First Amendment to Senior Subordinated Note Agreemen


 EXHIBIT 10.2 
  
 NOBEL LEARNING COMMUNITIES, INC. 
 FIRST AMENDMENT TO NOTE AGREEMENT 
  
 This First Amendment to Senior Subordinated Note Agreement (herein, the
“Amendment”) is entered into as of April 19, 2004, among Nobel Learning Communities, Inc., a Delaware corporation (“Borrower”), and Mollusk Holdings, L.L.C. and Blesbok LLC (collectively, the
“Lenders”). 
  
 PRELIMINARY
STATEMENTS 
  
 A. The Borrower, the Guarantors,
and the Lenders entered into a certain Senior Subordinated Note Agreement, dated as of February 20, 2004 (referred to herein as the “Note Agreement”). All capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Note Agreement. 
  
 B. The
Borrower has requested that the Lenders extend the deadline by which the Borrower is to sell its real property located in Alpharetta, Georgia in order to exclude Capital Expenditures in connection therewith from certain restrictions set forth in the
Note Agreement, amend the restriction on changing the Borrower’s fiscal year end, and make certain other amendments to the Note Agreement, and the Lenders are willing to do so under the terms and conditions set forth in this Amendment.

  
 NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
  
 SECTION 1. AMENDMENTS. 
  
 Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Note Agreement shall be and hereby
is amended as follows: 
  
 1.1. The definition of
“Capital Expenditures” set forth in Section 2.1 of the Note Agreement shall be amended and restated in its entirety to read as follows: 
  
 “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 (the “Alpharetta Property”), as long as such real property is sold by the Borrower not later than April 30, 2005 in a transaction pursuant to which the Borrower receives proceeds of not less than $1,000,000;
provided, however, that if the Borrower fails to sell the Alpharetta 






 Property by April 30, 2005, then all Capital Expenditures incurred in connection with the purchase of the
Alpharetta Property shall be included in the Borrower’s Capital Expenditures for the first fiscal quarter of 2005 of the Borrower. 
  
 1.2. Subsection (j) of Section 5.8 of the Note Agreement shall be amended and restated in its entirety to read as follows: 
  
 (i) Liens granted in favor of EAB Leasing Corp. on Property
of the Borrower and its Subsidiaries to secure an equipment lease, provided that, by June 7, 2004 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 equipment and certain proceeds thereof acceptable to the Existing Senior Lender 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. 
  
 1.4. Section 5.13 of the Note Agreement shall be amended and restated in its entirety to read as follows: 
  
 Section 5.13. 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 Saturday closest to June 30 of each year (whether such Saturday is before or after June 30), with corresponding changes to its fiscal quarter ending dates. 
  
 SECTION 2. CONDITIONS
PRECEDENT. 
  
 Upon the satisfaction of all of the
following conditions precedent, this Amendment shall become effective on and as of the date first above written to the same extent as if it had been entered into on such date: 
  
 2.1. The Borrower, the Guarantors and the Lenders shall have executed and delivered this Amendment.

  
 2.2. Legal matters incident to the execution
and delivery of this Amendment shall be satisfactory to the Lenders and their counsel. 
  

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 SECTION 3. REPRESENTATIONS. 
  
 In order to induce the Lenders to execute and deliver this Amendment, the
Borrower hereby represents to the Lenders that as of the date hereof the representations and warranties set forth in Section 3 of the Note Agreement are and shall be and remain true and correct (except that the representations contained in Section
3.5 shall be deemed to refer to the most recent financial statements of the Borrower delivered to the Lenders) and the Borrower is in compliance with the terms and conditions of the Note Agreement and no Default or Event of Default has occurred and
is continuing under the Note Agreement or shall result after giving effect to this Amendment. 
  
 SECTION 4. MISCELLANEOUS. 
  
 4.1. Except as specifically amended herein, the Note Agreement shall continue in full force and effect in accordance with
its original terms. Reference to this specific Amendment need not be made in the Note Agreement, the Notes, or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant
to or with respect to the Note Agreement, any reference in any of such items to the Note Agreement being sufficient to refer to the Note Agreement as amended hereby. 
  
 4.3. The Borrower agrees to pay on demand all costs and expenses of or incurred by the Lenders in connection with the
negotiation, preparation, execution and delivery of this Amendment, including the fees and expenses of counsel for the Lenders. 
  
 4.4. This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original. This Amendment shall
be governed by the internal laws of the State of California. 
  
 [SIGNATURE PAGE TO FOLLOW] 
  

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 This First Amendment to Note Agreement is entered into as of the date and year first above written.

  

			
	 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

	
	 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/ George H. Bernstein


	 Name
	 	 George H. Bernstein

	 Title
	 	 President



  

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	 SPYROS, INC.

		
	 By
	 	 /s/ George H. Bernstein


	 Name
	 	 George H. Bernstein

	 Title
	 	 President

	
	 ORTHONI, INC.

		
	 By
	 	 /s/ George H. Bernstein


	 Name
	 	 George H. Bernstein

	 Title
	 	 President

	
	 MARIAN CATECHIS, INC.

		
	 By
	 	 /s/ George H. Bernstein


	 Name
	 	 George H. Bernstein

	 Title
	 	 President

	
	 SANC, INC.

		
	 By
	 	 /s/ George H. Bernstein


	 Name
	 	 George H. Bernstein

	 Title
	 	 President

	
	 MALONA, INC.

		
	 By
	 	 /s/ George H. Bernstein


	 Name
	 	 George H. Bernstein

	 Title
	 	 President

	
	 NOBEL LEARNING TECHNOLOGIES, INC.

		
	 By
	 	 /s/ George H. Bernstein


	 Name
	 	 George H. Bernstein

	 Title
	 	 President



  

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	 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
	 	 George H. Bernstein

	 Title
	 	 President



  

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 Accepted and agreed to. 
  

			
	 “LENDERS”

	
	 MOLLUSK HOLDINGS, L.L.C.

		
	 By:
	 	 Cephalopod Corporation, its member

		
	 By:
	 	 /s/ Philip B. Simon


	 Name:
	 	 Philip B. Simon

	 Title:
	 	 President

	 101 Ygnacio Valley Road, Suite 310

	 Walnut Creek, CA 94596

	 Attn:
	 	 Philip B. Simon

	 FAX:
	 	 (925) 977-9064

	
	 BLESBOK LLC

		
	 By:
	 	 /s/ Stanley E. Maron


	 Name:
	 	 Stanley E. Maron

	 Title:
	 	 Secretary

	 1250 Fourth Street, 6th Floor

	 Santa Monica, CA 90401

	 Attn:
	 	 Chief Executive Officer

	 FAX:
	 	 (310) 570-4571



  

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