Document:

<PAGE>

                                                                    Exhibit 10.6

                             REVOLVING CREDIT NOTE
                             ---------------------

                                                             Baltimore, Maryland
$10,000,000                                                  June 30, 2000

     FOR VALUE RECEIVED, eSylvan, Inc., a Maryland corporation (the "Maker"),
promises to pay to the order of Sylvan Ventures, LLC, a Delaware limited
liability company (together with all subsequent holders of this Note, the
"Payee"), the principal sum of Ten Million Dollars ($10,000,000), or such lesser
aggregate amount as may be advanced by the Payee from time to time pursuant to
the terms of this Note, together with interest on the unpaid principal balance
hereof from time to time outstanding, at a fluctuating rate of interest equal to
the Prime Rate (hereinafter defined), adjusted (both upwards and downwards) on
the date of any change in the Prime Rate.  Interest on the outstanding principal
balance hereof shall be payable monthly in arrears on the first day of each
calendar month, commencing on August 1, 2000, and the entire, then outstanding
principal balance hereof, together with all accrued and unpaid interest hereon,
shall be due and payable on December 31, 2001, unless extended for one or more
successive, one-year renewal terms at the option of the Payee, exercisable in
writing only and at the sole and absolute discretion of the Payee.  For all
purposes pursuant to this Note, the term "Prime Rate" shall mean the prime rate
of interest as published in The Wall Street Journal, Eastern edition, from time
to time.

     Any payment required to be made hereunder (including any payment of
interest and/or principal) which is not made on the date that the same becomes
due and payable shall continue as an obligation of the Maker until it is fully
paid, and the Maker agrees in addition to pay, to the extent permitted by law,
late interest thereon at a fluctuating rate, adjusted daily, equal to the Prime
Rate plus five percent (5%) per annum, such late interest to accrue from the
date such overdue payment became due and payable until paid;  provided, however,
that such late interest shall not be due if the Maker's failure to make a
payment hereunder results from the Payee's failure to make a duly requested
advance to the Maker on or before the date requested by the Maker, all pursuant
to this Note.  The Maker also shall pay, promptly upon demand, all costs of
collection, including reasonable attorneys' fees if this Note is referred to an
attorney for collection after default, whether or not any action shall be
instituted to enforce or collect this Note.  Time is of the essence hereof for
all purposes.

     All payments on this Note shall be applied first to the payment of accrued
but unpaid interest, and any remainder shall be applied to reduction of the
principal balance hereof.  The rate of interest hereon shall be calculated on
the basis of a 360-day year factor applied to actual days elapsed.  All payments
hereunder shall be payable in lawful money of the United States of America and
shall be made to the Payee in immediately available funds at 1000 Lancaster
Street, Baltimore, Maryland 21202, or at such other address as the Payee may
from time to time designate in writing to the Maker.

     All advances by the Payee under this Note shall be made upon the following
terms and conditions: (a) the aggregate principal amount of all advances
outstanding at any one time shall not exceed $10,000,000; (b) each advance shall
be made pursuant to a written request of the Maker therefor delivered to the
Payee at the
<PAGE>

address stated in the preceding paragraph at least three (3) Banking Days
(hereinafter defined) prior to funding; and (c) the Payee shall (i) make a
notation on its internal accounting system, with appropriate reference to this
Note, reflecting the date and amount of each advance; and (ii) record the date
and amount of each advance on and otherwise complete Schedule A attached hereto
as a part hereof, with respect to such advance and forward to the Maker a copy
of Schedule A as so amended within fifteen (15) days of funding; provided,
however, that the Payee's failure to make appropriate notation of any advance or
prepayment shall not limit or otherwise affect the obligations of the Maker
hereunder.

     The Maker shall have the right and privilege to prepay this Note, in whole
or in part, at any time.  The date and amount of all payments (including
prepayments) shall be noted by the Payee on its internal accounting system, with
reference to this Note, and recorded on Schedule A to this Note.  The Payee
shall complete Schedule A with respect to each payment (including prepayments)
and shall forward to the Payee a copy of Schedule A as so amended within fifteen
(15) days of its receipt of such payment (or prepayment).  No prepayment shall
be subject to any premium for prepayment.

     The Maker and any endorsers or guarantors hereof severally waive
presentment and demand for payment, notice of intent to accelerate maturity,
notice of acceleration of maturity, protest or notice of protest and nonpayment,
bringing of suit and diligence in taking any action to collect any sums owing
hereunder or in proceeding against any of the rights and properties securing
payment hereof.  From time to time, without affecting the obligation of the
Maker to pay the outstanding principal balance of this Note and to observe the
covenants of the Maker contained herein, without affecting the duties and
obligations of any endorser hereto, without affecting the duties and obligations
of any guarantor hereof, without giving notice to or obtaining the consent of
the Maker or any endorser hereto or guarantor hereof, and without liability on
the part of the Payee, the Payee may, at the option of the Payee, extend the
time for payment of interest hereon and/or principal hereof, reduce the payments
hereunder, release anyone liable on this Note, accept a renewal of this Note,
modify the terms and time of payment of this Note, join in any extension or
subordination or exercise any option or election hereunder, modify the rate of
interest or period of principal repayment or principal due date of this Note or
exercise any option or election hereunder.  No one or more of such actions shall
constitute a novation.

     If default be made in the payment in whole or in part of any sum provided
for herein, or if an event of default shall occur under this Note or any
instrument or document executed in connection with this Note or the indebtedness
evidenced hereby, then the Payee may, at its option, without further notice or
demand, declare the unpaid principal balance and accrued interest on this Note
at once due and payable, pursue any and all other rights, remedies and recourses
available to the Payee, or pursue any combination of the foregoing.  The Payee
shall have the right to rescind any acceleration in payment of this Note for
default as aforesaid, if the Payee so elects, in which event this Note shall be
construed, interpreted and enforced in the same manner as if the Payee had not
elected to declare the unpaid principal balance and accrued interest of this
Note at once due and payable.
<PAGE>

     Failure to exercise any of the foregoing options upon the happening of one
or more of the foregoing events shall not constitute a waiver of the right to
exercise the same or any other option at any subsequent time in respect to the
same or any other event, and no single or partial exercise of any right or
remedy shall preclude other or further exercise of the same or any other right
or remedy.  The Payee shall have no duty to exercise any or all of the rights
and remedies herein provided or contemplated.  The acceptance by the Payee of
any payment hereunder that is less than payment in full of all amounts due and
payable at the time of such payment shall not constitute a waiver of the right
to exercise any of the foregoing options at that time or at any subsequent time,
or nullify any prior exercise of any such option without the express written
consent of the Payee.

     This Note shall be governed by and construed according to the laws of the
State of Maryland, without regard to principles of conflict of laws.

     Any attorney at law may appear in any court of record in the State of
Maryland or in the United States, after demand on this Note following an event
of default hereunder, and waive the issuing of service of process and confess a
judgment against the Maker in favor of the Payee for the amount then appearing
due hereunder, together with interest, costs of suit and attorneys' fees, and
thereupon release all errors and waive all right of appeal.

     It is expressly stipulated and agreed that the loan evidenced by this Note
is a "commercial loan" as defined in the Commercial Law Article of the Annotated
Code of Maryland.

     In any case where the date of maturity of interest on, or principal of,
this Note shall be a Sunday or legal holiday, or a day on which banking
institutions in the city of payment are authorized by law or executive order to
close (any other day being herein referred to as a "Banking Day"), then payment
of interest or principal need not be made on such date, but may be made on the
next succeeding Banking Day; provided, however, that interest shall continue to
accrue through the actual date of payment.

     Executed under seal in the City of Baltimore, Maryland, and intending this
Note to be a sealed instrument, as of the date and year first above written.

ATTEST or WITNESS:                          eSYLVAN, INC.

                                            By: /s/ David A. Graves
--------------------                            ------------------- (SEAL)
                                                Name:  David A. Graves
                                                Title: President<PAGE>

                                                                 EXHIBIT 10.7(i)

                           SERIES A PREFERRED STOCK
                              PURCHASE AGREEMENT

                                    between

                                 eSYLVAN, INC.

                                      and

                             SYLVAN VENTURES, LLC

                           Dated as of June 30, 2000
<PAGE>

                  SERIES A PREFERRED STOCK PURCHASE AGREEMENT

     This Series A Preferred Stock Purchase Agreement (the "Agreement") is made
as of June 30, 2000, between eSylvan, Inc., a Maryland corporation (the
"Company"), and Sylvan Ventures, LLC, a Delaware limited liability company (the
"Purchaser").

     WHEREAS, pursuant to a Contribution Agreement of even date herewith between
the Company and Sylvan Learning Systems, Inc., a Maryland corporation ("Sylvan
Learning"), Sylvan Learning entered into certain agreements and contributed a
cash payment and the Contributed Assets (as defined therein) in exchange for
shares (the "Initial Shares") of Common Stock, $0.001 par value, of the Company
("Common Stock");

     WHEREAS, pursuant to a Formation Agreement of even date herewith among
Sylvan Learning and certain other parties, Sylvan Learning contributed the
Initial Shares to the Purchaser; and

     WHEREAS, in connection with the foregoing transactions, the Company wishes
to issue and sell to the Purchaser, and Purchaser wishes to purchase, shares of
Series A Preferred Stock, $0.001 par value, of the Company ("Series A
Preferred") on the terms and subject to the conditions set forth in this
Agreement.

     NOW THEREFORE, in consideration of the covenants contained herein, and
other good and valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
Company and the Purchaser agree as follows:

                                   ARTICLE I
                         THE SERIES A PREFERRED SHARES

     SECTION 1.01 Issuance, Sale and Delivery of the Series A Preferred Shares.
                  ------------------------------------------------------------
Subject to the terms and conditions of this Agreement, the Company hereby agrees
to issue and sell to the Purchaser, and the Purchaser hereby agrees to purchase
from the Company, an aggregate of 10,526,316 shares of Series A Preferred (the
"Series A Preferred Shares") for a purchase price of $1.90 per share (the "Per
Share Purchase Price") and $20,000,000 in the aggregate (the "Aggregate Purchase
Price").

     SECTION 1.02 Scheduled Closings. The purchase and sale of the Series A
                  ------------------
Preferred Shares hereunder shall take place in six separate closings (each, a
"Closing"), to be held at the offices of the Company on September 30, 2000,
December 31, 2000, March 31, 2001, June 30, 2001, September 30, 2001 and
December 31, 2001 (each, a "Scheduled Closing Date"), or at such other
locations, dates and times as may be agreed upon by the Purchaser and the
Company. At each Closing, the Company shall deliver to the Purchaser a
certificate for 1,754,386 Series A Preferred Shares, constituting one-sixth
(1/6) of the Series A Preferred Shares to be purchased hereunder, registered in
the Purchaser's name, and the Purchaser shall pay $3,333,333.34, constituting
one-sixth (1/6) of the Aggregate Purchase Price, to the Company by certified or
bank cashier's check or wire transfer of immediately available funds.

     SECTION 1.03 Accelerated Closings. Notwithstanding anything to the
                  --------------------
contrary herein, the Purchaser may, upon written notice to the Company (each, an
"Acceleration Notice"), elect to
<PAGE>

have an accelerated closing (each, an "Accelerated Closing"), wherein the
parties close on the purchase and sale of any or all of the Series A Preferred
Shares in advance of one or more of the Scheduled Closing Dates. Each
Acceleration Notice shall indicate the date of the Accelerated Closing (each, an
"Accelerated Closing Date"), which date shall be at least two (2) days after the
delivery of the Acceleration Notice, and the number of Series A Preferred Shares
to be purchased at each Accelerated Closing. Unless otherwise agreed upon by the
Purchaser and the Company, Accelerated Closings shall be held at the offices of
the Company. At each Accelerated Closing, the Company shall deliver to the
Purchaser a certificate for the number of Series A Preferred Shares set forth in
the applicable Acceleration Notice (provided, however, that the sum of (i) the
number of shares to be delivered at an Accelerated Closing and (ii) the total
number of Series A Preferred Shares issued at any prior Closings hereunder shall
not exceed 10,526,316), registered in the Purchaser's name, and the Purchaser
shall pay to the Company by certified or bank cashier's check or wire transfer
of immediately available funds an amount equal to the product of the number of
Series A Preferred Shares delivered at the Accelerated Closing and the Per Share
Purchase Price. In the event that Series A Preferred Shares are purchased and
sold at an Accelerated Closing in accordance with this Section 1.03, then the
respective obligations of the parties to purchase and sell shares on the
immediately subsequent Scheduled Closing Date(s) shall be correspondingly
reduced.

                                  ARTICLE II
                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to the Purchaser that, as of the date
hereof and as of the date of each Closing or Accelerated Closing (as the case
may be):

     SECTION 2.01 Organization, Qualifications and Corporate Power.  The
                  ------------------------------------------------
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Maryland.  The Company has the corporate
power and authority to execute, deliver and, upon filing for record of an
appropriate, duly authorized charter document with the State Department of
Assessments and Taxation of Maryland ("SDAT") authorizing a class of capital
stock designated Series A Preferred Stock, with the number of shares,
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and other terms and conditions set
forth in Exhibit A attached hereto (the "Charter Document"), perform this
         ---------
Agreement, the Registration Rights Agreement with the Purchaser in the form
attached as Exhibit B (the "Registration Rights Agreement," and together with
            ---------
this Agreement, the "Transaction Documents"), to issue, sell and deliver the
Series A Preferred Shares, and to issue and deliver the shares of Common Stock
issuable upon conversion of the Series A Preferred Shares (the "Conversion
Shares").

     SECTION 2.02 Authorization of Agreements, Etc.
                  --------------------------------

          (a) The execution and delivery by the Company of the Transaction
Documents, the performance by the Company of its obligations thereunder, the
issuance, sale and delivery of the Series A Preferred Shares, and the issuance
and delivery of the Conversion Shares have been duly authorized by all requisite
corporate action and, upon filing for record of the Charter Document, will not
violate any provision of law, any order of any court or other agency of
government, the Articles of Incorporation of the Company or the Bylaws of the
Company, or any provision of any indenture, agreement or other instrument to
which the Company or any of its properties or assets is bound, or conflict with,
result in a breach of or constitute a default under,

                                      -2-
<PAGE>

any such indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge, restriction, claim or encumbrance of any nature
whatsoever upon any of the properties or assets of the Company.

          (b) Upon filing for record of the Charter Document, the Series A
Preferred Shares will be duly authorized and reserved for issuance and, when
issued in accordance with this Agreement, will be validly issued, fully paid and
nonassessable shares of Series A Preferred of the Company, free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company.  Upon issuance of the Series A Preferred Stock, the Conversion Shares
will be duly reserved for issuance upon conversion of such Series A Preferred
Shares and, when so issued, will be duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock, free and clear of all liens, charges,
restrictions, claims and encumbrances imposed by or through the Company.
Neither the issuance, sale or delivery of the Series A Preferred Shares nor the
issuance or delivery of the Conversion Shares is subject to any preemptive right
of stockholders of the Company or to any right of first refusal or other right
in favor of any person which has not been satisfied or waived.

     SECTION 2.03 Validity.  The Transaction Documents have been duly executed
                  --------
and delivered by the Company and constitute the legal, valid and binding
obligation of the Company, enforceable in accordance with their respective
terms.

                                  ARTICLE III
                REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     The Purchaser represents and warrants to the Company that, as of the date
here hereof, and as of the date of each Closing or Accelerated Closing (as the
Company may be):

          (a) the Transaction Documents have been duly executed and delivered by
the Purchaser and constitute the legal, valid and binding obligation of the
Purchaser, enforceable in accordance with their respective terms;

          (b) it has sufficient knowledge and experience in investing in
companies similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of its investment in the
Company and it is able, financially, to bear the risks thereof;

          (c) the Series A Preferred Shares being purchased by it are being
acquired for its own account for the purpose of investment and not with a view
to or for sale in connection with any distribution thereof;

          (d) it understands that (i) the Series A Preferred Shares and the
Conversion Shares have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), by reason of their issuance in a transaction
from the registration requirements of the Securities Act pursuant to Section
4(2) thereof or Rule 505 or 506 promulgated under the Securities Act, (ii) the
Series A Preferred Shares and, upon conversion thereof, the Conversion Shares
must be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration, (iii) the Series A
Preferred Shares and the Conversion Shares will bear a legend to such effect,
and (iv) the Company will make a notation on its transfer books to such effect;

                                      -3-
<PAGE>

          (e) it is an "accredited investor" within the meaning of Rule 501
under the Securities Act; and

          (f) if it sells any Conversion Shares pursuant to Rule 144A
promulgated under the Securities Act, it will take all necessary steps in order
to perfect the exemption from registration provided thereby, including (i)
obtaining on behalf of the Company information to enable the Company to
establish a reasonable belief that the purchaser is a qualified institutional
buyer and (ii) advising such purchaser that Rule 144A is being relied upon with
respect to such resale.

                                   ARTICLE IV
                 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER

     The obligation of the Purchaser to purchase and pay for the Series A
Preferred Shares being purchased hereunder is, subject to the satisfaction (or
waiver by the Purchaser), on or before each Closing (or Accelerated Closing, as
the case may be), of the following conditions:

          (a) Representations and Warranties to be True and Correct.  The
              -----------------------------------------------------
representations and warranties contained in Article II shall be true, complete
and correct in all material respects on and as of the applicable Closing Date or
Accelerated Closing Date with the same effect as though such representations and
warranties had been made on and as of such date, and the President of the
Company shall have certified to such effect to the Purchaser in writing.

          (b) All Proceedings to be Satisfactory.  All corporate and other
              ----------------------------------
proceedings to be taken by the Company in connection with the transactions
contemplated hereby and all documents incident thereto shall be satisfactory in
form and substance to the Purchaser, and the Purchaser shall have received all
such counterpart originals or certified or other copies of such documents as
they reasonably may request.

          (c) Registration Rights Agreement.  The Company shall have executed
              -----------------------------
and delivered the Registration Rights Agreement.

          (d) Charter Document.  The Company shall have filed for record the
              ----------------
Charter Document with SDAT.

          (e) Bylaws.  The Company's Bylaws shall have been amended, if
              ------
necessary, to comply with Section 5.08 hereof.

          (f) Election of Director.  An individual designated by the Purchaser
              --------------------
(the "Series A Director") shall have been elected as a director and shall hold
such position as of each Closing or Accelerated Closing, as the case may be.

                                   ARTICLE V
                            COVENANTS OF THE COMPANY

The Company covenants and agrees with the Purchaser that:

     SECTION 5.01 Financial Statements, Reports, Etc.  The Company shall
                  ----------------------------------
furnish to the Purchaser:

                                      -4-
<PAGE>

          (a) within one hundred twenty (120) days after the end of each fiscal
year of the Company, a consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of such fiscal year and the related
consolidated statements of income, stockholders' equity and cash flows for the
fiscal year then ended, prepared in accordance with generally accepted
accounting principles and certified by a firm of independent public accountants
of recognized national standing selected by the Board of Directors of the
Company;

          (b) within thirty (30) days after the end of each quarter in each
fiscal year, a consolidated balance sheet of the Company and its subsidiaries,
if any, and the related consolidated statements of income, stockholders' equity
and cash flows, unaudited but prepared in accordance with generally accepted
accounting principles and certified by the Chief Financial Officer of the
Company or other executive officer of the Company with similar title and duties,
such consolidated balance sheet to be as of the end of such quarter and such
consolidated statements of income, stockholders' equity and cash flows to be for
such quarter and for the period from the beginning of the fiscal year to the end
of such quarter, in each case with comparative statements for the prior fiscal
year;

          (c) at the time of delivery of each quarterly statement pursuant to
Section 5.01(b), a management narrative report explaining all significant
variances from forecasts and all significant current developments in staffing,
marketing, sales and operations;

          (d) no later than sixty (60) days prior to the start of each fiscal
year, consolidated capital and operating expense budgets, cash flow projections
and income and loss projections for the Company and its subsidiaries in respect
of such fiscal year, all itemized in reasonable detail and prepared on a monthly
basis, and, promptly after preparation, any revisions to any of the foregoing;

          (e) promptly following receipt by the Company, each audit response
letter, accountant's management letter and other written report submitted to the
Company by its independent public accountants in connection with an annual or
interim audit of the books of the Company or any of its subsidiaries;

          (f) promptly after the commencement or notice thereof, notice of all
actions, suits, claims, proceedings, investigations and inquiries that could
materially adversely affect the Company or any of its subsidiaries, if any;

          (g) promptly upon sending, making available or filing the same, all
press releases, reports and financial statements that the Company sends or makes
available to its stockholders or files with the Securities and Exchange
Commission; and

          (h) promptly, from time to time, such other information regarding the
business, prospects, financial condition, operations, property or affairs of the
Company and its subsidiaries as such Purchaser reasonably may request.

     SECTION 5.02 Reserve for Conversion Shares.  The Company shall at all
                  -----------------------------
times reserve and keep available out of its authorized but unissued shares of
Common Stock, for the purpose of effecting the conversion of the Series A
Preferred Shares and otherwise complying with the terms of this Agreement, such
number of its duly authorized shares of Common Stock as shall be

                                      -5-
<PAGE>

sufficient to effect the conversion of the Series A Preferred Shares from time
to time outstanding or otherwise to comply with the terms of this Agreement. If
at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of the Series A Preferred Shares or
otherwise to comply with the terms of this Agreement, the Company will forthwith
take such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes. The Company will obtain any authorization, consent, approval
or other action by or make any filing with any court or administrative body that
may be required under applicable state securities laws in connection with the
issuance of the Conversion Shares.

     SECTION 5.03 Corporate Existence.  The Company shall maintain and shall
                  -------------------
cause each of its subsidiaries (if any) to maintain, their respective corporate
existence, rights and franchises in full force and effect.

     SECTION 5.04 Inspection, Consultation and Advice.  The Company shall
                  -----------------------------------
permit and cause each of its subsidiaries (if any) to permit the Purchaser and
such persons as the Purchaser may designate, at the Purchaser's expense, to
visit and inspect any of the properties of the Company and its subsidiaries,
examine their books and take copies and extracts therefrom, discuss the affairs,
finances and accounts of the Company and its subsidiaries with their officers,
employees and public accountants (and the Company hereby authorizes said
accountants to discuss with the Purchaser and such designees such affairs,
finances and accounts), and consult with and advise the management of the
Company and its subsidiaries as to their affairs, finances and accounts, during
normal business hours following reasonable notice and in such manner so as not
to interrupt the normal operations of the Company or such subsidiaries.

     SECTION 5.05 Restrictive Agreements Prohibited.  Neither the Company nor
                  ---------------------------------
any of its subsidiaries shall become a party to any agreement, which by its
terms prohibits the Company's performance of any of the Transaction Documents.

     SECTION 5.06 Expenses of Directors.  The Company shall promptly reimburse
                  ---------------------
in full the Series A Director for all reasonable out-of-pocket expenses incurred
in attending each meeting of the Board of Directors of the Company or any
Committee thereof.

     SECTION 5.07 Use of Proceeds.  The Company shall use the proceeds from the
                  ---------------
sale of the Series A Preferred Shares solely for working capital.

     SECTION 5.08 Bylaws.  The Company shall at all times maintain provisions
                  ------
in its Articles of Incorporation and/or Bylaws indemnifying all directors
against liability and absolving all directors from liability to the Company and
its stockholders to the maximum extent permitted under the laws of the State of
Maryland.

     SECTION 5.09 Compliance with Laws.  The Company shall comply, and cause
                  --------------------
each subsidiary to comply, with all applicable laws, rules, regulations and
orders, noncompliance with which could materially adversely affect its business
or condition, financial or otherwise.

     SECTION 5.10 Keeping of Records and Books of Account.  The Company shall
                  ---------------------------------------
keep, and cause each subsidiary to keep, adequate records and books of account,
in which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all financial
transactions of the Company and such subsidiary, and in which, for

                                      -6-
<PAGE>

each fiscal year, all proper reserves for depreciation, depletion, obsolescence,
amortization, taxes, bad debts and other purposes in connection with its
business shall be made.

     SECTION 5.11  Change in Nature of Business.  The Company shall not make, or
                   ----------------------------
permit any subsidiary to make, any material change in the nature of its business
as it is currently conducted.

     SECTION 5.12  Termination of Covenants.  The covenants set forth in Article
                   ------------------------
V shall terminate and be of no further force or effect as to the Purchaser when
the Purchaser no longer holds any shares of Series A Preferred of the Company.

                                   ARTICLE VI
                                 MISCELLANEOUS

     SECTION 6.01  Expenses.  Each party hereto will pay its own expenses in
                   --------
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated.

     SECTION 6.02  Survival of Agreements.  All covenants, agreements,
                   ----------------------
representations and warranties made in any of the Transaction Documents or any
certificate or instrument delivered to the Purchaser pursuant to or in
connection with any of the Transaction Documents shall survive the execution and
delivery of all of the Transaction Documents, the issuance, sale and delivery of
the Series A Preferred Shares, and the issuance and delivery of the Conversion
Shares, and all statements contained in any certificate or other instrument
delivered by the Company hereunder or thereunder or in connection herewith or
therewith shall be deemed to constitute representations and warranties made by
the Company.

     SECTION 6.03  Brokerage.  Each party hereto will indemnify and hold
                   ---------
harmless the other against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.

     SECTION 6.04  Parties in Interest.  All representations, covenants and
                   -------------------
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not.  Without limiting the
generality of the foregoing, all covenants and agreements benefiting the
Purchaser shall inure to the benefit of any and all subsequent holders from time
to time of Series A Preferred Shares or Conversion Shares.

     SECTION 6.05  Notices.  All notices, requests, consents and other
                   -------
communications hereunder shall be in writing and shall be delivered in person,
mailed by certified or registered mail, return receipt requested, or sent by
telecopier or telex, addressed as follows:

               (a) if to the Company, at 34 Market Place, Baltimore, Maryland
21202, Attention: Robert Zentz; and

               (b) if to the Purchaser, at 1000 Lancaster Street, Baltimore, MD
21202, Attention: B. Lee McGee;

                                      -7-
<PAGE>

or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.

     SECTION 6.06  Governing Law.  This Agreement shall be governed by and
                   -------------
construed in accordance with the laws of the State of Maryland.

     SECTION 6.07  Entire Agreement.  This Agreement, including the Exhibits
                   ----------------
hereto, constitutes the sole and entire agreement of the parties with respect to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.  All Exhibits hereto are hereby incorporated
herein by reference.

     SECTION 6.08  Counterparts.  This Agreement may be executed in two or more
                   ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     SECTION 6.9   Amendments.  This Agreement may not be amended or modified,
                   ----------
and no provisions hereof may be waived, unless such amendment, modification or
waiver is in writing and signed by the Company and the holders of at least two-
thirds of the Series A Preferred Shares then outstanding.

     SECTION 6.10  Severability.  If any provision of this Agreement shall be
                   ------------
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement shall not be
affected thereby.

     SECTION 6.11  Titles and Subtitles.  The titles and subtitles used in this
                   --------------------
Agreement are for convenience only and are not to be considered in construing or
interpreting any term or provision of this Agreement.

     SECTION 6.12  Certain Defined Terms.  As used in this Agreement, the
                   ---------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          (a) "person" shall mean an individual, corporation, limited liability
company, trust, partnership, joint venture, unincorporated organization,
government agency or any agency or political subdivision thereof, or other
entity.

          (b) "subsidiary" shall mean, as to the Company, any corporation of
which more than 50% of the outstanding stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency), is at the time directly or indirectly owned by the Company
and/or by one or more of its subsidiaries.

                 [remainder of page intentionally left blank]

                                      -8-
<PAGE>

     IN WITNESS WHEREOF, the Company and the Purchaser have executed this Series
A Convertible Preferred Stock Purchase Agreement as of the day and year first
above written.

Attest:                            eSYLVAN, INC.

                                   By: /s/ David A. Graves
_____________________________          _________________________________(SEAL)
Secretary                              David A. Graves, President

Attest:                            PURCHASER:

                                   SYLVAN VENTURES, LLC

                                   By: /s/ R. Christopher Hoehn-Saric
_____________________________          _________________________________(SEAL)
Secretary                              R. Christopher Hoehn-Saric, President

                                      -9-
<PAGE>

                                   EXHIBIT A
                                   ---------

                               CHARTER DOCUMENT

     At least 10,526,316 shares of the capital stock of the Company shall be
designated Series A Preferred Stock, with a par value of $0.001 per share
("Series A Preferred").

     Holders of Series A Preferred shall be entitled to five votes for each
share of common stock into which the Series A Preferred held of record by such
holder may be converted on all matters submitted to a vote of stockholders.
Holders of Series A Preferred, voting as a separate class, are entitled to elect
one (1) director to the board of directors of the Company (the "Board").
Holders of Series A Preferred shall be entitled to receive ratably such
dividends as may be declared from time to time by the Board on Common Stock (on
an as-converted basis) and/or on Series A Preferred out of funds legally
available therefor.  In the event of a dissolution, liquidation or winding-up,
holders of Series A Preferred shall be entitled to share ratably (on an as-
converted basis) with holders of Common Stock in all assets remaining after
payment of liabilities, and subject to the rights of any holders of other
classes or series of stock that are then outstanding. Series A Preferred shall
have no preemptive or other subscription rights and no sinking fund provisions
shall be applicable to Series A Preferred.

     Any holder of Series A Preferred shall be entitled to convert to Common
Stock all or any of the shares of Series A Preferred held by such holder at any
time.  All outstanding shares of Series A Preferred shall automatically convert
to Common Stock upon the closing of a firm commitment underwritten public
offering of shares of the capital stock of the Company in which:

 .  the aggregate price paid for the shares by the public is $10,000,000 or more,
   and

 .  the price paid by the public for the shares reflects a preoffering valuation
   of $40,000,000 or more.

     The total number of shares of Common Stock into which the Series A
Preferred shall be convertible shall be equal to the number of shares of Series
A Preferred being converted multiplied by a conversion ratio, which ratio shall
be determined by dividing $1.90 by the conversion price in effect at the time of
such conversion. The initial conversion price shall be $1.90. The conversion
price shall be subject to adjustment as follows:

          If at any time prior to a firm commitment underwritten public offering
     of shares of capital stock of the Company satisfying the criteria set forth
     above, additional shares of Common Stock of the Company, or other
     securities or rights convertible into or exercisable for Common Stock,
     shall be issued at a purchase price per share that is or is subsequently
     adjusted to be  less than the then-applicable conversion price (other than
     the issuance of (i) Class A Common stock, (ii) Common Stock options under
     the Company's omnibus stock plan, or (iii) Common Stock to former
     stockholders of Ivy West Educational Services, Inc. in connection with the
     acquisition of its assets), the conversion price shall be reduced on a
     weighted average basis to diminish the dilutive effect of such issuance on
     the Series A Preferred.  Similarly, the conversion price shall be adjusted
     to

                                     -10-
<PAGE>

     prevent dilution upon the occurrence of stock splits, stock dividends,
     combinations, reclassifications, and other similar transactions.

                                     -11-

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