Credit Agreement



 Exhibit 10.1 
  

 CREDIT AGREEMENT 
  
 DATED AS OF
FEBRUARY 20, 2004, 
  
 AMONG

  
 NOBEL LEARNING
COMMUNITIES, INC., 
  
 THE GUARANTORS FROM TIME TO TIME PARTIES HERETO, 
  
 THE LENDERS FROM TIME TO TIME
PARTIES HERETO, 
  
 AND 
  
 HARRIS
TRUST AND SAVINGS BANK, 
 as Administrative Agent 
  

  







 TABLE OF CONTENTS 
  

							
	 SECTION

	  	 HEADING

	  	PAGE


	 SECTION 1.
	  	 THE CREDIT FACILITIES
	  	1
				
	 	  	Section 1.1.	  	 Term Loan Commitments
	  	1
	 	  	Section 1.2.	  	 Revolving Credit Commitments
	  	1
	 	  	Section 1.3.	  	 Letters of Credit
	  	2
	 	  	Section 1.4.	  	 Applicable Interest Rates
	  	4
	 	  	Section 1.5.	  	 Minimum Borrowing Amounts; Maximum Eurodollar Loans
	  	6
	 	  	Section 1.6.	  	 Manner of Borrowing Loans and Designating Applicable Interest Rates
	  	6
	 	  	Section 1.7.	  	 Interest Periods
	  	8
	 	  	Section 1.8.	  	 Maturity of Loans
	  	9
	 	  	Section 1.9.	  	 Prepayments
	  	9
	 	  	Section 1.10.	  	 Default Rate
	  	12
	 	  	Section 1.11.	  	 The Notes
	  	12
	 	  	Section 1.12.	  	 Funding Indemnity
	  	13
	 	  	Section 1.13.	  	 Commitment Terminations
	  	13
	 	  	Section 1.14.	  	 Substitution of Lenders
	  	13
			
	 SECTION 2.
	  	 FEES
	  	14
				
	 	  	Section 2.1.	  	 Fees
	  	14
			
	 SECTION 3.
	  	 PLACE AND APPLICATION OF PAYMENTS
	  	15
				
	 	  	Section 3.1.	  	 Place and Application of Payments
	  	15
	 	  	Section 3.2.	  	 Account Debit
	  	16
			
	 SECTION 4.
	  	 GUARANTIES AND COLLATERAL
	  	17
				
	 	  	Section 4.1.	  	 Guaranties
	  	17
	 	  	Section 4.2.	  	 Collateral
	  	17
	 	  	Section 4.3.	  	 Liens on Real Property
	  	17
	 	  	Section 4.4.	  	 Further Assurances
	  	18
	 	  	Section 4.5.	  	 Collections
	  	18
			
	 SECTION 5.
	  	 DEFINITIONS; INTERPRETATION
	  	19
				
	 	  	Section 5.1.	  	 Definitions
	  	19
	 	  	Section 5.2.	  	 Interpretation
	  	32
	 	  	Section 5.3.	  	 Change in Accounting Principles
	  	32
			
	 SECTION 6.
	  	 REPRESENTATIONS AND WARRANTIES
	  	33
				
	 	  	Section 6.1.	  	 Organization and Qualification
	  	33
	 	  	Section 6.2.	  	 Subsidiaries
	  	33









							
	 	  	Section 6.3.	  	 Authority and Validity of Obligations
	  	34
	 	  	Section 6.4.	  	 Use of Proceeds; Margin Stock
	  	34
	 	  	Section 6.5.	  	 Financial Reports
	  	35
	 	  	Section 6.6.	  	 No Material Adverse Change
	  	35
	 	  	Section 6.7.	  	 Full Disclosure
	  	35
	 	  	Section 6.8.	  	 Trademarks, Franchises, and Licenses
	  	35
	 	  	Section 6.9.	  	 Governmental Authority and Licensing
	  	35
	 	  	Section 6.10.	  	 Good Title
	  	36
	 	  	Section 6.11.	  	 Litigation and Other Controversies
	  	36
	 	  	Section 6.12.	  	 Taxes
	  	36
	 	  	Section 6.13.	  	 Approvals
	  	36
	 	  	Section 6.14.	  	 Affiliate Transactions
	  	36
	 	  	Section 6.15.	  	 Investment Company; Public Utility Holding Company
	  	37
	 	  	Section 6.16.	  	 ERISA
	  	37
	 	  	Section 6.17.	  	 Compliance with Laws
	  	37
	 	  	Section 6.18.	  	 Other Agreements
	  	38
	 	  	Section 6.19.	  	 Solvency
	  	38
	 	  	Section 6.20.	  	 No Broker Fees.
	  	38
	 	  	Section 6.21.	  	 No Default
	  	38
			
	 SECTION 7.
	  	 CONDITIONS PRECEDENT
	  	38
				
	 	  	Section 7.1.	  	 All Credit Events
	  	38
	 	  	Section 7.2.	  	 Initial Credit Event
	  	39
			
	 SECTION 8.
	  	 COVENANTS
	  	42
				
	 	  	Section 8.1.	  	 Maintenance of Business
	  	42
	 	  	Section 8.2.	  	 Maintenance of Properties
	  	42
	 	  	Section 8.3.	  	 Taxes and Assessments
	  	43
	 	  	Section 8.4.	  	 Insurance
	  	43
	 	  	Section 8.5.	  	 Financial Reports
	  	43
	 	  	Section 8.6.	  	 Inspection
	  	45
	 	  	Section 8.7.	  	 Borrowings and Guaranties
	  	45
	 	  	Section 8.8.	  	 Liens
	  	46
	 	  	Section 8.9.	  	 Investments, Acquisitions, Loans and Advances
	  	48
	 	  	Section 8.10.	  	 Mergers, Consolidations and Sales
	  	49
	 	  	Section 8.11.	  	 Maintenance of Subsidiaries
	  	50
	 	  	Section 8.12.	  	 Dividends and Certain Other Restricted Payments
	  	50
	 	  	Section 8.13.	  	 ERISA
	  	50
	 	  	Section 8.14.	  	 Compliance with Laws
	  	51
	 	  	Section 8.15.	  	 Burdensome Contracts With Affiliates
	  	52
	 	  	Section 8.16.	  	 No Changes in Fiscal Year
	  	52
	 	  	Section 8.17.	  	 Formation of Subsidiaries
	  	52
	 	  	Section 8.18.	  	 Change in the Nature of Business
	  	52
	 	  	Section 8.19.	  	 Use of Proceeds
	  	52
	 	  	Section 8.20.	  	 No Restrictions
	  	52

  

 -ii- 









							
	 	  	Section 8.21.	  	 Subordinated Debt
	  	53
	 	  	Section 8.22.	  	 Financial Covenants
	  	54
	 	  	Section 8.23.	  	 Post-Closing Obligations.
	  	55
			
	 SECTION 9.
	  	 EVENTS OF DEFAULT AND REMEDIES
	  	56
				
	 	  	Section 9.1.	  	 Events of Default
	  	56
	 	  	Section 9.2.	  	 Non-Bankruptcy Defaults
	  	58
	 	  	Section 9.3.	  	 Bankruptcy Defaults
	  	58
	 	  	Section 9.4.	  	 Collateral for Undrawn Letters of Credit
	  	59
	 	  	Section 9.5.	  	 Notice of Default
	  	59
	 	  	Section 9.6.	  	 Expenses
	  	59
			
	 SECTION 10.
	  	 CHANGE IN CIRCUMSTANCES
	  	60
				
	 	  	Section 10.1.	  	 Change of Law
	  	60
	 	  	Section 10.2.	  	 Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR
	  	60
	 	  	Section 10.3.	  	 Increased Cost and Reduced Return
	  	60
	 	  	Section 10.4.	  	 Lending Offices
	  	62
	 	  	Section 10.5.	  	 Discretion of Lender as to Manner of Funding
	  	62
			
	 SECTION 11.
	  	 THE ADMINISTRATIVE AGENT
	  	62
				
	 	  	Section 11.1.	  	 Appointment and Authorization of Administrative Agent
	  	62
	 	  	Section 11.2.	  	 Administrative Agent and its Affiliates
	  	62
	 	  	Section 11.3.	  	 Action by Administrative Agent
	  	63
	 	  	Section 11.4.	  	 Consultation with Experts
	  	63
	 	  	Section 11.5.	  	 Liability of Administrative Agent; Credit Decision
	  	63
	 	  	Section 11.6.	  	 Indemnity
	  	64
	 	  	Section 11.7.	  	 Resignation of Administrative Agent and Successor Administrative Agent
	  	64
	 	  	Section 11.8.	  	 L/C Issuer
	  	65
	 	  	Section 11.9.	  	 Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements
	  	65
	 	  	Section 11.10.	  	 Designation of Additional Agents
	  	66
	 	  	Section 11.11.	  	 Authorization to Release or Subordinate or Limit Liens
	  	66
	 	  	Section 11.12.	  	 Authorization to Enter into, and Enforcement of, the Collateral Documents
	  	66
			
	 SECTION 12.
	  	 THE GUARANTEES
	  	66
				
	 	  	Section 12.1.	  	 The Guarantees
	  	66
	 	  	Section 12.2.	  	 Guarantee Unconditional
	  	67
	 	  	Section 12.3.	  	 Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances
	  	68
	 	  	Section 12.4.	  	 Subrogation
	  	68
	 	  	Section 12.5.	  	 Waivers
	  	69

  

 -iii- 









							
	 	  	Section 12.6.	  	 Limit on Recovery
	  	69
	 	  	Section 12.7.	  	 Stay of Acceleration
	  	69
	 	  	Section 12.8.	  	 Benefit to Guarantors
	  	69
	 	  	Section 12.9.	  	 Guarantor Covenants
	  	69
			
	 SECTION 13.
	  	 MISCELLANEOUS
	  	69
				
	 	  	Section 13.1.	  	 Withholding Taxes
	  	69
	 	  	Section 13.2.	  	 No Waiver, Cumulative Remedies
	  	71
	 	  	Section 13.3.	  	 Non-Business Days
	  	71
	 	  	Section 13.4.	  	 Documentary Taxes
	  	71
	 	  	Section 13.5.	  	 Survival of Representations
	  	71
	 	  	Section 13.6.	  	 Survival of Indemnities
	  	71
	 	  	Section 13.7.	  	 Sharing of Set-Off
	  	71
	 	  	Section 13.8.	  	 Notices
	  	72
	 	  	Section 13.9.	  	 Counterparts
	  	72
	 	  	Section 13.10.	  	 Successors and Assigns
	  	73
	 	  	Section 13.11.	  	 Participants
	  	73
	 	  	Section 13.12.	  	 Assignments
	  	73
	 	  	Section 13.13.	  	 Amendments
	  	74
	 	  	Section 13.14.	  	 Headings
	  	75
	 	  	Section 13.15.	  	 Costs and Expenses; Indemnification
	  	75
	 	  	Section 13.16.	  	 Set-off
	  	76
	 	  	Section 13.17.	  	 Entire Agreement
	  	77
	 	  	Section 13.18.	  	 Governing Law
	  	77
	 	  	Section 13.19.	  	 Severability of Provisions
	  	77
	 	  	Section 13.20.	  	 Excess Interest
	  	77
	 	  	Section 13.21.	  	 Construction
	  	78
	 	  	Section 13.22.	  	 Lender’s Obligations Several
	  	78
	 	  	Section 13.23.	  	 Submission to Jurisdiction; Waiver of Jury Trial
	  	78
	 	  	Section 13.24.	  	 Confidentiality
	  	78
			
	 Signature Page
	  	 	  	S-1

  

					
	 EXHIBIT A
	  	—	  	 Notice of Payment Request

	 EXHIBIT B
	  	—	  	 Notice of Borrowing

	 EXHIBIT C
	  	—	  	 Notice of Continuation/Conversion

	 EXHIBIT D-1
	  	—	  	 Term Note

	 EXHIBIT D-2
	  	—	  	 Revolving Note

	 EXHIBIT E
	  	—	  	 Compliance Certificate

	 EXHIBIT F
	  	—	  	 Additional Guarantor Supplement

	 EXHIBIT G
	  	—	  	 Assignment and Acceptance

	 SCHEDULE 1
	  	—	  	 Commitments

	 SCHEDULE 6.2
	  	—	  	 Subsidiaries

	 SCHEDULE 6.5
	  	—	  	 Financial Reports

	 SCHEDULE 6.6
	  	—	  	 No Material Adverse Change

	 SCHEDULE 6.8
	  	—	  	 Trademarks, Franchises and Licenses


  

 -iv- 









					
	 SCHEDULE 6.9
	  	—	  	 Governmental Authority and Licensing

	 SCHEDULE 6.11
	  	—	  	 Litigation and Other Controversies

	 SCHEDULE 6.12
	  	—	  	 Taxes

	 SCHEDULE 6.14
	  	—	  	 Affiliate Transactions

	 SCHEDULE 6.16
	  	—	  	 ERISA

	 SCHEDULE 6.17
	  	—	  	 Compliance With Laws

	 SCHEDULE 6.20
	  	—	  	 No Broker Fees

	 SCHEDULE 8.7
	  	—	  	 Borrowings and Guaranties

	 SCHEDULE 8.10
	  	—	  	 Mergers, Consolidations and Sales


  

 -v- 








 CREDIT AGREEMENT 
  
 This Credit Agreement is entered into as of February 20, 2004, by and among
NOBEL LEARNING COMMUNITIES, INC., a Delaware corporation (the “Borrower”), the direct and indirect Subsidiaries of the Borrower from time to time party to this Agreement,
as Guarantors, the several financial institutions from time to time party to this Agreement, as Lenders, and HARRIS TRUST AND SAVINGS BANK, as Administrative Agent as
provided herein. All capitalized terms used herein without definition shall have the same meanings herein as such terms are defined in Section 5.1 hereof. 
  
 PRELIMINARY STATEMENT 
  
 The Borrower has requested, and the Lenders have agreed to extend, certain credit facilities on the terms and conditions of this Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual
agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
  
 SECTION 1. THE CREDIT FACILITIES. 

 
 Section 1.1. Term Loan Commitments. Subject to the terms and
conditions hereof, each Lender, by its acceptance hereof, severally agrees to make a loan (individually a “Term Loan” and collectively for all the Lenders the “Term Loans”) in U.S. Dollars to the Borrower in the
amount of such Lender’s Term Loan Commitment. The Term Loans shall be advanced in a single Borrowing on the Closing Date and shall be made ratably by the Lenders in proportion to their respective Term Loan Percentages, at which time the Term
Loan Commitments shall expire. As provided in Section 1.6(a) hereof, the Borrower may elect that the Term Loans be outstanding as Base Rate Loans or Eurodollar Loans. No amount repaid or prepaid on any Term Loan may be borrowed again. 
  
 Section 1.2. Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender, by its acceptance hereof, severally agrees to make a loan or loans (individually a “Revolving Loan” and collectively the “Revolving Loans”) in U.S. Dollars to the Borrower from time
to time on a revolving basis up to the amount of such Lender’s Revolving Credit Commitment, subject to any reductions thereof pursuant to the terms hereof, before the Revolving Credit Termination Date. The sum of the aggregate principal amount
of Revolving Loans and L/C Obligations at any time outstanding shall not exceed the Revolving Credit Commitments in effect at such time. Each Borrowing of Revolving Loans shall be made ratably by the Lenders in proportion to their respective
Revolver Percentages. As provided in Section 1.6(a) hereof, the Borrower may elect that each Borrowing of Revolving Loans be either Base Rate Loans or Eurodollar Loans. Revolving Loans may be repaid and the principal amount thereof reborrowed before
the Revolving Credit Termination Date, subject to the terms and conditions hereof. 







 Section 1.3. Letters of Credit. (a) General Terms. Subject to the terms and conditions
hereof, as part of the Revolving Credit, the L/C Issuer shall issue standby letters of credit (each a “Letter of Credit”) for the account of Borrower in an aggregate undrawn face amount up to the L/C Sublimit. Each Letter of Credit
shall be issued by the L/C Issuer, but each Lender shall be obligated to reimburse the L/C Issuer for such Lender’s Revolver Percentage of the amount of each drawing thereunder and, accordingly, each Letter of Credit shall constitute usage of
the Revolving Credit Commitment of each Lender pro rata in an amount equal to its Revolver Percentage of the L/C Obligations then outstanding. 
  
 (b) Applications. At any time before the Revolving Credit Termination Date, the L/C Issuer shall, at the request of the Borrower, issue one or more
Letters of Credit in U.S. Dollars, in a form satisfactory to the L/C Issuer, with expiration dates no later than the earlier of 12 months from the date of issuance (or which are cancelable not later than 12 months from the date of issuance and each
renewal) or 30 days prior to the Revolving Credit Termination Date, in an aggregate face amount as set forth above, upon the receipt of an application duly executed by the Borrower and, if such Letter of Credit is for the account of one of the
Guarantors, such Guarantor for the relevant Letter of Credit in the form then customarily prescribed by the L/C Issuer for the Letter of Credit requested (each an “Application”). Notwithstanding anything contained in any Application
to the contrary: (i) the Borrower shall pay fees in connection with each Letter of Credit as set forth in Section 2.1 hereof, (ii) except as otherwise provided in Section 1.9 hereof, in the absence of an Event of Default, the L/C Issuer will not
call for the funding by the Borrower of any amount under a Letter of Credit before being presented with a drawing thereunder, and (iii) if the L/C Issuer is not timely reimbursed for the amount of any drawing under a Letter of Credit on the date
such drawing is paid, the Borrower’s obligation to reimburse the L/C Issuer for the amount of such drawing shall bear interest (which the Borrower hereby promises to pay) from and after the date such drawing is paid at a rate per annum equal to
the sum of the Applicable Margin plus the Base Rate from time to time in effect (computed on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed). If the L/C Issuer issues any Letter of Credit with an
expiration date that is automatically extended unless the L/C Issuer gives notice that the expiration date will not so extend beyond its then scheduled expiration date, unless the Required Lenders instruct the L/C Issuer otherwise, the L/C Issuer
will give such notice of non-renewal before the time necessary to prevent such automatic extension if before such required notice date: (i) the expiration date of such Letter of Credit if so extended would be after the Revolving Credit Termination
Date, (ii) the Revolving Credit Commitments have been terminated, or (iii) a Default or an Event of Default exists and the Administrative Agent, at the request or with the consent of the Required Lenders, has given the L/C Issuer instructions not to
so permit the extension of the expiration date of such Letter of Credit. The L/C Issuer agrees to issue amendments to the Letter(s) of Credit increasing the amount, or extending the expiration date, thereof at the request of the Borrower subject to
the conditions of Section 7 hereof and the other terms of this Section 1.3. 
  
 (c) The Reimbursement Obligations. Subject to Section 1.3(b) hereof, the obligation of the Borrower to reimburse the L/C Issuer for all drawings under a Letter of Credit (a “Reimbursement
Obligation”) shall be governed by the Application related to such Letter of Credit, except that reimbursement shall be made by no later than 12:00 Noon (Chicago time) on the date when each drawing is to be paid if the Borrower has been
informed of such drawing by the L/C 
  

 -2- 








 Issuer on or before 11:30 a.m. (Chicago time) on the date when such drawing is to be paid or, if notice of such drawing
is given to the Borrower after 11:30 a.m. (Chicago time) on the date when such drawing is to be paid, by the end of such day, in immediately available funds at the Administrative Agent’s principal office in Chicago, Illinois or such other
office as the Administrative Agent may designate in writing to the Borrower (who shall thereafter cause to be distributed to the L/C Issuer such amount(s) in like funds). If the Borrower does not make any such reimbursement payment on the date due
and the Participating Lenders fund their participations therein in the manner set forth in Section 1.3(d) below, then all payments thereafter received by the Administrative Agent in discharge of any of the relevant Reimbursement Obligations shall be
distributed in accordance with Section 1.3(d) below. 
  
 (d)
The Participating Interests. Each Lender (other than the Lender acting as L/C Issuer in issuing the relevant Letter of Credit), by its acceptance hereof, severally agrees to purchase from the L/C Issuer, and the L/C Issuer hereby agrees to
sell to each such Lender (a “Participating Lender”), an undivided percentage participating interest (a “Participating Interest”), to the extent of its Revolver Percentage, in each Letter of Credit issued by, and
each Reimbursement Obligation owed to, the L/C Issuer. Upon any failure by the Borrower to pay any Reimbursement Obligation at the time required on the date the related drawing is to be paid, as set forth in Section 1.3(c) above, or if the L/C
Issuer is required at any time to return to the Borrower or to a trustee, receiver, liquidator, custodian or other Person any portion of any payment of any Reimbursement Obligation, each Participating Lender shall, not later than the Business Day it
receives a certificate in the form of Exhibit A hereto from the L/C Issuer (with a copy to the Administrative Agent) to such effect, if such certificate is received before 1:00 p.m. (Chicago time), or not later than 1:00 p.m. (Chicago time) the
following Business Day, if such certificate is received after such time, pay to the Administrative Agent for the account of the L/C Issuer an amount equal to such Participating Lender’s Revolver Percentage of such unpaid or recaptured
Reimbursement Obligation together with interest on such amount accrued from the date the related payment was made by the L/C Issuer to the date of such payment by such Participating Lender at a rate per annum equal to: (i) from the date the related
payment was made by the L/C Issuer to the date 2 Business Days after payment by such Participating Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from the date 2 Business Days after the date such payment is due from such
Participating Lender to the date such payment is made by such Participating Lender, the Base Rate in effect for each such day. Each such Participating Lender shall thereafter be entitled to receive its Revolver Percentage of each payment received in
respect of the relevant Reimbursement Obligation and of interest paid thereon, with the L/C Issuer retaining its Revolver Percentage thereof as a Lender hereunder. The several obligations of the Participating Lenders to the L/C Issuer under this
Section 1.3 shall be absolute, irrevocable, and unconditional under any and all circumstances whatsoever and shall not be subject to any set-off, counterclaim or defense to payment which any Participating Lender may have or have had against the
Borrower, the L/C Issuer, the Administrative Agent, any Lender or any other Person whatsoever. Without limiting the generality of the foregoing, such obligations shall not be affected by any Default or Event of Default or by any reduction or
termination of any Commitment of any Lender, and each payment by a Participating Lender under this Section 1.3 shall be made without any offset, abatement, withholding or reduction whatsoever. 
  

 -3- 








 (e) Indemnification. The Participating Lenders shall, to the extent of their respective Revolver
Percentages, indemnify the L/C Issuer (to the extent not reimbursed by the Borrower) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from the L/C
Issuer’s gross negligence or willful misconduct) that the L/C Issuer may suffer or incur in connection with any Letter of Credit issued by it. The obligations of the Participating Lenders under this Section 1.3(e) and all other parts of this
Section 1.3 shall survive termination of this Agreement and of all Applications, Letters of Credit, and all drafts and other documents presented in connection with drawings thereunder. 
  
 (f) Manner of Requesting a Letter of Credit. The Borrower shall provide at least five (5) Business Days’ (or
such shorter period of time then agreed to in writing by the Administrative Agent) advance written notice to the Administrative Agent of each request for the issuance of a Letter of Credit, such notice in each case to be accompanied by an
Application for such Letter of Credit properly completed and executed by the Borrower and, in the case of an extension or an increase in the amount of a Letter of Credit, a written request therefor, in a form acceptable to the Administrative Agent
and the L/C Issuer, in each case, together with the fees called for by this Agreement. The Administrative Agent shall promptly notify the L/C Issuer of the Administrative Agent’s receipt of each such notice and the L/C Issuer shall promptly
notify the Administrative Agent and the Lenders of the issuance of the Letter of Credit so requested. 
  
 Section 1.4. Applicable Interest Rates. (a) Base Rate Loans. Each Base Rate Loan made or maintained by a Lender shall bear interest during
each Interest Period it is outstanding (computed on the basis of a year of 365 or 366 days, as the case may be, and the actual days elapsed) on the unpaid principal amount thereof from the date such Loan is advanced or continued, or created by
conversion from a Eurodollar Loan, until maturity (whether by acceleration or otherwise) at a rate per annum equal to the sum of the Applicable Margin plus the Base Rate from time to time in effect, payable on the last day of its Interest Period and
at maturity (whether by acceleration or otherwise). 
  
 “Base Rate” means for any day the greater of: (i) the rate of interest announced or otherwise established by the Administrative Agent from time to time as its prime commercial rate as in effect on such day, with any change
in the Base Rate resulting from a change in said prime commercial rate to be effective as of the date of the relevant change in said prime commercial rate (it being acknowledged and agreed that such rate may not be the Administrative Agent’s
best or lowest rate) and (ii) the sum of (x) the rate determined by the Administrative Agent to be the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to the Administrative Agent at approximately
10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) by two or more Federal funds brokers selected by the Administrative Agent for sale to
the Administrative Agent at face value of Federal funds in the secondary market in an amount equal or comparable to the principal amount owed to the Administrative Agent for which such rate is being determined, plus (y) 1/2 of 1%. 

 
 (b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a
Lender shall bear interest during each Interest Period it is outstanding (computed on the basis of a year of 360 
  

 -4- 








 days and actual days elapsed) on the unpaid principal amount thereof from the date such Loan is advanced or continued, or
created by conversion from a Base Rate Loan, until maturity (whether by acceleration or otherwise) at a rate per annum equal to the sum of the Applicable Margin plus the Adjusted LIBOR applicable for such Interest Period, payable on the last day of
the Interest Period and at maturity (whether by acceleration or otherwise), and, if the applicable Interest Period is longer than three months, on each day occurring every three months after the commencement of such Interest Period. 
  
 “Adjusted LIBOR” means, for any Borrowing of Eurodollar
Loans, a rate per annum determined in accordance with the following formula: 
  

							
	Adjusted LIBOR	  	=	  	 LIBOR

	  	 
	 	  	 	  	1 - Eurodollar Reserve Percentage	  	 

  
 “Eurodollar
Reserve Percentage” means, for any Borrowing of Eurodollar Loans, the daily average for the applicable Interest Period of the maximum rate, expressed as a decimal, at which reserves (including, without limitation, any supplemental,
marginal, and emergency reserves) are imposed during such Interest Period by the Board of Governors of the Federal Reserve System (or any successor) on “eurocurrency liabilities”, as defined in such Board’s Regulation D (or in
respect of any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Loans is determined or any category of extensions of credit or other assets that include loans by non-United States offices of
any Lender to United States residents), subject to any amendments of such reserve requirement by such Board or its successor, taking into account any transitional adjustments thereto. For purposes of this definition, the Eurodollar Loans shall be
deemed to be “eurocurrency liabilities” as defined in Regulation D without benefit or credit for any prorations, exemptions or offsets under Regulation D. 
  
 “LIBOR” means, for an Interest Period for a Borrowing of Eurodollar Loans, (a) the LIBOR Index Rate for
such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S.
Dollars in immediately available funds are offered to the Administrative Agent at 11:00 a.m. (London, England time) 2 Business Days before the beginning of such Interest Period by 3 or more major banks in the interbank eurodollar market selected by
the Administrative Agent for delivery on the first day of and for a period equal to such Interest Period and in an amount equal or comparable to the principal amount of the Eurodollar Loan scheduled to be made by the Administrative Agent as part of
such Borrowing. 
  
 “LIBOR Index Rate” means, for
any Interest Period, the rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a period equal to such Interest Period, which appears on the Telerate Page 3750
as of 11:00 a.m. (London, England time) on the day 2 Business Days before the commencement of such Interest Period. 
  

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 “Telerate Page 3750” means the display designated as “Page 3750” on the
Telerate Service (or such other page as may replace Page 3750 on that service or such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’
Association Interest Settlement Rates for U.S. Dollar deposits). 
  
 (c) Rate Determinations. The Administrative Agent shall determine each interest rate applicable to the Loans and the Reimbursement Obligations hereunder, and its determination thereof shall be conclusive and binding except in the
case of manifest error. 
  
 Section 1.5. Minimum Borrowing
Amounts; Maximum Eurodollar Loans. Each Borrowing of Base Rate Loans advanced under a Credit shall be in an amount not less than $50,000. Each Borrowing of Eurodollar Loans advanced, continued or converted under a Credit shall be in an amount
equal to $1,000,000 or such greater amount which is an integral multiple of $500,000. Without the Administrative Agent’s consent, there shall not be more than five Borrowings of Eurodollar Loans outstanding hereunder at any one time. 

  
 Section 1.6. Manner of Borrowing Loans and Designating
Applicable Interest Rates. (a) Notice to the Administrative Agent. The Borrower shall give notice to the Administrative Agent by no later than 10:00 a.m. (Chicago time): (i) at least 3 Business Days (or such shorter period of time then
agreed to in writing by the Administrative Agent) before the date on which the Borrower requests the Lenders to advance a Borrowing of Eurodollar Loans and (ii) on the date the Borrower requests the Lenders to advance a Borrowing of Base Rate Loans.
The Loans included in each Borrowing shall bear interest initially at the type of rate specified in such notice of a new Borrowing. Thereafter, subject to the terms and conditions hereof, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Borrowing or, subject to Section 1.5’s minimum amount requirement for each outstanding Borrowing, a portion thereof, as follows: (i) if such Borrowing is of Eurodollar Loans, on the last day of
the Interest Period applicable thereto, the Borrower may continue part or all of such Borrowing as Eurodollar Loans or convert part or all of such Borrowing into Base Rate Loans or (ii) if such Borrowing is of Base Rate Loans, on any Business Day,
the Borrower may convert all or part of such Borrowing into Eurodollar Loans for an Interest Period or Interest Periods specified by the Borrower. The Borrower shall give all such notices requesting the advance, continuation or conversion of a
Borrowing to the Administrative Agent by telephone or telecopy (which notice shall be irrevocable once given and, if by telephone, shall be promptly confirmed in writing), substantially in the form attached hereto as Exhibit B (Notice of Borrowing)
or Exhibit C (Notice of Continuation/Conversion), as applicable, or in such other form acceptable to the Administrative Agent. Notice of the continuation of a Borrowing of Eurodollar Loans for an additional Interest Period or of the conversion of
part or all of a Borrowing of Base Rate Loans into Eurodollar Loans must be given by no later than 10:00 a.m. (Chicago time) at least 3 Business Days (or such shorter period of time then agreed to in writing by the Administrative Agent) before the
date of the requested continuation or conversion. All such notices concerning the advance, continuation or conversion of a Borrowing shall specify the date of the requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced, continued or converted, the type of Loans to comprise such new, continued or converted Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the Interest Period
applicable thereto. The Borrower agrees that the 
  

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 Administrative Agent may rely on any such telephonic or telecopy notice given by any person the Administrative Agent in
good faith believes is an Authorized Representative without the necessity of independent investigation, and in the event any such notice by telephone conflicts with any written confirmation such telephonic notice shall govern if the Administrative
Agent has acted in reliance thereon. 
  
 (b) Notice to the
Lenders. The Administrative Agent shall give prompt telephonic or telecopy notice to each Lender of any notice from the Borrower received pursuant to Section 1.6(a) above and, if such notice requests the Lenders to make Eurodollar Loans, the
Administrative Agent shall give notice to the Borrower and each Lender by like means of the interest rate applicable thereto promptly after the Administrative Agent has made such determination. 
  
 (c) Borrower’s Failure to Notify; Automatic Continuations and
Conversions. Any outstanding Borrowing of Base Rate Loans shall automatically be continued for an additional Interest Period on the last day of its then current Interest Period unless the Borrower has notified the Administrative Agent within the
period required by Section 1.6(a) that the Borrower intends to convert such Borrowing, subject to Section 7.1 hereof, into a Borrowing of Eurodollar Loans or such Borrowing is prepaid in accordance with Section 1.9(a). If the Borrower fails to give
notice pursuant to Section 1.6(a) above of the continuation or conversion of any outstanding principal amount of a Borrowing of Eurodollar Loans before the last day of its then current Interest Period within the period required by Section 1.6(a) or,
whether or not such notice has been given, one or more of the conditions set forth in Section 7.1 for the continuation or conversion of a Borrowing of Eurodollar Loans would not be satisfied, and such Borrowing is not prepaid in accordance with
Section 1.9(a), such Borrowing shall automatically be converted into a Borrowing of Base Rate Loans. In the event the Borrower fails to give notice pursuant to Section 1.6(a) above of a Borrowing equal to the amount of a Reimbursement Obligation and
has not notified the Administrative Agent by 12:00 noon (Chicago time) on the day such Reimbursement Obligation becomes due that it intends to repay such Reimbursement Obligation through funds not borrowed under this Agreement, the Borrower shall be
deemed to have requested a Borrowing of Base Rate Loans under the Revolving Credit on such day in the amount of the Reimbursement Obligation then due, which Borrowing shall be applied to pay the Reimbursement Obligation then due. 
  
 (d) Disbursement of Loans. Not later than 1:00 p.m. (Chicago time) on
the date of any requested advance of a new Borrowing, subject to Section 7 hereof, each Lender shall make available its Loan comprising part of such Borrowing in funds immediately available at the principal office of the Administrative Agent in
Chicago, Illinois. The Administrative Agent shall make the proceeds of each new Borrowing available to the Borrower at the Administrative Agent’s principal office in Chicago, Illinois, by depositing such proceeds to the credit of the
Borrower’s operating account maintained with the Administrative Agent or as the Borrower and the Administrative Agent may otherwise agree. 
  
 (e) Administrative Agent Reliance on Lender Funding. Unless the Administrative Agent shall have been notified by a Lender prior to (or, in the case
of a Borrowing of Base Rate Loans, by 1:00 p.m. (Chicago time) on) the date on which such Lender is scheduled to make 
  

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 payment to the Administrative Agent of the proceeds of a Loan (which notice shall be effective upon receipt) that such
Lender does not intend to make such payment, the Administrative Agent may assume that such Lender has made such payment when due and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to the
Borrower the proceeds of the Loan to be made by such Lender and, if any Lender has not in fact made such payment to the Administrative Agent, such Lender shall, on demand, pay to the Administrative Agent the amount made available to the Borrower
attributable to such Lender together with interest thereon in respect of each day during the period commencing on the date such amount was made available to the Borrower and ending on (but excluding) the date such Lender pays such amount to the
Administrative Agent at a rate per annum equal to: (i) from the date the related advance was made by the Administrative Agent to the date 2 Business Days after payment by such Lender is due hereunder, the Federal Funds Rate for each such day and
(ii) from the date 2 Business Days after the date such payment is due from such Lender to the date such payment is made by such Lender, the Base Rate in effect for each such day. If such amount is not received from such Lender by the Administrative
Agent immediately upon demand, the Borrower will, on demand, repay to the Administrative Agent the proceeds of the Loan attributable to such Lender with interest thereon at a rate per annum equal to the interest rate applicable to the relevant Loan,
but without such payment being considered a payment or prepayment of a Loan under Section 1.12 hereof so that the Borrower will have no liability under such Section with respect to such payment. 
  
 Section 1.7. Interest Periods. As provided in Section 1.6(a) hereof,
at the time of each request to advance, continue or create by conversion a Borrowing of Eurodollar Loans, the Borrower shall select an Interest Period applicable to such Loans from among the available options. The term “Interest
Period” means the period commencing on the date a Borrowing of Loans is advanced, continued or created by conversion and ending: (a) in the case of Base Rate Loans, on the last day of the calendar quarter (i.e., the last day of
March, June, September or December, as applicable) in which such Borrowing is advanced, continued or created by conversion (or on the last day of the following calendar quarter if such Loan is advanced, continued or created by conversion on the last
day of a calendar quarter), and (b) in the case of a Eurodollar Loan, 1, 2, 3 or 6 months thereafter; provided, however, that: 
  
 (i) any Interest Period for a Borrowing of Revolving Loans consisting of Base Rate Loans that otherwise would end after the Revolving
Credit Termination Date shall end on the Revolving Credit Termination Date, and any Interest Period for a Borrowing of Term Loans consisting of Base Rate Loans that otherwise would end after the final maturity date of the Term Loans shall end on the
final maturity date of the Term Loans; 
  
 (ii)
no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Revolving Credit Termination Date, and no Interest Period with respect to any portion of the Term Loans shall extend beyond the final maturity date of the
Term Loans; 
  
 (iii) no Interest Period with
respect to any portion of the Term Loans consisting of Eurodollar Loans shall extend beyond a date on which the Borrower is 
  

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 required to make a scheduled payment of principal on the Term Loans, unless the sum of (a) the aggregate
principal amount of Term Loans that are Base Rate Loans plus (b) the aggregate principal amount of Term Loans that are Eurodollar Loans with Interest Periods expiring on or before such date equals or exceeds the principal amount to be paid on the
Term Loans on such payment date; 
  
 (iv)
whenever the last day of any Interest Period would otherwise be a day that is not a Business Day, the last day of such Interest Period shall be extended to the next succeeding Business Day, provided that, if such extension would cause the last day
of an Interest Period for a Borrowing of Eurodollar Loans to occur in the following calendar month, the last day of such Interest Period shall be the immediately preceding Business Day; and 
  
 (v) for purposes of determining an Interest Period for a
Borrowing of Eurodollar Loans, a month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month; provided, however, that if there is no numerically corresponding day in
the month in which such an Interest Period is to end or if such an Interest Period begins on the last Business Day of a calendar month, then such Interest Period shall end on the last Business Day of the calendar month in which such Interest Period
is to end. 
  
 Section 1.8. Maturity of Loans. (a)
Scheduled Payments of Term Loans. The Borrower shall make principal payments on the Term Loans in installments of $500,000 each on the last day of each January, April, July and October in each year, commencing on April 30, 2004, it being
agreed that the final payment of both principal and interest not sooner paid on the Term Loans shall be due and payable on February 15, 2009, the final maturity thereof. Each such principal payment shall be applied to the Lenders holding the Term
Loans pro rata based upon their Term Loan Percentages. 
  
 (b)
Revolving Loans. Each Revolving Loan, both for principal and interest not sooner paid, shall mature and become due and payable by the Borrower on the Revolving Credit Termination Date. 
  
 Section 1.9. Prepayments. (a) Optional. The Borrower may prepay
in whole or in part (but, if in part, then: (i) if such Borrowing is of Base Rate Loans, in an amount not less than $50,000, (ii) if such Borrowing is of Eurodollar Loans, in an amount not less than $500,000, and (iii) in each case, in an amount
such that the minimum amount required for a Borrowing pursuant to Section 1.5 hereof remains outstanding) any Borrowing of Eurodollar Loans at any time upon 3 Business Days prior notice by the Borrower to the Administrative Agent or, in the case of
a Borrowing of Base Rate Loans, notice delivered by the Borrower to the Administrative Agent no later than 10:00 a.m. (Chicago time) on the date of prepayment (or, in any case, such shorter period of time then agreed to by the Administrative Agent),
such prepayment to be made by the payment of the principal amount to be prepaid and, in the case of any Term Loans or Eurodollar Loans, accrued interest thereon to the date fixed for prepayment plus any amounts due the Lenders under Section 1.12
hereof. 
  

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 (b) Mandatory. (i) If the Borrower or any Subsidiary shall at any time or from time to time make
or agree to make a Disposition or shall suffer an Event of Loss with respect to any Property, then the Borrower shall promptly notify the Administrative Agent of such proposed Disposition or Event of Loss (including the amount of the estimated Net
Cash Proceeds to be received by the Borrower or such Subsidiary in respect thereof) and, promptly upon receipt by the Borrower or such Subsidiary of the Net Cash Proceeds of such Disposition or Event of Loss, the Borrower shall prepay the
Obligations in an aggregate amount equal to 100% of the amount of all such Net Cash Proceeds; provided that (x) so long as no Default or Event of Default then exists, this subsection shall not require any such prepayment with respect to Net
Cash Proceeds received on account of an Event of Loss so long as such Net Cash Proceeds are applied to replace or restore the relevant Property in accordance with the relevant Collateral Documents within six months following receipt of such Net Cash
Proceeds, and (y) this subsection shall not require any such prepayment with respect to Net Cash Proceeds received on account of Dispositions during any fiscal year of the Borrower not exceeding $150,000 in the aggregate so long as no Default or
Event of Default then exists. The amount of each such prepayment shall be applied, first to the outstanding Term Loans until paid in full and then to the Revolving Loans until paid in full and then to cash collateralize the Letters of Credit.
If the Administrative Agent or the Required Lenders so request (but subject to clause (x) above), all proceeds of Events of Loss being held by the Borrower for the replacement or restoration of Property as described in clause (x) above shall
be deposited with the Administrative Agent (or its agent) and held by it in the Collateral Account. So long as no Default or Event of Default exists, the Administrative Agent shall disburse amounts representing such proceeds from the Collateral
Account to or at the Borrower’s direction for application to or reimbursement for the costs of replacing, rebuilding or restoring such Property. 
  
 (ii) If after the Closing Date the Borrower or any Subsidiary shall issue new equity securities (whether common or preferred stock or otherwise), other
than equity securities issued to officers, directors and employees of the Borrower as compensation for bona fide services provided or to be provided to the Borrower by such persons and approved by the Borrower’s Board of Directors or the
Compensation Committee of the Borrower’s Board of Directors, as the case may be, the Borrower shall promptly notify the Administrative Agent of the estimated Net Cash Proceeds of such issuance to be received by or for the account of the
Borrower or such Subsidiary in respect thereof. Promptly upon receipt by the Borrower or such Subsidiary of Net Cash Proceeds of such issuance, the Borrower shall prepay first the outstanding Term Loans until paid in full and then the outstanding
Revolving Loans until paid in full and then cash collateralize the Letters of Credit, in an aggregate amount equal to 50% of the amount of such Net Cash Proceeds. The amount of each such prepayment shall be applied on a ratable basis among the
outstanding Loans of the several Lenders based on the principal amounts thereof. The Borrower acknowledges that its performance hereunder shall not limit the rights and remedies of the Lenders for any breach of Section 8.11 (Maintenance of
Subsidiaries) or Section 9.1(i) (Change of Control) hereof or any other terms of the Loan Documents. 
  
 (iii) If after the Closing Date the Borrower or any Subsidiary shall issue any Indebtedness for Borrowed Money, other than Indebtedness for Borrowed Money
permitted by Section 8.7(a)-(g) hereof, the Borrower shall promptly notify the Administrative Agent of the estimated Net Cash Proceeds of such issuance to be received by or for the account of the 
  

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 Borrower or such Subsidiary in respect thereof. Promptly upon receipt by the Borrower or such Subsidiary of Net Cash
Proceeds of such issuance, the Borrower shall prepay first the outstanding Term Loans until paid in full and then the outstanding Revolving Loans until paid in full and then cash collateralize the Letters of Credit, in an aggregate amount equal to
100% of the amount of such Net Cash Proceeds. The amount of each such prepayment shall be applied on a ratable basis among the outstanding Loans of the several Lenders based on the principal amounts thereof. The Borrower acknowledges that its
performance hereunder shall not limit the rights and remedies of the Lenders for any breach of Section 8.7 hereof or any other terms of the Loan Documents. 
  
 (iv) The Borrower shall, on each date the Revolving Credit Commitments are reduced pursuant to Section 1.13 hereof, prepay the Revolving Loans and, if
necessary, prefund the L/C Obligations by the amount, if any, necessary to reduce the sum of the aggregate principal amount of Revolving Loans and L/C Obligations then outstanding to the amount to which the Revolving Credit Commitments have been so
reduced. 
  
 (v) The Borrower shall, promptly upon receipt of any
proceeds from any repayment of the Philadelphia School Loan, prepay first the outstanding Term Loans until paid in full and then the outstanding Revolving Loans until paid in full and then cash collateralize the Letters of Credit, in an aggregate
amount equal to 100% of the amount of such proceeds. The amount of each such prepayment shall be applied on a ratable basis among the outstanding Loans of the several Lenders based on the principal amounts thereof. 
  
 (vi) Unless the Borrower otherwise directs, prepayments of Loans under this
Section 1.9(b) shall be applied first to Borrowings of Base Rate Loans until payment in full thereof with any balance applied to Borrowings of Eurodollar Loans in the order in which their Interest Periods expire. Each prepayment of Loans under this
Section 1.9(b) shall be made by the payment of the principal amount to be prepaid and, in the case of any Term Loans or Eurodollar Loans, accrued interest thereon to the date of prepayment together with any amounts due the Lenders under Section 1.12
hereof. Each prefunding of L/C Obligations shall be made in accordance with Section 9.4 hereof. 
  
 (c) Any amount of Revolving Loans paid or prepaid before the Revolving Credit Termination Date may, subject to the terms and conditions of this Agreement,
be borrowed, repaid and borrowed again. No amount of the Term Loans paid or prepaid may be reborrowed, and, in the case of any partial prepayment, such prepayment shall be applied to the remaining amortization payments on the relevant Loans in the
reverse order of maturity, beginning with the final payment on the Term Loans due on the final maturity date thereof. 
  

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 Section 1.10. Default Rate. Notwithstanding anything to the contrary contained herein, while any
Event of Default exists or after acceleration, the Borrower shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all Loans and Reimbursement Obligations, and letter of
credit fees at a rate per annum equal to: 
  
 (a)
for any Base Rate Loan, the sum of 2.0% plus the Applicable Margin plus the Base Rate from time to time in effect; 
  
 (b) for any Eurodollar Loan, the sum of 2.0% plus the rate of interest in effect thereon at the time of such default until the end of the
Interest Period applicable thereto, at which time such loans shall automatically convert to Base Rate Loans; 
  
 (c) for any Reimbursement Obligation, the sum of 2.0% plus the amounts due under Section 1.3 with respect to such Reimbursement
Obligation; and 
  
 (d) for any Letter of Credit,
the sum of 2.0% plus the letter of credit fee due under Section 2.1 with respect to such Letter of Credit; 
  
 provided, however, that in the absence of acceleration, any adjustments pursuant to this Section shall be made at the election of the Administrative Agent, acting at the request or with the consent of the
Required Lenders, with prior written notice to the Borrower. While any Event of Default exists or after acceleration, interest shall be paid on written demand of the Administrative Agent at the request or with the consent of the Required Lenders.

  
 Section 1.11. The Notes. (a) The Term Loan made to the
Borrower by a Lender shall be evidenced by a single promissory note of the Borrower issued to such Lender in the form of Exhibit D-1 hereto. Each such promissory note is hereinafter referred to as a “Term Note” and collectively such
promissory notes are referred to as the “Term Notes.” 
  
 (b) The Revolving Loans made to the Borrower by a Lender shall be evidenced by a single promissory note of the Borrower issued to such Lender in the form of Exhibit D-2 hereto. Each such promissory note is hereinafter
referred to as a “Revolving Note” and collectively such promissory notes are referred to as the “Revolving Notes.” 
  
 (c) Each Lender shall record on its books and records or on a schedule to its appropriate Note the amount of each Loan advanced, continued or converted by
it, all payments of principal and interest and the principal balance from time to time outstanding thereon, the type of such Loan, and, for any Eurodollar Loan, the Interest Period and the interest rate applicable thereto. The record thereof,
whether shown on such books and records of a Lender or on a schedule to the relevant Note, shall be prima facie evidence as to all such matters; provided, however, that the failure of any Lender to record any of the foregoing or any
error in any such record shall not limit or otherwise affect the obligation of the Borrower to repay all Loans made to it hereunder together with accrued interest thereon. At the request of any Lender and contemporaneously with such Lender tendering
to the Borrower the appropriate Note to be replaced, the Borrower shall furnish a new Note to such Lender to replace any outstanding Note. 
  

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 Section 1.12. Funding Indemnity. If any Lender shall incur any loss, cost or expense (including,
without limitation, any loss of profit, and any loss, cost or expense incurred by reason of the liquidation or re-employment of deposits or other funds acquired by such Lender to fund or maintain any Eurodollar Loan or the relending or reinvesting
of such deposits or amounts paid or prepaid to such Lender) as a result of: 
  
 (a) any payment, prepayment or conversion of a Eurodollar Loan on a date other than the last day of its Interest Period, 
  
 (b) any failure (because of a failure to meet the conditions of Section 7 or otherwise) by the Borrower to borrow or continue a Eurodollar
Loan, or to convert a Base Rate Loan into a Eurodollar Loan, on the date specified in a notice given pursuant to Section 1.6(a) hereof, 
  
 (c) any failure by the Borrower to make any payment of principal on any Eurodollar Loan when due (whether by acceleration or otherwise),
or 
  
 (d) any acceleration of the maturity of a
Eurodollar Loan as a result of the occurrence of any Event of Default hereunder, 
  
 then, upon the written demand of such Lender, the Borrower shall pay to such Lender such amount as will reimburse such Lender for such loss, cost or expense. If any Lender makes such a claim for compensation, it shall provide to the
Borrower, with a copy to the Administrative Agent, a certificate setting forth the amount of such loss, cost or expense in reasonable detail (including an explanation of the basis for and the computation of such loss, cost or expense) and the
amounts shown on such certificate shall be conclusive if reasonably determined. 
  
 Section 1.13. Commitment Terminations. (a) Optional Revolving Credit Terminations. The Borrower shall have the right at any time and from time to time, upon 5 Business Days prior written notice to the
Administrative Agent (or such shorter period of time agreed to by the Administrative Agent), to terminate the Revolving Credit Commitments without premium or penalty and in whole or in part, any partial termination to be (i) in an amount not less
than $1,000,000 or any greater amount which is an integral multiple thereof and (ii) allocated ratably among the Lenders in proportion to their respective Revolver Percentages, provided that the Revolving Credit Commitments may not be reduced to an
amount less than the sum of the aggregate principal amount of Revolving Loans and L/C Obligations then outstanding. Any termination of the Revolving Credit Commitments below the L/C Sublimit then in effect shall reduce the L/C Sublimit by a like
amount. The Administrative Agent shall give prompt notice to each Lender of any such termination of the Revolving Credit Commitments. 
  
 (b) Mandatory Revolving Credit Termination. The Revolving Credit Commitments shall ratably terminate by an amount equal to 100% of the amount of
any prepayment which would be required to be made on the Revolving Loans pursuant to Section 1.9(b)(i), (ii), (iii) or (v) hereof if the Revolving Credit were fully utilized by Borrowings of Revolving Loans at such time. 
  
 (c) Any termination of the Commitments pursuant to this Section 1.13 may not
be reinstated. 
  
 Section 1.14. Substitution of Lenders.
In the event (a) the Borrower receives a claim from any Lender for compensation under Section 10.3 or 13.1 hereof, (b) the Borrower receives notice from any Lender of any illegality pursuant to Section 10.1 hereof, (c) any Lender is in default in

  

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 any material respect with respect to its obligations under the Loan Documents, or (d) a Lender fails to consent to an
amendment or waiver requested under Section 13.13 hereof at a time when the Required Lenders have approved such amendment or waiver (any such Lender referred to in clause (a), (b), (c), or (d) above being hereinafter referred to as an
“Affected Lender”), the Borrower may, in addition to any other rights the Borrower may have hereunder or under applicable law, require, at its expense, any such Affected Lender to assign, at par plus accrued interest and fees,
without recourse, all of its interest, rights, and obligations hereunder (including all of its Commitments and the Loans and participation interests in Letters of Credit and other amounts at any time owing to it hereunder and the other Loan
Documents) to a commercial bank or other financial institution specified by the Borrower, provided that (i) such assignment shall not conflict with or violate any law, rule or regulation or order of any court or other governmental authority,
(ii) the Borrower shall have received the written consent of the Administrative Agent, which consent shall not be unreasonably withheld, conditioned or delayed to such assignment, (iii) the Borrower shall have paid to the Affected Lender all monies
(together with amounts due such Affected Lender under Section 1.12 hereof as if the Loans owing to it were prepaid rather than assigned) other than such principal owing to it hereunder, and (iv) the assignment is entered into in accordance with the
other requirements of Section 13.12 hereof (provided any assignment fees and reimbursable expenses due thereunder shall be paid by the Borrower). 
  
 SECTION 2. FEES. 
  

Section 2.1. Fees. (a) Revolving Credit Commitment Fee. The Borrower shall pay to the Administrative Agent for the ratable account of the
Lenders in accordance with their Revolver Percentages a commitment fee at the rate per annum equal to the Applicable Margin (computed on the basis of a year of 360 days and the actual number of days elapsed) on the average daily Unused Revolving
Credit Commitments. Such commitment fee shall be payable quarterly in arrears on the last day of each March, June, September, and December in each year (commencing on the first such date occurring after the date hereof) and on the Revolving Credit
Termination Date, unless the Revolving Credit Commitments are terminated in whole on an earlier date, in which event the commitment fee for the period to the date of such termination in whole shall be paid on the date of such termination.

  
 (b) Letter of Credit Fees. On the date of issuance or
extension, or increase in the amount, of any Letter of Credit pursuant to Section 1.3 hereof, the Borrower shall pay to the L/C Issuer for its own account an issuance fee equal to 0.125% of the face amount of (or of the increase in the face amount
of) such Letter of Credit. Quarterly in advance, on the first day of each January, April, July, and October, commencing on the first such date occurring after the date hereof, the Borrower shall pay to the Administrative Agent, for the ratable
benefit of the Lenders in accordance with their Revolver Percentages, a letter of credit fee at a rate per annum equal to the Applicable Margin (computed on the basis of a year of 360 days and the actual number of days elapsed) in effect during each
day of such quarter applied to the daily average face amount of Letters of Credit expected to be outstanding during such quarter, provided that the Lenders shall promptly return to the Borrower a ratable portion of the letter of credit fee
paid pursuant to this sentence with respect to any Letter of Credit (or portion of the stated amount thereof) which is cancelled prior to the termination (or reduction) date therefor which was 
  

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 assumed in calculating such payment in advance. In addition, the Borrower shall pay to the L/C Issuer for its own account
the L/C Issuer’s standard issuance, drawing, negotiation, amendment, and other administrative fees for each Letter of Credit as established by the L/C Issuer from time to time. 
  
 (c) Administrative Agent Fees. The Borrower shall pay to the Administrative Agent, for its own use and benefit, the
fees agreed to between the Administrative Agent and the Borrower in a commitment letter dated January 22, 2004 or as otherwise agreed to in writing between them. 
  
 (d) Audit Fees. The Borrower shall pay to the Administrative Agent for its own use and benefit charges for audits of
the Collateral performed by the Administrative Agent or its agents or representatives in such amounts as the Administrative Agent may from time to time request (the Administrative Agent acknowledging and agreeing that such charges shall be computed
in the same manner as it at the time customarily uses for the assessment of charges for similar collateral audits); provided, however, that in the absence of any Default and Event of Default, the Borrower shall not be required to pay the
Administrative Agent for more than one such audit per calendar year. 
  
 SECTION 3. PLACE AND APPLICATION OF PAYMENTS. 
  
 Section 3.1. Place and Application of Payments. All payments of principal of and interest on the Loans and the Reimbursement Obligations, and of
all other Obligations payable by the Borrower under this Agreement and the other Loan Documents, shall be made by the Borrower to the Administrative Agent by no later than 12:00 Noon (Chicago time) on the due date thereof at the office of the
Administrative Agent in Chicago, Illinois (or such other location as the Administrative Agent may designate to the Borrower) for the benefit of the Lender or Lenders entitled thereto. Any payments received after such time shall be deemed to have
been received by the Administrative Agent on the next Business Day. All such payments shall be made in U.S. Dollars, in immediately available funds at the place of payment, in each case without set-off or counterclaim. The Administrative Agent will
promptly thereafter cause to be distributed like funds relating to the payment of principal or interest on Loans and on Reimbursement Obligations in which the Lenders have purchased Participating Interests ratably to the Lenders and like funds
relating to the payment of any other amount payable to any Lender to such Lender, in each case to be applied in accordance with the terms of this Agreement. If the Administrative Agent causes amounts to be distributed to the Lenders in reliance upon
the assumption that the Borrower will make a scheduled payment and such scheduled payment is not so made, each Lender shall, on demand, repay to the Administrative Agent the amount distributed to such Lender together with interest thereon in respect
of each day during the period commencing on the date such amount was distributed to such Lender and ending on (but excluding) the date such Lender repays such amount to the Administrative Agent, at a rate per annum equal to: (i) from the date the
distribution was made to the date 2 Business Days after payment by such Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from the date 2 Business Days after the date such payment is due from such Lender to the date such
payment is made by such Lender, the Base Rate in effect for each such day. 
  

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 Anything contained herein to the contrary notwithstanding (including, without limitation, Section 1.9(b)
hereof), all payments and collections received in respect of the Obligations and all proceeds of the Collateral received, in each instance, by the Administrative Agent or any of the Lenders after acceleration of the final maturity of the Obligations
or termination of the Commitments as a result of an Event of Default shall be remitted to the Administrative Agent and distributed as follows: 
  
 (a) first, to the payment of any outstanding costs and expenses incurred by the Administrative Agent, and any security trustee therefor,
in monitoring, verifying, protecting, preserving or enforcing the Liens on the Collateral, in protecting, preserving or enforcing rights under the Loan Documents, and in any event including all costs and expenses of a character which the Borrower
has agreed to pay the Administrative Agent under Section 13.15 hereof (such funds to be retained by the Administrative Agent for its own account unless it has previously been reimbursed for such costs and expenses by the Lenders, in which event such
amounts shall be remitted to the Lenders to reimburse them for payments theretofore made to the Administrative Agent); 
  
 (b) second, to the payment of any outstanding interest and fees due under the Loan Documents to be allocated pro rata in accordance with
the aggregate unpaid amounts owing to each holder thereof; 
  
 (c) third, to the payment of principal on the Notes, unpaid Reimbursement Obligations, together with amounts to be held by the Administrative Agent as collateral security for any outstanding L/C Obligations pursuant
to Section 9.4 hereof (until the Administrative Agent is holding an amount of cash equal to the then outstanding amount of all such L/C Obligations), and Hedging Liability, the aggregate amount paid to, or held as collateral security for, the
Lenders and, in the case of Hedging Liability, their Affiliates to be allocated pro rata in accordance with the aggregate unpaid amounts owing to each holder thereof; 
  
 (d) fourth, to the payment of all other unpaid Obligations and all other indebtedness, obligations, and
liabilities of the Borrower and the Guarantors secured by the Loan Documents (including, without limitation, Funds Transfer and Deposit Account Liability) to be allocated pro rata in accordance with the aggregate unpaid amounts owing to each holder
thereof; and 
  
 (e) finally, to the Borrower or
whoever else may be lawfully entitled thereto. 
  
 Section 3.2.
Account Debit. The Borrower hereby irrevocably authorizes the Administrative Agent to charge any of the Borrower’s deposit accounts maintained with the Administrative Agent for the amounts from time to time necessary to pay any then due
Obligations; provided that the Borrower acknowledges and agrees that the Administrative Agent shall not be under an obligation to do so and the Administrative Agent shall not incur any liability to the Borrower or any other Person for the
Administrative Agent’s failure to do so. 
  

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 SECTION 4. GUARANTIES AND COLLATERAL. 
  
 Section 4.1. Guaranties. The payment and performance of the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability shall at all times be guaranteed by each Guarantor pursuant to Section 12 hereof or pursuant to one or more guaranty agreements in form and substance acceptable to the
Administrative Agent, as the same may be amended, modified or supplemented from time to time (individually a “Guaranty” and collectively the “Guaranties”); provided, however, that unless otherwise required by
the Administrative Agent or the Required Lenders during the existence of any Event of Default, a Foreign Subsidiary shall not be required to be a Guarantor hereunder if providing such Guaranty would cause an adverse effect on the Borrower’s
federal income tax liability.  
  
 Section 4.2.
Collateral. The Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability shall be secured by valid, perfected, and enforceable Liens on all right, title, and interest of the Borrower and each Guarantor in all of their
accounts, chattel paper, instruments, documents, general intangibles, letter-of-credit rights, supporting obligations, deposit accounts, investment property, inventory, equipment, fixtures, commercial tort claims, real estate and certain other
Property, whether now owned or hereafter acquired or arising, and all proceeds thereof; provided, however, that: (i) unless otherwise required by the Administrative Agent or the Required Lenders during the existence of any Default or Event of
Default, (x) Liens on demand deposit accounts other than payroll accounts maintained by the Borrower and the Guarantors in proximity to their operations need not be perfected (unless such perfection is required pursuant to the terms of Section
8.23(a) hereof) provided that the total amount on deposit in such accounts at any one time not so perfected shall not exceed $1,800,000 (or such other amount as is determined by the Administrative Agent) in the aggregate, (y) Liens on payroll
accounts maintained by the Borrower and the Guarantors need not be perfected provided the total amount on deposit at any time does not exceed the current amount of their payroll obligations and (z) Liens on vehicles which are subject to a
certificate of title law need not be perfected provided that the total value of such property at any one time not so perfected shall not exceed $50,000 in the aggregate, (ii) unless otherwise required by the Administrative Agent or the Required
Lenders during the existence of any Event of Default, Liens on the Voting Stock of a Foreign Subsidiary which, if granted, would cause an adverse effect on the Borrower’s federal income tax liability shall be limited to 66% of the total
outstanding Voting Stock of such Foreign Subsidiary, and (iii) unless otherwise required by the Administrative Agent or the Required Lenders during the existence of any Event of Default, Liens need not be granted on the assets of a Foreign
Subsidiary which, if granted, would cause an adverse effect on the Borrower’s federal income tax liability. The Borrower acknowledges and agrees that the Liens on the Collateral shall be granted to the Administrative Agent for the benefit of
the holders of the Obligations, the Hedging Liability, and the Funds Transfer and Deposit Account Liability and shall be valid and perfected first priority Liens subject, however, to the proviso appearing at the end of the preceding sentence and to
Liens permitted by Section 8.8 hereof, in each case pursuant to one or more Collateral Documents from such Persons, each in form and substance satisfactory to the Administrative Agent. 
  
 Section 4.3. Liens on Real Property. In the event that the Borrower or any Guarantor owns or hereafter
acquires any real property, the Borrower shall, or shall cause such Guarantor 
  

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 to, execute and deliver to the Administrative Agent a mortgage or deed of trust acceptable in form and substance to the
Administrative Agent for the purpose of granting to the Administrative Agent (or a security trustee therefor) a Lien on such real property to secure the Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability, shall pay all
taxes, costs, and expenses incurred by the Administrative Agent in recording such mortgage or deed of trust, and shall supply to the Administrative Agent at the Borrower’s cost and expense a survey, environmental report, hazard insurance
policy, appraisal report, and a mortgagee’s policy of title insurance from a title insurer acceptable to the Administrative Agent insuring the validity of such mortgage or deed of trust and its status as a first Lien (subject to Liens permitted
by this Agreement) on the real property encumbered thereby and such other instrument, documents, certificates, and opinions reasonably required by the Administrative Agent in connection therewith, provided that, unless otherwise explicitly
agreed by the Borrower and the Administrative Agent, to the extent that the Administrative Agent has not required the delivery of any survey, environmental report or appraisal report prior to the Closing Date with respect to any property owned by
the Borrower on the Closing Date and subject to the Lien of the Mortgages, the Administrative Agent will allow the Borrower 60 days to deliver any such survey, environmental report or appraisal report that it may request with respect to such
properties after the Closing Date. 
  
 Section 4.4. Further
Assurances. The Borrower agrees that it shall, and shall cause each Guarantor to, from time to time at the request of the Administrative Agent or the Required Lenders, execute and deliver such documents and do such acts and things as the
Administrative Agent or the Required Lenders may reasonably request in order to provide for or perfect or protect such Liens on the Collateral. In the event the Borrower or any Guarantor forms any other Subsidiary after the date hereof, except as
otherwise provided in Sections 4.1 and 4.2 above, the Borrower shall promptly upon such formation cause such newly formed or acquired Subsidiary to execute a Guaranty and such Collateral Documents as the Administrative Agent may then require, and
the Borrower shall also deliver to the Administrative Agent, or cause such Subsidiary to deliver to the Administrative Agent, at the Borrower’s cost and expense, such other instruments, documents, certificates, and opinions reasonably required
by the Administrative Agent in connection therewith. 
  
 Section 4.5. Collections. The Borrower shall promptly, but in any event within 60 days after the Closing Date, make arrangements (including the opening of a central collections account with the Administrative Agent) whereby all cash
proceeds of the Collateral of the Borrower and each Subsidiary are required to be deposited at a frequency acceptable to the Administrative Agent into one or more accounts maintained by the Borrower or any of its Subsidiaries with the Administrative
Agent or with other financial institutions selected by the Borrower and acceptable to the Administrative Agent, pursuant to arrangements acceptable to the Administrative Agent under which the balance of collected funds standing on deposit in such
accounts maintained with such other financial institutions are transmitted to one or more collections accounts at the Administrative Agent, except to the extent agreed by the Borrower and the Administrative Agent with respect to certain payroll and
demand deposit accounts of the Borrower and its Subsidiaries. 
  

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 SECTION 5. DEFINITIONS; INTERPRETATION.

  
 Section 5.1. Definitions. The following terms when
used herein shall have the following meanings: 
  
 “Adjusted LIBOR” is defined in Section 1.4(b) hereof. 
  
 “Administrative Agent” means Harris Trust and Savings Bank and any successor pursuant to Section 11.7 hereof. 
  

“Affiliate” means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with,
another Person. A Person shall be deemed to control another Person for purposes of this definition if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the other Person,
whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise; provided that, in any event for purposes of this definition, any Person that owns, directly or indirectly, 10% or more of
the securities having the ordinary voting power for the election of directors or governing body of a corporation or 10% or more of the partnership or other ownership interest of any other Person (other than as a limited partner of such other Person)
will be deemed to control such corporation or other Person. 
  
 “Agreement” means this Credit Agreement, as the same may be amended, modified, restated or supplemented from time to time pursuant to the terms hereof. 
  
 “Applicable Margin” means, with respect to Loans, Reimbursement Obligations, and the commitment fees and
letter of credit fees payable under Section 2.1 hereof, until the first Pricing Date, the rates per annum shown opposite Level II below, and thereafter from one Pricing Date to the next the Applicable Margin means the rates per annum determined in
accordance with the following schedule: 
  

																		
	 LEVEL

	  	 TOTAL FUNDED
 DEBT/EBITDA
 RATIO FOR
SUCH
 PRICING DATE

	  	 APPLICABLE
 MARGIN FOR BASE
 RATE LOANS UNDER
 REVOLVING CREDIT
 AND
 REIMBURSEMENT
 OBLIGATIONS SHALL
 BE:

	 	 	 APPLICABLE
 MARGIN FOR
 EURODOLLAR
 LOANS UNDER
 REVOLVING
 CREDIT AND
 LETTER OF CREDIT
FEE SHALL BE:

	 	 	 APPLICABLE
 MARGIN FOR
 BASE
RATE
 LOANS UNDER
 TERM
CREDIT
 SHALL
BE:

	 	 	 APPLICABLE
 MARGIN FOR
 EURODOLLAR
 LOANS UNDER
 TERM
CREDIT
 SHALL BE:

	 	 	 APPLICABLE
 MARGIN FOR
 REVOLVING CREDIT
 COMMITMENT FEE
 SHALL BE:

	 
	 II
	  	Greater than or equal to 1.75 to 1.0	  	1.50	%	 	3.50	%	 	1.75	%	 	3.75	%	 	0.50	%
							
	 I
	  	Less than 1.75 to 1.0	  	1.00	%	 	3.00	%	 	1.25	%	 	3.25	%	 	0.50	%

  
 For purposes hereof, the term
“Pricing Date” means, for any fiscal quarter of the Borrower ending on or after September 30, 2004, the date on which the Administrative Agent is in receipt of the Borrower’s most recent financial statements (and, in the case
of the year-end financial 
  

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 statements, audit report) for the fiscal quarter then ended, pursuant to Section 8.5 hereof, it being understood by the
parties hereto that the Applicable Margins shall be maintained at the rates per annum shown opposite Level II until receipt of such financial statements for the fiscal quarter ended September 30, 2004. The Applicable Margin shall be established
based on the Total Funded Debt/EBITDA Ratio for the most recently completed fiscal quarter and the Applicable Margin established on a Pricing Date shall remain in effect until the next Pricing Date. If the Borrower has not delivered its financial
statements by the date such financial statements (and, in the case of the year-end financial statements, audit report) are required to be delivered under Section 8.5 hereof, until such financial statements and audit report are delivered, the
Applicable Margin shall be the highest Applicable Margin (i.e., Level II shall apply). If the Borrower subsequently delivers such financial statements before the next Pricing Date, the Applicable Margin established by such late delivered
financial statements shall take effect from the date of delivery until the next Pricing Date. In all other circumstances, the Applicable Margin established by such financial statements shall be in effect from the Pricing Date that occurs immediately
after the end of the fiscal quarter covered by such financial statements until the next Pricing Date. Each determination of the Applicable Margin made by the Administrative Agent in accordance with the foregoing shall be conclusive and binding on
the Borrower and the Lenders if reasonably determined. 
  
 “Application” is defined in Section 1.3(b) hereof. 
  
 “Assignment of Leases” means, collectively, each Assignment of Leases and Rents between the Borrower or the relevant Guarantor and the Administrative Agent relating to real property leased by the
Borrower or the relevant Guarantor as lessor (or sublessor) to a third party, as the same may be amended, modified, supplemented or restated from time to time. 
  

“Authorized Representative” means those persons shown on the list of officers provided by the Borrower pursuant to Section 7.2 hereof
or on any update of any such list provided by the Borrower to the Administrative Agent, or any further or different officers of the Borrower so named by any Authorized Representative of the Borrower in a written notice to the Administrative Agent.

  
 “Base Rate” is defined in Section 1.4(a)
hereof. 
  
 “Base Rate Loan” means a Loan bearing
interest at a rate specified in Section 1.4(a) hereof. 
  
 “Borrower” is defined in the introductory paragraph of this Agreement. 
  
 “Borrowing” means the total of Loans of a single type advanced, continued for an additional Interest Period, or converted from a
different type into such type by the Lenders under a Credit on a single date and, in the case of Eurodollar Loans, for a single Interest Period. Borrowings of Loans are made and maintained ratably from each of the Lenders under a Credit according to
their Percentages of such Credit. A Borrowing is “advanced” on the day Lenders advance funds comprising such Borrowing to the designated account of the Borrower maintained with the Administrative Agent or such other account
designated by the Borrower and reasonably 
  

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 acceptable to the Administrative Agent, is “continued” on the date a new Interest Period for the same
type of Loans commences for such Borrowing, and is “converted” when such Borrowing is changed from one type of Loans to the other, all as determined pursuant to Section 1.6 hereof. 
  
 “Business Day” means any day (other than a Saturday or
Sunday) on which banks are not authorized or required to close in Chicago, Illinois and, if the applicable Business Day relates to the advance or continuation of, or conversion into, or payment of a Eurodollar Loan, on which banks are dealing in
U.S. Dollar deposits in the interbank eurodollar market in London, England. 
  
 “Capital Expenditures” means, with respect to any Person for any period, the aggregate amount of all expenditures (whether paid in cash or accrued as a liability) by such Person during that period for
the acquisition or leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to property, plant, or equipment (including replacements, capitalized repairs, and improvements) which should be capitalized on the balance sheet of
such Person in accordance with GAAP, but specifically excluding Capital Expenditures incurred in connection with the purchase of certain real property located in Alpharetta, Georgia, as long as such real property is sold by the Borrower not later
than April 30, 2004 in a transaction pursuant to which the Borrower receives and pays to the Administrative Agent as a prepayment on the Obligations Net Cash Proceeds of not less than $1,000,000. 
  
 “Capital Lease” means any lease of Property which in
accordance with GAAP is required to be capitalized on the balance sheet of the lessee. 
  
 “Capitalized Lease Obligation” means, for any Person, the amount of the liability shown on the balance sheet of such Person in respect of a Capital Lease determined in accordance with GAAP.

  
 “CERCLA” means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§9601 et seq., and any future amendments. 
  
 “Change of Control” means any of (a) the acquisition by any
“person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) at any time of beneficial ownership of 25% or more of the outstanding Voting Stock of the Borrower on a
fully-diluted basis or (b) the failure of individuals who are members of the board of directors (or similar governing body) of the Borrower on the Closing Date (together with any new or replacement directors whose initial nomination for election was
approved by a majority of the directors who were either directors on the Closing Date or previously so approved) to constitute a majority of the board of directors (or similar governing body) of the Borrower. For purposes of the foregoing clause (a)
a “Change of Control” shall not be deemed to have occurred with respect to (i) KU Learning, L.L.C. or its Affiliates, or (ii) Camden Partners Strategic II, L.L.C. or its Affiliates (each such group specified in the foregoing clauses (i)
and (ii), an “Existing Group”), solely as a result of any of the following: (v) such Existing Group being the beneficial owner of shares of the Borrower’s common stock or preferred stock held by it on the Closing Date; (w) the
conversion of any shares of the Borrower’s Series E Preferred Stock or Series F Preferred Stock held by such Existing Group; (x) the exercise by such Existing 
  

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 Group of any pre-emptive rights described in Section 4.6 of the Series E Preferred Stock Purchase Agreement or Section
4.4 of the Series F Preferred Stock Purchase Agreement; (y) the issuance to such Existing Group and conversion by such Existing Group of any additional shares of Series E Preferred Stock or Series F Preferred Stock received as a dividend pursuant to
the Certificate of Designation for such series of Preferred Stock; or (z) the issuance by the Borrower, to any board representative of such Existing Group (solely in such person or persons’ capacity as a director of the Borrower), of grants of
common stock of the Borrower, options to purchase common stock of the Borrower or the exercise of such options issued to such person or persons. 
  
 “Closing Date” means the date of this Agreement or such later Business Day upon which each condition described in Section 7.2 shall be
satisfied or waived in a manner acceptable to the Administrative Agent in its discretion. 
  
 “Code” means the Internal Revenue Code of 1986, as amended, and any successor statute thereto. 
  
 “Collateral” means all properties, rights, interests, and privileges from time to time subject to the Liens granted to the Administrative
Agent, or any security trustee therefor, by the Collateral Documents. 
  
 “Collateral Account” is defined in Section 9.4 hereof. 
  
 “Collateral Documents” means the Mortgages, the Security Agreement, and all other mortgages, deeds of trust, security agreements, pledge agreements, assignments, financing statements and other
documents as shall from time to time secure or relate to the Obligations, the Hedging Liability, and the Funds Transfer and Deposit Account Liability or any part thereof. 
  
 “Commitments” means the Revolving Credit Commitments and the Term Loan Commitments. 
  
 “Controlled Group” means all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414 of the Code. 
  
 “Credit” means either of the Revolving Credit or the Term
Credit. 
  
 “Credit Event” means the advancing of
any Loan, the continuation of or conversion into a Eurodollar Loan, or the issuance of, or extension of the expiration date or increase in the amount of, any Letter of Credit. 
  
 “Default” means any event or condition the occurrence of which would, with the passage of time or the
giving of notice, or both, constitute an Event of Default. 
  
 “Disposition” means the sale, lease, conveyance or other disposition of Property, other than sales or other dispositions expressly permitted under Sections 8.10(i), 8.10(ii)(a), (b), (c) or (d) hereof. 
  

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 “EBITDA” means, with reference to any period, Net Income for such period plus the
sum of all amounts deducted in arriving at such Net Income amount in respect of (a) Interest Expense for such period, (b) federal, state, and local income taxes for the Borrower and its Subsidiaries for such period, (c) depreciation of fixed assets
and amortization of intangible assets for the Borrower and its Subsidiaries for such period, (d) with respect to the fiscal quarter ended June 30, 2003 only, transaction expenses related to a potential going-private transaction in an aggregate
amount not to exceed $150,000, (e) with respect to the fiscal quarter ended September 30, 2003 only, a severance expense reserve in an aggregate amount not to exceed $1,500,000, provided that cash severance expenses incurred by the Borrower
and its Subsidiaries and charged against such reserve shall be subtracted from EBITDA in the fiscal quarters during which they are incurred, (f) with respect to the fiscal quarter ended June 30, 2003 only, write-downs and a reserve for
certain discontinued operations and a note receivable in an aggregate amount not to exceed $5,300,000, and (g) for any fiscal quarter, non-cash losses in an amount acceptable to the Administrative Agent resulting from impairment charges arising from
the application of SFAS No. 142 or SFAS No. 144, provided that the amount of such charges added pursuant to this clause (g) for the two consecutive fiscal quarter period ended June 30, 2003 shall be $6,515,079, less (h) interest income and
extraordinary gains for such period. 
  
 “Eligible Line of
Business” means any business engaged in as of the date of this Agreement by the Borrower or any of its Subsidiaries (or as may otherwise be agreed to from time to time by the Administrative Agent in writing). 
  
 “Environmental Claim” means any investigation, notice,
violation, demand, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding or claim (whether administrative, judicial or private in nature) arising (a) pursuant to, or in connection with an actual or
alleged violation of, any Environmental Law, (b) in connection with any Hazardous Material, (c) from any abatement, removal, remedial, corrective or response action in connection with a Hazardous Material, Environmental Law or order of a
governmental authority or (d) from any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment. 
  
 “Environmental Law” means any current or future Legal Requirement pertaining to (a) the protection of health, safety and the indoor or
outdoor environment, (b) the conservation, management or use of natural resources and wildlife, (c) the protection or use of surface water or groundwater, (d) the management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation or handling of, or exposure to, any Hazardous Material or (e) pollution (including any Release to air, land, surface water or groundwater), and any amendment,
rule, regulation, order or directive issued thereunder. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto. 
  
 “Eurodollar Loan” means a Loan bearing interest at the rate specified in Section 1.4(b) hereof. 
  

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 “Eurodollar Reserve Percentage” is defined in Section 1.4(b) hereof. 
  
 “Event of Default” means any event or condition identified
as such in Section 9.1 hereof. 
  
 “Event of
Loss” means, with respect to any Property, any of the following: (a) any loss, destruction or damage of such Property or (b) any condemnation, seizure, or taking, by exercise of the power of eminent domain or otherwise, of such Property, or
confiscation of such Property or the requisition of the use of such Property. 
  
 “Federal Funds Rate” means the fluctuating interest rate per annum described in part (x) of clause (ii) of the definition of Base Rate appearing in Section 1.4(a) hereof. 
  
 “Fixed Charges” means, with reference to any period, the sum
of (a) all cash payments of principal made or required to be made during such period with respect to Indebtedness for Borrowed Money of the Borrower and its Subsidiaries, other than those payments made or required to be made pursuant to Section 1.9
hereof, (b) Interest Expense for such period, (c) cash dividends paid during such period, and (d) federal, state, and local income taxes paid or payable in cash by the Borrower and its Subsidiaries during such period; provided that, for all
calculations of the fixed charge coverage ratio pursuant to Section 8.22(d) for fiscal quarters ending through and including December 31, 2004, (1) cash payments of principal for the four fiscal quarters then ended shall be deemed by the parties
hereto to be $2,866,135 for the four fiscal quarters ended March 31, 2004, $2,840,033 for the four fiscal quarters ended June 30, 2004, $2,804,589 for the four fiscal quarters ended September 30, 2004, and $2,726,850 for the four fiscal quarters
ended December 31, 2004, and (2) Interest Expense for the four fiscal quarters then ended shall be deemed by the parties hereto to be equal to the product of (x) Interest Expense incurred during the period (the “post-closing
period”) from and including the Closing Date through and including the last day of such period and (y) a fraction, the numerator of which is 365 and the denominator of which is the number of days in such post-closing period. 
  
 “Foreign Subsidiary” means each Subsidiary which (a) is
organized under the laws of a jurisdiction other than the United States of America or any state thereof, (b) conducts substantially all of its business outside of the United States of America, and (c) has substantially all of its assets outside of
the United States of America. 
  
 “Funds Transfer and
Deposit Account Liability” means the liability of the Borrower or any Subsidiary owing to any of the Lenders, or any Affiliates of such Lenders, arising out of (a) the execution or processing of electronic transfers of funds by automatic
clearing house transfer, wire transfer or otherwise to or from deposit accounts of the Borrower and/or any Subsidiary now or hereafter maintained with any of the Lenders or their Affiliates, (b) the acceptance for deposit or the honoring for payment
of any check, draft or other item with respect to any such deposit accounts, and (c) any other deposit, disbursement, and cash management services afforded to the Borrower or any Subsidiary by any of such Lenders or their Affiliates. 
  
 “GAAP” means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute 
  

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 of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination. 
  
 “Guarantor” and “Guarantors” mean each direct and indirect Subsidiary of the Borrower,
other than Rocking Horse One, Inc., which entity is specifically exempted from such definition. 
  
 “Guaranty” and “Guaranties” each is defined in Section 4.1 hereof. 
  
 “Hazardous Material” means any substance, chemical,
compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which is hazardous or toxic, and includes, without limitation, (a) asbestos, polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as “hazardous” or “toxic” or words of like import pursuant to an Environmental Law applicable to any of the Borrower or any Subsidiary. 
  
 “Hazardous Material Activity” means any activity, event or
occurrence involving a Hazardous Material, including, without limitation, the manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation, handling of
or corrective or response action to any Hazardous Material. 
  
 “Hedging Liability” means the liability of the Borrower or any Subsidiary to any of the Lenders, or any Affiliates of such Lenders, in respect of any interest rate, foreign currency, and/or commodity swap, exchange, cap,
collar, floor, forward, future or option agreement, or any other similar interest rate, currency or commodity hedging arrangement, as the Borrower or such Subsidiary, as the case may be, may from time to time enter into with any one or more of the
Lenders party to this Agreement or their Affiliates. 
  
 “Indebtedness for Borrowed Money” means for any Person (without duplication) (a) all indebtedness created, assumed or incurred in any manner by such Person representing money borrowed (including by the issuance of debt
securities), (b) all indebtedness for the deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business which are not more than sixty (60) days past due), (c) all indebtedness secured
by any Lien upon Property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness, (d) all Capitalized Lease Obligations of such Person, and (e) all obligations of such Person on or with respect
to letters of credit, bankers’ acceptances and other extensions of credit whether or not representing obligations for borrowed money. 
  
 “Initial Subordinated Debt” means the Subordinated Debt issued by the Borrower on or about the Closing Date and referred to in Section
7.2(v) hereof, as the same may be amended, modified, supplemented or restated from time to time in accordance with the provisions of this Agreement. 
  

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 “Initial Subordinated Debt Documents” means, collectively, the notes evidencing the
Initial Subordinated Debt, the subordination agreement among the holders of the Initial Subordinated Debt, the guarantors party thereto and the Administrative Agent relating thereto, the senior subordinated note agreement among the Borrower, the
guarantors party thereto, and the holders of the Initial Subordinated Debt relating thereto, and each other instrument or document delivered thereunder or otherwise in connection therewith. 
  
 “Interest Expense” means, with reference to any period, the
sum of all interest charges (including imputed interest charges with respect to Capitalized Lease Obligations and all amortization of debt discount and expense) of the Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP. 
  
 “Interest Period” is
defined in Section 1.7 hereof. 
  
 “L/C Issuer”
means the Administrative Agent, or any other Lender requested by the Borrower and approved by the Administrative Agent in its sole discretion with respect to any Letter of Credit. 
  
 “L/C Obligations” means the aggregate undrawn face amounts of all outstanding Letters of Credit and all
unpaid Reimbursement Obligations. 
  
 “L/C
Sublimit” means $2,500,000 as reduced pursuant to the terms hereof. 
  
 “Legal Requirement” means any treaty, convention, statute, law, regulation, ordinance, license, permit, governmental approval, injunction, judgment, order, consent decree or other requirement of any
governmental authority, whether federal, state, or local, applicable to any of the Borrower or any Subsidiary. 
  
 “Lenders” means and includes Harris Trust and Savings Bank and the other financial institutions from time to time party to this
Agreement, including each assignee Lender pursuant to Section 13.12 hereof. 
  
 “Lending Office” is defined in Section 10.4 hereof. 
  
 “Letter of Credit” is defined in Section 1.3(a) hereof. 
  
 “LIBOR” is defined in Section 1.4(b) hereof. 
  
 “Lien” means any mortgage, lien, security interest, pledge, charge or encumbrance of any kind in respect of
any Property, including the interests of a vendor or lessor under any conditional sale, Capital Lease or other title retention arrangement. 
  
 “Loan” means any Revolving Loan or Term Loan, whether outstanding as a Base Rate Loan or Eurodollar Loan or otherwise, each of which is a
“type” of Loan hereunder. 
  

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 “Loan Documents” means this Agreement, the Notes, the Applications, the Collateral
Documents, the Guaranties, and each other instrument or document to be delivered hereunder or thereunder or otherwise in connection therewith. 
  
 “Material Adverse Effect” means (a) a material adverse change in, or material adverse effect upon, the operations, business, Property or
condition (financial or otherwise) of the Borrower or of the Borrower and its Subsidiaries taken as a whole, (b) a material impairment of the ability of the Borrower to perform its material obligations under any Loan Document or Initial Subordinated
Debt Document or of the Borrower and its Subsidiaries taken as a whole to perform their material obligations under any Loan Document or Initial Subordinated Debt Document or (c) a material adverse effect upon (i) the legality, validity, binding
effect or enforceability against the Borrower or any Guarantor of any Loan Document or Initial Subordinated Debt Document or the rights and remedies of the Administrative Agent and the Lenders thereunder (or, with respect to the Initial Subordinated
Debt Documents, the rights and remedies of the holders of the Initial Subordinated Debt thereunder) or (ii) the perfection or priority of any Lien granted under any Collateral Document. 
  
 “Material Written Audit” means a written audit of such significance that such audit and the legal,
regulatory and financial impacts of such audit and the legal and regulatory actions likely to result therefrom are reasonably likely to have a material adverse effect upon the operations, business, Property or condition (financial or otherwise) of
the Borrower or any Subsidiary. 
  
 “Moody’s” means Moody’s Investors Service, Inc. 
  
 “Mortgages” means, collectively, each Mortgage and Security Agreement with Assignment of Rents and each Deed of Trust and Security Agreement with Assignment of Rents between the Borrower or the
relevant Guarantor and the Administrative Agent relating to such Person’s real property owned as of the Closing Date and located in the States of New Jersey, Pennsylvania, Illinois, North Carolina, California and Georgia and any other mortgages
or deeds of trust delivered to the Administrative Agent pursuant to Section 4.3 hereof, as the same may be amended, modified, supplemented or restated from time to time. 
  
 “Net Capital Expenditures” means, for any period, Capital Expenditures for such period less that portion of
Capital Expenditures incurred during such period which is financed through Capital Leases. 
  
 “Net Cash Proceeds” means, as applicable, (a) with respect to any Disposition by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) reasonable direct
costs relating to such Disposition and (ii) sale, use or other transactional taxes paid or payable by such Person as a direct result of such Disposition, (b) with respect to any Event of Loss of a Person, cash and cash equivalent proceeds received
by or for such Person’s account (whether as a result of payments made under any applicable insurance policy therefor or in connection with condemnation proceedings or otherwise), net of reasonable direct costs incurred in connection with the
collection of such proceeds, awards or other payments, and (c) with respect to any offering of equity securities of a Person or the issuance of any Indebtedness 
  


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 for Borrowed Money by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of
reasonable legal, underwriting, and other fees, commissions and expenses incurred as a direct result thereof. 
  
 “Net Income” means, with reference to any period, the net income (or net loss) of the Borrower and its Subsidiaries for such period
computed on a consolidated basis in accordance with GAAP; provided that there shall be excluded from Net Income (a) the net income (or net loss) of any Person accrued prior to the date it becomes a Subsidiary of, or has merged into or
consolidated with, the Borrower or another Subsidiary, and (b) the net income (or net loss) of any Person (other than a Subsidiary) in which the Borrower or any of its Subsidiaries has a equity interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or any of its Subsidiaries during such period. 
  
 “Notes” means and includes the Revolving Notes and the Term Notes. 
  
 “Obligations” means all obligations of the Borrower to pay principal and interest on the Loans, all
Reimbursement Obligations owing under the Applications, all fees and charges payable hereunder, and all other payment obligations of the Borrower or any of its Subsidiaries arising under or in relation to any Loan Document, in each case whether now
existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired. 
  
 “Participating Interest” is defined in Section 1.3(d) hereof. 
  
 “Participating Lender” is defined in Section 1.3(d) hereof. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation or any
Person succeeding to any or all of its functions under ERISA. 
  
 “Percentage” means for any Lender its Revolver Percentage or Term Loan Percentage, as applicable; and where the term “Percentage” is applied on an aggregate basis (including, without limitation, Section
11.6 hereof), such aggregate percentage shall be calculated by aggregating the separate components of the Revolver Percentage and Term Loan Percentage, and expressing such components on a single percentage basis. 
  
 “Person” means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof. 
  
 “Philadelphia School Loan” means the amounts paid by the Borrower for leasehold improvements at premises
leased under a certain Lease Agreement dated May 2, 2000 (as amended by that certain Addendum #1 dated May 2, 2000) between Arsenal Associates and the Borrower, and subleased by the Borrower to Franklin Towne Charter High School, Inc. 
  
 “Plan” means any employee pension benefit plan covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code that either (a) is 
  

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 maintained by a member of the Controlled Group for employees of a member of the Controlled Group or (b) is maintained
pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within
the preceding five plan years made contributions. 
  
 “Premises” means the real property owned or leased by the Borrower or any Subsidiary, including without limitation the real property and improvements thereon owned by the Borrower or any Subsidiary subject to the Lien of
the Mortgages or any other Collateral Documents. 
  
 “Property” means, as to any Person, all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent balance sheet of such Person and its subsidiaries under
GAAP. 
  
 “RCRA” means the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§6901 et seq., and any future amendments. 
  
 “Reimbursement Obligation” is defined in Section 1.3(c)
hereof. 
  
 “Release” means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migration, dumping, or disposing into the indoor or outdoor environment, including, without limitation, the abandonment or discarding of barrels, drums,
containers, tanks or other receptacles containing or previously containing any Hazardous Material. 
  
 “Required Lenders” means, as of the date of determination thereof, Lenders whose outstanding Loans and interests in Letters of Credit and
Unused Revolving Credit Commitments constitute more than 66 2/3% of the sum of the total outstanding Loans,
interests in Letters of Credit, and Unused Revolving Credit Commitments of the Lenders, provided that, at any time when there are fewer than three Lenders, “Required Lenders” shall mean all of the Lenders. 
  
 “Responsible Officer” means the chief executive officer,
chief financial officer, chief operating officer, president or general counsel of the Borrower or any Guarantor. 
  
 “Revolver Percentage” means, for each Lender, the percentage of the Revolving Credit Commitments represented by such Lender’s
Revolving Credit Commitment or, if the Revolving Credit Commitments have been terminated, the percentage held by such Lender (including through participation interests in Reimbursement Obligations) of the aggregate principal amount of all Revolving
Loans and L/C Obligations then outstanding. 
  
 “Revolving
Credit” means the credit facility for making Revolving Loans and issuing Letters of Credit described in Sections 1.2 and 1.3 hereof. 
  
 “Revolving Credit Commitment” means, as to any Lender, the obligation of such Lender to make Revolving Loans and to participate in
Letters of Credit issued for the account of the 
  

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 Borrower hereunder in an aggregate principal or face amount at any one time outstanding not to exceed the amount set
forth opposite such Lender’s name on Schedule 1 attached hereto and made a part hereof, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrower and the Lenders acknowledge and agree
that the Revolving Credit Commitments of the Lenders aggregate $8,000,000 on the date hereof. 
  
 “Revolving Credit Termination Date” means February 15, 2009, or such earlier date on which the Revolving Credit Commitments are terminated in whole pursuant to Section 1.13, 9.2 or 9.3 hereof.

  
 “Revolving Loan” is defined in Section 1.2
hereof and, as so defined, includes a Base Rate Loan or a Eurodollar Loan, each of which is a “type” of Revolving Loan hereunder. 
  
 “Revolving Note” is defined in Section 1.11 hereof. 
  
 “S&P” means Standard & Poor’s Ratings Services Group, a division of The McGraw-Hill Companies,
Inc. 
  
 “Security Agreement” means that certain
Security Agreement dated the date of this Agreement among the Borrower and the Guarantors and the Administrative Agent, as the same may be amended, modified, supplemented or restated from time to time. 
  
 “Seller Debt” means that Indebtedness for Borrowed Money
evidenced by (i) that 7% Subordinated Note due June 1, 2004, payable by the Borrower to Flint Ridge Schools, Inc., in the original principal amount of $207,543, (ii) that 7% Subordinated Note due September 1, 2004, payable by the Borrower to Sypros
Catechis in the original principal amount of $615,000, (iii) that 7% Subordinated Note payable by the Borrower to Act International, Inc. in the original principal amount of $136,500, (iv) that 7% Subordinated Note due February 1, 2005, payable by
the Borrower to David Sikes Child Care, Inc. in the original principal amount of $142,800, (v) that 7% Subordinated Note due July 1, 2005, payable by the Borrower to the Education Block, Inc. in the original principal amount of $420,000, (vi) that
7% Subordinated Note due April 1, 2004, payable by Nobel Learning Solutions, L.L.C. to LDLearning.com, Inc. in the original principal amount of $185,000, (vii) that Amended and Restated 7% Subordinated Note dated July 1, 2004, payable by Paladin
Academy, L.L.C. to Developmental Resource Center, Inc. in the original principal amount of $410,000, (viii) that Promissory Note dated June 27, 1989 made by The Rocking Horse Child Care Centers of America, Inc. in favor of Edward G. Walter, Jr. in
the original principal amount of $350,000, and (ix) Section 10.1(i) of that certain Stock Purchase Agreement dated as of November 15, 1996 by and between Renee Goldman, Richard Goldman, Libo Fineberg, certain other individuals, and Nobel Education
Dynamics, Inc. 
  
 “Subordinated Debt” means
Indebtedness for Borrowed Money which is subordinated in right of payment to the prior payment of the Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability pursuant to subordination provisions approved in writing by the
Administrative Agent and the Required Lenders and is otherwise pursuant to documentation that is, which is in an amount that is, and which contains interest rates, payment terms, maturities, amortization schedules, covenants, defaults, remedies and
other material terms that are in form 
  

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 and substance, in each case satisfactory to the Administrative Agent and the Required Lenders, including without
limitation the Initial Subordinated Debt, but specifically excluding the Seller Debt. 
  
 “Subsidiary” means, as to any particular parent corporation or organization, any other corporation or organization more than 50% of the outstanding Voting Stock of which is at the time directly or
indirectly owned by such parent corporation or organization or by any one or more other entities which are themselves subsidiaries of such parent corporation or organization. Unless otherwise expressly noted herein, the term
“Subsidiary” means a Subsidiary of the Borrower or of any of its direct or indirect Subsidiaries. 
  
 “Term Credit” means the credit facility for the Term Loans described in Section 1.1(a) hereof. 
  
 “Term Loan” is defined in Section 1.1(a) hereof and, as so
defined, includes a Base Rate Loan or a Eurodollar Loan, each of which is a “type” of Term Loan hereunder. 
  
 “Term Loan Commitment” means, as to any Lender, the obligation of such Lender to make its Term Loan on the Closing Date in the principal
amount not to exceed the amount set forth opposite such Lender’s name on Schedule 1 attached hereto and made a part hereof. The Borrower and the Lenders acknowledge and agree that the Term Loan Commitments of the Lenders aggregate $15,000,000
on the date hereof. 
  
 “Term Loan Percentage”
means, for each Lender, the percentage of the Term Loan Commitments represented by such Lender’s Term Loan Commitment or, if the Term Loan Commitments have been terminated or have expired, the percentage held by such Lender of the aggregate
principal amount of all Term Loans then outstanding. 
  
 “Term Note” is defined in Section 1.11 hereof. 
  
 “Total Funded Debt” means, at any time the same is to be determined, the sum (but without duplication) of (a) all Indebtedness for Borrowed Money of the Borrower and its Subsidiaries at such time, and
(b) all Indebtedness for Borrowed Money of any other Person which is directly or indirectly guaranteed by the Borrower or any of its Subsidiaries or which the Borrower or any of its Subsidiaries has agreed (contingently or otherwise) to purchase or
otherwise acquire or in respect of which the Borrower or any of its Subsidiaries has otherwise assured a creditor against loss. 
  
 “Total Funded Debt/EBITDA Ratio” means, as of the last day of any fiscal quarter of the Borrower, the ratio of Total Funded Debt of the
Borrower and its Subsidiaries as of the last day of such fiscal quarter to EBITDA of the Borrower and its Subsidiaries for the period of four fiscal quarters then ended. 
  
 “Total Senior Funded Debt” means, at any time the same is to be determined, Total Funded Debt at such time
minus the principal balance of Subordinated Debt of the Borrower then outstanding. 
  

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 “Total Senior Funded Debt/EBITDA Ratio” means, as of the last day of any fiscal quarter
of the Borrower, the ratio of Total Senior Funded Debt of the Borrower and its Subsidiaries as of the last day of such fiscal quarter to EBITDA of the Borrower and its Subsidiaries for the period of four fiscal quarters then ended. 
  
 “Unfunded Vested Liabilities” means, for any Plan at any
time, the amount (if any) by which the present value of all vested nonforfeitable accrued benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date
for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA. 
  
 “Unused Revolving Credit Commitments” means, at any time, the difference between the Revolving Credit
Commitments then in effect and the aggregate outstanding principal amount of Revolving Loans and L/C Obligations. 
  
 “U.S. Dollars” and “$” each means the lawful currency of the United States of America. 
  
 “Voting Stock” of any Person means capital stock or other
equity interests of any class or classes (however designated) having ordinary power for the election of directors or other similar governing body of such Person, other than stock or other equity interests having such power only by reason of the
happening of a contingency. 
  
 “Welfare Plan”
means a “welfare plan” as defined in Section 3(1) of ERISA. 
  
 “Wholly-owned Subsidiary” means a Subsidiary of which all of the issued and outstanding shares of capital stock (other than directors’ qualifying shares as required by law) or other equity interests are owned by the
Borrower and/or one or more Wholly-owned Subsidiaries within the meaning of this definition. 
  
 Section 5.2. Interpretation. The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words “hereof”, “herein”,
and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references to time of day herein are references to Chicago,
Illinois, time unless otherwise specifically provided. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement. 
  
 Section 5.3. Change in Accounting Principles. If, after the date of this Agreement, there shall occur any change in
GAAP from those used in the preparation of the financial statements referred to in Section 6.5 hereof and such change shall result in a change in the method of calculation of any financial covenant, standard or term found in this Agreement, either
the Borrower or the Required Lenders may by notice to the Lenders and the Borrower, respectively, require that the Lenders and the Borrower negotiate in good faith to amend such covenants, standards, and term so as equitably to reflect such change
in accounting principles, with the 
  

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 desired result being that the criteria for evaluating the financial condition of the Borrower and its Subsidiaries shall
be the same as if such change had not been made. No delay by the Borrower or the Required Lenders in requiring such negotiation shall limit their right to so require such a negotiation at any time after such a change in accounting principles. Until
any such covenant, standard, or term is amended in accordance with this Section 5.3, financial covenants shall be computed and determined in accordance with GAAP in effect prior to such change in accounting principles. Without limiting the
generality of the foregoing, the Borrower shall neither be deemed to be in compliance with any financial covenant hereunder nor out of compliance with any financial covenant hereunder if such state of compliance or noncompliance, as the case may be,
would not exist but for the occurrence of a change in accounting principles after the date hereof. Should the Borrower elect to change its fiscal year and fiscal quarter ending dates to dates which are near, but not on, the last days of the
corresponding calendar quarters, then all references in this Agreement or any other Loan Document to a specific quarter or year ending date occurring on or after the effective date of such change which are intended to refer to a fiscal quarter or
fiscal year ending date and which refer to a specific calendar quarter or calendar year ending date (i.e., March 31, June 30, September 30 or December 31) shall be deemed by the parties hereto, where appropriate in the context, to refer to the
corresponding fiscal quarter or fiscal year ending date of the Borrower after giving effect to such change. 
  
 SECTION 6. REPRESENTATIONS AND WARRANTIES. 
  
 The Borrower represents and warrants to the Administrative Agent and the Lenders as follows: 
  
 Section 6.1. Organization and Qualification. The Borrower is duly
organized, validly existing, and in good standing as a corporation under the laws of the State of Delaware, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such licensing or qualifying, except where the failure to do so would not have a Material Adverse Effect.

  
 Section 6.2. Subsidiaries. Each Subsidiary is duly
organized, validly existing, and in good standing under the laws of the jurisdiction in which it is organized, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such licensing or qualifying, except where the failure to do so would not have a Material Adverse Effect.
Schedule 6.2 hereto identifies each Subsidiary, the jurisdiction of its organization, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by the Borrower and the other Subsidiaries and,
if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class of its authorized capital stock and other equity interests and the number of shares of each class issued and outstanding.
All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares and other equity 
  

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 interests indicated on Schedule 6.2 hereto as owned by the Borrower or another Subsidiary are owned, beneficially and of
record, by the Borrower or such Subsidiary free and clear of all Liens other than the Liens granted in favor of the Administrative Agent pursuant to the Collateral Documents. Except as set forth on Schedule 6.2 hereto, there are no outstanding
commitments or other obligations of any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Subsidiary. 
  
 Section 6.3. Authority and Validity of Obligations. The Borrower has
full right and authority to enter into this Agreement and the other Loan Documents executed by it, to make the borrowings herein provided for, to issue its Notes in evidence thereof, to grant to the Administrative Agent the Liens described in the
Collateral Documents executed by the Borrower, and to perform all of its obligations hereunder and under the other Loan Documents executed by it. Each Guarantor has full right and authority to enter into the Loan Documents executed by it, to
guarantee the Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability, to grant to the Administrative Agent the Liens described in the Collateral Documents executed by such Person, and to perform all of its obligations under
the Loan Documents executed by it. The Loan Documents delivered by the Borrower and the Guarantors have been duly authorized, executed, and delivered by such Persons and constitute valid and binding obligations of the Borrower and the Guarantors
enforceable against them in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors’ rights generally and general principles of equity (regardless
of whether the application of such principles is considered in a proceeding in equity or at law); and this Agreement and the other Loan Documents do not, nor does the performance or observance by the Borrower or any Guarantor of any of the matters
and things herein or therein provided for, (a) contravene or constitute a default under any provision of law or any judgment, injunction, order or decree binding upon the Borrower or any Guarantor or any provision of the organizational documents
(e.g., charter, certificate or articles of incorporation and by-laws, certificate or articles of association and operating agreement, partnership agreement, or other similar organizational documents) of the Borrower or any Guarantor, (b)
contravene or constitute a default under any covenant, indenture or agreement of or affecting the Borrower or any Guarantor or any of their Property, in each case where such contravention or default, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (c) result in the creation or imposition of any Lien on any Property of the Borrower or any Guarantor other than the Liens granted in favor of the Administrative Agent pursuant to the
Collateral Documents. 
  
 Section 6.4. Use of Proceeds; Margin
Stock. The Borrower shall use the proceeds of the Term Loans to refinance existing Indebtedness for Borrowed Money of the Borrower; and the Borrower shall use the proceeds of the Revolving Credit to refinance existing Indebtedness for Borrowed
Money of the Borrower, for its general working capital purposes and for such other legal and proper purposes as are consistent with all applicable laws. Neither the Borrower nor any Subsidiary is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan or any other extension of credit made hereunder will be used to
purchase or carry any such margin stock or to extend 
  

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 credit to others for the purpose of purchasing or carrying any such margin stock. Margin stock (as hereinabove defined)
constitutes less than 25% of the assets of the Borrower and its Subsidiaries which are subject to any limitation on sale, pledge or other restriction hereunder. 
  

Section 6.5. Financial Reports. The consolidated balance sheet of the Borrower and its Subsidiaries as at June 30, 2003 and the related
consolidated statements of income, retained earnings and cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, and accompanying notes thereto, which financial statements are accompanied by the audit report of BDO Seidman
LLP, independent public accountants, and the unaudited interim consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2003 and the related consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the six months then ended, heretofore furnished to the Administrative Agent and the Lenders, fairly present in all material respects the consolidated financial condition of the Borrower and its Subsidiaries as at
said dates and the consolidated results of their operations and cash flows for the periods then ended in conformity with GAAP applied on a consistent basis (subject, in the case of the unaudited statements, to normal year-end adjustments that are
not expected to be material). Except as set forth on Schedule 6.5 hereto, neither the Borrower nor any Subsidiary had, as of the respective ending dates of the financial statements referred to above, contingent liabilities which were material to it
other than as indicated on such financial statements. 
  
 Section 6.6. No Material Adverse Change. Except as set forth on Schedule 6.6 hereto, since June 30, 2003, there has been no change in the condition (financial or otherwise) of the Borrower or any Subsidiary except those occurring in
the ordinary course of business, none of which individually or in the aggregate have been materially adverse. 
  
 Section 6.7. Full Disclosure. The statements and information furnished to the Administrative Agent and the Lenders in connection with the
negotiation of this Agreement and the other Loan Documents and the commitments by the Lenders to provide all or part of the financing contemplated hereby do not contain any untrue statements of a material fact or omit a material fact necessary to
make the material statements contained herein or therein not misleading, the Administrative Agent and the Lenders acknowledging that as to any projections furnished to the Administrative Agent and the Lenders, the Borrower only represents that the
same were prepared on the basis of information and estimates the Borrower believed to be reasonable at the time of such projection. 
  
 Section 6.8. Trademarks, Franchises, and Licenses. Except as set forth on Schedule 6.8 hereto, the Borrower and its Subsidiaries own, possess, or
have the right to use all necessary patents, licenses, franchises, trademarks, trade names, trade styles, copyrights, trade secrets, know how, and confidential commercial and proprietary information to conduct their businesses as now conducted,
without known conflict with any patent, license, franchise, trademark, trade name, trade style, copyright or other proprietary right of any other Person. 
  
 Section 6.9. Governmental Authority and Licensing. Except as set forth on Schedule 6.9 hereto, the Borrower and its Subsidiaries have received all
licenses, permits, and approvals of all federal, state, and local governmental authorities, if any, necessary to conduct their businesses, in 
  

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 each case where the failure to obtain or maintain the same could reasonably be expected to have a Material Adverse
Effect. No investigation or proceeding which, if adversely determined, could reasonably be expected to result in revocation or denial of any license, permit or approval is pending or, to the knowledge of the Borrower, threatened, except for any such
revocation or denial which could not reasonably be expected to have a Material Adverse Effect. 
  
 Section 6.10. Good Title. The Borrower and its Subsidiaries have good and defensible title (or valid leasehold interests) to their assets as reflected on the most recent consolidated balance sheet of the
Borrower and its Subsidiaries furnished to the Administrative Agent and the Lenders (except for sales of assets in the ordinary course of business), subject to no Liens other than such thereof as are permitted by Section 8.8 hereof and other Liens
the holder of which has agreed to release and discharge as set forth in the payoff letter described in Section 7.2(s) hereof. 
  
 Section 6.11. Litigation and Other Controversies. Except as set forth on Schedule 6.11 hereto, there is no litigation or governmental or
arbitration proceeding or labor controversy pending, nor to the knowledge of any Responsible Officer of the Borrower threatened, against the Borrower or any Subsidiary or any of their Property which if adversely determined, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. 
  
 Section 6.12. Taxes. Except as set forth on Schedule 6.12 hereto, all tax returns required to be filed by the Borrower or any Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees, and other governmental charges upon the Borrower or any Subsidiary or upon any of its Property, income or franchises, which are shown to be due and payable in such returns, have been paid, except such taxes, assessments, fees and
governmental charges, if any, as are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and as to which adequate reserves established in accordance with GAAP have been provided. The
Borrower does not know of any proposed additional tax assessment against it or its Subsidiaries for which adequate provisions in accordance with GAAP have not been made on their accounts. Adequate provisions in accordance with GAAP for taxes on the
books of the Borrower and each Subsidiary have been made for all open years, and for its current fiscal period. 
  
 Section 6.13. Approvals. No authorization, consent, license or exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of any other Person, is or will be necessary to the valid execution, delivery or performance by the Borrower or any Subsidiary of any Loan Document, except for such approvals which
have been obtained on or prior to the Closing Date and remain in full force and effect. 
  
 Section 6.14. Affiliate Transactions. Except as set forth on Schedule 6.14 hereto, neither the Borrower nor any Subsidiary is a party to any contracts or agreements with any of its Affiliates (other than with
Wholly-owned Subsidiaries) on terms and conditions which are less favorable to the Borrower or such Subsidiary than would be usual and customary in similar contracts or agreements between Persons not affiliated with each other, except for
compensation agreements with officers and directors approved by the compensation committee of the Borrower’s board of directors. 
  

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 Section 6.15. Investment Company; Public Utility Holding Company. Neither the Borrower nor any
Subsidiary is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or a “public utility holding company” within the
meaning of the Public Utility Holding Company Act of 1935, as amended. 
  
 Section 6.16. ERISA. The Borrower and each other member of its Controlled Group has fulfilled its obligations under the minimum funding standards of and is, along with each of their Employee Benefit Plans (and each related trust,
insurance contract or fund), in compliance in all material respects with ERISA and the Code to the extent applicable to it and has not incurred any liability to the PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Except as set forth on Schedule 6.16 hereto, neither the Borrower nor any Subsidiary has any contingent liabilities with respect to any post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in article 6 of Title I of ERISA. 
  
 Section 6.17. Compliance with Laws. (a) Except as set forth on Schedule 6.17(a) hereto, the Borrower and its Subsidiaries are in compliance with the requirements of all federal, state and local laws, rules and regulations applicable
to or pertaining to their Property or business operations (including, without limitation, the Occupational Safety and Health Act of 1970, the Americans with Disabilities Act of 1990, and laws and regulations establishing quality criteria and
standards for air, water, land and toxic or hazardous wastes and substances), where any such non-compliance, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 
  
 (b) Without limiting the representations and warranties set forth in Section
6.17(a) above, except (A) as set forth on Schedule 6.17(b) hereto and (B) for such other matters, individually or in the aggregate, which could not reasonably be expected to result in a Material Adverse Effect, the Borrower represents and warrants
that: (i) the Borrower and its Subsidiaries, and each of the Premises, comply in all material respects with all applicable Environmental Laws; (ii) the Borrower and its Subsidiaries have obtained all governmental approvals required for their
operations and each of the Premises by any applicable Environmental Law; (iii) the Borrower and its Subsidiaries have not, and the Borrower has no knowledge of any other Person who has, caused any Release, threatened Release or disposal of any
Hazardous Material at, on, about, or off any of the Premises in any material quantity and, to the knowledge of the Borrower, none of the Premises are adversely affected by any Release, threatened Release or disposal of a Hazardous Material
originating or emanating from any other property; (iv) to Borrower’s knowledge, none of the Premises contain and have contained any: (1) underground storage tank, (2) material amounts of asbestos containing building material, (3) landfills or
dumps, (4) hazardous waste management facility as defined pursuant to RCRA or any comparable state law, or (5) site on or nominated for the National Priority List promulgated pursuant to CERCLA or any state remedial priority list promulgated or
published pursuant to any comparable state law; (v) the Borrower and its Subsidiaries have not used a material quantity of any Hazardous Material and have conducted no Hazardous Material Activity at any of the Premises; (vi) the Borrower and its
Subsidiaries have no material liability for response or corrective action, natural resource damage or other harm pursuant to CERCLA, RCRA or any comparable state law; 
  

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 (vii) the Borrower and its Subsidiaries are not subject to, have no notice or knowledge of and are not required to give
any notice of any Environmental Claim involving the Borrower or any Subsidiary or any of the Premises, and there are no conditions or occurrences at any of the Premises which could reasonably be anticipated to form the basis for an Environmental
Claim against the Borrower or any Subsidiary or such Premises; (viii) none of the Premises are subject to any, and the Borrower has no knowledge of any imminent restriction on the ownership, occupancy, use or transferability of the Premises in
connection with any (1) Environmental Law or (2) Release, threatened Release or disposal of a Hazardous Material; and (ix) there are no conditions or circumstances at any of the Premises which pose an unreasonable risk to the environment or the
health or safety of Persons. 
  
 Section 6.18. Other
Agreements. Neither the Borrower nor any Subsidiary is in default under the terms of any covenant, indenture or agreement of or affecting such Person or any of its Property, which default if uncured could reasonably be expected to have a
Material Adverse Effect. 
  
 Section 6.19. Solvency. The
Borrower and each Guarantor are solvent, able to pay their debts as they become due, and have sufficient capital to carry on their business and all businesses in which they are about to engage. 
  
 Section 6.20. No Broker Fees. Except as set forth on Schedule 6.20
hereto, no broker’s or finder’s fee or commission will be payable with respect hereto or any of the transactions contemplated thereby; and the Borrower hereby agrees to indemnify the Administrative Agent and the Lenders against, and agree
that they will hold the Administrative Agent and the Lenders harmless from, any claim, demand, or liability for any such broker’s or finder’s fees alleged to have been incurred in connection herewith or therewith and any expenses
(including reasonable attorneys’ fees) arising in connection with any such claim, demand, or liability. 
  
 Section 6.21. No Default. No Default or Event of Default has occurred and is continuing. 
  
 SECTION 7. CONDITIONS
PRECEDENT. 
  
 The obligation of each Lender to
advance, continue or convert any Loan (other than the continuation of, or conversion into, a Base Rate Loan) or of the L/C Issuer to issue, extend the expiration date (including by not giving notice of non-renewal) of or increase the amount of any
Letter of Credit under this Agreement, shall be subject to the following conditions precedent: 
  
 Section 7.1. All Credit Events. At the time of each Credit Event hereunder: 
  
 (a) each of the representations and warranties set forth herein and in the other Loan Documents shall be and remain true and correct in
all material respects as of said time, except to the extent the same expressly relate to an earlier date; 
  
 (b) no Default or Event of Default shall have occurred and be continuing or would occur as a result of such Credit Event; 
  

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 (c) in the case of a Borrowing the Administrative Agent shall have received the notice
required by Section 1.6 hereof, in the case of the issuance of any Letter of Credit the L/C Issuer shall have received a duly completed Application for such Letter of Credit together with any fees called for by Section 2.1 hereof, and, in the case
of an extension or increase in the amount of a Letter of Credit, a written request therefor in a form acceptable to the L/C Issuer together with fees called for by Section 2.1 hereof; and 
  
 (d) such Credit Event shall not violate any order, judgment
or decree of any court or other authority or any provision of law or regulation applicable to the Administrative Agent, the L/C Issuer, or any Lender (including, without limitation, Regulation U of the Board of Governors of the Federal Reserve
System) as then in effect. 
  
 Each request for a Borrowing
hereunder and each request for the issuance of, increase in the amount of, or extension of the expiration date of, a Letter of Credit shall be deemed to be a representation and warranty by the Borrower on the date on such Credit Event as to the
facts specified in subsections (a) through (c), both inclusive, of this Section. 
  
 Section 7.2. Initial Credit Event. Before or concurrently with the initial Credit Event: 
  
 (a) the Administrative Agent shall have received for each Lender this Agreement duly executed by the Borrower and the Guarantors, and the
Lenders; 
  
 (b) the Administrative Agent shall
have received for each Lender such Lender’s duly executed Notes of the Borrower dated the date hereof and otherwise in compliance with the provisions of Section 1.11 hereof; 
  
 (c) the Administrative Agent shall have received the Mortgages, Assignment of Leases (with respect to those
properties agreed upon between the Administrative Agent and the Borrower) and Security Agreement duly executed by the Borrower and the Guarantors, as appropriate, together with (i) original stock certificates or other similar instruments or
securities representing all of the issued and outstanding shares of capital stock or other equity interests in each Subsidiary (66% of such capital stock in the case of any Foreign Subsidiary as provided in Section 4.2 hereof) as of the Closing
Date, (ii) stock powers for the Collateral consisting of the stock or other equity interest in each Subsidiary executed in blank and undated, (iii) UCC financing statements to be filed against the Borrower and each Guarantor, as debtor, in favor of
the Administrative Agent, as secured party, (iv) patent, trademark, and copyright collateral agreements to the extent requested by the Administrative Agent, and (v) deposit account, securities account, and commodity account control agreements to the
extent requested by the Administrative Agent; 
  
 (d) the Administrative Agent shall have received evidence of insurance required to be maintained under the Loan Documents, naming the Administrative Agent as mortgagee and loss payee; 
  

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 (e) the Administrative Agent shall have received for each Lender copies of the
Borrower’s and each Guarantor’s articles of incorporation and bylaws (or comparable organizational documents) and any amendments thereto, certified in each instance by its Secretary or Assistant Secretary; 
  
 (f) the Administrative Agent shall have received for each
Lender copies of resolutions of the Borrower’s and each Guarantor’s Board of Directors (or similar governing body) authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party
and the consummation of the transactions contemplated hereby and thereby, together with specimen signatures of the persons authorized to execute such documents on the Borrower’s and each Guarantor’s behalf, all certified in each instance
by its Secretary or Assistant Secretary; 
  
 (g)
the Administrative Agent shall have received for each Lender copies of the certificates of good standing for the Borrower and each Guarantor (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state of
its incorporation or organization and of each state in which it is qualified to do business as a foreign corporation or organization; 
  
 (h) the Administrative Agent shall have received for each Lender a list of the Borrower’s Authorized Representatives; 
  
 (i) the Administrative Agent shall have received the initial
fees called for by Section 2.1(c) hereof; 
  
 (j)
the Administrative Agent shall have received mortgagee’s title insurance policies (or prepaid binding commitments therefor) in form and substance acceptable to the Administrative Agent from a title insurance company or companies acceptable to
the Administrative Agent in an aggregate amount acceptable to the Administrative Agent insuring the Liens of the Mortgages to be valid first priority Liens subject to no defects or objections which are unacceptable to the Administrative Agent,
together with such endorsements as the Administrative Agent may require; 
  
 (k) the Administrative Agent shall have received copies of any existing surveys in the possession of the Borrower or any of its Subsidiaries with respect to each parcel of real property subject to the Lien of the
Mortgages; 
  
 (l) the Administrative Agent shall
have received copies of any existing environmental reports in the possession of the Borrower or any of its Subsidiaries with respect to each parcel of real property subject to the Lien of the Mortgages. 
  
 (m) the Administrative Agent shall have received copies of
any existing appraisals in the possession of the Borrower or any of its Subsidiaries with respect to each parcel of real property subject to the Lien of the Mortgages. 
  

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 (n) The Administrative Agent shall have received an environmental checklist duly
completed by the Borrower on the Administrative Agent’s form with respect to all real property owned by the Borrower or any of its Subsidiaries other than the properties located in Alpharetta, Georgia and Northfield, New Jersey for which Phase
I environmental assessments have been delivered to the Administrative Agent; 
  
 (o) the Administrative Agent shall have received a flood hazard evaluation report acceptable in form and substance to it with respect to each parcel of real property subject to the Lien of the Mortgages; 

 
 (p) [reserved]; 
  
 (q) each Lender shall have received such evaluations and
certifications as it may reasonably require (including the results of a collateral audit and a compliance certificate in the form of Exhibit E hereto showing compliance with the financial covenants set forth herein as of December 31, 2003) in order
to satisfy itself as to the value of the Collateral, the financial condition of the Borrower and the Guarantors, and the lack of material contingent liabilities of the Borrower and the Guarantors; 
  
 (r) the Administrative Agent shall have received financing
statement, tax, and judgment lien search results against the Property of the Borrower and each Guarantor evidencing the absence of Liens on its Property except as permitted by Section 8.8 hereof; 
  
 (s) the Administrative Agent shall have received pay-off and
lien release letters from secured creditors of the Borrower and each Guarantor setting forth, among other things, the total amount of indebtedness outstanding and owing to them (or outstanding letters of credit issued for the account of the Borrower
or any Guarantor) and containing an undertaking to cause to be delivered to the Administrative Agent UCC termination statements and any other lien release instruments necessary to release their Liens on the assets of the Borrower and each Guarantor,
which pay-off and lien release letters shall be in form and substance acceptable to the Administrative Agent, and the proceeds of the initial Credit Event shall be sufficient to, and shall be directed by the Borrower to, fully repay all such
indebtedness; 
  
 (t) the Administrative Agent
shall have received for each Lender the favorable written opinion of counsel to the Borrower and each Guarantor, in form and substance satisfactory to the Administrative Agent; 
  
 (u) the Administrative Agent and its counsel shall have reviewed and shall be satisfied with all pending and
threatened litigation involving the Borrower and the Guarantors; 
  
 (v) the Borrower’s shall have received proceeds from the issuance to Mollusk Holdings, L.L.C. and Blesbok LLC of Subordinated Debt in an aggregate principal amount of not less than $10,000,000, with all required
principal payments thereunder to 
  

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 be set at a date not less than 180 days after the later of the Revolving Credit Termination Date and the
final maturity date of the Term Loans, and all other terms of such Subordinated Debt, including without limitation all covenants and defaults and the terms pursuant to which such Subordinated Debt is subordinated to the Obligations, Hedging
Liability and Funds Transfer and Deposit Account Liability, to be acceptable to the Administrative Agent; 
  
 (w) the Administrative Agent shall have received a copy, certified by the Borrower as true and correct, of all documents evidencing the
Seller Debt and the Philadelphia School Loan; 
  
 (x) the Administrative Agent shall have received evidence satisfactory to it that (i) EBITDA for the twelve months ending on December 31, 2003, was not less than $11,000,000; (ii) the Total Funded Debt/EBITDA Ratio, measured based on Total
Funded Debt projected to be outstanding after giving effect to the initial Credit Extension and EBITDA for the four fiscal quarters ended on December 31, 2003, will be less than 2.50 to 1.0 and (iii) the Total Senior Funded Debt/EBITDA Ratio,
measured based on Total Senior Funded Debt projected to be outstanding after giving effect to the initial Credit Extension and EBITDA for the four fiscal quarters ended on December 31, 2003, will be less than 1.75 to 1.0: and 
  
 (y) the Administrative Agent shall have received for the
account of the Lenders such other agreements, instruments, documents, certificates, and opinions as the Administrative Agent may reasonably request. 
  
 SECTION 8. COVENANTS. 
  
 The Borrower agrees that, so long as any credit is available to or in use by the Borrower hereunder, except to the extent
compliance in any case or cases is waived in writing pursuant to the terms of Section 13.13 hereof: 
  
 Section 8.1. Maintenance of Business. The Borrower shall, and shall cause each Subsidiary to, preserve and maintain its existence, except as
otherwise provided in Section 8.10(ii)(b) hereof. The Borrower shall, and shall cause each Subsidiary to, preserve and keep in force and effect all licenses, permits, franchises, approvals, patents, trademarks, trade names, trade styles, copyrights,
and other proprietary rights necessary to the proper conduct of its business where the failure to do so could reasonably be expected to have a Material Adverse Effect. 
  
 Section 8.2. Maintenance of Properties. The Borrower shall, and shall cause each Subsidiary to, maintain, preserve,
and keep its property, plant, and equipment in good repair, working order and condition (ordinary wear and tear excepted), and shall from time to time make all needful and proper repairs, renewals, replacements, additions, and betterments thereto so
that at all times the efficiency thereof shall be fully preserved and maintained, except to the extent that, in the reasonable business judgment of such Person, any such Property is no longer necessary for the proper conduct of the business of such
Person. 
  

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 Section 8.3. Taxes and Assessments. The Borrower shall duly pay and discharge, and shall cause
each Subsidiary to duly pay and discharge, all taxes, rates, assessments, fees, and governmental charges upon or against it or its Property, in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent
that the same are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and adequate reserves are provided therefor. 
  
 Section 8.4. Insurance. The Borrower shall insure and keep insured, and shall cause each Subsidiary to insure and
keep insured, with good and responsible insurance companies, all insurable Property owned by it which is of a character usually insured by Persons similarly situated and operating like Properties against loss or damage from such hazards and risks,
and in such amounts, as are insured by Persons similarly situated and operating like Properties; and the Borrower shall insure, and shall cause each Subsidiary to insure, such other hazards and risks (including, without limitation, business
interruption, and general liability risks) with good and responsible insurance companies as and to the extent usually insured by Persons similarly situated and conducting similar businesses. The Borrower shall in any event maintain, and cause each
Subsidiary to maintain, insurance on the Collateral to the extent required by the Collateral Documents. The Borrower shall, upon the request of the Administrative Agent, furnish to the Administrative Agent and the Lenders a certificate setting forth
in summary form the nature and extent of the insurance maintained pursuant to this Section. 
  
 Section 8.5. Financial Reports. The Borrower shall, and shall cause each Subsidiary to, maintain a standard system of accounting in accordance with GAAP and shall furnish to the Administrative Agent, each
Lender and each of their duly authorized representatives such information respecting the business and financial condition of the Borrower and each Subsidiary as the Administrative Agent or such Lender may reasonably request; and without any request,
shall furnish to the Administrative Agent and the Lenders: 
  
 (a) as soon as available, and in any event within 30 days after the last day of each calendar month other than the last calendar month of each fiscal quarter, and in any event within 45 days after the last day of the
last calendar month of each fiscal quarter (including, without limitation, the last calendar month of each fiscal year), a copy of the consolidated balance sheet of the Borrower and its Subsidiaries as of the last day of such month and the
consolidated statements of income, retained earnings, and cash flows of the Borrower and its Subsidiaries for the month and for the fiscal year-to-date period then ended, each in reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year and a comparison to budget, prepared by the Borrower in accordance with GAAP (subject to the absence of footnote disclosures and year-end audit adjustments) and certified to by its chief
financial officer or another officer of the Borrower acceptable to the Administrative Agent; 
  
 (b) as soon as available, and in any event within 90 days after the last day of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its Subsidiaries as of the last day of the fiscal year then ended and the consolidated statements of income, retained earnings, and cash flows of the Borrower and its Subsidiaries for the fiscal year
then ended, and accompanying notes thereto, each in 
  

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 reasonable detail showing in comparative form the figures for the previous fiscal year and a comparison
to budget, accompanied in the case of the consolidated financial statements by an unqualified opinion of BDO Seidman LLP or another firm of independent public accountants of recognized national standing, selected by the Borrower and reasonably
satisfactory to the Administrative Agent and the Required Lenders, to the effect that the consolidated financial statements have been prepared in accordance with GAAP and present fairly in accordance with GAAP the consolidated financial condition of
the Borrower and its Subsidiaries as of the close of such fiscal year and the results of their operations and cash flows for the fiscal year then ended and that an examination of such accounts in connection with such financial statements has been
made in accordance with generally accepted auditing standards and, accordingly, such examination included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances; 
  
 (c) promptly after receipt thereof, any additional written
reports, management letters or other detailed information contained in writing concerning significant aspects of the Borrower’s or any Subsidiary’s operations and financial affairs given to it by its independent public accountants;

  
 (d) promptly after the sending or filing
thereof, copies of each regular, periodic or special report, registration statement or prospectus (including all proxy statements, Form 10-K, Form 10-Q and Form 8-K reports) filed by the Borrower or any Subsidiary with any securities exchange or the
Securities and Exchange Commission or any successor agency; 
  
 (e) promptly after receipt thereof, a copy of each Material Written Audit made by any regulatory agency of the books and records of the Borrower or any Subsidiary or of notice of any material noncompliance with any
applicable law, regulation or guideline relating to the Borrower or any Subsidiary, or its business; 
  
 (f) as soon as available, and in any event within 30 days after to the start of each fiscal year of the Borrower, a copy of the
Borrower’s consolidated business plan for such fiscal year, such business plan to show the Borrower’s projected consolidated revenues, expenses and balance sheet on a month-by-month basis, such business plan to be in reasonable detail
prepared by the Borrower and in form satisfactory to the Administrative Agent and the Required Lenders (which shall include a summary of all assumptions made in preparing such business plan); 
  
 (g) notice of any Change of Control; 
  
 (h) promptly after knowledge thereof shall have come to the
attention of any Responsible Officer of the Borrower, written notice of (i) any threatened or pending litigation or governmental or arbitration proceeding or labor controversy against the Borrower or any Subsidiary or any of their Property which, if
adversely determined, could reasonably be expected to have a Material Adverse Effect or (ii) the occurrence of any Default or Event of Default hereunder; and 
  

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 (i) with each of the financial statements furnished to the Lenders pursuant to subsection
(b) above and with each of the monthly financial statements for the last month in each fiscal quarter furnished to the Lenders pursuant to subsection (a) above, a written certificate in the form attached hereto as Exhibit E signed by the chief
financial officer of the Borrower or another officer of the Borrower acceptable to the Administrative Agent to the effect that to the best of such officer’s knowledge and belief no Default or Event of Default has occurred during the period
covered by such statements or, if any such Default or Event of Default has occurred during such period, setting forth a description of such Default or Event of Default and specifying the action, if any, taken by the Borrower or any Subsidiary to
remedy the same. Such certificate shall also set forth the calculations supporting such statements in respect of Section 8.22 hereof. 
  
 The financial statements delivered pursuant to subsections (a) and (b) above shall, among other things, reflect all contingent liabilities of the Borrower or any
Subsidiary existing at the end of the relevant period covered thereby which are material to the Borrower or any Subsidiary. 
  
 Section 8.6. Inspection. The Borrower shall, and shall cause each Subsidiary to, permit the Administrative Agent, each Lender, and each of their
duly authorized representatives and agents to visit and inspect any of its Property, corporate books, and financial records, to examine and make copies of its books of accounts and other financial records, and to discuss its affairs, finances, and
accounts with, and to be advised as to the same by, its officers, employees and independent public accountants (and by this provision the Borrower hereby authorizes such accountants to discuss with the Administrative Agent and such Lenders the
finances and affairs of the Borrower and its Subsidiaries) at such reasonable times and intervals as the Administrative Agent or any such Lender may designate and, so long as no Default or Event of Default exists, with reasonable prior notice to the
Borrower. 
  
 Section 8.7. Borrowings and Guaranties.
The Borrower shall not, nor shall it permit any Subsidiary to, issue, incur, assume, create or have outstanding any Indebtedness for Borrowed Money, or be or become liable as endorser, guarantor, surety or otherwise for any debt, obligation or
undertaking of any other Person, or otherwise agree to provide funds for payment of the obligations of another, or supply funds thereto or invest therein or otherwise assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or subordinate any claim or demand it may have to the claim or demand of any other Person; provided, however, that the foregoing shall not restrict nor operate to prevent:

  
 (a) the Obligations, Hedging Liability, and
Funds Transfer and Deposit Account Liability of the Borrower and its Subsidiaries owing to the Administrative Agent and the Lenders (and their Affiliates); 
  
 (b) purchase money indebtedness and Capitalized Lease Obligations of the Borrower and its Subsidiaries in an amount not to exceed
$2,000,000 in the aggregate at any one time outstanding; 
  

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 (c) obligations of the Borrower arising out of one interest rate hedging agreement
entered into with one of the Lenders or another financial institution reasonably acceptable to the Administrative Agent, all on terms and conditions reasonably acceptable to the Administrative Agent; 
  
 (d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business; 
  
 (e) intercompany advances from time to time owing by any Subsidiary which is a Guarantor to the Borrower or another Subsidiary which is a Guarantor or by the Borrower to a Subsidiary which is a Guarantor in the
ordinary course of business; 
  
 (f) Subordinated
Debt in a principal amount not to exceed $10,000,000 in the aggregate on the Closing Date, as reduced by permitted payments thereon; 
  
 (g) the Seller Debt in a principal amount not to exceed $478,706 in the aggregate on the Closing Date, as reduced by permitted payments
thereon; 
  
 (h) the guaranties described in
Schedule 8.7 and outstanding on the Closing Date, together with additional guaranties entered into for similar purposes and reasonably acceptable in form, substance and amount to the Administrative Agent; 
  
 (i) obligations of the Borrower with respect to letters of
credit issued by Fleet National Bank in an aggregate outstanding stated amount of $735,672.86 on the Closing Date, as reduced by any terminations of or permanent reductions in the stated amount of any such letters of credit; and 
  
 (j) unsecured indebtedness of the Borrower and its
Subsidiaries not otherwise permitted by this Section in an amount not to exceed $200,000 in the aggregate at any one time outstanding. 
  
 Section 8.8. Liens. The Borrower shall not, nor shall it permit any Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; provided, however, that the foregoing shall not apply to nor operate to prevent: 
  
 (a) Liens arising by statute in connection with worker’s compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar charges (other than Liens arising under ERISA), good faith cash deposits in connection with tenders, contracts or leases to which the Borrower or any Subsidiary is a party or
other cash deposits required to be made in the ordinary course of business, provided in each case that the obligation is not for borrowed money and that the obligation secured is not overdue or, if overdue, is being contested in good faith by
appropriate proceedings which prevent enforcement of the matter under contest and adequate reserves have been established therefor; 
  

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 (b) mechanics’, workmen’s, materialmen’s, landlords’, carriers’
or other similar Liens arising in the ordinary course of business with respect to obligations which are not due or which are being contested in good faith by appropriate proceedings which prevent enforcement of the matter under contest; 

 
 (c) judgment liens and judicial attachment liens not
constituting an Event of Default under Section 9.1(g) hereof and the pledge of assets for the purpose of securing an appeal, stay or discharge in the course of any legal proceeding, provided that the aggregate amount of such judgment liens and
attachments and liabilities of the Borrower and its Subsidiaries secured by a pledge of assets permitted under this subsection, including interest and penalties thereon, if any, shall not be in excess of $500,000 at any one time outstanding;

  
 (d) Liens on equipment of the Borrower or any
Subsidiary created solely for the purpose of securing indebtedness permitted by Section 8.7(b) hereof, representing or incurred to finance the purchase price of such Property, provided that no such Lien shall extend to or cover other Property of the
Borrower or such Subsidiary other than the respective Property so acquired, and the principal amount of indebtedness secured by any such Lien shall at no time exceed the purchase price of such Property, as reduced by repayments of principal thereon;

  
 (e) any interest or title of a lessor under
any operating lease; 
  
 (f) easements,
rights-of-way, restrictions, and other similar encumbrances against real property incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and which do not materially detract from the value of the Property
subject thereto or materially interfere with the ordinary conduct of the business of the Borrower or any Subsidiary and all encumbrances reflected on Schedule B of those policies of title insurance provided to the Administrative Agent in connection
with the Mortgages; 
  
 (g) Liens granted to
Fleet National Bank on cash collateral securing the obligations described in Section 8.7(i) hereof, provided that the aggregate amount of cash collateral pledged to support such obligations shall not at any time exceed the lesser of 105% of the
amount set forth in Section 8.7(i) hereof or 105% of the then-current aggregate stated amount of such letters of credit; 
  
 (h) Liens granted in favor of Kings Grant Shops, LLC in certain Property of the Borrower and its Subsidiaries listed on Exhibit
“A” to a UCC-1 filing dated June 20, 2001 with the County Clerk of Burlington County, New Jersey; 
  
 (i) Liens granted in favor of EAB Leasing Corp. on Property of the Borrower and its Subsidiaries to secure an equipment lease, provided
that, within 60 days after the Closing Date and without the expenditure by the Borrower and its Subsidiaries of more than $1,500,000, either (x) the holder of such Liens has agreed in writing to modify their scope so that the Property encumbered
thereby shall not extend beyond the leased 
  

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 equipment and certain proceeds thereof acceptable to the Administrative Agent and has filed a UCC
amendment reflecting such modification in all necessary jurisdictions, or (y) such Liens have been terminated and released by the holder thereof; and 
  
 (j) Liens granted in favor of the Administrative Agent pursuant to the Collateral Documents. 
  
 Section 8.9. Investments, Acquisitions, Loans and Advances. The
Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly, make, retain or have outstanding any investments (whether through purchase of stock or obligations or otherwise) in, or loans or advances to (other than for travel
advances and other similar cash advances made to employees in the ordinary course of business), any other Person, or acquire all or any substantial part of the assets or business of any other Person or division thereof; provided, however,
that the foregoing shall not apply to nor operate to prevent: 
  
 (a) investments in direct obligations of the United States of America or of any agency or instrumentality thereof whose obligations constitute full faith and credit obligations of the United States of America,
provided that any such obligations shall mature within one year of the date of issuance thereof; 
  
 (b) investments in commercial paper rated at least P-1 by Moody’s and at least A-1 by S&P maturing within one year of the date of
issuance thereof; 
  
 (c) investments in
certificates of deposit issued by any Lender or by any United States commercial bank having capital and surplus of not less than $100,000,000 which have a maturity of one year or less; 
  
 (d) investments in repurchase obligations with a term of not more than 7 days for underlying securities of
the types described in subsection (a) above entered into with any bank meeting the qualifications specified in subsection (c) above, provided all such agreements require physical delivery of the securities securing such repurchase agreement, except
those delivered through the Federal Reserve Book Entry System; 
  
 (e) investments in money market funds that invest solely, and which are restricted by their respective charters to invest solely, in investments of the type described in the immediately preceding subsections (a), (b),
(c), and (d) above; 
  
 (f) the Borrower’s
and its Subsidiaries’ investments existing on the Closing Date in their Subsidiaries which are not Guarantors, and the Borrower’s investments from time to time in its Subsidiaries which are Guarantors, and investments made from time to
time by a Subsidiary in or more of its Subsidiaries which are Guarantors; 
  
 (g) intercompany advances made from time to time by the Borrower or a Subsidiary to another Subsidiary which is a Guarantor or by a Subsidiary to the Borrower in the ordinary course of business; 
  

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 (h) the Philadelphia School Loan, in an aggregate principal amount not to exceed the
amount outstanding on the Closing Date; and 
  
 (i) the Borrower’s existing investment on the Closing Date in Rocking Horse One, Inc., plus additional investments in Rocking Horse One, Inc. in an aggregate amount after the Closing Date not to exceed $50,000; 
  
 (j) the Borrower’s existing investment on the Closing
Date in convertible debt of Total Education Solutions, Inc. (“TES”) in an original aggregate principal amount of $2,500,000, together with an equity investment arising from the exercise of warrants currently held by the Borrower for
the issuance of 10,000 shares of common stock of TES, provided that the consideration tendered by the Borrower for the exercise of such warrants shall not exceed $100 in the aggregate; 
  
 (k) the Borrower’s existing 19.99% equity interest on
the Closing Date in The Sagemont School, L.C.; and 
  
 (l) other investments, loans, and advances in addition to those otherwise permitted by this Section in an amount not to exceed $200,000 in the aggregate at any one time outstanding. 
  
 In determining the amount of investments, loans, and advances permitted under this Section,
investments shall always be taken at the original cost thereof (regardless of any subsequent appreciation or depreciation therein), and loans and advances shall be taken at the principal amount thereof then remaining unpaid. 
  
 Section 8.10. Mergers, Consolidations and Sales. The Borrower shall
not, nor shall it permit any Subsidiary to, be a party to any merger or consolidation, or sell, transfer, lease or otherwise dispose of all or any part of its Property, including any disposition of Property as part of a sale and leaseback
transaction, or in any event sell or discount (with or without recourse) any of its notes or accounts receivable; provided, however, that (i) this Section shall not apply to nor operate to prevent the sale or lease of inventory in the
ordinary course of business, and (ii) so long as no Default or Event of Default exists (except as otherwise permitted by the Security Agreement) this Section shall not apply to nor operate to prevent: 
  
 (a) the sale, transfer, lease or other disposition of
Property of the Borrower and its Subsidiaries which are Guarantors to one another in the ordinary course of its business; 
  
 (b) the merger of any Subsidiary with and into the Borrower or any other Subsidiary which is a Guarantor, provided that, (i) in the
case of any merger involving the Borrower, the Borrower is the corporation surviving the merger, and (ii) no Subsidiary may merge into a Subsidiary which is not a Wholly-owned Subsidiary; 
  

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 (c) the sale of delinquent notes or accounts receivable in the ordinary course of
business for purposes of collection only (and not for the purpose of any bulk sale or securitization transaction); 
  
 (d) the sale, transfer or other disposition of any tangible personal property that, in the reasonable business judgment of the Borrower or
its Subsidiary, has become obsolete or worn out, and which is disposed of in the ordinary course of business; 
  
 (e) the sale, transfer or other disposition of any real property that is listed on Schedule 8.10 hereto; and 
  
 (f) the sale, transfer, lease or other disposition of
Property of the Borrower or any Subsidiary (including any disposition of Property as part of a sale and leaseback transaction) aggregating for the Borrower and its Subsidiaries not more than $500,000 during any fiscal year of the Borrower.

  
 Section 8.11. Maintenance of Subsidiaries. The Borrower
shall not assign, sell or transfer, nor shall it permit any Subsidiary to issue, assign, sell or transfer, any shares of capital stock or other equity interests of a Subsidiary; provided, however, that the foregoing shall not operate to
prevent (a) Liens on the capital stock or other equity interests of Subsidiaries granted to the Administrative Agent pursuant to the Collateral Documents, (b) the issuance, sale, and transfer to any person of any shares of capital stock of a
Subsidiary solely for the purpose of qualifying, and to the extent legally necessary to qualify, such person as a director of such Subsidiary, and (c) any transaction permitted by Section 8.10(ii)(b) above. 
  
 Section 8.12. Dividends and Certain Other Restricted Payments. The
Borrower shall not, nor shall it permit any Subsidiary to, (a) declare or pay any dividends on or make any other distributions in respect of any class or series of its capital stock or other equity interests or (b) directly or indirectly purchase,
redeem, or otherwise acquire or retire any of its capital stock or other equity interests or any warrants (including, without limitation, those Warrants issued pursuant to, and as defined in, that Investment Agreement dated as of June 30, 1998, as
amended by a First Amendment thereto dated as of May 24, 2001), options, or similar instruments to acquire the same; provided, however, that the foregoing shall not operate to prevent (i) the making of dividends or distributions by any
Subsidiary to the Borrower, (ii) provided that no Default or Event of Default exists before or after giving effect thereto, the payment of cash dividends on the Borrower’s Series A Preferred Stock at a rate not exceeding the rate in effect on
the Closing Date, and in any event not to exceed $85,000 in the aggregate during any fiscal year, (iii) the making of dividends or distributions by the Borrower on any series of its preferred stock solely in the form of the issuance of additional
shares of such series of preferred stock, or (iv) the acceptance by the Borrower of shares of its capital stock (or all or any portion off a warrant to purchase shares of its capital stock) in satisfaction of the exercise price of any warrant to
acquire its shares. 
  
 Section 8.13. ERISA. The Borrower
shall, and shall cause each Subsidiary to, promptly pay and discharge all obligations and liabilities arising under ERISA of a character which if unpaid or unperformed could reasonably be expected to result in the imposition of a Lien against

  

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 any of its Property. The Borrower shall, and shall cause each Subsidiary to, promptly notify the Administrative Agent and
each Lender of: (a) the occurrence of any reportable event (as defined in ERISA) with respect to a Plan, (b) receipt of any notice from the PBGC of its intention to seek termination of any Plan or appointment of a trustee therefor, (c) its intention
to terminate or withdraw from any Plan, and (d) the occurrence of any event with respect to any Plan which would result in the incurrence by the Borrower or any Subsidiary of any material liability, fine or penalty, or any material increase in the
contingent liability of the Borrower or any Subsidiary with respect to any post-retirement Welfare Plan benefit. 
  
 Section 8.14. Compliance with Laws. (a) The Borrower shall, and shall cause each Subsidiary to, comply in all material respects with the
requirements of all federal, state, and local laws, rules, regulations, ordinances and orders applicable to or pertaining to its Property or business operations, where any such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its Property. 
  
 (b) Without limiting the agreements set forth in Section 8.14(a) above, the Borrower shall, and shall cause each Subsidiary to, at all times, do the following to the extent the failure to do so, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect: (i) comply in all material respects with, and maintain each of the Premises in compliance in all material respects with, all applicable Environmental Laws; (ii) require that
each tenant and subtenant, if any, of any of the Premises or any part thereof comply in all material respects with all Environmental Laws applicable to such Premises or part thereof; (iii) obtain and maintain in full force and effect all material
governmental approvals required by any applicable Environmental Law for operations at each of the Premises; (iv) cure any material violation by it or at any of the Premises of Environmental Laws applicable to such Premises or any part thereof; (v)
not allow the presence or operation at any of the Premises of any (1) landfill or dump or (2) hazardous waste management facility or solid waste disposal facility as defined pursuant to RCRA or any comparable state law; (vi) not manufacture, use,
generate, transport, treat, store, release, dispose or handle any Hazardous Material at any of the Premises except in the ordinary course of its business and in de minimis amounts; (vii) within 10 Business Days notify the Administrative Agent
in writing of and provide any reasonably requested documents upon learning of any of the following in connection with the Borrower or any Subsidiary or any of the Premises: (1) any material liability for response or corrective action, natural
resource damage or other harm pursuant to CERCLA, RCRA or any comparable state law; (2) any material Environmental Claim; (3) any material violation of an Environmental Law or material Release, threatened Release or disposal of a Hazardous Material;
(4) any restriction on the ownership, occupancy, use or transferability arising pursuant to any (x) Release, threatened Release or disposal of a Hazardous Material or (y) Environmental Law; or (5) any environmental, natural resource, health or
safety condition, which could reasonably be expected to have a Material Adverse Effect; (viii) conduct at its expense any investigation, study, sampling, testing, abatement, cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or abate any material Release, threatened Release or disposal of a Hazardous Material as required by any applicable Environmental Law, (ix) abide by and observe any restrictions on the use of the Premises imposed by any
governmental authority as set forth in a deed or other instrument affecting the Borrower’s or any Subsidiary’s interest therein; 
  

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 (x) promptly provide or otherwise make available to the Administrative Agent any reasonably requested environmental
record concerning the Premises which the Borrower or any Subsidiary possesses or can reasonably obtain; and (xi) perform, satisfy, and implement any operation or maintenance actions required by any governmental authority or Environmental Law, or
included in any no further action letter or covenant not to sue issued by any governmental authority under any Environmental Law. 
  
 Section 8.15. Burdensome Contracts With Affiliates. Except for the contracts, agreements or arrangements described on Schedule 6.14 hereto, the
Borrower shall not, nor shall it permit any Subsidiary to, enter into any contract, agreement or business arrangement with any of its Affiliates (other than with Wholly-owned Subsidiaries) on terms and conditions which are less favorable to the
Borrower or such Subsidiary than would be usual and customary in similar contracts, agreements or business arrangements between Persons not affiliated with each other, except for compensation agreements with officers and directors approved by the
compensation committee or audit committee of the Borrower’s board of directors (or any other committee of the Borrower’s board of directors comprised entirely of independent directors). 
  
 Section 8.16. No Changes in Fiscal Year. The fiscal year of the
Borrower and its Subsidiaries ends on June 30 of each year; and the Borrower shall not, nor shall it permit any Subsidiary to, change its fiscal year or the corresponding fiscal quarters from their present basis; provided, however, that the
Borrower may change such fiscal year to end on the last Saturday prior to June 30 of each year, with corresponding changes to its fiscal quarter ending dates. 
  

Section 8.17. Formation of Subsidiaries. Promptly upon the formation of any Subsidiary, the Borrower shall provide the Administrative Agent and
the Lenders notice thereof and timely comply with the requirements of Section 4 hereof (at which time Schedule 6.2 shall be deemed amended to include reference to such Subsidiary). 
  
 Section 8.18. Change in the Nature of Business. The Borrower shall not, nor shall it permit any Subsidiary to, engage
in any business or activity if as a result the general nature of the business of the Borrower or any Subsidiary would be changed in any material respect from the general nature of the business engaged in by it as of the Closing Date (provided,
however, that the Borrower may engage in any business or activity conducted by a Subsidiary as of the Closing Date following any merger of such Subsidiary into the Borrower pursuant to Section 8.10(b)). 
  
 Section 8.19. Use of Proceeds. The Borrower shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise permitted by, Section 6.4 hereof. 
  
 Section 8.20. No Restrictions. Except as provided herein, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly
create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of the Borrower or any Subsidiary to: (a) pay dividends or make any other distribution on any Subsidiary’s
capital stock or other equity interests owned by the Borrower or any other Subsidiary, (b) pay any indebtedness owed to the Borrower or any other Subsidiary, (c) make loans or advances to the Borrower or any other Subsidiary, (d) transfer any of its
Property to the Borrower or any other Subsidiary (other than any such restriction in a Capital Lease restricting 
  

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 the transfer of the property leased by the Borrower or such Subsidiary thereunder) or (e) guarantee the Obligations
and/or grant Liens on its assets to the Administrative Agent as required by the Loan Documents. 
  
 Section 8.21. Subordinated Debt and Seller Debt. The Borrower shall not, nor shall it permit any Subsidiary to, (a) amend or modify any of the
terms or conditions relating to the Seller Debt, (b) make any voluntary prepayment of Subordinated Debt or the Seller Debt or effect any voluntary redemption thereof, or (c) make any payment on account of Subordinated Debt or the Seller Debt which
is prohibited under the terms of any instrument or agreement (if any) subordinating the same to the Obligations. Notwithstanding the foregoing, the Borrower may refinance any Subordinated Debt, provided that (i) the replacement Subordinated
Debt is an amount equal to or less than the debt refinanced, and (ii) the replacement Subordinated Debt is with a lender or purchaser acceptable to the Administrative Agent and otherwise meets the criteria set forth in the definition of
“Subordinated Debt” herein. 
  
 The Borrower
shall not, nor shall it permit any Subsidiary to, without the prior written consent of the Administrative Agent, agree to any amendment, modification or supplement to the Subordinated Debt or the legal documents governing the terms thereof
(including, without limitation, the terms of any subordination agreement relating thereto) the effect of which is to (i) increase the maximum principal amount of the Subordinated Debt (unless such increase does not increase the amount of cash
interest expense or other debt service associated with the Subordinated Debt payable prior to repayment in full of the Obligations), (ii) increase the rate of interest on any fees or premium payable on any of the Subordinated Debt (unless such
increase does not increase the amount of cash interest expense or other debt service associated with the Subordinated Debt payable prior to repayment in full of the Obligations), (iii) change any date upon which any payments of principal or interest
on the Subordinated Debt are due to an earlier date, (iv) add or make more restrictive any event of default or any covenant with respect to the Subordinated Debt, (v) change the final maturity date of any Subordinated Debt to a date that is earlier
than the date which is 120 days after the maturity date of the Obligations, (vi) take any liens or security interests in assets of the Borrower or any Subsidiary or any other assets securing the Obligations, (vii) alter the subordination provisions
with respect to any Subordinated Debt, including, without limitation, subordinating the Subordinated Debt to any other debt, (viii) change any redemption or prepayment provisions of the Subordinated Debt to an earlier date or add any additional
events requiring such redemption or prepayment, or (ix) change or amend any other term of the legal documents governing the terms of the Subordinated Debt (including, without limitation, the terms of any subordination agreement relating thereto) if
such change or amendment would result in an Event of Default. 
  

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 Section 8.22. Financial Covenants. (a) Total Funded Debt/EBITDA Ratio. The Borrower shall
not, as of the last day of each fiscal quarter of the Borrower ending during the periods set forth below, permit the Total Funded Debt/EBITDA Ratio to be greater than the corresponding ratio set forth opposite such period: 
  

			
	 FOUR FISCAL QUARTER PERIODS ENDING

	  	TOTAL FUNDED DEBT/EBITDA
RATIO SHALL NOT BE GREATER
 THAN:


	 Closing Date through June 29, 2004
	  	2.75 to 1.0
	 June 30, 2004 through June 29, 2005
	  	2.40 to 1.0
	 June 30, 2005 through June 29, 2006
	  	2.10 to 1.0
	 June 30, 2006 through June 29, 2007
	  	1.80 to 1.0
	 June 30, 2007 and at all times thereafter
	  	1.50 TO 1.0

  
 (b) Total Senior
Funded Debt/EBITDA Ratio. The Borrower shall not, as of the last day of each fiscal quarter of the Borrower ending during the periods set forth below, permit the Total Senior Funded Debt/EBITDA Ratio to be greater than the corresponding ratio
set forth opposite such period: 
  

			
	 FOUR FISCAL QUARTER PERIODS ENDING

	  	 TOTAL SENIOR FUNDED DEBT/EBITDA
 RATIO SHALL NOT BE GREATER THAN:


	 Closing Date through June 29, 2004
	  	2.00 to 1.0
	 June 30, 2004 through June 29, 2005
	  	1.60 to 1.0
	 June 30, 2005 through June 29, 2006
	  	1.35 to 1.0
	 June 30, 2006 through June 29, 2007
	  	1.15 to 1.0
	 June 30, 2007 and at times thereafter
	  	1.00 to 1.0

  
 (c) Minimum
EBITDA. The Borrower shall not, as of the last day of each fiscal quarter of the Borrower ending during the periods set forth below, permit EBITDA for the four fiscal quarters of the Borrower ending on such day to be less than the corresponding
amount set forth opposite such day: 
  

				
	 FOUR FISCAL QUARTER PERIODS ENDING

	  	MINIMUM FOUR FISCAL
QUARTER EBITDA


	 December 31, 2003 through June 30, 2004
	  	$	11,000,000
	 July 1, 2004 through September 30, 2004
	  	$	11,250,000
	 October 1, 2004 through December 31, 2004
	  	$	11,500,000
	 January 1, 2005 through June 30, 2005
	  	$	12,000,000
	 July 1, 2005 through December 31, 2005
	  	$	12,500,000
	 January 1, 2006 through June 30, 2006
	  	$	13,000,000
	 July 1, 2006 through December 31, 2006
	  	$	13,500,000
	 January 1, 2007 and at all times thereafter
	  	$	14,000,000

  

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 (d) Fixed Charge Coverage Ratio. As of the last day of each fiscal quarter of the Borrower, the
Borrower shall maintain a ratio of (a) EBITDA for the four fiscal quarters of the Borrower then ended, less Net Capital Expenditures for such four fiscal quarters, to (b) Fixed Charges for the same four fiscal quarters then ended of not less than
1.10 to 1.0 for all four fiscal quarter periods ending on or before June 30, 2005, and 1.15 to 1.0 for all four fiscal quarter periods thereafter. 
  
 (e) Capital Expenditures. The Borrower shall not, nor shall it permit any of its Subsidiaries to, incur Capital Expenditures (net of any such
Capital Expenditures to the extent financed from the Net Cash Proceeds of an Event of Loss) in an amount in excess, during any fiscal year of the Borrower, of the amount set forth opposite such fiscal year below: 
  

				
	 FISCAL YEAR

	  	MAXIMUM CAPITAL
EXPENDITURES


	 2004
	  	$	6,000,000
	 2005
	  	$	6,500,000
	 2006
	  	$	7,000,000
	 2007
	  	$	7,500,000
	 2008
	  	$	8,000,000
	 2009
	  	$	9,000,000

  
 Section 8.23.
Post-Closing Obligations. 
  
 (a) Except to
the extent otherwise agreed by the Administrative Agent, the Borrower shall use its best efforts, and shall cause each Guarantor to use its best efforts, 
  

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 to cause each bank with which it has a deposit account in which the total amount on deposit in such
account exceeds $12,500 for any five consecutive Business Days (or such other period as is determined by the Administrative Agent and notified to the Borrower), to execute and deliver to the Administrative Agent a deposit account control agreement
in form and substance acceptable to the Administrative Agent with respect to such account; provided that, notwithstanding the foregoing, if an Event of Default has occurred and is continuing and the Administrative Agent or the Required
Lenders so require, the Borrower shall be obligated to provide deposit account control agreements for all deposit accounts of the Borrower and its Subsidiaries. 
  
 (b) The Borrower shall use its best efforts, and shall cause each Guarantor to use its best efforts, to
cause each landlord from whom it leases real property to execute and deliver to the Administrative Agent a landlord waiver in form and substance acceptable to the Administrative Agent, provided that neither the Borrower nor any Guarantor
shall be required to make any payment to any landlord or modify in any way materially detrimental to it any rights it may have under any lease with any landlord in order to obtain any such landlord waiver. 
  
 SECTION 9. EVENTS OF DEFAULT
AND REMEDIES. 
  
 Section
9.1. Events of Default. Any one or more of the following shall constitute an “Event of Default” hereunder: 
  
 (a) default in the payment when due of all or any part of the principal of any Note (whether at the stated maturity thereof or at any
other time provided for in this Agreement) or of any Reimbursement Obligation or default for a period of 5 Business Days in the payment when due of any interest, fee, or other Obligation payable hereunder or under any other Loan Document;

  
 (b) default in the observance or performance
of any covenant set forth in Section 8.1, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.16, 8.19, 8.20, 8.21 or 8.22 hereof or of any provision in any Loan Document dealing with the disposition or remittance of the proceeds of Collateral or requiring the
maintenance of insurance thereon; 
  
 (c) default
in the observance or performance of any other provision hereof or of any other Loan Document which is not remedied within 30 days after the earlier of (i) the date on which such failure shall first become known to any Responsible Officer of the
Borrower or (ii) written notice thereof is given to the Borrower by the Administrative Agent; 
  
 (d) any representation or warranty made herein or in any other Loan Document or in any certificate furnished to the Administrative Agent
or the Lenders pursuant hereto or thereto or in connection with any transaction contemplated hereby or thereby proves untrue in any material respect as of the date of the issuance or making or deemed making thereof; 
  

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 (e) any event occurs or condition exists (other than those described in subsections (a)
through (d) above) which is specified as an event of default under any of the other Loan Documents, or any of the Loan Documents shall for any reason not be or shall cease to be in full force and effect or is declared to be null and void, or any of
the Collateral Documents shall for any reason fail to create a valid and perfected first priority Lien in favor of the Administrative Agent in any Collateral purported to be covered thereby except as expressly permitted by the terms thereof, or any
Guarantor takes any action for the purpose of terminating, repudiating or rescinding any Loan Document executed by it or any of its obligations thereunder; 
  
 (f) any default or “change in control” (however defined) shall occur under any Indebtedness for Borrowed Money issued, assumed
or guaranteed by the Borrower or any Subsidiary aggregating in excess of $350,000, or under any indenture, agreement or other instrument under which the same may be issued, and such default or change in control shall continue for a period of time
sufficient to permit the acceleration of the maturity of, or to allow the holder thereof to require the Borrower to repay or repurchase, any such Indebtedness for Borrowed Money (whether or not such maturity is in fact accelerated), or any such
Indebtedness for Borrowed Money shall not be paid when due (whether by demand, lapse of time, acceleration or otherwise) and any applicable grace periods for such nonpayment provided for in such documents shall have expired; 
  
 (g) any money judgment or judgments (other than a money
judgment covered by insurance as to which the insurance company has not disclaimed or reserved the right to disclaim coverage), writ or writs or warrant or warrants of attachment, or any similar process or processes, shall be entered or filed
against the Borrower or any Guarantor, or against any of its Property, in an aggregate amount in excess of $500,000, and which remains undischarged, unvacated, unbonded or unstayed for a period of 30 days; 
  
 (h) the Borrower or any Subsidiary, or any member of its
Controlled Group, shall fail to pay when due an amount or amounts aggregating in excess of $500,000 which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having
aggregate Unfunded Vested Liabilities in excess of $500,000 (collectively, a “Material Plan”) shall be filed under Title IV of ERISA by the Borrower or any Subsidiary, or any other member of its Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any Material Plan or a proceeding shall be instituted by a fiduciary
of any Material Plan against the Borrower or any Subsidiary, or any member of its Controlled Group, to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed within 30 days thereafter; or a condition shall exist
by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Material Plan must be terminated; 
  
 (i) any Change of Control shall have occurred; 
  

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 (j) the Borrower or any Guarantor shall (i) have entered involuntarily against it an
order for relief under the United States Bankruptcy Code, as amended, (ii) become unable to pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for,
seek, consent to or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order
for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action in furtherance of any matter described
in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in Section 9.1(k) hereof; or 
  
 (k) a custodian, receiver, trustee, examiner, liquidator or similar official shall be appointed for the Borrower or any Guarantor, or any
substantial part of any of its Property, or a proceeding described in Section 9.1(j)(v) shall be instituted against the Borrower or any Guarantor, and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a
period of 60 days. 
  
 Section 9.2. Non-Bankruptcy
Defaults. When any Event of Default other than those described in subsection (j) or (k) of Section 9.1 hereof has occurred and is continuing, the Administrative Agent shall, by written notice to the Borrower: (a) if so directed by the Required
Lenders, terminate the remaining Commitments and all other obligations of the Lenders hereunder on the date stated in such notice (which may be the date thereof); (b) if so directed by the Required Lenders, declare the principal of and the accrued
interest on all outstanding Notes to be forthwith due and payable and thereupon all outstanding Notes, including both principal and interest thereon, shall be and become immediately due and payable together with all other amounts payable under the
Loan Documents without further demand, presentment, protest or notice of any kind; and (c) if so directed by the Required Lenders, demand that the Borrower immediately prepay to the Administrative Agent the full amount then available for drawing
under each or any Letter of Credit, and the Borrower agrees to immediately make such payment and acknowledges and agrees that the Lenders would not have an adequate remedy at law for failure by the Borrower to honor any such demand and that the
Administrative Agent, for the benefit of the Lenders, shall have the right to require the Borrower to specifically perform such undertaking whether or not any drawings or other demands for payment have been made under any Letter of Credit. The
Administrative Agent, after giving notice to the Borrower pursuant to Section 9.1(c) or this Section 9.2, shall also promptly send a copy of such notice to the other Lenders, but the failure to do so shall not impair or annul the effect of such
notice. 
  
 Section 9.3. Bankruptcy Defaults. When any
Event of Default described in subsections (j) or (k) of Section 9.1 hereof has occurred and is continuing, then all outstanding Notes shall immediately become due and payable together with all other amounts payable under the Loan Documents without
presentment, demand, protest or notice of any kind, the obligation of the Lenders to extend further credit pursuant to any of the terms hereof shall immediately 
  


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terminate and the Borrower shall immediately prepay to the Administrative Agent the full amount then available for drawing under all outstanding Letters of
Credit, the Borrower acknowledging and agreeing that the Lenders would not have an adequate remedy at law for failure by the Borrower to honor any such demand and that the Lenders, and the Administrative Agent on their behalf, shall have the right
to require the Borrower to specifically perform such undertaking whether or not any draws or other demands for payment have been made under any of the Letters of Credit. 
  
 Section 9.4. Collateral for Undrawn Letters of Credit. (a) If the prepayment of the amount available for drawing
under any or all outstanding Letters of Credit is required under Section 1.9(b) or under Section 9.2 or 9.3 above, the Borrower shall forthwith pay the amount required to be so prepaid, to be held by the Administrative Agent as provided in
subsection (b) below. 
  
 (b) All amounts prepaid pursuant to
subsection (a) above shall be held by the Administrative Agent in one or more separate collateral accounts (each such account, and the credit balances, properties, and any investments from time to time held therein, and any substitutions for such
account, any certificate of deposit or other instrument evidencing any of the foregoing and all proceeds of and earnings on any of the foregoing being collectively called the “Collateral Account”) as security for, and for
application by the Administrative Agent (to the extent available) to, the reimbursement of any payment under any Letter of Credit then or thereafter made by the Administrative Agent, and to the payment of the unpaid balance of any other Obligations.
The Collateral Account shall be held in the name of and subject to the exclusive dominion and control of the Administrative Agent for the benefit of the Administrative Agent, the Lenders, and the L/C Issuer. If and when requested by the Borrower,
the Administrative Agent shall invest funds held in the Collateral Account from time to time in direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America with a
remaining maturity of one year or less, provided that the Administrative Agent is irrevocably authorized to sell investments held in the Collateral Account when and as required to make payments out of the Collateral Account for application to
amounts due and owing from the Borrower to the L/C Issuer, the Administrative Agent or the Lenders; provided, however, that if (i) the Borrower shall have made payment of all such obligations referred to in subsection (a) above, (ii) no other
Obligations remain due and unpaid hereunder and (iii) any Letter of Credit with respect to which the Borrower has prepaid or cash collateralized its obligations with respect thereto shall terminate or the stated amount thereof shall be reduced, then
the Administrative Agent shall release to the Borrower from the Collateral Account that amount of the funds contained therein which exceeds the aggregate stated amount of all Letters of Credit remaining outstanding after giving effect to such
termination or reduction. 
  
 Section 9.5. Notice of
Default. The Administrative Agent shall give notice to the Borrower under Section 9.1(c) hereof promptly upon being requested to do so by any Lender and shall thereupon notify all the Lenders thereof. 
  
 Section 9.6. Expenses. The Borrower agrees to pay to the
Administrative Agent and each Lender, and any other holder of any Note outstanding hereunder, all costs and expenses 
  

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reasonably incurred or paid by the Administrative Agent and such Lender or any such holder, including reasonable attorneys’ fees and court costs, in
connection with any Default or Event of Default hereunder or in connection with the enforcement of any of the Loan Documents (including all such costs and expenses incurred in connection with any proceeding under the United States Bankruptcy Code
involving the Borrower or any Subsidiary as a debtor thereunder). 
  
 SECTION 10. CHANGE IN CIRCUMSTANCES. 
  
 Section 10.1. Change of Law. Notwithstanding any other provisions of this Agreement or any Note, if at any time any change in applicable law or
regulation or in the interpretation thereof makes it unlawful for any Lender to make or continue to maintain any Eurodollar Loans or to perform its obligations as contemplated hereby, such Lender shall promptly give notice thereof to the Borrower
and such Lender’s obligations to make or maintain Eurodollar Loans under this Agreement shall be suspended until it is no longer unlawful for such Lender to make or maintain Eurodollar Loans. The Borrower shall prepay on demand the outstanding
principal amount of any such affected Eurodollar Loans, together with all interest accrued thereon and all other amounts then due and payable to such Lender under this Agreement; provided, however, subject to all of the terms and conditions
of this Agreement, the Borrower may then elect to borrow the principal amount of the affected Eurodollar Loans from such Lender by means of Base Rate Loans from such Lender, which Base Rate Loans shall not be made ratably by the Lenders but only
from such affected Lender. 
  
 Section 10.2. Unavailability of
Deposits or Inability to Ascertain, or Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for any Borrowing of Eurodollar Loans: 
  

(a) the Administrative Agent determines that deposits in U.S. Dollars (in the applicable amounts) are not being offered to it in the
interbank eurodollar market for such Interest Period, or that by reason of circumstances affecting the interbank eurodollar market adequate and reasonable means do not exist for ascertaining the applicable LIBOR, or 
  
 (b) the Required Lenders advise the Administrative Agent
that (i) LIBOR as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Lenders of funding their Eurodollar Loans for such Interest Period or (ii) that the making or funding of Eurodollar Loans become
impracticable, 
  
 then the Administrative Agent shall forthwith give notice
thereof to the Borrower and the Lenders, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, the obligations of the Lenders to make Eurodollar Loans shall be
suspended. 
  
 Section 10.3. Increased Cost and Reduced
Return. (a) If, on or after the date hereof, the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or 

 

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comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such authority, central bank or comparable agency: 
  
 (i) shall subject any Lender (or its Lending Office) to any tax, duty or other charge with respect to its Eurodollar Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any Reimbursement Obligations owed to it or its obligation to make Eurodollar Loans, issue a Letter of Credit, or to participate therein, or shall change the basis of taxation of payments to
any Lender (or its Lending Office) of the principal of or interest on its Eurodollar Loans, Letter(s) of Credit, or participations therein or any other amounts due under this Agreement or any other Loan Document in respect of its Eurodollar Loans,
Letter(s) of Credit, any participation therein, any Reimbursement Obligations owed to it, or its obligation to make Eurodollar Loans, or issue a Letter of Credit, or acquire participations therein (except for changes in the rate of tax on the
overall net income of such Lender or its Lending Office imposed by the jurisdiction in which such Lender’s principal executive office or Lending Office is located); or 
  
 (ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding with respect to any Eurodollar Loans any such requirement included in an applicable Eurodollar Reserve Percentage) against assets
of, deposits with or for the account of, or credit extended by, any Lender (or its Lending Office) or shall impose on any Lender (or its Lending Office) or on the interbank market any other condition affecting its Eurodollar Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any Reimbursement Obligation owed to it, or its obligation to make Eurodollar Loans, or to issue a Letter of Credit, or to participate therein; 
  
 and the result of any of the foregoing is to increase the cost to such Lender (or its Lending
Office) of making or maintaining any Eurodollar Loan, issuing or maintaining a Letter of Credit, or participating therein, or to reduce the amount of any sum received or receivable by such Lender (or its Lending Office) under this Agreement or under
any other Loan Document with respect thereto, by an amount deemed by such Lender to be material, then, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall be obligated to pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased cost or reduction. 
  
 (b) If, after the date hereof, any Lender or the Administrative Agent shall have determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Lending Office) or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency,
has had the effect of reducing the rate of return on such Lender’s or such corporation’s 
  

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capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, within 15 days after demand by such
Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. 
  
 (c) A certificate of a Lender claiming compensation under this Section 10.3 and setting forth the additional amount or
amounts to be paid to it hereunder and the calculation thereof shall be conclusive if reasonably made and determined. In determining such amount, such Lender may use any reasonable averaging and attribution methods. 
  
 Section 10.4. Lending Offices. Each Lender may, at its option, elect
to make its Loans hereunder at the branch, office or affiliate specified on the appropriate signature page hereof (each a “Lending Office”) for each type of Loan available hereunder or at such other of its branches, offices or
affiliates as it may from time to time elect and designate in a written notice to the Borrower and the Administrative Agent. To the extent reasonably possible, a Lender shall designate an alternative branch or funding office with respect to its
Eurodollar Loans to reduce any liability of the Borrower to such Lender under Section 10.3 hereof or to avoid the unavailability of Eurodollar Loans under Section 10.2 hereof, so long as such designation is not otherwise disadvantageous to the
Lender. 
  
 Section 10.5. Discretion of Lender as to Manner of
Funding. Notwithstanding any other provision of this Agreement, each Lender shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder with respect to Eurodollar Loans shall be made as if each Lender had actually funded and maintained each Eurodollar Loan through the purchase of deposits in the interbank eurodollar market having a maturity
corresponding to such Loan’s Interest Period, and bearing an interest rate equal to LIBOR for such Interest Period. 
  
 SECTION 11. THE ADMINISTRATIVE AGENT. 
  
 Section 11.1. Appointment and Authorization of Administrative Agent. Each Lender hereby appoints Harris Trust and
Savings Bank as the Administrative Agent under the Loan Documents and hereby authorizes the Administrative Agent to take such action as Administrative Agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto. The Lenders expressly agree that the Administrative Agent is not acting as a fiduciary of the Lenders in respect of the Loan Documents, the
Borrower or otherwise, and nothing herein or in any of the other Loan Documents shall result in any duties or obligations on the Administrative Agent or any of the Lenders except as expressly set forth herein. 
  
 Section 11.2. Administrative Agent and its Affiliates. The
Administrative Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any 
  

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other Lender and may exercise or refrain from exercising such rights and power as though it were not the Administrative Agent, and the Administrative Agent
and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower as if it were not the Administrative Agent under the Loan Documents. The term
“Lender” as used herein and in all other Loan Documents, unless the context otherwise clearly requires, includes the Administrative Agent in its individual capacity as a Lender. References in Section 1 hereof to the Administrative
Agent’s Loans, or to the amount owing to the Administrative Agent for which an interest rate is being determined, refer to the Administrative Agent in its individual capacity as a Lender. 
  
 Section 11.3. Action by Administrative Agent. If the Administrative
Agent receives from the Borrower a written notice of an Event of Default pursuant to Section 8.5 hereof, the Administrative Agent shall promptly give each of the Lenders written notice thereof. The obligations of the Administrative Agent under the
Loan Documents are only those expressly set forth therein. Without limiting the generality of the foregoing, the Administrative Agent shall not be required to take any action hereunder with respect to any Default or Event of Default, except as
expressly provided in Sections 9.2 and 9.5. Upon the occurrence of an Event of Default, the Administrative Agent shall take such action to enforce its Lien on the Collateral and to preserve and protect the Collateral as may be directed by the
Required Lenders. Unless and until the Required Lenders give such direction, the Administrative Agent may (but shall not be obligated to) take or refrain from taking such actions as it deems appropriate and in the best interest of all the Lenders.
In no event, however, shall the Administrative Agent be required to take any action in violation of applicable law or of any provision of any Loan Document, and the Administrative Agent shall in all cases be fully justified in failing or refusing to
act hereunder or under any other Loan Document unless it first receives any further assurances of its indemnification from the Lenders that it may require, including prepayment of any related expenses and any other protection it requires against any
and all costs, expense, and liability which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall be entitled to assume that no Default or Event of Default exists unless notified in writing
to the contrary by a Lender or the Borrower. In all cases in which the Loan Documents do not require the Administrative Agent to take specific action, the Administrative Agent shall be fully justified in using its discretion in failing to take or in
taking any action thereunder. Any instructions of the Required Lenders, or of any other group of Lenders called for under the specific provisions of the Loan Documents, shall be binding upon all the Lenders and the holders of the Obligations.

  
 Section 11.4. Consultation with Experts. The
Administrative Agent may consult with legal counsel, independent public accountants, and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts. 
  
 Section 11.5. Liability of
Administrative Agent; Credit Decision. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or not taken by it in connection with the Loan Documents: (i) with the consent
or at the request of the Required Lenders or (ii) in the absence of its own gross negligence or willful misconduct. Neither the Administrative Agent nor any of its directors, officers, agents or 
  

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employees shall be responsible for or have any duty to ascertain, inquire into or verify: (i) any statement, warranty or representation made in connection
with this Agreement, any other Loan Document or any Credit Event; (ii) the performance or observance of any of the covenants or agreements of the Borrower or any Guarantor contained herein or in any other Loan Document; (iii) the satisfaction of any
condition specified in Section 7 hereof, except receipt of items required to be delivered to the Administrative Agent; or (iv) the validity, effectiveness, genuineness, enforceability, perfection, value, worth or collectibility hereof or of any
other Loan Document or of any other documents or writing furnished in connection with any Loan Document or of any Collateral; and the Administrative Agent makes no representation of any kind or character with respect to any such matter mentioned in
this sentence. The Administrative Agent may execute any of its duties under any of the Loan Documents by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, the Borrower, or any other Person for the
default or misconduct of any such agents or attorneys-in-fact selected with reasonable care. The Administrative Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, other document or statement (whether
written or oral) believed by it to be genuine or to be sent by the proper party or parties. In particular and without limiting any of the foregoing, the Administrative Agent shall have no responsibility for confirming the accuracy of any compliance
certificate or other document or instrument received by it under the Loan Documents. The Administrative Agent may treat the payee of any Note as the holder thereof until written notice of transfer shall have been filed with the Administrative Agent
signed by such payee in form satisfactory to the Administrative Agent. Each Lender acknowledges that it has independently and without reliance on the Administrative Agent or any other Lender, and based upon such information, investigations and
inquiries as it deems appropriate, made its own credit analysis and decision to extend credit to the Borrower in the manner set forth in the Loan Documents. It shall be the responsibility of each Lender to keep itself informed as to the
creditworthiness of the Borrower and the Guarantors, and the Administrative Agent shall have no liability to any Lender with respect thereto. 
  
 Section 11.6. Indemnity. The Lenders shall ratably, in accordance with their respective Percentages, indemnify and hold the Administrative Agent,
and its directors, officers, employees, agents, and representatives harmless from and against any liabilities, losses, costs or expenses suffered or incurred by it under any Loan Document or in connection with the transactions contemplated thereby,
regardless of when asserted or arising, except to the extent they are promptly reimbursed for the same by the Borrower and except to the extent that any event giving rise to a claim was caused by the gross negligence or willful misconduct of the
party seeking to be indemnified. The obligations of the Lenders under this Section shall survive termination of this Agreement. The Administrative Agent shall be entitled to offset amounts received for the account of a Lender under this Agreement
against unpaid amounts due from such Lender to the Administrative Agent hereunder (whether as fundings of participations, indemnities or otherwise), but shall not be entitled to offset against amounts owed to the Administrative Agent by any Lender
arising outside of this Agreement and the other Loan Documents. 
  
 Section 11.7. Resignation of Administrative Agent and Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation of the
Administrative Agent, the Required Lenders shall have the right to appoint a successor Administrative Agent subject, if no Default or 
  

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Event of Default then exists, to the reasonable consent of the Borrower. If no successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent’s giving of notice of resignation then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent, which may be any Lender hereunder or any commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $200,000,000. Upon the acceptance of its
appointment as the Administrative Agent hereunder, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent under the Loan Documents, and the retiring
Administrative Agent shall be discharged from its duties and obligations thereunder. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section 11 and all protective provisions of the
other Loan Documents shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent, but no successor Administrative Agent shall in any event be liable or responsible for any actions of its
predecessor. If the Administrative Agent resigns and no successor shall have been appointed (and consented to by the Borrower, if such consent is required hereby), the rights and obligations of such Administrative Agent shall be automatically
assumed by the Required Lenders and (i) the Borrower shall be directed to make all payments due each Lender hereunder directly to such Lender and (ii) the Administrative Agent’s rights in the Collateral Documents shall be assigned
without representation, recourse or warranty to the Lenders as their interests may appear. 
  
 Section 11.8. L/C Issuer. The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith. The L/C Issuer shall have all of the
benefits and immunities (i) provided to the Administrative Agent in this Section 11 with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the
Applications pertaining to such Letters of Credit as fully as if the term “Administrative Agent”, as used in this Section 11, included the L/C Issuer with respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to such L/C Issuer. 
  
 Section 11.9.
Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements. By virtue of a Lender’s execution of this Agreement or an assignment agreement pursuant to Section 13.12 hereof, as the case may be, any Affiliate of such
Lender with whom the Borrower or any Subsidiary has entered into an agreement creating Hedging Liability or Funds Transfer and Deposit Account Liability shall be deemed a Lender party hereto for purposes of any reference in a Loan Document to the
parties for whom the Administrative Agent is acting, it being understood and agreed that the rights and benefits of such Affiliate under the Loan Documents consist exclusively of such Affiliate’s right to share in payments and collections out
of the Collateral and the Guaranties as more fully set forth in Section 3.1 hereof. In connection with any such distribution of payments and collections, the Administrative Agent shall be entitled to assume no amounts are due to any Lender or its
Affiliate with respect to Hedging Liability or Funds Transfer and Deposit Account Liability unless such Lender has notified the Administrative Agent in writing of the amount of any such liability owed to it or its Affiliate prior to such
distribution. 
  

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 Section 11.10. Designation of Additional Agents. The Administrative Agent shall have the
continuing right, for purposes hereof, at any time and from time to time to designate one or more of the Lenders (and/or its or their Affiliates) as “syndication agents,” “documentation agents,” “arrangers,” or other
designations for purposes hereto, but such designation shall have no substantive effect, and such Lenders and their Affiliates shall have no additional powers, duties or responsibilities as a result thereof. 
  
 Section 11.11. Authorization to Release or Subordinate or Limit Liens.
The Administrative Agent is hereby irrevocably authorized by each of the Lenders to (a) release any Lien covering any Collateral that is sold, transferred, or otherwise disposed of in accordance with the terms and conditions of this Agreement and
the relevant Collateral Documents (including a sale, transfer, or disposition permitted by the terms of Section 8.10 hereof or which has otherwise been consented to in accordance with Section 13.13 hereof), (b) release or subordinate any Lien on
Collateral consisting of goods financed with purchase money indebtedness or under a Capital Lease to the extent such purchase money indebtedness or Capitalized Lease Obligation, and the Lien securing the same, are permitted by Sections 8.7(b) and
8.8(d) hereof, and (c) reduce or limit the amount of the indebtedness secured by any particular item of Collateral to an amount not less than the estimated value thereof to the extent necessary to reduce mortgage registry, filing and similar tax.

  
 Section 11.12. Authorization to Enter into, and Enforcement
of, the Collateral Documents. The Administrative Agent is hereby irrevocably authorized by each of the Lenders to execute and deliver the Collateral Documents on behalf of each of the Lenders and their Affiliates and to take such action and
exercise such powers under the Collateral Documents as the Administrative Agent considers appropriate, provided the Administrative Agent shall not amend the Collateral Documents unless such amendment is agreed to in writing by the Required
Lenders. Each Lender acknowledges and agrees that it will be bound by the terms and conditions of the Collateral Documents upon the execution and delivery thereof by the Administrative Agent. Except as otherwise specifically provided for herein, no
Lender (or its Affiliates) other than the Administrative Agent shall have the right to institute any suit, action or proceeding in equity or at law for the foreclosure or other realization upon any Collateral or for the execution of any trust or
power in respect of the Collateral or for the appointment of a receiver or for the enforcement of any other remedy under the Collateral Documents; it being understood and intended that no one or more of the Lenders (or their Affiliates) shall have
any right in any manner whatsoever to affect, disturb or prejudice the Lien of the Administrative Agent (or any security trustee therefor) under the Collateral Documents by its or their action or to enforce any right thereunder, and that all
proceedings at law or in equity shall be instituted, had, and maintained by the Administrative Agent (or its security trustee) in the manner provided for in the relevant Collateral Documents for the benefit of the Lenders and their Affiliates.

  
 SECTION 12. THE GUARANTEES.

  
 Section 12.1. The Guarantees. To induce the Lenders to
provide the credits described herein and in consideration of benefits expected to accrue to the Borrower by reason of the Commitments and for other good and valuable consideration, receipt of which is hereby acknowledged, each Guarantor (including
any Subsidiary formed or acquired after the Closing 
  

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Date executing an Additional Guarantor Supplement in the form attached hereto as Exhibit F or such other form acceptable to the Administrative Agent) hereby
unconditionally and irrevocably guarantees jointly and severally to the Administrative Agent, the Lenders, and their Affiliates, the due and punctual payment of all present and future Obligations, Hedging Liability, and Funds Transfer and Deposit
Account Liability, including, but not limited to, the due and punctual payment of principal of and interest on the Notes, the Reimbursement Obligations, and the due and punctual payment of all other Obligations now or hereafter owed by the Borrower
under the Loan Documents and the due and punctual payment of all Hedging Liability and Funds Transfer and Deposit Account Liability, in each case as and when the same shall become due and payable, whether at stated maturity, by acceleration, or
otherwise, according to the terms hereof and thereof (including interest which, but for the filing of a petition in bankruptcy, would otherwise accrue on any such indebtedness, obligation, or liability). In case of failure by the Borrower or other
obligor punctually to pay any Obligations, Hedging Liability, or Funds Transfer and Deposit Account Liability guaranteed hereby, each Guarantor hereby unconditionally agrees to make such payment or to cause such payment to be made punctually as and
when the same shall become due and payable, whether at stated maturity, by acceleration, or otherwise, and as if such payment were made by the Borrower or such obligor. 
  
 Section 12.2. Guarantee Unconditional. The obligations of each Guarantor under this Section 12 shall be unconditional
and absolute and, without limiting the generality of the foregoing, shall not be released, discharged, or otherwise affected by: 
  
 (a) any extension, renewal, settlement, compromise, waiver, or release in respect of any obligation of the Borrower or other obligor or of
any other guarantor under this Agreement or any other Loan Document or by operation of law or otherwise; 
  
 (b) any modification or amendment of or supplement to this Agreement or any other Loan Document or any agreement relating to Hedging
Liability or Funds Transfer and Deposit Account Liability; 
  
 (c) any change in the corporate existence, structure, or ownership of, or any insolvency, bankruptcy, reorganization, or other similar proceeding affecting, the Borrower or other obligor, any other guarantor, or any
of their respective assets, or any resulting release or discharge of any obligation of the Borrower or other obligor or of any other guarantor contained in any Loan Document; 
  
 (d) the existence of any claim, set-off, or other rights which the Borrower or other obligor or any other
guarantor may have at any time against the Administrative Agent, any Lender, or any other Person, whether or not arising in connection herewith; 
  
 (e) any failure to assert, or any assertion of, any claim or demand or any exercise of, or failure to exercise, any rights or remedies
against the Borrower or other obligor, any other guarantor, or any other Person or Property; 
  

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 (f) any application of any sums by whomsoever paid or howsoever realized to any
obligation of the Borrower or other obligor, regardless of what obligations of the Borrower or other obligor remain unpaid; 
  
 (g) any invalidity or unenforceability relating to or against the Borrower or other obligor or any other guarantor for any reason of this
Agreement or of any other Loan Document or any agreement relating to Hedging Liability or Funds Transfer and Deposit Account Liability or any provision of applicable law or regulation purporting to prohibit the payment by the Borrower or other
obligor or any other guarantor of the principal of or interest on any Note or any Reimbursement Obligation or any other amount payable under the Loan Documents or any agreement relating to Hedging Liability or Funds Transfer and Deposit Account
Liability; or 
  
 (h) any other act or omission
to act or delay of any kind by the Administrative Agent, any Lender, or any other Person or any other circumstance whatsoever that might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the obligations of any
Guarantor under this Section 12. 
  
 Section 12.3. Discharge
Only upon Payment in Full; Reinstatement in Certain Circumstances. Each Guarantor’s obligations under this Section 12 shall remain in full force and effect until the Commitments are terminated, all Letters of Credit have expired, and the
principal of and interest on the Notes and all other amounts payable by the Borrower and the Guarantors under this Agreement and all other Loan Documents and, if then outstanding and unpaid, all Hedging Liability and Funds Transfer and Deposit
Account Liability shall have been paid in full. If at any time any payment of the principal of or interest on any Note or any Reimbursement Obligation or any other amount payable by the Borrower or other obligor or any Guarantor under the Loan
Documents or any agreement relating to Hedging Liability or Funds Transfer and Deposit Account Liability is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy, or reorganization of the Borrower or other obligor or of
any guarantor, or otherwise, each Guarantor’s obligations under this Section 12 with respect to such payment shall be reinstated at such time as though such payment had become due but had not been made at such time. 
  
 Section 12.4. Subrogation. Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made hereunder, or otherwise, until all the Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability shall have been paid in full subsequent to the
termination of all the Commitments and expiration of all Letters of Credit. If any amount shall be paid to a Guarantor on account of such subrogation rights at any time prior to the later of (x) the payment in full of the Obligations, Hedging
Liability, and Funds Transfer and Deposit Account Liability and all other amounts payable by the Borrower hereunder and the other Loan Documents and (y) the termination of the Commitments and expiration of all Letters of Credit, such amount shall be
held in trust for the benefit of the Administrative Agent and the Lenders (and their Affiliates) and shall forthwith be paid to the Administrative Agent for the benefit of the Lenders (and their Affiliates) or be credited and applied upon the
Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability, whether matured or unmatured, in accordance with the terms of this Agreement. 
  

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 Section 12.5. Waivers. Each Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest, and any notice not provided for herein, as well as any requirement that at any time any action be taken by the Administrative Agent, any Lender, or any other Person against the Borrower or other obligor, another guarantor, or any other
Person. 
  
 Section 12.6. Limit on Recovery.
Notwithstanding any other provision hereof, the right of recovery against each Guarantor under this Section 12 shall not exceed $1.00 less than the lowest amount which would render such Guarantor’s obligations under this Section 12 void or
voidable under applicable law, including, without limitation, fraudulent conveyance law. 
  
 Section 12.7. Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Borrower or other obligor under this Agreement or any other Loan Document, or under any agreement
relating to Hedging Liability or Funds Transfer and Deposit Account Liability, is stayed upon the insolvency, bankruptcy or reorganization of the Borrower or such obligor, all such amounts otherwise subject to acceleration under the terms of this
Agreement or the other Loan Documents, or under any agreement relating to Hedging Liability or Funds Transfer and Deposit Account Liability, shall nonetheless be payable by the Guarantors hereunder forthwith on demand by the Administrative Agent
made at the request of the Required Lenders. 
  
 Section 12.8.
Benefit to Guarantors. The Borrower and the Guarantors are engaged in related businesses and integrated to such an extent that the financial strength and flexibility of the Borrower has a direct impact on the success of each Guarantor. Each
Guarantor will derive substantial direct and indirect benefit from the extensions of credit hereunder. 
  
 Section 12.9. Guarantor Covenants. Each Guarantor shall take such action as the Borrower is required by this Agreement to cause such Guarantor to
take, and shall refrain from taking such action as the Borrower is required by this Agreement to prohibit such Guarantor from taking. 
  

	SECTION	13. MISCELLANEOUS. 

  
 Section 13.1. Withholding Taxes. (a) Payments Free of Withholding. Except as otherwise required by law and subject to Section 13.1(b)
hereof, each payment by the Borrower and the Guarantors under this Agreement or the other Loan Documents shall be made without withholding for or on account of any present or future taxes (other than overall net income taxes on the recipient)
imposed by or within the jurisdiction in which the Borrower or such Guarantor is domiciled, any jurisdiction from which the Borrower or such Guarantor makes any payment, or (in each case) any political subdivision or taxing authority thereof or
therein. If any such withholding is so required, the Borrower or such Guarantor shall make the withholding, pay the amount withheld to the appropriate governmental authority before penalties attach thereto or interest accrues thereon, and forthwith
pay such additional amount as may be necessary to ensure that the net amount actually received by each Lender and the Administrative Agent free and clear 
  

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 of such taxes (including such taxes on such additional amount) is equal to the amount which that Lender or the
Administrative Agent (as the case may be) would have received had such withholding not been made. If the Administrative Agent or any Lender pays any amount in respect of any such taxes, penalties or interest, the Borrower or such Guarantor shall
reimburse the Administrative Agent or such Lender for that payment on demand in the currency in which such payment was made. If the Borrower or such Guarantor pays any such taxes, penalties or interest, it shall deliver official tax receipts
evidencing that payment or certified copies thereof to the Lender or Administrative Agent on whose account such withholding was made (with a copy to the Administrative Agent if not the recipient of the original) on or before the thirtieth day after
payment. 
  
 (b) U.S. Withholding Tax Exemptions. Each
Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Borrower and the Administrative Agent on or before the date the initial Credit Event is made hereunder or, if later, the date
such financial institution becomes a Lender hereunder, two duly completed and signed copies of (i) either Form W-8 BEN (relating to such Lender and entitling it to a complete exemption from withholding under the Code on all amounts to be received by
such Lender, including fees, pursuant to the Loan Documents and the Obligations) or Form W-8 ECI (relating to all amounts to be received by such Lender, including fees, pursuant to the Loan Documents and the Obligations) of the United States
Internal Revenue Service or (ii) solely if such Lender is claiming exemption from United States withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a Form W-8 BEN, or any successor
form prescribed by the Internal Revenue Service, and a certificate representing that such Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code). Thereafter and from time to time, each Lender shall submit to the Borrower and the Administrative Agent such
additional duly completed and signed copies of one or the other of such Forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) and such other certificates as may be (i) requested by the
Borrower in a written notice, directly or through the Administrative Agent, to such Lender and (ii) required under then-current United States law or regulations to avoid or reduce United States withholding taxes on payments in respect of all amounts
to be received by such Lender, including fees, pursuant to the Loan Documents or the Obligations. Upon the request of the Borrower or the Administrative Agent, each Lender that is a United States person (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrower and the Administrative Agent a certificate to the effect that it is such a United States person. 
  
 (c) Inability of Lender to Submit Forms. If any Lender determines, as a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to the Borrower or the Administrative Agent any form or certificate that such Lender is obligated to submit pursuant to subsection (b) of this Section 13.1 or that such
Lender is required to withdraw or cancel any such form or certificate previously submitted or any such form or certificate otherwise becomes ineffective or inaccurate, such Lender shall promptly notify the Borrower and Administrative Agent of such
fact in writing and the Lender shall to that extent not be obligated to provide any such form or certificate and will be entitled to withdraw or cancel any affected form or certificate, as applicable. 
  

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 Section 13.2. No Waiver, Cumulative Remedies. No delay or failure on the part of the
Administrative Agent or any Lender or on the part of the holder or holders of any of the Obligations in the exercise of any power or right under any Loan Document shall operate as a waiver thereof or as an acquiescence in any default, nor shall any
single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right. The rights and remedies hereunder of the Administrative Agent, the Lenders and of the holder or holders of
any of the Obligations are cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise have. 
  
 Section 13.3. Non-Business Days. If any payment hereunder becomes due and payable on a day which is not a Business Day, the due date of such
payment shall be extended to the next succeeding Business Day on which date such payment shall be due and payable. In the case of any payment of principal falling due on a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect, which accrued amount shall be due and payable on the next scheduled date for the payment of interest. 
  
 Section 13.4. Documentary Taxes. The Borrower agrees to pay on demand any documentary, stamp or similar taxes payable
in respect of this Agreement or any other Loan Document, including interest and penalties, in the event any such taxes are assessed, irrespective of when such assessment is made and whether or not any credit is then in use or available hereunder.

  
 Section 13.5. Survival of Representations. All
representations and warranties made herein or in any other Loan Document or in certificates given pursuant hereto or thereto shall survive the execution and delivery of this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any credit is in use or available hereunder. 
  
 Section 13.6. Survival of Indemnities. All indemnities and other provisions relative to reimbursement to the Lenders of amounts sufficient
to protect the yield of the Lenders with respect to the Loans and Letters of Credit, including, but not limited to, Sections 1.12, 10.3, and 13.15 hereof, shall survive the termination of this Agreement and the other Loan Documents and the payment
of the Obligations. 
  
 Section 13.7. Sharing of Set-Off.
Each Lender agrees with each other Lender a party hereto that if such Lender shall receive and retain any payment, whether by set-off or application of deposit balances or otherwise, on any of the Loans or Reimbursement Obligations in excess of its
ratable share of payments on all such Obligations then outstanding to the Lenders, then such Lender shall purchase for cash at face value, but without recourse, ratably from each of the other Lenders such amount of the Loans or Reimbursement
Obligations, or participations therein, held by each such other Lenders (or interest therein) as shall be necessary to cause such Lender to share such excess payment ratably with all the other Lenders; provided, however, that if any such

  

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 purchase is made by any Lender, and if such excess payment or part thereof is thereafter recovered from such purchasing
Lender, the related purchases from the other Lenders shall be rescinded ratably and the purchase price restored as to the portion of such excess payment so recovered, but without interest. For purposes of this Section, amounts owed to or recovered
by the L/C Issuer in connection with Reimbursement Obligations in which Lenders have been required to fund their participation shall be treated as amounts owed to or recovered by the L/C Issuer as a Lender hereunder. 
  
 Section 13.8. Notices. Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing (including, without limitation, notice by telecopy) and shall be given to the relevant party at its address or telecopier number set forth below, or such other address or
telecopier number as such party may hereafter specify by notice to the Administrative Agent and the Borrower given by courier, by United States certified or registered mail, by telecopy or by other telecommunication device capable of creating a
written record of such notice and its receipt. Notices under the Loan Documents to the Lenders and the Administrative Agent shall be addressed to their respective addresses or telecopier numbers set forth on the signature pages hereof, and to the
Borrower or any Guarantor to: 
  
 Nobel Learning
Communities, Inc. 
 1615 West Chester Pike 
 West Chester, Pennsylvania 19382 
 Attention:        Chief Financial Officer 
 Telecopy:         (484) 947-2003 
  
 With a copy (not constituting notice) to: 
  
 Nobel Learning Communities, Inc. 
 1615 West Chester Pike 
 West Chester, Pennsylvania 19382 
 Attention:        General Counsel 
 Telecopy:         (484) 947-2003 
  
 Each such notice, request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified in this Section or on the signature pages hereof, in either case during normal business hours, and a confirmation of such telecopy has been received by the sender, (ii)
if given by mail, 5 days after such communication is deposited in the mail, certified or registered with return receipt requested, addressed as aforesaid or (iii) if given by any other means, when delivered at the addresses specified in this Section
or on the signature pages hereof; provided that any notice given pursuant to Section 1 hereof shall be effective only upon receipt. 
  
 Section 13.9. Counterparts. This Agreement may be executed in any number of counterparts, and by the different parties hereto on separate
counterpart signature pages, and all such counterparts taken together shall be deemed to constitute one and the same instrument. 
  

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 Section 13.10. Successors and Assigns. This Agreement shall be binding upon the Borrower and the
Guarantors and their successors and assigns, and shall inure to the benefit of the Administrative Agent and each of the Lenders and the benefit of their respective successors and assigns, including any subsequent holder of any of the Obligations.
The Borrower and the Guarantors may not assign any of their rights or obligations under any Loan Document without the written consent of all of the Lenders. 
  
 Section 13.11. Participants. Each Lender shall have the right at its own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations and/or Commitments held by such Lender at any time and from time to time to one or more other Persons; provided that no such participation shall relieve any Lender of any
of its obligations under this Agreement, and, provided, further that no such participant shall have any rights under this Agreement except as provided in this Section, and the Administrative Agent shall have no obligation or responsibility to such
participant. Any agreement pursuant to which such participation is granted shall provide that the granting Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower under this Agreement and the other Loan
Documents including, without limitation, the right to approve any amendment, modification or waiver of any provision of the Loan Documents, except that such agreement may provide that such Lender will not agree to any modification, amendment or
waiver of the Loan Documents that would reduce the amount of or postpone any fixed date for payment of any Obligation in which such participant has an interest. Any party to which such a participation has been granted shall have the benefits of
Section 1.12 and Section 10.3 hereof, but only to the extent such Sections would require payment to the Lender granting such participation if such participation had not occurred. The Borrower authorizes each Lender to disclose to any participant or
prospective participant under this Section any financial or other information pertaining to the Borrower or any Subsidiary, provided that such participant or prospective participant shall agree in writing to hold such information in confidence
pursuant to the provisions of Section 13.24 hereof. 
  
 Section
13.12. Assignments. (a) Each Lender shall have the right at any time, with the prior consent of the Administrative Agent (and the L/C Issuers, if other than the Administrative Agent) and, so long as no Event of Default then exists, the Borrower
(which consent of the Borrower shall not be unreasonably withheld) to sell, assign, transfer or negotiate all or any part of its rights and obligations under the Loan Documents (including, without limitation, the indebtedness evidenced by the Notes
then held by such assigning Lender, together with an equivalent percentage of its obligation to make Loans and participate in Letters of Credit) to one or more commercial banks or other financial institutions or investors, provided that, unless
otherwise agreed to by the Administrative Agent, such assignment shall be of a fixed percentage (and not by its terms of varying percentage) of the assigning Lender’s rights and obligations under the Loan Documents; provided, however,
that in order to make any such assignment (i) unless the assigning Lender is assigning all of its Commitments, outstanding Loans and interests in L/C Obligations, the assigning Lender shall retain at least $5,000,000 in unused Commitments,
outstanding Loans and interests in Letters of Credit, (ii) the assignee Lender shall have Commitments, outstanding Loans and interests in Letters of Credit of at least $5,000,000, (iii) each such assignment shall be evidenced by a written agreement
(substantially in the form attached hereto as Exhibit G or in such other form acceptable to the Administrative Agent) 
  

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 executed by such assigning Lender, such assignee Lender or Lenders, the Administrative Agent (and the L/C Issuers, if
other than the Administrative Agent) and, if required as provided above, the Borrower, which agreement shall specify in each instance the portion of the Obligations which are to be assigned to the assignee Lender and the portion of the Commitments
of the assigning Lender to be assumed by the assignee Lender, and (iv) the assigning Lender shall pay to the Administrative Agent a processing fee of $3,500 and any out-of-pocket attorneys’ fees and expenses incurred by the Administrative Agent
in connection with any such assignment agreement. Any such assignee shall become a Lender for all purposes hereunder to the extent of the rights and obligations under the Loan Documents it assumes and the assigning Lender shall be released from its
obligations, and will have released its rights, under the Loan Documents to the extent of such assignment. The address for notices to such assignee Lender shall be as specified in the assignment agreement executed by it. Promptly upon the
effectiveness of any such assignment agreement, the Borrower shall execute and deliver replacement Notes to the assignee Lender and the assigning Lender in the respective amounts of their Commitments (or assigned principal amounts, as applicable)
after giving effect to the reduction occasioned by such assignment (all such Notes to constitute “Notes” for all purposes of the Loan Documents), and the assignee Lender shall contemporaneously therewith surrender to the Borrower
its old Notes. The Borrower authorizes each Lender to disclose to any purchaser or prospective purchaser of an interest in the Loans and interest in Letters of Credit owed to it or its Commitments under this Section any financial or other
information pertaining to the Borrower or any Subsidiary, provided that such purchaser or prospective purchaser shall agree in writing to hold such information in confidence pursuant to the provisions of Section 13.24 hereof. 
  
 (b) Any Lender may at any time pledge or grant a security interest in all or
any portion of its rights under this Agreement to secure obligations of such Lender, including any such pledge or grant to a Federal Reserve Bank, and this Section shall not apply to any such pledge or grant of a security interest; provided
that no such pledge or grant of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or secured party for such Lender as a party hereto; provided further, however, the right of any
such pledgee or grantee (other than any Federal Reserve Bank) to further transfer all or any portion of the rights pledged or granted to it, whether by means of foreclosure or otherwise, shall be at all times subject to the terms of this Agreement.

  
 Section 13.13. Amendments. Any provision of this
Agreement or the other Loan Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by (a) the Borrower, (b) the Required Lenders, and (c) if the rights or duties of the Administrative Agent or the
L/C Issuer are affected thereby, the Administrative Agent or such L/C Issuer, as applicable; provided that: 
  
 (i) no amendment or waiver pursuant to this Section 13.13 shall (A) increase any Commitment of any Lender without the consent of such
Lender or (B) reduce the amount of or postpone the date for any scheduled payment of any principal of or interest on any Loan or of any Reimbursement Obligation or of any fee payable hereunder without the consent of the Lender to which such payment
is owing or which has committed to make such Loan or Letter of Credit (or participate therein) hereunder; 
  

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 (ii) no amendment or waiver pursuant to this Section 13.13 shall, unless signed by each
Lender, increase the aggregate Commitments of the Lenders, change the definitions of Revolving Credit Termination Date or Required Lenders, change the provisions of this Section 13.13, release any material guarantor or any substantial part of the
Collateral (except as otherwise provided for in the Loan Documents), or affect the number of Lenders required to take any action hereunder or under any other Loan Document; and 
  
 (iii) no amendment to Section 12 hereof shall be made without the consent of the Guarantor(s) affected
thereby. 
  
 Section 13.14. Headings. Section headings used
in this Agreement are for reference only and shall not affect the construction of this Agreement. 
  
 Section 13.15. Costs and Expenses; Indemnification. (a) The Borrower agrees to pay all costs and expenses of the Administrative Agent in connection
with the preparation, negotiation, and administration of the Loan Documents, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent, in connection with the preparation and execution of the Loan
Documents, and any amendment, waiver or consent related thereto, whether or not the transactions contemplated herein are consummated, together with any fees and charges suffered or incurred by the Administrative Agent in connection with periodic
environmental audits, fixed asset appraisals, title insurance policies, collateral filing fees and lien searches. The Borrower further agrees to indemnify the Administrative Agent, each Lender, and their respective directors, officers, employees,
agents, financial advisors, and consultants against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all reasonable expenses of litigation or preparation therefor, whether or not the
indemnified Person is a party thereto, or any settlement arrangement arising from or relating to any such litigation) which any of them may pay or incur arising out of or relating to any Loan Document or any of the transactions contemplated thereby
or the direct or indirect application or proposed application of the proceeds of any Loan or Letter of Credit, other than those which arise from the gross negligence or willful misconduct of the party claiming indemnification. The Borrower, upon
demand by the Administrative Agent or a Lender at any time, shall reimburse the Administrative Agent or such Lender for any reasonable legal expenses or other expenses incurred in connection with investigating or defending against any of the
foregoing (including any settlement costs relating to the foregoing) except if the same is directly due to the gross negligence or willful misconduct of the party to be indemnified. The obligations of the Borrower under this Section shall survive
the termination of this Agreement. 
  
 (b) The Borrower
unconditionally agrees to forever indemnify, defend and hold harmless, and covenants not to sue for any claim for contribution against, the Administrative Agent and the Lenders for any damages, costs, loss or expense, including without limitation,
response, remedial or removal costs, arising out of any of the following: (i) any presence, release, threatened release or disposal of any hazardous or toxic substance or petroleum by the Borrower or any Guarantor or otherwise occurring on or with
respect to its Property (whether owned or leased), (ii) the operation or violation of any environmental law, whether federal, state, or local, and any regulations promulgated thereunder, by the Borrower or any Guarantor or 
  

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otherwise occurring on or with respect to its Property (whether owned or leased), (iii) any claim for personal injury or property damage in connection with
the Borrower or any Guarantor or otherwise occurring on or with respect to its Property (whether owned or leased), and (iv) the inaccuracy or breach of any environmental representation, warranty or covenant by the Borrower or any Guarantor made
herein or in any other Loan Document evidencing or securing any Obligations or setting forth terms and conditions applicable thereto or otherwise relating thereto, except for injury or damages arising from the willful misconduct or gross negligence
of the party claiming indemnification. This indemnification shall survive the payment and satisfaction of all Obligations and the termination of this Agreement, and shall remain in force beyond the expiration of any applicable statute of limitations
and payment or satisfaction in full of any single claim under this indemnification. This indemnification shall be binding upon the successors and assigns of the Borrower and shall inure to the benefit of Administrative Agent and the Lenders
directors, officers, employees, agents, and collateral trustees, and their successors and assigns. 
  
 Section 13.16. Set-off. (a) In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such
rights, during any Event of Default, each Lender and each subsequent holder of any Obligation is hereby authorized by the Borrower and each Guarantor at any time or from time to time, without notice to the Borrower or such Guarantor or to any other
Person, any such notice being hereby expressly waived, to set-off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts, and in whatever currency denominated) and any other indebtedness at any time held or owing by that Lender or that subsequent holder to or for the credit or the account of the Borrower or such Guarantor,
whether or not matured, against and on account of the Obligations of the Borrower or such Guarantor to that Lender or that subsequent holder under the Loan Documents, including, but not limited to, all claims of any nature or description arising out
of or connected with the Loan Documents, irrespective of whether or not (a) that Lender or that subsequent holder shall have made any demand hereunder or (b) the principal of or the interest on the Loans or Notes and other amounts due hereunder
shall have become due and payable pursuant to Section 9 and although said obligations and liabilities, or any of them, may be contingent or unmatured. 
  
 (b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY
TIME THAT THE LOANS OR ANY OTHER OBLIGATION OR HEDGING LIABILITY OR
FUNDS TRANSFER AND DEPOSIT ACCOUNT LIABILITY SHALL BE SECURED BY REAL
PROPERTY LOCATED IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF
SETOFF, BANKER’S LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR
ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF
THIS AGREEMENT OR ANY NOTE THAT IS NOT TAKEN BY THE ADMINISTRATIVE
AGENT OR REQUIRED LENDERS OR APPROVED IN WRITING BY THE ADMINISTRATIVE
AGENT AND REQUIRED LENDERS IF SUCH SETOFF OR ACTION OR PROCEEDING
WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE
OF CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF
APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY OR ENFORCEABILITY
OF THE LIENS GRANTED TO THE ADMINISTRATIVE AGENT PURSUANT TO THE
COLLATERAL DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND OTHER OBLIGATIONS
AND HEDGING LIABILITY AND FUNDS TRANSFER AND DEPOSIT ACCOUNT LIABILITY, 
  

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 AND ANY ATTEMPTED EXERCISE BY
ANY LENDER OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE
ADMINISTRATIVE AGENT SHALL BE NULL AND VOID. THIS SUBSECTION (b) SHALL BE
SOLELY FOR THE BENEFIT OF EACH OF THE LENDERS HEREUNDER. 
  
 Section 13.17. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject matter thereof and any prior agreements, whether written or oral, with respect thereto are superseded hereby. 
  
 Section 13.18. Governing Law. This Agreement and the other Loan Documents (except as otherwise specified therein),
and the rights and duties of the parties hereto, shall be construed and determined in accordance with the internal laws of the State of Illinois. 
  
 Section 13.19. Severability of Provisions. Any provision of any Loan Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. All rights, remedies and powers
provided in this Agreement and the other Loan Documents may be exercised only to the extent that the exercise thereof does not violate any applicable mandatory provisions of law, and all the provisions of this Agreement and other Loan Documents are
intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Agreement or the other Loan Documents invalid or unenforceable. 
  
 Section 13.20. Excess Interest. Notwithstanding any provision
to the contrary contained herein or in any other Loan Document, no such provision shall require the payment or permit the collection of any amount of interest in excess of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any portion of the Loans or other obligations outstanding under this Agreement or any other Loan Document (“Excess Interest”). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document, then in such event (a) the provisions of this Section shall govern and control, (b) neither the Borrower nor any guarantor or endorser shall be obligated to pay any
Excess Interest, (c) any Excess Interest that the Administrative Agent or any Lender may have received hereunder shall, at the option of the Administrative Agent, be (i) applied as a credit against the then outstanding principal amount of
Obligations hereunder and accrued and unpaid interest thereon (not to exceed the maximum amount permitted by applicable law), (ii) refunded to the Borrower, or (iii) any combination of the foregoing, (d) the interest rate payable hereunder or under
any other Loan Document shall be automatically subject to reduction to the maximum lawful contract rate allowed under applicable usury laws (the “Maximum Rate”), and this Agreement and the other Loan Documents shall be deemed to
have been, and shall be, reformed and modified to reflect such reduction in the relevant interest rate, and (e) neither the Borrower nor any guarantor or endorser shall have any action against the Administrative Agent or any Lender for any damages
whatsoever arising out of the payment or collection of any Excess Interest. Notwithstanding the foregoing, if for any period of time interest on any of Borrower’s Obligations is calculated at the Maximum Rate rather than the applicable rate
under this Agreement, and thereafter such applicable rate becomes less than the Maximum Rate, the rate of interest payable on the Borrower’s Obligations shall 
  

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 remain at the Maximum Rate until the Lenders have received the amount of interest which such Lenders would have received
during such period on the Borrower’s Obligations had the rate of interest not been limited to the Maximum Rate during such period. 
  
 Section 13.21. Construction. The provisions of this Agreement relating to Subsidiaries shall only apply during such times as the Borrower has one
or more Subsidiaries. NOTHING CONTAINED HEREIN SHALL BE DEEMED OR CONSTRUED TO PERMIT
ANY ACT OR OMISSION WHICH IS PROHIBITED BY THE TERMS OF ANY
COLLATERAL DOCUMENT, THE COVENANTS AND AGREEMENTS CONTAINED HEREIN BEING IN ADDITION
TO AND NOT IN SUBSTITUTION FOR THE COVENANTS AND AGREEMENTS CONTAINED
IN THE COLLATERAL DOCUMENTS. 
  
 Section 13.22. Lender’s Obligations Several. The obligations of the Lenders hereunder are several and not joint. Nothing contained in this Agreement and no action taken by the Lenders pursuant hereto shall
be deemed to constitute the Lenders a partnership, association, joint venture or other entity. 
  
 Section 13.23. Submission to Jurisdiction; Waiver of Jury Trial. The Borrower and the Guarantors hereby submit to the nonexclusive jurisdiction of the United States District Court for the Northern District of
Illinois and of any Illinois State court sitting in the City of Chicago for purposes of all legal proceedings arising out of or relating to this Agreement, the other Loan Documents or the transactions contemplated hereby or thereby. The Borrower and
the Guarantors irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in
such a court has been brought in an inconvenient forum. THE BORROWER, THE GUARANTORS, THE ADMINISTRATIVE AGENT, AND
THE LENDERS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY. 
  

Section 13.24. Confidentiality. Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors to the extent any such Person has
a need to know such Information (it being understood that the Persons to whom such disclosure is made will first be informed of the confidential nature of such Information and instructed to keep such Information confidential, and the Administrative
Agent, Lender or L/C Issuer disclosing such Information remains responsible for any breach of this Section 13.24 by any such parties to whom such Information is disclosed), (b) to the extent requested by any regulatory authority (including any
self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with
the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 13.24, to (A) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement or (B) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction relating to the 
  

 -78- 








 Borrower and its obligations, (g) with the prior written consent of the Borrower, (h) to the extent such Information (A)
becomes publicly available other than as a result of a breach of this Section 13.24 or (B) becomes available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis from a source other than the Borrower or any Subsidiary
or any of their directors, officers, employees or agents, including accountants, legal counsel and other advisors, provided that such source is not known by the Person to whom such source provides such Information to be bound to the Borrower
or any Subsidiary or its representatives by agreement, fiduciary duty or otherwise not to disclose such Information, (i) to rating agencies if requested or required by such agencies in connection with a rating relating to the Loans or Commitments
hereunder, or (j) to entities which compile and publish information about the syndicated loan market, provided that only basic information about the pricing and structure of the transaction evidenced hereby may be disclosed pursuant to this
clause (j). In addition to the foregoing provisions of this Section 13.24, each of the Administrative Agent, the Lenders, the L/C Issuer and any other Person which becomes subject to the provisions of this Section agrees that, to the extent it
receives Information prior to public disclosure of the same, it will not trade in securities of the Borrower prior to 48 hours following public disclosure of such Information. 
  
 For purposes of this Section, “Information” means all information received from the Borrower or any of its
Subsidiaries or from any other Person on behalf of the Borrower or any of its Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the
Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by the Borrower or any of its Subsidiaries or from any other Person on behalf of the Borrower or any of its Subsidiaries. 
  
 [SIGNATURE PAGES TO
FOLLOW] 
  

 -79- 








 This Credit Agreement is entered into between us for the uses and purposes hereinabove set forth as of
the date first above written. 
  

			
	 “BORROWER”

	
	 NOBEL LEARNING COMMUNITIES, INC.

		
	 By
	 	 /s/ Thomas Frank


	 Name
	 	 Thomas Frank

	 Title
	 	 Chief Financial Officer

	
	 “GUARANTORS”

	
	 MERRYHILL SCHOOLS NEVADA, INC.

		
	 By
	 	 /s/ Gary V. Lea


	 Name
	 	 Gary V. Lea

	 Title
	 	 President, Secretary, Treasurer

	
	 NEDI, INC.

		
	 By
	 	 /s/ William E. Bailey


	 Name
	 	 William E. Bailey

	 Title
	 	 Vice President

	
	 THE HOUSTON LEARNING ACADEMY, INC.

		
	 By
	 	 /s/ Thomas Frank


	 Name
	 	 Thomas Frank

	 Title
	 	 Vice President

	
	 HOUSTON LEARNING ACADEMY–SAN ANTONIO,
INC.

		
	 By
	 	 /s/ Kathy E. Herman


	 Name
	 	 Kathy E. Herman

	 Title
	 	 Assistant Secretary



  

 S-1 









			
	 SPYROS, INC.

		
	 By
	 	 /s/ Kathy E. Herman


	 Name
	 	 Kathy E. Herman

	 Title
	 	 Assistant Secretary

	
	 ORTHONI, INC.

		
	 By
	 	 /s/ Kathy E. Herman


	 Name
	 	 Kathy E. Herman

	 Title
	 	 Assistant Secretary

	
	 MARIAN CATECHIS, INC.

		
	 By
	 	 /s/ Kathy E. Herman


	 Name
	 	 Kathy E. Herman

	 Title
	 	 Assistant Secretary

	
	 SANC, INC.

		
	 By
	 	 /s/ Kathy E. Herman


	 Name
	 	 Kathy E. Herman

	 Title
	 	 Assistant Secretary

	
	 MALONA, INC.

		
	 By
	 	 /s/ Kathy E. Herman


	 Name
	 	 Kathy E. Herman

	 Title
	 	 Assistant Secretary

	
	 NOBEL LEARNING TECHNOLOGIES, INC.

		
	 By
	 	 /s/ William E. Bailey


	 Name
	 	 William E. Bailey

	 Title
	 	 Treasurer



  

 S-2 









					
	 NOBEL SCHOOL MANAGEMENT SERVICES,
INC.

		
	 By
	 	 /s/ Thomas Frank


	 Name
	 	 Thomas Frank

	 Title
	 	 Vice President

	
	 NOBEL EDUCATION DYNAMICS FLORIDA,
INC.

		
	 By
	 	 /s/ Thomas Frank


	 Name
	 	 Thomas Frank

	 Title
	 	 Vice President

	
	 PALADIN ACADEMY, L.L.C.

	
	 By: Nobel Learning Communities, Inc., its sole member

			
	 	 	 By
	 	 /s/ Thomas Frank


	 	 	 Name
	 	 Thomas Frank

	 	 	 Title
	 	 Chief Financial Officer

	
	 THE ACTIVITIES CLUB, INC.

		
	 By
	 	 /s/ Thomas Frank


	 Name
	 	 Thomas Frank

	 Title
	 	 Secretary



  

 S-3 









			
	 “LENDERS”

	
	 HARRIS TRUST AND SAVINGS BANK, in its
individual
capacity as a Lender, as
L/C Issuer, and as Administrative Agent

		
	 By
	 	 /s/ Jay S. Dameron


	 Name:
	 	 Jay S. Dameron

	 Title:
	 	 Vice President

	
	 Address:

	
	 111 West Monroe Street, 20th Floor East

	 Chicago, Illinois 60603

	 Attention:    Jay S. Dameron

	 Telecopy:    (312) 293-8445

	 Telephone:  (312) 461-3889



  

 S-4 








 EXHIBIT A 
  
 NOTICE OF PAYMENT REQUEST 
  
 [Date] 
  
 [Name of Lender] 
 [Address] 
  
 Attention: 
  
 Reference is made to the Credit Agreement, dated as of February 20, 2004, among Nobel Learning Communities, Inc., the Lenders party thereto, and Harris
Trust and Savings Bank, as Administrative Agent (as extended, renewed, amended or restated from time to time, the “Credit Agreement”). Capitalized terms used herein and not defined herein have the meanings assigned to them in the
Credit Agreement. [The Borrower has failed to pay its Reimbursement Obligation in the amount of $            . Your Revolver Percentage of the unpaid Reimbursement Obligation is
$            ] or
[                                     has been required to
return a payment by the Borrower of a Reimbursement Obligation in the amount of $                . Your Revolver Percentage of the returned Reimbursement
Obligation is $            .] 
  

			
	 Very truly yours,

	
	 HARRIS TRUST AND SAVINGS
BANK,
 as L/C Issuer

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  











 EXHIBIT B 
  
 NOTICE OF BORROWING 
  
 Date:
                    ,          
  

	To:	Harris Trust and Savings Bank, as Administrative Agent for the Lenders parties to the Credit Agreement dated as of February 20, 2004 (as extended, renewed, amended or restated from
time to time, the “Credit Agreement”), among Nobel Learning Communities, Inc., certain Lenders which are signatories thereto, and Harris Trust and Savings Bank, as Administrative Agent 

  
 Ladies and Gentlemen: 
  
 The undersigned, Nobel Learning Communities, Inc., (the
“Borrower”), refers to the Credit Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably, pursuant to Section 1.6 of the Credit Agreement, of the Borrowing specified below:

  
 1. The Business Day of the proposed Borrowing
is                 ,         . 
  
 2. The aggregate amount of the proposed Borrowing is
$                    . 
  
 3. The Borrowing is being advanced under the [Revolving] [Term] Credit. 
  
 4. The Borrowing is to be comprised of
$             of [Base Rate] [Eurodollar] Loans. 
  
 [5. The duration of the Interest Period for the Eurodollar Loans included in the Borrowing shall be
                 months.] 
  
 The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds therefrom: 
  
 (a) the representations and warranties of the Borrower contained in Section 6 of the Credit Agreement are true and correct as though made
on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date); and 







 (b) no Default or Event of Default has occurred and is continuing or would result from
such proposed Borrowing. 
  

			
	 NOBEL LEARNING COMMUNITIES, INC.

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  




  

 -2- 








 EXHIBIT C 
  
 NOTICE OF CONTINUATION/CONVERSION 
  
 Date:
                    ,          
  

	To:	Harris Trust and Savings Bank, as Administrative Agent for the Lenders parties to the Credit Agreement dated as of February 20, 2004 (as extended, renewed, amended or restated from
time to time, the “Credit Agreement”), among Nobel Learning Communities, Inc., certain Lenders which are signatories thereto, and Harris Trust and Savings Bank, as Administrative Agent 

  
 Ladies and Gentlemen: 
  
 The undersigned, Nobel Learning Communities, Inc. (the
“Borrower”), refers to the Credit Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably, pursuant to Section 1.6 of the Credit Agreement, of the [conversion]
[continuation] of the Loans specified herein, that: 
  
 1. The conversion/continuation Date is                 ,         . 
  
 2. The aggregate amount of the [Revolving] [Term]
Loans to be [converted] [continued] is $                    . 
  
 3. The Loans are to be [converted into] [continued as] [Eurodollar] [Base Rate] Loans. 
  
 4. [If applicable:] The duration of the Interest
Period for the [Revolving] [Term] Loans included in the [conversion] [continuation] shall be              months. 
  
 The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed conversion/continuation date, before and after giving effect thereto and to the application of the proceeds therefrom: 
  
 (a) the representations and warranties of the Borrower contained in Section 6 of the Credit Agreement are
true and correct as though made on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date); provided, however, that this condition shall
not apply to the conversion of an outstanding Eurodollar Loan to a Base Rate Loan; and 
  
 (b) no Default or Event of Default has occurred and is continuing, or would result from such proposed [conversion] [continuation].

  

			
	 NOBEL LEARNING COMMUNITIES, INC.

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  











 EXHIBIT D-1 
  
 TERM NOTE 
  

			
	 U.S.
$                    
	 	February     , 2004

  
 FOR
VALUE RECEIVED, the undersigned, NOBEL LEARNING COMMUNITIES, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to the
order of                                      (the
“Lender”) at the principal office of Harris Trust and Savings Bank, as Administrative Agent, in Chicago, Illinois, in immediately available funds, the principal sum of
                             Dollars
($            ) or, if less, the aggregate unpaid principal amount of all Term Loans made or maintained by the Lender to the Borrower pursuant to the Credit Agreement, in
installments in the amounts called for by Section 1.8(a) of the Credit Agreement, commencing on                     , together with interest
on the principal amount of such Term Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates, specified in the Credit Agreement. 
  
 This Note is one of the Term Notes referred to in the Credit Agreement dated as of February 20, 2004, among the Borrower,
the Guarantors party thereto, the Lenders party thereto, and Harris Trust and Savings Bank, as Administrative Agent for the Lenders (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), and this Note
and the holder hereof are entitled to all the benefits and security provided for thereby or referred to therein, to which Credit Agreement reference is hereby made for a statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This Note shall be governed by and construed in accordance with the internal laws of the State of Illinois. 
  
 Voluntary prepayments may be made hereon, certain prepayments are required to be made hereon, and this Note may be declared
due prior to the expressed maturity hereof, all in the events, on the terms and in the manner as provided for in the Credit Agreement. 
  
 The Borrower hereby waives demand, presentment, protest or notice of any kind hereunder. 
  

			
	 NOBEL LEARNING COMMUNITIES, INC.

		
	 By
	 	

	 Name
	 	

	 Title
	 	










 EXHIBIT D-2 
  
 REVOLVING NOTE 
  

			
	 U.S.
$                    
	 	February     , 2004

  
 FOR
VALUE RECEIVED, the undersigned, NOBEL LEARNING COMMUNITIES, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to the
order of                                      (the
“Lender”) on the Revolving Credit Termination Date of the hereinafter defined Credit Agreement, at the principal office of Harris Trust and Savings Bank, as Administrative Agent, in Chicago, Illinois, in immediately available funds,
the principal sum of                              Dollars
($            ) or, if less, the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the Borrower pursuant to the Credit Agreement, together with interest
on the principal amount of each Revolving Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates, specified in the Credit Agreement. 
  
 This Note is one of the Revolving Notes referred to in the Credit Agreement dated as of February 20, 2004, among the
Borrower, the Guarantors party thereto, the Lenders party thereto, and Harris Trust and Savings Bank, as Administrative Agent for the Lenders (as extended, renewed, amended or restated from time to time, the “Credit Agreement”), and
this Note and the holder hereof are entitled to all the benefits and security provided for thereby or referred to therein, to which Credit Agreement reference is hereby made for a statement thereof. All defined terms used in this Note, except terms
otherwise defined herein, shall have the same meaning as in the Credit Agreement. This Note shall be governed by and construed in accordance with the internal laws of the State of Illinois. 
  
 Voluntary prepayments may be made hereon, certain prepayments are required to
be made hereon, and this Note may be declared due prior to the expressed maturity hereof, all in the events, on the terms and in the manner as provided for in the Credit Agreement. 
  
 The Borrower hereby waives demand, presentment, protest or notice of any kind hereunder. 
  

			
	 NOBEL LEARNING COMMUNITIES, INC.

		
	 By
	 	

	 Name
	 	

	 Title
	 	










 EXHIBIT E 
  
 NOBEL LEARNING COMMUNITIES, INC. 
  
 COMPLIANCE CERTIFICATE 
  

	To:	Harris Trust and Savings Bank, as Administrative Agent under, and the Lenders party to, the Credit Agreement described below 

  
 This Compliance Certificate is furnished to the Administrative Agent and the
Lenders pursuant to that certain Credit Agreement dated as of February 20, 2004, among us (as extended, renewed, amended or restated from time to time, the “Credit Agreement”). Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Credit Agreement. 
  
 THE UNDERSIGNED HEREBY CERTIFIES THAT: 
  
 1. I am the duly elected                     
of Nobel Learning Communities, Inc.; 
  
 2. I have reviewed the
terms of the Credit Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial
statements; 
  
 3. The examinations described in paragraph 2 did
not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as
of the date of this Compliance Certificate, except as set forth below; 
  
 4. The financial statements required by Section 8.5 of the Credit Agreement and being furnished to you concurrently with this Compliance Certificate are true, correct and complete as of the date and for the periods covered thereby; and

  
 5. The Schedule I hereto sets forth financial data and
computations evidencing the Borrower’s compliance with certain covenants of the Credit Agreement, all of which data and computations are, to the best of my knowledge, true, complete and correct and have been made in accordance with the relevant
Sections of the Credit Agreement. 







 Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event: 
  

	
	
 
	
 
	
 
	
 

  
 The foregoing
certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this
             day of
                             20    . 
  

			
	 NOBEL LEARNING COMMUNITIES, INC.

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  




  

 -2- 








 SCHEDULE I 
 TO COMPLIANCE CERTIFICATE 
  
 NOBEL LEARNING COMMUNITIES, INC. 
  
 COMPLIANCE CALCULATIONS 
 FOR CREDIT AGREEMENT DATED AS OF FEBRUARY 20,
2004 
  
 CALCULATIONS AS
OF                     ,              
  

								
	 A.
	  	Total Funded Debt/EBITDA Ratio (Section 8.22(a))	  	 	 
				
	 	  	1.	  	Total Funded Debt	  	$	                
				
	 	  	2.	  	Net Income for past 4 quarters	  	$	                
				
	 	  	3.	  	Interest Expense for past 4 quarters	  	$	                
				
	 	  	4.	  	Income taxes for past 4 quarters	  	$	                
				
	 	  	5.	  	Depreciation and Amortization Expense for past 4 quarters	  	$	                
				
	 	  	6.	  	Permitted add-backs to Net Income for past 4 quarters per definition of “EBITDA” (detail specifically by item)	  	$	                
				
	 	  	7.	  	Cash severance expenses incurred during past 4 quarters against reserves previously added back to EBITDA	  	$	                
				
	 	  	8.	  	Interest income and extraordinary gains for past 4 quarters	  	$	                
				
	 	  	9.	  	Sum of Lines A2, A3, A4, A5 and A6, minus Lines A7 and A8 (“EBITDA”)	  	$	                
				
	 	  	10.	  	Ratio of Line A1 to A9	  	 	        :1.0
				
	 	  	11.	  	Line A10 ratio must not exceed	  	 	        :1.0
				
	 	  	12.	  	The Borrower is in compliance (circle yes or no)	  	 	yes/no
			
	 B.
	  	Total Senior Funded Debt/EBITDA Ratio (Section 8.22(b))	  	 	 
				
	 	  	1.	  	 Total Funded Debt
	  	$	                
				
	 	  	2.	  	 Subordinated Debt
	  	$	                
				
	 	  	3.	  	 Line B1 minus Line B2 (Total Senior Funded Debt)
	  	$	                
				
	 	  	4.	  	 EBITDA for past 4 quarters (from Line A9)
	  	$	                
				
	 	  	5.	  	 Ratio of Line B3 to B4
	  	 	        :1.0
				
	 	  	6.	  	 Line B5 ratio must not exceed
	  	 	        :1.0
				
	 	  	7.	  	 The Borrower is in compliance (circle yes or no)
	  	 	yes/no









								
	 C.
	  	Minimum EBITDA (Section 8.22(c))	  	 	 
				
	 	  	1.	  	 EBITDA for past 4 quarters (from Line A9)
	  	$	                
				
	 	  	2.	  	 Line C1 shall not be less than
	  	$	                
				
	 	  	3.	  	 The Borrower is in compliance (circle yes or no)
	  	 	yes/no
			
	 D.
	  	Fixed Charge Coverage Ratio (Section 8.22(d))	  	 	 
				
	 	  	1.	  	 EBITDA for past 4 quarters (from Line A9)
	  	$	                
				
	 	  	2.	  	 Net Capital Expenditures for past 4 quarters
	  	$	                
				
	 	  	3.	  	 Difference of Line D1 minus Line D2
	  	$	                
				
	 	  	4.	  	 Cash Principal payments for past 4 quarters1
	  	$	                
				
	 	  	5.	  	 Interest Expense for past 4 quarters2
	  	$	                
				
	 	  	6.	  	 Cash Dividends for past 4 quarters
	  	$	                
				
	 	  	7.	  	 Cash Income taxes for past 4 quarters
	  	$	                
				
	 	  	8.	  	 Sum of Lines D4, D5, D6, and D7
	  	$	                
				
	 	  	9.	  	 Ratio of Line D3 to Line D8
	  	 	        :1.0
				
	 	  	10.	  	 Line D9 ratio must not be less than
	  	 	        :1.0
				
	 	  	11.	  	 The Borrower is in compliance (circle yes or no)
	  	 	yes/no
			
	 E.
	  	Capital Expenditures (Section 8.22(e))	  	 	 
				
	 	  	1.	  	 Year-to-date Capital Expenditures
	  	$	                
				
	 	  	2.	  	 Year-to-date Capital Expenditures financed with proceeds of an Event of Loss
	  	$	                
				
	 	  	3.	  	 Difference of Line E1 minus Line E2
	  	$	                
				
	 	  	4.	  	 Maximum permitted amount
	  	$	                
				
	 	  	5.	  	 The Borrower is in compliance (circle yes or no)
	  	 	yes/no



	1	Use deemed amount for all fiscal quarters through 12/31/04 per definition of “Fixed Charges”. 


	2	Annualize for all fiscal quarters through 12/31/04 per definition of “Fixed Charges”. 

  

 -2- 








 EXHIBIT F 
  
 ADDITIONAL GUARANTOR SUPPLEMENT 
  
                     ,          
  
 Harris Trust and Savings Bank, as Administrative Agent for the Lenders named in the Credit
Agreement dated as of February 20, 2004, among Nobel Learning Communities, Inc., as Borrower, the Guarantors referred to therein, the Lenders from time to time party thereto, and the Administrative Agent (as extended, renewed, amended or restated
from time to time, the “Credit Agreement”) 
  
 Ladies and Gentlemen: 
  
 Reference is made to the Credit Agreement described above. Terms not defined herein which are defined in the Credit Agreement shall have for the purposes hereof the meaning provided therein. 
  
 The undersigned, [name of Subsidiary Guarantor], a [jurisdiction of
incorporation or organization] hereby elects to be a “Guarantor” for all purposes of the Credit Agreement, effective from the date hereof. The undersigned confirms that the representations and warranties set forth in Section 6
of the Credit Agreement are true and correct as to the undersigned as of the date hereof and the undersigned shall comply with each of the covenants set forth in Section 8 of the Credit Agreement applicable to it. 
  
 Without limiting the generality of the foregoing, the undersigned hereby
agrees to perform all the obligations of a Guarantor under, and to be bound in all respects by the terms of, the Credit Agreement, including without limitation Section 12 thereof, to the same extent and with the same force and effect as if the
undersigned were a signatory party thereto.  
  
 The
undersigned acknowledges that this Agreement shall be effective upon its execution and delivery o by the undersigned to the Administrative Agent, and it shall not be necessary for the Administrative Agent or any Lender, or any of their Affiliates
entitled to the benefits hereof, to execute this Agreement or any other acceptance hereof. This Agreement shall be construed in accordance with and governed by the internal laws of the State of Illinois. 
  

			
	 Very truly yours,

	
	 [NAME OF SUBSIDIARY GUARANTOR]

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  











 EXHIBIT G 
  
 ASSIGNMENT AND ACCEPTANCE 
  
 Dated
                    ,              
  
 Reference is made to the Credit Agreement dated as of February 20, 2004 (as
extended, renewed, amended or restated from time to time, the “Credit Agreement”) among Nobel Learning Communities, Inc., the Guarantors party thereto, the Lenders party thereto, and Harris Trust and Savings Bank, as Administrative
Agent for the Lenders (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein with the same meaning. 
  
                                       
                                        
                           (the “Assignor”) and
                                        
(the “Assignee”) agree as follows: 
  
 1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, a             % interest in and to all of the
Assignor’s rights and obligations under the Credit Agreement as of the Effective Date (as defined below), including, without limitation, such percentage interest in the Assignor’s Commitments as in effect on the Effective Date and the
Loans, if any, owing to the Assignor on the Effective Date and the Assignor’s Revolver Percentage of any outstanding L/C Obligations. 
  
 2. The Assignor (i) represents and warrants that as of the date hereof (A) its Revolving Credit Commitment is
$                     and its Term Loan Commitment is
$                    , (B) the aggregate outstanding principal amount of Loans made by it under the Credit Agreement that have not been repaid
is $                    
($                     of Revolving Loans and
$                     of Term Loans) and a description of the interest rates and interest periods of such Loans is attached as Annex 1 hereto,
and (C) the aggregate principal amount of Assignor’s Revolver Percentage of outstanding L/C Obligations is $                    ; (ii)
represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim, lien, or encumbrance of any kind; (iii) makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other instrument or document furnished pursuant thereto; and (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or any Subsidiary or the performance
or observance by the Borrower or any Subsidiary of any of their respective obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto. 
  
 3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of
the most recent financial statements delivered to the Lenders pursuant to Section 8.5(a) and (b) thereof and such other documents and 







 information as it has deemed appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes the Administrative Agent to take such action as Administrative Agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender; and (v) specifies as its lending office (and address for notices) the offices set forth beneath its name on the signature pages hereof.

  
 4. As consideration for the assignment and
sale contemplated in Annex 1 hereof, the Assignee shall pay to the Assignor on the Effective Date in Federal funds the amount agreed upon by the Assignor and the Assignee. It is understood that commitment and/or letter of credit fees accrued to the
Effective Date with respect to the interest assigned hereby are for the account of the Assignor and such fees accruing from and including the date hereof are for the account of the Assignee. Each of the Assignor and the Assignee hereby agrees that
if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party’s interest therein and shall promptly pay
the same to such other party. 
  
 5. The
effective date for this Assignment and Acceptance shall be                      (the “Effective Date”). Following the
execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance and recording by the Administrative Agent and, if required, the Borrower. 
  
 6. Upon such acceptance and recording, as of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement. 
  
 7. Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Effective
Date directly between themselves. 
  
 8. In
accordance with Section 13.12 of the Credit Agreement, the Assignor and the Assignee request and direct that the Administrative Agent prepare and cause the Borrower to execute and deliver to the Assignee the relevant Notes payable to the 

 

 -2- 








 Assignee in the amount of its Commitments and new Notes to the Assignor in the amount of its Commitments
after giving effect to this assignment. 
  
 9.
This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of Illinois. 
  

			
	 [Assignor Lender]

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  


	
	 [Assignee Lender]

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  


	
	 Lending office (and address for notices):



  

			
	 Accepted and consented this              day of
                    

	
	 NOBEL LEARNING COMMUNITIES, INC.

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  


	
	 Accepted and consented to by the Administrative Agent and L/C Issuer this         
day of            

	
	 HARRIS TRUST AND SAVINGS BANK, as Administrative Agent
and L/C Issuer

		
	 By
	 	  


	 Name
	 	  


	 Title
	 	  



  

 -3- 








 ANNEX I 
 TO ASSIGNMENT AND ACCEPTANCE 
  

							
	 PRINCIPAL AMOUNT
	 	TYPE OF LOAN	 	INTEREST RATE	  	MATURITY DATE








 SCHEDULE 1 
  
 COMMITMENTS 
  

							
	 NAME OF LENDER

	  	TERM LOAN
COMMITMENT

	  	REVOLVING CREDIT
COMMITMENT


	 Harris Trust and Savings Bank
	  	$	15,000,000	  	$	8,000,000
	 TOTAL
	  	$	15,000,000	  	$	8,000,000
	 	  	
	
	  	
	









 (The schedules to this agreement will be furnished supplementally by the Registrant to the 
 Securities and Exchange Commission upon request.)