Document:

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                                                                    Exhibit 10.1

                             STOCKHOLDERS AGREEMENT

     STOCKHOLDERS AGREEMENT, dated as of April 1, 2000, by and among TPR
Holdings, Inc. (to be renamed The Princeton Review, Inc.), a Delaware
corporation (the "Company"), John S. Katzman (the "Founder"), Bruce Task, Mark
Chernis, Alicia Ernst, Jay Rosner, Jay Shulman, Harold K. Lee and Steven Kursar
(the "Management Stockholders"), Random House TPR, Inc., a Delaware corporation
("RH"), and all of the former holders of nonvoting limited liability company
interests in Princeton Review Publishing L.L.C. listed on Schedule A hereto
(collectively the "Converting LLC Holders"), and any subsequent stockholder
(including the Investors as defined below) of the Company who becomes a party to
this Agreement pursuant to the terms and conditions hereof (collectively, the
"Additional Stockholders," and collectively with the Founder, the Management
Stockholders, RH and the Converting LLC Holders sometimes hereinafter
collectively referred to herein as the "Stockholders" or individually as the
"Stockholder").

                                    PREAMBLE

     On the date hereof, the Founder and each of the Management Stockholders are
contributing all of their shares of common stock of the entity heretofore known
as The Princeton Review, Inc., a Delaware corporation ("Old Review"), to the
Company in exchange for an agreed upon proportionate number of shares of common
stock of the Company. In this transaction, the Founder is receiving such number
of shares of the Company's Voting Class A Common Stock, $.01 par value per share
(the "Class A Common Stock"), as is set forth on Schedule A-1 hereto and the
Management Stockholders are receiving such number of shares of Non Voting Class
B Common Stock, $.01 par value per share (the "Class B Common Stock"), as is set
forth opposite the name of each such Management Stockholder on Schedule B
hereto. The Class A Common Stock and the Class B Common are together referred to
herein as the "Common Stock").

     On the date hereof, RH is contributing all of its limited liability company
interests in each of Princeton Review Management, L.L.C, Princeton Review
Products, L.L.C, Princeton Review Operations, L.L.C. and Princeton Review
Publishing, L.L.C. to the Company in exchange for such number of shares of Class
A Common Stock of the Company as is set forth on Schedule A-1 hereto.

     On the date hereof, each of the Converting LLC Holders is contributing all
of its non voting limited liability company interests in Princeton Review
Publishing, L.L.C. ("Publishing") to the Company in exchange for such number of
shares of Class B Common Stock as is set forth opposite the name of such
Converting LLC Holder on Schedule A hereto.

     Either contemporaneously with or shortly following the foregoing
transactions, certain investors will be listed on Schedule C to be added hereto
(the "Investors") which Investors shall

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be purchasing shares of the Company's Series A Convertible Preferred Stock, $.01
par value per share (the "Series A Preferred Stock"), pursuant to a Series A
Preferred Stock Purchase Agreement to be entered into between the Company and
the Investors (the "Stock Purchase Agreement") in the amounts that will be set
forth on Schedule C; and

     One of the conditions to the Closing as defined in the Stock Purchase
Agreement is the execution of this Agreement by the holders of all of the Common
Stock;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                    ARTICLE I

                              ELECTION OF DIRECTORS

     1.1 Election of Directors. At each annual meeting of the stockholders of
the Company, or at each special meeting of the stockholders of the Company
involving the election of directors of the Company, and at any other time at
which stockholders of the Company will have the right to or will vote for or
render consent in writing regarding the election of directors of the Company,
then and in each event, the Stockholders entitled to vote for the election of
directors hereby covenant and agree to vote all shares of voting capital stock
of the Company presently owned or hereafter acquired by them (whether owned of
record or over which any person exercises voting control) in favor of the
following actions:

     (a) to fix and maintain the number of directors initially at seven and at
eight upon the addition of the Investors to this Agreement which number may not
be further changed except by an amendment to this Agreement approved by the
consent of the holders of fifty-one percent (51%) or more of the outstanding
Common Stock;

     (b) to cause and maintain the election to the Board of Directors of the
Company, so long as any shares of Common Stock are held by RH, one
representative designated by RH (the "RH Director") and, to the extent that the
Company establishes a "staggered board," to elect the RH Director to the
respective class of director whose initial term expires at the latest time among
all classes. The RH Director shall be nominated by RH; and

     (c) to cause and maintain the election to the Board of Directors of the
Company, so long as any shares are held by SG Capital Partners, LLC ("SGCP"),
one representative designated by SGCP (the "SGCP Director"). The SGCP Director
shall be nominated by SGCP and shall be included in the Audit, Compensation and
Executive Committee.

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         1.2 Removal of RH Director and SGCP Director. None of the parties
hereto, except RH in the case of a director designated or nominated by it in
accordance with Section 1(b), shall vote any voting capital stock held by it to
remove the RH Director, except for bad faith or willful misconduct. None of the
parties hereto, except for the Investors in the case of the SGCP Director, shall
vote any voting capital stock held by it to remove the SCGP Director, except for
bad faith or willful misconduct. Each of the parties hereto shall vote or cause
to be voted all shares of voting capital stock of the Company owned by them or
over which they have voting control (i) to remove from the Board of Directors
the RH Director at the request of RH or the SGCP Director at the request of a
majority of the holders of Series A Preferred Stock and (ii) to fill any vacancy
in the membership of the Board of Directors caused by the removal or resignation
of the RH Director with a designee of RH and to fill any vacancy in the
membership of the Board of Directors caused by the removal or resignation of the
SGCP Director with a designee of SGCP.

     1.3 Notice. The Company shall provide to SGCP and RH seven days prior
written notice of any intended mailing of notice to stockholders for a meeting
at which directors are to be elected, and each of the Investors and RH shall
notify the Company in writing, prior to such mailing, of the person designated
by it as its nominee for election as a director. If RH or SGCP fails to give
notice to the Company as provided above, it shall be deemed that its designee
then serving as director shall be its designee for reelection as a director.

     1.4 Converting LLC Holder Observer Rights. As long as any Converting LLC
Holder owns shares of Class B Common Stock, the Company shall invite one
representative of all of the Converting LLC Holders to attend all meetings in
person of its Board of Directors in a nonvoting-observer capacity (the
"Representative") and, in this respect, shall give the Representative copies of
all notices, minutes, consents and other materials it provides to its directors
("Board Materials"); provided that the Company reserves the right to withhold
any information and to exclude the Representative from any meeting or portion
thereof if, in the reasonable judgment of the Chairman of the Board of Directors
or the Board of Directors of the Company, such information or the agenda for
such meeting relate to matters concerning the business relationship between the
Company on the one hand and the Converting LLC Holders solely in their capacity
as independent franchisees of the Company on the other hand, including
discussions regarding proposed repurchases of Company franchises from the
Converting LLC Holders, other potential or ongoing transactions between the
Company and its franchisees or any other similar matters that present a conflict
of business interests between the Company and the Converting LLC Holders in
their capacities as franchisees (it being understood that discussions concerning
course operations and similar matters shall not generally present conflicts of
business interests); provided, further, that if the Company has not provided the
Representative with at least three days advance notice of a Board meeting, the
Representative may participate in the meeting by teleconference. The Converting
LLC Holders understand and agree that the Representative shall agree to hold the
Board Materials in confidence but may release them or excerpts therefrom to the
Converting LLC Holders with the prior consent of the Company, such consent not
to be unreasonably withheld. The Representative provided for in this Section 1.4

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shall initially be Robert Cohen, and the Representative shall be elected from
time to time by the affirmative vote of at least 51% of the shares of Class B
Common Stock then held by Converting LLC Holders, which election shall be held
at such time, but not less frequently than once per year, and in such place as
the Converting LLC Holders shall determine.

     1.5 Investors Observer Rights. As long as the Investors own any shares of
capital stock of the Company, the Company shall invite one representative of the
Investors designated by SCGP to attend all meetings of its Board of Directors in
a nonvoting-observer capacity and, in this respect, shall give such
representative copies of all notices, minutes, consents and other materials it
provides to its directors; provided, however, that such representative shall
agree to hold such in confidence.

     1.6 Termination of Rights. The rights and obligations of the Company and
the Stockholders set forth in this Article I shall terminate upon the closing of
an underwritten public offering of shares of Common Stock of the Company which
results in a listing of the Company's shares on a National Securities Exchange
or a quotation on NASDAQ (an "IPO"); provided, that if the IPO is not an IPO at
a public offering price of at least 1.5 times the per share purchase price (as
adjusted for any stock split, stock dividend or recapitalization after the date
of the first issuance of the Series A Preferred Stock) of the Series A Preferred
Stock, and resulting in gross proceeds to the Company in excess of $30,000,000
(a "Qualified IPO"), and if requested by the Investors, the Company agrees to
enter into an agreement to preserve the rights of the Investors as are currently
contemplated by this Article I.

                                   ARTICLE II

                    LIMITATION ON TRANSFERS, RIGHTS OF FIRST
                     REFUSAL, CO-SALE AND TAKE ALONG RIGHTS

     2.1 Proposed Transfer by Stockholders. The Stockholders (other than the
Investors) shall not transfer either in a single transaction or in a series of
transactions any shares of capital stock of the Company (the "Shares") or any
right or interest therein then owned by them except by a transfer that meets the
requirements of this Article II and of this Agreement generally. Until a
Qualified IPO, the Founder and the Management Stockholders may not transfer
their shares, other than a Permitted Transfer (as defined below); without the
prior consent of SGCP, which consent shall not be unreasonably withheld (the
"SGCP Transfer Consent"). Subject to the foregoing, in the event that a
Stockholder (other than an Investor) (a "Transferring Stockholder") proposes to
transfer any portion of the shares of his or its Common Stock (each, a "Shares
Transfer"), whether voluntarily or involuntarily, other than a Permitted
Transfer and a transfer effected pursuant to Section 2.8(b) below, then at least
15 days prior to any proposed Shares Transfer, such Transferring Stockholder
shall give written notice (the "TS Notice") of his or its intention to effect
the Shares Transfer to (i) the Company, if the Transferring Stockholder is
transferring shares of Class B Common Stock or (ii) the Company and the other
Stockholders, if

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the Transferring Stockholder is transferring shares of Class A Common Stock. The
TS Notice shall set forth (i) the Transferring Stockholder's bona fide intention
to offer such shares, (ii) the class, series and number of Shares to be sold by
the Transferring Stockholder (the "Sale Shares"), (iii) the date or proposed
date of the Shares Transfer and the name and address of the proposed transferee,
and (iv) the principal terms of the Shares Transfer, including the cash or other
property or consideration to be received upon such Shares Transfer (the "Offer
Price"). The term "Permitted Transfer" shall mean (a) a Shares Transfer from a
Stockholder to one or more of its "Affiliates" or "Subsidiaries" as those terms
are defined in Rule 405 ("Rule 405") promulgated pursuant to the Securities Act
of 1933, as amended, (b) a Shares Transfer to a spouse (other than pursuant to
any divorce or separation proceedings or settlement), parent, child (natural or
adopted), stepchild or grandchild or a trust or a family limited partnership for
the benefit of any one or more of such persons in the case of a Transferring
Stockholder that is an individual or (c) a Shares Transfer by one holder of
Class B Common Stock to another holder of Class B Common Stock (each recipient
pursuant to either (a), (b) or (c) being a "Permitted Transferee"); provided,
however, that prior to such Shares Transfer, the Transferring Stockholder shall
provide at least three days' advance notice to the Company and such Permitted
Transferee shall agree in writing to be bound by the obligations imposed upon
Stockholders under this Agreement as if such transferee were originally a
signatory to this Agreement in the capacity of the Transferring Stockholder who
proposes to effect such Permitted Transfer and upon such agreement shall also
have all the rights of the Transferring Stockholder who effected the Shares
Transfer.

     2.2 Company's Right of First Refusal. In the event the Transferring
Stockholder desires to effect a Shares Transfer involving shares of Class B
Common Stock (a "Class B Shares Transfer"), other than a Permitted Transfer,
then, within 15 days after receipt of the TS Notice specified in Section 2.1
(the "Option Period"), the Company shall have the right (the "Company Option")
to purchase all of the Sale Shares that are the subject of such Class B Shares
Transfer, at a purchase price equal to the Offer Price and upon the terms and
conditions set forth in the TS Notice. The right of the Company to purchase all
of the Sale Shares under this Section 2.2 shall be exercisable by delivering
written notice of the exercise thereof, prior to the expiration of the 15-day
period referred to above, to the Transferring Stockholder, which notice shall
state the number of Sale Shares proposed to be purchased by the Company. The
failure of the Company to respond within such 15-day period shall be deemed to
be a waiver of the Company's rights under this Section 2.2. The Company may
waive its rights under this Section 2.2 prior to the expiration of the 15-day
period by giving written notice to the Transferring Stockholder.

     2.3 Closing. The closing of the purchase of Sale Shares subscribed for by
the Company under Section 2.2 shall be held at the principal executive office of
the Company on the 30th day after the giving by the Company of the notice
contemplated by Section 2.2, or at such other time and place as the parties to
the transaction may agree. At such closing, the Transferring Stockholder shall
deliver certificates representing the Sale Shares, duly endorsed for transfer
and accompanied by all requisite transfer taxes, if any, and such Sale Shares
shall be free and clear of any liens, claims, options, charges, encumbrances or
rights ("Liens") (other than those arising

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hereunder and those attributable to actions by the purchasers) and the
Transferring Stockholder shall so represent and warrant, and shall further
represent and warrant that it is the sole beneficial and record owner of such
Sale Shares. The Company shall deliver the purchase price in full at any closing
of the Sale Shares purchased by it which purchase price shall include
immediately available funds for any cash portion thereof. At such closing, all
of the parties to the transaction shall execute such additional documents as are
otherwise necessary or appropriate. If it is inconvenient for the Transferring
Stockholder to conduct a physical closing at the offices of the Company, the
closing may be conducted by mail or messenger service if such a procedure is
feasible, so long as all documentation is provided to the Company in accordance
with the requirements of this Section 2.3 at the address of its principal
executive office in advance of the payment by the Company of the purchase price.

     2.4 Sale to a Third Party Purchaser. Unless the Company elects to purchase
the Sale Shares under Section 2.2, the Transferring Stockholder may, subject to
the SGCP Transfer Consent and Section 2.5, if applicable, sell the Sale Shares
(the "Third Party Sale Shares") to a third party purchaser (a "Third Party
Purchaser") on terms and conditions no less favorable to the Transferring
Stockholder than those set forth in the TS Notice and at a purchase price per
share no less than the Offer Price; provided, however, that such sale is bona
fide and made pursuant to a contract entered into within 30 days of the earlier
to occur of (a) the waiver by the Company of its option to purchase the Third
Party Sale Shares and (b) the expiration of the Option Period (for purposes of
this Section 2.4, the earlier of such dates being referred to herein as the
"Contract Date"). If such sale is not consummated within 90 days of the Contract
Date for any reason, then the restrictions provided for herein shall again
become effective, and no transfer of such Third Party Sale Shares may be made
thereafter by the Transferring Stockholder without again offering the same to
the Company in accordance with this Article II.

     2.5 Right to Participate in Transfers by the Founder. Subject to the SGCP
Transfer Consent, in the event the Founder desires to effect a Shares Transfer,
other than a Permitted Transfer or a Shares Transfer contemplated by Section
2.8(b), then, upon receipt of the TS Notice specified in Section 2.1, each other
Stockholder shall have the right (by written notice to the Founder and the
Company to be sent within 15 days after such Stockholder receives the TS Notice)
to require the Founder to cause to be purchased from such Stockholder the number
of shares of Common Stock then held by such Stockholder (or, if such Stockholder
is an Investor, the number of shares of Common Stock issued or issuable upon
conversion of shares of Series A Preferred Stock then held by such Investor)
that equals (x) the number of Sale Shares that the Founder proposes to transfer,
multiplied by (y) the percentage determined by dividing (i) the number of shares
of Common Stock or Series A Preferred Stock then held by the Stockholder by (ii)
the sum of the number of shares of Series A Preferred Stock and Common Stock
then held by all of the Stockholders, including the Founder. For purposes of
this Section 2.5, the Series A Preferred Stock shall be treated as if it had
been converted into the number of shares of Common Stock then issuable upon such
conversion.

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     2.6 Take Along Right. Except in the case of a transfer effected pursuant to
Section 2.8(b) and subject to the SGCP Transfer Consent, in the event the
Transferring Stockholder is the Founder and he owns greater than 40% of the
outstanding Common Stock, and he desires to effect a Shares Transfer of all, but
not less than all, of the shares of Common Stock then owned by him, other than a
Permitted Transfer or a transaction with a party affiliated or related with the
Founder, the terms of which transaction are not otherwise consistent with an
arm's length unrelated party transaction, then, upon receipt of the TS Notice
specified in Section 2.1, all Stockholders shall be required to sell all of the
shares of capital stock of the Company then owned by such Stockholder to the
party purchasing the Common Stock of the Founder.

     2.7 Terms of Purchase. The purchase from the Stockholders pursuant to
Sections 2.5 and 2.6 shall be on the same terms and conditions, including per
Share price and date of Shares Transfer, as are received by the Transferring
Stockholder and stated in the TS Notice provided to the Stockholders; provided,
however, that in the event that the Founder receives a compensation arrangement
in connection with a transaction contemplated in Section 2.6 that is
substantially excessive, such amount of compensation as is substantially
excessive shall be deemed to be part of the purchase price for the Shares
transferred by the Founder and shall be taken into account for purposes of
determining the purchase price to be paid to the Class B Common Stockholders for
the Shares being transferred by them in accordance with the terms of Section
2.6; and provided further that, in all events, the Sale Shares (and any Shares
sold by Stockholders in accordance with Sections 2.5 and 2.6 above) shall
continue to be subject to the terms of this Agreement and any such transferee
shall agree in writing to be bound by the obligations imposed upon Stockholders
under this Agreement as if such transferee were originally a signatory to this
Agreement.

     2.8 Special Rights Between the Founder and RH.

          (a)  Special Rights of First Offer. In the event that either the
               Founder or RH (in either case, the "Proposing Seller") intends to
               attempt to effect a Shares Transfer of 90% or more of the Shares
               held by he or it (the "Subject Shares"), other than a Permitted
               Transfer, then he or it shall promptly provide notice of such
               intent to the other (the "First Offer Notice"). Within 10 days
               after receipt of the First Offer Notice from the Proposing Seller
               of his or its intent to effect a Share Transfer, the Founder or
               RH (whichever is not the Proposing Seller (the "Special
               Optionee")), shall have the right to designate a per share dollar
               price at which such Special Optionee would be willing to purchase
               the Proposing Seller's Shares or to sell to the Proposing Seller
               all of the Shares held by he or it (the "Binding Sale Price").
               The Proposing Seller shall then have five days to notify the
               Special Optionee of his or its intention to (i) sell the Subject
               Shares to the Special Optionee at the Binding Sale Price or (ii)
               purchase all of the Shares held by the Special Optionee at the
               Binding Sale Price (in either case, the "Purchase Sale
               Election"). The Purchase Sale Election shall be binding on both
               parties and shall be consummated within 30

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               days of the First Offer Notice. In the event the Special Optionee
               does not provide the Proposing Seller with a Binding Sale Price
               within the above 10-day period, then the Proposing Seller may
               proceed with a Share Transfer of the Subject Shares and, if
               requested by the Proposing Seller, the Special Optionee shall be
               required to sell all of the Shares owned by he or it to the party
               purchasing from the Proposing Seller at the per share price to be
               received by the Proposing Seller for the Subject Shares.

          (b)  Special Buy/Sell Rights. In the event that the Founder's
               employment by the Company shall terminate for any reason
               involving any criminal act or gross dereliction of duty to the
               Company, RH may give notice to the Founder of a price per share
               (the "Proposed Price") at which it is willing to sell to the
               Founder all of the Shares then owned by RH, which Proposed Price
               shall also be deemed to be the price per share at which RH is
               prepared to purchase all of the Shares then owned by the Founder.
               Within 15 days of the Founder's receipt of such notice the
               Founder shall notify RH of his intention to sell all of his
               Shares to RH or to buy all of RH's Shares, in either case at the
               Proposed Price. Failure to give such notice shall give RH the
               right during the ensuing three days to elect to be the seller or
               the purchaser at the Proposed Price. If RH is the purchaser, RH
               shall purchase all of the Founder's Shares for cash and shall
               consummate the transaction within 30 days after its election to
               purchase the Founder's Shares. In the event that the Founder is
               the purchaser, he shall be required to consummate the purchase of
               RH's Shares within nine months. If the party having the right to
               purchase Shares of the other pursuant to this Section 2.8(b)
               fails to complete the transaction within the allotted time
               period, the other party shall have the option, exercisable in
               lieu of any other rights it may then have, to deliver, within 10
               days after such failure, a notice to purchase pursuant to which
               it may purchase the Shares of the other as if it were the
               original purchaser.

         2.9 Transfers Void. Any attempted Shares Transfer by the Stockholders
in violation of the terms of this Article II shall be ineffective to vest in any
transferee any interest held by the Transferring Stockholder in the Shares.
Without limiting the foregoing, any purported Shares Transfer in violation
hereof shall be ineffective as against the Company or the other Stockholders, as
applicable, and the Company or such other Stockholders, as applicable, shall
have a continuing right and option (but not an obligation), until the
restrictions contained in this Article II terminate, to purchase the Shares
purported to be transferred by the Transferring Stockholders for a price and on
terms the same as those at which the purported Shares Transfer was effected.

         2.10 Termination of Restrictions. The rights and obligations in this
Article II shall terminate upon the closing of an IPO; provided, that if the IPO
is not a Qualified IPO, and if requested by the Investors, the Founder agrees to
enter into an agreement to preserve the rights

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of the Investors in regard to the Founder and Share Transfers by the Founder as
are currently contemplated by this Article II.

                                   ARTICLE III

                                PREEMPTIVE RIGHTS

         3.1 Preemptive Right. Subject to the terms and conditions specified in
this Article III, the Company hereby grants to each Stockholder who holds Class
B Common Stock (a "Class B Stockholder"), RH and the Investors a preemptive
right with respect to future sales by the Company of its Shares or securities
convertible into or exercisable for any Shares (collectively, "Company
Securities"). For purposes of this Section, "Investor" includes transferees of
any Investor and any general partners, members and/or affiliates of an Investor.
For purposes of this Article III, "Class B Stockholder" shall only include the
Management Stockholders and the Converting LLC Holders and their respective
permitted transferees. An Investor shall be entitled to apportion the preemptive
right hereby granted it among itself and its partners and affiliates in such
proportions as it deems appropriate.

         Each time the Company proposes to issue or sell any Company Securities
(a "Company Offering"), the Company shall permit each Investor, RH and each
Class B Stockholder to exercise preemptive rights in accordance with the
following provisions:

         (a) The Company shall deliver written notice (the "Sale Notice") to
each Investor, RH and Class B Stockholder stating (i) the class, series and
number of Company Securities proposed to be sold by the Company, (ii) the
proposed price and terms upon which it is selling such Company Securities and
(iii) the Company's determination of the number of shares of Company Securities
which may be purchased by such Investor, RH and Class B Stockholder if it
chooses to exercise its rights under this Section 3.1. Notwithstanding the class
of Company Securities proposed to be issued, it is understood and agreed that
(i) in the event that RH exercises its rights under this Section 3.1, it will be
purchasing Class A Common Stock, (ii) in the event that any Class B Stockholder
exercises its rights under this Section 3.1, it will be purchasing Class B
Common Stock and, (iii) in the event that any Investor exercises its rights
under this Section 3.1, it will be purchasing Series A Preferred Stock if that
is the security being offered in the Company Offering and Class A Common Stock
in all other cases.

         (b) Within 15 days (or five business days in the case of the Investors
pursuant to a Business Issuance as defined in Section 3.1(d)(iii) below) after
receipt of the Sale Notice, each Investor, RH and Class B Stockholder may, by
giving notice thereof to the Company (a "Preemptive Notice"), elect to purchase,
at the price paid by the purchaser in the Company Offering and on the terms of
the Company Offering, up to that Investor's Proportional Number of shares of
Company Securities. As used herein, the term "Proportional Number" shall mean
(i) the total number of shares of Company Securities being issued or sold by the
Company in the Company Offering multiplied by (ii) a fraction, the numerator of
which shall be the number of shares of Common Stock then issued and held, or
issuable upon conversion of the Series A Preferred Stock, Class A Common Stock
or Class B Common Stock then held, by such Investor, RH or Class B Stockholder,
as the case may be, and the denominator of which shall be the total number of

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shares of Common Stock of the Company (assuming full conversion and exercise of
all securities convertible or exercisable for shares of Common Stock) held by
all the Company's Stockholders immediately prior to the Company Offering.

         (c) The closing of the purchases of any shares of Company Securities
with respect to which the Investors, RH or Class B Stockholders have given a
Preemptive Notice shall be held at the principal executive office of the Company
on the 30th day after the giving by the Company of the Sale Notice contemplated
by Section 3.1(a), or at such other time and place as the parties to the
transaction may agree. At such closing, the Company shall deliver certificates
representing the Company Securities to be sold to the Stockholders. Each
Investor, RH and Class B Stockholder shall deliver at the closing payment of the
purchase price in full in immediately available funds or by certified bank check
for the Company Securities purchased by him or it pursuant to this Section 3.1.
At such closing, all of the parties to the transaction shall execute such
additional documents as are otherwise necessary or appropriate. If it is
inconvenient for any Stockholder to conduct a physical closing at the offices of
the Company, the closing may be conducted by mail or messenger service if such a
procedure is feasible, so long as payment for the shares of Company Securities
is made to the Company in accordance with the requirements of this Section
3.1(c) at the address of its principal executive office in advance of the
delivery by the Company of the Company Securities required to be delivered by it
hereunder.

         (d) Notwithstanding anything to the contrary contained herein, the
preemptive rights contained in this Article III shall not be applicable to (i)
the issuance by the Company of options to employees, directors or unaffiliated
consultants (or to the exercise of such options) pursuant to option plans
adopted by the Board of Directors; (ii) the issuance of securities pursuant to
the conversion or exercise of convertible or exercisable securities; (iii) in
the case of the Stockholders except for the Investors, the issuance of
securities in connection with a bona fide business acquisition of or by the
Company, whether by merger, consolidation, sale of assets, sale or exchange of
stock or otherwise (a "Business Issuance"); (iv) the issuance by the Company of
up to an aggregate of $30,000,000 of the Series A Preferred Stock to third party
investors within 320 days of the date of this Agreement; and (v) the issuance of
securities pursuant to an IPO.

         3.2 Termination of Rights. Except in the case of rights and obligations
that have been exercised but not been fulfilled, the rights and obligations of
the Company and Stockholders set forth in this Article III shall terminate upon
the closing of an IPO; provided, that if the IPO is not a Qualified IPO, and if
requested by the Investors, the Company agrees to enter into an agreement to
preserve the rights of the Investors as are currently contemplated in this
Article III.

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                                   ARTICLE IV

             CALL AND PUT RIGHTS APPLICABLE TO CLASS B COMMON STOCK

         4.1 Company Call Rights. In the event that a Class B Stockholder who is
an employee, consultant or member of the Board of Directors of the Company,
ceases to hold such position with the Company or a subsidiary or affiliate
thereof (whether due to cause, without cause or for any other reason), the
Company may, by written notice (the "Call Notice") to such Class B Stockholder
delivered (i) prior to the expiration of 30 days after such Class B Stockholder
ceases to be an employee, consultant or member of the Board of Directors of the
Company or a subsidiary or affiliate of the Company (the "Termination Date") or
(ii) prior to the expiration of 30 days after each annual anniversary of the
Termination Date, require such Class B Stockholder to sell to the Company all
(but not less than all) of the shares of Class B Common Stock held by such
Stockholder at a price per share equal to the Agreed Value thereof (as
hereinafter defined). The purchase and sale of shares of Class B Common Stock
pursuant to this Section 4.1 shall take place at the time, date and location,
and in the manner, specified in Section 4.4 hereof. If (i) a Management
Stockholder ceases to be an employee or consultant of the Company or an
affiliate or subsidiary thereof, and he or she was not terminated for "cause"
(as such term is defined in the "Glossary of Terms" adopted by the Company from
time to time), (ii) the Company has exercised its right to purchase such
Management Stockholder's Class B Common Stock pursuant to this Section 4.1 (the
"Purchase Transaction") and (iii) within twelve months after the closing of the
Purchase Transaction the Founder enters into a transaction (the "Sale
Transaction") which, but for such purchase, would have entitled such Management
Stockholder to exercise its right pursuant to Section 2.5, the Founder shall pay
to such Management Stockholder, upon the closing of the Sale Transaction, as
additional consideration for each share of Class B Common Stock purchased in the
Purchase Transaction, an amount equal to the per share sale price in the Sale
Transaction, minus the per share purchase price in the Purchase Transaction,
multiplied by the number of shares which such Management Stockholder would have
been entitled to sell upon exercise of such rights under Section 2.5. In no
event shall this Section 4.1 apply to the Converting LLC Holders.

         4.2 Class B Stockholder Put Rights. At any time after the earlier of
(i) the redemption of at least one-half of the outstanding shares of Series A
Preferred Stock, (ii) the expiration of five years from (a) the first issuance
of any shares of Series A Preferred Stock or (b) if the Series A Preferred Stock
is not issued within 320 days from the date of this Agreement, then from the
first issuance of any shares of Class B Common Stock (or any options in respect
of shares of Class B Common Stock) to any Class B Stockholder, any Class B
Stockholder may, by written notice to the Company, require the Company to
purchase all or a portion (but if less than all, in no event less than an amount
of shares of the capital stock of the Company having an aggregate value of
$20,000) of the shares of Class B Common Stock held by such Class B Stockholder
at a price per share equal to the Agreed Value thereof. The rights provided for
in this Section 4.2 may be exercised by any one Class B Stockholder no more
frequently then twice during any 12 month period. Notwithstanding anything
contained herein to the contrary, the rights of the Class B

                                       11
<PAGE>   12

Stockholders to require the Company to purchase their shares of Class B Common
Stock shall, in all cases, be subject to the prior rights of the holders of
Series A Preferred Stock to require the Company to redeem all or a portion of
such Series A Preferred Stock. In the event the Company receives notice from a
Class B Stockholder (a "Put Notice") in accordance with this Section 4.2, it
shall, within 10 days thereof, give notice to the holders of the Series A
Preferred Stock of a request by a Class B Stockholder for the purchase by the
Company of its Class B Common Stock hereunder. The holders of the Series A
Preferred Stock will then have 30 days to give notice to the Company (a
"Redemption Notice") requiring the Company to redeem all or a portion of their
Series A Preferred Stock in accordance with the terms thereof. If, within 20
days of its receipt of the Redemption Notice, the Company fails to redeem all of
the shares of Series A Preferred Stock with respect to which the Redemption
Notice applies, the Company shall not be obligated to effect any repurchase of
Class B Common Stock pursuant to the requirements of this Section 4.2, until it
effects the redemption of all shares of Series A Preferred Stock that are the
subject of the Redemption Notice. The purchase and sale of shares of Class B
Common Stock pursuant to this Section 4.2 shall take place at the time, date and
location, and in the manner, specified in Section 4.4 hereof.

         4.3 Determination of Agreed Value. The price which shall be paid for
each share of Class B Common Stock purchased by the Company pursuant to Sections
4.1 and 4.2 shall be the "Agreed Value" per share of Class B Common Stock. For
purposes of this Agreement, the "Agreed Value" per share of Class B Common Stock
of the Company shall initially be $6.25 and shall be adjusted from time to time
as of the date that the applicable Put Notice or Call Notice, as applicable, is
given, by the unanimous determination of a committee (the "Valuation Committee")
which shall be composed of three members. In no event will the Valuation
Committee establish an Agreed Value for the Class B Common Stock that is less
than the Agreed Value for the Class A Common Stock. Notwithstanding the
foregoing, if a determination of Agreed Value has been made by an independent
appraiser within one year of the relevant Put or Call Notice and there has not
been a material change in the financial condition of the Company since such
determination, the Valuation Committee shall rely on such prior appraisal to
establish the Agreed Value. One member of the Valuation Committee shall be
nominated by the Founder, one member shall be nominated by the Management
Stockholders and one member shall be the observer elected by the Converting LLC
Holders pursuant to Section 1.4. The Valuation Committee will meet to establish
the Agreed Value (i) on August 14th and each anniversary thereof during the term
of this Agreement and (ii) if the shares subject to a Put Notice have an
aggregate value of at least $200,000 (based upon the last Agreed Value) and the
Company shall have had a material change in value or have engaged in a material
transaction (for purposes of this Section 4.3 a material transaction shall be a
transaction which the Company would report in the notes to its financial
statements or in a registration statement or report filed under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended),
then the Valuation Committee shall meet and shall determine, if necessary, a new
Agreed Value for purchases and sales of the Class B Common Stock (the revised
Agreed Value pursuant to subpart (ii) of this sentence, the "Revised Value"). If
the Valuation Committee is unable to agree on the Agreed Value within 10 days,
the Valuation Committee shall, within five days of such failure,

                                       12
<PAGE>   13

appoint an independent third party appraiser acceptable to all the members of
the Valuation Committee. The appraiser so appointed shall be experienced in the
valuation of corporations engaged in the business conducted by the Company or
similar businesses. The appraiser shall be instructed to render its
determination as soon as possible after its appointment. The determination of
the appraiser shall be final and binding on the Valuation Committee. If the
applicable Class B Stockholder is not in agreement with the Agreed Value
determined by the Valuation Committee in accordance with the procedures set
forth above, such Class B Stockholder and the Valuation Committee shall jointly
appoint an independent appraiser with the qualifications described above, whose
determination shall be final and binding upon the Company and such Class B
Stockholder. If such Class B Stockholder and the Company are unable to agree on
the selection of an appraiser, the issue of determining the Agreed Value shall
be submitted to arbitration by arbitrators who shall be selected, and who shall
arbitrate, in accordance with the rules of the American Arbitration Association.
Either the Class B Stockholder or the Company may submit the final arbitration
award to the New York State Supreme Court, New York County, for confirmation. No
appeal shall be taken from any order confirming such award. The cost of any
appraisal conducted by an appraiser appointed by the selling Class B Stockholder
and the Company shall be borne by the Company, unless the appraiser shall
determine that the fair market value is less than 90% of the value asserted by
the Company, in which case the cost of such appraisal shall be borne by the
Class B Stockholder. Costs of any arbitration shall be borne equally by the
parties thereto; provided, that each party shall be solely responsible for the
payment of the fees and disbursements of its counsel. The time periods set forth
in Section 4.4 for effecting the purchases of the Shares by the Company pursuant
to Sections 4.1 and 4.2 shall be temporarily suspended for the duration of the
period required for the final determination to be made, whether by appraiser or
arbitration.

         4.4 Procedures Governing Purchases and Sales Pursuant to this Section.
If the Valuation Committee determines a Revised Value, and any Class B
Stockholder who has tendered a Put Notice disagrees with the Revised Value, such
Class B Stockholder may, within 3 days of its receipt of notice of the Revised
Value, withdraw their Put Notice. The closing of the purchases and sales of the
Class B Common Stock in accordance with Sections 4.1 and 4.2 shall be held at
the principal executive office of the Company, on the 15th day after the giving
by the Company of the notice contemplated by Section 4.1 or (subject to the
provisions of Section 4.2 applicable to redemption of Series A Preferred Stock)
the 30th day after the receipt by the Company of the Put Notice contemplated by
Section 4.2, or at such other time and place as the parties to the transaction
may agree. At such closing, the applicable Class B Stockholder shall deliver
certificates representing the subject Shares, duly endorsed for transfer and
accompanied by all requisite transfer taxes, if any, and such Shares shall be
free and clear of any Liens (other than those arising hereunder and those
attributable to actions by the purchasers) and the applicable Class B
Stockholder shall so represent and warrant, and shall further represent and
warrant that it is the sole beneficial and record owner of such Shares. The
Company shall deliver at the closing either (i) payment of the purchase price in
full in immediately available funds for the Shares purchased by it or (ii)
payment of no less than 25% of the purchase price in immediately available funds
and delivery of a promissory in the amount of the remainder of the purchase

                                       13
<PAGE>   14

price. Any such promissory note shall be secured by the Shares (which Shares
shall be incrementally released from pledge as the promissory note is paid),
shall initially bear interest equal to the prime rate plus one percent as
published in The Wall Street Journal, New York Edition, at time of issuance
(which interest shall be adjusted on each anniversary of the date of issuance to
reflect the prime rate plus one percent at such anniversary and which interest
shall accrue and be payable on each June 1 and January 1 until paid in full),
shall have a term no longer than 3 years and shall have principal due in three
equal annual installments. At such closing, all of the parties to the
transaction shall execute such additional documents as are otherwise necessary
or appropriate. If it is inconvenient for the applicable Class B Stockholder to
conduct a physical closing at the offices of the Company, the closing may be
conducted by mail or messenger service if such a procedure is feasible, so long
as all documentation is provided to the Company in accordance with the
requirements of this Section 4.4 at the address of its principal executive
office in advance of the payment by the Company of the purchase price.

         4.5 Termination of Provisions. The provisions of this Article IV shall
terminate upon the closing of an IPO.

                                    ARTICLE V

                             MANAGEMENT AND CONTROL

         5.1 General. The business and affairs of the Company shall be managed,
controlled and operated in accordance with its Certificate of Incorporation and
By-laws, as the same may be amended from time to time, except that neither the
Certificate of Incorporation nor the By-laws shall be amended in any manner that
would conflict with, or be inconsistent with, the provisions of this Agreement.

         5.2 Disability of Founder. In the event that the Founder is disabled
during his tenure as Chief Executive Officer of the Company, which disability
results in his failure to perform the duties of such position for a consecutive
90-day period, on the business day following such 90-day period the Company's
Board of Directors shall appoint a successor as Chief Executive Officer.

         5.3 The rights and obligations set forth in this Article V shall
terminate upon the closing of an IPO.

                                       14
<PAGE>   15

                                   ARTICLE VI

                               REGISTRATION RIGHTS

         6.1 Definitions. As used in this Article VI, the following terms shall
have the following meanings:

         (a) "Commission" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.

         (b) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.

         (c) "Holder" shall mean any holder of outstanding Registrable
Securities or anyone who holds outstanding Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.

         (d) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement, and compliance with applicable
state securities laws of such states in which Holders notify the Company of
their intention to offer Registrable Securities.

         (e) "Registrable Securities" shall mean all of the following to the
extent the same have not been sold to the public (i) any and all shares of
Common Stock of the Company at any time owned by the Founder, RH, the Management
Stockholders and the Converting LLC Holders; or (ii) stock issued in respect of
stock referred to in (i) above in any reorganization or stock issued in respect
of the stock referred to in (i) as a result of a stock split, stock dividend,
recapitalization or combination. Notwithstanding the foregoing, Registrable
Securities shall not include otherwise Registrable Securities (i) sold by a
person in a transaction in which his rights under this Agreement are not
properly assigned; (ii) (A) sold to or through a broker or dealer or underwriter
in a public distribution or a public securities transaction or (B) sold in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act under Section 4(1) thereof so that all transfer restrictions,
and restrictive legends with respect thereto, if any, are removed upon the
consummation of such sale; or (iii) if they are held by a Holder who can sell
all Registrable Securities held by such holder in any three-month period without
registration pursuant to Rule 144.

         (f) "Rule 144" shall mean Rule 144 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from time to time,
but shall not include Rule 144A.

                                       15
<PAGE>   16

         (g) "Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations thereunder, all as
the same shall be in effect at the time.

         6.2  Piggyback Registration.

         (a) If at any time or from time to time, the Company shall determine to
register any of its securities for its own account, other than an IPO, a
registration relating solely to employee benefit plans, a registration on Form
S-4 (or a successor form) or otherwise relating solely to a transaction pursuant
to Rule 145 under the Securities Act, or a transaction relating solely to the
sale of debt or convertible debt instruments or a registration on any form
(other than Form S-1, S-2 or S-3, or their successor forms) which does not
include substantially the same information as would be required to be included
in a registration statement covering the sale of Registrable Securities, the
Company will:

             i. give to each Holder written notice thereof as soon as
practicable prior to filing the registration statement; and

             ii. include in such registration and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within 15 days after receipt of such written notice from the
Company, by any Holder or Holders, except as set forth in subsection (b) below.

         (b) If the registration is for a registered public offering involving
an underwriting, the Company shall so advise the Holders as a part of the
written notice given pursuant to this Section 6.2. In such event, the right of
any Holder to registration pursuant to Section 6.2 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
6.2, if the managing underwriter advises the Company in writing that marketing
factors require a limitation of the number of shares to be underwritten, the
managing underwriter may limit the number of Registrable Securities to be
included in the registration and underwriting to an amount that is not less than
25% of all the securities included in such registration. The Company shall so
advise all Holders, and the number of shares of Registrable Securities that may
be included in the registration and underwriting shall be allocated pro rata
among (i) all Holders in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities requested to be registered by such Holders and
(ii) the holders of piggyback registration rights not contained in this
Agreement. If any Holder disapproves of the terms of any such underwriting, he
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter. If, by the withdrawal of such Registrable Securities, a
greater number of Registrable Securities held by

                                       16
<PAGE>   17

other Holders may be included in such registration (up to the limit imposed by
the underwriters), the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities. Any Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.

         (c) The registration rights granted to the Holders under this Section
6.2 shall be exercisable only with respect to the first registration of its
securities initiated by the Company after its Qualified IPO, unless Registrable
Securities are excluded from such registration as a result of the underwriters'
cutback referred to in Section 6.2 (b), in which case any Registrable Securities
so excluded shall be entitled to one additional Piggyback Registration on the
terms set forth in this Article VI.

         6.3 Expenses of Registration. In addition to the fees and expenses
contemplated by Section 6.4 hereof, all expenses incurred in connection with
registrations pursuant to Section 6.2, hereof, including without limitation all
registration, filing and qualification fees, printing expenses, fees and
disbursements of counsel for the Company and expenses of any special audits of
the Company's financial statements incidental to or required by such
registration, shall be borne by the Company, except that the Company shall not
be required to pay underwriters' fees, discounts or commissions relating to
Registrable Securities or fees of a separate legal counsel of a Holder.

         6.4 Registration Procedures. In the case of each registration effected
by the Company pursuant to this Agreement, the Company will keep each Holder
participating therein advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense the Company will:

         (a) keep such registration continuously effective for periods of 120
days, or, in each case, such lesser period as is necessary to permit the Holder
or Holders to complete the distribution described in the registration statement
relating thereto, whichever first occurs;

         (b) promptly prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act, and to keep such registration statement effective for that period of time
specified in Subsection 6.4(a) above;

         (c) furnish such number of prospectuses and other documents incident
thereto as a Holder from time to time may reasonably request;

         (d) use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction, at the earliest possible moment;

                                       17
<PAGE>   18

         (e) register or qualify such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as any Holder or
underwriter reasonably requires (except that the Company shall not be required
to register or qualify such Registrable Securities for sale in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration or qualification), and keep
such registration or qualification effective during the period set forth in
Subsection 6.4(a) above;

         (f) cause all Registrable Securities covered by such registrations to
be listed on each securities exchange, including NASDAQ, on which similar
securities issued by the Company are then listed or, if no such listing exists,
use reasonable best efforts to list all Registrable Securities on one of the New
York Stock Exchange, the American Stock Exchange or NASDAQ;

         (g) cause its accountants to issue to the underwriter, if any, or the
Holders, if there is no underwriter, comfort letters and updates thereof, in
customary form and covering matters of the type customarily covered in such
letters with respect to underwritten offerings;

         (h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);

         (i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, such financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply such
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;

         (j) if the offering is underwritten, at the request of any Holder of
Registrable Securities to furnish on the date that Registrable Securities are
delivered to the underwriters for sale pursuant to such registration: (i) an
opinion dated such date of counsel representing the Company for the purposes of
such registration, addressed to the underwriters and to such Holder, stating
that such registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Securities Act, (B) the
registration statement, the related prospectus and each amendment or supplement
thereof comply as to form in all material respects with the requirements of the
Securities Act (except that such counsel need not express any opinion as to
financial statements or other financial data contained therein) and (C) to such
other effects as reasonably may be requested by counsel for the underwriters or
by such Holder or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the

                                       18
<PAGE>   19

Company, addressed to the underwriters and to such seller, stating that they are
independent public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereof, comply as to form in all material respects with
the applicable accounting requirements of the Securities Act, and such letter
shall additionally cover such other financial matters (including information as
to the period ending no more than five business days prior to the date of such
letter) with respect to such registration as such underwriters reasonably may
request; and

         (k) notify each Holder, at any time a prospectus covered by such
registration statement is required to be delivered under the Securities Act, of
the happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.

         6.5  Indemnification.

         (a) In the event of a registration of any of the Registrable Securities
under the Securities Act pursuant to Section 6.2, the Company will indemnify,
defend and hold harmless each Holder of such Registrable Securities thereunder,
each underwriter of such Registrable Securities thereunder and each other
person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Holder, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registrable Securities
were registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, and will indemnify each such
Holder, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any reasonable legal and any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability arises
out of or is based on any untrue statement or omission based upon written
information furnished to the Company by an instrument duly executed by such
Holder or underwriter specifically for use therein; provided, further, that the
Company shall not be liable if any such omission or statement of material fact
is corrected in a later prospectus

                                       19
<PAGE>   20

that was provided to the Investors in a timely manner by the Company and the
Investors did not deliver such updated prospectus.

         (b) Each Holder will, if Registrable Securities held by or issuable to
such Holder are included in the securities as to which such registration is
being effected, indemnify and hold harmless the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company and each
underwriter within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, expenses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder
specifically for use therein; provided, however, the total amount for which any
Holder, its officers, directors and partners, and any person controlling such
Holder, shall be liable under this Section 6.5 shall not in any event exceed the
aggregate proceeds received by such Holder from the sale of Registrable
Securities sold by such Holder in such registration.

         (c) Each party entitled to indemnification under this Section 6.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has written notice of any claims as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in actual detriment to
the Indemnifying Party. Additionally, if the named parties to any action
resulting from such claims include both the Indemnified Party and the
Indemnifying Party, and the Indemnified Party is advised in writing by counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the Indemnifying Party, then the
Indemnified Party (or parties if more than one) shall have the right to appoint
one counsel for purposes of such defense whose reasonable fees and expenses
shall be paid by the Company. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which

                                       20
<PAGE>   21

does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation.

         (d) Notwithstanding the foregoing, to the extent that the provisions on
indemnification contained in the underwriting agreements entered into among the
selling Holders, the Company and the underwriters in connection with the
underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall be controlling as to the
Registrable Securities included in the public offering; provided, however, that
if, as a result of this Subsection 6.5(d), any Holder, its officers, directors,
and partners and any person controlling such Holder is held liable for an amount
which exceeds the aggregate proceeds received by such Holder from the sale of
Registrable Securities included in a registration, as provided in Subsection
6.5(b) above, pursuant to such underwriting agreement (the "Excess Liability"),
the Company shall reimburse any such Holder for such Excess Liability.

         (e) If the indemnification provided for in this Section 6.5 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other hand in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the amount any Holder
shall be obligated to contribute pursuant to this Subsection 6.5(e) shall be
limited to an amount equal to the proceeds to such Holder of the Restricted
Securities sold pursuant to the registration statement which gives rise to such
obligation to contribute (less the aggregate amount of any damages which the
Holder has otherwise been required to pay in respect of such loss, claim,
damage, liability or action or any substantially similar loss, claim, damage,
liability or action arising from the sale of such Restricted Securities).

         (f) Survival of Indemnity. The indemnification provided by this Section
6.5 shall be a continuing right to indemnification and shall survive the
registration and sale of any securities by any person entitled to
indemnification hereunder and the expiration or termination of this Agreement.

         6.6 Lockup Agreement. In consideration for the Company agreeing to its
obligations under this Agreement, each Holder agrees in connection with any
registration of the Company's securities (whether or not such Holder is
participating in such registration) upon the request of

                                       21
<PAGE>   22

the Company and the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 180 days in the case of the Company's initial public
offering and 90 days in any other public offering) from the effective date of
such registration as the Company and the underwriters may specify, so long as
all Holders or stockholders holding more than one percent (1%) of the
outstanding common stock and all officers and directors of the Company are, and
continue to be, bound by a comparable obligation.

         6.7 Rule 144. With a view to making available to Holders of Registrable
Securities the benefits of certain rules and regulations of the Commission which
may permit the sale of the Registrable Securities to the public without
registration, the Company agrees at all times after ninety (90) days after the
effective date of the first registration filed by the Company for an offering of
its securities to the general public to:

         (a) make and keep public information available, as those terms are
understood and defined in Rule 144; and

         (b) use its reasonable best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.

         6.8 Transfer of Registration Rights. The rights to cause the Company to
register Registrable Securities of a Holder and other rights under this Article
VI may be assigned by a Holder to any partner or stockholder of such Holder, to
any other Holder, or to a transferee or assignee who receives at least 50,000
shares of Registrable Securities (as adjusted for any stock split, stock
dividend or recapitalization after the date of the first issuance of the Series
A Preferred Stock); provided, that the Company is given written notice by the
Holder at the time of or within a reasonable time after said transfer, stating
the name and address of said transferee or assignee and identifying the
securities with respect to which such registration rights are being assigned.

         6.9 Other Registration Rights. The Company will not grant additional
registration rights to the Founder without granting similar rights to the
Holders. The Stockholders understand and agree that the Investors shall have
registration rights set forth in an agreement separate from this Agreement.

                                       22
<PAGE>   23

                                   ARTICLE VII

                                  MISCELLANEOUS

         7.1 Information Rights. For so long as the Company is not subject to
the periodic reporting requirements of Section 12 of the Exchange Act (or in the
case of the Investors, until a Qualified IPO, if later), the Stockholders, as
set forth below, shall have the right to receive the information stated in this
Section 7.1 from the Company:

         (a)  Periodic Financial and Other Information.

                  (i) within 90 days after the end of each fiscal year of the
Company, commencing with the year ending December 31, 2000; the Company will
provide each Stockholder with audited financial statements of the Company for
such fiscal year, consisting of an income statement, balance sheet and statement
of changes in financial position, and prepared in accordance with generally
accepted accounting principles consistently applied ("GAAP"); and

                  (ii) within 30 days after the end of each quarterly accounting
period of each fiscal year of the Company, commencing with the quarter ending
March 31, 2000, the Company will provide each Stockholder with an unaudited
income statement, balance sheet and statement of cash flow, prepared in
accordance with GAAP, but without any requirement to include notes thereto;

         (b) Additional Information. The Company will permit each Stockholder or
any representative of such Stockholder to visit and inspect the Company's
premises and properties, including its books and records of account, from time
to time, and to discuss the Company's business, finances and accounts with the
Company's officers at reasonable times during the Company's regular business
hours, upon reasonable advance written notice to the Company and in a manner
that will not unreasonably interfere with the normal business operations of the
Company, provided, that access by any Converting LLC Holder to any of the items
referred to above shall be subject to the same restrictions that may be imposed
upon the observer elected by the Converting LLC Holders in accordance with
Section 1.4; and

         7.2 Transfer of Stock. Except as otherwise expressly provided by this
Agreement, each Stockholder agrees not to transfer any of his or its shares of
capital stock of the Company unless the transferee agrees in writing to be bound
by the terms and conditions of this Agreement and executes a counterpart of this
Agreement, and unless such Stockholder has complied with applicable law and all
provisions of this Agreement in connection with such transfer.

         7.3 Duration of Agreement. Except for those provisions that, by their
terms, terminate sooner, the rights and obligations of the Company and each
Stockholder under this Agreement shall terminate as to such Stockholder on the
earliest to occur of the following: (a) the transfer in accordance with this
Agreement of all Shares held by such Stockholder or (b) upon the written

                                       23
<PAGE>   24

consent of the Company, RH, Stockholders holding at least a majority of the
Class A Common Stock, Stockholders holding at least 75% of the Class B Common
Stock and Stockholders holding at least a majority of the Series A Preferred
Stock.

         7.4 Legend. In addition to any legends which the Company determines to
be reasonably necessary at the time of issuance to comply with restrictions or
requirements imposed by Federal or state securities laws or by General
Corporation Law of the State of Delaware, each certificate representing shares
of Series A Preferred Stock and Common Stock shall bear the following legend,
until such time as the shares of Series A Preferred Stock and Common Stock
represented thereby are no longer subject to the provisions hereof:

          "THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
          CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT WHICH INCLUDES A VOTING
          AGREEMENT. COPIES OF THE STOCKHOLDERS AGREEMENT MAY BE OBTAINED UPON
          WRITTEN REQUEST TO THE COMPANY'S SECRETARY."

         7.5 Severability; Governing Law. If any provisions of this Agreement
shall be determined to be illegal or unenforceable by any court of law, the
remaining provisions shall be severable and enforceable in accordance with their
terms. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York.

         7.6 Injunctive Relief. It is acknowledged that it will be impossible to
measure the damages that would be suffered by the nonbreaching party if any
party fails to comply with the provisions of this Agreement and that in the
event of any such failure, the nonbreaching parties will not have an adequate
remedy at law. The non-breaching parties shall, therefore, be entitled to obtain
specific performance of the breaching party's obligations hereunder and to
obtain immediate injunctive relief. The breaching party shall not urge, as a
defense to any proceeding for such specific performance or injunctive relief,
that the nonbreaching parties have an adequate remedy at law. If any action at
law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys' fees,
costs and necessary disbursements in addition to any other relief to which such
party may be entitled.

         7.7 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors and
assignees, legal representatives and heirs. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. The administrator, executor or legal representative of any
deceased or incapacitated Stockholder shall have the right to execute and
deliver all documents and perform all acts necessary to exercise and perform the
rights and obligations of such Stockholder under the terms of this Agreement.

                                       24
<PAGE>   25

         7.8 Additional Stockholders. Until the effective date of the
registration statement in respect of an IPO at which time the terms of this
Section 7.8 shall terminate, prior to being issued Shares, all future
stockholders of the Company during the term of this Agreement shall agree to be
Additional Stockholders and to be bound by the terms and provisions of this
Agreement, including, without limitation, those who obtain Shares through the
exercise of the options described in Section 3.1(d). The Company shall add
Additional Stockholders by joinder whereby the Additional Stockholders shall
sign a counterpart to this Agreement and the appropriate Schedule hereto shall
be amended to reflect the Shares issued to the Additional Stockholder. The
joinder of an Additional Stockholder as contemplated by the preceding sentence
shall not constitute an amendment to this Agreement requiring the consent of the
existing Stockholders except as may otherwise be required by this Agreement in
connection with the issuance of such Shares. Promptly following the addition of
an Additional Stockholder, the Company shall distribute to all Stockholders
copies of this Agreement executed by the Additional Stockholder together with
the appropriate revised Schedule.

         7.9 Modification or Amendment. Neither this Agreement nor any
provisions hereof can be modified, amended, changed, discharged or terminated
except by an instrument in writing, signed by the holders of at least a majority
of the Class A Common Stock, 75% of the Class B Common Stock and a majority of
the Series A Preferred Stock voting. Additionally, to the extent that any such
proposed amendments would detrimentally affect the rights of RH under this
Agreement, such amendment shall require the prior approval of RH.
Notwithstanding the foregoing, this Agreement shall in no event be amended to
distinguish the rights of the Class B Common Stock between the Management
Stockholders, on the one hand, and the Converting LLC Holders on the other hand.

         7.10 Further Issuances of the Class B Common Stock. The Company agrees
that it will not issue additional shares of Class B Common Stock except to
employees, consultants or directors of the Company (other than the Founder) and
to former holders of non-voting limited liability company interests in Princeton
Review Publishing L.L.C. and to the Company's franchisees.

         7.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.

         7.12 Notices. All notices to be given or otherwise made to any party to
this Agreement shall be deemed to be sufficient if contained in a written
instrument, delivered by hand in person, or by express overnight courier
service, or by electronic facsimile transmission (with a copy sent by
first-class mail, postage prepaid), or by registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address set
forth on the signature page hereof or at such other address as may hereafter be
designated in writing by the addressee to the addressor listing all parties. All
such notices shall, when mailed or transmitted, be effective when received or
when attempted delivery is refused.

                                       25
<PAGE>   26

         7.13 No Other Agreements. Each Stockholder represents that he has not
granted and is not a party to any proxy, voting trust or other agreement which
is inconsistent with or conflicts with the provisions of this Agreement, and no
holder of Shares shall grant any proxy or become party to any voting trust or
other agreement which is inconsistent with or conflicts with the provisions of
this Agreement. To the extent of conflicts or inconsistencies between the
Company's Bylaws and this Agreement, the terms of this Agreement shall be
controlling.

                                       26
<PAGE>   27

         IN WITNESS WHEREOF, the Company, the Founder, the Management
Stockholders, RH and the Converting LLC Holders have executed this agreement in
counterparts as of the date first above specified.

TPR HOLDINGS, INC.

By: /s/ John Katzman
       Name:  John S. Katzman
       Title:  President and Chief Executive Officer
       Address:  2315 Broadway, New York, NY  10025
       Fax No.:  (212) 874-0775

FOUNDER:

By: /s/ John Katzman
       Name:  John S. Katzman
      Address:  2315 Broadway, New York, NY  10025
       Fax No.:  (212) 874-0775

RANDOM HOUSE TPR, INC.

By: /s/ Richard Sarnoff
       Name:  Richard Sarnoff
       Title: Executive Vice President and Chief Financial Officer
       Address:  201 East 50th Street, New York, NY  10022
       Fax No.: (212) 572-8700

                   [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]

                                       27
<PAGE>   28

MANAGEMENT STOCKHOLDERS:

/s/ Bruce Task
Name:    Bruce Task
Title:
Address:
Fax No.:

/s/ Alicia Ernst
Name:    Alicia Ernst
Title:
Address:
Fax No.:

/s/ Jay Shulman
Name:    Jay Shulman
Title:
Address: 2 Forrestdale Dr., Huntington, NY  11743
Fax No.: (516) 877-5958

/s/ Steven Kursar
Name:    Steven Kursar
Title:
Address:  4320 Greeley St., Houston, TX  77006
Fax No.:  (713) 529-6062

/s/ Mark Chernis
Name: Mark Chernis
Title: Chief Operating Officer
Address: 101 West 90th, NY, NY
Fax No.:

/s/ Jay Rosner
Name: Jay Rosner
Title:
Address:
Fax No.:

/s/ Harold K. Lee
Name: Harold K. Lee
Title:
Address: 3834 Howe Street #9
         Oakland, CA 94611
Fax No.:

                    [SIGNATURE PAGE TO STOCKHOLDER AGREEMENT]

                                       28
<PAGE>   29

CONVERTING LLC HOLDERS:

Charles Emmons & Charles Emmons Jr. Jointly

By: /s/ Charles F. Emmons, Jr.
    Name:  Charles F. Emmons, Jr.
    Title:  Treasurer
    Address:  77 Oak Street, Florence, MA  01062
    Fax No.:  (413) 586-4939

By: /s/ Charles F. Emmons
    Name:  Charles F. Emmons
    Title:  President
    Address:  6093 Vt. Rte 14, Brookfield, VT  05036
    Fax No.:  (802) 276-2153

The Princeton Review of Orange County, Inc.

By: /s/ Paul Kanarek
    Name:  Paul Kanarek
    Title:  President
    Address: 2151 Michelson #280, Irvine, CA  92612
    Fax No.:  (949) 553-8119

The Princeton Review of North Carolina , Inc.

By: /s/ Patricia Krebs
    Name:  Patricia Krebs
    Title:  President
    Address:  1525 E. Franklin Street, Chapel Hill, NC  27514
    Fax No.:  ((919) 967-7218

                    [SIGNATURE PAGE TO STOCKHOLDER AGREEMENT]

                                       29
<PAGE>   30

Lecomp Company, Inc.

By: /s/ Lloyd Eric Cotsen
    Name:  Lloyd Eric Cotsen
    Title:  Mindless Cretin
    Address:  1880 Veteran Ave (#310), Los Angeles, CA 90025
    Fax No.:  (310) 479-0768

The Princeton Review of Pittsburgh, Inc.

By: /s/ James L. Weinberg
    Name:  James L. Weinberg
    Title: President
    Address:  410 Hampton Ave., Pittsburgh, PA  15221
    Fax No.:  (412) 243-7218

The Princeton Review of Rhode Island, Inc.

By: /s/ Paul Stouber
    Name:  Paul Stouber
    Title:  President
    Address:  189 Governor Street, Suite 103, Providence, RI  02906
    Fax No.:  (401) 861-5096

/s/ Karen Kearns
    Name:  Karen Kearns
    Title:  Director
    Address:  1555 Francia St., San Juan, PR  00911
    Fax No.:  (787) 724-8057

                   [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]

                                       30
<PAGE>   31

The Princeton Review of Peninsula, Inc.

By: /s/ Pamela N. Hirsch
    Name:  Pamela N. Hirsch
    Title:  Owner
    Address:  3543 Mandeville Canyon Road, Los Angeles, CA  90041
    Fax No.:  (310) 476-8156

The Princeton Review of St. Louis, Inc.

By: /s/ William Lindsley
    Name:  William Lindsley
    Title:
    Address:
    Fax No.:

The Kafiristan Blokes

By: /s/ F. Wade McKinney, /s/ Stephen A. Leake
    Name: F. Wade McKinney, Stephen A. Leake
    Title:  Owners
    Address:  110 21st Ave S. #106, Nashville, TN  37203
    Fax No.:  (615) 292-5912

    /s/ Elyane Harney
    Name: Elyane Harney
    Title:  Consultant
    Address:  2310 Mason St.
    Fax No.:  (415) 445-9173

                   [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]

                                       31
<PAGE>   32

The Princeton Review of Boston, Inc.

By: /s/ Rob Cohen
    Name:  Robert Cohen
    Title:  Secretary
    Address:  57 Union Street, Boston, MA  02459
    Fax No.:  (617) 558-2727

The Princeton Review of New Jersey, Inc.

By: : /s/ Rob Cohen
     Name:  Robert Cohen
     Title:  President
     Address:  252 Nassau Street, Princeton, NJ  08542
     Fax No.:  (609) 688-0432

TSTS, Inc.

By: /s/ Rob Case
    Name:  Rob Case
    Title:  Chief Executive Officer
    Address:  701 N. Post Oak Rd. #8, Houston, TX  77024
    Fax No.:  (512) 474-8385, (512) 402-0416

Test Services, Inc.

By: /s/ Peter Dinneen
    Name:  Peter Dinneed
    Title:  President
    Address:  7350 N. Broadway, Denver, CO  80221
    Fax No.:  (303) 487-9402

                   [SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]

                                       32
<PAGE>   33

                                   SCHEDULE A

                             CONVERTING LLC HOLDERS

<TABLE>
<CAPTION>
                                                          NUMBER OF SHARES OF NON-VOTING
NAME OF STOCKHOLDER                                            CLASS B COMMON STOCK

<S>                                                       <C>
Charles Emmons & Charles Emmons Jr. (joint)                           24,431
The Princeton Review of Orange County, Inc.                           97,277
The Princeton Review of North Carolina, Inc.                          22,722
Lecomp Company, Inc.                                                 169,614
The Princeton Review of Pittsburgh, Inc.                              18,594
The Princeton Review of Rhode Island, Inc.                            17,099
Karen Kearns                                                           3,498
The Princeton Review of Penninsula, Inc.                              61,062
The Princeton Review of St. Louis, Inc.                               25,844
The Kafiristan Blokes                                                  7,325
Elayne Harney                                                          3,465
The Princeton Review of Boston, Inc.                                 150,456
The Princeton Review of New Jersey, Inc.                             291,791
TSTS, Inc.                                                           191,300
Test Services, Inc.                                                  239,114
</TABLE>

                                       33
<PAGE>   34

                                   SCHEDULE B

                             MANAGEMENT STOCKHOLDERS

<TABLE>
<CAPTION>
                                                   Number of Shares of Non-Voting
Name of Stockholder                                     Class B Common Stock

<S>                                                <C>
Bruce Task                                                           204,928
Mark Chernis                                                         120,756
Alicia Ernst                                                         120,756
Jay Rosner                                                           120,756
Jay Shulman                                                           85,244
Harold K. Lee                                                         77,069
Steven Kursar                                                         98,216
</TABLE>

                                       34
<PAGE>   35

                      THIS SCHEDULE IS SUBJECT TO REVISIONS
                   PENDING CALCULATION OF FINAL SHARE NUMBERS

                                   SCHEDULE C

                                    INVESTORS

<TABLE>
<CAPTION>
                                                           Number of Shares of
Name of Stockholder                                     Series A Preferred Stock
<S>                                                     <C>

</TABLE>

                                       35
<PAGE>   36

                                  SCHEDULE A-1

<TABLE>
<CAPTION>
Name of Stockholder                            Number of Shares of Class A Common Stock
<S>                                           <C>
John S. Katzman                               11,470,063

Random House TPR, Inc.                         3,378,618
</TABLE>

                                       36<PAGE>   1
                                                                    Exhibit 10.2

                           THE PRINCETON REVIEW, INC.

                   SERIES A PREFERRED STOCK PURCHASE AGREEMENT

         This Series A Preferred Stock Purchase Agreement (the "Agreement") is
entered into as of the 18th day of April 2000, by and among The Princeton
Review, Inc., a Delaware corporation (the "Company"), and the persons and
entities listed on Exhibit A hereto (hereinafter referred to as the
"Purchasers").

         WHEREAS, the Company has undergone a reorganization whereby all the
shareholders of the previous entity known as The Princeton Review, Inc. ("Old
Review") and all the members of its majority owned subsidiaries contributed all
their common stock or membership interests, as the case may be, to the Company
in exchange for an agreed upon proportionate number of shares of common stock of
the Company (the "Reorganization");

         WHEREAS, the Company desires to enter into this Agreement with the
Purchasers to raise additional capital through the sale and issuance of shares
of its preferred stock to the Purchasers; and

         WHEREAS, the Purchasers desire to enter into this Agreement to acquire
shares of preferred stock of the Company on the terms and conditions set forth
herein;

         NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties to this Agreement mutually agree as follows:

         1.       Authorization and Sale of Series A Preferred Stock.

                  1.1 Authorization. The Company has authorized the issuance and
sale of up to an aggregate of 3,713,540 shares of its Series A Preferred Stock,
$.01 par value (the "Series A Shares"), having the rights, preferences,
privileges and restrictions set forth in the Company's Restated Articles of
Incorporation, as amended, a copy of which is attached hereto as Exhibit B (the
"Articles").

                  1.2 Sale. (A) Subject to the terms and conditions of this
Agreement, the Purchasers severally, and not jointly or jointly and severally,
agree to purchase from the Company and the Company agrees to sell and issue to
the Purchasers the number of Series A Shares (collectively, the "Shares")
specified opposite such Purchaser's name under the column "Number of Shares" on
Exhibit A at the purchase price of $7.2707 per share. The Company shall not be
obligated to sell and issue to the Purchasers any Shares pursuant to this
Section unless the Company receives at least $20,000,000 in gross proceeds at
the Closing (as defined in Section 2.1).

                                       1
<PAGE>   2
         2.       Closing, Delivery

                  2.1 Closing. The purchase and sale of the Series A Preferred
Stock shall take place at such time and place as the Company and the Purchasers
may agree (such closing being called the "Closing" and such date and time being
called the "Closing Date").

                  2.2 Delivery. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchasers certificates, in
such denominations and registered in such name or names as the Purchasers may
designate by notice to the Company, representing the Series A Shares to be
purchased by the Purchasers from the Company, dated the Closing Date, against
payment of the purchase price therefor by wire transfer or by check or checks
made payable to the order of the Company in immediately available funds or by
such other means as shall be mutually agreeable to the Purchasers and the
Company.

         3. Representations and Warranties of the Company. Subject to and except
as disclosed by the Company in the Schedule of Exceptions attached hereto as
Exhibit C and incorporated herein by reference (the "Schedule of Exceptions"),
the Company makes the following representations and warranties to the Purchasers
as of the date hereof and as of the Closing Date. As used in this Section 3, the
term "Company" shall mean and include the Company itself and its majority owned
subsidiaries taken as a whole. The following representations and warranties
shall only be modified by Exhibit C to the extent such Exhibit specifically
references the representation or warranty to be modified.

                  3.1 Organization and Standing. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, has all requisite corporate power and authority to own and
operate its properties and assets and to carry on its business as now conducted
and as currently proposed to be conducted. The Company is duly qualified and
authorized to do business and is in good standing as a foreign corporation, in
each jurisdiction where the nature of its activities and of its properties (both
owned and leased) makes such qualification necessary except where the failure to
be so qualified would not have a Material Adverse Effect (as defined in Section
3.6). The Company has delivered to the Purchasers or their representatives, or
given such parties access to, true and correct copies of the (i) Articles of
Incorporation and the Bylaws or Operating Agreements, as the case may be, as in
effect as of the date hereof and the Closing Date, and (ii) the ledgers and
minute books, in each case, of the Company and each of its subsidiaries.

                  3.2 Capitalization. The authorized capital of the Company,
immediately prior to the Closing Date, will consist of:

                           (a) Preferred Stock: 5,000,000 shares of Preferred
Stock, $.01 par value, all of which have been designated Series A Preferred
Stock, none of which are issued and outstanding.

                           (b) Common Stock: 25,000,000 shares of Class A Voting
Common Stock, $.01 par value ("Class A Common Stock"), of which 14,848,681
shares are issued and outstanding and 10,000,000 shares of Class B Non-Voting
Common Stock, $.01 par value, ("Class

                                       2
<PAGE>   3
B Common Stock" and together with the Class A Common Stock the "Common Stock"),
of which 3,229,223 shares are issued and outstanding.

         All of the outstanding shares of capital stock have been duly
authorized and validly issued, are fully paid and nonassessable and were issued
in compliance with all applicable federal and state securities laws. As of the
Closing Date, the Company will have duly and validly reserved (i) 3,713,540
shares of Series A Preferred Stock for issuance hereunder, (ii) 3,713,540 shares
of Class A Common Stock for issuance upon conversion of the Series A Preferred
Stock, and (iii) 3,000,000 shares of Class B Common Stock for issuance under the
Company's Stock Incentive Plan, pursuant to which 1,077,906 shares of Class B
Common Stock are issued and outstanding, options to purchase 1,646,832 shares
are outstanding, and 275,262 shares remain available for future grant. Except
for the rights described in the preceding sentence as to the Company's Stock
Incentive Plan, the conversion rights associated with the Preferred Stock, the
rights created under this Agreement, the Investor Rights Agreement attached
hereto as Exhibit D and incorporated herein by reference (the "Rights
Agreement") and the Shareholder Agreement attached hereto as Exhibit E and
incorporated herein by reference (the "Shareholder Agreement"), there are no
outstanding rights of first refusal, preemptive rights or other rights, options,
warrants, conversion rights or other agreements, either directly or indirectly,
for the purchase or acquisition from the Company of any shares of its capital
stock. Except as provided in the Articles, there are no outstanding options,
rights, other securities agreements or other commitments, arrangements or
undertakings pursuant to which the Company is or may become obligated to redeem,
repurchase or otherwise acquire or retire any shares of capital stock that are
presently outstanding or may be issued in the future. Attached as Schedule 3.2
hereto is a complete and accurate list of all the Company's outstanding shares,
warrants, convertible or exchangeable securities, and options as of the time
immediately after the Closing Date, and such schedule reflects any dilution and
exercise of preemptive rights triggered by the transactions contemplated hereby.

         The Series A Preferred Stock has the rights, preferences and privileges
provided for in the Articles. The Company is not a party or subject to any
agreement or understanding, and, to the Company's knowledge, except as set forth
in the Shareholder Agreement, there is no agreement or understanding between any
persons and/or entities with respect to any of the Company's capital stock,
except as otherwise set forth in any of the Schedule of Exceptions. The shares
of Class A Common Stock issuable upon conversion of the Shares will represent,
in the aggregate, approximately 15.66% of the outstanding shares of Common Stock
at the Closing Date, and the voting power of such issued shares will represent,
in the aggregate, approximately 20.00% of the total number of votes able to be
cast in any matter by all voting securities of the Company at the Closing Date,
treating for purposes of these calculations all securities convertible into,
exchangeable and exercisable for shares of Common Stock outstanding on the date
hereof, including all shares of Common Stock reserved for issuance under the
Company's Stock Incentive Plan, as having been converted, exchanged or
exercised, and assuming the closings of the sale of all Shares reserved for
issuance hereunder.

                  3.3 Subsidiaries. Except for Old Review, Princeton Review
Management, L.L.C., Princeton Review Publishing, L.L.C. (including its wholly
owned Subsidiary, Apply Technology, L.L.C.), Princeton Review Products, L.L.C.
and Princeton Review Operations, L.L.C. the Company does not currently own, have
any investment in, or control, directly or indirectly, any

                                       3
<PAGE>   4
other corporation, association, or other business entity. The Company is not,
directly or indirectly, a participant in any joint venture or partnership. Each
subsidiary is duly qualified and authorized to do business, and is in good
standing as a foreign corporation, in each jurisdiction where the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary. The outstanding shares of capital stock of each such
subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company free and clear of any adverse claim,
and no options, warrants or other rights to acquire shares of capital stock or
other ownership interests in such subsidiary are outstanding. The Company owns
one hundred percent (100%) of the outstanding capital stock of Old Review,
Princeton Review Management, L.L.C., Princeton Review Products, L.L.C.,
Princeton Review Operations, L.L.C. and Princeton Review Publishing, L.L.C.

                  3.4 Authorization. All corporate action on the part of the
Company and its officers, directors and shareholders necessary (i) for the
authorization, execution and delivery of this Agreement, the Shareholder
Agreement and the Rights Agreement (collectively, the "Agreements"), (ii) the
performance of all the Company's obligations hereunder and thereunder and (iii)
the authorization, issuance, reservation, sale and delivery of the Shares and
the Class A Common Stock issuable upon conversion thereof (the "Underlying
Common Stock") has been taken or will be taken prior to the Closing. This
Agreement has been duly executed and delivered by the Company and constitutes,
and the other Agreements, when duly executed and delivered by the Company will
constitute, valid and legally binding obligations of the Company enforceable in
accordance with their terms.

                  3.5 Validity of the Shares. The sale of the Shares and the
subsequent conversion of the Shares into the Underlying Common Stock will not be
subject to any preemptive rights, rights of first refusal or other preferential
rights that have not been waived and will not result in the anti-dilution
provisions of any security becoming applicable, and the Shares when issued, sold
and delivered in accordance with the terms of this Agreement and the Underlying
Common Stock when issued upon conversion of the Shares in accordance with the
Articles will be validly issued (including, without limitation, issued in
compliance with applicable federal and state securities laws), fully paid and
nonassessable and will be free of any liens or encumbrances; provided, however,
that the Shares and the Underlying Common Stock may be subject to restrictions
on transfer as set forth herein or in the Rights Agreement or in the Shareholder
Agreement.

                  3.6      Financial Statements, Changes

                           (a) The Company has delivered to the Purchasers (i)
copies of the Old Review's financial statements as of and for each of the years
ended December 31, 1996, 1997, 1998 and 1999, accompanied by the reports
thereon, of the Old Review's independent public accountants, and (ii) copies of
the pro forma financial statements, as of and for the year ended December 31,
1999, giving pro forma effect to the Reorganization (the "Financial
Statements"). The Financial Statements fairly present, in all material respects,
the financial position of the Old Review as of the respective dates thereof and
the results of operations of the Old Review for the fiscal years then ended and
have been prepared (including the notes thereto) in conformity with United
States generally accepted accounting principles ("GAAP") applied in a consistent
basis, except as otherwise noted therein. The Company maintains and will
continue to maintain a standard

                                       4
<PAGE>   5
system of accounting established and administered in accordance with generally
accepted accounting principles.

                           (b) Since December 31, 1999, there has not been:

                                    (i) any event, violation or other matter
         that could, individually or in the aggregate, reasonably be expected to
         have a material adverse effect on the assets, properties, financial
         condition, operating results, prospects or business of the Old Review
         and its subsidiaries taken as a whole or, since the Reorganization, of
         the Company and its subsidiaries taken as a whole ("Material Adverse
         Effect");

                                    (ii) any obligation or liability (whether
         absolute, accrued, contingent or otherwise, and whether due or to
         become due) incurred by the Old Review or its subsidiaries or, since
         the Reorganization, by the Company or its subsidiaries, in excess of
         $100,000 in the singular or the aggregate, other than obligations under
         customer contracts, current obligations and liabilities incurred in the
         ordinary course of business and consistent with past practice;

                                    (iii) any payment, discharge, satisfaction
         or settlement of any material claim or obligation of the Old Review or,
         since the Reorganization, of the Company, except in the ordinary course
         of business and consistent with past practice;

                                    (iv) any declaration, setting aside or
         payment of any dividend or other distribution with respect to any
         shares of capital stock of the Old Review or, since the Reorganization,
         of the Company or any direct or indirect redemption, purchase or other
         acquisition of any such shares;

                                    (v) except for (i) this Agreement, (ii) the
         issuance and sale of securities pursuant to the Reorganization, or
         (iii) any options granted or stock sold pursuant to the Stock Incentive
         Plan, any issuance or sale, or any contract entered into for the
         issuance or sale, of any shares of capital stock or securities
         convertible into or exercisable for shares of capital stock of the Old
         Review or, since the Reorganization, of the Company.

                                    (vi) any sale, assignment, pledge,
         encumbrance, transfer or other disposition of any material tangible
         asset of the Old Review or, since the Reorganization, of the Company
         (other than sales or licensing of its products to customers in the
         ordinary course of business consistent with past practice), or any
         sale, assignment, transfer or other disposition of any Intellectual
         Property (as defined in Section 3.14(e)), other than licensing of
         products of the Old Review or, since the Reorganization, of the Company
         in the ordinary course of business and on a nonexclusive basis;

                                    (vii) any creation of any lien on any
         property of the Old Review or, since the Reorganization, of the Company
         other than liens arising in the ordinary course of business by
         operation of law, none of which individually or in the aggregate cause
         a Material Adverse Effect;

                                       5
<PAGE>   6
                                    (viii) any write-down of the value of any
         asset of the Old Review or, since the Reorganization, of the Company or
         any write-off as uncollectible of any accounts or notes receivable or
         any portion thereof except in the ordinary course of business and in a
         magnitude consistent with historical practice;

                                    (ix) any cancellation of any debts or claims
         or any material amendment, termination or waiver of any rights of the
         Old Review or its subsidiaries or, since the Reorganization, of the
         Company or its subsidiaries except for those in the ordinary course of
         business that would not have a Material Adverse Effect.

                                    (x) any expenditure or commitment or
         addition to property, plant or equipment of the Old Review or, since
         the Reorganization, of the Company except in amounts less than $100,000
         in the singular or the aggregate;

                                    (xi) except for stock or options issued
         pursuant to the Stock Incentive Plan, any general increase in the
         compensation of employees of the Old Review or, since the
         Reorganization, of the Company (including any increase pursuant to any
         written bonus, pension, profit-sharing or other benefit or compensation
         plan, policy or arrangement or commitment), or any increase in any such
         compensation or bonus payable to any officer, stockholder, director,
         consultant or agent of the Old Review or, since the Reorganization, of
         the Company having an annual salary or remuneration in excess of
         $100,000;

                                    (xii) any damage, destruction or loss
         (whether or not covered by insurance) affecting any asset or property
         of the Old Review or, since the Reorganization, of the Company
         resulting in liability or loss in excess of $100,000;

                                    (xiii) any change in the independent public
         accountants of the Old Review or, since the Reorganization, of the
         Company or any material change in the accounting methods or accounting
         practices followed by the Old Review or, since the Reorganization, of
         the Company or any material change in depreciation or amortization
         policies or rates;

                                    (xiv) any resignation or termination of
         employment of any officer or key employee of the Old Review or, since
         the Reorganization, of the Company, and the Company does not know of
         any impending resignation or termination of employment of any such
         officer or key employee;

                                    (xv) any receipt of notice that there has
         been a loss of, or material order cancellation by, a major customer,
         advertiser or sponsor of the Old Review or, since the Reorganization,
         of the Company;

                                    (xvi) any loans or guarantees made by the
         Old Review or, since the Reorganization, by the Company to or for the
         benefit of its employees, officers or directors, or any members of
         their immediate families, other than advances made in the ordinary
         course of business;

                                       6
<PAGE>   7
                                    (xvii) any agreement, whether in writing or
         otherwise, to take any of the actions specified in the foregoing items
         (i) through (xvi); or

                                    (xviii) any payment to Adam Robinson in
         settlement of his claims or by judgment against the Company in an
         amount (i) exceeding $2,000,000, without issuing, at no additional cost
         to the Purchasers, an additional amount of fully paid and nonassessable
         shares of Series A Preferred Stock sufficient to provide the Purchasers
         the number of Shares at the Closing Date as if the $150,000,000
         pre-investment valuation of the Company had been reduced
         dollar-for-dollar by the amount of such payment in excess of
         $2,000,000, or (ii) exceeding $3,000,000, without the approval of at
         least seventy-five percent (75%) of holders of the Series A Shares. For
         purposes of calculating the amount of any payment to Adam Robinson,
         Section 7.2(b) shall govern.

                                    (xix) to the best of the Company's
         knowledge, any other event or condition of any character that may have
         a Material Adverse Effect.

                  3.7 Material Agreements. The Schedule of Exceptions contains a
complete list of all of the following material agreements to which the Company
or any of its subsidiaries is a party: (a) all contracts, agreements and
instruments that involve a commitment or obligation (contingent or otherwise) by
the Company in excess of $100,000; (b) all loan, lease or debt agreements in
excess of $100,000; (c) all agreements or letters of intent relating to the
acquisition of other businesses in which the fair market value of the business
acquired, or to be acquired, exceeds $100,000; (d) relating to the sale or other
disposition of any assets, properties or rights (other than in the ordinary
course of business); (e) relating to the distribution of the Company's or its
subsidiaries' products or services that require the payment of money in excess
of $100,000; (f) that restricts the Company's or its subsidiaries' ability to do
business in any geographic area or grants to any person exclusive or similar
rights in any line of business or in any geographic area; (g) that restricts the
Company's ability to solicit employees of another person or restricts another
person's ability to solicit the Company's employees; (h) all material licenses
of any patent, trade secret or other proprietary right to or from the Company;
(i) all contracts with Random House, Inc. and The McGraw-Hill Companies, Inc.
that contributed to 1999 revenues; and (j) all publishing agreements in excess
of $100,000 that contributed to 1999 revenues (collectively, the "Material
Agreements"). All the Material Agreements are valid and binding obligations of
the Company, in full force and effect in all material respects. The Company is
not in default and not aware of any default by another party, either pending or
threatened, with respect to the Material Agreements. The Company is not a party
to and is not bound by any contract, agreement or instrument, including, without
limitation, any noncompetition agreements, or subject to any restriction under
its Articles of Incorporation or Bylaws, that could reasonably be expected to
have a Material Adverse Effect under the Company's present circumstances. The
Company is not presently engaged in and has no present intention of engaging in
any negotiation or discussion that would, in any transaction or series of
transactions, effect (i) the consolidation or merger of the Company into or with
any other corporation or corporations, (ii) the sale, conveyance or disposition
of all or substantially all of the assets of the Company, (iii) transfer of more
than fifty percent (50%) of the voting power of the Company to any entity or
entities not controlled by the Company, (iv) any similar form of acquisition or
any liquidation, dissolution or winding up of the Company or other transaction
that results in the discontinuance of the Company's business.

                                       7
<PAGE>   8
                  3.8      Title to Properties and Assets.

                           (a) Except as disclosed on the Schedule of Exceptions
with respect to this Section 3.8, the Company has good and marketable title to,
or a valid leasehold interest in, as applicable, all tangible assets reflected
on the balance sheet contained in the Financial Statements or acquired after the
date thereof, free and clear of all liens except statutory liens for the payment
of current taxes that are not yet delinquent and security interests which arise
in the ordinary course of business and which do not affect the properties or
assets of the Company in any material respect and except as to such
imperfections in title as would not have a Material Adverse Effect. With respect
to the property and assets it leases, the Company is in material compliance with
such leases. The tangible assets owned by the Company are in all material
respects in good operating condition and repair, ordinary wear and tear
excepted, and all tangible assets leased by the Company are in all material
respects in the condition required by the terms of the lease applicable thereto
during the terms of such lease and upon the expiration thereof. Such assets,
together with the real property and intellectual property assets, constitute all
the material properties, interests, assets and rights held for use or used in
connection with the business and operations of the Company and constitute all
those necessary to continue to operate the business of the Company in all
material respects consistent with current and historical practice and as
presently contemplated to be conducted. Except as indicated in the preceding
sentence, this Section 3.8(a) does not relate to (i) real property or interests
in real property, or (ii) intellectual property of the Company; such items are
covered under Section 3.8(b) and Section 3.14, respectively.

                           (b) The Company does not own fee title to any real
property. The Schedule of Exceptions discloses with respect to this Section
3.8(b) a complete list of all real property and interests in real property
leased by the Company identifying properties as either single-tenant buildings
or multi-tenant buildings. The Company or a subsidiary is the sole lessee
thereof and has a good and valid leasehold interest in all real property and
interests in real property shown on Schedule 3.8 to be leased by it free and
clear of all liens. There exists no material default, or any event which upon
notice or the passage of time, or both, would give rise to any material default,
in the performance of the Company or, to the knowledge of the Company, by any
lessor under any such lease, nor, to the knowledge of the Company, is the
landlord of any such lease in default.

                  3.9 Undisclosed Liabilities. The Company does not have and, as
a result of the transactions contemplated in this Agreement or in the other
Agreements, will not have, any material liabilities or obligations of any nature
(whether accrued, absolute, contingent, unasserted or otherwise and whether due
or to become due) which are required under generally accepted accounting
principles to be disclosed on the Financial Statements and are not so disclosed
or otherwise disclosed in the Schedule of Exceptions with respect to this
Section 3.9, except for liabilities and obligations incurred in the ordinary
course of business consistent with past practice and which individually do not
exceed $100,000. The reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonably based upon facts and circumstances known
by the Company on the date hereof and there are no loss contingencies that are
required to be accrued by Statement of Financial Accounting Standard No. 5 of
the Financial Accounting Standards Board that are not provided for on the
balance sheets contained in the Financial Statements as of the respective dates
thereof.

                                       8
<PAGE>   9
                  3.10 Obligations to Related Parties. Except as set forth on
the Schedule of Exceptions, no officer, director, shareholder or employee of the
Company, including any member of their immediate families, is (i) a party to any
transaction with the Company (including any contract, agreement or other
arrangement providing for the furnishing of services by, or rental of real or
personal property from, or otherwise requiring payments to, any such officer,
director, shareholder, employee or relative, but excluding wages and benefits),
or (ii) the direct or indirect owner of an interest in any business or person
that is a competitor, supplier or customer of the Company (except for a passive
investment in less than five percent (5%) of the common stock of any publicly
traded company), nor does any such person receive income from any source other
than the Company that relates to the Company's business or should properly
accrue to the Company.

                  3.11 Employee Matters, ERISA. The Schedule of Exceptions
contains a complete list of all employment agreements, deferred compensation,
pension or retirement agreements or arrangements, bonus, incentive or
profit-sharing plans or arrangements, or labor or collective bargaining
agreements, written or oral, of the Company that provide any employee of the
Company compensation or benefits in excess of $5,000, and the Company does not
have in effect any consulting agreement, written or oral, that provides any
consultant to the Company compensation in excess of $10,000. The Company has no
knowledge that any officer of the Company presently intends to terminate his
employment. The Company is in compliance in all material respects with all
applicable laws and regulations relating to labor, employment, fair employment
practices, terms and conditions of employment, and wages and hours, except where
the failure to so comply would not be reasonably expected to result in a
Material Adverse Effect. The Company is not a party to any collective bargaining
agreement or other labor union contract and, to the Company's knowledge, there
are no activities or proceeding of any labor union to organize any employees of
the Company. The Company is in material compliance with the terms of all plans,
programs and agreements listed on the Schedule of Exceptions with respect to
this Section 3.11, and each such plan, program or agreement is in compliance in
all material respects with all of the applicable requirements and provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
the Internal Revenue Code of 1986, as amended (the "Code"). Each plan intended
to qualify under Code Section 401(a) and any related trust intended to qualify
for exemption from federal income tax under Code Section 501(a) has received a
favorable determination letter from the IRS or is an adoption of a prototype
plan in respect of which the IRS has issued a favorable opinion letter, and
nothing has occurred since the date of such determination letter that would
materially adversely affect such qualification or tax-exempt status. No
nonexempt prohibited transaction (as defined in Code Section 4975) exists with
respect to any plan listed on the Schedule of Exceptions with respect to this
Section 3.11 which would result in a tax or penalty to be imposed on the Company
that would be reasonably expected to have a Material Adverse Effect. No Plan has
currently an "accumulated funding deficiency" (as defined in Section 302 of
ERISA), and no reportable event (as defined in Section 4043(d) of ERISA) has
occurred with respect to any such Plan for which the Pension Benefit Guaranty
Corporation notice filing requirements have not been waived. The Company is not
now contributing, nor has it ever contributed, to a "defined benefit pension
plan" (as defined in ERISA Section 3(35)) nor a "multi employer plan" (as
defined in ERISA Section 3(37)). The Company has complied in all material
respects with the continued health plan coverage requirements under part 6 of
Title I of ERISA. With respect to each plan listed on the Schedule of Exceptions
for this Section 3.11, an "employee pension benefit plan" under Section 3(2) of
ERISA, all required filings,

                                       9
<PAGE>   10
including all filings required to be made with the United States Department of
Labor and Internal Revenue Service, have been timely filed, except where the
failure to file would not have a Material Adverse Effect.

                  3.12 Compliance with Other Instruments. The Company is not in
violation of any provisions of the Articles of Incorporation or its Bylaws as
amended and in effect on and as of the Closing Date, or of any provisions of any
judgment, decree or order by which it is bound. The execution and delivery by
the Company of the Agreement do not, and the consummation of the transactions
contemplated hereby and thereby and compliance with the terms thereof, and the
issuance and sale of the Shares and the Underlying Common Stock pursuant
thereto, will not breach, conflict with, or result in any violation of or
default (with or without notice or lapse of time or both) under, or give rise to
a right of termination, cancellation or acceleration of any obligation or to the
loss of any benefit under, or result in the creation or imposition of any lien
of any nature whatsoever upon any of the properties or assets of the Company
under, (a) any loan or credit agreement, note, bond, mortgage, indenture, deed
of trust, license, franchise, lease, contract, commitment, permit, agreement,
understanding, instrument or obligation or other arrangement to which the
Company is a party or by which the Company or any of its properties or assets
may be bound or affected, (b) any provision of the Articles, Bylaws or other
constitutive documents of the Company, (c) any judgment, order, writ, injunction
or any decree, or any statute, law, ordinance, rule or regulation applicable to
the Company or any of its properties or assets except, in the case of
subsections (a) and (c) as would not result in a Material Adverse Effect.

                  3.13 Litigation. Except as set forth on the Schedule of
Exceptions with respect to this Section 3.13, there are no suits, actions,
claims, arbitration or other legal, administrative or regulatory proceedings or,
to the knowledge of the Company, investigations, whether at law or in equity, or
before or by any federal, foreign, state or municipal or other governmental
department, commission, board, bureau, agency or instrumentality (a) pending or,
to the knowledge of the Company, threatened by or against or affecting the
Company or any of its properties or assets or (b) to the knowledge of the
Company, pending or threatened by or against any of the officers or employees of
the Company that relate to or involve the termination by such person of his
employment with any of such person's former employers. To the knowledge of the
Company, there is no basis for any such lawsuit, claim, arbitration or other
proceeding or investigation which, if commenced, would reasonably be expected to
result in a Material Adverse Effect. There is no outstanding judgment, order or
decree of any governmental authority or arbitrator applicable to the Company or
any of its properties, assets or business. There is no action, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate.

                                       10
<PAGE>   11
                  3.14     Intellectual Property.

                           (a) Set forth with respect to this Section 3.14 on
the Schedule of Exceptions is a true and complete list of Intellectual Property
(as defined below) owned or filed by, or licensed to, the Company or used in the
conduct of the Company's business as presently conducted. With respect to
registered trademarks, the Schedule of Exceptions sets forth a list of all
jurisdictions in which such trademarks are registered or applied for and all
registration and application numbers. The Company believes, after due inquiry,
that it has (having received no notice or threatened notice to the contrary) all
rights to Intellectual Property as are used or are necessary in connection with
the business of the Company as presently conducted. Except as set forth on the
Schedule of Exceptions, the Company owns, or has the right to use, execute,
reproduce, display, perform, modify, enhance, distribute, prepare derivative
works of and sublicense, without payment to any other Person, all such
Intellectual Property as currently used in the business, free and clear of all
liens whatsoever. The consummation of the transactions contemplated hereby will
not conflict with, alter or impair any such right. The Company has not entered
into any agreement to indemnify any other Person against any charge of
infringement of any third-party Intellectual Property, except infringement
indemnities agreed to in the ordinary course and included as part of the
Company's contracts for the license or sale of its products or services. The
Company has not entered into any agreement granting any third-party the right to
bring infringement actions or otherwise to enforce rights with respect to the
Company's Intellectual Property.

                           (b) Except in the ordinary course of business through
its licensing agreements, the Company has not granted any options, exclusive
licenses, assignments or agreements of any kind relating to (i) ownership of
rights in Intellectual Property, or (ii) the marketing or distribution of
Intellectual Property. The conduct of the business of the Company as presently
conducted does not violate, conflict with or infringe the Intellectual Property
of any other person. No claims are pending, or to the knowledge of the Company,
threatened, against the Company by any person with respect to the ownership,
validity, enforceability, effectiveness or use of any Intellectual Property and,
since its inception, the Company has not received any communications alleging
that the Company has violated any rights relating to Intellectual Property of
any person. To the best of the Company's knowledge, the material Intellectual
Property owned or used in the conduct of the Company's business as presently
conducted, is valid and enforceable.

                           (c) Without limiting the foregoing, the Company has
licensed or otherwise possesses the right to use all software, databases and
system or user documentation in use on or in connection with any computer owned
or leased by the Company or server hosted for the Company ("Internal Use
Software") for such Internal Use Software as is used in connection with the
business of the Company as presently conducted either (i) by means of lawfully
and validly acquired licenses that authorize the use of such Internal Use
Software together with all other copies of such software used by the Company, or
(ii) by means of ownership of all Intellectual Property rights in software
through development by employees or assignment by third parties.

                           (d) The Company has used all commercially reasonable
efforts to (i) protect and enforce all copyright, trademark and patent rights of
the Company except for those copyright, trademark and patent rights that,
individually or in the aggregate, are not material to the Company individually
or in the aggregate, (ii) protect through nondisclosure agreements and

                                       11
<PAGE>   12
otherwise all trade secrets and confidential information of the Company, and
(iii) otherwise to secure and protect for Company's benefit all Intellectual
Property of the Company. The Company uses reasonable efforts, consistent with
industry practices of comparable companies, to identify any use of its
Intellectual Property by third parties that has infringed or infringes the
Intellectual Property of the Company, and the Schedule of Exceptions discloses
with respect to this Section 3.14 all material instances known to the Company of
any such infringing uses, all steps that the Company has taken or is taking to
end such infringement, and how any such instances of infringement have been
resolved.

                           (e) "Intellectual Property" means rights in (i) any
patent, copyright (including without limitation works of authorship in any media
including computer programs, software (including both source code and object
code form), databases and related items), trademark, service marks, trade dress,
trade name, licenses, franchises or domain name (regardless of whether such
rights have been registered), (ii) registrations and applications for
registration of any of the rights listed in clause (i) of this definition, (iii)
trade secrets, confidential information, know-how, goodwill and any other
intangible assets of the Company, and (iv) other similar intellectual property
rights of any kind, in each case which is material to the Company and its
subsidiaries taken as a whole.

                  3.15     Proprietary Information.

                           (a) To the best of the Company's knowledge, it has
done nothing to compromise the secrecy, confidentiality or value of any of its
trade secrets, know-how, inventions, prototypes, designs, processes or technical
data required to conduct its business as now conducted or as proposed to be
conducted. The Company has taken in the past and will take in the future
reasonable security measures to protect the secrecy, confidentiality and value
of all of its trade secrets, know-how, inventions, prototypes, designs,
processes, and technical data important to the conduct of its business.

                           (b) All employees and independent contractors of the
Company involved in the design, review, evaluation or development of products or
Intellectual Property have executed or are subject to nondisclosure and
assignment of inventions agreements sufficient to protect the confidentiality of
the Company's trade secrets and other confidential information and to vest in
the Company exclusive ownership of such Intellectual Property. The Company,
after reasonable investigation, is not aware that any of its employees, officers
or independent contractors is in violation thereof of any item that would have a
materially adverse effect on the Company, and the Company will use its best
efforts to prevent any such violation.

                  3.16     Year 2000.

                           (a) All software programs or applications (in both
source and object code form) currently being manufactured, published or marketed
by the Company or currently under development for possible future manufacturing,
publication, marketing or other use by the Company are "Year 2000 Compliant"
which shall mean that they (i) correctly accomplish date data century
recognition and calculations that accommodate same century and multi-century
formulas and date values, including leap years, and (ii) shall not end
abnormally or provide invalid or incorrect results

                                       12
<PAGE>   13
of date data, specifically including date data that represents or references
different centuries or more than one century; provided, however, that the
Company makes no representation regarding the functionality of its products when
combined with third-party software, hardware or peripheral items in the event
that such third-party software, hardware or peripheral items are not Year 2000
Compliant.

                           (b) For purposes of this Section, "Internal MIS
Systems" means any computer software and systems (including hardware, firmware,
operating system software, utilities, and applications software) used in the
ordinary course of business by or on behalf of the Company, including the
Company's payroll, accounting, billing/receivables, inventory, asset tracking,
customer service, human resources. and email systems. All the Internal MIS
Systems and, to the knowledge of the Company, its facilities are Year 2000
Compliant.

                  3.17     Taxes.

                           (a) Except as set forth on Schedule 3.17, The Company
and Old Review and its subsidiaries (which for purposes of this Section 3.17
includes any limited liability company interests) prepared and timely filed all
Returns required to be filed by it and has paid all Taxes required to be paid by
it (whether or not shown to be due on such Returns). All such Returns were
complete and correct in all material respects. All amounts required to be
collected or withheld by the Company and Old Review and its subsidiaries have
been collected or withheld and any such amounts that are required to be remitted
to any taxing authority have been duly remitted, and the Company and Old Review
have made complete and adequate reserves on the Financial Statements for the
payment of Taxes that are payable during the current fiscal period or
attributable to a Pre-Closing Tax Period for which Tax returns are not yet
required to be filed. The Company and Old Review have made complete and adequate
reserves for deferred tax liabilities in its Financial Statements. There are no
actions, audits, assessments, reassessments, suits, proceedings, investigations
or claims ongoing or pending, or to the knowledge of the Company threatened,
against the Company, Old Review or any of its subsidiaries in respect of Taxes
or any matters under discussion between the Company, Old Review or any of its
subsidiaries and any governmental authority relating to Taxes or governmental
charges asserted by any such authority. Neither the Company nor Old Review nor
any of its subsidiaries has any obligation to reimburse the former shareholders
of Old Review for Taxes imposed on them on account of Old Review taxable income
and gain for the year ended December 31, 1999 and prior years; the obligation of
Old Review to reimburse its former shareholders for Taxes imposed on account of
Old Review taxable income and gain for the first quarter of 2000 will not exceed
$200,000 (it being understood that the Company and Old Review shall not be
required to reimburse the former shareholders for Taxes imposed on them in
connection with the distribution of Student Advantage stock to them).

                           (b) The disclosure made on the Schedule of Exceptions
with respect to this Section 3.17 contains a list of states, territories and
jurisdictions (whether foreign or domestic) in which the Company, Old Review or
any of its subsidiaries currently files an income, franchise, sales or use
Return. No Tax authority in a jurisdiction where the Company, Old Review or any
of its subsidiaries does not file Tax Returns has made a claim, assertion or, to
the Company's or Old Review's knowledge, threat that the Company, Old Review or
any of its subsidiaries is or may be subject to Tax in such jurisdiction. No
waivers or extensions of statutes of limitations with respect

                                       13
<PAGE>   14
to Taxes have been given or requested with respect to the Company, Old Review or
any of its subsidiaries. There are no Tax rulings, requests for rulings, or
closing agreements involving the Company, Old Review or any of its subsidiaries
that could affect the liability for Taxes of the Company for any period (or
portion of a period) after the Closing Date. No excess loss account (as
described in Treas. Reg. 1.1502-19) exists with respect to any of the Company's
or Old Review subsidiaries. Neither the Company nor Old Review has any deferred
gain (i) arising from intercompany transactions (as described in Treas. Reg. 1.
1502-13) or (ii) with respect to stock or obligations of the Company or Old
Review which could affect the liability for Taxes of the Company for any period
(or portion of any period) after December 31, 1999. The Company, Old Review or
any of its subsidiaries has not agreed to, nor is required to, make any material
adjustment under Section 481 (a) of the Code by reason of a change in accounting
method or otherwise. There are no Tax liens on any assets of the Company, Old
Review or any of its subsidiaries, except for Taxes not yet due and payable. The
Company or Old Review has not been a member of a consolidated, combined or
unitary group for federal or state income tax purposes. The Company, Old Review
or any of its subsidiaries is not and has not been a party to any Tax sharing
agreement. The Company or Old Review has not filed a consent pursuant to Section
341(f) of the Internal Revenue Code of 1986, as amended (the "Code"), relating
to collapsible corporations. Complete copies of all income Tax Returns filed by
the Company, Old Review or any of its subsidiaries for taxable periods
commencing on or after January 1, 1995, have been provided to, or made available
to, the Purchasers.

                           (c) Old Review and any entities merged into Old
Review have made valid elections under Section 1362 of the Code to be treated as
S Corporations and have made similar elections under all state and local laws
that permit such elections and each of the entities merged into Old Review had
never terminated or revoked their S election prior to such merger and Old Review
has never terminated or revoked its election prior to April 1, 2000.

                           (d) As used in this Agreement:

                                    (i) The term "Tax" (including, with
         correlative meanings, the term "Taxes") includes all federal, state,
         local and foreign income, profits, franchise, gross receipts,
         environmental, customs duty, capital stock, communications, services,
         severance, stamp, payroll, sales, employment, unemployment, disability,
         use, property, withholding, excise, production, value added, occupancy
         and other taxes, duties or assessments of any nature whatsoever,
         together with all interest, penalties and additions imposed with
         respect to such amounts and any interest in respect to such penalties
         and additions, and includes any liability for Taxes of another person
         by contract, as a transferee or successor, under Treas. Reg. 1. 1502-6
         or analogous state, local. or foreign law provision, or otherwise.

                                    (ii) The term "Return" includes all returns
         and reports (including elections, declarations, disclosures, schedules,
         estimates and information returns) required to be supplied to a Tax
         authority relating to Taxes, including any schedule or attachment
         thereto, and including any amendment thereof.

                                    (iii) The term "Pre-Closing Tax Period"
         means all taxable periods (or portions thereof) ending on or before the
         Closing Date. For these purposes, any taxable year beginning before the
         Closing Date and ending after the Closing Date will be deemed

                                       14
<PAGE>   15
to end on the Closing Date by a closing of the Company's and Old Review's books
as of the Closing Date.

                  3.18 Insurance Coverage. The Schedule of Exceptions contains
an accurate summary of the insurance policies currently maintained by the
Company. Except as described on the Schedule of Exceptions, there are currently
no claims pending by the Company under any insurance policies currently in
effect and covering the property, business or employees of the Company, and all
premiums due and payable with respect to the policies maintained by the Company
have been paid to date. All insurance policies are in the name of the Company,
outstanding and in full force and effect and all premiums due with respect to
such policies are currently paid. Such insurance policies are customary for
companies engaged in the type of business engaged by the Company. The Company
has not received notice of cancellation or termination of any such policy, nor
has it been denied or had revoked or rescinded any policy of insurance, nor
borrowed against any such policies. Except as set forth with respect to this
Section 3.18 on the Schedule of Exceptions, to the knowledge of the Company,
there are no claims in the last five years for which an insurance carrier has
denied or threatened to deny coverage. The Company carries, or is covered by,
insurance with companies that are financially sound and reputable in such
amounts with such deductibles and against such risks and losses as are
reasonable for the business and assets of the Company.

                  3.19 Registration Rights. Except as provided in the Rights
Agreement or the Shareholder Agreement, the Company is not under any obligation
to register (as defined in the Rights Agreement) any of its presently
outstanding securities or any of its securities that may hereafter be issued.

                  3.20 Voting Agreements. Except as set forth in the Shareholder
Agreement, the Company has no agreement, obligation or commitment with respect
to the election of any individual or individuals to the Board of Directors and,
to the best of the Company's knowledge, there is no voting agreement or other
arrangement among its shareholders with respect to the election of any
individual or individuals to the Board of Directors or for any other purpose.

                  3.21 Consents. No consent, approval, order, license, permit or
authorization of, or notification, registration, declaration or filing with, any
governmental authority or any other person is required to be obtained or made by
or with respect to the Company or any of its affiliates in connection with the
execution, delivery and performance by the Company of any of the Agreements, the
issuance and sale of the Shares and the Underlying Common Stock, or the
consummation of the transactions contemplated thereby.

                  3.22 Offering. Assuming the accuracy of the representations
and warranties of the Purchasers contained in Section 4 hereof, the offer,
issuance and sale of the Shares are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws.

                  3.23     Environmental Matters.

                                       15
<PAGE>   16
                           (a) The Company has duly complied with, and, to the
best of the knowledge of the Company, all the real estate leased by it either
currently or in the past (hereinafter referred to collectively as the
"Premises") are in compliance in all material respects with, the provisions of
all federal, state and local environmental, health and safety laws, codes and
ordinances and all rules and regulations promulgated thereunder.

                           (b) The Company has been issued, and will maintain,
all federal, state and local permits, licenses, certificates and approvals known
to the Company to be required for the operation by the Company of its business
and the ownership of its assets relating to (i) air emissions, (ii) discharges
to surface water or ground water, (iii) noise emissions, (iv) solid or liquid
waste disposal, (v) the use, generation, storage, transportation or disposal of
toxic or hazardous substances or wastes (intended hereby and hereafter to
include any and all such materials listed in any federal, state or local law,
code or ordinance and all rules and regulations promulgated thereunder, as
hazardous or potentially hazardous), or (vi) other environmental, health and
safety matters.

                           (c) The Company has not received notice of any, nor
does the Company know of any facts that might constitute material violations of,
any federal, state or local environmental, health or safety laws, codes or
ordinances, and any rules or regulations promulgated thereunder, that relate to
the use, ownership or occupancy of any of the Premises, and the Company is not
in violation of any covenants, conditions, easements, rights-of-way or
restrictions affecting any of the Premises or any rights appurtenant thereto.

                           (d) Except in accordance with a valid governmental
permit, license, certificate or approval, or as permitted by law, the Company
has not caused any emission, spill, release or discharge into or upon (i) the
air, (ii) soils or any improvements located thereon, (iii) surface water or
ground water, or (iv) the sewer, septic system or waste treatment, storage or
disposal system servicing any of the Premises, of any toxic or hazardous
substances or wastes at or from any of the Premises that would have a Material
Adverse Effect.

                           (e) The Company has not received any complaint,
order, directive (other than directives applicable to the general public),
claim, citation or notice by any governmental authority or any other person or
entity with respect to (i) air emissions, (ii) spills, releases or discharges to
soils or any improvements located thereon, surface water, ground water or the
sewer, septic system or waste treatment, storage or disposal systems servicing
any of the Premises, (iii) noise emissions, (iv) solid or liquid waste disposal,
(v) the use, generation, storage, transportation or disposal of toxic or
hazardous substances or wastes or (vi) other environmental, health or safety
matters affecting the Company, any of the Premises or any improvements located
thereon, or the businesses thereon conducted that would have a Material Adverse
Effect.

                  3.24 Finders' Fees. Except for the fees paid to Galileo
Professional Services, LLC, in an amount not to exceed $900,000.00 (Nine Hundred
Thousand Dollars), in connection with the transactions contemplated by this
Agreement, the Company (i) represents and warrants that it has retained no
finder or broker in connection with the transactions contemplated by this
Agreement and will have no liability to any such person in connection with the
transactions contemplated hereby, and (ii) hereby agrees to indemnify and to
hold the Purchasers harmless of and from any

                                       16
<PAGE>   17
liability for any commission or compensation in the nature of a finder's fee to
any broker or other person or firm (and the costs and expenses of defending
against such liability or asserted liability) for which the Company or any of
its employees or representatives is responsible.

                  3.25 Compliance with Applicable Laws. The Company and its
properties, assets, operations and business has been and are in compliance in
all material respects with all applicable statutes, laws, ordinances, rules and
regulations of any governmental authority and any filing requirements relating
thereto. The Company has obtained and has in effect all material permits,
licenses and other authorizations that are required with respect to the
operation of its business and the ownership of its assets (excluding
Intellectual Property to the extent addressed in Section 3.14). The Company is
in full compliance in all material respects with all terms and conditions of
such permits, licenses and authorizations, no proceeding is pending or, to the
knowledge of the Company, threatened, to revoke or limit any thereof, and the
Company does not know of any basis for any such proceeding, and the consummation
of the transactions contemplated in this Agreement will not result in the
nonrenewal, revocation or termination of any such license or permit.

                  3.26 Disclosure. The statements by the Company contained in
this Agreement and the exhibits and schedules attached hereto and in all
certificates and schedules furnished or to be furnished by or on behalf of the
Company to the Purchasers or any of their representatives as a condition to the
Closing, taken as a whole, do not contain any untrue statement of a material
fact or omit to a state a material fact necessary, in light of the circumstances
under which they were or will be made, in order to make the statements contained
herein or therein not misleading or necessary in order to fully and fairly
provide the information required to be provided in any such document,
certificate or schedule.

                  3.27 Foreign Corrupt Practices Act. The Company and, to the
knowledge of the Company after due inquiry, its employees are in compliance in
all material respects with the U.S. Foreign Corrupt Practices Act, as amended,
including without limitation the books and records provisions thereof.

                  3.28 Investment Company. Neither the Company nor any person
controlling the Company is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

                  3.29 Small Business Matters. The Company, together with its
"affiliates" (as the term is defined in Title 13, Code of Federal Regulations,
121.103), have provided the SBIC Purchaser with financial statements sufficient
to enable the SBIC Purchaser to determine that the Company, together with its
affiliates, is a "small business concern" within the meaning of the Small
Business Investment Act of 1958, as amended ("SBIA"), and the regulations
thereunder, including Title 13, Code of Federal Regulations,  121.301(c). The
Company does not presently engage in, nor shall hereafter engage in, any
activities, nor shall the Company use the proceeds provided by the transaction
contemplated hereby directly or indirectly for any purpose, for which an SBIC is
prohibited from providing funds by 13 CFR  107.720.

                  3.30 Conversion of Phantom Stock Plan and Stock Appreciation
Rights Plan. The conversion of the Old Review Phantom Stock Plan and the Old
Review Stock Appreciation

                                       17
<PAGE>   18
Rights Plan (together, the "Plans") shall result in a compensation deduction to
the Company for Federal income tax purposes and, further, the Company's
withholding obligation for purposes of Federal income and other taxes otherwise
imposed upon amounts received by participants in the Plans pursuant to the
Conversion shall in no event exceed $5,000,000.

                  3.31 Obligations of Management. Each officer of the Company is
currently devoting his or her full business time to the conduct of the business
of the Company. The Company is not aware of an officer or key employee of the
Company planning to work less than full time at the Company in the future. No
officer or director of the Company is an officer, director or affiliate of any
entity that competes with the Company.

         40 Representations and Warranties of the Purchasers. Each Purchaser
hereby represents and warrants to the Company as to itself as follows.

                  4.1 Power and Authority. It has the requisite power and
authority to enter into this Agreement, to purchase the Shares subject to all of
the terms of the Articles hereunder, and to carry out and perform its
obligations under the terms of this Agreement.

                  4.2 Due Execution. This Agreement has been duly authorized,
executed and delivered by it, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding agreement of it.

                  4.3      Investment Representations.

                           (a) This Agreement is made with the Purchasers in
reliance upon each Purchaser's representation to the Company, which by its
acceptance hereof the Purchasers hereby confirm, that the Shares to be received
by each Purchaser will be acquired for investment for its own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and that each Purchaser has no present intention of selling, granting
participation in, or otherwise distributing the same.

                           (b) Each Purchaser represents that it is an
"accredited investor" as that term is defined in Section 501(a) of the Rules
promulgated under the 1933 Act, is experienced in evaluating companies such as
the Company, is able to fend for itself in the transactions contemplated by this
Agreement, has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its investment, and has
the ability to bear the economic risks of its investment. Each Purchaser further
represents that it has had access, during the course of the transactions and
prior to its purchase of Shares, to all such information as it deemed necessary
or appropriate (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) and that it has had, during
the course of the transactions and prior to its purchase of Shares, the
opportunity to ask questions of, and receive answers from, the Company
concerning the terms and conditions of the offering and to obtain additional
information (to the extent the Company possessed such information or could
acquire it without unreasonable effort or expense) necessary to verify the
accuracy of any information furnished to it or to which it had access.

                                       18
<PAGE>   19
                           (c) Each Purchaser understands that the Shares and
the Underlying Common Stock may not be sold, transferred or otherwise disposed
of without registration under the 1933 Act or an exemption therefrom, and that
in the absence of an effective registration statement covering the Shares (or
the Underlying Common Stock) or an available exemption from registration under
the 1933 Act, the Shares (and the Underlying Common Stock) must be held
indefinitely.

                           (d) Each Purchaser understands that each certificate
representing the Shares and the Underlying Common Stock will be endorsed with a
legend substantially as follows:

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
                  APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE
                  SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE
                  TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
                  SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
                  AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY
                  OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE
                  SECURITIES ACT OF 1933), AS AMENDED, AND APPLICABLE STATE
                  SECURITIES LAWS. COPIES OF THE STOCK PURCHASE AGREEMENT,
                  SHAREHOLDER AGREEMENT, INVESTOR RIGHTS AGREEMENT AND BYLAWS,
                  AS AMENDED, PROVIDING FOR RESTRICTIONS ON TRANSFER OF THESE
                  SECURITIES MAY BE OBTAINED UPON WRITTEN REQUEST BY THE HOLDER
                  OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
                  CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
                  CORPORATION.

                  4.4 No Public Market. Each Purchaser understands that no
public market now exists for any of the securities issued by the Company and
that there is no assurance that a public market will ever exist for the Shares
(or the Underlying Common Stock).

                  4.5 Government Consents. No consent, approval or authorization
of or designation, declaration or filing with any state, federal, or foreign
governmental authority on the part of the Purchasers because of any special
characteristic of such Purchasers is required in connection with the valid
execution and delivery of this Agreement or the Rights Agreement by the
Purchasers, and the consummation by the Purchasers of the transactions
contemplated hereby and thereby; provided, however, that the Purchasers make no
representations as to compliance with applicable state securities laws.

                  4.6 Finders' Fees. Each Purchaser (i) represents and warrants
that it has retained no finder or broker in connection with the transactions
contemplated by this Agreement, and (ii) hereby agrees to indemnify and to hold
the Company and the other Purchasers harmless of and from

                                       19
<PAGE>   20
any liability for any commission or compensation in the nature of a finder's fee
to any broker or other person or firm (and the costs and expenses of defending
against such liability or asserted liability) for which any such Purchaser or
any of its employees or representatives are responsible.

         5.0 Conditions to the Purchasers' Obligations. The obligations of each
Purchaser to purchase the Shares at the Closing Date are subject to the
fulfillment on or before the Closing Date of each of the following conditions.

                  5.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 3 shall be true on and as of the
Closing Date with the same force and effect as if they had been made on and as
of such date.

                  5.2 Performance. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by it on or before the Closing Date.

                  5.3 Qualifications; Consents. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state or other person that are required prior to and in
connection with the lawful issuance and sale of the Shares pursuant to this
Agreement, or the execution, delivery and compliance with the Agreements, shall
have been duly obtained and shall be effective on and as of the Closing Date.

                  5.4 Articles. The Company shall have duly filed with the
Secretary of State of the State of Delaware the Articles, which shall be in full
force and effect at the Closing Date and shall not have been further amended in
any respect.

                  5.5 Legal Investment. At the time of the Closing Date, the
purchase of the Shares by the Purchasers hereunder shall be legally permitted by
all laws and regulations to which they or the Company are subject.

                  5.6 Opinion of the Company's Counsel. The Purchasers shall
have received from counsel to the Company an opinion letter substantially in the
form attached hereto as Exhibit F, addressed to them, dated the date of the
Closing Date.

                  5.7 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing Date
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers and their
counsel, and the Purchasers and their counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.

                  5.8 Investor Rights Agreement. The Company shall have executed
and delivered a Rights Agreement substantially in the form attached hereto as
Exhibit D.

                  5.9 Shareholder Agreement. Certain founding shareholders,
senior management of the Company and the Purchasers shall have entered into a
Shareholder Agreement substantially in the form attached hereto as Exhibit E.

                                       20
<PAGE>   21
                  5.10 Compliance Certificate. There shall have been delivered
to the Purchasers a certificate, dated as of the Closing Date, signed by the
Company's President certifying that the conditions specified in Sections 5.1,
5.2, 5.3, 5.4, 5.9, 5.15, 5.16, 5.17, 5.18, 5.19 and 5.20 have been fulfilled.

                  5.11 Secretary's Certificate. There shall have been delivered
to the Purchasers a certificate, dated as of the Closing Date, signed by the
Company's Secretary or an Assistant Secretary and in form and substance
satisfactory to the Purchasers, that shall certify (i) the names of its officers
authorized to sign this Agreement, the certificates for purchased Shares and the
other documents, instruments or certificates to be delivered pursuant to this
Agreement by the Company or any of its officers, together with true signatures
of such officers; (ii) that the copy of the Articles attached thereto is true,
correct and complete; (iii) that the copy of the Bylaws attached thereto is
true, correct and complete; (iv) that the copy of Board of Directors'
resolutions attached thereto evidencing the approval of this Agreement, the
issuance of the purchased Shares and the other matters contemplated hereby was
duly adopted and is in full force and effect; and (v) that the copy of
shareholders' resolutions evidencing approval of the amendment and restatement
of the Articles were duly adopted and are in full force and effect.

                  5.12 Certificate of Good Standing. There shall have been
delivered to the Purchasers a Certificate of Good Standing for the Company from
the Secretary of State of the State of Delaware, dated within thirty (30) days
of the Closing Date.

                  5.13 Injunctions, etc. No injunction or order of any
governmental authority shall be in effect as of the Closing Date, and no
lawsuit, claim, proceeding or investigation shall be pending or threatened by or
before any governmental authority as of the Closing Date, that would restrain or
prohibit the issuance and sale of the Shares or the consummation of any of the
other transactions contemplated by the Agreements or invalidate or suspend any
provision of the Agreements or the Articles.

                  5.14 Employment Agreements. The Company shall have entered
into an employment agreement with Andrew Lutz, Bob Hoffman, Stephen Melvin, Mark
Chernis, Bruce Task, Steven Hodas, Linda Nessim, Evan Schnittman and Richard
Michalak.

                  5.15 Reorganization Complete. All of the transactions
contemplated by the Reorganization shall have been completed on terms reasonably
satisfactory to the Purchasers on or before the Closing Date.

                  5.16 Student Advantage. The Old Review shall have distributed,
as contemplated by the Reorganization, up to fifty percent (50%) of its direct
or indirect holdings in Student Advantage while it was treated as an S
Corporation under the Code.

                  5.17 Conversion of Phantom Stock Plan and Stock Appreciation
Rights Plan. On or before the Closing Date, the Company shall take all necessary
actions to terminate the Plans, in both instances in accordance with the terms
of the applicable Plan, and the Company and Old Review have and will have taken
all necessary actions to obtain from each participant in the Plans

                                       21
<PAGE>   22
a waiver of all existing rights held by them under such Plans, in exchange for
the conversion of such rights into the right to receive cash and/or shares of
common stock of the Company and the right to purchase additional shares of
common stock of the Company pursuant to the Company's Stock Incentive Plan.

                  5.18 Small Business Matters. The Purchasers shall have
received from the Company a SBIC Representation Letter substantially in the form
attached hereto as Exhibit G.

                  5.19 Right of First Offer Letter. The Company shall have
executed and delivered a side letter agreement among the Company, Random House
TPR, Inc., SG Capital Partners L.L.C. and Olympus, in substantially the form
attached hereto as Exhibit H.

                  5.20 Election of SG Capital Partners, L.L.C. Board Designee.
The Board designee of SG Capital Partners, L.L.C. shall be elected to the Board
of Directors of the Company on or before the Closing Date.

                  5.21 Expenses. The Company shall reimburse all reasonable
costs and out-of-pocket expenses of the Purchasers up to a maximum of $220,000,
as more fully provided in Section 8.12 herein, on or before the Closing Date.

         60 Conditions to the Company's Obligations. The obligations of the
Company to issue and sell the Shares at the Closing Date are subject to the
fulfillment on or before the Closing Date of each of the following conditions.

                  6.1 Representations and Warranties. The representations and
warranties made by the Purchasers in Section 4 shall be true on and as of the
Closing Date with the same force and effect as if they had been made on and as
of such date.

                  6.2 Performance. The Purchasers shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by them on or before the Closing Date.

                  6.3 Qualifications, Consents. All authorizations, approvals or
permits, if any, to be obtained from any governmental authority or regulatory
body of the United States or of any state or other person that are required
prior to and in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement, or the execution, delivery and compliance with the
Agreements, shall have been duly obtained and shall be effective on and as of
the Closing Date.

                  6.4 Legal Investment. At the time of the Closing Date, the
purchase of the Shares by the Purchasers hereunder shall be legally permitted by
all laws and regulations to which they or the Company are subject.

                  6.5 Certificate. The Secretary of State of the State of
Delaware shall have accepted the Articles for filing, and they shall be in full
force and effect at the Closing Date.

                                       22
<PAGE>   23
                  6.6 Investor Rights Agreement. The Purchasers shall execute
and deliver a Rights Agreement in substantially the form attached hereto as
Exhibit D.

7.0      Survival; Indemnification.

                  7.1 Survival. The representations and warranties contained in
Section 3 hereof shall survive the Closing Date and shall continue in full force
and effect for a period of two (2) years from the date of this Agreement, except
that the representations and warranties contained in Section 3.17 shall survive
until thirty (30) days after the end of the applicable statute of limitations
(taking into account any extensions or waivers thereof) and the representations
and warranties contained in Section 3.5 shall survive indefinitely. At the end
of such survival periods the indemnification obligations of the Company in
Section 7.2 with respect thereto shall expire, except to the extent notice of a
claim pursuant to Section 7.2 has been provided prior to such expiration. Any
claims with respect to the foregoing sentence pursuant to this Section 7 must be
asserted in writing with reasonable particularity by the party making such
claims.

                  7.2      Indemnification by the Company.

                           (a) The Company will defend and indemnify each of the
Purchasers and their officers, directors, managers, members, partners,
stockholders, attorneys, representatives, agents, and employees (each, an
"Indemnified Party") against, and hold each Indemnified Party harmless from, all
losses (including any diminution in value of the Shares of Underlying Common
Stock or other securities of the Company hereafter acquired by the Purchasers
under this Agreement or the Agreements), demands, actions, causes of action,
assessments, damages, liabilities, costs or expenses, including without
limitation, interest, penalties, fines, fees, deficiencies, claims of damage,
reasonable attorneys' and other professional fees and expenses incurred in the
investigation, prosecution, defense or settlement thereof (collectively, the
"Losses") arising out of or based on any breach of any warranty, representation
or covenant set forth in this Agreement or the Agreements, other than any Losses
resulting from any breach of any warranty or representation of the Purchasers
set forth in Section 4 above or any action on the part of such Indemnified Party
that is finally determined in such proceeding to be primarily and directly a
result of such party's gross negligence or willful misconduct. Notwithstanding
the foregoing, no Losses hereunder shall be entitled to indemnification
hereunder unless the total of all such Losses exceed $270,000 (the "Basket"), in
which case all such Losses up to $27,000,000, including the first $270,000,
shall be entitled to indemnification hereunder, provided that any Losses with
respect to breaches of Section 3.2 and 3.17 shall not be subject to such Basket,
in which case all such Losses up to $27,000,000, shall be entitled to
indemnification hereunder. The Purchasers agree to reimburse the Company for any
payments made by the Company to the Purchasers pursuant to this paragraph for
Losses that are finally determined in such proceeding to result primarily and
directly from the breach of any warranty of representation of the Purchasers set
forth in Section 4 above or the gross negligence or willful misconduct of the
Purchasers.

                           (b) In the event the Company pays an amount exceeding
$2,000,000 to Adam Robinson in settlement of his claims or by judgment against
the Company, the Company shall issue to the Purchasers, at no cost to the
Purchasers, an additional amount of fully paid and

                                       23

<PAGE>   24
nonassessable shares of Series A Preferred Stock sufficient to provide the
Purchasers the number of Shares they would have received at the Closing Date had
the $150,000,000 pre-investment valuation of the Company been reduced
dollar-for-dollar by the amount of such payment in excess of $2,000,000. For
purposes of determining the amount of any payment to Adam Robinson the following
shall be excluded: (i) the amount of any royalty obligation acknowledged by the
Company as of the Closing Date and (ii) any warrant granted with a strike price
per share equal to or greater than the fair market value per share of the Common
Stock underlying the warrant at the time of grant. The fair market value per
share of the Common Stock underlying the warrant shall be determined by mutual
agreement of the Company and seventy-five percent (75%) of holders of the Series
A Shares. In the event the Company and such percentage of holders of the Series
A Shares fail to agree to a fair market value, the fair market value per share
of the Common Stock underlying the warrant shall be determined as follows:

                                    (i) if the Common Stock is not then traded
         on a national securities exchange, the average of the closing prices
         quoted on the National Association of Securities Dealers, Inc.
         Automated Quotation National Market System, if applicable, or the
         average of the last bid and asked prices of the Common Stock quoted in
         the over-the-counter-market for the twenty (20) trading days (or such
         other reasonable number of days consistent with the methodology agreed
         to in the warrant) immediately preceding the time of grant or, if such
         date is not a business day on which shares are traded, the next
         immediately preceding trading day; or

                                    (ii) if the Common Stock is then traded on a
         national securities exchange, the average of the high and low prices of
         the Common Stock listed on the principal national securities exchange
         on which the Common Stock is so traded for the twenty (20) trading days
         (or such other reasonable number of days consistent with the
         methodology agreed to in the warrant) immediately preceding the time of
         grant or, if such date is not a business day on which shares are
         traded, the next immediately preceding trading day; or

                                    (iii) if the Common Stock is not then
         publicly traded, as evidenced by a written opinion from an independent
         investment banking firm of nationally recognized standing mutually
         agreeable to the Company and seventy-five percent (75%) of holders of
         the Series A Shares..

                           (c) Nothing contained in this Section 7 shall limit
in any manner any remedy at law or in equity to which an Indemnified Party shall
be entitled against the Company as a result of fraud or intentional
misrepresentation by the Company or any of its representatives or agents. In
addition to all other indemnities in this Agreement, in the event of any breach
of the representation and warranty set forth in the last sentence of Section 3.2
herein, the Company shall issue to the Purchasers, at no cost to the Purchasers,
an additional amount of fully paid and nonassessable shares of Series A
Preferred Stock such that, if such issuance were made at the Closing Date, such
representation and warranty would be true and accurate in all respects when
made.

                                       24
<PAGE>   25
                           (d) Any indemnification payment made by the Company
to a Purchaser pursuant to this Section 7.2, including the issuance of any
additional Shares, shall be treated for federal, state, local and foreign tax
purposes as an adjustment to the price paid by such Purchaser for the Shares.

                  If an indemnification payment is not treated as an adjustment
to the purchase price of the Shares, the Company agrees to increase the
indemnification payment to account for any Tax Cost (including the Tax Cost
related to such increase) realized by the ultimate corporate or individual owner
of the Purchasers (looking through all non-taxable entities for federal income
tax purposes, including partnerships and LLCs). "Tax Cost" to a Purchaser is the
amount by which the tax liability of Purchaser (or affiliated group in which a
Purchaser is a member) is increased (including any decrease in an amount
refunded).

                  7.3 Notification by Indemnified Party. In the event of a claim
by a third party for which a party hereto is entitled to indemnification, the
Indemnified Party shall give written notice to the Company promptly after such
Indemnified Party has knowledge of any claim, action, proceeding or
investigation as to which indemnity may be sought. The Company shall be entitled
to assume the defense of any such claim, action, proceeding or investigation,
including the employment of counsel and the payment of all fees and expenses.
The Indemnified Party shall have the right to employ separate counsel in
connection with any such claim, action, proceeding or investigation and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by the Indemnified Party. However, if the Company declines or
fails to assume the defense of any such claim, action, proceeding or
investigation and the Indemnified Party then employs counsel to assume defense
thereof, the Company shall pay all reasonable fees and expenses of such counsel
employed by the Indemnified Party. The Company shall be liable only for
settlement of any claim against an Indemnified Party made with the Company's
written consent, not to be unreasonably withheld.

         8.0      Miscellaneous.

                  8.1 Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
third party any rights, remedies, obligations or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.

                  8.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York.

                  8.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                       25
<PAGE>   26
                  8.4 Jurisdiction. Each party hereto hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of the state and federal
courts located in the State of New York for any actions, suits, or proceedings
arising out of or relating to this agreement and the transactions contemplated
hereby. Each party hereto agrees not to commence any action, suit or proceeding
relating thereto except in such courts. Each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this agreement or the transactions
contemplated hereby, in such state or federal courts as aforesaid and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.

                  8.5 Waiver of Jury Trial. The parties hereby waive trial by
jury in any judicial proceeding to which they are parties involving, directly or
indirectly, any matter in any way arising out of, related to or connected with
this Agreement.

                  8.6 Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.

                  8.7 Notices. Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given upon
personal delivery or upon deposit with the United States Post Office, by
registered or certified mail. postage prepaid, or sent by confirmed telecopy,
addressed (a) if to the Company, at:

         The Princeton Review, Inc.
         2315 Broadway
         New York, NY 10024
         Attention: President

         With a copy to:

         Patterson, Belknap, Webb & Tyler LLP
         1133 Avenue of the Americas
         New York, NY 10036
         Attention: John P. Schmitt

or at such other address as the Company shall have furnished to the Purchaser in
writing, and (b) if to a Purchaser, at such Purchaser's address as is set forth
on Exhibit A, or at such other address as such Purchaser shall have furnished to
the Company in writing.

                  8.8 Severability. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, it shall to the extent practicable,
be modified so as to make it valid, legal and enforceable and to retain as
nearly as practicable the intent of the parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

                  8.9 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Company or any Purchaser or any
subsequent holder of any Shares upon any

                                       26
<PAGE>   27
breach, default or noncompliance of any Purchaser, any subsequent holder of any
Shares or the Company under this Agreement or under the Articles, shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
the part of the Company or the Purchasers of any breach, default or
noncompliance under this Agreement or under the Articles or any waiver on the
Company's or the Purchasers' part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing and that all remedies, either under this
Agreement or the Articles, by law, or otherwise afforded to the Company and the
Purchasers, shall be cumulative and not alternative.

                  8.10     Information Confidential.

                           (a) Each Purchaser acknowledges that this Agreement
and all attachments hereto are confidential and for such Purchaser's use only,
and it will refrain from using such information or reproducing, disclosing or
disseminating such information to any other person (other than its employees,
affiliates, agents or partners having a need to know the contents of such
information and its attorneys), except in connection with the enforcement of
rights under this Agreement, unless the Company has made such information
available to the public generally or it is required by a governmental body to
disclose such information.

                           (b) The Company shall not issue any press release or
make any disclosure or public announcement relating primarily to the subject
matter of this Agreement or any other Investment Agreement without the prior
written approval of the Purchasers.

                  8.11 Amendments and Waivers. Except as otherwise expressly
provided herein, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely) with the written consent of the Company and the
Purchasers (or their transferees) holding at least a seventy-five percent (75%)
of the outstanding Shares, voting together as a single group (treated as if
converted at the conversion rate then in effect and including, for such
purposes, shares of Underlying Common Stock into which any Shares shall have
been converted); provided, however, that no such amendment or waiver shall
reduce the aforesaid percentage of Shares and Underlying Common Stock, the
holders of which are required to consent to any waiver or supplemental
agreement, without the consent of the holders of all of such Shares and
Underlying Common Stock. Any amendment or waiver effected in accordance with
this Section 8.11 shall be binding upon each Purchaser and each transferee of
the Shares and Underlying Common Stock. Upon the effectuation of each such
amendment or waiver, the Company shall promptly give written notice thereof to
the Purchasers (or their transferees) who have not previously consented thereto
in writing.

                  8.12     Expenses and Certain Taxes.

                           (a) The Company agrees to reimburse all reasonable
costs and out-of-pocket expenses of the Purchasers, such costs to include due
diligence investigation, travel and

                                       27
<PAGE>   28
attorneys' fees and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and other related documentation up to a
maximum of $220,000.

                           (b) The Company shall pay and indemnify and hold
harmless the Purchasers from and against any sales, transfer, documentary, stamp
or other similar Taxes incurred in connection with the transactions contemplated
by this Agreement.

                                       28
<PAGE>   29
         IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties as of the date first above written.

THE COMPANY:                            THE PRINCETON REVIEW, INC.

                                        By: /s/ John Katzman
                                            Name:  John S. Katzman
                                            Title:  President and Chief
                                            Executive Officer
<PAGE>   30
PURCHASERS:                             SGC PARTNERS II, LLC
                                        By: SG MERCHANT BANKING FUND L.P.,
                                            its managing member

                                        By: SG CAPITAL PARTNERS L.L.C.,
                                            its general partner

                                            By: /s/ Frank Pottow
                                                 Name:  Frank Pottow
                                                 Title: Managing Director
<PAGE>   31
PURCHASERS:                             OLYMPUS GROWTH FUND III, L.P.
                                        By:  OGP III, LLC, its general partner

                                             By: /s/ Louis J. Mischianti
                                                Name: Louis J. Mischianti
                                                Title: Member

                                             OLYMPUS EXECUTIVE FUND, L.P.
                                        By:  OEF, L.P., its general partner
                                        By:  LJM, L.L.C., a general partner

                                             By: By: /s/ Louis J. Mischianti
                                                  Name: Louis J. Mischianti
                                                  Title: Member
<PAGE>   32
PURCHASERS:

                                        ________________________________________
                                        (Printed or Typed Name)

                                        By:_____________________________________
                                        Name: __________________________________
                                        Title: _________________________________
<PAGE>   33
                                    EXHIBIT A

                                   PURCHASERS

<TABLE>
<CAPTION>
                                                  NUMBER OF SERIES A       PRICE
       NAME                    ADDRESS                  SHARES           PER SHARE   TOTAL COMMITMENT
       ----                    -------           ------------------       -----      ----------------
<S>                  <C>                         <C>                     <C>         <C>
SG CAPITAL           1221 AVENUE OF THE AMERICAS      2,475,693           7.2707      $18,000,021.10
PARTNERS L.L.C.      NEW YORK, NY 10020

OLYMPUS GROWTH       METRO CENTER                     1,225,469           7.2707      $8,910,017.46
FUND III, L.P.       ONE STATION PLACE
                     STAMFORD, CT 06902

OLYMPUS EXECUTIVE    METRO CENTER                        12,378           7.2707      $89,996.72
FUND, L.P.           ONE STATION PLACE
                     STAMFORD, CT 06902
</TABLE>

                                      A-1
<PAGE>   34
                                                                            Page
<TABLE>
<CAPTION>
EXHIBITS:
<S>     <C>                                   <C>
A        PURCHASERS
B        RESTATED ARTICLES OF INCORPORATION
C        SCHEDULE OF EXCEPTIONS
                  Schedule 3.2                Capitalization
                  Schedule 3.3                Subsidiaries
                  Schedule 3.6(b)             Financial Statements, Changes
                  Schedule 3.7                Material Agreements
                  Schedule 3.8                Title to Properties and Assets
                  Schedule 3.9                Undisclosed Liabilities
                  Schedule 3.10               Obligations to Related Parties
                  Schedule 3.11               Employee Matters, ERISA
                  Schedule 3.13               Litigation
                  Schedule 3.14               Intellectual Property
                  Schedule 3.17               Taxes
                  Schedule 3.18               Insurance Coverage
                  Schedule 3.19               Registration Rights
D        INVESTOR RIGHTS AGREEMENT
E        SHAREHOLDER AGREEMENT
F        FORM OF OPINION OF COUNSEL FOR THE COMPANY
G        FORM OF SBIC REPRESENTATION LETTER
H        FORM OF RIGHT OF FIRST OFFER LETTER
</TABLE>

                                      A-ii

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