Document:

Exhibit 10.2

 

	
  Committed Line Of Credit Note

  	
  

  

 

	
  $6,000,000

  	
   

  	
  October 1, 2008

  

 

FOR VALUE RECEIVED, NEW HORIZONS WORLDWIDE, INC. (the “Borrower”),
with an address at 1 West Elm Street, Suite 125, Conshohocken, PA,  19428, promises to pay to the order of PNC BANK,  NATIONAL ASSOCIATION (the
“Bank”), in lawful money of the United
States of America in immediately available funds at its offices located at 1600
Market Street, 22nd Floor, Philadelphia, PA 19103, or at such other
location as the Bank may designate from time to time, the principal sum of SIX MILLION DOLLARS ($6,000,000) (the “Facility”)
or such lesser amount as may be advanced to or for the benefit of the Borrower
hereunder, together with interest accruing on the outstanding principal balance
from the date hereof, all as provided below.

 

1.             Advances.  The Borrower may request advances, repay and request
additional advances hereunder until the Expiration Date, subject to the terms
and conditions of this Note and the Loan Documents (as hereinafter defined).  The “Expiration
Date” shall mean September 30, 2011, or such later date as may
be designated by the Bank by written notice from the Bank to the Borrower.  The Borrower acknowledges and agrees that in
no event will the Bank be under any obligation to extend or renew the Facility
or this Note beyond the Expiration Date. 
The Borrower may request advances hereunder upon giving oral or written
notice to the Bank by 1:00 p.m. (Philadelphia, Pennsylvania time) (a) on
the day of the proposed advance, in the case of advances to bear interest under
the Base Rate Option (as hereinafter defined) and (b) three (3) Business
Days prior to the proposed advance, in the case of advances to bear interest
under the LIBOR Option (as hereinafter defined), followed promptly thereafter
by the Borrower’s written confirmation to the Bank of any oral notice.  The aggregate unpaid principal amount of
advances under this Note shall not exceed the face amount of this Note.

 

2.             Rate of Interest.  Each advance outstanding under this Note will
bear interest at a rate or rates per annum as may be selected by the Borrower
from the interest rate options set forth below (each, an “Option”):

 

(i)            Base Rate Option.  A rate of interest per annum which is at all
times equal to the Prime Rate (“Base Rate”).  For purposes hereof, the term “Prime Rate” shall mean the rate publicly
announced by the Bank from time to time as its prime rate.  The Prime Rate is determined from time to
time by the Bank as a means of pricing some loans to its borrowers.  The Prime Rate is not tied to any external
rate of interest or index, and does not necessarily reflect the lowest rate of
interest actually charged by the Bank to any particular class or category of
customers.  If and when the Prime Rate
changes, the rate of interest with respect to any advance to which the Base
Rate Option applies will change automatically without notice to the Borrower,
effective on the date of any such change. 
There are no required minimum interest periods for advances bearing
interest under the Base Rate Option.

 

 

(ii)           LIBOR Option.  A rate per annum equal to (A) LIBOR plus (B) two
and one-quarter percent (2.25%), for the applicable LIBOR Interest Period.

 

For purposes hereof, the
following terms shall have the following meanings:

 

“Business Day”
shall mean any day other than a Saturday or Sunday or a legal holiday on which
commercial banks are authorized or required by law to be closed for business in
Philadelphia, Pennsylvania.

 

“LIBOR” shall
mean, with respect to any advance to which the LIBOR Option applies for the
applicable LIBOR Interest Period, the interest rate per annum determined by the
Bank by dividing (the resulting quotient rounded upwards, if necessary, to the
nearest 1/16th of 1%) (i) the rate of interest determined by the Bank in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the eurodollar rate two (2) Business Days
prior to the first day of such LIBOR Interest Period for an amount comparable
to such advance and having a borrowing date and a maturity comparable to such
LIBOR Interest Period by (ii) a number equal to 1.00 minus the LIBOR
Reserve Percentage.

 

“LIBOR Interest Period”
shall mean, as to any advance to which the LIBOR Option applies, the period of
one (1), two (2), three (3) or six (6) months as selected by the
Borrower in its notice of borrowing or notice of conversion, as the case may
be, commencing on the date of disbursement of an advance (or the date of
conversion of an advance to the LIBOR Option, as the case may be) and each
successive period selected by the Borrower thereafter; provided  that,
(i) if a LIBOR Interest Period would end on a day which is not a Business
Day, it shall end on the next succeeding Business Day unless such day falls in
the next succeeding calendar month in which case the LIBOR Interest Period
shall end on the next preceding Business Day, (ii) the Borrower may not
select a LIBOR Interest Period that would end on a day after the Expiration
Date, and (iii) any LIBOR Interest Period that begins on the last Business
Day of a calendar month (or a day for which there is no numerically
corresponding day in the last calendar month of such LIBOR Interest Period)
shall end on the last Business Day of the last calendar month of such LIBOR
Interest Period.

 

“LIBOR Reserve Percentage”
shall mean the maximum effective percentage in effect on such day as prescribed
by the Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as “Eurocurrency liabilities”).

 

LIBOR shall be adjusted with
respect to any advance to which the LIBOR Option applies on and as of the
effective date of any change in the LIBOR Reserve Percentage.  The Bank shall give prompt notice to the
Borrower of LIBOR as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.

 

If the Bank reasonably
determines (which determination shall be final and conclusive) that, by reason
of circumstances affecting the eurodollar market generally, deposits in dollars
(in the 

 

2

 

applicable amounts) are not
being offered to banks in the eurodollar market for the selected term, or
adequate means do not exist for ascertaining LIBOR, then the Bank shall give
notice thereof to the Borrower. 
Thereafter, until the Bank notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, (a) the availability of
the LIBOR Option shall be suspended, and (b) the interest rate for all
advances then bearing interest under the LIBOR Option shall be converted at the
expiration of the then current LIBOR Interest Period(s) to the Base Rate.

 

In addition, if, after the
date of this Note, the Bank shall reasonably determine (which determination
shall be final and conclusive) that any enactment, promulgation or adoption of
or any change in any applicable law, rule or regulation, or any change in
the interpretation or administration thereof by a governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Bank to make or maintain or fund loans based on LIBOR, the Bank shall notify
the Borrower.  Upon receipt of such
notice, until the Bank notifies the Borrower that the circumstances giving rise
to such determination no longer apply, (a) the availability of the LIBOR
Option shall be suspended, and (b) the interest rate on all advances then
bearing interest under the LIBOR Option shall be converted to the Base Rate
either (i) on the last day of the then current LIBOR Interest Period(s) if
the Bank may lawfully continue to maintain advances based on LIBOR to such day,
or (ii) immediately if the Bank may not lawfully continue to maintain
advances based on LIBOR.

 

The foregoing
notwithstanding, it is understood that the Borrower may select different
Options to apply simultaneously to different portions of the advances and may
select up to three (3) different interest periods to apply simultaneously
to different portions of the advances bearing interest under the LIBOR
Option.  Interest hereunder will be
calculated based on the actual number of days that principal is outstanding
over a year of 360 days. In no event will the rate of interest hereunder exceed
the maximum rate allowed by law. 
Notwithstanding the foregoing, no LIBOR Option or LIBOR Interest Period
may be selected after the occurrence and during the continuation of an Event of
Default (as hereinafter defined).

 

3.             Interest Rate Election.  Subject to the terms and conditions of this
Note, at the end of each interest period applicable to any advance, the
Borrower may renew the Option applicable to such advance or convert such advance
to a different Option; provided  that, during any period in which
any Event of Default (as hereinafter defined) has occurred and is continuing,
any advances bearing interest under the LIBOR Option shall, at the Bank’s sole
discretion, be converted at the end of the applicable LIBOR Interest Period to
the Base Rate and the LIBOR Option will not be available to Borrower with
respect to any new advances (or with respect to the conversion or renewal of
any existing advances) until such Event of Default has been cured by the
Borrower or waived by the Bank.  The
Borrower shall notify the Bank of each election of an Option, each conversion
from one Option to another, the amount of the advances then outstanding to be
allocated to each Option and, where relevant, the interest periods
therefor.  In the case of converting to
the LIBOR Option, such notice shall be given at least three (3) Business
Days prior to the commencement of any LIBOR Interest Period.  If no interest period is specified in any
such notice for which the resulting advance is to bear interest under the LIBOR
Option, the Borrower shall be deemed to have selected a LIBOR Interest Period
of one month’s duration.  If 

 

3

 

no
notice of election, conversion or renewal is timely received by the Bank with
respect to any advance, the Borrower shall be deemed to have selected the Base
Rate Option.  Any such election shall be
promptly confirmed in writing by such method as the Bank may require.

 

4.             Advance Procedures.  A request for advance made by telephone must
be promptly confirmed in writing by such method as the Bank may require.  The Borrower authorizes the Bank to accept
telephonic requests for advances, and the Bank shall be entitled to rely upon
the authority of any Authorized Officer (as defined in the Loan Agreement)
providing such instructions.  The
Borrower hereby indemnifies and holds the Bank harmless from and against any
and all damages, losses, liabilities and reasonable out-of-pocket costs and
expenses (including fees and expenses) which may arise or be created by the
acceptance of such telephone requests or making such advances; provided,
however, that the foregoing indemnity shall not apply to any claims,
damages, losses, liabilities or expenses to the extent attributable to Bank’s
gross negligence or willful misconduct. 
The Bank will enter on its books and records, which entry when made will
be presumed correct, the date and amount of each advance, the interest rate and
interest period applicable thereto, as well as the date and amount of each
payment.

 

5.             Payment Terms.  The Borrower shall pay accrued interest on
the unpaid principal balance of this Note in arrears:  (a) for the portion of advances bearing
interest under the Base Rate Option, on the last day of each month during the
term hereof, commencing on October 31, 2008, (b) for the portion of
advances bearing interest under the LIBOR Option, on the last day of the
respective LIBOR Interest Period for such advance, (c) if any LIBOR
Interest Period is longer than three (3) months, then also on the three (3)
month anniversary of such interest period and every three (3) months
thereafter, and (d) for all advances, at maturity, whether by acceleration
of this Note or otherwise, and after maturity, on demand until paid in
full.  All outstanding principal and
accrued interest hereunder shall be due and payable in full on the Expiration
Date.

 

If any payment under this
Note shall become due on a Saturday, Sunday or public holiday under the laws of
the Commonwealth of Pennsylvania (the “Commonwealth”),
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in computing interest in connection with
such payment.  The Borrower hereby
authorizes the Bank to charge the Borrower’s deposit account at the Bank for
any payment when due hereunder. Payments received will be applied to charges,
fees and reasonable out-of-pocket expenses (including attorneys’ fees), accrued
interest and principal in any order the Bank may choose, in its sole
discretion.

 

6.             Late Payments; Default Rate.  If the Borrower fails to make any payment of
principal, interest or other amount coming due pursuant to the provisions of
this Note within fifteen (15) calendar days of the date due and payable, the
Borrower also shall pay to the Bank a late charge equal to the lesser of five
percent (5%) of the amount of such payment or $100.00 (the “Late Charge”).  Such fifteen (15) day period shall not be
construed in any way to extend the due date of any such payment.  Upon maturity, whether by acceleration,
demand or otherwise, and following written notice provided to the Borrower, at
the Bank’s option upon the occurrence of any Event of Default (as hereinafter
defined) and during the continuance thereof, each advance outstanding under
this Note shall bear interest at a rate per annum (based on the actual number
of days that principal is outstanding over a year of 360 days) which shall
be three percentage points (3%) 

 

4

 

in
excess of the  interest rate in
effect from time to time under this Note but not more than the maximum rate
allowed by law (the “Default Rate”).  The Default Rate shall continue to apply
whether or not judgment shall be entered on this Note.  Both the Late Charge and the Default Rate are
imposed as liquidated damages for the purposes of defraying the Bank’s expenses
incident to the handling of delinquent payments, but are in addition to, and
not in lieu of, the Bank’s exercise of any rights and remedies hereunder, under
the other Loan Documents or under applicable law, and any fees and expenses of
any agents or attorneys which the Bank may employ.  In addition, the Default Rate reflects the
increased credit risk to the Bank of carrying a loan that is in default.  The Borrower agrees that the Late Charge and
Default Rate are reasonable forecasts of just compensation for anticipated and
actual harm incurred by the Bank, and that the actual harm incurred by the Bank
cannot be estimated with certainty and without difficulty.

 

7.             Prepayment.  The Borrower shall have the right to prepay
any advance hereunder at any time and from time to time, in whole or in part;
subject, however, to payment of any break funding indemnification amounts owing
pursuant to paragraph 8 below.

 

8.             Yield Protection; Break Funding
Indemnification.  Without duplicating the Borrower’s
obligations under the Loan Agreement, within ten (10) days following
receipt by the Borrower of written demand from the Bank, together with
computations (in reasonable detail) therefor, the Borrower shall pay to the
Bank an amount sufficient to fairly compensate the Bank for any unforeseen
increase in its costs to provide the Loan or decrease in its return on the
Loan, which increase or decrease, as the case may be, is directly attributable
to, subsequent to the date hereof, a change in law or regulation, or the
official interpretation and enforcement thereof, imposing any reserve, deposit,
allocation of capital, or similar requirement (including without limitation,
any such subsequent change to Regulation D of the Board of Governors of the
Federal Reserve System) on the Bank, its holding company or any of their
respective assets.  In addition, the Borrower
agrees to indemnify the Bank against any liabilities, losses or expenses
(including, without limitation, loss of margin, any loss or expense sustained
or incurred in liquidating or employing deposits from third parties, and any
loss or expense incurred in connection with funds acquired to effect, fund or
maintain any advance (or any part thereof) bearing interest under the LIBOR
Option which the Bank sustains or incurs as a consequence of either (i) the
Borrower’s failure to make a payment on the due date thereof, (ii) the
Borrower’s revocation (expressly, by later inconsistent notices or otherwise)
in whole or in part of any notice given to Bank to request, convert, renew or
prepay any advance bearing interest under the LIBOR Option, or (iii) the
Borrower’s payment or prepayment (whether voluntary, after acceleration of the
maturity of this Note or otherwise) or conversion of any advance bearing
interest under the LIBOR Option on a day other than the last day of the
applicable LIBOR Interest Period.  A
notice as to any amounts payable pursuant to this paragraph given to the
Borrower by the Bank shall, in the absence of manifest error, be conclusive and
shall be payable upon demand. The Borrower’s indemnification obligations
hereunder shall survive the payment in full of the advances and all other
amounts payable hereunder.

 

9.             Other Loan Documents.  This Note is issued in connection with a Loan
Agreement dated as of October 1, 2008 between the Borrower and the Bank
(the “Loan Agreement”), the
Security Agreement dated as of October 1, 2008 made by Borrower in favor
of Bank, and the other agreements and documents executed and/or delivered in
connection therewith or referred to 

 

5

 

therein,
the terms of which are incorporated herein by reference (as amended, modified
or renewed from time to time, collectively the “Loan Documents”), and is secured by the property (if any)
described in the Loan Documents and by such other collateral as previously may
have been or may in the future be granted to the Bank to secure this Note.

 

10.          Events of Default.  The occurrence of any of the following events
will be deemed to be an “Event of Default”
under this Note:  (i) the nonpayment
of any principal when due or the nonpayment of any interest or other
indebtedness under this Note within five (5) days after the date when due;
(ii) the occurrence of any event of default or any default and the lapse
of any notice or cure period, or any Obligor’s failure to observe or perform
(after giving effect to any notice or cure period) any covenant or other
agreement, under or contained in any Loan Document or any other document now or
in the future evidencing or securing any debt, liability or obligation of any
Obligor to the Bank; (iii) the filing by or against any Obligor of any
proceeding in bankruptcy, receivership, insolvency, reorganization,
liquidation, conservatorship or similar proceeding (and, in the case of any
such proceeding instituted against any Obligor, such proceeding is not
dismissed or stayed within forty-five (45) days of the commencement thereof,
provided that the Bank shall not be obligated to advance additional funds
hereunder during such period); (iv) any assignment by any Obligor for the
benefit of creditors, or any levy, garnishment, attachment or similar
proceeding is instituted against any property of any Obligor held by or
deposited with the Bank; (v) a default with respect to any other
indebtedness of any Obligor for borrowed money in excess of $50,000, if the
effect of such default is to cause or permit the acceleration of such debt; (vi) the
commencement of any foreclosure or forfeiture proceeding, execution or
attachment against any collateral securing the obligations of any Obligor to
the Bank; (vii) the entry of a final judgment in excess of $100,000 or the
entry of multiple final judgments aggregating in excess of $250,000 against any
Obligor and the failure of such Obligor to discharge such judgment or judgments
within thirty (30) days of the entry thereof; (viii) any material adverse
change in any Obligor’s business, assets, operations, financial condition or
results of operations of the Obligors taken as a whole; (ix) any Obligor
ceases doing business as a going concern; or (x) any representation or
warranty made by any Obligor to the Bank in any Loan Document or any other
documents now or in the future evidencing or securing the obligations of any
Obligor to the Bank, is false, erroneous or misleading in any material
respect.  As used herein, the term “Obligor” means any Borrower and any
guarantor of, or any pledgor, mortgagor or other person or entity providing
collateral support for, the Borrower’s obligations to the Bank existing on the
date of this Note or arising in the future.

 

Upon the occurrence and
during the continuation of an Event of Default: 
(a) the Bank shall be under no further obligation to make advances
hereunder; (b) if an Event of Default specified in clause (iii) or (iv) above
shall occur, the outstanding principal balance and accrued interest hereunder
together with any additional amounts payable hereunder shall be immediately due
and payable without demand or notice of any kind; (c) if any other Event
of Default shall occur, the outstanding principal balance and accrued interest
hereunder together with any additional amounts payable hereunder, at the Bank’s
option and without demand or notice of any kind, may be accelerated and become
immediately due and payable; (d) at the Bank’s option, this Note will bear
interest at the Default Rate from the date of the occurrence of the Event of
Default; and (e) the Bank may exercise from time to time any of the rights
and remedies available under the Loan Documents or under applicable law.

 

6

 

Power to
Confess Judgment.  The Borrower hereby empowers any attorney of
any court of record, after the occurrence and during the continuance of any
Event of Default hereunder, to appear for the Borrower and, with or without
complaint filed, confess judgment, or a series of judgments, against the
Borrower in favor of the Bank or any holder hereof for the entire principal
balance of this Note, all accrued and unpaid interest and all other amounts due
and owing hereunder, together with reasonable costs of suit and an attorney’s
commission of the lesser of 10% of such principal and interest and $1,000 added
as a reasonable attorney’s fee, and for doing so, this Note or a copy verified
by affidavit shall be a sufficient warrant. 
Except in the case of manifest error by the Bank, the Borrower hereby
forever waives and releases all errors in said proceedings and all rights of
appeal and all relief from any and all appraisement, stay or exemption laws of
any state now in force or hereafter enacted. 
Interest on any such judgment shall accrue at the Default Rate.

 

No single exercise of the
foregoing power to confess judgment, or a series of judgments, shall be deemed
to exhaust the power, whether or not any such exercise shall be held by any
court to be invalid, voidable, or void, but the power shall continue
undiminished and it may be exercised from time to time as often as the Bank
shall elect until such time as the Bank shall have received payment in full of
the debt, interest and costs. 
Notwithstanding the attorney’s commission provided for in the preceding
paragraph (which is included in the warrant for purposes of establishing a sum
certain), the amount of attorneys’ fees that the Bank may recover from the
Borrower shall not exceed the actual attorneys’ fees incurred by the Bank.

 

11.          Right of Setoff.  In addition to all liens upon and rights of
setoff against the Borrower’s money, securities or other property given to the
Bank by law, the Bank shall have, with respect to the Borrower’s obligations to
the Bank under this Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of setoff against, and
the Borrower hereby grants the Bank a security interest in, and hereby assigns,
conveys, delivers, pledges and transfers to the Bank, all of the Borrower’s
right, title and interest in and to, all of the Borrower’s deposits, moneys,
securities and other property now or hereafter in the possession of or on
deposit with, or in transit to, the Bank or any other direct or indirect
subsidiary of The PNC Financial Services Group, Inc., whether held in a
general or special account or deposit, whether held jointly with someone else,
or whether held for safekeeping or otherwise, excluding, however, all IRA,
Keogh, and trust accounts.  Every such
security interest and right of setoff may be exercised without demand upon or
notice to the Borrower.  Every such right
of setoff shall be deemed to have been exercised immediately upon the
occurrence of an Event of Default hereunder without any action of the Bank,
although the Bank may enter such setoff on its books and records at a later
time.

 

12.          Indemnity.  The Borrower agrees to indemnify each of the
Bank, each legal entity, if any, who controls, is controlled by or is under
common control with the Bank, and each of their respective directors, officers
and employees (the “Indemnified Parties”),
and to hold each Indemnified Party harmless from and against any and all
claims, damages, losses, liabilities and reasonable out-of-pocket expenses
(including all fees and charges of external counsel with whom any Indemnified
Party may consult and all expenses of litigation and preparation therefor)
which any Indemnified Party may incur or which may be asserted against any
Indemnified Party by any 

 

7

 

person,
entity or governmental authority (including any person or entity claiming
derivatively on behalf of the Borrower), in connection with or arising out of
or relating to the matters referred to in this Note or in the other Loan
Documents or the use of any advance hereunder, whether (a) arising from or
incurred in connection with any breach of a representation, warranty or
covenant by the Borrower, or (b) arising out of or resulting from any suit,
action, claim, proceeding or governmental investigation, pending or threatened,
whether based on statute, regulation or order, or tort, or contract or
otherwise, before any court or governmental authority; provided, however,
that the foregoing indemnity agreement shall not apply to any claims, damages,
losses, liabilities and expenses to the extent attributable to an Indemnified
Party’s gross negligence or willful misconduct. 
The indemnity agreement contained in this Section shall survive the
termination of this Note, payment of any advance hereunder and the assignment
of any rights hereunder.  The Borrower
may participate at its expense in the defense of any such action or claim.

 

13.          Miscellaneous.  All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder (“Notices”) must be in writing (except as
may be agreed otherwise above with respect to borrowing requests) and will be
effective upon receipt if a Regular Business Day.  Notices may be given in any manner to which
the parties may separately agree, including electronic mail.  Without limiting the foregoing, first-class
mail, confirmed facsimile transmission and commercial courier service are
hereby agreed to as acceptable methods for giving Notices.  Regardless of the manner in which provided,
Notices may be sent to a party’s address as set forth above or to such other
address as any party may give to the other for such purpose in accordance with
this paragraph.  No delay or omission on
the Bank’s part to exercise any right or power arising hereunder will impair
any such right or power or be considered a waiver of any such right or power,
nor will the Bank’s action or inaction impair any such right or power.  The Bank’s rights and remedies hereunder are
cumulative and not exclusive of any other rights or remedies which the Bank may
have under other agreements, at law or in equity.  No modification, amendment or waiver of, or
consent to any departure by the Borrower from, any provision of this Note will be
effective unless made in a writing signed by the Bank, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given.  The Borrower agrees to
pay on demand, to the extent permitted by law, all reasonable out-of-pocket
costs and expenses incurred by the Bank in the enforcement of its rights in
this Note and in any security therefor, including without limitation fees and
expenses of the Bank’s counsel.  If any
provision of this Note is found to be invalid, illegal or unenforceable in any
respect by a court, all the other provisions of this Note will remain in full
force and effect.  The Borrower and all
other makers and indorsers of this Note hereby forever waive presentment,
protest, notice of dishonor and notice of non-payment.  The Borrower also waives all defenses based
on suretyship or impairment of collateral. 
If this Note is executed by more than one Borrower, the obligations of
such persons or entities hereunder will be joint and several.  This Note shall bind the Borrower and its
heirs, executors, administrators, successors and assigns, and the benefits
hereof shall inure to the benefit of the Bank and its successors and assigns; provided,
however, that the Borrower may not assign this Note in whole or in part
without the Bank’s written consent and the Bank at any time may assign this
Note in whole or in part to any assignee permitted under the Loan Agreement.

 

This Note has been delivered
to and accepted by the Bank and will be deemed to be made in the
Commonwealth.  THIS NOTE
WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE BORROWER
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE 

 

8

 

COMMONWEALTH, EXCLUDING
ITS CONFLICT OF LAWS RULES.  The Borrower hereby irrevocably consents to
the non-exclusive jurisdiction of any state or federal court in the
Commonwealth; provided that nothing contained in this Note will prevent the
Bank from bringing any action, enforcing any award or judgment or exercising
any rights against the Borrower individually, against any security or against
any property of the Borrower within any other county, state or other foreign or
domestic jurisdiction.  The Borrower acknowledges
and agrees that the venue provided above is the most convenient forum for both
the Bank and the Borrower.  The Borrower
waives any objection to venue and any objection based on a more convenient
forum in any action instituted under this Note.

 

14.          WAIVER OF JURY TRIAL.  THE
BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE BORROWER MAY HAVE TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS
NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS. 
THE BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND
VOLUNTARY.

 

The Borrower acknowledges
that it has read and understood all the provisions of this Note, including the
confession of judgment and the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.

 

[Signature to appear on
the following page]

 

9

 

WITNESS the due
execution of this Committed Line of Credit Note as a document under seal, as of
the date first written above, with the intent to be legally bound hereby.

 

 

	
   

  	
  NEW HORIZONS WORLDWIDE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

Disclosure for Confession of Judgment

 

	
  Undersigned:

  	
   

  	
  New Horizons
  Worldwide, Inc.

  
	
   

  	
   

  	
  1 West Elm Street,
  Suite 125

  
	
   

  	
   

  	
  Conshohocken, Pennsylvania
  19482

  

 

	
  Lender:

  	
   

  	
  PNC Bank, National
  Association

  
	
   

  	
   

  	
  1600 Market Street, 22nd
  Floor

  
	
   

  	
   

  	
  Philadelphia, Pennsylvania
  19103

  

 

The undersigned has
executed, and/or is executing, on or about the date hereof, a Committed Line of
Credit Note, in the principal amount of $6,000,000, under which the undersigned
is obligated to repay monies to Lender.

 

A.            The undersigned
acknowledges and agrees that the above-referenced notes contain provisions
under which Lender may enter judgment by confession against the undersigned.  Being fully aware of its rights to prior
notice and a hearing on the validity of any judgment or other claims that may
be asserted against it by Lender thereunder before judgment is entered, the
undersigned hereby freely, knowingly and intelligently waives these rights and
expressly agrees and consents to Lender’s entering judgment against it by
confession pursuant to the terms thereof.

 

B.            The undersigned also
acknowledges and agrees that the above-referenced notes contain provisions
under which Lender may, after entry of judgment and without either notice or a
hearing, foreclose upon, attach, levy, take possession of or otherwise seize
property of the undersigned in full or partial payment of the judgment.  Being fully aware of its rights after
judgment is entered (including the right to move to open or strike the
judgment), the undersigned hereby freely, knowingly and intelligently waives
its rights to notice and a hearing and expressly agrees and consents to Lender’s
taking such actions as may be permitted under applicable state and federal law
without prior notice to the undersigned.

 

C.            The
undersigned certifies that a representative of Lender specifically called the
confession of judgment provisions in the above documents to the attention of
the undersigned, and/or that the undersigned was represented by legal counsel
in connection with the above documents.

 

D.            The
undersigned hereby certifies:  that its
annual income exceeds $10,000; that all references to “the undersigned” above
refer to all persons and entities signing below; and that the undersigned
received a copy hereof at the time of signing.

 

	
  Dated:   October 1, 2008

  	
   

  	
  NEW HORIZONS WORLDWIDE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:Exhibit 10.3

 

	
  Security Agreement

  	
  

  

 

THIS SECURITY AGREEMENT (this “Agreement”), dated as of October 1, 2008, is made by
the Companies identified as such on the signature pages hereof (each
individually a “Grantor” and collectively, the “Grantors”) in favor of PNC BANK, NATIONAL
ASSOCIATION (the “Bank”), with
an address at 1600 Market Street, 22nd Floor, Philadelphia, PA
19103.

 

Under the terms hereof, the
Bank desires to obtain and each Grantor desires to grant the Bank security for
all of the Obligations (as hereinafter defined).

 

NOW, THEREFORE, each Grantor
and the Bank, intending to be legally bound, hereby agree as follows:

 

1.             Definitions.

 

(a)           “Collateral”
shall include all personal property of each Grantor, including the following,
all whether now owned or hereafter acquired or arising and wherever
located:  (i) accounts (including
health-care-insurance receivables and credit card receivables); (ii) securities
entitlements, securities accounts, commodity accounts, commodity contracts and
investment property; (iii) deposit accounts; (iv) instruments
(including promissory notes); (v) documents (including warehouse
receipts); (vi) chattel paper (including electronic chattel paper and
tangible chattel paper); (vii) inventory, including raw materials, work in
process, or materials used or consumed in a Grantor’s business, items held for
sale or lease or furnished or to be furnished under contracts of service, sale
or lease, goods that are returned, reclaimed or  repossessed; (viii) goods of every nature, including
stock-in-trade, goods on consignment, standing timber that is to be cut and
removed under a conveyance or contract for sale, the unborn young of animals,
crops grown, growing, or to be grown, manufactured homes, computer programs
embedded in such goods and farm products; (ix) equipment, including
machinery, vehicles and furniture; (x) fixtures; (xi) agricultural liens;
(xii) as-extracted collateral; (xiii) commercial tort claims, if any, described
on Exhibit “A” hereto; (xiv) letter of credit rights; (xv) general
intangibles, of every kind and description, including payment intangibles,
software, computer information, source codes, object codes, records and data,
all existing and future customer lists, choses in action, claims (including
claims for indemnification or breach of warranty), books, records, patents and
patent applications, copyrights, trademarks, tradenames, tradestyles, trademark
applications, goodwill, blueprints, drawings, designs and plans, trade secrets,
contracts, licenses, license agreements, formulae, tax and any other types of
refunds, returned and unearned insurance premiums, rights and claims under
insurance policies; (xvi) all supporting obligations of all of the foregoing
property; (xvii) all property of each Grantor now or hereafter in the Bank’s
possession or in transit to or from, or under the custody or control of, the
Bank or any affiliate thereof; (xviii) all cash and cash equivalents thereof;
and (xix) all cash and noncash proceeds (including insurance proceeds) of all
of the foregoing property, all products thereof and all additions and
accessions thereto, substitutions therefor and replacements thereof.

 

(b)           “Obligations” shall include all loans, advances, debts, liabilities,
obligations, covenants and duties owing by each Grantor to the Bank under the
Loan Agreement, dated as of October 1, 2008, by and between New Horizons
Worldwide, Inc. (the “Borrower”) and the Bank (the “Loan Agreement”), the
Committed Line of Credit Note, dated as of October 1, 2008, made by the
Borrower in favor of the Bank, 

 

 

the
Guaranty and Suretyship Agreement, dated as of October 1, 2008, by and
between the Bank and the Grantors (other than New Horizons Worldwide, Inc.)
and any other related loan documents (collectively, the “Loan Documents”), of any kind or nature,
present or future (including any interest accruing thereon after maturity, or
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding relating to a Grantor, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding), whether direct or indirect, absolute or contingent, joint or
several, due or to become due, now existing or hereafter arising; and any
amendments, extensions, renewals and increases of or to any of the foregoing,
and all reasonable out-of-pocket costs and expenses of the Bank incurred in the
documentation, negotiation, modification, enforcement, collection and otherwise
in connection with any of the foregoing, including attorneys’ fees and
expenses.

 

(c)           “UCC”
means the Uniform Commercial Code, as adopted and enacted and as in effect from
time to time in the State whose law governs pursuant to the Section of
this Agreement entitled “Governing Law and Jurisdiction.”  Terms used herein which are defined in the
UCC and not otherwise defined herein shall have the respective meanings
ascribed to such terms in the UCC. To the extent the definition of any category
or type of collateral is modified by any amendment, modification or revision to
the UCC, such modified definition will apply automatically as of the date of
such amendment, modification or revision.

 

2.             Grant of Security Interest.  To secure the Obligations, each Grantor,
hereby assigns and grants to the Bank, as secured party, a continuing lien on
and security interest in the Collateral.

 

3.             Change in Name or Locations.  Each Grantor hereby agrees that if the
location of the Collateral changes from the locations listed on Exhibit “A”
hereto and made part hereof, or if such Grantor changes its name, its type of
organization, its state of organization (if such Grantor is a registered
organization), its chief executive office (if such Grantor is a general
partnership or non-registered organization) or establishes a name in which it
may do business that is not listed as a tradename on Exhibit “A” hereto,
such Grantor will immediately notify the Bank in writing of the additions or
changes.

 

4.             Representations and Warranties.  Each Grantor represents, warrants and
covenants to Secured Party that: (a) all information, including its type
of organization, jurisdiction of organization, chief executive office, and (for
individuals only) principal residence are as set forth on Exhibit “A”
hereto and are true and correct on the date hereof; (b) Debtor has good,
marketable and indefeasible title to the Collateral, has not made any prior
sale, pledge, encumbrance, assignment or other disposition of any of the
Collateral, and the Collateral is free from all encumbrances and rights of
setoff of any kind except Permitted Lien (as defined in the Loan Agreement) and
the liens in favor of Secured Party created by this Agreement; (c) except
for Permitted Liens or as otherwise herein provided, Debtor will not hereafter
without Secured Party’s prior written consent sell, pledge, encumber, assign or
otherwise dispose of any of the Collateral or permit any right of setoff, lien
or security interest to exist thereon except to Secured Party; (d) Debtor will
defend the Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein; 
(e) each account and general intangible, if included in the
definition of Collateral, is genuine and enforceable in accordance with its
terms and Debtor will defend the same against all claims, demands, setoffs and
counterclaims at any time asserted; and (f) at the time any account or
general intangible becomes subject to this Agreement, such account or general
intangible will be a good and valid account representing a bona fide sale of
goods or services by Debtor and such goods will have been shipped to the
respective account debtors or the services will have been performed for the
respective account debtors, and no such account or general intangible will be
subject to any claim for credit, allowance or adjustment by any account debtor
or any setoff, defense or counterclaim.

 

2

 

5.             Grantors’ Covenants.  Each Grantor covenants that it shall:

 

(a)           from time to time and at all reasonable times allow the
Bank, by or through any of its officers, agents, attorneys, or accountants, to
examine or inspect the Collateral, and obtain valuations and audits of the
Collateral, at such Grantor’s expense, wherever located.  Each Grantor shall do, obtain, make, execute
and deliver all such additional and further acts, things, deeds, assurances and
instruments as the Bank may require to vest in and assure to the Bank its
rights hereunder and in or to the Collateral, and the proceeds thereof,
provided, however, that with respect to any agreements to be entered into by
third parties, including waivers from landlords, warehousemen and mortgagees,
Grantors shall be required to use good faith and commercially reasonable
efforts to obtain such executed agreements. 
Each Grantor agrees that, upon the occurrence and during the continuance
of an Event of Default, the Bank has the right to notify (on invoices or
otherwise) account debtors and other obligors or payors on any Collateral of
its assignment to the Bank, and that all payments thereon should be made
directly to the Bank, and that the Bank has full power and authority to
collect, compromise, endorse, sell or otherwise deal with the Collateral in its
own name or that of such Grantor;

 

(b)           keep the Collateral in good order and repair at all times
and immediately notify the Bank of any event causing a material loss or decline
in value of the Collateral, whether or not covered by insurance, and the amount
of such loss or depreciation;

 

(c)           only use or permit the Collateral to be used in accordance
with all applicable and material federal, state, county and municipal laws and
regulations; and

 

(d)           have and maintain insurance at all times with respect to all
Collateral against risks of fire (including so-called extended coverage),
theft, sprinkler leakage, and other risks (including risk of flood if any
Collateral is maintained at a location in a flood hazard zone) as the Bank may
require, in such form, in such amount, for such period and written by such
companies as may be satisfactory to the Bank in its sole discretion.  Each such casualty insurance policy shall
contain a standard Lender’s Loss Payable Clause issued in favor of the Bank
under which all losses thereunder shall be paid to the Bank as the Bank’s interests
may appear.  Such policies shall
expressly provide that the requisite insurance cannot be altered or canceled
without at least thirty (30) days prior written notice to the Bank and shall
insure the Bank notwithstanding the act or neglect of such Grantor.  Upon the Bank’s demand, each Grantor shall
furnish the Bank with duplicate original policies of insurance or such other
evidence of insurance as the Bank may require. 
In the event of failure to provide insurance as herein provided, the
Bank may, at its option, obtain such insurance and the applicable Grantor shall
pay to the Bank, on demand, the cost thereof. 
Proceeds of insurance may be applied by the Bank to reduce the
Obligations or to repair or replace Collateral, all in the Bank’s sole discretion.

 

6.             Negative Pledge; No Transfer.  The Grantors will not sell or offer to sell
or otherwise transfer or grant or allow the imposition of a lien or security
interest upon the Collateral (except for Permitted Liens and sales of inventory
and collections of accounts in the Grantors’ ordinary course of business), will
not allow any third party to gain control of all or any part of the Collateral,
and will not use any portion thereof in any manner inconsistent with this
Agreement or with the terms and conditions of any policy of insurance thereon.

 

7.             Covenants for Accounts.  If accounts are included in the definition of
Collateral:

 

(a)           Each Grantor will, on the Bank’s demand, make notations on
its books and records showing the Bank’s security interest and make available
to the Bank shipping and delivery receipts evidencing the shipment of the goods
that gave rise to an account, completion certificates or other proof of the
satisfactory performance of services that gave rise to an account, a copy of
the invoice for each 

 

3

 

account
and copies of any written contract or order from which an account arose.  Each Grantor shall promptly notify the Bank
if an account becomes evidenced or secured by an instrument or chattel paper
and upon the Bank’s request, will promptly deliver any such instrument or
chattel paper to the Bank, including any letter of credit delivered to such
Grantor to support a shipment of inventory by such Grantor.

 

(b)           Each Grantor will promptly advise the Bank whenever an
account debtor refuses to retain or returns any goods from the sale of which an
account arose and will comply with any instructions that the Bank may give
regarding the sale or other disposition of such returns.  From time to time with such frequency as the
Bank may request, each Grantor will report to the Bank all credits given to
account debtors on all accounts.

 

(c)           Each Grantor will immediately notify the Bank if any account
in an outstanding amount at any time in excess of $250,000 arises out of
contracts with the United States or any department, agency or instrumentality
thereof, and will execute any instruments and take any steps required by the
Bank so that all monies due and to become due under such contract shall be assigned
to the Bank and notice of the assignment given to and acknowledged by the
appropriate government agency or authority under the Federal Assignment of
Claims Act.

 

(d)           At any time after the occurrence of an Event of Default, and
without notice to the Grantors, the Bank may direct any persons who are
indebted to a Grantor on any Collateral consisting of accounts or general
intangibles to make payment directly to the Bank of the amounts due.  The Bank is authorized to collect,
compromise, endorse and sell any such Collateral in its own name or in such
Grantor’s name and to give receipts to such account debtors for any such
payments and the account debtors will be protected in making such payments to
the Bank.  Upon the Bank’s written
request, each Grantor will establish with the Bank and maintain a lockbox
account (“Lockbox”) with the Bank
and a depository account(s) (“Cash
Collateral Account”) with the Bank subject to the provisions of this
subparagraph and such other related agreements as the Bank may require, and
each Grantor shall notify its account debtors to remit payments directly to the
Lockbox.  Thereafter, funds collected in
the Lockbox shall be transferred to the Cash Collateral Account, and funds in
the Cash Collateral Account shall be applied by the Bank, daily, to reduce the
outstanding Obligations.

 

8.             Further Assurances.  By its signature hereon, each Grantor hereby
irrevocably authorizes the Bank to execute (on behalf of such Grantor) and file
against each Grantor one or more financing, continuation or amendment
statements pursuant to the UCC in form satisfactory to the Bank, and such
Grantor will pay the cost of preparing and filing the same in all jurisdictions
in which such filing is deemed by the Bank to be necessary or desirable in
order to perfect, preserve and protect its security interests.  If required by the Bank, each Grantor will
execute all documentation necessary for the Bank to obtain and maintain
perfection of its security interests in the Collateral.  At the Bank’s request, each Grantor will
execute, in form satisfactory to the Bank, a Rider to Security Agreement -
Copyrights (if any Collateral consists of registered or unregistered
copyrights), a Rider to Security Agreement - Patents (if any Collateral
consists of patents or patent applications), a Rider to Security
Agreement - Trademarks (if any Collateral consists of trademarks,
tradenames, tradestyles or trademark applications).  If any Collateral consists of letter of
credit rights, electronic chattel paper, deposit accounts or supporting
obligations not maintained with the Bank or one of its affiliates, or any
securities entitlement, securities account, commodities account, commodities
contract or other investment property, then at the Bank’s request each Grantor
will execute, and will use good faith and commercially reasonable efforts to
cause the depository institution or securities intermediary upon whose books
and records the ownership interest of such Grantor in such Collateral appears,
to execute such Pledge Agreements, Notification and Control Agreements or other
agreements as the Bank deems necessary in order to perfect, prioritize and
protect its security interest in such Collateral (each, a “Collateral Security Agreement,” and
collectively, 

 

4

 

“Collateral Security Agreements”), in each
case in a form satisfactory to the Bank. 
If a Grantor is unable to provide or cause to be provided a Collateral
Security Agreement as required by the immediately preceding sentence, such Grantor
shall take or cause to be taken such alternative actions, including opening
additional deposit accounts or securities accounts with other depository
institutions or securities intermediaries, as may be required in order to
enable the Bank to have a perfected security interest in such Collateral.

 

9.             Events of Default.  The Grantors shall, at the Bank’s option, be
in default under this Agreement upon the happening of any of the following
events or conditions (each, an “Event of
Default”):  (a) any Event
of Default (as defined in any of the Obligations); (b) demand by the Bank
under any of the Obligations that have a demand feature; (c) the failure
by a Grantor to perform any of its obligations under this Agreement; (d) material
falsity, inaccuracy or breach by a Grantor of any written warranty,
representation or statement made or furnished to the Bank by or on behalf of
such Grantor; (e) an uninsured material loss, theft, damage, or
destruction to any of the Collateral, or the entry of any judgment against a
Grantor or any lien against or the making of any levy, seizure or attachment of
or on the Collateral; (f) except with respect to the Permitted Liens or as
otherwise set forth herein, the failure of the Bank to have a perfected first
priority security interest in the Collateral; or (g) Grantor directly or
indirectly engages in activity which is reasonably likely to result in the
forfeiture of any property of a Grantor to any governmental entity, federal,
state or local.

 

10.           Remedies.  Upon the occurrence and during the
continuance of any such Event of Default, the Bank may declare all Obligations
secured hereby immediately due and payable and shall have, in addition to any
remedies provided herein or by any applicable law or in equity, all the remedies
of a secured party under the UCC. The Bank’s remedies include, but are not
limited to, the right to (a) peaceably by its own means or with judicial
assistance enter a Grantor’s premises and take possession of the Collateral
without prior notice to such Grantor or the opportunity for a hearing, (b) render
the Collateral unusable, (c) dispose of the Collateral on a Grantor’s
premises, (d) require a Grantor to assemble the Collateral and make it
available to the Bank at a place designated by the Bank, and (e) notify
the United States Postal Service to send a Grantor’s mail to the Bank.  Unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Bank will give such Grantor reasonable notice of the
time and place of any public sale thereof or of the time after which any
private sale or any other intended disposition thereof is to be made.  The requirements of commercially reasonable
notice shall be met if such notice is sent to such Grantor at least ten (10) days
before the time of the intended sale or disposition.  Expenses of retaking, holding, preparing for
disposition, disposing or the like shall include the Bank’s reasonable
out-of-pocket attorneys’ fees and legal expenses, incurred or expended by the
Bank to enforce any payment due it under this Agreement either as against a
Grantor, or in the prosecution or defense of any action, or concerning any
matter growing out of or connection with the subject matter of this Agreement
and the Collateral pledged hereunder. 
Each Grantor waives all relief from all appraisement or exemption laws
now in force or hereafter enacted.

 

11.           Power of Attorney.  Each Grantor does hereby make, constitute and
appoint any officer or agent of the Bank as such Grantor’s true and lawful
attorney-in-fact, effective upon the occurrence and during the continuance of
an Event of Default, with power to (a) endorse the name of such Grantor or
any of such Grantor’s officers or agents upon any notes, checks, drafts, money
orders, or other instruments of payment or Collateral that may come into the
Bank’s possession in full or part payment of any Obligations; (b) sue for,
compromise, settle and release all claims and disputes with respect to, the
Collateral; and (c) sign, for such Grantor, such documentation required by
the UCC, or supplemental intellectual property security agreements; granting to
such Grantor’s said attorney full power to do any and all things necessary to
be done in and about the premises as fully and effectually as such Grantor
might or could do.  Each Grantor hereby
ratifies all that said attorney shall lawfully do or cause to be done by virtue
hereof.  This power of attorney is
coupled with an interest, and is irrevocable.

 

5

 

12.           Payment of Expenses.  At its option, the Bank may discharge taxes,
liens, security interests or such other encumbrances as may attach to the
Collateral, may pay for required insurance on the Collateral and may pay for
the maintenance, appraisal or reappraisal, and preservation of the Collateral,
as determined by the Bank to be necessary. 
The Grantors will reimburse the Bank on demand for any payment so made
or any expense incurred by the Bank pursuant to the foregoing authorization,
and the Collateral also will secure any advances or payments so made or
expenses so incurred by the Bank.

 

13.           Notices.  All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder (“Notices”) must be in writing and will be
effective upon receipt.  Notices may be
given in any manner to which the parties may separately agree, including
electronic mail.  Without limiting the foregoing,
first-class mail, facsimile transmission and commercial courier service are
hereby agreed to as acceptable methods for giving Notices.  Regardless of the manner in which provided,
Notices may be sent to a party’s address as set forth above or to such other
address as any party may give to the other for such purpose in accordance with
this section.

 

14.           Preservation of Rights.  No delay or omission on the Bank’s part to exercise any
right or power arising hereunder will impair any such right or power or be
considered a waiver of any such right or power, nor will the Bank’s action or
inaction impair any such right or power. 
The Bank’s rights and remedies hereunder are cumulative and not
exclusive of any other rights or remedies which the Bank may have under other
agreements, at law or in equity.

 

15.           Illegality.  If any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, it shall not affect
or impair the validity, legality and enforceability of the remaining provisions
of this Agreement.

 

16.           Changes in Writing.  No modification, amendment or waiver of, or
consent to any departure by a Grantor from, any provision of this Agreement
will be effective unless made in a writing signed by the Bank, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.  No notice to or
demand on a Grantor will entitle such Grantor to any other or further notice or
demand in the same, similar or other circumstance.

 

17.           Entire Agreement.  This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.

 

18.           Counterparts.  This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument.  Delivery of an executed counterpart of
signature page to this Agreement by facsimile transmission shall be effective
as delivery of a manually executed counterpart. 
Any party so executing this Agreement by facsimile transmission shall
promptly deliver a manually executed counterpart, provided that any failure to
do so shall not affect the validity of the counterpart executed by facsimile
transmission.

 

19.           Successors and Assigns.  This Agreement will be binding upon and inure
to the benefit of the Grantors and the Bank and their respective heirs,
executors, administrators, successors and assigns; provided, however,
that the Grantors may not assign this Agreement in whole or in part without the
Bank’s prior written consent and the Bank at any time may assign this Agreement
in whole or in part.

 

20.           Interpretation.  In this Agreement, unless the Bank and the
Grantors otherwise agree in writing, the singular includes the plural and the
plural the singular; words importing any gender include the other genders;
references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to; the
word “or” shall be deemed to include “and/or”, the 

 

6

 

words
“including”, “includes” and “include” shall be deemed to be followed by the
words “without limitation”; references to articles, sections (or subdivisions
of sections) or exhibits are to those of this Agreement; and references to
agreements and other contractual instruments shall be deemed to include all
subsequent amendments and other modifications to such instruments, but only to
the extent such amendments and other modifications are not prohibited by the
terms of this Agreement.  Section headings
in this Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.  Unless otherwise specified in this Agreement,
all accounting terms shall be interpreted and all accounting determinations
shall be made in accordance with GAAP. 
If this Agreement is executed by more than one Grantor, the obligations
of such persons or entities will be joint and several.

 

21.           Indemnity.  Each Grantor agrees to indemnify each of the
Bank, each legal entity, if any, who controls the Bank and each of their
respective directors, officers and employees (the “Indemnified Parties”) and to hold each Indemnified Party
harmless from and against any and all claims, damages, losses, liabilities and
reasonable out-of-pocket expenses (including all fees and charges of internal
or external counsel with whom any Indemnified Party may consult and all
expenses of litigation and preparation therefor) which any Indemnified Party
may incur or which may be asserted against any Indemnified Party by any person,
entity or governmental authority (including any person or entity claiming
derivatively on behalf of such Grantor), in connection with or arising out of
or relating to the matters referred to in this Agreement or the Obligations,
whether (a) arising from or incurred in connection with any breach of a
representation, warranty or covenant by a Grantor, or (b) arising out of
or resulting from any suit, action, claim, proceeding or governmental
investigation, pending or threatened, whether based on statute, regulation or
order, or tort, or contract or otherwise, before any court or governmental
authority; provided, however, that the foregoing indemnity
agreement shall not apply to any claims, damages, losses, liabilities and
expenses to the extent attributable to an Indemnified Party’s gross negligence
or willful misconduct.  The indemnity
agreement contained in this Section shall survive the termination of this
Agreement, payment of the Obligations and assignment of any rights
hereunder.  A Grantor may participate at
its expense in the defense of any such claim.

 

22.           Governing Law and Jurisdiction.  This Agreement has been delivered to and
accepted by the Bank and will be deemed to be made in the Commonwealth of
Pennsylvania (the “Commonwealth”)  THIS
AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES
HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH.  Each Grantor hereby irrevocably consents to
the exclusive jurisdiction of any state or federal court in the Commonwealth;
provided that nothing contained in this Agreement will prevent the Bank from
bringing any action, enforcing any award or judgment or exercising any rights
against such Grantor individually, against any security or against any property
of such Grantor within any other county, state or other foreign or domestic
jurisdiction.  The Bank and each Grantor
agree that the venue provided above is the most convenient forum for both the
Bank and such Grantor.  Each Grantor
waives any objection to venue and any objection based on a more convenient
forum in any action instituted under this Agreement.

 

23.           WAIVER OF JURY TRIAL.  EACH OF THE
GRANTORS AND THE BANK IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO
THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS.  EACH GRANTOR AND THE BANK ACKNOWLEDGE THAT
THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

 

7

 

Each Grantor acknowledges that it has read
and understood all the provisions of this Agreement, including the waiver of
jury trial, and has been advised by counsel as necessary or appropriate.

 

WITNESS the due
execution hereof as a document under seal, as of the date first written above.

 

	
  COMPANIES:

  	
   

  
	
   

  	
   

  
	
  NEW HORIZONS WORLDWIDE, INC.

  	
   

  
	
  NEW HORIZONS EDUCATION CORPORATION

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF ALBUQUERQUE, INC.

  	
   

  
	
  NHCLC OF SAN ANTONIO, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF HARTFORD, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF DENVER, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF CHARLOTTE, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF SACRAMENTO, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF CLEVELAND, LTD, LLC

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF INDIANAPOLIS, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF INDIANAPOLIS, LLC

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF MEMPHIS, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF SANTA ANA, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTERS, INC.

  	
   

  
	
  COMPUTER TRAINING ASSOCIATES OF CHICAGO, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF NASHVILLE, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF METROPOLITAN NEW YORK, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTER OF ATLANTA, INC.

  	
   

  
	
  NEW HORIZONS FRANCHISING GROUP, INC.

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTERS EMEA, LLC

  	
   

  
	
  NEW HORIZONS COMPUTER LEARNING CENTERS APAC, LLC

  	
   

  
	
  NOVA VISTA, LLC

  	
   

  
	
  NH MEXICO, INC.

  	
   

  

 

	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PNC BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT “A”

TO SECURITY AGREEMENT

 

1.             Grantor’s form of organization
(i.e., corporation, partnership, limited liability company):

 

2.             Grantor’s State of organization,
if a registered organization (i.e., corporation, limited partnership or limited
liability company):

 

3.             Grantor’s principal residence,
if general partnership:

 

4.             Address of Grantor’s chief
executive office, including the County:

 

5.             Grantor’s EIN:

 

6.             Grantor’s organizational ID# (if
any exists):

 

7.             Address for books and records,
if different:

 

8.             Addresses of other Collateral
locations, including Counties, for the past five (5) years:

 

9.             Name and address of landlord or
owner if location is not owned by the Grantor:

 

10.           Other names or tradenames now or formerly used by the
Grantor:

 

11.           List of all existing Commercial Tort Claims (by case title
with court and brief description of claim):

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]