Document:

<PAGE>
                                                                   Exhibit 10.46

                                PLEDGE AGREEMENT

                  PLEDGE AGREEMENT dated as of July 31, 2002 (this "Agreement"),
by EDISON SCHOOLS INC. ("Pledgor") in favor of SCHOOL SERVICES LLC ("Pledgee").

                  WHEREAS, the parties hereto have entered into that certain
Credit and Security Agreement dated as of even date herewith among Pledgor, as
borrower, Pledgee, as lender, 110th and 5th Associates, LLC, as a guarantor, and
Bayard Rustin Charter School, LLC, as a guarantor (as the same may be amended,
supplemented, restated, replaced or otherwise modified from time to time, the
"Credit Agreement");

                  WHEREAS, Pledgor has requested Pledgee to make certain
revolving loans and a term loan to Pledgor under the Credit Agreement, and
Pledgee is prepared to make such loans upon the terms and subject to the
conditions of the Credit Agreement;

                  WHEREAS, it is a condition, among others, to the obligations
of Pledgee to make extensions of credit to Pledgor under the Credit Agreement
that the parties enter into this Agreement; and

                  WHEREAS, Pledgee has requested, and Pledgor has agreed to
provide, collateral security for the performance of Pledgor's obligations under
the Credit Agreement;

                  NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

         Section 1. Defined Terms. Except where otherwise specifically
provided, all capitalized terms which are not defined herein but which are
defined in the Credit Agreement are used herein as so defined.

         Section 2. Grant of Security Interest. As collateral security for (a)
the prompt and complete payment and performance when due of Pledgor's
obligations under the Credit Agreement (collectively, the "Secured Obligations")
and (b) all costs and expenses incurred by Pledgee in connection with the
enforcement of Pledgee's rights against the Pledgor under the Facility
Documents, Pledgor hereby assigns, transfers, pledges and grants to Pledgee a
security interest in and to all of its right, title and interest in, to and
under (all of such property being hereinafter collectively referred to as the
"Collateral"):

                  (i) distributions of profits and income of Edison Receivables
         Company LLC, a Delaware limited liability company ("ERC"), (ii) capital
         distributions from ERC, (iii) distributions of cash flow by ERC, (iv)
         property of ERC to which Pledgor now or in the future may be entitled
         with respect to the Pledgor's membership interest in ERC, (v) other
         claims which Pledgor now has or may in the future acquire against ERC
         and its property with respect to the Pledgor's membership interest in
         ERC, (vi) proceeds of any liquidation upon the dissolution of the ERC
         and winding up of its affairs, (vii) general
<PAGE>
         intangibles for money due or to become due (as described in Section
         9-406 of the UCC) from ERC with respect to the Pledgor's membership
         interest in ERC, (viii) all certificates, instruments, or other
         writings representing or evidencing any of the foregoing or any portion
         thereof, and (ix) other rights of Pledgor to receive any proceeds,
         distributions or other payments of any kind whatsoever from or in
         respect of Pledgor's membership interest in ERC, provided, that, in no
         event shall Pledgee have any interest in any amounts owing, paid, or to
         be paid by ERC to Pledgor as the purchase price for any receivables and
         the related rights thereto in connection with any Permitted ERC
         Financing (all of the foregoing being collectively referred to as the
         "Pledged LLC Interest").

         Section 3. Certain Understandings of the Parties.

              (a) The parties acknowledge and agree that the Pledged LLC
Interest constitutes general intangibles (as defined in Section 9-102(a)(42) of
the UCC); and (ii) the Pledgor represents and warrants that (1) neither the
Pledged LLC Interest nor any portion thereof is or will be traded in and/or
dealt in on securities exchanges or securities markets, (2) neither the Pledged
LLC Interest nor the Articles of Organization of ERC will provide that the
Pledged LLC Interest constitutes securities governed by the UCC, (3) the Pledged
LLC Interest is not and will not be investment company securities within the
meaning of Section 8-103 of the UCC, and (4) the Pledged LLC Interest is not
held in a securities account by the Pledgor.

              (b) To better assure the perfection of the security interest of
the Pledgee in the Pledged LLC Interest, concurrently with the execution and
delivery of this Agreement, the Pledgor shall send written instructions in the
form of Exhibit A hereto to ERC, and shall cause ERC to, and ERC shall, deliver
to the Pledgor the Confirmation Statement and Instruction Agreement in the form
of Exhibit B hereto pursuant to which ERC will confirm that it has registered
the pledge effected by this Agreement on its books and agrees to comply with the
instructions of Pledgee in respect of the Pledged LLC Interest without further
consent of the Pledgor or any other Person.

         Section 4. Representations, Warranties and Covenants of Pledgor -
General. Pledgor hereby represents, warrants and covenants as follows:

              (a) Pledgor (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted, and
(ii) has filed or caused to be filed all federal and state tax returns which are
required to be filed and has paid or caused to be paid all amounts of taxes
required to be paid by it, except for such taxes (x) as are being contested in
good faith by proper proceedings and (y) against which adequate reserves shall
have been established in accordance with and to the extent required by GAAP.

              (b) The execution, delivery and performance by the Pledgor of this
Agreement will not contravene or constitute a default under any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Pledgor, the Amended and Restated Limited Liability Operating Agreement
of ERC dated as of October 24, 2001, as amended by that certain

                                       2
<PAGE>
Amendment dated July 31, 2002 (as amended, the "LLC Agreement") or any material
agreement to which the Pledgor or ERC is a party or by which any property of
either of them is bound, and will not result in the creation or imposition of
any Lien on any of the Collateral pursuant to any requirement of law or
contractual obligation except for (i) the Liens created pursuant to this
Agreement, and (ii) Liens (x) securing taxes, assessments, governmental charges
or levies not yet delinquent or the payment of which is being contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves have been established in accordance with GAAP and which do
not, singly or in the aggregate, adversely affect in any material respect the
Collateral or the Pledgor's ownership interest therein, and (y) arising by
operation of law securing any amount not yet delinquent or the payment of which
is being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves have been established in accordance
with GAAP and which do not, singly or in the aggregate, adversely affect in any
material respect the Collateral or the Pledgee's ownership interest therein (the
Liens described in the foregoing clauses (i) through (ii) collectively, the
"Permitted Liens").

              (c) Pledgor acknowledges that UCC financing statements have been
or will be filed in connection with the perfection of the security interest
granted hereby. Pledgor understands that Pledgee has relied on Pledgor's
representations set forth in the Credit Agreement and the Officer's Certificate
delivered in connection therewith as to jurisdiction of organization, location
of chief executive offices, name, and transactions involving merger in order to
conduct appropriate UCC financing statement searches with respect to the
Pledgor. Pledgor covenants and agrees that Pledgor will not change its name,
identity or corporate structure at any time during the term of this Agreement in
any way that would make any financing statement or continuation statement filed
in connection with this Agreement seriously misleading within the meaning of
Section 9-506, 9-507 or 9-508 of the UCC unless it shall have given the Pledgee
at least 30 days' prior written notice thereof and causes such financing
statements or continuation statement to be amended or a new financing statement
to be filed. The Pledgor shall give the Pledgee 15 days' prior written notice of
any relocation of its chief executive office or jurisdiction of incorporation.

              (d) This Agreement is the valid and binding obligation of Pledgor,
enforceable in accordance with its terms, except as enforcement may be limited
by bankruptcy and other similar laws affecting creditors' rights generally.

              (e) No consent or authorization of, filing with, or other act by
any governmental authority and no consent of any other person or entity is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement that has not already been obtained.

              (f) Except as expressly provided for in the Credit Agreement or
herein, Pledgor shall not sell, assign, transfer, pledge or otherwise dispose of
any portion of the Collateral, or contract to do so without the written consent
of the Pledgee.

              (g) Pledgor will advise Pledgee promptly, in reasonable detail, of
(i) any Lien on, or claim asserted against, any portion of the Collateral, other
than Permitted Liens, and (ii) the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the value of the
Collateral or on the Liens created hereunder.

                                       3
<PAGE>
              (h) Pledgor will not take or omit to take any action, the taking
or the omission of which would result in an alteration or impairment of the
Collateral or the security of this Agreement.

              Section 5. Representations, Warranties and Covenants of Pledgor -
Pledged LLC Interest. Pledgor hereby represents, warrants and covenants as
follows:

              (a) ERC (i) is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
all company powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted, and
(ii) has filed or caused to be filed all federal and state tax returns which are
required to be filed and has paid or caused to be paid all amounts of taxes
required to be paid by it, except for such taxes (x) as are being contested in
good faith by proper proceedings and (y) against which adequate reserves shall
have been established in accordance with and to the extent required by GAAP.

              (b) Pledgor is the sole member of ERC.

              (c) As of the date hereof, Dean A. Christiansen, Lord SPV, is the
sole Independent Manager (as defined in the LLC Agreement) of ERC, and
Christopher D. Cerf and Peter T. Levine are the only Managers (as defined in the
LLC Agreement) of ERC.

              (d) Pledgor owns the Pledged LLC Interest free and clear of any
Liens, other than Permitted Liens.

              (e) Pledgee has and shall have a valid, enforceable and perfected
first priority Lien on the Pledged LLC Interest and the proceeds thereof. No
security agreement, financing statement or other public notice with respect to
all or any part of the Pledged LLC Interest is on file or of record in any
public office, except as may be filed pursuant to the terms of this Agreement.

              (f) Pledgor's membership interest in ERC has been duly authorized,
validly issued and is fully paid and non-assessable. Pledgor has paid in full
its capital contribution to ERC as recorded on the books and records of ERC,
and, except as set forth in the Merrill Loan Agreement, Pledgor is not required
to contribute any additional amounts to the capital of ERC.

              (g) No litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the knowledge of the
Pledgor, threatened by or against ERC or against any of its properties or
assets.

              (h) Pledgor will not create, incur or permit to exist, will defend
the Pledged LLC Interest against, and will take such other action as is
necessary to remove, any Lien or claim on or to the Pledged LLC Interest, other
than the Lien created by this Agreement and any other Permitted Liens, and will
defend the right, title and interest of the Pledgee in, to and under the Pledged
LLC Interest against the claims and demands of all persons whomsoever.

              (i) The LLC Agreement does not and will not prohibit, restrict or
otherwise interfere with Pledgee's rights under this Agreement, including, but
not limited to Pledgee's right, in the event of a default by Pledgor, under
Section 6 of this Agreement, to receive and

                                       4
<PAGE>
retain as additional collateral all distributions and interest in respect of the
Pledged LLC Interests.

              (j) Pledgor will not cause or permit ERC to violate the terms of
the LLC Agreement. Except as provided in the Merrill Loan Agreement, the
Purchase and Contribution Agreement, and with respect to any Permitted ERC
Financing, Pledgor will not cause or permit ERC to (i) acquire any assets, (ii)
transfer or dispose of all or any portion of any asset (including by license,
lease, participation or encumbrance of any kind), (iii) incur any indebtedness,
(iv) issue any guarantees, or (v) otherwise incur or contract to incur any
obligation of any kind whatsoever.

         Section 6. Default; Remedies.

              (a) If Pledgor fails to perform any of the Secured Obligations in
accordance with their terms, (i) the Pledgee may exercise, in addition to all
other rights and remedies granted to it in the Credit Agreement and this
Agreement, all rights and remedies of a secured party under the applicable UCC,
and (ii) Pledgor shall pay Pledgee's costs of collection, including the
reasonable fees and expenses of counsel, and the obligation to pay such costs
shall constitute an additional obligation secured by the Collateral.

              (b) If any notice of a proposed sale or other disposition of the
Pledged LLC Interest shall be required by Law, such notice shall be deemed
reasonable and proper if given as provided herein at least 10 Business Days
before such sale or other disposition.

         Section 7. Miscellaneous.

              (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The parties hereto hereby
submit to the nonexclusive jurisdiction of the courts of the State of New York
and the courts of the United States located in the State of New York for the
purpose of adjudicating any claim or controversy arising under this Agreement,
and for such purpose, to the extent they may lawfully do so, waive any objection
which they may now or hereafter have to such jurisdiction or to venue therein
and any claim of inconvenient forum with respect thereto. Nothing in this
Section 7(a) shall affect the right of Pledgee (or its assignee) to bring any
action or proceeding against the Pledgor in the courts of other jurisdictions.
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF, IN CONNECTION WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM ESTABLISHED BY THIS AGREEMENT
OR ANY OTHER CONTRACT, INSTRUMENT, DOCUMENT OR AGREEMENT ENTERED IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF
ANY OTHER PERSON.

              (b) All notices, requests, consents and demands hereunder shall be
in writing and shall together with any payments be personally delivered or sent
postage prepaid to the intended

                                       5
<PAGE>
party at the address set forth below or such other address as a party may
specify by written notice to the other party:

         If to Pledgor:

         Edison Schools Inc.
         521 Fifth Avenue, 11th Floor
         New York, New York 10175
         Attention: General Counsel
         Telephone: (212) 419-1600
         Telecopy:   (212) 419-1705

         with a copy to:

         Coudert Brothers LLP
         114 Avenue of the Americas
         New York, New York 10036
         Attention:  Joseph D. Farrell, Esq.
         Telephone:  (212) 626-4489
         Telecopy:    (212) 626-4120

         If to Pledgee:

         School Services LLC
         c/o Leeds  Weld & Co.
         660 Madison Avenue - 15th Floor
         New York, New York 10021
         Attention: Jeffrey T. Leeds
         Telephone:  (212) 835-2002
         Telecopy:    (212) 835-2020

         with a copy to:

         Simpson Thacher & Bartlett
         425 Lexington Avenue
         New York, New York 10017
         Attention: Gary Horowitz, Esq.
         Telephone: (212) 455-7113
         Telecopy: (212) 455-2502

                                       6
<PAGE>
              (c) The date or mailing of a notice or other statement shall be
deemed the date the notice is given or statement rendered.

              (d) The terms of this Agreement may be waived, altered or amended
only in writing signed by the parties hereto.

              (e) This Agreement shall be binding on the parties hereto and
their respective successors and assigns; provided, however, that the Pledgor may
not assign any of its rights or delegate any of its duties hereunder without the
prior written consent of the Pledgee. Subject to the provisions of the Credit
Agreement, no provision of this Agreement shall in any manner restrict the
ability of the Pledgee to assign, participate, grant security interests in, or
otherwise transfer all or any portion of the Pledgee's interest in this
Agreement and the Collateral.

              (f) This Agreement may be executed in counterparts, which together
shall constitute one and the same instrument.

              (g) No delay or failure by the Pledgee in the exercise of any
right or remedies shall constitute a waiver thereof, and no single or partial
exercise by the Pledgee of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.

              (h) The invalidity or unenforceability of any provision(s) of this
Agreement shall not affect any other provision hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provision were
omitted.

              (i) All representations and warranties of Pledgor contained in
this Agreement shall be true and correct at the time of execution of this
Agreement and until this Agreement terminates.

              (j) This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior arrangements or understandings, oral or written, with respect to the
subject matter hereof.

              (k) When the obligations secured hereby are paid in full or
released in writing by the Pledgee (or its assignees), this Agreement shall
terminate.

              (l) The Pledgor shall, upon the request of the Pledgee, from time
to time, execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, within a reasonable period following such request, further
information, instruments or documentation and take such further action as may
reasonably be requested by Pledgee to effectuate the intention, performance and
provisions of this Agreement.

                                       7
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.

                                                   EDISON SCHOOLS INC.

                                                   By:  /s/ David Graff
                                                        ------------------------
                                                   Name:   David Graff
                                                   Title:  Senior Vice President
                                                           and General Counsel

                                                   SCHOOL SERVICES LLC

                                                   By:  /s/ Robert Bernstein
                                                        ------------------------
                                                   Name:   Robert Bernstein
                                                   Title:  Treasurer

                                       8
<PAGE>
                                                                       EXHIBIT A

                            FORM OF NOTICE OF PLEDGE

Dated:          , 2002
       -------

To: Edison Receivables Company LLC (the "LLC")
    [Address]

Dear Sirs:

                  In accordance with the requirements of that certain Pledge
Agreement dated as of July 31, 2002 (as amended, supplemented and otherwise
modified from time to time, the "Pledge Agreement") between Edison Schools Inc.,
as pledgor (the "Pledgor") and School Services LLC, (the "Pledgee") (defined
terms used herein as therein defined), you are hereby instructed,
notwithstanding your and our understanding that the Pledged LLC Interest is not
a security under the UCC, as a precaution in the event that such interest was
nevertheless held to be a security, to mark all appropriate books and records of
the LLC to evidence the pledge of the Pledged LLC Interest in favor of School
Services LLC.

                  You are hereby further authorized and instructed to execute
and deliver to the Pledgee a Confirmation Statement and Instruction Agreement,
substantially in the form of Exhibit B to the Pledge Agreement and, to the
extent provided more fully therein, to comply with the instructions of the
Pledgee in respect of the Pledged LLC Interest without further consent of, or
notice to, the undersigned. The Pledged LLC Interests do not include any rights
to vote as a member of the LLC. Notwithstanding the foregoing, the Pledgor will
be entitled to receive payment for the Pledged LLC Interests until such time as
you receive conflicting instructions from Pledgee.

                                                    Very truly yours,

                                                     EDISON SCHOOLS INC.

                                                     By:
                                                         -----------------------
                                                         Name:
                                                         Title:

Acknowledged:

SCHOOL SERVICES LLC

By:
   --------------------------
Name:
Title:
<PAGE>
                                                                       EXHIBIT B

            FORM OF CONFIRMATION STATEMENT AND INSTRUCTION AGREEMENT

Dated:   ____________, 2002

To:      School Services LLC.

Pursuant to the requirements of that certain Pledge Agreement dated as of July
31, 2002 (as amended, supplemented or otherwise modified from time to time, the
"Pledge Agreement"), between School Services LLC as pledgee (the "Pledgee") and
Edison Schools Inc. a Delaware corporation (the "Pledgor") (defined terms used
herein as therein defined), this Confirmation Statement and Instruction
Agreement relates to the Pledged LLC Interest in the undersigned Edison
Receivables Company LLC (the "LLC").

The Pledged LLC Interest is not (i) comprised of "investment company securities"
(within the meaning of Section 8-103 of the UCC), (ii) dealt in or traded on
securities exchanges or in securities markets, or (iii) held in a securities
account by the Pledgor. No term of any Pledged LLC Interest provides that it is
a "security" (within the meaning of Sections 8-102(a)(15) and 8-103 of the UCC).

Nevertheless, in the event that the Pledged LLC Interest should be determined to
be "securities" (within the meaning of Sections 8-102(a)(15) and 8-103 of the
UCC), for purposes of perfecting the security interest of the Pledgee therein,
the LLC agrees as follows:

On the date hereof, the registered owner of 100% of Edison Receivables Company
LLC is: Edison Schools Inc.

The registered pledgee of the Pledged Interests is:  School Services LLC

There are no liens of the LLC on the Pledged LLC Interest or any adverse claims
thereto for which the LLC has a duty under Section 8-403 of the UCC. The LLC has
by book-entry registered the Pledged LLC Interest in the name of the registered
pledgee on or before the date hereof. No other pledge is currently registered on
the books and records of the LLC with respect to the Pledged LLC Interest.

The LLC agrees to: (i) comply with the instructions of the Pledgee, as
registered pledgee, without any further consent from the Pledgor or any other
Person, in respect of the Pledged LLC Interest; and (ii) disregard any request
made by the Pledgor or any other Person which contravenes the instructions of
the Pledgee with respect to the Pledged LLC Interest.

Edison Receivables Company LLC

By:_________________________
Name:
Title:<PAGE>
                                                                   Exhibit 10.47

                                    GUARANTY

         THIS GUARANTY (this "Guaranty") is made as of the 31st day of July,
2002, by 110th and 5th ASSOCIATES, LLC, a New York limited liability company
(the "Guarantor"), in favor of SCHOOL SERVICES LLC, a Delaware limited liability
company (the "Lender").

                                   WITNESSETH:

         WHEREAS, Lender, pursuant to the terms of that certain Credit and
Security Agreement (as amended from time to time the "Credit Agreement"), dated
as of the date hereof by and among Lender, Guarantor, Edison Schools Inc.
("Borrower"), and Bayard Rustin Charter School, LLC, a Florida limited liability
company, is making a term loan to Borrower in the original principal amount of
Ten Million and 00/100 Dollars ($10,000,000.00) (the "Term Loan"); and

         WHEREAS, the Term Loan is evidenced by that certain Term Note (the
"Term Note"), dated as of the date hereof made by Borrower and payable to Lender
in the original principal amount of Ten Million and 00/100 Dollars
($10,000,000.00); and

         WHEREAS, Lender, pursuant to the terms of the Credit Agreement, is
making a revolving loan to Borrower in the original principal amount of up to
Ten Million and 00/100 Dollars ($10,000,000.00) (the "Revolving Loan"; together
with the Term Loan, collectively, the "Loans"); and

         WHEREAS, the Revolving Loan is evidenced by that certain Revolving Note
(the "Revolving Note"; together with the Term Note, collectively, the "Notes"),
dated as of the date hereof made by Borrower and payable to Lender in the
original principal amount of Ten Million and 00/100 Dollars ($10,000,000.00)
(the Credit Agreement, the Notes and all other loan documents evidencing,
governing or securing the Loans being hereinafter individually and collectively
referred to as the "Facility Documents"); and

         WHEREAS, it is a condition, among others, to the Lender's willingness
to make any Loans to the Borrower that the Guarantor execute and deliver this
Guaranty pursuant to which the Guarantor shall guaranty the payment and
performance of all Secured Term Obligations (as defined in the Credit Agreement)
of the Borrower under and in connection with the Credit Agreement; and

         WHEREAS, in consideration of the direct and indirect benefits to be
received by the Guarantor as a result of the financing provided under the Credit
Agreement, and in order to induce the Lender to enter into the Credit Agreement,
the Guarantor has agreed to execute and deliver this Guaranty for the benefit of
the Lender;

         NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

         SECTION 1 Guaranty. The Guarantor hereby unconditionally guarantees the
full and punctual payment when due (whether at stated maturity, upon
acceleration, or otherwise) and the
<PAGE>
prompt performance of all of the Secured Term Obligations now or hereafter owing
by the Borrower to the Lender under the Facility Documents and all costs and
expenses incurred by the Lender in connection with the enforcement of this
Guaranty (all of the foregoing collectively, the "Guaranteed Obligations"). Upon
failure by the Borrower to pay punctually any of the Secured Term Obligations
when due, the Guarantor shall forthwith on demand pay such unpaid amount at the
place and in the manner specified in the Credit Agreement or relevant Facility
Document. This Guaranty is a guaranty of payment and not of collection. This
Guaranty is secured by the Harlem Mortgage (as defined in the Credit Agreement).

         SECTION 2 Guaranty Unconditional. The obligations of the Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by any of the following, whether occurring before or after receipt by
the Lender of notice of termination of this Guaranty:

              (i) any extension, renewal, settlement, compromise, waiver or
release with respect to any obligation of the Borrower under the Credit
Agreement or any other Facility Document, by operation of law or otherwise, or
any obligation of any other guarantor of any of the Guaranteed Obligations;

              (ii) any modification, amendment or supplement to the Credit
Agreement or any other Facility Document;

              (iii) any change in the corporate existence, structure or
ownership of Borrower or any other guarantor of any of the Guaranteed
Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or its assets or any other guarantor of any of
the Guaranteed Obligations or its assets, or any resulting release or discharge
of any obligation of the Borrower or any other guarantor of any of the
Guaranteed Obligations;

              (iv) the existence of any claim, setoff or other right which the
Guarantor may have at any time against the Borrower, any other guarantor of any
of the Guaranteed Obligations, the Lender or any other person, whether in
connection with the Credit Agreement, any other Facility Document, or any
unrelated transactions;

              (v) the invalidity or unenforceability, regardless of the reason,
of the Credit Agreement, any other Facility Document or any provision thereunder
concerning rights or obligations of the Borrower or any other guarantor of any
of the Guaranteed Obligations;

              (vi) any provision of applicable law or regulation purporting to
prohibit payment by the Borrower or any other guarantor of the Guaranteed
Obligations of the principal under or interest on the Credit Agreement or any
other amount payable by the Borrower under any other Facility Document;

              (vii) any failure or omission to enforce any right, power or
remedy: (a) under the Credit Agreement or any other Facility Document, or (b)
with respect to any or all of the Guaranteed Obligations;

                                       2
<PAGE>
              (viii) the application of payments received from any source to the
payment of indebtedness other than the Guaranteed Obligations, any part thereof
or indebtedness which is otherwise not covered by this Guaranty even though the
Lender might lawfully have elected to apply such payments to all or any part of
the Guaranteed Obligations or to indebtedness which is not covered by this
Guaranty;

              (ix) any release, nonperfection or invalidity of any direct or
indirect security, regardless of when granted, for any obligation of the
Borrower under the Credit Agreement or any other Facility Document, or any
release or invalidity of obligations of any other guarantor of any of the
Guaranteed Obligations; or

              (x) any other act, omission or delay of any kind by the Borrower,
any other guarantor of the Guaranteed Obligations, the Lender or any other
person, or any other circumstance whatsoever, which might, but for the
provisions of this Section 2, constitute a legal or equitable discharge of the
Guarantor's obligations hereunder.

         SECTION 3 Discharge Only Upon Payment In Full; Reinstatement In Certain
Circumstances. The obligations of the Guarantor hereunder shall remain in full
force and effect until the payment in full of all Guaranteed Obligations. If at
any time any payment of principal under or interest on the Credit Agreement or
relevant Facility Document or any other amount payable by the Borrower or any
other party on account of the Guaranteed Obligations is voided or must be
otherwise returned for whatever reason, including, without limitation in the
event of the insolvency, bankruptcy or reorganization of the Borrower, the
obligations of the Guarantor hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.

         SECTION 4 Guarantor Waivers. The Guarantor irrevocably waives: (i)
notice of the acceptance hereof, as well as presentment, demand, and protest
under the Credit Agreement or any other Facility Document; (ii) any requirement
that notice be given at any time any action is taken by any person against the
Borrower, any other guarantor of the Guaranteed Obligations, any collateral
securing the Guaranteed Obligations, or any other person; and (iii) to the
fullest extent permitted by law, any notice not provided for herein.

         SECTION 5 No Waivers by Lender. No failure or delay by the Lender in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty, the Credit Agreement and any
other Facility Documents shall be cumulative and not exclusive of any rights or
remedies provided by law.

         SECTION 6 Subrogation and Subordination. The Guarantor agrees not to
assert any right, claim or cause of action including, without limitation, a
claim for subrogation, reimbursement, indemnification or otherwise against the
Borrower arising out of or by reason of this Guaranty or the obligations
hereunder including, without limitation, the payment or securing or purchasing
of any of the Guaranteed Obligations by the Guarantor unless and until the
Guaranteed Obligations are paid in full and all commitments to lend under the
Credit Agreement

                                       3
<PAGE>
or relevant Facility Document are terminated. The Guarantor agrees that any and
all claims of the Guarantor against the Borrower or any of the Borrower's
subsidiaries, any endorser or any other guarantor of all or any part of the
Guaranteed Obligations, or against any of their respective properties, shall be
subordinate and subject in right of payment to the prior payment, in full, of
all principal and interest, all reasonable costs of collection (including
reasonable attorneys' and paralegals' fees and expenses) and any other
liabilities or obligations owing to the Borrower which may arise either with
respect to or under the Credit Agreement or any other Facility Document.
Notwithstanding any right of the Guarantor to ask, demand, sue for, take or
receive any payment from the Borrower, all rights, liens and security interests
(if any) of the Guarantor, whether now or hereafter arising or howsoever
existing, in any assets of the Borrower (whether constituting part of any
security or collateral which may be given to the Lender to secure payment of the
Guaranteed Obligations or otherwise) shall be and hereby are subordinated to the
rights of the Lender in those assets. The Guarantor shall have no right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until all of the Guaranteed Obligations
shall have been fully paid and satisfied and all commitments to lend under the
Credit Agreement have been terminated. If all or any part of the assets of the
Borrower, or the proceeds thereof, are subject to any distribution, division or
application to the creditors of the Borrower, whether partial, complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, Guarantor waives any rights it may have in or to the
foregoing.

         SECTION 7 Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Borrower under the Credit Agreement or any other
Facility Document is stayed upon the bankruptcy of the Borrower, all such
amounts otherwise subject to acceleration under the terms of the Credit
Agreement or any other Facility Document shall nonetheless be payable by the
Guarantor hereunder forthwith on demand made by the Lender.

         SECTION 8 Guarantor Obligations Without Regard to Setoff, Counterclaim
or Taxes. All payments required to be made by the Guarantor hereunder shall be
made without setoff or counterclaim and free and clear of, and without deduction
or withholding for or on account of, any present or future taxes, levies,
imposts, duties or other charges of any nature imposed by any government or any
political or taxing authority, provided however, that if the Guarantor is
required by law to make such deduction or withholding, the Guarantor shall
forthwith pay to the Lender, such additional amount as results in the net amount
received by the Lender, equaling the full amount which would have been received
by the Lender had no such deduction or withholding been made.

         SECTION 9 Setoff Rights of Lender. Without limiting the rights of the
Lender under applicable law, the Guarantor authorizes the Lender to apply toward
the payment of all or any part of such Guaranteed Obligations any monies,
credits or other property belonging to the Guarantor, at any time held by or
coming into the possession of the Lender, or any of its respective affiliates,
custodians or nominees.

         SECTION 10 Notices. Any notice required or permitted to be given under
this Guaranty shall be sent by United States mail (postage prepaid), telegraph
or telex (charges prepaid),

                                       4
<PAGE>
facsimile transmission or nationally established overnight courier service (with
all charges prepaid), addressed, at the address set forth for each party on the
signature page hereto, or at such other address as may be designated by either
party in a notice sent in accordance with the terms of this Section 10 to the
other party, and shall be deemed received (i) when received by the addressee if
sent via the United States mail; (ii) when delivered to the appropriate office
or machine operator for transmission if sent by telegraph or telex (answerback
confirmed in the case of telexes); (iii) when receipt thereof by the addressee
is confirmed by facsimile confirmation if sent by facsimile transmission; and
(iv) one business day after delivery to an overnight courier service if sent by
such service.

         SECTION 11 Successors and Assigns. This Guaranty is for the benefit of
the Lender and its respective successors and permitted assigns, subject to the
terms and provisions of Section 9 of the Credit Agreement. In the event of an
assignment of any amounts payable under the Credit Agreement or any other
Facility Document in accordance with the terms and provisions of Section 9 of
the Credit Agreement, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Guaranty shall be binding upon the Guarantor and its respective successors and
permitted assigns.

         SECTION 12 Changes in Writing. Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated orally. Any change,
waiver, discharge or termination shall be in writing signed by the Guarantor and
the Lender.

         SECTION 13 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS GUARANTY
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES (EXCEPT FOR NEW YORK
GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402). THE GUARANTOR HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND ANY NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN, NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS GUARANTY, ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREIN OR THEREBY. THE GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH PROCEEDING IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

         THE GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE AT THE OPTION
OF LENDER BY ANY ONE OF THE FOLLOWING (A) DELIVERY IN PERSON, (B) BY COURIER, OR
(C) CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID, TO THE GUARANTOR AT ITS
ADDRESS NOTED BELOW.

         ANY PROCESS SERVED BY MAIL SHALL BE COMPLETE ON THE DATE IT IS MAILED.
ANY PROCESS SERVED BY ANY OTHER MANNER AFOREMENTIONED SHALL BE COMPLETE ON THE
DATE IT IS DELIVERED. THE GUARANTOR

                                       5
<PAGE>
CONSENTS TO SERVICE OF PROCESS AS AFORESAID. THE GUARANTOR ALSO WAIVES ANY
DEFECT IN SERVICE CAUSED BY ITS FAILURE TO NOTIFY LENDER IN WRITING OF ANY
CHANGE OF ADDRESS.

         NOTHING HEREIN SHALL AFFECT THE RIGHT OF LENDER TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR THE RIGHT OF LENDER TO BRING ANY ACTION
OR PROCEEDING AGAINST THE GUARANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.

         SECTION 14 WAIVER OF JURY TRIAL. THE GUARANTOR AND, BY ITS ACCEPTANCE
HEREOF, THE LENDER EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
GUARANTY, THE NOTES, ANY OTHER FACILITY DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY BANK, ANY
AGENT-RELATED PERSON, PARTICIPANT OR LENDER, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF,
THE LENDER EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE GUARANTOR AND,
BY ITS ACCEPTANCE HEREOF, THE LENDER FURTHER AGREE THAT THEIR RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS GUARANTY, THE NOTES OR ANY OTHER FACILITY
DOCUMENTS OR ANY PROVISION THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY AND ANY
OTHER FACILITY DOCUMENTS.

                         [NO FURTHER TEXT ON THIS PAGE]

                                       6
<PAGE>
         IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed, by its authorized officer as of the day and year first above written
and delivered to the Lender.

                                    110th and 5th ASSOCIATES, LLC

                                    By:    /s/ David Graff
                                         ---------------------------------------
                                         Name:   David Graff
                                         Title:  Senior Vice President and
                                                 General Counsel

                                    NOTICE ADDRESS:
                                    c/o Edison Schools Inc.
                                    521 Fifth Avenue
                                    11th Floor
                                    New York, New York 10175
                                    Attention: General Counsel
                                    (f) (212) 419-1868

                                    LENDER NOTICE ADDRESS

                                    c/o Leeds Weld & Co.
                                    660 Madison Avenue
                                    15th Floor
                                    New York, New York 10021
                                    Attention: Robert A. Bernstein

                                       7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]