SUBORDINATED PROMISSORY NOTE
New York, New York
$1,475,000 June 18, 2001
FOR VALUE RECEIVED, Princeton Review Operations, L.L.C., a Delaware limited liability company (the
"Maker"), with principal offices at 2315 Broadway, New York, New York 10024, promises to pay to the order
of T.S.T.S., Inc., a Texas corporation ("Lender"), with principal offices at 701 North Post Oak Road, Suite 8,
Houston, Texas 77024, the principal sum of One Million Four Hundred Seventy-Five Thousand Dollars
($1,475,000), with interest on the unpaid principal balance from time to time outstanding accruing at the rate of
eight and one-quarter percent (8.25%) per annum until maturity and payable as set forth herein. Upon the
occurrence of a Payment Default (as defined herein), this Note shall bear interest at the rate of twelve percent
(12%) per annum (the "Default Rate"). Notwithstanding any other provision hereof, Lender does not intend to
charge and Maker shall not be required to pay any interest or other fees or charges in excess of the maximum
permitted by applicable law; any payments in excess of such maximum shall be refunded to Maker or credited to
reduce principal hereunder.
This Note is made pursuant to that certain Asset Purchase Agreement dated as of June 15, 2001 (the "Purchase
Agreement"), by and among the Maker, the Lender and certain other parties. Capitalized terms used but not
otherwise defined in this Note shall have the same meaning as in the Asset Purchase Agreement.
(a) Payment Schedule. The principal sum of this Note and interest due thereon shall be paid as follows:
(i) Interest accrued on the principal balance outstanding shall be due and payable on the first Business Day (as
defined herein) of each calendar quarter.
(ii) The principal sum of this Note shall be paid in ten (10) equal, quarterly installments, each in the sum of
$147,500, which shall be due and payable on the first Business Day of each calendar quarter, commencing on
January 1, 2004 and ending o