Document:

Settlement Agreement, dated as of April 27, 2010

 EXHIBIT 10.1 

Settlement Agreement 

This Settlement Agreement, dated as of April 27, 2010 (this “Agreement”), is by and among Raging Capital Fund, LP,
a Delaware limited partnership (“Raging Capital LP”); Raging Capital Fund (QP), LP, a Delaware limited partnership; Raging Capital Management, LLC, a Delaware limited liability company (“Raging Capital Management”);
and William C. Martin (collectively, the “Raging Capital Group”, and each, individually, a “member” of the Raging Capital Group) and Bitstream Inc. (the “Company”). 

RECITALS 

WHEREAS, the Raging Capital Group beneficially owns (as defined below) shares of the Company’s common stock, par value $0.10 per
share (the “Common Stock”) as specified in Amendment No. 1 to the Schedule 13D filed by the Raging Capital Group with the Securities and Exchange Commission (the “SEC”) on March 1, 2010; 

WHEREAS, On February 26, 2010, Raging Capital LP delivered a letter to the Company nominating Raul K. Martynek, Kenneth H. Traub and
James A. Waskovich (the “Nomination Letter”) for election to the Company’s Board of Directors (the “Board”) at the Company’s 2010 annual meeting of stockholders (the “2010 Annual
Meeting”); 
 WHEREAS, on March 4, 2010, Raging Capital LP delivered to the Company a demand, pursuant to
Section 220 of the Delaware General Corporation Law, to review certain of the Company’s books and records in connection with the 2010 Annual Meeting (the “Section 220 Demand”); 

WHEREAS, on March 19, 2010, Raging Capital LP filed a preliminary proxy statement on Schedule 14A with the SEC related to the
matters set forth in the Nomination Letter; and 
 WHEREAS, the Company and the members of the Raging Capital Group have
determined to come to an agreement with respect to certain matters related to the 2010 Annual Meeting and certain other matters, as provided in this Agreement; 

NOW, THEREFORE, in consideration of the promises, covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound, hereby agrees as follows: 

 Article I 

DEFINITIONS 

Section 1.1 Defined Terms. For purposes of this Agreement: 

(a) “2011 Annual Meeting” means the Company’s 2011 annual meeting of stockholders. 

(b) “2012 Annual Meeting” means the Company’s 2012 annual meeting of stockholders. 

(c) “Affiliate” has the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act.

 (d) “Associate” has the meaning set forth in Rule 12b-2 promulgated by the SEC under the
Exchange Act. 
 (e) The terms “beneficial owner” and “beneficially owns” have
the meanings set forth in Rule 13d-3 promulgated by the SEC under the Exchange Act. 
 (f) “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time. 
 (g)
“Person” means any individual, partnership, corporation, group, syndicate, trust, government or agency, or any other organization, entity or enterprise. 

(h) “Termination Date” means the earlier to occur of (a) the date on which the Company
notifies the Raging Capital Group pursuant to Section 2.4 below that it has not resolved to nominate Mr. Martynek for election to the Board at the 2011 Annual Meeting or the 2012 Annual Meeting; or (b) the first day after the
2012 Annual Meeting. 
 Section 1.2 Interpretation. When reference is made in this agreement to a Section, such reference
shall be to a Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without
limitation.” The words “hereof,” “herein,” “hereby” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing an instrument to be drafted. 

 Article II 

BOARD NOMINATION 

Section 2.1 Board Nominees. Subject to the terms hereof, the Company and the Raging Capital Group have identified Raul Martynek
and Melvin L. Keating as mutually acceptable candidates for election to the Board at the 2010 Annual Meeting. 
 Section 2.2
2010 Annual Meeting. The Company hereby covenants and agrees that (a) it shall take all requisite action, in accordance with Article III of the Bylaws of the Company, to increase the size of the Board from six (6) to eight
(8) directors, and (b) at the 2010 Annual Meeting, Messrs. Martynek and Keating shall be nominated for election as directors of the Company for a term expiring at the Company’s 2011 Annual Meeting until their respective
successors are duly elected and qualified. Prior to the 2010 Annual Meeting, (i) the Board shall recommend that the Company’s stockholders vote in favor of the election of Messrs. Martynek and Keating at the 2010 Annual Meeting and
(ii) the Company shall solicit proxies for the election of Messrs. Martynek and Keating at the 2010 Annual Meeting. 

Section 2.3 Resignation, Death or Disability. If Mr. Martynek leaves the Board before the Company’s 2012 Annual Meeting
by reason of his resignation, death or disability, the Raging Capital Group will be entitled to recommend to the Nominating and Corporate Governance Committee of the Board a nominee for director who will qualify as “independent” pursuant
to NASDAQ listing standards. The Nominating and Corporate Governance Committee will consider in good faith, in accordance with their fiduciary duties, any such person recommended by the Raging Capital Group. 

Section 2.4 Notice of Re-nomination of Mr. Martynek at 2011 or 2012 Annual Meeting. Within fifteen (15) days following
the first date upon which a stockholder of the Company may nominate, in accordance with the applicable procedures set forth in the Company’s Bylaws, a person for election as a member of the Board at such meeting, the Company shall notify the
Raging Capital Group whether it has resolved to recommend Mr. Martynek for re-election to the Board at each of the 2011 Annual Meeting and the 2012 Annual Meeting. 

Section 2.5 Finder’s Fee. In consideration of Raging Capital Management’s having identified Mr. Martynek as a
candidate for director of the Company, the Company shall pay to Raging Capital Management an amount equal to $30,000. 

 Article III 

PROXY CONTEST AND OTHER MATTERS; PRESS RELEASE 

Section 3.1 Undertakings by the Raging Capital Group. (a) The Raging Capital Group hereby (i) irrevocably
withdraws the Nomination Letter and any nominations to the Board made prior to the date hereof, (ii) irrevocably ceases any proxy solicitation activities with respect to the Company in connection with the 2010 Annual Meeting,
(iii) irrevocably withdraws the demand to inspect certain of the Company’s book and records pursuant to the Section 220 Demand and (iv) irrevocably agrees that Raul K. Martynek, Kenneth H. Traub and James A.
Waskovich will cease to be members of the Raging Capital Group’s Section 13(d) “group” contemporaneously herewith. Within two business days of the date hereof, the Raging Capital Group shall file with the SEC an amendment to its
Schedule 13D with respect to the Company disclosing the material contents of this Agreement. 
 (b) From the date hereof until
the Termination Date, each member of the Raging Capital Group agrees that neither such member nor any of such member’s respective Affiliates or Associates (such Affiliates and Associates, collectively, the “Raging Capital
Affiliates”) shall, without the prior written consent of the Company, in any manner, directly or indirectly, acting alone or in concert with others: 

(i) make or propose (whether publicly or otherwise) any solicitation of proxies or consents to vote any voting securities
of the Company or any binding or nonbinding referendum with respect to Common Stock of the Company, or make, or in any way participate in, any “solicitation” of any “proxy” with respect to the Company within the meaning of Rule
14a-1 promulgated by the SEC under the Exchange Act (but without regard to the exclusion set forth in Rule 14a-1(1)(2)(iv) from the definition of “solicitation”); 

(ii) seek to advise or influence any Person with respect to the voting of any securities of the Company at the 2010
Annual Meeting; 
 (iii) form, join or in any way participate in a “group” (as defined under
Section 13(d) of the Exchange Act) with respect to the securities of the Company, other than the Section 13(d) “group” that includes all or some lesser number of the members of the Raging Capital Group; 

(iv) request the Company (or its directors, officers, employees or agents), directly or indirectly, to amend or waive any
provision of this Section 3.1(b), other than through non-public communications with the directors of the Company; 

 (v) take any action that might require the Company to make a public
announcement regarding any of the types of matters set forth above; or 
 (vi) enter into any discussions or
arrangements with any third party with respect to any of the foregoing. 
 Section 3.2 Voting of Raging Capital Group
Shares. Each member of the Raging Capital Group shall cause all shares of Common Stock beneficially owned, directly or indirectly, by such member, or by any Raging Capital Affiliate, as of the record date for the 2010 Annual Meeting, to be
present for quorum purposes and to be voted, at the 2010 Annual Meeting or at any adjournments or postponements thereof, in favor of the directors nominated by the Board for election at the 2010 Annual Meeting. 

Section 3.3 Press Release. The Company and the Raging Capital Group shall announce this Agreement and the material terms hereof by
means of a press release in the form attached hereto as Exhibit A as soon as practicable on or after the date hereof. 

Article IV 

REPRESENTATIONS AND WARRANTIES 

Section 4.1 Representations and Warranties. Each Party represents and warrants to the other Parties that: 

(a) such Party, if not a natural Person, has all requisite limited partnership, limited liability company or corporate
authority and power to execute and deliver this Agreement and to perform such Party’s obligations hereunder; 

(b) the execution and delivery of this Agreement by such Party and the performance of such Party’s obligations
hereunder have been duly and validly authorized by all required limited partnership, limited liability company, corporate or other action on the part of such Party and no other proceedings on the part of such Party are necessary to authorize the
execution and delivery of this Agreement by such Party or the performance of such Party’s obligations hereunder; 

(c) this Agreement has been duly and validly executed and delivered by such Party and constitutes the valid and binding
obligation of such Party, enforceable against such Party in accordance with its terms; and 
 (d) this execution
and delivery by such Party of Agreement and the performance of such Party’s obligations hereunder will not result in a violation of any terms or provisions of any (i) organizational document of such Party, (ii) agreement
to which such Party is a party or by which such Party may otherwise be bound or (iii) law, rule, license, regulation, judgment, order or decree governing or affecting such Party. 

 Article V 

OTHER PROVISIONS 

Section 5.1 Remedies; Governing Law. 

(a) The Parties agree that any breach of this Agreement would cause irreparable harm to the other Parties, that money
damages alone would not be a sufficient remedy and that the Parties shall be entitled to equitable relief, including injunction and specific performance, in the event of any breach or threatened breach of the provisions of this Agreement. The
Parties shall not oppose the granting of such relief, and shall waive any requirement for the securing or posting of any bond in connection with such remedy. Equitable relief shall not be deemed to be the exclusive remedy for breach of this
agreement, but shall be in addition to all other remedies available at law or in equity. 
 (b) The Parties
agree that the Court of Chancery or federal court of the State of Delaware shall have exclusive jurisdiction with respect to all actions and proceedings arising out of or relating to this Agreement, Each Parties hereby (i) consents to
submit itself to the personal jurisdiction of the Court of Chancery or federal court of the State of Delaware in the event any dispute between the Parties arises out or relates of this Agreement, (ii) agrees that it shall not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it shall not bring any action relating to this Agreement in any other court and irrevocably waives the right to trial
by jury in the event of any such dispute and (iv) irrevocably consents to service of process by delivery of notice complying with Section 5.3. 

(c) THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING WITHOUT LIMITATION VALIDITY, INTERPRETATION AND EFFECT,
BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW RULES OR PRINCIPLES OF SUCH STATE THAT WOULD PERMIT OR COMPEL THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION. 

Section 5.2 Entire Agreement. This Agreement contains the entire understanding of the Parties with respect to the subject matter
hereof and may be amended only by an agreement in writing executed by the Parties. 

 Section 5.3 Notices. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if when actually received during normal business hours at the address specified in this
subsection: 
 if to the Company, to: 

Bitstream Inc. 

500 Nickerson Road 

Marlborough, MA 01752 

Attention: Anna M. Chagnon, President and Chief Executive Officer 

with a copy to: 

Debevoise & Plimpton LLP 

919 Third Avenue 

New York, NY 10022 

Attention: Jeffrey J. Rosen 

                  William D. Regner 

if to any member of the Raging Capital Group, to: 

Raging Capital Management, LLC 

254 Witherspoon Street 

Princeton, NJ 08542 

Attention: William C. Martin 

with a copy to: 

Olshan Grundman Frome Rosenzweig & Wolosky LLP 

Park Avenue Tower 

65 East 55th Street 

New York, NY 10022 

Attention: Steven Wolosky 
 or
to such other address as any party hereto may, from time to time, designate in writing delivered pursuant to the terms of this Section 5.3. 

Section 5.4 Severability. If any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal,
void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement. 

 Section 5.5 Counterparts. This Agreement may be executed in two or more counterparts
(including by facsimile or PDF) which together shall constitute a single agreement. 
 Section 5.6 Successors and
Assigns. This Agreement shall not be assignable by any Party but shall be binding on successors of the Parties. 
 Section
5.7 No Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties hereto and is not enforceable by any other Person. 

Section 5.8 Fees and Expenses. Each of the Company, on the one hand, and the Raging Capital Group, on the other hand, shall be
solely responsible for all fees or expenses incurred by it in connection with this Agreement. 
 IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first above written. 
 BITSTREAM INC. 

By:  /s/  Anna M.
Chagnon                                      

        Name: Anna M. Chagnon 

        Title: President & Chief Executive Officer 

RAGING CAPITAL FUND, LP 

By:  Raging Capital Management, LLC 

        as General Partner 

By:  /s/ William C.
Martin                                      

        Name: William C. Martin 

        Title: Managing Member 

RAGING CAPITAL FUND (QP), LP 

By:  Raging Capital Management, LLC 

        as General Partner 

By:  /s/  William C.
Martin                                      

        Name: William C. Martin 

        Title: Managing Member 

 RAGING CAPITAL MANAGEMENT, LLC 

By:  /s/  William C.
Martin                                      

        Name: William C. Martin 

        Title: Managing Member 

WILLIAM C. MARTIN 

By:  /s/  William C.
Martin                                      

        Name: William C. MartinFirst Amendment to Credit Agreement

 Exhibit 10.1 

Execution Version 

FIRST AMENDMENT TO CREDIT AGREEMENT 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (“Amendment”) is entered into as of April 23, 2010, by and among The
Princeton Review, Inc., a Delaware corporation (“Borrower”), the other Loan Parties signatory hereto, the Lenders signatory hereto, and General Electric Capital Corporation, a Delaware corporation, as Administrative Agent for the
Lenders (the “Administrative Agent”). 
 RECITALS 

A. Borrower, the other Loan Parties signatory thereto, the Lenders signatory thereto from time to time and the Administrative Agent are
parties to that certain Credit Agreement, dated as of December 7, 2009, (the “Credit Agreement”). 
 B.
Borrower has requested that the Lenders amend the Credit Agreement in certain respects and the Lenders have agreed to amend the Credit Agreement, subject to the terms and conditions hereof. 

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and intending to be legally bound, the
parties hereto agree as follows: 
 A. AMENDMENTS 

1. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is amended by replacing the definitions of
“Consolidated EBITDA”, “Excluded Capital Expenditures”, “Excluded Equity Issuances” and “Excess Cash Flow” in their entirety with the following: 

“Consolidated EBITDA” means, with respect to any Person for any period, (a) the Consolidated Net
Income of such Person for such period plus (b) the sum of, in each case to the extent included in the calculation of such Consolidated Net Income but without duplication, (i) any provision for United States federal income taxes or other
taxes measured by income, (ii) Consolidated Interest Expense, amortization of debt discount and commissions and other fees and charges associated with Indebtedness, (iii) any loss from extraordinary items, (iv) any depreciation,
depletion and amortization expense, (v) any aggregate net loss on the Sale of property outside the ordinary course of business, (vi) any other non-cash expenditure, charge or loss for such period (other than any non-cash expenditure,
charge or loss relating to write-offs, write-downs or reserves with respect to accounts receivable and inventory), including the amount of any compensation deduction as the result of any grant of Stock or Stock Equivalents to employees, officers,
directors or consultants, (vii) restructuring charges of the Borrower incurred in fiscal year 2009 in an aggregate amount not to exceed $5,200,000 through September 30, 2009 and for subsequent periods as set forth on Schedule A 

 
hereto; and other restructuring amounts incurred (x) in periods in 2010 in connection with the New York, New York office consolidation and the reduction in the supplemental education
services business in an aggregate amount not to exceed $4,500,000 and (y) thereafter as proposed by the Borrower in reasonable detail, approved by a third party auditor and as reasonably agreed to by the Administrative Agent in an aggregate
amount not to exceed $4,500,000 (or such increased amount as approved by the Administrative Agent in its sole discretion) for the purpose of normalizing EBITDA, including adjustments for system integration and upgrade costs, duplicate technology and
related costs of improving technology efficiencies, in each case determined on a consolidated basis in accordance with GAAP, (viii) in connection with all Related Transactions, (A) (i) all financial advisory fees, accounting fees,
legal fees and other similar fees, transaction expenses and related out-of-pocket costs (to the extent not capitalized) incurred by all Group Members and (ii) non-recurring cash charges resulting from severance, restructuring, and integration
incurred within 12 months from the Closing Date as a result of the Acquisition as reasonably agreed to by the Administrative Agent and so long as such amounts in clauses (i) and (ii) do not exceed $10,800,000 in the aggregate, and
(B) an amount equal to the annualized cost savings implemented within 12 months from the Closing Date for headcount reductions and combined back office operations resulting from the Acquisition as reasonably agreed to by the Administrative
Agent and not to exceed $1,000,000 in the aggregate as set forth on Schedule B hereto, (ix) in connection with all Permitted Acquisitions (regardless of whether actually consummated) (or any other acquisition not meeting the definition of
“Permitted Acquisition” but as to which the Required Lenders had waived the relevant criteria set forth in the definition of “Permitted Acquisition”), (A) all financial advisory fees, accounting fees, legal fees and other
similar fees, transaction expenses and related out-of-pocket costs incurred by all Group Members, as reasonably agreed to by the Administrative Agent, and (B) non-recurring cash charges resulting from severance incurred within the first 12
months of the date of such Permitted Acquisition in an amount not to exceed $500,000 in the aggregate and reasonably agreed to by the Administrative Agent and resulting therefrom and (x) (1) start-up expenses as agreed to by the
Administrative Agent incurred in connection with or on behalf of other investments made in the Strategic Ventures in an aggregate amount not to exceed $7,500,000 in any trailing twelve month period ending on or prior to December 31, 2011 and
(2) any losses from the Strategic Ventures to the extent not offset by positive contributions to Consolidated Net Income from the Strategic Ventures; provided that, losses from Strategic Ventures shall not exceed $2,500,000 in any trailing
twelve month period and minus (c) the sum of, in each case to the extent included in the calculation of such Consolidated Net Income and without duplication, (i) any credit for United States federal income taxes or other taxes measured by
net income, (ii) any interest income, (iii) any gain from extraordinary items and any other non-recurring gain, (iv) any aggregate net gain from the Sale of property (other 

 

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than accounts (as defined in the applicable UCC) and inventory) out of the ordinary course of business by such Person, (v) any other non-cash gain, including any reversal of a charge
referred to in clause (b)(vi) above by reason of a decrease in the value of any Stock or Stock Equivalent, (vi) any other cash payment in respect of expenditures, charges and losses that have been added to Consolidated EBITDA of such Person
pursuant to clause (b)(vi) above in any prior period and (vii) any excess positive contributions to Consolidated Net Income from the Strategic Ventures which are not Loan Parties exceeding 10% of Consolidated EBITDA in the aggregate or such
higher amount as agreed to by the Administrative Agent. Notwithstanding the foregoing, EBITDA for each of the quarters during the 12 month period ending on September 30, 2009 shall be calculated in accordance with Schedule A attached hereto.

 “Excess Cash Flow” means, for any period, (a) Consolidated EBITDA of the Borrower for
such period, minus (b) without duplication, (i) any cash principal payment on the Loans during such period (but only, in the case of payment in respect of Revolving Loans, to the extent that the Revolving Credit Commitments are
permanently reduced by the amount of such payment) other than any mandatory prepayment required pursuant to Section 2.8(a) because of the existence of Excess Cash Flow, (ii) any scheduled or other cash principal payment made by the
Borrower or any of its Subsidiaries during such period on any Capitalized Lease Obligation or other Indebtedness (but only, if such Indebtedness may be reborrowed, to the extent such payment results in a permanent reduction in commitments thereof);
provided that if such payment is payment with respect to the Bridge Obligations, the Senior Subordinated Notes or the Junior Subordinated Notes, solely to the extent such payment is permitted by the applicable Subordination Agreement, (iii) any
Capital Expenditure made by such Person or any of its Subsidiaries during such period to the extent permitted by this Agreement, excluding any Excluded Capital Expenditures or any other Capital Expenditure to the extent financed through the
incurrence of Capitalized Lease Obligations or any long-term Indebtedness other than the Obligations and any Capitalized Lease Obligations, (iv) the Consolidated Cash Interest Expense of such Person for such period, (v) any cash losses
from extraordinary items, (vi) any cash payment made during such period to satisfy obligations for United States federal income taxes or other taxes measured by income, (vii) cash utilized for Permitted Investments described in
Section 8.3(d) and (e), (viii) cash utilized for Restricted Payments described in Section 8.5(c), (ix) restructuring charges of the Borrower incurred in fiscal year 2009 in an aggregate amount not to exceed
$5,200,000 as set forth through September 30, 2009 and for subsequent periods on Schedule A hereto; and other restructuring amounts incurred (x) in periods in 2010 in connection with the New York, New York office consolidation and
the reduction in the supplemental education services business in an aggregate amount not to exceed $4,500,000 and (y) thereafter as proposed by the Borrower in reasonable detail, approved by a third party auditor and in an aggregate

  

 3 

 
amount not to exceed $4,500,000 (or such increased amount as approved by the Administrative Agent in its sole discretion) for the purpose of normalizing EBITDA, including adjustments for system
integration and upgrade costs, duplicate technology and related costs of improving technology efficiencies, in each case determined on a consolidated basis in accordance with GAAP, (x) in connection with all Related Transactions,
(A) (i) all financial advisory fees, accounting fees, legal fees and other similar fees, transaction expenses and related out-of-pocket costs (to the extent not capitalized) incurred by all Group Members and (ii) non-recurring cash
charges resulting from severance, restructuring, and integration incurred within 12 months from the Closing Date as a result of the Acquisition as reasonably agreed to by the Administrative Agent and so long as such amounts in clauses (i) and
(ii) do not exceed $10,800,000 in the aggregate, and (B) an amount equal to the annualized cost savings implemented within 12 months from the Closing Date for headcount reductions and combined back office operations resulting from the
Acquisition as reasonably agreed to by the Administrative Agent and not to exceed $1,000,000, (xi) in connection with all Permitted Acquisitions (regardless of whether actually consummated) (or any other acquisition not meeting the definition
of “Permitted Acquisition” but as to which the Required Lenders had waived the relevant criteria set forth in the definition of “Permitted Acquisition”), (A) all financial advisory fees, accounting fees, legal fees and other
similar fees, transaction expenses and related out-of-pocket costs incurred by all Group Members, as reasonably agreed to by the Administrative Agent and (B) non-recurring cash charges resulting from severance incurred within the first 12
months of the date of such Permitted Acquisition in an amount not to exceed $500,000 in the aggregate and reasonably agreed to by the Administrative Agent and resulting therefrom, (xii) (1) start-up expenses as agreed to by the
Administrative Agent incurred in connection with or on behalf of other investments made in the Strategic Ventures in an aggregate amount not to exceed $7,500,000 in any trailing twelve month period ending on or prior to December 31, 2011 and
(2) any losses from the Strategic Ventures to the extent not offset by positive contributions to Consolidated Net Income from the Strategic Ventures; provided that, losses from Strategic Ventures shall not exceed $2,500,000 in any trailing
twelve month period, (xiii) expenses incurred in cash in connection with or on behalf of or other cash investments in the Strategic Ventures other than any such expenses or investments made from the proceeds of Excluded Stock Issuances and
(xiv) any increase in the Working Capital of the Borrower during such period (measured as the excess of such Working Capital at the end of such period over such Working Capital at the beginning of such period) and plus (c) without
duplication, (i) to the extent included in the calculation of Consolidated EBITDA pursuant to clause (b)(i) of the definition thereof, any provision for United States federal income taxes or other taxes measured by net income and
(ii) any decrease in the Working Capital of the Borrower during such period (measured as the excess of such Working Capital at the beginning of such period over such Working Capital at the end thereof). 

 

 4 

 “Excluded Capital Expenditures” means Capital Expenditures
funded, directly or indirectly, from the proceeds of the Closing Date Excess Equity Issuance or from the proceeds of Excluded Stock Issuances made after the Closing Date. 

“Excluded Stock Issuances” means (i) the Closing Date Excess Equity Issuance so long as the
Administrative Agent shall have received a pledge of the Borrower’s interest in the applicable Strategic Venture in which such proceeds were invested and (ii) the issuance or Sale by the Borrower of its own Stock after the Closing Date
(including, without limitation, $10,000,000 issued in connection with the First Amendment Equity Issuance (the “First Amendment Equity Carve Out Amount”), to the extent the proceeds thereof up to an aggregate amount not to exceed
$25,000,000 pursuant to this clause (ii) are to be used for Permitted Acquisitions, Capital Expenditures, payment of expenses incurred in connection with or on behalf of other investments made in the Strategic Ventures and other growth capital
needs of the Borrower; provided, further, that (x) the proceeds of such Excluded Stock Issuances shall not be used to cure any Default or Event of Default pursuant to Articles 5, 6, 7 or 8 hereof, (y) no such Excluded Stock Issuances shall
be permitted if an Event of Default has occurred and is continuing and (z) no proceeds from the underwriters’ exercise of the “Green Shoe” option with respect to the First Amendment Equity Issuance shall be deemed Excluded Stock
Issuances. 
 2. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is further amended by
inserting the following definitions in the appropriate alphabetical order: 
 “Closing Date Excess Equity
Issuance” means $15,000,000, representing the amount of the Cash Equity Investment in excess of $25,000,000 made on the Closing Date. 

“First Amendment” means that certain First Amendment to Credit Agreement, dated as of April 23,
2010. 
 “First Amendment Effective Date” means April 23, 2010. 

“First Amendment Equity Issuance” means the issuance by the Borrower of its Stock for cash on or about
the First Amendment Effective Date. 
 “National Labor College (of the AFL/CIO) Joint Venture
Documents” means collectively that certain Contribution Agreement, Penn Foster Services Agreement, NLC License Agreement, Limited Liability Company Agreement of NLC-TPR Services, LLC, NLC Payments Agreement, AFL-CIO License Agreement,
Marketing Services Agreement 
  

 5 

 
with Union Privilege and Services LLC Services Agreement, each dated on or about the First Amendment Effective Date. 

3. Amendment to Section 5.1. Section 5.1 of the Credit Agreement is amended by replacing such
Section 5.1 in its entirety with the following: 
 Section 5.1 Maximum Consolidated
Total Leverage Ratio. Borrower shall not have, on the last day of each Fiscal Quarter, a Consolidated Total Leverage Ratio greater than the maximum ratio set forth opposite such Fiscal Quarter: 

 

			
	 FISCAL QUARTER ENDING
	  	 MAXIMUM CONSOLIDATED TOTAL LEVERAGE
RATIO

	March 31, 2010 through and including June 30, 2010	  	5.00 to 1
		
	September 30, 2010	  	4.50 to 1
		
	December 31, 2010 through and including March 31, 2011	  	3.75 to 1
		
	June 30, 2011 through and including September 30, 2011	  	3.50 to 1
		
	December 31, 2011 through and including March 31, 2012	  	3.25 to 1
		
	June 30, 2012 through and including September 30, 2012	  	3.00 to 1
		
	December 31, 2012 through and including September 30, 2013	  	2.00 to 1
		
	December 31, 2013 through and including March 31, 2014	  	1.75 to 1
		
	June 30, 2014 through and including September 30, 2014	  	1.50 to 1

 4. Amendment to
Section 5.2. Section 5.2 of the Credit Agreement is amended by replacing such Section 5.2 in its entirety with the following: 

Section 5.2 Maximum Consolidated Senior Leverage Ratio. Borrower shall not have, on the last day of each
Fiscal Quarter, a Consolidated Senior Leverage Ratio greater than the maximum ratio set forth opposite such Fiscal Quarter: 
  

			
	 FISCAL QUARTER ENDING
	  	 MAXIMUM CONSOLIDATED SENIOR LEVERAGE
RATIO

	March 31, 2010 through and including September 30, 2010	  	1.50 to 1
		
	December 31, 2010	  	1.25 to 1
		
	March 31, 2011 through and including December 31 ,2011	  	1.00 to 1
		
	March 31, 2012 through and including June 30, 2013	  	0.75 to 1
		
	September 30, 2013 through and including September 30, 2014	  	0.50 to 1

  

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 5. Amendment to Section 5.3. Section 5.3 of the Credit Agreement is
amended by replacing such Section 5.3 in its entirety with the following: 
 Section 5.3
Minimum Consolidated Fixed Charge Coverage Ratio. Borrower shall not have, on the last day of each Fiscal Quarter set forth below, a Consolidated Fixed Charge Coverage Ratio for the four Fiscal Quarter period ending on such day less than the
following: 
  

			
	 FISCAL QUARTER ENDING
	  	 MINIMUM FIXED CHARGE COVERAGE RATIO

	March 31, 2010 through and including September 30, 2010	  	0.85 to 1
		
	December 31, 2010 through and including March 31, 2011	  	1.10 to 1
		
	June 30, 2011 though and including March 31, 2012	  	1.20 to 1
		
	June 30, 2012 though and including March 31, 2013	  	1.25 to 1
		
	June 30, 2013 through and including September 30, 2013	  	1.35 to 1
		
	December 31, 2013 through and including March 31, 2014	  	1.50 to 1
		
	June 30, 2014 through and including September 30, 2014	  	1.75 to 1

 Notwithstanding the
foregoing, for purposes of calculating the Consolidated Fixed Charge Coverage Ratio, (i) Fixed Charges for the Fiscal Quarter ending March 31, 2010, shall be calculated as Consolidated Fixed Charges for such Fiscal Quarter multiplied by
four (4), (ii) Consolidated Fixed Charges for the Fiscal Quarter ending June 30, 2010, shall be calculated as Consolidated Fixed Charges for the two (2) most recent Fiscal Quarters then ended multiplied by two (2), and
(iii) Consolidated Fixed Charges for the Fiscal Quarter ending September 30, 2010, shall be calculated as Consolidated Fixed Charges for the three (3) most recent Fiscal Quarters then ended multiplied by one and one third (1 1/3).

  

 7 

 6. Amendment to Section 6.1. Section 6.1 of the Credit Agreement is
amended by replacing paragraph (b) in its entirety with the following: 
 (b) Quarterly
Reports. As soon as available, and in any event within 45 days after the end of each Fiscal Quarter, the Consolidated unaudited balance sheet of the Borrower as of the close of such Fiscal Quarter and related Consolidated statements of
operations and cash flow for such Fiscal Quarter and that portion of the Fiscal Year ending as of the close of such Fiscal Quarter, setting forth in comparative form the figures for the corresponding period in the prior Fiscal Year and the figures
contained in the latest Projections, in each case, for the first three Fiscal Quarters of each Fiscal Year, certified by a Responsible Officer of the Borrower as fairly presenting in all material respects the Consolidated financial position, results
of operations and cash flow of the Borrower as at the dates indicated and for the periods indicated in accordance with GAAP (subject to the absence of footnote disclosure and normal year-end audit adjustments). 

7. Amendment to Section 8.1. Section 8.1 of the Credit Agreement is amended by replacing paragraph
(c) in its entirety with the following: 
 (c) Indebtedness consisting of Capitalized Lease
Obligations (other than with respect to a lease entered into as part of a Sale and Leaseback Transaction) and purchase money Indebtedness, in each case incurred by any Group Member to finance the acquisition, repair, improvement or construction of
fixed or capital assets of such Group Member, together with any Permitted Refinancing of any Indebtedness permitted hereunder in reliance upon this clause (c) and Guaranty Obligations of the Loan Parties with respect to such Indebtedness
of the Loan Parties; provided, however, that (i) the aggregate outstanding principal amount of all such Indebtedness does not exceed $800,000 at any time and (ii) the principal amount of such Indebtedness does not exceed the
lower of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed, whether directly or through a Permitted Refinancing, with such Indebtedness (each measured at the time such acquisition, repair,
improvement or construction is made); 
 8. Amendment to Section 8.3(e). Section 8.3(e) of the Credit
Agreement is amended by replacing the term “Excluded Equity Issuances” as used therein with the term “Excluded Stock Issuances”. 

9. Amendment to Section 8.4. Section 8.4 of the Credit Agreement is amended by replacing paragraph
(f) in its entirety with the following: 
 (f) so long as no Default is continuing or would result
therefrom, any issuance by Borrower for cash consideration of its own 
  

 8 

 
Stock, constituting common stock or if not common stock, Stock that is on terms and conditions and issued pursuant to documentation, acceptable in all respects to the Administrative Agent, and
upon 10 days prior written notice to the Administrative Agent, all of the Net Cash Proceeds of which are applied, substantially concurrently upon receipt to (i) the prepayment of the (A) Junior Subordinated Notes or (B) Bridge
Obligations in accordance with Section 8.6(e), and any accrued and unpaid interest, fees or expenses payable in connection therewith or (ii) in accordance with the prepayment provisions of Section 2.8(b). 

10. Amendments to Section 8.6. Section 8.6 of the Credit Agreement is amended by (i) deleting the word
“and” as it appears at the end of paragraph (d), (ii) deleting paragraph (e) in its entirety and (iii) adding the following new paragraphs (e) and (f): 

(e) prepay, in whole or in part, the Bridge Obligations with proceeds of (i) $30,000,000 from Stock issuances issued
on or prior to the First Amendment Effective Date, (ii) $5,800,000 from the underwriters’ exercise of the “Green Shoe” option with respect to the First Amendment Equity Issuance, and (iii) $5,000,000 from cash on hand; and

 (f) make any prepayments permitted under Section 8.4(f). 

11. Amendments to Section 8.11. Section 8.11 of the Credit Agreement is amended by (i) deleting the word
“or” as it appears at the end of paragraph (c), (ii) deleting the “.” as it appears at the end of paragraph (d) and replacing such “.” with “; or” and (iii) adding the following
new paragraph (e): 
 (e) waive or otherwise modify any term of any of the National Labor College (of the
AFL/CIO) Joint Venture Documents in any manner that materially and adversely affects the interests of any Secured Party under the Loan Documents or in the Collateral. 

12. Amendment to Schedule A. Schedule A of the Credit Agreement is amended by replacing such Schedule A in its
entirety with the following Schedule A attached hereto. 
 B. CONDITIONS TO EFFECTIVENESS 

Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the Lenders hereunder, it is
understood and agreed that this Amendment shall not become effective, and Borrower shall have no rights under this Amendment, until the Administrative Agent shall have received each of the following: 

(a) duly executed signature pages to this Amendment from the Required Lenders, Borrower, the Administrative Agent and each Loan Party;

 (b) fully executed copy of the First Amendment to the Senior Subordinated Notes Indenture, which shall be in full force and
effect on the date hereof and shall be in form 
  

 9 

 
and substance satisfactory to the Administrative Agent; 
 (c) fully
executed copy of the First Amendment to the Junior Subordinated Securities Purchase Agreement, which shall be in full force and effect on the date hereof and shall be in form and substance satisfactory to the Administrative Agent; 

(d) fully executed copy of the Second Amendment to the Bridge Note Purchase Agreement, which shall be in full force and effect on the
date hereof and shall be in form and substance satisfactory to the Administrative Agent; 
 (e) payment in full in cash of an
amendment fee in an amount equal to $50,000, to be paid pro rata to the Lenders based upon their Pro Rata Share of the Commitments as of the date hereof (the “Senior Amendment Fee”); provided, however, if a fee in
excess of the Senior Amendment Fee shall become due and payable in connection with the First Amendment to any of the Senior Subordinated Notes Indenture or the Junior Subordinated Securities Purchase Agreement, or the Second Amendment to the Bridge
Note Purchase Agreement (each, a “Junior Amendment Fee”), then the Senior Amendment Fee shall automatically be increased to the amount by which such Junior Amendment Fee exceeds the Senior Amendment Fee; 

(f) evidence that the Borrower shall have received cash proceeds of at least $10,000,000 from the First Amendment Equity Issuance; and

 (g) payment in full in cash of all fees and expenses of the Administrative Agent and the Lenders owing as of the date hereof,
including all reasonable fees and expenses of counsel to the Administrative Agent and the Lenders. 
 C. REPRESENTATIONS

 Each Loan Party hereby represents and warrants to the Lenders and Agent that: 

1. The execution, delivery and performance by such Loan Party of this Amendment (a) are within such Loan Party’s corporate or
similar powers and, at the time of execution hereof, have been duly authorized by all necessary corporate and similar action (including, if applicable, consent of holders of its Securities); (b) do not (i) contravene such Loan Party’s
Constituent Documents, (ii) violate any applicable material Requirement of Law, (iii) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material Contractual
Obligation of any Loan Party or any of its Subsidiaries (including other Related Documents or Loan Documents) other than those that would not, in the aggregate, have a Material Adverse Effect and are not created or caused by, or a conflict, breach,
default or termination or acceleration event under, any Loan Document or (iv) result in the imposition of any Lien (other than a Permitted Lien) upon any property of any Loan Party or any of its Subsidiaries; and (c) do not require any
Permit of, or filing with, any Governmental Authority or any consent of, or notice to, any Person, other than (i) with respect to the Loan Documents, the filings required to perfect the Liens created by the Loan Documents, (ii) those
listed on Schedule 1 hereto and that have been, or will be prior to the First Amendment Effective Date, obtained or made, copies of which have been, or will be prior to the First Amendment Effective Date, delivered to the Administrative
Agent, and each of which on the 
  

 10 

 
Closing Date will be in full force and effect and (iii) those that, if not obtained, would not, in the aggregate, have a Material Adverse Effect. 

2. This Amendment has been duly executed and delivered for the benefit of or on behalf of each Loan Party and constitutes a legal, valid
and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting
creditors’ rights and remedies in general; and 
 3. Both before and after giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing as of the date hereof. 
 D. OTHER AGREEMENTS 

1. Continuing Effectiveness of Loan Documents. As amended hereby, all terms of the Credit Agreement and the other Loan Documents
shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Loan Parties party thereto. To the extent any terms and conditions in any of the other Loan Documents shall contradict or
be in conflict with any terms or conditions of the Credit Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Credit Agreement as
modified and amended hereby. Upon the effectiveness of this Amendment such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Credit Agreement as modified and amended hereby.

 2. Reaffirmation of Guaranty. Each Guarantor consents to the execution and delivery by Borrower of this Amendment and
the consummation of the transactions described herein, and ratifies and confirms the terms of the Guaranty to which such Guarantor is a party with respect to the indebtedness now or hereafter outstanding under the Credit Agreement as amended hereby
and all promissory notes issued thereunder. Each Guarantor acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing any indebtedness of Borrower to the Lenders or any other obligation of
Borrower, or any actions now or hereafter taken by the Lenders with respect to any obligation of Borrower, the Guaranty to which such Guarantor is a party (i) is and shall continue to be a primary obligation of such Guarantor, (ii) is and
shall continue to be an absolute, unconditional, continuing and irrevocable guaranty of payment, and (iii) is and shall continue to be in full force and effect in accordance with its terms. Nothing contained herein to the contrary shall
release, discharge, modify, change or affect the original liability of any Guarantor under the Guaranty to which such Guarantor is a party. 

3. Acknowledgment of Perfection of Security Interest. Each Loan Party hereby acknowledges that, as of the date hereof, the
security interests and liens granted to the Administrative Agent and the Lenders under the Credit Agreement and the other Loan Documents are in full force and effect, are properly perfected and are enforceable in accordance with the terms of the
Credit Agreement and the other Loan Documents. 
 4. Effect of Agreement. Except as set forth expressly herein, all terms
of the Credit Agreement, as amended hereby, and the other Loan Documents shall be and remain in full 
  

 11 

 
force and effect and shall constitute the legal, valid, binding and enforceable obligations of Borrower to the Lenders and the Administrative Agent. The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement. This Amendment shall
constitute a Loan Document for all purposes of the Credit Agreement. 
 5. Governing Law. This Amendment shall be
governed by, and construed in accordance with, the internal laws of the State of New York and all applicable federal laws of the United States of America. 

6. No Novation. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit
Agreement and the other Loan Documents or an accord and satisfaction in regard thereto. 
 7. Costs and Expenses.
Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable out-of-pocket
costs expenses of outside counsel for Agent with respect thereto. 
 8. Counterparts. This Amendment may be executed by
one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of
this Amendment by facsimile transmission, Electronic Transmission or containing an E-Signature shall be as effective as delivery of a manually executed counterpart hereof. 

9. Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective
successors, successors-in-titles, and assigns 
 10. Entire Understanding. This Amendment sets forth the entire
understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto. 

11. Release. Each Loan Party hereby releases, acquits, and forever discharges Agent and each of the Lenders, and each and
every past and present subsidiary, affiliate, stockholder, officer, director, agent, servant, employee, representative, and attorney of the Administrative Agent and the Lenders, from any and all claims, causes of action, suits, debts, liens,
obligations, liabilities, demands, losses, costs and expenses (including reasonable attorneys’ fees) of any kind, character, or nature whatsoever, known or unknown, fixed or contingent, which such Loan Party may have or claim to have now or
which may hereafter arise out of or connected with any act of commission or omission of the Administrative Agent or the Lenders existing or occurring prior to the date of this Amendment or any instrument executed prior to the date of this Amendment
including, without limitation, any claims, liabilities or obligations arising with respect to the Credit Agreement or the other of the Loan Documents, other than claims, liabilities or obligations caused by the Administrative Agent’s or any
Lender’s own gross negligence or willful misconduct. The provisions of this paragraph shall be binding upon each Loan Party and shall inure to the benefit of the Administrative Agent, the Lenders, and their respective heirs, executors,
administrators, successors and assigns. 
 [remainder of page intentionally left blank; signature pages follow]

  

 12 

 IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first written
above. 
  

			
	 BORROWER:
  

THE PRINCETON REVIEW, INC.

		
	By:	 	/s/ Stephen C. Richards
		 	 Stephen C. Richards
 Chief
Operating Officer & Chief Financial Officer

  

			
	 OTHER LOAN PARTIES:
  

PRINCETON REVIEW OPERATIONS, L.L.C.

		
	By:	 	/s/ Stephen C. Richards
		 	 Stephen C. Richards

President and Chief Operating Officer

 

			
	TEST SERVICES, INC.
		
	By:	 	/s/ Stephen C. Richards
		 	 Stephen C. Richards
 Vice
President and Treasurer

  

			
	THE PRINCETON REVIEW OF ORANGE COUNTY, LLC
		
	By:	 	/s/ Stephen C. Richards
		 	 Stephen C. Richards
 Vice
President and Treasurer

  

			
	PENN FOSTER, INC.
		
	By:	 	/s/ Stephen C. Richards
		 	 Stephen C. Richards
 Chief
Operating Officer and Treasurer

  

			
	PENN FOSTER EDUCATION GROUP, INC.
		
	By:	 	/s/ Stephen C. Richards
		 	 Stephen C. Richards
 Vice
President and Treasurer

 [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT] 

			
	 ADMINISTRATIVE AGENT:
  

GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent and Lender

		
	By:	 	/s/ Philip Cox
		 	Its Duly Authorized Signatory

  

			
	 LENDERS:
  

FIFTEENTH INVESTMENT SPONSOR LIMITED, as Lender
  

By: General Electric Capital Corporation, as Servicer

		
	By:	 	/s/ Philip Cox
		 	Its Duly Authorized Signatory

[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT] 

 Schedule A 

See attached.

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