EX-10.3 Form of Series B Warrant



 







Exhibit 10.3



THESE SECURITIES HAVE BEEN ISSUED PURSUANT TO EXEMPTIONS FOR NONPUBLIC OFFERINGS FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS, AND, ACCORDINGLY, THESE SECURITIES MAY NOT BE RESOLD OR OTHERWISE DISPOSED OF
UNLESS, IN THE OPINION OF COUNSEL FOR THE HOLDER, REGISTRATION UNDER THE APPLICABLE FEDERAL OR
STATE SECURITIES LAWS IS NOT REQUIRED OR COMPLIANCE IS MADE WITH SUCH REGISTRATION REQUIREMENTS.




Void after 5:00 p.m. Eastern Time, on July _, 2011




WARRANT TO PURCHASE                      SHARES OF COMMON STOCK




OF




NEW HORIZONS WORLDWIDE, INC.

(Series B)




          This is to certify that, FOR VALUE RECEIVED,                                          or its registered assigns
pursuant to Section (d) hereof (“Holder”), subject to the further provisions of this Warrant, is
entitled to purchase from New Horizons Worldwide, Inc., a Delaware corporation (the “Company”),
                     fully paid, validly issued and nonassessable shares of Common Stock, par value $0.01 per
share, of the Company (the “Common Stock,” and such number of shares the “Face Amount of Shares”),
at the exercise price of $1.50 per share until July ___, 2011. The number of shares of Common Stock
to be received upon the exercise of this Warrant and the price to be paid for each share of Common
Stock may be adjusted from time to time as hereinafter set forth. The shares of Common Stock
deliverable upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as “Warrant Shares,” and the exercise price of a share of Common Stock as adjusted from
time to time is hereinafter sometimes referred to as the “Exercise Price.”




          (a) EXERCISE OF WARRANT; NOTIFICATION OF EXPIRATION DATE OF WARRANT. (i) Subject to the
provisions hereof, the Warrant may be exercised as to Warrant Shares at any time or from time to
time, from and after August 15, 2007, until the earlier to occur of (A) 5:00 P.M. Eastern time on
July ___, 2011, and (B) the date of cancellation of the Warrant as described in clause (a)(ii) below
(first of such dates to occur, the “Expiration Date”), provided, however, that if such day is a day
on which banking institutions in the State of Delaware are authorized by law to close, then on the
next succeeding day which shall not be such a day. The Warrant may be exercised by presentation
and surrender hereof to the Company at its principal office, or at the office of its stock transfer
agent, if any, with the Purchase Form annexed hereto duly executed (with signature guaranteed if
required by the Company or its stock transfer agent)





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and accompanied by payment of the Exercise Price for the number of Warrant Shares specified in such
form and any applicable taxes. The purchase price for any Warrant Shares purchased pursuant to the
exercise of this Warrant shall be paid in full upon such exercise in cash or by certified or bank
check or pursuant to a cashless exercise procedure in accordance with Section (k) hereof. As soon
as practicable after each such exercise of the Warrants, but not later than seven (7) business days
from the date of such exercise, the Company shall issue and deliver to the Holder a certificate or
certificates for the Warrant Shares issuable upon such exercise, registered in the name of the
Holder or the Holder’s designee. If the Warrant should be exercised in part only, the Company
shall, upon surrender of the Warrant for cancellation, execute and deliver a new Warrant evidencing
the rights of the Holder thereof to purchase the balance of the Warrant Shares purchasable
thereunder. In the event of a cash exercise, upon receipt by the Company of the Warrant at its
office, or by the stock transfer agent of the Company at its office, in proper form for exercise,
together with the exercise price thereof and taxes as aforesaid in cash or certified or bank check
and the opinion described below, the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books
of the Company shall then be closed or that certificates representing such shares of Common Stock
shall not then be physically delivered to the Holder. It is further understood that certificates
for the Warrant Shares, if any, to be issued upon exercise of the Warrant may contain a restrictive
legend in accordance with Section (i) hereof.




          (ii) Notwithstanding anything to the contrary herein contained, the Warrant shall be cancelled
in full and of no further force or effect if and when both of the following conditions are
satisfied:





(A) (1) The Adjusted EBITDA (as defined in that certain Credit Agreement dated July
[___], 2006, by and among the Company, Camden Partners Strategic III, LLC, as
Administrative Agent (in such capacity, the “Administrative Agent”), and the Lenders
named therein) for the three-month period ending June 30, 2007, was not less than
$750,000.00 as determined as final and binding pursuant to clause (ii)(A)(2) below;




     (2) For purposes of determining the Adjusted EBITDA pursuant to clause
(ii)(A)(1) above, as promptly as practicable, but no later than August 15, 2007, the
Company’s Chief Executive Officer and Chief Financial Officer shall deliver to the
Holder and the Administrative Agent a certificate providing a detailed, good faith
calculation of the Adjusted EBITDA for the three-month period ending June 30, 2007
(the “Adjusted EBITDA Calculation”). If the Administrative Agent disagrees with the
Adjusted EBITDA Calculation in its reasonable discretion, the Administrative Agent
shall, within ten (10) days after delivery of the Adjusted EBITDA Calculation,
deliver a notice to the Company stating its disagreement. If a notice of
disagreement is delivered to the Company by the Administrative Agent within ten (10)
days after receipt of the Adjusted EBITDA Calculation, the Company and the
Administrative Agent shall promptly thereafter cause a nationally recognized
independent accounting firm (the “Accounting Referee”) that is mutually agreeable to
the Company and the



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Administrative Agent to review the Adjusted EBITDA Calculation and to calculate the
Adjusted EBITDA. The Accounting Referee shall deliver to the Holder, the
Administrative Agent and the Company, as promptly as practicable (but in any case no
later than thirty (30) days from the date of engagement of the Accounting Referee),
a report setting forth its calculation of the Adjusted EBITDA. Such report shall be
final and binding upon the Holder and the Company. The fees, costs and expenses of
the Accounting Referee shall be paid solely by the Company. The Company agrees to
cooperate with the Accounting Referee, including, without limitation, providing
books, records, work papers and personnel to the extent requested by the Accounting
Referee. In the event the Administrative Agent does not deliver a notice of
disagreement as provided herein, the calculation by the Company of the Adjusted
EBITDA shall be deemed final and binding upon the Holder and the Company.




(B) On or before July 1, 2007, the following matters shall have been conclusively
resolved to the satisfaction of the Administrative Agent in the exercise of its
reasonable discretion for an aggregate liability amount (inclusive of all fines,
legal fees and other payments) paid or payable by the Company of not more than
$400,000.00: (i) the matters described in that certain draft letter from Jerome V.
McAvoy, Senior Attorney of the Bureau of Proprietary School Supervision
Investigations & Audit Unit of the New York State Education Department to Thomas J.
Bresnan, Chief Executive Officer and President of the Company, dated June 13, 2006,
and transmitted to the Company on June 14, 2006, and (ii) the matters described in
that certain letter from Peter N. Hill, counsel to Annette Goff, to Scott R. Wilson,
Assistant Secretary to the Company, dated June 7, 2006.



          (iii) Notwithstanding anything to the contrary herein contained, in accordance with the
provisions of this clause (iii), the number of Warrant shares shall be adjusted if (x) the
condition described in clause (ii)(A) above has been satisfied and (y) on or before July 1, 2007,
the full amount of the liability described in clause (ii)(B) above has been determined in the
manner provided in clause (ii) above and is in an amount that exceeds $400,000.00 (the amount by
which such liability exceeds $400,000.00 being hereinafter referred to as the “Excess Amount”). In
such event, the number of shares for which the Warrant may be exercised (inclusive of any prior
exercise to date) shall be determined in accordance with the following formula:




          X = (Y)(Z)(2,666,667)




          Where:




          X is the total number of shares of Common Stock of the Company for which the Warrant may be
exercised (not to exceed the Face Amount of Shares), and




          Y is a fraction, the numerator of which is the Excess Amount and the denominator of which is
4,000,000, and






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          Z is a fraction, the numerator of which is the Face Amount of Shares, and the denominator of
which is 666,667.




          Upon any adjustment in the Warrant Shares as provided in this clause (a)(iii), the Warrant
shall otherwise remain in full force and effect.




          (b) RESERVATION OF SHARES. The Company shall at all times reserve for issuance and/or
delivery upon exercise of this Warrant such number of shares of its Common Stock as shall be
required for issuance and delivery upon exercise of the Warrants.




          (c) FRACTIONAL SHARES. No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of the Warrant. With respect to any fraction of a share called for upon
any exercise hereof, the Company shall pay to the Holder an amount in cash equal to such fraction
multiplied by the current market value of a share, determined as follows:





(1) If the Common Stock is listed on a national securities exchange or admitted to
unlisted trading privileges on such exchange or listed for trading on the Nasdaq
National Market System, the current market value shall be the last reported sale
price of the Common Stock on such exchange or system on the last business day prior
to the date of exercise of this Warrant or if no such sale is made on such day, the
average bid and asked prices for such day on such exchange or system;




(2) If the Common Stock is not so listed or admitted to unlisted trading privileges,
the current market value shall be the mean of the last reported bid and asked prices
reported by the National Quotation Bureau, Inc. on the last business day prior to
the date of the exercise of this Warrant; or




(3) If the Common Stock is not so listed or admitted to unlisted trading privileges
and bid and asked prices are not so reported, the current market value shall be an
amount, not less than the book value thereof as at the end of the most recent fiscal
year of the Company ending prior to the date of the exercise of the Warrant,
determined in such reasonable manner as may be prescribed by the Board of Directors
of the Company.



     (d) EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. The Warrant is exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at
the office of its stock transfer agent, if any, for other Warrants of different denominations
entitling the Holder thereof to purchase in the aggregate the same number of shares of Common Stock
purchasable hereunder. Subject to Section (i) hereof, the Holder will not sell, assign or transfer
this Warrant in whole or in part unless this Warrant shall have been registered for sale under the
Securities Act or until the Company shall have received from counsel for the Holder an opinion to
the effect that the proposed sale or other transfer of this Warrant by the Holder may be effected
without such registration. Upon surrender of this Warrant to the Company at its principal office
or at the office of its stock transfer agent, if



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any, with the Assignment Form annexed hereto duly executed (with signature guaranteed, if required
by the Company or its stock transfer agent) and funds sufficient to pay any transfer tax, the
Company shall, without charge, execute and deliver a new Warrant in the name of the assignee or
assignees named in such instrument of assignment and this Warrant shall promptly be canceled. This
Warrant may be divided by or combined with other Warrants which carry the same rights upon
presentation hereof at the principal office of the Company or at the office of its stock transfer
agent, if any, together with a written notice specifying the names and denominations in which new
Warrants are to be issued and signed by the Holder hereof. The term “Warrant” as used herein
includes any Warrants into which this Warrant may be divided or exchanged. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of loss, theft or destruction, of reasonable satisfactory indemnification,
and upon surrender and cancellation of this Warrant, if mutilated, the Company will execute and
deliver a new Warrant of like tenor, date and amount. Any such new Warrant executed and delivered
shall constitute an additional contractual obligation on the part of the Company, whether or not
the original Warrant shall be at any time enforceable (subject to the Company’s right of
indemnification as provided above) by anyone.




     (e) RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof, be entitled to any rights
of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited
to those expressed in the Warrant and are not enforceable against the Company except to the extent
set forth herein.



     (f) CERTAIN ADJUSTMENTS. So long as this Warrant shall be outstanding, the Exercise Price in
effect at any time and the number and kind of securities purchasable upon the exercise of the
Warrants shall be subject to adjustment from time to time upon the happening of certain events as
follows:




(1) Reclassification, Consolidation or Merger. In case of any
reclassification or change of outstanding securities of the class issuable upon
exercise of this Warrant (other than a change in par value, or from par value to no
par value, or as a result of a subdivision or combination), or in case of any
consolidation or merger of the Company with or into another corporation (other than
a merger (i) with another corporation in which the Company is the surviving
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon exercise of this Warrant or (ii) a merger in
which the Company is not the surviving corporation and holders of equity securities
of the Company as a result of such merger receive more than 50% of the equity
securities of the surviving corporation), or in case of any sale of all or
substantially all of the assets of the Company, or in case of a share exchange in
which 50% or more of the outstanding capital stock of the Company is exchanged for
capital stock of another corporation, any of which transactions shall be referred to
hereinafter as a “Corporate Transaction”, the Company or such successor or
purchasing company or entity, as the case may be, shall execute with the Holder of
this Warrant an agreement pursuant to which the Holder of the Warrant shall have the
right thereafter to purchase upon exercise of the Warrant the kind and amount of
shares, and/or other securities and property that the Holder of the Warrant would



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have owned or have been entitled to receive after the happening of such Corporate
Transaction had the Warrant been exercised immediately prior to such action. The
agreement referred to in this subsection (1) shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided for
in this Section (f). The provisions of this subsection (1) shall similarly apply to
successive Corporate Transactions.




(2) Subdivision or Combination of Shares. If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its Common
Stock, the Exercise Price shall be proportionately decreased in the case of a
subdivision or increased in the case of a combination.




(3) Stock Dividends. If the Company at any time while this Warrant is
outstanding and unexpired shall pay a dividend with respect to Common Stock payable
in, or make any other distribution with respect to Common Stock (except any
distribution provided for in the foregoing subsection (1) or (2)), of Common Stock,
then the Exercise Price shall be adjusted, from and after the date of determination
of shareholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Exercise Price in effect immediately prior to such
date of determination by a fraction (a) the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to such dividend or
distribution and (b) the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such dividend or distribution.




(4) Adjustment of Exercise Price for Diluting Issues.




(A) If at each or any time prior to July ___, 2007 the Company shall issue or
sell, or is, in accordance with subsection (5)(A) hereof, deemed to have
issued or sold, any shares of Common Stock for a consideration per share
less than the applicable Exercise Price immediately prior to the time of
such issue or sale (each a “Dilutive Issuance”), then, forthwith upon such
issue or sale, such Exercise Price shall be reduced to the price at which
the Company issued or sold, or is deemed to have issued or sold, such shares
of Common Stock.




(B) If at each or any time on or after July ___, 2007 there is a Dilutive
Issuance, then, and in each such case, the Exercise Price theretofore in
effect shall be reduced, concurrently with such issue or sale, to a price
equal to the quotient obtained by dividing:




     (1) an amount equal to (x) the total number of shares of Common Stock
outstanding immediately prior to such issuance or sale multiplied by the
Exercise Price in effect immediately prior to such issuance or sale, plus
(y) the consideration, if any, received or deemed to



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be received by the Company upon such issuance or sale as set forth below; by




     (2) the total number of shares of Common Stock outstanding immediately
after such issuance or sale.




For purposes of the foregoing formula, all shares of Common Stock issuable
upon the exercise of outstanding Options (as defined below) or issuable upon
the conversion of Convertible Securities (as defined below) shall be deemed
outstanding shares of Common Stock.




(5) For purposes of this Section (f), the following subparagraphs (A) to (G)
shall also be applicable:




          (A) Issuance of Rights or Options. In case at any time the
Company shall in any manner grant (whether directly or by assumption in a
merger or otherwise) any warrants or other rights to subscribe for or to
purchase, or any options for the purchase of, Common Stock or any stock or
security convertible into or exchangeable for Common Stock (such warrants,
rights or options being called “Options” and such convertible or
exchangeable stock or securities being called “Convertible Securities”)
whether or not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon the exercise of such Options or upon
the conversion or exchange of such Convertible Securities (determined by
dividing (a) the total amount, if any, received or receivable by the Company
as consideration for the granting of such Options, plus the minimum
aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus, in the case of such Options which relate
to Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (b) the total
maximum number of shares of Common Stock issuable upon the exercise of all
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options) shall be less than
the applicable Exercise Price immediately prior to the time of the granting
of such Options or Convertible Securities, then the total maximum number of
shares of Common Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to
have been issued for such price per share as of the date of granting of such
Options or the issuance of such Convertible Securities and thereafter shall
be deemed to be outstanding. Except as otherwise provided in subparagraph
(C), no adjustment of any Exercise Price shall be made upon the actual issue
of such Common Stock or of such Convertible Securities upon exercise of such
Options or upon the actual



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issue of such Common Stock upon conversion or exchange of such
Convertible Securities.




          (B) Issuance of Convertible Securities. In case the Company
shall in any manner issue (whether directly or by assumption in a merger or
otherwise) or sell any Convertible Securities, whether or not the rights to
exchange or convert any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (a) the total amount
received or receivable by the Company as consideration for the issue or sale
of such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the conversion
or exchange thereof, by (b) the total maximum number of shares of Common
Stock issuable upon the conversion or exchange of all such Convertible
Securities) shall be less than the applicable Exercise Price immediately
prior to the time of such issue of sale, then the total maximum number of
shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issue or sale of such Convertible Securities
and thereafter shall be deemed to be outstanding, provided that (a) except
as otherwise provided in subparagraph (C), no adjustment of any Exercise
Price shall be made upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) if any such
issue or sale of such Convertible Securities is made upon exercise of any
Options to purchase any such Convertible Securities for which adjustments of
any Exercise Price have been or are to be made pursuant to other provisions
of this Section (f), no further adjustment of such Exercise Price shall be
made by reason of such issue or sale.




          (C) Change in Option Price or Conversion Rate. Upon the
happening of any of the following events, namely, if the purchase price
provided for in any Option referred to in subparagraph (A), the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subparagraph (A) or (B), or the rate
at which Convertible Securities referred to in subparagraph (A) or (B) are
convertible into or exchangeable for Common Stock shall change at any time
(including, but not limited to, changes under or by reason of provisions
designed to protect against dilution), the applicable Exercise Price at the
time of such event shall forthwith be readjusted to the Exercise Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed purchased price,
additional consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold, but only if as a result of such
adjustment the Exercise Price then in effect hereunder is thereby reduced;
and on the expiration or termination of such Convertible Securities, the
Exercise Price then in effect hereunder shall forthwith be



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increased to the Exercise Price which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration
or termination, never been issued.




          (D) Stock Dividends. In case the Company shall declare a
dividend or make any other distribution upon any stock of the Company
payable in Common Stock (except for dividends or distributions upon the
Common Stock), Options or Convertible Securities, any Common Stock, Options
or Convertible Securities, as the case may be, issuable in payment of such
dividend or distribution shall be deemed to have been issued or sold at a
consideration equal to $.01 per share.




          (E) Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for cash,
the consideration received therefor shall be deemed to be the amount
received by the Company therefor, without deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or
allowed by the Company in connection therewith. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or sold for
a consideration other than cash, the amount of the consideration other than
cash received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board of Directors of the
Company, without deduction of any expenses incurred or any underwriting
commissions or concessions paid or allowed by the Company in connection
therewith. In case any Options shall be issued in connection with the issue
and sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have been
issued for such consideration as determined in good faith by the Board of
Directors of the Company.




          (F) Record Date. In case the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them (a) to
receive a dividend or other distribution payable in Common Stock, Options or
Convertible Securities or (b) to subscribe for or purchase Common Stock
Options or Convertible Securities, then such record date shall be deemed to
be the date of the issue or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.




          (G) Treasury Shares. The disposition of any shares of Common
Stock owned or held by or for the account of the Company shall be considered
an issue or sale of Common Stock for the purpose of this Section (f).



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     (6) No Adjustment in Certain Circumstances. No adjustment of
the Exercise Price shall be made pursuant to this Section (f) pursuant to
(A) shares of Common Stock, Options or Convertible Securities, issued to
officers, directors and employees of, and consultants to, the Company as
compensation for bona fide services provided or to be provided to the
Company by such persons and approved by the Board of Directors or the
Compensation Committee, as the case may be; and (B) shares of Common Stock
issuable upon exercise of Options, Convertible Securities or other rights to
acquire securities of the Company issued on or outstanding on July ___, 2006.




     (7) Adjustment of Number of Warrant Shares. Upon each
adjustment in the Exercise Price, the number of Warrant Shares purchasable
hereunder shall be adjusted, to the nearest whole share, to the product
obtained by multiplying the number of Warrant Shares purchasable immediately
prior to such adjustment in the Exercise Price by a fraction, the numerator
of which shall be the Exercise Price immediately prior to such adjustment
and the denominator of which shall be the Exercise Price immediately
thereafter.




     (8) Calculations. All calculations under this Section (f)
shall be made to the nearest cent or to the nearest Warrant Share, as the
case may be. No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least $.01 in
such price; provided, however, that any adjustments which by reason of this
subparagraph (8) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment required to be made
hereunder.




     (9) Computations by Chief Financial Officer. Each computation
required by this Section (f) for purposes of determining whether the
Exercise Price shall be adjusted shall be performed by the Company’s Chief
Financial Officer on the basis of the Company’s internally prepared
unaudited financial statements. Such unaudited financial statements shall
be accompanied by a certificate signed by the President and Chief Financial
Officer certifying that such unaudited statements have been prepared in
accordance with GAAP on a basis consistently applied and included all
adjustments (consisting only of normal, recurring accruals) necessary for a
fair presentation of the financial position and results of the Company as of
the end of each such period. Any dispute between a holder and the Company
in regard to such a computation shall be referred to and decided by the
Company’s then engaged firm of independent certified public accountants,
which shall be a firm of recognized national reputation (the “Accounting
Firm”). The



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computations of the Accounting Firm shall be final and binding on the
Company and the Holder.




     (10) Adjustment of Shares Received Pursuant to this Section.
In the event that at any time, as a result of an adjustment made pursuant to
this Section (f) above, the Holder of this Warrant thereafter shall become
entitled to receive any shares of the Company, other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of
this Warrant shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in subsection (1) above.




     (11) Warrants Issued Hereafter. Irrespective of any
adjustments in the Exercise Price or the number or kind of Warrant Shares
purchasable upon exercise of this Warrant, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind
of shares as are stated in the similar Warrants initially issuable pursuant
to this Agreement.



     (g) OFFICER’S CERTIFICATE. Whenever the Exercise Price shall be adjusted as required by the
provisions of the foregoing Section, the Company shall forthwith file in the custody of its
Secretary or an Assistant Secretary at its principal office and with its stock transfer agent, if
any, an officer’s certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as shall be necessary
to show the reason for and the manner of computing such adjustment. Each such officer’s
certificate shall be made available at all reasonable times for inspection by the Holder or any
holder of a Warrant executed and/or delivered pursuant to Section (a) or Section (d), and the
Company shall, forthwith after each such adjustment, mail, by certified mail, a copy of such
certificate to the Holder or any such holder.



     (h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be outstanding, (i) if the
Company shall pay any dividend or make any distribution upon the Common Stock, or (ii) if the
Company shall offer to the holders of Common Stock for subscription or purchase by them any shares
of any class or any other rights, or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of the Company with
or into another corporation, sale, lease or transfer of all or substantially all of the property
and assets of the Company to another corporation, or voluntary or involuntary dissolution,
liquidation or winding up of the Company shall be effected, then in any such case, the Company
shall cause to be mailed by certified mail to the Holder or any holder of a Warrant executed and/or
delivered pursuant to Section (a) or Section (d), at least 20 days prior to the date specified in
(x) or (y) below, as the case may be, a notice containing a brief description of the proposed
action and stating the date on which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, lease, dissolution, liquidation or winding up is to take place and the date, if any is
to be fixed, as of which the holders of Common Stock or



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other securities shall receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or winding up.




     (i) SECURITIES LAW COMPLIANCE




	 	(1)	 	The Holder of the Warrant, by acceptance hereof, acknowledges
that the Warrant and the shares of Common Stock to be issued upon exercise
hereof or conversion thereof are being acquired solely for the Holder’s own
account and not as a nominee for any other party, and for investment, and that
the Holder will not offer, sell, transfer, assign or otherwise dispose of this
Warrant or any shares of Common Stock to be issued upon exercise hereof or
conversion thereof except under circumstances that will not result in a
violation of the Act or any state securities laws. Upon exercise of the
Warrant, the Holder shall, if requested by the Company, confirm in writing, in
a form satisfactory to the Company, that the shares of Common Stock so
purchased are being acquired solely for the Holder’s own account and not as a
nominee for any other party, for investment, and not with a view toward
distribution or resale.
	 
	 	(2)	 	If appropriate, the Warrant and any Warrants issued upon
exercise or substitution or upon assignment or transfer pursuant to Section (a)
or Section (d), as the case may be, and all shares of Common Stock issued upon
exercise hereof or conversion thereof shall be stamped or imprinted with
legends setting forth the restrictions on transfer arising under applicable
federal and state securities laws.





     (j) REGISTRATION RIGHTS UNDER THE SECURITIES ACT OF 1933; STOCKHOLDERS’ AGREEMENT. The Holder
of this Warrant or of the Warrant Shares, upon execution thereof, shall be entitled to the
registration rights afforded under the Amended and Restated Registration Rights Agreement, dated as
of the date hereof, among the Company, the Holder and the other parties named therein. The voting
rights and obligations with respect to, and the sale or other disposition of, the Warrant Shares
shall be restricted by and subject to the provisions of an Amended and Restated Stockholders’
Agreement dated as of July ___, 2006 and the certificates or other evidence representing the
Warrant Shares shall bear a legend in substantially the following form:




THE VOTING RIGHTS AND OBLIGATIONS WITH RESPECT TO, AND SALE OR OTHER DISPOSITION OF,
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY AND SUBJECT TO THE
PROVISIONS OF AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT DATED AS OF JULY ___,
2006, A COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY.



     (k) CASHLESS EXERCISE. Notwithstanding any provisions to the contrary, if the fair market
value of one (1) share of Common Stock is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may



12









 




elect to receive shares of Common Stock equal to the value (as determined below) of this Warrant
(or the portion thereof being canceled) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Notice of Exercise and notice of such election in which
event the Company shall issue to the Holder a number of shares of Common Stock computed using the
following formula:




X= Y (A-B)

            A



	 	 	 	 	 	 	 
	 

	 	Where
	 	X =
	 	the number of shares of Common Stock to be issued to the Holder
	 

	 	 	 	 	 	 
	 

	 	 	 	Y =
	 	the number of shares of Common Stock purchasable under the Warrant or,
if only a portion of the Warrant is being exercised, the portion of
the Warrant being cancelled (at the date of such calculation)
	 

	 	 	 	 	 	 
	 

	 	 	 	A =
	 	the fair market value of one share of Common Stock (at the date of
such calculation and calculated in accordance with Section (c) hereof)
	 

	 	 	 	 	 	 
	 

	 	 	 	B =
	 	Exercise Price (as adjusted to the date of such calculation)






     (l) AMENDMENTS. Neither the Warrant nor any term hereof may be changed, waived, discharged or
terminated without the prior written consent of the Holder.



     (m) NO IMPAIRMENT. The Company will not avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Warrant and in the taking of
all such action as may be necessary or appropriate in order to protect the rights of any Holder.



     (n) GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the
State of Delaware.



     (o) NOTICES. All notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by first class mail, postage prepaid, addressed (a) if to the Holder,
                                                             or (b) if to the Company, to
                                                            , or at such other address as to the Company shall have
furnished to the Holder in writing.



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     IN WITNESS WHEREOF, New Horizons Worldwide, Inc. has caused this Warrant to be executed by its
officer thereunto duly authorized.



Dated: July __, 2006




	 	 	 	 	 	 	 
	 	 	NEW HORIZONS WORLDWIDE, INC.
	 

	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





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PURCHASE FORM




               Dated                     , 20___




     The undersigned hereby irrevocably elects to exercise its rights pursuant to this Warrant to
the extent of purchasing ___shares of Common Stock of New Horizons Worldwide, Inc. (the
“Company”), and hereby makes payment of $                    , in cash, in payment of the exercise price
thereof.



     The undersigned hereby irrevocably elects to exercise its rights pursuant to this Warrant to
the extent of purchasing ___shares of Common Stock and hereby authorizes you to deliver such
shares of Common Stock for sale to                     , and to retain from the proceeds of such sale
$                    , in cash, in payment of the exercise price thereof and to remit to the undersigned the
balance of such proceeds.



     Pursuant to Section (k), the undersigned hereby irrevocably elects to exercise its rights
pursuant to this Warrant to purchase
                     shares of Common Stock through a cashless exercise
and hereby directs you to deliver shares of Common Stock to                     , in payment of the excess of
the fair market value over the exercise price thereof.



ASSIGNMENT FORM




     FOR VALUE RECEIVED,                                                              hereby sells, assigns
 and
transfers unto



Name                                                          
                                          




                    (Please typewrite or print in block letters)



Address                                                           
                                         



the right to purchase Common Stock of the Company, represented by this Warrant to the extent of
                    
shares as to which such right is exercisable and does hereby irrevocably constitute and
appoint                                                              as Attorney, to transfer the same on the books of the Company
with full power of substitution in the premises.



Date                     , 20___



Signature