21. Debtor will, at the cost of Debtor, and without expense to Bank, do,
execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, Agreements, notices of Agreements, transfers and assurances as Bank
shall, from time to time, require, for the better assuring, conveying,
assigning, transferring and confirming unto Bank the property and rights hereby
given, granted, bargained, sold, alienated, conveyed, confirmed, pledged,
assigned and hypothecated or intended now or hereafter so to be, or which Debtor
may be or may hereafter become bound to convey or assign to Bank, or for
carrying out the intention or facilitating the performance of the terms of this
Agreement or for filing, registering or recording this Agreement and, on demand,
will execute and deliver and hereby authorizes Bank to execute in the name of
Debtor or without the signature of Debtor to the extent Bank may lawfully do so,
one or more financing statements, chattel mortgages or comparable security
instruments, to evidence more effectively the lien hereof. Debtor grants to Bank
an irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights available to Bank at law and in
equity.

     22. Upon the indefeasible payment in full of all Obligations, if request to
do so by the Debtor, the security interest granted hereby shall be terminated
and the Bank shall, at Debtor's request, execute and deliver to Debtor such
documents as Debtor shall reasonably request.

     IN WITNESS WHEREOF, the Debtor has executed this Agreement or has caused
these presents to be executed and delivered by its proper corporate officer or
officers and caused its proper corporate seal to be hereto affixed, this 27th
day of October, 2000.

                           THE PRINCETON REVIEW, INC.

                             By:/s/ Stephen Melvin
                                ___________________________________________
                             Name: Stephen Melvin
                             Title:   Treasurer and Chief Financial Officer

                                       10
<PAGE>   11
STATE OF NEW YORK              )
                               ) SS.:
COUNTY OF NEW YORK             )

On the 27th day of October in the year 2000 before me, the undersigned, a Notary
Public in and for said State, personally appeared Stephen Melvin, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

                                   ----------------------------------------
                                                Notary Public

                                       11<PAGE>   1
                                                                   Exhibit 10.50
                                    GUARANTY

                                                              New York, New York
                                                              October 27, 2000

In consideration of any and all loans, advances, acceptances, discounts and
extensions of credit made by EXCEL BANK, N.A. , a national banking association
organized and existing under the laws of the United States of America, with an
office at 400 Park Avenue, New York, New York 10022 (the "Bank" or the
"Lender"), to, for the account of, or on behalf of THE PRINCETON REVIEW, INC. a
New York corporation (the "Borrower"), the undersigned (the "Guarantor") hereby
absolutely and unconditionally guarantees to the Lender the punctual payment in
full of that certain indebtedness of the Borrower to the Lender, including but
not limited to the principal, interest and all other sums and amounts due and to
become due from the Borrower to the Lender, under and pursuant to that certain
promissory note dated October 27, 2000 in the principal amount of $4,500,000.00
due October 31, 2001, and in any substitutions, replacements, extensions or
renewal thereof and under or pursuant to the terms of any agreement, assignment
or other document, instrument or writing executed and delivered to the Lender
with respect thereto (all of which obligations, indebtedness and liabilities are
hereinafter referred to individually as an "Obligation" and collectively as the
"Obligations").

Except for being entitled to notice (incorporating a five day cure period) of a
non-payment default (susceptible to a 5 day cure) under the Obligations, the
Guarantor hereby expressly waives the following: notice of the incurring of
indebtedness by the Borrower; presentment and demand for payment, protest,
notice of protest and notice of dishonor or non-payment of any instrument
evidencing Obligations of the Borrower; any right to require suit against the
Borrower or any other party before enforcing this Guaranty; any right to have
security applied before enforcing this Guaranty; notice of acceptance of this
Guaranty; notice of any default hereunder or under any agreement evidencing any
of the Obligations; all other notices and demands otherwise required by law
which the Guarantor may lawfully waive; and any right of subrogation to the
Lender's rights against the Borrower until the Borrower' Obligations are paid in
full. The Guarantor hereby expressly agrees that the Lender may, in its sole and
absolute discretion, without notice to or further assent of the Guarantor, and
without in any way releasing, affecting or impairing the obligations and
liabilities of the Guarantor hereunder: (i) waive compliance with, or any
default under, or grant any other indulgences with respect to, any of the
Obligations or any agreement or instrument securing any of the Obligations; (ii)
modify, amend or change any provisions of any of the Obligations; (iii) grant
extensions or renewals of or with respect to any of the Obligations, and/or
effect any release, compromise or settlement in connection therewith; (iv) agree
to the substitution, exchange, release or other disposition of all or any part
of the collateral at any time securing any Obligation; (v) make advances for the
purposes of performing any term or covenant contained in any agreement
evidencing any of the Obligations or any instrument or agreement securing the
Obligations, with respect to which the Borrower shall be in default; (vi) assign
or otherwise transfer any agreement evidencing any of the Obligations and any
instrument or agreement securing the Obligations,

                                        1
<PAGE>   2
including, without limitation, this Guaranty, or any interest therein; and (vii)
deal in all respects with the Borrower as if this Guaranty were not in effect.
The obligations of the Guarantor under this Guaranty shall be unconditional,
irrespective of the genuineness, validity, regularity or enforceability of any
agreement evidencing any of the Obligations or any other circumstances which
might otherwise constitute a legal or equitable discharge of a surety or
guarantor. As further consideration for the loan or loans by Lender to Borrower
and as a material inducement to Lender to make the loan or loans and accept this
Guaranty, Guarantor hereby irrevocably waives, disclaims and relinquishes all
claims, whether based in equity or law, whether by contract, statute or
otherwise, that Guarantor might now or hereafter have against Borrower or any
other person that is primarily or contingently liable on the Obligations
guarantied hereby or that arise from the existence or performance of Guarantor's
obligations under this Guaranty, including, but not limited to, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, or
participation in any claim or remedy of the Borrower against Lender or any
collateral security that Lender now has or hereafter acquires.

 The liability of the Guarantor under this Guaranty shall be primary, direct and
immediate and not conditional or contingent upon pursuit by the Lender of any
remedies it may have against the Borrower or any other party with respect to the
Obligations or any instrument or agreement securing the Obligations, whether
pursuant to the terms thereof or otherwise. No exercise or nonexercise by the
Lender of any right given to it hereunder or under any agreement evidencing any
of the Obligations or any instrument or agreement securing any of the
Obligations, and no change, impairment or suspension of any right or remedy of
the Lender shall in any way affect any of the Guarantor's obligations hereunder
or give the Guarantor any recourse against the Lender. Without limiting the
generality of the foregoing, the Lender shall not be required to make any demand
on the Borrower and/or any other party, or otherwise pursue or exhaust its
remedies against the Borrower or any other party, before, simultaneously with or
after, enforcing its rights and remedies hereunder against the Guarantor. Any
one or more successive and/or concurrent actions may be brought hereon against
the Guarantor either in the same action, if any, brought against the Borrower
and/or any other party, or in separate actions, as often as any holder of an
Obligation, in its sole discretion, may deem advisable. Any action brought on
this Guaranty with respect to one or more Obligations shall not prevent the
commencement of subsequent or separate actions with respect to any other
Obligations.

   Any notice, demand, request or other communication given hereunder or in
connection herewith (hereinafter "Notices") shall be deemed sufficient if in
writing and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed to the party to receive such Notice at its address
set forth in this Guaranty or at such other address as such party may hereafter
designate by Notice given in like fashion. Notices shall be deemed given when
mailed.

Any payments made by the Guarantor under the provisions of this Guaranty shall
be made to the Lender at its principal office at its address first set forth
above, unless some other address is hereafter designated by the Lender.

All rights and remedies afforded to the Lender by reason of this Guaranty or by
law are separate

                                        2
<PAGE>   3
and cumulative and the exercise of one shall not in any way limit or prejudice
the exercise of any other such rights or remedies. No delay or omission by the
Lender in exercising any such right or remedy shall operate as a waiver thereof.
No waiver of any rights or remedies hereunder, and no modification or amendment
hereof, shall be deemed made by the Lender unless in writing and duly executed.
Any such written waiver shall apply only to the particular instance specified
therein and shall not impair the further exercise of such right or remedy or of
any other right or remedy of the Lender, and no single or partial exercise of
any right or remedy hereunder shall preclude further exercise of any other right
or remedy.

The obligation of the Guarantor to make payment in accordance with the terms of
this Guaranty shall not be impaired, modified, changed, released or limited in
any manner whatsoever by any impairment, modification, change, release or
limitation of the liability of the Borrower or its respective estates in
bankruptcy or reorganization resulting from the operation of any present or
future provision of Title 11 of the United States Code or other statute or from
the decision of any court. The obligations of the Guarantor hereunder shall
survive any judgment, order, or decree subordinating or voiding in whole or in
part the obligations of either Borrower to the Lender and shall extend to the
repayment of any sums recovered from the Lender on any basis (including any
provision of Chapter 5 of Title 11, United States Code) either before or after
satisfaction in full by either Borrower of its obligations to the Lender.

In the event that a petition in bankruptcy or for an arrangement or
reorganization of, or for an order for relief with respect to, the Borrower
under the bankruptcy laws or for the appointment of a receiver for the Borrower
or any of its property is filed by or against either of the Borrower, or if the
Borrower shall make an assignment for the benefit of creditors or shall become
insolvent, or if a default shall occur under or with respect to any of the
Obligations, all indebtedness of the Borrower shall, for the purpose of this
Guaranty, be deemed at the Lender's election to have become immediately due and
payable.

 The Guarantor further agrees to pay the Lender any and all costs, expenses and
reasonable attorneys' fees paid or incurred by the Lender in collecting or
endeavoring to collect the indebtedness of the Borrower or in enforcing or
endeavoring to enforce this Guaranty. All accounts, deposits, and property of
the Guarantor with or in the hands of the Lender shall be and stand pledged as
collateral security for the indebtedness of the Guarantor to the Lender, and the
Lender shall have the same right of setoff with respect to deposits and other
credits of the Guarantor as the Lender may have with respect to deposits and
other credits of the Borrower.

This Guaranty shall operate as an irrevocable and continuing guaranty of all
obligations, liabilities and indebtedness of the Borrower to the Bank.

The Guarantor, to the extent that he may lawfully do so, hereby submits to the
jurisdiction of the courts of the State of New York and the United States
District Court for the Southern District of New York; as well as to the
jurisdiction of all courts from which an appeal may be taken from the aforesaid
courts, for the purpose of any suit, action or other proceeding arising out of
any of the Guarantor's obligations under or with respect to this Guaranty, and
expressly waives any and all

                                        3
<PAGE>   4
objections he may have as to venue in any of such courts. THE GUARANTOR AND THE
LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS GUARANTY, THE LINE OR ANY OTHER DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY.

Guarantor hereby grants to Bank, a lien, security interest and right of setoff
as security for all liabilities and obligations to Bank, whether now existing or
hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Bank or any entity under the control of the Bank, or in transit to any of them.
At any time without demand or notice (after an Event of Default or an event
which with the giving of notice or the lapse of time or both would constitute an
Event of Default, Bank may set off the same or any part thereof and apply the
same to any liability or obligation of Guarantor regardless of the adequacy of
any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE
BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE GUARANTOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

This Guaranty shall be governed by and construed in accordance with the laws of
the State of New York.

This Guaranty shall be binding upon the Guarantor and her heirs, executors,
administrators and assigns, and shall inure to the benefit of the Lender and its
successors and assigns. The terms "Guarantor" and "Borrower" and any pronouns
referring thereto as used herein shall be construed in the masculine, feminine,
neuter, singular or plural as the context may require.

IN WITNESS WHEREOF, this Guaranty has been executed and delivered to the Lender
by the undersigned Guarantor as of the date first above written.

WITNESS/ATTEST:

                           By:_______________________________________________
                           Name:    Stephen Melvin
                           Title:      Treasurer and Chief Financial Officer

                                        4
<PAGE>   5
STATE OF NEW YORK                      )
                                       ) SS.:
COUNTY OF NEW YORK                     )

On the 27th day of October in the year 2000 before me, the undersigned, a Notary
Public in and for said State, personally appeared Stephen Melvin, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

                                        ----------------------------------------
                                              Notary Public

                                        5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]