Document:

<PAGE>
                                                                    Exhibit 10.4

                                                                  EXECUTION COPY

                          CONSENT AND AMENDMENT NO. 4

          CONSENT AND AMENDMENT NO. 4 (this "Consent and Amendment"), dated as
of June 10, 2005, among THE BON-TON DEPARTMENT STORES, INC. ("Bon-Ton") and THE
ELDER-BEERMAN STORES CORP. ("Elder-Beerman" and together with Bon-Ton, the
"Borrowers"), the other Credit Parties party to the Credit Agreement referred to
below, the Lenders party to such Credit Agreement and GENERAL ELECTRIC CAPITAL
CORPORATION as Administrative Agent and Lender.

                              W I T N E S S E T H:
                              - - - - - - - - - -

          WHEREAS, the parties hereto have entered into that certain Second
Amended and Restated Credit Agreement, dated as of October 24, 2003 (such
agreement, as amended, supplemented or otherwise modified from time to time,
being hereinafter referred to as the "Credit Agreement," and capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined); and

          WHEREAS, the Borrowers and The Bon Ton Receivables Partnership, L.P.
are party to the existing Receivables Purchase Agreement dated as of January 30,
2004 (as amended, the "Receivables Agreement");

          WHEREAS, the Borrowers intend to terminate the Receivables Agreement
and sell their private label credit card receivables portfolio (the "Receivables
Portfolio") to a third party receivables servicer acceptable to the Agent and
have requested the consent of the Requisite Lenders to such sale;

          WHEREAS, a portion of the proceeds of the sale of the Receivables
Portfolio (approximately $90,000,000) will be used to prepay the Obligations
under the Credit Agreement;

          WHEREAS, the Requisite Lenders do hereby consent thereto and agree to
amend the Credit Agreement upon the terms and subject to the conditions provided
herein;

          NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained herein, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

          Section 1. Consent. As required under Section 6.8 of the Credit
Agreement, the Agent and the Requisite Lenders hereby consent to the Borrowers
selling the Receivables Portfolio to HSBC Bank Nevada, N.A. pursuant to the
Receivables Purchase Agreement, (as defined in Section 2(e) of this Consent and
Amendment).

<PAGE>
          Section 2. Amendment. The Requisite Lenders, the Agent, the Borrowers
and the other Credit Parties hereby agree on the following amendments to the
Credit Agreement:

          (a) Sections 6.2(e), 6.6(c), 6.6(d), 6.7(c) and 8.1(l) are hereby
deleted in their entirety and replaced with the text "[Intentionally Deleted]".

          (b) Section 6.8(f) of the Credit Agreement is hereby amended by
deleting the clause in its entirety and replacing it with the following:

               "(f) the sale of Borrowers' private-label credit card receivables
          pursuant to the Receivables Purchase Agreement"

          (c) Section 6.19(a) is hereby deleted in its entirety and replaced
with the following:

               "(a) The Borrowers shall not, and shall not permit any of their
          respective subsidiaries to amend the Receivables Purchase Agreement in
          a manner adverse to any Credit Party, the Administrative Agent or
          Lenders without the Administrative Agent's prior written consent."

          (d) The following defined terms in Annex A shall be deleted in their
entirety: "BT Receivables Securitization," "BT Securitization Documents," "EB
Intercreditor Agreement," "EB Purchase Agreements," "EB Receivables
Securitization," "EB Securitization Documents," "Receivables," "Transfer
Agreement" and "Securitization Documents."

          (e) Annex A is amended by inserting the following new definition in
the appropriate alphabetical order:

               "Receivables Purchase Agreement" shall mean the Purchase and Sale
          Agreement dated as of June 10, 2005 between the Parent and HSBC Bank
          Nevada, N.A., in form and substance acceptable to the Administrative
          Agent, as such agreement may be amended or supplemented in accordance
          with the provisions of Section 6.19(a).

          Section 3. Conditions to Effectiveness. This Consent and Amendment
shall become effective as of the date hereof when the Agent shall have received
the following:

          (a) this Consent and Amendment, duly executed by the Borrowers, the
Credit Parties and the Requisite Lenders;

          (b) a Credit Card Processor Agreement, duly executed by the Borrowers,
HSBC Bank Nevada, N.A. and the Agent; and

                                       2

<PAGE>
          (c) at least $65,000,000 from cash proceeds of the sale to be applied
as a prepayment of the outstanding principal balance of the Revolving Credit
Advances.

          Section 4. Representations and Warranties. The Borrowers and other
Credit Parties hereby jointly and severally represent and warrant to the Lenders
and the Agent as follows:

          (a) After giving effect to this Consent and Amendment, each of the
representations and warranties in Section 3 of the Credit Agreement and in the
other Loan Documents are true and correct in all material respects on and as of
the date hereof as though made on and as of such date, except to the extent that
any such representation or warranty expressly relates to an earlier date and
except for changes therein not prohibited by the Credit Agreement.

          (b) After giving effect to this Consent and Amendment, no Default or
Event of Default has occurred and is continuing as of the date hereof.

          (c) The execution, delivery and performance by the Credit Parties of
this Consent and Amendment have been duly authorized by all necessary or proper
corporate action and do not require the consent or approval of any Person which
has not been obtained.

          (d) This Consent and Amendment has been duly executed and delivered by
each Credit Party and each of this Consent and Amendment and the Credit
Agreement constitutes the legal, valid and binding obligation of the Credit
Parties, enforceable against them in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar law or by
general equitable principles.

          Section 5. Effect on the Loan Documents. (a) The provisions of the
Credit Agreement and all of the other Loan Documents shall remain in full force
and effect and are hereby ratified and confirmed.

          (b) The execution, delivery and effectiveness of this Consent and
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Lenders or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

          Section 6. Costs and Expenses. The Borrowers agree to pay on demand
all costs, fees and expenses of the Agent in connection with the preparation,
execution and delivery of this Consent and Amendment and the other instruments
and documents to be delivered pursuant hereto, including the reasonable fees and
out-of-pocket expenses of counsel for the Agent with respect thereto.

          Section 7. Execution in Counterparts. This Consent and Amendment may
be executed in any number of counterparts and by different parties hereto in
separate

                                       3

<PAGE>
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.

          Section 8. Governing Law. This Consent and Amendment shall be governed
by and construed and enforced in accordance with the laws of the State of New
York applicable to contracts made and performed in such state, without regard to
the principles thereof regarding conflict of laws.

                                       4

<PAGE>
          IN WITNESS WHEREOF, the parties hereto have duly executed this Consent
and Amendment as of the date first above written.

                                          Borrowers:
                                          ---------

                                          THE BON-TON DEPARTMENT STORES, INC.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: Treasurer

                                          THE ELDER-BEERMAN STORES CORP.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name:  H. Todd Dissinger
                                              Title: VP and Asst. Treasurer

                                          Other Credit Parties:
                                          --------------------

                                          THE BON-TON STORES, INC.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: Treasurer

                                          THE BON-TON CORP.

                                          By: /s/ Keith E. Plowman
                                              --------------------------------
                                              Name: Keith E. Plowman
                                              Title: Treasurer

                                          THE BON-TON TRADE CORP.

                                          By: /s/ Keith E. Plowman
                                              --------------------------------
                                              Name: Keith E. Plowman
                                              Title: Treasurer

                                          THE BON-TON STORES OF LANCASTER, INC.

                                          By: /s/ Robert E. Stern
                                              --------------------------------
                                              Name: Robert E. Stern
                                              Title: Secretary

                                       5
<PAGE>
                                          THE BON-TON GIFTCO, INC.

                                          By: /s/ Keith E. Plowman
                                              --------------------------------
                                              Name: Keith E. Plowman
                                              Title: Treasurer

                                          ELDER-BEERMAN WEST VIRGINIA, INC.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: VP and Asst. Treasurer

                                          ELDER-BEERMAN HOLDINGS, INC.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: VP and Asst. Treasurer

                                          THE BEE-GEE SHOE CORP.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: VP and Asst. Treasurer

                                          ELDER-BEERMAN INDIANA, L.P.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: VP and Asst. Treasurer

                                          EL-BEE CHARGIT CORP.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: VP and Asst. Treasurer

                                          ELDER-BEERMAN OPERATIONS, LLC

                                          By: /s/ Keith E. Plowman
                                              --------------------------------
                                              Name: Keith E. Plowman
                                              Title: VP and Asst. Secretary

                                          By: ELDER-BEERMAN HOLDINGS, INC.

                                          By: /s/ H. Todd Dissinger
                                              --------------------------------
                                              Name: H. Todd Dissinger
                                              Title: VP and Asst. Treasurer

                                       6
<PAGE>
Agent and Lenders:
-----------------

GENERAL ELECTRIC CAPITAL
CORPORATION

By: /s/ Charles Chiodo
    ----------------------------------------
    Name: Charles Chiodo
    Title: Duly Authorized Signatory

UBS AG, Stamford Branch

By: /s/ Wilfred V. Saint
    ----------------------------------------
    Name: Wilfred V. Saint
    Title: Director Banking Products Services

BANK ONE, N.A.

By: /s/ Paul Fravel
    ----------------------------------------
    Name: Paul Fravel
    Title: V. P.

WACHOVIA CAPITAL FINANCE
CORPORATION (CENTRAL) F/K/A
CONGRESS FINANCIAL
CORPORATION (CENTRAL)

By: /s/ Laura Dixon
    ----------------------------------------
    Name: Laura Dixon
    Title: Associate

MANUFACTURERS AND TRADERS
TRUST COMPANY

By: /s/ Pamela M. Pasqualini
    ----------------------------------------
    Name: Pamela M. Pasqualini
    Title: Vice President

BANK OF AMERICA, N.A.

By: /s/ Allen R. Juleus
    ----------------------------------------
    Name: Allen R. Juleus
    Title: Senior Vice President

THE CIT GROUP/BUSINESS CREDIT,
INC.

By: /s/ Steven Schuit
    ----------------------------------------
    Name: Steven Schuit
    Title: Vice President

                                       7
<PAGE>
BANK OF AMERICA, N.A.

By:_______________________________
   Name:
   Title:

WELLS FARGO FOOTHILL, LLC

By: /s/ Kurt Duerfeldt
    ------------------------------
    Name: Kurt Duerfeldt
    Title: Division Credit Manager, SVP

                                       8LINCOLN TECHNICAL INSTITUTE
                          MANAGEMENT STOCK OPTION PLAN

                           (Effective January 1, 2002)

         1. Purpose. The Lincoln Technical Institute Management Stock Option
Plan (the "Plan") is intended to further the best interests of Lincoln Technical
Institute, Inc., a New Jersey corporation (the "Company"), and its subsidiaries
by encouraging key employees, consultants and non-employee directors of the
Company and such subsidiaries to continue their association with the Company and
its subsidiaries and by providing additional incentive for unusual industry and
efficiency through offering an opportunity to acquire a proprietary stake in the
Company and its future growth. The Company believes that this goal may best be
achieved through the grant of nonqualified stock options (the "Nonqualified
Stock Options") or incentive stock options intended to qualify under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code") (the "Incentive
Stock Options", and together with the Nonqualified Stock Options, the
"Options"), to purchase shares of Class A common stock, no par value, of the
Company ("Common Stock"). Options are sometimes referred to herein as "Awards".

         2. Shares Subject to Plan. There are reserved for issue upon the
exercise of Options granted under the Plan no more than 2,087,835 shares (the
"Option Shares") of the Company's authorized Common Stock. The Option Shares,
are reserved for grant as either Service Options (as defined below) or
Performance Options (as defined below). If any Option granted under the Plan
shall expire or terminate without having been exercised in full or cancelled in
exchange for a cash or other payment, subject to the terms of Section 9 hereof,
the unissued Option Shares subject thereto shall again be available for the
purposes of the Plan. Notwithstanding the foregoing, the maximum number of
shares of Common Stock that may be issued in connection with Incentive Stock
Options is 1,043,917 shares, subject to such adjustments under Section 8 as may
be permitted under Section 422 of the Code.

         3. Effective Date of Plan. The Plan shall take effect on January 1,
2002 (the "Effective Date"). The shareholders of the Company shall duly approve
the Plan within 12 months after its adoption by the Board of Directors of the
Company (the "Board"). If such shareholder approval is not obtained, then the
Plan shall be void ab initio and any Awards made hereunder shall be
automatically rescinded.

         4. Administration of the Plan. The Plan shall be administered by the
Board or by the Compensation Committee of the Board (the "Committee"). The Board
may authorize the Committee to exercise any and all of the powers and functions
of the Board pursuant to the Plan. The interpretation and construction by the
Committee or the Board of any provisions of the Plan or of any Awards granted
under it shall be final and conclusive. No member of the Committee or of the
Board shall be liable for any action or determination made in good faith with
respect to the Plan or any Awards granted under it.

<PAGE>

         5. Eligibility. Options may be granted only to those key employees
("Employees") consultants ("Consultants") and non-employee directors
("Directors") of the Company or of any subsidiary of the Company (as such term
is defined in Section 425 of the Code) selected by the Board or the Committee
(together, the "Participants").

         6. Options.

         (a) Grant of Options. The Company, by action of the Board or of the
Committee and subject to the provisions of this Plan, may, from time to time,
grant Options to purchase Option Shares to Participants and for such number of
Option Shares as may be determined by the Board or the Committee. Each grant of
an Option pursuant to this Plan shall be made in writing and upon such terms and
conditions as may be determined by the Board or by the Committee at the time of
grant, subject to the provisions and limitations set forth in this Plan. The
grant of any such Option shall be evidenced by a written agreement executed by
such officer of the Company as is designated in the resolution of the Board or
the Committee authorizing such Option grant, and the date thereof shall be the
date of grant of such Option.

         (b) Option Price. The per share exercise price of each Option (the
"Option Price") granted pursuant to this Plan shall be determined by the Board
or by the Committee; provided that the Option Price of any Options granted on
the Effective Date shall be $3.10 per Option Share. Notwithstanding the
foregoing, the Option Price for an Incentive Stock Option shall be no less than
100% of the fair market value of a share of Common Stock as of the date of
grant, as determined in good faith by the Committee in accordance with Section
422 of the Code.

         (c) Duration of Options. The period for which each Option granted
hereunder shall be effective shall commence upon the date of the written
agreement evidencing such Option and (unless otherwise expressly specified in
such written agreement) shall continue until such Option shall be terminated
according to its terms or as hereinafter provided (the "Option Period"). Except
as otherwise expressly provided in this Section 6(c) and in Section 10 hereof,
an Option (whether or not exercisable) shall terminate immediately upon an
Employee's ceasing to be an employee, a Consultant's ceasing to be a consultant
or, in the case of a Director, a Director's ceasing to be a member of the Board
of the Company or any of its subsidiaries. The Option Period of any Option
granted pursuant to this Plan shall terminate upon the earliest to occur of (1)
the tenth anniversary of the date of the written agreement evidencing such
Option and (2) the following dates:

         (i) the six-month anniversary of the date upon which the Participant
holding such Option ceases to be an employee, consultant or director of the
Company or its subsidiaries by reason of death;

         (ii) unless otherwise specifically provided in any agreement between
the Participant and the Company or one of its subsidiaries, the thirty-day
anniversary of the date of the Retirement or Disability (as such terms are
defined in the Management Stockholders Agreement dated April 1, 2001, by and
among the Company, the Management Investors (as defined therein) parties thereto
and Stonington (as defined therein) (as in effect from time to time, the
"Management Stockholders Agreement")) of the Participant if the Participant
retires or is disabled while an employee, consultant or director of the Company
or any of its subsidiaries,

                                       2
<PAGE>

or the thirty-day anniversary of the date of Retirement, Disability or
Involuntary Termination (as defined in the Management Stockholders Agreement) of
the Participant; provided, however, that in the event of a Participant's
termination of employment due to Retirement, Disability or Involuntary
Termination, Performance Options shall terminate on the thirty-day anniversary
of the later of (A) such termination of employment and (B) April 15th of the
year in which such termination of employment occurred.

         (iii) immediately upon a Participant's Voluntary Resignation (as
defined in the Management Stockholders Agreement) or termination of employment,
consultancy or directorship with the Company or any of its subsidiaries for
Cause (as defined in the Management Stockholders Agreement).

         (d) Non-Transferability. No Option granted pursuant to this Plan may be
sold, offered, disposed of, pledged, hypothecated, encumbered or otherwise
transferred by the Participant except to a deceased Participant's executors,
administrators and testamentary trustees or as provided in the Management
Stockholders Agreement, and, further, during the lifetime of the Participant,
the Option may be exercised only by, or on behalf of, the Participant.

         (e) Incentive Stock Options Granted to Certain Shareholders. No
Incentive Stock Option may be issued pursuant to the Plan to any individual who,
at the time the Option is granted, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or any parent
or subsidiary (as defined in Section 424 of the Code) of the Company, unless (i)
the Option Price determined as of the date of grant is at least 110% of the fair
market value on the date of grant of the shares of Common Stock subject to such
Option, as determined in good faith by the Board in accordance with Section 422
of the Code, and (ii) the Incentive Stock Option is not exercisable more than
five years from the date of grant.

         (f) Exercisability and Vesting of Options. Options granted hereunder
shall be designated by the Board or the Committee as Service Options or
Performance Options. Options shall become exercisable pursuant to the following
terms and (except as otherwise expressly provided for in the agreement granting
such Option, in any agreement between the Company and the Participant or below
in this Section 6(f)) only if the Employee is an employee or the Consultant is a
consultant of the Company or any of its subsidiaries (as determined pursuant to
Section 10 hereof) or, in the case of a Director, the Director is a member of
the Board or board of directors of any of its subsidiaries on the date on which
such Option becomes exercisable. An Option (or portion thereof) which becomes
exercisable pursuant to the terms of this Section 6(f) is referred to as a
"Vested Option."

         (i) The Board or the Committee may designate certain Options as Service
Options ("Service Options"). Except as the Board or the Committee may otherwise
determine, Service Options granted on the Effective Date shall vest and become
exercisable with respect to 20% of the Option Shares as of the first anniversary
of the date of grant and with respect to an additional 20% of the Option Shares
as of each of the second, third, fourth and fifth anniversaries of the date of
grant; provided that the Employee or Consultant remains in the employ of the
Company or any of its subsidiaries (as determined pursuant to Section 10 hereof)
or the Director remains a member of the Board or board of directors of any of
its subsidiaries; and provided, further, that in the event of a Change in
Control (as herein defined) of the Company all

                                       3

<PAGE>

outstanding unvested Service Options held by Participants shall become fully
vested and immediately exercisable on the effective date of such Change in
Control.

         (ii) The Board or the Committee may designate certain Options as
Performance Options ("Performance Options"). Except as the Board or the
Committee may otherwise determine, or except as expressly provided for in the
agreement granting such Option, Performance Options shall vest and become
exercisable at a rate of up to 20% per year subject to the achievement of
predetermined EBITDA Value (as defined in Schedule I hereto) targets for each
fiscal year of the Company (the "Target EBITDA Values"), or the achievement of
cumulative EBITDA Value targets (the "Cumulative Target EBITDA Values").
Performance Options shall vest and become exercisable on April 15th following
the year in which the Target EBITDA Values or the Cumulative Target EBITDA
Values are achieved, provided that the Participant (A) remains in the employ of
the Company or any of its subsidiaries (as determined pursuant to Section 10
hereof), or (B) is no longer in the employ of the Company or any of its
subsidiaries due to an Involuntary Termination which occurred after the last day
of the fiscal year of the Company. The Target EBITDA Values and the Cumulative
Target EBITDA Values for a grant of Performance Options shall be established
prior to the relevant date of grant. If the Target EBITDA Value for a fiscal
year is not achieved, none of the Performance Options subject to vesting for
such fiscal year shall become exercisable and such Performance Options shall
instead remain eligible to vest and become exercisable if and when the
applicable Cumulative Target EBITDA Value is achieved; provided, further, that
each Performance Option shall become fully vested and immediately exercisable on
the seventh anniversary of the date such Option was granted (the "Anniversary
Date"), provided that the Participant holding such Option has remained
continuously in the employ of the Company or any of its subsidiaries (as
determined pursuant to Section 10 hereof) through the Anniversary Date;
provided, further, that, in the event of a Change in Control, all outstanding
Performance Options held by Participants shall become fully vested and
immediately exercisable on the effective date of such Change in Control;
provided, further, that in the event of an IPO (as defined in the Management
Stockholders Agreement) Performance Options not yet vested will no longer become
exercisable in accordance with this Section 6(f)(ii) and will vest and become
exercisable as if they were Service Options, in the same manner as determined
under clause (i) of this Section 6(f).

         Subject to Sections 8 and 11 hereof, the Target EBITDA Values and the
Cumulative Target EBITDA Values as established pursuant to the Plan, shall be
adjusted as determined by the Board in good faith if there has been a
disposition of assets representing a substantial portion of the consolidated
assets of the Company, an acquisition of assets representing a substantial
portion of the consolidated assets of the Company, a recapitalization or merger
of the Company, or other extraordinary transaction in the preceding four
quarters.

         (iii) "Change in Control," shall mean: (A) on or prior to an IPO (i)
the merger of the Company with or into another corporation as a result of which
Stonington owns less than 30% of the outstanding common stock (on a fully
diluted basis, assuming exercise of all options and warrants, whether or not
then exercisable) of the surviving company (or parent thereof), (ii) the sale of
all or substantially all of the assets of the Company to an entity not
controlled by Stonington, or (iii) the sale (in a single transaction or series
of related transactions) to an entity not controlled by Stonington of shares of
Common Stock and as a result of which Stonington owns less than 30% of the
outstanding Common Stock (on a fully diluted basis, assuming

                                       4

<PAGE>

exercise of all options and warrants, whether or not then exercisable);
provided, however, that an IPO shall not constitute a Change in Control; and (B)
following an IPO (1) when a "person", as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in
Sections 13(d) and 14(d) thereof, including a "group", as defined in Section
13(d) and 14(d) thereof either directly or indirectly becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of 15% or more of
either (i) the then outstanding Common Stock or (ii) the combined voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors; provided, however, that the following
acquisitions shall not constitute a Change in Control (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, or (iii) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; (2)
when, during any period of 24 consecutive months during the existence of the
Plan, the individuals who, at the beginning of such period, constitute the Board
(the "Company Incumbent Directors"), cease for any reason other than death to
constitute at least a majority thereof; provided, however, that a director who
was not a director at the beginning of such 24-month period shall be deemed to
be a Company Incumbent Director if such director was elected by, or on the
recommendation of or with the approval of at least two-thirds of the directors
of the Company, who then qualified as Company Incumbent Directors; (3) when the
stockholders of the Company approve a reorganization, merger or consolidation of
the Company without the consent or approval of a majority of the Company
Incumbent Directors; (4) the consummation of a reorganization, merger or
consolidation of the Company with or into another entity or any other corporate
reorganization, if more than 60% of the combined voting power of the continuing
or surviving entity's securities outstanding immediately after such
reorganization, merger or consolidation is owned by persons who were not
stockholders of the Company immediately prior to such reorganization, merger,
consolidation; or (5) a complete liquidation or dissolution of the Company or
the sale or other disposition of all or substantially all of the assets of the
Company.

         (g) Procedure for Exercise and Payment for Shares. Exercise of an
Option shall be made by the giving of written notice to the Company by the
Participant. Such written notice shall be deemed sufficient for this purpose
only if it (i) is delivered to the Company at its principal offices, (ii) states
the number of Option Shares with respect to which the Option is being exercised,
and (iii) states the date, no earlier than the fifth business day after, and no
later than the tenth business day after, the date of such notice, upon which the
Option Shares shall be purchased and payment therefor shall be made. The
payments for Option Shares purchased pursuant to exercise of an Option shall be
made at the principal offices of the Company. Upon (x) the exercise of any
Option, in compliance with the provisions of this Section 6(g), (y) receipt by
the Company of the payment for the Option Shares so purchased together with cash
in the amount of (or the making of arrangements referred to in Section 13 of the
Plan with respect to) any taxes required to be collected or withheld as a result
of the exercise of this Option, and (z) receipt by the Company of an executed
copy of the Management Stockholders Agreement (unless such Participant is
already a party thereto or the Company receives such other evidence as the
Company may reasonably require to ensure that the Option Shares issuable upon
exercise of the Option shall be subject to the Management Stockholders
Agreement), the Company shall deliver or cause to be delivered to the
Participant so exercising an Option a certificate or certificates for the number
of Option Shares with respect to which the Option is so exercised and payment is
so made. The Option Shares shall be registered in the name of the exercising

                                       5
<PAGE>

Participant; provided that in no event shall any Option Shares be issued
pursuant to exercise of an Option until full payment therefor shall have been
made in one of the manners set forth below; and provided, further, that until
such payment has been made, the exercising Participant shall have no rights of a
shareholder. For purposes of this paragraph, the date of issuance shall be the
date upon which payment in full has been received by the Company as provided
herein. The exercise price shall be payable at the election of the Participant,
in whole or in part, in any one or a combination of cash or "Mature Common
Stock" valued at the Fair Value Price (as defined below) as of the date the
notice of exercise is given. Mature Common Stock is defined as shares of Common
Stock held by such Participant for more than six months.

         (h) Cash-Out of Certain Options. (i) Without limiting any rights of the
Company under the Management Stockholders Agreement, the Board or Committee may
in its sole discretion cancel the vested portion of any Option held by a person
who is at such time no longer an employee, consultant or director of the Company
or its subsidiaries in exchange for a cash payment equal to the excess of (x)
the Fair Value Price (as defined below) of the Option Shares subject to such
Vested Option, over (y) the Option Price for such Option Shares, multiplied by
the number of Option Shares subject to such cancelled Options; provided,
however, that the exercise of the right of the Board or the Committee hereunder
shall not be made in contemplation of a Change in Control or an IPO.

         (ii) Without limiting any rights of the Company under the Management
Stockholders Agreement, the Board or the Committee may cancel any outstanding
Option in exchange for a cash payment, or in the discretion of the Board or the
Committee payment of other property, to the Participant equal to the excess of
(x) the fair market value (as determined in good faith by the Board) of the
consideration received per Stonington Share by Stonington in any sale (by
merger, stock purchase or otherwise) to a person which is not an Affiliate (as
defined in the Management Stockholders Agreement) of the Company or Stonington
of all the then issued and outstanding Stonington Shares (as defined in the
Management Stockholders Agreement) (a "Transfer Event"), over (y) the Option
Price for such Option Shares, multiplied by the number of Option Shares subject
to such cancelled Options, in each case effective upon the consummation of the
Transfer Event.

         (iii) "Fair Value Price," shall mean, with respect to each Option
Share, as of any date of determination, (X) in the event there is no public
market for the Common Stock, the quotient obtained by dividing (a) the excess of
(I) the product of (A) the Company's EBITDA (as defined in the Management
Stockholders Agreement) for the four full fiscal quarters ending immediately
preceding the date of determination, and (B) 6.0 over (II) the excess of (C) the
sum of (x) the aggregate principal amount of any Indebtedness (as defined in the
Management Stockholders Agreement), determined in accordance with GAAP (as
defined in the Management Stockholders Agreement), as of the end of the most
recently completed fiscal quarter of the Company and (y) the aggregate
liquidation value (including any accrued dividends thereon) of any outstanding
preferred stock of the Company or any of its subsidiaries that is held by
persons or entities other than the Company or any of its subsidiaries,
determined in accordance with GAAP, as of the end of the most recently completed
fiscal quarter of the Company, over (D) the sum of the amount of cash deemed to
be on hand as of the end of such quarter as a result of the assumed exercise of
all outstanding Options as described in the next paragraph and the amount of
cash and cash equivalents, determined in accordance with GAAP, held by the
Company or

                                       6

<PAGE>

any of its subsidiaries as of the end of such quarter by (b) the number of
Shares then outstanding determined on a fully diluted basis as of the end of its
most recently completed fiscal quarter of the Company; provided, however, if
there had been a disposition of assets representing a substantial portion of the
consolidated assets of the Company, an acquisition of assets representing a
substantial portion of the consolidated assets of the Company, a
recapitalization or merger of the Company, or other extraordinary transaction in
the preceding four quarters then the Fair Value Price shall be adjusted as
determined by the Board in good faith or (Y) in the event of a public market for
the Common Stock, the closing price of a share of Common Stock as reported on
the composite tape for securities listed on the New York Stock Exchange, or such
other national securities exchange as may be designated by the Board, or, in the
event that the Common Stock is not listed for trading on a national securities
exchange but is quoted on an automated system, on such automated system, in any
such case on the date of determination (or, if there were no sales on the date
of determination, the closing price of a share of Common Stock as reported on
said composite tape or automated system for the most recent day during which a
sale occurred).

         In making calculations for purposes of subclauses (a) and (b) of clause
(X) of the preceding paragraph it shall be assumed that all Options (whether or
not then vested or exercisable), warrants and rights to purchase shares of
Common Stock and securities convertible or exchangeable into shares of Common
Stock, if any, outstanding on the date as of which the calculation is being made
had been exercised, converted or exchanged on such date if the exercise price or
conversion or exchange price is less than the Fair Value Price per share and any
purchase price for shares of Common Stock payable upon such exercise had been
paid in cash and appropriate adjustments (including without limitation the
reflection of such cash exercise price and the issuance of such additional
shares of Common Stock) made to the relevant balance sheet of the Company.

         7. Requirements of Law and of Certain Agreements. If any law or any
regulation of any commission or agency of competent jurisdiction shall require
the Company or the exercising Participant to take any action with respect to any
Option Shares, then the date upon which the Company shall issue or cause to be
issued the certificate or certificates for such Option Shares shall be postponed
until full compliance has been made with all such requirements of law or
regulation; provided that the Company shall use reasonable efforts to take all
necessary action to comply with such requirements of law or regulation. Further,
if requested by the Company, at or before the time of the issuance of such
Option Shares, the Participant shall deliver to the Company his or her written
statements satisfactory in form and content to the Company, that he or she
intends to hold the Option Shares so acquired by him or her for investment and
not with a view to resale or other distribution thereof to the public in
violation of the Securities Act or any applicable state securities or "blue sky"
law. Moreover, in the event that the Company shall determine in its sole
discretion that, in compliance with the Securities Act or any applicable state
securities or "blue sky" law, it is necessary to register any of the Option
Shares, or to qualify any such Option Shares for exemption from any of the
requirements of the Securities Act or any other applicable statute or
regulation, no Options may be exercised until the required action has been
completed; provided that the Company shall use reasonable efforts to take all
necessary action to comply with such requirements of law or regulation. All
Option Shares shall bear the legends provided for in the Management Stockholders
Agreement.

                                       7

<PAGE>

         8. Adjustments. In the event of the declaration of any stock dividend
on any class of shares of common stock of the Company or in the event of any
reorganization, merger, consolidation, acquisition, disposition, separation,
recapitalization, stock split, split-up, spin-off, combination or exchange of
any such shares of Common Stock or like event, the number and/or character of
the Option Shares and/or the Option Price of any Option granted under the Plan,
shall be appropriately adjusted by changes in this Plan and in any Options
outstanding pursuant to this Plan (including, if appropriate, by substitution of
options of the successor or transferee company in the event of a merger or
disposition, cash or other property for the Options) that may be deemed to be
appropriate by the Committee or the Board, acting in good faith.

         9. Grant of Terminated Options. If any Option (or any portion thereof)
terminates as a result of an Participant's ceasing to be an Employee, Consultant
or Director of the Company or its subsidiaries, the Committee or the Board may
grant to any Participant other than such former Participant an additional Option
or Options with respect to the unissued Option Shares previously subject to the
Option (or portion thereof) so terminated at such price and on terms and
conditions determined by the Board at the date of such grant.

         10. Termination of Employment or Consultancy.

         (a) The employment of an Employee shall not be deemed to have
terminated if the Employee is an employee of the Company who is transferred to
and becomes an employee of a subsidiary of the Company or, if he or she is an
employee of a subsidiary of the Company, who is transferred to and becomes an
employee of the Company or another subsidiary of the Company; provided, however,
that if a subsidiary of the Company ceases to be a subsidiary, all employees of
such subsidiary not theretofore transferred to and becoming employees of the
Company or of another subsidiary of the Company shall be deemed to have ceased
to be Employees within the meaning of this Plan on the date such subsidiary
ceases to be a subsidiary of the Company.

         (b) The consultancy of a Consultant shall not be deemed to have
terminated if the Consultant is a Consultant of the Company who is transferred
to and becomes an consultant of a subsidiary of the Company or, if he or she is
a consultant of a subsidiary of the Company, who is transferred to and becomes a
consultant of the Company or another subsidiary of the Company; provided,
however, that if a subsidiary of the Company ceases to be a subsidiary, any
consultants of such subsidiary not theretofore transferred to and becoming
consultants of the Company or of another subsidiary of the Company shall be
deemed to have ceased to be Consultants within the meaning of this Plan on the
date such subsidiary ceases to be a subsidiary of the Company.

                                       8

<PAGE>

         11. Termination, Amendment or Discontinuance of the Plan.

         (a) This Plan shall terminate upon, and no Options shall be granted
after, the close of business on January 1, 2012 unless it shall have sooner
terminated by there having been granted and either fully exercised or cancelled
in exchange for a cash payment Options covering the entire 2,087,835 Option
Shares subject to this Plan.

         (b) The Board may, insofar as permitted by law, amend, suspend, or
discontinue this Plan at any time without restriction; provided, however, that
the Board may not alter or amend or discontinue or revoke or otherwise impair
any outstanding Options which have been granted pursuant to this Plan and which
remain unexercised in a manner adverse to Option holders, except in an
adjustment referred to in Section 8 above or in Section 11(c) below, or except
in the event that there is secured the written consent of the holder of the
outstanding Option proposed to be so altered or amended. Nothing contained in
this paragraph, however, shall in any way condition or limit the termination of
an Option as hereinabove provided where reference is made to termination of
employment, consultancy or directorship of a Participant. The Option Period of
any outstanding Option shall not be extended by any amendment or suspension or
discontinuance of the Plan.

         (c) In the event of the declaration of any stock dividend on any class
of shares of common stock of the Company or in the event of any reorganization,
merger, consolidation, acquisition, disposition, separation, recapitalization,
stock split, split-up, spin-off, combination or exchange of any such shares of
Common Stock or like event, such substitution or adjustments (including if
appropriate substitution of options of the successor or transferee company in
the event of a merger or disposition, cash or other property) shall be made in
the aggregate number of shares reserved for issuance under the Plan, and in the
vesting criteria of outstanding Options, as may be determined to be appropriate
by the Committee or the Board, acting in good faith.

         12. Liquidation of the Company. In the event of the complete
liquidation or dissolution of the Company other than as an incident to a merger,
reorganization, or other transaction referred to in Section 8 or 11(c) above,
any Options remaining unexercised shall be deemed cancelled without regard to or
limitation by any other provision of this Plan and each Vested Option shall be
entitled to a payment in cancellation thereof equal to the excess, if any, of
the amount received per Option Share in such liquidation or dissolution over the
Option Price, multiplied by the number of Option Shares subject to such Option.

         13. General Provisions.

         (a) Nothing contained in the Plan shall prevent the Company or any
subsidiary from adopting other or additional compensation arrangements for its
employees, consultants or directors.

         (b) The adoption of the Plan shall not confer upon any Employee any
right to continued employment, any Consultant any right to continued consultancy
or any Director any right to continue as a member of the Board or board of
directors of any of its subsidiaries, nor shall it interfere in any way with the
right of the Company or any subsidiary to terminate the employment, consultancy
or directorship of any Employee, Consultant or Director at any time.

                                       9

<PAGE>

         (c) No later than the date as of which an amount first becomes
includible in the gross income of the Participant for Federal income tax
purposes with respect to Option Shares acquired pursuant to the exercise of any
Option hereunder, such Participant shall pay to the Company, or make
arrangements reasonably satisfactory to the Company regarding the payment of,
any Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount; provided, however, that such arrangements
need not involve the advancement by the Company of any funds to, for or on
behalf of any Participant or the incurrence or payment by the Company of any
costs or expenses. With the approval of the Committee, a Participant may satisfy
the foregoing requirements by electing to have the Company withhold from
delivery shares of Common Stock having a value equal to the amount of tax to be
withheld (but not in excess of the Company's minimum statutory withholding). The
obligations of the Company hereunder shall be conditional on such payment or
arrangements, and the Company shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
Participant.

         (d) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of New York
without reference to the choice of law principles thereof.

                                       10
<PAGE>

                                   SCHEDULE I

                                  EBITDA Values
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------
<S>                                <C>              <C>              <C>             <C>              <C>
Fiscal Year                        2002             2003             2004            2005             2006

--------------------------------------------------------------------------------------------------------------------
Target EBITDA Value
(thousands)                     $ 13,000         $ 18,000         $ 23,000         $ 26,500        $ 30,000
--------------------------------------------------------------------------------------------------------------------
Cumulative Target
EBITDA Value
(thousands)                     $ 13,000         $ 31,000         $ 54,000         $ 80,500        $ 110,500

--------------------------------------------------------------------------------------------------------------------
</TABLE>

EBITDA Value for a fiscal year shall mean the consolidated earnings from
continuing operations of the Company and its subsidiaries for such period before
consolidated interest, taxes, depreciation and amortization, determined in
accordance with GAAP in effect on the date hereof and consistent with the
principles utilized in connection with the preparation of the audited financial
statements of the Company for the Fiscal Year ended December 31, 2002 excluding
(i) extraordinary charges and gains and (ii) any charges or gains attributable
to the grant or exercise of the Option.

                                       11

<PAGE>

                      STOCK OPTION AND CONSULTING AGREEMENT

         STOCK OPTION AGREEMENT AND CONSULTING AGREEMENT (the "Agreement"),
dated as of June 21, 1999, between LINCOLN TECHNICAL INSTITUTE, INC., a New
Jersey corporation (the "Company"), and STEVEN W. HART (the "Consultant").

         WHEREAS, the Company is a party to a recapitalization agreement dated
as of April 26, 1999 (the "Recapitalization Agreement");

         WHEREAS, the Consultant has provided consulting and advisory services
to the Company in connection with strategic and acquisition opportunities; and

         WHEREAS, pursuant to the terms and subject to the conditions
hereinafter set forth, the Company desires to continue to engage the Consultant
to render consulting and advisory services during the period following the
closing of the transactions contemplated by the Recapitalization Agreement among
P.J. Santangelo, James Santangelo and Back to School Acquisition L.L.C. (the
"Transactions"), and to increase his interest in the success of the Company by
granting to the Consultant nonqualified stock options (the "Options") to
purchase shares of common stock, no par value per share, of the Company (the
"Common Stock").

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

         1. Consulting Engagement. The Company hereby agrees to engage the
Consultant, and the Consultant hereby accepts such engagement with the Company,
for the period set forth in Section 2 below, with the responsibilities
determined pursuant to Section 3 below, all in accordance with the terms and
conditions hereof.

         2. Consulting Period. The period during which the Consultant shall be
engaged as a consultant by the Company (the "Consulting Period") shall commence
on the Closing Date (as such term is defined in the Recapitalization Agreement)
of the Transactions (the "Effective Date"), and shall continue until the second
anniversary of the Effective Date.

         3. Responsibilities. During the Consulting Period, and subject to
Subsection 10(a) hereof, the duties of the Consultant shall consist of such
consulting and advisory services, and shall be provided at such times, as may be
agreed to from time to time by the Consultant and the Company. The Consultant
shall report to the Board of Directors of the Company (the "Board"), or to its
designee.

         4. Consulting Capacity Only. The Consultant shall act solely in a
consulting capacity hereunder and shall not have authority to act for the
Company or to give instructions or orders on behalf of the Company or to make
any decisions or commitment for or on behalf of the Company, except as otherwise
expressly authorized by the Company. The parties hereto acknowledge and agree
that the Consultant shall not be an employee of the Company with respect to
which the Consultant shall render any consulting or advisory services during the
Consulting Period, but will act in the capacity of an independent contractor.
Consequently, the

                                       1

<PAGE>

Consultant shall, solely as a result of his service as a consultant, not be
entitled to participate in any employee benefit plans, programs or arrangements
of the Company.

         5. Expenses. The Company shall pay or reimburse the Consultant for
reasonable expenses incurred by him in connection with the performance of his
obligations to the Company upon presentation by the Consultant of an itemized
account of such expenses in a manner consistent with the Company's policies and
procedures for employees.

         6. Termination of Consulting Arrangement. Subject to the provision of
this Agreement, either the Consultant or the Company shall have the right to
terminate this Agreement for any reason or for no stated reason at any time upon
thirty (30) days' prior written notice to the other party.

         7. Stockholders Agreement; Certain Restrictions. The Consultant and the
Company hereby confirm that, effective as of the date of exercise of the Option,
the Consultant shall enter into a Stockholders Agreement among the Company, Back
to School Acquisition, LLC, Hart/LTI, LLC and Steven W. Hart (the "Stockholders
Agreement") in the form attached as Exhibit A hereto, be deemed to be a
"Stockholder" with respect to the Option Shares and the Consultant agrees to be
bound by all the terms of the Stockholders Agreement. None of the Option Shares
may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed
of to any third party other than the Company except as provided in the
Stockholders Agreement. None of the Options may be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of, except by will or the laws of
descent and distribution. During the Consultant's lifetime, an Option shall be
exercisable only by the Consultant. Each Permitted Transferee (as defined in the
Stockholders Agreement) (other than the Company) of any Option Share shall, as a
condition to the transfer thereof, execute an agreement pursuant to which it
shall become a party to the Stockholders Agreement.

         8. Grant of Options. As exclusive compensation for the consulting
services to be performed by the Consultant hereunder during the Consulting
Period, and subject to the terms and conditions contained herein, the Company
hereby grants to the Consultant, effective as of the Effective Date (the "Date
of Grant"), an Option to purchase 1615 shares of Common Stock (the "Option
Shares") at an exercise price equal to $154.82.

         9. Terms and Conditions of Options. The Options evidenced hereby are
subject to the following terms and conditions:

         (a) Duration of Options. The period for which the Options are
     effective shall commence upon the Date of Grant and shall continue until
     the Options are terminated as hereinafter provided (the "Option Period").
     The Option Period of the Options shall terminate upon the earliest to occur
     of (1) the tenth anniversary of the Date of Grant and (2) the following
     dates:

               (i) if the Consultant voluntarily terminates his consulting
         arrangement herein before the last day of the Consulting Period or the
         Consultant breaches Subsection 10(a) following the Board's
         determination that the Consultant has engaged in Competitive Activity
         (as defined below) that has resulted, or

                                       2

<PAGE>

         could reasonably be expected to result, in material harm to the
         Company pursuant to Subsection 10(a), the ninetieth day following the
         date on which the Consultant terminates the consulting arrangement or
         the Board makes such determination, as the case may be.

              (ii) immediately upon the Company's termination of the consulting
         arrangement herein for "Cause". "Cause" shall mean (A) willful or
         persistently repeated material non-performance of the Consultant's
         duties to the Company after notice by the Company of such failure, (B)
         the indictment of the Consultant for a felony offense, (C) the
         commission by the Consultant of fraud or any willful misconduct that
         brings the reputation of the Company into disrepute, or (D) a material
         breach by the Consultant of any of the covenants set forth in
         Subsections 10(b) and (c).

         (b) Exercisability and Vesting of Options. The Options shall be fully
     vested and fully exercisable on the Date of Grant.

         (c) Procedure for Exercise and Payment for Shares. Exercise of these
     Options shall be made by the Consultant's giving written notice to the
     Company. Such written notice shall be deemed sufficient for this purpose
     only if it (i) is delivered to the Company at its principal offices, (ii)
     states the number of Option Shares with respect to which the Option is
     being exercised, and (iii) states the date, no earlier than the fifth
     business day after, and no later than the tenth business day after, the
     date of such notice, upon which the Option Shares shall be purchased and
     payment therefor shall be made. The payments for Option Shares purchased
     pursuant to exercise of these Options shall be made at the principal
     offices of the Company. Upon (x) the exercise of any Option, in compliance
     with the provisions of this Subsection 9(c), (y) receipt by the Company of
     the payment for the Option Shares so purchased together with cash in the
     amount of any taxes required to be collected or withheld as a result of the
     exercise of this Option, and (z) receipt by the Company of an executed copy
     of the Stockholders Agreement (unless such Consultant is already a party
     thereto or the Company receives such other evidence as the Company may
     reasonably require to ensure that the Option Shares issuable upon exercise
     of the Option will be subject to the Stockholders Agreement), the Company
     shall deliver or cause to be delivered to the Consultant so exercising an
     Option a certificate or certificates for the number of Option Shares with
     respect to which these Options are exercised and payment is made. The
     Option Shares shall be registered in the name of the exercising Consultant;
     provided that in no event shall any Option Shares be issued pursuant to
     exercise of an Option until full payment therefor shall have been made in
     one of the manners set forth below; and provided, further, that until such
     payment has been made, the exercising Consultant shall have no rights of a
     shareholder. For purposes of this paragraph, the date of issuance shall be
     the date upon which payment in full has been received by the Company as
     provided herein. The exercise price shall be payable at the election of the
     Consultant, in whole or in part, in any one or a combination of cash or
     Mature Common Stock valued at the Fair Value Price (as defined below) as of
     the date the notice of exercise is given. "Mature Common Stock" means
     shares of Common Stock held by such Consultant for more than six months.
     "Fair Value Price" means, as

                                       3

<PAGE>

     of any date of determination, the fair market price per share of Common
     Stock as of such date, as determined by the Board in its sole discretion.

          (d) Stockholder Rights. The Consultant shall have no rights as a
     stockholder with respect to any Option Shares until such Consultant shall
     have exercised the related Options and until a certificate or certificates
     evidencing such shares shall have been issued to the Consultant, and no
     adjustment shall be made for dividends or distributions or other rights in
     respect of any share for which the record date is prior to the date upon
     which the Consultant shall become the holder of record thereof.

          (e) Dividends and Distributions. Any shares of Common Stock or other
     securities of the Company received by the Consultant as a result of a stock
     distribution to holders of Option Shares, as a stock dividend on Option
     Shares or pursuant to a similar transaction shall be subject to the same
     restrictions as such Option Shares, and all references to Option Shares
     hereunder shall be deemed to include such shares of Common Stock or other
     securities.

     10. Protection of the Company's Interests.

          (a) Other Business Activities of the Consultant. The parties hereto
     acknowledge that the Consultant and his affiliates and successors are
     engaged in various businesses, including the business of acquiring, selling
     and holding investments. Nothing herein shall be deemed to prohibit the
     Consultant and his affiliates from advising, consulting for, being employed
     by, engaging, directly or indirectly, in or owning, directly or indirectly,
     any interest in, any other business ventures or activities that may be
     considered competitive with the Company or its subsidiaries or affiliates
     (collectively, "Competitive Activity"); provided, however, that during the
     Consulting Period the Consultant shall be prohibited from engaging in any
     such Competitive Activity if the Board determines in good faith that such
     Competitive Activity has resulted, or could reasonably be expected to
     result, in material harm to the Company or its subsidiaries or affiliates.
     Nothing shall require the Consultant or his affiliates to permit the
     Company or any of its subsidiaries or affiliates or any other shareholder
     of the Company to participate in any manner in any profits or income earned
     or derived by or accruing to the Consultant or his affiliates, or any of
     their respective employees or other agents, from such business ventures or
     activities. Nothing shall give the Company or its subsidiaries or
     affiliates any interest in any information of or pertaining to such
     business ventures or activities.

          (b) Confidentiality. The Consultant recognizes that the services to be
     performed by him hereunder are special, unique and extraordinary in that,
     by reason of his consulting service hereunder, he may acquire confidential
     information and trade secrets concerning the operation of the Company or
     its affiliates or subsidiaries, the use or disclosure of which could cause
     the Company or its affiliates or subsidiaries substantial losses and
     damages that could not be readily calculated and for which no remedy at law
     would be adequate. Accordingly, the Consultant covenants and agrees with
     the Company that he shall not at any time, except in performance of his
     obligations hereunder or with the prior written consent of the Company,
     directly or indirectly, disclose to any person, entity or organization
     (other than the Company or its employees,

                                       4

<PAGE>

     officers, directors, shareholders or agents) or use for his own benefit any
     confidential information that he may learn or has learned by reason of his
     association with the Company, or any of its predecessors, subsidiaries and
     affiliates. The Consultant further agrees that he will retain all copies
     and extracts of any written confidential information acquired by him during
     the consulting engagement, shareholding or association in trust for the
     sole benefit of the Company, their affiliates and their successors and
     assigns. The Consultant further agrees that he will not, without the prior
     written consent of the Company, remove or take from the Company's premises
     (or if previously removed or taken, he will, at the Company's request,
     promptly return) any written confidential information or any copies or
     extracts thereof. Upon the request and at the expense of the Company, the
     Consultant shall promptly make all disclosures, execute all instruments and
     papers and perform all acts reasonably necessary to vest and confirm in the
     Company, fully and completely, all rights created or contemplated by this
     Subsection 10(b). The term "confidential information" means any information
     of the Company that is deemed to be confidential by the Company and that
     was not previously disclosed or otherwise available to the public or to the
     trade with respect to the Company's, or any of its predecessors',
     affiliates' or subsidiaries', services, facilities and methods, trade
     secrets and other intellectual property, systems, procedures, manuals,
     confidential reports, student lists, course materials, financial
     information or business plans.

          (c) Exclusive Property. The Consultant confirms that all confidential
     information is and shall remain the exclusive property of the Company. All
     business records, papers and documents kept or made by the Consultant
     specifically relating to the business of the Company, its predecessors,
     affiliates and subsidiaries shall be and remain the property of the
     Company. Upon the request of the Company at any time, the Consultant shall
     promptly deliver to the Company, and shall not without the consent of the
     Company retain copies of, any written materials not made available to the
     public, or records and documents made by the Consultant or coming into his
     possession concerning the business or affairs of the Company or any of its
     affiliates or subsidiaries.

          (d) Injunctive Relief. Without intending to limit the remedies
     available to the Company, the Consultant acknowledges that a breach of any
     of the covenants contained in this Section 10 may result in material
     irreparable injury to the Company or its affiliates or subsidiaries for
     which there is no adequate remedy at law, that it will not be possible to
     measure damages for such injuries precisely and that, in the event of such
     a breach or threat thereof, the Company shall be entitled to obtain a
     temporary restraining order and/or a preliminary or permanent injunction
     restraining the Consultant from engaging in activities prohibited by this
     Section 10 or such other relief as may be required to specifically enforce
     any of the covenants in this Section 10.

          (e) Violation and Remedy. If the Company reasonably determines that
     the Consultant has breached any of the provisions of this Section 10, in
     addition to any other remedies available to the Company in law or equity,
     the Company shall be entitled to immediately suspend as of the date of such
     breach its obligation to make any payments or benefits to the Consultant
     under this Agreement.

                                       5

<PAGE>

     11. Requirements of Law and of Certain Agreements. If any law or any
regulation of any commission or agency of competent jurisdiction shall require
the Company or the exercising Consultant to take any action with respect to any
Option Shares, then the date upon which the Company shall issue or cause to be
issued the certificate or certificates for such Option Shares shall be postponed
until full compliance has been made with all such requirements of law or
regulation; provided that the Company shall use reasonable efforts to take all
necessary action to comply with such requirements of law or regulation. Further,
if requested by the Company, at or before the time of the issuance of such
Option Shares, the Consultant shall deliver to the Company his written
statements satisfactory in form and content to the Company, that he intends to
hold the Option Shares so acquired by him for investment and not with a view to
resale or other distribution thereof to the public in violation of the
Securities Act or any applicable state securities or "blue sky" law. Moreover,
in the event that the Company shall determine in its sole discretion that, in
compliance with the Securities Act or any applicable state securities or "blue
sky" law, it is necessary to register any of the Option Shares, or to qualify
any such Option Shares for exemption from any of the requirements of the
Securities Act or any other applicable statute or regulation, no Options may be
exercised until the required action has been completed; provided that the
Company shall use reasonable efforts to take all necessary action to comply with
such requirements of law or regulation. All Option Shares shall bear the legends
provided for in the Stockholders Agreement.

     12. Miscellany.

          (a) No Rights to Grant Employment. Neither this Agreement nor any
     action taken or omitted to be taken hereunder shall be deemed to create or
     confer on the Consultant any right to be employed by the Company or any
     Subsidiary or other affiliate thereof, or to interfere with or to limit in
     any way the right of the Company or any Subsidiary or other affiliate
     thereof to terminate the consulting arrangement of the Consultant at any
     time.

          (b) No Restriction on Right of Company to Effect Corporate Changes.
     Neither the Plan nor this Agreement shall affect in any way the right or
     power of the Company or its stockholders to make or authorize any or all
     adjustments, recapitalizations, reorganizations or other changes in the
     capital structure or business of the Company, or any merger or
     consolidation of the Company, or any issue of stock or of options, warrants
     or rights to purchase stock or of bonds, debentures, preferred or prior
     preference stocks whose rights are superior to or affect the Common Stock
     or the rights thereof or which are convertible into or exchangeable for
     Common Stock, or the dissolution or liquidation of the Company, or any sale
     or transfer of all or any part of the assets or business of the Company, or
     any other corporate act or proceeding, whether of a similar character or
     otherwise.

          (c) Merger, Sale of Assets, etc. If at any time while the Options or
     any portion thereof are outstanding and unexpired, there shall be (i) a
     reorganization (other than a combination, reclassification, exchange or
     subdivision of shares otherwise provided for herein), (ii) a merger or
     consolidation of the Company with or into another corporation in which the
     Company is not the surviving entity or a reverse triangular merger in which
     the Company is the surviving entity but the shares of the Company's

                                       6

<PAGE>

     capital stock outstanding immediately prior to the merger are converted by
     virtue of the merger into other property, whether in the form of
     securities, cash, or otherwise, or (iii) a sale or transfer of the
     Company's properties and assets as, or substantially as, an entirety to any
     other person, then, as a part of such reorganization, merger,
     consolidation, sale or transfer, lawful provision shall be made so that the
     holder of the Options shall thereafter be entitled to receive upon
     exercise, the number of shares of stock or other securities or property of
     the successor corporation resulting from such reorganization, merger,
     consolidation, sale or transfer that a holder of the shares deliverable
     upon exercise of the Options would have been entitled to receive in such
     reorganization, consolidation, merger, sale or transfer if the Options had
     been exercised immediately before such reorganization, consolidation,
     merger, sale or transfer, all subject to further adjustment as provided
     below. If the per share consideration payable to the holder hereof for
     shares in connection with any such transaction is in a form other than cash
     or marketable securities, then the value of such consideration shall be
     determined in good faith by the Board. In all events, appropriate
     adjustment (as determined in good faith by the Board) shall be made in the
     application of the provisions of the Options with respect to the rights and
     interest of the holder after the transaction, to the end that the
     provisions of the Options shall be applicable after that event, as near as
     reasonably may be, in relation to any shares or other property deliverable
     after that event upon exercise of the Options.

          (d) Reclassification, etc. Subject to Subsection 12(c), if, at any
     time while the Options are outstanding, the Common Stock is changed by
     reason of a stock split, reverse stock split, stock dividend or
     recapitalization, or converted into or exchanged for other securities as a
     result of a merger, consolidation or reorganization, the Company shall make
     appropriate adjustments in the number and class of shares of stock subject
     to the Options, and the exercise price.

          (e) Notices. In the event, prior to termination of the Options, of a
     dissolution or liquidation of the Company, a reorganization, merger or
     consolidation in which the Company is not the surviving corporation or a
     sale of all or substantially all of the assets of the Company to another
     person or entity (a "Corporate Transaction"), the Consultant shall be given
     (i) written notice of such Corporate Transaction a reasonable period prior
     to its proposed effective date (as specified in such notice) and (ii) an
     opportunity to fully exercise the Options.

          (f) Impairment: Reservation of Shares.The Company shall not, by
     amendment of its Certificate of Incorporation or through any
     reorganization, transfer of assets, consolidation, merger, dissolution,
     issue or sale of securities or any other voluntary action, avoid or seek to
     avoid the observance or performance of any of the terms to be observed or
     performed hereunder by the Company, but shall at all times in good faith
     assist in the carrying out of all the provisions hereof and in the taking
     of all such action as may be necessary or appropriate in order to protect
     the rights of the Consultant, as holder of the Options, against impairment.
     The Company covenants that during the term that the Options are
     exercisable, the Company shall reserve from its authorized and unissued
     Common Stock a sufficient number of shares to provide for the issuance of
     Common Stock upon the exercise of the Options. The Company agrees that its
     issuance of the Options shall constitute full authority to its officers who
     are charged

                                       7
<PAGE>

     with the duty of executing stock certificates to execute and issue the
     necessary certificates for shares of Common Stock upon the exercise of the
     Options.

          (g) 1934 Act. Notwithstanding anything contained in this Agreement to
     the contrary, if the consummation of any transaction under this Agreement
     would result in the possible imposition of liability to the Consultant
     pursuant to Subsection 16(b) of the 1934 Act, the Board or the Committee
     shall have the right, in its sole discretion, but shall not be obligated,
     to defer such transaction to the extent necessary to avoid such liability,
     but in no event for a period in excess of 180 days.

          (h) Validity. The invalidity or unenforceability of any provision of
     this Agreement shall not affect the validity or enforceability of any other
     provision of this Agreement, which shall remain in full force and effect.
     The parties intend that any offending provision shall be enforced to the
     fullest extent to which it is enforceable, that any unenforceable portion
     thereof be severed from this Agreement, and that this Agreement, as
     modified to sever any such unenforceable portion, shall be enforced to the
     fullest extent permitted by law.

          (i) Counterparts. This Agreement may be executed in several
     counterparts, each of which shall be deemed to be an original but all of
     which together shall constitute one and the same instrument.

          (j) Headings. The headings contained in this Agreement are intended
     solely for convenience of reference and shall not affect the rights of the
     parties to this Agreement.

          13. Survival; Assignment.

          (a) All agreements, representations and warranties made herein and in
     any certificates delivered pursuant hereto shall survive the issuance to
     the Consultant of the Options and the Option Shares and, notwithstanding
     any investigation heretofore or hereafter made by the Consultant or the
     Company or on the Consultant's or the Company's behalf, shall continue in
     full force and effect. Without the prior written consent of the Company,
     the Consultant may not assign any of his rights hereunder except by will or
     the laws of descent and distribution. Whenever in this Agreement any of the
     parties hereto is referred to, such reference shall be deemed to include
     the heirs and permitted successors and assigns of such party; and all
     agreements herein by or on behalf of the Company, or by or on behalf of the
     Consultant, shall bind and inure to the benefit of the heirs and permitted
     successors and assigns of such parties hereto.

          (b) The Company shall have the right to assign to any of its
     affiliates any of its rights, or to delegate to any of its affiliates any
     of its obligations (other than obligations with respect to the Company's
     Options granted hereunder), under this Agreement.

     14. Certain Remedies. Without intending to limit the remedies available to
either party, each party agrees that damages at law will be an insufficient
remedy in the event such party violates the terms of this Agreement. Each party
agrees that the other party may

                                       8

<PAGE>

apply for and have injunctive or other equitable relief in any court of
competent jurisdiction to restrain the breach or threatened breach of, or
otherwise specifically to enforce, any of the provisions hereof.

     15. Notices. Any notice hereunder by either party to the other shall be
given in writing by personal delivery or certified mail, return receipt
requested, or by telex or facsimile, in any case delivered to the applicable
address set forth below:

          (i) If to the Company: Lincoln Technical Institute, Inc.

                                 200 Executive Drive
                                 West Orange, NJ 07052
                                 Attention: President

                                 With a copy to:

                                 Stonington Partners, Inc.
                                 767 Fifth Avenue, 48th Floor
                                 New York, NY 10153
                                 Attention: James J. Burke, Jr.

          (ii) If to the Consultant: Steven W. Hart

                                     131 Rowayton Avenue
                                     Rowayton, CT 06853

or to such other persons or other addresses as either party may specify to the
other in writing.

         16. Amendments, Waiver, Etc. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing by both parties hereto. No waiver by any party hereto at
any time of any breach by the other party hereto of, or of compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by any party that are not expressly set forth in this Agreement,
and this Agreement shall supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
with respect to the subject matter hereof.

         17. Entire Agreement; Governing Law. This Agreement and the other
related agreements expressly referred to herein set forth the entire agreement
and understanding between the parties hereto and supersede all prior agreements
and understandings relating to the subject matter hereof. This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
agreement. The headings of sections and subsections herein are included solely
for convenience of reference and shall not affect the meaning of any of the
provisions of this Agreement. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.

                                       9

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Consultant has executed this
Agreement, both as of the day and year first above written.

                                             LINCOLN TECHNICAL INSTITUTE, INC.

                                             By:    /s/ P.J. Santangelo
                                                --------------------------------
                                                Name:  P.J. Santangelo
                                                Title: President

                                             CONSULTANT

                                             By:    /s/ Steven W. Hart
                                                -------------------------------
                                                   STEVEN W. HART

                                       10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]