Document:

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                                                                     Exhibit 4.6

     ________________________________________________________________

                     COMMON SECURITIES GUARANTEE AGREEMENT

                      PUGET SOUND ENERGY CAPITAL TRUST II

                           Dated as of May 18, 2001

     _________________________________________________________________

<PAGE>

                                   CONTENTS

ARTICLE I  DEFINITIONS AND INTERPRETATION...............................   2

     SECTION 1.1    Definitions and Interpretation......................   2

ARTICLE II  GUARANTEE...................................................   3

     SECTION 2.1    Guarantee...........................................   3

     SECTION 2.2    Waiver of Notice and Demand.........................   3

     SECTION 2.3    Obligations Not Affected............................   3

     SECTION 2.4    Rights of Holders...................................   4

     SECTION 2.5    Guarantee of Payment................................   4

     SECTION 2.6    Subrogation.........................................   5

     SECTION 2.7    Independent Obligations.............................   5

ARTICLE III  LIMITATION OF TRANSACTIONS; SUBORDINATION..................   5

     SECTION 3.1    Limitation of Transactions..........................   5

     SECTION 3.2    Ranking.............................................   6

ARTICLE IV  TERMINATION.................................................   6

     SECTION 4.1    Termination.........................................   6

     ARTICLE V      MISCELLANEOUS.......................................   6

     SECTION 5.1    Successors and Assigns..............................   6

     SECTION 5.2    Amendments..........................................   7

     SECTION 5.3    Notices.............................................   7

     SECTION 5.4    Benefit.............................................   8

     SECTION 5.5    Governing Law.......................................   8
<PAGE>

                     COMMON SECURITIES GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as of
May 18, 2001, is executed and delivered by Puget Sound Energy, Inc., a
Washington corporation (the "Guarantor"), for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of Puget Sound Energy Capital Trust II, a Delaware statutory business trust (the
"Issuer").

     WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of May 18, 2001, among the trustees of the Issuer named
therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 247,440 common securities, having an aggregate stated
liquidation amount of $6,186,000 designated the 8.40% Trust Originated Common
Securities (the "Common Securities");

     WHEREAS, as incentive for the Holders to purchase the Common Securities,
the Guarantor desires to irrevocably and unconditionally agree, to the extent
set forth in this Common Securities Guarantee, to pay to the Holders of the
Common Securities the Guarantee Payments (as defined herein) and to make certain
other payments on the terms and conditions set forth herein; and

     WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Common Securities Guarantee for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of Holders
of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments under the Preferred Securities
Guarantee.

     NOW, THEREFORE, in consideration of the purchase by each Holder of Common
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
<PAGE>

                  ARTICLE I  DEFINITIONS AND INTERPRETATION

SECTION 1.1   Definitions and Interpretation

     In this Common Securities Guarantee, unless the context otherwise requires:

     (a)   Capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;

     (b)   Terms defined in the Declaration as of the date of execution of this
Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee;

     (c)   a term defined anywhere in this Common Securities Guarantee has the
same meaning throughout;

     (d)   all references to "the Common Securities Guarantee" or "this Common
Securities Guarantee" are to this Common Securities Guarantee modified,
supplemented or amended from time to time;

     (e)   all references in this Common Securities Guarantee to Articles and
Sections are to Articles and Sections of this Common Securities Guarantee unless
otherwise specified; and

     (f)   a reference to the singular includes the plural and vice versa.

     "Guarantee Payments" shall mean the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer:  (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Common
Securities to the extent the Issuer shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price") to the extent the Issuer has funds
available therefor, with respect to any Common Securities called for redemption
by the Issuer, and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of the Issuer (other than in connection with the distribution of
Debentures to the Holders in exchange for Common Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Common Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution

                                      -2-
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to Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, the rights of Holders of the Common Securities to
receive Guarantee Payments under this Common Securities Guarantee are
subordinated to the rights of holders of Preferred Securities to receive
Guarantee Payments.

     "Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Common Securities.

     "Preferred Securities" mean the securities representing preferred undivided
beneficial interests in the assets of the Issuer.

                             ARTICLE II  GUARANTEE

SECTION 2.1   Guarantee

     The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Issuer), as and when due, regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert.  The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.

SECTION 2.2   Waiver of Notice and Demand

     The Guarantor hereby waives notice of acceptance of this Common Securities
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

SECTION 2.3   Obligations Not Affected

     Except as otherwise provided herein, the obligations, covenants, agreements
and duties of the Guarantor under this Common Securities Guarantee shall in no
way be affected or impaired by reason of the happening from time to time of any
of the following:

     (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,

                                      -3-
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covenant, term or condition relating to the Common Securities to be performed or
observed by the Issuer;

     (b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Common Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Common Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);

     (c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Common Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;

     (d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

     (e) any invalidity of, or defect or deficiency in, the Common Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

     (g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 2.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.

SECTION 2.4   Rights of Holders

     The Guarantor expressly acknowledges that any Holder of Common Securities
may institute a legal proceeding directly against the Guarantor to enforce its
rights under this Common Securities Guarantee, without first instituting a legal
proceeding against the Issuer or any other Person.

                                      -4-
<PAGE>

SECTION 2.5   Guarantee of Payment

     This Common Securities Guarantee creates a guarantee of payment and not of
collection.

SECTION 2.6   Subrogation

     The Guarantor shall be subrogated to all (if any) rights of the Holders of
Common Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Common Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common Securities Guarantee.  If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

SECTION 2.7   Independent Obligations

     The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Common Securities and that
the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Common Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 2.3 hereof.

            ARTICLE III  LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 3.1   Limitation of Transactions

     So long as any Common Securities remain outstanding, if (i) the Guarantor
shall be in default with respect to its Guarantee Payments or other obligations
hereunder, or (ii) there shall have occurred any Event of Default under the
Indenture or an event of default under the Declaration, then (a) the Guarantor
shall not declare or pay any dividend on, or make any distributions with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock, (b) the Guarantor shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Guarantor which rank pari
passu with or junior to the Debentures or

                                      -5-
<PAGE>

(c) the Guarantor shall not make any guarantee payments with respect to the
foregoing (other than, with respect to clauses (a), (b) and (c), (i) dividends
or distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, common stock of the Guarantor; (ii) any declaration of a
dividend in connection with the implementation of a shareholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto; (iii) payments under the
Preferred Securities Guarantee Agreement; (iv) as a direct result of, and only
to the extent required in order to avoid the issuance of fractional shares of
capital stock, following a reclassification of the Guarantor's capital stock or
the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock; and (v) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged).

SECTION 3.2   Ranking

     This Common Securities Guarantee will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.

                            ARTICLE IV  TERMINATION
SECTION 4.1   Termination

     This Common Securities Guarantee shall terminate (i) upon full payment of
the Redemption Price of all Common Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Common Securities, or (iii) or upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Common Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Common Securities must restore payment of any
sums paid under the Common Securities or under this Common Securities Guarantee.

                                      -6-
<PAGE>

                           ARTICLE V  MISCELLANEOUS

SECTION 5.1   Successors and Assigns

     All guarantees and agreements contained in this Common Securities Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Common
Securities then outstanding.

SECTION 5.2   Amendments

     Except with respect to any changes which do not adversely affect the rights
of Holders (in which case no consent of Holders will be required), this Common
Securities Guarantee may only be amended with the prior approval of the Holders
of at least a majority in liquidation amount of all the outstanding Common
Securities.  The provisions of Section 12.2 of the Declaration with respect to
meetings of Holders of the Securities apply to the giving of such approval.

SECTION 5.3   Notices

     All notices provided for in this Common Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:

     (a)   if given to the Issuer, in care of the Regular Trustees at the
           Issuer's mailing address set forth below (or such other address as
           the Issuer may give notice of to the Holders of the Common
           Securities):

           Puget Sound Energy Capital Trust II
           c/o Puget Sound Energy, Inc.
           411 108/th/ Avenue N.E.
           Bellevue, Washington  98004-5515
           Attention: Richard L. Hawley
                      Donald E. Gaines
           Facsimile (425) 462-3300

     (b)   if given to the Guarantor, at the Guarantor's mailing address set
           forth below (or such other address as the Guarantor may give notice
           of to the Holders of the Common Securities):

                                      -7-
<PAGE>

           Puget Sound Energy, Inc.
           411 108/th/ Avenue N.E.
           Bellevue, Washington 98004-5515
           Attention: Donald E. Gaines
                      Vice President and Treasurer
           Facsimile (425) 462-3300

     (c)   if given to any Holder of Common Securities, at the address set forth
           on the books and records of the Issuer.

     All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

SECTION 5.4   Benefit

     This Common Securities Guarantee is solely for the benefit of the Holders
of the Common Securities and is not separately transferable from the Common
Securities.

SECTION 5.5   Governing Law

     This Common Securities Guarantee shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Washington.

     (The remainder of this page has intentionally been left blank)

                                      -8-
<PAGE>

     THIS COMMON SECURITIES GUARANTEE is executed as of the day and year first
above written.

                                 PUGET SOUND ENERGY, INC., as Guarantor

                                 By:   /s/ Donald E. Gaines
                                     ----------------------------------
                                     Donald E. Gaines
                                     Vice President and Treasurer

                                      -9-<PAGE>

                                                                    Exhibit 10.1

                        NOBEL EDUCATION DYNAMICS, INC.

                     Non-qualified Stock Option Agreement
                     ------------------------------------

     Non-qualified Stock Option Agreement dated as of January 2, 1997
("Agreement") between Nobel Education Dynamics, Inc., a Delaware corporation
(the "Company"), and A. J. Clegg ("Employee").

1.   Definitions
     -----------

     1.1  "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

     1.2  "Committee" means the Compensation Committee of the Board of Directors
of the Company or, in the event there is no such Compensation Committee, the
Board of Directors of the Company.

     1.3  "Common Stock" means the Company's Common Stock, par value $0.001 per
share.

     1.4  "Date of Exercise" means the date on which the notice required by
Section 4.1 hereof is received by the Company.

     1.5  "Date of Grant" means January 2, 1997.

     1.6  "Option" means the option granted hereunder. The Option hereby granted
is a non-qualified stock option (i.e., not an "incentive stock option" within
the meaning of section 422 of the Code).

     1.7  "Optioned Stock" means the shares of Common Stock that are subject to
the Option.

     1.8  "Subsidiary" means any corporation which is a subsidiary of the
Company under the definition of "subsidiary corporation" contained in section
424(f) of the Code, or any successor.

     1.9  "Termination Date" means the earliest to occur of the following:

          (a)  the tenth (10th) anniversary of the Date of Grant;

          (b)  If Employee's employment by the Company (and Subsidiaries) is
terminated by either party for any reason other than death or disability, the
date three months after the date of such termination of employment;

          (c)  If Employee shall become disabled (within the meaning of section
22(e)(3) of the Code) during Employee's employment and Employee's employment is
terminated as a
<PAGE>

consequence of such disability, the date one year after the date of such
termination of employment; or

          (d)  If Employee shall die during Employee's employment, the date one
year after the date of death;

provided that if Employee's employment is terminated for any reason other than
death and Employee shall die following such termination of employment but prior
to the expiration of the period determined under clause (b) or (c) above
(whichever is applicable), then the Termination Date shall mean the earlier of
(i) the tenth (10th) anniversary of the Date of Grant and (ii) the date one year
after the date of death.

2.   Grant of Option.
     ---------------

     Subject to the terms and conditions of this Agreement, the Company hereby
grants to Employee the option to purchase 15,000 shares of Common Stock. The
exercise price of the Option in respect of each share of Optioned Stock shall be
$10.375, subject to adjustment pursuant Section 9 hereof. Notwithstanding the
foregoing, only full shares shall be issued hereunder, and any fractional share
which might otherwise be issuable upon the exercise of the Option shall be
forfeited.

3.   Time of Exercise.
     ----------------

     The Option shall be exercisable from time to time following the Date of
Grant through the Termination Date with respect to all or any portion of the
Option which shall have been vested as of the Date of Exercise. The Option shall
vest with respect to one-third of the shares of Optioned Stock subject thereto
as of the Date of Grant on each of the first, second and third anniversary dates
of the Date of Grant. The Option shall terminate absolutely at 5:00 p.m. New
York Time on the Termination Date.

4.   Manner of Exercise; Payment.
     ---------------------------

     4.1  Exercise of the Option shall be effected by giving written notice of
exercise to the Company, in care of the Secretary of the Company. Any such
notice shall state the number of shares of Optioned Stock for which the Option
is being exercised and shall be accompanied by payment in full of the exercise
price for such shares of Optioned Stock. Such notice shall be irrevocable once
given.

     4.2  Employee shall have the right to exercise the Option with respect to
all or part of the Optioned Stock. Exercise of the Option with respect to part
of the Optioned Stock does not waive or limit Employee's rights with respect to
the balance of the Optioned Stock.

                                       2
<PAGE>

     4.3  The exercise price for the Optioned Stock upon exercise shall be
payable in cash or its equivalent; provided, however, that if the Committee, in
its discretion, so determines at or prior to the time of exercise, Employee may
pay all or a portion of the exercise price in shares of Common Stock previously
acquired by Employee; provided further that if such shares were acquired through
exercise of an option or under a stock appreciation right or through the grant
by the Company of restricted stock or unrestricted stock, Employee shall have
held such shares for a period of more than 12 months on the Date of Exercise;
provided further that any right to pay the exercise price by delivery of shares
shall be subject to applicable laws.  In the event all or a portion of the
aggregate exercise price is paid with shares of Common Stock, the shares of
Common Stock surrendered in payment of such Option shall be valued in such
manner as the Committee reasonably determines.

5.   Nontransferability.
     ------------------

     The Option shall not be assignable or transferable by Employee, otherwise
than by will or by the laws of descent and distribution, and the Option shall be
exercisable only by the Grantee; provided that in the event of Employee's legal
disability, the Option may be so exercised by Employee's guardian or legal
representative and in the event of Employee's death, the Option may be so
exercised by Employee's estate, personal representative or beneficiary who
acquired the right to exercise such Option by bequest or inheritance or by
reason of the death of Employee. If Employee is married at the time of exercise
of the Option and if Employee so requests at the time of exercise, the
certificate or certificates issued shall be registered in the name of Employee
and Employee's spouse, jointly, with right of survivorship.

6.   Securities Laws
     ---------------

     6.1  The Company may from time to time impose any conditions on the
exercise of the Option as it deems necessary or advisable to ensure that the
Option granted hereunder, and the exercise thereof, satisfy the applicable
requirements of federal and state securities laws.  Such conditions to satisfy
applicable federal and state securities laws may include, without limitation,
the partial or complete suspension of the right to exercise the Option, the
printing of legends on certificates issued pursuant to Section 7 and requiring
Employee to deliver to the Company a representation letter as to Employee's
investment intent.

     6.2  Employee hereby represents and warrants to the Company that:

          (a) upon exercise of the Option, Employee will acquire the Optioned
Stock for his own account, not as a nominee or agent, for investment and without
a view to resale or other distribution within the meaning of the Securities Act
of 1933 (the "1933 Act") and the rules and regulations thereunder, and Employee
will not distribute any of the Optioned Stock in violation of the 1933 Act or
any state securities laws;

                                       3
<PAGE>

          (b)  Employee understands that:

               (i)    the shares of Optioned Stock will not be registered under
the 1933 Act and must be held indefinitely by Employee unless such shares are
subsequently registered under the 1933 Act or an exemption from registration is
available, and the Company is not obligated to effect any such registration;

               (ii)   any routine sales of the Optioned Stock made under Rule
144 promulgated under the 1933 Act may be made only in accordance with the terms
and conditions of that Rule (which currently includes minimum holding period
requirements and, in certain cases, limits as to the number of shares which may
be sold in specified periods) and that in such cases where Rule 144 is not
applicable, registration or compliance with some other registration exemption
will be required; and

               (iii)  the certificates representing the Optioned Stock issuable
to Employee will contain a restrictive legend noting the restrictions on
transfer described herein and under federal and applicable state securities
laws, and appropriate "stop-transfer" instructions will be given to the
Company's stock transfer agent;

          (c)  Employee currently has a net worth (or joint net worth with his
spouse) equal to at least $1,000,000 and, accordingly, is an "accredited
investors" as such term is defined in Rule 501 of Regulation D promulgated under
the 1933 Act; and

          (d)  Employee's knowledge and experience in financial and business
matters are such that Employee is capable of evaluating the merits and risks of
an acquisition of the Optioned Stock pursuant to the Option.

7.   Issuance of Certificates for Shares
     -----------------------------------

     Subject to the provisions of this Agreement, the certificates for the
shares of Common Stock issuable upon exercise of the Option shall be delivered
to Employee (or to such person entitled thereto in accordance with Section 5) as
promptly after the Date of Exercise as is feasible, provided that the Company
shall not be obligated to make such deliveries, until (a) Employee has made
payment in full for such shares of Optioned Stock pursuant to Section 4 and (b)
Employee and the Company (or such Subsidiary as is the employer of Employee)
have arranged for the payment by Employee to the Company (or such Subsidiary),
or the withholding from Employee's other compensation, of an amount in cash
equal to the amount of any tax required to be withheld by the Company (or such
Subsidiary) by any applicable federal or state laws or regulations on account of
such exercise. The Company may also condition delivery of shares of Common Stock
upon the prior receipt from Employee of any undertakings or representations that
it may determine are required to ensure that the certificates are being issued
in compliance with federal and state securities laws.

                                       4
<PAGE>

8.   Rights Prior to Issuance of Certificates
     ----------------------------------------

     Neither Employee nor the person to whom the rights of Employee shall have
passed by will or the laws of descent and distribution shall have any of the
rights of a stockholder with respect to any shares of Optioned Stock until the
date of the issuance to such person of certificates for such shares of Optioned
Stock pursuant thereto.

9.   Stock Dividends; Subdivision or Combination of Shares
     -----------------------------------------------------

     The number of shares of Common Stock subject to the Option (as well as the
Option exercise price per share), shall, subject to the provisions of section
424(a) of the Code, be adjusted to reflect any stock dividend, stock split,
share combination, or similar change in the capitalization of the Company.

     In the event of a corporate transaction (as that term is described in
section 424(a) of the Code and the Treasury Regulations issued thereunder as,
for example, a merger, consolidation, acquisition of property or stock,
separation, reorganization, or liquidation), the Option shall be assumed by the
surviving or successor corporation; provided, however, that, in the event of a
proposed corporate transaction, the Committee may terminate all or a portion of
the Option effective upon closing of such corporate transaction if it determines
that such termination is in the best interests of the Company. If the Committee
decides so to terminate outstanding Options, the Committee shall give Executive
not less than seven days' notice prior to any such termination by reason of such
a corporate transaction, and, at the closing of such corporate transaction, the
Option shall be terminated (unless previously exercised) and the Company shall
pay to Executive (except to the extent that the Option is terminated prior to
the date of such closing otherwise than by reason of such Committee action) an
amount equal to the consideration paid, or to be paid, per share of Common Stock
to holders of Common Stock in connection with such corporate transaction (as
determined in good faith by the Committee) less the exercise price of the
Option. The Committee also may, in its discretion reasonably exercised, change
the terms of the Option to reflect any such corporate transaction.

10.  Change of Control
     -----------------

     Upon a Change in Control, the Committee (as it is constituted on the day
preceding the date of the Change in Control) may, in its discretion, accelerate
the vesting and exercisability of the Options. "Change in Control" shall mean
the point in time when any person (as such term is used in Section 13 of the
Securities Exchange Act of 1934 (the "Exchange Act") and the rules and
regulations thereunder and including any Affiliate or Associate of such person
(as such terms are defined in Rule 12b-2 under the Exchange Act), and any person
acting in concert with such person) directly or indirectly acquires or otherwise
becomes entitled to vote more than 50 percent of the voting power entitled to be
cast at elections for directors of the Company.

                                       5
<PAGE>

11.  Option Not to Affect Employment
     -------------------------------

     The Option granted hereunder shall not confer upon Employee any right to
continue in the employment of the Company or any Subsidiary of the Company.

12.  Withholding.
     -----------

     Each Employee authorizes the Company to make any required withholding from
such Employee's compensation for the payment of any and all income taxes and
other sums that may be due any governmental authority (other than taxes imposed
directly upon the Company) as a result of the receipt by Employee of
compensation income pursuant to the foregoing payments, and agrees, if requested
by the Company and if the Company has complied with its obligations hereunder,
and in lieu of all or a portion of such withholding, to pay the Company in a
lump sum such amounts as the Company may be required to remit to any
governmental authority on behalf of Employee in respect of any such taxes and
other sums.

13.  Miscellaneous
     -------------

     13.1  All notices and other communications hereunder shall be in writing
and shall be transmitted by messenger, courier service or certified first-class
mail (in each case postage or cost of delivery prepaid) and shall be effective
when delivered. The address for notices and other communications of (i) the
Company is Rose Tree Corporate Center II, 1400 North Providence Road, Suite
3055, Media, PA 19063, Attn: Corporate Secretary, and (ii) Employee is the
address set forth below under Employee's signature. Either party may change its
address for notice given notice to the other pursuant to this Section 13.1.

     13.2  This Agreement may be executed in two or more counterparts all of
which taken together will constitute one and the same instrument.

     13.3  This Agreement shall be governed by the applicable Code provisions to
the maximum extent possible; otherwise, the operation of, and the rights of
Employee under this Agreement shall be governed by applicable federal law and
otherwise by the laws of the State of Delaware.

                                       6
<PAGE>

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

                                          Nobel Education Dynamics, Inc.

                                          By:_________________________________
                                             Yvonne DeAngelo
                                             Vice President

                                          EMPLOYEE:

                                          ____________________________________
                                          A. J. Clegg

                                          Employee's Address:

                                          Nobel Education Dynamics, Inc.
                                          Rose Tree Corporate Center II
                                          1400 North Providence Road
                                          Suite 3055
                                          Media, PA 19063

                                       7

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