Document:

<PAGE>   1
                                                                        Ex 10.56
                             SUBORDINATION AGREEMENT

                  SUBORDINATION AGREEMENT dated as of December 14, 2000,
between:

                  (i) each of the parties identified under the caption
"SUBORDINATED CREDITORS" on the signature pages hereto (individually, a
"Subordinated Creditor" and, collectively, the "Subordinated Creditors");

                  (ii) THE PRINCETON REVIEW, INC., a corporation duly organized
and validly existing under the laws of the State of Delaware (the "Borrower");
each of the Subsidiaries of the Borrower identified under the caption
"SUBSIDIARY GUARANTORS" on the signature pages hereto (individually, a
"Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors" and,
together with the Borrower, the "Obligors"); and

                  (iii) EXCEL BANK, N.A. ("Excel").

                  The Borrower and Excel are parties to a letter agreement dated
as of September 20, 2000 (the "Commitment Letter"), providing, subject to the
terms and conditions thereof and of the other Senior Debt Documents (as
hereinafter defined), for loans to be made by Excel to the Borrower in an
aggregate principal amount not exceeding $4,500,000.

                  The Obligors, certain lenders (together with their respective
successors and assigns, the "Lenders") and Reservoir Capital Partners, L.P., as
administrative agent (in such capacity, together with its successors in such
capacity, the "Administrative Agent") are parties to a Loan Agreement dated as
of December 14, 2000 (as modified and supplemented and in effect from time to
time, the "Loan Agreement"), providing, subject to the terms and conditions
thereof, for loans to be made by said lenders to the Borrower in an aggregate
principal amount not exceeding $25,000,000.

                  It is a condition in the Commitment Letter that the
Subordinated Creditors agree to subordinate the Subordinated Debt (as
hereinafter defined) to the Senior Debt (as hereinafter defined), all in the
manner and to the extent hereinafter provided. Accordingly, the parties hereto
agree as follows:

                  Section 1.  Definitions.  As used herein:

                  "Collateral" has the meaning assigned to such term in the
Senior Debt Documents.

                            SUBORDINATION AGREEMENT

<PAGE>   2
                                      -2-
                  "Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
governmental authority or other entity.

                  "Promissory Note" means the Promissory Note, dated October 27,
2000, made by the Borrower to Excel in the amount of $4,500,000.

                  "Reorganization Debt Securities" means, with respect to each
Obligor, debt or equity securities of such Obligor as reorganized or readjusted,
or debt or equity securities of such Obligor (or any other company, trust or
organization provided for by a plan of reorganization or readjustment succeeding
to the assets and liabilities of such Obligor), that are subordinated, to at
least the same extent as the Subordinated Debt, to the payment of all Senior
Debt that will be outstanding after giving effect to such plan of reorganization
or readjustment.

                  "Senior Debt" means the principal of, and interest on, the
Promissory Note, and any other amounts owing under the Senior Debt Documents,
including, without limitation, any amounts owing in respect of a breach of the
representations, warranties or covenants thereunder by any Obligor. The term
"Senior Debt" shall include any interest accruing for a period of up to twelve
months (but not longer) after the date of any filing by any Obligor of any
petition in bankruptcy or the commencing of any bankruptcy, insolvency or
similar proceedings with respect to such Obligor, whether or not such interest
is allowable as a claim in any such proceeding. Notwithstanding the foregoing,
"Senior Debt" shall not include any obligations or other indebtedness of any
Obligor that by its terms is expressly stated not to be superior in right of
payment to the Subordinated Debt.

                  "Senior Debt Documents" means all agreements and undertakings
made by the Obligors in connection with the indebtedness evidenced by the
Promissory Note, including without limitation the Commitment Letter.

                  "Significant Event of Default" means any "Event of Default"
under Section 5(a), 5(b) or 5(d) of the Promissory Note, provided, that in the
event any of such provisions of the Promissory Note shall be modified or
supplemented after the date hereof in a manner that makes such provisions
materially more restrictive (from the standpoint of the Obligors), then a breach
of such provision shall not be deemed a "Significant Event of Default" hereunder
unless such breach would have resulted in an "Event of Default" under such
provision as initially in effect.

                  "Subordinated Debt" means, collectively, (a) in the case of
the Borrower, the principal and interest on the loans made by the Lenders to the
Borrower and all other amounts from time to time owing to the Lenders or the
Administrative Agent by the Borrower under the Loan Agreement and the other
Subordinated Debt Documents, (b) in the case of the Subsidiary Guarantors, all
obligations of the Subsidiary Guarantors under the Loan Agreement and the other

                            SUBORDINATION AGREEMENT

<PAGE>   3
                                      -3-
Subordinated Debt Documents (including, without limitation, in respect of their
guarantee under Article III of the Loan Agreement), and (c) all obligations of
the Obligors to the Lenders and the Administrative Agent hereunder.

                  "Subordinated Debt Documents" means all agreements and
undertakings made by the Obligors in connection with the Loan Agreement.

                  Section 2.  Subordination.

                  2.01 Subordination of Subordinated Debt. Each Obligor, for
itself and its successors and assigns, covenants and agrees, and each
Subordinated Creditor, on its own behalf and on behalf of each subsequent holder
of Subordinated Debt, likewise covenants and agrees, that, to the extent and in
the manner set forth in this Agreement, the Subordinated Debt, and the payment
from whatever source of the principal of, and interest on, the Subordinated
Debt, are hereby expressly made subordinate and subject in right of payment to
the prior payment in full in cash of all Senior Debt.

                  2.02 Payment of Proceeds Upon Dissolution. In the event of (a)
any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to any Obligor or to its creditors, as such, or to its
assets, or (b) any liquidation, dissolution or other winding up of any Obligor,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of any Obligor, then and in any such
event:

                  (1) the holders of Senior Debt shall be entitled to receive
         payment in full in cash of all amounts due or to become due on or in
         respect of all Senior Debt, or provision shall be made for such
         payment, before any Subordinated Creditor shall be entitled to receive
         any payment on account of principal of, or interest on, the
         Subordinated Debt;

                  (2) any payment or distribution of assets of such Obligor of
         any kind or character, whether in cash, property or securities, by
         set-off or otherwise, to which any Subordinated Creditor would be
         entitled but for the provisions of this Agreement, including any such
         payment or distribution that may be payable or deliverable by reason of
         the payment of any other indebtedness of such Obligor being
         subordinated to the payment of the Subordinated Debt (other than
         Reorganization Debt Securities), shall be paid by the liquidating
         trustee or agent or other Person making such payment or distribution,
         whether a trustee in bankruptcy, a receiver or liquidating trustee or
         otherwise, directly to the holders of Senior Debt or their
         representative or representatives

                             SUBORDINATION AGREEMENT
<PAGE>   4
                                      -4-

         or to the trustee or trustees under any indenture under which any
         instruments evidencing any of such Senior Debt may have been issued,
         ratably according to the aggregate amounts remaining unpaid on account
         of the principal of, and interest on, the Senior Debt held or
         represented by the holders of Senior Debt, to the extent necessary to
         make payment in full in cash of all Senior Debt remaining unpaid, after
         giving effect to any concurrent payment or distribution to holders of
         such Senior Debt; and

                  (3) in the event that, notwithstanding the foregoing
         provisions of this Section 2.02, any Subordinated Creditor shall have
         received, before all Senior Debt is paid in full in cash or payment
         thereof provided for, any such payment or distribution of assets of
         such Obligor of any kind or character, whether in cash, property or
         securities (other than Reorganization Debt Securities), including any
         such payment or distribution arising out of the exercise by any
         Subordinated Creditor of a right of set-off or counterclaim and any
         such payment or distribution received by reason of any other
         indebtedness of such Obligor being subordinated to the Subordinated
         Debt, then, and in such event, such payment or distribution shall be
         held in trust for the benefit of, and shall be immediately paid over or
         delivered to, the holders of Senior Debt or their representative or
         representatives or to the trustee or trustees under any indenture under
         which any instruments evidencing any of such Senior Debt may have been
         issued, ratably according to the aggregate amounts remaining unpaid on
         account of the principal of, and interest on, the Senior Debt held or
         represented by each holder of Senior Debt, to the extent necessary to
         make payment in full in cash of all Senior Debt remaining unpaid, after
         giving effect to any concurrent payment or distribution to the holders
         of such Senior Debt.

                  The consolidation of any Obligor with, or the merger of any
Obligor into, another corporation (or other entity) or the liquidation or
dissolution of such Obligor following the conveyance or transfer of its
properties and assets substantially as an entirety to another corporation (or
other entity) shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of such Obligor for purposes of this Agreement.

                  2.03 No Payment of Subordinated Debt. In the event that (a)
any payment with respect to any principal of or interest on any Senior Debt is
not made when due, whether at stated maturity, by mandatory prepayment, by
acceleration, or otherwise (each, such failure a "Senior Debt Payment Default")
or (b) unless the foregoing clause (a) shall apply, any Significant Event of
Default with respect to any Senior Debt shall have occurred and be continuing
permitting the holders of such Senior Debt to declare such Senior Debt due and
payable prior to the date on which it would otherwise have become due and
payable, then no payment on account of the principal of, or interest on, the
Subordinated Debt (and no payment on account of the purchase or

                             SUBORDINATION AGREEMENT

<PAGE>   5
                                      -5-

redemption or other acquisition of the Subordinated Debt) shall be made by or on
behalf of any Obligor, and no action will be taken by any Subordinated Creditor
in respect of the Collateral other than the initiation of judicial proceedings
against any Obligor

                  (x) in case of a Senior Debt Payment Default described in
         clause (a) of this Section 2.03, unless and until such payment shall
         have been made or the holders of such Senior Debt have waived the
         benefits of this Section 2.03 in respect of such Senior Debt Payment
         Default or

                  (y) in case of any Significant Event of Default specified in
         clause (b) of this Section 2.03, for the period (the "Blockage Period")
         from the date the Obligors or the Subordinated Creditors receive
         written notice of such Significant Event of Default from the holders of
         a majority in interest of the Senior Debt (a "Blocking Notice") until
         the earlier of (1) the date 85 days after such date and (2) the date,
         if any, on which the Senior Debt to which such default relates is
         discharged or such default is waived by the holders of such Senior Debt
         or otherwise cured,

provided, that, (i) for purposes of clause (x) of this Section 2.03, to the
extent that such Senior Debt Payment Default shall continue for more than 30
days, the respective Senior Debt shall have been accelerated and the holders of
such Senior Debt shall be actively and diligently pursuing remedies to obtain
payment of such Senior Debt and (ii) for purposes of clause (y) of this Section
2.03, (A) only one Blocking Notice relating to the same or any other Significant
Event of Default may be given during any one twelve-month period, (B) not more
than two Blocking Notices shall be effective while any Subordinated Debt is
outstanding, and (C) a further Blocking Notice relating to the same or any other
Significant Event of Default that existed at the time such Blockage Period
commenced shall not be effective unless such Significant Event of Default shall
in the interim have been cured for a period of at least 90 consecutive days.

                  Immediately upon the expiration of any period under this
Section 2.03 during which no payment may be made on account of the Subordinated
Debt, the Obligors may resume making any and all payments of principal of, and
interest on, the Subordinated Debt (including any payment of principal or
interest missed during such period).

                  In the event that, notwithstanding the foregoing provisions of
this Section 2.03, any Subordinated Creditor shall have received any payment
prohibited by the foregoing provisions of this Section 2.03, including, without
limitation, any such payment arising out of the exercise by any Subordinated
Creditor of a right of set-off or counterclaim and any such payment received by
reason of other indebtedness of such Obligor being subordinated to the
Subordinated Debt, then, and in any such event, such payment shall be held in
trust for the benefit of, and shall

                             SUBORDINATION AGREEMENT

<PAGE>   6
                                      -6-

be immediately paid over or delivered to, the holders of Senior Debt or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Debt may
have been issued, ratably according to the aggregate amounts remaining unpaid on
account of the principal of, and interest on, the Senior Debt held or
represented by each holder of Senior Debt, for application to such Senior Debt
remaining unpaid, whether or not then due and payable.

                  The provisions of this Section 2.03 shall not alter the rights
of the holders of Senior Debt under the provisions of Section 2.02.

                  2.04 Payment Permitted if No Default. Nothing contained in
this Agreement or in any of the Subordinated Debt Documents shall affect the
obligation of any Obligor to make (or prevent any Obligor from making) regularly
scheduled payments of principal of, or interest on, the Subordinated Debt or any
other amount payable by such Obligor under the Subordinated Debt Documents
except during the pendency of any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshalling
of assets and liabilities of such Obligor referred to in Section 2.02, or under
the conditions described in Section 2.03.

                  2.05 Subrogation. Subject to the payment in full in cash of
all Senior Debt, the Subordinated Creditors shall be subrogated to the rights of
the holders of Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of,
and interest on, the Subordinated Debt shall be paid in full in cash. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Debt of any cash, property or securities to which any Subordinated
Creditor would be entitled except for the provisions of this Section 2, and no
payments over pursuant to the provisions of this Section 2 to the holders of
Senior Debt by any Subordinated Creditor, shall, as between an Obligor, its
creditors other than the holders of Senior Debt, and the Subordinated Creditors,
be deemed to be a payment or distribution by such Obligor to or on account of
the Senior Debt. Following the exercise of remedies under the Senior Debt
Documents, the holders of the Senior Debt shall pay over to the Subordinated
Creditors the proceeds of the Collateral to the extent that the same exceed the
Senior Debt then outstanding for application in accordance with the Subordinated
Debt Documents. The holders of the Senior Debt acknowledge that they are holding
any possessory Collateral for the account of the Subordinated Creditors.

                  2.06 Provisions Solely to Define Relative Rights. The
provisions of this Section 2 are and are intended solely for the purpose of
defining the relative rights of the Subordinated Creditors on the one hand and
the holders of Senior Debt on the other hand.

                             SUBORDINATION AGREEMENT

<PAGE>   7
                                      -7-

Nothing contained in this Section 2 or elsewhere in this Agreement or in the
Subordinated Debt Documents is intended to or shall:

                  (a) impair, as among any Obligor, its creditors other than the
         holders of Senior Debt and the Subordinated Creditors, the obligation
         of such Obligor, which is absolute and unconditional, to pay to the
         Subordinated Creditors the principal of, and interest on, the
         Subordinated Debt as and when the same shall become due and payable in
         accordance with its terms;

                  (b) affect the relative rights against such Obligor of the
         Subordinated Creditors and creditors of such Obligor other than the
         holders of Senior Debt;

                  (c) vitiate the occurrence of an "event of default" under any
         Subordinated Debt Document to the extent that any failure to make a
         payment of principal of, or interest on, any Subordinated Debt by
         reason of the conditions specified in Section 2.02 or 2.03 would
         otherwise constitute such an event of default; or

                  (d) prevent any Subordinated Creditor from exercising all
         remedies otherwise permitted by applicable law upon default under this
         Agreement or the Subordinated Debt Documents, subject to the rights, if
         any, under this Section 2 of the holders of Senior Debt (i) in any
         case, proceeding, dissolution, liquidation or other winding up,
         assignment for the benefit of creditors or other marshalling of assets
         and liabilities of such Obligor referred to in Section 2.02, to
         receive, pursuant to and in accordance with Section 2.02, cash,
         property and securities otherwise payable or deliverable to the
         Subordinated Creditors, or (ii) under the conditions specified in
         Section 2.03, to prevent any payment prohibited by Section 2.03.

                  2.07 No Waiver of Subordination Provisions. No right of
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any Obligor or by any act or failure to act, in
good faith, by such holder, or by any non-compliance by any Obligor with the
terms, provisions and covenants of this Agreement, regardless of any knowledge
thereof such holder may have or be otherwise charged with.

                  2.08 Notice to Subordinated Creditors. Each Obligor shall give
prompt written notice to each Subordinated Creditor of any fact known to such
Obligor that would prohibit the making of any payment to it in respect of the
Subordinated Debt. Notwithstanding the provisions of this Section 2 or any other
provision of this Agreement, no Subordinated Creditor shall be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment to it in respect of the Subordinated Debt, unless and until such
Subordinated

                             SUBORDINATION AGREEMENT

<PAGE>   8
                                      -8-

Creditor shall have received written notice thereof from such Obligor or a
holder of Senior Debt or from any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, each Subordinated Creditor
shall be entitled in all respects to assume that no such facts exist.

                  Each Subordinated Creditor shall be entitled to rely on the
delivery to it of a written notice by a Person representing itself to be a
holder of Senior Debt (or a trustee, fiduciary or agent therefor) to establish
that such notice has been given by a holder of Senior Debt (or a trustee,
fiduciary or agent therefor). In the event that such Subordinated Creditor
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Section 2, such Subordinated Creditor may request
such Person to furnish evidence to the reasonable satisfaction of such
Subordinated Creditor as to the amount of Senior Debt held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Section 2 and if such evidence is not furnished, such Subordinated Creditor
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.

                  2.09 Reliance on Judicial Order or Certificate of Liquidation
Agent. Upon any payment or distribution of assets of any Obligor referred to in
this Section 2, the Subordinated Creditors shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Subordinated Creditors, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other indebtedness of such Obligor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section 2.

                  Section 3. Miscellaneous.

                  3.01 No Waiver. No failure on the part of any holder of Senior
Debt to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by any holder of Senior Debt
of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.

                            SUBORDINATION AGREEMENT

<PAGE>   9
                                      -9-

                  3.02 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

                  3.03 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified beneath its) name on the
signature pages hereto or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.

                  3.04 Waivers, Etc. The terms of this Agreement may be waived,
altered or amended as to a Subordinated Creditor only by an instrument in
writing duly executed by such Subordinated Creditor and by holders of a majority
in principal amount at the time of the Senior Debt. Any such amendment or waiver
shall be binding upon each holder of Senior Debt and each Subordinated Creditor.

                  3.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
Subordinated Creditor and each holder of Senior Debt.

                  3.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.

                  3.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.

                            [Signature pages follow.]

                             SUBORDINATION AGREEMENT

<PAGE>   10
                                      -10-

                  IN WITNESS WHEREOF, the parties hereto have caused this
Subordination Agreement to be duly executed and delivered as of the day and year
first above written.

                               SUBORDINATED CREDITORS

                               RESERVOIR CAPITAL PARTNERS, L.P.,
                                   individually and as Administrative Agent

                               By:    Reservoir Capital Group, L.L.C.,
                                      General Partner

                                      By /s/ Craig Huff
                                         ______________________________
                                      Name: Craig Huff
                                      Title: Managing Director

                               Address for Notices:

                               650 Madison Avenue
                               New York, NY 10022
                               Attention: Craig Huff
                               Telecopier No.: 212-610-9020

                               RESERVOIR CAPITAL ASSOCIATES L.P.

                               By:    Reservoir Capital Group, L.L.C.,
                                      General Partner

                                      By /s/ Craig Huff
                                         ______________________________
                                      Name: Craig Huff
                                      Title: Managing Director

                               Address for Notices:
                               [same as for the Administrative Agent]

                            SUBORDINATION AGREEMENT
<PAGE>   11
                                      -11-

                               RESERVOIR CAPITAL MASTER FUND, L.P.

                               By:    Reservoir Capital Group, L.L.C.,
                                      General Partner

                                      By /s/ Craig Huff
                                        ______________________________
                                      Name: Craig Huff
                                      Title: Managing Director

                                Address for Notices:
                                [same as for the Administrative Agent]

                               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/ V. Frank Pottow
                                               ______________________________
                                             Name: V. Frank Pottow
                                             Title: Managing Director

                               Address for Notices:

                               Attention:
                               Telecopier No.:

                            SUBORDINATION AGREEMENT

<PAGE>   12
                                      -12-

                               OLYMPUS GROWTH FUND III, L.P.

                               By:    OGP III, LLC, its general partner

                                      By /s/ Louis Mischianti
                                        ______________________________
                                      Name: Louis Mischianti
                                      Title: Member

                               Address for Notices:

                               Attention:
                               Telecopier No.:

                               OLYMPUS EXECUTIVE FUND, L.P.

                               By:    OEF, L.P., its general partner

                                      By:    LJM, L.L.C., a general partner

                                      By /s/ Louis Mischianti
                                        ______________________________
                                      Name: Louis Mischianti
                                      Title: Member

                               Address for Notices:

                               Attention:
                               Telecopier No.:

                            SUBORDINATION AGREEMENT

<PAGE>   13
                                      -13-

                                      BORROWER

                                      THE PRINCETON REVIEW, INC.

                                      By /s/ John Katzman
                                        ______________________________
                                      Name: John Katzman
                                      Title: Chief Executive Officer

                                      Address for Notices:

                                      2315 Broadway
                                      New York, NY 10024
                                      Attention: John S. Katzman
                                      Telecopier No.:

                                      With a copy to:

                                      Patterson, Belknap, Webb & Tyler LLP
                                      1133 Avenue of the Americas
                                      New York, NY 10036
                                      Attention: John P. Schmitt, Esq.
                                      Telecopy No. 212-336-2222

                            SUBORDINATION AGREEMENT
<PAGE>   14
                                      -14-

                                      SUBSIDIARY GUARANTORS

                                      PRINCETON REVIEW MANAGEMENT, LLC

                                      By /s/ John Katzman
                                        ______________________________
                                      Name:  John Katzman
                                      Title: Chief Executive Officer

                                      Address for Notices:
                                      [same as for the Borrower]

                                      PRINCETON REVIEW PRODUCTS, LLC

                                      By /s/ John Katzman
                                        ______________________________
                                      Name:  John Katzman
                                      Title: Chief Executive Officer

                                      Address for Notices:
                                      [same as for the Borrower]

                                      PRINCETON REVIEW OPERATIONS, LLC

                                      By /s/ John Katzman
                                        ______________________________
                                      Name:  John Katzman
                                      Title: Chief Executive Officer

                                      Address for Notices:
                                      [same as for the Borrower]

                            SUBORDINATION AGREEMENT
<PAGE>   15
                                      -15-

                                      PRINCETON REVIEW PUBLISHING, LLC

                                      By /s/ John Katzman
                                        ______________________________
                                      Name:  John Katzman
                                      Title: Chief Executive Officer

                                      Address for Notices:
                                      [same as for the Borrower]

                            SUBORDINATION AGREEMENT

<PAGE>   16
                                      -16-

                                       SENIOR CREDITOR

                                       EXCEL BANK, N.A.

                                      By /s/ Thomas I. Apperson
                                         ------------------------------
                                      Name: Thomas I. Apperson
                                      Title:

                                      Address for Notices:

                                      Attention:
                                     Telecopier No.:

                            SUBORDINATION AGREEMENT<PAGE>   1
                                  TRAFFIX, INC.
                               ONE BLUE HILL PLAZA
                           PEARL RIVER, NEW YORK 10956
                                 ---------------
                                 (845) 620-1212

                                December 22, 2000

Mr. Jay Greenwald

-----------------
-----------------

Dear Jay:

       This will confirm that you have resigned as an officer of, and terminated
your employment with, Traffix, Inc. ("Traffix") and each other affiliate of
Traffix for which you serve as an officer and/or employee, which resignation and
termination shall become effective immediately.

       We have agreed that you will receive a severance payment of $115,384.62,
with such payment to be reduced by applicable payroll taxes, deductions and
withholdings. You acknowledge that such payment constitutes the full and
complete payment to you of any and all obligations of Traffix due you as of the
date hereof.

       This letter will also confirm that you agree to perform consulting
services on behalf of Traffix and Group Lotto for no less than six (6) days per
month, pursuant to which you will be paid $10,000 per month, all as to be more
specifically set forth in a final written Consulting Agreement to be negotiated
between you and Traffix subsequent to the date hereof. The term of such
Consulting Agreement will run through November 30, 2001.

       If the foregoing meets with your approval, please acknowledge your
acceptance by signing and dating in the spaces below provided.

                                               Very truly yours,

                                               /s/ Jeffrey L. Schwartz
                                               Chairman and CEO

Accepted and agreed to this
22nd day of December, 2000

/s/ Jay Greenwald

                                       6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]