Exhibit 10.2

 

Committed Line Of Credit Note

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$6,000,000

 

October 1, 2008

 

FOR VALUE RECEIVED, NEW HORIZONS WORLDWIDE, INC. (the “Borrower”), with an
address at 1 West Elm Street, Suite 125, Conshohocken, PA,  19428, promises to
pay to the order of PNC BANK, NATIONAL ASSOCIATION (the “Bank”), in lawful money
of the United States of America in immediately available funds at its offices
located at 1600 Market Street, 22nd Floor, Philadelphia, PA 19103, or at such
other location as the Bank may designate from time to time, the principal sum of
SIX MILLION DOLLARS ($6,000,000) (the “Facility”) or such lesser amount as may
be advanced to or for the benefit of the Borrower hereunder, together with
interest accruing on the outstanding principal balance from the date hereof, all
as provided below.

 

1.             ADVANCES.  THE BORROWER MAY REQUEST ADVANCES, REPAY AND REQUEST
ADDITIONAL ADVANCES HEREUNDER UNTIL THE EXPIRATION DATE, SUBJECT TO THE TERMS
AND CONDITIONS OF THIS NOTE AND THE LOAN DOCUMENTS (AS HEREINAFTER DEFINED). 
THE “EXPIRATION DATE” SHALL MEAN SEPTEMBER 30, 2011, OR SUCH LATER DATE AS MAY
BE DESIGNATED BY THE BANK BY WRITTEN NOTICE FROM THE BANK TO THE BORROWER.  THE
BORROWER ACKNOWLEDGES AND AGREES THAT IN NO EVENT WILL THE BANK BE UNDER ANY
OBLIGATION TO EXTEND OR RENEW THE FACILITY OR THIS NOTE BEYOND THE EXPIRATION
DATE.  THE BORROWER MAY REQUEST ADVANCES HEREUNDER UPON GIVING ORAL OR WRITTEN
NOTICE TO THE BANK BY 1:00 P.M. (PHILADELPHIA, PENNSYLVANIA TIME) (A) ON THE DAY
OF THE PROPOSED ADVANCE, IN THE CASE OF ADVANCES TO BEAR INTEREST UNDER THE BASE
RATE OPTION (AS HEREINAFTER DEFINED) AND (B) THREE (3) BUSINESS DAYS PRIOR TO
THE PROPOSED ADVANCE, IN THE CASE OF ADVANCES TO BEAR INTEREST UNDER THE LIBOR
OPTION (AS HEREINAFTER DEFINED), FOLLOWED PROMPTLY THEREAFTER BY THE BORROWER’S
WRITTEN CONFIRMATION TO THE BANK OF ANY ORAL NOTICE.  THE AGGREGATE UNPAID
PRINCIPAL AMOUNT OF ADVANCES UNDER THIS NOTE SHALL NOT EXCEED THE FACE AMOUNT OF
THIS NOTE.

 

2.             RATE OF INTEREST.  EACH ADVANCE OUTSTANDING UNDER THIS NOTE WILL
BEAR INTEREST AT A RATE OR RATES PER ANNUM AS MAY BE SELECTED BY THE BORROWER
FROM THE INTEREST RATE OPTIONS SET FORTH BELOW (EACH, AN “OPTION”):

 

(I)            BASE RATE OPTION.  A RATE OF INTEREST PER ANNUM WHICH IS AT ALL
TIMES EQUAL TO THE PRIME RATE (“BASE RATE”).  FOR PURPOSES HEREOF, THE TERM
“PRIME RATE” SHALL MEAN THE RATE PUBLICLY ANNOUNCED BY THE BANK FROM TIME TO
TIME AS ITS PRIME RATE.  THE PRIME RATE IS DETERMINED FROM TIME TO TIME BY THE
BANK AS A MEANS OF PRICING SOME LOANS TO ITS BORROWERS.  THE PRIME RATE IS NOT
TIED TO ANY EXTERNAL RATE OF INTEREST OR INDEX, AND DOES NOT NECESSARILY REFLECT
THE LOWEST RATE OF INTEREST ACTUALLY CHARGED BY THE BANK TO ANY PARTICULAR CLASS
OR CATEGORY OF CUSTOMERS.  IF AND WHEN THE PRIME RATE CHANGES, THE RATE OF
INTEREST WITH RESPECT TO ANY ADVANCE TO WHICH THE BASE RATE OPTION APPLIES WILL
CHANGE AUTOMATICALLY WITHOUT NOTICE TO THE BORROWER, EFFECTIVE ON THE DATE OF
ANY SUCH CHANGE.  THERE ARE NO REQUIRED MINIMUM INTEREST PERIODS FOR ADVANCES
BEARING INTEREST UNDER THE BASE RATE OPTION.

 

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(II)           LIBOR OPTION.  A RATE PER ANNUM EQUAL TO (A) LIBOR PLUS (B) TWO
AND ONE-QUARTER PERCENT (2.25%), FOR THE APPLICABLE LIBOR INTEREST PERIOD.

 

For purposes hereof, the following terms shall have the following meanings:

 

“Business Day” shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in Philadelphia, Pennsylvania.

 

“LIBOR” shall mean, with respect to any advance to which the LIBOR Option
applies for the applicable LIBOR Interest Period, the interest rate per annum
determined by the Bank by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/16th of 1%) (i) the rate of interest determined by
the Bank in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the eurodollar rate two (2) Business
Days prior to the first day of such LIBOR Interest Period for an amount
comparable to such advance and having a borrowing date and a maturity comparable
to such LIBOR Interest Period by (ii) a number equal to 1.00 minus the LIBOR
Reserve Percentage.

 

“LIBOR Interest Period” shall mean, as to any advance to which the LIBOR Option
applies, the period of one (1), two (2), three (3) or six (6) months as selected
by the Borrower in its notice of borrowing or notice of conversion, as the case
may be, commencing on the date of disbursement of an advance (or the date of
conversion of an advance to the LIBOR Option, as the case may be) and each
successive period selected by the Borrower thereafter; provided that, (i) if a
LIBOR Interest Period would end on a day which is not a Business Day, it shall
end on the next succeeding Business Day unless such day falls in the next
succeeding calendar month in which case the LIBOR Interest Period shall end on
the next preceding Business Day, (ii) the Borrower may not select a LIBOR
Interest Period that would end on a day after the Expiration Date, and (iii) any
LIBOR Interest Period that begins on the last Business Day of a calendar month
(or a day for which there is no numerically corresponding day in the last
calendar month of such LIBOR Interest Period) shall end on the last Business Day
of the last calendar month of such LIBOR Interest Period.

 

“LIBOR Reserve Percentage” shall mean the maximum effective percentage in effect
on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including,
without limitation, supplemental, marginal and emergency reserve requirements)
with respect to eurocurrency funding (currently referred to as “Eurocurrency
liabilities”).

 

LIBOR shall be adjusted with respect to any advance to which the LIBOR Option
applies on and as of the effective date of any change in the LIBOR Reserve
Percentage.  The Bank shall give prompt notice to the Borrower of LIBOR as
determined or adjusted in accordance herewith, which determination shall be
conclusive absent manifest error.

 

If the Bank reasonably determines (which determination shall be final and
conclusive) that, by reason of circumstances affecting the eurodollar market
generally, deposits in dollars (in the

 

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applicable amounts) are not being offered to banks in the eurodollar market for
the selected term, or adequate means do not exist for ascertaining LIBOR, then
the Bank shall give notice thereof to the Borrower.  Thereafter, until the Bank
notifies the Borrower that the circumstances giving rise to such suspension no
longer exist, (a) the availability of the LIBOR Option shall be suspended, and
(b) the interest rate for all advances then bearing interest under the LIBOR
Option shall be converted at the expiration of the then current LIBOR Interest
Period(s) to the Base Rate.

 

In addition, if, after the date of this Note, the Bank shall reasonably
determine (which determination shall be final and conclusive) that any
enactment, promulgation or adoption of or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by a governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Bank
with any guideline, request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency shall make it
unlawful or impossible for the Bank to make or maintain or fund loans based on
LIBOR, the Bank shall notify the Borrower.  Upon receipt of such notice, until
the Bank notifies the Borrower that the circumstances giving rise to such
determination no longer apply, (a) the availability of the LIBOR Option shall be
suspended, and (b) the interest rate on all advances then bearing interest under
the LIBOR Option shall be converted to the Base Rate either (i) on the last day
of the then current LIBOR Interest Period(s) if the Bank may lawfully continue
to maintain advances based on LIBOR to such day, or (ii) immediately if the Bank
may not lawfully continue to maintain advances based on LIBOR.

 

The foregoing notwithstanding, it is understood that the Borrower may select
different Options to apply simultaneously to different portions of the advances
and may select up to three (3) different interest periods to apply
simultaneously to different portions of the advances bearing interest under the
LIBOR Option.  Interest hereunder will be calculated based on the actual number
of days that principal is outstanding over a year of 360 days. In no event will
the rate of interest hereunder exceed the maximum rate allowed by law. 
Notwithstanding the foregoing, no LIBOR Option or LIBOR Interest Period may be
selected after the occurrence and during the continuation of an Event of Default
(as hereinafter defined).

 

3.             INTEREST RATE ELECTION.  SUBJECT TO THE TERMS AND CONDITIONS OF
THIS NOTE, AT THE END OF EACH INTEREST PERIOD APPLICABLE TO ANY ADVANCE, THE
BORROWER MAY RENEW THE OPTION APPLICABLE TO SUCH ADVANCE OR CONVERT SUCH ADVANCE
TO A DIFFERENT OPTION; PROVIDED THAT, DURING ANY PERIOD IN WHICH ANY EVENT OF
DEFAULT (AS HEREINAFTER DEFINED) HAS OCCURRED AND IS CONTINUING, ANY ADVANCES
BEARING INTEREST UNDER THE LIBOR OPTION SHALL, AT THE BANK’S SOLE DISCRETION, BE
CONVERTED AT THE END OF THE APPLICABLE LIBOR INTEREST PERIOD TO THE BASE RATE
AND THE LIBOR OPTION WILL NOT BE AVAILABLE TO BORROWER WITH RESPECT TO ANY NEW
ADVANCES (OR WITH RESPECT TO THE CONVERSION OR RENEWAL OF ANY EXISTING ADVANCES)
UNTIL SUCH EVENT OF DEFAULT HAS BEEN CURED BY THE BORROWER OR WAIVED BY THE
BANK.  THE BORROWER SHALL NOTIFY THE BANK OF EACH ELECTION OF AN OPTION, EACH
CONVERSION FROM ONE OPTION TO ANOTHER, THE AMOUNT OF THE ADVANCES THEN
OUTSTANDING TO BE ALLOCATED TO EACH OPTION AND, WHERE RELEVANT, THE INTEREST
PERIODS THEREFOR.  IN THE CASE OF CONVERTING TO THE LIBOR OPTION, SUCH NOTICE
SHALL BE GIVEN AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE COMMENCEMENT OF ANY
LIBOR INTEREST PERIOD.  IF NO INTEREST PERIOD IS SPECIFIED IN ANY SUCH NOTICE
FOR WHICH THE RESULTING ADVANCE IS TO BEAR INTEREST UNDER THE LIBOR OPTION, THE
BORROWER SHALL BE DEEMED TO HAVE SELECTED A LIBOR INTEREST PERIOD OF ONE MONTH’S
DURATION.  IF

 

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NO NOTICE OF ELECTION, CONVERSION OR RENEWAL IS TIMELY RECEIVED BY THE BANK WITH
RESPECT TO ANY ADVANCE, THE BORROWER SHALL BE DEEMED TO HAVE SELECTED THE BASE
RATE OPTION.  ANY SUCH ELECTION SHALL BE PROMPTLY CONFIRMED IN WRITING BY SUCH
METHOD AS THE BANK MAY REQUIRE.

 

4.             ADVANCE PROCEDURES.  A REQUEST FOR ADVANCE MADE BY TELEPHONE MUST
BE PROMPTLY CONFIRMED IN WRITING BY SUCH METHOD AS THE BANK MAY REQUIRE.  THE
BORROWER AUTHORIZES THE BANK TO ACCEPT TELEPHONIC REQUESTS FOR ADVANCES, AND THE
BANK SHALL BE ENTITLED TO RELY UPON THE AUTHORITY OF ANY AUTHORIZED OFFICER (AS
DEFINED IN THE LOAN AGREEMENT) PROVIDING SUCH INSTRUCTIONS.  THE BORROWER HEREBY
INDEMNIFIES AND HOLDS THE BANK HARMLESS FROM AND AGAINST ANY AND ALL DAMAGES,
LOSSES, LIABILITIES AND REASONABLE OUT-OF-POCKET COSTS AND EXPENSES (INCLUDING
FEES AND EXPENSES) WHICH MAY ARISE OR BE CREATED BY THE ACCEPTANCE OF SUCH
TELEPHONE REQUESTS OR MAKING SUCH ADVANCES; PROVIDED, HOWEVER, THAT THE
FOREGOING INDEMNITY SHALL NOT APPLY TO ANY CLAIMS, DAMAGES, LOSSES, LIABILITIES
OR EXPENSES TO THE EXTENT ATTRIBUTABLE TO BANK’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.  THE BANK WILL ENTER ON ITS BOOKS AND RECORDS, WHICH ENTRY WHEN MADE
WILL BE PRESUMED CORRECT, THE DATE AND AMOUNT OF EACH ADVANCE, THE INTEREST RATE
AND INTEREST PERIOD APPLICABLE THERETO, AS WELL AS THE DATE AND AMOUNT OF EACH
PAYMENT.

 

5.             PAYMENT TERMS.  THE BORROWER SHALL PAY ACCRUED INTEREST ON THE
UNPAID PRINCIPAL BALANCE OF THIS NOTE IN ARREARS:  (A) FOR THE PORTION OF
ADVANCES BEARING INTEREST UNDER THE BASE RATE OPTION, ON THE LAST DAY OF EACH
MONTH DURING THE TERM HEREOF, COMMENCING ON OCTOBER 31, 2008, (B) FOR THE
PORTION OF ADVANCES BEARING INTEREST UNDER THE LIBOR OPTION, ON THE LAST DAY OF
THE RESPECTIVE LIBOR INTEREST PERIOD FOR SUCH ADVANCE, (C) IF ANY LIBOR INTEREST
PERIOD IS LONGER THAN THREE (3) MONTHS, THEN ALSO ON THE THREE (3) MONTH
ANNIVERSARY OF SUCH INTEREST PERIOD AND EVERY THREE (3) MONTHS THEREAFTER, AND
(D) FOR ALL ADVANCES, AT MATURITY, WHETHER BY ACCELERATION OF THIS NOTE OR
OTHERWISE, AND AFTER MATURITY, ON DEMAND UNTIL PAID IN FULL.  ALL OUTSTANDING
PRINCIPAL AND ACCRUED INTEREST HEREUNDER SHALL BE DUE AND PAYABLE IN FULL ON THE
EXPIRATION DATE.

 

If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the Commonwealth of Pennsylvania (the “Commonwealth”),
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in computing interest in connection with
such payment.  The Borrower hereby authorizes the Bank to charge the Borrower’s
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and reasonable out-of-pocket expenses
(including attorneys’ fees), accrued interest and principal in any order the
Bank may choose, in its sole discretion.

 

6.             LATE PAYMENTS; DEFAULT RATE.  IF THE BORROWER FAILS TO MAKE ANY
PAYMENT OF PRINCIPAL, INTEREST OR OTHER AMOUNT COMING DUE PURSUANT TO THE
PROVISIONS OF THIS NOTE WITHIN FIFTEEN (15) CALENDAR DAYS OF THE DATE DUE AND
PAYABLE, THE BORROWER ALSO SHALL PAY TO THE BANK A LATE CHARGE EQUAL TO THE
LESSER OF FIVE PERCENT (5%) OF THE AMOUNT OF SUCH PAYMENT OR $100.00 (THE “LATE
CHARGE”).  SUCH FIFTEEN (15) DAY PERIOD SHALL NOT BE CONSTRUED IN ANY WAY TO
EXTEND THE DUE DATE OF ANY SUCH PAYMENT.  UPON MATURITY, WHETHER BY
ACCELERATION, DEMAND OR OTHERWISE, AND FOLLOWING WRITTEN NOTICE PROVIDED TO THE
BORROWER, AT THE BANK’S OPTION UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT (AS
HEREINAFTER DEFINED) AND DURING THE CONTINUANCE THEREOF, EACH ADVANCE
OUTSTANDING UNDER THIS NOTE SHALL BEAR INTEREST AT A RATE PER ANNUM (BASED ON
THE ACTUAL NUMBER OF DAYS THAT PRINCIPAL IS OUTSTANDING OVER A YEAR OF 360 DAYS)
WHICH SHALL BE THREE PERCENTAGE POINTS (3%)

 

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IN EXCESS OF THE INTEREST RATE IN EFFECT FROM TIME TO TIME UNDER THIS NOTE BUT
NOT MORE THAN THE MAXIMUM RATE ALLOWED BY LAW (THE “DEFAULT RATE”).  THE DEFAULT
RATE SHALL CONTINUE TO APPLY WHETHER OR NOT JUDGMENT SHALL BE ENTERED ON THIS
NOTE.  BOTH THE LATE CHARGE AND THE DEFAULT RATE ARE IMPOSED AS LIQUIDATED
DAMAGES FOR THE PURPOSES OF DEFRAYING THE BANK’S EXPENSES INCIDENT TO THE
HANDLING OF DELINQUENT PAYMENTS, BUT ARE IN ADDITION TO, AND NOT IN LIEU OF, THE
BANK’S EXERCISE OF ANY RIGHTS AND REMEDIES HEREUNDER, UNDER THE OTHER LOAN
DOCUMENTS OR UNDER APPLICABLE LAW, AND ANY FEES AND EXPENSES OF ANY AGENTS OR
ATTORNEYS WHICH THE BANK MAY EMPLOY.  IN ADDITION, THE DEFAULT RATE REFLECTS THE
INCREASED CREDIT RISK TO THE BANK OF CARRYING A LOAN THAT IS IN DEFAULT.  THE
BORROWER AGREES THAT THE LATE CHARGE AND DEFAULT RATE ARE REASONABLE FORECASTS
OF JUST COMPENSATION FOR ANTICIPATED AND ACTUAL HARM INCURRED BY THE BANK, AND
THAT THE ACTUAL HARM INCURRED BY THE BANK CANNOT BE ESTIMATED WITH CERTAINTY AND
WITHOUT DIFFICULTY.

 

7.             PREPAYMENT.  THE BORROWER SHALL HAVE THE RIGHT TO PREPAY ANY
ADVANCE HEREUNDER AT ANY TIME AND FROM TIME TO TIME, IN WHOLE OR IN PART;
SUBJECT, HOWEVER, TO PAYMENT OF ANY BREAK FUNDING INDEMNIFICATION AMOUNTS OWING
PURSUANT TO PARAGRAPH 8 BELOW.

 

8.             YIELD PROTECTION; BREAK FUNDING INDEMNIFICATION.  WITHOUT
DUPLICATING THE BORROWER’S OBLIGATIONS UNDER THE LOAN AGREEMENT, WITHIN TEN
(10) DAYS FOLLOWING RECEIPT BY THE BORROWER OF WRITTEN DEMAND FROM THE BANK,
TOGETHER WITH COMPUTATIONS (IN REASONABLE DETAIL) THEREFOR, THE BORROWER SHALL
PAY TO THE BANK AN AMOUNT SUFFICIENT TO FAIRLY COMPENSATE THE BANK FOR ANY
UNFORESEEN INCREASE IN ITS COSTS TO PROVIDE THE LOAN OR DECREASE IN ITS RETURN
ON THE LOAN, WHICH INCREASE OR DECREASE, AS THE CASE MAY BE, IS DIRECTLY
ATTRIBUTABLE TO, SUBSEQUENT TO THE DATE HEREOF, A CHANGE IN LAW OR REGULATION,
OR THE OFFICIAL INTERPRETATION AND ENFORCEMENT THEREOF, IMPOSING ANY RESERVE,
DEPOSIT, ALLOCATION OF CAPITAL, OR SIMILAR REQUIREMENT (INCLUDING WITHOUT
LIMITATION, ANY SUCH SUBSEQUENT CHANGE TO REGULATION D OF THE BOARD OF GOVERNORS
OF THE FEDERAL RESERVE SYSTEM) ON THE BANK, ITS HOLDING COMPANY OR ANY OF THEIR
RESPECTIVE ASSETS.  IN ADDITION, THE BORROWER AGREES TO INDEMNIFY THE BANK
AGAINST ANY LIABILITIES, LOSSES OR EXPENSES (INCLUDING, WITHOUT LIMITATION, LOSS
OF MARGIN, ANY LOSS OR EXPENSE SUSTAINED OR INCURRED IN LIQUIDATING OR EMPLOYING
DEPOSITS FROM THIRD PARTIES, AND ANY LOSS OR EXPENSE INCURRED IN CONNECTION WITH
FUNDS ACQUIRED TO EFFECT, FUND OR MAINTAIN ANY ADVANCE (OR ANY PART THEREOF)
BEARING INTEREST UNDER THE LIBOR OPTION WHICH THE BANK SUSTAINS OR INCURS AS A
CONSEQUENCE OF EITHER (I) THE BORROWER’S FAILURE TO MAKE A PAYMENT ON THE DUE
DATE THEREOF, (II) THE BORROWER’S REVOCATION (EXPRESSLY, BY LATER INCONSISTENT
NOTICES OR OTHERWISE) IN WHOLE OR IN PART OF ANY NOTICE GIVEN TO BANK TO
REQUEST, CONVERT, RENEW OR PREPAY ANY ADVANCE BEARING INTEREST UNDER THE LIBOR
OPTION, OR (III) THE BORROWER’S PAYMENT OR PREPAYMENT (WHETHER VOLUNTARY, AFTER
ACCELERATION OF THE MATURITY OF THIS NOTE OR OTHERWISE) OR CONVERSION OF ANY
ADVANCE BEARING INTEREST UNDER THE LIBOR OPTION ON A DAY OTHER THAN THE LAST DAY
OF THE APPLICABLE LIBOR INTEREST PERIOD.  A NOTICE AS TO ANY AMOUNTS PAYABLE
PURSUANT TO THIS PARAGRAPH GIVEN TO THE BORROWER BY THE BANK SHALL, IN THE
ABSENCE OF MANIFEST ERROR, BE CONCLUSIVE AND SHALL BE PAYABLE UPON DEMAND. THE
BORROWER’S INDEMNIFICATION OBLIGATIONS HEREUNDER SHALL SURVIVE THE PAYMENT IN
FULL OF THE ADVANCES AND ALL OTHER AMOUNTS PAYABLE HEREUNDER.

 

9.             OTHER LOAN DOCUMENTS.  THIS NOTE IS ISSUED IN CONNECTION WITH A
LOAN AGREEMENT DATED AS OF OCTOBER 1, 2008 BETWEEN THE BORROWER AND THE BANK
(THE “LOAN AGREEMENT”), THE SECURITY AGREEMENT DATED AS OF OCTOBER 1, 2008 MADE
BY BORROWER IN FAVOR OF BANK, AND THE OTHER AGREEMENTS AND DOCUMENTS EXECUTED
AND/OR DELIVERED IN CONNECTION THEREWITH OR REFERRED TO

 

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THEREIN, THE TERMS OF WHICH ARE INCORPORATED HEREIN BY REFERENCE (AS AMENDED,
MODIFIED OR RENEWED FROM TIME TO TIME, COLLECTIVELY THE “LOAN DOCUMENTS”), AND
IS SECURED BY THE PROPERTY (IF ANY) DESCRIBED IN THE LOAN DOCUMENTS AND BY SUCH
OTHER COLLATERAL AS PREVIOUSLY MAY HAVE BEEN OR MAY IN THE FUTURE BE GRANTED TO
THE BANK TO SECURE THIS NOTE.

 

10.          EVENTS OF DEFAULT.  THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS
WILL BE DEEMED TO BE AN “EVENT OF DEFAULT” UNDER THIS NOTE:  (I) THE NONPAYMENT
OF ANY PRINCIPAL WHEN DUE OR THE NONPAYMENT OF ANY INTEREST OR OTHER
INDEBTEDNESS UNDER THIS NOTE WITHIN FIVE (5) DAYS AFTER THE DATE WHEN DUE;
(II) THE OCCURRENCE OF ANY EVENT OF DEFAULT OR ANY DEFAULT AND THE LAPSE OF ANY
NOTICE OR CURE PERIOD, OR ANY OBLIGOR’S FAILURE TO OBSERVE OR PERFORM (AFTER
GIVING EFFECT TO ANY NOTICE OR CURE PERIOD) ANY COVENANT OR OTHER AGREEMENT,
UNDER OR CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT NOW OR IN THE
FUTURE EVIDENCING OR SECURING ANY DEBT, LIABILITY OR OBLIGATION OF ANY OBLIGOR
TO THE BANK; (III) THE FILING BY OR AGAINST ANY OBLIGOR OF ANY PROCEEDING IN
BANKRUPTCY, RECEIVERSHIP, INSOLVENCY, REORGANIZATION, LIQUIDATION,
CONSERVATORSHIP OR SIMILAR PROCEEDING (AND, IN THE CASE OF ANY SUCH PROCEEDING
INSTITUTED AGAINST ANY OBLIGOR, SUCH PROCEEDING IS NOT DISMISSED OR STAYED
WITHIN FORTY-FIVE (45) DAYS OF THE COMMENCEMENT THEREOF, PROVIDED THAT THE BANK
SHALL NOT BE OBLIGATED TO ADVANCE ADDITIONAL FUNDS HEREUNDER DURING SUCH
PERIOD); (IV) ANY ASSIGNMENT BY ANY OBLIGOR FOR THE BENEFIT OF CREDITORS, OR ANY
LEVY, GARNISHMENT, ATTACHMENT OR SIMILAR PROCEEDING IS INSTITUTED AGAINST ANY
PROPERTY OF ANY OBLIGOR HELD BY OR DEPOSITED WITH THE BANK; (V) A DEFAULT WITH
RESPECT TO ANY OTHER INDEBTEDNESS OF ANY OBLIGOR FOR BORROWED MONEY IN EXCESS OF
$50,000, IF THE EFFECT OF SUCH DEFAULT IS TO CAUSE OR PERMIT THE ACCELERATION OF
SUCH DEBT; (VI) THE COMMENCEMENT OF ANY FORECLOSURE OR FORFEITURE PROCEEDING,
EXECUTION OR ATTACHMENT AGAINST ANY COLLATERAL SECURING THE OBLIGATIONS OF ANY
OBLIGOR TO THE BANK; (VII) THE ENTRY OF A FINAL JUDGMENT IN EXCESS OF $100,000
OR THE ENTRY OF MULTIPLE FINAL JUDGMENTS AGGREGATING IN EXCESS OF $250,000
AGAINST ANY OBLIGOR AND THE FAILURE OF SUCH OBLIGOR TO DISCHARGE SUCH JUDGMENT
OR JUDGMENTS WITHIN THIRTY (30) DAYS OF THE ENTRY THEREOF; (VIII) ANY MATERIAL
ADVERSE CHANGE IN ANY OBLIGOR’S BUSINESS, ASSETS, OPERATIONS, FINANCIAL
CONDITION OR RESULTS OF OPERATIONS OF THE OBLIGORS TAKEN AS A WHOLE; (IX) ANY
OBLIGOR CEASES DOING BUSINESS AS A GOING CONCERN; OR (X) ANY REPRESENTATION OR
WARRANTY MADE BY ANY OBLIGOR TO THE BANK IN ANY LOAN DOCUMENT OR ANY OTHER
DOCUMENTS NOW OR IN THE FUTURE EVIDENCING OR SECURING THE OBLIGATIONS OF ANY
OBLIGOR TO THE BANK, IS FALSE, ERRONEOUS OR MISLEADING IN ANY MATERIAL RESPECT. 
AS USED HEREIN, THE TERM “OBLIGOR” MEANS ANY BORROWER AND ANY GUARANTOR OF, OR
ANY PLEDGOR, MORTGAGOR OR OTHER PERSON OR ENTITY PROVIDING COLLATERAL SUPPORT
FOR, THE BORROWER’S OBLIGATIONS TO THE BANK EXISTING ON THE DATE OF THIS NOTE OR
ARISING IN THE FUTURE.

 

Upon the occurrence and during the continuation of an Event of Default:  (a) the
Bank shall be under no further obligation to make advances hereunder; (b) if an
Event of Default specified in clause (iii) or (iv) above shall occur, the
outstanding principal balance and accrued interest hereunder together with any
additional amounts payable hereunder shall be immediately due and payable
without demand or notice of any kind; (c) if any other Event of Default shall
occur, the outstanding principal balance and accrued interest hereunder together
with any additional amounts payable hereunder, at the Bank’s option and without
demand or notice of any kind, may be accelerated and become immediately due and
payable; (d) at the Bank’s option, this Note will bear interest at the Default
Rate from the date of the occurrence of the Event of Default; and (e) the Bank
may exercise from time to time any of the rights and remedies available under
the Loan Documents or under applicable law.

 

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Power to Confess Judgment.  The Borrower hereby empowers any attorney of any
court of record, after the occurrence and during the continuance of any Event of
Default hereunder, to appear for the Borrower and, with or without complaint
filed, confess judgment, or a series of judgments, against the Borrower in favor
of the Bank or any holder hereof for the entire principal balance of this Note,
all accrued and unpaid interest and all other amounts due and owing hereunder,
together with reasonable costs of suit and an attorney’s commission of the
lesser of 10% of such principal and interest and $1,000 added as a reasonable
attorney’s fee, and for doing so, this Note or a copy verified by affidavit
shall be a sufficient warrant.  Except in the case of manifest error by the
Bank, the Borrower hereby forever waives and releases all errors in said
proceedings and all rights of appeal and all relief from any and all
appraisement, stay or exemption laws of any state now in force or hereafter
enacted.  Interest on any such judgment shall accrue at the Default Rate.

 

No single exercise of the foregoing power to confess judgment, or a series of
judgments, shall be deemed to exhaust the power, whether or not any such
exercise shall be held by any court to be invalid, voidable, or void, but the
power shall continue undiminished and it may be exercised from time to time as
often as the Bank shall elect until such time as the Bank shall have received
payment in full of the debt, interest and costs.  Notwithstanding the attorney’s
commission provided for in the preceding paragraph (which is included in the
warrant for purposes of establishing a sum certain), the amount of attorneys’
fees that the Bank may recover from the Borrower shall not exceed the actual
attorneys’ fees incurred by the Bank.

 

11.          RIGHT OF SETOFF.  IN ADDITION TO ALL LIENS UPON AND RIGHTS OF
SETOFF AGAINST THE BORROWER’S MONEY, SECURITIES OR OTHER PROPERTY GIVEN TO THE
BANK BY LAW, THE BANK SHALL HAVE, WITH RESPECT TO THE BORROWER’S OBLIGATIONS TO
THE BANK UNDER THIS NOTE AND TO THE EXTENT PERMITTED BY LAW, A CONTRACTUAL
POSSESSORY SECURITY INTEREST IN AND A CONTRACTUAL RIGHT OF SETOFF AGAINST, AND
THE BORROWER HEREBY GRANTS THE BANK A SECURITY INTEREST IN, AND HEREBY ASSIGNS,
CONVEYS, DELIVERS, PLEDGES AND TRANSFERS TO THE BANK, ALL OF THE BORROWER’S
RIGHT, TITLE AND INTEREST IN AND TO, ALL OF THE BORROWER’S DEPOSITS, MONEYS,
SECURITIES AND OTHER PROPERTY NOW OR HEREAFTER IN THE POSSESSION OF OR ON
DEPOSIT WITH, OR IN TRANSIT TO, THE BANK OR ANY OTHER DIRECT OR INDIRECT
SUBSIDIARY OF THE PNC FINANCIAL SERVICES GROUP, INC., WHETHER HELD IN A GENERAL
OR SPECIAL ACCOUNT OR DEPOSIT, WHETHER HELD JOINTLY WITH SOMEONE ELSE, OR
WHETHER HELD FOR SAFEKEEPING OR OTHERWISE, EXCLUDING, HOWEVER, ALL IRA, KEOGH,
AND TRUST ACCOUNTS.  EVERY SUCH SECURITY INTEREST AND RIGHT OF SETOFF MAY BE
EXERCISED WITHOUT DEMAND UPON OR NOTICE TO THE BORROWER.  EVERY SUCH RIGHT OF
SETOFF SHALL BE DEEMED TO HAVE BEEN EXERCISED IMMEDIATELY UPON THE OCCURRENCE OF
AN EVENT OF DEFAULT HEREUNDER WITHOUT ANY ACTION OF THE BANK, ALTHOUGH THE BANK
MAY ENTER SUCH SETOFF ON ITS BOOKS AND RECORDS AT A LATER TIME.

 

12.          INDEMNITY.  THE BORROWER AGREES TO INDEMNIFY EACH OF THE BANK, EACH
LEGAL ENTITY, IF ANY, WHO CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON CONTROL
WITH THE BANK, AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES
(THE “INDEMNIFIED PARTIES”), AND TO HOLD EACH INDEMNIFIED PARTY HARMLESS FROM
AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES AND REASONABLE
OUT-OF-POCKET EXPENSES (INCLUDING ALL FEES AND CHARGES OF EXTERNAL COUNSEL WITH
WHOM ANY INDEMNIFIED PARTY MAY CONSULT AND ALL EXPENSES OF LITIGATION AND
PREPARATION THEREFOR) WHICH ANY INDEMNIFIED PARTY MAY INCUR OR WHICH MAY BE
ASSERTED AGAINST ANY INDEMNIFIED PARTY BY ANY

 

7

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PERSON, ENTITY OR GOVERNMENTAL AUTHORITY (INCLUDING ANY PERSON OR ENTITY
CLAIMING DERIVATIVELY ON BEHALF OF THE BORROWER), IN CONNECTION WITH OR ARISING
OUT OF OR RELATING TO THE MATTERS REFERRED TO IN THIS NOTE OR IN THE OTHER LOAN
DOCUMENTS OR THE USE OF ANY ADVANCE HEREUNDER, WHETHER (A) ARISING FROM OR
INCURRED IN CONNECTION WITH ANY BREACH OF A REPRESENTATION, WARRANTY OR COVENANT
BY THE BORROWER, OR (B) ARISING OUT OF OR RESULTING FROM ANY SUIT, ACTION,
CLAIM, PROCEEDING OR GOVERNMENTAL INVESTIGATION, PENDING OR THREATENED, WHETHER
BASED ON STATUTE, REGULATION OR ORDER, OR TORT, OR CONTRACT OR OTHERWISE, BEFORE
ANY COURT OR GOVERNMENTAL AUTHORITY; PROVIDED, HOWEVER, THAT THE FOREGOING
INDEMNITY AGREEMENT SHALL NOT APPLY TO ANY CLAIMS, DAMAGES, LOSSES, LIABILITIES
AND EXPENSES TO THE EXTENT ATTRIBUTABLE TO AN INDEMNIFIED PARTY’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.  THE INDEMNITY AGREEMENT CONTAINED IN THIS
SECTION SHALL SURVIVE THE TERMINATION OF THIS NOTE, PAYMENT OF ANY ADVANCE
HEREUNDER AND THE ASSIGNMENT OF ANY RIGHTS HEREUNDER.  THE BORROWER MAY
PARTICIPATE AT ITS EXPENSE IN THE DEFENSE OF ANY SUCH ACTION OR CLAIM.

 

13.          MISCELLANEOUS.  ALL NOTICES, DEMANDS, REQUESTS, CONSENTS, APPROVALS
AND OTHER COMMUNICATIONS REQUIRED OR PERMITTED HEREUNDER (“NOTICES”) MUST BE IN
WRITING (EXCEPT AS MAY BE AGREED OTHERWISE ABOVE WITH RESPECT TO BORROWING
REQUESTS) AND WILL BE EFFECTIVE UPON RECEIPT IF A REGULAR BUSINESS DAY.  NOTICES
MAY BE GIVEN IN ANY MANNER TO WHICH THE PARTIES MAY SEPARATELY AGREE, INCLUDING
ELECTRONIC MAIL.  WITHOUT LIMITING THE FOREGOING, FIRST-CLASS MAIL, CONFIRMED
FACSIMILE TRANSMISSION AND COMMERCIAL COURIER SERVICE ARE HEREBY AGREED TO AS
ACCEPTABLE METHODS FOR GIVING NOTICES.  REGARDLESS OF THE MANNER IN WHICH
PROVIDED, NOTICES MAY BE SENT TO A PARTY’S ADDRESS AS SET FORTH ABOVE OR TO SUCH
OTHER ADDRESS AS ANY PARTY MAY GIVE TO THE OTHER FOR SUCH PURPOSE IN ACCORDANCE
WITH THIS PARAGRAPH.  NO DELAY OR OMISSION ON THE BANK’S PART TO EXERCISE ANY
RIGHT OR POWER ARISING HEREUNDER WILL IMPAIR ANY SUCH RIGHT OR POWER OR BE
CONSIDERED A WAIVER OF ANY SUCH RIGHT OR POWER, NOR WILL THE BANK’S ACTION OR
INACTION IMPAIR ANY SUCH RIGHT OR POWER.  THE BANK’S RIGHTS AND REMEDIES
HEREUNDER ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY OTHER RIGHTS OR REMEDIES WHICH
THE BANK MAY HAVE UNDER OTHER AGREEMENTS, AT LAW OR IN EQUITY.  NO MODIFICATION,
AMENDMENT OR WAIVER OF, OR CONSENT TO ANY DEPARTURE BY THE BORROWER FROM, ANY
PROVISION OF THIS NOTE WILL BE EFFECTIVE UNLESS MADE IN A WRITING SIGNED BY THE
BANK, AND THEN SUCH WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC
INSTANCE AND FOR THE PURPOSE FOR WHICH GIVEN.  THE BORROWER AGREES TO PAY ON
DEMAND, TO THE EXTENT PERMITTED BY LAW, ALL REASONABLE OUT-OF-POCKET COSTS AND
EXPENSES INCURRED BY THE BANK IN THE ENFORCEMENT OF ITS RIGHTS IN THIS NOTE AND
IN ANY SECURITY THEREFOR, INCLUDING WITHOUT LIMITATION FEES AND EXPENSES OF THE
BANK’S COUNSEL.  IF ANY PROVISION OF THIS NOTE IS FOUND TO BE INVALID, ILLEGAL
OR UNENFORCEABLE IN ANY RESPECT BY A COURT, ALL THE OTHER PROVISIONS OF THIS
NOTE WILL REMAIN IN FULL FORCE AND EFFECT.  THE BORROWER AND ALL OTHER MAKERS
AND INDORSERS OF THIS NOTE HEREBY FOREVER WAIVE PRESENTMENT, PROTEST, NOTICE OF
DISHONOR AND NOTICE OF NON-PAYMENT.  THE BORROWER ALSO WAIVES ALL DEFENSES BASED
ON SURETYSHIP OR IMPAIRMENT OF COLLATERAL.  IF THIS NOTE IS EXECUTED BY MORE
THAN ONE BORROWER, THE OBLIGATIONS OF SUCH PERSONS OR ENTITIES HEREUNDER WILL BE
JOINT AND SEVERAL.  THIS NOTE SHALL BIND THE BORROWER AND ITS HEIRS, EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS, AND THE BENEFITS HEREOF SHALL INURE TO
THE BENEFIT OF THE BANK AND ITS SUCCESSORS AND ASSIGNS; PROVIDED, HOWEVER, THAT
THE BORROWER MAY NOT ASSIGN THIS NOTE IN WHOLE OR IN PART WITHOUT THE BANK’S
WRITTEN CONSENT AND THE BANK AT ANY TIME MAY ASSIGN THIS NOTE IN WHOLE OR IN
PART TO ANY ASSIGNEE PERMITTED UNDER THE LOAN AGREEMENT.

 

This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the Commonwealth.  THIS NOTE WILL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE BANK AND THE BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS
OF THE

 

8

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COMMONWEALTH, EXCLUDING ITS CONFLICT OF LAWS RULES.  The Borrower hereby
irrevocably consents to the non-exclusive jurisdiction of any state or federal
court in the Commonwealth; provided that nothing contained in this Note will
prevent the Bank from bringing any action, enforcing any award or judgment or
exercising any rights against the Borrower individually, against any security or
against any property of the Borrower within any other county, state or other
foreign or domestic jurisdiction.  The Borrower acknowledges and agrees that the
venue provided above is the most convenient forum for both the Bank and the
Borrower.  The Borrower waives any objection to venue and any objection based on
a more convenient forum in any action instituted under this Note.

 

14.          WAIVER OF JURY TRIAL.  THE BORROWER IRREVOCABLY WAIVES ANY AND ALL
RIGHTS THE BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION
WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  THE
BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

 

The Borrower acknowledges that it has read and understood all the provisions of
this Note, including the confession of judgment and the waiver of jury trial,
and has been advised by counsel as necessary or appropriate.

 

[Signature to appear on the following page]

 

9

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WITNESS the due execution of this Committed Line of Credit Note as a document
under seal, as of the date first written above, with the intent to be legally
bound hereby.

 

 

 

NEW HORIZONS WORLDWIDE, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

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Disclosure for Confession of Judgment

 

Undersigned:

 

New Horizons Worldwide, Inc.

 

 

1 West Elm Street, Suite 125

 

 

Conshohocken, Pennsylvania 19482

 

Lender:

 

PNC Bank, National Association

 

 

1600 Market Street, 22nd Floor

 

 

Philadelphia, Pennsylvania 19103

 

The undersigned has executed, and/or is executing, on or about the date hereof,
a Committed Line of Credit Note, in the principal amount of $6,000,000, under
which the undersigned is obligated to repay monies to Lender.

 

A.            The undersigned acknowledges and agrees that the above-referenced
notes contain provisions under which Lender may enter judgment by confession
against the undersigned.  Being fully aware of its rights to prior notice and a
hearing on the validity of any judgment or other claims that may be asserted
against it by Lender thereunder before judgment is entered, the undersigned
hereby freely, knowingly and intelligently waives these rights and expressly
agrees and consents to Lender’s entering judgment against it by confession
pursuant to the terms thereof.

 

B.            The undersigned also acknowledges and agrees that the
above-referenced notes contain provisions under which Lender may, after entry of
judgment and without either notice or a hearing, foreclose upon, attach, levy,
take possession of or otherwise seize property of the undersigned in full or
partial payment of the judgment.  Being fully aware of its rights after judgment
is entered (including the right to move to open or strike the judgment), the
undersigned hereby freely, knowingly and intelligently waives its rights to
notice and a hearing and expressly agrees and consents to Lender’s taking such
actions as may be permitted under applicable state and federal law without prior
notice to the undersigned.

 

C.            The undersigned certifies that a representative of Lender
specifically called the confession of judgment provisions in the above documents
to the attention of the undersigned, and/or that the undersigned was represented
by legal counsel in connection with the above documents.

 

D.            The undersigned hereby certifies:  that its annual income exceeds
$10,000; that all references to “the undersigned” above refer to all persons and
entities signing below; and that the undersigned received a copy hereof at the
time of signing.

 

Dated:   October 1, 2008

 

NEW HORIZONS WORLDWIDE, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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