Document:

EXHIBIT
      10.1

     

    LOAN
      AGREEMENT

     

    LOAN
      AGREEMENT
      (this
“Agreement”),
      is
      made and entered into as of the 31st
      day of
      December, 2007, by and between COMVEST
      INVESTMENT PARTNERS III, L.P.,
      a
      Delaware limited partnership (the “Lender”),
      and
EVCI
      CAREER COLLEGES HOLDING CORP., a
      Delaware corporation (the “Borrower”);

     

    WITNESSETH
      :

     

    WHEREAS,
      through
      various subsidiaries, the Borrower is engaged in the business of providing
      adult
      career training on a for-profit basis (collectively, the “Business”);
      and

     

    WHEREAS,
      the
      Borrower has requested the Lender to extend to the Borrower loans in the
      aggregate principal amount of up to $700,000, the proceeds of which will be
      used
      by the Borrower (i) to pay certain expenses related to the cessation of business
      operations by Interboro (as such term is hereinafter defined), and (ii) for
      the
      Borrower’s working capital and other general corporate purposes;
      and

     

    WHEREAS,
      the
      Lender is willing and able to make such loans to the Borrower on the terms
      and
      conditions of this Agreement;

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual covenants herein contained, the
      parties hereby agree as follows:

     

    
      	I.	
              DEFINITIONS

            

    

     

    Section
      1.01. Defined
      Terms.
      In
      addition to the other terms defined elsewhere in this Agreement, as used herein,
      the following terms shall have the following meanings:

     

    “Affiliate”
shall
      mean, with respect to any Person, any other Person in control of, controlled
      by,
      or under common control with the first Person, and any other Person who has
      a
      substantial interest, direct or indirect, in the first Person or any of its
      Affiliates, including, without limitation, any officer or director of the first
      Person or any of its Affiliates; for the purpose of this definition, a
“substantial interest” shall mean the direct or indirect legal or beneficial
      ownership of more than five (5%) percent of any class of stock or similar
      interest. 

     

    “Agreement”
shall
      mean this Loan Agreement as it may from time to time be amended, modified,
      supplemented and/or restated.

     

    “Applicable
      Law”
shall
      mean all applicable provisions of all (a) constitutions, statutes, ordinances,
      rules, regulations and orders of all governmental and/or quasi-governmental
      bodies, (b) Government Approvals, and (c) orders, judgments and decrees of
      all
      courts and arbitrators.

     

    “Approved
      Budget”
shall
      mean the month-by-month budget of the Borrower dated December 31, 2007 which
      has
      been approved by the Lender, as same may be amended or modified from time to
      time by written agreement of the Lender and the Borrower. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Business
      Day”
shall
      mean a day other than (a) a Saturday, (b) a Sunday, or (c) in the case of a
      day
      on which any payment hereunder is to be made in the State of Florida or from
      the
      State of New York, a day on which commercial banks in the State of Florida
      or
      the State of New York are authorized or required by law to close.

     

    “Closing
      Date”
shall
      mean the date of the funding of the initial Loan to the Borrower.

     

    “Closing
      Fee”
shall
      mean the sum of $35,000, which shall be payable in accordance with Section
      2.01(c) of this Agreement.

     

    “Collateral”
shall
      have the meaning ascribed thereto in the security provisions of the Harris
      Credit Agreement and related loan documents and/or in the Security
      Agreement.

     

    “Commitment”
shall
      mean the commitment of the Lender, subject to the terms and conditions of this
      Agreement and the other Loan Documents, to make Loans to the Borrower from
      time
      to time in an aggregate principal amount not exceeding $700,000.

     

    “Contract”
shall
      mean any indenture, agreement (other than this Agreement), other contractual
      restriction, lease in which the Borrower or any Subsidiary is a lessor or
      lessee, license, instrument, or Organic Documents of the Borrower or any
      Subsidiary.

     

    “Convertible
      Notes”
shall
      mean the Secured Convertible Promissory Notes dated May 23, 2007 issued by
      the
      Borrower to the Lender, Dr. Arol I. Buntzman, John J. McGrath, Joseph Alperin
      and Stephen Schwartz, respectively.

     

    “Default”
shall
      mean any of the events specified in Article VII hereof, whether or not any
      requirement for the giving of notice, the lapse of time, or both, or any other
      condition, has been satisfied. 

     

    “Disclosure
      Schedule”
shall
      mean the Disclosure Schedule delivered by the Borrower to the Lender in
      conjunction with the execution and delivery of this Agreement, the numbered
      schedules therein corresponding to the Section numbers in this
      Agreement.

     

    “Event
      of Default”
shall
      mean any of the events specified in Article VII hereof, provided that any
      requirement for the giving of notice, the lapse of time, or both, or any other
      condition, has been satisfied.

     

    “Existing
      Events of Default”
shall
      mean those events of default set forth on Schedule 2 attached to the Forbearance
      Agreement.

     

    “Forbearance
      Agreement”
shall
      mean the written forebearance or written amendment of the Harris Credit
      Agreement and related loan documents, restructuring the terms thereof in a
      manner satisfactory to the Lender and the Borrower.

     

    “Government
      Approval”
shall
      mean an authorization, consent, non-action, approval, license or exemption
      of,
      registration or filing with, or report to, any governmental or
      quasi-governmental department, agency, body or other unit.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Guarantors”
shall
      mean TCI, PSB, Interboro and Interboro Holding.

     

    “Guaranty”
shall
      mean the Guaranty Agreement, dated as of the Closing Date, pursuant to which
      the
      Guarantors will guaranty the full and timely payment and performance of all
      Obligations.

     

    “Harris
      Credit Agreement”
shall
      mean the Second Amended and Restated Credit Agreement dated as of September
      16,
      2005 (as heretofore amended) among the Borrower, the guarantors parties thereto,
      and Harris N.A., which has been assigned by Harris N.A. to the Lender or an
      Affiliate of the Lender.

     

    “Interboro”
shall
      mean Interboro Institute, Inc., a New York corporation, which is a wholly-owned
      Subsidiary of the Borrower.

     

    “Interboro
      Holding”
shall
      mean Interboro Holding, Inc., a Delaware corporation, which is a wholly-owned
      Subsidiary of the Borrower.

     

    “Intercreditor
      Agreement”
shall
      mean the Intercreditor Agreement dated April 24, 2007 by and among the Lender
      or
      an Affiliate of the Lender (as assignee of the “Senior Debt” thereunder
      previously held by Harris N.A.) and the holders of certain junior secured
      promissory notes of the Borrower.

     

    “Loan(s)”
shall
      mean the loans in the aggregate principal amount of up to $700,000 to be made
      by
      the Lender to the Borrower pursuant to this Agreement.

     

    “Loan
      Documents”
shall
      mean, collectively, this Agreement, the Note, the Guaranty, the Security
      Agreement, and any and all agreements, instruments, certificates and other
      documents executed and delivered by the Borrower, or any Affiliate thereof
      pursuant to any of the foregoing Loan Documents.

     

    “Loan
      Party”
shall
      mean each of the Borrower and each of its Subsidiaries, and each other
      Guarantor.

     

    “Material
      Adverse Effect”
means
      any event, circumstance, condition, change or effect that is or that is
      reasonably likely to be materially adverse to (a) the business, assets,
      liabilities, results of operations or condition (financial or otherwise) of
      the
      Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan
      Party to perform any of its obligations under any of the Loan Documents, or
      (c)
      the validity or enforceability of any of the Loan Documents.

     

    “Maturity
      Date”
shall
      mean March 31, 2009.

     

    “Note”
shall
      mean the Promissory Note, dated the Closing Date, in the maximum principal
      amount of $700,000 issued by the Borrower and payable to the Lender or
      registered assigns, to represent the Loans, as same may be amended, modified,
      or
      supplemented and/or restated from time to time in accordance
      therewith.

     

    “Obligations”
shall
      mean the collective reference to all indebtedness and other liabilities and
      obligations of every kind and description owed by any Loan Party to the Lender
      from time to time under or pursuant to this Agreement, the Note and/or the
      other
      Loan Documents, and/or otherwise in respect of the Loans (including, without
      limitation, interest accruing during the pendency of any bankruptcy, insolvency,
      receivership or other similar proceeding, regardless of whether allowed or
      allowable in such proceeding), however evidenced, created or incurred, fixed
      or
      contingent, now or hereafter existing, due or to become due.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Organic
      Documents”
shall
      mean the certificate of incorporation, certificate of formation, certificate
      of
      limited partnership, trust agreement, by-laws, operating agreement, limited
      liability company agreement, limited partnership agreement or other such
      document of any Person.

     

    “Person”
shall
      mean any individual, partnership, limited partnership, corporation, limited
      liability company, banking association, business trust, joint stock company,
      trust, unincorporated association, joint venture, governmental authority or
      other entity of whatever nature.

     

    “PSB”
shall
      mean Pennsylvania School of Business, Inc., a Pennsylvania corporation, which
      is
      a wholly-owned Subsidiary of Interboro Holding.

     

    “Sale”
shall
      mean any transaction or series of related transactions (a) whereby a majority
      of
      the outstanding capital stock of the Borrower which ordinarily has voting power
      for the election of directors (including preferred stock counted on an “as
      converted” basis into Common Stock and Common Stock counted on a fully diluted
      basis) is sold, assigned or transferred, (b) whereby shares of capital stock
      of
      the Borrower which ordinarily have voting power for the election of directors
      (calculated in accordance with clause (a) of this definition) are issued, which
      shares constitute a majority of the outstanding capital stock of the of the
      Borrower which ordinarily has voting power for the election of directors
      (calculated as aforesaid) after giving effect to such transaction(s), (c) in
      which the Borrower is a constituent party to any merger or consolidation and
      as
      a result thereof (i) the holders of the outstanding capital stock of the
      Borrower which ordinarily has voting power for the election of directors
      (including preferred stock counted on an “as converted” basis into common stock)
      immediately prior to such merger or consolidation cease to own a majority of
      the
      outstanding capital stock of the Borrower which ordinarily has voting power
      for
      the election of directors (including preferred stock counted on an “as
      converted” basis into common stock), or (ii) the Borrower is not the surviving
      corporation, (d) whereby all or any material portion of the assets of the
      Borrower or any Subsidiary (other than the transfer of the shares of TCI and
      PSB
      pursuant to any “Restructuring” effected upon request of the Lender pursuant to
      the Subsidiary Revolving Credit Agreement) are sold, assigned or transferred,
      or
      (e) the consummation of any “Sale” under and as defined in the Subsidiary
      Revolving Credit Agreement.

     

    “Security
      Agreement”
shall
      mean the Security Agreement dated as of May 23, 2007 by and among the Borrower,
      its Subsidiaries and the Lender, as same may be amended, modified, supplemented
      and/or restated from time to time.

     

    “Subsidiary”
or
      “Subsidiaries”
shall
      mean the individual or collective reference to any corporation, limited
      liability company or other entity of which 50% or more of the outstanding shares
      of stock or other equity interests of each class having ordinary voting power
      and/or rights to profits (other than stock having such power only by reason
      of
      the happening of a contingency) is at the time owned by the Borrower, directly
      or indirectly through one or more Subsidiaries of the Borrower.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Subsidiary
      Revolving Credit Agreement”
shall
      mean the Revolving Credit Agreement of even date herewith by and among the
      Lender, TCI and PSB, as same may be amended, modified, supplemented and/or
      restated from time to time.

     

    “TCI”
shall
      mean Technical Career Institutes, Inc., a New York corporation, which is a
      wholly-owned Subsidiary of the Borrower.

     

    Section
      1.02. Use
      of
      Defined Terms.
      All
      terms defined in this Agreement shall have their defined meanings when used
      in
      the Note and the other Loan Documents and all certificates, reports or other
      documents made or delivered pursuant to his Agreement or any other Loan
      Document, unless otherwise defined therein or unless the specific context shall
      otherwise require.

     

    
      	II.	
              GENERAL
                TERMS

            

    

     

    Section
      2.01. The
      Loans.

     

    (a) Subject
      at all times to all of the terms and conditions of this Agreement, the Lender
      hereby agrees to make Loans to the Borrower (i) upon the satisfaction of the
      conditions precedent set forth in Article IV below, in the principal amount
      of
      $350,000, and (ii) upon written request of the Borrower made after the
      60th
      day
      after the Closing Date (but prior to the Maturity Date), in the principal amount
      of $350,000. The Commitment shall terminate and the principal of the Loans
      shall
      be due and payable in full on the Maturity Date, unless sooner due and payable
      in accordance with any other provisions of this Agreement.

     

    (b) The
      Borrower shall pay the Lender interest on the Loans at the rates per annum
      as in
      effect from time to time, and at the times and in the manner, in accordance
      with
      the Note. 

     

    (c) The
      Closing Fee shall be deemed earned upon the Closing Date, and shall not be
      refundable in whole or in part and shall not be subject to reduction or set-off
      under any circumstances. The Closing Fee shall be due and payable on the
      Maturity Date or the acceleration of the Obligations in accordance with this
      Agreement.

     

    (d) The
      Borrower shall have the right to prepay the Loans in whole or in part, without
      premium or penalty, at any time and from time to time; and the Borrower shall
      be
      required to make prepayment under certain circumstances as provided in Section
      2.03 below. Each such prepayment shall be accompanied by payment of all unpaid
      accrued interest on the principal amount being prepaid, accrued to the date
      of
      prepayment. Any and all prepayments shall be applied first to unpaid accrued
      interest and then to principal of the Loans, provided that, if an Event of
      Default has occurred and is continuing, then the application of any payments
      or
      prepayments shall be as determined by the Lender in its sole and absolute
      discretion. Any amounts prepaid may not be reborrowed.

     

    (e) The
      Loans
      shall be evidenced by the Note, the terms and conditions of which are hereby
      incorporated herein by reference and made a part hereof.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (f) The
      Loans
      and the other Obligations shall be secured by the Collateral. The Lender hereby
      consents, acknowledges and confirms that the Obligations shall be secured on
      a
pari passau
      basis
      with the “Senior Debt” under and as defined in the Intercreditor Agreement, and
      shall constitute “Secured Obligations” as defined in the Security Agreement
      secured on a pari passu
      basis
      with all other such Secured Obligations).

     

    Section
      2.02. Use
      of
      Proceeds.
      The
      Borrower shall use the proceeds of the Loans solely (a) to pay expenses related
      to the cessation of operations of Interboro, and (b) for the Borrower’s working
      capital and other general corporate purposes. 

     

    Section
      2.03. Mandatory
      Prepayments.

     

    (a) All
      Obligations shall become immediately due and payable, and the Commitment shall
      terminate, (i) upon the consummation of any Sale, (ii) upon the acceleration
      of
      the Obligations by reason of an Event of Default, or (iii) on the Maturity
      Date.

     

    (b) Anything
      elsewhere contained in any Loan Document to the contrary notwithstanding, any
      amounts collected by the Lender in respect of the Obligations during the
      continuance of an Event of Default may be applied to such of the Obligations
      and
      in such order as the Lender may determine in its sole and absolute
      discretion.

     

    Section
      2.04. Further
      Obligations.
      With
      respect to all Obligations for which the interest rate is not otherwise
      specified herein (whether such Obligations arise hereunder, pursuant to the
      Note
      or otherwise), such Obligations shall bear interest at the rates in effect
      from
      time to time pursuant to the Note.

     

    Section
      2.05. Obligations
      Unconditional.
      The
      payment and performance of all Obligations shall constitute the absolute and
      unconditional obligations of the Borrower, and shall be independent of any
      defense or rights of set-off, recoupment or counterclaim which the Borrower
      might otherwise have against the Lender, and regardless of the value or adequacy
      of any Collateral. All payments required by this Agreement and/or the Note
      shall
      be paid free of any deductions or withholdings for any taxes or other amounts
      and without abatement, diminution or set-off. If the Borrower is required by
      law
      to make such a deduction or withholding from a payment, the Borrower shall
      pay
      to the Lender such additional amount as is necessary to ensure that, after
      the
      making of such deduction or withholding, the Lender receives (free from any
      liability in respect of any such deduction or withholding) a net sum equal
      to
      the sum which it would have received and so retained had no such deduction
      or
      withholding been made or required to be made. The Borrower shall: (a) pay the
      full amount of any deduction or withholding, which it is required to make by
      law, to the relevant authority within the payment period set by the relevant
      law; and (b) promptly after any such payment, deliver to the Lender an original
      (or certified copy) official receipt issued by the relevant authority in respect
      of the amount withheld or deducted or, if the relevant authority does not issue
      such official receipts, such other evidence of payment of the amount withheld
      or
      deducted as is reasonably acceptable to the Lender.

     

    Section
      2.06. Reversal
      of Payments.
      To the
      extent that any payment or payments made to or received by the Lender pursuant
      to this Agreement, the Note or any other Loan Document are subsequently
      invalidated, declared to be fraudulent or preferential, set aside, or required
      to be repaid to any trustee, receiver or other person under any state or federal
      bankruptcy or other such law, then, to the extent thereof, such amounts shall
      be
      revived as Obligations and continue in full force and effect hereunder as if
      such payment or payments had not been received by the Lender.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Section
      2.07. Cancellation
      of Prior Commitments.
      The
      Borrower hereby acknowledges and confirms that the Commitment supersedes any
      and
      all prior unfunded credit commitments or financial support commitments made
      by
      the Lender to the Borrower and/or any of its Subsidiaries, all of which prior
      unfunded credit commitments and financial support commitments shall be deemed
      terminated on the Closing Date.

     

    
      	III.	
              REPRESENTATIONS
                AND WARRANTIES

            

    

     

    The
      Borrower hereby makes the following representations and warranties to the
      Lender, all of which representations and warranties shall survive the Closing
      Date, the delivery of the Note and the making of the Loans, shall be continuing
      in nature so long as any Obligations are outstanding, and are as
      follows:

     

    Section
      3.01. Financial
      Matters.

     

    (a) All
      financial statements included in reports filed by the Borrower with the
      Securities and Exchange Commission and heretofore provided by the Borrower
      to
      the Lender in respect of the Borrower or any of its Subsidiaries were prepared
      in accordance with generally accepted accounting principles, are correct and
      complete in all material respects, and fairly present the consolidated financial
      condition of the Borrower and its Subsidiaries as of the dates thereof and
      for
      the periods covered thereby. 

     

    (b) Except
      as
      set forth in Schedule
      3.01
      of the
      Disclosure Schedule, since September 30, 2007, there has been no Material
      Adverse Effect.

     

    Section
      3.02. Organization;
      Corporate Existence.
      The
      Borrower (i) is a corporation duly organized, validly existing and in good
      standing under the laws of the State of Delaware, (ii) has all requisite company
      power and authority to own its properties and to carry on its business as now
      conducted and as proposed hereafter to be conducted, (iii) is not required
      to be
      qualified to do business as a foreign corporation in any jurisdiction in which
      the failure of the Borrower to be so qualified would have a Material Adverse
      Effect, and (iv) has all requisite power and authority to execute and deliver,
      and perform all of its obligations under, this Agreement, the Note and the
      other
      Loan Documents to which it is a party. True and complete copies of the Organic
      Documents of the Borrower, together with all amendments thereto, have been
      furnished to the Lender.

     

    Section
      3.03. Authorization;
      No Conflict.
      The
      execution, delivery and performance by each Loan Party of its obligations under
      this Agreement, the Note and the other Loan Documents have been duly authorized
      by all requisite company or corporate action and will not, either prior to
      or as
      a result of the consummation of the transactions contemplated by this Agreement:
      (a) violate any provision of Applicable Law, any order of any court or other
      agency of government, any provision of the Organic Documents of any Loan Party,
      or, except as set forth in Schedule
      3.03
      of the
      Disclosure Schedule, any Contract, indenture, agreement or other instrument
      to
      which any Loan Party is a party, or by which any Loan Party or any of its assets
      or properties are bound, or (b) be in conflict with, result in a breach of,
      or
      constitute (after the giving of notice of lapse of time or both) a default
      under, or, except as may be provided in this Agreement, result in the creation
      or imposition of any lien of any nature whatsoever upon any of the property
      or
      assets of the Borrower or any of the Subsidiaries pursuant to, any such
      Contract, indenture, agreement or other instrument. No Loan Party is required
      to
      obtain any Government Approval, consent or authorization from, or to file any
      declaration or statement with, any governmental instrumentality or agency in
      connection with or as a condition to the execution, delivery or performance
      of
      this Agreement, the Note or any of the other Loan Documents. All Loan Documents
      to which the Borrower is a party have been or will be duly and validly executed
      and delivered by the Borrower.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Section
      3.04. Harris
      Credit Agreement.
      Except
      for Existing Events of Default, all representations and warranties made by
      the
      Borrower in the Harris Credit Agreement are true and correct in all material
      respects as of the date hereof, and shall remain true and correct in all
      material respects so long as any Obligations are outstanding. 

     

    
      	IV.	
              CONDITIONS
                OF MAKING THE LOANS

            

    

     

    The
      obligation of the Lender to make the Loans hereunder and to consummate the
      other
      transactions contemplated hereby are subject to the satisfaction of the
      following conditions precedent:

     

    Section
      4.01. Representations
      and Warranties.
      The
      representations and warranties set forth in Article III hereof and in the
      Security Agreement shall be true and correct on and as of the Closing Date
      and
      on each subsequent date on which any portion of the Loan is to be
      funded.

     

    Section
      4.02. Loan
      Documents.
      The
      applicable Loan Parties shall have duly executed and/or delivered to the Lender,
      upon the execution of this Agreement, all of the following:

     

    (a) The
      Note;

     

    (b) The
      Guaranty;

     

    (c) Evidence
      of all insurance required by this Agreement and the Security
      Agreement;

     

    (d) A
      certificate of the Secretary or an Assistant Secretary of the Borrower and
      each
      Guarantor, respectively, certifying the resolutions authorizing and directing
      the execution and delivery by the Borrower and each Guarantor of this Agreement,
      the Note, the other Loan Documents to which any of them is a party, and all
      further agreements, instruments, certificates and other documents pursuant
      hereto and thereto;

     

    (e) A
      certificate of the Secretary or an Assistant Secretary of the Borrower and
      each
      Guarantor, respectively, certifying the names of the officers of the Borrower
      and each Guarantor who are authorized to execute and deliver this Agreement,
      the
      Note, the other Loan Documents, and all other agreements, instruments,
      certificates and other documents to be delivered pursuant hereto and thereto,
      together with the true signatures of such officers. The Lender may conclusively
      rely on such certificate until the Lender shall receive any further such
      certificate canceling or amending the prior certificate and submitting the
      signatures of the officers named in such further certificate;

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (f) Certificates
      of the Secretary of State of Delaware, dated reasonably prior to the Closing
      Date, stating that the Borrower and Interboro Holding are duly organized and
      subsisting in such jurisdiction; 

     

    (g) A
      certificate of the Secretary of State of New York, dated reasonably prior to
      the
      Closing Date, stating that TCI is duly organized and subsisting in such
      jurisdiction;

     

    (h) A
      certificate of the Secretary of Commonwealth of Pennsylvania, dated reasonably
      prior to the Closing Date, stating that PSB is duly organized and in good
      standing in such jurisdiction;

     

    (i) 
      Such
      other agreements, instruments, documents and certificates as the Lender or
      its
      counsel may reasonably request. 

     

    Section
      4.03. Warrant
      Amendment.
      The
      Borrower shall have executed and delivered to the Lender amendments to the
      outstanding warrants held by the Lender to purchase shares of common stock
      of
      the Borrower, providing for (a) the reduction of the exercise price of one-half
      of such warrants to $.01 per share, and granting to the Lender the right, with
      respect to the other one-half of such warrants, to require the Borrower to
      repurchase such warrants for cash at a price of $.50 per warrant, all such
      exercise and purchase prices to be subject to adjustment in a manner consistent
      with the adjustment provisions of the warrants; such amendments to be in form
      and substance reasonably satisfactory to the Lender. 

     

    Section
      4.04. Forbearance
      Agreement.
      The
      Borrower shall have executed and delivered the Forbearance
      Agreement.

     

    Section
      4.05. Other
      Financing.
      The
      transactions contemplated by the Subsidiary Revolving Credit Agreement shall
      have been consummated on terms and conditions satisfactory to the
      Lender.

     

    Section
      4.06. Interboro
      Closing.
      The
      Borrower shall have made a public announcement of the cessation of all
      instruction and other services by Interboro at the close of the current teaching
      semester (provided that same shall not preclude the use of Interboro’s
      facilities by TCI in order to continue instruction programs for existing
      Interboro students).

     

    Section
      4.07. Board
      of Directors.
      The
      Board of Directors of the Borrower shall be expanded such that the entire such
      Board of Directors shall be increased from seven (7) members to eleven (11)
      members, and, prior to the making of the Loan referred to in Section 2.01(a)(ii)
      above, the Borrower shall have used its best efforts to fill the four (4)
      vacancies thereby created with individuals, acceptable to both the Lender and
      the Borrower, who are independent of and not affiliated with the Borrower,
      any
      of its Subsidiaries, or the Lender; and, to the extent that any such vacancies
      remain after the making of the Loan referred to in Section 2.01(a)(ii), the
      Borrower shall thereafter continue to use its best efforts to fill such
      vacancies.

     

    Section
      4.08. Funding
      Request.
      The
      Borrower shall make written request to the Lender for the funding of the subject
      Loan at least one (1) Business Day prior to the requested funding date, which
      written request shall (a) state the amount of the requested Loan, the requested
      funding date of such Loan, and the bank account(s) to which the requested Loan
      is to be funded, (b) certify that no Default or Event of Default has
      occurred and is continuing, and (c) include a general description of the
      proposed use of the proceeds of such Loan, which shall be generally consistent
      with the Approved Budget.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    Section
      4.09. Fees
      and Reimbursements.
      The
      Borrower shall have paid or reimbursed the Lender for its out-of-pocket costs,
      charges and expenses incurred hereunder to the date of funding of the subject
      Loan. Failure of the Lender to make any such deduction or charge shall not
      excuse the Borrower from its obligation to pay any and all such
      amounts.

     

    Section
      4.10. Further
      Matters.
      All
      legal matters, the form and substance of all documents, and any inspection
      of
      the Aircraft required by the Lender, incident to the transactions contemplated
      hereby shall be satisfactory to the Lender and its counsel.

     

    Section
      4.11. No
      Default.
      No
      Default or Event of Default shall have occurred and be continuing.

     

    
      	V.	
              AFFIRMATIVE
                COVENANTS

            

    

     

    The
      Borrower hereby covenants and agrees that, from the date hereof and until all
      Obligations (whether now existing or hereafter arising) have been paid in full,
      the Borrower shall, and shall cause each of its Subsidiaries to:

     

    Section
      5.01. Harris
      Credit Agreement.
      Comply
      with all covenants and agreements applicable to the Borrower and its
      Subsidiaries under the Harris Credit Agreement. 

     

    Section
      5.02. Notice
      of Proceedings.
      Give
      prompt written notice to the Lender of (a) any proceedings instituted against
      the Borrower or any Subsidiary in any federal or state court or before any
      commission or other regulatory body, whether federal, state or local, which,
      if
      adversely determined, could have a Material Adverse Effect, and (b) the
      occurrence of any material casualty to any of the Collateral or any Default
      or
      Event of Default, and the action that the Borrower has taken, is taking, or
      proposes to take with respect thereto.

     

    Section
      5.03. Information.
      Furnish
      to the Lender (a) as and when delivered to any other holder(s) of Indebtedness
      of the Borrower or any Subsidiary, all financial statements and other
      information and notices provided to any such holder(s), and (b) from time to
      time, such other financial and other information regarding the Borrower and
      the
      Subsidiaries as may reasonably be requested by the Lender. 

     

    Section
      5.04. Books
      and Records; Inspection.
      Maintain centralized books and records regarding the Business at the Borrower’s
      principal place of business, and permit agents or representatives of the Lender
      to inspect, at any time during normal business hours, upon reasonable notice,
      and without undue material disruption of the Business, all of the Borrower’s and
      its Subsidiaries’ various books and records, to make copies, abstracts and/or
      reproductions thereof, and to discuss the Business and affairs of the Borrower
      and the Subsidiaries with the management of the Borrower.

     

    Section
      5.05. Reimbursements.
      Pay or
      reimburse the Lender or other appropriate Persons on demand for (a) all costs,
      expenses and other charges incurred or payable in connection with the
      transactions contemplated by this Agreement, regardless of whether the
      transactions are in fact consummated, including but not limited to any and
      all
      search fees, recording fees and legal fees, and (b) all costs and expenses
      (including reasonable attorneys’ fees and search fees) incurred by the Lender
      from time to time in connection with any waiver, amendment or other modification
      with respect to this Agreement, any other Loan Document or any Loan, any
      enforcement, restructuring or “workout” of any of the foregoing and/or in
      connection with any bankruptcy or insolvency proceeding relating to the Borrower
      or any other Loan Party, and/or any other matter (other than the Lender’s
      customary overhead expenses) relating to this Agreement, any Loan Document
      and/or any Loan.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      5.06. Interboro
      Closing.
      Cease
      the provision of all instruction and other services by Interboro not later
      than
      January 1, 2008, except that Interboro may make available to TCI the use of
      Interboro’s facilities as and to the extent requested by TCI in order for TCI to
      continue the instruction programs for existing Interboro students.

     

    Section
      5.07. Officer
      Hiring.
      Hire a
      new chief financial officer or chief restructuring officer of the Borrower
      reasonably acceptable to the Lender, who shall begin full-time employment with
      the Borrower not later than February 29, 2008.

     

    
      	VI.	
              NEGATIVE
                COVENANTS

            

    

     

    The
      Borrower hereby covenants and agrees that, until all Obligations (whether now
      existing or hereafter arising) have been paid in full, unless the Lender shall
      otherwise consent in writing, the Borrower shall not, and shall not permit
      any
      Subsidiary to, directly or indirectly:

     

    Section
      6.01. Harris
      Credit Agreement.
      Fail to
      comply with any of the negative covenants contained in the Harris Credit
      Agreement. 

     

    Section
      6.02. Restricted
      Payments.
      Directly or indirectly (a) redeem, purchase or otherwise acquire for
      consideration any equity interests or membership interests in the Borrower
      or
      any other Person, or create any sinking fund therefor, (b) make payment of
      any
      fees or other compensation or remuneration to current directors of the Borrower
      except in the form of common stock of the Borrower, (c) make any payments that
      are not included in the Approved Budget without the prior written consent of
      the
      Lender, or (d) make any loans or advances to any Affiliates of the Borrower,
      or
      engage in any other transaction with any Affiliate of the Borrower other than
      (i) loans or advances to Interboro for the purpose of paying expenses relating
      to the cessation of the operations of Interboro, and (ii) with TCI and/or PSB
      on
      an arm’s length basis in the normal course of business.

     

    
      	VII.	
              DEFAULTS

            

    

     

    Section
      7.01. Events
      of Default.
      Each of
      the following events is herein, and in the Note and the other Loan Documents,
      sometimes referred to as an Event of Default:

     

    (a) if
      any
      representation or warranty made herein or in any other Loan Document, or in
      any
      report, certificate, financial statement, instrument or other statement
      furnished in connection with this Agreement or the borrowing hereunder, shall
      be
      false, inaccurate or misleading in any material respect when made or when deemed
      made hereunder;

     

    (b) any
      default in the payment of any principal or interest under the Note or any other
      Obligations of the Borrower to the Lender when the same shall be due and
      payable, whether at the due date thereof or at a date required for prepayment
      or
      by acceleration or otherwise, and the continuance of any such non-payment (in
      whole or in part) for a period of three (3) Business Days;

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c) any
      default in the due observance or performance of any covenant, condition or
      agreement contained in any Section of Article VI hereof, which, if capable
      of
      being cured, is not fully cured within thirty (30) days after the occurrence
      thereof (provided that, in the case of Section 6.01, the applicable cure period
      shall be the cure period, if any, provided in the Harris Credit
      Agreement);

     

    (d) any
      default in the due observance or performance of any covenant, condition or
      agreement to be observed or performed under Article V hereof, or otherwise
      pursuant to the terms hereof or of any other Loan Document, and the continuance
      of such default unremedied for a period of ten (10) Business Days after written
      notice thereof to the Borrower (provided that (i) if such Default is not
      objectively capable of being cured with ten (10) Business Days, then, provided
      that the Borrower has commenced the cure within such ten (10) Business Day
      and
      at all times diligently pursues the completion of such cure, such cure period
      shall be extended for such period of time as may reasonably be required to
      complete such cure, but in no event to a date later than sixty (60) calendar
      days after the occurrence of the subject Default, (ii) no grace period shall
      apply to any failure to maintain any required insurance, and (iii) in the case
      of Section 5.01 above, the cure period shall be the cure period, if any,
      provided in the Harris Credit Agreement);

     

    (e) (i)
      any
      default with respect to any indebtedness for money borrowed of the Borrower
      or
      any of the Subsidiaries (other than to under this Agreement) in an amount
      (individually or in the aggregate) in excess of $100,000, if the effect of
      such
      default is to permit the holder to accelerate the maturity of any such
      indebtedness for money borrowed or to cause such indebtedness for money borrowed
      to become due prior to the stated maturity thereof, or (ii) the occurrence
      of
      any “Event of Default” under and as defined in the Harris Credit Agreement or
      under the Subsidiary Revolving Credit Agreement (other than, in the case of
      clauses (i) and (ii), Existing Events of Default, and any default under the
      Convertible Notes resulting from the consummation of this Agreement);

     

    (f) if
      any
      Loan Party (other than Interboro) shall: (i) apply for or consent to the
      appointment of a receiver, trustee, custodian or liquidator of it or any of
      its
      properties, (ii) admit in writing its inability to pay its debts as they mature,
      (iii) make a general assignment for the benefit of creditors, (iv) be
      adjudicated a bankrupt or insolvent or be the subject of an order for relief
      under Title 11 of the United States Code, or (v) file a voluntary petition
      in
      bankruptcy, or a petition or an answer seeking reorganization or an arrangement
      with creditors or to take advantage or any bankruptcy, reorganization,
      insolvency, readjustment of debt, dissolution or liquidation law or statute,
      or
      an answer admitting the material allegations of a petition filed against him
      or
      it in any proceeding under any such law, or (vi) take or permit to be taken
      any
      action in furtherance of or for the purpose of effecting any of the
      foregoing;

     

    (g) if
      any
      order, judgment or decree shall be entered against any Loan Party (other than
      Interboro), without the application, approval or consent of such Loan Party,
      by
      any court of competent jurisdiction, approving a petition seeking reorganization
      of such Loan Party, or appointing a receiver, trustee, custodian or liquidator
      of such Loan Party, or of all or any substantial part of its assets, and such
      order, judgment or decree shall continue unstayed and in effect for any period
      of sixty (60) days;

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (h) if
      final
      judgment(s) for the payment of money in an uninsured amount in excess of
      $250,000 individually or in the aggregate shall be rendered against the Borrower
      and/or any of the Subsidiaries, and the same shall remain undischarged or
      unbonded for a period of thirty (30) consecutive days, during which execution
      shall not be effectively stayed; 

     

    (i) any
      disclaimer by any Loan Party of any Obligations under any Loan Document, or
      any
      purported termination by any Loan Party of any Loan Document;

     

    (j) any
      use
      of any proceeds of any Loan other than as provided in Sections 2.02 and 4.03
      above; 

     

    (k) it
      is or
      becomes unlawful for any Loan Party to perform its obligations under this
      Agreement or any of the other Loan Documents to which it is a party;

     

    (l) if
      any
      regulatory or accrediting authority having jurisdiction over any Loan Party
      shall assert or impose any fines or penalties exceeding $25,000 in the aggregate
      on any Loan Party (other than Interboro) which have not been asserted or imposed
      in writing prior to the date of this Agreement; or if any such regulatory or
      accrediting authority shall assert or impose any such fines or penalties against
      Interboro and shall also assert that any other Loan Party has liability for
      the
      payment thereof; or 

     

    (m) the
      Borrower exceeds by more than 10% its expenses projected in the Approved Budget
      for any month or on a cumulative basis from the Closing Date.

     

    Section
      7.02. Remedies.
      Upon
      the occurrence of any Event of Default, and at all times thereafter during
      the
      continuance thereof: (a) the Note, and any and all other Obligations of the
      Borrower to the Lender, shall, at the Lender’s option (except in the case of
      Sections 7.01(f) and 7.01(g) hereof, the occurrence of which shall automatically
      effect acceleration of the Obligations and termination of the Commitment,
      regardless of any action or forbearance in respect of any prior or ongoing
      Default or Event of Default which may be inconsistent with such automatic
      acceleration and termination), become immediately due and payable, both as
      to
      principal, interest and other charges, without presentment, demand, protest
      or
      notice of any kind, all of which are hereby expressly waived, anything contained
      herein or in the Note or other evidence of such Obligations to the contrary
      notwithstanding, (b) if the entire principal of the Commitment was not
      theretofore funded to the Borrower, then the Lender may terminate the remaining
      unfunded portion of the Commitment, (c) all outstanding Obligations under the
      Note, and all other outstanding Obligations, shall bear interest at the default
      rate of interest provided in the Note, (d) the Lender may file suit against
      the
      Borrower on the Note and/or against the Guarantors under the Guaranty and/or
      seek specific performance or injunctive relief thereunder (whether or not a
      remedy exists at law or is adequate), (e) the Lender may exercise all available
      rights and remedies against the Collateral and otherwise under any and all
      Loan
      Documents, and (f) the Borrower shall cause either (i) the cancellation and
      return of any and all then outstanding letters of credit provided by or on
      behalf of the Lender for the benefit of the Borrower or any of its Subsidiaries,
      or (ii) post cash collateral with the Lender in an amount equal to 100% of
      the
      undrawn amount of any and all such outstanding letters of credit.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	VIII.	
              MISCELLANEOUS

            

    

     

    Section
      8.01. Survival.
      This
      Agreement and all covenants, agreements, representations and warranties made
      herein and in the certificates delivered pursuant hereto, shall survive the
      making by the Lender of the Loans, and the execution and delivery to the Lender
      of the Note, and shall continue in full force and effect for so long as the
      Note
      or any other Obligations are outstanding and unpaid. Whenever in this Agreement
      any of the parties hereto is referred to, such reference shall be deemed to
      include the successors and permitted assigns of such party; and all covenants,
      promises and agreements in this Agreement contained, by or on behalf of the
      Borrower, shall inure to the benefit of the successors and assigns of the
      Lender.

     

    Section
      8.02. Indemnification.
      The
      Borrower shall indemnify the Lender and its directors, managers, officers,
      employees, attorneys and agents against, and shall hold the Lender and such
      Persons harmless from, any and all losses, claims, damages and liabilities
      and
      related expenses, including reasonable counsel fees and expenses, incurred
      by
      the Lender or any such Person arising out of, in any way connected with, or
      as a
      result of: (a) the use of any of the proceeds of the Loans made by the Lender
      to
      the Borrower; (b) this Agreement, the ownership and/or operation of the
      Borrower’s and the Subsidiaries’ assets, including any Contract, the performance
      by the Borrower or any other Person of their respective obligations thereunder,
      and the consummation of the transactions contemplated by this Agreement; and/or
      (c) any claim, litigation, investigation or proceeding relating to any of the
      foregoing, whether or not the Lender or its directors, managers, officers,
      employees, attorneys or agents are a party thereto; provided that such indemnity
      shall not apply to any such losses, claims, damages, liabilities or related
      expenses arising from (i) any unexcused breach by the Lender of any of its
      obligations under this Agreement, (ii) the willful misconduct or gross
      negligence of the Lender, provided that any such loss, claim, damage, liability
      or expense is determined by a court of competent jurisdiction by final judgment
      to have resulted from the willful misconduct or gross negligence of the Lender
      and the further finding that such willful misconduct or gross negligence was
      the
      primary cause thereof (i.e., more than 50% of the causation), or (iii) the
      breach of any commitment or legal obligation of the Lender to any Person other
      than the Borrower or its Affiliates, provided that such breach is determined
      pursuant to a final and nonappealable decision of a court of competent
      jurisdiction. The foregoing indemnity shall remain operative and in full force
      and effect regardless of the expiration or any termination of this Agreement,
      the consummation of the transactions contemplated by this Agreement, the
      repayment of the Loan, the invalidity or unenforceability of any term or
      provision of this Agreement or the Note or any other Loan Document, any
      investigation made by or on behalf of the Lender, and the content or accuracy
      of
      any representation or warranty made by the Borrower under this Agreement. All
      amounts due under this Section
      8.02
      shall be
      payable on written demand therefor.

     

    Section
      8.03. Governing
      Law.
      This
      Agreement shall (irrespective of where same is executed and delivered) be
      governed by and construed in accordance with the laws of the State of New York
      (without giving effect to principles of conflicts of laws).

     

    Section
      8.04. Waiver
      and Amendment.
      Neither
      any modification or waiver of any provision of this Agreement, the Note or
      any
      other Loan Document, nor any consent to any departure by the Borrower therefrom,
      shall in any event be effective unless the same shall be set forth in writing
      duly signed or acknowledged by the Lender and the Borrower, and then such waiver
      or consent shall be effective only in the specific instance, and for the
      specific purpose, for which given. No notice to or demand on the Borrower in
      any
      instance shall entitle the Borrower to any other or future notice or demand
      in
      the same, similar or other circumstances.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Section
      8.05. Reservation
      of Remedies.
      Neither
      any failure nor any delay on the part of the Lender in exercising any right,
      power or privilege hereunder or under the Note or any other Loan Document shall
      operate as a waiver thereof, nor shall a single or partial exercise thereof
      preclude any other or future exercise, or the exercise of any other right,
      power
      or privilege.

     

    Section
      8.06. Notices.
      All
      notices, requests, demands and other communications under or in respect of
      this
      Agreement or any transactions hereunder shall be in writing (which may include
      telegraphic or telecopied communication) and shall be personally delivered
      or
      mailed (by prepaid registered or certified mail, return receipt requested),
      sent
      by prepaid recognized overnight courier service, or telegraphed or telecopied
      by
      facsimile transmission to the applicable party at its address or telecopier
      number indicated below.

     

    If
      to the
      Lender:

     

    ComVest
      Investment Partners III, L.P.

    One
      North
      Clematis, Suite 300

    West
      Palm
      Beach, FL 33401

    Attn:
      Larry Lenig and Cecilio Rodriguez

    Telecopier
      # (212) 829-5986

     

    with
      a
      copy to:

     

    Greenberg
      Traurig, LLP

    200
      Park
      Avenue

    New
      York,
      New York 10166

    Attn:
      Alan Annex, Esq.

    Telecopier
      # (212) 801-6400

     

    If
      to the
      Borrower:

     

    EVCI
      Career Colleges Holding Corp.

    One
      Van
      Der Donek Street

    Yonkers,
      New York 10701

    Attn:
      Dr.
      John J. McGrath

    Telecopier
      # (914) 964-8222

     

    with
      a
      copy to:

     

    Technical
      Career Institutes, Inc.

    320
      West
      31st
      Street

    New
      York,
      New York 10001

    Attn:
      Dr.
      John J. McGrath

    Telecopier
      # (212) 330-0898

     

    or,
      as to
      each party, at such other address or telecopier number as shall be designated
      by
      such party in a written notice to the other party delivered as aforesaid. All
      such notices, requests, demands and other communications shall be deemed given
      (a) when personally delivered, (b) three (3) Business Days after being deposited
      in the mails with postage prepaid (by registered or certified mail, return
      receipt requested), (c) one (1) Business Day after being deposited with a
      recognized overnight courier service, addressed as aforesaid and with all
      charges prepaid or billed to the account of the sender, or (d) when sent by
      facsimile transmission to a telecopier number designated by such addressee.
      No
      other method of written notice is precluded.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Section
      8.07. Binding
      Effect.
      This
      Agreement shall be binding upon and inure to the benefit of the Borrower and
      the
      Lender and their respective successors and assigns, except that the Borrower
      shall not assign any of its rights or obligations hereunder without the prior
      written consent of the Lender.

     

    Section
      8.08. Consent
      to Jurisdiction; Waiver of Jury Trial.
      The
      Borrower and the Lender hereby consent to the jurisdiction of all courts of
      the
      State of New York and the United States District Court for the Southern District
      of New York, as well as to the jurisdiction of all courts from which an appeal
      may be taken from such courts, for the purpose of any suit, action or other
      proceeding arising out of or with respect to this Agreement, the Note, any
      other
      Loan Documents, any other agreements, instruments, certificates or other
      documents executed in connection herewith or therewith, or any of the
      transactions contemplated hereby or thereby, or any of the Borrower’s
      obligations hereunder or thereunder. The Borrower hereby expressly waives any
      and all objections which it may have as to venue in any of such courts, and
      also
      waives trial by jury in any such suit, action or proceeding. The Lender may
      file
      a copy of this Agreement as evidence of the foregoing waiver of right to jury
      trial.

     

    Section
      8.09. Severability.
      If any
      provision of this Agreement is held by a court of competent jurisdiction to
      be
      invalid or unenforceable, either in its entirety or by virtue of its scope
      or
      application to given circumstances, such provision shall thereupon be deemed
      modified only to the extent necessary to render same valid, or not applicable
      to
      given circumstances, or excised from this Agreement, as the situation may
      require, and this Agreement shall be construed and enforced as if such provision
      had been included herein as so modified in scope or application, or had not
      been
      included herein, as the case may be.

     

    Section
      8.10. Captions.
      The
      Article and Section headings in this Agreement are included herein for
      convenience of reference only, and shall not affect the construction or
      interpretation of any provision of this Agreement.

     

    Section
      8.11. Counterparts;
      Fax Signatures.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original and all of which shall be deemed one and the same agreement. This
      Agreement and any and all Loan Documents may be executed by fax signatures,
      which shall have the same binding legal effect as ink originals.

     

    Section
      8.12. Sole
      and Entire Agreement.
      This
      Agreement, the Note, the other Loan Documents, and the other agreements,
      instruments, certificates and documents referred to or described herein and
      therein constitute the sole and entire agreement and understanding between
      the
      parties hereto as to the subject matter hereof, and supersede all prior
      discussions, agreements and understandings of every kind and nature between
      the
      parties as to such subject matter.

     

    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto have caused this Agreement to be duly executed by their duly
      authorized officers but all as of the day and year first above
      written.

     

    
      	 	
              COMVEST
                INVESTMENT PARTNERS III, L.P.

            
	 	
              By:
                ComVest III Partners LLC, its General Partner

            
	 	 
	 	
              By: 

            	
              /s/
                Larry E. Lenig,
                Jr.                                    

            
	 	 	
              Name:

            	
              Larry
                E. Lenig

            
	 	 	
              Title:

            	
              Authorized
                Signatory

            
	 	 	 	 
	 	 	 	 
	 	
              EVCI
                CAREER COLLEGES HOLDING CORP. 

            
	 	 
	 	
              By:
                

            	
              /s/
                Dr. John J.
                McGrath                                    

            
	 	 	
              Name:
                

            	
              Dr.
                John J. McGrath

            
	 	 	
              Title:
                

            	
              Chief
                Executive Officer and President

            

    

    

    
      
        
        

      

      
        17EXHIBIT
      10.2

     

    THIS
      NOTE IS SUBJECT TO THE TERMS OF AN INTERCREDITOR AGREEMENT DATED APRIL 24,
      2007
      IN FAVOR OF COMVEST INVESTMENT PARTNERS III, L.P. OR AN AFFILIATE THEREOF,
      AS
      ASSIGNEE OF HARRIS N.A. (THE “INTERCREDITOR AGREEMENT”), WHICH IS INCORPORATED
      HEREIN BY REFERENCE.

     

    
      	
              $700,000

            	
              December
                31, 2007

            

    

     

    PROMISSORY
      NOTE

     

    FOR
      VALUE
      RECEIVED, the undersigned, EVCI CAREER COLLEGES HOLDINGS CORP., a Delaware
      corporation (the “Maker”),
      hereby promises to pay to ComVest Investment Partners III, L.P., a Delaware
      limited partnership (“ComVest),
      or
      registered assigns (hereinafter, collectively with ComVest, the “Payee”),
      the
      sum of Seven Hundred Thousand ($700,000) Dollars or, if less, the aggregate
      unpaid principal amount of all Loans made by the Payee to the Maker pursuant
      to
      the Loan Agreement of even date herewith by and between ComVest and the Maker
      (the “Principal”),
      with
      interest thereon, on the terms and conditions set forth herein and in the Loan
      Agreement. Terms defined in the Loan Agreement and not otherwise defined herein
      shall have the meanings assigned thereto in the Loan Agreement.

     

    Payments
      of principal of, interest on and any other amounts with respect to this Note
      are
      to be made in lawful money of the United States of America.

     

    1. Payments.

     

    (a) Interest.
      This
      Note shall bear interest (“Interest”)
      on
      Principal amounts outstanding from time to time from the date hereof at the
      rate
      of eighteen (18%) percent per annum; provided,
      however,
      that
      during the continuance of any Event of Default under the Loan Agreement, the
      interest rate hereunder shall be twenty (20%) percent per annum. All Interest
      shall be computed on the daily unpaid Principal balance of this Note based
      on a
      three hundred sixty (360) day year, and shall be payable monthly in arrears
      on
      the first day of each calendar month commencing January 1, 2008. On each due
      date for the payment of Interest hereunder, all unpaid accrued Interest
      hereunder shall be added to the Principal of this Note; and, from and after
      the
      due date of such accrued Interest, such Interest which has been added to
      Principal shall bear Interest at the rate(s) per annum in effect from time
      to
      time hereunder, which shall be payable as provided herein. The Payee shall
      record on its books the addition of any and all accrued non-cash Interest to
      the
      Principal of this Note on the scheduled due date thereof; and the Payee’s books
      and records shall be conclusive as to the aggregate Principal balance hereunder
      from time to time, absence manifest error. 

     

    (b) Principal.
      The
      outstanding Principal of this Note shall be payable in full on March 31, 2009,
      or sooner as provided in Section 2(b) below.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c) Non-Business
      Day.
      If any
      scheduled payment date as aforesaid is not a business day in the State of New
      York or the State of Florida, then the payment to be made on such scheduled
      payment date shall be due and payable on the next succeeding business day,
      with
      additional interest on any Principal amount so delayed for the period of such
      delay.

     

    2. Prepayment.

     

    (a) Optional
      Prepayment of Principal.
      Subject
      to the Intercreditor Agreement, all or any portion of the unpaid Principal
      balance of this Note, together with all accrued and unpaid Interest on the
      Principal amount being prepaid, may at the Maker’s option be prepaid in whole or
      in part, at any time or from time to time upon ten (10) days’ prior written
      notice to the Payee.

     

    (b) Mandatory
      Prepayments of Principal.
      The
      entire Principal balance of this Note, and all accrued and unpaid Interest
      hereunder, (i) shall be required to be prepaid upon the consummation of any
      Sale, and (ii) may be required to be prepaid upon the occurrence of any Event
      of
      Default. 

     

    (c) Application
      of Payments.
      Any and
      all prepayments hereunder shall be applied first to unpaid accrued Interest
      on
      the Principal amount being prepaid, and then to Principal. 

     

    3. Events
      of Default.
      The
      occurrence or existence of an Event of Default under the Loan Agreement shall
      constitute a default under this Note and shall entitle the Payee to accelerate
      the entire indebtedness hereunder and take such other action as may be provided
      for in the Loan Agreement and/or in any and all other instruments evidencing
      and/or securing the indebtedness under this Note, or as may be provided under
      the law.

     

    4. Assignment.
      This
      Note shall be binding upon and shall inure to the benefit of the respective
      successors and permitted assigns of the parties hereto, provided that the Maker
      may not assign any of its rights or obligations hereunder without the prior
      written consent of the Payee.

     

    5. Waiver
      and Amendment.
      No
      waiver of a right in any instance shall constitute a continuing waiver of
      successive rights, and any one waiver shall govern only the particular matters
      waived. Neither any provision of this Note nor any performance hereunder may
      be
      amended or waived except pursuant to an agreement in writing signed by the
      party
      against whom enforcement thereof is sought. Except as otherwise expressly
      provided in this Note, the Maker hereby waives diligence, demand, presentment
      for payment, protest, dishonor, nonpayment, default, notice of any and all
      of
      the foregoing, and any other notice or action otherwise required to be given
      or
      taken under the law in connection with the delivery, acceptance, performance,
      default, enforcement or collection of this Note, and expressly agrees that
      this
      Note, or any payment hereunder, may be extended, modified or subordinated (by
      forbearance or otherwise) from time to time, without in any way affecting the
      liability of the Maker. The Maker further waives the benefit of any exemption
      under the homestead exemption laws, if any, or any other exemption, appraisal
      or
      insolvency laws, and consents that the Payee may release or surrender, exchange
      or substitute any personal property or other collateral security now held or
      which may hereafter be held as security for the payment of this
      Note.

     

    
      
         

      

      
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    6. Governing
      Law.
      This
      Note shall be construed in accordance with and governed by the
      laws
      of the State of New York, except to the extent superseded by Federal
      enactments.

     

    7. Consent
      to Jurisdiction; Waiver of Jury Trial.
      The
      Maker hereby consents to the jurisdiction of all courts of the State of New
      York
      and the United States District Court for the Southern District of New York,
      as
      well as to the jurisdiction of all courts from which an appeal may be taken
      from
      such courts, for the purpose of any suit, action or other proceeding arising
      out
      of or with respect to this Note. The Maker hereby waives the right to interpose
      any counterclaims (other than compulsory counterclaims) in any action brought
      by
      the Payee hereunder, provided that this waiver shall not preclude the Maker
      from
      pursuing any such claims by means of separate proceedings. THE MAKER HEREBY
      EXPRESSLY WAIVES ANY AND ALL OBJECTIONS WHICH IT MAY HAVE AS TO VENUE IN ANY
      OF
      SUCH COURTS, AND ALSO WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY SUCH SUIT,
      ACTION OR PROCEEDING. The Payee may file a copy of this Note as evidence of
      the
      foregoing waiver of right to jury trial. 

     

    8. Usury
      Savings Clause.
      All
      agreements between the Maker and the Payee are hereby expressly limited to
      provide that in no contingency or event whatsoever, whether by reason of
      acceleration of maturity of the indebtedness evidenced hereby or otherwise,
      shall the amount paid or agreed to be paid to the Payee for the use, forbearance
      or detention of the indebtedness evidenced hereby exceed the maximum amount
      which the Payee is permitted to receive under applicable law. If, from any
      circumstances whatsoever, fulfillment of any provision hereof or of the Loan
      Agreement or any Loan Document thereunder, at the time performance of such
      provision shall be due, shall involve transcending the limit of validity
      prescribed by law, then, ipso facto, the obligation to be fulfilled shall
      automatically be reduced to the limit of such validity, and if from any
      circumstance the Payee shall ever receive as interest an amount which would
      exceed the highest lawful rate, such amount which would be excessive interest
      shall be applied to the reduction of the principal balance of any of the Maker’s
      Obligations (as such term is defined in the Loan Agreement) to the Payee, and
      not to the payment of interest hereunder. To the extent permitted by applicable
      law, all sums paid or agreed to be paid for the use, forbearance or detention
      of
      the indebtedness evidenced by this Note shall be amortized, prorated, allocated
      and spread throughout the full term of such indebtedness until payment in full,
      to the end that the rate or amount of interest on account of such indebtedness
      does not exceed any applicable usury ceiling. As used herein, the term
“applicable law” shall mean the law in effect as of the date hereof, provided,
      however, that in the event there is a change in the law which results in a
      higher permissible rate of interest, then this Note shall be governed by such
      new law as of its effective date. This provision shall control every other
      provision of all agreements between the Maker and the Payee.

     

    9. Collection
      Costs.
      In the
      event that the Payee shall place this Note in the hands of an attorney for
      collection during the continuance of any Event of Default, the Maker shall
      further be liable to the Payee for all costs and expenses (including reasonable
      attorneys’ fees) which may be incurred by the Payee in enforcing this Note, all
      of which costs and expenses shall be obligations under and part of this Note;
      and the Payee may take judgment for all such amounts in addition to all other
      sums due hereunder.

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF, the Maker has executed this Note on the date first above
      written.

     

    
      	 	
              EVCI
                CAREER COLLEGES HOLDING CORP.

            
	 	 
	 	
              By:

            	
              /s/
                Dr. John J. McGrath

            
	 	 	
              Name:
                

            	
              Dr.
                John J. McGrath

            
	 	 	
              Title:
                

            	
              Chief
                Executive Officer and President

            

    

     

    
      
         

      

      
        4

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