Exhibit 10.5

** Certain information in this exhibit has been omitted and has been filed
separately with the Securities and Exchange Commission pursuant to a
confidential treatment request under Rule 42b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934.

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (“Agreement”) is entered into on this 10th day of
March, 2006 by and between New Horizons Computer Learning Center of Charlotte,
Inc., a Delaware corporation (“Seller”) on the one hand, and Sukothai, Inc.,  a
North Carolina corporation (“Buyer”), and Kimberly Pongpat, an individual
(“Shareholder”) on the other hand.  Buyer, Shareholder and Seller are
hereinafter sometimes individually referred to as a “Party” or collectively as
the “Parties”.

WHEREAS, Seller wishes to sell to Buyer substantially all of its assets related
to its computer training business located in Charlotte, North Carolina (the
“Business”), which includes the assets set forth on Exhibit “A” (the “Assets”)
and Buyer’s assumption of liabilities set forth on Exhibit “B” (the “Assumed
Liabilities”); and

WHEREAS, Buyer desires to acquire the Assets and assume the Assumed Liabilities
from Seller; and

WHEREAS, concurrent with the transaction described in this Agreement, Buyer
desires to become a franchisee of New Horizons Franchising Group, Inc., or its
affiliate (“Franchisor”) in Charlotte, North Carolina, it being understood that
Franchisor is an affiliate of Seller.

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the Parties agree as follows:

1.             Purchase of Assets; Excluded Assets; Closing Date:

(a)            Pursuant to the terms and subject to the conditions set forth in
this Agreement, Seller hereby agrees to sell, grant, transfer, convey, assign
and deliver the Assets to Buyer as of the close of business on March 31, 2006
(the “Closing Date”), which shall be automatically extended to allow for the
fulfillment of each of the conditions set forth in Section 4 below, but in no
event beyond the period specified n Section 4(h), below.  The Assets shall
include, without limitation, certain identified prepaid assets, furniture and
fixed assets, inventory, license fees and deposits, accounts receivable, certain
employee obligations, any consumer business, customer lists and certain computer
hardware and software associated with the Business, all of which are set forth
on Exhibit “A”.

(b)           The Parties acknowledge and agree that, other than as otherwise
expressly stated in this Agreement, no other assets, personal or real property
of Seller is included in this transaction, including but not limited to,
non-scheduled lease obligations, services previously provided by the regional
office of Seller’s affiliate such as accounting, payroll, legal or other similar
services, and assets of any of Seller’s affiliates.

2.             Consideration:  In consideration for the transfer of the Assets,
Buyer shall, on the Closing Date:

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(i)            pay to Seller the sum of $75,000 (the “Purchase Price”),
comprised of $37,500 in the form of a wire transfer or cashier’s check to Seller
and a promissory note of $37,500 executed by Buyer in favor of Seller in the
form attached hereto as Exhibit “E” (the “Promissory Note”) with a one (1) year
term and a 6% annual interest rate;

(ii)  execute a standard ten (10) year franchise agreement with Franchisor for
the Charlotte, North Carolina territory (the “Franchise Agreement”) and shall
remit all fees to Franchisor which are typically associated with such Franchise
Agreement, including but not limited to the payment of customary monthly fees,
such as royalties and advertising fees (but exclusive of an initial franchise
fee, which is already included in the cash component of the consideration set
forth in the preceding section) ; [***]

[***]

[***]

[***]

(iii)  assume the Assumed Liabilities which are set forth on Exhibit “B”,
including the Training Obligations as defined in Section 4(d), below.

3.             Taxes; Access to Assets:  Buyer shall be solely responsible for
the payment of any and all taxes, excise and other governmental charges or fees,
if any, which are payable in connection with the purchase of the Assets.  As of
the Closing Date, Buyer shall be entitled to full access to the Assets located
at Seller’s facility at 9140 Arrowpoint Blvd, Office Building No. 2, Charlotte,
North Carolina 28273 (the “Charlotte Facility”).

4.                                      Conditions Precedent to Closing;
Covenants; Extension of Closing Date:

(a)           Immediately upon the execution of this Agreement, Buyer shall
submit an application to the North Carolina State Board of Community Colleges,
Office of Proprietary Schools (“NCSBCC”) seeking approval for a change in
ownership of the Business and shall use its best efforts to expedite the
approval process, including providing all reasonably required information to the
NCSBCC and paying any necessary fees associated with such approval.  Buyer
agrees that it must obtain approval on or before the Closing Date and in any
event no later than September 8, 2006.  Upon approval of Buyer’s application,
Buyer shall immediately post a bond or cash deposit with the NCSBCC as required
by applicable North Carolina law so that Seller shall be entitled to receive a
refund of $100,000 currently held by NCSBCC.  Seller agrees

2

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to cooperate with and provide reasonable assistance to Buyer in connection with
Buyer’s effort to obtain NCSBCC approval.

(b)           On the Closing Date: (i) Buyer and Franchisor shall execute the
Franchise Agreement; (ii) the Parties shall execute the Bill of Sale which is
attached hereto as Exhibit “C” and the Sublease Agreement for the Charlotte
Facility which is attached hereto as Exhibit “D”, provided that the Landlord for
the Charlotte Facility has granted its consent under the Sublease Agreement;
(iii) Buyer shall execute the promissory note which is attached hereto as
Exhibit “E”; and (iv) Seller shall take all steps reasonably necessary to
transfer the Assets to Buyer, including obtaining the requisite consent of its
landlord and its lenders.

(c)           Within sixty (60) days after the Closing Date, Seller shall cause
any UCC filings to be terminated or otherwise released such that the Assets are
unencumbered.

(d)           Effective as of the Closing Date, Buyer shall fulfill Seller’s
obligations to customers for training which has been purchased by such customers
prior to the Closing Date but not yet delivered as of the Closing Date, (the
“Training Obligations”).  For purposes of this Agreement, the Training
Obligations shall include, but are not limited to, sold but unredeemed coupons,
unexpired club memberships, corporate seat licenses, unredeemed programs or
tracks, sold but undelivered training events (i.e., classes which were purchased
but not completed) and sold but undelivered room rental agreements.

(e)           Effective as of the Closing Date, Buyer and Seller shall not
solicit, recruit or hire any employees of the other party, or the other party’s
affiliates, for so long as the Franchise Agreement remains in effect.  The
foregoing restriction shall apply to any current or future employees of either
party and for a period of one (1) year following the termination of the
employee’s employment with such party or such party’s affiliates, but shall not
apply to employees of either party who are terminated by such party.

(f)            Except as otherwise set forth herein, any debts, liabilities or
obligations incurred by or actions, claims or lawsuits asserted against either
Buyer or Seller which relate to the operation of the Business on or prior to the
Closing Date (excluding the Assumed Liabilities and the Training Obligations)
will be the responsibility of Seller.  Conversely, any debts, liabilities or
obligations incurred by or actions, claims or lawsuits asserted against either
Buyer or Seller which relate to the operation of the Business after the Closing
Date, as well as the Assumed Liabilities and the Training Obligations
(regardless of when the Assumed Liabilities and Training Obligations were
incurred) will be the responsibility of Buyer.

(g)           In the event that any of the foregoing conditions are not
completely satisfied on or before the Closing Date, then such failure by the
party responsible for fulfilling the condition shall relieve the other party
from any obligation to perform under this Agreement.

(h)           If the Closing Date does not occur by September 8, 2006, then this
Agreement shall terminate without any liability to either Buyer or Seller.

3

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5.             Representations and Warranties of Seller:  Seller represents,
warrants and covenants to the best of its knowledge as follows:

(a)            Seller is a Delaware corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all necessary corporate powers to own its assets and to operate its business as
now owned and operated by it.

(b)           Seller has the right, power, legal capacity, and authority to
enter into and perform its obligations under this Agreement.

(c)            Seller has good and marketable title to all of the Assets, and,
except as otherwise indicated herein, such Assets are free and clear of any
restrictions or conditions to sale, conveyance or transfer and are free and
clear of all liens, mortgages, pledges, encumbrances, leases, agreements, rental
agreements, charges, claims, security interests, taxes, conditions or
restrictions of any nature or description whatsoever.   The Assets are in good
working condition, ordinary wear and tear excepted.  Except as otherwise
expressly provided herein, the Assets are being sold “as is, where is” without
any express or implied warranties whatsoever.

(d)           There are no claims, actions or lawsuits pending against Seller
relating to the Assets.

(e)            Seller shall execute all documents and take all steps reasonably
necessary to transfer the Assets to Buyer effective as of the Closing Date.

(f)            Seller makes no representations or warranties regarding the
quality of the accounts receivable, including whether such accounts are
collectible.

6.             Representations of Buyer and Shareholder:  Buyer and Shareholder
represent, warrant and covenant as follows:

(a)            Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of North Carolina.  Shareholder owns
100% of the issued and outstanding equity of Buyer.

(b)           Buyer has the right, power, legal capacity, and authority to enter
into and perform its obligations under this Agreement and the execution of this
Agreement has been duly authorized by Shareholder.

(c)            As of the Closing Date, Buyer will duly observe and assume full
responsibility for the Assumed Liabilities and the Training Obligations, and
shall assume possession and ownership of the Assets.

7.             Indemnification:  Buyer shall indemnify, hold harmless and defend
Seller, its parent company, affiliates, officers, agents, shareholders and
employees from and against any cause of action, claim, loss or liability arising
out of or resulting in any way from: (i) the negligent acts or omissions of
Buyer’s officers, employees, agents or shareholders; (ii) any

4

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breach or inaccuracy of any representation, warranty or covenant of Buyer set
forth in this Agreement; (iii) any debts, claims, liabilities or lawsuits which
relate to the use or operation of the Business or the Assets after the Closing
Date; and (iv)  the failure to fully and adequately assume the Assumed
Liabilities, including the Training Obligations.  If after ten (10) days from
receipt of written notice the Buyer fails to defend the Seller as required
above, Seller will have the right (but not the obligation) to undertake the
defense, compromise or settlement of such action on behalf of, and for the
account and at the risk of Buyer.

8.             Insurance:  Buyer agrees to maintain general liability insurance
in the amounts of $1,000,000 per claim and $1,000,000 in the aggregate, and upon
written request Buyer will provide Seller with certificates of insurance naming
Seller or its affiliated companies as additional insureds, in order to ensure
that Buyer is able to meet its indemnification obligations hereunder. 
Notwithstanding any provision to the contrary, to the extent permitted by law,
Buyer may satisfy, in whole or in part, the insurance requirements of this
Agreement by a plan of self insurance.

9.             Customer Records: The Parties will maintain the confidentiality
of all customer records and files in accordance with applicable federal and
state laws and regulations.  On the Closing Date, Seller agrees to transfer to
Buyer all original customer records and files that relate to the purchase and
delivery of computer training for the Business, including the files which relate
to the Training Obligations.  In the event that Seller is audited by any
federal, state or local entity following the Closing Date, Buyer shall provide
Seller or its designees with reasonable access, during normal business hours, to
all original customer files related to the Assets.

10.          Notices:  All notices with respect to this Agreement will be sent
by certified mail or facsimile, to the following addresses or facsimile numbers:

If to Seller:

New Horizons Computer Learning Center of Charlotte, Inc.

Attention:  Office of General Counsel

1900 S. State College Blvd., Suite 200

Anaheim, CA 92806

Tel:  (714) 940-8000

Fax:  (714) 938-6007

If to Buyer:

Sukothai, Inc.

Attention:  Kimberly Pongpat

5095 Ritter Road, Suite 114

Mechanicsburg, PA 17055

11.          Entire Agreement; Assignment:  Except for the Franchise Agreement
and related agreements which are being executed concurrently herewith, this
Agreement and the exhibits attached hereto represent the entire agreement
between the Parties and are binding on each Party’s respective successors, heirs
and assigns.  This Agreement may not be assigned

5

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without the written consent of the other party, and may only be amended by a
written agreement signed by authorized representatives of both Parties.

12.          Waiver:  The failure of either party to enforce any right, remedy
or condition of this Agreement shall not be deemed a waiver thereof nor shall it
void or otherwise affect its right to enforce the same right, remedy or
condition at any subsequent time.

13.          Survival of Representations and Warranties: The representations and
warranties set forth in this Agreement shall survive and continue until the
expiration of the applicable statute of limitations.

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

15.          Facsimile Signatures:  For purposes of execution of this Agreement,
faxed signature pages shall be deemed the same as original signature pages.

16.          Governing Law:  This Agreement will be governed by the laws of the
State of California.

NEW HORIZONS COMPUTER LEARNING CENTER OF CHARLOTTE, INC.

 

By:

 

 

 

 

 

Thomas J. Bresnan

 

 

 

 

President

 

 

 

 

 

 

 

 

SUKOTHAI, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Kimberly Pongpat

 

 

 

 

President

 

 

 

 

 

 

 

 

SHAREHOLDER:

 

 

 

 

 

 

 

 

 

 

 

 

Kimberly Pongpat

 

 

 

6

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EXHIBIT A

ASSETS

1.             The following assets are included in the sale of the Business:

Trade Accounts Receivable:

 

$

463,605

(a)

Suspense:

 

$

(6,578

)

Futures Reserve:

 

$

(117,031

)

Credit Memo Reserve:

 

$

(31,390

)

Other Prepaid Expenses:

 

$

19,569

 

Inventory – Student Kits & Test Vouchers:

 

$

27,405

 

Inventory – Manuals:

 

$

12,137

 

 

 

 

 

Fixed Assets (b)

 

 

 

 

 

 

 

Leasehold Improvements:

 

$

84,970

 

Capitalized Computer Software:

 

$

17,664

 

Furniture & Fixtures:

 

$

119,834

 

Computer Equipment:

 

$

275,761

 

Vehicles:

 

$

3,550

 

 

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(a) Gross value to be netted against suspense, future reserve and credit memo
reserve

(b) Gross value of fixed assets shown.  Accumulated depreciation and
amortization is $453,053 and net fixed asset value is $48,725

Buyer and Seller acknowledge that the assets listed above have been calculated
as of January 31, 2006.  Buyer and Seller agree to revise these assets within
thirty (30) days of the Closing Date to reflect the actual operations of the
Business as of the Closing Date.

7

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EXHIBIT B

ASSUMED LIABILITIES

1.                                      Telephone systems located at the
Charlotte Facility.

2.                                      Cellular and regular telephone numbers
(with any remaining service term assumed at Buyer’s expense).

3.                                      DSL computer line (with any remaining
service term assumed at Buyer’s expense).

4.                                      Training Obligations as more fully
described in Section 4(d).  [***]

5.                                      Buyer shall assume those obligations
which are specifically listed below:

Accounts Payable:

 

$

37,606

 

Payable to other Franchisees:

 

$

47,155

 

Sales Tax Payable:

 

$

2,023

 

Net Other Accrued Liabilities to Buyer:

 

$ 

29,297

(a)

 

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(a) Adjusted to exclude audit fees, Online Live and Online Anytime expenses
related to sales

Buyer and Seller acknowledge that the liabilities listed above have been
calculated as January 31, 2006.  Buyer and Seller agree to revise these
obligations within thirty (30) days of the Closing Date to reflect the actual
operations of the Business as of the Closing Date.

6.                                       On the Closing Date, Seller shall
terminate the existing employees of the Center and shall offer employment to
those employees who Buyer wishes to employ.    Buyer shall indemnify Seller for
any liability which may arise by virtue of Buyer’s failure to re-hire employees
or which may relate to any employment issues for hired employees.

8

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EXHIBIT C

BILL OF SALE

FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, the undersigned, New Horizons Computer Learning Center of
Charlotte, Inc., a Delaware corporation having its principal place of business
at 1900 S. State College Blvd., Suite 200, Anaheim, CA 92806 (“Seller”) hereby
sells, conveys, transfers, assigns and delivers to Sukothai, Inc., a North
Carolina corporation having an address at 5095 Ritter Road, Suite 114,
Mechanicsburg, PA 17055 (“Buyer”), all of its right, title and interest in and
to the Assets as such term is defined in that certain Asset Purchase Agreement
(“Agreement”), dated as of March 10, 2006, among Buyer and Seller.

TO HAVE AND TO HOLD the same unto Buyer, its successors and assigns forever.

This Bill of Sale is delivered pursuant to and is subject to and governed by the
terms and conditions of the Agreement. The representations, warranties and
covenants as set forth in the Agreement shall survive delivery of this Bill of
Sale as set forth in the Agreement.

This Bill of Sale is ancillary to the Agreement, and in the event of a conflict
between the terms of this Bill of Sale and the terms of the Agreement, the terms
of the Agreement shall govern.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly
executed as of 11:59 p.m. on the 31st day of March, 2006.

NEW HORIZONS COMPUTER LEARNING CENTER OF CHARLOTTE, INC.

By:

 

 

 

 

 

Thomas J. Bresnan

 

 

 

 

President

 

 

 

 

9

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EXHIBIT D

SUBLEASE AGREEMENT

This Sublease Agreement (the “Sublease”) is made and entered into as of this 1st
day of April, 2006, by and between New Horizons Computer Learning Center of
Charlotte, Inc., a Delaware corporation (“Sublessor”), and Sukothai, Inc., a
North Carolina corporation (“Sublessee”).

RECITALS

A.            Sublessor leases from Arrowpoint Associates Limited Partnership
(“Landlord”) the premises located at 9140 Arrowpoint Blvd., Office Building No.
2, Charlotte, North Carolina 28273 (the “Premises”) pursuant to a lease
agreement dated December 17, 1996, as amended (the “Lease”) attached hereto as
Attachment 1;

B.            Sublessor now wishes to sublease the Premises to Sublessee, and
Sublessee wishes to sublease the Premises from Sublessor in order for Sublessee
to operate a New Horizons Computer Learning Center on the Premises, subject to
the terms of a franchise agreement between Sublessee and New Horizons Computer
Learning Centers, Inc. dated the 1st day of April, 2006 (the “Franchise
Agreement”); and

C.            Sublessee acknowledges that it has received, reviewed, and
approved the Lease.

The parties agree as follows:

1.             SUBLEASE TERM

1.1           Term.  Sublessor hereby subleases the Premises to Sublessee, and
Sublessee accepts such sublease, subject to the terms of this Sublease and
applicable provisions of the Lease.  The Sublease shall commence on the 1st day
of April, 2006 (“Sublease Commencement Date”), shall expire on September 30,
2009 (the “Sublease Term”); provided, however, that the Sublease shall
automatically terminate upon the expiration or termination of the Franchise
Agreement.

1.2           Conflict with Term of Franchise Agreement.  Sublessor and
Sublessee acknowledge that the term of the Franchise Agreement may extend beyond
the term available under the Lease and that Sublessor cannot extend the term of
this Sublease beyond the remaining term under the Lease.  Sublessee acknowledges
that this Sublease may terminate due to the expiration of the remaining term
under the Lease prior to the expiration of the Franchise Agreement for the
Premises.   Sublessee acknowledges and agrees that in order to avoid an
automatic termination of the Franchise Agreement, it must negotiate a new direct
lease with the Landlord for the Premises or otherwise obtain a right to retain
possession of the Premises in accordance with the Franchise Agreement.

10

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2.             RENT

2.1           Monthly Rent.  Beginning on the Sublease Commencement Date,
Sublessee shall pay to Sublessor a monthly rental payment (“Rent”) in accordance
with the schedule set forth below, which is subject to adjustment in accordance
with the terms herein:

Sublease Term

 

Estimated Monthly Rent

 

 

 

 

 

Sublease Commencement Date through December 31, 2006:

 

$

18,783.94

 

January 1, 2007 through December 31, 2007:

 

$

18,783.94

 

January 1, 2008 through December 31, 2008:

 

$

18,783.94

 

January 1, 2009 through September 30, 2009:

 

$

18,783.94

 

 

Sublessee understands and agrees that the Rent is adjusted as of January 1 each
year during the sublease Term by an amount which is calculated in accordance
with Section 22.02 of the Lease.  Sublessee agrees to promptly pay any increases
in Rent upon receipt of notice from either Sublessor or Landlord.  Sublessee
further understands that the Estimated Monthly Rent figures set forth above
shall all be subject to adjustment in accordance with Section 22.02 of the
Lease, including the Rent due and payable in 2006.  Sublessee shall make
payments of Rent at the address set forth below, due no later than the tenth
(10th) day of each month during the sublease Term; provided however, that
Sublessee shall pay the first month’s Rent due hereunder upon the execution of
this Sublease.

2.2           Late Charge and Interest.  Should Sublessee fail to pay any part
of the Rent required pursuant to this Lease within five (5) days after the due
date, Sublessee shall pay to Sublessor a late charge of ten percent (10%) of the
overdue amount as a late charge.  The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Sublessor will incur
by reason of late payment by Sublessee.  Acceptance of any late charge shall not
constitute a waiver of Sublessee’s default with respect to the overdue amount,
or prevent Sublessor from exercising any of the other rights and remedies
available to Sublessor.  In addition, Rent not paid when due shall bear interest
from the date due until paid at the lesser of fifteen percent (15%) per year or
the maximum rate allowed by law.

2.3           Partial Months.  Rent for partial months shall be pro rated on the
basis of the actual number of days in the month.

2.4           Operating Expense Payments.  Sublessee shall pay taxes and
operating expenses (as provided in Section 1.01M of the Lease) (“Operating
Expenses”) to Sublessor in the amounts and with such frequency as Sublessor is
obligated to pay Operating Expenses to Landlord as provided in the Lease. 
Sublessee understands and agrees that, as is the case with Rent, the Operating
Expenses are also subject to adjustment in accordance with Section 22.02 of the
Lease.  Sublessee agrees to promptly pay any adjusted Operating Expenses upon
receipt of notice from either Sublessor or Landlord

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3.             PREMISES

3.1           Condition.  Sublessee acknowledges that it has inspected the
Premises and agrees to accept the Premises “as is.”  Sublessee’s occupancy of
the Premises shall conclusively establish that the Premises were in satisfactory
condition at such time.  Sublessor makes no representations as to: (a) the
square footage of the Premises, (b) the condition of the Premises, (c) the
condition of any existing tenant improvements, or (d) compliance with zoning or
restrictive covenants.   Sublessee shall, on the last day of the Sublease term,
or any extension thereof, or upon any earlier termination of such term,
surrender to Sublessor the Premises in good order, condition and state of
repair, reasonable wear and tear excepted.

3.2           Maintenance and Repair.    Sublessee shall, at its sole cost and
expense, perform the maintenance obligations and make any and all repairs or
replacements: (a) which Sublessor reasonably believes are required to be made by
Sublessor as Lessee under the Lease; (b) which are required by any law now or
hereafter affecting the Premises; or (c) which are required pursuant to the
terms of the Franchise Agreement.  If Sublessee fails to maintain and repair the
Premises, Sublessor may, on five (5) days prior notice, enter the Premises and
perform such repair and maintenance on behalf of Sublessee.  However, in the
case of an emergency, Sublessor shall have immediate rights to enter the
Premises and perform such repair.  In either case, Sublessee shall reimburse
Sublessor for all costs so incurred immediately upon demand.  It is the
intention of Sublessor and Sublessee, that at all times during the Sublease term
and any extension thereof, Sublessee shall maintain the Premises in an
attractive, fully operative condition.  Sublessor shall have no responsibility
hereunder to repair, maintain or replace any portion of the Premises at any
time.  Sublessee waives any benefit of any present or future laws which might
give Sublessee the right to repair the Premises at Sublessor’s expense or to
terminate the Sublease due to the condition of the Premises.  Sublessee shall
not commit any waste.

3.3           Use.   Sublessee shall not use the Premises for any purpose other
than operating a New Horizons Computer Learning Center as a New Horizons
franchisee.   Sublessee acknowledges that neither Landlord, Sublessor, nor any
agent acting on their behalf has made any representation or warranty with
respect to the suitability of the Premises for the conduct of Sublessee’s
business.

3.4           Tenant Improvements.  Sublessee is solely responsible for the
construction and costs of any leasehold improvements desired by Sublessee, and
the demolition of existing leasehold improvements if necessary, including all
permits, approvals, or the equivalent thereof, required by a governmental
agency.  Sublessee shall not make any alterations or additions costing in the
aggregate more than twenty thousand dollars ($20,000) within any twelve (12)
month period or make any structural alterations without first obtaining the
written consent of Sublessor, subject to any additional requirements for
approval under the Lease.  Sublessee shall give Sublessor at least thirty (30)
days notice of any alterations or additions so that Sublessor shall have the
opportunity to post a notice of non-responsibility, as may be provided for by
local law.   Tenant’s alterations and additions shall be completed on the same
terms and conditions as contained in the Lease.

3.5           Signs.  Sublessee shall erect only such signs on the Premises as
are allowed by the Franchise Agreement and the Lease.

12

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4.             INSURANCE

4.1           Required Coverage.

(a)           Beginning on the Commencement Date and continuing thereafter for
the full terms, and any extensions thereof, Sublessee shall maintain in full
force and effect, at Sublessee’s sole cost and expense, the various insurance
coverages required to be carried by Sublessee under the Franchise Agreement for
the Premises; provided, however, that if the amounts and types of insurance
coverages required pursuant to the terms of the Lease are greater, Sublessee
shall obtain insurance in such greater amounts or types.

(b)           Sublessee shall also carry and pay for public liability insurance
from a responsible insurance company licensed to do business in the state in
which the Premises are located during the entire term of this Sublease in
amounts not less than those required by the Franchise Agreement.  Sublessee
shall deliver to Sublessor a certificate of insurance for each policy provided
for in this Section 4.  Sublessor shall be shown as an additional insured and
loss payee on such policies, which shall not be canceled without thirty (30)
days notice to Sublessor.

4.2           Waiver of Subrogation. Sublessor and Sublessee each waive their
right to sue and recover damages against each other with respect to any
liability arising under the Lease or this Sublease and which is required to be
covered by any insurance policy in the Lease or this Sublease.  Each party
agrees to endeavor to cause its insurer to waive its rights against the other
party in the event of an insured casualty which is not caused by the willful
misconduct of the other party.

4.3           Sublessee’s Property.  Sublessee shall be solely responsible for
insuring its own property on the Premises.  Sublessor shall not be responsible
for loss or damage to the personal property of Sublessee, its sublessees,
employees, customers, or invitees, in the absence of the receipt of an insurance
payment by Sublessor attributable to such loss (in which event said payment
shall be delivered forthwith to Sublessee), or unless such loss or damage was
occasioned by the willful misconduct of Sublessor, its agents, servants, or
employees; but subject in any event to Section 4.2.

5.             DAMAGE TO PREMISES AND CONDEMNATION

If any part of the Premises is condemned or damaged by fire or other casualty
during the term of this Sublease, this Sublease shall remain in full force and
effect unless and until the Lease is canceled.  If the Lease is canceled for
such cause, Sublessee’s obligations under this Sublease shall abate as of the
date of such cancellation.  Otherwise, Sublessee’s obligations shall abate only
to the actual monetary extent and for the duration that Sublessor’s obligations
are reduced under the Lease.  In the event of a condemnation by eminent domain,
any award to the Sublessee shall belong to and be paid to Sublessor, including
any amount attributable to any leasehold interest, except that Sublessee shall
receive from the award a sum, if any, allocated for damage, destruction or
taking of Sublessee’s furniture, trade fixtures or equipment; provided, however,
that Sublessee is not in default hereunder.  Sublessee may also pursue and
retain any

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award from the condemning authority, payable solely and specifically to
Sublessee for the loss of Sublessee’s business.

6.             OBLIGATIONS UNDER THE LEASE

6.1           Assumption by Sublessee.  In addition to the terms, conditions and
provisions of this Sublease, Sublessee understands and agrees that this Sublease
is subject to each and all of the terms, conditions and provisions of the Lease
and of the rights of Landlord thereunder.  Except as expressly provided in this
Sublease, Sublessee expressly assumes all of the responsibilities and
obligations imposed upon Sublessor as the tenant under the terms of the Lease. 
In the event any inconsistency arises between the Lease and this Sublease in the
obligations of the Sublessee, the more stringent obligations shall prevail.

6.2           Sublessor’s Obligations.  Sublessor covenants to pay all amounts
owed to Landlord under the Lease to the extent Sublessee complies with its
obligations under this Sublease.  Sublessor acknowledges that this Sublease
shall not limit or impair Sublessor’s liability to Landlord under the Lease.

6.3           Landlord’s Obligations.  Sublessor shall not be liable to
Sublessee for the defaults of Landlord under the Lease.

6.4           Negotiations with Landlord.  Sublessee may negotiate provisions of
the Lease with the Landlord to benefit Sublessee; provided, however, that
Sublessor’s consent shall be required, which consent shall not be unreasonably
withheld, and further, that no changes shall be made to the Lease that enlarge
the responsibilities or obligations of Sublessor, including Sublessor liability
beyond the term of the Lease.

7.             INDEMNITY

7.1           Generally.  Sublessee shall indemnify, hold harmless, and defend
Sublessor from all claims, costs, damages, liabilities, and loss incurred by
Sublessor, including reasonable attorneys fees and costs of suit, as a result of
Sublessee’s default under this Sublease or the Lease, or as the result of any
act or failure to act by Sublessee, its agents, employees, customers, invitees,
licensees, successors, heirs, or assigns, or any and all persons coming upon or
near the Premises with regard to the Premises.

7.2           Hazardous Materials.  Sublessee agrees to indemnify and hold
Sublessor harmless from any and all costs of any remedial action or cleanup of
Hazardous Materials suffered or incurred by Sublessor arising out of or related
to Sublessee’s use of the Premises.  “Hazardous Materials” means any hazardous,
toxic, infectious, or radioactive substances, wastes, or materials listed or
defined by any federal or state environmental law.

8.             DEFAULT

8.1           Notice; Cure.  Sublessee shall cure any failure to perform
Sublessee’s obligations under this Sublease or the Lease:  (a) within three (3)
days after receiving notice of any monetary

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default, or (b) within ten (10) days after receiving notice of any non-monetary
default, except that if Sublessee cannot reasonably cure the non-monetary
default within ten (10) days, Sublessee shall have up to thirty (30) days to
complete the cure, so long as Sublessee proceeds with due diligence.  If
Sublessee fails to cure defaults during the grace periods specified above,
Sublessor shall have the right to declare a default under this Sublease.

8.2           Remedies.  Sublessor shall have the following rights and remedies
upon a default by Sublessee under this Sublease:

(a)           Sublessor may terminate this Sublease and upon such termination,
Sublessor may recover from Sublessee the amount by which the unpaid rent which
would have been earned after termination until the time that Sublessee proves
such loss could have been reasonably avoided; and

(b)           Sublessor may relet the Premises prior to the breach of this
Sublease by Sublessee.  In such case, if Sublessor proves that in reletting the
Premises it acted reasonably and in good faith to mitigate damages, it shall be
entitled to an award for Sublessee’s improper termination of this Sublease.

(c)           Sublessor shall also have the right, but not the obligation, to
cure any default by Sublessee.  Sublessee shall repay any costs incurred by
Sublessor in doing so upon Sublessor’s written demand.  All amounts owed
hereunder shall be considered rent and shall bear interest at the rate of ten
percent (10%) per annum or the maximum rate permitted by law, whichever is less,
from five (5) days after such demand to the date of payment.

8.3           Franchise Agreement.  Sublessee’s default under the Franchise
Agreement or any other document related to Sublessee’s operation of a New
Horizons Computer Learning Center on the Premises, including any promissory
note, shall be deemed a default under this Sublease.  In addition, Sublessee’s
default hereunder shall constitute a default under the Franchise Agreement, and
New Horizons Computer Learning Centers, Inc. may terminate the Franchise
Agreement in accordance with the terms thereof.

8.4           Remedies Cumulative.  The remedies specified in this Sublease are
cumulative and in addition to any other remedies which may be available at law
or in equity.

9.             ASSIGNMENTS

Sublessee shall not assign or sublet the Premises, in full or in part without
Sublessor’s prior written consent in each instance, which Sublessor may withhold
in its sole discretion.  Any assignment without the requisite consents shall be
void and shall, at the option of Sublessor, terminate this Sublease.  The
consent by Sublessor to one assignment or subletting shall not be deemed to be
consent to any subsequent assignment or subletting.

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10.           UTILITIES

Sublessee is required to open and maintain utility accounts in its name for, and
to pay, prior to delinquency, all charges for water, gas, heat, lights, power,
trash, telephone service and all other services supplied to the Premises during
the term of this Sublease.

11.           NOTICES

11.1         Notices:  Any and all notices furnished pursuant to this Sublease
shall be in writing and shall be personally delivered, sent by telecopier,
mailed by certified mail, return receipt requested, or dispatched by overnight
delivery envelope to the respective parties at the following addresses, unless
and until a different address has been designated by written notice to the other
party:

Notices to Sublessor:

 

New Horizons Computer Learning Center of Charlotte, Inc.

 

 

1900 S. State College Blvd., Suite 200

 

 

Anaheim, CA 92806

 

 

Attention: Legal Department

 

 

 

Notices to Sublessee:

 

Sukothai, Inc.

 

 

5095 Ritter Road, Suite 114

 

 

Mechanicsburg, PA 17055

 

 

Attention: Kimberly Pongpat

 

Notices shall be deemed to have been received as follows:  by personal delivery
or telecopier — at time of delivery; by overnight delivery service — on the next
business day following the date on which the Notice was given to the overnight
delivery service; and certified mail — three days after the date of mailing.

11.2         Under Lease.  Sublessee shall promptly provide Sublessor with a
copy of all notices received from Landlord regarding the Premises, the Lease, or
this Sublease.

12.           HOLDOVER TENANCY

At the expiration of the Sublease, or earlier termination for any reason,
Sublessee shall immediately surrender possession of the Premises to Sublessor. 
Should Sublessee fail to do so, it consents to pay any and all damages which
Sublessor may suffer, including attorneys’ fees, costs and expenses incurred by
Sublessor to obtain possession of the Premises.  Sublessee expressly waives any
notice to vacate at the expiration of the Sublease.  Should Sublessor allow or
permit Sublessee to remain in the Premises after the expiration or termination
of this Sublease, this shall not be construed as an extension of this Sublease,
and such holding over shall be deemed to have created a month-to-month tenancy,
subject to all the terms and conditions of this Sublease, except that Sublessee
shall pay Rent to Sublessor at a rate equal to two hundred percent (200%) of the
monthly rental paid during the one (1) year period immediately preceding the
expiration of the Sublease

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13.           LEGAL EXPENSES

In the event either party brings an action against the other by reason of the
alleged breach or any term, covenant or condition of this Sublease, the
prevailing party shall be entitled to recover from the other party all legal
expenses, including reasonable attorneys’ fees, in an amount to be fixed by the
court rendering such judgment.  The foregoing provision notwithstanding, in the
event Sublessee shall be in default under this Sublease, and shall cure such
default after notice by Sublessor pursuant to this Sublease, then all reasonable
attorneys’ fees incurred by Sublessor as a result of such default shall be paid
by Sublessee.  Such attorneys’ fees shall be added to the subsequent month’s
Rent as additional Rent.  Sublessee shall reimburse Sublessor, upon demand, for
any costs or expenses incurred by Sublessor in connection with any breach by or
default of Sublessee under this Sublease, whether or not suit is commenced or
judgment entered.  Such costs shall include legal fees and costs incurred for
the negotiation of a settlement, enforcement of rights or otherwise.  Sublessee
shall also indemnify Sublessor for, and hold Sublessor harmless form and
against, all liabilities incurred by Sublessor if Sublessor becomes or is made a
party to any proceeding claim or action instituted: (a) by Sublessee; (b) by any
third party against Sublessee; (c) by or against any person holding an interest
under Sublessee or using the Premises by license of or agreement with Sublessee;
(d) for foreclosure of any lien for labor and material furnished to or for
Sublessee or such other person; or (e) otherwise arising out of or resulting
from any act or omission of Sublessee or such other person.

14.           CONTROLLING LAW; VENUE

This Sublease shall be governed and construed in accordance with the laws of
North Carolina.  The parties agree that any action brought by either party
against the other in any court, whether federal or state, will be brought
exclusively within the State of North Carolina, except that, Sublessor may, at
Sublessor’s discretion, seek injunctive and equitable relief in any court of
competent jurisdiction in order to evict Sublessee or prevent waste or other
actions by Sublessee that will irreparably harm Sublessor.  Sublessee hereby
irrevocably consents to the jurisdiction of such court and waives any objection
Sublessee may have to either jurisdiction or venue of such court.

15.           ENTIRE AGREEMENT

This Sublease constitutes the entire agreement among the parties and supersedes
any oral or written understandings relating to the Lease or the Sublease.  This
Sublease may be modified only by written agreement between the parties or their
successors subsequent to the date of this Sublease.

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IN WITNESS WHEREOF, the parties hereto have duly executed, sealed, and delivered
this Sublease as of the day and year written below.

SUBLESSOR

NEW HORIZONS COMPUTER LEARNING CENTER OF CHARLOTTE, INC.

By:

 

 

 

Thomas J. Bresnan

 

President

 

SUBLESSEE

 

SUKOTHAI, INC.

 

 

 

 

By:

 

 

 

Kimberly Pongpat

 

President

 

 

 

CONSENT TO THE FOREGOING SUBLEASE IS HEREBY GRANTED:

LANDLORD

ARROWHEAD ASSOCIATES LIMITED PARTNERSHIP

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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ATTACHMENT 1

LEASE

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ATTACHMENT 2

PERSONAL GUARANTEE

As an inducement to New Horizons Computer Learning Center of Charlotte, Inc.
(“Sublessor”) to execute the Sublease (the “Sublease”) with Sukothai, Inc.
(“Sublessee”)  and in consideration of Sublessor’s executing the Sublease and of
the sum of One Dollar ($1.00) now paid by Sublessor to Guarantors, the receipt
of which is hereby acknowledged, Guarantors jointly and severally agree as
follows:

1.             Guarantors shall pay or cause to be paid to Sublessor all monies
payable by Sublessee under the Sublease on the days and times in the manner
therein appointed for payment thereof.

2.             Guarantors unconditionally guarantee full performance and
discharge by Sublessee of all the obligations of Sublessee under the Sublease at
the times and in the manner therein provided.

3.             Guarantors shall indemnify and save harmless Sublessor and its
affiliates against and from all losses, damages, costs, and expenses which
Sublessor and its affiliates may sustain, incur, or become liable for by reason
of:

a.             the failure for any reason whatsoever of Sublessee to pay the
monies payable pursuant to the Sublease or to do and perform any other act,
matter or thing pursuant to the provisions of the Sublease; or

b.             any act, action, or proceeding of or by Sublessor, its agents,
employees, etc. for or in connection with the recovery of monies or the
obtaining of performance by Sublessee of any other act, matter or thing pursuant
to the provisions of the Sublease.

4.             Sublessor shall not be obligated to proceed against Sublessee or
exhaust any security from Sublessee or pursue or exhaust any remedy, including
any legal or equitable relief against Sublessee, before proceeding to enforce
the obligations of the Guarantors herein set out, and the enforcement of such
obligations may take place before, after, or contemporaneously with, enforcement
of any debt or obligation of Sublessee under the Sublease.

5.             Without affecting the Guarantors’ obligations under this
Guarantee, Sublessor, without notice to the Guarantors, may extend, modify, or
release any indebtedness or obligation of Sublessee, or settle, adjust, or
compromise any claims against Sublessee.  Guarantors waive notice of amendment
of the Sublease and notice of demand for payment or performance by Sublessee.

6.             Guarantors’ obligations hereunder shall remain in full force and
effect, and shall be unaffected by:  (a) the unenforceability of the Sublease
against Sublessee; (b) the termination of any obligations of Sublessee under the
Sublease by operation of law or otherwise; (c) the bankruptcy, insolvency,
dissolution, or other liquidation of Sublessee, including, without

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limitation, any surrender or disclaimer of the Sublease by the trustee in
bankruptcy of Sublessee; (d) Sublessor’s consent or acquiescence to any
bankruptcy, receivership, insolvency, or any other creditor’s proceedings of or
against Sublessee, or by the winding-up or dissolution of Sublessee, or any
other event or occurrence which would have the effect at law of terminating the
existence of Sublessee’s obligations prior to the termination of the Sublease;
or (e) by any other agreements or other dealings between Sublessor and
Sublessee  having the effect of amending or altering the Sublease or Sublessee’s
obligations hereunder, or by any want of notice by Sublessor to Sublessee of any
default of Sublessee or by any other matter, thing, act, or omission of
Sublessor whatsoever.

7.             Notices to Guarantors:

Name

 

Address

 

 

 

Phusit Tom Pongpat

 

5095 Ritter Road, Suite 114

Kimberly Pongpat

 

Mechanicsburg, PA 17055

 

IN WITNESS WHEREOF, each of the undersigned has signed this Guarantee as of the
day and year of the Sublease.

GUARANTORS:

 

 

 

 

Phusit Tom Pongpat

 

 

 

 

Kimberly Pongpat

 

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EXHIBIT E

PROMISSORY NOTE AND GUARANTY

$37,500.00

 

April 1, 2006

 

FOR VALUE RECEIVED, the undersigned (“Maker”), hereby promises to pay to the
order of New Horizons Computer Learning Center of Charlotte, Inc., a Delaware
corporation (“New Horizons”), or order, the sum of thirty seven thousand five
hundred dollars ($37,500.00), together with interest on the unpaid principal
balance hereof at the rate of 6% per annum, which principal and accrued interest
shall be due and payable in twelve equal monthly installments of $3,227.49 each,
commencing upon the execution of this promissory note and continuing thereafter
on the fifteen day of each month until the outstanding principal balance and all
unpaid accrued interest has been paid in full.

Maker reserves the right to prepay all or any portion of this Promissory Note
and Guaranty (“Promissory  Note”) at any time and from time to time without
premium or penalty of any kind by paying, in addition to the principal amount of
such prepayment, the interest accrued hereon to the date of such prepayment.

In the event that (a) Maker shall default in the payment of principal or
interest due hereunder and such default shall continue for ten (10) days after
the mailing of written notice of such default to Maker at Maker’s last known
address, or (b) a receiver is appointed for Maker or any Guarantor or any part
of Maker’s property, or (c) Maker or any Guarantor makes any general assignment
for the benefit of Maker’s or any Guarantor’s creditors, or any proceeding is
commenced by or against Maker or any Guarantor or any other guarantor, surety,
endorser, or person directly or indirectly liable for any of the obligations
hereunder, or (d) Maker shall be deemed in default of the Franchise Agreement as
of April 1, 2006 between Maker and New Horizons Computer Learning Centers, Inc.,
or its affiliate (“Franchisor”) (the events described in subparts (a), (b), (c)
and (d) are collectively referred to as Default”), the holder of this Promissory
Note at the time of the Default (the “Holder”) shall have the right, if a
Default occurs, to declare the outstanding principal balance hereof and all
unpaid accrued interest immediately due and payable in full (the “Balance Due”).

If a Default occurs, Maker and Guarantors also agree to pay upon demand all
costs and expenses reasonably incurred or paid at any time by Holder, including,
but not limited to, reasonable attorneys’ fees and other legal costs, in
enforcing payment and collection of the Balance Due of this Promissory Note.

Maker and Guarantors agree: no delay or omission by Holder in exercising any of
its rights or remedies hereunder or otherwise shall impair any of such rights or
remedies, nor shall any such delay or omission be construed as a waiver of any
Default hereunder, and Holder may exercise every such right and remedy from time
to time as often as Holder may deem expedient; all rights

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and remedies of Holder whether or not granted hereunder shall be cumulative and
may be exercised singularly or concurrently, and no such right or remedy is
intended to be exclusive of any other right or remedy of Holder; and no waiver
by Holder of any Default hereunder shall be effective unless in writing and
signed and delivered by Holder, and no such waiver or any default shall extend
to or affect any subsequent or other Default or impair any rights or remedies of
Holder.

This Promissory Note shall be the joint and several obligation of Maker,
Guarantors and all guarantors, sureties, endorsers, and/or any other persons now
or hereafter liable hereon, if any, and shall be binding upon them and their
heirs, executors, personal representatives, successors and assigns.

Any demand upon or notice of other communication to Maker and/or any Guarantor
shall be effective if delivered by hand delivery or deposited in the mails,
postage prepaid, addressed to Maker and/or any Guarantor at the address(es) of
Maker and/or any Guarantor as set forth in Holder’s records, or, if Maker and/or
any Guarantor has notified Holder of a change of address, to the last address of
which Holder has been so notified.

Maker and each Guarantor, for Maker and each Guarantor and for any guarantors,
sureties, endorsers and/or any other persons now or hereafter liable hereon, if
any, hereby waive demand for payment, presentment for payment, protest, notice
of nonpayment or dishonor, and any and all other notices and demands whatsoever.

If any provision or application of this Promissory Note is adjudicated to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision or application of this Promissory Note that can be given
effect without the invalid or unenforceable provision or application.  Interest
shall accrue hereunder at the lesser of (a) the rate stated hereinabove, or (b)
the maximum rate permitted by law.

For additional and other value received, the existence, amount and sufficiency
of which are hereby acknowledged, the undersigned guarantor(s) (singly or
collectively referred to as “Guarantor”) jointly and severally hereby guarantees
to Holder (a) the immediate, absolute and unconditional payment of the Balance
Due of this Promissory Note after Default and (b) the immediate, absolute and
unconditional payment of all costs and expenses reasonably incurred or paid at
any time by Holder, including, but not limited to, reasonable attorneys’ fees
and other legal costs, in enforcing payment and collection of the Balance Due of
this Promissory Note.

This Promissory Note shall be governed by, and construed and enforced in
accordance with, the internal laws of the North Carolina applicable to contracts
made and to be performed wholly within such state.

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IN WITNESS WHEREOF, Maker and Guarantors have executed and delivered this
Promissory Note at the place specified above and as of the date first written
above.

MAKER:

 

SUKATHAI, INC.

 

 

 

 

By:

 

 

 

Kimberly Pongpat

 

President

 

GUARANTORS:

 

 

 

 

 

 

 

 

Phusit Tom Pongpat

 

 

 

 

 

 

 

 

Kimberly Pongpat

 

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