Document:

EXHIBIT 10.7

 Exhibit 10.7 
  
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of the 30th
day of June, 2003 (the “Effective Date”), by and between Educate Operating Company, LLC, a Delaware limited liability company (the “Company”), CHRIS HOEHN-SARIC (the “Executive”) and, solely with respect to Sections
1.1, 1.2, 3.4(e) and 3.5, Educate, Inc., a Delaware corporation (“Holdings”). 
  
 WHEREAS, the Company, Holdings, Sylvan Learning Systems, Inc., a Maryland corporation (“Sylvan”), and Sylvan Ventures, L.L.C., a Delaware limited
liability company (“Ventures”), entered into an Asset Purchase Agreement, dated as of March 10, 2003 (the “APA”), whereby the Company will purchase the Targeted Businesses (as defined in the APA) of Sylvan and Ventures (the
“Transaction”); 
  
 WHEREAS, the Executive, currently the Chairman
and Chief Executive Officer of Sylvan Ventures, Inc., a Delaware corporation (“Sylvan Ventures”), desires to provide the Company and certain of its subsidiaries with his services, and the Company desires to employ Executive on the terms
and subject to the conditions set forth herein. 
  
 NOW, THEREFORE, in
consideration of the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows: 
  
 1.    Employment of Executive; Duties and Status. 
  
 1.1    Title. During the “Employment Period” (as defined in Section 2 hereof), the
Executive shall serve as a member of the Board of Directors of the Company (the “Board”) and as a member of the Board of Directors of Holdings (the “Holdings Board”). Initially, the Executive shall serve as Chairman of the Board
and as Chairman of the Holdings Board. In addition the Executive shall serve as the Chief Executive Officer of the Company and as the Chief Executive Officer of Holdings. The Executive shall have the normal duties, responsibilities and authority
commensurate with such positions. During the Employment Period, in his capacity as Chief Executive Officer of the Company, the Executive shall report directly to the Board. During the Employment Period, in his capacity as Chief Executive Officer of
Holdings, the Executive shall report directly to the Holdings Board. 
  
 1.2    Duties. 
  
 (a)    During the Employment Period, the Executive shall do and perform all services and acts necessary or advisable to fulfill the duties and responsibilities of his positions and shall render such services
on the terms set forth herein. In addition, the Executive shall have such other executive and managerial powers and duties as may reasonably be assigned to him by the Board or the Holdings Board, commensurate with his serving as Chief Executive
Officer. Except for sick leave, reasonable vacations, and excused leaves of absence or as provided in Section 1.2(b), the Executive shall, throughout the Employment Period, devote substantially all his working time, attention, knowledge and
skills faithfully and to the best of his ability, to the duties and responsibilities of his positions in furtherance of the business affairs and 

 
activities of Holdings, the Company, and its subsidiaries and affiliates. The Executive shall at all times be subject to, observe and carry out such rules,
regulations, policies, directions, and restrictions as the Board or the Holdings Board, as applicable, may from time to time reasonably establish for senior executive officers of Holdings or the Company. 
  
 (b)    The Company acknowledges that the Executive
shall continue to serve on the board of directors of Sylvan and has certain preexisting commitment(s) to serve on the boards of directors and/or as an officer of the entities specified on Schedule 1.2(b) hereof (the “Pre-authorized
Entities”), and the Executive shall be permitted to devote a reasonable amount of time, subject to Sections 4.1 and 4.2 hereof, to serve as an officer and/or director (as the case may be) of the Pre-authorized Entities, to serve
as an officer and/or director or otherwise provide services to non-profit and community activities, and to serve on such other boards of directors or in such other offices as may be approved in writing from time to time by the Board; provided,
however, that such approval shall not be unreasonably withheld. In addition, the Executive shall be permitted, subject to Sections 4.1 and 4.2 hereof, to devote a reasonable amount of time to (i) the management of his personal
investments, finances, and business and legal affairs and (ii) delivering lectures, fulfilling speaking engagements and teaching at educational institutions. The Executive agrees that (i) in all events, the Executive’s activities otherwise
permitted under this Section 1.2(b) shall not interfere with the performance by the Executive of his duties to the Company or Holdings under this Agreement, and (ii) if requested by the Board, the Executive shall provide the Board with a
description of the activities of the Executive permitted under this Section 1.2(b). 
  
 2.    Term of Employment. 
  
 2.1    Employment Period. Subject to the consummation of the Transaction, the Executive’s employment
hereunder shall continue until the later to occur of (i) the third anniversary of the Effective Date, or (ii) the applicable anniversary date of any extension of this Agreement as provided in Section 2.2 hereof, unless terminated earlier in
accordance with the provisions of this Agreement (the “Employment Period”). 
  
 2.2    Extension. On the third anniversary of the Effective Date and on each subsequent anniversary date of
the Effective Date thereafter, the Employment Period shall be extended for an additional one-year period unless the Company or the Executive notifies the other in writing at least 90 days prior to such anniversary date of its or his election, in its
or his sole discretion, not to extend the Employment Period. 
  
 3.    Compensation and General Benefits. 
  
 3.1    Base Salary. 
  
 (a)    During the Employment Period, the Company agrees to pay to the Executive an annual base salary of Four Hundred Thousand
Dollars ($400,000) (such base salary, as adjusted from time to time pursuant to Section 3.1(b), is referred to herein as the “Base Salary”). The Executive’s Base Salary, less amounts required to be withheld under
applicable law, shall be payable in equal installments in accordance with the practice of the Company in 

  

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effect from time to time for the payment of salaries to officers of the Company, but in no event less frequently than monthly. 
  
 (b)    The Executive’s Base Salary shall be
reviewed annually for increases by the Board or by the Compensation Committee established by the Board. 
  
 3.2    Bonus. Commencing in calendar year 2003 and through the Employment Period, Executive shall be eligible to
receive from the Company an annual performance bonus (the “Annual Bonus”). Executive’s target Annual Bonus shall be 100% of Executive’s Base Salary; provided, that the amount, if any, of the actual Annual Bonus paid to Executive
shall be based upon the Company’s attainment of the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) goals set forth set forth on Schedule 3.2 hereof. Any Annual Bonus earned shall be
payable in full within forty-five days following the determination of the amount thereof and in accordance with the Company’s normal payroll practices and procedures. Except as otherwise provided herein, any Annual Bonus payable under this
Section 3.2 shall be deemed not to accrue until the last day of the period with respect to which such Annual Bonus would otherwise be scheduled to be paid. The amount of the 2003 Annual Bonus payable to Executive shall be prorated for the
portion of 2003 in which Executive is employed by the Company. 
  
 3.3    Expenses. During the Employment Period, in addition to any amounts to which the Executive may be entitled pursuant to the other provisions of this Section 3.3 or elsewhere herein, the
Executive shall be entitled to cause payment by, or to receive prompt reimbursement from, the Company for all reasonable and necessary expenses incurred by him in performing his duties hereunder on behalf of the Company, subject to, and consistent
with, the Company’s policies for expense payment and reimbursement, in effect from time to time. Expenses for reimbursement include, but are not limited to, (i) reasonable expenses related to the activities of, and arising from, the
Company’s or the Executive’s participation in, or as a member or officer of, trade associations or other similar organizations reasonably associated with the Company’s business; (ii) reasonable expenses incurred in connection with
business related entertaining and other ordinary, non capital expenses incurred by the Executive in carrying on the Company’s business at his home such as non capital equipment, supplies, computer connections, etc.; (iii) reasonable business
travel expenses, including first class airfare and lodging, incurred by the Executive for business travel for the Company; and (iv) reasonable automobile and car phone payments, reimbursements, or allowances incurred by the Executive for the
Company. 
  
 3.4    Fringe
Benefits. 
  
 (a)    Company Plans. During the Employment Period, in addition to any amounts to which the Executive may be entitled pursuant to the other provisions of this Section 3 or elsewhere herein, the
Executive shall be entitled to participate in, and to receive benefits under, any long-term incentive plan, deferred compensation plan, qualified retirement plan, profit-sharing plan, savings plan, equity option plan, group life, disability,
sickness, accident and health insurance programs, or any other benefit plan or arrangement made available by the Company to its executives and key management employees generally, subject to and on a basis consistent with the terms, conditions and
overall administration of each such plan or 
  

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arrangement. The award of any additional incentive under this Section 3.4(a) shall be separate and distinct from the right of the Executive to receive the bonus
payment from the Company described in Section 3.2. 
  
 (b)    Insurance. 
  
 (i)     Provided that the Executive is insurable at standard rates during the Employment Period, the Company shall provide, at its cost, life insurance for the Executive in the face amount of Two Million Five Hundred
Thousand Dollars ($2,500,000), with proceeds payable at the direction of the Executive, unless Executive waives such coverage. 
  
 (ii)    During the Employment Period, the Company shall provide directors’ and officers’ liability insurance covering
the Executive, and errors and omissions insurance covering the activities of the Executive, in the exercise of his duties in the interest of the Company on terms and in coverages provided by the Company to its executives generally. 
  
 (iii)    Provided that the Executive is reasonably
insurable during the Employment Period, the Company shall provide to the Executive disability insurance at levels provided by the Company to its executives generally. 
  
 (c)    Vacation. The Executive shall be entitled to four (4) weeks’ paid
vacation during each full year (pro-rated for each partial year) of the Employment Period. In addition, the Executive shall be entitled to all paid holidays given by the Company to its senior executive officers. The extent to which the Executive may
accumulate vacation days not taken in any year or receive payment for unused vacation days at the end of the Employment Period shall be determined in accordance with the Company’s policies for its senior executive officers. 
  
 (d)    Legal and Professional Fees.
The Company will pay or reimburse the Executive for the reasonable legal and accounting fees and expenses he incurs in the preparation and negotiation of this Agreement and the Executive’s option grant as set forth in Section 3.5, not to
exceed $ 45,000 in the aggregate, upon presentment by the Executive of a written statement of such fees and expenses. In addition, the Company will pay or reimburse the Executive up to $5,000 each year during the Employment Period for the reasonable
accounting fees and expenses the Executive incurs for advice and preparation of his federal, state and local income tax returns, upon presentment by the Executive of a written statement of such fees and expenses. 
  
 (e)    Indemnification. Holdings
shall indemnify the Executive pursuant to that certain Indemnification Agreement, dated as of the Effective Date, by and between Holdings and the Executive attached hereto as Exhibit A. 
  
 3.5     Stock Options. Subject
of approval by the Holdings Board, Executive shall be granted an option (the “Option”) to purchase a total of 1,725,000 shares of common stock of Holdings pursuant to the Educate, Inc. 2003 Omnibus Stock Incentive Plan (the
“Plan”), with a per share exercise price equal to $2.97. The Option shall vest as to 1/36 of the shares subject to the Option at the end of each full month following the date of grant. In the event of a 

  

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“Change of Control” of the Company, the Option shall vest in full and become and remain immediately exercisable at such time as will permit him to exercise
the Option in connection with the Change of Control and, if not therein exercised, shall remain outstanding and exercisable for the longer of two (2) years (six (6) months in the event the Change of Control occurs at any time following any
underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, (“IPO”)) or the duration provided in the Plan, but in no event shall
such Option be exercisable following the expiration date. Except as otherwise provided, the Option shall be subject to the terms and conditions of the Plan and the form of option agreement approved by the Board. The Executive may immediately or in
the future transfer or direct the Company to provide directly, the Executive’s vested and unvested Option to Sterling Partners I, L.P. (the “Options Transferee”). In the event the Executive elects to transfer or direct the Company to
provide directly, the Executive’s vested and unvested Option to the Options Transferee, the Executive agrees that the Company shall be under no obligation to any additional registration obligations with respect to the shares issuable upon
exercise of the Option by the Options Transferee. The parties agree that the compensation described in this Section 3.5 may actually be provided through options or restricted stock as the parties may mutually agree and that all references
throughout this Agreement to “options” will be deemed to refer to the eventual compensation arrangement under this section, and that any references to share numbers or exercise prices with respect to options shall not apply to the
restricted stock unless specifically agreed to by both parties.  
  
 3.6    Reserved. 
  
 3.7    Parachute Treatment. 
  
 (a)    Anything in this Agreement to the contrary notwithstanding, if it shall be determined that
any payment, vesting, distribution, or transfer by the Company or any successor, or any Affiliate of the foregoing or by any other person or that any other event occurring with respect to the Executive and the Company for the Executive’s
benefit, whether paid or payable or distributed or distributable under the terms of this Agreement or otherwise (including under any employee benefit plan) (a “Payment”) would be subject to or result in the imposition of the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (and any regulations issued thereunder, any successor provision, and any similar provision of state or local income tax law) (collectively, the “Excise Tax”), then
the amount of the Payment shall be reduced to the highest amount that may be paid by the Company or other entity without subjecting such Payment to the Excise Tax (the “Payment Reduction”). The Executive shall have the right, in his sole
discretion, to designate those payments or benefits that shall be reduced or eliminated under the Payment Reduction to avoid the imposition of the Excise Tax. Notwithstanding the foregoing, the Payment Reduction shall not apply if the Executive
would, on a net after-tax basis, receive less compensation than if the Payment were not so reduced. 
  
 (b)    Subject to the provisions of Section 3.7(c), all determinations required to be made under this Section
3.7, including whether and when a Payment is subject to Section 4999 and the assumptions to be utilized in arriving at such determination and in determining an appropriate Payment Reduction, shall be made by Ernst and Young, or any other 

  

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nationally recognized accounting firm that shall be the Company’s outside auditors at the time of such determination (the “Accounting Firm”), which
Accounting Firm shall provide detailed supporting calculations to the Executive and the Company within fifteen (15) business days of the receipt of notice from the Company or the Executive that there will be a Payment that the person giving notice
believes may be subject to the Excise Tax. All fees and expenses of the Accounting Firm shall be borne by the Company. If the Accounting Firm shall determine that no Excise Tax is payable by the Executive, it shall furnish to the Executive written
advice that failure to report the Excise Tax on his applicable federal income tax return would not be reasonably likely to result in the imposition of a penalty for fraud, negligence, or disregard of rules or regulations. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive in determining whether a Payment Reduction is required and the amount thereof (subject to Sections 3.7(c) and (d)), in the absence of material mathematical or legal
error. 
  
 (c)    As a result of
uncertainty in the application of Section 4999 that may exist at the time of the initial determination by the Accounting Firm, it may be possible that in making the calculations required to be made hereunder, the Accounting Firm shall determine that
a Payment Reduction need not be made that properly should be made (an “Overpayment”) or that a Payment Reduction not properly needed to be made should be made (an “Underpayment”). If, within seventy-five (75) days after the
Accounting Firm’s initial determination under the preceding clause (b), the Accounting Firm shall determine that an Overpayment was made, any such Overpayment shall be treated for all purposes, to the extent practicable, as a loan to the
Executive with interest at the applicable Federal rate provided for in Section 1274(d) of the Code; provided, however, that the amount to be repaid by the Executive to the Company shall be reduced to the extent that any portion of the Overpayment to
be repaid will not be offset by a corresponding reduction in tax by reason of such repayment of the Overpayment. If the Accounting Firm shall determine that an Underpayment was made, any such Underpayment shall be due and payable by the Company to
the Executive within thirty-five (35) days after the Company receives notice of the Accounting Firm’s determination. 
  
 (d)    The Executive shall give written notice to the Company of any claim by the IRS that, if successful, would require the
payment by the Executive of an Excise Tax, such notice to be provided within fifteen (15) days after the Executive shall have received written notice of such claim. The Executive shall cooperate with the Company in determining whether to contest or
pay such claim and shall not pay such claim without the written consent of the Company, which shall not be unreasonably withheld, conditioned or delayed. 
  
 (e)    This Section 3.7 shall remain in full force and effect following the termination of the Executive’s
employment for any reason until the expiration of the statute of limitations on the assessment of taxes applicable to the Executive for all periods in which the Executive may incur a liability for taxes (including Excise Taxes), interest or
penalties arising out of the operation of this Agreement.  
  
 4.    Confidentiality and Non-Competition. 
  
 4.1    Confidentiality; Intellectual Property. 
  

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 (a)    The Executive recognizes that the Company’s business interests
require a confidential relationship between the Company and the Executive and the fullest practical protection and confidential treatment of all “Trade Secrets or Confidential or Proprietary Information” (as defined in Section 4.3
hereof). Accordingly, the Executive agrees that, except as required by law or court order, the Executive will keep confidential and will not disclose to anyone (other than the Company or any Persons designated by the Company), or publish, utter,
exploit, make use of (or aid others in publishing, uttering, exploiting or using), or otherwise “Misappropriate” (as defined in Section 4.3 hereof) any Trade Secrets or Confidential or Proprietary Information at any time. The
Executive’s obligations hereunder shall continue during the Employment Period and thereafter for so long as such Trade Secrets or Confidential or Proprietary Information remain Trade Secrets or Confidential or Proprietary Information.

  
 (b)    The Executive acknowledges
and agrees that: 
  
 (i)     all Trade
Secrets or Confidential or Proprietary Information shall be “Trade Secrets” (as defined under the Maryland Uniform Trade Secrets Act) of the Company; 
  

(ii)    the Executive occupies a unique position within the Company, and he is and will be intimately involved in the
development and/or implementation of Trade Secrets or Confidential or Proprietary Information; 
  
 (iii)    in the event the Executive breaches Section 4.1 hereof with respect to any Trade Secrets or Confidential or
Proprietary Information, such breach shall be deemed to be a Misappropriation of such Trade Secrets or Confidential or Proprietary Information; and 
  
 (iv)    any Misappropriation of Trade Secrets or Confidential or Proprietary Information will result in immediate and
irreparable harm to the Company. 
  
 (c)    The Executive acknowledges and agrees that all ideas, inventions and business plans developed by him during the Employment Period, including, without limitation, any process, operations, product or improvement
which may be patentable or copyrightable, are and will be the property of the Company, and that he will do, at the Company’s request and cost, whatever is reasonably necessary to secure the rights thereto by patent, copyright or otherwise to
the Company. 
  
 (d)    Upon
termination or expiration of the Employment Period and at any other time upon request, the Executive further agrees to surrender to the Company all documents, writings, notes, business, marketing or strategic plans, financial information, customer,
distributor and supplier lists, manuals, illustrations, models, and other such materials (collectively, “Company Documents”) produced by the Executive or coming into his possession by or through employment with the Company during the
Employment Period, within the scope of such employment, and agrees that all Company Documents are at all times the Company’s property, provided that the Executive may maintain a copy of any Company Documents that are not Trade Secrets or
Confidential or Proprietary Information. 
  

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 (e)    During the Employment Period, the Executive represents and agrees that
he will not use or disclose any confidential or proprietary information or trade secrets of others, including but not limited to former employers, and that he will not bring onto the premises of the Company such confidential or proprietary
information or trade secrets of such others, unless consented to in writing by said others, and then only with the prior written authorization of the Company; provided, however, that this prohibition does not apply to information or
secrets pertaining to matters covered by Section 1.2(b). 
  
 4.2    Noncompetition and Nonsolicitation. 
  
 (a)    Subject to Section 4.2(b) hereof, during the Employment Period and until the end of the Restricted Period, the
Executive agrees that the Executive will not, directly or indirectly, on the Executive’s own behalf or as a partner, owner, officer, director, stockholder, member, employee, agent or consultant of any other Person (including, without limitation
any “Sterling Affiliate,” as defined herein), within the United States of America or in any other country or territory in which the businesses of the Company are conducted: 
  
 (i)     own, manage, operate, control, be employed by, provide services as a consultant, to or
participate in the ownership, management, operation, or control of, any enterprise that engages in, owns or operates businesses that provide facility-based or online tutoring services or tutoring services provided under contract with a Governmental
Entity (as defined in the APA) in the United States, in each case, for grades K-12 and younger students (other than any business conducted pursuant to the Master License Agreement (as defined in the APA)) and any enterprise that owns or operates
government funded “charter schools” as such term is defined under applicable law in effect on March 10, 2003. 
  
 (ii)    solicit, hire, or otherwise attempt to establish for any Person, any employment, agency, consulting or other business
relationship with any Person who is or was an employee of the Company or any of its Affiliates, provided that (w) the prohibition in this Section 4.2(a)(ii) shall not bar the Executive from soliciting or hiring any former employee who at the
time of such solicitation or hire had not been employed by the Company or any of its Affiliates for a period of at least one year, (x) following the Executive’s termination of employment, the Executive may hire but not solicit any Person
covered in this clause (ii) if such hiring occurs after a Change of Control of the Company with respect to Persons employed at that entity, (y) the prohibition in this Section 4.2(a)(ii) does not bar the Executive from soliciting or hiring
the Executive’s personal assistant following the Executive’s termination of employment, and (z) the prohibition does not apply to individuals below the level of vice president at the Company unless the Executive knowingly solicits the
individual to leave the Company’s employ. 
  
 (iii)    The parties hereto acknowledge and agree that, notwithstanding anything in Section 4.2(a)(i) hereof, (x) the Executive may own or hold, solely as passive investments, securities of Persons engaged in any
business that would otherwise be included in Section 4.2(a)(i) as long as with respect to each such investment, the securities held by the Executive do not exceed five percent (5%) of the outstanding securities of such Person and, such
securities are publicly traded and registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the parties agree that the Executive shall not be deemed to violate Section 4.2(a)(i) hereof
solely by virtue of the 

  

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ownership by the Sterling Affiliates or investment vehicles that are not Affiliates of the Executive or his immediate family of more than 5%, provided that the
Executive’s indirect equity interest in the ultimate investment is less than 5% of the outstanding securities of that Person that would otherwise be included in Section 4.2(i); and (y) the Executive may serve on the board of directors
(or other comparable position) or as an officer of any entity at the request of the Board; provided, however, that in the case of investments otherwise permitted under clause (x) above, the Executive shall not be permitted to, directly
or indirectly, participate in, or attempt to influence, the management, direction or policies of (other than through the exercise of any voting rights held by the Executive in connection with such securities), or lend his name to, any such
Person. 
  
 (b)    Section
4.2(a) shall not apply following termination of the Employment Period in the event Employment Period is not extended pursuant to Section 2.2(b) hereof.  
  
 4.3    Definitions. For purposes of this Agreement, the following terms shall have
the following meanings: 
  
 (a)    An
“Affiliate” of any Person shall mean any other Person, whether now or hereafter existing, directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For purposes hereof,
“control” or any other form thereof, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise.  
  
 (b)    “Misappropriation”, or any form thereof, means: 
  
 (i)    the acquisition of any Trade Secret or Confidential or Proprietary Information by a Person who knows or has reason to
know that the Trade Secret or Confidential or Proprietary Information was acquired by theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means (each, an
“Improper Means”); or 
  
 (ii)    the disclosure or use of any Trade Secret or Confidential or Proprietary Information without the express consent of the Company by a Person who (x) used Improper Means to acquire knowledge of the Trade Secret or
Confidential or Proprietary Information; or (y) at the time of disclosure or use, knew or had reason to know that his or her knowledge of the Trade Secret or Confidential or Proprietary Information was (i) derived from or through a Person who had
utilized Improper Means to acquire it, (ii) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use, or (iii) derived from or through a Person who owed a duty to the Company to maintain its secrecy or limit its
use; or (z) before a material change of his or her position, knew or had reason to know that it was a Trade Secret or Confidential or Proprietary Information and that knowledge of it had been acquired by accident or mistake. 
  
 (c)    “Person” means any individual,
corporation, partnership, limited liability company, joint venture, association, business trust, joint-stock company, estate, 

  

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trust, unincorporated organization, or government or other agency or political subdivision thereof, or any other legal or commercial entity. 
  
 (d)    “Restricted Period” shall mean
for terminations or resignations under Sections 5.4, 5.5, and 5.6 the later of the first anniversary of the date of termination or the third anniversary of the Effective Date; provided, however, that the Restricted Period following
termination or resignation under Sections 5.5 and 5.6 following a Change of Control shall be the first anniversary of the date of termination. 
  
 (e)    “Sterling Affiliate” means Sterling Capital, Ltd., an Illinois limited partnership, Sterling Venture Partners,
LP, an Illinois limited partnership, Sterling Advisors, and any and all Affiliates of any of the foregoing. 
  
 (f)    “Trade Secrets or Confidential or Proprietary Information” shall mean: 
  
 (i)    any and all information, formulae,
patterns, compilations, programs, devices, methods, techniques, processes, know how, plans (marketing, business, strategic or otherwise), arrangements, pricing and other data (collectively, “Information”) that (a) derives independent
economic value, actual or potential, from not being generally known to the public or to other Persons who can obtain economic value from its disclosure or use, and (b) is the subject of efforts by the Company that are reasonable under the
circumstances to maintain its secrecy; or 
  
 (ii)    any and all other Information (i) unique to the Company which has a significant business purpose and is not known or generally available from sources outside of such Persons or typical of industry practice, or
(ii) the disclosure of which would have a material adverse effect on the business of the Company. 
  
 4.4    Remedies. The Executive acknowledges and agrees that if the Executive breaches any of the provisions of
Section 4 hereof, the Company may suffer immediate and irreparable harm for which monetary damages alone will not be a sufficient remedy, and that, in addition to all other remedies that the Company may have, the Company shall be entitled to
seek injunctive relief, specific performance or any other form of equitable relief to remedy a breach or threatened breach of this Agreement (including, without limitation, any actual or threatened Misappropriation) by the Executive and to enforce
the provisions of this Agreement. The Executive and the Company each agrees (i) to submit to the jurisdiction of any competent court where the Company or Executive may choose to seek equitable relief, (ii) to waive any and all defenses each may have
on the grounds of lack of jurisdiction of such court; and (iii) that neither party shall be required to post any bond, undertaking, or other financial deposit or guarantee in seeking or obtaining such equitable relief. The existence of this right
shall not preclude or otherwise limit the applicability or exercise of any other rights and remedies which the Company and/or the Executive may have at law or in equity. 
  
 4.5    Interpretation; Severability. 
  
 (a)    The Executive has carefully considered the
possible effects on the Executive of the covenants not to compete, the confidentiality provisions, and the other 

  

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obligations contained in this Agreement, and the Executive recognizes that the Company has made every effort to limit the restrictions placed upon the Executive to
those that are reasonable and necessary to protect the Company’s legitimate business interests. 
  
 (b)    The Executive acknowledges and agrees that the restrictive covenants set forth in this Agreement are reasonable and
necessary in order to protect the Company’s valid business interests. It is the intention of the parties hereto that the covenants, provisions and agreements contained herein shall be enforceable to the fullest extent allowed by law. If any
covenant, provision, or agreement contained herein is found by a court having jurisdiction to be unreasonable in duration, scope or character of restrictions, or otherwise to be unenforceable, such covenant, provision or agreement shall not be
rendered unenforceable thereby, but rather the duration, scope or character of restrictions of such covenant, provision or agreement shall be deemed reduced or modified with retroactive effect to render such covenant, provision or agreement
reasonable or otherwise enforceable (as the case may be), and such covenant, provision or agreement shall be enforced as modified. If the court having jurisdiction will not review the covenant, provision or agreement, the parties hereto shall
mutually agree to a revision having an effect as close as permitted by applicable law to the provision declared unenforceable. The parties hereto agree that if a court having jurisdiction determines, despite the express intent of the parties hereto,
that any portion of the covenants, provisions or agreements contained herein are not enforceable, the remaining covenants, provisions and agreements herein shall be valid and enforceable. Moreover, to the extent that any provision is declared
unenforceable, the Company shall have any and all rights under applicable statutes or common law to enforce its rights with respect to any and all Trade Secrets or Confidential or Proprietary Information or unfair competition by the Executive.

  
 5.    Termination. 
  
 5.1    General. The employment
of the Executive hereunder (and the Employment Period) shall terminate as provided in Section 2, unless earlier terminated in accordance with the provisions of this Section 5. 
  
 5.2    Termination Upon Mutual
Agreement. The Company and the Executive may, by mutual written agreement, terminate this Agreement and/or the employment of the Executive (and the Employment Period) at any time. 
  
 5.3    Death or Disability of the Executive. 
  
 (a) The employment of the Executive hereunder (and the Employment
Period) shall terminate upon (i) the death of the Executive, and (ii) at the option of the Company, upon not less than fifteen (15) days’ prior written notice to the Executive or his personal representative or guardian, if the Executive suffers
a “Total Disability” (as defined in Section 5.3(b) below). Upon termination for death or Total Disability, the Company shall pay to the Executive, guardian or personal representative, as the case may be, in addition to any insurance
or disability benefits to which he may be entitled hereunder, all amounts of accrued but unpaid Base Salary and benefits through the date of such termination, including a bonus pursuant to Section 3.2(a) hereof that Executive would have been
entitled to had he worked the full year during which death or Total Disability occurred. The bonus shall be payable in full within forty- 

  

 -11- 

 
five days following the determination of the amount thereof and in accordance with the Company’s normal payroll practices and procedures.  
  
 (b)     For purposes of this Agreement,
“Total Disability” shall mean (i) if the Executive is subject to a legal decree of incompetency (the date of such decree being deemed the date on which such disability occurred), (ii) the written determination by a physician selected by
the Company that, because of a medically determinable disease, injury or other physical or mental disability, the Executive is unable substantially to perform, with or without reasonable accommodation, each of the material duties of the Executive
required hereby, and that such disability has lasted for the immediately preceding ninety (90) days or one hundred twenty days (120) days during the immediately preceding year and is, as of the date of determination, reasonably expected to last an
additional six (6) months or longer after the date of determination, in each case based upon medically available reliable information, or (iii) Executive’s qualifying for benefits under the Company’s long-term disability coverage, if any.

  
 (c)     The date of any legal
decree of incompetency or written opinion which is conclusive as to the Total Disability of the Executive shall be deemed the date on which such Total Disability occurred. Any leave on account of illness or temporary disability which is short of
Total Disability shall not constitute a breach of this Agreement by the Executive, and in no event shall any party be entitled to terminate this Agreement for Cause due to any such leave. All physicians selected hereunder shall be board certified in
the specialty most closely related to the nature of the disability alleged to exist. In conjunction with determining mental and/or physical disability for purposes of this Agreement, the Executive consents to any such examinations which are relevant
to a determination of whether he is mentally and/or physically disabled, and which is required by the aforesaid Company physician, and to furnish such medical information as may be reasonably requested, and to waive any applicable physician patient
privilege that may arise because of such examination. 
  
 5.4     Termination For Cause. 
  
 (a)     The Company may, upon action of the Board, terminate the employment of the Executive (and the Employment Period) at any
time for “Cause” (as defined below). 
  
 (b)     For purposes of this Agreement, “Cause” means: 
  
 (i)     a material failure by the Executive to comply with any material obligation imposed by this Agreement (including,
without limitation, any violation of Sections 4.1 or 4.2 hereof); 
  
 (ii)    gross negligence or willful malfeasance by the Executive in connection with the performance of his material duties under this Agreement that could, in the good faith judgment of the Board, (x) have a
material adverse impact on the Company, or (y) result in the incarceration of any officer, director or employee of the Company;; 
  
 (iii)    the Executive’s being convicted of, or pleading guilty or nolo contendere to, or subject to Section 5.4(c) below,
being indicted for, any felony; 
  

 -12- 

 (iv) theft, embezzlement, or fraud by the Executive in connection with the performance of his
duties hereunder; 
  
 (v) the abuse by the Executive of
drugs or alcohol, or conduct by the Executive involving moral turpitude, that could, in the good faith judgment of the Company Board, have a material adverse impact on the Company; 
  
 (vi) subject to Section 5.4(c) below, the Executive’s removal from office or termination of employment by
requirement of any governmental authority having jurisdiction over the Company; 
  
 (vii) the Executive’s engaging in any activity that gives rise to a material conflict of interest with the Company that shall not be cured
following ten (10) days’ written notice and a demand to cure such conflict; or 
  
 (viii) subject to Section 5.4(c) below, the misappropriation by the Executive of any material business opportunity of the Company, provided,
however, that solely for purposes of this Section 5.4(b)(viii) (x) the Executive shall not be deemed to have misappropriated a material business opportunity of the Company by virtue of any action taken by a Sterling Affiliate unless the
Executive knows of such action before the date it occurs (or, if earlier, before the date of a binding commitment to complete such action) and the Executive fails to disclose such action to the Company, and (y) the Executive shall not be deemed to
have misappropriated a material business opportunity of the Company by virtue of any action taken by an investment vehicle (that is not an Affiliate of the Executive or his immediate family) in which the Executive owns an interest, unless the
Executive knows of such action before the date it occurs (or, if earlier, before the date of a binding commitment to complete such action), the disclosure of such action would not violate any confidentiality or non-disclosure agreement or provision
to which the Executive is subject, and the Executive fails to disclose such action to the Company. 
  
 (c) With respect to the Executive’s being indicted for a crime under Section 5.4(b)(iii), his removal under Section 5.4(b)(vi),
or his being accused of misappropriation under Section 5.4(b)(viii), in addition to satisfying the requirements of Section 5.4(d), and subject to Section 5.7(d), the Company must treat the Executive under Section 5.7(a) or
(b), as applicable, as though he has been terminated without Cause unless and until, a Final Determination is made, and shall hold the payments pursuant to Section 5.7(a)(i) and (ii) or 5.7(b)(i) and (ii) in escrow
until such time as a Final Determination is made. In addition, the Company must treat any non-vested options held by the Executive and any Options Transferee (to the extent originating with this Agreement) in accordance with Section 5.7(c),
and shall hold any non-vested options in escrow until such time as a Final Determination is made. During the time the non-vested options are held in escrow, the Executive may not exercise such option. If the Final Determination is that the Company
had Cause for termination under the referenced sections, the Executive shall forfeit and hereby agrees to forfeit his right to any of the amounts or non-vested options held in escrow other than such amounts owed to Executive under Section
5.8, if any. If the Final Determination is that the Company did not have Cause for termination under the referenced sections, the Company shall release to the Executive the amounts plus commercially reasonable interest and the non-vested options
held in escrow and shall extend the 
  

 -13- 

 Executive’s right to exercise such options held in escrow so that the Executive may exercise such options
until the later of (i) 90 days after a Final Determination is made, or (ii) the last date the options would otherwise be exercisable. For purposes of this Section 5.4(c), a “Final Determination” shall mean with respect to (i) the
Executive’s being indicted for a crime under Section 5.4(b)(iii), the Executive has been found not guilty by a court of final adjudication or the indictment has been dismissed or the Executive has pled guilty or nolo contendere to such
crime or to a lesser crime in connection with such indictment, (provided that only a conviction of, or guilty or nolo contendere plea to, a felony shall be “Cause”) or (ii) the Executive’s removal under Section 5.4(b)(vi) or
the Executive being accused of misappropriation under Section 5.4(b)(viii), a final determination by an arbitrator as to whether the Company had Cause for the termination referenced herein. 
  
 (d) Before the Company may terminate the Executive for Cause pursuant
to Section 5.4(a) above, the Board shall deliver to the Executive a written notice of the Company’s intent to terminate the Executive for Cause, including the reasons for such termination, the giving of which shall have been authorized
by a vote the Board; and the Executive shall have been given a reasonable opportunity to cure any such acts or omissions (which are susceptible of cure as reasonably determined by the Board) within thirty (30) days after the Executive’s receipt
of such notice. The Company intends that “Cause” must be based only on material matters and not on matters of minor importance. The Board’s delay in providing such notice shall not be deemed to be a waiver of any such Cause unless and
until the Board fails to provide such notice within sixty (60) days after a majority of the Board first becomes aware of the occurrence of the event triggering such Cause, nor does the failure to terminate for one Cause prevent any later Cause
termination for a similar or different reason. 
  
 5.5
Resignation For Good Reason or Termination without Cause. 
  
 (a) The Executive may resign, and thereby terminate his employment (and the Employment Period), at any time for “Good Reason” (as defined below), upon not less than thirty (30) days’ prior written notice (reduced
to five days’ notice for failure to pay Base Salary) to the Company specifying in reasonable detail the reason therefor; provided, however, that the Company shall have been given a reasonable opportunity to cure any such Good Reason (which are
susceptible of cure) within thirty (30) days after the Company’s receipt of such notice. The Executive’s delay in providing such notice shall not be deemed to be a waiver of any such Good Reason unless and until the Executive fails to
provide such notice within sixty (60) days after the Executive first becomes aware of the occurrence of the event triggering such Good Reason, nor does the failure to resign for one Good Reason prevent any later Good Reason resignation for a similar
or different reason. 
  
 (b) For purposes of this
Agreement, “Good Reason” means, without the Executive’s prior written consent: 
  
 (i) a material failure by the Company to comply with any material obligation imposed by this Agreement; 
  
 (ii) the Executive is demoted from the position of Chief Executive
Officer of the Company (but not if the Executive is removed from the position of 
  

 -14- 

 Chief Executive Officer of Holdings for any reason), or the Executive’s duties and responsibilities with
respect to the Company (but not with respect to Holdings) are materially and substantially diminished as a whole; 
  
 (iii) any reduction in the Executive’s Base Salary; 
  

(iv) the removal or failure to re-elect the Executive as a member of the Board or the Holdings Board, other than as a result of the
Executive’s voluntary resignation or choice not to stand for reelection or reappointment; 
  
 (v) the Company’s requiring the Executive to be based (excluding regular travel responsibilities) at any office or location more than 25 miles
from the principal office of the Company on the Effective Date; or 
  
 (vi) a Change of Control of Holdings or the Company, followed by any assignment to the Executive of any duties inconsistent in any material respect with the provisions of this Agreement relating to his position (including,
without limitation, his status, office, title, or reporting relationship), authority, control, duties, or responsibilities. 
  
 Notwithstanding anything herein to the contrary, in no event shall (A) any action otherwise meeting the definition of Good Reason under clauses (i) through (vi)
above taken by the Company for Cause, or (B) the removal of the Executive as Chairman of the Board or Chairman of the Holdings Board for any reason constitute, or be deemed to constitute, grounds for Good Reason termination hereunder. 
  
 (c) The Company may terminate Executive’s employment without
Cause and thereby terminate Executive’s employment (and the Employment Period) under this Agreement at any time upon not less than thirty (30) days’ prior written notice. 
  
 5.6 Resignation other than for Good Reason. The Executive may resign and thereby terminate his
employment (and the Employment Period) under this Agreement at any time upon not less than thirty (30) days’ prior written notice. 
  
 5.7 Payments Upon Termination Without Cause or Resignation for Good Reason. 
  
 (a) In the event the Executive’s employment is terminated prior
to the third anniversary of the Effective Date (i) by the Company without “Cause,” or (ii) by the Executive for “Good Reason,” then the following provisions shall apply: 
  
 (i) The Company shall continue to pay the Executive the Base Salary
to which the Executive would have been entitled pursuant to Section 3.1 hereof (at the Base Salary rate during the year of termination) had the Executive remained in the employ of the Company, until the later of the first anniversary of the
date of termination or the third anniversary of the Effective Date (the “Termination Payment Period”), with all such amounts payable in accordance with the Company’s payroll system in the same manner and at the same time as though the
Executive remained employed by the Company. 
  

 -15- 

 (ii) The Company shall pay to the Executive the bonus pursuant to Section 3.2(a) hereof
that the Executive would have been entitled to had he worked the full year during which the termination occurred. The bonus shall be payable in full within forty-five days following the determination of the amount thereof and in accordance with the
Company’s normal payroll practices and procedures. 
  
 (iii) Unless prohibited by law or, with respect to any insured benefit, the terms of the applicable insurance contract, the Executive shall continue to participate in, and be covered under, the Company’s group life, disability,
sickness, accident and health insurance programs on the same basis as other executives of the Company through the first to occur of (x) the first anniversary of the Executive’s termination, or (y) the end of the Termination Payment Period. In
addition, the Company shall continue to provide the Executive with the insurance described in Section 3.4(b) of this Agreement during such period. 
  
 (b) In the event the Executive’s employment is terminated following the third anniversary of the Effective Date (i) by the Company without
“Cause,” or (ii) by the Executive for “Good Reason,” then the following provisions shall apply: 
  
 (i) The Company shall continue to pay the Executive the Base Salary to which the Executive would have been entitled pursuant to Section 3.1
hereof (at the Base Salary rate during the year of termination) had the Executive remained in the employ of the Company, until the later of the first anniversary of the date of termination or the expiration of the Employment Period without giving
effect to any further extensions pursuant to Section 2.2 hereof, with all such amounts payable in accordance with the Company’s payroll system in the same manner and at the same time as though the Executive remained employed by the
Company. 
  
 (ii) The Company shall pay to the Executive
the bonus pursuant to Section 3.2(a) hereof that the Executive would have been entitled to had he worked the full year during which the termination occurred. The bonus shall be payable in full within forty-five days following the
determination of the amount thereof and in accordance with the Company’s normal payroll practices and procedures. 
  
 (iii) Unless prohibited by law or, with respect to any insured benefit, the terms of the applicable insurance contract, the Executive shall
continue to participate in, and be covered under, the Company’s group life, disability, sickness, accident and health insurance programs on the same basis as other executives of the Company through the the first anniversary of the
Executive’s termination. In addition, the Company shall continue to provide Executive with the insurance described in Section 3.4(b) of this Agreement during such period. 
  
 (c) In the event Executive’s employment ends under either Section 5.7(a) or (b) but not as a
result of Section 5.5(b)(vi), the Option shall automatically vest and be exercisable as to the greater of the then vested shares or 1,150,000 shares, effective as of the day immediately preceding the Executive’s termination date, and,
the Option shall remain outstanding and exercisable for the longer of two (2) years from the date of termination (six (6) months in the event such termination of employment occurs at any time following an IPO) or the duration provided in the Plan
and/or the applicable option agreement, but in no event shall such Option be exercisable following the expiration date. In the event Executive’s employment ends 
  

 -16- 

 under Section 5.5(b)(vi), the Option shall vest and be exercisable in accordance with Section 3.5.

  
 (d) The Executive agrees to release the Company and
its respective Affiliates, officers, directors, stockholders, employees, agents, representatives, and successors from and against any and all claims that the Executive may have against any such person relating to the Executive’s employment by
the Company and the termination thereof, such release to be in form and substance reasonably satisfactory to the Company; provided, however, that (i) in lieu of accepting any payments or other benefits under Section 5.7, the Executive may
decline to sign the release and preserve any rights to sue, and (ii) the release does not cover any claims the Executive may have to or about equity interests or with respect to his equity ownership in Holdings and/or the Company that were not
granted or purchased in connection with his employment hereunder. The parties intend for the release to cover any claims the Executive may have to or about equity interests or with respect to his equity ownership in Holdings or the Company that the
Executive was granted pursuant to Section 3.5 or any employee benefit plan or arrangement of Holdings or the Company. 
  
 5.8 Payments Upon Termination for Cause or Resignation Without Good Reason. 
  
 (a) In the event the Executive’s employment is terminated by the
Company for “Cause,” or (ii) by the Executive without “Good Reason,” the Executive shall be entitled to receive all amounts of accrued but unpaid Base Salary and benefits through the date of such termination, but all other rights
of the Executive (and all obligations of the Company) hereunder shall terminate as of the date of such termination, other than with respect to equity compensation as to which there will be no further vesting (but vested options will remain
exercisable). 
  
 5.9 Change of
Control. “Change of Control” means the occurrence of any one or more of the following events:  
  
 (a) any merger or consolidation of Holdings or the Company with or into any Person in one transaction or a series of related transactions, if,
immediately after giving effect to such transaction(s), any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, regardless of whether applicable), becomes the “beneficial
owner,” directly or indirectly, of more than 50% of the total voting power in the aggregate of the equity interests of Holdings or the Company, as applicable, normally entitled to vote in the election of directors, managers, or trustees, as
applicable, of the transferee(s) or surviving entity or entities; 
  
 (b) any sale, transfer or other conveyance, whether direct or indirect, of all or substantially all of the assets of Holdings or the Company, in one transaction or a series of related transactions; 
  
 (c) any “person” or “group” (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, regardless of whether applicable), other than Holdings or the Company or any of their respective Affiliates, becomes the “beneficial owner,” 
  

 -17- 

 directly or indirectly, of more than 50% of the total voting power in the aggregate of the equity interests of Holdings or the
Company then outstanding normally entitled to vote in elections of members of the Board or the Holdings Board, as applicable; or 
  
 (d) Holdings or the Company dissolves or adopts a plan of complete liquidation. 
 6. Miscellaneous 
  
 6.1 ARBITRATION. SUBJECT TO THE RIGHTS UNDER SECTION 4.4 TO SEEK INJUNCTIVE OR OTHER EQUITABLE RELIEF AS SPECIFIED IN THIS AGREEMENT, ANY
DISPUTE BETWEEN THE PARTIES HERETO ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF DAMAGES, THE NATURE OF THE EXECUTIVE’S TERMINATION OR THE CALCULATION
OF ANY BONUS OR OTHER AMOUNT OR BENEFIT DUE) SHALL BE RESOLVED IN ACCORDANCE WITH THE PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION, PROVIDED, HOWEVER, THAT THE PARTIES AGREE THAT ANY ARBITRATOR OR ARBITRATORS SELECTED OR APPOINTED TO HEAR THE
ARBITRATION SHALL BE EITHER A RETIRED JUDGE OF THE CIRCUIT OR APPELLATE COURTS OF MARYLAND OR A PRACTICING ATTORNEY WITH AT LEAST FIFTEEN (15) YEARS OF EXPERIENCE IN MATTERS REASONABLY RELATED TO THE ISSUE OR ISSUES IN DISPUTE. ANY RESULTING HEARING
SHALL BE HELD IN THE BALTIMORE, MARYLAND AREA. THE RESOLUTION OF ANY DISPUTE ACHIEVED THROUGH SUCH ARBITRATION SHALL BE BINDING AND ENFORCEABLE BY A COURT OF COMPETENT JURISDICTION. COSTS AND FEES INCURRED IN CONNECTION WITH SUCH ARBITRATION SHALL
BE BORNE BY THE PARTIES AS DETERMINED BY THE ARBITRATION. 
  
 6.2 Entire Agreement; Waiver. This Agreement contains the entire agreement between the Executive and the Company with respect to the subject matter hereof, and supersede any and all prior understandings or agreements,
whether written or oral. No modification or addition hereto or waiver or cancellation of any provision hereof shall be valid except by a writing signed by the party to be charged therewith. No delay on the part of any party to this Agreement in
exercising any right or privilege provided hereunder or by law shall impair, prejudice or constitute a waiver of such right or privilege. 
  
 6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland,
without regard to principles of conflict of laws. 
  
 6.4
Successors and Assigns; Binding Agreement. The rights and obligations of the parties under this Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, personal representatives, successors
and permitted assigns. This Agreement is a personal contract, and, except as specifically set forth herein, the rights and interests of the Executive herein may not be sold, transferred, assigned, pledged or hypothecated 
  

 -18- 

 by any party without the prior written consent of the others. As used herein, the term “successor” as it relates to the
Company, shall include, but not be limited to, any successor by way of merger, consolidation, or sale of all or substantially all of such Person’s assets or equity interests. 
  
 6.5 No Mitigation. In the event the Executive’s employment is terminated (i) by the Company
without Cause, or (ii) by the Executive for any reason, then the Company waives, releases and remises (x) any obligation or duty under applicable law on the part of the Executive to seek or obtain other engagements or employment or to otherwise
mitigate any damages to which the Executive may be entitled to by reason of any termination of this Agreement; and (y) any right in or claim to any remuneration or compensation received by the Executive pursuant to any engagements or employment
subsequent to the termination of this Agreement. 
  
 6.6 Representation by Counsel. Each of the parties hereto acknowledges that (i) it or he has read this Agreement in its entirety and understands all of its terms and conditions, (ii) it or he has had the opportunity to
consult with any individuals of its or his choice regarding its or his agreement to the provisions contained herein, including legal counsel of its or his choice, and any decision not to was his or its alone, and (iii) it or he is entering into this
Agreement of its or his own free will, without coercion from any source. 
  
 6.7 Interpretation. The parties and their respective legal counsel actively participated in the negotiation and drafting of this Agreement, and in the event of any ambiguity or mistake herein, or any
dispute among the parties with respect to the provisions hereto, no provision of this Agreement shall be construed unfavorably against any of the parties on the ground that he, it, or his or its counsel was the drafter thereof. 
  
 6.8 Survival. The provisions of Sections 4,
5.7, 5.8 and 6 hereof shall survive the termination of this Agreement. 
  
 6.9 Notices. All notices and communications hereunder shall be in writing and shall be deemed properly given and effective when received, if sent by facsimile or telecopy, or by postage prepaid by
registered or certified mail, return receipt requested, or by other delivery service which provides evidence of delivery, as follows: 
  
 If to the Company, to: 
  
 Educate Operating Company, LLC 
 1001 Fleet Street, 9th Floor 
 Baltimore, MD 21202 
 Attn: Board of Directors 
  
 with a copy (which shall not constitute notice) to: 
  
 Skadden, Arps, Slate, Meagher & Flom LLP 
 300 South Grand Avenue, Suite 3400 
 Los Angeles, California 90071-3144 
  

 -19- 

 Attention: Jeffrey Cohen, Esq. 
 Telephone: (213) 687-5000 
 Facsimile: (213) 687-5600 
  
 If to the
Executive, to: 
  
 R. Christopher Hoehn-Saric 

c/o Educate Operating Company, LLC 
 1001 Fleet Street, 9th Floor 
 Baltimore, MD 21202 
  
 or to such other address as one party may provide in writing to the other party from time to time. 
  
 6.10 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 
  
 6.11 Captions. Paragraph headings are for convenience only and shall not be considered a part of this Agreement. 
  
 6.12 No Third Party Beneficiary Rights. Except as
otherwise provided in this Agreement, no entity shall have any right to enforce any provision of this Agreement, even if indirectly benefited by it. 
  
 6.13 Withholding. Any payments provided for hereunder shall be paid net of any applicable withholding required under Federal, state or
local law and any additional withholding to which Executive has agreed. 
  
 [THIS SPACE INTENTIONALLY LEFT BLANK] 
  

 -20- 

 IN WITNESS WHEREOF, the parties have duly executed this Agreement, intending it as a document under seal, as
of the date first above written. 
  

							
	 WITNESS/
 ATTEST:
	  	 	  	EDUCATE OPERATING COMPANY, LLC
				
	/s/	  	By:	  	 /s/
  
	 	(SEAL)
	 	  	 	  	 Name:
 Title:
	 	 
	 	  	 	  	 EXECUTIVE
	 	 
				
	/s/	  	 	  	 /s/  R. Christopher Hoehn-Saric
  
	 	(SEAL)
	 	  	 	  	R. Christopher Hoehn-Saric	 	 

  
 THE UNDERSIGNED has duly
executed this Agreement, intending it as a document under seal, as of the date first above written, solely for purposes of Sections 1.1, 1.2, 3.4(e) and 3.5 hereof. 
  

							
	 WITNESS/
 ATTEST:
	  	 	  	EDUCATE, INC.
				
	/s/	  	By:	  	 /s/
  
	 	(SEAL)
	 	  	 	  	 Name:
 Title:
	 	 

  

 -21- 

 Schedule 1.2 
  
 Sterling Capital Partners 
 Sterling Venture Partners 

Sylvan Learning Systems 
 Marvelous Markets Inc. 
 National Technological University, Inc. 
  

 -22- 

 Schedule 3.2 
  
 The Company’s “EBITDA” goal for the 2003 calendar year shall be equal to Forty Million Three Hundred Thousand Dollars ($40,300,000), as appropriately adjusted from
time to time by the Board in its sole discretion in the event of any acquisition, disposition or other extraordinary transaction or event affecting the Company. “EBITDA” means as to any measurement period, shall have the meaning set forth
in the Credit Agreement by and among the Company, Holdings, J.P. Morgan Securities Inc. and JPMorgan Chase Bank. 
  

 -23-EXHIBIT 10.8

 Exhibit 10.8 
  
  
 INDEMNIFICATION AGREEMENT 
  
 THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into this 30th day of June, 2003 (the “Effective
Date”), by and between Educate, Inc., a Delaware corporation (the “Company”), and R. Christopher Hoehn-Saric (“Indemnitee”). 
  
 WHEREAS, at the request of the Company, Indemnitee currently serves as an officer and director of the Company and its subsidiaries and may, therefore, be subjected
to claims, suits or proceedings arising as a result of his service; and 
  
 WHEREAS, as an inducement to Indemnitee to continue to serve as such officer and director, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or
proceedings, to the fullest extent permitted by law; and 
  
 WHEREAS, the
parties by this Agreement desire to set forth their agreement regarding indemnification; 
  
 NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows: 
  
 Section 1.    Definitions.    For purposes of this Agreement: 
  
 (a)    “Change in Control” means a change in control of
the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the
Securities Exchange Act of 1934 (the “Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then outstanding securities without the prior approval of at least a majority of the members of the Board of Directors in office immediately prior to such person attaining
such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least a majority of the members of the Board of
Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two
consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or
nomination for election by the Company’s stockholders was approved by a vote of at a majority of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of
the Board of Directors. 
  
 (b)    “Corporate
Status” means the status of a person who is or was a director, trustee, officer, employee, or agent of the Company or of any other corporation, partnership, joint venture, 

 trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company. 
  
 (c)    “Disinterested Director” means a director of the
Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee. 
  
 (d)    “Effective Date” means the date set forth in the preamble. 
  
 (e)    “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript
costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding. 
  
 (f)    “Independent Counsel” means a law firm, or a member of a law firm, selected by the Board of Directors by vote as set forth in
Section 8(b), that is experienced in matters of corporate law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to
the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. 
  
 (g)    “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative
hearing or any other proceeding, whether civil, criminal, administrative or investigative, except one initiated by an Indemnitee (i) pursuant to Section 10 of this Agreement to enforce his rights under this Agreement or (ii) in violation of Section
14 of this Agreement. 
  
 Section 2.     Services by
Indemnitee.    Indemnitee agrees to serve as an officer and director of the Company and its subsidiaries and may at any time and for any reason resign from such position (subject to any other contractual obligation or any
obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. 
  
 Section 3.    Indemnification – General.    The Company shall indemnify, and advance Expenses to, Indemnitee (a)
as provided in this Agreement and (b) to the fullest extent permitted by Delaware law in effect on the date hereof and as amended from time to time. The rights of Indemnitee provided in this Section 3 shall include, but shall not be limited to, the
rights set forth in the other sections of this Agreement. 
  
 Section
4.    Proceedings Other Than Proceedings by or in the Right of the Company.    Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of his Corporate
Status, he is, or is threatened to be, made a party or witness to any threatened, pending, or completed Proceeding, other than a Proceeding by or in the right of the Company. Pursuant to this Section 4, Indemnitee shall be indemnified against all
Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with 
  

 2 

 a Proceeding by reason of his Corporate Status unless it is established that (i) Indemnitee failed to act in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the Company, or (ii) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe or should have believed that his conduct was unlawful. 
  
 Section 5.     Proceedings by or in the Right of the
Company.    Indemnitee shall be entitled to the rights of indemnification provided in this Section 5 if, by reason of his Corporate Status, he is made a party or witness to any threatened, pending or completed Proceeding
brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 5, Indemnitee shall be indemnified against all amounts paid in settlement and all Expenses actually and reasonably incurred by him or on his
behalf in connection with any such Proceeding unless it is established that (i) Indemnitee failed to act in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company, or (ii) with respect to any
claim, issue or matter, Indemnitee is adjudged liable to the Company, unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses as the Court of Chancery or such other court shall deem proper. 
  
 Section 6.     Indemnification for Expenses of a Party Who is
Wholly or Partly Successful.    Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, made a party to and is successful, on the merits or otherwise, in the
defense of any Proceeding, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 6 against all Expenses actually and reasonably incurred by him or on his behalf in connection with
each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter. 
  
 Section
7.     Advancement of Expenses.    To the extent permitted by applicable law, the Company shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding
to which Indemnitee is, or is threatened to be, made a party, within ten days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by the Indemnitee of the Indemnitee’s good faith
belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be
determined that such standard of conduct has not been met or as required by Section 6 if Indemnitee is actually or partly unsuccessful. 
  

 3 

 Section 8.    Procedure for Determination of Entitlement to Indemnification. 
  
 (a)    To obtain indemnification under this Agreement, Indemnitee
shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. 
  
 (b)    Upon written request by Indemnitee for indemnification
pursuant to the first sentence of Section 8(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: 
  
 (i) if a Change in Control shall have occurred, by Independent Counsel
in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or 
  
 (ii) if a Change of Control shall not have occurred, 
  
 (A) by the Board of Directors by a majority vote of Disinterested Directors, or 
  
 (B) if there are no such directors or if such directors so direct, by Independent Counsel in a written opinion to the
Board of Directors, a copy of which shall be delivered to Indemnitee, or 
  
 (C) if so directed by a majority of the members of the Board of Directors, by the stockholders of the Company. 
  
 If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten days after such determination. Indemnitee
shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or Expenses (including reasonable attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. 
  
 Section
9.    Presumptions and Effect of Certain Proceedings. 
  
 (a)    If a Change of Control shall have occurred, in making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making 
  

 4 

 such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a
request for indemnification in accordance with Section 8(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption. 

 
 (b)    The termination of any Proceeding by judgment, order, or
settlement conviction, or a plea of nolo contendere or its equivalent, does not create a presumption that the Indemnitee did not meet the requisite standard of conduct described herein for indemnification. 
  
 Section 10.    Remedies of Indemnitee. 
  
 (a)    If (i) a determination is made pursuant to Section 8 of
this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been
made pursuant to Section 8(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 6 of this Agreement within ten days after receipt by the
Company of a written request therefor, or (v) payment of indemnification is not made within ten days after a determination has been made that Indemnitee is entitled to indemnification, then Indemnitee shall be entitled to an adjudication in the
Court of Chancery of the State of Delaware, or in any other court of competent jurisdiction, of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on
which Indemnitee first has the right to commence such proceeding pursuant to this Section 10(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section
6 of this Agreement. 
  
 (b)    If a Change of Control
shall have occurred, in any judicial proceeding or arbitration commenced pursuant to this Section 10 the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

  
 (c)    If a determination shall have been made
pursuant to Section 8(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification. 
  
 (d)    In the event that Indemnitee, pursuant to this Section 10,
seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and 
  

 5 

 shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him in such judicial
adjudication or arbitration, but only if he prevails therein. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought,
the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. 
  
 Section 11.    Non-Exclusivity; Survival of Rights; Insurance; Subrogation. 
  
 (a)    The rights of indemnification and advancement of Expenses as provided by this Agreement shall not be deemed
exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement, a vote of stockholders or a resolution of the board of directors, or otherwise. 
  
 (b)    To the extent that the Company maintains an insurance policy
or policies providing liability insurance for, officers, directors, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request
of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such, officer, director, employee or agent under such policy or policies.

  
 (c)    In the event of any payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Company to bring suit to enforce such rights. 
  
 (d)    The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise. 
  
 Section
12.    Duration of Agreement.    This Agreement shall continue until and terminate ten years after the date that Indemnitee shall have ceased to serve as a director, trustee, officer, employee, or agent
of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which Indemnitee served at the request of the Company; provided, that the rights of Indemnitee hereunder shall continue
until the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 of this
Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. 
  
 Section 13.    Severability.    If any
provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation,
each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or 
  

 6 

 impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

  
 Section 14.    Exception to Right of
Indemnification or Advancement of Expenses.    Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses under this Agreement with respect to any
Proceeding brought by Indemnitee, unless the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors. 
  
 Section 15.    Identical Counterparts.    This Agreement may be executed in one or more counterparts, each of which
shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement. 
  
 Section
16.    Headings.    The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

  
 Section 17.    Modification and
Waiver.    No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. 
  
 Section 18.    Notice by Indemnitee.    Indemnitee agrees promptly to notify the Company in writing upon being served
with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. 
  
 Section 19.    Notices.    All notices,
requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii)
mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: 
  
 (a)     If to Indemnitee, to: The address set forth in the signature pages hereto. 
  
 (b)     If to the Company to: 
  
 Educate, Inc. 
 1001 Fleet Street, 9th Floor 
 Baltimore, MD 21202 
 Attn: Board of Directors 
  

 7 

 or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may
be. 
  
 Section 20.    Governing
Law.    The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. 
  
 Section 21.     Miscellaneous.    Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate. 
  
 (Signatures
Follow) 
  

 8 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

  

							
	 ATTEST:
	 	 	 	 EDUCATE, INC.

				
	 /s/

	 	 	 	By:	 	 /s/  Kevin Shaffer

	Secretary	 	 	 	 Name: Kevin Shaffer
 Title:    Vice
President

  
  
  

							
	 WITNESS:
	 	 	 	 INDEMNITEE

			
	 /s/

	 	 	 	 /s/  R. Christopher Hoehn-Saric

	 	 	 	 	 R. Christopher Hoehn-Saric
 c/o Educate, Inc.
 1001 Fleet Street, 9th Floor
 Baltimore, MD 21202

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