Document:

<PAGE>

                                                        EXHIBIT 4.1

                    FIRST AMENDMENT TO AMENDED AND RESTATED
                          LOAN AND SECURITY AGREEMENT
                          ---------------------------

     THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(the "AMENDMENT") is made effective as of the 17th day of December, 1999, by and
among NOBEL LEARNING COMMUNITIES, INC. ("NOBEL"), IMAGINE EDUCATIONAL PRODUCTS,
INC. ("IMAGINE"), MERRYHILL SCHOOLS, INC. ("MERRYHILL"), NEDI, INC. ("NEDI"),
MERRYHILL SCHOOLS NEVADA, INC. ("MERRYHILL NEVADA"), LAKE FOREST PARK MONTESSORI
SCHOOL, INC. ("LAKE FOREST"), PALADIN ACADEMY, L.L.C., FORMERLY KNOWN AS NOBEL
LEARNING SOLUTIONS, L.L.C.  ("PALADIN"), NOBEL EDUCATION DYNAMICS FLORIDA, INC.
("NOBEL FLORIDA"), THE ACTIVITIES CLUB, INC. ("TAC") (jointly and severally, the
"BORROWERS") and SUMMIT BANK, as Agent and Lender ("AGENT").

                                   BACKGROUND
                                   ----------

     A.   Nobel, Imagine, Merryhill, NEDI, Merryhill Nevada, Lake Forest,
Paladin, Nobel Florida and Agent are parties to that certain Amended and
Restated Loan and Security Agreement dated March 9, 1999 (the "LOAN AGREEMENT").

     B.   Borrowers and Agent desire to amend the Loan Agreement in accordance
with the terms and conditions hereof.

     C.   Capitalized terms used herein and not otherwise defined shall have the
meanings provided for such terms in the Loan Agreement.

     NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:

     1.   COST TRANSACTION.
          ----------------

          a.  Nobel has entered into that certain Agreement and Plan of
     Organization dated December 17, 1999 ("AGREEMENT OF ORGANIZATION") with
     Children's Out-of-School Time, Inc. ("COST"), Joan Bergstrom, Craig
     Bergstrom and William D. Putt pursuant to which, inter alia, (i) Nobel and
     COST will acquire 80% and 20%, respectively, of the issued and outstanding
     shares of common stock of TAC and (ii) TAC has agreed to pay to COST the
     Earn-Out Payment, if any, in accordance with the terms of SECTION 1.2(G)
                                                               --------------
     thereof (the "EARN-OUT PAYMENT").

          b.  Nobel, COST and TAC have entered into that certain Stockholders
     Agreement dated December 17, 1999 (the "STOCKHOLDERS AGREEMENT") pursuant
     to which, inter alia, (i) COST has a "put right" with respect to the COST
     Shares (as defined in the Stockholders Agreement), as more fully described
     in SECTION 3 thereof (the "PUT") and (ii) it is anticipated that, in
        ---------
     connection with the hiring of the President/COO (as defined in the
     Stockholders Agreement), Nobel will sell to the President/COO a portion of
     Nobel's shares of common stock of TAC, as more fully described in SECTION
                                                                       -------
     1.1 thereof (the "SHARE TRANSFER").
     ---

          c.  Agent consents to Nobel's and TAC's compliance with their
     respective obligations in respect of the Earn-Out Payment, the Put and the
     Share Transfer; provided that (i) in each case no Event of Default (or
     event which with the giving of notice or the passage of time or both would
     result in an Event of Default) shall have occurred and be continuing nor
     shall be caused thereby and (ii) with respect to the Share Transfer, the
     interests transferred by Nobel shall not exceed ten percent (10%) of
     Nobel's total interest in the common stock of TAC existing immediately
     prior to the Share Transfer.  If the Share Transfer shall occur, the pledge
     by Nobel to Agent of the ownership interests
<PAGE>

     of Nobel in TAC shall be deemed released and satisfied with respect to the
     portion of such interest being sold to the President/COO and Agent shall
     deliver at Nobel's direction that portion of the certificates evidencing
     Nobel's ownership interest in TAC previously delivered to Agent which are
     being sold to the President/COO (or, if necessary, Agent shall accept a
     substitute certificate evidencing the ownership interest in TAC being
     retained by Nobel).

          d.  Borrowers have delivered to Agent true and complete copies of the
     Agreement of Organization and Stockholders Agreement.

     2.   ADDITIONAL BORROWER.
          -------------------

          a.  From and after the date hereof, TAC shall be a "BORROWER" under
     the Loan Agreement and shall be bound by all the representations,
     warranties, terms, conditions, covenants, agreements and waivers thereof
     and thereunder with the same force and effect as if TAC were originally a
     party thereto.  All references to Borrower or Borrowers in the Loan
     Agreement and the other Loan Documents shall hereafter be deemed to
     include, without limitation, TAC.

          b.  Notwithstanding anything in this Amendment or the Loan Agreement
     to the contrary, Borrowers shall be permitted to cause or permit to occur
     (i) an initial public offering of the stock of TAC (an "IPO"),  (ii) a sale
     of all or a material portion of the assets of TAC (an "ASSET SALE"), or
     (iii) a sale of all or a material portion of the issued and outstanding
     stock of TAC (a "STOCK SALE"), provided that (A) in the event of an Asset
     Sale or a Stock Sale, Agent shall receive from the proceeds thereof
     immediately available funds in an amount equal to the Release Price, and
     (B) in any event no Event of Default (or event which with the giving of
     notice or the passage of time or both would result in an Event of Default)
     shall have occurred and be continuing nor shall be caused thereby.  In the
     event of any IPO, Asset Sale or Stock Sale (but, in the case of an Asset
     Sale or Stock Sale, conditioned upon receipt by Agent of the Release Price
     as required above), TAC shall no longer be a "Borrower" under the Loan
     Agreement or any of the other Loan Documents and shall be fully and forever
     released from all Lender Indebtedness and all liens and security interests
     in favor of Agent against the assets of TAC shall be deemed released and
     satisfied.  In addition, in the event of any Stock Sale, the pledge by
     Nobel to Agent of Nobel's ownership interest in TAC shall be deemed
     released and satisfied with respect to that portion of such ownership
     interest being sold and Agent shall deliver at Nobel's direction all
     certificates evidencing Nobel's ownership interests in TAC previously
     delivered to Agent and being sold in connection therewith (or, if
     necessary, Agent shall accept a substitute certificate evidencing the
     ownership interest in TAC being retained by Nobel, if any).  All sums
     received by Agent in connection with this SECTION 2(B) shall be applied
                                               ------------
     one-half (1/2) to the outstanding principal balance of the Working Capital
     Credit Facilities and one-half (1/2) to the Acquisition Credit Facility.

          c.  The release of TAC as a "Borrower" and the release and
     satisfaction of the liens and security interests in favor of Agent in the
     assets of TAC in accordance with the terms and conditions of SECTION 2(B)
                                                                  ------------
     above shall be automatic and without any further action being required of
     Agent or any other Lender and Agent shall, at the sole cost and expense of
     Borrowers, execute and deliver such release statements regarding TAC's
     assets as Borrowers shall request.

          d.  The occurrence of an IPO, an Asset Sale or a Stock Sale in
     accordance with the terms and conditions of this SECTION 2  shall not
                                                      ----------
     affect or impair (i) the obligations of any of the other Borrowers to the
     Agent or Lenders or any of the Agent's or Lender's rights or remedies with
     respect to such other Borrowers or (ii) the amounts available to such other
     Borrowers under the Loans or any other rights of such Borrowers in
     connection therewith, all of which shall remain as set forth under the Loan
     Documents.

                                      -2-
<PAGE>

          e.  In the event of any IPO, (i) Borrower shall cause the annual
     audited financial statements and quarterly financial statements thereafter
     delivered to Agent pursuant to SECTIONS 11.1 AND 11.3 of the Loan Agreement
                                    ----------------------
     to be stated such that TAC is not consolidated with the other Borrowers,
     and the assets, liabilities, income and expenses of TAC shall not be
     included in the calculation of any of the financial covenants set forth in
     ARTICLE 10 of the Loan Agreement and (ii) without in any way limiting the
     ----------
     generality of the applicable provisions of the Loan Agreement, except for
     Nobel's equity interests in TAC existing immediately after the IPO, no
     Borrower shall make any investments in, or loans, advances or extensions of
     credit to, TAC.

          f.  In the event of an Asset Sale or Stock Sale, the Excess Cash Flow
     payment under SECTION 6.5 of the Loan Agreement, if any,  required in
                   -----------
     respect of the fiscal year of Borrowers during which such event occurred
     shall be reduced by an amount equal to that portion of the proceeds of the
     Release Price, if any, applied to any Acquisition Credit Facility Term
     Loan.

          g.  As used herein, the term "RELEASE PRICE" shall mean an amount
     equal to the lesser of (i) Seven Hundred Fifty Thousand Dollars
     ($750,000.00) or (ii) the Lender Indebtedness outstanding at the time of
     the consummation of any Asset Sale or Stock Sale.

     3.   SECURITY. As security for the full and timely payment and performance
          --------
of all Lender Indebtedness, TAC hereby grants to Agent, for the pro rata benefit
of Lenders, a security interest in all of the following:

          a.  All of such Borrower's present and future accounts, contract
     rights, chattel paper, instruments and documents and all other rights to
     the payment of money whether or not yet earned, for services rendered or
     goods sold, consigned, leased or furnished by such Borrower or otherwise,
     together with (i) all goods (including any returned, rejected, repossessed
     or consigned goods), the sale, consignment, lease or other furnishings of
     which shall be given or may give rise to any of the foregoing, (ii) all of
     such Borrower's rights as a consignor, consignee, unpaid vendor or other
     lien or in connection therewith, including stoppage in transit, set-off,
     detinue, replevin and reclamation, (iii) all general intangibles related
     thereto, (iv) all guaranties, mortgages, security interests, assignments,
     and other encumbrances on real or personal property, leases and other
     agreements or property securing or relating to any accounts, (v) choses-in-
     action, claims and judgments, (vi) any return or unearned premiums, which
     may be due upon cancellation of any insurance policies, and (vii) all
     products and proceeds of any of the foregoing.

          b.  All of such Borrower's present and future inventory (including but
     not limited to goods held for sale or lease or furnished or to be furnished
     under contracts for service, raw materials, work-in-process, finished goods
     and goods used or consumed in such Borrower's business) whether owned,
     consigned or held on consignment, together with all merchandise, component
     materials, supplies, packing, packaging and shipping materials, and all
     returned, rejected or repossessed goods sold, consigned, leased or
     otherwise furnished by such Borrower and all products and proceeds of any
     of the foregoing.

          c.  All of such Borrower's present and future general intangibles
     (including but not limited to tax refunds and rebates, manufacturing and
     processing rights, designs, patent rights and applications therefor,
     trademarks and registration or applications therefor, tradenames, brand
     names, logos, inventions, copyrights and all applications and registrations
     therefor), licenses, permits, approvals, software and computer programs,
     license rights, royalties, trade secrets, methods, processes, know-how,
     formulas, drawings, specifications, descriptions, label designs, plans,

                                      -3-
<PAGE>

     blueprints, patterns and all memoranda, notes and records with respect to
     any research and development, and all products and proceeds of any of the
     foregoing.

          d.  All of such Borrower's present and future machinery, equipment,
     furniture, fixtures, motor vehicles, tools, dies, jigs, molds and other
     articles of tangible personal property of every type together with all
     parts, substitutions, accretions, accessions, attachments, accessories,
     additions, components and replacements thereof, and all manuals of
     operation, maintenance or repair, and all products and proceeds of any of
     the foregoing.

          e.  All of such Borrower's present and future general ledger sheets,
     files, records, customer lists, books of account, invoices, bills,
     certificates or documents of ownership, bills of sale, business papers,
     correspondence, credit files, tapes, cards, computer runs and all other
     data and data storage systems whether in the possession of such Borrower or
     any service bureau.

          f.  All letters of credit now existing or hereafter issued naming such
     Borrower as a beneficiary or assigned to such Borrower, including the right
     to receive payment thereunder, and all documents and records associated
     therewith.

          g.  All deposits, funds, instruments, documents, policies and evidence
     and certificates of insurance, securities, chattel paper and other assets
     of such Borrower or in which such Borrower has an interest and all proceeds
     thereof, now or at any time hereafter on deposit with or in the possession
     or control of any Lender or owing by any Lender to such Borrower or in
     transit by mail or carrier to any Lender or in the possession of any other
     Person acting on any Lender's behalf, without regard to whether such Lender
     received the same in pledge, for safekeeping, as agent for collection or
     otherwise, or whether such Lender has conditionally released the same, and
     in all assets of such Borrower in which any Lender now has or may at any
     time hereafter obtain a lien, mortgage, or security interest for any
     reason.

          h.  All of such Borrower's right, title and interest in and to the
     ownership interest of any other Borrower owned by such Borrower, together
     with all cash, stock, dividends, distributions or other property paid in
     connection therewith; all securities received in addition to or in exchange
     for such ownership interest; all subscription rights with respect to such
     securities; any other distribution in respect of such securities in any
     form; and the proceeds thereof.  All such securities shall be freely
     assignable and transferrable to Agent (subject to any applicable securities
     laws), and shall be accompanied by such pledge agreements and blank
     transfer powers with signatures guaranteed as Agent may require.

          i.  All of such Borrower's investment property and financial assets
     and all proceeds thereof.

     4.   PLEDGE OF INTEREST.  As further security for the full and timely
          ------------------
payment of all Lender Indebtedness, Nobel shall grant to Agent for the pro rata
benefit of Lenders a security interest in all stock of TAC held by Nobel.  In
connection therewith,  Nobel shall execute and deliver to Agent all such
documents as Agent may require including, with out limitation, the original of
all certificates evidencing such stock.  The term "COLLATERAL", as used in the
Loan Agreement, shall hereafter be deemed to include, without limitation, all of
the additional security described in this Amendment.

     5.   FUTURE AMENDMENTS.  In the event of any amendments to the Loan
          -----------------
Agreement entered into after the date hereof solely for the purpose of adding an
additional Borrower to the Loan Agreement, all existing and future Borrowers
agree that any such future amendment shall be effective with respect to all then
existing Borrowers if only executed by the party being added as a new Borrower
pursuant thereto, with the same force and effect as if each such Borrower had
executed such future amendment.

                                      -4-
<PAGE>

     6.   ADDITIONAL DOCUMENTS.  TAC covenants and agrees to execute and deliver
          --------------------
or cause to be executed and delivered to Agent any and all documents,
agreements, corporate resolutions, certificates and opinions as Agent shall
request in connection with the execution and delivery of this Amendment or any
other documents in connection herewith, including, without limitation, an
Allonge to each of the Notes.

     7.   FURTHER AGREEMENTS AND REPRESENTATIONS.  Borrowers do hereby:
          --------------------------------------

          a.  ratify, confirm and acknowledge that the Loan Agreement, as
     amended, and the other Loan Documents continue to be and are valid, binding
     and in full force and effect;

          b.  covenant and agree to perform all obligations of Borrowers
     contained herein and under the Loan Agreement, as amended, and the other
     Loan Documents;

          c.  acknowledge and agree that Borrowers have no defense, set-off,
     counterclaim or challenge against the payment of any sums owing under Loan
     Documents, the enforcement of any of the terms of the Loan Agreement, as
     amended, or the other Loan Documents;

          d.  represent and warrant that no Event of Default or event which with
     the giving of notice or passage of time or both would constitute such an
     Event of Default exists and all information described in the foregoing
     Background is true, accurate and complete;

          e.  acknowledge and agree that nothing contained herein and no actions
     taken pursuant to the terms hereof is intended to constitute a novation of
     the Loan Agreement or any of the other Loan Documents, and does not
     constitute a release, termination or waiver of any of the rights or
     remedies granted to Agent therein, which rights and remedies are hereby
     ratified, confirmed, extended and continued as security for the obligations
     of Borrowers to Agent under the Loan Agreement and the other Loan
     Documents, including, without limitation, this Amendment; and

          f.  acknowledge and agree that any Borrower's failure to comply with
     or perform any of its covenants, agreements or obligations contained in
     this Amendment shall constitute an Event of Default under the Loan
     Agreement and each of the Loan Documents.

     8.   COSTS AND EXPENSES.  Upon execution of this Amendment, Borrowers shall
          ------------------
pay to Agent, all costs and expenses incurred by Agent in connection with the
review, preparation and negotiation of this Amendment and all documents in
connection therewith, including, without limitation, all of Agent's attorneys'
fees and out-of-pocket expenses.

     9.   INCONSISTENCIES.  To the extent of any inconsistency between the
          ---------------
terms, conditions and provisions of this Amendment and the terms, conditions and
provisions of the Loan Agreement or the other Loan Documents, the terms,
conditions and provisions of this Amendment shall prevail.  All terms,
conditions and provisions of the Loan Agreement and the other Loan Documents not
inconsistent herewith shall remain in full force and effect and are hereby
ratified and confirmed by Borrowers.

     10.  CONSTRUCTION.     All references to the Loan Agreement therein or in
          ------------
any other Loan Documents shall be deemed to be a reference to the Loan Agreement
as amended hereby.

     11.  NO WAIVER.  Nothing contained herein and no actions taken pursuant to
          ---------
the terms hereof are intended to nor shall they constitute a waiver by Agent of
any rights or remedies available to Agent at law or in equity or as provided in
the Loan Agreement or the other Loan Documents.

     12.  BINDING EFFECT.  This Amendment shall be binding upon and inure to the
          --------------
benefit of the parties hereto and their respective successors and assigns.

                                      -5-
<PAGE>

     13.  GOVERNING LAW.  This Amendment shall be governed by and construed in
          -------------
accordance with the laws of the Commonwealth of Pennsylvania.

     14.  HEADINGS.  The headings of the sections of this Amendment are inserted
          --------
for convenience only and shall not be deemed to constitute a part of this
Amendment.

                           [SIGNATURES ON NEXT PAGE]

                                      -6-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first above written.

                              NOBEL LEARNING COMMUNITIES, INC.

                              By:   _________________________________
                              Name/Title:  ____________________________

                              IMAGINE EDUCATIONAL PRODUCTS, INC.

                              By:   _________________________________
                              Name/Title:  ____________________________

                              MERRYHILL SCHOOLS, INC.

                              By:   _________________________________
                              Name/Title:  ____________________________

                              NEDI, INC.

                              By:  _________________________________
                              Name/Title:  ____________________________

                              MERRYHILL SCHOOLS NEVADA, INC.

                              By:  _________________________________
                              Name/Title:  ____________________________

                              LAKE FOREST PARK MONTESSORI SCHOOLS, INC.

                              By:  _________________________________
                              Name/Title:  ____________________________

                              PALADIN ACADEMY, L.L.C.

                              By:   _________________________________
                              Name/Title:  ____________________________

                              NOBEL EDUCATION DYNAMICS FLORIDA, INC.

                              By:   _________________________________
                              Name/Title:  ____________________________

                              THE ACTIVITIES CLUB, INC.

                              By:   ______________________________________
                              Name/Title: ________________________________

                                      -7-
<PAGE>

                              SUMMIT BANK

                              By:   ____________________________________
                              Name/Title: ________________________________

                                      -8-<PAGE>

                                                                 EXHIBIT 10.1

                       NOBEL LEARNING COMMUNITIES, INC.
                        SENIOR EXECUTIVE SEVERANCE PAY
                                PLAN STATEMENT
                                      AND
                           SUMMARY PLAN DESCRIPTION

As modified February 3, 2000
<PAGE>

                               TABLE OF CONTENTS

                                                                 PAGE
                                                                 ----

PART 1.  DEFINITIONS                                                  1
   (S)1.1          Board                                              1
   (S)1.2          Change in Control                                  1
   (S)1.3          Company                                            3
   (S)1.4          Eligible Employee                                  3
   (S)1.5          Employer                                           3
   (S)1.6          Monthly Pay                                        3
   (S)1.7          Plan                                               3
   (S)1.8          Plan Administrator                                 3
   (S)1.9          Plan Statement                                     3
   (S)1.10         Plan Year                                          4
   (S)1.11         Termination Event                                  4
   (S)1.12         Years of Service                                   4
   (S)1.13         Cause                                              4

PART 2.  PARTICIPATION                                                4
   (S)2.1          Commencement of Participation                      4
   (S)2.2          Eligibility for Severance Benefits                 4

PART 3.  SEVERANCE BENEFITS; FUNDING                                  5
   (S)3.1          Severance Benefits                                 5
   (S)3.2          Plan Not Funded                                    6
   (S)3.3          Limitations Concerning Excess Parachute Payments   6

PART 4.  FORM AND TIMING OF SEVERANCE PAYMENTS                        7
   (S)4.1          Severance Allowance                                7
   (S)4.2          Bonus                                              7
   (S)4.3          Payments After Death                               7

PART 5.  OTHER PLAN FEATURES                                          7
   (S)5.1          Assignment of Benefit Prohibited                   7
   (S)5.2          Claims and Controversies                           7
   (S)5.3          Amendment or Termination of Plan                   9

PART 6.  ADDITIONAL INFORMATION                                       9
   (S)6.1          Type of Plan                                       9
   (S)6.2          Plan Sponsor                                       9
   (S)6.3          Plan Administrator                                 9

                                       i-
<PAGE>

   (S)6.4          Service of Legal Process                           9
   (S)6.5          Governing Law                                      9
   (S)6.6          Severability                                      10
   (S)6.7          Entire Agreement                                  10
   (S)6.8          Successor Employer                                10

                                      ii-
<PAGE>

                       NOBEL LEARNING COMMUNITIES, INC.
                            EXECUTIVE SEVERANCE PAY
                                 PLAN STATEMENT
                                      AND
                            SUMMARY PLAN DESCRIPTION

          Effective as of January 3, 2000, and as thereafter from time to time
amended, Nobel Learning Communities, Inc. (the "Company"), a Delaware
corporation, has established the "Nobel Learning Communities, Inc. Executive
Severance Pay Plan" (hereinafter referred to as the "Plan") for the benefit of
Eligible Employees.  The terms of the Plan are set forth in this document and
they entirely supersede and replace all prior severance plans, rules and
policies regarding severance benefits.  The Plan is not intended to alter any
contractual rights to severance which may exist under a written employment
agreement with the Company. This document is intended to give participants an
easily understood explanation of the major features of the Plan.

          The Plan provides severance benefits on account of a Termination Event
with respect to an Eligible Employee.  All payments will be made from the
general corporate assets of the Company or an affiliated employer.

                              PART 1.  DEFINITIONS

          When the following terms are used in this document with initial
capital letters, they shall have the following meanings:

           (S)1.1      Board - the Board of Directors of the Company.
                       -----

           (S)1.2      Change in Control - a "Change in Control" shall be deemed
                       -----------------
to have taken place if:

                  (a) any person, including a group, becomes the beneficial
owner of shares of the Company having 50 percent or more of the total number of
votes that may be cast for the election of directors of the Company;

                  (b) any person, including a group, becomes the beneficial
owner of shares of the Company having 35 percent or more of the total number of
votes that may be cast for the election of directors of the Company, unless such
person's acquisition of such percentage of stock has been approved by at least
two-thirds of the directors in office on the date immediately preceding the date
such percentage ownership is first attained (other than Excluded Members);
<PAGE>

                  (c) there occurs any cash tender or exchange offer for shares
of the Company, merger or other business combination, or sale of assets, or any
combination of the foregoing transactions, and as a result of or in connection
with any such event persons who were directors of the Company before the event
shall cease to constitute a majority of the Board or of the board of directors
of any successor to the Company; or

                  (d) at any date ("Reference Date"), 50 percent or more of the
members of the Board consists of persons other than (i) persons who were members
of the Board two years prior to the Reference Date (other than Excluded Members)
and (ii) Approved Members.

          For purposes of subsections (b) and (d) above, (i) an "Approved
Member" shall mean any director (other than an Excluded Member) whose election
by the Board or nomination for election by the stockholders of the Company was
approved by a vote of at least two-thirds of the directors in office on the date
of approval who either were directors (A) on the date two years prior to the
Reference Date or (B) who had previously become Approved Members; and (ii) an
"Excluded Member" is any director (A) designated or nominated by, or affiliated
with, a person who has entered into an agreement with the Company to effect a
transaction described in subsection (c) above, or (B) who initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 under the Securities Exchange Act of 1934 (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
contests by or on behalf of a person other than the Board (a "Proxy Contest"),
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest.

          As used in this Section 1.2, the terms "person" and "beneficial owner"
have the same meanings as such terms under section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder.

          If a Change in Control occurs (as defined in any subsection of this
Section 1.2), and prior to the date an Eligible Employee experiences a
Termination Event, a Change in Control (also as defined in any subsection of
this Section 1.2) again occurs, the determination of the entitlement of such
Eligible Employee to benefits hereunder shall be made by reference to the Change
in Control event that results in the largest benefit hereunder; provided,
however, that the Plan Administrator shall be determined by reference to the
first Change in Control event which occurs in the two-year period prior to the
date of the participant's Termination Event.  A Change in Control shall be
deemed to occur upon satisfaction of any subsection of this Section 1.2
irrespective of prior events constituting a Change in Control (e.g., if a person
becomes the beneficial owner of shares of the Company having 35 percent or more
of the total number of votes that may be cast for the election of directors of
the Company without such acquisition being approved by the requisite members of
the Board and later the same person becomes the beneficial owner of shares of
the Company having 50 percent or more of the total number of votes that may be
cast for the election of directors of the Company, and later the same person
causes new individuals to be elected to the board so the threshold described in
subsection (d) of this Section 1.2 is satisfied, then there shall be deemed to
be a Change in Control on the date that each of such three events occurs).

                                       2-
<PAGE>

          (S)1.3       Company - Nobel Learning Communities, Inc., a Delaware
                       -------
corporation.

          (S)1.4       Eligible Employee - Any employee who is designated by the
                       -----------------
CEO and approved by the Compensation Committee of the Board of Directors of the
Company to be a participant in this Plan, and who executes the release and
waiver of claims in the form attached to this Plan.

          (S)1.5       Employer - the Company and any corporation which is a
                       --------
member of a controlled group (as defined in section 414(c) of the Internal
Revenue Code of 1986, as amended (the "Code")) which includes the Company.

          (S)1.6       Monthly Pay - one-twelfth of your highest base salary
                       -----------
rate (excluding bonus payments, overtime and any other extra payments or
benefits) from the Employer which is in effect in the calendar year in which a
Change in Control occurs (annualized on the basis of a 52-week year).

          (S)1.7       Plan - the severance pay plan of the Company established
                       ----
for the benefit of Eligible Employees.  (As used herein, "Plan" refers to the
program established by the Company and not the document pursuant to which the
Plan is maintained.  That document is referred to herein as the "Plan
Statement.").  The Plan shall be referred to as the "Nobel Learning Communities,
Inc. Executive Severance Pay Plan."

          (S)1.8       Plan Administrator - the Company's Compensation Committee
                       ------------------
as it is constituted on the date preceding the date of a Change in Control;
provided, however, that should a majority of the members of such Committee
refuse to so serve following a Change in Control, the Plan Administrator shall
be a person or committee appointed by the Board and approved by at least 51
percent of the Plan participants; and further provided, that should the Company
and 51 percent of the Plan participants fail to agree on such a successor Plan
Administrator, the Plan Administrator shall be appointed by the arbitrators
acting pursuant to Section 5.2(c).  The Plan Administrator shall have the
responsibility, power, authority and discretion to supervise and control the
operation of the Plan in accordance with the terms of the Plan Statement.  The
Plan Administrator shall be the "named fiduciary" of the Plan within the meaning
of section 402 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").  If the Plan Administrator is a committee, a majority of the
members of such committee shall constitute a quorum for the transaction of
business related to the Plan.  All resolutions or other actions taken by such
committee at any meeting shall be by vote of the majority of members of such
committee.  Resolutions may be adopted or other action taken without a meeting
upon written consent signed by all members of such committee.

          (S)1.9       Plan Statement - this document entitled "Nobel Learning
                       --------------
Communities, Inc. Executive Severance Pay Plan Statement and Summary Plan
Description" as adopted by the Company, effective as of January 3, 2000, as the
same may be amended from time to time thereafter.

                                       3-
<PAGE>

           (S)1.10     Plan Year - the 12-consecutive month period beginning on
                       ---------
any January 1 and ending on the following December 31.

           (S)1.11     Termination Event - an event described in Section 2.2(b).
                       -----------------

           (S)1.12     Years of Service - the number of 12-month periods
                       ----------------
beginning on your first day of work with the Employer and ending on the date a
Termination Event occurs; provided, however, if you incur a break in service of
longer than two months in any such 12-month period, such 12-month period shall
not count as a Year of Service.  If you work at least 10 months in any such 12-
month period, you will receive credit for one Year of Service.  Partial Years of
Service shall be disregarded.

           (S)1.13     Cause - "Cause" for purposes of the Plan is defined as
                       -----
follows: deliberate acts of dishonesty; documented willful and deliberate
insubordination; conduct endangering the welfare of a Nobel student; or
conviction of a felony.

                              PART 2.  PARTICIPATION

           (S)2.1      Commencement of Participation - You become a  participant
                       -----------------------------
in the Plan on the date you become an Eligible Employee.

           (S)2.2      Eligibility for Severance Benefits -
                       ----------------------------------

                  (a) In General.  You are eligible to receive severance
                      ----------
benefits under the Plan if you experience a Termination Event on or after the
date you become a participant in the Plan.

                  (b) Termination Event.  A Termination Event occurs if you
                      -----------------
cease to be employed by the Employer for any of the reasons set forth in (1),
(2) or (3) below (provided that clause (3) shall not apply in the case of a
Change in Control only by virtue of Section 1.2(b)):

                      (1) the Employer terminates your employment involuntarily
                          for reasons other than Cause within eighteen (18)
                          months following a Change in Control; or

                      (2) you terminate employment with the Employer within
                          eighteen (18) months following a Change in Control as
                          a result of any of the following events occurring
                          after such Change in Control:

                          (A) the duties of your position are materially and
                              adversely changed from such duties as they

                                       4-
<PAGE>

                              existed immediately prior to the Change in
                              Control;

                          (B) your compensation plan is reduced as compared to
                              your compensation plan immediately prior to the
                              Change in Control (provided, however, that
                              severance pay shall not be considered
                              "compensation" for purposes of this subparagraph);
                              or

                          (C) the Employer requires you to be based at any
                              office which is more than 25 miles further from
                              your residence on the date such requirement is
                              imposed than the Employer's location on the day
                              before a Change in Control (other than travel
                              reasonably required in the performance of your
                              responsibilities); or

                       (3) prior to the date which is one month following the
                           date of a Change in Control, you terminate
                           voluntarily your employment with the Employer for any
                           reason (or give the Employer notice thereof).

Provided, however, that a Termination Event shall not be deemed to have occurred
-----------------
under this Section 2.2(b) if your employment with the Employer is involuntarily
terminated, but  (A) prior to the date which is seven days after such
termination, you are offered employment by the buyer of the entire (or
substantially all of the) business of the Company following a sale or
divestiture by the Company of such business, on terms which if such employment
continued with the Employer, would not give you the right to severance benefits
under Section 2.2(b)(2), and you do not accept such employment, and (B) such
successor has assumed all Plan liabilities as required by Section 6.8.

                     PART 3.  SEVERANCE BENEFITS; FUNDING

          (S)3.1       Severance Benefits - If you experience a Termination
                       ------------------
Event, your severance benefits are as follows, subject to Section 3.3:

                  (a) Severance Allowance.  The Employer will pay you a
                      -------------------
severance allowance equal to your Monthly Pay multiplied by twelve plus:
                                                                   ----

                      (1) if you have not completed three Years of Service as of
                          the date a Termination Event occurs, your Monthly Pay

                                       5-
<PAGE>

                          multiplied by the number of Years of Service you have
                          completed as of the date a Termination Event occurs;
                          or

                      (2) if you have completed at least three Years of Service
                          as of the date a Termination Event occurs, your
                          Monthly Pay multiplied by two times the number of
                          Years of Service you have completed as of the date a
                          Termination Event occurs, provided, however, that the
                                                    -----------------
                          maximum aggregate severance allowance shall not exceed
                          your Monthly Pay multiplied by 35.99.

                      (3) if you have completed at least five Years of Service
                          as of the date a Termination Event occurs, your
                          monthly pay multiplied by 2.99 times the number of
                          Years of Service you have completed as of the date a
                          Termination Event occurs, provided, however, that the
                                                    -----------------
                          maximum aggregate severance allowance under this
                          Section 3.1(a) shall not exceed your Monthly Pay
                          multiplied by 35.99.

                  (b) Bonus.  The Employer will pay you the bonus, if any, that
                      -----
you would have received had you been employed by the Employer on the day on
which, absent this provision, you would have had to have been employed to
receive a bonus for the bonus period in which the Termination Event occurs,
prorated for the portion of the bonus period occurring prior to your Termination
Event.

                  (c) Vacation Days.  The Employer will pay you the cash-value
                      -------------
of the vacation days to which you are entitled, but which you have not used, on
the day before the Termination Event occurs.

                  (d) Medical and Group Term Life Insurance.  The Employer will
                      -------------------------------------
provide you the medical insurance and group term life insurance that you were
entitled to on the day before a Change in Control occurs, for a period beginning
with the date a Termination Event occurs and continuing over the number of
months of Monthly Pay determined under subsection (a) (i.e., a maximum of 35.99
                                                       ----
months).

          (S)3.2       Plan Not Funded - The Employer will not make any
                       ---------------
contributions to fund this Plan.  Any severance payments made pursuant to the
Plan will be paid out of the general funds of the Employer, and as a
participant, you will not have any secured or preferred interest by way of
trust, escrow, lien or otherwise in any specific assets.  As a participant, your
rights shall be solely those of an unsecured general creditor of the Employer.

          (S)3.3       Limitations Concerning Excess Parachute Payments.  This
                       ------------------------------------------------
Section shall be interpreted and applied to limit amounts otherwise payable to
an Eligible Employee under the

                                       6-
<PAGE>

Plan only to the extent required to avoid any material risk of the imposition of
excise taxes on the Eligible Employee under section 4999 of the Code, or the
disallowance of a deduction to the Employer under section 280G(a) of the Code.
Notwithstanding any other provision of the Plan, severance benefits payable
under Section 3.1 of the Plan, to the extent they are parachute payments (as
defined in section 280G(b)(2) of the Code), shall be modified to the extent
necessary so that the aggregate present value (as defined in section 280G(d)(4)
of the Code) of such parachute payments payable under the Plan and any other
parachute payments (as defined in section 280G(b)(2) of the Code) payable
pursuant to any other plan or agreement between the Eligible Employee and the
Employer shall be at least one dollar less than three times the Eligible
Employee's base amount (as defined in section 280G(b)(3) of the Code).

                 PART 4.  FORM AND TIMING OF SEVERANCE PAYMENTS

          (S)4.1       Severance Allowance - Your severance allowance under
                       -------------------
Section 3.1(a) will normally be paid to you in a lump sum payment within 30 days
following a Termination Event.  The Plan Administrator may, however, modify the
method of payment to installments coincident with normal payroll cycles, if the
Plan Administrator, in its sole discretion, determines that the Company's cash
resources are insufficient to make a lump sum payment.  In no event, however,
shall the Plan Administrator delay payment or modify the method of payment
solely on account of your request to do so.

          (S)4.2       Bonus - Your bonus, if any, under Section 3.1(b) will be
                       -----
paid to you in a lump sum payment on the date the bonus would have been paid to
you had you remained employed by the Employer.

          (S)4.3       Payments After Death - If severance allowance (under
                       --------------------
Section 3.1(a)) and/or bonus (under Section 3.1(b)) remains unpaid at your
death, the remaining amount will be paid in a lump sum to the beneficiary you
most recently designated with respect to the Plan.  In the event no such
beneficiary has been designated or survives you, your most recent beneficiary
designation with respect to the group term life insurance provided by the
Employer shall govern.

                          PART 5.  OTHER PLAN FEATURES

          (S)5.1       Assignment of Benefit Prohibited - No severance benefits
                       --------------------------------
under this Plan shall be subject in any manner to anticipation, alienation,
assignment (either at law or in equity), encumbrance, garnishment, levy,
execution or other legal or equitable process.

          (S)5.2       Claims and Controversies - Benefits will be paid from the
                       ------------------------
Plan to you, your personal representative or beneficiary only after a proper
written claim for the benefits has been filed with the Plan Administrator.  If
you believe you may be entitled to benefits, or if you are in disagreement with
any determination that has been made, follow the following procedure:

                                       7-
<PAGE>

          (a) Making a Claim. Your claim must be written and must be delivered
              --------------
to the Plan Administrator. Within 30 days after you deliver your claim, you will
receive a decision. If your claim is wholly or partially denied, you will
receive a written notice specifying: (i) the reasons for denial; (ii) the Plan
provisions on which the denial is based; and (iii) any additional information
needed from you in connection with the claim and the reason such information is
needed. You also will receive a copy of paragraph (b) below concerning your
right to request a review.

          (b) Requesting Review of a Denied Claim. You may request that a denied
              -----------------------------------
claim be reviewed.  Your request for review must be written and must be
delivered to the Plan Administrator within 60 days after you receive the written
notice that your claim was denied. Your request for review may (but is not
required to) include issues and comments you want considered in the review.  You
may examine pertinent Plan documents by asking the Plan Administrator.  Within
30 days after you deliver your request for review, you will receive a decision.
The decision will be in writing and will specify the Plan provisions on which it
is based.

          (c) Arbitration. In the event any controversy or claim arising out of
              -----------
or relating to the Plan or the breach, termination or validity thereof is not
resolved pursuant to subsection (a) or subsection (b), such controversy or claim
shall be settled by arbitration by one arbitrator in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators
may be entered by any court having jurisdiction thereof.

          (d) In General. This Section 5.2 shall be the sole method in which
              ----------
controversies or claims under this Plan shall be determined.  All decisions on
claims and on review of denied claims under subsections (a) and (b) will be made
by the Plan Administrator.  The Plan Administrator may, in its discretion, hold
one or more hearings.  If you do not receive a decision within the specified
time, you should assume your claim was denied or re-denied on the date the
specified time expired.  You may have an attorney or other representative act on
your behalf.  The Plan Administrator shall have the sole discretion to carry out
its duties under the Plan, to construe and interpret the provisions of the Plan,
and to determine all questions concerning benefit entitlement, including the
power to construe and determine disputed or doubtful terms.  To the maximum
extent permissible under law, the Plan Administrator's determinations on all
such matters shall be final and binding on all persons involved.

          If your claim is denied under Section 5.2(a), and approved on appeal
under Section 5.2(b) or pursuant to arbitration under Section 5.2(c), the
Company (i) will pay your legal fees associated with the claim, appeal and
arbitration, (ii) will pay you interest on the severance benefits payable under
subsections (a), (b) and (c) of Section 3.1, at the prime rate stated in The
                                                                         ---
Wall Street Journal on the date of your Termination Event, and over the period
-------------------
ending on the date payment is made and beginning (A) with respect to benefits
payable pursuant to Section 3.1(a) and (c), on the date of your Termination
Event, and (B) with respect to any bonus payable pursuant to Section 3.1(b), on
the date the bonus would have been paid to you had you continued to be employed
by the

                                       8-
<PAGE>

Employer, and (iii) will reimburse you or your beneficiary(ies) for, and pay to
your beneficiary(ies) any medical and group term life insurance benefits,
respectively, which would have been reimbursed or paid had your medical and
group term life insurance benefits been provided in accordance with Section
3.1(d) on and after the date of your Termination Event.

          (S)5.3       Amendment or Termination of Plan -The Company, by written
                       --------------------------------
action of the Board, reserves the right to amend the Plan and the provisions of
the Plan Statement or to terminate the Plan at any time; provided, however, that
                                                         -----------------
for a period of eighteen months following a Change in Control, no such amendment
or termination shall impair your rights under the Plan.

                        PART 6.  ADDITIONAL INFORMATION

          (S)6.1       Type of Plan - The Plan is a severance pay welfare
                       ------------
benefit plan which is intended to be a plan solely covering a select group of
management or highly compensated employees within the meaning of section 201(2)
of ERISA and the regulations issued thereunder. The Plan is not a pension
benefit plan.  The Plan and its records are kept on a Plan Year basis, January 1
through December 31.

          (S)6.2       Plan Sponsor - The name of the employer sponsoring the
                       ------------
Plan and its federal employer identification number ("EIN") are:

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

                          Telephone:  (610-691-8200)

                               EIN:  22-2465204

          (S)6.3       Plan Administrator - The Plan is administered by the Plan
                       ------------------
Administrator. Communications addressed to the Plan Administrator should be sent
to the address listed in Section 6.2.

          (S)6.4       Service of Legal Process - The General Counsel of the
                       ------------------------
Company, or should there be no General Counsel, the President of the Company, is
designated as agent for service of legal process against the Plan.

          (S)6.5       Governing Law - The law of the Commonwealth of
                       -------------
Pennsylvania shall be the controlling state law in all matters relating to the
Plan and shall apply to the extent it is not preempted by the ERISA.

                                       9-
<PAGE>

          (S)6.6       Severability - If any provision of the Plan Statement
                       ------------
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision, and the Plan Statement shall be construed
and enforced as if such provision had not been included.

          (S)6.7       Entire Agreement - This Plan Statement contains the
                       ----------------
entire agreement by the Employer with respect to the subject matter hereof.  No
modification or claim of waiver of any of the provisions hereof shall be valid
unless in writing and signed by the party against whom such modification or
waiver is sought to be enforced.

          (S)6.8       Successor Employer - In the event of the dissolution,
                       ------------------
merger, consolidation, or reorganization of the Company, or the sale of the
entire (or substantially all of the) business of the Company, the Plan shall be
continued by the Company's successor.  The successor shall assume all Plan
liabilities and shall have the powers, duties and responsibilities of the
Company under the Plan.

          IN WITNESS WHEREOF, Nobel Learning Communities, Inc. has caused this
Plan Statement to be duly executed this ____ day of ________________________,
2000.

Attest:                      NOBEL LEARNING COMMUNITIES, INC.

_________________________    By:______________________________
Secretary                                 Chairman

                                      10-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]