Document:

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                                                                     Exhibit 4.1

                                                   PEARSON PLC
3                                                  80 Strand
                                                   London WC2R 0RL

                                                   Telephone +44 (0)20 7010 2000
                                                   Facsimile +44 (0)20 7010 6060
                                                   www.pearson.com

January 28, 2005

CONFIDENTIAL

Peter Jovanovich

Re:      Employment with Pearson Education and its Affiliates

Dear Peter:

This letter ("Letter Agreement") outlines our arrangements regarding your
employment with Pearson Education Holdings Inc. (together with its successors
and assigns, the "Company"), Pearson plc, and their affiliates, as follows:

1.       Disability Leave: Duties. As we are both in agreement that you are no
longer able to perform any of the material and substantial duties of your job,
you will step down as President and Chief Executive Officer of the Company
effective January 31, 2005 (the "Disability Date"). You will also resign from
all other officer and director positions you hold with the Company, Pearson plc,
and their affiliates as of the Disability Date. As of the Disability Date, you
will relinquish all of your day-to-day duties and responsibilities as President
and Chief Executive Officer of the Company. We very much appreciate your offer
to make yourself available for appropriate consulting projects during the 18
month period following the Disability Date on a pro bono basis. We will be
discussing possible projects with you, but we acknowledge and agree that none of
the benefits outlined in this Letter Agreement is conditioned upon your taking
on or completing any such projects.

2.       Payments and Benefits. After the Disability Date, you will be entitled
to receive only the following payments and benefits (in each case subject to
applicable tax withholding):

         a.   Short Term Disability. With the assistance of the Company's Human
Resources Department, you will apply for benefits under the Company's Short-Term
Disability (STD) Plan. The STD Plan will provide you with 100% of your current
base salary ($890,000) from the Disability Date through the earlier of the date
of your death and the six month anniversary of the Disability Date (the "STD
Period").

         b.   Long Term Disability. Prior to the end of the STD Period, with the
assistance of and in consultation with the Company's Human Resources Department,
you will apply for benefits under the Company's Long-Term Disability (LTD) Plan.
Assuming you qualify and continue to qualify thereunder, UNUM, our insurance
carrier, will pay you (on a non-taxable basis, no less frequently than monthly,
and in approximately equal installments) $300,000 annually (60% of the first
$500,000 of your base salary), commencing on the six month anniversary of the
Disability Date and ending on the earlier of the date of your death and the date
you attain age 65 (the "LTD Period"), provided that for purposes of

REGISTERED OFFICE AT THE ABOVE ADDRESS, REGISTERED IN ENGLAND NUMBER 53723

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                                                                     pearson plc

paragraphs 2(c), 2(e), 2(f), 2(h) and 3, the LTD Period shall end upon your
knowingly rendering material services to a material competitor of the Company or
any of its affiliates ("Competitive Services").

         c.   Supplemental Long-Term Disability Benefits. During the LTD Period,
we will supplement your benefits under the LTD Plan and pay you (on a taxable
basis, no less frequently than monthly, and in approximately equal periodic
installments) $234,000 annually (60% of your base salary above $500,000, or 60%
of ($890,000 less $500,000)). In addition, to the extent that the $300,000 in
annualized non-taxable LTD payments discussed in paragraph 2(b) are not promptly
and fully paid to you throughout the LTD Period (e.g., because the LTD benefit
is reduced, eliminated, or delayed, or because you do not otherwise initially
qualify for the benefit), we will promptly make up any lost, reduced or delayed
payment to you, on a fully tax grossed-up basis (assuming taxation at the
highest applicable marginal rates), provided you have, in good faith, filed
applications, submitted to physical exams or interviews, and supplied other
information, in each case as may be required under the applicable LTD Plan or
UNUM policy; provided further that if all or any portion of any such make-up
payment is later paid by UNUM, you agree to promptly pay such amount, or assign
your right to such amount, to the Company. If during the LTD Period you receive
earnings for services rendered to any entity not affiliated with the Company or
Pearson plc, amounts otherwise payable to you under this paragraph 2(c) will be
reduced dollar-for-dollar by the amount of such earnings.

         d.   Benefits during the STD Period. During the STD Period, you will be
treated as an active employee for purposes of all of the equity, welfare,
pension, retirement and other benefit plans of the Company and its affiliates,
provided that following the Disability Date, you acknowledge that no new awards
will be made to you under any of the Pearson plc stock plans (other than any
awards made pursuant to the second sentence of paragraph 2(h)).

         e.   Benefits during the LTD Period.

               (i)  Medical, Dental and Vision Plans. Your coverage (and that of
your dependents) in the Pearson Inc. medical, hospitalization, dental and vision
plans and programs will continue during the LTD Period at the same level, and
with the same benefits, as are then provided to active employees of the Company
who participate in those plans and programs. You will be required to contribute
toward the costs of those plans and programs at the same level, and on the same
basis, as active employees.

              (ii) Life Insurance. Your coverage under the Pearson Inc. basic
life insurance plan will continue during the LTD Period at the same level in
force prior to the Disability Date. The Company will pay the full cost of this
coverage. You also are entitled to continue to participate, during the LTD
Period, in the supplemental life insurance plan at the same level in force prior
to the Disability Date, provided that you continue to pay premiums at no greater
a rate than the rate that then applies to active employees whose coverage
continues. You may apply to the insurance company for a wavier of premium for
the supplemental life coverage once you have been receiving LTD benefits for 6
months.

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                                                                     pearson plc

             (iii)  Vacation. At the expiration of the STD Period, you will
receive payment for any unused vacation days that are then accrued. You will
accrue vacation days during the STD Period, and will cease to accrue additional
vacation days upon the expiration of the STD Period.

              (iv)  Retirement Plans. At the expiration of the STD Period, you
(a) will cease to accrue additional benefits under, and (b) will be entitled to
apply for, and receive, benefits under the Pearson Inc. Pension Plan,
Supplemental Executive Retirement Plan, Pearson Inc. Retirement Plan (401k),
Pearson Excess Retirement Plan, and Pearson Inc. Share Bonus Plan in accordance
with the terms of those plans.

         f.   Individual Defined Contribution Arrangement. During both the STD
and LTD Periods, the Company will continue to credit your notional account under
your Individual Defined Contribution Arrangement (as described in our letter to
you dated June 13, 2003, with contributions at an annualized rate of $409,400
made in approximately equal periodic installments no less frequently than
monthly. All amounts credited to you under this arrangement (including, for
avoidance of doubt, notional interest) will be paid to you (or, in the event of
your death, to your nominated beneficiary) in a lump sum promptly following the
end of the LTD Period.

         g.   Annual Bonus. You will be paid your annual bonus in respect of
2004 in cash, such payment to be made at the time, and in the amount, that would
have applied if your active employment with the Company had continued
indefinitely, and determined without regard to any period of disability during
2004.

         h.   Pearson plc Stock Plans. The treatment of your outstanding awards
under the Pearson plc stock plans will governed by the terms of the applicable
plan documents and your individual award agreements, and, except with respect to
any plan intended to qualify under Section 401(a) or 423 of the Internal Revenue
Code, applied as if your active employment with the Company had continued
throughout the LTD Period. In the event that during the LTD Period, active
senior executives of the Company, Pearson plc, or any of their affiliates
receive special grants or awards in respect of grants or awards that correspond
to grants or awards that you received prior to the Disability Date, then you too
shall be entitled to receive corresponding special grants or awards, which
grants and awards shall be on terms and conditions (including relative amounts)
no less favorable than those received by continuing senior executives and shall
thereafter be treated as if your active employment with the Company had
continued throughout the LTD Period. The treatment of any awards or grants
described in the previous two sentences that are outstanding at the time of the
termination of the LTD Period will be governed by the terms of the applicable
plans and, to the extent that the Personnel Committee has discretion as to the
treatment of any such awards or grants, we will recommend to the Personnel
Committee that it exercise such discretion in the manner that is most favorable
to you or your beneficiaries, except where such termination is by reason of your
rendering Competitive Services.

3.       Indemnification/D&O Insurance.

         a.   In the event that any Claim is made, is threatened to be made, or
is reasonably anticipated to be made, against you that arise out of or relates
to your

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                                                                     pearson plc

employment by, or services for, the Company, Pearson plc, or any of their
affiliates, then you shall promptly be indemnified and held harmless to the
fullest extent permitted or authorized by the corporate governance documents of
the Company or Pearson plc, or if greater, by applicable law, against any and
all costs, expenses, liabilities and losses (including, without limitation,
attorneys' and other professional fees and charges reasonably incurred,
judgments, interest, expenses of investigation reasonably incurred, penalties,
fines, ERISA excise taxes or penalties, and amounts paid or to be paid pursuant
to settlements reasonably entered into) incurred or suffered by you in
connection therewith, and such indemnification shall continue through the STD
and LTD Periods, and thereafter, and shall inure to the benefit of your heirs,
executors and administrators. You shall be entitled to prompt advancement of any
and all costs and expenses (including, without limitation, attorneys' and other
professional fees and charges) incurred by you in connection with any such
Claim, or in connection with seeking to enforce your rights under this paragraph
3(a), any such advancement to be made within 15 days after you give written
notice, supported by reasonable documentation, requesting such advancement. Such
notice shall include and undertaking by you to repay the amount advanced if you
are ultimately determined not to be entitled to indemnification against such
costs and expenses. You shall be deemed to have met any standard of conduct
required for indemnification unless the contrary shall be established by the
Company or Pearson plc. Nothing in this Agreement, or the attached Release,
shall operate to limit or extinguish any right to indemnification, advancement
of expenses, or contribution that you would otherwise have (including, without
limitation, by agreement or under applicable law). For purposes of this
paragraph 3(a), "Claim" shall mean any claim, demand, investigation, dispute,
threat, discovery request, or request for testimony or information.

         b.   A directors' and officers' liability insurance policy (or
policies) shall be kept in place, until at least the sixth anniversary of the
Disability Date, providing coverage to you that is no less favorable to you in
any respect (including, without limitation, with respect to scope, exclusions,
amounts, and deductibles) than the coverage then being provided to any active
senior executive or director of the Company or any active director of Pearson
plc.

4.       Cessation of all other Compensation and Benefits. You will not receive
compensation, payments or benefits of any kind from the Company, Pearson plc or
its affiliates in respect of any period that ends after the Disability Date
other than those set forth in paragraphs 2 and 3 above, and you expressly
acknowledge and agree that, except with respect to the payments and benefits
specifically set forth in this Letter Agreement, you are not entitled to any
compensation, payment or benefit from the Company, Pearson plc or its affiliates
whatsoever, including, without limitation, any right to payments or benefits
under your letter of employment dated October 9, 2000 and subsequent amendments
or supplements thereto (the "Employment Agreement").

5.       Restrictive Covenants. The covenants and agreements made by you in
paragraphs 12, 13 and 14 of your Employment Agreement shall remain in full force
and effect in accordance with their terms, with the expiration of the STD Period
treated as your last day of employment for purposes of paragraph 12.
Notwithstanding the forgoing, you shall be entitled to retain, and not return to
the Company, your personal rolodex, personal

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                                                                     pearson plc

correspondence files, documents relating to your personal entitlements and
obligations, and the like.

6.       Release. In order to be entitled to the payments and benefits set forth
in paragraphs 2(c), 2(e)(i) and the second sentence of 2(h), and in
consideration therefor, you must (i) deliver a signed and dated copy of the
attached Release no later than February 21, 2005, and (ii) not subsequently
revoke your execution of such Release.

7.       Assignability; Binding Nature.

         a.   This Letter Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, heirs (in your case) and
assigns.

         b.   No rights or obligations of the Company or Pearson plc under this
Letter Agreement may be assigned or transferred by the Company or Pearson plc
(each a "Company Transferor") except that such rights and obligations may be
assigned or transferred pursuant to a merger, consolidation or other combination
in which the Company Transferor is not the continuing entity, or a sale or
liquidation of all or substantially all of the business and assets of the
Company Transferor, provided that the assignee or transferee is the successor to
all or substantially all of the business and assets of the Company Transferor
and such assignee or transferee expressly assumes the liabilities, obligations
and duties of the Company Transferor as set forth in this Agreement.

         c.   None of your rights or obligations under this Agreement may be
assigned or transferred by you other than your rights to compensation and
benefits, which may be transferred only by will or by operation of law.
Notwithstanding the previous sentence, you shall be entitled, to the extent
permitted under applicable plans, programs and arrangements of the Company,
Pearson plc, and their affiliates, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit hereunder following your
death by giving written notice thereof. In the event of your death or a judicial
determination of your incompetence, references in this Letter Agreement to you
shall be deemed, where appropriate, to refer to your beneficiary, estate or
other legal representatives.

8.       Miscellaneous. This Letter Agreement may be executed in several
counterparts, each or which shall be deemed to be an original but all of which
together will constitute one and the same instrument. Signatures delivered by
facsimile shall be effective for all purposes. This Letter Agreement constitutes
the entire agreement, and supersedes all prior agreements, of the parties hereto
relating to the subject matter hereof, except to the extent otherwise set forth
herein, and there are no written or oral terms or representations made by any
party other than those contained herein and therein. This Letter Agreement
cannot be modified, altered or amended except by a writing signed by all the
parties. No waiver by either party of any provision or condition of this Letter
Agreement at any time shall be deemed a waiver of such provision or condition at
any prior or subsequent time or of any provision or condition at the same or any
prior or subsequent time. This Letter Agreement and attached Release shall be
governed by and construed in accordance with the domestic laws of the State of
New York, except to the extent preempted by federal law, without giving effect
to any choice of law or conflict of law provision or rule (whether of the

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                                                                     pearson plc

State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York. You are under no
obligation to seek other employment or otherwise mitigate our obligations under
this Letter Agreement. Other than as expressly set forth in this Letter
Agreement, there shall be no offset against amounts or benefits due to you under
this Letter Agreement (or otherwise) because of any benefit or remuneration you
receive after the Disability Date. In the event of any inconsistency between any
provision of this Letter Agreement and any provision of any plan, program,
policy, agreement, corporate governance document, or other arrangement of the
Company, Pearson plc, or any of their affiliates, the provisions of this Letter
Agreement shall control. The headings of the paragraphs and subparagraphs
contained in this Letter Agreement are for convenience only and shall not be
deemed to control or affect the meaning or construction of any provision of this
Letter Agreement.

9.       Notices. Signed and dated copies of this Letter Agreement, the Release,
and any revocation of the Release should be sent by mail, courier, or facsimile
to:

                                          Richard Glicini
                                          Senior Vice President, Human Resources
                                          Pearson Education
                                          One Lake Street
                                          Upper Saddle River, NJ  07458
                                          (201) 236-3370 (tel)
                                          (201) 236-3382 (fax)

10.      Public Announcement. You and we will agree on the form of all
statements to be made to employees, analysts, the media and the public generally
relating to the subject matter of this Letter Agreement.

11.      Acknowledgement. By signing this Letter Agreement and attached Release,
you certify that you have read the terms of this Letter Agreement and Release,
and that your execution of this Letter Agreement and Release shall indicate that
this Letter Agreement and Release conforms to your understanding and is
acceptable to you as a final agreement. You further acknowledge and agree that
you have been advised of the opportunity to consult with counsel of your choice
and that you have been given a reasonable and sufficient period of time in which
to consider and return this Letter Agreement and attached Release.

Sincerely,

Pearson plc

By:  /s/ David Bell
------------------------------
Name:  David Bell
Title: Executive Director

Pearson Education Holdings Inc.

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                                                                     pearson plc

By:  /s/ Richard Gligini
-----------------------------
Name:  Richard Gligini
Title: SVP, Human Resources, Pearson Education

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                                                                     pearson plc

ACCEPTED AND AGREED

/s/ Peter Jovanovich
-----------------------------
Peter Jovanovich

Date: 28/01/05
-----------------------------

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                                     RELEASE

I, Peter Jovanovich, the undersigned, irrevocably and unconditionally release,
remise, and forever discharge Pearson Education Holdings Inc. (the "Company")
and the Releasees (as defined below) from, any and all agreements, promises,
liabilities, claims and demands of any kind, in law or equity, whether known or
unknown, suspected or unsuspected, which I, my heirs, executors, administrators,
successors or assigns ever had, or now have against the Company or any Releasee
that arises out of or relates to my employment with, or services for, the
Company, Pearson plc, or any of their affiliates, or the termination thereof,
including (without limitation and to the extent set forth herein) any and all
contract claims, benefit claims, tort claims, fraud claims, claims for payments,
bonuses, severance, defamation, disparagement, or any other personal injury
claims, claims relating to retirement, pension or unemployment, arising out of
or relating to my status as a stockholder of Pearson plc, my employment,
compensation and benefits with the Company or the Releasees, and/or the
termination thereof, and any and all claims of unfair or unjust dismissal or
discrimination on any basis including but not limited to on the basis of age,
race, gender, disability, ethnic or national origin, sexual orientation, and
claims for costs, expenses and attorneys' fees with respect thereto existing, in
each case arising or occurring at any time up to and including the date I
execute this Release, provided, however, that nothing herein shall release,
waive, or otherwise affect any claim or right arising under, or preserved by,
the terms of the Letter Agreement between me and the Company, dated January 28,
2005 (the "Letter Agreement"), or preclude my participation as a class member in
any class action or derivative action against Pearson plc where I am not a named
defendant, provided that I agree that I shall in no way initiate or encourage
the initiation of the filing of any such action. This Release specifically
includes, without limitation and to the extent set forth above, any and all
claims under the Age Discrimination in Employment Act, 29 U.S.C. Section 621 et
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000(e), the
Americans with Disabilities Act, 42 U.S.C. 1201, et seq., the Employee
Retirement Income Security Act of 1974, any and all other federal, state and/or
local statutes, ordinances, regulations or common laws, and any and all claims
for benefits under any compensation, bonus or benefit plan, program or policy of
the Company or the Releasees. For purposes of this Letter Agreement, the term
"Releasee" includes Pearson plc, its direct and indirect subsidiaries, insurers,
affiliates, its and their past, present and future predecessors, successors and
assigns, and its and their current, former and future officers, directors,
employees, stockholders, representatives, agents, and attorneys, in their
official and/or individual capacities, jointly and individually.

I understand that I have a period of up to 21 days to review and consider this
Release. I further understand that once I have signed this Release, I may revoke
it at any time during the 7 days following its execution by delivering a written
notice of revocation as provided in paragraph 9 of the Letter Agreement.

I ACKNOWLEDGE THAT I HAVE READ THIS RELEASE AND I UNDERSTAND AND ACCEPT ITS
TERMS

-------------------------------------                     ----------------------
Peter Jovanovich                                          Date<PAGE>

                                                                     EXHIBIT 4.2

                                                                  CONFORMED COPY

               IRREVOCABLE UNDERTAKINGS IN RESPECT OF AN OFFER BY

                               RETOS CARTERA, S.A.

                                FOR THE SHARES OF

                      RECOLETOS GRUPO DE COMUNICACION, S.A.

In Madrid, on 14 December, 2004

                                    BETWEEN

ON THE ONE SIDE

PEARSON PLC, a company duly incorporated under the laws of England and Wales,
with registered office at 80 Strand, London WC2R 0RL, England, and with
registration number 00053723 (hereinafter, "PEARSON"), duly represented by Mr.
Timothy Scott Henderson, of legal age, of Canadian nationality, with Canadian
Passport number BC253786 and with business address at 80 Strand, London WC2R
0RL, England, by virtue of a notarized and apostilled power of attorney dated 9
December 2004.

ON THE OTHER SIDE

RETOS CARTERA, S.A., a company duly incorporated under the laws of Spain, with
registered office at C/ Carbonero y Sol, n(degrees) 12, Madrid, Spain, and with
tax identification number A-84154046 (hereinafter, the "OFFEROR"), duly
represented by Mr. Jaime Castellanos Borrego, of legal age, of Spanish
nationality, with National Identity Card number 14.899.002 Q and with business
address at Paseo de la Castellana, n(degrees) 66, Madrid, Spain, in his capacity
as Managing Director (Consejero Delegado) of OFFEROR and by virtue of a
notarized power of attorney dated 14 December 2004 and granted by the Board of
Directors of OFFEROR.

PEARSON and OFFEROR shall be hereinafter jointly referred to as the "PARTIES",
and each of them individually as a "PARTY".

                                     WHEREAS

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                                                                  CONFORMED COPY

I.    RECOLETOS GRUPO DE COMUNICACION, S.A. (hereinafter, "RECOLETOS" or the
      "COMPANY"), a company duly incorporated under the laws of Spain, with
      registered office at Paseo de la Castellana, n(degrees) 66, Madrid, Spain,
      is the parent of a group of companies whose main activity is media and
      publishing.

      RECOLETOS has a share capital of Euro 26,142,749.80, represented by
      130,713,749 ordinary shares of Euro 0.20 nominal value each, all of them
      listed on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges and
      included in the Spanish Automated Quotation System (Mercado Continuo).

II.   PEARSON OVERSEAS HOLDINGS LIMITED, a company duly incorporated under the
      laws of England and Wales, with registered office at 80 Strand, London
      WC2R 0RL, England, and with registration number 00145205 (hereinafter,
      "POHL") is a wholly-owned subsidiary of PEARSON and PEDIFRI, S.L., a
      company duly incorporated under the laws of Spain, with registered office
      at Paseo de la Castellana, n(degrees) 66, Madrid, Spain, and with tax
      identification number B-79561478 (hereinafter, "PEDIFRI"), is, in turn, a
      wholly-owned subsidiary of POHL. POHL and PEDIFRI, in turn, respectively
      own 94,005,598 and 9,169,198 shares of RECOLETOS (together, hereinafter
      the "SHARES") (71.92% and 7.01% of the share capital of the Company).

III.  OFFEROR is a newly incorporated company with an issued share capital of
      Euros 12,950,000, divided into 12,950,000 shares of Euro 1.00 nominal
      value each, all fully subscribed and paid up, and subordinated
      participating loans (prestamos participativos) from its shareholders in an
      aggregate nominal amount of Euro 160,050,000. Attached hereto as Annex 1
      to this Agreement is a chart showing the shareholding and participating
      loan structure of OFFEROR.

IV.   OFFEROR is interested in acquiring the Shares. Due to the fact that
      RECOLETOS is a listed company in Spain, and in accordance with the
      provisions of the Spanish securities markets regulations, such acquisition
      may only be achieved by OFFEROR through a public tender offer over 100% of
      the shares issued by RECOLETOS, thus giving the minority shareholders of
      RECOLETOS the opportunity to sell their shares in the Company.

V.    OFFEROR therefore intends to launch a public tender offer over RECOLETOS
      in accordance with, and subject to, the provisions of clause 1 below
      (hereinafter, the "OFFER").

VI.   For the purposes referred to under IV above, the Parties have held
      negotiations aimed at establishing the terms and conditions upon which
      PEARSON would be prepared irrevocably to undertake, subject to the terms
      of this Agreement, to procure that POHL and PEDIFRI accept the Offer or
      otherwise to procure that OFFEROR acquires, directly or indirectly, the
      Shares.

VII.  All payment obligations arising out of the Offer (therefore including
      payment of the price of the Shares) have been secured by means of four
      bank guarantees, each dated the date hereof, for an amount of Euro
      365,354,992.80, Euro 240,000,000,

<PAGE>

                                                                  CONFORMED COPY

      Euro 246,000,000 and Euro 90,000,000, provided by Banco Espanol de
      Credito, S.A. ("BANESTO"), Calyon, Sucursal en Espana ("CALYON"), Caja de
      Ahorros y Monte de Piedad de Madrid ("CAJA MADRID") and Caja de Ahorros
      del Mediterraneo ("CAM") respectively, as required by Royal Decree
      1197/1991, of July 26, as amended, on rules governing tender offers
      (hereinafter, "ROYAL DECREE 1197/1991") (hereinafter, the "OFFER
      GUARANTEES"), a copy of each of which is attached as Annex 2 hereto.

VIII. In addition, any payment obligations of OFFEROR in respect of the units
      (participaciones) of PEDIFRI arising as a consequence of exercise by
      PEARSON of the PEDIFRI Put Option (as defined below) have been secured by
      means of four bank guarantees, each dated the date hereof, for an amount
      of Euro 22,129,686, Euro 14,546,891.30, Euro 14,900,313.50 and Euro
      5,441,334.20, provided by BANESTO, Calyon, Caja Madrid and CAM
      respectively (hereafter the "PEDIFRI GUARANTEES"), a copy of each of which
      is attached as Annex 3 hereto.

IX.   Now therefore, the Parties have decided to enter into this agreement in
      respect of the Offer (hereinafter, the "AGREEMENT"), which shall be
      governed by the following

                                    CLAUSES

1.    IRREVOCABLE UNDERTAKING OF OFFEROR

1.1.  OFFEROR hereby expressly and irrevocably undertakes to submit to the
      Spanish Comision Nacional del Mercado de Valores (hereinafter, the
      "CNMV"), not later than the next Business Day (hereinafter, a "BUSINESS
      DAY" being a day other than a Saturday or Sunday or public holiday in the
      city of Madrid) following the date of this Agreement, a request for the
      authorization of the Offer (hereinafter, the "AUTHORIZATION"), together
      with an "hecho relevante", the prospectus (in a form identical to the
      draft attached as Annex 4 hereto) (hereinafter, the "PROSPECTUS"), the
      Offer Guarantees and the remaining documentation required by Royal Decree
      1197/1991, other than the administrative authorizations and clearances
      from the authorities referred to in sub-clause 1.4 below (provided that
      OFFEROR shall deliver to the CNMV on the date such applications or
      submissions are made copies of the relevant application and submissions to
      such authorities and shall deliver to the CNMV as soon as they are
      available the relevant authorizations and clearances). OFFEROR shall
      diligently progress and pursue the obtaining of the Authorization and,
      subject to and conditional upon the Authorization having been obtained,
      shall launch the Offer and seek diligently to ensure that the Offer
      achieves a positive result, in each case within the briefest possible
      timeframe.

1.2.  The Offer shall be subject to the following terms and conditions:

<PAGE>

                                                                  CONFORMED COPY

      (i)   It must be an offer for 100% of the shares of RECOLETOS.

      (ii)  It may be conditioned to the acquisition of 71.92% or less of the
            shares of RECOLETOS.

      (iii) The consideration of the Offer shall be Euro 7.20 per share (the
            "OFFER PRICE") and each offeree shall, in addition to the Offer
            Price, be offered the Deferred Contingent Offer Consideration as
            described more fully in clause 9.

      (iv)  The Offer Price and the Deferred Contingent Offer Consideration
            shall be fully paid in cash.

      (v)   The acceptance period of the Offer shall be two months.

1.3.  Notwithstanding the provisions of sub-clause 1.1. above, in the event
      that, prior to the submission of the request for the Authorization, any
      third party had submitted a request for the authorization of another
      tender offer in respect of some or all of the shares of RECOLETOS under
      which, in the case of an all cash offer, the offer price is the same or
      higher than the Offer Price or, in the case of any other offer, the
      consideration offered for each RECOLETOS share is (as at the date of such
      third party's request) as valuable as, or more valuable than, the
      consideration offered for each RECOLETOS share under the Offer in the
      reasonable opinion of Lazard Asesores Financieros, S.A. ("LAZARD"), then
      OFFEROR shall have to choose (and shall immediately inform PEARSON of its
      choice), during five (5) Business Days from the announcement of the
      submission of the prior tender offer by the third party, between the
      following:

      (i)   not to submit the Offer, in which case both Parties will be released
            from their respective obligations under this Agreement without any
            liability arising therefrom; or

      (ii)  to submit the Offer as a competing offer of the prior third party's
            tender offer, therefore increasing the price of the Offer. OFFEROR
            undertakes that any such competing offer it makes will continue to
            satisfy the terms and conditions of this Agreement, save that the
            Offer Price shall be higher (if necessary). If such a competing
            offer is launched by OFFEROR:

            (A)   PEARSON's undertakings to procure acceptance of the Offer in
                  sub- clause 2.2(i) and sub-clause 2.2(ii) of this Agreement
                  shall be deemed to be undertakings to procure acceptance of
                  such improved competing offer on the terms set out herein; and

            (B)   in the event that PEARSON exercises the PEDIFRI Put Option in
                  such circumstances, the total price payable for the PEDIFRI
                  units under sub-clause 3.3 shall be increased by the total
                  additional amount which would have been payable by OFFEROR for
                  the Shares in RECOLETOS held by PEDIFRI were PEDIFRI to have
                  accepted OFFEROR's improved competing offer for such Shares.

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                                                                  CONFORMED COPY

1.4.(i) OFFEROR shall notify or, if appropriate, procure that its shareholders
        shall notify the Offer to the competent anti-trust authorities in Spain
        and Portugal and,to the extent legally required, any other regulatory
        authorities within five (5) Business Days as from the date of submission
        to the CNMV of the request for the Authorization, unless prior to that
        date OFFEROR has received oral (to be confirmed by OFFEROR or its legal
        counsel to PEARSON in writing) or written confirmation from the
        authority concerned that no notification is required in connection with
        the Offer, and OFFEROR shall diligently seek to ensure that it obtains
        any necessary clearances from such authorities within the briefest
        possible timeframe.

   (ii) OFFEROR undertakes likewise to apply for the relevant authorizations of,
        and/or make the appropriate notifications to, the Ministry of Industry,
        Commerce and Tourism and the relevant Autonomous Regions, as required by
        applicable legislation in connection with the television and radio
        concessions held by RECOLETOS and its subsidiaries and affiliates within
        the five (5) Business Days following the date of submission to the CNMV
        of the request for the Authorization and shall diligently seek to ensure
        that it obtains any necessary clearances and approvals from such
        authorities in the briefest possible timeframe.

1.5. Unless OFFEROR has notified PEARSON within the terms of sub-clause 1.3 that
     it has decided not to submit the Offer and subject to termination under any
     other provision of this Agreement, OFFEROR undertakes to make and complete
     the Offer (including, where necessary, making and completing the Offer on a
     modified basis to include or conform with any condition, conditions or
     amendments imposed by the CNMV, any competent anti-trust authorities or any
     other competent regulatory authorities unless such condition or conditions
     falls within sub-clause 1.6(i) and PEARSON is not prepared to agree to it
     or them or within sub-clause 1.7(i) and OFFEROR is not prepared to agree to
     it or them).

1.6. If:

   (i) the CNMV, any competent anti-trust authorities or any other competent
       regulatory authorities require any amendments or impose one or more
       conditions for the transaction which would have a material adverse effect
       on PEARSON (and any such condition or amendment which:

      (A) could reduce the consideration (including in respect of Deferred
          Contingent Offer Consideration) receivable by POHL or PEDIFRI in
          respect of the Shares; or

      (B) could reduce the consideration (including in respect of Deferred
          Contingent Offer Consideration) receivable by POHL in respect of the
          units in PEDIFRI,

      shall be deemed to be a material adverse effect for these purposes); or

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   (ii) OFFEROR has not exercised the OFFEROR Call Option prior to the expiry of
        the OFFEROR Call Option Period (as such terms are defined in sub- clause
        2.1); or

   (iii) the legal notice referred to in Article 18 of Royal Decree 1197/1991 in
         respect of the Offer has not been published by 14 April 2005,

   and this Agreement has not been previously terminated in accordance with its
   terms, then PEARSON shall have the right (but not the obligation) to
   terminate this Agreement with immediate effect on written notice to OFFEROR.

1.7. If:

   (i) the CNMV, any competent anti-trust authorities or any other competent
       regulatory authorities deny approval of the Offer or require any
       amendment or impose one or more conditions for the transaction which
       would have a material adverse effect on the business of RECOLETOS taken
       as a whole (and any such condition or amendment which is imposed by the
       authorities in relation to the television and radio concessions referred
       to in sub-clause 1.4 (ii) shall be deemed not to have a material adverse
       effect for these purposes) or which could increase the Offer Price to
       more than E7.20 per RECOLETOS share; or

  (ii) the legal notice referred to in Article 18 of Royal Decree 1197/1991 in
       respect of the Offer has not been published by 14 July 2005,

   and this Agreement has not been previously terminated in accordance with its
   terms, then OFFEROR shall have the right (but not the obligation) to
   terminate this Agreement with immediate effect on written notice to PEARSON.

1.8. Following any termination under sub-clauses 1.6 and 1.7, neither party
     shall have any claim against the other save for any rights which PEARSON
     may have against OFFEROR in respect of OFFEROR's failure to comply with its
     obligations under sub-clause 1.1, sub-clause 1.4 or sub-clause 1.5.

1.9. OFFEROR shall promptly notify PEARSON, and provide copies, of any
     communications from the CNMV, any competent anti-trust authority or any
     other competent regulatory authority in relation to obtaining the
     Authorization and any other relevant clearances. Where reasonably requested
     by PEARSON, OFFEROR shall provide PEARSON (or advisers nominated by
     PEARSON) with draft copies of all submissions and communications to the
     CNMV and any such other authority in relation to obtaining the
     Authorization and any other relevant clearances at such time as will allow
     PEARSON a reasonable opportunity to provide comments on such submissions
     and communications before they are submitted or sent to the CNMV or such
     other relevant authority. OFFEROR shall take into account any such comments
     as are reasonable and provide PEARSON (or advisers nominated by PEARSON)
     with copies of all such submissions and communications in the form
     submitted or sent. Where reasonably requested by PEARSON and where
     permitted by the CNMV or the other relevant authority

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                                                                  CONFORMED COPY

      concerned, OFFEROR shall allow persons nominated by PEARSON to attend all
      meetings with the CNMV or such other relevant authorities in relation to
      obtaining the Authorization and any other relevant clearances and, where
      appropriate, to make oral submissions at such meetings. If necessary and
      where reasonable grounds exist for expecting that such action by OFFEROR
      could be successful, OFFEROR shall fully defend any court or
      administrative action which the CNMV or any competent anti-trust authority
      or any other regulatory authority may bring to prohibit, enjoin or modify
      the Offer and/or the other transactions contemplated by this Agreement.

1.10. For the avoidance of doubt, none of the following shall affect any of
      OFFEROR's obligations or undertakings under this Agreement, including,
      without limitation its obligations and undertakings to make and complete
      the Offer and its obligations and undertakings to act diligently:

     (i) a third party submitting at any time a request for the authorization of
         another tender offer over any RECOLETOS shares at a price lower than
         the Offer Price;

    (ii) a third party submitting following the submission of the request for
         the Authorization a request for the authorization of another tender
         offer over any RECOLETOS shares at a price equal to or higher than the
         Offer Price; and

   (iii) a third party taking any action in relation to any of the types of
         tender offers referred to in sub-clauses 1.10(i) and 1.10(ii) above.

2. IRREVOCABLE UNDERTAKING OF PEARSON

2.1. Subject to sub-clauses 1.3, 1.6, 1.7, 1.8 and 2.5, PEARSON hereby grants an
     option to OFFEROR (the "OFFEROR CALL OPTION") (which may be exercised by
     OFFEROR at any time during the period commencing on the later of (i) 1
     January 2005 and (ii) the date of commencement of the acceptance period of
     the Offer, and ending five (5) Business Days later (the "OFFEROR CALL
     OPTION PERIOD")) to require PEARSON to comply with sub-clause 2.2. The
     OFFEROR Call Option may only be exercised by OFFEROR giving notice in the
     form set out in Annex 5 hereto (the "OFFEROR EXERCISE NOTICE").

2.2. Subject to OFFEROR giving the Offeror Exercise Notice pursuant to
     sub-clause 2.1 above and to sub-clauses 1.3, 1.6, 1.7, 1.8 and 2.5, PEARSON
     hereby expressly and irrevocably undertakes (provided that the Offer is
     capable of acceptance in accordance with the applicable tender offers
     regulations):

     (i) to procure acceptance of the Offer in respect of all of the Shares; or

    (ii) to procure acceptance of the Offer in respect of all of the Shares
         held directly by POHL and to serve the PEDIFRI Exercise Notice (as
         defined in sub-clause 3.2 below),

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                                                                  CONFORMED COPY

     in each case within five (5) Business Days of receipt by PEARSON of the
     Offeror Exercise Notice; and if the Offer is not capable of acceptance
     within such period but the Offer subsequently becomes capable of acceptance
     in accordance with the applicable tender offers regulations then PEARSON
     shall, subject always to the other provisions of this Agreement, comply
     with any obligations under this subclause 2.2 as soon as reasonably
     practicable in the circumstances.

2.3. (Subject always to the termination provisions in sub-clauses 1.3, 1.6, 1.7
     and 1.8) As a consequence of the foregoing provisions of this clause 2:

      (i) PEARSON expressly and irrevocably undertakes to procure that:

        (A) neither POHL nor PEDIFRI shall transfer the Shares, under any legal
            title, to any third party;

        (B) POHL shall not transfer the units of PEDIFRI, under any legal title,
            to any third party; and

        (C) neither POHL nor PEDIFRI shall accept any tender offer over
            RECOLETOS competing with the Offer, whether previous or subsequent
            to the Offer and regardless of the price of said tender offer; and

      (ii) PEARSON shall procure that neither POHL nor PEDIFRI shall accept the
           Offer at any time prior to the OFFEROR Call Option Period or, unless
           and until the Offeror Exercise Notice is given pursuant to sub-clause
           2.1 above, during the OFFEROR Call Option Period, but without
           prejudice to PEARSON's rights to procure acceptance of the Offer and
           to exercise the PEDIFRI Put Option (as defined in sub-clause 3.1
           below) at any time after the expiry of the OFFEROR Call Option
           Period.

2.4. For the avoidance of doubt:

       (i) each of POHL and PEDIFRI shall remain legal and beneficial owner of
           its respective Shares unless and until it accepts the Offer and the
           Offer is completed in accordance with its terms. Unless and until
           each of POHL and PEDIFRI accepts the Offer and such completion occurs
           nothing in this Agreement shall operate to fetter the rights
           (including voting rights of its respective Shares) of POHL or PEDIFRI
           in relation to the Shares; and

      (ii) POHL shall remain legal and beneficial owner of the units of PEDIFRI
           unless and until the sale of such units to OFFEROR is completed in
           accordance with clause 3. Unless and until such completion occurs
           nothing in this Agreement shall operate to fetter the rights
           (including voting rights of the PEDIFRI units) of POHL in relation to
           the units of PEDIFRI.

2.5. PEARSON's undertakings in sub-clause 2.2 and 2.3(i) are and shall at all
     times be conditional on:

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                                                                  CONFORMED COPY

     (i) each of OFFEROR's representations and warranties in sub-clause 7.1(v)
         and (vi) being true and accurate at all relevant times; and

     (ii) each of the Offer Guarantees and the PEDIFRI Guarantees remaining in
          full force and effect.

2.6. Nothing in this Agreement shall prejudice PEARSON's rights to procure
     acceptance of the Offer and to exercise the PEDIFRI Put Option (as defined
     in sub-clause 3.1 below) at any time after the expiry of the OFFEROR Call
     Option Period.

3. PEDIFRI PUT OPTION

3.1. OFFEROR hereby grants PEARSON an option (hereinafter, the "PEDIFRI PUT
     OPTION") to require OFFEROR to purchase from POHL all of the units
     comprising the equity capital of PEDIFRI subject to the terms and
     conditions in this clause 3.

3.2. PEARSON may exercise the PEDIFRI Put Option by procuring that PEARSON and
     POHL serve on OFFEROR written notice in the form set out in Annex 6 hereto
     (hereinafter, the "PEDIFRI EXERCISE NOTICE") following the serving of the
     Offeror Exercise Notice or (provided that the Offer has been made) the
     expiry of the OFFEROR Call Option Period but no later than 9:00 a.m.
     (Madrid time) on the last Business Day of the Offer acceptance period.

3.3.(i) The effect of serving the PEDIFRI Exercise Notice shall be that OFFEROR
        shall purchase and, PEARSON shall procure that POHL shall sell, the
        entire issued equity capital of PEDIFRI for an aggregate consideration
        of:

   (A) an amount which is equal to Euro 57,018,225.60 plus Net Assets (as
       defined below), provided that, for the avoidance of doubt, the Net Assets
       may be a negative amount and, in such circumstances an amount equal to
       such negative amount of Net Asset shall be deducted from the amount of
       Euro 57,018,225.60 (hereinafter, the "INITIAL PEDIFRI CONSIDERATION");
       and:

   (B) the Deferred Contingent Offer Consideration (as defined in sub-clause
       9.2) which would, in relation to the Shares held by PEDIFRI at the time
       of its transfer to OFFEROR be attributable to those Shares on the
       assumption that PEDIFRI had accepted the Offer (hereinafter, the
       "DEFERRED CONTINGENT PEDIFRI CONSIDERATION").

     Completion shall be conditional only upon completion of the Offer by
     OFFEROR. Completion shall take place on the same date and at the same time
     as settlement occurs in respect of completion of the Offer. For such
     purposes, POHL and OFFEROR shall appear in front of a Notary Public of
     Madrid at or prior to Completion and shall execute a sale and purchase
     notarial deed, conditional only upon completion of the Offer by OFFEROR and
     subject only to the representations and warranties set out expressly in

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                                                                  CONFORMED COPY

      this Agreement (hereinafter, the "NOTARIAL DEED"). At Completion, OFFEROR
      shall pay the Initial PEDIFRI Consideration in cash in Euros to POHL and
      POHL shall transfer the units in PEDIFRI to OFFEROR. The Parties shall
      procure that from Completion, the current directors of PEDIFRI are
      replaced with nominees of OFFEROR and PEARSON shall procure that on
      resignation of the current directors of PEDIFRI, such directors shall
      provide written confirmation to PEDIFRI that they have no outstanding
      claims against, and are owed no amounts by, PEDIFRI. PEARSON shall procure
      that POHL does, and OFFEROR shall do, all other things to ensure that
      Completion occurs in accordance with this clause 3. OFFEROR shall pay the
      Deferred Contingent PEDIFRI Consideration in cash in Euros to POHL at the
      same time as it pays the Deferred Contingent Offer Consideration in
      accordance with the terms of the Offer.

 (ii) PEARSON (or, to the extent that at any relevant time, OFFEROR is the
      owner of the PEDIFRI units, OFFEROR) shall procure that the accounts of
      PEDIFRI for the year to 31 December 2004 (the "PEDIFRI 2004 ACCOUNTS") are
      prepared promptly on a basis consistent with that on which the accounts of
      PEDIFRI for the year to 31 December 2003 were prepared and are audited by
      PricewaterhouseCoopers (or, if they are unwilling to act, another firm of
      accountants of international repute selected by PEARSON) as promptly as
      possible after such accounts have been prepared and that copies of such
      audited accounts are delivered to the Parties promptly after they are
      available.

(iii) PEARSON shall procure that:

     (A) the intra-group loan shown in the PEDIFRI balance sheet for the
         financial year ended 31 December 2003 is repaid by POHL; and

     (B) to the extent there are distributable reserves available for the
         purpose and so far as legally possible in Spain, the cash resulting
         from such intra-group loan repayment together with any other cash in
         PEDIFRI is dividended up to POHL or is otherwise distributed to POHL.
         (PEARSON and POHL shall also have the right, but not the obligation, to
         extract through reduction of capital of PEDIFRI and, in the case of any
         such reduction of capital, notwithstanding anything to the contrary in
         this Agreement, any reference to the total share capital of PEDIFRI to
         be transferred at Completion and any representation or warranty in
         respect of it shall be to the share capital as so reduced.)

      Once this has been done, PEARSON shall procure that a balance sheet for
      PEDIFRI which takes into account the operations referred to in (A) and (B)
      (the "PROVISIONAL COMPLETION BALANCE SHEET") is drawn up on a basis
      consistent with that on which the PEDIFRI 2004 Accounts were prepared (or,
      if the balance sheet from the PEDIFRI 2004 Accounts is used for these
      purposes, such balance sheet has been prepared in accordance with the
      requirements of (ii) above). PEARSON shall procure that the Provisional
      Completion Balance Sheet is audited by PricewaterhouseCoopers (or if they

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                                                                  CONFORMED COPY

      are unwilling to act, another firm of accountants of international repute
      selected by PEARSON) as promptly as possible and that copies of such
      audited balance (the "AUDITED COMPLETION BALANCE SHEET") shall be
      delivered to the parties promptly after they are available.

      The Parties shall use the Audited Completion Balance Sheet to calculate
      the Net Assets of PEDIFRI for the purposes of calculating the Initial
      PEDIFRI Consideration. The "NET ASSETS" shall be the amount in Euros that
      is represented in the Audited Completion Balance Sheet by:

      (C) adding the aggregate balance sheet value of all the assets;

      (D) deducting the book value of the Shares held by PEDIFRI; and

      (E) deducting the balance sheet value of the creditors and any other
          liabilities (excluding, for the avoidance of doubt, all amounts
          relating to shareholders' equity).

      If the Provisional Completion Balance Sheet has not been audited prior to
      Completion, then for the purposes of calculating the amount of the Initial
      PEDIFRI Consideration to be paid at Completion, the Net Assets shall be
      deemed to be the Net Assets figure shown by the unaudited Provisional
      Completion Balance Sheet and, subsequently, once the audit of the
      Provisional Completion Balance Sheet has been completed, shall be the Net
      Assets figure shown by the Audited Completion Balance Sheet and an
      appropriate adjusting repayment by POHL to OFFEROR, or (as the case may
      be) payment by OFFEROR to POHL, shall be made to reflect any difference
      between the amount paid by OFFEROR at Completion based on the unaudited
      Provisional Completion Balance Sheet and the amount which would have been
      payable at Completion had the Audited Completion Balance Sheet then been
      available. Such adjusting repayment or, as the case may be, payment shall
      be made within five (5) Business Days of the Audited Completion Balance
      Sheet being delivered to the Parties.

      To the extent that any non-cash item is taken into account as an asset in
      the Provisional Completion Balance Sheet (or, as the case may be, Audited
      Completion Balance Sheet) so that it is included in the calculation of the
      Initial PEDIFRI Consideration, PEARSON shall guarantee to PEDIFRI the
      receipt by PEDIFRI of its full amount within one year of Completion. If
      PEARSON makes any payment to PEDIFRI under such guarantee then OFFEROR
      agrees that PEARSON may require an assignment of the asset to PEARSON at
      PEARSON's cost but, if that is not legally possible, PEARSON may itself
      take reasonable steps to obtain payment of such asset for PEDIFRI and
      OFFEROR shall provide such access to the records of PEDIFRI as PEARSON
      shall reasonably require for such purpose and shall procure payment by
      PEDIFRI to PEARSON of any amount recovered.

 (iv) If:

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      (a)the Audited Completion Balance Sheet shows that the amount of Initial
         PEDIFRI Consideration would be less than Euro 57,018,225.60; and

      (b)the Offer acceptance period has not at that time closed,

      PEARSON and POHL may, by written notice to OFFEROR served not later than
      9:00 a.m. (Madrid time) on the last Business Day of the Offer Acceptance
      period, rescind their exercise of the PEDIFRI Put Option provided that
      such notice of rescission is accompanied by an acceptance by PEDIFRI of
      the Offer in respect of the Shares held by PEDIFRI. The effect of such
      rescission shall be that PEARSON and POHL shall not be required,
      respectively, to procure the sale and sell the units of PEDIFRI and
      OFFEROR shall not be required to buy them.

  (v) For the purposes of OFFEROR's reasonable due diligence requirements,
      during the period between (A) the date of this Agreement and (B) the
      execution of the Notarial Deed or rescission of the PEDIFRI Put Option,
      PEARSON agrees to provide OFFEROR and its duly authorised agents upon
      reasonable request with full and free access (including the right to take
      copies) during usual business hours to the books, accounts and records of
      and relating to PEDIFRI except to the extent any such access is restricted
      by law, provided that OFFEROR shall and ensure that its duly authorised
      agents keep such disclosed information confidential. OFFEROR shall be
      entitled to notify the auditors referred to above of any matter it
      believes should be reflected in the Audited Completion Balance Sheet.

 (vi) PEARSON undertakes to procure that PEDIFRI is run in the ordinary course
      between (A) the date of this Agreement and (B) the execution of the
      Notarial Deed or rescission of the PEDIFRI Put Option, except that such
      actions as are necessary for the actions referred to in sub-clause
      3.3(iii)(A) and (B) above may be taken.

4. SETTLEMENT AND DELIVERY

4.1. Subject to sub-clause 4.2, payment of the consideration for the Shares
     shall be made by OFFEROR in the context of the Offer, in accordance with
     the settlement procedures set forth by the applicable tender offers
     regulations. The same shall apply, mutatis mutandis, to the delivery of the
     Shares by POHL and (where the PEDIFRI Put Option has not been exercised or
     has been exercised and rescinded in accordance with clause 3) PEDIFRI to
     OFFEROR.

4.2. Where the PEDIFRI Put Option has been exercised and not rescinded, payment
     of the consideration for the sale to OFFEROR of the PEDIFRI units, and
     settlement and delivery arrangements in relation to their transfer, shall
     be as provided in clause 3.

5. UNDERTAKINGS

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                                                                  CONFORMED COPY

5.1. PEARSON undertakes, to the extent necessary in each case, to procure that
     POHL and PEDIFRI do such things as are necessary in order to fulfil the
     terms of this Agreement (whether or not any provision herein expressly
     refers to POHL and PEDIFRI), provided always that neither PEARSON nor POHL
     shall be responsible for any action or inaction of PEDIFRI following
     completion of the transfer of the PEDIFRI units in accordance with clause
     3.

5.2. OFFEROR undertakes, to the extent necessary in each case, to procure that
     PEDIFRI does such things as are necessary in order to fulfil the terms of
     this Agreement (whether or not any provision herein expressly refers to
     PEDIFRI) following completion of the transfer of the PEDIFRI units in
     accordance with clause 3.

6. REPRESENTATIONS AND WARRANTIES OF PEARSON

6.1. PEARSON represents and warrants to OFFEROR, as of the date hereof, as of
     the date of completion of the Offer and (provided that the Notarial Deed is
     executed) as of immediately prior to execution of the Notarial Deed, that:

     (i) Each of PEARSON, POHL and PEDIFRI is a limited liability company duly
         incorporated and validly existing under the laws of its respective
         jurisdiction of incorporation.

    (ii) Each of POHL and PEDIFRI is a wholly-owned direct or indirect
         subsidiary of PEARSON.

   (iii) Subject in each case to each of OFFEROR's representations and
         warranties in sub-clause 7.1(v) being true and accurate at each
         relevant time:

         (a) Each of PEARSON and POHL has full corporate power and authority and
             has taken all necessary corporate actions to enter into and perform
             its obligations under this Agreement.

         (b) No other consent, approval or authorization is required to be
             obtained by PEARSON and POHL in connection with the execution and
             consummation of this Agreement (and if PEDIFRI accepts the Offer,
             PEARSON will procure that (a) and (b) will be satisfied in respect
             of PEDIFRI).

    (iv) None of PEARSON, POHL and PEDIFRI is subject to any bankruptcy or
         insolvency proceedings, and there is no action underway or threatened
         to declare the bankruptcy or insolvency of any of them.

     (v) This Agreement, following execution thereof, will constitute a valid
         and legally binding obligation of PEARSON, enforceable against it in
         accordance with its terms, subject to applicable bankruptcy,
         insolvency, reorganization and other laws generally affecting the
         enforcement of creditors' rights.

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    (vi) Each of POHL and PEDIFRI has valid and full title of ownership of the
         Shares of RECOLETOS respectively referred to as being owned by each of
         them in Whereas II above, free and clear of any security interest,
         lien, charge, claim, right of pre-emption or first refusal or any other
         third party right or encumbrance of any kind.

6.2. In the event that the units in PEDIFRI are transferred to OFFEROR pursuant
     to the Notarial Deed, PEARSON represents and warrants to OFFEROR, as of the
     date of the Notarial Deed, that:

   (i) Subject in each case to OFFEROR's representations and warranties in sub-
       clause 7.1(v) being true and accurate at each relevant time:

      (a) POHL has full corporate power and authority and has taken all
          necessary corporate actions to enter into and perform its obligations
          under the Notarial Deed.

      (b) No other consent, approval or authorization is required to be obtained
          by POHL or PEDIFRI in connection with the execution and consummation
          of the Notarial Deed.

  (ii) The Notarial Deed, following execution thereof, will constitute a valid
       and legally binding obligation of POHL, enforceable against it in
       accordance with its terms, subject to applicable bankruptcy, insolvency,
       reorganization and other laws generally affecting the enforcement of
       creditors' rights.

 (iii) Immediately prior to the transfer to OFFEROR under the Notarial Deed,
       POHL has valid and full title of ownership of all of the issued units of
       PEDIFRI, free and clear of any security interest, lien, charge, claim,
       right of pre-emption or first refusal or any other third party right or
       encumbrance of any kind.

 (iv) The equity capital of PEDIFRI amounts to Euro 570,312.41, divided into
      94,982 units, numbered 1 through 94,982 both inclusive, of Euro 6.010121
      nominal value each, fully subscribed and paid up and no rights have been
      granted to any person entitling that person to subscribe for, or convert
      other rights into, shares in PEDIFRI.

  (v) The PEDIFRI 2004 Accounts and the Audited Completion Balance Sheet will
      be prepared in accordance with the basis of preparation set out therein
      and will give a fair and genuine representation of the financial position
      of PEDIFRI and of its assets and liabilities of the periods and as at the
      times stated therein and in accordance with the basis of preparation set
      out therein. PEDIFRI does not have any further liabilities (including
      hidden, contingent or off balance sheet liabilities) other than those
      which are or will be set out in or provided for in the Audited Completion
      Balance Sheet).

 (vi) PEDIFRI has no employees, has not performed any activities other than
      the holding of Shares of RECOLETOS and is not a party to any agreement

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                                                                  CONFORMED COPY

        giving rise to obligations of the company vis-a-vis other companies
        within the PEARSON group or third parties.

  (vii) PEDIFRI is in compliance with its obligations under all applicable laws
        to which it is subject and has performed and is up to date with all of
        its obligations to pay taxes, file returns, documents and make payments.

 (viii) There are no writs, actions, claims, disputes, legal or administrative
        proceedings, arbitration proceedings, complaints, prosecutions or
        investigations in progress or pending (nor to the best of PEARSON's
        belief are there any contemplated), which affect PEDIFRI other than
        those which are or will be provided for in the Audited Completion
        Balance Sheet.

   (ix) Subsequent to 31 December 2004, there will be no material adverse change
        in the financial condition of PEDIFRI except to the extent that it
        changes as a consequence of the actions referred to in sub-clause
        3.3(iii)(A) and (B) above or as otherwise reflected in the Audited
        Completion Balance Sheet.

   Notwithstanding anything to the contrary in this Agreement, neither PEARSON
   nor POHL shall be responsible for liabilities arising from matters, facts,
   occurrences or situations relating to or affecting PEDIFRI prior to 3 October
   1996.

   No claim may be made under the representations and warranties in this
   sub-clause 6.2 to the extent that the matter is provided for in the Audited
   Completion Balance Sheet.

   Subject to the provisions of the following paragraphs in this sub-clause 6.2,
   PEARSON shall indemnify and hold harmless OFFEROR from and against any and
   all losses, liabilities, costs, claims, damages, expenses or demands (or
   actions in respect thereof) (excluding, for the avoidance of doubt, any
   indirect losses and loss of profits) ("Losses") which OFFEROR incurs or which
   is made against OFFEROR after Completion of OFFEROR's acquisition of PEDIFRI
   to the extent such Losses result from any breach or alleged breach of any of
   the representations or warranties set out in clause 6.2.

   If any action, claim or demand shall be brought or alleged against OFFEROR in
   respect of which the above indemnity is to be claimed against PEARSON,
   OFFEROR shall promptly (and in any event within 10 Business Days) notify
   PEARSON in writing and provide details of the relevant facts and
   circumstances, and PEARSON shall have the option either (A) to pay OFFEROR an
   amount equal to the amount claimed by the claimant, or (B) to assume the
   defence thereof with legal advisers satisfactory to OFFEROR (acting
   reasonably). If PEARSON fails to notify OFFEROR of its election between (A)
   and (B) within ten Business Days (or such other period as may be agreed
   between the Parties (acting reasonably)) after receipt of the notice of
   commencement of the action (or three Business Days prior to the date upon
   which the period for the defence of the claim in question expires, if
   earlier), OFFEROR shall be free to defend or settle the
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                                                                  CONFORMED COPY

      claim in question and PEARSON's obligations under the above indemnity
      shall be unaffected.

      PEARSON's liability under the above indemnity shall not apply to the
      extent that OFFEROR is entitled to reimbursement for any Losses from any
      third party, including, without limitation, any insurer.

7.    REPRESENTATIONS AND WARRANTIES OF OFFEROR

7.1.  OFFEROR represents and warrants to PEARSON, as of the date hereof, as of
      the date of the exercise of the OFFEROR Call Option, as of each date when
      members of the PEARSON group accept the Offer, as of the date of any
      exercise by PEARSON of the PEDIFRI Put Option, as of the date of
      completion of the Offer and (provided that the Notarial Deed is executed)
      as of immediately prior to execution of the Notarial Deed, that:

      (i)   OFFEROR is a limited liability company duly incorporated and validly
            existing under the laws of Spain. The share capital of OFFEROR
            amounts to Euros 12,950,000, divided into 12,950,000 shares of Euro
            1.00 nominal value each, all belonging to a unique class and series
            and being entitled to the same number of voting rights and fully
            subscribed and paid up. OFFEROR has available cash, loan facilities
            or other financing arrangements that will:

            (A)   at completion of the Offer provide in immediately available
                  funds the necessary cash resources to satisfy its payment
                  obligations under the Offer; and

            (B)   provide in immediately available funds the necessary cash
                  resources to satisfy its payment obligations under this
                  Agreement and the Notarial Deed,

            and OFFEROR will be able to satisfy any conditions to such loan
            facilities or other financing arrangements at or prior to such
            payment obligations becoming due and payable.

      (ii)  OFFEROR has full corporate power and authority and has taken all
            necessary corporate actions to enter into and perform its
            obligations under this Agreement. No consent, approval or
            authorization is required to be obtained by OFFEROR in connection
            with the execution and consummation of this Agreement other than the
            approval of the Offer by the CNMV and the approval by the
            authorities referred to in clause 1.4 above.

      (iii) OFFEROR is not subject to any bankruptcy or insolvency proceedings,
            and there is no action underway or threatened to declare its
            bankruptcy or insolvency.

      (iv)  This Agreement, following execution thereof, will constitute a valid
            and legally binding obligation of OFFEROR, enforceable against it in

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                                                                  CONFORMED COPY

      accordance with its terms, subject to applicable bankruptcy, insolvency,
      reorganization and other laws generally affecting the enforcement of
      creditors' rights.

(v)   In the context of the requirements of Chapter 11 of the United Kingdom
      Listing Rules, no person who is (or was within the 12 months preceding the
      date of this Agreement) a director (or a person in accordance with whose
      directions or instructions the directors of such body are accustomed to
      act (hereinafter, a "SHADOW DIRECTOR")) of PEARSON or of any other company
      which is (and, if he, she or it has ceased to be such, was while he, she
      or it was a director or a shadow director of such other company) PEARSON's
      subsidiary undertaking (hereinafter, a "RELATED PARTY") is directly or
      indirectly interested (or has a conditional or contingent entitlement to
      become interested) in OFFEROR or any parent undertaking or subsidiary
      undertaking of OFFEROR so that such person is (or would on the fulfilment
      of the condition or the occurrence of the contingency be) able:

            (a)   to exercise or control the exercise of 30% or more of the
                  votes able to be cast at general meetings of OFFEROR or any
                  parent undertaking or subsidiary undertaking of OFFEROR on
                  all, or substantially all, matters; or

            (b)   to appoint or remove directors of OFFEROR or any parent
                  undertaking or subsidiary undertaking of OFFEROR holding a
                  majority of voting rights at board meetings on all, or
                  substantially all, matters.

      The above representation and warranty remains true and accurate if the
      direct and indirect interests of each related party to which that
      representation and warranty applies are aggregated with the direct and
      indirect interests and conditional or contingent entitlements to become
      interested of:

            (c)   all other related parties (taken together);

            (d)   the members (taken together) of all related parties' families;

            (e)   the trustees (acting as such) of any trust of which any
                  related party and/or any related party's family is a
                  beneficiary or discretionary object;

            (f)   any company in whose equity shares one or more related parties
                  or any member or members (taken together) of the related
                  party's or related parties' family or the related party or
                  related parties and any such member or members (taken
                  together) are directly or indirectly interested (or have a
                  conditional or contingent entitlement to become interested) so
                  that they are (or would on the fulfilment of the condition or
                  the occurrence of the contingency be) able:

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                                                                  CONFORMED COPY

            (A)   to exercise or control the exercise of 30% or more of the
                  votes able to be cast at general meetings of such company or
                  any parent undertaking or subsidiary undertaking of such
                  company on all, or substantially all, matters; or

            (B)   to appoint or remove directors of such company or any parent
                  undertaking or subsidiary undertaking of such company holding
                  a majority of voting rights at board meetings on all, or
                  substantially all, matters.

      Further no member or members (taken together) of a related party's family
      or a related party and any such member or members (taken together) is or
      are directly or indirectly interested (or has or have a conditional or
      contingent entitlement to become interested) in OFFEROR or any parent
      undertaking or subsidiary undertaking of OFFEROR so that such person is or
      persons are (or would on the fulfilment of the condition or the occurrence
      of the contingency be) able to do any of the things set out in sub-clauses
      7.1(v)(a) and 7.1(v)(b) above.

      Further, neither OFFEROR nor any person with a direct or indirect interest
      in the share capital of OFFEROR is or has been within the 12 months prior
      to the date of this Agreement entitled to exercise or to control the
      exercise of 10% or more of the votes able to be cast on all or
      substantially all matters at general meetings of PEARSON or any other
      company which is PEARSON's subsidiary undertaking (except the entitlements
      to exercise or to control the votes attributable directly to the Shares
      which are acquired pursuant to completion of the Offer and/or the Notarial
      Deed).

      Further, OFFEROR is not (nor has it been at any time within the 12 months
      preceding the date of this Agreement) a person in accordance with whose
      directions or instructions the directors of any subsidiary undertaking of
      PEARSON (or of any company which has ceased to be a subsidiary undertaking
      of PEARSON within the 12 months preceding the date of this Agreement) are
      accustomed to act.

      For the purposes of this Agreement an undertaking is a "PARENT
      UNDERTAKING" in relation to another undertaking, a "SUBSIDIARY
      UNDERTAKING", if:

      (g)   it holds a majority of the voting rights in the undertaking; or

      (h)   it has the right to appoint or remove a majority of its board of
            directors; or

      (i)   it has the right to exercise a dominant influence over the
            undertaking:

            (A)   by virtue of provisions contained in the undertaking's
                  by-laws; or

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                                                                  CONFORMED COPY

                  (B)   by virtue of a control contract; or

            (j)   it controls alone, or pursuant to an agreement with other
                  shareholders or members, a majority of the voting rights in
                  the undertaking; or

            (k)   it has a participating interest in the undertaking and:

                  (A)   it actually exercises a dominant influence over it; or

                  (B)   it and the subsidiary undertaking are managed on a
                        unified basis.

            For the purposes of this Agreement an individual's "FAMILY" means
            that individual's spouse and children.

      (vi)  The aggregate of the total paid up equity share capital and
            subordinated participating loans (prestamos participativos) of
            OFFEROR is not less than E83,000,000, the funds representing such
            share capital (to the extent not used for expenditure within
            sub-clause 7.1(vii) below) being currently held in the form of funds
            readily available to OFFEROR.

      (vii) Payments which would have to be made by OFFEROR if the Offer does
            not proceed (excluding any payments for which OFFEROR may be liable
            in respect of breach of any of its obligations under this Agreement)
            will not exceed E 13,000,000 and no person with security interests
            over the assets of OFFEROR would have any rights which, taken with
            payments owed to any other person, would exceed such amount in such
            circumstances. Apart from security interests, there are no other
            third party rights or interests in the assets of OFFEROR.

     (viii) Apart from any arrangement falling within clause 9.15 below, there
            exists at the date of this Agreement, no agreement, arrangement or
            undertaking, formal or informal, that would, but for the timing of
            entering into such agreement, arrangement or undertaking, trigger
            any of OFFEROR's obligations to pay any Deferred Contingent Offer
            Consideration.

      (ix)  Except as disclosed in writing to PEARSON, neither OFFEROR nor any
            of its officers, advisers or agents is aware of any right to bring
            any claim against PEARSON or any of PEARSON's subsidiary
            undertakings or any of PEARSON's or PEARSON's subsidiary
            undertakings officers, employees, advisers or agents under this
            Agreement or in connection with any of the matters referred to in
            this Agreement.

7.2.  In the event that the units in PEDIFRI are transferred to OFFEROR pursuant
      to the Notarial Deed, OFFEROR represents and warrants to PEARSON (for
      itself and on behalf of POHL), as of the date of the Notarial Deed, that:

      (i)   OFFEROR has full corporate power and authority and has taken all
            necessary corporate actions to enter into and perform its
            obligations under the Notarial Deed.

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                                                                  CONFORMED COPY

      (ii)  No other consent, approval or authorization is required to be
            obtained by OFFEROR in connection with the execution and
            consummation of the Notarial Deed.

      (iii) The Notarial Deed, following execution thereof, will constitute a
            valid and legally binding obligation of OFFEROR, enforceable against
            it in accordance with its terms, subject to applicable bankruptcy,
            insolvency, reorganization and other laws generally affecting the
            enforcement of creditors' rights.

8.    PUBLIC DISCLOSURE

8.1.  Save as provided in sub-clauses 8.2 and 8.3, no formal public announcement
      or press release in connection with the signature or subject matter of
      this Agreement shall be made or issued by or on behalf of either Party
      without the prior written approval of the other Party (such approval not
      to be unreasonably withheld or delayed).

8.2.  Upon the signature of this Agreement, the Parties shall disclose the basic
      contents of this Agreement and such other matters as are required in
      connection with the signature and subject matter of this Agreement to the
      CNMV and in accordance with the Listing Rules of the UK Listing
      Authorities, by filing the notice and announcements substantially in the
      form attached as Annex 7 hereto and a copy of this Agreement shall be
      delivered to the CNMV and may be attached to the Prospectus.

8.3.  If a Party has an obligation to make or issue any announcement or filing
      or to take any other action, in each case required by law or by any stock
      exchange or by any governmental authority, the relevant Party shall give
      the other Party every reasonable opportunity to comment on any
      announcement, release or filing before it is made or issued (provided that
      this shall not have the effect of preventing the Party making the
      announcement, release or filing or taking any such other action from
      complying with its legal and/or stock exchange and/or other regulatory
      obligations).

9.    DEFERRED CONTINGENT OFFER CONSIDERATION

9.1.  OFFEROR shall include the following provisions of this clause 9 in the
      Offer.

9.2.  Subject to the remaining provisions of this clause 9, if there shall occur
      during the Relevant Period any Disposal by a Relevant Party of a RECOLETOS
      Interest, OFFEROR shall pay to each Accepting Shareholder, in respect of
      each of the Accepted Shares for which the Offer was accepted by such
      Accepting Shareholder, the amount in cash in Euros of any Deferred
      Contingent Offer Consideration arising from such Disposal.

      For these purposes:

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                                                                  CONFORMED COPY

      "RELEVANT PERIOD" means the period commencing on the date of this
      Agreement and ending at 23:59 (Madrid time) on the date which is 18
      calendar months after the date for settlement pursuant to the Offer;

      "DEFERRED CONTINGENT OFFER CONSIDERATION" means the Upside Amount arising
      from any Disposal divided by:

      (i)   (where the PEDIFRI Put Option has been exercised), the total number
            of Accepted Shares plus the number of shares in RECOLETOS held by
            PEDIFRI at the date of the Notarial Deed; or

      (ii)  (where the PEDIFRI Put Option has not been exercised), the total
            number of Accepted Shares;

      "DISPOSAL" means any sale, transfer or any other disposal, whether for
      cash or otherwise;

      "FIRST UPSIDE PERIOD" means the period commencing on the date of this
      Agreement and ending at 23:59 (Madrid time) on the date which is 12
      calendar months after the date for settlement pursuant to the Offer;

      "SECOND UPSIDE PERIOD" means the period commencing at the end of the First
      Upside Period and ending at 23:59 (Madrid time) on the date which is 6
      calendar months thereafter;

      "RELEVANT PARTY" means:

      (i)   OFFEROR or any subsidiary of OFFEROR;

      (ii)  any person (which term in this Agreement includes any body corporate
            or other legal entity as well as any individual) which holds any
            interest in OFFEROR, whether:

            (A)   directly; or

            (B)   indirectly through any other person;

            provided that no shareholder in BANESTO or any holding company of
            BANESTO (where such person would, but for this proviso, be a
            Relevant Party solely by virtue of its shareholding in BANESTO or
            any holding company of BANESTO) shall be a Relevant Party; and

      (iii) (while any person within (i) or (ii) retains any interest (direct or
            indirect) in the shares of RECOLETOS), RECOLETOS or any subsidiary
            of RECOLETOS.

      "RECOLETOS INTEREST" means:

      (i)   any interest in the RECOLETOS Shares;

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                                                                  CONFORMED COPY

      (ii)  any interest in any Relevant Party Shares;

      (iii) any interest in the RECOLETOS Assets,

      and "INTEREST" for these purposes means an interest of any type, whether
      legal or beneficial, conditional or absolute, joint or sole and including
      (without limitation):

            (A)   any option to acquire;

            (B)   any subscription, conversion or exchange rights into;

            (C)   any interest held through or pursuant to a trust or similar
                  arrangement in respect of;

            (D)   any arrangement giving the ability to exercise voting rights
                  attaching to or to receive the economic benefits deriving
                  from;

            (E)   any agreement, conditional or otherwise, to acquire or to call
                  for the delivery of;

            in each case, any of the RECOLETOS Shares, Relevant Party Shares and
            RECOLETOS Assets; and

            (F)   any agreement, conditional or otherwise, to acquire any of the
                  interests falling within (A) to (E) above, both inclusive;

      "RECOLETOS SHARES" means the shares in the capital of RECOLETOS from time
      to time;

      "RELEVANT PARTY SHARES" means any shares (other than RECOLETOS Shares) or
      units in the capital of or participations in (or any other form of
      entitlement to share in assets on a dissolution, winding up or other
      termination of), in each case, any Relevant Party (other than a Relevant
      Party who is an individual);

      "RECOLETOS ASSETS" means the assets of any kind from time to time of
      RECOLETOS and its subsidiaries from time to time or of any of them
      including (without limitation) real estate, intellectual property,
      know-how, equipment, machinery, stock, debtors, the benefit of contracts,
      shares and other securities, goodwill, information and claims;

      "ACCEPTING SHAREHOLDERS" means the shareholders of RECOLETOS who accept
      the Offer;

      "UPSIDE AMOUNT" means:

      (i)   in the case of a Disposal for cash or cash equivalent of the full
            beneficial interest in any RECOLETOS Share(s) (where there has been
            no change to the denomination or number of RECOLETOS Shares in issue
            from those existing at the date of this Agreement), an amount which
            is equal to:

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            C% (P x (A-B))

            where, in each such case:

            C =   80 where the relevant Disposal takes place in the First Upside
                  Period; or 50 where the relevant Disposal takes place in the
                  Second Upside Period;

            P =   the number of RECOLETOS Shares disposed of;

            A =   the amount of the consideration received or receivable per
                  RECOLETOS Share in respect of that disposal; and

            B =   the Trigger Price.

      (ii)  in the case of a Disposal for cash or cash equivalent of the full
            beneficial interest in a RECOLETOS Asset, then for the purpose of
            the calculation of any Upside Amount, the RECOLETOS Share Equivalent
            of that RECOLETOS Asset shall first be determined as follows:

            (A)   the EBITDA generated by the business or businesses
                  attributable to that RECOLETOS Asset as a percentage of the
                  consolidated EBITDA generated by the whole of the RECOLETOS
                  business shall be calculated by the Independent Assessor by
                  reference to the most recently published audited consolidated
                  annual financial statements of RECOLETOS and its subsidiaries
                  and also (where no separate EBITDA attributable to such
                  business is specifically stated in any such audited accounts
                  of RECOLETOS for that period) such other factors (including
                  individual subsidiaries' accounts or statements for divisions
                  of the business) as the Independent Assessor, in its absolute
                  discretion, thinks fit to determine such EBITDA);

            (B)   that percentage is then applied to the total number of
                  RECOLETOS Shares in issue at the time of settlement of the
                  Offer;

            (C)   this then gives a number which is the RECOLETOS Share
                  Equivalent of the RECOLETOS Asset the subject of the Disposal
                  and this number shall be P for the purposes of the formula in
                  (i) above;

            (D)   the amount for the purposes of A in that formula shall be the
                  total consideration received or receivable in aggregate in
                  respect of the relevant Disposal of the RECOLETOS Asset
                  divided by the RECOLETOS Share Equivalent for the relevant
                  RECOLETOS Asset.

      (iii) in the case of any other Disposal of a RECOLETOS Interest, the
            amount calculated by the Independent Assessor (using as its
            reference point the basis of calculation of Upside Amount in the
            circumstances referred to in (i) above or in the case of a Disposal
            of any interest in a RECOLETOS Asset, in (ii) above, but adjusting
            for such factors as the Independent Assessor (in its absolute
            discretion) thinks fit in the actual circumstances) as being (in the

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            case of a Disposal within the First Upside Period) 80% or (in the
            case of a Disposal within the Second Upside Period) 50% of the
            difference between:

            (A)   the value of the consideration actually received or actually
                  receivable in respect of the relevant Disposal; and

            (B)   what would have been generated by the relevant Disposal of the
                  relevant RECOLETOS Interest had the underlying RECOLETOS
                  Shares been valued at the Trigger Price for the purposes of or
                  in the context of the relevant Disposal and (in the case of a
                  Disposal of a RECOLETOS Asset) had the value of all of
                  RECOLETOS's business been valued at the multiple of the
                  Trigger Price and the total number of RECOLETOS Shares in
                  issue at the date for settlement pursuant to the Offer;

      "TRIGGER PRICE" means Euro 7.50; and

      "INDEPENDENT ASSESSOR" means LAZARD or any replacement appointed in
      accordance with clause 9.9.

9.3.  Where any Disposal of a RECOLETOS Interest takes place otherwise than on
      arms length market terms, any subsequent Disposal (whether direct or by
      means of a Disposal of any interest in any entity which itself has an
      interest, direct or indirect, in the relevant RECOLETOS Interest) shall,
      if it falls within the Relevant Period, be treated as a Disposal of a
      RECOLETOS Interest for the purposes of sub-clause 9.2 above even though
      the Disposal would not, in such circumstances, be by a Relevant Party.

9.4.  In calculating the amount of the consideration received or receivable in
      respect of the Disposal of a RECOLETOS Interest, the relevant amount shall
      be adjusted where there has been any payment or declaration of any
      dividend or where there has been any other distribution or any return of
      shareholders funds (including through share buy-backs) in the period from
      and including the date for settlement pursuant to the Offer to and
      including the date of the relevant Disposal of a RECOLETOS Interest so as
      to reflect the value which RECOLETOS would have had if no such dividend
      had been paid (or declared) or other distribution or return of
      shareholders funds been made.

9.5.  Where any Disposal of a RECOLETOS Interest is of an interest (for example,
      an option) entitling the holder of that interest to acquire a further
      RECOLETOS Interest(s), then the acquisition of such further RECOLETOS
      Interest(s) shall be treated as the Disposal(s) of a RECOLETOS Interest
      falling within sub-clause 9.2 above even though such acquisition of
      further RECOLETOS Interest(s) itself falls outside the Relevant Period.
      Similarly, if any Disposal of such a RECOLETOS Interest falls within the
      First Upside Period, then even though the acquisition of the further
      RECOLETOS Interest(s) pursuant to that first Disposal falls inside the
      Second Upside Period or falls outside the Relevant Period, such
      acquisition of the further RECOLETOS Interest(s) shall be treated as
      falling within the First Upside Period.

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9.6.  OFFEROR shall make any payment due to an Accepting Shareholder under
      sub-clause 9.2 above within ten (10) Business Days of receipt by the
      Relevant Party of the consideration in relation to the relevant Disposal
      of the RECOLETOS Interest (or, where the calculation of the Upside Amount
      has to be done by the Independent Assessor, within ten (10) Business Days
      of the Independent Assessor completing that calculation). Where the
      consideration is received in instalments OFFEROR shall pay the
      proportionate part as above following receipt of each instalment. The fact
      that receipt of consideration may fall outside the Relevant Period shall
      not relieve OFFEROR from its payment obligations to Accepting Shareholders
      where the Disposal of the RECOLETOS Interest to which the consideration
      relates took place within the Relevant Period or is a Disposal to which
      sub-clause 9.5 above applies.

9.7.  The provisions of sub-clause 9.2 above shall not apply to Disposals of
      interests in RECOLETOS Assets where such Disposals:

      (i)   are of a revenue nature and are made in the ordinary course of
            business of RECOLETOS or the relevant RECOLETOS subsidiary; or

      (ii)  are Disposals where the aggregate RECOLETOS Share Equivalent of all
            such Disposals (calculated as referred to in sub-clause 9.2 above)
            does not, over the course of the Relevant Period, exceed 25% of the
            total RECOLETOS Shares in issue at the time of settlement of the
            Offer (but so that:

            (A)   any further Disposal(s) pursuant to an initial disposal within
                  the terms of sub-clause 9.5 above shall be treated as a
                  Disposal within the Relevant Period for these purposes; and

            (B)   the value of any Disposal involving instalment or deferred
                  payment(s) outside the Relevant Period shall be calculated by
                  reference to the discounted value of the payments on the date
                  of the Disposal (as determined by the Independent Assessor)).

9.8.  The provisions of sub-clause 9.2 above shall not apply to any Disposal of
      a RECOLETOS Interest to the extent that:

      (i)   such RECOLETOS Interest is an interest in the RECOLETOS Shares or
            any interest in any Relevant Party Shares; and

      (ii)  that Disposal, together with all other such Disposals up to and
            including that date would not amount to the disposal of interests
            (direct or indirect) of an aggregate of more than a 1% of the
            RECOLETOS Shares.

9.9.  The following provisions shall apply in relation to the Independent
      Assessor:

      (i)   OFFEROR shall pay the fees of the Independent Assessor.

      (ii)  If the Independent Assessor delays or becomes unwilling or incapable
            of acting then the Parties shall request as soon as possible that
            the President of

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            the Spanish Institute of Financial Analysts (Presidente del
            Instituto Espanol de Analistas Financieros) nominate another in its
            place and the Parties shall co-operate to appoint such nominee as
            soon as possible after such nomination. The nominee shall, upon
            acceptance of its appointment become the Independent Assessor for
            the purposes of this clause 9.

      (iii) The Independent Assessor shall act as an expert and not as an
            arbitrator and its decision shall (in the absence of manifest error)
            be final and binding.

      (iv)  The Parties shall co-operate fully with any request for documents
            and/or information reasonably requested by the Independent Assessor
            and the Parties undertake to use all reasonable endeavours to
            procure that other relevant persons subject to such requests do the
            same.

      (v)   The Independent Assessor shall be appointed on terms that it carry
            out any analysis and calculation it is required to do as promptly as
            reasonably possible and shall notify both OFFEROR and PEARSON of its
            conclusions as soon as possible after the conclusion of its analysis
            and calculation.

      (vi)  To the extent required by the CNMV, the Independent Assessor shall
            confirm to it any calculation of Upside Amount to be made under this
            clause 9.

9.10. OFFEROR undertakes to notify PEARSON and the Independent Assessor
      immediately upon OFFEROR or any of its officers becoming aware of any
      Disposal of a RECOLETOS Interest.

9.11. Subject as provided in clause 9.12, any subscription for new shares,
      units, participations or other equivalent rights in any Relevant Party at
      a price which reflects a value per existing RECOLETOS share (assuming no
      change to the number or denomination of RECOLETOS Shares in issue as at
      the date of settlement of the Offer and no return of capital) of more than
      the Trigger Price shall be treated as a Disposal of a RECOLETOS Interest
      for the purposes of clause 9.2

9.12. Any investment by new investors in OFFEROR (and any subsequent transfer by
      such new investor to another investor at an identical price within the
      period referred to below) which takes place in the period commencing on
      the date of this Agreement and ending at 23:59 (Madrid time) on the date
      which is four calendar months after the date for settlement pursuant to
      the Offer shall not give rise to an Upside Amount by virtue only of the
      fact that such investors pay a price for their shares in OFFEROR which
      includes a premium which would value the current number of RECOLETOS
      Shares above the Trigger Price, the purpose of such premium being to
      balance the subscription or purchase of shares in OFFEROR by RECOLETOS
      management (at prices which would value the current number of RECOLETOS
      Shares lower than the Trigger Price) under a management incentive scheme,
      provided that:

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      (i)   the aggregate of such premiums shall not exceed the total of such
            shortfall on new shares of OFFEROR representing no more than 5% of
            the total share capital of OFFEROR as at the date of this Agreement;

      (ii)  the provisions of this clause 9.12 shall apply only to the initial
            transfer to such a new investor (and any subsequent transfer by such
            new investor to another investor at an identical price within the
            period referred to above) and shall not apply to any subsequent
            transfers by any of them;

      (iii) OFFEROR shall procure that any public announcement by any such new
            investor (or any such transferee) shall require the prior written
            consent (not to be unreasonably withheld) of PEARSON and refer to
            the price as being the Offer Price plus a component for fees and a
            component related to the effective funding of a management incentive
            scheme rather than a specific figure.

9.13. The provisions of clause 9.2 above shall not apply to the following
      Disposals of RECOLETOS Interests:

      (i)   Disposals to persons within the same group as the transferor
            provided that if any such person ceases to be the subsidiary company
            or holding company of the transferor the ceasing to be such a
            company shall itself be a Disposal of the relevant RECOLETOS
            interest;

      (ii)  Disposals mortis causa where the transferor is an individual;

      (iii) Disposals for no consideration;

      (iv)  Disposals involving the buy back and redemption by RECOLETOS of its
            own shares; and

      (v)   a merger of OFFEROR and RECOLETOS by means of the Spanish process of
            fusion, provided that in this case in this clause 9 RECOLETOS Assets
            shall be read as OFFEROR Assets and any reference to RECOLETOS
            Shares shall be read as with appropriate changes to take account of
            the fusion into OFFEROR,

      provided that the provisions of sub-clause 9.2 above will apply to
      subsequent Disposals of RECOLETOS Interests by the relevant transferees
      and to any disposals of interests in such transferees (unless such
      subsequent Disposals are in the circumstances specified above).

9.14. Notwithstanding anything to the contrary in this clause 9, the maximum
      amount of Deferred Contingent Offer Consideration payable in respect of
      each Accepted Share shall not exceed Euro 10 in aggregate.

9.15. The provisions of clause 9.2 shall not apply to any Disposal of RECOLETOS
      Shares where the disposal in question is in exercise by a creditor of
      OFFEROR of

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      security rights over the RECOLETOS Shares pursuant to any financing to
      OFFEROR, including call option rights taken as security.

10.   LIABILITY

10.1. Save as otherwise provided herein, each Party shall be liable to the other
      Party for any damages, losses, costs and expenses caused to or incurred by
      the latter arising out of or resulting from any breach or infringement by
      the former Party of the obligations assumed under this Agreement.

10.2. Where one of the Parties considers that a breach or infringement of this
      Agreement (hereinafter, a "BREACH") has occurred which is attributable to
      the other Party, the former shall serve written notice on the latter
      (hereinafter, a "NOTICE OF DISPUTE"), and, if the Breach may be remedied,
      the Party in breach shall have to do so within a period of five (5)
      Business Days, without prejudice to its liability vis-a-vis the other
      Party for any damages and prejudices caused by the Breach. In the event
      that it is not possible to remedy the Breach or should the Party in breach
      fail to do so within such period, the Party in breach shall be liable
      vis-a-vis the other Party for damages and prejudice caused by the Breach.

11.   COSTS AND EXPENSES

      Each of the Parties shall bear its own costs, legal and advisory expenses,
      charges and other expenses (including taxation) arising out of the
      negotiation, preparation, execution and performance of this Agreement.

      OFFEROR shall pay all costs and expenses related to the preparation,
      filing, completion and settlement of the Offer, including in relation to
      obtaining the Authorization and any other regulatory clearances.

12.   NOTICES

12.1. All notices or communications between the Parties with respect to this
      Agreement must be made in writing by (i) hand delivery, (ii) registered
      mail with acknowledgement of receipt, (iii) courier service, (iv)
      facsimile, or (v) e-mail, in any case sent to the addresses or numbers set
      forth in sub-clause 12.2 below.

12.2. The contact details of each Party for all notices to be made in connection
      with this Agreement are the following:

      For PEARSON:

      Address:   80 Strand, London WC2R 0RL, England
      Attention: Marjorie Scardino (CEO) and Robert Dancy (General Counsel)
      Copy:      The Company Secretary
      Facsimile: +44 20 7010 6633 and +44 20 7010 6060

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      E-mail: marjorie.scardino@pearson.com and robert.dancy@pearson.com

      For OFFEROR:

      Address:     C/ Carbonero y Sol, n(degrees) 12, Madrid, Spain
      Attention:   Jose Garay
      Facsimile:   +34 91 411 69 89
      E-mail:      fmanagers@fmanagers.com

12.3. Any notice sent to the above-referred addresses shall be deemed to have
      been received by the addressee, except if prior to the sending of such
      notice the addressee had notified the sender of a change of address.

13.   GOVERNING LAW, DISPUTE RESOLUTION, ENGLISH LANGUAGE AND MISCELLANEOUS

13.1. This Agreement shall be governed by the laws of Spain.

13.2. Any dispute under this Agreement which has not been resolved between the
      Parties within thirty (30) Business Days of service of a Notice of Dispute
      may be referred by either Party to and, following any such referral, shall
      be finally resolved by arbitration under the Rules of Arbitration of the
      International Chamber of Commerce by three arbitrators appointed in
      accordance with those Rules. The seat of arbitration shall be Paris,
      France. The language to be used in the arbitral proceedings shall be
      English. The Parties shall have the right to seek interim relief from a
      court of competent jurisdiction, at any time before and after the
      arbitrator has been appointed, up until the arbitrator has made his final
      award.

13.3. The parties may append to this Agreement or attach this Agreement to
      documents in Spanish and documents the originals of which are in Spanish,
      subject always to the following provisions: the language of this Agreement
      and the transactions envisaged by it is English and all notices, demands,
      requests, statements, certificates or other documents or communications
      between the Parties shall be in English unless otherwise agreed. For the
      avoidance of doubt, the English language version of this agreement shall
      prevail to the exclusion of any translation of it into any other language.

13.4. This Agreement constitutes the entire agreement between the parties with
      respect to the subject matter hereof and supersedes all agreements,
      understandings, negotiations and discussions, whether written or verbal,
      between the parties prior to the date hereof.

13.5. The Annexes to this Agreement form an integral part thereof.

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IN WITNESS WHEREOF, the Parties execute this Agreement in two counterparts, one
for each of them, in the place and on the date first above written.

PEARSON PLC
By

/s/ TIMOTHY SCOTT HENDERSON
---------------------------
Mr. Timothy Scott Henderson

RETOS CARTERA, S.A.
By

/s/ JAIME CASTELLANOS BORREGO
-----------------------------
Mr. Jaime Castellanos Borrego

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